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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Alighieri who wrote (212826)	12/7/2004 9:34:28 AM
From: Amy J	Respond to of 1572778

Unfortunately, Paul Krugman's estimate of 81% is wildy incorrect. According to SSA economists, the correct figure is 2/3 - that's 1/3 reduction in payout. That's significant. For people living on 955/mo, 1/3 reduction in payout is an extremely substantial drop. So economists in SSA are definitely not going to take kindly to Paul Krugman's white polishing of the true, severity of the problem facing the American people. Krugman is getting his wildly incorrect 81% figure from the Congressional Budget Office, which is filled with a bunch of white polishing Bush cronies. Krugman is definitely correct in stating that the tax for 500,000 would basically pay for this discrepency. He would have done everyone a great service if he would acknowledge the truly bad situation of SS, while offering up this excellent idea, rather than pretending there is no SS problem. He does a great diservice by wrongly implying the reduction isn't a big deal and wrongly stating it is 81%. Where Krugman goes completely wrong is: - Paul's apparent lack of respect for the hardcore Democrat Economists inside SSA that have worked very hard at educating the American people on how they are facing 1/3 reduction in payouts, which is a very, very severe problem for those living on 995/mo. With one article, he undoes ten years of their hard work. For ten years they were ignored because Congressional people and the public do not want to hear about problems. Paul's done a great diservice to SSA economists - people that have the same warm heart he has, mind you. - My generation doesn't trust the govt financially because we've seen an erosion on how SS has been reduced with our parent's generation. SS was first reduced I believe with my Dad's generation. Gen X has also seen a society where corporations violate their pension committments and toss their workers out onto the street, and we have seen teh govt reduce SS. So, Krugman needs to respect the viewpoints of Democratic Gen X and Democratic Gen Ys, and stop thinking purely like a spend-aholic baby boomer generation. Just like my generation wants 401k plans, rather than dishonest pension plans from the boomer generation, my generation also wants to see privatization because we want our money in our name, in our bank account, not in the govt's dishonest hands. Krugman is drastically out of touch with Democrats from my generation. He needs to get with them on this, in all other ways I like his writing, but he's out of date on this item. Probably because he's a boomer from a different generation and probably because he hasn't spoken directly to SSA economists like I have (without the SSA spokesperson blocking the true hard facts from the media.) Paul's article was a diservice to the true problem the SSA economists are having to face with a 2/3 payout aka 1/3 reduction in payout. By the way, the SSA economists would get fired if they talk directly to the media about their economic models, but they can talk to ordinary citizens like me. I was informed in the 1980's by SSA economists that there would be at least a 2/3 reduction. But it took Congress ten years before they would allow SSA economists to print this fact onto the SSA brochures that there will be a reduction of 1/3. So, if you truly want to know what's going to happen to Social Security, you need to ask the SSA economists. Not the media. The SSA economists will tell you TEN years before the information even reaches the media. Congress is about 7 years behind and the media is ten years behind in their knowledge of the problem. Krugman is about a decade behind the facts on this one. Regards, Amy J

To: Alighieri who wrote (212826)	12/7/2004 9:46:49 AM
From: RetiredNow	Read Replies (2) \| Respond to of 1572778

That is a guy who doesn't understand finance. I wish everyone in this country had at least one finance class under their belts, then we could all have an intelligent debate about SS. What is really happening is this. SS is currently running a surplus, that is true. But your SS contributions ARE NOT tagged to your social security number. Instead your contributions go into an SS trust fund that is used to pay current retirees. So when the baby boomers retire in mass over the next 15-20 years, that surplus will not only turn into a deficit, but the baby boomers will deplete the trust fund. The only way to save SS is to start privatizing portions of it now. What that means is diverting some percentage of the contribution to an account tagged to people's SS # and let them invest it at higher rates. That will do two things: 1) reduce the unfunded SS obligation by the diverted amount plus growth and 2) allow the recipient to earn more money on their money by getting a better return than the avg 2% the gov't gives us. It's simple math, but everyone makes it out to be so complex. All of this could have been avoided had the architects of the SS plan just tagged each person's contributions to the system to their SS #. But they meant it to be social welfare, which is never long term sustainable.

To: Alighieri who wrote (212826)	12/12/2004 7:57:42 PM
From: TimF	Respond to of 1572778

it's just a government program supported by a dedicated tax on payroll earnings, just as highway maintenance is supported by a dedicated tax on gasoline. Highway maintenance is different. For one thing it is a much smaller amount of spending. If there is ever a shortage in the money you get from the gasoline tax you could either increase the gas tax or shift other revenue to highway maintenance, without causing an enormous disruption of the countries finances. In this case a difference of size of the program is enough to cause a difference in nature of the types of problems the program can cause. Another very important difference is that demographic changes have negligible impact on highway maintenance while they cause major problems for social security. Also the gas tax, while not precise, does mostly allocate the tax to people who create the cost. If people drive more (causing the need for more maintenance) they also burn more gasoline (creating additional revenue). If on the other hand people live longer after retirement they don't create any additional social security revenue. All in all the programs and the issues with them are vastly different. But it's a problem of modest size. The report finds that extending the life of the trust fund into the 22nd century, with no change in benefits, would require additional revenues equal to only 0.54 percent of G.D.P. That's less than 3 percent of federal spending - less than we're currently spending in Iraq. And it's only about one-quarter of the revenue lost each year because of President Bush's tax cuts - roughly equal to the fraction of those cuts that goes to people with incomes over $500,000 a year. 1 - Such claims that social security only needs a small tax increase to solve all the problems have been made before. Than a few years later its discovered that the problem has not really been resolved. I don't think a social security tax increase equal to 0.54 percent of the current GDP is likely to solve any serious problem with social security. 2 - Even if the social security "trust fund" can be increased to the point that it will never run short it doesn't mean that the social security problem is resolved. The "trust fund", is government IOUs to itself. When the IOUs come due they have to be paid. There is no actual trust fund to get the money from. Presumably you would get the money from the income tax. So maybe you get a small social security tax increase and a large income tax increase. You still have a problem. You still are hurting the economy and creating a difficult political situation. Tim