Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (671693)	2/8/2005 3:40:17 PM
From: Wayners	Read Replies (1) \| Respond to of 769670

Yea like spending the SS surplus is some new thing. Give it a rest. Raiding the surplus started in earnest a very very long time ago when the Congress was controlled by Democrats. Maybe you remember losers like Tip O'Neil.

To: Kenneth E. Phillipps who wrote (671693)	2/8/2005 4:36:13 PM
From: DuckTapeSunroof	Respond to of 769670

Look Closer! SS actuaries' only projection that shows SS revenues failing below replacement levels, is the projection that starts with an assumption of ONLY 1.9% real growth rate over the next 75 years. NOTE: if that projection is true, then 'private accounts' will return LESS then the old-style accounts, because Bush proposes a 'clawback' of 3% per annum --- the amount they project for T-bond yields. The US economy has ACTUALLY averaged a growth rate of 3.6% over the past 75 years. If one uses the SECOND of the three growth rate guesstimates provided by the SS actuaries (a fairly conservative 2.7% per annum, still significantly below the long-term average of 3.6%), then there is NO SHORTFALL in SS revenues. Sounds like a 'shell game'. The proponents of 'privitized reform' use ONE growth rate estimate (the most pessimistic) to sell people that there is a 'crisis', then use a higher estimate to convince them that the 'private accounts' will earn more: If it ain't broke, don't fix it Commentary: Social Security 'cure' isn't a good idea By Dr. Irwin Kellner, MarketWatch Last Update: 12:01 AM ET Feb. 8, 2005 marketwatch.com{B1935269-866A-491F-90A6-A4A1F46B8EBB}&siteid=mktw HEMPSTEAD, N.Y. (MarketWatch) -- Lost in the debate over the merits and demerits of privatizing Social Security is the very good possibility that such drastic surgery might not be needed. Here is the bottom line right up front: the Social Security system will remain solvent far longer than is generally expected, so there is no need to tinker with it. It is true that demographics appear to be working against this conclusion. Because of a long-term decline in the birth rate combined with increased life expectancy, the number of retirees is growing faster than the number of workers who support them through payroll taxes. But it is also a fact that the date when the system is projected to run out of the funds that it began accumulating back in 1983 has been pushed further into the future with each new projection. Since 1983, revenues from payroll taxes have exceeded benefits paid to retirees. In 2003, income totaled $632 billion while benefits paid were $471 billion. Assets held in special issue U.S. Treasury securities totaled $1.5 trillion (the trust fund), with this amount expected to grow significantly over the next dozen or so years. Ten years ago, the system's actuaries thought the trust fund would be depleted by 2029. Five years ago they thought it would be 2032. Now the date when the surplus is expected to be gone is 2042 -- and the Congressional Budget Office thinks it could be 2052. The reason for these changing projections? More money coming in than previously expected. This alone should signal policymakers that major surgery may not be needed. But when you look at the assumptions underlying these projections, you have to be even more cautious. The system's actuaries actually produce three long-range projections. The one that's been picked by the politicians, pundits and the press and turned into the conventional wisdom is their intermediate projection -- the one that expects the trust fund to be depleted by 2042. But the assumptions underlying these projections are very pessimistic -- especially when it comes to economic growth. The actuaries assume that the U.S. economy will grow by an annual rate of 1.9 percent per year over the next 75 years. This is far below the 3.6 percent average of the past 75 years -- a period that includes the Great Depression. The system's actuaries have a somewhat more optimistic projection. It assumes, among other things, a slightly faster rate of growth of 2.7 percent per year over the same period. While this, too, is below the economy's 75-year average, it shows that the system never runs out of money. That's right, never. So before they start fixing the Social Security system, policymakers should first understand that it's not broken to begin with. Dr. Irwin Kellner is chief economist for MarketWatch. He also is the Weller professor of economics at Hofstra University and chief economist for North Fork Bank. Copyright © 2005 MarketWatch, Inc. All rights reserved.