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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (16722)	5/11/2005 10:47:03 PM
From: DavesM	Read Replies (1) \| Respond to of 361358

Here's the point. Clinton favored allowing funds from Social Security being used to purchase other investments than Treasuries (corporate bonds, stocks). And for the same reason given by Bush. Why "private" accounts? I have a feeling that they thought if the Treasury directly invested into corporate stocks and bonds, they'd run into problems with the WTO. Further, they'd probably wanted "private" accounts to quash any complaints that the Government buying $Trillions of stock was socialistic.

To: CalculatedRisk who wrote (16722)	5/11/2005 11:04:29 PM
From: DavesM	Read Replies (4) \| Respond to of 361358

Why is it a fallacy? Currently, the Social Security Surplus counts against the Deficit. If there is no surplus, it can't reduce the Deficit. And something does happen. It means instead of selling bonds to an agency of itself, the Government will have to sell bonds on the open market to the investing community. re:"Also, you keep suggesting that something happens when "there will be NO Social Security surplus to reduce Official Federal Deficit numbers". This is a fallacy. You are correct, payroll taxes fall most on poor and middle income workers. The reason for this, is that poor and middle income workers get a greater return on their contributions when they retire. re: "payroll taxes that falls mostly on low and middle income Americans." We could roll back the 2001 tax cut - though if Bush's Social Security reform goes through, it would hit middle and rich twice. re:"Now you have a $650 Billion per year deficit. What do you do" "Substantial tax receipts in April helped reduce the federal deficit for the current year to date well below the corresponding figure for fiscal year 2004. The Congressional Budget Office (CBO) estimates that, through April, the 2005 deficit was about $235 billion, $49 billion below the shortfall of $284 billion recorded for the same seven-month period in 2004. Much of the rapid growth in receipts was anticipated in CBO's baseline projections. To the extent that the additional strength--especially in corporate tax receipts--persists, the deficit for fiscal year 2005 will probably be well below $400 billion, perhaps in the vicinity of $350 billion" - Update from CBO's May 5, 2005, Monthly Budget Review