Re: Bush busts Social Security with massive deficits
From: The Trucker (mikcob_at_verizon.net)
Date: 09/30/04
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Date: Thu, 30 Sep 2004 14:02:46 -0700
Igor wrote:
> sinister wrote:
>
>> "Igor" <jjweatherby@houston.rr.com> wrote in message
>> news:cYK6d.16902$dh7.5016@fe2.texas.rr.com...
>>
>
>> You're just wrong. Greenspan thinks that the imminent retirement of the
>> Baby Boom generation is going to threaten SS. Yet the fund will remain
>> solvent, according to your definitions, until circa 2040. How many baby
>> boomers will *still be alive* in 2040?
>>
>
> No where do I support the numbers it will be solvent until 2040. There
> are some things the government project could be wrong on. The main
> projection is the COLA. This depends on the low inflation rates of the
> 1990s. These were unprecedenant and unlikely to return. Inflation is
> more likely to be about 4% than 2%. This means much larger increases in
> spending.
>
It ALSO means much more tax revenue if the tax cutting Republicans will
quit giving the rich more and more tax breaks. If money is allowed to
flow into _real_ capital creation and industry instead of being spent
on chicken crap "wars" then we won't have a problem.
>>
>>>nothing to do with deficits or surpluses. If the general budget is in
>>>deficit or surplus does not affect the amount of the social security
>>>trust. All surplus funds must be converted to bonds either way. In the
>>>future benefits will need to be cut or taxes raised.
>>
>>
>> "Future" is > 2040. It's pretty clear from Greenspan and other
>> right-wingers that they're referring to a much sooner date.
>>
> Greenspan is not a right winger. Greenspan has no control over SS
> policy. He has one job that is to head the Fed reserve which controls
> the money supply. Greenspan is an economist who knows something about
> government estimates and what could go wrong with them.
Greenspan has shown himself to be a staunch Republican. Not that it
really means anything. The Democrats have also shown themselves to
be staunch Republicans too.
> I don't think the Constitution has provisions for this. The US
>>
>>
>> The Constitution prevents the government from capriciously depriving
>> people
>> of their *property*. AFAIK it does not say anything about a general bond
>> default.
>>
>> The point I'm making is that tomorrow, a law could be passed cancelling
>> SS. Then it doesn't matter whether SS bonds are repaid or not.
>>
>
> It won't happen. Too many seniors vote and they make too large a portion
> of the voting population. Any congress and President that passes
> anything like this will be out of office the next election. The newly
> elected Congress would quickly reinstate the plans.
Where have you been? In a metal shed for the last 25 years? You have
two choices: A Republican wearing a Republican suit, or a Republican
wearing a Democrat suit. At this point the Republican posing as a
Democrat is the better choice because he has the option to change.
The truly devoted Republican, however, has no real outs. He will
continue his serve the rich policies until he is taken to the
guillotine.
> What is likely to
> happen is caps on COLA and seniors have to pay tax on a larger portion
> of SS benefits.
True. Greenspan and other Republicans are doing all they can to
steal the SS entitlements.
> I know it sounds stupid we are going to give you money
> now you have to pay taxes on it but that is how SS works right now.
> Seniors are taxed on 20% of SS income. It is likely this will rise.
It will rise to the point that SS is no longer a benefit at all if
the Republicans can manage to do it.
>> Of course, *politically* this is untenable *now*. My point is that such
>> a law would *not be unconstitutional*, because SS beneficiaries do not
>> "own" their assets.
>>
>
> This point is true but it is likely that the position you worry about
> will ever be tenable. Birth rates are dropping and people are living
> longer. The majority of the voting population will continue to be people
> of retirement or near retirement age. Cutting off all benefits will
> never tenable under this situation.
But that is why we have the move to allow every Mexican national into
the country and to legalize those already here and to make sure that
they stay "in tune" with their religion and their culture that produces
many children. The United States prior to 1980 was fast becoming
a well educated and self controlled population. The last thing a rent
seeking Republican would ever want.
>> On the other hand, suppose a law was passed that said that all US
>> Treasury
>> debt in private retirement accounts was void. The holders of such
>> accounts could sue, claiming this action was unconstitutional.
>>
> There is nothing in the constitution about guaranteeing entitilements. I
> think our forefathers would have been very much against it. In early
> America war pensions were denied. It was not unconstitual then or now.
> The US Army sent troops to disburse the Bonus army who did not get the
> promised pensions from WWI. The Last survivor of the Bataan death march
> was just recently paid what the government promised. There is nothing in
> the constitution saying entitlements must be paid.
Then we can be very sure that the Republicans will manage to do away
with Social Security very soon.
> This being said Congress will not decrease benefits. Why? You have a
> smaller younger working class of which the majority do not vote. You
> have a large older population drawing SS or close to drawing SS. The
> majority of these people vote. Congress will rape the young worker's
> wages to pay for the voting recipents if they have to. I am much more
> concerned with the young workers of today taking a big hit in living
> standards and employment due to astronomical social security taxes than
> I am with seniors losing benefits.
Then fund the system with a tax that does not just hit the younger
working people or just the working class. Are you brain dead or just
so indoctrinated into Republican double speak that you can't hear
or see?
>>>>The point I'm making is that Uncle Sam owns the SS funds, not the
>>>>worker. That is, the worker does not have a "property interest" in his
>>>>SS balance. So the law could be changed, and you couldn't argue that the
>>>>government was denying you property. I can't believe this is true of
>>>>other Treasury bonds---if the government said "we'll deny this
>>>>particular class of people, who we don't like, their bond payments,"
>>>>then you could sue based on the Constitution---deprivation of
>>>>property---not just statute.
>>>>
>
> No it is quite possible for the government to default on marketable
> debt. It isn't discrimination. It was a choice to default on debt to the
> public. This will not happen because it would ruin the ability of the
> government to ever borrow again. They would change the law so they could
> print money to pay debt before they did this.
They already do that printing of money. But they insist on paying interest
on this money so that fat cat Republicans can lord it over the masses.
>>>
>>>Yes this is true and the strains in the social security trust fund will
>>>most likely lead to higher taxes on today's young workers. Politicans
>>>will not decrease benefits simply because too many SS recipents will be
>>>voting. They will out number the work force and vastly out number the
>>>workers who vote. This will almost inevitably lead to higher SS in a few
>>>years. I don't buy the SS estimates becuase they have to account for COLA
>>>(Cost of Living Adjustments) that were put in place by the Reagan
>>>administration. If the prices of oil keep rising these will be much
>>>larger than estimated.
>>
>>
>> But the SS projections in the Trustees report supposedly make allowances
>> for all these factors.
>>
>> If anything, the Trustees are unduly pessimistic. If their 75-year GDP
>> growth estimates come true, Social Security will be one of our smaller
>> worries.
>>
>
> I can not comment on the GDP growth estimates I haven't seen them. If
> they are more than 1 or 2% a year average growth rates then they are
> dead wrong. This is the growth of GDP rates for the past century. I do
> feel that they probably have misjudged the rate of inflation. Greenspan
> likely has better estimates of future inflation rates, after all the Fed
> can influence these heavily. Inflation rates will affect growth rates
> and how much SS has to spend. They affect growth rates by definition in
> that we measure growth of real GDP.
Most people have no clue as to what a _real_ GDP would be and no clue
as to what inflation actually is. It is the latter that prevents any
_real_ GDP to be factual. If there is no absolute definition of
inflation then there is no way to create a "real" GDP.
>> It depends on the state of the national political economy decades hence.
>>
>>
>
> Which is highly likely to be more controled by seniors. Life spans are
> increasing and birth rates are dropping this means a larger age
> population for decades to come.
See immigration, poor education, and please account for the fact that
our two party system is actually a one party system and thus no one
to vote _for_ that has any chance of being elected.
>
>> Hardly. Low, but not *that* low. If the probability is so low, why do
>> so many right-wingers, including Alan Greenspan, go on about the health
>> of SS (in particular, allusions to 2017, rather than 2040)?
>>
>
> Because the surplus will not last forever. It is not a worry that the
> government will default but that projections by SS are wrong. I can tell
> with certainity that the Fed has better economist doing analysis on
> projections than SS. I would be surprised if SS has any. The BLS and the
> Fed open applications to economist every October. I have yet to see SS
> every advertise for a position open to an economist. If they do they do
> not advertise in the JOE which is what every new PhD from a ranked
> school, current government professional looking to change, and current
> professor wishing to make a change look at. I would be surprised if they
> even have a MA economist working for SS.
As most degreed economists realize that they must support the party
line or not have a job, it is good that the SS administration does
not bother.
> The economist at the Fed usually are not the top students at the top
> universities. These can make much more money elsewhere but they are good
> economist. They can calculate projections much better than SS. Greenspan
> has better information and his information says that the trust fund will
> not last until 2040 even if every penny is paid back and used for SS as
> it must be done by law now. I have known a couple of economist who now
> work for the Fed. They were not the top students in their class but they
> were not the worst. The Fed has much better data collection and much
> better economist doing the analysis. I would take Greenspans projections
> of the cost of security and the rise in SS income over the SS offfice
> any day.
Sure you would...
-- "I know no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education." - Thomas Jefferson. http://GreaterVoice.org
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