Re: Question about President's Social Security plan

From: Jim Blair (jeb_at_wisc.edu)
Date: 01/10/05 

Date: Mon, 10 Jan 2005 13:19:54 -0600

"The Trucker" <mikcob@verizon.net> wrote in message
news:crme0u01u2h@news3.newsguy.com...
> Jim Blair wrote:
> >> >> >> Jim Blair wrote:
> >> >> >>
> >> >> >> >> >>> >
> >> >> >> >> >>> >I am puzzled by the politics of this debate. Bush wants
to
> > (in
> >> >> >> > effect)
> >> >> >> >> >>> >reduce the FICA now with the restriction that the tax
> >> >> >> >> >>> >reduction be invested/saved for future retirement.

Trucker Coburn:

> >> >> >> (snicker) You and The Chimp are definitely on the same page
here.
> > I
> >> >> > wonder
> >> >> >> if it ever occured to any right winged moron that WE can't _all_
> > save
> >> > for
> >> >> >> our retirement ....
> >> >> >
> >> >> > Hi,
> >> >> >
> >> >> > Of course we all can. Anyone and everyone can save and invest.
> >> >
> >> > TC:
> >> >>
> >> >> Again B-Liar changes the basis so as to lie. Saving .ne.
investment.
> >> >>
> >> > ......
> >> >>
> >> >> Stocks would be an "investment" as opposed to a "savings". I have
> >> >> said
> >> > that
> >> >> we all can't "save" at the same time. There is a flaw in this but
you
> >> >> will not find it. ....
> >> >
> >> >> A share of stock is an investment as opposed to a "savings", ....
etc.
> >> >
> >> > Hi,
> >> >
> >> > When I say that I "saved for my retirement" since 1966, what I mean
by
> >> > that is each year I "saved" about 10% of my income by not spending it
> >> > on consumption and instead bought stock mutual funds and bond mutual
> >> > funds with
> >> > that money. I call that "saving and investing". I "saved" money by
> >> > "investing" it. Understand? My "savings" were "invested". Same
> > dollars.
> >> > Where is the lie?
> >>
> >> I do not care a rat's *** about what you did, Blair.
> >
> > Hi,
> >
> > You seem unable to grasp an abstract concept. I thought maybe if I put
it
> > in terms of a specific example (me) that could in principle be extended
to
> > anyone (and to everyone), then you could grasp it. But I was wrong :-(
> >
> >>
> >> You entered: "That is why Bush has the right idea. If WE save for our
> >> retirement, the government does not have to save for our retirement."
> >>
> >> And I said that "we" cannot all "save" for our retirement at the
> >> same time. You then drag in "investment" and claim
> >> that I am wrong in my position that saving up a bunch of bucks/bonds
> >> is no more workable for all of us to do individually than it is for
> >> government to do it collectively.

jeb:
> >
> > I did that because you seemed to understand that we all could "invest",
> > and do not realize that the money that A "saves" can be "invested" by B.
> >
> > To a first approximation, saving equals investment. Unless by "saving"
> > you mean only money stuck in a mattress.
>
> That is what "save" means Blair. It means forgone consumption. It
> has _NOTHING_ to do with _investing_.
....

> There is no absolute link between saving and investing.
......

>....And I said that it makes no
> difference whether the government "saves" by buying bonds or all
> the individuals "save" by buying the same bonds. If you want to let
> the individuals but differing kinds of bounds then some will lose
> ans some will win.

Hi,

While the Bush plan is not in its final form, I think it clear that he would
permit individuals to
INVEST in both stocks and various kinds of bonds (corporate and government)
with money
that would otherwise go to FICA.

>...But the overall savings still will not change and
> will do no good. You should go visit Hummel instead of suggesting
> that trio for me.

That would be the case if there were no connection between buying corporate
and municiple bonds, and
corporate stocks and investment. And you are not the only one to deny any
connection.

But I say they are connected: when you buy a bond, the company or city or
whoever issued the bond
uses the money you gave them to build something. When you buy a CD from a
Savings & Loan, the
S&L uses that money to help someone else buy or build a house, etc.

I don't agree with the calim that people buying stocks, bonds or CD's will
"do no good".

>
> >>....This shifting of ground and
> >> placing words into the mouth of the opponent is typical
Blair/Republican
> >> lying.
> >>
> >> The lie is in inserting the word "investing" into the discussion as
> >> though this was part of what you originally said ....

jeb:
> >
> > It was. As in "save and invest".

> We can all learn a lesson here: Mr. B-Liar cut the original verbage
> so as to lie about how the word "invest" was part of it. This is
> _very_ Republican in that any data that does not support your position
> is simply eliminated or edited out.

Re-read the last line of my opening starement above.

....

jeb:

> > Sounds like you are advising people NOT to buy stocks and bonds today.
Is
> > that correct?
>
> Not actually. Not so long as they are doing it _freely_. It
> is still possible to get ahead individually by knowing who has the
> most political clout, for instance. Who will be able to extract the
> most rent in the future due to their government supported monopoly
> privileges. But this is not what is meant by "investments" that
> increase future productivity.
>
> >>
> >> >> However, the construction
> >> >> of more hydroelectric dams and fish ladders, and the creation and
> >> >> maintenance of a better power distribution system, and the proper
> >> >> development of bullet fast trains, and all sorts of other things
> >> >> could be accomplished by government just as well or better than
these
> >> >> things are being done by the rent seeking Repugnican monopolists.
> >> >
> >> > ??? Are you saying that today the government is better at building
> > capital
> >> > for the future than private companies?
> >>
> >> Absolutely not, Blair. I'm saying that government _COULD_ be much
> >> better at it.
> >
> > So you want to depend on government rather then private spending for
> > investment. But not because you think the government HAS or likely WILL
do
> > a better job, but because they _COULD?
>
> I would say that both government and private sector are needed in the
> arena.

And I agree.

>...But SS is not (according to my (and others) definition of that
> system) to be looked at as an "investment" system. It is a social
> insurance system.

Yes. Which is one of its problems. That is why it can't cope with the
changing demographics.

>....When I speak of government "investments" I speak
> of capital infrastructure, and education for instance.

Funded in part by bonds. Of the type that Bush would let individuals buy
with the money that would
otherwise go to FICA.

TC:

> >> Returning to the actual topic, Blair. George Bush and the Republican
> >> party are lying when they say that forcing people to send money
> >> to Wall Street is any kind of "fix" for SS.
> >>
> >
> > Actually his plan would not "force" anyone to buy stocks or bonds.
People
> > would have that as an option if they wanted to, instead of paying the
same
> > money in FICA.
> >
> > You should at least try to understand the issue.
> >
>
> Why is it that cutting fica taxes and eliminating the cap will
> not give people that same option, Blair? THAT is the real issue.
>
But who is proposing that?

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