15-01-2005 01:38									#31
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quote: Originally posted by GePap What deficit?

The anticipated one. Not reffering to the current situation.

	15-01-2005 01:38									#32
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Krugman is torching a strawman, as always. The proposed system will be nothing like the British system.

quote: Many Britons were sold badly designed retirement plans on false pretenses. Companies guilty of "mis-selling" were eventually forced to pay about $20 billion in compensation. Fraud aside, the fees paid to financial managers have been a major problem: "Reductions in yield resulting from providers' charges," the Pensions Commission says, "can absorb 20-30 percent of an individual's pension savings."

The system contemplated will have extremely low annual management fees (on the order of 0.1% of the principle per annum) and will be based on index funds -- i.e., your returns will follow the returns of the overall market. The only way your account could go bust if is the entire market dissolved.

Government workers have this system (called the Thrift Savings Plan) and it has been proven to be very good. Here are the funds available...

quote: – Government Securities Investment (G) Fund – Fixed Income Index Investment (F) Fund – Common Stock Index Investment (C) Fund – Small Capitalization Stock Index Investment (S) Fund – International Stock Index Investment (I) Fund

	15-01-2005 01:46									#33
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Source for that claim?

	15-01-2005 01:49									#34
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See, for example, the Social Security Administration's FAQ about Social Security's future...

http://www.ssa.gov/qa.htm

quote: Q: What is a voluntary personal retirement account? A. There are many possible ways to structure personal accounts. Several proposals recommend that a personal savings account plan for Social Security be modeled after the federal government's Thrift Savings Plan. This very popular plan for federal employees and members of Congress allows a choice of five highly diversified, low-cost mutual funds. In the Thrift Savings Plan, no direct investments in individual stocks are allowed.

Trust me. This is the proposal. There are no others being seriously contemplated.

	15-01-2005 01:59									#35
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from same site:

quote: How big is the future problem? Social Security is not sustainable over the long term at present benefit and tax rates without large infusions of additional revenue. There will be a massive and growing shortfall over the 75-year period. Social Security's Chief Actuary projects that in present-value dollars the total net Social Security cash flow for years 2004 through 2078 is projected to be nearly -$5.2 trillion. When the trust fund balances of $1.5 trillion at the beginning of 2004 are added to this value, we get a financial shortfall (or unfunded obligation) for the 75-year period of $3.7 trillion. This unfunded obligation indicates that if an additional $3.7 trillion had been added to the trust fund at the beginning of 2004, the program would have had adequate financing to meet the projected cost of benefits scheduled in current law over the next 75

For the 75 year period! Of 3.7 Trillion! As was stated before, that is about 50 billion a year! OMG! That is utterly unsustainable! At If current defense spending went forward, in the next 75 years we will spend 30 trillion on military spending......

Damn, this administration is absurd.

	15-01-2005 02:04									#36
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A) The UNRISD can hardly be considered a friend of free marketeers

B) Likewise the same can be said for CENDA.

Given that these are the credentials of this man one strongly wonders whether his biases are more than clouding his article.


C) I love how you made sure not to reference the bottom part of the paper that speaks to a mixed private-public system which I believe is the intent of the US.

namely

quote: The savings in the AFP system—duly reformed to impose serious competition and lower costs—may conform to a good, complementary, second tier in a Chilean pension system that in the end will be recognized not as a private one, but a mixed public-private one.

Now I really need to go and wash up. I feel dirty after looking at a Lyndon Larouche web site. uggg..

	15-01-2005 02:06									#37
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Once that $3.7 trillion is put into future dollars instead of current dollars, the number skyrockets.

But in any event, you don't actually think that we could come up with an extra $3.7 trillion this year, do you?

	15-01-2005 02:11									#38
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How does your first part, that this guy is biased, square with him writing what he does at the end??

Thought, if you note, he states that this mixed system would remain a secondary one to the fullu public pension system.

Make sure to wash your brain while you shower, there seem to be some spiderwebs up there.

	15-01-2005 02:13									#39
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quote: Originally posted by DanS Once that $3.7 trillion is put into future dollars instead of current dollars, the number skyrockets.

So does the price of gum., you point??

quote: But in any event, you don't actually think that we could come up with an extra $3.7 trillion this year, do you?

Why the **** would we have to come up with 3.7 trillion this year, if 50 billion a year would keep the system up?

	15-01-2005 02:15									#40
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quote: Originally posted by GePap Thought, if you note, he states that this mixed system would remain a secondary one to the fullu public pension system.

Much akin to the proposed plan by Bush and according to the DanS figures with builtin caps of mangement fees.

No plan has been posited yet that I am aware of that calls for complete privatization or even majority portion privatization.

Now get your panties unbunched and move on.

	15-01-2005 02:15									#41
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quote: Originally posted by DanS Once that $3.7 trillion is put into future dollars instead of current dollars, the number skyrockets.

Wouldn't current contributions be subject to the same math?

	15-01-2005 02:17									#42
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And then why all the talk about "letting people chose"?

You Ogie are one of these "reasonable" republicans that has constantly underestimated the insanity of our current rulers.

	15-01-2005 02:25									#43
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quote: Originally posted by GePap And then why all the talk about "letting people chose"? You Ogie are one of these "reasonable" republicans that has constantly underestimated the insanity of our current rulers.

Because people like choices. Why are you so authoritarian that you deny them that?

	15-01-2005 02:32									#44
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quote: Originally posted by Ogie Oglethorpe Because people like choices. Why are you so authoritarian that you deny them that?

Because making sure everyone gets a basic minimum of funds is the most important part of a pension system. We don't give people a "choice" of fire departments, or police departments, or militaries. You authoritarian scum

	15-01-2005 02:42									#45
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I'd like a "choice" when it comes to a lot of things... like I want a different president, congress, supreme court... hell, I think we should give people choices in every aspect of society! THAT WOULD BE AWESOME!

	15-01-2005 02:51									#46
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quote: Originally posted by PLATO Wouldn't current contributions be subject to the same math?

Yes thats rather the point. DanS's point was that 3.7 trillion now dollars means significantly higher than 50 billion per anum increases to fund the expected 5.2 trillion now dollar expenditures less the 1.5 trillion now dollars in the fund. I can't be arsed to come up with the real number but it is significantly higher than 50 bil additional GePap claimed to fund the existing ponzi scheme.

Edit - clarification the $50 bil is a correct figure if inflation adjusted during the course of the 75 years or more correctly what DanS says below.

	15-01-2005 02:55									#47
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quote: So does the price of gum., you point??

This is different. The increase in the price of gum will match inflation. The increase in the unfunded portion of Social Security is at a much higher "discount rate" -- about 4-6% higher per annum, rather than the 2% higher per annum of the pack of gum.

quote: Wouldn't current contributions be subject to the same math?

Yes. And let's consider the math you did. Right now, the increase needed for long-term solvency would be about $50 billion per annum. But consider that at least roughly half of the income you quoted is not subject to payroll taxes at all, since payroll taxes top out at $90,000 in income. $50 billion on $2.5 trillion is in the 2% range, not the 1% range that you quoted. Since social security payroll taxes are 12.4% of the first $90,000 in income, a 2 percentage point increase represents a 15% increase in the payroll taxes.

Then consider that this assumes that we fix the problem right now and start pre-paying 2 percentage points additional in payroll taxes in order to just stay above water (i.e., nobody's going to be getting any additional benefit). If we put off fixing social security, and end up with the same system that we have now, we will have to pay very roughly 4 percentage points in additional taxes starting in 35 years -- a 30% increase in the payroll taxes. (Even if you pre-payed the 2 percentage point increase, in 70 years people still would be paying 4 percentage points extra).

Then let's discuss the extra $1.5 trillion that is shown as "funded." Let's face it, this money has been spent by the congress (or more accurately, it already offsets money that has been spent by the congress). It's not coming back. So in addition to the 4 percentage point increase, you have a 1.5 percentage point increase to make this program sustainable.

Adding it all up, we're talking about a 45% increase in payroll taxes, to a total of 18%.

Increasing payroll taxes is a bad idea. It's a regressive tax. Progressives should be apalled at the prospect of an increase in this tax. Further, research shows that a smaller portion of our population will choose to work as taxes increase. This will just exaccerbate the problem of fewer people supporting more retirees.

	15-01-2005 02:55									#48
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quote: Originally posted by GePap We don't give people a "choice" of fire departments, or police departments, or militaries. You authoritarian scum

Gee wow, there is a matter of geogrphy that makes sure we have police where you want them and fire departments where you want them.

Pension seems a bit independent of geography and hence shouldn't be held to the smae closed minded kind of thinking. Open your mind to the possibilities its a new century.

	15-01-2005 02:58									#49
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quote: but her conclusions match those expressed more discreetly in a recent report by Britain's Pensions Commission, which warns that at least 75 percent of those with private investment accounts will not have enough savings to provide "adequate pensions."

Of course, 100% of those Americans who rely on SS alone do not have an adequate "pension". Point?

	15-01-2005 03:11									#50
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quote: Of course, 100% of those Americans who rely on SS alone do not have an adequate "pension".

Unfortunately, this is very true. They aren't eating cat food, but they're just a step above.

	15-01-2005 03:23									#51
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quote: Originally posted by DanS Unfortunately, this is very true. They aren't eating cat food, but they're just a step above.

and the privatization camp wants to cut their benefits (as the Bush plan calls for)

SS isn't in any danger. But the Bush plan will put it in danger.

	15-01-2005 03:23									#52
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quote: Originally posted by GePap I don;t give a **** about having "control", the question is having enough to live on when old.

If you are planning to actually try to live on what the current system is planning on paying you when you retire... you're in serious trouble

	15-01-2005 03:24									#53
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quote: Originally posted by Ming If you are planning to actually try to live on what the current system is planning on paying you when you retire... you're in serious trouble

and the privatization plans I've seen would mean even less than the current system...

	15-01-2005 03:28									#54
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Overall, with the partial privatization, you would be getting more money, even though you would be paid less by the Social Security portion.

	15-01-2005 03:30									#55
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quote: Originally posted by DanS Overall, with the partial privatization, you would be getting more money, even though you would be paid less by the Social Security portion.

that is only for people who have paid into these private accounts... what about the seniors on SS right now? They get their benefits cut.

Private accounts sound nice to someone like me, who is young and can pay into said accounts. But for people at or near retirement, those accounts don't do anything for them.

	15-01-2005 03:34									#56
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quote: Originally posted by Ogie Oglethorpe Yes thats rather the point. DanS's point was that 3.7 trillion now dollars means significantly higher than 50 billion per anum increases to fund the expected 5.2 trillion now dollar expenditures less the 1.5 trillion now dollars in the fund. I can't be arsed to come up with the real number but it is significantly higher than 50 bil additional GePap claimed to fund the existing ponzi scheme. Edit - clarification the $50 bil is a correct figure if inflation adjusted during the course of the 75 years or more correctly what DanS says below.

Beyond you lame use of a discredited and invalid comparison (Thought I guess you have lied to yourself so much you actually believe it), who ever said funds to keep social security going as it is would have to come out of a payroll increase? We can just as well take them out of the general fund.

If the "actual number" is 50 billion is irrelevant- the question is what percentage of the federal bills it will eat up in the future. In the end, Social Security is no budget buster.

Medicare, sure, that will be a massive budget nightmare in just ten years, not social security.

	15-01-2005 03:36									#57
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quote: that is only for people who have paid into these private accounts... what about the seniors on SS right now? They get their benefits cut.

The proposal going around would still give current and soon-to-be retirees their full amount, but would cut the benefits for those for whom choosing private accounts makes sense. I think it's fair for those having the choice to go into private accounts to pay some of the gain back.

	15-01-2005 03:36									#58
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quote: Originally posted by DanS Overall, with the partial privatization, you would be getting more money, even though you would be paid less by the Social Security portion.

You will get more money assuming the market does OK. If the market is in decline for a significant portion of the time your money is there, you will get less money than someone before or after living throught better market years.

	15-01-2005 03:39									#59
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quote: You will get more money assuming the market does OK. If the market is in decline for a significant portion of the time your money is there, you will get less money than someone before or after living throught better market years.

In the past, the stock market has indeed gone sideways for substantial periods of time. But never for a 45 or 50-year stretch. And that doesn't even account for the fact that a substantial portion of the money would be in government bonds, not the stock market.

	15-01-2005 03:42									#60
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quote: Originally posted by DanS The proposal going around would still give current and soon-to-be retirees their full amount, but would cut the benefits for those for whom choosing private accounts makes sense. I think it's fair for those having the choice to go into private accounts to pay some of the gain back.

that's contrary to the plans I've seen... but if what you say is true, that does sound better. However, I'm still skeptical.

Like I said... the people who want this so bad are those who stand to gain substantially from it. (Wall Street) That causes me to be suspicious.