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Bush "Explains" His Social Security Scam

argexpat

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Over the weekend, Bush was asked how his plan would ensure that Social Security won't run out of money down the road. Here is our illustrious, Harvard-MBA president's answer, taken verbatim from the White House website:

"Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

"Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

"Okay, better? I'll keep working on it."

Maybe his earpiece was on the fritz that day.
 

HighSpeed

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Nothin against the rich, but only the rich will benefit from this. The middle class is screwed on this. The average high school drop out, people making min wage, or uneducated people will not invest their money on this plan.

GW is spending the surplus money, if he didnt spend it, there would be money there and SS will be ok.
 

Pacridge

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HighSpeed said:
Nothin against the rich, but only the rich will benefit from this. The middle class is screwed on this. The average high school drop out, people making min wage, or uneducated people will not invest their money on this plan.

GW is spending the surplus money, if he didnt spend it, there would be money there and SS will be ok.

Well, yes and no. Social security has had a surplus in past years because the number of people paying into the system was far greater than the number of people receiving benefits. The entire system was set up as a pay in- pay out system. Social Security didn't start, then wait 40-50 years for the people who began paying into it to retire. It started and the people paying into paid for the people who were retired. No problem- as long as more people were paying in then receiving benefits. Then as the age of the US population swifted and became older the ratio of people paying into it as to people taking out of it was reduced. So the idea that Social security would be alright if we simply didn't borrow and spend the surplus is not entirely correct.

Plus, you just can't pin the spending of the surplus on GWB. He's not the first guy to spend/borrow from the program. I'm not a fan of W's- but you can't blame every problem the US has on his administration or him.
 

Pacridge

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argexpat said:
Over the weekend, Bush was asked how his plan would ensure that Social Security won't run out of money down the road. Here is our illustrious, Harvard-MBA president's answer, taken verbatim from the White House website:

"Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

"Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

"Okay, better? I'll keep working on it."

Maybe his earpiece was on the fritz that day.

Like him or dislike him, you have to admit watching GWB speak is a little like watching a drunk cross an icy road. Not pretty.

Even if any of this did make any sense, which I can't seem to make of it. Does any of it address how his plan to swift funds into private accounts somehow fixes the system's funding shortfalls? I know I saw Scott McClellan say, the day after Bush gave his SOTUA, that the accounts don't do anything to fix that problem. So, again Bush's plan doesn't fix anything. But it does remove a whole bunch of money from the system. Money that will have to be borrowed, increasing the deficit even more. I just can't believe that increasing the deficit is a GOP idea. I just don't get it.
 
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anomaly

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Bush's SS plan is a joke. Everyone's probably heard me rant about it (It's in the economics forum if by chance you missed it), but there's something else. What really irks me is how he is flat out lying right now. Bush has said on numerous occasions that SS will go bankrupt in 2042. That's impossible! SS was designed so that it will never go bankrupt, but if nothing is done (or if Bush goes through with his plan) by 2042 you will get less out of the system than you put in.
 

Pacridge

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anomaly said:
Bush's SS plan is a joke. Everyone's probably heard me rant about it (It's in the economics forum if by chance you missed it), but there's something else. What really irks me is how he is flat out lying right now. Bush has said on numerous occasions that SS will go bankrupt in 2042. That's impossible! SS was designed so that it will never go bankrupt, but if nothing is done (or if Bush goes through with his plan) by 2042 you will get less out of the system than you put in.

Oh, come on he's not lying. It's just that he doesn't understand exactly what the term "Bankrupt" means. You know lots of guys with MBA's from Yale could make that mistake.

As for you getting less out of Social Security then you put into. Even after 2042 and the adjusted reductions, that's really not all that likely. Most people who draw benefits from Social Security do so for around 11.5 years, on average. The amount of time it takes to get back, on average, all you've put in the system including interest is a little over 7 years. So even with the reductions most people will see a larger return than what they invested. I'm looking for these numbers in a study that I can cite. John Stossel had them on his 20/20 show last year. One of the solutions he proposed was to limit benefits to retirees who had high income levels from other sources. Say if you were receiving 200K a year from other income sources your social security would be stopped after you recoup all you put in the system. He went to a very wealthy retirement community and ran that idea by them, didn't go over so well.
 

ConservativeShane

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HighSpeed said:
The problem is, he's borrowing money from the surplus and not paying it back.
The problem is you have no idea what you're talking about, and yet you write things anyway.
 

MeChMAN

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So I know this is slightly off the topic but why is that GWB who has put this country in debt is getting a 1/3 larger budget?
 

MeChMAN

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Also Having Bush talk about econmics is like a lephar giving a facial.... It dosen't really work!
 

ConservativeShane

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MeChMAN said:
Also Having Bush talk about econmics is like a lephar giving a facial.... It dosen't really work!
I guess I don't know what a "lephar" is. Man, hearing you telling a joke is like hearing a democrat talk about morality.
 

HighSpeed

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ConservativeShane said:
The problem is you have no idea what you're talking about, and yet you write things anyway.

Since you have nothing helpful to say, why say it? If you don't agree with my opinions, don't agree with it. This forum is about political debate, not criticizing people like you do. I can turn around and say to you, what you just said to me. But I won't do that, I'm better of a person than that.
 

Pacridge

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ConservativeShane said:
I guess I don't know what a "lephar" is. Man, hearing you telling a joke is like hearing a democrat talk about morality.

I'm almost certain he meant "leper." Just as I'm certain you knew exactly what he was trying to spell. You just didn't like the comment- so you thought it would be cute to act dumb. It is an act? Right?
 

Fantasea

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HighSpeed said:
Nothin against the rich, but only the rich will benefit from this. The middle class is screwed on this. The average high school drop out, people making min wage, or uneducated people will not invest their money on this plan.
What I think you are saying is that ignorance is much more expensive than education.

Those who accept the education that the system forces upon them do well, economically.

Those who reject the education that the system forces upon them suffer, economically.

Those who become educated, through their tax contributions, get to support those who reject education.

Those who refuse to become educated then blame everyone else for their misfortune, don't they?

GW is spending the surplus money, if he didnt spend it, there would be money there and SS will be ok.

There is not, and never has been, any surplus social security money. Collections in excess of benefits paid? Yes. Surplus money? No.

Since the Democrats set up the social security system in the 1930s, all of the social security taxes collected have gone, along with all other tax revenues, into the general fund from which all government expenditures are paid.

When you're wearing a pair of pants having a single pocket, it doesn't make any difference. Everything goes into and comes out of the same place.

That's how the federal system works.
 

ConservativeShane

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HighSpeed said:
Since you have nothing helpful to say, why say it? If you don't agree with my opinions, don't agree with it. This forum is about political debate, not criticizing people like you do. I can turn around and say to you, what you just said to me. But I won't do that, I'm better of a person than that.
You're right, the site is about political debate. Therefore I feel the responsible thing to do if I see someone spewing half-truths is call them out on it.
 

Pacridge

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ConservativeShane said:
You're right, the site is about political debate. Therefore I feel the responsible thing to do if I see someone spewing half-truths is call them out on it.

Yet you didn't respond by rebutting anything or pointing out any half truths, did you? Rather, you simply posted a basic insult and left it at that.
 

anomaly

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ConservativeShane said:
The problem is you have no idea what you're talking about, and yet you write things anyway.

If you're so sure he's wrong, then why don't you come in here and explain Bush's 'plan' to me, because the more I look at it, the more I don't understand how anyone could support it.
 

Pacridge

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Fantasea said:
There is not, and never has been, any surplus social security money. Collections in excess of benefits paid? Yes. Surplus money? No.


How are collections in excess of benefits paid not a surplus? That's how I've heard them referred to for years by members of both parties. Haven't I?
 

Fantasea

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Pacridge said:
How are collections in excess of benefits paid not a surplus? That's how I've heard them referred to for years by members of both parties. Haven't I?
I repeat:

There is not, and never has been, any surplus social security money. Collections in excess of benefits paid? Yes. Surplus money? No.

Since the Democrats set up the social security system in the 1930s, all of the social security taxes collected have gone, along with all other tax revenues, into the general fund from which all government expenditures are paid.

When you're wearing a pair of pants having a single pocket, it doesn't make any difference. Everything goes into and comes out of the same place.

That's how the federal system works.


To put it another way, think of a grocer who sells peaches, pears, and grapes. Some months he takes in more on the peaches, some months, its the pears, and some months, its the grapes.

All the money he takes in goes into his checking account.

When the rent is due each month the grocer writes a check to the landlord. Who can tell whether the landlord is getting peach, pear, or grape money? Neither the grocer, nor the landlord cares.

The whole ruckus started when Al Gore invented that imaginary 'lock box' as part of the Dems 'scare the seniors' campaign.

What he didn't realize was that those old codgers weren't as unsophisticated as he thought.
 

Pacridge

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Fantasea said:
I repeat:

There is not, and never has been, any surplus social security money. Collections in excess of benefits paid? Yes. Surplus money? No.

Since the Democrats set up the social security system in the 1930s, all of the social security taxes collected have gone, along with all other tax revenues, into the general fund from which all government expenditures are paid.

When you're wearing a pair of pants having a single pocket, it doesn't make any difference. Everything goes into and comes out of the same place.

That's how the federal system works.

To put it another way, think of a grocer who sells peaches, pears, and grapes. Some months he takes in more on the peaches, some months, its the pears, and some months, its the grapes.

All the money he takes in goes into his checking account.

When the rent is due each month the grocer writes a check to the landlord. Who can tell whether the landlord is getting peach, pear, or grape money? Neither the grocer, nor the landlord cares.

The whole ruckus started when Al Gore invented that imaginary 'lock box' as part of the Dems 'scare the seniors' campaign.

What he didn't realize was that those old codgers weren't as unsophisticated as he thought.

Well that's completely inaccurate. Here's a link to the Social Security Adminstrations web site that explains what they do with the current Surplus.

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



On this page you'll find answers to such questions as:
Q: Does Social Security have dedicated assets invested for my retirement?


A: Social Security is largely a "pay-as-you-go" system with today's taxpayers paying for the benefits of today's retirees. Money not needed to pay today's benefits is invested in special-issue Treasury bonds.

Q: Is there really a Social Security trust fund?

A: Yes. Presently, Social Security collects more in taxes than it pays in benefits. The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security. These bonds totaled $1.5 trillion at the beginning of 2004, and Social Security receives more than $80 billion annually in interest from them. However, Social Security is still basically a "pay-as-you-go" system as the $1.5 trillion is a small percent of benefit obligations.

And according to Social Security Adminstration they even state Bush's plan for the "Surplus" in this Q&A:

Q: Does President Bush have a specific plan to modernize and reform Social Security?

A: No, but the President has established six guiding principles for any reform of Social Security:
  • Preserve Social Security benefits for retirees and near-retirees
  • Use Social Security surplus for Social Security
  • Keep Social Security payroll taxes level
  • Do not have the government invest Social Security funds in the stock market
  • Preserve Social Security's disability and survivors insurance programs
  • Create individually controlled, voluntary personal retirement accounts to augment Social Security
The bipartisan Commission he appointed put forward three models based on these principles. These models are in the process of being discussed, as are other alternatives.


So, I'm sorry, Fantasea you're wrong that there is not and has not ever been any Social Security Surplus.
 
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Fantasea

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Pacridge said:
[/indent]So, I'm sorry, Fantasea you're wrong that there is not and has not ever been any Social Security Surplus.
I read it.

What the SS website says is that Uncle Sam takes the excess and lends it to Uncle Sam who pays interest to Uncle Sam and will, when needed, return the money to Uncle Sam.

If I erred, it was on the number of pockets in the pants. Instead of just one, perhaps there are two. But they're both on the same pair of pants worn by Uncle Sam. One contains the money and the other contains the IOUs he writes to himself.

This tells me, and anyone who looks through the smoke and mirrors, that any surplus is, and always was, mythical, at best.

This financial legerdemain is simply a series bookkeeping entries that amount to a wash. If Uncle Sam ever decides to cash in those Treasury Notes, he'll have to borrow the money to do so. Or else raise your taxes.

Ergo, excess contributions, yes. Surplus, no.

Just for the fun of it, try lending yourself some money and see how it works out. Whether you charge yourself interest is optional.
 

Pacridge

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Fantasea said:
I read it.

What the SS website says is that Uncle Sam takes the excess and lends it to Uncle Sam who pays interest to Uncle Sam and will, when needed, return the money to Uncle Sam.

If I erred, it was on the number of pockets in the pants. Instead of just one, perhaps there are two. But they're both on the same pair of pants worn by Uncle Sam. One contains the money and the other contains the IOUs he writes to himself.

This tells me, and anyone who looks through the smoke and mirrors, that any surplus is, and always was, mythical, at best.

This financial legerdemain is simply a series bookkeeping entries that amount to a wash. If Uncle Sam ever decides to cash in those Treasury Notes, he'll have to borrow the money to do so. Or else raise your taxes.

Ergo, excess contributions, yes. Surplus, no.

Just for the fun of it, try lending yourself some money and see how it works out. Whether you charge yourself interest is optional.

No you erred when you stated Social Security doesn't have and never had any surplus. That's where you erred. Social Security was set-up to run completely separate from the general fund. You said "Since the Democrats set up the social security system in the 1930s, all of the social security taxes collected have gone, along with all other tax revenues, into the general fund from which all government expenditures are paid." It most certainly does not go into the general fund and was not set up as such.

Look, if you prefer to call the excess contributions pears, grapes, peaches or pockets in your jeans, it's makes no difference to me at all. Everyone I've ever heard of , including the Social Security Adminstration and the Federal Government, calls that excess a "surplus."

And your analogy of loaning myself money and charging myself interest doesn't wash either. The Federal Government isn't an individual, it's many things. It's made up of different branches, divisions, subdivision and other departments. The Social Security Administration is one of those branches. It was set up to operate financially separate from the other sections of the government. It's ability to make loans to the general fund is not in question. Though I honestly don't think the general fund was intially suppose to be able to borrow from it. On that issue, I'll have to do some research.
 

ConservativeShane

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anomaly said:
If you're so sure he's wrong, then why don't you come in here and explain Bush's 'plan' to me, because the more I look at it, the more I don't understand how anyone could support it.
I don't have a degree in economics and neither do you. We could talk back and forth indefinitely and never agree with one another. I look at the numbers and see a plan that makes since, I assume you have looked at the numbers and have made your decision. We're a republic democracy for a reason. The best I can do is suggest you read this: Behind Social Security's Big Numbers by Andrew Grossman. Draw whatever conclusion you like from it, but at least read it.
 

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ConservativeShane said:
I don't have a degree in economics and neither do you. We could talk back and forth indefinitely and never agree with one another. I look at the numbers and see a plan that makes since, I assume you have looked at the numbers and have made your decision. We're a republic democracy for a reason. The best I can do is suggest you read this: Behind Social Security's Big Numbers by Andrew Grossman. Draw whatever conclusion you like from it, but at least read it.

How do you know what degree or degrees "anomaly" holds?

Went and reviewed the source you've cited, Heritage Foundation again. Interesting, still doesn't address how removing funds from the system will ensure the system remains solvent. At the end it does make this assessment: "the Social Security’s burden is heavier than we can conscionably pass on to our children and grandchildren." Makes no attempt to explain why we should partially abandon our current system in favor of private accounts. Or how those accounts will lessen any burden on our children or grandchildren.
 
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