Dr. Strangetax, or How I Learned to Stop Worrying and Love the Idea of Regressive Social Security


Judging by the way things are going, I probably shouldn’t even bother commenting on President Bush’s Social Security reform plan. I use the term “plan” loosely. Having learned the lesson of the Clinton health care plan (which, whether or not one liked it, was an actual plan), the White House has studiously avoided providing an actual proposal upon which legislators might actually vote; when you release an actual proposal, people have a nasty habit of looking closely at it and finding things they don’t like. No, the White House prefers to leave the writing of actual proposals to the legislature. What the White House has would better be called an agenda.

Most people know that the keystone in Mr. Bush’s SS reform agenda is the “personal savings account” or “private savings account,” depending on which side of the fence is bending your ear at the moment. On the stump, Mr. Bush says these little doogadgets are simply to die for: you get to keep your own money, you’ll earn a better rate of return through the miracle of compound interest, you’ll have more money to retire on, and if you somehow are un-American enough to not spend all your money before you die, you get to pass what’s left in your PSA on to your estranged children.

Let’s just assume for a second that this — what Mr. Bush is saying on the stump — is the truth. It isn’t, as his own aides quietly admit to the press when asked, but let’s pretend it is. (In actual truth, there are a host of restrictions on the money in your PSA. In fact, unless you meet certain minimum economic criteria [that is, if you’re too poor], the government “holds” your “personal savings” and doles it out to you a bit at a time through an annuity, and it doesn’t have to give any leftovers to your children. But that’s neither here nor there, since it’s not what the president is telling the American people.)

Here’s how what the president’s describing would work. You, Joe or Jane Punchclock, get to put some percentage of your income, let’s say 8%, since that’s roughly what the SS tax currently is, into an investment account every week of every year of your income-producing life. That’s 8% of your income that’s completely income-tax-free, since it’s taken out of your check before taxes. (Think 401k.) If you are able to hold out enough and invest wisely enough to have more money than you can spend between your retirement and unfortunate demise, you get to pass that on to the little Punchclocks (or your trophy wife, favorite cat, etc.). And, since the Republicans plan to end the estate tax in 2010, your heirs will get every single dime of that money (aside from the legal fees they’ll incur wrangling over it).

The president sells this as a pro-family policy.

My question is: whose family does he think he’s talking about?

In other words, who’s going to benefit most from this “reform” of SS? Families that look like mine, or families that look like his? (And does he know the difference?) Let’s say Mr. & Mrs. Joe Punchclock, a 2-income family with 3 children and no college education, gross $50,000 a year. That means they can, if they choose, hold out and invest $4,000 a year for retirement. Meanwhile, Mr. and Mrs. George H.W. Bush could hold back, say, $80,000 a year for their retirement. Are they going to need that money when they retire? No. So why would they participate in the new SS at all?

Here’s why. Because that’s $80,000 every year. Tax-free. And they’ll never miss it. And since the Bushes are highly educated people, well-connected in financial circles, and are experienced, sophisticated investors, their $80,000 a year is going to earn a much better rate of return than the Punchclocks’ $4,000. And since nearly all of the Bushes’ income is from stock dividends, bond interest, memberships on boards of directors, etc., every dollar anyone invests in the stock market increases their wealth disproportionately — that is, much, much more than it increases the wealth of the Punchclocks or the pedestrian Urbinos.

And when George and Bar finally head off to that big oil company in the sky, they can leave their tidy PSA (from which they haven’t had to spend a single, solitary dime) to all the little Georges and Jebs and Jehosophats. Tax-free. And they can add to it and leave it to their kids. Tax-free. And those kids can do it again. Tax-free.

It’s called untrammelled concentration of wealth, and it’s about as poisonous to a democracy as decreeing that some people’s votes won’t count.

What’s amazing is that they can sell this kind of thing — the elimination of the estate tax and the creation of a tax shelter for intergenerationally hoarded wealth — as somehow being pro-family. The estate tax applies only to estates valued over $1.5 million. Does your family fit that bill? Probably not. Mine certainly doesn’t. Eliminating that tax does nothing for families like mine or yours.

What was it von Hayek, high priest of laissez-faire, called Keynesianism? “The road to serfdom”? Eliminating the estate tax isn’t pro-family. It’s pro-feudalism.

There’s a reason the Founders thought an estate tax was a good idea. (What, you thought FDR invented the estate tax?) There’s a reason every Congress from their day to Dick Armey’s continued to think it was a good idea. What is that reason? An estate tax spreads the wealth, encouraging the growth of the middle class and helping keep the poorest above water. It helps prevent too much wealth from accumulating in too few hands, which is dangerous; just ask the French aristocrats of the 1790s, or a 21st-century Russian. It recirculates wealth through the economy, which causes the economy to grow, increasing everyone’s wealth. Yes, conservatives will blanche, but redistribution of wealth by the government is a necessity in a democracy. Democracies require a large middle class. If wealth is allowed to continue accumulating generation after generation in the hands of a few, the middle class ends up squeezed down to nothing.

And what ever happened to the idea of people working for their wealth? Why is it a good idea for children and grandchildren and great-grandchildren to be completely unproductive, living off the wealth developed by their ancestors? Have you ever met these people? Did you come away thinking, “Gee, wouldn’t it be great if there were more people like that?” I hear Religious Right churchgoers quoting “let him who doesn’t work, not eat” at poor people with vomit-inducing frequency; do these people think Paul wasn’t talking to their mall rats?

The estate tax also encourages private philanthropy, by the way, something that really does seem like a good idea, and that Republicans often give lip service to.

“Personal Savings Accounts” are not a solution to whatever problems Social Security may have. Nor are they intended to be. Nor are they “pro-family.” They are pork-barrel politics for plutocrats. A clever, cynical way of using moralistic language to sell the many on an immoral policy that will benefit the few.


35 Responses to “Dr. Strangetax, or How I Learned to Stop Worrying and Love the Idea of Regressive Social Security”

  1. Al Sturgeon Says:

    Now the gloves are off…

    Okay, a few predictions:

    (Bold one here) Those who dislike President Bush / Republicans will love your article.

    (Getting bolder) Those who love President Bush / Republicans – and think they can do no wrong – will hate it and think you are a liar.

    (Aren’t you glad I’m here to explain all this?)

    My interest is in the reaction of those who support President Bush and the party he leads who, after reasoning through your argument, come to think the President might be feeding the American people a line or two…

    Of course, there’s the rare instance of those who do that and their whole political house of cards come crashing down.

    More often, I suspect that many in the situation I described might agree with your argument, but will choose to employ the “lesser of two evils” reasoning approach (compared to the Dems of course).

    What do you think of that kind of reasoning?

    I remember reading an old David Lipscomb article on religious folks called “A Sectarian vs. a Truth-Seeker” (or something like that). He described 2 types of people: those who defend their party at all costs, and those who are most interested in truth even if it goes against their party.

    The difficulty today it seems is that the two political parties are so close (vote-wise), that many believe that speaking badly about “their man” (even when deserved) might swing the balance to the other side…

    Anyway, you don’t have to take the time to respond, but I’m interested in your take on that type of reasoning…

  2. DocWatson Says:

    I feel you are correct in your analysis of the psa. Politicians often do not tell the whole truth.

    It seems as if Mr. Bush is looking for something to define his presidency other than a failed war and the alienation of our allies.

    This plan as you have pointed out is set up for the rich to continue to become richer. As for the middle income individuals it does not appear that they will benefit anymore than the current plan.

    As a business owner in a small middle/lower class town I need redistribution wealth. If the only people that can afford my services are the wealthy then I will have to close and choose to do something else. It is the middle income that drives my business. These idividuls are not just spending on cosmetic work they are just getting work done and that is what I need to survive. Contrary to popular belief and from listening to my counterparts my money is not made from wealthy individuals it is made from everyone else. I would rather work on Joe Punchclock any day than Joe Millionaire.

  3. sandifarrell Says:

    If the problem were that most Republicans did not understand the consequences of their policies, then articulate explanations like this would be incredibly helpful. But the problem is that a substantial number of Republicans (small-town folks, not just wealthy politicos) agree with the result that wealth is concentrated in the hands of a few people. In the Republican mindset (denoted “Strict Father Morality” by linguistics professor George Lakoff in his seminal book Moral Politics), those few people deserve the wealth that they have accumulated because they have become properly self-disciplined and lived their lives in the correct way. Conversely, those who fail to become wealthy have not been appropriately self-disciplined and deserve their fates. This is an internally consistent moral worldview. Of course, it’s morally abhorrent to “Nurturant Parent” moralists like me and you. But there is no basis for conversation when the premises are this diametrically opposed.

    I do hold out some hope that the number of Nurturant Parent moralists out there is higher than I fear it is, and that some of those people have been hoodwinked by Bush or, more generally, by the packaging and promotion of the brand “Republican” or “conservative” as the new cool thing to identify yourself with.

    But I also fear that the number of people who have any internally consistent moral worldview is quite low, and the others are just being swept along by the tide of crap that’s being propagated by so-called “Christians” who are about politics rather than religion.

  4. juvenal_urbino Says:

    To paraphrase a certain Savior, the shallow we always have with us.

    (Lots of good points in all the comments so far. I just wish guru junior or someone would come along and disagree with them. Kind of a one-sided conversation right now.)

  5. Al Sturgeon Says:

    A good friend of mine misread the first part of my comment – let me explain in case anyone else reads it the same way…

    I’m referring to my, “(Getting bolder) Those who love President Bush / Republicans – and think they can do no wrong – will hate it and think you are a liar.”

    I was trying to say the obvious: Those who think President Bush and the Republican Party as a whole are infallible will have a kneejerk reaction of hate to this article.

    I was NOT saying that those who love President Bush think “they” can do no wrong…

    Me no speaky good English, sometimes. Sorry if anyone else misread and felt insulted – definitely NOT my intent…

  6. dagwud Says:

    If my wife and I got to privately invest 1/3 of what I paid each year in SS, in thirty years we would have $1.7 million. A little more than enough for the other tax benefits you discuss – and I don’t necessarily want it to give to my kids. If I get have mine when through this plan, it’s ok with me if the Bush’s do too. And if they get more because they’ve got more to invest… cool.

  7. Joe Longhorn Says:

    First… a hypothesis on why the comments have been one-sided so far. I submit that most “red-staters” read through the original post, had an “Oh, PLEASE!!” response and went about their merry way.

    (Short aside about the red state/blue state issue. Did you realize that the networks have alternated which party is represented as blue or red from one election to the next? Are we going to reverse our terminology in 2008?)
    For the author of the original post… To base your entire argument against Bush’s SS reform proposal on the idea that this is one man, nay, one family is on a quest to reinstate the feudal system is so far off the left edge of reality as to be laughable. (My hope is that this was just satiric hyperbole that I mistook as your version of the truth) The amount of money that the Bush’s can sock away in a PSA is a mere drop in their oversized ocean of a bank account. It’s beyond the realm of reason to suggest that a family so “highly educated, well connected in financial circles” and that consists of such “experienced, sophisticated investors” would rely on a vehicle such as PSA to maintain their wealth from one generation to the next. There are much more robust financial mechanisms that yield much better returns than one could ever hope to get through the PSA, even with the tax break. The Bush’s aren’t relying on SS to save their family’s bacon now or in future generations.

    If individuals were driven to be responsible for themselves and if we truly ran SS like the insurance plan that it was supposed to be, all of this would be moot. With insurance, not everyone that pays into a system gets a payout. Only those that have a legitimate claim get the payout. With SS, too many Americans have the mindset of “I paid into the system, now I should get back what I paid in.” We have too many people getting SS entitlements – too many people relying on SS as a primary source of income in their “golden years.” The ~8% we put in should go to the people that need it most due to disability or legitimate need. If the money were going to someone that truly needed it instead of someone that decided early in life that they were going to retire on the government teat, most people would have no problem with that.

    I’d be remiss if I did not bring up the point that our SS system is not sustainable in its current form. There may be some debate as to when the system might go broke, but it will go broke unless one of these three things happens:
    (1) We continue to rob other programs to pay for SS.
    (2) We increase tax revenue to pay for SS.
    (3) We reduce entitlements.
    I’m all for door number three, but that will never fly politically.

    Bush is doing what he does best. He takes a stand on a difficult issue and meets it head on. His legacy will not be a failed (by what standards?) war, the alienation of our allies, a shiny new SS system, or a huge nest egg for his offspring.
    His legacy will be that he restored purpose and determination to a nation adrift in nihilism and political correctness.

  8. guru junior Says:

    Ask for guru junior and ye shall receive. I had resolved not to respond anymore since in my last comment I tried to end a discussion with juvenal with what I thought was a polite and cordial comment of his intellect which he responded to by impuning the motives of conservatives everywhere. I read the new column and like Joe Longhorn suspected, I rolled my eyes, but since I was requested, I’ll deliver. I like what Joe Longhorn had to say, here are some observations to add to his: I have yet to hear a single proposal or plan from anyone on the left. It is much easier to point out all the problems and sit back and criticize all the proposed solutions and hope nobody notices. You bash Bush for not writing the plan himself and leaving legislation to the legislature, somehow I bet if he did introduce a written plan, you’d call him an arrogant cowboy and tell him to stop meddling in the congress or scream about separation of powers. It’s obvious you and the other lefties will criticize whatever he does. Next you quibble with semantics of “personal” savings accounts. They are referred to as personal because the money in them is reserved for a specific person not dumped into the general fund to be given to current retirees. This next part I can hardly believe, your point about annuities is correct but that part of the Bush proposal was intended as a sop to the big government crowd. If the money in the PSA were left totally to the discretion of the investor, as was proposed in the 2000 campaign we’d get a steady stream of fear mongering attack ads about Bush privatizing SS into a risky stock market scheme, sound familiar? This is the one part of the plan that you should like, because it will keep your precious bureaucracy in place and certainly you don’t want to trust us feeble minded punchclocks to know what is better for us and our money than some liberal elitist big government socialist in DC. You should be applauding this part of the proposal.
    Moving on to how the fact that the proceeds of these accounts can be passed on tax free and the repeal of the estate tax is somehow not pro family because the Bush clan doesn’t looks like yours. Just because a family doesn’t look like yours does not mean it’s not a family (I think I’ve heard that from liberals before) and just because those who have more to invest reap more doesn’t mean the other families don’t benefit. While we’re talking about the Bushes why don’t you thank them for paying more in estate taxes, capital gains taxes, income taxes and the like than everyone who has logged on to this website combined will ever pay. God bless them and I’m happy for them and hope they enjoy the money they earned and the money derived from investing the money they earned. More on the estate tax: liberals love to champion the working class family like farmers for example, so what about the family farmer who has to sell the farm because he can’t afford to pay the estate tax that came along with the deed when Dad passed it on to him? I could go on and on about the rest of the typical democrat BS in this column: the whole noble poor vs. evil rich theme is as worn out as a $2 hooker, speaking of hookers the only difference between them and the tax and spend, wealth re distribution, socialists on the left is that a hooker will stop screwing you out of the money you earn when you die.

  9. Al Sturgeon Says:

    Being a bear of very little brain, I may screw this up; but being a natural mediator, let me attempt to center the discussion: The point of the original article (to me) seemed to be that the Bush administration’s economic policies continue to follow the path that would result in the greatest benefits being accrued to the most wealthy, but the political front to these policies do not make that claim openly; instead, they portray them as policies that have the common citizen coming first.

    Now Dagwud brings up an interesting question: So what? If the very rich benefit the most, but so do I in the middle class, then what’s the problem? The problem may be that if the trend continues on a downward scale (regressive benefits), then the poorest would benefit the least and defeat the whole idea of Social Security in this instance.

    Joe makes excellent points concerning the Social Security dilemma, namely that the best hope for rescue would involve reducing the beneficiaries to those who truly need it (in effect, taking away as beneficiaries those like the Bush families who do not rely on Social Security for retirement). Joe points out, though, that this is not a viable political option to the administration (adding to the mix that (a) robbing other programs is increasingly unlikely with a ballooning debt – I don’t keep up with this stuff, but I believe it’s ballooning, and (b) that raising taxes is not this administration’s wish).

    So Social Security is screwed it seems…

    But all this just leads back it seems to the original point of the article to discuss: (1) Is the current administration’s idea to solve economic problems in our country to provide greater benefits to the most wealthy, and (2) if so, why is that idea veiled in public presentations?

    To the first idea, the “trickle-down theory” seems to have remained their puppy – that “less-than-elegant metaphor that if you feed the cows enough, the birds will get something to eat.” Either the proponents of this idea are simply greedy, or they truly believe it. I’ll admit that I find it suspicious anytime someone is adamant about a policy by which they would find the greatest benefit, but it’s a theory worth considering. I’m positive many do believe it. In this article, however, Juvenal’s assertion is that the redistribution of wealth in a democracy to the point that a large middle class exists is necessary. I don’t know the answer, but that’s worth talking about.

    And to the second, we all know why it would not be popular to say, “Hey, this would benefit my wealthy family more than it would yours.” To this, I simply say that whether the administration is Republican, Democrat, or whatever – we should expose the true theory behind the policy, and thank God for the free speech to do so. Some may not agree. That’s worth talking about, too.

    I’m not too much a fan of getting to where we start coming across as believing the other side is stupid. Not only does that not seem to accomplish anything, it also blurs reason and distracts from worthy topics of discussion.

    My two cents…

  10. JD Says:

    I thought the comedy article was to appear on another day?

    Someone sounds jealous.

    I think all politicians tell lies.

    I think the Afgahn people are free and Iraq just had elections and other cool stuff is happening in the middle east.

    I think if we keep SS as is, it’s going in the toilet. No one has any wealth in the toilet. Maybe that’s acceptable to the author.

    If the Bush plan is a bust for the American people (which I am willing to admit it could be), and the current plan is a bust (we already know that), then I would like to see a knight come riding in to rescue us with a great idea.

    Just a few scattered thoughts.

  11. Al Sturgeon Says:

    Okay, Mr. Mediator back with a case study in human communication: Guru, Jr. and Juvenal.

    Last week, Guru, Jr. posted a reply to the original article and initiated an intelligent exchange. At the end, he complimented Juvenal’s intellect and suggested that their continued exchanges might strengthen two impressive intellects (steel sharpening steel).

    Instead of a returned compliment that Guru expected I’m deducing, Juvenal’s response was that he didn’t intend on getting into lengthy exchanges in the comments section because of the time it would end up consuming.

    Being an astute student of human interaction (and knowing Juvenal personally), here’s what happened.

    TO GURU IT SOUNDED LIKE: Thanks for complimenting me, but I don’t plan to waste my time on you.

    TO JUVENAL IT SOUNDED LIKE: Thanks for the offer, but I don’t plan on getting into lengthy exchanges.

    So… Tension.

    Guru felt slighted and read the next week’s article. In the comments section, Juvenal said he wished someone like Guru would offer an opposing comment for discussion.

    Based on the earlier miscommunication…

    TO JUVENAL IT SOUNDED LIKE: Anonymous stirred the pot badly last week; I wish someone more capable like Guru would stir the pot so that a real discussion could take place.

    TO GURU IT SOUNDED LIKE: I wish that moron Guru would pipe up so I could make fun of him.

    So… Greater tension.

    Now Guru chooses to respond, and by the time his comment is finished, we have moved from (are you paying attention class?) “steel sharpening steel” to “the typical BS in your column.”

    And we wonder why there’s no peace in the Middle East?

    I’d prefer discussing the two things I brought up in my previous comment: (1) Is giving greater amounts of wealth to the most wealthy sound fiscal policy? and (2) Is misleading the American people in regard to your plans acceptable?

    I’m up to four cents now…

  12. Al Sturgeon Says:

    Since I’ve taken it upon myself for some unknown reason to respond to everyone, my scattered responses to my friend, JD’s, scattered thoughts…

    #1: “I thought the comedy article was to appear on another day?”

    Response: It is; this was the political column. 🙂

    #2: “Someone sounds jealous.”

    Response: Could be read that way; instead, I read an author saying, “Someone appears greedy.”

    #3: “I think all politicians tell lies.”

    Response: Then this article should be right up your alley (since that’s the basic premise).

    #4: “I think if we keep SS as is, it’s going in the toilet. No one has any wealth in the toilet. Maybe that’s acceptable to the author.”

    Response: I think you’re reading an awful lot into things here. I think the author is saying that there are already people in the toilet and that the powerful have brought in their magazines and are about to have a seat.

    #5: “If the Bush plan is a bust for the American people (which I am willing to admit it could be), and the current plan is a bust (we already know that), then I would like to see a knight come riding in to rescue us with a great idea.”

    Response: The author’s point seems to be that the current plan is not that great idea.

    Six cents?

  13. Al Sturgeon Says:

    Whoops, I forgot to respond to the “Middle East” scattered thought – although that wasn’t a part of the article.

    That being said, the comment that said that it seemed like the President doesn’t want a failed war to define his presidency can be taken in several ways. The simple truth is that the success of these wars will be judged most accurately quite some time from now, and the possibility of it going down in history as a failed war is at the least a possibility (who knows). President Bush may or may not see that as a possibility; we’d have to ask him.

    To your assertion that things seem better for Afghans and Iraqis, as far as I know that is very true – so I don’t have much of a response.

    (Sorry to take up a spot with this one – just didn’t want you to think that I selectively skipped a topic!)

  14. Steve Says:

    Well, as far as SS goes:
    there is the current toliet way…
    bush’s new plan…
    (someone asked if both plans are bad, what a better solution?)

    i heard that if this new SS policy on capitol hill goes bust, bush will form a line of camels to see if they can get one or two to pass through the eye of a needle.

    (does anyone else besides me laugh and think bush’s “SS” plan and the war in Iraq… didn’t someone last century wage a war and use the SS as leverage? just a small mustache joke people)

  15. juvenal_urbino Says:

    What Al said.

    More generally, I’m old enough I should expect this by now, but I’m still amazed at how quickly — instantly — we leap to assumptions and accusations about the qualities of the person making arguments we disagree with, rather than accepting that person as genuine until we have enough experience with them to know otherwise.

    Why assume the worst?

    (BTW, someone complained that no one from the left has offered a SS plan at all. Neither has anyone from the right. The only plan on the table right now is Sen. Chuck Hagel’s, a moderate. I’d also disagree with the characterization of the current SS system as “in the toilet.” That’s what Mr. Bush would have us believe, but all the nonpartisan reports I’ve seen so far disagree with him.)

  16. guru junior Says:

    Hey Al,
    You’ve read way too much sensitivity into me. I did compliment juvenal in my last comment in our exchange on his last column. I couldn’t care less if he responds to me; what I didn’t like about his response was the broad stereotypical way he threw all conservatives under the bus. And for the record, I thought his first column was typical democrat BS but I could tell by his writing and his arguments that he has something between his ears. I haven’t changed my mind on that either. You don’t have to be dumb to be wrong. 🙂

  17. guru junior Says:

    Hey Al,
    You’ve read way too much sensitivity into me. I did compliment juvenal in my last comment in our exchange on his last column. I couldn’t care less if he responds to me; what I didn’t like about his response was the broad stereotypical way he threw all conservatives under the bus. And for the record, I thought his first column was typical democrat BS but I could tell by his writing and his arguments that he has something between his ears. I haven’t changed my mind on that either. You don’t have to be dumb to be wrong. 🙂

  18. guru junior Says:

    Oops sorry for the double posting.

  19. juvenal_urbino Says:

    “the broad stereotypical way he threw all conservatives under the bus”

    In fact, I did no such thing. You might want to take another look at that comment. I explicitly said there were exceptions: i.e., the 10% of conservatives who truly are concerned about the rights of states when they talk about states’ rights. You may well be in that 10% for all I know.

    If so, the ugly history of states’ rights arguments must be a genuine nuisance to you. Unfortunately, however, the fact that you truly believe in states’ rights doesn’t change that ugly history.

  20. Joe Longhorn Says:

    Look here for truly unbiased answers to your questions. There is nothing more non-partisan than a 60 year old government bureaucracy. They are monoliths that do not sway with the fickle winds of political change.

    I highly recommend the trustee’s report in the FAQ. It goes into the math and explains the current and projected future financial position of SS. Keep in mind that actuaries are the prime generators of this report. Nothing speaks to an actuary like numbers. Certainly not political rhetoric and wailing. To them, the truth lies in the numbers. They aren’t accountants. In their world, 1+1 actually equals 2.

    Granted… nowhere in any report does it say that SS is definitely going under. In fact, in the most optimistic and lowest cost projection, SS in its current form is in fact sustainable. But when has a successful business relied solely on the most optimistic projection to make a strategic decision? The middle-of-the-road scenario and worst-case scenario both show the SS trust fund being exhausted somewhere between 2035 and 2045. What does that mean? It means that in two of the three projected scenarios, SS payouts will outstrip revenues, leading to a depletion of the SS trust fund in order to make up the difference. What happens when the trust fund is exhausted and we can’t make up the difference? Benefits get cut abruptly, or taxation rates go up abruptly.

    You’re right, Juvenal. SS is not currently “in the toilet.” But… there is significant risk in doing nothing to hedge against the more unsavory scenarios. The sooner we do it, the easier the transition will be.

    I also have a burning need to answer Al’s questions about Bush veiling his true plans from the public.

    Do some aspects of his programs favor the wealthy? Absolutely. Who pays most of the wages (and half of their employees SS taxes)? The wealthy. Who invests money into the capital that drives economic productivity and growth? The wealthy.
    Many liberals have the misguided approach that the economy is a zero sum game. If the rich are getting more, then the poor must be getting less. Our economic history has repeatedly shown this to be false. Even as our population has sky-rocketed in the last century, the overall level of wealth in the United States has continued to rise. Folks living below the “poverty line” often have cable TV (basic package only, sadly) and a car. Home ownership is at an all time high. When I take these things into account, I see President Bush more along the lines of a George Bailey than a Mr. Potter.

  21. guru junior Says:

    My mistake Juvenal, you only threw 90% of today’s conservatives under the bus 🙂 I do in fact believe in states’ rights and am appalled at how the doctrine was abused in the past. Just because it happened in the past doesn’t mean that the vast majority of conservatives today have the same evil motives. We “new federalists” are genuinely upset at the size and scope of the federal govt. And by the way, Al and Juvenal, I considered it a compliment that Juvenal wanted me to chime in.

  22. juvenal_urbino Says:

    “There is nothing more non-partisan than a 60 year old government bureaucracy. They are monoliths that do not sway with the fickle winds of political change.”

    While that has historically been true, Joe, it has become less so in recent years. With the recent FDA scandal, the OMB accountant who was pressured into burying his report because it didn’t underestimate costs, similar stories from the EPA, HHS buying ads to convince seniors to support the administration’s Medicare proposals, and the practice of departments paying columnists to write good things about changes the administration wants to make to those departments, I look a little askance these days at reports generated by gov’t departments on issues that a) directly affect their own jursidiction, and b) are currently hot politically.

    That’s unfortunate. With the job security professional bureaucrats have, they should resist political pressure better than they have recently.

  23. juvenal_urbino Says:

    “My mistake Juvenal, you only threw 90% of today’s conservatives under the bus”

    Well, I had to start somewhere.

  24. Dr. F Says:

    Juvenal, I quote: “BTW, someone complained that no one from the left has offered a SS plan at all. Neither has anyone from the right.”

    Check you facts before you let your fingers to the talking.


  25. Al Sturgeon Says:

    Hey Guru – pardon my mistaken assumptions. Shouldn’t surprise me to learn that I’m not as astute as I thought!

    And FINALLY, someone answered one of my two questions!!! Thanks, Joe!

    I realize that many believe that giving greater breaks to the wealthy is what drives the economy most effectively. I’m glad someone finally said that! I’ll admit that (1) I’m not even close to an economist, and (2) I have always had a hard time buying the overall concept.

    The latter is nothing personal nor ignoring or dismissing your statements; it possibly has much more to do with my background (i.e. my dad worked for a company for two decades only to be laid off around age 60, when I was 10, because his $12k annual salary could be replaced by a young worker; add to that my mom who is trying to work until age 70 right now as a widow – 30 years as a church secretary – and hoping to somehow live on SS and a little annuity they started for her a few years back when they recognized they paid her next to nothing).

    In other words, in my family’s history, those who got more didn’t translate into a better life for us.

    Plus, in my work with Habitat for Humanity, I have run across deadbeat families, but also many who live in poverty w/o a way to get out of it. Work a full-time minimum wage job and pull home less than $900/month before taxes are held out – they find it very hard to pay for a place to live, utilities, health insurance, functional transportation – including gasoline, day care, and groceries – much less cable television…

    I’m not saying the economic theory is wrong; I’m just saying that it doesn’t grab me right off the bat. It seems to me more reasonable to provide a bit more help on the lower end who need/deserve it instead of the upper end directly – instead of a reverse scheme whereas the wealth eventually drifts downward. (For example: I wish my mom would have received a substantial raise instead of some of our wealthy church members getting tax breaks, allowing them to get an extra boat with some of it and increasing their church contribution with the rest, and then cross our fingers hoping the elders decided to use some of that extra for her salary.)

    Once again, that’s just my perception – I recognize there are more viewpoints than that…

    I’m interested in hearing opinions on my 2nd question, too – if veiling motives (i.e. normal politics) is acceptable behavior regardless of party affiliation?

  26. Al Sturgeon Says:

    Okay, I already see I need to explain one of my last phrases: “those on the lower end who need/deserve it”

    I did not mean that all those on the lower end deserve it. Instead, I meant that for those on the lower end who DO deserve it, direct help seems to be a better fix than vague, indirect help.

  27. Michael Lasley Says:

    I’m a little late in the game here, and have nothing of value to offer the conversation. I’m just glad to know noone’s feelings were hurt (tee-hee: I actually didn’t care either way). You’re making me think, which is good, and that’s kind of the point, I assume, especially for those of us who aren’t as knowledgeable about this issue as all of those who have posted on either side of the debate (assuming there are only two sides). This is a way-yonder-and-back complicated issue and it’s good to hear the differing views about it.

  28. juvenal_urbino Says:

    “Check you facts before you let your fingers to the talking.”

    I got my facts from a report on MSNBC (the teevee version) this past Sunday. The forthcoming Hagel proposal, according to MSNBC at that time, was the only real, actual legislation being offered on the floor of either house.

    Perhaps they got that wrong, or maybe things changed. However, it’s not clear to me from the report you linked whether all those other ideas have actually been offered as legislation.

  29. Joe Longhorn Says:

    “I look a little askance these days at reports generated by gov’t departments on issues that a) directly affect their own jursidiction, and b) are currently hot politically”Take a look at the SSA website again and you’ll notice that the 2003 report had an even worse projection for the system’s future than the 2004 report. I’m not saying that SS hasn’t been an issue for a while, but the 2003 report came out well before the firestorm that is raging now.

  30. juvenal_urbino Says:

    Point taken, Joe. Nonetheless, SS was, as you hinted, on Mr. Bush’s radar well before 2004. He was talking about how badly it needed overhauling even as long ago as when he ran for Congress, back in the ’70s.

  31. juvenal_urbino Says:

    “If I get have mine when through this plan, it’s ok with me if the Bush’s do too. And if they get more because they’ve got more to invest… cool.”

    Just some quick responses to Dagwud’s excellent comment, since no one else has picked up on it(except Al, in a general way).

    1. In the short term, if the national wealth increases (the whole pie grows), I have no objection to the wealthy getting some of that wealth. My problem, in this context, at least, is with allowing that wealth to be “hidden” from the nation’s fiscal policy for generations. There are problems that crop up over the long term that aren’t as serious in the short term.

    2. I have a problem with any policy that on its face is designed to increase the wealth of the wealthiest more than the wealth of the poorest. As Joe touched on, the wealthy will always find a way to profit by most any policy (short of a direct redistribution of wealth). As I said, I don’t object to that, per se. But, OTOH, it doesn’t help me see the point of implementing policies that are designed to benefit the rich more than the poor. If we’re convinced that SS needs an overhaul, why not look for a way to do it that benefits the working poor, who need the money, more than the leisured rich, who don’t?

    3. I have a very serious problem with people like Mr. Bush, who clothe themselves in Christianity and “family values” while proposing morally dubious policies and selling them to the American people by patently immoral means. A couple of displeased conservatives here have commented that all politicians lie. I agree. Which is why I don’t understand why religious conservatives keep dividing politicians into absolute categories: the sheep and the goats. Why are lying liberal politicians satanic, while lying conservative politicians are somewhere between cleanliness and godliness?

    4. I’m curious what numbers Dagwud used in his calculations.

  32. Al Sturgeon Says:

    Thinking of Juvenal’s #2 response (which I totally agree with)…

    I probably shouldn’t bring this up since it hasn’t been brought up yet, but often these debates begin (or end up with) the argument over whether the government even has a responsibility to the poor. I don’t care for that debate, whether it is the government’s responsibility or “the church” – I think it is both.

    From the government perspective, it seems that “justice” is their job; not just in the punishing bad guys sense of justice, but the lifting the oppressed side of the coin, too. I used to think this was just a Christian view of governmental responsibility, but I’m reading a book now (Guns, Germs, and Steel) that points out that any “state” has those responsibilities to simply justify taking money from the people and giving it to the powerful (i.e. politician’s salaries, etc.); this just from an evolutionary perspective.

    However, my personal interest is from the Christian perspective. It may seem that (since my family never had much) that my motivation might be self-centered, but (best I can tell) I don’t think it is. I never bemoaned our economic status; in fact, I sort of liked it. When I got my first job making over $18k a year, I already made more than either of my parents ever made in a year, and I felt like a success.

    But I digress…

    Instead, the more I study the more I am overwhelmed with the biblical emphasis on caring for the poor. From Torah to the Prophets to Jesus to the Church, that theme reverberates loud and clear.

    And I think the government has a role here, too…

    I just got off the phone with one of our members here. A man who is very poor and lives in the county with his mother had called the county for help. He broke his neck many years ago and lives in a wheelchair in a “house” with his mother. One side of the house is plastic (i.e. no wall). During the last hurricane, a HUGE pine tree was damaged and now hangs dangerously close to crushing their house. They called the county, and they came out to look at it. They laughed and left – not their job to get on private property and do tree work. A friend of mine thru Habitat works for the county and received this guy’s call – she wondered if anyone I knew would be able to help. This friend from church went out to see it and said it was the biggest pine tree he had ever seen in his life, and it could crush trailers in any direction it fell. He called a tree service, and they went to see it. The tree guy said he hadn’t seen a tree like that since he was a young man. They normally would charge $800 for a tree like that (a bit out of this guy’s financial means) – but the guy would do it for $500 for a church group. So me and my buddy are pitching in a $100 each, and we’ll tell our Young Adult class, and we’ll have the rest.

    Should the “church” act like this? Proudly in this instance (which is rare), I can say yes.

    Should the “government” laugh at this guy? I don’t think so.

    And do economic approaches that benefit the most wealthy trickle down to this guy? Maybe, but all I’m saying is that I have a hard time buying that… As Juvenal’s point #2 communicates, I’m much more in favor of recognizing that there are deserving poor – and focus on helping them directly. At least the concept strikes me as “right.”

    Especially if we’re still talking about reforming Social Security.

  33. dagwud Says:


    $6000/year (the amount allowed for an IRA for a couple) is $115 per week. Invested in a mutual fund that averages 12% over thirty years (and many do), we would have $1.77 million. There is a calculator for such things at http://www.bygpub.com/finance/InterestCalc.htm

  34. Al Sturgeon Says:

    Boy, I guess I sure know how to kill a discussion. Sorry ’bout that.

    I’ve realized that part of my questioning has been faulty. I’ve been asking what drives our economy the best, and of course the answer to that is not too complicated or secretive: what drives our particular economy is the desire for more (read: greed). How’s that for a difficult starting point for people claiming to follow the God of the Bible? (seeing that Christian theologians forever have termed that as one of the deadly sins).

    So I don’t guess my interest is so much in what drives our economy on to greater and greater heights. It’s more that I feel that among all the HUGE wealth that we have in this nation, that every human being deserves certain things at the very least, and I would personally extend that list from the normal three to: an adequate food supply, adequate clothing, adequate shelter, physical protection (i.e. police/fire/military, etc.), opportunity for education, and health care.

    From a Christian perspective,it seems that we should not be as preoccupied with more “stuff” until everyone has these basic things (which they don’t; don’t tempt me, I have stories!). That seems to cry out for primacy in a domestic agenda.

    So IMHO, President Bush’s major talking point in his Social Security reform dialogue (PSA’s) still appears to go directly against the Christian concept to me. Social Security is one of the hallmarks of governmental attempts to provide some of the basic human rights outlined above, and if the solution truly would initially benefit those who already have plenty the most in the hopes of driving our economy through the desire to create more wealth and hopefully benefit those in immediate need – well, I think we should say that’s what it is instead of dress it up and call it a different name.

    Which still leads me back to the same question that I haven’t heard answered (though I may have missed it) – so if I’m talking to myself, I’ll at least humor me with an answer: Is the practice of veiling motives acceptable behavior regardless of party affiliation? I say, no…

    I don’t care if the President is Democrat or Republican or Presbyterian, I think we should always point out loud and clear the reality behind the popular spin, so that we can see what goes along with the teachings of Jesus (which is what I care about), and what does not.

    That way we prevent the potential tragedy of mistaking America for the Kingdom of God.

  35. juvenal_urbino Says:

    Thanks, Dagwud. The problem is, while 12% may be attainable in a mutual fund, it’s not in Mr. Bush’s plan. Going back to the part of my post where I said it’s not really your money, even though that’s how Mr. Bush is selling the idea, you don’t get to invest “your” PSA wherever you want. You have to pick among 4 or 5 gov’t approved investments, which are going to earn you only 3-5%.

    Using the calculator you linked to, your $115 a week is going to add up to less than a third of the $1.7 million you mentioned.

    Al — I don’t think you killed the conversation. People seem to stop commenting on a post once the next post comes out.

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