Comments on: Obama Giving In To Hill Democrats On Social Security Reform?

By: agbiggs

agbiggs — Tue, 24 Feb 2009 13:59:08 +0000

sinz54: Understood, and it’s a valid point. But you also want to run the numbers. When I did (see http://www.aei.org/publications/filter.all,pubID.29347/pub_detail.asp) they weren’t nearly as scary as you’d think.

By: sinz54

sinz54 — Mon, 23 Feb 2009 21:36:33 +0000

Agbiggs: Bush’s proposed reforms involved carving out a portion of the SS tax “contributions” into private accounts, which would be invested in the stock market. But the performance of the stock market since mid-2007 has shown what can go wrong with that idea. On the average, investing in the stock market for the long term has been a winner. But for those just approaching retirement this year or entering retirement this year, it’s been a catastrophe. As of today, the stock market is down some 52% from its previous peak. This means that Americans have lost more than half their nest eggs. SS was never intended to be an investment program like IRA or 401(k). It was intended to be a guaranteed pension program.

By: sinz54

sinz54 — Mon, 23 Feb 2009 21:31:38 +0000

I think that the explosion in Medicare entitlements is a more serious and more urgent problem than Social Security.

By: JJWFromME

JJWFromME — Mon, 23 Feb 2009 21:13:44 +0000

“under President Bush’s proposed reforms in 2005, every future retiree would have received higher real benefits than today’s retirees do.” Sure, with some think tank’s cooked numbers. Here’s the argument why it would slash benefits: http://www.washingtonmonthly.com/archives/individual/2008_09/014810.php
Medicare is in crisis sooner than 2042, which good basis for it to be addressed first.

By: coleman

coleman — Mon, 23 Feb 2009 19:44:18 +0000

Now here’s an issue the GOP can work with Obama on: Social Security reform. This will greatly embarrass the Democrats and show that the GOP is willing to collaborate and compromise on a serious issue.

By: agbiggs

agbiggs — Mon, 23 Feb 2009 19:34:11 +0000

JJWFromME: a) You could say the same thing about Medicare, which everyone says is “in crisis”; b) under President Bush’s proposed reforms in 2005, every future retiree would have received higher real benefits than today’s retirees do. This was depicted as “slashing” benefits and, in Paul Krugman’s words, “a gut punch to the middle class.” It’s hard to square the two positions, in my view.

By: JJWFromME

JJWFromME — Mon, 23 Feb 2009 17:52:56 +0000

“Medicare is the 800 pound gorilla of the entitlement mess I guess making Social Security the 200 pound chimpanzee who nevertheless carries a mean bite” Not terribly mean: “Social Security Trustees’ Report puts the date of insolvency at 2042. But even after 2042, Social Security will be able to pay an average benefit that is actually higher than what workers receive today — indefinitely. That’s in 2004 dollars — adjusted for inflation.”
http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/social-security-reform-:-a-solution-in-search-of-a-problem/
Medicare, however, is of the 800 lb variety: http://www.prospect.org/csnc/blogs/ezraklein_archive?month=05&year=2007&base_name=social_security_as_signifier
Obama would be smart to spend political capital on fixing Medicare first, even if fixing the healthcare system scares Bill Kristol.