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Investing/Strategies / Retirement Investing
|Subject: Re: Enron and Social Security||Date: 1/26/2005 4:01 PM|
|Author: Fuskie||Number: 44203 of 74444|
Even the Whitehouse has noted that the personal SS savings accounts is an attempt to achieve a conservative goal and that "fixing" Social Security will require alternate "liberal" action.
Wage indexation (introduced in 1977, it ties benefits to inflation) makes it impossible to "grow our way" out of the Social Security problem... If we borrow $1-2 trillion to cover transition costs for personal savings accounts and make no changes to wage indexing, we will have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities...
To meet those benefit levels, one option would be to raise the age at which people receive benefits... Another way to meet those benefit levels is through the traditional Democrat/liberal way: higher taxation... We simply cannot solve the Social Security problem with Personal Retirement Accounts alone...
There are 3 generally accepted options equally decried by polititians. Raising SSI taxes, raising the age where a retiree becomes benefits elligible, and reducting the benefits provided.
This Whitehouse memo describes how the first two options are unRepublican, but leaves open the possibility of the third by adjusting the level of benefits to not track inflation.
Note that none of these solutions (democrat or republican) addresses the real issue, that the value of government bonds issues due in 20 years will be greater than the ability of the government to pay investors because the government has looted the real assets of the Social Security Trust Fund.
If Washington really wants to "solve" Social Security, they would be talking about ways to raise the funds necessary to repay all the IOUs they have taken out to build all their pork-barrell projects, and make the retirees pay for their misguided largess.
Who notes, with all due respect to Congressman Shaw, that it is not the retiree's collected contributions that pays for his benefits but his sons' and daughters'...
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