Posted on 09/15/2011 12:49:03 AM PDT by Cincinatus' Wife
The following editorial appeared in the Chicago Tribune on Tuesday, Sept. 13:
Rick Perry has gotten a lot of heat for describing the Social Security system as "a Ponzi scheme," and he deserves it. The Texas governor owes a big apology to Charles Ponzi. Sure, Ponzi fleeced investors, but they at least had a choice about participating. Social Security operates on a compulsory basis.
In other respects, though, Perry has a point. In a Ponzi scheme, new investors have to be continually recruited in order to provide fat returns to earlier investors. It works fine until you have so many investors to pay off that you can't find enough new ones to cover the cost.
Social Security is like that. It used to be a comfortable arrangement for all, because there were so many workers paying in and so few retirees getting checks. In 1950, there were 16 workers for every beneficiary. But today, there are about three workers. In 20 years, the ratio will be 2 to 1. A sweet deal has gone sour.
Social Security can be changed to make it more affordable, and it undoubtedly will be - by raising the retirement age, changing the cost-of-living formula, lowering the initial level of benefits, means-testing and the like. With this approach, the program could get by in something close to its current form.
But that option has a big downside. Any change that reduces outlays makes the program a worse deal for those who have paid in. As Perry noted (accurately), "By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented." Younger workers could expect a bigger return if they were allowed to take their contributions and put them into a 401(k) or something similar.
That option may be politically implausible as well as logistically daunting. But Perry is onto something vital, and he shouldn't back down just because pundits say he's risking self-destruction.
After all, George W. Bush was repeatedly slammed by Al Gore during the 2000 campaign for proposing that workers be allowed to direct some of their payroll tax contributions to personal retirement accounts. He got elected anyway.
Former Massachusetts Gov. Mitt Romney has lately taken on the Gore role, charging that Perry is "reckless, wrong on Social Security." During last week's Republican presidential debate, Romney insisted, "Our nominee has to be someone who isn't committed to abolishing Social Security but is committed to saving Social Security."
This exaggerates the gap between Perry and Romney. In his book "No Apology," Romney doesn't rule out allowing "today's workers to direct a portion of their Social Security tax to a private account." Perry has been vague about how, exactly, he would reconcile the interests of the old and the young. And he retreated in his condemnation of the program, saying he wants to "fix Social Security and make it financially viable for generations to come." But at least he's raising the right questions.
Is this issue so politically explosive that Perry has done himself serious harm? We don't think so. Americans are not full of naive illusions about Social Security. They grasp how unlikely it is that the program can continue without major reforms. And they may be prepared to contemplate what those might be.
This campaign could begin an adult conversation on this vital subject. Let's see if Romney wants to be an adult.
Worth the time to listen.
How Three Texas Counties Created Personal Social Security Accounts and Prospered Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.
But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”
[snip]
More importantly, if a worker participating in Social Security dies before retirement, he loses his contribution (though part of that money might go to surviving children, if any, or a spouse who didn’t work and therefore didn’t establish his or her own benefits). But a worker in the Alternate Plan owns his account, so the entire account belongs to the estate. There is also, among other benefits, a disability benefit that pays immediately upon injury, rather than waiting six months, plus other restrictions, as under Social Security.
And those who retire under the Galveston model do much better than Social Security. For example:
A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financial’s calculations.
A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.
And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan……………….[more at link]
Seems like Michele Bachmann has been softening up her tune recently too. Didn’t she just say in the last debate something close to “it just needed a little fixin’?”
It seems like she has not ALWAYS had that respect for our current Social Security system.
See:
Bachmann called Social Security ‘a tremendous fraud’ in 2010
Thank you for that LINK!
These are the hard facts: Social Security's unfunded liability is calculated in the trillions of dollars. Last year, annual Social Security outlays exceeded annual revenues for the first time since 1983. The Congressional Budget Office projects that outlays will be roughly 5% greater than revenues over the next five years, worsening as more and more Baby Boomers retire.
By 2037, retirees will only get roughly 76 cents back for every dollar that is put into Social Security unless reforms are implemented. Imagine how long a traditional retirement or investment plan could survive if it projected investors would lose 24% of their money?............"
Perry Fires At Rove & Romney: Social Security Is A "Ponzi Scheme" And A "Monstrous Lie"
You’re welcome! I found that link quite interesting.
Here is one little part of that article which I found particularly interesting.
(Excerpt)
During an interview with the Fox Business channel in February 2010, Bachmann, a Republican representative from Minnesota, called Social Security’s structure “a tremendous fraud” and said that anyone who ran a business modeled after the program would be “thrown in jail.”
(snip)
“No company could get away with this, they’d be thrown in jail if they ever tried to do what the federal government did with people’s Social Security money,” Bachmann said. “What we need to do very quickly is take the money that is coming in for Social Security, and truly lock it up so that we aren’t putting it out the door anymore.”
(End of excerpt)
Like Romney, Bachmann will expediently change her tune.
I know......Lincoln.
These lawyers today, aren't Abe.
And Perry's been hitting the trial lawyers hard (as well as the EPA and Big Education).
Trial lawyers prep for war on Perry America’s trial lawyers are getting ready to make the case against one of their biggest targets in years: Texas Gov. Rick Perry.
Among litigators, there is no presidential candidate who inspires the same level of hatred – and fear – as Perry, an avowed opponent of the plaintiffs’ bar who has presided over several rounds of tort reform as governor.
And if Perry ends up as the Republican nominee for president, deep-pocketed trial lawyers intend to play a central role in the campaign to defeat him.
That’s a potential financial boon to a president who has unsettled trial lawyers with his own rhetorical gestures in the direction of tort reform. A general election pitting Barack Obama and Perry could turn otherwise apathetic trial lawyers into a phalanx of pro-Obama bundlers and super PAC donors. …..”
Rick Perry’s Air War (with the EPA)...........>>>Texas alone opted for the unfriendly approach. It’s the only state that did not issue a plan for compliance—and Perry has made it clear that Texas has no intention of complying. The move was a blatant slap to the Obama administration—and once again gave Perry the national spotlight. Defying the climate rules offered him the perfect opportunity to loudly decry the science of global warming—which in his book Fed Up! he calls a “contrived phony mess that is falling apart under its own weight”—and to slam EPA as a “rogue agency” with an “activist mind-set” that has “targeted Texas.” Such rhetoric is viral catnip to the tea party voters who could help catapult Perry to the 2012 presidential nomination.<<<..............
Metro - Carolyn and Ron Agnew, center, of Pflugerville, wait for Governor Rick Perry's arrival during the Rick Perry Welcome Home Rally at Abel's on the Lake in Austin on Saturday, August 20, 2011. LISA KRANTZ/lkrantz@express-news.net
In Texas Schools, Perry Shuns Federal Influence ………>>>When Secretary of Education Arne Duncan jabbed Mr. Perry on public schools in mid-August, it was only the latest skirmish between the governor and the Obama administration since late 2009, when Mr. Perry announced that the state would not sign on to common core-curriculum standards.<<<...
Your (Perry's) example shows that even tho Social Security has been dissipating the savings of everyone who is paying into it in order to fund current retirees' benefits, current retirees and their heirs are being hosed royally. I have recognized the problems of the Social Security system since my teens, and have I think only committed the folly of voting for one Democrat, for congress, once in my life. And yet I have been accused on this board of cheating the public because I don't return the Social Security checks I get now!As if I could ameliorate the Social Security funding catastrophe single handedly! Humbug!
The only thing more offensive to say about my Social Security is when a "liberal" suggests that I don't have the right to vote conservative because I get, and use, Social Security checks. The Social Security system is evil, and I will support any sensible proposal to unwind it. And I presume that anyone else who supports abolition of that evil knows that it can't be simply truncated but must be unwound over time.And politically, the Democrats' system has always been to "shoot the messenger" whenever a Republican points out the obvious about Social Security.
A speech Perry gave yesterday voters might not learn about because the media has described it more or less as so much scripture reading and tales of his youth in Paint Branch.
It is a much, much broader talk where Perry speaks of liberty, freedom, military, 9-11, evil, "we must engage allies and build alliance for freedom and be like Ronald Reagan and speak past the rulers and directly to people by yearning to be free," his faith, his path, trust in God, advice to the students gathered (10,000)....
September 14, 2011: Rick Perry giving the convocation at Liberty University [C-Span video – 30 min] -- Perry’s speaks 10 minutes into video.
Milt: "You cannot be the candidate.
You are too weak to even stop ... me."
Criticizing SS used to be called the third rail of American politics, but more & more people are becoming aware of SS problems.
These are signs of Perry's weakness.
Obvious, Perry is not ready to be POTUS.
He 'hides' what he wants to say ... and then blames others.
Perhaps Perry should just pull back and wait until 2020.
Yes - the voters have decided (realize in NO uncertain terms) the country is being shoved over the cliff, so let’s put everything out on the table and have an honest discussion.
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perry acts like a country kid from texas.
romney looks like a school kid kissing the teacher’s @ss.
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