Privatizing Social Security too risky [KRUGMAN BARF ALERT]

Seattle Post ^ | February 6, 2005 | PAUL KRUGMAN

[ejdrapes]

The Administration is going to have to do one hell of a media blitz to get people on board with this. Because the MSM will continue to peddle lies about it until there is little to no public support left.

[Mr. Buzzcut]

Krugman is parroting a Washington Post error which they retracted the same day they published it ... How did the Seattle paper let this through DAYS later? Never mind, I know ...

Don Luskin has the best ongoing analysis of this "debate" at The Conspiracy To Keep You Poor and Stupid.

[Jacquerie]

Only the left could peddle a system that guarantees a low or negative rate of return (after taxes) as a success. But hey, at least you can't pass it on to your heirs.

Someone correct me if I am wrong, but I recall that no 20 year period including the great depression resulted in a negative rate of return from US stocks.

[t_skoz]

ping / barf

[april15Bendovr]

Its so simple

Allowing people to invest their money into the stock market for Social Security
is a great idea.

Not only is there a better return than 2% that the government provides but it
also provides a means by which the government can reduce the deficit.

Here's how it will reduce the deficit: As the stock market grows as a result of
the increased influx of investment money, so does the economy, and when the
economy grows so does the amount of taxes businesses pay the government, which
reduces the deficit.

Everyone wins even liberals that complain about the deficit.

[kittymyrib]

No, Krugman, you fool. We'd rather let the power-drunk politicians confiscate the money from our paychecks, loot the pension fund by buying votes with it, leave IOUs they can never cover, and declare the government our beneficiary if we die before we collect what we put in. Only an idiot liberal would think this was a good plan. The rest of us see it as a massive Ponzi scheme that really should probably just be allowed to go belly up and die, but our conscientios president is better than that...and certainly a thousand times better than his detractors.

[stevem]

Color me skeptical...

Disclaimer: My daughter has studied meteorology through her college career. It's a field that has her utterly fascinated.

Being a liberal has to be better as a vocation than being a meteorologist. Meteorologists get paid day after day regardless of the outcome of their predictions. Yet, meteorologists do need to make plans and formulate ideas. Also, the science has improved since the days of omens.

Being a liberal means never (pronounced NEVER) having to have an idea, new or otherwise. For a long time it has been popular for conservatives to say liberals haven't had a new idea since the New Deal. However, that doesn't apply since the New Deal was but the Bull Moose Party Platform hauled out after 20 years in moth balls. So, it's fair to say that liberal Democrats have never actually had an original idea.

I seriously doubt Paul Krugman has ever actually completed a thought.

[NorCalRepub]

Being an Investment Broker I used to have the Ibbotson chart memorized and I can't remember if there was a twenty year period but the market from 1920 to 1936 after the depression went pretty much sideways.........no other periods were negative for longer than 5 or 6 years or so

[gogipper]

Based on his record of economic predictions if Krugman's against it it must be the right thing to do.

[Goodgirlinred]

That is what my broker told me. I am a 55 year old widow. I am not counting on SS for much at all. I like my IRA's. When my husband died, I sat down with his broker and, knowing nothing about any of that sort of thing, asked him what was the safest thing I could do with the IRA's and the other things my husband had in his portfolio. So, we kept the things that were under The Hartford, got rid of riskier investments, and chose something similar to The Hartford, but not quite as "safe", and my portfolio has grown surprisingly well. If I were one of the Gen Xer's, I would opt for the President's plan in a heartbeat. With a good broker like mine, I could do much better than SS. :)

[Torie]

Krugman apparently read my post. The guy can be a nutcase, but on this matter he is totally correct in his analysis.

[NorCalRepub]

yes and you didn't tell me what your portfolio looked like only that you had it at the Hartford so it must be an annuity or something similar or maybe just IRA's like you say......hope you have a great broker.....it really all depends on what your goals are and your time horizon. At your young age you will see SS but don't know if you worked or not so not sure how much you will see.......the Hartford is not an investment but a company that uses mutual funds or annuities to achieve your means.....you should have a balanced moderate to mod conservative portfolio that has at at least some growth like 30% or so and the rest in income producing instruments if that is your need.......always need to keep some in stocks (mutual funds for you) so you have growth of your portfolio long term to keep up with inflation.......

[Torie]

Actually, if you had invested at the market top in 1967 or whenever it was, you would not have had a portfolio with incresed purchasing power until something like 1982. In short for about 15 years, the return was below the inflation rate.

[Goodgirlinred]

Yes, I worked. I don't now. And yes, I have stock. I guess there are annuities. I don't understand that stuff as I said. My broker just did it all, I just told him to pick safe things and he did and it has grown very well. :) Since my husband trusted him (he was an accountant) I trust him, too. I know you are groaning, but what else can I do? My eyes glaze over and my ears roar if he tries to explain it to me.

[qam1]

Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.  

********* Note ********
With the coming battle over Social Security, There is obviously going to be a Gazillion articles daily. To avoid overkill, I think it would be best to keep the Gen-X Ping list as a Medium volume ping list. So after today I think it's best that the Pings on this topic be limited to only one per day (That doesn't mean everyday there will be a ping on SS, Just when there is one, there won't be another one until at the very least the next day). Unless of course that second article is really, really great/noteworthy.

[NorCalRepub]

yeah that was the miserable sideways market but she was asking about negative returns and I think you would have eeked out like 2 or 3 % then which of course is so bad you would have been better off in in any of a number of different investments

[NorCalRepub]

I'm not groaning at all ......alot of people don't understand, have the time or are not interested and all the more they should find someone honest like you did

[libertarianben]

It's not the government's job to pay or have anything to do with your retirement. You know you're going to get old, so either learn to save, invest, etc or work until you die. It would also really help if the government didn't steal 40% of everything we make in some form of tax. This may sound cold hearted but so is life.

[Chgogal]

Well that clinches it. If PK says it's bad....then it must be one heck of a great idea.

[GreenHornet]

During his State of the Union Address, President Bush mentioned that his proposal for private savings accounts is very similar in concept to the Thrift Savings Plan (TSP), a 401K type plan in which hundreds of thousands of federal employees participate. As part of his public relations campaign, I think the President should continue to make that comparison, and urge people to talk with family members, friends, neighbors, etc. who are federal employees participating in the TSP. He should encourage them to ask these people if the TSP's a risky venture, or if they feel that they're gambling with their retirement money. The overwhelming majority will tell you that it's a much better deal than the current Social Security system. Why shouldn't all Americans have the opportunity to take part in a plan like this? If President Bush can bring home the point that he's offering something to the people that the federal employees have enjoyed for the past 20 years, he'll have a much easier time persuading the public to support him on this.