tag:blogger.com,1999:blog-872610766194613385.post2169790562798372629..comments2024-01-02T00:54:47.924-05:00Comments on Another Black Conservative: Everything old is new again: Democrats propose "lockbox" for Social SecurityClifton Bhttp://www.blogger.com/profile/00273941007555823028noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-872610766194613385.post-44395547770623459102011-02-26T03:32:05.570-05:002011-02-26T03:32:05.570-05:00OK, let's understand this lock box BS.
For ma...OK, let's understand this lock box BS.<br /><br />For many years, the taxes collected under the auspices of Social Security exceeded expenditures on Social Security. This created a notional surplus.<br /><br />But there really is no such thing as Social Security. It's a legal fiction.<br /><br />FDR couldn't get a Constitutional amendment passed to enact Social Security, so he used the taxation powers of government to raise revenues and the expenditure powers of government to distribute benefits. There is no "right" to collect Social Security and the connection between taxes paid and benefits received is flimsy.<br /><br />FICA taxes are just like any other tax revenues. When the government gets them, it spends every dollar (and then some). <br /><br />With all the money spent, how are we going to pay future beneficiaries? Why, we'll pay them either from future tax revenues or from issuing government debt.<br /><br />The "lock box" idea is to take the Social Security notional surplus and buy non-negotiable US Treasury securities which pay interest. But the Treasury securities are nothing more than a promise of government to pay you from future tax revenues or from issuing government debt.<br /><br />So the "lock box" contains IOUs for IOUs.<br /><br />Bush's plan to invest in private assets was different. First of all, they would pay a higher yield. Second, the returns on those investments were not guaranteed by the notional ability to raise taxes or debt.<br /><br />Indeed the privatization of Social Security has its risks - the investments could go belly-up just as you are ready for retirement. But as you approach retirement, you're supposed to rebalance your portfolio away from risky assets toward less risky assets.<br /><br />The "lock box" is just a government accounting gimmick learned from the Arthur Anderson and Enron School for Accounting.<br /><br />A person my age and income can expect to LOSE more than $200,000 from Social Security - that's not security and it's not a very good investment. The benefits system redistributes wealth from high income people to low income people. It also pays people as survivors who contributed little into the system.<br /><br />In a word, Social Security is insolvent. In two words, it's a Ponzi Scheme.<br /><br />Chile privatized their pension system and tripled people's rates of return. For those given an option to remain in the government system or opt out, 95% opted out. I expect similar results here in the US if given a chance.<br /><br />We need a fully-funded, privately owned retirement system, and we needed it decades ago. Every day that goes by, the cost of the transition grows.Hot Samhttps://www.blogger.com/profile/10848778804406692799noreply@blogger.comtag:blogger.com,1999:blog-872610766194613385.post-16340781972402326352011-02-26T02:10:09.404-05:002011-02-26T02:10:09.404-05:00Bipartisan is one of my least favorite words. I ac...Bipartisan is one of my least favorite words. I actually liked the behavior from Wisconsin - more honest. But this is really humorous. They seem to have forgotten they are the a$$holes who raided SS in the first place.Never mind creating it.Janellehttps://www.blogger.com/profile/05756137413824366993noreply@blogger.comtag:blogger.com,1999:blog-872610766194613385.post-57872625716024081082011-02-25T14:44:40.000-05:002011-02-25T14:44:40.000-05:00We won't see any real reform to "protecte...We won't see any real reform to "protected" entitlements since those in power wish to keep power. And since people are stupid enough to demand entitlements over national stability, the equation cannot change. We'll see a few, brave individuals, like Wisconsin's Walker, either get ousted or succumb to the inherent greed of the system.Euripideshttps://www.blogger.com/profile/02405637531928318155noreply@blogger.comtag:blogger.com,1999:blog-872610766194613385.post-52611920838888853932011-02-25T12:28:36.594-05:002011-02-25T12:28:36.594-05:00Darrell Hammond portraying Gore and talking about ...Darrell Hammond portraying Gore and talking about the "Lockbox" on SNL was one of my all-time favorite skits.49er16https://www.blogger.com/profile/07480858283150569377noreply@blogger.com