David Brooks vs. the Truth:

In Saturday's Op-Ed by David Brooks, Real Reform for Social Security, we read:

... let's be clear about what this Social Security reform debate is really about. It's about the market. People who instinctively trust the markets support the Bush reform ideas, and people who are suspicious oppose them.

That is a lie. It's not distrust of markets that fuels the opposition to the "reforms". It's that the changes proposed will destroy the uniform guarantee of Social Security. Destroyed because individuals would be managing their own accounts. Some will do well, some will do okay, and some will do poorly. Those who do poorly will be shit out of luck, and not getting any Social Security Insurance - since the insurance component is gone.

Not only that, but the changes proposed will result in higher-than-needed administrative costs (brokerage fees, etc.). So further erosion will take place of the nest egg. No market distrust here, just an awareness of the realities of portfolio management.

Within the crowd that oppose Bush's plan, some want Social Security to be unchanged - to continue purchasing government bonds for greatest security. But others entertain the notion that some of the money could go into the stock market (and other investment vehicles) - but only collectively, by the Social Security administration - which can get the best prices for transactions and portfolio management. Not everybody who opposes Bush distrust markets. In fact, they think market participation, via 401K's, is fine as long as there is a rock-solid base of a poverty-preventing insurance program to start with.

MORE BROOKS BULLSHIT: Have you heard this one?

"When the Social Security program was created, there were 42 workers for each retiree. Now there are about three workers per retiree, and in 2030 there will be two."

There are so many things to be said about that. Improvements in worker productivity means smaller ratios can support retirees. Also, a surplus has been built up which means it's incorrect to simply cite the ratio. But most deceptive of all is the "42 workers for each retiree" canard.

Really. When the first check was cut to that woman with SSN 00001, there were millions of workers for each retiree. Millions. So when we went down to 5 or so in 1960, the system must have crashed. Right? (see our post on that statistic) And even Brooks manages to get the facts wrong here. In 1945, a decade after Social Security was implemented we had 40 workers for every retiree.

WHAT THE?     Brooks also writes:

The White House is heading toward a reform plan that would tie the benefit levels to prices rather than wages, which is a serious benefit cut. It would then use the power of the markets to compensate retirees for those cuts and to create a reserve fund to make the system solvent.

Let's get that straight. Current retirees and those about to, people with absolutely no market component of their S.S. account, may get a "serious benefit cut". But not to worry, Brooks says, because the power of the markets will compensate these retirees. Except they don't have anything in the market. Wow!     (Yes, we are aware that it's possible that there could be a COLA formula properly tailored for different age groups, but that sounds like a complicated affair. Can you imagine? A COLA formula based on which years and how much you diverted to a private account. And conservatives complain about the complexity of the tax code!)

EVEN MORE: Brooks helpfully tells us that there will be

"$11 trillion in liabilities that threaten to bring down the system"

But that figure is a projection of liabilities into the "infinite future" (until the end of time, conventionally reckoned as the 'heat death' of the universe in 500 billion years). If Brooks is a fan of projecting to infinity, we'd like to see him comment on the expected population of red states. $11 trillion is nothing compared to having every square inch of land occupied by a red-stater (and after a certain point, they'd have to be standing on each other's shoulders).

ALSO: Brooks writes:

"You already see some Democrats growing concerned over the perception that their party is trying to build a bridge to the 1930's.   ...   [Bush's proposal] is actually about building a bridge to the 22nd century."

No. Bush is building a bridge to the 19th century.

FINALLY: As to trusting the market. You can trust the market to do well over time but also to realize that it fluctuates and is therefore unsuitable for the reliability which an insurance program demands. Brooks is saying that people who don't trust the market to be a monotonic positive function also don't trust the markets in general.

That's a lie.

posted by Quiddity at 12/11/2004 02:06:00 AM

Diagramming Krugman:

In today's New York Times, Paul Krugman writes about the Bush proposal for social security. The current system works like this:



Krugman describes the Bush plan this way:

Privatization would begin by diverting payroll taxes, which pay for current Social Security benefits, into personal investment accounts. The government, already deep in deficit, would have to borrow to make up the shortfall.

Which is shown below:



But then Krugman goes on to say:

... in essence, such schemes involve having the government borrow heavily and put the money in the stock market. That's because the government would, in effect, confiscate workers' gains in their personal accounts by cutting those workers' benefits.

Once you realize that privatization really means government borrowing to speculate on stocks, it doesn't sound too responsible, does it?

Also, the scheme assumes there will be high stock returns, but Krugman says that's not realistic.

This is what Bush means when he talks of "fixing" Social Security.

posted by Quiddity at 12/10/2004 08:09:00 AM

Another one joins the ranks:

Over at TPM, Josh Marshall writes: (emp add)

The Post discusses the president's domestic policy plans and particularly the effort to phase out Social Security.

One nice passage: "To build public support and circumvent critics in Congress and the media, the president will travel the country and warn of the disastrous consequences of inaction, as he did to sell his Iraq and terrorism policies during the first term, White House officials said."

This would seem to be analogy critics could use to some good effect.

More and more people are seeing the "fix" of Social Security for what it really is - ending the program.


posted by Quiddity at 12/10/2004 01:39:00 AM

Into the "infinite future"

Yes, if you want to scare the hell out of people, simply claim that there will be enormous deficits for a program. A program where you take tiny losses - and sum them until the end of time. Don't believe us? Read this from the New York Times: (excerpt, emp add)

Bush Rules Out Payroll Tax Hike for Social Security

If nothing changes, trustees project a shortfall of about $11 trillion in what the government needs to pay promised benefits to the coming waves of retiring baby boomers and beyond, into what trustees called ``the infinite future.''

posted by Quiddity at 12/09/2004 05:37:00 PM

Letters to the New York Times:

In the wake of two Op-Ed's in the New York Times promoting privatization of Social Security, there were some good letters. But in a single letter published two days later, we read: (excerpts, emp add)

To the Editor:

As the father of the Chilean pension system, José Piñera ("Retiring in Chile," Op-Ed, Dec. 1) paints a seemingly attractive picture of personal retirement accounts.

[...]

Even the World Bank, a staunch proponent of private accounts, now concludes that they fail to prevent poverty in old age and that more needs to be done to strengthen the public safety net.

[...]

... rather than spend trillions of dollars we don't have on risky private accounts that weaken Social Security, we should strengthen the guaranteed benefit for all generations.

Ladan Manteghi
Dir., AARP Office of Intl. Affairs
Washington, Dec. 6, 2004

posted by Quiddity at 12/09/2004 05:13:00 PM

It's catching:

Yesterday we expressed our view that Bush is out to end Social Security. Simple as that. All the talk of partial privatization is a ruse. Now we read Yglesias in TAPPED who writes: (emp add)

IN CASE YOU WERE WONDERING. The president wants to make it clear that finding the $2 trillion he'll need to finance his proposed abolition of Social Security won't be raised through higher taxes, so we'd better hope the Central Bank of China has a serious hankering for more bonds.

Mark A. R. Kleiman has related thoughts.

posted by Quiddity at 12/09/2004 03:13:00 PM

Dowd on Rumsfeld:

We watched Rumsfeld handle that soldier who asked the question about armoring vehicles and felt that the Defense Secretary was up to his usual bag of tricks - tricks designed to put the interlocutor on the defensive. (Variants of the "gosh and golly" crap he uses in other forums.) Specifically, Rumsfeld's request that the soldier repeat the question. The original question was succinct and well delivered. However, when the soldier repeated it, it was less crisp and lost its punch.

In today's Op-Ed, Dowd makes a point of Rumsfelds attitude: (emp add)

Rummy, however, did not hesitate to give the back of his hand to soldiers about to go risk their lives someplace he didn't trouble to go.

He treated Thomas Wilson - the gutsy guardsman from Tennessee who asked why soldiers had "to dig through local landfills for pieces of scrap metal and compromised ballistic glass to up-armor our vehicles, and why don't we have those resources readily available to us?" - as if he were a pesky Pentagon reporter. The defense chief used the same coldly cantankerous tone and squint he displays in press briefings, an attitude that long ago wore thin. He did everything but slap the kid in the hospital bed.

In one of his glib "Nothing's perfect," "Freedom's untidy" and "Stuff happens" maxims, Rummy told the soldier: "As you know, you go to war with the Army you have."

At least somebody else noticed.

posted by Quiddity at 12/09/2004 10:04:00 AM

Another place to go:

We also like this week's Troubletown cartoon about the change in network news, post Rather and Brokaw.

posted by Quiddity at 12/08/2004 02:38:00 PM

Don't beat around the bush:

We read again about Republican plans to change the accounting in order to hide massive shortfalls connected to Social Security "reform". And over at TAPPED, they have a quick summary/comment on the subject.

Let's not waste time here. The Republicans want to end the Social Security Insurance program. That's all there is to it.

Any move away from the safest and most reliable system, of universal enrollment and government issued bonds, is a move away from the original intent. It is not reforming the program. It's ending it.

UPDATE: Yesterday, over at The Left Coaster, Steve Soto has similar thoughts:

... Social Security was never intended or designed to be an investment vehicle. It was simply supposed to be an old age insurance policy, guaranteeing a basic benefit so that seniors would not become destitute. And as such, once you implement the structural fixes that can and should be done to address the system’s long term solvency, there is no case to be made for transforming an old age insurance policy into something that it was never intended to be in the first place.

posted by Quiddity at 12/08/2004 02:24:00 PM

Hopeless:

From Newsweek: (excerpts, emp add)

The Christmas Miracle

Most Americans believe the virgin birth is literally true, a NEWSWEEK poll finds

Seventy-nine percent of Americans believe that, as the Bible says, Jesus Christ was born of the Virgin Mary, without a human father, according to a new NEWSWEEK poll on beliefs about Jesus.

Sixty-seven percent say they believe that the entire story of Christmas—the Virgin Birth, the angelic proclamation to the shepherds, the Star of Bethlehem and the Wise Men from the East—is historically accurate.

Sixty-two percent say they favor teaching creation science in addition to evolution in public schools; 26 percent oppose such teaching, the poll shows. Forty-three percent favor teaching creation science instead of evolution in public schools; 40 percent oppose the idea.

We won't go into the details here, but both Matthew and Luke's stories about the birth and early life of Jesus are a complete invention. They were crafted to persuade a Jewish audience (birth in Bethlehem because that's where King David was born, trip in-and-out of Egypt to create a parallel with Moses, etc.)

posted by Quiddity at 12/08/2004 08:45:00 AM

Great Oliphant:

We highly recommend today's Pat Oliphant cartoon.

posted by Quiddity at 12/08/2004 04:57:00 AM

Divisions:

We've been reading a lot about how the country is divided between Red and Blue, Religious and Secular, or NASCAR and NPR, to name a few. But those categories are way too large and don't properly address policy issues (e.g. "red" people like Republican foreign policy but would benefit from a Democratic domestic agenda).

A new way of classifying people is sorely needed. With that in mind, we propose going back to an old standard - classifying people by the kind of car they own. Here is GM's company saying* from many years ago:

"Chevrolet is for the hoi polloi, Pontiac for the poor but proud, Oldsmobile for the comfortable but discreet, Buick for the striving, and Cadillac for the rich."

That king of division is not geographically based and promotes a richer dialogue. Plus, there is the fun aspect of critiquing the cars on their own merits (with the added benefit of getting Mickey Kaus to quit writing about politcs and concentrate on his true love: rear wheel drive).

Let's do it! - updated for the current mix of manufacturers.

* NOTE: We discovered the saying in an 1996 issue of the Wilson Quarterly (vol X, no 5). If any readers are familiar with it, we'd be interested to know and appreciate comments. For example, the saying is not dated, but we suspect it was from the 40's or 50's.

posted by Quiddity at 12/07/2004 07:24:00 PM

The doctor is out (of his mind):

Here is what, in essence, the Senate Majority Leader said on ABC's This Week.



Two falsehoods. From the CDC:

• HIV has not been recovered from the sweat of HIV-infected persons.
  
  
• Contact with ... sweat has never been shown to result in transmission of HIV.

Read the full story over at Liberal Oasis.


posted by Quiddity at 12/07/2004 10:42:00 AM

Vote for Democratic Veteran!

Democratic Veteran, a weblogger we like, is up against the bad guys in the Weblogs 2004 Awards: Best Military Blog category. We reccomend a vote for DV.

posted by Quiddity at 12/05/2004 09:39:00 PM

Flashback:

Reader xp brings to our attention the Bushmaster 2004 - a remote control that Karl Rove might have used during the debates. (Apparently it's made in Japan.)

posted by Quiddity at 12/05/2004 09:29:00 PM

Fox News as portrayed on the Simpsons:

In tonight's Simpsons, the show started out with a "media circus" and several news trucks were shown, one being that for the Christian Science Monitor.



Then local Springfield reporter Kent Brockman said, "Here's Fox News", and we see the front of a huge truck (with the song "We are the Champions" playing).



But then more of the truck comes into view, and look at what's also part of the vehicle.



Right on!

posted by Quiddity at 12/05/2004 09:07:00 PM