I've criticized Senator Obama before for his inaccurate views of the Social Security program. Paul Krugman has a very nice takedown--on the TV, no less:
What is Obama thinking? Is he trying to position himself as a liberal...Republican?
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I don't understand your reasoning.
First: I followed your links back to the date when you mentioned the Trustees' report. I read the A SUMMARY OF THE 2007 ANNUAL SOCIAL SECURITY
AND MEDICARE TRUST FUND REPORTS . They say: "Projected OASDI tax income will begin to fall short of outlays in 2017, and will be sufficient to finance only 75 percent of scheduled annual benefits in 2041, when the combined OASDI Trust Fund is projected to be exhausted." How can you be saying that there are no problems?
Second: What are you accusing Obama of? It sounds to me like he is saying to increase the maximun income (cut off point) for paying the social Security tax. Why is that "Republican". If anything, it is a liberal,(socialistic) idea - it makes social security less regressive.
Please explain.
Well, I'm not really sure what Obama's suggestion was (And I didn't get a sense of it from the clip.), however it sounds like Krugman was picking on Obama for trying to make Social Security into a campaign issue. And I think that's what Mike was going for, as well.
Mike's covered Social Security a bunch of times on the blog, mostly from the standpoint of refuting arguments that it's in trouble and needs some kind of change. So I think his point is that, even if what Obama suggested isn't necessarily bad, it's unnecessary; in the long run, it won't have any effect on the solvency of Social Security (which is in perfectly good shape even if we do nothing to it).
I wish Mike would respond. Joshua, you seem to have missed my whole point. I went back and looked at Mike's "refutations". He refers to the latest statement from the Trustees. I read that. It says what I quoted above which seems to me to be saying that SS IS in trouble. And in that case what Obama said IS necessary.
Come on Mike, what am I missing?
Karl,
what Mike is saying is that the official projections are based on overly-conservative assumptions and if the fund grows in future at anything like the actual rate achieved in the past it will remain solvent.
However as more people start taking money out of the fund it will stop generating large annual surpluses which are available to be borrowed by the US government.
Mike's argument is here:
http://scienceblogs.com/mikethemadbiologist/2007/04/framing_social_secu…
Can I point out that even if there is a future solvency problem, there's a relatively simple fix - allow Social Security to invest a small percentage of receipts in the stock market via private fund managers.
Ian:
I'm sorry. I am not an "anti", not a "denialist", not a fundamentalist. I just don't understand Mike's reasoning vs the Trustee's statement. And the two responses don't explain, they just say read Mike's argument. I read Mike's argument before, as I said above. Reading it again doesn't change anything. Mike says: "Social Security will most likely be solvent in perpetuity without any need for tax increases or benefit cuts." He says to read the Trustees report. I did. The Trustees say the opposite.
Question: Why should we think that a biologist knows more about economics than the people whose job it is to evaluate the economics of the situation.
You say: "allow Social Security to invest a small percentage of receipts in the stock market via private fund managers."
And Mike accuses Obama of being a "Republican"!
That's a Republican solution. First, it's dangerous. Second, it behaves like a tactic to pump more money into the stock market to benefit the rich who have a lot of their wealth there. Third, it diverts money from the SS fund to the private fund managers.
"That's a Republican solution. First, it's dangerous. Second, it behaves like a tactic to pump more money into the stock market to benefit the rich who have a lot of their wealth there. Third, it diverts money from the SS fund to the private fund managers.:
You know that CalPers and most other public pension schemes already invest in the stock market I take it?
If there's a proble mand there's a solution to that problem who cares if its Republican or Democrat?
(Actually the Republican solution is to let peopel invest money in the market themselves - never mind that they'd be paying 2-3% or more per year in fees versus the 0.25% or so the SSA could negotiate.)
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