A blog focusing on politics in Central Illinois.

Wednesday, March 23, 2005

A retort

Yesterday Gary Sawyer hit back on my Social Security posting, which was a reply to his post about that little pesky 1 trillion dollar devil. I said Gary didn't understand how Social Security worked or was trying to mislead us, one our the other, here is a recap of what he said originally.
Of course, no one in the Social Security debate is advocating taking all of the
Social Security money and putting it in a private account, or stuffing it in a
mattress. President Bush has mentioned private accounts of relatively small
amounts – 1 to 5 percent of an individual’s contribution.

To which I replied, 1 to 5 percent is a relatively large amount, because thats actually 1 to 5 percent of your pay, currently you pay 6.5 percent in payroll taxes up to 90,000 dollars to Social Security, and Bush is advocating taking almost all of that and throwing it in a private account, I would say thats not a relatively small amount, and thus Gary Sawyer either doesn't get how Social Security works, or is trying to mislead us. But then again I guess I should have said Gary Sawyer doesnt get how social security works, doesn't get how Bush's proposal works, or is trying to mislead us. Either way any of those options isn't a good option for the editor of the largest print information source in our area.

Now on to the rest of his post.
The solutions are basically these – cut back on benefits, raise Social Security
taxes or do a combination of the two.

No Gary indeed there are other solutions, raise or remove all together the cap on Social Security payroll tax. Social Security goes along way towards those who need it the most, so lets not make it a regressive tax which it is now, let's make it fair to everyone. If you raised the cap to 200,000 dollars Social Security would be solvent for as far as the eye can see, but then again you don't want those pesky rich people to pay their fair share, just cut their taxes and leave our children to pay for it.

The private accounts may be one way out of the problem. Bush has asked for other
solutions. The silence so far has been deafening.

The silence is deafening for a good reason, a while ago there was a good idea proposed, and actually passed into law, it works, you may have heard of it, it is called Social Security, that is our proposal, tinker with it sure, but don't ruin it. There haven't been other solutions because there don't have to be, if you did something as simple as raise the cap on Social Security which by the way was done under Reagan, then there wouldn't even be this discussion.

Let’s say a young person were allowed to divert some of their Social Security
funds into a private account and that the private account performed moderately
well. That person would have more money available at retirment than the person
who put all of their money in Social Security.

In a generation that is floundering in more debt, be it credit card, student loans, and other loans, than any generation before them, I think it would be a bad idea to say by the way even though you are a terrible financial planner right now you need to start planning for 50 years down the road, good luck! I know many young people that don't even balance their checkbook, and I have asked them what they think about this, and the response, "I would have no idea what to do." So much for the security part.

If that happens enough, then the increase in Social Security taxes wouldn’t have
to be as great.
Now you throw me off here, because frankly I have no idea what you are talking about. No where have you mentioned an increase in Social Security taxes, which would solve any problem there may be, and then now you say if you come out ahead often enough then we won't have to raise social security taxes as much. Well umm if you raised Social Security taxes then there wouldn't be a problem. So I'm glad you finally realized the solution.

My point is simply this. What’s so wrong with giving a young person the option
of diverting some of their Social Security money into a private account?

Because that isn't how the system works! You can't save the system by completely undermining it.

And finally,
It’s probably not a good idea to make a habit of answering anonymous bloggers,

Umm Gary, don't you publish unsigned editorials almost well you know ALL THE TIME!