Friday, February 04, 2005

Forbes on Fox tomorrow (Social Security)

Well, they've had me on back to back! I'll be appearing as part of a panel, with Steve Forbes among others, discussing whether or not the "Social Security Crisis" is real. 11 am eastern on Fox News. But, many of you don't have Fox News, so here were my two arguments:

1) I pointed out that I've seen timelines for global warming disasters that are more pressing than Bush's timeline for the Social Security collapse, but he hasn't done a thing about global warming. I also called Bush "a drama queen."

2) I tried to get this in, but it was quick -- people keep saying that Social Security is just a bunch of "IOUs" and that the government borrowed the Social Security money we've all paid, so there's really no money in the Social Security Trust Fund. True enough, but how does the government borrow money? With Treasury bills. Treasuries are our national debt. They are known throughout the world as the safest investment you can buy, almost akin to stuffing cash under a mattress, but you get interest. The reason is that, through the Civil War, two World Wars and the Great Depression, the US government has NEVER defaulted on its Treasury bills. Never even once. Never even missed an interest payment. Now, the Social Security Trust fund contains $1.3 trillion worth of Treasurys. To believe that those Treasurys don't represent actual money is to believe that the US government will default on about 1/5th of its debt! And not, only that, but that it would default on the portion that's meant to pay for the retirement of its own citizens! Many a country's economy has been completely tanked over far less an infraction. Honestly, if our government defaults on the T-bills in the trust fund... we have BIGGER problems to face than Social Security.

And here's one argument I didn't make, but wanted to: People keep saying this is a demographic problem. Because of the Baby Boom, and because our generation hasn't had so many kids, we have less workers paying in than will be retiring. Fair enough. The same is true in Europe. You know what the solution for both the US and Europe is? Cloning! No. Immigration. There are plenty of babies being had around the world. They might not be born here, but they might want to move here, buy a condo, and use their cultures to save our own ailing pop culture. The history of progress in the US (if you're not a Native American) is the history of immigration. The only reason we have the financial wherewithal to have Social Security in the first place is... the sweat and labor and ingenuity of immigrants. Maybe it's time we faced reality and started inviting people in.


At 11:08 PM , Blogger Ideasculptor said...

Very eloquently put, Mike. I had not encountered your first point at all and the thrid point only fleetingly. We've set the PVR to record you in the morning.

At 9:59 PM , Blogger Ideasculptor said...

As cool as it is to watch you on TV, Mike, it is nothing but frustrating to watch that show. The format is so typically foxy - long on emotion and melodrama but short on actual facts. No one gets enough time to actually get the point across that things that are being said are just fundamentally not true. And what's with the cryptkeeper guy. We kept expecting him to keel over mid-sentence. And listening to him cough on mic while others are talking is ever so pleasant.

I could have picked so many holes in the arguments presented.

Social Security isn't going bankrupt, it is approaching a point (in 50 years) where it will only be able to afford 70% of the benefits it is paying today.

Adjusting the payroll tax cutoff was barely touched upon, and anyone watching without knowledge of what he was talking about wouldn't have had a clue what he was trying to say.

Social Security is insurance, not a savings account. Hence the name. It is a guaranteed payment, allowing a recipient to rely upon receiving it throughout their retirement, NO MATTER HOW LONG THEY LIVE. A private account will run dry, leaving the recipient with nothing. People ARE living longer, which is exactly why we need social security. Never mind the vagaries of the financial markets which could live someone who retires at an inopportune moment with very little.

Some of those folks went on and on about better returns in the market, when every social security system which has been privatized in the last 50 years has proven that to be not the case.

I could go on and on, although I'm preaching to the choir, here.

Frustrating. FUD



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