What’s the problem?

A WaPo article on Bush’s comments yesterday on Social Security:

“We had a good discussion about the problems that face the Social Security system,” Bush told the press, “and there is a recognition among the experts that we have a problem. And the problem is America is getting older and that there are fewer people to pay into the system to support a baby boomer generation which is about to retire.

“Therefore, the question is, does this country have the will to address the problem. I think it must. I think we have a responsibility to solve problems before they become acute. . . . [W]e must be willing to address this problem. . . . [T]he time is ready for us to solve this problem. . . . I think what’s really important in the discussions is to understand the size of the problem. . . . What’s important, Steve, is before we begin any discussion is to understand the scope of the problem. And that’s why these trustees are vital in helping educate the American people, and Congress, as to the size of the problem. And I will not prejudge any solution. I think it’s very important for the first step to be a common understanding of the size of the problem. . . .

“We have got a member of what was called the Moynihan Commission with us. They studied this problem in detail. They made some suggestions about how to move forward in solving the problem. Much of my thinking has been colored by the work of the late Senator Moynihan and the other members of the commission who took a lot of time to take a look at this problem, and who came up with some creative suggestions.”

And, Bush said in closing: “We will not raise payroll taxes to solve this problem.”

A couple hours later, press secretary Scott McClellan took to the podium for his press briefing. And in case anyone missed it: “We all need to agree that this is a real problem,” he said. Over and over again.

Well, they certainly know how to stay on-message, even if it makes them sound retarded.

Of course, most of us know the “problem” is not nearly as huge a crisis as the Bushies are making it out to be. But Social Security “reform” is a cornerstone of the Bush vision thing, deranged as their formula may be. Just one more attempt to take from the working classes. Krugman summed it up nicely two days ago:

They come to bury Social Security, not to save it. They aren’t sincerely concerned about the possibility that the system will someday fail; they’re disturbed by the system’s historic success.

For Social Security is a government program that works, a demonstration that a modest amount of taxing and spending can make people’s lives better and more secure. And that’s why the right wants to destroy it.

Couldn’t have said it better. Be sure to “read the whole thing”; it may be Krugman’s best piece to date.

The Discussion: 4 Comments

Sorry, but Social Security is a demographic problem, and it is serious because private retirement funds and social security are equally affected. People who retire dis-save, regardless of where the money is held. Any asset that gets sold as a result faces price headwinds,so high expected rate of return used by actuaries may be optimistic and understate the problem.

The public is saving less than ever before, and the federal govt. has large deficits. If the President can use the bully pulpit to awaken people regarding the saving that they need to do, what is wrong with that? Does it really make sense to continue a program that is actuarially untenable? A clear, unmistakable message to the people is a service to them.

Whether Bush uses appropriate policy to solve the problem is an open question. Immigration, extending the retirement age, and needs testing of benefits will play a part.

A good source to learn about the future of Social Security is the book “The Coming Generational Storm” by L. Kotlikoff.

December 10, 2004 @ 5:41 pm | Comment

I hope you’re hearing the irony in your own words when you explain why the system won’t work:

The public is saving less than ever before, and the federal govt. has large deficits.

Those two phenomena are the direct result of Bush’s policies! We had a HUGE surplus a mere four years ago, remember? And what did we do? We declared war on Iraq while doling pout unprecedented tax cuts to the rich, bleeding the country dry.

All that said, Social Security definitely needs an overhaul — but this privatization scheme is insanity. The Bush people agree it will cost literally trillions, yet no one has ever said from whence the money will come.

December 10, 2004 @ 10:35 pm | Comment

My hope is that Greenspan will get involved in the policy formulations. I’m not a Bush supporter, and agree that privatization is at best a partial answer.
It is important to get reform of Social Security on the table, and the fact that Bush is tackling the issue reflects well on him. The reflexive criticisms of Krugman do not serve the people well. Note that there is only bile, and no solutions.

The ironic part is that globalization issues on employment and Social Security will all be turned upside down as the demographic profile of the country asserts itself. Lack of employees will be an issue after the baby boomers retire. These fewer workers WILL NOT BE ABLE TO PAY for the retirement of the large baby boom generation.

December 11, 2004 @ 8:13 am | Comment

Very interesting stuff coming out of our gay Republican rep from Southeast Arizona. It mostly contradicts the president. I’m rather proud that the party might split right here in our own state.

December 13, 2004 @ 12:10 pm | Comment

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