Bush - The 21st Century Snake Oil Salesman

Published on March 6, 2005 By COL Gene In Politics

The Associated Press today reported that the Bush administration is sending a phalanx of people from the White House and the Treasury Dept. to sell his Social Security changes to the American public.

There is a very basic problem with what President Bush is doing - what is the president asking us to consider? We are constantly told when questions are asked about his plan, “that has not been decided.” It’s like Mr. Bush is trying to sell us a new car that has 20 inch wheels. What does it look like? How long is it? What is the gas mileage? What is the size and type of engine? Is it front or rear wheel drive? What kind of braking system does it have? The answers to all these questions is,” we have not decided yet”!.

The unanswered questions about his Social Security changes are not just the details but elements that should be in BOLD PRINT. Below are just some of the questions that should have been answered before Bush attempted to sell the American people on changing Social Security:

How much can I invest each year? – we’ve been told 4% but there are other indications it would be limited to $1,000 per year initially and go up $100 each year. That is not 4% for a person making $50,000- they should be able to invest $2,000 per year. If the taxpayer makes $90,000, which is the current limit on Social Security taxes, they should be able to invest $3,600 per year.

How are we going to pay for the transition costs to ensure that the people who are too old or do not choose the individual accounts receive their full Social Security benefits? Do we increase the Social Security tax limit? Do we borrow money and pay both the interest and principal back from the higher earnings in the individual accounts? How can anyone make a choice without knowing how it is to paid for?

How much will the annual maintenance fees be on these individual accounts? Will the amount be regulated and who will pay those fees? What investment funds will be available for the individual retirement accounts and can the owner switch from one type to another?

HOW MUCH OF A REDUCTION WILL THERE BE IN THE SOCIAL SECURITY BENEFITS IF A WORKER SELECTS THE INDIVIDUAL ACCOUNT OPTION?

We’ve got a president running around the country spending huge amounts of taxpayer dollars from the White House staff and the Treasury Dept, selling something he hasn’t yet defined. It’s just like the old snake oil salesman in the 1800s who stood up and said I want you to buy this elixir without stating the price or what it would do FOR and TO the buyer. Until President Bush has as a specific plan that answers the essential questions, he should return to the White House and do his homework.

Comments

drmiler

on Mar 06, 2005

How much can I invest each year? – we’ve been told 4% but there are other indications it would be limited to $1,000 per year initially and go up $100 each year. That is not 4% for a person making $50,000- they should be able to invest $2,000 per year. If the taxpayer makes $90,000, which is the current limit on Social Security taxes, they should be able to invest $3,600 per year.

That's right. It keeps allowing more up to 4%. Maybe you should go look at this site instead of running on supposition.Link

COL Gene

on Mar 06, 2005

drmiler

For a worker to get to 4% if they earn in the even the average income will take years. Their so called individual account, after the maintenance fees are subtracted will be very small! If he says 4% why is it not 4%? What about all the other questions? I did not see answers to them.

Again, you always ignore the issue. Why has Bush not been up front with what he is proposing? It most likely will not look so good when all is known like how much will the Social Sceurity benefits be reduced with the individual account! Where does that show?

Slanderer

on Mar 06, 2005

Social security must be raised because all the money in the accout has been spent. This is not a new development, but rather one that has been stewing for decades. So, the money directed to users is directly tied how many people pay into the account at any given moment. What is disturbing is an increasing reliance on dipping from this fund.

Start your search around the '91 time frame. What people forget is that much of what made Clinton popular was the fact he spent and not go in the hole. He took from the account. The only difference between now and ten years ago, is there is not enough income generation to offset the huge spending increases.

You'll get your prescribed amount of money - but watch fed Alan Greenspan. He'll have to pull money out of thin air and inflate. What will happen is that your monthly cheque might only buy a week's worth of groceries. Inflation is not corporately driven despite what some might say. Inflation starts at the fed level by spending more than it takes in and than running the printing press to make up the difference.

If you want to follow social security follow jim puplava, gary north, ron paul, and the loss of purchasing power in the greenback.

drmiler

on Mar 06, 2005

He has or is you arrogance so large that it stopped you from reading the link I posted? How much more up front do you want? I mean christ it's on the internet for *everyone* to read!

COL Gene

on Mar 06, 2005

Your Link does add some light but does not answer two of the biggest questions. How to pay the Trillions in Transition costs and how much would the benefits be cut if you opt into the individual accounts. Finally, since the private accounts do not solve the basic issue of solvency, how is the lack of money to pay benefits to the workers that do not opt for this change to be provided?

If we want to make sure that the benefits under the current system can be paid to the baby boomers, we need to add to the trust fund which has nothing to do with individual accounts.

trstnoone

on Mar 06, 2005

Gee, another idiot Liberal talking out his butt, what a big surprise!!!!!!!!

COL Gene

on Mar 07, 2005

There is still no answer to How do you pay for the proposed change. How do you pay the benefits to older workers who do not choose the individual account option. How much will the Social Security benefit be reduced if a workers selects the individual account.

I calculated the end value under the bush plan to start at $1,000 in year 1 and increase the allowed investment by $100 each year with a net 8% compounded rate of return. At the end of 15 years, the balance would be $48,922. That amount as an annunity would produce tops $300 per month which after inflation in 15 years is about $150 per month to the retired worker. The payout only produces a segnificant montjhly income if you carry out the calcultion to 25-40 years. If the 8% does not materalize, the impact is dramatic. Without knowing how much the traditional Social Security benefit would be reduced if a worker selects the Bush option, it is not possible to evaluate the impact of his plan!

The value in 25 years using the above assumptions shows a balance of $150,000. 30 years shows a balance of just under $245,000. Thus, if a way could be found to keep the system solvent and pay the transition costs without borrowing, this plan only works for workers 40 or younger.

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