1 It's an interesting anaylsis, but he makes a few key ommissions regarding the problem with Social Security. 1) One of the fundamental problems with the current structure of Social Security is that it is invested only in the safest of investments - specifically, Treasurey Bills. In this low interest rate environment, the returns being invested within the Social Security money pool are pretty meagre. As such, the growth rates being used to project future funds to draw from are also pretty small. Hence, one issue of the problem. The solution is: increase the flexibility for the managers of this pool to invest outside of Treasury Bills, making it easier to earn better returns. When markets are getting choppy, they would still have the flexibility to go into cash. But, when the markets are earning double-digit returns, they (the managers) wouldn't be handcuffed to earning only a few percent. The other alternative is you wait for interest rates to rise, and hope the extra percent here and there on the Treasury Bills is more than sufficient (but this is a pretty passive strategy). 2. The current Social Security system is too generous as it stands. He (Jeremy) touches on this briefly, but the solution that he doesn't really talk about is the fact that if you lower the payout, the pool will obviously last longer. While this may not be popular, the fact is that it's a pretty generous system (twice what, say, Canada gives its citizens). So, obviously, the solution is: reduce the payout. Not too popular, but sometimes you have to make some unpopular moves as a government. And, it's not like the amounts couldn't be increased in the future if matters improve. 3. The current strain on the Social Security system, obviously, is the demographic surge of baby boomers joining their parents on collecting their loot. Conceivably, you could wait until the numbers of baby boomers start to decline, which might be in 20 years or so. Most conservative estimates give Social Security at least that long. Maybe population growth over that time would be enough to make the difference negligible, but it's still possible that with fewer taking it, Social Security would be given a chance to regroup. Solution: do nothing and hope for the best. I'm sure the government has a few demographers who would have identified this if that's the case, but then again, this isn't the brightest government. Basically, I think the whole issue of being forced into one asset class is the problem with the current Social Security system. If the Bush administration loosened the rules on that, it would probably be in a much better state down the road. Of course, you can't really hope for a workable solution from neocons. Considering fixing a domestic social issue doesn't involve using the military, I'm sure 99% of neocons don't really have a clue what to do. The fact it's being discussed on the "blogosphere" is actually pretty funny.

2 Gee, thanks Venom! I though you were making a real critique until you threw out the liberalized snark at the end! In reality, I try not to consider myself a neocon. It's sort of like labeling everyone that voted for Kerry a liberal. Isn't labeling people rather sophomoric? It's sort of like stereotyping. Anyway, let's discuss the points: Your #1: The TSP has already provided an example of what can happen under a more aggressive social security (actually considered a social insurance). TSP considers these factors and allows you to move your funds around depending on what you consider appropriate. Say for example you're 25 years old and the market is good youwould probably want to invest in the I fund (the most aggressive of the TSP funds). As you grow older, and your portfolio increases, you will want to move your funds to a more stable fund, such as the G or C funds, thus protecting your investment from loss. Point being is that we don't need to reinvent the wheel. We just need to be allowed to use it. If we were to allow the T-bill managers to work with stocks there is a good chance they would fail. To make it work we would have to hire new fund managers with the experience in stocks. It may seem like small potatoes, but if people don't realize what is happening it would be a bigger gamble on SS than most people realize. To water things down (and try and pull a point out of this) you're looking for Personal accounts without letting people decide for themselves. 2. If you think we're collecting a lot now you should use the SSA calculator to find out how much you will collect at retirement. It's a whole lot more than you would think. Your idea of reducing the payout falls under something called "Fee for Service". Basically it goes into your concept as a reverse tax. People don't like the word tax. It scares them. That's why we don't "pay taxes" to SS, we make "contributions". A tax is a tax from any angle and would bring up the image of our elders eating cat food in the meantime. 3. Since I restricted myself to the three primary arguments floating around the net, I didn't get into the other, more abstract government controlled psychology of things. This may sound rather off the wall, but what would happen to social security if we had another baby boom? Wouldn't that solve to problems of Social Security in 20 years? Of course it would. Only for a temporary time though. We would need another baby boom when the new baby boom got to retirement age. The way to enact a baby boom is through national psychological manipulation. I know this sounds weird, but it happens every day. All it would take is some form of study or push for parents with multiple children, maybe a huge tax write-off, and the babies will come. It's simple manipulation. Lastly, I must close with a partisan bite. It seems to be the tack of the post so why change it: If the Bush administration loosened the rules on that, it would probably be in a much better state down the road. Bush can't touch Social Security without the Democratic party going into fits. He could have Hillary Clinton sit down with Boxer, Pelosi and Byrd write up a bill on his behalf and if the words came out of Bush's mouth the DNC and AARP would say the exact same thing they are saying now. I'd put money on it.

3 Jeremy, if you're not a neocon, you shouldn't take offence. In truth, I appreciated your post on the topic because it didn't show a whole lot of partisan flair. I simply pointed out a few more solutions you didn't bring up. The quip about neocons was a generalized comment about how neocons seem to know how to "fix" everything, but that it usually involves the use of military force. I was simply pointing out how amusing it is to see neocons try and tackle this one. Oh, and I don't consider myself a liberal. Just an old-fashioned conservative. The "neo" that is thrown in front of it nowadays is a carte blanche for a segment of the population to spout off without really examining issues. Apparently, "might makes right" isn't just a motto - it's a religion. Fuck that. Anyhways, on to a few clarifications on your response: Regarding point 1, while I appreciate the flexibility a TSP offers, the fact is that most people aren't skilled enough to manage their portfolios. Most people don't know the first principles about investing and left to their own devices, will probably lose out more than if they had professional money managers doing the job for them. So, if you're going to expand the pool of asset classes that SS can invest in, obviously you're going to have to hire more managers. I mean, of course you're not going to have bond managers making equity calls on the market. And, frankly, I'd trust a bunch of analysts who will get paid bonuses to beat the benchmark rather than expect the average American to do the same. Plus, hiring world-class managers isn't that hard when you have the resources of the federal government. Sure, it will cost more in management fees to hire more managers, but if they can beat the overall market on a consistent basis, you're already ahead. Besides, it's a basic principle of investing that your risk decreases and your returns increase when you diversify. So, why make Americans worse off by sequestering in only one asset class, not to mention the asset class that will always offer the lowest potential returns? 2) It's a good point you make, but mine was simply an option. Obviously it wouldn't be popular (something I acknowledged), but it's still an option. And you could always grandfather (no pun intended) the current recipients that receive their payments so they keep their cheques at the same level, but decrease those that come out in, say, 5 years. But a reduction is still an option. 3) I suppose you could have another baby boom, Orwellian as it sounds (and hey, we're heading in that direction anyways), but another one would, as you point out, put the current system in jeopardy once those new baby boomers retire. The system would naturally have to be fixed in between the gap of current baby boomers and the birth of the next one. Would the government (regardless of party) have the motivation to do that? Likely not. People nowadays don't seem to care about much about issues that impact the country unless it's terrorism-related or it's about some woman they don't know getting a feeding tube removed. "Bush can't touch Social Security without the Democratic party going into fits. He could have Hillary Clinton sit down with Boxer, Pelosi and Byrd write up a bill on his behalf and if the words came out of Bush's mouth the DNC and AARP would say the exact same thing they are saying now. I'd put money on it." All true, but the fact is that there have been many issues that the Democrats have been passionately against and the Bush administration has pushed through anyways. They could protest, but it wouldn't really make a big impact if it was something Bush really wanted to pass.

4 I was just trying to give you the partisan jab about neocons. I wan't offended in the least. You'd have to get pretty nasty to do that. Good points all around. We're just going to have to agree to disagree on number 2 though. I guess I have a little libertarian in me after all. I think the funniest thing about the whole political stage on this is the fact that many of the Republicans have bailed on this. Maybe they're worried about taking responsibility from the Dems? I dunno. Just food for thought. I've rather enjoyed this little conversation.

5 "I was just trying to give you the partisan jab about neocons. I wan't offended in the least. You'd have to get pretty nasty to do that." Haha, who me? I'm never nasty. ;P Agreed, it's always cool to talk to people with a (functioning) head on their shoulders.

6 Mayflower Compact Coalition (Wangstas Fo' Shizzle My Nizzle)... RNC Chairman Ken Mehlman today attended the unveiling of the 21st Century Mayflower Compact at the Mayflower Hotel in Washington D.C.. The nine-point agenda includes support for school choice and private social security accounts. The Coalition is advised in part by former House Speaker Newt Gingrich’s consulting firm. African Americans often reach different and surprising conclusions on social issues that the casual (Caucasian) observer just won’t understand. For example, Black folks still want to see Michael Jackson find happiness. His high-pitched voice and soulful delivery is the soundtrack of generations and has a permanent place in the Black community’s psyche, no matter the plastic surgery, skin bleaching and alleged child molestation charges. Possibly, it’s the “he’s still Black” phenomenon that African Americans well understand. They want Michael Jackson’s name cleared. In short, they want him to make good music and just leave the damn kids alone. Likewise, Blacks see Old Age Survivors and Disability Insurance Program, popularly known as Social Security, as an entitlement forced into place during a period when “bigots” wanted to run things. And against the odds, a well respected Franklin Roosevelt was able to established needed protection for the public from the economic fears of old age, sickness, accident, and unemployment. As its original name suggest, African Americans believe the insurance program was created to do much more than provide an old age benefit. Wangstas (whites and uh oh oreos) are extremely white people who attempt to be “gangsta” (cool with Black people) in order to “pimp out.” They dress, speak and act for all practical purposes as a African Americans aside from the fact that they are not. Normally they are hated by the fam for being fake. The White House and its oreos who support overhauling Social Security have launched a highly targeted campaign to convince Black people that President Bush’s plan to create private investment accounts will have special benefits for them. The ghetto fab element about the GOP message to African Americans: “The shorter life expectancy of Black males means Social Security in its current form is not a favorable deal.” Proponents of privatizing social security who claim no group has as much at stake in the debate over reform as African Americans, in fact, are right. Black families of workers who become disabled or die are much more likely than their Caucasian counterparts to be dependent on the grip available from disability and/or survivor benefits. Blacks make up 12 percent of the U.S. population, but 23 percent of African American children receive survivor benefits, and 18 percent of the community are disability beneficiaries. Although the wangstas are making a special effort to appeal to the strizzeet with the 21st Century Mayflower Compact, the “lower life expectancies” illusion appears to reached every one except the African American senior. Their attempt to focus on a very narrow element of the system (current program based on longevity is unfair) is misplaced and doesn’t gain cool points. What the oreos fail to realize is their attempt to be “down” for da brothas... is just “gosh-darn” obnoxious (using their vernacular) and another clue identifying the new face of segregation. “A’ight?” Social Security is an insurance program that protects workers and their families against the income loss that occurs when a worker retires, becomes disabled, or dies. All workers will eventually either grow too old to compete in the labor market, become disabled, or die. President Roosevelt created the program to insure all workers and their families against these universal risks, while spreading the costs and benefits of that insurance protection among the entire workforce. It is a “pay as you go” program, which means the Federal Insurance Contribution Act (FICA) payroll tax paid by today’s workers are not set aside to pay their own benefits down the road, but rather go to pay the benefits of current recipients. The tax is progressive. The low-wage workers receive a greater percentage of pre-retirement earnings from the program than higher-wage workers. And, in the 1980's, Congress passed reforms to raise extra tax revenues above and beyond the current need and set up a trust fund to hold a reserve. As was the case when the program was established, higher-wage workers still oppose the social nature of the program. They argue low rates of return as a reason to switch from the current “pay-as-you-go” system to one in which individual workers claim their own contribution and decide where and how to invest it. In short, rather than sharing the risk across the entire workforce to ensure that all workers and their families are protected from old age, disability, and death, higher-wage workers want to enable opportunity to reap gains from private investment without having to help protect lower-wage workers from their disproportionate risks. Allowing high-wage workers (who are more likely to live long enough to retire) opportunity to opt out of the general risk pool and devote all their money to retirement without having to cover the risk of those who may become disabled or die, is da fo’ shizzle identifying the republican party’s desire to return to a segregated society. Roosevelt’s benefit formula currently in place intentionally helps low income earners. Lifetime earnings directly factor into the formula. And, thirty-five percent of Black workers born between 1931 and 1940 had lifetime earnings that fell into the bottom fifth of earnings received by workers born in these years. African Americans’ median earnings (working-age in jobs covered by Social Security in 2002) were about $21,200, compared to $28,400 for all working-age people. HNIC, President Bush, does acknowledge the difficulty Blacks will have in accumulating enough savings in their individual accounts to provide for a secure retirement once the progressivity of the current system is eliminated. However, he has only suggested allowing lower-income workers to place higher portions of their income into the uncertainties of investment accounts (creating even more risk). Yes! Private accounts would be passed on to children or other heirs. But, what the HNIC and his oreos doesn’t explain is lower-income workers would be forced to buy an annuity large enough (when combined with their traditional Social Security benefit) to ensure that they would at least have a poverty level income for retirement. Yo’ playa... da new private Social Security account fizzle sucks!

7 Wow...there's three minutes I'll never get back again.