Boston Globe's Stein has a Fair and balanced Soc Security piece- REALLY!

[papau]

http://www.boston.com/news/nation/washington/articles/2005/01/14/social_security_assessments_still_poles_apart/

Social Security assessments still poles apart
By Charles Stein, Globe Staff | January 14, 2005

First in a series of occasional articles examining the economic and political stakes involved in Social Security reform.

In the growing national debate over Social Security, it is sometimes hard to believe the two sides are arguing about the same program.

President Bush has made Social Security reform the centerpiece of his second-term agenda and will unveil details of his plan for private investment accounts within the next month. The president's proposal may clarify the debate, but it won't end the squabbling.

Defenders of the current system and proponents of private accounts disagree over just about everything, from the role government should play in guaranteeing that Americans have at least a modest income after they retire to the risks of allowing people to invest Social Security funds in the stock market.

The split extends to the most basic questions: How serious are Social Security's financial woes? Does the system need an injection of $3.7 trillion? Or $10.4 trillion? Will a crisis develop in 2018, 2042, or never?

Everyone agrees that the aging of the baby boom generation eventually will strain the system's finances. After that, the consensus breaks down.<snip>

[papau]

1. I wrote Stein a thank you note - Heck- this is a first MSM to be balanced

Subject: Re Soc Sec article - Congratulations on the fairest mainstream media article

Usually I rant about how the media are just salesmen for the GOP, but
today's article you wrote on Social Security was actually balanced.

Thanks.

A few points you may want to include in any follow on article are:

A. The Reagan/Greenberg Social Security payroll tax overpayment to build the Trust Fund concept was a lie if we treat those funds as not existing - If those funds are an illusion, Reagan pulled a fast one and it was only a transfer of the burden of government from the rich and upper middle class to the poor and the lower middle class. All bonds are issued based on the future taxes that will be raised - so perhaps the fairest thing is to redeemed the Trust Fund bonds today via the Gov going today to the capital markets- say selling the bonds to the government of Japan - and then investing those monies in " real" assets like stocks and real estate.

B. As some would say, the money was stolen, and now the rich will not pay it back via the required Fed Inc Tax increase beginning in 2018.

C. The "group that includes most Democrats" also includes most Actuaries -like myself - of both right and left political beliefs. Indeed any shortfall can easily be made up with fairly modest tax hikes (since the annual bond redemption is relatively tiny each year from 2018 to 2042)and/or benefit cuts (such as moving the Reagan retirement age of 67 now in effect to age 70 for retires who retire on or after 2043) and indeed, that the "day of reckoning is decades away" may mean never since the projections use a silly 1.6% GDP growth over those years which is much lower than the usual GDP growth in America).

D. Please note the lack of logic in referring to "The other side, a group that includes supporters of private accounts and those who want to keep the government from going into deep debt to meet its obligations to future retirees" when there is per Krugman a $15 Trillion debt increase ($2 trillion over the 10 years) if we go to private accounts. "Does not keep us from going deeply in Debt" would seem obvious.

E. And you might want to note that folks that say after all is said and done, the cut backs in the guaranteed benefit will be made up by the private accounts, always use 9% as the expected return for equity
investment, ignoring that such a return is highly unlikely as an average for a balanced by asset type indexed mutual fund account - even before the likely 1% "broker maintenance charge" (1% being the average cost being charge in Britain on the Thatcher variation of this).

F. The Social Safety Net for survivors and the disabled is NEVER repaired by private accounts under the Bush proposal.

G. And based on the history of Soc Security projections from 1992 to 2004, it is likely the day of reckoning is never, and those modest tax hikes that might be needed amount to zero.

" "This doesn't strike me as a difficult problem to solve," said Alicia Munnell, director of the Center for Retirement Research at Boston College". - Both true, and obvious.


Sincerely yours,