Remember the "lockbox" of the 2000 elections?

[karynnj]

One of Al Gore's strongest messages in 2000 was that he wanted to shore up the SS fund.

I was looking for a Greenspan statement that the INTENTIONAL SS surplus was to be saved as treasury bills or treasury IOUs. I still have not found anything from a solid source that I would feel comfortable posting as support. I don't know this site and it seems to be from the Ron Paul end of the spectrum includes an excerpt from a budget committee meeting that gets to the heart of the issue with social security.

What is clear to me is the social security fix in the 1980s ended up being almost a fraud. The FICA taxes, which are far more regressive than income taxes were used by first Reagan, then Bush, then Clinton (and later Bush and Obama) to allow both tax cuts (disproportionately to the wealthy) and spending to increase without Congress having to raise revenue to balance it.

I wonder now if the reason the media was so pro GWB in 2000 - turning any mild Gore flaw into a major issue and whitewashing Bush - might have been that creating the "lockbox" would have burst an additional bubble that might be bigger than the tech bubble and possibly as big as the housing bubble.

I wish the Senate would have listened to former Senator Hollings - and I hope that everyone here will forgive me for using this source, but I can't find a better one.

HOLLINGS: Well, the truth is…ah, shoot, well, we all know there’s Washington’s math problem. Alan Sloan in this past week’s Newsweek says he spends 150%. What we’ve been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.

That’s the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody’s attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It’s projected to have this year a 117 million surplus. I’ve got the schedule, I’ll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem, we planned against that baby boomer problem. Our problem is we’ve been spending that particular reserve, that set-aside that you testify to that is so necessary. That’s what I’m trying to get this government back to reality, if we can do that.

http://www.washingtonsblog.com/2011/07/were-americas-assets-looted-years-ago.html

Neither extreme view is reasonable. I feel that our government betrayed us when they did this. Yet, all of us benefited to some degree by tax cuts or new programs that were really funded by stealing the SS money. The whole idea of the fund was that the babyboom bulge would create a problem and we were supposedly proactively setting money aside. This should be a very strong reason for why at least part of the solution must be tax increases.

[Mass]

1. Is there a website that explains how SS is managed?

I am asking because you hear people making claims that are discordant. On one side, SS is solvent for the next 30 years or so (so it should not be a problem), on the other side, all sorts of people (including Kerry) are saying that SS is part of the problem. So, I must be missing a part of the equation. In particular, I hear about IOU, but am not sure I understand what it is about?

[karynnj]

2. That is essentially what I have unsuccessfully been looking for

to have certainty that I am correct in thinking that the reason for the difference is what I have posted here.

The 30 year statements, that Kerry has also made, I think assume that the treasury IOUs/bills are real and will be used. they are after all issued by the US Treasury!

The other statements - not Kerry's - that SS is on the verge of not having enough money writes off ALL of the IOUs.

I think Kerry's recent statement is in between. I suspect he is including the general funds replenishing the trust funds the amounts they need to cover the difference between what they take in and what they pay out when he says if you pay Medicare, SS and the interest on the debt, there is too little to cover all government expenses. Where he differs from the Republicans is that he speaks of the need to increase taxes to avoid "cuts that hurt people" and he speaks of growing the economy and creating jobs. The latter immediately eliminates some of the deficit by increasing revenue and decreasing (unemployment/welfare) benefits - though that will not come close to making a dent in this.

Obama is in a very tough place on this. The courageous thing to do - if all this is true - is to tell the truth - unpleasant as it is to the American people. One thing he clearly has to do is make it clear that the Bush tax cuts can not - for anyone - be extended. As Obama has been in DC just since 2005, he is better positioned to tell the truth that Reagan, both Bushes and Clinton all allowed this "unified budget - that allowed billions of dollars for SS to be spent as tax cuts and spending. For them, it was win/win - using that money like that stimulated the economy and both creating new programs and cutting taxes make you popular. This would make the President who rode into office on hope and change, the messenger of bad news. ( With FDR and Churchill as examples, doing this does not have to be political suicide - not to mention, it may take the President doing this to really make people see that our leaders have not led wisely and we need to fix this.

I don't think there can be much waste in Social Security significantly. I don't think their administrative costs are a significant portion of the total costs - the checks are. I also do not think that amount of fraud can account for much either. i think raising the cap is a fair way to raise the revenues that SS takes in - making the difference between revenue and outlays positive again (it was just this year that they have been about equal).

I hope that the way that they achieve some of the reduction in Medicare is by removing some of the presents lobbyists won for corporations. The first one I can think of is that they can require that drug companies not charge no more for drugs here than what they charge in other countries (or even specify Canada) and any by extra costs related to producing them here vs elsewhere or transportation they can justify. It is ONLY because they have monopolies due to patents that they can set their own prices. The idea of treating prescription medicine production as a regulated monopoly has a good precedent in the over a 100 year history of Bell Telephone. In the case of Medicare and the US health segment altogether is that there is waste and fraud - and they should eliminate what they find.

Bryon Dorgan, at various times, tried to pass an amendment allowing importation of prescription medicine from Canada. However, there is something exceedingly strange that many of the drugs from Canada were actually produced in the US and exported to Canada. Then, even with the cost of reimporting them, they are significantly cheaper. There is NO WAY that the companies can really justify that they sell the drugs cheaper elsewhere. This means that the US market is bearing a disproportionate share of the cost of management, production and research.

[Mass]

3. The problem is not so much the patents than the fact that the US govt,

because of its absence of a single payer system of one type or another, cannot negotiate with pharmaceutical companies for drug prices the way it is done in other countries.

In France, for example, in order for a drug to be reimbursed by the securite sociale, there is a negotiation that fixed the price it is sold and the margin the pharmacy will make (at least it was like that 10 years ago). One of the results was that drugs were basically 5 times less expensive than they were in the US for somebody without insurance (and state insurance reimbursed about 70 % of this, while a private insurance, if you had one, could reimburse the difference). This means that, at best, a French person would pay 6 % of the price a US person without insurance would pay, making drugs accessible to all or nearly all.

Of course, insurance companies negotiate with pharmaceutical companies and do not pay drugs full price. Neither do Medicaid, or the Veteran administration, but, because the negotiation is spread out, it is not as efficient as it would be in a single negotiation.

As for Medicare D, the stupid thing is that Congress did not vote the right to negotiate (though I am not sure whether this was changed or not).

I think that research costs is also an easy excuse from manufacturers. But why charge less if you can charge more.

[karynnj]

4. Interesting example

The reason I had said patents was because it prevented any competition - other than from similar, but not the same drugs.

Even without single payer, they could move to regulating the price. It is disgusting that when I use my insurance card, I not only get the benefit of the amount paid by the insurance company, but the total paid by me and the insurance company is much less than what someone without insurance has to pay. (The same with doctors and dentists, who get almost twice as much from uninsured people.)