Social Security privatization numbers don't add up....

[whistle]

...claims Paul Krugman in today's editorial of the NYT:

<snip>

February 1, 2005
OP-ED COLUMNIST
Many Unhappy Returns
By PAUL KRUGMAN

The fight over Social Security is, above all, about what kind of society we want to have. But it's also about numbers. And the numbers the privatizers use just don't add up.

Let me inflict some of those numbers on you. Sorry, but this is important.

Schemes for Social Security privatization, like the one described in the 2004 Economic Report of the President, invariably assume that investing in stocks will yield a high annual rate of return, 6.5 or 7 percent after inflation, for at least the next 75 years. Without that assumption, these schemes can't deliver on their promises. Yet a rate of return that high is mathematically impossible unless the economy grows much faster than anyone is now expecting.

To explain why, I need to talk about stock returns. The yield on a stock comes from two components: cash that the company pays out in the form of dividends and stock buybacks, and capital gains. Right now, if dividends and buybacks were the whole story, the rate of return on stocks would be only 3 percent.
<more>

<link> http://www.nytimes.com/2005/02/01/opinion/01krugman.html?th



In otherwords, BushCo are creating the "Catch-22" argument and want to keep that argument inside the box. As long as all of the gloom and doom arguments about why Social Security becomes insolvent by 2042, those same arguments have to also apply to privatization. If the arguments for privatization suggest that things will be better to get the returns they are suggesting, then they will in fact be better for the current Social Security program as well.

Shrub can't have it both ways. Social Security is not in crisis and this is just Bushit in it's highest form. The real purpose of all this smoke and mirrors is for private financial institutions to get their hands on a goldmine of social security funding and for corporations to avoid paying their share of the fund. We must stand rock solid and not let these bastards steal the well-being from most American workers while enriching the wealthy few.

[nodictators]

1. Nothing in Bush's Social Security scam adds up

How can taking FICA tax money away from Social Security and putting it in the stock market help solve the supposed Social Security "crisis?"

How can anyone believe the Repub-controlled Social Security Trustees' Report, which has the following mind-bogglers?

Can anyone believe that illegal immigrants will be held constant at 300,000 per year?

Given that in 2001, 2002, and 2003, the annual percentage increases in covered income have been less than the annual percentage increases in the Consumer Price Index, can anyone believe that covered income will go up much faster than inflation, starting now?

Given that period life expectancy for people turning 65 was flat from 1990 through 2003, can anyone believe that life expectancy for people turning 65 in 2080 will be 4 years greater than it is for those turning 65 this year?

[whistle]

2. Lots of speculation, but little shown in the way of facts...

...Bush's mushroom management, keep everyone in the dark and feed us lots of horse-shit!

[Robert Oak]

3. anybody notice only 55 and up are "safe"?

so that means...

us who are getting screwed on careers, screwed on credit cards,
screwed on no pensions will now get screwed on social security.

[ArmHayseed]

4. Nobody's "safe"

One of the proposals 'on the table' is to change the way future COLAs are calculated for SSI benefits, including those over fifty-five.

Nobody's "safe".