Vast Borrowing Seen in Altering Social Security (NYT)

A few years ago, SS was the 'third rail' of American politics, instant death for trespassers.


http://www.nytimes.com/2004/11/28/politics/28secure.html?hp&ex=1101704400&en=cd5a720c6da1c654&ei=5094&partner=homepage

November 28, 2004

Vast Borrowing Seen in Altering Social Security
By RICHARD W. STEVENSON

WASHINGTON, Nov. 27 - The White House and Republicans in Congress are all but certain to embrace large-scale government borrowing to help finance President Bush's plan to create personal investment accounts in Social Security, according to administration officials, members of Congress and independent analysts.

The White House says it has made no decisions about how to pay for establishing the accounts, and among Republicans on Capitol Hill there are divergent opinions about how much borrowing would be prudent at a time when the government is running large budget deficits. Many Democrats say that the costs associated with setting up personal accounts just make Social Security's financial problems worse, and that the United States can scarcely afford to add to its rapidly growing national debt.

But proponents of Mr. Bush's effort to make investment accounts the centerpiece of an overhaul of the retirement system said there were no realistic alternatives to some increases in borrowing, a requirement the White House is beginning to acknowledge.

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Borrowing by the government could be necessary to establish the personal accounts because of the way Social Security pays for benefits. Under the current system, the payroll tax levied on workers goes to benefits for people who are already retired. Personal accounts would be paid for out of the same pool of money; they would allow workers to divert a portion of their payroll taxes into accounts invested in mutual funds or other investments.

The money going into the accounts would therefore no longer be available to pay benefits to current retirees. The shortfall would have to be made up somehow to preserve benefits for people who are already retired during the transition from one system to the other, and by nearly all estimates there is no way to make it up without relying at least in part on government borrowing.

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more...

What an insanely stupid piece of shit this all is. :grr:

They'd better goddam well pay back any such loan solely from the funds of those who choose these insane, asinine "personal accounts"! Let them bear the financial burden of this jackassed folly!

If it weren't for how many people will be hurt in the process, I would enjoy watching this.

I read that they did, and the rest of us have our reality.

fucking it up? leave stuff alone.......damn

there is such a thing as living within your means you know.

People don't need to divert money from the SS program. If you put even $500/mo into an IRA for 50 years, you would have more of an income stream than SS will pay you. (Note, I am guessing on the $500)