I'm inclined to think the shoddiness is the result of the contempt they have developed for the American public and media. They know there is a critical mass of ignorance and apathy that makes it possible to avoid presenting a coherent, thought-out plan.

As long as the press corps sucks it all up without spewing it back out in disgust, why *shouldn't* the Bushies treat 'em with contempt?

"Why Oh Why Are We Ruled by These Liars" and "Why Oh Why Can't We Have a Better Press Corps?" are reciprocal threads.

Plan Bush for SS needs the Missouri treatment. Mr Bush, prove that your SS are not as bad as your Prescription Drug numbers. Show us the money. or You won't show us the numbers? What are you hiding Mr Bush?

It may be an exaggeration to say that you get a return of 2% right now. People paying in have no idea how much they'll get back far in the future. The amount will depend on unknown economic conditions in the far future and unknown Congressional actions. The return may ultimately turn out to be zero or even negative.

On the other hand, the uncertainly of the normal benefit makes the voluntary account all the more attractive, despite a 3% offset.

Let's think about this. Let's think of what we know.

We've seen that people who are not qualified to be giving advice as an expert on a particular area giving such advice. Take Karl Rove and the steel tariffs, for instance. Maybe I've missed it, but he doesn't have a PhD in economics, unlike, say, Gregory Mankiw. For all we know, this memo could have been written by someone who isn't an expert.

We also know that this administration regularly lies about its policies. Look no further than this past week's announcement that the Medicare drug bill would now cost at least $720 billion, if not $1.2 trillion. It's not fair to blame them for being off by a little--$410 billion versus $400 billion, say--but these aren't minor errors. Unless they have truly incompetent people working on this stuff, they willfully bullshitted the press, Congress, and the public. It's very possible that these guys decided to try lying once again.

It could be either.

David, you do realize that the same thing applies to personal accounts expect that you know you'll have to pay it back at a 3% rate? Uncertainity exists much more there than in the system as a whole.

Bob Greenstein and his staff at the Center on Budget and Policy Priorities (CBPP) have done a very good job of analyzing the Administration's Social Security private accounts proposal. Plenty of separate papers analyzing each aspect. They are analyzing the budget in the same manner. Again, good work.

CBPP
http://www.cbpp.org/

Private accounts transition costs are often lost in the discussions. CBPP details their estimates. Big dollars, well into the $ trillions.

The transition costs and future reduced benefits in the existing program will likely derail the Bush proposal more than any other considerations. IF anything derails it...

AN OVERVIEW OF ISSUES RAISED BY THE ADMINISTRATION'S SOCIAL SECURITY PLAN
Revised February 7, 2004
http://www.cbpp.org/2-2-05socsec4.htm

* Look at the graph.

"The additional debt resulting from the President’s proposal would continue to rise as a share of the overall economy, reaching more than 25 percent of GDP in about 40 years and remaining at or above that level for the entire 75-year projection period."

Are we crazy?

Thanks for posting the analysis.

But doesn't Bush just listen to his gut?? No analysis, pure gut. Isn't that what they say?

But maybe 'they' heard him wrong, because of the straw in his teeth, maybe he does have analysts but what they actually say is: "ya ought'a Gut the environment"...."ya ought'a Gut Iraq"..."ya ought'a Gut the poor"..."ya ought'a Gut Social Security".

It got a bit misconstrued by the press in the translation. But that is the analysis...then the marketing plan begins for us simple folk.

George Will alert (in the current Newsweek, which headlines retirement issues):

Will ends his defense of Bush's plan (under the title "Harry Reid's 'Roulette'" with an outright falsehood: "Reid participates in the [federal employee's Thrift Savings] plan, but opposes allowing all Americans the comparable opportunity that Bush is proposing.

Does Will really maintain that Reid (and presumably all those benighted Democrats, etc.) are opposed to people participating in an IRA, 401(k) or 403(b) or 457 plan? That, after all, is what Thrift Savings seems to be: a voluntary plan that withholds pre-tax dollars and puts it in one of several funds. I have a plan just like it a the University of California...though with more options.

No one says we should abolish these, most certainly not Reid. Will knows this, and I'm fairly confident that he knows the difference between voluntary tax-advantaged retirement savings and Social Security, a pay-as-you-go social insurance program.

Ergo: Will is a liar.

PQuincy,

Write a letter. Because I'm too G**damned lazy.

A friend's brother-in-law lives a few houses down the street from George Will. We all hung out together on the ski slopes when we weren't working in Germany. A straightshooter (West Pointer and all that) who could ski ok, but couldn't handle the black slopes. Good guy back then; hope he hasn't been corrupted.

I'll going to call him tomorrow. And raise total hell.

Might be the last time we ever talk.

There is just no end to the dishonesty.

Remember what John DeIulio said about these bananabrains when he took over the Office of Faith-Based Initiatives?

They are Mayberry Machivellians, i.e., rubes with paranoid and intricate political schemes always boiling away. Now that Karl Rove is officially in charge of economic policy, look for things to get worse.

Jon K put his finger on it: this is all "faith based". I suspect at some level and in some offices the White House understands that their numbers just don't run, they just don't care anymore. Their entire strategy is to ramp up public fear to the point that it will frighten Democrats to buckle and by all accounts it is not working. There is no 9/11 moment to fall back on, the American people at no point signed on to a War on Social Security, and absent "crisis" will not move in sufficient numbers.

Republicans hated Social Security in 1936 (Landon) they hated it in 1964 (Goldwater) they hated it in 1978 (Shrub) they hate it in 2005 (grown up Bush). It is truly an Article of Faith, and I say that with the faintest of irony. There is an wave of panic surging through the Right, a dawning understanding that Social Security is going to be a creditor and not a pauper in the future. That wave is going to wash away much of the foundation of the modern Repbulican Party, in a relative blink of an eye Cato and Heritage will be transformed from respected think tanks to hysterical doomsayers.

We are seeing the first signs of that. I suspect many privatizers first impulse was to fall back on the numbers of the Social Security Reports, only to find to their horror that after page 17 (2004 Report: Overview) there were only shifting sands. Instead of a system in crisis they were faced with defending 1.8% productivity growth for 2005 (Intermediate Cost) to sustain their predictions for 2018 and 2042.

They still want to kill Social Security, yet every number that gets put on the table weakens their case. They are thrashing, and like any dying animal are dangerous, but we just need to keep our cool and maintain our distance.

Another funny thing is Bush is spending money on propaganda because "his message ins't getting to the people". In his race to turn the US into a ginat Alabama, how stupid does he have to be to realize tha maybe his message IS getting to the people? He has the press regurgitating his lies. He has shill reporters. He has paid talkers, maybe even Limbaugh or Hannity, to spout the party line.

And still the people aren't getting his message? Bush would do weel to look to his buddy Putin and see what huge cuts in state pensions has done in Moscow. Putin's message isn't getting out either becuase they are taking to the streets.

This post is almost certainly dead by now, but what the hey. Of course Mr. Furman's analysis is on target - but let me say, as a certified member of the shrill faction, that i don't read as much into this particular distortion as some others. The formulation, "Is it sufficient to have the risk-free tier of retirement security replace only 8 percent of prior wages?", is misleading, too: the risk that the private accounts would come up completely empty is essentially zero, and if it ever came to pass it would mean that the economy was in such dire straits that regular SS benefits would be in jeopardy, too.

A bigger concern for me, I think, is that i suspect the break-even rate of return of 3% above inflation, after fees & expenses, is going to be a lot harder to reach than most analysts now seem to think. I've read comments by several of the privatizers on the SS Reform Commission that seem to indicate that the actuaries are estimating 4.5% returns on the basis of past performance. They say they calculated 35-year rates of return over the past several decades on some broad-based stock index (I think the S&P 500?) without adjusting for inflation, then subtracted an estimated future inflation rate of 3% to come up with average inflation-adjusted returns of something like 7% or more - then they factored in some portion of investment in bonds & said that 4.5% would be a conservative, low-end rate of return. But shouldn't they have calculated real rates of return on stocks, using the actual rates of inflation - which for much of the period they were looking at were well above 3%? I saw some data that another CBPP publication linked to, assembled by a professor at Wharton, that show real returns to the S&P since 1871, and those seem to show that the average 35-year real rate of return on stocks alone would be just under 4%, and that in something like 30% of the 35-year cohorts since 1900 the returns would have been less than 3.3%. Now since we'd be starting this misadventure at historically high stock prices to begin with, and future growth projections are for somewhat slower growth than in decades past, and since current policies are driving us toward a devaluded dollar & ultimately higher inflation, doesn't it seem like barely a 50-50 proposition that even typical returns for any cohort of retirees will do better than break-even?