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February 28, 2005
The Wall Street Journal Comes Through Once Again
You know, newspapers like the Washington Post would do a *much* better job at informing their readers if they just had somebody summarize and rewrite the previous day's Wall Street Journal stories. Here it is Jackie Calmes who comes through:
WSJ.com - In Bush's 'Ownership Society,' Citizens Would Take More Risk: "No program better exemplifies the longstanding social compact than Social Security: Workers are taxed to pay benefits to current retirees and the disabled, and expect to be helped by future generations. But with fewer workers supporting swelling ranks of retirees, the program by midcentury won't be able to pay full promised benefits. That is the problem Mr. Bush wants to fix. He calls it 'reforming great institutions to serve the needs of our time.'
Yet the centerpiece of his fix -- letting workers divert a third of their 12.4% payroll tax to personal accounts, which they could invest, spend in retirement or pass on to heirs -- won't help Social Security's long-term solvency, the president acknowledges. That, he says, will require separate reductions in future benefits.
His private accounts have another purpose. 'When more people own something, the more they'll have a stake in the future of this country,' he said recently in a speech....
Critics say Mr. Bush's vision is blind to economic risks facing Americans, especially lower-income workers. William Gale, a Brookings Institution economist, dismisses the president's agenda as 'the Dismantling-the-Safety-Net Society.' Some applaud his rhetoric, but say the president's policies... favor the well-off. The poorest workers, exempt from income taxes, can't take advantage of tax breaks for savings. Eugene Steuerle, a Reagan-era Treasury official now at the Urban Institute, titled a recent analysis, 'An Ownership Society, Or A Society For Those Who Already Own?'....
The president's plan for individual accounts is a major departure.... Mr. Bush argues private accounts would allow workers to earn more through investments than they would receive from Social Security, especially after traditional benefits are reduced to make the system sustainable. His plan would limit choices to a small menu of stock and bond mutual funds....
Posted by DeLong at February 28, 2005 08:22 AM
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Comments
Bush's intent is less "Ownership Society" and more "Ownership of Society".
Posted by: djs at February 28, 2005 08:53 AM
The Bush plan would allow workers to earn more from investments after the traditional plan has
been reduced. That is the key statement.
Cut future benefits by 50% and see how much better you do in stocks. -- great.
Posted by: spencer at February 28, 2005 09:07 AM
>>
The poorest workers, exempt from income taxes, can't take advantage of tax breaks for savings.
>>
Indeed, and if Bush was serious about income transfers to the low earners (as David Brooks wants to believe he is), he'd be proposing that we switch to refundable tax credits from tax deductions as the basis of his ownership society.
Posted by: P O'Neill at February 28, 2005 10:12 AM
"the Dismantling-the-Safety-Net Society"?
This pun isn't good enough.
Some alternatives:
1) "the No-Safety-Net Society" (duh)
2) "the Own a Ship Society" ("if you own a boat, you'll stay afloat")
3) "the Owner's Box Society" (refers to Bush's days owning the Rangers, and his current/former cronies)
4) "the Plasma Donorship Society" (can you still sell plasma?)
5) "the Not-so-Great Society"
Anyone else care to play?
Posted by: Adam M at February 28, 2005 10:18 AM
I think the point to be made, over and over, is that the President's plan to make the Social Security fund "solvent" is to reduce benefits. Reduce benefits. Reduce benefits.
Reduce benefits so as to not have to pay back the bonds Social Security bought to lend money to the government. Reduce benefits and not pay back the bonds.
Not pay back the bonds because if the time comes and the bonds must be redeemed, there will be no money for the government to do anything, anything at all, except pay back the debt.
When Krauthammer says, the money is gone, he means it. They don't intend to ever pay it back. They intend to default on the bonds.
So benefits must be reduced.
To make that palatable we offer the possibility that maybe the private accounts will produce enough to make up for the reductions.
So the President's reform is to reduce benefits. The private accounts are an add-on to make it politically acceptable.
Posted by: pragmatic_realist at February 28, 2005 12:47 PM
Adam M: I'll play... What about the "YOYO Society": "You're On Your Own", the Bush administration's answer to everything (except, perhaps, privacy rights)?
Posted by: Melchie Scott at February 28, 2005 02:39 PM
How about calling this what it is;
A TAX INCREASE ON WORKERS.
Posted by: Josiah Bartlett at February 28, 2005 05:19 PM
You forgot the main reason:
Neil Bush has to get his bone, also.
Everyone involved has had a piece of the newly re-distributed pie- now it is Neil's and Wall Street & Company
It's a re-carving of America, with have nots getting notta
more smoke and mirrors - please
Posted by: Dave S at March 1, 2005 10:06 AM
Posted by: at March 14, 2005 10:08 PM