[Paleopsych] Exposing Steve's rhetoric re: Social Security Privatization

Steve Hovland shovland at mindspring.com
Sun Mar 6 03:09:50 UTC 2005

The Government is a drain on the economy.
The Defense Department is part of the Government.
Therefore the Defense Department is a drain on the economy
and should be replaced by a faith-based initiative.

Engaging in a discussion of what to do about
Social Security involves accepting the notion
that there is a crisis that needs to be dealt
with.  I do not accept the notion that there is a

If there are problems with Social Security,
they can be dealt with by minor adjustments
in the base and in the retirement age.

If private accounts are such a wonderful thing then
we should just increase the amount that people
can put into their IRA's.

Steve Hovland

-----Original Message-----
From:	Lynn D. Johnson, Ph.D. [SMTP:ljohnson at solution-consulting.com]
Sent:	Saturday, March 05, 2005 5:14 PM
To:	The new improved paleopsych list
Subject:	[Paleopsych] Exposing Steve's rhetoric re: Social Security	Privatization

Steve, I will try to address your points. Let's not get angry and lose 
IQ points.

Steve Hovland wrote:

>You are forgetting that the Bushies concede that their
>proposal does not solve the actuarial problem.
Cite a source, please. "Bushies" suggests a unified effort, smacks of a 
conspiracy. There are many POVs on the SS issue. There is NO "Proposal" 
but rather a variety of ideas being floated and debated. Bush himself 
says he welcomes proposals. Bush never lies. (I know blood will shoot 
from your eyes when you read that, but it seems to be more and more 
apparent. He says what he means and he means what he says. I have been 
re-evaluating my views on him lately.)


Alan Greenspan: If you're going to move to private accounts, which I 
approve of, I think you have to do it in a cautious, gradual way. All in 
all, I'm glad that if we are going to move in that direction, we're 
going to move slowly and test the waters because I think it's a good 
thing to do over the longer run. And eventually because the 
pay-as-you-go system in my judgment is going to be very difficult to 
manage, we are going to need an alternative."

"I would be very careful about very large increases in debt. But I do 
believe that relatively small increases are not something that would 
concern me. ... I would say over a trillion is large."

First it is important to remember that Social Security faces an $11 
trillion debt if reforms are not made. However, the up-front 
expenditures required to start personal accounts has been estimated at 
about $2 trillion over the next several decades. How to fund the 
transition is a central area of debate that has yet to be determined. 
While borrowing the full amount would constitute a "very large" increase 
in the debt and would be a concern, as Chairman Greenspan has noted, 
there are other alternatives. For example:

    * Sen. Lindsay Graham (R-S.C.) has recommended increasing the
      payroll tax cap from $90,000 to about $150,000, essentially
      financing the transition with higher payments from wealthier workers.
    * The NCPA has suggested asking participating workers to invest an
      extra percent to a percent-and-a-half of their income to help
      finance the personal accounts. This approach, which would reduce
      the amount diverted from the payroll tax, is similar to the
      financing provisions of "Model 3" of the President's 2001
      Commission to Strengthen Social Security.
    * Congressman Paul Ryan (R-Wis.) and others would cut back other
      government spending to free-up money to fund the accounts.

End Quote

>What is your source for saying that in 2018 SS 
>goes into the red?  I don't think the trustees are
>saying that.
Senator Rick Santorum:
When President Roosevelt created Social Security, our nation's 
demographics were considerably different. Life expectancy was much 
shorter--it was lower than the retirement age at which benefits would 
begin to be paid. Thus, workers greatly outnumbered Social Security 
recipients. In 1945, there were 42 workers for every one retiree. In 
1950, the ratio was 17 to 1, today it is 3 to 1, and when today's 
workers retire there will be 2 workers supporting each retiree. Social 
Security is heading for insolvency--the longer we wait to fix the 
system, the more it will cost. Every year we wait costs an additional 
$600 billion.

Last year's annual, bipartisan Social Security Trustees report further 
highlighted the future insolvency of the current Social Security 
program: they project that if no changes are made, in just thirteen 
years the system will begin paying out more in benefits than it is 
taking in as revenue. We owe it to our children and grandchildren to 
provide for their retirement security as they have provided for current 
and previous generations.


Steve, note: 13 years, 5 plus 13 = 2018. In the red. And again, there is 
NOTHING in the trust fund except IOUs. Nothing. That means to redeem the 
IOUs we have to either raise taxes or cut government spending, both, 
and/ or raise the retirement age and cut benefits. All very hard 
choices. Each year the problems get worse.

>The Laffer curve is a joke.  It acts as if money taken
>in taxes is shipped into space.  It is spent, thus
>increasing the size of the economy by increasing
>the velocity of money.
"I don't think that word means what you think it means."
    -- The Princess Bride

You might want to investigate this a little more thoroughly. The Laffer 
curve is base on the pragmatic fact that government efforts to increase 
prosperity are by in large a failure. That is because the real sources 
of prosperity is private business, subject to competition. Taxes are - 
always - a drain on the economy. The higher they are, the lower the 
activity in the private sector. Rhetoric won't change that fact.
See: http://www.pbs.org/wgbh/commandingheights/hitest.html

Huge site, takes a while. You can get the book from your library and 
study it out for yourself. Look at where Britain was before Maggie 
Thatcher downsized government. Economists predicted at the time that by 
2000, Britain's GDP would be lower than Albania's. That is where 
government attempts to create prosperity get you. If you have a good 
counter example, I am interested to see it. Note also the current 
unemployment rates in welfare-state EEU.

For an overall review of the social secutiry problem from a partisan 
view, see
Please note that all the main points are referenced. That means I can 
look up the supporting data and see if the author has been fair in the 
citations. That is vital.

I'd like to see something from you, Steve, in the way of research, and 
less in the way of unsupported statements. I enjoy dialog, but there 
needs to be some facts behind it. Again, if I am wrong, I certainly want 
to know about it.

At this point, I am more and more impressed with George Bush. The war is 
working out much better than I would have thought. Three years ago I 
said the war was about spreading democracy. I was fearful it wouldn't 
happen. I was wrong.

His idea about social security shows vision and commitment to 
leadership, and that means leading people not following them via focus 
groups. I still am very unhappy with his first term domestically.  We 
will see.

>Steve Hovland
>-----Original Message-----
>From:	Lynn D. Johnson, Ph.D. [SMTP:ljohnson at solution-consulting.com]
>Sent:	Wednesday, March 02, 2005 7:26 PM
>To:	The new improved paleopsych list
>Subject:	Re: [Paleopsych] Exposing the Echo Chamber Behind Social Security	Privatization
>This is kind of an odd piece. I don't really understand the level of 
>animus on the topic. It is written in a rather ugly, hateful style, with 
>no genuine content and lots of logical falacies. There is lots of 
>guilt-by-association stuff, which is irrelevant to any logical analysis. 
>There is name-calling and labeling, which are classic cognitive errors. 
>Us-versus-them, and we are righteous and they are evil. All heat, no 
>light. What is your intention in publishing it?
>I actually don't see that there is any reasonable alternative to 
>privitizing, if we get beyond the logical  errors. The facts are known. 
>By 2018 the system goes into the red. There will be three workers 
>supporting each retired drone (I being one of them, presumably).
>Usual alternatives:
>    1. Raise taxes: bad for the economy; the Laffer curve is not a joke 
>(hah! I made that up). Three workers cannot support one drone, even 
>someone like me who is so very deserving. Medicare and SS will consume 
>almost all of the federal budget.
>    2. Raise the retirement age: the most reasonable alternative, but 
>least palatable to the public. In Europe the trend is to retire in the 
>50s. That means crushing taxes, which is why the European economy is in 
>such trouble. Look at the unemployment figures.
>    3. Inflate the currency - unacceptable.
>    4. Import more and more foreign workers to compensate for the 
>plunging population rates. The only countries in the world that are 
>above shrinkage are third world. We see what has happened in Europe when 
>we import workers who don't have our best interests at heart.
>    5. Michael's solution????
>Facts: There is NO MONEY in the trust account, just IOUs. To pay off the 
>so-called trust fund, we must raid other government programs and or 
>raise taxes and cripple the economy. This has been known since the late 
>1980s and Republicans as well as Democrats conspired to spend the money 
>and put IOUs into the treasury. What should have happened? Well, I 
>suppose buying commodities like gold, silver, copper, and so on would 
>have at least preserved the principal. But instead the money is gone, 
>spent on pork in both Red and Blue states.
>    The baby boomers hit retirement age in 3 years and following.
>    The country cannot support social programs, defense, and drones all 
>at the same time. What will be done? Europe cut its defense, and at this 
>point, European military is oxymoronic. The taxes are a huge drain, and 
>anti-capitalist laws make it suicide to try to start a company.
>    Social Security is not an insurance company. That was established at 
>the beginning, in a supreme court decision. Congress can change it at 
>any time, in any way.
>    Only by allowing people to OWN their retirement, only by creating an 
>ownership society where if I die at 64, I can pass my money on to my 
>children, can we get out of the corner we are in.
>    I'd like to see a coherent, data-based analysis that leads to any 
>other solution.
>Michael Christopher wrote:
>>Exposing the Echo Chamber Behind Social Security
>>The Bush administration ventriloquists are out in full
>>force these days, breathlessly hyping "Personal
>>Retirement Accounts" as a way to save Social Security
>>by destroying it. For the average voter, getting a
>>handle on what the Bush administration is proposing to
>>do to Social Security is quite a challenge. The dozens
>>of bobbing heads and clicking fingers, holding forth
>>on cable news programming and the Internet is enough
>>to make anyone's head spin. Is that spokesman from the
>>Alliance for Worker Retirement Security speaking as an
>>independent economics expert, a civic-minded
>>individual or as a paid shill from a corporate-funded
>>front group?
>>If you're having trouble keeping track of all the
>>players, our very own SourceWatch can help. It will
>>tell you that the Alliance is sponsored by the
>>National Association of Manufacturers, the U.S.
>>Chamber of Commerce, and the Business Roundtable,
>>among other pro-business groups. It shares its
>>executive director Derrick Max and a number of its
>>members with the Coalition for the Modernization and
>>Protection of America's Social Security (COMPASS). In
>>fact, the Alliance and COMPASS both count as members
>>of the United Seniors Association, a corporate-funded
>>lobbying group that recently changed its name to
>>The New York Times reported Monday that USANext is
>>launching a campaign "to spend as much as $10 million
>>on commercials and other tactics assailing AARP, the
>>powerhouse lobby opposing [Social Security] private
>>investment accounts." To oversee the operation,
>>USANext hired Chris LaCivita, recently of the 527
>>groups Swift Boat Veterans for Truth and Progress for
>>America and an employee of the DCI Group, a firm
>>specializing in astroturf with close ties to the Bush
>>White House. True to its word USANext, ran an ad on
>>the American Spectator that equates the AARP to the
>>"spit-on-the-troops/gay marriage lobby," as
>>TalkingPointsMemo blogger Josh Marshall has been
>>Progress for America, after raising $38 million last
>>year to support Bush's reelection, has also jumped in
>>to the Social Security privatization game. PFA "has
>>estimated it will spend $20 million promoting private
>>accounts. It has run a series of ads on cable
>>television, including a spot that invokes the legacy
>>of Democratic President Franklin Roosevelt, who signed
>>the legislation creating the retirement system," the
>>Houston Chronicle reported.
>>PFA told the Chronicle it will be asking past donors
>>for money to fund their new campaign. The head of the
>>prominent investment firm Charles Schwab contributed
>>$50,000 to the group's political arm in 2004. Schwab
>>gave $75,000 more to the Club for Growth, which is
>>also lobbying for Social Security privatization and
>>expects to spend $10 million lobbying to promote
>>private accounts. Peter J. Ferrara, an alumnus of the
>>Cato Institute, Heritage Foundation and National
>>Center for Policy Analysis, is heading the Club's
>>Social Security Project. 
>>"The emergence of the center-right phalanx backing the
>>Social Security proposal is a major victory for the
>>Cato Institute, a prominent libertarian group," The
>>Washington Post's Thomas Edsall wrote recently. "In
>>the late 1970s and early 1980s, Cato was almost alone
>>in its willingness to challenge the legitimacy of the
>>existing Social Security system, a politically
>>sacrosanct retirement program. Recognizing the
>>wariness of other conservatives to tackle Social
>>Security, Cato in 1983 published an article calling
>>for privatization of the system. The article argued
>>that companies that stand to profit from privatization
>>- 'the banks, insurance companies and other
>>institutions that will gain' - had to be brought into
>>alliance. Second, the article called for initiation of
>>'guerrilla warfare against both the current Social
>>Security system and the coalition that supports it.'" 
>>Clearly, the "guerrilla warfare" has begun. And while
>>it may seem like we're playing a GOP version of Six
>>Degrees of Kevin Bacon, the stakes are high. The
>>foundations of the U.S. system to ensure that average
>>workers and their families are not left penniless, out
>>in the cold is under serious attack. At SourceWatch
>>we're tracking these innocent-enough sounding groups
>>and what they are doing. And the best part is, you can
>>help. SourceWatch is open to online citizens to add or
>>edit any article in our collaborative database of
>>people, groups and ideas shaping the public agenda. 
>>The uncovering of the GOP plant Jeff Gannon (aka James
>>Guckert) in the White House press room was the work of
>>online citizen journalists, using their web research
>>skills to expose the fake reporter and the White
>>House's failure to explain truthfully how he got to
>>ask the President a question. We do the same thing at
>>SourceWatch, documenting the hidden connections
>>between corporate trade associations, astroturf
>>groups, and the White House. 
>>Want to cover the newly minted website Generations
>>Together? Or find out what impact Women for a Social
>>Security Choice is having? How would you like to dig
>>in and discover the common elements shared by Alliance
>>for Retirement Prosperity and FreedomWorks? 
>>So far, we've catalogued over two dozen articles on
>>individuals and groups that are promoting Bush's
>>Social Security privatization plan. There's plenty of
>>groups and people to go around. To get involved, visit
>>SourceWatch's "Welcome newcomers" page. On it you'll
>>find tips for using a Wiki (SourceWatch runs on Wiki
>>software), guidelines for writing SourceWatch articles
>>and for research using the Web, plus advise from
>>experienced SourceWatchers on how to research front
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