Re: Greenspan on Social Security
Is this, perhaps, the old "guns vs butter" revisited? Is it possible that 2/25 will become a date to remember along with 9/11. What if the Iraq war was not about "oil" but about protecting the US dollar as the reserve currency by which oil is bought and trade valued? How much room is there in the US budget once the entitlements are stripped out? Remember that towards the end Rome was forced to give soldiers land so that they could have incomes that would finance their roll in the military. I wonder if the National Guard might not be an interesting variance in today's world? And Rome didn't think that debasing their currency in the world market was a good thing for exports in a free trade world. Funny thing about those econometric models thoughts? tom abeles dmschanoes wrote: All you need to know about Greenspan is that he's the guy who wrote a letter of recommendation to the Federal Home Loan Banking Board (remember them? regulated the S&Ls pre Reconstruction Finance Fiasco) to get Charles Keating the charter for Lincoln Savings and Loan. Guy's got the integrity and spine of a tapeworm. dms - Original Message - From: "Michael Perelman" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, February 25, 2004 9:09 PM Subject: [PEN-L] Greenspan on Social Security Is Greenspan working for the Dems.? Make the tax cuts permanent, cut social security to make the economy grow faster. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: Greenspan on Social Security
> Get a grip Jurriaan, not everything has to do with whoring. More than you think anyway. J.
Re: Greenspan on Social Security
Get a grip Jurriaan, not everything has to do with whoring. Joanna Jurriaan Bendien wrote: Seems like it. Greenspan said the USA can't afford the retirement benefits promised to baby boomers and urged Congress to trim them. This is a "cohort" theory of perpetuating capitalism, according to which "what you deserve" depends on your age, and if by a ceryain age you haven't got the cash together, then you don't deserve social assistance. With this new allocation principle, you can of course rip off a whole bunch of new people. If you have to drastically cut expenditures, then a whole new ideology has to be developed to justify "who deserves what". In 2002, the US benefit figures were as follows: Old-age/survivors/disability/health insurance benefit $710 billion Government unemployment insurance benefit $53 billion Veterans benefits $30 billion Family assistance benefit $20 billion That's a total of $813 billion, or about 8% of the total personal income received by all Americans (only about half of that total personal income is wages and salaries). You cannot actually cut those benefits very much, so the revenue gain is not actually very great, but the advantage is, that many of those people are in a weaker position, and so you can attack them, without them being able to do very much about it. But it doesn't solve much as regards balancing government budgets. What they should do first of all, is drastically rationalise and reduce military spending. I think Greenspan possibly argues that many baby-boomer retirees are wealthy anyhow, and thus not deserving social assistance to which they are entitled, but a closer look at the facts would show this has very limited validity. Basically the bourgeoisie is telling the working class to go whoring, instead of receive social assistance benefits for which they were previously taxed by their own elected government. But if you are a pensioner, then you are unlikely to want to go whoring, if anything the probability is greater that you'd be buying sexual services. The real question then is, why should the bourgeois elite get it for free ? Greenspan's new "deregulation" argument is a bit like depositing money in a bank, and then later the bank manager says "instead of paying you interest on your deposit, I am deducting interest from your deposit, and if you protest, you won't get your deposit back at all". Jurriaan
Re: Greenspan on Social Security
Seems like it. Greenspan said the USA can't afford the retirement benefits promised to baby boomers and urged Congress to trim them. This is a "cohort" theory of perpetuating capitalism, according to which "what you deserve" depends on your age, and if by a ceryain age you haven't got the cash together, then you don't deserve social assistance. With this new allocation principle, you can of course rip off a whole bunch of new people. If you have to drastically cut expenditures, then a whole new ideology has to be developed to justify "who deserves what". In 2002, the US benefit figures were as follows: Old-age/survivors/disability/health insurance benefit $710 billion Government unemployment insurance benefit $53 billion Veterans benefits $30 billion Family assistance benefit $20 billion That's a total of $813 billion, or about 8% of the total personal income received by all Americans (only about half of that total personal income is wages and salaries). You cannot actually cut those benefits very much, so the revenue gain is not actually very great, but the advantage is, that many of those people are in a weaker position, and so you can attack them, without them being able to do very much about it. But it doesn't solve much as regards balancing government budgets. What they should do first of all, is drastically rationalise and reduce military spending. I think Greenspan possibly argues that many baby-boomer retirees are wealthy anyhow, and thus not deserving social assistance to which they are entitled, but a closer look at the facts would show this has very limited validity. Basically the bourgeoisie is telling the working class to go whoring, instead of receive social assistance benefits for which they were previously taxed by their own elected government. But if you are a pensioner, then you are unlikely to want to go whoring, if anything the probability is greater that you'd be buying sexual services. The real question then is, why should the bourgeois elite get it for free ? Greenspan's new "deregulation" argument is a bit like depositing money in a bank, and then later the bank manager says "instead of paying you interest on your deposit, I am deducting interest from your deposit, and if you protest, you won't get your deposit back at all". Jurriaan
Re: Greenspan on Social Security
All you need to know about Greenspan is that he's the guy who wrote a letter of recommendation to the Federal Home Loan Banking Board (remember them? regulated the S&Ls pre Reconstruction Finance Fiasco) to get Charles Keating the charter for Lincoln Savings and Loan. Guy's got the integrity and spine of a tapeworm. dms - Original Message - From: "Michael Perelman" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, February 25, 2004 9:09 PM Subject: [PEN-L] Greenspan on Social Security > Is Greenspan working for the Dems.? Make the tax cuts permanent, cut social security > to make the economy grow faster. > -- > Michael Perelman > Economics Department > California State University > Chico, CA 95929 > > Tel. 530-898-5321 > E-Mail michael at ecst.csuchico.edu >
Greenspan on Social Security
Is Greenspan working for the Dems.? Make the tax cuts permanent, cut social security to make the economy grow faster. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: Greenspan on Social Security
[EMAIL PROTECTED] wrote: >Doug, perhaps you can explain to me Greenspan's thought >process. If Social Security is privatized in the way he >was talking about this means a great deal of more money >flowing in to the stock market and, I believe he suggests, >an increase in the rate of saving. But if, as you argue, >the stock market is not about financing new issues but >merely bidding up the price of existing paper, this means >that the 'saving' would not generate any real output when >the time comes to pay pensions. Moreover, if as post Keynesian >thought has it, investment creates savings (rather than the >new classical savings creates investment) would not the >attempt to increase savings reduce investment and further >reduce the ability of the economy to produce pensions out >of future realized output? Well, I can't speak for the mighty Greenspan, but I saw a bit more skepticism about privatization in his remarks than others did. Fed staff economists have been publishing work showing that 401(k)'s and other individual retirement provision haven't resulted in any new saving, but only a reallocation. (See the abstract below, for example.) Cato hacks may be able to finesse these issues, but the Fed is a bit more serious. I see Greenspan's skepticism in passages like these: >Finally, if individuals did invest a portion of their accounts in equities >and other private securities, thereby receiving higher rates of return and >enhancing their social security retirement income, what would be the effect >on non-social security investments? As I have argued elsewhere, unless >national saving increases, shifting social security trust funds to private >securities, while likely increasing income in the social security system, >will, to a first approximation, reduce non social-security retirement income >to an offsetting degree. Without an increase in the savings flow, private >pension and insurance funds, among other holders of private securities, >presumably would be induced to sell higher-yielding stocks and private bonds >to the social security retirement funds in exchange for lower-yielding U.S. >Treasuries. This could translate into higher premiums for life insurance, >and lower returns on other defined-contribution retirement plans. This would >not be an improvement to our overall retirement system. > >Furthermore, the potential consequences of moving social security to a >system that features private retirement accounts need to be considered >carefully. Any move toward privatization will confront the problem of how to >finance previously promised benefits. That would presumably involve making >the implicit accrued unfunded liability of the current social security >system to beneficiaries explicit. For example, participants at the time of >privatization could each receive a non-marketable certificate that confirmed >irrevocably the obligations of the U.S. Government to pay a real annuity at >retirement, indexed to changes in the cost of living. The amount of that >annuity would reflect the benefits accrued through the date of privatization. > >Under our current system, social security beneficiaries technically do not >have an irrevocable claim to current levels of promised future benefits >because legislative actions can lower future benefits. In contrast, the >explicit liability of federal government debt to the public is essentially >irrevocable. A critical consideration for the privatization of social >security is how financial markets are factoring in the implicit unfunded >liability of the current system in setting long-term interest rates. In other words, we can always screw workers, but not bondholders! But you're right that more money flowing into stocks wouldn't produce the investment necessary to pay off privatized pension obligations over time. Since the privatizers accept the 1.4% GDP growth projection for the next 75 years, and assume 7-10% real annual stock returns, they are implictly endorsing Ponzi valuations. Whether S precedes I or vice versa seems more a theological dispute than anything resolvable using social science techniques; I'd rather see them as two sides of the same process of foregoing consumption. No matter how you slice it, though, U.S. savings and investment levels are among the lowest in the OECD. And aside from quantitative issues, I think an ever-larger share of U.S. investment has been devoted to high-return, quick-payback projects. (Similarly, R&D has shifted away from basic research into product development.) These characteristics of real I have helped fuel the bull market. But you have to wonder about the long-term effects of this, don't you? Doug > "Debt, Taxes, and the Effects of 401(k) Plans on Household > Wealth Accumulation" > > BY: ERIC M. ENGEN >Federal Reserve Board > WILLIAM G. GALE >The Brookings Institution > > > SSRN ELECTRONIC DOCUMENT DELIVERY: > http://papers.ssrn.com/paper.qry?abstrac
Greenspan on Social Security
Doug, perhaps you can explain to me Greenspan's thought process. If Social Security is privatized in the way he was talking about this means a great deal of more money flowing in to the stock market and, I believe he suggests, an increase in the rate of saving. But if, as you argue, the stock market is not about financing new issues but merely bidding up the price of existing paper, this means that the 'saving' would not generate any real output when the time comes to pay pensions. Moreover, if as post Keynesian thought has it, investment creates savings (rather than the new classical savings creates investment) would not the attempt to increase savings reduce investment and further reduce the ability of the economy to produce pensions out of future realized output? Or am I confused? Paul Phillips, Economics, University of Manitoba
Re: Greenspan on Social Security
Paul Phillips wrote, >Doug, perhaps you can explain to me Greenspan's thought >process. My entry in the explain-Greenspan's-thought-process sweepstakes: Ponzi on steroids. Regards, Tom Walker ^^^ knoW Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
