Social Seurity Reform: It's on now!

Looks like the Democrats will be making their stand on Social Security.

This is good, we have them on the defensive, they are defending the status quo. Big talk from the donks, let's see if they can back it up.

Personally, I like our odds.

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  • The illogic of Social Security reform opponents:

    I've started using the following arguments against reform opponents.

    To those opposed to Social Security reform, please consider the following:

    The current Social Security setup does have survivor death benefits. This could be addressed by adding an insurance/annuity-like component to Personal Accounts. I make the assumption that Personal Accounts will be well diversified investments like an S&P 500 Index Mutual Fund. This is what reformists, like me, have been proposing.

    I was hoping you could help me understand an inconsistency in the logic implied by reform opponents like yourself.

    As Social Security is currently structured, individuals must first be employed. Secondly, employee contributions are matched by the employer. These two things are prerequisites for the continual funding of the program. If I were a proponent of Social Security in its current format, I think that I would be a strong proponent of a vibrant and growing economy that allows for the perpetual contributions; from employees and employers.

    You can’t have Social Security without economic growth. No employers, means no employees, means no contributions, means no Social Security funds over the long-term. The Government just can’t tax non-existent assets and profits to meet its obligations. Assets and profits are a prerequisite of Social Security. With me so far?

    Now, here’s the kicker. If you assume that the current system requires a growing economy to sustain itself, why would you not translate that same assumption to the Personal Account structure of retirement funding?

    Admittedly, there are no guarantees either way. That’s the very definition of a risk; no guarantees. Both structures involve risk. And BOTH sides of the issue (pro/con reform) assume a long term growing economy with occasional set backs.

    I planted several Silver Maples in my back yard 15 years ago. The trees were barely 3 feet tall when I planted them. I did my research on what trees would do best considering soil and weather conditions. I almost went with Weeping Willows, but was advised against them. They grow very quickly, but according to the garden store owner, were ‘stringy’ and disease prone. My Maples have survived severe winters, summer droughts and insect infestation. But through it all, most of them have managed to survive; over the long term. They’re now about 40 feet tall. Long-term investing involves a similar patience and risk taking.

    By Blogger Porkopolis, at 6:22 PM  

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