Posted on 05/02/2005 1:15:53 PM PDT by CHARLITE
In an effort to convince us that Bush's plan for Personal Retirement Accounts will destroy Social Security, Paul Krugman has lost it. Completely lost it. To call him illogical is not sufficient. The man has gone stark raving mad. Like the rest of the MSM, this socialist tries to make the case that by giving a slight advantage to poor people in computing that portion of benefits still conferred on us under the old Social Security law, Bush will eventually eliminate Social Security. Krugman opines,
"If the Bush scheme goes through, the same thing will eventually happen to Social Security. As Mr. Furman points out, the Bush plan wouldn't just cut benefits. Workers would be encouraged to divert a large fraction of their payroll taxes into private accounts - but this would in effect amount to borrowing against their future benefits, which would be reduced accordingly.
As a result, Social Security as we know it would be phased out for the middle class.” For millions of workers," Mr. Furman writes, "the amount of the monthly Social Security check would be at or near zero."
What Krugman is so obvious about in his deception here is the fact that he never mentions what PRA's would generate in wealth (nest egg) or in monthly checks to a middle class worker. If the participant chooses PRAs over the Old Social Security system, Paul's nightmare scenario for a middle class worker making $36,000 a year average would end up after 50 years of work with a $1,416,382 nest egg and monthly interest of $7,087 in 2005 dollars. See our SS # 128. [http://dickmcdonald.blogspot.com/2005_05_01_dickmcdonald_archive.html#111500741585365328 Under those conditions, Paul's right. The old Social Security system would pay the worker nothing. He has enough. The worker made the right choice. He chose PRAs.
Krugman has decided, like he and his leftist deceivers often do, to take one element of an issue and pretend the other doesn't exist. Here he opines on what will become of the Old Social Security, and in the process completely ignores the fact that PRAs will be part of the Social Security system. Paul ends his screed quite emotionally:
"No, this is about ideology: Mr. Bush comes to bury Social Security, not to save it. His goal is to turn F.D.R.'s most durable achievement into an unpopular welfare program, so some future president will be able to attack it with tall tales about Social Security queens driving Cadillacs."
There is no clearer proof about the lack of truth in anything written by this man, than this conclusion. We have a President daring to make the poor rich and Paul Krugman opting to keep the poor, poor by touting the old Ponzi scheme of the 20th Century. If Paul prevails, there will be a lot less Cadillacs on the road. And by the way the startling effect of including inflation in my computations (like he did in his) would result after 50 working years in a nest egg of $4,397,916 and monthly interest of $21,990 for someone making $36,000 a year. Read it and weep, you wimp.
We have a muscular foreign policy now, why not have a muscular economic policy?
Go to our http://www.thenewsocialsecurity.com website and learn more about PRAs. We need to get the word out.
About the Writer: Dick McDonald is a businessman, ex-CPA, and writer living in Los Angeles, California. His blog may be viewed at, http://dickmcdonald.blogspot.com/
Comments: ramcdonald@aol.com
I wish it were true... but it isn't.
-"No, this is about ideology: Mr. Bush comes to bury Social Security, not to save it."-
Not that it's being buried, but so what? Social Security had its day, and it doesn't matter how many bandaids you slap on it, it's for the trash heap (maybe because the left used the population scare all those years ago to prevent Mr. and Mrs. America from reproducing enough kids and subsequent taxpayers to maintain such a program?).
I gotta say one thing for O'Reilly. When he & this turd, Krugman were interviewed together by Russert, Bill torn him a new one. I thought Krugman was going to get up & leave but he stayed. Billy set the stage for what all conservatives should be doing to these commies.
Good post.
I've talked to quite a few people lately who think that Social Security is God's gift to Americans. They simply refuse to believe that there could EVER!!! be anything better than SS. I have to stress to them the fact that SS is a GOVERNMENT!! program. It is not much better than putting your money in tin cans and burying them in the backyard. And believe it or not, many of these SS fanatics have private accounts in the form of iras or thrift savings plans. Republicans have to do a much better job of selling reform or it will fail. The fact that a mentally unstable, economics quack like Krugman is able to lie about SS reform with apparent impunity shows the corruption and hypocrisy of the leftist fringe. You better believe that virtually all the lefties in Big Media now praising SS have their own private accounts.
Terrific point, driftless. Thanks for this excellent comment. It is very true.
Char :)
Did I miss anything?
Congressman Billybob
Latest column, " 'L.A. Chappaquiddick,' Starring Hillary Clinton."
''Just about what one would expect from Princeton.''
Tch, tch.
:^)
you know what this reminds me of, all the geeks who give YOU financial advice but haven't got two dimes to rub together, they are driving the 1985 Chevy Blazer OK
it is a good rule not to take financial advice from anyone unless they too are financially successful......
Krugman sounds like a guy who must not have a penny in his 401K or even have a 401K, maybe not even a penny in his savings account, he probably is in hock up to his eyeballs, living the high life in NY, and he's giving the world advice on finances and economics.....or how else besides being a fraud or liar, could he forget about those accruing PRA's
what really gets my goat about Social Security and the Canadian equivalent is that if you die, so do the benefits, in other words, Social Security is a welfare program to begin with, not a pension program......
Unless, as is distinctly possible in Krugboy's case, one happens to be a total wastrel.
I should **dearly** love to go up against this quasi-Marxist loony-tune ''economist'' in a straight-up head-to-head investing/trading contest, say of 1 or 2 years' duration, and pull down his pants (metaphorically speaking) in public for all the world to see.
Thanks for the reminder, Backhoe! I was just about to post the link to this, when I saw that you're way ahead of me. Very important for FReepers to see your collection of absurdities by Paul Krugman, who should be hanging his head in total disgrace by now, over the blatant lies and misrepresentations he has perpetrated for so long.
Basically, he's not an economist. He is a political sabateur!
Appreciate the kind words- Krugman was tolerable ( though IMO only marginally competent ) as an economic commentator- when he branched into politics, what little "cents" he had fled him.
Touché!!
Char :)
Social Security is a system that has sustained numerous persons over the past 60 years. Unfortunately, Social Security has a projected deficit that has varying ranges depending upon the growth of the economy, interest rates, and the expected tax revenues in the future. Depending on the time frame over which one looks (75 years v. Bush's infinity)it is evident that the present value of those short falls produce two entirely different numbers. The 75 year range less than the infinity range. So, if one were to look at the infinity number, then it would appear Social Secutiy must surely be overhauled and done away with. If one were to look at the 75 year value, then it is evident that slight modifications are needed in order to prevent massive benefit cuts and increases in payroll taxes. Bush's plan looks at the latter - infinite number. Therefore, it seems apparent that he intends to do away with Social Security. Ofcourse, any projected deficit no matter the time frame is an estimate which uses estimated numbers with ranges. There is not one number that is known for certain in these estimates. Then only certain thing is death and taxes; and if Bush wants to prevent death for the millions of people that depend upon social security for their retirement income, then he better increase taxes. He could educate people on how to invest wisely in the stock market but that would take time. Time is not something the majority of people have when they work two jobs and are raising a family. Additionally, the personal savings account would not decrease the social security shortfall and would not, in all cases, increase the return on the money. As well, in the cases where it did increase the return you are bearing more risk that you will not have any money in the future. On the other hand, social security is a defined benefits program. You will receive a certain amount of money that is dependent upon your future salary. It is guaranteed. It is a riskless investment for those who do not save. For those who wish to save more, then there is the option to open your own 401k or IRA right now. The government does not have to create it for you - you can choose to do it yourself.
No one ever said that it was not a welfare program. That does not mean that it is not also a pension program. Essentially, they are both annuities paid out as a percentage of previous wages. If you want to call it welfare, an annuity, or a pension program makes little difference. However, I think that it is much more than welfare because social security is a pay as you go system in which those that pay in now will receive benefits in the future. In that sense, you are saving for the future. If it was absolute welfare, then people would be getting something for nothing and those that pay into the system would be supporting those that do not. Therefore, if it is welfare as you say it is, then personal savings accounts are a moot point. If you are not paying into the system that rewards you later, then how is the government going to create a personal savings account out of money that is earmarked for others?
There are also survivor or dependent death benefits with which one must contend - this is more of the welfare aspect of it. Additionally, the social security program provides benefits to the disabled as well. While that was not the original intention of the law, it did lay the ground work for it.
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