Release The Hounds!

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Thursday, February 03, 2005

The Morass That Is Social Security

I feel duty-bound to point out the contradictions so obvious in the Democratic party's position on Social Security reform. In 1996, then President Clinton had acknowledged that something had to be done before the system bankrupted itself. One of his suggestions was privitization of part of the program: "[Clinton] signaled that he would entertain a whole range of changes to Social Security, including privatizing part of the system: letting workers invest part of their Social Security taxes in the stock market, instead of having the Social Security Administration invest those taxes in Treasury bills. Clinton is not the only Democrat singing the privatization tune. Senator Bob Kerrey, Democrat of Nebraska, has been belting it out for some years now." I also was rather confused over the projections being bandied about so I located the following: "Here’s how the Social Security Administration projects the timeline: In 2018, Social Security will begin paying out more than it takes in. For the first time, it will have to use the interest being paid on the securities it holds in order to meet its obligations. In 2028, Social Security would have to start redeeming the securities themselves. By 2042, Social Security would have cashed in the last security, and the system would have enough revenue to pay out only 73% of promised benefits. That percentage would drop over time if Congress failed to act." I intend to do quite a bit more research on this over the next few days including which Senators originally were behind Clinton's privatization proposal.
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