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Over the edge, willingly
Posted by: Dale Franks on Friday, February 18, 2005

Robert Robb writes that yesterday, when asking Alan Greenspan about Social Security privatization, the Democrats went over the cliff like lemmings. Greenspan was the cliff.
Alan Greenspan's status and role as an economic oracle is unfortunate.

The Federal Reserve System is supposed to be setting monetary policy to establish and maintain price stability. Looking to its chairman to be an overall economic "maestro," as Greenspan has been called, is to misunderstand both the function and authority of the position.

Yet, an oracle Greenspan has become. And given that, it's puzzling why Democrats would spend so much time in the Senate Committee on Banking, Housing and Urban Affairs the other day grilling him about Social Security.

After all, Greenspan's support for personal retirement accounts was already known. And his willingness to make the case for that approach, within the limits of Greenspanese, was entirely predictable.
If you oppose SS privatization, and you know the man who is hailed as the national economic czar, and who is credited with almost supernatural reliability on economic affairs, supports such privatization, then why do you ask him questions about it at all? How is that possibly gonna do your side any good?
The existing pay-as-you-go system, in which today's workers pay for the benefits of today's retirees, "is not working," he said.

The problem is demography: there are fewer workers per retiree, with additional declines projected, and retirees are living longer.

Greenspan said he supported personal retirement accounts, in which workers would save to provide their own retirement income. He accurately referred to this as "forced savings."

Such a change, according to Greenspan, would not only better suit current and anticipated demography, but would also benefit the economy, since it would increase the savings rate. The pay-as-you-go system, he said, "basically moves cash around."

Personal retirement accounts would also give more people a larger stake in the economy, he observed, and create estates for lower- and middle-income workers.

Now, none of this was in Greenspan's prepared remarks, which concerned the current state of the economy. (He generally thinks it's pretty peachy, by the way.) Virtually all of it came in response to suicidal questions by Democratic opponents of personal retirement accounts.
Maybe the Democrats have some subtly opaque reason for doing this, and now that they've done so, they've cleverly drawn Greenspan (and the president) into their cleverly concealed trap. But, somehow, I doubt it.
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Previous Comments to this Post 

So do I.
They're not that clever.
Written By: Bithead
Hasn't Greenspan said that this is his last term?

Perhaps the Dems are ensuring that a successor will have to testify to their stance on privatizing Social Security, a new litmus test if you will?
Written By: Lurking Observer
URL: http://
"I have a cunning plan m'lord".......
Rep S. Baldric(Dem) - Dunny-on-the-wode.
Written By: looker
URL: http://
Privitization is going nowhere, fast. Asking Greenspan questions about it is hardly "suicidal."

The ineptitude of the Bush administration in its push for privitization is pretty mind blowing. Unlike al Qaeda and Iraq, most Americans actually know a thing or two about SS. Bush treated them as if they didn't. As the same article said:

Bush has made a strategic mistake in not putting a specific proposal on the table, which has enabled opponents to fill in the details for him.

More to the point, most Americans figured out pretty quickly that privitization would atually undermine the long term health of SS.

The larger problem for Bush is that his position regarding privitization is ideologically incoherent. If the idea is to give people control over their retirement, why not simply cut payroll taxes and let taxpayers use the money as they see fit. If they choose to blow it - or, for instance, to pay of their debts today, which is actually the soundest plan for retirement - so be it. But Bush's position is half a loaf; he wants to give some control away, but not all of it. You can't be ideologically consistent if on the one hand you say you are for the "ownership society" and then on the other hand tell workers that they cannot do with their hard earned money as they see fit.

So what if Alan Greenspan said some helpful things. Big deal.

Written By: mkultra
URL: http://
MOST Americans know about Social Security?

MOST Americans think the MONEY IS ACTUALLY SITTING THERE! - talk to some of them and see.
And I'm not talking about people who just started paying, I'm talking about people who have payed all along and are now collecting from it (and who, not surprisingly, voted for Kerry....)

Remember over half of us are nearly too stupid to live MK! We come from Red States and voted for Bush in the last election!

The disingenuous bullshit about how it's going to 'run out of money' in any future year is just more political talk to help keep the damn thing on continued life support until, as someone said eariler, all the Pol's currently alive and responsible for fixing it are safely dead and gone.

It's a bloody BILL just like a credit card charged out to it's limit. So
long as the next generation is large enough (which it's not), or stupid enough (we'll see), to participate in the continued PONZI scheme all will be well for the people collecting in the near term.

And I'd settle for SOME control over the hard earned money that I hand over every two weeks as opposed to the NO control I have now.
Written By: looker
URL: http://
Privitization is going nowhere, fast. Asking Greenspan questions about it is hardly "suicidal."

Right. Asking one of the most respected men in Washington his opinion about something when you know in advance he will disagree with your position is just brilliant strategy. You'd think someone who's purportedly been to law school would understand why that might not be the best approach.

Now, whether or not privitization is going anywhere largely depends on how effectively the Democrats are able to deceive the general public. That remains to be seen.
Written By: Lance Jonn Romanoff
More to the point, most Americans figured out pretty quickly that privitization would atually undermine the long term health of SS.

Well, Duh, I'm sure most of us want it to die off as, over time, we all have our own private accounts. But of course you want to cut pay-roll taxes, MK. It wouldn't be to slow the funding of the private accounts, would it. Damn, I'd be just fine with raising the tax as long as all of it goes into the individuals account.
Written By: wilky
URL: http://
wilky raises an interesting point:

Let's assume that privatization fails. How will the impending shortfalls (even Dems, after all, admit that benefits are likely to be cut by some 25% or more) be dealt with?

Actually cut the benefits? Hardly likely.

So, instead, taxes are raised, either payroll or income or general revenue.

Assuming that the economy weathers this, what are the prospects that the raised taxes would then be lowered, after the baby-boomer bulge is dealt with?

Or are we more likely to see those heightened tax rates stay in place (defended, undoubtedly, as necessary to pay for various programs, sustaining economic growth, fueling future growth, what-have-you)?
Written By: Lurking Observer
URL: http://
There's only one thing Greenspan is interested in doing and that's furthering the weathly Republican's opportunity to gain even more wealth. Greenspan sees Soc Sec reform as the next "windfall product" for his rich pals that own huge investment groups. Although I am for "privatization" of Soc Sec, I'm not for anything Greenspan wants to do. I don't trust him and believe he should of been fired 5 years ago. Unfair trade practices are hurting the U.S. economy and no one in government is trying to do anything about it. Fixing Soc Sec is one thing, but having good paying jobs for Americans is the root that will make the new reform grow and be successful.
Written By: concerned about our future
URL: http://

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