I don't know if anyone has posted anything on this subject, but I think there are many people on this board that is going to be retiring in the next few years, and can be relevant. After reading/listening to some of the debates of Social Security reform I can see why now why GWB Jr want to have privatize accounts, and the Dems are stenously against it. Under GWB Jr's plan, the excess moneys paid into the accounts can't be tapped by Congress for something other than Social Security, and the tax & spend Dems are hopping mad.
Fed chief: Expect Social Security cuts
Greenspan tells Congress that cuts in future retirement benefits are all but
March 15, 2005: 5:12 PM EST
By Kathleen Hays, CNN economics correspondent
NEW YORK (CNN/Money) - Federal Reserve Chairman Alan Greenspan told Congress
that the mounting financial pressure of a wave of retiring baby boomers is so
great that cuts in future government retirement benefits are all but inevitable.
The Fed chairman told the Senate Special Committee on Aging that the nation has
about three years to work out a fix. "In 2008, the leading edge of what must
surely be the largest shift from retirement in our nation's history will become
evident as some baby boomers become eligible for Social Security," he said in
his prepared remarks.
By that date, the population 65 years and older will be more than one-fourth of
the adult U.S. population, Greenspan said, referring to forecasts by the Social
Security trustees. That would be up from 17 percent currently.
"This huge change in the structure of our population will expose all our
financial retirement systems to severe stress and will require adjustments for
which there are no historical precedents," he said.
This huge demographic shift is the main reason why Social Security and Medicare
are facing enormous financial obligations that he says cannot be met without
some choices that most in government are loathe to make.
"At present, the Social Security trustees estimate that the unfunded liability
over the indefinite future to be $10.4 trillion," Greenspan noted in his
prepared remarks. "The shortfall in Medicare is calculated at several multiples
of the one in Social Security."
"These numbers suggest that either very large tax increases will be required to
meet the shortfalls or benefits will have to be pared back," he said.
Greenspan also stressed that rising spending on Social Security, Medicare and
Medicaid is one more reason why the federal budget "is on an unsustainable path,
in which large deficits result in rising interest rates and ever-growing
interest payments that augment deficits in future years."
"Unless the trend is reversed, at some point these deficits would cause the
economy to stagnate or worse," he said.
Senator Hillary Clinton challenged the Fed chairman on his support for tax cuts
early in President Bush's first term. Many Democrats blame the tax cuts for
helping turn the budget surplus that existed at the end of President Clinton's
first term into record deficits, and lately more and more have accused Greenspan
of favoring Bush policies, contrary to his official status as an independent
chairman of the Federal Reserve.
Greenspan said most leading economists at the time had expected budget surpluses
to stretch into the future, citing forecasts by the Office of Management and
Budget as well as by the bipartisan Congressional Budget Office. And he said
that he had also pushed for tight rules on Congressional spending and more
"I don't think that the issue is a question of taking a wholly different view...
It turns out we were all wrong," he said, referring to the prevailing budget
surplus forecasts. He also said that he would take the same position again if he
was faced with the same circumstances.
Senator Clinton finished her questioning with a quick parting shot: "Just for
the record, we were not all wrong, but many people were wrong."
Greenspan also repeated his support for some kind of private investment accounts.
The main reason he gave is that putting part of people's retirement taxes in a
private account would be like putting them in a "lock-box" so that the funds
could not be diverted into spending on other government programs.
Find this article at:
March 15, 2005
Under Criticism, Greenspan Defends Backing Bush Tax Cuts
By EDMUND L. ANDREWS
WASHINGTON, March 15 - Alan Greenspan, the chairman of the Federal Reserve,
defended himself today against Democratic lawmakers who say he contributed to
soaring budget deficits by endorsing President Bush's tax cuts in 2001.
Mr. Greenspan, who has come under fire from Democrats for supporting President
Bush's goal of partly privatizing Social Security, said he supported Mr. Bush's
tax cuts because almost all budget analysts were forecasting trillions of
dollars in surpluses that never materialized.
As events turned out, federal deficits rose as tax revenues plunged for three
years in a row and spending grew on everything from war costs in Afghanistan and
Iraq to education and homeland security. What was expected to be a $5.6 trillion
surplus by 2011 is now expected to be at least a $4 trillion deficit by 2015 if
Mr. Bush's tax cuts are made permanent.
"We were confronted at the time with an almost universal expectation amongst
experts that we were dealing with a very large surplus for which there seemed to
be no end," Mr. Greenspan told members of the Senate Select Committee on Aging.
"I look back and I would say to you, if confronted with the same evidence we had
back then, I would recommend exactly what I recommended them," he continued. "It
turns out we were all wrong."
Mr. Greenspan defended himself after pointed criticism from Senator Hillary
Rodham Clinton, Democrat of New York, who said the Fed chairman effectively
opened the way for the government to spend surpluses in the Social Security
trust fund that were to supposed to have been saved for when the baby boom
generation starts to retire.
"Your testimony helped blow the lid off the lockboxes when it came to the size
of the tax cut, the extent of the tax cut," Mrs. Clinton said.
In recent days, Congressional Democrats have begun to criticize Mr. Greenspan
more openly than in the past. Senator Harry Reid, Democrat of Nevada and the
Senate Democratic leader, accused Mr. Greenspan of being the "biggest political
hack" in Washington.
The criticism has intensified in part because Mr. Greenspan has emphatically
supported President Bush's idea of letting people divert some of their payroll
taxes to private retirement accounts. Most analysts say Mr. Bush's plan would
force the government to borrow trillions of dollars over the next several
decades, though supporters say the government would eventually recoup the cost
as retirees in the future get more of their retirement benefits from personal
Mr. Greenspan repeated his support for private retirement accounts today, saying
they could make it harder for Congress to spend annual surpluses in the Social
Security trust fund. This year, Social Security and other entitlement programs
are expected to take in about $173 billion more than they pay out in benefits,
but the surpluses are expected to start turning into deficits in 2018 that grow
rapidly in each year that follows as the demographic impact of retiring baby
boomers takes full effect.
Mr. Greenspan argued that money flowing into private accounts would be harder
for the government to tap than money flowing into the Social Security system.
But he cautioned that the details of any private-account program would be
crucial, and that certain types of seemingly private accounts might in fact be
just as easy to tap as the existing Social Security trust fund.
"The major attraction of personal accounts is that they can be constructed to be
truly segregated from the unified budget, and therefore are more likely to
induce the federal government to take those actions that would reduce public dis-saving,"
Mr. Greenspan said.
Copyright 2005 The New York Times Company
I can hear AARP tuning up to start screaming now
pale_pony: You're the AARP and their allies gearing up right now, to take on GBW Jr. I hope the retirees in the next 10-20 years had better have a lot of money saved up, because it is a given that our SS benefits will not even come close to what the previous generation of retirees had.
Tax and spend Democrats?
Listen, I never liked the tax and spend types but I am beginning to really wonder about don't tax but spend like crazy republicans of late ...
It is a ponzi scheme. Plain and simple.
The only question is who is going to get the blame when the scheme crashes. The smart money is whatever party is in power at the time. That's why the GOPers are trying to push the crash date out50 years into the dems' next power cycle, and the dems want the crash in the next 20 years while we are still in the GOP ruling cycle.
Can you say Depression?
That's where we are heading because these Asshats in Congress won't deal with the entire entitlement mentality that pervades this country. Buy votes and run the country into the f'ing ground.
Yeah, she saw it all coming....
Hell, most of us saw it coming since the 60's.
Her and her husband rode the wave of the Reagan economic boom and then trashed it, along with Greenspan, by jacking interest rates thru the roof prior to the 2000 election. And her answer is to raise taxes to fund her own election bid thru the outright buying of votes from the losers of America.
This pyramid scam they've got going will result in those of us at the bottom getting nothing because the elderly in this country keep screaming for more with their GD hand out and the .gov keeps giving it to them thanks to their organizational skills and en bloc voting.
On top of that the stock market is going to take a hit, and all of our 401Ks, etc, because as these people start cashing out for retirement it will adversely affect the value of stocks across the board. IOW, for alot of us it will be a triple whammy. We had better all keep a real close eye on things.
Worse still, the gov'ts answer seems to be to let the third world flow across our borders.
But we can fix it thru the electoral system. Right.
We are totally screwed and the gov't we elected is the one screwing us.
The only way to save this country is a constitutional amendment disallowing any dispersement of funds to citizens for other than services or products rendered.
I'm not counting on that fairy tale happening so I just keep buying more ammo.
The fucking worthless, narcissistic, stuck-in-the-sixties, welfare-state-expanding BabyBoomers are the ones who depleted the Social Security funds over the past 30 years - any cuts should start with THEM.
drjarhead: I agree. Personally for me, I would like to deal with this problem during my life time. As I sure hate to pass this BS on to my children, and their children. It is obvious that the govt has spent money for my retirement on my parents and frettered it away on BS things beause they just have too much of it and it was burning a hole in their Congress' pocket.
At one I time, I spoke with one senior woman about the very generous amounts of money the Social Security system is paying her, and she was extremely defensive, and her attitude was we earned it. I then told she is currently being paid way more than she ever paid into the system. She just walked off.
I had the same experience. You get the "I went through the Depression" or the "I went through the War". They know they are getting back WAY more that they ever contributed to the system. It's called GREED.Social Security problem is chump change compared to the Medicare Monster that is even bigger. I have a friend who handles the Medicare billing for a hospital. She tells me our seniors are billing Medicare like $4000 to $6000 a month. Some seniors do this for YEARS! Guess who is going to pay those bills. And wait till the Baby Boomers start handing in their bills. Someone has to pay.