the impending collapse of the american economy
This past Thursday, George Dubya told reporters that he "will not raise payroll taxes to solve this [social security funding] problem" (site requires registration, but it is the New York Times and it's free and it's a good thing to register for anyway).
In case you didn't pay attention to the elections at all, Bush wants to privatize Social Security and allow us, the people, to invest some of our social security money in the stock market or whatever else we want to. Besides this plan being neither social nor secure, it's going to cost trillions of dollars. Let me italacize that: trillions of dollars. Why? Because old people of today are due their social security they've counted on their entire working lives...however, if you tell the young people of today that they can take some/most/all of their social security investment and invest with it how they will, then that money's not there to give to the old people.
And so there's a giant sucking sound.
There are two options to fund social security, then, during the transition that will take years: raise taxes or raise the deficit. Bush, infinitely wise as he is, is now completely stonewalling the idea of raising taxes thereby leaving a rise in the deficit as the only option. But where does this road lead?
Well, the United States would have to collect social security from our paychecks as they always do in order to pay for the monthly checks of the disabled and retired. However, the government would then have to borrow money (raise the deficit) to make funds available to workers to invest in the stock market. The governement, therefore, would in essence be borrowing money in order to fuel the stock market. I guess one could look at it as some sort of socialist's dream since much of the private business in this country would suddenly be operating on the investment funds of (and therefore in a stock-markety sense "owned" by) the government, but that's beside the point...the point is, that the government would be borrowing money on our future and putting it into the stock market, something that ain't exactly a guaranteed positive investment.
You see, the government borrows, say, $3 trillion from foreign investors and the like and then redirects that money into the stock market. Aside from certain ethical and political questions of appropriateness, it's all good -- there's a balance in net worth there. Let's say, though, that there's a post-bubble-type "dip" in the stock market that leads to a one-third loss in value of that $3 trillion: Yeah, we're fucked. A sudden loss of one third of the "security" in our future would cause nationwide panic, people would draw money out of their banks, guys in suits would jump out of buildings, and it would be 1929 all over again baby -- minus the prohibition.
Don't believe me? Just ask Argentina...Bush's plan is turning out to be sicenly (<-- I'm checking comments and I have absolutely no idea what this word is supposed to be, heh) similar to the one that lead to their economic collapse.
God Bless King George.
In case you didn't pay attention to the elections at all, Bush wants to privatize Social Security and allow us, the people, to invest some of our social security money in the stock market or whatever else we want to. Besides this plan being neither social nor secure, it's going to cost trillions of dollars. Let me italacize that: trillions of dollars. Why? Because old people of today are due their social security they've counted on their entire working lives...however, if you tell the young people of today that they can take some/most/all of their social security investment and invest with it how they will, then that money's not there to give to the old people.
And so there's a giant sucking sound.
There are two options to fund social security, then, during the transition that will take years: raise taxes or raise the deficit. Bush, infinitely wise as he is, is now completely stonewalling the idea of raising taxes thereby leaving a rise in the deficit as the only option. But where does this road lead?
Well, the United States would have to collect social security from our paychecks as they always do in order to pay for the monthly checks of the disabled and retired. However, the government would then have to borrow money (raise the deficit) to make funds available to workers to invest in the stock market. The governement, therefore, would in essence be borrowing money in order to fuel the stock market. I guess one could look at it as some sort of socialist's dream since much of the private business in this country would suddenly be operating on the investment funds of (and therefore in a stock-markety sense "owned" by) the government, but that's beside the point...the point is, that the government would be borrowing money on our future and putting it into the stock market, something that ain't exactly a guaranteed positive investment.
You see, the government borrows, say, $3 trillion from foreign investors and the like and then redirects that money into the stock market. Aside from certain ethical and political questions of appropriateness, it's all good -- there's a balance in net worth there. Let's say, though, that there's a post-bubble-type "dip" in the stock market that leads to a one-third loss in value of that $3 trillion: Yeah, we're fucked. A sudden loss of one third of the "security" in our future would cause nationwide panic, people would draw money out of their banks, guys in suits would jump out of buildings, and it would be 1929 all over again baby -- minus the prohibition.
Don't believe me? Just ask Argentina...Bush's plan is turning out to be sicenly (<-- I'm checking comments and I have absolutely no idea what this word is supposed to be, heh) similar to the one that lead to their economic collapse.
God Bless King George.
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