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View Diary: Obama pushes chained CPI in town hall meeting (358 comments)

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  •  I am very confused by your comment (0+ / 0-)

    What policy option are you criticizing here?

    •  FDR indeed "sold" SS as a "trust" thereby (0+ / 0-)

      creating the expectation and belief that the payroll tax people paid was "their money" and that they would get it all back with interest.  

      This led to George Bush's idea that social security was a poor investment compared to the best-case scenario of a "price-averaging, buy and hold common stocks" strategy. This would not only return more money to better-off retirees ... it would also secure an inheritance for their heirs.  What it would NOT do,  without raising the payroll tax rates A LOT, would be providing for disabled beneficiaries.

      Be that as it may ...   70 years ago ... a fiction of "forced savings with interest" WAS probably the only way to get some purchasing power into the hands of elderly ex-workers.

      Why?  There were of course Legislators who sincerely believed that tax cuts and Isolationism were the way out of the Great Depression.  The voters felt otherwise. So Hoover-OUT,  Roosevelt-IN.  BUT it was still difficult to sell "Prussian Socialism" in the form of a genuine Old Age Pension scheme.  So, the Social Security was structured as it was --and to this day is a bit arsy-versy in that  although it is really an Insurance Program designed to prevent destitution brought about by old age or disability, it still pays the HIGHER earner MORE regardless of NEED.

      So, it is neither the kind of forced savings program favored by G W Bush ... NOR an effective shield against the vicissitudes of the Free Market.

      But ... because it EXISTS it stands in the way of anything BETTER being brought into existence.

      Now, in a good mood, I like to fantasize that BHO and I are on the same page on this,  and that he has a double-super-secret plan for morphing SS as we've known it into a pure Insurance product ... possibly with a lower payroll tax rate on a higher income cap with a graduated means test on the payout.

      To do that of course he'd have to sell the idea that ANYBODY can become destitute and dependent at almost any time during their lives.  THIS insures against that.  You pay less. BUT unlike the Bush plan, you do not "get your money back" in a form you can pass on to your heirs.

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