Public remains skeptical of Social Security overhaul, Snow concedes.

Associated Press
Feb. 23, 2005 09:40 AM

WASHINGTON - Treasury Secretary John Snow acknowledged Wednesday that the Bush administration has not yet succeeded in selling its plan for Social Security to the American people, and said backers would continue to travel the country educating people about the program's problems.

President Bush has traveled to eight states to conduct campaign-style Social Security events, stressing that the system faces long-term financial straits. Supporters in Congress, armed with GOP-prepared materials, are holding meetings with constituents all over the country this week to try and build support. Wavering members of Congress are holding similar meetings to gauge public opinion.

Snow is traveling this week to Florida to campaign for the Bush plan.

He said Wednesday that he understands that Congress has been leery about creating personal accounts as part of Social Security, as Bush has proposed.

"We still have some work to do," Snow said.

He predicted that opinions will change as people learn more.

"We're at the early stages of this education process and engagement process," Snow told reporters. "We're gonna hit this hard. We're gonna get the facts out. We're gonna ... engage with the American people on the fundamentals of Social Security."

Snow said he and other administration officials would emphasize Social Security's long-term financial problems and why young people should have the ability to divert some of their payroll taxes into personal accounts, which could be invested in the stock market and build over time.

For his part, Snow plans events at the Chamber of Commerce in Tampa on Thursday and the Chamber of Commerce in Jacksonville, Fla., on Friday.

The Full Court Press is on to “Privatize” Social Security.

An unworkable solution to solving the Nation’s Welfare Trust is again, front and center to the Administrations Agenda. When John Snow is out touting the fundamentals of Personal Accounts for Americans to solver the widening chasm between “Claims & Assets”… it is relatively safe to presume the crisis is much closer than the Public at large will recognize.

In case you should dismiss the present Administration's resolve, observe what our President believes and states repeatedly:

“Bush, what I wanna assure you all is that um, I like uh calling congress to do big things…. because that’s what we got elected to do… and I’m going to continue pressing this issue and pressing this issue and pressing this issue… til we get something done.”

By allowing individuals to divert some of their social security taxes into accounts they would own Federal Reserve Chairman Alan Greenspan said he too supports Privatization:

“How the markets interpret it is really in a sense the important issue.,, because we can get interest rates going up or going down and we have significant effects that we would prefer uh probably did not occur… so that my caution here is based on not knowing and not knowing how to know in advance, how markets will respond.”

What Chairman Greenspan is asking the markets is simply how they will view this bridge over the impossible abyss.

Quite simply, this is additional borrowing, aka DEBT.

The alternatives include cutting benefits and/or raising taxes. Unlikely bedfellows for a political machine bent on printing their way out of trouble.

Fiscal malfeasance is what landed the Social Security trust in deeper waters to begin with… replacing the Income (Cash) with United States Treasury Notes & Bonds has systematically replaced Cash in the trust with debt from an insolvent government unlikely to reign in its Totalitarian reigns.

When pressed on the potential risks by Senator Charles Schumer of New York, the Chairman Greenspan’s revelations were more Catch 22, than solution:

“It is risky doing nothing is risky doing any other solution to this is risky, we’ve got this huge hole in our long term funding problem and I know of no way to resolve it without some risk.”

According to the chairman, boosting savings is the panacea.

Simply Amazing pabulum and a complete waste of time.

Forget about the general noise generated about Wall Street robbing these inflows blind… of course they will, it is what they do. They are nothing but criminal whores who transfer wealth to their own pockets through insidious schemes and misadventures.

Michael Kinsley made the widening abyss crystal clear:

1. To "work," privatization must generate more money for retirees than current arrangements. This bonus is supposed to be extra money in retirees' pockets and/or it is supposed to make up for a reduction in promised benefits, thus helping to close the looming revenue gap.

2. Where does this bonus come from? There are only two possibilities-- from greater economic growth or from other people.

3. Greater economic growth requires either more capital to invest or smarter investment of the same amount of capital. Privatization will not lead to either of these.

    a) If nothing else in the federal budget changes, every dollar deflected from the federal treasury into private Social Security accounts must be replaced by a dollar that the government raises in private markets. So the total pool of capital available for private investment remains the same.

    b) The only change in decision-making about capital investment is that the decisions about some fraction of the capital stock will be made by people with little or no financial experience. Maybe this will not be the disaster that some critics predict, but there is no reason to think that it will actually increase the overall return on capital.

4. If the economy doesn't produce more than it otherwise would, the Social Security privatization bonus must come from other investors, in the form of a lower return.

    a) This is in fact the implicit assumption behind the notion of putting Social Security money into stocks, instead of government bonds, because stocks have a better long-term return. The bonus will come from those saps that sell the stocks and buy the bonds.

    b) In other words, privatization means betting the nation's most important social program on a theory that cannot be true unless many people are convinced that it's false.

    c) Even if the theory were true, initially, privatization would make it false. The money newly available for private investment would bid up the price of (and thus lower the return on) stocks, while the government would need to raise the interest on bonds in order to attract replacement money.

Protect yourself.

No one else is going to do so.

Certainly not the Plutocratic Administration.

Certainly not the Kleptocratic front men/women for Corporate Fascism down on Wall Street.

Pay your taxes, and remove the savings you have from this Bankrupt Enterprise and invest in Honest Money.

Avoid the Fabian “Wheel of Fortune.”

It is ethically, morally and socially devoid of protecting you… the INDIVIDUAL.

This is up to you, it is your savings for now and don’t think for a moment the “Rules” won’t change. They will, they always do.

© 2005 John Mackenzie
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