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Comments by YACCS
Saturday, April 30, 2005

We need more ransom for King Richard

Robin Hood didn't believe in unfair taxes like George Bush does and he doesn't want to starve the poor to make Wall Street rich.

Bush as Robin Hood


Published: April 30, 2005

Democrats have good reason to be aghast at President Bush's new proposal for Social Security. Someone has finally called their bluff.

They tried yesterday to portray him as just another cruel, rich Republican for suggesting any cuts in future benefits, but that's not what the prime-time audience saw on Thursday night. By proposing to shore up the system while protecting low-income workers, Mr. Bush raised a supremely awkward question for Democrats: which party really cares about the poor?


"The amount of income-related redistribution in Social Security is a lot less than people think," said Jeffrey Liebman, a Harvard economist and a former official in the Clinton administration. "If you get the details right, you can design a personal-account retirement system in which groups with high risks of poverty in old age come out at least as well as with the current system."

So why are his fellow Democrats so dead set against it? Their usual answer has been that any move to privatization would doom the poor along with the whole Social Security program. If you let the middle and upper classes opt out and finance their own retirement, the argument has gone, there will be no political support for even the modest subsidies that Social Security now provides to low-income workers - just look at what Republicans did to welfare and public housing programs.

But the elderly poor are different from the younger poor. For one thing, they're more likely to vote, a fact not lost on even the most hardhearted Republican. They also arouse much more public sympathy. Kicking 25-year-olds off welfare was popular because it was thought to be good for them. Nobody claims that forcing that widow to eat cat food will build character.

That's why even the most ardent free-marketeers are not trying to eliminate the safety net for the elderly. The libertarians at the Cato Institute are trying to strengthen it with a proposal that has been introduced by Republicans in Congress. If your individual account left you with a paltry pension, their plan would guarantee you a subsidy to lift you above the poverty line - and well above what many retirees are now getting from Social Security.

Democrats like to portray Mr. Bush as King George or Marie Antoinette. But on Thursday night, when he promised to improve benefits for the poor while limiting them for everyone else, he sounded more like Robin Hood, especially when he rhapsodized about poor people getting a chance to build up assets that they could pass along to their children.

It was the kind of talk you might expect to hear from a Democrat, except that Democrats don't talk about much these days except the glories of the New Deal. They know that Social Security doesn't even have the money to sustain a program that leaves millions of elderly people in poverty. But it's their system, and they're sticking to it.

I never liked John Tierney.

He has been advocating overturning rent control in New York for years. When it was tried in the mid-90's, landlords, among the stupidest businessmen on the planet, were planning hundreds of dollar rent increases. Of course, since the tenent lobby is the second largest in the state, the plan was stillborn.

And he's an idiot.

Bush's "plan" would cut benefits to everyone who makes more than $20K a year. Which is 70 percent of America. Think about that for a minuite. Nearly three out of four American workers would take a benefits cut. That's Robin Hood alright, if you're King John.

Because Bush has not planned to raise benefits for the poor, but simply not cut them. So in this mythical world where the market never crashes, people might make more money, some might come out better, but most Americans would be screwed like a Thai hooker visiting Neil Bush in his hotel room.

Let's be for real: nothing stops working class people from investing today. They can buy wide screen TV's and rims, they can invest in the stock market, and don't. Over 40 percent of people eligible to participate in 401K's, don't. Across the finanical and educational board. Why? Because they don't trust Wall Street. Simple as that. The complexities of investment would cause some people to live in utter poverty.

A WaPo article had an interview with a woman getting her masters in accounting. Hardly a financial illiterate. And she just said she didn't have the time, between her kids and school to worry about investing in social security.

And Tierney is also wrong in assuming the conmen at Cato aren't trying to screw the elderly. What they want to do is move this to 100 market-based investing. So everyone has to eventually jump in the market place.

In states where this plan has been tried, investment rates have been well under 10 percent, with many people moving back into the state-secured system.

If poor people want assest to pass on to their kids, being healthy and not living off them because they have a social security check is a wonderful gift. And there is no law against bank accounts. The utter selfishness of Bush's plan is amazing to behold. Robin Hood is right, but he's King John coming for your gold.

posted by Steve @ 8:53:00 AM

8:53:00 AM

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