Recent Alan Greenspan Speeches

[BishopMVP]

Forgive me if I don't post this in the NoMyths thread - I think that one is probably past the point of no return by this point. In the last week Alan Greenspan has become more outspoken than normal. Ignoring his stances against protectionism (http://federalreserve.gov/boarddocs/speeches/2004/200402202/default.htm) and the Fannie Mae/Freddie Mac situation (http://federalreserve.gov/boarddocs/testimony/2004/20040224/default.htm), the most interesting, at least to me, is his call for social security and medicare reform (http://federalreserve.gov/boarddocs/testimony/2004/20040225/default.htm). (NYT article here (http://www.nytimes.com/2004/02/26/business/26FED.html)) He also made a call for the Bush tax cuts to be made permanent, but I'd rather avoid treading exclusively down that road for now. For more backround on the social security problem, here (http://www.theatlantic.com/issues/2004/01/littlefield.htm) is an article from the Atlantic.

This issue is important to me because in the end, being a young person, I will end up paying for it more than the older people that are considered first (in large part because their demographic turns out the vote) and neither political party seems concerned about addressing the problem. As the end of the Atlantic article says "The most cynical interpretation of what's going on here is that both Republicans and Democrats recognize the fiscal disaster looming on the horizon—but rather than attempting to prevent the coming of this disaster, each side is scrambling to maximize its preferred policy outcome (the Republicans by lowering taxes, the Democrats by strengthening entitlements for seniors and other government programs), so that when the crisis arrives, and painful adjustments become necessary, each party will feel that it is starting from a stronger bargaining position." It seems to me that there are a few measures that could be taken quickly, such as instituting some sort of merit-based qualifier, which would significantly reduce the problem long-term but neither party wants to implement these policies, the Democrats because support for entitlement programs decline as a lower portion of the population is eligible and Republicans because they don't want to alienate older voters and because they (namely Bush) are in a bad position here because he/they often used the rationale for the tax cuts as being that deficits don't matter (true in the short term) and that entitlements wouldn't be touched.

Any thoughts?

EDIT - Formatting. Also, means testing was part of what I meant with merit-based systems. I don't see why any of my money should be going through the government directly into Bill Gates' pocket in 20 years. If you aren't registered with the NYT, but you can use eatmenyt (all lowercase) as user name/password.

[Peregrine]

I fully agree with the merit-based qualifier, and also with "means testing," basically putting SS benefits on a sliding scale based on income. Is it necessarily fair? No. Is it necessary that we do something? Yes. Here's a great post from the Motley Fool (the other message board I spend a lot of time on.)


"As a baby boomer, I'm vitally concerned that younger people aren't plundered for even higher Social Security and Medicare taxes.

My view is that the best way to avoid that is to means test Social Security and Medicare, so that it pays benefits to the indigent and low income but as little as possible to the middle class with other income sources.

The new Medicare drug benefit is an example of that theory enacted into law. It provides a generous level of benefits to the really low income, but the middle class receive only modest benefits.

What we need are for young working people to be AS MAD AS HELL, AND WE AREN'T GOING TO TAKE IT ANYMORE! Don't let those weasley politicians enact higher taxes! And here's the question to put to baby boomers whining to be paid high benefit levels:

"WHY pay benefits to PEOPLE WHO DON'T NEED THEM!? Paying high Social Security benefits to the well off middle class just subsidizes the cruise ship industry at the expense of working people."



I definitely agree with the sentiment. I don't mind having only limited benefits (or none) when I'm older, I can save my own money for retirement, thank you very much. What I mind is having to carry an even higher tax load for which I'll see little or no return. Means testing will allow them to balance the system out, keep high levels of benefits for the people that really need them (remember, the system was put in place originally to make sure seniors wouldn't starve) and keep taxes the same.