mbs: it could be abrogated. he's right. so could individual accounts. any Gov program can be abrogated. and him saying it could makes it easier to abrogate. I'm defending the Commission. I think the outcome is going to be more murky than may be feared, but ex ante it doesn't change what we should be doing -- criticizing individual accounts and rejecting scare scenarios.
" . . . Everything he expresses here as a problem with the trust fund that needs to be fixed is something that resulted from his own tireless efforts. . . . "
mbs: I disagree. The '83 Commission may have not foreseen the current projections, but what they did cannot be blamed for the projections (which incidentally are getting better, not worse). They increased net revenues to the program, which can only improve the projections, such as they are.
" . . . against the fact that the Social Security surplus was being used to fund general expenses (a "betrayal of trust" he called it) -- as if there was anything else it could possibly be used for, in the absence of letting it buy assets, which, as far as I remember, he never brought up back then."
mbs: I'm not sure he wasn't doing the right thing. At the time he was proposing to reduce the payroll tax and increase it later. That would have made the tax system more progressive. It would have forced Congress to finance spending more with income taxes and debt, less w/payroll taxes. Bill Greider has been making the same point. I was hostile to the idea of the trust fund surplus being 'stolen' because at the time the surpluses were funding spending (particularly health care increases) to a great extent. Now that the surplus is propping up bad tax cuts, I don't feel quite the same.
" . . . I'm not against the fund buying assets in principle. In principle, we could have a Meidner plan. But of course in principle, workfare could have been a big public works program. It was just never likely. I think the this is yet another case where jumping on the bandwagon in the hopes of steering it our way only serves to oil the juggernaut's wheels, because the political context, which changes more more slowly than the policy context, ensures that only one of the options is a realistic possibility -- the bad one."
mbs: I don't know Meidner. There is no bandwagon for the One Big Fund. It's only one tactic to divert the individual account bandwagon.
" . . . But I defer to your insider judgment. What makes you think the odds are so good as 50-50? The deflating of the bubble and the fear it strikes into men and women's souls? Michael"
mbs: Because I believe the Most Powerful Force In the Land wants surpluses and debt repayment, not individual accounts. In service to this, I half-suspect the Commission will issue a report that is fraught with the problems underlying individual accounts. This will discombobulate Bush and muddy the air sufficiently to see that nothing is done with Soc Sec. Debt repayment will proceed. In this scenario, as Federal debt dwindles to a negligible level over the next dozen years, the MPFITL will begin a push for the One Big Fund. The reason? They don't want the system to collapse. They're not that fucked up, or not in that way. Their avarice flows down other channels -- not aggrandizing a low-rent mob of 401(k) chiselers.
I'm not an insider; I'm strictly on the outside looking in, or trying to look in. Brad is your guy. He's really plugged in. More often than not, I don't even know what goes on at EPI.