[lbo-talk] Privatization of SS?

[Max B. Sawicky]

Lifting the cap doesn't fix SS.  It reduces the actuarial gap but does
not eliminate it, not even over 75 years.
The Medicare component of the payroll tax is already uncapped.
Medicare is partially (and substantially) financed 
with income tax and premiums, neither of which are growing as fast as
expenses.

The Trustees' report numbers are marginally worse, arguably not enough
to worry about.
The worry is exaggerated by the big (and in this context, irrelevant)
deficits currently in view.

For deficit hawks, privatization is irrelevant.  It doesn't fix
anything they care about.
It would have to be bundled with big benefit cuts to have the impact
they are looking for.

I agree the situation is worrisome.

-----Original Message-----
From: lbo-talk-bounces at lbo-talk.org
[mailto:lbo-talk-bounces at lbo-talk.org] On Behalf Of Wojtek Sokolowski
Sent: Wednesday, May 13, 2009 12:29 PM
To: lbo-talk
Subject: [lbo-talk] Privatization of SS?

http://news.bbc.co.uk/2/hi/business/8047355.stm

This announcement of SS and Medicare "shortcomings" looks rather
suspicious.  There will be no "shortfall" if the current cap on SS and
medicare is increased or better yet, altogether lifted.  So why the
scare?  I doubt SS privatization in the aftermath of the stock market
crash will be very popular, but otoh it will offer a lifeline to
financial corporations, and those people will stop before nothing to
get their bottom line, so it is not far-fetched to think that they
will try to pull something here.

Any thoughts?

Wojtek

      
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