The Social Security Phase-Out Fallout
Considering
the main topic of last night's State of the Union speech started with
Social Security phase out, there are all kinds of items that we could
discuss – rather than repeat them here, I'll point out a few items of
note:
First, the most profound thing I can say today is “What Josh Said” – talkingpointsmemo.com is a must read today.
Secondly, Paul Krugman pointed out earlier this week
the fallacy of predicting “Social Security Gloom and Doom”, yet stating
that the stock markets will deliver their highest level of returns on a
consistent basis:
They
can rescue their happy vision for stock returns by claiming that the
Social Security actuaries are vastly underestimating future economic
growth. But in that case, we don't need to worry about Social
Security's future: if the economy grows fast enough to generate a rate
of return that makes privatization work, it will also yield a bonanza
of payroll tax revenue that will keep the current system sound for
generations to come.
Alternatively,
privatizers can unhappily admit that future stock returns will be much
lower than they have been claiming. But without those high returns, the
arithmetic of their schemes collapses.
Oh, and if you're feeling the need for snide humor, “The General” provides his SOTU talking points.
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