Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The argument you are making, that being sheep to be shorn by the financial sector is better than being promised an entitlement that may or may not be paid in full, in dollars that may or may not have substantial purchasing power, is a relative comparison.

The test of the proposition that being part of a voting bloc in a public entitlement program is a weaker position than being a "small investor" for the finance sectors to harvest from is actually quite simple: if it was a weaker position, then the Republicans would not be continually pushing to privatize social security. They certainly are not doing it because it represents a larger slice of the national income for retirees, but because it represents a larger slice of income for those who work in the finance sector.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Feb 10th, 2009 at 12:44:34 PM EST
[ Parent ]
I don't believe, the Republicans have a consistent position. If the soc sec trust fund would be privatised now, the federal gov't's finance would be in much worse shape.

The easiest way of defaulting on the part of the social security promise, that is associated with the trust fund, is to let it grow indefinitely. For that, there has to be made the steady beat, that it is underfunded. The claim, that soc sec has to be privatised is useful for the Republicans, as long as it is not really done.

Publicly the deficit of the unified budget is usually cited, covering up, that the general tax income just is enough for 2/3 or so of the general budget. A couple of years ago the situation may have been different. The idea of the Republicans may have been to plunder the gov't to the benefit of the financial industry. But now it is pretty clear, that a crisis of the general budget is unavoidable. To counter that, there would have to be massive tax increases in the very near future, if the promises of the soc sec trust fund would have to be paid out. What is left to plunder, is now plundered by other schemes.
There maybe left over Republican talking points from the past, or they simply don't have a clue. Privatisation of soc sec now would blow of the whole game.

And which position is weaker is not so clear. Given current circumstances, I see the protection of private investors - as well small investors, bond holders of banks probably are very often private retirement fonds, to the disadvantage of the public, in which the subgroup of people with claims on soc sec are especially vulnerable to a fiscal crisis. Being part of a voting bloc seems not to be such a strong position, when Dems and Reps unite against the interests of such a bloc.

By the way, I'm not aware of any public European retirement system, that takes part of the pay roll tax as saving. In Germany it is even vice versa, that the general budget is used to bolster retirement.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue Feb 10th, 2009 at 01:20:10 PM EST
[ Parent ]


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