I'm a Pundit Too

Monday, April 16, 2007

We are still waiting Ms Pelosi

It seems like only yesterday that President Bush was pushing his ideas on reforming Social Security. He was accused of course of pushing these ideas because he is a backwards hick looking to use Social Security reform to somehow line the pockets of his corporate buddies. Please pay no attention whatsoever to the absolute fact that his real reason was the decades of begging by the Social Security administration to reform the system. While doing research for a Financial Planning firm back in 1999, I had the chance to read several reports that the SS admin had been sending to Congress on an annual basis. These reports all had the same conclusion. They concluded that without serious reform, the SS system would start running a deficit sometime between 2015 and 2020 and would be in serious debt by the middle of the century.

When Bush first took office, he assembled a bi-partisan group to head over to the SS office and do some investigating. You would be shocked at what they discovered and soon told the President. They told him that according to the math, the SS system would start running a deficit sometime between 2015 and 2020 and would be in serious debt by the middle of the century. In an act of great stupidity, Tom Daschle went before the world decrying the report and accused Bush of trying to scare the country. He of course made no mention of the fact that the report was identical to the same report he had received from the SS admin every year for at least a decade.

After being re-elected, Bush made SS reform a goal. He put forth a variety of ideas and mentioned his desire to help maintain solvency in his SOTU address. There were two points of interest in his address. First, his concerns regarding the future of the system and his idea to use the stock market sounded very similar to Bill Clinton in his 1999 SOTU address. To quote: “Today, Social Security is strong, but by 2013, payroll taxes will no longer be sufficient to cover monthly payments. By 2032, the trust fund will be exhausted and Social Security will be unable to pay the full benefits older Americans have been promised. The best way to keep Social Security a rock solid guarantee is not to make drastic cuts in benefits; not to raise payroll tax rates; not to drain resources from Social Security in the name of saving it. Instead, I propose that we make the historic decision to invest the surplus to save Social Security. Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector just as any private or state government pension would do. This will earn a higher return and keep Social Security sound for 55 years.”

The second thing I find interesting about the Bush SOTU address was that the same democrats who cheered Bill Clinton’s words, actually booed Bush. That’s right, two presidents said the same thing, the democrats cheered one and booed the other.

Don’t worry, it gets worse. Nancy Pelosi, the current House speaker and pretty much the most powerful democrat in DC at the moment, took to the streets decrying Bush and his want for reform. She and Reid stood united to oppose the President. It wasn’t long before we even saw attack ads on the television from the AARP telling us not to fix something that isn’t broken and that his plan was too risky for seniors. By the way, this is the same AARP that makes tens of millions every year by investing the insurance premiums of seniors into stocks and bonds. Pelosi was asked time after time when the democrats would be putting forth their plan to fix Social Security. She of course answered each time by telling us that the plan would be revealed soon enough and that her main focus was making sure Bush didn’t ruin things by creating private accounts. She of course knew that private accounts would ruin everything if the private accounts were set up the way the democrats described them. Never mind the fact that the description given by the democrats was the EXACT OPPOSITE of what the President was calling for. Bush was calling for accounts that mimicked Thrift Accounts that are used by federal employees. They are a mix of low risk stocks and bonds that have outpaced inflation and actually made gains despite market corrections and recessions. But let’s not get into the technical aspects here as it just makes the entire thing more confusing. Let’s continue moving forward, shall we?

Let’s fast forward to 2006. Bush is delivering another SOTU address. Here is a portion of the transcript. “Congress did not act last year on my proposal to save Social Security -- (applause) -- yet the rising cost of entitlements is a problem that is not going away. (applause) And every year we fail to act, the situation gets worse.”

The democrats stood to applaud their refusal to even try to help this failing system. Hillary Clinton was the focus of the camera, applauding with a huge smile on her face. I had no idea she was so happy that the country was heading to financial ruin.

Anyways. Here we are, 2007, the Democrats are in control of Congress. Pelosi, who back in 2005 assured us that her plan to help Social Security was soon to be revealed, still hasn’t revealed her plan to help save Social Security. I might add that I have not heard any ideas from Reid or Clinton either. Obama, are you there? Any ideas sir?

What makes me curious is that not only did they oppose his ideas to help, they never offered their own. In fact, Bush asked on more than one occasion for help from the democrats, and they simply refused. Now, if one has an IQ higher than say, 8, one might think that their refusal was politically motivated. One might think that they used this as an opportunity to scare people into believing that Bush was trying to ruin their sacred retirement fund. One might even think that it started a process that helped them take control of the Congress and may help them take back the White House. Of course, they wont do anything to help fix the broken system, but at least they will be in charge.



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