Saturday, February 5, 2005

Options and Alternatives

From the Center for American Progress.

If we're gonna beat the Repubs, we can't just say everything they do sucks (which it does). We're gonna have to give alternate options. There are some good ideas over at CAP.

Real Progress on National Savings and Generational Responsibility: The one thing nearly everyone in Social Security circles used to agree on was that as we moved closer to the baby boom retirement it was increasingly important to display generational responsibility – to make the tradeoffs to increase national savings now to ensure that we were putting our economy in a better place to deal with known challenges down the road. Indeed, the improvement in the federal fiscal picture in the 1990s – which was substantially driven by a commitment to fiscal discipline and saving surpluses for Social Security – was solely responsible for a doubling of national savings from 3.1 percent of GDP in 1992 to 5.9 percent of GDP in 2000. On the verge of the baby boom retirement, the Bush administration has abandoned the principle of generational responsibility and passed successive rounds of long-term tax cuts that have taken us giant steps backwards – contributing to an erosion of national savings to only 1.4 percent of GDP over the last seven quarters, the lowest level since 1934. Even in the wake of this deterioration, there is too little focus in policy discussions about Social Security on increasing savings now. Distressingly, the new gold standard for Social Security plans seems to be that they at best do no harm to national savings. With our national savings at historic lows and the baby boom retirement at our doorstep, it is absolutely essential that any Social Security reform plan move us back in the right direction by ensuring that we increase national savings now.

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