Tuesday, February 1, 2005

Social Security reality

Krugman via David at 42:

[. . .]

Schemes for Social Security privatization, like the one described in the 2004 Economic Report of the President, invariably assume that investing in stocks will yield a high annual rate of return, 6.5 or 7 percent after inflation, for at least the next 75 years. Without that assumption, these schemes can't deliver on their promises. Yet a rate of return that high is mathematically impossible unless the economy grows much faster than anyone is now expecting. [my emphasis]

[. . .]

If my investments performed at a guaranteed 6.5 to 7%, my ass would be retired by now.

Update: 18:00:

Josh Marshall

Not a single Senate Democrat will support President Bush’s proposal to divert a portion of the Social Security payroll tax to personal investment accounts, Minority Leader Harry Reid, D-Nev., said Tuesday.

If he is right, Bush’s plan will be dead on arrival in the Senate, where a supermajority of 60 votes will be needed to overcome a filibuster by opponents. Republicans have 55 seats.

I'm doing the Dance of Joy. How's that for Democratic unity? I didn't think we had it in us.

No comments: