Conservatives Express Doubts about Social Security Privatization
Right after he was reelected last November Bush announced he was going to revise Social Security and replace a large part of it with private accounts. This has long been a conservative goal and Bush himself spoke of it as early as 1978 himself, though not noticeably in the 2000 or 2004 election campaigns. Now his effort is meeting with less than stellar success and people who should have been supporting him are expressing doubts. .
Two months into his concerted drive to gain support for the idea Bush has not offered a plan for his supporters to gather around and enact as legislation. Instead he is now reduced to weakly asking for "Anyone with an idea to come forward and join him at the table."
The Democrats are sensibly resisting making any counter-offers since there is no proposal to counter and the President's initiative appears to be self-destructing.
Now Tuesday's
Washington Post reports that even some conservative intellectuals are publicly expressing doubts about the idea of Social Security Private accounts. Such publicly expressed doubts by conservatives are a strong indication that the President's effort is close to dead. Here are a few of the doubts that have been expressed.
...personal accounts "are complicated," wrote Alex J. Pollock, a finance expert at the conservative American Enterprise Institute. "To many people, they are downright confusing and even frightening, and they require diverting a portion of payroll taxes away from the U.S. Treasury." Conservative Harvard University economist Robert J. Barro wrote "Overall the accounts are a bad idea." The absence of an administration plan two months into the President's major effort to gain support for his initiative together with the dropping polls on the subject are the main factors causing the conservatives to express such doubts.
Kevin A. Hassett, director of economic studies at AIG, said the splintering of ideas among conservatives is only natural. For all of its talk, the White House has yet to formally propose a comprehensive overhaul of Social Security, and in its absence, intellectuals have jumped into the fray.
But with so many ideas in play, the White House has to step in soon with a plan around which conservatives can coalesce, Hassett said.
"If the White House doesn't have a plan soon," Hassett said, "it's very unlikely the White House will win." I'd guess that if their phase-out idea had been better received, the President would have by now submitted a plan that met most of the supporters requirements. But since none of various options have gained any support, and in fact are creating strengthening opposition there is nothing to assemble a plan from.
By the end of May the weakness of the Presidents position on Social Security will have become clear to even the most stubborn of his advisors. The only question after that is if the Republicans will be able to pass some minor Social Security changes so as to get a bill passed that has "Social Security" in the title. That will allow them to declare victory and drop the subject, hopefully long enough prior to the 2006 election to minimize the damage it is causing them.
One More Risk of Private Accounts
Social Security is the basic element of almost every American working person's retirement. It is what keeps most retirees out of abject poverty even when every other plan fails. Social Security cannot be taken away from you. In contrast, IRA's, 401(k)'s, 403(b)'s , and the various other types of retirement accounts are not as secure.
CBS News reports on the danger.
In 20 states you don't get to keep your own 401(k) or IRA if your spouse becomes ill and needs Medicaid. The state will take your retirement funds. Of course, you can always divorce the spouse to protect your retirement funds. Your choice, then, is to surrender your retirement or give up your family.
This is what CBS News reported that Colorado state Medicaid director Vivianne Chamont said regarding the Walker's case:
"So maybe he needs to go back to work," says state Medicaid director Vivianne Chaumont. "Maybe he needs to make some adjustment to his life plan."
That may sound cold, but Chaumont says the Medicaid system, which was set up for the needy, is being overwhelmed.
"It is getting to be more and more a program for middle class, and as expenses go up, even higher than that," she says. "So let's recognize that, let's recognize it and build a program in a way that takes care of that in an honest fashion."
For spouses like Ken Walker, whose retirement funds have been gutted, she is sorry.
"It doesn't work for a lot of people," she says. "I think that's true. I think that's sad."
But several courts have said Medicaid officials can dip into healthy spouses' retirement savings, so expect more states to adopt laws like Colorado's. (Underlining above is mine.)
When I checked with a local bankruptcy attorney, I found that the retirement accounts are excluded from assets considered if you go personally bankrupt. So far, at least. But these accounts are not always protected from other government requirements such as Medicaid.
Vivianne Chamont said it. Private retirement accounts don't work for a lot of people.
Bloomberg – Bush’s Forecasts for Returns on Privatized Accounts too High
This is what
Bloomberg published Monday.
Bush is using forecasts from the Social Security Administration that say the economy will expand less than 2 percent a year -- the slowest sustained rate since the 1930s -- after 2020 as population growth eases. At the same time, the agency projects that stocks will return an annual average of 6.5 percent after inflation.
Thirty-nine of 58 economists and strategists surveyed by Bloomberg News say that if the economy slows that much, Bush's stock outlook is too optimistic.Of course, if the economy expands at
more than the 2 percent per year that the Social Security Administration used in its projections, then there is no long term problem paying benefits.
Funny how that works. The Bush administration is conducting a classic "used car" or "mutual fund" sales pitch. They are exaggerating the future problem, threatening politicians who don't accept their "solution",
(SF Chronicle) and in the meantime, overselling the possible solution by suggesting unrealistic returns to private accounts so that you are induced to buy it when you don't need it and pay too much when you do.
This is why they are focusing on 18 to 29 year-olds with higher than reasonable suggested possible returns while trying to get seniors to ignore the sales pitch by telling them that people over age 55 won't be effected. Older people know the market doesn't work to make any investor rich, so the 18 to 29 year-olds are viewed as likely suckers. Of course, if Social Security becomes split between government guaranteed benefits and private accounts, there is nothing at all to stop a Republican administration in ten years from cutting the guaranteed benefits because the paying for them and the bonds issued to create the private system are too expensive together.
Addendum:
NY Times reports problems with projected stock returns.
Club for Growth Attacks Sen Lindsey Graham
Senator Lindsey Graham (R, SC) has had the temerity to propose solving the Social Security problem by increasing the cap on the FICA tax. The anti-tax Republican organization "The Club for Growth" has taken out TV ads attacking Sen Graham in 3 states, starting today because he made the proposal. See
here.
This is an example of Republicans preventing the solution to the Social Security funding difficulties expected to begin in 2042 or later. The Club For Growth anti-taxers don't want a solution. They want government to close down Social Security and possibly put some kind of fig-leaf replacement called privatized acccounts there for a while.
RNC is Getting Desperate on Social Security Privatization
The RNC has issued a
Research Bulletin stating that the people in the Republican town hall meetings are supporting the proposal to privatize Social Security. But they must be getting desperate to find supporters.
Think Progress went back and looked at the quotes the RNC were using, but viewed them in context. The people the RNC quotes as supporting privatization in fact don't. Go to Think Progress and see what they really said!
That is desperation! The so-called Research Bulletin isn't some random right wing-nut blogger. This is the Republican National Committee, for Christ's sake! Bush's Social Security privatization scheme (scam?) is on the ropes and even the true believers can't find
real supporters to quote.
Retirements Under Republican Attack Across the Nation
Josh Marshall presents a letter showing that Republican Governor Schwarzenegger is out to destroy all California government employee pensions. Go read the letter.
Public pensions are more obvious to the media. This is just a sample of what has been happening to employer pensions for the last two decades, but is brought to a head by Bush's attempt to phase out Social Security.
A Proposal for Social Change Through Social Security
This is an interesting idea in the Christian Science Monitor.
When Congress created the Social Security system in 1935, 8 of 11 people reaching retirement age were not just poor - they were indigent. They had almost no income. Some lived on the street, many with their children. They relied heavily on charity to survive.
Those drafting the Social Security bill wanted to redistribute income to these destitute retirees. They succeeded. Today's seniors are relatively flush.
Now, the income gap between the rich and poor in the United States has gotten wider again. A reformed Social Security could help readjust that balance.
It's unclear whether President Bush's plan will do that. But Social Security could be altered to accomplish that goal, says Robert Shiller, an economist at Yale University. He frets that the growing rich-poor gap "is going to fester eventually. It will be a source of resentment."
So he suggests that both the federal income tax and Social Security be indexed so that any growth in this income gap be offset by raising the progressivity of the tax and retirement systems. Here's how it might work: (Go to the
Christian Science Monitor. )
(Underlining is mine - RB)
Washington Post Doesn't Get It
Josh Marshall properly points out the blind and ignorant position that the
Washington Post is taking on the Social Security problems. The Post is missing the most important problem.
The Washington Post is looking at the numbers in projections for future years to identify an urgent problem, and ignoring the politics today. Sure there is a problem with paying full benefits in the out years. But
the immediate problem is the ideologically-based threat to the very existence of the Social Security System itself.
If people buy into Bush's privatizaton scheme, then
there will be no Social Security System to have a problem paying full benefits with in 2042 or whenever. Which problem needs immediate attention the most? The existence of the system itself which is threatened today, or a possible shortfall of tax revenues with which to pay full benefits in four decades?
Thanks to
Josh Marshall for pointing out the strange blindness of the Washington Post editorial writers.
Cheney Replaces Bush on the Social Security Sales Pitch
The blog
First Draft has been reporting on the transcripts of the speeches Bush has given on Social Security, but now Dick Cheney has taken over the ‘outreach’ program for the White House. It seemed odd that there have been no transcripts of Cheney’s speeches, so he went to some local newspaper reports and found out why. It seems that Cheney hasn’t been able to control the questions as well as GWB was.
This is his report of what he found.
Vermont Teacher's Pension Plan excludes management firms which support SS Privatization
The
Rutland Herald of Rutland, VT report that the Vermont Teachers Pension Board does not approve of Bush's efforts to revamp Social Security, and has set a new criteria for firms who contract to manage their investments.
This isn't too surprising, because most defined benefit retirement plans coordinate their payouts with Social Security, so a decrease in Social Security benefits will require them to increase their contracted benefit payout.
More Sources on Social Security Reform
The
AARP offers its view of the Social Security proposals here.
In case you are interested, here is
The Department of Work and Pensions offers a description of the Social Security System in the United Kingdom. Keep in mind that the term “Social Security System” has a broader meaning in the UK than it does in America.
Of course, the
Whitehouse Website has a specific section on “Strengthening Social Security.” I find it remarkably uninformative. After the obligatory overblown scare statements showing how bad the condition of the system is, the only proposal for fixing it is private accounts and getting the Congress to work on legislation.
Next we have the offering of the Club for Growth, called
Social Security Choice. The Club for Growth is a right-wing organization that advocates anti-tax and anti-government-spending,. They have been responsible for running really nasty attack ads against moderate Republicans in the Republican primaries with the intent of moving the entire Republican Party much further towards the conservative or right-wing side of the political spectrum.
The
Social Security Advisory Board is an independent board made up of people appointed by the White House, the Speaker of the House and the President Pro-Tem of the Senate. They have no authority over Social Security itself, but are tasked with studying the system and publishing their results. That makes their publications potentially interesting, but also potentially suspect as White House propaganda for Bush’s proposals.
Social Security News and Connections
The Detroit Free Press reports on Cheney’s talk pushing Social Security reform to a large group in Battle Creek, MI. He is pushing private accounts as a way to resolve the problems with Social Security. He was asked why the government didn’t invest the trust fund in the market, but Cheney dismissed that with the statement “There's a lot of resistance to the notion that the federal government own that big a piece of the stock market".
What he doesn’t say is that the total fees for investing that way (like private retirement funds do) would be a lot lower than would be the fees for individual retirement accounts and more of the investment money would be available to retirees.
The
CATO Institute has what it calls the Project on Social Security Choice.
The Cato Institute From dKosopedia, the free political encyclopedia. The CATO Instutute is a Libertarian think tank. According to their website, it was founded in 1977 by Edward H. Crane. It is a non-profit public policy research foundation headquartered in Washington, D.C. The Institute is named for Cato's Letters, a series of libertarian pamphlets that helped lay the philosophical foundation for the American Revolution. My Addendum – They have an ideological dislike for government involvement in anything other than the military, so they will push non-government alternatives even when government solutions work better.
The Century Foundation Project offers
The Social Security Network. The Century Foundation Project is a progressive think tank.
The Sky is Falling - More and Faster!
The new Social Security Trustees report was published today, and a few numbers changed. None current, but the ones we hear about are those the White House want to use to frighten people into destroying the system.
The first and worst of the stories comes from the
Associated Press. In it the writer (Martin Krutsinger, the Economics writer for AP) misquoted Treasury Secretary John Snow by increasing the amount of tax increase that would be required to cover the shortfall according to
Media Matters for America.
The
blog of the Colombia Journalism Review has this to say about the distortions.
Sam Rosenfield gives this report of the inaccurate language used by the AP reporter at
The American Prospect1. Matt Yglesias points out an unexplained change in one of the key assumptions used by the Social Security Actuaries to project the future performance of the Social Security System, also in
the American Prospect2.
Kevin Drum has two entries today on the report. The
first also looks at the assumptions used for the projections. Kevin's assumptin is that there were several small changes in assumptions intended to cause the one year drop in the year that the trust fund runs out. Recent improved economic growth doesn't seem to support that conclusion. The
second shows a chart that indicates the system is actually projected to have a more favorable deficit in 2080 than was true in last years' report.
The SSA Trustees Report is found through this link, in either pdf or searchable form. Note the very pessimistic introduction that leads to the report. "Not sustainable" indeed! We are being scammed by the ideologues in the White House, folks!
Bush Threatens Democrats for not Dealing on Social Security
But
Josh Marshall reports that although Bush made the threat in Albuquerque, NM, the local Congressperson, Heather Wilson (R, NM) refuses to be seen with him as he goes about his nationwide attack on Social Security. She has also been vary careful not to take any position regarding the Social Security (unwritten) phase out plan of the White House.
Can we assume that she has read the polls and wants to keep her Congressional seat, while he hasn't read the polls and doesn't run for reelection?
Social Security Crisis? Don't buy it!
If you read the political rhetoric out of the White House ahd the rest of the Republican Party, then you know that Social Security is about to collapse. Unfortunately, the Republicans in the White House have begun to direct the Social Security Administration itself to -- not really lie, but to cherry-pick the most negative possible interpretations of fact and present only those. [Sounds like the reasons they gave to invade Iraq, doesn't it?]
If you read real analysis by (non-political) economists and actuaries who haven't been paid for their statements by the Republican Party, you know that Social Security works today and will almost certainly continue to do so as long as we need it to, but may require a little tinkering sometime in the out years. This is the reality of Social Security.
Go look at
There is no Crisis for a short listing of some of the ways the Bush people are misleading Americans to get us to do what they want us to do.
Just remember. Bush lied about WMD because he wanted to invade Iraq, and even sent Colin Powell to the UN to lie to them to get them to support his Iraq invasion. He lied about the deficit to get tax cuts for the wealthy passed. He lied to Japan and South Korea about North Korea selling nuclear materials to Libya to get them to put pressure on North Korea to do what he wanted. Christ - has he EVER told the truth?
With a record like that, no one with any sense will believe him - nor should they. Don't ever believe a serial liar. That person can't help himself. He will lie again. Just remember that.
Social Security for Sale on EBay
Check it out quick before it is sold (or taken down.)
U.S. Social Security System for sale to qualified buyer.
Bush Admin has been Overstating Return on his Private Accounts
A Yale Economist has calculated that most retirees will lose benefits under Bush's provatization plan.
From the
Washington PostBy Jonathan Weisman
Washington Post Staff Writer
Saturday, March 19, 2005; Page E01
Nearly three-quarters of workers who opt for Social Security personal accounts under President Bush's "default" investment option are likely to earn less in benefits than those who stay with the traditional Social Security system, a prominent finance economist has concluded.
A new paper by Yale University economist Robert J. Shiller found that under Bush's default "life-cycle accounts," which shift assets from stocks to bonds over a worker's lifetime, nearly a third of workers would bring in less in benefits than if they remained in the traditional system. That analysis is based on historical rates of return in the United States. Using global rates of return, which Shiller says more closely track future conditions, life-cycle portfolios could be expected to fall short of the traditional system's returns 71 percent of the time. Shiller's paper is found on his website. [Do you
really want to read a paper by a Yale Economist? These items are normally read by masochists and other economists.]
Not only do retirees give up government guaranteed benefits but probably get less in retirement by doing so. Sounds like a typical Bush plan to me. No doubt the wealthy and Wall Street will make out like (dare I say it?) Bandits. The rest of us will be screwed.
Read this to see the Human Face of Social Security
Go
here
New on Social Security
Brad deLong
here and
here. He discusses why private accounts are a bad deal.
Financial Times view
The London
Financial Times describes Social Security Reform as dangerous for Democrats.
Among people aged 18 to 29, 68 per cent support a plan that would allow investment of some of their Social Security contributions in the stock market, according to a Washington Post poll this week. In the 30-39 age bracket, 63 per cent back such a proposal.
This is particularly troubling for Democrats, as the youth vote was where they scored their clearest victory in last year's elections. John Kerry, the Democratic presidential candidate, hauled in 54 per cent of 18- to 29-year-old voters, Mr Bush just 45 per cent.Not sure I agree. But this is their view.
Whose Social Security Plan to be First?
GWB said it today in his Press Briefing. He hasn't submitted a plan, and he won't. The first plan to get to capital hill is dead on arrival.
Kevin Drum also makes the point that there are two visions out there for Social Security "reform." They are:
Bush: Private accounts in which people assume the risk of investing their retirement savings is a must. Everything else is on the table.Democrats: Guaranteed minimum retirement benefits are a must. Everything else is on the table.I guess everything else is negotiable. (Ha!)
But if you listened to the press briefing today, GWB was lying again about how soon the problem becomes important. Though I'll admit that I don't think he realizes it. He is reading what he was handed, and parroting what he memorized. He hasn't looked at the report by the Social Security Actuaries himself, or the better one from the Congressional Budget Office. He only reads summaries and listens to briefings.
More Problems for Bush's SS Plan.
The
LA Times reported more problems for Bush's Social Security phase-out plan.
By Peter Wallsten, Times Staff Writer
WASHINGTON — Signaling more troubles ahead for President Bush's campaign to overhaul Social Security, a group representing the nation's biggest financial companies said Monday that it had decided not to renew its membership in a business coalition raising millions of dollars to back the effort.The Financial Services Forum, which represents chief executives from such corporate heavyweights as American Express, Citigroup and Goldman Sachs, was a co-founder of the Coalition for the Modernization and Protection of America's Social Security, or Compass. But it left the coalition last month after its members failed to agree on Bush's plan to let workers divert some of their payroll tax into individual investment accounts.The forum's shift follows the decision by two securities firms — Edward Jones and Waddell & Reed — to drop out of a related lobbying group set up to promote private accounts on Capitol Hill, the Alliance for Worker Retirement Security.Financial services companies have come under particular pressure from opponents of private accounts, especially the AFL-CIO. These critics charge that the companies stand to benefit from Bush's plan to let workers divert taxes into stocks and bonds that the companies would manage.Sounds like they are seeing bad polls, hearing from pressure groups, and don't see that it is worth the investment or the hassle to be seen pushing private accounts.
Bush's assumptions on SS Phase-out
Josh Marshall has a really good blog on why the Bush-initiated Social Seciurity phase out has failed.
"Unsurprisingly, Bush approached Social Security privatization in the same spirit. The strategy was to divide up the electorate and appeal to each segment in very self-interested terms. They would neutralize seniors with the assurance that their benefits wouldn’t be touched. The young would be lured in with promises of amassing great fortunes in private accounts. Blacks would be peeled off from the Democratic coalition with bogus claims that Social Security harms them disproportionately. And Wall Street and other businesses, who smelled large profits down the road, would pony up tens of millions of dollars to fund the whole campaign."But it hasn’t worked. And the main reason is that the public is not quite as selfish as the conservatives thought."That really tells you how selfish and completely out of touch with America (and, in my opinion, with humanity) Bush and the Republicans really are.
For a Good Description of Social Security...
read
this.
This is a short (relatively so, anyway) description of the program and its basic purposes.
Bush isn't listening - His Proposals aren't Liked
Ruy Teixeira reports a series of polls that show Bush's proposed changes to Social Security are not liked, and getting more so as people become more aware of what they are. His personal ratings are doing too well either.
Bush reached too far. The Greeks have a word for it. Hubris.
Kevin Drum on Social Security - February 2005
This is a roughly annotated bibliography of Kevin Drum's writings on Social Security
during the month of February, 2005. I had started to include everything he has blogged,
not realizing just how much he has written on the subject.
Killing social Security Discussion of why Bush wants to kill Social Security.
Social Security NewsThe deputy commissioner of the Social Security Administration has been roaming the country to appear with Republican congressmen at events designed to promote private accounts.
Retirement age Should the Social Security retirement age be raised?
Private accounts around the country Where else have private retirement accounts been tried in the US?
The privatization Trojan Horse Discussion of a Washington Post editorial.
Calculator Cage Match Another Social Security calculator. The main thing it demonstrates is how much the assumptions used effect the result, but remember, this is the basic characteristic of the entire Social Security phase-out debate.
Crisis? What crisis? Another of Kevin Drum's excellent charts that clearly establishes what the numbers really tell us.
Private Accounts Done Right Kevin Drum discusses a relatively reasonable "private accounts" plan offered by Phil Longman of Fortune Magazine.
Post Hoc Bullshit. Kevin Drum discusses the problem that if the future economy is so bad that Social Security will not be able to pay full benefits, how will the stock market be able to perform well enough to take up the slack?
Just a Thought Paul Glastris asks why 2018 matters.
Fool me once Discussion of the Washington Post's editorial on why private accounts are good.
The Public and Social Sceurity What arguments for privatization are likely to resonate with the public?
GUVMINT SPENDING Public misunderstandings of government spending.
Everyone's Favorite Subject: The Trust Fund Discussion of the Social Security Trust Fund.
Budget Magic Discussion of the accuracy of the numbers the administration provided to Congress when attempting to pass the Medicare Drug Bill. [Let's not forget that the White House threatened the Medicare Chief Actuary with being fired if he gave Congress the latest and best – and much higher – cost numbers during deliberation and the vote.]
The Evolution of Social Security How severe IS the problem with Social Security, and why must it be solved now?
The Budget In discussing the budget offered by Bush to Congress, Kevin points out that the proposed budget
does not include the costs of Iraq, Alternative Minimum Tax (AMT) revision or Social Security transition costs.Looking Glass Journalism Kevin takes several editorialists to task for blaming Democrats for rejecting various possible solutions when it is the Republicans who have taken those solutions off the table.
The White House and the Trust Fund Kevin Drum asks if President Bush is really saying that the Federal Government will default on the treasury bonds held by the Social Security Trust Fund when Social Security starts to cash them in?
Newspeak Watch, Part 2 a comment on the Republican effort to change the terminology from "private accounts" to the more focus-group-favorable "personal accounts."
The Social Security Con Game Kevin discusses how the conservatives have successfully sold the idea that government sucks generally.
Hack Watch Kevin takes Britt Hume of FOX to task for misrepresenting what Harry Reid said.
Democrats and Social Security Kevin Drum takes Nick Kristof (NY Times Editorial writer) to task for misrepresenting the Social Security conflict and blaming Democrats for what the Republicans are causing.
It's a Small World Kevin refers us to a
Colombia Journalism Review discussion of the Wall Street Journal's discussion of privatized retirement accounts around the world. Since the WSJ is subscription only, this is a good substitute.
Framing Debate Kevin takes a brief and possibly humorous look at how to reframe the Social Security debate.
Defaulting on the Trust Fund Kevin discusses Matt Ygleisias' effort to explain President Bush's Social Security program, and points out the difficulty of this explanation since GWB has
never offered a Social Security program. [Note. He still hasn't as of March 14, 2005.]
A New Trojan Horse. Kevin points out that the argument behind President Bush's Social Security reform discussion is: In order to solve Social Security's future deficit, we have to cut benefits. But if we give everyone a private account invested in the stock market, the returns from the accounts will be high enough to make up for the benefit cuts. Essentially this is another Republican "Free Lunch" proposal like Reagan's "Supply Side Economics" fantasy and "Dynamic Scoring."
Talking about Social Security Kevin excerpts some conclusions
Ruy Teixeira has come to (based on his analysis of polls) on how to discuss the Social Security issue
George Bush's Rube Goldberg Folly Kevin discusses the Washington Post's idea of a set of Rube Goldberg safeguards and limitations required just to make sure that the new system can do what the current system already does, namely provide a guaranteed, stable retirement income for old people.
The Democratic Response Short comment on Harry Reid's response to Bush's State of the Union message.
State of the Union 2005 liveblogging Self-explanatory. Kevin live blogs SOTU.
Language Control Comments on the Republican effort to change the language from "private accounts" to "personal accounts."
Number Crunching Kevin discusses Paul Krugman's inadequate math behind the privatization scheme. Krugman is a well-known and well-respected Economist who has a grasp on the actual numbers and can explain what they mean.
Social Security for Dummies
This is a pretty good introduction to Social Security with graphics. I haven't gone through it item-by-item, so I offer it only for an overview and don't guarantee its accuracy in each and every case. But I haven't found an error, either.
What Went Wrong with the Social Security Phase Out?
The Proposals to phase out Social Security that are being pushed by George W. Bush (GWB) were first developed by the
Cato Institute and published in 1983 in a document called
"Achieving a Leninist Strategy"(pdf).Bob Brigham of
There is No Crisis has an excellent article on how GWB has gone wrong in his effort to phase out Social Security. Since the Libertarians at the Cato institute think primarily in economic terms, they figured that by exempting seniors and those over age 55 from the changes in Social Security, they would raise no real opposition among that group with their proposals. Then all they had to do was fake the under age 30 group into paying for the massive costs involved in phasing out Social Security by promising them that they
might get rich by investing their FICA taxes in the fly-by-night Cato scheme.
With their tin ear for real politics and real people, they blew it. The following is from Bob Brigham's article:
"By exempting Seniors from the privatization tax, Cato hoped to minimize opposition. But they forgot they were dealing with seniors, many from the Greatest Generation, who are primarily concerned with the economic security of their family. Altruism is a concept lost upon the libertarians, but is still alive and well in the hearts of the Greatest Generation.
"People at the twilight of their lives are focused on ensuring that their children and grandchildren are secure. Take from today's seniors all you want, they've seen worse days...but threaten to take from their grandkids and they strike fast and hard. This is an instinct, a human trait." Nicer results couldn't happen to a nastier group of people than Bush and the Cato group.
