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Total Bull Donkey: Democrats Develop Social Security Calculator.
Last week, WILLisms.com noted the existence of some interesting Social Security reform calculators, which show how much better retirees would end up under various reform models than under the current system.
Try it out. It's a real hoot.
Schumer, incidentally (as WILLisms.com previously noted), was recently named co-porker of the month by Citizens Against Government Waste; he also has voted numerous times over the years to raise Social Security taxes. Schumer said of the calculator:
"The president's been making it seem to people that privatization makes you money. It loses you money."
Oh, boy, where to begin with this nonsense?
Intentionally cryptic and vague about the assumptions going into the calculations, the Schumer/Democrat calculator assumes an abysmal 2.7% growth rate in the personal account, which is absurdly low. The Schumer model also assumes that contributions to the personal account would be capped at 1000 dollars annually and for some reason puts the retirement age at 65 (perhaps so the accounts have less years to grow?).
The calculator, funded by taxpayer dollars, also appears on the website of Senate Minority Leader Harry Reid, who said that President Bush’s reform proposal would lead to “a guaranteed benefit cut of 40 percent or more.”
The Heritage Foundation explains how he came to such a bizarre conclusion:
"How, then, do opponents of reform arrive at their misleading predictions? By simply ignoring the money saved and invested in personal accounts. Their numbers imply that investing money in personal accounts would reduce the amount of money available to pay benefits by 13 percent, leading to an overall benefit cut of 40 percent. This analysis assumes that the money that goes into the PRAs would just disappear and that none of it would be available to pay Social Security benefits in the future. Nothing could be further from the truth."
The explanation from the Schumer release also offers "Thanks to Jason Furman of the Center on Budget and Policy Priorities for the underlying calculations."
Furman, it must be noted, was one of the sources in the recent Washington Post article that had to be retracted and corrected for its erroneous claims. Furman also worked for General Wesley Clark's and Senator John Kerry's failed campaigns; his peculiar brand of Marxist economics has been thoroughly rejected first by Democrats, then by Americans as a whole.
Another problem with the calculator is that it assumes wages will not grow. In other words, it tells a 24-year-old making, say, $45,000 this year, that her income will never rise, even as inflation rises (and wages likely outpace inflation). $45,000 in, say, 1965, was the equivalent of nearly a quarter of a million dollars by the turn of the century (source: NASA calculator). Similarly, assuming that someone's salary is never going to rise between now and the late 2040s, even as inflation rises, is dubious and nonsensical.
The most egregious problem of all with the calculator, however, is that it assumes, falsely, that under the current system, benefits will be there for retirees. This is simply not true, as the system, with no action taken, will not be solvent for the WILLisms.com generation; Democrats still have yet to offer any alternative.
In short, this calculator takes exclusively worst case scenarios from various potential reform plans, puts them together, adds in non-existant "privatization taxes" then labels it all "Bush's plan" (when the President himself has yet to endorse a specific plan, only guiding principles, principles which certainly do not include any "privatization tax"). The calculator is intentionally misleading at best, but more likely is flat-out deceitful.
Shame on Democrats for this sham, this bull donkey.
WILLisms.com recommends this Social Security calculator instead:
On it, you can input reasonable levels for variables yourself, and everything is transparent. Very little about it is fixed, unlike the Democralculator.
Also, if you desire maximum ease of use (although you can also fine-tune your results), give this calculator a spin, from the Heritage Foundation.
"Chuck's calculator isn't really a calculator at all. It's a slick assault on Social Security reform as a whole, and offers no solutions to those of us who aren't likely to see its 'promises' kept."
"CBO projects that under current law Social Security outlays will first exceed revenues from payroll taxes and taxation of benefits in 2020 and that the program will exhaust the trust funds in 2052. After the trust funds are exhausted, Social Security spending cannot exceed annual revenues. As a consequence, because dedicated revenues are projected to equal 78 percent of scheduled outlays in 2053, CBO finds that the benefits paid will be 22 percent lower than the scheduled benefits."
The Democrat calculator claims to use CBO data, but it conveniently omits that little bit of cold, hard truth.
Posted by Will Franklin · 17 February 2005 09:47 PM
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