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The Conspiracy Letters
Join the fray! Email us at letters@poorandstupid.com. We reserve the right to publish all letters with authors' names, unless specified as not for publication or for publication anonymously. Letters may be edited for clarity and brevity.
Friday, April 08, 2005
ACTUARIAL JUNK SCIENCE Actuarial science is much more precise than predicting the weather 50 or 100 years hence. If leftist economists can ball up returns projections like Krugman and his pals did, as reported in your article, how can anyone put faith into projections of weather on which the Kyoto treaty is based, and which has such potential to ruin economic growth? Are Kyoto hawks any less politically motivated and demagogic than Social Security purists? Kyoto, economic growth, and market returns are intimately related over the next 50 years, and it is interesting that India and China, expected to be the two largest growth plays in the next 50 years, are specifically exempted from its provisions. If you want to throw Krugman another screwball, perhaps you can ask him across the table how the implementation of Kyoto around the world affect his growth projections, whether he has even considered it, and most especially if his assumption is that Kyoto will depress economic growth or not, and why.Vince Curtis
Posted by Donald L. Luskin at 12:14 PM | link
Thursday, April 07, 2005
CALLING THEIR BLUFF Given the New York Times editorial board and leaders of the Democratic Party's faith in the credit of the United States ["It's Your Own Damn Default" 4/7/2005], how would they respond to this question: What if we created personal accounts but only allowed people to invest in government bonds? Would they support such a plan? If the Trust Fund is so reliable, why not let people hold onto those bonds themselves?In essence, this would leave the Social Social Security system as is, explained here by the Administration: "...if you have someone who opts for the personal account, all they have to do to replicate their current traditional Social Security benefit is just to leave all their money in the Treasury bond fund."
It would also make it impossible to cut future benefits since people would now own the bonds. Keeping benefits intact is something the Dems have publicly supported.
The catch would be that it would call their bluff. All their talk that any solution can't add to the deficit would be demonstrably fallacious. We both know that trillions in liabilities have already been accumulated, but now people would be holding those liabilities in their own two hands.
Now, I'm not saying that the Treasury is going to default on it's debts, but the money to service these T-bonds has to come from somewhere. Giving individuals the bonds in their own account would make that fact crystal clear. Could the economy outgrow this problem? If not would higher taxes needed? That's about the only two options they would have left to fall back on.
I know this is very similar to Greenspan's (and your) argument that personal accounts are the true lock-box, but just wondered what you thought about the bond only twist. Even though I know it wouldn't solve the fundamental problem with the system, it would make it more transparent.
Peter Mork
www.economicswithaface.com
Posted by Donald L. Luskin at 8:48 AM | link
Monday, April 04, 2005
YOUTH WANTS TO KNOW! I work as a broker for a large firm based in St. Louis. I work in a small town but with a good mixture of young and old. I’ve been in the business since 1999 and have opened many accounts for younger investors. By younger I mean 20ish age group and some in my age group (30’s). I’ve noticed over the past six months or so some of them have called asking “when” they will be able to put their Social Security money into mutual funds or other investments. I remind them that no plan has been passed YET.I do find it positive that these people are not talking about “if” they will be able to invest their SS money, but, “when” they will. I have even heard many comments from my older clients who flat out tell me that they hope something is done for the sake of my generation and those that follow.
I think most people know the stakes of this game. They also know the consequences of doing nothing.
Allen Prather
Posted by Donald L. Luskin at 8:08 PM | link