A Level Gaze

A Level Gaze

"What effect must it have on a nation if it learns no foreign languages? Probably much the same as that which a total withdrawal from society has upon an individual."
--G.C. Lichtenberg

Wednesday, February 23, 2005

One Meeelion Dollars

MyDD relates some of the hopeless bs that is the Social Security debate, and points to this proposal from former Treasury Secretary Paul O'Neill:

To move away from Social Security's chronic funding problems, O'Neill suggests that the government put $2,000 in a special investment account for every newborn American. The government would invest $2,000 more each year until the child reaches 18.

The money would be invested in a conservative index of stocks and bonds and couldn't be touched until retirement. The investment would grow at a compounded rate, meaning that as the value of assets in the account grows, profit would be reinvested so the account would grow even more. Without adding a single cent beyond compounding after the child turns 18, he or she would retire at age 65 with $1,013,326 in the account, O'Neill reckons.

"If you do the arithmetic, the $1 million would provide an annuity of $82,000 a year for 20 years," O'Neill said in an interview.

O'Neill assumes a 6 percent annual return on investment. He calls that figure conservative since it represents the worst performance to date of any 25-year cycle on Wall Street.

Sounds pretty good, right? Let's run the numbers. Assuming an inflation rate of only 1%, in 2075 the $82,000 annual payment becomes $43,099 in today's dollars. A rate of 2% drops it to $22,505, and 3% (the historical average since 1900) to $11,674. And those annual payments are worth less and less every year. Continuing the projection, at rates of inflation of 1%, 2%, and 3%, respectively the payments at age 85 would be worth between $34,898,$14,724, and $6,157 annually.

Also, don't live past age 85, because O'Neill's annuity money runs out then. Or play it safe at 65 with a lifetime annuity and get a much lower annual payment.

In the bargain, O'Neill proposes getting rid of Medicare, presumably because millionaire retirees will be able to afford to pay for it themselves. What's medical care going to cost in 65 years? Health care costs are currently going up by more than 6% per year. I'm going to go out on a limb and say that, in 2090, $6,157 per year in today's dollars is going to cover approximately squat. If medical care continues to outpace inflation, it won't even cover that.

Edit: Today's children will be 85 in 2090, not 2070.

posted by David at 2/23/2005 07:45:00 AM ::

Saturday, February 12, 2005

Shorter David Brooks:

I spend all of my time shilling for a president whose sole motivation is to create and nurture an aristocracy in America by ripping off the proles. Discovering that I rank no higher than lance-polisher is a bitter, bitter thing.

posted by David at 2/12/2005 11:59:00 AM ::

Saturday, February 05, 2005

Juan Cole Brings the Pain

This has to be the best takedown of a prominent wingnut I've ever seen. I haven't been much on the Jonah Goldberg beat much, but he's one of the worst. Reading this made my teeth hurt, it was so sweet.

posted by David at 2/05/2005 01:20:00 PM ::

Friday, February 04, 2005

SS Personal Accounts: Don't Worry, You'll Get What You Have Coming to You

Geez, what a bunch of whiners we Democrats are. Of course retirees will get back every penny of principal they put in and every penny of interest they earn on the proposed private accounts. I'm ashamed for the Left when I hear people say the Republicans are going to illegally take away people's savings.

They're going to take away some of your regular Social Security contributions, equal to every penny you put in and every penny of the first 3% of interest you earn on the proposed private accounts, plus inflation. Democrats can pretend that it's the same thing all they want, but it's not. Listening to them, you'd think that putting away $2 and and getting back $1 was some kind of bad deal, or something.

posted by David at 2/04/2005 07:41:00 AM ::

Tuesday, February 01, 2005

Bush’s Slime-Drenched Magnanimity

or, Doing the Right Thing for Sleazy Reasons

$250,000 military death benefit proposed

In response to those of us who opposed the Iraq war in part because of the suffering certain to be visited on our armed forces, the pro-war crowd was fond of saying that soldiers had no cause to complain. They knew they could be sent to war, even an unjust war, when they signed up, and they knew what the deal would be if something happened to them. That's what they agreed to. The soldiers took their chances and lost. The government should owe them nothing. Aside from the fact that Congress never declared war on Iraq, and therefore this invasion was illegal, the argument does have some merit.

So why would the government sweeten (ugh!) the deal now? Perhaps because the soldiers had been sent to fight an war of choice under false pretenses and their deaths were unnecessary in every sense of the word, and this administration knew they would be from the beginning? Because the public has now turned against the war and they feel the need to try to limit their political exposure? Yes, on both counts.

If this is a good idea now, if this is the way to do morally right by the families of the deceased, then it should have been the right thing to do from the beginning. Making the payment retroactive does not change the fact that the policy of the U.S. military was to pay $12,420 to the families of soldiers killed in combat zones. During the first Gulf War, the payment was only $3,000, and you didn’t see politicians climbing all over themselves trying to raise it.

Are they going to try to tell us that after 1,400 Americans paid the ultimate price that something finally clicked and George saw the light? Why not after the first body bag? Why not after the 10th? The 100th? The 1,000th? As a country, we unfortunately have plenty of experience losing soldiers in wars, and yet nobody ever came up with the idea of paying families of the dead more than 10 years' worth of the average soldier's salary. I submit that it wasn't because we were stupid or immoral then. In this case, coming from those who manipulated the country into this war, it amounts to an admission of wrongdoing: you don't make restitution for something you haven't done. Paradoxically, if this were genuinely a just war, if we had really invaded Iraq to defend ourselves, increasing these payments more than twenty-fold would never have occurred to anyone.

To make an important distinction: I am not against this proposal. If I were a member of Congress, I would vote, without hesitation, to approve it, and encourage my colleagues to do likewise. I think the families of those killed in this senseless war deserve everything the government can do for them. Although this is the right thing to do, this is not a principled action; it is sheer cynical calculation of the highest order, and that stinks to high heaven. You don’t do the right thing to make people like you; you do it because it’s right. Surely the party of moral crusaders, the party of values, principles, and ideology understands that.

To reiterate, if this is the morally right thing to do--and I believe that the families of those who make the ultimate sacrifice for their country deserve more than a mere pittance from the government that put them in harm’s way--it should have been our policy from the beginning, not done subject to the whims and vagaries of public opinion. And for those who held the position that, because they signed up for whatever might happen during their terms, our soldiers deserved not the least consideration for whatever fates might await them in this adventure to turn around and offer their families this blood money as if they were somehow being magnanimous makes my blood boil.

While we’re at it, we should pay special attention to what these ghoulish bastards propose to do for the thousands who have been blinded, deafened, maimed, lost limbs, and/or sustained brain damage, who may well never be able to work or lead normal lives again. If it's right to pay blood money to the families of the dead, logic and fairness dictate that those who have been broken should get something as well.

Update: As it turns out, they probably won’t get much. Avedon Carol over at The Sideshow points me to an article at Democratic Underground (by way of Heart, Soul and Humor) entitled "Pentagon Says Veterans' Benefits "Hurtful" to National Security." With a nod to South Knox Bubba, all I can say is "Ok, then."

The slow rate of VA spending growth enforced by Bush and the congressional Republicans over the last four years won't cover growing deferred benefits, such as education, housing, retirement, health care and so on, promised to current service members or that are supposed to be available for new enlistees.

Slow spending growth isn't even the biggest immediate problem for vets. In the last two years, Bush ordered the closing of several VA hospitals in different parts of the country, pushing waiting lists for medical services for veterans as high as six months for about 230,000 vets. These closings followed in the wake of the congressional Republican's concerted drive in 2003 to cut $15 billion from VA spending over the next ten years.

And, since his razor-thin victory over Senator Kerry and his claim of "political capital" to rule as he sees fit, President Bush, according to an Associated Press story about a leaked White House Budget Office memo, plans to slash veterans' health care benefits by over $900 million and veteran's housing programs by $50 million in 2005 alone.

The whole article is a must-read, especially for anyone out there who thinks the Bush administration gives a rat's ass about veterans and their families.

Further Update: Keeps getting better and better. Salon's War Room reports today that not only is this a new idea for Bush, but it's one his administration had previously opposed. Beyond that, in 2003, the administration objected raising the death benefit from $6,000 to $12,000. They did not think it was a good idea, let alone necessary. Now, they'll try to use the issue to show us how moral they are, and how deeply they feel the pain of those who've lost loved ones in Iraq and Afghanistan. What filthy souls they have.

posted by David at 2/01/2005 11:06:00 AM ::

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