McCain says Social Security is a "disgrace."

WASHINGTON - At a town hall meeting in Denver, Colo., on Monday, Sen. John McCain, R-Ariz., said "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."

Asked about the comment the next day (Tuesday), the Republican presidential candidate told CNN: "On the privatization of (old age and retirement) accounts ... I would like to respond that I want young workers to be able to, if they choose, to take part of their own money, which is their taxes, and put it into an account with their name on it. Now that's a voluntary thing; it's for young people; it would not affect any present day retirees or the system as necessary.

"So let's describe it for what it is. They pay taxes and right now their taxes are going to pay the retirement of present-day retirees. That's why it's broken; that's why we can fix it."

Jared Bernstein, an analyst at the Economic Policy Institute, said he is shocked by McCain's statement.

"That is truly an amazing quote," Bernstein said. "It's like saying, 'I just found out that taxes come from people. ... That's a disgrace.' It betrays a really quite scary lack of knowledge about basic government. I know he's not into this kind of stuff, but it would be hard not to know about the intergenerational financing of Social Security."

Who's right?

--- Douglas Turner

Comments

[Jim Ostrowski]

McCain finally said something I agree with. Amazing.

The welfare state is based on simple fantasy that politicians have conned people with for 75 years: you can get something for nothing. The greedy voters buy that line every year.

The leisure of the retired is paid for by the working class busting their rears 24/7. Enjoy!

[Barton Keyes]

Beware of politicians offering simple solutions. They are almost never that simple.
Yes, current workers are paying for the Soc. Security benefits of current recipients. It has always been so. It is not news. It may or may not be fair but that is how it is.
And because there are now only 1 to 3 workers for every Social Security recipient and there will soon be only 2 workers for every recipient, the Social Security sytem is headed toward insolvency.
So if you take even a small amount from those 1-3 or 2 paying workers and divert it away from paying the benfits of current recipients you are going to cause at a minimum a sort term problem: there will be less social security tax money going to finance the payments to current recipients. That will mean the government will have to reduce the benefits to recipients sooner or get money from other accounts to finance current benefits sooner than currently estimated.
Privatization may or may not help Soc. Security in the long term. It could do that if the returns are as good as promised. But in the short term it could easily cause a cash flow problem.
And that is what McCain is conveniently not telling the public.
It is another example of a politician solving a problem by optimistic projections.

[Texas Kid]

I have always wondered what the big deal was with "privatizing" social security. The big fears have been:

(1). It will wreck the current system. The current system pays you a death benefit of $250 if I'm not mistaken. What it will wreck is the comfort zone of those retirees now who are getting a whole lot more back in monthly checks than what they paid in. I'm sure if 30% of my money will be invested, I'm not putting it into high risk stocks, why not into US treasuries or Municipal Bonds. This argument is all scare tactics because some people like getting more than they ever put in.

(2). If you to pass on around age 70, your family gets $250...wow! With 30% in your private account, all the years you worked and put into the system the 30% goes to your family, not to someone else lucky enough to be living at 85. tell that to the current retirees and they're not interested in you..that's the bottom line. And your politicians will cater to the biggest voter bloc so they don't care about you. Look at their "efforts" in dealing with the gas price crisis today.

I'd rather be the caretaker of my own money. That's a texas attitude. I notice Buffalo folks like Albany aqnd city officials to control their money. At least we don't have a state income tax here, I get to keep more of mine and I'm not all that worried about other people's issues or comfort needs at my expense. Sound like your younger folks are having the same feeling too as Buffalo has seen them leave in droves.

[Jim Ostrowski]

Let's not overcomplicate this.

FDR got elected by promising that we would pay for socialism security.

He and his ilk gave our money away and got away with it until "small government guy" Reagan jacked up working class payroll taxes.

Thanks Ron! Thanks Franklin!

[Al]

John McCain's view, as with his campaign resting on his economic platform and experts, is DOA. I do not really think he is serious about becoming President. The argument about privatizing social security has been around a long time and is now a dead-end political track. Touching it is the so-called third-rail of politics. For remedies, actually there is none that any politician of any electability will promote. It would mean a whole-sale change in the nation's entire capital system. But it will come down to that eventually. Just not now. John McCain keeps saying, about Social Security, about the nation's deficit, about energy, that he "can fix it."
McCain is a plumber without tools. He is a legislator and a war hero. But his "fix-it" remedies show he is eminently unprepared and unqualified to be up to the task. Unfortunately, the bills do have to be paid, and the taxpayers will pay them, big-time.

[carl]

Al
I think you got the wrong guy' because when it comes to taxes Obama will shiver the timbers of this country, and exactly what is he qualified to do ?
Doug Turner''what about an article on the Bush FISA bill ? For over a year the resident lefty libs. have been ripping Bush apart on this bill, now Obama agrees to it. What happened to his claim to support a filabuster ? When Obama returns from Iraq do you think we will then call him Iraq Obama ?

[MS]

it is a disgrace and the fact that the government has dipped into the funds and has blown it away on waste makes it even more of a disgrace. I will not be planning on getting social security 30 years from now so I will work on my own retirement fund.

[Al]

carl, I guess you don't feel pain at the gas pump because Phil Gramm (another Dr. Phil) tells us this is a "mental recession" and people are "whiners." John McCain's proposals are DOA. He lied when he said he would balance the government budget by the end of his term. Obama is showing he is alert to the challenges, and is the best choice even though he does not have the proven record. No one of any of the candidates has shown they can handle an out-of-control government. The majority understand the GOP burned out its welcome. You sound like a polar-opposite "whiner" from the other side. That disease is catching.

[Carl]

Nope' no pain at the pump for me,,I don't mind paying for a full size SUV gas is a deal here, Many in the rest of the world pays at least double, but I guess much of that goes for taxes to fund their 3rd. rate health care. I'm putting in a 1,500 gal. underground tank to fuel all my toys. Obama is going around sayimg were in a recession''we'll were not, our unemployment is at full level at 5 1/2% if we start drilling gas prices will come down and our economy will be just fine. People wait in lines waiting for $800.00 gadgets like I phones and video games, restaurants are full ball parks are packed, everybody I know is doing great. The Dems. are whiners, were in a little slow down but just a little speed bump, keep listening to Obama' he thinks the world is coming to an end. You hopeium addicts are hell bent on ruining this country aren't you ?

[carl]

Hey Al what do you think about Obama supporting the Bush FISA bill? Weren't you one of the leftys that ripped Bush over this bill ? Didn't Obomber say he would support a filibuster against it ? WoW what a flip flop or as the left would say a shift.

[Al]

carl, you're statements are summarized by Marie Antoinette's: "Let them eat cake." Aristocracy meets sharp steel. Let's "hope" Obama brings common sense to what you set in place.

[carl]

Al
It's you HOPEIUM addicts, the uneducated that is the core of Obama supporters, the 50% that contribute only 3% of all money collected by the IRS, Obama wants to hammer the top 10% that pay over 70% and people like you are loving it''' you need to educate yourself Al.

[Al]

carl, read the news. The addiction is to foreign oil sponsored by the GOP, there is no addiction to hope. Hope is one of the three great virtues, rather than the vices you endorse. Yes, you will pay more in taxes. That's a pretty sharp blade, isn't it? I said "your bills have to be paid, and the taxpayers will pay them, big time." Especially higher income bracket earners. Read the I.R. Code, and again when it is amended. The only sound I hear from you is whining.

[CARL]

AL
I'VE BEEN SUPPORTING SLUGS ALL MY LIFE WITH MY TAXES AND YES I PAY MORE THAN MOST PEOPLE MAKE IN A YEAR. THAT DOSEN'T BOTHER ME, I DON'T WANT MY COUNTRY HIJACKED BY THE 50% THAT DON'T CONTRIBUTE,, THE OBAMA SUPPORTERS,,,,THE UNEDUCATED, THE MINDLESS TAKERS OF SOCIETY, BUT LIKE GEORGE CARLIN SAID TO BEAT THE POLITICANS YOU HAVE TO HAVE A STASH OF F YOU MONEY. MY LIFE WON'T CHANGE BUT ALOT OF OTHERS WILL''FOR THE WORSE,,,OBAMA, PELOSI,REID,MICHAEL MOORE, AL GORE,ARE THESE YOU WANT TO RUN THIS COUNTRY ? ARE THESE THE TYPES YOU RELATE TO ? ARE THESE YOUR TYPE OF PEOPLE YOU LOOK UP TO ? OBAMA,REID, PELOSI WAKE UP AL, EDUCATE YOURSELF.

[Al]

In caps yet. That's Big Time Whining.

[BobbyCat]

John McCain has admitted, on the record, that he doesn't understand economics. That's no crime. Neither do a lot of people. His campaign co-chair and fiscal advisor and former Senate collegue, Phil Graham made sure that the commission that oversees the oil market let the market run wild, leading to this gas crisis. Graham's wife ran the commission with laizzae faire. One could argue that McCain's top advisor was a key player in the gas crisis that is spiraling this nation into recession at least and depression at worst. Banks are beginning to fail, Fannie Mae, Freddie Mac, et.al.

Then Graham has the audacity to crack that we are a "nation of whiners". Maybe Graham is blind and doesn't see that some of the nations bedrock financial institutions are teetering, because of his incompetance or malfeasance or both.

This is McCain's clueless choice for a financial guru. God help us.

As we speak, this nation is at serious risk. Unless of course you live in Carl's neighborhood - where the rainbow ends and gas is 35 cents/gal. and life is just hunky-dorry. Where did you say you live, Carl? Was it Gasport or Oz? Nevermind, we can just follow the yellow brick road.

[Art Klein]

There must be a lesson in all this. This man has been in the senate for 26 years and he just learned that Social Security is a mess. what was he doing playing with his rubic cube?

Our own Senator Moynihan was in the senate at the same time and carefully explained to the senate and the nation the many pitfalls of Social Security and even nominated some long and short term cures. Nobody listened the Senate took no action and the problems continue.

But Moynihan kept advising that small incremental steps were the best cures. the Republican Revolution exploded and everyone wanted to turn Social Security ove to Wall Street who "knew how to manage money better." Well now that myth has imploded we have to wait for the next administration to resolve it.

But since McCain admits not understanding economics and Obama hasn't developed any theories like everything else a crash will occur then a bunch of inept jerks will attempt to glue it all back together.

Were the folk back in FDR's time that much smarter or has all this pollution rotted away our reasoning powers?

[carl]

Yes McCain did say the economy wasn't his strong suit. I'm hard pressed to think of any Presidents who understood a complex economy. Fannie mae and freddie mac guarantee loans thru FHA, All lending institutions are forced to lend in areas where they would rather not. Minority lending was pushed by the The Dems. if you had a pulse and were a minority there was some program out there that could get you in a house. Do you think for one minute any bank would want to invest in the East Side ? Of course not but they are forced to, under penalty of the law. Banks have a built in loss margin and hope the FHA guarantee system evens out their loss which usually results in a net, net loss. The govt. is responsible for the majority of bad loans and now the Feds. will have to bail themselves out. And yes the Dems. are whiners like I posted earlier AT&T will sell over a billion $ in I phones this weekend, hundreds of thousands are camping out in tents to be first in line. Baseball teams recorded highest attendance records in history, $80.00 ticket $8.00 hot dog,,$10.00 beer, last weekend thousands of boats on river and marinas were jammed, I saw twim 300hp yamahas pulling a kid on water skis, Go to EB greens tonight,,it will be packed so will every other bar in town kids spending hundreds each. Look at the sneakers all the kids are wearing $150.00 air jordans and they can't keep them in stock. Please stop with the gloom and doom''Hell even Michelle Obama orders Krystal champagne 1972 at $950.00 a pop. And here's the tip of the day 2008 GMC yukon flex fuel 0 down 0 interset, cheaper than a econo box, work the numbers, cheaper in the long run and much much safer,and what a ride'''

[Texas Kid]

Social security has been in trouble in the long term perspective for years. Congress knew it and did nothing. Both parties using any minute change as fodder for their constituents to not vote for the other party. Let's face it, those receiving it now are getting a lot more out of it than they ever put into it. Now that the folks in our 20's to 50's are looking out 20-30 years, we don't feel comfortable with what we see. I can guarantee you a lot of people over 65 right now would never agree to any changes in Social Security because its "their" money. As for privatization, why is evryone thinking Wall Street stock would be the only option. US Treasury Bills, Municipal Bonds (Stay out of Buffalo's), Money Markets could be viable alternatives also. It's about choice, something, I'm afraid you've grown unaccustomed to in Buffalo as politicians and judges and "anti" this or that groups decide what's best for you. The reforms needed now are going to be more painful when they really didn't have to 20 years ago.

[Al]

We all now know, generally, there is no ordinary solution to the entire Social Security program. The younger generation simply cannot pay for it over the decades ahead. Patrick Moynihan did his part to alert the public and his colleagues. I look forward to the crisis that is going to come because it is only by such a kick-in-the-pants that actions will be taken.
That also now means a change in the economic system. The system of fiat currency will have to go by the boards. That is going to shock many wealthy people when accountants will have to be re-trained, and attorneys will have to learn new economic language. Ron Paul has always said the currency must be anchored to something of value. Indeed it must, and will. But not to what the wealthy are promoting. The younger generation cannot support that. Better have Plan B ready.

[Celtic Tide]

A few things in response to this post:

1. If your like me (early to mid thirties) you probably paid into social security to the tune of about thirty to fifty thousand so far. I've talked w/people who say they've never counted on it and don't think they'll ever see it and don't really mind. Not me, the way I see it, it's a debt that is owed to me, better pay up when it's due, no excuses. I'm still preparing w/my 401k but I'll be looking for that cash when I live up to my end of the bargain.

2. Where is John McCain quoted as saying that he "just found out" about this? There is no news here, just some supposition by an economic analyst about when John McCain found out there was a problem w/SS. The news has been a little slow the past few weeks but sheesh; dig a little deeper will ya?

[Barton Keyes]

The mortgage loan crisis was not caused because the banks were required to make loans to unqualified people. People and financial institutions gave money to unqualified buyers because they could make huge profits doing so. And the lenders were able to make those profits because so many parties got a cut in the pie while government regulators were unable to catch on because of cut backs.
The the house appraiser lied about the value of the home because he got his cut. The lender misrepresented the value of the home and fudged the qualifications of the buyer because he got his bonus for closing the deal, and was able to pass on the risk to another company. The buyer didn't look too closely at the mortgage because he got his dream house. The other company repackaged the bad loans into securities and sold them to overseas buyers who were assured the securities were safe and made his profit. The acounting firm made those assurances of safety because they got their cut. And the overseas buyer was happy so long as the housing boom was going strong and they kept getting their dividends.
Then the bubble burst and no one was happy.
It was greed all up and down the line, not government pressure to lend to the poor or minorities. It greed pure and simple.

[carl]

Barton Keyes
It's obvious you know little about the subject. Anybody that usd FHA, fanny mae or freddy mac were low end buyers. Prices in WNY didn't drop like other areas in the country where 30 to 50 % is the norm. If you bought in places like Vegas in 2005 and paid $600,000 today it may be worth $300,000, people are just walking away, McCains plan wants to not cover speculators who made fortunes in boom times. You have to keep in mind that 96% of home owners are paying their mortgage on time. Studies show 80% of those in trouble lied on the bank application and most were already in default before the original interest rate was raised. Most lending institutions would make deals with homeowner and keep interest rate at original rates but that wasn't good enoungh they stopped paying because of all the equity they lost and would never catch up. As far as forced lending yes,,,it happens everyday and make up the majority of loans in default, check the law review see where they are. You need to do your homework and not just spout out non sense.

[Hank]

Barton Keyes says it was "greed pure and simple." He is correct. Angelo Mozilo of Countrywide Financial was caught sending an email as a "reply" to a mortgagor seeking assistance which showed the out-and-out greed attitude. The greed was so thick banks are suing other banks (like M&T Bank suing Deitsche Bank) for alleged fraud. This is just a CYA tactic for shareholder lawsuits. To put it politically, it was caused by the GOP who always, always want to privatize profits and socialize costs.
And engineered by none other than the twin terrors, "Dr. Phil" Gramm, and his wife.

[BobbyCat]

Carl,

Barton Keyes hit the nail on the head. Greed ran the show and everybody got his cut.

Why do you make personal attacks on people like Mr. Keyes who are trying to make legitimate points? If you disagree, you state your case like an adult, not some petulant high school punk hurling insults with a smart mouth.

By the way, It's YOU who apparently doesn't know the business. FYI - Mortgage buyers don't walk into a Fannie Mae or Freddie Mac office seeking mortgages as you suggest. Do your homework, kid.

As I told you before, talking with you is like sitting next to a bum on a bus. Everybody holds his nose or moves away.

Enough already with the smart mouth. If you need to throw smarmy insults, maybe the 'Twentysomething' blog will tolerate your racist, right wing, condescending crap, but leave these adults blogs for adults.