2005, February 04: CNN/Money - "Gross criticizes Social Security plan"

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Dear friends of Liberty Mulch,

This social security debacle is heating up to such a degree that Condoleeza Rice will soon be warning us of a looming mushroom cloud of debt. While Bush makes his stump speeches and blacklists anyone from attending who has ever criticized his policies, the insidious forces of the right-wing machine are again working their magic to convince us of this imaginary crisis. No one seems to be mentioning that the tax cuts to the wealthiest Americans that Bush wants to make permanent would supply all the money necessary to cover the shortfall anticipated in, well... 2042? And where is all the surplus SSI money which was amassed over the past 20 years to accommodate the baby boom retirement bulge? It's gone, spent on our perpetual war against terror, and the financial ideology of a man who has never had to make an honest living, who thinks rich people are burdened by taxes yet entitled to subsidies and lucrative government contracts.. And of course, how will Social Security be made solvent if a huge chunk of this fund is is siphoned off for private accounts? It just doesn't pencil out. Even one of the largest money managers in the United States thinks this is a huge mistake, as he states in the CNN/Money article below.

- Sally for Liberty Mulch

Gross criticizes Social Security plan

Manager of biggest bond fund contends individual accounts not the answer, wants deficit reduction.

By CNN/Money > SPECIAL REPORT > Social Security
2005 FEBRUARY 04

NEW YORK (CNN/Money) - Bill Gross, manager of the world's largest bond fund, is criticizing President Bush's plan to privatize part of Social Security.

Gross, managing director at Pimco, called the argument about the solvency of Social Security "silly" and said it was an example of the president not focusing on more important issues, such as the budget deficit.

The president's argument for individual Social Security accounts is meant "to promote an agenda that has little to do with seniors and more to do with Bush, his ownership society, and ultimately his domestic legacy alongside the likes of Ronald Reagan and FDR," Gross wrote in comments posted on Pimco's Web site.

"Without a blockbuster of a program in his second term it is unlikely that Bush can go very far in the history books on the back of a paltry 3 or 4 percentage point tax cut for the rich," Gross wrote.

"Presto!" he continued. "We now have partial privatization of Social Security heading the agenda upon which the president intends to spend his well-advertised political capital."

But while the president says that will help fix Social Security, "the problem has more to do with demographics than the lack of ownership," Gross wrote.

Gross argued that it will take more than individual Social Security accounts to correct a projected shortfall and suggested the government should focus on cutting the budget deficit instead.

"Production can only come from employed workers and so the basic solution is to produce more workers, either through immigration or postponed retirement for the existing work force," he wrote.

"By reducing budget deficits now, and especially that portion of the deficit owed to foreign governments, we would be able to keep more of our domestic production within our borders and therefore available to senior citizens."

President Bush on Thursday kicked off a five-state tour to push his plan to overhaul Social Security, an issue highlighted in his State of the Union address.

While the president offered new details of how individual accounts would work in his address, he did not address many outstanding issues.

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