Most Helpful Customer Reviews
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36 of 43 people found the following review helpful:
5.0 out of 5 stars
Excellent antidote to scares and schemes., May 2, 2000
This book is a very welcome antidote to claims that Social Security is fiscally unsound and would well be privatized. The authors, economists, cite relevant facts to support their cogent arguments. The usefulness of this book in making clear some major Social Security issues compares very well with books by Robert Eisner (Social Security, More Not Less, and The Great Deficit Scares: the Federal Budget, Trade and Social Security) and with Countdown to Reform, by Henry Aaron and Robert Reischauer. Baker and Weisbrot's book also has valuable information and arguments on health care and other important issues.
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39 of 48 people found the following review helpful:
5.0 out of 5 stars
Don't FIX what ain't BROKE!, July 23, 2001
By A Customer
Social Security PRIVATEERS tell us that in 2029.or 2032...now 2050 (notice that the date has to be constantly readjusted BACK every year) it is "calculated" by a Government advisory commission that Social Security won't have enough income to cover more than 75 percent of the benefits it must pay to aging baby boomers. But the authors point out, the specificity is illusory, all lever-pulling and smoke-blowing from the Wizard of Oz. The projections aren't economic but actuarial extrapolations based on assumptions that the all the actuaries know are fictitious at best. Tweak them ever so slightly--lift real wages by a quarter- or half-percent per annum, or immigration by a little--and the so-called "crisis" disappears entirely. But according to the apparat-niks at the CATO Institute and the attack dogs at the OUT-Fox-ed Network--you might think the numbers have come down from Moses. They haven't. Social Security isn't in trouble and the criticisms of it are not logical as the authors of "The Phony Crisis" point out. First of all, Social Security is an INSURANCE System, not an "investment". When you factor in the cost of buying disability and survivor insurance and "invest the difference"...the performance "advantage" of equity markets gets razor-thin at best. It turns out that Social Security yields the same as nice safe government bonds, which any intelligent investor knows should form the basis of an investment portfolio. Secondly, the so-called performance advantage of the markets has a whole lot of IFs that the PRIVATEERS conveniently fail to mention. Forget hyper-collapse 1929-style for the moment. Since the Crash of October 1987, U.S. markets have been on a nonstop charge; but if you'd gone into the same markets in 1970, you were worse off by 1980--not to mention where you'd be today if you'd bet on Japan in the mid-eighties or Southeast Asia's "sure thing" markets a couple of years ago. Will you do all right in the long term, as brokers and economists insist? Well, probably yes--but then as Keynes observed..."in the long run, we're all dead." Here's where the income and wealth distribution effects of privatization turn very ugly. For millions of Americans--who bet on Kaypro instead of Microsoft (oops), Pan Am instead of American (sorry) or cattle futures without the skill and connections of Hillary Clinton (smile, please)--life at 75 could mean not "golden years" but working for the folks at the golden arches, or even being out on the street. A FACT of life that the young people who invested in the dotcom bubble are learning the hard way. How many of us realistically will beat the averages? If 120 million workers are turned loose to bet the markets---40 million of whom are marginally literate or numerate--as the privateers recommend---it turns out that most will lose. The mutual fund industry's dirty little secret is that three-fourths of funds under-perform market indexes. Yet such funds have millions of na�ve investors in them; in one recent survey, a majority of mutual fund investors couldn't even distinguish between a "load" and a "no-load" fund. There is another issue, so far undiscussed in the debate. For the first time in nearly thirty years, the federal budget's in balance. But it's in balance because each year the Treasury borrows $80 billion from the Social Security Trust Fund surplus, and "covers" the deficit in the rest of the federal budget. If a big piece of Social Security contributions go into private accounts, the trust fund surplus will disappear and the federal budget will plunge back into deficit. Which federal programs are we supposed to cut to make up for it? If you count the cost of the so-called "free market reforms" over the past twenty years--to a once-viable savings-and-loan system, to Mexican workers and peasants (who've paid for bailouts not once but twice), to the world's poor as they've worked off the global debt crisis. Think about the lives of Indonesian peasants, or Korean and Thai workers today--all set to pay for the "can't miss" marketization of Southeast Asia, just as Americans have so wonderfully benefited from downsizing, capital-gains reduction and globalization. The folks that brought you ALL these disasters are the ones telling us that now it's Social Security's turn to face the "free market reform" just because it doesn't meet the ideological test of a handful of right-wing zealots. Social Security is not a disaster. Benefits are moderately progressive, meaning that the bottom 60 percent of retirees get more back than they paid in. More than 90 percent of us pay into it during our working lives and more than 90 percent of us can count on its benefits when we retire. The minor adjustments that are outlined by the authors are all that is necessary to save Social Security.
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21 of 26 people found the following review helpful:
4.0 out of 5 stars
An excellent and valuable book, December 9, 2004
I have a very high regard for the quality of Baker's and Weisbrot's work and professionalism after reading this book (and subsequently, other publications of theirs). My only complaint is that, having been written in 1999, it is a tad out-of-date and needs revision in order to keep pace with the state-of-the-art anti-social-security spin. For instance, the reviewer from Greenbelt, MD invokes what is now a hoary old chestnut but which was a novel if misguided argument in 1999, that the social security trust fund "does not exist" because it consists of IOUs that the "government has written to itself". In other circles, these "IOUs" are known as treasury bonds and are sold to many other individuals, banks, businesses, and nations, besides being sold to social security beneficiaries by way of the trust fund. These other investors do not doubt that they will be repaid. Why should we?
Furthermore, a blinkered analysis that regards debt instruments such as bonds as fundamentally riskier than "real assets" such as (I presume) real estate, stocks, and other equities is not only to ignore cases where land values crater, stock markets collapse, and companies go bankrupt, but also to willfully invert the relationship between risk and reward. No investment counselor would do this, for instance.
In any event, Baker's and Weisbrot's book illuminates issues like these with a bracing clarity (albeit with a little dryness). I highly recommend it.
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Most Recent Customer Reviews
5.0 out of 5 stars
Impeccable and Typical of the CEPR
There are some reviews listed by people who seem to be under the spell of the illusory "free markets.
Published on June 2, 2007 by Shaun Snapp
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1.0 out of 5 stars
Jeez, I guess these guys got it wrong!
Well, it's now 2007, and there's very little doubt by anyone (even left-wing nut jobs like these guys) that if something is not done, the Social Security system WILL FAIL.
Published on April 25, 2007 by HAD2
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5.0 out of 5 stars
Detailed and comprehensive statement of economic fact
I have often heard the jeremiads about social security that through shear repetition hope to gain acceptance.
Published on November 22, 2006 by Bill Murphy
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1.0 out of 5 stars
Inaccurate tabloid mentality economics
This book is more of a left-wing diatribe then real, intelligent economic analysis.
Published on July 16, 2005 by Josh Kalish
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2.0 out of 5 stars
Save Social Security - by enslaving young people
The authors do a wonderful job of ignoring one vital fact - how Social Security actually works.
Social Security is an intergenerational welfare program...
Published on February 23, 2005 by Peter Simmons, author, The Nex...
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5.0 out of 5 stars
Excellent book and more relevant than ever
Baker and Wesibrot do a yeoman's job of making the issues confront Social Security and the trust fund understandable and accessible to the average reader.
Published on February 5, 2005 by AS Atwood
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5.0 out of 5 stars
The Truth Shall Set You Free
Social Security has benefited tens of millions during its first sixty years. It provides security in an otherwise insecure economy. This is why it has enormous public support.
Published on November 30, 2004 by Acute Observer
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1.0 out of 5 stars
An idiotic or deliberately misleading book - take your pick
I read this book in order to see if it would change my opinion about the status of social security. It does not.
Published on November 5, 2004 by Kevin W. Parker
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1.0 out of 5 stars
Illogical
The authors claim that just because average real return (after inflation) on the stock market has averaged 7% this does not mean you can count on this in the future.
Published on March 23, 2001 by frmokehee
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1.0 out of 5 stars
Social Security is broken for those under 40
The authors fail to show how the current social security system will pay out less than 20% of what young participants (those under 40) contribute over their working careers.
Published on November 6, 2000 by s townsend
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