With apologies to the Beastie Boys, Obama is crafty, he gets around...

Whenever he says something with confidence, it's because he knows he cannot be pinned down on it.  In his interview with O'Reilly he makes the statement that Social Security is in better shape than Citibank.  This may be a true statement, but that's like saying someone with terminal cancer is in better shape than someone having a heart attack.  The death of the latter may be imminent, but is not certain; the death of the former is certain but not imminent.

His opposition to privatizing Social Security is yet another indicator that Obama doesn't get the challenges that face his would be constituents.  He views the issue as binary - we either cut benefits or we raise taxes.  The baby boomers shudder at the thought of reduced benefits, while younger people shudder at the thought of higher taxes (if only some of the 45 million babies aborted over the last 36 years were alive and in the work force, maybe we would have a bigger tax base...but I digress).

Social Security is facing the same problem that many coporations are facing. Defined benefit plans are attached to increasing life spans and younger retirement ages, and the strain is breaking the back of many companies.  For example, I work for the same company as my father.  When he started working for this company in 1965, the actuarial tables predicted a life expectancy of 72 years, meaning that when someone retired at age 65 they would live on average for 7 years.  However, my father retired at age 51.  He's already been drawing his pension for 14 years, and God willing, he will for at least another 35.  But this illustrates how the burden of the defined plan has put extreme pressure on corporations and the government alike.  The automotive industry is under increasing pressure from it's pension burdens; the steel industry is being crushed by it's obligations, several airlines have turned the pensions over to the government to manage (for a fee, of course), and Social Security will be out of money by 2045 (this assumes there's enough money in the treasury to pay IOUs taken against the Social Security pool).

There is a third option that the left ignores, I believe, because it removes government from the equation  That option is to priviatize Social Security.  There's no easy answer to this one, but it is certainly not an unsolvable problem.  You would have to have an economist work the numbers, but one way is to divide the labor force into three segments. 

• The first, either retired or retiring within say, 15 years (so age 50 or older), will retire under the current defined plans.  No changes, no need to get all worked up over lost benefits. 
  
• The second group would be people who are under age 50 down to age 30.  The employer contributed portion of their social security taxes will go to the current social security pool, for which they will be eligible for a reduced benefit when they retire.  Their personal contribution (the FICA entry on the pay statement) will go to a private account, which is theirs and theirs alone, to be distributed upon reaching age 65.  Pending an analysis of benefits, those close to 50 may have more of their contribution go to Social Security since their retirement plan may have been more reliant on it than those closer to 30.
  
• The third group - those under 30 - will have both their contributions and those of their employer put in their private fund.  For these people, slated to start turning 65 years old in 2043 (two years before the current predicted insolvency of Social Security), their retirement fund is theirs only, meaning that the government has no obligations to them upon retirement.
  

This is analogous to the cash balance pension plans many large companies are moving to today.  For all groups the 401K contributions should remain as they are, with a reindexing for inflation every 5 years.  To further increase the individual's participation in their retirement future, restrictions on income for Roth IRA contributions should be removed. 

Will McCain try to reform Social Security?  It will be an uphill fight, and I am not optimistic the needed consensus will be gained in the next four years.  However, because the left wants to make us all slaves to the government, we won't see any of this happen if Obama wins the election; remember, his is painting a picture of a system that is "in better shape" than failing and struggling financial institutions.  The more we all struggle the more clamor there is for government intervention, and the liberals will be there to answer the call for more government.  Of that you can be certain.

One of the things liberals are good at is saying one thing and meaning another.  Like when they say "we shouldn't be talking about experience in this election - we should be talking about the issues" you know they don't mean it.  How could they?  The only thing they are weaker on than the experience of their candidate is his stance on the issues.

Let's pick just one.  Taxes¹ -  Obama wants to have an exemption on the estate tax of $3.5 million and top rate of 45%.  McCain by contrast wants to have a $10 million exemption and a 15% top rate.  Proponents will say this only targets the rich, because after all, who has an estate valued over $3.5 million?  The problem is that estates are comprised of wages and goods that have already been taxed.  But the government wants to stick it's hand in the till one more time.  What's great is if you die and pass it on to someone else it can get taxed a third time!  At least McCain wants to minimize that. 

Obama wants to tax long term capital gains and dividends at 25%; McCain at 15%.  Who chould care about this?  Anyone who plans on retiring.  Retirement portfolios almost always have a capital gains eligible component in them, so if you are retired, or retiring soon, this one will impact you. 

In terms of tax cuts, McCain wants to double the dependent exemption from $3500 to $7000.  This will be a huge boon to people of ALL classes (at least those that have dependents) - and will effectively make lower income families almost exempt from paying income tax.  Obama wants to give a $500 tax credit to each worker.  Thanks for (next to) nothing. 

More importantly, McCain wants to cut the corporate tax rate to 25% from 35%.  Talk about a boon to the economy!  This means more money in the bottom line for investors (again, anyone with a 401K will benefit from that!!), more money for capital investment (which means more jobs!) and more money for research and development into new technologies (like alternate fuels maybe?  Just a thought...).  In addition, when you remove the tax incentive to relocate job to other countries, more jobs will stay here in the US!!  Obama, on the other hand, wants to eliminate tax breaks for corporations that move jobs overseas and give them to companies that create them here².  He doesn't talk about the fact that often times these are the same companies, and that global growth is inevitable, and with America's tax rates the second highest in the world jobs will continue to flow out whether we like it or not.

Popular belief holds that the Great Depression began with a stock market crash in 1929 and that Franklin Delano Roosevelt pulled us out of it.  The truth is that anti-trade talk caused the stock market crash, and the Smoot-Hawley Tariff act sent the economy over the edge.  In the midst of the Depression when the market was actually showing signs of recovery, Roosevelt raised taxes, which prolonged the misery.  Had World War II not come along, the Depression could have lasted well into the 1940's.

Fast forward to 2008.  We're exiting a period of housing depreciation (caused largely by economic policies of excess liquidity implemented by Alan Greenspan and made worse by Bernake, and brought home by banks eager to make a fast - but risky - buck and people either uneducated about that risk or too eager to overextend their ability to repay their loans) and a weak dollar.  We're showing signs of recovery.  Do we really want a president who will reverse trade agreements, penalize companies that do business globally and raise taxes?  As Fred Thompson said on September 2nd, Obama doesn't want to take water from your side of the bucket, he wants to take it from other side.  If you still don't get the picture, go get a bucket and give it a try.  See how it works out for your side.

So I say again - do the libs, who favor tax-and-spend, really want to discuss the issues?

^{1Source: Forbes, June 2, 2008 p 103
2Obama's nomination acceptance speech, August 28, 2008}