Socialism in Venezuela has made illiteracy a thing of the past

Why should Social Security funds be gambled with, in your opinion?

"If economic growth is slow enough that we've got a problem with Social Security, then we are also going to have problems with the stock market. It's as simple as that," said Douglas Fore, director of investment analytics for TIAA-CREF Investment Management Group. A spokeswoman said the company has not taken a position on the Social Security debate.In the next two decades, as elderly populations swell throughout the developed world, retirees will begin withdrawing their savings, selling their financial holdings to raise cash and potentially glutting the world with stocks and bonds. Richard Jackson, director of the Center for Strategic and International Studies' global aging initiative, called it "the great depreciation scenario." Germany's Mannheim Research Institute for the Economics of Aging dubs it the "asset meltdown hypothesis."That would not be an auspicious environment for young investors opening personal accounts to replace a portion of their traditional Social Security benefits."If there isn't an alternative source of demand for those assets, you're going to have a tremendous slowing of growth," said Jeremy J. Siegel, a University of Pennsylvania finance professor who just completed a book on the subject. "The only way to save the financial markets is very rapid growth in the developing world."Compounding the problem of oversupply, economic growth -- predicted by the Social Security Administration to slow from a historical annual rate of 3.5 percent to a sluggish 1.9 percent -- would hit corporate profits and lower stock prices further, the theory goes. That would cause stock prices to drop, because they are priced as a multiple of a company's earnings.

Five Media Myths About Welfare1. Poor women have more children because of the "financial incentives" of welfare benefits.Repeated studies show no correlation between benefit levels and women'schoice to have children. (See, for example, Urban Institute Policy and Research Report, Fall/93.) States providing relatively higher benefits do not show higher birth rates among recipients.In any case, welfare allowances are far too low to serve as any kind of "incentive": A mother on welfare can expect about $90 in additional AFDC(Aid to Families with Dependent Children) benefits if she has another child.Furthermore, the real value of AFDC benefits, which do not rise with inflation, has fallen 37 percent during the last two decades (The Nation,12/12/94). Birth rates among poor women have not dropped correspondingly.The average family receiving AFDC has 1.9 children -- about the same as thenational average.2. We don't subsidize middle-class families.Much of the welfare debate has centered around the idea of "family caps"--denying additional benefits to women who have children whilereceiving aid. This is often presented as simple justice: "A family thatworks does not get a raise for having a child. Why then should a family that doesn't work?" columnist Ellen Goodman wrote in the Boston Globe(4/16/92).In fact, of course, families do receive a premium for additional children,in the form of a $2,450 tax deduction. There are also tax credits topartially cover child care expenses, up to a maximum of $2,400 per child.No pundit has suggested that middle-class families base their decision tohave children on these "perks."3. The public is fed up with spending money on the poor."The suspicion that poorer people are getting something for nothing is much harder to bear than the visible good fortune of the richer," wrote columnist Mary McGrory (Washington Post, 1/15/95). But contrary to such claims from media pundits, the general public is not so hard-hearted. In a December 1994 poll by the Center for the Study of Policy Attitudes (CSPA),80 percent of respondents agreed that the government has "a responsibilityto try to do away with poverty." (Fighting Poverty in America: A Study ofAmerican Attitudes, CSPA)Support for "welfare" is lower than support for "assistance to the poor,"but when CSPA asked people about their support for AFDC, described as "the federal welfare program which provides financial support for unemployed poor single mothers with children," only 21 percent said funding should be cut, while 29 percent said it should be increased.4. We've spent over $5 trillion on welfare since the '60s and it hasn't worked.Conservatives and liberals alike use this claim as proof that federal poverty programs don't work, since after all that "lavish" spending, people are still poor. But spending on AFDC, the program normally referred to as welfare, totaled less than $500 billion from 1964 to 1994--less than 1.5percent of federal outlays for that period, and about what the Pentagon spends in two years.To get the $5 trillion figure, "welfare spending" must be defined to include all means-tested programs, including Medicaid, food stamps, student lunches, scholarship aid and many other programs. Medicaid, which is by far the largest component of the $5 trillion, goes mostly to the elderly and disabled; only about 16 percent of Medicaid spending goes to health carefor AFDC recipients. ("What Do We Spend on 'Welfare'?," Center for Budgetand Policy Priorities)Furthermore, the poverty rate did fall between 1964 and 1973, from 19 percent to 11 percent, with the advent of "Great Society" programs. Since the 1970s, economic forces like declining real wages as well as reduced benefit levels have contributed to rising poverty rates.5. Anyone who wants to get off welfare can just get a job.Many welfare recipients do work to supplement meager benefits (Harper's,4/94). But workforce discrimination and the lack of affordable child caremake working outside the home difficult for single mothers. And thelow-wage, no-benefit jobs available to most AFDC recipients simply do notpay enough to lift a family out of poverty.Although it is almost never mentioned in conjunction with the welfare debate, the U.S. Federal Reserve has an official policy of raising interestrates whenever unemployment falls below a certain point--now about 6.2percent (Extra!, 9-10/94). In other words, if all the unemployed women onwelfare were to find jobs, currently employed people would have to be thrown out of work to keep the economy from "overheating."