My question to Max comes from pages 18, 19, and 44. The GOP has as one of its principles that no one should pay into the system more than they get out with page 18 showing the implied rate of return for different cohorts over time. Max’s analogy to “Little Nell” talks about how someone born in 2000 is likely to see a 33% cut in benefits if “Model 2” is adopted – and yet Little Nell will still be paying the same payroll contribution rate as middle-aged folks like myself. Since Bush’s “math” this morning just wore my brain to shreds, I’d love to see Max’s estimate of the return Little Nell would get if President Bush’s ideas are actually implemented (anyone else as wise as Max is welcomed to do the math). I suspect it would be negative, which violates the GOP’s own stated principles.
Max also requests that we try to find out errors in this GOP document. Have fun!
Update: Max has busted this GOP Powerpoint as being in many ways taken from an Andy Biggs Cato Powerpoint. Andy’s 2002 version had a cartoon quality character to his slides, which IMHO is more honest given the cartoonish “analysis” in these presentations. My favorite from Andy’s slides: the Cato version of a prefunded system allegedly pays return that are four times the returns of the current (prefunded defined benefits plan) system in place since the 1983 Soc. Sec. reforms. OK, $100 government bond in my right pocket pays a higher return than a $100 government bond in my left pocket in Andy’s world. But then Andy has had a long history of making bogus claims over there at Cato.