The pending Presidential election is forced to compete for news with a troubled economy, one deemed by sundry pundits, scholars, economic doom sayers and prognosticators to range in degree from severe recession to global depression. We are told by socialist leaning "experts" that capitalism has failed of its own flawed premise — by the right that government interference is the proximate cause — while the rest of us hope the solutions do not get sidetracked by overzealous legislators more interested in assigning blame than finding a cure.
The United States will go to the polls to elect a new president on Nov. 4. Before we go to the polls, let's have a conversation about how our lives here in mid-Missouri will be impacted.
Tell us: How will Columbia be affected by the next president?
Submissions will be printed at ColumbiaMissourian.com and in the Missourian during the week of Oct. 19. All we ask is that you sign your name and provide a telephone number (not printed; just there in case we have a question).
To send in your submission:
Postal delivery: Letter to Editor, P.O. Box 917, Columbia, MO 65205
Actually, the catalyst for the economic crisis, the housing market crash, should have been easy to forecast. In my memory, to qualify for a home loan, one had to show steady employment, enjoy reasonably good credit and, except for certain G. I. loans, provide 10 to 20 percent in down payment. However, in the late 1990's, with both political parties sharing culpability, the American Dream of "everyone a home owner" was foisted upon the lenders with little consideration of the consequences.
The government's "leveling the playing field" by requiring loans be granted to those without requisite qualifications, waiving down payment and, in some instances, lending up to and including 125 percent of the purchase price should have flagged someone's attention. One would believe that a more prudent administration and legislature might have foreseen that opening the piggy bank to those previously considered poor credit risks was an invitation to disaster.
The collapse of the housing market and its attendant effect on credit availability has caused massive unease on Wall Street as seen in the downward spiral in the stock market. Accordingly, when the government creates a financial snafu, that same government hits on the taxpayers for the cash to ease the credit crunch. Historically, with or without the infusion of taxpayer money, the market would have corrected itself — the action of Congress may or may not speed the process.
One of the more troubling aspects of the stock market turmoil is seen in the "I told you so"'s of elected officials, editorial commentary and letters/blogs praising the decision to deny social security reform by partial privatization. Citing the current stock market woes, the critics pointed out almost gleefully that this money lost in the stock market would have been devastated retirement accounts, particularly those of senior citizens.
That these fault finders either failed to do their homework or are engaged in a deliberate deception is apparent to anyone who has studied the proposal. The first deception is the notion that seniors would be adversely affected — the reality is that persons over 50 years of age are not eligible, instead they remain vested in regular social security.
The partial privatization plan presented by President Bush was identical to that of the commission chaired by former Senator Moynihan of New York and supported by former Senators Bob Kerrey and Bill Bradley of Nebraska and New Jersey respectively — three Democrats. In giving up a portion of the social security contribution to establish a private account for individual investment, the younger worker had a nest egg separate from social security, one that could be passed on to his or her heirs.
Contrary to the misinformation provided by the plan's opponents, each worker had the option of participating or of remaining invested in the traditional social security net. Additionally, those electing for private accounts could choose to invest in savings bonds, government securities, or the stock market. Regardless of the investment option selected, any choice would out perform social security over the long haul.
Partial privatization provides a dual benefit to younger workers — the remaining portion as a safety net plus the individual account of their own. The opponents of private accounts mounted a spirited and decidedly disingenuous campaign against them by insinuating that American workers were not capable of managing their finances and by enlisting the aid of the AARP whose age 50 plus membership really had no dog in that fight.
Oddly enough, the leading edge of the resistance is found in the Democratic Party which likes to portray itself as the champion of the working man and woman. The late Senator Moynihan may have provided insight into this enigma when he was asked why liberals were reluctant to alter social security so that it guaranteed wealth as well as income. He jokingly responded, "It is because they worry that wealth will turn Democrats into Republicans."
J. Karl Miller retired as a colonel in the Marine Corps. He is a Columbia resident and can be reached via e-mail at JKarlUSMC@aol.com.