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Wednesday, April 13, 2005

Mis-calculator misleads Americans on Social Security plan



The Democrats, have resorted to a “rigged” Social Security calculator to low-ball the results of individual Social Security accounts under President Bush’s plan, and have spent $1 million to advertise this dishonesty. First appearing on Senate Minority Leader Harry Reid’s Senate Web site, and later on the sites of other senators and private organizations also determined to mislead and frighten Americans, the mis-calculator is termed the “Social Insecurity” calculator. What appears to be “Socially Insecure” are the Left-wing demagogues both inside and outside the Democratic Party. Once champions of reforming (read “saving”) Social Security, now that Republicans are actually trying to fix it, they can’t change horses fast enough.

The mis-calculator assumes that stocks will produce average returns of a mere three percent above inflation. Historically, stocks produce closer to seven percent. There are other problems with the mis-calculator. It is, in fact, based on a number of false assumptions and deceptive comparisons. The ads being run in support of the faulty figure-outer are hardly more reliable.

FactCheck.org has the details.

2 comments:

Andrew Donaldson said...

From 1967 to 1982, the Dow Jones rose...0%; this is not adjusted for inflation. It rose 0% period. The same goes for the Dow between 2001 and 2005. The NASDAQ has of course fallen since the President took office. I hope we don't run across another ahistorical period in the next century.

James Howard Shott said...

Thanks for stopping by and commenting.

Your assertion about the stock markets is incorrect. The Dow Jones Industrial Average moves every year, mostly up. Today it is ten times its value in 1983. On April 20, 1998 the NASDAQ was at 100.00. Since that time it has risen and fallen, and began its most recent down trend in May of 2000, while Bill Clinton was President. It now stands just a bit higher than 101.00.

But that isn’t the point. Stocks produce an average of 7 percent above inflation each year, as I stated, and the Reid mis-Calculator uses a figure half that to miscalculate its results.