Word: trustingly
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Even the generally forthcoming Buffett can be criticized for hiding some things. While Berkshire's accounting record remains spotless, Buffett, 74, has asked shareholders to trust him on the issue of succession. Who will run Berkshire when he moves on? The stock gets a special lift from Buffett's marquee leadership, yet investors must live with a lack of transparency in this area, having only the prognostications of outsiders to rely on. Reportedly on Buffett's short list of CEO candidates is Ajit Jain, who runs National Indemnity Co. and is the only Berkshire unit manager that Buffett speaks...
...just consider a few. Most importantly, there is no crisis in Social Security. In the early 1980s, Congress made a series of adjustments to Social Security, raising both payroll taxes and the retirement age. Since then, Social Security has run a massive surplus, invested in a Trust Fund of iron clad Treasury bonds that will be tapped in 2018 when the Baby Boomers cause Social Security to run a deficit. Social Security actuaries predict that the Trust Fund will be adequate and will keep Social Security solvent far into the future...
Diverting payroll taxes towards privatization without drastically cutting benefits to current retirees will only increase the gap between tax income and entitlements that the Trust Fund will eventually be called upon to cover. Simply put, our generation will not only lose the benefits of Social Security but will be forced to pay the cost of implementing a worse plan. As workers begin to divert their payroll taxes into private accounts, there will be substantially less government money available to fund pensions. This shortfall means that privatization will cost several trillion dollars to implement, in addition to whatever deficit Social Security...
Social Security will begin running a deficit in 12 years—that is, it will begin to spend more money on benefits that it brings in through taxes. At that point, in order to continue to pay promised benefits, it will have to draw on the Social Security Trust Fund. Opponents of reform, make much of this Trust Fund, suggesting that it guarantees Social Security’s solvency until 2041, or even 2052 according to some projections. Even if true, that should offer cold comfort to Harvard students who would still be several years from retirement and facing...
...situation is even worse than that, because we cannot rely on the Trust Fund to preserve Social Security. After all, it was former President Bill Clinton—not President Bush—who pointed out in his budget in 2000 that “These Trust Fund balances are available to finance future benefit payments…but only in a bookkeeping sense…They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed...