A rant on "generational accounting" RW BS Bloomberg Financial commentary

For those that enjoy financial commentary from the right – and find the WSJ editorial staff not putting out enough product – Ed Ahern’s Bloomberg column is a must read – today it features a guest column by John Wasik , author of "The Kitchen-Table Investor."


http://quote.bloomberg.com/apps/news?pid=10000039&cid=wasik&sid=agdicGIcBiTI

Seems John Wasik sees continued GOP control of politics in the US, since he is worried about funding for Social Security, Medicare and employee retirement and health benefits.

And Wasik seems to say that the GOP funding patches between election years will hit the poor and middle class more than the rich (as he explains why you will not be in a lower tax bracket after retirement), since he quotes Kotlikoff, co-author of ``The Coming Generational Storm,'' (MIT Press, 2004) saying that taxes will likely rise to cover funding for major government social programs.

I do like the one off nature of the column. Bloomberg’s Ahern puts in a cravat that Wasik does not speak for Bloomberg, and Wasik then quotes MIT’s Kotlikoff, who is one of Boston’s right wing scare the hell out of the poor be pretending now is the time to increase taxes and lower benefits so as to make things fairer between generations Bush team folks – and of course Kotlikoff and other "generational accounting" folks determine what is fair, just like no-class warfare Bush.

It is fun to ignore the basic concepts of Social Security and the fact that it is financially solid as a rock, as one redefines the concept and announces that SS is in bad shape.

The right wing solution is to get Americans to save more – but since we must remain a consumption economy, those savings can’t be had from those “living on the edge/middle class” – so we should give incentives to the rich to save more by making even less of the earnings – the investment earnings- of the rich taxable, or at least that seems the idea as he references Roth IRA’s. Yes, just about anyone can benefit from Roth, but where do you think 99% of the tax cost to the government goes in these things – to the lower half – the under $40,000 a year crowd? – Nope.

And just to make this bull into a personal investment advice column, we are told that Kotlikoff has helped write an online investment advisor as we’re referenced to Financial Engines and ES Planner, and to commission-free planners such as the National Association of Personal Financial Advisers or NAPFA, a group who charges you a per hour fee rather take commission - http://www.napfa.org .

I wonder if NAPFA had to pay a placement fee to Bloomberg?