Lets talk about Social Security

[floydian slip]

What is Bush trying to do?

If its broken, then why try to take more money away from it by investing it?


So if the stock market crashes we get nothing and the politicians are off the hook.


I dont know much about it but this is what it seems like to me.

[RDixon]

I've been hearing that SS is broke and will be bankrupt in a few years since the 60s.
Back then I believed what I heard about it and pretty much wrote off the taxes I paid into it as something I would never see a return on.

Here it is 34 years later and SS is still here and due to my health I am seeing a return on it now.
Probably won't live long enough to draw out everything I paid in but at least I am getting some of it back.

It wasn't broke then; it isn't broke now.

If it ain't broke....

[theknife]

i'm not as informed on it as i should be, considering i'm only about 25 years from collecting on it...

but since the Prez has proved himself to be generally lacking in credibility on most subjects, i can pretty much be sure that whatever he says or does is done for the sake of political expediency, and therefore not in my best interest.

[JackSpratts]

Originally Posted by theknife

i'm not as informed on it as i should be, considering i'm only about 25 years from collecting on it...

but since the Prez has proved himself to be generally lacking in credibility on most subjects, i can pretty much be sure that whatever he says or does is done for the sake of political expediency, and therefore not in my best interest.

in 1978 bush ran on a platform that social security would be broke without private accounts in 10 years. he was adamant it would fail by 1988. it's just constant dogmatic nonsense with this guy. if he was cute it'd be one thing because no linear thinking capabilities came with this model.

- js.

[Nicobie]

Originally Posted by JackSpratts

in 1978 bush ran on a platform that social security would be broke without private accounts in 10 years. he was adamant it would fail by 1988. it's just constant dogmatic nonsense with this guy. if he was cute it'd be one thing because no linear thinking capabilities came with this model.

- js.

I'd say he was right.

He is trying to save it by screwing the younger folks. Same as every other politico has ever done including FDR who started the whole shit-a-roo. All the money collected for us younger folks has already been spent. Bye bye, It's fookin' gone. No need to cry about it because you'll never see it.

I you want SS you better support higher taxes and lower benefits for your parents.

Introducing a means (income qualifying) test and increasing the income cap on taxes paid prolly would take care of the problem.

It least it would insure that I get mine.

and fuc all the rest of U.......................

[Mazer]

It would be nice if I could take the money I pay into social security and put it into an IRA instead, but if everybody had that option then the SS fund would never see an other dime deposited into it. Never the less, my opinion is that people should plan for their own futures rather than covering the asses of others who never did when they had the chance. And that's the way it would be if senior citizens didn't vote in droves the way they do. Face it, social security isn't about finacial security or personal freedom, it's politics, pure and simple.

For all I care the feds can keep my money, save it up, and build a bronze statue of Bill Clinton with a plaque that reads "I feel your pain." Social security is a non-issue to me, bankrupt or not.

[daddydirt]

http://www.townhall.com/columnists/t...20040928.shtml

How did Social Security get into its present mess in the first place? Because politicians made it the "risky scheme" that they now claim privatization would be.

The same political expediency which caused Social Security to be called "insurance," in order to get public support, guaranteed that it would be nothing of the sort. Unlike an insurance company, Social Security has never had enough money to pay for all the pensions it promised.

Instead, Social Security has been run like a pyramid scheme, where the first people to pay in get money back from the second wave of people who pay in, and the second wave get money back from the third wave, etc. This is so risky that pyramid schemes are illegal -- except when the government does it.

They have gotten away with this thus far because the first generation covered by Social Security was an unusually small generation that was followed by the unusually large "baby boomer" generation. But when the baby boomers retire, the pyramid scheme will no longer bring in enough money to pay for their pensions.



http://www.townhall.com/columnists/t...20050120.shtml

But no matter how much money you have paid into Social Security over the years, and no matter what you were promised when you paid it, the government always has the option to pay you back only what future politicians decide they can afford, given all the other things they might prefer to spend the money on.

Owning your own private pension plan means that those who owe you have to pay you what they promised. It also means that if you die without ever using it, you can leave it to your family, instead of having the government keep the money.

Liberals are desperate to keep Social Security the way it is, because that means they can keep spending your money as they see fit and keep you dependent on them. That's what the welfare state is all about.

[Drakonix]

Very well said, DD.

I can only add that there are also those who collect Social Security (Disability) who have NEVER paid into the social security system. I personally know several individuals who are doing this. Obviously, when you give money away to those who paid little or nothing into it, the system is indeed like a pyramid scheme.

The main intent is to keep people more dependant upon the government, and less dependant upon themselves. This in turn creates huge government bureaucracy to "oversee" matters - which in turn consumes more money in providing the goverment employees to perform this task of oversight. They take your money, spend most of it - and then dictate how you can get some of it back.

The reason social security isn't bankrupt (yet) is that they keep raising the tax rate. In 1937, the rate was 1% of income - and people were told "it's never going to change". Remember that wages were low and therefore the contribution was small. Today, it's a total of 15.3% of earnings (OASDI+HI and there are caps). Usually, employers pay half of the amount and the employee pays the other half with paycheck deductions. However, any way you slice it - it's 15.3% of your pre-tax earnings out of your pocket. Wages are (generally) a lot higher nowadays, so that 15.3% represents considerably more money.

Social security tax rates were hiked in the following years (19xx):
50, 54, 57, 59, 60, 62, 63, 66, 67, 68, 69, 71, 73, 74, 78, 79, 81, 82, 84, 85, 86, 88, 90.

There's more, too. Some government employees that entered the Public Employees Retirement System (PERS) early in the game got to opt out of Social Security. Whereas they are ineligable for regular social security benefits they are still eligable for social security disability.

There is no valid reason why individuals should be prevented from privately overseeing their own retirement funds. Current IRA plans do not permit contributions anywhere near what social security taxes take away.

The U.S. social security tax rate historic tables can be viewed at http://www.ssa.gov/OACT/ProgData/taxRates.html

[pod]

Social security has held up very well over the decades, despite forecasts to the contrary. The people who set it up predicted back then population and demographic models that were within 0.2% of actuals into the late 80s at least. So they definitely knew what they were doing and did their math. Social security took a hit when the benefit payouts became inflation indexed, but that was mostly adjusted for.

Remember that the timelines Bush is quoting are the absolute worste case scenario as predicted by the state actuaries. They come up with basically 3 estimates every year, and their middle pick was typically right on, until a few years ago when they became a little pessimistic (no, no agenda there) and their optimistic estimates are now closer to reality. If you follow the historical line of predictions vs reality, a small bump to taxes will cary social security through the tough years until the baby boomers start dying off (if you'll pardon the crassness). But really, no one can predict with certainty that far into the future, so Bush can say whatever he wants and no one can prove othewise.

When you try to fix social security by privitizing it (just call it what it is), you're removing a) the social aspect (it's now individual) and b) the security aspect (money's tied up in stock market, weee!). It frames Social Security in terms of an investement, when it is really insurance. Insurance removes risk, by pooling it and spreading it over time, stock market investement increases it. The idea here is that even though many (most?) individual investors will make money over 30-40 years, many will make very little and some will lose their shirt. That's where social security steps in, to provide a baseline living allowance if you couldn't hack it (although lack of means testing makes that a bit of a farce).

Ah, screw it, they should just go all the way and get rid of it altogether. But no, the money will be directed to a select few funds, indexes and some other instruments, maybe bonds. While that does not favour any company explicitely, indexes are composed of a few large companies. Billions will pour into them overnight, and no one knows what that will do, aside from the obvious. And someone will make a nice commission off the whole deal. Also, index fund does not equal diversity. Just look at the composites. Indexes don't have fundamentals, they're as likely to go up as down. And as always with the stock market, tough luck to you if you need to cash out at the wrong time! (With so much mindless money pouring in left and right, it's pretty safe to assume stock swings will be even wilder and more unpredictable.)

Instead of directing investement to their pet benefactors, the government should just let people do whatever they want with it. I bet what you would see in short order is a private version of Social Security, basically insurance (pooled risk) which is what social security mostly is. But instead of insurance (or assurance) for your non-productive years, all you will get is insecurity and a gamble, and big companies will have the windfall. This is a halfway measure which is totally inappropriate for backing baseline insurance.

<=---- someone should make a smiley version of this!

[Mazer]

Like this?

If social security was shut down there's no reason not to continue paying senior citizens with what's left. Just incriment the age limit by one every year so only those currently getting checks from the government will get them from now on. Eventually those benefactors will kick off and the balance of the fund can be used to pay down the national debt or something like that. If it turns out that the fund is gonna dry up before the last benefactor dies, then don't end the tax completly, just reduce it annually as the population above the age limit shrinks; phase it out over time.

[theknife]

my two cents, for what it's worth...

with respect to dd (my favorite conservative ) & drak, i don't buy the theory that it's all a sinister plot to make us dependent on government - that's talk-radio code rap for "Dems are evil and here's why...". as pod points out, SS works. it does what it is supposed to do.

the marketing campaign to sell us this idea has an all-too-familiar ring to it: the Prez makes dubious claims of doom and gloom, based on debatable data, using worst case scenarios, to sow fear among the population. it's like deja vu all over again.... and after Iraq and the prescription drug bill, the President simply is not believable.

but the bigger question is why now? why is a problem that is arguably decades away suddeny top priority for the administration? could it be that the prospect of raising payroll taxes next year, as i believe this plan calls for, is primarily important for the short term goal of increasing revenue to offset the deficit that has exploded under Bush?

the administration is, as always, driven by political expediency, for the interests of thier big donors and core constituencies. it truly strains credibility to believe that Bush is only motivated by a desire to improve my life 25 years from now.

[pod]

Originally Posted by Mazer

Like this?

Hey, they're both smiling too, how appopriate...

[Gutrguy]

The pyramid scheme idea of SS isnt a bad idea at all. The population grows every year, and that means every year there are more people paying into the SS fund. With each new 'wave' of people paying in, there should not be a problem at all....if the money was left alone. The government has taken money from the SS fund used it for other things....balancing the nations budget is at the top. ( http://archives.cnn.com/2001/ALLPOLITICS/08/28/budget/ ) With the government taking this money and writing IOU's that it has no intention, and no way to pay back, they are the ones causing this 'crisis'.

The ideal way to 'fix' social security would be for the government to pay back what it has borrowed, and leave that money alone! Letting citizens put the money in the stock market is by far the stupidest thing that could be done. The stock market may not crash again (altho i believe it will....its just a matter of time) but that doesnt mean that the private citizens are safe. Just look at how fickle the stock market is today...and how quickly blue chip stocks can turn into shit (the entire Enron implosion for example). Many MANY people lost their fucking shirts when the 'tech bubble' had a blowout....if that happened again what would become of the privitized SS plan...what would happen if the stock market crashed again?



Edit: Just realized this is #1800 for me

[Mazer]

Well, if social security was privatized and the stock market crashed, I guess lots of money would be lost, but it wouldn't put people into debt now would it? Sure, 15.3% of everyone's income would be down the toilet, but the other 60% or so they get to keep after taxes remains theirs (to invest on their own). It's not exactly a shirt losing venture, and it's no worse than bankruptcy could be. Either way the fund will eventually decrease to zero. Does it really matter how in the end?

[floydian slip]

What if 5 million illegal aliens were granted amnesty and had to register as a citizen, then that would be more money from taxes and mo money to put into SS. Problem partailly solved.

[Gutrguy]

Originally Posted by floydian slip

What if 5 million illegal aliens were granted amnesty and had to register as a citizen, then that would be more money from taxes and mo money to put into SS. Problem partailly solved.

Then instead of having 5 million non-english speaking illegal aliens, we would have 5 million more non-english speaking citizens...most still working for cash money and sending it home to their families while collecting welfare. If they wanted to become citizens they can go through INS like everyone else that wants to become a citizen.

[floydian slip]

no walfare for non citizens

and the border needs to be closed to illegal immigration too. go minutemen!

this is turning into a lou dobbs episode.

[Mazer]

Naw, these are some pretty creative ideas. Maybe they're not good ideas...

[theknife]

from the non-partisan General Accounting Office: there is no immediate Social Security crisis and Bush's plan will only accelerate any funding problems.

GAO: Personal accounts could hasten Social Security shortfall

By STEVEN THOMMA

Knight Ridder Newspapers


WASHINGTON - Private investment accounts such as those President Bush endorses not only will not save Social Security, but they also could accelerate the retirement system's financial problems, a nonpartisan government official told Congress Wednesday.

The testimony by Comptroller General David Walker, head of the Government Accountability Office - a congressional watchdog agency - encouraged Democrats, who want Bush to drop his proposal for new personal accounts before they negotiate any plan to fix Social Security's long-term solvency shortfall.

But Walker also said that the impact that private accounts would have on Social Security would depend entirely on how they're funded and what other steps are taken - such as pension-benefit cuts or tax increases - to shore up the system's long-term solvency. The GAO chief also said that action is needed soon to address the system's solvency problem before it worsens.

"Social Security does not face an immediate crisis, but it does face a large and growing problem," Walker told the House Ways and Means Committee in its first hearing this year on problems facing the national pension system.

Bush has made changing Social Security his highest second-term domestic priority and is campaigning hard to sell his vision of new private investment accounts to a skeptical country. Polls show public opinion turning away from Bush's approach, and in Congress, Democrats are virtually united in opposition while Republicans are split.

Meanwhile, Social Security's financial problems will get harder to solve as the baby boom generation - those born from 1946-64 - starts retiring and as the government confronts other, larger problems, such as finding ways to pay for Medicare. "It would be prudent to act sooner rather than later," Walker said.

Absent any concrete proposals to deal with the system's solvency problem, the committee focused instead on the one proposal that Bush has made - to allow those born in 1950 or later to divert some of their Social Security taxes into private investment accounts.

Pressed by Democrats to say whether such accounts would help or hurt Social Security, Walker hedged: "It depends on how they're structured."

They wouldn't shore up the system, he said, if they were financed, or "carved out," from current Social Security taxes, as Bush proposes, and accompanied by no other changes. By themselves, he said, such private accounts would "exacerbate" the system's problems and accelerate the date for when it would start spending more on pension benefits than it receives in annual revenue.

"I hope everyone takes note of what you said. I just hope the world hears you," said Rep. Sander Levin, D-Mich.

Levin and other Democrats insisted that Bush should drop his proposal for private accounts before they negotiate to save Social Security.

"Private accounts cannot be on the table if you are looking for bipartisanship," said Rep. Charles Rangel, D-NY., the panel's senior Democrat.

Rep. Jim McCrery, R-La., the chairman of the panel's Social Security subcommittee, said Walker was "just dead wrong" and that private accounts, if coupled with benefit cuts, "can in fact solve the problems of Social Security."

He said it would be "counterproductive" for Bush to rule out private accounts and urged Democrats to drop their demand that the accounts be dropped.

"Stop this nonsense," McCrery said. "I hope we will all calm down."

Walker both lauded Bush for starting the debate and criticized him for focusing entirely on private accounts.

"The president's right in saying we need to solve the problem," Walker said, adding later: "I would have done it differently."

For the full text of Walker's written testimony, go to www.gao.gov.

http://www.kansascity.com/mld/kansas...s/11092857.htm

[Mazer]

Hmm, I went to the GAO web site and couldn't find Walker's testimony. I'd like to know how the organization came to its conclusions.