Social Security totally boned, Dems lying

[sbw]

http://www.socialsecuritychoice.com/

[crule81]

I'm in a quandry about social security. From a personal standpoint, I can't stand the government telling me what to do with my money - that I'm too stupid and short-sighted to save for my own retirement. On the other hand, if there were no social security, a large number of people would be too stupid to save for their retirement and then become burdens on society. Even with some kind of mandatory private account, people might take unreasonable risks or just get unlucky.

[Utopmk]

Wait until they tell you how it's going to work.

First, you spend your whole life working, saving your own social security. When you retire.. you pay most of it to the gov't, who gives it back to you in small payments equivalent to a social security check.

Bend over. (_o_)

[mgb]

From an economic standpoint it seems like a good idea, but I think it is more short sighted than any person could be.

Bush wants people investing in the stock market. Having more money to do that, or money earmarked for that, will mean there will be a boost in the US economic output.

On the otherhand. The average American (or person on Earth for that matter) probably has no clue how to make money on the stock market. They might as well go to Vegas and put all their money on one number on a roulette table.

The US is also short on corporate accountability which will go from being a bad problem to a crisis if everyone has their retirement money tucked away in some large company like Enron.

You could be safe and put your money in some slow growth mutual funds or something, but you want your money to outgrow inflation.

I like what they said on Jon Stewart last night about the social security crisis being 40 years away. That's a long time and you just don't know what is going to happen in 40 years. So there is no crisis, just some fear mongering so Bush can create a legacy for himself. Plus you can probably look behind the scenes and see corporate execs rubbing their hands together at all the money that is going to be coming their way soon.

[crule81]

I like what they said on Jon Stewart last night about the social security crisis being 40 years away. That's a long time and you just don't know what is going to happen in 40 years. So there is no crisis, just some fear mongering so Bush can create a legacy for himself.

We're NT's. It's our job to look far into the future and make changes before crises happen. It's the SJ's and SP's who will wait until it's too late to make changes.

[Dman]

Indeed it has been widely reported that there is no crisis currently, social security has tons of money. The big uproar is that someone needs to fix it eventually, why not do it now before it becomes a problem? Now, what the ulterior motives are is up for anyone’s speculation (it’s always about money at any rate).

About privatization, I would point out to people that this was first being discussed by Clinton, in a different format, but privatization nonetheless. Here’s the important thing to note though – he brought it up in the mid-late 90’s, but after the dot-com crash, and the stock markets tanked, guess what? Nobody was talking about privatizing SS anymore! Now that a few years have gone by, and the market is doing better, it comes back up. What happens when the next big crash comes, and millions of soon-to-be retirees lose all their money? Right back where we started.

Another point is, SS was implemented to act as a safety net to keep people from falling into poverty. It was not meant to be a retirement plan, merely a supplement for those who desperately needed it. Now it is proposed to be transformed effectively into a mandatory national savings program. So I would recommend people to think about whether they think that is a good idea or not when contemplating what should be done with SS.

[mgb]

We're NT's. It's our job to look far into the future and make changes before crises happen. It's the SJ's and SP's who will wait until it's too late to make changes.

But doing it too early can cause a lot of problems as well.

[crule81]

But doing it too early can cause a lot of problems as well.

That's true generally, but in this case we have a system that is almost certain to fail in a specified time period.

[gypseymothlee]

Considering at my current job people are fired before they can gain a pension or similar benefits, and usually get permanent back problems without workers compensation... the soylent green option is sounding a bit better.

The whole privatization idea isn't entirely bad, if it's done properly. If you have to go on disability like many people currently on SS, you're kinda screwed because there hasn't been enough time to build up a little trust fund.

From what I've read, the main problem with SS is people are living longer, and as a result more people are using more of the money. The problem in the future will be more people taking money out of the system than are putting money into it. Considering the rising level of obesity, more people will be dying too young to gain access to SS.
Sounds like problem solved to me.

[sbw]

It's so nice that you guys get it...the fat people aren't dying fast enough. And every reform proposal that has ever been presented includes 2 important principles:

1) AARP is lying, because people over 55 would be completely unaffected by any reforms (i.e., they will continue to receive the exact same check as they would have anyway right up until they die). It's frustrating (albeit predictable) that since they hopped in to bed with Bush and got their way on medicare (likely an even bigger fiscal disaster than SS), AARP is right back to whoring for the left, and lying to their old-feeb constituency in the process.

&

2) Individuals will not be "day trading" at all. Mutual funds, bonds, etc. (I'm not in finance, so I'm sketchy on the details, but conservative options all) The stock market will experience at least one (and probably more than one) cyclical downturn within the next 40 years. So what? On a long-term timeline, the S&P, for instance, always makes money. And we all know that "full" privatization will mean partial subsidizing, so as to cover SS disability, and other "special" instances. And whatever the return is, the calculator on the club for growth website estimates for me a -12.22% return (made even worse by certain inflation). I COULD do better than that in a freakin' casino. WTF!?!?!?!?

Scott

[libertarianjim]

Abolish it.

Sorry, Libertarian here. I almost slipped and shouted that at work when a near-retirement age woman was complaining about Bush's State of the Union.

[HeyBooU]

Abolish it.

Sorry, Libertarian here. I almost slipped and shouted that at work when a near-retirement age woman was complaining about Bush's State of the Union.
It's okay I'm not a libertarian and I still say abolish the damn thing.

[garak]

Actually, when the SS surplus runs out, it'll simply return to a pay-as-you go model, as it operated for decades before the baby boom. (actually I think the surplus appeared in the 80s to save up for the baby boomers' retirement -- exactly what will deplete it -- just as intended)

And to maintain the surplus longer than 2040 or 2050 or whatever, we could simply raise the cutoff from 90k to 110k or 120k or something like that. A fairly small change which simply makes SS tax a little less regressive (it'd still be regressive -- the rich pay less %), and the problem would disappear. I don't understand what the big deal is about.

[mgb]

Considering at my current job people are fired before they can gain a pension or similar benefits, and usually get permanent back problems without workers compensation... the soylent green option is sounding a bit better.

The whole privatization idea isn't entirely bad, if it's done properly. If you have to go on disability like many people currently on SS, you're kinda screwed because there hasn't been enough time to build up a little trust fund.

From what I've read, the main problem with SS is people are living longer, and as a result more people are using more of the money. The problem in the future will be more people taking money out of the system than are putting money into it. Considering the rising level of obesity, more people will be dying too young to gain access to SS.
Sounds like problem solved to me.

Start taxing diet foods. heh heh, they create a burden on the SS system.

Seriously, if people are living longer and are more productive at older ages, raise the age that they can start collecting social security. Make it 70. If they want to retire early, fine, let them, if they have the money to. But you can't dip into SS until they are 70. Take 5 years of payments off of the total being payed out and SS probably seems more feasible.

[Dman]

I'll reiterate that the idea behind the thing wasn't supposed to be counted on for our retirements in the first place. We don't want to have to rely on SS - that's what 401k, IRA, your own savings accounts, etc. are for. SS is for people who are either unlucky or not financially smart enough to prepare for their future, so they have a safety net to prevent them from starving to death. Let's say that another way - SS is for people who don't know how to invest their money. So the plan is to... let the people invest their own money!

I'm fine with it, because I'm a finance geek. But I also have 401k, Roth IRA, stocks, bonds, mutual funds, etc. I won't need SS. But my neighbor who is frequently unemployed, no savings, and live paycheck to paycheck, and getting close to retirement, will likely need SS to survive. We want these people to be in charge of their investments? Ok with me, but do I think it will work? No. They'll invest poorly, like most people do today anyways, and end up with not enough money for retirement. Will the fed gov leave them out in the cold, and say "your fault"? Right. Why not just abolish the thing and let us all do whatever the hell we want with our money if that's the philosophy?

[coffeezombie]

On the one hand, I think that a society has an ethical duty to provide for its elderly population. I don't know the specifics about privatization but if the social security fund can be increased through some kind of safe private funding, then I'm all for it, even though I tend to be a socialist and anti-capitalist in my leanings.

If people live longer, they should have to work longer. I don't think the elderly should get a free ride but on the other hand we shouldn't throw them under the bus either.

[jiterati]

Well I doubt anyone will ever read this but... my two cents:

I really question the governments analysis of the social security situation. By their books
http://www.ssa.gov/OACT/TRSUM/trsummary.html
the gov't has "set aside" $1.3T for social security (neglecting our huge debt) and this really isn't very much money. If we estimate the number of retirees will be 30 million (conservative) then this only allocated $43,000 per retiree. If they live off of the interest of social security (with a generous 6% return on govt investments and modest 3% inflation) this leaves each individual with $1,300 in interest income per year, even if they tap into their principle (assuming over a 20 year period) this adds less than $2,100 per year. So even if they consume their principle they will get less than $3,400 of their social security income from the money invested in social security. The remainder will have to be made up by the working folk, this doesn't seem like a good solution. I've heard that the ratio of working to retired will be 2:1, that leaves a lot of money for us working people to be dumping into their retirement. The gov't figures regarding when their will be a social security problem are optimistic AND assume that the money we put in will be used to contribute to the current baby boomers retirement, not OUR retirement, leaving an even bigger problem for future generations. (Future generations won't even have the benefit of SS savings as we do.) Medicare is in even worse condition.

[jiterati]

I agree privatization is not a good idea. It would be great for many of us here on INTP central but overall I believe people would lose money... and then when they look around for more, they'll be looking at us.

(If you sell at a loss - which humans have a tendancy to do - you will ALWAYS lose money in the stockmarket in the long run.)

[sbw]

I'm so happy that my thread got revived! thank you and welcome, jiterati...when the system started, workers to retirees was something like 14-1. now, it's like 2.5-1, and that number is decreasing, as spoiled, selfish capitalists like me recognize how goddamn expensive children are and decide not to have any. that's why it will definitely run out of money, at which point the only options--and clinton, to his credit, pointed this shit out--are to raise taxes, cut benefits (either by giving out smaller checks our raising the collection age, as suggested in this thread), or generate a positive return on that enormous pile of money. those are the 3 options.

you are correct that the 80% majority (or whatever) of fiscally retarded morons would be fucked if we allowed them all to daytrade willy-nilly; nobody has EVER suggested or recommended this. (see post #10 in this thread) (oooh, I feel so pompous quoting myself) (*pleasant shiver*)

Scott

[jiterati]

Even when investing in mutual funds and bonds it is possible to lose a good bit of money if you consistently sell when you see your assets take a dive. Over the long run this behavior gaurantees a return less then that of the average market behavior (and adds LOTS of instability to the market), this behavior can even cause a negative return which would be disasterous. So I don't think the fact that privitized SS uses mutual funds will fix the problems associated with private trading. Though a govt run fund has problems as well (all the money in one bucket.) I think it is a question of picking your poison.

[sbw]

Even when investing in mutual funds and bonds it is possible to lose a good bit of money if you consistently sell when you see your assets take a dive. Over the long run this behavior gaurantees a return less then that of the average market behavior (and adds LOTS of instability to the market), this behavior can even cause a negative return which would be disasterous. So I don't think the fact that privitized SS uses mutual funds will fix the problems associated with private trading. Though a govt run fund has problems as well (all the money in one bucket.) I think it is a question of picking your poison.

I think that one poison is certain to kill you, though, while the other isn't.

some people (generally patient, systematic people, from what I gather) make money in the market while some lose money. every worker loses money under the current system, and it's only going to get worse.

Scott

[jiterati]

How does every worker lose money in the current system? Do you mean as a result of the lack of savings in SS such that there is unfair taxation applied to those outside of a baby boomer generation?

I think what you say about those that make money is true, they are patient and systematic. These days the traders that are in the news are the speculators, this is worriesome in of itself, stocks start to look like baseball cards if traders act speculatively. (Private traders invest based on the news.) Who wants there life savings tied up in baseball cards? Ha ha :)

[jiterati]

I suppose if the govt' were to apply time delays between trades that could reduce the risk of speculation. (ie. once you invest in a mutual fund you can't move the money again for at least X years)

[sbw]

I suppose if the govt' were to apply time delays between trades that could reduce the risk of speculation. (ie. once you invest in a mutual fund you can't move the money again for at least X years)

"Cato's Social Security Plan

See Social Security Paper No. 32, "The 6.2 Percent Solution: A Plan for Reforming Social Security," by Michael Tanner (February 17, 2004), for a complete review of Cato's reform plan.

Summary

Individuals would be able to privately invest their half (6.2 percentage points) of their payroll tax through individual accounts.

Individuals who choose individual accounts will receive a recognition bond based on past contributions to Social Security. Workers choosing individual accounts will forgo accrual of future benefits from traditional Social Security.

Allowable investment options for the individual accounts will be based on a 3-tier system: a centralized, pooled collection and holding point; a limited series of investment options, with a lifecycle fund as a default mechanism; and a wider range of investment options for individuals who accumulate a minimum level in their accounts.

At retirement, individuals will be given an option of purchasing a family annuity or taking a programmed withdrawal. These two options will be mandated only to a level required to provide an income above a minimum level. Funds in excess of that required to achieve this level of retirement income can be withdrawn in a lump sum.

If an individual accumulates sufficient funds within their account to allow them to purchase an annuity that will keep them above a minimum income level in retirement they will be able to opt out of the Social Security system in its entirety.

The remaining 6.2 percentage points of payroll taxes will be used to pay transition costs and to fund disability and survivors benefits. Once, far in the future, transition costs are fully paid for, this portion of the payroll tax will be reduced to the level necessary to pay survivors and disability benefits.

This discussion will be offered in the context of payable Social Security benefits. That is, the Social Security system will be restored to a solvent pay-as-you-go basis prior to the development of individual accounts. Workers who choose to remain in the traditional Social Security system will receive whatever level of benefits Social Security can pay with existing levels of taxation."

there is a PDF file of the whole thing on this page:
http://www.socialsecurity.org/pubs/ssps/ssp-32es.html

Scott

[Jacque]

I would kind of miss having my SSN tattooed to my forehead.

For the moment though, it's fueling our defecit spending. Now would be a bad time, unless you'd rather pay higher interest rates to the Chinese government. We gotta wait for Democrats to raise taxes before the Republicans can blow it on something else, like privatization.

[sbw]

I would kind of miss having my SSN tattooed to my forehead.

For the moment though, it's fueling our defecit spending. Now would be a bad time, unless you'd rather pay higher interest rates to the Chinese government. We gotta wait for Democrats to raise taxes before the Republicans can blow it on something else, like privatization.

you've been watching the daily show, haven't you?

Scott