Say no to private Social Security!

[jadam]

A comic I edited, I got the original online somewhere, it is a rather old comic from the days of Gerald Ford. Anyways here

[Dont Hurt Me]

I would think more would be talking about this. Looks like those over 55 are going to be taking care of, looks like those in their 20s will have saving plans but will this mean those in their 30s and 40s get screwed somehow after paying years into this? I bet so anyone have any comments???

[mactastic]

I would think more would be talking about this. Looks like those over 55 are going to be taking care of, looks like those in their 20s will have saving plans but will this mean those in their 30s and 40s get screwed somehow after paying years into this? I bet so anyone have any comments???

As a 32 yo, that's what I'm expecting.

[Dont Hurt Me]

Im in the same ball park not old enough nor young enough. If they gave me the option of taking back everything i paid i would take it but we know that wont happen and simply put I dont trust the Republican Party on any issue these days.
I bet they even come up with a fancy slogan that will be opposite to what it does.
30 and 40 year olds better take a close look because i feel the shaft is coming.

[clayj]

Im in the same ball park not old enough nor young enough. If they gave me the option of taking back everything i paid i would take it but we know that wont happen and simply put I dont trust the Republican Party on any issue these days.
I bet they even come up with a fancy slogan that will be opposite to what it does.
30 and 40 year olds better take a close look because i feel the shaft is coming.You mean, as opposed to the shaft that was (and is) ALREADY coming because the system will be insolvent by the time we (I'm 36) hit retirement age? Personally, I don't see how ANYTHING can possibly make Social Security any worse than it already is for those younger than 40.

I've NEVER counted on receiving any Social Security; so any plan that extends the life of the system and makes it possible for me to derive some personal benefit from it is welcome by me.

[mactastic]

I bet they even come up with a fancy slogan that will be opposite to what it does.
In that case, they could just call it Social Security!

[mactastic]

You mean, as opposed to the shaft that was (and is) ALREADY coming because the system will be insolvent by the time we (I'm 36) hit retirement age?
Not true, but nice use of the GOP 'panic now' rhetoric.

in·sol·vent ( P ) Pronunciation Key (n-slvnt)
adj.

Unable to meet debts or discharge liabilities; bankrupt.
Insufficient to meet all debts, as an estate or fund.
Of or relating to bankrupt persons or entities.

n.
A bankrupt.

In 2020 (with no further revisions, which is BS since it just got revised from 2018 to 2020 just recently) the fund would have to start cashing in the bonds that sustain it to make it's payments. It in no way will be insolvent. That fate is, at current projections, at least 40 years away. And if we assume a more realistic number we're probably talking about 60-75 years before that actually happens. And all we'd have to do to push that date back into the next century would be to raise the payroll exemption to $250K or so.

[Dont Hurt Me]

You mean, as opposed to the shaft that was (and is) ALREADY coming because the system will be insolvent by the time we (I'm 36) hit retirement age? Personally, I don't see how ANYTHING can possibly make Social Security any worse than it already is for those younger than 40.

I've NEVER counted on receiving any Social Security; so any plan that extends the life of the system and makes it possible for me to derive some personal benefit from it is welcome by me.
Last i checked everything was fine 4 years ago when Bill left office he even had a big surplus, 4 years later we have billions squandered in a screwed up war, a gigantic massive deficit and a president who cant seem to spend enough.Spend spend spend. Has he ever said no to congress on anything? Still has no clue what the veto pen is used for and then has tax payers paying for viagra for old farts. What is going on?

[blackfox]

<nevermind>

[blackfox]

You mean, as opposed to the shaft that was (and is) ALREADY coming because the system will be insolvent by the time we (I'm 36) hit retirement age? Personally, I don't see how ANYTHING can possibly make Social Security any worse than it already is for those younger than 40.

I've NEVER counted on receiving any Social Security; so any plan that extends the life of the system and makes it possible for me to derive some personal benefit from it is welcome by me.

This has been discussed rather spiritedly in a couple threads here, but the crux of the issue here is two separate points:

1. A realization of the purpose of SS and of it's general health projected into the future and it's subsequent ability to fufill it's purpose. It is not designed to make us independently wealthy in our old age, that is the province of responsible personal savings. it is meant to be a bulwark against that fine line between poverty and destitution, recognizing the latters' corrosive effect on a stable society and it's general opposition to the concepts of a enlightened, civil society.

2. The potential of an alternate plan of SS, in specific, that of the Bush Administration. It is unclear (since no specifics have been mentioned) whether a new plan would be in any way superior to our current system, or indeed the best option to pursue, if consensus leads us to believe there is a major problem. Comparative analysis of comparable privatization schemes by the UK and Chile (the latter which Bush has shown interest in) do not bode well for optimistic assessments of the privatization agenda, but again, w/o a specific plan, it is difficult to make specific criticisms. The math used to formulate the benefits of SS privatization (or semi-) by Bush are seemingly suspect (more on that later).

With current projections (as many have said) SS will have to dip into it's fund to pay benefits around 2020, and will face a financial shortfall around 2040-50, where it will again, according to estimates, still be able to pay out 3/4 of benefits to recipents.

The problem with Bush's plan is the manipulation of projection data. In simple terms, Bush projects that an economic slowdown will happen when the last of the baby-boomer retire, slowing revenue to SS, leading to it's insovency. OK, that's possible(perhaps). OTOH, however, the success of Bush's plan hinges on a return of 6-7% on stock investments (over the roughly 3% SS now enjoys). This would have to be accomplished for the next 75 years or so, which seems unlikely. If it did happen, however, the economy would also be growing at a decent clip, making the initial projection about the economic slowdown false, with a healthy economy providing more than enough revenue to keep SS (as is) solvent into perhaps the 22nd Century.

It is, of course, more complicated than that, and I am no economist. Still, the basic truth is that for Bush's plan to work, it relies on assumptions that negate it's very necessity in the first place, and that conversely, the assumptions given as reason for the reform would also doom Bush's plan to failure.

[coconn06]

OTOH, however, the success of Bush's plan hinges on a return of 6-7% on stock investments (over the roughly 3% SS now enjoys). This would have to be accomplished for the next 75 years or so, which seems unlikely.

I'm also no economist, but I'm pretty sure the historical average for stock market returns is >10%. The longer the time period the more accurate that prediction becomes. I think it's very reasonable to suggest 6-7% returns over the next 75 years, with a moderate investment strategy.

And also, if the stock markets are returning less than the historical average over the next 75 years, then this country and our economy has other things to worry about that SS...

[pseudobrit]

And also, if the stock markets are returning less than the historical average over the next 75 years, then this country and our economy has other things to worry about that SS...

You don't get it, do you?

Social Security was created to keep those "other things" from putting elderly people in the gutter.

If the economy tanks, sure, we're screwed, but old folks don't starve.

If the economy tanks AND you've tied Social Security to said economy, we're screwed AND we've got retirees living in cardboard boxes.

[Laslo Panaflex]

You don't get it, do you?

Social Security was created to keep those "other things" from putting elderly people in the gutter.

If the economy tanks, sure, we're screwed, but old folks don't starve.

If the economy tanks AND you've tied Social Security to said economy, we're screwed AND we've got retirees living in cardboard boxes.

Hear, Hear. Has anyone ever heard of "The Great Depression"?

Also, I am not an economist nor a SS expert, but maybe someone can answer my question. Can someone that reaches retirement still get SS even if they put little or no money into it? If they only put a little in, will they only get a little back? I am assuming that you must pay to get money back (duh) but I have been wrong on such assumptions before.

[Xtremehkr]

If that trillion dollar cost was instead invested in SS now, how bad would it be with a few years of interest collected. On a trillion dollars. Sure, baby boomers are going to be a burden for a while, but they are not going to live forever.

[IJ Reilly]

You should probably verify this on the Social Security Administration web site, but IIRC, the minimum number of pay-in quarters to qualify for benefits is 60. The level of pay-out is based on (again, IIRC) the highest three years of contribution, and when you decide to start collecting benefits.

[zimv20]

I'm also no economist, but I'm pretty sure the historical average for stock market returns is >10%.
i think it's closer to 8%.


And also, if the stock markets are returning less than the historical average over the next 75 years, then this country and our economy has other things to worry about that SS...
there's a trend now, in economist circles, to predict that, in fact, the market will have lower averages moving forward. they point to the market being generally undervalued in the 20th century, but becoming overvalued towards the end.

paul krugman wrote a column about it recently and its effect on the privatization of SS.

he also mentioned the inconsistency in the argument of the pro-privatization people. it goes kinda like this:
1. the market won't do well enough to keep SS solvent
2. the market will do well enough for private SS accounts to both let people retire and pay for the transition costs

[IJ Reilly]

This article:

http://www.brookings.edu/views/testimony/burtless/19990511.htm

pegs the long-term moving average rate of return from equities at around 6.3%.

[kuyu]

i think it's closer to 8%.


Actually, the average returns on the market vary by market capitalization. Large-cap stocks have averaged about 10%, mid-cap's about 16%, and small cap's about 25%.

The great depression was caused, from the market side, by a couple of factors. One, investors bought heavily on margin in an attempt to inflate gains with this leverage. However, margin leveraging also magnifies losses. To alleviate this problem, the government has instituted laws which govern the purchase (or sale if short position is taken) on margin. The maximum margin today is 50%. As well, investors are subject to a margin call if their position in any particular investment falls below 30% (40% at some brokers).

Two, investors in the 20's and 30's were not nearly as sophisticated as today's investor. They had little to no real time data, news, or understanding of financial markets. With the relatively modern proliferation of derivative-based hedging strategies, investors are able to substancially limit their exposure to market risk by taking on derivative contracts on the opposite side of their original investment. This allows more aggresive investing, day-trading, and keeps risk manageable. The GDP of the US is ~$10 trillion dollars. The value of outstanding derivative contracts is ~$110 trillion dollars.

Also, the NYSE and Nasdaq both have systems in place that suspend trading for a period of time if dramatic % declines happen. In other words, a depression of the markets can't happen because of the market itself. It's a persistent, organic, stable tool. "Why should we fear to use it?"

On SS: I think the best comprimise would be to raise the cap by 100% to $180,000/year, but payout 50% more to these beneficiaries. This would allieviate the strain of the transistion to a voluntary private system. That takes care of the 50-60 crowd, the 30-40 crowd, and the rest of us.

For those who say the market is too risky, find me ONE diversified investor (30+ stocks in different sectors + bonds) who lost money over 25 years. I bet you'll have a hard time doing so because no one has. The plan requires this sort of conservative long-run approach, so... No one will lose money in the long run.

[IJ Reilly]

Actually, the average returns on the market vary by market capitalization. Large-cap stocks have averaged about 10%, mid-cap's about 16%, and small cap's about 25%.

Actually, it's closer to 6.3% (source provided -- where's yours?).

And again, for probably the tenth time now, the Great Depression was not caused by margin trading or even by the stock market crash. What caused the Depression was the Federal Reserve tightening money supply in the face of the '29 crash and the subsequent run on the banks. It was the destruction of the nation's banking system that caused the Depression to become severe and to linger. We've learned the lessons of this era, which is why the stock markets can now deflate drastically and not even cause a lengthy recession, let alone a ten-year depression.

[pseudobrit]

a ten-year depression.

Bush will have caused over half the country to endure an 8-year depression by time he leaves office.

[mactastic]

Bush will have caused over half the country to endure an 8-year depression by time he leaves office.

Ha! John Stewart mentioned that at the same time Bush was swearing his solemn oath of office that about 48% of America were also solemly swearing an oath as well.

[IJ Reilly]

Both of you deserve a good swift kick in the touché.

[jadam]

http://www.factcheck.org/article305.html

Analysis



Bush made Social Security the centerpiece of his Feb. 3 State of the Union address. He gave more details of how he proposes to change the system -- but left out facts that don't help his case.

Social Security "Headed Toward Bankruptcy?"

The President painted a dire picture of Social Security's finances:

Bush: The system, however, on its current path, is headed toward bankruptcy . And so we must join together to strengthen and save Social Security.

"Bankruptcy" is a scary term that Democrats have used too, when it suited them, but it could easily give the wrong idea. Nobody is predicting that Social Security will go out of business the way a bankrupt business does. It would continue to pay benefits -- just not as many.

The President was a little more specific about that later in his address, while repeating the word "bankrupt":

Bush: By the year 2042, the entire system would be exhausted and bankrupt . If steps are not taken to avert that outcome, the only solutions would be dramatically higher taxes, massive new borrowing, or sudden and severe cuts in Social Security benefits or other government programs.

But how severe would those benefit cuts be? In fact there are two official projections -- one by the Social Security Administration (SSA) and a somewhat less pessimistic projection by the Congressional Budget Office (CBO). The President referred to the SSA projection, which calculates that the system's trust fund will be depleted in 2042. After that, the system would have legal authority to pay only 73 percent of currently promised benefits -- and that figure would decline each year after, reaching 68 percent in the year 2075.

The CBO doesn't project trust-fund depletion until a decade later, in 2052, and figures that the benefits cuts wouldn't be so severe, a reduction to 78% of promised benefits. But either way, even a "bankrupt" system would continue to provide most of what's promised currently.

Furthermore, the President did not specify what he would do to fix the problem. He again urged creation of private Social Security accounts. But those would be of no help whatsoever in shoring up the system's finances, as acknowledged earlier in the day by a senior Bush administration official who briefed reporters on condition of anonymity:

"Senior Administration Official:" So in a long-term sense, the personal accounts would have a net neutral effect on the fiscal situation of the Social Security and on the federal government.

And that "net neutral effect" is just over the long term, 75 years or more. In the shorter term, creation of private accounts would require heavy federal borrowing to finance the payment of benefits to current retirees while some portion of payroll taxes is being diverted to workers' private accounts. The administration projects it will borrow $754 billion (including interest) through 2015 to finance the initial phase-in of the accounts, and much more thereafter. The liberal Center on Budget and Policy Priorities -- which opposes Bush's proposal -- projected that $4.5 trillion (with a "t") would be required to finance the first 20 years of the accounts after they start to be phased in in 2009.

Private Accounts: A Sure Thing?

The President made those private accounts -- which he now prefers to call "personal" accounts -- sound like a sure bet:

Bush: Here's why the personal accounts are a better deal. Your money will grow, over time, at a greater rate than anything the current system can deliver -- and your account will provide money for retirement over and above the check you will receive from Social Security.

History suggests that the President is correct -- the stock market has averaged a 6.8 percent "real" rate of return (adjusted for inflation) over the past two centuries, according to Jeremy Siegel, professor of finance at the University of Pennsylvania's Wharton School. The administration says a conservative mix of stocks, corporate bonds and government bonds would return 4.6 percent, even after inflation and administrative costs. And the administration also figures that private accounts would need to generate only a 3 percent rate of return to beat what Social Security provides.

But there's no guarantee that history will repeat itself. Markets are inherently unpredictable and volatile. At present, for example, all major stock-market indexes are still well below where they were five years ago.

Benefit Offsets

The President made no mention of one crucial aspect of the proposed accounts -- anyone choosing one would also have to give up an offsetting portion of their future guaranteed retirement benefits. If their investments in private accounts returned more than 3 percent annually over the years, they would end up better off than under the current formula. But if those investments did worse, they wouldn't make up for the portion of benefits that were given up, and the owner of an account would end up worse off. The President didn't explain that trade-off.

"The Money is Yours?"

The President also glossed over some severely restrictive aspects of the accounts he is proposing, saying flatly "the money is yours."

Bush: In addition, you'll be able to pass along the money that accumulates in your personal account, if you wish, to your children and -- or grandchildren. And best of all, the money in the account is yours, and the government can never take it away .

That's not exactly true.

As described by the "senior administration official," the owners of personal accounts wouldn't be able to touch the money while they are working, not even to borrow. The money would remain in the hands of the federal government, which would administer the personal accounts for a fee which the official said would be about 30 cents per year for every $100 invested.

And even at retirement, the government would control what becomes of the money. First, the government would automatically take back a portion of the money at retirment and convert it to a guaranteed stream of payments for life -- an annuity. The amount taken back -- called the "clawback," descriptively enough -- would depend on the amount of money the retiree requires to remain above the official poverty guideline. That's currently $12,490 for a couple or $9,310 for a single person. Only after the combination of traditional Social Security benefits and the mandatory annuity payments from the private account equal the poverty level would any remaining portion in the account be "yours."

"Senior Administration Official:" They would be permitted to leave those (leftover) funds in the account to continue to appreciate; they could withdraw those amounts as lump sums to deal with a pressing financial need -- and, obviously, any additional accumulations in the accounts could be left as an inheritance. But the main restriction, again, to repeat, is that people would not be permitted to withdraw money from the accounts to such a degree that by doing so they would spend themselves below the poverty line.

The President didn't mention the "clawback" or the mandatory nature of these restrictions, calling them only "guidelines" and describing them only in positive terms:

Bush: (W)e will set careful guidelines for personal accounts. We'll make sure the money can only go into a conservative mix of bonds and stock funds. We'll make sure that your earnings are not eaten up by hidden Wall Street fees. We'll make sure there are good options to protect your investments from sudden market swings on the eve of your retirement. We'll make sure a personal account cannot be emptied out all at once, but rather paid out over time, as an addition to traditional Social Security benefits. And we'll make sure this plan is fiscally responsible, by starting personal retirement accounts gradually, and raising the yearly limits on contributions over time, eventually permitting all workers to set aside four percentage points of their payroll taxes in their accounts.

[jadam]

Sign it!
http://www.moveon.org/socialsecurity/

[IJ Reilly]

And another thing I haven't head mentioned yet. The President said that no one 55 or older would be effected by his proposed changes to Social Security. So here's a pop quiz: What is the age at which a person becomes eligible for membership in AARP?

Don't cheat now. No fair looking it up.

[mactastic]

Is it 55? ;) (Cynical me) Those and older won't be affected by this plan?

[IJ Reilly]

The man wins a cookie.

According to Dubya, nobody 55 or over would have their benefits changed.

[kuyu]

Actually, it's closer to 6.3% (source provided -- where's yours?).

I misstated the returns for small-cap stocks. The actual figures since 1926 are:
Large-cap stocks - 12.2%
Small-cap stocks - 16.9%
Long-term corporate bonds - 6.2%
Long-term gov't bonds - 5.8%
US T-bills - 3.8%
Inflation - 3.1%

The problem with the figures you linked is multi-faceted. One, he uses the 15-year average return on one dollar invested. Thus, the figure for 1900 is the return on one dollar from 1900-1915. This approach effectively removes the most important aspect of investing: time. A return on an investment is not linear. That is, the return in 1940 is compounded on top of the return on 1900. His model doesn't do this. It effectively discounts 1901's return by 1900's return. Basically, it's inaccurate propaganda.

His math is the Average Return= Σ (ri)^n/n where i is the particular year. To be mathematically accurate he would have to raise the return on investment i to the 127'th power and divide by 127. Instead, he only raises to the 15'th power, but still divides by 127. Apparantly, n does not equal n where he lives. It's bogus math.

Oh, my source for this data is "Fundamentals of Investments: Valuation and Management", 3rd Edition, by Dr. Charles Corrado and Dr. Bradford Jordan. Page 15 (elementary stuff).

Also, according the article you linked, a dollar invested in 1925 would be approximately $97.72 in 2000.
FV= PV(1 + r)^n

However, in real life, $1 invested in 1925 would be, depending on market-capitalization:
Large-cap: $1,775.34
Small-cap: $6,816.41
Source: Ibid, page 8.

Why is the figure in the article so wrong (1,700% or 6,800% depending on market cap)??? Because the highest power (n) that he ever raises to is 15. Again, it's propaganda.

The only way you would get the minimal returns in the article would be to invest money this year in account A. Then, invest all 2006 money in account B, and so on. In 2020 you pull all the money out of account A, and in 2121 pull all money out of account B. In real life, investements are put into one account year after year, and interest compounds year after year.


And again, for probably the tenth time now, the Great Depression was not caused by margin trading or even by the stock market crash. What caused the Depression was the Federal Reserve tightening money supply in the face of the '29 crash and the subsequent run on the banks. It was the destruction of the nation's banking system that caused the Depression to become severe and to linger. We've learned the lessons of this era, which is why the stock markets can now deflate drastically and not even cause a lengthy recession, let alone a ten-year depression.

I didn't say that the depression was caused by the exclusively by the market. I said "The great depression was caused, from the market side, by a couple of factors." I also said "a depression of the markets can't happen because of the market itself." I am fully aware that the fed system of the day caused the run on the banks. However, I contend the both the FED and the market caused the depression to linger.

My area of expertise is investments and markets. It's not a good idea to use biased editorials riddled with incorrect math as your source.

[IJ Reilly]

Well you might want to drop a note to the economist at Brookings (PhD, Yale) who wrote this article and tell him he's writing propaganda and doesn't understand "elementary stuff."

BTW, I know why he used a 15-year trailing average. I think that's pretty "elementary stuff" too.

[iGary]

I'd happily take the 15% my employer and i pitch into the system each year and do with it what I see fit.

Not real keen on the government telling me they know how to manage my money better than I do.

[mactastic]

I'd happily take the 15% my employer and i pitch into the system each year and do with it what I see fit.

Not real keen on the government telling me they know how to manage my money better than I do.

And what do you propose to do with those who take their money and do something stupid with it?

[zimv20]

I'd happily take the 15% my employer and i pitch into the system each year and do with it what I see fit.
that's how it's been for some time and is not changing, if you're talking about 401k's, SEP's, et. al.


Not real keen on the government telling me they know how to manage my money better than I do.
just out of curiosity, what's the beta of your portfolio?

[jadam]

I'd happily take the 15% my employer and i pitch into the system each year and do with it what I see fit.

Not real keen on the government telling me they know how to manage my money better than I do.

To bad under Bush's proposed system the government is going to be putting it where it sees fit. Not where you see fit.

[Xtremehkr]

I know Bush has been "pushing" for this, but what exactly does Bushs plan entail. I've yet to see in any detail exactly what it is he is proposing. Other than the fact that Bush is promising wonderful things, has there been a definitive plan outlayed?

Cause if the plan comes after support is given, you are being suckered for sure. Everyone knows that you read the fineprint before signing. I've yet to hear why this is going to be so wonderful, let alone the fineprint that is sure to come with it.

Come on people, at least request to see the contract you are buying into.

For everyone else, Kudos on your skepticism.

[zimv20]

has there been a definitive plan outlayed?

no, but an administration official this last week said there'd be benefit cuts. can't seem to find a link right now, but the post, among others, carried it.

[daveL]

'nuf said (and I'm not young).

[zimv20]

seems there're more details than i'd thought. and it's not good news.

link (http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html)


Social Security Formula Weighed

Bush Plan Likely to Cut Initial Benefits

The Bush administration has signaled that it will propose changing the formula that sets initial Social Security benefit levels, cutting promised benefits by nearly a third in the coming decades, according to several Republicans close to the White House.

Under the proposal, the first-year benefits for retirees would be calculated using inflation rates rather than the rise in wages over a worker's lifetime. Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century. The White House hopes that some, if not all, of those benefit cuts would be made up by gains in newly created personal investment accounts that would harness returns on stocks and bonds.

(more)


http://www.washingtonpost.com/wp-srv/nation/daily/graphics/naSocial_010405.gif

[pseudobrit]

http://www.washingtonpost.com/wp-srv/nation/daily/graphics/naSocial_010405.gif

For me (retirement age coming a half-dozen years before mid-century), living in the US and paying taxes into this system would be foolish.

As far as the "private account" making up the difference? I'd have to gamble on risky stocks to see enough return to make up for what I'd be losing. And of course then I could lose it all.

As I move to Canada and am given a round of "have fun payin' them taxes, traitor!"

...

I'll be smug knowing that while I'm paying slightly higher taxes, they're the ones wasting money.

[iGary]

And what do you propose to do with those who take their money and do something stupid with it?

That happens to be their problem, not mine. It's called accountability. The government is not here to take care of everyone at our expense.

Anyway, I like the opt out idea myself. If you want the "security" of Social Security, sure people should be allowed to put their money into the system.

I'm not suggesting we get rid of Social Security, but to assume I do not know better and take 15% from me each year whether I like it or not...

[iGary]

just out of curiosity, what's the beta of your portfolio?

I have no idea what's in the three or four 401's I have. Not really a priority for me. I'm not even suggesting I would invest the money, but if I want to keep my 15% and go blow it on, say, a new PowerMac, I should be able to.

It's my money afterall.

I never cease to amaze me how willing some folks are to let the government take their money just because they say so - and enjoy it.

My two cents.

[mactastic]

That happens to be their problem, not mine. It's called accountability. The government is not here to take care of everyone at our expense.

So you're another one of those conservatives who believe that the poor and stupid deserve to die?

Also, do you realize that government would basically be forced to take care of seniors who've blown through their private SS money? Any government that allows seniors to starve on the streets would be voted out fast. Not to mention that there is a cost to homeless on the streets, no? Businesses lose money when the streets in front of their shops are populated with panhandlers. The police have to spend time dealing with them. The jails have to accomodate them. Hospitals would have to deal with them. All at taxpayer cost.

Pretending the problem doesn't exist won't make it go away.

I hope you don't drive on the public roads if that's how you feel. You know the funds for those came from a government who is taking care of it's citizens. Water supply? I hope you have your own well and aren't pulling water from some taxpayer-funded aqueduct system. Did you go to public school? Plan on sending your kids there? Glad there's not a hog rendering facility next to your house?

Anyway, I like the opt out idea myself. If you want the "security" of Social Security, sure people should be allowed to put their money into the system.

But what do you do when it's too late to opt out? It's not like all the people who would blow the money would realize it when they are entering the workforce.

I'm not suggesting we get rid of Social Security, but to assume I do not know better and take 15% from me each year whether I like it or not...

Right... and I give up plenty for government programs I don't support. Should we institute a tax policy that allows anyone to opt out of any tax they don't agree with? Or are there times when you have to suck it up and pay taxes you don't like?

If we made paying taxes voluntary, how many people do you think would pay them?

[IJ Reilly]

Here's the real kicker, as far as I'm concerned. If a program of privatization takes effect in any way similar to the current proposal, "optional" or not, many of us would feel compelled to divert the maximum allowed percentage of our payroll tax into these accounts. Why? Because it's already been admitted that benefits will have to be cut to balance the Social Security Fund, even if nothing else is done, short of raising the tax. The privatization effort would only widen the gap between income into the fund and promised benefits -- which of course leads to the need for greater cuts in benefits than would be required without private accounts. So the only way for any individual to protect their contributions to SSI would be to hang onto as much of it as possible. To allow them to be contributed to the fund would be a losing proposition. Anyone who did that would be a sucker.

And that my friends is the bottom line.

[zimv20]

IJ, you got me thinking.

imo, for the past few years the economy has been propped up by consumer spending. bush et. al. know that letting people divert "their" money away from FICA would result in much of it being spent away on consumer goods and services.

and when these spenders reach retirement age w/ no money, it won't be bush's et. al. problem because:
1) they have enough money anyway
2) their generation is all dead

heck, they're probably even citing spending data from that $300 tax rebate joke.

those of us who understand money are already saving outside of SS and making sure that any SS payments are just a small part of our retirement portfolio. i feel sorry for those who spend 100%+ of their income. privatization is _really_ going to hurt them.

[zimv20]

I have no idea what's in the three or four 401's I have. Not really a priority for me.
you just got done telling me that you're a more responsible investor than the government. if you don't know your beta, then i have a hard time taking that seriously.

how's your portfolio done over the past 4 years?

[iGary]

So you're another one of those conservatives who believe that the poor and stupid deserve to die?

No, and I didn't say that.

Also, do you realize that government would basically be forced to take care of seniors who've blown through their private SS money? Any government that allows seniors to starve on the streets would be voted out fast. Not to mention that there is a cost to homeless on the streets, no? Businesses lose money when the streets in front of their shops are populated with panhandlers. The police have to spend time dealing with them. The jails have to accomodate them. Hospitals would have to deal with them. All at taxpayer cost.

Again, I never said that people should be left out in the cold, or left to die. But why should we pay for someone elses stupidity? Answer me that.

I hope you don't drive on the public roads if that's how you feel. You know the funds for those came from a government who is taking care of it's citizens. Water supply? I hope you have your own well and aren't pulling water from some taxpayer-funded aqueduct system. Did you go to public school? Plan on sending your kids there? Glad there's not a hog rendering facility next to your house?

I do drive on public roads, which I pay for with gas taxes, vehicle registration fees, state sales and income taxes, federal income taxes (and a billion other taxes). I pay for my water and sewer every month, which I am happy to pay for. My parents paid taxes, which put me through school. And no, I do not plan on having kids, but I'll be happy </sarcasm> to pay for other people's kids to go to school (while they get a tax deduction), when I am not utilizing the public school system one bit - that's fair?

I'm not against paying taxes at all, but I sure don't get anywhere near what I pay for. I should be able to walk anywhere in the town I live without fear of being mugged - I can't. So I pay taxes for police protection and I'm not getting it, but I suppose that's just demanding too much.


What's wrong with allowing some people to opt out, keep their money, and still maintaining a fail-safe for those that eff up - would that make you happy? I wouldn't be happy paying for the people who blew their money, but I'd sacrifice some of my taxpayer money to have the freedom to do what I want with that 15%.

You're just more willing to part with your money; I'm not. ;)

[iGary]

you just got done telling me that you're a more responsible investor than the government. if you don't know your beta, then i have a hard time taking that seriously.

how's your portfolio done over the past 4 years?

Come on.

I have a hard time taking someone who claims I said something I didn't seriously, too.

I never said I was a better investor than the government - please feel free to quote me. I just think I am the person who should be managing it - for better or for worse. I never said a word about my investing savy, but that seems to be all you have to hang on to make you feel credible, but if that works for you, then great. ;)

If I get all my SS money and blow it - that's my deal, isn't it?

[iGary]

heck, they're probably even citing spending data from that $300 tax rebate joke.

I'm sure you sent your check back.

[zimv20]

If I get all my SS money and blow it - that's my deal, isn't it?
no, actually it's mine, because my tax dollars will have to support you when you're old, broke and in need of housing and medical care. you like accountability, and so do i. only in this scenario i'm the only one who's being accountable.

[zimv20]

I never said I was a better investor than the government - please feel free to quote me.
based it off this:

Not real keen on the government telling me they know how to manage my money better than I do.

[zimv20]

What's wrong with allowing some people to opt out, keep their money, and still maintaining a fail-safe for those that eff up
isn't that social security?

(emphasis mine)

[iGary]

no, actually it's mine, because my tax dollars will have to support you when you're old, broke and in need of housing and medical care. you like accountability, and so do i. only in this scenario i'm the only one who's being accountable.

Then we basically agree, right? Why should you be responsible for other people's mistakes?

And you already pay for all of that, and more for the millions of people on the Medi-Care and welfare roles in this country - I'm not against those systems, but it sure doesn't make me happy when someone has 5 kids, and we end up paying for their food, their medical care, their housing...It's not the kids fault, and no I don't want anyone thrown out on the street (especially kids) but I don't have to be happy about it, right?

[IJ Reilly]

IJ, you got me thinking.

imo, for the past few years the economy has been propped up by consumer spending. bush et. al. know that letting people divert "their" money away from FICA would result in much of it being spent away on consumer goods and services.

and when these spenders reach retirement age w/ no money, it won't be bush's et. al. problem because:
1) they have enough money anyway
2) their generation is all dead

heck, they're probably even citing spending data from that $300 tax rebate joke.

those of us who understand money are already saving outside of SS and making sure that any SS payments are just a small part of our retirement portfolio. i feel sorry for those who spend 100%+ of their income. privatization is _really_ going to hurt them.

If I understand where you're heading with this, the plan currently on the table wouldn't allow anyone to spend their 4%, though it isn't clear how they'd be able to invest it, or whether it becomes an asset against which they could borrow, or liquidate, before retirement. (IRAs can be liquidated early early under specific special circumstances.)

The people I see really being hurt by this system are those who elect to stay in "traditional" Social Security because for whatever reason they don't feel comfortable with investing this money. I suspect most people not familiar with managing assets would be among them, as well as people closer to retirement who value predicability over returns. They stand to get really screwed, IMO.

[iGary]

"Not real keen on the government telling me they know how to manage my money better than I do."

Well that really doesn't say anything about investing, does it? You kinda put those words in my mouth.

Managing means if I want to blow it, fine, if I want so invest it, fine...sure maybe people would just say, hey, I'm gonna blow this and still get a fail safe in the end. I don't know how to fix that problem.

I'm not trying to oversimplify a complex problem, but I'd sure like the ability to utilize that money if I wanted to. Wouldn't it be a GOOD thing for people to think a little bit more about their retirement?

So no, I don't want people thrown out on the street, no I don't want people starving, but wouldn't some of you like to have a little bit more control over 15% of your income? That's a lot of dough. :eek:

[IJ Reilly]

Wouldn't it be a GOOD thing for people to think a little bit more about their retirement?

Indeed, it would be a "good thing." Which is why we have at least three flavors of IRA and 401(k) accounts besides. The options for privately managed, tax-deferred retirement accounts are multiple. They are good and popular programs, but mainly accessible to higher-waged people. The Social Security Insurance program was designed to create a floor for people who haven't been fortunate enough to make high enough wages to save much over their working lifetimes, and (more and more in fact) don't have any pension coming their way. SSI keeps them from living in abject poverty in old age. And this it has done successfully for over 70 years.

[zimv20]

Well that really doesn't say anything about investing, does it? You kinda put those words in my mouth.
my bad. didn't know at the time you might want to just spend the money.

wouldn't some of you like to have a little bit more control over 15% of your income?
technically, 7.5%. if FICA suddenly went away, your employer wouldn't up your salary by "their" 7.5%. heck, i bet some employers would lower salaries by up to 7.5%, since employees are used to that sum, anyway.

[iGary]

Indeed, it would be a "good thing." Which is why we have at least three flavors of IRA and 401(k) accounts besides. The options for privately managed, tax-deferred retirement accounts are multiple. They are good and popular programs, but mainly accessible to higher-waged people. The Social Security Insurance program was designed to create a floor for people who haven't been fortunate enough to make high enough wages to save much over their working lifetimes, and (more and more in fact) don't have any pension coming their way. SSI keeps them from living in abject poverty in old age. And this it has done successfully for over 70 years.

Nicely said.

I'd still be interested in an opt out, though. :D

[zimv20]

Then we basically agree, right? Why should you be responsible for other people's mistakes?

first, because we live in a society, and the health of that society is based on how the individuals are doing.

second, there has to be a tax SOMEWHERE to keep people off the street. right now a lot of that is SS. you say, ditch SS so we can enjoy our money, but we'll just have to make a new tax, so that money goes away. whether we call it SS or Foo, we still net zero. what's the point?

[zimv20]

If I understand where you're heading with this, the plan currently on the table wouldn't allow anyone to spend their 4%, though it isn't clear how they'd be able to invest it, or whether it becomes an asset against which they could borrow, or liquidate, before retirement. (IRAs can be liquidated early early under specific special circumstances.)

there'd be some kind of way to get that money, i bet. and i bet a lot of people would, even if it costs them 50% in penalties.

[iGary]

my bad. didn't know at the time you might want to just spend the money.


technically, 7.5%. if FICA suddenly went away, your employer wouldn't up your salary by "their" 7.5%. heck, i bet some employers would lower salaries by up to 7.5%, since employees are used to that sum, anyway.

I guess this issue bugs me so much because I have to pay that additional 7.5% for myself for about 40% of my income (I do freelance writing and photography in addition to my day job.)

That's a big nut when you're paying itself.

All in all, I don't think any of us disagree on this issue that much. And perhaps I'm being a bit selfish, but man the tax man hurts me hard every year, even with a refund at the end of the year.

I just notice it more (perhaps) because I pay those taxes right out of my pocket every quarter. You sure do notice it when you write a check for it every three months, versus it just coming out of one's check. :eek:

[iGary]

first, because we live in a society, and the health of that society is based on how the individuals are doing.

second, there has to be a tax SOMEWHERE to keep people off the street. right now a lot of that is SS. you say, ditch SS so we can enjoy our money, but we'll just have to make a new tax, so that money goes away. whether we call it SS or Foo, we still net zero. what's the point?

I don't think the whole system should be abolished - not at all. But shouldn't you and I be able to opt out and invest those dollars? :confused:

[zimv20]

I don't think the whole system should be abolished - not at all. But shouldn't you and I be able to opt out and invest those dollars? :confused:
no, i don't think so. if SS were simply a retirement program, then i'd say yes. but it pays for more than that, and taking money from it would harm society. remember when you said you don't always feel safe walking the streets? safety's not a binary proposition; it can be much, much worse. and i'm of the opinion that crime goes up in economically depressed neighborhoods.

regarding the self-employment taxes, yes, that sucks. i pay them, too. but i say address that problem separately: recognize that the self-employed contribute a lot to our economy and overhaul our taxes there. starting by eliminating the self-employment tax.

[iGary]

no, i don't think so. if SS were simply a retirement program, then i'd say yes. but it pays for more than that, and taking money from it would harm society. remember when you said you don't always feel safe walking the streets? safety's not a binary proposition; it can be much, much worse. and i'm of the opinion that crime goes up in economically depressed neighborhoods.

regarding the self-employment taxes, yes, that sucks. i pay them, too. but i say address that problem separately: recognize that the self-employed contribute a lot to our economy and overhaul our taxes there. starting by eliminating the self-employment tax.

Sounds like a good compromise...

[zimv20]

Sounds like a good compromise...
if only our elected representatives could come to agreement so easily

[IJ Reilly]

While we're solving all the world's problems, I've got another suggestion. If building assets for people in lower incomes is a virtue (and I'd certain say it is), then how about diverting part of the Earned Income Tax Credit to tax-deferred investment accounts? I'm not sure where the EITC cuts off, but it's meant for the lowest wage-earners in the country, who are precisely the same people who have such a difficult time accumulating assets.

[solvs]

That happens to be their problem, not mine. It's called accountability. The government is not here to take care of everyone at our expense.
How very Christian of you. And actually yes, that's exactly what government is. Law Enforcement, Armed Forces, schools, Medicare, and yes... :eek: Social Security.

It's my money afterall.
No, it isn't. It's an insurance plan, not an investment plan. You want to invest? Invest. No one is stopping you. But right now your money is going towards seniors who paid for their parents, and grandparents. Where does that money come from when the government takes your money, and invests it in something else? That's right, and your tax money is spent to make up the difference. While other programs are cut, some you may actually use, and the debt still spirals out of control, which you'll have to pay for down the road as higher taxes just to pay the interest on what's being paid now. Then they have to pay for those who lost their money when the stock market crashes or face a new Depression. All while your money is in the hands of those responsible for things like Enron. Meanwhile, while you're looking to the Federal Government for a hand out because your job at Wall-Mart barely pays for your medical bills, as people who are your age now are complaining because their money is wasted on paying for some old guy's pills and some politician is telling them that their money shouldn't be spent on programs they don't care about while they waste billions on poorly planned wars and tax breaks to people and corporation who don't need them.

I'm amazed at what people complain about their money going toward.

Why should you be responsible for other people's mistakes?
Because that's what you do in a civilised society. Especially when that mistake is due to misunderstanding a government program, and greedy corporations mismanaging your money, and a government who does little to stop them from doing so. It isn't as easy to accept when it's your mistake, even though it actually isn't all your fault. Again, ask those who lost their pensions to company's like Enron.

Sounds like a good compromise...
Glad you can compromise. Zim's idea, and many others, actually might help. Others have been mentioned here, like raising the limit to $250k. But Bush doesn't want to raise "taxes". He has his mind set on it as a crisis that needs to be fixed, and we all know what happens when he has made up his mind. Right or wrong. Kinda funny that he waited until after he was re-elected to start pushing this. Seems to me, a lot of seniors that voted for him may have thought twice.

Thankfully, it doesn't look like he has enough capital to win this battle. Even his own people are opposed to it. Seniors tend to vote in droves, and Congress have to worry more about losing their jobs come next election.

[kuyu]

The longer this thread gets, the more hopeless I begin to think the next four years are going to be. Best I can see, the arguments are breaking along party lines as such:

Left: What crisis? There's no crisis. SS is fine for at least 50 years, and a simple tax hike on evil rich people would solve everything anyway.

Right: We are all doomed. SS is going to dry up in 3 days and we will all die of starvation in roughly 6 days.

However, the problem here isn't so much each parties stance. Rather, the critical issue is each parties view of the other's position. It goes something like this:

Left: Bush is using his old tried and true fear tactic to rally the people behind him. He will do anything to keep from raising taxes on his cronies at the country club. The only people who will make any money are wall street power brokers.

Right: Sour grapes. They can't stand the fact that they lost (twice). Moreover, SS was their invention and they sure don't want to let us fix it. They don't oppose this because it won't work. They know it will, and we will get all the credit.

Now, with that on the table I'm going to propose a consensus. Raising payroll taxes would do much to alleviate the growing liability that is SS. I propose raising the cap to $180,000/year. If this new stream of taxes is actually used to pay for SS, we could grow a nice little nest egg over the next 5 years. This money could be used to cover the initial "deficit" caused by a partial privatization plan. I know, I know, privatization will kill us all but please hear me out.

The argument against privatization, IMO mirrors the argument for the war on drugs. Sure, some people are too stupid to know that cocaine will kill them, but the vast majority are not. Similarly, some people are too stupid to know that putting all your money in failure.com is a dumb idea, but most are not.

Liberals are using the most conservative estimates of SS power, while simultaneously using the most liberal estimates of its cost. Republicans are doing the exact opposite. That's why their figures are SO different. It doesn't take a mental giant to see where this whole thing comes apart.

If the left uses the most liberal estimates of the cost of privatization, they have to assume that most people are going to opt in. From my talks with people under 40, most will. So partisan opposition to something that most people support is not a great idea for an already weakend party. Unless the Democrats find a way to play give and take, instead of the sour grapes game, this thing will come back to haunt them in 2008.

Likewise, Bush's rabid opposition to raising the payroll tax is silly at best. New programs cost money. The government doesn't have any money. Luckily, this program will pay for itself in the long-run (MBA president!). However, this will require short-run deficits. My message to Bush: It's called a sunset clause. Learn it, know it, live it...

[zimv20]

link (http://www.reuters.com/newsArticle.jhtml?type=politicsNews&storyID=7547817)


WASHINGTON (Reuters) - Fifty-six percent of Americans think the stock market is too risky for Social Security funds, according to a Newsweek poll released on Saturday.

The poll signaled a tough sell for President Bush as he promotes his plans to change Social Security and allow workers to shift part of their payroll taxes into private stock and bond accounts.

The 56 percent who were wary of putting retirement money into the stock market contrasted with 36 percent who said such investing was a "necessary risk to improve the rate of return of Social Security funds."

Bush made his bid to remake the 70-year-old Social Security program the centerpiece of his State of the Union address on Wednesday. Then he set off on a two-day trip to pitch his plan in North Dakota, Montana, Nebraska, Arkansas and Florida, all of which supported him in the November election.

Social Security provides benefits to 45 million Americans, and millions more are nearing retirement.

Bush bases his case for change on his contention that Social Security is headed for bankruptcy -- a characterization that Democrats say exaggerates the problem and amounts to a scare tactic.

The Newsweek poll did show that 65 percent of Americans agreed with Bush that Social Security faces a crisis. But they were split on what to do about it.

Thirty-six percent of those surveyed opposed Bush's proposals, 26 percent approved them, and 30 percent said they were not aware of them.

In addition to private accounts, Bush said he thinks there should be "permanent" changes made to the structure of Social Security to improve its financial viability and said he was open to ideas such as limiting the future growth of benefits.

The Newsweek poll was conducted on Feb. 3-4 for publication in the magazine's Feb. 14 issue. The poll included 1,009 adults.

[IJ Reilly]

Simple in Concept, Baffling in Practice?
Tom Petruno

If the devil is in the details, the nation can expect a hellish time once Congress starts writing proposals for private Social Security investment accounts.

President Bush is pitching this as a simple idea: Let the people control a chunk of their Social Security savings.

The concept may be simple, but the execution threatens to be mind-numbingly complicated, if the proposal flies.

Consider this, for example: You're 23 years old, and you think Bush's plan is spectacular. You relish the idea of investing some of your payroll taxes in the stock market, even though it means you would surrender part of your future Social Security benefit in retirement.

But what if, at age 33 or 43, your views change? Could you opt out of the private account?

The answer: Sort of, according to Bush administration officials. (More on this later.)

Here's another question: Would the money that accumulates in a private account be yours to bequeath to your spouse or family?

The president says you could count on that. But there's a hitch: The government assumes that part of the sum you build up would be turned into an annuity, generating monthly payments throughout retirement. That part wouldn't be inheritable.

None of this necessarily means private accounts are too much trouble to try. We know they're doable because other countries have introduced them — Chile, Britain and Sweden, among others.

But the United States would by far be the biggest experiment in the partial privatization of a government retirement system. So in terms of the long-run health of the global economy, it will matter a lot more whether a U.S. privatization plan leads to better retirement years for its scores of millions of future seniors than whether, say, Sweden's plan does for its relatively small population.

With so much at stake, it make sense for both supporters and opponents of private accounts to understand how they would work, and what people's practical (i.e., real-world) concerns might be relative to the ideological appeal of giving Americans more control over their Social Security savings.

Here are some of the selling points the Bush administration is using in its pitch for private accounts, and some of the details that are obscured by the sound-bite summaries of the proposal:

•* It would be your money. You'd invest it, and it would be yours to keep when you retire. Sounds simple enough. The administration wants a voluntary program that would allow workers to divert up to 4 percentage points of their Social Security payroll taxes into private investment accounts each year, limited to $1,000 in the first year but rising modestly thereafter.

The administration envisions that, at least early on, workers would have a limited choice of broadly diversified stock and bond funds.

"Best of all, the money in the account is yours, and the government can never take it away," President Bush said in his State of the Union address last week.

But things would get more complicated when the time comes to draw money out of the accounts. It still would be your money at that point, but you wouldn't be able to simply walk away with the sum total.

Instead, the government would require you to annuitize some portion of the total so that it comes to you in pieces each month for the rest of your life. The amount to be set aside as an annuity would depend on what you would be receiving in traditional benefit payments from the Social Security system, which would be reduced to account for what you've contributed to your private account.

Essentially, the government's goal is to make sure there is some minimum amount coming to you each month — and that you can't run off to Vegas with your life's savings in hand.

That also means you couldn't bequeath whatever portion of your private account is annuitized. "If you buy an annuity and die early, obviously, that limits the amount that [you're] able to pass on" to heirs, a senior administration official said in a background briefing for the media last week.

Michael Graetz, a law professor at Yale University, coauthored a recent report for the National Academy of Social Insurance on the issues that would be involved in setting policies for retirement draw-downs from private Social Security accounts. The study runs for 240 pages — a measure of the complexity of the topic, Graetz said.

"People have thought a lot about the accumulation phase of these accounts but not about the payout stage," he said.

•* The program is voluntary. No one would be forced to choose private accounts. But what if the idea begins to look less appealing years after you've bought into it?

Asked about an opt-out clause, the administration official at the background briefing put it this way: A worker using a private account could effectively move to a neutral position by shifting all of the assets in the account to Treasury bonds.

How would that be neutral? The administration assumes that you would earn a 3% real (after inflation) annualized return on Treasury bonds over time. That's exactly the amount by which your traditional Social Security benefit would be reduced for participating in private accounts, under the administration's assumptions. So you would come out even, the official said — as if you hadn't taken a chance on a private account.

Would it work that way in practice? How many workers would understand the concept? Those details are yet to come, or are simply unknowable.

•* You'd just have to beat a 3% real return with your private-account investments to top what Social Security would pay you. Herein lies the real appeal of Bush's idea: the chance to earn more than what the government would be paying you in traditional Social Security benefits.

If the stock market gains 7% a year, on average, and inflation is 3% a year, the real return would be 4%. Under the administration's proposal, that would be 1 percentage point better than what you'd earn by leaving your money in the Social Security system (because, as noted, the system assumes a 3% real return on Treasury bonds, which is what the system owns).

Obviously, if you invest well, and the markets cooperate, you could come out ahead with private accounts. You also could do worse than sticking with Social Security as is.

How many people invest well to begin with? And how many think they can do so without having to pay someone (a financial planner, broker, etc.) to help them?

"You don't need anyone to tell you what your Social Security benefit will be," said Teresa Ghilarducci, an economics professor at the University of Notre Dame. "But with private accounts, you will need someone to tell you how much you're going to have" under different market scenarios.

For millions of Americans who don't now have the wherewithal to invest, private Social Security accounts are touted by proponents as a way to introduce investing precepts and to encourage more saving.

Yet for many people, investing decisions are nothing but a headache, and always will be.

Said Craig Copeland, head of Social Security research at the Employee Benefit Research Institute: "You can send them an account statement, but you can't make them read it."

http://www.latimes.com/business/la-fi-petruno6feb06,1,6266192.column

[pseudobrit]

Hey, I've got an idea.

Why doesn't the federal government start its own IRA type programme?

Let's say you can out away a certain amount of money each year, tax free, with an upper cap on the total investment. When you withdraw the funds after retirement, they're also tax-free. (!)

To be fair, it would obviously need to vary depending on age, so if you're older you can put away a higher percentage each paycheck.

The wealthy would use it as a tax shelter, but I think if we kept the overall savings cap at around $500,000 we'd be okay with losing that revenue.

This is, of course, totally separate from SS, though we could "hide" the cost in the same deduction line in a paycheck.

[kuyu]

Hey, I've got an idea.

Why doesn't the federal government start its own IRA type programme?

Let's say you can out away a certain amount of money each year, tax free, with an upper cap on the total investment. When you withdraw the funds after retirement, they're also tax-free. (!)

To be fair, it would obviously need to vary depending on age, so if you're older you can put away a higher percentage each paycheck.

The wealthy would use it as a tax shelter, but I think if we kept the overall savings cap at around $500,000 we'd be okay with losing that revenue.

This is, of course, totally separate from SS, though we could "hide" the cost in the same deduction line in a paycheck.

Good idea! What you're proposing is a sort of an IRA/roth IRA hybrid. I like the idea of linking contributions to age and income. Also, the cap is a good idea, but it will have to go up over time. The best part is the contributions tied to income.

How's this? Raise the cap on SS to $180,000. Up the max benefit to $1500/month. Institute these accounts you've described, but have the contributions come after SS taxes. The money could be put into certain accounts deemed worthy (beta under 1). A nice bond/stock mix would be optimal.

This would leave SS as the saftey net that it is (and fix the solvency problem), but still give people an incentive to save for themselves.

This is the kind of compromise we need nowadays. Good thinking Brit. :)

[zimv20]

there was a story in the new york times this weekend about social security and they had an interesting graph. i would have posted it, but the forums were down, and i can't find it now. ack.

anyway, the graph looked at current SS vs. privatization and account management fees.

with fees at zero percent, for the test case they had (something like current age 30 earning about $35k / yr in 2005 dollars, each year), SS would pay about $1700/mo, priv about $2100.

but once fees got to (iirc) 3%, it was a wash.

fyi -- the chart assumed annual returns of 3% and 7.9% .

[kuyu]

with fees at zero percent, for the test case they had (something like current age 30 earning about $35k / yr in 2005 dollars, each year), SS would pay about $1700/mo, priv about $2100.

but once fees got to (iirc) 3%, it was a wash.

fyi -- the chart assumed annual returns of 3% and 7.9% .

Yeah, 7.9% would be a good estimate. I'd bet the betas of the accounts would be about 0.7.

The fees could definately kill the advantage. That's one of those "devil's in the details" things. I'd like to see the graph if you can find it. :)

[Xtremehkr]

How come Bush can't recognise other fiscal disasters like our budget deficits and mounting debt. Choosing instead to focus on a system that is not in as much trouble as he claims it is.

It's all a little fishy to me. Meanwhile we get a budget that hides tens of billions of dollars in expenditures. And people trust this guy.

[mactastic]

No, and I didn't say that.

Ok, then please tell me the practical effect of removing SS income from those who survive on it? Where would they live? What would they eat? How many of them would there be?

I asked you that question because I danced around it for weeks with a previous poster who, when asked outright, finally said that he didn't care if the poor and stupid died as a result of not having a savings account or the ability to afford private health care. I wasn't assuming that you are in this catagory, thus the question mark. I just want to know.

Again, I never said that people should be left out in the cold, or left to die. But why should we pay for someone elses stupidity? Answer me that.

As was touched on, because to some extent our society is only as strong as it's weakest members. Some end up in prison. Some end up on medication for sever psychosis. Some are functional members of society who live on the edge of some major issue or problem. What does a society do about them? Not every citizen can be productive, some are disabled mentally or physically. Do they deserve to live on the streets? Or do we close our eyes and hope that enough private charities step up to adress the problem?

Life is a web, the connections are so integral that you can't simply decide you want to 'opt out' on the assumption that you have no effect or responsibility with respect to others.

I do drive on public roads, which I pay for with gas taxes, vehicle registration fees, state sales and income taxes, federal income taxes (and a billion other taxes). I pay for my water and sewer every month, which I am happy to pay for. My parents paid taxes, which put me through school. And no, I do not plan on having kids, but I'll be happy </sarcasm> to pay for other people's kids to go to school (while they get a tax deduction), when I am not utilizing the public school system one bit - that's fair?
This have been done to death here, but the roads are only partially funded by use-taxes. The federal (and state) government subsidizes roadways with general fund monies. So if you don't use them, should you be able to 'opt-out' of those taxes? Do you get any benefit at all from a well educated society around you?

I'm not against paying taxes at all, but I sure don't get anywhere near what I pay for. I should be able to walk anywhere in the town I live without fear of being mugged - I can't. So I pay taxes for police protection and I'm not getting it, but I suppose that's just demanding too much.

Not at this point in your life. But there will come a time when you will collect more than what you put in.

What's wrong with allowing some people to opt out, keep their money, and still maintaining a fail-safe for those that eff up - would that make you happy? I wouldn't be happy paying for the people who blew their money, but I'd sacrifice some of my taxpayer money to have the freedom to do what I want with that 15%.

Ok, but if the system is in crisis and you allow people to opt out, how does that 'maintain a fail-safe'? It just means there's less money in the system.

And what you are proposing is that you be allowed to opt out so you can spend you 15% the way you want, yet you still think there will magically be enough money for this 'fail-safe'?

You're just more willing to part with your money; I'm not. ;)

No, you just care less about you fellow humans. ;)

[solvs]

How come Bush can't recognise other fiscal disasters like our budget deficits and mounting debt.
He can. He's just choosing to deal with that by cutting unnecessary things like schools, Medical care for the poor, veterans benefits. I wish I was kidding. But hey, let's spend a trillion dollars screwing people out of their SS and then give more upper class people tax cuts.

[mischief]

Corporatize the Federal Government.

Issue stock certificates to taxpaying citizens and issue shares in the Federal Reserve as a 401k.

[zimv20]

from a USA Today poll (http://www.usatoday.com/news/polls/tables/live/2005-02-07-poll-results.htm#socsec)


13. Based on what you have heard or read, in general, do you approve or disapprove of George W. Bush’s approach to addressing the Social Security system?

approve: 44
disapprove: 50
no opinion: 6

14. Assuming there would be no change in Social Security benefits for those who are now age 55 or older, do you think each of the following would be a good idea or a bad idea to address concerns with the Social Security system?

[ed. - a lot to type here, so i'm just doing the "Good Idea" column]

Limiting benefits for wealthy retirees: 68

Requiring higher income workers to pay Social Security taxes on ALL of their wages: 67

Further reducing the total amount of benefits a person would receive if they retired early: 40

Increasing Social Security taxes for all workers: 37

Increasing the age at which people are eligible to receive full benefits: 35

Reducing retirement benefits for people who are currently under age 55: 29

[atszyman]

The White House has begun to acknowledge one reality of that proposal, those accounts would not fix the system's financial problems. Other, more painful, steps would be needed to keep the federal retirement system from running short of money as predicted starting in the year 2042.

Heard the above on NPR this morning. Can't find a print version for free so I transcribed from the free audio available here (http://www.npr.org/templates/story/story.php?storyId=4507037).

So according to the WH, the private accounts don't fix the system and you have the same shortfalls starting in 2042. So what is the point of the accounts? Bankrupting the federal government? Elimination of Social Security? Tying retirement into the stock market so that any attempt to further regulate business can be attacked as a threat to grandma's income?

If the system fails with or without the private accounts why should we go further into debt to effectively do nothing?

[skunk]

http://www.counterpunch.org/lindorff03032005.html
Why Do the Democrats Pamper Greenspan?

By DAVE LINDORFF

Any Democrat who still offers praise for Alan Greenspan after his latest propaganda supporting the Bush attack on Social Security should be dumped by the party and voters alike.

Greenspan has always been a Republican agent at the Federal Reserve, even in the Clinton years, but his support for private Social Security funds, and his latest warning that cuts in benefits for retirees need to be considered are both scientifically unjustified and unsupported, and politically craven, especially coming from a man who himself is already collecting the maximum Social Security benefit and who stands to walk away with a $100,000/year federal pension on top of that when he finally retires as Reserve Board chairman.

Democrats in Congress have largely gone along with the charade that the reserve board chairman is above politics and that his deliberately chimerical statements on interest rates and fiscal and monetary policy are received wisdom.

In fact, Greenspan contributed mightily to the collapse of the stock market following the popping of the Internet bubble, by failing to act to limit stock speculation in the mid and late 1990s--something he could have easily done without even touching interest rates, by simply increasing margin requirements on investors.

His pronouncements on the financial stability of the Social Security system are no more prescient or sound than his economic forecasting skills, which have been repeatedly found wanting.

It is probably worth remembering that when Greenspan left his private career as owner of a pension management firm, Townsend Greenspan, and went into government service, he left a company run into the ground because of his poor investment advice and market forecasting abilities. By the time he left, Townsend Greenspan had lost all its clients, who had all sought more capable advisers with better records.

American workers should remember all this when they read news reports quoting Greenspan as saying that the Social Security system cannot be expected to pay promised benefits to future retirees.
Food for thought.

[themadchemist]

You mean, as opposed to the shaft that was (and is) ALREADY coming because the system will be insolvent by the time we (I'm 36) hit retirement age? Personally, I don't see how ANYTHING can possibly make Social Security any worse than it already is for those younger than 40.

I've NEVER counted on receiving any Social Security; so any plan that extends the life of the system and makes it possible for me to derive some personal benefit from it is welcome by me.

So you're willing to accept this scheme, along with its two trillion dollars in transition costs?

[mactastic]

Not to mention that his belief that he will get nothing from SS upon retirement is false. Even if NOTHING IS DONE the SS system will be able to meet 70-80% of it's obligations at that point.

The WH, the right wing echo chamber, and the MSM are trying to foster the impression of an empty purse. Apparently it's working on some.

[crazytom]

I just don't trust anything being said right now...from ANY politician. They don't care, they're covered for life no matter what happens---put them on our SS plan, then see what happens!

Personally, I don't expect any SS when I retire. I don't count it in any of my retirement calculations. I also can't see the government controlling a large portion of money as 'an investment' for citizens retirement. Hell, the current available SS money has been 'used' to reduce the deficit (on paper, I know, but still...).

I buddy of mine sent me this: link (http://www.321gold.com/editorials/laborde/laborde030705.html) . The guy's a gold bug, but makes some good points. Here's an excerpt:

(about how we got in this SS mess):

A surplus developed and it was to be invested by the social security bureaucrats so that it would be available when the boomer generation retired. As that surplus grew our leaders in Washington DC could not stand it. They were like an alcoholic guarding a liquor store. They added even more benefits such as SSI (crazy pay). They added a disability rider. They even added health care in the mid 1960's. In the early 1970's benefits were bumped up 20% after being increased 25% faster than wages every year since 1967.

The rest of it is a good read...

[~loserman~]

Personally I wish social security would just go away.
I say that as someone who has been paying into the system for 30 years.
I would be perfectly happy to have the system fold and will be happy not to ever receive any benifits from it. Especially if my children who are entering the work force wouldnt be stuck with this terrible overburdened system.
I am completely willing to continue paying out for my remaining 20 years or so, but hope my kids dont have to.

I do realize the intent of the system and understand its roots. While I think the idea is a noble one, I do not believe the SS system can be sustained.
Especially since the number of people who qualify for benifits have been increased over the years.
I dont know the numbers exactly so you guys can beat me up over it if you wish, but I think it is something like this....
When SS was started there were over 16 people paying for every 1 person receiving benifits while now it has dropped to half that and when my generation retires it will get even worse.

[IJ Reilly]

The system has functioned successfully for 70 years. I wonder why, now, so many people are prepared to write it off entirely as completely dysfunctional and not only incapable of being sustained, but unworthy of being sustained.

[zimv20]

I wonder why, now, so many people are prepared to write it off entirely as completely dysfunctional and not only incapable of being sustained, but unworthy of being sustained.
that's how it's being sold, eh?

a GOP senator (i forget which one, sorry) was pleading the case on NPR last week, with that bit that goes, "in 2018, the system will begin to pay out more than it takes in."

it's a good scare tactic, and it should be some cause for concern, but that factoid is the basis for the argument that the system is completely broken. i say, guess what, most americans spend more than they earn, but i don't see that little fact throwing many of them into an existential quandry.

if my takehome is, say, $3000 / month, and i spend $3100 this month, i don't quit my job and go back to school (on borrowed money, no less). i eat a few less pizzas and try again next month.

all this panic stuff has got me annoyed.

[blackfox]

Quick! Grab the pitchforks and the torches...there's a run on the bank.

I still don't understand the propensity to think that a corporation is preferable to government when it comes to trusting one to secure your money.

Which one has more checks-and-balances on it? Which one is based on profit-margins?

I am not very economically-sophisticated, but people seem to trust the government to insure their money (via FICA) in the banking system and happy to lend their collective monies to said system for whatever reason, allowing the bank(s) to profit off the arrangement.

Yet if you allow the government to both insure your money and be the bank (simplistically speaking) with regard to SS monies, with any profit(s) remaining in the system, this is horrible, a bad idea and the government is untrustworthy.

I have a lot of questions surrounding this issue, but this basic one has me the most perplexed. SS, as I understand it, is an insurance policy on the long-term economic health of society. It is preventative-care. Who has more interest in society's well-being - the government of a representative democracy (flawed as it may be), or a private for-profit consortium of corporations?

It seems so obvious to me, specifics aside. If someone wants to explain where I am wrong here, please do.

[~loserman~]

The system has functioned successfully for 70 years. I wonder why, now, so many people are prepared to write it off entirely as completely dysfunctional and not only incapable of being sustained, but unworthy of being sustained.

IMO here is the problem.
Baby Boomers comprise 25% of the population. According to the Census bureau the average workforce age now is 40.5 years old. This is an increase in the workforce age from 34.7 years since 1979. Thefore it is reasonable to assume that baby boomers comprise the largest portion of the workforce.
Also according to the Census Bureau the average job tenure for baby boomers is 13 years, 50% of them have worked for the same employer for 10 years and 25% for 20 years.
It is also reasonable to assume that the baby boomers are at their highest earning potential right now after being in the workforce for 25 to 35 years. This demographic group are the ones who currently support the majority of payments into SS today(besides their employer matching funds)
As this group retires the rest of the workforce will not be able to match the money that this group was putting into the system or will be taking out of it. Add to this that life expectancies have been going up and the problem compounds.
The only real solution to the problem that I can see is to raise payroll deductions for SS to 20% or more and cut benifits.
I cant understand how people are happy to saddle their children and grandchildren with this financial burden.


Social Security History

1935 - The Social Security Act, which covered workers in commerce and industry, was signed by President Roosevelt.

1937 - The Federal Insurance Contribution Act (FICA) required workers to pay taxes to support the Social Security system. Payroll taxes were 2%.

1939 - Social Security was expanded to cover dependents and survivors. Payroll taxes were 2%.

1950 - Coverage was expanded to job outside of commerce and industry, and benefit levels were increased. Payroll taxes were 3%.

1956 - Disability Insurance was created, and expanded over the following years. Early retirement at age 62 for women was permitted. Payroll taxes were 4%.

1961 - Early retirement at age 62 for men was permitted. Payroll taxes were 6%.

1972 - Automatic cost-of-living-adjustments (COLAs), which index benefits to inflation, were introduced. The formula to calculate increases initially overstated inflation by 25%, and people born between 1910 and 1916 received an unintended windfall. Payroll taxes were 9.2%.

1977 - The mistake in the benefit formula was corrected. The "notch" refers to the difference in benefits paid to the group that received the windfall and those who retired following the formula correction. Social Security was thought to be actuarially sound. Payroll taxes were 9.9%.

1983 - The National Commission on Social Security Reform was created in response to the actuarial unsoundness of the system. The commission called for 1) and increase in the self-employment tax; 2) partial taxation of benefits to upper income retirees; 3) expansion of coverage to include federal civilian and nonprofit organization employees; and 4) an increase in the retirement age from 65 to 67, to be enacted gradually starting in 2000. Again, Social Security was declared actuarially sound. Payroll taxes were 10.8%.

1985 - The Social Security Trust Funds were moved "off-budget" so that the funds earmarked for the Social Security system would be tracked separately from the rest of the budget. Payroll taxes were 11.4%.

1986 - COLAs were increased to respond to minor levels of inflation. Payroll taxes were 11.4%.

1993 - The amount of taxable benefits for upper income retirees was increased to 85%. Payroll taxes were 12.4%.

1996 - The Social Security Trustees' Report stated that the Social Security system would start to run deficits in 2012, and the trust funds would be exhausted by 2029. All members of the Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarially sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%.

1997 - All members of the presidentially-appointed Social Security Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarially sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%."

1999 - The Social Security Trustees' Report stated the Social Security Retirement System's unfunded liability increased by $752 billion since the 1998 Trustee Report was published.


Notice that payroll percentages have increased constantly. Also when looking at the history of the program remember that the baby boomers retiring is still looming.

[IJ Reilly]

Yeah, I guess I'm supposed to panic. You know, if you can get beyond the highly amplified Bush blather on this issue, you'll discover that that Social Security Fund can be secured as far out into the future as the actuaries think is reasonable to forecast by some combination of measures, including increasing the retirement age, adjusting the COLA and raising the taxable income cap. Even though we baby-boomers like to believe we'll live forever, in our heart of hearts we know it isn't so. The actuaries are sure of it.

[zimv20]

Social Security History
link(s), please.

[~loserman~]

Yeah, I guess I'm supposed to panic. You know, if you can get beyond the highly amplified Bush blather on this issue, you'll discover that that Social Security Fund can be secured as far out into the future as the actuaries think is reasonable to forecast by some combination of measures, including increasing the retirement age, adjusting the COLA and raising the taxable income cap. Even though we baby-boomers like to believe we'll live forever, in our heart of hearts we know it isn't so. The actuaries are sure of it.

History has shown this to be the case but how many times do we have to keep increasing the taxable cap, lowering benefits, and raising the retirement age before some people will begin to realize it is a broken system.
For instance look at how the payroll tax has increased from 2% in 1935 to the current 12.4% why is this increase necessary?(because the ratio of people paying into the system vs number receiving benefits have has decreased and other types of benefits have been added such as disability and survivor benefits.) Will it go to 18% as recommended by Clinton's Social Security Advisory Panel in 1997?
On one side the AARP applauded Clinton for getting Benefits changed so that those 65 or older can start receiving SS at full benefit level even if they haven't left the workforce. Was this a long term good decision? To me it wouldn't seem so in light of your suggestions as to how the system can be tweaked to keep it solvent.
Do you think the AARP will really stand for the raising of retirement age to 70 or above? Or doing away with the 62 early retirement option?
Can more money be raised by removing payroll caps and increasing payroll tax? Sure it can but if History shows us anything the payroll tax for SSI will continue to increase.
History will also show that our Government will continue to increase the number of people on the rolls by further expanding the system.
I realize that many here despise the current administration.(I for one agree that they are fiscally irresponsible but they didn't get us in this mess all by themselves.)
Do you really trust our government to act responsibly regardless of which political party controls it?
I understand the transition costs, but what will be the long term result if or when it crashes under its own weight? What will be the cost to our children or grandchildren? Surely their are people with enough intelligence to fix or replace this system. My main question is will people have the foresight or will power to make changes necessary without bowing to political pressure.

[IJ Reilly]

"History repeats itself. That's one of the problems with history." (Clarence Darrow)

You've asked a whole lot of questions, some more relevant than others.

One of the reasons the cost of the system has increased is because life expectancy has increased and so have the benefits paid out by Social Security, courtesy of Congress the COLA. The cap on taxed wages never made any sense, unless one believes that regressive taxation is fair. Some actually do, but I'm not one of them. Taking another look at that issue doesn't seem out of line to me.

It is also not fair to weight the benefits of a government social security system against a privatized system without considering the downside risk of the latter. If the private system fails to pay out as forecasted, who is going to address the problem of more widespread poverty among the elderly? Unless you're an advocate for letting them wander out into a snowbank and perish, you have to know the answer.

If you're really worried about what AARP will stand for, then you can't be in favor of the Bush plan, because AARP opposition is just the tip of the berg. Personally, I'm not too concerned about what AAPR says, because I know if a genuinely fair (as opposed to ideologically pure) Social Security reform plan is formulated, it will be favored by the American people and have at least a chance of passage. In the case of the Bush plan, I believe Americans have correctly detected a snooker.

[crazytom]

Just in from yesterday's FactCheck: LINK (http://www.factcheck.org/article309m.html)

There's a lot to the text...very interesting...here's a portion that suggests a permanent fix:

A*new payroll tax to start immediately on upper-income workers - 3 percent of all wages over the amount already subject to the regular 12.4 percent Social Security tax. Half would be paid directly by the worker and half by the employer. After 2022 the new tax would rise gradually to 4 percent in 2079.


An increase in the amount of earnings subject to the current payroll tax, from $90,000 at present to roughly $105,000 (in today's dollars) in the year 2057.


A gradual increase the basic Social Security payroll tax rate paid by all workers and employers, eventually allowing*the rate*to escalate automatically in line with increases in life expectancy. The Congressional Budget Office projects that the rate would increase from 12.4 percent currently to 12.7 percent in 2025 and 15 percent in 2075.


A reduction in*growth of future benefit levels for those born in 1950 and later , based partly on future increases in life expectancy. CBO calculated that currently scheduled benefits for a typical worker would be reduced by 2 percent in 2025, 12 percent in 2050, and 23 percent in 2105. The cuts would be even larger for upper-income workers.

[~loserman~]

Here is a solution that might appeal to those inclined to redistribution of wealth.
Why not just confiscate the assets of the Forbes 400 richest Americans.
Their net worth is 1 Trillion. That should float the system for a few more years.

[IJ Reilly]

All taxation redistributes wealth. Unless someone knows of a method for running a government without it, then perhaps we should stick to serious terms. This assumes of course that serious discussion is desired.

[~loserman~]

All taxation redistributes wealth. Unless someone knows of a method for running a government without it, then perhaps we should stick to serious terms. This assumes of course that serious discussion is desired.

I disagree. Taxation doesnt necessarily redistribute wealth.
In the strictest terms "redistribution of wealth" has meant taking monies from someone/or some entity and giving it to someone else.

Whereas taxation can be used to finance roads, pay for defence, public education etc..

Any casual reader should have know that my previous post was tongue in cheek while taking a certain position of some to an outrageous conclusion.

As to your comments about serious terms and serious discussion, I have read many of your posts and those of many others in this forum over the last year or so and found them wanting.

[~loserman~]

"History repeats itself. That's one of the problems with history." (Clarence Darrow)

You've asked a whole lot of questions, some more relevant than others.

One of the reasons the cost of the system has increased is because life expectancy has increased and so have the benefits paid out by Social Security, courtesy of Congress the COLA. The cap on taxed wages never made any sense, unless one believes that regressive taxation is fair. Some actually do, but I'm not one of them. Taking another look at that issue doesn't seem out of line to me.

It is also not fair to weight the benefits of a government social security system against a privatized system without considering the downside risk of the latter. If the private system fails to pay out as forecasted, who is going to address the problem of more widespread poverty among the elderly? Unless you're an advocate for letting them wander out into a snowbank and perish, you have to know the answer.

If you're really worried about what AARP will stand for, then you can't be in favor of the Bush plan, because AARP opposition is just the tip of the berg. Personally, I'm not too concerned about what AAPR says, because I know if a genuinely fair (as opposed to ideologically pure) Social Security reform plan is formulated, it will be favored by the American people and have at least a chance of passage. In the case of the Bush plan, I believe Americans have correctly detected a snooker.

Answer me this...
When did I ever say I was in favor of Bush's plan?
When did I ever say anything at all about privatizing SS?

Never mind I'll answer for you. I never did.

[mactastic]

I disagree. Taxation doesnt necessarily redistribute wealth.
In the strictest terms "redistribution of wealth" has meant taking monies from someone/or some entity and giving it to someone else.

Whereas taxation can be used to finance roads, pay for defence, public education etc..

Do you think road building happens in a vacuum? Or does the money you take in taxes get paid out (otherwise known as redistributing) to an earthworking contractor? You've just taken money from someone/or some entity and given it to someone else. You've also created an industry built up around that need, one that will lobby with anything in it's power to not only keep that wealth rolling in, but increasing it.

But I assume you're reference to redistributing wealth refers to the cost of social programs and the 'unfair' burden on the wealthy. I would simply say that a progressive federal income tax is necessary to balance the regressive nature of most other taxes, and flatten the overall tax burden across the spectrum.

Any casual reader should have know that my previous post was tongue in cheek while taking a certain position of some to an outrageous conclusion.

As to your comments about serious terms and serious discussion, I have read many of your posts and those of many others in this forum over the last year or so and found them wanting.

Hey thanks! Nice way to get personal! Great job! Have a nice day.

[IJ Reilly]

Answer me this...
When did I ever say I was in favor of Bush's plan?
When did I ever say anything at all about privatizing SS?

Never mind I'll answer for you. I never did.

When did I say you were in favor of the Bush plan? When did I say you were in favor of privatizing? To beg another question, when did you say you were in favor of anything?

Never mind...

[IJ Reilly]

I disagree. Taxation doesnt necessarily redistribute wealth.
In the strictest terms "redistribution of wealth" has meant taking monies from someone/or some entity and giving it to someone else.

In the same strictest terms, all taxes are redistributed wealth, unless the dollars you pay in taxes somehow return to your pocket -- in which event, it's a zero sum game and you aren't being taxed at all. If those dollars go into somebody else's pocket, then that wealth has been redistributed. The problem with this term is that it's been hijacked by people who insist on using it to describe only redistributions of wealth they don't personally favor. If we're going to use "strict terms," which is fine with me, I'd rather stick to strict functional terms rather than strict political terms.

As to personal attacks, a word to the wise: I think you should know that they are not tolerated on this board; not by the posters and especially not by the moderators.

[mischief]

Personally, I'd like to see some form of accountability for my Taxes. Something like Share-certificates. I'd love to know how much I'm investing in this circus and have a little more control over where it's spent. In short I'd love to see the existing system shifted to a more conventional "Business Model". Perhaps a new moniker is in order: N-Corp. ;) :p

BTW: IJ and Mactastic have provided fair warning.

[mischief]

Here is a solution that might appeal to those inclined to redistribution of wealth.
Why not just confiscate the assets of the Forbes 400 richest Americans.
Their net worth is 1 Trillion. That should float the system for a few more years.

Not quite. We're a several-hundred-trillion-a-quarter spender these days. We're being taxed-and-spent to death by the small government guys who've increased their own pet budgets more in eight years than any of the public programs ever had a chance to. Or perhaps you can find a way that being in the hole as deep as we are justifies reducing input through taxes?

"We're hemmorhaging money! Quick: build in more features, hire more consultants and sell it all below cost!!"

Pointy haired thinking. Our government is now officially Dilbert's company.

[~loserman~]

As to personal attacks, a word to the wise: I think you should know that they are not tolerated on this board; not by the posters and especially not by the moderators.

I never attacked you personally. To attack you personally would be to call you an idiot or to say your comments are stupid.
To say that I find many of your posts without sound logic, or lacking when it comes to serious discussion is just a mater of observation.

I am sorry if you are offended by that, but it just happens to be how I see it.

I further realize that this forum is extremely biased, not very open minded and full of partisan hackery.
So I will refrain from posting or reading here further.

[mactastic]

Well you were doing just fine up until you told 'many of us' that our logic is lacking. But whatever. Bye.

[pseudobrit]

I further realize that this forum is extremely biased, not very open minded and full of partisan hackery.

IOW, you've failed to change anyone's mind and/or your POV isn't shared by anyone here so you're leaving.

Therefore, we're the close-minded ones.

[IJ Reilly]

What I'm hearing is that debating in this forum requires too much effort. I refuse to take that as an insult, even if it was offered as one.

[skunk]

just a mater of observation
The mater of all observations...

[IJ Reilly]

The mater of all observations...

What's the mater with you, pater?

Oh sorry, I might be found lacking again.

[skunk]

Not by me, you won't. :)