Social Security reform

[GameOver]

I really tried to resist responding to your response to my response to your response to my response but can't help myself.  I guess I'm as anal about this as you are.  It appears you are very well informed about this, and for that you get a cookie.  But - you better save that cookie, cuz you might need it when you retire if Bush gets his way.

I did look up the rates as you suggested.  It was a good exercise.  It showed me that the highest marginal tax rate from 80-88 was 50% (Regan).  The highest rate during the Clinton admin was 39.6%.  Bush, now at 35%.  Really, tho, what does this tell you?  Nothing.  How did the other 2,000 volumes of tax code that each respective admin introuduced during their respective terms impact these brackets?  Damned if I know or care since I probably won't be able to change any of it even if I reaaaaally tried.   Just too complicated anyway.  Like I said - better things to do than to try & save the world from Uncle Sam's tax code.  As long as the gov is within my range of tolerance I accept it.  We got a good thing in the US and a little more here or a little less there isn't gonna break me.

The gov doesn't want to mess with SS cuz it's a sensitve hot button topic.  Bush is messing w/it cuz he wants it to be part of his legacy.  Has he even laid out the details of his proposal?

Come on...post another one.  You know you're dying to.  I think we're the only ones reading this post anymore anyway!

[Crazy Cooter]

I'm still reading, took a day off though.

One thing that I keep hearing is:  "It's my money".  No, it's not.  It's the governments money.  If it was "yours", then SS would be passing out checks to next of kin when you and your spouse croaks.  That doesn't happen.

I agree with Drew (what?  ) regarding SS being spent in areas that it wasn't really wasn't meant for on inception of the plan.  But I still say that if SS doesn't disperse that money, than welfare will.  We need to address who is getting this money.  THAT should be the first step in reforming the system.  I'm all for cutting people out of all programs that help "less fortunate" people have a standard of living above people that actually attempt to work and make a living.  I have a relative driving around in a new car and dropping her kids off at daycare each day when she doesn't even have a job.  Doesn't make any sense to me.  She gets child care $$ from SS because the Dad of one of her kids was run over by a car when he was passed out drunk laying on the freeway.  Cut her out.  Make her get a job.  Give her kids to my Aunt.  She's been trying to get them for 8 years anyhow.  This is why SS is failing.  I'm even for upping the age for receiving benefits.  My life expectancy is 74, girlfriends is 80.  Sign me up for 76-78 or so.  Fine with me.  THIS is the reform I'd like to see.  Cut the bloat.

Don't start taking money out of the program though.  That's putting the cart in front of the horse and creating more debt.  Just like the tax cuts that Bush made.  He took money away from the gvmt in anticipation of reducing spending.  Now he isn't reducing the spending.  If we take $$ out of SS, are we going to reduce it's spending?  Doubtful.  My cousin will still get money out of it for child care expenses.  That whole approach is stupid IMO.  All it will do is create a pile of debt now, that we will have to pay back later (probably through some tax on the new accounts created).

Simpler is better:  If output exceeds input, restrict output or increase input.  Anything else doesn't address the problem.

[Crazy Cooter]

Drunk @ UW, I don't know about Senators/House Reps, but in general Govmt employees pay into Social Security.

[MnMCaputo]

This is my first time stepping into the politcal drama of this message board.  For the record, i'm a registered Republican that did not vote for G dub this election.  But on this topic of SS I love the idea that me and my employer ( oddly enough the US govt )  would contribute the same amount as currently going to SS and put in a private account.  i'm 28 and have no doubt that things going in the current direction, i will not get SS, or the $$ amount will be insignificant.  My only issue is, I'm sure i'll have to sign something or "opt in" to a situation where I dont contribute to SS and it goes to private company.  And so will "joe schmo"  and i know that i will use the money as it is intended for ,saving for retirement.  But i cant help think that joe schmo will not, then in 30 years, i'm gonna have to pay for his dumbass in some other social program created.  And all the bleeding hearts will go on with the..... "oh hes had a tough life and the man was keeping him down"  This my first post on politics here, so all the ted kennedy lovers and rush righties, be gentle   lol

[DrewKaree]

I'm still reading, took a day off though.

Can't help it.  I figured I'd underwhelm you with a deluge of information    GameOver, I'm working on something for you...trying to condense it for you, in case you wanna print it out, so you don't run out of ink

One thing that I keep hearing is:  "It's my money".  No, it's not.  It's the governments money.

It's a tax that is removed from the money you earn.  If someone doesn't work for their entire life for some reason, and are able to receive Social Security Insurance for some reason, the government pays them from money obtained from you, me, and a working fencepost.  Indeed, it's not THAT person's money, as they would have never paid into the system.  To remove from my paycheck, however, IS taking my money.

If I call in dead, the government no longer gets money from me, it's taken from elsewhere.  The government doesn't keep paying in for me, just as they don't keep paying OUT for me.

If you view the money the government recieves due to taxation as "the government's", that's a difference in opinions for another thread, but the government doesn't produce enough money to cover the USPS, we pay for THAT, they use money from you and I to handle the obligations they set for themselve due to various programs they've enacted.  If they did MAKE money, you could tell me that it's the government's money.  Obtain revenue has to come from you, me, and every other Joe Taxpayer.  That means they are taking my money, your money, and every other Joe Taxpayer's money.  They even passed laws making it a requirement to do so.  Go ahead, try keeping all of the money you earn each week.  The government simply takes what they wish from your check to do with what THEY wish, from you and I...our money.

Cut the bloat.  Just like the tax cuts that Bush made.  He took money away from the gvmt in anticipation of reducing spending.  Now he isn't reducing the spending.

The reduction in spending is related to Bush like John Kerry voting against sending supplies to our troops.  When the line-item veto was taken away, pinning the "spending" on a President has become a lot harder, although he's introduced some programs that make me question if he really means to cut spending.  Take your pick whatever side you're on - the No Child Left Behind, or the similar Billions promised to another country for their social problem called AIDS.  Now, spending on one at the exclusion of the other will bring cries of "hearless" from one crowd or the other, or further arguments about how we're spending the money incorrectly.

The only way that friggen bloat is EVER gonna be cut is to force the government to spend the money that is COLLECTED each year, rather than have some mythical COLA (cost of living adjustment) increase or an automatic % increase.

Simpler is better:  If output exceeds input, restrict output or increase input.  Anything else doesn't address the problem.

On this point we agree wholeheartedly

[Buddabing]

Seems to me that reforming SS is pretty simple and doesn't need the whole "retirement account".

1. Eliminate the fiction of a "trust fund". There is none. Once this is done people will realize that something has to be done to save SS. SS should transition to a pay-as-you-go system (income equals outgo) once the baby boomers die off.

2. Raise the age of full benefits, currently 67, to 70 or so, and offer reduced benefits at 65 and 67 similar to the current option of reduced benefits at 62.

3. Cap COLAs (cost of living adjustments) to one percent below the official inflation rate, or 5% per year, whichever is lower.

4. Encourage people to smoke. It's harmless!

Done. 

[Dexter]

How about instead of giving trillion dollar tax breaks to people who don't need it, you use that money to support the elderly people who worked hard all of their lives and paid their contributions in the mistaken belief that there may be some security in the term 'social security'.

Is that such an off the wall idea??

Dexter

[Dartful Dodger]

How about instead of giving trillion dollar tax breaks to people who don't need it, you use that money to support the elderly people who worked hard all of their lives and paid their contributions in the mistaken belief that there may be some security in the term 'social security'.

Who decides who doesn't need the tax break?

You may think the guy who owns McD's doesn't need a tax break, so you take it away from him.

[Dexter]

Who decides who doesn't need the tax break?

Just having a wild stab in the dark that MAYBE the top 1% of earners in your country could live without additional tax breaks at a time when you're allegedly at war and have such crappy unemployment figures. But those who need it the most are obviously doing great, I suppose elderly folk freezing to death is 'gawds way of tellin us to throw more terraists on the bonfire' 

[Grasshopper]

How about instead of giving trillion dollar tax breaks to people who don't need it, you use that money to support the elderly people who worked hard all of their lives and paid their contributions in the mistaken belief that there may be some security in the term 'social security'.

Who decides who doesn't need the tax break?

You may think the guy who owns McD's doesn't need a tax break, so you take it away from him.  He thinks he deserves that money, so instead of giving all the fry guys raises, he uses that money to give himself a bigger raise and/or he raises the price of fries to make up for the pay cut he's taking by losing the tax break.  If you don't give him a tax break, why should he support the McD house, or any other charity for that matter.

The guy you want to not get a tax break will find another way to get that money. The problem is the small business owner who needs and counts on that tax break will get screwed.  So the rich will still get richer, but now the guy working hard to make something for himself will get nowhere.

Give me a break.

McDonalds is not a charity.

The guy who owns McDonalds pays the fry guys as little as he can get away with, and charges for fries as much as he can get away with. He will do this regardless of whether he gets tax breaks or not. The only thing that keeps him in check is market forces.

Sorry but that's capitalism.

[Dartful Dodger]

and charges for fries as much as he can get away with.

They will be able to charge more, because they know the little guy is getting the tax break, so the little guy can afford to pay more.

The Burger King Guy, the Subway guy, and all the other fast food guys will all raise their prices to make up for losing thier tax break.  It won't just be the fast food guys, but the Pepsi guy, the Nike guy, the Shell guy....

[DrewKaree]

How about instead of giving trillion dollar tax breaks to people who don't need it, you use that money to support the elderly people who worked hard all of their lives and paid their contributions in the mistaken belief that there may be some security in the term 'social security'.

Is that such an off the wall idea??

It's an idea that assumes the system as it used to work didn't, and that the current American tax system, as it's set up, doesn't do just what you propose.  You also seem to be assuming that people who haven't taken steps to plan for their future in programs and tax shelters already available to the American public should be taken care of by those who did, instead of them assuming responsibility for their finances.

When America's systems don't work, which Social Security Insurance currently doesn't, then they need to be changed.  Currently, Social Security Insurance is set up exactly as you think it should, Dexter, and it isn't working.  It's nice to assume that your idea, while well intentioned, will work exactly as you have planned.  The facts, however, tell everyone in America that your well-intentioned ideas are simply the ruminations of someone unfamiliar with Social Security Insurance, and you simply haven't a clue what you're talking about.

Who decides who doesn't need the tax break?

Just having a wild stab in the dark that MAYBE the top 1% of earners in your country could live without additional tax breaks at a time when you're allegedly at war and have such crappy unemployment figures. But those who need it the most are obviously doing great, I suppose elderly folk freezing to death is 'gawds way of tellin us to throw more terraists on the bonfire' 

Somehow a problem that was happening before the war broke out, and would STILL be an issue if there wasn't a war that ever happened, is related to the war.  Evidently there isn't a thing in America that couldn't be fixed if we'd have never gone to war.  Unwed mothers, teen pregnancy, hangnails, flat tires, bad breath, and even body odor would somehow be fixed or not even be a problem if we'd have never gone to war.  If you keep grinding that axe, you'll eventually wear it away to nothingness, and you've got precious little material left as it is. 

When you have a better understanding of how the American Social Security Insurance program works, and aren't projecting your years of service to Ireland and your experiences with YOUR system as your hole card, you'll be able to stay on topic.  Right now, you just wish to say yet again how wrong the war was, regardless of how irrelevant to the topic it is.

[DrewKaree]

and have such crappy unemployment figures.

I have no idea where you keep coming up with the spirit to rail against something that each and every day is being shown to be false beyond a reasonable shadow of a doubt, but you keep up the good fight, tiger.  Eventually (and it'll probably take more years than you can keep people interested in that lie) you'll be right again.  Even a stopped clock is right twice a day. 

Call us (make it collect, if you wish) when you get your facts on this area straight.  We've already given up holding our breath that you can differentiate between actual unemployment figures in America and your view of the truth.  Unless an unemployment rate that equals the rate in your country is just as "crap", in which case I'll have to believe you think that 0% unemployment is attainable.....then I'll just sit back, point and laugh with the rest of the sane world.

Your ignorance in the area of American unemployment rates is staggering, but your willingness to display your ignorance for all to see is beyond belief.  I'd tell you to get your facts straight, but obviously, it hasn't stopped you thus far, so I'd be just as foolish to expect you to change your wailing on this if you had the facts in front of you.

[Grasshopper]

and charges for fries as much as he can get away with.

They will be able to charge more, because they know the little guy is getting the tax break, so the little guy can afford to pay more.

The Burger King Guy, the Subway guy, and all the other fast food guys will all raise their prices to make up for losing thier tax break.  It won't just be the fast food guys, but the Pepsi guy, the Nike guy, the Shell guy....

I'm not sure that's true. The amount that McDonalds charges is not based primarily on what the 'little guy' can afford to pay. It's based mainly on what other fast food outlets charge for similar items i.e. market forces.

Most people could afford to pay more for burgers if they had to and McDonalds would certainly put their prices up if they didn't face any competition from other fast food outlets.

But the point you're making is irrelevant anyway as Dexter was referring to tax breaks for high earners i.e. the sort of people who tend not to eat at McDonalds.

'Trickle down' economics (which I think is what you're referring to) sounds superficially attractive at first glance. But time and time again it has been shown not to work in practice.

[shmokes]

Can someone explain to me the part about baby boomers being the problem?  Like because there's so many of them or something?  That don't make no sense to me.  The time period they use to designate baby boomers is twice as big as the time periods they use to designate gen x and gen y.  If you put gen X and gen Y together they are a significantly larger group than the baby boomers, over an equivelent time period.  Gen Y is much much larger per year than baby boomers.  I'd guess that this has a lot to do with the way population grows exponentially (my grandparents have 2.5 kids and they each have 2.5 kids and then I and each of my 1.5 siblings have 2.5 kids, etc.). 

Do I just not understand the math of why baby boomers present such a problem?

[DrewKaree]

When Social Security was started, the average number of taxpayers paying into the system vs the number of people drawing on the program was ~16.  Currently the number is ~3.  It has nothing to do with the Baby Boomers, per se, rather that they'll be the first ones going through a program ill-suited to stand up to the needs of the program as it's currently set up.

[Crazy Cooter]

The issue is that the baby boomers will live longer and draw more from SS than the oldies did before.  More people sucking more money for more years.  If we started raising the age to receive benefits, the problem would go away.  It's like this (assuming no changes):

* ~13 years from now, SS will spend more than it gets.  It will have to draw on it's "savings".
* At some point (arguable exactly when ~2050??), the system goes bankrupt.

Start raising the age to receive benefits and the ability for SS to "payout" is increased.  I'm 30 now and my life expectancy is ~74.  I'm eligible under the current system to start getting benefits when I'm like 55/58.5 or some crap.  I think this should be raised to at least 70.  If I want to retire before then, I should do so on my own dime unless I'm completely senile or disabled.  Then SS should step in.

Bush wants to let you take money out now, invest it, and hopefully get enough of a return that you won't need SS later.  The problem is that we have to start fronting money sooner, because SS will go broke sooner (less $ coming in).  MY point is that we can already invest money through IRA's etc.  I'd like to see less people collecting SS and keep it for those it was intended for.  That would reduce the "drag" on the system and extend it's life.  It's supposed to be a social program, not a retirement fund.  That's why I consider paying it each week as a tax.  A tax that should support the real old/frail/disabled/etc.  Not the dude vacationing in Cancun.  If you're able to work, but have no money, go to work.  I don't care if you're 17 or 70.  Keep SS for those that need it.

I just see this (and gvmnt spending/tax cuts in general) as backwards.  Cut the spending and THEN cut the intake.  I wouldn't quit my job today because I *think* I'll cut back my spending next year...  I'll quit when I do the math and see I don't need to work anymore.

[DrewKaree]

Cut the spending and THEN cut the intake.  I wouldn't quit my job today because I *think* I'll cut back my spending next year...  I'll quit when I do the math and see I don't need to work anymore.

Cooter, you and I agree EXACTLY on the cut the spending part.  The difference is that you view Social Security Insurance as what it's been perverted to, rather than a spending program set up by the government that's run amok! 

Seriously, Social Security Insurance was NEVER intended to be the program it currently is, and it worked THEN.  There is absolutely NO reason to think it won't work again, it's already been PROVEN to work, and work well.  Weaning the American public off of a perverted program is the only way it will get back to the way it was before, and even then, government has screwed up the program so badly that it won't be identical, but at least there's hope that it will return to serve the purpose it was set up for.

The problem is the gradual change over the decades it's been in existence and the unwillingness for the American public to look back to how well Social Security Insurance worked in the beginning, and our inability to realize each person has a responsibility to plan for their own future and not rely on the government to take care of us.  It's SO ingrained into the minds of many that "I/we/they paid into the program, and now it's being taken away", that hysterical visions of the elderly sleeping under freeway overpasses and lining up at soup kitchens all over America cloud the fact that this ISN'T going to be an instantaneous change, and that the elderly STILL will be taken care of in America, with a GRADUAL change back to taking care of ourselves. 

It's simply not true, and the American public is already at least telling themselves that they aren't going to count on Social Security Insurance to be there for them as they age.  NO ONE - NO ONE - will stand for the immediate end to Social Security and subsequent financial, physical, and emotional burden that would bring to the families of those currently relying on it, yet overreaction to the solution proposed (PROPOSED!  NOT EVEN FULLY DISCUSSED OR FINALIZED YET!) is working hard to make it seem as if we're planning widespread euthanasia of the elderly in America, instead of working to help the elderly, ourselves, and relieve the burden on generations to come.

[Crazy Cooter]

FYI: (from the SS site itself)
"If you were born before 1938, your "full retirement age" is 65. Because of longer life expectancies, the full retirement age is increasing for people born after 1938. You can start your Social Security benefits as early as age 62, but the amount you receive each month will be less than if you start at full retirement age."

Rather than make it more complex, wouldn't a better solution be to just raise the age required for benefits?

If you're 55+,  No change.  (Age: 62/65)
If you're 52-55, bump up your stuff one year.       (Age: 63/66)
If you're 50-52, bump up your stuff two years.     (Age: 64/67)
If you're 48-50, bump up your stuff three years.  (Age: 65/68)
If you're 46-48, bump up your stuff four years.     (Age: 66/69)
If you're 44-46, bump up your stuff five years.     (Age: 67/70)
If you're 42-44, bump up your stuff six years.      (Age: 68/71)
If you're 40-42, bump up your stuff seven years.  (Age: 69/72)
If you're 38-40, bump up your stuff eight years.   (Age: 70/73)
If you're 36-38, bump up your stuff nine years.    (Age: 71/74)
If you're 34-36, bump up your stuff ten years.     (Age: 72/75)
If you're 32-34, bump up your stuff eleven years.  (Age: 73/76)
If you're 30-32, bump up your stuff twelve years.  (Age: 74/77)

The SS office has a chart at http://www.ssa.gov/retirechartred.htm

This correction for life expectancy would be the only thing needed.  If you look at the 13-year mark, you'd have a 6-year lag for people entering the system.  This should keep input > output.  Problem solved.  Now just keep it updated.

[DrewKaree]

This should keep input > output.  Problem solved.  Now just keep it updated.

If the age at which you could collect had been updated from the inception of the program to maintain the original parameters, this wouldn't even BE a problem today, and it wouldn't be viewed as if we were talking about stealing money people "had coming to them".

Not only would proper updates that kept the age in line with the original parameters have kept input greater than output, but the program would be working EXACTLY as it was intended to work.

There is NO way to fix this problem without pissing off someone, and no matter WHAT the solution, it will be painted as being harsh and punitive to those who were "looking forward to enjoying their retirement years, but instead are forced to work longer and longer".  And I'm betting WHATEVER the solution, there will be someone who says that Oma and Bumpa can't enjoy their grandchildren as much, this will hurt families, blabety blah.

Social Security - the government-mandated pyramid scheme!   

[DrewKaree]

BILL BENNETT GIVEN CONTROL OF SOCIAL SECURITY FUNDS
A Safe Bet, Bush Reassures Nation

In a bold move to privatize Social Security, President George W. Bush today put all of the program

[fredster]

Can someone explain to me the part about baby boomers being the problem?  Like because there's so many of them or something? 

Good question.

Here's the Social Security Administation's view - http://www.ssa.gov/OACT/solvency/

[SirPeale]

Give me a break.

McDonalds is not a charity.

Actually, the Ronald McDonald House IS a charity.

[fredster]

But time and time again it has been shown not to work in practice.

Really? When?

[jbox]

But time and time again it has been shown not to work in practice.

Really? When?

Usually it depends upon whether you are preaching the "strong" (economic & technological) or "weak" (technological only) version of trickle-down economics. Both of them are about building up the pyramid to be as tall as possible, which we have known is generally good for a society as a whole for several thousand years. However many (rich) people essentially try to sell the idea that not only do the middle layers of the pyramid get thicker (ie. more middle-class) but the bottom of the pyramid magically shrinks as well.

The rationale for this typically relies on market forces to encourage a supplier to develop the cheapest way to produce a widget in order to maximise their profit. However, what then happens is that after some time *everyone* will be building widgets in the 'cheap' way, which should theoretically force the market price of widgets down and thus more people can now afford them. The ideal scenario is that this happens for all commodities, so that over time everyone can now afford more stuff.

However, this theory can fail under several counter-scenarios:
- scarce resources (ie. land never gets cheaper)
- supply chain (ie. feeding the miner, truck driver, factory worker, sales assistant...)
- removal of market forces (ie. inheritance, patents, microsoft)
- removal of capital from the market (ie. foreign money)
(all of which impede this process instead of encouraging it)

If you have access to any kind of running water (even if it is only a public toilet) you are already way up there in terms of standard of living. Nobody with any sense can claim that the trickle-down effect is not a proven and positive thing from the technology point of view. However, there is still plenty of argument as to whether this process would in fact go *faster* if we got rid of that tiny fraction of mega-rich loafers sitting at the top spending most of their time trying to keep the rest of the pyramid down at the bottom.

[fredster]

Ok, nice theory.

When did it fail when it was actually tried?

[jbox]

Ok, nice theory.

When did it fail when it was actually tried?

Are you serious? Go look at the long history of Europe for plenty of examples of civilisations that became more 'advanced' then their neighbouring cultures whilst still repressing a staggering percentage of their population in various levels of abject misery. I personally suggest you read about one nice example called the "Industrial Revolution", which featured people being worked in mines until they died of "industrial disease".

I am more than happy to agree that the system works 'in theory' when there is no impediment to the flow of accumulated wealth back into the working class in the form of fair wages and safe working conditions.    But history shows us that this is not a by-product of capitalism, but of democracy. Many would-be capitalists living in democratic countries confuse these two theologies far too often (either accidentily or deliberately).

The conditions that most of us enjoy today are a by-product of the work of unions in educating people that they aren't powerless. But feel free to contradict me (since I haven't been to the USA for a while), maybe you have completely eliminated underemployment and poverty in the mean time. 

[Crazy Cooter]

Can someone explain to me the part about baby boomers being the problem?

[mr.Curmudgeon]

Saw this quote from Bush yesterday, and just thought I'd share it here.
Even though there is a general sense of the direction Bush wants to go with his SS privitization plan, we have yet to see specifics. Those that 'support' Bush feel this makes all criticism of the plan/direction unwarranted, yet they find no irony at all in 'supporting' the "plan" at the same time.

Anyhow, when asked why he continues to refuse to show America the plan he is so aggressively pushing, Bush said this, "The tendency in Washington is,

[Otraotaku]

I hate our country, Nuff said... >,<

[DrewKaree]

....but too cowardly to actually act on your "hatred" and do something about it, like move.

Either that, or you don't actually know how to say what you really mean, and "I hate my country" is the best, closest approximation of what you really want to say.

You'll find moving to someplace you claim to like won't solve your "hatred" of your country, but at least you'd be being honest with yourself and ACTING to solve the problem you find with living in it, otherwise you're just a whiner who is too lazy to think out what he really means.

But that's just me....I could be looking at it wrong

BTW, what country, exactly, is it that you hate?

[fredster]

What did you guys think about what Alan Greenspan had to say about Social Security these last couple of days?

He likes part of the the proposals.  He didn't like the price tag, but he said SS needed fixed, because it was actually broken.

I like the idea of the personal accounts too.  Bush ran on that platform in 2000.  It was the main reason I voted for him then.   

I'd sure like to see the details so I could make up my mind if this was a good thing or bad. I don't know just yet, because nobody has anything more than the concept in the public yet.

Any proposals that you guys (Cooter & C) actually like? Or do you think we should just wait for some future democratic president to raise the taxes to cover the bets?  Or do you think we have absolutely no problem and we should just go about our business?

[Crazy Cooter]

I like my solution (see above somewhere).  It's plain & simple.  Scale up the age to collect bennies.  Don't pussyfoot around the issue with 5000 pages of taxcode-like confusion.

btw, you do understand that the diversion of funds into a different account will create a shortfall faster... right?  That's the ~trillion dollars (or  however much) of debt the dems are talking about.

If you and Drew are each paying $5/year to support me, then decide to put your money elsewhere, who pays me now?  The gvmnt borrows the money.  It's all NEW debt.  Sooner or later someone WILL have to raise taxes to either:
1- Pay SS because the program was never changed.

-or-

2- Pay the NEW debt accrued because people stopped paying into SS to start their "own" fund and the gvmnt had to borrow money to cover the difference.

Nothing the repubs have presented will put more money into SS.  Somewhere they have to cut bennies.  Right now the idea is to confuse it enough that nobody notices.  That's why the dems are still quiet, they're letting the repubs set themselves up because THERE IS NO WAY TO SAVE SS EXCEPT TO CUT BENNIES.  PERIOD.

[DrewKaree]

btw, you do understand that the diversion of funds into a different account will create a shortfall faster... right?  That's the ~trillion dollars (or  however much) of debt the dems are talking about.

If you and Drew are each paying $5/year to support me, then decide to put your money elsewhere, who pays me now?  The gvmnt borrows the money.  It's all NEW debt. 

 

Do you not understand that there's money in the system right now?  That's where you will be getting paid from.  I don't walk into a store and borrow $100 from you to buy something when I have the cash sitting in my own pocket.  The government doesn't have to borrow money to cover payouts from money that's already there. 

You also are CONTINUALLY painting this as a complete and total removal of an individual's payment.  First, any talk of a plan has made it clear that won't be the case, merely a percentage, thereby continuing payments into the system.  Second, nothing has even been specified, yet you're acting as if the proposal is to let people keep all their money and put it into a bucket with a slow leak in order to save for their retirement. 

Prior to Social Security Insurance being implemented, people not only saved for retirement, if they were smart, they diversified their money into several different areas in order to ensure they wouldn't be hosed.  Your argument that "we already HAVE IRA's and the like" is saying that adding another area to invest in is a bad thing.

...because people stopped paying into SS to start their "own" fund and the gvmnt had to borrow money to cover the difference.

An example of the hyperbole I'm speaking of.  It simply won't happen that people will "stop paying into Social Security Insurance".  At best (for me and fredster, anyways) there will be a larger percentage allowed to be put into my own fund, rather than what is being bandied about presently. 

Nothing the repubs have presented will put more money into SS.

...because they don't HAVE to put more money into Social Security Insurance.   The money I divert into a personal account is money the government won't have to pay me, thereby lessening the burden on the government towards me, meaning money that would have gone to me will now be going to you.  They won't have to borrow the money to pay you, it will come from money they DON'T have to pay ME.

Somewhere they have to cut bennies.

My guess is that you consider giving someone a smaller check because their personal account will pay the other portion the government USED to pay as a cut in benefits.  I can't help you there, you've got to do the math yourself.  The person will get the same amount of money, but the government will be footing less of the burden, as it should be done.  Statements like that are simply used to instill fear and confusion of the proposals being considered.

As it is set up right now, the government pays that amount of money EVEN IF THAT PERSON DOESN'T WARRANT PAYMENT.  Bill Gates will get his benefits cut, if that's how you want to look at this, because the government will have to pay less of his monthly amount due to his personal account making up the difference.

Joe Average, who doesn't want to pay into a personal account whatsoever because he feels the safe plan is to keep paying all of his money into Social Security Insurance as he has done ever since he started getting a paycheck will get paid his entire monthly amount due from the government each month.

Since the government has to pay Bill Gates LESS from its coffers, it can still offer the SAME payment to Joe Average because they'll pay less to Bill Gates in order to keep Joe Average's payment the same.  It's the only way they WON'T have to raise taxes in order to keep up with the payouts. 

The only confusion going on right now is by people like yourself claiming that the first year a plan goes into effect, everyone will take all their money out, thereby screwing the people in the system already, which is simply lying about every proposal brought up thus far, both liberal and conservative, and relying on hysterics to cloud the issue instead of working to clear up any of these proposals.

Your plan of scaling up the age is in essence a cut in benefits too, even though it's the right thing to do.  Right now, you start collecting benefits at x, you're proposing collecting at y.  I just got a certain number of years of collecting benefits taken away from me, i.e. I got my benefits cut.  Right now, they'd have to raise the age so high to make up for the perversion the program has gone through, you'd have to be dead and in the ground a few years before you could start to collect!  Try explaining how this train started going off the tracks and can't find its way back onto 'em!  Talk about misconfusiation! 

[fredster]

btw, you do understand that the diversion of funds into a different account will create a shortfall faster... right?  That's the ~trillion dollars (or  however much) of debt the dems are talking about.

Maybe, maybe not. The key was the interest rates. The idea was to invest it in these accounts using the 401K model from what I get out it now. The details is what we are lacking.

I don't think I'll live long enough to collect benifits now. It's going up all the time. Check when you will be able to collect cooter.  I think as young as you are it could be 69 or 70.  Do you want to work that long? Think about that. Man. I wanna retire now, and I'm only 43. I have to wait to 67.

I like the idea.  I like the idea better than paying into the system that will pay me 70 cents on the dollar instead of $4 for every dollar I put in.

Have you added up the taxes you are paying into this mess now?

Drew is right, SS taxes are used for cash flow, there is no big "piggy bank" somewhere. We are on a pay as you go system. The "lock box" has the tumblers drilled out of it over and over. 

I heard where Chile has done this, and the system is working pretty well.  Is there any country that is doing this now?  I don't think it's a "new" idea.  Is this being done anywhere successfully now?

[fredster]

I have to add this. I have a very old friend that I don't see much anymore. He works at Ford as an engineer. He is an militant anti-tax guy.

He told me that he has removed himself from the Social Security roles completely and has had Ford stop making his social security payments.

The system was created originally as a voluntary system.  He said that he found the forms to remove himself from the roles and no longer even has a social security number.

He voted Ross Perot and was even an usher for him during the '92 years, so I think he's out there just a little.  Anybody ever hear of somebody doing this?

He swears he doesn't pay in and could care less about this whole situation. He quoted numbers from a Roth IRA that will pay him more by far than any social security benifit.

[Crazy Cooter]

I linked to this above:
http://www.ssa.gov/OACT/solvency/SJohnson_20050215.pdf
"This memorandum presents long-range estimates of the financial effects of the plan you have developed for individual investment accounts that would provide retirement income under the Social Security program. This memorandum includes a description of the plan, reflecting the intent of and specifications for the plan, as provided by Kathleen Black of your staff."

...Individuals born in years 1950 through 1982... stay with same or choose new way.
...All individuals born in 1983 and later (those 21 or younger as of January 1, 2005) would participate in the IA program, with contributions of 6.2 percent of OASDI taxable earnings starting in 2005.

That's the full 6.2%.  Read the link and look at the Tables.  This isn't an "investment".  Post back once you read through it (to see if you take it the same way).

RE: $ in SS.
 Is it there or isn't it?  We're talking two different time frames.  If nothing changes, it's good for like 13 years before it has to "withdraw from it's bank".  If we no longer feed money into this "bank" (by whatever %) it will need to "withdraw from it's bank" sooner.  Let's assume 50% is diverted.  Now THAT time frame is down to 7.5 years.  Bush says that the current system will be bankrupt in like 50 years.  With 50% not being put in, the system is bankrupt in 25 years.  That's ignoring interest.  If Bush's numbers are right, the system would go tits up in about 20 years if we divert funds.  Now where does the money come from to cover the retired?  Looks like about a decade worth of payments will be missing...

Let me know if you read that link differently.

SS does have a "bank".  They have collected more than they have dispersed over the past howevermany years.  This banked money gets very very poor interest because it is invested in GUARANTEED funds.  The object of the individual/private account is to move it into a higher interest area (and introduce a measure of risk).  Reading the above link, it appears that the gmnt is willing to say: "if it craps out, we'll support you at poverty level".  It DOES NOT say: "if it rockets upward, we'll give the citizens gold and jewels."  That's why I say it is not an investment.  It is a gamble.  From the Table of benefits on that link, it shows that we will get less money under this system than the old.  THE SYSTEM will get richer if the funds do well, but you and I will not.

For the record, I honestly don't think that I should get SS until I'm at least 70.  If I want to retire before than, I should do it on my own.  If we don't keep raising the age of benefits, we'll run into this same problem when we start living to be 120-years old.

Ford can't stop making payments on his behalf to SS.  It is required by law (AFAIK).  Businesses even match the 6.2% of your income (up to 90k) contribution to SS.  If there's some form out there that gets us out of this, fax me a copy

[fredster]

It suggests a change from 6.2% to a 9.7% tax increase on the individual an the employer.  There are also a butt load of assumptions.  It would take a while to verify the data there. 
It looks like just one proposal out of many. I'll read into it further.

The best report is from the managers of social security, here - http://www.ssa.gov/pressoffice/pr/trustee04-pr.htm

The SSA itself says the money runs out in 2018.  The whole system collapses into nothing by 2042.

I was planning to retire in 2001, but I guess I'll have to wait until 2029.  What year are you going to homeless Cooter?

[DrewKaree]

I haven't read the entire thing yet, Cooter, but right now, the % to pay in is 7.5% by the employee, 7.5% by the employer.  If you are self-employed, you pay the entire 15%. 

I'll finish the reading over breakfast.

* DrewKaree chokes            All TWENTY SIX PAGES 

*edit*
Something I noticed, you reference the % (the % is irrelevant, as long as the context remains the same so far, agreed?) which is only half of the amount.  The other half (equal to the % you reference) is still going to be paid into the system, according to that link.

*edit*
Through page six of your link, Cooter, this appears to be a plan to dissolve Social Security Insurance as we know it, with the likely effect being to spin off Supplemental Disability Insurance into its own program.

*edit*
In fact, on page 9, final paragraph, it actually states "The proposal would replace OASDI retiremant and aged survivor benefits with an individual account that would be financed with one half of the payroll tax rate."

[Crazy Cooter]

Yeah, the percentages aren't that important, it's the "idea" of the proposal that's important.  Whatever gets diverted out of the old and into the new system has to made up somehow unless we can "time" it right so the old goes belly up just as the new starts rolling.

Did you guys get the the same feeling as I do about this proposal?  It looks like we get less money individually and the "system" gets to collect any additional interest.  It's all hocus pocus to me.  What's the expression?  A "nutshell game" or something?  Why don't they just up the ages for bennies?  Drop all this extra paperwork garbage.

lol at Fredster.  I just sent in my taxes.  I'm already homeless.

So if we update the numbers with Fredsters info:
http://www.ssa.gov/pressoffice/pr/trustee04-pr.htm

-- No Change --
SS taps its bank account in 2018.
SS is bankrupt in 2042.

-- Divert 50% --
(for ease of calculations)
SS taps its bank account in 2011-2012.
SS is bankrupt in 2023-2024.

FOR THE OLD SS:
Now if I'm 55 now, my expected age is 70 before I die, = 15 years = year 2020.  So 50% of the people age 55 will still be withdrawing from a nearly bankrupt system.  That's ignoring people who opt to stay with the old system and withdraw even more money.

FOR THE NEW SS:
Assuming that most people switch to the new system, it will operate just like the old one did when if was first introduced.  Lots of income, little expenses.  It should "bank" a bunch of money.  (If things go sour on the investments, it's all ruined)  If things go well, can we expect to get MORE $ than we could under the old system?  NO.  If we did, it would just be the same program with a different name but the same problem 50 years from now.

Somewhere, somehow, they have to cut what they give to us.  From what I got out of the 26 page thing there, it looks like that's what they're doing.  (Table b-2 or whatever).