Social Security reform

[Crazy Cooter]

Lots of boos during that one.  I will put this forward though:

1- Don't we already have our own retirement plans? 401k, 403b, IRA, Roth...
2- If these mystery accounts would grow at a pace greater than "standard" investments, why are the "standard" investments still around?
3- Who gets to choose which companies are selected to be eligible?  Tell me now so I can buy them before demand goes through the roof.  Then I can sell them to you guys at a much higher price.
4- What happens if the stocks crap out?
5- If the current SS system is a deflating balloon, why would we cut a gash into it by allowing funds to be diverted out now?  Wouldn't that bring the dreaded date of bankruptcy closer?

To me, it seems like robbing Peter to pay Paul.  If the accounts crap out, which is absolutely possible, then we would have to make up the gap from those funds being diverted in the first place AND have to subsidize people later.  We can't let them starve even if they gamble away their retirement.

Is this just a "sneaky" method of stimulating the economy?

[Mameotron]

Cooter, I don't know what you're referring to, but I'll just give my opinion on what you posted.

1.  Yes.  Because I know that social security isn't going to be around when I need it.  Or it won't be enough.  Johnny Carson's 1st wife was awarded alimony of $13,500 a year.  At the time, I'm sure that sounded like a lot.  But you can't live on that today!

2.  A standard investment, as I understand it, is something with no risk.  A savings account or a CD.  Low returns for no risk.  A portfolio has higher risk, and consequently, higher returns.

3.  You are dead right on this one.  I can't see any way for the government to pick companies to do the investing.  There's no way this can happen without major corruption.  Look at the stakes involved!

4.  Never, never, never put all your money in one investment.

5.  I see it as the government saying, look, your ss account won't be worth crap when you retire, if you want to try and boost it up now, go for it.

[jbox]

There's only one way to "fix" any county's social security problems: stop getting old.

Look, you can't have an arbitrary number of people in the same market economy *not* working. This stuff about stocks and investments is all make-believe, because you can't 'make' money from the stock market unless lots of other (working) people 'lose' it to you!

Any social security "reform" that involves people giving their money to anyone but the people who are currently old, is either an attempt to hide the fact the economy is floundering, or an attempt to swindle people out of their money. Assuming there is a fixed amount of value you can 'waste' from an economy I leave it up to the reader to decide how equitably they wish to divide that amongst the people who helped build that economy.

Savings stimulate inflation. More savings means more inflation, which means the money you saved doesn't buy as much as it used to. If you want to help the old people out then start buying more junk you don't need so the stuff people really need isn't so expensive.

Now, anyone for more soylent green?

[mr.Curmudgeon]

http://www.thereisnocrisis.com/

'nuf said.


mrC

[shmokes]

There's only one way to "fix" any county's social security problems: stop getting old.

Look, you can't have an arbitrary number of people in the same market economy *not* working. This stuff about stocks and investments is all make-believe, because you can't 'make' money from the stock market unless lots of other (working) people 'lose' it to you!

Any social security "reform" that involves people giving their money to anyone but the people who are currently old, is either an attempt to hide the fact the economy is floundering, or an attempt to swindle people out of their money. Assuming there is a fixed amount of value you can 'waste' from an economy I leave it up to the reader to decide how equitably they wish to divide that amongst the people who helped build that economy.

Savings stimulate inflation. More savings means more inflation, which means the money you saved doesn't buy as much as it used to. If you want to help the old people out then start buying more junk you don't need so the stuff people really need isn't so expensive.

Now, anyone for more soylent green?

Damn....that's a good post. 

[jbox]

Now, anyone for more soylent green?

Damn....that's a good post. 

WARNING: The surgeon general advises against listening to anything I have to say.

[Ravant]

Why not just dump SS in the first place? It was never set up to be a retirement plan, just a rainy-day situation for when people required it. Politicians have inflated it towards being something it's not. Why not stop FORCING me to pay into something, investment, social security, what have you, and give me the money to do with as I wish? You mean to tell me the government, and whatever individual investment firms they pick know about me and know what's best for me even more so than I do?

Who the hell is the government to tell ME where I put my money? Why can't I just take 10% of every one of my paychecks (without the SS being taken out, so I can afford to pay my bills while still putting cash away.), and start putting them in a savings account. When that one reaches $100,000, open another, etc. That way, even if stocks crash, and the bank goes under, I'm still FDIC insured, so my money is safe from the greedy hands of politicians and corrupt investment firms.

Again, who is the government to tell me what to do with my funds? This is a government by the people, for the people, of the people. I, like the rest of the citizens of this country, should be telling the government what to do with OUR money, not the other way around.

[Dexter]

Social Insecurity would fit better. You work hard and contribute with no guarantee of a reasonable standard of living at retirement? Privatising a national welfare system, its an oxymoron.

What happens in the event of another 9/11 if the companies your nest egg is invested in collapse?

Congratulations on your second four year journey to bankruptsville. BUSH WON, GET OVER POVERTY if you can. Don't say you weren't warned.

http://garnet.acns.fsu.edu/~mjl02c/skyNotFalling.pdf

[fredster]

Dexter,

You aren't even involved in SS.  I'm sure you don't even know how it's funded.  Where did you say you lived?  Ireland? Scotland? Come on.

[Dexter]

Dexter,

You aren't even involved in SS.

[locash]

I'm with Ravant on this one.  I'm for doing away with SS entirely and letting people be responsible for their own lives. 

[Crazy Cooter]

You can take 10% and put it into a savings account right now.  Start an Individual Retirement Account.  The reason you pay Social Security is so you are guaranteed money when you do retire.  So if your IRA craps out, you can still survive on bread & water with Social Security.  That's where Bush wants to make the change.  Rather than guarantee $X, he wants to let you put $Y of that into mystery investments.  Sounds good, but if your mystery fund goes tits up, your stuck with $X-$Y for your retirement.

Now consider what jbox said, which is completely true.
You can't make money without someone else losing it in the stock market.
Unless you're the broker of course, then you have all your fees.  The easiest way to explain is with a simplified example:

I think (or get insider info) that Microsoft is about to announce the release the next versions of Windows.  That means their sales will increase and their profits will increase.  So I buy 10 shares at $100 each.  Then Billy makes the announcement.  Now people want to buy that stock.  Demand goes up, the price goes up.  I tell my Broker to sell when prices reach $120.  They do, and your Mom buys my 10 shares at $120 each.  I made $200 total.  That's a 20% return.

Now suppose the windows version is crap .  Nobody is buying it.  The stocks start to drop in price.  Your Mom is STUCK with those shares unless she can find someone willing to buy them.  The prices drop to $110, $100, $90.. finally they reach $80 a share and my broker buys them for me.  Your Mom lost  33% of her money.

That's how the game is played.  If you know the market trends, you can make a few bucks.  If you don't, you will lose every dollar you put in.  In an attempt to avoid people having to know all this, we invented "Funds" which buy and sell multiple stocks and hopefully make money.  But they are still "controlled" by the same principles.  You have to take your money from someone else.  Now is this what we want to do with money we NEED for retirement?  I don't think we should.  I think we should keep this risk-taking stuff where it belongs.  In our 401k's, 403b's, IRA's, Roth Accounts, etc.

Otherwise it's like putting your rent money in a slot machine on the 31st of the month (IMO).

[fredster]

Cooter,

Exactly what are you getting at?  It was the whole reason I supported Bush in 2000, was his plan to move part of Social Security to a private account.

There is no SS fund, nadda, no where, just a big IOU NOW. 

You don't seem to be so upset about your 401K evaporating.

I think it's a great idea for several reasons.  1) At least my children will get SOMETHING from my work if I don't use it.  2) If the stock market crashes, the government won't have money either! 3) Less input for more output.  The market returns more over time than any other investment.

Having said that, I still have to see the details.  We have no idea what they are proposing.  I won't be able to draw SS until I'm 67 anyway.  If the system isn't changed, then likely the age will go up to 72 or better just to keep the system online.  The money has to come from somewhere.

I don't see any problem with stimulating the economy with cash.  We did it several times in our history.  We did it in 2002 with the tax cuts, and I think it worked didn't it? Are you working? I am. 

Your 401K is subject to the exact same risk.  I lost money in mine in 2000, but it's made it back up now, and it's plus 14% so far this year to Date. Not bad, thank you again Mr. Bush.  (He's da man)

So what I see here is somebody knocking something that you haven't seen or tasted because the Dems say so.  Me, I'm for it if I think it will work.  I will say, that if it looks like it cannot work and comebody convinces me with facts and figures, I'm with them.  But to do a hatchet job just because the Republicans whip it out is, well, not so bright.

If the Dems have a good plan and it jives with reality, I'm with them.

[locash]

Ok, so I'm not entirely with Ravant on this.  I would probably think of a more sophisticated way to save for my future.

That being said I have a couple of issues with your post Cooter.

First of all you said:

The reason you pay Social Security is so you are guaranteed money when you do retire.

That's not true, the reason I pay SS is because my government forces me to.  There is no guarantee that there will be any money to give me when I retire.

Secondly, you notion of the way the stock market works is wrong.  The market does not depend on people losing money for others to make it.  It only requires that the value of companies increase.  Granted there is a good probability that someone will lose money and that's why smart investors (like my Mom) diversify.

[mr.Curmudgeon]

Looks like Bush is shifting rationales on SS as much as he did with his War in Iraq:

"In a significant shift in his rationale for the accounts, Bush dropped his claim that they would help solve Social Security's fiscal problems -- a link he sometimes made during last year's presidential campaign. Instead, he said the individual accounts were desirable because they would be "a better deal," providing workers what he said would be a higher rate of return and "greater security in retirement."

A Bush aide, briefing reporters on the condition of anonymity, was more explicit, saying that the individual accounts would do nothing to solve the system's long-term financial problems.

That candid analysis, although widely shared by economists, distressed some Republicans.

"Oh, my God," one GOP political strategist said when he learned of the shift in rhetoric. "The White House has made a lot of Republicans walk the plank on this. Now it sounds as if they are sawing off the board."



mrC

[Dartful Dodger]

I'm with Ravant on this one.

[GameOver]

Uncle Sam can't make everyone happy.  No matter what is done someone will complain.  Everyone has their own idea of what the best solution is (just read back in this post).  Whether it's Bush or someone else, I believe something must be done.  Privatization?  Maybe.  Pull in the reigns on gov spending?  It would help.  Does anyone have all the answers?  No.  Can you help yourself?  YES.

[Crazy Cooter]

That's not true, the reason I pay SS is because my government forces me to.  There is no guarantee that there will be any money to give me when I retire.

Social Security is a "promise" by the government.  Whether or not that's a guarantee...   But you are "entitled" to that money.

Secondly, you notion of the way the stock market works is wrong.  The market does not depend on people losing money for others to make it.  It only requires that the value of companies increase.  Granted there is a good probability that someone will lose money and that's why smart investors (like my Mom) diversify.

That is exactly how the stock market works.  Nowhere, nohow is money ever "created".  An increase in a companies value increases the demand for the stock.  Therefore people pay more.  Money only changes hands when it is bought or sold.  So I buy low and sell to you at a high price.  I take your money.  You hope you can sell to someone else later for a higher price and take their money.  Sooner or later the demand exceeds the "realistic" price for the stock and it's price drops.  It's all a hot potato game.  The stocks can't continue to rise forever, they just cycle up & down.  Hence "buy low, sell high".  The wilder the swing, the greater the risk, the greater the payoff if you time it all right.  Meanwhile, wallstreet takes their cut.

My point is this:  We can already do what Bush is promising but with other funds (401k's IRA's etc).  Why do we need to risk part of social security?  Instead of buying catfood, we might be stealing cat food.  And this is without considering the effect it would have on the payments we currently make.  The US would accumulate more debt by allowing people to gamble with money they didn't have before.

It all comes down to the only rule in the stock market:  "Don't invest money into stocks you can't afford to lose."

[Mameotron]

Good timing, my company released its 4th quater (2004) earnings report last week.

[jbox]

You are confusing dividends with stock value, and profit with money. Either you are doing this deliberately to cloud the economic argument you use to defend your moral opinion, or you really don't have any idea what a zero-sum game is. 

If you want to talk about the "value of a company", then that deals exactly with the people who "make" and "lose" money in the stock market (like this topic originally was). The "value" of the stock market is calculated by share price, not "the last dividend this company paid was X", and no matter how much you yourself do or do not understand about the share market Wall Street isn't going to change that just so you can win an argument. Nobody ever claimed that dividends were not a factor of that price, but they don't in and of themselves make up the 'value' of the share market (expectation of future competitiveness does). 

Secondly, your company made a *PROFIT*, not *MONEY*. Only the mint (and counter-feiters) can make money, the rest of us make a profit by getting people to give us $X+Y for a widget that we purchased for $X. In this case the customer is the one who 'lost' that $X+Y, you 'made' $Y and the widget maker 'made' $X. In a nice balanced economy that money will eventually change back to the customer when they grow wheat (say) to feed the widget maker's family. Capitalists deliberately try to confuse this point, saying "money" instead of "profit", to try and get people to forget that your $1.90 dividend came to you from the *customers of the company*, not the company itself.

People (and nature) create value, governments make money, and companies do neither. A good government is one which releases currency at a rate which matches the relative increase in *value* added each year by its worker ants (obviously impossible, so most tend to err for inflation (less) instead of deflation (more)). Anyone who tries to tell you otherwise is probably selling Amway. 

Clearly, you don't have a problem with the *capital*ist market, which is your opinion and I wont begrudge you your right to have it. But the tone of your comments seem to imply that 'everyone can make money together' (ie. poor people are simply too stupid to make money), which is contrary to the founding principle of capitalism itself. I don't care which one you pick, but you can't get both. 

And sadly the Australian government is also half-way through the privatisation of our pension system. I've yet to see a herd of pensioners driving cadillacs...

[Ravant]

Social Security was NEVER designed as a retirement plan. It just became as such over time. As for me taking my cash and just banking it, it's just a statement proving guaranteed cash can exist. Not saying that's how I'm doing it. I'm not exactly sure yet how I'd do it, but I've got a couple of years to think it out.

[DrewKaree]

First off, the social security system set up in the U.S. isn't a pension.

Look at the name of the system, and do some basic investigation on the program.  The name of the program is Social Security INSURANCE.  When originally set up, it was to pay out (statistically) 2 years after the average death rate of Americans.  Over time, it has never been updated or amended to keep pace with that.  Americans used to save for their older years, and S.S. was set up to help the widows left after that time, and as a "medical" aid to help pay for those bills one would most likely be incurring at that time in their life. 

It has been perverted by BOTH political parties to keep themselves in power, and is so widely misunderstood as to be ridiculous.  For a simple economic lesson, look at your paystub next time you get paid.  DO IT!  If you have one handy, look at it NOW.  I have 5 relatives currently recieving S.S.  The payout they recieve ranges between $800 and $1000 per month.  I'm sure you folks know someone who recieves S.S.  Ask them if they get more than $500 a month, if you're uncomfortable asking them exactly how much they get.  Without fail, they'll get at least that amount.

Now - figure out how much you'll pay into S.S. per YEAR and try to figure out how the hell S.S. can pay out the figure I just told you per MONTH.  The program wasn't set up to be a "retirement plan" or a "pension" or any such crap.  It's been perverted to become what it is today.

Cooter, to answer your questions:

1- Don't we already have our own retirement plans? 401k, 403b, IRA, Roth...

Yes.  Just as they had pensions and retirement plans when S.S. was set up.  S.S. wasn't set up to be a retirement plan, it was set up as insurance, should you reach the age to be able to collect the INSURANCE.  It was the same premise as your car insurance, life insurance, house insurance.  You pay into it, hoping you never have to collect, but if you do, it's there as a safety net.  It's not something you get a measured payout from after the policy is up.

2- If these mystery accounts would grow at a pace greater than "standard" investments, why are the "standard" investments still around?

These "mystery" accounts will be of your choosing from several options, are not a complete replacement of S.S. (contrary to what seems to be popular belief), but merely the ability to set aside a PORTION of the money you pay in towards something of your choosing.

3- Who gets to choose which companies are selected to be eligible?  Tell me now so I can buy them before demand goes through the roof.  Then I can sell them to you guys at a much higher price.

The plan is to have several options to choose from, and more than likely will be, if investing in the market, set up similar to current index funds.  There also will be other options such as bonds and whatnot.  This isn't going to be a "What if I buy Titanic stock", unless they set up that as an option.

4- What happens if the stocks crap out?

Although it appears that straight stocks may not even be an option, if it is an option, the same thing that happens to your "retirement plan" you spoke of earlier will be the result.  Are you choosing to ignore that your "retirement plan" can crap out as well?  Why would you ignore money you are setting aside for your old age?  This is the cold-hearted bastard in me, but if you could care less what happens to your money, then you deserve the straits it puts you in.  It's not the government's job to protect you from yourself, although more and more people seem to think it is.  It IS the government's job to take care of those who can't take care of themselves (even if it galls people that there are abusers of that system out there), but if you are paying S.S. taxes already, then you can take care of yourself.  Stupidity SHOULD hurt.

5- If the current SS system is a deflating balloon, why would we cut a gash into it by allowing funds to be diverted out now?  Wouldn't that bring the dreaded date of bankruptcy closer?

It's not a "gash", as you put it.  It's a pinhole, to allow the current system to achieve equilibrium by slowly taking people off the system, while still paying for those in the system.  In this fashion, when people reach the "age" of retirement, less and less money will be required to fund those people until the system reaches the balance it was originally set up under.

To me, it seems like robbing Peter to pay Paul.  If the accounts crap out, which is absolutely possible, then we would have to make up the gap from those funds being diverted in the first place AND have to subsidize people later.  We can't let them starve even if they gamble away their retirement.

Is this just a "sneaky" method of stimulating the economy?

It wasn't a "sneaky" method of taking care of the aged in America when it was set up.  It was a tax disguised as "aid" and set up so that the government would be the chief beneficiary of this system.  On the one hand, it was originally a fairly brilliant plan which would fund government AND take care of those most in need - a government plan that actually worked.  On the other hand, it turned out to be just like every other government program - eventually destined to bloat and to be perverted to wrestle power away from the "other side" by the side not IN power.

No matter WHAT your feeling on the situation is, it's better to tackle the problem NOW, rather than wait "just a few more years" just because "it really won't affect us right now...we still have some time".  That's like saying you're not going to plug the hole in the dikes because they're so tiny right now, and they don't let that much water through - it doesn't hurt anyone yet. 

[fredster]

No matter what Social Security was supposed to be, it is the source of a lot of retirment now. 

It's not going to be much better than a supplement to a retirement for most people, but there are lots of people that need it. When it was created, there were old people and children in poverty out of the grapes of wrath.

It's been a problem for a while.  Clinton made mention of it in his first term, but it is such a hot button issue, most legislators don't want to touch it.  It's just not a politically sound thing to go messing with.

But it's going to break down. Confidence of young people is breaking down, look at what Locash wrote:

Quote
The reason you pay Social Security is so you are guaranteed money when you do retire.

That's not true, the reason I pay SS is because my government forces me to.  There is no guarantee that there will be any money to give me when I retire.

So he doesn't think it's going to be there.  Lots of people want to pull out now.  I'm not sure what the details are of Bush's plan, but it's like a government 401K on index mutual funds. The basic difference is that you can treat it as property. 

Like anything else that's drempt up by Politicians, it sounds simple on the surface, but who knows what the long term effects are.  But I Liked the idea, I could pass on at least some estate to my kids if the wall falls around me.  I like that idea a lot.

I think we should see the plan.  All of the people condemming it haven't seen the plan.  They don't have a Plan either, oh, wait, yes they do. They plan on sitting on it until they can retire on government pensions and let the next group try and deal with it.

That's the way it's been for about, what, 80 years?

Great Plan. At least the President wants to open up the discussion.  Otherwise, Locash is going to pay for my retirement, one that he won't see.

[DrewKaree]

Oh no, a foreigner making observations on american affairs, when america tries SO hard to mind its own business on world affairs? OH NO, call in the spooks  You make the world your business, the world will do the same back, hard cheese.

By the way, I worked for 7 years for the Department of Social Welfare here in Ireland, so I know my stuff in relation to benefits and pensions.

I noticed the government agency that you worked for here taught you to spell "AMERICA" incorrectly.  Either that, or you're trying to equate your experience working for the government of Ireland to you being knowledgeable about the American system of Social Security.  No matter what way you slice it, you're wrong.

BTW, the rolling of eyes employed by you speaks to sarcasm.  Wasn't it you who long ago spoke of that being a hallmark of those with lower intelligence?  I TOLD fredster we'd eventually drag you kicking and screaming down to our level and beat you about the head and shoulders until you conformed to our standard.  Welcome to the club.   

[drunkatuw]

I don't usually get involved in political threads, but SS really started to interest me after the state of the union.

I'm 25 years old and am investing in two ROTH IRAs and a 401k through my employers.  I do this, because I don't expect to see SS in 30-40 years when I retire.  Does anyone else find it funny that all the Democrats on the SotU address booed when Bush mentioned SS going bankrupt, yet none of those senators contribute to SS themselves?  All govt. employees and postal works, firemen, policemen and even teachers don't contribute to SS, they all have a private system.  After 12 years as a teachers assistant, my mom had over $35,000 in her 403b.  That money is guaranteed hers, an that's $35,000 more than I expect to get out of SS when I retire.

If I could have the 6.5% that I pay, plus the 6.5% my employer matches to SS every paycheck and put that in a mutual fund, then I'd feel much better than I do now not expecting any return on my investment towards SS. 

My dad who is 52 said that he would opt out of SS right now, even though he only has 3-5 years left before retirement.  13% is a lot more than the average worker puts in their 401k, I currently put in 15% of my paycheck towards a 401k, if I could put 28% (tax free), then I'd be ready to retire by age 50!  But the democrats will hold this up in senate for so long that nothing will be accomplished anytime soon.

[locash]

No matter what Social Security was supposed to be, it is the source of a lot of retirment now. 

It's not going to be much better than a supplement to a retirement for most people, but there are lots of people that need it. When it was created, there were old people and children in poverty out of the grapes of wrath.

It's been a problem for a while.  Clinton made mention of it in his first term, but it is such a hot button issue, most legislators don't want to touch it.  It's just not a politically sound thing to go messing with.

But it's going to break down. Confidence of young people is breaking down, look at what Locash wrote:

Quote
The reason you pay Social Security is so you are guaranteed money when you do retire.

That's not true, the reason I pay SS is because my government forces me to.  There is no guarantee that there will be any money to give me when I retire.

So he doesn't think it's going to be there.  Lots of people want to pull out now.  I'm not sure what the details are of Bush's plan, but it's like a government 401K on index mutual funds. The basic difference is that you can treat it as property. 

Like anything else that's drempt up by Politicians, it sounds simple on the surface, but who knows what the long term effects are.  But I Liked the idea, I could pass on at least some estate to my kids if the wall falls around me.  I like that idea a lot.

I think we should see the plan.  All of the people condemming it haven't seen the plan.  They don't have a Plan either, oh, wait, yes they do. They plan on sitting on it until they can retire on government pensions and let the next group try and deal with it.

That's the way it's been for about, what, 80 years?

Great Plan. At least the President wants to open up the discussion.  Otherwise, Locash is going to pay for my retirement, one that he won't see.

Haven't we seen the plan?  If not a fully detailed version, we have a good idea of what he is talking about right?

Don't get me wrong, I applaud the President for having the guts to try and fix something that's pretty clearly broken, but what he is offering is not enough.  I think you misinterpreted the point of my statement; my primary concern is not that the money won't be there, it's that I am forced to participate against my will.  As far as I am concerned any solution that doesn't offer me the option to opt out is insufficient.

By the way fredster, just how old are you?  I want to know how long you plan on freeloading off of me. 

[DrewKaree]

D at Udub, the percentage is 7.5% paid by you, and an equal amount by your employer, and you pay all 15% if you're self-employed.

locash, he's almost as old as dirt, so he's about to start siphoning some profits off of you....and the jag hasn't even properly thanked you yet!  Tell 'im to send you a game or two for future payment 

Even though I agree with your "if I can't opt out, it sucks" sentiment, please tell me you can see it won't happen anytime soon, if ever.  It's the government, after all, and you're talking about tryingn to take money away from it!

P.S. if any of you are reading this and are of a certain income, there IS a tax break that can *edit* give you up to a $1,000 additional break on your current IRA contribution.  Depending on your income and family size, it goes down by dollar amount earned, and is slated to sunset (go away) after 2006.  Do some looking into it - I'll see if I can find where I read the information and repost it, but you SHOULD be investing, and if you haven't started yet, now's as good a time as any to start. 

Check out The Motley Fool if you don't know where to start.

[locash]

locash, he's almost as old as dirt, so he's about to start siphoning some profits off of you....and the jag hasn't even properly thanked you yet! Tell 'im to send you a game or two for future payment

I wonder if he'd be willing to kick some back to me if I let him live in my basement?

Even though I agree with your "if I can't opt out, it sucks" sentiment, please tell me you can see it won't happen anytime soon, if ever. It's the government, after all, and you're talking about tryingn to take money away from it!

But if it's right why should I not expect it?  Eventually, the people will tire of their oppression and cast off their shackles.  And I want to be there when it happens.

[GameOver]

Even though I agree with your "if I can't opt out, it sucks" sentiment, please tell me you can see it won't happen anytime soon, if ever. It's the government, after all, and you're talking about tryingn to take money away from it!

But if it's right why should I not expect it?

Right according to who?

Uncle Sam can't make everyone happy. No matter what is done someone will complain. Everyone has their own idea of what the best solution is

Eventually, the people will tire of their oppression and cast off their shackles.

Oppression?  Who's wearing shackles?  Do you live in America or a 3rd world country?    Don't count on SS.  Save/invest your money.  Take care of #1.  If SS is still around when you retire, consider it a bonus.  You can do it.

[Crazy Cooter]

Drunk @ UW, I don't know about Senators/House Reps, but in general Govmt employees pay into Social Security.  Teachers do & City employees do.  That I know because I see the stubs first hand (brother & girlfriend).  The 403b for teachers is their interpretation of a 401k.  It does not replace Social Security.  Also, unless you are holding two Roth accounts for tax purposes, there isn't really a point to it.  You are still limited in your overall Roth contributions.  If you are tucking away over the maximum amount, the taxman will have something to talk to you about when he finds out.  Your approach is solid though.  This is my point as to why we don't need to privitize anything.  You can already put money away for retirement.  I have the same number as you do in my portfolio for Social Security when I retire.  Zero.

Good post jbox.  That hits the nail on the head.

Mameotron, remember it's all a potato game.  If your dividends continue to increase, your stock may increase in price.  That's because people want to collect those "higher" dividends.  If the dividends plunge, the stock price will too because people will see they can have less total money invested somewhere else for better dividends.  If you wait too long to sell, you're stuck with the hot potato.  No buyers = you can't sell.  This is why it is usually not a good idea to have too much of your portfolio in the company you work for.  If it goes south, you loose your job AND you loose your stock value.  Double whammy.  I'm not saying buy/sell or anything  .

Drew, "couldn't care less", could not.   It's not that I don't care, it's that we need some type of insurance for people that can't plan ahead.  It's either SS or welfare.  Either way it walks like a duck.  Think of your other insurances you carry.  You have fire insurance incase the unthinkable happens, you have auto insurance, you have life insurance, possibly flood insurance blah, blah, blah.  It's all there to protect you from living in the streets.  That's what SS is supposed to do.  I don't see an uprising to skim everyones fire insurance to invest because we see it as it is... a safety net.  And 10+% isn't a pinhole, I'd jump up and down for a 10% raise.
------------

Anyhow, I think it's stupid to put SS into the market at all.  If my house burned down and the insurance company said they would only give me 50% of the insured value because the market was down, I'd be pissed.  It's the same thing with SS.  I actually have a better idea too.  Start a Social Security Credit Agency.  Give out home loans for people that have at least 33% equity at 5%.  The chances of a default on that type of loan is virtually nil, and profitable (to the Credit Agency) if it did happen.  And it's a rate that traditionally exceeds inflation, therefore gaining purchasing power as it gets older.

[fredster]

I don't understand why people are taking potshots at a plan they haven't seen.

FDR supported some type of other supplimentary program.

Even investing part of the SS into a CD would yeild more that the 2% it's earning now, so what exactly is everybody getting excited about?

I made money in the last 15 years on my 401K, in 2000 it took a hit until 2003, but it recovered the money and has increased nicely, even better in the last couple of months.  So what's the big deal with a 401 type account over time?

If I had started a 401K in 1979 (the beginning of my working carrer and the birth of asteroids) I could probably not worry about social security now too.

But the fact is we don't know the details and we all seem to agree that SS is going down hill so what's the beef?  We just want it to fail our way?

How we just wait and look at all the facts before we start tearing Bush apart this time? Or is that just out of the question because of prejudice and ideology?

If this is such a terrible Idea then why is it being adopted by governments around the world? Huh? 

[GameOver]

If this is such a terrible Idea then why is it being adopted by governments around the world? Huh?

Yes, several other governments around the world have adopted some variation of this proposal.  Is it working?  Depends who you listen to. 

And yes, I contribute to a 401k & an IRA too.  Why spend trillions of dollars to create a forced SS 401k?  That will require HUGE oversight & EVEN MORE gov spending.  This administration has taken a record surplus from the Clinton years and turned it into a record deficit.  Well done!

I think it's a good idea if it's executed properly.  That's the problem.  IMO Bush is pushing this now & quickly for the wrong reasons.  See the quote below from Bill Gross, PIMCO bond fund money manager.  I agree with Mr. Gross' perspective.  Bush wants to be remembered for something important.  That's fine, but done rush into this just because.  Too much is at stake.

***  Start of Quote ****

The president's argument for individual Social Security accounts is meant "to promote an agenda that has little to do with seniors and more to do with Bush, his ownership society, and ultimately his domestic legacy alongside the likes of Ronald Reagan and FDR," Gross wrote in comments posted on Pimco's Web site.

"Without a blockbuster of a program in his second term it is unlikely that Bush can go very far in the history books on the back of a paltry 3 or 4 percentage point tax cut for the rich," Gross wrote.

"Presto!" he continued. "We now have partial privatization of Social Security heading the agenda upon which the president intends to spend his well-advertised political capital."

***  End of quote  ***

[Crazy Cooter]

Why spend trillions of dollars to create a forced SS 401k?

[DrewKaree]

Drew, "couldn't care less", could not.

Correct.  /me turns red-faced

It's not that I don't care, it's that we need some type of insurance for people that can't plan ahead.

I'm thinking you are meaning something you aren't saying.  The "people that can't plan ahead" ARE taken care of.  They are those who currently recieve some form of government aid, be it welfare or SSI.  Those people are the people who CAN'T plan ahead.  Anyone else IS NOT incapable of planning ahead, it's that they would be CHOOSING not to plan ahead.  I simply have absolutely no pity for someone who chooses not to plan to take care of themselves.  I am still willing to help them out, but it's simply no one's fault except their own, and they SHOULD have to live with the mistake they've made.

Who do you mean when you speak of "people who can't plan ahead"?  "Can't" doesn't sound like a subjective thing to me, but it sounds as if you have certain people in mind.  Who are they, so I can know if I agree, agree partially, disagree, or vehemently disagree. 

Think of your other insurances you carry.  You have fire insurance incase the unthinkable happens, you have auto insurance, you have life insurance, possibly flood insurance blah, blah, blah.  It's all there to protect you from living in the streets.  That's what SS is supposed to do. 

That's what S.S. does now because that's what it's been perverted to become.  Originally, as I stated before, the age which someone would start drawing it was EITHER 2 years past the actuary table and their average age of death (again, which was never amended, as it was supposed to be....dunno what the current average death age is, but IIRC, let's use 72.  S.S. would currently then pay out at 74) or upon becoming widowed under certain circumstances. 

S.S. was NEVER designed to protect someone from living in the streets, it was Social Security Insurance (which is DIFFERENT from SSI today) which was supposed to help those who "beat the odds" and made it past the statistical average age of death to either allow them to enjoy those final few years they were likely to live, or to assist a widow upon the death of their spouse and the subsequent loss of income.

People at that time (which SHOULD be the same as today) KNEW that they needed to save, set aside money, for when they became older.  It's also why things such as "credit" and "debt" were used more carefully and people lived in smaller houses than we currently do.  People KNEW they had to set aside money for old age, and thus didn't live unreasonably beyond their means.  There weren't homeless people clogging the streets then, and if/when people learn once again to live within their means because the government isn't going to bail them out, there STILL won't be this excess of homeless people clogging the streets.  That's simply an emotional argument. 

My in-laws raised 5 kids in a one-bedroom house.  They turned the garage into another room (and simply parked in the driveway), and took the attic and turned it into 3 bedrooms (really 2, with the other walk-through room as someone's not-so-private room) so that they had a house for the family.  It's stuff like that, turning a 700 sq ft house into a liveable place for all those people, that people did.  Nothing wrong with how we live today, and I'm not saying you're evil if you live in one, but I do work for 2 families (mom, dad, and one kid) who each live in 10,000 sq ft houses.  I also see people who live with the same amount of people in the family in 2,000 sq ft houses.  We, as Americans, have used the promise of the government to bail us out in our old age to live more "luxuriously" (and my cabs are one of very few "luxuries" I own, so I'm not ragging on you if you live better than I do) than that older generation would have thought prudent. 

The government simply HAS to stop bailing out the people who WON'T, and start using that money to truly help those who CAN'T. 

There's a BIG difference between those two types of people, though, and we need to do a damn lot better in differentiating between the two types, punish severely those who want to abuse the programs - essentially stealing from those who truly need it.  Social Security has quite simply been turned into the program you think it's supposed to be now.  It worked back when it was implemented, so it's ridiculous to think that it won't work if it goes back to the Insurance program it once was.

[DrewKaree]

Drunk @ UW, I don't know about Senators/House Reps, but in general Govmt employees pay into Social Security.  Teachers do & City employees do.  That I know because I see the stubs first hand (brother & girlfriend).  The 403b for teachers is their interpretation of a 401k.  It does not replace Social Security. 

But in addition to the money they get for retirement, they ALSO get Social Security.  It's not something that's taken away, it's in addition to their retirement plan.  The public school teachers in WI get a pension.  Not an IRA, which they can ALSO pay into, a pension.  When they retire at a certain age (which is far below the retirement age of 62), they draw a pension for the exact same amount they earned at the time of retirement.  Then the IRA also pays.  AND they get Social Security.  Clearly there are people collecting Social Security who AREN'T the people Social Security Insurance was set up for, and I'm not simply referring to the teachers (not bagging on 'em), I mean the millionaire dude who CLEARLY shouldn't get it, still gets it. 

Think about that.  Let's just use someone who makes a fistful of money.  Bill Gates, at the age of 62, is eligible to recieve, from the federal government, a MINIMUM check monthly of $800.  If he chooses to skip it and wait for his (currently) "official" federal age of retirement of 65, he'll recieve $950 each month.   If THAT alone doesn't testify to how screwed up the Social Securty Insurance system is, then there's nothing that will clear it up.

I don't see an uprising to skim everyones fire insurance to invest because we see it as it is... a safety net.

And you also haven't EVER heard of a fire insurance policy that pays you a monthly amount after the policy expires and you no longer have to pay to maintain it.  Social Security Insurance (I've GOT to call it what it was set up as) was set up to take care of the same problem fire insurance covers...a possible problem that probably won't arise, but will pay you if it does, NOT as a "saving's plan".  Oh, and if someone out there has a life insurance policy that they were told can be used as a "savings" or "investment" plan, go and READ your policy to find out if you died today, how much your beneficiary would get....you'll be surprised to know your "savings" are subtracted from what the insurance company actually has to pay out!  (100,000 policy - 50,000 "savings" = 50,000 payout by the insurance company, IF they don't use your "savings" to keep the policy current)

If my house burned down and the insurance company said they would only give me 50% of the insured value because the market was down, I'd be pissed.  It's the same thing with SS.

No, it's not.  They AREN'T going to remove the requirement that you PAY Social Security Insurance taxes, and you WILL still be recieving Social Securtiy Insurance payments monthly from the government upon the age of retirement.  I'm guessing that the age of retirement is going to be raised, if not now, shortly...as it should be.  Remember the "2 years beyond the average age of death"? 

The "privatization" is simply going to become an OPTION, and there will be additional benefits for choosing that OPTION, in order to wean people off the unreasonable payment schedule the program has people are currently living under, while continuing to take care of those currently in the program who would be unreasonably penalized if their current payments were cut.

If you try to lose weight, do you just STOP eating food (payments CUT)?  While it may work in the short term (a few weeks or less), it does not work in the long term without being detrimental.  SLOWLY eating less and less food (payments) gives you the result (less weight/lower gov't payments) you desire, while adding in exercise gives you better results (more stable weight loss/lower avg gov't payments over time), and adding weight training completes the program (replacing fat with muscle/replacing gov't payments with personal payments)

Whew....I need a lard sammitch now

[GameOver]

Damn Drew.  You earned your custom title with those posts.  Anything else to say?   

[DrewKaree]

Yep.  I have numerous relatives who will be affected by this, and we've discussed this at length.  It's why I have FAR more than a little to say about this issue. 

This administration has taken a record surplus from the Clinton years and turned it into a record deficit.  Well done!

Go to the IRS and get the Instruction booklets for as far back as you can.  Start looking at the deduction records.

The figures are there if you want to look.  If you wish, you can either read what someone says and how they look at the figures, or you can go find out how you were personally affected across the years and make your own judgement.

Clinton taxed the snot out of you, me, and all the other "middle class" folks he claimed to be helping in order to have something to claim "victory" for.  You and I paid for that "deficit" reduction. 

Bush returned our money to us.  Magically the deficit returned.

Why was that? 

Government doesn't feel it's their job to reduce THEIR spending (spend the tax money COLLECTED), they set up their budget based on guaranteed increases (regardless of how much money is COLLECTED, they increase the spending), instead of waiting to see how much money is paid in taxes, and using that ACTUAL figure to set their budget.

Clinton raised our taxes to pay to keep the level of government spending the same.  Bush has given us tax cuts to give back that which SHOULDN'T be spent by government, and has stated he is going to cut government spending, which he's currently doing a pretty piss-poor job at doing.

When we are taxed at the same level each year, then it can be called a "deficit reduction".  Until that point, there's simply a redistribution of the American people's money to enable government to continue their spending unchecked, and the figures demonstrate that Joe Average paid a pretty nice chunk of Clinton's "lookit my card trick".

Seriously, go get the tax forms to see how much more you were taxed under Clinton.  You'll also see that those "rich" folks have had an increasing tax rate under this administration. 

[GameOver]

I guess you can say Clinton raised taxes if you look at Regans tax record for his last 2 years in office.  But then look at Regan's first 6 years.  Clinton DEFINATELY didn't raise taxes relative to THAT record.  It's all relative.

Looking at the income brackets/marginal tax rate figures, I'd say Clinton's admin raised taxes on the upper income classes.  Makes sense to me.  But tax law is MUCH too complicated to simply look at historical deduction/income bracket statistics.  I don't and never will claim to understand all the ins & outs related to tax code.  Much too complicated.  I've got better things to do (hang out with my family, play with the kids, build cabs.  You know, important stuff).

What's gonna happen to SS?  Time will tell.  Besides, I'm looking out for myself, and not waiting for the gov to tell me how much I'll get every month once I retire.  All this jabber doesn't help my individual situation out any.  What does matter is my committment to myself & my family to provide for us the best I can now and in retirement.  I'm not counting on Uncle Sam.  Mostly a bunch of crooked politicians IMO.  My point is to take care of yourself as best you can and don't depend on the government.

[fredster]

IMO Bush is pushing this now & quickly for the wrong reasons.

Wrong.  Bush put this in his 2000 campaign. That's the reason I voted for him over Gore then. I thought it was a helluva an idea. But he didn't pursue it in his first term because of the terror war. 

I'd say Clinton's admin raised taxes on the upper income classes.

No, I hated the tax increases every year that man was in office. I don't know if it's fair to say it was his fault (I'd like to, really I like to blame Clinton for a lot of things) But when Bush came in I got more money in my home budget by far.  I believe in keeping the goverment small, and they only way to do that is to strangle their monetary supply, and even that's hard when they can just make more.

I'm not counting on Uncle Sam.  Mostly a bunch of crooked politicians IMO.  My point is to take care of yourself as best you can and don't depend on the government.

Sage advice.  No matter if SS stays solvent into the year 3000, it will still be less and less every year you are retired. If you don't fend for yourself, then nobody will do it for you, including the government.

Clearly there are people collecting Social Security who AREN'T the people Social Security Insurance was set up for, and I'm not simply referring to the teachers (not bagging on 'em), I mean the millionaire dude who CLEARLY shouldn't get it, still gets it. 

  If they pay into it, they should get back out of it. If the millionaire dude didn't pay for it, then he shouldn't get it. But if he did, then you just stole his money.  It is after all, his money. Just because he has a lot of it doesn't mean he should just give it up.  That's like saying Walmart has lots of candybars, why not just take a few?

Bush returned our money to us.  Magically the deficit returned

The deficit did return. We keep talking about that "deficit", but it's the National debt that's the big problem. It was shrinking under Clinton, but it has almost doubled under Bush since then.  It's like 6 or 7 trillion dollars now. That was the big story Clinton's admistration was discussing, along with ways to modify SS, Bill would have done what Bush is doing if he could have.

Haven't we seen the plan?  If not a fully detailed version, we have a good idea of what he is talking about right?

No, we have the concept. The concept is "we are going to build a building over here and it will have windows and elevators".
What we need to understand now is how is it going to work, the blueprints.  At that point we can make a decision if it's strong enough and has enough bathrooms, and what does it cost exactly?

Chile has a system like this that seems to be doing pretty well. Jbox mentioned that the Aussies are moving to a system like this.  FDR talked about this apparently back in the 30's.  So we just have to see how it can be built.

We can also expect that we aren't going to be able to cash in on SS as people retiring now have.  If you were born after 1960, the formulas have changed.  Soon, you won't be able to draw it until you are 85 the way the government has it set up.

SS does a lot more than people think right now.  It's supporting kids when their parents have died for years.  It pays disablity on lots of people, more than you may realize, and makes payments to kids off of that until they are 18.  20% of the rolls are NON retirees. (somebody back me up on that stat, it's my recollection only).

[DrewKaree]

I guess you can say Clinton raised taxes if you look at Regans tax record for his last 2 years in office.  But then look at Regan's first 6 years.  Clinton DEFINATELY didn't raise taxes relative to THAT record.  It's all relative

It sounds as if you are telling me about what you read or someone else told you.

Go get the forms.  They're freely available for download.  You'll be able to see in black and white with your own eyes.  It's anything BUT relative.

Looking at the income brackets/marginal tax rate figures, I'd say Clinton's admin raised taxes on the upper income classes.  Makes sense to me.  But tax law is MUCH too complicated to simply look at historical deduction/income bracket statistics. 

If you can read, you CAN simply look at the records, and you can see it quite clearly.  They don't put the information on the same page each and every year, but the info is there, it's measureable, and shows quite a different picture than was told to the American people.  I'm not going to quote it for you, because looking it up and seeing the figures with your own eyes will teach you far more than reading my quotes and you either accepting my figures or blowing them off.  The figures DO paint a picture that is easily able to be read. 

I've got better things to do (hang out with my family, play with the kids, build cabs.  You know, important stuff).

What's gonna happen to SS?  Time will tell.  Besides, I'm looking out for myself, and not waiting for the gov to tell me how much I'll get every month once I retire.

Looking out for your retirement is one of those important things too, but at least you're acknowledging that you have a responsibility to make sure you're doing what you feel necessary to deal with retirement, and doing something about it.

Kudos to you, ma brutha! 

 My point is to take care of yourself as best you can and don't depend on the government.

Excellent point, well spoken, and agreed with.  But also one of the reasons this topic is now on the table and why debate about it is starting in earnest all over the place....even on arcade control boards