Social Security question

[kallend 2,108]

The surpluses from the 1983 Social Security payroll tax increase have been diverted to pay for the Bush tax cut and war. The money has been replaced with non-marketable special-issue government IOUs that, unlike regular Treasury Bonds, have no real value and are thus not real assets. All they do is tell us how much Social Security money has been stolen by the government.

Bush says no increase in payroll taxes.

Bush says no cuts in SS benefits.

Bush says he wants to privatize, with 1% - 4% being diverted to private accounts. If that plan were enacted, that money would no longer be available to pay benefits to current retirees - a cost of well over $1trillion that will have to be found elsewhere.

So how can it be made to work? Borrow more? Crank up the presses at the Mint? The $US is already plumetting and is predicted to fall much further.

A phrase of G.H.W. Bush comes to mind: Voodoo Economics.

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The only sure way to survive a canopy collision is not to have one.

[ahegeman 0]

I've always liked the idea of tieing the inflation of SS payouts to cost inflation rather than wage inflation. Its not a "cut" in benefits, as it maintains current buying power, but it slows the growth. That would go a long way towards helping.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[kallend 2,108]

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I've always liked the idea of tieing the inflation of SS payouts to cost inflation rather than wage inflation. Its not a "cut" in benefits, as it maintains current buying power, but it slows the growth. That would go a long way towards helping.

That involves breaking the promise made to the boomers in 1983 (I am one of them) when the payroll tax increase was made. It is also peanuts compared to the size of the problem.

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The only sure way to survive a canopy collision is not to have one.

[Jib 0]

Why do you think a system that was designed for many people to pay for the brief retirement of a single person at the same time can possibly support a system where people are retired for as long as they worked?

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the depth of his depravity sickens me.
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[ahegeman 0]

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That involves breaking the promise made to the boomers in 1983

Ask me if I care. No matter what, someone's gonna get screwed, might as well be the fuck-ups who caused the problem.

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It is also peanuts compared to the size of the problem.

Just one suggestion. Didn't quite have time for a treatise. Especially since I don't pay into or expect to get anything out of Social Security.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[champu 1]

Social Security is a glorified pyramid scheme, and is destined to royally screw over a large number of people. Taking money out of it for war efforts certainly doesn't help any, but I've never had much faith that I'll ever see any of that $150 every two weeks again.

[kallend 2,108]

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Why do you think a system that was designed for many people to pay for the brief retirement of a single person at the same time can possibly support a system where people are retired for as long as they worked?

I didn't say I did. I 'm asking how Bush can keep his promises - no tax increrases, no cuts in benefits, and privatization, without killing the $US, which WILL affect you.

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The only sure way to survive a canopy collision is not to have one.

[kallend 2,108]

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That involves breaking the promise made to the boomers in 1983

Ask me if I care. No matter what, someone's gonna get screwed, might as well be the fuck-ups who caused the problem.

I 'm asking how Bush can keep his promises - no tax increrases, no cuts in benefits, and privatization, without killing the $US, which WILL affect you.

The fuck-ups who caused the problem are the politicians who stole the money from the trust fund. I very much doubt if they'll get screwed.

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The only sure way to survive a canopy collision is not to have one.

[ahegeman 0]

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I 'm asking how Bush can keep his promises - no tax increrases, no cuts in benefits, and privatization, without killing the $US, which WILL affect you.

He can't. Nobody really expects him to. I sure as hell don't. But if he'd said he'd reduce benefits, raise the retirement age, or increase payroll taxes, which are pretty much the only things that'll actually fix the problem, he'd have lost the election to someone making the exact same lies. Not exactly sterling leadership, but the American people don't want real leadership when it comes to their entitlements, they want promises and bullshit. We will simply have to wait until the system collapses.

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The fuck-ups who caused the problem are the politicians who stole the money from the trust fund. I very much doubt if they'll get screwed.

That's a cop out. Lame.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[Gawain 0]

I haven't read through all the fine print about the privatization proposal, but I believe that the "privatization" will not be an option for certain individuals over a certain age, and that it will be a limited option for others within a different "certain" age. That way, contributions are still made to the SS "fund".

Having said that, those who will be able to "max" out their contributions to a private fund will still be contributing to a government run pool as well.

Either way, I still support it. We can't fix this thing without touching it. It was built on the idea that people retired at 65 and lived to 70-75 (on the long end). That's not the case anymore. People are working longer, and living longer and in many cases don't even need the fund to support them.

I think extending the official "retirement" age should be a part of the package, with provisions and exceptions. Freeing some of the fund out of government's hands is only a good thing.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[MC208B 0]

Gee perfesser, I finally agree with you! The boomers didn't make this mess and we have paid a ton of money into it (that maybe we will see, but the next generation won't).

That $$$$ should be off limits to all politicians, all the time. ut of course, all administrations have had their fingers in that pie. Thier IOU's and Bush's IOU's are pretty much all worthless, wouldn't you agree?

Maybe one way to help is to take ALL the immigrants off the SSI dole and all the prisoners and street people too.

Maybe if you haven't paid into it you don't get any? Sounds sensible to me

[kallend 2,108]

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Gee perfesser, I finally agree with you! The boomers didn't make this mess and we have paid a ton of money into it (that maybe we will see, but the next generation won't).

That $$$$ should be off limits to all politicians, all the time. ut of course, all administrations have had their fingers in that pie. Thier IOU's and Bush's IOU's are pretty much all worthless, wouldn't you agree?

Maybe one way to help is to take ALL the immigrants off the SSI dole and all the prisoners and street people too.

Maybe if you haven't paid into it you don't get any? Sounds sensible to me

Would you have immigrants pay the SSI tax but get nothing back, or exempt them from the tax as well as the benefits?

It's certainly hard to disagree with the concept of nothing paid in --> no benefits.

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The only sure way to survive a canopy collision is not to have one.

[TheAnvil 0]

I like the Chilean system in concept, though any transition to such a system would incur some major costs in order to pay for the folks currently retiring.

Vinny the Anvil
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[PhillyKev 0]

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Ask me if I care. No matter what, someone's gonna get screwed, might as well be the fuck-ups who caused the problem.

Ummm...the fuck ups as you call them have been paying into the system a lot longer than younger workers. It's their money in the first place.

[MC208B 0]

No, if immigrants work and pay into SS, then by all means, they should reap the benefits. What I was referring to are the Russian (most recent case) immigrants that arrive on our shores and immediately start collecting SSI (it happens).

[ahegeman 0]

Obviously not enough.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[kallend 2,108]

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Obviously not enough.

Wrong again. We have been paying enough. The problem is that the money has been diverted to offset the deficit so you could have a tax cut, and replaced with worthless IOUs.

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The only sure way to survive a canopy collision is not to have one.

[SkyDekker 1,465]

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Obviously not enough.

Obviously don't understand the problem brought forward.

[DrewEckhardt 0]

FICA is a regressive (you're only taxed on the first $87,900 of salary that hasn't been diverted to other benefits) 12.4% (you don't see the employer's share if you're not self-employed) income tax. Today it has nothing to do with providing retirement savings.

Social security payouts are a budget item like any other social program, defense project, or pork pie. It's a horribly inefficient way to provide for people in their old age.

An average earning male born after 1966 will get a .5% inflation adjusted rate of return on Social Security. Low-income black males with a shorter life expectancy are likely to have negative return rates. Inflation adjusted bonds return 1.8%. Long term the stock market averages 7%. And no one can leave unused Social Security savings to their children!

Depending on your circumstances, you could invest half your money in bonds, half in the stock market, loose the entire stock market investment, and still have higher retirement benefits than you'd have with Social Security!

For most people Social security is a horrible waste.

[PhillyKev 0]

Very simplistic view. And what's to prevent the US gov't to invest the money for SS more prudently? Only one thing. The fact that it is included with the general budget. I recall some campaign promises about not tapping SS funds for other purposes. If that promise was kept, we'd be in a completely different set of circumstances right now.

[kallend 2,108]

By Daniel Gross:

Back in 1983, as part of a deal to save Social Security from impending demographic doom, Congress enacted legislation to essentially increase payroll taxes and reduce benefits. As a result, the government began to collect more Social Security payroll taxes than it paid out to beneficiaries each year. The theory was that the government would use these surpluses to pay down the national debt. That way, when baby boomers retire—and comparatively more people are collecting benefits while comparatively fewer people are working—the government would be in a better position to borrow the necessary funds to provide the promised benefits.

So much for theory. The reality? For the first 15 years, every penny of the surplus was spent, first by Republican presidents and then by a Democratic president. According to figures provided by the Committee for a Responsible Federal Budget, the surpluses were relatively insignificant for much of this period. Between 1983 and 2001 a total of $667 billion in excess Social Security payroll taxes was spent—about $35 billion per year. It was only in fiscal 1999 and 2000, when the government ran so-called on-budget surpluses, that excess Social Security funds were actually used to retire debt.

In the 2000 campaign, Vice President Al Gore said we should sequester the Social Security surpluses in a "lockbox" to prevent appropriators from spending them. Bush agreed in principle. But that commitment went out the window soon after the inauguration. In his first three budgets, Bush (who had the good fortune to take office at a time when the surpluses were growing rapidly) and Congress used $480 billion in excess Social Security payroll taxes to fund basic government operations—about $160 billion per year!

By so doing, Washington spenders have masked the size of the deficit. For Fiscal 2004—which began in October 2003—if you factor out the $164 billion Social Security surplus, the on-budget deficit will be at least $639 billion, rather close to the modern peak of 6 percent of GDP. And according to its own projections (the bottom line of Table 8 represents the Social Security surplus), the administration plans to spend an additional $990 billion in such funds between now and 2008. That year, according to the Office of Management and Budget's projections, the on-budget deficit will be about $464 billion. Only by using that year's $238 billion Social Security surplus does the administration arrive at a total, unified deficit of $226 billion. And the ultimate on-budget deficit will almost certainly be worse. OMB has proven in the past few years that its projections can't be trusted.

The accounting for Social Security surpluses has always been dishonest. But in the past few years, the Bush administration has made this shady accounting a central pillar of its fiscal strategy. The unprecedented reliance on these funds hides the failure of the administration to ensure that there is some reasonable correlation between the resources it has at its disposal and the spending commitments it makes. Bush & Co. have redesigned the tax system so that collections of the progressive taxes that are supposed to fund government operations—like individual income taxes—have plummeted. Instead, with each passing year we rely for our current needs more on the regressive payroll taxes that are supposed to fund our collective retirement.

The persistence of the administration and its credulous allies in eliding these facts is flabbergasting. Of course, for the Bush administration to give an honest accounting of the deficits, and of the role that Social Security surpluses play in keeping them down, would be to admit the fundamental bankruptcy—no pun intended—of its adventuresome fiscal experiment.

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The only sure way to survive a canopy collision is not to have one.

[ahegeman 0]

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Wrong again. We have been paying enough. The problem is that the money has been diverted to offset the deficit so you could have a tax cut, and replaced with worthless IOUs.

You may have been paying enough into SS itself, but that's a meaningless distinction as government funding is really all fungible, and its the boomers who've elected politicians for making the unsustainable promises which required the raiding of the Social Security funds in the first place.

And the problem isn't the tax cut, its that the government spends too much fucking money in the first place. I thought you were an anarchist.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[ahegeman 0]

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Obviously don't understand the problem brought forward.

Let me tell you what I do understand. My generation will never see a red cent of their SS payments, but will be paying for the retirements of the previous generations, not too mention paying on the debt they've accumulated from their orgy of spending on anything and everything. So explain that to me then, smart guy.

That'd really piss me off if I was paying into the SS system. Thank God I'm not.

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There is a fine line between 'hobby' and 'mental illness'.
--Dave Barry

[gmanpilot 0]

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It's a horribly inefficient way to provide for people in their old age.

I totally agree. SS was never intended to provide for anyone, it was only intended as a little bit of assistance. Now everybody thinks they should be able to live off of it when they are old.

I would be totally willing to give up my contributions and continue to contribute if we would just scrap the whole thing. Pick an age and provide benefits for everyone beyond that age, and tell everyone else they are on their own. It's a stupid system and a huge drain on the economy.

_________________________________________
-There's always free cheese in a mouse trap.

[mnealtx 0]

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It's a horribly inefficient way to provide for people in their old age.

I totally agree. SS was never intended to provide for anyone, it was only intended as a little bit of assistance. Now everybody thinks they should be able to live off of it when they are old.

I would be totally willing to give up my contributions and continue to contribute if we would just scrap the whole thing. Pick an age and provide benefits for everyone beyond that age, and tell everyone else they are on their own. It's a stupid system and a huge drain on the economy.

As a generality, I agree - most people could do better investing that money for themselves, if they were willing to do a bit of basic research.

Another way to fix the system: get rid of the Congressional retirement system so THEY have to use SS... they'd have it rehabbed in a week!

Mike
I love you, Shannon and Jim.
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