Social Security (Again)

[skydived19006 4]

This is an editorial by Neil Boortz,

Yesterday Nealz Nuze featured a poll asking your opinion as to whether or not Bush would be successful in reforming Social Security. Only 10% said it would very likely. Ninety percent said that it was either somewhat or not likely.

What will it take to make people understand what is being done to them here? Why are younger Americans so bored with this subject?

Here's your reality. You graduate from college. You begin your first real job. During the orientation process with your new employer someone steps in front of the group of new employees wearing a little smiley-face button with FICA printed on it. This person tells you that he is going to be in the payroll office every single payday, and before you get your paycheck he is going to take about 14% right off the top. That's 14 cents from every dollar you earn.** Mr. FICA then tells you that the government might, though it is not obligated to do so, let you have some of that money back if you live long enough. If you die before the government starts paying you this money back the government will keep it. You cannot leave it to relatives or charities through your will. Mr. FICA also tells you that politicians are going to spend that money ... all of it ... as soon as they get their hands on it. If things get so bad that there isn't enough money coming in as FICA "contributions" to pay the people who managed to live long enough to get some back, they will simply pass a regulation saying that you have to be older still before you start getting checks.

You raise your hand to ask a question. "Why can't I put that money in some retirement account that I own and manage? After all, I did work for it. I did earn it."

Mr. FICA is very unhappy with you. What's your problem? Don't you know that there are politicians in Washington, both Democrat and Republican, who are sitting there waiting for that money? They need that money to spend on projects in their home districts so they can tell the voters what a great job they're doing! They need that money to make more and more people dependent on them and dependent on government for their lifestyles! How are these politicians going to get their hands on that money if they allow you to put it into an investment account that you own and control? You're young, you're idealistic. You'll learn.

Politicians are telling us that we just can't privatize our Social Security accounts because, they say, it would cost too much. Cost? How? You just heard it. That money that you earned sitting in your private investment account is money that the politicians can't spend to buy votes. You say that they should just cut spending? What are you, nuts? Cut spending? When have you ever known politicians to cut spending?

Here ... let me just give you one example. They recently had a bit of an audit of the nearly $600 million in homeland security funding in Texas. This is money given to the State of Texas to be spent on homeland security matters. The audit disclosed that homeland security funds were used by buy a trailer that was used to haul souped-up lawn mowers to lawn mower drag races. I guess these lawn mowers were going to be used to mow down the terrorists. A Dallas Morning News investigation found that some other homeland security funds were used in Texas to buy equipment for traffic stops, conduct drug investigations, and some of the money was even spent for community festivals, whatever they are.

Now if you were to propose that spending on homeland security in Texas be cut by an amount equal to that amount spent on festivals, drug investigations and trailers to haul drag-racing lawn mowers, there would be pure hell to pay. You would be accused of engaging in a partisan attempt to cripple our homeland security efforts just to enrich Wall Street brokers.

Oh yeah. The Wall Street brokers. These people are viewed, perhaps accurately, as rich. To the left that means that they're evil. If people are allowed to invest their own money that they worked for and earned into their own privately owned retirement accounts then they will turn to brokers to invest those funds in our capitalistic marketplace. Brokers generally charge for these services. The left can't stand this. How dare investment brokers make anything investing money that should be in the pockets of politicians being spent to buy votes.

The real pity here is not so much that politicians are fighting so hard to keep the flow of vote-buying funds strong, but that the people of this country, especially the younger people, are so complacent about it. How can you be optimistic about the future of our Republic when our population allows an atrocity like this to continue!

But .. what am I thinking? How can I realistically expect younger people to be paying attention to this wholesale thievery when Jenn and Brad are splitting!

** Please don't show your ignorance by telling me that you're only paying a little over 7% and your employer "matches" your "contribution" with the same amount. Uttering those words only proves that you're just as stupid as the politicians believe you to be.

Experience is what you get when you thought you were going to get something else.

AC DZ

[skydived19006 4]

I heard an explanation of the “Social Security Lock Box” the other day. I was surprised to find out that there actually is a vault in Virginia, aka Social Security Lock Box. What I wasn’t surprised to find out is that there isn’t a large pile of US dollars, or gold sitting inside that vault. So you ask what’s locked in the vault, well it’s a large stack of bonds. The government of our great country has no mechanism to pile up money, the excess money goes into the general fund and is spent on “projects”, and replaced with bonds that the government promises to pay back when the program is no longer running an excess. If it were not for the “lock box” and only what was needed to pay recipients was taken form the tax payers, when they started to run short they would have three choices 1) raise taxes 2) borrow the money 3) find it elsewhere in the budget. As it is with the “lock box” when it comes time to pay back the bonds we again have three choices 1) raise taxes 2) borrow the money 3) find it elsewhere in the budget. Hell of a deal! One other choice would be to again rise the retirement age, push it to 80 or 90 (it’s currently 70 for me, I’m 40 years of age) and it wouldn’t be a problem.

As I see it we could progressively privatize, take the excess back form the general fund, and let younger people invest in private funds. As we get older and the current people that didn’t have the chance to have a private fund die off, we increase the percentage that’s privatize. I would think we could be at 100% private in 30 to 40 years.

Oh, can anyone find it in the constitution where the federal government is given the power to take from one citizen what he has rightfully earned, and give it to another person? I’m not exactly a constitutional scholar, and I couldn’t find it.

“From each according to his ability, to each according to his need.”

Experience is what you get when you thought you were going to get something else.

AC DZ

[Gravitymaster 0]

I agree with what you are saying. The problem is that the sheep in this country have been conditioned to believe that business is bad and govt can do no wrong. Everytime we push the debate closer to accepting the value of private investment in retirement accounts, a scandal comes to light and the sheep become frightened and retreat back to the security of the govt. nipple.

[skydived19006 4]

"People willing to trade their freedom for temporary security deserve neither and will lose both" Ben Franklin

Applies to many many topics.

Experience is what you get when you thought you were going to get something else.

AC DZ

[nathaniel 0]

Social security is a pyramid scheme, and it's largely worked so far because the particpating population is roughly pyramidal over time.

The crisis faced today is that it's not exactly pyramidal. The sides of the pyramid are wavy, and we're approaching a point where the group at the top is expected to be a little bit wider than it ought to be under the current financial terms, and the group in the middle making all the money is a little narrower.

3 things
1) we've not yet experienced a massive decline in the birth rate, so it's reasonable to expect a swell after this trough. There has always been a natural periodicity to the population growth rate. cross reference with China, where they /have/ experienced a massive decline in the birth rate due to population controls. China, in short, is f*cked in 20-30 years' time.
2) since it's reasonable to expect periodicity in the population cycle, massive debt would be a reasonable way to address the issue. Yes, it will be our children's debt, but by the time they grow up it will be the current "narrow" population of adults receiving social security being supported by a "swell" of people. Situations like this are precisely what debt is suited for--although there is always some overhead
3) to cut off social security now, in a sense, is to throw away all that the current working population has already committed to it. Unless you propose that the gov't refund all social security taxes to current workers. You'd really have to unroll the whole thing. That can't be done, because much of it's already spent. We can't un-spend it.

nathaniel

My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski?

[skydived19006 4]

Quote

3) to cut off social security now, in a sense, is to throw away all that the current working population has already committed to it. Unless you propose that the gov't refund all social security taxes to current workers. You'd really have to unroll the whole thing. That can't be done, because much of it's already spent. We can't un-spend it.

nathaniel

What you say is true, and I do understand that to maintain we need growth in the population. Also although they send me a "statement" every year, my money is long gone! If a private company tried to implement a similar system, they'd be prosecuted!

Experience is what you get when you thought you were going to get something else.

AC DZ

[DrunkMonkey 0]

Hi Martin!

-Neil

[skydived19006 4]

Quote

Hi Martin!

-Neil

Hey Monkey,

Any opinion on FICA?

Experience is what you get when you thought you were going to get something else.

AC DZ

[kelpdiver 2]

To be more accurate, you lose 6.2 cents of every dollar (up to a rapidly increasing max salary), and your employer pays 6.2 cents. You could view that as part of your salary, making it about 14%.

Medicare is 1.65% on each end.

[skydived19006 4]

Quote

Social security is a pyramid scheme, and it's largely worked so far because the particpating population is roughly pyramidal over time.

The crisis faced today is that it's not exactly pyramidal. The sides of the pyramid are wavy, and we're approaching a point where the group at the top is expected to be a little bit wider than it ought to be under the current financial terms, and the group in the middle making all the money is a little narrower.

nathaniel

I have a reform idea! Since as you say the pyramid is becoming a pillar and will get to the point where it’s basically one person working supporting one retired (ok, that’s not exactly what you said). Why not make it law that my two kids are forced by the federal government to write me and my wife a check each month. And since I’ll then be of the “AARP” mentality, because I deserve it they’ll be required to pay me what I think I need to live! Some people don’t have kids, but some have more than two. So for those people, we just designate someone’s “extra” kids as their personal supporters.

It’s interesting that we would have the government act as our segregate in performing these things when we would never do it ourselves. Government paid medical care; instead of asking the government to do it for us, why not just go door to door in your own neighborhood asking your neighbors to pay for your health needs?

Experience is what you get when you thought you were going to get something else.

AC DZ