Now that we Amis have a nice tax cut, how to reduce spending to cover it?

[HershOstropoler]

Asking again, can anyone explain the SS system in a similar way?

[JohnT]

Originally posted by Kidicious


True, the govt has no obligation to pay you your SS. Your contributions go to pay current retirees, and yes it's a tax, not a personal investment or personal insurance. Future generations could decide that when you retire you shouldn't get benefits even though you paid for others to recieve benefits.

I hope future generations are that smart.

Btw, the government has no obligation to use any SS tax money for SS.

[Dinner]

Originally posted by DAVOUT
Minor adjustments is an understatement since their effect on the pension is not marginal, and people desagree; currently, civil servants are in strike, and make demonstrations.

This sounds like a golden oppertunity for the French state. Just tell these buggers to get back to work or they will all be fired. Either they go back to work (problem solved) or they all get fired and the state won't have to pay them pensions (problem solved).

[Japher]

Oh, Ok. The benefit for opting out would have to be better that staying in though, so wouldn't that cost more?

Not really. In fact it would save, if not earn the government more money, and save the consumer or reitree more money... It's a win, win, if that person who opts out has enough money to hit the break even, or break the break even point. Giving people money with a lower tax to save the gov. hundreds of thousands per household would be great! Especially since these people would be able to invest more (nail 'em with capital gains), buy more (love sales tax), and set up more trusts (gotta love estate taxes)... In the end everyone gets what they want. Just allowing someone to roll their traditional IRA to a roth IRA with a lower penalty would be huge.

[Kidlicious]

Davout,

You guys don't have a privatized system there, do you?

[Kidlicious]

Originally posted by JohnT
I hope future generations are that smart.

It's not smart at all. A bunch of poor people would have to let their parents live with them. I for one will be outraged.

Originally posted by JohnT
Btw, the government has no obligation to use any SS tax money for SS.

Right, there is a surplus which is used for other govt obligations.

[DAVOUT]

Until the like of Saddam take over the country, it cannot be done that way, unfortunately
The law rules here (l'Etat de Droit), and the right to go in strike will not be removed soon; the status of civil servant includes the right never to be fired (unless you have killed several people around), and as soon as you have worked 15 years for the state, you are definitely entitled to a pension (not full rate).

[JohnT]

Originally posted by Kidicious


There aren't THAT many baby boomers. True, they are a larger generation, but they aren't as big as people are making them out to be. The histeria in here is absurd. There have been no serious projections that have predicted that the current system can not be maintained with some minor adjustments.

Kidicious, the ratio of "contributors" to "retirees" has fallen from 42:1 in 1945 to 9:1 in 1955 to 3:1 in 2000 to a projected 2:1 in 2030*.

BTW, at SocialSecurity.org I found the following in re: to the referenced USSC cases:

' Ephram Nestor was a Bulgarian immigrant who came to the United States in 1918. He paid Social Security taxes from 1936 until he retired in 1955. In 1956 Nestor was deported for being a member of the Communist Party in the 1930s. His Social Security checks were stopped in accordance with a 1954 law that stated that deportees would lose their Social Security benefits. Nestor sued the federal government, claiming that he had a right to collect Social Security benefits because he had paid his Social Security taxes.**

The Supreme Court disagreed, saying, "To engraft upon the Social Security system a concept of accrued property rights would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands."

The Court's decision was not surprising. In an earlier case, Helverigh v. Davis (1937), the Court had ruled that Social Security was not an insurance program: "The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way." '


*Source: President’s Commission to Strengthen Social Security, "Interim Report," August, 2001.
**Isn't that funny? A Communist suing the government for private property rights of public funds!

[DAVOUT]

Originally posted by Kidicious
Davout,

You guys don't have a privatized system there, do you?

Edit : No, it is not private, it is autonomous and dont make profits
The system is managed jointly by the employers and the syndicates representing the employes. They mainly decide how the burden will be shared. But they cannot change the structure of the pension scheme without governement approval.

[JohnT]

Originally posted by HershOstropoler
Asking again, can anyone explain the SS system in a similar way?

Heh-heh. Apparently, not.

Go to http://www.ssa.gov/ and see if you can make heads or tails of how it's run.

[JohnT]

Kid: "Right, there is a surplus which is used for other govt obligations."

No, I meant any of the money. If Congress enacted a law tomorrow that stopped all SS checks but kept the taxes, there's not a single thing anyone can do about it.

Let me quote the USSC again: "The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way."

And they aren't, despite what you might hear of a "trust fund."

[Kidlicious]

Originally posted by HershOstropoler
Asking again, can anyone explain the SS system in a similar way?

Here's a Social Security Handbook .

I think the retirement age is 65 now, but it says 62 in the handbook.

[JohnT]

Thanks, Kid.

[Kidlicious]

Originally posted by JohnT
Kidicious, the ratio of "contributors" to "retirees" has fallen from 42:1 in 1945 to 9:1 in 1955 to 3:1 in 2000 to a projected 2:1 in 2030.

Please give me another source for this.

Even if these numbers are correct it doesn't say anything about the ability to maintain benefit payments.

[DanS]

Asking again, can anyone explain the SS system in a similar way?

No. Of course not.

It's more complicated, because some have pensions + reduced social security, some have pensions + social security, some have 401(k)s or 403(b)s + social security, some have Keoughs and IRAs + social security.

Social security now is 65, 2 months+, but by the time our generation gets there it is 67+, but probably will be changed to be even 69+ or 70+, which are the figures being bandied about.

401(k)s and 403(b)s are 59.5+ for unpenalized withdrawals, IIRC.

In general, the payout for social security is based on your average wage over your working lifetime, indexed to inflation, and adjusted in some other ways. If you retire late, you get a bonus.