Wouldn't this fix the soc. security problem?

[Al B. Sure!]

instead of taxing only the first $68,400 of income at 12.4%, why not keep taxing beyond this relatively low 68K?

wouldn't that generate enough revenue to at least partially fund soc. security?

(not the mention the fact that the present situation makes soc. security taxes an unfair burden on the poor)

[Dauphin]

I would prefer the government force you to pay the money into private pension schemes.

[Velociryx]

Dauphin...if we're going to do that, why bother to take it out at all. I don't know 'bout you, but I don't really like the government "forcing me" to do anything in particular with my money.

Let me have it in my check and if I don't fund my own retirement....my fault. I would LOVE an option to opt out of the system.

-=Vel=-

[Patroklos]

Because of the simple fact that just because I have more than you does not mean I have to give you anything.

The best thig to do would be to scrap the system, let people use the money for what they want, and if they **** themselves they have learned freedom 101.

[Dauphin]

Originally posted by Velociryx
Dauphin...if we're going to do that, why bother to take it out at all. I don't know 'bout you, but I don't really like the government "forcing me" to do anything in particular with my money.

Let me have it in my check and if I don't fund my own retirement....my fault. I would LOVE an option to opt out of the system.

-=Vel=-

Maybe, but I see it a bit like car insurance. You make car insurance mandatory for all people who own or drive a car, even for those who want to opt out for whatever reason. Not doing that leads to some obvious problems.

I see similar problems with leaving pension preparations to individuals to prepare for retirement. I think you would end up with an underfunded welfare system trying to cope with those who failed to prepare and 'beg' for help or older people living in poverty because they failed to prepare.

[Velociryx]

Good analogy, the insurance one.

And I agree, even if I still don't like it...

-=Vel=-

[Kidlicious]

Vel's even against Social Security. I thought he was a moderate.

[Velociryx]

I'm not against social security, but if I had an opt-out option, I'd take it.

I do not need any assistance in planning for my retirement.

-=Vel=-

[Spiffor]

Originally posted by Dauphin
I would prefer the government force you to pay the money into private pension schemes.

Private pension schemes (whether forced or not) have exactly the same fundamental problem as public pension schemes.

The fundamental problem is that many old people live off the economy while not working.

When you give to a public pension (the money immediately benefits the current retirees), you obtain the right to claim this money in the future.

But guess what happens with private schemes / banks etc...

It is exactly the same.

When you give money to a bank or a stockbroker, this money is immediately invested back in the system. The banker doesn't put the bills in a safe, but he uses it immediately. The money you just gave disappeared, you'll have a hard time finding where it went. Same with stock: when you buy a stock, the money you just spent will be used by the one who recieved it.

What you otained, however, is the right to get a certain amount of money. Just like with public schemes.
There's a reason banks only have 8% of their capital in liquidities (meaning that 92% of the money a bank is supposedly having, it doesn't have for real).

If you invest in a private scheme today, you are contibuting to 2004's economy. But it doesn't mean that in 2040, the economy will be strong enough to sustain you and every other person who had the same idea. Public or private.

---

The only way to sustain our old people is either to have a population increase, to have them work much later, or to use our productivity increases to sustain them. Public or private redistribution makes little to no difference... Except that with private ones, the poor will never be forced to die at work.

[Kidlicious]

Originally posted by Velociryx
I'm not against social security, but if I had an opt-out option, I'd take it.

I do not need any assistance in planning for my retirement.

-=Vel=-

Maybe not, but some people obviously do. If we allow you to opt out the system will break. You might as well say you're against it.

[Kidlicious]

Originally posted by Dauphin
I would prefer the government force you to pay the money into private pension schemes.

You want to give up your survivor benefits?

[Kidlicious]

Originally posted by Spiffor
If you invest in a private scheme today, you are contibuting to 2004's economy.

Eh. What do you mean by invested? The savings rate would increase a lot. What will happen is that investment will increase, but fall off sharply after investors realize the bubble.

[Arrian]

I'm against it. I'd like to see it done away with. I do not see that it is benificial to anyone, rich or poor.

Failing that, I'd certainly like to see a law that prohibits the government from plundering it to prop up the budget (or did we manage to pull that off already?).

The problem with doing away with it is the very problem with it in general: ponzi scheme. I pay in, so that my parents may collect. It's not their money they are getting back. Therefore, in order to stop it but not screw senior citizens (which nobody wants to do, nor CAN do, given their political power) the people currently paying into SS must continue, at least for a while, and then get nothing at the end. Then it can be stopped.

Which would NEVER fly. Hell, a politician so much as mentions the words "Social Security" together with "reform" or "change" and he/she is toast.

-Arrian

[Dauphin]

Originally posted by Spiffor

Private pension schemes (whether forced or not) have exactly the same fundamental problem as public pension schemes.

The fundamental problem is that many old people live off the economy while not working.

When you give to a public pension (the money immediately benefits the current retirees), you obtain the right to claim this money in the future.

But guess what happens with private schemes / banks etc...

It is exactly the same.

When you give money to a bank or a stockbroker, this money is immediately invested back in the system. The banker doesn't put the bills in a safe, but he uses it immediately. The money you just gave disappeared, you'll have a hard time finding where it went. Same with stock: when you buy a stock, the money you just spent will be used by the one who recieved it.

What you otained, however, is the right to get a certain amount of money. Just like with public schemes.
There's a reason banks only have 8% of their capital in liquidities (meaning that 92% of the money a bank is supposedly having, it doesn't have for real).

If you invest in a private scheme today, you are contibuting to 2004's economy. But it doesn't mean that in 2040, the economy will be strong enough to sustain you and every other person who had the same idea. Public or private.

---

The only way to sustain our old people is either to have a population increase, to have them work much later, or to use our productivity increases to sustain them. Public or private redistribution makes little to no difference... Except that with private ones, the poor will never be forced to die at work.

I don't know how it works in France or Germany but my understanding of the system in the UK is this:

When you pay National Insurance taxes the money just gets lumped together with all other taxes pretty much. The government then allocates its spending budgets, a portion of which is to pay for health, transport, defence etc. including pensions. There is no investment of moneys in funds that will grow the pension pot, moneys paid to pensioners comes from moneys paid in by people currently working. It goes in and out immediately. There is no matching between money paid in by person A during their working life and money withdrawn by person A on retirement.

When you pay private schemes the money gets invested in stocks, shares, funds or other capital investments that get a return on investment. The value of the fund increases with fund growth and contributions. When you retire the value of the fund determines the amount of your pension payout. There is a direct correlation between what money was invested by person A and what was paid out to person A.

I see a clear difference between the two schemes. The former sees the children pay for the parents living, the latter sees the retiree live off the assets they built up over their working life.

[Spiffor]

Originally posted by Kidicious
What do you mean by invested?

Give money to a financial organism that promises to give it back to you when you ask / can.

Our whole economy can be considered a ponzi scheme: you give, and when you'll ask your money back, the money you'll get will come from the next generation.