Social Security yet again!

[GePap]

Social Security was meant to, and still does, mean assuring an income to people once paychekcs no longer come in, an assurance citizens did NOT have prior to its inception. For 60 years it has worked, and the complaints against it are primarilly ideological.

It is a social entitlement- it is society saying, even when old, we will give you enough not to starve or drop dead. Its not about making people rich at the end of life- you won't be rich of Social Security, but you will have something.

People are free, always have been, to save the income they do get however they wanted- each and every American making above 30,000 coupld probably afford to sneak away $100 a month in a money market account- no one has stopped the American people. The fact people DONT, the fact so many live of social security should be more than opbvious that most people will not get involved in stock speculation.

This board has a few great falings, few women, few elderly, so a bunch of young or middle aged white men (cause non-whites here too are a minority) go off shooting their mouths, and for all the intellect present (cause this group is very smart), it can still be filled with so much nonsense.

[DinoDoc]

Originally posted by GePap
Social Security was meant to, and still does, mean assuring an income to people once paychekcs no longer come in, an assurance citizens did NOT have prior to its inception.

If that's the case why was the retirement age set at 65 when the average life expectancy was 59.7 years?

[Rufus T. Firefly]

The fact remains that we've turned social security into a right without ever having a conversation about that. And it leads to some pretty questionable scenarios.

Consider: if all goes as plans, I'll be retiring in 23 years. I'll be getting a government pension (appox. 1/3 of the highest of my last 3 annual salaries) and should have $750,000-$1,000,000 (in current $) salted away in my government and TIAA retirement accounts. In short, I'll be fine.

So why on earth should I collect social security? Why on earth should hard-working taxpayers contribute to my greens fees? They shouldn't -- yet they will, because neither pensions nor investment income are taken into account when considering reduction of a SS recipient's "income."

So one problem is that people like me will end up collecting social security. A second, related problem is that there are too few people like me -- that is, people saving for retirement -- precisely because everybody's counting on social security. (We're the richest country in the world, and we have one of the lowest savings rates. That's the crisis.)

We'd all be best off is social security was returned to being what it was sopposed to be: a last-ditch source of support for the very old who have no other means. But I suppose that genie's long fled his bottle.

[DanS]

One thing is certain; if young people divert funds to personal accounts the old people still have to be paid. Since less money will be coming in but more money will be going out the general fund will have to start paying for most of social security almost immediately after privatization occurs. You think we have deficit problems now and that the dollar is sinking to fast? Just wait until the financial markets see the size of Bush's new post SS deficits.

As has been pointed out by the WaPo editors, among others, it shouldn't matter a whit to the markets whether the liability is recognized on the general fund's books or Social Security's books. They are identical obligations from a financial perspective (inasmuch as Social Security benefits are going to be paid as promised).

[Dinner]

But you and I both know that with in a short time deficits will have to be cut and so SS is likely to be cut as it will be the single largest expenditure. Why break a system that is currently functioning?

Like Rufus said there are ways to strengthen the system without destroying the promise made to needy elderly people. Meanings testing is a great way to save money by not sending checks to millionares and passing laws requiring Congress to stop stealing from the Social Security Trust Fund would also help.

[Ted Striker]

Originally posted by Oerdin
SS is actually in pretty good shape and only modest barrowing will be needed to keep it solvent through 2060. If we allow enough immigrants in then no borrowing would be needed at all.

Bush is willing to spend trillions on deficits for pet programs but he won't cut qanything to save social security? Why is it he wants to spend two to three times the cost of protecting social security to privitize it?

[JohnT]

passing laws requiring Congress to stop stealing from the Social Security Trust Fund would also help.

FYI: There is no Social Security trust fund.

[GePap]

The New York Times Magazine had an excellent article today, which will be online tommorrow and I will post a link to tommorrow that deals with a LOT of these issues, and also gives a history of the politics.

SS was supposed to be a RIGHT- it was a social pensions scheme, after all, and has done great wonders in ending senior poverty.

Interestingly enough, SS actuaries have always had to look 75 years ahead to look at the solvency of the system- you guys know what? In 1934, at a time that the % of Americans over 65 was around 5% (these are figures from the article which wI will link to tommorrow), Social Security actuaries forcast that in 2000 12.65% of the population would be over 65 years. They were abit above, since the actual figure was
12.49%. The men who put this program together KNEW what was coming, it was no surprise to them. That they made a system that lasted that long and whethered all storms and the same endless and constant bull from its ideological enemies (and every arguement made today was made 65 years ago, the tune has never changed) is incredible.

[GePap]

Originally posted by JohnT

passing laws requiring Congress to stop stealing from the Social Security Trust Fund would also help.

FYI: There is no Social Security trust fund.

Wrong, yes there is, to the tune of 1.5 Trillion dollars. UNless of course you think the US Treasury will default on 1.5 Trillion dollars of US Treasuries. Yeah, that would do wonders to the overall Treasuries market-show how trustworthy the US government is.

Or are you saying that future congresses will allow the US to default on lasrge portions of our own obliugations? Wow, I didn't know conservatives are so untrustworthy. I know never to lend money to you JohnT- i'll never get it back.

[GePap]

Originally posted by Rufus T. Firefly
So one problem is that people like me will end up collecting social security. A second, related problem is that there are too few people like me -- that is, people saving for retirement -- precisely because everybody's counting on social security. (We're the richest country in the world, and we have one of the lowest savings rates. That's the crisis.)

We'd all be best off is social security was returned to being what it was sopposed to be: a last-ditch source of support for the very old who have no other means. But I suppose that genie's long fled his bottle.

SS was never a "last resort" as you mention.

States in Europe and Japan do have public pensions, AND higher rates of savings than the US. Our miniscule savings rate has nothing to do with SS- without social security, many elderly, (heck, a good portion) would be on welfare programs-that Americans don't save is a cultural issue- we encourage spending and consuming, not saving. Fast, cheap, easy credit has far more to do with our palrty savings rate than Social Security.

[JohnT]

Wrong, yes there is, to the tune of 1.5 Trillion dollars. UNless of course you think the US Treasury will default on 1.5 Trillion dollars of US Treasuries. Yeah, that would do wonders to the overall Treasuries market-show how trustworthy the US government is.

Or are you saying that future congresses will allow the US to default on lasrge portions of our own obliugations? Wow, I didn't know conservatives are so untrustworthy. I know never to lend money to you JohnT- i'll never get it back.

Please, no need to get personal.

However, there is quite a bit of difference between a "trust fund" and 1.5 trillion in government debt. If you don't think so, well, that's your mistake... not mine.

[GePap]

The debt is the government's debt, NOT Social Security. Would you claim that the Japanese and Chinese have nothing in the bank because all they are holding are US Treasuries (aka, Debt?), and not cash itself?

It makes 0 economic sense to say that 1.5 Trillion in US Treasuries is meaningless unless you expect the US to default, whcih would cause FAR greater problems than just with SS. Do you forsee the US defaulting? Do you know of some dark, economic problem the rest of us don;t know about?

[GePap]

Millions of Americans own US Treasuries- are you claiming they have nothing, since all they own is government debt?

I am still at a loss of why anyone ever claims that US Treasuries don't matter, that they are ephemeral- is the Bond market just a fantasy???? When did the US start issuing junk bonds?

[chequita guevara]

Originally posted by DanS
Wall Street isn't too hot on it. They were wanting a system like the Brits have, where the Wall Streeters would get substantial fees.

Which is why, eventually, this is the system we will have. Once the door is opened to privitisation, Wall Street will lobby the hell out of Congress to get their hands on it, and sooner or later (probably sooner), you Republicans will give it to them.

We can just as well take them out of the general fund.

Paying benefits through the general fund would fundamentally alter the nature of the system.

So what?

[chequita guevara]

Originally posted by PLATO
With the stock market showing an average yearly return of nearly 12% for the last 70 years and with the security of investing in Government backed bonds, The privitization is beginning to sound pretty good.

That's not true. At best, as el freako has showed, the actual return on investment from the stock market has been below 5%. You're better off investing in your home as a retirement plan than putting it in the market. Consider, though, that there will eventually be a housing market crash, since you're going to have more supply than demand as all these aging boomers want to sell off their homes and move to Boca Raton. Those of us in the Sun Belt will be fine, though.