Social Security Crisis?

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Re: Social Security Crisis?

Postby shostakovich » Wed Feb 09, 2005 9:51 pm

I have to go along with the criticism of the democrats. I think they are right to oppose privatization, but they DO have to come up with an alternative. Unfortunately the obvious and correct (IMO) solution is to rescind the tax cuts and increase the SS withholding. The problem is that those are risky proposals before mid-term elections. So they will sacrifice "correctness" in order to save their assholes (which is all they are, not even complete asses). All they do is say Bush is wrong. They are gutless parasites. Bush's proposals for disaster are obviously the things voters like to hear. Our collective citizenry pick convenience and comfort over sacrifice and decency. What makes me sick is that for several decades we've been able to do it without guilt.

On a different track, last night on Jay Leno, he showed Bush responding to (he claimed) the question "How does Social Security work?". The shocking response showed Bush doesn't understand how Social Security works. He fumbled and blurted pitifully. But, then, why should he know about it. He doesn't know anybody who ever needed it. When you live it you get a feeling for how it works. Till then it's an abstraction.

Bush can memorize and present a script very well. He does not always know what he is saying because the words and the meanings are not his.

Oh, yes, I've been noticing more people (including some congressmen, Jay Leno, and, I think, Bill O'Reilly) are saying "nucular". Can we be far from an amendment to some bill that will make "nucular" a word of equal value to "nuclear". In fact, if it's called an "equal rights amendment", it could probably carry a pork bill.
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Re: Social Security Crisis?

Postby shostakovich » Wed Feb 09, 2005 10:22 pm

In the Feb 14 Time there's an article on SS, including a gray box that shows an example of privatization versus the traditional plan. Here's the example.

A 40-year-old woman earns $35,000/yr now. She will retire in 2032 at age 67 earning $85,600/yr.

1) Traditional plan yields $3263/mo.

2) Privatization with good returns yields $3,346/mo.

3) Privatization with poor returns yields $3,212/mo.

I can't believe the yields would be that good. It's an act of unjustified faith that one can predict even roughly 27 years into the future. But, if the calculations are worth ANYTHING (and I doubt it), they show privatization will have little effect on the recipient.

Interestingly, within the article there is an example of a 38-year old (2 years younger) earning $35,000, who will retire at age 65 (2 years earlier). The yield, calculated in 2002 by the chief actuary's office at Social Security, is $1,343/mo (a much more believeable number IMO). At the time there was no calculation involving privatization, as it had not been formulated.

I'm left wondering who calculated the yields in the 3 thousands, and how (and why).
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Re: Social Security Crisis?

Postby analog » Wed Feb 09, 2005 11:33 pm

-------------------------------------------

<small>[ 02-10-2005, 05:53 AM: Message edited by: analog ]</small>
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Re: Social Security Crisis?

Postby dai bread » Thu Feb 10, 2005 3:57 am

Our Govt. has set up a Social Security (i.e. pension) fund as a stand-alone entity, funded from general taxation.

After much huffing & puffing & naysaying, the Opposition has bought the idea. The current Leader of the Opp. used to be the Governor of our central bank, so knows one end of an economy from another. His Finance spokesman is an ex-merchant banker, returned home a multi-millionaire from the money pots of London, and the about-face was actually his idea.

If those two (3 really- the Govt. man is no slouch) think a stand-alone fund is the way to go, it seems that they have read the same textbooks that your people have, and have done something about it.

However, I, and an increasing number of others, do get a bit boring banging on about the low wages paid here. You can't save without decent wages.

Long-term savings can be badly affected by inflation, even without stockmarket crashes. Anyone still got a Life Assurance policy? Anyone had one paid out lately?

For what it's worth, I predict a massive depression in or about 2020. This is based on history repeating itself in a 9-year cycle.

<small>[ 02-10-2005, 03:59 AM: Message edited by: dai bread ]</small>
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Re: Social Security Crisis?

Postby Trumpetmaster » Thu Feb 10, 2005 6:37 am

Quote from OT "I don't know of a stock broker or investment firm anywhere that provides any guarantee of principle against loss."

OT - I agree with you 100%. There is no guarantee and Bush is just spraying political fodder here.
-----------------------------------------------

Quote from Shostakovich
"He doesn't know anybody who ever needed it."
and
"Bush can memorize and present a script very well. He does not always know what he is saying because the words and the meanings are not his."

This is why I believe he is a figure head puppet who's strings are being pulled.
--------------------------------------------------


"I'm left wondering who calculated the yields in the 3 thousands, and how (and why).
Puzzled and Suspicious "

I recently saw a book titled "Lying with Statistics" I truly feel you can back into any number you wish. It's all in how it is presented.
Ability is what you're capable of doing. Motivation determines what you do. Attitude determines how well you do it.
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Re: Social Security Crisis?

Postby OperaTenor » Thu Feb 10, 2005 11:40 am

With the current discrepancies of cost projections for Medicare, what do you suppose the bill will end up being if the proponents currently estimate $1 trillion for the SS transition? If we use the Medicare example as a thumbrule, $3 trillion?!!! And we still aren't being told where this money is coming from. I have a feeling it will come from the same pockets the bailout money has always come from: Middle and lower middle class.

Please, show me how I'm wrong. I really want to be wrong about this.
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Re: Social Security Crisis?

Postby analog » Thu Feb 10, 2005 1:31 pm

regarding "nuclear"...

Prior to Jimmy Carter, "noo-kyu-ler" was listed in Webster's as a "nonstandard" usage, not quite so bad as the substandard "drownded" and "irregardless" but generally avoided by educated speakers.

Today, from Merriam Webster online-
------------------------------------
usage: Though disapproved of by many, pronunciations ending in \-ky&-l&r\ have been found in widespread use among educated speakers including scientists, lawyers, professors, congressmen, U.S. cabinet members, and at least one U.S. president and one vice president. While most common in the U.S., these pronunciations have also been heard from British and Canadian speakers
----------------------------------------
Maybe Shos & I should write to Laura.


Regarding those social security trillions -
The 2002 CFFR says (in figure 3) Social Security administration cost $495 billion, alomst half a trillion that year. That's 1/4 of all expenditures and lots more than the 278 billion for defense.

Like the grasshopper in the fable, we'll pay the price soon for congress' 1939 decision to not save for SS but spend as we go. I dont know how to ease the impending crunch but it seems obvious that a savings based plan is what SS eventually needs to become (as it was 1935 -1938). Personally I'd like to see it invested in treasury bills because it'll help the market for them here, both keeping interest down and keeping those interest payments here.

That's my view from the bottom of the economic food chain.

<small>[ 02-10-2005, 01:38 PM: Message edited by: analog ]</small>
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Re: Social Security Crisis?

Postby OperaTenor » Thu Feb 10, 2005 1:53 pm

Yes, I agree we'd be much better off now if they hadn't fooled with it in '39.

What would be the problem of simply restructuring SS into its original form, aside from getting politician's hands out of it(not that I see that as a problem)?

May I also sign onto that letter to Laura? I was annoyed when Jimmy Carter mispronounced it, and am dismayed that the mispronunciation is gaining acceptance. Why don't we add bohica while we're at it?

<small>[ 02-10-2005, 01:54 PM: Message edited by: OperaTenor ]</small>
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Re: Social Security Crisis?

Postby analog » Thu Feb 10, 2005 2:30 pm

OT -
I think SS ought to be put back to something resembling the original savings based plan..

and i'd be honored by your signing onto the letter.


Thanks,

old jim

<small>[ 02-10-2005, 05:04 PM: Message edited by: analog ]</small>
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Re: Social Security Crisis?

Postby shostakovich » Thu Feb 10, 2005 9:05 pm

From analog: "Prior to Jimmy Carter, "noo-kyu-ler" was listed in Webster's as a "nonstandard" usage, not quite so bad as the substandard "drownded" and "irregardless" but generally avoided by educated speakers."

My latest dictionary is the College Edition of the American Heritage Dictionary, 1979. That was during Carter's term and after Bush graduated Yale (or claims to have ;) ). "Nucular" does not appear as a word or as a pronunciation.

If you write the letter to Laura and OT addresses it, I'll supply the stamp. Oh, heck, she MUST have noticed George saying "nucular".
Shos

<small>[ 02-10-2005, 09:07 PM: Message edited by: shostakovich ]</small>
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Re: Social Security Crisis?

Postby analog » Thu Feb 10, 2005 11:14 pm

I guess the lexicographers are pained, too.
American Heritage Dictionary online at Yahoo :

ETYMOLOGY:
From nucleus
Usage Note:
The pronunciation (nky-lr), which is generally considered incorrect, is an example of how a familiar phonological pattern can influence an unfamiliar one. The usual pronunciation of the final two syllables of this word is (-kl-r), but this sequence of sounds is rare in English. Much more common is the similar sequence (-ky-lr), which occurs in words like particular, circular, spectacular, and in many scientific words like molecular, ocular, and vascular.

Hmmm - if she writes back, maybe in 2104 our great grandkids could take the letter to 'Antiques Roadshow'. :)
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Re: Social Security Crisis?

Postby shostakovich » Fri Feb 11, 2005 9:58 pm

I'm sure the value will be in the stamp. :D :D :D
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Re: Social Security Crisis?

Postby haggis » Mon Feb 14, 2005 10:02 am

Shos,
just out of curiousity do you forsee that any change to SS by anyone, Bush, Hillary, the Wizard of Oz et al, will affect you or your wife?
Haggis

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Re: Social Security Crisis?

Postby shostakovich » Mon Feb 14, 2005 3:37 pm

Hi Haggis. The Bush plan is not supposed to affect us directly in any way. Hillary and the Wizard have not proposed any plans I know of. So, at the moment, I'm not expecting we will be affected by SS changes. Why do you ask?
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Re: Social Security Crisis?

Postby haggis » Mon Feb 14, 2005 8:29 pm

Curiosity Shos, although you reminded me of what I said but didn’t realize,

” Hillary and the Wizard have not proposed any plans I know of.”

I know you think this might be a partisan cliché, but I truly believe it when the President says that absent his proposed changes, the only other alternatives beginning in 2012 will be reductions or tax increases.

Neither is attractive to me but I believe one or the other is inevitable if we don't do something along the lines the President is proposing.

Maybe not his plan, but surely anything that works other than reductions or tax increases has to be preferable??

(Ed. “Hmmm, aren’t you the former criminal investigator who said when someone used a conditional phrase like, “”to tell the truth” “To be perfectly honest” “in all honesty” or ”Truly” then whatever followed said conditional statement was almost always a lie?”

As Freud said, “Sometimes a cigar is just a cigar” and shut up)
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Re: Social Security Crisis?

Postby BigJon » Mon Feb 14, 2005 11:15 pm

SS Reform . . .Yuck!
I've read more on the proposed account structure over the weekend and I hate it! They haven't given me any more control than a garden variety 401k. I want complete control of my investment direction and location. Otherwise just forget about it. Eliminate the cap, means test the recipients and be done with it.

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Re: Social Security Crisis?

Postby haggis » Tue Feb 15, 2005 9:06 am

"They haven't given me any more control than a garden variety 401k"

and that's worse than reductions or tax increases??
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Re: Social Security Crisis?

Postby OperaTenor » Tue Feb 15, 2005 10:30 am

<img src="http://www.operatenor.100megs24.com/nsb.jpg" alt=" - " />
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Re: Social Security Crisis?

Postby GreatCarouser » Tue Feb 15, 2005 11:05 am

Originally posted by Haggis:
...and that's worse than reductions or tax increases??
"Even before last year's tax cut was enacted, overall federal tax burdens for middle- and low-income taxpayers were lower, on average, than they had been in most years of the past several decades. This was largely a result of income tax burdens having fallen fairly sharply. The Treasury data show that in 1999, the typical family of four with two children was paying a smaller percentage of its income in federal income taxes than at any time since 1966..."

This report is posted here. If this analysis is/was accurate it seems most folks' federal tax burden vs. income is at it's lowest point since the Johnson administration. Perhaps the crisis (if there is one) isn't with SS at all but with facing the current batch of elected officials with the burden of having to tell the electorate we're going to have to pay more for the things they feel we need to be doing?

That there is no free lunch should come as news to no one. Are the President and Congress ready to bite the bullet and look for the revenue for their new projects from sources other than already existing programs? I don't think so. Bush's mandate to his SS commission was clear. I quote from the first report I cited on this thread back on page 2: "The Commission’s proposal to reduce the Social Security replacement rates apparently was influenced by several factors. The President’s charge to the Commission ruled out any changes that would boost payroll tax revenue. In addition, the Commission was unwilling to consider approaches that would scale back the large tax cut enacted in 2001 and dedicate some of the preserved revenue to Social Security, as could be accomplished, for example, if the estate tax were retained in a scaled-back form and the revenue from a smaller estate tax were dedicated to Social Security. Finally, diverting a portion of Social Security payroll tax revenues to individual accounts, as the Commission proposed to do, would make Social Security's funding gap larger and thereby necessitate deeper Social Security benefit reductions. These constraints appear to be part of the reason that the Commission proposed the reduction in replacement rates, despite the fact that it would constitute a large reduction in future Social Security benefit levels." and later: "Still another constraint was the President's charge to the Commission ruling out investing a portion of the Social Security Trust Fund's revenues in assets that provide higher average returns over time, such as equities. As analyses by the Social Security actuaries have shown, investing a portion of Trust Fund reserves in higher-yielding assets closes some of the long-term Social Security financing shortfall and reduces the magnitude of the changes needed in the Social Security benefit-and-tax structure to restore long-term solvency." While you may argue that the commision's guidelines were laudable their practicality and true cost may make them unworkable. There are alternative 'fixes' for SS that don't impact the benefit structure anywhere near as forcefully as the Commission's plan does. What they don't do is fix the 'hidden in the details' problem of having a 'tax free' revenue source for government borrowing/funding. The SS trust fund is Congress' credit card. We the people will get the bill. The questions are when and which generation(s) will pay it?

So it would seem if this Administration has its way with SS one of the prices of the last 'tax cut' will be those under retirement age as well as their kids and grandkids will have to sacrifice some of their SS benefits (compared to current benefit payout structures). Well I've been paid $300 for that; I suppose that's fair...
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Re: Social Security Crisis?

Postby RC » Tue Feb 15, 2005 12:18 pm

Originally posted by Haggis:
"They haven't given me any more control than a garden variety 401k"

and that's worse than reductions or tax increases??
I guess you mean reductions to CURRENT recipients since, in as much as I'm aware, Bush's plan most definitely includes reductions to future recipients but no tax increases.

Does anyone know if Bush's plan is available for perusal anywhere?

I watched the talking heads this weekend and I read what others have to say about it but that makes me crazy. I don't like taking someone elses word for it.
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