Social Security Crisis?

[sadie]

This is simply converting what was once a guaranteed savings institution for all into government money-grubbing and corporate welfare. I still can't believe anyone actually buys this load of garbage.

________________________
Amen

[shostakovich]

From Shap regarding the wealthier wage earners: "They will be forced to pay into the system knowing that they cannot hope ever to see a decent return on their "investment". Most people don't want to see the program become another form of welfare."

I can see being irritated if you think payments into SS are an investment with the hope of a decent return. The return will not be decent, but it should help the less privileged survive. If the wealthier class think it's just another form of welfare, then they can feel the satisfaction of giving (in spite of the fact that it isn't voluntary). As for what they get back, it's more than they need, anyway. "Welfare" is not a four-letter word (to me).
Shos

<small>[ 03-08-2005, 03:49 PM: Message edited by: shostakovich ]</small>

[Shapley]

Shos,

Then we need to abolish the facade of "individual social security accounts" and recognize it as a tax-and-pay-as-you-go welfare program. We can ignore the facade of the "lock box" at the same time. Let people know the truth: they are being taxed to pay for a welfare program for those who don't prepare for their own future.

Welfare is fine, as long as you call a spade a spade.

V/R
Shapley

[OperaTenor]

Originally posted by Shapley:


Welfare is fine...

V/R
Shapley

It's a good thing I was sitting down when I read that.

[Shapley]

OT,

RE:It's a good thing I was sitting down when I read that.

You should have been up and working, you lazy bum!

V/R
Shapley

[lioness]

ROFL!!
Shapley, that one killed me!!!

[OperaTenor]

Apparently it killed me, too.

:head scratch:



I think....

[shostakovich]

Shos,

Then we need to abolish the facade of "individual social security accounts" and recognize it as a tax-and-pay-as-you-go welfare program. We can ignore the facade of the "lock box" at the same time. Let people know the truth: they are being taxed to pay for a welfare program for those who don't prepare for their own future.

Welfare is fine, as long as you call a spade a spade.

V/R
Shapley
-------------------------------------------------

Hi Shap. You shook up some members of the BBB.

SS theoretically is based on individual accounts, and the payoff is according to individual earnings. But the way it actually operates is more like the tax-and-pay-as-you-go welfare program you refer to. I don't care what it's called, but I wouldn't like to see it destroyed. It does need fixing, but Bush wants its destruction. By disallowing increased withholding as a method (even a partial method) he is essentially trying to kill it. Plenty of people like that idea, but I hope most voters don't.
Shos

[RC]

SS not welfare?
I thought that was the idea in the first place. Sometimes I feel so dumb.

About the wealthy getting cheated: wealthy people have better health care and live longer. When they retire, they stand a much better chance of getting their share.

Likewise, the poor, with poor health care and younger mortality rate, still get their own share back because they didn't pay in as much but they take out before retirement.

That leaves the middle class. Middle class pays in forever because they never reach the cap but tend to stay employed continually right up to the SS retirement age. They really need the money paid into SS because they live past retirement but tend to lose health care benefits and don't have much retirement ("middle class"). Raising the age of retirement benefits is just like lowering the wage contribution cap - it favors the wealthy.

It kinda makes sense to have the middle class towing the line simply because they represent the majority of the population (it's just math). But what we're ending up with is a welfare system where the middle class pays for the impoverished and the wealthy are pretty much off the hook.

Maybe we should eliminate or raise the contribution limit and leave benefit age alone, take a % of all contributions and invest in stock market by pooling risk categories and selecting randomly for moderate risk ratio's. Market benefits, returns should stabilize SS for a while.

??? This is just my ponderings. I'm really confused on the issue.

Where's my orange suit?

[Shapley]

I don't see how allowing 5% of one's contribution to be diverted to the stock market is going to destroy the system. 95% of them monies going into the "trust fund" will still go there. Since we, according to the Democrats, have a surplus going into the fund, the money will not be missed at present.

That is to say, it will not be missed by Social Security. It will be missed by the other programs that are borrowing it for their funding, but that is another issue. We are talking about saving Social Security, not saving the other underfunded programs.

V/R
Shapley

[piqaboo]

Originally posted by Shapley:
I don't see how allowing 5% of one's contribution to be diverted to the stock market is going to destroy the system. ...
V/R
Shapley

And how will it fix it? And how, particularly, will it cover the short-term shortfall between retirement of babyboomers and income from the next boom?

[OperaTenor]

The head of the GAO went on record today to say that while there is no crisis in the Social Security system, steps need to be taken, starting now, to fix problems looming in the future.

Left wing talk radio host Ed Schultz says the Social Security debacle is nothing more than a Republican diversion to take attention away from the more insidious and fundamental changes taking place in government.

[shostakovich]

I heard that it is up to 2/3 of the SS contribution that can be diverted, not 5%. It doesn't seem 5% would be worth doing.
Shos

[Shapley]

I've not seen the 2/3 figure anywhere. I would expect the allowable amount to be proportional to the "surplus" funds, if we are to not affect current benefit levels. If we allow the "contributors" to keep and invest the surplus, rather than letting the government "borrow" it to fund other programs, they will begin to build a "nest egg" with it, while the government will be forced to review the funding, and hopefully the necessity, of the programs skimming off the Social Security "trust fund".

I believe part of the concept is to ween the goverment from the Social Security "Teet". That is something that has been talked about for some time, but this President seems to be the only one with the gumption to try it.

V/R
Shapley "I feel like using lots of quotation marks today" Hunter

[shostakovich]

From Shap: "I believe part of the concept is to ween the goverment from the Social Security "Teet". That is something that has been talked about for some time, but this President seems to be the only one with the gumption to try it."

If by "weaning the government from the SS teat" you mean keeping their hands away from the SS surplus, I don't think that's what his privatizing plan is about. His plan is to wean the public away from the SS teat. I would replace "gumption" by "gall".
Your Friendly Bush-basher

[OperaTenor]

I'm on page 41 of the commission report. I'll admit, I haven't read every single word, but I see what they're getting at so far. The commission is recommending three options for augmenting the current system, all involving voluntary participation, each amounting to anywhere from an additional 1-4% above the current SS percentage withheld, two of the options having a $1,000 cap per annum.

What I gather so far is that, rather than raise taxes or cut benefits, they want to head off the projected shortfall caused by lowering contributor to beneficiary ratios by using private securities so that the net return will follow inflation/cost of living rises over time.

There is no mention of weaning the government off the program yet. It specifically states that the current system will remain in place, that the privatization part of it is an augmentation. I have to say this makes the progressive media guilty of exaggerating the privatization aspect of this, unless I haven't gotten to that part yet.

The problem I see so far is that while they say that return is guaranteed, they have yet to say just how they're going to accomplish it.Unless they have some magic machine that will suspend the laws of economics, the private investment portion will be subject to the same risks as the rest of the market, and therefore the same losses.

My bottom line impression so far is that this report is a HUGE sell job, over the top to the point that I don't trust their recommendations. Good research will speak for itself, and doesn't need to be spun. This is spinning like a top.
All of their pretty blue tables and figures are impressive, and illustrate what they wish to prove, but the whole time I'm reading it, my intuition's tugging at me that they're omitting the risks, like they don't want to look bad. Once again, not an indicator of good research.

RC, have you read/are you reading the report? If so, am I on the right track so far?
How about you, Haggis? You're pretty swift when it comes to things economic(he's pretty swift at a lot of things, especially compared to you, nitwit!). have you looked into this?

I'm trying to leave the jury out until I finish studying it

.

[OperaTenor]

Whoa! Stop the presses!

In section 1 of this report, they merely cite the federal employee Thrift Savings Plan as a model for personal investment retirement accounts. Now, I'm reading section 2(Administration), and they're discussing the system like the fundamental system is a clone of the TSP, and the augmentation is a potentially broader family of mutual funds to invest in.

This is a whole different ball game.

Now they're talking what constitutes a 100% privatization of the system, and they shifted gears without so much as a segue.

ARGHGHGH! I'm gonna be up all night reading this.....



<small>[ 03-11-2005, 02:21 AM: Message edited by: OperaTenor ]</small>

[OperaTenor]

The next installment:

100 pages of fluff tables and calcualtions in the middle of the report, all showing how the three models will work. All with the undertone of a rosy picture of the investment market, and absolutely no speculation of what will happen in unfavorable market conditions. One interesting set of tables in all of this deal with SS costs versus revenue over time, comparing between the current system and the privatized models. There is only a few years' difference in the point where costs exceed revenues on ALL of the charts! All of this is merely putting off the inevitable, and for what cost and risk?

On page 144 we finally get to the section about guarantees! They proceed to make all sorts of excuses about how nothing, not even the current system, is truly guaranteed, so be careful how you use that term. Nothing but bracing us for the empty promise.

PS. I predict this will pass. Why? Because most people won't take the time, or have the patience to read through this crap and figure out what's really being said, or better yet, what's left unsaid.



<small>[ 03-11-2005, 03:13 AM: Message edited by: OperaTenor ]</small>

[RC]

OT, do I have to be totally honest? I didn't read the entire thing as thoroughly as you did.

I did the typical hypocritical thing, took the knowledge I already had and applied it to skimming of the documents.

There was really little doubt in my mind that what you just posted was what it was all about. (I know that was very biased of me).

Ironically, I discovered quite by chance that my suggestion a couple of days ago is very close to what Clinton had propose. Maybe I was paying attention after all.

[Shapley]

OT:

RE:They proceed to make all sorts of excuses about how nothing, not even the current system, is truly guaranteed, so be careful how you use that term. Nothing but bracing us for the empty promise.

I've already explained this. Nothing this, or any, Congress can do obligates future Congress' to follow through on it. Any Congress with the cajones to do so can abolish the system completely, or redefine it, increase it, decrease it, etc. Any politician that tells you otherwise is a liar. It appears you'd rather believe in empty promises than face reality.

Social Security is not a Constitutional mandate.

V/R
Shapley