Social Security to start cashing Uncle Sam's IOUs

[Xiahou]

Social Security to start cashing Uncle Sam's IOUs (http://news.yahoo.com/s/ap/us_social_security_ious)
It's official, Social Security is now paying out more than it takes in. Meaning the government has to borrow money from somewhere else to pay back the money that it owes the trust fund. With the possible exceptions of 2014 and 2015, the fund is expected to run deficits... well, forever... until it officially bankrupts in 2037.

Can I opt out of this ponzi scheme please?

[Sasaki Kojiro]

Aren't people going to have less kids over time, and the economy increase? That would seem to make it not quite a ponzi scheme.

[johnhughthom]

From the article: "Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800."

So are earnings over $106 800 not taxed for Social Security?

[gaelic cowboy]

unfortunately people live longer now which is where the problem comes from things like state pensions etc were never really intended to be paid out as the average life expentacy when they were set was lower than the limit but the doctors caught and then left the line behind

[gaelic cowboy]

From the article: "Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800."

So are earnings over $106 800 not taxed for Social Security?

I would imagine it goes to a higher rate at that point

[johnhughthom]

I would imagine it goes to a higher rate at that point

That's what I would have thought, but the article seems to imply (by omission) you don't pay anything on higher earnings.

[Centurion1]

i would be willing to forego it right now. im sure many middle aged americans would too.

you try telling greedy old people you arent giving them money any more.

It has to be scrapped people plan it into their retirement plans FDR never intended it to go so far.

[Louis VI the Fat]

opt out of this ponzi scheme please? One shall have to increase the taxation level, decrease the payout, or raise retirement age.

The system isn't broken. It's just a confusing pile of accounting tricks. Social security creates the impression of each taxpayer paying towards his own retirement/disability trust fund. Whereas for practical purposes, it more closely resembles an ordinary tax.

The productive generation will always have to pay for the unproductive generation, whether through a trust fund or taxes. The 'ponzi scheme' effect is created by demographic changes. The US faces the same demographic problems as the rest of the industrialised world. We should've done what Norway is doing with its oil revenue: buy up the newly developing countries. Then let this pay for the pensioner explosion.

Too late for that. The babyboomer generation has borrowed, instead of invested. They leave us with a double whammy: their loans, plus the Social Secutiry explosion. Both will have to be paid off at the same time. The whole industrialised world facing this same problem, we can't borrow from one another. We have to borrow even more elsewhere, or accept a steep decline in living standard. Either way: I suggest learning Mandarin.


I would imagine it goes to a higher rate at that pointDon't be silly. Where do you think you are, the Soviet Union? Social Security is a regressive tax system.

[Gregoshi]

So are earnings over $106 800 not taxed for Social Security?
Yes. You pay the SS tax on your earnings up to $106,800. Once you reach that amount they stop collecting on your earnings over that.

[johnhughthom]

I take it if I was to even hint that the threshold could be raised I would be shot down as a left wing commie Euro madman?

[Sasaki Kojiro]

I take it if I was to even hint that the threshold could be raised I would be shot down as a left wing commie Euro madman?

I remember during the campaign there was talk of Obama raising the threshold to 250,000. Or something like that.

And if people don't call Obama a left wing commie why would they call you one? ...

[johnhughthom]

I know a lot of you Americans get very touchy about tax raises.

[Gregoshi]

I know a lot of you Americans get very touchy about tax raises.
We like to argue about taxes over tea. :coffeenews:

[Xiahou]

Aren't people going to have less kids over time, and the economy increase? That would seem to make it not quite a ponzi scheme.Having less kids puts a higher burden on them when they become taxpayers supporting us. All the current workers are paying for current retirees, under the assumption that it'll be our turn on the top of the pyramid once we retire. However, the fund is forecast to be completely bankrupt well before my retirement age. I've been paying in for my entire working life and, as it stands, am likely to receive no benefit. Sounds like a ponzi scheme (http://en.wikipedia.org/wiki/Ponzi_scheme). :yes:


"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors."


I know a lot of you Americans get very touchy about tax raises. Bear in mind that their additional income that isn't taxed to SS also does not factor in when benefits (http://en.wikipedia.org/wiki/Social_Security_%28United_States%29#Retirement.2C_auxiliary.2C_survivors.2C_and_disability_benefits) are paid....

"A worker's retirement income benefit is based on his Primary Insurance Amount, or PIA. The PIA is the average of the highest 35 years of the worker's covered earnings (before deduction for FICA). Covered earnings in any year are limited by that year's Social Security Wage Base, the maximum earnings that could be subject to the OASDI portion of FICA payroll tax ($106,800 in 2010 [59]). If the worker has fewer than 35 years of covered earnings, zeros are used to bring the total number of years of earnings up to 35. Years of covered work more than 2 years before the year the worker turns 62 are indexed upward to reflect the increase in the national wage via the average wage index (AWI) from the time at which the earnings were covered in the past to the value of the AWI two years before the worker turns 62 (which is the most recent year available at the date the worker turns 62). One-twelfth of this 35-year average is the average indexed monthly earnings (AIME). The PIA then is 90% of the AIME up to the first (low) bendpoint, and 32% of the excess of AIME over the first bendpoint but not in excess of the second (high) bendpoint, plus 15% of the AIME in excess of the second bendpoint. Bendpoints designate the point at which the rates of return on a beneficiary's AIME change.[60][61] In 2008, the bendpoints for calculating the PIA are a change from 90% to 32% at $711 and a change to 15% at $4,288.[61][62] This PIA is then adjusted by automatic cost-of-living adjustments annually starting with the year the worker turns 62. Similar computations based on career average earnings determine disability and survivor benefits. These alternate computations average less years of earnings when the worker dies or is disabled before age 62 and use different base years for the inflation adjustments."

[Sasaki Kojiro]

Having less kids puts a higher burden on them when they become taxpayers supporting us. All the current workers are paying for current retirees, under the assumption that it'll be our turn on the top of the pyramid once we retire. However, the fund is forecast to be completely bankrupt well before my retirement age. I've been paying in for my entire working life and, as it stands, am likely to receive no benefit. Sounds like a ponzi scheme (http://en.wikipedia.org/wiki/Ponzi_scheme). :yes:



Yeah, I had that backwards somehow. I was thinking about someone how someone in the last thread mentioned that the baby boomers retiring was putting a strain on it. If there was a bump in babies that dissipated it would help the system out it seems.

Although life expectancy will probably increase as well, especially with the drop in smoking.

But the forecast is a "if the current system doesn't change" forecast, yeah?

[drone]

I knew 20 years ago that I would never see a dime back from my FICA "payments". The boomers are going to suck the teat dry, the last act of the worst generation.

[a completely inoffensive name]

The problem is self correcting in the long run, necessary taxation precautions need to be taken to survive the baby boom hump before social security sees a return to a stable multi generational birth level at which point changes can be made back to pre baby boomer status.

[HoreTore]

And if people don't call Obama a left wing commie why would they call you one? ...

In what alternate reality was/is Obama not called a left-wing commie babyeating terroristhippie?

[Subotan]

im sure many middle aged americans would [surrender their Social Security]
ahahahah


It has to be scrapped people plan it into their retirement plans FDR never intended it to go so far.


Having less kids puts a higher burden on them when they become taxpayers supporting us. All the current workers are paying for current retirees, under the assumption that it'll be our turn on the top of the pyramid once we retire. However, the fund is forecast to be completely bankrupt well before my retirement age. I've been paying in for my entire working life and, as it stands, am likely to receive no benefit. Sounds like a ponzi scheme (http://en.wikipedia.org/wiki/Ponzi_scheme). :yes:

"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors."

Correct. The current state of the pension system in many Western nations resembles a Ponzi scheme because of the demographic situtation when many of them were first created has now changed. For example, the pension age for British citizens is 65. When it was introduced in the 1940's, the average life expectancy of a male Briton was 63. Now, it's late seventies.

As average life expectancies have increased, so has the burden on pensions. But this was offset by rapidly growing populations in Europe and the USA. Now that population growth has slowed and the baby boomers have reached retirement age, we have a problem. Baby boomers, a huge segment of the population expect and will receive a long, subsidised golden retirement of about 20 years. This is not how the system was designed or should work.

But that is not to say that the pensions are flawed, or that it was flawed when it was introduced. Rather, there has been a chronic lack of reform to adapt a social policy so sensitive to changes in demographics to demographic changes. The idiot idea that you shouldn't pay any SS over $100,000 is one glaring example. Radical reform is needed to prevent the economic crippling of the OECD nations, but it is doubtful that any ideology has the will or the political capital to brave out such unpopular reform.

[KukriKhan]

The problem is self correcting in the long run, necessary taxation precautions need to be taken to survive the baby boom hump before social security sees a return to a stable multi generational birth level at which point changes can be made back to pre baby boomer status.

I can see that. You 18-35'ers need to get out there are make moar babeez. Makes Grampa proud, and gives him beer money.

[Gregoshi]

I can see that. You 18-35'ers need to get out there are make moar babeez. Makes Grampa proud, and gives him beer money.
:laugh4: Will a six pack of both do the trick Gramps?

[drone]

The problem is self correcting in the long run, necessary taxation precautions need to be taken to survive the baby boom hump before social security sees a return to a stable multi generational birth level at which point changes can be made back to pre baby boomer status.

If it was just the boomer retirement years, Social Security would survive. The main problem is that the social security fund has been raided by Congress for other projects, now the bill is coming due. This is not so much a demographic problem, but a bad government problem. What would normally be a funded entitlement is now a debt liability on top of the mess we already have.

[PanzerJaeger]

More of FDR's chickens coming home to roost. Once an entitlement is given, it is nigh on impossible to take away - regardless of how it effects the nation's finances. Privatize it or kill it, doesn't matter to me. I'm never going to see a penny from it anyway.

What's scary is how tiny SS is in relation to how big of an entitlement health care will be - making demographic changes even more crippling to the country.

[Strike For The South]

Let's just annex Mexico and put a tax on chicklets.

[Centurion1]

i think we should annex canada........ or have we i always forget?

[Lemur]

Let's just annex Mexico and put a tax on chicklets.

i think we should annex canada........ or have we i always forget?
You fools! Annexations cost money. A tax on chicklets, on the other hand, might get us where we're going ...

[Centurion1]

You fools! Annexactions cost money. A tax on chicklets, on the other hand, might get us where we're going ...

but with both Vermont and Canada in our grasp we would completely control the syrup trade let alone the ham/bacon trade.

[KukriKhan]

If it was just the boomer retirement years, Social Security would survive. The main problem is that the social security fund has been raided by Congress for other projects, now the bill is coming due. This is not so much a demographic problem, but a bad government problem. What would normally be a funded entitlement is now a debt liability on top of the mess we already have.

Yeah. And the SS Trust Fund isn't the only one. They regularly raid any "loose money" they see apparently just laying around doing nothing but slowly accruing tiny interest for its contributors. The Fed's Thrift Savings Plan (a 401(k) knockoff) is another. Congress, and Fannie Mae & Freddie Mac have tapped that money yearly, especially hard since the armed services got brought into the Plan about 6 years back; and they repay, slowly, with Treasury Bonds.

And that 'tapping any loose money' has me wondering, with some much of TARP $$ left un-committed, where, exactly is that cash, and who makes $$ off where it sits? Please don't tell me AIG.

[a completely inoffensive name]

Ok, so if the problem is congress raiding money from the program, institute greater transparency and make it illegal to remove any money from the program period. Then make the necessary taxation changes and continue as I explained above.

[KukriKhan]

Ok, so if the problem is congress raiding money from the program, institute greater transparency and make it illegal to remove any money from the program period. Then make the necessary taxation changes and continue as I explained above.

A perfect problem-solving answer. Bravo!

It mirrors Al Gore's "lockbox theory" for Social Security solvancy from 15-16 years ago. And I agree.

BUT: What do you do, from where does the money come, when unforseen events occur? Tornadoes, wars, earthquakes, floods, market meltdowns, and the like? I mean: you can plan for floods, and storms and earthquakes and employee retirements - set money aside for those things. Then somebody flies a couple of planes into some big NY and DC buildings, and the next thing you know, your army is in southwest Asia, needing beans and bullets. Not to mention that Aunt Sarah's street needs its potholes filled; you remember Aunt Sarah, the one who donated $5k to your election campaign, as 'primer money' for her garden club to imitate? To the tune of $125k, just enough to buy enough air-time on W-Podunk radio to put you over the edge and into office?

And that money is just sitting there. And your predessessors wrote provisions into the law creating those funds, allowing congressional dabbling.

All you, an elected Rep, have to do, is to convince 51% of 434 (that'd be 222 of them) other reps that you're right, and that their soldiers will be fed and provisioned, and their Aunt Sarah's potholes will be fixed, along with your own.

[a completely inoffensive name]

A perfect problem-solving answer. Bravo!

It mirrors Al Gore's "lockbox theory" for Social Security solvancy from 15-16 years ago. And I agree.

BUT: What do you do, from where does the money come, when unforseen events occur? Tornadoes, wars, earthquakes, floods, market meltdowns, and the like? I mean: you can plan for floods, and storms and earthquakes and employee retirements - set money aside for those things. Then somebody flies a couple of planes into some big NY and DC buildings, and the next thing you know, your army is in southwest Asia, needing beans and bullets. Not to mention that Aunt Sarah's street needs its potholes filled; you remember Aunt Sarah, the one who donated $5k to your election campaign, as 'primer money' for her garden club to imitate? To the tune of $125k, just enough to buy enough air-time on W-Podunk radio to put you over the edge and into office?

And that money is just sitting there. And your predessessors wrote provisions into the law creating those funds, allowing congressional dabbling.

All you, an elected Rep, have to do, is to convince 51% of 434 (that'd be 222 of them) other reps that you're right, and that their soldiers will be fed and provisioned, and their Aunt Sarah's potholes will be fixed, along with your own.

The money comes from higher taxation. Preferably on the rich out of necessity or practicality. Part of the reason to making the hard decision of raising taxes when more money is needed is that the public will realize that to have everything they need to pay for it. And if they refuse then they have to decide what it is that they can afford and spend their money on, a war, or social security. By shifting money around, the public doesnt have to make the choice, but the long term fiscal stability of the country is threatened.

And there is the problem with modern conservative thinking. They choose people who vow not to raise taxes, so they dont make the tough decision and instead shift the money around, the fiscal stability of the government is threatened and it feeds into the conservative idea that government doesn't work, and that it shouldnt be trusted with more money, so they pick someone who vows not to raise taxes....and the loop feeds upon itself.

[Crazed Rabbit]

Ok, so if the problem is congress raiding money from the program, institute greater transparency and make it illegal to remove any money from the program period. Then make the necessary taxation changes and continue as I explained above.

Have fun watching the economy grind down when two workers have to support the social security of one person with only social security taxes. That is, on top of federal income tax, state income tax, property taxes, paying for food and housing, etc. etc., each worker in America will have to pay half of the social security cost of someone.

So, yeah, taxes could work in gathering money. But the system needs to fixed (damn you FDR), and that means allowing people to have control over where they invest.

But nooooooooooooooooooooooooo, the democrats had to stop Bush's plan that would have fixed that, just because they wanted to be contrary.

CR

[Subotan]

Like I said, Social Security worked fine when the demographics it was designed for continued. But as that is no longer the case there needs to be reform.



But nooooooooooooooooooooooooo, the democrats had to stop Bush's plan that would have fixed that, just because they wanted to be contrary.

Source? And it's not like the Republicans have a stellar record on efficient use of the federal budget, y'know.

[Xiahou]

A perfect problem-solving answer. Bravo!I would have "saved" it by phasing it out. Workers under a certain age could divert their contributions to private retirement accounts, while their employer contributions could have been used to continue paying for those currently recieving benefits and those soon to be recieving benefits. The idea would be for Social Security to have a nice, soft landing while going away insteading cratering- like it's going to.

Of course, I said "would have" saved it- because now that it's running in the red, I don't really see any other end to it than to crash & burn. The fact that it's projected to happen before I'll collect a dime for it is kinda sad..... :shrug:


make it illegal to remove any money from the program period.What money? There isn't any. The government has "borrowed" all the money that's in the trust fund and replaced it with treasury bonds. Now that Social Security is running in the red, the government has to start paying out those IOUs in order to continue paying benefits. Naturally, the only way for the government to pay those bonds is to sell more bonds (debt) to China, Japan, ect. I know it's cliche, but just imagine if we ran our personal finances so irresponsibly.

[Centurion1]

admit it social security is screwed because people are greedy.

[m52nickerson]

But nooooooooooooooooooooooooo, the democrats had to stop Bush's plan that would have fixed that, just because they wanted to be contrary.

CR

You mean his plan to privatize it, which would have meant private investment into the stock markets? The ones that at the end of 2008 tanked.

That would have worked great. :wall:

[Xiahou]

You mean his plan to privatize it, which would have meant private investment into the stock markets? The ones that at the end of 2008 tanked.

That would have worked great. :wall:You mean the stock market that's already bounced back despite a still soft economy? What a lousy track record (http://stockcharts.com/charts/historical/djia1900.html), huh? No matter how bad my 401k performs, it's still going to pay out infinitely more returns than what Social Security is projected to pay. :yes:

[Crazed Rabbit]

You mean his plan to privatize it, which would have meant private investment into the stock markets? The ones that at the end of 2008 tanked.

That would have worked great. :wall:

Yes, I do mean that. I did a little bit of research after the crash, and found that the stock market right after the crash was high enough that if you had been investing for 30 years, you'd still have made more money than from social security.


Source? And it's not like the Republicans have a stellar record on efficient use of the federal budget, y'know.

Um...didn't think it needed a source. Bush proposed a sort of privatization back in 2005 and the democrats opposed it (http://www.washingtonpost.com/wp-dyn/articles/A35231-2005Mar14.html).


admit it social security is screwed because people are greedy.

It's flawed because it's a ponzi scheme and the government won't arrest the perpetrators.

CR

[a completely inoffensive name]

Have fun watching the economy grind down when two workers have to support the social security of one person with only social security taxes. That is, on top of federal income tax, state income tax, property taxes, paying for food and housing, etc. etc., each worker in America will have to pay half of the social security cost of someone.

So, yeah, taxes could work in gathering money. But the system needs to fixed (damn you FDR), and that means allowing people to have control over where they invest.

CR

That's why you don't tax the workers. You tax the rich. Now before you go off on your rant about how that will kill the economy even me more, let me ask you a question:
If taxing the workers will slow the economy to a halt and taxing the rich will slow the economy to a halt (because they all flee from the country where they got their billions of dollars or something due to paying a couple million more) then we must either stop taxing altogether to save the economy or we must accept that taxation is will be a necessary hinder to our economy, now if we accept that we must tax (since we like to have a government to protect us) then since we have determined from your present and past comments that taxing period (rich, poor, middle) will hurt the economy then why not tax those with the most money to be gained from?


I would have "saved" it by phasing it out. Workers under a certain age could divert their contributions to private retirement accounts, while their employer contributions could have been used to continue paying for those currently recieving benefits and those soon to be recieving benefits. The idea would be for Social Security to have a nice, soft landing while going away insteading cratering- like it's going to.

Of course, I said "would have" saved it- because now that it's running in the red, I don't really see any other end to it than to crash & burn. The fact that it's projected to happen before I'll collect a dime for it is kinda sad..... :shrug:

What money? There isn't any. The government has "borrowed" all the money that's in the trust fund and replaced it with treasury bonds. Now that Social Security is running in the red, the government has to start paying out those IOUs in order to continue paying benefits. Naturally, the only way for the government to pay those bonds is to sell more bonds (debt) to China, Japan, ect. I know it's cliche, but just imagine if we ran our personal finances so irresponsibly.

1. People can't handle money. It's a sad but unfortunate truth to our society. I'll be ready to hear about how awesome you are with money, which totally disproves my point.
2. Your last paragraph is illogical. You make the changes to ensure that future influxes of money wont be taken. Obviously the money already taken in has been looted. Also, lol at last sentence:
I know it's cliche, but just imagine if we ran our personal finances so irresponsibly. They do.


You mean the stock market that's already bounced back despite a still soft economy? What a lousy track record (http://stockcharts.com/charts/historical/djia1900.html), huh? No matter how bad my 401k performs, it's still going to pay out infinitely more returns than what Social Security is projected to pay. :yes:

I guess those that had decided to retire in 2007, 2008 and 2009 can be swept under the rug.


Yes, I do mean that. I did a little bit of research after the crash, and found that the stock market right after the crash was high enough that if you had been investing for 30 years, you'd still have made more money than from social security.

CR

I did some research that shows the exact opposite of your findings. interesting....

[Xiahou]

1. People can't handle money. It's a sad but unfortunate truth to our society. I'll be ready to hear about how awesome you are with money, which totally disproves my point.It's irrelevant. At most, the individual only has to select a fund for their contributions to go into. For 401ks and the like, you don't go shopping around for individual stocks- you pick a plan. I'm still fairly young, so I picked a plan that was heavily invested in stocks and fairly aggressive. When I'm closer to retirement, I would switch it to something more balanced. That's the extent of my involvement. You don't need to be a financial wizard.

I guess those that had decided to retire in 2007, 2008 and 2009 can be swept under the rug.You don't take out your retirement in a lump sum. Their plans would have rebounded just like everyone else's.

[a completely inoffensive name]

It's irrelevant. At most, the individual only has to select a fund for their contributions to go into. For 401ks and the like, you don't go shopping around for individual stocks- you pick a plan. I'm still fairly young, so I picked a plan that was heavily invested in stocks and fairly aggressive. When I'm closer to retirement, I would switch it to something more balanced. That's the extent of my involvement. You don't need to be a financial wizard.
No, you don't need to be a financial wizard. You just need to know what a 401k is and a basic knowledge of what stocks are and how the stock market works....oh yeah, about that....



You don't take out your retirement in a lump sum. Their plans would have rebounded just like everyone else's.

Depends on their retirement plan. You speak with certainty when you know nothing about the finances of others.

[Xiahou]

No, you don't need to be a financial wizard. You just need to know what a 401k is and a basic knowledge of what stocks are and how the stock market works....oh yeah, about that....What percentage of our population do you estimate as having no idea of what a stock is? Regardless, they still wouldn't need to know. They could throw darts at a menu of plan options and any one of them would payout better than Social Security is going to.


Depends on their retirement plan. You speak with certainty when you know nothing about the finances of others.Seriously? What total nonsense. No government mandated retirement would let participants lump-sum their contributions.

[Strike For The South]

Remind me again why we're giving a pay out to people simply becuase there hearts are still beating?

[a completely inoffensive name]

They could throw darts at a menu of plan options and any one of them would payout better than Social Security is going to.
The absurdity of this statement puts your entire reasoning skills and your argument into question. Please dont become a financial planner and tell people that throwing their money randomly into a free market plan with no prep or research is smarter then trusting the government.


Remind me again why we're giving a pay out to people simply becuase there hearts are still beating?
I don't know, "life, liberty and the pursuit of happiness" wasn't put in the Constitution, so it's not really something we have to follow.

[Strike For The South]

I don't know, "life, liberty and the pursuit of happiness" wasn't put in the Constitution, so it's not really something we have to follow.

And if you outlive everyone there's a payday!!!!!!!!!!!!!!!!!!!!!!

[HoreTore]

Remind me again why we're giving a pay out to people simply becuase there hearts are still beating?

Because letting people starve to death is barbaric, Strike.

[Strike For The South]

Because letting people starve to death is barbaric, Strike.

So is abortion but it's none of my damn buisness

[HoreTore]

So is abortion but it's none of my damn buisness

Fetuses aren't alive, so no, it's all fine and dandy ~:)

nothing to see here....

[Strike For The South]

Fetuses aren't alive, so no, it's all fine and dandy ~:)

nothing to see here....

Well maybe, but why should I have a moral obligation to an old man who wasted his money on whiskey and whores instead of saving?

[Crazed Rabbit]

Remind me again why we're giving a pay out to people simply becuase there hearts are still beating?

It started because FDR wanted votes and buying them is easy. And continued because the government took their money in the first place and said it would save it for them for retirement.


The absurdity of this statement puts your entire reasoning skills and your argument into question. Please dont become a financial planner and tell people that throwing their money randomly into a free market plan with no prep or research is smarter then trusting the government.
:laugh4::laugh4::laugh4::laugh4::laugh4:

It is smarter. That's was so ***-****** awful about social security; picking any sort of 401k plan between any two points of 30 years - even if the end is at the low point of a stock crash - would give a better payout that social security. Social security is not some kind of alternate retirement investment plan that's near as good as a 401(k) plan.

Social security is so mind bogglingly stupid, and has such a low yield, that basically any form of investment outside of hiding money in a mattress will give a better return*.

So, naturally, it is the system the government insists on enforcing at gunpoint on every person in the USA. That's because the government is stupid.

CR
*When social security crashes, the mattress may have become a better choice as well.

[miotas]

Sounds as if something like super (http://en.wikipedia.org/wiki/Superannuation_in_Australia) would be helpful.

[Subotan]

The poor do not have the financial resources you seem to imagine that they have to save or invest in the stockmarket. If they make some bad investments, then it's bye bye house and hello cardboard box. Social security is not designed to yield bumper profits for grannies and grandads, it is designed to keep people out of poverty. Yes, it is a huge cost to the American government, but it is a necessary one. The problem with social security has been a massive fifty year pensions holiday, in which reform has been eternally delayed to some future-Congress, which coincidentally makes it harder to reform as more people become dependant on it.

[drone]

The poor do not have the financial resources you seem to imagine that they have to save or invest in the stockmarket. If they make some bad investments, then it's bye bye house and hello cardboard box. Social security is not designed to yield bumper profits for grannies and grandads, it is designed to keep people out of poverty. Yes, it is a huge cost to the American government, but it is a necessary one. The problem with social security has been a massive fifty year pensions holiday, in which reform has been eternally delayed to some future-Congress, which coincidentally makes it harder to reform as more people become dependant on it.
In the US, Social Security taxes are taken automatically from employees' paychecks. The employer is also taxed the same amount. The retirement payments received is a function of the worker's wages over the course of their life, so poor people get little anyway. The point CR is making is that if the same amount of money was taken from the employer and employee and put into a standard 401k or IRA, the returns would be better, and they would also be safe from the grasping hands of the federal lawmakers who can't show any sort of fiscal responsibility. The money is being forcibly taken anyway, rich or poor still contribute, and will only get back payments relative to what they put in. Or in my case, nothing, since there won't be anything left when I retire. 6.2% of my income, and 6.2% of my employer's money, down the drain. And I don't expect to see any of the 1.45% (plus 1.45% of my employer's money) for Medicare either, that will be raided as well.

Ponzi scheme, at the point of a gun.

[Strike For The South]

The poor do not have the financial resources you seem to imagine that they have to save or invest in the stockmarket. If they make some bad investments, then it's bye bye house and hello cardboard box. Social security is not designed to yield bumper profits for grannies and grandads, it is designed to keep people out of poverty. Yes, it is a huge cost to the American government, but it is a necessary one. The problem with social security has been a massive fifty year pensions holiday, in which reform has been eternally delayed to some future-Congress, which coincidentally makes it harder to reform as more people become dependant on it.

Orly?

[Lemur]

Ponzi scheme, at the point of a gun.
I object to the "at the point of the gun" bit of rhetoric. All laws are guaranteed, ultimately, by the threat of force. So I'm more than a little over the "guvmint forcing me" bit of tub-thumping.

You can't jaywalk ... at the point of a gun!

Meat gets inspected at packing plants ... at the point of a gun!

Show your ID at the airport .. at the point of a gun!

Etc.

[Sasaki Kojiro]

Well maybe, but why should I have a moral obligation to an old man who wasted his money on whiskey and whores instead of saving?

wasted? :stare:


I object to the "at the point of the gun" bit of rhetoric. All laws are guaranteed, ultimately, by the threat of force. So I'm more than a little over the "guvmint forcing me" bit of tub-thumping.

Ponzi schemes usually aren't "at the point of a gun" though.

[drone]

Ponzi schemes usually aren't "at the point of a gun" though.

:yes:

Edit-> I don't think I would really be too pissed off about FICA if they would drop the charade and just call it an employment tax. Dangling the false carrot about funding my retirement is just too far. I have never had any illusions about Social Security's financial future, I've been pumping the maximum allowable amount into my 401k for almost 20 years. If I get a little beer money from the federal government at 65, I will be surprised.

[m52nickerson]

Yes, I do mean that. I did a little bit of research after the crash, and found that the stock market right after the crash was high enough that if you had been investing for 30 years, you'd still have made more money than from social security.


2005 was not 30 years ago.

[m52nickerson]

You mean the stock market that's already bounced back despite a still soft economy? What a lousy track record (http://stockcharts.com/charts/historical/djia1900.html), huh? No matter how bad my 401k performs, it's still going to pay out infinitely more returns than what Social Security is projected to pay. :yes:

Bounced back to around 2005 levels, so no net gain. Unless people pulled their money out like many did and then they still lost out. That is the point of SS. No matter what the market does, or how well, or poor and person handles their money it is a little bit of a saftey net.

[Xiahou]

Bounced back to around 2005 levels, so no net gain. Unless people pulled their money out like many did and then they still lost out. That is the point of SS. No matter what the market does, or how well, or poor and person handles their money it is a little bit of a saftey net.So, you're saying that if a person contributed to a private, market-based Social Security plan for the 30-40 years of their working life, there would be no net gain because of a couple years of losses? I think you need to go look at that chart again. :yes:

[KukriKhan]

Sounds as if something like super (http://en.wikipedia.org/wiki/Superannuation_in_Australia) would be helpful.

It's certainly something worth looking at. Thanks for the link.


Remind me again why we're giving a pay out to people simply becuase there hearts are still beating?

Because those people paid into the system, same as you and I.

[Xiahou]

Because those people paid into the system, same as you and I.People who paid into the system are going to get screwed over one way or the other- it's unavoidable. The only question is: who and how badly?

[KukriKhan]

And when(?).

[HoreTore]

Well maybe, but why should I have a moral obligation to an old man who wasted his money on whiskey and whores instead of saving?

Yes, poor people have only themselves to blame for their situation.

Try to be a little lees stereotypical... And doing this through taxes does ensure that everyone does save money for retirement, ya know.

[Centurion1]

Yes, poor people have only themselves to blame for their situation.

Try to be a little lees stereotypical... And doing this through taxes does ensure that everyone does save money for retirement, ya know.

Why don't they have (wait here it comes, a GOP buzzword) a little personal responsibility. Though it may be code for hating poor people it still stands.

What seems to be slipping people's minds is that social security IS going to fail. what needs to be done is it has to be either scrapped or phased out so it isnt a shock when it actually happens.

[a completely inoffensive name]

What seems to be slipping people's minds is that social security IS going to fail.

That is opinion based upon your own bias that government cant handle anything, therefor anything broken will become irreparable. I'm getting tired of modern day conservatives spouting their talking points as facts.

Obama is a socialist/communist/fascist, that is fact based upon the polices he has implemented.
Free market is always better then the government, that is fact based upon history (as long as you forget police, firemen,..etc). I'm getting tired of an intelligent discussion coming back down to right wing talking points regurgitated over and over again. I have little patience for someone who insinuates that our lovable leftist HoreTore could in anyway not be fervent in free speech because of what those "bad" progressives are doing. That's compensating for bad logic and reasoning by insulting a person's (created strawman) ideology in general and applying it to an individual to disarm/discredit him and get cheap debate advantages.

Why I bother with the backroom....

[Strike For The South]

Because those people paid into the system, same as you and I.

Ok but what happens when your saftey net ensares more people than it helps, If it's clear SS is becoming dead weight why not reform it

[a completely inoffensive name]

If it's clear SS is becoming dead weight why not reform it

Because obviously government cant do anything, so when there is a problem we need to scrap it completely.

[HoreTore]

Why don't they have (wait here it comes, a GOP buzzword) a little personal responsibility.

An easy thing to say for the middle class.

Not that easy to say when your single mom was a junkie and you're still mentally unstable because you got raped by three 40-year olds at age 9.

[drone]

Because obviously government cant do anything, so when there is a problem we need to scrap it completely.

Where will Congress find a) their balls, and b) $2.5 trillion? Both are going to be needed to fix Social Security.

[Subotan]

Easy.

SOAK THE RICH

[HoreTore]

Where will Congress find a) their balls, and b) $2.5 trillion? Both are going to be needed to fix Social Security.

I believe there are two retarded wars going on - ending them would free up a lot of cash. There's also a bloated defense budget on the loose, more than ready for some of those deep cuts previously reserved for poor people.


Easy.

SOAK THE RICH

That never helped anyone. The only reason we need the rich to pay their taxes is to keep the tax-morale high.

[drone]

I believe there are two retarded wars going on - ending them would free up a lot of cash. There's also a bloated defense budget on the loose, more than ready for some of those deep cuts previously reserved for poor people.

Ah, but what about the first requirement?

[Centurion1]

I believe there are two retarded wars going on - ending them would free up a lot of cash. There's also a bloated defense budget on the loose, more than ready for some of those deep cuts previously reserved for poor people.

not enough. and i would rather have a strong military than social security.


An easy thing to say for the middle class.

Not that easy to say when your single mom was a junkie and you're still mentally unstable because you got raped by three 40-year olds at age 9.

yeah real common place example, the single mother was enough. what did you just watch Precious.



That is opinion based upon your own bias that government cant handle anything, therefor anything broken will become irreparable. I'm getting tired of modern day conservatives spouting their talking points as facts.


That is My opinion based on numbers that it is nigh on impossible to even reform without making people completely pissed off and impossible to sustain for much longer at this rate.

[Subotan]

not enough. and i would rather have a strong military than social security..
What's the point of defending poverty?


That is My opinion based on numbers that it is nigh on impossible to even reform without making people completely pissed off and impossible to sustain for much longer at this rate.
That is the total opposite of what you said earlier:


im sure many middle aged americans would (forego SS).

[Centurion1]

That is the total opposite of what you said earlier:

Im talking about older people already in the program or about to enter it. Do you know how powerful AARP is in America. Thats the problem until a pres or someone powerful says i dont care about reelection this needs to be fixed and all of congress and senate agree with him there is no fixing it. so you go find me a representative democracy that has those kinds of balls.