Social Security to start cashing Uncle Sam's IOUs

[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.....

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.

[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.

You mean the stock market that's already bounced back despite a still soft economy? What a lousy track record, 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.

[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.

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.

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.....

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, 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.

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.

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 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?

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.

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, 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.

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.