Social Security: I have a problem

[creativelcro]

I just don't get it. Everybody keeps saying the system is gonna be broke in 202x. So, is it ethical to ask people to pay a ton of taxes for social security ? How can the government ask citizens in their 30s or 40s to pay social security taxes while at the same time telling these people they will not benefit from it themselves... It is unethical, it's theft... -CV

[Mentalist]

1. SS is a ponzi scheme

and I am in the minority here as I support privatizing SS.

[creativelcro]

2. it obviously is

with people coming in last getting screwed...

[papau]

35. Social Security solid to 2043 per Actuaries, Medicare to 2025

provided that Bush is ready to increase FIT taxes on the rich so as to raise real money to give the SS amd Medicare funds in return for cashing inthose bonds Bush gave the system when he stole the payroll tax surplus to finance his tax cuts for the rich.

The payback begins around 2010 for Medicare - and 2017 for Social Security - but at 2010 Bush wants to increase deficit by another $4 trillion by making tax cuts permanent!

Social Security and Medicare are not a problem - Bush will destroy either our economy, or our defense since the only way to pay off those bonds without a tax increase and without a huge deficit is to cut Defense (56% of current discretionary spending is Defense).

As to rate of return concept - it just does not apply - the system is actuarially in balance as an inter generational transfer that goes on forever. The GOP insisted on this approach back in the early 40's since the other approach of asset build up and rate of return type system meant a lot of assets running through the government - and that was SOCIALISM BY THE BACK DOOR!

Current retirees recieve the cash deducted from this years workers checks as payroll tax. Divert some to individual accounts - and you must cut benefits to balance to the smaller tax collected and available for making payments to retirees - or borrow even more money - blow up the National Debt - so as to continue to pay benefits.

When Clinton left office there was a good chance that SS was solid forever at current tax rates and retirement age. Now under Bush economics, in 2043 it is likely that the Reagan Social Security "Normal retirement age" of 67 (Reagan raised it from 65 in stages - a person born in 43 retires at a "normal" age of 66 in the year 2009) will need to be raised to 70 for retirees in 2044 and later (so you get less at age 62 "early retirement" - cutting the cost of the system).

[NashVegas]

3. And the Stock Market ISN'T?

get real.

[Mentalist]

No

the stock market is not a Ponzi scheme.

[creativelcro]

8. Well, some of it is a Ponzi scheme

probably not the entire market, but definitely some stocks that tanked were essentially Ponzi schemes... But with the major structural problems that keep coming up, the stock market may not be that good a solution either... some combo perhaps...

[Lars39]

32. The stock market is prone to gross manipulation.

Social Security is a safety net that should not be unraveled just because thieves want to make a few more bucks.

[Vitruvius]

41. Every stock market boom is a Ponzi scheme -- and the last to buy

into the bubble get left holding the bag -- same as any other Ponzi scheme. And, as 'Lars39' just pointed out, these bubbles are often inflated & manipulated by Ponzi-type con-artists.

And stock values are still unrealistically high; present P/Es are historically unsustainable.

And guess what. The Bu$h* & co. con-men want to put your Social Security money into the stock market -- to prop it up while their rich friends and rich CEO campaign contributors dump their stock (as they are doing already during the current short-term rally).

Funny how Rethugs never talk about putting Social Security into the stock market during the early stages of a boom. Instead, they wait till the air is leaking out of the bubble & they and their Ken Lay type friends want to sell...

Incidentally, in 1928 -1929, many Rethugs were pushing for workers retirement accounts -- to be invested in the stock market. The Crash of '29 put an end to that nonsense -- and the Democrats created Social Security.

[creativelcro]

5. Who said that it has to be the stock market ?

besides, you have not responded to the questions above... It would be ethical to go on a tax strike over this... If they tell me there won't be any money when I retire, then I want to put that money in the bank or invest it, not throw it out the window...

[FlaGranny]

46. Throwing it out the window?

I thought it was going to your parents Social Security or maybe grandparents?

The trouble is, the Social Security fund should be inviolate, but the Republicans have looted it, just like they're looting everything else. They are looters and that's why the fund might go broke.

[Mentalist]

51. both parties

have been spending the SS money like drunken saliors ever since the revenue was put into the general fund.

[leftyandproud]

11. I don't think it is..

it may be overvalued, but it isn't a pyramid scheme

[olacan]

6. You

are not alone I would like to see a voluntary way of putting part of the SS Tax in into the private sector.

[WhoCountsTheVotes]

13. Yes, let's trust the Mutual Fund Scammers with Social Security

They'll be SO much better than the politicians, right? Off hour trading with SS, and massive derivitive losses, what fun.

Social Security is an insurance plan as well as a retirement plan. All we need to do is remove the cap.

[Mentalist]

15. No requirement

to put the money in the stock market or in mutual funds. You can put it all in bonds if you want. Or you can direct it all into a savings account. Not a penny would have to be in the stock market.

[WhoCountsTheVotes]

34. I said mutual funds, not stock funds

The point is you want to turn over people's Social Security to companies that have more interest in taking fees than they do growing the portfolio for the customer.

Privatizing Social Security strictly means funnelling SS tax into Wall Street. No thanks, Social Security works great, all we need to do is remove the cap (and get the deficit down).

[Mentalist]

37. Not at all

The point is you want to turn over people's Social Security to companies that have more interest in taking fees than they do growing the portfolio for the customer.

No, I want people to own and control their SS money and direct it as they see fit.

There seems to be a strong underlying belief held by many of those opposed to SS privatization that "the people can not be trusted with their money."

[WhoCountsTheVotes]

47. Morgan Stanley

Can we trust them?

[Yupster]

43. Most mutual fund are stock funds

A fund like Fidelity Magellan may have 150-200 stocks inside of it.

A mutual fund doesn't have to be a stock fund, but most are.

You could have a bond mutual fund or even a money market mutual fund, but most mutual funds are stock funds.

[WhoCountsTheVotes]

48. exactly my point

I don't want to turn over Social Security to Wall Street, whether it's stocks or bonds or whatever new instrument they are pushing. Saying "we won't have to invest any of it in the stock market" it true, but purposefully misleading.

Private investment accounts are the *opposite* of Social Security, and we don't want it.

[Yupster]

52. You could just put your share

in a money market account, or an insurance company fixed account. You don't have to have anything to do with Wall Street if you don't want to.

[WhoCountsTheVotes]

61. money market account, same problem

right now they are already having problem just guarenteeing one for one, and we have the exactly same problem of off hour trading, fraudulent research, and the rest of it.

And of course by "Wall Street" I mean the for-profit investment industry, in general.

[Mentalist]

62. You could

put all of your SS money into tax free muni bonds if you like. I am sure you will find something evil about these that will rob people and leave them dying in the streets though.

[WhoCountsTheVotes]

71. no, that was your first real suggestion

That actually addressed the concerns I had - thanks,

[Mentalist]

63. Do you have a 401(k) or IRA

Do you have a 401(k) or IRA? If not, why not, and if so why? Aren't those evil wall streeters just stealing your money?

[Lydia Leftcoast]

67. I do have a 401(k), which was required

under my last employer's system, but it has lost 1/3 of its value since I left that job in 1993, so I'm REAL glad that I'm not ready to retire.

[Mentalist]

70. Something is wrong

I am not aware of any way that an employer can FORCE you to open a 401(k).

[WhoCountsTheVotes]

74. see how they dodge?

It's either your bosses' 401k, which you have almost no control over, or NOTHING. Some choice there, huh?

I asked by 401k administrator about the fees - how much am I paying in fees? Their response? "Don't worry about it, you won't even notice the fees, it's taken out ahead of time so you don't have to worry."

No I'm not kidding. These people are barely a step above common scam artists, and if you had been reading the front page of the WSJ in the last six months, you'd know it.

[Lydia Leftcoast]

79. You really do like to read things into posts that aren't there

and ignore things that are there.

I didn't say FORCED. I could have opted out if I wanted to, I'm sure.

It was a college that participates in TIAA-CREF. It seemed like a good deal at the time.

[Yupster]

84. You should have just saved on your own

if you were not comfortable with the plan. You shouldn't ever invest in anything you're not comfortable with.

Also, the broker is Required to go through the fees and charges with you until he's sure you understand them. You probably signed something saying they were gone over and you understood them. If he didn't do that, please report him. His company wants to know about it so they don't end up getting into trouble.

Every company is requiring more and more documentation from their brokers proving that they have explained the fees and charges.

[WhoCountsTheVotes]

89. report them - ha ha ha

with all the CRIME and FRAUD in the mutual fund industry right now, is anyone going to care that they dissemble about their fees?

I'm sure the new laws and reforms will allow us to trust them, until they rip us off again.

[Lydia Leftcoast]

90. Another person who doesn't read posts before responding

I said that TIAA-CREF seemed like a good idea at the time. I was not uncomfortable with it when I signed up for it.

It's only since I left academia (1n1993) that the stock market has tanked. The loss of value in my 401(k) is hardly a unique story. Considering the experiences of some other people, I feel fortunate to have anythying at all.

[Yupster]

92. Well, you've probably regained

about half your loss this year. Hopefully the other half will come back next year. Even if that happened, you'd only be even after five years, but it's probably the best we can hope for.

[Malva Zebrina]

96. Bravo

and for those awful old folks who keep STEALING it from the younger folks--put em out on the ice.

A society is broken when it loses it's ability to include all members of that society in it's benefits. It is broken because it has become without concern--it's concerns being mostly "me". Someone compared the SS program to the infrastructure of our country--look upon that concern for others that is written into our laws, as you would look upon the concern for building and repairting bridges, roads and other things we all pay into, regardless if we ever use a bridge in our entire lives, or travel on the road that has received extensive repairs. Looking out for oneself may offer some satisfaction--however if it takes from someone else, I think eventually the satisfaction will become short lived and shallow.

I suppose I could go over the line very easily into socialism.-not quite there yet. I am willing to pay taxes that pay for the education of children, even though I have not a single child or grandchild in the system. I have paid into that system for many many years and never thought to buck that concept or take my money out of it because I , personally, was not getting anything out of it- I see it as a strength of a country and so gladly invest in the education of the children--I see no reason to demand I get my money back so I can invest it as my own--and the same goes for the rest of the infrastructure. I see SS as infrastructure--moral infrastructure that builds the strength of a country

and I see the reasoning that people should get back their own money, or have their own money to invest the way they choose, rather than pay into the current SS, because they fear no return and they perceive themselves paying for someone else. Those persons also paid for someone else, BTW.

[Mentalist]

14. I know I am not alone

but we are in a distinct minority here.

[La_Serpiente]

4. They will tax

the top five percent who own 60 percent of the weatlh in America.

[creativelcro]

7. yeah, right, that happens all the time...

[ElsewheresDaughter]

9. i have read and heard the experts say, "SS is solvent thru 2040......

even if nothing is done"....

[OneBlueSky]

10. Social Security is broke now . . .

nothing in that lockbox but worthless IOUs . . .

[WhoCountsTheVotes]

17. Are US Dollars "worthless IOUs"?

There is nothing wrong with Social Security that removing the cap and reducing the deficit won't fix. There is no lockbox, there are no "worthless IOUs" - what there is are thousands of Wall Street corporations, brokers, traders, and scam artists licking their chops to have Social Security turned over to them so they can profit from it.

[JanMichael]

12. It's ridiculous to not expect that we'll adapt in the future.

Also projections are notoriously innaccurate, I wouldn't bet too much on them.

Adapt? Yes. Privatise? No.

Some things should not be profit motivated.

As to this: "How can the government ask citizens in their 30s or 40s to pay social security taxes while at the same time telling these people they will not benefit from it themselves... It is unethical, it's theft"

Um...You're making an absolute statement on an unknown outcome, please, how ethical is that?

[leftyandproud]

18. "adapt"?

How exactly are we going to adapt? I ant a decent return on the money I'm putting in. I figure it should get AT LEAST the rate of inflation plus 1-2% interest. Though at the rate things are going, we are either going to face a 50% drop in benefits for retireees or a 30% FICA tax on our kids.

[Yupster]

25. In the past,

eac h time we needed to "adapt," we've raised the payroll tax. Well it's at 15 % now. I don't think we can adapt that way many more times.

The fact is that as long as people live longer, and have fewer kids, social security will get in bigger and bigger trouble. It's just simple demographics.

So what are you people reading this for. Go out there and have some kids.

[JanMichael]

26. What is DK's position on this?

Oh wait, why not just check his site?

http://www.kucinich.us/issues/socialsecurity.php

[Yupster]

31. So Kucinich's Plan is to

lower the retirement age???

[creativelcro]

20. The actual outcome may be unknown

but that is exactly the point: It is a FACT I'm paying social security, a lot of it. So, there should be a legal contract guaranteeing that I will be able to get social security when I retire. The uncertainty is what makes this all thing unethical. -CV

[Beaker]

16. Your problem is a lack of facts.

when has the government told you that you will not benefit from Social Security??

[gratuitous]

24. Nicely put

There are any number of factions who've been trying to scare folks for years about their social security benefits. But with the incredibly low administrative costs, Social Security is probably the most successful government program ever devised, and has saved millions of people from living out their lives in abject poverty.

This is, of course, anathema to that segment of the population that wants to see old folks competing their entire lives with young folks for those minimum wage and part-time jobs that are so essential to their personal fortunes. Secure people don't scare so easily, and people with a dependable income stream aren't as likely to be stampeded by this week's demagoguery.

But put that money into people's hands, and you draw out the snakes and the vermin who will cheat them out of it. Whether it's scare tactics ("Have you saved enough? Are you earning a high enough rate of return?") or just old-fashioned bullying and thuggery, there is an element in our society that stands slavering, licking its chops like a hungry wolf contemplating a meadow full of sheep, ready to plunder and cheat folks. Ordinarily I'm against the death penalty, but these succubi sorely test my resolve.

[Mentalist]

30. Same could be said

about privatization.

Secure people don't scare so easily, and people with a dependable income stream aren't as likely to be stampeded by this week's demagoguery.

If people had SS retirement accounts that they OWNED, similar to 401(k)s and IRAs, politicians couldn't scare them and try to get their vote by using scare tactics like "my opponent wants to take away your SS and kick you into the street."

[gratuitous]

45. Would you mind terribly putting me on "ignore"?

I wasn't talking to you, and you fail to support your statements. Please take it somewhere else.

[Mentalist]

57. fail to support my statements?

I basically said the exact same thing you said. Are you suggesting that such scare tactics are not widly used in campaigns?

And where is the rule that one can only respond or post to a poster that has posted to me to begin with?

[Beaker]

50. you didn't answer MY question-

when has the government told you that you would recieve no benefit from Social Security?

[Mentalist]

55. Wrong poster

I never said such a thing or claimed that SS will not be paying benefits in the near or distant future.

In fact, the post I am replying to is your only post to me.

[Maine Mary]

19. I have no problem w/SS itself

However I think SS payments should end once people have exhausted what they have paid in. And beleive me, anyone who lives beyond 7 years of retirement eventually will exhaust them...

Before everyone jumps all over me, PLEASE read the rest... IMO there should be some sort of means testing when a person's SS contributions are exhausted. For the many millions of elderly Americans who need the type of finaincial assistance SS provides, that (SS) or some other form of assistance should continue uninterrupted (and possibly increase based on need).

But for anyone who can afford their own retirement (after they get back all of the SS they have paid in), I don't think they should continue to receive money they have not earned. I'm thinking ONLY in terms of the wealthiest seniors here.

[Chef]

54. SS

It could possibly work the way you propose. You need to forget about the complicated step of pay back what you paid in. What you have is a pension plan funded by general revenue and means tested. The RW will call it welfare. The only fear would be is some whack job president thought the rich were being soaked to pay for it and cut the legs out from under it. You also need to make sure that the govt can't borrow from future contributions to fund shortfalls in revenue.

[FlaGranny]

58. So much to consider.

I have two sons. One has an excellent job making $100,000 a year. He has paid into a retirement fund and was smart enough not to invest in high-tech stocks, so only lost about 25% of his fund. He probably has close to 1-1/2 million in his fund. He probably could live well without social security when he retires, which will be in another 20-25 years or so. BUT, if he has a catastrophic illness, all bets are off.

The younger son married out of college and has three kids and makes about $60,000 a year with a non-working wife. He has nowhere near what his brother has and struggles from month to month to pay his bills. His retirement fund is small. He has three kids to send to college. He won't be free of obligations and debts until he is in his 50's - IF he's lucky.

I am in the same situation as my married son. I've spent my entire life just making ends meet, helping my boys through college (still paying on college loans for the married one). Ordinary living has taken all our income. We have no savings. We have never had luxuries. We buy Chevies or Fords when we need a car, usually used. We have lived in lower priced homes. We've taken 4 vacations in 35 years of marriage. We have paid taxes and worked all our lives, but never made a lot because we have no degrees. My husband served in the Army. We are average, VERY average Americans.

I believe that one of the major problems with Social Security lies in the fact that the money collected was never invested wisely. Do I remember correctly that the return is around 2%? All that Social Security money should have been invested in a very safe, but higher return fund that would return perhaps 2 or 3% more. And most importantly, it should NEVER, EVER be touched for anything else.

[Yupster]

78. Most of it is not invested at all

When your social security premium is withheld from your check, it is quickly sent to my mother, or some other retired person. The money is not invested at all. It is a pay as you go program.

Your retirement will be paid for by your kids' withheld premiums.

This works fine except people are living longer in retirement therefore requiring more checks, and people have had fewer kids, therefore having fewer workers to pay the premiums in.


Footnote *** I know that since the 80's surplus money is being collected and is being invested in ES Govt bonds, but that's a whole different story, and I thought it would just complicate the answer unnecessarily.

[Malva Zebrina]

97. sounds good

however you fail to take into consideration that not all recipients worked full time from the time they were twenty. Women, as a matter of fact, did NOT work nor were they expected to--the husband was expected to support his wife and the family. Their expected job was to stay at home and raise the family, keep the home running smoothly, and to bear children. So many of them did this admirably. Whatever we may think of that now, there are great numbers of women who were in this situtation because it was the way it was. They are amongst the poorest of the SS recipients through no fault of their own. So the notion that one should exhaust what they have "put into" it,is not fair. Everybody put into it. Whether one garnered a fortune over a liftime or not--therefore everyone, according the law, gets it back--there is no line to be drawn, refusing to give it back to someone because, well because they just got too successful. That is as unfair as eliminating the women who did not work all of their lives.

One solution, and it may be frivolous and arrogant of me to suggest this , is to go back to children caring for their parents as they age. We do not do that in this fast moving, upwardly mobile society, yet there are a lot of traditions and cultures that still keep that extended family notion who do not seem to be suffering because of it.

[Yupster]

21. My reform plan

Two things which have to be done together to work.

1. Take off the income cap and the benefit cap. This will anger Republicans but would bring in tremendously more money. The end of the benefit cap is for fairness sake, but since the benefit formula is so progressive, it would cost little compared to the amount of money which would be brought in.

2. Bring the people allowed to be outside of social security back into the system. This is mostly schoolteachers and professors. This simple change would also bring huge amounts of new money into the system. Democrats would be against this as it would upset the teachers' unions.

I think a reform plan where both parties would have to give a little would work. These two changes alone would mean tremendous amounts of dollars to the system.

[Mentalist]

22. I would like

to be able to opt out of SS and never pay another penny in SS taxes and never receive a single penny in SS benefits. And I would gladly forgoe the thousands and thousands of dollars I have already paid into SS.

[Yupster]

28. Become a professor in Texas

and opt for the ORP (Optional Retirement Plan). Professors here are able to invest their entire social security deduction with the college's half too in direct investments like mutual funds. They already have privatized their social security.

If you don't want to do this you could instead choose the TRS, a pension plan for teachers which is far more generous than social security.

There are some colleges that have the TRS/ORP choice AND social security, but they are the minority.

[creativelcro]

23. how are professors outside social security ?

They still pay FICA ...

[Mentalist]

27. Not all

up until 1983 (i think that was the year the option ended), in some government employment sectors employees were allowed to opt out of SS and go into privatized plans.

[Yupster]

36. Some do, some don't

My local college, like my local school district opted out of social security 20 something years ago when you could do that. Almost every school district in Texas opted out of social security back then. There are still a few that are in.

They do have to pay the 3 % medicare though.

[Mentalist]

39. County and municipal

employees were also eligible for the opt out and many took great advantage of it.

[Yupster]

53. Let's put them back in the system too

Irony can be so ironic.

I bet the state and county workers union is completely against letting people out of social security after they got out themselves.

It's like immigrants wanting to shut off immigration once they got in.

[WhoCountsTheVotes]

38. remove income cap, keep the benefit cap

Means testing is important too of course.

[FlaGranny]

66. You do realize you are advocating higher taxes on the rich,

don't you? We don't tax no people who can afford it, don't you know anything? Don't you know they earned their money? The rest of us folks just sat around on our duffs all our lives. We don't deserve nottin. Right? <sarcasm, of course>

[WhoCountsTheVotes]

95. yes, ma'am I do - tax the rich

I 100% support higher taxes on the rich.

[Chef]

29. SS

The money you pay now is a tax that supports retires today. It is not a savings plan for you that you should expect to withdraw at your retirement. There are many other retirement plans that allow you do invest in anything you want. If you thought you were supposed to get some return on your money like it was one of these other plans, you need to consider that after you retire you will draw out all of your "contributions" to the plan in less than three years. The length of your life after retirement will dictate your "return". If you were allowed to opt out of SS, how would you pay for the retirement of those in the system? General revenue, or perhaps a tax on your earnings in your account? If you allow people to opt out, the you have created a self fulfilling failure.

I can only think of all the seniors I work with who have annual incomes of only SS that amount to $8,000 to $12,000 per year. If you are willing make a social contract to be taxed by general revenue to support these folks, lets hear it.

[madfloridian]

33. My post showing the Heritage/Cato influence.....planned for years.

Media goes along. Just like they have for Medicare.
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=773884

Just something to think about and a good research topic if anyone cares.

[Lydia Leftcoast]

40. It's not theft, you are

supporting the people who worked hard all their lives, often at heavy manual labor, and built the country that you now live in.

If that's "theft," then you are perhaps posting on the wrong board.

I don't have time to demonstrate the math, but the partial privatization schemes that have been proposed would be 1) more risky than SS, 2) would entail huge extra administrative costs, no matter which option was chosen, 3) would complicate matters tremendously, 4) would be a windfall for Wall Street firms that already have more money than God, and 4) would benefit the rich more than the poor.

Just a simple example. A person earning $7.00 an hour earns $13,400 a year. Such a person pays $1008 a year in FICA.

Say the worker starts at age 18 and invests his/her FICA payment for 47 years. Assuming 6% interest, which may be higher or lower depending on how the economy is doing, the workers has a cumulative yield of slightly less than $300,000 at 65 IF there are no stock market crashes and IF the brokers don't defraud the customer. Now if the worker decides to leave the principle untouched and just lives off the interest, assuming 6% interest, or more or MUCH LESS if the economy is bad (interest rates in Japan are scraping the bottom), the worker gets a pension of $18,000 a year, not exactly a princely sum, considering that that's now the ONLY income. If the worker decides to take a lump sum, s/he runs the risk of outliving his/her retirement income, especially since there are no cost-of-living increases.

(And yes, I realize that the worker will not be earning $7.00 for 47 years, but using these figures for convenience to illustrate the situation of someone who is on the bottom of the economic ladder. The assumption that while the actual annual investment would go up, so would the cost of living.)

But the SS privatization schemes don't actually work like that. They try to sugarcoat it by saying that only a portion of the FICA payment (2%-3%) will be invested. Well, whoopee, 3% of $1008 is $30.24. After 47 years, the worker would have about $8800, assuming that s/he could find someone who was willing to start a brokerage account with $30.24.

How is that a good deal?

The SS "crisis" could be solved by taking away the ceiling on FICA assessments, but the Republicans don't want you to know that. They'd rather scare young workers by offering them the false choice of utter destitution or enjoying a stock-market-funded retirement on a Caribbean yacht.

Don't fall for it.

[Yupster]

49. There's good and bad to it

I would maybe support a very small percentage. Maybe 2 % of the 15 % payroll tax.

It would work to some group's advantage and be to the disadvantage of other groups.

Currently African-American men get ripped off the worst by the curent system.

They work the longest hours of any group, starting working earlier and retiring later than average. Also most likely to have two jobs. Then they are the most likely group to die before ever getting a penny from social security, basically throwing away all the money they put in.

Anglo-women on the other hand are the group that is benefitted the most by the current system. They work on average much fewer hours, and live much longer than average drawing their check.

So, it might be to the advantage of the average African-American man to privatize his account, but not to the advantage of the average Anglo-woman.

[Lydia Leftcoast]

56. Please reread my post above

and then tell me how investing a small percentage of the current FICA payments of low-income workers would be a good idea.

Oh, and how would we fund current retirees if the contributions from current workers were reduced?

That's the one that the Repiggies like to mumble about.

All you privatization advocates are mixing apples and oranges.

SS is a funds transfer, not a savings program. Because of inflation, most people get back their entire lifetime contribution within a few years.

Even the low-wage black men Yupster is so concerned about get their entire contribution back within five years.

Dont' fall for one of the RW's favorite propaganda tactics: proposing something that benefits the rich and powerful and claiming to do it for the sake of the poorl They do this so often that I'm thinking of writing a DU essay about it.

[Mentalist]

59. How would

tell me how investing a small percentage of the current FICA payments of low-income workers would be a good idea.

How would allowing "low income workers" to invest and control a small portion of their FICA taxes be a bad idea?

It would be a good idea because it would give these people a real asset that they own and control that the government could take and spend on other stuff. Plus it would allow them to generate some wealth accumulation, that if god forbid they died before retirement age they could leave to their survivors.

[FlaGranny]

60. $8800 dollars?

Wow! I'm sure survivors would be thrilled. Gee and they would get to "manage" a whole $8800? They sure should feel secure about that. See Lydia's post above.

[Mentalist]

65. Where did you get the

$8,800 number?

And lets assume a working life of 40 years. To accumulate $8,800 one has to assume that only $220 average value addition per year. That is a number so low as to not be approaching the realm of reality.

[Lydia Leftcoast]

68. That's what you'd get

investing 2% of the FICA assessment of a low-wage worker.

See?: You didn't read through the numbers in my post.

[Mentalist]

73. Also

your numbers exclude the employers contribution. Further showing your numbers are wildly wrong.

[Lydia Leftcoast]

64. You didn't actually go through the numbers, did you?

Then you might run the risk of being confused by facts.

[Mentalist]

69. You even admit your numbers are wrong

Your numbers are based on a $7 an hour job for the entire working life of the person and you readily admit that this is not reality.

[Lydia Leftcoast]

77. But I'm assuming that only because

you can't predict what inflation will be 40 years from now.

I'm assuming that the person stays in low-wage jobs (as many do) and that even as the lowest wages rise, the cost of living rises as well.

In other words, these are the only numbers I can work with. Even if the minimum wage is $50/hour in 40 years, that will mean nothing if it costs $50 to buy lunch at a typical family restaurant.

[Yupster]

80. No they don't

"Even the low-wage black men Yupster is so concerned about get their entire contribution back within five years."

Not if they die at age 61. Then they get --- what's the death benefit? $ 255?? That's what they get for a lifetime's worth of contributions.

[Lydia Leftcoast]

85. What, and other people never die young?

And no black men live past 61?

Let's face it, anybody who dies young will not see a return on their FICA payments, but at least they will have the satisfaction of knowing that they are keeping today's seniors alive.

Working in the finance industry, you may be spending too much time reading the editorial page of the WSJ.

[Yupster]

93. The fact that African-American men

statistically die younger than Anglo-American women does not mean that no African-American man has ever lived past age 61, or no Anglo-American woman has ever died before age 61. Sorry if I was confusing. I didn't think I was.

[FlaGranny]

72. Even if a person manages to put away

a million or two million dollars, that could all be wiped out with ONE hospitalization (without Medicare or insurance). And, without Medicare, expect to pay at several thousand dollars a month for private health insurance per person, if this all comes to pass the way the Republicans want it do. Several thousand a month for insurance would completely wipe out the entire monthly payout from your retirement fund. Your couple of million retirement fund could be not enough to live on.

[Lydia Leftcoast]

83. Yes, everyone who thinks that Medicare should be privatized

needs to look at the prices private insurers charge people over 65 who are ineligible (recent immigrants, perhaps?).

[Yupster]

94. I think there's a consensus gathering

that Universal Health Insurance is the only way to go. I expect we'll have it within 10 years or so.

[FlaGranny]

98. Yes, it is well over $1000 a month now if over 60 or so.

My insurance, through my employee (a PPO), has DOUBLED in the past three years. Double that $1000 in 3 years, double it again in another 3 years, and we've got a minumum of $4000 a month. Doubling every three years is not a stretch of the imagination. Not only that, but those costs do not include deductibles and copays. Not a good situation. I can invision this privatization easily costing retirees well more than half their income (which income, itself, is certainly not guaranteed).

I think what the Republicans are really after is that once you turn retirement age you should be completely ignored, because the newest sickening talking point is that older folks are a drain on the country they created. Many Republicans feel we deserve nothing. They would even begrudge us the amount we already paid in if they could get away with it. G.W. and his friends need it more than we do anyway. They have governments to disrupt and people to kill and profits to be made.

[pansypoo53219]

42. i am not worried as there is a baby boom

from the boomers squishing the gen Xers. which just means i am fucked.

all they have to do is illiminate the cap on earning that get fica. ooh, boy, then hear the rich howl.

[madfloridian]

44. Think of it as a "planned" scare, just as Medicare was a planned "scare."

Don't let them manage the issue.
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=773884

[chelaque liberal]

75. Got this in a forward today-Jim HIghtower

SOCIAL SECURITY WORKS
11/18/2003

Let me tell you a story of progressive progress.

In 1939, two-thirds of America's senior citizens lived their "golden years" in cold, hard poverty. Just a decade later, that percentage was down to half. By 1959, it was only one-third. Today, the number is less than 10 percent.

That's progress. What's progressive about it is that this decline in poverty is the result of the New Deal's passage of our nation's landmark Social Security program.

Yes, the very same program now under attack by Wall Street wolves and congressional opportunists of both parties who insist that Social Security is doomed to failure and facing an imminent financial crisis.

Horsedooties. First, this is a program that actually works, providing the modicum of income so our gray-haired citizens have a basic level of decent living when their earning years are over. Second, Social Security is a model of efficiency, requiring only a single percent in administrative costs. Compare that to the insurance corporations that suck out one-third of our healthcare dollars to pay for their corporate bureaucracies, executive salaries, marble palaces, and advertising.

But, no, cry the Chicken Littlers, Social Security is going broke! Hogwash. Without changing anything, Social Security is financially sound for the next 40 years. Name me a corporation that can claim that!

Yet, the Bushites – on behalf of Wall Street finaglers – seek to privatize this public treasure, pushing people to put their Social Security nest egg into the stock market. Hello – these are the same investment geniuses who only three year's ago would have advised you to invest in Enron – a stock that fell from $97 a share to 57 cents in only one year!

Wall Street hustlers, members of Congress, and other
"reformers" already have their own golden retirements covered. I say no one should be allowed to "reform" Social Security unless they actually need it.



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


"Connect the Dots", New York Times, April, 2, 2002.
Professor Mark Stern, School of Social Work, University of Pennsylvania






Jim Hightower
Hightower & Associates
1802 W. 6th Street
Austin, TX 78703
512-477-5588
[e-mail]

[karabekian]

76. ss is ponzi stocks arenot

SS is a ponzi scheme. People pay into it to pay the benefits of the people who are retired. It solvency is based on the continued infusions of tax revenue.

Stocks are not. While people do lose money, they are strait forward trades. You buy this stock sell this one. If it were a ponzi scheme, it would be structured so that people must continually buy new stocks to pay the dividends for people who had bought before. That is just not the case.

[madfloridian]

82. Where did this "ponzi scheme" sound byte come from??

Why am I hearing this so much at DU today?

Hmmmm...mmmm....

Could it be that they are about ready to dismantle Social Security as well, and the word about the "ponzi scheme" needs to be blasted out?

[Lydia Leftcoast]

88. Oh, I've heard it before

and it probably originated at the Heritage Foundation, the Cato Institute, or any of those other evil (yes, literally evil) "think" tanks where academic whores sit around devising new ways for the rich to oppress the poor and make the poor think they're getting a good deal.

[kentuck]

81. What a very Republican thread!

Bought into the Republican right-wing talk radio bullshit, hook, line, and sinker. We were paying FICA taxes all these years, and after Reagan raised the taxes in 1983, fo exactly this type of predicament. Yes, both Parties have spent SS fund for deficit spending but Repubs have spent 10 to 1 more than Dems. It is they that have bankrupted this system, if it broke. I say the money was stolen and they need to put it back. It was a gravy train for the wealthy who didn't have to pay higher taxes because the government was operating on the SS funds of working people.

[papau]

87. I agree - well said

:-)

But Bush raising taxes on the rich to raise funds to payoff those bonds he gave the Social Security System when he stole the payroll tax system surplus - not likely.

[gratuitous]

91. Just so, Kentuck

There's a lot of muddled thinking and uninformed nonsense on this thread. Social security is an insurance income program, not an investment program. If the cupboard is bare (which it is not), it's because the Republicans have been shoveling the surplus funds into their supporters' pockets as fast as they can.

The unanswered question, naturally, is what we do with those folks who get scammed out of their savings and investments? Do we let them starve in the street? It's certainly a solution we're trying in Oregon, but I don't recommend it for anyone with a heart or a brain, and Democrats are supposed to have both.

[papau]

86. Myth and Realities page on SS is a great reference - DU bookmark needed

The AFL/CIO has a great page on these programs

Check out the Myth and Realities page on SS - Click each number to see that issue.




http://www.aflcio.org/issuespolitics/socialsecurity/myths/

[blindpig]

99. this thread settles it

it appears to me that a lot of the differences of opinion here at DU stems from income/class. been thinkin' bout this alot lately. essay in progress