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How shall we fix Social Security?
Poll ended at Sat Jan 22, 2005 3:31 pm
Eliminate it immediately, it's socialistic. 11%  11%  [ 1 ]
Get rid of it gradually, let people take responsibility for their own lives 22%  22%  [ 2 ]
There isn't any need for a severe solution, just adust tax levels to compemsate. 44%  44%  [ 4 ]
Do cutbacks on benefits for wealthy retirees. 11%  11%  [ 1 ]
Do major cutbacks on benefits for wealthy retirees. 11%  11%  [ 1 ]
Do major cutbacks on benefits for all retirees. 0%  0%  [ 0 ]
Divert a small amount of SS tax revenue to private accounts. 0%  0%  [ 0 ]
Divert 2/3rds of SS tax revenues to private accounts. 0%  0%  [ 0 ]
It's hopeless, nothing currently on the table will work. 0%  0%  [ 0 ]
Other solutions (please detail). 0%  0%  [ 0 ]
Total votes : 9
Author Message
PostPosted: Wed Jan 12, 2005 3:31 pm 
Per resolving issues in Social Security, I hold with the CBO report and Paul Krugman's analysis: there is no urgent problem and the projected shortfall (maybe 20% short four decades in the future) can be made up easily by holding the line on tax cuts or taking back a half-point of them somewhere.

What are the other positions, and what is their justification?


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PostPosted: Wed Jan 12, 2005 4:20 pm 
By saying that secial security privatization "encourages an ownership society", Bush really means it allows his buddies to own your retirement money.


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PostPosted: Wed Jan 12, 2005 5:24 pm 
I chose option one.


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PostPosted: Wed Jan 12, 2005 5:59 pm 
gwalla wrote:
By saying that secial security privatization "encourages an ownership society", Bush really means it allows his buddies to own your retirement money.

I'm thinking that Bush believes in his "ownership society," to the extent he understands what that means. However, it sounds very much like a rationalization for letting the stocks and bond industry dig into everyone else's money.


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PostPosted: Wed Jan 12, 2005 6:01 pm 
Gerald wrote:
I chose option one.

Cool. What do you think would be the consequences of closing down the system? That is a goal of a number of market conservative intellectuals.


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PostPosted: Thu Jan 13, 2005 11:33 pm 
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How about just putting the money back into it (with interest) that's been "redirected" over the years?

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PostPosted: Fri Jan 14, 2005 12:07 am 
Berken wrote:
Gerald wrote:
I chose option one.

Cool. What do you think would be the consequences of closing down the system? That is a goal of a number of market conservative intellectuals.


I'm really not concerned with the consequences. I'm not much of a consequentialist thinker. Mostly I view it as an out-of-date pyramid scheme taken to further levels than what it was intended to do or could ever hope to do, and that in an ideal world I would say put it out of its misery.

But that's never gonna happen.

Nor do I think any changes will ever happen. Not only is it ingrained at this point, any suggestion or idea to alter the system is met with hysteria. Let's take the oft-quoted privatization option. I think many people want to right it off and denounce with ever sitting down and looking at thing objectively. Nor do they encourage such enterprises, because they immediately jump to conclusions. (By the by, just for reference, IIRC Clinton in his State of the Union address in 2000 proposed something called USA accounts which was very similiar to the ideas proposed by the conservatives.)


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PostPosted: Fri Jan 14, 2005 7:13 am 
bizzybody wrote:
How about just putting the money back into it (with interest) that's been "redirected" over the years?


But where do we get the money from?


According to what I have heard the core (and unless we get more workers unsolvable) problem is that the retiree/worker ratio is going to become unsupportably large. At some point taxpayers run out of money to pay current retiree benefits.

One good thing about illegal workers using false ID to get jobs is that they pay into the SS system without being able to collect.

Could that be the real reason behind both parties allowing to borders to weaken?


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PostPosted: Fri Jan 14, 2005 8:35 am 
BBlalock wrote:
bizzybody wrote:
How about just putting the money back into it (with interest) that's been "redirected" over the years?


But where do we get the money from?


According to what I have heard the core (and unless we get more workers unsolvable) problem is that the retiree/worker ratio is going to become unsupportably large. At some point taxpayers run out of money to pay current retiree benefits.

Per the latest SS Trust Fund and the Congressional Budget Office reports, that argument became obsolete years ago. Because of growth in the economy, adjustments made under Reagan and Clinton, etc., current funding is good for the next fifty years and there is only a 20% shortfall beyond that point, which a fraction of a point adustment can correct through the next century.

I believe that population stabilization will then have eliminated the issue entirely.

In other words, per the accountants, the worker-retiree ratio issue was resolved a decade ago. In fact, per the CBO, current workers will get more benefits than the baby boomers ($13,000 vs $8500 in constant dollars).

Anyone heard a rebuttal to the the CBO report? It is quoted by people who argue that the "crisis" doesn't even exist except as a scare tactic.


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PostPosted: Fri Jan 14, 2005 11:08 am 
Gerald wrote:
I'm really not concerned with the consequences. I'm not much of a consequentialist thinker. Mostly I view it as an out-of-date pyramid scheme taken to further levels than what it was intended to do or could ever hope to do, and that in an ideal world I would say put it out of its misery.

But that's never gonna happen.

Nor do I think any changes will ever happen. Not only is it ingrained at this point, any suggestion or idea to alter the system is met with hysteria. Let's take the oft-quoted privatization option. I think many people want to right it off and denounce with ever sitting down and looking at thing objectively. Nor do they encourage such enterprises, because they immediately jump to conclusions. (By the by, just for reference, IIRC Clinton in his State of the Union address in 2000 proposed something called USA accounts which was very similiar to the ideas proposed by the conservatives.)


Conclusions about the consequences? And how would you know anything about that?


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PostPosted: Sat Jan 15, 2005 4:55 pm 
Rex Nutting of CBS Marketwatch gave this analysis of President Bush's statements on the Social Security fund going bankrupt:

Quote:
NUTTING (1/11/05): President Bush made several factual errors Tuesday about Social Security's long-term financing problems at a photo op event designed to educate the public about the retirement system.

Quote:
Bush: “As a matter of fact, by the time today's workers who are in their mid-20s begin to retire, the system will be bankrupt. So if you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now.

Per Nutting: The Social Security system cannot go "bankrupt," for it has no creditors. By law, the trustees will continue to pay reduced benefits even if the trust fund is exhausted. Payroll taxes will continue to come in and benefits will continue to be paid.

According to the trustees' intermediate economic forecast (neither doom nor boom), the trust fund will be able to pay about 73 percent of scheduled benefits in 2042 and about 68 percent of scheduled benefits in 2078.

Future presidents and Congresses could also choose to fully fund scheduled retirement benefits from general tax revenue.

I've been hearing people say for years that the system will go bankrupt, and figured the Federal Government could no more allow that to happen than they could allow the Interstate Highway System or or the National Park System fold up. I'm now told that the constitution actually forbids the government from reneging on any part of the national debt.

Quote:
Bush:"Most younger people in America think they'll never see a dime."

Per Nutting: Social Security says younger people will see a lot more than a dime. Their retirement benefits–even under a "flat-bust" system–will be significantly higher than today's benefits in real terms.

For low-income Americans, currently scheduled benefits for those who retire in 2080 are $19,906 per year in 2004 dollars. If Social Security can pay only 68 percent of those benefits, that would be $13,536 per year, compared with benefits of $8,804 for low-income retirees who retired last year.


Are there any actual stats around countering these arguments?


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PostPosted: Sat Jan 15, 2005 10:02 pm 
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The problems are with the benefit cutbacks while the cost of living rises. Even worse is that many retirees are taxed on their SS benefits.

Social Security benefit payments should be exempt from taxes because that money was taken from the people as a tax in the first place.

How much you get in benefits depends on how much you paid in while working. If you paid the minimum, you get the minimum. The retired people who have to pay back part of their SS benefits are those who paid in more than the minimum and after retiring still have other sources of income that puts them above some limit.

My opinion is that those benefits are THEIR money, not the governments money or anyone else's who didn't pay in so much. They paid it in, they earned the higher benefit!

Quote:
According to the trustees' intermediate economic forecast (neither doom nor boom), the trust fund will be able to pay about 73 percent of scheduled benefits in 2042 and about 68 percent of scheduled benefits in 2078.


That's not good enough. SS should have to pay 100% of scheduled benefits, without taking any back in benefit taxes.

If a mutual fund tried to tell its investors "Sorry, we can only pay you 73% of what you're supposed to get, and we're also charging the bigger investors a fee in order to get their money." the fund managers would be in court on trial for fraud and other financial crimes.

Social Security does have creditors, every person in the USA who gets part of their paycheck taken from them (like it or not) and put into the SS fund is a creditor. SS hasn't been paying back the full return to its creditors for quite a while.

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Fandemonium!
August 1st, 2nd, 3rd, 2014

"I am a machine. I am a weapon of war. I am a destroyer of life in the service of life, the sword and shield of my human creators." Bolo Invincibilus, Mark XXIII, Model B (Experimental) 0075-NKE "Nike".


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PostPosted: Mon Jan 17, 2005 5:56 pm 
bizzybody wrote:
If a mutual fund tried to tell its investors "Sorry, we can only pay you 73% of what you're supposed to get, and we're also charging the bigger investors a fee in order to get their money." the fund managers would be in court on trial for fraud and other financial crimes.


Ah, but social security isn't a mutual fund, it's part of the government. They can change the rules at any time and leave no recourse for the affected parties.


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PostPosted: Mon Jan 17, 2005 6:16 pm 
BBlalock wrote:
bizzybody wrote:
If a mutual fund tried to tell its investors "Sorry, we can only pay you 73% of what you're supposed to get, and we're also charging the bigger investors a fee in order to get their money." the fund managers would be in court on trial for fraud and other financial crimes.


Ah, but social security isn't a mutual fund, it's part of the government. They can change the rules at any time and leave no recourse for the affected parties.

Except they won't, of course, if liberals, moderates, or traditional conservatives regain control of the government. Whatever else they might disagree on, none of these factions could stomach pushing millions of elderly, disabled, and abandoned children into the streets to beg or starve to death. The only way the system can actually fail is if it or the government itself is deliberately destroyed by right-wing social darwinists, and that is a distinct possibility.


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