The perfect tactic for disarming Social Security defenders

[natedogg]

If you encounter someone espousing the SS status quo, just hit them with this question:

If congress passed a law allowing you to keep all of your ss contributions and invest it on your own tax-free like a 401K, would you choose to do so?

Or simply:

If Social Security is reformed will you opt for a private account or leave your money in the system?

So far, I've only gotten red-faced sputtering backpedals from SS status-quo supporters who are confronted with these questions. Go forth and change some minds, my friends. Armed with these question you can't fail to help them see the error of their ways.

/images/graemlins/smile.gif

natedogg

[cardcounter0]

What about the $155,000 that I've already pumped into the system? Do I get a refund?

[MMMMMM]

[ QUOTE ]
What about the $155,000 that I've already pumped into the system? Do I get a refund?

[/ QUOTE ]

Not you, as you would simply blow it all on Kool-Aid. Everybody else gets one though.

[cardcounter0]

In America we are free to drink as much Kool-Aid as we want.

[vulturesrow]

[ QUOTE ]
What about the $155,000 that I've already pumped into the system? Do I get a refund?

[/ QUOTE ]

That might be a valid question if that money went into a trust fund solely for your retirement. Of course the system doesnt work that way, as Im sure you know.

[cardcounter0]

No, I think it is a perfectly valid question.

[Richard Tanner]

God Bless this country. Kool-Aid and Abortions for all. /images/graemlins/grin.gif

Cody

[Richard Tanner]

That money is already spent, so you have two choices.
1) You can beat and rob the elderly until you recoup your losses OR
2) You can just treat that money as lost, grandfathered if you will, by an old, obsolete system.

Cody

[vulturesrow]

[ QUOTE ]
No, I think it is a perfectly valid question.

[/ QUOTE ]

No because once that money disappears from your paycheck, it isnt yours anymore. You have no claim on it. That money is paying Grandma's SS benefits right now. Better hope Junior gets a good job when he grows up.

[ACPlayer]

If congress passed a law allowing you to keep all of your ss contributions and invest it on your own tax-free like a 401K, would you choose to do so?

While I enjoyed the repartee on the $155K (specially as 6M is allowing even me to get a refund /images/graemlins/grin.gif), the question is an interesting one.


The real question that the (true) reformers dont address is what is the safety net or even if society should offer a safety net for the person who gets hit on the NJ turnpike without health insurance, loses this money to stay alive and has nothing to move forward. What is the nature of this beast and how do you avoid the misuse of the same?

The biggest concern I have with the SS debate is that the question of whether we as a society should provide the safety net will be swept under the rug and defacto the safety net be removed and then a patch work and more expensive safety net is constructed reactively as the boomer age.

The second concern of course is whether the average population has the knowledge or ability to manage the money, and whether we will pay for the safety net for people who insist on blowing the now mandatory SS payments up their noses.

[natedogg]

AC, those are perfectly valid questions which I recently addressed in the PS portion of my response to zerosum's recent post linking Roger Lowenstein's essay. The PS portion is down at the bottom of my admittedly lengthy post.

natedogg

[Cyrus]

[ QUOTE ]
If congress passed a law allowing you to keep all of your ss contributions and invest it on your own tax-free like a 401K, would you choose to do so?

Or simply:

If Social Security is reformed will you opt for a private account or leave your money in the system?

[/ QUOTE ]

(shrug) Those who have or believe they have (will have) a better-than-average income and those who miscalculate upwards those figures will mostly refuse the cover of Soc Sec. Usually a bad decision for them anyway. The rest would be wise to take insurance.

Insurance works as a negative EV / positive utility endeavor. Questions like this ignore the fundamentals behind it. (The issue of whether the money going to Soc Sec are wisely administered and invested is a different issue altogether.)

I would humbly yet strongly recommend the Tversky et al work on human heuristics for anyone interested in going beyond the petty politics and learning about how we make decisions (such as caring for our old age).

[natedogg]

So, would you open the private account or not?

Don't tell me you're a Social Security apologist too. Don't tell me that you too have fallen for the false dichotomy of Social Security vs. no social insurance whatsoever. I had you pegged as smarter than that.

natedogg

[Cyrus]

[ QUOTE ]
So, would you open the private account or not?

[/ QUOTE ]Way ahead of you. /images/graemlins/cool.gif


[ QUOTE ]
Don't tell me you're a Social Security apologist.

[/ QUOTE ] Yep.

I'll let those who can't afford to have access to this website to elaborate.

[MMMMMM]

[ QUOTE ]

Quote:
Don't tell me you're a Social Security apologist.

Yep.

[/ QUOTE ]

Cyrus you continually astound me. You are wrong on virtually every single thing you ever venture to express a view on.

Just one question: how did you ever manage to make it this far along the road of life?

[bholdr]

Either way, it's a big fat mess.

Privitazation is not the answer, though- look at what's happened in the UK since they took steps towards privitazation- and then there's the transitional costs; it's insane to suggest letting the Debt grow to more than one year's GDP, imo.

The only solution i can see, and it's an unpopular one, is to roll back the age at which benifits kick in, say to about 73 (one and a half years a decade for the next few). problem solved. but the AFLCIO and the AARP won't let that happen...

[Cyrus]

[ QUOTE ]
You are wrong on virtually every single thing you ever venture to express a view on. Just one question: how did you ever manage to make it this far along the road of life ?

[/ QUOTE ]

Standard deviation.

<font color="white"> . </font>

[natedogg]

[ QUOTE ]
I'll let those who can't afford to have access to this website to elaborate.

[/ QUOTE ]

Cyrus Cyrus. Usually you put more thought into things. I'm surprised at you.

Your not-so-subtle insinuation that changing Social Security is tantamount to relegating people to poverty reveals that you have fallen for the false dichotomy presented by SS's defenders.

Most support of SS is motivated by a desire not to see old people starve. This is a laudable goal. Who wants to see old people starve, even the ones who have foolishly put themselves in that spot? Not me.

But SS is not the only possible solution for alleviating the hunger of destitute old fools and unfortunates. As soon as you free your mind from the constraints of that fallacy, you can begin to really explore alternatives to the way we run SS.

It doesn't do anyone any good to cling emotionally to the fear of seeing old people starve, dismissing any critique of SS with the self-righteous trump card of "I am not a heartless monster like you". Now THAT's what I call petty politics.

There's more than one way to provide a safety net for the biggest fools and most unfortunate, and we are currently employing one of the least effective ways possible. Actually, that depends on what your goals really are. From the perspective of Congress, it's a fantastic dream come true.

They even have the support of millions who have wholeheartedly swallowed the false dichotomy used to justify the program's existence.

An illuminating discussion on this stuff can be found in this recent Reason.com discussion:

http://www.reason.com/hitandrun/2005/01/new_at_reason_369.shtml#comments


natedogg

[natedogg]

"The only solution i can see, and it's an unpopular one, is to roll back the age at which benifits kick in"

bholder,

Seriously, that's the ONLY solution you can think of?

Also, the just because privatization has been implemented with some flaws in England doesn't mean it cant be done right at all.

natedogg

[bholdr]

i should of said: the only EFFECTIVE solution that has been presented in a coherent way. however, i have to say that your proposal, a kind of welfare for the elderly, looks promising, too.

but you didn't answer my question, what do you think about rolling back the age qualification. let's say your choices are bush's privitazation plan, the status quo, and my proposal...

and, while the fact that the UK's system has flaws doesn't mean privitization can't work, its failure in the UK isn't particularly encourging, either.

[natedogg]

[ QUOTE ]

but you didn't answer my question, what do you think about rolling back the age qualification. let's say your choices are bush's privitazation plan, the status quo, and my proposal...


[/ QUOTE ]

Of the three, I have to go with privatization for a couple reasons. Even if the plan has flaws similar to England's it will open the door to full privatization and then hopefully full elimination of SS. Secondly, you can't place a value on freedom, and I'd rather see people have the freedom to handle their own retirement money even if govt can do it better for them through coercion.

The basic philosophy behind SS is repuganant: some people will make poor choices in life, therefore noone should be allowed to make any choices, the govt should make choices for them instead.

[ QUOTE ]
and, while the fact that the UK's system has flaws doesn't mean privitization can't work, its failure in the UK isn't particularly encourging, either.

[/ QUOTE ]

I'll give you that.

I'm not actually in favor of privatization. I'm in favor of eliminating SS entirely. That's unrealistic in the current climate so I'd love to get the foot in the door for full privatization, and that will happen with the baby step of partial privatization.

Believe me once people have an account of their own with funds they can pass on to survivors (which by the way actually helps the poor immensely, far more than middle and upper classes) they will push for getting more of that, and they will also push for getting more control over it to be more like an IRA. Having that kind of choice over your money will mitigate the British-type problems. The British problem was mostly that a few approved fund managers had an oligopoly. That is in essence what Bush is proposing but I foresee rapid expansion of the control people will have, because they will demand of their reps.

Eventually, if everyone has a fully private account that they own and manage like an IRA, I'd be happy with that.

One more thing, absent elimination or privatization, I'll take status quo over raising retirement age because that is a recipe for disaster for SS. I'd like to see it die a peaceful death but if it has to be drastic, so be it. The last thing I want to see is raising the retirement age and drag this beast out for 70 more years.

natedogg

[Dr. Strangelove]

One point that is being glossed over is that SS is not merely a retirement program. It also provides benefits to survivors of primary wage earners, as well as those who become disabled.

[bholdr]

Thanks for the reply. there's only one problem with your position that:

[ QUOTE ]
The basic philosophy behind SS is repuganant: some people will make poor choices in life, therefore noone should be allowed to make any choices, the govt should make choices for them instead.

[/ QUOTE ]
you assume that all people have the same 'choices'

This is a very revealing statment, if one looks at it closely. the implication behind the statment is that it's people's choices that are solely or mostly responsible for thier ability to support themselves in retirment.

you forget to take into account the various advantages and disadvantages that people may encounter in life and old age...

There are various educational, social, geographic, familial, racial, sexual(i mean gender), physical, and genetic disadvantages to which a citizen may be subject that often prevent them from having set of choices that may result in a comfortable or tolerable retirment. Without a mechanisim to support this part of the population (and it's a large part), they simply won't be able to retire, and it has nothing to do with the choices they may have made.

and there's always the fact that 'some people just get screwed' (to use my old econ prof's favroite phrase). weather it be by their corrupt CFO's(think enron), the government (japanese american's in WWII, for example), the market (i know people that lost half their retirment over the last six years- although this one probably falls into the 'choices' category), acts of nature (landslide in cali last week), accident, crime, etc, etc...

I'm not saying that people's choices don't affect their ability to have a comfortable retirment, i do think, however, that that's only one part of a very big picture, and in the end, it's impossible to distuinguish between who had the choices and who had the luck.

* * *

And now that i think about it, your statment about the nature of SS wouldn't even really be accurate if all people DID have the same choices, oppurtunity, and luck. how 'bout this:

some people will make poor choices in life, therefore, by making collective choices through a democratic government, we can eliminate the worst effects of those poor choices, at a cost of denying some choices to others.

This would be more accurate, i think. the two statments, when seen side by side, showcase a basic conceptual difference between the libertarian perspective and my own: the libertarian belief in the citizen-government duality, and my belief that they are one and the same. but this is all is very much off-the-cuff, as i am late for a date, so excuse me if i have misintrepreted or misrepresented you or your positions.

gotta go (wish me luck)!

[andyfox]

I don't think there's a basic philosophy behind social security. Or, at least, I don't think we have it because of a basic philosophy. Note the quote from the article cited in the other thread:

''The Congress can't stand the pressure of the Townsend Plan unless we have a real old-age insurance system, nor can I face the country without'' one, Roosevelt told his labor secretary.

So it was politics. And it will be politics again. What will most likely happen? The benefits will be reduced slightly by either tying them or untying them to inflation or income; the retirement age will again be increased, ever so slightly and ever so slowly; and, in exchange for the votes of Democrats for a degree of privatization (such as that suggested by the Moynihan commission), the maximum income on which payroll taxes are taken will be raised, but not the rate, so that the president can say he stuck to his pledge of not raising taxes.

[natedogg]

Andy, I couldn't agree more with your analysis. I guess by "underlying philosophy" I meant the mentality behind the average citizen who supports the program.

natedogg

[natedogg]

bholder, I want to be very clear that I'm not in favor of letting fools and unfortunates starve. It's just that SS is a horrible way to provide the safety net for those people.

I'm arguing that we should allow people to make their own choices, but that is not the same thing as arguing that we should let the unlucky and the stupid die in the streets.

There is a huge difference.

natedogg

[Laughingboy]

Tried it. Doesn't work. The trouble is that the typical arrogant, paternalistic liberal who opposes SS reform thinks THEY are smart enough to invest their own money, but no one else is. "What happens to the poor schmuck who invests all his retirement money in Enron?" they say, then pat themselves on the back for being willing to take a hit on their own retirement for the greater good. Irritating.

[Laughingboy]

Your only support is one anecdote? How about all the U.S. cities that opted out of the current SS system and now have pension benefits 10x that of social security? How about other countries with private systems, like Australia and Malaysia, which are enormously successful and make out system look pathetic?

As for market risk, the solution is simple. If you don't want risk, put the money in a no-risk interest-bearing account. Even at a 2% rate of return, you'll have vastly more retirement income than under SS (which has a &lt;1% return), plus you can leave the money to your heirs when you die, istead of donating it all to the govt. Chances are you'll average 6% over your working income, and will probably beat SS benefits by 300% or more.

There's a solution for those who lose their retirement funds. It's called welfare. presemably that program will still exist after SS is reformed.

-S.

[Cyrus]

I'm all for reforming the Social Security system as practiced in the United States - but flat out against abandoning it altogether for some "private investor, free market" nonsense.

I'll give you one for-instance: I have seen and known much closer than a lot of posters here how private banking and institutional investing works and the optimal benefits of the stakeholders is near the bottom of the pile of things that managers worry about. Operating under the free-for-all, no-holds-barred tenets of the free market when you are the smart kid on the block AND caring about the buffoons who have entrusted you with their money is an antinomy in the cosmos!

It all depends on your objective in this: If you want to let those who can't hack it drop dead and disappear, then fine, kill off SS. If you wanna have a net of protection for the less able than you's, keep SS - and reform it (attack the administrative inefficiencies it has).

[natedogg]

[ QUOTE ]
It all depends on your objective in this: If you want to let those who can't hack it drop dead and disappear, then fine, kill off SS. If you wanna have a net of protection for the less able than you's, keep SS - and reform it (attack the administrative inefficiencies it has).

[/ QUOTE ]

Again, this is a false dichotomy. You don't have to be in favor of letting people drop dead and disappear in order to be in favor of major SS overhauls up to and including dismantling.

There is definitely a problem we'd all like to address, namely poor starving old people with no family to take care of them. The stupid thing about SS is that instead of being a program that identifies that specific social ill and addresses it directly, it sucks everyone into a coercive preventive system that hinders the vast majority and helps out only a very few. Why not just have a program that directly addresses the needs of old starving poor people?

Here's my simple proposal: Let everyone save all their own money in their own accounts, I'll compromise and actually agree to coerced IRAs equal to 12% of payroll.

Anyone who retires broke despite having saved all this money, put 'em on welfare. Endy story.

natedogg

[natedogg]

[ QUOTE ]
One point that is being glossed over is that SS is not merely a retirement program. It also provides benefits to survivors of primary wage earners, as well as those who become disabled.

[/ QUOTE ]

Yes, that's true. It was an incredibly brilliant, and tricky move on Congress' part to tie these kinds of benefits in with Social Security. That way any attack on Social Security in the future could be painted as an attempt to throw the disabled out into the streets.

There's no reason we can't reform SS and create a form of disability insurance available to workers.

natedogg

[bholdr]

I know that you don;t want to let unfourtunate people starve, nate, and i wasn't trying to imply that you do, sry if you thought i was. I actually agree that a social welfare system for the eldery, coupled with more responsible long term personal private retirement investment is the superior idea, if it can be effectivly implemented. perhaps a portion of an individual's income tax should be earmarked for the retirment investment of their choice... can people be forced to invest in thier own futures? doesn't sound right either. the mechanism can be worked out later. (it's not like it's gonna happen anyway &lt;sigh&gt;)

what do you think about the difference between these two perspectives, though:

SS implys that:

a:some people will make poor choices in life, therefore noone should be allowed to make any choices, the govt should make choices for them instead.

and...

b:some people will make poor choices in life, therefore, by making collective choices through a democratic government, we can eliminate the worst effects of those poor choices, at a cost of denying some choices to others.

i personally think that it's a revealing commentary on the ideological rigidity of our opposing veiwpoints vis-a-vis the role of government: the perception of the extistance or non-existance of the people v government duality... i am curious as to your thoughts on the issue.

[bholdr]

YOUR only support id TWO anecdotes and a bunch of unsupported stastics?! 10x, eh? let's see some real figures.

and SS has NO rate of return. the money is directly paid form younger wage earners to older retirees. you knew this, right?

my post was OBVIOUSLY a breif attempt at a segway towards a discussion of raising the retirment age, not an attempt to refute the possibility of effective privitazation! we have already covered the welfare angle, try to keep up.

I am laughing, boy.

[bholdr]

some would say that it was more than simply a brilliant manouver aimed at preventing attacks on the system in the future, but rather an attempt at INSURING THE DISABLED AND WIDOWED!

you are a master of (mis)contextualization, nate. but you're also right, nobody is suggesting throwing widows and the disabled out onto the streets, we can figure something out, i'm sure.

[zaxx19]

As for market risk, the solution is simple. If you don't want risk, put the money in a no-risk interest-bearing account. Even at a 2% rate of return, you'll have vastly more retirement income than under SS (which has a &lt;1% return), plus you can leave the money to your heirs when you die, istead of donating it all to the govt. Chances are you'll average 6% over your working income, and will probably beat SS benefits by 300% or more.


EXACTLY

[MtSmalls]

It is a great arguement, for keeping social security. I would always choose to keep my money in SS and out of the private account. For the same reasons that I choose to insure my car and my house. So that I can be sure that there is something there for me when I retire.

The 'fallacy' of long-term investing is that while the market does go up over time, it doesn't always go up, as we have seen over the last five years (most market indexes are flat for a five year period). What if that happened to be right before I retired?

What if I take care of myself and live to the ripe old age of 99? Did I save enough? With social security, or the nearly non-existent defined benifit pension, I know that there will always be a subsistence living, not only for myself, but for my spouse as well.

Social security is also Disability and Survivor payments. Payments that come out of the same pool, that are paid to people that need them.

The current Social Security system is NOT a mess. There is NO crisis (just like there are no WMD's in Iraq). The system is solvent and will be for decades to come, even with the most pessimistic economic assumptions the GAO and SS can come up with.

The CRISIS facing this country is the current deficit, not Social Security.

[Laughingboy]

It seems my numbers were off for the city I was thinking of: Galveston. The average retirement income there is only 200%-500% better than social security, not 1000% like I had thought. See http://www.tppf.org/government/perspect/holbrook.html. But my point remains the same.

As for the rate of return comments - Yes, I know how the system works. The figure I gave is what your rate of return would be if you considered SS to be an investment, based on the amount of benefits you can expect to receive in your lifetime. This is obivously just a simulated number, but it's a reasonable basis for comparison.

I just joined this forum, so forgive me if I missed some of the earlier discussion. (e.g. about welfare). And apologies for the snyde tone of my earlier message. I just get frustrated easily over this issue.

The real point I was trying to make is that people mistakenly assume that privatization = high risk. That's not necessarily true. You can buy bonds, treasuries, or other 0 or low-risk instruments and still blow away social security. If you take the 10.5% average return from the stock market, the difference is truly staggering.

-S.

[MtSmalls]

Here are the numbers for the financially challenged:

Assume a 30 year old, making 80K per year (this is near the upper end of the SS spectrum currently).

If all 6.2% of his contributions go into a "private account" (just shy of 5K per year) at your risk free 2% rate, at Retirement (67 for someone his age) he will have accumulated a grand total of $271,471.92. This will pay out just under $1500 per month until age 85, at which time he will have nothing left.

Should he die somewhere along the way, he might have a small lump sum payment for his survivors if any, but it won't last 10 years

[Laughingboy]

Setting aside (for the moment) philosphical notions about whether people should be forced to invest in tehir own futures (and I agree with you on that one - it doesn't quite seem right), the approach of mandatory retirement savings plus social welfare has been successful in other countries (like the ones I mentioned in my earlier, obnoxious post -- see my apology :/), and I honestly believe that that's what people thought we were getting when social security was first implemented. Transition would be difficult, but not impossible, at least logistically. Politically, though, I'm afraid you're right -- I doubt it will ever happen.

[Laughingboy]

The benefits are still paltry, the tax regressive, and the administration inefficient. If it were replaced with mandatory savings and an extension of welfare benefits to the elderly, you'd still be protected from completely running out of money and having to live in your car. This is a poker forum, after all: think about your expectation /images/graemlins/smile.gif

[Laughingboy]

That's assuming:

1) our record-low interest rates stay in effect for your entire career. Unlikely.
2) You invest only in money market accounts, not long term bonds, which get better returns
3) You get no return on your retirement savings after you retire.

Along with ignoring the risk of SS going bankrupt 40 years from now. (Relevant to us 20-somethings).

A 4% average rate of return is still a conservative estimate for a 0-risk approach. Run the numbers on that one.

Cheers!
Sean

[Phat Mack]

If congress passed a law allowing you to keep all of your ss contributions and invest it on your own tax-free like a 401K, would you choose to do so?

If Congress passed a law allowing you to keep all your income tax contributions, but you had to fight your own war on terrorism, which would you choose?

[MtSmalls]

Actually, I did include interest income on your savings after retirement. These are simple PV/FV calculations.

There were a TON of assumptions made or not made in the simple calculation, COLA adjustments (which SS makes based on wages, my calculation dont), increased income over a lifetime, not hitting the SS upper limit for taxes, what happens to the employers 6.2%, increased cost of living in the future, probability of capital gains losses from the bonds that are sold in the year prior to retirement etc.

at 4% the numbers don't change much:
At retirement the account is now $419K, for 18 years (until 85, you can collect $2700 every month, again assuming no losses etc.

[bholdr]

I too, need to apologize. i was three sheets to the wind, and don't even remember posting that. sry.

pretty amazing how well spoken i can be in that condition, though, huh?

[bholdr]

"I just joined this forum, so forgive me if I missed some of the earlier discussion. (e.g. about welfare). And apologies for the snyde tone of my earlier message. I just get frustrated easily over this issue."

no prob. see my other response to you. hope you keep posting here.

I understand that a private retirment fund doesn't have to be high risk, or even medium risk. I also know people that assume that it will be extremly risky, and i don't agree with them, like i said i was trying to make a segeway to another point- that of raising the benifits age.

i'll think about that link you posted.

[natedogg]

[ QUOTE ]
what do you think about the difference between these two perspectives, though:

SS implys that:

a:some people will make poor choices in life, therefore noone should
be allowed to make any choices, the govt should make choices for them
instead.

and...

b:some people will make poor choices in life, therefore, by making
collective choices through a democratic government, we can eliminate
the worst effects of those poor choices, at a cost of denying some
choices to others.

i personally think that it's a revealing commentary on the ideological
rigidity of our opposing veiwpoints vis-a-vis the role of government


[/ QUOTE ]

I disagree. I highly doubt your viewpoint on the role of govt is as rigid as mine! /images/graemlins/smile.gif

More seriously, I can say with confidence that in EVERY case where we seek to "alleviate the personal harm of poor choices" for individuals, there is a better solution than one that "denies some choices to others" on the matter.

Let's not mince words about "denying some choices". We're talking about limiting freedoms, period. I might use the inflammatory term "self-righteous collectivist tyranny" and you might use the apologetic term "necessary personal limitations for your own good" but it's the same thing.

Even so, the real fallacy in your phrasing above is this: It begs the question that the best/only way to address such concerns is through a universal reduction of everyone's freedom. I humbly submit that it is not. Ever. There is always a better way to address the problem without curtailing liberty.



If you really want to address a social ill, then address it directly. If the concern is that some old people are destitute with no families to take care of them, then by all means let's give them a subsistence. But the so-called "solution" of SS coerces everyone to engage in a program that most of us don't need, at a very high cost to all. Most participants in SS are harmed by it, not helped. It's the wrong approach, both morally and practically.


Two of the biggest social policy disasters of the 20th century for the U.S. are Prohibition and the Drug War. These policies are wholly fueled by the philosophy that some people will choose poorly and ruin themselves so therefore no one must be allowed to choose. Yet, the disastrous effects of Prohibition and the Drug War speak for themselves. Can you think of a single case where the kind of disgusting paternalism we find in Prohibition has led to a policy that proved to be a wonderful boon to our society? I can't.


Also, I think your phrasing reveals the misperception of what Social Security really is. Social Security is not a "collective effort to eliminate the worst effects of poor choices". It is anything BUT that.


Trust me, the only way to view SS positively is by mistakenly believing it is some kind of benevolent group-funded welfare program. That is a totally false perception of how it really works.



It directly transfers payments from the young working poor to the retired aging wealthy. There is no means test. It has no explicit mechanism for providing aid to the very poor! The biggest benefit checks go to the wealthiest retirees who have contributed the most to the system. The smallest checks go to the poorest. At the end of the day, the very poor who have been poor all their lives are still very poor under the SS regime.

So, it's not some wonderful collective plan that hurts the majority in order to help out the bottom few. If anything it keeps the bottom few right where they are. All these people who hysterically claim that SS reformists are just selfish greedy pigs who want to relegate the elderly to abject poverty are missing the fact that SS already does exactly that!


By any examination, SS not a program designed to collectively mitigate the effects of stupidity and luck for those who suffer from such. It is a program that does nothing more than flatten out the end results of most participants's lifetime earnings by taking away all their possibilities and replacing it with a default guarantee of near-poverty (unless they manage to build up assets otherwise, in which case those wealthiest participants take the lion's share of the payouts anyway!) It's so absurd it sounds like a work of fiction aimed at lampooning nanny-state socialists.


Social Security apologists have successfully managed to spin it as a form of govt largesse. It is not. I prefer outright largesse to paternalism. No matter how you slice it, Social Security is all paternalism with none of the largesse. It is a failure at being either welfare OR a pension while attempting to be both. It has been cynically mismanaged by venal greedy dishonest politicians. It is a &amp;#102;&amp;#117;&amp;#99;&amp;#107;&amp;#105;&amp;#110;&amp;#103; stupid mess that fails on all counts.



natedogg

PS: And now we have the wonderful option of raising the payroll tax even more (1.89% is needed to make up the coming shortfall) in addition to reducing benefits! Gee, spend more for less, that sounds like a great deal!

Only wide eyed govt-loving statists steeped in Orwellian double-think could possibly think that sounds good, while those of us who want to let people keep their own money and generate their own wealth for retirement are somehow evil neo-con monsters. Honestly, you have to be drunk on the state-subsidized koolaid to think that total privatization is evil compared to continually gobbling up more and more payrolls to pay for ever-decreasing payouts from the coercive pseudo-insurance pseudo-pension pseudo-welfare that the participants were unwittingly put into a position to need in the first place.

I despair for the future to be honest.

natedogg


PPS: The one valid complaint I have seen from the SS apologists is that Bush is deceptively calling it a crisis when it is merely a problem, but that is nothing more than a semantic battle over the word crisis. The numbers are there so if you're so stupid you need Bush to label it a "crisis" for you or you need Barbara Boxer to label it "not a crisis" then you're hopeless anyway. Even the ones who say it's not a crisis acknowledge that some fixes are necessary. So there is a problem, call it a "crisis" or a "problem" or a "floopdeepoop" or whatever you like.

[natedogg]

You've been misled about how social security works.

[ QUOTE ]

What if I take care of myself and live to the ripe old age of 99? Did I save enough? With social security, or the nearly non-existent defined benifit pension, I know that there will always be a subsistence living, not only for myself, but for my spouse as well.

[/ QUOTE ]

If you really think this is what social security is about, why is not voluntary? Try to answer without sounding like an elitist patrician. Go ahead, try. It's really hard to do.

I clarify a few of the flaws and also misconceptions here: http://forumserver.twoplustwo.com/showthreaded.php?Cat=&amp;Number=1570595&amp;page=0&amp;view=c ollapsed&amp;sb=5&amp;o=&amp;vc=1
natedogg

[natedogg]

[ QUOTE ]
It is a great arguement, for keeping social security. I would always choose to keep my money in SS and out of the private account.

[/ QUOTE ]

I don't believe you, not for a minute. Why would you intentionally shoot yourself in the foot that way? If you put any thought into it at all you would put that money into T-Bills which are more secure and give you a better return over the long run.

They are backed by the full faith and credit of the united states, wherease social security is backed by the current whim of the benefit administrators and congress and the people who elect them. Hardly reassuring.

Then again, maybe you haven't put any thought into all. After you all you call it insurance. It's nothing like insurance but the talking points memo sounds convincing if you don't do your homework.

natedogg

[Laughingboy]

I must resist the temptation to quote your entire message, and say "Yeah! Yeah! what he said!" Finally, someone who gets it.

The only thing I'd add is that SS also serves as a tidy little slush fund for government pigs to raid every time they don't want to pay the bill for their own ridiculous waste.

Many liberals are completely unaware of how regressive SS is. First, they ignore the payroll tax, thinking the "corporations" pay for it, so that's OK. But the truth is, YOU pay the payroll tax, as it's all part of the cost of employing you, and it's money that the corps would pay YOU if it weren't going to Uncle Sam. Even more disturbing is, as you say, the poor and middle class pay for Social Security, by and large. The wealthy pay a negligible percentage of their incomes, while the middle class have an enormous burden to bear. It's truly a disgusting ripoff, that goes against everything liberals claim to espouse, yet they continue to insist on pulling the wool over their own eyes and ignoring the plain, irrefutable facts. But why should we be surprised? The Republicans are supposed to be for "smaller government" after all. What a joke.

Sean "Mr. Cynical"

[Laughingboy]

Keep my cash and get our boys the hell out of Iraq, and send them to fight a REAL war on terrorism in, oh, say, Saudi Arabia. But oh wait: we can't do that, they've invested too much money in U.S. corporations. Darn.

[Matt Flynn]

nate,

safety net is the point of the program. so for us to evaluate the benefits of privatization you must define the limitations you would place on investment options.

e.g., i'd want to buy real estate with mine. would you let me? what about all those small-town mid-Americans whose real estate is declining in value? Russell 5000? S&amp;P100? S&amp;P500? what about the radical market pressure you would put on those companies covered by "approved" investments when several trillion dollars are "invested" in them?

not against it, just want to know the particulars before getting on the bandwagon.

matt

[zaxx19]

what about all those small-town mid-Americans whose real estate is declining in value

What......It isnt for the most part. Infact the best places to buy now are the far out ex burbs that are still semi rural.

[MtSmalls]

I understand exactly how Social Security works, being a part of the financial investment industry. It works as insurance, (hence the full name Social Security Insurance Program). It's not voluntary for the same reasons that auto insurance is not optional in the U.S. That is if you make poor choices (such as driving drunk) or are simply an idiot and can't operate a vehicle safely, the people hurt by your actions can still be made whole.

While the largest benefits are paid out to the largest contributors (wealthiest of americans) it is done so in a much smaller percentage of what is paid in, than at the bottom of the scale. Social Security also provides significant benefits for many who never paid into the system at all (spousal benefits as well as dependent benefits). Children who lose a parent before turning 18 are paid a survivor benefit until the age of 18, as is the remaining parent, if any. Spouses who do not work will recieve a benefit based on the working spouse's payments into the system.

Like any insurance annuity program, some people pay into the system well in excess of what they recieve out of it. Some people recieve more than they paid in. The law of large numbers makes the system work as a whole, hence the SSA running a surplus from its inception.

SSI was and is an insurance program, for everyone. It does not guarantee a wonderful retirement, but its purpose is to create minimum living standards for our parents today and for us tomorrow.

Again, I would always opt for this kind of insurance (as I do on my house, my car and my life). Would you want your retirement in the stock market, when a 30% drop a few years before retirement could wipe you out?

By all means, save your own money for retirement, that is the basis for the 401K plans, variable annuities and IRA accounts. Invest in stocks, bonds, real estate, gold or your favorite sports memorabilia for all I care. But don't presume to make that choice for everyone else.

[natedogg]

[ QUOTE ]
By all means, save your own money for retirement .... Invest in stocks, bonds, real estate, gold or your favorite sports memorabilia for all I care. But don't presume to make that choice for everyone else.

[/ QUOTE ]

Wow. I'm speechless.

natedogg

[Matt Flynn]

more specifically small farming towns in Kansas and adjacent states.

[Laughingboy]

[ QUOTE ]
[ QUOTE ]
By all means, save your own money for retirement .... Invest in stocks, bonds, real estate, gold or your favorite sports memorabilia for all I care. But don't presume to make that choice for everyone else.

[/ QUOTE ]

Wow. I'm speechless.

natedogg

[/ QUOTE ]

I'll speak for you then. Tell me if this isn't what you were thinking: "A SS apologist is telling US not to presume to make choices for everyone? Really? And with a straight face, to boot?"

If we privatize the system, you're free to buy an annuity from bubba huckster's insurance co. if you want the equivalent to SS. The rest of us only want to make our own, more intelligent choices.

[vulturesrow]

[ QUOTE ]
[ QUOTE ]
By all means, save your own money for retirement .... Invest in stocks, bonds, real estate, gold or your favorite sports memorabilia for all I care. But don't presume to make that choice for everyone else.

[/ QUOTE ]

Wow. I'm speechless.

natedogg

[/ QUOTE ]

I was speechless from laughing so hard when I read that.

[Cyrus]

[ QUOTE ]
Run the numbers on that one.

[/ QUOTE ]

The calculations by MtSmalls should suffice but you may wanna make some of your own. Excel has everything. Just hit the fx button and start browsing.

[ QUOTE ]
...the risk of SS going bankrupt 40 years from now

[/ QUOTE ]

The "political capital" associated with the viability of a govt'-sponsored and gov't-gruaranteed Social Security is such that the bankruptys scenario can only be described as a doomsday scenario. In other words, if T-Bills are not honored, it's time to take up arms and barricade the doors -- not search for your insurance.

[MMMMMM]

[ QUOTE ]

Quote:

Quote:
By all means, save your own money for retirement .... Invest in stocks, bonds, real estate, gold or your favorite sports memorabilia for all I care. But don't presume to make that choice for everyone else.



Wow. I'm speechless.

natedogg



I was speechless from laughing so hard when I read that.

[/ QUOTE ]

The obvious solution to MtSmalls' objection is to make Social Security optional.