| Author | Message | ||
     Dr. Winston O'Boogie Citizen Username: Casey Post Number: 956 Registered: 8-2003  |
Tom, I think it's a mistake (and actually plays into the hands of those who want to kill SS) to refer to "charity." This isn't about charity, or doing right by retired people. It's about good social policy; it's about ensuring that able bodied retired people have the means to stay independent. So they don't have to choose between being dependent on children or other relatives, and being homeless. And for the vast majority of Americans, they don't really earn enough money to sock it away while they're working and ensure themselves of a nest egg that will last 20 years post-retirement. It's about ensuring that people who work all their lives will have some sort of adequate pension to keep them in their old age. As such, it's for the good of all of us, not just the recipients. It ensures that the younger people in the U.S. won't have to worry about how to provide for the generation that came before them. | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5068 Registered: 1-2003  |
All of that is true. We should not view it as charity, though I would like to point out that charity benefits those who give it as much as those who receive it. But that's a matter of faith, if you'll pardon the expression. Those who would dismantle social security "as we know it" point out that it, alone, isn't adequate for retirement. That is true, but that doesn't mean it's worthless. If it's all a person relies on, he will live in poverty, but not of the type if there were no SS. I agree that society, as a whole, gains dignity if we don't allow abject poverty to exist. | ||
| Michael Janay Citizen Username: Childprotect Post Number: 1428 Registered: 1-2003  |
Tom, I learned that if you give a man a fish it feeds him for a day but if you teach him to fish you feed him for life. Seems appropriate. Doc, I think it's a mistake (and actually plays into the hands of those who want to kill SS) to refer to "charity." This isn't about charity, or doing right by retired people. It's about good social policy; it's about ensuring that able bodied retired people have the means to stay independent. So they don't have to choose between being dependent on children or other relatives, and being homeless. I agree 100% And for the vast majority of Americans, they don't really earn enough money to sock it away while they're working and ensure themselves of a nest egg that will last 20 years post-retirement. See this is where you are dead wrong. Virtually ALL americans ARE already putting aside more than enough money to retire on. The government is taking it from them though and giving a crappy rate of return, thereby insuring they won't be able to live on it during retirement. If you could put the 12% of your income (what you and your company are already paying every paycheck) into a personal account at a market rate of return, you would have a FAR better retirement nest egg than social security. Why can't the government just mandate savings? It ensures that the younger people in the U.S. won't have to worry about how to provide for the generation that came before them. Thats exactly whats happenning now. | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5070 Registered: 1-2003 |
I agree with teaching people to fish, wholeheartedly. However, regardless of how well you teach, some won't learn. What shall we do with them? I say don't let them starve. And remember, SS is not just for retirees. It's also for orphans. | ||
| mjc Citizen Username: Mjc Post Number: 125 Registered: 10-2004 |
Michael, I don't know that the following account for all the difference between "market rate of return" and social security fund rates, but... (1) There's an insurance element in social security - i.e., it pays your survivors if you die prematurely, it pays you for life after retirement, and it pays if you become disabled. The "insurance" costs something, right? (2) (not sure this is really a separate item) It's invested very conservatively (US gov't securities), for a reason. What will you do about people who worked, saved what they could, and are wiped out, before or after retirement by, take your choice, medical bills for self or family, grave disability, natural disaster, happening to need to retire when the market's down. Yes, I know the market goes up overall, but there are those valleys, and what if it's down at the time you need to cash out? Not trying to be oppositional here; I feel a major need to become educated on this, and regrettably I don't feel I can trust our leader. Anybody? | ||
| Dr. Winston O'Boogie Citizen Username: Casey Post Number: 957 Registered: 8-2003 |
mjc, that is the difference between SS and savings - it's insurance against having no income when you're old. even careful savers may outlive their savings | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5073 Registered: 1-2003 |
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| wharfrat Citizen Username: Wharfrat Post Number: 1494 Registered: 6-2001 |
Paul Krugman, 12/7/04 | ||
| cjc Citizen Username: Cjc Post Number: 2998 Registered: 8-2003 |
So provide a bare necessity for those who outlive their assets, and give their worthless kids a call if they are ducking any responsibility and letting Medicaid cover all the costs when they are able to contribute. | ||
| Paul Surovell Supporter Username: Paulsurovell Post Number: 210 Registered: 2-2003 |
In 2002 the Bush administration manufactured a WMD "crisis" to scare the public into supporting a military takeover and (intended) privatization of the Iraqi economy. In 2005 the Bush administration is manufacturing a Social Security "crisis" to scare the public into supporting a legislative takeover and privatization of America's public retirement system. Here is an excellent presentation of the facts on Social Security by Senator Jon Corzine, which appeared in Sunday's Star-Ledger: PRIVATE ACCOUNTS, PUBLIC DISASTER NJ Star-Ledger / Perspective / Sunday, January 09, 2005 BY JON S. CORZINE President Bush has yet to provide specific details about his plan for changing Social Security, but he has said often enough that he is likely to use a blueprint developed about three years ago by his hand- picked Social Security Commission. That blueprint must be rejected. It's a blueprint that calls for deep cuts in guaranteed benefits and would lead to a massive and irresponsible increase in debt. It takes the security out of Social Security. Social Security is based on the best of American values. It promises all Americans that if they work hard, pay taxes and play by the rules, they will be able to retire and live in dignity. Social Security is not a handout. It's an earned benefit that promotes and rewards work. Social Security guarantees that regardless of the state of the economy or the stock market, every contributing American will have a basic level of financial security. The Bush privatization plan undermines that guarantee. By changing the formula for calculating benefits, the Bush commission's plan would impose steep cuts. According to the Congressional Budget Office, which is a nonpartisan official scorekeeper, the Bush plan's cuts would be about 25 percent for many current workers. In the future, cuts could exceed 45 percent. These figures include the projected proceeds from privatized accounts. The Bush cuts would apply to all retirees, even those who choose not to invest in privatized accounts. Those who do invest in these accounts would be hit twice -- first with a cut in their basic guaranteed benefit, and second with a new, added tax on their account when they retire. That tax could wipe out most, or even all, of their account, depending on actual returns. In any case, although the plan does not explicitly raise the retirement age, its cuts almost certainly would force many Americans to delay their retirement, in order to build up more assets. Even without these cuts, Social Security's guarantee ensures only a basic existence. Today, the average Social Security benefit is about $950 per month, or $11,500 a year. For women, the average benefit is about $825 per month, or less than $10,000 annually. For most seniors, especially those living in high-cost areas like New Jersey, that's hardly enough to maintain even a basic standard of living. Some argue that we need deep cuts in Social Security benefits to save the program. But the numbers prove that's wrong. Over the next 75 years, the entire Social Security shortfall represents about 0.4 percent of our gross domestic product. By contrast, the cost of President Bush's tax cuts, if made permanent, would be 2 percent of GDP. In other words, the tax cuts will cost about five times the entire Social Security shortfall. The truth is, we have the resources to meet our obligations and honor our promises. It's simply a matter of setting priorities and maintaining fiscal discipline. To be clear, I am not opposed to the use of private accounts to save for retirement. To the contrary, it is essential that Americans save privately for their retirement, and that is why I strongly support providing tax subsidies for 401(k)s and IRAs. But private accounts, by their nature, cannot provide the same level of security as Social Security. When investments tumble, health declines and all else fails, Social Security benefits are there -- guaranteed -- as a final lifeline for seniors. I am especially concerned that President Bush apparently plans to finance privatized accounts by incurring massive amounts of debt. In the first 10 years, that debt is likely to exceed $2 trillion. But that's just the beginning. In the second 10 years, for example, debt could increase by more than $4 trillion. To provide some perspective, that's almost as much as our entire publicly held debt today, which totals about $4.4 trillion. Such massive increases in debt would impose a huge burden on young Americans and our nation's future. They also would threaten to raise interest rates and undermine economic growth in the short-term. As a former bond trader, I find it almost incomprehensible that the president would want to increase debt so dramatically when we already are suffering from the largest deficit in our nation's history. This kind of fiscal recklessness is simply not sustainable. Many privatization advocates rest their case on claims that seniors will enjoy better returns. However, such claims are misleading. First, they generally overlook the costs of financing the accounts -- the higher interest costs that future taxpayers will be forced to bear. Also, privatizers typically ignore the fact that Social Security, in addition to its role in protecting retirement security, also includes insurance for workers who become disabled and for survivors of workers who die prematurely. Perhaps more fundamentally, privatization proponents generally fail to adjust projected returns for the added risk of investing in equities, as virtually all economists agree is necessary for a fair comparison. Having earned my living as a trader and investment banker for 30 years, and having run one of America's largest financial companies, I understand something about markets. I can assure you it is pure folly to assume that privatized accounts will always increase in value and will be at a high-water mark at the moment when an individual retires. The truth is, markets go up, down and sideways -- sometimes for many years. One thing they never do is provide guaranteed returns or protection against both inflation and the risk of outliving your savings -- only Social Security does that. There is another problem with privatized accounts: They are very costly to administer. One reason is that many accounts are quite small, so a significant share of any gains is eaten up by management fees. A University of Chicago study found that fees would reduce benefits by 20 percent. By contrast, Social Security's administrative costs are minimal, about one-half of one percent. Social Security at its most basic level provides a simple guarantee: Work hard and contribute now, and your financial future will be secure. Proposals to cut guaranteed benefits in favor of individual bets on the market strike at the very core of Social Security's promise. Those who disagree with that promise have a right to call for the program's repeal. But they shouldn't pretend that privatization promises security for America's seniors. It doesn't. http://nj.com/opinion/ledger/perspective/index.ssf?/base/news-0/1105253741196560 .xml#continue | ||
| Strawberry Supporter Username: Strawberry Post Number: 4248 Registered: 10-2001 |
What's dumb about Ashear's question is his ignorance on the subject matter. As each day passes and we as Americans fail to offer young people a savings account attacked to their future SS, we are ripping them off. Failing to offer them the best return on their investment is just not the way to go anymore. Kicking off this program now is the best gift Americans can offer today's and tomorrow's young worker. | ||
| Debby Citizen Username: Debby Post Number: 1513 Registered: 5-2001 |
Exactly - Bush wants to attack people's social security accounts. Paul S. - that's a great point about creating a SS crisis to influence public opinion and impact policy decisions. | ||
| Bobkat Supporter Username: Bobk Post Number: 7188 Registered: 5-2001 |
Straw, I think you made a Freudian slip by using "attacked" instead of "attached". An interesting point is that currently social security taxes provide 125% of needed current revenue. The general taxes provide only 80% of the needed current revenue thanks to the tax cuts. I am also curious as to how we are going to pay for the private accounts (which in theroy I support) without adding tremendously to the deficiet. Deficiets count, the only people who believe they don't are those who expect "the Rapture" momentarily. | ||
| Michael Janay Citizen Username: Childprotect Post Number: 1430 Registered: 1-2003 |
Tom, I'm all for charity for the terminally stupid. I don't want to let anyone starve, but lets call it that. Charity. How about welfare, is that better? I'd have little problem with the government taking some of my money to give to those who truly need the help (1% would probably do it and leave a surplus). The problem is that they are taking my money to give to everyone over age 65, regardless of need, and in a promise to give me my money back when I hit 65. I don't want that, and they take too much, I want to invest my money the way I see fit for me and my family. Why do you and I have to be stuck in an underperforming financially insolvent program just because of a very few incredibly stupid people that can't understand the difference between growth and income stocks? If SS were entirely moved to personal accounts, there would be a tiny percentage of elderly that would need public assistance... give it to them, and call it what it is, charity, but let the rest of us reap the benefits of privatization. | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5077 Registered: 1-2003 |
There is so much we disagree on, particularly the purpose of SS, that I don't think further discussion would be fruitful. I think you had the last word anyway, at least until you study deontology. I'm college educated, and I don't know the difference between income and growth stocks. OK, I'll stab at a guess: you buy income stocks for the dividends and growth stocks in hopes of selling them at a profit. Whether I'm right or wrong doesn't indicate how smart I am, and it isn't a moral obligation to know the difference, either. | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5078 Registered: 1-2003 |
This is an editorial from the New York Times. http://www.nytimes.com/2005/01/10/opinion/10mon1.html?oref=login For the Record on Social Security January 10, 2005 Late February is now the time frame mentioned by the White House for unveiling President Bush's plan to privatize Social Security. The timing is no accident. By waiting until then, the president will conveniently avoid having to include the cost of privatization - as much as $2 trillion in new government borrowing over the next 10 years - in his 2006 budget, expected in early February. In this and other ways, the administration is manipulating information - a tacit, yet devastating, acknowledgement, we believe, that an informed public would reject privatizing Social Security. For the record: The administration has suggested that it would be justified in borrowing some $2 trillion to establish private accounts because doing so would head off $10 trillion in future Social Security liabilities. It's bad enough that the $10 trillion is a highly inflated figure, intended to overstate a problem that is reasonably estimated at $3.7 trillion or even considerably less. Worse are the true dimensions of the administration's proposed ploy, which were made painfully clear in a memo that was leaked to the press last week. Written in early January by Peter Wehner, the president's director of strategic initiatives and a top aide to Karl Rove, the president's political strategist, the memo states unequivocally that under a privatized system, only drastic benefit cuts - not borrowing - would relieve Social Security's financial problem. "If we borrow $1-2 trillion to cover transition costs for personal savings accounts" without making benefit cuts, Mr. Wehner wrote, "we will have borrowed trillions and will still confront more than $10 trillion in unfunded liabilities. This could easily cause an economic chain reaction: the markets go south, interest rates go up, and the economy stalls out." At a recent press conference, Mr. Bush exaggerated the timing of the system's shortfall by saying that Social Security would cross the "line into red" in 2018. According to Congress's budget agency, the system comes up short in 2052; according to the system's trustees, the date is 2042. The year 2018 is when the system's trustees expect they will have to begin dipping into the Social Security trust fund to pay full benefits. If you had a trust fund to pay your bills when your income fell short, would you consider yourself insolvent? In suggesting that 2018 is doomsyear, the president is reinforcing a false impression that the trust fund is a worthless pile of I.O.U.'s - as detractors of Social Security so often claim. The facts are different: since 1983, payroll taxes have exceeded benefits, with the excess tax revenue invested in interest-bearing Treasury securities. (An alternative would be to, say, put the money in a mattress.) That accumulating interest and the securities themselves make up the Social Security trust fund. If the trust fund's Treasury securities are worthless, someone better tell investors throughout the world, who currently hold $4.3 trillion in Treasury debt that carries the exact same government obligation to pay as the trust fund securities. The president is irresponsible to even imply that the United States might not honor its debt obligations. Mr. Bush's reason for ignoring the far more pressing problem of Medicare while he pursues Social Security privatization is especially tortured. Over the next 75 years, the mismatch between revenues and Medicare benefits for doctors' care and prescription drugs is 3.5 to 6 times as much as the shortfall in Social Security, according to the Center on Budget and Policy Priorities. The Medicare hospital trust fund mismatch is two to three times as big. Asked by a reporter last month why he wouldn't tackle Medicare first, Mr. Bush said that his administration had already taken on Medicare by pushing through the $500 billion-plus prescription drug benefit. Drug coverage, he said, would save money for Medicare by paying for medicine that would prevent the need for expensive heart surgery. "I recognize some of the actuaries haven't come to that conclusion yet," he said. "But the logic is irrefutable." Logic? That thinking is wishful to the point of being magical. Medicare is not going to fix itself any more than tax cuts will pay for themselves. And Social Security is not a crisis for which enormous borrowing, huge benefit cuts and risky private accounts are a solution. Rather, it's a financial problem of manageable proportions, solvable without new borrowing by a combination of modest benefit cuts and tax increases that could be distributed fairly and phased in over several decades, while guaranteeing a basic level of inflation-proof income for life. It appears that the president and his aides are trying to sow ignorance to gain support for their flawed privatization agenda. Lawmakers, policy makers and the American people have to let the administration know that they know better. | ||
| Bobkat Supporter Username: Bobk Post Number: 7191 Registered: 5-2001 |
A heck of a lot of older people rely on Social Security for their entire retirement income. Many people worked in enviornments with no pension plans and no 401ks. One of the issues is timing. If someone retired in 1999 their retirement account would have been worth X. If they retired a year later it would have been worth, at best, 75% of X. This effects the amount of annuity one can buy, which for someone who relies on "SS" for their entire income is the only sane way to go. | ||
| Rastro Citizen Username: Rastro Post Number: 589 Registered: 5-2004  |
Forget Krugman. Can anyone dispute (without political slurs) what Corzine is saying? | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5080 Registered: 1-2003 |
cjc, you're suggesting a "means test" which, as we have pointed out, is a bad idea. | ||
| Strawberry Supporter Username: Strawberry Post Number: 4249 Registered: 10-2001 |
So, no one can argue my point that Social Security savings account is a must have now.. figures, libs only whine, they never create solutions. |
