| Author | Message | ||
     Rastro Citizen Username: Rastro Post Number: 596 Registered: 5-2004  |
MJ, It was tough to parse out your post, but I’ll try to respond… (Plain text is Corzine, italics is MJ, bold is mine) 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. Only it doesn't, as Corzine says later on... How is this contradictory? While I agree it’s a thin connection, the idea is that since it promises you benefits if you work hard, more people will work hard. I don’t necessarily think he’s completely right on this, but it’s not a contradiction, as you imply. Social Security is not a handout. It's an earned benefit that promotes and rewards work. Except that it doesn't promote work, it hinders employers from creating jobs, and takes money away from earners to give to non-earners. Please, give me an example of how SS promotes work. Get real. This is a laying it on a little thick. Hinders employers from creating jobs? I can’t imagine any employer saying "I need a couple of new employees, but that darn SS tax just makes it not worthwhile." 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. Since Bush hasn't revealed his plan, Corzine can't actually know what it will or will not do, and since SS is going insolvent, there is no real guarantee anyway. Either Bush’s plan will have a guaranteed minimum return, which will increase costs, or it will not, which will undermine the guarantee. SS has been going insolvent for years. And it has been fixed before, just not quite enough. 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. New added tax? only if the Dems get their way. So how could this tax wipe out an entire account? Ludicrous. 1-You missed quite a few comments in there, particularly about the cuts in benefits. 2-I’m not quite sure what tax Corzine is talking about, but I don’t think he’s talking about a new tax (as in one that doesn’t exists now), but a tax that does not currently apply, but will. To be honest, he lost me here a little bit as well. And these cuts he's talking about are cuts in increases, not cuts in overall benefits. Overall benefits would still increase, in fact, Every model out there shows a better rate of return over the long term with a private account versus SS. Not every model out there shows it. Consider the past five years. Almost no one, using a conservative, but equity-based, investment strategy would have made money. But a model is just that. A model. It’s not a prediction of the future. Otherwise there would be a lot more people who got rich consistently from their own investments. | ||
| Rastro Citizen Username: Rastro Post Number: 597 Registered: 5-2004 |
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. So what. An able bodied 66 year old will still work... boo hoo. The golf course will have to wait. Actually, more like 72 or higher, not 66. Very few people outside unions seem to retire at 65 or 66. And the people who really benefit from SS are not playing golf. Dominoes maybe, but not golf. 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. Here it is... SS doesn't provide security. So what is he saying, that something is better than nothing? Work hard for years and get a pittance in return. Great. This is an arguement for privatization, seniors need a better rate of return on their investments. But privatization does not guarantee anything. If you consider the expected return, which takes into account all possibilities, not just the rosiest, private accounts are not that much better, and are not guaranteed. 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. Yet the tax cuts stimulate the economy and grow GDP where SS shortfall is pure debt. Any evidence that the tax cuts will stimulate the economy in excess of what they will cost in debt? 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. So keep pouring money into a broken system instead of fixing it. Great idea. These are not "our" promises. I never made any promise. The choices are not simply “pour money into a broken system” or privatize it completely. There are lots of other options for fixing it. As for the promises made, he’s not talking about you (and you know that). He’s talking about promises made by our government on our behalf. | ||
| Rastro Citizen Username: Rastro Post Number: 598 Registered: 5-2004 |
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. He makes no sense here either, if you could invest your SS tax payments in an IRA instead of SS, you'd have a better retirement income. There is no doubt about that. Actually, he’s saying that private retirement accounts are fine. But SS is not a private retirement account. Though I disagree with his reasoning, because many cannot afford additional retirement savings above and beyond SS. 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. Keep the final lifeline, call it what it is, welfare for seniors. Don't force everyone to use it. Help those that need help, let the rest of us keep our money. Actually, I don’t disagree with you on this. But then you have to agree to additional funding for Welfare to cover these new recipients. Why do I imagine that’s not likely to happen? As for the argument that it’s your money, that argument is not valid as long as we (citizens) have no direct control over what our taxes are spent on. I didn’t want my taxes being used to promote NCLB, and definitely not used in the war in Iraq. 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. If you look at the SS liability as it is right now as debt (which it is) the numbers right now are about the same. Actually, no. It’s a debt that the general account because they borrowed the money from the SS fund. But to the SS fund, it’s a liability, which is different from debt, just as accounts payable is different from debt. And while the costs may be the same (I don’t know enough about that to say one way or the other, and it doesn’t appear anyone truly agrees in the cost), the question is more one of whether it’s the right thing to do. | ||
| Rastro Citizen Username: Rastro Post Number: 599 Registered: 5-2004 |
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. Well, since the deficit is shrinking and the economy is growing, its not that reckless. Not to mention again, that we ALREADY HAVE the SS debt, the government just doesn't call it that. I’m sorry. I must have missed the part about our deficit shrinking. Seems like when our debt goes up, that’s because of a deficit. Our debt is at the highest it has ever been. So much so that we had to raise the debt ceiling (at the BEGINNING of the fiscal year) so that we could borrow enough to keep the government running. And even if the deficit is shrinking, there is STILL a deficit. And it’s a misnomer to call it SS debt. The general fund borrowed money from the SS fund. That was done to make the deficits look smaller. Now those who borrowed the money are saying that it’s debt. Well, sure. If I hold money from you in escrow, then I take that money out of the bank and use it to buy a new car, then I still owe you the money. The fact that I used the money on something other than paying you back doesn’t relieve me of that obligation. But if I hadn’t taken the money on the first place, it would still be there to use to repay you. 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. Huh? higher interest equals a higher rate of return. SS reform can't happen in a vacuum, there still needs to be strong fed monetary policy, and there will be. I believe the higher interest rates Corzine is talking about are borrowing costs. There is always a gap between interest on borrowing, and interest on savings. And when interest rates go up, the market typically goes down. That’s just basic economics. 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. OK, perhaps some of the money in your private account will be mandated to go to LTD and life insurance. Big whoop. If so, that would be great. Nothing has indicated that something like that would be in place, but if it is, that would be good. | ||
| Rastro Citizen Username: Rastro Post Number: 600 Registered: 5-2004 |
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. Yes, very true, but when looked at long term, the market outperforms SS in every way, even when there is a huge downturn. Let us take the risk if we want to. Somehow, I trust someone who’s made their livelihood in the market more than a lay person on something like this. Yes, historically the market has done better than other investments, but many MANY people have said that the market is not likely to show those kinds of returns again (~10% annually) for quite some time. 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. let the maret decide that, there are tons of no and low fee funds. management fees would be minimal, and people could shop around for the lowest fee. Please Mr. Corzine, show me a mutual fund with overhead fees of 20%. It doesn't exist because no one in their right mind would invest in it. Again, I have to defer to someone who knows how these things work. He’s not saying that the fees on the funds would be high. He’s saying the management fees on the ACCOUNTS could be very high, given the small size that many of these accounts will be. If I have $50 in a checking account, and the bank charges $10 a month if my balance is under $1000, then in 5 months I will have nothing in my account. You say management fees would be minimal. Based on what? Every broker, bank, etc. tries to eliminate or minimize low balance accounts. Why? Because they cost more to administer than the company can make by holding the account. As for the market deciding, as we saw with the prescription drug bill, this administration doesn’t want to let the market decide. Otherwise they would have allowed Medicare to negotiate drug prices. Social Security at its most basic level provides a simple guarantee: Work hard and contribute now, and your financial future will be secure. Except it doesn't, as Corzine says above. Agreed. It’s not quite secure, but you’ll be able to have some minimal level of income rather than being out on the street. 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. Except that privatization does provide seniors with more retirement income and actual assetts. Corzine gets an F for this one. Privatization does not provide more income, nor does it increase assets. It gives the POTENTIAL for it. But it also gives the potential to lose everything, which SS does not (in theory). Consider Enron. Right up until it imploded, it was thought of as a decent investment. No investor could have known it would erase their investment. Given the number of corporate scandals recently, especially among what were considered stable companies, it should be obvious there are no guarantees, and having a good investment strategy will not always protect you from market (and extraordinary) downturns. | ||
| Rastro Citizen Username: Rastro Post Number: 601 Registered: 5-2004 |
Sorry about the long-windedness. My fingers are cramping from all that. Consider that your revenge if you actualy read all of the above. | ||
| Michael Janay Citizen Username: Childprotect Post Number: 1433 Registered: 1-2003  |
Rastro, Remember, we're talking about long term investments. 10% in a given year is meaningless. The fact is, and even Corzine will agree that in any 20 year period the market has shown excellent returns for a diversified portfolio. You can take any starting or ending year you like. In a boom or bust. It doesn't matter. Short term fluctuations may make people wary, but those in it for the long term understand that even if the market fluctuates 20% from year to year, over the long term the portfolio grows. Even during this recent downturn, my protfolio managed over 8% return even though some stocks tanked completely, I know others that got over 10%. Diversification and time. The market is VERY VERY safe. The numbers look even better if you look at 40 year returns. No one is saying that people should put all of their money into one stock or even in to plastics. Will there be unscrupulous people preying on the elderly? sure. They are there right now too, taking every check granny gets. As for the deficit, all projections show it is shrinking due to economic growth. And its not a misnomer to call SS debt. It is just that. The government owes several trillion dollars to retiring seniors. This is money it has promised them, regardless of whether they have it or where it comes from. That is debt. No one on the left wants to call it that though. Because if they do, everyone would realize that the costs of privatization ore negligable. As for your comments as follows: This is a laying it on a little thick. Hinders employers from creating jobs? I can’t imagine any employer saying "I need a couple of new employees, but that darn SS tax just makes it not worthwhile." I can tell you that this happens all the time. I have had to make that very choice. The 6.2% payroll tax (and other taxes as well) pushes budgets way up. If it wasn't there we could and would hire many additional employees. I work in a company with 300 employees. the Fica alone we pay would pay the salaries of about 30 additional employees, people we need, but can't afford. Now I'm not saying this contribution would change, and I'm not even advocating eliminating it, but don't think that it doesn't make a difference, because it does. But privatization does not guarantee anything. If you consider the expected return, which takes into account all possibilities, not just the rosiest, private accounts are not that much better, and are not guaranteed. But it DOES! It guarantees you have an asset that is yours to do with what you want. Even if you put your money into a private bank account earning little or even no interest, when you retire you have that nestegg. A person making 30 grand a year puts 10% a year into a savings account, over his 45 year work life that account grows to $135,000 when he's 65 AND thats with NO interest. with just a modest compounding rate he will retire with a quarter million dollars in his account. and it would be HIS! Maybe he'll use it to buy a house or a retirement villa or whatever. Don't tell me that bank accounts are unsafe too. Maybe he will use it to pay for his daughters wedding, or law school, maybe he'll use it to buy an annuity, maybe he'll give it to your kids. Doesn't matter, its his. GUARANTEED. Sure you could take more risk for more potential returns, but a diverse protfolio is very safe over the long term. Far safer than SS. Actually, I don’t disagree with you on this. But then you have to agree to additional funding for Welfare to cover these new recipients. Why do I imagine that’s not likely to happen? I don't know, I would imagine it would be easy if real SS reforms happen. Again, I have to defer to someone who knows how these things work. He’s not saying that the fees on the funds would be high. He’s saying the management fees on the ACCOUNTS could be very high, given the small size that many of these accounts will be. If I have $50 in a checking account, and the bank charges $10 a month if my balance is under $1000, then in 5 months I will have nothing in my account. You say management fees would be minimal. Based on what? Every broker, bank, etc. tries to eliminate or minimize low balance accounts. Why? Because they cost more to administer than the company can make by holding the account. And there are dozens of banks that offer totally free checking regardless of balance. They have to because they need to compete. you've got to remember, these won't be low balance accounts... they will be at first, but not for long. Loads of brokers would love to have a base of those investors, and banks would compete with them to offer the services. Don't you think that banks would jump all over themselves to offer retiring seniors great deals to put the accounts they are withdrawing into their bank? Once again, this is long term thinking. | ||
| Rastro Citizen Username: Rastro Post Number: 603 Registered: 5-2004 |
MJ, well said on many things. Particularly banks. I hadn't thought of them as vehicles for these investments. A few minor things to point out... Banks can't compete on these accounts for long until the FDIC increases their coverage. The $100k limit per person (not per account) will tie their hands at some point. I still believe that these accounts are expensive to maintain, and that costs will eat up a large part of the initial costs, though if people start off in banks and move to brokers, It might alleviate some of this. If the company contribution doesn't change, then there will be no change on the impact that FICA has hindering job growth. If FICA does change, all you're doing is mandating savings, telling people they are required to save money. Though I guess that's what the private accounts after all - forced savings. Now the question, which I'm guessing can't be answered until Bush coughs up some details. What will happen to you when the change takes place? You've built up equity in the SS system. But the gov't can't afford to pay it all out at once to everyone who has built that equity. And if contributions stop (or are reduced to covering current obligations), what happens to that equity? My first post on this subject (I think) stated that I'm not opposed to private accounts. I will admit that perhaps my intense dislike for our current President has led me to have a knee-jerk reaction to what he proposes. I think it's more the way things are being justified, using random numbers, that has bothered me. And the answers you've given me, if accurate, are pointing out to me that my opinions may have previously been clouded. If there is a safety net for those that really need it, and if the options for investors are broad enough that it's not a porkfest for Bush supporters (or anyone, for that matter) then I'll support them. I guess it's time to wait and see what he comes up with. Thank you for reasoned responses, rather than hysterical rants. | ||
| Michael Janay Citizen Username: Childprotect Post Number: 1435 Registered: 1-2003 |
If there is a safety net for those that really need it, and if the options for investors are broad enough that it's not a porkfest for Bush supporters (or anyone, for that matter) then I'll support them. I guess it's time to wait and see what he comes up with. Honestly, I agree 100%. I don't want to screw anyone, or anyone to get screwed. I just sincerely hate the notion that the government is the only vehicle that can prevent seniors from getting screwed. I would also abhor a porkfest for insiders regardless of their political affiliation. I tend to doubt that Fica will ever change, and I don't suggest it, I was just pointing out that Corzines position that SS promotes work is fallacious at best. I'd love to meet one person that works so they will have SS to retire on. Come on. The FDIC insurance is irrelevant. It gives depositors a good feeling, but in reality its useless. Its a long discussion as to why, but for the most part, banks are required to meet certain standards, and those standards basically assure your money is safe regardless of amount. Not all banks can meet the standards mind you... thats why small local banks are going the way of the dinosaur. Major banks don't need the fdic insurance. Most regional banks deposit their money in larger national banks (citibank for example) and the smaller bank monitors the finances of the larger bank closely. Even if the smaller bank goes under, your money is safe and secure in Citibank's account. now, if Citibank went under, that would be a different story, but if that happened, the government would have to bail them out or w worldwide financial crisis would emerge. When the government bails out an institution, ALL depositors are treated equally. So if you have 1$ $100,000, or $100,000,000 it all would be repaid. There is a lot more to it than I'm willing to write about, but if you choose a major bank your money is safe. Now the question, which I'm guessing can't be answered until Bush coughs up some details. What will happen to you when the change takes place? You've built up equity in the SS system. But the gov't can't afford to pay it all out at once to everyone who has built that equity. And if contributions stop (or are reduced to covering current obligations), what happens to that equity? I thought we don't have equity in SS. ;) This is where the tough questions come in. There are many ways to do it, incurring debt is one way, reducing the payments at certain ages is another, tax credits are yet another. Personally I'd like to see the administration say something like "everyone under 40, you no longer have to pay in, but you ain't getting nothing out" Boy, I'm sure the flames will begin from that one. | ||
| Mark Fuhrman Citizen Username: Mfpark Post Number: 1119 Registered: 9-2001  |
Michael: Boy, that would take some balls to say, and you got the wrong administration for that one. SS is seen as an entitlement at this point, and will be very hard to impossible to get rid of (not that I advocate that). I agree with your next to the last point, that is where the hard questions come in, and it is where I start to think that privatization will not work. I am not so upset about the concept--what I am worried about is getting there and the costs involved (socially and economically)--especially if Washington messes it up, which it will. And I am most upset that Bush and his supporters keep skirting these tough questions in order to score easy political points. Like with WMD, I am not willing to trust them on this one. To me, the whole privatization argument is two sides saying different things. On the one hand there are those who say SSI should be a safety net, a floor, a modicum of money to at best supplement other retirement funds. On the other hand there are those, like Bush, who seem to think that it should be a retirement program on a par with IRAs and 401-k's. Why not keep SSI as it is, with reasonable changes to help with long-term solvency, and change tax laws to encourage employers to pay more into self-directed employee retirement accounts? Perhaps change FICA or some similar idea. In other words, why do we have to screw around with SSI when there are other vehicles available to encourage better, more flexible retirement funding? | ||
| Chris Prenovost Citizen Username: Chris_prenovost Post Number: 241 Registered: 7-2003 |
Rastro & Mark Fuhrman: You guys are making way too much sense. Could we please go back to the screaming rants with little or no facts, and a lot of personal invective? This isn't the MOL I know. But seriously. . . an administration that inherited a $320 Billion dollar SURPLUS, and turned it into a $450 billion plus deficit cannot be counted on (pardon the pun). I am a registered republican, but this administration is the most inept, incompetent leadership we have seen since Carter. But they are very good at politics and image. | ||
| Michael Janay Citizen Username: Childprotect Post Number: 1436 Registered: 1-2003 |
Why not keep SSI as it is, with reasonable changes to help with long-term solvency, and change tax laws to encourage employers to pay more into self-directed employee retirement accounts? Because it already costs a fortune for crappy benefits. Its a system that by definition cannot sustain itself, and one that doesn't even offer enough benefits for most anyone to live on. YOU are paying a lot of money in to it. Money you will never get back. And now you want employers to pay more in? Like I said, if you could just save the money you and your employer put in to SS in a bank, you'd be far far better off at retirement. Fica costs the US jobs. Higher taxes hurt the economy. Instead of keeping SSI as it is, lets just scrap the system altogether. offer everyone over 50 an equal slice of the current trust fund as a one time lump sum payment and be done with it. Then eliminate the limit on IRA and 401k contributions. No costs to that at all. It will piss off many people, but so what. It would boost the economy tremendously, and most people would be able to save the money and have a much better retirement that they would with SSI. | ||
| Tom Reingold Supporter Username: Noglider Post Number: 5114 Registered: 1-2003  |
When you put it that way, I see that you are right that FICA costs society jobs. The benefit to that cost is that retirees (and orphans and disabled) get benefits. I wouldn't have it any other way. Unemployment is low enough most of the time, even with FICA set as it is. Chris, it's always nice to hear a Republican criticize the Bush administration. For what it's worth, I criticized Clinton when he was in office. | ||
| Chris Prenovost Citizen Username: Chris_prenovost Post Number: 242 Registered: 7-2003 |
Michael Janay: You make so many erroneous statements and glib assumptions that I hardly know where to begin. Social Security has 'crappy benefits'? Try telling that to a guy whose Enron or Airline pension has vanished in a flash, or who was too poor to save anything and who relies on Social Secutity as his or her sole means of survival. The current system was designed as an anti-poverty system during the great depression to ensure that retired workers would not starve during their retirement. And it has achieved it's stated purpose. And according to any unbiased actuary you can find, the system is solvent and will remain so for the next fifteen years. And your argument that higher taxes hurt the economy is backwards. Deficits hurt the economy, and that is why we are now in the mess we are in, courtesy of the current administration and their mantra that, in the words of Vice-President Cheney: "deficits don't matter". They do. They cost a mountain of interest, paid to the foreigners who finance our twin deficits. Offer everyone a lump sum of the current trust fund? A lump sum from a trust fund that does not exist? There is NO crisis in Social Security. There IS a crisis in the federal deficit, which Bush created. Let him and his minions solve that one (hopefully by cutting spending) before they 'solve' the imaginary social security crisis. | ||
| susan1014 Supporter Username: Susan1014 Post Number: 340 Registered: 3-2002 |
Micheal, Careful, that's my money you are giving away...we're in our 40s, and have paid into SS for years, expect it as a minority paort of our retirement planning, and now you want to hand out money (from a theoretical trust fund) to the 50+ Baby Boomers and leave us to start over for that portion of our retirements. (You wouldn't happen to be one of those 50-somethings would you?). Kudos to the others on this board with more understanding of the issues | ||
| cjc Citizen Username: Cjc Post Number: 3004 Registered: 8-2003 |
Mark -- saying only have employers pay more of the FICA tax doesn't take into account that FICA is paid entirely by the employee. Ask any self-employed person, as they pay the 12+% entirely. The cost of hiring someone isn't their salary, benefits plus 6% -- it's all that plus 12%, except the employee doesn't see that 6%. What's 'reasonable' about increasing taxes to prop up a system that demographically can't work, and going back to prop it up again and again and again and still not being able to deliver the benefits it promises given the way it's currently constructed? And Chris - higher taxes don't hurt the economy? What planet are you on? Taxation levels in Europe are stunting it's growth. They're reeling from a bloated welfare state, benefits they can't deliver and an inflexible, union-heavy employment situation. It was quite telling that Democrats didn't advocate raising taxes to help us through the recession of 2000, and Kerry's economic plan of higher social spending wouldn't have balanced a budget either. To say there's no crisis/problem with Social Security is naive. 70% of the country knows otherwise to believe current polling. Even Clinton knew things had to be changed. I don't think that raising taxes to provide a lower benefit at that will sell well. | ||
| Michael Janay Citizen Username: Childprotect Post Number: 1437 Registered: 1-2003 |
Chris, Sure you're a republican. Social Security has 'crappy benefits'? Try telling that to a guy whose Enron or Airline pension has vanished in a flash, or who was too poor to save anything and who relies on Social Secutity as his or her sole means of survival. The current system was designed as an anti-poverty system during the great depression to ensure that retired workers would not starve during their retirement. And it has achieved it's stated purpose. Enron, the last grasp for straws of the truly desperate. Yes, people lost money in enron, those that invested their total 401K into Enron lost big time. So what? That was a risk they took. Sucks for them, and it was fraud. They should have diversified their investments as any financial planner will tell you to do. But bvelieve me, they will tell you just how crappy SSI benefits are too. Go right ahead and ask ANYONE who was too poor to save anything and who relies on Social Secutity as his or her sole means of survival. They'll tell you just exactly how crappy the benefits are. Corzine said it in his letter. no one can live off of SSI. Now add in that in 15 years the system will be insolvent and you have a crappy system that no sane person would invest in given the choice. You're really funny trying to pass yourself off as a republican and stating "And your argument that higher taxes hurt the economy is backwards." Its laughable on its face. Deficits, especially in a time like this of war and recovering from a recession are the fiscally prudent thing to do. They don't hurt the economy, in fact they economy grows, as it has been growing at a record pace once the real Bush tax cuts took effect. So what mess are we in? Oooh a big budget deficit.. waa waa. GDP is growing, inflation is in check, unemployment is incredibly low... what else do you want? There is no crisis in SS... thats also laughable. Its a system that gives less than 1% returns, and as you pointed out will be insolvent in 15 years! But of course you Dems now claim there is no crisis, when and if a dem president were elected, you'd scream how GWB did nothing and how now we need to raise taxes to avert the impending crisis. A president FINALLY wants to fix a seriously broken system, and you complain that its not broken... wake up and smell the coffee, it is. Right now, SS is running a huge surplus... in fact, robbing the SS surplus is how Clinton managed to show a budget surplus. Social Security began running a surplus in the mid-1980s. The surplus in Social Security revenues was invested in special government bonds, and the money was spent by the government on general operating expenses, retiring the federal debt, or both. Call in the bonds, cut it up, give it out and be done with it. And Susan, I'm 36. I'd happily give up any and all future claims to benefits if I could just invest the SS taxes I'm ALREADY paying on my own. It'd make for a much better retirement for me and if you're just in your 40's for you too. | ||
| Chris Prenovost Citizen Username: Chris_prenovost Post Number: 244 Registered: 7-2003 |
Bush is trying to 'solve' a problem he created. Republicans stand for fiscal prudence and small government. The idea that the government that governs least is the one that governs best. Or have a lot of alleged republicans forgotten that? Upon taking office, a good republican would have used the surplus he inherited to pay down the debt. That would have been a profoundly wise long term choice. And we would not have a social security 'problem'. Bush put through a tax cut that sent the deficit into the stratosphere. At the same time, the government got bigger and bigger, so that now the feds are burning through a record percentage of the GNP. To summarize, we would not have this problem if Bush had left well enough alone. And throughout this, the democrats did nothing. I would love to be a partisan, but it's rather difficult in these circumstances. | ||
| Face Citizen Username: Face Post Number: 486 Registered: 5-2001  |
Here's your reality. You graduate from college. You begin your first real job. During the orientation process with your new employer someone steps in front of the group of new employees wearing a little smiley-face button with FICA printed on it. This person tells you that he is going to be in the payroll office every single payday, and before you get your paycheck he is going to take about 14% right off the top. That's 14 cents from every dollar you earn.** Mr. FICA then tells you that the government might, though it is not obligated to do so, let you have some of that money back if you live long enough. If you die before the government starts paying you this money back the government will keep it. You cannot leave it to relatives or charities through your will. Mr. FICA also tells you that politicians are going to spend that money ... all of it ... as soon as they get their hands on it. If things get so bad that there isn't enough money coming in as FICA "contributions" to pay the people who managed to live long enough to get some back, they will simply pass a regulation saying that you have to be older still before you start getting checks. You raise your hand to ask a question. "Why can't I put that money in some retirement account that I own and manage? After all, I did work for it. I did earn it." Mr. FICA is very unhappy with you. What's your problem? Don't you know that there are politicians in Washington, both Democrat and Republican, who are sitting there waiting for that money? They need that money to spend on projects in their home districts so they can tell the voters what a great job they're doing! They need that money to make more and more people dependent on them and dependent on government for their lifestyles! How are these politicians going to get their hands on that money if they allow you to put it into an investment account that you own and control? You're young, you're idealistic. You'll learn. Politicians are telling us that we just can't privatize our Social Security accounts because, they say, it would cost too much. Cost? How? You just heard it. That money that you earned sitting in your private investment account is money that the politicians can't spend to buy votes. You say that they should just cut spending? What are you, nuts? Cut spending? When have you ever known politicians to cut spending? Here ... let me just give you one example. They recently had a bit of an audit of the nearly $600 million in homeland security funding in Texas. This is money given to the State of Texas to be spent on homeland security matters. The audit disclosed that homeland security funds were used by buy a trailer that was used to haul souped-up lawn mowers to lawn mower drag races. I guess these lawn mowers were going to be used to mow down the terrorists. A Dallas Morning News investigation found that some other homeland security funds were used in Texas to buy equipment for traffic stops, conduct drug investigations, and some of the money was even spent for community festivals, whatever they are. Now if you were to propose that spending on homeland security in Texas be cut by an amount equal to that amount spent on festivals, drug investigations and trailers to haul drag-racing lawn mowers, there would be pure hell to pay. You would be accused of engaging in a partisan attempt to cripple our homeland security efforts just to enrich Wall Street brokers. Oh yeah. The Wall Street brokers. These people are viewed, perhaps accurately, as rich. To the left that means that they're evil. If people are allowed to invest their own money that they worked for and earned into their own privately owned retirement accounts then they will turn to brokers to invest those funds in our capitalistic marketplace. Brokers generally charge for these services. The left can't stand this. How dare investment brokers make anything investing money that should be in the pockets of politicians being spent to buy votes. The real pity here is not so much that politicians are fighting so hard to keep the flow of vote-buying funds strong, but that the people of this country, especially the younger people, are so complacent about it. How can you be optimistic about the future of our Republic when our population allows an atrocity like this to continue! But .. what am I thinking? How can I realistically expect younger people to be paying attention to this wholesale thievery when Jenn and Brad are splitting! ** Please don't show your ignorance by telling me that you're only paying a little over 7% and your employer "matches" your "contribution" with the same amount. Uttering those words only proves that you're just as stupid as the politicians believe you to be. Credit Neal Boortz: | ||
| Rastro Citizen Username: Rastro Post Number: 606 Registered: 5-2004 |
Face, nice cut and paste, but Boortz is wrong on a few counts, and exaggerates things on others. First, yes, you do only pay 6.2%, not over 7%. The amount over 6.2% is Medicare, not SS. Your employer does pay the other half. Don't tell me you're naive enough that you believe your employer would give you that 6.2% if only the gov't would take its hands out of their pockets. When you accept a job offer for $100k, that's the amount of the offer, not (roughly) $106,200 minus the employer's FICA portion. FICA is a cost of doing business. I'm not saying it's necessarily good, but it's not coming from the employee's pocket. Boortz is showing a profound lack of understanding of what the SS system is. It is not a self-funded retirement program, nor was it intended to be. There is no direct link between what you put in, and what you get out. You want to think of it as a tax? Fine, if that will help you understand that you have no more "right" to direct SS funds than you do to direct military funds. Again, I'm not saying it's right, just that that's the way things are. Now let's see. Texas. Who's the Governor again? What is the political makeup of the state legislature? Mostly Republican you say? Can't be... How could a Republican squander Homeland Security funds? As for Wall Street Brokers, I don't know many people beyond the fringe left (well left of the Democratic party) that believe being rich equates to being evil. And most Democrats (as well as Republicans) I know have retirement plans with brokerage firms. In fact, many of the people in the Financial Services industry that I know are the most fervently against this kind of privatization. They want a few fat cats to manage, not ten million tiny accounts to deal with. Imagine the broker who has to spend the day answering calls from (pardon the stereotype) blue haired ladies panicking that Walmart has gone down $0.03 in the past three days. Yes, there are ignorant young people. There are just as many ignorant older people. ANd just as many of those older people were ignorant when they were young. But of course, Boortz' readers tend to be older, so it's ok to slam kids for not being financially savvy. In reality, I think more kids undertand money these days than their parents did at their ages. |
