Social Security Reform - Today's News............

[markplus4]

Can I assume that those who are vehemently shouting down private accounts have no money currently invested in the stock market?

[BigMoneyJim]

Quote:

Can I assume that those who are vehemently shouting down private accounts have no money currently invested in the stock market?

See my comments two posts above yours. Could work great for me, but it would screw over a lot of others. At least now scammers have to wait until pigeons are old and senile (or just ignorant) to rob them of their SS checks. Under privatization you're forcing (?--or at least strongly encouraging) non-savvy investors to set aside money and invest it somewhere, and I can imagine a lot of situations for the non-savvy investor would be better off just spending the money than investing it poorly.

Furthermore I've paid 15+ years into SS under the plan that young workers will be paying into it when I'm drawing benefits. If they change the rules on me now it's not clear to me how that affects my "ROI" from the past 15 years; I strongly suspect I would get screwed there under the new plan, but at least I'm planning for that contingency.

[Hyperborea]

Quote:

Can I assume that those who are vehemently shouting down private accounts have no money currently invested in the stock market?

A pretty bad assumption. *Probably about equivalent to claiming that "those who are vehemently touting private accounts are those with their hands in the government pockets ready to make obscene sums of money from the fees that these accounts will generate".

A more likely assumption is that many who are against the private accounts don't want to pay the large amount of money needed to finance the change over and then also be required to pay another large amount in 30 years to bail out the old folks living under bridges and eating from dumpsters. *Then there's the whole moral issue of looking out for your "brother" - not a very popular view in these dark right wing fundamentalist times.

[charlie]

Has anyone done the math to see if taking the cap
off of SS tax will solve the long range problem?

Do any of you high wage earners out there want
to volunteer?

Do any of you grandparents think your babies will
be better off with the existing system? Or would
you just rather do nothing and let them solve our
problem?

Do any of you ER's spending down savings and
IRA distributions want to pay a tax on already
taxed money?

Yes this is an explosive topic .... depends on whose
ox is being gored.

IMHO, those who ignore the problem are just making
it worse. Isn't that one of life's fundamental lessons?

What we need to do is really think this through to
come up with the best compromise fair to all (or
equally unfair) and cool it on the emotional rhetoric.

As for the Scott Burns article, he is at least willing to
take a stab at it.

Don't throw out the baby with the wash!

Cheers,

Charlie

Well, most experts on the topic agree that medicare is more of a problem than SS. The problem is already here.

When Clinton tried to tackle that end of the problem, the insurance companies went to work with their 'Harry and Louise" commercials. One of the most successful lobbying campaigns in history. They like the status quo.

The interesting thing was that in 1994, medical insurance costs were constrained because of the ongoing debate (The insurance companies did not want to kill the Goose that laid the Golden egg). Lately no debate and medical costs are free to increase.

The big question is why aren't we talking about Medicare when it is a problem today, intead of a future problem with Social Security?

Chuck-Lyn,

Great comments - as for cries of "this isn't a crisis," I would think that most people in this group would know that little tweaks or changes early on can have large impact 20 or 30 years down the road. I.e. if you change your consumption early on and save that money, there's that much more later on.

As for attacking the messengers and their motives, I believe this is one issue that all sides need to be given the benefit of the doubt. History is replete with both US political parties 'screwing' the populace. I believe that can be attributed to "power corrupts and absolute power corrupts absolutely."

I for one am more of an individualist and would prefer to control my investment. In this case, it seems that a very small percentage of it would be available for personal investment. However, I am willing to listen to different ideas. I don't think that waiting for 34 years and then saying we need to fix it is smart, however. Reminds me of the people who post here with no assets who want to retire.

Bridget aka Deserat

[charlie]

Hey CT, I will agree to work on the Medicare problem
if you will agree to work on the SS problem.

Deal?

Charlie

[unclemick]

Hmmm - one 'could do the right thing' - give a 6th or 8th grade math whiz/computer geek a set of uncorrupted data and let him solve the problem.

Never will happen - and probably would require a court restraining order to keep his parents off his back.

[LEX]

Hyperborea:

Is your moving icon a secret photo of George W. flashing us as a means to divert attention away from the social security fiasco?

Perhaps just this very moment he can be found prancing around the oval office wearing his speedos, singing show tunes, and cowboy boots, laughing at those that thought he was really just another silly cowboy. "Hey, Condi, guess what I'm wearing under my Tux during the inaguration?

Great special effects...

[sgeeeee]

Quote:

Has anyone done the math to see if taking the cap off of SS tax will solve the long range problem?

Yes. People have looked at that. Of course it depends on the assumptions you make about the economy. In fact, under the most optimistic assuptions about economic performance, there is no social security short-fall problem. Under nominal assumptions, the problem is short term and disappears in a 75 year time-frame.

So, removing the cap reduces the relatively minor short-term short-fall except under the most pessimistic assumptions.

Quote:

Do any of you grandparents think your babies will be better off with the existing system? *Or would you just rather do nothing and let them solve our problem?

With all due respect, Chuck-Lyn, there are more than two options. This is exactly the argument that the current administration is trying to make -- Either do what we want to do or face disaster. In reality, the system can be preserved with relatively minor tweaks. I am in favor of exploring these options first.

Quote:

Don't throw out the baby with the wash! *

I certainly agree with this sentiment. Social Security has served as an effective safety net for millions of Americans for several decades. Today, nearly half of all Americans over the age of 65 would fall below the poverty level if not for social security benfits. And younger generations are saving and investing even less than their parents and grand-parents. In the future, social security benefits are likely to be even more important to the elderly of this country. Before we throw the social security baby out just because of some possible short-term short-fall bathwater, let's look closely at the numbers.

[Michael]

Quote:

The big question is why aren't we talking about Medicare when it is a problem today, intead of a future problem with Social Security?

I suspect Medicare will be next on the agenda, but you might not like the solution. The template for Social Security private accounts is Chile, which has fully private accounts. Shortly after Chile privatized their Social Security system, the privatized their Medicare system. 10% of a worker's wages goes into a Social Security private account, and another 10% goes into a private Medicare account. If you run out of money in your private Medicare account due to high medical costs, tough.

Quote:

I suspect Medicare will be next on the agenda, but you might not like the solution.

Bush is officially a lame duck today. The pundits today said that if folks don't quit dying in Iraq in the next couple months, his domestic agenda does not stand a chance. He sold us a bill of goods and has not come through yet.

Bush created the 'Iraq Crisis', *Congress will not let him create a Social Security or Medicare crisis. Even his only party will be scurrying like cockroaches. Expect the 2008 presidental debate to highlight Social Security. The Presidential Campaign will start in 2006. Even GOP strategists said today that a Tax Overhaul is probably off the table.

Bottom Line: Bush has to clean up the Iraq mess in about 6 months. - This looks almost impossible from where I sit.

Expect Bush to command such important tasks in the next few years of when the nations flag will be flown at half mast.

[RAE]

Yeah, I think you're right, Cut-throat.

Tim Russert on NBC news tonight quoted some recent polling numbers........something like 52% of the population now thinks that getting rid of Saddam Hussein was not worth the price we paid for it (versus 40% who think it was). And on SS, something like 65% said they do not support a major overhaul, including privatization.

I would be very surprised if Bush is able to do what he wants to do with SS. Lots of Republicans in Congress have to think about their re-election chances in a few years, and they are not going to commit political suicide on behalf of King George.


Bob

[Michael]

Quote:

Has anyone done the math to see if taking the cap off of SS tax will solve the long range problem?

An article in the WSJ shows that raising the cap from 90k to 140k would solve 43% of the problem. Increasing the payroll tax 1/4 point for employer and employee would solve 24% of the problem.

http://online.wsj.com/article/0,,SB1...ys_us_page_one

Why have a cap at all? Why shouldn't everyone in this country pay the standard Social Security tax, regardless of their salary? To me this is a no brainer.

[Ol_Rancher]

I suppose the reason for 'any cap at all' might be that there is a cap on SS annuity payments. If memory serves me, last year the highest monthly SS annuity was a bit over $2400.

To someone earning $200,000, a year this would be unjust.

Although I was a public school teacher, I object to 'means testing' Social Security. The original promise clearly stated that the program was not a welfare program.

A conservative to the right of my political leanings would identify such a change as 'creeping socalism' and would have a strong case.

[JWV]

Quote:

under the most optimistic assuptions about economic performance, there is no social security short-fall problem. *Under nominal assumptions, the problem is short term and disappears in a 75 year time-frame.

Thanks, SG, couldn't agree more.

Of those people who have no interest in investing for themselves now, I believe few of them will change. Let's face it, when you make minimum wage and both adults are working outside the home and you're trying to take care of children, it leaves little time for perusing a prospectus. Reading the ads for the best place to buy cheap bread are about the extent of financial planning.

Judy

Quote:

To someone earning $200,000, a year this would be unjust. *

Ol Rancher,

Since someone that earns over $200K per year uses a lot more of the public infrastructure than someone that makes 10K per year, it's not unjust at all.

Owners of companies that get their employees trained by the Public Education System, should have to help pay for their retirements as well - Most of these owners no longer have pensions for their employees. They are also using Public infrastructure to pay for the teachers retirements that trained their employees.

The more you earn, the more you suck resources out of the public. - And since we have been running deficiets lately, the rich are not paying their fair share.

I could go on and on. Airports, Roads etc. are used disproportionately by those earning large incomes. The subsidies have only gotten fatter and fatter lately.

[charlie]

CT,

Arguing with you is about like walking into a buzz saw,
but I can't buy your comment that high dollar wage
earners use more of the public infrastructure.

Who are more likely to send their kids to private schools? Don't they pay school taxes on their
fancy homes?

Can a high wage earner drive more than one car at
a time?

If a business man owns a fleet of trucks does he
not have to pay tonnage fees and gas taxes in
proportion to his highway usage?

Are high wage earners likely to use the emergency
rooms of community hospitals in lieu of visiting a
doctor?

Are the high wage earners likely to live in high crime
areas thus demanding a higher portion of police
protection?

Are high wage earners most likely to be crack dealers
or users thus increasing the need for police and
EM support?

Finally, who is paying for all this infrastructure? The
poor? ..... not likely.

Cheers,

Charlie

[charlie]

P.S.

Are high wage earners overcrowding the court system?
(although I would welcome more prosecution of
white collar crime.)

Do high wage earners use public defenders?

Are fires more likely to start in high wage earner
homes or in the homes of poor people who
don't have central heating systems?

In health epidemic situations who is more likely to
need help from the public health system? Have
you ever checked to see if high wage earners
are more likely to have AIDS? Do high wage earners
use public hospitals to abort their young or do
they use private doctors?

When the weather gets God awful cold or hot do
high wage earners flee to the public libraries or
tax supported missions?

Yes, they use more gas, electricity and water but
those commodities are taxed in proportion to use.
Should they have to pay a premium? I think
the total demand for these services is dominated
by low wage earners ..... don't you?

Jeez Louise, CT -------- soak the rich, they can
afford it.

Charlie