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Old 10-20-2010, 01:37 PM   #21
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There's quite a conundrum here. On one hand, we can't really afford to keep the current deal going at the current retirement ages -- but on the other hand, increasing the retirement age would make the unemployment problem even worse.
Meh. Barely. There aren't lots of 23-year-olds waiting for a 59-year-old to move on. It's either a 50-level cascade during which something will get optimised, or the 59-year-old should have been downsized years ago but nobody had the courage.
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Old 10-20-2010, 02:01 PM   #22
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I should be entitled to Social Security based on the rules that were in place during the period that I worked and paid in. Not some after-the-fact rules.
That's an interesting theory, and would probably work if the taxes paid in were actually saved in some fashion. They weren't. Just like today, social security taxes went in to the general fund and were used to help pay for expenditures in the year the tax was collected.

So what you're arguing for is the ability to use your historic social security taxes to pay for historic benefits (in the form of lower historic income taxes or higher historic spending), and also for current and future Social Security benefits. Sorry, you can't spend the money twice, and seeing as how it was already spent once . . .
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Old 10-20-2010, 02:02 PM   #23
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From Wiki... but assume it is right..


You can see that you could cut 100% of SS and Medicare and get the budget balanced.... nobody wants to do that (well, nobody that is not a nut case)...

But, with a $1.4 trillion deficiet two years ago and $1.2 this year.... we NEED to do something...

Anybody know what the other mandatory spending is for?


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Old 10-20-2010, 02:06 PM   #24
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Anybody know what the other mandatory spending is for?
US Federal Budget - How the FY 2011 Social Security Budget and Health Care Budget Affects the US Economy

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All other mandatory programs - $619 billion. These programs include Food Stamps, Unemployment Compensation, Child Nutrition and Tax Credits, Supplemental Security for the Disabled and Student Loans.
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Old 10-20-2010, 02:22 PM   #25
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That's an interesting theory, and would probably work if the taxes paid in were actually saved in some fashion. They weren't. Just like today, social security taxes went in to the general fund and were used to help pay for expenditures in the year the tax was collected.
So my thought is; let whatever programs took the SS money be cut to reimburse SS for money pilfered from it's coffers.

We invented a TRILLION dollars to bail out Wall Street, Detroit, banks, etc., let's have them pay back the money in spades and put it into social security.

The monies paid in for SS, Medicare, etc should be our right. If you paid into an IRA, you expect that money to be yours, not dispersed to those who chose not to fund one.

Lousy government.
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Old 10-20-2010, 02:31 PM   #26
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The monies paid in for SS, Medicare, etc should be our right. If you paid into an IRA, you expect that money to be yours, not dispersed to those who chose not to fund one..
The key word being "should" as opposed to what actually is going to happen.

If it makes you feel better, quit thinking about SS as an insurance program where you pay money in and get money out. Think about it as welfare for those that don't have anything and would starve otherwise.
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Old 10-20-2010, 02:45 PM   #27
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If it makes you feel better, quit thinking about SS as an insurance program where you pay money in and get money out. Think about it as welfare for those that don't have anything and would starve otherwise.
Or alternatively, as a way to get people out of the workforce so the next generation has jobs to fill.
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Old 10-20-2010, 02:48 PM   #28
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The monies paid in for SS, Medicare, etc should be our right. If you paid into an IRA, you expect that money to be yours, not dispersed to those who chose not to fund one.
But that's the joke . . . people on the verge of collecting SS already spent the money, mostly on themselves! The people who "chose not to fund" the SS "trust fund" are the very same people who think they are entitled to payments from this pile of money that doesn't exist.

Here is an example to illustrate . . .

Social Security takes $10 from Citizen A in payroll taxes. That $10 goes into the government's general revenue fund. Mr. Nice Politician says "Hey look, we have a $10 surplus! Why don't we spend $5 on current services and $5 on tax cuts for everyone?" Citizen A votes for the Nice Politician and everyone celebrates their good fortune. Mr. Nice Politician uses the $10 in SS "surplus" to fund all the goodies, and gives the SS trust fund an IOU in return. Many years later, it's time for Citizen A to retire, but low and behold, there is nothing in the trust fund to pay for his retirement benefits but IOUs . . . who's to blame? Citizen A who already got $10 in benefits for the taxes he paid, or "Still Too Young to Vote" Citizen B who neither voted for this system, nor got any benefits from it?

And if we want to be accurate, Citizen A actually voted for $11 or $12 in tax cuts and services considering the general fund deficit we've been running for several decades now. Given the circumstances, it's kind of hard for Citizen A to argue he has a right to anything other than the clean-up bill.
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Old 10-20-2010, 03:11 PM   #29
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Old 10-20-2010, 03:39 PM   #30
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Or alternatively, as a way to get people out of the workforce so the next generation has jobs to fill.
If today I was given a lump sum payment equal to the approximately $300K paid into SS by me and my employers for-benefit-of me, I would free up a job tomorrow.
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Old 10-20-2010, 04:18 PM   #31
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The monies paid in for SS, Medicare, etc should be our right. If you paid into an IRA, you expect that money to be yours, not dispersed to those who chose not to fund one.

Lousy government.
Did you get that in writing? I always figured my SS tax was going to pay someone else's retirement (not knowing it was going into the general fund), and hope that someone further down the line would fund my SS benefit. That's how it started, right? If you didn't understand that it worked that way, whose fault is that?

My IRA, on the other hand, has my name on it. I have a different expectation on getting that. It's mine.
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Old 10-20-2010, 04:28 PM   #32
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If it makes you feel better, quit thinking about SS as an insurance program where you pay money in and get money out. Think about it as welfare for those that don't have anything and would starve otherwise.
But that is not the way it was pitched originally. It was to be a retirement fund, and mandatory. To support you in old age. Not a fund to be collected and doled out to welfare.
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Old 10-20-2010, 04:33 PM   #33
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Did you get that in writing? I always figured my SS tax was going to pay someone else's retirement (not knowing it was going into the general fund), and hope that someone further down the line would fund my SS benefit. That's how it started, right? If you didn't understand that it worked that way, whose fault is that?.
Well, now that we know that, it then is time for folks presently working to take on the same responsibility I took on, and support me. I want to collect Social Security the same way the generation preceding me did.
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Old 10-20-2010, 04:36 PM   #34
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Let's hope we follow some model other than Europe's proven failed system.
How much time have you spent in Europe ? Which failure are you describing?
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Old 10-20-2010, 04:36 PM   #35
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But that is not the way it was pitched originally. It was to be a retirement fund, and mandatory. To support you in old age. Not a fund to be collected and doled out to welfare.
What you say is true.

However, that won't change what is going to happen.

You'll probably get something, in my opinion. It just won't be what you thought you'd get.

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I want to collect Social Security the same way the generation preceding me did.
You too ? get in line
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Old 10-20-2010, 04:44 PM   #36
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How much time have you spent in Europe ? Which failure are you describing?
18 years.
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Old 10-20-2010, 04:46 PM   #37
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But that is not the way it was pitched originally. It was to be a retirement fund, and mandatory. To support you in old age. Not a fund to be collected and doled out to welfare.
Certainly the "welfare" components had been added by 1939.
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Old 10-20-2010, 04:46 PM   #38
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18 years.
Which failure?
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Old 10-20-2010, 04:51 PM   #39
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I don't expect the USA to be in Britain's position any time soon - maybe 2070. I'm guessing that after the mid-east wars are ended there will be deep military cuts.

But we can look towards Europe for some of our future. There will be a VAT (around 2025?) that will not (like it didn't in Europe) solve the debt/deficit issue. Then as in Europe there will be increased taxes and fees.
Something to add to your retirement planning.
FYI,
I think people now 50 will get the current SS benefits - that takes us to about 2022. Also, the VAT in 2025 should hold off some of the drastic cuts in other Federal gov't pensions etc, people are talking about. State gov't will be cut back around the same time as SS.

Here is my thinking.
2015 current recession bottoms out
15-20 economy improving but politicians not willing to increase taxes for fear of it stalling (Tax the rich will continue)
20-25 - income taxes increase & talk and implementation of VAT
25-70 VAT puts off drastic cuts (European VAT has been in effect for about 25-30 years).

So income tax increases and VAT are more likely for those 50 and older than a reduction in SS etc.

If the USA continues to get embroiled in wars - all bets are off.
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Old 10-20-2010, 05:01 PM   #40
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Dex:

Add to your analysis:

The Boomers retire en masse more than doubling outlays in SS/medicare

$25B+ of debt at 2020 interest rates requires $1B+/year just for interest

High levels of debt induce other countries to throttle back loans to US. Interest rates skyrocket, a crisis in what gets paid ensues.

Increased taxation drives down economic performance into a cycle of desperation.
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