Perry no longer thinks SS is a Ponzi scheme.

[mhaze]

....I advocated that when lifting the earnings cap, rates should fall. This puts more money in the pockets of lower wager earners to spend, and because it is a relatively small amount when received per paycheck, it will not alter spending decisions the way rebates or other tax-cutting stimulus plans do.

The problem with that is simply that SS payments are capped, and there is a ratio between payments, and earnings. Generally that's figured for the 40 highest earning quarters of employment.

So there's a sort of "fairness" in the existing and traditional earnings cap, for rich and poor alike. Eliminating the cap dramatically changes the nature of SS, yet the progressive blithely advocates this, while voicing alarm at Perry's wanting to have an honest discussion about SS. Quite curious.

I'ts either a program for people who work, and who thereby intend to put money aside for retirement, either in SS or in several buckets, or it's a charity program.

It's not Perry that's destroying SS as it's been historically. It's the liberal progressive, such as are commenting on this forum, who would do so.

For example: In the past decades, working professionals who had an IRA, perhaps a company 401k, and of course the SS, found that SS provided a portion of the retirement income. Now we are seeing (A) a tilt, as voiced on this forum by such as JoetheJuggler and others, that additional "means testing" may be applied to recipients.

Of course that would likely mean that an individual who had an IRA, and who had a 401k, and who paid SS, would likely not get SS benefits. This moves SS out of the category of "an average working-man's benefit" and into the category of "a charity". In turn that means that Ichabod's classroom peers who indicated they didn't expect SS benefits were likely right.

They sensed the collectivist and socialist tilt in progress. Or perhaps they simply realized the farcical nature of a government that was broke making promises.

 

[Drachasor]

Your comment seems to show no understanding of post #393, which is first month, first semester undergraduate finance level.

Taking it from another point of view, shortly SS will consume all revenue collected from 1040 returns. Nothing left for any other stuff - foreign aid, R&D, military...

Your stateroom in the Titanic is only tilting a little bit? And everytime it tilted before, it just swung back the other way in a little while? Everything is FINE.

That's simply untrue. It won't need that much money by any stretch of the imagination. It will be 2019 before it needs a little more money than what it has coming in through taxes, but that's not remotely the whole of the federal budget. All experts agree it will remain fine until 2038 or later, whereupon benefits will need to go down to 80% of what they should be and slowly go down further over time. That's a LOT of time to fix things.

 

[mhaze]

That's simply untrue. It won't need that much money by any stretch of the imagination. It will be 2019 before it needs a little more money than what it has coming in through taxes, but that's not remotely the whole of the federal budget. All experts agree it will remain fine until 2038 or later, whereupon benefits will need to go down to 80% of what they should be and slowly go down further over time. That's a LOT of time to fix things.

Bull. Don't think you can refute simple and obvious calculations based on facts with claims of experts who know better.

You must refute the calculations, or their premises.

Background facts are well enough presented here.

http://www.cbo.gov/doc.cfm?index=12039

 

[leftysergeant]

The problem with that is simply that SS payments are capped, and there is a ratio between payments, and earnings. Generally that's figured for the 40 highest earning quarters of employment.

Not a problem. The cap and the rate are addressable by simple egislation.

It's not Perry that's destroying SS as it's been historically. It's the liberal progressive, such as are commenting on this forum, who would do so.

Bull flops. Means testing is just one of the two surest ways to save the system, and is only put forward because the crying baby high-earners are too stubborn to go for the best answer, which is removal of the cap.

They sensed the collectivist and socialist tilt in progress. Or perhaps they simply realized the farcical nature of a government that was broke making promises.

Or they were served massive helpings of Friedmanite crap all their lives.

 

[mhaze]

Bull flops. Means testing is just one of the two surest ways to save the system, and is only put forward because the crying baby high-earners are too stubborn to go for the best answer, which is removal of the cap.

All you've done is define "Your Way" as "Saving the System" and...

"Someone else's way" as "Destroying the system".

but "Your way" really does destroy the system.

I assume you are a champion of the average working man, in the Longshoreman's Union and such?

Take a guy who's paid his dues, and he's got a pension coming. Plus social security, he thinks he'll do okay in retirement.

Now "means-test" him. Suddenly all his planning for decades just went out the window, because you've changed it into a low income give away charity program.

Not something that benefited the average guy. But something that benefited SOME of the average guys and not others.

 

[IchabodPlain]

The problem with that is simply that SS payments are capped, and there is a ratio between payments, and earnings. Generally that's figured for the 40 highest earning quarters of employment.

That isn't a difficult reconfiguration.

So there's a sort of "fairness" in the existing and traditional earnings cap, for rich and poor alike.

No, there isn't. If I make less than the cap, 100% of my income is subject to the tax. If I make $1,000,000, less than 10% of my income is subject to the same tax. This regressive structure necessitates that people earning less than the cap pay a higher proportion of their wages without receiving any extra benefits. That is an almost dictionary-quality example of unfairness.

I'ts either a program for people who work, and who thereby intend to put money aside for retirement, either in SS or in several buckets, or it's a charity program.

Hyperbole aside, I think this is a fair point.

For example: In the past decades, working professionals who had an IRA, perhaps a company 401k, and of course the SS, found that SS provided a portion of the retirement income. Now we are seeing (A) a tilt, as voiced on this forum by such as JoetheJuggler and others, that additional "means testing" may be applied to recipients.

Agreed. Means-testing has the unintended consequence of punishing those who were responsible in preparing for their retirement, and rewarding reckless behavior (not contributing to your IRA, withdrawing your 401K for short-term consumption).

They sensed the collectivist and socialist tilt in progress. Or perhaps they simply realized the farcical nature of a government that was broke making promises.

Possibly. I thought it was closer to the general malaise () of the current political predicament giving my classmates the impression that Washington can't get anything done mixed with cynicism regarding future growth for the US in general.

I suppose it can be used to make any projection your own cognitive biases will allow.

 

[IchabodPlain]

I understand. But the fact is, the system is at least partly need-based. There is already means testing involved, but only for work earnings.

Right, because the system has eligibility requirements. If you're working, you're not retired.

Why is not considering investment income not "equitable" when we consider work earnings in determining eligibility to receive benefits?

1) Risk associated with investments

2) The (potentially) passive nature of managing investments.

ETA: Also, that investment income is what nearly all Americans use to help finance their retirement to supplement SS.

And there are plenty other tax-financed programs that don't consider amount of contribution at all.

Irrelevant. Social security was a program intended for all Americans, not just a subset who were reckless/unlucky.

And, as I've said, if we're making changes in the system--such as reducing total benefits paid out by pushing back the retirement age--there's no reason we can't also change it so that we don't send checks to people who have no need for them.

They (those who "have no need for them") have planned their retirement with SS in mind and have paid into the program with the expectation of receiving benefits. To simultaneously argue that they need to contribute more (lifting the earnings cap) and means-test them out of receiving benefits is not fair. If the program is essentially for the poor, and you're fine with cutting wealthy Americans out, then the poor should pay for it.

There are plenty of other tax-based social programs that don't consider contribution at all in apportioning spending.

And yet, SS does. I have to pay into the system for a number of years before I am eligible to receive benefits (don't remember how many - I want to say 3 or 10 years).

So wealthy people should be allowed to retire (and collect public money) at a younger age than poor people?

No, and I've never said anything that would indicate that this is my position.

And again, we have the luxury of a decent buffer from the Trust Fund that we can phase in any of these changes gradually so that no one's financial planning is severely messed up.

No, because it changes the intention of the program from being a pension/disability program for all Americans to a small subset. You want people to continue drawing in more than double the benefits of any other previous generation and want rich people to pay for it while cutting their benefits. It's abhorrent.

I understand, but it is reducing benefits paid to everyone equally across the board. (Not in per month, but overall.)

(My bolding for effect)

Exactly. We're living longer and retiring earlier. Shaving a couple years of benefits for everyone is a much fairer way to reduce benefits. You're not cutting grandma's paycheck, not soaking the rich, but rather making an adjustment across the board which recognizes the historical and projected increases in life expectancy and curbs the decrease in retirement age.

[ETA: There's also Lefty's point that the increase in life expectancy isn't actually uniform regardless of socio-economic-status.]

Already responded with CBO data. Feel free to take up the flag and argue his case.

I think I understand. If SS were voluntary, and the confidence young people have in its being there for their retirement is weak, they'd all opt out, and Social Security would disappear. That's why I say Perry's plan is not to fix Social Security, but to get rid of it.

I think that's also why he uses the "Ponzi Scheme" rhetoric. You don't fix a fraudulent system--you get rid of it as soon as possible.

I honestly didn't have any motives for posting that - it sort of just came out. However, as I said to mhaze, I think you can suppose anything from your own ideological POV.

 

[leftysergeant]

All you've done is define "Your Way" as "Saving the System" and...

"Someone else's way" as "Destroying the system".

but "Your way" really does destroy the system.

I assume you are a champion of the average working man, in the Longshoreman's Union and such?

Take a guy who's paid his dues, and he's got a pension coming. Plus social security, he thinks he'll do okay in retirement.

Now "means-test" him. Suddenly all his planning for decades just went out the window, because you've changed it into a low income give away charity program.

Stop it right there. I have never advocated means-testing. Stupid idea.

Pay attention. I said REMOVE THE CAP ON TAXABLE INCOME.

Privatizing or cutting benefits in any way is destroying the system.

 

[JoeTheJuggler]

The problem with that is simply that SS payments are capped,

While there is a limit on monthly benefits (which makes sense for a safety net program), there is no cap on overall benefits. The amount you get depends largely on how long you live.

 

[JoeTheJuggler]

Right, because the system has eligibility requirements. If you're working, you're not retired.

I concede the point. I just learned that the max earnings only applies to people taking the partial early retirement. After full retirement, there is no limit to earnings.

Social security was a program intended for all Americans, not just a subset who were reckless/unlucky.

I disagree. It was a safety net, originally for retirees, but then also for the disabled. It is specifically meant for people who can't earn enough money.

They (those who "have no need for them") have planned their retirement with SS in mind and have paid into the program with the expectation of receiving benefits.

And that's why I'd favor a gradual phasing in of changes so that no one's financial plans are screwed up. Again, what is just a bit extra for some is a matter of survival for others.

To simultaneously argue that they need to contribute more (lifting the earnings cap) and means-test them out of receiving benefits is not fair. If the program is essentially for the poor, and you're fine with cutting wealthy Americans out, then the poor should pay for it.

Does the same principle apply to other social programs? Food stamps? Medicaid?


And again--I'd MUCH rather have the debate I'm having with you about which measures are the best ways of guaranteeing the long-term solvency of Social Security than the silly one we're both having with mhaze about whether or not Social Security is a Ponzi Scheme!

And I'm OK with what you're suggesting (and I think it's more likely to succeed since it involves less change), but I see no legal or moral barrier that ties Congress' hands such that we have to keep sending checks to people who don't need them. The money paid in really is a tax and not a savings account or IRA or 401K. The money goes out to pay benefits immediately. Even when the system had surpluses to invest, that surplus was a tiny fraction of the taxes collected and disbursed.

 

[IchabodPlain]

I disagree. It was a safety net, originally for retirees, but then also for the disabled. It is specifically meant for people who can't earn enough money.

Not exactly. It was originally meant for old people who couldn't work on a regular basis due to health considerations and their widows after they pass. It's been expanded to those who are otherwise considered not fit to work on a regular basis on physical/mental health grounds. Or in other words:

In order to qualify for SSDI, you must suffer from a permanent condition that prevents you from working.


Not being able to earn enough money is not the same thing as being disabled (though it would make for a great South Park episode). As I said previously, an unintended consequence to means-testing SS is that you punish the responsible and reward the reckless.

And that's why I'd favor a gradual phasing in of changes so that no one's financial plans are screwed up. Again, what is just a bit extra for some is a matter of survival for others.

It's not a good idea, no matter how it's phased in.

I've yet to see why, given life expectancy and average retirement age figures, raising the retirement age over time isn't a better solution. That is, other than wanting to have and eat cake. We have a situation: A significant number of our citizens are going to live and receive benefits for twice as long as when a program started. What's the logical conclusion? Raise tax, cut benefits. You can raise the tax by eliminating the cap and reduce the rate - which effectively lowers the tax for those who were making less than the cap! That's a tax increase on the wealthy and a cut for everyone else. Then, benefit cuts are shared evenly by raising the baseline retirement age by 3 years to 65 over time (12 years for the sake of simplicity) and keeping full benefits at 67 (for those born after 1960).

Does the same principle apply to other social programs? Food stamps? Medicaid?

Goes back to the top. The poor aren't disabled and they're not necessarily retirees or their widows. SS, unlike every other social program you listed, is not specifically for the poor. It was designed for the elderly and their widows, and then later, for the disabled.

And again--I'd MUCH rather have the debate I'm having with you about which measures are the best ways of guaranteeing the long-term solvency of Social Security than the silly one we're both having with mhaze about whether or not Social Security is a Ponzi Scheme!

Agreed.

And I'm OK with what you're suggesting (and I think it's more likely to succeed since it involves less change), but I see no legal or moral barrier that ties Congress' hands such that we have to keep sending checks to people who don't need them.

I've never said you can't, I've argued you shouldn't. It's a bit of the ol' we're all in this together stuff. That's the moral barrier for me. Economically, it's that doing what you propose necessarily means that those in the bottom half of your sliding scale will receive a disproportionate share of the benefits for no extra cost. Not only do you not ask any more in tax, but actually increase benefits and potentially reward reckless behavior.

 

[mhaze]

Stop it right there. I have never advocated means-testing. Stupid idea.

Pay attention. I said REMOVE THE CAP ON TAXABLE INCOME.

Privatizing or cutting benefits in any way is destroying the system.

Thanks for the clarification. I couldn't imagine why, given your preference for helping the common man, you'd ever dream of advocating means-testing. It would be a cruel way to cheat the common man.

I don't think that upping the age of starting to receive benefits is any big deal, though.

But removing the cap does transform the program into a far more of a "redistribution scheme" than it's ever been in the past.

Plus, all you have to do is have some serious inflation, and the average guy is stuck with that chain around his neck, too.

 

[leftysergeant]

I don't think that upping the age of starting to receive benefits is any big deal, though.

The goal of the republicons and assorted other heartless SOBs is to raise it to 72. Time to stop those idiots in their tracks. I don't give a rat's if the dweebs in the corner office plan to work that long and enjoy their absurd salaries until they tip over. The average guy on the factory floor is probably not too keen on another day of excruciating and worsening pain.

Those figures you see for higher life expectancy? Did you ever bother to ask who has gained the most years? Did you ever wonder why old people don't generally waste away and die at the same rate now as they did in 1930 if they can't get and hold a job?

But removing the cap does transform the program into a far more of a "redistribution scheme" than it's ever been in the past.

So what? When Social Security started the top executives made about 35X what the janitor made. Now it's around 500X. THis is THE problem.

Wealth is being redistributed upward at an increasing rate. This is BAD. It is always bad. Civilizations have been known to collapse because of the concentratioon of too much wealth into too few hands. But no civilization ever collapsed because the poor had too much to eat.
The upward redistribution of wealth here and now is made worse by the fact that the dirtbags who engineered this redistribution are not generating any new wealth here. They are, in fact, destroying wealth here, but that is a topic for another thread.

Plus, all you have to do is have some serious inflation, and the average guy is stuck with that chain around his neck, too.

Voodoo ecconomic blather.

 

[mhaze]

The goal of the republicons and assorted other heartless SOBs is to raise it to 72. Time to stop those idiots in their tracks. I don't give a rat's if the dweebs in the corner office plan to work that long and enjoy their absurd salaries until they tip over. The average guy on the factory floor is probably not too keen on another day of excruciating and worsening pain.

Those figures you see for higher life expectancy? Did you ever bother to ask who has gained the most years? Did you ever wonder why old people don't generally waste away and die at the same rate now as they did in 1930 if they can't get and hold a job?



So what? When Social Security started the top executives made about 35X what the janitor made. Now it's around 500X. THis is THE problem.

Wealth is being redistributed upward at an increasing rate......

Well, you see, that is my point. You can't say that it's Perry that wants to destroy SS as we knew it. It's you and Joe that want to do that. You've said so.

As for Perry, you don't really know how he'd change it. You know that he's said we need to have an "honest conversation" about it. Part of that would be the types of comments you've made, some of which are pretty good points, in my opinion.

Not that I agree with them, but they are worth discussing.

 

[leftysergeant]

As for Perry, you don't really know how he'd change it. You know that he's said we need to have an "honest conversation" about it.

The party line is that it should be invested in the market. I can't imagine his having any other idea. It appears to be an incremental thing. You start by allowing a "choice." The apparent ploy is to show that the worker is getting a better return that way, so why not put more of it in the market?

Eventually the "partial" privatization will become so attractive during those times that the financial sector decides to make it so that the whole fund will be placed in the stock market.

(Probably just in time for the next planned crash.)

 

[Bri]

Well, you see, that is my point. You can't say that it's Perry that wants to destroy SS as we knew it. It's you and Joe that want to do that. You've said so.

I haven't heard Joe or lefty say that they want to destroy SS as we knew it.

As for Perry, you don't really know how he'd change it. You know that he's said we need to have an "honest conversation" about it. Part of that would be the types of comments you've made, some of which are pretty good points, in my opinion.

The only thing Perry's said about Social Security is that we need to have an "honest conversation" about it? You seem to be ignoring his book "Fed Up," his debates, and numerous other statements concerning Social Security. Perry has probably given more insight into his views of Social Security than any other candidate.

Among other things, Perry has suggested moving Social Security from the federal government to the states. He has called SS a "monstrous lie," a "fraud," and a "Ponzi scheme." He has stated that SS is unconstitutional.

Maybe you're suggesting that "we don't know" what Perry thinks because Perry has later hedged previous statements by saying that we need to have an "honest conversation." However, only his supporters who wish he hadn't said some of the things he said (at least not out loud) believe that his later hedging nullifies his previous comments on Social Security.

-Bri

 

[JoeTheJuggler]

I haven't heard Joe or lefty say that they want to destroy SS as we knew it.

Definitely not. In fact, that's the broader point behind my criticism of Perry's calling SS a Ponzi Scheme. If something is a Ponzi Scheme, you don't fix it--you stop it.

I've pointed out that the projected problem facing Social Security due to changing demographics is relatively easily remedied ("easily", that is, but for misinformation about the system spread by the likes of Perry) in a number of ways.

I've also pointed out repeatedly that contrary to mhaze's thinking Social Security never was a contract or an insurance policy or an IRA. From the beginning, the tax revenues collected went immediately out in benefit checks. Only surpluses were invested in government securities. The fact that the system ran surpluses for most of its 80-some year history is why we have the luxury of a couple of decades in which to make the necessary adjustments without any big shocking changes screwing up anyone's plans.

 

[mhaze]

I haven't heard Joe or lefty say that they want to destroy SS as we knew it.


....

Why OF COURSE NOT!!! They phrase their destruction of SS in warm and fuzzy phraseology, while suggested changes by their ideological enemy are called "destruction of SS".

 

[Bri]

Why OF COURSE NOT!!! They phrase their destruction of SS in warm and fuzzy phraseology, while suggested changes by their ideological enemy are called "destruction of SS".

mhaze, you've always been prone to straw men, but attributing Perry's desire to dismantle SS as we know it to Joe and lefty is over the top, even for you.

You honestly don't see the difference between the changes Joe has proposed and moving Social Security from the federal government to the states?

Come on, mhaze. You can do better.

-Bri

 

[johnny karate]

You can't say that it's Perry that wants to destroy SS as we knew it.

He doesn't have to. Perry said it himself:

There will be a retirement system that is no longer set up like an illegal Ponzi scheme, but rather will allow individuals to own and control their own retirement.

As for Perry, you don't really know how he'd change it.

Sure we do. He said so in his book:

There will be a retirement system that is no longer set up like an illegal Ponzi scheme, but rather will allow individuals to own and control their own retirement.