Grizzly Adams
Graduate Poster
- Joined
- May 16, 2010
- Messages
- 1,226
I'm paying into it now so why shouldn't I?
Social Security questions
- Thread starter TimCallahan
- Start date
BobTheCoward
Banned
- Joined
- Nov 12, 2010
- Messages
- 22,789
I call it Bachmann accounting. It won't be long following that gas falls below two dollars a gallon.
Bikewer
Penultimate Amazing
The usual idea floated by folks who find SS to be some sort of Communist-leaning horror is that these monies would be available for individuals to invest themselves. That people "know best how to manage their own money", and that this would result in a better retirement nest egg for them.
As well we are all told that we must save more, that we must start very early on to save for our retirements.
That all sounds great, but as more than one pundit has pointed out, saving requires a sufficiency of disposable income that can actually be saved.
For a fairly large segment of the population, this simply isn't the case. Paycheck-to-paycheck stuff. And just barely that. The idea that someone in the lower-income levels could put away over a million dollars (that's the figure often cited for a decent retirement) is just laughable.
As to people managing their own money... The exigencies of daily life will result in people tapping that carefully-saved nest-egg when the car's transmission shoots craps or they become unemployed or the kid needs braces.
The chubby-feline types who advocate all these things have no such worries themselves... Look at the percentage of our political leaders who are in the "millionaire" category.
The poorer segment of the population is also typically undereducated and may not in fact be able to manage their own money. They are susceptible to predators, to schemes, fraud, and the vagaries of the economy.
If a downturn in the economy and a stock-market flub causes Mr. Gottrox to loose 40% of his multimillion-dollar investment portfolio, he may become very upset, but he doesn't have to worry about spending the rest of his days under a bridge in a cardboard box.
Not so with a working stiff who might have painfully salted away 50,000 bucks.
As well we are all told that we must save more, that we must start very early on to save for our retirements.
That all sounds great, but as more than one pundit has pointed out, saving requires a sufficiency of disposable income that can actually be saved.
For a fairly large segment of the population, this simply isn't the case. Paycheck-to-paycheck stuff. And just barely that. The idea that someone in the lower-income levels could put away over a million dollars (that's the figure often cited for a decent retirement) is just laughable.
As to people managing their own money... The exigencies of daily life will result in people tapping that carefully-saved nest-egg when the car's transmission shoots craps or they become unemployed or the kid needs braces.
The chubby-feline types who advocate all these things have no such worries themselves... Look at the percentage of our political leaders who are in the "millionaire" category.
The poorer segment of the population is also typically undereducated and may not in fact be able to manage their own money. They are susceptible to predators, to schemes, fraud, and the vagaries of the economy.
If a downturn in the economy and a stock-market flub causes Mr. Gottrox to loose 40% of his multimillion-dollar investment portfolio, he may become very upset, but he doesn't have to worry about spending the rest of his days under a bridge in a cardboard box.
Not so with a working stiff who might have painfully salted away 50,000 bucks.
kevbo
Critical Thinker
Whenever I come across a Social Security post or conversation at work, there is invariably someone pointing out the lack of money to pay the "boomer" generation. The inference seems to be that "boomers" will be getting SS checks forever. Now, I have about 10 years to go before retiring, and as much as I would like to, I don't believe that I will live forever. Nor will any of my fellow "boomers". No derail intended here, but if we can borrow 100's of billions for a war (or two) why can't we borrow enough to get through the tight years of SS obligations? Ten years, twenty years, whatever; every year there will be fewer "boomers" at some point of equilibrium. Neither me, nor my kind, will live forever, so the pay out will decrease and the system can return to a more balanced input/output scenario as it was before.
No, you would not be charged with fraud. If you were up front about it and stated clearly and distinctly how the program operated, you would not be in violation of any laws. You would have no customers sign up voluntarily because the returns would not be very good (low rate of return, and no guarantee you will get your money back before you die), but you would not be breaking any laws.
No need to scrap social security at all to unilaterally return the bonds back to the federal government. As I said, SS will continue to pay approximately 75% of scheduled benefits from payroll taxes (the same taxes used to purchase those bonds you want to give back). The problem, of course, is that many of the most vulnerable retirees and disabled rely on Social Security as their primary source of income. What do you propose we do about those people?
-Bri
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The causes of the current situation isn't limited to the baby boomers. According to the article I cited earlier in the thread:
The baby boom generation has begun to retire, reducing the number of workers per retiree. Meanwhile, people are living longer and thus would collect benefits longer, while parents are not having as many children, which limits the pool of new workers. Largely because of the recession, payroll collections now are not covering all benefit payments, and in 2010, Social Security started to tap its trust funds. Most experts predict the demographic, life expectancy and fertility trends will continue even after the baby boom generation passes -- though some say the assumptions are too pessimistic.
Borrowing (i.e. increasing the debt) to pay for SS is one option, but not necessarily the best one. Particularly if the trends continue beyond the baby boomer years (as is expected) it would involve increasing the debt indefinitely. The good news is that there are plenty of other options available to Congress that won't increase the debt.
-Bri
kevbo
Critical Thinker
Thanks, Bri, for the response. Looks like no quick or easy fixes, but some kind of combination of changes would serve the long term issues best. Sort of like the deficit issue (give a little, take a little, tweak a little here and there). And of course, the best thing that could possibly happen to adequately funding SS would be for people to be able to get back to work and start contributing into the system again.
No quick fixes, but at the same time SS is far better off than most entitlement programs. Its problems are relatively minor and it could be adjusted relatively easily to provide 100% of scheduled benefits instead of the 75% that it will provide if we do nothing. Just as an example, means testing could be used to provide more benefits to those who need it the most. The caps could be removed on taxable income to provide more revenue. There are many other solutions (or most likely some combination of solutions) that would solve the problem.
Improving the economy and unemployment would help improve (but not entirely solve) the problem with SS, not to mention many other problems this country is facing.
-Bri
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