Holy Social Security

[bshole]

Nope!

I think we can all agree that if privatization ever occurred, the banks and financial institutions would make untold fortunes on a whole new swath of transaction fees. If this does gain traction, I would definitely suggest buying into bank stocks.

 

[brycejones]

I think we can all agree that if privatization ever occurred, the banks and financial would make untold fortunes on a whole new swath of transaction fees. If this does gain traction, I would definitely suggest buying into bank stocks.

No kidding

 

[piasabird]

Before this country would do away with SS, I think welfare and Medicare would be gutted.

 

[brycejones]

So back to "you're too stupid to manage your own retirement and we literally trust a politician to do a better job of it than you."

Good grief can you not see anything except in absolutes?

 

[glenn1]

Good grief can you not see anything except in absolutes?

So says someone about a program which is 100% mandatory for everyone in the country; nope, nothing at all absolute about that.

And I'm willing to admit for some they're absolutely better off with Uncle Sam doing their retirement work for them, if in return that you'll admit that Social Security completely fucks over a large amount of people who are able to do their own planning. And it's absolutely immoral how you fuck over any poor person who pays into SS for years and dies right before or after annuitizing their SS payments which is by far the worst feature of the whole damn Ponzi scheme.

 

[sothsegger]

The same topics come up repeatedly here which I know is no surprise to any of the regulars. Why not just tell it like it is on this topic? The left likes having that SS money as a reservoir to be tapped when they feel the need. A plan to privatize it either in whole or in part will never fly with them because it will mean that the funds are not available to them. How many times have we heard Pelosi over the years express interest in government taking over individual retirement accounts to varying degrees? More than I can remember. It's always wrapped up in some do-good bullshit but the reasons for the left wanting to do it are transparent. Rather that rein in spending, it's much more palatable to increase revenue.

Our government is enamored with taking the low road on far too much. We have allowed a system to develop and flourish that rewards politicians for not making hard decisions, for taking the path of least resistance. Borrow today and don't worry about tomorrow. Why should they worry? They're pretty certain they'll be dead or forgotten when the shit hits the fan. And if they're not, who's going to hold them responsible? Their brethren in D.C.? Fat chance of that.

Our nation is many, many tens of trillions in the hole. It is going to catch up with us.

You're wrong. The right has "tapped" it just as much as the left. In fact, the "tap dance" you speak of began with Reagan in 1983 when he and Greenspan raised the payroll tax to pre-fund the baby boomer retirement, a move which created the surplus of which Reagan was the first to raid. Study your history before you post.

 

[fskimospy]

You're wrong. The right has "tapped" it just as much as the left. In fact, the "tap dance" you speak of began with Reagan in 1983 when he and Greenspan raised the payroll tax to pre-fund the baby boomer retirement, a move which created the surplus of which Reagan was the first to raid. Study your history before you post.

The concept of raiding the social security trust fund is kind of nonsensical to begin with though. It's not really possible to do.

 

[bshole]

The concept of raiding the social security trust fund is kind of nonsensical to begin with though. It's not really possible to do.

So what did SS do in the past when income was vastly greater than expenses? I have never been real clear on that. Did they take the excess and put it in a bank, rebate it, use it to balance the budget, etc..... ?

 

[sothsegger]

The concept of raiding the social security trust fund is kind of nonsensical to begin with though. It's not really possible to do.

Ok. Strictly speaking, you're correct. "Borrowed" ot "reallocated" are probably better words; and the money has all been accounted for. However, instead of restoring the money to preserve benefits, republicans want to cut benefits.

 

[sothsegger]

So what did SS do in the past when income was vastly greater than expenses? I have never been real clear on that. Did they take the excess and put it in a bank, rebate it, use it to balance the budget, etc..... ?

Whenever the income exceeded the outgo, the $$ was borrowed/reallocated to pay for what income taxes are supposed to pay for.

 

[fskimospy]

Ok. Strictly speaking, you're correct. "Borrowed" ot "reallocated" are probably better words; and the money has all been accounted for. However, instead of restoring the money to preserve benefits, republicans want to cut benefits.

I mean more that the government bought bonds with the social security trust fund, which is just lending money to itself. It's not really something we can draw on if the person redeeming the bond is the same one issuing it. It represents an obligation to social security on behalf of the government, but in the end the government simply has the sum total of revenues it collects in a given year to meet its obligations. The so called trust fund has never existed in my opinion, nor do I think it could.

Hard to raid something that doesn't exist.

 

[sothsegger]

I mean more that the government bought bonds with the social security trust fund, which is just lending money to itself. It's not really something we can draw on if the person redeeming the bond is the same one issuing it. It represents an obligation to social security on behalf of the government, but in the end the government simply has the sum total of revenues it collects in a given year to meet its obligations. The so called trust fund has never existed in my opinion, nor do I think it could.

Hard to raid something that doesn't exist.

It's a raid infofar as it's money being used for something it wasn't intended for. That money was intended for the baby boom retirement; instead, it was used to pay for defense, which in turn allowed for lower taxes on the rich.

 

[Fern]

So what did SS do in the past when income was vastly greater than expenses? I have never been real clear on that. Did they take the excess and put it in a bank, rebate it, use it to balance the budget, etc..... ?

I wasn't around when SS began, but for as long as I know any surplus was credited to the SS account.

Basically, the excess money/funds from SS were invested in (special) govt bonds. It's basically similar to any other investor in govt bonds.

When SS needs the money, the govt redeems the bonds and sends the funds over for SS use.

Fern

 

[Zorkorist]

There was a "Trust Fund." It's now been raped so hard and for so long that it looks like the Eisenhower Tunnel.

Government is broke. There is no money. There is only fake money, and a trust, in Government.

-John

 

[shady28]

So what did SS do in the past when income was vastly greater than expenses? I have never been real clear on that. Did they take the excess and put it in a bank, rebate it, use it to balance the budget, etc..... ?

The largest single holder of US debt is the social security administration. About a year ago they owned 16% of the US federal debt. By my calculation that comes out to about $2,720,000,000,000.

 

[Zorkorist]

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm

-John

 

[WackyDan]

I think we can all agree that if privatization ever occurred, the banks and financial institutions would make untold fortunes on a whole new swath of transaction fees. If this does gain traction, I would definitely suggest buying into bank stocks.

Yeah, because there aren't people plopping money into 401ks that have high fees.

The upside of a partially privatized system is that the gov't can regulate those fees to the minimum level - Which I know is wishful thinking given they (the politicians) are owned by the banks and hedge funds.

I can tell you though that every dollar in my investments over the past twenty years is returning a multiple of what SS will ever return to me... and that money is my wife's and child's after I'm gone - not the government's.

 

[boomerang]

You're wrong. The right has "tapped" it just as much as the left. In fact, the "tap dance" you speak of began with Reagan in 1983 when he and Greenspan raised the payroll tax to pre-fund the baby boomer retirement, a move which created the surplus of which Reagan was the first to raid. Study your history before you post.

You should have taken my post in the context of the here and now. The left is currently the opposition to privatizing parts of SS. It's good to be aware of ghosts from the past but it's far more important to understand that we live in the here and now and that all we can control is the future. This continual blaming of previous presidents makes for great talking points with those easily influenced but it accomplishes absolutely nothing.

Also, no mention in my post of a "tap dance" which kind of makes me wonder why I'm responding to you at all.

 

[OutHouse]

Easy, make it voluntary as it was originally supposed to be.

Fail.

 

[Attic]

just remove the cap on social security tax. boom, now it will be OK until almost the year 2100.

Yes, this will need to happen, remove cap. Don't agree with the 2100 estimate though. For that to happen we'd remove cap and have possiblity of reduced benefits or increased SS rate for everyone.

Also government needs to stop borrowing the excess SS funds. For anyone who gets it, this is an implicit default on those borrowed funds as the funds will never be paid back and the system will need to be solved around that constraint.

ie) Government currently owes SS fund 2.7-2.8 Trillion dollars in what it has borrowed to back fill budgets over the years. That 3 trillion can not be paid back so the SS fund needs to be made right with around a 3 trillion and increasing hole if we lift the cap.

Ultra low interest rates are not doing any favors for the fund either, the fund excess earns interest but this again is just more accounting gimmitry as those funds are actually put anywhere because they've been eaten up by federal spending and allowing for buracrats to claim smaller budget deficits than otherwise would be the case if they were not raiding the SS fund.


Ultimately lower purchasing power for SS recipients down the road is the only logical conclusion, this will be easiest to sell (lie to American public) about while avoiding responsiblity for the outcome of lower purchasing power of SS recpients.


Cliffs: Save more

 

[Spungo]

Fine with me, what you're advocating basically means the rich get to collect Social Security for longer in comparison the poor, further increasing their total return past the breakeven point of their capped contributions. Funded in large part by retained funds for the poor who never make it to retirement age. Thanks for the reverse Robin Hood.

Plan to destroy the middle class: working as intended.

Another awesome reversed robin hood is causing inflation. Wages in the US have been falling for the past 14 years, but housing prices have steadily gone up. 30 year olds still live with their parents. Mortgage applications are at 19 year lows because average people have been priced out of the market. We're creating a society of renters. We're reverting back to feudalism.

Another reversed robin hood policy is giving student loans to anyone with a pulse. 20 or 30 years ago, you could finish high school and get a job somewhere. Now, you're expected to have 2 or 3 degrees just to mop floors. Education isn't free, so you're essentially paying someone to earn the right to mop floors. We have a word for that: change

 

[Brovane]

So says someone about a program which is 100% mandatory for everyone in the country; nope, nothing at all absolute about that.

it isn't 100% mandatory because many state and local govt employees don't participate in Social Security.

And it's absolutely immoral how you fuck over any poor person who pays into SS for years and dies right before or after annuitizing their SS payments which is by far the worst feature of the whole damn Ponzi scheme.

How is that any different from any other Pension plan?

 

[Spungo]

How is that any different from any other Pension plan?

Private wealth passes through inheritance. I stand to gain about 300k of savings plus a house when my mom passes. I'll get exactly $0 of her social security. That's why SS punishes the lower class. You pay into it your entire life, you still die at age 60 , and your kids get none of it. As eskimo pointed out, lower class people die earlier, so lower class people, especially black men, are the primary victims of this system. People who live the longest benefit the most from the system.

I can tell you though that every dollar in my investments over the past twenty years is returning a multiple of what SS will ever return to me... and that money is my wife's and child's after I'm gone - not the government's.

We're working on fixing that :biggrin:

I think we can all agree that if privatization ever occurred, the banks and financial institutions would make untold fortunes on a whole new swath of transaction fees. If this does gain traction, I would definitely suggest buying into bank stocks.

Transaction fees have gone down quite a bit since the internet came around. $10 per order is fairly standard, and I don't pay any other fees on top of that.

 

[Brovane]

Private wealth passes through inheritance. I stand to gain about 300k of savings plus a house when my mom passes. I'll get exactly $0 of her social security. That's why SS punishes the lower class. You pay into it your entire life, you still die at age 60 , and your kids get none of it. As eskimo pointed out, lower class people die earlier, so lower class people, especially black men, are the primary victims of this system. People who live the longest benefit the most from the system.

You didn't answer the question. How is it different from any other Pension system?

 

[glenn1]

You didn't answer the question. How is it different from any other Pension system?

It's not, and you're acting like that's a good thing. Portability and vesting before an arbitrary service date (like 20 years with a single employer) is a major reason why defined contribution plans are VASTLY superior to old-style pension/defined benefit plans. If Social Security is going to continue to exist, it should be completely transformed into a system where participant contributions are invested into U.S. Treasury debt they own in personal accounts. Even if the accounts are administered by the U.S. government that's infinitely better that the system we have now. The mere idea that you, Eskimospy, and the like are defending the current travesty of a system we have now makes me wonder what your ulterior motives are for not wanting to make such an obvious and hugely positive change.