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How to fix Medicare, Social Security, Medicade, etc...

Discussion in 'Political Discussion' started by mcgraw_wv, Jun 14, 2011.

  1. mcgraw_wv

    mcgraw_wv In the Starting Line-Up

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    After watching the debate last night, it became plainly obvious to me the answer to all our social safety nets, and the solution to fixing them.

    Everyone on the stage informed the audience that the money you pay in covers 1/5th the cost you end up using out of the programs you pay into. It got me thinking that the sole reason for the complete upside down nature of our social programs is easy.

    Sound Money. The only reason why you take out so much more than you pay into, is becuase we as a society pay in money that is 1/5th the value by the time we need it.

    If we had sound money, and we stopped inflating the currency, we wouldn't have solvency issues. The entire program can be saved as is if we could ensure the 1.00 you pay into SS was worth near or close to 1.00 when you retire. If that were the case, you would pay in for 40 years for a program you probably would use for 15 years.

    But becuase you pay 1.00 and by the time you need that 1.00, it has a purchasing power of 0.15, no wonder our social safety nets are upside down and on the verge of going away.

    We can't as a society achieve any kind of forced savings of healthcare as long as we continue to devalue the money we are putting away for when we need it, else we need to put away 5 times what we do i our 20's in order to ensure we have the proper amount of money we need when we retire.

    Sure you can blame increased in healthcare, and the bureaucracy, however you can look at the cost of a loaf of bread 40 years ago when you started paying into SS, and now look at the cost, and realize that the majority of your life, you were "saving" for $0.40 loaves of bread, for a world which charges 2.99 for them.
     
  2. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    The other issue is demographics. In the case of SS for example when the program was created there were 14 workers per retired person, currently the ratio is about 3:1 moving to 2:1. This has to do with lowered birthrates. The system is unsustainable.
     
  3. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Also, try Life Expectancy.

    I've put my plan for SS out there before, but here it is again:

    1) Eliminate the SS Wage Base ceiling (which is now $106,800) for the 6.2% SS tax. Many of us pay the same amount into it every year that Warren Buffet, LeBron James or The Donald pay.

    2) To offset the whining and groaning that will emanate (at least from LeBron and The Donald) about that, cut the SS tax from 6.2% to 3.1% - - don't forget, most of these folks are employers and employers would benefit greatly from a cut in half on the SS tax (as, obviously, would employees. Also anyone owning stocks would benefit greatly as the balance sheets of their holdings would improve dramatically with a 50% cut in SS taxes).

    3) For persons currently under 50: The early SS age jumps from 62 to 65 and the Normal Retirement Age jumps from 67 to 70. REALITY: SS was established in 1937 for people to retire at 65 and die at 68 - - that's not what is happening today. Making the changes only for people currently under 50 is the correct thing to do for a) they have time to plan and b) younger people don't vote as heavily as those 50 and over. This would allow cover for politicians not to be executed by AARP.
     
    Last edited: Jun 14, 2011
  4. PatsWSB47

    PatsWSB47 Veteran Starter w/Big Long Term Deal

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    #12 Jersey

    That's not what was happening then either, but even the following is misleading. Survival rates to adulthood are much higher now and that is the larger reason for the extra burden. Life after 65 is a little bit longer if you make it there too, but it's impact is way less.

     
  5. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Very good comments, the suggestions are constructive and the observations about the situation now as opposed to when the program was created are correct.

    This would extend the life of the program, but I think in the long run the program cannot be sustained. Ultimately it is a ponzi scheme Madoff with actuaries and the ability to force people to contribute.
     
  6. khayos

    khayos In the Starting Line-Up

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    I'd dissolve Social Security and have structured personal retirement savings plans fundamentally starting with US Treasury bonds. Have the US phase out the program entirely and have the government begin to reimburse those under 50 with all their contributions with the expectation that the money simply won't be there. This would immediately spurn economic growth and gigantic shift in understanding that the money is gone and it's time for people to once again be responsible for their own lives.

    Social Security is forced societal planning that has reached the end of its life.
     
  7. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    The other reason is because we "GIVE" our soc sec money to the gov't rather than it being invested. I'll have paid well over $150K over my career into soc sec. My career started back in 1982...so think about how much that money would have increased in value.

    Personally McGraw, I think the reason it doesn't work is because whatever money is paid into the system today is used within months. So it's always current money (not old money) that keeps the system going. There really is no soc sec fund per se...nothing really in the "till"
     

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