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Social Security pro and con

Discussion in 'Political Discussion' started by BlueTalon, Feb 20, 2006.

  1. BlueTalon

    BlueTalon Rookie

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    Let the games begin!
    Last edited: Feb 20, 2006
  2. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey
    I guess I don't need to add anything :D
  3. wistahpatsfan

    wistahpatsfan Rookie

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    Abolish Social Insecurity as well as the IRS, IMHO.
  4. BlueTalon

    BlueTalon Rookie

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    The first thing I'd like to see is some truth in advertising. Let pay statements reflect the entire amount of the payroll deduction as being taken from the worker, rather than perpetuate the myth that the employer "pays" half. That half is part of the employee's compensation coming out of the employer's pocket, but many people never think it through (and are never encouraged to do so) and just accept it. I think if people saw what was actually coming out of their check, they'd be quite a bit more upset, and there would be more pressure to do something about it.

    And that's something that can be done immediately, no restructuring of any kind needed.
    Last edited: Feb 20, 2006
  5. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    Social Security is not supposed to be an investment plan. It's part of our compact with our government to work hard and in return to be protected from all that can go wrong when we reach old age.

    Investments can go wrong, savings can be drained by an emergency, people can be victims of terrible scams, the stockmarket can decline for many years at a bad time for someone who has already organized his/her retirement.

    Now, you know darn well that we are not going to let senior citizens die in the streets because they were victims of bad luck or bad decisions. We will help them. Social Security is a guarantee to Seniors and provides the minimum amount necessary to get by. I'm not against IRAs, 401(K)s, and so on, but they serve a different purpose. They are designed to encourage people to invest in order to have a better retirement. Social Security is designed to prevent a major social problem. If we want to tamper with retirement, then let's enhance other programs, such as the Roth IRA.
  6. BlueTalon

    BlueTalon Rookie

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    Social Security is not supposed to be an investment plan. It's also not supposed to be insurance, and it's not supposed to be a pension, but it has turned into a lumpy mix of all of those.

    The biggest problem with Social Security is at its core. (There are other mojor problems with it that I'll address in another post.) It's structure is based on demographics, particularly the demographics of the 1930's and 1940's, when people had many more children than they do today, and their elderly died a whole lot younger. To put it another way, it's a pyramid scheme -- is just happens to be one created by, and forced down our throats by, our government. Unfortunately for us, the same thing is happening now that happens with all pyramid schemes, it has reached its saturation point, and the latest inductees into the pyramid are the ones who are going to get screwed.

    There are only two options at this point, if the goal is to maintain the current structure of Social Security. Option One is to raise the taxes of the young, reduce the benefits of the elderly, raise the retirement age, or some combination thereof. Option Two is to return to the demographics of the 1940's -- force families to have more kids (outlaw abortion?), and have our old people die younger (no medical care after age 60? Euthanasia?). THAT'S ALL THERE IS! THERE ARE NO OTHER ALTERNATIVES! (If the primary goal is to maintain the current structure.)

    Any other option involves restructuring Social Security, and this is the only long term fix that will keep it solvent and avoid bankrupting the country.
    Last edited: Feb 20, 2006
  7. BelichickFan

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    #24 Jersey
    The problem, Patters, is SS isn't what you've described. It's become a retirement plan for everyone. If we want to make it a safety net . . . and with this reduction cut the amount we contribute by about 75%, I have no problem with that. But the current system of taking my money and yours for 30-40 years and then returning it to us with the most paltry interest is a joke.

    A perfectly viable option would be to keep SS tax as is but have 75% in private accounts that have to be put in diversified accounts (like the S&P 500). The 25% would be the safety net. Everyone would come out ahead and the S&P 500 has never made less than 6% annually over any 30 year period. All the scare tactic yahoos point to Enron but only a fool puts all his retirement into one company.

    I don't want a compact with the government. I want a compact with myself to save what I can and the government is getting in the way of that.

    p.s. my plan for 75% Individual accounts would be phased in over several generations to deal with the differing amount of time we all have to adjust, varying from no time to our whole working life.
  8. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey
    I'm not sure what you mean by "maintain the current structure" but the other option is to invest the money and have it grow. Wow, what a concept.
  9. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    There are other choices, BlueTalon. You can eliminate SS benefits for the wealthy, but liberals tend to be against that because it's unfair to those who invested in the program. I do think the government should encourage wealthy people to decline their benefits. Some would.

    You can let Social Security continue as is, knowing that you'll have to use the general reserves or borrow to sustain it. The fact is that's pretty much how our government has been working for many, many years. Most of us would rather take a $400 billion loan to help our elderly than to invade Iraq. Conservatives are constantly predicting economic doom and gloom from entitlement programs, but it hasn't happened in Europe and it won't happen here, provided we take measures eventually.

    I think we should leave Social Security alone, but gradually raise the retirement age. We should use some of the money from estate taxes to support Social Security.
  10. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    One problem with that is it encourages people not to save for retirement. I put a lot into my 401K and mutual funds and miss out on things like new cars because of it. Is it then fair to cut or eliminate my SS payment because I was responsible ?
  11. BlueTalon

    BlueTalon Rookie

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    By current structure, I mean the pay-as-you-go aspect of it. Currently, theoretically, the money being paid out to recipients today is collected from workers today. As Patters pointed out, though, there's a lot of diverting of funs and borrowing going on, so it isn't a stricly pay-as-you-go system. (What we have now, with the borrowing, is actually worse.)
  12. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    BelichickFan, Social Security needs to guarantee a minimum amount on which people can survive. Having only 25% go towards some kind of guarantee would leave our seniors well below the poverty level. Further, you have to take into account the fact that many people do not know how to invest, especially people who are lower income. If we don't have protections in place, they will buy into scams or into programs that are not right for them. I think every investor has been fooled at some point or another at least to a small degree, and the less educated ones will be easy pickins for the crooks.

    There may be a solution to SS that no one has thought up yet, but I believe strongly we have to ensure that our seniors have some level of protection.

    I don't want to start talking taxes just yet, but my view and your view of taxation are very different.
  13. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    That's why it would be phased in. Those over 50 years old would have no change. Those 30 (or so) to 50 would be reduced somewhat. Those 18 and under would be reduced way more. That's because they have more time to plan and prepare. The 75% reduction would be over time, not immediate.

    Honestly, I don't care. Why should I pay (which I am, as I'll have less at retirement under this scheme) for others' ignorance ? Anyway, under my plan the money would still be taken out of the paycheck and invested in diversified mutual funds in which people couldn't mess it up. I'm talking about 5 choices, S&P 500, Small Cap, Large Cap, International, and one other. Or you could go to the Lifetime Funds that Mutual Fund companies offer now which automatically move from higher risk to lower risk as you get closer to retirement.
  14. BlueTalon

    BlueTalon Rookie

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    No, there aren't any other choices. Everything you just named here is a variation of those choices.

    You were explicit in naming a raised retirement age.
    Eliminating the benefits for wealthy people is a form of cutting the benefits (and I would contend that conservatives are far more opposed to the idea than liberals, since we're the ones who believe it's our money to start with).
    And subsidizing Social Security with the general fund or borrowed money is certainly a form of Social Security tax increase, just called by another name. The same with using estate taxes.

    Raise the retirement age...
    Increase taxes...
    Reduce benefits...

    Like I said, that's all the options there are, keeping the current structure.)

    (Unless you want to make people have more kids and die younger...)
  15. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey
    Or invest the money and have it actually grow outside of the damn lockbox.
  16. dryheat44

    dryheat44 Rookie

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    #75 Jersey
    Stop collecting. Period.

    The whole "allow people to invest SS withholdings" defeats the purpose, no? The reason SS exists is so people will have insurance when they no longer have income, yes? Protect them from themselves, yes? So we have two options for overhaul:

    1. Don't collect SS, and let people invest as they see fit.
    2. Collect SS, then allow people to invest it, while paying some Bush cronies millions of dollars of the pie to administer these investments.

    What is the difference between 1&2, except the SS payer actually will receive less on his/her investment, and Bush's pals get a nice income? I'm 32, I figure I'll never see more than 10% of my SS contributions, but not planning on any.
  17. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey
    But it would force retirement savings. If you just cancel the whole thing then too many people would be stupid and spend everything. A "forced 401K" would make people save, even against their wishes, but would allow their money to grow.
  18. BlueTalon

    BlueTalon Rookie

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    I think your concerns are overstated. Do you have direct deposit by any chance? Everyone in the military is paid by direct deposit. We used to get checks, with all their advantages and disadvantages. But the government, in order to save money (a lot of money), required servicemen to enroll in direct deposit. But the thing is, I couldn't have the money sent to my uncle Hank or my best friend Dave or even my parents -- I had to have a bank with a routing number. By your definition, I would call that a protection.

    With Social Security, it would be relatively easy for the government to set up fund requirements for investment firms in order for them to be eligible to get involved (conservative requirements governing diversity and risk and what sort of investments can be included). That also would be a protection. Then, lets say there are 20 companies that have a Social Security/retirement fund that meets the requirements. A person who knows nothing about investing would simply pick one, it doesn't matter how. Since they would all be basically very similar funds, the person would not face any risk of having his money perform poorly because of a poor choice.

    And if I'm writing the rules, I would make it so that people could transfer money between those funds with no penalty (another protection). That way, each company had the incentive for its fund to do well so more people would put their money into it.


    And the great thing about doing something like this is that if you die at age 58, your children ages 23, 24 and 27 would be able to inherit that money! (Under Social Security, they would all get squat.)
  19. BlueTalon

    BlueTalon Rookie

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    In case I haven't made myself clear, I'd really like to pull the plug on Social Security as it exists. Continue paying current recipients from the general fund, give everyone not yet receiving it the option of staying with the system or cashing out and have their Social Security tax be diverted into a fund such as what I described in the previous post.


    I agree with your post. The question is whether the government should invest it (which I have a big problem with) or letting us invest it.
  20. PatsFanInMaine

    PatsFanInMaine Rookie

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  21. wistahpatsfan

    wistahpatsfan Rookie

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    Completely liquidate the SSI/SSDI (did we forget about the drain on the system by asthmatic(sp) fat lumps (I'm overweight, too, but I work my arse off) who claim disability because they're too friggin fat).
    The system WILL NOT WORK for the middle classs suckas who continue to pay into the SSI of their parents and their friends who mistakenly bought into the existing sytem that is doomed to fail. I don't blame them any more than I blame them for consenting to pay taxes. And I know...I'm an employer of these poor guys.
  22. All_Around_Brown

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    What a great thread! No insults, no garbage, just insight and common cause. Thanks Blue Talon, and everyone who contributed. This was worth a read.


    That said, while some fall for the SS "crisis" as the biggest threat to our financial security, theres a bigger entitlement monster out there looming called Medicare. (Not to change the subject) :D
  23. scout

    scout Rookie

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    #15 Jersey
    I just recieved this email from a friend in Texas. I believe its not totally accurate, or at the very least really slanted, but would like any comments:


    Many years ago in Seattle, two wonderful neighbors, Elliott and Patty Roosevelt came to my home to swim on a regular basis. They were a great couple full of laughter and stories that today I continue to marvel at. Both are now deceased, but their stories remain. During the years of our friendship we had many, many discussions about his parents (President Franklin D. and Eleanor Roosevelt) and how his father and mother never intended for the Social Security and Welfare programs to turn out the way they are today. Elliott used to say that if his mother returned to earth and saw what the politicians had done to their programs she would have burned all of them in hell.



    Here is a story I received today regarding the Social Security Program and I immediately thought of Elliott's comments. Hope you will read this and think about it. Margaret




    Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

    1.) That participation in the Program would be completely voluntary,


    2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,


    3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

    4.) That the money the participants put into the independent "Trust Fund" rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

    5.) That the annuity payments to the retirees would never be taxed as income.

    Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away," you may be interested in the following:



    --------------------



    Q: Which Political Party took Social Security from the independent "Trust" fund and put it into the General fund so that Congress could spend it?



    A: It was Lyndon Johnson and the democratically controlled House and Senate.



    --------------------



    Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?



    A: The Democratic Party.



    --------------------



    Q: Which Political Party started taxing Social Security annuities?



    A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the U.S.
    -------------------



    Q: Which Political Party decided to start giving annuity payments to immigrants?



    AND MY FAVORITE:



    A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

    -------------------



    Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!



    And the worst part about it is, uninformed citizens believe it!



    If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve. Maybe not! , some Democrats are awfully sure of what isn't so.
  24. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    IMAGINE THE CRAP I WOULD HAVE TAKEN IF I HAD MADE THE ABOVE POST, MOST OF THE ROTTEN STUFF THE DEMOCRATS DO ARE QUICKLY DROPPED BY THE LIKES OF NY TIMES AND CNN. BUT NOW WE HAVE NEW MEDIA OUTLETS AND THE DEMOCRATS "HATE THEM", THEY HATE THEM BECAUSE THEY TELL US ALL THE THINGS THE DEMOCRATS DON'T WANT US TO KNOW.

    FOX NEWS, CABLE TALK SHOWS, TALK RADIO, INTERNET, BLOGGERS, NOW WE HEAR THE OTHER SIDE.
  25. scout

    scout Rookie

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    #15 Jersey
    Harry, I wasn't looking for a rant against a particular party, just an explanation on these items. You mention FOX NEWS, they have distorted Roosevelt's intentions as well as anyone. The list I posted is somewhat distorted and was looking for some explanations or rebuttals. For instance, saying Roosevelt never intended social security to be taxed is an outright lie. Roosevelt was qouted as saying he taxed social security so those bastards could never take it away. I am not posting to defend the Democratic Party but to understand some of the reasoning behind these choices and its accuracy.
  26. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I love these. Scout, what you received was mostly lies, and the truth can be found here:

    http://www.snopes.com/politics/taxes/sschanges.asp

    You should pass that onto your friend and ask him to forward the link to all the people he misinformed. This is the kind of crap that the right-wing does repeatedly -- treats lies as fact and then tries to spread the word. We have to stay on guard. Remember, right now the Republican Party is corrupt.
  27. scout

    scout Rookie

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    Patters, my deepest thanks. I will pass this on to my friend in Texas with hopes he sends it on to other concerned parties.
  28. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    Well, it was a good post anyway :singing:
  29. BlueTalon

    BlueTalon Rookie

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    Gotta love Snopes! Good find, Patters. There is enough to discuss about Social Security without throwing chain-email into the mix.

    I will say, though, that I remember when the Clinton administration started taxing Social Security benefits. (I don't remember the exact details, but I remember when it happened. I had a rather intense discussion about it at the time with my grandmother, who receives Social Security and is a hardcore Democrat.) And THAT was a Democrat administration, no doubt about it.
    Last edited: Feb 21, 2006
  30. BlueTalon

    BlueTalon Rookie

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    If I was dictator-for-a-day, one of the things I would do is seperate the retirement portion of Social Security from the everything-else portion of Social Security. They are two very different things, and need to be treated differently.

    If we as a society want to help widows, orphans, handicapped, indigent, sick etc., I have no problem with that. But everything that works toward that end needs to be under one roof. And everything that deals with retirement also need to be under one roof -- a DIFFERENT roof.

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