Social Security cannot maintain itself and is heading for imminent disaster,
and the American people will be better off having a choice in investing part of their money.
I noticed right away, however, a rather large flaw in the argument: it is disingenuous in assuming that the money people pay into it remains theirs, as though it were held in personal accounts for them already. Social Security is, by definition, a social safety net--available to all, regardless of how much you paid into it. Whether you agree with it or not, that's the whole reason it exists.
I took it upon myself the other day to do a little poking, and I've seen that under current law, outlays will surpass revenues in 2018, and by 2050, SS will not be able to pay full benefits. The key phrase to note here is "under current law." If no one does anything, SS will be unable to pay full benefits in 45 years. That the crash is imminent is thus a pretty spurious statement. Either way, the argument seems to be a false dilemma on the whole. It boils down to "privatize it, or watch it burn."
Also, I read that the people could expect better returns with private investment; on average, SS investments (U.S. Treasury Bonds) yield 2.6%, whereas the return on the stock market is almost double at 4.9%. It sounds attractive, but I see two big problems: the cost of managing some 220 million private accounts will cut in to the return, and that return is by no means guaranteed. If you retire when the market's shitty, your nest egg is gonna be markedly less than what it would be in a boom. Treasury Bonds, on the other hand, in terms of stability, are some of the best investments in the world. With Social Security, your return is guaranteed as long there's money to be paid out.
Frankly, I would feel a whole lot better if Bush simply asked the country to flat-out eliminate Social Security. One, it would be more honest than the current approach, and two, it would allow America to decide if it, as a country, wants to maintain this social safety net any more.
Also, to run off to potential counter: I highly doubt that anyone, left or right, says Social Security doesn't need to change. Both the retirement age and available funds could be raised without appreciable strain to either the worker or the beneficiary, since 1) people are living longer and retiring later anyway, 2) the population growth has steadied, and 3) funds could be allocated from pork instead of collecting new taxes. The worries associated with the Baby Boom will last as long as the Baby Boomers are alive, and no longer.
In short, it seems that trying to turn something which was only designed to be a social safety net into some sort of investment system is pretty stupid. Instead, the question of Social Security should simply be decided on terms of preservation/elimination. If the country wants to get rid of Social Security, then let's be rid of it. Otherwise, let's take the necessary steps to maintain its viability--and, from what I've read, its viability can be maintained without any significant burden on the younger generation.
So, should we abolish Social Security and leave people to invest their own money? Or should the government turn Social Security into a sort of state-run investment program? Or should we make the necessary changes and keep the social safety net more or less as is?
Under capitalism, man exploits man. Under communism, it's just the opposite. - John Kenneth Galbraith
We can't eleminate it immidiately though; people who contributed to the system deserve somthing out of it, otherwise it would just be blatently stealing, and some people may have been counting on Social Secutity as part of their retirement. It's not fair to just take that away from people who could be too close to retirement to change their plans.
I would keep paying people who have retired the same Social Security, then have declining payments as the people get younger and have contributed less.
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Karnaj had this to say about the Spice Girls:
Both the retirement age and available funds could be raised without appreciable strain to either the worker or the beneficiary, since 1) people are living longer and retiring later anyway, 2) the population growth has steadied, and 3) funds could be allocated from pork instead of collecting new taxes. The worries associated with the Baby Boom will last as long as the Baby Boomers are alive, and no longer.
People won't be living longer if they can't afford health care though 
But I have no idea how medicaid and medicare and everything ties into it. All of that is covered under the FICA tax isn't it?
That having been said, here's me talking out of my ass:
I think that social security is one of those things that should be kept around. It's not a bad idea, it's just frankly been rather badly run. That was okay in the past; in the past it worked, actually. The problem is that the economy, and frankly the longevity and vitality of human beings in general, are both things that shift and vary. They're not linear; it spikes up and down. The overall trend is that people are living longer, so it curves generally upward. The stock market, however, shifts from fiscal quarter to fiscal quarter, it can bounce up and down several times in a year, much less in the working lifetime (say from 16 to 65) of a citizen.
It seems (and I emphasize that word because, I reiterate, I'm not an economist, nor am I a mathematician, nor am I a financial legalist who knows how the laws and bureaucracy works) that you need something that algorhythmically works with the stock market's up and down trends to create a mean trend parallel to the increase in population longevity trend.
To that end, logically there are two things you can do. First off, you have to cut down spending. Frankly, you need to lean down the monster that is bureaucracy. Right now there's a lot of unnecessary bureaucratic flab that sits like overripe pork rinds fermenting in a jar. When you have to deal with it, it's going to stink. Frankly it's going to reek, but you have to get rid of that nasty shit.
Secondly, and this is more to the topic Karnaj rather eloquently elaborated on, you have to find some way to increase revenues to Social Security. If that means investing in the Stock Market, that might not be a bad idea....
...So long as you put the necessary legal failsafes in place. They have to be in place before you tamper with putting anything in privatized hands. Private corporations are, by and large, the backbone of American economics, and capitalism is the shiznit, but it by it's very nature breeds naughtiness. Eternal vigilance is the cost of free trade, to mix famous phrases.
Assuming you could get adequate corporate controls pushed through, though, I don't see where even limited stock market investing would be that bad.
Of course all of this assumes you want to retain social security, which I personally do.
sigpic courtesy of This Guy, original modified by me
-Tok Toktuk fucked around with this message on 01-12-2005 at 01:33 AM.
Where does that leave it? I'm not entirely sure, I think it's a good program but eliminating it entirely will screw the current generation of retirees royally, however, they're probably the last generation that will largely depend on it since it's generally considered not to be dependable. A gradual weaning is probably sufficient, or moving it to a health care only type of system might be a good idea.
Problem solved.
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When the babel fish was in place, it was apparent Blindy. said:
They should say if you're 25 years old or younger, you will not get social security when you retire and no longer have to pay social security taxes. Then Bush should stop raiding the social security fund to pay for wars and actually save it for the people who are currently in the program who are depending on it when they retire.Problem solved.
Quick reality check there spanky: social security started falling apart a whole long time before the Bush administration.
It started going down the tubes upon conception, actually. Social Security was not intended to be a permenent system. Maradon! fucked around with this message on 01-12-2005 at 04:53 PM.
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From the book of Maradon!, chapter 3, verse 16:
Quick reality check there spanky: social security started falling apart a whole long time before the Bush administration.It started going down the tubes upon conception, actually. Social Security was not intended to be a permenent system.
I concur. Social Security needs to be dealt with. Even though it may do some harm now by changing it, it will do a lot more harm in the long term if we ignore the problem.
As for the idea of privitasing social security, though I'm concerned about how it will effect the lower class, I'm generally happy about the idea of being able to control my own money without someone else telling me what's best for my retirement.
As for the gay marrige thing in 2004, my biggest peeve was how much attention it was getting. I was, am still am, much more concerned about social security and other issues that will effect the whole of the nation such as no child left behind then a minor issue that has to do with how select group of indivudals conduct their personal lives. diadem fucked around with this message on 01-12-2005 at 08:36 PM.
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We were all impressed when Maradon! wrote:
Quick reality check there spanky: social security started falling apart a whole long time before the Bush administration.It started going down the tubes upon conception, actually. Social Security was not intended to be a permenent system.
I don't think I said that, but it is a fact that the Clinton Administration had earmarked a sizable portion of the surplus for Social Security and one of the first things the Bush administration did was spend it.
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From the book of Pvednes, chapter 3, verse 16:
How the hell do you privatize a public good?
scenario 1:
you get $x taken from your check for retirement. you don't see this money, the government takes it. in practice a lot of this money goes to other people that the government took from before you were born. it was based off a lot of people supporting a few who retired, but the whole baby boomer thing made a few people supporting a lot.. the numbers are getting pretty bad.
Anyhow, in this scenario, uncle same takes your cash for a while then is supposed to give it back to you when you retire. uncle sam isn't good with handling money and makes things pretty expensive when they don't have to be.
scenario 2:
you get $x taken fromy our check. uncle sam says you better not spend that money, you need it for when you retire. however, you can invest it how you want. so now you have to put that money in a retirement fund, but you have control over it. it's your money, and you know you will still have it when you retire.
In this scenario, you can partially privatise, or choose to have uncle sam take care of your money, or not.
This is very good for the upper middle class and above, because they will most lilely have a much better return on their money if they invest it themselves then have it sitting in a social security account. Enron aside. diadem fucked around with this message on 01-12-2005 at 08:50 PM.
I can't believe somthing vital like growing food is in the hands of private citizens, we should collectivize all the farms, for the public good!
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Kinanik painfully thought these words up:
Yes, how dare we let people plan for their own future!I can't believe somthing vital like growing food is in the hands of private citizens, we should collectivize all the farms, for the public good!
Slippery slope meter....off the scale....
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Kinanik had this to say about Duck Tales:
I know, but the government taking control of somthing for the 'public good' is generally a stupid idea, and it's been proven that private firms tend to be more efficient than the government.
Not 'the public good', a public good; as in good or service, captain economics.
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Aw, geez, I have Pvednes all over myself!
It's not an investment plan, though. It's much closer to insurance.
Exactly. It's a social safety net. Bush is being disingenuous in letting people assume that the money put into SS is still theirs. It's not, and it never was. Whether you agree with SS or not, this fact should be indisputable. This is why I'd prefer the question be not one of privatization, but of out and out elimination.
Another interesting thing this shows is that the neocons are, in fact, not committed to letting the free market be free. The proposed private accounts would still be managed by private firms, who would earn huge commissions from the government for managing these accounts. It stands to reason that, if people want to invest their money, they'd be far better off doing it on their own, not with the government being the middle man.
Moreover, if these accounts aren't mandatory, what's the point of having them in the first place? Why not just cut Social Security however you want to cut it, and let people do their thing?
The whole idea smells fishy to me, but I'll reserve judgement until the full details of the plan are unveiled. The minutia of it will be most interesting, indeed.
Under capitalism, man exploits man. Under communism, it's just the opposite. - John Kenneth Galbraith
But weather Social Security is public good is debatable. The definition of a public good is somthing that someone benefiets from that does not diminish the amount others can get. Like protecting the country from invasion; Social Security does not fit this description, people benefiet by exploiting others.
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Kinanik's fortune cookie read:
My bad. I read 'the' instead of 'a'
But weather Social Security is public good is debatable. The definition of a public good is somthing that someone benefiets from that does not diminish the amount others can get. Like protecting the country from invasion; Social Security does not fit this description, people benefiet by exploiting others.
There are two criteria to a public good. These are nonrivalry and nonexcludability. To determine this about a good, there are two questions to ask:
- Is there competition involved in obtaining a given good?
- Is it possible to exclude a person from consumption of a given good?
Social Security is one of the quintessential public goods. It is a basic human right. [UDHR, article 25,I] No-one may be excluded from it, and there is no competition involved in obtaining it.
To eliminate a social security system would be to withold yourself a basic human right, and infringe directly upon that right for those who don't agree.
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Kegwen had this to say about Robocop:
Wait, how is Social Security even in the slightest a basic human right that every living being deserves? Unless of course I'm completely misunderstanding its purpose... Please elaborate.
Social Security is a mechanism to protect people in the event of unavoidable loss of livelihood, as per the UDHR. The right to security in such circumstances is an inalienable human right, and it is your government's duty to protect your rights.
That being said,
The tax you pay for it is tax, it isn't your money anymore, it's public funds. You are not investing by paying your social security tax, you (and everyone else) are providing for a service available to everyone by right. If you're financially secure, it's basically another piece of insurance. If you're not, it's the safety net beneath the tightrope you're walking.
Reason #426 to get out of the UN.
Some of these rights are obvious, and already given in the US Constitution... It's a well meaning document, but it's riddled with contradictions and isn't realistic.
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Kinanik wrote, obviously thinking too hard:
I'm pretty sure the US isn't legally bound by the UDHR, and if it is, then whoever made it so is... dumb. That, and we've already violated plenty of those "rights".Reason #426 to get out of the UN.
Some of these rights are obvious, and already given in the US Constitution... It's a well meaning document, but it's riddled with contradictions and isn't realistic.
The UNHR is applicable to every human being. It doesn't matter if you're an American, a South African, or Mamdouh Habib, you are entitled to the minimum rights set out in the UDHR. It is a list of the minimum rights you have as a human being, and represents customary international law. Also, no, it is not riddled with contradictions, and yes, it is perfectly realistic. It's not a treaty; it applies even if your nation has not signed it: hence, Universal Declaration.
Examples as to treaties which legally enforce it, (to which the United States is legally bound) are the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social, and Cultural Rights.
[Edit: The latter, the ICESC, being the one that binds you to social security in article 9. If you eliminate social security without replacement, you're in breach of a very important treaty.] Pvednes fucked around with this message on 01-13-2005 at 06:26 AM.
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Kinanik had this to say about Pirotess:
Reason #426 to get out of the UN.
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Check out the big brain on Tarquinn!
Wanting to quit the UN because of human rights. Whoa.
It'd be very, very funny if it weren't so scary...
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There was much rejoicing when Pvednes said this:
Social Security is a mechanism to protect people in the event of unavoidable loss of livelihood, as per the UDHR. The right to security in such circumstances is an inalienable human right, and it is your government's duty to protect your rights.That being said,
The tax you pay for it is tax, it isn't your money anymore, it's public funds. You are not investing by paying your social security tax, you (and everyone else) are providing for a service available to everyone by right. If you're financially secure, it's basically another piece of insurance. If you're not, it's the safety net beneath the tightrope you're walking.
it sounds like you are describing the welfare system. we still have that.
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diadem stopped staring at Deedlit long enough to write:
it sounds like you are describing the welfare system. we still have that.
A pension is a special case of welfare, for the disabled and for the non-self funded retiree.
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Pvednes spewed forth this undeniable truth:
A pension is a special case of welfare, for the disabled and for the non-self funded retiree.
what's wrong with privatising that? if I want to invest my money for when I retire, I should be allowed to. if I fail, it's my fuck up. it's true that the rich will get more money and the poor will get less, but the idea of captalisim is that you try to make the most of what you can. the idea of communisim is that everyone is given equal pay and taken care of by the government. we are not a communist society. the reason is that you have more potential to strive out on your own when you have more control of your own posessions then when someone else has a say.
as for money going to people on disability and unemployed looking for jobs, there should be taxes taken away for that, and it should go to that. however, this should be reformed too. right now the whole welfare process is kinda messed too. a public works program or something to generate jobs would be nice too, though i doubt the unions would allow such a program.
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A sleep deprived diadem stammered:
what's wrong with privatising that? if I want to invest my money for when I retire, I should be allowed to. if I fail, it's my fuck up. it's true that the rich will get more money and the poor will get less, but the idea of captalisim is that you try to make the most of what you can. the idea of communisim is that everyone is given equal pay and taken care of by the government. we are not a communist society. the reason is that you have more potential to strive out on your own when you have more control of your own posessions then when someone else has a say.as for money going to people on disability and unemployed looking for jobs, there should be taxes taken away for that, and it should go to that. however, this should be reformed too. right now the whole welfare process is kinda messed too. a public works program or something to generate jobs would be nice too, though i doubt the unions would allow such a program.
You mean socialism, and socialism has nothing whatsoever to do with it. You're a Western Mixed Economy, just like us. Anyway, if you have the money, there's no-one stopping you self-funding your retirement, the pension is there if you can't. That's the point. If you can self-fund, great! You personally do not need the use social security, because you've made your own personal pension for yourself.
The reason it can't be privatized, is because its purpose is to protect the people who can't pay, more than the people who can.
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Nobody really understood why Pvednes wrote:
There's been far too much privatization, anyway. Needs to be more nationalization. Much more.
No.
Where's the incentive to do work/be genius?
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Waisz attempted to be funny by writing:
No.Where's the incentive to do work/be genius?
To...get paid and make a living, perhaps? 
Genius, on the other hand, is its own reward.
Rather, I favor the total abolishment of social security and welfare style handout programs. In their place, institute a single social service that offers "security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond [a person's] control" but only in the form of federally administered facilities with apartments, cafeterias, and clinics that consist of little else but what an individual needs to survive. People down on their luck could take advantage of them, but no more drug dealers making six figures and collecting a welfare check. No more living in a $170,000 house and driving $50,000 vehicle and collecting a social security check just because you don't feel like working anymore. No more passing on that 401k or IRA just because you don't feel like planning ahead.
Such facilities could even be run in part by volunteers. The government could offer incentives to individuals who volunteer there in much the same way they offer incentives to join the military, things like tax breaks, scholorships, college credit, and so on. "Social Security" in the event of circumstances beyond an individual's control is preserved without engaging in a pseudo-communist "redistribution of wealth" program. The system would require some government funding, but on the whole it would amount to a fraction of what is spent on handouts. Maradon! fucked around with this message on 01-13-2005 at 10:39 AM.
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Maradon! thought about the meaning of life:
I'd have to say I'm against the privatization of social security on the grounds that what they're suggesting really isn't privatization, the funds would remain government money. This creates the problem that when you throw so much government money onto the open market, it would be impossible to avoid giving government undue influence over private business. There's enough favor currying bullshit in government without businesses competing for social security funds.Rather, I favor the total abolishment and of social security and welfare style handout programs. In their place, institute a single social service that offers "security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond [a person's] control" but only in the form of federally administered facilities with apartments, cafeterias, and clinics that consist of little else but what an individual needs to survive. People down on their luck could take advantage of them, but no more drug dealers making six figures and collecting a welfare check. No more living in a $170,000 house and driving $50,000 vehicle and collecting a social security check just because you don't feel like working anymore. No more passing on that 401k or IRA just because you don't feel like planning ahead.
Such facilities could even be run in part by volunteers. The government could offer incentives to individuals who volunteer there in much the same way they offer incentives to join the military, things like tax breaks, scholorships, college credit, and so on. "Social Security" in the event of circumstances beyond an individual's control is preserved without engaging in a pseudo-communist "redistribution of wealth" program. The system would require some government funding, but on the whole it would amount to a fraction of what is spent on handouts.
Holy crap, I almost agree with you on an economic issue. Sort of.
http://www.socialsecurity.gov/pubs/10055.html
http://www.socialsecurity.gov/qa.htm
edit: i don't see any indication stating that under the current system that you don't get back an amount based on what you put in. diadem fucked around with this message on 01-13-2005 at 11:02 AM.
