Posted on 08/29/2011 10:26:14 AM PDT by TruConservative
TC, I have to say, I haven't seen an @ss-whipping this good on FR in quite a while, so I'll take a different approach to point out another "chink" in the SS armor.
You mentioned inflation. IIRC, social security recipients haven't received a COLA for the past two years. Why not? The government says that inflation is flat. Say what?
Yes, another financial accounting gimmick. Those government bean-counters only look at prices of certain goods and services when they calculate the Consumer Price Index. Unfortunately, many energy and food costs are left out of the equation, which leaves inflation "flat."
Have you filled up your tank lately, or bought food from a grocery store? Remember how much that cost a couple of years ago? No? It was significantly lower in 2008, than it is today.
Let me ask you something else, TC. What did people who reached retirement age do, prior to 1935? Did all of them suddenly drop dead? Did they all live in the street, and pick through garbage cans? I suspect they did not. I also suspect that people who became eligible for SS back in 1935, weren't suddenly "living the high life," with all their basic needs met by SS.
She died about 40 years ago. Complicating the matter is the fact that age lied about her age for years. I’m really not sure what her rights were back then as a full time employee.
Dude, how old are you? I'm 36, and I know *exactly* what's going to happen.
Baby Boomers expect Gen X and Millenials to pay for their retirement. Yeah, Boomers paid in $30 dollars a month and saw movies for a nickel. Now they want hundreds of dollars a month forever because *they earned it*. Uh huh.
Gen X will pay for Baby Boomer retirements and we'll get nothing in return. We're already planning around it. When I retire, it'll be without Social Security. There's zero chance I'll see a dime, and we're getting off lucky compared to our kids.
Millenials will get nothing but a gargantuan bill for people that are either already dead or living in unearned luxury. You'll be lucky if they don't bolt your doors and burn your retirement home down once they get done counting the zeros. Their retirement will be spent paying the interest off on yours.
It has worked all these years because only 1 of 4 was expected to live to be 75. Raise the “retirement age” I don’t plan on retiring and depending on social security anytime soon and I am one of those 61 year old boomers.
But I am getting tired of the 30 somethings complaining about all the boomers who created their nightmare. Their solution is slip us the needle and get rid of us all. There wasn’t one of the 78,000,000 “boomers” alive in 1935, the first one was born in 1946, so blame your great grandparents for the whole mess. Oh, guess they are mostly dead, so aim your hatred at those now eligible to draw from it. At least $3 trillion of that fund was paid for by those same boomers who also paid trillions in income tax that was wasted on all those snot nosed punk’s education. Once they have paid their share, then they may have earned the right to complain. Until then stuff a sock in it.
Same here, 33yo and will NEVER see a dime of the hard earned money that’s been stolen from each of my paychecks since I started working.
Thanks for takin’ my money, a**holes!
Wow, I expected negative responses, but these!!
I’m not sure where to start. I guess I’ll tackle just two points: I contend that SS cannot go broke. By that, I mean it will never run out of money or fail to be able to provide money. At worst, it will provide only about 74% of what is being promised, because the inflow will be 74% of the promised outflow. I’ll use the analogy that one is used to earning $1000 and spending $1000 per month. If one’s salary drops to $740, then one just spends $740, and you don’t go broke. You just get by on less. SS is the same. When the income drops below 100%, then the benefits drop. In the future (roughly year 2080), without tweaks, then the SS beneficiary who may be expecting $1000/month will only get $740/month.
(Incidentally, I got a 68% value from an anti-SS site; the SSA projections on page 11 of http://aging.senate.gov/crs/ss1.pdf show that SS can pay close to 80% up until the year 2063)
Second: the definition of a Ponzi scheme doesn’t relate to SS for a number of reasons:
1. Ponzi schemes involve intentional fraud - the info on SS is open and available to all
2. Ponzi schemes enrich some scoundrel. No one is getting rich off SS
3. Ponzi schemes involve complete collapse at some point. SS never collapses. As I say, out to the year 2063, we are at close to 80% funded, and even out to the end of the century we are at 74% funded.
This is really important, because dealing with SS is at the heart of dealing with our deficit. I absolutely 100% believe we must change SS, but we can change it without stranding our elderly population who currently rely upon it. Aren’t there posters here who get SS checks? Aren’t there posters like me who have been paying into social security since high school? Don’t you want to get something back?
SS can not go broke. It is a mathematical impossibility, if you define broke as “out of money.” SS may have to cut its payments by 20% or so, but that is not broke.
SS is not a Ponzi scheme. There is no intentional fraud, there is no deceit, there is no mastermind running away with the money, and there is no chance of complete collapse.
Again - this idea that a 33yo “will never see a dime” and so on is not true. Even if nothing is done to SS and we just run on autopilot, the 33 year old (who presumably retires in another 32 years in the year 2044) will get about 80% of his SS benefit. That is, take all the workers in the year 2044, take 6% of their wages and matching from employers, divide by the total expected number of retirees, and you end up with a value that is 80% of full SS benefits.
You cannot say with certainty that the stock market won’t collapse. I know people who had Enron stock, for example, and that became worthless. SS, however, is a fixed fraction of all the salaries in the nation. It cannot go broke. It cannot disappear. It cannot be zero return. It doesn’t suffer from inflation (it rises with inflation automatically). It isn’t dependent on past savings. It isn’t variable based on the whims of the market. That’s pretty incredible secruity if you think about it. If you really stand back and look at it, SS is a smart idea because of all these reasons.
I think people attack it because they don’t understand it, or they think it is meant to do something other than be a safety net/supplement. If you say SS is a minimal retirement income that protects all of us against the risk of total poverty, and provides a nice supplement to our savings, then SS fulfills its function admirably.
Everyone that expects to get theirs on the backs of their children and grandchildren chance at a prosperous life is the enemy.
If "stuff a sock in it" is your attitude, then you can expect their boot kicking you to the curb, because you'll have earned it. The 'greatest generation' and the Boomers are a disgrace for accepting this deal, but Gen Xers know the party is over. Deride us as "snot-nosed kids" all you want, but we're stuck with the problems you so maturely kicked into the future for us to deal with.
You'd better hope we do deal with it, before our kids are old enough to. If you think they're going to starve their own kids because you paid your dues and aren't willing to negotiate any changes to 'the third rail of politics', then you deserve to be in the street.
I have no issue with her misuse of the system. The point of my narrative was to describe how the demographics of smaller family size and longer life make the actuarial assumptions under SS today absurdly unworkable. One case does not affect that analysis.
“the actuarial assumptions under SS today absurdly unworkable.”
Not absurdly unworkably, just 20% unworkable. It’s true that in the past the ratio of workers to retirees was higher, but in the past SS had huge surpluses. We don’t really need huge surpluses - the politicians raid them anyway. All we need is a balanced system of inflow equals outflow. We have a balanced system today. In the future, the projections are for inflow to equal 80% of outflow in the period of 2040 to about 2065, and then fall to 74% by the year 2100. (based on page 11 of http://aging.senate.gov/crs/ss1.pdf )
For the vast majority of "Sheeple", it is a Ponzi scheme, the politicians have lied to them for so long, and they simply dont care at this point, because ultimately, it has become (and for people who DO know) a Pyramid scheme. Look up Pyramid Parties, from the 70's I believe? The Government put and end to those, ironically.
2. Ponzi schemes enrich some scoundrel. No one is getting rich off SS
Dont be naive. Politicians are enriched with VOTES. More votes than mere money could buy.
3. Ponzi schemes involve complete collapse at some point. SS never collapses. As I say, out to the year 2063, we are at close to 80% funded, and even out to the end of the century we are at 74% funded.
And a Ponzi scheme could do the same thing, they only collapse because they are discovered and the operator is booked.
Look, at this point, we are not going to get rid of SS as we know it, but we need to look long and hard at how to make the best of it.
You're defending socialism!
Nobody wants to slip you the needle, BlowNegative.
However, the reality here is that in order to sustain Socialist Insecurity, taxes are going to go up - by a LOT. And, at some point, for those Gen X-ers and Millennials with useful, productive educational backgrounds and skill sets, other tax jurisdictions are going to begin looking awfully attractive in comparison to the United States.
In fact, folks from other tax jurisdictions are already here in the United States, recruiting its best and brightest...to leave.
If I were you, I would be very nice to Gen X-ers and Millennials, especially the ones in areas like engineering, technology, the hard sciences, and accounting - they are the ones working to pay your "benefits," as well as for dozens and dozens of Big Government programs started by Republicans and Democrats alike - tell them to "stuff a sock in it" one too many times, and they may eventually tell you to go to hell.
I don’t believe current retirees set up the current system. They played by the rules and expect those rules not to change now that they are retired.
I’m not retired yet, but I’m headed in that direction, and I want social security to be overhauled. I want medicare over-hawled too. It’s not good for the nation the way it is set up. Big news huh...
Retirement, health care, life insurance, vehicle insurance, disability insurance, household insurance, and catastrophic loss insurance should be something that all citizens become self-invested in by the time they are thirty.
That sounds very expensive, but if you consider that you wouldn’t have to pay out high levels of insurance and retirement fees each paycheck/month, it would soon become apparent that citizens could not only cover themselves for each of these categories, but save tons of money as well.
When you first started working, you would purchase coverage that would take care of 90 to 95% of your loses in relevant coverages. As you worked longer, that 90 to 95% would relatively soon become coverages for anything above $10,000 for medical, perhaps $10,000 for your vehicle. You would pay out a large deductible, and the insurance company would only pay out if the total became catastrophic.
By the time someone was thirty to thirty-five, their insurance payments would be very low, as their capitalization would increase dynamically.
Instead of paying out thousands of dollars per year for vehicle insurance, you would be paying yourself, building up a fund that would not only self-insure you against loss, but go on to become a massive retirement fund by the time you were 65 to 70.
At retirement you could use equity and other savings to pay out a large health deductible, that would cover most everything until a catastrophic loss. With home equity and savings, each of us would be well covered.
As our life progressed, we would have massive amounts of cash saved up. Although it seems that could be lost due to catastrophic loss, cheap catastrophic loss insurance would prevent that.
Something along these lines needs to be incorporated into the system over time. If we got to work on it today, our citizens would be better off in no time, and our government would be out of the favors for votes routine as well.
If 20% of the hull of your boat were missing, it would be absurd to take it for a sail
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