Posted on 01/11/2005 10:19:34 AM PST by Hank Rearden
Wrong, Mom worked 30 years then died of Cancer and Dad recieved a check for 255 dollars.
Meanwhile Jasmine has a friend down at SSI, who suggested to Jasmine that her children acted a big distracted and perhaps she should see a doctor about getting them diagnosed as ADD or any one of 1 million other acronyms describing some 'condition'.
They, all 8 of them now recieve a Monthly check along with Jasmine to see to it that they are fed properly.
$255 is nothing after paying thousands into the system! When dad dies, his family will get nothing. I know. When my mother-in-law died, we did not receive a SS death benefit check because she had gotten one when her husband died. One death benefit check per married couple! Whoever dies first, the surviving spouse gets it. When that surviving spouse dies, the surviving family gets nothing. As for SSI, I am not talking about that. I am talking about paying thousands of dollars into a retirement system then not getting anything out if you die before you are old enough to collect!
The Social Security system will give back the Treasury bonds held in the trust funds — and the interest on those bonds, which is held in the form of more bonds — and demand cash for them.
It is a legal fiction that the "government" can own treasury bonds. I'm constantly amazed every time I hear someone try to act as if these are real bonds that are somehow going to be "redeemed". The entire scam here is that you and I have been taxed at much higer rates than has been necessary for SS for years. Once the geezers start retiring, those of us still not driven into the underground economy (which will begin to look more and more attractive each year), will have our taxes raised again to provide welfare for the old.
Unfortunately, Pres. Bush can't issue edicts, he must persuade Congress (and the Congress critters always worry about re-election.)
But Pres. Bush can point to several examples. For example - the city workers in Galvaston, TX decided in the late '70's to go off Social Security and onto a "private plan" that operates much like what Pres. Bush proposes to implement gradually. The workers there retire with benefits that are 5 to 8 times better than Social Security. (IRS closed the loophole, so others could not benefit from this option.)
Another important example - Chile. Chile (in the 1970's, early 80's ??) had a social security system that was going (or already) bankrupt. Advisors from Univ. Chicago School of Economics (think Milton Friedman) provided advice, which was taken by Chile. Workers over 40 were allowed to stay on the existing system, under 40 - thrown off, but they had the equivalent amount of money required to be invested in "private accounts" (similar to what Federal Employees have in Thrift Savings Accounts). Over time, large amounts of capital (savings - vs. government bonds and wasteful spending) provided a significant growth in Chile (lots more private ownership!!) ... and retirement plans were significantly better than under the old system.
Pres. Bush knows that a startup system will probably whet the appetite for more and more privatization ... and eventually, we might end up doing what Chile did ... and everyone will benefit.
If we followed the Chilean model - if we allowed everyone under 40 to drop out, and their 6% contribution went to their own TSP, while the matching 6% went to existing Social Security liabilities ... we would work our way out of the existing mess.
The ONLY drawbacks are:
1. The government would no longer have extra income (under the table) ... so it would have to cut spending or raise taxes. It would probably do the latter, instead of the former.
2. The Democrats would be deathly afraid that even the poor and lower-middle class workers would suddenly be part of the "investor class", and therefore these workers would be supporting more capitalistic laws (tort-reform, more reasonable regulations on business, etc.) ... and the Democrat base would be eroded ... THEREFORE the Democrats will resist even this plan to their last dying breaths.
Mike
That's another one of the things that really frosts me. SSI is so full of abuse... another "well-intentioned" idea that went haywire.
Thanks for my new Screen Name, I especially like having gotten it for nothing just like the SS income I am entitled to.
Thanks for my new Screen Name, I especially like having gotten it for nothing just like the SS income I am entitled to.
26 posted on 01/11/2005 12:31:26 PM PST by Greedy Geezer (Gimme, gimme, gimme dat ding)
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One of the good things about privatizing some part of the SS mess right now is that the FedGov will never get the "extra" money into the General Fund while we are still running a surplus. Of course if they have it they will spend it regardless of the fact that we have to start paying back in a few years. Better to not get the "loan" in the first place and think we have enough for another giant program.
Secondly, giving people ownership of their accounts will begin the process of weaning and take the role of Govt down a notch since the people will not be totally at the mercy of future Congresses for SocSec benefits.
Pres. Bush is tackling the problem in the only way it can be tackled, there is no way to shut it down cold turkey.
Exactly.
Both major political parties perpetuate The Big Lie regarding Social Security. The Big Lie has existed since Social Security's inception. The debate over "privatization" is only the latest version of The Big Lie.
The Big Lie is that Social Security is some kind of retirement savings plan.
It is NOT.
Social Security is a socialist income redistribution scheme, nothing else.
Those who are working are taxed to provide a "safety net" for those who are less fortunate.
Originally, this meant retirees and surviving dependents.
Congress has, of course, complicated it far beyond this over the last 65 years.
But one fact remains: it is NOT a "savings plan", it is an income redistribution scheme.
A major facet of The Big Lie is that "we have to do something so that Social Security remains solvent in the future.
Poppycock!
In today's age of modern computerization, the computation for operating an income redistribution scheme that remains perpetually solvent is quite simple:
The only change necessary to the current system is that monthly payments to eligible recipients would be a variable amount, not fixed.
THERE IS ABSOLUTELY NO NEED FOR A MULTI-TRILLION DOLLAR "TRUST" FUND!!!
Congress should NEVER have been permitted to confiscate so much money from the American People in the name of The Big Lie. This fund is nothing but a slush fund that Congress raids to pay for other government expenditures. If private sector employers did the same thing with their companies' pension funds, they'd be placed in prison. The "privatization" plan proposed by Bush is merely an attempt by Wall Street brokerage firms and financial institutions to get in on the scam: grab a portion of a constant revenue stream (guaranteed by taxation) from which they can skim their commissions.
The American People need to wake up and put these liars and thieves in prison.
He can fix it, well for a short time, one word, Mexicans.
I never believed in Y2K but this is going to turn out much much worse than any chicken little ever dreamed that Y2K was going to be. I may be doomed to slavery myself but I'l be d@m^ed if my children are going to be.
Great article. Thanks.
[/evil grin]
If the all knowledgeable Charlie Rangel says there is no problem with SS, then there is no problem. Geez! /sarcasm/
The leftist opponents of Social Security reform want you to believe there’s no “crisis,” and that whatever problems the system may have won’t materialize for more than 35 years. Funny how such equanimity and patience seem to elude them when the subject is global warming.
Here he is evidently referring to 2042, the year that the Social Security trust funds are projected to be exhausted. He continues:
It’s even funnier when you realize the objective fact is this: The Social Security crisis actually starts a lot sooner than advocates of reform are saying. The Social Security crisis begins to materialize in just 5 years.
This is a rather stunning revelation since the trust funds are projected to run surpluses until 2018. How is is this a crisis? Luskin explains:
Right now the Social Security program collects more in taxes — both FICA taxes from current workers and income taxes on benefits from current retirees — than it pays out in benefits to retirees. That surplus goes into Social Security trust funds, where it is used to buy Treasury bonds that are held as an investment toward the payment of future benefits. The purchase by the trust funds of those Treasury bonds is no different than if you or I bought them. The Treasury issues the bonds in exchange for cash, which is used to finance the current expenditures of the federal government.
According to the latest annual report of the Trustees of the Social Security Trust Funds, the surplus in 2004 was $64.4 billion dollars. It will be higher this year — at $87.7 billion. The surplus will keep getting bigger and bigger through 2008, when it will reach $108 billion. Each year, that’s more and more money that the federal government won’t have to raise from the world capital markets. It’s a captive audience of bond buyers — and a growing one.
These numbers can be seen in column 7 (third from the right) of the following table:
Operations of the Combined OASI and DI Trust Funds, Intermediate Assumptions
(in billions of current dollars)
----------------------------------------------------------------------------
Non- Assets Non- Non- Peak
interest Interest Total at end interest interest minus
Year income income income Cost of year surplus deficit surplus
----------------------------------------------------------------------------
2004 564.7 88.9 653.7 500.3 1684.1 64.4
2005 605.2 95.5 700.7 517.6 1867.3 87.6
2006 634.5 104.0 738.5 538.3 2067.5 96.2
2007 667.4 115.0 782.5 563.4 2286.6 104.0
2008 701.9 128.6 830.5 594.0 2523.1 107.9 0.0
2009 735.3 142.9 878.3 631.6 2769.7 103.7 4.2
2010 771.9 157.9 929.8 670.0 3029.6 101.9 6.0
2011 811.8 173.9 985.7 711.9 3303.3 99.9 8.0
2012 850.6 190.0 1040.6 760.3 3583.5 90.3 17.6
2013 889.0 206.2 1095.2 811.6 3867.1 77.4 30.5
2014 930.3 223.7 1154.0 866.7 4154.4 63.6 44.3
2015 973.1 241.5 1214.6 926.8 4442.1 46.3 61.6
2016 1017.7 259.4 1277.1 992.0 4727.3 25.7 82.2
2017 1064.0 277.4 1341.4 1061.5 5007.2 2.5 105.4
2018 1112.4 295.3 1407.6 1135.8 5279.0 -23.4 -------
2019 1162.1 310.5 1472.6 1215.0 5536.6 -52.9 359.8
2020 1213.9 324.8 1538.6 1299.4 5775.8 -85.5
2021 1267.3 337.9 1605.2 1387.7 5993.3 -120.4
2022 1322.7 349.7 1672.4 1479.6 6186.1 -156.9
2023 1379.7 360.0 1739.7 1576.1 6349.8 -196.4
2024 1439.3 368.5 1807.8 1676.9 6480.7 -237.6
2025 1501.1 375.0 1876.1 1782.2 6574.5 -281.1
2026 1565.5 379.4 1944.9 1891.5 6628.0 -326.0
2027 1633.0 381.3 2014.2 2005.0 6637.2 -372.0
2028 1702.9 380.5 2083.5 2121.6 6599.2 -418.7
2029 1775.9 377.0 2153.0 2240.8 6511.3 -464.9
2030 1852.1 370.6 2222.7 2364.0 6370.0 -511.9
2031 1931.6 361.0 2292.6 2491.5 6171.1 -559.9
2032 2014.7 348.0 2362.7 2622.9 5910.9 -608.2
2033 2101.2 331.4 2432.6 2756.8 5586.7 -655.6
2034 2191.4 311.1 2502.4 2893.2 5195.9 -701.8
2035 2285.3 286.9 2572.2 3032.3 4735.8 -747.0
2036 2383.3 258.6 2642.0 3174.6 4203.2 -791.3
2037 2485.6 226.2 2711.7 3320.0 3594.9 -834.4
2038 2592.0 189.3 2781.3 3468.3 2907.9 -876.3
2039 2702.7 147.8 2850.5 3620.4 2138.0 -917.7
2040 2817.9 101.4 2919.3 3777.7 1279.6 -959.8
2041 2938.1 49.8 2987.9 3941.3 326.2 -1003.2
-------------------------------------------------------------
56589.1 9626.9 66216.1 67420.6 1071.4 -11902.9
----------------------------------------------------------------------------
Source: 2004 Trustees Report on OASI and DI Trust Funds, Table VI.F9
online at http://www.ssa.gov/OACT/TR/TR04/lr6F9-2.html
As can be seen, these numbers are Social Security's non-interest surpluses consisting just of the revenues from Social Security taxes minus the outlays to current beneficiaries. It does not include the interest that Social Security is earning on its Treasury bonds. This interest is shown in column 3 of the table and is credited to the trust funds, adding to its assets in column 6. In any case, Luskin continues:
But in 2009, just 5 years from now, the surplus will start to shrink. In 2009 it will fall to $103.7 billion, and in that year the federal government will have to go to the capital markets to raise $4.3 billion that it didn’t have to raise the year before. That’s not a lot of money in the grand governmental scheme of things. But it’s an important turning point for Social Security — it’s the year the crisis begins.
This is truly stunning logic. The Social Security surpluses are going to grow steadily through 2008. In 2009, the surplus will drop back to about the 2007 level and this is the beginning of a crisis. This only makes sense if you look on the general fund (the entity that is borrowing the surpluses) as a sort of drug addict that will use more and more as the available surplus increases. Then, when the surplus backs off, it will be thrown into withdrawal, despite the fact that the surplus will be larger than it is now. In any case, this is a crisis for the addict, not the supplier who is cutting back his donations.
Luskin goes on to describe the point in 2018 when Social Security will start running a deficit and cashing in its Treasury bonds:
Most observers point to 2018 as the earliest year for the Social Security crisis to begin. But that’s only the year the crisis will pass an especially attention-grabbing milestone. That’s the year, according to the trustees, that the Social Security surplus will disappear entirely and become a deficit. In other words, for the first time tax revenues will be less than the benefits paid out that year. From the standpoint of public finance, though, it will just be another painful year in which the federal government had to raise more money from capital markets — or raise taxes more or trim more spending — than it did the year before. By 2018, the Treasury will have already received $359 billion less cash each year, cumulatively, than it received in the peak year of 2008.
The $359 billion number can be seen in the far right column of the table. It is the amount less than the peak surplus that the general fund will be able to borrow from 2009 to 2017. Once again, this number only has real significance if you look at the general fund as a drug addict going through withdrawal.
After a few more paragraphs, Luskin goes on to describe the point in 2042 when the Social Security trust funds are exhausted:
From the standpoint of public finance, the crisis ends in 2042 when the trust funds’ hoard of bonds is completely exhausted. Under current law, Social Security benefits will then be trimmed such that they will be payable out of current tax revenues. According to the trustees, benefits will have to be cut 27 percent from their present scheduled levels, with the situation only getting worse as time goes by. So, yes, the drain on the Treasury will end in 2042 — but at that point the crisis will simply be inherited by retirees in the form of lower benefits.
What ends in 2042 is the general fund crisis. According to most people, this crisis will begin in 2018 when the Social Security trust fund begins to cash in its bonds. According to Luskin, it begins in 2009 when the general fund will start going through "surplus withdrawal". In any case, 2042 is when the general fund crisis ends and the Social Security crisis begins.
Luskin almost admits this fact in the following:
The opponents of reform claim that the Social Security crisis is, in fact, a crisis of general public finance — not one of the Social Security system itself. They see Social Security as an entity separate from the federal government, and maintain that its own dedicated stream of tax revenues and trust-fund assets will keep it going for more than a third of a century.
That’s a fair point of view, as far as it goes. At the same time, it is dangerously myopic to treat Social Security in isolation from the overall finances of government. That would be like finding nothing troubling about a factory that dumps pollutants into a river. That may be no problem for the factory itself, but it can be a major problem for everyone downriver. And when it comes to Social Security, we’re all downriver.
If deficits are pollutants, then what is the factory that is currently dumping pollutants, creating a problem for everyone downriver? That's right, it's the general fund. In any case, Luskin concludes his article:
But the case of Social Security is even worse than that. By 2042 the pollution will back up into the factory itself. Unless the opponents of reform don’t think it’s a problem to automatically cut benefits by 27 percent all at once in 2042, then Social Security itself has a “crisis” — maybe not right now, but surely by then.
Don’t be too hard on the advocates of reform when they throw the C-word around. It’s fully justified. In fact, I’d even dare to use that most dangerous of all political words to describe the crisis. Yes, the I-word: imminent.
I'd take that a step further and say that the crisis is already upon us and that recent policies have mostly made it worse. And the object in dire need of reform is the general fund.
The most recent version of this response can be found at http://home.att.net/~rdavis2/luskin7.html.
Well then, I stand corrected. I should also wait to get drafted any second as well. [/sarcasm]
Most stupids don't get it. They never have, they never will. They simply live on the Socialist and Democratic GiveMe Plantation and wait for Uncle to take care of them. That is a fact of life. They are here now and always will be. They will be the ones who will not put in the 2% should that become a reality. They don't want the responsibility of making a future for themselves, thus they will continue to vote for socialism and socialist baby-killers, and not do anything for themselves.
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