Posted on 05/25/2005 8:42:08 AM PDT by qam1
These so called prefunding or transition costs will require some borrowing to cover the reduced revenue coming in from SS, which is a pay as you go system. However, it also reduces our future liabilities. Borrowing less now, saves us from borrowing more in the future. Estimates vary widely on how much will be required.
Personal accounts will carve out 4% from the total of 12.4% OASDI. The USG will have to come up with difference to cover the loss of revenue. However, personal accounts will decrease the USG's long-term liability for the remaining defined benefits portion of the program. The individual should actually do better with the combined benefits, PA and SS, than those promised currently under the system. It is a win-win solution.
As far as back up funding, the best idea I have heard is to take out a loan to cover the lost funds. And retire the loan over the same length of time that the retirees are saving in their own accounts.
If you mean by taking out a loan, adding to the publicly held debt, that is what we would have to do unless we want to cut back on discretionary spending, which includes defense. The Dems and AARP have been putting out the phony story that the Bush plan includes having individuals pay back part of the money from their PAs to cover transition costs. This is bogus nonsense. Just some scare tactics to confuse and frighten people.
Social Security pays more than $450 billion in benefits each year. If nothing is done, by 2060, the combination of Social Security and Medicare will account for more than 71 percent of the federal budget.
What is your solution?
Yup, thats how I see it too.
I would eliminate the SSTF and make SS a line item in the federal budget, which would be funded the same way we do with Medicare B. If there is a shortfall, Congress would have to come up with the money. All the SSTF represents is an obligation to honor our commitment to SS.
I would take a look at the COLA formula to see if it is a fair way to compute annual increases. I might consider a short term national sales tax, non-regressive as possible, which could be used to fund the transition costs rather than borrowing the money. There would be a sunset clause.
Eventually, I would like total privatization for the retirement portion of SS and retain the survivors and disability portions under SS. Medicare is a much bigger problem and harder to solve, which is why we need to get SS off the table.
It's not a question of whether it's likely to happen (and I very much hope it doesn't; if I had a hex you could use to ward them off, I'd let you borrow it). The point is that it's an accurate analogy to what government does in the name of "democracy".
Thank you, there was more negation in your sentence than I read, sorry, I agree with your point.
Thank you for the offer to lend me a hex if you had one. Yes, the government does take a lot of money from us. I have never minded paying taxes because I know it takes a lot of money to run this country. However, I mind when they waste it. I mind that very much.
Whatever it is, your ideology on this issue is not conservative.
What do you think *healthy* people who reached the age of 60 or so did before SS was around? Just sat around all day and waited for someone to feed them?
Jobs are available. I see lots of older folks working at places like McDonald's. And of course job status will change with age--it's a fact of life. Folks who are eligible for SS but continue to work at least part-time deserve a ton more respect than those who slide by suckling the gubmint teat.
Personal accountability, family, churches, and charities could easily replace SS.
It's because of the attitudes of folks like you that your children and grandchildren and others of the same age will suffer.
Repeat this to yourself 50 times a day, and maybe you'll eventually understand:
Socialism does not work.
Socialism does not work.
Socialism does not work.
They certainly were the most socialist generation. From SS to Medicare to the "Great Society" to big labor to public schools to that cute little deduction that comes out of your paycheck weekly it was all their doing.
And they are the ones that scream like scalded bunnys every time we try to clean up their mess.
Well you will never go wrong with this view. I lost money in the S&L disaster too, bought a house way over the true price. But I would trust a fund with my name on it. If necessary a lawyer could verify that it was really mine. This is the only thing about social security that the truely mistrustful can trust. Certainly not giving more money to the failed "trust fund" which is not really there.
You may be right, I'm just a little gun shy of trusting my money to "experts" now. Doesn't really matter though...You and I will probably be long gone by the time they get it all worked out!
...
Yes, This getting old is the (you know) but I expect any discussion on SS will not end up affecting me or you. The oldersters have a lot of political clout and it would hurt either party to do anything that clearly takes away from current benefits. It is the younger generation that will see the program run out of money, or raise their taxes. But I tell them to save on their own, and not pretend that the govt. program will be there for them.
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