Posted on 12/20/2007 10:49:56 AM PST by shortstop
According to your logic, they are paying me 6.2% more than they have to now. Everything they pay me now (government mandate or not) is because they have to pay me that much to keep me from finding another job. If the government mandated that they put 50% of my pay into SS instead of 6.2%, I promise it would not be extra money, it would come out of my current pay. The 6.2% they pay now is NOT extra free money, it comes out of my total compensation.
Following your logic, if they drop corporate income tax, all the prices would drop 25%, right? In your dreams. The companies would put it right back into their bottom line.
Following your logic, corporate taxes cost the public nothing any only reduce the bottom line. Of course this is not true. Corporate taxes are a cost of doing business and are passed on to the consumer. Corporations (and individuals) set prices for goods and services based on the maximum they can get without running off their customers. Raising taxes for all business goes straight to the prices for their goods and services. Cutting taxes on all corporations MUST for the exact same reason be passed on to customers as lower prices.
I never said that a 401K could fund this benefit, what I was trying to say is that citizens should be demanding the right to invest their (stolen) Social Security “contributions” in a diversified, insured, fiscally sound pension plan.
The fact is, this will never happen, because almost everybody uses divisive terms like “extremely generous” and “no risk” when discussing public employee pensions.
Your study reveals the obvious, but because it is geared toward limiting growth of local and state government spending (an admirable pursuit, no doubt), it emphasizes that public pension recipients have superior retirement benefits. It does not contribute any emphasis on the need to end the Social Security drag on private sector standard of living.
Social Security has been sold as a form of deferred compensation to the American public. I am hoping that discussions like this one will prompt the public to demand that the system evolve into something better than exorbitant, regressive tax burden during working years, followed by a pittance of a welfare benefit for senior citizens.
Finally, I apologize if I missed it, but where in your study or response will I find the evidence against my assertion that public pension funds are by and large sustainable?
Even if one subscribes to the “risky stock market” lie, simply investing into a basket of CDs, real estate in high growth areas experiencing net long term in migration, etc, you’d do better than Social Security.
My study involves the compensation side of public employee pensions. The funding side has been carefully studied. Defined benefit plans that are similar in design to the PERA plan in Colorado are underfunded. The funding level is a moving target because the pensions provide high guaranteed benefits (the target guaranteed rate of return is 8.5%) but the funding mechanism is a risky asset portfolio.
My study is unique in its emphasis on deferred compensation. The reason that these defined benefit plans have become so generous is due to ignorance about the amount of deferred compensation inherent in the design of the plans. Employees are provided an investment that does not exist in the private sector (high return with no risk). Much of the retirement income stream is deferred compensation, not income derived from investment earnings. If legislators and the public understand that pensions like PERA in Colorado are providing on the average $500,000 of deferred compensation, they may vote to reduce benefit levels.
Ignorance about compensation allows public employees to claim pool man about current compensation. The legislature increases current compensation and ignores the vast poor of deferred compensation. This situation allows career public employees to receive increases (sometimes large) in current compensation that magnifies their deferred compensation even more. The taxpayer is hit on all sides: increases in current compensation, large increases in deferred compensation, early retirement by a substantial part of the work force, and lifer employees who do not perform well but hang on for the retirement benefits.
Social security is the opposite of retirement plans like PERA. Social security is entirely unfunded. Social security will provide negative returns to many boomer retirees. Social security is a generational Ponzi scheme. Social security is sucking money from the private investment market and robbing many boomers of their ability to save for retirement. If the employer’s share of FICA tax (6.2%) were invested in a personal retirement account, the vast majority of boomer retirees would have a much more secure and better retirement.
bttt
Step one-— you have to double the percent because the “matching funds” from your employer is paid by you.
Step two-— the $6,000 from year one at 7% would be worth $69,037 , the $6,000 from year two would be worth $64,383 and so on for 35 years.
That’s why it’s called PRESENT VALUE.
Value from the first two years alone would be worth over $133,000...
bttt
the greatest generation who forced this generational Ponzi scheme on us
I don't know what the numbers are today, but at one time you got back all you had paid in about five years. It is a good Ponzi scheme but the payout is killing it.
We’ve been in boiling water so long our asses are cooked and no one has the strength to hop out.
And they collect far more (probably somewhere in the range of $100B to $200B) than they spend.
You wouldn’t contribute to their support yourself if there was no “Social Security” program?
Your parents can’t help support their parents and grandmother?
They can’t save for their own retirements?
Bingo
They won't pay 82% of their earnings - they'll just pay 15% of their $2.3 million lower-middle-class paychecks in order to provide the retirees with the agreed-upon $20,000 a year.
It's gone forever, so get over it. Just as surely as your income taxes - all cranked out onto enormous pallets of $100 bills and shipped overseas.
A clean death would be nice, but that's not how it works.
Social Security is a pyramid scheme, and would have been illegal if any one else were running it!
Sometimes I envy those who died in combat. They did not have to see the Constitution they defended rot under tons of political sh!t.
And who owns the bottom line? Shareholders - namely you, me, grandma and grandpa, and Auntie Fran down the street.
I’ll sue and win.
It would have been true for you, perhaps.
But the vast majority of Americans have next to no savings.
Do we let them starve in the streets?
(It was their reckless spending that earned the rest of us a lifetime of money to save.)
But that said, I still agree with you.
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