Posted on 01/02/2011 10:24:47 AM PST by rabscuttle385
Seniors should be older before the receive Social Security and wealthy Americans should receive less benefits across the board, says Sen. Lindsey Graham, R-S.C.
He made the argument in an interview on Sunday's Meet the Press, but it's a position Graham has advocated for on the stump in South Carolina, including a 2009 stop at The Citadel with Sen. John McCain, R-Ariz.
"What I'm going to do is challenge this country to make some hard decisions," Graham said at the time, telling the crowd of cadets, Tea Partiers, and Graham supporters that they shouldn't give Congress a pass on the tough stuff.
(Excerpt) Read more at charlestoncitypaper.com ...
As much as I would like this solution, it's even more impossible than the current scheme.
For a moment, let's pretend that the government could just issue a US Treasury bond to everyone for the value of their contributions... PLUS INTEREST.
I've done the calculations. For middle to upper-middle income taxpayers, the value of Social Security contributions is staggering, especially if you were working during the early 1980's.
I put together an Excel workbook that simulated the annual investment of Social Security contributions into long-term US Treasury bonds, at the average interest rate for each year. Each bond is held to maturity, reinvesting the interest (and new contributions) each year at the average interest rate for that year.
A conservative estimate for someone born in 1957, worked from age 21 to age 62, and paid the maximum Social Security tax each year would have $1,800,000 -- if they invested as I described above.
In contrast, the value of the expected stream of Social Security payments (to average life expectancy of 81) is only about $500,000. Note that this doesn't matter when you start receiving benefits -- the benefit is reduced until the value is the same at age 81.
So, the "Ponzi scheme value" is actually quite a bit less than the "real value" of the contribution, at least for middle to upper-middle income taxpayers. At lower incomes, the difference is not quite as stark. That's because the relationship of benefits to contributions is not linear in Social Security.
Thanks for clearing that up.
It is STILL represented as an “earned” entitlement, i.e. one that the government has promised a benefit based on what you have paid into it. The amount of your monthly benefit is BASED ON how much you have paid into the system over your working life. If you are lucky enough to live long enough, you will receive more than you have paid in; of course if you happen to die shortly after you start drawing benefits then you lose everything you have paid in and your beneficiaries get nothing of what you have paid in.
As a system, it has been completely screwed up by the politicians who have expanded it way beyond what it was supposed to be. However, that does not mean that it should be further distorted into even more of a wealth redistribution system by reducing benefits or taxing the benefits of those who have done a better job than others of preparing for their retirement.
Here's the thing, there are a few troll's on FR who support certain elements of the left's agenda, YOU support ALL OF IT.
You support abortion.
You support euthanasia.
You support the homosexual agenda.
You support redistribution of wealth.
There is NOTHING to differentiate you from Obama.
Oh I know that money is long gone. Any buyouts would have to come out of the general fund.
A simple question for you. Do you think the government should continue to deficit spend at unsustainable levels?
>You want to reduce Social Security’s obligations? Fine. Do it across the board. Current projections are that existing taxes will only fund about 75% of legislated benefits after about 2040. Start reducing benefits for EVERYONE now, year by year until it meets that milestone. Keep going and reduce it to zero, while simultaneously ramping up a fully-funded private alternative.
While I appreciate the principle of that, and don’t really have any objections to it in some ways, I also happen to want the program drastically changed, and the middle class (and up) weaned off of entitlements. The above won’t help with that cause. It will also be much, much harder to pass since everyone will scream at once.
>But, targeting a specific group of people without sufficient political power to stop it is class warfare.
No, why I advocate means testing is because I want this Ponzi driven welfare scheme exposed for what it is, so people don’t continue to fool themselves into thinking it is either solvent or an annuity. I want support for Social Security cut off at the knees because it is a scam. Anything which works to chip away at support for the program is an unvarnished good in my book.
The problem right now is that Social Security receives support from across the economic spectrum because FDR managed to get everyone dependent on it. It is untouchable for that very reason. Something has to be done to reduce that support.
As to your neighbor, look, I fully sympathize with your position. I hate when people get to be lazy sots and abuse the system. However that is inevitable in any welfare system. Social Security is a welfare system. It’s just a strange welfare system because it covers the non poor as well.
No, I think the government should reduce spending in almost every area, including so-called “entitlements” beginning first with the many unearned entitlements. I think every item in the budget should be subject to ZERO-based budgeting so that what was budgeted or spent last year has no consideration in whether or not that item receives funding in the new budget.
What would you call a person who advocates the following?:
1. Abortion
2. Euthanasia
3. Militant homosexualism
4. Redistribution of wealth
Because the way I see it, they are either a liberal or libertarian (truth be told, libertarians ARE liberals but I'll allow them their fantasy).
Being 47 and having paid in since 17, I don’t feel the need for a buyout, just ramp the whole mess down gradually by funding the current and near-retirees and slowly stiffing the rest. A lot of that could be made up with private retirement vehicles, for exmaple HSA’s that convert into retirement accounts (yes, someone who gets sick would be stiffed, but that would be a much smaller safety net). I think we should start by stopping pretending that anyone is owed anything by the damn government.
>I think we should start by stopping pretending that anyone is owed anything by the damn government.
Amen. That is the root of the current problem.
So if we are reducing Soc security and Medicare by 25% in actual spending, this means individual benefit spending has to be reduced by about 40% to make up for the longer life span and the boomers coming into the system.
For Social Security and Medicare, how do you see the US coming up with that 40% reduction in benefits?
No, the figures are accurate. I've checked them repeatedly and confirmed them via several sources.
Retirees receive benefits from both Social Security and Medicare. When you look at both of these benefits you quickly see that seniors are receiving far more benefits than they ever paid for.
If you want to talk about Medicare, start a separate thread. It's a separate problem.
This discussion is about means-testing Social Security.
I said the same thing 30 years ago. And I was told to STFU.
I'm still more than happy to participate in fixing the problem now. But, either everyone participates, or I refuse.
I'm not going to sacrifice alone (or as part of a small group) so that everyone else can reap the benefits of their irresponsibility.
If the only issue was an imbalance in social security, this would be a very manageable problem to solve and this thread would not exist. The reason there are proposals for means testing soc security is due to the dire nature of deficit spending. Social Security is a big part of the overall problem and it all must be addressed or it will not matter!
I understand what you are trying to do. But, I think you are mistaken in believing it will succeed. All it will do is win another battle for the class warriors and increase their political power.
If 25% of Social Security payments are eliminated at the upper end, it becomes solvent again. And then it will never be killed.
You've not been paying attention. First, we start with the government retireds, then welfare, the various alphabet agencies and so forth. AFTER all that's done, then we look at SS.
So same questions to you that I have been asking others.
1) Do you support across the board 25% reduction in spending? 2) If you support a 25% reduction in Soc Security spending, how do you implement the individual reduction of 40% required to make this happen?
And those benefits are funded separately.
I understand that you would like to start another thread as this is very inconvenient to your arguments.
No, it's not inconvenient for me -- it's convenient for you to combine two separate issues into one so that you can make your tangential argument.
You want to talk about Social Security, let's talk. You want to talk about Medicare, take it somewhere else or find a mirror.
Do you mean overall government spending, or Social Security?
2) If you support a 25% reduction in Soc Security spending, how do you implement the individual reduction of 40% required to make this happen?
I'm sorry, but I don't follow your math. Why does a 25% reduction in Social Security require an "individual reduction of 40%"? Do you mean 40% reduction in individual benefits?
But, to answer your question: pick any percentage rate. Reduce Social Security benefits across the board, no exceptions. I'll support it.
Politically, it would be better to do it gradually, so that people can plan for it. Reduction of current benefits could be implemented by shrinking the annual COLA.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.