Social Security

[JCarter426]

First time posting a new thread in the Corner, but what the hell? (Forgive me if it's been covered; I did a quick seach and didn't find anything.)

 

So, Social Security...what are your thoughts? Can it be fixed? Should we just get rid of it entirely? Should the government tell Americans how to spend their money when it can't even spend its own money wisely?

 

If you can't tell by my biased series of questions (), I'm against Social Security. My view is: "It's my money. Why should I give it to you?" Basically, I have no faith that I'll be seeing those dollars again when I reach 67.

 

Social Security was not designed to make sure that Americans had enough money saved away when they retired. It was designed as a cheap way for the government to take money without ever planning to pay it back. Don't believe me? When SS was implemented in 1935, the average life expectancy for a man was only 59, and for a woman 63. Yes, if you actually did reach 62 and start collecting those checks, you could expect to live for more than a decade longer. But the fact remains that most people wouldn't live to be 62, and would never see a single dime. Over the years, as life expectancy has increased, that age has been pushed higher and higher--but not high enough, it seems (only a five year increase in the last seventy).

 

And whether or not this is the case, I still doubt that I'll ever see a single dime. Shouldn't I have a say in the matter? Part of the Social Security platform is to encourage Americans to invest in their retirement wisely. Well, anyone with a bit of foresight could invest in something safer than Social Security. Ever hear of a bank? Back in '35, Banks were going bankrupt left and right. These days, banks are merging left and right, becoming richer and richer--and safer. Who really thinks that CitiBank or Bank of America or TD BankNorth won't last the next hundred years? Well, maybe they'll merge or be bought out, but our money will still be safe. Now, can you say the same thing about Social Security?

 

And finally, as I've said in the past, when the government starts enforcing social policy, bad juju happens (see: abortion, prohibition, gay marriage, etc).

[mimartin]

Social Security was not designed to make sure that Americans had enough money saved away when they retired. It was designed as a cheap way for the government to take money without ever planning to pay it back.

Until the 80s Social Security paid benefits to the surviving children, including making payment towards a college education. Does not sound like a way for the government to take money to me. It sounds like a backup plan for retirement and unexpected disability or death for those that either made bad investments or did not have the foresight to plan for the future. It was never designed to be the end all of retirement plans or life insurance plans.

Who really thinks that CitiBank or Bank of America or TD BankNorth won't last the next hundred years?

You never know, those that invested in Enron probably felt that way about them too. As long as you keep the balance below one hundred thousand I wouldn’t worry about it. Then again, if you have one hundred thousand laying around in normal bank products you may need Social Security in your future. Three words diversify, diversify and diversify.

[SilentScope001]

Social Security will never go bankrupt. Never. Sure, that trust money is slowly going down, and that Social Security trust money will go to zero, but all you just need to do is throw more money into the Trust, and volia, Social Security saved.

 

You can easily save the current system, even by doing NOTHING. That's because we're already in a huge national debt, and that national debt is going to increase. How do we manage to spend more money than we are getting in via taxes? We borrow money from European and Asian bankers, especially from China, Germany and the Middle East. So, all we just need to do is borrow money to fund all our programs, including that of Social Security. It helps everyone. You get your retirement money. Every other nation gets interest money back as well as possibe leverage against America, just in case.

 

The problem with the national debt is higher interest rates in the long term, as well as lower growth rates due to the 'crowding out' effect (more money gets loaned to the government rather than to businesses who could stimulate the economy), and the possiblity of trade deficits too [due to the belief in the twin deficits, that a national deficit can cause a trade deficit too due to money flowing outside the US]. That's it. If you are okay with that, then social security will be fine.

 

If however you are in fact a deficit hawk, you will want to deal with decreasing expenditures, by reorganizing social security, amongst other things. But being a deficit hawk isn't easy, and you're going to step on some toes with your proposals.

 

EDIT: And Social Security was originally designed to counter poverty amongst old people, during the New Deal. If you got a 401k plan and a pension that works, then you don't need the social security income.

 

EDIT2: Another story that should keep your hope up, from Wikipedia:

 

In 1982, projections indicated that the Social Security Trust Fund would run out of money by 1983, and there was talk of the system being unable to pay benefits.[14] A commission chaired by Alan Greenspan was created to address the crisis.

 

Also of concern was the long-term prospect for Social Security because of demographic considerations. Of particular concern was the issue of what would happen when people born during the post-World War II baby boom retired. The commission chaired by Alan Greenspan made several recommendations for addressing the issue. [15] Under the 1983 Amendments to Social Security, signed into law by President Ronald Reagan, a previously enacted increase in the payroll tax rate was accelerated, additional employees were added to the system, the full benefit retirement age was slowly increased, and up to one-half of the value of the Social Security benefit was made potentially taxable income. [16][17]

 

As a result of these changes, particularly the tax increases, the Social Security system began to generate a large (short run) surplus of funds, intended to cover the added retirement costs of the "boomers." Congress invested these surpluses into special series, non-marketable U.S. government bonds held by the Social Security trust fund. Under the law, the government bonds held by Social Security are backed by the full faith and credit of the U.S. government. Because the government had adopted the unified budgeting since the Johnson administration, this surplus off-sets the total fiscal debt, making it look much smaller. There has been significant disagreement over whether the Social Security trust fund has been saved, or has been used to finance other government programs and other tax cuts. (See the Social Security trust fund article for a more in depth discussion.)

 

Transaltion: If Social Security is really in trouble, the government could just raise taxes for a quick fix, thereby postponing the inevtible day when the trust fund runs out. If they continue to postpone it forever, then it is as if Social Security never is in true danger of running out. You however might not like the taxes.

[mimartin]

EDIT: And Social Security was originally designed to counter poverty amongst old people, during the New Deal. If you got a 401k plan and a pension that works, then you don't need the social security income.

And what happened in 1929 that made most people retirement plans completely useless? Even if it was a simple savings plan on deposit with a bank it was still gone. The only time you know your retirement plan actually worked is the day you die and don’t need it anymore.

[SilentScope001]

And what happened in 1929 that made most people retirement plans completely useless?

 

Old people didn't actually retire in huge numbers in 1929. Many of them just continued to work in businesses, mostly to stay out of poverty. I don't think retirement plans actually existed for old people at all, being a rather recent 'innovation', during this time, it was expected that their sons and daughters would provide for them.

 

So the answer is, old people just worked.

 

But today, well, if your pension plan fails, then that's where social security comes in.

[JCarter426]

Well, whether the original intentions of SS aside (you won't convince me it wasn't a crock ), the fact remains that there are still many issues. Sure, it can be saved, but...

 

If you got a 401k plan and a pension that works, then you don't need the social security income.

 

...does it really need to be? There are dozens of safer alternatives. And then there's the principle of the thing--the government telling its citizens how to spend their money. Last I checked, the government had a nine trillion dollar deficit. If the government were my financial planner, I'd fire him.

 

Now, I'm not saying that we should get rid of Social Security entirely, but it shouldn't be mandatory. As I said before, "it's my money; why should I give it to you?"

[mimartin]

Old people didn't actually retire in huge numbers in 1929. Most of them just continued to work in businesses, mostly to stay out of poverty. I don't think retirement plans actually existed for old people at all, during this time, it was expected that their sons and daughters would provide for them. But today, well, if your pension plan fails, then that's where social security comes in.

Yes, you are technically correct. My grandfather had to mow lawns until he finally died at almost 90 years old. He lost his business (country store) because he lost the money he had in the bank. His retirement plan was the store and when the bank closed he lost the money needed to pay suppliers. So if even the simplest plans can fail no matter if you call it retirement or old age plans. Back then you worked until the body gave out, even today many continue to work long after retirement age until their body and/or mind can no longer handle it. see John McCain

 

Right now, I’m continuing the customs of that generation. I’m helping with my mother and step-father’s needs. I do not wish that unrequested burden on any of you. Their retirement plan took a major hit due to 9/11/2001 and medical expenses. No matter what the slick haired salesperson says, unless he can see into the future, any retirement plan no matter how complex or simple can fail.

[JCarter426]

Back then you worked until the body gave out, even today many continue to work long after retirement age until their body and/or mind can no longer handle it. see John McCain

 

That's a good point, though; there are some careers in which age isn't as big a problem as it is in others. If one plans to work until one is 80, one probably doesn't need Social Security.

 

Right now, I’m continuing the customs of that generation.

 

That's another inherent problem of Social Security--a fundamental requirement for it to be successful is a future generation that will pay for it. With the birth rate declining, and the economy recessing, we could easily lose everything. SS just doesn't seem safe.

 

...any retirement plan no matter how complex or simple can fail.

 

Eh...I suppose. Still, I'd prefer the option. Like I said, I'm not saying that we get rid of Social Security entirely--it certainly has its benefits, but it does have its issues as well. Those of us who take issue with its issues should have the option of finding an alternative, and those who are satisfied with it (probably the majority) can stick with it. I for one would like to be able to make the wrong decision rather than to not be able to choose at all.

[SilentScope001]

If you wanted to kill off Social Security, JCarter, you missed your chance. The 1930's would have been a great time, with the Republican Party once being against Social Security, and I could sympathize with the arguments. But the Republican Party lost that argument, and then quickly changed its position to be pro-Social Security.

 

The problem is that Social Security is popular, and that we live in a democracy. Sure, I wouldn't want to pay for something else, but in return, that someone else wouldn't want to pay for what I want. I would love to decide where my tax dollars goes, but then that would mean that someone else gets to decide where their tax dollars goes, and that would ultimately destroy the US. Democrats will refuse to fund the Iraq War. Republicans will stop funding all Social Welfare programs.

 

Since the American public supports social security, for many different reasons, your goal should be 'reform', not abolishment. If you want some idea to champion, you could use George W. Bush's plan to turn Social Security into a 401k plan as a starting block, with a portion of your payroll taxes being used to buy stocks. It's risky pouring money into the stock market, however, so again, you'll come into contact with the Democrats (who succesfully blocked Bush's reform). And, I do enjoy the whole 'security' aspect of Social Security, so, eh.

 

I do agree we are engaging in a huge national debt problem, but it's not as extreme as many would put it. We will survive, just not as good as expected.

[ForeverNight]

Well, the major problem with Social Security, is that Senators see it as 'that-huge-pile-of-money-just-sitting-around' and then, since they're blood-sucking politicos, they decide that: "It's Money! I HAVE to Spend it Right The Heck Now!!!" And, then every Senator with his/her pet project starts dipping into the fund for their funding. After all, it's just standing there, doing nothing! Right?

 

I have to say that it should be used only for its original purpose, nothing more, nothing less. And GET THE POLITICO'S GRUBBY HANDS OUT OF THE DARN THING!!!!

[Tommycat]

Well, the major problem with Social Security, is that Senators see it as 'that-huge-pile-of-money-just-sitting-around' and then, since they're blood-sucking politicos, they decide that: "It's Money! I HAVE to Spend it Right The Heck Now!!!" And, then every Senator with his/her pet project starts dipping into the fund for their funding. After all, it's just standing there, doing nothing! Right?

 

I have to say that it should be used only for its original purpose, nothing more, nothing less. And GET THE POLITICO'S GRUBBY HANDS OUT OF THE DARN THING!!!!

Kinda agree with ya here.

 

Actually, I think it would be wise not to use any federal funds for non-federal projects. If it's a local projects that helps the locals, use local taxes to pay for it. That way if someone needs to get lynched for it they don't have to get past senate security.

 

As for some jobs not being for the elderly, I'd like to know about what that job is. I know a few SysAdmins that are pretty far up there in years. My grandfather was working his fields up until the day he died(well 2 days before). There are lots of retirees here that work at McDonalds for pretty much greens fees. So what job is it that a young person can do that an old person can't.

[Totenkopf]

The problem is that Social Security is popular, and that we live in a democracy.

 

Yes and no. SS is popular with those that are on the receiving end, though not necessarily with those that are going to see a bigger bite in their paychecks to keep it afloat. We live in a republic, not a democracy. I think that if you are going to resort to taxation as a means of supporting SS, then perhaps the salary cap on FICA needs to be removed so that ALL of your paycheck is subject to FICA (cutoff somewhere ~$97000). However, they may then also have to attack other forms of income (capital gains, lottery winnings, etc...) at the same rate as well. Also, means testing may become mandatory. Afterall, SS is really either a safety net or just another scam for the govt to leech more money out of the public. If you're Warren Buffet, you clearly fail the means test. Same for Brad Pitt or Jay-Z.