AARP’s national president, Marie Smith, talked to The Eagle editorial board the other day about the organization’s opposition to privatized accounts for Social Security, which she noted wouldn’t do a thing to address the insolvency problem.
She also acknowledged that the AARP had a disconnect with its members on last year’s expensive Medicare prescription drug bill, which the organization supported at some political cost, and that “I’m still smarting from that.” But she defended the bill as a first step toward helping the millions of Americans without drug coverage.
But she noted that it’s Medicare, not Social Security, that faces the most pressing solvency problem. “We have a patchwork system that’s ready to fall apart,” she said.
She’s right. Why aren’t the nation’s leaders doing more to address that looming crisis?
Posted by Randy Scholfield
Registered?
Commenting on WE Blog now requires you to be a Kansas.com member. Use the links above to register, if you haven't already, or to log in.Contact us
Follow us
Daily Archives
-
Recent Comments
- Jed on Let immigrants run
- Regular on Open thread 11/23
- Regular on Open thread 11/23
- BlueJay on Open thread 11/23
- BlueJay on Open thread 11/23
- Freebird1971 on Open thread 11/23
- Freebird1971 on Open thread 11/23
- BlueJay on Open thread 11/23
- BlueJay on Open thread 11/23
- Freebird1971 on Open thread 11/23
20 Comments
The AARP is going to look out for the AARP’s best interest.
What about someone in their mid 20’s who still has their future ahead of them?
It is my money. Let me put some of it into privatized accounts.
Of course the AARP doesnt care about privatized accounts becuase their members are already collecting their Social Security.
Get real Randy.
Privatizing will not help the solvency, but either is any other plan out there. But privitizing will help everybody who participates in the long run, because you get to keep and pass along your retirement, unlike you do now in our system.
So that is why I am and many, many, younger workers are. We are excited about the privitizing plan, yet our voice is drowned by the Seniors who hold great deal of political power, in both votes and dollars (they are the richest demographic group in America), that and the Liberals who oppose it because Bush said it, although Clinton did too.
Nathan–The President already said that the plan would not change for anyone over 55, so I think we can rule out “selfish hedonism” from America’s most beloved organization, the AARP.
The reason they’re against it is that it is a bad plan. You won’t get to keep more of “your money.” Bush forces you to put it into an annuity. When you look at the details, it’s bad.
Chile tried this and it’s not working out so great. England tried it and is now trying to go back.
Trust me, it has a superficial appeal, but the more you study it, the worse you see it. Which is exactly what the polls are showing–the more people learn about Bush’s plan, the more they don’t like it.
BTW, famous Bush quote in 1977 when he was first running for public office: “Social security will be bankrupt in ten years.”
In fact, SS has the biggest surplus now that it has ever had.
Also, as a practical matter, this issue is dead. The president went on a 40 state speaking tour to hand-picked audience, and that dog didn’t hunt . . .
Stick a fork in it, it’s done.
As a practical matter, I’m 54, I’ve been paying Social Security taxes for 40 years, and I don’t care what anybody says, I think I’m entitled to MY Social Security. I fufilled my part of the social contract, I expect this country to fufill their part. I hear you younger folk say you want to invest YOUR money. Feel free to invest YOUR money. But the money you pay into Social Security taxes isn’t YOUR money any more than the money you pay into income tax. You can knock the AARP and talk about demographics all you want, But there are a heck of a lot of us in our late 40’s-early 50s that are going to vote against anybody/anything that messes with Social security. If you want private accounts, fine. Start them on people entering the workforce at 18. Don’t be pulling this crap saying the cut-off is 55. It’s too late for someone my age to change investment plans now, and Social Security is a major part of the plan.Think Social Security isn’t still the third rail of American politics? Touch it and find out.
{Quote}You won’t get to keep more of “your money.” Bush forces you to put it into an annuity{quote}
Ummm! What do you think SS is now? You don’t get it in a lump sum, plus if you die before 65, 67, or by the time many people will retire, they will raise it to 70+, you don’t get a cent. Ask a retiree how much they get in SS payments every month and you will be surprised that it is very low, sure not enough to live off on. Social Security is a retirement supplimental, NOT a full retirement program. That is why the govnerment has other savings tools that people use. IRA, 401{K’s}, and etc.
I beg to differ on Chile retirement system, it has worked out so great for them that people have retired with more money coming to them every month than their regular salary when they were working. It’s not perfect, there are still problems with it, because they still have high poverty rates and not everybody puts in to the system. Britians program was rocked with so many problems. So you are right about that one.
The difference in Bush/Clinton’s proposal is that our current SS system is that we pay 12.4% of our income into Social Security. The Privitized part (remember is voluntary, you DO NOT have to participate, you can STILL BE ON THE OLD SYSTEM) that are only saying like 2% to 3% of it, (again..Your Choice) into a private account. The rest will still go into Social Security to pay current retirees.
Also! The Social Security Disability Insurance(Income) is the one really sucking the money out of the fund, not really the retirement portion.
There are so many people on SSDI, 6.5 million people on SSDI, this is above the 5.5 million people who are legitimatly blind and disabled. There is so much fraud and abuse of this system that in Inspectors General has a entire task force that does nothing but investigates SSDI frauds.
Social Security reform needs serious debate. Its an on going process and will need reform again and again. We will never get it perfect, but life never said it was.
Actually Joe, you only pay 6.2% of your income into the SS system. Your employer pays the other half.
You pay 12.4% if you are self-employeed! Also! The 6.2% your employeer pays, is still your portion, you might not see it in your paycheck stub, but it coming out of your gross pay.
You have to remember that companies don’t pay taxes, only people do. When companies pay taxes it is considered an expense to them, so they make it up by charging more in products and services or they reduce their cost by laying people off, reducing health insurrance or making you pay larger premiums, or the don’t dish out pay raises.
No matter what the company is going to do what it has to do to make the level of profits that it needs to perpetuate itself. So that 6.2% they are paying is coming straight out of your paycheck too.
12.4% is the real tax rate.
Why aren’t politicians addressing the looming Medicare crisis? The new Republican Congress tried in 1995 to slow the rate of growth in Medicare and nearly lost their political lives while editorial boards like the Eagle sat on their hands. Politicians are dumb, but they do remember a good whack in the head.
JoeW–Okay, well, this issue is really too complicated to argue in a forum like this, but for something like 20 percent of SS, it is their only source of income. So your contention that “people can’t live on it is false.” Millions of people ARE living on it, they MUST and DO live on it.
The idea that we’d have so much more money if we invested (than in SS) is a false one. Fees eat up a huge portion.
Also if investing SS is such a good idea, let the gov’t do it. That’s what KPERS does.
But no, Bush wants the INDIVIDUAL to take the risk, not the gov’t.
And what happens to the people who invest in the next Enron? Does the richest country in the world just let them starve to death?
SS can work the way it is. It’s not “going bankrupt” now anymore than it was when Bush said it 20 some years ago.
If you really want something to worry about, worry about what’s going to happen in 2017-2018 when SSI starts drawing on the “Trust Fund”. Politicians have been raiding the fund for years to mask the true size of the federal budget deficit. That’s gotta be paid back, plus the funds that they can’t steal from SSI anymore are going to have to be replaced.I suppose we could solve the problem with another tax-cut for the wealthy, or we could just put old folks in concentration camp style poor houses.
Joe, your analysis of how companies pass on costs has some serious flaws. The flaws are the result of too-simple thinking on your part.
For instance, if it’s so straightforward to pass on costs to customers, why wouldn’t employers just pass their half of FICA to their customers? Why pass it on to their employees?
You’re failing to account for a famous economic principle known as the demand elasticity of goods with respect to price. A related elasticity is known as the demand elasticity of labor with respect to wages.
The bottom line is that not all companies are so lucky that they can merely add unit costs to their top line (or unit selling price). Whether they can or cannot do so depends fundamentally on the demand for the good and the demand for the labor needed to provide the good.
If you don’t take this added complexity into account, then you really don’t understand prices and how prices are determined in a free market.
Do you think that a wheat farmer can pass on additional costs to the wheat buyer? No, the farmer cannot because he sells a commodity and he must therefore take the offered price.
And to pick an equally extreme example from labor economics, do you really think that Microsoft deducts the corporate share of Steve Ballmer’s FICA tax from his wages? Or, rather, do you think that in this instance they pass their portion of Mr. Ballmer’s FICA to their customers? Just as not all workers are equal in merit, not all workers are equally rewarded.
;)
I’m a senior and I am incensed that AARP has taken it on itself to screw the young people in this country by opposing individual accounts that are protected from being ripped off by the Congress every year.
AARP doesn’t even have a dog in this fight, but they run misleading ads against the future well-being of our people.
There are several alternatives to AARP — 60plus.org and USAnext.orgThere may be others.
By only allowing the personal accounts to be invested in conservative securities (bonds, bond funds), the risk of losing the personal account due to bad investment is historically zero.
As for medicare, it’s about as irresponsible as bipartisan government gets. When insurance of any kind pays for medicine, there are no brakes on medical costs. More insurance only means higher costs.
To paraphrase Parkinson, “Medical costs expand to use the moneys availabe.”
Alex, I think your argument for private accounts is one of the best I’ve seen.
The only thing you’re left defending are the transition costs (paid during the time that eligible FICA payers elect to divert payments to private accounts rather than transfer those payments to the pockets of current SS payees (as those payees did before them).
Still, it seems – to me – that you’ve only left yourself the job of explaining why borrowing to pay these transition costs is more than paid for by denying federal appropriations efforts access to payee funds. And it’s true that our federal government has been profligate, for decades, with these incomes. In other words, your argument has “time value” going for it.
I, too, am a fan of small government. To a too large extent, our current government exists to take tax dollars from the weakest segments of our society only to redirect those same dollars out to those wealthy enough to hire specialists (lobbyists) who can speak for them in Washington (or Topeka, or Wichita – see the downtown arena).
I certainly wish President Bush shared your opinion (because in my opinion his Medicare act of last year was either flagrant disregard of this principle or a cynical, cold-hearted attempt to break the federal safety net, probably later rather than sooner).
For what it’s worth, I think that unless you’re more careful we might come to the conclusion that you’re a bit wise. :)
Flike! You are right. There are much more complexities in commerce that it is not as simple as adding cost to products to make up cost. But the bottom line is that their portion payout is not free by any means and it does effect business decisions. When an employer wants to hire somebody, they don’t look at you as $12 an hour, they add another $7 or so on top of that in health insurrance (if lucky), liability, training, productivity loss, tax compliance, record keeping, and etc.
So you really make $18 an hour, but minus the companies cost, equals your gross $12, then minus 35% or so for your own tax liability.
Basically, do you budget on your gross or on your net? Companies do the same.
And your example of Wheat Farmers is flawed. They don’t work on supply and demand economics. They are government subsidized. The actual value of wheat is much lower than what farmers recieve. ;)
Good debate though. :)
Alex, have you ever gone to Europe? Because if you had, you’d see what gov’t working for the interests of the middle class (instead of the special interests of the wealthy) can do.
All the “small gov’t” people want to tell us how great we’ve got it here. Well, yeah, the rich do have it great. But for everybody who doesn’t make a quarter million dollars a year, we don’t have the same security that other industrialized nations take for granted–health care, government pensions, serious housing programs.
We could do what every other industrialized country has done too, if we just had the will. But conservatives continue to hammer away with the “rugged individualist” theme that keeps the rich, rich and the poor, poor.
Before anybody says, “well if you like Europe so much why don’t you move there.”
Actually I would consider a move there if I could get a job equivalent to the one I have here.
But the real point is “are we going to make our society better?” like Europe has done by putting money into helping people or our we going to continue to pump money to the special interests so they can get richer?
Bush and Co. have always chosen the latter course.
I guess you guys don’t know much about Europe. You might want to re-think about the comparison before you move there.
They have double digit unemployment rate and no real growth in their economy.
Heh, yeah right, Joe–and the fastest growing economy in the world is CHINA! I lived in China for a year as an English teacher. I don’t want to go back.
How fast the economy is growing is a total red herring compared to people’s standard of living.
It’s high in Europe–it’s less good here (for the middle class)–and in China, it stinks.
Granted there are fewer dead bodies on the streets of Shanghai than in the 20’s but it’s still pretty bad.
Go to Europe then. Why did you go to China in the 1st place? Was it to really teach english?