I was surprised when President Bush said last week that Social Security reform was one area on which he hoped to reach an agreement with the new Congress. After all, Bush’s plan for private accounts was a nonstarter with many Democrats — and couldn’t even get a hearing in the GOP-controlled Congress. But Sen. Jeff Sessions, R-Ala., also promoted private savings accounts as a bipartisan solution in a Washington Post op-ed piece this week. Under his plan, an individual personal retirement account would be “established for every American at birth and would be endowed with a $1,000 contribution from the federal government.” Then, beginning in 2009, “1 percent of every worker’s paycheck would be automatically deposited into his own account for the first $100,000 earned annually, with his employer required to match this 1 percent contribution.” Assuming a 6.59 percent rate of return, Sessions calculates that someone making the median household income ($46,000 in 2005) would retire with almost $300,000, and that money could be passed on to heirs.
Posted by Phillip Brownlee
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140 Comments
300k wouldn’t buy much in the way of healthcare. How would it be used, that’s what I’d like to know.
N the problem with that is that many people simply do not make enough money to put back for retirement. If they had to save it, it’d get spent. I know that’s reallllllllllly hard for someone who makes enough to live on to understand, but please do try. If you made 800 a month, trust me you’d use every penny.
What do you propose we do with those who couldn’t save?
Hey n. I’d like to address one of your comments for discussion.
Here’s a simpler plan: Why don’t we do away with government retirement plans and let each person decide what they want to do on their own?
I have a reason. When these people screw it all up on their own, then they’ll cry foul because no one was there to save their rear ends. While I agree with your whole post, it is obvious that a lot of people in this country just aren’t smmart enough to plan for their own futures. Just my opinion. Nothing meant. No offense.
You have to ignore the first poster. Ain’t quite bright enough to hang with the rest of the ripe apples on the tree. Outspoken, and dim-witted. You have a great day and Peace!
It would be a BAD deal for the following reasons:
** Would require a huge bureacracy to administer the accounts.
** Inflation would make the proceeds insignificant. Because of inflation, starting salaries for some college graduates in certain professional fields are now over $100,000 per year.
Best way is to match social security with inflation as is done now. Review, revise and moniter eligibility requirements to receive social security.
Yes Humpy, Im the dim witted one lol.
Hey, this is POINTLESS discussion. This kind of proposal didn’t have a shot in a Repub controlled Congress, what hope would it have when the Dems take control next month?
Stop yammering about “controlling your own money”, blah, blah, blah; Social Security is going to be around for quite awhile. The needs of the many outweigh the needs of the republicans (and their masters, the RICH).
I’m all for personal savings accounts. There are ways they could be set up so that people can’t spend them until they’re retired. Instead of 15.3% of your income going into Social Security….
WE NEED TO WEEN OURSELVES FROM DEPENDENCE ON GOVERNMENT.
(I’m happy to see that the rest of you are noting the dim-witted-ness of a certain mom on the board)
I’m 53 years old and I don’t want to lose what I already have in the social security system. So what about folks in my boat?
If Bush wants to pay me a lump sum and I elect to get out of social security permanently, then I’d take that deal (providing on the lump sum amount). But I just don’t think Bush really means what he says - I think this is just a political ploy that sounds good. You noticed, it was his Republican controlled Congress that would not even bring it to the floor.
If I can get rid of one more govenrment program, that would be fine with me.
“If I can get rid of one more govenrment program, that would be fine with me.”
Amen, Suza. We need to find a away to get rid of our dependence on government - one program at a time.
What would happen to the disability part of Social Security under Bush’s plan?Can someone tell me please?
Delores’ post reminds me that the program which goes by the name “Social Security” has an official name: Old Age, Survivors, Disability Insurance (OASDI). The reform proposals (at least those which make their way into the media) all concentrate on the retirement (”Old Age”) benefit, and, perhaps with the transmissability to family on death of a private account, the survivors benefit. I do not know what any reform proposal has to say about the disability portion. I’m sure both Delores and I will appreciate a link to the portion of any proposed reform which addresses this issue.
Check out your next pay stub. Right now you are giving a lot more than 1% to SSN.This is a way of giving the income earning people (unless you are rich - because the 1% caps at $100,000 - or only $1,000 contribution) more control over their future.Insurance, disability, etc. isn’t going away. Doom and gloomers.
Again, this is a pointless discussion. As much as you bushnuts want it to, Social Security is NOT going away.
“Again, this is a pointless discussion. As much as you bushnuts want it to, Social Security is NOT going away.”
No, but as currently constituted, it IS going broke.
Ya know, FDR constantly complained that conservatives didn’t understand that he was trying to save capitalism, not destroy it. Democrats don’t seem to understand that many want to find a way to make SS solvent for the long term, not just pour more money into it.
WHEN is it going broke? I think there is time to fix it, not destroy it as the repugs desire.
Can somebody provide a rational explanation as to why the Republicans would want to destroy social security? There has to be more than “it’s your money”, or “they hate poor people”, etc…
“it’s your money”, and “they hate poor people” are repug mantras.
That should explain it all.
MrK, what you say is true about the proposal of Sen. Sessions, not necessarily all the proposals which have been made. BTW, when one adds the employer’s 1% in, per the proposal, there is a whopping $2,000 per annum maximum contribution.
A semi-serious proposal; as there are two components to the Social Security contribution, e.g., the 7.65% from the employee and the 7.65% from the employer, up to the maximum, and the 1.2% “medicare tax” portion without limit (again, matched by the employer), why not subject one-half the social security benefit received annually to income taxation, to account for the employer’s contribution which represented a deduction to the employer, and thus not taxed initially? The additional revenue, if any, would be used to replenish the “trust fund”. For those self-employed, and who theoretically pay the full 15.3%, recall that for many years, one-half the self-employment tax has been a deduction in the form of an adjustment to income, so the same rule might apply there, too.
I hope that I am not asking for a rational explanation of the irrational — surely, I am not.
Vaughn,I like it. Although, when you talk math, you lose about 98% of the people on this board.
Steven,Here’s the simplest explanation: the government has no business being in the retirement planning business. The govenment is notoroiously top-heavy and inefficient. I wonder how much of the 15.3% of our incomes goes to pay the Social Security Administration’s salaries, equipment, utilities, etc.
Plus, when you die, the government gets your money. You can’t include your life’s contributions to SS to your heirs.
Any Republican call to reform Social Security is a veiled attempt to kill it.
Better idea? ELIMINATE the upper income floor on FICA taxes. More? Means testing on social security is indicated.
Duh, private savings…
My grandfather never made more than $400.00 per month in his working lifetime. But through doing extra jobs and wise saving managed to put away $400,000 for his retirement years. He wisely distributed his savings in several plans, had an estate plan and re-invested wisely after he retired.
Social Security wasn’t meant to be the end all for retirement, merely a supplement for those who couldn’t or wouldn’t save.
Both of my paternal grandparents are deceased. My grandfather was born in 1905, my grandmother in 1910. They told stories about the dramatic improvement in poor elderly people’s lives after the introduction of social security.
So, according to them, it worked for people.
KSGN, I understand how you hate the government - I have heard you repeat that often enough to get it. I am able to invest in mutural funds for my retirement - which I am planning on taking care of the bulk of my needs. My question to you is: what would be wrong with fixing social security so that that safety net is available for people who can’t afford to put money away for retirement? Seems like a “win-win” to me - but I do understand that Republicans can only understand zero-sum games…
And, if we take the zero sum game to its logical conclusions, care to reliquish your citizenship, KSGN??? You could go live on a boat somewhere and not pay any taxes.
Testicles you’re really going to side with Jumpy? Gee, I can’t help but feel less and less of you the longer you post. Rush-lite.
Golf, as you are a younger person, your statement is true, at least to a point. Being somewhat lazy here, and operating from memory only, those initial beneficiaries who received and are receiving benefis, got back a lot more than was originally contributed, including the employer’s contribution and earnings thereon; those in my cohort will (hopefully) about break even; the younger folks, IIRC those now 40 and under, will be net losers. Thus, in your case, there would be a “balance” that would forfeit, if you will.
Social security was never actuarially sound; the use of the term “insurance” was more for political salability as opposed to fact; it has always been, more or less, “pay as you go”, with the current boomers’ contributions making up the surplus theoretically held in the trust fund; demographics reveal that as the bulge in the python reaches retirement age, the surplus dries up, as there are fewer workers out there to support us, thus the looming fiscal crisis.
The Medicare fund is on more precarious footing, and while the entirety needs “fixing” sooner rather than later, Medicare cries out for the higher priority.
Steven,I don’t hate the government. However, I want the government to do what it does best and stay away from being all things to all people.
PeeMom,You’re feeling less and less of me?
*Thank you Jesus!*
amen.
suza,
I’m 2 years older than you and right on the cutoff line. As I understood it when presented earlier by Bush, those born in 1950 and earlier would remain with the SS program. Those born later would not. So where does that leave me? Where does the money I paid in go? And being self-employed for the past 6 years, that’s double MY money.
In case nobody remembers or was paying attention, when GW was campaigning in 2000, he announced that he would do away with the current SS program and the money collected would be invested in the stock market. Fortunately (or maybe not), that was changed to “private savings accounts.”
The current SS program needs some adjustments, but canceling it completely is the dumbest idea yet. Leave it to Dumbya (and the Repubs) to do everything possible to get rid of it…and screw everybody over in the process.
RD
NO ONE, and I mean NO ONE, has proposed “canceling,” or getting rid of, SS. Much of the hysteria you hear over SS is nothing more than Democratic scare tactics, designed to scare seniors into believing that “republicans want to take your retirement” - a scare tactic that has been trotted out again and again.
The facts are that SS and it’s related programs, Medicare, are in serious need of reform. They are not, as VT puts it correctly, actuarilly sound. Changing demographics and continuing misunderstand about what SS truly is ensures that. But Democrats continue to play politics with the programs, attacking any talk of reform for political gain and thus putting off the day of reckoning to the future, when the fix will cost more.
There are a number of proposals, some tinkering, some serious redesigns, of SS that deserve consideration. Some have merit. But these endless scare tactics serve no end but a political one. Shameful.
I have a grandma that depends on social security for her monthly income. She was a woman that got married, raised kids and never worked. Grandpa died in 1971 and she never remarried. People like her need Social security income.
Like I stated before, if GWB wants to pay me a lump sum payment for my contribitutions into the social security pot for the last 37 years (I’ve worked since 16yrs old), then I’ll take the deal and get out of social security permanently. But if GWB just wants me to get out now without taking my contributions with me - then he will have a fight on his hands.
Meaning -I can’t believe you can top being the asshole you already are.
You are such a pathetic excuse for a human being really.
The problem with SS reform is Iraq, frankly.
Let me explain. SS is currently a defined-benefit plan that’s funded by current wage earners. That means that everybody who receives a SS check gets a predictable amount each month, and the total of all the checks is paid for through the deductions of (most) everybody working and earning a paycheck today.
The problem is this: if we begin to allow certain wage earners to siphon off a portion of the money they pay in away from SS and to their own personal accounts, then how do we write checks to current beneficiaries, checks that don’t bounce? How do we make up for the missing incoming funds that would be sent to private accounts rather than being sent to beneficiaries?
In 2003 some economists estimated that diverting enough payer money to establish payer private accounts would mean that there would be about $1.4 trillion less to distribute to beneficiaries.
That’s $1.4 trillion. With a T.
In other words, under the plans offerred by Republicans in 2003 SS would have to borrow $1.4 trillion in order to establish private accounts (for younger workers) while simultaneously meeting the needs of SS beneficiaries (for older workers and current beneficiaries).
And that’s how we come to Iraq. Right now it looks like Iraq is going to get that $1.4 trillion, not SS. Unless we double down and borrow something like $2.8 trillion. Seriously.
That’s only one of several reasons that Bush is often described as the worst president ever, and also why it’s extremely difficult for many thinking Americans to take Republican efforts to “reform” SS seriously. Republicans would earn back a measure of their integrity if they renamed the party Respendicans, frankly.
Our president has already made our choice here, and the winner appears to be Iraq — if you can call that winning.
Agreed, Pedant, unfortunately. Why is that Bush can find money for his war but not for Americans? Of course, he is borrowing from China to finance the war and those chickens will come home soon to roost.
The man who brought you “mission accomplished” in Iraq, disasterous disaster response to Katrina, and tax breaks for the rich that busted the budget now wants to bring us “Social Security reform.”
Yeah, right. Bring it on . . .
Worst. President. Ever.
Bush once predicted that Social Security would “go broke” in 1988.
In 1988, Social Security was bringing in more money than it was paying out–in other words, it was the only thing in the Federal gov’t that was NOT “broke.”
Agreed, WORST president ever!
I’d say worst president IMAGINABLE. But that would only encourage the neo cons to top themselves with someone worse.
I’m curious, since you brought it up, CapnAmerica, what does the government do with the excess social security taxes it collects?
n, not to speak for CapnAmerica, but the excess collections are placed in the “trust fund”; as I understand it, the trustees have loaned the fund to the Government’s general funds by purchasing long term bonds.
The government agencies that receive these social security funds in exchange for a bond, what do they do with the money? Do they spend it?
n, yes, as are all general revenues. The dilemma arises when the bonds are due; from whom does the government obtain the funds to redeem the bonds?
Exactly, VT. Where will these government agencies get the money to pay back the bonds they issued when social security needs that money?
This is the fallacy of the trust fund. It does exist, but the only way the government agencies that spent the money can pay it back is to raise taxes somehow. Or, is there some other way?
This also means that the deficit spending we’ve had is understated, as we really need to add the social security surplus to it, as that money is spent.
Yes well Al Gore’s “lockbox” would have held all collected social security taxes and allowed them to be used only for benefits.
But then the people who laughed at “lockbox” don’t WANT to save Social Security. They want to kill it.
You are right about that, JR, I would like to end social security. It’s humiliating to be forced to submit by law to a government retirement plan. It reduces the liberty and freedom that we could otherwise have.
The only FIX for Social Security I ever hear from the Left is to raise taxes. Of course that seems to be the Lefts fix for a lot of things.
If any on the Left have suggestions that don’t include raising taxes I’m all ears.
N, please spare us the bullshit.
What’s “humiliating” is working hard all your life and end up slowly freezing to death because you can’t turn the gas on in your tiny apartment. What’s “humiliating” is having to eat cat food to stay alive.
Social Security dropped the poverty rate among the elderly from 40 percent to less than 10 percent. It’s the most popular government program.
BTW, if you don’t like paying SS, just make a lot of money. You only have to pay SS tax on income up to 90,000 dollars. After that, you don’t pay into SS at all.
Heckler–
SS doesn’t need to be fixed. The SS “crisis” is the same kind of crisis as the WMD’s in Iraq?
Remember that?
There is no crisis unless you believe Bush. And how many times does Bush have to be wrong, wrong, wrong for you idiots to quit believing him?
Means Testing??? Heckler.
In other words, if you can afford to get by without it, you don’t get it.
How that might break down number-wise, I’m not sure.
Another idea - negotiate drug prices. Big Phrama won’t like it, but I am betting they will still get pretty rich, anyway.
“This also means that the deficit spending we’ve had is understated, as we really need to add the social security surplus to it, as that money is spent.”
Wrong, n.
Social security debit is anticipated in budgets and national debt.
1. “Means testing” is not needed.
2. “Means testing” turns an entitlement program into a welfare program. Programs for “the poor” are poor programs.
Social security has never missed a paycheck in 70 years because people pay in now for people drawing in the future. In the future, we’ll draw from the people who continue to work and pay in.
Not that hard to understand really . . .
Oops, I meant to say, “people pay in now for people drawing SS now . . .”
Capn…………it’s obvious that the right wing nutcases are out in force tonight. They hate SS because they hate the US and it’s way of life. Care for others……say it ain’t so!
The Republican Righties don’t like Social Security unless it benefits them. They don’t like redistributing wealth unless it is going to redistribute it themselves.
Agreed, Blaidd–The right-wing hated Social Security from day one. Kansan Alf Landon called it a “pyramid scheme.”
They always wanted it to fail. It hasn’t.
It shows that gov’t can impliment simple programs that really improve people’s lives, which runs totally counter to the right-wing’s religious belief that government is always bad and creates more problems than it solves.
Social security is exhibit A that what the right-wing thinks is wrong.
That’s why they hate it–even though if it were destroyed, it would hurt them more than anyone.
A lot of red-state small towns are kept alive by old-timers drawing Social security checks, at the same time they cuss “government” for all their ills . . .
The collectivist mindset of capngalahad and the rest of you bolsheviks knows no bounds!
Viva La Raza Blanco!!
KSGoofNut asks, “I wonder how much of the 15.3% of our incomes goes to pay the Social Security Administration’s salaries, equipment, utilities, etc.”
Wow, what a complicated and deep question. I’ll bet nobody knows that! Who could possibly know what the administrative cost is?!
First off, the amount of SS tax is 12.4 percent, not 15.3. The 15.3 figure includes the Medicare tax of 2.9, which is essentially unrelated.
Secondly, the administrative costs for running SS is about 0.6 percent. That’s pretty low compared to most managed funds that I’m aware of except for maybe Vanguard.
http://www.cbpp.org/8-11-05socsec.htm
Third, if it weren’t for SS, 47 percent of seniors would be in poverty. With current SS, that number drops to 8.7 percent.
But keep it up, reich-wingers. Keep tilting at the wind-mill of Social Security. Every wild-eyed attack means another won election for our side.
As far as Ian the Racist Idiot, his parents are probably drawing Social Security, but here he is, bitching and moaning about it.
Tell your parents you want to take their Social Security checks away from them, Ian. See how they like it.
According to the Vanguard Fund site, 1.35 percent is the mutual fund average administrative cost.
SS is fully half that.
Here’s a simpler plan: Why don’t we do away with government retirement plans and let each person decide what they want to do on their own?
Because workers in their 50s and 60s have included Social Security in their retirement planning.
Hector,
President Reagan raised Social Security taxes while in office. All the Democrats want to do is raise the $89,000 cut off.
I wonder who decided that $89,000 was a good place to stop and how long it’s been at that amount, anyone know? Incomes have increased so it would seem logical to raise the limit in my opinion.
This is typical partisan politics. Liberals mostly jumping to conclusions about a conservative proposal to limit the Government.No one is suggesting cut off social security all together. No one is suggesting that current seniors and those within say a decade of retirement start eating cat food and lose their medical insurance.The idea is for people in their 40’s and younger to have more of a say in their retirement planning.For a bunch of doom and gloomers that mistrust the Government so much I am always surprised at how much you trust them to control your golden years.
Actually, it goes up a little every year for the next couple of years, Delores.
I think it’s 94,000 this year or so.
The idea for the cut-off is that SS is not supposed to be “welfare.” It’s not something for nothing.
You pay in and you get back. If there were no limit, then the richest people in America would draw like half a million or a million a year in Social Security.
Having a cut off means that everybody gets a more equal amount, yet still makes it a pay as you go system.
There’s advantages either way I think . . .
KIA writes “The idea is for people in their 40’s and younger to have more of a say in their retirement planning.”
You mean like IRA’s and 401k’s and 403b’s that already reward savers with tax deferrals?
Yeah, how’s that going, when practically no one actually maxes the saving programs out?
If people were good at saving for retirement, we wouldn’t need Social Security.
That’s why we need it.
Liberals will think of 1000 reasons why we need more government programs. That’s what makes them liberals. They think the government is the answer to most every problem.
Conservatives believe that individuals and the free market drive more effective solutions.
Yeah because we trust the rich business owners to do the right things. Heh.
Would that be like how China treats their workers so well?
No protections for disposable workers. That’s how you want it to be testicles.
You mean like IRA’s and 401k’s and 403b’s that already reward savers with tax deferrals?
Yeah, how’s that going, when practically no one actually maxes the saving programs out?
Well maybe with a little bit back they could save more in something offering better interest than whatever SS is going to give us and contribute that measley 3% or whatever the employer is willing to match.Brilliant! Maybe that’s the start right there. Cut indidividuals SS by the % that the employer is willing to match.
Facts (in billions) -2003 OASDI benefits paid: 4702003 Administrative costs: 4.7
4.7/470 = 1.0%
The very leftist CBPP says it’s 0.6%, but that’s just the OASI portion. The DI segment of the organization spent 2.7% of its expenditures on admin costs. (See how those liberal websites manipulate the numbers? Only telling half-truths - where in the world did the learn that?)
http://www.ssa.gov/OACT/TR/TR04/II_cyoper.html
Fact: the thriftiest mutual funds manage admin costs at 0.2% and even the more extravigant funds keep them around 0.4%.
http://www.fool.com/mutualfunds/glossary.htm
“Conservatives believe that individuals and the free market drive more effective solutions”
The translation for that is “Wal mart needs those old people as greeters.” or , from someone like goofnuts.
“Arbeit macht frei”
This topic does not make any sense, why make another system of planned retirement?SS is also about retirement, the only thing wrong with it is mismanagement.
I think you are misinformed, CapnAmerica. The question was, what happens to the excess funds that social security takes in at the present time. Do you have an answer for that?
And then, in the future, if social security were to need these funds, where would they come from?
I understand why you defend social security. I can understand how some people would rather have people rely on government rather than something else for their survival. But that doesn’t make it right.
Instead of personal responsability, you substitute government. That’s a choice you make. But does that mean you have to make the same choice for others?
This is the new fascism of the left. Accept government retirment, government schools, government everything.
By the way, just how does someone work hard all their life and have nothing to show for it at the end?
I would favour this program IF it was not taken from Social Security but was an addition to Social Security. I would give up another 1% for the private account but leave Social Security alone.
Non union workers are disposable items. The bosses will never say so but you are just a number to them on the liability side of the ledger. Union workers have a bit of job protection but not much.
There is nothing wrong with government. Social Security is a model of efficient management. It spends only about 1% on overhead which is unheard of even in not for profit organizations. If the rest of the government worked so well, we’d be better off. And there is nothing wrong with government programs as long as they are well managed and cost justified.
If you have a 401K in your company and then some CEO raids your company of all the pension funds (ie Enron and others); where does that leave you? Nowhere and some corporate leech gets a vacation at taxpayer’s expense or they take the Ken Lay way out.
Perhaps this is why people don’t trust their employers with their pension money?
http://www.msnbc.msn.com/id/11098797/
WASHINGTON - Americans’ personal savings rate dipped into negative territory in 2005, something that hasn’t happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items.
The Commerce Department reported Monday that the savings rate fell into negative territory at minus 0.5 percent, meaning that Americans not only spent all of their after-tax income last year but had to dip into previous savings or increase borrowing.
The savings rate has been negative for an entire year only twice before — in 1932 and 1933 — two years when the country was struggling to cope with the Great Depression, a time of massive business failures and job layoffs.
GoofNut writes:
“Liberals will think of 1000 reasons why we need more government programs. That’s what makes them liberals. They think the government is the answer to most every problem.”
Conservatives believe that individuals and the free market drive more effective solutions.”
*****
Wrong again, GoofNut. Liberals look at the facts and draw conclusions. Conservatives start with their faith-based conclusions and force the facts to agree.
Liberals don’t believe that we need government to police our bedrooms, for instance.
The fact remains that before SS, 40 percent of retirees lived below the poverty line. Afterward it dropped to less than 10 percent.
Today, without SS, 47 percent of retirees would live below the poverty line. With SS, only about 9 percent do.
These are the simple facts. SS has been tremendously effective in stopping poverty among retirees.
You want to end the most successful and popular program ever created because of your unsubstantiated, faith-based belief that the “free-market is always better.”
You completely ignore the facts that some of the poorest, most lawless, violent places on the planet have totally laisse-faire capitalism and weak government (Afghanistan-Iraq-Guam) while the most pleasant prosperous places have strong central governments that provide a lot of services (Singapore, Japan, Europe).
Steven Davis
What’s the difference between Means Testing and raising taxes? Words. One of the hallmarks of the system when it was introduced was that all who contributed would benefit. Taking the benefit away is in practicallity little different than raising the tax.
Heckler
Ronald Reagan proudly collected HIS Social Security benefits. This in spite of the fact that he had been made a millionaire shilling for GE and other corporate interests.You defend this?
And speaking of “bending the facts,” KSGoofNuts conflates the Old Age Pension part of Social Security and the Disability Insurance part of Social Security and claims that administrative costs are 1 percent.
Two errors–of course, DI is going to have higher administrative costs: people have to file claims and the SS office has to evaluate those claims. Sometimes there are even lawyers involved and that always means serious money.
You can’t look at the DI part of Social Security when you’re talking about the pension part of Social Security. How many mutual funds provide DI? That would be none.
So once you roll that out, you get 400 billion in assets paid out (which is less than what we pay for one year occupying Iraq btw), at a 2.6 billion administrative cost which equals 0.65 percent.
The second error is using the assets paid out as the starting figure. When mutual funds calculate costs, they look at the “assets under management”–in other words all the money that is invested in that fund.
I pay administrative fees on my mutual funds whether I cash them out or not, and so does everybody else.
When you calculate SS the way a mutual fund calculates costs, it would be costs on all money invested with it, which in the case of SS would be something like 1.5 trillion dollars in the special bond funds that are currently earning interest.
So take that .65 figure and divide by ten = .065. That would be the apples to apples comparison with mutual funds.
CapnAmerica
Simple demographics say that Social Security will fail unless taxes are raised or benefits are cut. You call that a sound program?
When the program was started the big railroad companies and certain municipal governments were allowed to opt-out if they had their own program for retirement. There’s a small town, in Texas I believe, who’s employees are retiring with a higher income than before retirement because they opted out and set up a sound investment fund in it’s place.
And if something better could be created, why not, why hold to an old program that can’t sustain itself without raising taxes and/or cutting benefits.
JR
We can always count on you for the old class envy arguement JR.
“Simple demographics say that Social Security will fail.”
Wrong. They don’t say that, Heckler.
That’s what Bush says. If you examine Mr. Bush’s track record for accuracy, you may find it less than stellar.
“They hate us for our freedoms.” No.
“Saddam has WMD’s.” No.
“Mission Accomplished.” No.
“My tax breaks benefit the people at the bottom of the economic ladder the most.” No.
“There’s a new sheriff in town, one dedicated to fiscal responsibility.” No.
“We’re gonna get Osama dead or alive.” No.
Why you continue to belive this man, I don’t know. Social Security is not in crisis now, and it won’t be in the future.
You “gloom-and-doom” conservatives need to look at the facts.
I note you did not dispute my point Heckler,
Oh and Heckler? THings keep going the way they are and you will see new meaning for “class warfare”. YOU know, like some actual warfare?
Oh whatever.The conservatives have all the guns
JR
What point, that you hated Reagan?
Ronald Reagan proudly collected HIS Social Security benefits. This in spite of the fact that he had been made a millionaire shilling for GE and other corporate interests.You defend this?Posted by: J R | December 28, 2006 at 10:30 AM
So am I correct in reading this that if someone is wealthy, who had paid into social security their entire working lives (and at a greater rate as they’ve earned more than the general populus) that because they are wealthy and possibly don’t “need” them they should not be allowed to collect their social security benefits or it is somehow unethical?
I believe the whole Social Security system should be reformed; but means testing, IMHO, should not be a part of it.
While we’re at it, let us look at raising the retirement age to a comparable age now that 65 was when Social Secuirty was enacted, vis a vis life expectancy. All at once, not incrementally as is the current law.
Vaughn–
Yup, you can raise the age for drawing benefits as we’re already doing if you want to.
But think about that for a minute.
You’ve got older workers on the job. Some of those workers will get injured (back problems, anyone?) and end up drawing Disability Insurance.
The increase in Disability Insurance claims could easily eat up the savings in raising the retirement age.
The best way to protect Social Security in the future is to reduce federal spending on other programs now.
Like invading Iraq, for instance. Every year we’re there is a year we could have paid for Social Security for every retiree in American and had money left over.
CapnAmerica
30-40 years ago the ratio of workers paying in to retirees drawing benefits was 15:1 .
Today that ratio is less than 3:1 .
All indications are that that ratio will continue smaller.
If that is not a problem in CapnAmericas world then it is pointless to discuss this with you further. I’ve obviously overestimated you intellect.
I guess I’ll never be rich. I’m not jerk enough I guess.
I cannot IMAGINE a wealthy person collecting Social Security. I should think they would look around and feel ashamed to be taking from folks less fortunate.
I guess on the way to getting wealthy, some folks sell out a lot of principles. Reagan certainly did.
“Oh and Heckler? THings keep going the way they are and you will see new meaning for “class warfare”. YOU know, like some actual warfare?”
I think, JR, you just hit the “meltdown” point you keep attributing to others. This is the voice of rationality?!?!
Woo hoo, the cheap shot at intelligence!
Thanks for running true to form, Heckler.
You know what the ratio was in 1970?
OMG! it was 3-1.
It hasn’t been 15 to one since like 1955.
Of course, the first couple of decades that the program gets started, there’s going to be a lot more people paying in than drawing out.
Duh. That’s because the retirees at that point haven’t paid in long enough to get anything out.
But after the system matures, it levels off.
Nice try, but not even close to a refutation.
Try doing some research that doesn’t come from Rush or the Cato Institute.
CapnAmerica
Show me the source for your data. I’m willing to make a little wager that your 1970 number is wrong.
What is it with you right-wingers that you can’t google?
Oh that’s right–too much like informing yourself.
Capn
Never mind the bet, you were right, or close enough.
So the contiued downward trend does not constitute a problem in your world?
Why not do something better?
Capn
The fact remains that unless you raise taxes or cut benefits the system will continue toward failure.(unless of course you can reverse the demographic trend).
http://www.ssa.gov/history/ratios.htmlRatio of employees to beneficiaries
1940 159-11945 45-11950 17-11955 9-1
1970 3.7-11980 3.2-11985 3.3-1
1990 3.4-12003 3.3-1
I was off by 0.7 percent, Heckler. I stand corrected.
But as YOU can see, we’re now actually in BETTER shape than we were in the good old days of 1980.
What?! You didn’t hear this on Rush or in the President’s State of the Union?
What a surprise . . .
The “demographic trend” has already reversed itself a number of times over the decades.
Also, take a look at the years 1945 to 1955! In a single decade the ratio decrease FIVE FOLD! Surely, that wrecked the system, didn’t it? Surely, it went broke, bankrupt, kaput?
Or how about from 1950 when it dropped from 17 to one to 3.2 to one? Man, a lot of people must have missed their checks then, huh?
It doesn’t really matter exactly how MANY people are paying in or taking out. It’s a red herring.
What matters is how MUCH is coming in and how much is going out. Right now, we have 1.3 TRILLION saved in special non-tradable gov’t bonds that has helped our economy immensely.
Social Security is the only program in the federal government that actually brings IN more money than it pays out.
You don’t want to hear that, because it doesn’t conform to your preconcieved idea that government is always wasteful and can’t do anything right.
Sorry. Facts don’t lie.
Medicare on the other hand is wallowing in red ink, mainly because medical costs are shooting through the roof.
If you want to “reform” something, reform that. It’s the real mess . . .
CapnAmerica
And what’s going to happen to the demographic trend and that 3:1 ratio over the next 15 years?
Look ahead Capn, it’s not going to get better, you just going to wait until the bloody end before you admit an obvious problem?
I think you are misinformed, CapnAmerica. The question was, what happens to the excess funds that social security takes in at the present time. Do you have an answer for that?
And then, in the future, if social security were to need these funds, where would they come from?
I understand why you defend social security. I can understand how some people would rather have people rely on government rather than something else for their survival. But that doesn’t make it right.
Instead of personal responsability, you substitute government. That’s a choice you make. But does that mean you have to make the same choice for others?
This is the new fascism of the left. Accept government retirment, government schools, government everything.
By the way, just how does someone work hard all their life and have nothing to show for it at the end?
Capn
What was the original SS tax rate?
What is it now?
Why do we have to keep raising the “full benefit” retirement age?
n?
how does someone work hard all their life and have nothing to show for it at the end?
Uh could it be that workers wages versus purchasing power has been in a tailspin for 30 years? Or maybe they were outsourced in their 50’s. Or maybe they worked for Enron?
Heckler? It aint just the surplus that is being and has been raided from Social Security. It’s ALL the funds.
Both sides at fault there.
Al Gore had a solution. But he was not cute and flippant with it. And unlike bush, Gore knew that Social Security was actually a federal program!
N writes, “Instead of personal responsability, you substitute government. That’s a choice you make. But does that mean you have to make the same choice for others?”
Yes, N, it does. You see, we’re all in this together. The only way your system would work is if people who were irresponsible were just left to die miserable penniless deaths.
I don’t think that even a Scrooge like you are going to stand idle while millions of seniors slowly rot to death. And who would collect their corpses?
Not government, according to you. So who?
I think that the richest country in the world can devise a simple system for meeting old age pensions for everyone. This is what Social Security is.
If you don’t like it, move to Somalia. They don’t have Social security there. And it’s such a free market paradise, you can even buy yourself some slaves if you want.
Regarding all the questions you right-wingers peppered me with, here’s a good website for you.
http://www.socsec.org/publications.asp?pubid=507
I remember hearing all the tripe about Social security “going broke” when I was still a teen-ager in the 70’s.
The same people were saying it back then too.
Then I took the time to educate myself on it.
Capn, there was a perceived crisis in the ’70s, which resulted in the commission referenced in the link you posted. Actions taken at the time (as unpopular as they were) resulted in additional time to review and resolve the issues now in play.
Well, yeah, Vaugh, that’s true. Bob Dole was one of the dudes that increased the SS tax in the early 80’s to prepare for the baby boom etc.
My point is that this “sky is falling” rhetoric about Social security has been around for a long time–from the very onset in fact.
It’s never missed a paycheck in 70 years . . .
The other thing is with all these free enterprisers who think that CEO’s have a God given right to earn 45 million dollars a year, company pensions have become ancient history. Under Reagan, buying companies and stealing their pension funds became an industry in own right.
The result is that people are more dependent on SS now than in the past, as capital and productivity gains continually go to the very richest people.
CapnAmerica, how does the US Government pay back treasury bonds? The SS site leaves that question unanswered.
If you could answer that for me, it would go a little bit towards helping us all understand.
I once read someone on this forum be critical of someone else for using a “straw man” argument. Isn’t a comparison of the U.S. to Somalia a little like that?
n–
A ’straw man’ (also called a weak opponent) is when some one does not argue against the real argument but constructs a fake argument and says “this is what my opponent believes” when that is NOT what the opponent believes.
The Somalia reference was not a straw man. It is a logical consequence of absolutely no government control or concern, which is apparently what you radical right-wingers want.
As for the trust funds, they are gov’t bonds. They’ll be paid back the same way all gov’t funds are paid back–through tax revenue.
One-third of Bush’s tax cuts for the rich would pay for the projected shortfall. That would still give the rich a substantial tax break than they had under Clinton.
You constructed a straw man of your own “n”.
That bit about “How does anyone work their whole life and have nothing to show for it.”? That’s a straw man you constructed. I kicked it down for you.
Of course it is a straw man argument, by your own definition. You attributed to me things I didn’t say, so that you could easily knock it down.
Free markets lead to slavery? Is that what you mean to say?
(It might have been, if you are the same CapnAmerica who once said that “As far as jobs go, SLAVES had jobs.”)
Because free markets mean freedom and liberty, and slavery is the opposite of that.
Free markets mean a government that is concerned with protecting people from force, fraud, and coercion.
Free markets mean that people choose for themselves what they want to do, what they themselves want to make of their lives.
It means that people themselves choose what they want. They don’t have to submit to the will of the majority.
Now someone like yourself wants to believe that free markets result in slavery (if you were really serious when you equated slavery to having a job) because I think you don’t want people to be free. You want them subservient to government.
Instead, it seems that you believe in the new fascism of the left. Please, do not tell me that we are all in this together.
And JR, can’t you recognize when someone is setting you up so that we can hear a little more of your whining about the injustice of this or that?
I busted your straw man n and you didn’t like it.
Let’s just let you expose yourself a little more “n”.
Just how free market are you?
Are you for employers being able to hire illegal immigrants? Don’t put it back on the border. They are exploiting the free market of people who are here for whatever reason after all.
Are you free market to the extent of outsourcing this nations manufacturing capacity at the will of corporations in pursuit only of profit?
Hey howsabout some REAL free markets? Those defense companies should be able to market their wares to anyone shouldn’t they?
Cry leftist fascism all you like n or Nathan or whoever you are. What YOU are is a corporofeudalist. And no I do not feel particularly together with such as you in anything.
Go ahead. Try and kill Social Security. Bury you and yours for the next 20 years is a good thing my thinking.
You bust nothing, JR. It is only from you far-left, wing-nut, fascist or socialist (I’m not quite sure which applies to you) viewpoint that things seem unfair to you.
Are illegal immigrants being exploited by their employers here in America? Is anyone forcing them to work here? Don’t they have the choice to return to Mexico or wherever they came from if they think it is so terrible here? The fact that they stay is strong evidence that they feel they’re not being exploited.
Anyway, we should have more immigrants. Make them legal so that they can’t be taken advantage of due to their legal status. (That’s protecting them from force and coercion, one of the functions of limited government.) We’re going to need them to pay all the taxes necessary to provide for future government benefits everyone seems to want.
I believe we as Americans should be free to trade with anyone we want in whatever country without restriction. Adopting this policy would make us all better off than we are.
Your question about defense companies being able to sell anything to any country is different, I believe. One of the few legitimate functions of government is to provide for national defense. If selling a product to a particular country would place us at risk, that would be acting in contrary to providing for the national defense, and should not be allowed.
Do you see why collectivism is so harmful? You feel hostile towards me. Yet, we are forced to live off the same government retirement program, the same crummy government schools, and, if you get your way, we’ll be seeing the same crummy government doctors. Isn’t that misery?
Yup, thanks, JR, good post.
The segregations used and still use the “free market” as a justification to discriminate.
“It’s my apartment, I’ll rent to who I want. It’s my company, I’ll hire who I want. It’s my church, I won’t go if there’s a ____ (black, woman, gay, etc)in the pulpit.”
You engage in logical contradiction when you say that “free markets mean freedom and liberty, and slavery is the opposite of that.
“Free markets mean a government that is concerned with protecting people from force, fraud, and coercion.”
But that means that government has to protect people from–gasp!–companies who pollute, who hire children, who use political connections to win no-bid contracts and profit off of our nation’s war.
A truly “free market” means that you could buy whatever you wanted: sex, drugs, human organs, human beings.
Your admission that “freedom” depends to some extent on government control shows that you already acknowledge the truth of our position.
“But cudgel thy wits no more about it, for thy dull ass will not mend his pace with whipping . . .”
And why should I not be able to sell bombs to terrorists?
Who are you with this “collectivist” crap to tell me what my best interst is?
Funny how selling arms to terrorists is bad because it “puts us all at risk,” but destroying Social Security is just fine because you don’t have any responsiblity for me and I don’t have any for you . . .
Now we are taking economics lessons from the far left of the WE blog Democratic party? That’s a laugh!Where’d you guys learn your economic theory, 7th grade?
A free market is a market where the price of each item or service is arranged by the mutual consent of sellers and buyers (supply and demand).
A free market (like we have in the US) comes from the laissez-faire economic philosophy, which basically confines government intervention in economic matters except to regulating against force and fraud among market participants.
Government force limited to a defensive role, government itself does not initiate force in the marketplace beyond levying taxes in order to fund the maintenance of the free marketplace.
It should be noted that a few extreme free market advocates oppose even taxation.
I’m not surprised that someone who equates slavery to having a job can’t make such distinctions.
Face it, CapnAmerica, you are collectivist. You are a socialist. There’s no other explanation for what you post.
I’m not surprised that you won’t acknowledge the absurdity of what you post. No thinking person could believe it.
What is it that you do for a living, if I may ask? Does it require thinking?
By the way, Hamlet, you’d acquit yourself well to deal with the issues you’ve raised, instead of the “straw men” you raise again and again. Is your brain muddled so?
Heh, yup, they call that “ad hominem.”
But don’t worry, we’ll protect Social Security for you.
And let me guess, you won’t have any problem cashing the checks . . .
“As far as jobs go, SLAVES had jobs.” — CapnAmerica
Is that ad hominem enough? What a moron! And from someone who has no qualms about reeling off insults.
See how easy it is Capn?
They are oh so free market….right up until it touches something they care about!
Kia? How much free market has the average worker got in this ever shrinking field of employers? A Wal mart comes into a community, wipes out two dozen small buisness owners AND all their employess. Then ALL those folks have a choice. ONE CHOICE.
Work for Wal mart for what Wal mart will pay.
What you free market advocates don’t get (among many things) is that too much of any good thing is not good. Too free a market creates tyrants IN that market.
And Social Security? Yeah I can see why you’d like to kill it. Get those workers just a little MORE nervous. Makes ‘em ask fewer questions and make fewer demands. Keeps their noses on that grindstone.
Wal-mart doesn’t have a monopoly on anything.There’s also Target, much nicer stuff at the price.But getting back to Wal-mart, it comes into community and the citizens will make a choice of how often they shop at it. Or if to stop shopping another in favor of Wal-mart.You are welcome to go out and picket, flyer the parking lot, whatever you want to try and get people to shop the Mom and Pop over Wal-Mart or Target, but it’s not the Governments business to shut them down or minimize them.
n–
I stand behind that statement–slaves did have jobs. Actually, it’s not original to me, Jim Hightower wrote in one of his columns.
They didn’t have very good jobs, did they?
That’s the point which was apparently lost on you–having a job doesn’t mean much when that job doesn’t pay a living wage and you have no essential benefits like health care.
Arguing with you free-market true believers has become tiresome so I’m going to abandon this thread.
Continue to carry on with you insults against me personally in lieu of actual evidence . . .
Whole argument is moot due to spending on Iraq.
Only today’s glassy-eyed Republicans would gloss right over $1+ trillion in bridge financing without blinking. I guess they don’t call you guys Big Government conservatives for nothing.
BTW, n clearly jumped the shark at 11:14 a.m.
MrK, I do not believe Wal Mart, Target, K-Mart, or other “big box” stores do this, but consider the following: BigBox, Inc. opens a store in a town, geographically isolated (i.e., 100 miles from the nearest larger urban area), and engages in predatory pricing practices (selling below cost), which results in all the Mom and Pop business to close; then BigBox, Inc., now a monopoly in the town, raises its prices to whatever level it wants, pays its employees whatever it wants, etc. Is it then the business of government, in such a case, to shut them down?
Wal mart is just one example of the larger problem Kia.
I’ve already shown you that the free market is not really free.
Junior,Your head is in the sand, man. Wal-mart has been in Wichita for…how long? Yet, Ace Hardware stores are still in business. Star Lumber seems to be doing well. How does Beard’s 66 (full service) manage to stay in business in the face of all these C-stores that sell gas for cheap?
How do so many local restaurants flourish in the face of chains like Chili’s, Applebees, Outback? How about Johnson’s Lawn and Garden? Heck, Wal-mart sells shrubs and trees. And why are there so many oil change shops when Wal-mart does that, too. Play It Again Sports is RIGHT NEXT TO WAL-MART on East Kellogg. Doesn’t Wal-mart sell sporting goods?
How about grocery stores? Dillons seems to be doing just fine in spite of Wal-mart. ‘Course, they’re a big corporation, too - but Leekers IGA isn’t. And they’re still in business (and growing).
Dandurand Drugstore? How do they survive with Wal-mart and Walgreens right down the street? Wait - Wal-mart sells clothes, yet, Johnston’s continues to grow every year.
I could go on and on (and I might later)…
There are countless small businesses that prosper in the face of Wal-mart. How? You figure that out, Junior.
goofnut
For every business you have named that struggles to survive, I can name 20 that did not.
And of those that did survive the wages for their workers are sublimated by the resulting lack of competition.
And you would take away Social security. The one thing that lets folks have some assurance there is a bit of rest at the end of their drudgery.
Junior,Start naming them. And I’ll bet you I can name plenty of businesses that crashed long before Wal-mart.
I know those business I listed above, Junior. They’re not struggling. They’re GROWING.
You still didn’t answer how, Junior.
Dozens of private and franshised gas stations. goneQuik TripBleirs, Pierces, and dozens of more small grocery stores gone,
Dillons/Wal mart
Calhouns, Mc Donalds(clothing store) Davids, Skaggs, Osco, Otasco, Mcleods, Ardans, many others
Wal mart
But why go on with YOU goofnuts? YOU are in the business of getting the most work out of people for the least amount of pay. All I got for you is a punch in the nose.
It is sad that CapnAmerica and JR are so warped in their view of the world that they see government as their only salvation.
Slavery equals having a job? Even a low-paying job? Are you talking about your job, CapnAmerica? Can you quit your job, or is someone forcing you to do it?
And JR, what made you so hateful to the working world? Even if you’ve had bad experiences and want to give up on the mean ol’ world, please leave the rest of us happy people alone. Don’t force the solutions to your perceived misery on everyone else.
What is misearable is to be lumped in a government retirement plan, a government school, and government healthcare with folks like you. Get a life!
Vaughn I believe what you talk about would fall under unfair business practice and anti-trust laws.Why aren’t all the business being shut down by the Wal Marts are filing suit claiming such things if they truly exist?
Junior,Those corner gas stations? Their property was worth more than the NPV of the business, so they sold to companies like QT, Starbucks, Walgreens. One of my dearest friends owned a gas station in East Wichita. He sold in the mid-90’s and now plays golf every day. Poor guy. Mean ol’ QT. heh.
Those small grocery stores? I’m sure they COULD have survived, but chose not to or sold. I don’t know details.
Why did Osco fail when Walgreens is prospering?
You’re avoiding the question, Junior - and, most likely, you just don’t know the answer. Why do companies like Williams Hardware, Johnson’s Garden, Johstons Clothiers, Gentry Ltd, Star Lumber, Olive Tree, Kobe, Lamars Bakery, Beards 66, Dandurand Drugs, Lawrence Photo, Leekers, Great Harvest, Finley’s Hobbies..etc..etc..etc..all remain healthy and growing?
Answer: Service. They provide something Wal-mart doesn’t. And they have ownership that understands that a company has to be flexible and responsive to the market. It’s not the big that eat the little, it’s the fast that eat the slow.
MrK, didn’t say Wal-Mart, et al were so doing; however, absent government regulation, the scenario (as simplistic as it is) I posted was to demonstrate the need for at least some government oversight in the marketplace, because, as I am sure you are aware, that is one very potential outcome of a market free of regulation of any kind.
I follow you V.Agreeing with you for the most part.Don’t you think the ACLU would take a big bite out of the likes of Wal-Mart’s butt if they had a chance?
The smaller offer better Quality too Nut, and at a price that reflects it.
Probably not ACLU, as that organization seldom bothers itself in the commercial law area, concentrating instead in the constitutional area. I believe there are many “consumer interest” groups out there who want a piece of that action when and if one of the big players oversteps the boundaries. Thanks, MrK, for the chat on this.
MrK,Sure, sometimes the price is higher. But I bought a sump pump at Williams some time ago for around $85, and the same pump at Home Depot was $89.
You’re 100% right about quality. Ever had a loaf of bread from Great Harvest? Or a cinnamon scone? oooh baby.