Joined: Sep 25, 2004 Posts: 4534 Location: Boston, MA
Posted: Mon Oct 23, 2006 9:12 pm Post subject: Re: Social security
As for the progressive tax system.
Think about the alternative.
We either slash spending dramatically or raise taxes on the poor up to the level of the rich.
The happy middle ground still makes the working and middle classes pay a much larger portion of their income to the government.
I'm not saying it's "fair". I'm saying that it's the least unfair.
There just isn't that much fat to cut out of the budget. I've looked. We could probably cut out 300 billion bucks without causing too many problems. But then we hit a point where we have to decide, highways or high schools? Pensions for soldiers or weapons for current soldiers? NASA or the NSA?
Who do we cut off from federal medicine? The old or the poor? Or both? National Budget Simulator
I tried, I really did. But I only managed to cut the budget by 80 billion. I mean, aren't we trying to prepare for Peak Oil? I'm annoyed that I could only double the Department of Energy's budget! _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Mon Oct 23, 2006 11:12 pm Post subject: Re: Social security
I thought SS was meant to be a self funded retirement system. If you take the cap off, then by rights you also have to provide SS in like amount to contributions. It was not meant to be a welfare system, except to the extent that it does provide entitlement to people unequally due to lifespans. In that respect its like a social insurance.
It seems nobody actually believes ths system could be reformed so it does not become (remain?) a government piggybank. But, other countries have done it. At least Canada did, and we took our cue from some other countries, I can't recall which.
I used to work in the States, and I get the odd statement from SS showing my contributions and entitlements from that. Its not really a tax system, though the collection system is mandated and therefore resembles a tax. But, because your payout is geared to your contributions, its not like a tax.
Posted: Mon Oct 23, 2006 11:48 pm Post subject: Re: Social security
Gideon wrote:
Well Duke and Tyler, you've both made, it seems, my point.
You both seem to want a SS system that amounts to welfare.
First, go back and read my posts, I am about as far from a socialist as you will ever find.
Second, the numbers you quote are for income taxes only. When you do the numbers on all taxes (property, sales, payroll, etc, etc) You will find that the average family of 4 making $50,000 a year pays a greater percentage of their income in taxes than a family of 4 making $5,000,000. As a matter of fact, I am certain that on my paltry income of $19,000 a year I pay a much larger percentage of our income in taxes than most in the top 1% of earners.
Look, it's called Social Security for a reason. To help secure the society. We have SS so old folk won't starve in the streets like they did in the late 1920's and early 1930's. Do you have any idea how close the US came to a civil war at that time? SS is there so that when we have our next great economic meltdown, and if the Feds manage to stay in business, folk won't be starving in the streets.
Next, if my first 3 ideas were implemented together, most likely even the high end wage earners would probably see a cut in SS taxes because the system would only be collecting what was needed to pay benefits.
Next, you seem to enjoy knocking the idea of a progressive tax system. I believe calling it a socialist idea. Well the founder of the progressive tax systems here in the US was that widely known socialist Thomas Jefferson. Jefferson believed that it was a moral duty of the well off to provide the means for the government.
Also, I see that you failed to address the fact that the SS payroll tax is nothing but a regressive income tax levied on those least able to pay. You don’t even try to defend that position probably because you know it is indefeasible.
Next, let’s just leave out the means test, and all the wealthy paying into SS will receive the maximum benefit, (or did you even know that the more you pay into SS the bigger your benefit) that will not be a problem at all if the earnings cap is removed.
And finally, in your example the guy who is earning 3 million a year and paying in a million a consider quite fair. But if I were that guy I fire my damned accountant and find myself a much better tax man. In most cases I bet I even I could get his tax bill down considerably and I haven‘t practiced tax accounting for years. In the real world most folk who claim $3 million in taxable income most likely had $4-$6 million in gross income.
Look, if you want the regular folk’s lifestyle in this country to devolve to third world standards continue preaching the claptrap you have written above. Just remember that the ’Morlocks’ who are roaming around just outside of your gated community are well armed and will be perfectly willing to storm the gates.
Duke of Indiana _________________ I'd rather get my brains blown out in the wild than wait in terror at the slaughterhouse.
Craig Volk, Northern Exposure, A-Hunting We Will Go, 1991
Joined: Aug 19, 2004 Posts: 1719 Location: Republic of Texas
Posted: Tue Oct 24, 2006 12:59 am Post subject: Re: Social security
Interesting reads on Social Security by The Duke and Gideon.
Roy wrote:
You hit the nail right on the head there. Savings accounts don't return higher than inflation, the stock market, on average, returns less than inflation. Real estate? That's over with for the most part.
That is the part which really irks me.
Inflation is just plain evil.
Wet your beak everytime I earn money or spend money via income and sales tax, but !@#$%^&*, if I prudently choose to squirrel away savings for my old age, don't steal that!
I don't want to "play" the stock and funds markets which have become nothing more than a ponzi scheme.
I just want to save for the day when I can no longer work, as men have done for thousands of years.
I should live high on the hog and be $350,000 in debt and have declared bankruptcy every 7 years like my brother-in-law did. The system is rewarding him, and punishing me for trying to save and live modestly. _________________ Conform . Consume . Obey .
Posted: Tue Oct 24, 2006 11:28 am Post subject: Re: Social security
The way I see it at the age of 40:
Of course I'll have no SS when I retire, but when the Chinese come to collect the IOUs, I'll show them my receipts of exhorbitant taxes and mortgage interest payments and suggest they go after the deep pockets to receive their payments.
The best thing that can happen to SS is that it dies, it's ruined more lives than fast food, drugs and motor vehicle accidents combined.
Posted: Wed Oct 25, 2006 8:34 am Post subject: Re: Social security
67 is a good retirement age for a desk job but a nurse or construction worker is burnt out a lot sooner so they lose out. So this solution just increases unemployment among older people as they cannot take official retirement until 67 so they land on welfare or take unemployment benefits(where available).
Anyway they will keep putting the age up every five years due to increasing insolvency of the system until they just give up and declare bankruptcy in toto for the government.
This could occur when the housing bubble bursts and the stock market crashes forcing communities where all the jobs rely on speculative construction or real estate agent jobs to declare bankruptcy and the feds will have to suspend payment to pensioners of their SS benefits as no money is coming in. At the same time medicare and medicaid will stop paying out as well. Essentially soup lines and rationing of care and medicine will have to be set up, funded either privately or by local, state or federal governments or people will form cooperatives to work land and do gardening to stop from starving(maybe gathering medicinal herbs in a coop and training in traditional medicine in exchange for food). Old people without kids will have it a lot harder than those with kids. All those old guys(anyone over 60??) people taking 6-10 different medications/day will be in for an early death from heart trouble or whatever it is they are suffering from because that system will not work anymore. This will reduce the burden on the healthy and young of course considerably(just look at all those 90 year old semi-corpses lying around in the nursing homes brain dead on tubes costing 100,000 or more each year till infinity)
The solution? Stay healthy. Keep debt down. Develop spiritual and family values to reduce stress for when TSHTF. _________________ "The horror, the horror"
Posted: Wed Oct 25, 2006 9:50 am Post subject: Re: Social security
galacticsurfer wrote:
The solution? Stay healthy. Keep debt down. Develop spiritual and family values to reduce stress for when TSHTF.
I agree with this.
Social Security is just part of the general concept that we need not be responsible for our own lives. Most want to be taken care of hence the appeal of this government plan for your old age, the appeal of medical insurance and the idea that those with money should pay for everyone else. If you propose to the majority that they can get something at someone else's expense, then you get plenty of support.
If we were to make medical insurance illegal then the consequences would be that medical costs would drop dramatically. People would be forced to figure out how to stay healthy thru lifestyle changes or they would face the consequences. Medical incomes would fall back in line with what people are willing to pay directly. And people would die when nature commands instead of this excessive attempt to add a few more hours, days or years to an already worn out life.
Without Social Security people would be forced to make their own retirement provisions and would have the money to do so without being taxed all their lives for the pittance Social Security returns. If you compared the benefits of Social Security with the benefits of a private plan with the same cost as Social Security, nobody in his right mind would choose Social Security. For those who do not make adequate plans in a Social Security free world, there would be family, private charity, and the natural consequences of inadequate preparation.
On the issue of fairness of taxes, my view is that everyone should be taxed an equal dollar amount, no matter what his income or wealth. This would automatically force taxes to be set very low so that even the poorest could pay, resulting in very little government (very little loss of freedom). Also, it would eliminate this voting for benefits by the poor at the expense of the successful.
If you want to minimize poverty, then you need to get rid of its source, and that source is slavery, imposed by government for the benefit of the few at the expense of the many. All the government schemes add to poverty.
Posted: Wed Oct 25, 2006 10:13 am Post subject: Re: Social security
We really already are at a point where there are not enough people working to support those retired, and the near term retirement of the baby boomers would have pushed the system to the brink, even in an expanding economy.
Even if the contraction of the economy from peak oil is the least that the pollyannas hope for, it should be sufficient to put Social Security on the critical list. If the post peak economic collapse is more in line with the doomer view, then the collapse of social security will be just one more of the factors in the great dieoff.
At least when the financial rug is pulled from under the aged, it will help to weigh the dieoff in favor of the youthful more able to deal with the new harsh reality.
One thing about the dieoff is that it should take first those least able to survive on their own. This is the criteria of nature, as unpalatable as it may be to those minds conditioned to "saving the poor, downtrodden and weak".
Posted: Sat Apr 21, 2007 12:10 pm Post subject: Isn't social security salvageable?
It semes most financial pundits have been saying for several years now that social security will not be able to meet its commitments several years down the road, for a host of reasons.
I can't see why this has to be. Its possible to establish an oversight board of some type to establish the right level of contributions and the fund proper investment plans to provide the committed payments to retirees.
I worked part time in the UDSA for a couple of years at university, and it owes me money too. I recall back in 1973 getting a pamphlet detailing how payout worked as a ratio of money contributed. Isn't that a legal commitment? If it defaults, it would seem it would create a political minefield and the Congress would face the task of correcting this or getting tossed out of office. I am sure millions of Americans see this as a foundation for their retirement survival. Its not so bad for me, its just going to be beer money. But, I still have a legal entitlement to the money promised me too. If not paid, would it not be considered fraud of some kind?
For sure there are actuaries and accountants who could figure out a rescue plan. We had a crisis in our Canadian equivalent (CPP) back eight or nine years ago, when projections showed that the money flowing in would become less than the emoney flowing out, so corrections were made to the program. Its just applied mathematics when you get down to it. It seems to be in balance now. The ovsight board of CPP does a report to Parliament each year.
Posted: Sat Apr 21, 2007 12:22 pm Post subject: Re: Isn't social security salvageable?
Sure it's salvageable in that the government will probably give beneficiaries the money they're owed. But it's not salvageable in the sense that the beneficiaries will be able to live off the money, because the government is going to inflate like hell to do it.
Be careful what you wish for. You just might get it. _________________ In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule. – Nietzsche
Time makes more converts than reason. – Thomas Paine
History is a set of lies agreed upon. – Napoleon Bonaparte
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Sat Apr 21, 2007 3:13 pm Post subject: Re: Isn't social security salvageable?
Social Security is not an investment vehicle, neither is it an insurance policy. Both of those involve a contract being signed and that's not what happens with social security. Social Security is a government benefit program and that's about it. Like any other government program, it can be canceled at any time. The government is technically not on the hook for anything, ever. You can't sue the federal government.
Sure, politicians generally feel as though they have to answer to voters, but the average citizen is pretty dumb and easily manipulated.
Personally, I think that the post-FDR give away programs are the worst thing that ever happened to America, but that’s just my opinion. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Joined: Sep 25, 2004 Posts: 4534 Location: Boston, MA
Posted: Sat Apr 21, 2007 3:25 pm Post subject: Re: Isn't social security salvageable?
Denny wrote:
Isn't social security indexed to take care of inflation?
Yes it is. It absolutely is.
But do you believe the published inflation numbers?
Let's say the government takes in $10 each from 12 workers to pay out $25 to each of 4 retirees.
That's $120 to pay $100, the rest goes into the "trust fund" aka, spent on other crap.
In the future they will have say, 10 workers and 5 retirees. Based on today's numbers, that's $100 coming in and $150 going out.
Houston, we have a problem. There should be a $50 shortfall, right?
Not if you let me play with the numbers.
Social Security tax revenue increases with inflation.
Let's estimate 5% real inflation and 2.5% government reported inflation.
30 years out...
Each person is paying in $43. $43*10workers=$430 in revenue.
Each person taking money will get $52. $52*5retirees=$260 in expenses.
The surplus actually increases!
But they don't need it to increase, they only need it to stay in the black. So a 4% government reported inflation figure would be enough to compensate for the increase in retirees.
Real inflation, 5%. (and thus tax revenue increases)
Reported inflation (and thus social security payment adjustments), 4%.
Revenue is $430. Expenses are only $405.
Claiming that inflation is only 1% lower than the actual figure allows social security to stay solvent forever.
(at least based on my very rough numbers)
Feel free to take a look at the real projections and factor in a little inflation fraud.
"We have the power to provide that [social security] money. And we are going to do it. It may not be worth anything when the recipient gets it, but he is going to get his benefits paid.” -Senator Proxmire _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Sat Apr 21, 2007 4:29 pm Post subject: Re: Isn't social security salvageable?
Quote:
Personally, I think that the post-FDR give away programs are the worst thing that ever happened to America, but that’s just my opinion.
FDR set the country up for a disaster financially. The de facto destruction of the gold standard and the entitlement put the nails in the coffin. _________________ Only a city man would carry a bag of iron instead of a bag of rice.
-Ling Tan, from the movie Dragon Seed, 1944 (more wisdom from Turner Classic Movies)
Joined: May 18, 2006 Posts: 4333 Location: Minneapolis, MN
Posted: Sat Apr 21, 2007 6:14 pm Post subject: Re: Isn't social security salvageable?
Denny wrote:
It seems most financial pundits have been saying for several years now that social security will not be able to meet its commitments several years down the road, for a host of reasons.
I can't see why this has to be. Its possible to establish an oversight board of some type to establish the right level of contributions and the fund proper investment plans to provide the committed payments to retirees.
I worked part time in the UDSA for a couple of years at university, and it owes me money too. I recall back in 1973 getting a pamphlet detailing how payout worked as a ratio of money contributed. Isn't that a legal commitment? If it defaults, it would seem it would create a political minefield and the Congress would face the task of correcting this or getting tossed out of office. I am sure millions of Americans see this as a foundation for their retirement survival. Its not so bad for me, its just going to be beer money. But, I still have a legal entitlement to the money promised me too. If not paid, would it not be considered fraud of some kind?
For sure there are actuaries and accountants who could figure out a rescue plan. We had a crisis in our Canadian equivalent (CPP) back eight or nine years ago, when projections showed that the money flowing in would become less than the emoney flowing out, so corrections were made to the program. Its just applied mathematics when you get down to it. It seems to be in balance now. The ovsight board of CPP does a report to Parliament each year.
SS will be fine. All that is needed to FIX it is tax all income with FICA, not just the middle class & poor people. I think any income over $92,500 is exempt. Also, SS is an insurance program as in SSDI. It's a GREAT program. I'm not talking out of my ass (hint, hint) as I did research on the topic a few years back. Privatizing it is a bad idea. Ask the UK people on that one.
Publication
Take away SS and MOST retired people could not make ends meet. Also, for many people, it is not taxed (depends on total income) as are pensions and such.
Anyone who say's it's a bad program, either is rich, young & foolish (rich maybe) or plain ass foolish. I know you rich guy's hate it cause poorer people get a much better return. A way better return.
Remember, 2 out of 10 people end up on SSDI. That's a FACT! Without SSDI, private disabiliy insurance would be unafordable. Don't ask me how I know.
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