Thoughts on 'Social Security Reform'

[bobbydj]

Great thread everyone.

[Tim Casey]

There was a good report on Marketplace (NPR) the other night regarding SS privatization. Every other country that has done this with their versions of Social Security have done terribly. One of the worst things is the administrative fees that private for-profit agencies charge your account. Then there's also the ups and downs of the stock market.

A prudent investor would diversify - have a 401/IRA account in stocks and bonds AND a government guaranteed pension. Putting all your eggs in one basket has NEVER been a good idea.

I'd start fixing social security by removing the cap. Once a person earns something like $68,000 in a year (Bill Gates probably earns this by January 2nd), they no longer have to contribute to the system. This should be trashed. Then the payouts should be needs-based. If you don't need it, you shouldn't get any payments.

This would be fiscally unfair to wealthy people, but it would put their society on solid footing. They should be willing to make sure that the neediest people in the society that has given them so much are taken care of in their old age.

(Personally, I think Bush is just trying to pump billions of dollars into Wall Street to make his handling of the economy look better and to feed his blood-thirsty friends....)

[MASSIVE Mastering]

Yeah, it'd be terrible to spur the economy like that...

[foley]

Yes, let's "spur" the economy by dismantling social security. The conservative agenda in a nutshell.

btw - nice job spurring the economy with those tax cuts. I personally have seen quite a benefit from that $300 check I received two years ago - my property taxes are up again!

God Bless the Conservatives! It's all they have going for them.

[bassface]

Foley speaks for me.

Thanks, Foley.

Nice dog btw.

[eeldip]

also, how is letting retired folks live in comfort, rather than in poverty, hurting the economy?

the current privitization plans on the table will cut benefits EVEN INCLUDING private accounts by about 40%.

it will "spur" the economy of the owners of the annuities, and the people they invest in. and it will severly hurt the economy of the 10s of millions of retired folks and the people that depend on their money. like dennys! and makers of topol tooth polish.

those SS checks dont disappear! they go in the private economy. its just that they go the way that the seniors want them to go. by taking that money away from them, and handing it out to the private account managers the govt can reward its friends instead of just spurring the economy by throwing that money in the market.

in other words: private accounts = controlled economy. current SS = free market. well, not entirely true... but still.

[MASSIVE Mastering]

btw - nice job spurring the economy with those tax cuts. I personally have seen quite a benefit from that $300 check I received two years ago - my property taxes are up again!

God Bless the Conservatives! It's all they have going for them.

And this has exactly "what" to do with the Feds?

BTW - My property taxes are going up a little over 60% - THIS YEAR ALONE - thanx to the Democratic leadership of the local govt. and their spendaholism.

[Soulfull]

I would start SS reform with the addition of 2 numbers to those reports they send out telling you what your benefit would be. The first number is how much you and your employer have paid in. The second is the return rate that generates your supposed benefit. I suspect the large size or the first one and the small size of the second one would help a lot of people see what a bad deal SS is for most people.

[apropos of nothing]

BTW - My property taxes are going up a little over 60% - THIS YEAR ALONE - thanx to the Democratic leadership of the local govt. and their spendaholism.

They probably wouldn't have to raise property taxes as much if the state was kickin' down like it usedta. And the state would pr'y still be kickin' down if the fed was kickin down.

But the fed ain't kickin down no more. See we cut federal taxes. So, the money that provides services to you like say schooling for your or your neighbor's kid, street-cleaning and maintenance and the like's gotta come from somewhere.

So where do you propose that be?

[Mr PC]

Well, tax revenues don't always go down (over time) when tax rates get cut. It is not a static economy. Tax cuts have stimulative effects on the economy and can increase revenues. After the Reagan cuts, the economy heated up and revenues increased, but spending went up a lot more.

There was a recession. Revenues go down in recessions, and the tax cuts help us get out of a recession.

PC

[apropos of nothing]

I would start SS reform with the addition of 2 numbers to those reports they send out telling you what your benefit would be. The first number is how much you and your employer have paid in. The second is the return rate that generates your supposed benefit. I suspect the large size or the first one and the small size of the second one would help a lot of people see what a bad deal SS is for most people.

Pfft. What?! A deduction-based savings account with market-rate interest guaranteed is bad investment advice? Remind me to tell my banker.

Its ironic that the republicans have come to power and now we have a massive debt. IIRC, wasn't it the repubs who were supposed to be in favor of fiscal responsibility? Now we're hemmoraging money as a nation. ...After Clinton balanced the budget. The fiscal responsibility line just doesn't line up with reality. Stick your head in the sand all you want.


The important thing to remember is that if the dollar does not crash, it is only because of the good will we've built up in the worldwide financial market over the past sixty years. America has traditionally had a very strong economy and one that has kept foreign markets afloat in times of need.

The reason that we've had that strong economy was because people were making and spending. That spurs consumer spending, and that spurs a strong economy.

In the history of the world, traditionally there have been not three but two classes of people. The very rich and the very poor. Sometimes you'll find a small merchant class, primarily in cities, that are somewhere in between, but a very group of people that were what you'd call middle-class.

So the middle-class that we've been able to have in America over the latter half of the twentieth century is something of a fluke. It doesn't usually happen like this.

So why did it? Very simple: wealth-redistribution. After WWII, the government, in addition to the Marshall plan abroad, gave something of deserved comeuppance to returning soldiers in terms of socialized medicine for vets (another traditional family value I wish the repubs would return to), social security retirement accounts, the GI bill so that citizens could get educated and earn (and spend) and HUD which enfranchised a whole mess of people who would previously have been renters.

And that spurs spending. Wealth redistribution.

So Social Security reform is basically the elites saying well, having a middle class isn't really helpful to us anymore. What we need are more proletariats.


There's a whole corrolary more relating to how this relates to the dwindling supply of fossil resources, but best leave that for another day.

Take it easy,

[apropos of nothing]

Well, tax revenues don't always go down (over time) when tax rates get cut. It is not a static economy. Tax cuts have stimulative effects on the economy and can increase revenues.

In the short term, yes. Over a longer period as a continued trend no. Why? Cuz there's only so far that the economy can expand. So pretty soon you hit a point of diminishing returns. Meantime there's little left to cut.

So again, in a finite universe, where do you propose that money for the commons should come from?

[Mr PC]

That's nonsense. Only a certain amount the economy can grow? It has always been growing. So what is this outer limit on economic growth and how does it work? Once an economy has grown, it is bigger and produces more tax revenue.

How much would the economy grow if income was taxed at 90%? Not so much. It would grow a lot if the rate was 1%, but that would not provide enough money for the government to do it's thing. Somewhere in there is the right balance.

I see it as money being in private hands vs. government hands. I think it is more productive in private hands.

PC

[apropos of nothing]

That's nonsense. Only a certain amount the economy can grow? It has always been growing. So what is this outer limit on economic growth and how does it work? Once an economy has grown, it is bigger and produces more tax revenue.

Its bounded by resources available to it, in terms of workers and raw materials. Since oil is a large part of nearly every production chain (agriculture anyone?) its definitely bounded by the amount of oil available. Its also bounded by rate at which micro-economies (households, businesses) can expand, or cope with an expanding economy. So for example, if I'm not getting health-care and I get sick, it doesn't matter how little tax I'm paying, I'm not going to be able to work, cuz I'm getting sick. If I get sick, that increases the risk of you getting sick.

How much would the economy grow if income was taxed at 90%? Not so much. It would grow a lot if the rate was 1%, but that would not provide enough money for the government to do it's thing. Somewhere in there is the right balance.

Fair enough. The amount that we're taxing now is clearly not enough, even before the war (and subsequent deficit -- financial responsibility -- hello?!) since we're not even able to afford health care for vets or to outfit the soldiers over there.

I see it as money being in private hands vs. government hands. I think it is more productive in private hands.

I don't know about you, but I don't want a gambled retirement. I want a sure retirement. I want a retirement that's grown at market rate. I don't want to run the risk of "oops -- the tech sector (or whatever) is down the week of your cashout, sorry. I guess you'll have to keep working." Okay, I know you're going to say diversified blah blah blah, but no matter how diversified a portfolio, it still doesn't have the guaranteed results of a savings account.

Furthermore, I trust corporations a great deal less than I trust the gummint. Why? Cuz corporations are legally bound to do anything that increases bottom line. If that means lieing to investors, consumers or regulatory agencies, fine, what's it going to cost them? A slap-on-the-wrist fine? Worst-case scenario, the corporation dissolves. Whose screwed? The investors and the stake-holders (being employees and other economic downline). Where's the accountability in that? Okay, say you do the same shit as a government employee. Generally you go to jail. (Although Ronnie and Olly got away with murder literally on the gummint's dime.) Seems like a lot more personal accountability to me.

Enron's overused so I'm not going to cite it, but what about WorldCom? Few bad apples? suuuuuuure.

Say wasn't personal accountability one of the watchwords of this last election? Seems like responsible spendings out, personal responsibility is out. What's left?

Oligarchy. [/i]

[swingdoc]

So the middle-class that we've been able to have in America over the latter half of the twentieth century is something of a fluke. It doesn't usually happen like this.

So why did it? Very simple: wealth-redistribution.

I dunno. I think its because of "opportunity". And I see higher taxation as one of the major risks to limiting individual opportunity and reinforcing class separation.