Social Security Discussion

[RKMBrown]

The economic data says otherwise, but I'm starting to realize that doesn't matter to you. What's your plan for the indigent, disabled, and elderly? Again, for the third time, SS is social insurance, not an investment vehicle.

Social Security and the Evolution of Elderly Poverty



Social Security and Elderly Poverty

All that chart shows is that the elderly are not living in poverty. You assume it's because of SS. My point is that if those "elderly" had been allowed to put their money in their own accounts in safe investments they would not only not be in poverty, but rather they would be quite well off, as in having 5times more income coming in than under SS.

But I understand if basic math escapes you.

Well...maybe if you read the study I linked to, you'd have a better idea of how the study was conducted.

Here's a non-technical summary:

Elderly poverty in the U.S. decreased dramatically during the twentieth century. Between 1960 and 1995, the official poverty rate of those aged 65 and above fell from 35 percent to 10 percent, and research has documented similarly steep declines dating back to at least 1939. While poverty was once far more prevalent among the elderly than among other age groups, today's elderly have a poverty rate similar to that of working-age adults and much lower than that of children.

Social Security is often mentioned as a likely contributor to the decline in elderly poverty. Enacted in 1935, the Social Security system experienced rapid benefit growth in the post-WWII era. In fact, there is a striking association between the rise in Social Security expenditures per capita and the decline in elderly poverty, as Figure 1 illustrates (with both series scaled to fit on the same figure).

This association is investigated further by researchers Gary Engelhardt and Jonathan Gruber in Social Security and the Evolution of Elderly Poverty, (NBER Working Paper 10466). Using data from the 1968 through 2001 March Current Population Surveys, the authors first examine aggregate trends in elderly poverty then conduct a statistical analysis to assess the role of Social Security in driving the decline in elderly poverty.

The authors draw several interesting conclusions from their analysis of aggregate trends. First, when poverty is measured relative to median non-elderly income rather than relative to the official poverty line, the decline in elderly poverty ended in the early 1980s. Income inequality has increased markedly since then among the elderly and non-elderly alike. Second, poverty rates are strongly cyclical - rising during recessions and falling during economic expansions - for the non-elderly but not for the elderly, highlighting the protective effect of Social Security. Third, decreases in elderly poverty over time have been similar across age groups but larger for married couples than for other groups.

As the authors note, assessing the causal effect of Social Security on poverty is difficult. For example, individuals may work and save more when benefits are less generous, so a simple calculation of the increase in poverty that would result from eliminating Social Security income would likely overstate the true effect by ignoring these behavioral responses.

To avoid this problem, the authors construct a measure of Social Security benefits that depends only on the Social Security rules that apply to each birth cohort and not on workers' actual labor market experience. They examine the relationship between this measure and poverty rates for people born between 1880 and 1935. For some of the analysis, the authors focus on a narrower range of birth cohorts, making use of the sharp drop in benefits experienced by the "notch" cohorts of 1917-1921.

The authors estimate that a $1,000 increase in Social Security benefits is associated with a 2 to 3 percentage point reduction in poverty rates for elderly households. They also find no statistically significant effect of benefits on income inequality, suggesting that higher-income and lower-income elderly benefit similarly from increases in Social Security.

Applying this estimate to the change in Social Security benefits between 1967 and 2000 suggests that the increase in benefits can explain all of the 17 percentage point decline in poverty that occurred during this period. The authors also find that higher benefits lead some elderly to live independently rather than with family members, and conclude that the effect of Social Security on poverty would have been even more dramatic in the absence of these changes in living arrangements.

My point is that if those "elderly" had been allowed to put their money in their own accounts in safe investments they would not only not be in poverty, but rather they would be quite well off, as in having 5times more income coming in than under SS.

SS isn't an investment. Secondly, what is it with your obsession with privatization? It's like you want to give Wall Street another subsidy, thus creating another moral hazard. Hey, I guess they deserve an additional 300 billion in fees and commissions courtesy of Uncle Sam. They've committed massive amounts of fraud already, so fuck it, let's give it ALL to them. We can go back the the 19th century when America was America! We can reopen poor houses, debtor's prison, have a real feudal system. This.will.be.awesome.

Lastly, the elderly would have had 60% of their retirement portfolio wiped out if SS would have been privatized back in 2008. If SS is privatized, Wall Street will love it, because the federal government would have to them bail them out when losses start accrue with these privatized accounts.

Do you understand the purpose of public policy?

Hello, McFly, You example is stupid, and shows your ignorance. Hello anyone in there?

The stock market rebounded and is actually higher now than it was before the crash in 08. Thus, even those who choose to earn more than safe interest rates of return by investing in the us stock market, would have made back all they lost and then some.

Further, 401ks are not exclusively invested in the us stock market. For example, one can choose to invest in t-bills, commodities, real-estate markets, international stock, or whatever you like. It's your money you invest as you will. It's called liberty.

In the case of SS the purpose of the public policy is to make slaves of our children to the tune of 15% of their income (soon to be increased again). It's a ponzi that also includes elements of socialism. It's the worst possible type of retirement plan.

Further, the so called "associations" referenced are not associations at all. They are suppositions written to defend the crime being subjected on the public.

 

[RKMBrown]

Bull shit, parasite. You can't "remove" someone from poverty by stealing 600k dollars from them over 40years (never accruing interest) and giving them 2400 a month back after they are 65

The person being removed from poverty by social security won't have made nearly enough money to have put in 600k.

Yeah? So why have a SS system in which some people get screwed over royally and others benefit madly? Why stop at SS? Why not just set one pay rate for all workers and redistribute according? Or is that the long term plan? Expand, expand, expand, till liberty is dead?

 

[Kimura]

Hello, McFly, You example is stupid, and shows your ignorance. Hello anyone in there?

Yeah, I meant 300 billion over the course of 10-12 years. The commissions are closer to 27 billion per year.

The stock market rebounded and is actually higher now than it was before the crash in 08. Thus, even those who choose to earn more than safe interest rates of return by investing in the us stock market, would have made back all they lost and then some.

Further, 401ks are not exclusively invested in the us stock market. For example, one can choose to invest in t-bills, commodities, real-estate markets, international stock, or whatever you like. It's your money you invest as you will. It's called liberty.

Talk about a fallacy of composition.

You’re looking at the micro level as opposed to the macro level which includes the entire US population.

In order for you to understand the macro picture, you need to comprehend that SS is the same as purchasing US government bonds.

With our current SS program, you give the government your dollars now, and it will give you back those dollars down the road. This is the EXACT SAME thing which occurs if you or I purchase a government bonds (or stick our $$$$ in a savings account). We give the government our dollars now for dollars later and some interest.

Sure, one might be a superior investment and give us a better return, but with exception of the rate of return, they’re basically the same. Congratulations, you’re now ahead of 99% of Congress!

Just to clarify, under your SS privatization proposal, the government would decrease SS payments and employees would invest that money in the stock market. Is this correct?

n the case of SS the purpose of the public policy is to make slaves of our children to the tune of 15% of their income (soon to be increased again). It's a ponzi that also includes elements of socialism. It's the worst possible type of retirement plan.

Where do you get this from? How can SS prevent our kids from working to produce real goods and services? SS actually creates spending power in the economy. Secondly, SS isn't a ponzi scheme, that's a nutty talking point for reactionaries.

Further, the so called "associations" referenced are not associations at all. They are suppositions written to defend the crime being subjected on the public.

You didn't read the paper, but that's okay.

 

[Foxfyre]

Hello, McFly, You example is stupid, and shows your ignorance. Hello anyone in there?

Yeah, I meant 300 billion over the course of 10-12 years. The commissions are closer to 27 billion per year.

The stock market rebounded and is actually higher now than it was before the crash in 08. Thus, even those who choose to earn more than safe interest rates of return by investing in the us stock market, would have made back all they lost and then some.

Further, 401ks are not exclusively invested in the us stock market. For example, one can choose to invest in t-bills, commodities, real-estate markets, international stock, or whatever you like. It's your money you invest as you will. It's called liberty.

Talk about a fallacy of composition.

You’re looking at the micro level as opposed to the macro level which includes the entire US population.

In order for you to understand the macro picture, you need to comprehend that SS is the same as purchasing US government bonds.

With our current SS program, you give the government your dollars now, and it will give you back those dollars down the road. This is the EXACT SAME thing which occurs if you or I purchase a government bonds (or stick our $$$$ in a savings account). We give the government our dollars now for dollars later and some interest.

Sure, one might be a superior investment and give us a better return, but with exception of the rate of return, they’re basically the same. Congratulations, you’re now ahead of 99% of Congress!

Just to clarify, under your SS privatization proposal, the government would decrease SS payments and employees would invest that money in the stock market. Is this correct?

n the case of SS the purpose of the public policy is to make slaves of our children to the tune of 15% of their income (soon to be increased again). It's a ponzi that also includes elements of socialism. It's the worst possible type of retirement plan.

Where do you get this from? How can SS prevent our kids from working to produce real goods and services? SS actually creates spending power in the economy. Secondly, SS isn't a ponzi scheme, that's a nutty talking point for reactionaries.

Further, the so called "associations" referenced are not associations at all. They are suppositions written to defend the crime being subjected on the public.

You didn't read the paper, but that's okay.

SS is the same as purchasing U.S. government bonds? Really?

When I buy bonds I own them. I can look them up in my account and see what the balance is. And the government pays me interest on them every year so their value increases--maybe not always at the rate of inflation, but I will see a dollar gain year after year. If I need cash for an emergency or special purchase, I can cash them in at will. If I die before I cash them in, they become part of my estate and pass to my spouse or my children or anybody I so designate. And there are no tax consequences whether I keep them or spend them no matter how much additional income I earn.

The amounts I pay in Social security taxes however are never mine. It is a fixed amount confiscated from my paycheck or business profits on the promise of the government that they will pay me so much each month once I reach a certain age. I have to apply and qualify for it when I reach that age and I am limited to a fixed amount that provides a bare subsistnce every month. If I supplement it too much with other money they will tax me on my Social Security income again even though I already paid income taxes on it once. I can't draw extra in case of emergency or for other purposes. If I die before I collect it, it all goes to the government and my spouse, children, or other loved ones are likely entitled to no part of it. And the scary part? Social security was created with a simple majority vote of Congress and they could end it today with another simple majority vote. We get Social Security only if government sees fit to keep paying it out

 

[Kimura]

SS is the same as purchasing U.S. government bonds? Really?

Yup.

When I buy bonds I own them. I can look them up in my account and see what the balance is. And the government pays me interest on them every year so their value increases--maybe not always at the rate of inflation, but I will see a dollar gain year after year. If I need cash for an emergency or special purchase, I can cash them in at will. If I die before I cash them in, they become part of my estate and pass to my spouse or my children or anybody I so designate. And there are no tax consequences whether I keep them or spend them no matter how much additional income I earn.

US Treasuries function the same way as savings accounts. They're nothing more than dollar deposits at the FED.

The amounts I pay in Social security taxes however are never mine. It is a fixed amount confiscated from my paycheck or business profits on the promise of the government that they will pay me so much each month once I reach a certain age. I have to apply and qualify for it when I reach that age and I am limited to a fixed amount that provides a bare subsistnce every month. If I supplement it too much with other money they will tax me on my Social Security income again even though I already paid income taxes on it once. I can't draw extra in case of emergency or for other purposes. If I die before I collect it, it all goes to the government and my spouse, children, or other loved ones are likely entitled to no part of it. And the scary part? Social security was created with a simple majority vote of Congress and they could end it today with another simple majority vote. We get Social Security only if government sees fit to keep paying it out

Yeah, I definitely think we should increase SS payments. I also think the SS tax is regressive and should be 86'd, funding it out of the general revenue.

I'd like to get into some of the issues, mostly macro, that are inherent with privatization, which none of the CATO morons ever mention.

 

[Toro]

...people generally don't save enough...

One person's anecdotes are nice but they're a poor basis for public policy. The total private net worth of all American citizens is $74,820,940,000,000 (from here) so dividing that equally by 313,914,040 (from here) tells us that America's average personal net worth is $238,348.50.

This is where the extreme left will argue that America suffers from an inordinate inequality of wealth and that most Americans are are too incompetent to care for themselves. Thus, the masses must be made wards of the state and supported by funds confiscated from the excessively rich.

While this line of thinking seems very popular these days, historically it's a recipe for disaster.

Bumper sticker slogans aside, there have been numerous studies over the years concluding that Americans simply don't save enough for retirement.

Account ownership rates are closely correlated with income and wealth. More than 38 million working-age households (45 percent) do not own any retirement account assets, whether in an employer-sponsored 401(k) type plan or an IRA. Households that do own retirement accounts have significantly higher income and wealth—more than double the income and five times the non-retirement assets—than households that do not own a retirement account.

The average working household has virtually no retirement savings. When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. Two-thirds of working households age 55-64 with at least one earner have retirement savings less than one times their annual income, which is far below what they will need to maintain their standard of living in retirement.

The collective retirement savings gap among working households age 25-64 ranges from $6.8 to $14 trillion, depending on the financial measure. A large majority of households fall short of conservative retirement savings targets for their age and income based on working until age 67. Based on retirement account assets, 92 percent of working households do not meet targets. Under broader measures, most households still have insufficient assets: 90 percent fall short based on retirement account balances and estimated DB pension assets combined, 84 percent fall short based on total financial assets, and 65 percent fall short based on net worth.

National Institute on Retirement - The Retirement Savings Crisis: Is It Worse Than We Think?

 

[RKMBrown]

Just to clarify, under your SS privatization proposal, the government would decrease SS payments and employees would invest that money in the stock market. Is this correct?

You said SS privatization proposal not me.

However, I do have ideas:

My long term solution to fix this system would be to:
A) Let entering youth opt out just as Priests & the Amish & some Federal workers are allowed to opt out today. This makes SS voluntary just as it already is for some people.
B) For anyone who has paid a dime into SS, offer them a cash buyout pro-rated by what they put in and adjusted for inflation. Anyone not taking the cash buyout continues to receive monthly checks per the old system. Paying for the cash buyouts would be done by printing cash at the Fed, selling US land assets and such. Paying for the people who don't take the buyout would be by the people who stay on with the SS system.
C) Provide a requirement for some amount of the citizen's 401k assets to remain in "safe" investments up to and until they show they have enough in 401k safe assets to remit in retirement the current amount of the Max SS/medicare checks.

How can SS prevent our kids from working to produce real goods and services?

15% of income is 15% of their labor, period. 100% of their labor is the typical tax rate of a slaver. Should we thank our government for only enslaving us for 15% of our time?

SS isn't a ponzi scheme, that's a nutty talking point for reactionaries.

By every single measure, it is a ponzi. A legal ponzi, but a ponzi nonetheless. Calling reality a nutty talking point for reactionaries, is a typical socialist tool taught in Rules for Radicals. You can do better.

 

[flacaltenn]

Yet another thread supporting the massive fraud and theft of the SS surplus..
No transferable bonds were ever bought to replace the $Trill+ theft of the surplus.
And there is NOTHING OF VALUE in the SS Trust Fund. Nothing but promises to issue FUTURE DEBT in the event of SS Deficits. Deficits that have been occuring since 2010 --- SIX YEARS ahead of projections made as late as 2009..

Don't take my word for it.. Get it from the horse's mouth. At the back of every SSA Trustee is this or a similiar disclaimer..

http://www.socialsecurity.gov/history/pdf/tr09summary.pdf

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.
<<FLACALTENN -- they BLEW this projection. SS went into deficit in 2010 thanks to Obama robbing the FICA tax premiums and has REMAINED in deficit since >>

The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

Don't believe the SSA TRUSTEES??? Let's get the same story from the CBO..

CBO | Federal Debt and Interest Costs

Gross debt, which comprises federal debt held by the public plus Treasury securities held by federal trust funds and other government accounts, is sometimes used to evaluate the government's overall fiscal situation. At the end of 2010, gross federal debt totaled $13.5 trillion--the $9.0 trillion in debt held by the public plus $4.5 trillion in debt held by government accounts. More than half of the latter amount is held by the Social Security trust funds. Because those trust funds and other government accounts are part of the federal government, transactions between them and the Treasury are intragovernmental; that is, the government securities in those funds are an asset to the individual programs but a liability to the rest of the government. The resources needed to redeem the government securities in the trust funds and other accounts in some future year must be generated from taxes, income from other government sources, or borrowing by the government in that year.

Nothing of value.. When Treasury gets a redemption request from SSA as they are YEARLY NOW ---- NEW DEBT IS ISSUED to cover the liability..

Which means that you tools had your pockets fleeced thruout the 80's and 90's, got nothing in return for value to SSecurity Trust and NOW --- CURRENT TAXPAYERS are on the hook for paying BOTH PRINCIPLE and INTEREST on the theft..

Pretty neat scam eh? YOU ---- will get to pay MORE THAN TWICE for every SS dollar REDEEMED from the "trust fund"...

How much additional debt on the Treasury Books is this "redemption" costing?

Trustees Report Summary

Neither Medicare nor Social Security can sustain projected long-run programs in full under currently scheduled financing, and legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers. If lawmakers take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.

Social Security&#8217;s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012. The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers

It is unconciousable to aid in this deception and larceny. But yet --- plenty of leftists are out there doing just that. Because they think we are stupid enough to believe that SS is "just fine".. Might as well be driving the getaway car....

 

[flacaltenn]

Had SSA actually RETRIEVE already issued bonds on the open market exchange to put in the Trust Fund File Cabinet --- THAT would have been "an investment". Because it would have taken LIABILITIES to the Treasury OFF the books and transferred value to us as owners of those bonds. But no money ever came OFF the books of the Treasury. The first time any value was transferred to the owners of the SS Trust is TODAY --- when Treasury FINALLY has to REFINANCE those IOUs that sat in the Trust Fund.

Ponzi Scheme? Maybe -- But for certain it's Grand Theft Larceny AND a cover-up.

 

[Rshermr]

Bull shit, parasite. You can't "remove" someone from poverty by stealing 600k dollars from them over 40years (never accruing interest) and giving them 2400 a month back after they are 65

The person being removed from poverty by social security won't have made nearly enough money to have put in 600k.

Yeah? So why have a SS system in which some people get screwed over royally and others benefit madly? Why stop at SS? Why not just set one pay rate for all workers and redistribute according? Or is that the long term plan? Expand, expand, expand, till liberty is dead?

Did you answer yourself. Is there indeed anyone in there??? Jesus, you are a tool. Have you noticed no one is talking to you??? Your opinion was known before you typed a response. And all know you are a congenital idiot by now. Good for you. We realize you are incapable of independent thought. And we all know you want to privatize ss, but can not get a politician to go along with you. You think ss is an investment program, which it never was. And think that it would be fine if people had their securities devalued when they went to retire in 2008. Because, of course, they could wait four or five years for their investments to regain their value. Excuse me while we all chuckle at you. Your agenda is obvious, as always, but it changes nothing. Because you will loose your little ss battle, because people do not agree with you. And if they read your drivel, they understand your agenda. And the more they see of your drivel, the more you look like what you are. A congenital idiot. Which, of course, is not your fault. I am sure it was inherited from your parents.

 

[flacaltenn]

The person being removed from poverty by social security won't have made nearly enough money to have put in 600k.

Yeah? So why have a SS system in which some people get screwed over royally and others benefit madly? Why stop at SS? Why not just set one pay rate for all workers and redistribute according? Or is that the long term plan? Expand, expand, expand, till liberty is dead?

Did you answer yourself. Is there indeed anyone in there??? Jesus, you are a tool. Have you noticed no one is talking to you??? Your opinion was known before you typed a response. And all know you are a congenital idiot by now. Good for you. We realize you are incapable of independent thought. And we all know you want to privatize ss, but can not get a politician to go along with you. You think ss is an investment program, which it never was. And think that it would be fine if people had their securities devalued when they went to retire in 2008. Because, of course, they could wait four or five years for their investments to regain their value. Excuse me while we all chuckle at you. Your agenda is obvious, as always, but it changes nothing. Because you will loose your little ss battle, because people do not agree with you. And if they read your drivel, they understand your agenda. And the more they see of your drivel, the more you look like what you are. A congenital idiot. Which, of course, is not your fault. I am sure it was inherited from your parents.

You didn't even BEGIN to address his questions Rshermr. Why is it that a UNIVERSAL PROGRAM that was supposed to benefit ALL WORKERS approximately equally --- has now been turned into a (largely) vehicle to redistribute the SS cash flow. The benefits to folks at the high end salary caps are not THAT much more than the benefits to lower wage workers, YET --- the high end are paying up to SIX TIMES what the lower end is paying.

I'd BE SHOCKED --- if we got an intelligient response.

 

[Trajan]

Yeah? So why have a SS system in which some people get screwed over royally and others benefit madly? Why stop at SS? Why not just set one pay rate for all workers and redistribute according? Or is that the long term plan? Expand, expand, expand, till liberty is dead?

Did you answer yourself. Is there indeed anyone in there??? Jesus, you are a tool. Have you noticed no one is talking to you??? Your opinion was known before you typed a response. And all know you are a congenital idiot by now. Good for you. We realize you are incapable of independent thought. And we all know you want to privatize ss, but can not get a politician to go along with you. You think ss is an investment program, which it never was. And think that it would be fine if people had their securities devalued when they went to retire in 2008. Because, of course, they could wait four or five years for their investments to regain their value. Excuse me while we all chuckle at you. Your agenda is obvious, as always, but it changes nothing. Because you will loose your little ss battle, because people do not agree with you. And if they read your drivel, they understand your agenda. And the more they see of your drivel, the more you look like what you are. A congenital idiot. Which, of course, is not your fault. I am sure it was inherited from your parents.

You didn't even BEGIN to address his questions Rshermr. Why is it that a UNIVERSAL PROGRAM that was supposed to benefit ALL WORKERS approximately equally --- has now been turned into a (largely) vehicle to redistribute the SS cash flow. The benefits to folks at the high end salary caps are not THAT much more than the benefits to lower wage workers, YET --- the high end are paying up to SIX TIMES what the lower end is paying.

I'd BE SHOCKED --- if we got an intelligient response.

I understand where you are coming from.

I post this as a topical matter......make of it what you wil;



Here are the annual Social Security benefits (in 2012 dollars) for some people who retired at 65 in 2010, based on different working life scenarios:

Single male, average wage: $17,900
Single female, average wage: $17,900
One-income couple, average wage: $26,900
Two-income couple, average wage/low wage: $31,000
Two-income couple, both average wage: $35,800
Two-income couple, high wage/average wage: $45,000
Source: Urban Institute

I see a conundrum I will struggle to define; it appears to me that as a high end earner, married between my wife and I we will collect the high end payments, 45K, that sounds right looking at the bi yearly SSA benefits brief they send out, my wife and I will max out at 45K.

The better off generally live longer than those not so better off, there is a link between health, well being and income levels etc. If my wife and I outlive the avg. and cash out at 65 and die at 85, we will collect approx. 900K.


Now,I am left to try and quantify how much we have put in over say 45 years ( the number will be combined as is the collection- 45K).

I will work on that and be back with an estimate.

But a Q- how do I handle the interest? if SSI is supposed accrue 1.5 or 2% , am I entitled to that for accounting purposes? a part of it? none of it?

 

[Toddsterpatriot]

You're funny.

Treasuries are nothing more than dollar deposits at the FED.

Yes, fraud on the part of borrowers, fraud on the part of lenders.
Problems worsened by government policy.

Did you even bother reading the reports I posted by the FED and others? The facts say otherwise, amigo.

The majority of lenders peddled the most expensive loans to first-time home buyers. These loans were referred to as 'affordability products' which generated massive commissions and were purposely designed for financing down the road. This also entailed more fees for douche bag lenders. These loans were designed to fail from the very beginning.



Nobody wants the government to babysit you. We're talking about a highly successful program which has reduced poverty rates among the elderly. SS was part of FDR's economic bill of rights. I don't understand this pathological hatred for successful programs like Medicare and SS. Every other OECD country has similar programs.




How does it make it worse?




No, it wouldn't, all it would do is create a moral hazard, which Wall Street excels at.

Increasing payments as the system is today, only digs a bigger hole.

No, it doesn't create a hole. Again, the only problem would be a real crisis where we couldn't produce the real goods and services that are required by retirees, such as food, shelter, clothing, medical technology, etc.

The government can always cut SS checks. The only problem would be that of inflation, but it's almost impossible to generate a sufficient inflation, so long as there's an increase in real goods and services.

Yup, just steal more from the kids and grandkids.

Another conservative/libertarian/Peter Schiff/Kyle Bass/crazy internet meme. I love logical fallacies.

In economics, no such concept exists, where we have to sacrifice our output for some date in the past. Our children and grandchildren can't and won't pay us back a dime even if they desired to do so.

There isn't a burden for our children and grandchildren since they'll be able to work and consume the real goods and services they produce. Government spending from years past cannot prevent them from producing real goods and services.

Treasuries are nothing more than dollar deposits at the FED.

Treasuries are how the Treasury borrows dollars. Despite your misunderstanding.

The facts say otherwise, amigo.

Borrowers never misrepresented their income or assets? Okayyyyyyyyy.

We're talking about a highly successful program which has reduced poverty rates among the elderly.

Today, we can do better, without giving 12.4% of our lifetime income to government, in exchange for low returns.

I don't understand this pathological hatred for successful programs like Medicare and SS.

Medicare! The program that is really bankrupting the country.

How does it make it worse?

Making it more expensive while reducing the taxes that pay for it would make it better in your mind?

No, it wouldn't

I'd have at least double the retirement income if I could invest it myself.
And a huge pile of money to pass on to my heirs. Your fears don't change those facts.

No, it doesn't create a hole.

Yes, increasing the payments makes the hole bigger.

Our children and grandchildren can't and won't pay us back a dime even if they desired to do so.

Increasing their taxes in 2030 to pay my benefits in 2030 isn't stealing from them? Wow!

 

[Foxfyre]

I could be wrong on the exact numbers, but I recall reading a study many years ago that with SS, 10% of seniors live in poverty. Without it, that number would rise to 40%.

I have read similiar opinions. But all those opinions assumed that everything else would stay the same. It wouldn't. Millions of people take advantage of tax deffered IRAs, 401Ks, and other savings/investment vehicles and other attractive savings plans when these are made available to them. Had I put all that social security money into such private, tax deferred investments when I first started paying social security, I would have been able to retire on a very comfortable income.

Yes there will always be the irresponsible who won't do it and who will end up penniless in their old age but those who would have no family or friend to move in with would likely be in very small numbers. And we as a society can decide what we will do about those. But I suspect, if we could change the cultural expectations of what decent, honorable, responsible people do, the poor would be in a distinct minority and we would have a tiny percentage of folks dependent on government.

I beg to differ.

I started my career as a stockbroker, and I was shocked at how little people of means saved. These weren't dumb people, either. They were usually educated people who made good income and lived in nice houses. (Poor people don't talk to stockbrokers.)

Even today, despite SS, people generally don't save enough based on their expected level of future income. If people truly had the will to save, they would live in smaller houses, drive older cars, and spend less generally. And the incremental amounts aren't much. Even saving an additional 2-3% each paycheck can make a world of difference. But they don't because they aspire to a standard of living today. Most can't conceptualize 20-30 years from now. If people have a hard time saving an incremental 3% under today's scheme, they sure as heck aren't going to save their 6% in FICA taxes plus the necessary incremental 3% on top of that. Instead, they'll save a part of the 6% and spend part, driving themselves further in the hole.

But you are looking at it through the prism of the entitlement generation. The generation that has been conditioned and trained, by its own government, to NOT look to themselves for their own security. I am looking at it through the eyes of those as they were before the entitlement motif was thrust upon us.

 

[flacaltenn]

Did you answer yourself. Is there indeed anyone in there??? Jesus, you are a tool. Have you noticed no one is talking to you??? Your opinion was known before you typed a response. And all know you are a congenital idiot by now. Good for you. We realize you are incapable of independent thought. And we all know you want to privatize ss, but can not get a politician to go along with you. You think ss is an investment program, which it never was. And think that it would be fine if people had their securities devalued when they went to retire in 2008. Because, of course, they could wait four or five years for their investments to regain their value. Excuse me while we all chuckle at you. Your agenda is obvious, as always, but it changes nothing. Because you will loose your little ss battle, because people do not agree with you. And if they read your drivel, they understand your agenda. And the more they see of your drivel, the more you look like what you are. A congenital idiot. Which, of course, is not your fault. I am sure it was inherited from your parents.

You didn't even BEGIN to address his questions Rshermr. Why is it that a UNIVERSAL PROGRAM that was supposed to benefit ALL WORKERS approximately equally --- has now been turned into a (largely) vehicle to redistribute the SS cash flow. The benefits to folks at the high end salary caps are not THAT much more than the benefits to lower wage workers, YET --- the high end are paying up to SIX TIMES what the lower end is paying.

I'd BE SHOCKED --- if we got an intelligient response.

I understand where you are coming from.

I post this as a topical matter......make of it what you wil;



Here are the annual Social Security benefits (in 2012 dollars) for some people who retired at 65 in 2010, based on different working life scenarios:

Single male, average wage: $17,900
Single female, average wage: $17,900
One-income couple, average wage: $26,900
Two-income couple, average wage/low wage: $31,000
Two-income couple, both average wage: $35,800
Two-income couple, high wage/average wage: $45,000
Source: Urban Institute

I see a conundrum I will struggle to define; it appears to me that as a high end earner, married between my wife and I we will collect the high end payments, 45K, that sounds right looking at the bi yearly SSA benefits brief they send out, my wife and I will max out at 45K.

The better off generally live longer than those not so better off, there is a link between health, well being and income levels etc. If my wife and I outlive the avg. and cash out at 65 and die at 85, we will collect approx. 900K.


Now,I am left to try and quantify how much we have put in over say 45 years ( the number will be combined as is the collection- 45K).

I will work on that and be back with an estimate.

But a Q- how do I handle the interest? if SSI is supposed accrue 1.5 or 2% , am I entitled to that for accounting purposes? a part of it? none of it?

The diff in payouts is slightly higher than I thought. But still dont make up for the 6 to1 diff in payments. And as you do your calculation realize that half your employer contributed is somehow factored in. And try to imagine how couples like us who have been self employed for 20 years have the honor of paying the FULL fica rate every year. Really changes the calculation of roi dont it?

 

[Toro]

I have read similiar opinions. But all those opinions assumed that everything else would stay the same. It wouldn't. Millions of people take advantage of tax deffered IRAs, 401Ks, and other savings/investment vehicles and other attractive savings plans when these are made available to them. Had I put all that social security money into such private, tax deferred investments when I first started paying social security, I would have been able to retire on a very comfortable income.

Yes there will always be the irresponsible who won't do it and who will end up penniless in their old age but those who would have no family or friend to move in with would likely be in very small numbers. And we as a society can decide what we will do about those. But I suspect, if we could change the cultural expectations of what decent, honorable, responsible people do, the poor would be in a distinct minority and we would have a tiny percentage of folks dependent on government.

I beg to differ.

I started my career as a stockbroker, and I was shocked at how little people of means saved. These weren't dumb people, either. They were usually educated people who made good income and lived in nice houses. (Poor people don't talk to stockbrokers.)

Even today, despite SS, people generally don't save enough based on their expected level of future income. If people truly had the will to save, they would live in smaller houses, drive older cars, and spend less generally. And the incremental amounts aren't much. Even saving an additional 2-3% each paycheck can make a world of difference. But they don't because they aspire to a standard of living today. Most can't conceptualize 20-30 years from now. If people have a hard time saving an incremental 3% under today's scheme, they sure as heck aren't going to save their 6% in FICA taxes plus the necessary incremental 3% on top of that. Instead, they'll save a part of the 6% and spend part, driving themselves further in the hole.

But you are looking at it through the prism of the entitlement generation. The generation that has been conditioned and trained, by its own government, to NOT look to themselves for their own security. I am looking at it through the eyes of those as they were before the entitlement motif was thrust upon us.

Prior to the "Entitlement Generation," people still didn't save enough. That's why SS was created in the first place. People often worked until they died.

The logic that people would save enough for retirement without SS is flawed. Even with SS, people still don't save enough. If SS provides 60% of what people need, and people need X to live on retirement, people would know that they have to save 0.4X to retire under SS. Why would anyone believe that people would save 1.0X if people can't save 0.4X? 0.4X is easier to save than 1.0X. In fact, people would most likely save less than 0.6X that they receive from SS.

 

[oldfart]

Here are the annual Social Security benefits (in 2012 dollars) for some people who retired at 65 in 2010, based on different working life scenarios:

Single male, average wage: $17,900
Single female, average wage: $17,900
One-income couple, average wage: $26,900
Two-income couple, average wage/low wage: $31,000
Two-income couple, both average wage: $35,800
Two-income couple, high wage/average wage: $45,000
Source: Urban Institute

I see a conundrum I will struggle to define; it appears to me that as a high end earner, married between my wife and I we will collect the high end payments, 45K, that sounds right looking at the bi yearly SSA benefits brief they send out, my wife and I will max out at 45K.

The better off generally live longer than those not so better off, there is a link between health, well being and income levels etc. If my wife and I outlive the avg. and cash out at 65 and die at 85, we will collect approx. 900K.


Now,I am left to try and quantify how much we have put in over say 45 years ( the number will be combined as is the collection- 45K).

I will work on that and be back with an estimate.

But a Q- how do I handle the interest? if SSI is supposed accrue 1.5 or 2% , am I entitled to that for accounting purposes? a part of it? none of it?

Save yourself a lot of trouble; go to The United States Social Security Administration and you can get a transcript online of your earnings record including how much to the penny you have paid in. Understanding the benefit formula is the hard part. I think I discussed the cost-of-living multiples and the inflection points in the formula upthread, but if anyone needs it, I can repost.

Jamie

 

[Toddsterpatriot]

...people generally don't save enough...

One person's anecdotes are nice but they're a poor basis for public policy. The total private net worth of all American citizens is $74,820,940,000,000 (from here) so dividing that equally by 313,914,040 (from here) tells us that America's average personal net worth is $238,348.50.

Median household net worth is a far more useful measure.

From Wealth and Asset Ownership - People and Households - U.S. Census Bureau as of 2011:

Median household net worth: $68,828
Excluding equity in own home: $16,942


According to Haven't saved enough for retirement? What to do?

For people 10 years away from retirement, the median savings is $12,000. "Of the people between 55 and 64, one third haven't saved anything for retirement," Oakley says.

Clearly there is a bit more supporting the case that people don't save a lot than Toro's anecdotal experience.

Poverty rate 15%, median income $51,017 - Sep. 17, 2013

The above link says median household income in 2012 was $51,017.
12.4% of that is $6326.
In a private account, 3 years of contributions would better than double median, non-home equity, net worth. Now imagine 40 years of those contributions, in a private account, accruing interest, reinvested dividends and capital gains.

My first 401K contributions were put into the stock market when the Dow was below 2000.
My 401K, with less than 12.4% of my lifetime income invested will provide between 2 and 3times my Social Security check. And a huge chunk of principal to pass along to my heirs.
And it's not dependent on future politicians taxing future generations, like Social Security will be.

Keep the contributions mandatory, make the accounts privately held.

 

[Toddsterpatriot]

SS is the same as purchasing U.S. government bonds? Really?

Yup.

When I buy bonds I own them. I can look them up in my account and see what the balance is. And the government pays me interest on them every year so their value increases--maybe not always at the rate of inflation, but I will see a dollar gain year after year. If I need cash for an emergency or special purchase, I can cash them in at will. If I die before I cash them in, they become part of my estate and pass to my spouse or my children or anybody I so designate. And there are no tax consequences whether I keep them or spend them no matter how much additional income I earn.

US Treasuries function the same way as savings accounts. They're nothing more than dollar deposits at the FED.

The amounts I pay in Social security taxes however are never mine. It is a fixed amount confiscated from my paycheck or business profits on the promise of the government that they will pay me so much each month once I reach a certain age. I have to apply and qualify for it when I reach that age and I am limited to a fixed amount that provides a bare subsistnce every month. If I supplement it too much with other money they will tax me on my Social Security income again even though I already paid income taxes on it once. I can't draw extra in case of emergency or for other purposes. If I die before I collect it, it all goes to the government and my spouse, children, or other loved ones are likely entitled to no part of it. And the scary part? Social security was created with a simple majority vote of Congress and they could end it today with another simple majority vote. We get Social Security only if government sees fit to keep paying it out

Yeah, I definitely think we should increase SS payments. I also think the SS tax is regressive and should be 86'd, funding it out of the general revenue.

I'd like to get into some of the issues, mostly macro, that are inherent with privatization, which none of the CATO morons ever mention.

US Treasuries function the same way as savings accounts. They're nothing more than dollar deposits at the FED.

You are mistaken. When I buy a Treasury, the Treasury owes me interest, not the Fed.
My "deposit" is not loaned out by the Fed, like a bank deposit would be lent, it is spent by the Treasury.

 

[alan1]

I lost a chunk of my retirement investment with the Bush crash. If SS were invested on Wall St, I would have lost all or part of that as well.

Thanks to Obama, I've regained what I lost but even so, I'll never get back what was lost.

SS is untouchable and it should stay that way. Think about it. If Rs get the power to do so, we will lost every penny that is rightfully ours.

Guess what, your SS contributions are also untouchable to your heirs. 12.4% of your income goes to SS (6.2% from your earnings and 6.2% contributed on your behalf by your employer--money your employer doesn't pay you because he sends it to the government). If you die at age 61 (assuming you don't have minor children at age 61), all that money never makes it to you or your heirs. You'd have been better off hiding that 12.4% under your mattress so your heirs would inherit it.
It adversely affects black males the most.