# social security



## Bobm

Rumor has it that the White House is considering larger Social Security personal investment accounts than the 2 percent Bush was pushing in the campaign. This is a good sign. While allowing younger workers to invest 2% is better than nothing, it's still not a whole lot. Reports say the administration might propose up to 4%. While anything is better than nothing, bolder action is needed.

How about allowing people to opt out entirely? Let people sign a statement giving up any future benefits in exchange for not having to pay the payroll taxes. The problem there of course is that the government needs their money right now to pay the benefits to current retirees. The government needs the money because it has been stealing from the so-called Social Security Trust Fund for decades to finance their spend-and-elect programs.

Hey! How about privatizing the program entirely? What about developing a cutoff age for future beneficiaries and just ending the program? Here's another idea: why not means test the program so it can be phased out more quickly?

Social Security is a disaster. If any corporation were run the way the federal government runs Social Security, it would be shut down and the corporate officers marched off to jail in handcuffs. We need real reform, not just nibbling around the edges.

You young guys are really going to get screwed if you don't get involved and push this reform, do you want to support rich old farts like me?


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## Bobm

Here some more....... http://www.newsmax.com/archives/article ... 0243.shtml

http://www.townhall.com/columnists/jack ... 1206.shtml

thank God the young people in this country are stupid :eyeroll: 
THE AARP DECLARES WAR ON YOUNGER AMERICANS

It is a cause of dismay, if not outright sadness. Young people, by and large, just can't seem to get worked up about matters political. That's too bad, because they might be interested in knowing that one of America's largest and most effective lobbying organizations has just declared war on them. The AARP has now decided that it's going to fight any effort by President Bush to privatize, even partially, that debacle known as Social Security. If younger Americans had any idea what was happening to them here they would demanding change. If young Americans truly had a handle on the future, and on the fact that they will one day reach that magic age when they stop working and live on their retirement income, they would be marching on DC and occupying congressional offices until change was made. Sadly, these young Americans who are getting so royally screwed by Social Security and the AARP are far more concerned with sports, pop culture and who they're going to 'hook up" with this weekend.

The time will come, though, when these people who today are preoccupied with the grossly unimportant will suddenly realize that they've been robbed blind. For their entire working lives they had 14% of their earnings ripped off as a Social Security "contribution." In time they will find out that if they are actually lucky enough to get any of this money back when they reach the age of about 70 or so, they will have realized a return of less than 2% on their "investment.'

Social Security is running out of money. Depending on who you listen to, in about 15 to 18 years Social Security taxes will not be sufficient to pay the Social Security benefits to the people then receiving them. At this point the government will have only a few options. Here are the choices:

1)Extend the retirement age in hopes that many more Americans will actually do the government the favor of dying before they can collect any or all of their benefits. 
2)Deny Social Security benefits to those who worked hard and made good financial decisions in their lives, thereby insuring themselves a sufficient retirement income outside of Social Security. No ... their "contributions" will not be refunded. 
3)Extend the wage base for taxes so that achievement-oriented Americans can poor even more money into this financial sewer; more money that they will never, ever get back.

You do know, don't you, that there is absolutely no legal guarantee that you will receive one single penny of the money that is taken from you. No guarantee at all. The congress can vote tomorrow to end the system and keep every dollar that has been paid in Social Security taxes. There would be nothing you could do about it. Nothing except, that is, to vote against the jerk who stole your money. All your local politician would have to do is come up with a little pork for the district or state and everything would be forgiven.

And just which group of Americans is hurt the most by Social Security? Black males. If you're a black male this is the ultimate "disrespect." You're being ripped off big time.

Explanation: Divide the people who have been paying Social Security taxes for the past 40 years into four basic groups. White Males, black males, white females, black females. Statistics will show that of these four demographic groups white females have the longest life expectancy; black males the shortest. In 2002 the life expectancy for a newborn white female was 79.9 years. The life expectancy of a newborn black male was 68.8 years. If you were born after 1960 your Social Security full retirement age is 67. This means that a black male can expect to get Social Security benefits for about two years, while a white female can expect to receive those benefits for almost 13 years. You do the math. even if you went to a government school you can figure out that the average white female will receive Social Security benefits 11 years longer than the average black male. It has been estimated that during his lifetime the average black male will lose about $10,000 in income that will be forcibly transferred to a white woman.

*The solution? Privatization!* If you own your own account it can't be taken from you or your family and given to some stranger living in a retirement community in Palm Desert, California. If you have the misfortune to die before the law allows you to start withdrawing retirement benefits from your account the money goes to your family. Isn't that the way you would want it? Wouldn't you want that money to be spent to make your spouse or children rather than someone you didn't know and who might not have even given you the time of day if you had known them during life? 
This is absurd. We're supposed to be living in free country that recognizes property rights. You own you, not the government. You work for you, not for some stranger. In a free country your government should not seize your money by force and put it into a phony "retirement" fund that earns you a sub-par rate of return and to which you have no legal right beyond what politicians are willing to grant. When you die the money you earned during life shouldn't be seized by government to be transferred to another individual you don't know while your family scrambles about looking for a way to keep their home and pay for your funeral, but that's exactly what the AARP is fighting for. :eyeroll:

You do know what happened in Chile, don't you? Chile, for God's sake! They got it right!

Chile used to have a Social Security system that was a virtual copy of ours. Chile, however, didn't have an AARP. What Chile did have was politicians who realized that their system was doomed to collapse, and who did something about it. Chile privatized every individual's retirement benefits. The former Chilean secretary of labor says that Chile first "ended the illusion that both the employer and the worker contribute to retirement." That's a huge step. The dumb masses in America still actually believe that their employers actually "contribute" a matching amount to their Social Security "account." :eyeroll: It's those government schools again.

Americans even believe that there's actually a Social Security trust fund. Yesterday's USA Today story about the AARP's opposition to privatization contained this line: "Excess payroll taxes are held in a trust fund for future benefit payments." That's just flat-out wrong. USA Today reporter Jim Drinkard either knows it's wrong, and lied intentionally, or he's not bright enough to be writing for a national newspaper. *There is no Social Security money being held anywhere. It's all spent. Every single penny. What the politicians don't have to spend on current Social Security benefits they seize and spend on their various spend-and-elect schemes. *
Today in Chile workers pay 10% of their pretax earnings into their own retirement plans. They can elect to pay an additional 10% in pretax earnings if they wish. The companies who manage these funds are prohibited by law from engaging in any other type of business. The sole business purpose of these companies is to take these privately owned retirement accounts and grow them. If they die before the retirement age the money goes to their families. If Chileans live to retirement age they have three options:

Purchase a family annuity from a life insurance company. 
Leave their funds in a personal account and make monthly withdrawals adjusted to match their life expectancy. 
Any combination of 1 and 2. 
The government steps in to guarantee a "minimum pension" for people who have worked at least 20 years and who's benefits don't meet the minimum monthly amount required by the Chilean law.

In Chile 95% of workers participate in the private plan. In America 100% of workers don't have that option, and the AARP is doing everything it can to make sure they never do.

Thanks, AARP. If younger Americans ever figure out what an enemy to their financial future you truly are things may change and you may lose that grip you have on government.


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## mr.trooper

I would love for SS to be privatized. if i could, i would consider opting out entirely. im sorry, but the government DOES NOT know how to spend my money better than i do. Social securtiy is good for those who hav noone to take care of them, but honestly, the care of the elderly is the RESPONSIBILITY of their familys. i realize some may have problems that their family just cant take care of, but the majority of old people are perfectly fine, and just get dumped in retirement "comunity". its so sad.


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## Aythya

Interesting posts. BTW, I am one of the "old" baby boomers. But, given the way our society works today here is my prediction on what will happen with privatization.

Free of any forced savings for a future date people will invest their money in any number of venues or not at all. For those people who do it wisely it will pay off much better than SS. For the rest and likely the majority, they will come limping back to the government for assistance (and probably sue somebody for not telling them that stupid investing would result in no money) and the rest of us will end up paying anyway. We live in the age of "I'm not responsible" and you can see that in many areas of our lives.

Guess I don't have any solutions to the dilemma or somebody would have called me to fix the system. :lol:


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## snoopy

Bob,

I agree that someting needs to be done about SS but there is not an easy solution. If we privatize, allow to opt out, or allow participants to invest on there own how do we pay benefits to those who are already retired and dependent on SS. What about the people that are close to retirement and have paid into SS for 30 plus years. If we were starting new it would be much easier to do something different. The transition could be a train wreck.

My other concern is what happens to those who invest poorly or have a major life changing event and can't make it on their own. I'm not big on social programs but we can't just add these people to the list of homeless. I'm afraid that if we move SS to being reponsible for ourselves that the burden on our government and we tax payers will be even more.

A change in SS will take a major push to educate everyone as to proper investment and how to become financially stable. Anything less will result in you and I supporting those that make poor decisions or just plain blow it.

I guess if we find a way to transition those that have already paid into SS for years my biggest question is what happens to those that screw up their future? We can say that their familes are responsible but there would be a lot of grandmas living pretty poorly if left up to the families.

I guess I have alot more questions than answers. The only thing I know for sure is this will be the political fight of the decade. I just read that the Whitehouse plans on a major media push on SS reform.


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## Plainsman

Maybe I misunderstand this privatization. When Bush says allow people to invest two to three percent, is he talking about your income, or two to three percent of what you contribute to Social Security? It would make a big difference. I may be wrong, but I thought it was only two percent of your current social security payment. In that case is it enough money to worry about? I don't have any easy answers for this problem, and have not decided how I feel about it.


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## Basshole

The only problem with privatization is that you would have a portion of people who would not be responsible enought to invest and then at the age of 65 would have no savings or investments to live off of. The only way that social security would get fixed is if the politicians were forced to participate in it just as we are, but they don't need to because they have their own retirement plan, same salary for the rest of their life + cost of living increases every few years, until they are affected by it they will bever really care.


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## Plainsman

Basshole

I agree that the politicians don't care that much. I think it was in 1996 that the republicans introduced a bill guaranteeing social security payments. I don't remember why it didn't pass, but I'll bet many politicians dreaded the thought of it's passage. Many don't want to see it fixed because it is used as a scare tactic every election. The ------ want to steel your social security.

If people invest, the stock market falls drastically , and some people become destitute in their old age depends on how much they are allowed to invest. If they can only invest two percent of their social security payments then it is very little, and would have negligible effect. I'm still waiting for someone to clarify that question for me. Until I know that answer I can't make up my mind about what I think of the investment proposal.


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## indsport

According to recent reports about the proposed social security accounts, the administration is leaning towards a cap of about $1500 per year to be diverted. However, there is some historical data that could indicate whether the general public would be prudent saving for retirement and it is not good. As an example, over 85% of the public has not opened a Roth IRA even though it is available. For those of you not familiar with Roths, they allow up to $3000 per year to be deposited, and ALL the principal and earnings can be withdrawn tax free at age 59 1/2. This is even a better deal than the proposed social security privitization. So how come, if this is already such a good deal, 85% of the public is not using them? For all who posted on this topic, if you think that privitization is so good, how many of you have a roth and fully fund it every year? If the public is already shows signs that they cannot or will not save for retirement, what makes anyone think that the privitization will work? Any privitization plan would have to mandate that the money goes into the private account, but I see no difference between the proposal and what already exists.

BTW, my wife and I do have roths, max out our 401K every year and put any extra (usually fully funded) into a Roth before any other investment vehicle.


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## Bobm

Indsport would you and your wife max out your contributions to your 401K if the Administrator of the plan changed the rules to these.
1) you must contribute 14% of your income from the day you start working until the day you retire.
2) *administrator will offer a maximum return on your money of less than 2%*
3) administrator may give you your money when you retire, (there is no legal mandate that congress pay social security). 
4) administrator may decide that you cannot retire at 65 and may instead decide to move that to 68 or whatever age we want you have no choice ( the age is already being adjusted up to minimize payouts or hope you die before you collect).
5) *When you die administrator will steal your contributions and only give your wife a paltry 255.00 "death benefit"*. We administrators will keep the rest, not in some fund for others ( remember there is not one cent in the so called fund, but to continue our pet pork barrel projects and vote buying schemes)
*THE ABOVE FIVE RULES ARE HOW THE SS SYSTEM IS CURRENTLY OPERATED.* :******: :******: 
Nobody that understands this can be stupid enough to think its the best possible option. Can they??? :lol:

First of all ... let's get this question settled at the beginning. The AARP is running full-page ads in major American newspapers today saying that George Bush intends to cut Social Security benefits. The AARP is engaging in its usual tactic of trying to frighten the Depends right off of our wizened class by making them believe that their Social Security checks are going to get smaller if George Bush gets his way. That's a lie. It is not true. *There is no proposal on the table, nor will any proposal be made that would reduce the Social Security benefits to any retired person or anyone nearing retirement.* The AARP knows this, but they continue with their ad campaign nonetheless. :eyeroll:

Now ... here's the basic outline of what Bush is expected to propose:

* Allow younger workers to invest around 4% of their Social Security taxes into a personal account with a maximum of between $1,000 and $1,300 a year *THIS WILL BE MANDATED NOT VOLUNTARY*
* Cover the "cost" of the accounts by slowing the growth of payouts to future beneficiaries

Sounds like a win-win situation, right? Younger workers get to actually invest some of their money in a retirement account instead of throwing it down a rat hole and it's all done without any real cuts in benefits in terms of current dollars. *The only difference is the increases won't be as generous.* THERE WILL BE NO CUTS IN BENEFITS

Let's try to explain it a bit better. Here's a paragraph from a story appearing in yesterday's Washington Post:

"Currently, initial benefits are set by a complex formula that calculates workers' average annual earnings in their 35 highest-paid years and adjusts those earnings up from those years to reflect standards of living near the worker's retirement age. That adjustment is based on wage growth over that time span. Under the commission plan, the adjustment would be based instead on the rise in consumer prices."

*Indexing the Social Security benefits to the increases in workers' wages instead of the rate of inflation was a political ploy from the get-go. * Politicians were in love with the idea of finding any way they could to increase the promised benefits to Social Security benefits. There was no better way to bring the votes flowing in then to promise the voter money ... and more money. N. Gregory Mankiw is the chairman of the 2001 Commission to Strengthen Social Security. Mankiw says that the current system of *"wage indexing" of Social Security benefits is the primary culprit for Social Security's present problems.* Bottom line ... it has to go. In the process Democrats are going to do everything they can to make sure that Republicans are hurt politically. :eyeroll:

Now .. here's the kicker. It doesn't really matter that some politicians cooked up an irresponsible plan for indexing Social Security benefits years ago. It doesn't really matter what future retirees are promised by that system. *It doesn't matter because there is no way it's going to happen. That formula is dead. Democrats know it. The AARP knows it. * Proceeding under that formula will guarantee financial collapse for Social Security ... unless, that is, some other drastic measure is adopted. And here we're talking about increasing the retirement age, or a massive increase in Social Security taxes.

*Are you listening?* *The Social Security system simply cannot pay the benefits that have been promised.*  It's time to pay the piper.  Hundreds of politicians have benefited from playing the increased benefits game over the past six decades, and now the bill is due. :******: George Bush is the first president who actually has the canons to tackle this difficult and emotional problem. :beer: As he works for a solution Democrats and the AARP are going to sit on the sidelines and take cheap and dishonest shots. :******: Democrats for votes, the AARP for increased membership and donations. Unfortunately most americans are so stupid about economics and politics that they put up with the unbelieveable screwing that social security represents. :eyeroll:


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## jamartinmg2

Thanks for the info Bob! I couldn't agree more. It may not solve the SS problem entirely, but it certainly is a step in the right direction.

Indie... you mention Roth IRAs. Could the reason that such a large percentage of people not starting one, already have a 401K plan in place with their employer? That is the reason I don't have one. Would there be advantages to have both a 401K and a Roth? Keep in mind I'm working with a set percentage of my income. In other words I don't have an extra percentage to throw towards a Roth at this point. Maybe there is an advantage in splitting what one normally puts into a 401K and put it into a Roth? I suppose the diversification couldn't hurt?


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## indsport

First post: a copy of a letter to yesterday's Jamestown Sun. I make no claim as to the veracity and am not the author.

James R. Jungroth Jamestown

The so-called crisis in Social Security is no crisis at all. It is a scheme designed to fool the unwary into believing that the program must be privatized in order to save it. Sadly a great many people, including many in the media, are convinced that this is true.

The facts are these:

1. According to Social Security trustees, in order to pay full benefits, the program will start spending reserves in 2018. That is what the reserves were accumulated for.

2. Again, according to the trustees, the surplus will be depleted in 2042. The Congressional Budget Office places the time at 2052.

3. When the reserves are spent, the fund is not bankrupt. The CBO states that even then 81 percent of benefits can be paid. This includes cost-of-living adjustments.

If we have a depression, times will be shortened. If we have full employment, times will be lengthened. To predict the health of the economy more than 20 years in the future is speculation.

Very minor changes in financing, such as increasing the amount of annual wages subject to Social Security - $90,000 for 2005 - should satisfy even the most gloomy of pessimists.

Three very significant benefits of Social Security are payments to disabled workers, payments to minor children of disabled or deceased workers and the annual cost-of-living adjustment. There is no explanation of if or how these would be paid in a privatized plan.

Bush's privatization plan is a political gift to Wall Street and a phony solution to a nonexistent problem. It is opposed by AARP. I trust them to look after the interest of ordinary citizens who will retire more than I trust the Bush administration.


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## indsport

To the posters: Bobm, your basic facts are correct and I am glad to see the info that the deduction for younger workers will be mandated but I can hear the grumbles already: How come I can't just invest the money myself? Why is it a mandatory deduction? On to other facts: the 14% you mentioned is actually a 6.2% plus an employer match plus a medicare deduction. Even though the employee will get to put 4% in an account, what happens to the employer match? Does it still go to Social Security? haven't heard anything yet. Next, Social security in its original form was never meant to be an individual's total retirement savings, it was meant to be a supplement. Next, the rate of return of any investment is based on the amount of risk one is willing to assume. Social Security is issued a specialized form of government assurances for each dollar put into the fund that pays a paltry rate (2%), but is assumed to have no risk of losing the money at all. Assume for a moment that the social security trustees wanted higher returns: they could have put all the money in Enron stock, tech stocks, whatever to get a higher return and where would the system be today? next, from all I have seen and heard from financial planners and the social security administration, the overall problem of the social security system will disappear once the large demographic hump caused by baby boomers has passed. However, that is a very large hump and will cause problems. next, if benefits to baby boomers were cut 28%, the entire social security program would be solvent, but what politician is willing to make that choice? next, everyone lives longer than the original inventors of Social Security ever imagined. Next, neither party in Congress has wanted to touch social security in the past and I expect that regardless of charisma or political capitol expended by Bush, both parties in Congress will come up with another watered down plan. It will be interesting to watch and see who flinches.

Finally, as to the other question, one should max out their 401K prior to a roth for the following reason: usually a 401k has an employer match up to some amount and you want to maximize the amount you get as a match. Then turn to roths, then to traditional IRA's. Money withdrawn from 401k's and traditional ira's get taxed whereas roths do not.


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## Bobm

Employer match is a slight of hand, that is money budgeted by the company to employ someone, money that would otherwise be paid to the employee as wages. Same with insurance "paid" by employers by the way.

The employer will still be taxed that difference between the 4 percent and the total 14 %. It will remain invested as the status quo , unfortunately.

The Enron argument is nonsense almost every citizen in the country in invested as are you, thru you 401K in the capital markets. Diversification protects all of us from this. IF your so worried about this do you have your money in a money market or cash account I seriously doubt it. Just like any investing strategegy you will have a variety of options and make the change from greater to less risk as you approach retirement. Worrying about another Enron is like worrring about being hit by a meteor.

No offense to you ( you didn't write it) but the article you posted is full of lies and half truths. when I have som time I'll point out some of them.

Oh and getting over that "hump" you are talking about is going to take about 40 years in other words the rest of your working lifetime. Bushes plan doesn't reduce benefits it will in fact increase them for all of us especially you young guys.


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## indsport

bobm, you completely missed the point on the enron example. I was merely pointing out that social security administration returns are low (2% or so as you pointed out and complained loudly about) simply because the social security trustees needed a completely risk free investment. As to diversification, my own portfolio is very diversified, but only through research and diligence on my own part. Many 401k's, company plans, federal employee plans and what I hear will be the Bush plan (similiar to the current federal employee plans), do not allow adequate diversification. As to the employee payment for the 6.2% and the 1.45 for medicare), I file quarterly taxes for some organizations which have employees and we pay every quarter. That outgoing money is not a myth. 
As to the hump, sorry, I belong to that generation and will be retiring soon. Will I draw social security? Yes, but plan to donate most if not all of it to organizations of my own choosing. 
I am playing devil's advocate in this discussion. I strpngly believe most of the general public, middle income and below, does not have the fortitude, understanding or ability to adequate direct their own affairs when planning for retirement. Over and over again, we hear of the debt load carried by many Americans, the lack of savings, and the lack of money management skills and I see it all the time with friends or acquaintences asking me what to do. I, personally, was lucky and frugal my entire life. I would imagine that you too, are personally frugal and have saved adequately for retirement, paid off all your credit cards, paid off your house and have no bills like I have. But I do not see it in the public at large. I don not trust the public to do the right thing, because as was posted by someone else in this discussion, when the investments go sour, they will run to the government with their hands out.

The one thing I would really like to see is a fully funded, ongoing study of the results of any changes to social security. How many are saving? what is the diversification, and all the other questions assuming the program gets started. This would solve multiple problems: 1) Does the program worked as planned? 2) Since the facts would be out there for everyone to see, we would not need this discussion as to whether the program worled or not.


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## gandergrinder

As a young person, I am screwed either way. There is no way that most people are responsible enough or sophisticated enough to handle their own retirement planning. But for me personally, I want my money so I can use it to plan my retirement. I don't feel the govt can invest the money better than I can.

So what direction do I go. From a society perspective I know that privatizing social security is going to cost my kids (if I have any) because they are going to have to pay to help all the people my age who aren't going to plan for retirement. But I want my money because I know I'm going to use it wiser than the govt. Let's face it. The responsible, innovative and hardworking parts of society are always going to support the retirement of some Americans. That's just the way it is.

Indsport and Bobm, you guys are a prime examples of this. Not only have you supported yourselves and planned for retirement but you have paid into a system that will probably give you very little return on your original investment. I am embarrased and frustrated that our past govt set up a social system on a pyramid scheme. :eyeroll: Thanks.


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## Bobm

Indsport I'm 52 so I'm not looking at this long term either.
I'd like to point out that a bank account is risk free, and historically they have paid a lot more than 2 %.

For some reason everybody seems to be* missing the point that even though its privatized the system is still mandatory so the amount of investment will not decline*.... sometimes I think I'm talking to myself. 

The two biggest benefits will be 
1)*that because its your money, because you earned it, you or your heirs get to keep it *( atleast the portion that is managed privately) instead of surrendering it to some politician to spend on his latest pork! 
2) if its in a privately run account the politicians can't get it.
REMEMBER THERE IS NOW NO MONEY IN THE SS FUND NOR HAS THERE EVER BEEN!!!! THEY HAVE STOLEN EVERY CENT OF IT. THE ENTIRE FUND IS A FOUR DRAWER FILE CABINET IN VIRGINIA FULL OF IOUs from congress. I have seen it with my own eyes, I am not making this up research it yourselves if you don't believe me.

I am really amazed at the resistance to this.


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## Bobm

Heres a artice by Rich Tucker about this

Everyone wants to retire at 50. Well, I've got a plan that will allow to do just that. You might want to write this down and try it yourself.

First, determine how much money you'll need to live on in 2018. In my case, the house should be almost paid for and the children should be almost out of it. Inflation is a wild card, but I assumed that $50,000 would be enough to see me comfortably through the year. After all, I want to have enough to travel and enjoy myself. So I wrote myself an I.O.U.

"Dear Rich: I promise to pay you the sum of $50,000 on Jan. 1, 2018. 
(signed) Rich Tucker."

That piece of paper is now stored in a safe, along with other vital documents (passports, house deed, car title). I'll do the same thing once a year each year until 2018. This plan should carry me comfortably through 2032.

There. Retirement planned for. 

Of course, I'm no fool. I'm already anticipating that the cost of living is going to go up every year. So, every year from now on, I'll add a generous cost of living increase to my annual I.O.U. Say, $2,000 per year. So next year, when I write myself a note for Jan. 1, 2019, it'll be for $52,000. And so on until I actually retire.

*See any problems with my scheme?* It really seems flawless. After all, I wouldn't lie to myself. If I've vowed to pay myself $50,000, well, I'm going to do it. No matter how hard or long I have to work in 2018 to earn that retirement money.

*This is exactly how the U.S. government is preparing for everyone's retirement. Social Security is the national retirement plan. But, starting in 2018, there's nothing there but I.O.U.s. * 

That's probably not what you've heard. Various reports claim Social Security is safe and secure. In their annual report this year, the program's trustees insisted it would be able to pay benefits through 2042. A recent Congressional Budget Office report is even more optimistic. It says Social Security is solid through 2052.

*But these reports pretend there is money in the Social Security trust fund, which actually is all trust and no fund.*

The fact is, *Social Security is "pay as you go." *It always has been. That means it relies on today's taxpayers to pay today's benefits. Which works well as long as there are more taxpayers than beneficiaries. Indeed, for years we've been taking in more than we've been paying out. *The extra money is supposed to go into that trust fund. It doesn't.*

Instead, the Treasury spends the difference on roads, sex-education programs, parks and whatever else the federal government buys. The trust fund gets an I.O.U., which is stored in a fireproof safe to be made good some day with future tax money.

*But starting in 2018 the math changes*. :******: ( *Gander Grinder *pay attention here because this is where you start getting screwed big time) The system will owe more in benefits than it will collect in taxes. Heritage Foundation Social Security expert David John estimates "annual deficits will exceed $100 billion within about five years, $200 billion after about ten years, and $300 billion after about fifteen years."

Again, those who claim Social Security is solvent rely on the trust fund, which supposedly has enough money to make up those deficits until 2032 or 2042 or whenever. But the trust fund is like my $50,000 I.O.U. It's a promise with no money attached. If we really intend to pay Social Security benefits in, say, 2025, we'll have to take lots of money out of general tax revenues to do so. That will mean higher taxes, less spending on other government programs, or both. (* Indsport *this is the biggest lie in the article you posted that I mentioned in a previous post above, and once again I know you didn't write it so I'm not saying anything about you, I am saying the author of the article is a liar or stupid, or worse knows the truth and because of perceived political advantage doesn't care about our young people )

We can fix this, if we want to.

Anyone who owns an IRA or 401(k) understands the beauty of compound interest. Even after the shellacking the market took a couple of years ago, almost everyone has more money in his or her account than was actually put there. Let's create and fund *personal retirement accounts (PRAs) within Social Security*( read that last line twice), so workers will have real money at retirement.

After all, if we allow average-income workers to set aside about 5 percent of their Social Security taxes in PRAs, the government projects the system will be solvent through at least 2077, without a reduction in benefits.  

*But we've got to get started*. The closer we get to 2018, the tougher it will be for future retirees to build up real wealth.

There's a clear choice. We can either plan now, or pass the I.O.U. on to our children and grandchildren. And, like my scheme outlined above, passing the buck isn't a plan. It's a punt.
*This is so important and yet all you young guys are more worried about "Hooking up" or what wheels you have on your truck because you think the topics boring :withstupid: well when your paying 25-40% of your income in 20 years to keep rich guys like me retired comfortably I'll bet you get interested :*eyeroll:

My son is the same way sometime I want to slap all of you..


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## Bobm

Any of you interested in this topics should read all the articles on this page

http://www.heritage.org/Research/Social ... /index.cfm

I hope for your sake you start paying attention and get your friends interested in this, nothing will have a bigger impact on your financial life than this issue especially if your under 50 years old.

This isn't a conservative vs. liberal issue but unfortunately some politicians are willing to portray it this way for their benefit, don't let them. Last ime I checked we all get old and believe me it happens a lot faster than you think! I was twentyfive and benching 500 lbs just yesterday or so it seems :lol: .


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## lonelyrancher

Gentlemen:

Let's not go the way of so many of these posts and argue the points only from our partisan positions. Let's start with some truths.

1. Social Security was never designed as a defined contribution (i.e. 401K), it was always a defined benefit (normal company pension plan). What this means is, the plan was always designed to be a pay as you go plan (money from current taxes pays current benefits). Therefore calculating a rate of return is not exactly appropriate on an historical basis.

This design is what allowed us to begin paying out benefits to retired people in approximately 1950, even though little had been paid in previously. The rationale for this was one of the greatest negative side-effects of the depression was the obliteration of savings by a generation. Old age poverty had always been a severe problem as life spans increased, but this exacerbated the problem.

2. However, on a going forward basis we can change this. We can have funded accounts for people and we can have those accounts invested in a modern way (i.e. in stocks and bonds).

This requires a couple of things and comes with a couple of warnings. First--and most importantly, if we want to accomplish this we must figure out how to pay for the future promises. The mistake in the current proposal is simple. President Bush complains about the Social Security Trust fund (as do many others), yet the administration proposal will be approximately $2 trillion of debt for these future obligations. Exchanging the current government IOU's in the trust fund accomplishes nothing. We made several very high risk financial decisions. We decided to cut taxes by approximately $1 trillion over 10 years. Four years ago, when we made this decision, this was roughly equivalent to the cost of pre-paying the social security promises. After the tax cut we decided to increase substantially the Prescription Drug benefit, yet we did not adequately fund it. This deficit will prove to be in the hundreds of billions in a 10 year period. Finally, we decided to embark upon a war that will clearly cost over $300 billion in before we exit, and most consider $500 billion in the range of reasonable, without raising taxes to pay for the war.

Therefore, we have "shot the wad". The "well is dry". On Social Security, we will need to raise this money from new current income taxes.

3. The evidence of 401ks and IRAs is very negative. Stock brokerages, insurance companies and banks have charged very high (and perhaps appropriate) administration fees for these small accounts. Social security will be smaller. The Social Security Administration now runs this entire program on less than 0.1%. 1/10 of 1%. Our 401K's and IRA's can be 2.00% or more. If you average 6.00% (which is high on an after-inflation basis over the past 200 years), then you would be earning about 4%. This is before commissions, so it would be less.

Therefore, if we do fully fund social security and invest it in a modern way, we should manage it on a group basis like any pension fund. This would radically reduce expenses and risk. Both of which have killed the experience of Americans in the other individual plans available to them.

The Democrats are also wrong, although since they control no part of the federal government, it is a Repulican challenge. You cannot simply ignore the growing problem and you cannot simply fix it with a higher payroll tax.

Contrary to posts, Social Security is highly successful and loved. Old age poverty has been eradicated. We can improve it by fully funding it with current money from all generations.

"Privatization" is not a panacea. Many problems come with Privatization. They are alo incidental, unless we do not fund the plan. The administration plan puts the money in amateur hands and depens upon future generations. Neither is a thoughtful alternative.

Thanks


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## Bobm

> The administration plan puts the money in amateur hands


amateurs huh, unlike the "pros" who have missmanaged it and stolen from it al these years.

I'm sorry but your objections are incorrect to put it politely, same old democrat blah blah. Tax cuts somehow cost us :eyeroll God I'm sick of hearing that) I would rather have the money in my pocket than some beaurocrats thank you very much! IF you want to send more of yours to some politician you can do it voluntarily keep your hands out of my pocket. How about offsetting spending cuts, theres a legitmite critisism we could aim at both sides of the aisle couldn't we ?? And more BS that 401Ks are risky :eyeroll: ect mine has been a gold mine :beer: with a much better return than ss.

The basic difference between conservative republicans and liberal it that we believe we can manage our own lives better than some government official. Most of which I might add have never run a business in the private sector.

There are very few things that the private sector cannot do more efficiently than the govt. and managing money is definitely better done by the private sector.


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## lonelyrancher

BobM

I don't know what your career is or was, but rhetoric is obviously a muscle you have not exercised, and you know precious little about pensions.

You didn't even understand my points.

1. I believe in setting aside Social Security taxes in a funded pension system. Let me explain what this means. Funded pensions are like what ERISA requires of corporations---as the population ages and grows---a larger pool of money (which if it compounds at a predetermined rate) has been set aside and is roughly equivalent to that necessary to pay out the required pension obligations.

2. I believe this money should be managed in a "modern way", which means that the money should be invested in stocks, bonds and cash, including real estate, deriviatives and international equities. This will create an optimized portfolio that should grow at a rate equivalent to the broad basket of these asset classes.

3. However, the actual experience in Europe, Chile and other places, which I have studied and written about, is not good when each of these accounts is separately managed and administered for and by individuals. First, the initial contributions are miniscule, so the administrative fees as a percent of the component assets are outrageous---potentially being 2% for administration alone for the smaller accounts. Second, the actual documented experience of individuals managing IRAs and 401ks is negative. Most people buy at the top and sell at the bottom. They chase the headlines. I'm all in favor of 401Ks and IRAs, but for the core pension assets of our country, and particularly for our poorest, oldest and least investment savvy citizens, self-management will likely result in wasted savings, lost money, and government obligations that will surface for a 2nd time.

4. Last, I won't bother to attempt to get you to understand how Social Security works. All informed people know that changing demographics will require significant changes, but on the issue of financial mismanagement--and equating that with Democrats, you would do well to actually read something.

Let me give you a little primer in government economics.

A. President Clinton for the first time in recent memory (post Reagan's deficits) built a surplus. This meant that the budget reflected approximately a surplus, without accounting for the off-budget Social Security Surplus. He was a Democrat.

B. President Bush has squandered that surplus in several areas

1. A $1 Trillion tax cut without a cut in government expenditures.

2. A large and still unknown (in total expenses) new government program for prescription drugs--that is unfunded and will generate new incremental deficits.

3. A war which has cost America $225 billion, but will likely cost us $300-400 billion in an optimistic time-table. No new revenue to pay for it and again new deficits.

4. A Social Security plan, that is predicated on $2+ trillion in debt.

4. He was supported by a Republican Congress, after being elected by a Republican Supreme Court.

So, please, do not lecture the Democrat party on financial management when Republicans are the party of fiscal profligacy.

I hope you manage your own life better than Republicans have managed the fiscal affairs of our nation. What they have done is a disgrace. Our deficit approaches Argentina's directly before their crash.

By the way, with all the well-managed 401K money, please buy a dictionary and something to help you with your grammar and spelling. It would help present your arguments a bit more effectively and shall we say, "adult-like".


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## Plainsman

Lonelyrancher wrote:


> Let's not go the way of so many of these posts and argue the points only from our partisan positions. Let's start with some truths


.



lonelyrancher said:


> I don't know what your career is or was, but rhetoric is obviously a muscle you have not exercised, and you know precious little about pensions.
> 
> You didn't even understand my points.
> 
> 4. Last, I won't bother to attempt to get you to understand how Social Security works. All informed people know that changing demographics will require significant changes, but on the issue of financial mismanagement--and equating that with Democrats, you would do well to actually read something.
> 
> Let me give you a little primer in government economics.
> 
> A. President Clinton for the first time in recent memory (post Reagan's deficits) built a surplus. This meant that the budget reflected approximately a surplus, without accounting for the off-budget Social Security Surplus. He was a Democrat.
> 
> B. President Bush has squandered that surplus in several areas
> 
> So, please, do not lecture the Democrat party on financial management when Republicans are the party of fiscal profligacy.
> 
> I hope you manage your own life better than Republicans have managed the fiscal affairs of our nation. What they have done is a disgrace. Our deficit approaches Argentina's directly before their crash.
> 
> By the way, with all the well-managed 401K money, please buy a dictionary and something to help you with your grammar and spelling. It would help present your arguments a bit more effectively and shall we say, "adult-like".


Lonlyrancher

You sure caught me off guard with " Gentlemen: Let's not go the way of so many of these posts and argue the points only from our partisan positions". I have not kept abreast of the social security issues and was looking forward to learning something from the debate on the issue. However you then proceeded to jump right into partisan bull. Hypocrisy on a grand scale. Complete with condescending comments. It would have been nice to learn something, but your commentary is so full of partisanship and personal belittling that I could not bear to read through it. I would like to hear what you have to say, if you can leave out the condescension. If you can do that I look forward to your comments. Thanks


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## Ron Gilmore

You are off base about fee's if one looks at the different programs currently run through the Fed Gov. You can do the same type of program on a national plain as the Sen and Reps have. Collin Petersen from MN [D]did a great job of dispelling the myth about fee's on a talk show the other day.

He also pointed out correctly that even though dollars are put in by an employer to the funds they are still wages to the common worker. I think this can be done and be a benefit to all of us while protecting the retiring class we have coming up.

While not as good at writing and pasting things as some others the simple facts are that current direction means big trouble down the road. Change of direction can avoid and eventually fix the issue.

We pay income tax period. Even though the money is taken for a different program it still remains a tax. Reducing Fed spending and pork barrel giveaways is as vital to solvency as changes in the SS program as both sides look at dollars coming in and not where they are intended to be used.

The other thing is education of all workers and beneficiaries. Many people assume that SS is in a separate fund of which they borrow from. Nothing could be farther from the truth. They always have been general fund dollars. The IOU's are simply paper farces designed to hoodwink the people of the US.

SS is nothing more than a liability and no money taken in from the start to now was ever intended to be used to pay future benefits. You have crops in the field. Do you only pay the expenses for raising corn from the corn or do you also pay it from the wheat or beans in years that corn has a shortfall? This is and has been the mentality of the funds gathered for SS.

Putting the money into accounts that neither the Gov nor myself are allowed to access until a predetermined time line is really the only way to make this be a nothing less than an entitlement that future tax payers will be burdened with!


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## Bobm

You're going to give me a primer huh, right. Clinton got lucky and had a republican congress and a dot com boom (Like that spelling jackass) and thats the only reason there was a surplus if he would of had a democrat controlled congress we would all be suffering a govt. run healthcare system and much higher taxes and a much deeper recession than we did ect. Fortunately Bush's tax cuts shortened it and we are now in a srtong recovery.
Most of the rest of your post is just as fictitious..and not worth reponding to


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## Bobm

http://www.cato.org/pubs/journal/cj15n2-3-1.html

Plainsman and anyone else who's interested should read this article and ask your self why the US can do the same thing. 
Of course we could IF AND ITS A BIG IF the people of this country start paying attention to this issue.

Note that both savings and retirement pensions have increased in Chile just the opposite of what Lowly Rancher implied :eyeroll:


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## DeltaBoy

Turn the TV on tonight, NBC will have a special about social security. :wink:


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## Anas Strepera

I like the idea of being able to invest some of that money, athough 4% seems like virtually nothing. At the same time I don't know how I'd feel about allowing people to completely opt out of SS. It kind of goes against the whole idea of the program as there would definitely be people who'd be foolish with their money and lose it all.


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## Plainsman

Bobm, DeltaBoy, and Anas Strepera thank you for taking me serious when I said I wanted to learn something from this post. I will use the resources you have listed. We need to do something, and I need to learn what I am talking about before taking any stand. I know I should have been taking this serious already, but I let this one slip. Thanks again.


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## Bobm

4% of your income at market rates over a lifetime is a lot more than the current system *and no one is advocating allowing anyone to opt out*. So please quit worring about that.
Read about the proposals. The current crop of retirees and those soon to retire will not be hurt and all our children will be much better off as will the poorer among us because the system will remain solvent.

I am pleased that at least some of you are starting to study this issue when you really get up to speed you will realize what a total unbeliveable ripoff the current system is. If a private sector company did what the congress does with the ss fnd they would be in prison.

And *note that the members of congress are not in ss *they have their own very fat system, why do you think that is :eyeroll:


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## Plainsman

Bobm

The site you listed on the program in Chile was very good. If we don't do something soon us baby boomers are going to be a real burden on our children. I may have missed this and if I have I hope I don't appear to ignorant with my next question. Has anyone seen how investments will occur. Will people have a choice of stocks and bonds i.e. low risk, moderate risk, high risk?


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## Bobm

It will be a broad blend of stocks and bonds like any good mutual fund.

Read this- counties in Texas opted out of social security in the early eighties before the greedy congress closed up this loophole. The lucky foks in those counties already have privatized SS everybody is so afraid of. Note they not only make more money than they would in SS but they make more money in retirement than they did working!!!

According to the latest report from the Board of Trustees of the Social Security Trust Funds:

Social Security tax revenues will be insufficient to pay current benefits as early as the year 2012.

By the year 2029, Social Security outlays will have completely exhausted the trust funds, and current revenues will fall short of expenditures by about 2 percent of gross domestic product (GDP) annually.

In order to make the payments without cutting benefits, the Trustees estimate that payroll taxes will have to rise from the current 12.4 percent to 18.8 percent.

*A Private Retirement Plan That Works.*

The initial Social Security Act permitted municipal governments to opt out of the system - a loophole that Congress closed in 1983. In 1981, employees of Galveston County, Texas, chose by a vote of 78 percent to 22 percent to leave Social Security for a private alternative. Brazoria and Matagorda counties soon followed, swelling the private plan to more than 5,000 participants today. In the private plan, contributions are similar to those for Social Security but returns are quite different.

Initially, employees and their employer were each required to contribute 6.13 percent of income; recently, the counties increased their contribution to 7.65 percent - for a total contribution of 13.78 percent.

Of that 13.78 percent, 9.737 percent goes to the employee's individual retirement account, which pays a 6.5 percent average interest rate, compounded daily.

The remainder pays for disability and life insurance premiums to cover the employee in case of an accident or death.

Workers continue to pay their Medicare payroll taxes and to receive Medicare benefits upon retirement. 
But while the cost of the private program, known as the Alternate Plan, is virtually the same to the employee and employer as Social Security, the benefits are far greater. According to First Financial Benefits, Inc., which created and administers the plans:

A person retiring today at age 65 with 40 years of deposits and an annual salary of $20,000 would retire with $383,032 in a personal account.

Someone with a $30,000 salary for 40 years would retire with $573,782.

And a person with a $50,000 salary for 40 years would retire with $956,303.

*A personal retirement account this size provides a much larger postretirement income than does Social Security*. 
Moreover, retirees under the Alternate Plan have a number of options not available to retirees under Social Security. For example, those with the Alternate Plan can choose among several annuities or take their money in a lump sum. As the figure shows, under one option:

A retired $20,000-per-year worker with the personal retirement account would receive $2,740 each month at current interest rates, while Social Security benefits would be about $775 per month.

A $50,000 per year worker would receive $6,843 from the private plan, compared to $1,302 from Social Security. 
In addition, the employer's contribution pays for much more generous benefits than those provided by Social Security.

The life insurance benefit is three times the worker's salary (with a minimum benefit of $50,000 and a maximum of $150,000); Social Security, by contrast, pays a one-time death benefit of $255 to a surviving spouse.

Disability insurance under the Alternate Plan pays 60 percent of an individual's salary until age 65 or until the individual returns to work and is relatively easy to qualify for, while Social Security disability benefits can be very difficult to qualify for and are unavailable to young workers who have not yet worked the required amount of time. 
Is the Program Safe? One of the biggest challenges to privatizing Social Security is to ensure the safety of the contributors' investments. Workers under the Alternate Plan are required to make their payroll contributions, and the money is invested in annuities with a highly rated insurance company. Though the interest rate can fluctuate from year to year, the financial institution that invests the money must pay a guaranteed interest rate for that year.

Conclusion. Employees of three Texas counties are enjoying rapid growth in their retirement incomes, better benefits than those offered by Social Security and the satisfaction of knowing that the money deposited in their accounts belongs to them and will be there when they retire. Privatizing Social Security is not a distant dream; for some Americans it is a present reality. Fairness and true social security demand that all Americans have the same opportunity.


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## Bobm

although few really care about this issue heres an interesting article about just how soon it will be afffecting us

http://www.nationalreview.com/nrof_lusk ... 110842.asp


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## Bobm

A Political Case for Social Security Reform 
Individual accounts would protect retirees from the government interference. :beer:

BY GARY BECKER 
Monday, February 21, 2005 12:01 a.m. EST

Republicans and Democrats are arguing passionately about the future of Social Security, and the argument, at its core, is about privatization. It is true, as some critics observe, that there is no magical gain in privatizing Social Security, since all systems have to provide incomes for retired persons. By that token, however, there's no gain in privatizing a government steel plant either, since steel still has to be produced, too. Yet there are very good reasons--with roots in political economy--to privatize steel. And as with steel (and the like), there are excellent reasons for a privatized individual-account Social Security system.

Pay-as-you-go social security started first in Europe as a relatively easy way to provide a minimum standard of living for the elderly. It was introduced in the U.S. during the 1930s partly, also, to discourage the elderly from competing for jobs when unemployment of younger workers was staggeringly high. It was a cheap system then because there were more than 10 workers per retired person, so the Social Security tax could be small relative to the benefits received by retirees. Indeed, the first several generations of retirees earned very high returns in retirement income on their accumulated Social Security tax payments.

But birthrates have fallen drastically and life expectancy at age 60 has expanded enormously. Fewer workers are now being forced to support more and more retirees. The result is a huge rise in social security taxes in every nation with a pay-as-you-go system. The combined tax on employees and employers in the U.S., excluding contributions to Medicare, is now 12.4% and rising, and that percentage is much higher in Japan and most Western European nations. The expectation of continuing growth in this tax rate explains why countries as different as Sweden and Britain have partially moved toward a privatized individual-account system. It also helps understand why Hong Kong, Poland and other countries with low birthrates that recently introduced social security have important components of individual accounts in their systems.

Contrary to the Bush position, however, I do not believe that the main advantage of a private-account system is that individuals can get a higher return on their old-age savings by investing in stocks. There are no freebies from such investments since the higher return on stocks is related to their greater risk and other trade-offs between stocks and different assets. However, neither is there any special "transition" problem in moving to a fully funded privatized system since future generations, under all systems, have to pay the implicit debt due to commitments toward present and future retirees--unless, of course, they default on these commitments. But it is better to transit smoothly to fund this debt by starting now, rather than require sharp increases in taxes on later generations.
Retirees for whom Social Security income is not a major part of their retired assets will invest much of their own savings in stocks. Studies indicate that this is precisely what they generally do with their IRAs in order to have a balanced portfolio between stocks and the implicit Social Security assets guaranteed them. Since lower-income persons accumulate few assets other than their Social Security assets, a fully funded system through personal savings would enable them to have more balanced portfolios between stocks and bonds.

So, some might pose this question: If there is no obvious gain from allowing most individuals to invest in stocks to help cover their retirement, and if there is no fundamental transition problem, what, if any, are the advantages of a funded privatized system? I believe the advantages are mainly political, not "economic," and that privatization helps to separate saving for retirement from interest-group politics, from taxation, and from government spending.

Pay-as-you-go systems are in trouble in good part because of changes in the number of workers per retiree, but also because of politically determined decisions that altered the system from a saving system for old age to an inefficient and complicated welfare system for some of the elderly. Despite the growing mental and physical health of older persons, political pressures in all nations with such systems forced a restructuring of social security payouts to encourage retirements at earlier ages than even the originally established 65. In the U.S., many retirements occur at 62 or earlier, while Italians retire frequently while in their mid-50s. Very early retirement is common in Germany, Belgium and other European countries.

In addition, the link between contributions and benefits has been separated, so that each additional dollar contributed in taxes pays no more than about 40 cents in additional benefits. Hence, the social security system has evolved into two largely independent systems: a sizeable tax on wages, starting with the first dollar earned; and retirement benefits that are "guaranteed" by the government. There is only a modest link from an individual's accumulated tax payments on his earnings to these "guarantees."

Just as important are the political implications of federal fiscal behavior. Revenue from Social Security taxes at present exceeds payments to retirees. This excess is counted as part of the growing Social Security Trust Fund, but in fact also enters into the consolidated federal budget account, and helps reduce the reported spending deficit. Reported deficits during the past decade would have been much larger if Social Security were not running a surplus during this whole time period.
Social Security tax revenues are expected to fall below spending on retirees in less than 20 years. If we simply raised Social Security taxes now--say by two percentage points--consolidated federal deficits would appear much smaller, and the federal government would be under less constraint to reduce spending. Both theory and evidence indicate that a good fraction of the additional revenue would indeed be spent. "Putting aside" assets for the future is very difficult for all governments, subject as they are to immense demands for spending now from various interest groups.

A good individual-funded savings system would require individuals to save 4% to 6% of their incomes (President Bush suggests 4%), and to invest these savings in private individual accounts that would meet certain government-established criteria. At the same time, Social Security taxes should be cut by a couple of percentage points from the present level to ease the burden on workers. These taxes could be cut since under this saving system younger workers would be contributing to their own retirement. Moreover, a tax cut would reduce the Social Security surplus, so the government would be less tempted to spend more by rapidly growing Social Security "reserves."

These private accounts would accumulate tax-free until individuals decide to retire. The age of retirement, within broad limits, would be left to individuals; but like IRAs now, these funds would continue to grow with savings for persons who retire at later ages because they like their work, and are in good health. At retirement, individuals would get access to their assets either in a lump sum or as annualized income, and would pay taxes on their withdrawals.

As in Chile and other countries with private retirement accounts, the government would guarantee retirees a minimum income--similar to, but larger than, the present minimum social security guaranteed. Unfortunately, such guarantees create a "moral hazard"--that is, savers may want to make risky investments that give high payoffs if they succeed, since the government partly bails them out. Or they may not save at all. But the minimum required savings rate overcomes the latter incentive to "game" the system, and regulation of which types of investment accounts are approved takes care of the incentive to be overly risk-taking.

As in the president's proposal, we should limit Social Security accounts to index funds--that is, funds that do not try to beat the market and invest in a balanced market portfolio of stocks and bonds. Individuals who are contributing more than the 4% minimum could take greater risks if they want to, as they do not pose any moral hazard. Index funds both reduce the overall risk of an account and have very low management fees, since it is quite cheap to run these funds, as shown, among others, by Vanguard and Barclays. High management fees is a common complaint about the Chilean system, although this system has yielded high returns to investors even net of these fees. Besides, the fees have come down a lot in recent years.

There is no guarantee that government interference would not increase further in such a privatized system since the retired would continue to press for additional benefits. But experience shows that governments interfere less when an industry is privatized, especially in access to capital and financing of budget deficits.
So the really strong arguments for privatization are that they reduce the role of government in determining retirement ages and incomes, and improve government accounting of revenues and spending obligations. All the other issues are really diversions, because neither advocates nor opponents of privatizing Social Security generally answer the most meaningful question: Is there as strong a political economy case for eliminating government management of the retirement industry as there is for eliminating its management of most other industries?

My answer is "yes."

Mr. Becker, *a Nobel laureate in economics*, is a professor at the University of Chicago and a senior fellow at Stanford's Hoover Institution.


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## Plainsman

Bobm

I can see no reason not to go with Bush's plan. I will be calling North Dakota senators offices to voice my opinion. It will not effect me, but it will be better for my children.


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## Bobm

Yeah, unfortunately us old farts are not going to get a whole lot out of the private accounts but these young people will so I keep tring to get them interested in it. If they only knew how soon they will be old :lol: they would be screaming for this. There is no downside that I can see, other than for the PORK Barrel thieves of congress on both sides of the aisle.


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## Bobm

let's look at some of the gross political deceit, lies and unkept promises that have become a part of Social Security. Read this excerpt from an article by Economist Walter Williams.

Here's what a 1936 government Social Security pamphlet said: "After the first 3 years -- that is to say, beginning in 1940 -- you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. ... Beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. ... And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. ... That is the most you will ever pay."

Had Congress lived up to those promises, where $3,000 was the maximum earnings subject to Social Security tax, controlling for inflation, today's $50,000-a-year wage earner would pay about $700 in Social Security taxes, as opposed to the more than $3,000 that he pays today.

*The next big lie *is from the same Social Security pamphlet: "Beginning November 24, 1936, the United States government will set up a Social Security account for you. ... The checks will come to you as a right." First, *there's no Social Security account containing your money*, but more importantly, *the U.S. Supreme Court has ruled on two occasions that Americans have no legal right to Social Security payments. *
In Helvering v. Davis (1937), the court held that Social Security was not an insurance program, saying, "The proceeds of both (employee and employer) taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way."

In a later decision, Flemming v. Nestor (1960), the court said, "To engraft upon Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands ... " That flexibility and boldness mean *Congress can constitutionally cut benefits, raise retirement age, raise Social Security taxes and do anything it wishes, including eliminating payments. * :eyeroll:

If a private retirement company reneged on its promises, we could take it to court. If Congress reneges on its promises, there's no judicial course of action whatsoever.

Vital to any Ponzi scheme, like Social Security, is the ability to recruit as many suckers as possible. In 1999, a little noticed part of President Clinton's plan to "save" Social Security was to force 5 million previously exempted employees into Social Security. If they were forced into Social Security, it would have created billions in additional revenue. *Guess what. Twelve senators, including five Democrats -- Dianne Feinstein (D-Calif.), Barbara Boxer (D-Calif.), Christopher Dodd (D-Conn.), Richard Durbin (D-Ill.) and Edward Kennedy (D-Mass.)* -- descended on the White House to demand that President Clinton not support forcing 5 million of their constituents into Social Security. *They warned of the adverse impact on employees in terms of lower rates of return and lost flexibility. *
Isn't that great? These are the same politicians who are now resisting President Bush's call to allow Americans to take a part of their Social Security taxes to put into private retirement accounts. :eyeroll: :eyeroll: If they'd go to bat for those 5 million workers to remain out of Social Security, to avoid the adverse impact of lower rates of return and lost flexibility, *why would they fight to deny tens of millions of workers a right to use a portion of their taxes to do the same*?


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## DJRooster

2008..."Bob" for president!!! But I'm not sure I can believe everything that he says, but then again with those qualifications he will make a good president.


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## Bobm

I didn't write it Walter Williams did. Whats wrong with you?? :eyeroll:


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## Gohon

Aythya said:


> Interesting posts. BTW, I am one of the "old" baby boomers. But, given the way our society works today here is my prediction on what will happen with privatization.
> 
> Free of any forced savings for a future date people will invest their money in any number of venues or not at all. For those people who do it wisely it will pay off much better than SS. For the rest and likely the majority, they will come limping back to the government for assistance (and probably sue somebody for not telling them that stupid investing would result in no money) and the rest of us will end up paying anyway.


It won't be designed to work that way. For the most part it is a paper work drill much like the 401K plan. You won't receive any money back for investment, you won't have a reduction in money withheld and you will only be allowed to invest in selected areas determined to be relatively safe by the government. So lets say it is 5% you are allowed to invest. When retirement age rolls around you will receive 95% of the invested government social security which usually earned 1-2% interest and the 5% you invested plus what ever percentage you earned on that 5%. If you screwed up the most you loose is 5% of the expected social security at the present rate. In addition if you die before retirement the interest you earned on your 5% is passed to your spouse or children. It's a win-win situation no matter how you look at it.


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## indsport

http://www.factcheck.org/article313.html


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## Gohon

indsport said:


> http://www.factcheck.org/article313.html


I've read this before and though I agree Social Security is not in as much trouble as some would want us to believe, it is never to early to start fixing things. Especially when you realize that these kind of programs take a considerable amount of time to be effective. So in the scheme of things, 30+ years will be here real soon.

However, here is the part that gets me as quoted from the site above.....

"Actually, neutral experts predict the system can pay between 70 and 80 percent of currently scheduled benefits even if the Trust Fund is exhausted".

Think about that ............. are you happy to know that you will receive 70-80% of what you should receive? Would you accept your boss telling you on payday that he can only give you 70-80% of your paycheck? I think not..............


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## indsport

Assuming I was given enough warning and time to plan for only 70% of my social security check, I would be willing to give up my 30% if it meant that all social security recipients would get something. In the past, when working on certain projects on contract, I have given back part of my salary to make sure everyone on the project got paid. Sorry, but my altruism does extend that far and I have done that in the past.


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## Bobm

The idea that a program that was started with a ratio of approximately 30 workers contributing to each retiree is headed to a ratio of 2 workers for every retiree is not in trouble is mind boggling. For those workers its not a question of giving up 30% of their social security benefits but to have a *30% ss tax to pay on their incomes*. This is simple math. What I really don't understand is why SS is so sacrosanct?? In any other business if the market conditions changed that drastically and no one reacted to it by changing their business plan they would go bankrupt just like SS will. Why don't we as taxpayers embrace no, actaully demand changes! The only folks denying this problem are doing it for political advantage and its unbeliveable to me because its an obvious trainwreck. I guess they just think they will be out of office or dead before it happens. Shame on Congress all of them both sides of the aisle, they make me sick on this issue. They have squandered the SS tax money paid by the taxpayers on pork projects and replaced it with IOUs in a file cabinet ( Absolute fact)! And yet people in this country still want to let them manage our retirements, if they were in the private sector they would beheaded to prison. uke:


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## Plainsman

I would agree that bankrupt is perhaps a hyperbole. Unfortunately sometimes we must speak that way or half the people just yawn. We talk about these things on this form, but 90% of people walk around without a clue. Ignorance is bliss.

Many people say they don't want this plan, because they don't want to take chances. They say some people can just barely make it now and they rely on social security 100%. Then some of those people say 70 to 80% is acceptable. So if that is so why are they afraid to invest 5%. That is illogical.

Everyone agrees that social security is in trouble, the only argument is the magnitude of the trouble that it is in. Many want to wait and see. As we wait the problem grows. Perhaps Bush's plan isn't the panacea many want, but it is an improvement. If social security indeed can only pay back even 80% would it not be beneficial to have a second resource to fall back on.

Many people think that investors are not smart enough and will lose their money. No one makes their own investments under this plan. It works much like today's federal employees retirement plan. As I understand it you will only have two or three choices. Actual investment will be made for you.

The best part of this is you can not leave social security to you kids, but you can leave your investment. This will not benefit us old codgers, but it will benefit the younger people retiring 20 years from now. I think it is a shame that the senior citizens groups are against it. They think it will deplete the Social Security reserves. I have bad news for them there are none.


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## Gohon

> Perhaps Bush's plan isn't the panacea many want, but it is an improvement. If social security indeed can only pay back even 80% would it not be beneficial to have a second resource to fall back on.


What is really sad about all of this is back around 1992 or 93 Clinton floated this same idea to see what people thought. At that time the Democrats said there was a problem and Republicans said there wasn't a problem. Most all the Republicans were against it and most all Democrats were for it. So the idea was dropped. Now that is reversed because there are different powers in office.......nothing but pure partisan politics at work. That is one of the reason I cast a weary eye on most all the Republicans being for the fairtax program with Democrats coming out against it. Is that just another I have to be opposite position both sides are playing.


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## Bobm

> Is that just another I have to be opposite position both sides are playing


.

I couldn't agree more, isn't it funny how most people except for bitter partisans can see the reality of this problem clearly. Like I've said before thats why I first left the democrat party, then next I left the republican party and ended up a Libetarian. They arn't perfect either but they seem to me to be alot more honest.

Its frustrating isn't it. I swear right now if the Bush said the sun rose in the east the dems would argue that it didn't. And the Republicans are no better. All they care about is personal power, what you really have to ask youself is why congressmen will invest millions of dollars (of their own money in many cases )to get a job that pays what 140K or whatever it is now. Why the hell we would trust the with our SS money after they stole everything we've given them for that purpose away on vote buy pork projects. What sense does that make?


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## DJRooster

If social security is in as bad a shape as some would have us believe we need to guarantee it will be fixed by raising the $90,000 limit and then tweak it by opening up private accounts for those willing to take a little risk to possibly increase their social security benefits. Sounds to me like a hybrid of the two solutions would be the best solution of all.


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## Bobm

Dj heres why we need to change it to private accounts


> Why the hell we would trust the with our SS money after they stole everything we've given them for that purpose away on vote buy pork projects. What sense does that make?


We cannot trust them period, as for guarantees there is none, currently there is no clause in the current SS law that makes congress have a legal obligation to give you one dime of you SS money. Read about it and check it out.

The latest big solution is to raise the SS age, of course congreemen like most gov workers are in a different system that doesn't have all these problems

What a coincidence. :eyeroll: Damn Congress, they have been stealing from this system for 50 plus years and they will continue to do so if we are stupid enough to let them. If they hadn't been plundering the system all these years we wouldn't be having this conversation. Thats the bottom line who do you think will have your retirement interests at heart, you or some crook in Washington?? When you see any politician making the argument that this shouldn't be changed you can bet they are licking their lips betting we are stupid enough to let them keep this stuff up and unfortunately our schools ( government operated what a cooincidence) don't teach economics so our countries has descended into political and economic ignorance.


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## DJRooster

Weak argument, Bob......"We need individual accounts because the government has stole all our money in the past" is about as weak of an argument as you could possibly find, Bob. Besides, your individual account will only be a small part of your overall personal plan and they will still be able to "steal the rest." Individual accounts may be a good plan B. I have played the stock market for years and know things sometimes work in your favor and sometimes do not. We need a plan A before a plan B.


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## Bobm

> Weak argument, Bob......"We need individual accounts because the government has stole all our money in the past" is about as weak of an argument as you could possibly find, Bob


Only you would think that is a good idea to give someone that has stolen money from you, more money :eyeroll:

No savy investor "plays the stock market", they invest in widely diversified funds over a long period of time and they end up wealthy in their old age. Or they let congress steal it all and end up like we are now with a 1 and1/2-2% return on investment, no ownership, no ability to pass our SS savings on to our children, and if you die before you collect what you put in you wife gets a $500.00 death benefit and they steal the rest. I'm not suprised you like that though,


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## DJRooster

Bobm said:


> Weak argument, Bob......"We need individual accounts because the government has stole all our money in the past" is about as weak of an argument as you could possibly find, Bob
> 
> 
> 
> Only you would think that is a good idea to give someone that has stolen money from you, more money :eyeroll:
> 
> Bob, individual accounts are not going to let the government "steal your money because only a small amount of your account will be available to be invested in your individual account the rest can still be "stolen". I thought you would understand this?
> 
> No savy investor "plays the stock market", they invest in widely diversified funds over a long period of time and they end up wealthy in their old age. Or they let congress steal it all and end up like we are now with a 1 and1/2-2% return on investment, no ownership, no ability to pass our SS savings on to our children, and if you die before you collect what you put in you wife gets a $500.00 death benefit and they steal the rest. I'm not suprised you like that though,
Click to expand...

Now you are an expert on investment and tell me that I am not a savy investor. Who are the savy investor's and do you think the average American will be savy enough to manage their individual account? What side of the fence are you on, Bob! I will tell you who will probably benefit from individual accounts but this is part of the risk and I fully understand the risks. That is why I can live with this as a plan b but I also want to remove the cap as a backup in case it doesn't work out. If it does work out for those that choose to have an individual account then great. I will be happy for them. I personally don't need an individual account because my investments are very diversified and social security is only a small part of my retirement program. I do not have a problem with them as an option but to convince me that it is the cure all for the problems we have in the social security program is just not going to happen.

Where have I mentioned the death benefit? I also question your loose interpetation of stealing because I would assume that money was used for some very beneficial government programs of which you were probably a benefactor. "Stealing?" Seems to me that your enjoy putting your words in my mouth! Say what you mean but do not say what I mean. I will no longer comment on this topic because people know where I stand and I would like to hear how others feel besides you on this issue because we know where you stand. Please stand back now and accept your role as the moderator and not the..........

You would be happy for me on this one, Bob. My wife has had a job paying approximately $30,000 for 22 years and never paid into the social security program. No "stealing" here! That should put a  on your face!!


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## Bobm

Thats right stealing, the congress has taken monies paid into SS by us and spent it on pork barrel spending and now the system is going broke. If they had invested our SS payments in a diversified manner like you admit would sensible and you do yourself we wouldn't have to worry about it. I think congress is full of a bunch of crooks, if anyone in the private sector did what they have with SS they would be sent to prison period. There is no money in the SS fund and there hasn't been because the congress has taken it and literally put an IOU in a file cabinet in Virginia to offset what they take. 70 plus years of contributions into the fund by everyone all stolen by congress and they then spend the money on pork. And people still wnat to trust them with the money its mind boggling, thats why I won't ever trust them.


> Where have I mentioned the death benefit?


you didn't and I never said you did, I was describing the screwing we all get from SS and thats one part of it.



> You would be happy for me on this one, Bob. My wife has had a job paying approximately $30,000 for 22 years and never paid into the social security program. No "stealing" here! That should put a on your face!!


Teacher or some other type of government worker, of course most government workers do not have to suffer under the system that the government forces the people outside the government to suffer from. No surprise there either. If its such a great system why don't government workers have to be in it with the rest of us?? Have some congressman send a bill up advocating that and then we would hear all the goverment worker squealing like stuck pigs, and I wouldn't blame them. Don't you love how congress tells us how to live and routinely exempts themselves and other government workers from these same restraints.
Unfortunately for government workers around 1983 the democrats in Congress noted correctly that many local goverments, school districts realized full well that they could do much better outside of the SS plan and were logically chosing to opt out. They then closed that loophole and enslaved the younger govt. workers with the rest of us.


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## Militant_Tiger

Sorry to post this kind of randomly, but I am just fed up. How exactly will privatization save social security? Can anyone give me any information that shows this?


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## Bobm

In and of itself it won't. And saving SS is not the best idea anyway, phasing into a new system that will benefit young people like you now with a guaranteed much greater return on your savings, while its affordable, is what should happen. That is the reason for private accounts, the Older folks in the system like me will have to be paid they are way to far along to change and noone in either party is suggesting they don't get paid. Its crazy when you think about it that ANY program shouldn't be adjusted as demographics change.


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## Bobm

MT read this article in USA Today its a good example of what privatization means to your retirement

http://www.usatoday.com/printedition/ne ... 16.art.htm

Read the credits about the author on the bottom also

Thanks

The real beauty of this story is that its an apple to apple comparison IE the tax rates taken from the employees are the same as the SS system

Those that want to keep the existing system, have one goal, to keep your generation dependent on govt. They are only interested in personal power not the good of the country and I'm talking about Dems primarily on this issue but many Repubs are no better.


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## Gohon

In the first place privatization is misleading. To do this 100% of social security would have to be turned over to the private sector. As is it is for 5% or less of the collected amount, which means the government would still be controlling and investing 95% collected. In the second place it is not designed to save social security but to give people a chance to have more at retirement. It will take another complete revamp to save social security.

What gets me is that people don't understand that they are not going to get a percentage returned to them to just throw into the market as they wish. They will be limited to only a few safe choices considered slightly higher in risk than where social security is invested now. Plus, if someone feels they don't have the knowledge to pick where to invest the money they can simply put it into the same place the government does now, be safe and have something that they can at least pass to family in the event of their death. Think of it this way ........... say at retirement you were qualified to receive $1,000 under the present program. However you done a bad job with the 5% you invested so now you only get $950 a month. Had your investment area been good you might have gotten $1,100 or $1,200 a month. You don't think that $50 a month was worth a very small risk.....


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## Bobm

> They will be limited to only a few safe choices considered slightly higher in risk than where social security is invested now. Plus, if someone feels they don't have the knowledge to pick where to invest the money they can simply put it into the same place the government does now,[/
Click to expand...

quote]

Do me a huge favor and tell us where it is the goverment "invests" now??

( hint: they don't, there is no fund none, nada, it's a pay as you go system and if there is any excess Congress steals it from the system and spends it on pork)

This is the biggest factor that is making this issue so hard *So few people know what the reality is,* many Americans think that the SS fund is actaully a fund with money in an account somewhere :eyeroll: . *Its not there is no SS fund period.* Look it up!!!!!


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## Gohon

Bobm said:


> Do me a huge favor and tell us where it is the goverment "invests" now??


Easy, the Social Security system buys U.S. Treasury bonds with the surplus. Essentially, the government (in the form of the Social Security Administration) loans the surplus to itself. There is a surplus left over from each years budget. It doesn't go anywhere but there is one.



> ( hint: they don't, there is no fund none, nada, it's a pay as you go system and if there is any excess Congress steals it from the system and spends it on pork)


Never said there was a locked box but the pay as you go system went out of existence as soon as congress figured out how to steal the money as noted above.



> This is the biggest factor that is making this issue so hard *So few people know what the reality is,* many Americans think that the SS fund is actaully a fund with money in an account somewhere :eyeroll: . *Its not there is no SS fund period.* Look it up!!!!!


Your right, some people really don't know but instead of rolling your eyes you might do well to get off the spin and take your own advice and look it up. There is not a locked box but there is a appropriated fund that does have excess at the end of every year. If you want to really be worried about something, start worry about what would happen if everyone called in those Treasury bonds all at once.


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## Militant_Tiger

> Those that want to keep the existing system, have one goal, to keep your generation dependent on govt. They are only interested in personal power not the good of the country and I'm talking about Dems primarily on this issue but many Repubs are no better.


How exactly do they gain power by taking money from me, investing it, and dishing it back? It seems like you are pulling quite a bit of this out of thin air.


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## Bobm

Gohon said


> Easy, the Social Security system buys U.S. Treasury bonds with the surplus. Essentially, the government (in the form of the Social Security Administration) loans the surplus to itself. There is a surplus left over from each years budget. It doesn't go anywhere but there is one.


While technically correct this is not investment in the sense we are talking about in the context of privatizing SS now is it?? so who's spinning? Its a slight of hand by congress so they can spend the money as I correctlystated on other things and has provided no direct benefit to SS like TRUE investment would. Start a financial investment company on your own and try that type of accounting and you would be in federal prison. Many people in this country actually believe there is a fund somewhere managed like their IRAs, and that ignorance is why this issue is so hard to explain.
MT asked


> How exactly do they gain power by taking money from me, investing it, and dishing it back? It seems like you are pulling quite a bit of this out of thin air.


Tiger when you give the control of your retirement money to somone else they now control your retirement, they make the decisions, and in the case of SS they steal it to spend on other things and give you a IOU. They don't even have a legal obligation to pay you back if they can't, whicih means if the govenrment does have the money or decides it needs the moey you been paying into SS for something else they do not have to pay you one cent, and that is the law. If you have a private account, even in an long term annuitty which has no risk, you would be able to average 5-6% over your life as opposed to the 1 1/2-2% return from SS. ( this difference is huge read the USA today link in the above post) And its yours they can't take it and spend it on anything else. Why do you think this proposal gets most of its support from under 30 year olds, the ones that understand the situation understand the screwing they will get with the current system. Don't worry about over 50 year olds we are not affected by these proposed changes. We are going to get the standard SS screwing they've promised us :eyeroll: but there is hope for your generation. Anyone that looks at the difference in return in the Texas example and doesn't want it is incapable of rational thought, I am amazed this is even an issue to so many.

Democrats have been using this fact to scare seniors every election cycle for the last 40 years which is why this issue is such a political hot potato, and the whole problem has been ignored, Bush is the first politician with the balls to deal with the issue to his credit. All politicians need you to need them, and they work issues to that end instead of solving them, simple as that. And they constantly want to expand government to increase their power, its like when they scream about budget cuts once again they are tricking you with political speak, the budget never gets actaul cuts, it never happens. Federal government spending has never been less than the previous year, never.

I was wrong in one of my posts about SS though if you die the death benefit is only $255.00 not $500.00 and the rest, everything else you put in it is stolen by congress, not given to your family. Why do you think they want to raise the age limit of retirement?? Simple they don't want you to get the money, YOUR money.


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## Gohon

Bobm said:


> While technically correct this is not investment in the sense we are talking about in the context of privatizing SS now is it?? so who's spinning?


Of course it is correct and for you to state "hint: they don't, there is no fund none, nada" is simply spin on your part. When you do that then you are doing exactly what you complain the opposition of doing. Who was spinning....... you were and are and every time you do like this you simply weaken your arguement. Now if you will go back and read my post you will see that I said a person could just invest their percentage of SS in the same place the government presently does, which is Treasury bonds and they can do that. So it is in context..........


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## Bobm

I'll admit I missed your point about where the govt. invests but my point about the fact that they're not investing in Treasury bonds for the express purpose of SS is also true, where the govt invests any surpluses won't change the SS situation. SS taxes collected should be earmarked for that purpose only and there is no fund like that gathering interest. Congress takes the money and spends it on whatever they see fit and throws another IOU in the file cabinet.

Do you trust Congress??


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## Militant_Tiger

> Tiger when you give the control of your retirement money to somone else they now control your retirement, they make the decisions, and in the case of SS they steal it to spend on other things and give you a IOU. They don't even have a legal obligation to pay you back if they can't, whicih means if the govenrment does have the money or decides it needs the moey you been paying into SS for something else they do not have to pay you one cent, and that is the law.


You find me someone who has been denied the money that they put into social security and I will eat a possum.


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## Bobm

> You find me someone who has been denied the money that they put into social security and I will eat a possum.


Every single person that dies before the age of 62 loses every cent they put in. Unlike private accounts where their heirs then get the money their parent saved for retirement.

Hope you like possum smarty pants :lol:


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## Militant_Tiger

> Every single person that dies before the age of 62 loses every cent they put in. Unlike private accounts where their heirs then get the money their parent saved for retirement.
> 
> Hope you like possum smarty pants


I said denied to them, not their kids. Money doesn't do you much good when you're dead.


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## Bobm

Start eating, they put it in and didn't get it back, wouldn't of happened in a private account, I hear they're good sliced thin and fried :lol:


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## Gohon

> You find me someone who has been denied the money that they put into social security and I will eat a possum.


You left yourself open on this one. Anyone that was never married to another that had a full paid social security account or themselves had never earned the required 40 credits for social security would be denied social security even if they had earned up to 39 credits which takes 9 years full time work to reach or 10 years for the 40 credits. I'm not going to search for someone but I'm sure there are some around.

However, I personally know one person that was a 30 year retired Navy man that paid into social security and was denied any social security benefits. Up until somewhere around the mid 50's, military personnel did not pay into social security but did earn special credits for time served. Somewhere around 1956-57 (not sure) congress changed that and started withholdings from military pay for social security. His last 4-5 years were under the new program and he paid into social security. He never worked in the civilian sector after military retirement and never reached the minimum 40 credits. Though his 30 years in the military earned him special credits and he obviously earned 12-16 credits during his last couple years it wasn't enough. He was dependent on military retirement for income and the VA for medical. The money he did pay into social security was never returned. He wasn't alone..........

You want that baked or fried............


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## ej4prmc

Another Bush scam! I make about 32,000 a year with OT. I just figured out what 4% of my soc. sec. is and it came to 78 dollars a year. If Mr shrub thinks that 80 a year in a savings acount is going to help me in my retirement, I have ALL of Iraqs WMD's in my house! Just another classic moment by one of the worst pres. this country has had.


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## Plainsman

Ej4prmc

Ya, that isn't going to do much for retirement is it. Do you think that if this small amount looked good for a few years that the people would want more, and 20 percent would begin to help? I am beyond where this helps me at all, so I have no dog in the fight. Still, I think it would help my children, or grandchildren if it was more than 4 percent. Your absolutely right the 4 percent is insignificant. Would you like it better if it was more? Does the ability to leave it to your children look good to you. I guess I am asking for gut feelings here so for the moment lets talk together and forget the citations. What do you not like about it? Is it simply that it is hard to trust wall street. I understand that. Perhaps US savings bonds would be acceptable. What could Bush do that would make it acceptable? I think a change of a type that would let you leave this account to your survivors would be good.

Rather than argue about this how about some ideas that would make it acceptable to people.


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## Gohon

> Another Bush scam! I make about 32,000 a year with OT. I just figured out what 4% of my soc. sec. is and it came to 78 dollars a year. If Mr shrub thinks that 80 a year in a savings acount is going to help me in my retirement, I have ALL of Iraqs WMD's in my house! Just another classic moment by one of the worst pres. this country has had.


You're missing the point. Just assuming your earnings remain the same for a 30 year period, that $78 totals out to $2,340. You are earning probable less than 2% on it right now in Federal bonds which gains you about $773 for the 30 year span. Now if you invested it even in a modest area where you got 5% compounded you would easily turn that $2,340 into about $4,500. In addition you would be able to leave it to your kids should something happen to you. Your earnings are going to go up and your amount to invest is going to go up. No it isn't a scam, it is common sense.


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## Militant_Tiger

> You're missing the point. Just assuming your earnings remain the same for a 30 year period, that $78 totals out to $2,340. You are earning probable less than 2% on it right now in Federal bonds which gains you about $773 for the 30 year span. Now if you invested it even in a modest area where you got 5% compounded you would easily turn that $2,340 into about $4,500. In addition you would be able to leave it to your kids should something happen to you. Your earnings are going to go up and your amount to invest is going to go up. No it isn't a scam, it is common sense.


Sounds great, the only problem is that you will be seeing less of that money than you do under the current system. The proposed changes lowers returns.


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## Plainsman

> The proposed changes lowers returns.


Where did you read that? How can 5% interst earn you less than 2% interst?


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## Gohon

> Sounds great, the only problem is that you will be seeing less of that money than you do under the current system. The proposed changes lowers returns.


Well, you said earlier you only post facts........ so where are the facts you base this on.


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## Militant_Tiger

I had to search long and hard to find a site that you might not reject, I think I've found it.

http://www.epinet.org/content.cfm/issue ... privfaq#62

Then again, I'm sure you'll find some way to reject it. It seems that you refuse to accept anything unless it comes from Limbaugh or Bush.


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## Gohon

Militant_Tiger said:


> I had to search long and hard to find a site that you might not reject, I think I've found it.
> 
> http://www.epinet.org/content.cfm/issue ... privfaq#62
> 
> Then again, I'm sure you'll find some way to reject it. It seems that you refuse to accept anything unless it comes from Limbaugh or Bush.


What is your problem? Can't you ever make a post without being a jackass. Whether I reject or accept the link depends on it's content and accuracy. Something you might well learn to do.


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## Militant_Tiger

I have only posted one link that was ever completely accepted, written by Limbaugh. Everything else has been rejected or at the least not believed not because it was a source of misinformation but because it had opposing views. It is considerably easier to make people think a site is not credible than it is to argue the information on it.


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## Plainsman

I read portions, skipped through others, and am not done yet. It is amazing that supposedly learned people could make the simple mistakes they have. For example it doesn't cost anything to roll over your savings if you do it with the right financial company. I will roll mine into Trivent (New Name For Lutheran Brotherhood financial). I can withdraw up to ten percent without penalty. After six years I can take out all without penalty if I want. So they are very misleading there.

They also state it will cost Trillions to convert, but give no plausible explanation why. As a matter of fact they give little reason behind their many questionable facts.

They say that social security has life insurance that takes care of the family for life. Not true. The spouse receives a reduced benefit, children have nothing after 18.

They ask the question, will workers be forced to invest in companies who's activities they find morally repugnant. Then they bring up tobacco. Many people who invest today, choose only small companies, top 500 companies etc. Most have no idea what companies they are invested in. Much like during the debate when Bush was told he owned stocks in a lumber company. So when they bring this up they are attempting to make it objectionable to people. There is only one reason for that, bias. If they can't stick with facts they relinquish their credibility.

They also state "Deep Social Security benefit cuts will accompany any privatization effort.
Any privatization? One percent, two percent, three, four would create deep cuts???? How could reducing the percent paid in by a few percent create "deep cuts". If four percent less goes into social security how does that compute to deep cuts?

They look credible on the surface, but they make statements that are not correct. Accidental, or do they have an agenda? I don't know about all the things they are talking about, but the ones I do understand they have stated falsely.

What has everyone else found on this site. I have never paid this much attention to social security before so I am sure I missed some points in this article.

Did anyone else find reason to trust or distrust this article?


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## ej4prmc

Gohon said:


> Another Bush scam! I make about 32,000 a year with OT. I just figured out what 4% of my soc. sec. is and it came to 78 dollars a year. If Mr shrub thinks that 80 a year in a savings acount is going to help me in my retirement, I have ALL of Iraqs WMD's in my house! Just another classic moment by one of the worst pres. this country has had.
> 
> 
> 
> You're missing the point. Just assuming your earnings remain the same for a 30 year period, that $78 totals out to $2,340. You are earning probable less than 2% on it right now in Federal bonds which gains you about $773 for the 30 year span. Now if you invested it even in a modest area where you got 5% compounded you would easily turn that $2,340 into about $4,500. In addition you would be able to leave it to your kids should something happen to you. Your earnings are going to go up and your amount to invest is going to go up. No it isn't a scam, it is common sense.
Click to expand...

OK Mr Gohon,
Lets say I give you your numbers(I have less than 30 yrs to retirement) and now we multi. 12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month. I think there is something wrong here! I don't think this plan will help me.


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## Militant_Tiger

Plainsman why don't you write them, I am interested as well.


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## ej4prmc

I have no children, just one damn good dog.


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## Plainsman

Sorry MT I don't understand, them what?

I guess it is getting late for this old geezer. You mean write to them?


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## Militant_Tiger

Plainsman said:


> Sorry MT I don't understand, them what?
> 
> I guess it is getting late for this old geezer. You mean write to them?


Yeah I find it hard to believe that they would post something with such mistakes as you have stated, shoot the an e-mail and see if they have any answers to your quandries.


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## Plainsman

MT

I'll do that tomorrow when the brain goes back on duty.


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## IAHunter

I made just over $52,000 last year as a factory worker (thank god for this bad economy, I would hate to see how much over time I would have to work if things took off). If we consider the 4% (I believe it is supposed to be 4 percentage points, but I could be wrong) this comes to $128 for this year. Over the next 30 years, when I'm finally allowed to retire, the government won't have one penny, but in a VOLUNTARY account in a very secure bond market that is earning a pitiful 3% it would be $312. Of course, since I've been working since I was 16 and have been paying into the system for twenty years, all past money would, naturally, be increasing in an exponential way. Of course, since I care about my retirement and have taken the time to buy the needed educational material, with my own money, to understand investing I would have the money put into higher risk funds. This is where the detractors have it wrong, or are shorting themselves in offering a good idea. Have specific funds set up. Government bonds, municipal bonds, corporate bonds, REITs, Wilshire 5000 index, S&P 500 index, NYSE Big Blue. Very safe to risky. Each one is on an automatic investment (like spyders) with no outside person picking what stock or bond is put onto the fund, this way no private individual would become wealthy off controlling the funds. Each year you can send in a card to dictate what percentage of your "portfolio" is put in each risk catagory. If no card is sent in, a standard formula is followed with alot af risk at the early ages when market volatility is higher but have a higher over-time return. To a low risk later to protect the money from the market volatility. To cover the short comings at the beginning, the top cap needs to be raised to something in the range of salaries of $125,000. A means test also needs to be started. If you have a net worth of $1,000,000 or more with a yearly income of $35,000/$70,000 you will not recieve SS. Just the savings from those two ideas would pay for a MUCH larger privatization.

Why do I think this would work? Take a look at Peru. Their entire Social Security system is private with a 95% participation rate. It is a WORKING system, tell me why it won't work in this country?

Personally, I've been investing in my retirement since I was 19 becuase even back then they were talking about SS going broke. I have savings, bonds, stocks, precious metals, rentals, and I'm starting a business this year. Trust a bunch of faceless bureaucrats to take care of you? Fight against changing the system becuase your afriad "someone" might make money off it? Don't like it just becuase President Bush suggested it? Afraid everyone is going to lose ALL their money, even though there won't be anything there if the government is allowed it? Go ahead, I'll hire you to mow my lawn so you have rent money when you retire.

IaHunter


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## Gohon

> OK Mr Gohon, Lets say I give you your numbers(I have less than 30 yrs to retirement) and now we multi. 12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month. I think there is something wrong here! I don't think this plan will help me.


Do the same math with your numbers and you get $10.73. That's a 100% increase with the private system on the amount you used. Remember you won't remain at $32,000 a year for the next 18 years and there are those that are paying in more to use at the cap level. Your investment amount will increase every year and the extra 30, 40, 50 dollars a month more may not seem important to you now but it will then. But, if you are satisfied with things as they are then remember it is optional.


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## Gohon

> What has everyone else found on this site. I have never paid this much attention to social security before so I am sure I missed some points in this article. Did anyone else find reason to trust or distrust this article?


I'm still reading the site but as soon as I saw the address I knew what it was. It is a Liberal Think Tank run by Lawrence Mishel who lately has been spending a lot of time on Capital Hill testifying before committees in favor of labor Unions. His last appearance that I saw was to testify that the President was the cause of the recession and his tax cuts would not stimulate the economy. Personally I put him in the same class as Rush Limbaugh, all showboat and no substance, another guy I pay no attention to despite one persons BS comment. Nevertheless I am reading the site to see what he has to say. So far I see a lot of "probable will", "probable won't", "most likely will" and "most likely won't" comments with no supporting base except his own opinion.


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## IAHunter

Sorry, I forgot about the employers contribution (don't you love government speak, it no longer is a tax, but a "contribution") so every thing is doubled. $256 per year, $624 in 30 years. And yes, I do believe that the plan is to start small and increase the amount being put in over time.

And remember......PERU, PERU, PERU!!!

IaHunter


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## Plainsman

MT

My brain was on vacation last night. I am sure if I go to that sight it will just turn into a whiz match. If you need to know that what I say is true, go straight to the sources. Below is the site for Thrivent Financial and the US government social security administrations site. No go between, right from the horses mouth.

http://www.thrivent.com/

http://www.ssa.gov/

Start a roth as soon as you can MT, even if it is minimum. You will be a rich man someday. I hope you enjoy the Thrivent site.


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## Plainsman

MT

Lets keep this on the form for everyone to see. I am sorry you will not accept these sites because one is Christian and the other government.

The Thrivent site doesn't talk about social security and don't get into politics at all. They are simply financial, and there you will find you can roll over savings from work at no expense. They have absolutely nothing to say about political things or social security.

As for government I think most would be liberal. After all if they are government people would they not support the side that promotes big government? Anyway, the official social security site is not going to lie to you. They are the people that determine your benefits. One day you will deal with them, you have no choice.

Why would I write to the other site? You know I will not agree with them or they with me. I don't need another argument.


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## ej4prmc

Gohon said:


> OK Mr Gohon, Lets say I give you your numbers(I have less than 30 yrs to retirement) and now we multi. 12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month. I think there is something wrong here! I don't think this plan will help me.
> 
> 
> 
> Do the same math with your numbers and you get $10.73. That's a 100% increase with the private system on the amount you used. Remember you won't remain at $32,000 a year for the next 18 years and there are those that are paying in more to use at the cap level. Your investment amount will increase every year and the extra 30, 40, 50 dollars a month more may not seem important to you now but it will then. But, if you are satisfied with things as they are then remember it is optional.
Click to expand...

What do you mean you get 10.73. I re-did the math and it still comes to 20.8 dollars per check. I get nothing from them, hell I can pan handle 20 a month


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## Gohon

ej4prmc said:


> Gohon said:
> 
> 
> 
> 
> 
> 
> OK Mr Gohon, Lets say I give you your numbers(I have less than 30 yrs to retirement) and now we multi. 12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month. I think there is something wrong here! I don't think this plan will help me.
> 
> 
> 
> Do the same math with your numbers and you get $10.73. That's a 100% increase with the private system on the amount you used. Remember you won't remain at $32,000 a year for the next 18 years and there are those that are paying in more to use at the cap level. Your investment amount will increase every year and the extra 30, 40, 50 dollars a month more may not seem important to you now but it will then. But, if you are satisfied with things as they are then remember it is optional.
> 
> What do you mean you get 10.73. I re-did the math and it still comes to 20.8 dollars per check. I get nothing from them, hell I can pan handle 20 a month
> 
> Click to expand...
Click to expand...

12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month at 5% private investment.

12 month X 18 years of retirement = 216 payment periods. $2340 div. by 216 checks equals 10.73 dollars a month at present 2% with with government investment.

By all means grab yourself a tin cup if you wish. Doubt you will feel that brave at retirement.


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## ej4prmc

Gohon said:


> ej4prmc said:
> 
> 
> 
> 
> 
> Gohon said:
> 
> 
> 
> 
> 
> 
> OK Mr Gohon, Lets say I give you your numbers(I have less than 30 yrs to retirement) and now we multi. 12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month. I think there is something wrong here! I don't think this plan will help me.
> 
> 
> 
> Do the same math with your numbers and you get $10.73. That's a 100% increase with the private system on the amount you used. Remember you won't remain at $32,000 a year for the next 18 years and there are those that are paying in more to use at the cap level. Your investment amount will increase every year and the extra 30, 40, 50 dollars a month more may not seem important to you now but it will then. But, if you are satisfied with things as they are then remember it is optional.
> 
> What do you mean you get 10.73. I re-did the math and it still comes to 20.8 dollars per check. I get nothing from them, hell I can pan handle 20 a month
> 
> Click to expand...
> 
> 12 month X 18 years of retirement = 216 payment periods. 4500$ div. by 216 checks equals 20.8 dollars a month at 5% private investment.
> 
> 12 month X 18 years of retirement = 216 payment periods. $2340 div. by 216 checks equals 10.73 dollars a month at present 2% with with government investment.
> 
> By all means grab yourself a tin cup if you wish. Doubt you will feel that brave at retirement.
> 
> Click to expand...
Click to expand...

I had already given you your interest and now you want to add on more? why? as your budd GWB said "that's funny math"


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## Gohon

ej4prmc said:


> I had already given you your interest and now you want to add on more? why? as your budd GWB said "that's funny math"


You said "I just figured out what 4% of my soc. sec. is and it came to 78 dollars a year." I gave you an example using your 78 dollars a year for a 30 year period using 2% government or 5% private investment returns. Do you think your social security payment at retirement is only the money you and your employer paid into the system......... The only thing funny here is you don't understand how the system works.


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## Bobm

Social Security reform threatened by elitist liberals 
Star Parker (archive)

March 22, 2005 | Print | Send

President Bush's Social Security initiative has gotten off to a shaky start. However, polls indicate that voters are warming up to the idea of personal retirement accounts. It's time for the Bush administration to start making crystal clear the core principles that distinguish its approach on Social Security reform from that of Democrats.

Whereas Bush is selling his reform under the theme of an "ownership society," I would call the Democratic alternative the "plantation society." The "plantation society" is characterized by a wealthy class of owners who want to limit the choices, opportunities and freedom of working-class Americans.

According to public record, one of every three members of the Senate and one out of every four members of the House are millionaires. Despite popular stereotypes of Republicans as the party of the rich and Democrats as the party of the working class, the wealthiest member of the Senate (John Kerry of Massachusetts) and the wealthiest member of the House (Jane Harman of California) are both Democrats. Of the top six wealthiest senators, five are Democrats.

The ownership society has certainly found its way into Congress. But the wealthy Democratic owner class shows little interest in spreading the wealth and opportunity around.

House Democratic leader Nancy Pelosi of California, worth $16.3 million, is an appropriate spokesperson for the plantation caucus. This past week she stood at a press conference with other Democratic leaders stating uncompromising opposition to personal retirement accounts. The Democrats' message: no negotiation on Social Security until "privatization is off the table."

Certainly, Pelosi seems quite comfortable in her ability to manage her own millions. However, the thought of working Americans retaining a few thousand dollars each year of their own earnings to invest in a personal retirement account is so outrageous to her she won't even discuss it. The argument that a private account, ultra-conservatively managed, could at least double the retirement income produced by the current Social Security system doesn't seem to interest Pelosi. Nor does the idea that this would be privately accumulated and owned wealth.

When America's political class debated emancipating slaves, an issue that dampened enthusiasm for the idea was the thought that these slaves could simply walk off the plantation and integrate into the nation and live as free people.

The owner/masters of today's Democratic plantation reject all attempts to roll back government and give working Americans more choice and freedom. The response is the same whether it's personal retirement accounts or choosing where to send your kid to school. Anything reducing government control gets rejected.

Ironically, most personal-retirement-account proposals simply make this option available. But even allowing the option gives too much freedom to working Americans for the Democrats. Apparently, we're all so dumb that not only can't we manage our own money, but we shouldn't even be given a voluntary option to do it.

My elderly mom serves coffee in a local convenience store to earn a few dollars to supplement the pittance she gets from Social Security and the few extra hundred dollars per month she started getting after my dad passed away. He worked all his life. If he could have put all the money he paid in Social Security taxes into a retirement investment account over all those same years, my mom would be in a different situation today.

However, Pelosi wouldn't have wanted my dad to have the option to keep and invest his own money. I'm sure she would have thought that he wasn't as smart and clever as she is and shouldn't be allowed to manage his own money.

The black poverty rate today is double the national average. Black-household wealth is a fourth of the national average. Blacks suffer double jeopardy as a result of the work over the last half-century of welfare-state liberals like Pelosi.

First, Social Security payroll taxes take away the few extra dollars that low-income workers could have otherwise retained to build wealth.

Second, and perhaps even worse, welfare-state liberals have educated a whole generation of blacks that they can't take care of themselves. Skills in areas such as money management may be in deficit today. But they are in deficit because they weren't learned, and they weren't learned because of hanging on the government plantation. When do we let these folks off this plantation so they can finally start learning the essential skills for improving their lives?

Social Security reform, with a crucial central component of personal retirement accounts, is being threatened by elitist Democratic liberals. They preside over a government plantation over which they do not want to relinquish control. It's time to let the slaves free. Transforming taxes into ownership is an important way to do it.

Star Parker is president of the Coalition on Urban Renewal and Education and author of the newly released book 'Uncle Sam's Plantation.'


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## indsport

Just a note: Not saying everything is reported correctly, but see today's article 
http://www.usatoday.com/money/perfi/gen ... over_x.htm


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## Bobm

Indsport, this article is good evidence that there is no real economic education going on in our schools.

Invest regularly in index funds, look at the money in at least a ten year span, never invest in the your employers stock, and you will do very well. Its really that simple. But unfortunately few people understand this.


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## indsport

the points I found interesting in the article tended to support my argument that even with a reduced number of index funds (like the federal TSP) and similiar to what is proposed for private SS accounts, a majority of people fail to make the right decisions. Second, the I found it interesting that some of the studies presented appear to show that state and county pension programs that opted out of social security aren't doing well either, particularly when the employee made the investment decisions. I agree, education is the key, but I have seen little information from either political party that would indicate, that any plan for private accounts does not include that crucial function.


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## Bobm

The plan as I understand it is to have a professionally managed ,mutual fund so bubba does have to make any decisions.

That would work well, I believe.


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## Bobm

This lady gets it, too bad the politicians still want to say there no problem...

The Social Security and Medicare trustees have just issued their annual report on the state of these programs, and the picture is not pretty.

The combined unfunded liability, the shortfall of projected funds available to meet projected obligations, of the two programs is around $75 trillion. For perspective, the Gross National Product is $10 trillion.

We need to recognize that these two massive government programs can only continue in their current form if taxpayers agree to increases in taxes and/or cuts in benefits.

The welfare-state chickens that we hatched in 20th-century America are coming home to roost in the 21st century. If we don't start getting realistic about what we're dealing with, our children and grandchildren will not be living in a country of dreams, but a nation trying to survive.

Recently, Congress passed bankruptcy-reform legislation that will place more direct personal responsibility on every citizen waving around a credit card. *We need to get equally tough with our national credit card _ the power of Congress to tax and spend.* :beer:

Bankruptcy recognizes that in order to fix the problems you have created, you've got to start doing things differently.

*One good first step for doing things differently is to acknowledge that Social Security and Medicare are welfare programs.* They transfer tax dollars from one set of citizens to another with the objective of achieving some social end. Once we realize that these programs are welfare programs, we'll understand that they have the same inherent flaws that characterize all programs that we explicitly call welfare.

*It's a fact that people change their behavior when government takes over aspects of their lives for which they had once been responsible*. Most people wouldn't go to work if they felt the government was going to pay their bills.

When Congress passed sweeping welfare reform in 1996, politicians finally recognized that government was making huge expenditures to welfare recipients that encouraged them to perpetuate the very problems that they needed to solve. Welfare had stepped well over the line from being a social safety net to becoming a social engineering program. Lives were destroyed rather than helped.

Our welfare system needs more improvement, but the 1996 reforms have been successful. By scaling back government and helping individuals get realistic about the challenges in their lives, millions have gotten off the dole and gone to work. Confused and disenfranchised former welfare recipients are now building real and productive lives for themselves.

Similarly, through Social Security and Medicare, Americans have turned large aspects of their lives over to government control. If the massive tax transfers that fund these programs remained in the hands of private citizens, the power of individual choice and the creativity of the marketplace would deliver the same quality products that free markets and personal control deliver to all other aspects of our lives.

In the case of Medicare, which, according to the trustees' report, is in worse shape than Social Security, *one-size-fits-all government central planning has hurt every participant in the health-care marketplace _ consumers, doctors and hospitals. *
Just as in the case of inner-city welfare recipients, the government takeover of private lives in health care has displaced reality with political illusions. And illusions are not a good starting point for prudent personal decision-making and planning.

Social Security and Medicare are afloat in red ink because these programs are the products of government central planning. More of the same will not solve the problems. *As Bill Clinton once said, we need to "end welfare as we know it." * :beer: 
This is one place where we all can actually learn something from rap culture. The theme of rappers is "keeping it real." The brutal honesty of rap is what shocks and offends so many of us. We may not like what the rappers are saying, but they can't be accused of masking who they are or what they are about. Honesty helps make clear what is wrong with our country, and this provokes action and change.

In this sense, we need a little more rap culture in Washington. Americans don't need word games. They need truth so they can get on with the business of solving their problems.

When I worked to help get welfare reform passed, it wasn't a hard sell to talk about getting inner-city welfare recipients off the dole. We have a tougher political challenge with Social Security and Medicare, because now we're talking about getting Main Street America off the dole.

If we want to fix the problems, we're going to have to start getting real.

Star Parker is president of the Coalition on Urban Renewal and Education and author of the newly released book 'Uncle Sam's Plantation.'


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## Militant_Tiger

Bob I will restate my point just one more time. The idea that social security will be in this massive debt at some time in the far away future is bunk. We do not know what will happen in 40 years time. We do not know the trends of the future, there is no way to predict if it will go into debt or not. Secondly, the idea that privatization of social security will save the program from debt is also a lie. Privatization of a portion or of the majority of the system will not do a damned thing to help keep it out of debt. This is simply another example of the conservatives finding a problem, and comming up with a solution that doesn't fix the problem at all. There indeed do need to be some minor changes in the system, this is not one of them.


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## Bobm

> The idea that social security will be in this massive debt at some time in the far away future is bunk. We do not know what will happen in 40 years time. We do not know the trends of the future, there is no way to predict if it will go into debt or not.


Yes it is, and its simple to see to anyone willing to look at it objectively.
Many economic experts on both sides of the political divide freely admit the problem exists the debate is what to do about it



> Secondly, the idea that privatization of social security will save the program from debt is also a lie.


No one ever said it is, they are saying that it will provide a greater rate of return to the young people like you if they allow them to do it.


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## Militant_Tiger

What do you mean no one ever said privatization would save social security? Bush has stated just that multiple times.

http://www.philly.com/mld/inquirer/11246353.htm

And so has whitehouse.gov

http://www.whitehouse.gov/infocus/social-security/



> Yes it is, and its simple to see to anyone willing to look at it objectively. Many economic experts on both sides of the political divide freely admit the problem exists the debate is what to do about it


As stated, changes must be made but there is no need for the magnitude change as is being proposed.


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## Bobm

Wrongo kid! read the whitehouse site again, they are recommending private accounts to make SS a "better deal" they don't claim them to be a solution to the funding problem.

Why anyone your age would be against this reform is histerical. Unless you don't want a better return on your retirement taxes  . Which is fine because they do say private accounts are voluntary ( again read the site), so you don't have to elect to go that route if you don't want to.


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## Militant_Tiger

Wrongo yourself there Bob. Do a quick ctrl + f and type in save on the site.



> By 2042, when workers in their mid-20s begin to retire, the system will be bankrupt - unless we act now to save it.


Again, I am not against change. I am just against as radical of a change as this proposal.


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## racer66

Real radical change, optional plan with a very limited percentage.


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## Bobm

MT, (I mean no sarcasm) look at your quote and explain to me how the fact that the system will be bankrupt and the private accounts statement you made a little earlier are linked. The site does not say that private accounts would save the system its says that they would give a better rate of return for young people of which you are one, and that is undeniable. What I don't understand is why anyone would be agaisnt having control of a portion of their own money. I'll never understand the resistance to this...


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## Plainsman

Your problem Bobm is that you're a logical man. A logical man will never understand the resistance to Bush's social security plan. 
There are explanations I guess. Partisanship would be number one I think although they will never admit it. Timid people who don't want to invest, but don't want friends and relatives to either, because they may retire in better financial shape than them. I guess I would label them jealous chickens. Perhaps it is the very young that are against it. When they get a little older 22, 23, 24 I notice they have a little more guts, and a little more acceptance of this plan. We all know that our fellow senior citizens get to be a little more chicken in their old age also. Perhaps a little jealousy again. They look at the next generation that has a better chance of better retirement and are a little envious. Perhaps a lot envious.


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## Militant_Tiger

Bobm said:


> MT, (I mean no sarcasm) look at your quote and explain to me how the fact that the system will be bankrupt and the private accounts statement you made a little earlier are linked. The site does not say that private accounts would save the system its says that they would give a better rate of return for young people of which you are one, and that is undeniable. What I don't understand is why anyone would be agaisnt having control of a portion of their own money. I'll never understand the resistance to this...


Lets play the link game. They suggest that the system will be broke in 2042. Their solution is private accounts. Gee I did it in one.

Plainsman, great job talking down to half the nation and yet explaining nothing at the same time. You have become an expert at this.


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## Gohon

Bobm what some will do is take anything out of context that they can in an attempt to prove their point. It doesn't matter if you are correct, they don't care. The link you posted says,

"Fixing Social Security permanently requires a candid review of the options.
Over the years, many people from both parties have offered suggestions such as limiting benefits for wealthy retirees, indexing benefits to prices, instead of wages; increasing the retirement age; or changing the benefit formula to create disincentives for early retirement. All of these options are on the table". These are the options the President talks about to *SAVE* social security.

It goes on to say,

"As we fix Social Security, we must make it a better deal for our younger workers by allowing them to put part of their payroll taxes in personal retirement accounts".

It doesn't say private accounts will save social security, but as you point out it will make social security better. Your wasting your time.....


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## Bobm

Goodnight guys its past my bedtime :lol:


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## Plainsman

> Plainsman, great job talking down to half the nation and yet explaining nothing at the same time. You have become an expert at this.


There is no need to explain, everyone currently debating this has read the plan. The plan as I see it simply improves the financial status of future retirees (people who are your age now). What I did was try to explain why people are against it. I am sure if the democrats put this plan forward you would be all for it. Not just you, many people would be for it if the democrats put this pan forward. Although then many republicans would be against it.

I have noticed the people about thirty years old are the age most for the plan. At each end of the spectrum (your age and my age) people are simply frightened. I base this on talking to people who were honest enough to tell me it frightens them. But then most think all their money is going into the stock market. Ignorance is rampant. I don't know how people can be 55 years old and not know what is happening in the world, or how a plan that will affect their life works. I can understand people your age not keeping up with these things. They normally reflect their parents or teachers.


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## Militant_Tiger

Plainsman this is not a black and white matter as you would like to make it. You are not necessarily in the right at all. Why am I and some 58% of the country against privatization on any scale? Because it leaves people open to failure with no money to support themselves in their old age. Who will pay for these people? Why the workers will, with welfare. Social security was initiated because people didn't know how to manage their money and ended up going broke. The same is true now, most people simply cannot manage that money better than the government. Why 57% of those 30-49 want to shoot themselves in the foot by giving themselves lower returns nearly regardless of what money they might make in their own stocks is beyond me.

Gohon, the main proposal if not the proposal that Bush has put on the table is the privatization of accounts. I have not heard him speak about any of those other points thus far.


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## Plainsman

> Social security was initiated because people didn't know how to manage their money and ended up going broke. The same is true now, most people simply cannot manage that money better than the government.


Most people can't manage their money as well as government?????? That's a scary thought. The government is horrendous, if people can't do better then we must be a nation of dummies.

Also, MT Bobm has explained this, I have explained this, and other people have explained that the people will not invest their money the government will. So you see the government is still in charge of the money and that portion of your argument is without merit.

I still say the resistance is partisanship, and fear. Fright born of ignorance (not stupidity). The ignorance is born of disinterest because the plan is very simple to understand.

At my age this doesn't affect me so why do I debate? Because my children are smart enought to take advantage of it, and I want what is best for them. Some liberals are afraid that big business will make money off it. I doubt it, but at the same time I would hope so. A good economy is good for all.


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## Gohon

> Some liberals are afraid that big business will make money off it.


I think their real fear is the fact for the first time the money (at least a portion) will be in a lock box and they can't get their hands on it.


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## indsport

On another note, re: private accounts. If you invested $2000 in an S & P 500 index fund, similiar to what is being proposed by all sides as a good investment vehicle, and amount, in November 1998, what do you suppose your investment would be worth today in 2005 (excluding dividends)?

Answer: $2000

The S & P closed today (4/11) at roughly the same level as it was in November 1998.

The reason I am posting this is the simple fact that any stock market, or stocks, go up and down over time. Investing in the market, even the index funds, is a long term proposition with a time horizon of 10 years or more. Yes, the market has returned 10% per year over the long haul, but there are also long periods of stagnant or down earnings. In the case of the $2000 investment, if someone 49 years old had private SS accounts in that year, they would have lost money in the market over the last 6+ years due to inflation.


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