What will happen to Social Security? Possible preview...
 

Social Security Formula Weighed

Bush Plan to Cut Promised Benefits

By Jonathan Weisman and Mike Allen
Washington Post Staff Writers
Tuesday, January 4, 2005; Page A01

The Bush administration has signaled that it will propose changing the formula that sets initial Social Security benefit levels, cutting promised benefits by nearly a third in the coming decades, according to several Republicans close to the White House.


Under the proposal, the first-year benefits for retirees would be calculated using inflation rates rather than the rise in wages over a worker's lifetime. Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century. The White House hopes that some, if not all, of those benefit cuts would be made up by gains in newly created personal investment accounts that would harness returns on stocks and bonds.

Entire story:

http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html?nav=rss_politics

Re: What will happen to Social Security? Possible preview...
 

What will happen to Social Security?


Needs Testing


I will never see a dime. Social Security will become a welfare plan for the underemployed retired.

Social Security was not intended upon inception to be a retirement program for the masses - it was intended to help those who needed it most like the disabled and the elderly who truely needed it. Most of us really should be planning for our retirement so that WE DON'T need social security benefits at all.

Isn't that obvious to anyone else? Sheesh...and I'm considered a liberal on this board.

No. Benefits for the disabled and elderly all became part of the program much later. The Social Security TRUST was intended as a source of retirement income for ALL workers who have contributed to the TRUST fund.

There is no "needs test" for SS benefits. Never has been. If and when they apply needs testing to the Social Security TRUST, a fundamental tenet of the program will have been breached. Imagine if they apply a "needs test" to your 401K. Maybe the government will feel they can do more of thier "good work" with a part of your 401K savings because there are so many others who have less than you do. Get the general idea?

The "problem" with Social Security came about when the payments were indexed to workers wages. Before this, congress had to vote, sometimes yearly, on increasing the benefit. At the time the indexing was done, this tying SS to wages was better than tying it to inflation, since wages weren't keeping up with inflation...

Wages are now increasing faster than inflation...

The reality is...Social Security was a Ponzai (pyramid) scheme and it has now finally come undone. Something has to be done to fix it. President Bush will fix it by moving to a style Chilean system.

The big problem with ss began when Nixon comingeld the ss monies with the general funds. Our fearless leaders have been spending it ever since to buy votes for themselves.

That happened under Johnson

The Big prob sith SS happened when people started living longer than anticipated. Politicans are scared to fix it. I don't think it'll get tweaked now, but the door will have been opened. I bet Bush will package tax reform and SS for political purposes.

Damn those people living longer! Some one, start passing the smokes, beer and donuts around.

LOL Bush isn't even on his 2nd term and he is already shafting everyone on illegals and SS.

Hey if you don't want it send it to me. The monkey will make sure that next time a Enron wants to shaft your 401k they plunder your SS too!

Name a company the Bush brothers haven't run into the ground? They have ruined every financial business venture they ever tried. Might as well have Michael Jackson as his economical advisor.

From a guy who lied about 911, wmd, ubl people trust him with your retirement?

He cut your life span down with stell cem research and now will make sure your broke and unhealthy someday.

He'll attempt to reform SS, and fail. Gosh, I about busted a gut this morning, pouring coffee when a radio announcer appeared to maintain a straight face while reporting that Mr. Bush has told Congress he hopes for their cooperation in doing "big things." Big Things? Well I guess that's almost like a two-syllable word. Pretty catchy phrase. "Big Things." I nearly spilled the coffee pot.

So anyway, he'll try and fail. And hopefully, folks will notice the raping that's about to occur.

Last night I was chatting with someone who was in CA while electric power deregulation was being touted by the industry players who were hoping to make the money. Ultimately, it passed, was tried, and bilked millions of people out of billions if not trillions of dollars. The arguments against it were, of course, correct. But complex. What the voters ultimately concluded because they did not want to think about the consequences, was that deregulation will bring "competition" and "free market" forces.

Guys, water and electricity are utilities. And we already own (we the taxpayer built) the means of production and transmission and distribution. So, its a proposal to buy our electricity from us, and then turn around and sell it back to us at a profit.

Didn't mean to hijack this thread, but some things are so simple that I'm usually frustrated and disappointed at how dense some folks are. SS reform falls into this category. I'm not stupid or naive. Are you?

The solution is so easy. As people live longer on average, adjust the earliest age you can get benefits to match. Retiring at 65 is appropriate when you've worked in a steel mill or coal mine your whole life and can't work a day past 65. Nowadays, people have much cushier jobs and can work well past 65.

Gotta go--there is a horde of selfish AARP activists outside waiting to lynch me. :)

All we want is the ability to put our SS money into a 401K type account where we will actually earn some interest. Hell they do have guaranteed accounts in there for those who fear risk. Last I heard we were getting .01xx % return on our SS "donations" I'll take 3.5% guaranteed anyday! The argument that Wall Street will make money on this is pointless. Ofcourse they will just because of the volume increase, big whoop. You don't want a better and effective retirement plan out of spite that others will also prosper? What kind of logic is that.

Be real, the dems don't want this because it will remove their "slush spending fund". Also it is ideologically opposed to their "let Government take care of you" agenda.

All that aside I really don't see how you can argue that Bush's plan will not lead to better and larger retirement funds for those involved. Now wasn't that the whole point in the first place?

isn't that caalled a Roth IRA or a 401k or a 403b or something like that:confused:

Exactly, only the limits will be raised and your money will go there INSTEAD of to the Government "SSI trust fund" for you.

Lendaddy, one of the problems with a 401K plan is that, like Social Security you are partnered with the Federal Government. Since they have provided the tax deferrment on your 401K plan, they can also revoke it at any time. It has already been discussed, but never made it out of committee. Can you imagine if the Feds decide that anyone with a net worth of more than X dollars is no longer "entitled" to the tax benefits of the 401K plan they funded for twenty years?

Think it can't happen? Wait until the entitlements have doubled and the economy tanks a bit.

P.S. I know it's frustrating, but don't go grabbing for smokes!

LOL,

A guy who couldn't find oil in Texas and went broke is going to fix SS.

Moses, I see what you're saying but the government will always have the ability to tax us and our retirement funds regarless of how they are structured. I like my idea because it gets their filthy friggin mitts off my money right away via a proven program.

No smokey for me, been too long now:)

It's all very simple...take your SS contribution and figure the compounded interest (use the interest rate from 30 year T Bills) from a working liftime of contributiions and see what you come up with....and at the end you have something to leave your heirs...

Now figure out how much SS is going to give you...

You will find that your own account far out performs the governments.....

The government can not afford to give up the revenue it gets from the SS fund...the only time this will change is when the government has a negative cash flow....then it will say so sorry...

I believe that if you put a dime into the system...you should be able to get the benfits due you....you PAID for them....so you should get them...no ands ifs or butts....

I agree. I have a 401K myself. The fact that taking my money away from me was even discussed in Washington makes me nuts. Whoever proposed that deserves a first class ass-whippin'.

The only safe money is after tax private investment, but I suspect they'll find a way to get thier mitts on that too.

There are 3 "new" successful SS type systems to use as model countries already out there.

The Dems vendatta against anything Bush does is about trying to weaken the Reps for the next Pres race. Also the last thing the Dems need is for every lower wage person to instantly become capitalists. Bush is about lowering your dependance on Big Gov't. The Dems need you to be dependant on Big Gov't. Anyone who thinks that Pres Reagan's economic reforms were bad is not looking for logic on SS reform. The inability to understand the prob that SS is in today, and tomorrow, will revert those people to aggressive one liner answers as a means of defense. Those that think that Reagan's reforms were good and are still trashing SS reform are still pissed off that Bush is Pres and will trash any logic to SS reform.

I imagine the Dems would all jump on board of reform if it was somehow modeled like the Calif power deregulation which allowed increases in oil to be absorbed only by the power companies, but didn't allow rates to reflect increasing costs. The politicians controlled the rates customers were charged. That deregulation was a system only a politician would love, as long as it was functionally alive.

I don't think Bush will play "uniter" calling for group hugs on SS reform. The election of Bush proved that his firm policy positions were a success for reelection. I imagine any Congressional Dem opposed to his tax and SS reforms will pay for it at their next election like those Dem election losers have already paid by being unemployed.. The Dems are trying to remake their party. They're in disarray right now and Bush knows they're scared. It's a win win for the Reps no matter what happens. Actually Hillary's game will be interesting to watch. She may run against Jeb Bush so her hormones are scrambled right now watching Jeb get world attention. There is probably a master Rep plan in motion right now to obtain Jeb's political attraction to the whole US. The new DNC chairman will hold the Dems future in his hands. Good Luck.

Well, you know how I hate to argue with Lendaddy but here the temptation is just too great, nicotine or no nicotine. Yes, the gubmint has robbed these funds away, otherwise the SS system would not only be solvent, but could also have a safe and healthy investment return. Unfortunately for conservatives (including ones who are no longer slaves to cigarettes), it has been Republican presidents and Republican Congresses lately who have conducted the robberies.

Letting everyone divert their retirement funds to 401K accounts would be very nice, but millions of working people are about to retire who have relied on our (remember, the government is not "them," it is "us". At least it is for those who care and pay attention. Those who do not, should also not make comments) promise of a retirement income. The diversion idea leaves those people destitute.

We are in a real pickle with this issue, and many others. And mostly because this nation has been sold a BILL OF GOODS. That bill of goods is the notion that we should get all we want and need, without having to pay. The folks selling you this notion are suggesting it's all someone else's fault (gubmint, mostly). In reality, we want services that make sense for the government to provide and administer, and when we pool our money for this and pay attention to how it is administered, it is not expensive and you get a lot for your tax dough. YOU ALREADY GET A LOT FOR YOUR TAX DOUGH. You just have been fooled into thinking that all gubmint activity is wasteful, but that your right to drive on decent roads and drink safe water are guaranteed, and FREE. They're not.

We can fix SS any way we want. And we can afford it. Heck, Dubya's tax cut alone is greater than the SS deficit if you extend both out 10-20-30 years. You just want to *****. Because somebody has convinced you that you should get more for less.

And the folks hoping (with success) that you'll buy into this expectation that you should get more for less......are the companies deliberately trying to destroy as much of gubmint as possible so that regulations will fall and they can make more money.

And the delicious thing about convincing Americans that the SS hole is too deep to fill, is that when those funds become privatized, capital will be cheaper. Supply will increase sharply, as though we were a nation of savers (like the Japanese have been for several decades, putting them in or near first place), and price (interest rates) will fall. But those same folks don't really want us to save. That's potential commerce lying dormant. They want you to SPEND SPEND SPEND. Like every day was the day before Christmas.

Now, smoke if you have them (and if you want them, which you don't.)

I'm not going to argue about Republicans spending my SS too, ofcourse they have. It's too easy, heck it's almost encouraged.

Now the rest of what you say makes little sense to me. What is the point, that no matter what we are not good stewards of our own money so we might as well let Sam do it?

Also, regarding whether SS can be fixed well ofcourse it can be made solvent again. But that's not the point, the point is that it's a horrible system. The return is pathetic because it's not really invested, but rather spent by Sam. So make it solvent all you want, it still sucks as a vehicle for achieving its proposed goal: To provide for the our citizens in their retirement. Now it is good/excellent vehicle for achieving its hidden goal: Provide a seemingly bottomless pit of funds for Sam to spend on his pet programs.

Again I ask you, what is the goal of this system?

Oh yea, regarding those nearing retirement...... We're not going to abandon them. Hell, we could give em extra if you want. The point is we will rid ourselves of a system returning .01xx% and replace it with one of 3%-10%. How long do you figure it would take to make up those single generation loses? I'm 31 and they can keep my ****!

You're wise for 31. I had no idea I was so thoroughly your superior. Or senior. Or something. I'm 47.

You know, I don't disagree with you. A more free-market system works for me, too. One of the advantages of a gubmint-run system is that stupid people are not allowed to squander the money. I work with a dull-witted woman who lost all her retirement savings to an investment shyster. And it's not so much my bleeding heart as it is my bleeding pocketbook. Someone will have to take care of these people, and it will cost you and me. You're too smart to pretend that we can just let their fate befall them. I hope I don't have to explain why in terms of crime rate, social pressure, yadda yadda. It would be naive and limp to pretend that we can just avoid those costs.

And the rate of return you're talking about.....do you suppose that the gubmint spending that money, rather than investing it, might have had something to do with that? Can you imagine a healthy, safe rate of return if a government managed those funds properly? Can you also imagine investing in social goods like alternative energy sources or promising medical services/drugs? In addition to the healthy rate of return?

I can. Yes, there is something wrong with gubmint. They've not been supervised closely enough. Our elected officials are having a ball at our expense.

And now that I know about our age difference, Sonny.....If I hear about you smoking cigarettes again I'm gonna come over there and kick your ass. Remember, I'm Superman.

lol, always had my birthday on my profile. In fact I've caught some business for my big mouth and attitude (despite my age) here before. That's ok, I imagine there are some things I will appreciate/understand more with age. The smoking ain't gonna happen, I'll be damned if I have to go through this crap again. I'm half way home now and I ain't turnin back.

Regarding the hapless I know of no "risky" 401K style funds, and Im would imagine they'll be even less so if this became an actual practice. I don't see that as a real problem.

And no I don't want the government investing my funds!!!!!!! I can just imagine the BS that would happen there. The private system works, lets use it.

I forget the lingo for the pork budget attachments?
Anyway, lets say that the Dems had 2,000 attachments in 2002. The Reps have at least doubled that number. I don't know what the total $ figure is? That's a noticable amt of pork for the red states at the cost to the blue states. I think "unfortunately" is an oxymoron the way the Reps read it.

The blue states get robbed by the red states in Gov't handouts as a routine timeless matter due to the present tax system.. meaning the higher income payers live in the blue states, not to mention the greater blue state populations. The Congressional red state Reps are gonna get screwed by Bush again when they're forced to support his policies. Will the blue state Dem's support tax reform even thou their states will get a "fairer" deal, meaning more of their tax money returned, I don't think so?

fwiw,
I just found out that two more countries instituted a flat tax, Romania & Georgia. That makes a total of 8, so far. Two more election opposition parties are promising a flat tax if elected.

The game is world competition and economic efficency imo. Bush stole the Reps pork already. Now he'll force red state mid America to raise their taxes to carry their own weight instead of feeding off the blue states. Afaik, raising taxes leads to political death? Congressional Reps gotta hate Bush imo.

"Alex, What is a 'Rider' ?"