Social Security "Reform"

[Superman]

I'm reading about the proposal to cut SS benefits. Help me out here. In the context of this proposal please help me to understand the differences, if any, between the following phrases:

*Social Security Reform
*Eliminating Social Security Benefits
*Reneging
*Tax Cuts for Investors

I was skeptical of Dubya's ability to mastermind SS reform, but now I can see his genius. simple. Just stop paying benefits. What an elegant solution. I guess this is ..... "Social Security Reform."

And what if a person does what the gubmint has done? what if a person spends (squanders) the money they would need for retirement? We appear to be ready to let the gubmint get away with this. Do we hold the gubmint to a lesser standard?

Gosh, there's lots more that I don't understand but let's start there.

[Craig 930 RS]

The end result will & should be: No Social Security.
The thing that sucks is that for 24 years.....I've paid into it!

Fund your retirement yourself. 401Ks.
Pensions...also going the way of the dinosaurs.

Lets add this to the fire -

[gaijindabe]

Longer lives, earlier retirements, broader eligibility, increased benifits - something has got to give. If anyone has any realistic ideas, lets hear them.

Don't like evil Bush?? Well, we heard that before. You can skip that part..

[red-beard]

Supe: Have you even read what this is modeled on? The Chilean system?

Go over to the CATO website and take a look.

[red-beard]

http://www.cato.org/dailys/10-30-99.html

[WOODPIE]

Social Security was never intended to allow folks to retire and live it up. It was intended to allow a person to subsist. If that person had other irons in the fire, well, good for him. He could have a good time retired. If not, well, maybe you have enough for food and shelter, and a tip for the gravedigger.

I'm a Boomer, and subsistance is what I expect from my SS account, nothing more. If the money is not there, it is another example of government mismanagement, possibly malfeasance. It is not as though we Boomers suddenly appeared and are throwing everything financially out of whack.

Here's a solution: Maybe half the Boomers, the more patriotic ones, should just trundle off and take one for the team, know what I mean?







Ed

[campbellcj]

I've never expected to get anything back from Social Security. To me it is nothing more than another tax on current income to fund current (over)spending by the gub'mint. One reason we are in such deep doo-doo is that the so-called "trust fund" or "surplus" has long since been squandered and is basically a line-item in our national debt. As the numbers of retirees vs. workers shifts in the coming years, there simply won't be enough cash coming into the system to pay out the benefits.

Anybody counting on SS still being around in its current form after 5-10+ (not sure of our average age here) more presidential terms is kidding his/herself.

[kumma]

Social security is a Pyramid Scheme in the process of crushing those who bought in on the bottom.

You either cut benefits, raise drawing age or you raise the earning potential of the social security money (privte sector iinvestments. Sometimes the answer is right in front of you if you can cut thru the crap thrown around by the 2 parties.

[red-beard]

Social Security reform has been in place in Chile for 25 years. It is extremely successful.

There, all of the money goes into a retirement account. They are run by Private corps, but are heavily government regulated. The rate of return on the accounts in the 25 year period is over 10%/yr.

You fund your own account until it reaches the point where it will support the "basic payout". At that point, you have a few choices. You can stop funding your "pension". You can continue funding and create a better retirement. Or you can start drawing off money. If you hit the magic number at 45, you can "retire". But you don't have to stop working.

The existing retirees were not removed from the system. The Chilean government continued to pay those people out of the general fund.

[Decolliber]

Krugman on SS reform:
http://www.bepress.com/cgi/viewcontent.cgi?article=1048&context=ev

Basically, he says there is no crisis and the privatization proponents are idiots. For example, even though revenues may exceed disbursements in 2018, the trust fund will have a healthy income from interest on its government securities. By implication, there is no need to cut benefits. Reading between the lines, Krugman is saying that the whole ss crisis is a Wall Street scam designed to get them lots of management fees from privatisation.

[legion]

I would much rather have the money to manage myself than to pay in to a Ponzi scheme. My only fear is that some idiot would opt for privitizing their retirement, sink it 100% in to the "next big thing" (think Enron, Global Crossing, etc...), and go crying to the government when they wipe out their retirement.

[Craig 930 RS]

My only fear is that some idiot would opt for privitizing their retirement, sink it 100% in to the "next big thing" (think Enron, Global Crossing, etc...), and go crying to the government when they wipe out their retirement.

Then too damn bad for them. I actually think the gov't options will be pretty conservative. I also think its about damn time people learn to invest - and not let someone else babysit their money!

[Bill Verburg]

One big knock on private costs is the enormous cost of administering a lot of small acounts(unless you are a brokarage that is on the recieving end of those costs) a better choice if this path is taken is to have one large account ala the big state pension systems.

The other knock of course is the tremendous transition cost which will measureable increase the already exhorbitant national debt(unless the gub'mint reneges on it's promises of the last 80yrs) either course will very likely panic investors is US notes.

[Craig 930 RS]

Bottom line?
No right answer here....unfortunately.

[Superman]

I'm swamped, but here are my comments:

Craig is unrealistic. "Too bad for them" has little meaning. Perhaps those people will just die? Even if they (folks who are going to mismanage and lost their returement money) are beggars on the street corner, then there would be TONS of them and if they're not dying of starvation, then we'll be paying a cost to keep them alive. You cannot just say "too bad for them." It CAN'T work, even if we wanted it to, and Americans have always said "yes" when the question is "Are we going to take care of the unfortunate people in our society?" "Too bad for them" is as ignorant as "Nuke the Iraqis and Iranians and North Koreans and....."

Bill is right. This industry (retirement, insurance industries) are all about economies of scale, and are (ideally) best administered by an entity like a government agency. The larger the org, the smaller the administrative costs per account. Sure, everyone's disappointed with gubmint's performance here, but the problem has not been the administering agency. The problem is the guys you elected, and let them go unsupervised. Gubmint also does not collect a profit. Again, this is a perfect example of (even if you want people to 'handle' their own investment decisions) an industry that government is ideally suited to handle. Even if you toss your beer can at the screen, kiss your stock car #3 model, mispronounce some cuss words and insist that we have corporations take administrative costs and profits from our accounts, some gubmint agency is going to have to spend almost as much to regulate and watchdog those corporations as they would have spent just administering investors' decisions.

Krugman is probably right.

I'm short of time, and even if I were not, CATO stuff would be last on my reading list. I've reviewed their "research" a good number of times before. They write the conclusion first, and then go collect the data. If you like CATO, then you still don't know whether you like economics or not, since that's decidedly not what they do there.

Back to my observation. To a genius like Dubya, SS reform is as elegant as reneging on promised benefits. That, my friends, is "privatization." I wish he were just a plain 'ol idiot, instead of what he apparently actually is.

[Joeaksa]

To a genius like Dubya, SS reform is as elegant as reneging on promised benefits. That, my friends, is "privatization." I wish he were just a plain 'ol idiot, instead of what he apparently actually is.

Supe,

Just remember that it was not Bush, but the Democrats who voted to use the SS funds to fund the budget many years ago. Had the fund been left alone after it was started there would be enough money there to keep everyone going for a long time to come...

Any President who took the office in this time period, when the "boomers" start to retire is going to have this problem. How to deal with it is a good question. I am not counting on having any SS funds at my disposal, but if something trickles out it would help considering I have been paying into it for 35+ years.

I would rather have something private so that our future generations can guarantee that they have a retirement. We, unfortunately are screwed but we might be able to keep this from happening again...

JoeA

[Craig 930 RS]

Re-read my reply in the correct context, supe.
--------------------------------------
My "too damn bad for them" comment was a direct reply to this:

"My only fear is that some idiot would opt for privitizing their retirement, sink it 100% in to the "next big thing" (think Enron, Global Crossing, etc...), and go crying to the government when they wipe out their retirement."

So yes, too damn bad for them if they are an idiot. As a privatized individual (assuming this DOES happen), educate yourself and make at least a somewhat informed decision. If not......too damn bad.

At the VERY LEAST, let's see the 'gubmint' offer a list of relatively conservative investment choices -

I am sick of the government playing $ babysitter to US citizens.

So let's hear your solution.

[Superman]

Well, I intended and just failed to include a comment that hoped you would not consider my choice of words a personal attack. I understand my choice of words like "ignorant" are potentially offensive. Don't mean it personally, really.

My point is not so much that I have a plan (although, I do think I see some opportunities and I'm as fond as anyone of giving people independent investment decisions). My point is that we are going to pay for these peoples' mistakes no matter what. It's not a matter if "if" or "whether," it's a matter of "how."

Joe, most folks notice that both sides of the aisle are guilty here. Not you? Are you aware that both houses of Congress have been Republican now for going on 30 years now?

[vash]

i hope the long living geezers are enjoying my contributions. for me, i dont expect to see any.

i dont understand, or remember. which president dipped into the kiddie first? CALPERS is a badboy pension. why cant SS work the same way? explain it like you are talking to a 10 year old, i just dont get financial mumbo jumbo.

[Joeaksa]

Happened right before the time frame you are talking about. The cow is out of the barn now, we cannot change that.

We have to come up with a solution and it is not going to be easy. No matter who is in office it will be a tough nut to handle....

Joe A