Social Security Reform

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Aldeth,

I think your plan is unfair as you are asking people to pay for a benefit that they have absolutely no chance of recovering. I would agree that it is a workable plan if it wasn't for the fact that I don't think that you will find enough money to save the program that way, and the negative effect that it would have on the economy would further diminish the base of the payments (the middle class). IMO it is just far too little, far too late.

Let me ask you one thing in regards to your statement of "The government is essentially changing the rules of the game after the game is over." Who is the government? I thought that we the people were the government. I still stand by my statement of "What is sad is that they effectively did choose to keep paying into it. Again, time for a little personal responsibility, after all, this is a "Gov't of the People", and we can't force the majority to do anything they don't agree to."

As far as my views on social responsibility, yes we have a social responsibility, but the gov'ts responsibility is only to those whose situation isn't directly connected to bad choices they made. If a child is born with defects, I believe that we as a society have a responsibility to assist said person to live a relatively good life. However, if a person chooses to skip high school, smoke hippie lettuce, get fired from every job they get, and have babies they can't support, they should have said babies taken away and given to those who can and will provide for them and they should starve to death on the streets unless a private charity chooses to take them in. No entity that can take assets by force should be empowered to take money to provide for such a person. A little farther toward white on the gray scale is a person who chose not to take personal responsibility for their retirement. Again they should be held responsible for their choice, and no gov't money should go to them. It is unreasonable to take these benefits from those already receiving them, but those still working who planed to depend upon SS should have to expect to work later in life to get these benefits, and they should expect less that those who went before them, just as gen X and gen Y have to expect to have a lower level of living than their parents did. Life isn't fair, and we spend far too much time and effort trying to make it so.

Now as far as private charities, anything that people want to give money to is fair game. For example, above a discus not using gov't money for drug addicts, however, if someone wants to give money to charities that help drug addicts live better lives, that is great, and I support and admire their decision to give this charity. I have given charity to groups that funnel some money to these types of groups in the past, though I am more discriminating in my choices today.

 

I think we just have to agree to disagree. I think it is unfair to greatly reduce the benefit for people who have paid in so much, while you see continuing as investing money into a sinking ship. Both points have merit. I think we agree that there are, however, only four possible choices here (barring disenfranchising millions of Americans, which would cause the Republicans to lose every presidential election until the baby boomers die off, so I'm writing that off as a possibility).

1. Reduce the benefits for those new comers to SS.

2. Raise the SS tax.

3. Reduce federal spending in other programs to pay for the differnce between money in and money out.

4. Increase the borrowing done by the government to make up the difference (which is only a temporary solution as it needs to be piad back eventually).

Completely privatizing SS is not going to happen. So these are the four options, chose one or some combination of the four. What's best in your opinion?

 

In the short term I agree with you, we can't just wipe it out. My plan?

1. Raise the age to receive benefits to 85, unless the person qualifies for disability, under much stricter terms than the current disability rules.

2. Initiate the Fair Tax Act with a 10 year 1% increase to pay off the SS entitlement.

3. Start shutting down welfare programs and diverting the funds for these programs to SS with a 10 moratorium (maximum, could be shorter if SS requirements drop).

4. Immediately cut foreign aid by 50% and divert these funds to SS (with the same restriction is #3 above).

5. Immediately allow all individuals to take 5% of what they pay in and place it in a 401k like retirement account. Every year from here on, increase the amount of this percentage by 5% each year until 100% of their money is invested per their direction. Additionally, over the next 20 years the amount of withholding would be dropped by 1/20th of the original amount until in the last year it would be 0, at which time people would be allowed to transfer the money they have saved into whatever account they would like, or even cash it out.

Do I think it will happen? Hell no, but then people rarely choose to do the right thing, especially if it costs them personally.

 

Darkwolf, I'm shocked that I actually like some of the points you bring up. Sure, there's some that I disagree with, but overall this plan is more right than wrong. In short:

1. 85 is not realistic. The average life expectancy in the U.S. is 78. While this would certainly curtail spending, it is nearly equivalent to whiping the system out entirely, as only 15% of Americans live to age 85. This is literally spending money on something you are unlikely to ever receive a return on.

2. It seems like that based on point #5, you would have to initiate this for 20 years, not 10, but otherwise, OK.

3. I'm not sure which welfare programs we can cut, seeing as how SS is the biggest welfare program of them all. Currently, 4.4% of the nation's GDP is tied up in SS payments. There simply aren't enough other programs with anywhere near this kind of cash for this to work.

4. Same as #3. Believe it or not, the amount of money we spend on foreign aid, well extensive, is actually considerably LESS than we are currently spending on SS.

5. Here's the best idea you've had on this topic! This could work, and it certainly provides a long-term solution to the problem, defined here as people 40 or younger.

Here are some other points you may or may not be aware of.

A. Currently SS takes in more money than it pays out. However, this is shifting every year, with less surplus every year. The predicted "break even" point, or the last year where we will take in more than we pay out under the curret system is 2019.

B. Assuming that the government pays back the money it has removed from the Trust Fund (and that's a really big assumption, as it's money that's already been spent), the surplus that we have built up over the years will cover the shortfall until 2052. However, I don't think that 2052 date is at all realistic, because I don't see where the government is going to come up with that money to pay off these IOUs.

Assuming that we can get all the way out to 2052, that's where your point #5 stands the strongest. By 2052, nearly all of the baby boomers will be long gone. Heck the last year of the baby boom was 1964, so by 2052, we're only looking at paying benefits to people aged 88 or older. Sure, life expectancy is increasing, but I can't imagine that 50 years from now it's going to increase by more than about 10 years.

 

Aldeth,

You make some good points, but let me ask you this, have you ever looked up the life expectancy of black males in the US? *In 1992 it was 65. The age for benefits to kick in for those born after 1955 is at least 66 + 2 months and increases to 67 for those born after 1960, so we are already disenfranchising and entire segment of our population. I will admit to being a bit flippant in regards to the 85 number, but 70 or 75 is not an unrealistic age for the majority of Americans to keep working until, especially if they are unwilling to provide for their own retirement. Additionally, as I stated, if they are truly unable to work, they can apply for a disability exemption.

* Source: http://www-unix.oit.umass.edu/~kastor/walking-steel-95/ws-black-health.html

 

Let's crunch some numbers here - and yes - I actually came up with a plan to where SS is self-sustaining.

I looked up what the average person's salary was elegible for SS taxation in each of the last 40 years. Note, that the average salary over this time was probably higher, because as of 2003, if you made anything more than $89K, your SS tax was still based on if you made $89K. S0...........

When you look at the numbers, the average American had $28,100 in SS taxable income in 2003. Back in 1963, the number was considerably lower - $8,873.

Let's say Average Joe B. Boomer (who turns 65 this year and wants to retire) entered the workforce in 1963, and worked for exactly the average salary every year for 40 years. In total, his total SS taxable income in that time was $669,010. Given the 6.2% tax rate, that means Joe paid $41,478 into SS in his lifetime. This makes him eligible for the full benefit of $1825 per month.

Given what he has paid in, he will receive a full return on his investment after just 23 months of receiving SS. in other words, in less than 2 years, the dollar value of what he has received, exceeds the dollar value of what he paid into it.

But that of course, is short-sighted, as it doesn't account for inflation over those years. In adjusted 2003 dollars, his $41,478 worth of payments is actually the equivalent of $135,302 in today's dollars. Using this number, he gets a full return on his investment in 74 months, or just over 6 years.

To me, the solution is simple. The age at which you can retire is equal to the (average life expectancy) - number of years until you get out of it what you paid into it. So, given that today's average life expectancy is 78, and the average break even point is 6 years, you would become eligible for SS (currently) at age 72.

That kind of sucks, as the current age to receive benefits is 65. We would have to adjust this number every year as life expectancy increases, so 20 years from now, you might have to wait until you're 76 to receive the benefits. This way, it's self-sustaining, you don't need to charge anyone any more, and as Darkwolf correctly points out, most people at age 65 are healthy enough to continue working. So no, we don't need to go all the way up to Darkwolf's recommend 85, but increasing it to 72 for now is the way to go.

 

Aldeth!

SWEET! I like it, you should send that to your Senator and Representantive! Also, I know you don't like them, but try emailing that to Boortz, Hannity, and Limbaugh. If it got read on the air it might start a ground roots campaign.

That is a really good analysis. Sorry, not being flippant (just cynical!), but I don't think it has a snowballs chance in hell, but it really is a good analysis!

 

What would that look like? Bill #XXXXX Sponsored by Aldeth the Foppish Idiot, D-MD, Darkwolf, R-(I'm guessing here, but I'll bet I'm in the ballpark)-GA.

 

L-OK

I am not sure the Libertarian Party has a letter in reality, so it might be I-OK. I really don't want to have to be associated any more with the R's than the fact that I usualy seem to end up voting for them as the lessor of two bad choices. Not have both major parties backing it would probably kill the bill though. Maybe you could get Inhofe.

ROTFLMAO, I kill myself!

 

OK? As in Oklahoma? I thought you said you were in the middle of the Bible Belt! I have no idea about the religous preferences of the people of Oklahoma, but I consider the Bible Belt to include areas that are east of the Mississippi River - Georgia, Alabama, Mississipi, Louisiana, North and South Carolina, etc.

 

Well, just as an unscientific study, I used 1990 census numbers to calculate the number of churches (numbers only included Catholic, Baptist and Methodist churches) per capita and the top 10 are as follows:

1 Mississippi
2 West Virginia
3 Alabama
4 Arkansas
5 Kentucky
6 Tennessee
7 North Carolina
8 South Carolina
9 Oklahoma
10 Georgia

I also did a quick poll of the surrounding people, all of them thought that OK would be in the to 10 on this list, and were very suprised to find out we were 9th.

I guess we are just one of the holes in the belt.

5 out of 6 (you only missed with Louisiana) is a hell of a batting average Aldeth, I am impressed!

 

And I was going to put Kentucky and Tennessee on there, but I wasn't sure! West Virginia is obvious - I should have thought of that one. I admit I was surprised by Oklahoma, and I wouldn't have put Arkansas in my top 10 either, but I think that might be the "east of the Mississippi" pre-supposition I used.

 

I am personally looking forward to being sick, homeless, malnourished, destitute and oppressed. It can only be God's will.