Social Security

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Many Americans have paid into FICA for years, and are now receiving a Social Security check every month -- and then finding that they are getting
taxed on 85% of the money they paid to the federal government to put away.
Immigrants moved into this country and at 65 got Social Security. The government gave that to them although they never paid a dime into it.
Senators and Congress men and women do not pay into Social Security and, of course, they do not collect from it.
You see, Social Security benefits were not suitable for persons of their rare elevation in society. They felt they should have a special plan for
themselves. So, many years ago they voted in their own benefit plan.
In more recent years, no congress person has felt the need to change it. After all, it is a great plan.
For all practical purposes their plan works like this: when they retire, they continue to draw the same pay until they die, except it may increase
from time to time for cost of living adjustments.
For example: Former Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00 ( That's Seven Million,Eight-Hundred, Thousand Dollars), with their wives drawing $275,000.00 during the last years of their lives.
This is calculated on an average life span for each. Their cost for this excellent plan is $00.00. Nada! Zilch!
This little perk they voted for themselves is free to them. The rest of America picks up the tab for this plan.
The funds for this fine retirement plan come directly from the General Funds, our tax dollars at work!
From our own Social Security Plan, which many Americans and myself pay (or have paid) into
every payday until we retire (which amount is matched by our employer) we can expect to get an average $1,000 per month after retirement. Or, in
other words, we would have to collect our average of $1, 000 monthly benefits for 68 years and one month to equal Senator Bill Bradley's
benefits!
Social Security could be very good if only one small change were made. That change would be to jerk the Golden Fleece Retirement Plan from under
the Senators and Congressmen. Put them into the Social Security plan with the rest of us ... then sit back and watch how fast they would fix it.

 

I just couldn't believe what you were writing - it was too outrageous. Paticularly your numbers for Senator Byrd since he'll probably fall over any second now so they'd have to be either supposing he'd live to be 150 or his payments would be enormous.

So, a quick search and... if it's too outrageous to be true, it probably is:

http://www.snopes.com/inboxer/outrage/pensions.htm
And from another site:

http://www.yourcongress.com/ViewArticle.asp?article_id=1717

 

People are more likely to believe in UFO's than they are to believe that they will recieve Social Security benefits.

Whether Elios' thing is truth or myth, it needs reform.

 

No social security system is ever going to be perfect. At least there's something there to be fixed.

 

Social security is doomed to die. Anyone currently working and counting on it for retirement is foolish. One of the telling signs is each and every tax bill that has been passed over the past few years. Each tax bill has been written to make it more and more advantageous for corporations and individuals to invest in their own retirement accounts. The most recent one passed by Bush actually offers tax credits to people making under $50,000 for contributions to their retirement plans. Congress and the past two administrations are telling people, without really telling them that you better start saving some of your nickels. Eventually the worlds oldest living Ponzi scheme will crash.

 

I'm not so sure about the death of S.S. I spoke a couple of years ago with Norm Stein, a pretty well regarded pension expert and GAO consulatant and according to him at that time the worst case scenario would result in a reduction of benefits paid for a certain number of years and then the benefits would go back up to the normal levels -- and that's if you don't tinker with SS at all.

Other economists are saying it's a phony crisis(the article and book are a few years old but still in line with what a number of voices are saying):

http://www.cepr.net/columns/weisbrot/social_security_the_phony_crisis.htm

I suspect that there is danger of S.S. benefits being reduced in the future or some increases in the taxes but I really think that a lot of the predictions of doom are probably overblown. Old people are great voters and they care about social security. Scaring them and making them think you will protect their S.S. benefits is a good way to get a lot of votes.

Personally, I'm against privitization of SS because I don't want the government becoming the single largest owner of private industry in the world over night. I also don't think personal investment accounts replacing SS are feasible. I also don't want to see the risk premium destroyed by flooding the market with SS money but that's selfish of me I admit.

I also am not particularly fond of the idea of raising the FICA cap since this would make SS politically unstable.

Of course, I think the purported idea underlying SS is a farce. We should just be honest and create a means test for social security benefits. Which sort of contradicts what I just said about raising the FICA tax by making making the system less politically stable but, *shrug, I'm not always consistent I guess.