toldailytopic: What do you think of the Social Security program?

[PureX]

That's not actually true.

The Social Security System, from the very first day, has been a pipe from current workers to current beneficiaries. That is, the people who are working and paying the tax now pay the benefits to the people who are collecting now. That's how it was supposed to work. There was never a personal account that you save money to. It's a defined benefit system.

I understand, and didn't mean to imply that there was such an individual fund.

There is, however, a trust fund, which is basically just a place where the government receives funds paid in before paying them out again. At times, when the fund is running a surplus, the fund grows. When this happens, the trust fund buys up US Treasury securities (by law they must invest in US-federal-backed securities), thus lending the money to the general budget, which is perhaps the safest form of investment in the world, in that it is guaranteed by the US government. These amounts have always been repaid, and this type of lending is done in lieu of federal lending to private individuals, organizations, and foreign governments, thus saving money for us overall.

Sadly, however, this is not what happened. What happened instead is that the government took the money and squandered it, and invested none of it. So now the fund contains nothing but useless IOU's from one government agency to another, none of which have any actual value.

The reason we're looking at a possible shortfall is simply that we've got more people retiring and living longer, so they need more funds to receive the promised benefits. This should be a simple matter of adjusting our planning accordingly, however there are a large number of Congresspeople, mostly Republicans, who won't consider raising taxes, due to the no tax pledge and similar thinking. Thus we're in a bit of a bind legislatively, and unless we elect some more reasonable representatives, we're just going to wait for the system to go bust.

In 1983, Greenspan raised the social security payroll tax to create a deficit to cover the current (and easily foreseeable) shortfall that would occur when the baby-boomers began to retire, and on into 2037. But as soon as the extra funds began to come in, Ronald Reagan used them to cover the cost of his tax breaks for the wealthy. And since he got away with it, every president since him has continued to use these S.S. deficits as their own slush fund. Needless to say, the money never accrued, and so now when the expected increase in retirees is occurring, the extra money intended to cover them is not there - money THEY have been paying in for the last 30 years.

Here's a real scary article explaining what happened.

 

[rexlunae]

We do like we do now.

So, you're proposing a catch-up generation. A generation that both pays retiree benefits to current retirees and also pays for their own retirement up front. That seems unfair and impractical, and will produce an enormous drag on the economy for a long long time.

Or they can just ignore it, much like corporations today just end peoples retirement benefits when they no longer wish to pay them.

Happens everyday.

The problem with corporate pensions is that the depend on the ongoing solvency of the corporation. Therefore there's an argument that those who relied on pensions did so knowingly. The United States is not insolvent, and you're proposing a tactical default on our obligations, not due to insolvency, but due to the selfishness and greed of present taxpayers and the desire to eliminate a program that is basically a sound concept.

Why do such a thing?

 

[PureX]

Privatize it, the government can hardly do anything efficiently.

I don't see any possible way of privatizing social security. The system depends on it being a national social imperative, and on the collection and distribution of payroll taxation. No private entity has the authority to perform such a task. And anything short of a national imperative is not going to be a functional equivalent to social security.

 

[Angel4Truth]

So, you're proposing a catch-up generation. A generation that both pays retiree benefits to current retirees and also pays for their own retirement up front. That seems unfair and impractical, and will produce an enormous drag on the economy for a long long time.

You like to put words into peoples mouths dont you. Ive made no proposal at all, ive merely stated what is happening now.

The problem with corporate pensions is that the depend on the ongoing solvency of the corporation. Therefore there's an argument that those who relied on pensions did so knowingly. The United States is not insolvent, and you're proposing a tactical default on our obligations, not due to insolvency, but due to the selfishness and greed of present taxpayers and the desire to eliminate a program that is basically a sound concept.

Why do such a thing?

There are loads of companies that are not insolvent at all who just cut out and cut off peoples pensions. Where have you been hiding out to not know about it?

GM is doing it right now to their salaried employees while our government is hailing their recovery and solvency and bragging about all the money they are making.

 

[rexlunae]

You like to put words into peoples mouths dont you. Ive made no proposal at all, ive merely stated what is happening now.

Well, what else could you mean by continuing what we're doing now. If we continue to pay benefits to people who are retired now and also have to build up our own retirement accounts, we'll have a generation that pays twice. There's no way around that.

There are loads of companies that are not insolvent at all who just cut out and cut off peoples pensions. Where have you been hiding out to not know about it?

GM is doing it right now to their salaried employees while our government is hailing their recovery and solvency and bragging about all the money they are making.

And do you remember GM going through bankruptcy? Because the were insolvent. That's exactly what I'm talking about. They didn't have the money to pay their obligations, so they had them severed in bankruptcy court. And that's the hazard of relying on private corporate pensions.

 

[Angel4Truth]

And do you remember GM going through bankruptcy? It was because the were insolvent. That's exactly what I'm talking about. They didn't have the money to pay their obligations, so they had them severed in bankruptcy court. And that's the hazard of relying on private corporate pensions.

They weren't insolvent they were greedy and wanted out from under lawsuits and pension requirements. Their corporate heads were robbing the company blind and they wanted to cripple the union. They were so broke that their old CEO walked away with millions and millions.

Anyway, what does that have to do with what they are doing now?

They are robbing their employees now because they dont want to fund their pension obligations because of their greed.

Ill wait till you actually respond to what i said instead of diverting the topic.

 

[PureX]

And do you remember GM going through bankruptcy? It was because the were insolvent. That's exactly what I'm talking about. They didn't have the money to pay their obligations, so they had them severed in bankruptcy court. And that's the hazard of relying on private corporate pensions.

And on relying on private enterprise, period.

But now you're speaking against the holiest of holy republican mantras - that the god of private enterprise resolves all problems, while the government creates them all (which in this case, it did). When in reality the only problem private enterprise is ever trying to solve is how to make more money for owners and investors. Which is in fact at the heart of a great many of our current problems (though it only tangentially helped to cause this one).

 

[rexlunae]

I understand, and didn't mean to imply that there was such an individual fund.

:thumb:

Sadly, however, this is not what happened. What happened instead is that the government took the money and squandered it, and invested none of it. So now the fund contains nothing but useless IOU's from one government agency to another, none of which have any actual value.

I don't think that's a fair assessment. What should the government do with a surplus? They aren't legally allowed to put it into higher-risk private securities, as those aren't guaranteed by the government. But if we just sit on the trust fund surplus, it would be the national equivalent of stuffing the cash into our mattress. So, the trust fund invests in US Treasure securities, which, despite the recent political wrangling, have never been defaulted upon.

The real dirty trick is in using this sort of lending to cover deficits, or in some cases to make a deficit look like a surplus. We should change that, and treat loans made from social security exactly like loans made from other sources. But the practice of lending money from the trust fund to the treasury only makes sense.

In 1983, Greenspan raised the social security payroll tax to create a deficit to cover the current (and easily foreseeable) shortfall that would occur when the baby-boomers began to retire, and on into 2037. But as soon as the extra funds began to come in, Ronald Reagan used them to cover the cost of his tax breaks for the wealthy. And since he got away with it, every president since him has continued to use these S.S. deficits as their own slush fund. Needless to say, the money never accrued, and so now when the expected increase in retirees is occurring, the extra money intended to cover them is not there - money THEY have been paying in for the last 30 years.

It's not true that the money never accrued. That would be a default on the federal debt, which has still never happened. Now, if we fail to service our debts, we'll potentially default, but I don't think we'll ultimately do that.

 

[PureX]

:thumb:



I don't think that's a fair assessment. What should the government do with a surplus? They aren't legally allowed to put it into higher-risk private securities, as those aren't guaranteed by the government. But if we just sit on the trust fund surplus, it would be the national equivalent of stuffing the cash into our mattress. So, the trust fund invests in US Treasure securities, which, despite the recent political wrangling, have never been defaulted upon.

But that isn't what they did. They "lent" it to themselves, and never paid it back. And the IOUs they left are completely worthless, as they cannot be redeemed. Please read the article.

The real dirty trick is in using this sort of lending to cover deficits, or in some cases to make a deficit look like a surplus. We should change that, and treat loans made from social security exactly like loans made from other sources. But the practice of lending money from the trust fund to the treasury only makes sense.

It's not true that the money never accrued. That would be a default on the federal debt, which has still never happened. Now, if we fail to service our debts, we'll potentially default, but I don't think we'll ultimately do that.

The Treasury is already in default, as it's perpetually in debt. The money that went to the treasury as a "loan" is now gone, and the Treasury has nothing to pay it back with. And no one else will buy this debt because no one else believes the Treasury will ever be good for it. In effect, the government lent the money to itself, and blew it. So all we have is a bunch of OIUs from a government that has no money. It would have been FAR better to put the money under a mattress.

 

[drbrumley]

Social Security was a great idea that worked very well for a long time. And it would still be working just fine, except that the politicians decided to rob the till. They promised to pay it all back, but didn't, and when they got away with it the first time, of course robbed it again, and again, and again.

Now they tell us that it's costing us too much money, so they want us to pay more, and pay longer, or stop it all together. But they don't tell us that the reason it's out of money is because they stole it all. And like the morons that most of us are, we believe their lies and excuses. We believe that it's our fault that we can't have a national retirement or public aid system that works for everyone. Just like we believe that we can't have a national health care system that works for everyone. That, too, is a lie.

The bottom line is this: we instituted a national retirement/public aid program because we didn't want to treat each other like some third-world backwater plutocracy that allows their old people and children and the sick to die in the streets and live under bridges. And we knew that this is what would happen if we were not willing to set up some way of making sure everyone got the basic necessities of life.

Many of us can work and save and take care of ourselves. But some of us can't. Misfortune happens. People get old and feeble, they get sick, they go crazy, they suffer setbacks that they can't overcome. So we set up a program that has everyone who is working pay into it, and when they become unable to work, they can then draw money out of it to live on. And because most of us can pay in, and some of us will die before collecting any of that money back, there was enough of a surplus to cover those few who couldn't pay in but still needed help.

It was a great idea, and it worked really well for many years.

But unfortunately, as I said, the politicians decided to steal the money, and like idiots we allowed them to. So now the fund is going broke, and they are lying to us about why. They are telling us that it's because we think we deserve help that we don't deserve. They're telling us that it's because too many of us are getting old and not dying. They're telling us that our neighbors are cheating the system, and stealing from us. But the truth is that they stole the money, themselves. They squandered it and promised to pay it back and they never did.

All we need to do to fix the system is force the government to pay back what they stole, and then keep them from robbing the till again. But of course they squandered the money, so paying the money back means that WE have to replace what they stole. And of course we don't like having to do that. The sad truth is that a lot of us really don't care if our neighbors die in the streets or live under bridges, anymore. We are no longer the kind of people and society that we once were, when we instituted the Social Security program. So there are a lot of us, now, who want to go along with the politician's lies because we don't want to have to pay back all the money they stole, and we think we'll be able to take care of ourselves without it. So screw everyone else. We're an "every man for himself" kind of place, now days.

We once were a great nation, and a great and compassionate people. Now we're just a bunch of losers, liars, thieves, and selfish morons.



It's a very sad story, really.

relative link here

It's considered theft.

 

[drbrumley]

Don't steal, the government hates competition....

 

[Frank Ernest]

we all can't belong to a union
and
we all can't work for the government

If Obama gets reelected, you probably will.

 

[ccfromsc]

Social Security

Social Security

Ok. I will preface this by asking a question: Does anyone here know what social security was designed and created for?

Does anyone?

Cause when you find that answer then you will realize that what people use if for today and think it is for are NOT what social security was founded for!

Next point it is a ponzi scheme. IF anyone out here did it they would be in prison!

 

[drbrumley]

Ok. I will preface this by asking a question: Does anyone here know what social security was designed and created for?

Does anyone?

Cause when you find that answer then you will realize that what people use if for today and think it is for are NOT what social security was founded for!

Next point it is a ponzi scheme. IF anyone out here did it they would be in prison!

Yes, and it was wrong then. Don't steal, the government hates competition.

 

[PureX]

Ok. I will preface this by asking a question: Does anyone here know what social security was designed and created for?

Does anyone?

Cause when you find that answer then you will realize that what people use if for today and think it is for are NOT what social security was founded for!

Why does this matter? The point is that it's a good program that provides a lot of very necessary help for a lot of people. The problem isn't with the program. The problem is with the politicians stealing the money.

Next point it is a ponzi scheme. IF anyone out here did it they would be in prison!

No, it's really not a Ponzi scheme. And the people who should be in prison are Ronald Reagan, George H. Bush, Bill Clinton, and George W. Bush, because they're the guys who deliberately stole the money (borrowed it and never paid it back). The program would be working just fine had they it not been for their despicable behavior. The only reason I left Obama out is that there is now no money left for him to steal, and the jig is up.

 

[HisServant]

Social Security SHOULD have been designed as a reasonable savings program for citizens with a percentage of interest income from the massive account going to pay for those that never paid in.

Say SS guarantees a 4% on my payments into the system.. I have no issue with the Government taking 1% off the top to pay for people less fortunate than me.

 

[GuySmiley]

Social security as it exists today is basically a ponzi scheme. In short a ponzi scheme is an operation that pays returns to its investors from their own money or the money paid by subsequent investors instead from profit earned by the individual worker or company running the operation. If any individual of company ran such a scheme they would pay heavy fines or end up in the slammer. The government has been pulling one over on us for years!

Social security should be revamped into something where the monies that a person pays into the system, they get back as social security.

This is it. People are in jail right now for doing the same thing.

 

[some other dude]

The only reason I left Obama out is that there is now no money left for him to steal, and the jig is up.

Hmmm...:think:


$2.5 trillion

 

[GuySmiley]

That's not true. A Ponzi scheme involves producing fictitious returns by expanding the investment base, so that a small number of investors can cash out, but the amounts owed can never be paid in full. It fails because the amounts supposedly owed to investors increase while the amount available only increases by adding new investors. There is nothing comparable to that in the Social Security System.

You can point to one similarity or another, but the math that dooms a Ponzi scheme doesn't apply to SS.

If we do that, who pays the benefits that current retirees are owed?

It is a ponzi scheme. Current workers are the investors. SS is doomed by the same thing, the ratio of workers to retired is shrinking.

 

[Delmar]

It might have been a good thing at one time, but now it is broken. It needs a serious overhaul.

Too late!