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

[some other dude]

Nonsense. Get all them Occupy Wall Street protesters working, tax them at the 90% rate and Bingo! The fund will be full in no time!

 

[Delmar]

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

I was well aware, before Reagan took office, that Social Security was a scam. The fact that people are trying to blame him for it's failure is incredible. Reagan spoke out powerfully against the socialist agenda long before he ran for office.

”Ronald Reagan Speaks Out Against Socialized Medicine"

 

[keypurr]

The failure took place when they decided that Soc Sec is a good place to fund any kind of welfare. When I put in for mine at age 62, there were 70-80 people waiting to be called to the window. 90% of them were under 40 years of age. And they looked a lot healthier than I did. That is whats robbed our retirement money. To many laws, to many lawmakers.

 

[Cracked]

I was well aware, before Reagan took office, that Social Security was a scam. The fact that people are trying to blame him for it's failure is incredible. Reagan spoke out powerfully against the socialist agenda long before he ran for office.

”Ronald Reagan Speaks Out Against Socialized Medicine"

Medicine is already socialized in a very real sense. Either you pay through a tax, or you pay via higher health care costs (both currently). In both instances, the medical costs of the indigent are passed on to everyone else. The question is not whether or not to socialize medicine, the question is just how to implement it in the most just and efficient manner. In this you have no choice, unless you are willing to have hospitals turn people away, which undoubtedly presents a multitude of other dire issues.

 

[Ktoyou]

Social Security, well it will be as long as I live. With all the difference in the Republican party, I doubt they will oust Obama.
For the Democrats, SS is a sacred cow, it would be vetoed in the slightest form of change by O. If the Republicans can win, any vote to abolish it will offend the large cohort, ‘baby boomers,’ who will vote against that party, next term.

I know all the history on SS, as well, policy, as we know, policy tends to move very slow in a straight direction and resists any change in direction. Given this, SS may be trimmed in ten years, yet then those retiring will feel as we all have. Once you pay into it, a long time, you what your money back.

 

[Ktoyou]

The failure took place when they decided that Soc Sec is a good place to fund any kind of welfare. When I put in for mine at age 62, there were 70-80 people waiting to be called to the window. 90% of them were under 40 years of age. And they looked a lot healthier than I did. That is whats robbed our retirement money. To many laws, to many lawmakers.

Yes, and the Fed borrowing against it, is no different than what Hoffa did with loans to the mob.

 

[rexlunae]

It is a ponzi scheme. Current workers are the investors.

Wrong. There's no deposit expansion to pay benefits to people cashing out. If managed correctly, the system can continue to function stably indefinitely. No Ponzi scheme can do that.

SS is doomed by the same thing, the ratio of workers to retired is shrinking.

Which can be managed by raising taxes to make up the difference. It's not a systematic flaw.

 

[rexlunae]

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.

I've read the article, and it paints the wrong picture. The problem is not, to my mind, the lending of SS funds to the treasury. It makes no sense to borrow money from outside investors and pay interest to them, including foreign governments, when we could borrow money from the trust fund and pay interest to ourselves. The problem is that we aren't treating borrowing from SS as deficit spending, a little accounting trick which has been used to make it appear that we're running a surplus when we were actually getting further into debt.

The notion that the special issue debt is worthless is wrong. To date, the treasury has never missed a payment, and while it is possible that will change, it's not considered very likely. Now, it is true that they often make those payments by issuing yet more debt, but nonetheless the debt is being serviced as it should be. And it's also true that there's no more surplus to borrow from, which will compound the budget problems that we've been priming ourselves for for decades. I still think we can meet our obligations, both to outside investors and to our own people, but it will take doing Congressional action such as raising taxes and cutting budgets.

The Treasury is already in default, as it's perpetually in debt.

That's not the definition of default though. We're not in default until we miss a payment, and so far, that hasn't happened.

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.

There is a point where I think we'll agree on. We couldn't afford all the tax cuts for the rich, which we partially justified with the creative accounting that made deficits look like surpluses, or at least look smaller. But I think it would have been really foolish to just sit on a $2.5 trillion pile of cash while we borrow from private parties and foreign governments. If we had done that, we'd have been paying interest on that additional amount to them, while Social Security would have been making nothing. As it is, we're paying interest to ourselves, much like when an individual takes out a 401(k) loan.

Would this situation be any different if the trust fund were buying public-market treasury bonds? I don't think so. We have just as much obligation to pay the special issue debt as we do other forms of debt.

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.

It's not a question of how much money we have or how much we owe. It's a question of how much money we make and what our monthly repayment obligations are.

The article makes a big deal about the fact that the government has no obligation to pay Social Security benefits. But, that's actually always been true. Congress has the authority to scrap the entire program and take possession of all assets, a fact which the 1960 Supreme Court ruling makes only clearer. So whatever we do, we rely on Congress acting reasonably. Unfortunately. And that includes raising taxes to cover the budget shortfall that could prevent us from paying the IOUs--could, but thankfully has not yet, and there's good reason to believe that it won't.

 

[ccfromsc]

Again

Again

Again: Social Security was NOT designed to do what it is doing today! OK? Understand that. I am not arguing for or con or about helping "those in need." The issue to focus on is social security.

Social security was designed to offset the extra added expenses of: water, sewer, electric and phone. You were supposed to have your own retirement and health care. That was the original setup of social security.

Now for PureX: Keep your party line of the democrats. The president that started the taking of all of the social security income to fund the ongoing federal government expenses was LBJ and Democrat. Look it up it is history. Even Clinton took the funds of the social security.

 

[PureX]

Again: Social Security was NOT designed to do what it is doing today! OK? Understand that.

NO ONE CARES!

It is a national retirement/social aid program that is ESSENTIAL to any modern civilized society. And it works very well. Without it millions of old and disabled people would be dying in the streets and living under bridges. YOU may not care about them, but many of the rest of us do care.

The reason that the system is in trouble is because the government mismanaged it, and the extra taxes we already paid to insure it's solvency were "borrowed" and spent (by Reagan, Bush, Clinton, and Bush Jr.). Now it's time for the government to pay the money back, and they don't want to do that (because they squandered the money), so they're trying to convince us that we don't deserve these "entitlements" that we have in fact already paid for.

Part of the republican platform in 2012 is going to be that they will stop giving Social Security to all those who paid into it, and will give it only to people who have no other retirement plan. And the whole point of doing this is to turn the public against Social Security by labeling it a 'your tax dollars are going to stupid people who didn't provide for their own retirement' system. Once they get it labeled it that way, they know they can then work to eliminate it all together, because they have already convinced many of us that the poor are really just lazy parasites and public aid cheats. (And the poor, of course, have little power or influence to fight them.)

It's a sad new world.