Social Security

[bedub1]

Is the worst and stupidest plan on the face of the planet. Anybody that understands 3rd grade math understands it's a horrible fucking idea. If you think social security is a good idea, you are a retard.

[got tonkaed]

at least you thought the argument through.

[bedub1]

If you start working when you are 18, and retire when you are 67 (age for social security), then you have worked 49 years. Now lets pretend that you made the federal minimum wage ($5.85) your entire life...which pretty much classifies you as a loser.

$5.85*40 hours /week = $234/week
52 weeks/year = $12,168/year

12.4% of $12,168 = $1,508.83 towards Social Security/year, or $125.74/month.

If you put that in social security, you'll get less than you put in...you are actually better off burying that 12.4% in the ground and taking the yearly 3-4% loss due to inflation.

OR

You could invest it in the "stock market"...like not a single stock or bond...but the entire fucking market.....diversify you tiny amount of money over every single damn company. By the time you retire, you will have $1,754,631.28. That is the magic of COMPOUND INTEREST.

You know why we have to use Social Security? Cause otherwise, every fucking jackass loser making minimum wage will be a fucking millionaire by the time they retire...and the government can't let that happen.

The government thinks we are too stupid to invest our own money. But I say it's the government that is too stupid to invest my money.

[got tonkaed]

So are you saying that the gov doesnt want to have more high income earners who they would be able to gain increased revenues from? That doesnt sound like the type of thing most people would be thinking in the midst of trillions of dollars of debt, a little extra revenue does sound nice.

Its not hard to understand why people have a hard time swallowing social security as it is today. As you suggest it doesnt take a math wiz to see where problems can lie. However...your alternative solution seems to fall short under pretty simple analysis. Lets take your example the person whose making around 12 grand a year. Would you consider that person in general to be in a position to invest money? I personally would not, as it can be fairly difficult to stay ahead of the game on 12 grand a year.

You also seem to be forgetting a fair amount of your history. Social security arose a specific social context, when people thought it made a fair amount of sense to help provide for the long term prosperity of the country. Yeah when your in the middle of a huge budget crunch with rising entitlements it looks like a disaster, but it really didnt appear to be much of one for quite some time.

I do think its funny though given your sig that you would pick on social security. Its not really a socialist venture, though people would like to claim it is, social welfare programs are not quite one in the same. It certainly isnt a capitalist oriented program, as you suggest because it makes poor business sense for many who can invest their money elsewhere.

So it sort of leaves it a little left of the center, right around where your sig claims you should be.

Instead of going hey social security is messed up (which is a rather simple assertion) what would you do about it, other than scrapping the whole thing (which isnt going to happen)

[gdeangel]

Look at it for what it actually is - a pyramid scheme. On day one, there are hundreds of thousands (we're back in the 30's) of workers with no retirement savings. We take a little bit of the working man's wage, and redistribute it as social security. So that we don't just call it a tax, the government merely acts as the collecting agent and trustee. And so you feel good about it, we tell you that you'll get paid out based on a formula from what gets collected from tomorrow's working men and women.

Of course, because it's not a voluntary pyramid scheme, the formula doesn't have to actually give you a return on your money. It's just a symbolic way of saying that you are a beneficiary of the "trust fund". But now we get to the real problems:

1) The number of working men & women is forecast to decline. I.e., the pyramid will be upside down.

2) The agent has been borrowing from the trust fund, and since its very unlikely that the government will ever run the type of surplus revenue needed to service its debt obligations to the social security trust from actual cash flow, that means the trust fund debt has to be rolled over with more debt. As those of you who may have tried to roll over your credit card debt onto another card, it only works as long as (a) there is another lender out there willing to loan to you, and (b) the rate of interest on that replacement loan is within your means to pay and/or roll over with the principal when the loan comes due.

Al Gore used the word "lockbox" when describing about a social security fix. I don't really know what the hell that meant, but I suspect it was code for holding the funds of the trust rather than loaning them out to the federal government. Not that it matters much because legally noone would have standing to sue for a share of the trust, and I'm sure there would be loopholes to allow the government to borrower against the trust fund assets, from, say, the Chinese, even if the money weren't directly leaving the lockbox. Which I mention because that's what you get with basically every politician's proposal for "fixing" social security: rouge on a pig.

Where does that leave today's worker? Well, to anyone under the age of 35 who thinks they will see a dime out of the social security system should give me a call, because I have a bridge in Brooklyn to sell you. So don't even think of it as an investment. Whether they reduce the formula amount, raise the eligible age and/or income thresholds for benefits (or possibly the most likely, simply turn on the printing press to finance the obligations), the money is being flushed down the crapper.

God, today is just brimming with topics that makes you proud of the American system, eh?

[bedub1]

Lets take your example the person whose making around 12 grand a year. Would you consider that person in general to be in a position to invest money? I personally would not, as it can be fairly difficult to stay ahead of the game on 12 grand a year.

They are already investing. The company gives half of it...and the employee gives half. It is taken out of his/her check before he/she ever see's it. The 12.4% goes to social security. I don't want to change that...just move the money from the government spending it(social security)....to investing it in the stock market that will actually grow and provide a rate of return that's not negative(privatization).

I think the money should still be out of reach for the individual to spend...they can't get a penny of it till they are 67 or whatever the age is. It's like listening to people that say they bought a new BMW cause it's a great investment. Sorry...but if you think a vehicle that declines in value is a good investment....then I can't help you. Personally...I think good investments go UP in value...not DOWN.

[got tonkaed]

your taking what i said out of context. The original idea and many of the amendments were done in a fashion that was different than what our system has evolved into now. Part of it was perhaps poorly concieved, part of it was an odd demographic shift.

What you seem to be missing is how large and popular of a program social security is. Since you havent really provided any rationale for how to change the system other than pointing out the rather obvious tax issue, i can only either assume you dont really have that much of an understanding of the program (despite apparently only needing third grade math) or your willing to put yourself on the outside again of what has been by many accounts one of the most popular programs we have had as a country.

Until you provide for how you would deal with the problems that social security pays for all your doing is pointing out an issue that is understood best as pessimisitic in terms of long term projection...something done fairly consistently by actuaries for a while now. Not that theres anything wrong with that.

[bedub1]

your taking what i said out of context. The original idea and many of the amendments were done in a fashion that was different than what our system has evolved into now. Part of it was perhaps poorly concieved, part of it was an odd demographic shift.

What you seem to be missing is how large and popular of a program social security is. Since you havent really provided any rationale for how to change the system other than pointing out the rather obvious tax issue, i can only either assume you dont really have that much of an understanding of the program (despite apparently only needing third grade math) or your willing to put yourself on the outside again of what has been by many accounts one of the most popular programs we have had as a country.

Until you provide for how you would deal with the problems that social security pays for all your doing is pointing out an issue that is understood best as pessimisitic in terms of long term projection...something done fairly consistently by actuaries for a while now. Not that theres anything wrong with that.

The solution is simple...a 3 year old could figure it out. Stop taking your money and "investing" it in "social security" and instead invest it in something that provides a positive rate of return, like the "stock market". The government doesn't take your money and invest it to create more wealth...it just spends it at the store on donuts and hammers.

[cmckinney]

Just privatize it

[got tonkaed]

your taking what i said out of context. The original idea and many of the amendments were done in a fashion that was different than what our system has evolved into now. Part of it was perhaps poorly concieved, part of it was an odd demographic shift.

What you seem to be missing is how large and popular of a program social security is. Since you havent really provided any rationale for how to change the system other than pointing out the rather obvious tax issue, i can only either assume you dont really have that much of an understanding of the program (despite apparently only needing third grade math) or your willing to put yourself on the outside again of what has been by many accounts one of the most popular programs we have had as a country.

Until you provide for how you would deal with the problems that social security pays for all your doing is pointing out an issue that is understood best as pessimisitic in terms of long term projection...something done fairly consistently by actuaries for a while now. Not that theres anything wrong with that.

The solution is simple...a 3 year old could figure it out. Stop taking your money and "investing" it in "social security" and instead invest it in something that provides a positive rate of return, like the "stock market". The government doesn't take your money and invest it to create more wealth...it just spends it at the store on donuts and hammers.

So your solution is essentially to say thanks for playing to everyone who invested over the years of their life only to get nothing at the end....

sounds like a worse investment than simply putting it into a stock market, put your money in for all these years, then dont get anything for it.

This plan also seems to disregard differnet groups who recieve entitlements.

[got tonkaed]

allow me to add as well, since ill probably be off before you repost....

As far as privatization goes, it is better for the individual within the society, and does provide a better alternative to long term economic growth. As you suggested, it doesnt take a brillant person to understand you stand a better shot of making it in the long run if your investing can pay out better than the poverty wage.

However, when we are crafting social policy, you have to balance what the individual can do vs what the social contract demands we be capable of providing. Lets face it, though there is a fair amount of stability in certain areas of investment, you probably cant limit people in that regard. Some people would invest poorly and lose everything, which would be regrettable at best. Also, you have a lot of people who could be hurt in an economic downturn. Of course of the long run the stockmarket has performed well, it doesnt perform well all the time though, and when it isnt performing well, that is a bit to volitaile for something as important as the retirement standard of living for an increasing number of people in our country. While its fine for any one person, its no fine when you extrapolate the number.

There are other issues as well, such as the depletion of the fund as is, which i sort of started to mention, the fact that there are other solutions that probably cause a bit less of a budget crunch at the moment, and the fact that setting up these retirement accounts is a bit redundant when you consider that we already have things in place that do similar things.

[silvanricky]

So are you saying that the gov doesnt want to have more high income earners who they would be able to gain increased revenues from?

I'm not speaking for bedub but only from my own observations. Part of the problem is that some in government do not believe that the private sector creates, or has the ability to create wealth. They believe in something called "static scoring" of the economy.

That doesnt sound like the type of thing most people would be thinking in the midst of trillions of dollars of debt, a little extra revenue does sound nice.

I agree it sounds nice. The real situation is that if people would invest their money as bedub has suggested, they would no longer be in need of the social security assistance when they are older. That would relieve the federal government of some of its burden as private citizens are caring for their own retirement and the funds could be shifted into other areas of assistance.

That's where the real benefit to society comes from. Increased revenues are nice and I do think tax cuts lead to that. But in the case of social security it is the relief provided by private citizens handling their own business and not taking $$ from the government that is advantageous.

Its not hard to understand why people have a hard time swallowing social security as it is today. As you suggest it doesnt take a math wiz to see where problems can lie. However...your alternative solution seems to fall short under pretty simple analysis. Lets take your example the person whose making around 12 grand a year. Would you consider that person in general to be in a position to invest money? I personally would not, as it can be fairly difficult to stay ahead of the game on 12 grand a year.

The error that I think you're both making is that you've both accepted this proposal that a person makes roughly 12 grand a year and continues to make that for the rest of his life. The reality is that people over their lives get wage increases & the govt. does increase the minimum wage. That does change the spending and investment habits of workers throughout their lifetimes.

Here's where I think you make a critical error in judgment, tonka. You view the person who is making 12 grand a year as a person unable to invest money. I believe the truth is that they need to be educated and encouraged to realize that they can and are able to do it. They are not victims. I would also add it's a matter of being able to discipline yourself to do it, not a matter of inability. Oprah Winfrey even had a show on once that I saw where people who only made minimum wage their entire lives but invested during their working years and are now millionaires. Some of them were immigrants who didn't even speak good English when they arrived here.

To reiterate, it's a matter of education, belief in oneself that it's possible, and discipline. It's not a matter of inability of victimhood. Whether or not you believe you can or can't do something - you're right.

You also seem to be forgetting a fair amount of your history. Social security arose a specific social context, when people thought it made a fair amount of sense to help provide for the long term prosperity of the country. Yeah when your in the middle of a huge budget crunch with rising entitlements it looks like a disaster, but it really didnt appear to be much of one for quite some time.

OK, now don't think I'm about to make an anti-abortion statement here. Abortion is real and this country engages in it. That decreases the population regardless of whether you think it's right or wrong. You add to that a decrease in births to deaths, with older people living longer due to medical advances and you've got a recipe for disaster when it comes to providing a tax base to support social security or other programs.

I'm going to say this again because I know there will be Democrats who come on here and misinterpret what I say about abortion. I'm not condemning the abortion industry in this post. I'm just stating the obvious - less births, more abortion leads to less people in society who grow up to work and pay taxes which support social security. People living longer means they are utilizing social security for longer and it drains the fund for a longer period of time.

There was a baby boom in the past which supported this tax base, but it is dwindling.

What you seem to be missing is how large and popular of a program social security is.

This is a matter of opinion. There are many people who don't like it now which would make it unpopular. Even if what you're saying is true, popularity means nothing (other than continuing it because of public opinion). The ability to sustain it without it going bankrupt is what really matters.

Me personally, I don't give a rat's ass how popular something is. It either works or it doesn't. If it doesn't it needs to be altered so it does or scrapped.

Since you havent really provided any rationale for how to change the system other than pointing out the rather obvious tax issue, i can only either assume you dont really have that much of an understanding of the program (despite apparently only needing third grade math) or your willing to put yourself on the outside again of what has been by many accounts one of the most popular programs we have had as a country.

That's the whole point though. It is a tax issue. It drains taxpayers of money that they could have gotten a better rate by investing and giving it to a system which is not adequately supporting itself.

Once again, calling it a popular program has no bearing on whether it is able to sustain itself and function properly.

Until you provide for how you would deal with the problems that social security pays for all your doing is pointing out an issue that is understood best as pessimisitic in terms of long term projection...something done fairly consistently by actuaries for a while now. Not that theres anything wrong with that.

I personally believe that by addressing these problems as soley monetary it's a major error in judgment. It excuses us from getting involved in people's lives directly and just throwing them over into some social program where they meet someone who looks at them like a case file and a #. Obviously people are helped to a certain extent by money. Creating, educating, and instilling in them a sense that they can accomplish meeting their own needs better than a government program could also be beneficial. In some cases, people on these programs grow to become dependent, and that's a real danger. It's nearly impossible for the govt. to keep everyone on the system accountable and there's a lot of fraud.

I'm not really disagreeing with you on this point. I'm just making the case that sometimes we don't really engage people personally to help them out and just throw them into "the system" and let them deal with it.

[gdeangel]

Like I said, the pyramid always ends up going upside down at some point.

And to add a little off topic bit, I definitely agree that Americans don't acquire an appreciation for saving and investing because it's never taught in schools, and most parents don't understand it enough to teach it to their kids. And even if they do, there are obstacles to that instruction. The one I would point out is that, after the implementation of the PATRIOT act, someone under the age of 16 without a drivers license simply cannot open a bank account. Yet they can work. They can get credit cards and incur debts. They are just not able to open their own savings account unless the account is legally set up in mom/dad's name. I find this situation outrageous. It's giving kids a model where everything is bought on credit and the paycheck gets endorsed over to the bank. It's nearly as bad as the bar tender cashing the SSI disability check of an alcoholic "in kind". But how are those kids, who may me making $5K - $10K / year with after school and summer jobs, going to possibly invest in their future retirement, yes on a small scale but still that's the way to start out with good savings habits ... but the law makes that simply impossible.

[bedub1]

The guy making minimum wage all his life is already investing. In social security. I don't think he should stop investing...just move his money from social security to the private sector. Oh yeah...think about this too. Instead of giving the government trillions a year for social security, which they then blow on stupid shit instead of saving it, we could give all that money to the private sector, which is actually intelligent and able to invest in the future of the country. It would be a massive influx of cash into the economy, which the economy would use to grow bigger, generating higher wages, resulting in a great amount of money being saved, and thus invested in the economy..etc..etc...etc. Can you see the circle? The buck stops at the government. But the private sector ensures a circle of money flow.

[gdeangel]

The guy making minimum wage all his life is already investing. In social security. I don't think he should stop investing...just move his money from social security to the private sector.

I wouldn't call it investing and more than buying into a Ponzi scheme is investing.

But brother, the idea that the private sector investment is going to be a panacea really misses the mark too. The market for anything, whether it's stocks, commodities, or real estate, often will get you a nice fat negative return. There is no magic bullet here. Lots of those "private sector" investments, e.g., oil at $170/barrel, some REIT stocks, or stock of Google were/are just attempts to make money through the same "find-a-bigger-fool" strategy.

What you really should be able to do is self-direct the money, either into investments that reduce your current cash expenses (to enabling more savings as well as service a need that will exist at retirement), for example, paying down a mortgage, funding children eduction (assuming successful kids will be there to help out when you retire), purchasing long term care insurance, etc. or, if you are risk loving, making some of the "private investments" that we typically think of as generating decent returns. That's too much micro-managing by the government for most people to swallow - dare I say it sounds almost communist - so we muddle on the crappy farce of an insolvent social security trust fund.

[black elk speaks]

you guys are writing volumes. i don't feel much like reading it all.

i would like to point out a few things about the SS system that i feel warrants mentioning. in the 1930's we had the great depression. none of us can even fathom what that might have been like to live through, but i think its safe to say that it really damaged our society and that there were volumes of horror stories of old and destitute people. coming out of that, a time when social programs were non existent, people needed a clear indication that something like that would not happen again. thus, the government took on various programs like social security to ensure the security of people. a that time, social security made pretty good sense. the average family had something like 7 kids (just a guess) and if you "do the math" your seven kids would easily be able to support you. do the math some more and take that to a national level and the program is an excellent way to contribute to the people that have worked hard all their lives to make this country what it is. (you can speculate that the country is shit if you want to just saying.)

fast forward 80 years. i came from a family of 3, and the average family size when i grew up was 2.5. that is almost a 1:1 ratio if you have to split up the support if 2 parents. things are looking even more bleak as our economy now falters a bit as global markets gain against our dollar, jobs fall away to foreign workers and war and unrest surge, making commodities such as oil and other consumables skyrocket. we are all feeling the pinch, and all those baby-boomers, they are practically lining up to start collecting in on their share.

unfortunately, once the government "gives" you something, its damn near impossible to take it away. especially since you (me, us) have been paying into this thing all this time. the reality of it is that someone is going to get screwed. bummer. looks like my generation. that sucks.

<sarcasm>
maybe it would have just been better if i had been in the generations that fought in one of the world wars. maybe i would have been better off if i had been around in the great depression. oh shit! i think that i am the generation that is out however much i am out due to social security and is about to be nuked by russia as i am being beheaded by some rusty scimitar toting iranian islamist. jsut so long as the government doesn't require that i surrender my tires for the war effort, i don't really care. that would be just a little too much.
</sarcasm>

the point is that people get screwed all the time. it sucks, it shouldn't happen, but it does. don't let it ruin your fucking day. its just money after all.

[gdeangel]

When the ultimately turn on the printing press to fix this problem, we will have inflation like you can't ever recall from living memory. And then it will be an issue not just of greenbacks, which, at the end of the day, mean nothing... unless the screwing is administered in small doses over the next 20-ish years, it will surely be an veritable issue of survival. It's of the order of magnitude that will tear a hodge-podge, dissident, self-aggrandizing 250 year old republic into something that looks like the former Soviet provinces. Just wait for it.

[bedub1]

you guys are writing volumes. i don't feel much like reading it all.

Yet more than willing to contribute to it. Thanks for the insight though....2 parents having 7 kids does make the pyramid scheme work....unfortunately when it gets turned upside down with 2 parents having 1 child......

[got tonkaed]

So are you saying that the gov doesnt want to have more high income earners who they would be able to gain increased revenues from?

I'm not speaking for bedub but only from my own observations. Part of the problem is that some in government do not believe that the private sector creates, or has the ability to create wealth. They believe in something called "static scoring" of the economy.

That doesnt sound like the type of thing most people would be thinking in the midst of trillions of dollars of debt, a little extra revenue does sound nice.

I agree it sounds nice. The real situation is that if people would invest their money as bedub has suggested, they would no longer be in need of the social security assistance when they are older. That would relieve the federal government of some of its burden as private citizens are caring for their own retirement and the funds could be shifted into other areas of assistance.

That's where the real benefit to society comes from. Increased revenues are nice and I do think tax cuts lead to that. But in the case of social security it is the relief provided by private citizens handling their own business and not taking $$ from the government that is advantageous.

Its not hard to understand why people have a hard time swallowing social security as it is today. As you suggest it doesnt take a math wiz to see where problems can lie. However...your alternative solution seems to fall short under pretty simple analysis. Lets take your example the person whose making around 12 grand a year. Would you consider that person in general to be in a position to invest money? I personally would not, as it can be fairly difficult to stay ahead of the game on 12 grand a year.

The error that I think you're both making is that you've both accepted this proposal that a person makes roughly 12 grand a year and continues to make that for the rest of his life. The reality is that people over their lives get wage increases & the govt. does increase the minimum wage. That does change the spending and investment habits of workers throughout their lifetimes.

Here's where I think you make a critical error in judgment, tonka. You view the person who is making 12 grand a year as a person unable to invest money. I believe the truth is that they need to be educated and encouraged to realize that they can and are able to do it. They are not victims. I would also add it's a matter of being able to discipline yourself to do it, not a matter of inability. Oprah Winfrey even had a show on once that I saw where people who only made minimum wage their entire lives but invested during their working years and are now millionaires. Some of them were immigrants who didn't even speak good English when they arrived here.

To reiterate, it's a matter of education, belief in oneself that it's possible, and discipline. It's not a matter of inability of victimhood. Whether or not you believe you can or can't do something - you're right.

You also seem to be forgetting a fair amount of your history. Social security arose a specific social context, when people thought it made a fair amount of sense to help provide for the long term prosperity of the country. Yeah when your in the middle of a huge budget crunch with rising entitlements it looks like a disaster, but it really didnt appear to be much of one for quite some time.

OK, now don't think I'm about to make an anti-abortion statement here. Abortion is real and this country engages in it. That decreases the population regardless of whether you think it's right or wrong. You add to that a decrease in births to deaths, with older people living longer due to medical advances and you've got a recipe for disaster when it comes to providing a tax base to support social security or other programs.

I'm going to say this again because I know there will be Democrats who come on here and misinterpret what I say about abortion. I'm not condemning the abortion industry in this post. I'm just stating the obvious - less births, more abortion leads to less people in society who grow up to work and pay taxes which support social security. People living longer means they are utilizing social security for longer and it drains the fund for a longer period of time.

There was a baby boom in the past which supported this tax base, but it is dwindling.

What you seem to be missing is how large and popular of a program social security is.

This is a matter of opinion. There are many people who don't like it now which would make it unpopular. Even if what you're saying is true, popularity means nothing (other than continuing it because of public opinion). The ability to sustain it without it going bankrupt is what really matters.

Me personally, I don't give a rat's ass how popular something is. It either works or it doesn't. If it doesn't it needs to be altered so it does or scrapped.

Since you havent really provided any rationale for how to change the system other than pointing out the rather obvious tax issue, i can only either assume you dont really have that much of an understanding of the program (despite apparently only needing third grade math) or your willing to put yourself on the outside again of what has been by many accounts one of the most popular programs we have had as a country.

That's the whole point though. It is a tax issue. It drains taxpayers of money that they could have gotten a better rate by investing and giving it to a system which is not adequately supporting itself.

Once again, calling it a popular program has no bearing on whether it is able to sustain itself and function properly.

Until you provide for how you would deal with the problems that social security pays for all your doing is pointing out an issue that is understood best as pessimisitic in terms of long term projection...something done fairly consistently by actuaries for a while now. Not that theres anything wrong with that.

I personally believe that by addressing these problems as soley monetary it's a major error in judgment. It excuses us from getting involved in people's lives directly and just throwing them over into some social program where they meet someone who looks at them like a case file and a #. Obviously people are helped to a certain extent by money. Creating, educating, and instilling in them a sense that they can accomplish meeting their own needs better than a government program could also be beneficial. In some cases, people on these programs grow to become dependent, and that's a real danger. It's nearly impossible for the govt. to keep everyone on the system accountable and there's a lot of fraud.

I'm not really disagreeing with you on this point. I'm just making the case that sometimes we don't really engage people personally to help them out and just throw them into "the system" and let them deal with it.

Internet ate my post, ill reply to this at length against tomorrow.

[Backglass]

The solution is simple...a 3 year old could figure it out. Stop taking your money and "investing" it in "social security" and instead invest it in something that provides a positive rate of return, like the "stock market".

Yes! The stock market always goes up!

Just like it has done for the past year!

[silvanricky]

The solution is simple...a 3 year old could figure it out. Stop taking your money and "investing" it in "social security" and instead invest it in something that provides a positive rate of return, like the "stock market".

Yes! The stock market always goes up!

Just like it has done for the past year!

but since we're talking about people investing over a long period of time and not just for one year.........

[bedub1]

The solution is simple...a 3 year old could figure it out. Stop taking your money and "investing" it in "social security" and instead invest it in something that provides a positive rate of return, like the "stock market".

Yes! The stock market always goes up!

Just like it has done for the past year!

but since we're talking about people investing over a long period of time and not just for one year.........

Of course the stock market goes up and down. But over the course of 50 years....It will go up.
The government would give us a list of "approved" places we can choose to invest our money. When you are 18, you can put it in highly risky stuff that pays out really well...but as you get older and older it needs to be diversified to less risky, more stable investments. You won't make as much money toward the end...but it will be safer than "playing the stock market" and exposing yourself to the fluctuations of the market.

[got tonkaed]

I'm not speaking for bedub but only from my own observations. Part of the problem is that some in government do not believe that the private sector creates, or has the ability to create wealth. They believe in something called "static scoring" of the economy.

I think this is stretching the point a little farther than necessary. No politican in the US believes the private sector does not create wealth. Some may distrust it on certain issues (and perhaps at times justifiably so) but few probably hold that the gov is doing something that could not be done under any circumstances in the private sector.

I agree it sounds nice. The real situation is that if people would invest their money as bedub has suggested, they would no longer be in need of the social security assistance when they are older. That would relieve the federal government of some of its burden as private citizens are caring for their own retirement and the funds could be shifted into other areas of assistance.

That's where the real benefit to society comes from. Increased revenues are nice and I do think tax cuts lead to that. But in the case of social security it is the relief provided by private citizens handling their own business and not taking $$ from the government that is advantageous.

You are correct in that the burden is going to have to be reduced (whether people want it to or not). However it is perhaps fallacious to assume that people are going to be able to simply provide for themselves without any need for assistance, especially if you consider some groups who may be recieving payments who are otherwise less financially independent. I disagree on the tax cut issue (though ive seen some make attempts to argue it) but its not really relevant to the issue at hand.

The error that I think you're both making is that you've both accepted this proposal that a person makes roughly 12 grand a year and continues to make that for the rest of his life. The reality is that people over their lives get wage increases & the govt. does increase the minimum wage. That does change the spending and investment habits of workers throughout their lifetimes.

While it was certainly easier i think at first to point out the flaw in the simple math argument using someone who makes 12 grand, it does no hold that it must necessarily be done for such a low wage. I think when looking at how individuals gain wealth in this country we do not primarily look at stock ownership, and probably rightfully so. What we would be looking at first is home ownership, as owning a home is a very strong vessel into long term creation of wealth. If we consider the fact that in good times and bad times (present housing crisis included by not essential for the purposes of the point) people making far more money than 12k a year are unable to gain appreciating assets like homes because of financial constraints. If they are unable to do so in what would be a very positive economic step, what makes us assume that they will have no problem setting aside money to invest if left to their own devices, or even if they are assisted by the gov (something that would probably have a fair amount of cost to implement alone). While people do make more money than minimum wage, it doesnt mean they make the type of income that is capable of investing in markets that are probably going to be increasingly volitaile over the course of their investment.

Here's where I think you make a critical error in judgment, tonka. You view the person who is making 12 grand a year as a person unable to invest money. I believe the truth is that they need to be educated and encouraged to realize that they can and are able to do it. They are not victims. I would also add it's a matter of being able to discipline yourself to do it, not a matter of inability. Oprah Winfrey even had a show on once that I saw where people who only made minimum wage their entire lives but invested during their working years and are now millionaires. Some of them were immigrants who didn't even speak good English when they arrived here.

I believe this is entirely too optimisitc. I do not see the person who is making 12k (or more) as unable to invest because they do no have discipline or do not have education. I do not think people are the way they are because of what they think themselves to be (the what they are side of the what they are vs what they do argument). Rather i see very real financial constraints that will severely inhibit many to engage in sound financial long term decisions. Also the education you seem to suggest is the solution to the problem, is not something that has a clear plan. How would it be done, who would teach and at what cost to the taxpayer? None of those questions have easy answers, especially when you get into nitpicky details about them (which we can exclude for the obvious need of brevity).

To reiterate, it's a matter of education, belief in oneself that it's possible, and discipline. It's not a matter of inability of victimhood. Whether or not you believe you can or can't do something - you're right.

This type of sentiment very easily translates into blaiming the vicitim, which is not the best way to deal with complicated social policy imo.

OK, now don't think I'm about to make an anti-abortion statement here. Abortion is real and this country engages in it. That decreases the population regardless of whether you think it's right or wrong. You add to that a decrease in births to deaths, with older people living longer due to medical advances and you've got a recipe for disaster when it comes to providing a tax base to support social security or other programs.

I'm going to say this again because I know there will be Democrats who come on here and misinterpret what I say about abortion. I'm not condemning the abortion industry in this post. I'm just stating the obvious - less births, more abortion leads to less people in society who grow up to work and pay taxes which support social security. People living longer means they are utilizing social security for longer and it drains the fund for a longer period of time.

There was a baby boom in the past which supported this tax base, but it is dwindling.

i dont really think the abortion argument has a whole lot of merit in this discussion. As a result ill choose no to give it much discussion myself. Demographic issues probably have a whole lot more to them than simply people started aborting at much higher rates.

This is a matter of opinion. There are many people who don't like it now which would make it unpopular. Even if what you're saying is true, popularity means nothing (other than continuing it because of public opinion). The ability to sustain it without it going bankrupt is what really matters.

Me personally, I don't give a rat's ass how popular something is. It either works or it doesn't. If it doesn't it needs to be altered so it does or scrapped.

Historically its been incredibly popular, because it has done a lot of good for the country. That gives it a lot of political sway and its not something that should be discounted. In some ways for better or worse, it has contributed to a mindset that is not easily changed. The people who project negative outlooks on social security now are not the only people with projections.

Also, if we are discussing things that simply work or dont work, there are plenty of other things which dont work that arent going to be altered anytime soon. One cannot simply discount public willingess for a program to continue in any political system that has the potential to reward voters or lobbies who wish to act.

That's the whole point though. It is a tax issue. It drains taxpayers of money that they could have gotten a better rate by investing and giving it to a system which is not adequately supporting itself.

Once again, calling it a popular program has no bearing on whether it is able to sustain itself and function properly.

I dont really think most people who want to privatize social security view it chiefly as a tax issue. Also the people who wish to view the issue simply in terms of tax are discounting a lot of investment that was guaranteed for many a long time ago. IF the gov is supposed to be providing for a general sense of welfare for the state, part of that is likely to include some type of social welfare program. If there was other steps taken to increase revenue or even a bit more of a slowdown on spending, we would be better equipped to deal with a demographic shift causing budgetary stress. To alter social security in a way that could have perilous effects for many because we didnt do the other things that could have been done seems shortsighted.

I personally believe that by addressing these problems as soley monetary it's a major error in judgment. It excuses us from getting involved in people's lives directly and just throwing them over into some social program where they meet someone who looks at them like a case file and a #. Obviously people are helped to a certain extent by money. Creating, educating, and instilling in them a sense that they can accomplish meeting their own needs better than a government program could also be beneficial. In some cases, people on these programs grow to become dependent, and that's a real danger. It's nearly impossible for the govt. to keep everyone on the system accountable and there's a lot of fraud.

Your arguing in one point that we as a society should essentially back away from people and allow them to do what they see best in their own economic lives ( a point that is taken on some issues) and yet saying that we must intervene to show them the way on the other. Social programs are the ways we have tried to get involved in peoples lives (it hasnt always worked perfect). The danger of dependence while real is also something that tends to be ancedotally exaggerated. Everyone knows of one guy who is a welfare cheat, or at least claims to have heard about one. I think it is assumable that this isnt such a large scale pheonomona that it explains why we have to fix social security.

Id rather hear about how we are going to instill this educational capcity and sense into people who are quite possibly going to have little financial training or understanding about such an issue ( a much larger group than the welfare cheats).

I'm not really disagreeing with you on this point. I'm just making the case that sometimes we don't really engage people personally to help them out and just throw them into "the system" and let them deal with it.[/quote]

Privatization does not imply cooperation for the embetterment of all. It implies going it alone and doing the best you are able. If you are arguing ss should be privatized from this angle fine -its a fairly consistent argument made from some quarters. But it makes little sense to make privatization a social arguement, especially when you consider the other end doesnt care if the individual investor succeds when the investment, so long as the money has been invested.