posted
As many of you well know, I am a more liberal member of this board and, for the most part, haven't supported Bush on much of anything.
But I feel like his Social Security plan might have merit. Maybe it's just because I'm a member of a younger generation, but Social Security has never been something I've counted on when I think about the future. If anything, I'd always operated under the assumption that the system would be gone by the time I reached retirement.
The idea that I would have control over that 4% of my payroll taxes is very appealing to me. Why should the government get it? It's my money, and I should be able to choose what I do with it. Maybe I'm overly confident in myself or in the stock market itself, but I'm a lot more comfortable relying on myself than I am relying on the government.
It's interesting, though, that this seems to be much more of a generational gap than a party-line or even ideological one. Anyone else have thoughts?
Posts: 1784 | Registered: Jun 2001
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posted
I almost pointed out the other thread as well. The only problem is it isn't really about social security reform anymore.
Posts: 127 | Registered: Feb 2005
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posted
Kasie, I'm a generation older than you are, but my views line up with yours. I've been saving for my retirement since I was in my early 20's for two reasons: 1. It was easy, with a 401(k). and, 2. I don't think I will get very much from SocSec when I'm retirement age -- certainly not enough to live the way I want to live those years.
It seems clear to me that it is important to the US that we take care of our elderly and disabled. It also seems clear to me that the massive amount of money being collected to do that isn't being handled very well. Nor has it been understood well either by most Americans. It has been very helpful to me to believe that I will never see any SocSec. It has pushed me to start planning for retirement when I couldn't conceive of being 30, let alone 60. Those who see themselves receiving SocSec someday *don't* plan, I've noticed. And that means they'll NEED SocSec. It's a vicious cycle.
So, wouldn't it be nice if SocSec could be modified to help people change their mindset about retirement? That they can be involved in planning with money they're already contributing? Or not, as they choose? Maybe they'd catch the bug and think about saving *more* so that their retirement years are that much more comfortable.
Posts: 5948 | Registered: Jun 2001
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posted
Here is a question for you: If we were going to start a social security plan today, would we start one with private accounts and build indidvidual wealth, or would we start one that resembles the current system?
Social security is the way it is because the original beneficiaries had not paid into the system and their money had to come from somewhere. So we decided to tax current workers to pay current retirees. That worked with the demographic situation back then, not so much now. We have to either make a structural shift towards private accounts or raise taxes and cut benefits signigicantly. I vote private accounts.
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posted
But of course holden, you realize that the actual situation is so much more complex than what you're describing, right?
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posted
Obviously. President Bush's plan will need to be scrutinized as to short term and long term effects on govt debt levels. I will be especially interested in seeing what return on investment assumptions the administration is using in making their predictions. I am speaking in general about how we should provide for the nations elderly. Is it a better idea for us to build wealth throughout our lives and retire with a private account that we can use as we wish, or would you prefer to rely on the government and hope they don't change the rules right before you retire?
Posts: 127 | Registered: Feb 2005
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quote:But I feel like his Social Security plan might have merit. Maybe it's just because I'm a member of a younger generation, but Social Security has never been something I've counted on when I think about the future. If anything, I'd always operated under the assumption that the system would be gone by the time I reached retirement.
It's not because you are in the younger generation, it's because you are rich and institutionally educated. Social security is not made for you. You are going to school, you know what a 401k is, you or someone in your family knows what it means to save for retirement. You fully expect to have a steady job with your options explained to you in language you understand. Social security isn't for you. For the most part, it's not for anybody on Hatrack. It's a safety net for people without our advantages, or for people who run into bad luck.
Social security is about the current generation's tie to seniors, like public education is the current generation's tie to the children. We could start being casual about those ties. I mean, childless couples or private school parents think that they should get their own money to spend the way they like. And if that's the Nation we want to be, one who thinks that the dignity of public education or social security is up to a felicitous stock market or private wants, then so be it.
The funny thing about this quote:
quote: I ask our youngest citizens to believe the evidence of your eyes. You have seen duty and allegiance in the determined faces of our soldiers. You have seen that life is fragile, and evil is real, and courage triumphs. Make the choice to serve in a cause larger than your wants, larger than yourself - and in your days you will add not just to the wealth of our country, but to its character.
It's a lot easier to talk about character and duty when character and duty means our soldiers killing foreigners, and it's a lot harder to swallow deeper issues of national character and duty when it comes to helping our nation's elderly, sick, and children.
quote:The idea that I would have control over that 4% of my payroll taxes is very appealing to me. Why should the government get it? It's my money, and I should be able to choose what I do with it. Maybe I'm overly confident in myself or in the stock market itself, but I'm a lot more comfortable relying on myself than I am relying on the government.
It's appealing in the same way Eve thought the apple was appealing. Substitute "America," for everywhere you said, "the government," and you'll see how small this can sound.
You've pointed out why I've always felt uncomfortable criticizing social welfare programs: because I know I am not the beneficiary, and I feel as though it is selfish to refuse to give to those less fortunate, or to be unwilling to help provide for the welfare of the nation as a whole (including the poor and disadvantaged). But at the same time, I wonder if the government always deals with money responsibly. How much gets lost in the shuffle? Maybe implementing these private accounts would be an enormous waste simply because we can't do it efficiently. I don't know. I just feel as though the smaller we keep government, the less money gets wasted.
Public education is different from Social Security, in my opinion, because public education is run on a more local level. While some schools could benefit from more state money and state legislation, most school systems are community endeavors made up of citizens who genuinely care about and have a stake in what they're building. They can see the results of their efforts. Federal programs are a bit different, and, in my opinion, more prone to waste and mismanagement.
In principle, I agree with Social Security, Medicare and other socially uplifiting programs. I don't always think the government is best fit to do it efficiently, though.
Posts: 1784 | Registered: Jun 2001
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posted
I don't have a problem with you criticizing the program, the problem was that you thought the benefits of the program had something to do with you, again, like a childless couple thinking that they aren't benefitting from their public school dollars.
quote:In principle, I agree with Social Security, Medicare and other socially uplifiting programs. I don't always think the government is best fit to do it efficiently, though.
Which way do you want to err? Uplifting is kind of a weak term, we are talking about a people's dignity, and that's not something we should play fast and loose with.
posted
Irami, you always argue that social security is not about what you, it's not for you, it's a not a retirement plan. The problem is the government doesnt' treat it that way - they do encourage people to think of it as a retirement plan.
They send out statements that show you what you're going to get based on what you've paid in.
They don't take social security taxes out of the checks of public servants - why? Because they don't receive it later. If it's all about paying for the elderly and disabled, why doesn't everyone contribute then? Why don't we all just receive the same amount when we retire?
Posts: 14428 | Registered: Aug 2001
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posted
FDR's original proposal of Social Security, when he designed it, included privitization of part of it (which was knocked out by Congress).
(More on the History of Social Security at this link. And no, I don't know who Lew Rockwell is -- I came across this while doing research on the issue).
Social Security is not like other programs. You can't "flat tax" it and have everyone pay, say 3% and that means the rich pay more (in dollars) than the poor, and at the end that helps subsidize the poor. That would make it an entitlement program, which is not what it was designed to be. It was designed to be based on what each person earned.
I'm all for personal responsibility for our retirement -- we should be saving on our own. And I feel like privitization of SS would be a good thing
But I also realize privitization will cause a crisis, because instead of "holding" the money we put in until our retirement, the government uses the money were putting in right now to pay for things right now -- so how is it going to survive a huge cut in the right now money if we all start NOT paying into Social Security and instead put it into our own accounts?
Either way, it's painful. Painful now during adjustment, or painful later when SS dries up.
quote:Irami, you always argue that social security is not about you, it's not for you, it's a not a retirement plan. The problem is the government doesnt' treat it that way - they do encourage people to think of it as a retirement plan.
They send out statements that show you what you're going to get based on what you've paid in.
It's a strange argument. The government treats it like this: social security. If that's not what you want social security to be, then you don't like social security. That's fine. A lot of people don't like social security.
quote:They don't take social security taxes out of the checks of public servants - why?
It's because they are late to the party that there is something strange about it. It's like taxing welfare recipients. Instead of making public servants pay social security, it would make more sense to lower their salary, or if we don't want them to be servants, we get rid of their job. If we want to raise their salary just to take out social security to make people less envious, , but that's a game centered around appeasing the niggardly, and I don't know if America should be in that business. I think that's how America gets into trouble to begin with.
quote: If it's all about paying for the elderly and disabled, why doesn't everyone contribute then? Why don't we all just receive the same amount when we retire?
The check is supposed to be at a station comparable to the one in which you lived, so that growing old doesn't affect ones sense of dignity.
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FG,
I think people's lust for money is overwhelming people's respect for the truth about this "crisis." The same can be said of Iraq's WMDs, and threat of the Communists of the fifties. Now in a few years when this goes down, and we are going to tell ourselves, "we may have been wrong, but everyone thought we had to do it, and everyone thought it was the right thing."
I'll say right here what I said when Powell made his presentation at the UN, "If this is the damning evidence, the big case, I don't think it's as dire to do what he says we have to do."
If you want to privatize social security, privatize social security. If you want to go war in Iraq, go to war in Iraq. If you want to cut taxes, cut taxes, but cut all of the BS evidence and just be honest about why you want to do it. You are looking out for number one, and you think that if other people can't look out for theirs, that's God's, the Market's, their parent's, or someone else's problem.
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The "crisis" debate is a trick to avoid the character discussion. It's so nobody feels bad when they cut old people's checks. Again, it worked with the Iraq campaign. The WMD debate allowed people to support war and not think of all of the collateral damage.
posted
It's more than old people's checks, Irami. I know that I, personally, have paid thousands of dollars into Social Security that I will probably never see again. This was not framed as a welfare program; it is not taken out of my paycheck as a "tax." It is, according to the federal government, money that they are taking away from me for my own good and putting someone safe so it'll be there when I retire.
Now, you and I both know that's not really what's happening. But the end result here is that when I go to pick up my Social Security check, to get reimbursed for the thousands of dollars I've given the government above and beyond any "tax" I've paid to them, the likely result is that they won't have my own money to give back to me, much less any interest.
Posts: 37449 | Registered: May 1999
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quote:It is, according to the federal government, money that they are taking away from me for my own good and putting someone safe so it'll be there when I retire.
Again, that's a concession that I'm not going to make. I don't plan on social security.
quote:But the end result here is that when I go to pick up my Social Security check, to get reimbursed for the thousands of dollars I've given the government above and beyond any "tax" I've paid to them, the likely result is that they won't have my own money to give back to me, much less any interest.
That's an accident of math and a slew of pilfering congresses and presidents.
Posts: 5600 | Registered: Jul 2001
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posted
Everyone is saying that SS is solvent until at least 2042 if we do nothing. Many assert that it is solvent for a long time after that.
Those who have been paying in and are in the 30+ age range are likely to go on seeing their checks come in just like their parents and grand parents did. Most in this age group will not live to see the problems predicted for 2042 and beyond.
There are a couple of problems I see, though:
1) The "crisis" assumes that the population of the US will continue to age at the rate it has been doing for several decades. If that really does happen, we'll have lots more problems than just social security being upside down. But is this a realistic assumption? Are we really going to get to the point of depopulating America? Is there not even the possibility of another tick up in the birth rate that would play out in broader distribution of the SS costs over time?
2) The likeliest losers if SS is only a partial guarantee are, it seems to me, people in the age group that is either just now too old to qualify for the personal accounts thing, or (more likely) the people in the age group just now young enough to start doing it. Why? Because the changes affect them closest to their retirement. If this whole experiment turns out to be a fiasco, the people who still have 30+ working years left ahead of them can recover. Those with only a decade or so left to work won't have as easy a time of recovering from losses if things go awry.
3) The president and Administration have made some pretty bold promises, many of which seem like they'd be hard to deliver on. For example, they said that they will find a way to ensure that people forced into retirement at times when the market is in a tailspin don't suffer. How can they possibly do that when at least some portion of their accounts are in personal stock accounts? Will the government 20 years from now be in a position to deliver on that promise? With what funds?
Anyway, this is an appealing idea except when one thinks about it from a social responsibility point of view, I think. SS is supposed to be a safety net, not a person's one and only source of retirement income. The fact that pensions are disappearing and most places don't offer them to new employees is much more troubling for long-term retirement prospects than the piddly amount that SS is supposed to guarantee. 401Ks are nice, but the fact that the majority of job growth in the US is taking place in small companies that don't offer this benefit means that most people aren't saving into this type of account.
IRAs are interesting. They're a great way to save money, but the limits placed on them in our tax laws are just rediculous. Insane, really, for a country that supposedly wishes to encourage savings.
Ah well...the point of SS was never to guarantee comfort. It was to guarantee that nobody retired with zero resources or income. There are some wacky things in the law, but overall, it has done exactly what it was supposed to do.
Posts: 22497 | Registered: Sep 2000
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quote:If you want to privatize social security, privatize social security. If you want to go war in Iraq, go to war in Iraq. If you want to cut taxes, cut taxes, but cut all of the BS evidence and just be honest about why you want to do it. You are looking out for number one, and you think that if other people can't look out for theirs, that's God's, the Market's, their parent's, or someone else's problem.
I think we should get you a swami hat. It makes the "invent things about other people but pretend I actually know it" much more convincing.
quote:The fact that pensions are disappearing and most places don't offer them to new employees is much more troubling for long-term retirement prospects than the piddly amount that SS is supposed to guarantee. 401Ks are nice, but the fact that the majority of job growth in the US is taking place in small companies that don't offer this benefit means that most people aren't saving into this type of account.
I'd love to see congress work with small businesses to mitigate the maintenaince costs of 401ks.
posted
401ks are very cheap for small businesses to set up. (Edit: Oops - the payroll match thing was for cafeteria plans. It was still plenty cheap for us when we did - it was a net cost of almost zero. I'll see if I can remember why.) Unless we got a really unusual deal, that is. I don't think we did.
posted
I spoke to my last employer about it, and the human resource lady gave me all of this jive about the hassle and overhead that goes into 401ks, that the employer has to pick up. Now this was a 80 million dollar business with 220 employees and a decent profit margin, but maybe one person's cheap and another person's cheap are two different things.
posted
I think there are two barriers for small businesses to set up 401Ks:
1) There are bound to be some costs associated with doing the paperwork, or even just researching what the options are. I don't think this comes free to any company.
2) The "match" thing, though optional, is certainly a cost. I'm not sure what the problem would be for a company of 220 and generating the kind of revenue you talk about, but for the typical small business, I'm betting the 401k is just not something that's likely to add to the company's bottom line in any immediate or tangible way. So, it's a cost without benefit to the company's financial outlook.
Very little incentive to do it under those conditions.
Staff retention/competitiveness are probably good motivators, but if we're talking about some mom & pop shop where the staff could be easily replaced, I just don't see them ever thinking this is a great idea whose time has come.
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Those who see themselves receiving SocSec someday *don't* plan, I've noticed. And that means they'll NEED SocSec. It's a vicious cycle. ![[Dont Know]](graemlins/dontknow.gif)
, but that's a game centered around appeasing the niggardly, and I don't know if America should be in that business. I think that's how America gets into trouble to begin with. 
