5 Social Security myths that have to go

[Genx87]

LOLwut???

I am asking if you are going to lift the cap on paying in are you also going to lift the cap on paying out? Because that is the only way in your fantasy world this could be solvent. You are acting like millionaires are paid SS based on millionaires salaries. They are paid on the max contribution.

 

[Ausm]

I am asking if you are going to lift the cap on paying in are you also going to lift the cap on paying out? Because that is the only way in your fantasy world this could be solvent. You are acting like millionaires are paid SS based on millionaires salaries. They are paid on the max contribution.

I think we should eliminate paying in and raise the amount we are paying out..DUH....What a fucking stupid question. That little tidbit should make you foam your monitor REAL good.

LOL

 

[CPA]

I really wish we could have passed the privatized social security plan under bush.

this

 

[Genx87]

I think we should eliminate paying in and raise the amount we are paying out..DUH....What a fucking stupid question. That little tidbit should make you foam your monitor REAL good.

LOL

You arent making any sense again. You cant even answer that simple of a question? I doubt you had any clue at all the cap on contribution was also a cap on outlays.

 

[Exterous]

They are a nice addition for those who get them - lower end workers don't.

There are no minimum level restrictions for starting an IRA

Bottom line is, Social Security has FAR lower overhead costs for its program than Wall Street has for IRAs and 401(k)'s, and privatizing social security would just increase Wall Street profits and the overhead costs of the program more, and increase Wall Street profits massively and their corruption of our government.

Obviously it depends on how the plan would be passed but you can make a very nice IRA portfolio out of Vanguard Index funds (or spartan funds etc) for a very low ER. No other fees required. While I don't know what the actual costs of SS are off the top of my head it would be hard to beat 0.2%

It's the admin.'s fault for reckless management of it and allowing withdrawals from people who never payed into it.

We can play the fault game all we want but we still need to fix it. I'd rather start now and have at least a tiny chance of doing it rationally than knee jerk reactions and shitty bandaids down the road

What kills me is my parents LOVE SS and their Medicare but are hardline line Repubs..... I don't waste my time telling them they are voting against their self interests but I can attest that this type of hypocrisy is soon becoming extinct.

TBH it'll be hard to tell whats going to win out - todays kids entitlement mentality which will probably carry on into their 40s, 50s (when they will start to really think about SS and want 'their money') or the growing stigma among the younger generations about SS. With the increased debt load (and decrease in retirement savings) I think you'll see more and more people turning to their current paychecks and want that money now and demonize the people who are currently getting 'their money'

Either way I wouldn't plan on that making a chunk of my retirement income

 

[lothar]

That's a good question.

While I'm ok with these accounts, there are issues. They're not really suitable for replacing Social Security. They are a nice addition for those who get them - lower end workers don't.

They give higher end workers a little taste of the benefits of the benefits of tax deferment - carefully capped - that the rich can exploit far more.

What a coincidence that wealth self-funded political candidated such as Meg Whitman and Mitt Romney support tax changes, in the midst of record low taxes on the rich that have already massively shifted wealth from the people to them, that would further cut the taxes on the rich and give them millions a more, shifting those taxes onto the public.

But on those accounts, yes, they have given Wall Street control over I'd guess trillions of dollars getting fees for that - at the same time that Wall Street has increased its share of the historic norm for industry profits of 10 to 15% of the economy's profits, to as high as 40% - and greatly increased its political power so that they effectively run the government's economic functions, hence the corrupt structure of the TARP money - but more than that, the trillions that didn't get much publicity.

Bottom line is, Social Security has FAR lower overhead costs for its program than Wall Street has for IRAs and 401(k)'s, and privatizing social security would just increase Wall Street profits and the overhead costs of the program more, and increase Wall Street profits massively and their corruption of our government.

It's a little like the cushy role banks obtained for student loans making high profits while the loans were guaranteed by the government so there was no risk.

That's one of Obama's achievments to stop that that should not be controversial.

Lol...Is this how all liberals/progressives think?
I'd rather pay taxes NOW when I'm in the middle or near the bottom of my career than to defer them and have the government eating into my gains when I'm at the top of my career. Those accounts are more likely to be there for me when I retire than Social Security is after the baby boomers have finished raiding them.

If you think Traditional IRA's are a boon for the rich through deferred tax treatments, then go and argue to congress for getting rid of the Roth IRA income exemption limits. I will be right there with you. Let me know when you will be there so I can wear an Occupy Congress t-shirt during our protest.

If IRA's are for the rich then why does the government allow deductible Traditional IRA's for the poor to contribute to their plans while the rich get non-deductible IRA's?

Overhead costs in my IRA: Zero. I get free trades, no additional account maintenance fees or expenses.
Overhead cost in my 401K: 0.07%
What is the overhead cost for Social Security? Whatever it is, it's definitely not Zero like my IRA is.

Then allow the banks to take their own risk by discrimination of major rather than the government forcing them to award a liberal arts or theology major $100k in loans. Get rid of federal guarantee on student loans to banks and allow discrimination of major on loans and you will see real reform.

 

[lothar]

No I do not have an IRA/401K, but have planned and saved for my retirement. I'm semi-retired now. Many people did lose their IRA's, etc. in this last recession.

How did you plan and save for your retirement? Pensions?
Pensions are not immune. Many people that work for local governments and municipals are getting their pensions cut. There's a story about some town going broke and cutting their pension benefits here like every month.

Many people also gained their IRA's, etc...in the last recession.
My IRA has far outpaced the market and what I originally contributed to it.

 

[KB]

What kills me is my parents LOVE SS and their Medicare but are hardline line Repubs..... I don't waste my time telling them they are voting against their self interests but I can attest that this type of hypocrisy is soon becoming extinct.

Your parents remind me of this. I am not sure if this was a fake sign or not, but its still funny:

"Keep government out of my medicare"

http://i1224.photobucket.com/albums/ee379/gizmobrown/TeaBaggers-1.jpg

 

[Craig234]

Lol...Is this how all liberals/progressives think?
I'd rather pay taxes NOW when I'm in the middle or near the bottom of my career than to defer them and have the government eating into my gains when I'm at the top of my career.

What are you saying? Taxes are deferred until you retire, when you are in a low bracket.

Those accounts are more likely to be there for me when I retire than Social Security is after the baby boomers have finished raiding them.

When you make up bad assumptions, you get bad things from them.

How about 'Wall Street will probably take all the money' as an assumption? Of course that would mean to not want that - who cares if it's a wrong assumption?

This 'Social Security won't be there' is a bad assumption.

If you think Traditional IRA's are a boon for the rich through deferred tax treatments

That's not what I said. IRA's are not 'for the rich'. Anyone can use them, but poorer workers usually can't afford to. The rich would be happy to get rid of them altogether.

, then go and argue to congress for getting rid of the Roth IRA income exemption limits. I will be right there with you. Let me know when you will be there so I can wear an Occupy Congress t-shirt during our protest.

Figures you are happy to get rid of something for the middle class.

If IRA's are for the rich then why does the government allow deductible Traditional IRA's for the poor to contribute to their plans while the rich get non-deductible IRA's?

They're not 'for the rich'. See what happens when you have a bad assumption?

I said IRAs and 401(k)'s give a small taste, carefully limited, of the tax advantages the rich enjoy on a far larger basis.

401(k)'s aren't available to many workers; many can't afford IRS contributions.

Overhead costs in my IRA: Zero. I get free trades, no additional account maintenance fees or expenses.
Overhead cost in my 401K: 0.07%
What is the overhead cost for Social Security? Whatever it is, it's definitely not Zero like my IRA is.

Studies show that Social Security overhead would go up several times if privatized.

Then allow the banks to take their own risk by discrimination of major rather than the government forcing them to award a liberal arts or theology major $100k in loans. Get rid of federal guarantee on student loans to banks and allow discrimination of major on loans and you will see real reform.

I think our society is richer not being filled only with industrialization. You can be a Philistine. We should provide more societal support for liberal arts.

Opposing the government handing profits for no reason to banks with guaranteed student loans is what Obama did.

Maybe you could use some liberal arts to help reading comprehension?

 

[nobodyknows]

Yeah, uhhh, not sure if you have noticed or not but we can't afford to give people what they have been promised.

What do you mean "we", Ke-mo sah-bee.,

 

[Ausm]

You arent making any sense again. You cant even answer that simple of a question? I doubt you had any clue at all the cap on contribution was also a cap on outlays.

Not making sense? You need me to dumb it down further for you? You obviously didn't read all my posts where I laid out what you are asking about and no I'm not going to waste my time trying to reiterate my points.

 

[Ausm]

Your parents remind me of this. I am not sure if this was a fake sign or not, but its still funny:

"Keep government out of my medicare"

http://i1224.photobucket.com/albums/ee379/gizmobrown/TeaBaggers-1.jpg

Yeah unfortunately they are clueless,especially my oldman he stopped following Politics 30 years ago so he is so far out of the loop on the reality of Today's Republican party it's not even funny.

 

[Munky]

The real problem with SS is it's a Ponzi scheme. It requires an ever increasing contribution from young people to pay the old people. And like all Ponzi schemes, it will eventually go bust.

 

[Ninjahedge]

SS is a safety net. Something to make it so that people without the means can still afford some of the basics. It is still woefully inadequate (as we are finding with my grandmother) and full of odd requirements (between it and the other social programs.

What needs to be done with this, like ALL social needs programs, is to find a way to make it gradually peter out the better the retiree is doing financially, but not cut off all together if they make over X dollars. It needs to be something to help prevent poverty and disease of our retired individuals, but not carry them the entire way from retirement to heaven.

We seem to have this bizarre attitude of all or nothing here. For some reason people feel they are entitled to everything, or that they owe nobody anything. I think the main problem is that we have expanded so much, that the general ideals we had as smaller communities has been lost to the winds and associated with "gubbermint" to the point where we can't even sneeze without having someone help us or blaming someone for the snot.

Idunno. The problem is simple. We had a relatively simple system that too many sticky fingered politicos got their hands into and now we are going to have to fix it, or suffer the consequences.

You think this is bad, look at what Whitman did to the NJ Pension pool.....

 

[soundforbjt]

How did you plan and save for your retirement? Pensions?
Pensions are not immune. Many people that work for local governments and municipals are getting their pensions cut. There's a story about some town going broke and cutting their pension benefits here like every month.

Many people also gained their IRA's, etc...in the last recession.
My IRA has far outpaced the market and what I originally contributed to it.

I have substantial savings and own multiple rental properties.

 

[Ninjahedge]

If you are getting $2000/mo on your 401K, getting $1500/mo in SS matters.

If you are getting $200K/yr from your investments (with 15% tax and NO SS....), $1500/mo means jack.

There is a crossover point, but thinking that we need to even address this when the number of people it would actually effect would be less than 1% of recipients... I dunno.


We seem to like to post speculated items that really boil down to nothing and then get angry with each other as we yell back and forth about it.

Pensions for people like house reps matter more than SS.

 

[ElFenix]

Not impressed with the article. Its only point seem to boil down to 'the government has borrowed from the SS trust fund'.

Ya, that's a problem. It's not SS's fault.

Al Gore was right, we should not have allowed that.

One of the comments asked which President started that. I'm not sure, but LBJ? IIRC, LBJ moved SS into the 'general budget'.

on budget and off budget doesn't matter. LBJ moved it on budget for purposes of everyone having a baseline for discussion (hard to have a budget discussion when one guy is using one thing as a budget and another guy something else). it moved off again following reagan's commission's recommendation. but that has nothing to do with whether the gov is borrowing from it.

what allows the government to borrow from SS is the fact that SS has nearly always run surpluses, and that SS can only buy treasuries with those surpluses.

 

[Ausm]

I have substantial savings and own multiple rental properties.

^^

Same here ...it's amazing that the Rightists in here think all Liberals want a hand out. I never took a hand out for anything in life the only difference between a Republican and a Democrat is a conscience.

 

[piasabird]

Make capital gains pay SS.

 

[werepossum]

Interesting article, Svnla, thanks.

 

[actuarial]

The real problem with SS is it's a Ponzi scheme. It requires an ever increasing contribution from young people to pay the old people. And like all Ponzi schemes, it will eventually go bust.

This isn't true. SS as a paygo system (which it can be arguable whether or not it even is since they collected more than payouts for a number of years) requires a stable ratio of retired people to working people. A stable population distribution has been shown over time to be a flawed assumption, but that does not mean that it is mathematically guaranteed to go bust (like a Ponzi scheme).

If you have a constant birth rate, your real issue is people living longer as time goes on, which you can handle by raising the retirement age (which from an equity perspective makes sense).

The real issue with SS as a paygo system is that the birth rate has declined over the years. That is experience based, but doesn't make it a ponzi scheme necessarily.

The issue with SS overall is that the surplus was completely mishandled, to the point that if a private corporation had pulled the same crap they would be sued to oblivion for breaking their fiduciary responsibility. The trust fund should have been real dollars set aside and invested in a manner consistent with the long term nature of the fund. This is what Canada moved to, and while we aren't exactly rolling in CPP money, our system is equitable and sustainable, and doesn't impact the national debt in any way.

What the US government did is akin to a company collecting your money, putting it in a trust fund, and then investing that money 100% in their own bonds. It's highway robbery.

 

[ky54]

^^

Same here ...it's amazing that the Rightists in here think all Liberals want a hand out. I never took a hand out for anything in life the only difference between a Republican and a Democrat is a conscience.

There are more and more people who are abandoning the parties because they are getting wise that they are both fucking us. To think, even jokingly, that Democrats are any more conscientious than Republicans shows a complete lack of any political acumen. Both parties happily spent the Social Security funds every year regardless of who was in charge. Now the bill has come due and people are starting to squawk. Maybe they should have started squawking 30 years ago.

 

[Ausm]

There are more and more people who are abandoning the parties because they are getting wise that they are both fucking us. To think, even jokingly, that Democrats are any more conscientious than Republicans shows a complete lack of any political acumen. Both parties happily spent the Social Security funds every year regardless of who was in charge. Now the bill has come due and people are starting to squawk. Maybe they should have started squawking 30 years ago.

What does your post have to do with what I was commenting about...Yeah your're right Jack Shit.

 

[Fern]

-snip-
The trust fund should have been real dollars set aside and invested in a manner consistent with the long term nature of the fund.

So tell us where it should have been invested.

Then tell us who gets to do the investing.

Fern