Can someone please explain social security to me?

[b0mbrman]

Originally posted by: Fenixgoon
What benefits are gained from SS?

Old people not being very poor. The confidence to live and take chances and know that if everything goes horribly wrong, you can live with some dignity in old age.

As in, what kind of things will SS pay for?

Food. Shelter from the elements.

Being 22, I haven't the slightest clue, and I don't expect SS to pay me any meaningful amount of money when I retire.

So invest. Social security is the safety net, not the trapeze

Social security uses funds from current workers to pay off current retirees who are owed money.

True.

In principle it sounds basically like a pyramid scheme. Use money from current investors (current working force) to pay off previous ones (retirees).

Social security just requires the same number of people paying in. A pyramid scheme requires more money put into it in each subsequent round. If you can't see the difference, there's a reason that they call it a

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Everything is nice until you can't find anymore investors (tax revenue not sufficient).

You mean when people stop screwing to have babies?

Then you're screwed.

How awkward...

First, how does this sound like a good idea?

The elderly are guaranteed enough to have a bit to eat and live...and a bit of dignity.

Obviously back in the 1930's it seemed like a good idea at the time, enough for people to pass it...

Did old people stop needing food and shelter sometime between the 1930s and now?

but for a system that we know is going to go completely bankrupt in the near future,

Who says?

why don't we bother changing it or scrapping it entirely altogether?

There are many parts of it that need fixing, but it has been pretty successful at achieving its goals.

Yes, I know the elderly have the highest voting rate of any demographic, and that's (partially) why it's still here.

I suppose that's one of the reasons, but I should hope that voters of all ages look to their parents as well as looking forward to their own retirement and at all the potential bumps in the road and think it's a good idea.

The reason I ask is because I'm deeply concerned about the financial health of our country -

Great, but social security shouldn't be at the top of your list of concerns

congressmen are always looking to add to bills and programs, never take away.

Each of those programs has lobbyists...and those lobbyists are very good at misleading those members' constituents

How long until we realize that the only real way to become fiscally responsible is to cut the fat and trim down programs across the entire government.

Spending on social security, Medicare, defense, and veterans make up 3/4 of discretionary spending. Write your (Republican) Congressman and tell him that if he cuts those, you'll let all your friends know about it.

Individuals get out of debt only by reducing spending.

...or taking more in

They don't just magically make significantly more amounts of money that let them easily pay off said debt.

Oops.

We can't just tax our way out of deficit because that completely kills any motivation/momentum for economic growth.

Google "Laffer curve."

 

[Mursilis]

Originally posted by: TheSkinsFan

Originally posted by: Mursilis

Originally posted by: her209
The biggest problem with SS is that the politicians use it as another source of income to fund their pet projects.

Because that's what it is - a tax. Congress can spend it on whatever they want, and that's perfectly legal. You've got no contractual right to getting one dime back.

Therein lies my entire problem with SS, as that is not how the program is or was sold to the American people. :|

And that's why it's mandatory - no intelligent person would join up willingly.

 

[sandorski]

Originally posted by: TheSkinsFan

Originally posted by: sandorski

Originally posted by: TheSkinsFan

Originally posted by: Craig234
I hope no one else has question about that, but in case they do, we have someone who is just making wild attacks based on projecting their own partisan blind following of ideology - it's a waste of time to answer why my support for SS is based on the benefits versus the costs when he's so irrational to make the attack he did that it's for any liberal program; there's no logic to his post, it's simply 'because taxes are bad, any program that needs any taxes is bad' type nonsense. His answer to more needing SS is 'tough, starve'.

Maybe his point is that any program that requires taxes to be raised every few years, in order to maintain said program's solvency, is bad...? Maybe he sees no end in sight for those tax raises...? Could that be it?

The only reason for Increases is due to the Demographic Bubble. It's not the Program, it's Demographics.

So, you foresee an end to the SS tax increases based on the last 60 years worth of regular increases being the result of a "bubble"...? When will the peak of this "bubble" be reached, and just how high are you willing to see the rates go? What SS tax rate would you consider too high?

AFAIK 2040 is approx the end of the Bubble. As for SS Rates in general(ignoring the Bubble) they will always Increase in Real Number terms, not percent, simply because of Inflation.

 

[classy]

There is nothing wrong with SS. It helps pay for basic necessities for retired older people. If the damn republicans under Bush had not raped it to give out those $600 checks, SS in its present form would not have had to be overhauled for at least another 35-50 years. People complained about when Clinton taxed folks in the 90s, but what the republicans don't say is, he kept the money and didn't waste it. Thats why we had a surplus. And the surplus was suppose to go towards shoring up SS. But in less than 5 years of stealing from SS by the republicans and fighting all of GWBs wars, SS now needs to be overhauled in less than 20 years. But hell the same idiots whining are the same fools who supported a ticket with a nitwit like Palin on it. Stupid is as stupid does.

 

[shira]

Originally posted by: ElFenix

Originally posted by: shira

Originally posted by: ElFenix
anyway, SS takes from the least wealthy and gives to the most wealthy, when sorted by age group. it's reverse robinhood.

You're lying, amazingly ignorant, or both.

In fact, the return on "investment" for the poorest workers is the MUCH higher than for the well-off.

The SS formula, starts with the recipient's highest 35-years of indexed earnings subject to the SS tax, and then determines the recipient's average (indexed) monthly earnings (AIME). Given the AIME, the so-called "Primary Insurance Amount" (PIA) benefit amount is computed as 90% of of the AIME below $744 (for 2009), 32% of AIME between $744 and $4483, and 15% of the AIME figure between $4483 and $8900.

Thus, a minimum-wage worker whose average (indexed) earnings were $8000 a year, would receive (at age 65) a monthly benefit of $600, or $7200 a year, a full 90% of their average earnings.

A moderate-earnings worker whose average indexed earnings were $50,000 a year would receive a monthly benefit of $1765, or $21,178 a year, or 42% of their average earnings.

Finally, a worker who earned on average the maximum wage subject to SS tax ($106,800), would receive $30,343 a year, or 28% of their average earnings.

SS payments are HEAVILY skewed in favor of lower-earning workers, and to accomplish this, the highest earners GREATLY subsidize those at the bottom.

So your post is an out-and-out falsehood.

wow, did you completely miss the bolded or what?

edit: i'm running some annuity calculations and i'm not liking what i'm seeing.

And when you're older, you'll be on the receiving end. And a hell of a lot further ahead than those fools who a few short years ago desperately wanted to privatize SS so that all of us could reap the amazing benefits "guaranteed" by the markets.

SS is intended to be the FOUNDATION of a well-planned-for retirement. It's something you can count on, not the best possible return on investment (which NO ONE can guarantee). But the existence of SS is not preventing you or anyone else from also doing your own investing (in a 401K (or equivalent), a Roth IRA, the private markets, and in plain old savings.)

 

[Mursilis]

Originally posted by: shira
But the existence of SS is not preventing you or anyone else from also doing your own investing (in a 401K (or equivalent), a Roth IRA, the private markets, and in plain old savings.)

How can you say that? The existence of SS and the mandatory taxes it takes definitely prevent many people from doing their own investing, since there's precious little left after SS takes its cut. Why isn't it optional? Why can't people opt into SS, or have the money placed instead into their own 401K-type plan?

 

[TheSkinsFan]

Originally posted by: Mursilis

Originally posted by: shira
But the existence of SS is not preventing you or anyone else from also doing your own investing (in a 401K (or equivalent), a Roth IRA, the private markets, and in plain old savings.)

How can you say that? The existence of SS and the mandatory taxes it takes definitely prevent many people from doing their own investing, since there's precious little left after SS takes its cut. Why isn't it optional? Why can't people opt into SS, or have the money placed instead into their own 401K-type plan?

The SS system is seemingly past the point of no-return. If they were to make it optional at this late stage, the entire program would quickly self-destruct when the vast majority of taxpayers righteously opt out. It has essentially become a forced endless loop at this point, with our only hope for the loop ever ending being the hypothetical breaking point at which the system implodes on its own accord -- unless, of course, the Government simply keeps raising SS taxes forever. Then, we'll either become slaves or revolt.

Cool, eh?

 

[DesiPower]

infact bernard madoff did testify that he got the idea from SS.

In fact the problem is that Americans still beileve that govt has to or will honor everything it says or promises. Those days are gone by far. America is turning into a tried world country. more than 30% of the population in the country dont contribute in anyway in terms of taxes/SS/MC. There is no way 65%-70% of the population can pay for the Medical, food and welfare of the entire nation. The whole system along with the infrastructure will fail in the next 15 to 20 years. We will be a 3rd world country pretty soon. Sooooooo, SSN is the least of your worries

 

[Suspicious-Teach8788]

Originally posted by: TheSkinsFan

Originally posted by: Mursilis

Originally posted by: shira
But the existence of SS is not preventing you or anyone else from also doing your own investing (in a 401K (or equivalent), a Roth IRA, the private markets, and in plain old savings.)

How can you say that? The existence of SS and the mandatory taxes it takes definitely prevent many people from doing their own investing, since there's precious little left after SS takes its cut. Why isn't it optional? Why can't people opt into SS, or have the money placed instead into their own 401K-type plan?

The SS system is seemingly past the point of no-return. If they were to make it optional at this late stage, the entire program would quickly self-destruct when the vast majority of taxpayers righteously opt out. It has essentially become a forced endless loop at this point, with our only hope for the loop ever ending being the hypothetical breaking point at which the system implodes on its own accord -- unless, of course, the Government simply keeps raising SS taxes forever. Then, we'll either become slaves or revolt.

Cool, eh?

Well we need to transform it beyond a PAYGO system. People need to fund THEMSELVES. Someone's going to have to suffer. Do you want people to receive no benefits now or do you want people being forced to pay but receiving no benefits in the future.

If you let people opt out now, you need to make them pay a bit too. Yes it's sad we young people who might have an option to opt out and put our money in a better form of ROI must still pay, but I suppose this is a compromise so the other poor idiots don't suffer.

Someone's gotta suffer. I say pull the plug now, but then again I'm young and I'm willing to sacrifice 1 year's worth of FICA taxes for not having this SS bankruptcy issue and a stupid spending that's merely a scam.

I wish people could opt out just as easily.

SS was created so people would have a minimum standard BEYOND the average life expectancy. Many people treat it as a retirement fund now. Your 401k is for that purpose. Not the SS system.

 

[bamacre]

SS has resulted in being a way for the wealthy to avoid some of the progressive income tax, with the excess burden placed everyone else, i.e., middle and lower class Americans. The money collected for SS is spent on anything they wish, it basically just goes into general revenue, nothing is actually saved. The only things in the "lock box" are bonds, government borrowing money from itself. It's welfare for the old, paid for by the younger, no matter their income. It is basically a ponzi scheme, it works on the same principal. It works because people are forced to participate. However, when there are more older people than younger people, more recipients than payers, it doesn't work as well, and that occurrence is just now coming into existence as baby boomers have just started retiring.

If SS is so "successful," then why would no one participate if they weren't forced to do so? If you think it is "successful" because of it's results, then why support the way it is structured? Why the non-progressive manner in which SS money is collected? Why should the $8/hour McDonalds employee pay just as much as a Wall Street $250,000/yr employee for SS? We don't tax that way when we pay for Iraq or for Wall Street bailouts or anything else.

 

[sandorski]

Originally posted by: DesiPower
infact bernard madoff did testify that he got the idea from SS.

In fact the problem is that Americans still beileve that govt has to or will honor everything it says or promises. Those days are gone by far. America is turning into a tried world country. more than 30% of the population in the country dont contribute in anyway in terms of taxes/SS/MC. There is no way 65%-70% of the population can pay for the Medical, food and welfare of the entire nation. The whole system along with the infrastructure will fail in the next 15 to 20 years. We will be a 3rd world country pretty soon. Sooooooo, SSN is the least of your worries

Ya, Madoff is a good guy to trust. :roll:

What he did had no relation to SS, at all.

 

[Craig234]

Originally posted by: bamacre
The only things in the "lock box" are bonds, government borrowing money from itself. It's welfare for the old, paid for by the younger, no matter their income. It is basically a ponzi scheme, it works on the same principal. It works because people are forced to participate. However, when there are more older people than younger people, more recipients than payers, it doesn't work as well, and that occurrence is just now coming into existence as baby boomers have just started retiring.

You're talking not about Social Security overall, but the Social Security trust fund created by Reagan, and abused ever since.

And Social Security is *not* a Ponzi scheme - come on, you are more informed than that, and appear to be getting reckless with the hyperbole, for some reason.

A Ponzi scheme has the same inherent structure as the Pyramid scheme, which someone even made a little picture of to debunk previously.

If SS is so "successful," then why would no one participate if they weren't forced to do so? If you think it is "successful" because of it's results, then why support the way it is structured? Why the non-progressive manner in which SS money is collected? Why should the $8/hour McDonalds employee pay just as much as a Wall Street $250,000/yr employee for SS? We don't tax that way when we pay for Iraq or for Wall Street bailouts or anything else.

Why do 401(k)'s need restrictions on withdrawal, if saving for retirement is such a good thing? People wouldn't withdraw the money and spend it, would they?

And he DOESN'T pay as much as the Wall Street guy, the cap is over $100,000 of wages. Up to that point you pay more - but the very wealthy don't pay much.

 

[bamacre]

Originally posted by: Craig234
Why do 401(k)'s need restrictions on withdrawal, if saving for retirement is such a good thing? People wouldn't withdraw the money and spend it, would they?

I don't think there should be restrictions on withdrawing from a 401k.

And he DOESN'T pay as much as the Wall Street guy, the cap is over $100,000 of wages. Up to that point you pay more - but the very wealthy don't pay much.

I think you may have missed my point here.