Can someone please explain social security to me?

[marvdmartian]

Can someone please explain social security to me?

You pay into it your whole working life, and when you retire, they give you :beer: and money. Any other questions??

 

[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.

 

[BigDH01]

Originally posted by: Druidx
You should go back an take a 2nd look at your link showing how its a "PayGo" system an not a pyramid scheme. While I agree it's not a ponzi or pyramid scheme because there is no intentional fraud involved, it sure as hell doesn't resemble their description of a Paygo system.
"So we could image that at any given time there might be, say, 40 million people receiving benefits at the back end of the pipeline; and as long as we had 40 million people paying taxes in the front end of the pipe. (There does not have to be precisely the same number of workers and beneficiaries at a given time--there just needs to be a fairly stable relationship between the two.)"
Sorry but that dos NOT describe the SS system. They make it sound like the same money going in is coming out, it's not even close. Which is why they've had to raise the SS tax multiple times.
When SS was 1st past, it said the most we would EVER pay is 3% up to $3,000 a year. After adjusting for infllation we currently pay 7 times more than the oringal max level.
http://www.justfacts.com/socialsecurity.asp

I don't know how raising taxes means it's not a PAYGO system. It was simply decided that the money coming in would not guarantee a stable payment for those collecting SS. In other words, we had to adjust the amount of money coming into and out of the pipe to ensure everyone received stable payments. That was a political decision. We could've also reduced payments and the PAYGO "pipe" would've remained the same size.

There are several problems with Social Security but it's not in danger of collapse, like what would've already happened in a Ponzi Scheme. SS can be saved by either a small increase in taxes or a small decrease in benefit payments. One would simply be enlarging the PAYGO pipe and the other would keep the pipe the same but deal with the fact that more people are collecting. Ponzi Schemes usually involve a fixed payment and require an ever increasing population to pay of their promised geometric returns. Social Security is simply a payment from workers to retirees. This payment can be adjusted based on the number of retirees or the payments to retirees can be adjusted if there are too many.

If you want to read more about demographic effects on PAYGO systems, you can read an article by the Fed here. It builds some pretty simple mathematic models and is really pretty informative. What really needs to happen at some point is that benefits will need to be reduced. The reason is the increasing cost because of the original generation 0 starting bonus (having received payments without ever paying in). This is why people confuse it with a Pyramid Scheme. However, with Social Security you can reduce payments to reflect labor income. It's why that even after the Trust Fund runs out we can still make payments. They will simply reflect real labor income and the number of retirees at that point. In other words, a PAYGO system.

 

[heyheybooboo]

Originally posted by: LunarRay ~~~snip~~~

What Securities do you propose will exist in this lockbox... the current trust fund for SS hold government securities that earn interest like any other government security... I'm sure they are locked away maybe in a box..

I'm not sure I've ever followed the 'Lockbox' logic... There can be dollars in it... pieces of paper with Washington's head on them or government securities with something on it... not sure what.. What would a lockbox do other than have given Gore something to talk about.

I think the 'lockboxed' funds should be loaned to state and local gov'ts for significant infrastructure improvements. I've yet to see any 'federal' discussion of this - and when I've brought it up around here no one has really shown me any downside.

The loans meet a critical funding need. Principle and interest re-payments to the Fed provide defined future cash flow. Citizens know where their payroll taxes are being invested.

Interest on the state and municipal bonds would be tax free. Citizens may be encouraged to invest in the bonds for their own retirement. Call then 'Security' Bonds

Taxes may be levied on municipal bond arbitrage as a disincentive (I'm sure Wall Street will love that one ) for hedging. Incentives may be offered for no-load bond funds in which folks may invest for their retirement.

State and local infrastructure projects create jobs which in turn pump more payroll taxes into the Federal trust funds.

In order to guarantee repayment States will be required to establish commissions which annually audit local government finances (many states already have such regulators in place). In the event of any anticipated or impending default the state agency will be authorized to require the community to raise local taxes to cover the debt obligation.

Originally posted by: JS80

Originally posted by: heyheybooboo

Originally posted by: JS80
We work to pay current retirees and when we are 65 there aren't enough 22 year olds to pay us so we basically get fucked. It's effectively an extra 7% tax on workers that will never see the benefit.

You are not very good at actuarial stuff, are you?

Social Security is an easy fix. Good to see you play the Fear Card, too.

I'm in finance I am fully aware of the math involved. The problem is that it's not an easy fix because it's a political issue. Good luck trying to reduce the benefits to adjust for the actuarial miscalculations. It's political suicide and will never happen until the trust runs out of money. And in the meantime the people paying in now will get fucked in the future, and the people receiving benefits now are enjoying inflated pay outs.

Oh, really?

The actuarial cost of bringing SS into balance is 1.68% projected over the next 75 years (according to the 2009 Trustee report). When disability insurance is included the projected cost is 2%.

So any 2% balance of raising the retirement age, indexing benefits, adjusting the disability program, raising the wage cap, increasing revenues, means testing or maybe even indexing benefits to life expectancy ----- and we are good through 2085.

It is projected that beyond 2085 additional adjustments in the 'range' of 1.4% may be necessary but since you profess actuarial awareness you know that estimate is meaningless.

And since you profess actuarial awareness that means you are intentionally playing The Fear Card, or at best, simply trolling.

 

[smack Down]

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.

You seem very confused. You posted all the need information yet somehow missed the forest.

If I making minimum wage of $14,500 a year I pay a SS tax that is going to a person collecting $30,343 a year. So they are getting twice the person salary paying the tax for their welfare.

 

[shira]

Originally posted by: smack Down

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.

You seem very confused. You posted all the need information yet somehow missed the forest.

If I making minimum wage of $14,500 a year I pay a SS tax that is going to a person collecting $30,343 a year. So they are getting twice the person salary paying the tax for their welfare.

So your argument is exactly what? That you should start collecting SS payments when you're 21?

When you contribute to a conventional pension plan, you don't collect anything for decades. When you contribute to SS, same thing. If you argue that there's no guarantee that SS will be around when young people today retire, you're insane, and if you think private, "guaranteed payment" pension plans are not a lot worse, then I suggest you do a little reading.

Money is fungible, so you can view SS exactly as you do a pension plan. The fact that it's PayGo is pretty much irrelevant. Relatively minor tweaks will keep it solvent forever.

Yes, the terms of SS will be tweaked in the coming years. The wage based subject to the tax will probably be increased and the tax rate itself will probably increase slightly. The formula used to compute the yearly increases will be modified. Finally, the retirement age will be pushed back slightly to reflect the fact that people are living longer.

But none of the above will change the basic concept, and young people paying into the plan now will derive substantial benefits when they reach retirement age.

Thus, this argument that the poor are paying the wealthy is a huge distortion. You're paying into a plan and thus earning substantial future benefits.

 

[Druidx]

Originally posted by: BigDH01

Originally posted by: Druidx
You should go back an take a 2nd look at your link showing how its a "PayGo" system an not a pyramid scheme. While I agree it's not a ponzi or pyramid scheme because there is no intentional fraud involved, it sure as hell doesn't resemble their description of a Paygo system.
"So we could image that at any given time there might be, say, 40 million people receiving benefits at the back end of the pipeline; and as long as we had 40 million people paying taxes in the front end of the pipe. (There does not have to be precisely the same number of workers and beneficiaries at a given time--there just needs to be a fairly stable relationship between the two.)"
Sorry but that dos NOT describe the SS system. They make it sound like the same money going in is coming out, it's not even close. Which is why they've had to raise the SS tax multiple times.
When SS was 1st past, it said the most we would EVER pay is 3% up to $3,000 a year. After adjusting for infllation we currently pay 7 times more than the oringal max level.
http://www.justfacts.com/socialsecurity.asp

I don't know how raising taxes means it's not a PAYGO system. It was simply decided that the money coming in would not guarantee a stable payment for those collecting SS. In other words, we had to adjust the amount of money coming into and out of the pipe to ensure everyone received stable payments. That was a political decision. We could've also reduced payments and the PAYGO "pipe" would've remained the same size.

There are several problems with Social Security but it's not in danger of collapse, like what would've already happened in a Ponzi Scheme.

You're arguing with the wrong person, I said it wasn't a Ponzi or pyramid scheme. I was simply pointing out it didn't fit it's own description of "paygo" ( in equals out ). Which is why the tax has been raised 9 times an is currently 7 times higher after adjusting for inflation, then what the GOV said it would be when SS was passed. Paygo is also inherently sustainable, SS is not. People can argue all they want on if SS will fail, the only honest question isn't if but when.
Form SS own predictions the trust fund will fail around 2040.
http://www.ssa.gov/OACT/TR/TR02/lr6E8-2.html
This is their best case scenario, their worst case scenario says the fund will run out of money in 2029
In my opinion it's wishful thinking when people suggest it will only require minor "tweaks" over the next few decades. It's taken a lot more than minor tweaks to keep it going this far, a 700% tax increase from when it started. Plus who and how will it been done, as it would be political suicide. It's going to be just like our budget deficits and dept are now, passed on to the next guy until it to late to fix.

 

[Craig234]

Originally posted by: Druidx
[Which is why the tax has been raised 9 times an is currently 7 times higher after adjusting for inflation, then what the GOV said it would be when SS was passed. Paygo is also inherently sustainable, SS is not. People can argue all they want on if SS will fail, the only honest question isn't if but when.
Form SS own predictions the trust fund will fail around 2040.
http://www.ssa.gov/OACT/TR/TR02/lr6E8-2.html
This is their best case scenario, their worst case scenario says the fund will run out of money in 2029
In my opinion it's wishful thinking when people suggest it will only require minor "tweaks" over the next few decades. It's taken a lot more than minor tweaks to keep it going this far, a 700% tax increase from when it started.

1. If the taxation has 'gone up 700%', how much have the payments to citizens increased? You left that out. The need is far greater now than earlier.

2. Since you have an opinion on the 'fixes' needed attacking a position, why don't you bother to post some facts about the sizse of the problem and math why they're wrong?

 

[TheSkinsFan]

Originally posted by: heyheybooboo

Originally posted by: TheSkinsFan

Topic Title: Can someone please explain social security to me?

It's just another Federal tax/entitlement program -- a.k.a. "Welfare for old people"

1. The Federal Goverment takes your money under the guise of helping you pay into your own retirement plan.
2. They then give some of your money to the older retired people who have had their money taken from them for several decades.
3. They use the rest of your money to pay for pet projects and other fun-filled spending that they couldn't properly budget for otherwise.
4. 20-40 years from now, when you are ready to retire, the program may no longer be around, so you may never see a dime of the money you paid into the program in the form of a monthly check; or, they could continue to raise the taxes for SS every few years to compensate for their irresponsible use of your money.

That's Social Security. It's just another tax, plain and simple. If the Government wanted to be honest about it, they'd simply add it to everyone's annual Federal income tax rates and be done with it -- across the board, including the poor (Can you say "political shitstorm"?). Then, when you retire, by adding up your total lifelong wages listed on every tax return, they could easily compute the amount you should receive in the mail from their "Welfare for Old People Entitlement Program."

/thread

Or we could spend more trillions on cleaner more friendly nukes, huh?

I take it that you're are not refuting anything I wrote...?

smart move.

 

[TheSkinsFan]

dp.

 

[cubby1223]

Originally posted by: ModerateRepZero

Originally posted by: cubby1223
Social Security is a Ponzi scheme on steroids. As long as there are continue to be enough workers paying into the system, it works. If a time comes there are not enough paying in to cover those receiving, we'll be in a lot of pain.

it annoys me to no end when I hear people spout ignorance like that. Yes, Social security involves paying recipients (retirees) money gained from individuals (workers). HOWEVER, the difference is that Ponzi schemes/pyramid schemes involve an element of FRAUD to it. Furthermore, pyramid scheme participants purportedly get a scaling benefit due to the number of connections (direct and indirect) they make.

Madoff's investments were a ponzi scheme because of his claim that his investment returns were due to his investment acumen and not because he was 'robbing Peter to pay Paul'.

In contrast, social security IS what it purports to be; a government-backed social welfare and social insurance program for individuals who meet certain requirements.

Social Security and Ponzi schemes operate on the same underlying principles. The only difference are the rules of who pays in and who receives out.

The biggest issue I have with Social Security is guaranteeing benefits that the government knows darn well it cannot guarantee. Same with a Ponzi scheme.

 

[cubby1223]

Originally posted by: Craig234

Originally posted by: ChunkiMunki
maybe they should tax incomes above $106,000, instead of stopping at that limit, to shore up the trust fund.

Sounds like a fine idea to me.

Social Security is not meant to be a wealth redistribution program, the idea for the most part is to take out what you put in - which is why I'm sure there's the income limit.

 

[Craig234]

Originally posted by: cubby1223

Originally posted by: Craig234

Originally posted by: ChunkiMunki
maybe they should tax incomes above $106,000, instead of stopping at that limit, to shore up the trust fund.

Sounds like a fine idea to me.

Social Security is not meant to be a wealth redistribution program, the idea for the most part is to take out what you put in - which is why I'm sure there's the income limit.

I'm sick of the right-wing blind ideology that ignores the needs of society to follow dogma, and turns a blind eye to policies shifting wealth to the top while attacking only others.

The SS cap was fine when there were fewer people who needed it and income was less concentrated. That's changed.

 

[cubby1223]

Originally posted by: Craig234

Originally posted by: cubby1223

Originally posted by: Craig234

Originally posted by: ChunkiMunki
maybe they should tax incomes above $106,000, instead of stopping at that limit, to shore up the trust fund.

Sounds like a fine idea to me.

Social Security is not meant to be a wealth redistribution program, the idea for the most part is to take out what you put in - which is why I'm sure there's the income limit.

I'm sick of the right-wing blind ideology that ignores the societal situation and turns a blind eye to policies sending wealth up and attacks any adjustments that re-balances it a bit.

And exactly what did I attack, Mr. I-Know-Everything? Is it evil radical ideology to call something what it is?

 

[heyheybooboo]

Originally posted by: TheSkinsFan

Originally posted by: heyheybooboo

Originally posted by: TheSkinsFan

Topic Title: Can someone please explain social security to me?

It's just another Federal tax/entitlement program -- a.k.a. "Welfare for old people"

1. The Federal Goverment takes your money under the guise of helping you pay into your own retirement plan.
2. They then give some of your money to the older retired people who have had their money taken from them for several decades.
3. They use the rest of your money to pay for pet projects and other fun-filled spending that they couldn't properly budget for otherwise.
4. 20-40 years from now, when you are ready to retire, the program may no longer be around, so you may never see a dime of the money you paid into the program in the form of a monthly check; or, they could continue to raise the taxes for SS every few years to compensate for their irresponsible use of your money.

That's Social Security. It's just another tax, plain and simple. If the Government wanted to be honest about it, they'd simply add it to everyone's annual Federal income tax rates and be done with it -- across the board, including the poor (Can you say "political shitstorm"?). Then, when you retire, by adding up your total lifelong wages listed on every tax return, they could easily compute the amount you should receive in the mail from their "Welfare for Old People Entitlement Program."

/thread

Or we could spend more trillions on cleaner more friendly nukes, huh?

I take it that you're are not refuting anything I wrote...?

smart move.

Why?

You've adding nothing of substance nor provided evidence of anything.

You voiced your opinion, and I followed up by noting your interest in developing cleaner more friendly nukes. You have submitted no, zip, zilch, zero, nada evidence - only an opinion. We all know what opinions are like and I don't want to argue with you over your opinion.

In legal parlance my comment was 'building a foundation'. You have also noted the need for the development of cleaner, more friendly nukes.

Now I will give you my opinion. Stick a friendly nuke where the Sun don't shine.

The United States has spent over $5.5 trillion on the manufacture of nuclear weapons since 1950.

Since 1980 the United States has spent over $8 trillion in interest alone financing VooDoo Tax Cut economics and the further expansion of the military industrial complex.

Since 2001 the United States has effectively borrowed an amount in the range of $2.4 trillion to wage its Wars in Iraq and Afghanistan (through 2018) - a number that most likey rise to in excess of $3 trillion before the last shot is fired.

From 2010 to 2018 the United States will spend over $8.3 trillion dollars on 'Defense' while spending $6 trillion on the Discretionary budget (which includes $600 billion for veteran affairs apart from DoD funding). An additional increase of $500 billion is proposed for mandatory veteran benefits (as typical, Dems support veterans with actions and Contards simply provide lip service).


So excuse me when I laugh and choose not to refute your opinion on payroll taxes when you offer none on mine.

You clearly have no interest in spending $90 billion a year to reform and promote health care in the United States BUT have no problem spending trillions elsewhere.

I see where you are coming from.

 

[ModerateRepZero]

Originally posted by: cubby1223

Originally posted by: ModerateRepZero

Originally posted by: cubby1223
Social Security is a Ponzi scheme on steroids. As long as there are continue to be enough workers paying into the system, it works. If a time comes there are not enough paying in to cover those receiving, we'll be in a lot of pain.

it annoys me to no end when I hear people spout ignorance like that. Yes, Social security involves paying recipients (retirees) money gained from individuals (workers). HOWEVER, the difference is that Ponzi schemes/pyramid schemes involve an element of FRAUD to it. Furthermore, pyramid scheme participants purportedly get a scaling benefit due to the number of connections (direct and indirect) they make.

Madoff's investments were a ponzi scheme because of his claim that his investment returns were due to his investment acumen and not because he was 'robbing Peter to pay Paul'.

In contrast, social security IS what it purports to be; a government-backed social welfare and social insurance program for individuals who meet certain requirements.

Social Security and Ponzi schemes operate on the same underlying principles. The only difference are the rules of who pays in and who receives out.

The biggest issue I have with Social Security is guaranteeing benefits that the government knows darn well it cannot guarantee. Same with a Ponzi scheme.

"same underlying principles"? baloney. A ponzi scheme is BASED on fraud since it promises IMPOSSIBlE returns to investors, and gets the money to pay investors based on money from earlier investors. Naturally instead of disclosing that, ponzi schemers instead claim that due to their investing acumen or 'proprietary techniques/programs' that's how they gain their returns. Social security doesn't have that kind of fraud, and for you to suggest that is to admit that you really don't know what you're talking about.

As for the second issue, that is neither fraudulent nor ponzi schemes. I'll give a similar and very real scenario: an insurance company sells insurance to buyers promising that it will cover them in certain disaster/worst case scenarios (ie hurricane). Then a lvl 4 hurricane causes massive and unforseen dmg, bankrupting the company because the claims outweigh whatever profits that the company made by selling the insurance.

I bring this up because when social security was conceived, the retirement age and the expected life expectancy was very different in the 1930s then it is today; retirees weren't expected to live on average more than 15 years. Today retirees are expected to not only live longer, but have fewer workers supporting them. And yet, a contract is a contract. Important (demographic) changes are the reason SS is in trouble, not because it is a fraud.

 

[TheSkinsFan]

Originally posted by: heyheybooboo

Originally posted by: TheSkinsFan

Originally posted by: heyheybooboo

Originally posted by: TheSkinsFan

Topic Title: Can someone please explain social security to me?

It's just another Federal tax/entitlement program -- a.k.a. "Welfare for old people"

1. The Federal Goverment takes your money under the guise of helping you pay into your own retirement plan.
2. They then give some of your money to the older retired people who have had their money taken from them for several decades.
3. They use the rest of your money to pay for pet projects and other fun-filled spending that they couldn't properly budget for otherwise.
4. 20-40 years from now, when you are ready to retire, the program may no longer be around, so you may never see a dime of the money you paid into the program in the form of a monthly check; or, they could continue to raise the taxes for SS every few years to compensate for their irresponsible use of your money.

That's Social Security. It's just another tax, plain and simple. If the Government wanted to be honest about it, they'd simply add it to everyone's annual Federal income tax rates and be done with it -- across the board, including the poor (Can you say "political shitstorm"?). Then, when you retire, by adding up your total lifelong wages listed on every tax return, they could easily compute the amount you should receive in the mail from their "Welfare for Old People Entitlement Program."

/thread

Or we could spend more trillions on cleaner more friendly nukes, huh?

I take it that you're are not refuting anything I wrote...?

smart move.

Why?

You've adding nothing of substance nor provided evidence of anything.

You voiced your opinion, and I followed up by noting your interest in developing cleaner more friendly nukes. You have submitted no, zip, zilch, zero, nada evidence - only an opinion. We all know what opinions are like and I don't want to argue with you over your opinion.

In legal parlance my comment was 'building a foundation'. You have also noted the need for the development of cleaner, more friendly nukes.

Now I will give you my opinion. Stick a friendly nuke where the Sun don't shine.

The United States has spent over $5.5 trillion on the manufacture of nuclear weapons since 1950.

Since 1980 the United States has spent over $8 trillion in interest alone financing VooDoo Tax Cut economics and the further expansion of the military industrial complex.

Since 2001 the United States has effectively borrowed an amount in the range of $2.4 trillion to wage its Wars in Iraq and Afghanistan (through 2018) - a number that most likey rise to in excess of $3 trillion before the last shot is fired.

From 2010 to 2018 the United States will spend over $8.3 trillion dollars on 'Defense' while spending $6 trillion on the Discretionary budget (which includes $600 billion for veteran affairs apart from DoD funding). An additional increase of $500 billion is proposed for mandatory veteran benefits (as typical, Dems support veterans with actions and Contards simply provide lip service).

So excuse me when I laugh and choose not to refute your opinion on payroll taxes when you offer none on mine.

You clearly have no interest in spending $90 billion a year to reform and promote health care in the United States BUT have no problem spending trillions elsewhere.

I see where you are coming from.

Drop the nukes, Iraq, and other bullshit, or where you think I'm "coming from."

Prove to me that you have more than one braincell and try to comment, point by point, on my summary of SS above. Show me where you think my opinion of SS is inaccurate, continue to look like an diversionary idiot, or shut the fuck up already.

Your choice.

 

[smack Down]

Originally posted by: shira

Originally posted by: smack Down

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.

You seem very confused. You posted all the need information yet somehow missed the forest.

If I making minimum wage of $14,500 a year I pay a SS tax that is going to a person collecting $30,343 a year. So they are getting twice the person salary paying the tax for their welfare.

So your argument is exactly what? That you should start collecting SS payments when you're 21?

When you contribute to a conventional pension plan, you don't collect anything for decades. When you contribute to SS, same thing. If you argue that there's no guarantee that SS will be around when young people today retire, you're insane, and if you think private, "guaranteed payment" pension plans are not a lot worse, then I suggest you do a little reading.

Money is fungible, so you can view SS exactly as you do a pension plan. The fact that it's PayGo is pretty much irrelevant. Relatively minor tweaks will keep it solvent forever.

Yes, the terms of SS will be tweaked in the coming years. The wage based subject to the tax will probably be increased and the tax rate itself will probably increase slightly. The formula used to compute the yearly increases will be modified. Finally, the retirement age will be pushed back slightly to reflect the fact that people are living longer.

But none of the above will change the basic concept, and young people paying into the plan now will derive substantial benefits when they reach retirement age.

Thus, this argument that the poor are paying the wealthy is a huge distortion. You're paying into a plan and thus earning substantial future benefits.

Getting cents back on the dollars you "invested" is not a substantial benefits.

 

[Druidx]

Originally posted by: Craig234

Originally posted by: Druidx
[Which is why the tax has been raised 9 times an is currently 7 times higher after adjusting for inflation, then what the GOV said it would be when SS was passed. Paygo is also inherently sustainable, SS is not. People can argue all they want on if SS will fail, the only honest question isn't if but when.
Form SS own predictions the trust fund will fail around 2040.
http://www.ssa.gov/OACT/TR/TR02/lr6E8-2.html
This is their best case scenario, their worst case scenario says the fund will run out of money in 2029
In my opinion it's wishful thinking when people suggest it will only require minor "tweaks" over the next few decades. It's taken a lot more than minor tweaks to keep it going this far, a 700% tax increase from when it started.

1. If the taxation has 'gone up 700%', how much have the payments to citizens increased? You left that out. The need is far greater now than earlier.

2. Since you have an opinion on the 'fixes' needed attacking a position, why don't you bother to post some facts about the sizse of the problem and math why they're wrong?

1. Yes benefits have gone up, I neither claimed they didn't. Ultimately, that is only one more reason why SS as it is now, is unsustainable
2. Some people are claiming it will only take a small change to bring SS back to long term survivable, that's simply not true. It's just as dishonest as the people claiming it will fail regardless. Someone posted earlier how the long term Actuarial deficit only requires a 1.68% change to bring it back into check but that's per year over the next 75 years. Sure it makes it sound like a minor problem when it's broken down that way. What they failed to mention is the exact same report also says....

"Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement. "

Craig you asked me to post my opinion on the fixes needed. This isn't MY opinion, this is straight from the SS Annual report
SUMMARY OF THE 2009 ANNUAL REPORT
Do you think there is going to be an immediate 16 percent in SS tax or a 13 percent reduction in benefits? Of course not.
If it would take a 16% SS tax increase or a 13% reduction in benefits NOW, how big of a tax increase or reduction in benefits will it take by the time the problem is finally addressed?
Is anyone going to try an argue the problem won't get worse if nothing is done? If so, don't argue with me, argue with the SS Trustees

This year's Trustees Reports describe large long-term financial imbalances for Social Security and Medicare, and demonstrate the need for timely and effective action. The sooner that solutions are adopted, the more varied and gradual they can be.

 

[Craig234]

Originally posted by: Druidx
[1. Yes benefits have gone up, I neither claimed they didn't. Ultimately, that is only one more reason why SS as it is now, is unsustainable
2. Some people are claiming it will only take a small change to bring SS back to long term survivable, that's simply not true. It's just as dishonest as the people claiming it will fail regardless. Someone posted earlier how the long term Actuarial deficit only requires a 1.68% change to bring it back into check but that's per year over the next 75 years. Sure it makes it sound like a minor problem when it's broken down that way. What they failed to mention is the exact same report also says....

"Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement. "

Craig you asked me to post my opinion on the fixes needed. This isn't MY opinion, this is straight from the SS Annual report
SUMMARY OF THE 2009 ANNUAL REPORT
Do you think there is going to be an immediate 16 percent in SS tax or a 13 percent reduction in benefits? Of course not.
If it would take a 16% SS tax increase or a 13% reduction in benefits NOW, how big of a tax increase or reduction in benefits will it take by the time the problem is finally addressed?
Is anyone going to try an argue the problem won't get worse if nothing is done? If so, don't argue with me, argue with the SS Trustees

This year's Trustees Reports describe large long-term financial imbalances for Social Security and Medicare, and demonstrate the need for timely and effective action. The sooner that solutions are adopted, the more varied and gradual they can be.

Actually, I asked you to post facts, not just your opinion - and you did post some here, and it helps.

Those are two fo the variables that can be adjusted - there are others. One simply involves the rate of annual increases - there are different indexes available.

 

[smack Down]

Originally posted by: ModerateRepZero

Originally posted by: cubby1223

Originally posted by: ModerateRepZero

Originally posted by: cubby1223
Social Security is a Ponzi scheme on steroids. As long as there are continue to be enough workers paying into the system, it works. If a time comes there are not enough paying in to cover those receiving, we'll be in a lot of pain.

it annoys me to no end when I hear people spout ignorance like that. Yes, Social security involves paying recipients (retirees) money gained from individuals (workers). HOWEVER, the difference is that Ponzi schemes/pyramid schemes involve an element of FRAUD to it. Furthermore, pyramid scheme participants purportedly get a scaling benefit due to the number of connections (direct and indirect) they make.

Madoff's investments were a ponzi scheme because of his claim that his investment returns were due to his investment acumen and not because he was 'robbing Peter to pay Paul'.

In contrast, social security IS what it purports to be; a government-backed social welfare and social insurance program for individuals who meet certain requirements.

Social Security and Ponzi schemes operate on the same underlying principles. The only difference are the rules of who pays in and who receives out.

The biggest issue I have with Social Security is guaranteeing benefits that the government knows darn well it cannot guarantee. Same with a Ponzi scheme.

"same underlying principles"? baloney. A ponzi scheme is BASED on fraud since it promises IMPOSSIBlE returns to investors, and gets the money to pay investors based on money from earlier investors. Naturally instead of disclosing that, ponzi schemers instead claim that due to their investing acumen or 'proprietary techniques/programs' that's how they gain their returns. Social security doesn't have that kind of fraud, and for you to suggest that is to admit that you really don't know what you're talking about.

As for the second issue, that is neither fraudulent nor ponzi schemes. I'll give a similar and very real scenario: an insurance company sells insurance to buyers promising that it will cover them in certain disaster/worst case scenarios (ie hurricane). Then a lvl 4 hurricane causes massive and unforseen dmg, bankrupting the company because the claims outweigh whatever profits that the company made by selling the insurance.

I bring this up because when social security was conceived, the retirement age and the expected life expectancy was very different in the 1930s then it is today; retirees weren't expected to live on average more than 15 years. Today retirees are expected to not only live longer, but have fewer workers supporting them. And yet, a contract is a contract. Important (demographic) changes are the reason SS is in trouble, not because it is a fraud.

Right and please explain how the first person to get SS payed a total of $24.75 in taxes, yet received almost 1000 times that in benefits. SS has always been a pyramid scheme it was know when the system was started.

 

[miketheidiot]

Originally posted by: TheSkinsFan

Topic Title: Can someone please explain social security to me?

It's just another Federal tax/entitlement program -- a.k.a. "Welfare for old people"

1. The Federal Goverment takes your money under the guise of helping you pay into your own retirement plan.

No, the SS tax goes to pay for current retirees. There has been some saving in the programs history, but that is not its goal.

2. They then give some of your money to the older retired people who have had their money taken from them for several decades.

3. They use the rest of your money to pay for pet projects and other fun-filled spending that they couldn't properly budget for otherwise.

If thats what you call investing in treasury securites, then sure.

4. 20-40 years from now, when you are ready to retire, the program may no longer be around, so you may never see a dime of the money you paid into the program in the form of a monthly check; or, they could continue to raise the taxes for SS every few years to compensate for their irresponsible use of your money.

Do you have any proof they are using the money irresponsibly? any reason why i should fear for my future SS income other than ignorant political hacks like yourself?

That's Social Security. It's just another tax, plain and simple. If the Government wanted to be honest about it, they'd simply add it to everyone's annual Federal income tax rates and be done with it -- across the board, including the poor (Can you say "political shitstorm"?). Then, when you retire, by adding up your total lifelong wages listed on every tax return, they could easily compute the amount you should receive in the mail from their "Welfare for Old People Entitlement Program."

everyone knows its a tax. Its not added to federal income tax rates because it only applies to wage income and is very regressive.

 

[TheSkinsFan]

Originally posted by: Craig234

Originally posted by: Druidx
[1. Yes benefits have gone up, I neither claimed they didn't. Ultimately, that is only one more reason why SS as it is now, is unsustainable
2. Some people are claiming it will only take a small change to bring SS back to long term survivable, that's simply not true. It's just as dishonest as the people claiming it will fail regardless. Someone posted earlier how the long term Actuarial deficit only requires a 1.68% change to bring it back into check but that's per year over the next 75 years. Sure it makes it sound like a minor problem when it's broken down that way. What they failed to mention is the exact same report also says....

"Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement. "

Craig you asked me to post my opinion on the fixes needed. This isn't MY opinion, this is straight from the SS Annual report
SUMMARY OF THE 2009 ANNUAL REPORT
Do you think there is going to be an immediate 16 percent in SS tax or a 13 percent reduction in benefits? Of course not.
If it would take a 16% SS tax increase or a 13% reduction in benefits NOW, how big of a tax increase or reduction in benefits will it take by the time the problem is finally addressed?
Is anyone going to try an argue the problem won't get worse if nothing is done? If so, don't argue with me, argue with the SS Trustees

This year's Trustees Reports describe large long-term financial imbalances for Social Security and Medicare, and demonstrate the need for timely and effective action. The sooner that solutions are adopted, the more varied and gradual they can be.

Actually, I asked you to post facts, not just your opinion - and you did post some here, and it helps.

Those are two fo the variables that can be adjusted - there are others. One simply involves the rate of annual increases - there are different indexes available.

What other variables? What other indexes?

 

[sandorski]

Originally posted by: smack Down

Originally posted by: ModerateRepZero

Originally posted by: cubby1223

Originally posted by: ModerateRepZero

Originally posted by: cubby1223
Social Security is a Ponzi scheme on steroids. As long as there are continue to be enough workers paying into the system, it works. If a time comes there are not enough paying in to cover those receiving, we'll be in a lot of pain.

it annoys me to no end when I hear people spout ignorance like that. Yes, Social security involves paying recipients (retirees) money gained from individuals (workers). HOWEVER, the difference is that Ponzi schemes/pyramid schemes involve an element of FRAUD to it. Furthermore, pyramid scheme participants purportedly get a scaling benefit due to the number of connections (direct and indirect) they make.

Madoff's investments were a ponzi scheme because of his claim that his investment returns were due to his investment acumen and not because he was 'robbing Peter to pay Paul'.

In contrast, social security IS what it purports to be; a government-backed social welfare and social insurance program for individuals who meet certain requirements.

Social Security and Ponzi schemes operate on the same underlying principles. The only difference are the rules of who pays in and who receives out.

The biggest issue I have with Social Security is guaranteeing benefits that the government knows darn well it cannot guarantee. Same with a Ponzi scheme.

"same underlying principles"? baloney. A ponzi scheme is BASED on fraud since it promises IMPOSSIBlE returns to investors, and gets the money to pay investors based on money from earlier investors. Naturally instead of disclosing that, ponzi schemers instead claim that due to their investing acumen or 'proprietary techniques/programs' that's how they gain their returns. Social security doesn't have that kind of fraud, and for you to suggest that is to admit that you really don't know what you're talking about.

As for the second issue, that is neither fraudulent nor ponzi schemes. I'll give a similar and very real scenario: an insurance company sells insurance to buyers promising that it will cover them in certain disaster/worst case scenarios (ie hurricane). Then a lvl 4 hurricane causes massive and unforseen dmg, bankrupting the company because the claims outweigh whatever profits that the company made by selling the insurance.

I bring this up because when social security was conceived, the retirement age and the expected life expectancy was very different in the 1930s then it is today; retirees weren't expected to live on average more than 15 years. Today retirees are expected to not only live longer, but have fewer workers supporting them. And yet, a contract is a contract. Important (demographic) changes are the reason SS is in trouble, not because it is a fraud.

Right and please explain how the first person to get SS payed a total of $24.75 in taxes, yet received almost 1000 times that in benefits. SS has always been a pyramid scheme it was know when the system was started.

Complete Fail. The First Person was probably Weeks from Retirement and just got lucky. You're concept of what a Pyramid is Fails.

 

[heyheybooboo]

Originally posted by: sandorski

Originally posted by: smack Down

Right and please explain how the first person to get SS payed a total of $24.75 in taxes, yet received almost 1000 times that in benefits. SS has always been a pyramid scheme it was know when the system was started.

Complete Fail. The First Person was probably Weeks from Retirement and just got lucky. You're concept of what a Pyramid is Fails.

I love that Ass Fact. Smackie neglects to mention she lived to be over 100 years old, retired in the late 1930s and died in the 1970s - and that her average monthly benefit was $55.