My idea to reduce poverty and eliminate social program spending.

[Spungo]

Uhh, no. They're moving away from pensions to avoid responsibility & reduce costs.

Because it's the only way to be competitive. GM is absolutely swamped by pension obligations. They've already had to declare bankruptcy once, and they'll do it again in a few years.
Right now we're seeing entire cities on the brink of bankruptcy because of pension obligations. Just like in the business world, cities need to be competitive. Jacking taxes through the roof simply causes wealthy people to move away. Detroit has extremely high taxes, so anyone with a middle class job lives outside of the city. Just like GM, Detroit is bankrupt because of pension obligations.

 

[hal2kilo]

Bring back home economics in high school.

I don't think knowing how to bake bread going to help the situation.

 

[JMapleton]

This thread is mind boggling. People are honestly arguing against a government enforced defined-contribution pension in favor of a defined-benefit pension. Can anyone guess why corporations are moving away from defined-benefit pensions? BECAUSE THEY ARE NOT SUSTAINABLE.

I'm glad someone gets it.

Defined benefit plans have been and will be the death of the federal, state, and city governments and many major companies.

 

[JMapleton]

Uhh, no. They're moving away from pensions to avoid responsibility & reduce costs.

Sustainability is not & never was more than a smokescreen for load shifting onto working people whose share of national income is constantly shrinking.

Spungo is absolutely right. How can a company or government accurately predict what sort of revenue they will be generating 30-50 years? They can't. Yet they are making crucial financial decisions based on these longshot predictions.

50 years ago, would have guessed Japanese automakers would be so dominant today and drive the big 3 automakers to the brink of bankruptcy (or over it for some)?

 

[MooseNSquirrel]

Couple of things...

1. Social Security is an anti-poverty insurance program, not a forced retirement account AKA defined benefit pension plan. As an anti-poverty program its been pretty successful. Remove the contribution cap and it would be wildly successful. Also, charge it on ANY income, not just earned. And inheritance over a sane actuarial amount. I could go on.

2. Governments have to do long term planning, even if it seems silly and of course the risk of being wrong is high. Very few companies last longer than a few years, and almost none last longer than 50. They are inherently short term focused. Public companies even more so, to their own detriment (but not their CEOs).

3. Your plan is VERY regressive from a practical point of view.

 

[JMapleton]

Couple of things...

1. Social Security is an anti-poverty insurance program, not a forced retirement account AKA defined benefit pension plan. As an anti-poverty program its been pretty successful. Remove the contribution cap and it would be wildly successful. Also, charge it on ANY income, not just earned. And inheritance over a sane actuarial amount. I could go on.

Terrible idea. Do you think the government can be trusted to hold even MORE unpaid/unbacked future benefits to their balance sheet? The government will not sock this money away for you to be paid out one day, they will spend it. It will be used as a revenue source to fund spending today with the distance hope the revenue will be there 40 years from now to pay it out.

What happens when that time comes and the feds can't pay? They'll cut your benefits. They'll raise the retirement age. They'll say you'll only get 70, 50, or 20% of what was promised to you.

Open your eyes. My plan is built to stop that very thing. Government theft. This money should be put away and legally yours without question and the money should be 100% backed, dollar for dollar, not lent out with the hope of being repaid.

 

[JMapleton]

3. Your plan is VERY regressive from a practical point of view.

Exceptions could be made for the very poor and disabled. Maybe 1% of income over $100k would go towards funding the poor and disabled accounts, and only 9% of income of $100k is saved. I'm not cold and heartless and neither are most people. I understand some people cannot work. But over time, with account "inheritances" and interest accruing, wealth in the lower and middle classes would be built up.

Money would also flood into charities because I suspect many middle class and wealthy people would not spend their accounts but leave them to charity.

How can you not see my plan benefits the poor far better than what we have today?

 

[OverVolt]

Exceptions could be made for the very poor and disabled. Maybe 1% of income over $100k would go towards funding the poor and disabled accounts, and only 9% of income of $100k is saved. I'm not cold and heartless and neither are most people. I understand some people cannot work. But over time, with account "inheritances" and interest accruing, wealth in the lower and middle classes would be built up.

Money would also flood into charities because I suspect many middle class and wealthy people would not spend their accounts but leave them to charity.

How can you not see my plan benefits the poor far better than what we have today?

Oh man 70,000 pages here we come.

 

[BoberFett]

I agree except the home ownership part. 99.9% of the time it's better to own. Renters pay more than what a mortgage would be on the same house and they have to pay it till they die or move.

99.9% of the time it's better to own huh? So someone who moves frequently should buy because rent is more than a mortgage would be?

Good idea. Who doesn't like losing thousands on closing fees every year!

 

[MooseNSquirrel]

Terrible idea. Do you think the government can be trusted to hold even MORE unpaid/unbacked future benefits to their balance sheet? The government will not sock this money away for you to be paid out one day, they will spend it. It will be used as a revenue source to fund spending today with the distance hope the revenue will be there 40 years from now to pay it out.

What happens when that time comes and the feds can't pay? They'll cut your benefits. They'll raise the retirement age. They'll say you'll only get 70, 50, or 20% of what was promised to you.

Open your eyes. My plan is built to stop that very thing. Government theft. This money should be put away and legally yours without question and the money should be 100% backed, dollar for dollar, not lent out with the hope of being repaid.

Now that's just being silly, how can you consider SS theft but not your plan? Are one of those taxes = theft loonies?

You do not understand the purpose of SS. Its supposed to be insurance against poverty, not a retirement account.

Your plan would not ensure that people will not end up poor even if you take off 10% of their income. You will still need other sources of revenue to keep people from starving.

Hint: we already have that program.

 

[JMapleton]

Now that's just being silly, how can you consider SS theft but not your plan? Are one of those taxes = theft loonies?

Because you or your family get to KEEP the money you put in. What's wrong with that?

You do not understand the purpose of SS. Its supposed to be insurance against poverty, not a retirement account.

The purpose and the application are two different things. How it was originally implemented (pension/insurance plan) is irrelevant. I'm proposing a better idea that secures your payment and protects against government theft.

Your plan would not ensure that people will not end up poor even if you take off 10% of their income. You will still need other sources of revenue to keep people from starving.

Yes it absolutely would. If you work your whole life, you should have an absolute ton of money saved up. If you are unable to work, you are covered as disabled.