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My plan to fix Social Security.

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
I'd like to bounce my plan to fix social security off people in this forum. To this date I've never heard of any politician express this idea but I think if it came up it would be very popular.

My plan is this: It's similar to the privatization of Social Security without risking it in the stock market.

Every citizen receives a government "retirement account." Their Social Security dollars go in there and everyone is automatically required to purchase US Government Bonds only, nothing else. The interest incurred on this bonds will be used to purchase more bonds.

Currently Social Security only returns about 2% return, which is only enough to cover inflation. So effectively there is ZERO return on your money in Social Security. Basically the government is forcing you to give them a low interest loan, it's theft. Government bonds return about twice as much to my knowledge.

The citizen once they hit say 65 can draw the interest on the bonds. We could also possibly allow them to draw some of the principal out, but only in small lumps, enough so it's assured they have enough money at least until the age of 90. We don't want people cashing out completely at 65 and then being broke at 80.

Here's the kicker, you can inherit your parent's bonds when they pass. Up to a certain amount, say a million dollars, which would be put in your retirement account. Anyone left would be cashed out and give to you in the form of a check or could be redistributed to the disabled. If the working class can inherit their parent's Social Security bonds then over time that would also help eliminate poverty over generations.

This plan fixed several fundamental flaws not only in Social Security but also in our government finances. We would not have to borrow money from China and India (which we do by allowing them to buy our bonds). We could instead borrow from our own citizens but the citizens have a written assurance that that money CANNOT be stolen by the government because it's in the form of US Government bonds. Currently the government is just saying "oh and yea we'll give you some cash later on in life, don't know how much though."

Works great for both. Funds the government and gives the citizen some recourse against government theft, which is what Social Security is.
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
Originally posted by: nickbits
Where does the money come from for the current people receiving SS?
They would have to stay on the old plan and it would have to be paid for by the taxpayer. It's expensive at first, but it needs to be fixed.
 

nickbits

Diamond Member
Mar 10, 2008
4,122
1
71
Originally posted by: JMapleton
Originally posted by: nickbits
Where does the money come from for the current people receiving SS?
They would have to stay on the old plan and it would have to be paid for by the taxpayer. It's expensive at first, but it needs to be fixed.
And you think that is going to be popular?
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
Originally posted by: nickbits
Originally posted by: JMapleton
Originally posted by: nickbits
Where does the money come from for the current people receiving SS?
They would have to stay on the old plan and it would have to be paid for by the taxpayer. It's expensive at first, but it needs to be fixed.
And you think that is going to be popular?
In the long run everyone will come out ahead. Only people who are short sighted would not agree with it.
 

JS80

Lifer
Oct 24, 2005
26,260
4
81
Originally posted by: JMapleton
Originally posted by: nickbits
Originally posted by: JMapleton
Originally posted by: nickbits
Where does the money come from for the current people receiving SS?
They would have to stay on the old plan and it would have to be paid for by the taxpayer. It's expensive at first, but it needs to be fixed.
And you think that is going to be popular?
In the long run everyone will come out ahead. Only people who are short sighted would not agree with it.
actually the first generation it's enacted on (us) gets effed in the A because we have to fund the baby boomers AND our own accounts at the same time.

SS will either become bankrupt or retirement will go up to 75 1/2.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
You're making the mistake of thinking that politicians want to "fix" social security, because they don't. They'd no longer be able to spend the current surplus funds that go into the general fund; and if they allowed citizens to own their SS assets they'd lose the votes of all those senior citizens who vote as a bloc to enforce their claim on those monthly SS checks.
 

fallout man

Golden Member
Nov 20, 2007
1,787
0
0
Originally posted by: JMapleton

Here's the kicker, you can inherit your parent's bonds when they pass. Up to a certain amount, say a million dollars, which would be put in your retirement account. Anyone left would be cashed out and give to you in the form of a check or could be redistributed to the disabled.
I'll be damned if I ever volunteer my hard-earned money and just have it handed to some cripples!

Here's some advice for you, cripples: GET A JOB! Why should tax-payin' Americans subsidize your laziness? If your body can still produce saliva, that saliva can be put to good ol' use lickin' some envelopes. I received an email today telling me that there's great money in that--AND you can work from home!
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,907
173
106
Originally posted by: JMapleton
-snip-
This plan fixed several fundamental flaws not only in Social Security but also in our government finances. We would not have to borrow money from China and India (which we do by allowing them to buy our bonds). We could instead borrow from our own citizens but the citizens have a written assurance that that money CANNOT be stolen by the government because it's in the form of US Government bonds. Currently the government is just saying "oh and yea we'll give you some cash later on in life, don't know how much though."

Works great for both. Funds the government and gives the citizen some recourse against government theft, which is what Social Security is.
SS is already invested in government bonds. It's just that they're a special Treasury issue.

Otherwise, your proposal fails to recognize that poorer people might get benefits in excess of what they put in. Wealthier getting less. (As your SS contribution goes up for your higher salay your benefit doesn't keep pace.). So, the poorer people will never get sufficient retirement benefits under your proposal for individual accounts. Rich people would see a benefit increase (personally I think the benefots should be 'means tested' - i.e., rich people on fat corporate pensions get no SS retirement benefits)

Then there's disability insurance etc. Your savings in your account may not be enough for sufficient benefits etc. So where will that come from if we all have individual accounts?

In other words, SS is far more complicated than most people realize, those screaminge "stealing our money" or we need a 'lockbox' are mostly mis-informed.

The SS program consists of a slew of non-related insurance programs bundled together such as:

- Retirement (the Old Age Part of OASDI)
- Disability (the "D" part)
- There is also insurance privided to minors of an SS participant if they are killed or disabled and have minor children etc
-then there's health insurance for retirees (Medicare)
- Then there's health insurance for the low income (Medicaid).

IMO, these programs should be split apart for administrative, policy and taxing purposes as a first step in reform/improvement.

Fern
 

masteryoda34

Golden Member
Dec 17, 2007
1,399
3
81
All I want is a checkbox on my tax forms that says "Opt Out." Why should I be forced to subsidize a failing program.

SS was set up in the depression. It wasn't designed to work long-term.
 

piasabird

Lifer
Feb 6, 2002
17,168
60
91
You are already being ripped off as your tax money is taken out of the general fund to pay people on social security.

Welcome to being a patsy of a taxpayer.
 

Andrew1990

Banned
Mar 8, 2008
2,155
0
0
Originally posted by: JMapleton
redistributed to the disabled.

Seems like a good plan except this,

Why should my money go to disabled people when I die if I have no children. Let them earn their own money.
 
Dec 10, 2005
21,047
2,528
126
Originally posted by: piasabird
You are already being ripped off as your tax money is taken out of the general fund to pay people on social security.

Welcome to being a patsy of a taxpayer.
Talk about misinformed. Currently, SS taxes bring in more money than SS is paying out, so you're not paying out of the general fund. If you're bitching about SS money being used to supplement the general fund, you have some valid complaints. Though, as for the whole "lock box" nonsense, what are they supposed to do? Stick SS funds under the mattress? They're invested in treasury bonds. It's just that Congress decided to say "hey, we have all this extra money..... let's spend it!" and have had a field day since. Probably doesn't hep that no one wants to raise general taxes to cover the excess spending, so we'll just be taxed later when we have larger budget shortfalls.

Originally posted by: Andrew1990
Originally posted by: JMapleton
redistributed to the disabled.
Seems like a good plan except this,

Why should my money go to disabled people when I die if I have no children. Let them earn their own money.
Yeah! Take that you cripples.
 

miketheidiot

Lifer
Sep 3, 2004
11,062
1
0
Originally posted by: JS80
Originally posted by: JMapleton
Originally posted by: nickbits
Originally posted by: JMapleton
Originally posted by: nickbits
Where does the money come from for the current people receiving SS?
They would have to stay on the old plan and it would have to be paid for by the taxpayer. It's expensive at first, but it needs to be fixed.
And you think that is going to be popular?
In the long run everyone will come out ahead. Only people who are short sighted would not agree with it.
actually the first generation it's enacted on (us) gets effed in the A because we have to fund the baby boomers AND our own accounts at the same time.

SS will either become bankrupt or retirement will go up to 75 1/2.
ss never becomes bankrupt.

double the income range that pays payroll tax. Now ss is solvent until the end of time. crazy how simple that was
 

scruffypup

Senior member
Feb 3, 2006
371
0
0
There are some simple ideas already out there that would make SS better funded for the long run,....

increasing the number of calculated years from 35 to 37
increasing the number of credits from 40 (10 years)
increasing the limit at which high earners can be taxed
increasing the full retirement benefit age to 67 to reflect increase in longevity and working years of the average American.

Some slight tweaking with these 4 areas can make a huge difference in the long run, effect the ones already on social security or nearing very minimally or not at all, and in the long run also not dramatically effect most people's benefits,...

The first one alone would penalize low lifetime earners http://www.ssa.gov/policy/docs...ybriefs/pb2008-02.html
(those especially who had many years of no work), it is debatable whether that is fair or not,.. however if you then increase the limit at which high earners are taxed, and limit the overall max benefit,.. you can then compensate for the ones that would be hurt by this by replacing zero dollar earned years with a minimum of x amount,... for instance.

Stronger standards for disability could go a long way as well,... there is a lot of scamming in this area.

Survivor benefits is another area that could possibly be tweaked some.

This program was not initially setup for people's retirement, but many people don't think about retirement and just rely on this nowdays,.... Americans need to be more self reliant for themselves as they were in the past, that is part of the reason (in my opinion), America is going down the tubes and will eventually become a second tier country.

I don't think privatizing is the way to go,... if you let people (or a company on your behalf) invest for you, the only guaranteed way to get a similar return is to invest in government treasuries,... otherwise as with every investment you incur more risk,... and you would have some amount of "management fees" subtracted from the returns,... more risk for a better return sounds good to some,... and maybe if you are in the younger stages of your career,.. or those who have other options to fall on,... but a very very very bad idea if entering or in retirement or counting on this to be your only retirement income.
 

CPA

Elite Member
Nov 19, 2001
30,322
4
0
Wait a minute - so an individual can't inherit their parents estate BUT can inherit their parents Social Security account?

At least be consistent.
 

imported_Lothar

Diamond Member
Aug 10, 2006
4,559
1
0
Originally posted by: CPA
Wait a minute - so an individual can't inherit their parents estate BUT can inherit their parents Social Security account?

At least be consistent.
Yeah, that didn't make any sense.
 

IronWing

No Lifer
Jul 20, 2001
62,110
15,351
136
Originally posted by: Brainonska511

Talk about misinformed. Currently, SS taxes bring in more money than SS is paying out, so you're not paying out of the general fund. If you're bitching about SS money being used to supplement the general fund, you have some valid complaints. Though, as for the whole "lock box" nonsense, what are they supposed to do? Stick SS funds under the mattress? They're invested in treasury bonds. It's just that Congress decided to say "hey, we have all this extra money..... let's spend it!" and have had a field day since. Probably doesn't hep that no one wants to raise general taxes to cover the excess spending, so we'll just be taxed later when we have larger budget shortfalls.
SS funds are used to buy treasury bonds. Treasury bonds are debt. Congress has to spend money beyond its means to create the need to issue the debt. If the spending is wise and contributes to future revenue generation, all is well. If Congress actually balances the budget and the Treasury issues no debt then SS funds would go where? If the funds are simply placed "on account" then there would be no reason the funds would earn any interest, not even to keep pace with inflation. Alternatively, the funds could be invested in other types of public or private bonds but then we would face the prospect of the SS fund holding lots of private debt and it would be reasonable for the SS trustees to exert influence on the debtors to see that the funds are repaid. SS funds could be used to buy stocks but as we've seen in the few short weeks the public has owned AIG, the public has no tolerance/patience/stomach for owning private companies. We've also seen that Congress is 100% incapable of not meddling in the operations of government-owned companies so if SS funds were invested in private bonds or stocks we can expect endless political intervention and corruption.

 

Fear No Evil

Diamond Member
Nov 14, 2008
5,922
0
0
I thought there was no problem with Social Security? Isn't that what the democrats said when Bush said he wanted to fix it?
 

IronWing

No Lifer
Jul 20, 2001
62,110
15,351
136
There is no unsolvable problem with SS. We can either fix it by increasing the tax base as stated above or by continuing to inflate away the value of current and future benefits which is the plan we've followed since the last SS "fix" back in the '80s.
 

shira

Diamond Member
Jan 12, 2005
9,567
5
81
Originally posted by: Fear No Evil
I thought there was no problem with Social Security? Isn't that what the democrats said when Bush said he wanted to fix it?
Correct. SS can be fixed with several minor changes: A small change in the percentage withheld, a small increase in the retirement age, a small reduction in the formula used to compute inflation, an increase in the maximum wage subject to the tax.

I really don't understand why people focus on SS when it's medicare, not SS, that's the blue whale in the china shop.
 

miketheidiot

Lifer
Sep 3, 2004
11,062
1
0
Originally posted by: CPA
Wait a minute - so an individual can't inherit their parents estate BUT can inherit their parents Social Security account?

At least be consistent.
yeah i noticed that too
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
Originally posted by: CPA
Wait a minute - so an individual can't inherit their parents estate BUT can inherit their parents Social Security account?

At least be consistent.
SS is intended to give inheritance to the middle and lower classes, this help solve poverty. However I don't believe in inheriting large dynasties for thr wealthy which is more than just money, it's power and influence.
 

ericlp

Diamond Member
Dec 24, 2000
6,082
188
106
That's not the problem .... The problem is... People that have not worked a day in their life automatically get on it. And people that die in their 50's that have put in the system for 30 or so years die and get jack shit. It's rigged and the odds are not in your favor.

And let's don't forget all the pfreaks that get on it for some sort of ailment that they sued and won to get on early. Oh and don't forget that bush and others have dipped into SS you know wrote out an IOU .... If politicians kept their fingers out of the pot and made it right so people just couldn't get a free ride SS would be a great retirement system today.

SS is not broke, it's the politicians that broke it. If you think you can fix it then politicians will find a way to get your money again. Your screwed either way. The system is broke and tables are tilted not in your favor.

Good Luck living long enough to get your fair share.
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
Originally posted by: ericlp
That's not the problem .... The problem is... People that have not worked a day in their life automatically get on it. And people that die in their 50's that have put in the system for 30 or so years die and get jack shit. It's rigged and the odds are not in your favor.

And let's don't forget all the pfreaks that get on it for some sort of ailment that they sued and won to get on early. Oh and don't forget that bush and others have dipped into SS you know wrote out an IOU .... If politicians kept their fingers out of the pot and made it right so people just couldn't get a free ride SS would be a great retirement system today.
Well in all fairness, SS was originally intended to be a form of welfare, not a government run 401k (which I would like it to be).
 

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