Balanced Budget Amendment and Social Security
Karl Wee
biggest deliberate distortions in recent history is being perpetrated
without the electorate's awareness at all.
In the last few days of the BBA debate, Democrats
brought Social Security into the debate, saying that they would not
vote for the BBA unless the BBA would explicitly protect the Social
Security Trust Fund from being used to balance the budget.
Let me first explain some basics. Social Security has long been running a
surplus, not because the government makes a profit on an individual basis
(in fact, the average retiree takes from SS a few times more than he puts
in,) but simply because the number of retirees is relatively small so far.
The surplus will be needed for the future, much larger group of retirees.
But the government has made all this surplus into a "SS Trust Fund" that
is obligated to buy special IOUs from the government. There is no
money in the Trust Fund other than the government's promise to pay back.
If the government had been more honest, it would have simply taken the
surplus from SS and promised to pay back. But it goes through this elaborate
scheme in an attempt to fool the taxpayer into thinking that SS is safer
than it is. There is no actual difference: whether
it's a trust fund or a simple promise to pay back, the SS money is protected
by nothing more than the government's ability to find money by raising
taxes or cutting spending when the government runs out of cash.
What's even worse, the surplus from SS is used to HIDE the actual federal
deficit each year. The deficit figures they give us is the number AFTER this
surplus has been taken by the government as normal revenue. You can see
this plainly by looking at the back of your Form 1040 instructions. Thus,
in practice, in spirit and in name, SS money is not separate from
general revenues and expenses. SS as a separate, protected entity has been
so far gone from salvageability that no one, Democrat or Republican, has
even mentioned protecting it again.
Now, all of a sudden, we hear Democrats saying that they won't vote for the
BBA if the trust fund is not re-protected. Protecting the trust fund would
be nice (even if it's fairly useless given that retirees take out so much
more from SS than they've put in), but it would make balancing the budget
before 2002 impossible. We would be really lucky if the government could, by
2002, balance the books under the current rules of taking the SS surplus as
normal revenue. Achieving this less ambitious goal would at least be a
beginning of fiscal discipline. The passing of the BBA would give powerful
political protection for Congress to cut spending. It would put the issue
of the deficit squarely into every funding debate and force the nation
to come to the day of reckoning: deciding if it wants tax hikes or service
reductions, but not neither. Now, the Democrats are saying that if the
more ambitious (actually impossible) goal is not set, they won't vote for
the less ambitious goal either!
In other words, we're on a train that will crash in 1 mile. If we apply the
brakes now, we'll be lucky if we can stop at 30 yards within the crash, but
will at least soften the crash. But the Democrats are saying that if the
brakes can't stop the train at 500 yards from the crash, they won't vote for
applying the brakes at all!
The Democrats know that, this way, they can get old voters' support.
Perhaps they also understand that, when the nation is faced with the
final hour of reckoning, it will choose spending cuts over tax hikes, and
their various power bases will be gone.
It's a truly sad day for the country when politics has sunk to this level.
Gary L. Dare
: There is no actual difference: whether it's a trust fund or a simple
: promise to pay back, the SS money is protected by nothing more than
: the government's ability to find money by raising taxes or cutting
: spending when the government runs out of cash.
What if all other pork were cut in the interests of the latter?
Would you have funds from current tax receipts to pay the IOU's?
Just asking, thanks for a good article ...
gld
--
~~~~~~~~~~~~~~~~~~~~~~~ Je me souviens ~~~~~~~~~~~~~~~~~~~~~~~~~~
Gary L. Dare g...@prairienet.org
"Support NAFTA - Eat Mexican!" uk...@freenet.victoria.bc.ca
(El Teddy's ad, NYC) (formerly g...@columbia.edu)
Lance Visser
+>What's even worse, the surplus from SS is used to HIDE the actual federal
+>deficit each year. The deficit figures they give us is the number AFTER this
+>surplus has been taken by the government as normal revenue. You can see
+>this plainly by looking at the back of your Form 1040 instructions.
Its actually not all that plainly on the 1040 form.
1. They use "net intrest" paid by the government on the expenditure
side. The surplus from SS is lumped into "undistributed offsetting
receipts" I believe which is the "-" in the net intrest. They
dont count all "UOR" against interest. They leave some things
out.
+>Thus,
+>in practice, in spirit and in name, SS money is not separate from
+>general revenues and expenses. SS as a separate, protected entity has been
+>so far gone from salvageability that no one, Democrat or Republican, has
+>even mentioned protecting it again.
In practice, social security witholding on a yearly basis is a
highly regressive tax on the poor and lower middle class used to reduce
the deficit by 10's of billions.
My proposal to fix the program is the following:
1. End the trust fund fiction and go to year-to-year payment on
the program.
2. Tie SS taxes directly to COLA increases. If COLA's go out,
taxes must go up.
3. Cut SS taxes back to where they pay for the yearly cost
of the program. Raise the normal income tax until the money
lost from SS is made up.
The current SS system is the most abusive tax there is toward
the poor and working classes.
+>Now, all of a sudden, we hear Democrats saying that they won't vote for the
+>BBA if the trust fund is not re-protected. Protecting the trust fund would
+>be nice (even if it's fairly useless given that retirees take out so much
+>more from SS than they've put in), but it would make balancing the budget
+>before 2002 impossible.
The democrats don't want a balanaced budget. They never, ever have.
Bill Clinton runs around saying that starting another medicare-sized program
is somehow going to cut the deficit. The sad truth of health care is that
the only way your ever going to cut costs is to start cutting services.
All government-controlled health care does is cut services by removing
the option of cost-shifting.
+>We would be really lucky if the government could, by
+>2002, balance the books under the current rules of taking the SS surplus as
+>normal revenue. Achieving this less ambitious goal would at least be a
+>beginning of fiscal discipline.
The problem is that the news media and the democrats dont want
people to understand the reality of how social security and the deficit
are related.
+>The passing of the BBA would give powerful
+>political protection for Congress to cut spending. It would put the issue
+>of the deficit squarely into every funding debate and force the nation
+>to come to the day of reckoning: deciding if it wants tax hikes or service
+>reductions, but not neither. Now, the Democrats are saying that if the
+>more ambitious (actually impossible) goal is not set, they won't vote for
+>the less ambitious goal either!
They dont want anything done. The dollar goes into the tank
this week and the party is worried about breakfast cerial costs.
+>In other words, we're on a train that will crash in 1 mile. If we apply the
+>brakes now, we'll be lucky if we can stop at 30 yards within the crash, but
+>will at least soften the crash. But the Democrats are saying that if the
+>brakes can't stop the train at 500 yards from the crash, they won't vote for
+>applying the brakes at all!
They have their real "secret" plan all prepared. Its called
hyperinflation. We are going to fix the deficit by inflating our way
out of it. This week has convinced me that the inflation spiral is
starting to crank up again. The dollar is in free-fall. Clinton does
nothing. The fed does nothing.
+>The Democrats know that, this way, they can get old voters' support.
+>Perhaps they also understand that, when the nation is faced with the
+>final hour of reckoning, it will choose spending cuts over tax hikes, and
+>their various power bases will be gone.
When you talk about the democratic party these days, the major
groups in it are:
1. Government workers
2. Trial Lawyers - Their incomes are typically such that they have
no comprension of what tax increases do to other people.
3. Public School Teachers
4. The welfare support structure
(big city governments, businesses that prosper off the
welfare system, slumlords).
None of these groups has any intrest in reducing the deficit.
It doesn't matter to them. They want a bigger public section,
not a smaller one.
Gary Forbis
|> The passing of the BBA would give powerful
|> political protection for Congress to cut spending. It would put the issue
|> of the deficit squarely into every funding debate and force the nation
|> to come to the day of reckoning: deciding if it wants tax hikes or service
|> reductions, but not neither. Now, the Democrats are saying that if the
|> more ambitious (actually impossible) goal is not set, they won't vote for
|> the less ambitious goal either!
The BBA as written favored reducing outlays as it required a supermajority
to raise taxes. If we do not balance the budged by 2010 when the SS starts
running a deficit we would have to cut outlays and what outlays would be
cut? Isn't the rhetoric use by the Republicans "entitlements?" I retire
in the year 2017 (if 65 is still correct, though I believe there is a switch
to 67 in 2015 so I'm probably not correct.) The Republicans want to protect
current benefits and even whine about requiring retirees making more than
50% of the population having to pay income tax on 75% of their soc sec benefit.
If we are going to make social security just another line item on the budget
then let's be honest about it and fold the tax in with income tax and not
cap it at $61k.
--
--gary for...@u.washington.edu
Gary L. Dare
: All government-controlled health care does is cut services by
: removing the option of cost-shifting.
That's presuming a monolithic public HMO or even public insurance ...
rather than a voucher-like programme (subsidy or benefits) combined
with private health insurance.
Karl Wee
Gary L. Dare <g...@prairienet.org> wrote:
>Karl Wee (win...@world.std.com) wrote:
>
>: There is no actual difference: whether it's a trust fund or a simple
>: promise to pay back, the SS money is protected by nothing more than
>: the government's ability to find money by raising taxes or cutting
>: spending when the government runs out of cash.
>
>What if all other pork were cut in the interests of the latter?
>Would you have funds from current tax receipts to pay the IOU's?
>Just asking, thanks for a good article ...
>
pay the IOU's. Anyway, even paying all the IOUs won't be enough, as
each person is "entitled" to much more than he put in. What a system....
Karl Wee
Gary Forbis <for...@cac.washington.edu> wrote:
>
>The BBA as written favored reducing outlays as it required a supermajority
>to raise taxes. If we do not balance the budged by 2010 when the SS starts
>running a deficit we would have to cut outlays and what outlays would be
>cut? Isn't the rhetoric use by the Republicans "entitlements?" I retire
>in the year 2017 (if 65 is still correct, though I believe there is a switch
>to 67 in 2015 so I'm probably not correct.) The Republicans want to protect
>current benefits and even whine about requiring retirees making more than
>50% of the population having to pay income tax on 75% of their soc sec benefit.
I don't think the requirement for a supermajority to raise taxes went through.
As for cutting outlays, we must do it and it's much easier the earlier we
start planning.
>
>If we are going to make social security just another line item on the budget
>then let's be honest about it and fold the tax in with income tax and not
>cap it at $61k.
I have no problem with this. There's no way anyone can hold the line on
this anyway, when the version of the Balanced Budget Amendment called "real
world" kicks in.
>
Lance Visser
+>Lance Visser (vis...@convex.com) wrote:
+>: All government-controlled health care does is cut services by
+>: removing the option of cost-shifting.
+>That's presuming a monolithic public HMO or even public insurance ...
+>rather than a voucher-like programme (subsidy or benefits) combined
+>with private health insurance.
I'm also assuming that spending is to be reduced overall by
the health care "reform". The overall point is that reform by itself
doesn't cut costs and that the only way costs get cut is to cut services
or to raise rates.
Whatever the other merits of a voucher-like program, I still dont see
"cost reduction" a likely result of implmening such a system.
Tom Spillman
>
>America seems so paralysed by media bias to the left that one
of the
>biggest deliberate distortions in recent history is being
perpetrated
>without the electorate's awareness at all.
>
>In the last few days of the BBA debate, Democrats
>brought Social Security into the debate, saying that they would
not
>vote for the BBA unless the BBA would explicitly protect the
Social
>Security Trust Fund from being used to balance the budget.
>
>(in fact, the average retiree takes from SS a few times more
than he puts
>in,) but simply because the number of retirees is relatively
small so far.
>The surplus will be needed for the future, much larger group of
retirees.
>
>
(SNIP.....)
>
>The Democrats know that, this way, they can get old voters'
support.
>Perhaps they also understand that, when the nation is faced
with the
>final hour of reckoning, it will choose spending cuts over tax
hikes, and
>their various power bases will be gone.
>
>It's a truly sad day for the country when politics has sunk to
this level.
--
While I have no arguments in general with the preceding
comments, there are a few comments I think I'd like to make.
The statement about receiving many times what was paid in is
true to some extent, since the government pays no interest on
the trust fund and, further, since there are tremendous
differences in purchasing power between dollars paid into the
fund in the past and current dollars.
When my wife and I were married in 1958, I was making $345 per
month, which was considered a very reasonable salary at the
time. Obviously, the amount of FICA paid in was relatively
small in terms of todays dollars, In fact, I've paid in the
legal maximum every year since 1955, when I started my career.
Even later, in 1970, after the inflationary government policies
of the 1960's really pulled the bottom from under the dollar, we
were able to buy a brand new BMW 2000, the equivalent of today's
5xx series, for $4,700. Our first house, purchased in 1961,
cost $18,000, less than the average price of new cars today.
Even though we were told all along that the SS system was
actuarily sound, which to me certainly implies the accumulation
of interest, we recognized that Social Security was not a
particularly good idea. We knew that we would be better off if
we had the option of taking our money and investing it ourselves
and providing for our own security.
This was not an option available to us, although we were told
that it would always be there for us, it could never be taken
away, regardless of what our income was and all of the other
catch phrases of government.
Now my wife and I have reached the point where we are beginning
to think about retirement. After paying into the fund for over
forty years, often to the point where it was very difficult when
our children were small, we're told that we're greedy and that
we're not considerate of our children's future.
The Democrats have controlled Congress for most of this 40 year
period. I suggest that anyone who's considering letting
government control health care review what's happened to Social
Security. Unlike the comment above that "The Democrats know
that, this way, they can get old voters' support", the Democrats
cannot count on my vote...
tms
**********************************************************
Tom Spillman : Standard Disclaimers re: me *
Technology Architecture : and my employer... *
tspi...@tad.eds.com : *
**********************************************************
Andrew Hall
>>>>> Tom Spillman writes:
Tom> -- While I have no arguments in general with the preceding
Tom> comments, there are a few comments I think I'd like to make.
Tom> The statement about receiving many times what was paid in is
Tom> true to some extent, since the government pays no interest on
Tom> the trust fund and, further, since there are tremendous
Tom> differences in purchasing power between dollars paid into the
Tom> fund in the past and current dollars.
The calculations that determine the incredible amount more
taken out than put in by the average retiree DO credit
interest to the contributions. The current retirees paid in far
too little to cover.
Tom> When my wife and I were married in 1958, I was making $345 per
Tom> month, which was considered a very reasonable salary at the
Tom> time. Obviously, the amount of FICA paid in was relatively
Tom> small in terms of todays dollars, In fact, I've paid in the
Tom> legal maximum every year since 1955, when I started my career.
In 1958 you contributed a grand total of $84. (Your employer added
another $84).
Tom> Even later, in 1970, after the inflationary government
Tom> policies of the 1960's really pulled the bottom from under the
Tom> dollar, we were able to buy a brand new BMW 2000, the
Tom> equivalent of today's 5xx series, for $4,700. Our first
Tom> house, purchased in 1961, cost $18,000, less than the average
Tom> price of new cars today.
Tom> Even though we were told all along that the SS system was
Tom> actuarily sound, which to me certainly implies the
Tom> accumulation of interest, we recognized that Social Security
Tom> was not a particularly good idea. We knew that we would be
Tom> better off if we had the option of taking our money and
Tom> investing it ourselves and providing for our own security.
Tom> This was not an option available to us, although we were told
Tom> that it would always be there for us, it could never be taken
Tom> away, regardless of what our income was and all of the other
Tom> catch phrases of government.
Tom> Now my wife and I have reached the point where we are
Tom> beginning to think about retirement. After paying into the
Tom> fund for over forty years, often to the point where it was
Tom> very difficult when our children were small, we're told that
Tom> we're greedy and that we're not considerate of our children's
Tom> future.
Tom> The Democrats have controlled Congress for most of this 40
Tom> year period. I suggest that anyone who's considering letting
Tom> government control health care review what's happened to
Tom> Social Security. Unlike the comment above that "The Democrats
Tom> know that, this way, they can get old voters' support", the
Tom> Democrats cannot count on my vote...
If you are healthy and live for 10 years (5 for the average retiree)
you will get out much more than you put in. However, your children
will get out far less than what they put in.
ah
Russell Anderson
In article <3jklbo$a...@mikey.convex.com>, vis...@convex.com (Lance Visser) writes:
> In <D53yu...@world.std.com> win...@world.std.com (Karl Wee) writes:
> +>We would be really lucky if the government could, by
> +>2002, balance the books under the current rules of taking the SS surplus as
> +>normal revenue. Achieving this less ambitious goal would at least be a
> +>beginning of fiscal discipline.
>
> The problem is that the news media and the democrats dont want
> people to understand the reality of how social security and the deficit
> are related.
This assumes that "the news media" understands the social security system
and basic economic concepts. There is little evidence that "the news media"
(with few exceptions) understands basic economic concepts.
It's not a consperacy, just ignorance...
--
Russ Anderson | Disclaimer: Any statements are my own and do not reflect
------------------ upon my employer or anyone else. (c) 1994
EX-Twins' Jack Morris, 10 innings pitched, 0 runs (World Series MVP!)
Gary L. Dare
: Whatever the other merits of a voucher-like program, I still dont
: see "cost reduction" a likely result of implmening such a system.
Besides our having a less litigious society up north, with little in
the way of defensive medicine and its effects like too many MRI's (to
checkpoint patients, not actually involved actual medical care), that
people have a basic health insurance means they'll get things treated
early and cheaper, rather than rush the ER for expensive care of an
advanced condition later. Spend a penny, save a pound ...
Alan Bomberger
>America seems so paralysed by media bias to the left that one of the
>biggest deliberate distortions in recent history is being perpetrated
>without the electorate's awareness at all.
>In the last few days of the BBA debate, Democrats
>brought Social Security into the debate, saying that they would not
>vote for the BBA unless the BBA would explicitly protect the Social
>Security Trust Fund from being used to balance the budget.
>Let me first explain some basics. Social Security has long been running a
>surplus, not because the government makes a profit on an individual basis
>(in fact, the average retiree takes from SS a few times more than he puts
>in,) but simply because the number of retirees is relatively small so far.
>The surplus will be needed for the future, much larger group of retirees.
>But the government has made all this surplus into a "SS Trust Fund" that
I don't even think this is true. The Trust Fund is a myth much like the
$50,000 a year that I save (and of course borrow back to pay my bills).
Ask your congresscritter to show you the line item on the budget
Contribution to Trust Fund
It ain't there and if it were the deficit would be 80 billion larger
Ask your critter to point to the Trust Fund.
Ask your critter how "masking the deficit" (admitted to by Panetta on
Brinkley) differs from "raiding the trust fund" quoted as the agenda
of the Republicans.
Sad that dittoheads are accused of not thinking but Jenningsheads
are not. SS is a ponzi scheme. Go back and read about Moynihan's
efforts to take SS off budget and actually bank the surplus (or
reduce the tax) and face the real deficit. There ain't no Trust Fund
to raid! It's gone, spent, just like that 50 grand a year I save.
--
Alan Bomberger | (408)-992-2748 | al...@oes.amdahl.com
Amdahl Corporation | Opinions are free, worth it, and not Amdahl's
It is seldom that liberty of any kind is lost all at once. - David Hume
Richard Foy
>
>It's a truly sad day for the country when politics has sunk to this level.
Yes it is but it ahs een this bad for many years. The only difference
is that each year the pain of fixing things gets worse and wrose so
there is less real effort to fix it.
--
"It is dangerous to be right in matters on which the established
authorities are wrong." --Voltaire
Richard Foy ftp://ftp/netcom.com/pub/rf/rfoy/bkpo.html
Richard Foy
>>
>I don't have the exact numbers. My hunch is that it won't be able to
>pay the IOU's. Anyway, even paying all the IOUs won't be enough, as
>each person is "entitled" to much more than he put in. What a system....
The Cato Institute, I believe a libertarian think tank, says this
isn't true. For infromation from a study they did on this subject
see URL:
ftp://ftp.netcom.com/pub/rf/rfoy/socialsec.html
B. Scott Ferguson
: win...@world.std.com (Karl Wee) writes:
:> Thus, in practice, in spirit and in name, SS money is not separate
:> from general revenues and expenses. SS as a separate, protected
:> entity has been so far gone from salvageability that no one, Democrat
:> or Republican, has even mentioned protecting it again.
: In practice, social security witholding on a yearly basis is a
: highly regressive tax on the poor and lower middle class used to reduce
: the deficit by 10's of billions.
So turn it into a real pension fund.
: My proposal to fix the program is the following:
: 1. End the trust fund fiction and go to year-to-year payment on
: the program.
: 2. Tie SS taxes directly to COLA increases. If COLA's go out,
: taxes must go up.
: 3. Cut SS taxes back to where they pay for the yearly cost
: of the program. Raise the normal income tax until the money
: lost from SS is made up.
Ulg. The census bureau predicts the percentage of retirees to increase
50% by 2020. Under your scheme we would be paying 22% FICA in 2020.
At least I would be paying 22%. Is this some sort of generational
sneak attack? :-)
: The democrats don't want a balanced budget. They never, ever have.
: Bill Clinton runs around saying that starting another medicare-sized
: program is somehow going to cut the deficit. The sad truth of health
: care is that the only way your ever going to cut costs is to start
: cutting services. All government-controlled health care does is cut
: services by removing the option of cost-shifting.
Is there any data from the Oregon medicare rationing proposal yet? It
did go into effect in 1992, didn't it?
--
Scott Ferguson
fer...@netcom.com
21012d
Is it possible that some of the current
economic shifts, are rational attempts
to position large institutions for
the "success" of the republicans first 100 days
and beyound.
Tom Spillman
ah...@cs.uml.edu says...
(Snip - removed my original comments)
>
>The calculations that determine the incredible amount more
>taken out than put in by the average retiree DO credit
>interest to the contributions. The current retirees paid in
far
>too little to cover.
>
(Snip - removed some more...)
>
>In 1958 you contributed a grand total of $84. (Your employer
added
>another $84).
First, at 6% compunded monthly for 39 years (a conservative
rate, considering the periods when 12% was available), the $168
would now be worth $1,733.91, or a growth of over ten times. In
1958 dollars, that's almost half my annual salary at the time
the government got the money. Which is one of my points: the
presently popular calculations usually ignore the changes in
purchasing power in order to make a political point.
>
(Snip... and yet some more of my comments)
> Tom> The Democrats have controlled Congress for most of this
40
> Tom> year period. I suggest that anyone who's considering
letting
> Tom> government control health care review what's happened
to
> Tom> Social Security. Unlike the comment above that "The
Democrats
> Tom> know that, this way, they can get old voters' support",
the
> Tom> Democrats cannot count on my vote...
>
>If you are healthy and live for 10 years (5 for the average
retiree)
>you will get out much more than you put in. However, your
children
>will get out far less than what they put in.
>
>
>ah
--
Besides my point about ignoring the changes which have taken
place in the purchasing value of the dollar, I attempted to make
another point. We were aware at the time that Social Security
was not a good option, but Congress in it's wisdom would not
allow us to opt out.
Now that the piper must be paid, those of us who paid in for
forty or fifty years based on Government promises will probably
bear the brunt through 'means testing' and the like. I
recognize that my generation has some responsibility since we
did not vote the guilty parties out of office (although some of
us tried).
However, remember this when you hear the Government say things
like "coverage for all that can't be taken away" and the like.
What the government says today is probably *not* going to be
what they'll say tomorrow when the bill comes due...
Baird Webel
>Now that the piper must be paid, those of us who paid in for
>forty or fifty years based on Government promises will probably
>bear the brunt through 'means testing' and the like. I
>recognize that my generation has some responsibility since we
>did not vote the guilty parties out of office (although some of
>us tried).
yeah, right, given the political clout of those of you who paid in for 40
or 50 years, I seriously doubt that you will bear the brunt. It seems
far more likely to me that it will be the younger workers who will pay
the taxes and then see very little of it in the end.
baird
--
***************************************************************************
* Baird Webel 1312 35th St. NW *
* web...@gusun.georgetown.edu Washington DC 20007 *
***************************************************************************
Sheldon Jolson
>While I have no arguments in general with the preceding
>comments, there are a few comments I think I'd like to make.
>The statement about receiving many times what was paid in is
>true to some extent, since the government pays no interest on
>the trust fund and, further, since there are tremendous
>differences in purchasing power between dollars paid into the
>fund in the past and current dollars.
This is not really true. The trust fund might not exist in a
physical form (ie, you can't go to the bank and see it), but
it does exist indirectly. Suppose that Social Security was
removed from the budget. Since it runs a surplus, it has a
large cash position. This cash position is exactly equal to
the increase in the deficit caused by removing Social Security
from the Budget. This causes the government to issue more
bonds equal to the increase in the deficit. These bonds are
purchased by Social Security, and earns interest for Social
Security. Therefore, by having Social Security on budget, the
gevernment reduces its borrowings and pays less interest. The
cumulative amount of the reduced borrowings can be thought of
as the trust fund, and the cumulattive saved interest can be
thought of as the total interest paid the trust fund. Now this
isn't _exactly_ the same as having a trust fund, but for all
practical purposes, it is.
--------------------------------------------------------------------------------------
@date@
@time@ - SBJ -
s...@panix.com <Look here for a yet another web site - coming soon>
Sheldon Jolson
>If you are healthy and live for 10 years (5 for the average retiree)
>you will get out much more than you put in. However, your children
>will get out far less than what they put in.
The expected life time of a 65 year old retiree is significantly
higher than 5 years.
-----------------------------------------------------------------------------------
@date@
@time@ - SBJ -
s...@panix.com <Check here for yet another web site - coming soon>
Karl Wee
Tom Spillman <tspi...@tad.eds.com> wrote:
> ....
>The statement about receiving many times what was paid in is
>true to some extent, since the government pays no interest on
>the trust fund and, further, since there are tremendous
>differences in purchasing power between dollars paid into the
>fund in the past and current dollars.
This is news to me. Since I don't have the actual numbers, I can't
tell who's come out ahead, the government or the retirees. But therein
lies the fundamental flaw of SS: unlike many countries where each
individual has "his money" in the government retirement fund, with interest,
in SS all the money is pooled and the government uses a complicated formula
to determine how much each person gets. This is inherently prone to
politicking and abuse and we're now tasting the fruit of what Americans
voted for (or at least didn't oppose) in the past.
>Even though we were told all along that the SS system was
>actuarily sound, which to me certainly implies the accumulation
>of interest, we recognized that Social Security was not a
>particularly good idea. We knew that we would be better off if
>we had the option of taking our money and investing it ourselves
>and providing for our own security.
>
>This was not an option available to us, although we were told
>that it would always be there for us, it could never be taken
>away, regardless of what our income was and all of the other
>catch phrases of government.
>
>Now my wife and I have reached the point where we are beginning
>to think about retirement. After paying into the fund for over
>forty years, often to the point where it was very difficult when
>our children were small, we're told that we're greedy and that
>we're not considerate of our children's future.
The only people who benefited from the whole fraudulant scheme were
the politicians who managed to stay in power using SS as a carrot. They
were able to capitalize on people's temptation to believe in "something
for nothing". I'm sure on many social gatherings of people about to
retire, there were talks about "look what Joe's getting, isn't sociala
security great?" In the end we all suffer from this, except people
who died quickly enough to escape :) The question still remains,
however, what we should do about this mess now before it's too late.
Peter Nelson
: Is it possible that some of the current
Is it "possible"? It might be "possible" but how would
you propose to separate out those effects from all the
other ones?
That's the whole problem with that kind of thinking
(very common in economic discussions because we have
so little really concrete to go on and we all like to
shoot the shit, it's just that economists get paid for
it!): The mark and the yen take off like rockets
(self-centered USAians call it a "falling dollar"),
or the DJIA cracks 4000 and immediately everyone either
trots out their favorite heroes or flogging horses:
lack of a balanced budget, Contract with America,
The FRB, low savings rates, education, tort reform,
space aliens, lunar cycles, God-knows-what.
The FACT is that all of it is SPECULATION!! There
simply isn't enough of a science to this stuff for
it to be otherwise. Look at the BBA: major, prominent,
Nobel-winning economists were lined up all over the
debate (it looked like mostly on the anti- side, but
science isn't a democracy).
Recently in the popular press (Atlantic Monthly and the
New York Times) there have been articles about how
little economists REALLY understand. And lately the
press has been prominently quoting economists remarking
that they were "surprised" by, say, the magnitude of
recent currency swings. So maybe we are on the verge
of a sudden awakening of awareness of this problem by
the public.
---peter
Andrew Hall
Tom> In article <AHALL.95M...@remus.cs.uml.edu>,
Tom> ah...@cs.uml.edu says... (Snip - removed my original
Tom> comments)
>> The calculations that determine the incredible amount more
>> taken out than put in by the average retiree DO credit interest
>> to the contributions. The current retirees paid in far
>> too little to cover.
Tom> (Snip - removed some more...)
>> In 1958 you contributed a grand total of $84. (Your employer added
>> another $84).
Tom> First, at 6% compunded monthly for 39 years (a conservative
Tom> rate, considering the periods when 12% was available), the
Tom> $168 would now be worth $1,733.91, or a growth of over ten
Tom> times. In 1958 dollars, that's almost half my annual salary
Tom> at the time the government got the money. Which is one of my
Tom> points: the presently popular calculations usually ignore the
Tom> changes in purchasing power in order to make a political
Tom> point.
But the interest rates one used to credit interest do account for
inflation. A nominal rate interest is compounded of the inflation
part and the real part. When inflation is going up, so do interest
rates.
If we had had zero inflation all that time the credited interest rate
would be more like 2%. 3% is a very high real rate for risk free
instruments.
Tom> (Snip... and yet some more of my comments)
Tom> The Democrats have controlled Congress for most of this 40
Tom> year period. I suggest that anyone who's considering letting
Tom> government control health care review what's happened to
Tom> Social Security. Unlike the comment above that "The Democrats
Tom> know that, this way, they can get old voters' support", the
Tom> Democrats cannot count on my vote...
>> If you are healthy and live for 10 years (5 for the average retiree)
>> you will get out much more than you put in. However, your children
>> will get out far less than what they put in.
Tom> Besides my point about ignoring the changes which have taken
Tom> place in the purchasing value of the dollar, I attempted to
Which is not done, see comments about interest rates and inflation.
Tom> make another point. We were aware at the time that Social
Tom> Security was not a good option, but Congress in it's wisdom
Tom> would not allow us to opt out.
Yes this is unfortunate.
Tom> Now that the piper must be paid, those of us who paid in for
Tom> forty or fifty years based on Government promises will
Tom> probably bear the brunt through 'means testing' and the like.
Tom> I recognize that my generation has some responsibility since
Tom> we did not vote the guilty parties out of office (although
Tom> some of us tried).
Tom> However, remember this when you hear the Government say things
Tom> like "coverage for all that can't be taken away" and the like.
Tom> What the government says today is probably *not* going to be
Tom> what they'll say tomorrow when the bill comes due...
This is quite true.
ah
Donald Edwards
" When you talk about the democratic party these days, the major
"groups in it are:
" 1. Government workers
" 2. Trial Lawyers - Their incomes are typically such that they have
" no comprension of what tax increases do to other people.
" 3. Public School Teachers
" 4. The welfare support structure
" (big city governments, businesses that prosper off the
" welfare system, slumlords).
Excuse me, but in general groups 3 and 4 consist primarily of people
who are paid by the government to provide some service for people
who are unwilling and/or unable to pay for it themselves. Which
puts them in the same category as group 1, government workers.
I would include "civil rights" "leaders", such as the people
demanding multilingual education for other people's kids in
tax-funded public schools, in the same group for similar
reasons.
On the other hand, I would add a third and largely unrelated
group: those who want the government to keep their possible
competitors down. The mercantilists -- merchant princes
in the worst sense of the term.
Donald Edwards
": Whatever the other merits of a voucher-like program, I still dont
": see "cost reduction" a likely result of implmening such a system.
"Besides our having a less litigious society up north, with little in
"the way of defensive medicine and its effects like too many MRI's (to
"checkpoint patients, not actually involved actual medical care), that
"people have a basic health insurance means they'll get things treated
"early and cheaper, rather than rush the ER for expensive care of an
"advanced condition later. Spend a penny, save a pound ...
Problem: per capita medical care costs have risen at essentially
the same rate in Canada as in the US, since Canada implemented
socialized medicine.
Problem: availability of medical care in Canada has *not* kept
pace with the US, and in the last decade has been declining in
some important areas. For example, Canada has both longer
average hospital stays and fewer hospital beds per capita,
both of which statistics have gotten worse in the last 10 years.
(In fact, I believe there has been a net decline in the number
of beds in the last 10 years.)
So if your costs are going up just as fast, but your care is
not improving as fast and in some measures is getting worse,
where is the offsetting benefit?
Brian Dell
: Recently in the popular press (Atlantic Monthly and the
: little economists REALLY understand. And lately the
: press has been prominently quoting economists remarking
: that they were "surprised" by, say, the magnitude of
: recent currency swings.
Einstein was in the queue before the Pearly Gates.
He asked a few people around him what their IQ was:
"190" the first person said.
"Good, we can talk about my theory of relativity!"
"150" said the second.
"I look forward to discussing the prospects of world peace with you!"
"50" mumbled the third.
"So what do you forecast will be the growth in the economy next year?"
--
Brian Dell
http://gpu.srv.ualberta.ca/~dellb/index.html
Doug Fierro
>
> Lance Visser (vis...@convex.com) wrote:
>
> : Whatever the other merits of a voucher-like program, I still dont
> : see "cost reduction" a likely result of implmening such a system.
>
> Besides our having a less litigious society up north, with little in
> the way of defensive medicine and its effects like too many MRI's (to
> checkpoint patients, not actually involved actual medical care), that
> people have a basic health insurance means they'll get things treated
> early and cheaper, rather than rush the ER for expensive care of an
> advanced condition later. Spend a penny, save a pound ...
>
> gld
Now Gary,
You always are quick to correct the U.S. misconceptions of
Canadian health care, yet you espound the much-abused excuse
that health care cost increases in the U.S. are tied to lawsuits.
The facts are, the cost of malpractice in the U.S. as a percentage
of total health spending is maybe 3% at most. There are much
bigger players in the U.S. healthcare industry that contribute to
higher costs.
This should not be construed to be interpreted that I am
against tort reform, but if you want to cut costs, go where
the big spending is. It's kind of like trying to balance
the U.S. budget by attacking welfare and food stamp programs
while ignoring S.S. and Medicare. :-)
Doug
Doug Fierro
|\ Legent Corporation
O __________|_\______ Consulting Services
\_.______________________| * * * * * * * * */ fie...@sv.legent.com
__\____ |=================/ (408) 730-3500
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Amit P. Rege
From alt.politics.economics:
> tspi...@tad.eds.com (Tom Spillman) writes:
> >Now that the piper must be paid, those of us who paid in for
> >forty or fifty years based on Government promises will probably
> >bear the brunt through 'means testing' and the like.
Baird Webel (web...@gusun.acc.georgetown.edu) wrote:
> yeah, right, given the political clout of those of you who paid in
> for 40 or 50 years, I seriously doubt that you will bear the brunt.
> It seems far more likely to me that it will be the younger workers
> who will pay the taxes and then see very little of it in the end.
I would like to respectfully disagree with BOTH of you! If something
is done today, we could save the payments to the elderly, and still
design a way to accumulate substantial amounts in individual accounts
owned by tomorrow's retirees.
I have heard of proposals that will incorporate the following
elements:
- gradual (20 year?) phase-out of government payments on an
entitlement basis. After that, the government pays only on a
means-tested basis, out of welfare budgets to the needy.
- IN ADDITION, people get to keep most of their money in a Super-IRA,
in their own name and manage it. People over 40 today, get plenty of
warning.
- Super-IRA workers (younger workers) are still taxed for elderly
benefits reducing the tax portion gradually UNTIL at the end of
the phase-out it becomes ZERO.
(Source: Social Security: Prospects for Real Reform, edited by
Peter Ferrara)
Note that with this method, people like Tom Spillman, who were forced
into the pyramid scheme of today, will still get their payments. It
is hardly their fault! Who, among us, would have voted against a
government-obfuscated and sponsored pyramid scheme IF IT WAS IN THEIR
FAVOR? That was how it was promised 60 years ago...
(Pay $50 per year NOW, then get hundreds of dollars per month after
retirement for life; survivors, widows, NO PROBLEM! Backed by the
full faith and credit of the United States Treasury.)
- Amit
--
Amit P. Rege | Rege Systems,
e-mail: amit...@netcom.com | Fremont, CA 94538-4161
At the OTHER end of every government program is a tired taxpayer!
News brief I am looking for (write to me if you see this anywhere):
The California Attorney General's office is suing the US Government to
cease-and-desist from using the misleading phrase "backed by the full
faith and credit of the US Government" in the advertisements for US
Savings Bonds and Social Security literature. They suggested instead
the phrase "backed by the willingness and ability of future US
taxpayers to pay higher taxes; subject to legislative change".
Repeal FICA Taxes! Dismantle the Social Security Pyramid scheme!
SLAVE TO THE GRIND
>I hate to break it to those wishing to privatize Social Security, but...
>Private plans are no more secure than Social Security. In either case the
>generation after will have to pay for the benefits. Maybe some ways makes
>some feel more comfy than others--the effects are the same.
>
>--gary for...@u.washington.edu
But the generation after wouldn't have to pay for squat if individuals
were responsible for their own retirement. Forget privatization, we
need to eliminate it completely. Now before you hypersensitive ones
out there accuse me of hatred for the elderly. . .
A phase out of SS would have to be slow. I don't have a problem with that.
It should begin soon, however, because the situation isn't going to
cure itself. Even if it takes 25 years to get our population (read
"addicts") off of this drug, the process needs to start sometime. It
is not a proper function of government to provide a retirement plan for
it's people. Just say no to SS.
--
Derrick Olliff | An island of rigorous logic
Computational Micromechanics Lab | surrounded by a sea of
Georgia Institute of Technology | emotional propaganda.
Atlanta, Ga. 30332 |
Baird Webel
>Moynihan still claims it is the most successful social
>program ever. Of course he does. He's got a six-figure
>pension coming from the taxpayers, and he'll retire well
>before SS goes belly up. On MY hard earned money.
it arguably was the most successful social program, but not as a
retirement program. When it came into effect, the elderly had the
highest poverty rate of any age category, now I suspect they are close to
the lowest. SS is and always was a welfare program, just dressed up to
gain middle class support.
Gary Forbis
Private plans are no more secure than Social Security. In either case the
generation after will have to pay for the benefits. Maybe some ways makes
some feel more comfy than others--the effects are the same.
Look Social Security is also an insurance plan. It's hard to get one's money
and one's life to always come out even. Are people supposed to kill themselves
when their money runs out? We need to cover our own needs in the aggregate
as well as individually. The difficulty would be to find a formula that didn't
once again favor the more wealthy (who have longer life expectancy as well
as larger payouts.)
We need to balance the budget and we need to make social security sound.
We do not need to privatize social security and to do so could place it at
risk every much so as keeping it public.
--
--gary for...@u.washington.edu
Rex Ridgeway
----------------------------------------------------------------
The recent sham of some politicians claiming they were
protecting Social Security by voting down the Balanced
Budget Amendment should be rejected for the fraud it is.
LBJ instituted the unified budget to help hide the cost
of the Vietnam war and Great Society programs. This
process continues today with the Clinton administration's
proposed budgets.
The bigger fraud is the Social Security system itself
where today's and future workers are concerned. Consider
this taken from the book _Social Security: Prospects for
Real Reform_ edited by Peter J. Ferrara (CATO Institiute,
1985), page 13:
"Those who retired in the early years of Social
Security received high, above-market returns
through the program on the limited social security
taxes they paid during their working years.
Although today's retirees are receiving less of
a good deal, they are still enjoying above-market
returns. But those now entering the work force
will receive unacceptably low, below-market returns,
negative in many cases, even in the unlikely event
that they receive all the program's currently
promised benefits."
Just how good the early and current retirees have it and,
therefore neccesarily, how bad today's and future workers
will be treated has been estimated by several economists
and actuaries. For example, from _Social Security_ edited
by economist Charles W. Meyer, (Lexington Books, 1987) we
find the following on page 52:
"...rates of return were calculated for a sample
of workers who retired during the years 1967-70
...For workers who retired at age 65, average
real rates of return for men ranged from 23%
in the lowest earnings quartile to 8.6% in the
highest. For women the corresponding range
was from 29% in the lowest earnings quartile
to 9.8% in the highest."
By way of comparision, historically the real rate of return on an
average stock fund, the "market rate of return", has been about 6%
(the nominal rate of return would be about 9%; 6% plus 3% for
inflation). From a more recent publication from the liberal Urban
Institute entitled _Retooling Social Security for the 21st Century_
by C. Eugene Steuerle (Urban Institute press, 1994), we find
starting on page 123 the following estimates for a two-earner
couple with a income of about $83,000 per year --- one earning
near the maximum earnings subject to OASI taxes of, currently,
about $60,000, the other earning an "average" wage, about $23,000
per year for this study (all figures are in 1993 dollars):
"[such a] couple turning 65 in 2030 pays about
$350,600 more in taxes and premiums to support
OASI and Medicare over a lifetime than the benefits
are worth to them, OASI and Medicare together
redistribute about 5.6% of this couple's lifetime
income to other people."
Similar estimates of net income redistributions of about $350,000
is also obtained for cohorts of Single Females and Single Males
with wages of about $60,000 per year who will reach age 65 in 2030.
Single Males, due in part to their shorter lifespan compared to
females, earning just the average wage assumed in this study,
end up making a net transfer to other people in the SS/Medicare
system of about $37,000 over their lifetime where similarly
earning Single Females RECEIVE net transfers of about $45,000.
One Earner Couples turning 65 in 2030, with an average income
in this study (again about $23,000/yr in 1993 dollars) benefits
from a net transfers of about $335,000 over their lifetime in the
system.
These three references from researchers whose political views
span then entire spectrum from conservative to liberal clearly
indicate that Social Security and Medicare is not only unfair,
but is a train wreck in the making.
A couple more sobering facts are to be found in the final
report of the Bipartisan Commission on Entitlement and Tax
Reform (chaired by Senators Robert Kerrey and John Danforth).
First, from pages 77-79, the current unfunded liabilities
of the promises, unsustainable promises, to today's workers
for Social Security is $7.3 Trillion and for Medicare it is
$5.7 Trillion. Now, if we really are going to pay out all of
these unfunded benefits, the Social Security and Medicare taxes
as a share of Taxable Worker Payroll (i.e. FICA taxes) will have
to rise from the current 15.2% to somewhere between 37.9% and
a high-cost projection of 61.8% by the year 2040 (costs includes
employer SS contribution and parts A and B of Medicare; very
roughly it would be a 60/40 split between Medicare and Social
Security respectively). The numbers are relentless --- balancing
the budget by just eliminating "waste, fraud, and abuse" and
foreign aid is a fantasy of fools who have never looked at the
facts, the delusions of those who are unable to face reality,
or the propaganda of demagogue politicians of both parties and
the AARP.
Now, if we add in the bite from the regular Federal Income
Tax and State and Local government taxes, it is easy to see
how the total lifetime tax rate on workers in the middle of
the 21st Century would rise to the 80% as estimated in
President Clinton's 1994/95 Budget Estimates (page 25).
The American Revolution was over tax rates well below these levels.
Social Security and Medicare IS that "giant sucking sound" and
it is vacuuming the money out of young workers' pockets and of
your grandchildren and your neighbors grandchildren's pockets.
Voting for politicians who continue to make such promises as
those in these widely popular entitlement programs is REALLY
as easy as taking candy from a baby!
The only objectively fair and workable long term solution is to
transition to a system where each person invest the payroll taxes
paid (including the employer component) into a self-directed,
employee owned "Super IRA" account. The problem with this is
that the foolish, grasping, or socialist voters and their more
than willing political allies don't believe in this solution
because it would keep them from implementing or expanding their
government enforced income redistribution programs that has got
all of us in yet another fine mess.
------------------------------------------------------------------
--
Rex Ridgeway
re...@freenet.fsu.edu
An-Jen Tai
(Gary Forbis ) wrote:
> I hate to break it to those wishing to privatize Social Security, but...
>
> Private plans are no more secure than Social Security. In either case the
> generation after will have to pay for the benefits. Maybe some ways makes
> some feel more comfy than others--the effects are the same.
>
This is just silly. With a pay as you go public plan you are always at
the whim of politics because it is a simple income transfer scheme from
the young to the old. With a private plan you have ownership of REAL
assets which produce REAL revenues. Unless this country decides to outlaw
private property, I fail to see how the effects are the same.
> Look Social Security is also an insurance plan. It's hard to get one's money
> and one's life to always come out even. Are people supposed to kill
themselves
> when their money runs out? We need to cover our own needs in the aggregate
> as well as individually. The difficulty would be to find a formula that
didn't
> once again favor the more wealthy (who have longer life expectancy as well
> as larger payouts.)
You are ignoring the fact that there are annuities, offered by insurance
companies, that provide everything from lump sum payments to lifetime
benefits with adjustments for inflation (and everything in between). Such
a program is available with my employer's pension program. (It has always
puzzled me why annuities aren't more popular.) My wife's grandmother set
up such an annuity contract for all of her grandchildren.
>
> We need to balance the budget and we need to make social security sound.
> We do not need to privatize social security and to do so could place it at
> risk every much so as keeping it public.
I would argue that you cannot make social security sound unless you
privatize it. I'm not saying there is no role for government. (I favor a
mandatory retirement program like that in Singapore.) But Social Security
is a giant Ponzi scheme that is unstable with respect to changes in
demographics.
>
> --
> --gary for...@u.washington.edu
--
An-Jen Tai
at...@ida.org
"Life, liberty, and the pursuit of property"
David Meyers
<snip>
time. Obviously, the amount of FICA paid in was relatively
small in terms of todays dollars, In fact, I've paid in the
legal maximum every year since 1955, when I started my career.
Yup. So have lots of other folks. Congrats on having had
a pretty successful career.
Even though we were told all along that the SS system was
actuarily sound, which to me certainly implies the accumulation
of interest, we recognized that Social Security was not a
particularly good idea. We knew that we would be better off if
we had the option of taking our money and investing it ourselves
and providing for our own security.
You were told one thing - that it was "sound". You KNEW that
there was a better way (to invest on your own). You still paid
in (because you had no choice). The natural question, then,
is: Did you do anything to try to STOP the system? Or did
you support it by voting for politicians who promised to keep
the system going? (Take none of this personally. The questions
are more a generational thing.)
This was not an option available to us, although we were told
that it would always be there for us, it could never be taken
away, regardless of what our income was and all of the other
catch phrases of government.
You were lied to. Did you believe them then? Do you believe
them now? The money was no more "there for you" then than it
is now. It was immediately given to other people. You were
given an IOU, not an interest or an ownership in anything.
The IOU was written by the generation ahead of you, to be
paid off by the generation behind you.
It said, "Do no feel bad that we are taking your money now
and giving it to other people. Later on, we promise to take
money from other people and give it to you. Now go and feel
warm and fuzzy all over."
Now my wife and I have reached the point where we are beginning
to think about retirement. After paying into the fund for over
forty years, often to the point where it was very difficult when
our children were small, we're told that we're greedy and that
we're not considerate of our children's future.
Admittedly, some of us who want SS ended do indeed feel that
you knew what you were getting into - a pyramid scheme, and
deserve to be without any return on the theft to which you
(or the government, theoretically with your consent) subjected
you. I am not one of those.
However, I will NOT be taken advantage of, not without protest.
The SS system MUST be ended. While cold turkey would be
effective, it would be brutal to all those who planned on
living off the young people's wages. I'm not heartless.
My proposal for its end does indeed allow for the continuance
of payments to those who would be completely impoverished
without it. Essentially, its like this: The employee contributions
no longer go to FICA, but instead directly to PRIVATE
Individual Retirement Accounts (essentially IRAs, but with
some additional provisions, like the purchase of disability
insurance thrown in. This is what Chile has). The employer
contributions are used to pay out the existing level of
benefits to currently retired folks, with those levels
scaled down over time to people who are still paying in,
eventually to be eliminated altogether. Moreover, the
employer contributions cease at that time. Finally, the
payouts from the employer contributions get means-tested -
no payments to the wealthy (I know - effectively it penalizes
those who did adequately prepare for their own retirement --
but whether they prepared or not, they really have no right
to demand money from the young and working, so it is not
a punishment to the wealthy as much as its a bone for
the poor). (Actually, I'd make the employer contributions
smaller immediately, and possibly increase the mandated
employee retirement savings - the better to make sure
that current workers prepare for their own retirement).
There would be strict time-limit for the elimination
of the payouts and employer contributions. Finally, the
entire thing would be immediately OUTSIDE the federal
budget, with no possibility for the use of any surplus
to hide the federal defecit. Any surplus is used to
purchase treasury securities (as now, but the purchased
securities DO count towards the debt, unlike now). And
with no possibility for increases in the appropriated
money - only for decreases. The entire thing would have
to be gone within, say, 20 years, leaving only private
IRA accounts.
The Democrats have controlled Congress for most of this 40 year
period. I suggest that anyone who's considering letting
government control health care review what's happened to Social
Security. Unlike the comment above that "The Democrats know
that, this way, they can get old voters' support", the Democrats
cannot count on my vote...
I just got a letter from Senator Moynihan, the self-avowed
watchdog of the Social Security trust fund. In it, he
proudly proclaimed that the system will be liquid until
2029. Oddly enough, it will be bankrupt, even by his
standards, before I am old enough to qualify.
And his projections are very optimistic. The projection
by the rest of congress (their commission on entitlement
reform) said it would be bankrupt in 2010.
I hate to be the bearer of sad news. I'm sorry. You
were duped. Social Security as we've built it is
inherently unsustainable. Pay-as-you-go (meaning that
current payers' money goes to current recipients and
theoretially recieve future payers money later) has been
discredited completely.
Social Security MUST be eliminated. Individual, PRIVATE
investments are the only sustainable way. The only
difficult thing about this is how do we engineer the
transition. Not "should we?". It is "how do we?"
The first step is getting some elected officials honest
enough to admit the utter failure of the current system.
Moynihan still claims it is the most successful social
program ever. Of course he does. He's got a six-figure
pension coming from the taxpayers, and he'll retire well
before SS goes belly up. On MY hard earned money.
--D
David Meyers
I should have said, "the generation after will have to provide the goods and
services...." The age demographics will be the same independent of retirement.
Those who work ALWAYS provide goods and services to those
who don't regardless of their ages. It just happens that
more young people work and more old people don't. This
is completely irrelevant.
The discussion is about the source of the funding for
the goods and services that the non-working use. In
one case, it is the return on privately chosen investment.
In the other case, it is the transfer of income from
the working to the non-working. I think the first method,
through investment, is a good thing. The second method,
even though it is what we presently use, is immoral.
|> Forget privatization, we
|> need to eliminate it completely. Now before you hypersensitive ones
The system of privatization which would be favored,
I think, would be one like Chile, wherein there is
no "social security system". There are simply several
mutual-funds (well, with some minor differences), and
people simply have to put some of their income into
their retirement fund accounts. You could call this
system a privatization of the SS system, or you could
call it the elimination of it. Essentially, it makes
no difference. As long as the government doesn't have
control of your retirement funds, that is.
Not everyone will be able to provide for their own retirement. What do you
propose be done with people who cannot provide for their own retirement?
How about those who could have but didn't?
Not everyone can provide for their own food or shelter
when they are young either.
The AGE of the person is irrelevant. Welfare is welfare.
If you want a WELFARE system, fine. But to set up a
welfare system and call it a pension fund is fraud.
If everyone put 10% of their income into an IRA (and
got appropriate tax deductions, which would make it
about the same as the current out-of-pocket 7+%),
even assuming conservative investments, they'd come
out with a healthy retirement fund. Those who are
not so saving, are also those who are not working now.
How are they supporting themselves now?
If they are on welfare now, I suppose they'll be on
welfare when they get old, too. Entitlements for
those who are poor and starving and unable to work
are a completely separate discussion from Social
Security.
--D
--
dme...@panix.com
David Meyers
dme...@panix.com (David Meyers) writes:
>Moynihan still claims it is the most successful social
>program ever. Of course he does. He's got a six-figure
>pension coming from the taxpayers, and he'll retire well
>before SS goes belly up. On MY hard earned money.
it arguably was the most successful social program, but not as a
retirement program. When it came into effect, the elderly had the
highest poverty rate of any age category, now I suspect they are close to
the lowest. SS is and always was a welfare program, just dressed up to
gain middle class support.
Sure it is successful. If you define success as taking
a substantial part of the income from those who are
working and transfering it to those who are not. Oddly
enough, those who are not working, but getting money from
those who are suddenly have the lowest poverty rate of any
age category. They are also the same age category who
have the highest rate of homeownership.
And the ones who are working and paying for these
things are the same ones who cannot afford to buy
homes anymore.
This is good?
As you say, SS is and always was a welfare program. Since
it is, the discussion of it needs to be on the true terms.
Moynihan, in particular, screams loudly that it is NOT
welfare, nor an entitlement, and that it is a separate
and distinct trust fund, which will provide income to those
who worked and put money in. Entitlements have no such
requirement that the recipients previously contributed.
Decide which it is, and discuss it on the terms of what
you've figured out. Is it welfare? If so, then the lie
about a "trust fund" needs to be eliminated. And real,
hard means-tests need to be employed. And the separate
taxation for it needs to be eliminated. Is it a retirement
fund? If so, then it simply needs to be privatized
altogether into IRAs.
--D
Gary L. Dare
: ": Whatever the other merits of a voucher-like program, I still dont
: ": see "cost reduction" a likely result of implmening such a system.
: "Besides our having a less litigious society up north, with little in
: "the way of defensive medicine and its effects like too many MRI's ...
: Problem: per capita medical care costs have risen at essentially
: the same rate in Canada as in the US, since Canada implemented
: socialized medicine.
The Canadian "system" is not a public HMO like Britain's and the
various provincial implementations have taken various forms. The
medical sector remains private. Right now, implementations range
from fairly restrictive PPO's in the Atlantic provinces and now in
Ontario, and looser ones elsewhere especially in the emerging (or
rather, RETURNING) voucher approach of Alberta's (i.e., floating
rates, not PPO, and broader private supplementary coverage to get
back price feedback).
: Problem: availability of medical care in Canada has *not* kept
: pace with the US, and in the last decade has been declining in
: some important areas. For example, Canada has both longer
: average hospital stays and fewer hospital beds per capita,
Those are not problems ... longer hospital stays mean that Canadians
are not getting rushed out due to health insurance co. or HMO policy
dictated by accountants. Canadian metro areas are not large by U.S.
standards; the PROVINCE of Quebec has fewer people than metro Chicago.
Many hospital beds have disappeared because the Conservatives cut back
on "operating grants" (corporate welfare) and the market says that all
those extra beds were not needed, just pork.
gld
--
~~~~~~~~~~~~~~~~~~~~~~~ Je me souviens ~~~~~~~~~~~~~~~~~~~~~~~~~~
Gary L. Dare g...@prairienet.org
"Support NAFTA - Eat Mexican!" uk...@freenet.victoria.bc.ca
(El Teddy's ad, NYC) (formerly g...@columbia.edu)
Gary Forbis
|> In article <3k2age$3...@nntp3.u.washington.edu> for...@cac.washington.edu (Gary Forbis ) writes:
|> >I hate to break it to those wishing to privatize Social Security, but...
|> >Private plans are no more secure than Social Security. In either case the
|> >generation after will have to pay for the benefits. Maybe some ways makes
|> >some feel more comfy than others--the effects are the same.
|> >
|> >--gary for...@u.washington.edu
|>
|>
|> But the generation after wouldn't have to pay for squat if individuals
|> were responsible for their own retirement.
I should have said, "the generation after will have to provide the goods and
services...." The age demographics will be the same independent of retirement.
|> Forget privatization, we
|> need to eliminate it completely. Now before you hypersensitive ones
|> out there accuse me of hatred for the elderly. . .
|> A phase out of SS would have to be slow. I don't have a problem with that.
|> It should begin soon, however, because the situation isn't going to
|> cure itself. Even if it takes 25 years to get our population (read
|> "addicts") off of this drug, the process needs to start sometime. It
|> is not a proper function of government to provide a retirement plan for
|> it's people. Just say no to SS.
Not everyone will be able to provide for their own retirement. What do you
propose be done with people who cannot provide for their own retirement?
How about those who could have but didn't?
--
--gary for...@u.washington.edu
Alan Bomberger
>I hate to break it to those wishing to privatize Social Security, but...
>Private plans are no more secure than Social Security. In either case the
>generation after will have to pay for the benefits. Maybe some ways makes
>some feel more comfy than others--the effects are the same.
Why don't you finish your education before showing your ignorance.
Private annuities are well thought out. If they weren't the companies
would fail. They are not ponzi schemes, that is illegal (except when
the government does it). You buy an annuity and the company pays you
a fixed amount for your life. They know how to do that. They make
money doing it.
--
Alan Bomberger | (408)-992-2748 | al...@oes.amdahl.com
Amdahl Corporation | Opinions are free, worth it, and not Amdahl's
It is seldom that liberty of any kind is lost all at once. - David Hume
Gary Forbis
In article <alan.79...@amdahl.com>, al...@oes.amdahl.com (Alan Bomberger) writes:
|> for...@cac.washington.edu (Gary Forbis ) writes:
|>
|> >I hate to break it to those wishing to privatize Social Security, but...
|>
|> >Private plans are no more secure than Social Security. In either case the
|> >generation after will have to pay for the benefits. Maybe some ways makes
|> >some feel more comfy than others--the effects are the same.
|>
|> Why don't you finish your education before showing your ignorance.
|>
|> Private annuities are well thought out. If they weren't the companies
|> would fail. They are not ponzi schemes, that is illegal (except when
|> the government does it). You buy an annuity and the company pays you
|> a fixed amount for your life. They know how to do that. They make
|> money doing it.
I was under the impression that part of the last minute negotiation of the
gatt bill involved the government absorbing some retirement plans. I'm just
starting to get acquainted with my government and don't have much knowledge
about such matters. It looks like Thomas has the text of bills of the 103rd
congress so I looked out there to see what I could see. Well, I don't know
exactly what I'm reading here, but here's part of what I found:
3>SEC. 769. SPECIAL FUNDING RULES FOR CERTAIN PLANS.
(a) Funding Rules Not To Apply to Certain Plans: Any changes made by
this Act to section 412 of the Internal Revenue Code of 1986 or
to part 3 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 shall not apply to--
(1) a plan which is, on the date of enactment of this Act, subject
to a restoration payment schedule order issued by the Pension
Benefit Guaranty Corporation that meets the requirements of
section 1.412(c)(1)-3 of the Treasury Regulations, or
(2) a plan established by an affected air carrier (as defined
under section 4001(a)(14)(C)(ii)(I) of such Act) and assumed by a
new plan sponsor pursuant to the terms of a written agreement with
the Pension Benefit Guaranty Corporation dated January 5, 1993,
and approved by the United States Bankruptcy Court for the
District of Delaware on December 30, 1992.
Now, I didn't know PBGC existed and I don't know its relationship to the
federal government.
One of my fellow workers had the unfortunate experience of working for a
company that controlled the workers retirement funds (or so I believe) and
when the company went under so did the retirement fund. So it goes.
Is there any assurance that retirement plans aren't built on a house of cards?
Maybe I'm too darn fiscally conservative for my own good. I worry about the
coming time when lots of people will be pulling funds out of their savings
to pay for monthly expenses. Maybe some nice economist can explain to me
why this won't have a substantial effect on the markets. I'd also like to
know why all these forty-something boomers attempting to save for their
retirement isn't affecting the market right now.
--
--gary for...@u.washington.edu
Gary Forbis
|> In article <3k34us$a...@nntp3.u.washington.edu> for...@cac.washington.edu (Gary Forbis ) writes:
|> >Not everyone will be able to provide for their own retirement. What do you
|> >propose be done with people who cannot provide for their own retirement?
|> >How about those who could have but didn't?
|> >
|>
|>
|> Your second question is certainly more applicable than your first.
|> Virtually anyone can provide for their own retirement. There really
|> are very few legitimate excuses for not doing so. I make about $750
|> per month to support myself in grad school. Very few people out in
|> the "working world" have a paycheck that small. Even with this small
|> paycheck, I manage to save about $700 per quarter for tuition. Anybody
|> in the "working world" can save 10% of their income for a 401K or
|> something similar.
I guess you're right. I'm wondering how you came to afford grad school.
How much are expenses a month anyhow?
In 1979 I was making $650. 10% would be $65. Now let me see. What would
that $65 be worth today at a 5% annual rate of growth? (I'm not sure people
can expect to beat inflation by 5%. I think many don't even meet inflation.)
Now let's say that I want to take $650 a month in retirement and I don't
want to touch my principle. How many years would I have to save assuming
no inflation and 5% annual return on investment?
I'm making more that $650 now, but that won't affect the amount saved then.
[text deleted]
|> Therefore, if someone could have provided a
|> personal retirement plan but didn't, I guess he/she will have to
|> continue working. That is the choice that he/she made. Big daddy
|> (government) can't be expected to cover all of our stupid choices with
|> a fluffy safety net.
Well, I hope you never made or ever will make any stupid choices. I hope
you never have a recoverable expensive illness. I hope everything turns out
rosy.
I know I've made some stupid choices. Heck I'm still paying for a mistake
I made fifteen years ago (no, not a kid.) I'll still be paying 10 years from
now, that'll give me a little over 10 years to build that nice little nest
egg for my retirement. Sure I could walk away from a mistake I made in my
late twenties but that would just make it someone elses problem.
--
--gary for...@u.washington.edu
Amit P. Rege
: In article <D55rz...@world.std.com>, Karl Wee <win...@world.std.com> wrote:
: >I don't have the exact numbers. My hunch is that it won't be able to
: >pay the IOU's. Anyway, even paying all the IOUs won't be enough, as
: >each person is "entitled" to much more than he put in. What a system....
Richard Foy (rf...@netcom.com) wrote:
: The Cato Institute, I believe a libertarian think tank, says this
: isn't true. For infromation from a study they did on this subject
: see URL:
: ftp://ftp.netcom.com/pub/rf/rfoy/socialsec.html
I read your collection of previous newsposts on your home-page.
It is hard to figure out what you are saying.
I will try to state a few points which I gathered and comment on them.
1. In the quoted para above, you say that today the government does
not promise people a good return. This is true for anybody paying
into the system today...
2. But then, in your "home-page", you state that "government already
screwed people who are retired today". THAT IS FALSE!
They got above-market returns for the pittance they paid into the
system. Look at the graph in today's Time magazine article (Mar 13,
page 29) The payments INTO the system shows clearly that it is a
pyramid scheme. Early "exitees" of a pyramid scheme are paid off
handsomely.
Yet, you oppose lowering anybody's benefits, from the mistaken belief
that they got LOW returns. There should be some relationship
between what they paid into it, and what they get out.
However, I oppose lowering current retiree benefits EXCEPT through
means-testing, restricting payments for people who earn far more than
their Social Security payments. We will have to give people time to
adjust.
MY FOCUS is on lowering our taxes into the system. Those taxes are
killing our ability to save for the future. A "solution" that calls
for raising those taxes is NO SOLUTION in my book.
- Amit
--
Amit P. Rege | Rege Systems,
e-mail: amit...@netcom.com | Fremont, CA 94538-4161
At the OTHER end of every government program is a tired taxpayer!
SLAVE TO THE GRIND
>|> Forget privatization, we
>|> need to eliminate it completely. Now before you hypersensitive ones
>|> out there accuse me of hatred for the elderly. . .
>|> A phase out of SS would have to be slow. I don't have a problem with that.
>|> It should begin soon, however, because the situation isn't going to
>|> cure itself. Even if it takes 25 years to get our population (read
>|> "addicts") off of this drug, the process needs to start sometime. It
>|> is not a proper function of government to provide a retirement plan for
>|> it's people. Just say no to SS.
>Not everyone will be able to provide for their own retirement. What do you
>propose be done with people who cannot provide for their own retirement?
>How about those who could have but didn't?
>
Your second question is certainly more applicable than your first.
Virtually anyone can provide for their own retirement. There really
are very few legitimate excuses for not doing so. I make about $750
per month to support myself in grad school. Very few people out in
the "working world" have a paycheck that small. Even with this small
paycheck, I manage to save about $700 per quarter for tuition. Anybody
in the "working world" can save 10% of their income for a 401K or
something similar. If someone decides to spend that last 10% on a
VCR, a stereo system, or to help pay for a lease on a car that is
slightly out of their price range, should I fell sorry for them when
they don't have enough set aside to retire? Virtually anyone out there
today could take a 10% reduction in income and successfully adjust. If
you have the money taken out before you get your take home pay, you
will not even notice that missing portion. It's just a question of
"Do I want to make this small sacrifice?" If someone chooses not to
make this small sacrifice, that's his/her choice and he/she must deal
with the consequences. Therefore, if someone could have provided a
personal retirement plan but didn't, I guess he/she will have to
continue working. That is the choice that he/she made. Big daddy
(government) can't be expected to cover all of our stupid choices with
a fluffy safety net.
Hugh Appet
apr...@San-Jose.ate.slb.com says...
laws allowing $2000.00/yr to be paid into IRA's. Then congress repealed
most of it. They claimed it was not a success. According to Barlett and
Steele in America, Who Really Pays the Taxes, it was actually such a
success that there was a large loss of revenue to the gov't. I don't hear
the Republicans proposing a renewal of even these modest programs.
hobson
David Meyers
|> Private annuities are well thought out. If they weren't the companies
|> would fail. They are not ponzi schemes, that is illegal (except when
|> the government does it). You buy an annuity and the company pays you
|> a fixed amount for your life. They know how to do that. They make
|> money doing it.
Are you talking about _individual_ purchases of such instruments,
or are you talking about pension funds created by private
companies for their employees? The latter are group funds with
payouts according to formula (at least usually, and as I understand
it). It is the latter which are so heavily regulated, and which
are NOT as well thought out or reliable as you imply above -
at least partially due to their collective nature.
Individual accounts, like, for example, an IRA, are different.
If a retiree takes his IRA and sets up a regular disbursement
schedule - like removing a fixed dollar amount each month to
be transferred to his checking account, it is subject to the
strict limit that when the IRA is out of money, the transfers
stop. The retiree had better guess pretty well how long he'd
going to need that payout to last.
Annuities are still different. They still require projected
payout periods, but the onus is on the annuity fund manager
to take care of. They are NOT guaranteed. They cannot be,
since they, too, like the IRA payout, can run out of money.
Which, like any other investment, has a built in incentive
for you to diversify - to not put all your nest-eggs into
one basket.
I was under the impression that part of the last minute negotiation of the
gatt bill involved the government absorbing some retirement plans. I'm just
Now, I didn't know PBGC existed and I don't know its relationship to the
federal government.
The PBGC is a government agency which insures the values
of pension funds. The insurance payments were increased
as part of GATT.
PBGC had been underfunded - meaning that taxpayer dollars
were making up the difference between the insurance premiums
paid by the pension funds and the money necessary for it
to meet its obligations. The provision in GATT was a means
of helping offset the cost of GATT basically by cutting
unrelated spending (just as any new spending bills need
either tax increases or other cuts). The unrelated spending
was the continual pension fund bailout.
See today's (Wed. Mar 15) Wall Street Journal's cover page
article.
One of my fellow workers had the unfortunate experience of working for a
company that controlled the workers retirement funds (or so I believe) and
when the company went under so did the retirement fund. So it goes.
Is there any assurance that retirement plans aren't built on a house of cards?
Only a little. There is some insurance. It's still just
private investments, though subject to unbelievable amounts
of federal regulation.
Frankly, though, private investments and pension funds are
none of the federal government's business. Just as labor
relations and health insurance.
The absurd ties between employers and health insurance and
pension funding are exceptionally counterproductive. It is
the business of each individual person to pay for both.
If a company wants to offer these benefits, so be it, but
there should be no tax incentive for the employer to provide
these things instead of that tax incentive (if offered at
all) being offered directly to the individual.
As far as pension funds go, eliminate the employer part of
the 401k business, and simply expand the IRAs. There is
no reason why someone who's employer set up a 401k plan
can put $9000 dollars into what is effectively just an
IRA, tax deferred, and someone who's employer does not
can only put in $2000.
This is all completely separate from Social Security and the
Balanced Budget discussion, though.
Maybe I'm too darn fiscally conservative for my own good. I worry about the
coming time when lots of people will be pulling funds out of their savings
to pay for monthly expenses. Maybe some nice economist can explain to me
why this won't have a substantial effect on the markets. I'd also like to
know why all these forty-something boomers attempting to save for their
retirement isn't affecting the market right now.
If the system of collective retirement programs were fixed,
or eliminated, the individual would build up an investment
portfolio over the course ofhis workin life (for example, by
mandating that 10% of the first $60k go into the IRA which
would work out to about the same reduction in take-home pay
as the existing 7+%, taxed, going to SS). That investment
portfolio, like you say, would be spent during the retirement.
But the net private investment would likely be increased,
as the current workers build up their portfolios. The current
system has no net retirment investment (at least as far as
the Social Security system goes, not the pension funds or
IRAs). The money "saved" in Social Security is not invested
at all (actually, there is currently a $58billion surplus,
plus a $475billion "trust fund" which is all invested in
short term treasury securities. That fund is projected to
be completely empty before 2030, and the current surplus
which increases that trust fund's balance will have turned
into a fund-draining deficit by 2020). The entire "trust
fund" which is currently used by the federal government to
pretend that the national debt is half a trillion dollars
smaller than it actually is, and that the deficit is $58
billion smaller than it actually is, ought to be split
off altogether. There is no rationale whatsoever for the
federal government to pretend that the SS Trust fund is
just part of the federal budget. Unless it is willing
to cease calling it a "trust fund" - in which case the
pretense of SS being a pension fund or retirement plan
would also stop, and it would simply be called "welfare".
In any case, private, _individual_ retirement accounts
would INCREASE the net savings and investment in our
country. The current system does no such thing - the
money is simply gone. (Though, the democrats might
argue that all the federal debt is an "investment in
our country". The merit of that point of view is highly
debatable).
--David
--
dme...@panix.com
Richard Foy
Rex Ridgeway <re...@freenet1.scri.fsu.edu> wrote:
Rex I see you are at it again.
>
> "...rates of return were calculated for a sample
> of workers who retired during the years 1967-70
^^^^^^^
> ...For workers who retired at age 65, average
^^^^^^
> real rates of return for men ranged from 23%
^^^
> in the lowest earnings quartile to 8.6% in the
^^^^^^ ^^^
> highest. For women the corresponding range
^^^^^^^
> was from 29% in the lowest earnings quartile
> to 9.8% in the highest."
Now ones first impression when one reads this paragraph is, my God
there are a lot of welthy senios out there getting a windfall.
But look at what I underlined.The data in this paragraph is for
people who retired in 1967-1970 at age 65. Those people today woudl be
(1995 - (1967 to 1970) + 65 years old. That is from 90 to 93 years
old. There are just not many people in that age bracket still alive,
to amke a tinkers dam difference in the total social security bill.
Second most people when they target Social Security fro reductions
talk about means testing, that is cutting the benefits for the
wealthy. I don't have the data but I suspect that there is a very
high correlation with between those taht are curreenly wealthy and
those who are in the highest quartile. These people, now over 90
years old, received or are receiving an 8.6% return on their
investment. Not too bad but hardly a widnfall.
Now many people say there is no money in the trust fund to pay Social
Security. That is true. But it is equally true that there is no money
in the Federal Treasury to pay the interest on the National Debt, of
the Savings Bonds, on the T-Bills and on the many other forms of
loans that have been made to the US Government. What makes the
interst on the National Debt more Sacred than the Debt fo Social
Security?
In an other post someone said that Lyndon Johnson paid for his "butter
and guns" programs by merging the Social Security with the General
Budget. That is true. But it is equaly ture that no one since Johnson
de-merged the two.
If you are truly interested in finding out the real problems with
the US economy I suggest you take a look at some of the references
summarized in:
URL ftp://ftp.netcom.com/pub/rf/rfoy/bkpo.html
--
"Power concedes nothing without demand." --Frederick Douglass
Richard Foy ftp://ftp/netcom.com/pub/rf/rfoy/bkev.html
Richard Foy
Amit P. Rege <apr...@San-Jose.ate.slb.com> wrote:
>
>
>I would like to respectfully disagree with BOTH of you! If something
>is done today, we could save the payments to the elderly, and still
>design a way to accumulate substantial amounts in individual accounts
>owned by tomorrow's retirees.
>
>
>- Super-IRA workers (younger workers) are still taxed for elderly
>benefits reducing the tax portion gradually UNTIL at the end of
>the phase-out it becomes ZERO.
>
>(Source: Social Security: Prospects for Real Reform, edited by
>Peter Ferrara)
>
>
>
>Note that with this method, people like Tom Spillman, who were forced
>into the pyramid scheme of today, will still get their payments. It
>is hardly their fault! Who, among us, would have voted against a
>government-obfuscated and sponsored pyramid scheme IF IT WAS IN THEIR
>FAVOR? That was how it was promised 60 years ago...
Yow in contrast to most others are looking for postive solutions.
You aren't exactly right however on why people approaved the Social
Security when it was first implemented. As voted for it was not a
pyramid scheme. The life expectancy tables for that period preclude
it from being a pyramid scheme.:
Life Expectancy
Year Total Men Women
1930 58.7 58.1 61.6
1940 62.9 60.8 65.2
I don't know exactly when Social Security was became law, but I
suspect that it was closer to 1930 than 1940. It really doesn't
matter. The poople that supported the law could not reasonably expect
to get more money back than they put in. The median person would
expect to get *nothing out of it. More people died before they
reached retirement age than did those who reached it.
The people who supported it were the millions who had seen the bank
failures, who had seen many people lose all of their savings and they
were concerned about the people being destitute who did live to an
old age.
1950 68.2 65.8 71.1
It is interesting to note that the biggest increases in live
expectancy occurred in the decade from 1940 to 1950. The increase
during that decade was almost as much as in the period from then
until now.
Surely those people deserve something for that achievement. :-)
>
>(Pay $50 per year NOW, then get hundreds of dollars per month after
>retirement for life; survivors, widows, NO PROBLEM! Backed by the
>full faith and credit of the United States Treasury.)
Your picture it totally inaccurate for the people who originally
supprted Social Security. The people who are to be faulted are the
ones from ~1950 on who, in a variety of ways, did not keep the sytem
actuarily sound as the life expectancy increased.
>
>
>- Amit
>
>--
>Amit P. Rege | Rege Systems,
>e-mail: amit...@netcom.com | Fremont, CA 94538-4161
>
>At the OTHER end of every government program is a tired taxpayer!
>
>News brief I am looking for (write to me if you see this anywhere):
>
>The California Attorney General's office is suing the US Government to
>cease-and-desist from using the misleading phrase "backed by the full
>faith and credit of the US Government" in the advertisements for US
>Savings Bonds and Social Security literature. They suggested instead
>the phrase "backed by the willingness and ability of future US
>taxpayers to pay higher taxes; subject to legislative change".
>
>Repeal FICA Taxes! Dismantle the Social Security Pyramid scheme!
>
Richard Foy
The fascinating thing to me is that it was exactly the risk
associated with private investments, in particular the bank failures
of the early 30's, that prompted the implementation of Social
Security.
Oh. How soon we forget. It seems we can't even remember the S&L
failures of a few years ago, let along the Great Depression.
Or if we do rember we say it is all the govenments fault. All the
problems are a combination of faults, the government, the
businesses,and the peoples.
Richard Foy
SLAVE TO THE GRIND <gt1...@prism.gatech.edu> wrote:
>A phase out of SS would have to be slow. I don't have a problem with that.
>It should begin soon, however, because the situation isn't going to
>cure itself.
It is good that you see this.
>is not a proper function of government to provide a retirement plan for
>it's people. Just say no to SS.
What do you think are proper functions of the government?
Gary Strand
gf> Gary Forbis
gf> We need to balance the budget and we need to make social security sound.
The two goals are not politically possible at this time.
rf> The fascinating thing to me is that it was exactly the risk associated
with private investments, in particular the bank failures of the early
30's, that prompted the implementation of Social Security.
Actually, FDR objected to both FSLIC and FDIC. SS sounds good in principle -
it's unfortunate it has declined into a simple wealth transfer scheme, from
the poor young to the rich old.
rf> All the problems are a combination of faults, the government, the busines-
ses,and the people.
To a point.
Let me ask both of you a question - would you be willing to give me the mon-
ey I've put into SS, so far, right now, in exchange for my signing over to
you any and all SS benefits due me when I reach the proper age? I'm 30.
--
Gary Strand WWW: http://www.cgd.ucar.edu/cscor/gary/gary.html
stra...@ncar.ucar.edu PO Box 3000 Boulder CO 80307-3000 (303) 497-1336
Opinions stated here are mine alone and are not those of NCAR, UCAR, or the NSF
Amit P. Rege
Doug Fierro (fie...@sv.legent.com) wrote:
: The facts are, the cost of malpractice in the U.S. as a percentage
: of total health spending is maybe 3% at most. There are much
: bigger players in the U.S. healthcare industry that contribute to
: higher costs.
Are we looking at the actual malpractice "industry" and its annual
revenues or turnover?
We should also be looking at the "preventive expenditure" that doctors
use to inoculate themselves against being part of that above statistic.
(Just pointing out what I wondered. Your 3% figure MAY be correct
even in this context)
- Amit
Amit P. Rege
Good, thoughtful questions, Gary. You and I may learn something
from the answers. Here is my attempt to keep the ball rolling!
Previously, Gary Forbis (for...@cac.washington.edu) wrote:
> I hate to break it to those wishing to privatize Social Security,
> but...
> Private plans are no more secure than Social Security. In either
> case the generation after will have to pay for the benefits. Maybe
> some ways makes some feel more comfy than others--the effects are
> the same.
It is hard to understand this point. Paying off claims from the
returns earned by properly invested assets is much, much easier than
paying off claims from future tax revenue! That is the difference
between a privatized SocSec system and today's system.
If you worry about the national debt figures, you will go into
catatonic coma when you hear about the FUTURE UNFUNDED LIABILITY of
taxpayers. (Hint: much HIGHER than national debt, and in addition to
it) It is not for nothing that the President's budget mentions that a
child born in 1993 will expect to pay 80%+ of expected lifetime income
IN TAXES, on average.
My son is going to love this system when he grows up! Time to
migrate to Chile!
> Look Social Security is also an insurance plan. It's hard to get
> one's money and one's life to always come out even. Are people
> supposed to kill themselves when their money runs out?
It is insurance only in the political "marketing" sense! It has NOT
been set up as insurance, has laughably weird accouting standards and
ways of calculating pay-offs.
> We need to balance the budget and we need to make social security
> sound. We do not need to privatize social security and to do so
> could place it at risk every much so as keeping it public.
To the contrary, today's plan is "protected" ONLY by a single vote in
the House and Senate. A private, mutual-fund-like plan would be
really untouchable. This plan is hanging by a thread! And that is
why I try to convince people that it sucks...
Later, Gary Forbis (for...@cac.washington.edu) wrote:
> If someone in the know could help me with this I'd appreciate it.
I like the attitude. Some people have been throwing sources out here.
Here are 3, readily available in public libraries (at least Fremont):
1. The Graying of America, by James Jorgensen.
2. Social Security: Prospects for Real Reform. Editor, Peter Ferrara.
3. Mercer Guide to Social Security. (annual)
> I was under the impression that part of the last minute negotiation
> of the GATT bill involved the government absorbing some retirement
> plans.
They reduced the dollar-limit of contributions to $22,500, I believe.
I know for sure that they reduced the income limit for Keogh and
SEP-IRA plans from $225,000 to $150,000. That means, if somebody
could have put away the full $30,000 for their retirement, now they
can only put away less. I know, I know, it is rather ridiculous, but
some people do earn much more than we do... read on.
> Now, I didn't know PBGC existed and I don't know its relationship to
> the federal government.
It is a bit like the FDIC, and FSLIC. Same problems! i.e. it can
handle a small number of pension bankruptcies, but it will go belly-up
quickly if many plans fail simultaneously. So, we have another
potential taxpayer bail-out-in-the-waiting here.
> One of my fellow workers had the unfortunate experience of working
> for a company that controlled the workers retirement funds (or so I
> believe) and when the company went under so did the retirement fund.
> So it goes.
Companies can do things in violation of the pension law. If you want
to avoid such problems, why not support a lowering of the tax rate,
and then people will NOT be forced to enter into such complicated
government-sanctioned arrangements?
> Is there any assurance that retirement plans aren't built on a house
> of cards?
If you build programs to ensure that the plans are solid come what
may, you encourage people to chase higher risk and reward. The "moral
hazards" of insurance. An environment of caveat emptor, and ratings
agencies avoids that problem. It is BETTER that retirees buy their
own insurance. New Zealand has abolished their public bank insurance
scheme.
> Maybe I'm too darn fiscally conservative for my own good. I worry
> about the coming time when lots of people will be pulling funds out
> of their savings to pay for monthly expenses. Maybe some nice
> economist can explain to me why this won't have a substantial effect
> on the markets.
It could have some effect, but the "monthly expenses" become revenue
and earnings for some other companies. It is NOT going into
mattresses, except as sales of Levitz furniture stores. :-)
The effect may be seen as a drop in sales for MTV, and a rise in
sales for RV repairsmen. Probably not significant in the total.
> I'd also like to know why all these forty-something boomers
> attempting to save for their retirement isn't affecting the market
> right now.
Where do you think we get hundreds of billions of dollars bouying up
the stock and bond markets? Did you think that "savings" are bad for
the economy? Keynes 101, anybody?
Paul Barnett
> Let me ask both of you a question - would you be willing to give me the mon-
> ey I've put into SS, so far, right now, in exchange for my signing over to
> you any and all SS benefits due me when I reach the proper age? I'm 30.
Nope, not me. I have no faith that the benefits will be there at that
time, because the excessive taxation that will be required to deliver
them will result in a revolt by taxpayers. The Social Security
administration itself calculates that the combined employee-employer tax
rate would have to rise to 41% (it's currently at about 12%) to maintain
the current level of benefits under its most pessimistic scenario. If
you like, I'll followup with the details of their assumptions.
On the other hand, I would be happy to forfeit both the money I have put
in and the benefits PROMISED (note the use of that word in place of DUE)
me in exchange for the opportunity to invest the SS taxes I am currently
obligated to pay until I retire.
--
Paul Barnett Convex Computer Corp.
MPP OS Development Richardson, TX
Andrew Hall
>>>>> Richard Foy writes:
<<snip>>
Richard> Your picture it totally inaccurate for the people who
Richard> originally supprted Social Security. The people who are to
Richard> be faulted are the ones from ~1950 on who, in a variety of
Richard> ways, did not keep the sytem actuarily sound as the life
Richard> expectancy increased.
Sorry, but pay as you go is never, ever, actuarially sound.
In fact, it is illegal for any pension plan except the
SS plan.
The probability of failure of a pay-as-you-go pension system is
1.000
ah
Andrew Hall
>>>>> Amit P Rege writes:
>> I was under the impression that part of the last minute
>> negotiation of the GATT bill involved the government absorbing
>> some retirement plans.
Amit> They reduced the dollar-limit of contributions to $22,500, I
Amit> believe. I know for sure that they reduced the income limit
Amit> for Keogh and SEP-IRA plans from $225,000 to $150,000. That
Amit> means, if somebody could have put away the full $30,000 for
Amit> their retirement, now they can only put away less. I know, I
Amit> know, it is rather ridiculous, but some people do earn much
Amit> more than we do... read on.
This is sort of right, but I do not think GATT had anything to
do with it.
The amount that the employer was allowed to put into 401(k)s's was
reduced 7,500. The income that employers was allowed to match
401(k) contributions on was lowered to $150,000. We are still
allowed to use our pre-tax money to put a full $30,000 into
401(k)'s. I know, because I did. My company (bless their
hearts) cut a special check for the $7,500 difference (which,
according to the law, was of course, taxed).
ah
Richard Foy
>: The Cato Institute, I believe a libertarian think tank, says this
>: isn't true. For infromation from a study they did on this subject
>: see URL:
>
>: ftp://ftp.netcom.com/pub/rf/rfoy/socialsec.html
>
>
>I read your collection of previous newsposts on your home-page.
>It is hard to figure out what you are saying.
The fiel socialsec.html is primarily a copy of a post from soneone
else of data in the Cato study.
>
>I will try to state a few points which I gathered and comment on them.
>
>
>1. In the quoted para above, you say that today the government does
>not promise people a good return. This is true for anybody paying
>into the system today...
>
>
>2. But then, in your "home-page", you state that "government already
>screwed people who are retired today". THAT IS FALSE!
I hear you. I know that you believe this. I guess it alll depends on
how you define "screwed."
Is it not getting back the actual number of uninflated dollars they
they put into the system? With that definition people are not
getting screwed.
Is it that they should only get back the number of $ they put into
the the system, adjusted for inflation? With that definition people
are not gettting screwed.
If it is that they should only get back the amount of money they and
their emplyee put into the system adjusted for inflation, I am not
sure if they are getting screwed or not. I suspect some are and some
aren't.
If the definition includes that they should get a reasonable rate of
return on the money put into the sytem, they very definately most of
the living retired folks are getting screwed. There are a few in
their 90's who are not getting screwed who are gettign a reasonable
rate of return on the money put into the sytem on their behalf.
The data in the Cato report supports ths statement. If you can't
deduce that fromt the summary of the Cato report in my web page, I
woudl suggest you get the whole report from the Cato institute.
>
>They got above-market returns for the pittance they paid into the
>system. Look at the graph in today's Time magazine article (Mar 13,
>page 29) The payments INTO the system shows clearly that it is a
>pyramid scheme. Early "exitees" of a pyramid scheme are paid off
>handsomely.
>
>Yet, you oppose lowering anybody's benefits, from the mistaken belief
>that they got LOW returns. There should be some relationship
>between what they paid into it, and what they get out.
>
>However, I oppose lowering current retiree benefits EXCEPT through
>means-testing, restricting payments for people who earn far more than
>their Social Security payments. We will have to give people time to
>adjust.
>
>MY FOCUS is on lowering our taxes into the system. Those taxes are
>killing our ability to save for the future. A "solution" that calls
>for raising those taxes is NO SOLUTION in my book.
I agree 100%. However a solution that is based on an erroreous
assement fo the problems is also no solution. If you are at all
interested in what I think are the real source of the problems, I
would suggest you look at another web page in my directory.
ftp://ftp.netcom.com/pub/rf/rfoy/bkpo.html
This has summaries of several books discussing the problems of the US
and in paraticular the US economy.
Unfortuanately none of them give feasible solutions IMO.
SLAVE TO THE GRIND
>I guess you're right. I'm wondering how you came to afford grad school.
Worked for every penny. The cold truth at Tech is if you are not a
"minority", you had better be something special in order to get funding.
I guess I'm not that special so I work 50-60 hrs/week in the summer and
20-25 hrs/week during school quarters.
>In 1979 I was making $650. 10% would be $65. Now let me see. What would
>that $65 be worth today at a 5% annual rate of growth? (I'm not sure people
>can expect to beat inflation by 5%. I think many don't even meet inflation.)
>Now let's say that I want to take $650 a month in retirement and I don't
>want to touch my principle. How many years would I have to save assuming
>no inflation and 5% annual return on investment?
>I'm making more that $650 now, but that won't affect the amount saved then.
Using 10% (which isn't that hard to save), someone making $15,000 per
year (which is borderline "poverty") could save $1500 per year. Using
the formula for a periodic payment given monthly compounding of interest
(I won't do the calculation here), a person could save a high six figure
amount in 35 years. That means you can start as late as 30 years old and
still be in good shape. If you work until age 70, you could start as late
as 35. This assumes a modest rate of return - nothing special. Planning
for retirement doesn't require a superhuman effort. You only need to
live within your means (i.e. not running around with three credit cards
and a mound of debt).
>|> Therefore, if someone could have provided a
>|> personal retirement plan but didn't, I guess he/she will have to
>|> continue working. That is the choice that he/she made. Big daddy
>|> (government) can't be expected to cover all of our stupid choices with
>|> a fluffy safety net.
>
>Well, I hope you never made or ever will make any stupid choices. I hope
>you never have a recoverable expensive illness. I hope everything turns out
>rosy.
>I know I've made some stupid choices. Heck I'm still paying for a mistake
>I made fifteen years ago (no, not a kid.) I'll still be paying 10 years from
>now, that'll give me a little over 10 years to build that nice little nest
>egg for my retirement. Sure I could walk away from a mistake I made in my
>--
>--gary for...@u.washington.edu
Nothing has to be rosy (it never has been). I've made my share of bad
choices but I very rarely make stupid choices. There is a difference.
If you're riding the financial line, you have to be conservative. I've
seen too many credit reports (at one of my jobs) where people just don't
seem to give a damn. They continue to burn money paying for interest
on credit card debts that have nothing to do with misfortune (i.e. medical
bills). This isn't rocket science (which I know a few things about). It
only requires a little bit of thought and, if need be, conservative
financial decisions. Consumers, in general, just don't pay attention.
As for you only having 10 years to build your nest egg, bologna. You
can start now. It might require some uncomfortable sacrifice but you
get use to it. My life is about as financially austere as it gets but
I don't complain. Money just isn't something I covet after. I'm no
bible beater but it is painfully obvious that too many people today
have given no consideration to 2 Timothy 6: 6-10. Money (in any
form) is the root of all evil. Too many people let it control them.
SLAVE TO THE GRIND
>
>Yow in contrast to most others are looking for postive solutions.
>You aren't exactly right however on why people approaved the Social
>Security when it was first implemented. As voted for it was not a
>pyramid scheme. The life expectancy tables for that period preclude
>it from being a pyramid scheme.:
>failures, who had seen many people lose all of their savings and they
>were concerned about the people being destitute who did live to an
>old age.
>
The SS act didn't start out as a retirement plan but it has become such. The
SS act, like the Glass-Stegiel (sp?) act, is a (possibly) good idea whose
time has long past. It is not a proper function of government to set up
retirement plans for the masses. I have no problem with a long phase out of
SS. This is a positive, reasonable solution that needs to be implemented.
We need to make sure future generations don't become SS addicts like the
present crowd. Yes, they were sold a turkey. I don't advocate sticking
the majority of the mop up duties on them. With a 25 year phase out, they
would hardly notice.
Al Date
SLAVE TO THE GRIND <gt1...@prism.gatech.edu> wrote:
>get use to it. My life is about as financially austere as it gets but
>I don't complain. Money just isn't something I covet after. I'm no
>bible beater but it is painfully obvious that too many people today
>have given no consideration to 2 Timothy 6: 6-10. Money (in any
>form) is the root of all evil. Too many people let it control them.
>
Well, I thought that societal wealth was proportionate to local capital
investment, which implies that the LACK of money is the root of all
evil. (8-)
I guess that also implies that economic science was even less
developed during the time that the Old Testament was written than
it is today.
--Al Date
SLAVE TO THE GRIND
>>it's people. Just say no to SS.
>
>What do you think are proper functions of the government?
>
Tactically, that was a good question for you to ask. I could either blow it off
in which case the question would look unanswerable or I could provide a list
with something reasonable left off for you to chew on. Like anything else,
there is a grey area. Some choices are not at all grey. It is however,
reasonable to say that if a large majority of the population can accomplish the
task as individuals, the task is not a proper function of government.
Individuals, by themselves, can't defend the country or make/uphold laws.
Therefore, the government does it. With a little planning and spending habits
that are not obnoxious, anyone can plan for their own retirement. It doesn't
require a PhD. It does require individual responsibility which, today, seems
to be in rather short supply.
Alan Bomberger
Not unless you give me back my money as well. After all you are the
one that is going to pay my benefits. Were there any connection
whatsoever between my contributions and my benefits, I would be happy
to let you bow out. There is none. You 30somethings are going to
pay for my SS benefits (even if they are properly reduced to the simple annuity
value)
I might make the trade offered by Paul but my time is short.
Doug Fierro
>
> Not everyone will be able to provide for their own retirement. What do you
> propose be done with people who cannot provide for their own retirement?
> How about those who could have but didn't?
>
> --
> --gary for...@u.washington.edu
You would still have payroll taxes, except it would not go into
a S.S. fund- it would go directly to an individual 401K or
something similar, where you could see your individual account
gain value over the years. That would take care of those who
could have provided for themselves but didn't.
Doug
Doug Fierro
|\ Legent Corporation
O __________|_\______ Consulting Services
\_.______________________| * * * * * * * * */ fie...@sv.legent.com
__\____ |=================/ (408) 730-3500
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SLAVE TO THE GRIND
>>I don't complain. Money just isn't something I covet after. I'm no
>>bible beater but it is painfully obvious that too many people today
>>have given no consideration to 2 Timothy 6: 6-10. Money (in any
>>form) is the root of all evil. Too many people let it control them.
>
>Well, I thought that societal wealth was proportionate to local capital
>investment, which implies that the LACK of money is the root of all
>evil. (8-)
>I guess that also implies that economic science was even less
>developed during the time that the Old Testament was written than
>it is today.
>--Al Date
Yuck, yuck, yuck. As far as "economic science" is concerned, isn't that an
oxymoron. How does the joke read? If you laid 1000 economists end to end,
they couldn't even reach a conclusion. BTW, for inquiring minds, Timothy is
in the New Testament.
Richard Foy
Gary Strand <stra...@ncar.ucar.edu> wrote:
>rf> Richard Foy
>gf> Gary Forbis
>
>gf> We need to balance the budget and we need to make social security sound.
>
> The two goals are not politically possible at this time.
>
>rf> The fascinating thing to me is that it was exactly the risk associated
> with private investments, in particular the bank failures of the early
> 30's, that prompted the implementation of Social Security.
>
> Actually, FDR objected to both FSLIC and FDIC.
You may be right but I don't understand the connection to SS.
SS sounds good in principle -
> it's unfortunate it has declined into a simple wealth transfer scheme, from
> the poor young to the rich old.
That isn't exactly right IMO. IMO itis too bad that the institution
that guarenteed the SS has declined into banckrupty.
>
>rf> All the problems are a combination of faults, the government, the busines-
> ses,and the people.
>
> To a point.
>
> Let me ask both of you a question - would you be willing to give me the mon-
> ey I've put into SS, so far, right now, in exchange for my signing over to
> you any and all SS benefits due me when I reach the proper age? I'm 30.
Only if you would agree to the opposite and hten we toss a coin as to
which happens.
Gary Strand
gs> Gary Strand
gs> SS sounds good in principle - it's unfortunate it has declined into a sim-
ple wealth transfer scheme, from the poor young to the rich old.
rf> That isn't exactly right IMO.
Well, what is it *other* than that?
rf> IMO it is too bad that the institution that guaranteed the SS has declined
into bankruptcy.
Do you mean the SSA, or the federal government?
gs> Would you be willing to give me the money I've put into SS, so far, right
now, in exchange for my signing over to you any and all SS benefits due me
when I reach the proper age? I'm 30.
rf> Only if you would agree to the opposite and then we toss a coin as to
which happens.
What do you mean, exactly? No-one really believes that SS will remain fis-
cally viable for more than twenty years, at the outside, even given very op-
timistic assumptions. By then, I'll be only 50, and the age for receiving
SS benefits will probably have been increased by a decade or so, from 65
to 75. In short, it will be irretrievably broken 25 years before I'm allow-
ed to get back *my* money.
The sole purpose of SS now, IMHO, is to take 15.3% of my income away from
me and give it to someone else, someone older and most likely wealthier
than I. What's moral about that?
Richard Foy
I don't know why I bother. You didn't respond to the part you
snipped. At the time socail security the retirement age was 65. The
life expectancy was less than 65. That seems to me to be a pretty
good indication that it was actuarily sound.
All you post is economic aphorisms.
Richard Foy
>Here are 3, readily available in public libraries (at least Fremont):
>
>1. The Graying of America, by James Jorgensen.
>2. Social Security: Prospects for Real Reform. Editor, Peter Ferrara.
>3. Mercer Guide to Social Security. (annual)
That is true. Some people have been citing sources and including
URL's with siginificant amounts of quotes from the sources.
Perhasp you could be kind enough to do the same with your sources.
This is the Internet, the Information Super Highway, the NII, the
Infobahn or ... or do you think that everyone on thenet shuld run
off to the library and read books with nothing more to commend them
then the title?
Andrew Hall
Richard> In article <AHALL.95M...@remus.cs.uml.edu>,
Richard> Andrew Hall <ah...@cs.uml.edu> wrote:
>>
>>>>>>> Richard Foy writes:
>>
snip>
>>
Richard> Your picture it totally inaccurate for the people who
Richard> originally supprted Social Security. The people who are to
Richard> be faulted are the ones from ~1950 on who, in a variety of
Richard> ways, did not keep the sytem actuarily sound as the life
Richard> expectancy increased.
>>
>> Sorry, but pay as you go is never, ever, actuarially sound.
>>
>> In fact, it is illegal for any pension plan except the
>> SS plan.
>>
>> The probability of failure of a pay-as-you-go pension system is
>> 1.000
Richard> I don't know why I bother. You didn't respond to the part you
Richard> snipped. At the time socail security the retirement age was 65. The
Richard> life expectancy was less than 65. That seems to me to be a pretty
Richard> good indication that it was actuarily sound.
Nope, sorry.
Richard> All you post is economic aphorisms.
Or actuarial facts.
ah
Doug Fierro
Are you kidding? I would be willing to do you one better-
I would be willing to FOREGO all S.S. taxes I have ever paid-
just consider it my charity contribution. I'm almost 30, so
I don't think people 40 and over would be so generous- they
would expect some kind of return for their years of contributing
to the S.S. fund.
Then I would max out my 401K contributions. I still come out ahead.
Hopefully the government would raise the maximum limit to
contribute to such programs (IRAs, 401K, etc..) if such
a magical law were passed.
And my company doesn't have to match the 7.5% payroll tax-
they come out ahead. They could even help contribute to
my retirement plan if they aren't doing so already.
And my children would never be burdened with an ever-increasing
FICA tax and tons of debt- all of posterity comes out ahead!
Or at least take my FICA payroll tax and start an individual
S.S. fund for myself where I can see the money accumulate-
even with this plan I would be willing to forego past taxes
paied into the S.S. fund.
Richard Foy
>>
>>Yow in contrast to most others are looking for postive solutions.
>>You aren't exactly right however on why people approaved the Social
>>Security when it was first implemented. As voted for it was not a
>>pyramid scheme. The life expectancy tables for that period preclude
>>it from being a pyramid scheme.:
>>The people who supported it were the millions who had seen the bank
>>failures, who had seen many people lose all of their savings and they
>>were concerned about the people being destitute who did live to an
>>old age.
>>
>>Richard Foy ftp://ftp/netcom.com/pub/rf/rfoy/bkev.html
>
>
>The SS act didn't start out as a retirement plan but it has become such. The
>SS act, like the Glass-Stegiel (sp?) act, is a (possibly) good idea whose
>time has long past. It is not a proper function of government to set up
>retirement plans for the masses. I have no problem with a long phase out of
>SS. This is a positive, reasonable solution that needs to be implemented.
>We need to make sure future generations don't become SS addicts like the
>present crowd. Yes, they were sold a turkey. I don't advocate sticking
>the majority of the mop up duties on them. With a 25 year phase out, they
>would hardly notice.
>
Well I think this is a rather fair appraoch to changing the system.
And with a long phase out like that it should make the transfer
reasonable.
However, I would really caution the people who expect to be around in
the 2050's to take a very careful look at all sorts of history with
open and skeptical eyes. Some times it is very easy to jump from the
frying pan into the fire.
INO our country and perhaps the world is in deep trouble. I think
there are a multitude of interconnecting problems. Social Security is
just one that is highly visible.
I think it is going to take a lot of hard work and clear thinking to
solve those problems. Whether we as a nation are capable of doing I
honestly don't know.
--
"Destiny answers the question: What is it I am called to do in this world?
--Susan Mokelke
Richard Foy ftp://ftp/netcom.com/pub/rf/rfoy/bksp.html
Richard Foy
>>
>>>is not a proper function of government to provide a retirement plan for
>>>it's people. Just say no to SS.
>>
>>What do you think are proper functions of the government?
>>
>>Richard Foy ftp://ftp/netcom.com/pub/rf/rfoy/bkev.html
>
>Tactically, that was a good question for you to ask.
Thank you. However, to me tactics implies trying to win. I much
prefer net dicssuions that are attempts at finding the best
solutions. Of course I know that that may be hard to tell from the
tone of my posts from time to time.
My question was really an attempt to get an understanding on where
you are on the spectrum of attitudes from those who think the
goverment should solve all problems, to those who think there should
be no government.
I could either blow it off
>in which case the question would look unanswerable or I could provide a list
>with something reasonable left off for you to chew on. Like anything else,
>there is a grey area. Some choices are not at all grey. It is however,
>reasonable to say that if a large majority of the population can accomplish the
>task as individuals, the task is not a proper function of government.
>Individuals, by themselves, can't defend the country or make/uphold laws.
>Therefore, the government does it. With a little planning and spending habits
>that are not obnoxious, anyone can plan for their own retirement. It doesn't
>require a PhD.
That seems quite reasonable. It appears not too far from what I
believe. I think a lot of grey comes in when one thinks about
making/upholding laws. Sort of, who and from what should the
government provide protection.
It does require individual responsibility which, today, seems
>to be in rather short supply.
I wonder if the supply of individual responsibility is really as
short as you suggest. I think a lot of what is taken as lack of
individual responsibility is taking a very realistic look at the
situation and then doing what is best in that situation.
Michael L. Coburn
Wrongo! The real reason for SS as it currently exists is to grant
tax relief to rich guys at the expense of those that work at Burger King.
The great Reagan tax revolution included a major hike in fica rates under
the veil of the "invest thoes extra dollars to assure liquidity" sham.
This tax hike on the lowest earners helps to balance the giveaway to those
of wealth and power (which, by default, includes any who have "saved", and
many who are elderly) and to maintain the status quo. We note that the
full 15% is NOT going to old dudes and it certainly is NOT being used for
research and development in fields of common interest. Much of the proceeds
ARE in one way are another, used to DEFEND, the status quo and to prevent
any challange to current authority.
--
---------------------------------------------------------------------
* Let me assure you that | Michael L. Coburn | mco...@halcyon.com |
* my employer agrees with| Softfolks Inc. | softfolk.wa.com |
* what I say. He's me. | UNIX,c,X/Motif,Oracle,DCE,CM,& SYS ADM |
Michael L. Coburn
Doug Fierro <fie...@sv.legent.com> wrote:
>for...@cac.washington.edu (Gary Forbis ) wrote:
>>
>
>> Not everyone will be able to provide for their own retirement. What do you
>> propose be done with people who cannot provide for their own retirement?
>> How about those who could have but didn't?
>>
>> --
>> --gary for...@u.washington.edu
>
>
>
> You would still have payroll taxes, except it would not go into
>a S.S. fund- it would go directly to an individual 401K or
>something similar, where you could see your individual account
>gain value over the years. That would take care of those who
>could have provided for themselves but didn't.
>
> Doug
If coercion is employeed such that everyone must contribute
then the tax is better than the savings, or certainly no worse. Forced
"saving" from current income is a sham in that if everyone saves then
there is no advantage to saving (i.e. if we're all equally wealthy then
there is no advantage). The only advantage is a generational one in
that those who have saved the longest will have the most. What possible
difference is there in paying old folks because they have saved longer
than you or paying them simply because they are old. IMHO the
difference is that forced savings will allow a bunch of paper pushing
bankers, financial planners, investment whatevers, and insurance blow-
hards to rip-off most of the savings while destroying the environment.
I'll take the tax, thanx.
Richard Foy
> >>
> >> In fact, it is illegal for any pension plan except the
> >> SS plan.
> >>
> >> The probability of failure of a pay-as-you-go pension system is
> >> 1.000
>
> Richard> I don't know why I bother. You didn't respond to the part you
> Richard> snipped. At the time socail security the retirement age was 65. The
> Richard> life expectancy was less than 65. That seems to me to be a pretty
> Richard> good indication that it was actuarily sound.
>
>Nope, sorry.
>
> Richard> All you post is economic aphorisms.
>
>Or actuarial facts.
>
Perhaps. Of course not being an economist I don't really know what
the definition of actuarial sound is. Perhaps you could explain how
SS was actualially unsound when started as a pay as you go and the
life expectancy was less that age 65. Or to help me understand wht
you are saying even better suppose the probability of living beyond
he age of 65 was 0 at that time?
I am really trying to understand why pay as you good can *never be
actuarily sound, without having to take a course in economics. I
suspect if that is true the dfinition of actuarily sound may be
someting entirely different from what I would assume.
Richard Foy
Gary Strand <stra...@ncar.ucar.edu> wrote:
>rf> Richard Foy
>gs> Gary Strand
>
>gs> SS sounds good in principle - it's unfortunate it has declined into a sim-
> ple wealth transfer scheme, from the poor young to the rich old.
>
>rf> That isn't exactly right IMO.
>
> Well, what is it *other* than that?
>
>rf> IMO it is too bad that the institution that guaranteed the SS has declined
> into bankruptcy.
>
> Do you mean the SSA, or the federal government?
Essentially both.
>
>gs> Would you be willing to give me the money I've put into SS, so far, right
> now, in exchange for my signing over to you any and all SS benefits due me
> when I reach the proper age? I'm 30.
>
>rf> Only if you would agree to the opposite and then we toss a coin as to
> which happens.
>
> What do you mean, exactly?
I mean giving me the money that was put into my SS account be me and
my employer with reasonable interest from that date to now, say T
bill rates and then I assign all of my benefits to you.
No-one really believes that SS will remain fis-
> cally viable for more than twenty years, at the outside, even given very op-
> timistic assumptions. By then, I'll be only 50, and the age for receiving
> SS benefits will probably have been increased by a decade or so, from 65
> to 75. In short, it will be irretrievably broken 25 years before I'm allow-
> ed to get back *my* money.
I really fidn it extremely hard to predict what the situation will be
20 years from now. Maybe pollution will drive the lefe expectancy
down below 65! maybe there will be a major war that destroys the US.
maybe the US economy will collapse and so it wouldn't matter what one
does with their money, maybe there will be a great deal of inflation
wihch will wipe out the national debt.
Or maybe the US economy will relly prosper and the national debt
including the debt of SS will be a drop in the bucket. I don't give
this one near as much probability as any of the negative ones above,
because the pols in Washington are all more interested in makeing the
other party look bad than in mutually looking for real solutions to the
problems.
>
> The sole purpose of SS now, IMHO, is to take 15.3% of my income away from
> me and give it to someone else, someone older and most likely wealthier
> than I. What's moral about that?
It is exactly the same morality as it is takig som eof your money in
taxes and paying interest to the holders of government bonds etc.
Wiping out social security is equally as immoral as it woudl be to
wipe out the national debt by fiat.
Gary Forbis
In article <3k7nkq$c...@k2.San-Jose.ate.slb.com>, apr...@San-Jose.ate.slb.com (Amit P. Rege) writes:
|> Previously, Gary Forbis (for...@cac.washington.edu) wrote:
|> > Private plans are no more secure than Social Security. In either
|> > case the generation after will have to pay for the benefits. Maybe
|> > some ways makes some feel more comfy than others--the effects are
|> > the same.
|> It is hard to understand this point. Paying off claims from the
|> returns earned by properly invested assets is much, much easier than
|> paying off claims from future tax revenue! That is the difference
|> between a privatized SocSec system and today's system.
It seems to me that unless the investments are such that they will increase
future production efficiencies the goods and services will be more expensive.
This is because fewer producers will be supplying more consumers.
My gut feeling is that people looking for long term gains are pushed out by
those looking for short term gains. A few months back I tried to examine
private ownership as opposed to the commons. Suppose a person has tended
a tree in the commons all year so that it will give fruit. One has to decide
when the fruit is ripe and different people choose differently. Now the
fruit is publicly owned so some second individual comes and takes the fruit
prior to it being ripe as far as the original person was concerned. Heck,
someone could come and chop down the tree for firewood before it bore any
fruit.
Well the economic environment is part of the commons. For all of those who
would look ahead to their retirement years there are others who will see an
immediate profit.
|> If you worry about the national debt figures, you will go into
|> catatonic coma when you hear about the FUTURE UNFUNDED LIABILITY of
|> taxpayers. (Hint: much HIGHER than national debt, and in addition to
|> it) It is not for nothing that the President's budget mentions that a
|> child born in 1993 will expect to pay 80%+ of expected lifetime income
|> IN TAXES, on average.
Will he be better off or worse off? Is paying high taxes an indication of
being worse off?
|> > Look Social Security is also an insurance plan. It's hard to get
|> > one's money and one's life to always come out even. Are people
|> > supposed to kill themselves when their money runs out?
|> It is insurance only in the political "marketing" sense! It has NOT
|> been set up as insurance, has laughably weird accouting standards and
|> ways of calculating pay-offs.
OK, I'll take your word for it.
|> > We need to balance the budget and we need to make social security
|> > sound. We do not need to privatize social security and to do so
|> > could place it at risk every much so as keeping it public.
|>
|> To the contrary, today's plan is "protected" ONLY by a single vote in
|> the House and Senate. A private, mutual-fund-like plan would be
|> really untouchable. This plan is hanging by a thread! And that is
|> why I try to convince people that it sucks...
I'm not sure I want to inflict the pain necessary to prove to people they
should act responsibly. Are you going to let people starve because they
made some wrong choices years ago? I prefer social responsibilities be funded
by money taken from everybody not just those who took them to heart. It
seems to me we have to make our government do the right thing and start
investing money set aside for our future wisely.
|> > I was under the impression that part of the last minute negotiation
|> > of the GATT bill involved the government absorbing some retirement
|> > plans.
|>
|> They reduced the dollar-limit of contributions to $22,500, I believe.
|> I know for sure that they reduced the income limit for Keogh and
|> SEP-IRA plans from $225,000 to $150,000. That means, if somebody
|> could have put away the full $30,000 for their retirement, now they
|> can only put away less. I know, I know, it is rather ridiculous, but
|> some people do earn much more than we do... read on.
Hmmm... I don't know anyone who can't provide for their future because
the government limits the use of a particular plan. No, I don't think this
is what I had in mind. I was wondering about the private plan absorbed by
PBGC.
|> > Now, I didn't know PBGC existed and I don't know its relationship to
|> > the federal government.
|>
|> It is a bit like the FDIC, and FSLIC. Same problems! i.e. it can
|> handle a small number of pension bankruptcies, but it will go belly-up
|> quickly if many plans fail simultaneously. So, we have another
|> potential taxpayer bail-out-in-the-waiting here.
Yes, this is my concern. I wonder if private plans are sufficiently funded
for their benefits. I'm reminded of the Rhode Island S&Ls who were paying
less money to a local insurance but who we ultimately bailed out by the feds.
The nation can't afford to let pension plans go under in a large scale just
as it can't afford to let S&Ls go under in a large way.
|> > One of my fellow workers had the unfortunate experience of working
|> > for a company that controlled the workers retirement funds (or so I
|> > believe) and when the company went under so did the retirement fund.
|> > So it goes.
|>
|> Companies can do things in violation of the pension law. If you want
|> to avoid such problems, why not support a lowering of the tax rate,
|> and then people will NOT be forced to enter into such complicated
|> government-sanctioned arrangements?
I think most people don't think (and don't want to think) about their
distant future. Even most of my fellow workers who are taking advantage of
IRAs are doing so by putting their money in mutual funds. The idea is that
experts can get enough better returns to pay their management fees and then
some. Most of these haven't even diversified among mutual funds.
I think most people working for big companies want a company sponsered
retirement plan. There's a local school bus fight going on right now in
Seattle about retirement benefits.
|> > Is there any assurance that retirement plans aren't built on a house
|> > of cards?
|>
|> If you build programs to ensure that the plans are solid come what
|> may, you encourage people to chase higher risk and reward. The "moral
|> hazards" of insurance. An environment of caveat emptor, and ratings
|> agencies avoids that problem. It is BETTER that retirees buy their
|> own insurance. New Zealand has abolished their public bank insurance
|> scheme.
I see the problem but not the solution. Why is it better that retirees buy
their own insurance? What if they do not? Do we let these people starve
even though they thought they were providing for their future but didn't?
|> > Maybe I'm too darn fiscally conservative for my own good. I worry
|> > about the coming time when lots of people will be pulling funds out
|> > of their savings to pay for monthly expenses. Maybe some nice
|> > economist can explain to me why this won't have a substantial effect
|> > on the markets.
|>
|> It could have some effect, but the "monthly expenses" become revenue
|> and earnings for some other companies. It is NOT going into
|> mattresses, except as sales of Levitz furniture stores. :-)
This may be good for producers but what about the consumers who are retired
at the time? Won't the producers be able to demand a higher wage and take
a larger portion of the revenue?
|> The effect may be seen as a drop in sales for MTV, and a rise in
|> sales for RV repairsmen. Probably not significant in the total.
I'm still concerned.
The other day I heard someone say that the reason productivity gains in the
US aren't as great as they used to be is because we have switched to a
service economy. There just aren't that many ways to speed up giving a bath
or cooking a sandwich.
|> > I'd also like to know why all these forty-something boomers
|> > attempting to save for their retirement isn't affecting the market
|> > right now.
|>
|> Where do you think we get hundreds of billions of dollars bouying up
|> the stock and bond markets? Did you think that "savings" are bad for
|> the economy? Keynes 101, anybody?
I'm not sure "savings" was good for the economy prior to the crash of '29.
It seems to me that something else is involved. Maybe it is how the savings
are expressed.
--
--gary for...@u.washington.edu
Gary Strand
gs> Gary Strand
gs> The sole purpose of SS now, IMHO, is to take 15.3% of my income away from
me and give it to someone else, someone older and most likely wealthier
than I. What's moral about that?
mc> Wrongo! The real reason for SS as it currently exists is to grant tax
relief to rich guys at the expense of those that work at Burger King.
How so?
mc> The great Reagan tax revolution included a major hike in fica rates under
the veil of the "invest thoes extra dollars to assure liquidity" sham.
What acts do you specifically refer to?
mc> This tax hike on the lowest earners helps to balance the giveaway to
those of wealth and power
Actually, the tax burden on the lowest 1/5th of earners is about 50% lower
than it was in 1980, 50% higher on the highest 1/5th.
mc> We note that the full 15% is NOT going to old dudes
The majority of SS recipients are the elderly, women making a majority of
that thanks to their longer lifespan.
mc> and it certainly is NOT being used for research and development in fields
of common interest.
I don't believe FICA was ever promoted as an R&D tool. What's the relevancy
of this remark, anyway?
mc> Much of the proceeds ARE in one way are another, used to DEFEND, the sta-
tus quo and to prevent any challange to current authority.
Huh?
Dave Griffith
>
> I would be very surprised if there weren't a substantial number of
> economic advsisers to the administration who thught the balanced
> budget would not happen, who might have forseen a future with much
> more serious debt and unbalanced budgets. I would not be surprised if
> the truth were know that some of the motivation for increasing SS
> taxes was to be able to shift the target for balancing the budget
> away from the high income people and towards SS recipients.
This implies a politician capable of planning past the end of her
tenure. Such are rare to the point of near-extinction, and certainly
weren't to be seen on Reagan's economics staff (Stockman possibly
excepted).
This one, I'm afraid, we're just going to have to chalk up to
garden variety short-sightedness. No need to invoke conspiracy
theories here.
--
--Dave Griffith, grif...@crl.com
Paul Barnett
>mc> This tax hike on the lowest earners helps to balance the giveaway to
> those of wealth and power
> Actually, the tax burden on the lowest 1/5th of earners is about 50% lower
> than it was in 1980, 50% higher on the highest 1/5th.
I would like to point out that in this case, you are BOTH right,
depending on the context. The INCOME TAX burden did indeed shift to
those with higher incomes. However, at about the same time, the Social
Security tax was raised significantly, and the net effect was to
increase the OVERALL TAX burden on those with lower incomes.
Those in opposition to lower marginal income tax rates usually quote the
overall effect in the 1980's, but neglect to mention that it was a
subtantial hike in the regressive Social Security tax that caused it.
--
Paul Barnett Convex Computer Corp.
MPP OS Development Richardson, TX
Karl Wee
Gary Forbis <for...@cac.washington.edu> wrote:
>I hate to break it to those wishing to privatize Social Security, but...
>
>Private plans are no more secure than Social Security. In either case the
>generation after will have to pay for the benefits. Maybe some ways makes
>some feel more comfy than others--the effects are the same.
With private plans, every person has "his own" funds and his own power to
plan. No one will be able to force any other person to pay for his
retirement, in a way that the government can. This cannot be equated with
what's happening now.
>Look Social Security is also an insurance plan. It's hard to get one's money
>and one's life to always come out even. Are people supposed to kill themselves
>when their money runs out? We need to cover our own needs in the aggregate
Every person has 40+ years to plan for their retirement. If they come out
short, that's their own problem. Society cannot afford to subsidize those
who are simply too timid to plan for their own future. When it does, people
begin to be dependent on theft for their living and it generates even more
irresponsible planning, much like what we have now.
>as well as individually. The difficulty would be to find a formula that didn't
>once again favor the more wealthy (who have longer life expectancy as well
>as larger payouts.)
What you would like to see as enforced compassion I would much rather see
placed where it belongs -- voluntary charity.
>
>We need to balance the budget and we need to make social security sound.
>We do not need to privatize social security and to do so could place it at
>risk every much so as keeping it public.
>
>--
>--gary for...@u.washington.edu
Amit P. Rege
> Amit P. Rege <apr...@San-Jose.ate.slb.com> wrote:
> >I like the attitude. Some people have been throwing sources out here.
> >Here are 3, readily available in public libraries (at least Fremont):
> >1. The Graying of America, by James Jorgensen.
> >2. Social Security: Prospects for Real Reform. Editor, Peter Ferrara.
> >3. Mercer Guide to Social Security. (annual)
Richard Foy (rf...@netcom.com) wrote:
> That is true. Some people have been citing sources and including
> URL's with siginificant amounts of quotes from the sources.
> Perhasp you could be kind enough to do the same with your sources.
> This is the Internet, the Information Super Highway, the NII, the
> Infobahn or ... or do you think that everyone on thenet shuld run
> off to the library and read books with nothing more to commend them
> then the title?
I regret that I am unable to provide this information on the Net.
I lack the proper equipment to scan things, and the 2 hours a
week that I spend in the library is already a stretch.
As for not relying on "just a title", check them out for yourself,
or use other database searches and select the books. The 3 I
listed above were among 72 others, including a book called "Social
Insecurity", and other such scary titles.
REMEMBER: This is NOT, NOT , NOT the first time that people have
raised alarms about Social Security!!!!!!!! About every 5 years for
the last 30 years, these alarm bells have gone off. The problem,
then? Previous solutions have almost always consisted of raising
taxes. I love your argument about "actuarially sound" pyramid
schemes with Andrew Hall.
Why do you think I am paying about a hundred times what somebody
paid as their Social Security taxes even 30 years ago? (Inflation
is only about 4 times or so)
- Amit
Richard Foy
Michael L. Coburn <mco...@coho.halcyon.com> wrote:
>>
>> The sole purpose of SS now, IMHO, is to take 15.3% of my income away from
>> me and give it to someone else, someone older and most likely wealthier
>> than I. What's moral about that?
>>--
>>Gary Strand WWW: http://www.cgd.ucar.edu/cscor/gary/gary.html
>>stra...@ncar.ucar.edu PO Box 3000 Boulder CO 80307-3000 (303) 497-1336
>>Opinions stated here are mine alone and are not those of NCAR, UCAR, or the NSF
>
> Wrongo! The real reason for SS as it currently exists is to grant
>tax relief to rich guys at the expense of those that work at Burger King.
>The great Reagan tax revolution included a major hike in fica rates under
>the veil of the "invest thoes extra dollars to assure liquidity" sham.
>This tax hike on the lowest earners helps to balance the giveaway to those
>of wealth and power (which, by default, includes any who have "saved", and
>many who are elderly) and to maintain the status quo. We note that the
>full 15% is NOT going to old dudes and it certainly is NOT being used for
>research and development in fields of common interest. Much of the proceeds
>ARE in one way are another, used to DEFEND, the status quo and to prevent
>any challange to current authority.
>
I agree with this, but I would add another probable reason.
Reagan, promised, as I recall, lower taxes, more military, economic
growth, and a *balanced budget. The balanced budget didn't happen.
(Please note I don't wnat to and *won't discuss in this thread the
Dems vs the Reps of the failure to balance the budget.)
I would be very surprised if there weren't a substantial number of
economic advsisers to the administration who thught the balanced
budget would not happen, who might have forseen a future with much
more serious debt and unbalanced budgets. I would not be surprised if
the truth were know that some of the motivation for increasing SS
taxes was to be able to shift the target for balancing the budget
away from the high income people and towards SS recipients.
--
Gary Forbis
|> In article <3k2age$3...@nntp3.u.washington.edu>,
|> Gary Forbis <for...@cac.washington.edu> wrote:
|> >Look Social Security is also an insurance plan. It's hard to get one's
|> >money and one's life to always come out even. Are people supposed to kill
|> >themselves when their money runs out? We need to cover our own needs in
|>
|> Every person has 40+ years to plan for their retirement. If they come out
|> short, that's their own problem. Society cannot afford to subsidize those
|> who are simply too timid to plan for their own future. When it does, people
|> begin to be dependent on theft for their living and it generates even more
|> irresponsible planning, much like what we have now.
|> >once again favor the more wealthy (who have longer life expectancy as well
|> >as larger payouts.)
|>
|> What you would like to see as enforced compassion I would much rather see
|> placed where it belongs -- voluntary charity.
I Don't understand how we can depend upon voluntary charity when people believe
"If they come out short, that's their own problem." If society cannot afford
to subsidize those who fail to provide for their own future (for one reason
or another) then how can voluntary charity afford it?
--
--gary for...@u.washington.edu
Michael L. Coburn
The last comment says it all. The "huh?" is at least indicative.
You may have actually woke up and had a thought instead of your Limbuagh
injection. The increased fica taxes are spent just like any other revenue
and yet they are only applied to the working poor and the middle class. If
this is not an underhanded mechanism employed to ease the tax burden of
the wealthy then maybe the world is actually flat too. From reading the
posts in this news group I've found that we can cite whatever trash
statistics we'd like, depending upon which spin we find preferable. Your
statistics regarding taxation are ridiculous enough to warrant some real
scrutiny. However, if the lowest 1/5th's incomes have shrunk by 50% and
the upper 1/5th's incomes have risen 50% then it is pretty easy to see how
to produce some tax numbers that would look like that. There are probably
much more clever ways to do this but who am I to tell you.
Michael Stein
>they come out short, that's their own problem. Society cannot
>afford to subsidize those who are simply too timid to plan for
>their own future. When it does, people begin to be dependent on
>theft for their living and it generates even more irresponsible
>planning, much like what we have now.
I can see one problem with almost any plan, public or private.
Assume a large bulge of people all retire at once -- so they all
switch from increasing savings to decreasing savings. Isn't this
going to impact the prices of the things they have saved?
So while theur plans might have seemed good, when they go to sell
the "value" isn't really there since they form a large group all
trying to sell at once.
In addition, since they've retired, there are fewer workers
working so goods (and esp services) cost more...
Doug Fierro
>
>
> Doug Fierro (fie...@sv.legent.com) wrote:
>
> : The facts are, the cost of malpractice in the U.S. as a percentage
> : of total health spending is maybe 3% at most. There are much
> : bigger players in the U.S. healthcare industry that contribute to
> : higher costs.
>
>
> Are we looking at the actual malpractice "industry" and its annual
> revenues or turnover?
>
> We should also be looking at the "preventive expenditure" that doctors
> use to inoculate themselves against being part of that above statistic.
> (Just pointing out what I wondered. Your 3% figure MAY be correct
> even in this context)
>
>
> - Amit
Yeah, I factored that in as well. I can send you my
breakdown of the preventitive health care costs to the
U.S. health industry- believe me it's not the monster
people make it out to be.
Sheldon Jolson
> Those 55 and under are not going to get as much out
>of social security as they put in. Yet ever year fewer
>of us are covered by corporate pensions, making SS
>more and more important in the future, more important
>than now.
What people seem to miss is the growing lifespan of the
nations pensioners. They are longer now than they were
in the 50s, but they will be even longer in the future.
So as long as SS pays its bills, and people live longer,
there is no reason to expect that people won't do well
in SS since they will be collecting longer, despite
increases in the retirement age.
-------------------------------------------------------------------------------------------
@date@
@time@ - SBJ -
s...@panix.com <Look here for yet another web site - coming soon>
Gary Strand
sj> What people seem to miss is the growing lifespan of the nations pensioners.
Which spells disaster for SS.
sj> So as long as SS pays its bills, and people live longer, there is no rea-
son to expect that people won't do well in SS since they will be collect-
ing longer, despite increases in the retirement age.
Exactly what are these receiving-for-a-longer-time SS beneficiaries going
to collect? The system will be broke long before then.
Richard Foy
You are right there is "No need to invoke conspiracy>theories here."
However, IMO that doesn't mean that the only alternative is "garden
variety short-sightedness."
There is a big in between domain of biased behavior, both fully
rationally decided upon and otherwise.
>--
>--Dave Griffith, grif...@crl.com
Gary Strand
gs> Gary Strand
mc> Much of the proceeds ARE in one way are another, used to DEFEND, the sta-
tus quo and to prevent any challange to current authority.
gs> Huh?
mc> The last comment says it all. The "huh?" is at least indicative. You may
have actually woke up and had a thought instead of your Limbuagh injection.
You err, greatly, in assuming I'm a dittohead. I believe the man is a pomp-
ous, arrogant windbag who would be creamed if he popped into a USENET de-
bate. In fact, I view your comment as quite insulting. The world is made up
of many more people (and political opinions) than the academic Lefties and
Dittoheads.
mc> The increased FICA taxes are spent just like any other revenue and yet
they are only applied to the working poor and the middle class.
Yes, FICA is a very regressive tax. Benefits mostly go to the lower and
middle classes anyway.
mc> If this is not an underhanded mechanism employed to ease the tax burden
of the wealthy then maybe the world is actually flat too.
What's "wealthy"?
In any case, what you say doesn't conflict too much with what I've said. SS
is strictly a case of redistribution of wealth from the younger poorer to
the older richer. It is not anything else.
SLAVE TO THE GRIND
> Those 55 and under are not going to get as much out
>of social security as they put in. Yet ever year fewer
>of us are covered by corporate pensions, making SS
>more and more important in the future, more important
>than now.
># George Conklin; Geo...@NCCU.EDU | Edison did not have a fancy #
># N. C. Central University | internet signature. #
># Durham, North Carolina USA | Support Cygnet Horns for Edison #
># Support Medicare for All Ages | Firesides. #
This is an incomplete analysis. According to this, the only two ways of
saving are SS and corporate pensions. Pensions cover less effectively,
therefore SS is more important. Incorrect. The most effective way to
save is to maximize your 401K, then invest with a long term strategy as
an individual. You shouldn't rely on company or government blankets as
primary sources of income.
--
Derrick Olliff | An island of rigorous logic
Computational Micromechanics Lab | surrounded by a sea of
Georgia Institute of Technology | emotional propaganda.
Atlanta, Ga. 30332 |
SLAVE TO THE GRIND
>Well I think this is a rather fair appraoch to changing the system.
>And with a long phase out like that it should make the transfer
>reasonable.
>However, I would really caution the people who expect to be around in
>the 2050's to take a very careful look at all sorts of history with
>open and skeptical eyes. Some times it is very easy to jump from the
>frying pan into the fire.
Come on, Rich. Can't you smell that? It's the odor of burning flesh. We
are in the fire. The great unwashed just doesn't know it and the
politicians don't want to admit it.
>INO our country and perhaps the world is in deep trouble. I think
>there are a multitude of interconnecting problems. Social Security is
>just one that is highly visible.
And highly abused and highly unnecessary and highly paternalistic.
>I think it is going to take a lot of hard work and clear thinking to
>solve those problems. Whether we as a nation are capable of doing I
>honestly don't know.
>
>Richard Foy ftp://ftp/netcom.com/pub/rf/rfoy/bksp.html
Hard work and clear thinking, two commodities whose supply seems to be
dwindling in this lovely land. Certainly we should not expect this
kind of behavior from our bought-and-paid-for representatives.
Invest in America. . . buy a congressman.
Gary Strand
gs> Gary Strand
gs> The sole purpose of SS now, IMHO, is to take 15.3% of my income away from
me and give it to someone else, someone older and most likely wealthier
than I. What's moral about that?
rf> It is exactly the same morality as it is taking some of your money in taxes
and paying interest to the holders of government bonds etc.
Really? Why? At least there's a choice about whether to buy government bonds,
which is not the case with participation in SS. Government bonds won't sell
if investors think they won't get their money back.
rf> Wiping out social security is equally as immoral as it would be to wipe
out the national debt by fiat.
The latter cannot be done - without wrecking the global economy. The capital
markets are far too interwoven to handle the US government saying it doesn't
owe anyone their part of its debt. SS can be phased out, without anyone suf-
fering. I don't believe too many people want it ended immediately. It took a
few decades to get into its current mess, it will take a few decades to get
it out.
conklin
Those 55 and under are not going to get as much out
Sheldon Jolson
>
> Which spells disaster for SS.
It can if nothing is done about it. This is why the retirement age is
being pushed back. The problem is that people claim this is a reduction
in benefits, when in reality it is a benefit equalizer to previous
generations. Using Bob Meyer's words (former chief actuary of the SSA),
we should not view SS benefits as inflexible,
>sj> So as long as SS pays its bills, and people live longer, there is no rea-
> son to expect that people won't do well in SS since they will be collect-
> ing longer, despite increases in the retirement age.
>
> Exactly what are these receiving-for-a-longer-time SS beneficiaries going
> to collect? The system will be broke long before then.
The system won't go broke since the source of funding OASDI comes from the
governments ability to tax. Intermediate cost estimates project the trust
fund to run out by around 2030. This is due primarily to demographic shifts
as the ratio of recipients to tax payers increases. However, everything
goes in cycles. First there was a baby boom, then a baby bust. Baby busts
don't last forever, and there are signs of a new baby boom. If politicians
can gain some sort of backbone and make some rule such as "the retirement age
of social security will be defined as expected lifespan less 20 years", or
something similar, I think social security will not be seriously in difficulty.
Sheldon Jolson
> Richard> I am really trying to understand why pay as you go can *never be
> Richard> actuarily sound, without having to take a course in economics. I
> Richard> suspect if that is true the dfinition of actuarily sound may be
> Richard> someting entirely different from what I would assume.
Actuarially sound basically means that the actuarial present value (the
same as present value taking mortality and morbidity into account) of
cash inflows is at least equal to the actuarial present value of outflows.
Pay as you go offers no such guarantee. For example, using present values,
you can determine the price of an annuity using expected mortality and a
duration equivalent interest rate. The issuer would pledge to invest that
amount of money (in appropriate securities, of course) to guarantee that all
obligations are met. Pay as you go simply says "trust me, I'll pay you."
Imagine what would happen if banks, insurance companies, and used car salesmen
were allowed to use pay as you go methods!
>I will try to find the text. I stopped taking actuarial exams about
>13 years ago when I switched to being a financial analyst, so I do
>not think I have the reference now.
I consider myself a "financial actuary." You should too (at least in
these conversations). I don't do any traditional actuarial work anymore.
Andrew Hall
Richard> In article <AHALL.95M...@remus.cs.uml.edu>,
Richard> Andrew Hall <ah...@cs.uml.edu> wrote:
>> >>
>> >> Sorry, but pay as you go is never, ever, actuarially sound.
>> >>
>> >> In fact, it is illegal for any pension plan except the
>> >> SS plan.
>> >>
>> >> The probability of failure of a pay-as-you-go pension system is
>> >> 1.000
>>
Richard> I don't know why I bother. You didn't respond to the part you
Richard> snipped. At the time socail security the retirement age was 65. The
Richard> life expectancy was less than 65. That seems to me to be a pretty
Richard> good indication that it was actuarily sound.
>> Nope, sorry.
Richard> All you post is economic aphorisms.
>> Or actuarial facts.
Richard> Perhaps. Of course not being an economist I don't really know what
Richard> the definition of actuarial sound is. Perhaps you could explain how
I have no idea what being an economist has to do with it. You need to
study actuarial science, not economics to be an actuary (economics is
a small part of actuarial science).
Richard> SS was actualially unsound when started as a pay as you go and the
Richard> life expectancy was less that age 65. Or to help me understand wht
Richard> you are saying even better suppose the probability of living beyond
Richard> he age of 65 was 0 at that time?
Richard> I am really trying to understand why pay as you go can *never be
Richard> actuarily sound, without having to take a course in economics. I
Richard> suspect if that is true the dfinition of actuarily sound may be
Richard> someting entirely different from what I would assume.
I will try to find the text. I stopped taking actuarial exams about
13 years ago when I switched to being a financial analyst, so I do
not think I have the reference now.
ah
Gary Strand
gs> Gary Strand
sj> What people seem to miss is the growing lifespan of the nations pensioners.
gs> Which spells disaster for SS.
sj> It can if nothing is done about it.
Nearly everyone agrees that the SS status quo is impossible to maintain. I
would prefer that the current system be phased out rather than playing with
tax rates, benefits, and retirement age to keep it going. The whole concept
is bankrupt, both morally and financially.
sj> This is why the retirement age is being pushed back.
I do not consider this a solution.
sj> The problem is that people claim this is a reduction in benefits, when in
reality it is a benefit equalizer to previous generations.
I see. Since we live longer, make us work longer too.
sj> Using Bob Meyer's words (former chief actuary of the SSA), we should not
view SS benefits as inflexible.
Pity participation cannot be made as "flexible" as the benefits. Besides, we
know what "flexibility" means in this context - "reduce to the politically
tolerable minimum", or "change the contract part way through to save our
asses".
sj> So as long as SS pays its bills, and people live longer, there is no rea-
son to expect that people won't do well in SS since they will be collect-
ing longer, despite increases in the retirement age.
gs> Exactly what are these receiving-for-a-longer-time SS beneficiaries going
to collect? The system will be broke long before then.
sj> The system won't go broke since the source of funding OASDI comes from the
governments ability to tax.
Sorry. In this day of capital liquidity, the government cannot raise taxes
willy-nilly to pay for its overextended liabilities. If the government de-
cides to raise taxes too high, tax revenue will fall, that is, if it doesn't
employ the IRS as even more of a Gestapo than it already is.
sj> Intermediate cost estimates project the trust fund to run out by around
2030.
It is not a trust fund. It is a way the young working poor subsidize the
retired wealthier elderly.
sj> This is due primarily to demographic shifts as the ratio of recipients to
tax payers increases. However, everything goes in cycles. First there was
a baby boom, then a baby bust. Baby busts don't last forever, and there
are signs of a new baby boom.
Pity the baby boom extended from 1945-1964, the bust from 1965-now. 30 years
of bust trumps 20 years of boom. The tax rate to maintain SS solvency will
be into the 20s, then the 30s, before a surge in working-age population will
take the burden off older workers. I'm one of those older workers, and I am
not going to let myself get screwed.
sj> If politicians can gain some sort of backbone and make some rule such as
"the retirement age of social security will be defined as expected life-
span less 20 years", or something similar, I think social security will
not be seriously in difficulty.
I know how they can solve the problem permanently - phase out SS as a man-
datory government-run program. Start by switching the SS pot into a individ-
ual IRA-like instruments, and then make participation in those voluntary.
The government has no business taking money from the poor and giving it to
the rich under the pretenses of SS.
David Meyers
>On the other hand, I would be happy to forfeit both the money I have put
>in and the benefits PROMISED (note the use of that word in place of DUE)
>me in exchange for the opportunity to invest the SS taxes I am currently
>obligated to pay until I retire.
Not unless you give me back my money as well.
He's said that he's willing to forfeit everything he's
put in. (Obviously, he's already forfeited it. Its
gone. But, he's willing to forget that). There is none
of "your money" to give back. It was already given away.
After all you are the
one that is going to pay my benefits. Were there any connection
whatsoever between my contributions and my benefits, I would be happy
to let you bow out. There is none. You 30somethings are going to
pay for my SS benefits (even if they are properly reduced to the
simple annuity value)
And they call MY generation selfish. We just don't want
to give away all our earnings.
You guys already gave yours away, and so now you are
demanding to take ours. That's really pretty sick.
It is seldom that liberty of any kind is lost all at once. - David Hume
Especially coming from someone who is quoting the above.
Since your generation gave up your liberty (and earnings),
you are unwilling to let my generation try to regain
it. You want us to remain enslaved to the system you
were duped into believing in.
I'm willing to allow for some transfer payments during
the phase-out of the existing system. Gradually reducing
them to nothing in, oh, twenty years. And, incorporating
an assets/income cutoff during that phase-out.
There is no way you can justify some rich oldster
collecting SS money which is being taken out of the
pocket of the minimum wage earner.
Again, my recommendation is a Chile-like system, except
that we keep the employer contributions to finance the
phaseout of the existing system.
--D