News Snipet 'Blog

Private accounts are an essential solution to the current boon doggle. If I may paraphrase Albert Einstein; he said that one of the greatest discoveries of all time was compounded interest. The City of Galveston is a great example. City employees were able to opt out of SS 20 or more years ago and in some cases, I'm told, people were able to retire with a higher income than before retirement. Galveston should be held up as to what can be done, but it would probably cause a SS revolution whereas big gov't hasn't the ability or inclination to move that quickly.

But what the President proposes is a good start.

 

Thanks for inviting me Jack.

I'm not sure if you are aware but there are a few professions out there that already privitize their SS. Like teachers in Texas for example. My husband can go into more detail about this than I can, but I will use the knowledge that I have. We pay out so much already. And I can see no reason for me to pay out to fund something that no one can guarantee me will be there in 40 years when I go to retire. I have many working years left in me and I already contribute to my own IRA. But I cannot stand to see my money wasted. Wasted by our governments refusal to curve their lavish spending habits. The only people who argue this are people who, I think deep down, won't pay enough into SS to give them a decent retirement. They are scared. Scared that they may actually have to work. Well I know I will. And I'll have my IRA to back me up. But it's scary as hell to think that we will have no "safety net" when we retire. That is why I want to have control over my retirement funds, not the government.

 

Many of those Texans have lost all their retirement on the Stockmarket when it crashed during the first year of mr. bush's acting presidency.

Today on CNN,(I hope they show it again, odds are that a telephone call has gone from mr. bush to the republican that owns CNN and this report has now been squashed) they showed a man working in his 70's because he and his wife put their money in conservative investments on the stockmarket and then they lost it all.

The stockmarket will crash. Its not a matter of if, but when.

Investments in 401K can and will go bankrupt. They are doing so even now.

And if you trust the government to insure your personal savings account: Don't count on it. When the S and L scandle broke, the government had to give only a set amount to the people and that number was far far far below the promissed level. The Lawsuits flew for years and many people are still working today because they lost it all in the S and L scandle.

You must understand. All mr. bush wants to do is destroy social security. He is not interested in saving it or other programs like Veterans benefits and Farm Aid.

mr. bush is a christian reconstructionist and they have called for the end of all government funding, saying that the children should take care of their parients in retirement and that corporate farms with big wig businessmen running them from a faraway city is much better. And they the christian reconstructionist say, that a solider should expect NOTHING from the government that a soldier should be glad to serve.

This is mr. bush's belief. And it spells only darkness for the country if he is allowed to succeed.

To all the elderly and those who are concerned with mr. bush's attack on social security, I urge you to write your representatives and senators and tell them they will be out of a job, if they vote for any of mr. bush's programs including Social Security.

 

I may be the hardest toughest conservative you wil find....but this worries me. Not because I am a communist, not because I am bleeding-heart, but because I AM AMERICAN!!!

While I will surely be fine with or without any changes to the system, some of our hard-working but maybe not so able brothers and sisters will maybe not.

Not everyone is intelligent enough to go on to university of even community college. Some people have domestic issues as well, where women are left as sole support of their children, they wouldn't ever be able to afford to save under the new plan.

This creates a gulf, a gulf between those who are smart enough to play the game and win, and those who for whatever reason are not able to do the same.

It worries me that people look down on their fellow Americans who maybe don't have the highest IQ, or maybe who have serious problems in their lives.

It reminds me of India, and the untouchables. They are thought to be so because of the work they do.

In America, we must understand that we are THE PEOPLE. Not some of the people, all of the people. We are one from many. We need all parts of our society in order to function.....I mean you surely want your nice hot big mac now don't you? You want the ditch dug nice and deep....but you don't want to do it, you couldn't afford to live doing it right??? Well friends, lots of people do. And they do not need to after a lifetime of service to YOU, be told that they should have had a better job in order to live with any dignity.

Just my opinion, as a Christian and an American.

 

You need look no further than Chile and Great Britain to see the effects of privatizing Social Security, and they aren't pretty. Chile went that way 20 years ago, Great Britain 16. There are now retirees in both countries whose savings have been eaten up by fees from money management companies, and who are now left with nothing. In most cases, those who opted for private investments in those countries now rue the day. Social Security is not a gamble, not an investment scheme, and, unless you believe that the US government is some fly-by-night operation that can't be trusted with funds, completely stable as is. If left alone, it is solvent until 2052, at which time it would still pay out 81% of all benefits. This according to the non-partisan Congressional Budget Office. Moreover, privatizing would put our already astronomical debt $2 trillion higher, and would not guarantee anyone a positive return.

I'm not even mentioning the fact that it is, as insurance, a lifesaver for the disabled and surviving spouses and children in many instances.

It ain't broke, folks, no matter what Preznit Jingo says in his STFU speech or anywhere else.

 

"Preznit Jingo"

That was uncalled for.

 

Private accounts are not only necessary but they are morally and constitutionally valid. The Social Security Act called for a temporary program. No one then wanted this to still be around in 2005. Not FDR, not liberals or conservatives in the 1930s wanted us to still have this mammoth program 70 years later.

Magnum Serpentine- I would love to see some evidence that the Texans have lost all their retirement in the stock market during the first year of Mr. Bush's presidency. The only viewpoints you seem to have is that big bad Mr. Bush is plotting to take away everyone's retirement income and that Americans are too stupid to plan for their own retirement without government help/interference.
If you focus solely on the bear market of 2000-2002, yes returns were down, however look at the years from 1993-1999 and 2003-2004 and you will see that any losses pre and post 9/11 were more than made up for. Private retirement accounts aint Enron, no matter how much you want it to be. You and Senator Corzine can preach all you want about how Americans cant be trust to save for their own retirements- of course this is the same senator who paid $62 million to buy his seat in the Senate and will likely do the same next year to become governor.
Bush said himself no one over the age of 55 would be affected by any changes so you and your AARP chums can worry about something else. Its totally immoral for you to continue to feed at the government trough while people of my generation are left holding the bill. Both Republicans and Democrats are at fault for the situation we are in and its about time somebody had the balls to stick up for younger American workders.

Steer Pike Pie- "It worries me that people look down on their fellow Americans who maybe don't have the highest IQ, or maybe who have serious problems in their lives."
What exactly is that supposed to mean? Its my responsibility to keep paying 12.4% of my income to cover for the mistakes of stupid people?
You are totally off base, both of you. If you are that scared of losing money- put everything into money market funds and make your 1.1% annually. As pathetic of a return as that is its still better than the enormous unfunded mandate Social Security is.

Generik- the Congressional Budget Office changes its future predictions more than homeless people change underwear. It is not solvent until 2052, it will be broke in less than 15 years. Bill Clinton and Al Gore both even said so in the late 1990s. We have two choices: keep band-aid fixing the program. Raising the retirement age, raising the cap on income subject to SS withholding, cutting benefits, raising taxes- all of which at best postpones the problem.
Or we can actually practice democracy and allow those who don't wish to participate in Social Security to opt out. Bush is not forcing any off the "rolls". He's not requiring anyone to do anything they don't want to do. He merely wants to let financially savvy and independent-minded people to have the choice to take care of their own retirement. I want no part of a mammoth government monopoly that I am paying thousands more into than I will ever get out. I, as an American and a taxpayer, should have the right to plan for my own retirement. So should you.

 

Eek! Look at this wealth of scholarship! I'll have to read it later.

My reaction? Well, I've sincerely stated (though not yet on my site, maybe today since it's a good occasion) that I have no desire for Social Security, and I have no desire to pass on the debt to my children. Right now, only three or four people are paying for every one person to receive benefits, and that will be reduced to three, and two, et cetera. Eventually, it will be down to one; why not let that one person pay for themselves?

Social Security was a reasonably good idea for its intended purpose; as I understand it, though, it was designed for a limited time run and nobody killed it when it was supposed to expire. I have no problem paying for my parents and grandparents; I would personally pay my Social Security taxes until the day I retire in order to ensure that my parents are covered. After that, I'd like the whole thing to be dead; the private sector, and private investment, produce far more (and far more reliable) generation of capital than Social Security ever can by its very design.

Democrats argued during the Clinton Administration that Social Security was broke and needed fixing, so they "balanced the budget" (i.e. slashed military spending). Now President Bush wants to start the process of fixing it once and for all, and the Democrats are claiming it's either A) not going bankrupt or B) isn't going bankrupt until later than the President claims it will? So they both agree that it's broke; President Bush wants to reform and fix it now, the Democrats want to leave it alone and leave it for my generation's legislators to fix, all the while claiming that they want to leave my generation a brighter future? I'm going to have to call the "bullshit" card on that one.

Bottom line? It's not the government's job to plan for my retirement, and my right to succeed is directly coupled to my capacity for failure (wow, I have that concept even though I'm a product of public schools!). We have a debt to our seniors, who have been counting on Social Security since before many of them were born, and we need to pay that debt. It's the responsibility of this legislative/executive generation to begin the reforms, and it's the responsibility of my generation to continue the reforms and usher Social Security out the door.

(Thanks for the invite, Jack!)

 

SS is a pyramid scheme for keeping the middle class dependent on government. Any attempt to change or reform it is a threat to the Democratic power base.

It's that simple. And if you don't believe me, watch how every congressman lines up on this issue.

 

Time for me to jump in and out for a sec. A lot of what is being said from either side of the aisle are ideas and points worthy of consideration. I think, Pike, that what the other individual may be saying is that Social Security is nothing like what it was intended. It is no longer a "safety net" but a system people have grown dependent on.

Will be back later for more dialogue, but thanks ALL for chiming in and continuing the dabate! If you who have commented are interested, it would be fascinating to move this to a live debate on my website. We could set up a time, and debate through live chat. Let me know if you would be interested and we can schedule a time.

 

Interesting thread. I have a few points, none of which hang together particularly well.

First, the government is no a good money manager. To me that's a given and must be factored into the decision-making process.

Second, Social Security, at its inception, was intended to cover a very different worker/retiree ratio. The pyramid scheme inherent in Soc.Sec. worked as long as there were more workers than retirees. With the baby boom bulging along into old age, we don't have the proper ratio anymore -- and that's when pyramids collapse.

Third, I'm seeing a thread in here along the lines of: since some of the people who get into the private market will lose money, and that's not fair, it's better for all of us to stay in Soc.Sec. together, so we can all go to Hell in a handbasket. I don't think that's particularly fair either.

Fourth, let's assume that Soc.Sec. is enforced charity, in that it makes the well-off pay a large percentage of their income to make sure that the less well off don't starve in their old age. That's actually not a bad thing. In a society as diverse as ours, you cannot count on some overarching moral imperative, or cultural push, to ensure that everyone automatically and voluntarily tithes their money over to the poor. However, if we're going to look at it that way, we ought to say that, consistent with this charitable endeavor, people with an income over "X" at the time of their retirement ought not to draw on Soc.Sec. If it's a charity, the funds ought to be reserved for the needy. Of course, then you have to define what "X" is, and determine whether X is a variable number depending on the cost of living in the retiree's location, etc. Clearly, big problem; no easy answers.

Fifth, yes, it's true that the market will go down at times, but the fact is that, in a healthy market economy, its tendency is to go up.

Sixth, what's so bad about working into ones 70s? I hope to continue working until the day I drop in my tracks. Life is meaningless without a purpose and the fact is that people who work live longer.

 

Well, I've been reading about this and hearing about this and thinking about it much of the day, and I have to say that I just don't know. I like the idea of personal choice, but the Bush plan seems to have a number of flaws, not least of which is the $2 trillion issue.

I tend to agree with Bookworm: there are no easy answers. It's a huge issue with many facets to discuss...

 

I will mention, Kathy, that Sen. Lindsey Graham of South Carolina is working on a plan that would be somewhat of a compromise. The funding of the two trillion would be made up by increasing the withholding ceiling from $90,000 to around $150,000.

Stay tuned for the Snipet analysis!

 

Well yeah, people who make no money to save are dependant on SS. The other person doesn't like having to shellout to keep people living with dignity in their old age. That to me is anti-American. It reminds of those who think women on welfare should have to be on birth control so they don't have to pay for their dirty poor little snot nosed kids who will grow up to suck SS dry.

Education is key folks.

 

I have a slighly different opinion on this whole Social Security enterprise. I believe the whole program should be scrapped. Get rid of SS, farm subsidies, public assitance, public housing, NPR & PBS and a whole host of other parceled out entitlement programs and in their place put in what conservative economists have been clamoring for since Nixon was in office; a Basic Income Guarantee. From http://www.widerquist.com/usbig/about.html:

The Basic Income Guarantee (BIG) is a government ensured guarantee that no one’s income will fall below the level necessary to meet their most basic needs for any reason. As Bertrand Russell put it in 1918, "A certain small income, sufficient for necessities, should be secured for all, whether they work or not, and that a larger income ... should be given to those who are willing to engage in some work which the community recognizes as useful. On this basis we may build further." Thus, with BIG no one is destitute but everyone has the positive incentive to work. BIG is an efficient, effective, and equitable solution to poverty that promotes individual freedom and leaves the beneficial aspects of a market economy in place.

The term BIG is more specific than terms like income maintenance or income support, which refer to any kind of program designed to aid those with lower incomes. The Basic Income Guarantee differs from existing income maintenance programs in the United States and Canada in that it is both universal and has no work requirement. It is therefore, very simple and easy to administer. It helps the working poor, single parents, and the homeless, without placing anyone under the supervision of a caseworker.

The Basic Income Guarantee is a generic name for many similar programs aimed at providing universal income support. The name Basic Income Guarantee was chosen because it is similar to both “basic income” (the best-known version of BIG in Europe today) and “guaranteed income” (as the idea was known in the United States when it was seriously considered in the 1960s and 70s. Some (but by no means all) of the many different names for specific basic income guarantee proposals include:

Alaska Permanent Fund
Guaranteed Basic Income
Share the Wealth
Basic Income (BI)
Guaranteed Income (GI)
Social Credit
Basic Income Grant (BIG)
Guaranteed Minimum
Social Dividend
Citizen Dividends
Guaranteed Minimum Income
Social Income
Citizens’ Dividend
Income Guarantee
Social Wage
Citizens’ Income
Minimum Income Guarantee
State Bonus
Citizenship Income
Minimum Income
Territorial Dividend
Citizens' Wage
Mincome
Unconditional Basic Income (UBI)
Daily Bread
National Minimum
Universal Allocation
Demogrant
National Tax Rebate
Universal Basic Income (UBI)
Dividends for All
Negative Income Tax (NIT)
Universal Benefit
Guaranteed Annual Income (GAI)
Refundable Income Tax Credit
Universal Grant
Guaranteed Adequate Income (GAI)
Rent Sharing
Universal Income Tax Credit

Most of these plans fall into one of two categories: the Basic Income and the Negative Income Tax. The Basic Income gives every citizen a check for the full basic income every month, and taxes his or her earned income, so that nearly everyone both pays taxes and receives a basic income. Those with low incomes receive more in basic income than they pay in taxes and those with relatively high income pay more than they receive. The Negative Income Tax pays the full benefit only to those with no private income and phases out the benefit as people earn more private income, but private income is not taxed until the negative income tax is fully phased out. Thus, the Negative Income Tax avoids giving people checks and asking them to send checks back, but the Basic Income gives people the assurance that their check will be there every month if they have a sudden loss of income. Despite their differences both of these plans guarantee some basic minimum level of income and ensure that people who make more money privately will be financial better off than those who make less, and therefore both are forms of BIG.


    BIG is substantially different from the current income maintenance system: It would replace a complex categorical system with one simple system. The current income system is made up of many different programs desired to meet different categories of need, including Unemployment Insurance for the unemployed, TANF for needy families, SSI for the disabled, and so on. BIG could replace all programs designed to maintain people’s income in times of need. The theory of the current system is that work is the solution for poverty and that government aid should be focused either on moving people into the labor force as quickly as possible or on identifying those who cannot work for some reason and giving them aid as long as they remain unable to work.

Aside from the fact that the current system has been gradually scaled back over the last quarter century, it also has some inherent flaws. For one, people will fall through the cracks of any categorical system and many end up homeless or relying on the generosity of friends and family. For another, in the year 2000, despite an unemployment rate below 4 percent, despite 8 years of uninterrupted economic growth, despite increasing labor-force participation of former “welfare mothers,” more than 12 percent of the U.S. population remained in poverty. Some estimates show that approximately 10 percent of people who work fulltime all year around live in poverty. Hard work and a booming economy have not comes close to eliminating poverty. A universal program like the basic income guarantee could eliminate poverty.

This has been tried already in Alaska and it has worked out quite well. Brazil is also experimenting with it, as is Western Europe.

Thanks for the invite!

 

I would like to thank everyone who weighed in on the topic of Social Security. Its interesting that so many ideas were put forth by so few people--it seems like our politicians could do likewise, but I don't have a lot of faith in any of them.

In this debate there are facts, figures -- conjecture and fuzzy figures. Right now, Social Security is definitely in need of reform as any individual can see its imminent demise. There are several rules of thumb as I see them to help you in your analysis:

1. Beware the politician who exploits the fears of others to further their agenda. I'm sorry to say, but the Democrats have preached so long from a pulpit of fear, that they can hardly claim the title of "progressive". Social Security as it exists is a dinosaur, a creation for a much smaller, much simpler nation. A politician who wants to keep it as it is, and plays upon the fears of the elderly and soon to be retired can pretty much be dismissed for having an agenda--whatever it is.

2. Social Security isn't a partisan issue. Although it is being made into one. Retirement savings accounts were the brain child of a prominent Democrat, and it was only when President Bush and the Republican Party embraced the idea, that Democrats enmass turned against the idea and took an alarmist position. What many Democrats fail to see is that the Bush Administration and the Republicans are doing exactly what the Democrats intended. Socialized medicine, increase in entitlement programs, etc. are all hallmarks of the Democrat Party, but it seems that they stand on the sidelines and say "we don't like it because we would have done it better", etc. Democrats are becoming the "Reactionary Party" and if they remain so, they will always be playing defense on issues, and snapping at the heals of the rest of the legislative gang. This can be expected though as long as extremists such as Pelosi, Kennedy, Boxer and the rest of the clan do the talking for the party. Republicans need to make darn sure that what they propose and legislate has the safeguards in place to ensure the long term survival of the program.

3. Most people who discuss the Social Security issue know so little about it they should sit back and listen as opposed to chanting the party mantra. My dear friends on the left and right would help themselves if they would doubt half of what they hear, and believe less than that.

The Snipet will soon publish the little I know. I have somewhat of an edge having worked for Social Security. :)

Again, THANK YOU ALL for your input and insight. I am thoroughly impressed with the answers provided.

-Jack

 

I guess I'm a little late for the party. And anyway, the other comments are far better and more informed than anything I could add. Interesting comments from a broad spectrum.

Just one request.....would Magnum Serpentine replace "Christian" with "spinach"?

Hen

 

Steer Pike Pie-
I guess I happen to be "some idiot"- fair enough, I have been called worse, but look at your own argument.
Essentially what you are saying is other people's ignorance and lack of motivation/interest in planning for their own retirement is worth 1/8 of the money I (and you) make... funny I don't see many people lining up in favor of that argument.

"everyone is sucking off you and no one is sucking you off??" seems like a pretty typical liberal response to any kind of intelligent dialogue. Next I am a Nazi, right? Hitler supported Social Security just to make sure you get your history right.

How I can afford to "save for this silly plan" has/had nothing to do with luck. Hard work and determination would be the proper terms.
Furthermore, it has nothing to do with affording anything. This is money you are already paying!!! Why cant you unwrap yourself from the trees and terrorists you hug to realize that? Whether Social Security is privatized or not you will still pay the tax. Hello, Bueller, Bueller, Bueller...

"You are a buffoon, a jack-ass, and you make me sick" Not much I can do about that one. Maybe I will make like the president and steal your retirement nest egg.

"How do you like the suburbs???"
I am sure in some new hip urbanism that is supposed to be an insult, but frankly I like the suburbs very much. I vote Republican, go to church, my IQ is over 100, I bathe, and my wife drives an SUV. Guess we cant hang out, huh?


Steer Pike Pie-
Boy I guess the only thing worse than one stupid post is two stupid posts... you were going for some kind of record.
"the other person (apparently that must be me, your humble blogger) doesn't like having to shellout to keep people living with dignity in their old age. That to me is anti-American. It reminds of those who think women on welfare should have to be on birth control so they don't have to pay for their dirty poor little snot nosed kids who will grow up to suck SS dry"
Once again, somewhere I am supposed to be ashamed of myself for expecting people to take care of themselves, plan for their own futures, or at least have the opportunity to plan for my own retirement.
I would invite you to lay down the crackpipe, turn off Air America, ban Ted Kennedy's speeches from your posts and join us in the real world.
There is nothing anti-American about being able to take care of oneself, in fact there is nothing MORE American than having choices and options.
And yes, the welfare hussies should be on birth control. And yes, we still love the suburbs and our SUV.