Needs2Know,
A logical extension to opposing tax cuts is to oppose income tax “refunds”. I don’t see you volunteering to sacrifice your refund.
SouthernStyle, here’s a thread on privatization. As you might imagine, I tend to agree with Daniel here. Don’t know how you and I missed this debate.
http://boards.straightdope.com/sdmb/showthread.php?threadid=34907
I expressed some of my concerns about privatization in this thread:
http://boards.straightdope.com/sdmb/showthread.php?threadid=25029
I posted some stats from what I consider reliable sources here:
http://boards.straightdope.com/sdmb/showthread.php?threadid=24850
Let me know if you disagree with those stats or need updates (at this point these are at least 1 year old.) As part of my job, I get SS materials on a daily basis and have access to quite a bit.
As for my characterization of the SS crisis as a nonexistent problem, that was slight hyperbole. Yes, it is a problem, but IMO the system needs to be tweaked, not reformed. It is the proverbial asteroid light years away, streaking towards earth. If we act now, it just needs a little nudge. But if we wait until it is on our planetary doorstep, we will have to call in Bruce Willis, and no one wants to do that!
So we could raise or eliminate the max withholding rate. Nudge up the percentage. Nudge up retirement age (The latter 2 of which have already been done, as you no doubt know). Install some type of means testing. A tweak here, a tweak there, and the asteroid spins harmlessly into space.
But, of course, these tweaks are tough to package politically. Much more advantageous to say, “tax cut” or “Medicare coverage for prescriptions.” Now if you want to talk about impending problems, the medicare trust fund …
SouthernStyle, when you talk about refunds, are you talking about the portion of taxes Needs2Know is currently entitled to because she had too much withheld, or are you talking about Gore’s proposals. If the former, I question the validity of your analogy/logical extension. If the latter, I agree, they are merely playing semantics.
Needs2Know, cut it with the false modesty. You express yourself extremely well. I guess I can express here that a significant portion of the Republican platform strikes me as somewhat righteously self centered and intolerant. “I got mine, now I want to protect it and get more.” Add in a dose of, “Everyone should think the same way I do.” Even if the democrats are comparatively wasteful and ineffectual, I sorta prefer that.
Along these lines, I think that privatization arguments are primarily aimed at folk who have been successful, and are investment savvy, and will simply allow them to widen the gap between them and the poor have-nots who will be most dependent upon SS. I think it is clear Gore proposed privatization solely for political reasons.
Just think, tho. Last year we were going to be having a national dialog on SS reform. I personally was trained to inform people of the issues involved. And what happened? Is the asteroid no longer streaking towards us? Well, an unexpectedly prosperous last couple of years stretched d-day farther out into the future, and made it easier to push any real solution off until someone else’s watch.
I’ll conclude with a minor soapbox, which I may try to rephrase as a debate topic, does it seem to you that in recent years the federal government has avoided making any hard choices to resolve problems? Expanding here will get us even more off the OP, so I’ll stop now.
Actually my refund is sacrificed for now. Last year I had to file a Chapter 13 bankruptcy. So any refunds I recieve from the government are forfiet to the court. Now I could have changed my filing status and had a little more money coming in each week. But I’ve chosen to keep things as they are and have whatever refund that is due used toward alieviating my debt. The sooner I am out from under this bankrupcy the better.
If it makes you feel any better I would give up my refund if I thought that it would be put to good use. But then that’s me and there are some things that I value more than worrying about driving a new car or living in a bigger house. I’d like to see our government go back to supporting the arts. I firmly believe that the funding support cuts for the NEA have had a negative impact on our society. It may be subtle but I’m sure many people closer to the arts community are better able to asses the impact. I am also distressed about the lack of emphasis that has been placed on creativity in our public schools. We are so hung up on standardized tests and regurgitation of facts in some misguided attempt to out test score other countries that we lose site of the fact that we aren’t teaching our children how to think creatively. We’ve become a nation that values the superficial. Are SUV’s, Tommy Hilfiger clothes, Britney Spear’s augmented boobs and a good golf game the only thing Americans give a shit about anymore? Well I say when the moralizing, money grubbing, techno oriented elite decided that art, music and literature were no longer important to the health and growth of our culture then we did ourselves a terrible disservice. Because of a few controversial grants the whole program was swept out the door. Symphonies in smaller cities had to shut down. After school programs for at risk kids were cut. How has this helped our society? It hasn’t. Oh well… I know I’m talking to a brick wall. Sorry for bending your ear.
Needs2know
SouthernStyle:
It’s true I generally favor Gore’s economic proposals over Bush’s, and for the following reasons.
Gore’s proposes $480 billion in tax cuts vs $1.6 trillion for Bush. I think the smaller figure is more likely to be achieved and more manageable if the economy tanks.
Bush’s figures don’t apply money to reducing national debt. He doesn’t consider potential loss of savings in interest payments in gibing his numbers.
I like Gore’s idea of targetting the tax cuts. He wants to increase home ownership, cut poverty rates and increase college attendance. Bush just wants to cut checks. One way is investment, the other a payoff.
Bush’s plan to divert some Social Security money to private investment really sucks IMO. He’s creating a boom for brokers and dropping a load of cash to fuel more ‘irrational exuberance’. He only anticipates big returns but we know who’ll be holding the bag if the market drops. In essence he wants to privatize profits and socialize losses.
You can go here for a nice overview of the differences in the campaigns’ economic proposals.
I respect your appreciation for the arts. We could debate the role of government in arts funding; however, right now I just wanted to point out to you that the NEA is still receiving considerable funding support. The amount has been close to $100,000,000/year for the last 5 years.
I realize this has been despite the efforts of many Republicans, so your concern for the future of this agency is valid. But funding has not decreased lately. In fact, I think it has been on the upswing.
Good luck on your bankruptcy situation.
Prediction: Gore wins a marginal victory in November (mostly on the strength of winning the debates), and the Repubs retain Capitol Hill. Four more years of a lameduck presidency means very little will change, in all probability…so in terms of “does it matter?” – not really. There’s precious little separating the two, IMHO, anyway.
http://www.angelfire.com/indie/brainingdamage come for the fish, stay for the fun
Sorry for the delay in getting back. I’ve been out of town since noon Friday.
Dinsdale, I followed the debate on Privatizing Social Sectury. The debate was spirited and lively so I chose to lurk. I also chose to stay out of the other two, though I followed them less closely.
One of the keys that seems to be routinely missed is that Social Security is not meant to be a retirement program. It is merely an augmentation to other retirement income. Using Need2Know as an example and filling in the unknows with “typical” suggests that she’s got quite a few working years ahead of her and therefore plenty of time to affect her retirement lifestyle. Among the things we (I) don’t know are her current age, how many years she’s already worked, how many years she didn’t work (stay at home mom, etc), and exact income.
But she’s given us enough clues to come pretty close. Her income is under $40,000. The last time I checked, the national average is about $38,000 so she’s within 10% of “average”. Bracketting her income and expected returns it appears that she’ll be eligible to collect $500 to $700 per month from SS. Add the inflationary devaluation and in 20 years that won’t pay the rent, much less support her. So it is imperative that she find some way to save enough money to have another retirement income.
Using her assumed salary, she’s got a monthly take home of $2,300 - $2,800. Number of dependents, insurance, 401(k), etc. all affect this. Plus we know that she’s having more money withheld by the IRS than is necessary.
Now let’s mix in my prior example. $100/month is about 2.6% of her GROSS income, about 4% of her net. At her next raise, she can have it ALL diverted to a 401(k), Roth IRA, or other tax friendly retirement program. Her monthly take-home will not be affected and she’ll build her own retirement income.
Let’s get back to why she should.
If Needs2Know will put 100/month into an account as I described in a previous post, she’ll accumulate over $100,000 in 20 years. Then, at the end of 20 years she can retire and if her nest-egg continues to return 12%, she’ll have more than $1,000/month income without touching the principal. Her own investment plus Social Security will provide her with three times the income that Social Security alone will provide.
By rolling her next raise into the investment pool she won’t feel a thing. But the key is to START NOW. The miracle of compound interest is that the biggest benefits are in the OUT years. Assuming 12%/year, 20 years of savings gives her $112K in 20 years. If she can maintain the pace for 30 years she’ll have $395K, or more than $3,000/month in returns. And here’s the kicker – if she’ll put the $100/month away for 20 years she can then quit investing and the fund will grow on it’s own to $372K still giving her more than $3,000/month in returns.
This is why at least part of the social security program must be privatized. People will NOT be able to rely on Social Security for any significant income. They MUST have their own set asides.
This is already long so I’ll close and continue on the other issues in another post.
While I cannot question your math, I disagree with your conclusion.
Yes, SS is not intended to be sufficient retirement income. Moreover, it has been expanded over the years to provide disability, survivors’, and child’s benefits, which do not reflect income on contributions. Government securities, where the trust fund is currently invested, are generally thought to be just about the safest investment around. Why do folk think differently when the trust fund is invested in them, than for private investors? What happens during stock market downturns? Also, the trust fund is HUGE. How do we want to manage what extent of government investment in private businesses?
My response is tweak the existing SS system, but vastly expand other programs to encourage private savings and retirement planning.
Hope you had an enjoyable weekend.
Tweaking the SS program is part of the plans by both Gore and Bush.
The Bush plan allows individuals to take PART of their SS taxes and invest them privately. (It is my understanding that the plan allows individuals to control the investment just as they do now with 401(k) programs. This is NOT the government investing the SS trust fund into the stock market.)
Note that SS receives well over $5,000/year from Need2Know. If the system we part existing and part private, she could divert $1,200/year ($100/month) to a privately managed account, reduce her SS income by $100/month and still be far and away better off the the current system allows.
Hell, if SS would allow her to put HALF her SS taxes into privately managed accounts in exchange for forfeiting any SS income she can more than quadruple her income (versus the projected SS income) in those same 20 years.
needspeed said:
[montoya]
You keep using that word. I do not think it means what you think it means.
[/montoya]
** well, I pay about $37k a year before deductions. And my deducrtions are all really just expenses. That is more than I pay on food clothing and housing COMBINED.
** so I should work a second job (with 37% of my wages from it going to uncle sam) buy a shittier car and move to a crappy neighborhood, not go out to eat, buy cheap clothes, so that someone who is not working can get my money? Are you insane?
** One very minor point. You don’t have to buy insurance if you don’t want to. The government doesnt’ force you to have any insurance. But Gore is promising that I will have to buy health insurance for you. Great system: those that choose not to buy insurance get it for free, and those that work are forced to pay for it.
** Neither is penicillan, or anit-venom, or surgery, or airbags, or fire extinguishers. But they are pretty god damned valuable when your house is on fire or you are dying of an infection.
** Here I agree. But removing the incentive to work hard does not create a stronger economy. In fact, it make a weaker one.
** I am guessing that you are paying virtually nothing in taxes as it is. The only way you can be helped is by the gov’t giving you free stuff. And that “free” stuff is paid for by people like me to whom Gore is openly hostile. Why don’t you just come over to my house and rob it. At least then our relationship would be open and honest.