Oh, yes, the “lot of the country” that likes to be told government is bad. Doesn’t make it any more honest or thoughtful, though.
Of course. But the key feature of a Ponzi scheme is that it is inherently doomed to collapse by its very nature. You keep using the term as if it were true of SS as well. It is not, and to continue to suggest otherwise is as juvenile as it is false.
Wrong again. That’s only true if you never take any action to adjust rates on either income or payment ends to keep the cash flow in balance. Why would you expect never to make any changes? That’s just silly.
and earlier posts where I explained that SS can continue paying out benefits at a high level for the next 75 years (that’s as long as anybody like the CBO, SS trustees etc. ever do projections for) even with zero changes made to its current structure? I know there’ll be more retirees and less workers but the guys who do the projections know that too and SS cost is projected to jump around 1% of GDP in a decade or so and then stay at that level for the next sixty odd years, see graph :
http://seniorjournal.com/NEWS/Medicare/2009/20090512-MedicareHospitalTrust_files/image002.gif
So while we’ll have to make modest changes in benefits and payments to cover that increase SS will still provide the backbone of the nation’s retirement security for generations and an ever-increasing number of future workers will only have to fund a constant level of revenue for future retirees.
SS is currently paying out more than it’s taking in but that’s because we’re in a recession with high unemployment and so revenues have dropped. Absent the recession SS would still be taking in more than it’s paying out for around another decade. US bonds aren’t gimmicky, they’re backed by the full faith and credit of the US government and are the safest investment on the planet. They’re in a trust fund with all the legal guarantees that gives the money and the trustees have the obligation to redeem those bonds as and when needed to pay benefits. The US government will not default on its debt.
Oh yeah it’s going to be a bugger to fix. The medical-industrial complex isn’t going to go down without a fight. It’s going to take the bond markets demanding double digit and increasing yields to concentrate the politicians’ minds.
Look, this thread is getting thoroughly hijacked – my fault, in part – so let’s take the Social Security = Ponzi scheme debate to this thread, and let’s get the instant thread back on Republican ideas to reduce the jobless rate.
What makes you think so? The populist patriotism of the American businessman, his unwavering commitment to the American working man?
“Gee, let’s see, fifteen percent savings. Could plow that into further hirings, which would be a good thing to do for my fellow Americans, and honor my duty as a citizen. Or, I could turn it into a dividend for our shareholders, and then our Board will reward me with a gazillion dollars, a private jet, and a solid gold douche nozzle. Boy, that’s a tough one…Ponder, ponder…”
Mostly because I find it unexpectedly odd that you’d go to the trouble of supplying a cite that’s so close to being content free. Y’know, a worthless cite is as bad as no cite at all.
You seem to have reading issues. Since you still can’t be arsed to provide a decent cite, from their PDF to 23andMe (available with others at the FDA site):
This seems directly in line with their mission to me. Note that I’m fully aware that one (well, you, in particular) may not agree with the existence of the FDA, much less its purview. However, given that the FDA currently exists and is fulfilling its purpose by regulating medical devices, I feel justified in characterizing your complaints as “libertarian weenie-whining” in this case.
Let me remind you what you said: “If it’s a pension, then you CANNOT make those kinds of changes that will be required to save it.”
But the PBGC does in fact change pension benefits.
SS is not really like a pension and American pensions are not really like Eurpopean pensions. If you are trying to hammer home the fact that SS is not fully fuinded then I would sday that youa re missing the point. I have not seen anyone argue taht ss is fully funded, merely that it is and can reamin solvent over the long term (perhaps with some fiddling around the edges).
The question of whether of not ss is a good idea is subject to debate.
By that rationale, government bonds are not investments.
You (and apparently Wikipedia) are getting confused by the fact that the obligor on the investment is also the obligor on the ss benefit but unless you are trying to say that treasuries (granted a special form of treasury bond that can only be issued to the SS fund but one that is backed by the full faith and credit of teh United States in any event) are not investments. In fact if you check the general accounts and reserve accounts of insurance companies, they frequently carry quite a bit of treasury securities.
I’m not going to argue whether SS is a good idea or not. I think that reality has overtaken that discussion, and it won’t be eliminated in my, my kids’ or even their kids’ lifetimes. So the question is moot (as opposed to this debate, which gets so many results in the real world :rolleyes: )
You are right that PBGC mods pensions when they take over. And you are right that SS is underfunded. I’d argue that we (US politicians, and those who elect them) haven’t shown the political will, and certainly none’s coming from this trainwreck administration, to make the painful changes necessary so that the country isn’t Greece when the boomers retire and the bill comes due.
There is a huge imbalance coming (indeed, already here) between poorer workers paying into the system and wealthier retirees drawing from it (ie, the similarities to a Ponzi Scheme). This is not subject to debate, it’s simply a fact.
But back to the other point, the one I think you understand and the others on this thread clearly don’t:
If you view this as a pension scheme, then it’s something like a contract; people put their contributions in and then take them out later according to some schedule. Modifying that contract would be a breach of trust between the feds and citizens. Yes PBGC does mod pensions, but only after the entire company has gone bankrupt and is disintegrated… I’m assuming you don’t forsee that for the US :eek:
If you view it as an entitlement, then there’s far less of a connection between what you contribute and what you get out - just hit 65 or whatever retirement age and you get your check.
The problem is that people can’t decide which. If one suggests increasing the amount of benefits subject to taxation, or raising the earnings ceiling subject to FICA, or reducing the payouts either through less money or delayed retirement age, then the pension people will scream bloody murder.
But those are exactly the moves you need to make if you think it’s an entitlement.
You haven’t replied to my last two or three posts and I’m not expecting a reply to this one but let’s take this at face value. Let’s say that in 2040 SS can only meet 75% of current benefits. The CBO say it can make 83% after 2044 but let’s be conservative with the projection.
If SS can meet 3/4 of promised benefits with the existing tax, it could meet 4/4 of promised benefits with a 33% tax increase.
The current SS tax level is 6.2% of payroll. 33% of 6.2 is 2.1. So a 2% raise in the payroll tax would enable SS to meet all promised benefits.
Current average income is 700 dollars per week. 2% of 700 is 14 dollars. For a low wage worker, the tax increase would be about 7 dollars per week.
Projected average income in 2040 is 1000 dollars per week in 2010 dollars. 2% of 1000 is 20 dollars per week.
So Social Security can be “saved” by a 20 dollar increase in tax in 2040 on an income that has increased by 300 dollars in real terms by the time the raise is needed. The reason the raise will be needed is to pay for the six extra years of life expectancy those future tax payers will have compared to us. The 20 dollar raise will preserve their benefits at current replacement value and allow them to retire at the normal age with a benefit indexed to a 2040 standard of living.
So you haven’t heard of the social security trust fund?n It holds US treasuries. If you don’t think US treasuries are real assets then i really don’t know what to say.
Once again are you not familiar with teh social security trust fund?
Well who is your employer because from what I can tell, you are either self employed and paying both sides of social security or your employer has been ripping you off It is literally impossible for someone only paying the employee side of social security to have paid 200K into the system. Even a self employed person would have to have maxxed their contributions for the last 20 years.
Or are you counting your employer’s tax as YOUR tax?
So your transition rule would be to let YOU off the hook? Not much of a transition rule. Or is the idea that anyone taht has paid at leat 200K into teh fund can get off the hook? Because frankly THAT doesn’t sound like much of a transition plan either.
Well if you are self employed as this poster might be based on his assertions of how much he has paid into the social security system, the shareholder and the employee are the same person.
I also pay the self employment tax and the 15% tax really stings but I also have the ability to deduct things taht wage slaves cannot deduct. I shift some of my income from wages to investment income by owning the building and equipment and rent it back to myself. I can combine business and leisure in tax efficient ways. I can control my income in ways taht wage slaves cannot.
There is nothing in that trust fund except a promise by the federal government to pay back the money that has already been spent.
If this is still unclear, I will offer you a deal that (IIRC) I offered Dick Dastardly or someone who also did not understand the nature of what constitutes a debt and what is an asset.
If you send me $5,000 this year, I will send you $6,000 next year, if you send me $6,000 next year. In other words, sending me $5,000 means that you will have assets of $6,000 next year. Right?
You asked for cites. I give you Cato. You say you don’t like Cato because they are too conservative. I give you HuffPo. You say… that you don’t like HuffPo? Just because?
Please provide the source that would be an appropriate cite for you. Mother Jones? The Nation?
lol, if actual real world impact were important at all, this entire forum would become moot.
And I would argue taht social security is barely a pimple of a problem (in teh fiscal sense) compared to medicare and wringing your hands over a program that is largely solvent and even if it reaches insolvenscy is likely to regain solvency within a generation. Medicare is the real threat to America and that is why health care reform is so important.
I think its something in between an entitlement and a pension, but I think entitlement is a better descriptor than pension.
To be perfectly honest, if we remove the cap and apply the tax to deferred compensation, we don’t have a funding problem (we might have a slight timing problem but…).
