Social Security debate (again): Whats to be done?

That’s fine.

That is what it’s always been. The problem?

When has SS ever been anything but a welfare program?

We can try and say that it is an investment by the workers but it isn’t and never has been. From the beginning it was simply another wealth distribution system that went to the old. Any plan that moves it from a welfare situation to an investment situation is going to either leave one group without benefits or force one group to pay for both their SS and their parents. There is no way that current retirees benefits will be cut, the AARP is too strong for that. The same goes for people who are going to retire in hte next 20-30 years. Who does that mean is going to end up paying for this? Why my generation of course, the same one that is going to have to deal with the huge debt run up by previous generations. Thanks guys :rolleyes:

You guys really need this to be explained to you?

The reason for Social Security’s success is due to the fact that everyone pays into it and everyone expects to get paid back out from it.

Social Security dwarfs welfare in size and scope by any measure. Yet, you constantly hear people complaining about welfare, and much less often do you hear complaints about social security. Even Clinton talked of the “Welfare Queens” when he was implementing his reforms. This kind of talk gels with people, because they don’t like the idea of leeches who don’t work for a living getting by on their tax dime.

Social Security, up until now at least, hasn’t been like that. It’s fair. It applies to everyone. We all pay in and we will all get paid out at the end assuming we live long enough.

If you make Social Security just another form of welfare but for old people than public support for it will erode. People will resent the idea that they are punished for saving for retirement just to see their taxes go to others who didn’t. It’s not fair and it’s not right, they will say. And they will be right.

There was never any “surplus.” Every dime that has ever been contributed to the Social Security “trust fund” has been immediately “loaned” by the federal government to the federal government. The “trust fund” is, and always has been, nothing but a pile of IOU’s in the form of federal government securities; a “promise” to pay these “borrowed” assets at their maturity from the general fund. These “securities” which currently make up the fund aren’t even available to any other “investor.” What do you think? The “surplus” is a pile of cash sitting in a file drawer in some guy’s office?

Here we find (bolding mine) what the “trust fund” consists of:

And here we see that this has always been so:

Oh, and I should point out for the record: I don’t actually agree 100% with all of that last post. I was just trying to accurately describe the attitude that Joe Sixpack American has towards Social Security.

I don’t like the idea of means testing, precisely because it would make SS seem a bit more like welfare. The surest way to destroy Social Security is to erode its popular support, and the surest way to erode its support is to give it the appearance of a welfare program.

The system is not broken. With some minor adjustments, the system can be solvent indefinitely. Some tweaking that I would do includes:

  • Raise the minimum age of retirement. Advances in medicine have raised the expected life span. Let’s take advantage of that and nudge the retirement age up.

  • Stop paying SS to those still working. Now, at age 70 you can still earn your full paycheck and get the full SS. If it’s for retirement, make people retire to get it.

  • Collect SS tax regardless of age. Just as you shouldn’t collect until you retire, you shouldn’t stop putting into the fund until you retire.

  • Fix Medicare. If only Medicare had received permission to bargain with the drug manufacturers, truckloads of money would have been saved. Correct this oversight and put the money saved into SS.

  • Make slight reductions in the inflation adjustments. Very small reductions can make huge differences in time.

Got something to do with people not complaining about money they themselves get, wouldn’tcha say?

“It’s money from the government. I didn’t earn it, I don’t need it, but if they miss a payment, I’ll raise hell!” - Grandpa Simpson

But it’s welfare nevertheless, no matter that there’s a tacit understanding among the welfare-queen bashers not to say so. You and BobLibDem and others are talking about imagery, not fact, although of course in politics there’s little difference.

First: recognize that it is a welfare program, so:
-suspend payenmts to anyone who has other income >$50,000/year
-stop paying “crazy money” (SSSI to parents of these children)
-raise retirement age to 67
-stop payments to recipients in foreign countries
-stop payments of SS “disability” to recipients under 55 years of age 9if they have a job)
The biggest racket now? hundreds of lawyers are advertising their services, to win SS disability pensions for their clients. many of these people are able-bodied, who want to retire early.
That and other massive fraud (“crazy money’”) is draining the system at an alarming rate.

By this definition, the idea that SS is “fair” is as big a myth as any of the others. Nobody who’s getting money out of it is getting their “fair share” as they’re currently drawing more than they put into it. BFD. Maybe it’s time people woke up to that as well. It’s not “fair” by this mythical narrow standard, and shouldn’t be. It’s there primarily to make sure people don’t wind up completely destitute when they retire. Given the payouts, its impact on the wealthy is minimal, while for the poor, sometimes it’s all they’ve got. For the middle class, it’s a middling benefit. How is any of that “fair”? It’s not a proportional benefit by any practically meaninful interpretation of the word “proportional”. What’s the real difference if the wealthy end up benefitting even less, proportionally, in the future from something that’s only a fraction of their total retirement funds to begin with? What’s the real impact of “soaking the rich”, and how is it they don’t get soaked eventually when loads of old people, who can’t afford the health care they need, for instance, all go bankrupt. Turn them out on the streets? I guess that’s the plan, given we can’t euthanize the no-good leeches (re. Schiavo debacle), right?

Two points:

(1) If Bush hasn’t submitted a specific reform plan on the table, I’m curious why folks like xtisme are insisting the Dems must put one down as well.

(2) By most accounts, the Administration’s selling of the Social Security “crisis” and Bush’s “reforms” has been done using deceptive tactics (such as comparing worst-case scenarios for the current Social Security system with best-case scenarios with Administration proposals). How is the public expected to believe that Social Security needs fixing at all?

There may be a compelling, honest argument that Social Security is genuinely in need of repair, but the Administration isn’t making it…

I don’t see why the myth, or pretense that it isn’t really welfare, etc. can’t be maintained during the necessary tweaking of the numbers, making it politically palatable and even desirable. The Norquist faction running Bush’s financial policies does have to make the people think about what it really is in order to proceed with destroying it - and now the people *have * thought about it, and reject anything beyond number-tweaking.

The competing myth, that it’s actually not a guaranteed transfer-payment system but some type of investment fund consisting of “your” money, has now been probably sufficiently discredited - as has its related competing myth, the one that it’s an inherently-fraudulent, inherently-doomed pyramid scheme - among most of us, anyway.

  1. remove the Cap. No Cap at all. Earn a salary of 10Million? Pay FICA on all of it. You will still get benefits, and the amount you pay in will still raise those benefits- however, there still will be a maximum SS check, in any case. In other words, if you earn a shitload a couple of years and nothing the rest, the shitload with still act to average out the "nothing much". But if your earn 10million for 30 years, your SS check will still max out as if your average income was only $90K. That’s fair to everyone. Those hardest hit won’t even notice it.

  2. raise the age- slowly. Have the same "lower benefits’ age, abut raise the “meximum benefits” age- more dudes are working in their olders years, so we might as well encourage this.

It is impossible to design any system that will be “stable” forever- because beyond 50 years or so, they are relying on pure “by guess and by golly” WAG’s. SS will always require some tinkering, as the economy changes, and lifespans increase. If, for example- virtual “immortality” is achievable in some 50 years (not impossible), they’ll have to do quite of bit of fixing.

I’d like to see a “means test” on benefits, but this is something that dudes just won’t buy into. Since 85% benefits are now taxable to higher income retirees, just increase that trend, let’s make it 100% as the income gets higher. Note, you have to have some $25K of non-SS income in order for even a dollar of SS to become Taxable, so those who just get SS, or just a small pension and SS won’t have their SS benefits taxed at all.

Oh, and 3. Fund the Other dudes’ the ones that didn’t pay in, and aren’t really retired- out of another fund. In other words, Disability is fine- but it has nothing whatsoever to do with a Retirement plan. Separate the two, at least in name.

Lots of good posts in the thread with some ideas we can actually debate. Nice. :slight_smile:

Um…you realize that if Bush uses the Thrift Savings Plan (TSP) model (which is what Bush claims he is going to be using) to manage the individual accounts that you are talking about something on the order of less than a dollar per every $10k invested, right? Not exactly a huge windfall for those corporate investor types, and certainly not how I’d define ‘corporate welfare’. Or were you talking about something else?

I’ve seen this theme several times in the thread so I’m going to briefly give my two cents on it here. Correct me if I’m wrong (I know someone will), but the government spent that money as it got it for all those nice social programs, toys for the military, basic infrastructure for the country, to study the mating patterns of flat worms, etc. And they have been spending that ‘surplus’ since the very beginning of the program? No?

Is this a trick question? Afaik SS has NEVER been considered a welfare program and isn’t considered so today. Its one of the strengths of the system in fact…by and large the system is ‘fair’ to everyone.

Why do you say this? From its inception (well, maybe not right at the beginning) until today it has pretty much functioned as workers paying in while they work (payroll deductions), and getting money out when they retire.

Well, er, I’d figure that if the Dems also recognize that there is a problem with SS and that the system will eventually self destruct (to a degree) that they would be interested in, well, you know, having some kind of alternative plan thingy. Unless you are saying that the Dems DON’T think there is a problem with SS and its all Republican hype or something. In which case you are right…the Dems don’t need to do anything about it.

I suppose they could look at independant sources that are also saying that SS is in trouble and that eventually its going to hit the wall unless something is done. Conversely I guess they could look at equally partisan and deceptive statements on the other side and just decide that its a ‘no worries, be happy’ situation, ehe?


Because any reasonable person knows that Social Security does need some kind of changes or reform. Bush is the one reaching out and willing to make these changes. He’s ruled out a couple things, but just about everything else is on the table. Even the specific plans he’s praised are by democrats, in an effort to try and generate some support for reform.

It’s the Democrats who aren’t willing to discuss any changes at all. They won’t meet at the bargaining table and are looking very obstructionist. Nobody is saying they must have a detailed plan, but it’s not unreasonable to expect to see something from them.

“By most accounts”? Most left leaning media sources and interest groups like the AARP maybe. The crisis was touted by those on the left like Bill Clinton using rhetoric like “crisis” before Bush was ever president.

Yes. That was exactly my point. You got it.

You couldn’t resist, could you. I never even said the “P” word but you still had to go there.

You do realize that you are responding to an argument that nobody made. An argument that will derail the thread and not accomplish anything. An argument that you insisted last time we should stop making because of the inflamitory nature of it.

So, I go ahead and do what you ask. I don’t mention the “P” word at all. I ignore it altogether. But, nope, that doesn’t stop you. You go ahead and respond to the argument that nobody is even making anyway. :rolleyes:

The system is the way it is. We can’t talk about what it “should” and “shouldn’t” do in the present tense. We can talk about what it should and shouldn’t do in the future, but today, as it is, the general fund and SS revenues are mingled extensively. Tax cuts/increases in the general fund heavily impact SS and vice versa. It is not really fair to call repayment of a debt an “infusion of cash” though. SS revenues have been used to prop up the general fund to the tune of about 1.7 trillion so far. Repayment of that debt can hardly be considered an “infusion of cash”. The same statement could easily be made of the general fund. The general fund should not need infusions of cash from payroll taxes to keep from going into severe deficits. The fact that it does speaks poorly of the management of the general fund and its revenue streams.

Weaning the system off of this co-dependence is a good idea and one I have supported for a long time. SS needs to be fully-funded with the current revenues preferably going, at least partly, into the private sector to encourage economic growth. How to get there without either abandoning the current debt owed to the trust fund or cutting benefits is the real trick. Re-directing current revenues into private accounts will really put a hurt on the system as they will have to cash in the trust fund assets immediately. Some means-testing seems reasonable, though I stop before saying older people must sell off their estates and use those proceeds to live on before being able to draw SS. Forcibly impovrishing those who have worked, invested, and saved for a lifetime before they can get any money from a system they paid into for their entire working career seems pretty harsh. Multi-millionares with lots of liquid cash or non-subsistence type assets(stocks, mature bonds, etc.)? Sure. Grandpa being forced to sell the home he raised his family in and live off the proceeds until they are almost gone before he can get a check? No thanks.


Consider that the first generation got their SS for free I would definately classify that under welfare.

Sort of. Workers now are paying the SS benefits and are relying on future generations to pay theirs. It is a wealth redistribution scheme, if you don’t want to call it welfare thats fine. Its merely a semantic quibble. The point is payroll taxes aren’t investments rather they go to support the quasi-pyramid scheme that SS is.

Okay, Effects are rendering and I’m back. For a few minutes, anyway.

First off from the Tax Policy Center here

The main quote that jumped out at me is:
“Peter Orszag, a senior fellow at the nonpartisan Brookings Institution, estimates that the president’s tax cuts will forfeit $11 trillion over the next 75 years. By comparison, Social Security trustees put the retirement plan’s shortfall at $3.7 trillion over the same period.”

Another is this: “Analysts acknowledge that 75-year forecasts for both taxes and Social Security have their limitations. They rely on educated guesses about economic trends and cannot anticipate changes in law or unexpected events such as war and natural disaster.”

I agree wholeheartedly here. We really have no idea what is going to happen next week, let alone in 75 years. Look at the difference now compared to the boom of the 90’s.

Sorry there is only one cite, but I’m on a time budget here. My boss gives me “that” look if I’m at my desk too long.

I’d have to agree with Rjung that the Dems don’t need to supply a plan if the President won’t. He has created this “Crisis” out of whole cloth, lets see his plan.

Robert Ball, of the Century Foundation has one:

Sorry, it’s a PDF but the gist of it means fixing any shortfalls by raising the payroll cap and a revised estate tax. But since President Bush has already nixed anything that even smells like a new or raised tax, I can bet this will not get the consideration it deserves.
He also addresses a point made by Plan B, who said: "We are headed for a system with two workers for every retiree. Can’t sustain that for long. Something has to give.

I can’t cut and paste the PDF but the second and third paragraphs are the relevant ones.

Gotta get back to work, I’ll check in later tonight.