Re: How to Fix Social Security
 

[QUOTE=Schneed10;435428]Too many Americans will fail to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

From a philosophical standpoint, I'm 100% in agreement with you. But if there's no program to support the working poor in old age, they'll stay in the workforce longer and longer.[/QUOTE]

Why are we assuming that the people who failed to plan for retirement will still be in the workforce at the age of 80, whether they want/need to or not?

Medical, health and emotional issues will weed out a substantial number, and age discrimination aside, companies will find ways to get rid of them.

The fundamental problem with providing for these people is it kills of incentive. What's the incentive to live responsibly and manage your money wisely if the government will bail me out regardless of what I do?

Maybe if people could look ahead and see that they'll be living on the street at 70 if they don't plan ahead they'll have some incentive to manage their finances responsibly.

Re: How to Fix Social Security
 

[quote=mheisig;435441]Why are we assuming that the people who failed to plan for retirement will still be in the workforce at the age of 80, whether they want/need to or not?

Medical, health and emotional issues will weed out a substantial number, and age discrimination aside, companies will find ways to get rid of them.

The fundamental problem with providing for these people is it kills of incentive. What's the incentive to live responsibly and manage your money wisely if the government will bail me out regardless of what I do?

Maybe if people could look ahead and see that they'll be living on the street at 70 if they don't plan ahead they'll have some incentive to manage their finances responsibly.[/quote]

Doesn't have to be age 80, I was just throwing out a number. Make it age 70 (an age a majority of Americans live to). Many of them will be in the workforce because they HAVE to be. They'll have no other way to sustain themselves than to seek a job that provides the bare essential needs (food, shelter, heat, water).

I agree on your point about incentive, you can still build incentive into this program. Please don't mistake me for someone who thinks the current system is any good. It's not, it's horrible. The only thing worse than this system would be having no system at all. That's the part where I'm calling for change - force people to contribute a minimum amount to a low-risk portfolio consisting largely of bonds - but give them options to contribute more if they wish. And on the extra contributions, give people a choice of what to invest in (stocks, bonds, real estate trusts, international stocks, etc.). With this type of program, everyone still contributes a minimum amount, just enough to sustain them in old age. But it also affords everyone the opportunity to control their destiny, and thus enhances the incentive you speak of.

In other words, you need to provide those with half a brain the opportunity to be incented. Those without half a brain will not take advantage of any incentive, no matter how delicious that carrot might look to a reasonable person. Those people still need to be hand-held to an extent, or our economy will suffer in the long run. You need a hybrid model.

Re: How to Fix Social Security
 

[quote=Schneed10;435432]How can a job make someone poor??? Even if it pays $7.50 an hour, it still gives you more money than you would otherwise have if you were unemployed.

It doesn't solve anything, you're making no sense. If more low-level jobs are taken up by the working poor in their old age, there will be fewer low-level jobs for younger people. They will either be squeezed out of a job altogether, or they'll have to seek a higher-level white collar job. Unless they're college graduates, which most of the working poor are NOT, they will have a significantly harder time finding a job that matches their skill level.

Plus, employers will realize that they can hire a cashier who's 24 and get rid of the geezer who's 76. The 76 year old will then be out on the street seeking a job, and tell me who will prefer him over a younger person?

It will cause absurd problems in the job market. I can't figure out what the hell you're talking about.[/quote]If a statistically significant supply of poor elderly workers arises, won't businesses respond by creating more low cost jobs that can be filled by this skill set? Isn't that what economic theory suggests?

If we have a seemingly endless supply of the elderly willing to work for minimum wage to support their retirement, that seems like it would be economically beneficial.

On a humanitarian standpoint, that's probably a less-than-ideal way to finish ones working years, but at least it would serve as a model situation to be avoided for younger generations.

Re: How to Fix Social Security
 

[quote=GTripp0012;435456][B]If a statistically significant supply of poor elderly workers arises, won't businesses respond by creating more low cost jobs that can be filled by this skill set? Isn't that what economic theory suggests?[/B]

If we have a seemingly endless supply of the elderly willing to work for minimum wage to support their retirement, that seems like it would be economically beneficial.

On a humanitarian standpoint, that's probably a less-than-ideal way to finish ones working years, but at least it would serve as a model situation to be avoided for younger generations.[/quote]

No, that's not what it suggests. Businesses will only add those employees if they think that consumers show a DEMAND for new products/services. If the demand is not there, there is no incentive to add workers.