How to Fix Social Security
 

According to US Treasury Secretary Henry Paulson, the US Social Security trust fund will be used up by 2041 (thank you modern medicine!), though many think it may be sooner than that. This means that for many of us there will be no money available when we retire. Ultimately this leaves us with three choices

[B]1. Raise Social Security Taxes[/B]
-Currently employees pay 6.2% tax, this is matched by another 6.2% from employers

[B]
2. Cut Benefits[/B]

[B]3. Privatize Social Security[/B]
-The idea here isn't necessarily to privatize the entire account, just a portion of it (primarily in mutual funds). So, for example, you might pay a 3.2% tax and the other 3% would go into a private account

So what's your solution?

Re: How to Fix Social Security
 

I voted other. Social Security is a pyramid sceme and those are against the law. The program should be phased out over time in a way that minimizes the detrimental impact on the the most vulnerable, because it's going to go bankrupt anyway. This is what SHOULD happen.

What WILL happen is they will end up raising the payroll tax. Sympathetic media will then congratulate these "couragous" politicians who have "saved" social security and the vast majority of people will never realize their getting stuck with the bill.

This is interesting reading:

[url=http://en.wikipedia.org/wiki/Social_Security_Trust_Fund]Social Security Trust Fund - Wikipedia, the free encyclopedia[/url]

Re: How to Fix Social Security
 

Soylent Green

Re: How to Fix Social Security
 

[quote=ArtMonkDrillz;434605]Soylent Green[/quote]

[url=http://www.cbc.ca/world/story/2008/03/24/kevorkian-congress.html]Assisted-suicide advocate Kevorkian to run for U.S. Congress[/url]

Re: How to Fix Social Security
 

I voted other because as 70 said it is a pyramid scheme. I think it ought to be revitalized to only allow citizens to withdraw what was put in with the appropriate interest applied. Once you are out then you are out. Then we need to figure out ways to make lif cheaper for older citizens. But the current model for social security will never work no matter how we tweak the taxes or benefits. It needs to be remodeled as a savings plan and not a pyramid scheme to ever really work.

Re: How to Fix Social Security
 

i say leave it alone. the money that is earmarked for social security benefits is used for strictly that. the main issue, in my opinion, is that every time the gov't gets into a bind for one of their programs, they dip into the S.S. fund

Re: How to Fix Social Security
 

[QUOTE=dmek25;434609]i say leave it alone. the money that is earmarked for social security benefits is used for strictly that. the main issue, in my opinion, is that every time the gov't gets into a bind for one of their programs, they dip into the S.S. fund[/QUOTE]

That is definitely a big issue but long term that doesn't matter because the system is simply economically unsustainable since it is really nothing more than a fancy pyramid scheme.

Re: How to Fix Social Security
 

I say privatize it so that the majority of your money goes into something that can build compound intrest, for one.

Secondly, if the govt decides to dip into it, there is a smaller portion that they would be able to touch.

Overall it is a win, win, win.

Economy, beneficiary, govt.

Re: How to Fix Social Security
 

I just got a letter from Social Security today that said if I earn no more money for the rest of my life, I will be entitled to $560/month when I retire. If I continue to earn money until I'm 62 at this rate, I'll earn $680/month.

What? I'm 37. Twenty-five more years of rock-breaking is supposed to get me an extra $120? Screw you.

If the Federal Government offered people my age and younger the opportunity to opt out of the Social Security plan for 10% of what we've put into it, there would be a stampede of people begging for checks. Since that isn't going to happen, there needs to be means-testing for benefits. Not entirely fair, but it's like Social Security is a lottery, and it only pays out when you lose.

Re: How to Fix Social Security
 

[quote=ArtMonkDrillz;434605]Soylent Green[/quote]
But, Soylent Green is people!

Re: How to Fix Social Security
 

You can't cut benefits across the board, because the people who need it need the whole thing. I'd also like to see an opt-out option. Maybe if you opt to privatize half, you only get 25% of the SS benefit. Dunno, it's an antiquated system built for a different generation.

Re: How to Fix Social Security
 

The best solution is to just prepare for retirement without even thinking about social security. I personally would like to take that percentage of my check and put it into something that will definitely be there for me when I'm 65.

Re: How to Fix Social Security
 

Privatizing is the most efficient use of our money, by far. Any other solution makes no sense from an economic standpoint.

Re: How to Fix Social Security
 

Pull out of Iraq, decrease the defence budget to a quarter of what it is, start negotiating for drugs, repeal the Bush tax cut and strengthen the "death tax."

Re: How to Fix Social Security
 

I support a general phasing out of Social Security over time, and eventually a total elimination of it.

I realize that means that I will be paying a social security tax for the first few years I work, and I will never see any of that money again. I'm fine with that. I kinda view taxes as throwing money into the fire anyway, even though it's obviously necessary to support a vast majority of public help systems. That doesn't mean I expect my tax dollars to all be spent wisely...in fact a good portion of tax dollars are relatively pissed away.

I think the closer someone is to retirement (right now), the more it becomes necessary to have social security for them, since they dont have nearly as much time to develop an alternate retirement plan as I do.

I'm 20, and I can totally save enough for retirement where I don't have to depend on a dime from social security. I have no problem if they take a chunk of my starting salary and put it in the SS fund of some 50 year old guy who is totally dependent on his social security check.

But ten years from now, I would hope that people are planning to retire without social security as a crutch. If I'm not going to benefit from social security, I would expect not to be paying a social security tax when I'm 40.

Re: How to Fix Social Security
 

[quote=Schneed10;434658]Privatizing is the most efficient use of our money, by far. Any other solution makes no sense from an economic standpoint.[/quote]
True, but economics isn't always the most realistic solution to a financial problem. You can't assume away the irrational actor when it comes to the types of people relying on social security.

Re: How to Fix Social Security
 

Even if it was sustainable (which it isn't), with the accelerating rate of inflation looming, $520 isn't going to buy a decent pair of shoes in 40 years. Of course, since the tax is a percentage, I would be paying well more in tax than I would ever receive.

The only wrong answer here is to increase the tax. Even if we do nothing, at least the fund will exhaust itself, and then the program will be dead anyway...its just that a bunch of people will be screwed since they were dependent on it.

Re: How to Fix Social Security
 

[QUOTE=onlydarksets;434678]True, but economics isn't always the most realistic solution to a financial problem. You can't assume away the irrational actor when it comes to the types of people relying on social security.[/QUOTE]

Actually economics is exactly the most realistic way to fixing a financial problem. I think you mean mathematics isn't the best way. Economics does in fact at its core rely on people acting in a way that is predictable. Predictably good or bad depending on the situation.

Re: How to Fix Social Security
 

[quote=onlydarksets;434678][B]True, but economics isn't always the most realistic solution to a financial problem.[/B] You can't assume away the irrational actor when it comes to the types of people relying on social security.[/quote]Is there any particular example where this statement has actually held water?

I don't know one way or another, but it just [I]sounds[/I] incorrect.

Re: How to Fix Social Security
 

[QUOTE=angryssg;434618]I say privatize it so that the majority of your money goes into something that can build compound intrest, for one.

Secondly, if the govt decides to dip into it, there is a smaller portion that they would be able to touch.

Overall it is a win, win, win.

Economy, beneficiary, govt.[/QUOTE]

I voted privatize for the same reason you mention. Good post.

Re: How to Fix Social Security
 

[QUOTE=saden1;434670]strengthen the "death tax."[/QUOTE]

I gotta say this is the first time I have ever heard someone make an argument to strengthen this tax.

Re: How to Fix Social Security
 

[QUOTE=saden1;434670]Pull out of Iraq, decrease the defence budget to a quarter of what it is, start negotiating for drugs, repeal the Bush tax cut and strengthen the "death tax."[/QUOTE]

Which "Bush tax cuts" would you repeal? I personally like the reduced capital gains tax and think there is plenty of evidence suggesting they can help stimulate the economy. The reduced capital gains tax pumped billions into the economy. Moreover, the Bush tax cuts arguably did more to help the poor than the [URL="http://www.slate.com/id/2108201"]rich[/URL].

Our budgetary and economic woes have very little to do with the tax cuts, they have much more to do with excessive spending. While the Iraq War is undoubtedly draining our coffers, government mismanagement (e.g., pork-barrel spending and earmarks) are doing their damage as well. It's not a GOP-DNC issue either; the Republicans generally support the costly war effort and the Dems largely killed legislation targeting earmarks.

I personally would like to see less money go to the feds and force them to spend less. I guess that's evidence of my quasi-libertarian leanings.

As for my liberal side, I'd like to see people earning over X amount cut from the Social Security rolls. IMO, a guy with a net worth in the millions doesn't need a few hundred extra bucks a month, notwithstanding the fact that he pumped hundreds of thousands into the Social Security system.

Finally, to appease my conservative side, I'd like to at least experiment with some privitization. I find it somewhat revolting that I don't get to decide what to do with MY money. Frankly, it pisses me off that I give the government so much money and get such a crappy return. Don't I get SOME say and some choices in the matter?

End of rant filled with twists, turns, and tangents.

Re: How to Fix Social Security
 

[quote=FRPLG;434684]I gotta say this is the first time I have ever heard someone make an argument to strengthen this tax.[/quote]

My support for the "death tax" is based on a singular principle of fairness (not from your point of view I am sure). It's my belief that one shouldn't receiver tax free money even if it's coming from their parents. I see parents leaving money for their children as a form of payment and every time I get paid uncle sam takes his cut so why shouldn't he take a bite out of inheritance? Simply put I would like to see the money treated as if it were income and taxed progressively.

I suppose it should be noted that I have no intention of leaving my kids a windfall.

Re: How to Fix Social Security
 

[QUOTE=saden1;434695]My support for the "death tax" is based on a singular principle of fairness (not from your point of view I am sure). It's my belief that one shouldn't receiver tax free money even if it's coming from their parents. I see parents leaving money for their children as a form of payment and every time I get paid uncle sam takes his cut so why shouldn't he take a bite out of inheritance? Simply put I would like to see the money treated as if it were income and taxed progressively.

I suppose it should be noted that I have no intention of leaving my kids a windfall.[/QUOTE]

It already is taxed as income essenitally and taxed pretty damn stiffly,

Oh and I am glad I am not your kids I guess. :)

Re: How to Fix Social Security
 

[quote=saden1;434695]My support for the "death tax" is based on a singular principle of fairness (not from your point of view I am sure). It's my belief that one shouldn't receiver tax free money even if it's coming from their parents. I see parents leaving money for their children as a form of payment and every time I get paid uncle sam takes his cut so why shouldn't he take a bite out of inheritance? Simply put I would like to see the money treated as if it were income and taxed progressively.

I suppose it should be noted that I have no intention of leaving my kids a windfall.[/quote]


But the parents already paid taxes on the money once. And what about small businesses and family farms? Warren Buffet was before congress recently and he very selflessly offered his opinion that the death tax was important to insure that the rich paid their share. Then it was revealed that he has swooped in and bought up about thirty businesses that were distressed because of the burden placed on them by the death tax.

Re: How to Fix Social Security
 

[QUOTE=70Chip;434699]But the parents already paid taxes on the money once. And what about small businesses and family farms? Warren Buffet was before congress recently and he very selflessly offered his opinion that the death tax was important to insure that the rich paid their share. Then it was revealed that he has swooped in and bought up about thirty businesses that were distressed because of the burden placed on them by the death tax.[/QUOTE]

How were the businesses distressed by the death tax?

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434701]How were the businesses distressed by the death tax?[/quote]

The death tax is like 50% so if you inherit a business from your parents that is worth 3 million dollars, which could be a small appliance store for example, you may be hit with a ginormous tax bill. Now, obviously Buffet isn't buying small appliance retailers but you see the point.

[url=http://en.wikipedia.org/wiki/Estate_tax_(United_States]Estate tax (United States - Wikipedia, the free encyclopedia[/url])

[url=http://www.heritage.org/Press/Commentary/ed071306c.cfm]Buffett thinks this is one tax that's a good idea[/url]

[url=http://article.nationalreview.com/?q=OWM0MjZmZTQzMmM5ODFhNTY5MjQxOTQxMzNlOWQ3MzQ]Grover G. Norquist on the Death tax and Warren Buffett on NRO Financial[/url]=

Re: How to Fix Social Security
 

[QUOTE=70Chip;434702]The death tax is like 50% so if you inherit a business from your parents that is worth 3 million dollars, which could be a small appliance store for example, you may be hit with a ginormous tax bill. Now, obviously Buffet isn't buying small appliance retailers but you see the point.

[url=http://en.wikipedia.org/wiki/Estate_tax_(United_States]Estate tax (United States - Wikipedia, the free encyclopedia[/url])

[url=http://www.heritage.org/Press/Commentary/ed071306c.cfm]Buffett thinks this is one tax that's a good idea[/url]

[url=http://article.nationalreview.com/?q=OWM0MjZmZTQzMmM5ODFhNTY5MjQxOTQxMzNlOWQ3MzQ]Grover G. Norquist on the Death tax and Warren Buffett on NRO Financial[/url]=[/QUOTE]

I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434703]I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.[/quote]

It's not about it being "cold". It's about sensible economics and being able to pass something on to your children. The people who should be paying this tax are people like Buffet and Gates and their ilk. I can see a logic in the idea that Gates should have to give back some of his billions. Especially since his products suck balls. But I digress. These people are the ones who can afford to set up avoidance mechanisms and never seem to pay taxes of any kind. Most government regulation misses its target. The really, really big companies can absorb all these rules and fees and retrofitting all their bathrooms for transgendered whatever. It's their up and coming potential competitors who get nailed. What it is is Liberal Fascism.

Re: How to Fix Social Security
 

[quote=FRPLG;434698]It already is taxed as income essenitally and taxed pretty damn stiffly,

Oh and I am glad I am not your kids I guess. :)[/quote]


OK, so what's the real difference between leaving your money to a total stranger vs leaving it for your children? Suppose I leave the money to someone that isn't my child? Should it be taxed? Should preferential tax treatment be given to your own kids?

I'm sorry but passing down wealth without taxing it is akin to a pyramid scheme. People at the top of the scheme will perpetually be at the top and the income gap in this county will grow exponentially. Not only that but a larger burden of the tax bill will be shouldered by the middle class.

Finally, I assure you you would do well to be my kid. Having a wealthy dad is awesome I tell you :) My kids will be well taken care of. When they are ready to go to college or buy their first car/home I will be there for them. I will prepare them to succeed in this world, I just won't hand them my estate upon my death. The estate is already earmarked for charity.

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434688]Which "Bush tax cuts" would you repeal? I personally like the reduced capital gains tax and think there is plenty of evidence suggesting they can help stimulate the economy. The reduced capital gains tax pumped billions into the economy. Moreover, the Bush tax cuts arguably did more to help the poor than the [URL="http://www.slate.com/id/2108201"]rich[/URL].

Our budgetary and economic woes have very little to do with the tax cuts, they have much more to do with excessive spending. While the Iraq War is undoubtedly draining our coffers, government mismanagement (e.g., pork-barrel spending and earmarks) are doing their damage as well. It's not a GOP-DNC issue either; the Republicans generally support the costly war effort and the Dems largely killed legislation targeting earmarks.

I personally would like to see less money go to the feds and force them to spend less. I guess that's evidence of my quasi-libertarian leanings.

As for my liberal side, I'd like to see people earning over X amount cut from the Social Security rolls. IMO, a guy with a net worth in the millions doesn't need a few hundred extra bucks a month, notwithstanding the fact that he pumped hundreds of thousands into the Social Security system.

Finally, to appease my conservative side, I'd like to at least experiment with some privitization. I find it somewhat revolting that I don't get to decide what to do with MY money. Frankly, it pisses me off that I give the government so much money and get such a crappy return. Don't I get SOME say and some choices in the matter?

End of rant filled with twists, turns, and tangents.[/quote]

Blessed are those who happily count their peanuts. How do you propose we tackle [URL="http://www.brillig.com/debt_clock/"]this monstrosity[/URL] on top of tax cuts? It's easy to say cut spending but from where?

Re: How to Fix Social Security
 

[QUOTE=saden1;434709]OK, so what's the real difference between leaving your money to a total stranger vs leaving it for your children? Suppose I leave the money to someone that isn't my child? Should it be taxed? Should preferential tax treatment be given to your own kids?

I'm sorry but passing down wealth without taxing it is akin to a pyramid scheme. People at the top of the scheme will perpetually be at the top and the income gap in this county will grow exponentially. Not only that but a larger burden of the tax bill will be shouldered by the middle class.

Finally, I assure you you would do well to be my kid. Having a wealthy dad is awesome I tell you :) My kids will be well taken care of. When they are ready to go to college or buy their first car/home I will be there for them. I will prepare them to succeed in this world, I just won't hand them my estate upon my death. The estate is already earmarked for charity.[/QUOTE]

IT ALREADY IS TAXED. ANd I would say my personal opinion is that if you can't see the difference between leaving family money to your kids rather than a starnger then there is no way we will ever agree on this.

Re: How to Fix Social Security
 

[quote=GTripp0012;434682]Is there any particular example where this statement has actually held water?

I don't know one way or another, but it just [I]sounds[/I] incorrect.[/quote]

Outside of privatization, sure - it happens everyday. People act irrationally or as short-term discounters, and it costs them more in the long run. Haven't you ever acted out of spite? If you were acting as economic theory would predict, you would not have acted that way in most cases.

In this case, it would depend on the implementation of privatization. If it's partial, it might work. If it's full privatization, I believe it assumes too much about the average population in America. Many people (especially in past generations, but also in this generation) simply do not take ownership of their retirement - that's completely irrational and short discounting. We can place the onus on them by fully privatizing, and then for those that fail say "well, we gave them the tools, even though we knew many would do nothing with them" or we can institute social policy to protect against it.

I'm not saying it won't work - I'm just saying economic theory makes assumptions. You can assume away friction in physics, but it doesn't mean it isn't there.

Re: How to Fix Social Security
 

Well just because it's privatized doesn't mean you can't set a minimum mandatory contribution as part of the program.

Privatization refers mainly to private investment firms offering the investment options, not simply that everyone is responsible for their own retirement account.

Re: How to Fix Social Security
 

I know. I was talking about ownership in the sense of investing, not contributing.

Re: How to Fix Social Security
 

Privatize.

I wrote a 16-page paper on Privatizing SS in college. It was a good idea THEN and still is.

Congress (specifically the one party that created it) was incredibly selfish for shooting this down when President Bush proposed it. They don't want their program to look like a failure, even though it clearly is. So, instead of being responsible, they decided to block any change to their failed program for political reasons, in the process forfeiting any chance for a retirement for the current generation of workers and also our children.

I received my SS statement in the mail last week, the one they mail you annually to show you what your benefit will be upon retirement. I noticed that it stated that if I work until 67, I can receive full benefits. That used to say age 65. I expect the retirement age to keep going up and should be around 72-75 by the time I retire, not that any benefits will be there for be.

Anyone with common sense can see that SS in its current state CAN not work. With the retirements of the Baby Boomer generation, there will be more people withdrawing funds than working to provide them. The ratio used to be 15:1 (workers:retirees). Now the ratio is estimated to be about 2:1 and still falling.

There never was a Social Security Trust Fund as claimed. The money has always been tapped into and shifted to the general fund for spending on random bills.

The ability for people to save for their own retirements is the only workable solution for future generations. Being able to have the option to take the insane SS tax amount and investing as we wish is just smart. You don't need to have any knowledge in the stock market, because even playing it safely has ALWAYS yielded a 10% return historically.

Those who choose to gamble with the SS will just have to take what (if anything) they are able to get. There will need to be a transition period so that workers now nearing retirement can still get the SS funds they were stupidly promised by an irresponsible government, but afterwards, everyone should be required to invest for their own retirements.

The country of Chile has the best plan and example of how successful a full privatization can be.
[url=http://www.cato.org/pubs/journal/cj15n2-3-1.html]EMPOWERING WORKERS: THE PRIVATIZATION OF SOCIAL SECURITY IN CHILE[/url]

Re: How to Fix Social Security
 

[quote=Schneed10;434724]Well just because it's privatized doesn't mean you can't set a minimum mandatory contribution as part of the program.

Privatization refers mainly to private investment firms offering the investment options, not simply that everyone is responsible for their own retirement account.[/quote]

It should simply be the current FICA tax %, at least to start.

We wouldn't be missing any money since it was being stolen anyways and it's probably a decent % to ensure a good retirement.

If anyone wants to contribute extra, that is their choice.

Re: How to Fix Social Security
 

[quote=dmek25;434609]i say leave it alone. [B]the money that is earmarked for social security benefits is used for strictly that[/B]. the main issue, in my opinion, is that every time the gov't gets into a bind for one of their programs, they dip into the S.S. fund[/quote]

You've actually bought into that lie, huh? :D

Wait, then you contradicted yourself with a true statement.

Re: How to Fix Social Security
 

[quote=FRPLG;434719]IT ALREADY IS TAXED. ANd I would say my personal opinion is that if you can't see the difference between leaving family money to your kids rather than a starnger then there is no way we will ever agree on this.[/quote]

We'll just have agree to disagree because the way I see it, the father has been tax and the kids receives a tax free pay check. Also, from the state's perspective I don't think there should be an ounce of a difference between giving your money to your kids or to strangers.

Re: How to Fix Social Security
 

Well I'm certainly learning a lot, and I hope others are too. I tend to lean toward the "allow people to take a portion of the tax and invest it into a private account" school of thought.