Bush's plan to turn America into an ownership society

Craven de Kere wrote:

The outlay issue is a tough one to win in America, winning it by "starving the beast" (cut taxes, as this is an easy political win and increase discretionary spending in popular budgets) is something to worry about.

The way things are being done seems to be headed toward total elimination. I actually think that's a good idea, but only if it's done above the table, not by starving the beast (the nature of starving the beast as a methodology is such that some of the beastlets starve too).

We all heard a lot of talk during the campaign about "passing the cost on to our children" for what we do today. This is one case where we can end that. Most of us are paying for our parent's Social Security right now and if the program continues as it is our children will be paying for ours and so on.

You are right that the issue will be a tough one. I, myself, would prefer an increase in general taxes to cover the cost of doing it though.

0 Replies

georgeob1 wrote:

I wonder if it is just 'misunderstanding'.

I'm certain there is more to it than that, but one of the big problems I see is the mistaken notion that people have of paying into a secure trust fund.

Quote:

The feeling of entitlement is very powerful, and people can be quick to assume that promises have been given when in fact they have not, and, indeed, when they cannot possibly be fulfilled.

IMO, the feelings referred to on this thread have to do with thinking they have paid for said "entitlement". People feel betrayed in that it doesn't entitle them to what they think it does and I ascribe a lot of that to not understanding the "pyramid scheme" that Social security is.

It is a house of cards, but when it's taken down it should not be at the cost of starving the beastlets, as this is a scam foisted on the population by its own government and a involuntary one at that.

fishin' wrote:

I, myself, would prefer an increase in general taxes to cover the cost of doing it though.

Same here, though I suspect the primary fear from fiscal conservatives is that the increase in income will delay the change in outlay or be used to justify increase in outlay.

0 Replies

fishin' wrote:

Craven de Kere wrote:
The outlay issue is a tough one to win in America, winning it by "starving the beast" (cut taxes, as this is an easy political win and increase discretionary spending in popular budgets) is something to worry about.

The way things are being done seems to be headed toward total elimination. I actually think that's a good idea, but only if it's done above the table, not by starving the beast (the nature of starving the beast as a methodology is such that some of the beastlets starve too).

We all heard a lot of talk during the campaign about "passing the cost on to our children" for what we do today. This is one case where we can end that. Most of us are paying for our parent's Social Security right now and if the program continues as it is our children will be paying for ours and so on.

You are right that the issue will be a tough one. I, myself, would prefer an increase in general taxes to cover the cost of doing it though.

Same here. I think that would be the best solution at this point.

0 Replies

Craven de Kere wrote:

georgeob1 wrote:

I wonder if it is just 'misunderstanding'.

I'm certain there is more to it than that, but one of the big problems I see is the mistaken notion that people have of paying into a secure trust fund.

Quote:
The feeling of entitlement is very powerful, and people can be quick to assume that promises have been given when in fact they have not, and, indeed, when they cannot possibly be fulfilled.

IMO, the feelings referred to on this thread have to do with thinking they have paid for said "entitlement". People feel betrayed in that it doesn't entitle them to what they think it does and I ascribe a lot of that to not understanding the "pyramid scheme" that Social security is.

It is a house of cards, but when it's taken down it should not be at the cost of starving the beastlets, as this is a scam foisted on the population by its own government and a involuntary one at that.

fishin' wrote:
I, myself, would prefer an increase in general taxes to cover the cost of doing it though.

Same here, though I suspect the primary fear from fiscal conservatives is that the increase in income will delay the change in outlay or be used to justify increase in outlay.

Scammed is exactly how I feel about it, which is why I'm so pissed off. Hell, we didn't even see it coming and the least they could have done was to warn us. The money was taken out of our checks faithfully without us haing any choice in the matter, when we could have been investing that money and cover our own asses for the future. The government not only scammed us, but they lied to us and left us with no way of figuring out how we are going to survive in our elderly years, which doesn't consist of working right up to our dying days.

0 Replies

georgeob1 wrote:

Craven,

I wonder if it is just 'misunderstanding'. The basic concept of the wealth transfer is simplicity itself - not much there to tax the average mind. Yet even this thread has revealed the powerful emotional factors that get in the way of understanding and acceptance. The feeling of entitlement is very powerful, and people can be quick to assume that promises have been given when in fact they have not, and, indeed, when they cannot possibly be fulfilled. Sadly politicians are quick to exploit this, and portray themselves as the protector of those who will not choose to understand and accept.

I believe the Bush plan involves some degree of bailout from the Federal Treasury to protect the benefits of those who choose to stay in the system. However even with this, I believe it is inevitable that the age for full benefits will be increased to 70 or 72 years. Ity was hardly noticed a few years ago when the entitlement age was increased from 65 to 67.

It was more than just a few years ago. I was told about this over 20 years ago when I was 17 or 18 and I assure you that I noticed it. Are you telling me that if it was you that was effected by this, that you wouldn't notice it? It was bad enough when you suggested retirement payouts be at 70, but now you're up to 72 and that shocks me! You never did answer my question about the people who have done labor work their entire lives that couldn't possibley do it up to your suggested advanced age of elegibility. For you to even suggest this tells me that these suggestions would have no effect on you at all. I think it's safe to say that you will retire and collect your benefits at 65, or even 62 if you're willing to settle for less, so how can you so easily make these suggestions when it doesn't concern you? If people have to work their entire lives without being able to look forward to retirement, what on earth would they have to look forward too?

0 Replies

I can't imagine the mechanics, plumbers, construction workers, steel workers, fishermen, city workers road crew, mason workers, farmers, land scapers, carpentars, tractor trailor truck drivers, mill workers, lumbejacks, etc.... having to do this work until they are in their 70's. What are these people suppose to do?

0 Replies

I'm not even attempting to answer those questions, Montana. My opinion that the benefits eligibility age will have to be increased is just that - an opinion. It is simply not politically possible for the government to raise the payroll tax high enough to pay the benefits of a now larger number of retirees collecting benefits for a longer time. The only alternatives are benefits cuts or delayed inception of benefits. People live longer, healther lives now --- 10 to 15 years longer than when Social Security was introduced. Moreover they can acquire new skills. One must work to survive or save enugh on which to retire.

I have been paying in to our system at the maximum rate for longer than you, and continue to do so. Had I invested those tax payments in the stock market I would have amuch better nest egg than would be provided by Social Security.

It would be interesting to learn if you have any constructive suggestions as to how the government might solve this problem. By the way nearly every developed nation has this problem, France and Germany are particularly hard hit by it.

0 Replies

George

Why won't you attempt to answer my questions? Is is because I'm right?
I wish you would attempt to answer my questions because my questions are ones that need to be answered. The solution may not be as easy as mine, but it's certainly not as easy as yours! We were lied too and we now have to figure out how to survive in the future because of it. I still would like you to answer my question as to how the labor workers are suppose to work until they are 70 or 72 years old???

0 Replies

George
May I ask you at what age you will be planning on collecting your social security?

Just out of curiousity of course!

0 Replies

My suggestion to this problem is to increase taxes and for the government to stop tapping into the SS funds. The governments tapping into these funds are the reason why we're in this position in the first place.

0 Replies

georgeob1 wrote:

I have been paying in to our system at the maximum rate for longer than you, and continue to do so. Had I invested those tax payments in the stock market I would have amuch better nest egg than would be provided by Social Security.
.

That statement is patently false because 1) You don't know what your total SS benefit would be and 2) You only have a general idea what return you would have gotten on your investments. 3) You are discounting Social Security disability benefits. You must have crunched some numbers to come up with this theory, please show them to us. The fact is that your Social Security benefit would exceed what you would have gotten investing privately at some point after collecting benefits for a number of years.

Social Security is one of the most successful programs ever devised by the government. In effect, it protects people against themselves. Without it, many people would find themselves destitute at retirement age and would wind up on the public dole anyway. At least this way, we get them to pay for it.

0 Replies

Harper wrote:

georgeob1 wrote:

I have been paying in to our system at the maximum rate for longer than you, and continue to do so. Had I invested those tax payments in the stock market I would have amuch better nest egg than would be provided by Social Security.
.

That statement is patently false because 1) You don't know what your total SS benefit would be and 2) You only have a general idea what return you would have gotten on your investments. 3) You are discounting Social Security disability benefits.

But if you look at a chart of the Dow Jones index over the last 70 years, you will see that the growth in its value was so fast that George's statement holds no matter what. Uncertainty over Social Security benefits, or the specific investment George might have chosen instead of the Dow, or even disability benefits, are all small change in comparison. George's statement is not just not patently false, it is provably true.

0 Replies

Thomas - I'm not an economist either, but wholly agree with both you and georgebob1. I would love to have a portion or all of my payroll taxes to invest on my own. I guarantee you I would retire much wealthier than I would by relying on the current system.

Harper is wrong.

0 Replies

Montana,

No one lied to you. Instead you chose to believe a comforting illusion.

I see no more difficulty in a person working today at age (say) 68 than in 1936 at age 64, given the enormous improvements in both life expectancy and public health that have occurred since then. The number of jobs today requiring hard physical labor is far less today than in 1936. (Have you visited a construction site lately?). The sharpest - and most critical - member of the Board of my company is 89: I work hard to stay ahead of him. In today's economy most working people change career paths or occupations at least once in their working lives. For most people continued work is likely better for their overall quality of life than inactivity. For those who cannot work the SS disability benefits will remain.

At last you have revealed your prescription for keeping the system in operation - raise taxes on residents of the U.S. who are still working. The economic effects of this will be reduced economic activity, higher unemployment, and reduced adaptability in industry. Politically the attempt to impose these taxes may either fail, or lead to new restrictions on the number of years one must work and contribute to become eligible for benefits and new restrictions on benefits for immigrants and expatriates. Bottom line is workers here may be unwilling to send you their money.

There is a worksheet on the SS website that will enable you to quickly estimate your benefit in today's dollars. You can either rely on the purchasing power iof that amount today or use the historical cost of living escalators to estimate the future benefit. I plan to apply for benefits at age 67, when I first become eligible for the maximum amount. Because I have other income, I will also pay income taxes on the benefits - go figure that. Because you live outside the U.S. your net-of -taxes benefit will, as a result, higher than a worker here of the same age who is still contributing to the system and whose benefits will also be taxed when he gets them.

Overall you are doing very well here. You are certainly not a victim,

0 Replies

georgeob1 wrote:

At last you have revealed your prescription for keeping the system in operation - raise taxes on residents of the U.S. who are still working. The economic effects of this will be reduced economic activity, higher unemployment, and reduced adaptability in industry. Politically the attempt to impose these taxes may either fail, or lead to new restrictions on the number of years one must work and contribute to become eligible for benefits and new restrictions on benefits for immigrants and expatriates. Bottom line is workers here may be unwilling to send you their money.

Having stated my support for privatizing Social Security, I now feel compelled to qualify it by adding that this particular problem will exist in the privatized version too. There are two reasons for this.

(1) The state must continue to pay out existing Social Security recipients, but doesn't receive the funds for it anymore because payroll taxes now go into private accounts. The difference has to be made up in debt, and the state will have to raise taxes to pay interest on that debt. Ideally, once Social Security is completely privatized, the "Social Security" position in the federal budget will be down to zero, and the "Interest on national debt" position will be up by whatever the current level of Social Security payments is. So the whole process is budget neutral, and to a first approximation, government receipts and payments will be the same as without privatization. That includes future rises in the contributions - to - benefits ratio, which leads us to the next point.

(2) The changing demographics will continue to have the same impact as they have now. They will just take a different way through the system. Under the current system, the aging population increases the ratio of payroll taxes to Social Security benefits on a cash-in, cash-out basis. Under a privatized system, the aging population increases the number of old people with money on the bank and decreases the number of young people with enterprises to invest in, both of which causes interest rates to fall. The consequence is that people will have to save more to get the same pension, or they will receive lower pensions on the same saving rate, or they will have to retire later -- just as it will happen under the current system. Hence, I distrust arguments that rely on mere accounting gains to promise easy money. In my view they're just another fraudulent get-rich-quick scheme. There is no free lunch, and Social Security is not an exception.

But there is a cheaper lunch. Social Security privatization creates real property rights in people's pensions. It transforms a federal debt that isn't in the books into a federal debt that is, thereby making it harder for politicians to pretend it isn't there. Finally, it moves the responsibilty of investing people's money from government officials, who tend to do it badly, to the citizens, who will either do it better or hire someone to do it better for them. And these three arguments are good enough for me to support the privatization of Social Security.

(For a more extensive account of the honest case for Social Security privatization, I recommend this Milton Friedman article.)

0 Replies

I fully agree with Thomas' observations above. I also found the Friedman article both familiar and refreshing. (Now there's a great choice for an avatar - a much more accomplished, and less discredited figure than the pop-eyed apologist, whose insolent mug offends the eye on Thomas' posts.)

The underlying demographic change, which as Thomas notes adversely affects both private equity and public social insurance schemes -more or less equally , itself points to the wisdom and necessity of extending the working lives of people in the modern world - no matter what type of social insurance the nation uses. These issues are now prominent on the political agendas of the United States, Germany, and France - as likely other modern nations as well. It will be interesting to compare the ongoing political debates in these countries on the issues.

0 Replies

george
Where do you get the idea that my benefits will be higher than someone my age who is still in the US? That is just not true. How can you say that I'm doing well when I may see nothing at all. You say that workers are not willing to send me their money, but the government sure as hell had no problem taking mine! You act as if what I paid out for 24 years means nothing simply because I don't live there anymore. 24 years is half my working life and if I do get anything, believe me, it won't be much. If raising taxes is such an issue, then maybe the government should think about taking away the SSI from all the alcoholics who don't contribute a damn thing. They should also consider cutting the funding for social services who claim to protect children, when they do more harm then good. Most importantly, they should stop attacking countries for no reason, which costs hundreds of billions of the tax payers money.

0 Replies

A member of the board at your company may be 89 geaorge, but I'd be willing to bet that he/she is not lugging roofing shingles up a ladder all day, paving our roads, pulling up heavy lobster traps, etc... You can talk about how people change jobs all you want, but it doesn't change the fact that some people always did labor work and it's all they know. You can't take a fisherman and put him behind a desk as he/she is not made that way.

0 Replies

Montana,

Social Security benefits are subject to the income tax if you are a U.S. resident. They are tax-free if you are not. Hence the difference.

All such government run programs involve inequities for some. The person who worked alongside you for those 24 years is styill in the U.S. and still paying into the system, but his/her benefits will be no higher than yours. Worse for them they must pay income tax on the benefits. This too is aqn inequity.

I agree there is lots of foolish waste in governmentr social programs.

0 Replies

george
Ok, I see what you mean, but it doesn't give me more because I have to pay taxes on that money here instead of there. Anyway, I know we will never agree on this issue, so I extend my arm out to shake your hand and will see you on the trails.

0 Replies

Bush's plan to turn America into an ownership society

Related Topics

Quick Links

My Account

able2know