And yet another phony crisis

POSTED BY: SignyM
UPDATED: Saturday, January 29, 2005 01:35
VIEWED: 7733
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CONNORFLYNN

Thursday, January 13, 2005 1:46 PM

Quote:
Originally posted by rue:
Every economist and fund manager I have read said that SS is just fine, probably the only solvent portion of the Fed gvnmnt at this point.

I do wonder about those people who think that dubya says anything worth paying attention to.

PS How dubya and Greenspan can wring their hands and moan over a sound program, and remain unfazed over the deficit (500B and counting), exposes the magnitude of their hypocracy.

Just pray that the funds and what not that you invest in don't turn into another Enron or Tyco or Adelphia. There are 1000's of folks who lost their life savings due to "Retirement investments" and are now left to live on SS only.

Social Security has been a problem for over 20 years. There's nothing new there except for procrastination. The problem I've read about is the misuse of SS funds and the poor investing of many of those dollars. I don't think privatizing is the answer. I think better management of SS is the answer and increased taxes in that regard.

As a Socially Liberal, Fiscally Conservative person..even I believe it is up to all of us to make sure our elderly live out their lives in Dignity. So far all I've seen is the continued mismanagement of SS and the increase of the retirement age, essentially disenfranchising a large portion of the working class blue collar and poor. Many minorities and blue collar folks only have Social Security to depend on when the become too infirm to work. I don't know about you..but I doubt I will live to be 70 let alone be able to work until I'm 70, when I am eligible for full benefits.

Personally..the 2 big ticket issues are Prescription drugs/Health Insurance (and the raping of Americans by those companies and the government who supports them) and Social Security. Right now if I were to retire today with FULL benefits, I would receive less then $700 a month. Thats roughly $150 a week. That amount alone wouldn't cover my medication let alone allow me to eat, heat my home (if I even own one at that point), save for my funeral (yes thats a pretty hefty expense). We won't go into benefits if you retire early..it's just too damn depressing.

It's a huge danger in my opinion to spin this as an overexaggeration. Social Security is a real problem screwed up and screwed with by both parties for decades. Alan Greenspan is no liar when it comes to this.

I'd be interested to know where you read that the problem with SS is a fabrication.

Heres an interesting article and site if you're interested. It exposes alot of the issues with privatization , which I'm extremely against for a variety of reasons..foremost I don't trust big business or the hacks who control the stockmarket.

http://www.socsec.org/publications.asp?pubid=324

SIGNYM

Thursday, January 13, 2005 3:58 PM

SgtGump- About Jesus' stand on taxes, I seem to recall "Render onto Caesar the things that are Caesar's..." Obviously, you're reading from a different Bible!

But your comment deserves a serious discussion. Unfortuantely, I don't have time right now. TTUL!

NEUTRINOLAD

Saturday, January 15, 2005 4:20 AM

Please, just amongst us Browncoats, can we please agree, just for our own discussions, to stop pretending that Social Security is a retirement program and not a well-intended safety net for the elderly and infirm.
I would take it as a kindness.

SERGEANTX

Monday, January 17, 2005 1:05 AM

Quote:
Originally posted by RocketJock:
Truth to tell, at this point if GWB said the sky was blue, I'd ask for a second opinion.
.../i]

It doesn't matter. If he said it was limegreen, fifty-two percent of us would buy it hook, line and sinker. Ain't democracy grand?

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

CONNORFLYNN

Monday, January 17, 2005 2:16 PM

Quote:
Originally posted by NeutrinoLad:
Please, just amongst us Browncoats, can we please agree, just for our own discussions, to stop pretending that Social Security is a retirement program and not a well-intended safety net for the elderly and infirm.
I would take it as a kindness.

Originally it may have been a well-intended safety net.. though I'm not exactly sure I understand your definition of "Well-intended safety net".

The cost of living and lifespans now make it a retirement plan for anyone who is forced to live week to week. I'd be curious to find out what we should do with folks who made $300 a week takehome all their lives..paid their bills on time, yet couldn't seem to put any cash away. The days of Pension plans are over..have been for almost 10 years. So that option is gone. Since 401k programs only allow so much to be put away against retirement based on yearly income..I guess those who live week to week are screwed in that option too, because most can't afford to put 15% away each week. Hmm..even if they did put that much away and lived on Macaroni and Cheese and Hotdogs..whats that workout to? oh yeah..$45 a week..so now they have to live and pay their bills on $255 a week while saving up a measly $2300 a year (Big dollars there). So when they hit retirement age if they saved for 20 years, hmm..maybe $100,000(IF They don't get screwed by the fund managers and the stockmarket). I wonder how long most folks could live, with high Insurance and drug costs and increasing costs of living, not to mention property taxes etc..etc..

I guess the only option left is to spend my last $20 on a good bottle of wine and a nice steak, lock the doors, run a warm bath and slit my wrists. It's better then the alternative..eating catfood and rationing my meds at 1 a week instead of 1 a day, all while waiting for the government to come foreclose on my home because I can't afford to pay my taxes. I wouldn't want to be a burden on the society I worked so hard for during my life.

NEUTRINOLAD

Tuesday, January 18, 2005 6:49 AM

Connorflynn, I think you're correct in every particular. Most people wouldn't take such an unsentimental look at it. And that's the source of my frustration, I think.
It seems to me that the big public debates are couched in terms that can only be considered melodramatic fantasy, rather than grounded in the facts, the debate over Social Security especially so.
If people consider Social Security a retirement plan then that perception needs to be corrected. One cannot begin to solve a problem until it is properly defined. If a definition of a problem is proposed, and that definition is based upon clearly discernible fallacy, then that definition should be rejected.
I agree that Social Security is a bureaucracy that could benefit from radical reform. I think the proposals I have seen in the last 2 decades, from both sides of the aisle, have read like the addled dreams of an actuary with dementia.

And that's your daily dose of onerous pedantry. Thanks for reading!

FINN MAC CUMHAL

Tuesday, January 18, 2005 7:08 AM

I’m not sure what the problem is with calling social security a retirement plan. That is effectively what it is, a socialized retirement plan. And like all socialism it suffers horribly from bureaucratic inefficiency. I also don’t understand this issue Liberals and Democrats seem to have with the ‘crisis’ of Social Security. This seems like something that Liberals and Democrats would want to get behind; after all when social security starts on the downward spiral to insolvency it will be those poor elderly (whom Democrats claim to be the political savior of) that will suffer. When Social Security checks start coming in 20% to 40% lighter, is that when Democrats will start screaming crisis? When it’s too late for any economic solution? My guess is, at that point this “phony” crisis will magically transform into a real crisis that demands people my age to fork over even more of our hard earned money to pay for a crisis the government should have fixed 40 years earlier. This is why I’m not a Democrat.

SOUPCATCHER

Tuesday, January 18, 2005 9:56 AM

Social Security is an entitlement program - probably the most successful entitlement program in the history of our country. If you need it, it's there. As Connorflynn pointed out, the sad fact is that a higher and higher percentage of the eligible population needs it nowadays. It is also one of the triumphs of liberalism - at least as it was practiced in this country circa the New Deal. I do not begrudge one penny that I pay in social security taxes. I always look at it as my way of saying thank you to the generation that grew up in the Depression and fought WWII (and the succeeding generations). They took care of business before I was born. Now, if they need it, I got their back.

*stops waving the pom-poms*

Are there problems with Social Security? Nothing that minor changes won't fix. Is there a crisis? Nope. Nothing even remotely close to what happened in the seventies and eighties when, for more than ten years, Social Security paid out more than it took in. In 1983 Greenspan and Reagan made a major overhaul that resulted in a surplus that was put in a trust fund to be saved up for the retirement of the baby boomers. Where did the extra money come from? It came from the baby boomers themselves, and more precisely the middle class, shouldering more of a tax burden. It was a good fix. So from 1983 until the present Social Security has taken in more than it paid out. In the next decade, with the retirement of the baby boomers, Social Security will once again pay out more than it takes in. Crisis? Nope. We just have to start dipping into the trust fund - that's why it was created in the first place. Whaddya mean there's no money in the trust fund? What are all these crappy IOUs doing in here? Oh, you mean the government borrowed all the surplus? Multiple trillions of it? Well they better pay it back. And there's your crisis. Get rid of Social Security and you just chop trillions off the national debt - not the deficit - the debt.

What's the other crisis being talked about? Well, according to the projections of the actuaries, benefits will have to be reduced in a little under 40 years. And the privitization will supposedly fix that. But from what I've read, to get the less than 40 year pessimistic numbers you have to assume economic growth well under the average, and to make privitized accounts pay out more than the current form of Social Security you have to assume economic growth either at the average or above. In other words, Social Security benefits will have to be reduced because we expect lower than average economic growth but privitization is a better option because we expect at least average economic growth. Huh? Smoke and mirrors, baby, smoke and mirrors.

A couple of closing thoughts...

The actuaries keep pushing back the date at which benefits will have to be reduced. I think it went from right around 30 years to closer to 40 over the past decade (going off the top of my head here on the actual numbers, that's why I'm rounding off). So the crisis point is getting further away from us.

None of this is helped by the fact that recent and current Presidents and Presidential candidates have all talked about Social Security being in a crisis (Clinton, Gore, and Bush). It's a guaranteed vote getter, "Vote for me, I'll save Social Security. Vote for the other guy and the checks stop coming." But the problems that need to be tweaked are nowhere near the crisis stage, and haven't been for a quarter century.

Another thing I keep hearing is that Social Security is inefficient, a huge monstrous bureaucracy. But I've never seen numbers to prove this. We have a seventy year old program that takes in and pays out a huge amount of money every year to millions of people. How efficient is it compared to other government programs? I don't know. I'm just curious is all.

* I'm currently slogging my way through the recent New York Times Magazine article relating to this debate. So my opinions may change in the next day .

---------------------
"What sort of

CONNORFLYNN

Tuesday, January 18, 2005 1:21 PM

Well..I would agree with you Soupcatcher, if the "Trust Fund" still existed. As I understand it..the Trust fund has been depleted to fund other governmental projects from the Bush 1 /Clinton Years and then we have the now infamous tax cuts which makes those kinds of little nest eggs all the more tantalizing to the Government and all the more likely to vanish.

I'll have to see if I can find a link or 2 to some articles that got into how the government was "Borrowing" from SS to pay for some extraneous programs. That is why both Dems and Republicans have shouted crisis through the years. They keep "Borrowing" and not enough is coming in to repay it. They just aren't coming out and being honest as to WHY Social Security is in the position it is. So far all I've seen is a bunch of smoke screens put up by both Dems and Repubs..because ultimately the current folks in Senate and Congress will be held responsible (after all..most have been there for over a decade or more and know where the money for their extraneous projects has been coming from).

They need to fix the management issues first..then worry about how and if they need to change the entire program.

Like I said before..I'm not so worried about myself. At the rate they keep raising the retirement age..by the time I reach 70( if I do hehe ), the age to receive full benefits will be 92 hehe. I guess thats one way to fix it..never pay it out at all. I'm just concerned about the folks who are retired and retiring over the next decade or so.

FINN MAC CUMHAL

Tuesday, January 18, 2005 3:55 PM

The government as a whole is inefficient. It often pays its employees too much and pays them for doing what it doesn’t need done. As for whether Social Security is more or less inefficient then the government in general; I don’t know.

Social Security is fundamentally inefficient. It depends on the number of people paying in for one thing. This is extremely inefficient and despite efforts to pay into a surplus, Social Security continues to be in danger of insolvency. It cannot sustain itself under its own weight.

In 1950, 1% of income went to Social Security. By 1990 that number had reached 7.65%. An increase of almost 800% over the course of 40 years. If that money were invested it could expect to quadruple in 40 years. So not only is it inefficient in that we see a constantly increasing level of subsidization, which is at best a temporary fix, but we also see that Social Security is not benefiting from economic growth.

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