Social Security to start cashing Uncle Sam's IOUs

Prof is absolutely right.

Fica is just a tax wrapped in package called a "retirement benefit". Basically, you give the government $1, and in 40 years, they give you back a nickel.

And it STILL went bankrupt. How is that possible?

RightinNYC said:

Are you serious? That's sort of how a free market works.

Using your logic, why would any company pay you more than $5/hour? I mean, as long as every company does that, then it's not possible for you to make more.

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The free market works by people and business's paying what they have to pay for items or services they want.

No good business would pay more in salary or benifits then they would have to according to the market for that particular position, modified by the skill and experience of the particular person in that position

If you were willing to work in a particular position for $60 grand, the company will not just give you the extra 6.2% from their part of FICA. THey would have to see the need to pay it in order to keep you at the position. Otherwise they would keep it and make more money for the owners. To do otherwise would be a betrayal to the shareholders of the company. Providing wages out of charity is not what a company should be doing

The Prof said:

and even at THAT the system's bankrupt

the great jack kemp, quarterback of the buffalo bills and loser bob dole's veep candidate in 96, made soc sec reform his #1 baby probably in honor of so many of his heroic teammates

kemp was always talking about the massive ripoff soc sec stole from african americans

may he rip

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Social Security is not bankrupt, it has a couple of trillion in reserve

Seconly Social Security is not a retirment program, it is a program that was designed to keep Americans from abject poverty when they retire.

However Americans continued to vote to expand it to cover more and more things and people

at $500 a month for some poor schmo making 40K it better not be

it better not be insolvent, swallowing whole the largest contributions of those who don't make it to the sneakily advancing retirement age

it better not be bankrupt with that kinda money coming in

but unfortunately it is

and you know better

upside down starting in 2016

the boomers

the unfunded liabilities

the out years

the need to raise the tax (again), raise the retirement age (again), lower benefits (again), or some combo thereof (again)...

Report Warns of Insolvency for Social Security, Medicare - washingtonpost.com

FIVE HUNDRED DOLLARS A MONTH FOR RETIREMENT! FOR OUR POOR GRANDKIDS JUST STARTING OUT!

and there aint gonna be squat there for em by the time they get there

a terrible tragedy, the scale so great

mao was a much bigger ripoff but his victims just didn't have so much for him to take

soc sec is the greatest boondoggle in human history

Lord Tammerlain said:

The free market works by people and business's paying what they have to pay for items or services they want.

No good business would pay more in salary or benifits then they would have to according to the market for that particular position, modified by the skill and experience of the particular person in that position

If you were willing to work in a particular position for $60 grand, the company will not just give you the extra 6.2% from their part of FICA. THey would have to see the need to pay it in order to keep you at the position. Otherwise they would keep it and make more money for the owners. To do otherwise would be a betrayal to the shareholders of the company. Providing wages out of charity is not what a company should be doing

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I think you're misunderstanding how this works.

If a company is paying you $100k under the current system, they actually think your work is work $106k. That's what they set aside to compensate you and to keep you from going somewhere else. If a competitor wanted to hire you away and pay you $110k, they would be setting aside $117k to do so.

If the SS tax were placed entirely on employers, then the $12k cost would come out of what they were prepared to pay you - meaning you'd take home around $94k and the competitor would be willing to offer $103k.

If the SS tax were placed entirely on employees, we'd see the reverse - the company could offer you the entire $106k, while the competitor would be free to up that to $117k.

The company is not offering you charity, nor are they doling out any extra money. In all three scenarios, they're offering you the exact same compensation - the only difference is who actually writes the check to the government.

absolutely, any payroll tax is a downward pressure on pay, on wage, it should be obvious

RightinNYC said:

I think you're misunderstanding how this works.

If a company is paying you $100k under the current system, they actually think your work is work $106k. That's what they set aside to compensate you and to keep you from going somewhere else. If a competitor wanted to hire you away and pay you $110k, they would be setting aside $117k to do so.

If the SS tax were placed entirely on employers, then the $12k cost would come out of what they were prepared to pay you - meaning you'd take home around $94k and the competitor would be willing to offer $103k.

If the SS tax were placed entirely on employees, we'd see the reverse - the company could offer you the entire $106k, while the competitor would be free to up that to $117k.

The company is not offering you charity, nor are they doling out any extra money. In all three scenarios, they're offering you the exact same compensation - the only difference is who actually writes the check to the government.

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They are not offering you the same compensation, they are paying less tax.

And the only way you would see more money is if the competition decided to pay you more, and in order to keep you the company had to pay you more.

No one would automatically get the money the company previously paid in payroll tax, they would only do so if they had to due to competition

Lord Tammerlain said:

They are not offering you the same compensation, they are paying less tax.

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On the margins, you're correct. But for the most part, it's interchangeable.

And the only way you would see more money is if the competition decided to pay you more, and in order to keep you the company had to pay you more.

No one would automatically get the money the company previously paid in payroll tax, they would only do so if they had to due to competition

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That's the idea behind the free market.

Erod said:

Fica is just a tax wrapped in package called a "retirement benefit". Basically, you give the government $1, and in 40 years, they give you back a nickel.

And it STILL went bankrupt. How is that possible?

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did you miss the part where this was run by the government?



we're going to get rid of the cap, and severely reduce benefits; either through means testing, raising the retirement age, fixing COLA to inflation rather than the consumer price index, or all three.


OR we will try to "take the easy way out" and just print more money. that always works.



take a wild guess which one will be politically easier?

Lord Tammerlain said:

No good business would pay more in salary or benefits then they would have to according to the market for that particular position, modified by the skill and experience of the particular person in that position

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Not always so. There are efficiency wages (overtime is a good example). Paying above the market wage can have long run benefits in both productivity and decreased turnover risk.

Goldenboy219 said:

Not always so. There are efficiency wages (overtime is a good example). Paying above the market wage can have long run benefits in both productivity and decreased turnover risk.

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But you have to look at how many employers actually pay an eficiancy wage. We still have employers not even willing to pay employees a living wage.

How can you expect everyone to start saving for retirement when employers are not required to even pay a living wage?

Furthermore, employers that do offer retirement plans have been moving towards market models themselves. Employers have been increasingly utilizing 401k's rather than using defined benefit pension plans. They want a mobile workforce and they want their employees to make there own decisions. If you look at recent trends in employment you will see why employers have chosen this model. Work has become more temporary, and the unemployed have spent a longer amount of time between jobs.

In doing so, we are increasingly linking retirement benefits to employment. Not only that, by requiring people to invest their own money you are increasing the risk these people must take on. It undermines the idea behind a social insurance. I am not against the whole idea of taking charge of your own retirement, or working to save your own money. That is a great and rewarding experience. However, we must be aware that in doing so we are creating a lot of second class citizens, who will not have the liberty to retire in a favorable position.

Goldenboy219 said:

Not always so. There are efficiency wages (overtime is a good example). Paying above the market wage can have long run benefits in both productivity and decreased turnover risk.

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That would be part of the "have to"

Retention bonus's, productivity bonus's are reflective of companies paying what they have to to get the employee to stay and of course be productive.