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Thread: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a future Am

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    Quote Originally Posted by What if...? View Post
    Or we could employ a rational taxation system
    well i'm 100 percent in favor of that; which is one reason i like the ryan budget, as it moves us in a more rational direction. but what we have now is a nightmare behemothof a code that costs us over 300 billion a year just to comply with. that's indefensible.

    , coupled with publicly funded elections, which would allow us to actually elect effective people who would then be beholden to us
    okay... not really sure how this ties into our debt crises; except that it adds another expense objectively making it worse.

    Who would then be free to do what we elect them to do. Instead of spending half their time getting enough money to run, and the other half paying those debts back.

    Then we could all be friends instead.
    no...... you would simply provide a new baseline instead. politicians now spend their time assuming the public funds and then raising money for "like minded groups" that will run ads on their behalf.

    until you get politics out of money, you won't get the money out of politics.

    Just a simple spitball of another possible option that could work, based on my extremely jaded opinion of human nature.

    There's WAY too much consensus in WAY too many conservative arguments. Consensus is NOT normal human behavior.

    Just sayin'.
    there is a generally American consensus that not raping children is good. obviously your jaded sense tells you Americans are wrong in this? or perhaps they (and by extension, conservatives) are on to something?

    as for consensus within the Conservative Camp; there is anything but. I see plenty of consensus on the Democrat side. One Solution: Raise Taxes. on the Republican side you have a wealth of competing ideas, from fair taxes to flat taxes to two-tiered taxes to simplified taxes...

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    Quote Originally Posted by cpwill View Post
    which, of course, would still have left low-income retirees better off than social security as it stand today.
    Not that I have too many cards coming into this discussion. But how exactly is what you said above true?

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    Quote Originally Posted by SE102 View Post
    Not that I have too many cards coming into this discussion. But how exactly is what you said above true?
    quoting my OP of the Social Security Fix thread:



    Allow workers to opt into a partially privatized system, where of their 7.65% FICA expenditures, 5% goes into a private TSP-style account; and the Employers match follow the same. the remaining 2.65% (or, when you count the match, 5.3%) will go straight into SS, but it will be revenue for which SS will never see a liability. the cost for opting out is that part of your pay continues to go to pay for others, but the upside is that you get a combined total of 10% of your annual income going into a retirement account that belongs to you, and grows tax-free. Social Securities' revenues will instantly drop, but nowhere near as severely as their liabilities. To ensure solvency in the adjustment period (and to make it politically palatable); lift the cap. We can lift the cap on only the worker (and not the employer) if we want to encourage job-creation; or lift it on both if we need the revenue to ensure solvency, or if that's the only way to get the thing passed; here is room for compromise wiggling. Higher paid workers will see more of their money leave in the form of taxes, but those making less than $604,000 will get back even more in the form of ownership of personalized accounts (assuming the employer cap isn't lifted, and that's not figuring for the added benefit of those accounts growing tax-free), and so they will be willing to make the trade. Perhaps another compromise point would be to raise the cap to $604K. Poorer workers can either spend their lifetime building far more wealth than they ever would have seen under Social Security if they are younger, or keep the guaranteed program benefits if they are older.

    ta-da! the American people and the Government are left better off.

    how much better off?

    welllll, let's do a quick example:

    Joe graduates High School and goes to work, making 25,000 a year. Not anyone's idea of incredible pay, but there you are. Joe gets' a 2% raise every year to account for his increasing talent, experience, etc. The 10% of his income goes into a mix of funds that matches the S&P 500 Combined Annualized Growth average since 1982: 7.98% (after you account for inflation). If Joe retires nice and early at 62; his retirement fund will be worth $1,030,110, and if placed into an annuity / conservative account that generates a 5% annual return, his monthly benefit will be $4,292. That would be slightly less than his last monthly paycheck of $4,979; but still quite livable. If Joe works until he's 65, his monthly benefit will climb above his monthly income to $5,473; and if he decides (as most of us probably will) to delay retirement to 68, he's looking at a monthly retirement check of $6,966.

    And remember, Joe isn't exactly one of society's higher paid workers.

    But he also had the advantage of time. Let's say instead Joe went to two years of college, and got an associates before entering the workforce to earn that 25,000; and let's say that instead of 2%, Joe turns out not to learn new skills that well, and his annual raise above inflation is actually 0.5%. We're stacking the deck a little against ole Joe, but he still seems to come out okay; his monthly benefit at age 62 is $3,050; at age 65 it's $3,875; and at age 68 it's $4,915. It's worth noting that under this model, the most Joe ever made was $31,672 in a given year; and that his monthly retirement benefits at age 65 represents a $1,200 monthly pay increase over his monthly income. Even if Joe retires early at 62 he will have more in income off of his account than he would from working; and the longer he chooses to keep working, the greater, obviously, his return is.

    AND ALL THIS WITHOUT COSTING OLE JOE A SINGLE RED CENT. since the money was cash he was losing to taxes in the first place, his take-home pay wasn't reduced one iota; but because we partially privatized social security, Low Income Worker Joe can retire a millionaire.

    OR, if he didn't want the 'risk' of the marketplace, he could have chosen to stay with regular social (in)security. average monthly payout: about $1,100 dollars. or, roughly 1/3rd of what Joe made in our worse case scenario at age 65.


    BUT WAIT!!! WHAT IF THE MARKET TANKS!!!

    Markets recover. If the market tanks right as Joe was planning on retiring, he can work for an extra year while it rights itself, or simply choose to draw less from the account in order to leave more in there to ride the upswing. OR, if Joe makes the worst decision possible, at the worst time possible and withdraws all of his money while the market is at the low point on the trough (say, a 40% drop, similar to what we just saw), to purchase a 5% annuity... then his monthly income in our worse-case scenario at age 65 will still be more than twice what he could have expected from Social Security.

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    mind you, the new numbers now being available; the actual CAGR of the S&P 500 after adjusting for inflation is 8.13%; so those numbers can actually be adjusted a bit higher. but the point remains the same. never underestimate the power of compound interest.
    Last edited by cpwill; 04-07-11 at 08:41 AM.

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur


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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    the punchline: partial privatization of social security will force poor people to save and invest; causing them to be financially independent at retirement. even if the market crashes the return is better than Social (in)Security's.

    and so the question becomes: given that it is possible to turn our low income workers into financially independent retirees; why would we instead choose the route of economically harmful and revenue neutral tax hikes?
    Last edited by cpwill; 04-07-11 at 08:56 AM.

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    *Nod's head.*

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    Quote Originally Posted by SE102 View Post
    *Nod's head.*
    so you tell me: which would you prefer? to turn the poor into financially independent retirees, or keep them dependent upon (smaller) government handouts financed by economy-harming tax rates?

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    Quote Originally Posted by cpwill View Post
    so you tell me: which would you prefer? to turn the poor into financially independent retirees, or keep them dependent upon (smaller) government handouts financed by economy-harming tax rates?
    Your assuming that poor people will have the money to invest in the biggest ponzi scheme to ever come into being, I am referring to Wall Street and the stock market, so we can bail Wall Street out with our taxes and watch quietly as our social security is eliminated.

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    Re: Schakowsky tears into Cantor for saying Social Security ‘cannot exist’ in a futur

    Quote Originally Posted by EarlzP View Post
    Your assuming that poor people will have the money to invest in the biggest ponzi scheme to ever come into being, I am referring to Wall Street and the stock market, so we can bail Wall Street out with our taxes and watch quietly as our social security is eliminated.
    ....


    go read post 13, and get back to us.

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