View Poll Results: Your Identity and For/Against this SS Reform model

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  • Socialist and Against

    10 10.99%
  • Socialist and For

    1 1.10%
  • Democrat and Against

    21 23.08%
  • Democrat and For

    6 6.59%
  • Republican and Against

    2 2.20%
  • Republican and For

    22 24.18%
  • Libertarian and Against

    9 9.89%
  • Liberarian and For

    9 9.89%
  • I am for it, but with a particular modification (explain)

    11 12.09%
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Thread: Social Security Fix

  1. #171
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    Re: Social Security Fix

    Quote Originally Posted by Kandahar View Post
    Although I suppose the specifics of the plan would need to be tweaked, I think this is on the right track for how to address social security. Also, if the government is worried about the market tanking and wiping out people's savings, these private accounts could have a mechanism to deal with that: Mandate that a certain percentage of them went into low-risk investments like bonds, and the minimum percentage of low-risk investments could slowly increase as a person neared retirement age.
    the trick with such a plan is it lowers the average rate of return. i think the combo of more conservative investments + an older retirement age might could measure out.

    I do like the idea and would support something along these lines. Another change we'll probably need to make is to raise the retirement age a few years. 65 just isn't sustainable now that people live well into their 80s and 90s.
    alright if we follow your advice above and have it invested more conservatively (say, at a 6% rate of return), then regular worker Joe (whose pay increases at 2% a year) can start working at 20 at $25,000, and retire at 65 with a monthly income of $3376.00, or at 70 with $4381.00; both of which are FAR beyond what he could expect from Social (in)Security. low income Joe (whose pay only increases at a rate of 0.5% a year) will never make $33,000 a year; but he can retire at 66 and completely replace his annual income of 31,500, or work until he's 70 and make $41,583.

    obviously either of these men working until 75 would be fine. L. I. Joe would be bringing home more than 4,700 a month, and M. I. Joe would be bringing in a little over $6K.

    make the dang thing even more conservative (5% return, which it should be noted matches the annuity), and it does get trickier. If M. I. Joe retired at 65, he would only be making double the average social security payment. He would have to work until 75 to get an income of $50,000 a year from his account. L. I. Joe doesn't replace his income until 72; and if he retires at 75 he will only recieve $39,000 a year.

    which, mind you, is still more than 3x what he would get from Social Security. Even at 65, Joe is still making more with this exceedingly low growth rate than he would under that program.

  2. #172
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    Re: Social Security Fix

    and again, i'd like to emphasize that all this happens without costing either of the Joe's a single red cent. this is merely on top of whatever other savings they accrue.

  3. #173
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    Re: Social Security Fix

    I didn't bother to do an independent analysis on the numbers, but it looks workable.

  4. #174
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    Re: Social Security Fix

    Quote Originally Posted by megaprogman View Post
    I didn't bother to do an independent analysis on the numbers, but it looks workable.
    i used excel; it's real handy for these kinds of things; once you've plugged in the equations you can mess with it and it runs all the calculations for you

  5. #175
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    Re: Social Security Fix

    Anyone who has studied history should understand that government is the worst of all entities to protect your money. Social Security would not have even passed through the courts had it not been for the "Switch In Time That Saved Nine." In fact the SCOTUS gets a bit whacky with its precedents after FDR threatens to stack the courts. But I digress...I am hearing people calling it a retirement plan etc etc...Nothing can be further from the truth. Its purpose was meant as an assistance/aid program for the elderly, the unemployed, dependent children, etc...Honorable, but questionable and arguable as to whether Congress has such power under Article I Section 8 of the Constitution.

    I digress again...

    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.
    I have some questions CP. Firstly, how are you to force people to pay 5% of their paycheck into a TSP like account? Are you going to mandate it? Sounds very similar to Obama's Health Care Act if you do, and it is questionable as to whether or not such mandates can be imposed. I get that its an opt in on the individual, but is it an opt in for the employer? Secondly, employers are not going to pay 2.65%. They are going to write those costs off to the consumer. In effect you are levying another tax. How do you intend to force employers to actually carry the weight of the 2.65%, and what kind of impact will 2.65% have on small businesses which makes up 75% of the available jobs?

    Ax
    Last edited by Axiom; 03-06-11 at 09:57 AM.

  6. #176
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    Re: Social Security Fix

    Quote Originally Posted by Axiom View Post
    Anyone who has studied history should understand that government is the worst of all entities to protect your money. Social Security would not have even passed through the courts had it not been for the "Switch In Time That Saved Nine." In fact the SCOTUS gets a bit whacky with its precedents after FDR threatens to stack the courts.
    i once had a professor tell me i needed to get over Wickard v Filburn already.

    I have some questions CP. Firstly, how are you to force people to pay 5% of their paycheck into a TSP like account?
    currently they are putting 7.6% into the Social Security trust fund via the FICA tax. my plan would merely divert 5 of the 7.6% to a personal plan.

    Are you going to mandate it?
    nope, folks will have the freedom to opt in. perhaps to make it more politically palatable we could offer folks an "opt back" upon retirement, but i would bet that not many would willingly give up that much money.

    Secondly, employers are not going to pay 2.65%.
    they already do.

    They are going to write those costs off to the consumer
    actually i think most economists are generally uniform in claiming that payroll taxes come out of compensation. but i could be wrong.

    In effect you are levying another tax.
    no, i am diverting a current tax; which is why i claim that this plan will produce these results without costing my Joe's any money; their tax burden will not increase.

  7. #177
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    Re: Social Security Fix

    I had a professor tell me roughly the same CP. I quickly asked him if we would be studying Locke and Rousseau or would he just be promoting a Hobbesian philosophy? I still got an "A' but I don't think he liked it.

    Good answers CP. I cannot argue with it. But what happens to my 5% investment after I die? Is it my money or is it still the same ponzi scheme as Social Security?

    Ax

  8. #178
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    Re: Social Security Fix

    i would say it goes to your kids. but if we had to fold it back into the trust fund to make it fiscally sound, that's a compromise i'd be willing to make. perhaps it would go to your kids, but get taxed at income rates.

  9. #179
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    Re: Social Security Fix

    Quote Originally Posted by Axiom View Post
    I had a professor tell me roughly the same CP. I quickly asked him if we would be studying Locke and Rousseau or would he just be promoting a Hobbesian philosophy?
    i view Hobbes as merely existing further down the pyramid of needs. we need a leviathan before we cans start worrying about individual liberty and limited governance.

  10. #180
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    Re: Social Security Fix

    Quote Originally Posted by cpwill View Post
    i view Hobbes as merely existing further down the pyramid of needs. we need a leviathan before we cans start worrying about individual liberty and limited governance.
    Not sure I can agree with you. I look at Hobbes and I see Mussolini in his previous life. I will agree we need government to guarantee security, and I will agree that government is a necessary evil but it does not necessarily need to be as Hobbes viewed it.

    Ax
    Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.--Thomas Jefferson

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