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Social Security Fix

Your Identity and For/Against this SS Reform model


  • Total voters
    75
SS was started as a pay as you go program, but it did collect more money than it needed. We spent that money on other things. So, no money is invested. From an investment POV, I look this way: I’ll work for someone else for a couple of hours this week if someone else will work a couple hours for me in the future.

Please, someone tell me where I can disabuse myself of my misunderstanding that SS was originally and is now a pay as you go program, not an investment program.

(I know the ‘surplus’ is used (robbed) to lower taxes, but that is another issue.
 
Opting out is off the table. SS needs full participation to work the way it is now and in the future.

ricksfolly
 
Social Security is not broken. Also SS is not a retirement plan, it's insurance against poverty either in old age or if you become incapacitated when your young enough to work. I can't confirm this, but I've heard as much as 30% of current recipient are young enough to work, but can't.

According to the Dept of labor, 75.8 million 18 and over aren't even looking for jobs for a variety of reasons.

Most are probably living with their parents.

ricksfolly
 
According to the Dept of labor, 75.8 million 18 and over aren't even looking for jobs for a variety of reasons.

Most are probably living with their parents.

ricksfolly

A lot of older people are back at college - like me. Over 1/2 of my algebra class is nontraditional.
 
According to the Dept of labor, 75.8 million 18 and over aren't even looking for jobs for a variety of reasons.

Most are probably living with their parents.

ricksfolly
People are unemployed and not paying SS. And, if they are living with their parents they probably aren’t collecting SS. So, please explain what this has to do with SS. thx
 
SS was started as a pay as you go program, but it did collect more money than it needed. We spent that money on other things. So, no money is invested. From an investment POV, I look this way: I’ll work for someone else for a couple of hours this week if someone else will work a couple hours for me in the future.

Please, someone tell me where I can disabuse myself of my misunderstanding that SS was originally and is now a pay as you go program, not an investment program.

(I know the ‘surplus’ is used (robbed) to lower taxes, but that is another issue.

Yes, this is correct. Any surplus money has to be used to buy government bonds, however.

@Catawba, return rate on bonds isn't dependant on the economy, but on the value of the dollar and how many people want to buy US debt. Some might view it as a"safe" investment in economic downturns, increasing demand and thus lowering its return rate during recessions. Vice versa during economic expansions. So its only indirectly dependant on the economy.
 
Opting out is off the table. SS needs full participation to work the way it is now and in the future.

ricksfolly

Why? If people can opt out, those who feel they don't need it won't pay in and won't take out.

Perhaps there can be some limits, where you're not qualified for much if any welfare if things don't work out for you, as you didn't choose to pay into SS.
 
SS was started as a pay as you go program, but it did collect more money than it needed. We spent that money on other things. So, no money is invested. From an investment POV, I look this way: I’ll work for someone else for a couple of hours this week if someone else will work a couple hours for me in the future.
Without knowing it, I trust, you have mischaracterized SS. Then you offer options to what it isn’t. There is a name for this, but I forgot what it is.

i am aware of how Social Security is supposed to function (and the differences in how it was sold, how it functions, and how it was defended in court). I am also aware, however, that "how it functions" is similar in form to a pyramid scheme, and we are running out of new suckers. when the program began, you had 12 workers paying for every retiree; very doable. surely you can give up a 12th of the cost of insuring an elderly person against poverty for a short time (the life expectation, after all, was about the same age as "retirement"). in 1960 it was a little over 5 workers for every retiree; still plenty sustainable.

however, now we are rapidly approaching the point (thanks to living longer, lower birthrates, and the baby boomer generation messing with our demographics) where we are going to have to be supporting each retiree with 2 workers. on top of that, the "savings" that we've been putting in the "trust fund" for the past several decades to help us out at this moment have all been frittered away on very important pork projects.

so, the "pay as you go" isn't really an option any more. the unfunded liabilities from Social (in)Security are towering (though admittedly those from Medicare are even more mind-boggling).
 
Oh I see cpwill, so SS is not a retirement investment program; i.e. you put your money in, it’s invested and you get that money back later.

Then SS is a pay as you go program that is in trouble because not enough people are paying in, benefits too high, and we spend the extra that should help get the program through poor economic times, etc. (I must say that I don’t feel disabused.)

Now, to the root of the matter, if there isn’t a forced savings for retirement program or a pay as you go program, what will there be for retirees that haven’t saved? Back to poor houses? There are millions of them. Charities will be over whelmed. I don’t want them begging on my streets. Could we just make being stupid and poor illegal? Are you just frustrated with the stupid and poor; or, cpwill, do you have a solution for this?
 
Efficient, as in little waste in running the program. Secure as having not been lost in the market collapse. The interest at my bank has been terrible as well, and we lost a fair sum of money due to the stock market crash. Higher risk funds do earn more interest but there are risks. What if they spend it instead of saving it? If we have to turn around and support those that have made bad investment choices, what have we gained?

What if they spend it instead of saving it? What are we, parents of idiots? People can take care of themselves. We need not decide their time preference. If they want to save less and think they can live on it then let them do it. If it wasn't enough, then oh well, they can try to find charity. We should not force people into making good decisions if their bad decisions only affect themselves.

Now, do we get all the money back that we put in? If we live long enough surely, but what if we die young? What happens to all the money that we put in? I know that SS has a program for the relatives of the deceased person, but do they get back all that was put in? Or is some of it inevitably lost? With personal savings accoutnts it isn't a problem, but what happens with SS?

And all the money in SS: is it invested? All that money being in the stock market would be a boon for growth. Are those funds loaned out as investments would be? Or are they just stuffed under the proverbial mattress?
 
My concern is what if they make bad investment, get swindled, or simply spend the money. What happens then?

This happens all the time with people's investments. Should we guarantee that people will not lose int he stock market?

I see where you are coming from and there is something to that, but ultimately I see it as a way to prevent having to throw old and disabled people out in the street.

They're adults, they should provide for themselves. In the worst case scenario they can find charity.

Its not welfare, its a fund we all pay into to assist in our retirement, or if we become disabled.

So we get back exactly what we put in? If not then it is welfare, at least for somebody.

As the economy improves, so will the rate of return. However, the rate of return is secondary to me to have a secure mechanism to help protect ALL of our old folks and the disabled.

It's called a savings account. Get one.
 
Some on this board will claim they received much more in payments than they put in. As any investment SS has gets a pitiful return rate, especially after inflation, this means that inevitably, some people won't get what they put in.
 
For phattonez and others.

What if they spend it instead of saving it?
They are broke. We’ll need a law to keep them out of the ER’s etc.
What are we, parents of idiots?
Sorry, yes.
People can take care of themselves.
They have proven over and over that they can’t.
We should not force people into making good decisions if their bad decisions only affect themselves.
Yes! YES! But we’ll need some laws that allow that allow us to ship them off somewhere so I won’t have to move to a gated community with a private police force. I’ll be sorry to see you ship my in-laws out, but oh well as long as I don't have to do it.
 
For phattonez and others.

What if they spend it instead of saving it?
They are broke. We’ll need a law to keep them out of the ER’s etc.
What are we, parents of idiots?
Sorry, yes.
People can take care of themselves.
They have proven over and over that they can’t.
We should not force people into making good decisions if their bad decisions only affect themselves.
Yes! YES! But we’ll need some laws that allow that allow us to ship them off somewhere so I won’t have to move to a gated community with a private police force. I’ll be sorry to see you ship my in-laws out, but oh well as long as I don't have to do it.

Why do you think that private charity can't fill the void?
 
What if they spend it instead of saving it? What are we, parents of idiots? People can take care of themselves. We need not decide their time preference. If they want to save less and think they can live on it then let them do it. If it wasn't enough, then oh well, they can try to find charity. We should not force people into making good decisions if their bad decisions only affect themselves.

Only affects themselves? 7 out of 10 Americans are now officially poor. Does that help our economy or hurt it? Now you want to make matters worse by throwing more old and disabled people to the street? How is that supposed to help? Not to mention the moral implications.

They're adults, they should provide for themselves. In the worst case scenario they can find charity.


"Are there no prisons? Are there no workhouses?" - Charles Dickens
 
Some on this board will claim they received much more in payments than they put in. As any investment SS has gets a pitiful return rate, especially after inflation, this means that inevitably, some people won't get what they put in.

Thankfully it is not an investment then
 
Only affects themselves? 7 out of 10 Americans are now officially poor. Does that help our economy or hurt it? Now you want to make matters worse by throwing more old and disabled people to the street? How is that supposed to help? Not to mention the moral implications.

Wow. Anyway, allowing people to keep this money allows them to invest it themselves which grows the economy and makes us all richer. Furthermore, why do you continue to ignore the work of charity?
 
Wow. Anyway, allowing people to keep this money allows them to invest it themselves which grows the economy and makes us all richer. Furthermore, why do you continue to ignore the work of charity?

Its idiotic to think that everyone is going to invest their money wisely. And SS is not an investment program, it is an insurance program that we have all paid into. Perhaps there are some charities to help with the greed issues you wrote about.
 
Its idiotic to think that everyone is going to invest their money wisely. And SS is not an investment program, it is an insurance program that we have all paid into. Perhaps there are some charities to help with the greed issues you wrote about.

Those that don't can continue to pay into SS.
 
Thankfully it is not an investment then

It isn't meant to be, but that's what it became.
If it was a pay as you go, where one person now pays for another's retirement in exchange for the same later, the benefits provided by it are way too high.
 
Its idiotic to think that everyone is going to invest their money wisely. And SS is not an investment program, it is an insurance program that we have all paid into. Perhaps there are some charities to help with the greed issues you wrote about.

More investment in total means more capital in total which means more production in total which benefits all of us. We would have more wealth if the money was invested. Even if some people did fail, we would all be richer and they could either have a savings in backup or find some charity or live off of their now richer kids.
 
Why do you think that private charity can't fill the void?

Because charities didn’t before SS. Take a look at how charities were doing before SS started.

Today’s charities are just barely feeding the few street people we have now.
My guess is that 50% +/- 25% of our ‘adult’ population can’t/won’t invest for retirement. So the numbers of people needing charity would increase to between 1000 to 3000%. The amount of money necessary to keep a street person fed is about one fifth the cost of housing a retired person in permanent housing, i.e. not a tent. So I think charities would need to increase their capacity between 5000 to 15000%.

Why do you think charities would fill the void?
 
Because charities didn’t before SS. Take a look at how charities were doing before SS started.

They seemed to be doing pretty well. We didn't have a mass of starving people before social security came about.

Today’s charities are just barely feeding the few street people we have now.
My guess is that 50% +/- 25% of our ‘adult’ population can’t/won’t invest for retirement. So the numbers of people needing charity would increase to between 1000 to 3000%. The amount of money necessary to keep a street person fed is about one fifth the cost of housing a retired person in permanent housing, i.e. not a tent. So I think charities would need to increase their capacity between 5000 to 15000%.

These are just statistics you made up in your head, so why should I care?

Why do you think charities would fill the void?

Because they have in the past and today are much more effective than government spending at lifting people out of poverty to make them independent.
 
And all the money in SS: is it invested? All that money being in the stock market would be a boon for growth. Are those funds loaned out as investments would be? Or are they just stuffed under the proverbial mattress?

Neither one. SS funds go into the general fund and are spent on everything from welfare to wars. That's why the fund is in trouble.
 
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