Lexis

After tuning into the Republican thread, I thought I'd start a thread for a debate about social security.

Do you think it should be reformed? Why? Why Not?

What kind of reform do you want? Or is Social Security fine the way it is?

I don't know an awful lot about the current debates in the US on this topic but I've been browsing www.thereisnocrisis.com. Any other links are most welcome.

86amanda86

I think it should be personalized, but I've thought that for a long time. The fewer goverment regulations on this, the better. We need to leave it up to the ppeople if we want the program to survive, if we want it to still be here when we are old and grey. IMO.

Milt Palacio

I will post my complete thoughts later, but I just wanted to add that the Bush Administration is also looking to cut benefits by 1/3 with their proposal.

That's something the mainstream media isn't reporting.

Sparrowhawk

Reformed? Perhaps. Reformed as Bush wants it? Idiotic.

I do not see how this reform can possibly happen without driving us even farther into debt than we already are. With SS now, we all pay into a general fund and all the seniors that receive SS are paid from that general fund. Now, what happens when we all stop paying into that general fund? All of the seniors are going to want their money and there will be no till from which to pay them.

Without a massive gov't outlay to cover the difference between the intake and outpour of money, this plan simply cannot work with the benefits being given out right now. Given the dire financial straits we are in now with the deficit spending, I pray to any god that is listening that Bush does not do this thing.

Of course, as noted above, Bush can simply cut SS benefits to virtually nil to counter this. With seniors who live off of this with no other source of income... well, I'll leave that to your imagination.

mh67511

Ok one quote from the "There Is No Crisis Thing" bugged me:

Um, where is all this money? Hidden away in some secret bank vault? Last I heard the government used the surplus to buy government bonds. Isn't that basically the same thing as me writing an IOU to myself? I don't get how that would work...it just doesn't seem logical to me. Maybe someone can explain it to me because I haven't taken any economic classes yet and it's just not making sense to me.

Secondly, there ARE no obligations. Paying into the SS system is not a contract and the government doesn't actually have any liability, because they have to power to decrease benefits as much as they want. "The Supreme Court ruled in Flemming v. Nestor that there is no legal right to Social Security benefits."

Source: Flemming V. Nestor, 363 U.S. 603, 610–11 (1960)

Now it is doubtful that they would even do that, but you never know.

mh67511

Also just remember that there are people who believe there is a problem and those who believe there is not. I personally like to err on the side of caution. It doesn't mean I am pessimistic, I just don't want to count my chickens before they hatch.

Sparrowhawk

Agreed, it's doubtful any politician would do that. The only other option is to pay out with no money coming in. This is more likely, given that this president has been doing so his entire term and there is no end in sight.

Drekkan

The problem is that privatization isn't a good step for SS reform. The whole point of social security is to be a safety net - no matter what else you win or lose during your career, you still have SS. A lot of people like to throw around that you can make it larger by privatizing don't seem to understand that it can also be made smaller.

busybuzz

Frankly, I think this is a faux crisis. And given Bush's economic record, I wouldn't trust him doing my taxes let alone, 'reforming' an important government financial program.

Milt Palacio

Some important concepts of Social Security:

1) The system is solvent and will be able to pay out 100% of benefits until sometime between 2042 (conservative estimate) and at least 2052 (more realistic estimate) without any changes. Afterwards, the system will still be able to pay out 81% of benefits.

2) Social Security is an insurance program, not an investment program. It's purpose is to keep senior citizens out of poverty by providing a secure and steady stream of income that can be RELIED on.

3) The program was in fine shape when Bush took office. Bill Clinton created a $250 billion "lockbox" from the record federal surplus to shore up the system. Bush subsequently raided this lockbox for current federal expenses and this "lockbox" is now gone.

4) Corporatizing Social Security will add $2 trillion to the already record federal deficit over the next ten years. Doing so could be diastrous to our economy.

My take: Bush is trying to take the security out of Social Security. This "privatization" amounts to "corporatization". If this happened, we would see many more seniors living in poverty or even out on the street. Letting people invest Social Security money in the stock market is much too risky. Also, broker fees and other investment fees will take a big piece of this Social Security money if it is corporatized. This means more money for Wall St. and less money for retirees.

This whole corporatization scam is the first step to completely getting rid of Social Security, which has been the Republican's goal for awhile now. Bush plans to cut benefits by 1/3 with this plan if he has his way. Very few media outlets are reporting this. If the first cut goes throug, we are bound to see other cuts in the future as they try to completely phase out benefits.

If people want to invest for retirement, there are many ways to do it: Traditional IRA accounts, Roth IRA accounts, 401K plans, and 403b plans. These are more risky plans where you can grow your money for retirement. Social Security should be left alone, as it is the most successful social program in our country's history.

Some other ideas: Raise the cap on payroll taxes so more money is paid into the system. Or, if the economy grows at a greater than average pace, we could be in fine shape for another 100 years. There is no real "crisis" and Bush's idea to gut Social Security is a very bad and potentially disastrous one.

The first order of business should be paying down the federal deficit.

mh67511

Very good basic information:
http://www.ssa.gov/legislation/Lockh...3_document.htm

alli balli

I really don't know much about SS, but the idea of privatization doesn't seem like a good one to me. Not everyone knows what to do with their money. Some people will get lucky and invest it well, and others will invest and end up losing it. I was under the impression that SS is supposed to be there for your retirement no matter what. So a system where 50% of the people get richer and 50% of them blow it away doesn't sound like a good one.

Lexis

Investments are complicated and its a sad fact that those who are already wealthy (and thus usally better educated and having access to professional advisors) will probably invest better. Those who are poorer (who may be less educated and without acess to advisors) may invest poorly and end up living in poverty as they get older.

I know I couldn't stand to see that happen.

mh67511

From http://www.socialsecurity.org/reformandyou/faqs.html#5

Why don't we just let people choose to invest? If someone doesn't WANT a personal account, fine don't give them one. If someone does, then let them but also make it clear that the benefits they will get from the government will be less.

For example:
If you give 7% you get $1000 a month from Uncle Sam
If you give 5% (and invest 2%) you get $800 a month Uncle Sam

Milt Palacio

You're linking an article from the Cato Institute? They're the biggest right-wing propaganda think-tank in the country. Not exactly a good source.

The patient-doctor comparison is hilarious. That's a horrible analogy.

I also like this passage from FAQ #15: "Low-wage workers would also benefit from personal accounts because they would own their retirement savings. This is particularly important because poor workers tend not to live as long as individuals with higher incomes."

Ever think maybe the Republicans should find a solution for that?