Worthless...

[lurch00]

I don't feel much like writing about this right now, but I just wanted to point out how worthless the Democratic response to tonight's TV interruption.. I mean, State of the Union address. Say what you want about some of the solutions proposed for social security. At least the President put it on the table and opened debate for it. Obviously, the

Comments

[nushawn]

Look at when the social security "crisis" is going to happen. I believe it's somewhere between 2042 and 2067. When has the government ever been concerned about something that far out in the future? That alone tells me that the issue here isn't saving it. I think it's likely this is the position the dems are going to take on this issue. I think it simply comes down to the fact that social security is just about the last thing in this country that the ultra-rich haven't been able to get their hands on and now they'll have the ability.

Just one more reason why i want out of this country.

[lurch00]

I think that 2042 date is when we actually have to start borrowing money to pay for it. I think the date is like 2018 where it starts paying out more than it takes in. The 25 years after that it pays out of savings. I do think it's worth looking at in the near future

[fattony99]

If I recall correctly, and I'll post the link when I find it, 2018 as the "pay out of reserves" date is the extremely pessimistic prediction from the government actuaries. The last 15 years or so (since the last year they had to pay out of reserves), they've budgeted based on that "extreme" worst case, when the actual numbers are a lot closer to the "best" case predictions, but slightly below that. This means that the actual state of social security is closer to Doherty's prediction. I think 2067 is best case, and 2042 is the average case. Even if Social Security were to go into worst-case mode tomorrow, it has to STAY in that mode for 13 years in order for 2018 to be the "pay out of reserves" date

[nushawn]

That 2018 figure also assumes that none of the excess money collected in the next 13 years i sactually put aside for social security. Of course, that is in fact what will happen, but just putting that money aside, as required by law, would actually allow the system to be solvent for years to come.

The other funny thing about those projections used for social security is that they paint a completely different picture of the US economy over the next decade than the projections used for the tax cut. I believe that in both of these cases the GAO has said that these predictions were not realistic. Besides, this is the guy that said that there were WMD in iraq, so i don't see why his numbers should be given any credence in this case.

The main thing is that you should assume that every dollar you put into social security is essentially thrown away. Don't expect it to be there for you at all when you retire.

On the bright side for tony, this plan would probably net him a nice bonus check for a couple of years.

[fattony99]

Bonus...probably. The annual "profit sharing" dump into my 401(k) would be fucking enormous, though. This year wasn't especially good for Fido, and I still got about 15% of my salary put into my 401(k) above and beyond the company match dollars. That would have to happen, though, since that would mean there wouldn't be social security when I retire, so the 401(k) better be nice and big.

[nushawn]

The thing is that he has no intention of capping them at a low rate. He's talking about allowing 2/3 of your contribution going to the private account. That means that 1/3 of the total revenue collected for social security will not be used to pay out to the current retirees. This is what will create the crisis in social security. Once this is accomplished, the plan is going to be to gut what's left of the new deal programs.

The brokers are going to get their 2-4% cut on these transactions. I doubt there is going to be any way that one will be able to avoid this.

Also, if this is such a major issue here, why aren't the european countries panicing in the same way? I believe that both france and italy have birth rates below 2 children per couple and they pay out far more in social welfare than the US. Wouldn't it stand to reason that they should be on the brink of collapse if things are so bad in the US?

[lurch00]

I don't think the key number is the number of workers vs the number of retirees - social security is sustainable as long as it takes in at least as much as it pays out. If the number of workers paying into it goes down, the average contribution needs to go up, either through an increase in the tax rate or by increasing wages. I guess Bush's plan is to decrease the amount it pays out instead of increasing how much goes in. That does make the numbers balance, but yo me, it seems like diverting that money into the stock market is trading away most of the security. Why isn't he pushing for full privatization

[nushawn]

There's another way that could very simply "save" social security that hasn't been mentioned in all of this. All they have to do is take the ceiling off of the earnings for which you are taxed. I'm lazy right now and bitter about the fact that i have to work until 4 AM on a friday night, and it's my birthday to boot, but i believe that above about 90K for someone filing single you stop paying into social security. If this change were made then the system would be liquid for hundreds of years. Of course that's not possible as politicians would have to bite the hand that feeds them to do it. I guess it just goes to the point about revenue in vs. revenue out.