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[P]
Senior Security in the Information Age

By adimovk5 in Op-Ed
Tue May 24, 2005 at 07:30:47 AM EST
Tags: Politics (all tags)
Politics

Prior to the Great Depression, the United States was transitioning from an Agrarian Society to an Industrial Society. Improvements in medicine were allowing people to live longer. People were migrating from rural to urban areas. Extended families were being replaced by smaller families.

Several nations around the world had already adopted some form of national welfare to replace the family. There were many movements to establish a national program in the United States and a few states were already running their own experiments. The massive poverty caused by the Great Depression increased the popularity of those movements and led to the Social Security Act.

The Social Security Act was signed into law by President Roosevelt on August 14, 1935. In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement. A Brief History of Social Security
The average life expectancy is increasing. The number of workers supporting each senior is decreasing. Either of these facts alone would cause trouble for the system. In addition, there are other factors which have the potential to harm the viability of Social Security. Together they will eventually cause the system to collapse unless changes are made.

The time to make changes is when you see a problem approaching, long before potential problems can reach the crisis stage.


Divorce
Support for senior citizens must be divorced from support for survivors and the disabled. Senior citizens have different needs and the lumping together of all wards of the government distracts the program from its primary purpose - care of the elderly. The program should focus on issues facing seniors.

Raise the payment age
There are too many seniors to support because the definiton of who is a senior citizen is too large. Senior should be redefined as a person who has reached the average life expectancy for his birth year. People should be expected to provide for themselves up until that point. This would cut the number of seniors in half. Setting the starting payment age this way would alleviate the system strain as average lifetimes become longer.

Use the poverty line
Senior Security should provide a floor that keeps a citizen above the poverty line. Minimum benefits should be set at the poverty line plus ten percent, regardless of contributions. This would be called the anti-poverty benefit. Everyone would be guaranteed the same base benefit regardless of work history.

Eliminate means testing
Means testing discourages people from working to supplement income. People should be encouraged to be productive wage-earning citizens for as long as they are able. Money will be saved through the elimination of all the bureaucrats now engaged in the process of denying money to seniors.

Eliminate the limit on taxable income
The income tax should be based on all of a person's income instead of being restricted to the first $90,000. The restricted tax is regressive because it causes lower income people to pay a higher percentage of their salary. Removing the limit would increase revenue significantly.

Stop buying US treasury bonds
The present system takes income from workers and makes payments to seniors. It then takes the surplus and buys US treasury bonds from the federal government. This only moves money from one government pocket to another with the taxpayer paying interest on the money. This means the taxpayer pays twice.

Invest abroad
Investing in US stocks is not the answer. There are many dangers in having a part of the government owning large amounts of American corporations. The answer is foreign investment. The Senior Security Fund would be allowed to invest in dividend yielding stocks in any foreign country approved by Congress.

End employer mandated contributions
Matching employer contributions are an illusion. If an employer is forced to match an employee's six percent, it does so by paying six percent less. Remove the illusion. Set the rate and be honest about it.

Require personal investment accounts
Require every worker to have an investment account. The personal account would be an additonal contribution that would be controlled by the worker and upon death would become part of the worker's estate. It could be invested in any investment vehicle in the United States. Funds could be withdrawn starting at ten years prior to reaching Senior Age, but no more than ten percent per year.

Getting there
The largest change would be the raise in payment age. Raising the payment age should be gradual. A rise of four months per year until the goal is reached should be slow enough.

Taxable income would be ten percent on the amount above $90,000 the first year. The next year would be twenty percent. Each year would increase an additional ten percent until all income is covered.

Current US treasury bonds would be maintained until maturity and then sold. The amount of new bonds purchased would be reduced to ninety percent the first year and then ten percent less each following year. The slow decline in purchases and the slow sale would prevent the market from being flooded by US treasury bonds.

Employer contributions would be converted to employee salaries. There would be no net loss of pay. Employee contributions would be lowered to ten percent.

Every worker would be required to choose a manager to maintain their personal investment account. The contribution would start at one percent and rise each year by one percent until reaching ten percent. A worker could change managers no more than once per month.

Consequences
There would be resistance to a rise in eligible age. It should be overcome by the increased income potential made possible by the elimination of means testing and the elimination of the taxable ceiling. The taxpayer would benefit by the shift from US treasury bonds to foreign dividends. With a guaranteed anti-poverty benefit and personal savings every citizen should be able to look forward to a secure future.

Other Possibilities
The United States isn't the only country with an aging population. Other countries are also trying to find ways to prosper while caring for the elderly. The AARP has collected research on the attempts of others around the world. Perhaps the experiments somewhere else will yield solutions that will work in the United States.

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Poll
Seniors should be taken care of by:
o Only government welfare 2%
o Mostly government welfare 20%
o Half government, half personal 8%
o Only personal investment 8%
o Mostly personal investment 32%
o Charities 0%
o Family 2%
o Hope I die before I get old 23%

Votes: 34
Results | Other Polls

Related Links
o A Brief History of Social Security
o issues facing seniors
o average life expectancy
o poverty
o collected research
o Also by adimovk5


Display: Sort:
Senior Security in the Information Age | 105 comments (96 topical, 9 editorial, 0 hidden)
Kill old people (2.71 / 7) (#3)
by wre on Sun May 22, 2005 at 02:19:23 AM EST

Nobody deserves anything.

let's start with you (3.00 / 2) (#4)
by khallow on Sun May 22, 2005 at 07:03:10 AM EST

Clearly you are old and cranky. Drink the kool-aid and stop whining.

Stating the obvious since 1969.
[ Parent ]

re: deserving (none / 1) (#26)
by adimovk5 on Sun May 22, 2005 at 09:10:35 PM EST

.....Nobody deserves anything.....

Do you only take care of people who deserve to be taken care of?

[ Parent ]

Some helpless people should be taken care of (none / 1) (#29)
by wre on Sun May 22, 2005 at 10:37:02 PM EST

But not just because they're alive or because of what they've done. The thing that matters is what they're going to do.

Old people in general are just a drain, so (in general) we should put them on icebergs and wish them farewell.

[ Parent ]

when? (none / 0) (#31)
by adimovk5 on Sun May 22, 2005 at 10:50:35 PM EST

.....Old people in general are just a drain, so (in general) we should put them on icebergs and wish them farewell.....

At which age (in general)?

[ Parent ]

Retirement age usually. /nt (none / 0) (#32)
by wre on Sun May 22, 2005 at 10:59:02 PM EST



[ Parent ]
Squandered contributions (none / 1) (#54)
by pyro9 on Mon May 23, 2005 at 05:52:46 PM EST

Old people in general are just a drain, so (in general) we should put them on icebergs and wish them farewell.

I remember a number of contributions my grandparents made, from imparting wisdom to me as I grew up, to community services. If you can imagine no such contributions, it means youeither didn't have living grandparents, or you squandered everything they had to offer.

If not for our society's habit of moving far away from home, the problem of affordable daycare might well be solved for many as well. After all, retired parents often have the time, typically have a special interest in your children's wellbeing that daycare services don't, and you have a long term personal knowledge of how they handle children.


The future isn't what it used to be
[ Parent ]
bad idea (none / 1) (#66)
by godix on Tue May 24, 2005 at 03:30:53 AM EST

Old people in general are just a drain, so (in general) we should put them on icebergs and wish them farewell.

You're throwing away a valuable resource doing this, we should sell them to the pet food industry instead. Either that or Taco Bell.


- An egotist is someone who thinks they're almost as good as I am.
[ Parent ]
Life expectancy (none / 0) (#5)
by doru on Sun May 22, 2005 at 09:15:55 AM EST

Senior should be redefined as a person who has reached the average life expectancy for his birth year.

How do you define this parameter ?


I see Rusty's creation of Scoop as being as world changing an event as the fall of the Berlin wall. - Alan Crowe

Simple, really (none / 0) (#6)
by sholden on Sun May 22, 2005 at 09:58:24 AM EST

You fire up the time machine.

--
The world's dullest web page


[ Parent ]
lifespan parameter (none / 1) (#10)
by adimovk5 on Sun May 22, 2005 at 12:04:19 PM EST

There is a large industry devoted to computing life expectancy. You have a life expectancy when you are born. It includes your potential to live beyond infancy and childhood. Once you reach adulthood, your chances of reaching an age older than that are higher. You have outlived many people born in your year group. The National Center for Health Statistics tracks the data for Americans and insurance companies also use the data for determining insurance risks and rates.

[ Parent ]
So at what point... (none / 0) (#39)
by daveybaby on Mon May 23, 2005 at 08:53:21 AM EST

do you get to find out what the life expectancy for your birth year is? This isnt actually know 100% accurately until every person born in that year is dead.

At what point do you think a sufficiently accurate estimate could be made? Bear in mind that we would really want to know as soon as we wanted to start paying into a pension.

[ Parent ]

at birth (none / 0) (#41)
by adimovk5 on Mon May 23, 2005 at 09:17:16 AM EST

The calculations start immediately and are adjusted constantly. You will never have a 100% accurate figure. However, the estimates are close enough that you can make good guesses and plan your pension. The best plan is to start paying early. The sooner you invest, the quicker the miracle of compound interest can begin.

If you live your life waiting for 100% accuracy in everything, you will miss much of life.

[ Parent ]

Sweet Jeeesus (none / 0) (#43)
by daveybaby on Mon May 23, 2005 at 10:07:50 AM EST

You'd be lucky to get +/- 100% by age 30, never mind anything remotely useful. If all youre saying is 'invest in your pension early because frankly, we dont have a fucking clue what life will be like in 50 years', then thats good advice, but its hardly new advice.

[ Parent ]
Get the government... (2.40 / 5) (#7)
by skyknight on Sun May 22, 2005 at 10:04:13 AM EST

out of the retirement business. If you have been an ant and set about diligently storing some fraction of the surpluses of your labor during your life time, then you ought to enjoy them. If you have been a grasshopper, carelessly frittering away everything you obtained on the day you got it, or worse still, on a day before you got it, without a mind toward the day when your income will be diminished or gone, then it ought to be your fate to starve. The present system supports grasshoppers and punishes ants. Is that the kind of world in which we want to live?

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
Okay, have you actually thought about this? (3.00 / 3) (#8)
by An Onerous Coward on Sun May 22, 2005 at 11:19:11 AM EST

Simple fact:  People who have to choose between breaking the law and starving to death generally break the law.  Even if you feel personally violated by the government's decision to steal from you to support those you see as too stupid and too lazy to provide for themselves,  you're probably better off because of that decision.

The current system doesn't "punish ants",  because currently there isn't means testing,  and nothing is stopping the ants from providing for themselves beyond Social Security benefits.

Thank you for the reminder that right-wingers are driven by ideology,  not rational thought.  Further,  thank you for the reminder that the ideology is "gimme, gimme, gimme".

[ Parent ]

Ha. (2.00 / 2) (#9)
by skyknight on Sun May 22, 2005 at 11:29:34 AM EST

As per usual, people such as you are just too damned lazy to actually engage ideas head on and thus resort to the political party version of ad hominem. I have been called everything on this site, from leftist to right-winger, liberal to neo-con. If that kind of pathetic and simplistic generalization and pigeon holing helps you to sleep at night, then by all means, live in your fantasy world.

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
You misunderstand the nature of ad hominem attacks (3.00 / 2) (#20)
by An Onerous Coward on Sun May 22, 2005 at 04:53:17 PM EST

Ad hominem arguments are generally worthless,  and I'll admit that the last sentence of my post was gratuitous ad hominem.  But if I present arguments A, B, and C,  and both B and C are ad hominem attacks,  what does that say about argument A?

Nothing.  As far as rigorous logic goes,  each of the three arguments has to stand or fall on its own merits.

So,  my apologies for pigeonholing you,  attacking your character,  or whatever.  But I did engage your ideas,  and am interested in your response to said engagement.

[ Parent ]

What it says... (none / 0) (#84)
by skyknight on Wed May 25, 2005 at 12:50:53 PM EST

The fact that you're willing to engage in ad hominem attacks says a lot. Argument A may well be valid, but if drop crap arguments B and C into the mix, people are going to doubt your argumentative ability and dismiss you. That is basically what happened in this case. Arguing well is a difficult task in much the way that implementing security systems is. As a defender, you only have to be wrong to really go down in flames.

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
True enough. (none / 0) (#86)
by An Onerous Coward on Wed May 25, 2005 at 01:12:07 PM EST

Our comments aren't contradictory.  I'm just looking from a strictly logical viewpoint,  whereas you're also concerned with the reactions of an audience of not-strictly-logical listeners.

Like I said,  I really am interested in your counterarguments.  But if you feel it's not worth your time,  that's all right.  It just means that somewhere along the line,  you learned the valuable lesson that life is too short to waste arguing with random dumbasses on the Internet.

It's a sign of a healthy mind.

[ Parent ]

Well, let's try this again. (none / 0) (#87)
by skyknight on Wed May 25, 2005 at 01:15:43 PM EST

You put forth whatever argument it is you want to make, devoid of ad hominem or other such flawed argumentative constructs, and I will reply to the best of my ability with a reasonable counter-argument. I can barely remember what it is we're supposed to be disputing at this point. In the middle of our having this thread, my membership expired and I ceased getting comment reply notifications. See the story presently on the front page for an explanation. :-)

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
Here it goes. (none / 0) (#90)
by An Onerous Coward on Wed May 25, 2005 at 09:35:10 PM EST

Your basic premise was that the current Social Security system acts to punish those who are productive and who plan for their retirements,  while rewarding those who go into debt, fail to save for retirement, etc.  You likened it to the story of the ants and the grasshopper.

My response amounted to three arguments:

  1.  Even if you feel personally ripped off by the deal the government struck with the elderly,  you benefit from it by not having nearly as many desperately poor elderly around.  The only direct benefit I could think of was a possibly reduced crime rate,  and others have questioned whether the elderly commit a statistically significant amount of crime in any case.  I need to think of other benefits that accrue even to those who don't care about the plight of the elderly poor.
  2.  Given the lack of means testing,  I don't think it's right to say the system is "punishing" responsibility.  It gives everyone a certain minimum basis for retirement,  and those with the ability have ample opportunity to improve their standing from there.
Of course,  in order to set up that minimum basis,  a transfer of wealth has to occur.  You see that as a punishment of productivity.  I see it as a cost of maintaining a fair,  just,  and well-functioning society.  I'm sure we'll have some argument over the definition of "fair".  

3)  You're evil and I hate you.  Possibly this was a gross overreaction to your use of the word "starve".  Sorry.

Others have mentioned that Social Security doesn't just protect those who were irresponsible in planning for their retirement.  It also protects those who simply had bad luck with their investments,  unforseen expenses,  etc.  I would also add to the rightfully protected list those who simply didn't have the physical or mental capacity to hold down a job that made retirement planning a serious option.

[ Parent ]

OK, here we go... (none / 0) (#95)
by skyknight on Thu May 26, 2005 at 08:08:06 AM EST

First, I'm going to make the assumption that, on the whole, responsible people are perfectly capable of funding their own retirement without government intervention. To that end, it may be worthwhile to further define "responsible".

By responsible, I mean the kind of people who don't foolishly pin all of their retirement hopes on a handful of stocks and then cry foul when those stocks crash. You can bet that they wouldn't have complained if one of their stocks had been Intel or Microsoft. They took a risk that was unreasonable for their position, and they paid the price. I don't want to hear about how Enron ruined the retirement of thousands of people. If you were stupid enough to pin your retirement on Enron stock, then you probably ought to be weeded out of the population. If you spread your investment across stocks, bonds and currencies, and further diversify by buying into the markets of different countries and spreading your purchases across different sectors, then you're basically guaranteed good winnings on a long time horizon.

By responsible, I mean the kind of people who have contingency plans for times when not everything is going right. This means having cash reserves in one form or other to deal with momentary disruptions in one's life. This means buying at least catastrophic coverage health insurance, disability insurance, and perhaps life insurance if you have a family.

So, if you've humored me thus far, we're assuming that responsible people are capable of taking care of themselves. As such, now we'll consider a Social Security style system in which the government provides a "minimum basis for retirement". First of all, consider the fact that there is no perfectly efficient system for redistribution of wealth. The IRS burns a good chunk of the money on its operating expenses. The SSA no doubt skims a good chunk of change off of the top as well. As such, from the outset we've got diminished operating funds

This alone is punishment for the responsible, because, if you buy my assumption, they could have very well managed their retirement on their own. They are being forcibly stripped of some fraction of their wages, having a fraction of that collection squandered on overhead, and then having that contribution pooled with those of others in a way that provides them no choice whatsoever about how it is invested. If you are young, you ought to be taking higher risks and operating on a longer time line. If you are old, you ought to be taking less risks and operating on a shorter time line. If you are carrying high interest loans, you ought to be paying them off because they will more than offset the piddling returns offered by SS. Alas, the government holds the reins and your lot is thrown in with everyone else's. This is the classic government paradigm: "one size, fits nobody".

Worse still, putting such enormous wads of cash in the palms of government bureaucrats is a very dangerous proposition, one that we ought to avoid whenever possible. The bigger the government's budget, the greater the temptation for corruption. Do you really trust the government to handle your retirement funds, to guarantee that there will be money for you fifty years down the road? How often does the US government smash the SS piggy bank, raiding it for funds to cover their reckless spending in other arenas? What assurances do we have that when push comes to shove that the money will be there? In the end, it's just another slush fund, used to buy the votes of old people during election season and tapped when overzealous politicians can't be bothered with annoying details such as balancing the budget.

I think it should be scrapped.

What, then, of the people who aren't as smart as us and won't plan for their retirements? Well, that's where we ought to be thinking as "paternalist libertarians". Perhaps there ought to be an optional social security system, and perhaps the default option for citizens is to be enrolled in it. If you want to put your money elsewhere, then you can, but it will involve an explicit opt-out by the individual, perhaps with a sign-off indicating that the individual understands the risks of managing his own retirement and realizes that he is not entitled to government retirement funds from that point forward, unless he re-enrolls, at which point his benefits will be calculated based on what he puts into the system.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
I don't like your proposed solution (none / 0) (#98)
by An Onerous Coward on Thu May 26, 2005 at 02:28:57 PM EST

Your "paternalist libertarian" idea sounds like a wonderful compromise,  on the surface.  Those who want the protection of the state can have it,  and those who think they can do better on their own can make a go of it,  and take full responsibility for the results.

My concern is a result of a lovely,  illuminating study called Unskilled and Unaware.  The basic result of this tragically funny study is that the least competent among us are unable to accurately gauge their performance.  Exhibit B,  I guess,  would have to be "WB Superstar"[*].  This little tidbit on human nature explains a lot of this species' rampant stupidity.  It also means it's very likely many of the people who don't know how to manage their finances feel perfectly confident that they can.  Hence,  they would readily gamble,  most likely lose big,  and end up trading their house in the suburbs for an overpass near the projects.

I also read a statistic recently that said that 70% of people who pay off their credit card debt with a home equity loan end up just running up the credit card debt within a couple of years.  I'm sure most of those people refinanced with the intent of never going back into debt.  It's such a wonderful financial tool if used properly,  but it seems that most people overestimate their own ability to discipline themselves.

Curious:  What do you see as the basic difference between our philosophies?  Is it just that I don't see most people as being competent to manage their affairs,  and you do?  For me,  it all comes down to the ways people make choices.  People are notoriously bad at gauging risk,  which explains why they'll go crazy over three cases of E. coli and completely ignore the risks of their all-McDonalds diet.  

But the foundational principle of capitalism is that people can accurately gauge the costs and benefits of their actions.  For example,  if water quality varies between two neighborhoods,  and a person is trying to decide which neighborhood to purchase a house in,  they should be able to figure out exactly how much of a discount they need before it makes sense to purchase the house with chromium-fortified water.

But in this case,  even a PhD epidemiologist would have trouble making even a rough guess.  In that case,  I think it's good for the government to enforce safe drinking water.  That greatly simplifies the choices that people have to make,  and brings them back down into the range where the average person has a fighting chance of choosing what is in his best interests.

Side note about Enron:  The reason so many people had their retirement ruined wasn't because the individual employees were pinning their hopes on Enron's stock.  It was because management decided to use Enron stock to fund the company pension plan.  You could argue that the employees shouldn't have taken the pension promises at face value,  should have looked deeper into how it was being managed,  and should have recognized that the setup would lead to a double whammy if things went bad.  But I think that's too much to ask of any but the most savvy and paranoid.  

There's a lot I haven't covered.  Maybe I'll get to it later.

* Painful,  sadistically funny spoof of American Idol,  where they carefully weeded out anyone with even the slightest hint of talent.  The performers were,  without exception,  very confident in their musical talents.

[ Parent ]

So, let me ask you this... (none / 0) (#104)
by skyknight on Sun May 29, 2005 at 08:58:21 AM EST

Let's presume for a second that that article isn't bunk. I haven't pored over it looking for flaws. I'm just going to go off of the abstract and outright assume for the sake of argument that it does not contain any falsities, bogus experimental procedures, or fallacious statistical reasoning. The study speaks of people whose "test scores put them in the 12th percentile". So what is your argument? Are you arguing that we need to design our system to cater to the needs of the bottom 12% of people in our society? Is that really the kind of world that you wish to inhabit? Why not design a world that rewards competence? What glory is there in shackling everyone to assure equality?

Freedom is messy, complicated, risky and often exhausting, but it's important to remember that the alternative is, to borrow the words of P. J. O'Rourke, "hay and a barn for human cattle".



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
Wow (none / 1) (#93)
by jreilly on Thu May 26, 2005 at 04:01:37 AM EST

The sheer beauty of your statement. Someone has engaged in ad hominem attacks, therefore you feel all of their arguments can be disregarded, because of who said them. Brilliant!

Oooh, shiny...
[ Parent ]
Um, no... (none / 0) (#94)
by skyknight on Thu May 26, 2005 at 07:35:32 AM EST

I disregarded them because of what he said. How is it that such a simple distinction is lost on you?

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
Wait, wait... (2.00 / 3) (#12)
by trhurler on Sun May 22, 2005 at 01:27:19 PM EST

I am eagerly awaiting your description of how a bunch of 65-70 year olds are going to commit armed robbery at the grocery store. Please do tell.

Do you realize that if we simply find a way to pay out all outstanding obligations and from this point forward gave people the 12.4% we're throwing into a fucking bottomless hole right now with the requirement that they invest it in index funds with 10% of that to be taken once at retirement as a way to fund the retirements of the few who might somehow get screwed up, everyone in America could retire WEALTHY and we would also massively boost our economy at the same time?

No, you're way too stupid to have figured that out. Your ideology(funny that you accuse skyknight of being a right wing ideologue, all things considered,) requires that government do things like this even if it does them badly, because you foolishly believe that a government guarantee eliminates risk. It doesn't. There is always risk. With the government's solution, there is huge risk, and the risks only get bigger with time as we've seen. With my solution, there is minimal risk, there are tools to mitigate it without horrible pain and suffering and benefit cuts and so on, and instead of harming the economy by draining money out of it and letting the government piss it away on things that aren't economically efficient, we boost the capital pool and allow the market to utilize those funds in an EFFICIENT manner that generates real returns and real economic gains for everyone.

The reason government is involved is because they get to spend the surplus and control everything. In exchange, people pay in their whole lives and get peanuts in exchange compared to what they'd get from my alternative.

I just totally kicked your ass. Any reply you make will either be ideology at work sans facts or else gross misrepresentation of the facts(most likely because you don't even know what you're talking about when it comes to things like index funds and so on.) There is no counterargument, BECAUSE I AM 100% RIGHT, PERIOD. My facts are correct, my reasoning impeccable, and you are simply wrong.

--
'God dammit, your posts make me hard.' --LilDebbie

[ Parent ]
I find your declaration of victory... premature. (3.00 / 2) (#19)
by An Onerous Coward on Sun May 22, 2005 at 04:45:59 PM EST

Further,  I don't think the arrogance you display is even remotely justified by the quality of your ideas.

First,  let's discuss your apparent belief that the aged are practically incapable of committing crime.  First,  not all crime is of the violent sort.  Aged people would be more likely to supplement their income through shoplifting.  Then there is the fact of guns.  If I were being held up by a person with a gun,  it wouldn't matter to me if it was a 20 year old bodybuilder robbing me or a 90 year old granny.  I'd still hand over my wallet rather than try to overpower the mugger.  Finally,  an aged person might have a son or daughter who--though being in as bad a financial situation as the parent--might be willing to do something illegal to help them out.

My premise is simple:  If someone has to choose between crime and starvation,  only the saint chooses starvation.  Since most of us aren't saints,  the decision to allow a large and destitute fraction of the population would lead to an increase in lawlessness.

Your analysis of your own proposed solution (investing in index funds) depends on something you yourself probably don't believe:  That the stock market is a magic money machine that, over time, delivers a consistent return on investment.  It's not.  It's just a collection of companies that take your money,  and try to find ways to use it to make more money.

So,  any investments that could be made with the new influx of money once earmarked for the Social Security Fund would necessarily be more marginal investments than the ones currently being made.  In short,  each extra dollar put into the stock market would generate a smaller return than the dollars that came before.  But your solution demands that the market work the same multiplicative magic on every dollar that goes into it.

Then there's your assumption that the public sector is inherently less efficient than the private sector.  Much of the perceived difference is a simple result of the public sector needing to do a lot of the things that the private sector would never bother to do.  For example,  building infrastructure and providing services when the benefits are great but cannot be easily translated into a revenue stream.

Finally,  the costs of transitioning from a system where Generation-N pays for Generation-N-minus-one to a system where each generation pays for itself would add tens of trillions to the debt of an already near-bankrupt nation.  I don't see how the free market will work once the government goes bankrupt.

In closing,  I find your arguments unconvincing,  and wonder why you're so desperate to prove that you have the larger penis.

[ Parent ]

You lose some more (none / 1) (#21)
by trhurler on Sun May 22, 2005 at 07:09:22 PM EST

Further, I don't think the arrogance you display is even remotely justified by the quality of your ideas.
Like you'd know quality if it crawled up your ass and bit you in the colon.
First, let's discuss your apparent belief that the aged are practically incapable of committing crime.
A suggestion: look at the available data before making a fool of yourself. Even among the desperately poor, crime among the elderly is so rare as to be ridiculous. Yes, it does happen - but not enough to matter in making government policy.
First, not all crime is of the violent sort. Aged people would be more likely to supplement their income through shoplifting.
Just like they do today, right? Except... even among the homeless, those that old generally don't.
Then there is the fact of guns. If I were being held up by a person with a gun, it wouldn't matter to me if it was a 20 year old bodybuilder robbing me or a 90 year old granny.
Too poor to pay attention, but in possession of a $500 implement of doom. That'll be the day. Face it: granny is not going to buy a $50 Saturday Night Special off some street dealer. It just isn't going to happen.
I'd still hand over my wallet rather than try to overpower the mugger.
Oh, I'd hand over my wallet alright. And then I'd shoot the bastard and take it back. :)
Finally, an aged person might have a son or daughter who--though being in as bad a financial situation as the parent--might be willing to do something illegal to help them out.
The first almost sensible thing you've said so far. The only problem is, there's no reason to believe it. It is pure speculation.
My premise is simple: If someone has to choose between crime and starvation, only the saint chooses starvation.
Nobody starves in the US unless he is held against his will or chooses to starve. And I do mean nobody. Be serious.
Since most of us aren't saints, the decision to allow a large and destitute fraction of the population would lead to an increase in lawlessness.
It might. Then again, the assumption that there will be all these destitute people is wrong, as I've already said...
Your analysis of your own proposed solution (investing in index funds) depends on something you yourself probably don't believe: That the stock market is a magic money machine that, over time, delivers a consistent return on investment.
Eight percent amortized more or less since its inception. In order for index funds to fail, our whole economy has to fail, and if that happens, government isn't going to be able to pay benefits either. Be serious.
It's not. It's just a collection of companies that take your money, and try to find ways to use it to make more money.
And government is not a magical money machine either. In fact, it doesn't create wealth at all; the interest it pays on bonds is purely a function of raising tax revenues over time, which means that in order to actually pay back all those T-Bills Social Security is "invested" in, the economy MUST keep growing, which means index funds MUST keep making money for their investors. If that doesn't happen, Social Security is as fucked as anything else.
So, any investments that could be made with the new influx of money once earmarked for the Social Security Fund would necessarily be more marginal investments than the ones currently being made.
If you believe the market is adequately funded. That assumption has shown to be untrue every time it has been tested in the history of modern economies. Moreover, it doesn't take long asking around to realize that there are tons of things that are conceived of and simply discarded mainly because the people who thought those ideas up weren't in positions of authority to get the money to carry them to fruition. Are you absolutely sure every single one of those ideas was inferior to the ones that get carried out just because the person who thought it up wasn't able to fund it? That's nonsensical.
In short, each extra dollar put into the stock market would generate a smaller return than the dollars that came before.
Again, this is true if and only if the market is presently funded adequately.
But your solution demands that the market work the same multiplicative magic on every dollar that goes into it.
Actually, although I think that would come very close to happening, I don't rely on it. The influx of cash can be used less efficiently, as long as it is still generating a net positive return, and we'll STILL do better than Social Security.
Then there's your assumption that the public sector is inherently less efficient than the private sector.
Ask ten thousand economists, and you'll get the same answer every time. Economists do not promote public solutions due to their efficiency. They do it because they think it is necessary - and they're usually wrong. Government waste is legendary, and that's just the part of that waste we see. There is even more waste we DON'T see due to the actual disincentive to innovate anything. Innovations that work net their originators nothing but maybe a certificate of recognition. Innovations that don't work usually get someone fired or cause him to never get promoted again.
Much of the perceived difference is a simple result of the public sector needing to do a lot of the things that the private sector would never bother to do. For example, building infrastructure and providing services when the benefits are great but cannot be easily translated into a revenue stream.
Oddly enough, with the sole exceptions of legislature, military, and policing functions and the infrastructure needed to carry those out, nobody has ever been able to show a case where this is true. There have been lots of attempts, but they all end with "and private money could never have done this," without any attempt to demonstrate that claim whatsoever. Maybe you should either back up your claim with some reason to believe it or shut the hell up.
Finally, the costs of transitioning from a system where Generation-N pays for Generation-N-minus-one to a system where each generation pays for itself would add tens of trillions to the debt of an already near-bankrupt nation. I don't see how the free market will work once the government goes bankrupt.
You don't seem to understand. The reason we have the bad situation is because of government. The solution is not to perpetuate the mistake. Fixing it may be costly - that's true. NOT fixing it will be more costly by far, even if not quite as soon. Keep taking the poison, and things only get worse.
In closing, I find your arguments unconvincing, and wonder why you're so desperate to prove that you have the larger penis.
Actually, I'm unconcerned about anyone's belief regarding my penis. I just want you to know you have the smaller one. :)

--
'God dammit, your posts make me hard.' --LilDebbie

[ Parent ]
You're right. I'm about the dumbest person alive. (none / 0) (#52)
by An Onerous Coward on Mon May 23, 2005 at 03:32:15 PM EST

After all,  I responded to you.

I won't be making that mistake in the future.

[ Parent ]

creating a false dichotomy (none / 1) (#75)
by samu on Tue May 24, 2005 at 03:03:47 PM EST

why are we even accepting this false situation: "old people will turn to crime rather than starve". Are we forgetting the millions of charitable Americans who will help these people out of the goodness of their Christian hearts?

If there was no welfare program in the United States, I suppose the net effect would be a more powerful Church.

[ Parent ]

Charitable americans!!! Lol! (none / 1) (#80)
by Have A Nice Day on Wed May 25, 2005 at 05:43:11 AM EST

seriously, I've heard enough of you people spouting off about not giving your money tolazy jobless bums or old people who didn't put aside enough money to know that charity in the US would be a rare thing if it was left to people's consciences. The cajoling of priests may work but c'mon, I know I'd rather pay my dues to the state now and get them back when I need them rather than having to hope the next generation is generous enough to feed me.

--------------
Have A Nice Day may have reentered the building.
[ Parent ]
"you people" (none / 0) (#83)
by samu on Wed May 25, 2005 at 10:46:11 AM EST

I am an athiest and a believer in the ideals of communism. Your response is somewhat misdirected, while your point is good.

[ Parent ]
I don't think it would work (none / 0) (#88)
by An Onerous Coward on Wed May 25, 2005 at 01:45:29 PM EST

You're right.  As presented,  it is a false dichotomy.  I think I dismissed the possibility without sufficient consideration.

Though I'd like to be proven wrong,  I've got a rather pessimistic attitude towards the idea that private charity could make up any cuts in government services.  Here in America,  our savings rate is abysmal.  Something like 2%,  I believe.  The upshot is,  we're not even willing to stave off short term gratification for our own long term interests.  So there isn't much reason for me to suspect that we would be willing to do so for the benefit of others.

Further evidence comes from Representative Tom DeLay.  My impression is that he was leading the charge toward the elimination of government services even as he uses his own charitable foundation as both a personal piggy bank and a way to schmooze with lobbyists while skirting House ethics rules.  It's likely that much of his charity work is genuine,  but I believe the apparent contradiction is indicative of... well,  something.

I also agree with your supposition that such a shift would lead to a large increase in the power of religious organizations,  which I consider a mixed blessing at best.

[ Parent ]

my take on your debate (none / 1) (#22)
by khallow on Sun May 22, 2005 at 07:50:50 PM EST

Then there's your assumption that the public sector is inherently less efficient than the private sector. Much of the perceived difference is a simple result of the public sector needing to do a lot of the things that the private sector would never bother to do. For example, building infrastructure and providing services when the benefits are great but cannot be easily translated into a revenue stream.

You have lost this part of the argument. Government doesn't provide more efficient services. It doesn't happen. The two key problems are first, that there's no penalty for being inefficient. Second, government allows for rent-seeking. Ie, using the wondrous power of government, you can force people or the government to buy your product.

I have debated trhurler successfully before. But it requires an understanding of the subject.

Finally, the costs of transitioning from a system where Generation-N pays for Generation-N-minus-one to a system where each generation pays for itself would add tens of trillions to the debt of an already near-bankrupt nation. I don't see how the free market will work once the government goes bankrupt.

The transition will occur. The question is how long we'll fund Social Security before we kill it.

In closing, I find your arguments unconvincing, and wonder why you're so desperate to prove that you have the larger penis.

The stock market has a proven record of making a consistent high return for almost a century. Social Security OTOH has consistently declined in its return on investment ever since its creation. That is the typical pattern of a pyramid scheme. It's doubtful to me that anyone after the early crest of baby boomers is going to get a decent return on their Social Security payments. The government will find some way to weasel out of the commitment. My money is on understating CPI (Social Security payments are indexed to CPI).

Every time Social Security comes under new pressure, the Social Security proponents come up with a new fix that puts off the inevitable (the end of Social Security as a one-size-fits-all program). The current fix is "solvency", ie, cut payments by roughly 25% or boost taxes by 33%. So the Program can forge on saving tens of thousands of poor old people from starvation by forcing tens of millions of working people to participate in a bogus pyramid scheme.

Stating the obvious since 1969.
[ Parent ]

How (none / 0) (#53)
by pyro9 on Mon May 23, 2005 at 03:35:00 PM EST

I am eagerly awaiting your description of how a bunch of 65-70 year olds are going to commit armed robbery at the grocery store. Please do tell.

Probably mostly by shoplifting. If caught, play on sympathy: "durned memory, I forgot I had that!" or some such.

Otherwise, with a sawed off shotgun. Accurate aim not required, not much strength required. Shoot if anyone twitches since they don't stand a chance hand to hand.

Consider, you're ACTUALLY starving. Nobody will hire you because you're 'retired'. What do you and your peers have to lose by burning the capitol down in protest? If the cops kill you, you lost a few weeks of agonizing starvation, if they take you to jail, they have to feed you and give you medical care.


The future isn't what it used to be
[ Parent ]
a problem (none / 0) (#79)
by speek on Tue May 24, 2005 at 06:57:20 PM EST

Do you realize that if we simply find a way to pay out all outstanding obligations and from this point forward gave people the 12.4% we're throwing into a fucking bottomless hole right now with the requirement that they invest it in index funds with 10% of that to be taken once at retirement as a way to fund the retirements of the few who might somehow get screwed up, everyone in America could retire WEALTHY and we would also massively boost our economy at the same time?

It is often said that a pay-as-you-go social security system must inevitably fail because the ratio of workers to retirees is on a decline. This is usually followed by a proposal to convert it into an individual retirement account system that seemingly avoids this problem.

But hold on, I'm not sure there's any difference between the two. If we go with individual retirement accounts, we still have a problem with a declining work force in that this is a big inflationary pressure. Coupled with an enormous stock market bubble that's sure to be created by the influx of trillions, we're looking at a situation of lots of money chasing declining production (because of the work force shrinking). Retirees may have millions, but said millions may not buy them much after all that inflation. The point is: retirees are still dependent on the workers to produce what they need to live. All they have is money to pay for it, whose value is by no means guaranteed.

Contrast that with the pay-as-you-go system wherein workers are taxed to provide funds to the wealthy. The problem is the same - whether the declining workforce can produce enough to support the non-working seniors. If they can, then they can afford the tax. If they can't, then they can't, but the outcome is the same as with the individual retirement accounts that become worthless because of rampant inflation. In one case, inflation robs the wealthy of their social security benefits, in the other, constant reductions in benefit levels do the same.

The real difference is that a pay-as-you-go system "invests" the money in current seniors, who most likely spend it. An individual investment system invests the money in the stock/bond market.

In any case, what will make either system succeed or fail is how many kids people have, and how much productivity increases as time goes by. If productivity increases sufficiently, BOTH systems can remain viable. If not, BOTH systems fail (meaning seniors are forced back to work or are forced to move out of homes into government-run facilities or something like that).

The problem of overall productive sufficiency is the one in need of solving.

--
al queda is kicking themsleves for not knowing about the levees
[ Parent ]

An interesting point, but (none / 1) (#100)
by vectro on Sat May 28, 2005 at 11:24:03 AM EST

The key observation is that money that has been saved in retirement accounts (private or otherwise and as opposed to a pay-as-you-go system like Social Security) does not simply sit around; it is used to build infrastructure, do research, build new businesses, and generally support the future economy at the expense of the present one.

Certainly a declining work force will put enormous pressure on wage inflation, as the number of jobs stays the same but the number of workers declines. But this need not have a great effect on the economy as a whole; we can make up much of the labor imbalance with trade, exchanging our capital resources for other countries' labor.

In that outcome, the US really would become a "service economy"; a large proportion of the youth around would work to service the elderly, by taking advantage of imported manufactured products. I leave it as an exercise to the student as to the social consequences of this, but this future is not too far from today's Florida.

“The problem with that definition is just that it's bullshit.” -- localroger
[ Parent ]

for a limited time (none / 0) (#103)
by speek on Sat May 28, 2005 at 11:50:13 AM EST

a large proportion of the youth around would work to service the elderly

So we're still not getting away from the idea that the elderly are dependent on the kids to support them, one way or another, and the fewer kids we, as developed nations, have, the worse off we'll be as elderlies.

I did mention the main difference between the two systems is in how the money is invested. I don't think discontinuing investing in current elderlies is really an option, which of course, is Krugman's complaint about the plan. Going further, I would not easily agree that investment in the stock/bond markets is a better use of the money than giving it to elderly people to spend in the now.

The developing world may be able to stave off inflation in America for some time, but that will end too, as those economies begin to look more and more like Europe/America.

--
al queda is kicking themsleves for not knowing about the levees
[ Parent ]

support and punishment (3.00 / 5) (#11)
by adimovk5 on Sun May 22, 2005 at 12:34:41 PM EST

.....The present system supports grasshoppers and punishes ants.....

I can see how the system supports grasshopper but how does it punish ants anymore than the rest of the world? Grasshoppers have always lived on the talents of ants without rewarding them. Most companies are filled with grasshoppers. The hard working and/or talented ants do more than their share and receive the same pay. There are exceptional companies filled with ants but they are rare.

It is easy to say let the grasshoppers die. That would be easier if you knew the person was a cokehead who never contributed. What about the ants?

Imagine a guy who saves and bets on the wrong stocks. Or one who gets sick for awhile and loses the savings fighting illness but gets healthy again. Or the one who gets fired at 50 and has to start over.



[ Parent ]

What about... (none / 1) (#47)
by wre on Mon May 23, 2005 at 02:07:57 PM EST

What do we do about the people who get unlucky and fall through the cracks?

Recommend a good funeral home?

[ Parent ]

again, false dichotomy (none / 1) (#76)
by samu on Tue May 24, 2005 at 03:59:49 PM EST

the options for people who get unlucky and fall through the cracks are not the set of:
  1. massive government programs as they currently are implemented
  2. slow painful death


[ Parent ]
The suggestion was... (none / 1) (#92)
by Shajenko on Thu May 26, 2005 at 03:09:12 AM EST

...to punish grasshoppers. Most seniors who don't have their own savings accounts and live off of Social Security are just getting enough to survive. Punishing them would involve lowering this, meaning that they would either not make enough to survive, or you would compell them to work to make up the difference (and many of them simply can't work anymore). So how exactly do we punish them anymore without ensuring many of them will die a slow painful death?

[ Parent ]
sigh (none / 0) (#97)
by samu on Thu May 26, 2005 at 08:55:09 AM EST

perhaps extended families will live together more, as was the norm in fairly recent times. perhaps bill gates (or others) will donate a billion dollars per year and set up a large senior citizen retirement home in the pacific northwest. perhaps monkeys will fly out of my ass and bring food to the world's hungry. perhaps meaningful reform to social security will help.

at least one of those above was meant in seriousness. at least one was a joke. at least one was far-fetched. all of them outside of the false dichotomy of "let things stay as they are, reward the grasshoppers" and "cut 'em off, punish the grasshoppers, let 'em starve".

[ Parent ]

It never stops (none / 0) (#50)
by NaCh0 on Mon May 23, 2005 at 03:19:40 PM EST

It amazes me how liberals can always think of a reason not to promote self-sustenance.

--
K5: Your daily dose of socialism.
[ Parent ]
I think that's pretty realistic. (none / 0) (#91)
by An Onerous Coward on Wed May 25, 2005 at 09:58:48 PM EST

True self-sufficiency simply doesn't exist.  Okay,  there's Bob the Hermit down in the mountains of Montana.  He lives off the land,  makes his own loincloths out of dead chipmunks,  and once set his own fractured leg using a splint fashioned out of branches and his own hemp rope.  He owes that trick to the time he spent in 'Nam,  but we sent him to 'Nam,  so he doesn't owe us jack.  Just ask him.

The rest of us depend on others for everything.  You're not truly self-sufficient just because you managed to stash away $10M for retirement;  you still depend on society to honor your money by accepting it for goods and services.  In theory,  at least,  the rest of the world could respond to your bank account with a collective,  "We got all the work we wanted out of you,  so fuck off and die."  Further,  the only way you could make that money was by participating (in one way or another) in society at large.

"Progress" thus far has been marked by more and more sophisticated forms of interdependence.  The way I see it,  we all owe,  and we're all owed in return.  The debate is simply over the specifics.

[ Parent ]

It depends how you define self-sufficiency... (none / 0) (#96)
by skyknight on Thu May 26, 2005 at 08:12:04 AM EST

If you define it as something like "receiving goods and services only when the provider is receiving something in return that they value more highly", then it's reasonable for people to claim that they are self-sufficient. In many parlances, "self-sufficiency" doesn't mean living as a hermit, but rather creating one's own wealth as opposed to being a parasite.

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
We're all grasshoppers. (none / 0) (#56)
by guyjin on Mon May 23, 2005 at 07:05:30 PM EST

How much debt are you in?
-- 散弾銃でおうがいして ください
[ Parent ]
about 14K..... (none / 1) (#57)
by adimovk5 on Mon May 23, 2005 at 07:28:25 PM EST

.....and falling.

I racked up a lot of debt travelling around Europe. I did it knowing that I would have time to pay off the debt but might not have another opportunity to travel like that. I'm glad I did and I do more of it if I had the chance to go back in time.

[ Parent ]

Um, that's beside the point. (none / 0) (#85)
by skyknight on Wed May 25, 2005 at 12:52:30 PM EST

Yes, I am in debt now, but no I will not be in debt in the long run. My school loan debt, for example, is an investment that will most certainly pay returns. By the end of my life I will most certainly have produced more than I have consumed. Where exactly the break even point occurs is not really relevant.

It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
Get the government out of spending social security (none / 0) (#69)
by crustacean on Tue May 24, 2005 at 09:14:13 AM EST

don't you mean? Right now the money goes into a fictitious account and is used to buy treasury bonds. IOU's on yous and the grandkids.
Will take to the forest before the oil overlords annex Canada.
[ Parent ]
Yes (none / 0) (#72)
by rodentboy on Tue May 24, 2005 at 11:40:27 AM EST

Is that the kind of world in which we want to live?

You mean the kind of world that values mercy over justice? Yes, yes it is.



[ Parent ]
Four more suggestions (2.85 / 7) (#18)
by michaelmalak on Sun May 22, 2005 at 02:28:33 PM EST

  1. Transition Social Security to the states. Federal involvement is unconstitutional. This would have the immediate side effect of a lockbox, as the states couldn't inflate their way out of their obligations the way the Fed can.
  2. Forget transitioning from a regressive tax to a flat tax. Make it progressive.
  3. Tax based on local income conditions. Median family income where I live is $94,000. For example, under your proposal, a single wage-earner family at the median income where I live would pay an additional $600 (15% of $4000).
  4. Which brings me to the next point. Structure the tax so as to not encourage mothers to abandon their children at daycare. If a progressive tax is adopted, combine husband and wife's incomes so that having dual incomes is not a way to avoid taxation. The current regressive scheme automatically does this without requiring combining incomes -- about the only positive thing I can say about current Social Security.


--
BergamoAcademy.com  Authentic Montessori in Denver
Er (2.00 / 2) (#23)
by tetsuwan on Sun May 22, 2005 at 08:15:39 PM EST

"Structure the tax so as to not encourage mothers to abandon their children at daycare"
Whoa. That's the most blatant conservative social engineering idea I have heard in a while.

What's next, tying mothers to the house with a state sponsored rope? Or, while we're at it, structure the tax on alcohol so as to not encourage fathers to attend sleazy bars?

Njal's Saga: Just like Romeo & Juliet without the romance
[ Parent ]

Rope (none / 0) (#24)
by michaelmalak on Sun May 22, 2005 at 08:43:39 PM EST

What's next, tying mothers to the house with a state sponsored rope?
Eliminating no-fault divorce would be a good start.

--
BergamoAcademy.com  Authentic Montessori in Denver
[ Parent ]
well, at least (none / 0) (#44)
by orestes on Mon May 23, 2005 at 10:55:28 AM EST

this would be a nice way to lower the rate of divorce - fewer people would marry (children or not).

[ You Sad Bastard ]
[ Parent ]
Why? (none / 0) (#45)
by vadim on Mon May 23, 2005 at 10:58:33 AM EST

I don't get what's wrong with it. If people don't like each other anymore, why can't they just have a divorce without giving any explanations? They married voluntarily, they should be able to undo it the same way.
--
<@chani> I *cannot* remember names. but I did memorize 214 digits of pi once.
[ Parent ]
You forgot the one-sided case (none / 1) (#48)
by michaelmalak on Mon May 23, 2005 at 02:47:29 PM EST

If one spouse abandons the other, that should weight heavily in the division of assets and future income. In the era of No Fault Divorce, a wife can run away to "find herself" and be entitled to half the husband's salary for life, and a husband can run away with his secretary and have to pay only half his salary.

Some say the courts have tried to wash themselves of these family issues, but the result is financial injustice to spouses trying to put forward an honest effort. Perhaps as such injustices become more widely known, prenuptial agreements will become more popular. But right now, the laws defy common sense. It would be better to align the laws to expectations than to force everyone to have a prenuptial.

--
BergamoAcademy.com  Authentic Montessori in Denver
[ Parent ]

Ah, good point there (none / 0) (#49)
by vadim on Mon May 23, 2005 at 03:16:33 PM EST

I just don't know much about how it works. It sounds like a pretty good idea to me, but only if each side gets equal treatment, which is then adjusted to the circumstances
--
<@chani> I *cannot* remember names. but I did memorize 214 digits of pi once.
[ Parent ]
re: four more suggestions (none / 0) (#25)
by adimovk5 on Sun May 22, 2005 at 09:06:51 PM EST

  1. The states are finding having difficulty meeting their current obligations. I don't see how adding another obligation would help. If the state defaulted, what would happen to the seniors? What would happen to a citizen who was born and raised in one state, worked in two others, then decided to retire in a third? A federal solution, though imperfect, does not have these problems.

    The constitutionality of acts is a sound arguement. However, since Social Security has existed since 1935, you will be unable to kill the program on those grounds. The only place in which citizens are able to argue on constitutional grounds these days is where things are specifically forbidden or explicitly spelled out. Congress has usurped many powers that it has no right to.

  2. There is no inherent virtue in a progressive tax. Citizens don't have a greater obligation because they are more successful.

  3. Taxation based on local differences would increase the complexity of the system. Any increase in complexity invites corruption. Who will decide what is appropriate in each area? It will be politicians and lobbyists. It would be better to let economics and personal mobility sort things out.

  4. A flat tax eliminates the ability of anyone to social engineer or game the system. There would be no fancy calculations to make and no distoritions in the economy.



[ Parent ]
flat tax or flat-rate tax? (none / 0) (#27)
by wre on Sun May 22, 2005 at 09:15:51 PM EST



[ Parent ]
flat rate tax <nt> (none / 1) (#28)
by adimovk5 on Sun May 22, 2005 at 10:00:59 PM EST



[ Parent ]
I've got a better idea! (2.50 / 6) (#30)
by j1mmy on Sun May 22, 2005 at 10:38:17 PM EST

Eliminate social security.


votes? (none / 1) (#33)
by adimovk5 on Sun May 22, 2005 at 11:04:11 PM EST

Who in Congress would vote on such an idea?

[ Parent ]
all of them (none / 1) (#37)
by j1mmy on Mon May 23, 2005 at 08:25:42 AM EST

would vote on it. none would vote for it.

[ Parent ]
I'm sure they could if they wanted, (none / 0) (#40)
by TheVenicianEffect on Mon May 23, 2005 at 09:06:51 AM EST

after all rich people don't need it and don't benefit from it. Just use some quaint slogans like "Hand up, not hand out" and people will go with it.

[ Parent ]
Jestly Spoken, Truly Meant? (none / 1) (#34)
by Peahippo on Mon May 23, 2005 at 04:14:28 AM EST

Yes, strange, isn't it, that with all the "proposals" cropping up, the most logical course of action is to wind down the SS system and then get rid of it. There is no more logical place for YOUR money then YOUR pocket.

But nobody in the set of public proposals wants to do that. Both the major parties have very vested interests in continuing the SS system in one form or another. Collectively, the US Congress can't let go of the income since it uses it to pad the budget by means of a money-for-bonds swap.

All public proposals for "reforming" Social Security are generally schemes to fuck the working class right in the ass. This includes the article in question.


[ Parent ]
sad but true (none / 0) (#42)
by j1mmy on Mon May 23, 2005 at 09:17:43 AM EST

congress was leeching social security funds the day after it was enacted. the system has been broken since it was illegally instituted. it should be phased out and eliminated, as you say.

i can't think of any social program that doesn't fuck the working class right in the wallet, much less the ass, as such things often contribute more to poverty and crime than they help.


[ Parent ]

fucking moron (none / 0) (#58)
by circletimessquare on Mon May 23, 2005 at 08:09:42 PM EST

we owe old people

you owe them

you're just a selfish bitch because you don't recognize that


The tigers of wrath are wiser than the horses of instruction.

[ Parent ]

i owe noone (none / 1) (#71)
by j1mmy on Tue May 24, 2005 at 09:52:02 AM EST

in order for me to owe someone something they have to:
  1. give something to me
  2. make me agree to give something back in the future
this is the very nature of a loan, and the obligations of a loan are spelled out in a contract.

i have no contract with any old people.

i owe them nothing.

if you want to get stupid, i could argue that they owe me. they continued to elect legislators that passed laws that seize my income for their benefit without my consent. i was born in this country and never given the option of not participating in social security, so frankly, i'm being robbed.


[ Parent ]

It's a shame that.... (3.00 / 3) (#35)
by Have A Nice Day on Mon May 23, 2005 at 07:50:10 AM EST

It's a shame that National Insurance (in the UK) and I guess Social Security tax in the US is a lie.

I'm all for gov't supporting the old, much better than they do now, these people were tax paying members of society for a long long time and they deserve a break. I don't want to spend my dotage breaking bones whilst I try to stack shelves at a supermarket just so I can aford to eat.

The problem comes in the way it'simplemented. It's not that national insurance goes in to some big savings account and then pensions are drawn from this, but that the current workers pay for the elderly. So the money you pay the gov't for welfare when you can no longer work is actually gone. If it was the other way around then growing numbers of seniors would be no problem, 'cos they'd already have the money aside for all of them.

Also, I'd like to exclaim "Lol! USians!" at some of the comments below. Some of you fuckers are stone cold, dead, black-hearted bastards.

--------------
Have A Nice Day may have reentered the building.
How about using a little (none / 0) (#36)
by TheVenicianEffect on Mon May 23, 2005 at 08:06:34 AM EST

corporation tax here and there to cover poor people's pensions?

corporations don't pay taxes (none / 1) (#38)
by adimovk5 on Mon May 23, 2005 at 08:51:11 AM EST

Any tax levied on a corporation is passed on to taxpayers. When you tax a corporation, the corporation figures the tax into the price of the product. The purchaser pays the tax. The corporation still maintains its profit margin. Worse yet, most people who buy products have no idea that it contains an imbedded tax. Those that do know tend to forget at purchase time.

A sales tax on the other hand would help things. You would be reminded of how much the government and its social programs cost you everytime you looked at a receipt. Instead of getting angry on April 15, Americans would be angry almost every day.

There are many proposals around that advocate a national sales tax. One of the most popular is the Fair Tax or National Retail Sales Tax.

[ Parent ]

Politicians won't pass a national sales tax (none / 0) (#63)
by NaCh0 on Tue May 24, 2005 at 02:55:17 AM EST

A sales tax on the other hand would help things. You would be reminded of how much the government and its social programs cost you everytime you looked at a receipt. Instead of getting angry on April 15, Americans would be angry almost every day.

You nailed the reason why senators will never pass a national sales tax. Sadly, senators value themselves over the country and none of them want to shine the spotlight on slimy business as usual tricks.

--
K5: Your daily dose of socialism.
[ Parent ]

Add means testing (none / 0) (#46)
by wiredog on Mon May 23, 2005 at 12:46:41 PM EST

Social Security pays the same whether you're making 50K+ (or 1E6+) or 0 in outside income. Means testing would free up money for the people on the lower end of the scale.

Wilford Brimley scares my chickens.
Phil the Canuck

re: means testing (1.50 / 2) (#55)
by adimovk5 on Mon May 23, 2005 at 06:33:29 PM EST

Ideally means testing would mean support for only those who really need it. In the real world means testing is arbitrary and distorting. No matter where you set the limit, you will have large groups of unhappy people. Some will be unhappy because it's too much, some because it's too little. It also discourages people near the limit from trying to achieve more.

If you have no means test, everyone receives the same baseline. If you want more then you work or invest so that you can have more. If you are poor, you are able to work for more without the disincentives. If you are rich, the benefit is too small to matter.

Eliminating means testing also keeps at least part of the program free of lobbyists and endless arguements over how to set the means test.

[ Parent ]

One huge problem (3.00 / 2) (#51)
by godix on Mon May 23, 2005 at 03:31:02 PM EST

The investing money in other nations thing, I think this would provide a fertile ground for some major future problems.

Social Security is large enough that no matter what nation we're talking about it'd be a major factor of their economy. Currently all investment goes into the US and any benefit from that investment aids the US economy (granted, the way we do it isn't really all that helpful). Taking this and putting it into another country would boost the other countries economy greatly at the expense of our own economy. Kinda like the world bank but on a much larger scale. I suppose this could be used to aid poor nations but that'd be a risky investment and we don't want to be risky with Social Security. Instead we'd invest in first world nations which would use the investment to directly compete with US businesses. If there's going to be any benefit from investing social security it should be a benefit to the US.

When the US would directly control trillions of another nations economy we'd use that like a stick. 'Do what we want or we withdraw all our money at once and watch your economy go into a tailspin.' Imagine what type of bad will would exist if the US was able to successful browbeat France into the Iraq war with this type of threat. Even worse, imagine if France stood firm and we really did pull trillions out of their economy at once. Investment in another nation will be used as a threat in the future and if that threat was ever carried out it would really fuck over another nation.

And finally, we'd become so tightly bound with another country we'd take an unhealthy interest in their internal issues. A countries own finances, their infrastructure, their foreign policy, EVERYTHING that country does that would influence it's economy would be under US scrutiny and we'd be sure to tell them when we think they're doing wrong. And don't think we'd hesitate to go to war for or against them. Internal unrest would be met with US troops if we thought it was enough of a problem. I don't think it's in the US interest to become this tightly bound with another nation and I certainly don't think it's in the other nations interest to allow it.

I imagine you'd suggest spreading it across several nations rather than just one. Social Security is so large that wouldn't help, that'd just make the issues I mentioned happen with several countries instead of one. There just aren't enough safe first world countries to invest in to spread things around enough to avoid these types of problems.

So your other ideas are fine but don't let the US government directly control trillions of another countries economy like that.


- An egotist is someone who thinks they're almost as good as I am.

re: investing (none / 0) (#60)
by adimovk5 on Mon May 23, 2005 at 08:39:42 PM EST

You've brought up some good points that I hadn't considered....

.....The investing money in other nations thing.....
The investment would be in companies in other nations not in the nations themselves.

.....Currently all investment goes into the US and any benefit from that investment aids the US economy.....
Currently all surplus is used to purchase Treasury Bonds which is a demand against future taxpayers. It isn't an investment. It's a Ponzi scheme.

.....would boost the other countries economy greatly at the expense of our own economy.....
Investing in dividend generating securities would pump money from other countries to the United States, at no expense to US taxpayers. It's true that the capital would flow overseas but the returned dividends would make up for it. Also, a healthy world economy would provide trading partners for Americans.

.....Do what we want or we withdraw all our money at once.....
In order to sell stocks, you must have a buyer. Many mutual funds have learned this harsh lesson. Large investment often prevents easy escape unless you are willing to take heavy losses. It's the old supply and demand thing.

.....we'd take an unhealthy interest in their internal issues.....
Doesn't the world constantly complain about the lack of interest the US takes in it?

.....Internal unrest would be met with US troops if we thought it was enough of a problem.....
The US doesn't need an additional excuse to use force.

.....I imagine you'd suggest spreading it across several nations.....
That's exactly what I would suggest. It would probably be a good idea to limit the amount of investment in any single country and also to limit the amount of investment in any single company. It would be wise both for the US to spread investment and the host country to remain free of fear of excessive influence.

.....There just aren't enough safe first world countries to invest in.....
The key isn't investing in safe countries. The key is investing in equities that return dividends regardless of which foreign country the company is in. The dividends will produce a revenue stream that will allow the Trust Fund to prosper.




There are dangers involved with investing abroad. They pale in comparison to the dangers involved if the Trust Fund began domestic investments. I don't think the government should have actual ownership of any domestic company.

[ Parent ]

Income investing can be risky (none / 0) (#62)
by NaCh0 on Tue May 24, 2005 at 02:15:05 AM EST

Dividends at a few cents per share won't matter much if the stock price drops. It doesn't even have to drop much -- just more than the yield. A recent example can be found from anyone who bought an oil stock 6 weeks ago. They may have to wait a long time before they can get out of the stock without a loss.

.....we'd take an unhealthy interest in their internal issues.....
Doesn't the world constantly complain about the lack of interest the US takes in it?

Yes. Doesn't the world also constanly complain about the involvment of the US? It's a game that we can't win. To GWB's credit, he realizes this and doesn't care much for world opinion.

--
K5: Your daily dose of socialism.
[ Parent ]

re: investing (none / 0) (#64)
by godix on Tue May 24, 2005 at 03:15:12 AM EST

The investment would be in companies in other nations not in the nations themselves.

For quite a lot of the world this is often a very murky area. Sometimes investing in a company is almost the same thing as investing in the country. Either way the net result would be the same, the US government would have direct control of a significant portion of that countries economy. Any sane country would react poorly to that. Hell, look at how America reacted to Japan in the 80's and that wasn't even an attempt by Japans government to gain control over US companies.
Currently all surplus is used to purchase Treasury Bonds which is a demand against future taxpayers. It isn't an investment. It's a Ponzi scheme.

I'm not going to disagree but I do note that a giant ponzi scheme in some ways is better than the alternatives. Real investment gets us into the problems I brought up if it's foreign investment or it gets into direct government competition in the stock market/boardroom and Americans tend to greatly dislike that idea.
It's true that the capital would flow overseas but the returned dividends would make up for it.

... if it was a wise investment. Which is a rather questionable assumption.
Large investment often prevents easy escape unless you are willing to take heavy losses.

Are you saying that America isn't willing to take havy financial losses to hurt someone we're pissed at? Think carefully about how much Iraq has cost before answering...
Doesn't the world constantly complain about the lack of interest the US takes in it?

Generally yes, usually right after they bitch about how much interest the US has taken in Iraq, Afghanistan, North Korea, etc. And in regards to Israel you can generally find someone bitching that the US has taken too much interest AND too little interest. Lets not even talk about the rest of the middle east, they're a little touchy on this entire exporting our culture thing. What the world bitchs about is rarely something America should be concerned with much less develop our foreign policy around. In this case I think you can look at the likely results of foreign investment and decide if they'd be good or not without once considering what France will say.
The US doesn't need an additional excuse to use force.

This is totally off topic but that link is BS and you should know it. Come on, they list building up in Saudi Arabia during 90/91, invading Iraq and kuwait in 91, and bombing Iraq in 1998-2001 as three seperate events when reality is those three were all part of the same action. The Vietnam War gets counted six seperate times as well. I'm impressed they managed to keep WWII to one entry, they could have really racked up the score by listing 'Invaded France. Invaded Italy. Invaded Japan. etc'. They list 'intervening' in the Iran-Iraq War like we actually had troops involved in that or something. And you gotta wonder about someone who puts the 1980 Iraq hostage rescue attempt, assisting Bolivia with drug lords, aiding in evacuating foreigners duraing a civil war, and WWII all on the same list like they were all examples of Americas military gone wild or something. If you couldn't figure out that link was a pure propaganda piece the last line ,"Since early this year more than 40 Palestinian leaders assassinated through surrogate Israel", should have tipped you off this isn't a real 'America's list of terrorism', it's just another troll like K5 sees a couple times a month.
It would probably be a good idea to limit the amount of investment in any single country and also to limit the amount of investment in any single company.

This would be a great idea if only there wasn't such a small number of countries and companies to invest in. Especially if what you're looking for is stability and a sound investment which is what this plan would require.
The key isn't investing in safe countries. The key is investing in equities that return dividends regardless of which foreign country the company is in.

The second sentance REQUIRES the first to be true. The very first question you should ask is 'will this company likely be around for awhile?' If the company is based in Somalia and god knows what will happen because of the wars the answer is 'probably not' no matter how good the company looks on paper. You have to have a safe nation to have a company that'd be considered a safe investment for dividends. The list of safe nations is, unfortuantely, somewhat short.


- An egotist is someone who thinks they're almost as good as I am.
[ Parent ]
seperate vs continuous (none / 0) (#81)
by adimovk5 on Wed May 25, 2005 at 07:00:32 AM EST

.....three seperate events when reality is those three were all part of the same action.....

I wasn't checking every single event, only that the writer had captured most of them. Does it matter whether someone lists the events in Iraq as three seperate events or one that lasts from 1990 to 2001? I suppose it does if you are counting "individual acts of madness" as some try to do. I don't see it that way. I see a country that is very aggressive but portrays itself as a "peaceful democracy". Diplomacy isn't always the answer and the use of force is sometimes justifiable, but troll or not, the list as a whole is cause for thought.



[ Parent ]

Yes it does matter (none / 0) (#99)
by godix on Fri May 27, 2005 at 07:32:48 PM EST

Not because I disagree with the basic idea behind the list, America is not a peaceful country, but because it's so blatently biased. If someone links to Free Republic or Indymedia as their SOLE source for a claim then people will dismiss them as biased kooks. When you link to that list as your SOLE source you risk being labeled as nothing more than a biased piece of shit like your source is. If you want to make the case that America is a country that frequently fights then that's fine but don't rely on a list that so obviously biased as your only source, that's about as moronic as the people who say 'well I heard on Rush that...'


- An egotist is someone who thinks they're almost as good as I am.
[ Parent ]
the central problem with social security (3.00 / 2) (#59)
by circletimessquare on Mon May 23, 2005 at 08:32:59 PM EST

is that the change's gw bush wants is for people to take care of themselves, to plan for old age.

if you don't think ahead, you could find your ass on the street.

that's obviously true.

but the problem with this fiscal conservative truth is that human nature is what it is: not enough of us plan for the future.

do you honestly see that changing?

so therefore i have two questions for fiscal conservatives:

  1. do you deny the majority of people don't prepare for their old age? you honestly think just yelling "wake up people!" is going to fundamentally alter human behavior?
  2. and if you don't deny that enough of us don't prepare for old age, and you have made peace with that fact, is it your assertion that you just don't mind seeing our old folks dying on the streets?
the only sane and rational answers to those two questions are "no" and "no". only selfish and/ or heartless assholes and morons answer otherwise to those two questions.

therefore, social security should NOT be overhauled according to bush's plan. we should continue to be taxed to provide a social safety net for our elderly.

the problem of course, is that there are more elderly around every day. and advances in healthcare means that it costs more to keep them alive. and so, in classic human nature, if every single one of those old people isn't kept alive to the last possible second with the most advanced most expensive gadgetry that didn't exist 3 months ago, it's a fucking crime. boo hoo hoo. who pays for that moron?

what happens is there reaches a point where the working young folk can't be reasonable expected to shoulder the economic burden. old age is a triage center. only if you are a moron can you expect everyone to contribute 90% of their income so even the most undeserving asshole gets the most advanced medical support just to keep them alive another day. that's why medical malpractice insurance is through the roof. everyone blames doctors for what simple old age does.

the truth is we're fucking morons because we see the ravages of age in terms of justice and look for someone to blame. more useslessness of human nature. sometimes, no one is to blame. death and the decrepitude of old age doesn't give a fucking shit about justice. there is no justice: you die. get used to it. don't blame the doctors. don't blame your government.

what we need is simply later retirement ages.

because just as that better healthcare keeps us alive in a state of advanced decrepitude longer, it also keeps us alive in a state of perfectly acceptable mental and physical health longer.

so where the burden is too great, we should be expected to retire at a later age. retirement age should be more flexible. i think it should change yearly, adjusted for medical technology costs and elderly population and youthful working population. for awhile, it will simply trend up, but there is a time in the future where retirement age might trend down, that's not unforeseeable. the factors involved are complex and beyond our judgment and foresight. so change it yearly.

that's the real answer, not the financial conservative's answer which only leads to more classism and social darwinism: the rich ok, the poor left to die in the streets.

fuck that you heartless pricks.

if there are a lot more elderly, then we have to be taxed more. and if healthcare costs go up, then we get taxed more. maybe we change the retirement age up if the burden gets too great. but that's it.

and you don't like that?

well i for one don't like seeing our old folks dying in the streets. so fuck off.


The tigers of wrath are wiser than the horses of instruction.

You're missing one thing (none / 0) (#65)
by godix on Tue May 24, 2005 at 03:19:42 AM EST

Most people don't save for their retirement unless they're forced to, IE taxes for social security. Bushs plan still FORCES you to save it just changes how you save. His plan is not voluntary, under it Americans are required to save and invest, and make fairly safe investments at that, thus there shouldn't be any old fucks dying in the streets. At least not any more than currently. There are several good reasons to oppose Bush's plan but this isn't one of them.


- An egotist is someone who thinks they're almost as good as I am.
[ Parent ]
and you trust the fucking government (none / 0) (#74)
by mpalczew on Tue May 24, 2005 at 01:58:18 PM EST

If the government tells you that you will get 0-1,000,000 per year during retirement.  Which number do you think it will really be closer to?  It's a bunch of crap if the government really wanted to invest social security money, it could do so itself.
-- Death to all Fanatics!
[ Parent ]
The new caring, sharing, cuddly circletimessquare. (none / 1) (#70)
by OzJuggler on Tue May 24, 2005 at 09:46:03 AM EST

Don't blink, folks, or you'll miss it!

All those old folk are dying scared and lonely in their plush retirement homes paid for by their ungrateful liberal capitalist children; that's the real reason you won't see them dying _on the street_.

And you missed the main reason why human nature and lack of planning for retirement won't change. One's capacity for enjoying and living life is greatest when one is young, and resources need to be spent on enjoying now instead of saving. Plus if you don't spend up early on, how are you going to get all those good stories to tell in the retirement home.
"And we almost went to the Eminem concert, but then decided we should put the $300 towards our mobile home for when we're 55...." Being reactive and spontaneous *is* life, and planning and "proactive" attitudes are emotionally barren by comparison.

Grandpa OzJuggler (who needs a bit of a lie-down now)
"And I will not rest until every year families gather to spend December 25th together
at Osama's homo abortion pot and commie jizzporium." - Jon Stewart's gift to Bill O'Reilly, 7 Dec 2005.
[ Parent ]

Hope I die before I get old. (none / 0) (#68)
by IceTitan on Tue May 24, 2005 at 04:45:15 AM EST

Being who I am, in recent years I decided that I find it detestable to require support from anyone. Thinking to old age, I have mostly decided that I would infact rather not live than have to have someone feed, cloth and whipe my ass again. That said, I thought that when the time comes, I would unburden the world of myself.

Then comes along that ornery fuck Hunter S Thompson. His simple act made such things a little easier to chew on, for tose that know something about anything.

But to my point. I was thinking the other day about where and how I might take care of things, so to speak. If it's still around, I think it might be funny to walk up to the SS main building and blow my brains out all over the steps. I'd leave a note of course, alone with several thousand dollars in my saved retirement money for my sister of course.

I can't decide if it would necessarily be a bad thing if more people decided to do this before I'd get the chance. And for those of you who think I should go ahead and do it now, you first. And as always, fuck 'em if they can't take a joke.
Nuke 'em from orbit. It's the only way to be sure.

Social Security is a farce (none / 0) (#73)
by cdguru on Tue May 24, 2005 at 01:50:28 PM EST

One essential point that a lot of people are missing - with great help from the media and current politicians - is that the money being paid in to the system today is not going into Treasury Bills for the benefit of those paying in.

This needs to sink in. Current funds are paid out to current retirees. Period.

Yes, there is some surplus today, which is put aside. This "aside" is quickly spent on other government programs with a promise to repay it. There is no growing stack of money somewhere.

It needs to be said that today there is no means testing going on. There is some progressive taxation so you are taxed on your Social Security income when your total income exceeds about $36,000, but you continue to receive your full benefit. The question about means testing is very simple - do you think it is reasonable to pay Social Security benefits to Bill Gates in 15 years or so? Even if he is taxed at 50% on those benefits? How about Warren Buffet? How about everyone else currently receiving benefits with income over one million dollars today?

The next farce (or, if you prefer lie) from Social Security is that your benefits are connected in any way with your contributions. Yes, if you pay in for a short period of time you may not receive the same amount as someone that paid in for 20 years. However, if regardless of your wages over time, you do not receive significantly greater benefits because you earned more money or paid in more money to the system. Your benefits are not closely connected to either length of time you paid in or the amount you paid in.

The problem with Social Security - which was clearly understood in 1935 - is that it depends on a growing pool of workers to support retirees. The system is untenable when the pool of workers is no longer growing. From 1935 until at least 1970 and probably 1980 this wasn't a problem. It was unimaginable in 1935 that the pool of workers would ever shrink. The post-war era and later saw tremendous growth in workers and nearly all of the growth was in areas covered by Social Security.

Today, however, the pool of covered workers is shrinking and we are expecting to cover the retirees from the growth period. A new surge in job creation, especially jobs such as those in the 1950's - factor workers - would solve the problem. Given that manufacturing is now almost exclusively a non-US occupation, this is unlikely to happen.

Converting the system from the current structure would involve a transition as drastic as it was in 1935 when there were no funds to cover the retirees then to be covered. It would mean no further contributions to the current retirees collecting Social Security - this money would instead go to the people paying in when they retired. But, regardless of how difficult the transition would be, it could be done now with fewer people collecting than in the future. The further this conversion is pushed off, the more people it will impact. And the larger the transition cost will be. Tying your contributions to your retirement would break the requirement of a growing worker pool out of the system.

The only other reasonably honest solution is to convert the system from an imaginary pension scheme as it is now to just clearly "elder welfare". We would simply raise the income tax to cover this. This at least would be honest and would not suffer from the kind of worker-contribution shortage that the current system is structurely committed to.

Problems with investment (none / 1) (#77)
by Gord ca on Tue May 24, 2005 at 05:02:16 PM EST

Require personal investment accounts

Yeah, these are such a great idea in theory.

I was chatting with a lady near retirement the other day. I asked about where her retirement funds went. She said she put them in the 'Balanced' fund because a) she liked the idea of her money being balanced and b) it was the lowest risk option presented to her.

Now, there is a real possibility that this is a good place for her money, but I would be rather unsurprized if it isn't.

We have to remember that the people that understand what a great thing having investment choice is are the people who know how to invest. When people don't know how to invest are forced to learn, they learn a bit, but really not enough. Having plenty of uninformed investors isn't good for the market, it's very bad for said people's money.

If I'm attacking your idea, it's probably because I like it

"End employer mandated contributions" (none / 1) (#78)
by Sacrifice on Tue May 24, 2005 at 06:12:46 PM EST

You've forgotten about the minimum wage ...

Question about income tax (none / 0) (#82)
by daani on Wed May 25, 2005 at 10:37:39 AM EST

I'm not an American. Is income over $90,000 tax free in the United States? Surely not. Can someone give me a quick explanation?

Thanks :)


tax free (none / 0) (#89)
by adimovk5 on Wed May 25, 2005 at 08:05:15 PM EST

Income in America is tax free only if you are wealthy and are able to hire lawyers to help hide your money from the government.

The $90,000 limit is the point after which Social Security taxes are no longer assessed. Social programs such as Medicare and Medicaid don't have a limit. The income tax collected as revenue for the general fund also has no limit. Why Social Security has a limit is due to a murky combination of politics, lobbyists and money.

[ Parent ]

Social Security is not the problem. (none / 0) (#101)
by vectro on Sat May 28, 2005 at 11:30:48 AM EST

The real entitlement mess is not social security, but rather medicare. As this chart in this Economist article shows, Medicare can be expected to dwarf social security by a factor of 3 over the next 80 years.

Pensions reform should nonetheless be an important issue to address, but in this respect it is but the tip of the iceberg.

“The problem with that definition is just that it's bullshit.” -- localroger

Private contributions by default (none / 1) (#102)
by vectro on Sat May 28, 2005 at 11:37:50 AM EST

One great way to raise the private savings rate and encourage people to save for retirement without twisting anybody's arm is to make saving the default option. I quote from a recent Economist article:
Rather than focusing on tax incentives, recent economic research suggests politicians ought to look harder at what stops people saving. A slew of studies by behavioural economists suggest people are deterred from thrift by the decision-making involved. Poorer people, for instance, are more likely to be enrolled in private retirement plans if that is the employer's default option than if workers have to elect to enrol. In one study by Brigitte Madrian of the Wharton School, University of Pennsylvania and Dennis Shea of the United Health Group, shifting to automatic enrolment raised participation among poorer workers from just over 10% to 80%. Other studies suggest that people will raise their saving rate as their earnings increase, provided these increases are automatic. Behavioural economics suggest many intriguing policy ideas, such as encouraging employers to make membership the default option for pension plans.


“The problem with that definition is just that it's bullshit.” -- localroger
Means test/poverty line etc. (none / 0) (#105)
by jolly st nick on Sun Jun 05, 2005 at 03:32:37 PM EST

Eliminating poverty among seniors wouldn't be all that difficult economically. Politically on the other hand... The reason that means testing these programs doesn't work is that people don't support programs they don't benefit from in a direct and obvious way. If these programs functioned as an effective economic insurance, it would benefit people above that line by reducing their risk, but without a check in the mail, it doesn't feel like a benefit. If you cut off benefits at income bracket N, the level of support among people in income bracket N+1 drops precipitously. That's the reason that Republicans have been historically more enthusiastic about means testing and similar measures whereas Democrats have not been. It's not that Republicans want to do anything for the poor, it's that they want to reduce political support for programs aimed at helping the poor. It's not that Democrats want to send money to upper middle class people, it's that they need those people to support the program. So, we have what is, practically speaking, and absurd system, an anti-poverty program that pays more money to wealthier people.

Senior Security in the Information Age | 105 comments (96 topical, 9 editorial, 0 hidden)
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