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Old 04-17-2015, 09:38 AM
 
Location: Great State of Texas
86,093 posts, read 72,534,315 times
Reputation: 27566

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There's always the shadow economy which is what happens when taxation gets too great.
Estimates put the US shadow economy at about $2 trillion.

Cash is "King" for a reason and First National Bank of the Mattress just might provide more wealth and prosperity in the long run than a digital trail of every penny you earn which can then be used against you.

Am I being too dire ? Too tin foil hat ?

Why no mention of raising FICA ? Why no mention of reform to go back to the original intent of SS ?
About 57 million receive SS each month but only 37 million of them are retired folks that paid into the system.

Who Gets Social Security? | National Academy of Social Insurance
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Old 04-17-2015, 09:44 AM
 
Location: Myrtle Creek, Oregon
12,275 posts, read 12,516,106 times
Reputation: 19440
Quote:
Originally Posted by ilovemycat View Post
You know what could help SS become solvent again? Immigration reform. Because we need workers. When I began giving pre-retirement seminars in the early 1970's for SSA, there were 7 workers for each beneficiary. In 2012 there were 2.9. By 2030 it is projected to be 2. However, the system was solvent when there were 3 per beneficiary. So, the goal is attainable.

Folks, SS is a huge success story. It needs to be addressed, not by giving people less, but by finding revenue streams to strengthen it and expand it. A recent vote in the Senate got 42 Senators to expand SS. Having a benefit tied to your lifetime of work, payable until you die, increasing with inflation, covering your beneficiaries- all things the present system does, we need to fight to preserve it and fight like hell.

We also need a functioning Congress. Previous Congress's were able to institute major SS reforms that strengthened the system for decades. But Christie's idea is not the way to begin.
I agree 90%. My only quibble is the idea that SS is insolvent. It is not, and won't be for a couple of decades yet. There are many simple and relatively painless ways to assure that solvency continues indefinitely.

My favorite scheme is just to broaden the tax base. If mechanization and automation are eliminating 70% of the jobs, just tax the machines. If ditch diggers out out of work, tax the backhoe. If carpenters are out of work, tax the power saws and air nailers. If factory workers are out of work, tax the robots that replaced them. If file clerks and stenographers are out of work, tax the computers.

The process of automation is removing more and more jobs from our society. No system can survive if it is funded by taxes on workers that won't even exist in the future. Anyone who ignores that is not engaging reality.
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Old 04-17-2015, 10:30 AM
 
2,296 posts, read 1,563,056 times
Reputation: 2737
Quote:
Originally Posted by TuborgP View Post
Lot of the analysis of the Christie plan leaves it wanting in transparency and perhaps asmokescreen (typical Christie) means testing is getting the attention and hoopla and does little to save money. Most of the savings comes from raising the retirement age which isn't new, ground breaking or popular.
Not to beat a dead horse, but yep. If Christie wants to not give benefits to those that have contributed hundreds of thousands then give them back contributions plus interest ! I'd settle for 5%.

Last edited by Burkmere; 04-17-2015 at 10:54 AM..
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Old 04-17-2015, 11:36 AM
 
Location: Los Angeles area
14,018 posts, read 17,747,361 times
Reputation: 32309
Default Insurance or not?

Quote:
Originally Posted by Cnynrat View Post
But that's not the way the program was ever implemented. That's like saying "If you think of it as something that it never was it might make more sense per Christie."

Sure, I know it's been referred to from time to time as an insurance program, but eligibility for benefits has always been based on age and your earnings/contribution history, so making it an insurance program represents a fundamental change to the nature of the program.

Should that happen, and particularly if it happens immediately as Christie's proposal does, it's only natural to expect that people who have paid taxes supporting the system for long periods only to arrive at retirement and find out it's fundamentally changed will be very upset.

This is why I think any significant changes need to be phased in over time, and people already retired and very close to retirement should be protected from significant changes.

Dave
Are you aware that when a worker dies young, his minor children are insured to receive support until they turn 18 (or some age, if not 18)? That way the widow is not left with no source of support to raise the children.

Also, we are all insured against being destitute in old age provided we have worked 40 quarters or more paying FICA taxes. Those 40 quarters of FICA taxes are the premiums. If we live long enough we get the benefits of that particular form of insurance.

It absolutely IS insurance. Are you going to quibble that if we go back to 1937, the earliest beneficiaries didn't pay premiums? While true, that is ancient history.

Why does eligibility for benefits being based on age and contribution history disqualify SS from being insurance? Age is the defined criterion (or being a minor dependent or widow of a deceased worker, as noted above), just like having an accident (loss) is the defined criterion for collecting on auto insurance. And paying higher premiums (just like auto insurance) means you get higher benefits (i.e., greater coverage limits), even if they are not entirely proportional in the case of SS.

Please explain yourself.
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Old 04-17-2015, 12:15 PM
 
6,353 posts, read 5,164,700 times
Reputation: 8527
Quote:
Originally Posted by mathjak107 View Post
keep away from the rest of us then . the 50% point for a 65 year old where half are alive and 1/2 dead is 83 for a man and 85 for a woman .

if you don't know anyone who lived to 62 that is either pathetic or a lie.
Maybe the poster is 13...
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Old 04-17-2015, 01:29 PM
 
Location: North Idaho
2,172 posts, read 2,085,764 times
Reputation: 2599
Quote:
Originally Posted by Escort Rider View Post
Are you aware that when a worker dies young, his minor children are insured to receive support until they turn 18 (or some age, if not 18)? That way the widow is not left with no source of support to raise the children.

Also, we are all insured against being destitute in old age provided we have worked 40 quarters or more paying FICA taxes. Those 40 quarters of FICA taxes are the premiums. If we live long enough we get the benefits of that particular form of insurance.

It absolutely IS insurance. Are you going to quibble that if we go back to 1937, the earliest beneficiaries didn't pay premiums? While true, that is ancient history.

Why does eligibility for benefits being based on age and contribution history disqualify SS from being insurance? Age is the defined criterion (or being a minor dependent or widow of a deceased worker, as noted above), just like having an accident (loss) is the defined criterion for collecting on auto insurance. And paying higher premiums (just like auto insurance) means you get higher benefits (i.e., greater coverage limits), even if they are not entirely proportional in the case of SS.

Please explain yourself.
First, the topic of the thread is all about the old age benefit. I agree that the survivors benefit paid to minor children is insurance, but that's not what Christie's proposal addressed, or what we are talking about here.

Insurance works by pooling assets (i.e. premiums in the normal commercial sense) across a population to protect against a risk that not everyone will experience. In the case of auto insurance the risk is having an accident. In the case of homeowners insurance the risk is having a fire, or being burgled, etc.

You might cite life insurance as an example of something that everyone experiences, but here the risk you are insuring against is really the risk that you die young. People who die young die without having paid much in premiums, and their benefits are subsidized by those lucky enough to live a long life and have paid many more years of premiums. The payout for those lucky enough to live a long time is often not financially beneficial - i.e. the heirs may have had more money had the decedent invested the money paid in premiums rather than buying insurance.

Note that the concept of insurance is very difficult to make any sense of it everyone in the pool will experience the risk in the same way.

Speaking of the SS old age benefit, the criteria for that benefit has always been solely based on your age and your lifetime income/payments into the system. To add another criteria, specifically that you also experience a certain level of poverty in old age clearly represents a fundamental change to the system.

Calling it insurance as an attempt to dismiss Christie's proposal as merely a minor change to the program makes no sense to me.
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Old 04-17-2015, 01:35 PM
 
29,782 posts, read 34,880,403 times
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Quote:
Originally Posted by Burkmere View Post
Doesn't make sense.
Yes it does make sense. I keep trying to say that reform will weaken support for the broad based SS program and the number of more affluent, well educated etc will become more in favor of privatization which is and will be the end game for many elected officials and donors.
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Old 04-17-2015, 01:40 PM
 
29,782 posts, read 34,880,403 times
Reputation: 11705
Quote:
Originally Posted by Burkmere View Post
Not to beat a dead horse, but yep. If Christie wants to not give benefits to those that have contributed hundreds of thousands then give them back contributions plus interest ! I'd settle for 5%.
And there in is the path for creating support for Privatization. By a certain age many affluent folks will realize that there current financial path is going to decrease their SS benefits and the value added benefit of saving will decrease. They will realize they are better off saving on their own. As with pension reform financially sophisticated employees are beginning to believe that with increased contributions and decreased benefits they are better off without the pension and saving on their own and having a nest egg they control and can keep. Imagine if they tamper with spousal benefits as some advocated it will be even more advantageous to have your own nest egg instead.
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Old 04-17-2015, 03:24 PM
 
Location: Great State of Texas
86,093 posts, read 72,534,315 times
Reputation: 27566
Quote:
Originally Posted by TuborgP View Post
Yes it does make sense. I keep trying to say that reform will weaken support for the broad based SS program and the number of more affluent, well educated etc will become more in favor of privatization which is and will be the end game for many elected officials and donors.
I think you may have hit on something. Privatization has been talked about for years now but nothing was ever done. This would spur the privatization to occur outside of SS.

Then SS will end up becoming another welfare program for low wage earners..put in $x and get back $xx when you retire.

But it won't solve the problem and just make it worse if high wage earners flee SS FICA jobs.
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Old 04-17-2015, 03:59 PM
 
2,296 posts, read 1,563,056 times
Reputation: 2737
Quote:
Originally Posted by TuborgP View Post
And there in is the path for creating support for Privatization. By a certain age many affluent folks will realize that there current financial path is going to decrease their SS benefits and the value added benefit of saving will decrease. They will realize they are better off saving on their own. As with pension reform financially sophisticated employees are beginning to believe that with increased contributions and decreased benefits they are better off without the pension and saving on their own and having a nest egg they control and can keep. Imagine if they tamper with spousal benefits as some advocated it will be even more advantageous to have your own nest egg instead.
I'd have no problem with this as long as there's a fair way to transition those that are close to collecting social security to prevent them from losing it. And no, it's not an insurance program.
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