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The wars were funded by deficit spending, SS can't be funded with deficit spending. The bailout money was paid back.
Any Federal program or plan linked to the general fund within a unified budget can benefit from deficit spending. If the political will is there, so will be the money. Fiat money can always be created if we the people have the desire.
What we the people and all the money in the world might not be able to provide is all the future desired real goods and services. Those are the real limits of our systems, as they have always been. WW2 has already proved that.
What do you think the money is invested in when you privatize SS? Under the current system SS takes the money and distributes it to current retirees. Any excess funds are used to buy treasury bonds; any deficit is remedied by cashing in treasury bonds or cutting payments.. There is basically no way to make money on SS since your payments are dependent upon having more and more workers, but going into the future we will need fewer and fewer workers.
In Australia you have to put 9% of your money into a retirement account and you get to choose among several different investments - investments that all pay more than Government bonds. When it is your turn to retire you are guaranteed a bare minimum, but you can only collect if your account balance withdrawals fail to exceed the established minimum.
Given historical US returns, somebody contributing $500/month will have about $2.7 million by the time they are 67. $2.7 million will give you enough to withdraw $90K for 30 years, plus have money left over due to growth during retirement.
Any Federal program or plan linked to the general fund within a unified budget can benefit from deficit spending. If the political will is there, so will be the money. Fiat money can always be created if we the people have the desire.
What we the people and all the money in the world might not be able to provide is all the future desired real goods and services. Those are the real limits of our systems, as they have always been. WW2 has already proved that.
SS isn't linked to the general fund though. The only time there is a link between the general fund and SS is when the treasury bonds are cashed in, but that is more on the accounting side.
SS isn't linked to the general fund though. The only time there is a link between the general fund and SS is when the treasury bonds are cashed in, but that is more on the accounting side.
Excess SS tax collections beyond needed current payouts go to the Treasury and then into SS held bonds. As long as there are such links it is only a matter of political will to ensure future moneys are there.
Excess SS tax collections beyond needed current payouts go to the Treasury and then into SS held bonds. As long as there are such links it is only a matter of political will to ensure future moneys are there.
Sure, if you change the law to allow SS funds to come out of the general fund, but then you open SS funding up to politics. SS is set aside from the general fund to keep payments immune from political pressure. You could also transfer funds from general fund to make up any SS shortfalls, but that won't work for long.
I love your optimism but let me tell you about my actual experience. I put $300pm into a deferred compansation account for years. When the bottom fell out of the market about 3 yrs ago (not sure of date); I ended up having less in my account that I had paid in, and I am sure you know that when you lose money like that; even when the market goes up it takes @ least 5 years probably longer to make up what has been lost. I am glad I have a retirement account through my employer because I do want to retire some day. AND as wonderful as your plan sounds please explain how private companies that invested their retirement funds in the market went bankrupt (yes there were private retirement accounts that went bankrupt) during the fiasco that began with ENRON? I am not saying it will happen again but it could happen and any investment manager will tell you "you should not invest money you can't afford to lose". I think people should start retirement accounts if at all possible, but to privatize SS is always going to be too risky for the needed payoff. If you have information that will guarentee we won't lose money, I am sure we would all like to hear about it.
I have an on-line social security account, which I use rarely to check things, but mostly to change direct deposit information. BTW the on-line system is great. Probably designed by Google in that period of time when Google was welcome in Washington in 2009-2010
So last night I was trying to log in, and had password problems. Apparently I cant read my own handwriting. After three failed tries, the system suspended my account, not unusual for situations like this, private sector or government.
Unfortunately, Social Security does not have an on-line process to un-suspend an account. Some companies have a process where an account is suspended for a defined period of time. Some companies have a procedure where one call call and after jumping through a few hoops, the account can be un-suspended by a person in the security department.
Social Security, however, tells me the only way my account can be un-suspended is for me to read back the code texted to me. Well, my phone is a dumb phone. I cant read a text without disconnecting the call. The passcode is good only for 10 minutes and the phone wait when I call is about an hour, and the agent in Washington is adamant that she cannot call me back in 60 seconds so I can look at the text and write down the code.
The alternative is to drive 30 miles to my local SS office, waste a lot of time there waiting in line, not to mention a few gallons of gas, just for something as simple as a reset.
So my account will be suspended forever because I cannot meet their idiot draconian process. Amazing. Has Government never heard of customer service? Oh wait. We are just sheep to them. The only thing they think we are good for is more tax money to support their inefficient bureaucracy.
So that's yet another reason I hate government.
I'd be willing to bet you can read the text while on a call on your phone. As such, this would make the problem with your inability to use your phone, vs. their ability to process your information. Social Security is ripe with fraud. So they take more precautions then your email account does. If I suspend my bank account from the wrong password, I have a similar process to what you said above. I get an email and a text, with a code. When I call in, I give them the code, then answer some questions to get my account back.
I love your optimism but let me tell you about my actual experience. I put $300pm into a deferred compansation account for years. When the bottom fell out of the market about 3 yrs ago (not sure of date); I ended up having less in my account that I had paid in, and I am sure you know that when you lose money like that; even when the market goes up it takes @ least 5 years probably longer to make up what has been lost.
I don't see how that's relevant. Equities are for long term holding and bonds are for short term. The DJIA was 14,094 on 3/12/2007 and then dropped to 6627 by 3/6/2009, but rebounded to 14,512 by 3/22/13. Meanwhile, the bond market was increasing in value which should, depending on allocation, offset losses and provide spending money. The mutual funds performed better of course.
Quote:
Originally Posted by Frydazechild
I am glad I have a retirement account through my employer because I do want to retire some day. AND as wonderful as your plan sounds please explain how private companies that invested their retirement funds in the market went bankrupt (yes there were private retirement accounts that went bankrupt) during the fiasco that began with ENRON?
I'm not sure I follow your question. Companies do go bankrupt, but that doesn't affect your investment unless you were invested in the BK company. We can minimize that risk by not allowing people to buy individual stocks through their retirement account.
Quote:
Originally Posted by Frydazechild
I am not saying it will happen again but it could happen and any investment manager will tell you "you should not invest money you can't afford to lose". I think people should start retirement accounts if at all possible, but to privatize SS is always going to be too risky for the needed payoff. If you have information that will guarentee we won't lose money, I am sure we would all like to hear about it.
I would follow the Australian superannuation model. What they do is guarantee a min base level of support, but you can only access the support if your retirement funds fail to deliver that min amount.
The returns on SS just get worse the younger you are. I can invest in a bond fund and get better returns.
Sure, if you change the law to allow SS funds to come out of the general fund, but then you open SS funding up to politics. SS is set aside from the general fund to keep payments immune from political pressure. You could also transfer funds from general fund to make up any SS shortfalls, but that won't work for long.
It's all politics! There is no 'locked box'. Money can be created.
The real limits are how much in terms of concurrent real goods and services our future younger population is willing to transfer to seniors.
It's all politics! There is no 'locked box'. Money can be created.
The real limits are how much in terms of concurrent real goods and services our future younger population is willing to transfer to seniors.
I've hit my limit. It's one thing if they were poor, I have no issue with welfare, but there is no reason why my money should go to Warren Buffet just because he is old.
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