How should we fix social security? (pay, work, business, poll)

[middle-aged mom]

Originally Posted by jmgg

The crazy thing is that SS would be perfectly solvent had government not stolen from it tossing in IOU's just like Harry and Lloyd in Dumb and Dumber. Everyone loves to talk about it like at it's inception what a Ponzi scheme it was. No, it was a solid program destroyed by politicians over the years trying to cover up for their budget mismanagement.

Stolen?

To earn a return, it is necessary to invest.

By law, since inception, surpluses are required to be invested in treasuries which results in money government can borrow.

Guess somewhere along the way, Congress could have chosen to invest in stocks. Can you imagine Congress critters cherry- picking which companies to invest in. Can you imagine the lobbying " choose me"? And can you imagine the consequences of a bad investment?

[nicet4]

Originally Posted by Frank DeForrest

Phase it out. Yes it's a Ponzi and no the govt isn't authorized to force a retirement scheme on the people

I'm all for that but only on one condition.

If you opt out and get sick the government owes you nothing in the way of disability pay, which comes from social security, or anything else that social security provides for such as the millions of widows and children who rely on social security for their lives.

What a lot of people tend to forget is social security is a lot more than just giving old geezers cash money.

What if you find yourself on a dark road some night when a deer hops out in front of you, you swerve, lose control and run into a tree suffering a broken back and can no longer work? What about your wife and children, Frank? What does society do; wheel you out onto the sidewalk to live in beg?

What happens if you develop rheumatoid arthritis? What should I do; not give a damn about what happens to you or your family? What if you have children ages 7, 5 and 3?

Yeah, go purchase a disability policy and life insurance? Yeah, right. Go find me a disability policy that will pay $3,000/month with inflation protection that might have to last 40, 50 or 60 years. If you could find it, and I don't think you can, you couldn't afford it which is why most private insurance conks out at 24 months.

Life insurance? A help to be sure and everyone should have some but I look back to when my family was young 40 years ago $250,000 was considered a lot of money and, back in 1976, $250,000 was equivalent to $1,059,042 so it was a lot of money then but not now.

If you purchased a million dollar policy to protect your family today what would it be worth in 20, 30 or 40 years?

As a hard right winger I believe social security is one of the better things our government has produced. It goes a long way to keeping the dying and begging off the street.

If something happens to you the last thing I would want to see is your family destroyed for lack of money to survive on.

I've been working since 1966 and about three years ago I did a "what if" spreadsheet on what I would have if I had only taken the money I paid in, along with my employers portion which for half my life I was self employed so I paid that as well, and deposited it in a simple bank passbook savings account.

I looked at historical tax rates along with historical savings account interest rates and discovered if I had done that I would have had right around $800,000 in my account. That wasn't calculated on a mutual fund, money market or other investment fund just a simple bank passbook savings account.

That was three or four years ago and at 68 I am still working, still putting money into social security and I wouldn't doubt that my passbook savings account would be worth at least $850,000 when I do start collecting benefits when I turn 70.

My social security statement states that over $200,000 in real money has been deposited between what I paid in taxes and my employers contribution. That $200,000 plus figure doesn't reflect inflation or what I might have if simple interest had been added.

Right now it is estimated social security benefit, if I collect at 70, will be $3,100/month.

I'll be 70 and it would take over 64 months or 5 plus years just to get back the principle I paid in.

If you consider the $850,000 I would have had, had I deposited all the money into a bank passbook savings account, it would take 274 months or 22.8 years for me to get all my money back.

Hey, I hope I live to see 93 but time will tell.

Everyone need to remember social security is an insurance policy that is not about dying but what if you live?

I believe social security gets a lot of crap from people that have no idea what they are talking about.

[GHOSTRIDER AZ]

Originally Posted by BentBow

I can build a house, if I have cash to do so. Or I can take out a loan. The deal is, the money that is needed for growth, was squandered on freebies to buy votes. Debt, is now the new growth.

Sadly you are correct. Eight years negative growth and People like Hilary and except our lives as is.
That is really sad.

[ContrarianEcon]

Originally Posted by Tonyafd

That's what Trump says. How do you go about doing that?

My plan is rather non conventional

Originally Posted by Tonyafd

Economic activity is cyclical like solar activity. We really have no fudge room regarding interest rates. Short term rates are about as low as they can be.

Mortgage rates have been dropping and that is largely why we haven't been having a recession.

Originally Posted by Tonyafd

Fifty years ago we were the last man standing from WW 2. We exported enormous amounts to the rest of the world. Today the opposite is true. According to the CIA the current account is a negative 484 billion. That is 484 billion that ceases to change hands in the United States every year because it is somewhere else. The current account is the trade deficit.

My plan. Put the rest of the world under pressure to pay US minimum wage or higher, up the US minimum wage (a lot), Print cash to start small businesses with. About $1 trillion.


If you want higher rates then you need to have inflation to fight with them. You want inflation then loan out enough money to drive it, or increase wages to drive prices higher and start money flowing again. We aren't being able to get inflation (wages going up) by loaning out more money, so drive wages higher by statute. (The minimum wage law.)

[Redraven]

I didn't vote.
In order to "fix" the Social Security Trust Fund, IMO the FIRST thing that has to be done is for the Treasury Department to pay all the IOUs that were created by Congress "borrowing" money from the Fund! If THAT money were to be returned, the Fund just might be in better shape!
However, I do agree that the Social Security payments should not be capped. ANY person who is paid an income of any kind should pay the tax regardless of how much they earn. You make $10K per year, you pay the tax on all earnings. You make $10 million per year, you pay the tax on ALL earnings. You get a $20 million bonus for Being Exceedingly Handsome, you pay the tax on it.

[InformedConsent]

Originally Posted by Redraven

I didn't vote.
In order to "fix" the Social Security Trust Fund, IMO the FIRST thing that has to be done is for the Treasury Department to pay all the IOUs that were created by Congress "borrowing" money from the Fund! If THAT money were to be returned, the Fund just might be in better shape!
However, I do agree that the Social Security payments should not be capped. ANY person who is paid an income of any kind should pay the tax regardless of how much they earn. You make $10K per year, you pay the tax on all earnings. You make $10 million per year, you pay the tax on ALL earnings. You get a $20 million bonus for Being Exceedingly Handsome, you pay the tax on it.

Do you also support SS benefits that correspond to the taxed amount?

If so, lower-income earners' SS benefits would have to be docked slightly more than 50%, and higher-income earners would receive many multiple times the SS monthly benefit that lower-income earners get.

If not, you're advocating taking money by force from those who've earned it and giving it to those who haven't earned it.

[freemkt]

Originally Posted by InformedConsent

Do you also support SS benefits that correspond to the taxed amount?

If so, lower-income earners' SS benefits would have to be docked slightly more than 50%, and higher-income earners would receive many multiple times the SS monthly benefit that lower-income earners get.

If not, you're advocating taking money by force from those who've earned it and giving it to those who haven't earned it.

Depends on what the definition of "earned" is.

To simplify my previous job, let me use a hypothetical example of an employer E with one employee W.

E makes $1M per year (net) and W is paid $15,000.

You're effectively telling us with a straight face that W's SS benefits would have to be docked 50% or else money would have to be taken by force from E and transferred to W.

[Hoonose]

Originally Posted by Redraven

I didn't vote.
In order to "fix" the Social Security Trust Fund, IMO the FIRST thing that has to be done is for the Treasury Department to pay all the IOUs that were created by Congress "borrowing" money from the Fund! If THAT money were to be returned, the Fund just might be in better shape!

And how does that happen? Where would that money come from?

The money has to be created by central gov't. Meaning more debt. To be used to pay off debt.

Strange days indeed.

Why not just create money in the future to satisfy SS shortfalls?

[InformedConsent]

Originally Posted by freemkt

Depends on what the definition of "earned" is.

It's the amount listed on one's W-2 or 1099 that lists earned income (minus business expense deductions).

To simplify my previous job, let me use a hypothetical example of an employer E with one employee W.

E makes $1M per year (net) and W is paid $15,000.

You're effectively telling us with a straight face that W's SS benefits would have to be docked 50% or else money would have to be taken by force from E and transferred to W.

Currently, money is taken by force from E and given to W. Money is TAKEN from higher income earners and GIVEN to lower income earners.

Let's look at a far less extreme example, using the maximum taxed income for SS...

Social Security benefits are progressive: they represent a higher proportion of a worker’s previous earnings for workers at lower earnings levels. For example, benefits for someone who earned about 45 percent of the average wage and then retired at age 65 in 2015 replace about 52 percent of his or her prior earnings. But benefits for a person who always earned the maximum taxable amount replace only about 25 percent of his or her prior earnings

Policy Basics: Top Ten Facts about Social Security | Center on Budget and Policy Priorities

https://www.ssa.gov/oact/tr/2015/lr5c7.html

Though, BOTH pay the SAME FICA tax rates.

I'm sure you'll acknowledge that 52% (for the lower-income earner) of prior earnings is a much larger return on SS taxes paid in than 25% (maximum taxable earnings) given that BOTH pay the same SS tax rate, no?

Why make it EVEN MORE unfair by eliminating the SS tax cap but then not corresponding SS benefits equally to prior earnings?

[ringwise]

Originally Posted by freemkt

??? ??? ??? ??? since the rich do not pay FICA tax on their unearned income - a disproportionate share of the income of the rich - one can argue that the rich do not pay their fair share.

Please show me where the tax code says only the rich don't pay FICA. Nobody, regardless of their worth, pays in that situation.