Social Security Questions (unemployment, wages, salaries, generation)

[saganista]

Originally Posted by Yeledaf

Why does it have to be all or nothing? Why not a partial privatization, with a menu of investment choices, such as most reputable 403b plans have, each with varying degrees of risk?

Why should there be ANY privitization at all? Is it that the menu of currently available tax-favored investment vehicles is somehow too narrow? Is it that the average individual is known for his investment and financial management savvy? Is it that we shouldn't care about the trillions of dollars worth of debt that privitization schemes would cause us to incur? Is it that we think financial agents should be able to walk away with 20-25% of the retirement nest egg that individuals think they are building?

[Mircea]

Originally Posted by saganista

Why should there be ANY privitization at all?

Because choice is important.

Part of the problem is liberals. Liberals have inculcated and indoctrinated people over the last 40-odd years is that Social Security is income.

That completely contradicts FDR's original premise. In his own words, FDR said that Social Security is an "income supplement."

If you listen to his fire-side chat (or read the transcript) he used the analogy of a 3-legged stool.

Your primary income at retirement is your pension and personal savings. If for some reason your pension plan failed, well you still have your savings and social security. If for some reason you lost your life savings due to bank failure, at least you had your pension and social security.

In the worst case scenario, if you lost both your pension and savings, at least you had social security, but again, it was never intended that people should be able to live off of social security. The expectation was that you would live with your children, or share space with another of your peers to make ends meet living solely on social security.

Once again, liberals have taught us to abrogate personal responsibility. It isn't incumbent on the individual to save money and to invest wisely for their retirement, rather they should demand that their employer and the government provide 100% of their retirement funds.

[Mircea]

Originally Posted by Yeledaf

Why does it have to be all or nothing? Why not a partial privatization, with a menu of investment choices, such as most reputable 403b plans have, each with varying degrees of risk?

I wouldn't disagree with you. I think those that are confident in their own abilities should be able to opt out, or at the very least, should be able to participate in both a private plan and a government plan, where the individual contributes up to 6.2% split as they see fit between Social Security and a private plan.

[saganista]

I wish to apologize for having used words such as garbage and hogwash in my post late last night. I'm afraid I forgot where I was. I have tried to maintain higher standards than that when posting in Great Debates and have encouraged others to do the same. The idea being pursued here is worthwhile and it is my hope that, with the help of all posters, its objectives will be realized. It is the case that there is much outright mis- and disinformation in circulation concerning Social Security, but there were many words that would have been better choices to have used last night in highlighting that fact. I wish I had resorted to some of them.

[saganista]

Originally Posted by Mircea

Because choice is important.

Yes, I think the outcomes of the 2000 and 2004 elections have served only too disastrously to underscore that point. Hopefully, we will not make the same mistake in 2008. The larger point in this case is that SS privitization schemes undo and disserve the objectives that underly the program. They make retirement security weaker and more difficult to obtain.

Originally Posted by Mircea

Part of the problem is liberals. Liberals have inculcated and indoctrinated people over the last 40-odd years is that Social Security is income.

The mechanics and outcomes of Social Security are unaffected by the manner in which liberals or any other group describe them. Social Security provides an inflation-adjusted flow of funds in the form of an annuity that one cannot outlive. If one wishes to parse the word income into a form that does not cover the monthly arrival of such funds, that's fine. But the checks (or direct deposits) just keep on coming.

Originally Posted by Mircea

That completely contradicts FDR's original premise. In his own words, FDR said that Social Security is an "income supplement."

And a supplement to income would likely be seen by most as being income.

Originally Posted by Mircea

If you listen to his fire-side chat (or read the transcript) he used the analogy of a 3-legged stool.

To which a fourth has since been added in the form of Medicare. And of the four -- Social Security, employment-based pensions, personal savings, and Medicare -- it is Social Security that presently stands in the best shape. Company pensions are disappearing, the personal savings rate struggles to stay above zero, and the future of Medicare hangs upon our near-term ability to craft an effective verison of health care reform. Social Security exactly as it is today will meet 100% of its objectives until well into the second half of the century.

Originally Posted by Mircea

The expectation was that you would live with your children, or share space with another of your peers to make ends meet living solely on social security.

Social Security does not mandate or establish a preference for any form of living arrangement. Many retired and elderly people continue to live with their children. Many still establish households of convenience. Many however have a strong preference to remain independent, not wishing to become a burden upon their children or anyone else. This is a matter of personal choice, and choice, you'll remember, is important.

Originally Posted by Mircea

Once again, liberals have taught us to abrogate personal responsibility. It isn't incumbent on the individual to save money and to invest wisely for their retirement, rather they should demand that their employer and the government provide 100% of their retirement funds.

Can you back up such an assertion? Where has anyone at all encouraged such behavior? Don't take any initiative, don't save, don't invest. Show me any people who offer such advice. Show me any who take it.

[saganista]

Originally Posted by Mircea

I wouldn't disagree with you. I think those that are confident in their own abilities should be able to opt out, or at the very least, should be able to participate in both a private plan and a government plan, where the individual contributes up to 6.2% split as they see fit between Social Security and a private plan.

Confidence is easy to come by. Results, not so much. American males in particular seem to have great confidence in two things -- that they are great in bed, and that they are brilliant investors. When one pulls back the covers, so to speak, one finds that neither such belief is very well founded.

[zman0]

Originally Posted by saganista

Social Security was established to provide an income floor, below which no American worker, having labored over a lifetime, would be allowed to sink no matter what slings and arrows of outrageous fortune were to befall him or her. You are otherwise correct that SS was never meant to be the sole means of support for anyone. Personal savings have always been strongly encouraged. Nevertheless it is still true today that SS provides 90% of the income for about 20% of elderly married couples and 40% of elderly singles.

Thus proving the point that people are not educated about social security. Social Security creates the false impression that the government takes your taxes over the years and pays it back to you once you retire, as some sort of "forced savings" that allows you to maintain a consistent lifestyle after retirement. I think we can all agree that such an idea is naive at best.

We need to tell people that social security is not enough to provide a comfortable lifestyle, that it is difficult to survive only on social security, and that providing for retirement is your own responsibility. That message is getting lost because of programs like Social Security, Medicare, and prescription drug coverage.

Originally Posted by saganista

Gibberish. SS is the most successful program of its kind ever devised. It has been fantastcially more successful than its developers ever imagined ir could be. It would be one of the last programs to go if impact, efficiency, and effectiveness were any criteria.

SS is redistribution of wealth. It takes from the producers and gives to the non-producers.

The false assumptions made by people results in many retirees living in near poverty, because they thought that social security was retirement savings. Which wouldn't be a big deal, except now we hear horror stories about the elderly not having enough money, and so we need to provide more money to Social Security.

Redistribution and socialized safety nets never solve the problems they were intended to combat.

Originally Posted by saganista

What do those notices say?

They tell you the amount of money that you can expect to receive every month from social security upon retirement. In my case, it was a picture of Bill and Hillary pointing at me and laughing.

[Yeledaf]

Originally Posted by saganista

Why should there be ANY privitization at all?

Because SS as presently constituted does not and cannot function as the primary source of retirement income for all citizens. Note that I have not used the words "should" or "should not."

Is it that the menu of currently available tax-favored investment vehicles is somehow too narrow?

No, it is that such menus are foreign to the thinking of many average Americans.

Is it that the average individual is known for his investment and financial management savvy?

Not at all. Hence my suggestion that such choices be made intelligible and transparent to everyone who participates in such a plan. To suggest otherwise would be criminally irresponsible.

Is it that we shouldn't care about the trillions of dollars worth of debt that privitization schemes would cause us to incur?

There is no reason to assume that such would be the case any more than it is so with SS, which some assure us is totally funded and safe for decades to come.

Is it that we think financial agents should be able to walk away with 20-25% of the retirement nest egg that individuals think they are building?

Absolutely not. Such exhorbitant costs (which in your example far exceed anything like the fee structure of reputable investment firms) would have to be strictly limited and legislated against. A portion of the fees might be used in part to defray indirect costs incured by the private retirement program. The transfer agents would be subject to strict licensing standards. Participation in such agencies would subject all personal to rigorous oversight. None of this is beyond the power of our current legislators.

[aus10]

As the OP of this discussion, I'd like to thank you all for the intelligent and thought provoking conversation. It really has given me a lot to think about.

We find ourselves with our three-legged stool, as mentioned above, intact (fully vested pension still being funded, savings and investments, and SS). I guess I am just scared that our stool (for lack of a better analogy) will be tipping by the time we hit retirement. I figured out the dollar amount, approximately, that we have paid in and I really do wish we could get a refund, opt out, and invest ourselves. Not saying we are fantastic at financial planning, but I can balance a budget and know how to stretch a dollar. I think I'd feel more optimistic.

Thanks again, all.... I'm looking forward to learning more......

[saganista]

Originally Posted by zman0

Thus proving the point that people are not educated about social security.

Take a closer look. It isn't a matter of education. It's a matter of money. If you don't have any of that, you won't wind up with some broadly based portfolio to fall back on by the time retirement rolls around. Simple fact of life. See it. Learn it.

Originally Posted by zman0

Social Security creates the false impression that the government takes your taxes over the years and pays it back to you once you retire...

It creates the accurate impression that at least you won't starve in the street when you can no longer work...whether that day comes at 35 or 65.

Originally Posted by zman0

We need to tell people that social security is not enough to provide a comfortable lifestyle, that it is difficult to survive only on social security, and that providing for retirement is your own responsibility.

Who is sending any different message? Can you point to one public personna anywhere who is advising people to sit back and relax, that the miracle of Social Security will be taking care of them in grand style when their time comes? Anyone? Anyone at all?

Originally Posted by zman0

SS is redistribution of wealth.

So many of you need to get over an irrational hangup with this term. The basic premise of any society is risk-sharing and redistribution of wealth. That's what societies are for. It's why we form them to begin with. Do you have any insurance? Probably so, since in most places, it's mandatory in order to own a home or drive a car. Any form of insurance is purely a scheme for redistribution of wealth. We take from good drivers and give to the ones who have all the accidents. We take from those who are careful when playing with matches and give to all those whose houses burn down. We take from those who take up book-reading as a hobby and give to those who choose skydiving instead. Or at least to their heirs. How about defense? We all benefit to some degree from defense, but who provides it? Four-year olds? Ninety-year olds? I don't think so. We take defense from the few and give it to the many. And if you're a neocon, you then try to screw over the few even worse. And about those degrees...whose benefit from defense is greater? The guy who can fit all his wordly possessions into a grocery cart, or the guy who keeps all his stuff in the big house at the end of the long driveway behind the wrought-iron gates? You've got no story to tell with your redistribution of wealth talk. It's what goes on. The only issues are who drives it, which way do they try to make it go, and how fast. In those areas, right-wingers have a great deal to answer for from their time behind the wheel.

Originally Posted by zman0

It takes from the producers and gives to the non-producers.

Non-producers? People who worked from the day they got out of high school until the day they turned 65? The people who struggled to get the house you grew up in, who scrimped to afford the car they drove you around in...the ones who did without whatever luxuries so that you could get an education? Those non-producers??? Boy, are your priorities and sensibilities messed up. Excuse the umbrage, but man, are you out of line.