My response to the Social Security gripe.

[Hutch]

I can't post the original diatribe from Facebook, but suffice it to say it was the usual "I paid into it, I've earned it, and I demand it" rant about Social Security retirement.

All of that might well be true. It won't matter. An acquaintance of mine sent money to his dad while he was in Vietnam, with the understanding that his dad would save it for him to use later for his tuition. His dad blew the money as he received it. The only difference between the dad and Uncle Sam is, that Uncle Sam can print the money. Quit thinking in terms of "should", "fair", or "just". Uncle Sam pissed that money away. Already. Your sense of outrage is understandable, but misplaced. Be mad at yourself, and all the voters that fell (and continue to fall) for the bullshit notions the the government is wise and compassionate and caring.

Everyone knows someone who believes that their real problem with their finance is that the credit card company won't raise their limit high enough or fast enough. We're to that stage and beyond it. The Evil Party's most current proposal to avoid the "fiscal cliff" is to allow the President to raise the debt limit without an authorization from Congress.

[JonnyB]

My brother was at a seminar once, where an old guy was spouting that same argument. "All I'm getting is the money back that I've paid in for 40 (or however many) years!"

The guy presenting the seminar asked a few questions about his annual pay, age, monthly benefits. etc. After a brief bit of figuring he told the old pharte that he had received every penny he put into his 'account' in the first three years he drew payment. The old guy started yelling: "Bullshit! I'll never live long enough to get it all back!." He refused to believe the numbers. Facts and figures don't matter in an emotional argument.

jb

[SADShooter]

The only thing I want from SS is the one thing I can't have....out.

The only thing I'll likely get is the enjoyment of listening to this debate as the system swirls around the bowl. Yay.

[AZRedhawk44]

The only thing I want from SS is the one thing I can't have....out.

Plus eleventy trillion, or the national debt.  Whichever is bigger.

[Hutch]

My brother was at a seminar once, where an old guy was spouting that same argument. "All I'm getting is the money back that I've paid in for 40 (or however many) years!"

The guy presenting the seminar asked a few questions about his annual pay, age, monthly benefits. etc. After a brief bit of figuring he told the old pharte that he had received every penny he put into his 'account' in the first three years he drew payment. The old guy started yelling: "Bullshit! I'll never live long enough to get it all back!." He refused to believe the numbers. Facts and figures don't matter in an emotional argument.

jb

To repeat:  it doesn't matter what you're "owed", or how much you paid in.  We may well print the money to pay the agreed-upon amount.  What we can't do is create the wealth that the money is supposed to be able to buy.  It.  Can't.  Happen.

[SADShooter]

To repeat:  it doesn't matter what you're "owed", or how much you paid in.  We may well print the money to pay the agreed-upon amount.  What we can't do is create the wealth that the money is supposed to be able to buy.  It.  Can't.  Happen.

But, but, but...You're ignoring the part where we just take a little more from those greedy rich people who won't pay their fair share. Then we can afford it! Why do you hate America?

[Chuck Dye]

The bank robbery retirement:

Rob banks.  If you are successful, you'll have money.  If you are unsuccessful, you won't need money.  We are already seeing people going for their medical care by way of incarceration.  Of course, we are also seeing the prison systems opting out of expensive end of life care with "compassionate" release.

Ya pays ya money, and ya takes ya chances.

[brimic]

Another good argument against the morality or even legality of SS is asking if the administrators of SS would be in prison if such a scam were even allowed to be administered my the private sector....

[Monkeyleg]

Because of my divorce, I'm having to take early Social Security at 62 in January. In eleven years I'll have received what I paid in (not taking into account COLA).

I'd still rather they'd never taken the money at all, and I don't expect to be getting anything in ten years anyway.

[CAnnoneer]

They won't cut the payout. They simply have been devaluing the dollar. It does not matter if the absolute amount is as promised if its buying power is but a small fraction of what it used to be and even what it is now. Reverse mortgage and help from their children is pretty much the only thing the majority of seniors can have going for them. Social Security is a good example why government should stay out of most things in life, particularly financial things.

The SS is only part of the problem anyway. The real expensive stuff is not so much the cost of living but healthcare and prescription drugs. Those are programs that the gov can slash far more easily than SS, because there are no promised amounts. My expectation is the Dems are going to throw the old folk under the bus, because most seniors tend to vote conservative. It has already happened partially with Obamacare taking some of the funding away while leaving the promise of replacing it with something else. More to follow. Besides, generational warfare is just another axis of division, next to racial, class, and gender warfare as practiced by the liberals anyway. Yet another way to divide, segment, and confuse the voters.

I think we are in for scenes of heartbreaking poverty among seniors in the next 10 years. There already are plenty of people having to choose between medication and living expenses. It is not a coincidence that there are so many reverse-mortgage commercials on TV.

[brimic]

My expectation is the Dems are going to throw the old folk under the bus, because most seniors tend to vote conservative. It has already happened partially with Obamacare taking some of the funding away while leaving the promise of replacing it with something else. More to follow.

It necessarily will need to happen. Obamacare promises universal healthcare with no way to pay for it. Death panels Triage will be a reality. I also expect a 'points' system to be put in place to make sure that selected demographics get to jump to the front of the line as with any .gov administered entity.

If you are a white male in your 60s and need heart surgery, I expect that your health care will be scrapped in favor of paying for a 20 year old illegal immigrant drug using prostitute with AIDS.

[HankB]

Social Security has trillions of dollars of IOUs - in the form of Treasury securities - owed to it by the Federal Government. A default on this would be the same as a default on treasury bills, China debt, or savings bonds. People do have a right to expect they'll ultimately get their money back, and get to collect the SS retirement funds they've been promised. It's poor form for a debtor (the Federal government) to blame their lender (Social Security) for the fiscal problems their rising repayment expenses bring.

SS is not the problem - profligate Government spending and borrowing is the problem.

The government CAN find the funds to make the payments. Where? Recent studies have shown that for 2012, spending on unearned entitlements (i.e., welfare) from all programs exceeds $1,000,000,000,000.00; this number does NOT include Social Security. Even today, a trillion dollars a year is a lot of money.

So they CAN do it; whether they WILL or not is an entirely different question. ("Kick the can" is likely.)

But at least from an ethical and moral viewpoint, I see a profound difference between the expectations of retirees who've worked, paid taxes, and contributed to the system (including SS) for decades and the demands of people who want their free Obama Phone, contributing nothing except perhaps more useless progeny for the rest of us to pay for.

And as for the value of SS contributions . . . a couple of decades ago there was a column in Fortune magazine that examined it. They assumed that a person retiring that year at 65 would have contributed the max amount each year to SS. They added in the employer's matching funds, and assumed the money would be invested at 3%, compounded, to come up with a lump sum. That year, the lump sum would buy a lifetime monthly annuity that paid 75% more than the maximum SS benefit. Given today's returns the equation may have changed a bit, but figure in the time value of a lifetime's witholding and the purchasing power of today's inflated benefit dollars, and SS isn't really giving the immense returns that some claim.

[roo_ster]

Social Security has trillions of dollars of IOUs - in the form of Treasury securities - owed to it by the Federal Government. A default on this would be the same as a default on treasury bills, China debt, or savings bonds. People do have a right to expect they'll ultimately get their money back, and get to collect the SS retirement funds they've been promised. It's poor form for a debtor (the Federal government) to blame their lender (Social Security) for the fiscal problems their rising repayment expenses bring.

Not so much.  SS get "special" securities unique to SS, distinct from the securities issued to everyone else.  If the special securities don't get paid, no skin off the noses of those with the regular notes.

They are special relative to regular Treasury securities in a way similar to that of the Special Olympics & regular Olympics: Different standards and no one expects them to compete in the real world.

[ArfinGreebly]

I'm glad I have kids.

I watched my wife's father "retire" but not have enough to live on.  He was a union construction worker (millwright) his whole life.  He had two daughters; one was a deadbeat and occasional druggie, the other was my wife.  The IRS, in his last year of employment decided to "audit" him, seized his whole pension and half his SS income.  He spent his remaining years with us, and died late one night in our kitchen of heart failure.

My own father "retired" at 70 when he was laid off from his last job.  He spent his life as a staff engineer, raised a relatively large family (one of whom he outlived), and tried, really, to provide for himself and Mom.  He was cagey in his investments, preferring rural/remote properties where one could plunk down $150/month directly to the owner and improve as needed.  That strategy saved them when he was laid off and lost the house in Vegas.  He was able to up stakes and move to their ramshackle mobile home ("mobile hovel" in Dad speak), the payments and maintenance on which were small enough to cover with his SS income, and the few bucks he earned as a janitor at the VFW outpost there.  My dad.  The guy with the degrees and the engineering background, the guy who helped put men on the moon, they guy who had played by the rules all his life, from the Army Signal Corps, through the space program, through short-term jobs at dot-gov contractors.  That guy was now, in his seventies, a janitor in a small, nearly off the grid, town in northern Arizona.

When Mom died, my younger brother moved a small mobile home onto the back of his property and moved Dad in there, seeing to his needs for the remaining twenty years of his life.

Social "Security" did nothing for my FIL, and nothing for my dad.  Both veterans, both family men, both hard working, salt-of-the-earth educated, contributing members of society.

In the end it all came down to family.

I'm glad I have kids.  I'm glad most of them are doing well.  That's where I may well wind up when I am eventually "retired" because I just can't keep up with the young bucks any more.

Won't be takin' no government hand-outs.  Won't be livin' in no government "facility."

Call me foolish, call me proud.

I won't take what I didn't earn.

[longeyes]

They won't cut the payout. They simply have been devaluing the dollar. It does not matter if the absolute amount is as promised if its buying power is but a small fraction of what it used to be and even what it is now. Reverse mortgage and help from their children is pretty much the only thing the majority of seniors can have going for them. Social Security is a good example why government should stay out of most things in life, particularly financial things.

The SS is only part of the problem anyway. The real expensive stuff is not so much the cost of living but healthcare and prescription drugs. Those are programs that the gov can slash far more easily than SS, because there are no promised amounts. My expectation is the Dems are going to throw the old folk under the bus, because most seniors tend to vote conservative. It has already happened partially with Obamacare taking some of the funding away while leaving the promise of replacing it with something else. More to follow. Besides, generational warfare is just another axis of division, next to racial, class, and gender warfare as practiced by the liberals anyway. Yet another way to divide, segment, and confuse the voters.

I think we are in for scenes of heartbreaking poverty among seniors in the next 10 years. There already are plenty of people having to choose between medication and living expenses. It is not a coincidence that there are so many reverse-mortgage commercials on TV.

+1

But look for some grossly misbehaving seniors along the way.  Not much to lose.

[cordex]

SS is not the problem - profligate Government spending and borrowing is the problem.

I would say instead that SS is a symptom of profligate government spending.  SS (and most public pensions, for that matter) are not based on rational accounting principles.

But at least from an ethical and moral viewpoint, I see a profound difference between the expectations of retirees who've worked, paid taxes, and contributed to the system (including SS) for decades and the demands of people who want their free Obama Phone, contributing nothing except perhaps more useless progeny for the rest of us to pay for.

It's like this: The people who are now demanding their retirement benefits that they paid for in SS want to have their cake and eat it too.  They paid into Social Security, then elected politicians who borrowed from those accounts to pay for additional government programs to benefit the same people.

It's a bit like me borrowing from my 401K to buy a new car every year, then being upset that I didn't have money in my account when I wanted to retire.

And as for the value of SS contributions . . . a couple of decades ago there was a column in Fortune magazine that examined it. They assumed that a person retiring that year at 65 would have contributed the max amount each year to SS. They added in the employer's matching funds, and assumed the money would be invested at 3%, compounded, to come up with a lump sum. That year, the lump sum would buy a lifetime monthly annuity that paid 75% more than the maximum SS benefit. Given today's returns the equation may have changed a bit, but figure in the time value of a lifetime's witholding and the purchasing power of today's inflated benefit dollars, and SS isn't really giving the immense returns that some claim.

Chile has supposedly had a lot of success offering a private retirement plan as an alternative to its public plan.  The reason SS isn't as efficient at providing for retirement is because the money isn't used to build wealth.

[HankB]

But look for some grossly misbehaving seniors along the way.  Not much to lose.

I can see some desperate seniors making a reasoned calculation that prison - three meals a day, laundry, warm cell, TV, medical care, etc. - is preferable to living under a bridge in a cardboard box, begging for food.

[HankB]

It's like this: The people who are now demanding their retirement benefits that they paid for in SS want to have their cake and eat it too.  They paid into Social Security, then elected politicians who borrowed from those accounts to pay for additional government programs to benefit the same people.

An awful lot of working folks didn't vote for those politicians, and didn't get benefits from additional government programs like AFDC, food stamps, or Obama Phones . . . which we're now spending a trillion dollars a year on.

[Monkeyleg]

I didn't vote for politicians who robbed SS for general funding. This is also the first money I've ever received from the government, although, as I said, what I paid into it (including co-FICA), would cover the first eleven years of my "benefits".

[cordex]

An awful lot of working folks didn't vote for those politicians, and didn't get benefits from additional government programs like AFDC, food stamps, or Obama Phones . . . which we're now spending a trillion dollars a year on.

Which, of course, is one of the problems with having a government run retirement plan, especially one where there are no drawbacks to raiding it.

I am not saying it is fair, I am saying the ones to blame are the people who did elect crooked politicians, not the people saying "The money just isn't there."  Plus, if you think it isn't fair for people retiring now, just wait until your kids or grandkids try to retire.

[Scout26]

A couple of things about SS.

1.  When FDR set it up, they knew it was Ponzi scheme.  They expected it to go broke in 1980.  But they knew they'd be both out of office and dead. It would be an SEP*.

2.   They copied a retirement age of 65# from the Germans.  Not knowing that Bismarck had selected that age 1888 when damn few people lived to be that old.  It would be the same as today saying "You get your SS pension when you hit 100 !!!  What a great deal that is !!!"





*SEP - Somebody Else's Problem.

#Yes, I know what the SSA's website says.  But the truth is that they didn't do any actuarial studies, they copied the German system either directly or indirectly by copying what some private and state pensions used (who had copied from the Germans).

[longeyes]

Anyone want to talk about SSI?  

Go to the Glendale, California Social Security office and see who is sitting in the chairs waiting for an appointment.

[HankB]

Anyone want to talk about SSI?  

Go to the Glendale, California Social Security office and see who is sitting in the chairs waiting for an appointment.

When my father retired - quite a number of years back - he had to go down to the SS office in person to fill out the application. He said that the overwhelming majority of applicants were clearly nowhere near normal retirement age. And many didn't speak English.

I doubt if things have improved since then. (Wasn't it the Bush 43 administration that wanted to set up an SS office in Mexico City?)

[Strings]

Actually knew a girl on SSDI. She was dating a guy with a pretty good job, and he wanted to marry her... badly.

She refused unless he quit his job, as she didn't want her SSDI cut.

The reason she was on SSDI? Couldn't hold a job because of her pot smoking

[Scout26]

As someone who has spent an inordinate amount of time in SS offices, I can attest to the fact that I was one of the few people that spoke English*, aside from a few elderly couples.  And most everyone else there looked perfectly capable of putting in a 40 hours work week.








* Ebonics is not English.