What They Won't Tell You (Hillary on Social Security)

[Euclidean]

You know, my only true beef with Social Insecurity is I can't just opt out of it.  I'd gladly make the same deduction from each check if I could but deposit the same funds in a private investment.

The real problem is people who just barely make ends meet (because income tax takes 1/3 or more of their small checks) wind up seeing the money they would use to invest sucked up by the Social Insecurity scheme, so their future is completely dependent on the government.

[Headless Thompson Gunner]

The real problem is people who just barely make ends meet (because income tax takes 1/3 or more of their small checks) wind up seeing the money they would use to invest sucked up by the Social Insecurity scheme, so their future is completely dependent on the government.

Freaky, isn't it?  It's almost like they planned it that way...

[tokugawa]

My best guess is the Gov. will do the "painless tax" and inflate the money supply- people still will get the same amount but it won't buy anything, and then the Gov. can point to the heartless capitalist pricegougers as the culprits.

[longeyes]

Hillary's plan is to put everyone on Medicare and on Social Security.  That's socialism with a Hillary face.

We don't have hyper-inflation, we have hypno-inflation.  The value of the U.S. dollar trends inexorably downward...while Bush fiddles and America diddles.

[Moondoggie]

The Dems think SS is such a successful program because it's helped them maintain popularity (read: POWER) with the masses for decades.

Many folks gloss over the concept that there is no SS "Fund".  The fedcoats have been using SS witholding $ as general tax revenues for decades, and still running deficeit budgets to boot.  If the fedcoats had to run on a balanced budget as most states/counties/municipalities do, the world would be a much different place today.  And I think it would be a better place, just to toss my 2 cents in there.

The fedcoats are no different than crack addicts, except that their drug is OUR $, and they'll lie, cheat, steal and sell their souls to get it.

[The Rabbi]

Hillary's plan is to put everyone on Medicare and on Social Security.  That's socialism with a Hillary face.

We don't have hyper-inflation, we have hypno-inflation.  The value of the U.S. dollar trends inexorably downward...while Bush fiddles and America diddles.

Wow, a post on Hillarycare and you still manage to get in a dig at Bush.  I think you secretly have a thing for the guy.

[Euclidean]

I've often wondered... and I guess Riles or someone will come along and chew me out for being a dumbass libertarian  , but why can't we just pass a law that says every American must either deduct so much money for SS payments, or else invest that same money in an IRA or mutual fund, 401k, 403b, etc.?  I guarantee you that every bank and financial institution in existence would start clamoring for the business and developing superior alternatives to the SS Pontzi scheme.

I believe in less than two generations we'd see SS start to die of atrophy.

Now don't get me wrong I philosophically still think that the damn government has no business telling you how to spend your cash at all, but this is a modest proposal which would have a much better chance of passing Congress.

[The Rabbi]

That was kind of Bush's proposal.  Needless to say the AARP was all over it, declaring it a threat to the future of democracy or something. The Dems, amazingly, declared that there was no problem with SS and you couldnt believe the gov'ts own predictions.
So that idea died.

[longeyes]

Wow, a post on Hillarycare and you still manage to get in a dig at Bush.  I think you secretly have a thing for the guy.

Bill Clinton is George's adopted step-brother, isn't he?  And that makes Bush and Hillary kin too by my reckoning.  I don't think they are as different as you apparently do.   Bush presents himself as an alternative to the Dems but actually furthers their grand design.

My "thing" for Bush is morbid curiosity. 

[tyme]

The Amish manage not to pay SS because the courts ruled it an insurance plan rather than a tax.  What would it take to set up another "Church" and become members so we don't have to pay SS either?

[doczinn]

Living on a farm?

[Paddy]

I've often wondered... and I guess Riles or someone will come along and chew me out for being a dumbass libertarian  , but why can't we just pass a law that says every American must either deduct so much money for SS payments, or else invest that same money in an IRA or mutual fund, 401k, 403b, etc.?  I guarantee you that every bank and financial institution in existence would start clamoring for the business and developing superior alternatives to the SS Pontzi scheme.

I believe in less than two generations we'd see SS start to die of atrophy.

Now don't get me wrong I philosophically still think that the damn government has no business telling you how to spend your cash at all, but this is a modest proposal which would have a much better chance of passing Congress.

Actually, I agree with that and here's why.  1)Invested $$ growth would be huge compared to whatever SS would pay, supplanting what are now private pensions, and 2) The increase supply of cash in the capital markets would be a catalyst to business, AND bring down interest rates- it's a WIN-WIN

The problem, though, is the timing.  There are millions of baby boomers coming into retirement and that will continue for years. If we begin to divert 'contributions' from SS now, there won't even begin to be enough current cash flow to offset benefits (fed.gov having long since plundered and squandered what should have been a SS 'fund'.

So it's kind of 'crunch time' for SS.  I would like to see the younger people get off the hook and have the freedom to invest their retirement dollars.  OTOH, a lot of us have paid into SS all our working lives and 'benefit' time is right around the corner. 

[roo_ster]

Folks can get out of SS taxes if they are employed as religious officials.

[Silver Bullet]

25 years ago I read somewhere that government employees, on some level, are exempt from social security taxes and benefits because they already have retirement benefits far in excess of what social security provides.  Does anyone know if that is true ?

My opinion is that if something like social security is mandatory for anybody it should be mandatory for everybody.

I'm guessing the same thing is going to happen with national health care, if it gets that far.  There will be one level of service ("Ticket #56.  Now serving #18") for the little people and another level ("Would you care for a glass of merlot while you're waiting ?  It may be a whole five minutes before we can see you.")  for the ruling class.

[Paddy]

25 years ago I read somewhere that government employees, on some level, are exempt from social security taxes and benefits because they already have retirement benefits far in excess of what social security provides.  Does anyone know if that is true ?

PERS Public Employees Retirement System. I think every state has one.  Congress cretins don't participate in SS either, they've got their own 'special plan'.  Just for them.

[charby]

25 years ago I read somewhere that government employees, on some level, are exempt from social security taxes and benefits because they already have retirement benefits far in excess of what social security provides.  Does anyone know if that is true ?

PERS . I think every state has one.  Congress cretins don't participate in SS either, they've got their own 'special plan'.  Just for them.

When I was working for a school district I paid into Iowa Public Employees Retirement System or IPERS. I also had to pay SS tax also. I know work for a State University and pay SS also. I cashed out my IPERS (my contributions only I wasn't vested yet) when I left the school district and moved to a IRA, I figured it would be better to let me manage my own money than take a $6 a month check when I hit 70.

My father works for the BNSF railroad and hasn't paid SS since 1971 when he was hired by Railroad (then is was called Burlington Northern). He has paid into railroad retirement his whole working career. I have a friend who has retired from federal government and I think that he never paid SS during his working career but paid into some federal pension plan.

-C

[jnojr]

why can't we just pass a law that says every American must either deduct so much money for SS payments, or else invest that same money in an IRA or mutual fund, 401k, 403b, etc.?

Because that would not involve any wealth redistribution or government control over our lives.

[Monkeyleg]

Members of congress pay Social Security.

[Paddy]

Members of congress pay Social Security.

You're right.  They started in 1983

http://www.ntu.org/main/page.php?PageID=21

[Phantom Warrior]

The problem, though, is the timing.  There are millions of baby boomers coming into retirement and that will continue for years. If we begin to divert 'contributions' from SS now, there won't even begin to be enough current cash flow to offset benefits (fed.gov having long since plundered and squandered what should have been a SS 'fund'.

That is exactly the problem.  Yet I don't understand why the government doesn't simply implement private savings plans and fund the difference out of other income until all the current SS obligations are out of the system.  Yes, that will be extremely expensive, but unlike most other government programs it will eventually go away as the proportion of private savings funded retirees increase.

AND IT'S NOT LIKE THE PROBLEM GOES AWAY IF YOU IGNORE IT!!!!!!  (Are you listening, Congress?)  Continuing with the current Ponzi scheme SS doesn't address the problem that SS will eventually be insolvent (about the time I retire) and that no actual wealth is being created.  It's just a wealth redistribution scheme and a continuing meltdown.



Euclidean,
The reason it doesn't happen is every time the idea is raised, just like Bush did a few years back, the Democrats and the AARP start clamoring about how "Bush and his fat cat buddies on Wall Street are playing fast and loose with your grandparents' SS benefits and they are going to end up eating dog food if you listen to him..."  So, predictably, nothing was done.  See my rant in the above paragraph.

[tyme]

Yet I don't understand why the government doesn't simply implement private savings plans and fund the difference out of other income until all the current SS obligations are out of the system.  Yes, that will be extremely expensive, but unlike most other government programs it will eventually go away as the proportion of private savings funded retirees increase.

The net cost to the government that would need to be made up is (average payout * payees) - (average SS contribution * employed SS participants).

What could work is a partitioning of the working population.  Let everyone born after 1975 switch to private savings.  The shortfall to be made up would be dramatically less, because there would still be a lot of participants and significant SS contributions from them.  Unfortunately, everyone born before the deadline would have to continue paying into SS until retirement, to prevent the government from having to make up the entire cost of SS entitlements.

Or they could do something progressive, like let everyone switch to private accounts and then institute a huge progressive tax so that the upper class ends up paying for most of the unfunded SS liabilities. 

AND IT'S NOT LIKE THE PROBLEM GOES AWAY IF YOU IGNORE IT!!!!!!  (Are you listening, Congress?)

It's in Congresscritters' best interest to put off lose-lose legislation like that until the next session, because then they have a better (near-certain) chance of getting re-elected.  This is why theoretically unsound plans like SS should never be adopted in the first place -- they're impossible to get rid of, because whoever suggests getting rid of them will become a scapegoat for failures that existed in the plan as originally implemented.

[jeepmor]

Funny how those that don't participate in the system get to run it....sheesh.  If they do participate, it's a token offer because, in the case of our national reps, they have their own system in place anyway.   Isn't this an indicator of them knowing it's not working anyway?

To quote from Riley's link....

In the final analysis, Congressional pension benefits are 2-3 times more generous than what a similarly-salaried executive could expect to receive upon retiring from the private sector. That ought to be enough to concern any taxpayer

[Silver Bullet]

Members of congress pay Social Security.

You're right.  They started in 1983

http://www.ntu.org/main/page.php?PageID=21

I got my information regarding government employee exemption from something I read in 1980 or 1981.  Ironically, I think it was a book written by Howard Ruff.  He also mentioned that the only other exemptees were certain railroad workers, as someone here already noted.

[jnojr]

I don't understand why the government doesn't simply implement private savings plans and fund the difference out of other income until all the current SS obligations are out of the system.

See my response above.

[CAnnoneer]

I have been thinking of a solution to cover both this problem and the energy dependence. Just as computers and the internet produced the economic boom of the 1990s, perhaps equally influential technological solutions in alternative energy can produce a new economic boom that at the same rate of taxation can fill up the coffers and weather the country until the babyboomers pass on. A lot of technology can be generated at a small fraction of what the gov is spending on global military projection and on entitlement programs.

In any case, the problem is not lack of solutions, it is lack of political will to pursue them aggressively, consistently, and responsibly. Politicians are not held accountable by the public, and so, they do nothing. They are lazy, self-serving employees of an apathetic and collectively incompetent boss, the taxpayer. Or at least that's the theory.

The impending SocSec crisis is ultimately just one of the symptoms of a regrettably failing political system.