The real truth about Social Security........

[Navy Pride]

I didn't contend otherwise.

But the truth is that the concept of building up a SS trust fund was borne with the SS Act of 1983. The politicians (with amazing foresight) foresaw the problems with SS with the retirement of the boomers. So SS taxes were increased so that SS revenues would be greater than what was necessary to pay SS expenses. The surplus was supposed to go into a SS trust fund. The idea was that the trust fund would have a few trillion dollars in it by the time the boomers started retiring en masse, enough to pay their benefits without a heavy tax increase on future taxpayers.

The SS excess tax payments created by this Act are reported by the CBO, the figures reproduced here:

1985 9.4
1986 16.7
1987 19.6
1988 38.8
1989 52.4
1990 58.2
1991 53.5
1992 50.7
1993 46.8
1994 56.8
1995 60.4
1996 66.4
1997 81.3
1998 99.4
1999 124.7
2000 151.8
2001 163.0
2002 159.0
2003 155.6
2004 151.1
2005 173.5

The amount of extra SS taxes paid over the last 20 years to date exceeds $1.8 trillion; well over $2 trillion if you add in interest.

But, as the president pointed out, there are no funds in the SS trust fund. Instead there is Govt debt, IOUs, just like the president said. The Government took all the money that was supposed to be saved in the trust fund, and put worthless IOUs there instead. Why are they worthless? Because the Govt will have to pay the SS benefits anyway. Having a debt to itself doesn't help pay these expenses.

Where did all the money go? Since 1981, the Govt has ran deficits totalling 7.2 trillion -- that is, it has spent $7.2 trillion than it has taken in through taxes. It has had to borrow this money. Thanks to the earlier law passed by Johnson (I'll take your word on it), the Govt has the authority to take the money that was supposed to go into the SS trust fund, and "borrow" it, and use the extra SS tax payments for general spending. Because of fiscal irresponsibility over most of the past 25 years, the money that was supposed to be building up in a SS trust as instead been used to finance the Republican deficits.

Is it fair to call them the Republican deficits? Of the $7.2 trillion borrowed since 1981, it is true that $1.6 trillion was borrowed during the Clinton administration. But Clinton inherited a $320 billion deficit from Bush 1, and of the last 4 presidents, only his administration successfully reversed the tide of red ink and and balanced the budget, even paying down the debt $100 billion in CY2000. Most of the money borrowed during his administration was during the first few years, as the huge deficit budget he inherited from Bush1 was worked down.

Since Bush2 took office in 2001, the surplus vanished, and another $2.5 trillion in debt has been added.

It's fair to call them the Republican deficits and debt in my book.

Did you even read the first post in this thread?

 

[Iriemon]

Did you even read the first post in this thread?

In fact, I did. What is your point? Off-topic? Big deal.

Your first post implied that SS was screwed up because of the Democrats. While I don't agree with every act passed, I beg to differ.

This thread is titled (by you): "The real truth about Social Security........" Which is what my last post was about.

 

[Navy Pride]

In fact, I did. What is your point? Off-topic? Big deal.

Your first post implied that SS was screwed up because of the Democrats. While I don't agree with every act passed, I beg to differ.

This thread is titled (by you): "The real truth about Social Security........" Which is what my last post was about.

Do you say any of the statements in my first post are false?

 

[Iriemon]

Do you say any of the statements in my first post are false?

"Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

And the worst part about it is, uninformed citizens believe it!"

Not sure I'd completely agree with your characterization.

 

[Navy Pride]

"Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

And the worst part about it is, uninformed citizens believe it!"

Not sure I'd completely agree with your characterization.

Its not my characteriztion.Its what the dems did in 2004..............

 

[Iriemon]

Its not my characteriztion.Its what the dems did in 2004..............

And for good reason.

 

[Ivan The Terrible]

Iriemon,

And for good reason.

Could you explain?

 

[Navy Pride]

And for good reason.

That is not what your boy "Slick Willie" said in 1998..........

 

[Iriemon]

Iriemon,

Could you explain?

I personally think there could be some adjustments to the SS program to make it more financially sound (even after the Republican deficits stole the SS trust fund) -- make it means tested (Warren Buffet doesn't need the Govt dole), I agree with Bush's proposal to tie future increases to CPI instead to wages (the benefits are already high enough to provide a sustenance level of retirement and more), maybe bump the applicable age up a couple years, as people are living longer healthier lives and can work longer.

But I (and most Americans, apparently) believe we need a social pension insurance program in this country. Because I don't like the thought of old men and women living and begging in the streets.

Private accounts don't cut it. What happens to someone when their account runs out of money? And if someone dies young, giving their balance to their family members just increases the cost to insure everyone else because the money isn't available for the general fund.

Besides, we already have private accounts. Open an IRA.

 

[Ivan The Terrible]

Iriemon,

(even after the Republican deficits stole the SS trust fund)

You say this even after Nave Pride has shown other wise? Prove your point or stand aside human...

Because I don't like the thought of old men and women living and begging in the streets.

Look around you this still happens.

Private accounts don't cut it.

They out pace SS by far.

Open an IRA.

If SS was so great why do IRA's exist?

 

[Iriemon]

Iriemon,

(even after the Republican deficits stole the SS trust fund)

You say this even after Nave Pride has shown other wise? Prove your point or stand aside human...

I'll stand on my previous post.

http://www.debatepolitics.com/showpost.php?p=258125&postcount=25

Look around you this still happens.

I don't see many old men and women begging in the streets. If your contention is that SS has made no difference in the welfare of the elderly, I beg to differ. In fact, it has made arguably too much of a difference -- asset wise the elderly are the richest group of Americans, yet those with wealth are supported on the dole by the poorest group of working Americans who pay SS taxes. (Which is why I agree with the President's proposal to cap SS increases to inflation instead of wages).

They out pace SS by far.

I don't understand your statement or point.

If SS was so great why do IRA's exist?

SS was not necessarilty meant to be, and should not be, an exclusive or even necessarily sufficient means of retirement income. Many folks, myself included, hope to retire with income greater than what is provided by SS.

I do that with private accounts, such as IRAs and 401ks.

 

[Navy Pride]

I personally think there could be some adjustments to the SS program to make it more financially sound (even after the Republican deficits stole the SS trust fund) -- make it means tested (Warren Buffet doesn't need the Govt dole), I agree with Bush's proposal to tie future increases to CPI instead to wages (the benefits are already high enough to provide a sustenance level of retirement and more), maybe bump the applicable age up a couple years, as people are living longer healthier lives and can work longer.

But I (and most Americans, apparently) believe we need a social pension insurance program in this country. Because I don't like the thought of old men and women living and begging in the streets.

Private accounts don't cut it. What happens to someone when their account runs out of money? And if someone dies young, giving their balance to their family members just increases the cost to insure everyone else because the money isn't available for the general fund.

Besides, we already have private accounts. Open an IRA.

No one is saying you put all your SS in a private account, just a small percentage.........If and individual could put a portion in say just a simple CD he could make at leat 4% without any risk.........Right now SS pay about 1%.........

Can you even imagine the gain a person would have at retirement age?

 

[ptsdkid]

No one is saying you put all your SS in a private account, just a small percentage.........If and individual could put a portion in say just a simple CD he could make at leat 4% without any risk.........Right now SS pay about 1%.........

Can you even imagine the gain a person would have at retirement age?


***While I agree with your concept--its your numbers that need clarification. I watched an economist on TV give his numbers on the percentage of money a social security recipient would receive after funding SS over a lifetime. The return on an individual's money would net him a loss of -1%.
The same lifelong recipient investing 100% of his monies into the top 500 fund of stocks would receive a net gain of +7.5 %.

 

[Iriemon]

No one is saying you put all your SS in a private account, just a small percentage.........If and individual could put a portion in say just a simple CD he could make at leat 4% without any risk.........Right now SS pay about 1%.........

Can you even imagine the gain a person would have at retirement age?

I'm not sure your figures are accurate, but if the concern is about return on the investment, why not put the SS trust fund in the same investments? I mean, if we had a SS trust fund that wasn't stolen to pay for Republican deficits.

Sounds like what you are really suggesting is a law that requires the politicians to actually fund the SS account, and quit financing their stinking deficits with our SS money. I agree 100%.

Finally, if you want to put a small percentage of your retirment savings in a private account, open an IRA. I recommend it wholeheartedly.

 

[Ivan The Terrible]

Iriemon,

I don't understand your statement or point.

Read Pstdkid's post.

 

[Iriemon]

Iriemon,

Read Pstdkid's post.

Calculating a rate of return for social security is a bit of a red herring, because SS is more like insurance, not an investment. Someone who dies at age 67 is going to get a crappy return, because he or she died before receiving benefits. Someone who lives to be 100 will get a great return, because they will receive SS benefits for 35 years.

So if you are talking about a rate of return, you can only use it in the sence of the average investor or the rate of return SS earns on its invested funds.

As I stated before, if the problem is that that the SS proceeds do not earn enough money then arguably the Govt should be taking the proceeds and investing them in various investment portfolios. Instead, the Govt takes the money, and uses it to finance Republican deficits. I agree wholeheartedly that is wrong and bad.