Social Security COLA

Discussion in 'Social Security' started by waltky, Oct 9, 2012.

  1. waltky

    waltky Well-Known Member

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    Granny says dat's why she needs `em to send her dat 2nd stimulus check...
    :grandma:
    Social Security COLA less than 2 percent
    Oct. 9 (UPI) -- A think-tank in Massachusetts said Social Security benefits will rise between 1.5 percent and 1.7 percent in 2013.
     
  2. upside-down cake

    upside-down cake Well-Known Member

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    I've always been rather unsure of social security. Many will claim that social security is bad...that it's just the government paying for lazy, uninspired people, but there are plenty more examples of the government handing out money, like college loans.

    Even if it effected me adversely, I would have to say I disagree with social security. I disagree because it does remove the inspiration to do for yourself, just as many people work simply to collect a pension towards the ends. If there was no pension, people might hop from one job to the next as soon as they could, if they could. (many might not because they don't have another skill set or even the skills that they have are not attractive)

    I think sinking social security would create an initial event of much suffering, like a depression, but in the end it is good medicine. It would teach people to be much more cautious with their life. That security isn't ensured and that you choices will determine your fate. I don't like taxes handing out more money for more children either because it suffers the similar abuse. This thought is not politically feasible, though, because public outrage would light the night sky. But I think I would stick to my guns on it. It's not the job or the obligation of the government to hold your hand into the afterlife. It just makes you dependent. That's not good for a person, either.
     
  3. OldManOnFire

    OldManOnFire Well-Known Member

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    First, those collecting SS today are expected to live 15+ years. In a 15+ year time frame, what is it that other consumers purchase that seniors do not? It's political nonsense for government to micro-manage senior purchases. If the inflation rate is 3.6%, then increase all SS payouts by 3.6%.

    When SS payouts are increased, FICA withholding must be increased by an equal amount.

    Why are the inflation rates used to determine 'future' payouts from the past one year period? How about estimating inflation for the 'next' one year period to determine future payouts?

    I've read the average SS payout is $1200 per month. Who is it that determines this payout? Why isn't the average payout $1500 per month or $2000 per month?

    I also read there are about 63 million Americans receiving SS payments...but there are only 39 million Americans over the age of 65? That money being paid to the other 24 million Americans should be redistributed ONLY to those over 65 years of age.

    Payroll taxes are ~40% of federal government income, so if the income is $2.2 trillion, then 40% is ~$880 billion. If we assume ~140 million Americans pay one-half of the FICA taxes, then on average each is paying $3143 per year. In 2010 the maximum anyone could pay in employee FICA withholding was $6622 per year.

    If average SS payouts were increased from $1200 to $1500, the average employee withholding portion of FICA which is now $3143 would need to be increased to $3929 per year, or about $15 more in each weekly paycheck.

    Finally, one big problem with SS is the pyramid scheme! Current FICA withholding must pay for current SS payouts. This means pay in $1 for each $1 paid out. If the government earned investment interest over 30-40 years, and accrued a huge cash SS fund, this means for each $1 paid out maybe only $.10 needs to be paid in! Invest $.10 over 30-40 years with interest will achieve $1. IMO the only way taxpayers can afford SS in the future, and SS recipients can be paid $1500-$2000 on average, is to get away from the pyramid scheme and let the FICA withholding payments earn interest.

    Of course the collective we are too stupid to solve these complex problems so expect the status quo to rule...sorry for rambling...
     

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