Social Security, the easy way to fix it...

In your post to which i responded you did not limit yourself to SS and you mentioned irresponsible spending.

So, i thought it might be fair to mention irresponsible tax cuts, too.

 

And no, it is already an insurance. I'm advocating to move it to the private sector under federal mandate.

 

How so?

 

SS is not a needs based program. If you pay you collect when you reach the qualified age. The more you paid the more you get.

I fully understand auto and term life insurances. When I equated the making of SS into a needs based program I was suggesting that it was no different than taking my death benefit from my family and giving it to the poor. Ones financial situation has nothing to do with SS and should not.

I have suggested that I would accept means testing during a transition to privitization.

 

That's exactly what we are talking about.

There's no reason for guys like Warren Buffet to be getting the SS dole when we already don't have enough money to cover benefits. There is no reason to not make it means tested.

Except to ensure the richest get more and more.

 

Today it's an annuity. Those who say they want to move it toward being insurance are suggesting that it should be changed to insure a particular event - being passed retirement age with income and/or assets below some minimum.

A number of problems came up when Bush tried to do what you want to do. It failed before Bush or the GOP got to the point of having a plan as to how to do it.

So, I know you advocate the idea, but I don't believe you have a plan.

 

Civilization always faces problems that are group problems - defense, leadership/management overhead, etc., etc.

 

Yes. SS is currently more like an annuity. But, we're discussing change.

Suggesting that it is like "giving it to the poor" is not accurate.

If you don't die, your term life payments would end up going to others who have claims.

If SS is run like insurance, if you retire wealthy you wouldn't have a claim, and the money would go to those who do have a claim - those who contributed to SS, but still retired under the "wealth bar", whatever that would be.

The advantage is that when run like insurance, SS is far cheaper.

Think about what your term life policy would cost if the insurance company knew beyond a shadow of a doubt that they would have to pay off on every single policy they wrote.

 

You said "Privatization would not include a transfer of trillions into the markets."

Where are you going to invest the trillion$?

You said "The money does not exist."

If FICA withholding is not money then what is it?
How can you invest something that is not money?

 

I'm talking about the mythical SS bond funds. During a reconcile/privitization there would be a slow transfer of new Fico tax funds I to private accounts. Eventually, all Fico taxes would be privatized. Past surpluses were spent/misallocated as the government chose. Privatized funds would be allocated into diverse investments.

 

Again, you are advocating complete reconstruction of SS. You would be punishing those who save and invest. You could have two individuals working side by side, earning the same wages, and one gets benefits because he spent all his money on new cars, boats etc.. while the other guy gets nothing because he saved and invested instead of buying new cars etc. what you are advocating is pure evil.

 

I don't want it changed, I want it privatized. There is a huge difference. There are numerous good reasons for doing this. SS would not fly in the private sector and should not fly this way as controlled currently by government.

I'm amazed at how liberals complain about wealth disparity , yet advocate the government perpetuation of it. You might as well have Madoffs run it.

Good principles result in good outcomes. Same for bad ones. You're advocating a program based in horrific principles. A proper compromise is to have mandated private accounts that do not promote government dependency and generational theft.

 

No, i want means testing added, so it is more like insurance, thus cutting the cost of SS. I woulkd set the bar reasonably high, so anyone who doesn't qualify due to means testing would look silly complaining about it.

You want to eliminate SS entirely, and then add some sort of federal regulation on personal investment.

Maybe you should try describing your plan for federal regulation of personal investment.

And, anyone who thinks SS is a reward should try living on that.

 

People have no idea how much 12.4% of their lifelong incomes invested in moderate investment would produce in retirement funds and wealth to pass to their posterity. The government has robbed them of this ability.
Again, your solution to SS is to create another welfare program that causes dependency, promotes living check to check and poverty in old age.

Mandated private accounts can be invested with reputable firms that provide disability and term life insurance products in conjunction with diversified mutual funds. Everyone should have a stake in the country. The current government system is Madoff on steroids.

 

no, i am not proposing a new program.

Also, people need to invest beyond SS, as that is a bare minimum at best.

Your description of federally mandated personal investment is far too incomplete to allow comment. Who woukd administer it? How and how often one one need to prove that federal requirements are covered? If portfolio value decreases does the account holder need to make up the difference? What are the penalties for failing to invest enough? How does congress pick tbe companies which are eligable for the 10s of billions of investment dollars? That's a significant new way for government to affect the markets. We have 401k plans today and notice that extracting funds early is common and thgat more "legit" reasons for doing do keep cropping up. How will that be handled for private accounts? After all, it is the account holder's money.

These questions go on and on. They need to be considered seriously when creating a new system of regulation which affects free enterprise and social safety net.

 

You are advocating a complete redefinition of how SS benefits are qualified. That is changing it from a fairly defined "annuity" type program to a welfare program that rewards poor financial habits.

It was a bare minimum when it was a tax of 4% and less, not 12.4%.

Companies like Vanguard, Fidelity and TR Price. The government could demand companies have retirement products that include disability and life insurance. There could be restrictions on access.

A private system would not be difficult and would have numerous benefits when compared to our current Ponzi scheme that is going to further punish each generation with higher Fico taxes and governmental debt obligations.

 

No, I'm advocating means testing be added. Period. I've been quite clear about that.

We have IRAs today. Coming up with ways for an individual to invest money isn't the problem. The problems come in when congress has to make regulation concerning what investments you are allowed to use, how much you are investing, when you can take the money out (both before and after retirement age), is the money automatically deducted like SS is, etc. One Bush era plan was to essentially have the government run an investment pool where your payroll deduction would go. But, then you have congress making decisions on how to invest gigantic sums of money in, what? the stock market?? No sane person likes that, and for several good reasons.

You also have to figure out the transition, since it would be a gigantic bill and requires there to be some sort of cutoff. Is 10 years enough to allow those depending on personal investments to see enough growth in those investments to cover them? Would it have been enough had the 10 years started in 2000? Would it be best to just cut SS in half (as per one Bush era proposal)?

You say it wouldn't be difficult to come up with a privatization plan, but remember that Bush didn't get there. Serious people thought about this.

 

Means testing is an evil eddict. It promotes dependency, irresponsibility and forced redistribution. It is not a solution to our problem.

I'm advocating responsible privitization before we destroy the country and liberty itself. The less the government controls and promises the better.

The current 401k system could have minor modifications. Ultimately, Americans should have the freedom to access and attain wealth to pass to their posterity. Why should a 40 year old diagnosed with cancer not have access to his own retirement funds?

 

There can be numerous reasons why the government does not want to address privitization considering it exposes their inept government plan as bankrupt and disallows them control over a mass of Americans wealth. The situation is only getting worse and needs to be properly addressed ASAP.

 

Means testing reduces dependancy, obviously.

And, 401k history shows a constant progression of weakening requirements, leading to more people depending on our social safetynet in their retirement - not less.

SS was created for reasons. When you propose to eliminate SS you need to have honest answers concerning the reasons for the systerm you are destroying. We know what came before SS. We know about 401k and IRA programs. We know about the risks of federal investment in private enterprise through the stock msrkets, etc. We know the cost of current and future SS disbursements and how they are paid, meaning we know about transition costs.

SS is the only safetynet feature where individuals fund their own support. If you really want to hack the safetynet, I think you should look elsewhere.

And, so far your suggestion is a hand wave.

 

There was no mandate from the public for SS. No different than obamacare. SS will hack itself. It is nothing more than a forced Ponzi scheme that many have become dependent upon. It will keep demanding more taxes and still leave citizens with a poverty level existence, until it collapses.

Means testing is just another word for screw those who are responsible and save. Our founders did not create a socialist country. Freedom demands that we not continue down this fruitless road. Mandated privitized plans is the only way to exit the current system headed for the brick wall. It eliminates the Ponzi scheme, it eliminates the governments misuse of the funds.

 

Yes, i don't agree, but the bottom line here is that you haven't come up with a plan. I don 't mean to be overly critical here, as a few decades worth of conservatives have tried what you are trying.

In fact, you seem like a newcomer to this, as you haven't given the best the Bush era had to offer on this topic.

 

Are you talking about a transition plan from SS to private accounts?

If so, it would involve a specific time frame of about 20-30 years. The first thing that has to be recognized is that there is no trust fund to work with. This means everyone in three generations will have to accept a portion of loss.
Current recipients would see some reductions and no increases. There would be a cutoff at some age for no benefits(55 and younger, I'm 53). Those 55 to 70 would partially fund SS and private accounts. Those 50-55 would primarily fund private accounts. Those 45-49 would fund some % to SS and private accounts. Those 40-44 would equally fund SS and private accounts, etc. etc.

The numbers could be played with, but the premise is that Americans would start adjusting to privatization. There would have to be spread around pain. There could be some means testing.

To be clear, I expect there will be no responsible action to privatize. Most Americans are too weak and too socialized. I will vehemently resist any further socializing of retirement. I'm hoping for a quick death of the programs in a collapse. People will be forced to adjust quickly to non reliance upon government.

 

With your outline I can only guess at the cost, but it sounds like it would clearly be in the trillion dollar range. For one thing, cutting SS disbursements does not save you dollar for dollar, because we have limits to what we will alow to happen to people - our social safetynet.

We're SS to die, we would be supporting more people through other programs, I believe, based on our experience with 401k and IRAs and the unlikelihood of Congress creating adequate investment requirements. After all, you really want government out of it, and we know that means a significant number of individuals will reach the end of their work lives without the needed funds.

 

I think a mandated private system can be structured where it is less accessible generally, but has allowances for extreme cases than the current 401k system.

I understand that most Americans have been dumbed down into instant gratification and lack wealth building skills and patience so that the government has to restrict access to dedicated retirement accounts. The ultimate goal is to eliminate government access to the funds, eliminate government obligations, generation to generation , and promote wealth accumulation for the average citizens.

The current system is a cesspool of moral hazard and promotes government dependency.