Yet Another SS thread

OK I just had a thought on SS.

Bush wants to privitize a portion of SS. I don't like a lot of what he is saying, but I do like parts of it. I do like the concept of giving people more control and encouraging people to save and invest for the future.

So, if you want to encourage people to invest and save for themselves, why not allow workers to contribute MORE to SS? They already track what you put into SS. I get a statement I think once a year that tells me how much I have put in, how much I will get, etc. etc. So why not allow people to opt to put MORE into SS. If they put more in they would get more at the end. They already base your benefit on how much you put in, so why not let people put more in?

Wouldn't this also have the added benefit of putting more money into the system?

It's pay as you go INSURANCE. It was never meant to accumulate. You pay a premium of a set percentage of your pay (unless you're overpaid, but we'll get to that). What you pay in is supposed to go to support people who are retired NOW, so that they can be kept out of poverty.

The insurance is against bad investments, being lied to, Ponzi schemes, and all the other misfortunes that seem to happen to small investors in a disproportionate amount.

Johnson changed one rule, and had a small yearly overpayment transferred to the general fund so that it could be used to defray the cost of the Vietnam war. Reagan came along and raised the premiums SIX TIMES, put the overpayment into the general fund to fudge the books on his tax break to the rich, and used FICA overpayments as a back door income tax hike on the people least able to pay.

Social security is a socialist program that WORKS. At the beginning, the rich exempted their own income, thinking it would fail. It has been a success without them. Reagan jacked up the premiums and then robbed them, thinking that would destroy it, and it still WORKED. NOw it's much more solvent than the rest of the government, which is why Bush wants it destroyed.

The rich, it seems, can never forgive the rest of us for desiring a little security in our lives, especially in our old age.

Take this post to heart. Social security is NOT AN INVESTMENT. It was never meant to be. It's solvent, it's ours, and we are going to have to fight tooth and nail to protect it.

But wouldn't it be BETTER if it was more like an investment?

It makes NO sense to me that the workers of today are paying for the past workers.

The disability and early death parts of SS should be the insurance part. You pay in and if you become disable, there is something for you. You pay in and if you die, your kids get something until they are adults. Sure, that part is great.

But the second part of it, the retirement part could certainly be BETTER. The retirement part of it should NOT be considered insurance, it should be treated like other investments.

Even if you want to consider it insurance, why not allow a person to purchase MORE? That is all I am saying. Why not allow the worker that is making 50K and WANTS to put in some more so they get more when they retire?

I am not trying to argue that it doesn't work. I just think it could be better.

I will disagree with the very last part of your post. The part about it never being meant to be an investment. Here is the third part of what Roosevelt proposed : "voluntary contributory annuities by which individual
initiative can increase the annual amounts received in old age."

So why not allow people to voluntarily contribute more?

who were hit by drunk drivers?

Do resent having your health insurance premiums going to people who discover they have cancer?

When Social Security was started, there were millions of old people who had been wiped out by the crash of 1929. They were destitute. That's why it was set up as pay as you go, with working people supporting the people who could no longer work, with the promise that young, healthy workers would support them when their time came and they could no longer work.

You are free to invest whatever you want right now. However, social security is your insurance and will provide you with an income floor should you be unlucky enough to be lied into investing in the next Enron.

As for contributing more to Social Security, why not overpay that car insurance? You seem to confuse insurance with savings. Perhaps overpaying all your insurance premiums might be a better idea than putting it in bonds.

<sarcasm>

I don't resent any of that. Where did I say that I resent the current system. I just think it could be better, that is all.

I just see social security as two parts. The first part is the insurance part. If you become disable or die, you need the insurance part.

I see the retirement part as something that SHOULD be seperate. It could be better than it is. To me treating your retirement is not something you do with insurance. Insurance is what you need in case something goes bad. You need insurance against the drunk driver. You are going to get old, you really can't insure against that, you plan for it. Treating the retirement portion of SS for what it really should be makes more sense to me.

The insurance is against bad investments, being defrauded, going belly up financially. I know the immortal youth think they're too smart for this to happen to them, but so did all the Enron investors.

Think of it as mother in law insurance. If it is destroyed, she will move in with you. She'll be destitute when her husband's pension dies with him.

and increase the ss payments and include the wealthier citizens in the deal?
Oh,... I forgot.... Bu$h** is in office and we had all better shut up and put up with his "crisis".

Social Security has no crisis except that Bu$h** is trying to rape it.

Unless you are talking about your IRA... then you can put more into it if you want but you won't be able to deduct more than allowed on your 1040. The fact is, "private accounts" already exist in the form of IRA' and SEP accounts. AND YOU CAN WITHDRAW FROM THEM IN AN EMERGENCY OR TO BUY YOUR FORST HOME. (more on this below )

This however, is of no use to the poor who cannot afford these accounts no and couldn't afford them even if Bu$h**'s plan succeeds, in the sense that if the stock market went down they stand to lose much much more than if they just kept the system as it is today.
Here's where I forward anone interested to www.FactCheck.org
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http://www.factcheck.org/article305.html
Benefit Offsets

The President made no mention of one crucial aspect of the proposed accounts -- anyone choosing one would also have to give up an offsetting portion of their future guaranteed retirement benefits. If their investments in private accounts returned more than 3 percent annually over the years, they would end up better off than under the current formula. But if those investments did worse, they wouldn't make up for the portion of benefits that were given up, and the owner of an account would end up worse off. The President didn't explain that trade-off.

"The Money is Yours?"

The President also glossed over some severely restrictive aspects of the accounts he is proposing, saying flatly "the money is yours."

Bush: In addition, you'll be able to pass along the money that accumulates in your personal account, if you wish, to your children and -- or grandchildren. And best of all, the money in the account is yours, and the government can never take it away .

That's not exactly true.

As described by the "senior administration official,"

the owners of personal accounts wouldn't be able to touch the money while they are working, not even to borrow.

The money would remain in the hands of the federal government, which would administer the personal accounts for a fee which the official said would be about 30 cents per year for every $100 invested.

And even at retirement, the government would control what becomes of the money. First, the government would automatically take back a portion of the money at retirement and convert it to a guaranteed stream of payments for life -- an annuity. The amount taken back would depend on the amount of money the retiree requires to remain above the official poverty guideline. That's currently $12,490 for a couple or $9,310 for a single person. Only after the combination of traditional Social Security benefits and the mandatory annuity payments from the private account equal the poverty level would any remaining portion in the account be "yours."

It might make no sense to you that 'workers of taday are paying for the past workers' however that is perfectly sensible and is the way many insurance systems work, for example auto insurance, health insurance, disability insurance etc. SS is pension insurance, it guarantees a minimal benefit level to all retirees regardless of their investment savvy or discipline, regardless of the economic misfortunes that might adversely affect even the savvy and most disciplined investor.

You seem to have bought into the bullshit that SS is an individual retirement savings plan that happens to be run by the government. It isn't and it was never intended to be that. This idea is just right wing crap intended to confuse people, and you have fallen for it.

You want an individual retirement savings plan? Its called an IRA.

This old tired argument that "I can't invest in anything else unless I pay less in SS" is a joke. Do those people REALLY mean to tell me that 2%-4% less held out per week is going to make them rich in the stock market??--ROFLOL. If you can't save a couple of bucks per week without a reduction in your payroll taxes then you have a problem anyway.

To most people that wouldn't represent more than a buck or two PER WEEK. Oh right...with that dollar or two you could buy ONE share of Google in oh...TWO YEARS.

Problem is that one or two dollars less going in to SS times millions of workers is a huge amount amount lost,all so Bush can cater to his investment buddies. Talk about a ponzi scheme....

It is the set of tax-deferred investment options open to one and all. SS is not an investment plan, it is an insurance plan.