Fixing Social Security

[KenH]

An interesting proposal -

www.progressforamerica.com/pfa/wrapper.jsp?PID=1101-140&CID=1101-011704K

 

[Pastor Larry]

Rather than having the government fund "personal accounts"

Personal savings accounts are not government funding. Why don't you understand that it isn't hte governments money? Ford isn't funding your house because you don't pay a car payment to them. To suggest the government is funding retirement because we don't pay them is equally absurd.

 

[Ed Edwards]

It is government's money.
They took it away from us.
If we are lucky we might get some back.

The government has one purpose which they
can do successfully:
taking our money away from us.

The government programs to give us money
back don't work near as effeciently.

I think the USgovernment should end all
entitlement programs save those to which
I am entitled.

 

[billwald]

"a national sales tax will ensure that you pay the tax at the point of sale on every single purchase."

Half the U.S. economy is under the table. Predict if the sub rosa economy increase of decrease if we go to a national sales tax.

"When there is an influx of money into the markets, the market rises typically. That was the boom of hte 90s. More people investing than ever before."

YES, but NOT because of increased productivity or profitability BUT because more cash is chasing fewer goods (the shares), the traditional picture of runaway inflation.

KenH is correct! (post 11876)
Why do we worry about SS going broke but we never worry about the armed forces going broke?

 

[billwald]

BACK TO SS:

1. Why does anyone think that the payroll tax is a personal savings plan?

2. If you all want the payroll tax to be invested in the stock market then the simple solution is to authorize the SS Administration to invest the funds in the stock market.

 

[StraightAndNarrow]

Originally posted by Pastor Larry:
</font><blockquote>quote:</font><hr />Rather than having the government fund "personal accounts"

Personal savings accounts are not government funding. Why don't you understand that it isn't hte governments money? Ford isn't funding your house because you don't pay a car payment to them. To suggest the government is funding retirement because we don't pay them is equally absurd. </font>[/QUOTE]This gets a little confusing but this is my understanding of Bush's proposal. To provide Soc Sec benefits to those who will retire in the near term after Personal Accounts are instituted those who are working and paying into the fund still pay the same amount but it's a combination of SS taxes and Personal Account money.

The Personal Account money reduces the amount that otherwise would be paid out to retirees because it belongs to current workers not current retirees. This would cause a short to intermediate term crisis as Baby Boomers start to retire. To prevent this the government would at least have to match the Personal Account money taken out of the fund and unavailable to current retirees. That's at least a part of the $2T in government funding that Bush says his proposal will cost. So, in effect the Government is funding the Personal Accounts.

 

[KenH]

Originally posted by StraightAndNarrow:
The Personal Account money reduces the amount that otherwise would be paid out to retirees

No, it would not affect the benefits of current retirees.

There are a variety of personal account plans and President Bush has not declared what details he will finally propose. Some of the plans do not require a massive amount of borrowing.

 

[StraightAndNarrow]

Originally posted by KenH:
</font><blockquote>quote:</font><hr />Originally posted by StraightAndNarrow:
The Personal Account money reduces the amount that otherwise would be paid out to retirees

No, it would not affect the benefits of current retirees.

There are a variety of personal account plans and President Bush has not declared what details he will finally propose. Some of the plans do not require a massive amount of borrowing. </font>[/QUOTE]Social Security works by having current workers fund current retirees. The system will be stressed by the Baby Boomer retirements. If personal accounts are introduced obviously the money in those accounts will belong to the worker. This will reduce the amount of money available to retirees and affect their benefits unless something is done to offset the reduction in funding.

 

[KenH]

Correct. Either taxes will have to be raised or borrowing increased since there is no way that Congress will cut the benefits of those currently receiving Social Security checks.

But, as I said, there are proposals for setting up personal accounts that require very little additional borrowing.

I guess we'll have to wait until the president sends Congress an actual proposal to decide on its merits.

 

[KenH]

I have not found a better plan than this one:

www.brookings.edu/views/papers/orszag/200504security.pdf