Posted on 09/28/2004 7:27:13 AM PDT by The Great Yazoo
Would you sign a contract that enabled the other party to change the terms of that contract at will, while you could neither stop him nor make any changes of your own? Probably not. Yet that is exactly what happens when you pay money into Social Security.
No matter what you were promised or at what age you were supposed to get it, the government can always pass a new law that changes all of that. But you still have to pay into the system.
A private annuity plan run by an insurance company is legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem its promises.
One of the few issues on which Senator John Kerry has taken a stand and not changed it (yet) is Social Security. He has said: "I will not privatize Social Security."
This has long been the position of liberal Democrats, and John Kerry's voting record in the Senate makes him one of the very few Senators more liberal than Ted Kennedy. That is the ranking given by Americans for Democratic Action, a leading liberal organization that ought to know.
Why are liberals against letting people put part of their Social Security payments into private investments?
Risk is one of their arguments. Al Gore incessantly repeated the phrase "a risky scheme" during the 2000 election campaign and risk still seems to be the big objection to letting people put their own money where they want.
Some liberals may actually believe that politicians know what is best for you better than you know yourself. That is, after all, the philosophy behind many other government programs.
Another reason for liberal opposition to private investment of Social Security payments is that it deprives them of control of billions of dollars that they have been spending from the Social Security trust fund for years. They can buy a lot of votes with all sorts of giveaway programs, financed by money taken from Social Security.
As for the risk of making private investments, that might be a real concern if people were putting their money into commodity speculation or other volatile markets. Most people have better sense and privatization could limit where Social Security premiums could be invested.
Although the stock market bounces up and down from day to day, people are not investing today in order to retire next week. They begin paying Social Security premiums when they first get a job and they retire decades later.
Stocks are far less risky in the long run than they are in the short run because the ups and downs balance out over a long period of time. It is virtually impossible to find any 40-year period in which the stock market has not paid a higher rate of return on your money than you get from Social Security.
There are some mutual funds that simply buy a mixture of the stocks that make up the Dow Jones average (or Standard & Poor's), so that their clients will have the kind of return on their investments that the stock market as a whole has. They don't make a killing but they don't get killed either.
How did Social Security get into its present mess in the first place? Because politicians made it the "risky scheme" that they now claim privatization would be.
The same political expediency which caused Social Security to be called "insurance," in order to get public support, guaranteed that it would be nothing of the sort. Unlike an insurance company, Social Security has never had enough money to pay for all the pensions it promised.
Instead, Social Security has been run like a pyramid scheme, where the first people to pay in get money back from the second wave of people who pay in, and the second wave get money back from the third wave, etc. This is so risky that pyramid schemes are illegal -- except when the government does it.
They have gotten away with this thus far because the first generation covered by Social Security was an unusually small generation that was followed by the unusually large "baby boomer" generation. But when the baby boomers retire, the pyramid scheme will no longer bring in enough money to pay for their pensions.
Nothing is more risky than depending on politicians.
Put me on your X-er ping.
Community property laws may still apply. Get a legal opinion from a competent lawyer in the state where the parties reside.
If you were anywhere in physical proximity to me, we would have a bet on this. This is going to occur within six years; probably within three. The Demodogs are losing the ability to scare the seniors about this issue.
The seniors aren't the same seniors they've scared in the past. What used to be seniors are now us. I'm not clear on how that'll play though.
You may get some partial privatization but as long as most of my SS tax goes into the Ponzi scam, it's a loser for us younger folk. I'll grant that the Demodogs don't have much to stand on now that Alan Greenspan has delivered two dire warnings.
I will predict with some confidence that the Demodogs will succumb to President Bush's efforts to allow everyone to deposit some of their SS funds into a private account. They need to do so to get some pressure off before too many more elections. The younger voters are getting more and more adament about this, and older ones like me are too.
It's not my story -- it's just an example of how government management of personal relationships stinks. The biggest problem is that most people have no idea what the inheritance and divorce laws are when they get married, and the state sees no need to inform them before they sign the "contract", nor when the laws change.
For a peek at what a good privatized system would look like go to Cato website. They have been leading the charge for 20 years.
That's what lawyers are for! (Sorry, but I gotta feed my kids somehow!)
I just posted Part II
Anyone who is against private accounts and wants to stay with the current system is completely insane. The money should completely be kept in private accounts with the government not seeing a penny of it.
I will need to save my money if Bush continues to waste it abroad. He needs to focus on social security reform, cutting taxes, cutting the size of government and stop wasting time on Iraq. I absolutely couldnt care less about Iraq except as a potential oil source and military base. You dont need to pay hundreds of billions for that.
My point is only that there will be no massive, sudden change. This is a first step to allocating the "trust funds."
Exactly.
And in all the talk of "privitization" and the numbers being crunched and the rhetorical volume being raised, I NEVER hear the fundamental truth that Social Security is direct affront on our most sacred value: individual freedom.
Being forced to pay into an unaccountable system for decades of my life is not, in my opinion, constitutional.
If I don't save for my future when that's my business. I can always work until I die. Or I'll starve and live on the street. Regardless, it's not anyone else's concern. I shouldn't have to be forced by law because some liberal idiot wants to be compassionate.
So fighting a war on terrorist scum that want to murder us isn't a priority for you?
Sorry, you won't need Social Security or worry about taxes or the size of government when it's more than likely, given your statement, that you'll be killed by our enemies.
And no need to post back with all the "Iraq didn't attack us" or "Iraq has nothing to do with the War on Terror" BS rhetoric. I'll never buy it and anyone that does, in my opinion, is an idiot.
The Social Security Administration's operating budget is over $8 billion. That's pretty expensive alreay.
And they won't be doing the tracking. The "private" money will go into equivalents of your 401K, or the same ones you already own, and those are simply tracked by these strange boxes on our desk we call computers.
Fighting a war against muslims is a priority. Spending hundreds of billions and thousands of lives in building up a nation of terrorists is not a priority. Dont try to lump the building of Iraq and the War on Islam together. They are two separate things and one is a waste of our resources and the other is something that must be done.
I even told you in advance that I wouldn't buy that theory and in no way could I be persuaded. But you went ahead and did it anyway.
And I still think you are 100% incorrect. Regards.
"And no need to post back with all the "Iraq didn't attack us" or "Iraq has nothing to do with the War on Terror" BS rhetoric. I'll never buy it and anyone that does, in my opinion, is an idiot."
If you read my post you will see I am not saying that Iraq didnt attack us or that Iraq has nothing to do with the war on terror. I am completely in favor of the war against Iraq. I am against the building up of Iraq and spending hundreds of billions on their government, military, police, infrastructure, etc. So I didnt "went and did it anyway."
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