Phasing out Social Security could strengthen nation

The Olympian ^ | 3/22/06 | Noah Reandeau

[linda_22003]

I agree with some of what you say; certainly we're all born into different families and have different experiences in life.

My parents were definitely Depression era during their formative years (both were born in 1920); they were, as a result, both careful with expenditures and aggressive with investments as a result. Money was to be respected, not wasted, but also used as a tool to deliver benefits.

They were also the generation that has (arguably) benefited the most from Social Security, and also paid the most in, as well. My parents both retired very comfortably by the time they were sixty, and I'm working on following their example! :)

[Paul C. Jesup]

I'd like to imagine a US with a Fair Tax and no SS - but the imagination fails...

Actually part of Fairtax would fund S.S. instead of the current payroll tax for S.S. Fairtax looks to be the only way to truly save S.S., all other ways lead to bankrupcy with in ten to twenty years.

[palmer]

But would you if you were 55 and had been paying for the last 35 years?

I'm 43 and would give up all benefits myself and keep paying taxes for those 55 and older. But there's another part to my deal: phase out free pills and start to privatize medicare.

[restornu]

So did my folks retired very well with savings and my dad earn good money but that did not prepare me!

I was raised in fear and no hope I was dylexic and my mother thought I was backward she had no clude what dyslexic was in those days just her impatience and trashing me until I left!

I was adoptived and she hated my bio mother!

BTW she is still a democrat

[Skooz]

Phasing out social security has always been the right idea, but it won't happen until the backs of the next generation or two begin to break under the tax burden.

Exactly.

Oldsters have no one to blame but themselves by going apoplectic every time a politician says the phrase "Social Security."

No reform is possible because any attempt at reform is political suicide, therefore Social Security is doomed. But, it won't happen until the tax burden becomes unbearable in a generation or two.

[Melas]

You were kicked out of the Optimists Club, weren't you?

[MaDeuce]

You were kicked out of the Optimists Club, weren't you? Yeah I guess so. Beaten down by reality.

[TKDietz]

"And if there is suddenly an influx of cash into mutual funds and the stock market, well it's like printing money.. with no inherent increase in value, the price of stocks will momentarily go up... the big players and market timers will take the windfall, and then the markets will renomalize back into place. "

That's an interesting point. A big infusion of cash into the market inflates stock prices. But if there isn't a corresponding increase in the actual value of these corporations, the market will realize that the stocks are overvalued and correct that. Stock prices drop to reflect their actual or perceived value, and those shares you bought all the sudden aren't worth nearly what you paid for them. One would hope that all the corporations would take all this new money and make it work for them, increasing the value of their companies, but that is easier said than done. That would probably happen for some corporations, but there are no guarantees. Throwing more money at a corporation certainly doesn't always make the corporation become more profitable in the long run.

[linda_22003]

And that's where diversification comes in.... :)

[ziggygrey]

Throwing more money at a corporation certainly doesn't always make the corporation become more profitable in the long run.

Corporations will be very happy to have all that S.S. $$$ flowing into their coffers, because they'll have no obligation to us (unlike the current program). I still remember neighbors who had a retirement plan with K Mart... K Mart went through bankrupcy and re-emerged as a "different" company (even though same buildings, docks, distribution centers and Martha Stewart merchandise) - but my neighbors had nothing. It was legalized theft.

S.S. isn't an investment, it's social insurance. I don't jump on the "I'll make 10X more $$ in the stock market" bandwagon because it won't work out that way if a large fraction of us make that move... we'll be "renormalized" out of all our retirement.

[TKDietz]

"And that's where diversification comes in.... :)"

But what sort of diversification would be allowed? Will they let us invest the money in real estate? Will they let us invest in foreign markets? Will they let us just invest the money in whatever we want, or are they going to give us limited options? I think the option will be somewhat limited to help ensure against folks making bad decisions on risky investments. I don't know that diversification can help you if all the money everyone is investing is concentrated in a limited number of investments. If all the money went to mutual fund investing in stocks on the DOW for instance it would bring the DOW Jones average up at first, but those stocks would be overvalued and we'd see a correction. In the long run though it might not matter because there would continue to be a steady stream of money infused into the DOW and hopefully those companies would prosper and actually increase in real value enough to justify the inflated prices. I don't know. I'm no economist. All this makes my brain hurt.

[linda_22003]

Sorry, we were talking about two different things. I was talking about private investments, which we always have the freedom to make for ourselves, not what the government would "let" me do in an investment account. Those are the investments I am paying attention to, not what Social Security will or will not provide.