Skip to comments.Vanity: a simple way to fix social security
Posted on 09/08/2011 8:19:58 AM PDT by disraeligears
The Social Security system in my opinion is definitely a ponzi scheme and what follows is a way to fix it. If you agree with this approach, please cut and paste and pass it on to other forums.
However, there is a relatively easy way to fix the social security problem. For those of us in our early fifties and younger and who have contributed for 20 - 30 years into the system, it is apparent that we are not going to get out of social security what we put in.
The government is either going to have to reduce benefits, means test benefits, or raise the age of eligibility or a combination of the three. These solutions are already being proposed and a combination of the three being enacted is a given.
So go ahead and raise the retirement age, reduce benefits and means test. But in conjunction, a relatively equitable solution is for those of us who are ages 51 - 55, give us a lifetime future 70% federal income tax credit on federal income taxes owed on amounts up to $100,000 per year from now on so that we can start to save the difference now for our retirement years.
Those younger than 51 can have the tax credit percentages staggered downward. For example: 46 - 50, 60%; 41 - 45, 50%; 36 - 40, 40%; 31 - 35, 30%; 26 - 30, 20%; 21 - 25, 10%.
This way the federal government can go reduce and reduce its substantial entitlement obligation, but will forced to reduce its entitlement obligations in other areas given the immediate reduction in its tax revenue stream(unemployment benefits, medicare, medicaid, welfare, etc.).
The benefits will be that the general tax burden will be decreased, spuring job growth and resulting in an eventual increased tax revenue stream from a healthy, growing economy, and people wont be entirely deprived after having contributed up to 35 years into the social security ponzi scheme.
With increased tax revenues from a growing economy we would hopefully be able to reduce and eventually retire the debt.
However a fair tax and/or low flat tax would be necessary so the federal government doesnt just enact the above referenced tax credits while raising taxes in general.
Now this would be change we could believe in and would incentivize and reward the work ethic once again, while recognizing the reality that the Social Security system as we know it is broken and we cant fix it without substantial restructuring.
For those of us who are in our mid 50s and younger, we have to recognize that those Social Security income projections which we receive in the mail from the government are false promises and will never come to pass.
in the end they will all wimp-out and just apply the FICA tax to every last penny of income
What, kill the old people off by denying them the medical care now owned by the government?
It's already been thought of.
The definition of government is false promises. Of course, SS was always a ponzi. It will be a “just try to collect” system with the eligibility going upward until the death rate overtakes the living eligible. Presto, ponzi is fixed.
How about simply limiting the payout to what was paid in plus
the interest it would have earned if invested in 30 year tbills.
...Or we could stop “saving” the socialism and end the program now.
Social security doesn’t need to be “fixed” it needs to be eliminated. Then you can choose to get together with friends or whomever you choose, and do what you want with your own money. I forget whoever referred to it last night, but the best welfare is a job. Government can (but won’t) stop regulating prosperity to death, and those who absolutely cannot provide for themselves can beg for charity.
THERE IS NO MORE MONEY when people stop lying to themselves that “Charlie Chang” (the Chinese), as another poster put it, will no continue to subsidize our way of life, then they’ll be much better off. There’s a monetary manipulation, but make no mistake, Social Security and other socialistic programs WILL go down whether by collapse of the currency, or elimination of the program. The generational rape will only continue until the golden goose is dead, and that day is quickly coming.
There is no way the Lincoln system will give a “break” in our most productive management years. The economy is falling due to Obama and his jack-ass socialism. Our Nation drives it and the moonbats can’t see it. They will soon.
If any payout was due at all (It’s not, in my opinion), then the government should do something similar as to what you stated (limiting the payout to what was paid in plus
the interest it would have earned if invested in 30 year tbills). In a simple lump some payment, one time, nothing more. There’s no money anyway, so they may as well “monetize the debt” (so to speak) and get it all done with at once. That way at least the younger generations can recover, and those who supported the system can reap the fruits of the economic environment that created/allowed for 50+ years of adult life.
There’s no mistake, there’s no money, and there’s no way to “save” Social Security. You can’t squeeze blood from a rock. Perry was correct that the younger generations aren’t stupid, they know they’ve been lied to and there’s nothing coming to them for what they are and have been paying. Everyone is crying about Obamacare and being forced to buy insurance, but not being forced to but “security” or retirement. Make it 100% voluntary, by eliminating it altogether and let people do as they see fit with their own money. If they squander it away, that’s not the fault of anyone else. Social Security is a failure, no amount of planning can ever change that, because as famously phrase, you ALWAYS run out of other people’s money. We ran out of ours years ago, and we’re quickly running out of foreigners buying our debts now. Soon the only people’s “money” we’ll have is the FED’s, which is really just our own money being made worthless. It’s time for people to get real.
What needs to be done is ALL personal federal income taxes collected on Social Security must be recredited to Social Security and not just dumped into the General Revenues.
Sell it, mortgage it, or rent it out.
At the moment entitlements are NOT the problem with the federal budget. In the future they could be. The national patrimony can be used to back up all the federal obligations with ease.
You know good and damn well he is going after all the prosperity God has bequeathed us. His dog don’t hunt at all.
If you are a wealthy person and have no job, but live off your investments do you still get SS?
I remember Ros Perot saying that it was ridiculous that he was eligible for SS.......................
There is no money, but there are assets, you are absolutely correct. Sell them off, pay out a lump some, and get rid of the idiocy. Entitlements are ALWAYS a problem with the budget (though I understand the spirit of your statement), because there is no constitutional basis for it, and the moneis supposed to be used for them are all gone. It’s like saying the ever increasing fee’s on your increasing number of payday loans (like our 40% debt service) aren’t the problem because your still making payments, and you have things to sell. Sure that may be true now, but unlike that simple (payday loan) example, the actions that the government takes don’t just eat up a portion of the income, they also hinder/stifle the current market. People have less money to save/produce/invest when taxes into financial oblivion which snowballs.
Another FReeper posted an article about something called the “Theory of Snowballs” or something to the effect, which talks about how many (most in the authors view) things in life happen and change at an exponential rate that is imperceptible for a long time, and then very, very sudden. That’s what’s happening now, because the more money we borrow for the general fund, the more interest we have, meaning the less money we have, so the more we are taxes, which decreases the revenue, causing a further need to borrow and a higher interest payment. It’s simple math. Better to pay out the obligations, take the hit now, and fix what’s broken, than to justify the broken system and try to save it (thus increasing the exponential rate at which it grows). That’s what I’m trying to get across, but I completely agree with you post, that we have the funds to back it.
Remember where there is little incentive to produce, nothing gets produced, that is the problem we face today, and it is ALWAYS the INEVITABLE outcome of ANY form of Socialism. Always. No matter how trivial anything can seem or how easy it is to sell as paying for your future (SS), it’s only the camel’s nose in the tent.
SS was sold as a SUPPLEMENT to your own plan, but of course, Socialism is NEVER packaged for it’s true intention. To remove personal accountability and enslave the masses.
They can keep what I paid them if I can opt out and keep my 15% from now on
I could retire in half the time with twice the money
(I am 53 now)
SS was a MONEY GRAB from the beginning
When first enacted the retirement age for SS was 65. But avg life expectency for males and femails was BELOW that age.
So they never expected to have to start paying anything out.
Wrong, an IOU is not an asset of any tangible value.
Thank you, someone else who gets it.
Entitlements have had sufficient dedicated taxes collected to pay for them. Alas Congress has been spending the money on other things anyway, but that doesn’t mean the accounting no longer favors the entitlements ~ just that all that other stuff is living on borrowed funds and should be stopped.
He wasn’t referring to IOU’s, he was referring to the Assets the Federal Government owns, like Federal land/resources, unless I misunderstood him.
An acre of federally owned rare earth deposits is an asset! EPA is not an asset.
Sure, that means we don't have that $29 billion anymore once we pay it, but that's a very small part of the national budget.
While that may be accurate to a degree (for now, but whoknows in 10-20 years), I know that ending all Socialism will be best for all of us, and that it has no place in the Federal Government. (States can do as they see fit according to their own constitutions, IMHO).
If you ever had taxable income and paid Social Security (and got 40 quarters worth of credits) you get SS.
IIRC, SCOTUS has already ruled that SS is simply a tax and Congress can dispose of the funds as they see fit. There is no ‘inherent right’ to SS funds, paid by you....................
They could have gotten health care for the poor in the same way. Let doctors write off nonpayment against those that do pay 1:1 but that wouldn’t have let them have control!
SS is worse than a Ponzi scheme. In a Ponzi scheme, greedy people voluntarily put their money into the to good to be true scam. SS is a forced confiscation of your money, work and refuse to pay up, and the federal government will send people with guns to make you do so.
Means testing turns it into a welfare system, rather than a state pension system. Like all welfare systems, it punishes the productive and prudent: if you paid your social security taxes all your working life and had the foresight to properly save for your retirement, you don’t get social security. If you were improvident and have almost no retirement income from your investments, you do. Bad idea.
The only way to keep faith with those who paid into the system and fix it, in the sense of preventing social security from dragging the whole economy into its grave when it collapses, is to gradually increase the eligibility age until the system is functionally abolished:
First, be honest and just merge the Social Security system with the general Federal budget. The smoke and mirrors of the “Trust Fund” which contains nothing but IOU’s from the Federal government serves no purpose but to deceive the general public.
Second, fix a schedule for increasing eligibility age based on current age. I propose for every year a person is below 60 years of age at the time reform legislation goes into effect, the eligibility age be increased by two months. Folks 60 and older would become eligible under the current schedule: 62 for any benefits, 66.5 for “standard” benefits, 70 for maximum benefits and a requirement that they start drawing benefits. I (at 54 year of age) would have to wait a year longer. Someone now 48 would have to wait two years longer; a newborn would have 72, 76.5 and 80 as the eligibility ages. Do the same with Medicare eligibility.
When Social Security was initiated, the age for benefits (there was only one) was 65, but the average life-expectancy was 61.4. Now the average life-expectancy is 78.3. Maybe the drift upward in eligibility ages could be stopped and the system preserved in perpetuity if folks couldn’t draw Social Security benefits until they were 3.6 years older than the average life-expectancy, but I’d rather see us eventually scrap the whole thing move to a Chilean-style pensions system (though that requires not just fixing Social Security, but a simultaneous fix of the pension system: day-one vesting and full portability of all pension contributions, like what us academicians have thanks to Andrew Carnegie.)
They might as well, since that where it ends up anyway. That, in itself would probably save tons of money. Do the same with Medicare taxes and just quit this stupidity of itemizing taxes on our pay stubs and W-2's...............
Do whatever you want, after it’s resolved to float the retirement age to ensure annual solvency without borrowing or creating a “trust fund” to be stolen by Congress.
Then, ya’ll can decide whether to means test, raise taxes, phase out for younger generations, or whatever. But SS must not be a millstone around the economic neck of Uncle Sam.
I like the lump sum idea.
Form a new IRA and pay out a lump sum at at 65.
Better than paying unemployment to people not to work.
Seniors would certainly spend some of the funds, the rest would be invested, which would create jobs elsewhere.
Eventually liberals will realize that cigarettes were the only chance that Social Security would stay afloat.
“payout to what was paid in plus the interest it would have earned if invested in 30 year tbills”
Who’s going to pay for that?
Actually they've come up with something much more effective because it will touch a much higher percent of the population: ObamaCare.
I think all this worry over long term SS insolvency is unwarranted. ObamaCare is guaranteed to start racheting the life expectancy downwards.
I’ve already answered that question. Additionally, I already have stated numerous times that no one is owed ANYTHING from social security, and SCOTUS has made that ruling also. Since that’s a fact of life, I believe in no payout. If there IS to be a payout (which I don’t agree with), I believe it should be a one shot deal, and not a drag for decades furthering the expansion of socialism. If the options are stop the stupidity (end SS), pacify the entitled and then fix the mess (pay out in a lump sum), or destroy the American Republic through socialism (Keep social security), the choice is clear, simply end all Social Security NOW.
I don’t need to find a funding solution for the lesser of two evils (lump sum, versus destruction of the entire nation and currency), unless there is no chance of a real option. There still is, and I’ll cross that bridge when we if (we will) we get to it, at that time. But since it’s been previously stated, try reading up thread.
You seem a little heated. I think we mostly agree.
The odd part of this debate is that SS wasn’t there for most people after WWII. Not because they weren’t vested or any legal rule but because most people who paid SS would die before they received a benefit. It always has been somewhat of a Ponzi scheme.
It always has been pay as we go. There has never been a store house of retirement homes or gold for people retiring on SS to collect from. It’s always come from taxes.
What I think we should do is simply raise the retirement age by three months in any year SS runs a deficit. Taxes for SS are too high as it is and I certainly don’t want us to pay any more. Add Medicare in that calculation too. Clear, simple and flexible.
I don’t want to see people starve if they are too irresponsible to save for themselves. They certainly shouldn’t “live well” but neither should they starve. Just because it is “not my fault” they screwed up doesn’t mean I think they should die.
I don’t agree with monetizing it. I doubt our debt can be monetized because so much of it is short term debt. monitization is a heavy sword and difficult to control. We’ll default before we realize that we are certain we will default. Defaulting is not an option because ALL paper assets would become worthless.
I think we agree to an extent, but I will NEVER be satisfied with the socialism, it is evil to the core. You said:
“I dont want to see people starve if they are too irresponsible to save for themselves. They certainly shouldnt live well but neither should they starve. Just because it is not my fault they screwed up doesnt mean I think they should die.”
Then you (and I and anyone else), are free to give to them from your own savings, but NEVER are free to give to them from the public coffers. Surely if you look at your post, you realize that there can never be personal responsibility when you know you will always be taken care of. These evils ALWAYS start out so innocent, which is why I stated, that as long as there are payments, they WILL be the camel’s nose in the tent.
Also raising the goalposts for retirement age does nothing except state that all animals are equal, but some animals are more equal than others (in this case, those born first), that is generational rape, and not at all “Equal justice under law.” Just end it all, or we WILL default, through hypperinflation.
That’s too close to Libertarian for me and I don’t believe in natural selection for humans. I’m also a frugal person who has no tolerance for the indulgence of others. A minimum payment to keep them going paid for on a cash flow basis makes sense to me.
There’s nothing in the Constitution that even allows for Social Security, it’s completely unconstitutional. Like I said before people get touchy over obamacare, but not Wilson’s retirement care. I shouldn’t be forced to buy either. States are allowed to make thier own programs, the Federal Goverment is not. I happen to be a very charitable person, on top of the robbery and theft stolen from me at the gunpoint of the law. But NO ONE should be forced to slave away for another, which is EXACTLY what social security is. It was supposed to supplement one’s own savings. What happened, people stopped saving and are now at the mercy of the Benevolence of Big Brother. The death panels are already in existence, they’ll get worse as there’s less and less money. I’m not willing to exchange my liberty for security, even if you’re willing for me to. Sorry.
Besides, you said this:
“A minimum payment to keep them going paid for on a cash flow basis makes sense to me.”
I don’t care to decide what “minimum” is for someone else, they should decide that on their own, by using their own funds to do so. Charity has a place, but so does self-reliance.
Beans and rice, rice and beans. I could see $10k a year max plus a minimum of medical expenses.
On the constitutional issue we agree academically but practically, most Americans take a Madasonian view of the constitution rather than a Jefersonian view. Madison wanted a government that when the House, Senate and President agree is powerful. Jefersonians have always been fighting a rearguard action and have given a lot of ground.
If it gets out of hand and on it’s present course it will, then we can go to 50 nations rather than one.
“Beans and rice, rice and beans.”
You’ve just described my basic diet. I agree with you that we have a lot of ground, but I think the major problem that most people have to overcome is the idea that things can’t be fixed. It’s because the liberals keep changing the rules and then say “Well, not just try and get what you want when limited to our method of law making.” We have, have, heave to get back to our Republic, and that requires strict adherence to the U.S. Constitution.
“Madison wanted a government that when the House, Senate and President agree is powerful.”
That may be true, but the system set up was meant to have representative for one in every 30-60K people, not nearly 1 million, and to have state legislatures appoint their senators, thus being a true democratic, representative Republic and not the Democracy we’re almost fully at today (with states pledging all electoral votes to the popular vote winners). Democracies are vital to communism/socialism, and we’re almost there, in which case the constitution will mean nothing. The Founding Fathers too reminded us that Democracies are “as short in their lives, as they are violent in their deaths.”
Another FReeper introduced me to this site, and a few others have recently begun to talk about it, you may find it interesting: