Skip to comments.Herman Cainís Social Security Problem
Posted on 11/28/2011 11:18:59 AM PST by TitansAFC
Though I applaud the refreshing boldness that Mr. Cain had shown by proposing to America an actual plan for tax reform, there are two serious drawbacks to his solution that show his fiscal naivete. Most critics would point to the unsavory proposal of having both a sales and income tax in force at the same time, making it possible for future Congresses to increase rates and turn us into Europe. But it is actually the plans impact on Social Security that is most devastating.
Cains plan would eliminate the Social Security tax and related withholding, and cover retirement pensions as a true entitlement (welfare) system out of general tax revenues. This is not what Social Security was intended to be as established by FDR; that is, a system in which people paid for their own retirement. Once liberal politicians started promising individuals far in excess of what their contributions paid for, with no actuarial consideration nor funding whatsoever, Social Securitys demise became assured.
In order to overcome its crippling insolvency, Social Security must go back to its original intent a self-funded retirement plan. This could be achieved by taking any of many possible forms, but must include the concept that individuals themselves are paying for their own retirement; ie, they are putting money into a plan which will become their invested retirement fund.
By contributing more deeply to the entitlement problem and making Americans further wedded to the government through entitlements, Cains tax plan is a failure. Such a solution ultimately departs from his avowed conservativism.
Social Security *Insurance* (SSI) was never originally intended to be a retirement plan at all.
Yup, 999 is Cain’s only real issue and it isn’t even a good idea. He’s a great motivational speaker, but there just isn’t much substance behind the smile - nor does he understand the issues well enough to really develop anything beyond 999.
First it was there to provide for war widows, etc.
Then it was there for retirement security (insurance)
Now it's a public retirement pension.
Privatization, certainly partial privatization at least, is the way to go.
I can’t rebut this because of my lack of economic expertise but please don’t let the good be an enemy of the perfect. There is plenty of time to make a workable, conservative solution out of 999 or else treat it as temporary on a step to utopia.
Social security is messed up right now. Obama, if he touched it, would only make it worse. Newt would go with whichever would make him more beloved by the most people. So because Cain’s plan isn’t perfect doesn’t mean it’s not the best possible plan out there. I haven’t heard romney’s great conservative plan, and no one else will be president but those people.
Another good thread to post this e-mail I just opened.
Salary of retired US Presidents .........$450,000 FOR LIFE
Salary of House/Senate members ..........$174,000 FOR LIFE
Salary of Speaker of the House ..........$223,500 FOR LIFE
Salary of Majority/Minority Leader......$193,400 FOR LIFE
Average salary of a soldier DEPLOYED IN AFGHANISTAN - $38,000
Average income for seniors on SOCIAL SECURITY - $12,000*
I think we found where the cuts should be made! If you agree... Pass it on!
*The President says we may have to cut Social Security??
Barry and his minions are already doing this ... step by step ... with the aim of eliminating the "regressive" payroll tax and replacing it with taxes on millionaires and billionaires.
The pubbies are already being demonized for not extending the payroll tax cut because "they want to increase taxes on the poor and middle class" to further enrich their "wealthy" friends.
What social security tax? There has been no “REAL” social security tax in decades. It should be called a “TINO”. Now the dems are wanting to continue the recent Social Security Tax cut which they are incorrectly calling a payroll tax cut. If there was a social security fund it would be hurting that fund. Now FICA Tax is just another tax and has been since LBJ days. But it is being used as a political ploy. I am just totally disgusted with all the crap going on. Just read a Bloomberg report this morning that 7.7 trillion dollars was handed to six different banks without any knowledge of congress. No accountibility. That was in March 2009 right after the 8 billion dollar TARP. We keep getting screwed by the world bankers but hell H.L. Hunt warned us of this in 1958 or earlier.
Correct. Too bad many here don’t understand that SS is not a “good program gone bad”, but a fraud from the beginning that is now destroying the nation.
Funny how they all seem to love Newton Leroy, though, eh? HotAir.com still has not reported a thing about Newt's FreddieMac lobbying.
So, would term limits only create more instances of these kind of liabilities?
Too late to close the stall door now. That horse fled the barn about 40 years ago. Anyone who thinks there is seperate money set aside in a "trust fund" is a simpleton.
It's already possible. The Donkees would love to layer in a VAT or something, the better to shear the sheeple and buy their votes with their own wool. The only thing that prevents it is Republican votes. There's nothing in the Constitution that keeps Congress from instituting a national sales tax.
Glad you agree with Herman Cain on that. Privatization, similar to Chile, is part of his campaign .
0-0-0 is much better.
I get to keep more of MY money which I can then invest for my own retirement. SS was originally meant as a safety net because of the severe circumstances of the depression. It was never intended as a retirement program for everyone, that came later
No doubt the dems slipped it in under SS cover. Don’t know if SSI is overall good or no good. Do know alot of people scam to get it and they all ain’t just Holders people.
A lot of things have reduced Cain to bagasse.
Well, Perry dared to speak the truth about SS and look what it got him. Romney ridiculed Perry.
So that would have been in 1935. Payments began in 1940 and Ida May Fuller, who had paid $22.54 total in SS taxes, started collecting checks for the next 35 years and got a total of $22,888.92 in payments.
Until the 1980s Social Security always ran on a "pay as you go basis" where they collected enough to pay current retirees and never worried much about the future. At the time the trust fund was run more like the "leave a penny, take a penny" tray for the years when they taxed a little too much or came up a little short, but the contents of the trust fund were minimal compared to annual revenue and expenses. After 1986 (I think), taxes were increased to be able to "save" for the future, but Congress had the keys to the Social Security trust fund vault and spent it all long before it was needed.
So Congress can't raise taxes under our current system?
And we don't currently have Sales Tax "in force at the same time" as Income Tax in all but five states? (Alaska, Delaware, Montana, New Hampshire, Oregon)
This is a tired argument.
Cain's plan isn't the best option, but he put something on the table and forced the other candidates to come up with a proposal. If people want to gripe about Cain's ideas, they should jump to the end result, which is the Flat Tax. 9-9-9 is a transition plan. (And in my mind, why bother with that... just get right to the end game.) So if people have a better idea, throw it out there. Because if we don't start talking about it now, it will never get changed/fixed.
Yes - if the pensions were not stopped ASAP.
How many working people get such a generous pension after only 2, 4, 6, or 8 years on the job?
Term limits can be implemented and elected officials must make their own contributions to a 401K or to the Social Security fund....like every one else.
Which is what Cain has supported if you listened to his debate with Gingrich.
Why are you lying about him again?
Cain supports privitization of the present system.
That worked out for Ida May but not so well for my dad, who paid in from the beginning until he died in 1974 and never received a dime from S.S.