Posted on 01/23/2005 9:59:48 AM PST by ReleaseTheHounds
I have to agree with you there. We've also aborted a large tax base in the past 30yrs ...and it going to be showing up on the books pretty soon.
Heck, Roe v Wade came about two years before I was born...I would say that the impact is already here.
I see you are here peddling your bogus two trillion dollar price tag on Sicial Security reform.
I thought I had educated you to the nature of your mistake on another thread, but here goes again.
If you don't get it this time, perhaps you are UNWILLING to face the truth and that you are here for one purpose: to lie and propagandize. I hope that isn't the case.
Get this straight: Letting people keep any amount of their own money, whether one dollar or two trillion dollars doesn't "cost" anyone anything. Meanwhile, we need to sunset the present ruinous system.
So where is it you think that this two trillion dollar expense will come from? I suppose you are referring to the cost of supporting the retirees who have already had their money stolen and as a result are dependent on the Social Security handouts. If so, you need to be aware that this will cost us whatever it costs us, whether two, three, or four trillion dollars, and there is no escaping this expense.
As a nation we are already obligated to keep the faith with those of us, like me, who have been forced to pay into the old system all our lives.
The issue is really whether we allow the present system to sunset, or whether we try to do the impossible: perpetuate a Ponzi scheme in perpetuity.
You seem to come down on the side of continuing the fraud.
If you are posting in sincerity, please open your mind. If you are just trying to stir things up, why don't you go elsewhere.
If you really don't understand the situation, as you seem to imply, write me.
"So, let's say 20% of the approx. 100,000,000 workers in the US today want to opt for the private accounts. What I've seen thus far states a maximum of $2000 per year for each participant, so we'll use that figure. 200,000,000X2000=40 Billion. So the government borrows $40 Billion per year to cover the costs of the accounts, and I'm assuming it gets added on to the federal deficit."
From what I can tell you have a major flaw in your numbers. 100,000,000x.20 (20%)= 20,000,000x2,000=$40,000,000 per year. Therefore you're calculation of 30 years deficit is $1.2B. Considering the budget today is currently $2.5B and assuming the same budget rate for the same 30 year period, and we know that is a joke, the budgets for these 30 years would total $75B. That means that 1.6% of the total budget over 30 years is not available for spending. I think they should certainly be able to find 1.6% worth of opportunities to reduce spending.
Keep in mind that is the minimum and it assumes a constant budget, not the typical increases in the budget. Even if I default at your $12B number, then 16% of the total constant budget is the scope of the problem you describe and they should certainly be able to reduce spending by 16% over 30 years. You seem to be fighting against freedom to protect the out of control spending.
Regardless, the issue isn't that the government has to borrow to allow the people to keep $2,000 per year in private investments, the issue is that they are spending that money today in the general budget. The issue is that their spending is out of control and I frankly think it is their responsibility to live within their budget. I have to, so should they.
I don't understand your stance against people keeping more of their earnings just because the government has lost control of their spending.
"No, I consider my money to be mine until the government snatches it from my resisting hand."
It is still your money, even after they steal it from you. They just seem to think they are better at deciding how to spend it.
"Even if what you said were true, being a conservative is not a one issue viewpoint and I'm sure I could find issues in which your conservatism is tested.
I'm actually BEING a fiscal conservative by objecting to this plan."
How is protection of out of control government spending being fiscally conservative? See my other post for the details. In addition, don't forget that the political theives are spending the SS money today and they have been for a very long time. All SS surpluses have been spent in the general budget, therefore any shortfall comes from the general budget.
Here is the issue. If everyone continues to pay, just like they always have, then per Cato Institute, we're $12 Trillion short. The reason why we're $12 Trillion short is that current contributions DON'T COVER current retirees - that's the gist of the SS problem. Now, if people DON'T continue to pay into the current system, but divert that same money to another account, then we're even MORE short because the money has been diverted! That will eventually be partially recouped when those who have diverted money eventually use it at retirement, but that will be much further down the road - NOT in the midst of the baby boomer retirement, which is the problem in the first place! Consequently, we have to cover the $12 Trillion PLUS the additional amounts ($50 Billion plus per year) in order to allow everyone to retire. My point is that the 'fix' doesn't actually fix the problem! We are still $12 Trillion in the hole!
The figures I used also assume that not everyone will opt for the accounts (unlikely) and that the program will be capped at $2000 per year (unknown at this point). If either of those two variables head toward the worst case scenario of ALL participants opt for accounts and/or ALL social security contributions may be diverted, then you're talking about a plan that would cause a HUGE deficit! Do you know, for a fact, what Congress would do with this plan when they get it?
NO ONE has suggested that those who have paid into the system should not receive retirement benefits when they retire. Sunsetting the plan any time soon would do exactly that because the government simply does not have the money to cover current and future retirees who have paid into the system without the social security tax to generate revenue. Social Security costs $500 Billion per year.
I would MUCH prefer to keep my own money rather than let the government squander it. However, the system was created before I was even born and it exists. Trying to kill it would be politically impossible. So, the only viable political solution is to fix it, including in a Republican controlled Congress. If they want to make private accounts a part of the fix, then they have to somehow fund the $12 Trillion shortfall IN ADDITION to whatever it costs to set up private accounts. That's a budget buster without tax increases.
What I'm TRYING to avoid is a fix that puts us deeper in red ink.
Yes, I would LOVE for them to balance the budget, but it seems they've forgotten how to do that and they resist every effort to make them do it.
"From what I can tell you have a major flaw in your numbers. 100,000,000x.20 (20%)= 20,000,000x2,000=$40,000,000 per year. "
You missed a few zeros in your calculation. 20,000,000X2000 is 40,000,000,000. 20,000,000x2=$40,000,000.
Try it on a calculator and you'll see I'm correct.
If everyone would limit themselves to contributing $2 per year to their private account, your figures would be correct.
Because the fix costs more than the problem. I'm not willing to give the government $2 so I can control $1 of the $2 I give them. That would not be a sound financial decision.
Sadly, it's you who need the education.
I will continue to try, however.
Empty piggy bank = social security.
The piggy bank had a hole in it where the government could reach in and take out the money. There is no easy fix, I doubt if there's even a fair fix, but YOU'VE GOT TO DO AWAY WITH THAT PIGGY BANK!
I think Bush may actually have about the right idea. Phase out S.S. over a long enough period of time to soften the transition to personal savings accounts.
What you don't seem to understand is that SS CAN'T be fixed.
It is a Ponzi scheme that has reached the end of its life. It must be allowed to sunset as the elderly die off. It may take 50 years, and if necessary these benefits have to be paid from the general fund. That's where the money needed to reedeem all those Treasuries will come from anyway. If it costs 12 Trillion, or 112 Trillion, it will cost what it will cost.
Neither your plan, my plan or indeed ANYONE's plan can avoid this unless we screw over my generation, retiring now and over the next ten years.
The important thing is to end the bleeding, and that can't possibly be accomplished with a "fix" as you call it.
EXCERPT: http://niemanwatchdog.org/index.cfm?fuseaction=ask_this.view&askthisid=0084
Important questions about Social Security
ASK THIS | January 24, 2005
The press needs to dig beyond the political rhetoric and make sure people understand what's motivating the push for private accounts, and what's at stake.
Redistribution of wealth
It's also the engine for a massive redistribution of wealth. By design, Social Security involves colossal subsidies not just from workers to retirees, but from single people to married couples, from two-earner couples to one-earner couples, from high-income earners to low, from men to women, from the able-bodied to the disabled, and from those who die early to those who die late.
Get a passing acquaintance with Social Security formulas and payment statistics, and you learn all sorts of things. For instance:
A retired couple receives more benefits than a retired single person, even if only one member of the couple contributed to Social Security;
Disabled workers collect benefits even if they've barely contributed at all.
Widows and other survivors of the retired and the disabled get benefits whether or not they contributed.
Low-income workers get a much higher percentage of their working incomes back after retirement than higher-income workers.
People who die early may not see any Social Security benefits at all, while people who live decades after retirement receive benefits the entire time. This is because Social Security is a lifetime guarantee that pays benefits to recipients until they draw their last breath – regardless of how much money they contributed.
Do most people realize that only two-thirds of Social Security beneficiaries are actually retired workers themselves? The rest are disabled workers, and survivors and dependents of retired and disabled workers.
See all that social engineering at work? Bush and his associates surely see it. They see the government taking away their money and using it in ways beyond individuals' control – often to help other individuals who aren't sufficiently self-reliant. They see a system in which, with some notable exceptions, what you get is what you need. Finding that vaguely socialistic, they want to replace it with a system in which what you get is what you paid.
If people don't fully understand what Social Security is, they can't understand why conservative anti-government Republicans want so much to change it. And they can't understand what effects changing it might have on society.
That's a plan for financial disaster. Once that hit, you would find NO ONE in the world will want to finance the US Government debt bohemouth, and our children and their children's children will be paying 75% or more of their pay in taxes to cover it.
Recall that the White House has said that SS taxes would have to be raised to 50% to cover just the $12 Trillion shortfall! How high would general taxes have to be raised if you suddenly stopped deducting any SS at all? Or do you propose to leave it on the federal debt forever so it can cost us compounded interest until the government collapses from the weight of it's debt?
If you have a practical suggestion to get around that problem, I'd sure like to hear it.
Your plan would REALLY be "This is the IRS - send in all your money."
What you don't seem to understand is that now we've got it, it's almost impossible to get rid of without breaking the government bank.
If you think of a new plan and can provide some figures that show otherwise, let me know because I'm certainly open to suggestions.
My only concern would be whether it would inhibit sales, and thus depress the economy. It would need a test first so we could see what would happen in a real world scenario before it went national.
Equivalency, OK. Increased purchasing, OK. If it reduces demand (most likely), then we've got a problem. It's an artificial price increase, which is consumer inhibitory. Depends on how consumers view it, and whether the additional cash in their paycheck is sufficient to encourage them to buy despite the higher prices.
Much as I would like to think that consumer mindset is logical, sometimes it just isn't.
First, borrowing money to pay these costs would be ill advised. I have never suggested such a thing.
Secondly, if the social security tax were abolished, then there is no reason why this cost could (or should not) not be funded from general revenues. The shortfall you are describing occurs over decades and would not be as burdensome as you imagine, especially since after an initial painful period, the costs would gradually decline as the number of SS recipients gradually declined. Some increase in general revenues would certainly be needed for quite a few years to replace the loss of the SS tax, so a tax increase might be needed, but this shouldn't require a larger total tax bill than before. What is needed is a growing economy, and a less "progressive" and simpler tax structure can help create that.
Thrid, this transition has already been successfully accomplished in several countries, most notably Chile, which moved rapidly from a SS like system to a 100% vested and individually controlled system very quickly, and found the process both politically and fiscally realistic.
Fourth, the entire process of streamlining, simplifying, and updating our tax and savings systems might best be done simultaneously. Doing sso would allow a rationalization of the entire structure, and might ease some of your fears.
On the other hand, such changes might just play into them.
That's Social Security for you. Well described indeed! Hats off to Franklin Roosevelt!
Your post are actually pretty persistent at pointing out the problem.
My point is that since there isn't any easy way out, unless you have a proposal to get somebody else to pay for it (the Europeans?), lets at least stop making it worse, and stop doing so NOW, not later.
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