Posted on 04/14/2015 10:23:49 AM PDT by reaganaut1
MANCHESTER, N.H. (AP) -- Framing himself as a politician who's unafraid to share "hard truths" with the American people, New Jersey Gov. Chris Christie is proposing an income cap on Social Security benefits as part of major restructuring plan announced ahead of a likely presidential bid.
The Republican is set to deliver a speech Tuesday in New Hampshire outlining his ideas on reforming Social Security, Medicare and Medicaid — so-called entitlement programs.
As part of the plan, he'll propose phasing out Social Security payments for those making more than $80,000 in other income and eliminating them for those making $200,000 or more a year.
"I'm suggesting that Americans pay into this system throughout the course of their life knowing that it will be there if they need it to support them. So that seniors will not grow old in back-breaking poverty. But if you are fortunate enough not to need it, you will have paid into a system that will continue to help Americans who need it most," he says, according to an excerpt released by his political action committee, Leadership Matters for America. "That is what we have always done for each other through private charity and good government."
Christie will also propose raising the retirement ages for Social Security and Medicare eligibility and eliminating the payroll tax for seniors who stay in the workforce past age 62.
(Excerpt) Read more at finance.yahoo.com ...
The Communist Wing of FR comes out on these sorts of posts.
A conservative KNOWS that when the government “gives” you a dollar that it has to come from somewhere.
I’d go a step further than our NJ friend.
SS should be stopped immediately - payments in, as well as payments out.
It is nothing more than an entitlement program just like welfare.
Nobody has a right to a check for life from government. Nobody.
For all of you commies who complain that it is “your” money - you are fools - but rather than benign fools, your foolishness is harmful to those Americans who may have a chance at restoring this country (since you didn’t do it) by getting rid of communist throwback programs like “Social Security”.
You f’ed up. You trusted them. That’s your own fault, and if you can’t figure it out by now that you aren’t getting paid like you thought you would, good luck with that.
I believe you are wrong. The government will make the economy divided into working folks who either cannot or can afford to invest; then there are the government workers (fed, state, local) who will get their investment shares, and of course those who own their business such as lawyers... In the end we are becoming europe for purposes of lifestyle equality and those in power will make us the surfs.
The reason Social Security is such a thorn in their sides right now isn’t that they just now became thieves. They already stole the money that was intended to gain interest to pay for upcoming generations a long, long time ago. It’s just that they can no longer pretend it’s still there.
And yet, millions of deadbeats, pillheads and illegal invaders have only to hold out their hand and they have nothing whatsoever to worry about nor do their children. Thieves? More like Devils!
The USA is becoming a caste country just like the Soviet Union where those with the mostest are now government workers with their big pensions, and a government Congressman writing the rules and supporting them because they are all in the same clique.
They get the best of pensions, best benefits, while calling themselves public servants, while most of the average American workers and once middle class are losing ground. The system is broken because neither Party does anything to benefit average working and middle class. The Dems take care of the bottom for their votes and the GOP takes care of the top echelon for their handouts.
Government retirees are smiling all the way to the bank, while others are stuck paying ever increasing local and state taxes to cover the good life for civil servants. I’m for all Americans having opportunities for a good life but I’m seeing the system rigged by political elites and others against that.
I also disagree with this plan to eliminate estate taxes. It is another case where those at the very top >$5 million estates are getting all the breaks while average citizens and beneficiaries are stuck paying the taxes on IRAs or 401Ks at earned income rates. Where is the balance?
“The reason Social Security is such a thorn in their sides right now isn’t that they just now became thieves. They already stole the money that was intended to gain interest to pay for upcoming generations a long, long time ago. It’s just that they can no longer pretend it’s still there.
And yet, millions of deadbeats, pillheads and illegal invaders have only to hold out their hand and they have nothing whatsoever to worry about nor do their children. Thieves? More like Devils!”
I was only referring to the problem people have understanding it.
Sorry, but it doesn't walk like a pension plan, and isn't a pension plan. It's a tax to fund currently retired persons. What you receive when you collect comes out of the taxes being collected then. There is no account where your individual contributions are saved and grow. What you receive is just a matter of what the government decides to pay. Just like any other entitlement program.
Finally something we agree on.
I am sorry to be the bearer of bad news, but "your" money is long gone. It was paid to your parents and grandparents, almost as soon as you made the contribution. Nearly all of the benefits you receive from Social Security will be recently collected from your children and grandchildren. If you don't have any descendants or they don't contribute enough taxes, it will be from someone else's kids.
Social Security has ALWAYS been an intergenerational transfer of income. There is no balance in your name, and there never has been. Furthermore, you don't have any contractual right to benefits, like you have with a private pension or annuity. All you have is the promise that future politicians will continue to collect higher and higher taxes from people younger than you, and give it to you.
Read that last paragraph again. Congress can change the law at any time, and the only recourse you have is to vote against them. This was affirmed by the US Supreme Court back in 1960, in US v. Nestor.
And I'm going to preempt the other usual complaint now: Social Security wasn't "stolen". If you worked during the 80's-00's, a small portion of your contributions went into the Social Security Trust Fund, because it wasn't needed to pay your parent's and grandparent's benefits. That excess was invested into the equivalent of long-term US Treasury Bonds. Starting a couple of years ago, a small percentage is being withdrawn each year, and it will continue until the Trust Fund is exhausted around 2033. Every dollar is accounted for, and is being paid back with interest.
And, there's another typical complaint: Supplemental Security Income, or SSI. The claim is that Social Security funds are being distributed to people that never contributed to Social Security. But, the Social Security Administration only ADMINISTRATES SSI. These benefits are PAID out of the general fund.
I'm trying to explain these facts to show that stamping your feet and shouting things like "It's my money!" and "They stole Social Security!" is grossly inaccurate, and doesn't help. It's this kind of reflexive reaction from our parents and grandparents that any prevented meaningful reform. We have this problem because we (collectively, especially the Baby Boomer generation) didn't have the courage to fix this problem back in the 80's, when we had the chance. So now, it's going to be painful. And every year it is put off, it's going to be more painful.
It is certainly accurate to say "It's not fair!". But, I want to explain what would actually be "fair". Remember, Social Security is an inter-generational income transfer program. The "fairest" method would be to collect taxes from your children and grandchildren, and distribute them to you. If you have more kids and grandkids, and they work at productive jobs, you'll get more Social Security benefits. If you don't have any kids, you don't get any Social Security benefits. However, please don't think I'm seriously making this proposal.
The purpose of my "thought experiment" above is solely to get you to think about how Social Security really works, and why we are in this situation. The two biggest factors causing Social Security's shortfall is the fertility rate and life expectancy. The fertility rate has dropped below 2.0 (per woman) and people are living longer in retirement, so the contributor to beneficiary ratio is getting smaller and smaller. And, it will continue to shrink. The only way to reverse it is to increase the fertility rate -- so have more kids, and tell them to have more kids.
Without more (productive) kids, the only way to maintain the current level of benefits indefinitely is to significantly increase taxes, and keep increasing them. The SSA has already evaluated that alternative:
I should note this is based on the SSA's "intermediate" economic and demographic assumptions, and they have historically been too optimistic. The increase of Social Security taxes in 1980 was supposed to "save" Social Security, and you are seeing how well it worked.
At least one poster has suggested they should just eliminate the cap on the payroll tax. This is a common proposal, and is often touted as "the solution". But, all it does it kick the can down the road a bit. One reason: if you eliminate the cap, you also increase benefits for those with wage income above the cap. This is SSA's evaluation of that proposal:
SSA has also evaluated elimination of the cap, with no increase in benefits. Again, it just kicks the can a little farther:
So, let's go back to Christie's proposal. No, it's not fair. But, it's not fair because it rewards irresponsibility. To demonstrate, here's another though experiment:
John and Steve work for the same company their entire life, and earn the same wage/salary. John contributes the maximum to his 401(k), drives a used car, and bought a small house. Steve leases a new car every few years, rents a big house, has a boat in the driveway, and takes an expensive vacation every year. John retires with a huge nest egg. Steve retires with a few thousand dollars in his checking account. John withdraws from his 401(k) every month, generating taxable income. Steve only has Social Security.
By means-testing Social Security benefits, John's Social Security benefits are reduced, and he is penalized for a lifetime of responsible behavior. Steve is rewarded (or at least not penalized) for a lifetime of profligate spending.
This is how Christie's proposal should be countered.
I'll also point out that Social Security is already means-tested. If you examine how benefits are calculated, you will understand how:
http://www.ssa.gov/pubs/EN-05-10070.pdf
You don't have to wade through all of this... just look at step 5. Once your average indexed monthly wage is calculated, that formula is applied. Note that it starts with 90%, then drops to 32%, then finally to 15%. That means that even though you paid a flat tax rate, once your average monthly wage is higher than $5000, you only get another 15 cents added to your monthly benefit for every extra $1.00 in your average monthly wage.
So, further means testing that eliminates benefits on the basis of OTHER income makes the situation even worse, and effectively creates a negative rate of return on investment. I'm sure that someone will do a more detailed analysis if this proposal gets any traction.
Before you start shouting back at me, let me explain my situation: I'm currently making plans for retirement. One of the factors in determining how much we have to spend in retirement is our Social Security benefits. I'm more like John, and we have quite a bit of retirement income and assets. But, I expect Social Security to be significant part of it, once I turn 70. I don't know if I am close enough to retirement to be excluded from this means testing, but I wouldn't be surprised if I am not.
[An aside: I strongly recommend that you ask a financial advisor about when to start Social Security. Depending on your life expectancy and your income from other sources, you may be giving up a large amount of lifetime income if you start at age 62. Drop me a line via FRmail, and I will point you to a website that will show you exactly how much, but there's a small fee.]
If I had the opportunity to invest Social Security contributions on my behalf into a long-term US Treasury Bond each year, I'd have about $1,000,000 right now. And, it would be close to $2,000,000 by the time I turn 70. This is not an off-the-cuff estimate: I've actually calculated it, using the average long-term bond yield each year, and reinvesting dividends. I'd still be holding a number of bonds from the late 80's that paid decent dividends.
If I were to actually receive the benefits currently promised, I'd have to live until about age 102 to collect enough to match the current value of my contributions (at a 4% discount rate). That might happen, but I don't consider it likely. I also don't consider it likely that I'll collect all those benefits, either -- since BY LAW, once the Social Security Trust Fund is exhausted (around 2033), benefits must be reduced to a level that can be sustained by the incoming contributions. Currently, that is forecasted to be a 23% reduction.
I'm planning for that 23% reduction, because the alternative is to raise the taxes on my children and grandchildren even higher than now. I'm even willing to take a further reduction, if Social Security is truly reformed into a private contribution account (like Chile, Australia, and Singapore). But, it's going to take a sacrifice on the part of both the contributors and the beneficiaries to make that work.
However, I'm not willing to take a benefit cut so that "irresponsible Steve" can continue to get his full benefit. But, I have to find a way to boil it down into a "sound bite".
Bullsh-t. I NEVER trusted them.
Maybe you can come down off you sanctimonious horse long enough to explain how I'm supposed to stop the federal government from taking my money? And it IS my money - at least the amount stolen from pay checks is.
This will never fly because it will be seen as discriminatory against faggot and clamlicker couples that have no natural ability to conceive a child, where the child is being defined as a REVENUE SOURCE for THE STATE.
So if I'm responsible enough to plan for my own retirement, have a 401K, Roth IRA, etc.. then Christie is going to means test me OUT of Social Security, a confiscatory plan I'll have paid more than 40 years into, because in his determination "I don't need it."
Some Christie supporter needs to explain it to me exactly how Christie's proposing something different than Obama's wealth redistributionist policies.
I paid into it UNDER FORCE OF GOVERNMENT and it's MY MONEY. I don't CARE what some fat windbag like Christie thinks, I want MY MONEY BACK. Period.
Oh, and Chris Christie? F*** YOU A$$HOLE, you aren't getting my vote.
Social Security works as an insurance policy, not an investment. It would work better if we had honest competent government that didn’t sell out other Americans.
When we can’t trust our government to keep a promise because they are corrupt and incompetent who do we blame? As my profile has stated from my first post I don’t trust either Party. They serve their elite masters and not we the people nor do they represent average working Americans.
What about the 60 year old illegals or invitees from Yemen that came here a year or 10 years ago ago at the invitation of Obama and Bush and the US Chamber of Commerce and the DNC and RNC for cheap labor and votes that will soon be sucking on our Social Security trust? What about the SS trust money that was used from everything from war in Africa to tax cuts to food stamps, but not to defend our borders?
If it was a perfect world we’d be taking care of ourselves and our own families instead of waiting for politicians. Since it isn’t a perfect world, we’ll still be taking care of others that were irresponsible. It is why we need a system that gives a baseline support to those who funded much of it aside from welfare. But we shouldn’t be giving the funding away to run an incompetent government and fighting wars.
Well, we did take care of ourselves at one time.
Then the “Greatest Generation” voted for this @$$#0|& named Roosevelt.
“I am sorry to be the bearer of bad news, but “your” money is long gone. It was paid to your parents and grandparents, almost as soon as you made the contribution.”
I got two sentences into your post and I already think that there’s more than just me that figured this out. I still HATE Christie...but regardless, I’ll read on.
“Maybe you can come down off you sanctimonious horse long enough to explain how I’m supposed to stop the federal government from taking my money? “
Your quandary is that your righteous indignation fails the reasonableness test. “your” money is long gone - spent, squandered, lost. So now you want to steal someone elses money, because, you know, “It’s yours”.
You are a hypocrite and a commie thief if you think someone else should pay you because you were too timid to protest the theft as it occurred.
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