Re: How to Fix Social Security
 

[QUOTE=saden1;434712]Blessed are those who happily count their peanuts. How do you propose we tackle [URL="http://www.brillig.com/debt_clock/"]this monstrosity[/URL] on top of tax cuts? It's easy to say cut spending but from where?[/QUOTE]

I'd like to see our post-Iraq defense budget slashed by hundreds of billions, which would preclude us from going into places like Iraq and Bosnia. That alone would save us trillions within a decade.

Re: How to Fix Social Security
 

I think I agree with partial privatization. My concern is with privatizing the entire thing, and then expecting people who have never taken any interest in planning for retirement to invest wisely. Partial privatization gives at least a small fallback cushion.

Re: How to Fix Social Security
 

[quote=saden1;434709]OK, so what's the real difference between leaving your money to a total stranger vs leaving it for your children? Suppose I leave the money to someone that isn't my child? Should it be taxed? Should preferential tax treatment be given to your own kids?

I'm sorry but passing down wealth without taxing it is akin to a pyramid scheme. People at the top of the scheme will perpetually be at the top and the income gap in this county will grow exponentially. Not only that but a larger burden of the tax bill will be shouldered by the middle class.

Finally, I assure you you would do well to be my kid. Having a wealthy dad is awesome I tell you :) My kids will be well taken care of. When they are ready to go to college or buy their first car/home I will be there for them. I will prepare them to succeed in this world, I just won't hand them my estate upon my death. The estate is already earmarked for charity.[/quote]


So you agree with the death tax and want to raise it? You say that you are going to buy your kids a car and pay for college. Well say you have that money set aside for them, and you die. That 100k for school you set aside will be reduced to 50k, that 25k you set aside for the jetta is now 12.5k. Where is the logic in that?

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434703]I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. Death isn't exactly an unforeseeable event. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy life insurance naming the successors and/or the business itself as beneficiaries. Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.[/quote]
Your right and when they realise that their is an issues and now are much older and now need a large life policy the premimums can be THOUSANDS PER MONTH and allot of times it is not affordable. You also think that its ok for the goverment to put such a burden on small family busnesses? Remember the tax is based on the value of the business and not the income that the family makes off the business. So if your a small business makeing X and you have a plant with 20 workers that the goverment says is worth 5,000,000 then thats what your taxed on even though you may only make $120,000 per year.

Re: How to Fix Social Security
 

Check "Revelations". You won't be needing it

Re: How to Fix Social Security
 

[quote=SmootSmack;434742]Well I'm certainly learning a lot, and I hope others are too. I tend to lean toward the "allow people to take a portion of the tax and invest it into a private account" school of thought.[/quote]

The free market is ALWAYS the best option for the whole economy and for the individuals.

The absolute WORST way, LEAST efficient and most likely to FAIL way to spend a dollar is to hand it over to the bureaucratic mess of the Government. They have no discretion when spending billions of dollars they have not earned, but you and I will be careful with every dollar we've worked for and will make a more responsible choice with it.

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434748]I'd like to see our post-Iraq defense budget slashed by hundreds of billions, which would preclude us from going into places like Iraq and Bosnia. That alone would save us trillions within a decade.[/quote]

The current military budget is insanely enormous and the fundamental question is does it need to be as big as it is? A 480 billion [URL="http://www.defenselink.mil/comptroller/defbudget/fy2008/fy2008_greenbook.pdf"]dollar budget[/URL] (pay attention to the expenditure break down on page 15)? One often hears the defence budget relative to the GDP, but what you really should be hearing about is the budget relative to federal revenue.

I don't think it's wise to lump Iraq and Bosina as they are fundamentally different in principle (war vs peach keeping) and budgetary requirement. I would even go further and say that we alone should not be shouldering the burden when it comes to peace keeping missions. The fact that we have such a huge budget gives other nations a free pass to [URL="https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html"]delegate their responsibility to us[/URL]. Perhaps Europe is too smart or poor?

Finally i want to make it clear that the defence budget should be dynamic. There should be a base budget and money should be allocated based on need. Currently, the default budget even when we are not in a time of war is enormous for reasons not apparent to me.

Re: How to Fix Social Security
 

[quote=Hog1;434757]Check "Revelations". You won't be needing it[/quote]

Great answer! :D


But, He'll be coming like a thief in the night, when we are not expecting.

Much like the Government. :D

Re: How to Fix Social Security
 

[quote=saden1;434760]The current military budget is insanely enormous and the fundamental question is does it need to be as big as it is? A 480 billion [URL="http://www.defenselink.mil/comptroller/defbudget/fy2008/fy2008_greenbook.pdf"]dollar budget[/URL] (pay attention to the expenditure break down on page 15)? One often hears the defence budget relative to the GDP, but what you really should be hearing about is the budget relative to federal revenue.

I don't think it's wise to lump Iraq and Bosina as they are fundamentally different in principle (war vs peach keeping) and budgetary requirement. I would even go further and say that we alone should not be shouldering the burden when it comes to peace keeping mission. The fact that we have such a huge budget gives other nations a free pass to [URL="https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html"]delegate their responsibility to us[/URL]. Perhaps Europe is too smart or poor?

Finally i want to make it clear that the defence budget should be dynamic. There should be a base budget and money should be allocated based on need. Currently, the default budget even when we are not in time of war is enormous for reasons not apparent to me.[/quote]

It's huge now because it was starved to death in the previous Administration and needed to be rebuilt.

Re: How to Fix Social Security
 

[quote=Stacks42;434753]So you agree with the death tax and want to raise it? You say that you are going to buy your kids a car and pay for college. Well say you have that money set aside for them, and you die. That 100k for school you set aside will be reduced to 50k, that 25k you set aside for the jetta is now 12.5k. Where is the logic in that?[/quote]

You assume incorrectly. If I happen to die prematurely I have a financial plan that insures their basic needs are taken care of foremost.

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434703]I have mixed feelings about the estate tax and this is going to sound cold, but those business owners should have better business sense. [B]Death isn't exactly an unforeseeable event[/B]. Someone who owns a closely-held/family-owned business and who wants his or her family to continue the business should buy [B]life insurance naming the successors and/or the business itself as beneficiaries.[/B] Life insurance isn't cheap, but it shouldn't force well-run businesses to go under.[/quote]

Couldn't agree more.

Re: How to Fix Social Security
 

[quote=onlydarksets;434750]I think I agree with partial privatization. My concern is with privatizing the entire thing, and then expecting people who have never taken any interest in planning for retirement to invest wisely. Partial privatization gives at least a small fallback cushion.[/quote]
Well if the goverment does privatize SS it would have to be manditory that each person invest a % of their payroll each month. I would also not have a problem if the Goverment restricted how the money was invested to some point. Another words I could not take all the money and invest it into risky stocks I would have to be deversified in my portfolio.

Re: How to Fix Social Security
 

[quote=Buster;434763]It's huge now because it was starved to death in the previous Administration and needed to be rebuilt.[/quote]

It's huge and it needs to be because under the previous administration it wasn't? I'm I understanding you correctly?

Re: How to Fix Social Security
 

[quote=saden1;434775]It's huge and it needs to be because under the previous administration it wasn't? I'm I understanding you correctly?[/quote]
I think what he ment was that allot of our millitary was starved for money back in the Clinton years and we have to spend more now on things that needed fixing durn the Clinton years. That argument holds some truth but with the price of the war it does not hold a bunch weight as why the budget has grown so much.

Re: How to Fix Social Security
 

[quote=firstdown;434774]Well if the goverment does privatize SS it would have to be manditory that each person invest a % of their payroll each month. I would also not have a problem if the Goverment restricted how the money was invested to some point. Another words I could not take all the money and invest it into risky stocks I would have to be deversified in my portfolio.[/quote]

I agree - that would help address the concern. However, I think several people on this board would take issue with this approach, because it limits the market. However, a truly free market means we abandon people who don't come out ahead in their SS investments. Economic theory may dictate that is the most efficient outcome, but it's just not very practicable.

[quote=firstdown;434796]I think what he ment was that allot of our millitary was starved for money back in the Clinton years and we have to spend more now on things that needed fixing durn the Clinton years. That argument holds some truth but with the price of the war it does not hold a bunch weight as why the budget has grown so much.[/quote]
Good post.

Re: How to Fix Social Security
 

[quote=firstdown;434796]I think what he ment was that allot of our millitary was starved for money back in the Clinton years and we have to spend more now on things that needed fixing durn the Clinton years. That argument holds some truth but with the price of the war it does not hold a bunch weight as why the budget has grown so much.[/quote]

A lot of why the defense budget has grown (aside from rebuilding) is simply because they are being utilized and needed to a greater extent. Also a lot of technology is being developed and successfully deployed in combat. It has saved lives and made our military even more efficient.

Nearly as much has been spent on research and development as has been spent on weapons procurement (production). More efficient, safer vehicles have been made, drones to use in place of live planes to spy or hit a target and also robotics to diffuse roadside bombs to save troop lives have all been used in this mission. We've lost troops, of course, but the casualty levels of the current military are FAR FAR less than in previous conflicts.

Re: How to Fix Social Security
 

[quote=onlydarksets;434798]I agree - that would help address the concern. However, I think several people on this board would take issue with this approach, because it limits the market. However, a truly free market means we abandon people who don't come out ahead in their SS investments. Economic theory may dictate that is the most efficient outcome, but it's just not very practicable.


Good post.[/quote]

Well anyone can go out and get a fixed investment that carrys no to little risk so if there was some sort of limit to where the money was invested it would out perform SS everytime. There is a city in Texas that opted out of SS before they passed a law making it manditory. The city collects the money and invest it for the people (something like that) and they are retiring younger and with a larger retirment than the average American.

Re: How to Fix Social Security
 

[url=http://www.mackinac.org/article.aspx?ID=1487]Opting Out in Texas: Three Counties Leave the... [Mackinac Center for Public Policy][/url]

I have no problem with that, because it guarantees the return. However, that's not free market - it's just better management of funds (presumably there is some level of oversight, whereas now there is virtually none). Individual investors still cannot choose a riskier or safer retirement strategy.

I'd be interested to hear the Schneed/Buster take on this.

Re: How to Fix Social Security
 

[QUOTE=saden1;434760]I don't think it's wise to lump Iraq and Bosina as they are fundamentally different in principle (war vs peach keeping) and budgetary requirement. I would even go further and say that we alone should not be shouldering the burden when it comes to peace keeping missions. The fact that we have such a huge budget gives other nations a free pass to [URL="https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html"]delegate their responsibility to us[/URL]. Perhaps Europe is too smart or poor?[/QUOTE]

[U]As a general matter[/U], I don't think we should be the "world's policeman." For the righties, that means we should not intervene in conflicts (or start them) willy-nilly due to national security concerns. For the lefties, that means we should not engage in peacekeeping. I don't think it's fair to say, "We shouldn't be the world's cop" and then say we should intervene in X conflict because of national security OR humanitarian concerns. Regardless of whatever motives are behind our military interventions, they usually end up costing us money and blood and do little long-term good.

Re: How to Fix Social Security
 

[QUOTE=firstdown;434755]Your right and when they realise that their is an issues and now are much older and now need a large life policy the premimums can be THOUSANDS PER MONTH and allot of times it is not affordable. You also think that its ok for the goverment to put such a burden on small family busnesses? Remember the tax is based on the value of the business and not the income that the family makes off the business. So if your a small business makeing X and you have a plant with 20 workers that the goverment says is worth 5,000,000 then thats what your taxed on even though you may only make $120,000 per year.[/QUOTE]

If the business purchases life/key-man insurance on the CEO/President/Founder, it's deductible. A few thousand dollars a year is not going to tank a business worth millions. Also, the estate tax only affects individuals worth $2M (including his/her interest in any business he/she owns in part or whole). So, it's not as though the guy who runs the candy shop or down the street or his family is typically unaffected by the estate tax.

Re: How to Fix Social Security
 

[quote=Sheriff Gonna Getcha;434830]If the business purchases life/key-man insurance on the CEO/President/Founder, it's deductible. A few thousand dollars a year is not going to tank a business worth millions. Also, the estate tax only affects individuals worth $2M (including his/her interest in any business he/she owns in part or whole). So, it's not as though the guy who runs the candy shop or down the street or his family is typically unaffected by the estate tax.[/quote]
Well the reason that smaller businesses do not have this problem is because Bush (I think Bush) raised the value of an estate before it is subject to these taxes. I'm not sure if or what a business can write off because this is a tax on ones entire estate and not just for the business. So if a person has a personal worth of 1.2 mil and owns a business which is valued at 3.2 mil then his death tax is on 4.4 mil.. Also this problem usuall arises later in someones life and these policies can be very expensive not just the few thousand that you mentioned. I sell life Ins. (I do not do estate planning that whay I'm not sure of the write off) and was contacted by a customer who's Atty. did an estate planning and he determind that he needed 2 mil in life ins..This man made a good living but was not rich and provided around 20 jobs. He was older and had a few health issues and for him to purchase 2 mil in coverage was very very expensive and would only get more expensive as he got older. He did not purchase the policy (which he could not afford) and latter passed away. His family lost the business due to taxes and the city lost a tax paying buisness and 20 people lost their jobs. This was all because of the federal goverments death tax. Yes, maybe he waited too long but he never realized he was worth that much because he only made a small fraction of that. This happens everyday in the US.

Re: How to Fix Social Security
 

get rid of it. teach people about investing, employer matching, and roth IRAs.

I don't want to pay social security because I can get a far better return then some crap annuity by myself and I could really use that money for better things.

annuities just aren't a good deal, and that's how most pension plans are run... investment accounts (401k's/IRA's/Roth IRA's, etc) give a much better return, and more control (though safe(r) funds exist for those not knowledgeable in investing but interested in getting more than the .07% a bank gives or the 5-6% on a bank's CD).

Re: How to Fix Social Security
 

[quote=That Guy;435004]get rid of it. teach people about investing, employer matching, and roth IRAs.

I don't want to pay social security because I can get a far better return then some crap annuity by myself and I could really use that money for better things.[/quote]


BINGO!

Now if only Congress could understand such a SIMPLE truth, we'd be far better off.

Re: How to Fix Social Security
 

That's beyond privatization. What do you do about the strains on the welfare system for those who don't invest anything?

Re: How to Fix Social Security
 

[quote=onlydarksets;435091]That's beyond privatization. What do you do about the strains on the welfare system for those who don't invest anything?[/quote]

If they're not working and paying FICA tax now, they wouldn't be losing out on anything.

Are taxes deducted from welfare checks?

Re: How to Fix Social Security
 

[quote=Hog1;434757]Check "Revelations". You won't be needing it[/quote]

It's "Revelation", not "Revelations". Sorry, but this is one of my pet peeves.

Re: How to Fix Social Security
 

[quote=Buster;435096]If they're not working and paying FICA tax now, they wouldn't be losing out on anything.

Are taxes deducted from welfare checks?[/quote]

I'm talking about the people who [U]are[/U] working now and contributing to SS. What do you do when they decide not to contribute because they have bills to pay [U]now[/U], but then end up penniless and unable to work at 70?

Again, like my question above, I'm not opposing your suggestion - just asking for the full picture.

Re: How to Fix Social Security
 

[quote=onlydarksets;435126]I'm talking about the people who [U]are[/U] working now and contributing to SS. What do you do when they decide not to contribute because they have bills to pay [U]now[/U], but then end up penniless and unable to work at 70?

Again, like my question above, I'm not opposing your suggestion - just asking for the full picture.[/quote]

[URL="http://en.wikipedia.org/wiki/Suicide_booth"]Possible solution[/URL]?

Re: How to Fix Social Security
 

[QUOTE=Buster;435090]BINGO!

Now if only Congress could understand such a SIMPLE truth, we'd be far better off.[/QUOTE]

People can't have it both ways. Congress is assuming we are too stupid to figure this out on our own...but why would they think otherwise when we have SOOOO many programs to help aid the ignorant, or lazy?

Re: How to Fix Social Security
 

[quote=onlydarksets;435126]I'm talking about the people who [U]are[/U] working now and contributing to SS. What do you do when they decide not to contribute because they have bills to pay [U]now[/U], but then end up penniless and unable to work at 70?

Again, like my question above, I'm not opposing your suggestion - just asking for the full picture.[/quote]

It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.

Re: How to Fix Social Security
 

[quote=Buster;435312]It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.[/quote]
I know what privatization is. What That Guy suggested [U]was not privatization[/U] - it was abolishing Social Security entirely and letting people do what they want with their money. You said "BINGO", and I wanted to get your thoughts on how to handle the fallout.

Re: How to Fix Social Security
 

[quote=Buster;435312]It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.[/quote]
It would also give you ownership of the money you invested so that your spouse and children can enjoy your hard work if you pass away unlike SS. For example. If me and my wife divorce and my children are grown and I pass away the money I have put in SS is gone. It goes back into the system for someone else to collect. Now can anyone explain how that is fair?

Re: How to Fix Social Security
 

The whole concept of "let me give my money to the government so they can manage it for the next 30-40 years at which point they'll give it back to me a little bit a time" just never sat well with me.

I don't even factor SS into my retirement planning - as far as I'm concerned the entire thing is a farce. Preparing for retirement is the individual's responsibility, not the governments.

Re: How to Fix Social Security
 

Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.

Re: How to Fix Social Security
 

[quote=Schneed10;435396]Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.[/quote]
You really think they are earning 3-5% on money that they have allready spent? Can I get in on that programe! If finacial institutions did with their customers money what the goverment has done with the tax payers they would all be in jail.

Re: How to Fix Social Security
 

[QUOTE=mheisig;435381]The whole concept of "let me give my money to the government so they can manage it for the next 30-40 years at which point they'll give it back to me a little bit a time" just never sat well with me.

I don't even factor SS into my retirement planning - as far as I'm concerned the entire thing is a farce. Preparing for retirement is the individual's responsibility, not the governments.[/QUOTE]

I think you're about the same age as me (I'm 25). I am doing the same thing. I pretty much think of my SS contributions as money I'll never see again.

There has to be a more efficient and fair way to do this, but I don't know what it is. I share That Guy's line of thinking at this point.

Re: How to Fix Social Security
 

[quote=firstdown;435399]You really think they are earning 3-5% on money that they have allready spent? Can I get in on that programe! If finacial institutions did with their customers money what the goverment has done with the tax payers they would all be in jail.[/quote]

Money they've already spent? Whatchu talkin bout, Willis?

Re: How to Fix Social Security
 

schneeds answer is spot on. the only problem is that the govt feels the need to dip into this program whenever they run into funding problems. lets go to the Gore lock-box( im sure this will get some response:))

Re: How to Fix Social Security
 

[QUOTE=Schneed10;435396]Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.[/QUOTE]

So it's the government's job to make sure irresponsible people don't experience the consequences of their irresponsible actions? More precisely, it's MY money that has to ensure that these people never face the consequences of their irresponsible actions.

Re: How to Fix Social Security
 

[quote=mheisig;435410]So it's the government's job to make sure irresponsible people don't experience the consequences of their irresponsible actions? More precisely, it's MY money that has to ensure that these people never face the consequences of their irresponsible actions.[/quote]

Correction, it's your money that's serving as an INVESTMENT in your own, and the country's, future to ensure that your grandchildren have the same decent shot at a decent paying job just as you do now. Because if you don't make that investment, your grandkids will find it very hard to find work.

Such is the way economics works. Sometimes making investments isn't about gaining a return on investment, sometimes it's about avoiding losses.