How to Fix Social Security

[saden1]

Originally Posted by Sheriff Gonna Getcha

Which "Bush tax cuts" would you repeal? I personally like the reduced capital gains tax and think there is plenty of evidence suggesting they can help stimulate the economy. The reduced capital gains tax pumped billions into the economy. Moreover, the Bush tax cuts arguably did more to help the poor than the rich.

Our budgetary and economic woes have very little to do with the tax cuts, they have much more to do with excessive spending. While the Iraq War is undoubtedly draining our coffers, government mismanagement (e.g., pork-barrel spending and earmarks) are doing their damage as well. It's not a GOP-DNC issue either; the Republicans generally support the costly war effort and the Dems largely killed legislation targeting earmarks.

I personally would like to see less money go to the feds and force them to spend less. I guess that's evidence of my quasi-libertarian leanings.

As for my liberal side, I'd like to see people earning over X amount cut from the Social Security rolls. IMO, a guy with a net worth in the millions doesn't need a few hundred extra bucks a month, notwithstanding the fact that he pumped hundreds of thousands into the Social Security system.

Finally, to appease my conservative side, I'd like to at least experiment with some privitization. I find it somewhat revolting that I don't get to decide what to do with MY money. Frankly, it pisses me off that I give the government so much money and get such a crappy return. Don't I get SOME say and some choices in the matter?

End of rant filled with twists, turns, and tangents.

Blessed are those who happily count their peanuts. How do you propose we tackle this monstrosity on top of tax cuts? It's easy to say cut spending but from where?

[FRPLG]

Originally Posted by saden1

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.

IT ALREADY IS TAXED. ANd I would say my personal opinion is that if you can't see the difference between leaving family money to your kids rather than a starnger then there is no way we will ever agree on this.

[onlydarksets]

Originally Posted by GTripp0012

Is there any particular example where this statement has actually held water?

I don't know one way or another, but it just sounds incorrect.

Outside of privatization, sure - it happens everyday. People act irrationally or as short-term discounters, and it costs them more in the long run. Haven't you ever acted out of spite? If you were acting as economic theory would predict, you would not have acted that way in most cases.

In this case, it would depend on the implementation of privatization. If it's partial, it might work. If it's full privatization, I believe it assumes too much about the average population in America. Many people (especially in past generations, but also in this generation) simply do not take ownership of their retirement - that's completely irrational and short discounting. We can place the onus on them by fully privatizing, and then for those that fail say "well, we gave them the tools, even though we knew many would do nothing with them" or we can institute social policy to protect against it.

I'm not saying it won't work - I'm just saying economic theory makes assumptions. You can assume away friction in physics, but it doesn't mean it isn't there.

[Schneed10]

Well just because it's privatized doesn't mean you can't set a minimum mandatory contribution as part of the program.

Privatization refers mainly to private investment firms offering the investment options, not simply that everyone is responsible for their own retirement account.

[onlydarksets]

I know. I was talking about ownership in the sense of investing, not contributing.

[Monkeydad]

Privatize.

I wrote a 16-page paper on Privatizing SS in college. It was a good idea THEN and still is.

Congress (specifically the one party that created it) was incredibly selfish for shooting this down when President Bush proposed it. They don't want their program to look like a failure, even though it clearly is. So, instead of being responsible, they decided to block any change to their failed program for political reasons, in the process forfeiting any chance for a retirement for the current generation of workers and also our children.

I received my SS statement in the mail last week, the one they mail you annually to show you what your benefit will be upon retirement. I noticed that it stated that if I work until 67, I can receive full benefits. That used to say age 65. I expect the retirement age to keep going up and should be around 72-75 by the time I retire, not that any benefits will be there for be.

Anyone with common sense can see that SS in its current state CAN not work. With the retirements of the Baby Boomer generation, there will be more people withdrawing funds than working to provide them. The ratio used to be 15:1 (workers:retirees). Now the ratio is estimated to be about 2:1 and still falling.

There never was a Social Security Trust Fund as claimed. The money has always been tapped into and shifted to the general fund for spending on random bills.

The ability for people to save for their own retirements is the only workable solution for future generations. Being able to have the option to take the insane SS tax amount and investing as we wish is just smart. You don't need to have any knowledge in the stock market, because even playing it safely has ALWAYS yielded a 10% return historically.

Those who choose to gamble with the SS will just have to take what (if anything) they are able to get. There will need to be a transition period so that workers now nearing retirement can still get the SS funds they were stupidly promised by an irresponsible government, but afterwards, everyone should be required to invest for their own retirements.

The country of Chile has the best plan and example of how successful a full privatization can be.
EMPOWERING WORKERS: THE PRIVATIZATION OF SOCIAL SECURITY IN CHILE

[Monkeydad]

Originally Posted by Schneed10

Well just because it's privatized doesn't mean you can't set a minimum mandatory contribution as part of the program.

Privatization refers mainly to private investment firms offering the investment options, not simply that everyone is responsible for their own retirement account.

It should simply be the current FICA tax %, at least to start.

We wouldn't be missing any money since it was being stolen anyways and it's probably a decent % to ensure a good retirement.

If anyone wants to contribute extra, that is their choice.

[Monkeydad]

Originally Posted by dmek25

i say leave it alone. the money that is earmarked for social security benefits is used for strictly that. the main issue, in my opinion, is that every time the gov't gets into a bind for one of their programs, they dip into the S.S. fund

You've actually bought into that lie, huh?

Wait, then you contradicted yourself with a true statement.

[saden1]

Originally Posted by FRPLG

IT ALREADY IS TAXED. ANd I would say my personal opinion is that if you can't see the difference between leaving family money to your kids rather than a starnger then there is no way we will ever agree on this.

We'll just have agree to disagree because the way I see it, the father has been tax and the kids receives a tax free pay check. Also, from the state's perspective I don't think there should be an ounce of a difference between giving your money to your kids or to strangers.

[SmootSmack]

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.

[Sheriff Gonna Getcha]

Originally Posted by saden1

Blessed are those who happily count their peanuts. How do you propose we tackle this monstrosity on top of tax cuts? It's easy to say cut spending but from where?

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.

[onlydarksets]

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.

[Stacks42]

Originally Posted by saden1

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.

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?

[firstdown]

Originally Posted by Sheriff Gonna Getcha

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.

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.

[Hog1]

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