"In 1934 President Franklin Roosevelt created a Committee on Economic Security to draft a program of guaranteed social support for all U.S. citizens who were economically vulnerable during the Great Depression of the 1930s. In part, Roosevelt was responding to several radical proposals designed to stimulate the economy." (http:encarta.msn.com/encyclopedia_761561113/Social_Security.html#s12)

In 2006, Americans round that 60 year old curve and are looking at retirement and social security as something they have earned and are entitled to.

Proposals designed to pull this country out of the severest economic loss in the nations history have in modern times become parasites on the national economy. The multiple amendments, additions, substractions, moves from committee to committee have assured Social Security's existence.

But how necessary is Social Security's existence today?

Should a democratic nation be financially supporting most of their citizens over the age of 62?

And including those programs that sprang from the Social Security Act, should Social Security be phased out putting the burden of self sufficiency back on the individual? What possible impact would this make on the economy, immigration and employment?

But how necessary is Social Security's existence today?
Social Security is not necessary. The senior citizens in America are financially better off than the senior citizens around during the Great Depression.

Should a democratic nation be financially supporting most of their citizens over the age of 62?
The answer is no. In America, middle class Americans have the opportunity to save money for their own retirements by managing their own finances carefully. If an individual does not manage his/her own finances carefully, then that individual should be expected to work after 62. Retirement should be considered an earned priviledge, not a right automatically granted to everyone over 62.

And including those programs that sprang from the Social Security Act, should Social Security be phased out putting the burden of self sufficiency back on the individual? What possible impact would this make on the economy, immigration and employment?
Yes. For the economy, this would encourage people to save money as opposed to relying on Government programs or questionable investment schemes. On immigration, this would send the message that no immigrant will get free lunch. For employment, this would encourage people to invest money and create jobs in the process.

skeeterses- my libertarian friend, your response is very nice, and a great example of libertarain thinking, but occasionally impractical IMHO- as much as I would personally like what you say to be true!

But how necessary is Social Security's existence today?

Extremely- not at the level we have it today- but for what it was originally created and insurance policy on the national level- it is the "mission creep" that made social security so untenable- not the original concept.

The reason it was instituted was for the great depression and the threat to national security that it implied. And we still need it for that reason- national security. You simply can not have millions of starving seniors in some major economic catastrophe and have a nation survive it- that is how socialism as an idea was seized on by opportunistic dictator wanna-bes in the first place. Starving masses make easy pickin's for demogogues!

Should a democratic nation be financially supporting most of their citizens over the age of 62?

Supporting them in a middle class lifestyle? No, resounding NO- but keeping them (barely) from starving to death? Yes- just enough to keep them out of the alpo section of the grocery store. It should be means used only, and have some stigmata behind it of "you wasted your life, now you are on the social security INSURANCE". Poeple should want to have something better than social security to live on basically.


And including those programs that sprang from the Social Security Act, should Social Security be phased out putting the burden of self sufficiency back on the individual? What possible impact would this make on the economy, immigration and employment?

"mend it, don't end it" would be my call- cut back all the extranous programs added to it today, take away disability and such, and make it streamlined back to retirement insurance again. Revisit those other benefits on another program, under it's own debate and scrutiny, and leave Soc Sec as a bare bones insurance program.

Skeeters,

The hole I see in this argument is the assumption that everyone who wants to work can get a job. This simply is not so. It has never been so. Unemployment is a big problem and shoots the argument down in flames.

No matter how frugally a person lives, periods of unemployment can, and do regularly, wipe out savings and build debt. In our system, nobody has the right to a job, ergo, being jobless is a real probability somewhere along the line.

So, in order for this argument to work, then everyone must be guaranteed employment for the duration of life. I don't think that's going to happen. A related problem is health care. Illness can wipe out savings just like that.

I'm afraid the solution begs for others.

I was in a bit of a hurry when I posted my original response to the question. There are senior citizens who are truly poor and do need government assistance to feed themselves and pay for rent. I personally hate seeing senior citizens having to live on the street or in a homeless shelter.

The problem with Social Security today is that Americans see it as an entitlement and not a program to help the truly needy. One result is that Social Security checks are getting sent to Seniors who had the fortune of working at a Fortune 500 company or having a comfortable Government job. AM and CR, you guys are definately right that there should be a national insurance policy against extreme poverty. And I say that anybody wanting to cash in on that National Insurance better be prepared to let the IRS audit them and make sure that they do indeed need the assistance.

But how necessary is Social Security's existence today?

Social Security is a very important insurance program that people who have been working since 1935 have paid into with a very regressive tax system, one in which most Americans pay more in payroll taxes than they do in income taxes. I know in my household this is quite true. I would reform the system and roll it inti the general income tax system. We have long ago thrown the money into the general fund.

Speaking of this, the present attack on social security is coming (understandably so) because it is time to pay the piper. Our government has been shamelessly spending the Social Security surpluses of the past thirty years and we have not been adequately preparing for the baby boomers and gen xers who will face retirement and a financial crisis in the system they have paid into for all of their working lives.

Social Security is an entitlement for those who have been preparing for their retirement in a significant part by paying into the system.

Additionally, the way in which Americans prepare for the future is (careful, Nanny State comments coming) very poor. In our culture saving for a rainy day has long gone by the wayside. We have one of the highest incomes in the world and our savings rate is pathetically low. Furthermore, I fear that if Americans dramatically altered our spending habits, the effects on the American economy of dramatically lowered consumption would be extremely negative, maybe almost 1929 kind of negative.

The way our government and the educated people that run it has spent through the Social Security surplus is evidence of this trend to not adequately prepare for the needs at the end of our lives.

When Social Security goes away, so will the typical independent senior lifestyle. And the burden will again fall on children (who will be facing things like rising health costs and college costs for their children as they struggle with saving) who will be taking in their parents as their children leave the house, dramatically reducing the ability to properly save for retirement.

Should a democratic nation be financially supporting most of their citizens over the age of 62?

No. It should not. But if it is going to use a regressive tax structure to force Americans to save it better pay up. Americans are not going to be able to retire as early as the first wave of the baby boomers has been able to do. The present middle class is really going to struggle with their retirement.

And including those programs that sprang from the Social Security Act, should Social Security be phased out putting the burden of self sufficiency back on the individual? What possible impact would this make on the economy, immigration and employment?

I don't think that Social Security, Medicare and Medicaid should be phased out. Benefits may have to be reduced and Americans will need to get better overall health insurance that will reach to the end of their lives and include things like insurance for long term care when we are older. We live much longer today. We need some type of effective insurance for reaching our final years with dignity if wee happen to be among the group the lives to 80 or older.


The impact of keeping more people in the workplace as they are older is the need for continued job growth in the economy. Should we face an economic downturn we will be looking once again at how to remove the elderly from the workplace to provide opportunities for young people entering the job market. This was the idea behind the 1930s Townsend Plan that probably influenced FDR as much as anything else to push for the Social Security Act in 1935.

Any person who is fortunate to have a good income should be expected to save money for his/her retirement. If that person does not take the responsibility to save for his/her retirement, then that person has to work past 65. Retirement is a priviledge, not a right. As far as the effects on the economy go, if Americans saved money for a rainy day as opposed to spending it immediately, America could once again invest in American Factories instead of building more Walmarts. Running an economy based on a Consumerist lifestyle can only last so long as the Creditors are willing to subsidize it.

I agree that those fortunate enough to have a good, and steady, income should save and invest. Actually, being employed is also a privilege and not a right. Are you implying that after age 65, if a person hasn't saved for retirement, then this person should be required to work? Who provides the jobs? Should employers also be required to hire the over-65 crowd that hasn't managed to save for retirement?

I think you're getting at a point that Americans consume too much and save too little. Sure, that makes sense. Prices keep going up and wages remain stagnant. Economic downturns happen regularly and kill attempts to save. From this last downturn, wages have gone downward. It's pretty obvious why the savings rate is so crummy in the US, and I don't think the major reason is consumerism.

Consumerism is part of the reason, of course. People need housing, food, clothing, transportation and a certain amount of fun to make life tolerable. However, when wages stagnate and drop while prices keep creeping upward, the saving rate should be expected to be what it is. It's simple economics.

Our economy constantly goes into the ditch. People still need to consume while unemployed, so what really needs to be done is to figure out an economy that doesn't flounder every so many years. I suspect it can be done, just not how. I guess it would be like trying to manage the weather.

Meanwhile, we do what we can, eh? Sorry that life is so messy.

AM, you know and I know that there is no such thing as free lunch. If employment itself is not a right, then why should retirement be a right? Government should provide opportunity for people, not free lunch. In America, there are enough jobs for everyone. But America needs to reign in the cost of education and provide job retraining for those who need it. Redistributing wealth from one group of people to another is unfair for those paying. And if age discrimination can be proven, then the legal system needs to handle the discriminators harshly.


If you're one of those people living paychech to paycheck, do you want to be paying Social Security taxes? If people didn't have to pay Social Security taxes, they could either save for their own retirements or invest that money into a more productive enterprise. Trusting that Government with Social Security money is like having the fox guard the henhouse.

To assume that people will be able to make enough money to sock away part of it on a consistent basis for their retirement and not need to depend upon a program such as Social Security is, I fear, more pie-in-the-sky than to assume that Social Security will continue to provide for the people of this country who have contributed over the years.

The jobs that are being produced in the public sector are largely those that pay low wages. While our dear President is pushing for guest workers and amnesty for some who are in this country illegally but who have been paying taxes, the fact remains that these people are going to retire someday as well. Now, while it is a boon to corporations to have workers who demand little by way of pay or benefits, Social Security withholding, if there is any, is proportionately low for those who earn low wages. Is it the fault of low wage earners that they cannot put away money for their retirement? Are some of us so callous to say that it is okay for them not to have what Social Security is available to help them live even though part of that sum will necessarily be *our* hard-earned money?

Let us remember that the measures that FDR's administration took for Social Security and those taken by LBJ's administration for Medicare were responsible for saving and maintaining the lives of millions of Americans, our grandparents and great-grandparents among them. For those of us financially-challenged people who do not have extended families to take us in when we're old and/or infirm, we have to depend upon the system. It may be an irritation to some that we cannot all be self-sufficient all of the time, but those of us who need that safety net appreciate having it there.

I think it is also part of a conflict of mindset here in America. When Americans can think of the ramifications of laws and government programs in the context of "we" and "ours" rather than just "me" and "mine", we'll be able to accomplish much more to benefit all of society and not just a few special factions.

How necessary is Social Security's existence today?

I believe that Social Security has been a mixed bag over the years. On one hand, it has kept seniors out of poverty to a large degree. In fact, seniors are the wealthiest age bracket in the United States. Of course, having a large wealth transfer program in their favor (over a half a trillion dollars) helps that a whole lot.

The main problem I see today is seniors' dependence and expectations that the Social Security program will be there for them. This expectation causes them to adjust their saving behavior in a negative way.

Since the Social Security system is a pure transfer system--that is, there is no investment period involved--it has little benefit for the savings level of the country. [Note: the surpluses are "invested" in T bills; that is, they are spent by the government. These T bills are not investments, but are claims on future tax revenue.]

So the impact of SS has been reduced savings (bad), increased public debt (bad), increased dependence on the government (very bad) and generally wealthier seniors (very good if you are a senior). Do the goods outweigh the bads? I don't think so, but others might disagree.



This is false. The SS system was never any more tenable than any other Ponzi scheme. Sure they are fine if you are on the ground floor, but as more and more investors enter the game (and expect their returns) the scheme folds like a house of cards.

A critical thing to keep in mind is that the Supreme Court ruled (in 1960 Flemming v. Nestor) that current SS payees have no contractual guarantee to have their money returned. We could legally end SS tomorrow if we (the government) wanted to.

Although I am against the very premise of Social Security, even I will concede that an immediate end to Social Security would be very bad indeed.

Should a democratic nation be financially supporting most of their citizens over the age of 62?

What claim to government funds to those over 62 have that those under 62 do not have? Do we not have equal protection under the law? Wealth transfer via government intervention is unfair.

And including those programs that sprang from the Social Security Act, should Social Security be phased out putting the burden of self sufficiency back on the individual? What possible impact would this make on the economy, immigration and employment?

I think it should be phased out. I think it would increase our net savings rate, causing us to be more focused on personal responsibility and remove this expectation that the government will take care of us in our old age.

The first step would be means testing. Rich retirees do not need social security "insurance" payments. This should include anyone who is above about 150% of the poverty line.

It's called a retirement age. If you compell people by law not to work, you had best be prepared to do something in its place.

The whole point of social security is that savings are simply not predictable or eliable. Forget for the moment that people are not saving at all these days, and just look at practicality.

Yes, people should save for their old age.
-Assuming they have the money to do so. Does a single mother of two children have the luxury of putting aside 10% of her annual salary for her old age?
-Assuming they don't have any other problems preventing savings, such as prolonged illness of themselves or their children.
-Assuming they did not put their savings into Enron or WorldCom. How many hundreds of thousands of people lost their retirement saving in thos scandals?
-Assuming they do not invest in industries that crash. How many millions lost their saving when the dot.com bubble collapsed?
-And so on.

Eliminating Social security is an absolute punishment for the poor and the unfortunate, no question. And its not like you can tell the 68 year old woman 'get a job!' Even if there is no retirement age, who will hire her? To do what?

Are you claiming that there is a law against working past the ripe old age of 62? I'd better check with my dad, he's 70 and still has two jobs. It keeps him busy and he's happy to work not to mention more than capable.



This is complete bunk. Bogus. A red herring. Investment in the stock market is safe and predictable over the long term. Show me a time period over 20 years that the stock market lost money (in the last 7 decades).



Great, on this at least we can agree.



The current FICA rate is 6.2% for Social Security (we'll leave out the 1.45% for Medicare). The employer matches that. A quick math calculation puts that at 12.4% of every working class person's wages. So, yes, if we didn't have FICA every single taxpayer could realistically and without pain save 12.4% of their income every year.

I've done these calculations before. If a person earning minimum wage ($5.25 per hour) socks away 12.4% of their income over a 45 year career (working from age 18 to age 63) at even a 5% return, they will have $207929. If they get payouts over a 20 year period (continuing with 5% interest) they will get $15,890.25 back every year over that 20 year period. Even over a 40 year payout, they would receive over $11.500--more than they made each year during their career.

But what if they get 11% (the average market return over the past century)? This same minimum wage worker will have built up a nest egg of $1,284,603.40. A 20 year payout on that (assuming 11% return continues) is over $145,000 per year! A 40 year payout on that amount is $129,292! This is from someone who earned only $10,500 per year over a 45 year career.

[Kudos to monkeychimp.com's annuity calculator.

Of course, we must be honest and admit that no worker has ever gone their entire career at minimum wage.

The only requirement for this scenario is that a person works 40 hours per week for 50 weeks a year and socks away what the government is already taking from them: 12.4%

This is well within the reach of every single American. All they have to do is work.




Don't forget that a house doesn't fall on them or they aren't hit by lightning. I am not talking about investing in individual stocks here (risky--ask any money manager, heck ask me!!). Investing in an indexed fund which is tied to the overall performance of the market is about the closest thing to a sure bet as you are going to find. The Cato Institute did an excellent write up on how personal accounts aren't subject to large downturns in the way you are portraying them.



Vermillion, your line of thinking is elitist in nature. Why shouldn't ordinary working folk use the same strategies that have increased the wealth of the upper crust of society over the past century? If you were to pick a role model of how to build wealth for retirement, would you pick a successful businessman or someone socking their money away in a mattress (or in this case, a nonexistent Social Security trust fund)?



Well thanks for perpetuating a stereotype. What do old people do in Haiti or Guatemala? Do they stop working at age 60? No, they don't. They do different jobs, but jobs nonetheless. Are you really saying that at 68, people are incapable of work or that nobody will employ them? I'll have to ask my dad about that...

Yes, let's look at practicality. For everyone not saving for their own retirement, someone else has to bear the burden. The more people rely on SS, the bigger that burden is. Then factor in that this burden is going to absolutely balloon as baby boomers retire, and that the government has squandered every single penny that was supposedly set aside to cover this.

Also, why aren't savings predictable or reliable? Or, perhaps even more importantly considering the above, why aren't savings more predictable and reliable than the government's squandering of the funds supposedly filling the trust fund? Any time anyone saves 1 single penny, they have demonstrated more predictable and reliable savings than the government has. Well, to be honest, it has been incredibly predictable and reliable...they have squandered every single penny, and they have done so in an absolutely predictable and reliable fashion. Any individual savings plan would beat that record.



To assume that the burden of SS taxes to make up the lack of funding in the trust fund won't be completely onerous and have a highly negative impact on the economy is far more pie-in-the-sky. This will then start a vicious cycle, with even more people unable to afford their own retirement while simultaneously forcing the program to cut back on benefits due to lack of funding. Both of these will create a spending deficit, causing an economic downturn, putting even less money in government coffers, causing other program cutbacks and larger tax rates, thereby compounding the above cycle. What about this scenario is desirable?

Further, to assume that others have enough to both pay for their own retirement while also covering for those who fail to do so is also pie-in-the-sky...particularly as baby boomers retire and place an increased load on the system.



Ah, yes, which is why this is such a classic 'liberal' vs. 'conservative' issue (actually, more socialism vs. capitalism, but I digress). I won't disagree with the more altruistic concept, but will come back with a practical question: How do you pay for it all? Consider that placing an excess burden on the 'haves' means that less is being invested and spent by them, creating a lowered economy, therefore meaning fewer, lower-paying jobs for the 'have-nots', and starting another vicious cycle. Further consider that the inevitable solution to the looming SS funding crisis is going to be less benefits--there just isn't any other feasible solution. That's not good for any of the parties involved. In short, those who are placing their faith in the government on this issue are going to find that trust to be gravely misplaced.

So being forced to work past 65 is an absolute punishment? Nobody on this board answered the question of why retirement should be a Right as opposed to a priviledge. It' one thing to be old. It's another thing to be disabled. If a person is truly disabled and unable to work, then Society should help that person out. And a large number of Senior Citizens are quite healthy.

I note that no one addressed this portion of my previous post.

Indeed, how does one save sufficient funds for "retirement" when one cannot even afford to have dental work during his/her career years? I mention this because I knew several people working at Wal-Mart when I worked there who had their teeth rotting out of their heads because they did not have dental insurance. Indeed, many could not afford the insurance co-payment plans offered by the retailer.

Really, the question isn't whether or not a person should expect to retire by a certain age in these cases; the question is whether the person will be well enough to continue to work. When I read the responses in this thread, I am aware that there is a resentment that anybody should expect to live in retirement so long as someone else's hard-earned money is factored in to any degree. Correct me if I'm wrong.

The solution to the government raiding the Social Security funds is to make it illegal for them to do so for anything other than Social Security, not gutting a system upon which so many have had to depend. Privatization might make some people happy, but it doesn't "fix" the problem either.

Another approach is to raise the Social Security withholding cap to those who make $90,000 per year on up. This would immediately provide more funds for the program. These are the same people who have been benefitting the most from George W. Bush's tax cuts; why should they be consistently favored above the rest of the population? "Penalizing" them by imposing Social Security withholding would, I daresay, be less cruel than "penalizing" those wage earners who make only a fraction of what they are making and who will ultimately need Social Security retirement funds even more. Why penalize the poorer people in our country for being poor?


Two points here:

1. Those who want to work past the age of 65 should definitely be able to. However, try to find work when you're 65 or older. Unless you have an advanced degree or are well-established in a profession, you had better resign yourself to babysitting or becoming a Wal-Mart greeter, because age discrimination in employment is alive and well. Nearly anybody will hire the healthy, attractive 18-year-old in preference to some older man or woman in their 50's or 60's who needs to pay for food, medicine and a roof overhead.

2. The large number of senior citizens who are quite healthy owe it, in no small part, to Medicare insurance instituted by the Johnson administration. The fact that heart patients, diabetics and other people with chronic illnesses can afford doctor visits and prescription medicines allows them to be higher-functioning individuals.
It is when these people have to skimp on medicines or doctor visits in order to pay the rent or buy groceries that we see seniors (or younger people for that matter) in poorer health.

But I'm curious now--should only wealthy people have the "privilege" of retiring? What about those who put 30+ years into hard work and who have a pension, but whose health problems make it hard if not impossible for them to live without depending on the Social Security program? And what about those who worked hard but had their pensions stolen by the likes of the Enron executives?

The reason no one addressed this is that it flies in the face of the facts. First off, illegal immigrants do not receive Social Security upon retirement: that's part of the definition of "undocumented". Secondly, every single wage earner pays Social Security, so "if there is any" is factually incorrect. Thirdly, I have already shown that the money is there, it is already being taken by the government from every single wage earner who is struggling to make ends meet. The government takes 12.4% of your pay to hand out to current retirees. If it allows you keep that and invest it, you'd be better off in the long run. If we did this, there would be no need to take your money and give it to me.



Again, I've addressed this. They get the money through a mechanism called "the government doesn't take it in the first place". Again, what you've raised is a red herring. Dental insurance is not the issue and in fact, it isn't a universal benefit. Only 50% of Americans are covered by dental insurance. Not included in that number would be me and I don't go around bemoaning the fact that my teeth are "rotting out of my head": my mom gave me a toothbrush and taught me how to use it.



You are wrong and I think you have misinterpreted my position. My position is that we should empower the individual as much as possible. In this case, it means not taking his hard earned money via legalized theft in the first place. I have shown how individual control over retirement money yields greater return on investment over government control.



Where should the government have put all the extra money they collected from workers over the years? Should they have locked it up at Forth Worth? Socked it away in a mattress? Put it in the stock market or bond market?



The Social Security system is regressive, but so are most insurance programs. Is it insurance or is it a retirement package? Your idea of who should be penalized (read: stolen from) is quite a common one, but that doesn't make it correct. "Soak the rich" only works for so long. How long will it take these fat cats to game the system? I'm sure you'd agree that it would be done if the dollar amounts were significant enough. Then where would retirees be?



Quite the defeatist attitude. Are you saying that nobody over the age of 62 can find a job outside of Walmart? And why this criticism of Walmart? Doesn't Walmart pay its workers significantly higher than the minimum wage? The CEO of Walmart wants the minimum wage raised. link Why? Because people are likely to spend the extra money in his stores!

I will ignore your second point, since it is off the subject.


Retiring should be a privilege for those that plan for it. As I have demonstrated, the government is already robbing ordinary Americans of their ability to do this planning themselves. This makes them dependent on the system, which means the government is forced to make more people enter the Social Security pipeline (Ponzi scheme) to pay for current retirees.

This was a great system when the ratio of workers to retirees was 16 to 1 (1950) or even 3.3 to 1 (2000). It will not be fine when the ratio is 2.6 to 1 (2020) or 2.0 to 1 (2040). It was more like an insurance system when the "risk" of having to retire was spread over 9 workers per retiree (remember than when SS began, the retirement age was 65, but so was the life expectancy! SS recipients were only those that lived longer than the average.)

Guess what that means? FICA rate hikes and/or lowered benefits (the rate hikes are a virtual certainty). If you think workers can't plan for their retirement now when the government takes 12.4% of their income, what will it be when the government takes 16% or 20%? (These numbers come from multiplying the worker ratio by the tax rate. 12.4% x 3.3 workers means that a retiree makes approximately 41% of the average workers withholding salary. With a 2.0 ratio, that number would be 41%/2.6 = 15.7%. At a 2.0 ratio, it would be 20.5%). Data courtesy of the SSA

The money is there if the government would relinquish it. Which we all know (sadly) will not happen. The government, like all institutions, will fight to retain its power over workers and retirees. A sad state of affairs which came out of a noble idea which was horribly implemented.

I think some of the best and most cogent thoughts in this thread have come from the right. I also think it is the easier side to take, to speak out for old-fashioned self-reliance, but those positions have not been so one-dimensional to not acknowledge some of the merits of our present system.


To start here. Yes, Social Security (and its add in programs) have played a leading role in reducing poverty among our elderly and also int he United States.

But don't forget that the current post 1970s generation of retirees have had the benefit of an overall very strong American economy. (Boom periods 1945-1970, 1983-1988, 1994-2000) And also I would think we could all generally agree it is much easier to save when you make much more and you don't get slammed by recessions and layoffs.

I do not see evidence of a lack of savings created by social security. in fact if anything, the fact that seniors used to be one of the poorest demographic groups in the country shows a pattern in American history of low savings rates.





As for savings I haven't seen the evidence of good savings before SS. Increased public debt has been a horrific consequence by politicians and acceptance from the public of a mismanagement of out public finances by letting ourselves get our grubby hands on our Social Security surpluses, spending it, and still expecting it to be available to be spent again later.





But it would be patently unfair and would deprive Americans of there paid in benefits even at the documented weak rate of return that it provides for Americans. And then we would be busy supporting a generations of impoverished seniors.

Or as you say . . .






I agree on a limited basis. As a forces savings plan it does not pay well. But often in this debate we miss the insurance aspects of the program. Some of us die after paying into the system for six months. Some die the week they start collecting. Some collect for forty years. There is a risk to planning for retirement and some insurance system is the solution. We need to hedge against the possibility of living to 100 while allowing what might have been our wealth to leave to descendants not become ours if we die at the age of 65.

Also, I do take issue with your description of the payroll deductions as a "wealth transfer." I think social security is a scheme to get the poor to insure their own retirements and insulate the very wealthy from a real "wealth transfer." The payroll deduction system is extremely regressive and probably does injure the people that are designed to take the benefits. But it is a forces savings/insurance program that keeps the elderly at a certain standard of living.






Extremely good point. But we do need to wage a war against consumerism, or at least redirect toward buying spending. I think the American win-win mentality serves it well in some cases but in taking the buy now, we culturally are very poor at the pay later aspects.



But what will $15 k per year be worth 45 tears from now? it sounds good now but it might mean taking your children who have to support you on one vacation a year after all of those working years.

And yes, no worker does work at minimum wage, but what about layoffs? What about disability?




But I agree that for many Americans this would be a better overall deal.



But many of us would like to have the option of stopping work at 68. Some of us will not be able to work 40 hour weeks long before then. I hope I am able, and I don;t see how I won;t be. We are living longer and we have more retirement years to plan for without a significant gains in income for the bottom 80% of Americans over the past thirty years. Current fiscal policies are not designed to change that for the better.



I'm on board for a lot of this. But I still say that we fail to address the insurance aspects of Social Security and Medicare. The government is more to blame for this than Social Security itself. On that I will infer some agreement on this point.




I agree entirely, but I blame not social security but the government spending beyond its means in the 1980s and 2000s to place this unfair and cruel burden on future Americans. We can fix Social Security or create a better program for people coming into the workforce today. But for me and people older, SS is the best bad deal I have coming and the government borrowed that money and they will have to pay it back, with interest. This is alas, a very undesirable scenario, but instead of trying to prepare for the shortfalls this decade while we still could, we invested heavily in tax cuts. Again, a clear liberal/conservative divide on what that has meant for federal revenues.



I agree again, This is why Social Security has been effective because it has helped improve the lifestyle of retirees while also freeing their children of much of the burdens of supporting them. This has created opportunities for saving that my have been lost.



I think one of the biggest liberal/conservative divides is over income redistribution. IMHO capitalism is the best system but it naturally creates a type of feudal economy not far from what Marx described in his writings. To keep a strong middle class and a just society, I believe that the tax system should place a higher burden on the rich than the poor. Not an extremely onerous one but one that provides this effect. Chief among these taxes should be an estate tax. While those working poor are handing over 12% of every dollar they earn, multi-millionaire trust funders should be handing over something for unearned income to keep the system working.

I do think we inherently agree on what assuming things from the government will mean for the average American. And it ain;t good.

Edit: Fixed your quotes Eeyore. -AMLord

Eeyore, I think you and I are in agreement on things. Please let me clarify that my stance is the same as yours on the true cause of the looming Social Security/Medicare crisis:



I am also in agreement with PE on both one of the solutions to this, and towards privatization:



FWIW...I'm in agreement with her on what should have happened with the tax cut money, as well. If we can't pay down our debts when we have a supposed surplus...then when exactly are we going to do it? But this is a separate discussion, IMHO.

I imagine by now everyone should know that I am a staunch fiscal conservative. However, that does not mean that I am against any and all governmental programs. I think SS has its place, but that like almost all governmental programs, it has grown out of control. All of my arguments about the looming fiscal infeasibility of SS (and to an even greater extent Medicare/Medicaid) should actually be more alarming for those in favor of these programs than to those against them. If indeed SS is a necessary and beneficial program, then the fact that it is headed towards fiscal insolvency and will therefore be unable to provide its benefits to those expecting it should really be more of a liberal concern than a conservative one. Conservatives have, at the core, a simple solution...kill the program. It is, to me, those who desire to save it that should be driving the bandwagon on making it fiscally solvent--yet that crowd (refering to politicians here, not constituents) has been resoundingly silent on the issue. I can only infer from this that all of the solutions they invision will involve (as they almost certainly have to) large cutbacks in other programs. However, the longer those decisions are put off, the larger those cutbacks will need to be. Again, it should be the liberal's driving this, as they are, to me, the ones that should be supporting these programs. I think it all comes down to politics..Democrats are reluctant to be discussing program cuts due to the impact that will likely have on their electability in the shorter term, whereas Republicans are only too happy to wait until the crisis is upon us, when they can axe these programs severely, and probably blame the Democrats for the problem in the process. Great politics...terrible for the country. We need to get together and decide...NOW...how we are going to fix these problems, as it is rapidly getting too late. This was a big enough issue to create the Trust Fund almost 40 years ago...it is that much more important now.

You have brought up a very ugly fact about the way of life in America Ms. Elspeth. Retirement in the United States of America is a very expensive thing to do. Some experts estimate that to retire at age 65, a person would have to have over 1 million dollars in the Bank. Given the expense of living in America, Retirement in this day and age is a priviledge for the wealthy. Also, the demographics have changed quite a bit since Social Security was invented. In the beginning, there were far more workers than retirees. And the jobs were good paying factory jobs. Nowadays, there's a higher proportion of retirees. Moreover, many of the new workers are taking low paying service jobs. Retirement as we know it was a priviledge that most generations on the face of this planet never got to enjoy.

But retirement doesn't have to be a rich man's priviledge. For starters, Government needs to hire a group of healthcare economists to figure out how to reign in the cost of healthcare. Second of all, Government needs to be more selective about who gets access to any Social Security benefits if it does choose to downscale Social Security. Someone who faced Bankruptcy from medical illnesses should get preference over someone who spent all of his/her working years at a nice government job or fortune 500 job. A lucky worker who had a good job and excellent health who didn't plan for retirement should reap the consequences. Government also needs to crack down on Corporate Fraud and prevent CEOs from looting peoples' pension funds.

Also, being poor alone should not qualify someone for Social Security. Yes, being 65 and working at a Walmart is not fun. But a lot of young people have to share apartments to make ends meet on Walmart wages. Ms. Elspeth, having the Government throw more money at Social Security and Medicare is not the answer. Because given the cost of Retirement, the young people paying their Social Security taxes will someday become Senior Citizens and they will inherit a more expensive problem.

QUOTE(Amlord @ Jun 7 2006, 09:40 AM)

I'll try to take address these points in the order they were made. The fact that illegals and migrants work for such little pay keeps the wages low for Americans working in similar positions. And it's true: illegals do not pay into Social Security.

I love your faith in investing and only gaining from it somehow. Were Social Security to invest in no-risk funds it would make more sense than investing in something with a potentially high-yield but the risk of losing millions of dollars for those to whom the money rightfully belongs. So what is the government's excuse for not having available the funds that are specifically designated for Social Security, and who is authorized to play around with this money?

You may call lack of dental insurance a red herring. The fact that so many cannot afford to have dental care (and I mention dental care because it is pretty apparent to everybody when someone smiles with a bunch of gaps where teeth should be) is either indicative of not having enough money to take care of their teeth; ergo, they probably don't have enough money to pay for doctor's visits, either. And your statement about your mom giving you a toothbrush and teaching you how to use it, while witty in this instance, betrays your suspicion that poorer people just don't take good care of themselves, that indeed, anyone who has to have teeth pulled have been slobs about their dental hygiene and that it couldn't possibly be because they had to pay for rent, groceries and car repairs instead.

I think we both know, Amlord, that age discrimination, especially in a job market such as the one we have now in this country, makes it difficult for older Americans to get higher-paying jobs. I'm not putting down Wal-Mart for hiring greeters who are older, although I did read somewhere that Wal-Mart had sent a memo to all its stores stating that it was more desirable to hire younger employees because they were less likely to have health problems.

I worked for Wal-Mart for three years. I witnessed their tactics. The store in which I worked eliminated its maintenance department and hired a subcontractor who employed illegals. When the Wal-Mart got caught for this and fined, the maintenance supervisor and crew were reinstated from their stocking jobs.

Yes, Wal-Mart did hire me as seasonal help for 25 cents per hour more than Target was willing to hire me. And for that difference, I chose to work at Wal-Mart. But a lot of criticisms of the company, especially regarding how they treat their employees, are well-founded.

The way Social Security uses its actuarial tables is always based on prior activity, not the activity at the time it is being reported. Since it has been several months since I read about it, I'm having a hard time explaining it. But the predictions for that reason are actually more pessimistic--somebody help me with this, please, if you can!

The upshot of my posting is this: Social Security was started for a good reason, and it needs to continue for a good reason. It can be protected from being raided for reasons unrelated to its purpose, and the funds can be added to by simply raising the cap from $90,000 annual income to $200,000 or $300,000. And maybe, as Cruising Ram said, it will keep some seniors from having to buy pet food in order to keep eating.

It seems to me that a lot of the things that today's workers have come to depend on were once "privileges" that were unheard-of before the unions came into existence. It was a privilege for a child not to work in a factory but to attend school. It was a privilege to be able to take a bathroom break while at work at least once a day. It was a privilege to get paid for any unplanned, extra hours that your boss constrained you to work over and above what you normally worked. And it was unheard of to be able to go to a labor board in the event that your benevolent employer fired you for insufficient cause, because any cause was sufficient (there are some firms that still operate this way).

Maybe the time will come when it is a privilege to approach that older age of 70 and still have food on the table and a roof over your head. Hopefully those in charge at the time will not consider that your (or my) problems are not self-induced, making us somehow unworthy to benefit from a system designed to lend a hand regardless of whether we were the proverbial ant or the proverbial grasshopper of the fable.

The funs are “not available” because the fund (where all the money was) was stolen by Congress in 1969 to help pay for the war in Vietnam. Since then it is part of the budget and gets used to help balance the budget. The average return on the money taken from your check every week is 1.9%. Most of us could do better in CDs but since all proposals to “privatize” the fund are apparently dead we can forget about this. No one in Congress and the Dems in particular are anxious to “give us back” our Trust Fund. It would be painful since the government would then lose the use of this “slush fund”. What WILL happen is higher SS taxes and later retirement for all of us. In other words we get shafted by our government.

Be suspicious of any plan to “shore up” SS. This is another way of saying TAX increase now when it will not be needed by the way for over 20 years. Just adds to the “slush fund”.

You mean, higher taxes to replace the money that they already taxed us for, but spent somewhere else? I am still curious if there isn't a way to make this illegal. The SS Tax was, after-all, earmarked for a special purpose, but was not used for that purpose. Taxing us again for that same money SHOULD be illegal, and special purpose taxes do usually carry some covenants about replacing the money if not used for its original purpose (unlike general taxes, which our government, in its infinite wisdom, is allowed to mispend at will). After all, if you pay somebody to do a job, and they don't do that job, shouldn't you expect that when they finally do the job later, that you shouldn't have to pay for it AGAIN??? If not, then please contact me, as I have a wealth of projects I would love to not do for you for money.
.

how necessary is Social Security's existence today?
My initial response is Not at all. After reading other's thoughts at , there are some good points. 1) You can not trust people to save on their own. 2) SS is an insurance policy that keeps everyone semi-safe from the devastation of tragic accidents.

What possible impact would this[phasing out SS] make on the economy, immigration and employment?
This is the most interesting aspect IMO. Like all socialist institutions, there are economic draw backs to having them. We currently give the government a ton of money that they spend recklessly. As noted half of this money comes from all working Americans in roughly an equal amount and the other half from the employers that hire them. The employer aspect is what seems to be overlooked the most. How can American's compete in the global economy with a government mandated 6.2% (7.65% if you count Medicare) increase in your salary? I believe this is a cause for the high demand in immigrant labor. So SS is somewhat hurting low and more recently middle wage earners by encouraging outsourcing of our jobs. It's like we're all in one big union, except we can't go on strike when companies move our jobs. Without SS companies would likely pay more to the workers without the burden of SS. Not to mention the boost to the economy that would come from everyone having their own 6.2%.

The problem is obviously that you lose the safety net for the disabled and elderly. Can't we just expand Welfare to cover these concerns and leave the Americans that don't need SS out of the system? Seeing as it is somewhat redundant, let's phase it out.

No actually I mean tax us to pay for the baby boom generation when they are fully retired. At some point, give the crappy return on our money SS cannot make the payments. Some say 2042 etc. At that point or just prior to it taxes need to be raised.

It is too late to complain about the “money earmarked” far the purpose. That went down the tubes in the middle of some night in 1969 when Congress stole the fund and changed all that. Essentially SS is paid out of general revenues and the “surplus” is used for whatever Congress wants.

The closest we have come to getting even part of the fund back are the GWB proposals to partially privatize the system as has been done very successfully in Chile for example. Seems dead now. Don’t count on SS inn retirement. Latest proposals are to change the way the payments are indexed which will reduce future payments in relation to prevailing wages.

That's the same money I was talking about. We have ALREADY paid for this.



NO! It is NEVER too late to complain about governmental malfeasance on a massive scale. If anything, as time continues to go by without this problem being addressed, the complaining should be amplified, not reduced.

And it would do Congress a world of good to have to come up with the money from somewhere besides our pocketbooks (again). As long as Congress knows they can always put off paying for spending until later, they will continue to do so. If none of us ever take Congress to task for stealing our money, it will only continue to happen. I'm really fairly flabbergasted by this. If Congress misspending trillions of dollars, and taking absolutely no steps to rectify the problem before any of the available solutions become absolutely preponderous (despite everyone's full knowledge of the true scale of the problem), isn't worthy of public ire, then just exactly what would be? Anyone willing to tolerate this is by definition willing to tolerate almost anything our government would possibly do.

Considering so few of us vote, the reality is that people will put up with almost anything. The ones that pay attention are not numerous enough to overcome the "redistricting" that our state governments allow to create noncompetitive seats. In the past two elections a total of 9 House incumbents lost. 9 out of what, 439? In 1994 alone there were 54 seats that changed hands. The problem is at the local level. Until we demand unbiased districting from our state legislatures, the federales are just going to get more and more corrupt. And they have been getting more corrupt. Hobbes, pork has gone up 40% in the last year. Are you going to hold the Republicans in the House responsible for this accountable??? Until we can kick the bastards out, we're not going to get real solutions on anything IMO unless it happens to coincide with what a powerful special interest wants.

And including those programs that sprang from the Social Security Act, should Social Security be phased out putting the burden of self sufficiency back on the individual? What possible impact would this make on the economy, immigration and employment?

Yeah, across the board too.

- Eliminate pork

- Eliminate crooked fed contracts for DOD and DOE

- Eliminate corporate welfare

Our taxes, while employed, would plummet and the younger generations would benfit tremendously. Yet, there's age discrimination among these younger generations.

So, stalemate. Don't trust anyone over 30 or under 30, depending on where one sits.

Well that’s right but the money is NOT there. And since the money is gone and the number of people has increased since the fund was stolen – getting it back is all but impossible. Bush proposed giving back a small % to younger workers it never went anywhere. Congress does not want to deal with the issue of where they would get the money to replaced the lost “slush”. AARP, being IMO firmly in the pockets of the Congress is not for it either. No matter how safe the investments could be giving back any money to any of us seems to be out of the question at least for now.

You may be shocked to learn this and that is really a good part of the problem. Many Americans still believe there is a “Trust Fund”.

We have been paying into this fund for over 30 years. It's like a prepaid mortgage. If you prepaid for a house, and then later, when the builder showed up and asked you to pay him AGAIN, would you say 'Sure, why not?'. Of course not. You'd tell him its already paid for, and he'd best get busy building it. Same situation here. Congress has already stolen our money once. Only a complete idiot would willingly give it to them AGAIN. Fool me once, shame on you, fool me twice, shame on me.




Oh, I don't doubt that at all. (Does anyone on this board honestly think there's a bank somewhere with money sitting in it for the trust fund?....I hope not. If so, please indicate why you would think this.) What I find frustrating is the way people in Congress speak about it being there, when it's clearly not. Either these people are intentionally lying about it, or they're completely ignorant. Neither bodes well for someone in a position of power. Further consider that these are often the SAME people who so roundly criticized Ken Lay for what would amount to the same thing, only several million times worse and affecting a far, far greater number of people. (not defending Ken Lay here, only indicating that if what Lay/Enron did is bad, this is far, far, far worse).

Still baffled though that even people who understand this is the case still don't get particularly worked up about it. Apparently everyone in the US is just fine with allowing our government to misspend TRILLIONS of dollars, and then come back to us later saying we owe them for it again. I just don't get it.

Further note--this is non-denominational problem...both sides of the aisle are equally as guilty. Yes, I have sent a note to my Senators indicating that if they don't get off their arse and do something about it, I will consider them a part of the problem, and be unable to vote for them in any upcoming elections (they are both Republicans). I suggest everyone here do the same. If you believe in SS, you need Congress to take action to save it. If you don't believe in SS, you need Congress to take action to kill it. Either way, you need Congress to take action, or we are going to face a monumental burden in our future. To go back to the mortgage analogy, essentially what will happen is that instead of paying for this over 40-50 years, as was the plan with the trust fund, we are going to have to pay for it (AGAIN!) in 10 years or so. How many people here could survive economically if they had paid off their house, but were forced to continue to make mortgage payment, AND their mortgage/rent suddenly tripled? Then consider that as benefits will surely be reduced as part of the 'solution', that this would be the equivalent of having your house (which you've already paid for once! but are still paying for AGAIN!) radically devalued at the very same time. Economic suicide. That is the scenario we are facing. And if you're not telling your Congress person about it, then you're part of the problem.

The really scary part is that the situation with Medicare/Medicaid, and now the prescription drug program, is several times worse than SS. Our government is (knowingly?) driving us towards an economic black hole, and no one is doing a darn thing about it. And voters don't seem to care. I just don't get it. If you're in the lower/middle income brackets, you are going to be hit with MASSIVE benefit cuts. If you're in the upper economic brackets, you're going to get hit with MASSIVE tax increases. For everyone, there is going to be a MASSIVE economic recession because of this. EVERYONE should be MASSIVELY ticked off at Congress for creating this situation. But no one is. I don't get it. We're all apparently content to be sheep being led to slaughter. Maybe we deserve it.

What is there is the “commitment” to pay you and you will be paid. The issues are.
1. you earned less than 2% on your money – not a great return
2. they tax your payment if you have other income (from any source)
3. Your SS money is used to do whatever Congress decides to spend it on.
4. they will continue to raise the Tax (what you pay) and delay the date at which you can collect the full benefit.



You don’t want them to “save” it. It is an obligation they are required to pay and when you say “save” they feel compelled to raise the TAX so they have more from our pay checks to spend. What IMO we want them to do is allow us to have some control over a portion of it. Doing this we might be able to improve our “return” and have a higher “payment”. For example those in Chile who opted for invested funds over the fixed return (like ours) got a return of over 10%. Even after excessive “fees” they get 4 times what our retires get (in proportion)





You are correct. This is a REAL problem and IMHO much of it has to do with just plain government incompetence and fraud. The system is a mess and I feel it is a good part of the reason for increasing medical coats. The drug coverage seems to be the best part now. The real abuse is in the services. In addition the forms are so onerous that many doctors have to hire people just to handle Medicare paperwork.