[News] Gov. Perry propose flat tax.

[GasBandit]

But just enough Floridians voted against the guy that was going to put the SS money in "a locked box."

I thought that was still in debate? Heh... But if you believed him in any case, I've got a nice beachfront condo in arizona to sell you.

I think to some "privatize" would pretty much kill it

Somebody ought to tell Galveston, TX that - they privatized their social security before Congress changed the law to prevent anybody else from doing so, and it's outperformed the nationalized version.

 

[Chibibar]

Somebody ought to tell Galveston, TX that - they privatized their social security before Congress changed the law to prevent anybody else from doing so, and it's outperformed the nationalized version.

Heh. It was meant to reply of people putting words in your mouth.

You said privatize. they hear "kill it"

 

[Krisken]

I think to some "privatize" would pretty much kill it

Yes, exactly how I feel on it. Once it starts going to Wall Street, you can start kissing that all goodbye. 401K's used to be pensions.

 

[GasBandit]

Yes, exactly how I feel on it. Once it starts going to Wall Street, you can start kissing that all goodbye. 401K's used to be pensions.

Funny how that hasn't borne out in the example cases of it being privatized, but it HAS been EXACTLY what has happened with the nationalized version.

 

[Krisken]

Funny how that hasn't borne out in the example cases of it being privatized, but it HAS been EXACTLY what has happened with the nationalized version.

Can you explain what this means? I'm not sure I follow.

 

[GasBandit]

Can you explain what this means? I'm not sure I follow.

The experiments in "privatized" social security have not resulted in disappearing money.
The "de riguer" operation of nationalized social security has.

 

[strawman]

Can you explain what this means? I'm not sure I follow.

The funds in national social security have been raped and pillaged. The private social security example provided has not.

Your earlier post claimed that privatized versions would go down the pooper.

Yet, currently, the two examples that exist show the opposite - the private version is sane and stable, while the national version isn't.

Therefore your claim, "Yes, exactly how I feel on it. Once it starts going to Wall Street, you can start kissing that all goodbye." might be in error.

 

[Krisken]

Of course not. They never do in the "experiments". As soon as people start investing their privatized social security (which is stupid, since it's no longer social security at this point) in stocks, it's no longer secure. That's the whole point of the program.

It's not a get rich idea, it's a preparation for the future. The people in power who push for privatization are doing so at the behest of Wall Street because they'd love the influx of money, just as they did when employers stopped doing pensions and started doing 401K's. Tell me, how are those 401k's doing lately?
Added at: 16:52

The funds in national social security have been raped and pillaged. The private social security example provided has not.

Your earlier post claimed that privatized versions would go down the pooper.

Yet, currently, the two examples that exist show the opposite - the private version is sane and stable, while the national version isn't.

Therefore your claim, "Yes, exactly how I feel on it. Once it starts going to Wall Street, you can start kissing that all goodbye." might be in error.

And it might not since you've shown NOTHING to prove your position. Nothing is sane and stable about investing in the market. Again, how are those 401K's doing?

 

[GasBandit]

I don't have a 401k, but my HSA is doing way better than ObamaCare, financially

 

[Krisken]

Wow, I'm convinced.

 

[GasBandit]

Wow, I'm convinced.

I know, faint praise. The account could be *empty* and it would be doing better.

Which is kind of the point.

 

[Krisken]

I know, faint praise. The account could be *empty* and it would be doing better.

Which is kind of the point.

No no, the sarcasm was because the comparison makes no sense.

 

[GasBandit]

No no, the sarcasm was because the comparison makes no sense.

I'm sorry, I thought we were comparing government provided services with their private alternatives?

 

[Tress]

Are you ignorant of the fact that a small scale experiment will not properly compare to the same type of arrangement on a huge national scale, or are you deliberately distorting the facts to support your argument (as usual)?

 

[Biannoshufu]

Lots of democrats support tax plans that don't tax investment income. Beyond that, how is a flat tax "vastly favoring" the wealthy? Again, assuming that there are no taxes for those below a certain income level (or rebates, or whatever mechanism you want).

how many is lots?

 

[Chibibar]

The problem I see with privatize things on national level is that company that runs it do it to make a profit. That is their goal. But what happen when those investment folds? money is gone. That is what investment happens. A lot of people who are retiring NOW (baby boomers) can't cause their 401k are mostly gone. They have some backup but generally it doesn't look good.

While the government level, they still pay out cause it is their duty. Government is losing money now out of the SS fund cause well..... that is the government's fault, but unlike 401k, you still get your payments.

It is a failsafe system created to make sure the elderly have an income when they can't work anymore (retired)

 

[GasBandit]

Are you ignorant of the fact that a small scale experiment will not properly compare to the same type of arrangement on a huge national scale, or are you deliberately distorting the facts to support your argument (as usual)?

So are you saying that using european nations with populations smaller than most US cities as examples that socialism can work is invalid?
Added at: 17:38

The problem I see with privatize things on national level is that company that runs it do it to make a profit. That is their goal. But what happen when those investment folds? money is gone. That is what investment happens. A lot of people who are retiring NOW (baby boomers) can't cause their 401k are mostly gone. They have some backup but generally it doesn't look good.

While the government level, they still pay out cause it is their duty. Government is losing money now out of the SS fund cause well..... that is the government's fault, but unlike 401k, you still get your payments.

It is a failsafe system created to make sure the elderly have an income when they can't work anymore (retired)

The problem is, that exact line of thought has led to our government being in excess of 14 trillion dollars in debt with no sign of slowing down.

 

[Covar]

 

[Krisken]

Social Security, and why you are always wrong in saying it is costing us more money.

Every time I see someone say Social Security is in debt, I shake my head and worry that the person saying it is doing what Covar's picture is doing.

That brings us back to this supposed $41-billion "shortfall," which exists only if you decide not to count interest due of about $118 billion.
And that, in turn, leads us to the convoluted subject of the trust fund, which for some two decades has been the prime target of the crowd trying to bamboozle Americans into thinking Social Security is insolvent, bankrupt, broke — pick any term you wish, because they're all wrong. The trust fund is the mechanism by which baby boomers have pre-funded their own (OK, our own) retirements. When tax receipts fall short, its bonds are redeemed by the government to cover the gap.
Despite what Social Security's enemies love to claim, the trust fund is not a myth, it's not mere paper. It's real money, and it represents the savings of every worker paying into the system today. So I'm going to train a microscope on it.

 

[strawman]

The people...who push for privatization are doing so

Because if I invested the same money myself and managed it myself I'd be doing much better - even with the economic downturn - than I will when I collect my social security.

And yet, by law, I'm required to feed into this form of retirement savings.

It's my money, let me decide how to invest it.

Oh, right, you believe the government does a better job of taking care of my needs than myself. I forgot that gov't knows best.

Or are you willing to admit that it's a government mandated form of welfare - today's working class gets to support today's retirement class.

The facade that it's a "retirement program" is thin at best, and those who choose to believe it's a retirement program rather than the mandated welfare program that it actually is will be doing us all a disservice when they vote to allow politicians into the office that see it as a savings account to be raided at will.

You've blustered a lot about how one example doesn't prove my point. Fine. Show me the counter example - and don't pretend that pension --> 401k is analogous. The pension is a benefit the employer pays, the 401k is an option the employee pays.

 

[Norris]

Yeah, if we'd invested the social security fund into the market when George Bush suggested it we'd be so much better off! It's not like there was a massive stock market downturn that cost people tens of thousands of dollars!

I have death benefits from Social Security. They went into a trust fund and were invested in the market. I lost money. It was still there and still sizable, but it took it right on the chin. So I am highly dubious that "privatize" would work better than "lock box".

 

[Krisken]

Stienman, I think the majority of America would lose their money if they were allowed to invest it. Maybe you, too. The stock market is a fucking gamble, and a lot of people are losing.

 

[Necronic]

There are a lot of examples of places where states or cities have used private investment firms to manage employee pensions. There are a lot of examples of those where it went *really* bad.

There are also a lot of examples where the city completely bankrupted itself entirely on its own management.

.....also Steinman the EmployER also pays into any 401k that is worth mentioning. A 401k without matching is called an IRA (ok there are actually 401ks without matching but it makes no sense.)

 

[GasBandit]

Social Security, and why you are always wrong in saying it is costing us more money.

Every time I see someone say Social Security is in debt, I shake my head and worry that the person saying it is doing what Covar's picture is doing.

That article insists that social security's "trust fund" has been invested in US Treasury Bonds. This article insists it hasn't.

For the past 25 years, the government has led the public to believe that the surplus Social Security money was actually being invested in government bonds, as it was supposed to be, when, in actuality, the money was spent as general revenue and was, therefore, not invested in anything.


The official Social Security website, which used to boldly state that all surplus Social Security revenue was invested in government securities, has been softening its language to more accurately reflect the truth. However, their words continue to be misleading. The current statement on the official website, with regard to what happens to Social Security taxes, states the following:

“Tax income is deposited on a daily basis and is invested in ‘special-issue’ securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.”​

The Social Security Administration has come a long way from their earlier statements, which were extremely misleading. In the second part of the above statement, they admit that, the Social Security cash, “goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.” This part of the statement is true. It describes what has happened to every dollar of the $2.6 trillion in Social Security surplus.

The first part of the statement, “Tax income…is invested in ‘special-issue’ securities” is not true. If the money all goes into “the general fund of the Treasury,” it is all spent for general government operations. Thus, none of the money was saved or invested in anything. The government “borrowed” the surplus money and issued “special issue” IOUs to account for the spent money. The only ways that the government can redeem these IOUs are by 1) raising taxes, 2) decreasing other spending, or 3) borrowing the money.

In the Summary of the 2009 Social Security Trustees Report, a single sentence, buried deeply within the report, spills the truth about the so-called “trust fund bonds.” That sentence reads:

“Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.”​

The above official declaration by the Social Security Trustees, that the IOUs provide no income to the Treasury, should make it clear that Social Security does not have any surplus money with which to pay benefits. The government had to borrow $41 billion in 2010 so that full benefits could be paid, and it will have to borrow again this year, and in all future years. Social Security continues to have the incoming flow of payroll tax revenue, but it is insufficient to pay full benefits. All of the talk about Social Security being able to pay full benefits until 2036 is based on the myth that the Social Security surpluses were saved and invested as was the intent of the 1983 legislation.

Added at: 18:46
And you know who else said there was nothing in the trust fund? Obama.

Treasury Secretary Timothy Geithner echoed the president on CBS’s Face the Nation Sunday implying that if a budget deal isn’t reached by August 2, seniors might not get their Social Security checks.
Well, either Obama and Geithner are lying to us now, or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other.
Here’s why: Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees. If there are real assets in the trust fund, then Social Security can mail the checks, regardless of what Congress does about the debt limit.

 

[strawman]

Stienman, I think the majority of America would lose their money if they were allowed to invest it. Maybe you, too. The stock market is a fucking gamble, and a lot of people are losing.

Life's risky - lets remove people's ability to choose how to allocate their resources. It's too risky to eat without getting fat - we should mandate their food consumption. It's too risky to drive safely - we should eliminate personal conveyance in favor of public transportation. Raising children is a gamble - we should train and license caregivers and remove children from homes where they don't have a full time licensed caregiver. There's too much risk in allowing them to care for their health - we should mandate health care and force them to eliminate harmful substances from their life and get regular physicals. It's too risky to buy stuff that doesn't impart good value - they should simply hand their paycheck over to the government, and they will receive those things they actually need.

From each according to his ability, to each according to his need.

----------

Look, I'm fine with welfare programs. Call them welfare programs. Force people to pay into them as part of taxes. They are a cost to our society. But don't pretend that social security is anything other than a welfare program, and roll it into normal taxes not as a separate line item, but simply as part of taxes. Let people know that they are living on the public dole when they choose not to save for their retirement, or they choose to invest poorly.

But don't spit shine it and pretend that the government is doing me a favor. There are other first world countries that practice socialism if I were interested in that. We don't need to move closer to socialism just because life is "risky".

Choose a different excuse if you want to support social security.

 

[Norris]

It sounds like you would love Somalia.

 

[AshburnerX]

But don't spit shine it and pretend that the government is doing me a favor. There are other first world countries that practice socialism if I were interested in that. We don't need to move closer to socialism just because life is "risky".

Move closer to socialism? If your not 75+, you have NEVER known a United States without Social Security. Don't act like this is something that was snuck in the backdoor while you weren't looking. It's likely been around longer than you've been alive.

 

[Krisken]

I didn't realize I was having a discussion with NRO. Holy crap on a cracker, this thread got nutty.

 

[Covar]

Yeah, if we'd invested the social security fund into the market when George Bush suggested it we'd be so much better off! It's not like there was a massive stock market downturn that cost people tens of thousands of dollars!

I have death benefits from Social Security. They went into a trust fund and were invested in the market. I lost money. It was still there and still sizable, but it took it right on the chin. So I am highly dubious that "privatize" would work better than "lock box".

You realize the fact that the Social Security fund earns interest means it money in it gets invested right? Same with your savings account. But hey, why bother with little things like that and lets just assume that privatizing social security means close your eyes, throw a dart at a list of stocks and buy as many shares as you can.

 

[strawman]

I'm just here to amuse you. If you're not amused, you're doing it wrong.

 

[Necronic]

Covar, of course it's invested in something if it earns interest. But there are different kinds of investments out there. I don't agree with the argument that stock investment is gambling. It's a zero sum game in the short term, but if you're smart you can come out of that on top.

But I don't think it's right for this kind of savings. Think of it this way. Most personal financial advisors will agree that for a 55+ year old the majority of their retirement savings should be in very low risk investments. Well, that's kind of what the SS Fund is, an ongoing fund for people that are perpetually 55+, or those about to loose their jobs etc.

I'll agree that the method of investing in government securities means that the trust fund effectively loans money to the government, and that is a bit weird, but ignoring that for a moment it is the case that US Treasury Bonds are still the safest investment out there.

But that last point deserves a little scrutiny. If the boomers ever start collecting benefits at a rate high enough to require the SS fund to call in large amounts of that debt....what's going to happen? This is why the whole "ponzi scheme" concept keeps getting mentioned. The current setup is fine as long as no one trys to withdraw, or as the case may be, stops lending. I'll be honest it's a bit frightening.

However there is a solution: Liquidate all people 50+ years old (except my parents and their friends of course). And I mean liquidate. Like turn them into a creamy protein rich liquid.

Edit: And Gas, that article is pretty bad. It's like he just ignores the entire concept of what a bond is.

Like this statement "Every dollar of the $2.6 trillion in surplus Social Security revenue went into the general fund and was spent on general government operations. None of it was saved or invested in anything" Right. Because that's exactly what a bond does. What did he expect: The treasury borrows money from people/SS through bonds and then invests it in a mutual fund? No, the treasury borrows money and the government spends it.

Frankly the guy who wrote that article is.....well....this is his car (seriously)

Spoiler

 

[Adam]

Sosme devunt I'm thinking more ling but.

 

[GasBandit]

Sosme devunt I'm thinking more ling but.

Ok, I need some help with this one.
Added at: 11:03

Edit: And Gas, that article is pretty bad. It's like he just ignores the entire concept of what a bond is.

Like this statement "Every dollar of the $2.6 trillion in surplus Social Security revenue went into the general fund and was spent on general government operations. None of it was saved or invested in anything" Right. Because that's exactly what a bond does. What did he expect: The treasury borrows money from people/SS through bonds and then invests it in a mutual fund? No, the treasury borrows money and the government spends it.

Frankly the guy who wrote that article is.....well....this is his car (seriously)

The guy's apparently a professor of economics in Illinois. Your response is to belittle his decal job?

"No, the treasury borrows money and the government spends it."

Borrows it from social security?

 

[Chibibar]

"No, the treasury borrows money and the government spends it."

Borrows it from social security?

that is how I understand it. It was suppose to be low low risk bonds (which would be Government bonds and such) but that huge pot o money was hard to ignore by congress. I read congress HAVE been dipping into it and pay for projects and HOPE to pay it back (almost like borrowing) but alas, the project fails and money is gone. It wasn't suppose to be like that. too many hands in the cookie jars and taking the cookies without replacing it.

 

[GasBandit]

that is how I understand it. It was suppose to be low low risk bonds (which would be Government bonds and such) but that huge pot o money was hard to ignore by congress. I read congress HAVE been dipping into it and pay for projects and HOPE to pay it back (almost like borrowing) but alas, the project fails and money is gone. It wasn't suppose to be like that. too many hands in the cookie jars and taking the cookies without replacing it.

My question was a little more rhetorical. In theory, the money is "borrowed" via bond - which is supposed to be very secure investment. But I'm not as confident in the government's repayment as I might once have been. Granted, they've not failed to repay a bond yet, but the debt train is an absolute runaway, and in my opinion it's just a matter of time. As my Obama link above showed, apparently the social security "fund" is now entirely bonds with no liquid assets whatsoever. That doesn't strike me as a good thing.