Bushs Plan to steal all the money in Social Security by the year 2008

[jlw]

PERMENENT CAUSES OF LIBERALISM??

Two horns, hooves, and a tail?? Maybe a pitchfork?? Fire??

 

[Jay74]

trevor:

Government programs facilitate the breaking of the family unit.

AMEN! I was just thinking of that earlier today.

On one end of the spectrum, goverment programs for the elderly not only encourages people not to be responsible for themselves (shouldn’t they prepare for their own retirement?), but provides an incentive for people to not take care of their parents (remember “Honor thy father and mother”?).

Then, on the other end of the spectrum, welfare not only encourages people not to be responsible for themselves, but helps people be less responsible for their kids. Worse, it provides incentive to have more kids that parents can’t afford and don’t take care of.

The government should get out of the family care business, they only make it worse.

 

[BayCityRickL]

It’s hard to get a clear picture of the problem with social security. It may run out of money, but when the baby boomers start to die off, shouldn’t the situation reverse eventually?

It’s hard to imagine the government deficits ahead, if the politicians keep up massive deficit spending, like Bush plans for the next budget. The Republicans once prided themselves on “fiscal responsibility” so where is it? They prided themselves on the Contract with America with balanced budgets and term limits, so where are these?

Bush wants to spend $400 Billion on defense and homeland security next year. Do you feel safer? I would just like to see where a chunk of that money goes, like $20 Billion dollars. Somebody tell me what that money is buying?

 

[katherine2]

Jay74:

Worse, it provides incentive to have more kids that parents can’t afford and don’t take care of.

So much for Humane Vitae

The government should get out of the family care business, they only make it worse.

The difference Social Security has made is the end of what used to be widespread – the County Poor Farm, where thousands of elderly people ended up.

 

[Scott_Lafrance]

katherine2:

So much for Humane Vitae

The difference Social Security has made is the end of what used to be widespread – the County Poor Farm, where thousands of elderly people ended up.

Unfortunately, the Social Security concept was intended to be a short term measure to correct some immediate problems. It was never designed or intended to be a permanent deal. The problem with the long term solvency of the program is that eventually, there will be as many people withdrawing from it as there are contributing. It is a fact of demographics. When it started, 15 people paid in for every 1 person receiving benefits. Additionally, the life expectancy of the elderly was less than 60 years old. So, if someone actually reached 65, they weren’t anticipated to be drawing pay for very long. Now, with the life expectancy reaching over 75, and 3 people contributing for every recipient, more people are withdrawing for longer periods of time. How can Social Security remain viable long term without taxing the bejesus out of the working folk?

 

[katherine2]

Scott_Lafrance:

Unfortunately, the Social Security concept was intended to be a short term measure to correct some immediate problems.

Who involved in the formation of OASI said that?

 

[Scott_Lafrance]

katherine2:

Who involved in the formation of OASI said that?

Background, from www.newyorkfed.org,

**Liabilities Created by a Pay-As-You-Go System
**The original intent behind most public retirement programs was to alleviate poverty among the elderly. The Social Security program in the United States—Old-Age and Survivors Insurance (OASI)—and its counterparts in Germany and Japan are largely pay-as-you-go (PAYG) systems, which operate by collecting payroll taxes and immediately transferring the proceeds to retirees. A recent Bundesbank study of the German program called this system a “contract between generations” in which those able to work care for those who no longer can.[4](javascript:void(0))

The key weakness of a PAYG system is that the first wave of benefit recipients receive far more in benefits than they pay in payroll taxes. In principle, the creators of such a system could have paid the first beneficiaries only what they put into the system plus some market rate of return. However, providing nominal benefits to those workers who were near retirement—or nothing at all to those already retired—would not have seemed practical. As a result, when the PAYG systems were launched, current payroll tax receipts were used to pay benefits to the first generations. This large initial transfer of wealth is an implicit burden today on any PAYG system, with the gap between what early generations of recipients received in benefits and what they had paid in taxes creating an immense liability for public retirement programs. For example, a recent study estimated that the net transfer of U.S. Social Security funds—that is, benefits received minus taxes paid in—was $7.9 trillion (in 1997 present value dollars) for people born before 1917 and $1.8 trillion for people born between 1918 and 1937, or a total of $9.7 trillion.[5](javascript:void(0))

A PAYG system can carry such a liability indefinitely as long as demographics remain relatively unchanged. However, when large-scale demographic changes like those predicted for the United States, Germany, and Japan take effect, the system may no longer be able to sustain itself. In other words, when too many people retire, supported by too few workers, a PAYG setup can run into difficulties paying out promised benefits from current payroll taxes.

 

[katherine2]

sorry, Scott, I was unclear. Who said they were creating OASI as a temporary program?

 

[Scott_Lafrance]

katherine2:

sorry, Scott, I was unclear. Who said they were creating OASI as a temporary program?

When they originally designed OASI, they never fathomed that demographics would change. Therefore their intend was to supplement elderly and survivors from the payrolls of existing workers. This type of pay-as-you-go system works great if the demographics never change. Unfortunately, demographics HAVE changed, with the bubble of baby boomer recipients that will eventually exceed the number of contributors. SO, the original INTENT may have been to be on ongoing system, but it was never designed to compensate for evolving demographics. So, in theory you are correct. The originators of the program may have seen this as a permanent solution, but since nothing in society EVER stays the same, they should have envisioned a better design than Pay As You Go. It is flawed in its concept. Additionally, it is just anothe example of forced financial equity (wealth redistribution), something that the magisterium has condemned for quite some time now.