The Media and Social Security

[otm]

Joe Kelley:

It should be remembered that at the start Social Security had a huge surplus. Everyone was paying in and few were collecting.

In the 30’s and 40’s this surplus was dissipated by easing the conditions for receiving. This took the load off of Old Age Pensions and other government programs.

Social Security was then intended to be a pay as you go program with no surplus.

Unfortunately, with the population bust, we have an ever increasing number receiving, while the growth of the paying population has slowed and may soon reverse.

We must now find a way to pay for the largess of Congress in the 30’s and 40’s.

I think Ponze went to jail for running a private system on these principles.

Only one slight problem: there is no population bust in the US as of the moment. We are at about replacement, which is about 2.2 children per family.

There are problems, if you wish to call them that, and that is that the majority of the population is white, and the majority is below replacement (I believe the figure is around 1.7, although it could be higher). However, the influx of two groups with high birth rates is keeping the population even.

Those two groups? Vietnamese and Hispanic.

A recent study of Hispanics, however, showed that second, and particulatly third generation Hispanics are buying in to the contraceptive mentality and there has been a noticeable lowering of the birth rate among that part. Why? Materialism, in a word. They want to have more opportunities for their children, and they realize that means post high school training, whcih costs money; and then there are the two cars, the HDTV, the … fill in the blanks.

At this point, however, the population is steady or growing.

Additional problems are the additional benefits that have been “hung” on the program. It originally was not to pay for SSI, for example.

 

[katherine2]

for those who care what the church says:

usccb.org/sdwp/national/commitment.htm

 

[katherine2]

otm:

Additional problems are the additional benefits that have been “hung” on the program. It originally was not to pay for SSI, for example.

While SSI is administered by the Social Security Adminstration, the funds to pay for it come from general revenue not the Social Security payroll Tax (FICA - OASDI)

 

[otm]

StJeanneDArc:

Thank you for stating the truth. I get gasps and snickers all around whenever I mention this, but I think SS is an immoral scheme. It takes money from one group of people by force of law and gives it to another group of people (who by the way are the richest demographic in the country). It also usurps the role of extended family in caring for the older generation.

Both Christ and St Paul approved of civil governments, and Christ specifically approved of the right of civil government to tax people and distribute that money in whatever fashion they were doing at that time.

So I might be careful calling something immoral that Christ approved of. You may not like it, but immoral is a different issue.

You might also want to read what some of the early Church Fathers had to say about the moral duty of an individual who has more than enough for their basic needs; then compare it with how much you actually give to assist the poor. 10% of your earnings wouldn’t even scratch the surface.

 

[JKirkLVNV]

StJeanneDArc:

I haven’t read up on Bush’s proposals, so I’ll speak about the basics of how SS actually works today. We all pay 12.4% of our income up to $90,000. All money paid out to SS recipients comes from current taxpayers, and this was true from the beginning. There have never been any assets in the system. Any money your grandfather paid into the system is gone. It went to whoever was receiving it then.

Currently there is a slight surplus of payments into the system. The government uses that surplus in the general fund to pay for other expenses. The government cannot by law go out and buy some huge CD or mutual fund with those excess funds. And really, that makes sense, too. We can’t have the US government bestowing that kind of taxpayer largesse on some private bank or investment firm.

There are two reasons why I think it’s immoral. The first is that SS is what they euphemistically call a “pay-as-you-go” scheme and what the justice department calls a pyramid scheme. It is wrong to forcefully take money from one group of people and bestow it on another group of people. The second reason why I think it is wrong is that it is compulsory. It is wrong for the government to tell me that this is the minimum I have to set aside for a retirement scheme (or insurance for those of you who prefer that term)–a sum that the government will decide who to bestow it on.

Hmmmm…I take your point about a pyramid scheme. It would seem, however, that the only just way to deal with it would be to wean ourselves off of it over several generations: those over 55 are protected at their current level, those 45-55, a lesser amount and personal accounts, 35-45, even less and even larger personal accounts, and so on. I take it, however, that the bulge of the baby boom is what they’re most worried about. I also wonder if we couldn’t continue the current system at a slightly lower level, say 7%, and not exempt any wage earner in America from paying, at least for a time. All sorts of people who draw a paycheck don’t pay into it (including me, right now, as teachers in Nevada don’t pay SS).

 

[jlw]

otm:

Both Christ and St Paul approved of civil governments, and Christ specifically approved of the right of civil government to tax people and distribute that money in whatever fashion they were doing at that time.

So I might be careful calling something immoral that Christ approved of. You may not like it, but immoral is a different issue.

You might also want to read what some of the early Church Fathers had to say about the moral duty of an individual who has more than enough for their basic needs; then compare it with how much you actually give to assist the poor. 10% of your earnings wouldn’t even scratch the surface.

Just to clarify, I don’t really remember Jesus saying something about “the right” of “civil government to tax…and distribute the money”.

He did say “Render unto Caesar that which is Caesar’s, render unto God that which is God’s” or something close to that, right??

Two points: 1) he basically said, “Hey, be law-abiding, pay your taxes”. and 2) he wasn’t exactly saying governement was “the way”, but really as I read it, he was dissing Caesar (gov’t), because he wasn’t afraid to say that the sun didn’t rise and set at Caesar’s call, but GOD’S. Caesar, upon heaing this would have been p.o.'ed that anyone put anything (and certainly not God) before his kingdom.

Am I off-base here?

 

[otm]

There are a lot of presumptions running around loose as to what an “investment” portion of Social Security would look like.

Some are proposing that it be an account that is controlled by the taxpayer - i.e. they can direct the investment of funds. That is highly unlikely, as most people have no idea how to invest. This fact is proved out by studies which show a drop off in investing in a 401K correllative to the number of choices facing the investor; the more choices, the less gets invested.

The likelyhood is that there may be a couple of alternatives, but they would be limited, and would be managed funds such as we find in the mutual fund arena.

There is also a presumption that it would be a fund that would be inheritable. The greater likelyhood is that it would be more like an annuity. You pay in at a certain rate, and the annuity is designed to pay out at the end at a certain rate. The fund, based on life expectancy tables, would pay out als long as you are alive, or you and a spouse at a reduced rate but with a longer life expectation (one spouse living longer than the other).

If you outlive the life expectancy, the fund continudes to pay at the same rate; if you (or you and your spouse) die before expected payout, the fund keeps the difference. This provides for security in old age, doesn’t make anyone rich, but doesn’t make anyone poor, either. It gioves you a guarantee against the fund you set up running out before you do.

Overall gain in the stock market averages a little over 10%, including the Crash and the recessions we have had since then. It beats just about any other form of investment.

The advantage also of an annuity type fund is that it evens out the recessions, so that you are not caught at retirement with a 50% loss due to market fluctuations.

Overall, from a personal responsibility point of view, it makes sense that people fund their own retirement; making it an annuity type of investment removes the risk of running out of money before death; it gives the government less to play with at any given point of surplus; it evenutually resolves the question (however far out the problem is) of the current program bankrupting in the future, and it solves the problem of the market devaluing significantly when the baby boomers retire and start selling their stocks to pay for expenses.

I wish the jerks in Washington could sit down and work out something for everyone’s benefits instead of trying to make political points. But then, I wish I’d win Power Ball, too.

 

[JKirkLVNV]

jlw:

Just to clarify, I don’t really remember Jesus saying something about “the right” of “civil government to tax…and distribute the money”.

He did say “Render unto Caesar that which is Caesar’s, render unto God that which is God’s” or something close to that, right??

Two points: 1) he basically said, “Hey, be law-abiding, pay your taxes”. and 2) he wasn’t exactly saying governement was “the way”, but really as I read it, he was dissing Caesar (gov’t), because he wasn’t afraid to say that the sun didn’t rise and set at Caesar’s call, but GOD’S. Caesar, upon heaing this would have been p.o.'ed that anyone put anything (and certainly not God) before his kingdom.

Am I off-base here?

Yes, I think so. But then I think both fiscal “conservatives” and fiscal “liberals” are both off-base when they quote this particular passage. Libs says,“See, even Jesus supported paying taxes!” Conservs. say,“No, He was very clearly saying business is business and hasn’t anything to do with God!” Christ wasn’t PRIMARILY making a policy statement, IMHO. He was cleverly (if I may deign to describe my Lord and my God, the Second Person of the Trinity, as “clever”) slipping out of the Pharisees’ little trap. They had Him either way. If he said,“It’s wrong to pay taxes,” the Romans would have arrested Him in short order. If he said,“It’s right to pay taxes to Caesar,” he would have lost credibility with a great deal of the Jews. But He didn’t. He slipped through their little trap by saying “Render unto Caesar that which is Caesar’s and unto God that which is God’s.” I suppose you could argue that the passage seems to imply “prioritize your duties and act accordingly.” That would be a good point. I think, however, it was written by the Evangelist to demonstrate that Our Lord could take on all comers…what’s a little verbal puzzle to the One Who contemplated the correct placement of the stars?

 

[otm]

jlw:

Just to clarify, I don’t really remember Jesus saying something about “the right” of “civil government to tax…and distribute the money”.

He did say “Render unto Caesar that which is Caesar’s, render unto God that which is God’s” or something close to that, right??

Two points: 1) he basically said, “Hey, be law-abiding, pay your taxes”. and 2) he wasn’t exactly saying governement was “the way”, but really as I read it, he was dissing Caesar (gov’t), because he wasn’t afraid to say that the sun didn’t rise and set at Caesar’s call, but GOD’S. Caesar, upon heaing this would have been p.o.'ed that anyone put anything (and certainly not God) before his kingdom.

Am I off-base here?

he was put in between two extremes; one set of Jews (the Herodians) supported Rome (we might call them Quislings, now), which was abhorent to any faithful Jew. The other set would oust the government of Rome and return to some form of rule by Jews for Jews (among these were the Zealots). In addition to this mix were the Pharisees and Saducees and scribes, many of whom saw Christ as a threat to their way of life and theology, and were willing to use the political issue of taxation by a foreign government as their means of hanging Christ out to dry, as it were.

His point of not condemning Rome has been understood by the Church to say that taxation is not immoral. He did not make the statement that the government was moral, but He was being pushed to say that paying taxes to the government was immoral, and he said it wasn’t. He wasn’t saying that the government had any higher or lower authority than the Church, but rather a different authority. Effectively, Christ said that it is not immoral for the governement to not be theocratic, and if one is religious, one still owes duties to a civil government (among them, paying taxes). There really was no statement about or intent to diss Caesar.

 

[StJeanneDArc]

JKirkLVNV:

Hmmmm…I take your point about a pyramid scheme. It would seem, however, that the only just way to deal with it would be to wean ourselves off of it over several generations: those over 55 are protected at their current level, those 45-55, a lesser amount and personal accounts, 35-45, even less and even larger personal accounts, and so on. I take it, however, that the bulge of the baby boom is what they’re most worried about. I also wonder if we couldn’t continue the current system at a slightly lower level, say 7%, and not exempt any wage earner in America from paying, at least for a time. All sorts of people who draw a paycheck don’t pay into it (including me, right now, as teachers in Nevada don’t pay SS).

Oh, I absolutely agree that, as a practical matter, we can’t just dump the system tomorrow. The weaning would be necessary to protect those people who, because of the taxes they were forced to pay, couldn’t save as much as they should have and so need SS for retirement or disability.

 

[Bill_A]

Social security will be insolvant by 2012.

Under Bushs plan Social Security will be Disolvant by 2008.

The Scam, The Socialites will put money in the stock market and companies like Computer Science COrporation. Social Security will become a seperate entity, an Insurance company. Sort of like how the post office is privatized.

The wealthy people will all invest in the companys to be invested in and Wallstreet. After the Billions in Government dollars are invested, the wealthy social elite will pull their money and the market will colapse. Social Security will be defunct but the rich will be fantastically wealthier.

The Bush government robs from the poor and gives to the rich. Hes Robin Bush Hood.

 

[StJeanneDArc]

otm:

Both Christ and St Paul approved of civil governments, and Christ specifically approved of the right of civil government to tax people and distribute that money in whatever fashion they were doing at that time.

So I might be careful calling something immoral that Christ approved of. You may not like it, but immoral is a different issue.

You might also want to read what some of the early Church Fathers had to say about the moral duty of an individual who has more than enough for their basic needs; then compare it with how much you actually give to assist the poor. 10% of your earnings wouldn’t even scratch the surface.

I posted a reply to this earlier, but it got lost in the ether, which is probably divine providence keeping me from being uncharitable. Besides, other people have more effectively rebutted your “render unto Ceaser” extrapolation.

Suffice it to say that you don’t know anything about my circumstances.

I also would like to know if you think it’s just to take 12.4% of the income of a working father of 4 and give it to a millionaire.

 

[jlw]

Bill_A:

Social security will be insolvant by 2012.

Under Bushs plan Social Security will be Disolvant by 2008.

The Scam, The Socialites will put money in the stock market and companies like Computer Science COrporation. Social Security will become a seperate entity, an Insurance company. Sort of like how the post office is privatized.

The wealthy people will all invest in the companys to be invested in and Wallstreet. After the Billions in Government dollars are invested, the wealthy social elite will pull their money and the market will colapse. Social Security will be defunct but the rich will be fantastically wealthier.

The Bush government robs from the poor and gives to the rich. Hes Robin Bush Hood.

Your understand of money, investing, and economic is really lacking.

One, It’s NOT the government’s money!!! The “Billions in Government dollars”???

I’m sure you meant to say the “Billions of THE PEOPLE"S MONEY” *that won’t be given to the government, but instend invested in private industry, working hard to create profit, so that their shareholders will reap a return on their investment at a far better clip than the government’s idea of money manmagment. *

Right??

Any questions??

 

[Bill_A]

Yeah since your name calling, You juevinile economic wizard.

1. Were is the government getting the money to invest?
2. If its my money why should you give it to the shareholders?
3. What willt he shareholders do with “our money.”

Quick answer, they will piss it away on cars, houses booze and whores. Just like Enron.

Next question?

 

[jlw]

Bill_A:

Yeah since your name calling, You juevinile economic wizard.

1. Were is the government getting the money to invest?
2. If its my money why should you give it to the shareholders?
3. What willt he shareholders do with “our money.”

Quick answer, they will piss it away on cars, houses booze and whores. Just like Enron.

Next question?

:whacky:

1. the FICA is being taken out of our hard-earned paychecks! That’s where! The governemnt isn’t investing in Bush’s plan, you are. If you are allowed access to JUST 4% of that FICA and put it in a long-term interest bearing account or investment fund, etc. you will have NOT ONLY a traditional SS payout, but a nice WHOLY-OWNED retirement account for you and your family AS WELL.
2. When you invest, John, you BECOME a shareholder, my friend.
3. Create a profit, so that you get a return on your investment.

Bush’s plan is not for day-traders, but LONG-TERM moderate gaining investments!!

listen to the SOTU again to hear what he said…

 

[vern_humphrey]

1. the FICA is being taken out of our hard-earned paychecks! That’s where! The governemnt isn’t investing in Bush’s plan, you are. If you are allowed access to JUST 4% of that FICA and put it in a long-term interest bearing account or investment fund, etc. you will have NOT ONLY a traditional SS payout, but a nice WHOLY-OWNED retirement account for you and your family AS WELL.
2. When you invest, John, you BECOME a shareholder, my friend.
3. Create a profit, so that you get a return on your investment.

Bush’s plan is not for day-traders, but LONG-TERM moderate gaining investments!!

listen to the SOTU again to hear what he said…
[/quote]

Only the economically challenged (I’d say “economically retarded,” but this is a Catholic forum) could think Social Security is a good deal, let alone try to defend it.

The questions you just answered could not have been asked by anyone with an understanding of economics, or of how the market works.

 

[Bill_A]

Good Point. Our Countrys monatary system is based on a fiat Currency. The Value of the nations currencey is held by the banks through the national reserve system. As apposed to the 30 years ago or before. Under section 18 of the constitution by the founding fathers it was to be backed by Gold and silver.

Now that the money is paper money, its value is regulated through the banks by borrowing and spending (and somewhat through taxs.) This will be a tax and spend program, Since the economy is doing terrible, I think it would be a waste to invest it our economy.

Maybe we should invest it in the Chinese Economy? Can I invest my social Security money in COSCO?

 

[JakeW]

Bill_A:

Since the economy is doing terrible, I think it would be a waste to invest it our economy.

WHAT??? Terrible??? Unemployment now at 5.4%, over 2,000,000 non-farm jobs created in USA the past two years, in a GLOBAL ECONOMY???

Heck if it wasn’t for 9/11 (where a trillion dollars left our economy in about two hours), we would have come out of the clinton recession MUCH MUCH quicker with Bushes pro-growth policies than we are now. Perfect?? Of course not! But terrible??

Your party is the party of NO and CAN’T. Change your party’s name from democrats to *defeatist. *

 

[otm]

Bill_A:

Yeah since your name calling, You juevinile economic wizard.

1. Were is the government getting the money to invest?
2. If its my money why should you give it to the shareholders?
3. What willt he shareholders do with “our money.”

Quick answer, they will piss it away on cars, houses booze and whores. Just like Enron.

Next question?

If it is your money, no one else is “giving it to shareholders”. You are becoming a shareholder.

Shareholders don’t “do” anything with your money. You are a shareholder.

When you become a shareholder, you own a part of the company in which you have invested. That company is worth something - just as a business that you started and orperated would be worth something - and that worth is made up of assets (e.g. buildings you own or lease, and equiptment), your inventory, the money that purchasers owe you, and to a small extent what is called “blue sky”, which is the intrinsic value you have built up by your expertise (another way to say it is your company’s good name - “I’ll shop at Bill’s because he stands behind everything he sells”).
When you buy stock, you are not “giving” anything to shareholders. You purchase from some shareholders who are willing to sell their interest in the company; you now own their share in the company along with all the other shareholders who own a part of the company.
In general, if the company makes more money, your shares increase in value. In addition, many companies will send you part of their profits (called dividends).

The overall growth in value of the stock market over it’s lifetime is a little over 10%. If you are purchasing and holding stock for long term, you will see long term growth in that range.

Do an analysis of how much you have paid into Social Security over the life of your earnings, then get the payout figures from Social Security and do the math. Your payments to Social Security are in the range of maybe 1 to 2% earnings on your payments, if that; and if you work the math for your expected lifetime payout to reach zero (nothing to inherit), it probably doesn’t even come up that high.

Your previous post about the rich “pulling their money out of the market” shows no understanding of how the market works; fast selling reduces the price (which the rich figured out long ago) and works to their detriment, not benefit.

Besides, the rich are that way because they invest and hold; what would they do to earn a fair return on their money if they took it out of the market? Put it in their matresses?

Your comment:

Bill_A:

Quick answer, they will piss it away on cars, houses booze and whores. Just like Enron.

is indicative of fear or anger, or both. This is meant to be an intelliget discussion. You are capable of a more intelligent comment than that.

 

[beckers]

I think this might be an interseting tibit about Social Security.

Dems Invoke FDR

Senate Democrats gathered at the Franklin Roosevelt Memorial ([search](javascript:siteSearch(‘Franklin Roosevelt Memorial’)) today to invoke the image of FDR in calling on President Bush to remove private accounts from his Social Security ([search](javascript:siteSearch(‘Social Security’)) proposal. But it turns out that FDR himself planned to include private investment accounts in the Social Security program when he proposed it.

In a written statement to Congress in 1935, Roosevelt said that any Social Security plans should include, “Voluntary contributory annuities, by which individual initiative can increase the annual amounts received in old age,” adding that government funding, "ought to ultimately be supplanted by self-supporting annuity plans."

foxnews.com/story/0,2933,146409,00.html

Seems to me that Dems can yell that they are protecting the ideas of the orignal SS but that according to FDR they have got the wrong idea.

I also read somewhere that Clinton had talked about up to 15% control for workers but that bush is only asking for 4%? Anyone know where one can get this infomation on old policy?

Just my two cents:

Seems to me like the people in Congress don’t think I am smart enough to invest my money. My friends and I know that SS will not be around when we are older (we are all in are mid-20’s). The system has major flaws and if our government can’t get it’s act together to fix it then we might just tank the ecomony in the future. The biggest problem I see to fixing it is older people and the politican’s (please don’t take offense). Older people some how think that it will effect their benefits now but that is not the case AND politician have to placate them because they know that older person are more likely to vote than younger people. We need politcians to step foward and vote on the future of our people not just on getting themselves re-elected. ( i know it’s a nice idea but it will never happen)

God Bless,
Beckers