Almost $18, 000, 000, 000, 000.00 in the hole! A big government joke!

It certainly depends on the company, but the government has proven most unreliable at this. They say it is guaranteed, but then they change the terms. Bernie Madoff would still be running his scheme if he got to force people to pay-into it and could raise the amount they were paying-in as his pyramid got steeper.

My 401k and IRA are my money. There is no one who can go broke to cause me to lose all of them.

Early adopters are the people who took advantage of the program earlier in its existence. The citizens of the US who lived and retired in the 40s, 50s and 60s. They received back many times what they paid-in to SS. For them, it was a very, very good deal. For people who have not yet retired (later adopters), it will be a very, very bad deal.

 

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You didn’t use the words “investment” or “insurance”. But in your post you keep writing about it as if it is an investment and it isn’t. Your obsession with a return indicates you still don’t understand it isn’t and investment. It’s insurance. And rate of return is not a concept one applies to insurance.

You want an investment. And here is why private investment is not practical. One, it is more expensive as everyone would have an ownership stake and everyone would bet a benefit. Two, not everyone makes sufficient money to save for retirement. And three, most people are not qualified by education or temperament to invest their savings. And I’ll give you an example; I have a brother who manages a store. He doesn’t have any formal business education and is a pretty conservative guy. At the lowest point in the market, he withdrew all of his retirement equity investments and put them into cash. He lost 2/3’s of his retirement money. And he wasn’t alone. Investments don’t always go up. They go down too. Back in the 80’s, after graduating from college; I went to work for a Fortune 500 firm. And shortly after being hired my employer came out with a 401K plan. And one of the investment choices was an insurance company offering a 16% guaranteed return. A lot of folks in my office thought it was a great deal. So they signed up for it. A year down the road, that insurance company went bankrupt. And unfortunately those who signed up for that guaranteed investment lost most of their guaranteed 401k investment.

That is all well and good. I think most people share that goal. But unfortunately and for many reasons, that is just not possible for many if not most people. Shit happens. What would happen if your parents or one of your children fell victim to a debilitating disease? Could you support them and still save for your retirement? There are 315 million people in the US and they are not all you or your parents. They have different circumstances, different backgrounds, different resources and different abilities. I’m fortunate enough to have been able to earn and save enough money to retire early at age 57. My children are on the same track. But that is not the case for everyone. That is why we have an insurance program versus an investment program. And the program is stable. There is nothing unstable about it. There is plenty of money to support the program. Tax rates for the middle class have gone up and tax rates for the very wealthy have gone down. Correcting the tax inequality situation would fund Medicare and Social Security into perpetuity. Asking people like Romney to pay the same percentage of his income in income and payroll taxes as we expect of most Americans would fund Medicare and Social Security into perpetuity.

 

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Yes but that was a private company, and as I said when he went broke everybody did. By law the government is forced to fill its obligations, unless congress (the people's representatives) shut down the government or decide to default on their promises.

I must admit I have not researched the legal obligations involved here, but if your money goes to privately held companies, it is at risk, but I believe you do not pay taxes on those investments until you actually begin to draw on it (probably because it is at risk).

Actually chances are that later retirees will receive back more in SS and Medicare than the earlier retirees. With the advancement in Medicine the average lifespan of people is still rising.

I know there will come a point where adjustments will have to be made, but a great part of that will depend on private industry (the job creators) to actually create jobs, so that SS donation as well as general state and federal revenues will rise.

You know, when we elect people like Michelle Bachman to Congress, it is no wonder that Congress is defaulting on it obligations.

http://thinkprogress.org/politics/2011/06/16/246618/bachmann-craziest-quotes/

 

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You don't understand: the government has restructured SS many, many times already and most of those restructurings have made the deal worse. Don't feel bad: most people have no idea about that.

The risk in my 401k is that every one of hundreds of the biggest companies in the US simultaneously become worthless. That's basically a nonexistent risk.

Again, you don't understand: what I'm saying has already happened. The average citizen who retired in 1960 got back about 6x what he paid-in to SS. The average retiree from 2010 is expected to get back less than he paid-in, assuming the structure doesn't get any worse, which it will have to.

 

Return on investment is a concept that a smart person applies to every major purchase he ever makes. Only a complete idiot buys things without considering if what he's getting is worth what he paid for it.

Investment (private or otherwise) exists already and does much better than SS does.

That doesn't make any sense. Do you mean there would be more money in the system? Sure. But people would pay-in less than they pay in SS taxes and get more back.

That's false. Everyone who is employed pays-in to social security.

Agreed; so there should be limits on how they can invest. But even with significant freedom, it would be difficult for even an unlucky idiot to do worse than what SS is providing.

They have insurance for that. Two completely separate things.

So what? That doesn't make SS a good program or mean that a better one couldn't be developed.

I'm not sure how you'd define stable, but I'd define stable as having a consistent tax rate and benefit rate so it would be a promise I could rely on. Heck, you are the one who is characterizing it as a safety-net. But in order to be a safety-net it needs to be reliable and it isn't.

Nonsense. The SS tax rate is flat; tax rates have gone up for everyone.

Continuing a bad program in its current bad form is not a good thing.

Screwing Romney would not fix the problem I described above and you acknowledged: early adopters got back 6x what they paid-in to SS and people who just retired will get back less.

 

A little info on "the people's representatives" and why election funding should be changed.

I don't expect a millionaire to vote for higher taxes on millionaires. But I would not be surprised if they voted for higher taxes on the middle class and lower benefits for the poor.

 

Joe, I want you to stop and think carefully for a minute - because you normally don't.

Can you do that this one time?


OK? Good - that's the spirit

Please Register or Log in to view the hidden image!

Here's a FACT: The Federal Reserve controls the price of money through interest rates. It affects all markets because all markets use USD inside the USA. Now, I stated: 50 years ago we were LESS productive, yet, it only took a single person working to raise a middle class family of five. Now, 50 years later, we are MORE productive, yet it takes both parents working and they can barely raise a family of two. You state this is because of "Free Markets" and that all the jobs are going overseas. THIS MAKES NO SENSE.

Let's suppose there were a machine and that this new machine could produce all the cheap amenities that Americans need such as clothing, shoes, washers, dryers, televisions, phones. So, your argument is that if Americans had access to this machine - they'd be poorer. Do you see how nonsensical this is? It's like arguing that a washing machine makes Americans poorer because now there are no jobs washing laundry by hand. Or a tractor makes Americans poorer because now there's no need for thousands of people to dig holes by hand. THIS MAKES NO SENSE. As Americans become MORE productive their lives should be MORE prosperous. YET, in the land of the USSA. Yet, that's not the case. We are becoming LESS prosperous.

Why?

Well, let's stop and think about the $8.5 TRILLION dollars wasted losing two more wars - the two in the middle east. I don't recall a War tax? Just how are these Wars being paid for Joe? Who's paying for America to fights it's idiotic wars? The Federal Reserve.

Let's stop and think about the $4 TRILLION the Federal Reserve created to bail out the top 1% and inflate the stock market. The top 1% own 35% of all privately held stock, 64.4% of financial securities, and 62.4% of business equity. The top 10% own between 81 - 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate.


The Federal Reserve is destroying this nation. Take a good look around Princess - does it look like jobs are being created in hyper-regulated fascistic USSA? Does it? The Fed will be lucky to make it another 20 years and if the USSA continues on this path, I doubt there will BE a USA in 40 years. Why would there be? Why on earth would anyone WANT to be an American? It's be much better to form a confederation of true free-market States. Why should some tiny smear of shit called D.C. rule over the 50 States? I see no benefit at all. Just one big sucking sound as our children's future prosperity is auctioned off to the top 1% via New York. Well New York - you like D.C. so much - keep it.

END INCOME TAX
END THE FED

This will go a LONG ways to solving problems in the USSA.

 

A little alarmist, I'd say. Is SS broke now? Is Medicare broke now? I know that our climate is broke now, but no one talks about that. I also know that our Congress is broken. But that can be fixed by an informed citizenry.

 

I believe your math is flawed.
The SS or Medicare structure is not flawed, but the Economy (revenue) that is worse. And that responsibility falls on Private Industry (the job creators), not Government.

btw. SS recipients continue to pay into Medicare. It's deducted from your SS check.

 

I didn't post math, I posted facts. Everyone who retired in 1960 is already dead and everyone who retired in 2010 has already paid-in what they are going to pay in. Those facts are what they are. The pay-out for those who retired in 2010 should be set, but it may change -- but even using today's promise, most of those people still won't get back what they paid-in. Look at the data yourself if you don't believe me:
http://www.urban.org/UploadedPDF/41...dicare-Taxes-and-Benefits-Over-a-Lifetime.pdf

Being broke isn't the issue. That's what annoys me so much on this issue; the media and politicians -- and particularly, liberals, talk about that date as if it is important, but it isn't: SS failed long ago.

One key problem for ponzi schemes is that you can't alter the pay-in/pay-out structure or people will realize that they are in a ponzi scheme. The government isn't affected by that since they get to force people to contribute, so they have altered the scheme numerous times to avoid going broke, making the deal worse and worse for those who are lower in the pyramid.

 

Nice chart but apparently you did not pay attention to what I posted. Let me repeat,

It seems we are in agreement on that point, no?

And IF after all the government tax cuts, business stimuli, and deregulations, the job creators still do not create jobs, but continue to make profits on exchanging money, they will just have to be taxed higher and their perks taken away, which can then be returned to the SS "lock box" from which most of that money was stolen (IOUs) by Congress in the first place. That should help a little, maybe a lot.

http://www.breitbart.com/Big-Govern...-Be-Insolvent-by-2026-Social-Security-by-2033

Retirement age 67. Average life expectancy in US 77.5 - 80 (a difference of 10.5 years for Medicare and 13 years for SS) which means all people retiring today will be covered and those below that age (still working) will still be contributing to the SS/Medicare fund.

Your Math is still wrong.

Medicare insolvency > 12 years, which only means that cut backs MUST be made, but the program needs NOT be eliminated.
SS insolvency > 19 years, which means that cut backs Must be made, but the program needs NOT be eliminated.

There is plenty of time to make a range of adjustments, such as means testing (top20%), IOW if you do not need Social Security because you are already financially secure. Does the company that insures your car refund the premiums you have made for 40 years but never needed to use that insurance? SS was intended to provide a safety net for those who after years of contributing into the system ended up poor and in need of a little financial security, mabe to pay the rent or buy some groceries?

That's what annoys me so much; the right wing media and politicians -- and particularly misinformed conservatives talk about that date as if everything stops, but it won't.

SS never failed, it was robbed by Congress and Congress (as the people's representatives) have an obligation of "due dilligence" to the people they represent. Don't blame the Government, it is not a person, in spite of the recent SCOTUS "citizen's" ruling. Government provides services that cannot or will not be provided by private for-profit enterprise, yet MUST be performed for the public good.

IMO, one could make a case that the obligation to oversee "Interstate Commerce" requires the Federal government to maintain Interstate Highways and Bridges (interstate commerce infrastructure). Which would be very handy right now to stimulate the economy but has been stonewalled by the current dysfunctional Congress

There is plenty of time to get it right. But, for the last time, let me impress on you that the responsibility does not lie with government, it lies with CONGRESS. and only CONGRESS.

 

This concerns me more,

http://engineering.columbia.edu/will-we-run-out-fresh-water-21st-century

But of course that is just another Liberal alarmist notion.

 

No you didn’t post facts, you posted deadhead ideology. There is a difference.

No that is ideological nonsense. People are still getting their checks and their healthcare. And if the wealthiest among us pay back the 2.5 trillion in tax cuts they received from the middle classes, these programs are solvent for many years to come.

LOL, this is what bothers me about the neoconservatives is that for them facts are irrelevant, reason is irrelevant, and mindless ideology triumphs over everything. You have been told several times now that what makes a Ponzi scheme a Ponzi scheme is fraud and there is no fraud involved with Social Security or Medicare. Instead we have this mindless partisan demagoguery from the ditto head faction.

 

No, absolutely not. I guess I shouldn't have ignored that because besides being very wrong it misses the point, but...

Unemployment is only about 7%; lowering it to 5% will only add a few million more jobs. No amount of job creation can suddenly cause there to be a billion more people working in the US, to enable re-structuring SS in a way similar to how it was started. I don't think you are grasping just how big the difference is between the promised deals for SS were from one generation to the next. I'll have to keep posting the numbers:


-The average person who retired in 1960 got back 6.4x what he put in to SS.
-The average person who retired in 1980 got back 2.1X what he put into SS.
-The average person who retired in 2010 is promised to get back 0.9x what he put into SS.

(FYI, these numbers are off the first table; averages for an average single male wage-earner. The ratios for the other demographics are different, but the downward trajectory is the same.)

Again, the first two of these already happened. It is a matter of historical fact that a person who retired in 1960 did 3x better through SS than someone who retired in 1980. And while the third hasn't happened yet, it can't get better because that guy has already finished paying-in to SS and the majority of the bad deal is on the pay-in side.

Again, again: the people who retired in 1960 are all already dead. Their deal was what it was. Almost everyone who retired in 1980 is also already dead. Their deal was what it was. Those deals can't change - they are long in the past. And for someone who retired in 2010, their deal can only get worse; the deal of SS has never in its history gotten better. It has always gotten worse from one generation to the next.

Obviously, a lot of people live into their 90s so you should recognize there is something wrong with that. Google "life expectancy at retirement age" to get the correct value.

Car insurance is ongoing, so yes, they are continuously adjusting premiums up or down based on risk. Same goes for life insurance: I get a rebate check every year from my life insurance company because I don't smoke.

No it wasn't. SS was intended to be the primary savings (replacement for personal savings) for retirement for the majority of the population. That's why the pay is tied to your working income. If it was intended soley to keep people out of poverty after they retired, it would be a much smaller program, paying-out much less money and costing much less. If that's what you want, I'd be in favor of it!

 

Joe: I'm through arguing about definitions until you start discussing the facts. So please respond to the facts in the post above, which I have bolded to make them harder for you to keep ignoring.

I answered that, but lets turn it around and look at it from the point of view of the elders:

Imagine if FDR had been up-front and/or known how Social Security would turn out when it was first passed. If he had said at the time (1935):
"You will reap a huge windfall from Social Security, receiving back in benefits six times what you paid-in, which is about equal to a good retirement investment fund, which this will replace. Since we won't be investing this money but instead will be spending it, this windfall of yours will have to be paid-for by partly by your children. We're going to increase their taxes so in the end they'll get back only what they pay-in. And for your grandchildren, we'll have to increase taxes even more, ensuring they get back less than they paid-in."

Would a responsible elder be ok with that? Are/were they really that greedy that they would drag-down the standard of living of their children and grandchildren?

 

IMO, parsing quotes out of context is dishonest debating. Let me repeat it for the third time, so that others will know how your mind works.

Has anyone NOT received their SS check yet?

Here are the details: http://longevity.about.com/od/healthyagingandlongevity/a/retirement.htm

Unless you have an accident and NEED to have your car fixed in the car hospital, after which your premiums will increase.

Do you get back all of your premiums? Take a guess, what percent of your total premiums do you get back. (0.9 or 90%)?

You consider 12,000 p/yr (after Medicare deductions) a year a big payout? I call that poverty.

http://www.bargaineering.com/articles/working-americans-have-almost-no-retirement-savings.html

And how do you propose to solve this minor misunderstanding between us? Darwinian Natural Selection? No money, you die!

 

As with joe, I invite you to discuss my point instead of continuing to ignore it. I bolded the stats to make them harder to ignore (though not apparently all that hard).

If the numbers is in that link, I'm not seeing it. It certainly isn't in the quote. Are you being purposely evasive/didn't you google what I told you to google? I guess I need to spoon-feed you: the number you are looking for is 84.

Yes; you didn't disagree with me...but it sounds like you want to!

Of course not. I think you've lost track of the point you were trying [failing] to make though...

I'm not sure where you got that number or what your point is. Again, my point was that SS provides income well above the poverty line currently. Your suggestion would actually reduce SS payouts. But perhaps you should try again to make your point more clear...

 

Russ: You see to understand that Social Security is not insurance. The methodology is not close to the functionality of an insurance company.

JoPistole will never understand the difference between insurance & the government Social Security system which has insurance in the name of the enabling legislation & elsewhere in government verbiage.

Joe: From your Post # 26

If you worked for one, you must have been a salesman, file clerk, or office manager.

You were not an actuary.

I was an actuarial trainee for circa 8 months & passed the first 3 exams prior to quitting due to realizing that working for an insurance company was boring beyond belief although actuaries are very well paid.

The above formula posted by you is essentially the formula for a normal business if you change the terms a bit. The true actuarial insurance formula is something like the following (paraphrase):

Your considering Social Security to be an insurance program indicates that you do not understand the methodology of insurance companies.

 

Why has some Moderator not moved this Thread to a more pertinent forum?

Is does not belong in Technology ---->> Intelligence & machines

 

Smart people can understand the difference between insurance and investment. Only criminals and idiots purchase insurance with a return on investment in mind. Insurance is not an investment, it is an expense just like any of other expense people have every day. When people go to the grocery store they don’t do a return on investment analysis before they purchase groceries.

You are obfuscating or reflecting an intellectual deficit when you bring in the value argument and try to conflate it with the return on investment argument. The two are different concepts. We purchase groceries, gasoline and insurance because they have value. But you cannot associate a meaningful return on investment (ROI) with those purchases. They are expenses, not investments. You my friend don’t seem to understand the difference between and investment and an expense.

You my friend don’t seem to understand something every first year business and finance student is taught, it’s the concept of risk. Return and risk are indelibly linked. Yeah you can get higher returns but you also take on higher risk. And we are talking about retirement funds here. U.S. government bonds have for many decades in finance considered to be riskless. The “risk free rate” is considered to be the US Treasury rate. The US government gives the lowest rate, but it also gives investors the lowest risk.

On the contrary, it makes perfect sense; perhaps this gets back to your apparent inability to wrap your head around the concept of insurance. In an insurance based system many people pay into it but only those who incur a loss receive a benefit. Under your investment scheme, everyone pays in and everyone gets a benefit. That makes your investment based scheme more expensive.

Unfortunately for you it is not. Everyone who is employed may pay in to Social Security and Medicare, but not everyone works and not everyone pays the same amount or even sufficient amounts to cover the benefits they receive. And not everyone earns enough to save enough for retirement.

If everyone earned 30K per year, which they don’t, and if they invested their Social Security and Medicare taxes (employer and employee portions) in a risk free investment with an average rate of return of about 3% they would have $417k at age 65. That isn’t enough for them to pay for their healthcare expenses and living expenses for the remainder of their lives. That won’t go very far should they wind up in a hospital or in hospice care or in a nursing home. What happens when their savings run out? Are you advocating we cast them into the streets? If they are not wealthy enough are you advocating leaving them homeless and on the streets?

And not everyone lives to 65. Contrary to popular opinion, many people die young and leave dependents. Many people are physically and mentally handicapped and are not employed and therefore don’t pay much into the system.

Unfortunately your denial is all too reflective of the simplistic thinking we have and continue to see from the American right wing.

Yeah tell that to all the Enron employees who lost their retirement savings when Enron went under. And in the case of these employees they were buying into a guaranteed investment from a credible employer, investment house and insurance company.

And again, it isn’t an investment. It is insurance.

LOL, yeah they do and it’s called Social Security and Medicare. Not all people are able to save enough money throughout their careers. They get laid off, they get ill and not everyone has the same education, the same opportunities, and people die and get diseased and unable to work. That is why they need Medicare and Social Security. And you didn’t answer my question, what would happen if someone in your family became ill and disabled? Would you be able to support them and still save for retirement? Could you pay $5k a month to keep your parent in nursing home and still have enough money to save for retirement? I’ll give you a personal example. I had an aunt who adopted a baby girl. All was fine until her daughter became an adolescent. Since then she has been bipolar and has spent the majority of her life and will spend the remainder of her life in nursing homes. There are drug addicts, alcoholics and a host of other debilitating diseases out there that debilitate people making it impossible for them to be gainfully employed for any period of time. And hold on to your hat for this revelation, not everyone is responsible. As I said in my previous post, not everyone has the same advantages and disadvantages or the same talents and abilities. Not everyone is fiscally responsible and we don’t have to look far to see examples of that, the fiscal profligacy of the George Junior administration and his fellow Republicans was virtually unprecedented in American history. That is why we have insurance. That is why we have Medicare and Social Security.

You seem to have a very simplistic and naïve understanding of the world around you friend.

No but it doesn’t make it a bad one either. If you have a better idea, make a convincing argument. But you seem to think everyone is like you and your parents and that just isn’t the case. You need to have a solution other than “let them eat cake”.

I use the word definitions found in our dictionaries;

“in a good state or condition that is not easily changed or likely to change” – Merriam-Webster

Social Security is almost 79 years and it has never defaulted. I’d say that is pretty stable, using the traditional meaning of the word. Nor is it likely to default in the near future. Do you really think Congress who cannot sustain a limited government shutdown of more than 16 days and which didn’t impair Medicare and Social Security is really capable of defunding Medicare and Social Security benefits. Even those radical right wing whacko Tea Partiers don’t want their Social Security and Medicare benefits cut. There is certainly plenty of room to increase taxes on the wealthy to fund Social Security.

As I have said repeatedly, the debate now is wither the wealthy want to repay the 2.5 trillion dollars they have received in tax cuts over the course of the last 30 years.

Just how is it that Medicare and Social Security tax rates and benefits are not stable? They change much less frequently than my private insurance rates. My health insurance premiums change annually. And my property and liability insurance rates change every few years. And my insurer usually changes the terms of my liability and property insurance change once every five years or so. That is far more frequently than Medicare or Social Security changes.

The bottom line here, using your definition, is that your assertion that Social Security and Medicare are “unreliable” is just not rooted in fact. It is rooted in mindless partisan demagoguery which partisans repeat endlessly to themselves.

I take it your memory is not so good. Unfortunately for you it is not nonsense, it is fact. I suggest you revisit post number 11 in this thread and pay attention to the Wiki reference.

http://www.sciforums.com/showthread...rnment-joke!&p=3150738&viewfull=1#post3150738

No one is arguing continuing a bad program. Your problem is you cannot make a rational argument that Medicare and Social Security are bad programs or suggest something that would be better. Moreover, you don’t appear to understand what is needed and what Social Security and Medicare do. And you seem to think everyone is like you and your parents and they are not.

LOL, no one is talking about screwing Romney. What I said and will repeat again for your edification, is that Romney and folks like him should not pay less of their income in taxes than your average worker bee as is the case today. As has been repeatedly told to you, the average worker bee pays 25% or more of his/her income in taxes, Romney and those like him pay zero to 13% of their income in taxes. Tax rates for the wealthiest Americans have not been so low since The Great Depression. So in your world it is ok to screw the middle class?