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  #51  
Old 11-13-2011, 09:52 PM
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I know that and you know that but my dear paternal grandparents went to their graves convinced that their SS payments were coming out of a little bank account in Washington, DC with their names on it. It didn't help that for years, the payroll deduction was labeled "F.I.C.A.", or "Federal Insurance Contributions Act".

That facade kinda crumpled when there were threats that SS payments would stop if the debt ceiling wasn't raised last August. If SS is adequately funded by payroll taxes, why was there anxiety about makiing the payments? You can either claim that it's adequately funded or admit that if an insurer funded annuities this way it would be put out of business by regulators.
It was just political theater, duh. There was plenty in total taxes to cover SocSec payments and servicing interest (amongst other things). Even if there wasn't enough in FICA.

At the time it was noted that it wasn't clear that Treasury knew how not to make payments, given all their automatic systems. Some talk of "it would take several months to change their systems". A similar issue came up when Schwarzeneggar tried to threaten to cut state employees salaries... and the claim was made that their system only allowed increases, not decreases, in wages (ain't that convenient).

Social Security is easily fixed by ratcheting down the value of the benefit. I agree with that. But I don't think people are prepared to see how little that money will be. It already is rather low.
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  #52  
Old 11-13-2011, 11:35 PM
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Social Security is easily fixed by ratcheting down the value of the benefit. I agree with that. But I don't think people are prepared to see how little that money will be. It already is rather low.
Yup! Social Security is fixed by robbing from future generations to pay the current generation. Or is that the problem?
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  #53  
Old 11-14-2011, 05:33 AM
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Please, please, the correct terminology is "wealth transfer".

Someone is not up on his Orwell.
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  #54  
Old 11-14-2011, 06:41 AM
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Originally Posted by Salzmann View Post
That facade kinda crumpled when there were threats that SS payments would stop if the debt ceiling wasn't raised last August. If SS is adequately funded by payroll taxes, why was there anxiety about making the payments? You can either claim that it's adequately funded or admit that if an insurer funded annuities this way it would be put out of business by regulators.
Actually, what happened last August was maybe the third or fourth such serious threat in the last 30 or so years. Sometimes, the argument is that money can't be spent on administration, so the checks can't go out. But that was not the argument that Obama made. Instead, he explicitly threatened not to send checks out in order to get a little debt-ceiling headroom. That had nothing at all to do with Social Security's financial condition.

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  #55  
Old 11-14-2011, 07:10 AM
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Social Security was secured for now thanks in part to government policies that allowed National debt to go from 35% of GDP to 100% GDP. It will be secure 30 years from now as long as National debt goes from 100% GDP to 165% GDP.

Debt is good as long as you can pass the buck to the next generation and you're dead by the time it has to be paid back.
Ah yes. The debt ceiling. We can't forget that. But to put it in non-economic terms, imagine coming home to find that the sewers have backed up and your house is full of sh1t to the ceiling. Now, do you pump out the sh1t or do you raise the ceiling?
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  #56  
Old 11-14-2011, 06:28 PM
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Ah yes. The debt ceiling. We can't forget that. But to put it in non-economic terms, imagine coming home to find that the sewers have backed up and your house is full of sh1t to the ceiling. Now, do you pump out the sh1t or do you raise the ceiling?
There is no place to pump it out. But your analogy makes for good drama.
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  #57  
Old 11-15-2011, 05:54 PM
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I don't plan to retire. I might change career direction, but not really retire. I'll collect pensions from jobs I've vested in.
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  #58  
Old 12-05-2011, 05:33 PM
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However, they have all been shot down.

The government wouldn't invest the money for them. Instead, there would be a system where individuals would make the investment decisions on their own.

If individuals are given the opportunity to fund their own requirement and a system to do so but blow it, they have to bear the consequences and rely on the generosity of others. They're entitled to nothing.

I'd like to have a system that places greater weight on personal responsibility and generosity. I'm sure many people would meet the challenge and come through.
Years like 2008 utterly destroy a person's retirement savings whether invested in bonds or stocks. While my investment skills aren't stellar, they are above average from what I've seen among my coworkers, friends, family and neighbors.

Market losses in 2008 took me from being able to retire in the 67-69 age range to the "you'll be dead before you can afford to retire" bracket. Years where you lose 50% of your savings are disasters that one cannot plan for, nor defend against. I'm currently making the maximum (including catch up) contributions to both an IRA and 401k.

PBGC took over my GM pension, so I'll start getting a pittance from them around age 65, and with the real inflation rate we're really seeing, that pension will probably get me one or 2 happy meals per month.
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  #59  
Old 12-05-2011, 06:28 PM
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Years where you lose 50% of your savings are disasters that one cannot plan for, nor defend against.
That is where one's family/friends, namely kids, come in to play.
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  #60  
Old 12-06-2011, 12:25 AM
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That is where one's family/friends, namely kids, come in to play.
So your position is: let the younger generation bear the burden. And that differs from SS now in what way?
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