the social security cap.

[mopinko]

ok people. this is a pet peeve of mine. lifting the cap is NOT the answer. of course, it's a made up crisis anyway, but still....

let me see if i can get people to look at this in a different light-
SS is not welfare, fica payments are not tax. it is a baseline disability, survivors, and retirement INSURANCE program.
let's try a hypothetical scenario-
lets say that there is a general consensus that low income people are not able to buy appropriate insurance on their homes. since this is often the only investment that these people have, losing it will leave them destitute, and a burden on the social safety net. progressive legislators decide to address the problem with a low cost, basic, no frills, government administered insurance program.
the program will be funded in part from premiums of home owners, as well as contributions from mortgage lenders.
now. if you only enroll low income people in this program, first, you will have a small pool of money, probably not enough to float the program. also, there is no way to know who will end up poor at a later date, and need the program. so, all homeowners must buy into the program.
now, this is meant to be a baseline. not to replace all other insurance, not cover every dime of losses. and it is insurance, not welfare. the payout reflects the pay in. nobody gets rich, nobody gets screwed.
so, if you base the premiums on the value of the house, the millionaire pays a huge chunk to insure his mansion. then what? then this basic pool is on the hook for a payout on giant mansions, and rich people end up sucking up disproportionate amounts of the pool.
so what do you do to prevent this? you limit participation to a modest payout. there is only one way to do this fairly, and that is to limit premiums to a modest amount. and that is what the purpose of the cap is. if you want high income wage earners to pay on every dime, what are you going to say when they retire, and your mamma gets $1000/mo. and old man rockefellar gets a check for $25,000?

if you want to turn it into a welfare program, that is a different issue all together. then you can have a progressive tax to fund it, and a means test to pay it out. but that is not what it is, not what is was meant to be, and imho, not what is should be allowed to become. it is insurance, something i earned and own. not a gift.
fwiw, they raise the cap every year any way. that is why it is still in business. 10 years ago, the cap was $55,000. now it is $90,000. i am not an actuary, i do not know what this has done to the liabilities of the system. but if 2+2 still = 4, in the end, i don't think much is gained.

IT AIN'T BROKE, SO BE CAREFUL HOW YOU FIX IT!!!

[Name removed]

1. Deleted message

Message removed by moderator. Click here to review the message board rules.

[mopinko]

3. but it is insurance.

and i was just using the homeowners thing as a hypthotical. in this case the government gets to say you have to buy in because if you don't, you end up dependant on the taxpayers.
this is the whole point that i am trying to make. it is insurance. it is not welfare. you can be happy or not. but it is what it is.
otherwise, you are not really entitled to it. you don't own it.
now you do. they can't just take it away, any more than state farm can take your checks and then stiff you when your house burns.

[eg101]

2. remove the cap, use means testing, and lower retirement age to 55

rich people should not get any SS.

You wrote:"if you want high income wage earners to pay on every dime"

Yes, I do.


You wrote: "what are you going to say when they retire, and your mamma gets $1000/mo. and old man rockefellar gets a check for $25,000?"

I am gonna say: "Fuck off, Rockefeller!".


You wrote:"if you want to turn it into a welfare program,"

No, I wanna turn it into a citizenship dividend program and lower the retirement age to 55.


You wrote: "that is a different issue all together."

Yeah, it's a PROGRESSIVE issue.

You wrote: "then you can have a progressive tax to fund it,"

Sounds good to me!


You wrote: "and a means test to pay it out."

Yep!

You wrote: "but that is not what it is"

Not yet.


You wrote: "not what is was meant to be, and imho, not what is should be allowed to become. "

That is YOUR opinion.

You wrote: "it is insurance, something i earned and own. not a gift."

You need to pay rent to the landlord. The Constitution says "for the gneral welfare...."

[mopinko]

4. i don't want a handout.

i want to pay my share, hold my head up, and never have to go begging to congress. if you means test it, you change it.
i don't want to live in a welfare state, and neither do most of the people in this country. i have no problem helping those who cannot help themselves. i have a problem helping everyone, whether they can help themsleves or not. there are other programs, on a federal, state, and even local level to help those in need. not everything that he government does needs to be structured as a handout.
i'm not sure what your last sentence means. but i pay the landlord plenty, and most people over the cap already do as well.
i don't want a handout. but i think pooling money with my fellow taxpayers just in case is sensible and sound.

[hfojvt]

8. there is no way we are getting a handout

In the first place, what you have is semantics. The difference between a tax and an insurance plan which I am forced to purchase is kinda moot. But for the record, I hate insurance far more than I hate taxes.
Secondly, it started out as a welfare program with elderly people getting far more than they paid into it. Then the demographics changed and my g-g-generation is going to get far less than we paid into it, because we are not only paying for our own retirement, we are paying for the retirement of "the greatest generation" too. My FICA taxes are going out as checks to many people who are far wealthier than I am, and who are far wealthier than I will ever be.
I have to say that I support means-testing as well. The argument has been made that if we have means-testing, then rich people and politicians will try to kill it. That argument is hollow now because the rich bastards and their political shills are trying to kill it right now anyway. I would love to see it funded and paid far more progressively, but a simple fix to our current "crisis" is to raise the tax cap without raising the benefits cap.

[mopinko]

13. no, the difference is not moot.

so, if you hate insurance, do you drive a car? have kids? own a home?
are they insured? when disaster strikes, what will you do? depend on the tax payers to bail you out? they make everyone buy in because eventually we will all either get old, disabled or die.
the governed consented when it was instituted.
and it didn't "start out as welfare" yes, the first claimants did not pay in. but fdr could have justified a hand out to these people. could have taxed people and said tough to the people who paid it. but he didn't. he made a multi-generational pact. he gave everyone a piece of it that they own. he promised that if you help them now, someone else will help you later. your benefits BELONG TO YOU! your mother's benefits BELONG to her.
but it won't be insurance any more as soon as you break the link between amount paid in and amount paid out as the ONLY consideration. as soon as you start telling people, sorry, you are too rich to get what you own returned to you, then it is welfare.
and ya know, you are not taking about just rockefellers here. you are talking about the upper middle class. i am in that bracket. i am not rich. i am raising 5 kids. i drive a 12 year old chevy truck. i buy my clothes at the thrift shop. if it was part of my regular taxes, i would have a lot of things i would be entitled to deduct from it.


it is hard to have this debate at a time when we cannot trust our government. but why is ss the "third rail"? because the PEOPLE OWN IT! and yes, even gen x,y, and z own theirs. you may need to fight for it, and keep their fingers off it. but you know what? if you don't stick up for mine, why should i stick up for yours?

[ProfessorGAC]

14. One Logic Problem, Mo

If it's an insurance program, then there are some criteria set for collecting. I can't take a term life insurance policy out and then ask for my money back. The policy intent is for me to have money for my family if i DIE! No death, no collections.

So, if it's an insurance policy, then only those who are meet the criteria collect. Rockefeller wouldn't meet the criteria, because despite his paying into the system, he has no need and no reason to fall back on the financial insurance.

So, if it's really an insurance system, (and i don't disagree) raising of the cap doesn't violate the premise. Everyone pays in, and those that need to collect on it get money back. Means testing just becomes part of the criteria set.

I'm not sure that i would agree to the "every dime" concept. But, i do think the $89k is awfully low. So, raising the cap doesn't violate the concept of insurance in any way.
The Professor

[mopinko]

15. huh?

there is no means test at state farm. if my house burns, i get the check. there is no way in hell anyone in their right mind would write a check to state farm every month just to be told when they had a claim, 'sorry you don't really need this check.'
and raising the cap is really not the debate. they raise it every year, and you can bet that it will be a part of the plan to give it a big bump. but raising the cap also raises the benefit that i am eventually entitled to. no real net gain to the system.
it's doing away with the cap that a lot of people are talking about, and it will fundamentally alter the program.

[ProfessorGAC]

17. Yes There Is, Mo

State Farm will investigate a house fire. If you burned it down, no insurance. If you let your premium lapse, it doesn't matter that you paid for 15 years already. No check! Carry insurance for 15 years. Forget to pay in the 16th year. Tough luck.

There are criteria that must be satisfied for the insurance to be allowed. Same here.

The cap doesn't go up every year. It's been the same for many years, when adjusted for inflation. So, it's really just the same amount of money, relative to the change in monetary value.

I'm talking about a radical shifting of the cap to about $200k. Anybody making that much money (and i'm not ridiculously far from that) can afford the other 6% on the difference between about 90k and 200k. (I know i could afford it.) Then, the cap differential would adjust the payout, up to the 200k pay-in, less a means test.

I didn't say State Farm had a means test. I said they have criteria that MUST be met for getting the money back from the premiums paid in. There is no reason why an insurance plan like SS couldn't have a means test as part of the its criteria.

The Professor

[mopinko]

18. i would sure never buy such a policy

and would sure never sit still for paying for it for someone else out of my money. few americans would.
there are plenty of similar caveats on ss to 'burn your house don't, don't get a check' you have to meet strict criteria for disability payments. you have to work a certain number of years.
but you could pay into a retirement annuity for many years, and if you stop paying at 50, you still get your checks when you retire.
there are limits to the analogy, obviously.
sorry, if i make payments all my life, and you change the program to say i don't need it and can't have it, it is not insurance any more. it's welfare. and it's about whether or not people really own it, or if it is at the whim of the politicians.
and the increase in the cap has exceeded inflation by a good chunk.

[ProfessorGAC]

20. Just A Difference In Definition

I think we're actually on the same side of this. We seem a bit blinded by semantics. I think if we could agree on definitions, we would find we disagree about little else.

I looked up the rate of cap increase since 1988. It is on a parallel line with the CPI. Sorry.

Nice chatting with you.
The Professor

[Salviati]

7. "I am gonna say: "Fuck off, Rockefeller!"."

That's my new motto!

No sympathy for Billionaires!

[hfojvt]

9. Except that Rockefeller

is a democratic Senator from West Virginia
http://bioguide.congress.gov/biosearch/biosearch1.asp
and many of our other Democratic senators are also very wealthy - Kennedy, Kerry, Kohl, and Dayton for example, except for Kohl, some of the most liberal Senators we have.

[Salviati]

25. Right, and they deal with their wealth and responsiblity to society well

It's those damn whiney wealthy folks that ask us to feel sympathy for them because we ask them to give back to society that I can't stand. I did not mean to single out the Rockefellers as an example of this group, but more just as a generic wealthy family, perhaps it would be more appropriate as:

"Fuck off, Waltons!"

[mopinko]

5. ok, i gotta get some sleep.

i'll fend off your attacks in the morning.

but, i do want to know if my analogy holds any water, or gives any insight into the debate.

[high density]

6. Most right-wingers see Social Security as "welfare" already

In the "ownership society" we aren't going to have even the basic safety nets available to people.

[mopinko]

12. most lefties do too

or they would understand what the program is for/about and people would stop this shit.
i am finding the conversations i am having about this frustrating.

[OxQQme]

10. I just found this at Michael Moore's site

Having first looted the University of Texas, Bush now aims to loot Social Security.
By Frederick Sweet

Soon after George W. Bush was sworn in as Texas governor in 1995, he transferred billions of dollars of public endowment money from the University of Texas to the control of his billionaire friend Tom Hicks, a “privatization” move similar to the one now proposed for Social Security. Bush’s friend headed the private U of T Investment Management Co. (UTIMCO) that had been set up to invest the U of T funds.

According to a March 1999 report in the Dallas Morning News, a committee that the Board of Regents uses to decide upon how the University of Texas invests its billions was run by billionaire Tom Hicks, a Bush appointee. Hicks was a major campaign contributor to Bush’s 1998 gubernatorial race and also the maximum contributor to and one of the major fundraisers in Bush’s 2000 presidential campaign.

Hicks is an investment banker to whom Bush and his billionaire mentor Richard Rainwater had earlier sold the Texas Rangers. Hicks owns a vast sports and media empire. Bush allowed him to head up a committee charged with “investing billions of dollars of public university money in the form of investments in private companies.”

Questions were asked in 1999 because “almost a third of the $1.7 billion has been committed to funds run by Hicks’s business associates or friends . . . five funds run by major Republican political donors.” Hicks was unwilling to answer questions about his activities on the public’s behalf.

EDITED BY ADMIN: COPYRIGHT

http://www.interventionmag.com/cms/modules.php?op=modload&name=News&file=article&sid=989

[eg101]

11. we need to hang some of these crooks

after finding an appropriate crime with which to charge them. I don't believe all that strongly in the death penalty for ordinary people, but I think rich and powerful people ought to be subject to much more strenuous penalties. In fact, there ought to be seperate criminal and civil justice systems just for them, with seperate, harsher penalties.

[mopinko]

16. off topic

[Moderator]

19. OxQQme

Per DU copyright rules
please post only four
paragraphs from the
copyrighted news source.


Thank you.


DU Moderator

[fob]

21. MO, you are correct about SS being an insurance program, and I

hadn't thought about the cap that way. As in, if you raise the cap, you raise the back-end payout to those that reach the new cap. Without adjusting anything else (means testing or benefit level) you have probably made the funding issue worse.


Hmmmm...time for the thinkin' cap.

[mopinko]

24. here's a couple of ideas

which follow from the fact that it is insurance.
ss could attract more "customers", or get the existing customers to buy bigger policies- let people make voluntary contributions. let lower wage workers make a voluntary payment, up to the existing cap, and therefore, get a higher benefit in the end. although this also adds to the systems liability, at least it goes to the people who need it most.
and as far as people who don't need the money, there could be some sort of opt out. maybe give a wealthy person a small lump sum payout at retirement. but you can't just take it away because you think i have enough money.

the thing is, if you really are committed to the core idea that it is not welfare, there are a lot of ways to tweak the system.

what bugs me is that the ideas being kicked around on the left make it LESS 'owned' for lack of a better word. it's the third rail because the 'greatest generation' knows that they earned it and own it.
WE CANNOT UNDERMINE THAT!

[fob]

27. Agreed.

As for the "opt out", how about a "vesting" whereby if you reach a certain benefit level then you are opted out upon retirement with what you paid into the system but NOT any of the interest earned on that money while held for the benefit of all. Not in a lump sum but an annuity at 0% interest based on projected lifespan less retirement age.

[mopinko]

28. opted out means i decide

and if there is not some sort of good in it for me, why should i. i was trying to get at an incentive. whatever the plan, you cannot just say, you have enough money, you're screwed.
plus, you are introducing the concept that people are entitled to get back what they put in and that is not insurance, either. that is too large of a can of worms.

[Cleita]

22. I disagree that it shouldn't be fixed, but not the way the neo-cons

want to fix it, which is really a cynical way to destroy the system entirely. The problem is that it is regressive instead of progressive. In this way a poor guy pays 7.5% of his income into the program and someone like Donald Trump may pay only .002% of his income into the program. Also, he will receive the most income when he retires, which he doesn't need, and the poor guy might get half of what Trump gets.

So we should make it progressive, like removing the caps, but maybe exempting the first $5,000 earned. I think everyone should get the same monthly award, which at the top is around $1,400 a month in round figures. Also, the super rich could opt not to collect their benefit if they don't need it and many of them do just that.

Of course we will be ice skating in hell before any conservatives agree to this.

[mopinko]

23. then how does it differ from welfare?

what is the difference between what you are proposing and any other government welfare system?

[Cleita]

26. How can a system you paid into all your life be welfare?

My husband just died and I can assure you he didn't collect more in SS than he paid into it over a lifetime. If the parents of a child dies then that child can collect SS so maybe that's welfare, but if his parents paid into and never collected their share then it's still really not welfare.

The RW butts in Washington want you to believe it's welfare. Why are you always spreading your RW social ideas here? Are you trying to spread disinformation? First you do it on health care and I have that thread copied so you can't deny it and now you want to spread misinformation on social security just at the same time Bush and Co are trying to destroy it.

[Name removed]

29. Deleted message

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