Does anyone here support the following (Social Security)?

[nickshepDEM]

Optional Partial Privitization?
Optional Opt Out?

Why?

[unblock]

1. not me. there are PLENTY of opportunities outside of soc.sec. for this

social security is just that, SOCIAL. SECURITY. it's not for messing around with and playing games with. that's what your 401(k) and your ira and your roth ira and your roth 401(k) and your 403(b) and your sep plan and your keogh plan and your variable life and your brokerage account and so on is for.

social security is fundamentally about existing workers providing a minimum level of payments for existing retirees in exchange for a promise of being similarly supported when they reach retirement age.

it is FUNDAMENTALLY a present-day transfer. it is NOT fundamentally a savings or investment account of any sort. it only works out that way because the fund has more income than outflow at the moment, because it anticipates greater outflows than inflows in the future.

[newswolf56]

3. Precisely!

[nickshepDEM]

4. I was curious because I was reading about 3 Texas counties...

That have decided to opt out of Social Security.

"Three Texas counties that opted out of the Social Security program more than a decade ago are earning an average 6.5 percent interest, compounded daily, on their vested personal retirement accounts."

How did the counties as a whole decide to opt out? I wasnt aware that this was legal.

[Humor_In_Cuneiform]

7. Do you have a source, a link for that quotation?

[nickshepDEM]

8. Sure.

I googled "Texas opt out social security" and this was the first link...

http://www.ncpa.org/ba/ba215.html

That is where the quote comes from.

[Humor_In_Cuneiform]

12. I also found a more general link

"A Section 218 Agreement is a voluntary agreement between the State and the Social Security Administration (SSA) to provide Social Security and Medicare Hospital Insurance (HI) or Medicare HI-only coverage for State and local government employees. These agreements are called "Section 218 Agreements" because they are authorized by Section 218 of the Social Security Act. Section 218 Agreements are irrevocable..."

http://www.ssa.gov/slge/sect_218_agree.htm

[unblock]

14. the success of any private pool depends on many factors

privatization proponents would like you to think it's all about government waste and that a private plan automatically means better returns.

but of course, that's hardly true. private plans can screw up just as easily, and if they do, you get to sue a bankrupt company. yippie. then you're poor and destitute and over 65 and have no social security because your county opted out years ago.

guess what happens? that's right, the government bails you out anyway. because that's what good governments do. and if they don't, then smarmy politicians shine a camera on you and GET the government to help you. because that's what smarmy politicians do.

and where does the month for this come from? why, the rest of us who ARE participating in the pool. opting out is a bunch of anti-american bu**sh**. and i rarely use the "anti-american" insult because america tolerates a very diverse set of opinions. but "opting out" of your responsibility to participate in the payment for the pool of america retirees IS opting out of america.

the cleaner way to "opt out" is to earn your money in a different country.


now, even if the plan is doing well, why is that? it could have something to do with how the money is invested, or lower administrative costs, sure. but it could also have to do with the age and longevity of the participants. too many people living "too long" could kill a plan like that. maybe they just got "lucky" from the plan perspective, that the retirees die early. and note that to whatever extent their demographics are favorable to the success of their pool, their opting out decision removes these people from the regular social security pool.

so, the rest of us are suffering because of their opt-out decision.

[Humor_In_Cuneiform]

20. Basically from my study of finance and accounting, it was

stated as a truism that an individual really can not "beat" the stock market in the long run.

You can be a speculator and buy at what you hope is a low and sell when it goes up, if you're lucky. And pay lots of fees for that.

But you're not going to consistently beat the stock market, which is a peculiar entity as you may have noted.

It is smart in that many factors have already been "discounted," already had an impact on stock price, by the time the information really gets around a lot. Not talking insider trading here, but legal stuff.

And yet the stock market is also very emotional, reacting rather drastically to daily changes in the world.

But aside from whether you can do better by investing money yourself, if privatization is allowed it is basically the beginning of an end to what began with FDR. It is the end of the social security system, and of a nation that cares for the elderly.

It works because everyone pays in.

As some have suggested, it might help to raise the cap on wages subject to FICA tax, maybe even allow a spread on which no FICA is owed, but then reinstate it on wages above a certain mark.

Example:

Pay FICA on earnings up to $250,000.
No FICA from $250,000 to 750,000.
Pay FICA on earnings over $750,000.

This would to some extent change the regressive nature of the tax.

And bring in a lot more funds too.

[papau]

18. Fed can not force State/local gov employee's to do much - so you

have separate laws for this type of Gov employee.

As to the opt out counties great results - it is bull as to the result being good for the group known as country employees before and after the opt out.

It is not bull as to the return on the new savings account being 6.5%

Hell of a retirement program.

[newspeak]

29. yeah and maybe

parts of Texas could opt out of the rest of US

[bettyellen]

2. NO AND NO

they are designed to destroy the system. people are short sughted, might feel opting out will help them now, but it's a safety net. if people want to save privately for retirement- they already can. no need to screw with SS to do that.

[MichiganVote]

5. Absolutely not to both. Where's our money Washington?

Bastards have robbed us time and time again.

[dcfirefighter]

6. Yes

well, not completely.

Mostly because i believe that the payroll tax is absolutely the worst tax we have. How much labor can you sell per dollar? Now how much can you sell with a 15% tax on labor?

If it's insurance, if it's a safety net, it should be 1) paid out of general revenue and 2) a fixed payout per person, regardless of income or years worked.

I think that a 'safety net' should keep you out of poverty, no more, no less. Poverty level is right under $10,000 / year for an adult. There are 37 million people 65 and older. Giving them $10K/y would cost $370 Billion a year. We take in $658 Billion a year. If we reduced the payroll tax, more revenue would be taken in regular income taxes, if only due to increased wages and employment.

I do believe that we have obligations to those who have significantly paid into SS as it is.

[TahitiNut]

10. Only one change would I support.

I'd earmark the Federal Estate Tax to Social Security.

[unblock]

11. a simpler solution: an income tax credit for soc.sec. taxes

of course, income tax rates would have to increase to pay for this credit. which would essentially convert the highly regressive payroll tax into a mildly progressive income tax.

much better imho. not that it would ever fly....

[sandnsea]

27. EIC

That's what the Earned Income Credit is for, to offset federal and FICA taxes.

[TahitiNut]

9. The War Against Labor is winning.

The Social Security system depends on fair compensation of working people. As the "bottom 90%" receive less and less compensation for the wealth we create, we're more inclined to kick grandma to the curb. The wealthy "investment class" wants to profit from every kind of human misery: aging, illness, war, and starvation. The working class now supports the aged directly - but the privateers want to get their fingers in the till. They see their opportunity now. Just as the Social Security Reserve surplus is approaching its peak, they're beating down the worker's share of national income to the lowest it's been since the Great Depression. As the cost of living increases due to petrochemical priofiteering, worker's compensation is going down. When the Social Security Wage Base goes down, people suffer.

[Humor_In_Cuneiform]

13. No, I would not support those

For the same reasons others have brought forth.

In addition, there is no crisis as * et al would have you believe.

As usual they're lying to you.

I do believe in taking care of those who can't take care of themselves whether ill, injured, disabled, elderly. And taking care of them at a decent standard of living.

There but for the grace of God...

[RUMPLEMINTZ]

15. I guess I'm the only

one who would be for it. As long as the choices are conservative funds. Just about any large cap value fund or equity income fund would do. Even the worst preforming funds in these categories will net you an average of 10% per year over a ten year period.

[unblock]

22. not on an inflation-adjusted basis.

8% real annual returns are pretty big for equities long-term.

your 10% figure is probably more like 6% once adjusted for inflation.


regardless, it misses the point. social security isn't an investment. it's a transfer. aside from the particulars of the demographics of the moment, there wouldn't be a trust fund at all. your payroll taxes pay for this year's benefits to retirees. there's nothing to invest generally.

the only reasons there IS something to invest is because of the demographics, there being more income than outflow. maybe there should be a debate on how to invest these funds, but it certainly shouldn't be framed as if it belonged to individuals. it belongs to the trust fund and is meant to support the fund in later years, when there will be more outflow than income.

[RUMPLEMINTZ]

24. While that's true

a meager 10% yearly average coorelates to doubling your money roughly every 6 years or so. Over 40 years you would have doubled your money at least 6 times. Look, I just everyone to have as much money as they can.

[unblock]

26. actually it would nominally double every 7.2 years or so

but the point about inflation is that the value would not be doubling nearly as fast. at 6% REAL growth, the REAL value of your money doubles more like every 12 years.

be that as it may, it has little to do with the matter at hand. privately invest your 401(k) or ira as you wish, leave the social security in the hands of the government that's providing the social, um, er, uh, security.

[meow2u3]

16. HELL, NO!!

Does this answer your question?

[papau]

17. No - optional addon 401k type account is harmless to SS - your others hurt

Social Security.

I think the DU crowd is into not hurting Social Security - and indeed has the ability to read the actuary's reports and note that the Bush selling point for accepting that hurt - that SS is quickly going down the tubes - or is designed to go down the tubes - is yet again another Bush lie.

Curious as to why you would ask if anyone would want the option to destroy Social Security?

[nvliberal]

19. If you don't support Social Security as it currently exists,

you AREN'T a Democrat.

Period.

[Humor_In_Cuneiform]

21. Pretty much that is it, in a nutshell. I agree. n/t

[nickshepDEM]

25. Thats ridiculous.

And if thats true, we are going to be in for a hell of a ride a couple election cycles down the road. 30 and unders support the privitization plan overwhelmingly.

[windbreeze]

28. Privatization....NO...WHY??

Look at a 401K for instance...my husband lost about half of his, in one day...Last October, I believe....that's what privatization will do for you, and some are already projecting how any amount drawn from a private account could end up being as much as 70% less than regular SS...so tell me, are those 30 and under, something's...taking time to figure out, how they are going to feel about being saddled with Mom and Dad..when SS is no longer there to help? Then stop and think about all the corporations who are ditching out on pension plans, money that workers paid in, that the company used, and now it isn't there, or they don't intend to honor the pay back they promised.....Maybe what we should all do, is put money in a coffee can, and bury it...or stuff our matresses instead...
IF the friggin gov't would stop stealing from the damned SS fund, it wouldn't be a problem, now or in the future..I just don't believe it is in trouble, like is being shoved down our throats..not when you consider all the people working(millions) who pay into SS, every week..and thinking of the interest drawn on that amount...why is there a problem?
Privatization is a trap...a volatile trap, at best...I guess it depends on who you are going to trust with your money...and your future ability to exist...
IF people choose to opt out, that should be their choice...but...I don't recall having been given that choice all the years I worked..and because there wasn't a choice, I believed I had a right to depend on SS being there..30 years from now, I might not care what people do...but for right now, I do..and if everyone under 30 opts out, they better get ready for their parents to move in...I'de suggest jumping on that bandwagon, requires serious thought, after all, they don't take that much out of any one person's check for their SS contribution, but allowing opt outs is a sure way to cause a crisis...and there are always those pesky unknowns, to be considered, with any private investment...sure things no longer exist, as some people who relied on pension funds have found out..
windbreeze

[unblock]

23. i would argue that we ALREADY HAVE partial privatization.

social security takes care of the compulsory part, which guarantees a minimum retirement.

your 401(k)s and iras and so on are the voluntary part. invest as you like, contribute as much as you'd like. or don't.

[newspeak]

31. against privatization

was employed with Social Security in the seventies--I am opposed of privitizing social security. For some, social security is the only safety net they have. I also, do not trust wall street handling money , since some do it as their private little game.

[newspeak]

32. here's a story from my SSA days

worked on a claim from a senior citizen in his seventies--he didn't say he was in dire need at the time, probably because of pride. well, his claim got held up and the poor man died of hunger and exposure--what a big mess-I mean we had congressmen and senators inquiring what happened. Do you think with privatizing that corporations are going to care when something like this happens? last year, in an affluent small town, I noticed a x-mas tree with name tags on it all for senior citizens. Most of the people just wanted gift certificates at grocery stores for food and medicine. They're hurting!!!!!With robber barons, the ones that are hurt the most are the young and the old!!!!!

[spindrifter]

30. No Way

There is no freaking way I support either optional partial privitization or optional opt out.
I work with a bunch of people who foolishly cash in their piddling SEPP accts each yr. (That is the nonprofit sector's employer-only retirement acct.) Our employer contributes anywhere from .005 to .02 of our annual salary, so it ain't much. But even so, if this were the only retirement money they had they would be up a creek without a paddle before you could blink an eye. Then what--you and I would end up paying their way anyhow.

[Blue Topaz]

33. No way

Social Security is the only piece of the three-legged retirement stool that has any sort of guarantee to it.

Leg #1 - The pension your company offers: Gone by the wayside for the most part. Even when it still exists, companies are increasingly weasingly out of it or changing the terms, even after participants have retired.

Leg #2 - Your own savings, whether in an IRA or a 410K: No guarantee to this at all. All of us in the market in the past decade have seen our fortunes rise and fall in a blink of an eye.

Leg #3 - Social Security: Never intended to stand on its own, it only works if virtually everyone participates. It's like insurance in that regard, and insurance is exactly how I like to think of Social Security.