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My simple Social Security "fix":

Discussion in 'Government Offices and Programs' started by fairsheet, Nov 9, 2012.

  1. Joe Economist

    Joe Economist Council Member

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    Paul Ryan's plan if you have read it actually increases the size of Social Security for today's retirees. His plan comes with a guarantee that is not currently available for beneficiaries. The problem with his plan is that overtime it reduces those benefits for people in or out of Social Security.

    In other words, he is creating the free-risk in equities that created the housing bubble.
     
  2. Joe Economist

    Joe Economist Council Member

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    Poverty is a measure of income. It is a woefully misguided statistic when measuring need in people who do not work. The measure is wealth. Today the median wealth of a person 65 or over compared to someone 35 and younger has doubled since 1983.

    Part of that comes from the rising cost of Social Security, which transfers the poverty from the elderly to the young (ie people with children). Poverty in the 35 and under set is double historic rates. So your comment "Maybe, but the vast majority are better off with it." is based on half of the equation.

    The problem here is that poverty in your working years is a direct factor in poverty in the elderly. So it is unclear whether Social Security is the cure or the cause. The one thing that we do know is that a rising number of future retirees will depend upon Social Security as their primary income in retirement.
     
  3. OldGaffer

    OldGaffer Governor

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    Poverty in working class folks has very little to do with Social Security and a hell of a lot to do with poor wages.

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  4. fairsheet

    fairsheet Senator

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    """The problem here is that poverty in your working years is a direct factor in poverty in the elderly. So it is unclear whether Social Security is the cure or the cause. The one thing that we do know is that a rising number of future retirees will depend upon Social Security as their primary income in retirement."""

    This is interesting. Could it be that the promise of Social Security "disincentivises" the worker from investing in his own individual retirement account, because he knows Social Security will be there in the end? Or, could it be that the worker doesn't invest on his own, because he can't afford to? If we assign some relevance to both of these, Social Security suggests a significant advantage to the buyers of labor. For if Social Security didn't exist, sellers of labor would command a higher price, in order that they could save for their own retirement.

    If any of the above is valid, it hints at a coupla things. First, that labor is its own worst enemy, when it doesn't insist on a higher price for itself, so it can invest parallel to Social Security. And second...capital would be sort of silly to wish for the demise of Social Security. Although.....I imagine capital would much prefer the situation in which all retirement dough was invested individually and privately - where they could get their hands on it, rather than its being locked just out of their reach, in Social Security.
     
  5. Joe Economist

    Joe Economist Council Member

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    15.3% (all payroll taxes) are first dollar taxes which hit everyone. It is difficult to save when you have lost that much disgressionary savings capacity. The cost of the Social Security's OAS has grown from 2% to 10.6%. The cap against which the cap is applied has grown much more rapidly than inflation since the mid-70s. The cost of the system has grown about 10 fold since inception.

    'locked out of their reach'. What is interesting is that you think there is money to lock away. Yes the system has 2.7 trillion in cash, but it has made commitments of more than 23 trillion against it. To talk about a 2.7 trillion dollar surplus, is like saying you have $1,000 checking account even though you have written $9,000 in checks.
     
  6. fairsheet

    fairsheet Senator

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    Your adopted tunnel-vision, renders your angles essentially useless to us.



    I'll give you a couple of for instances.....Wow!...the cost of Social Security has risen TEN times since its inception? Really? That sounds AWFUL! Of course though, the cost of EVERYTHING has risen since the inception of Social Security and in most every case, it's risen more than 10x.

    And then....you suggest that no one covets the Social Security surplus, since there are commitments of a greater amount, against that pot. Well...lemme let you in on a little secret. There are "commitments" of a greater amount, against EVERY dollar within a capitalist economy. Your argument might possibly of some use if Social Security was unique in this regard, but it isn't.
     
  7. EatTheRich

    EatTheRich President

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    The question is not of social security running out of money. Social security is an obligation of the government, and the means they use to pay for it is a political issue. If the ruling class tells us the deficit and the tax rates are more important than social security, we have the right to make that a political issue too by disagreeing. If we want to discuss a guaranteed minimum income from cradle to grave, like they used to have in Sweden, we have that right too. And the outcome of those contests depends on the power of the two opposing classes. And power, in part, comes from having a clear political perspective.

    I think a working-class person with a clear political perspective will say, the state exists as the organized expression of the violence of the class that rules it. In the United States, that class is the bourgeoisie. "The working class and the employing class have nothing in common," as the IWW put it. The argument that that state's treasury will run out of money if social security has generous benefits is an argument FOR social security, just as the argument that capitalist society will collapse if the borders are opened is an argument FOR an open border, just as the argument that same-sex marriage will break down the patriarchal family structure is an argument FOR same-sex marriage.
     
  8. Joe Economist

    Joe Economist Council Member

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    The cost has risen 10 fold in REAL terms, not nominal. The original law was 2% of the first $3,000. Those figures updated to 2013 would be 2% of the first $50,107.77. By 1950, the cost had dropped to 2% of the first $28,900. Today the cost is 10.6% of the first $113,100.
     
  9. Joe Economist

    Joe Economist Council Member

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    Actually....

    The dollar has backing of all assets where as Social Security's obligations are backed only by the Trust Fund.
     
  10. Joe Economist

    Joe Economist Council Member

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  11. MaryAnne

    MaryAnne Governor

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    What a pleasure it is to have another brilliant poster on board!

    Where have you guys been?
     
  12. MaryAnne

    MaryAnne Governor

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    Speak for your self Connor! I remember seeing those Poor Houses when I was a kid
     
  13. EatTheRich

    EatTheRich President

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  14. fairsheet

    fairsheet Senator

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  15. trapdoor

    trapdoor Governor

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  16. fairsheet

    fairsheet Senator

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  17. EatTheRich

    EatTheRich President

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  18. trapdoor

    trapdoor Governor

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  19. ARMCX1

    ARMCX1 Mayor

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    Nice post.
     
  20. NightSwimmer

    NightSwimmer Senator

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    How old are you? You might well be eligible. Should you choose to opt out, however, you have every right to simply slink out into the woods instead and die alone as though you were a stray dog.
     
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