An alternative approach to solving the Social Security mess

[kharmajunkie]

Funny, I was going to say the same thing about you. Until you source it, you're the one that doesn't question what you're told. I'll be waiting for that link.

[fushigi]

Quote by: donkrabbit Are you arguing that people shouldn't be allowed to make the decisions about how to spend their money because they might use poor judgement?

Not at all. I'm acknowledging that some people would use poor judgement and end up with nothing, and asking what would we do with these people? Would there be any safety net at all?

[Richard 23]

Since nobody wanted to suggest what we should do about elderly people who have no money, let alone survivor and disability benefits assuming Social Security was eliminated...

If transistioning to Bush's plan is going to cost an estimated two trillion, why not instead use one or two trillion to shore up Social Security?

[Mr.Vicchio]

HAve you ever heard of the T.hrift S.avings P.lan? Or TSP? Thats what Congress, the Senate, and every FEDERAL employee has as an alternative savings plan. It doesn't replace SS, but if there were Private Accounts, this is what it would look like.

You really should look that up before you make "omg old people would starve to deaht, what about them!?!?" comments. No one would starve.



Yes, Bush is fully to blame.. for a downturn that hit before he was even President...

[Richard 23]

Something to think about (or not): The Social Security "reform" proposal mimics a commonly used union busting (divide and conquer) scheme: 2 tier contract. You can google the term if you're unfamiliar with it.

Those who lived through the depression are dying off; people don't remember or relate to the reasons for implementing Social Security in the first place. It's a good deal for elites: they're negotiating a new contract that substitutes a cheaper bum deal for the new deal. The marketing appeals to greed and self-interest. And marketing is never about informing its target, it's about obfuscation. Nobody believes they're going to wind up needing help and have little empathy for those who do. It's a pity that people are willing to throw away a good deal for some magic beans, but it happens all the time.

[Scribbler1]

Also, Bush's fans are focused on taking a mismanaged system and instead of improving the management they want to eliminate it. The selling point is the "ünfair taxation"angle which appeals to everyone's desire to hold on to their money.
And no one seems to think much of the fact that the biggest fiscal mismanager is Bush himself, and they're willing to follow him because...well, because He's Bush.
I hate unfair taxation as much as anyone else, but I'll be damned if I buy into anything Bush says, especially with his track record.

[Autolykos]

I thought I was out, but they dragged me back in...

Quote by: LiveAndLetLive Social Security has never REALLY worked. It was a Ponzi scheme from Day One. Still, we have to deal with it. It seems to me that we really should be doing two things with Social Security:

Well, one way to "deal with it" is to grandfather it out, wouldn't you say?

1) First, letting people -- to the extent possible -- prepare for their own retirements. Why not re-open IRAs to all, and up the deductible amount to, say, $10,000 per year? This would not only allow people to build substantial nest eggs, but allow for increased capital formation, which, in the long run, is how wealth is created in a nation?

This clashes with the nature of the Social Security program. It is a welfare program. Current taxes are given to current retirees. That is why one cannot (legally) opt out of paying SS taxes.

2) Start funding SS with a penalty on polluting. In the long run, pollution from burning fossil fuels needs to be dissuaded more. Up the gas tax 25 cents for starters. Over time, keep upping the gas tax, and at the same time, lower SS tax rates. comments most welcome.

At the risk of being obtuse: "[P]ollution from burning fossil fuels needs to be dissuaded more" because...?

Why not leave it up to the marketplace (that is, to each person individually) to "decide" how much pollution should be emitted?

That aside, your funding proposal actually would help unmask Social Security as the welfare program that it really is. However, that will do nothing to get rid of people's perception that they have an entitlement to Social Security benefits upon retiring (which they de facto do not have -- see USC Flemming v. Nestor, 1960).

- Rob

[Autolykos]

Quote by: Scribbler1 The only thing that works with SS is the fact that most people don't save squat, and if left to their own devices they would be the grasshopper more often than the ant.

Don't you think that the grasshopper-ish behavior, as it were, is motivated by the presence of Social Security itself? That, if SS did not exist, people would save more on their own?

The only unfair thing is that it penalizes the people who CAN intelligently manage their finances to a degree that their return would exceed SS bennies.

I, for one, am not in favor of protecting people from their own stupidity. Protecting people from others' stupidity, when it causes harm to them or their property, is fine, but I fail to see how I'm harmed by Joe Schmoe setting aside no money for his old age. Besides, what he does with his own money is not my business.

I'd love to have the ability to see an alternate reality where SS didn't exist and see how many people who were NOT forced to contribute ended up on welfare, or on the street.

When one brings up an argument for abolishing Social Security outright, those in favor of SS tend to have two "knee-jerk" reactive logical fallacies. The first logical fallacy is this: they assume that, immediately, many elderly people would be thrown out onto the streets to starve to death. This is a fallacy because it does not acknowledge the fact that other institutions exist besides those of the federal government. Such institutions include churches, private charities, families and friends. That said, however, I readily admit that many elderly people in this day and age rely entirely upon Social Security for their post-employment income. If such income were to suddenly stop, then most likely they would have a (more) difficult time making ends meet. Since most people have some modicum of compassion, they do not suggest a suddent cutoff for the program. The unfortunate thing is, however, that such a situation is exactly what we are heading for if SS is not reformed. Anyways, the second logical fallacy is that not having SS (and, by extension, other federal welfare boondoggles) necessarily leads to a restoration of nineteenth-century social conditions. Such an argument is false, if only because we are technologically far superior now than people were in the nineteenth century. However, I also venture to say that these technological improvements have enabled better social conditions, both per se and from the added capital that they have allowed people to accumulate. So, no, Virginia, we would not be suddenly thrust back into the age of "robber-barons" if SS and its ilk no longer existed.

Seeing these reactions for what they are is an important step in having logical debate on the Social Security issue, which is really an issue about how far the power of government should extend.

For an effective alternate to Social Security to become a reality we need to work NOT on privatization, IRAs and all the other schemes, but on the way people think.

And how, pray tell, do you suggest that we accomplish that? My father taught me that one cannot change other people -- he can only change himself.

Unfortunately, it looks like we need another depression, one every few generations actually. Most of the people who lived through the great depression are dead and successive generations have gotten more and more spoiled. I know I have gotten spoiled as a lot of my generation who were born in the 50's.

The spoiling is a result of government (primarily federal) economic policy, which caused the Great Depression in the first place.

- Rob

[Autolykos]

Quote by: Gorgo Tivodan, you think you are alone in the world and create your great wealth by yourself. You are not and do not.

Where did you infer that from Tivodan's post? Please give actual quotations.

Society provides a great deal so that you can have whatever it is that you have and look down on those that work harder than you ever could for nothing.

Government and society are not the same things. I think it wise for you not to equate them. It would also be more realistic to say "other people, through their interactions, provide a great deal..." because "society" is not an acting entity (nor, indeed, is it an entity at all -- merely a concept).

- Rob

[Gorgo]

Government is one of the ways that society acts. It is not separate from society.

People that think taxation is stealing, think that they create their own wealth by themselves and own it without government interference. Such a thing is ridiculous. The very technology that lets me use communicate with you was largely created by the government and given to the computer industry. The school taught me to type, etc., etc. etc.

I don't know what you mean about society not being an acting entity. Parts of society get together and do things. "Society" itself is made up of those parts. That is not contradictory to anything that I've said.

[Autolykos]

Quote by: Mr.Vicchio Gorgo you feel you have the right to others money. I say earn your own damn money. That's the difference between the Pro-SS crowd and the Priavte accounts crowd.

What difference does it make whether your SS taxes go out to current retirees or if they go into a "private account"? They are still taxes.

- Rob

[Autolykos]

Quote by: Catch 22 Tivo what’s the matter with providing a general basic income to those of us who biult this society but are now too old to continue working.

"Built this society"??? What on Earth are you talking about?

I don’t see why you think grandma and grandpa should be forced to live on cardboard just because they didn’t have investing smarts or were put in an economic position in which they couldn’t save up great deals of money. Last I checked we as a society valued the welfare of others, especially that of the elderly.

Again, I must say: society and government are not the same thing. And again with the logical fallacy that "grandma and grandpa [would] be forced to live on cardboard" if we did not have a powerful, central government to take (some) people's money and give it to other people, presumably because it knows better than freely acting individuals how to spend their own money. This fallacy has already been refuted.

- Rob

[Autolykos]

Quote by: Scribbler1 What makes you think these people are "leeches"? The way SS is set up your generation pays for the one before and the next generation pays for YOU. There is no free ride the conservatives are babbling about. They PAID it, but they didn't GET it. That's for the following generation. Don't deliberately try to paint Social Security as welfare. It is not.

How is it not welfare?

And what if they DID prepare for retirement, but they prepared for it by having a portfolio stuffed with Enron stock? What happens then? Say what you want against SS, but you have to admit it is secure.

Personally, I fail to see why I should be forced to support people I have never met because of circumstances over which I had no control. "Forced" is the operative word, here.

Social Security does not seem to be secure in theory, let alone in practice.

- Rob

[Autolykos]

Quote by: fushigi This is a point that is often unexplored. With private accounts come private decisions about how to invest that can turn out badly. In a world with private accounts, what happens to the sucker who invests in the most aggressive plan and loses his shirt at age 65? Maybe he can turn to his family for support. But what if he has no family support? Do we simply let him suffer?

Who is "we" here?

Furthermore, it is not so much a question of "should the rest of us simply be bystanders" or not. It is a question of means. There are many ways to provide for those who, for whatever reason, have not been as fortunate as the rest of us. In other words, government is not the only way, but government does seem to be one of the worst ways.

- Rob

[Autolykos]

Quote by: Richard 23 Are you ok with elderly people living below the poverty line or homeless? It might be possible to follow the rules work low wage all your life and wind up poor People generally don't choose to be poor on purpose. It's not fun. I'm not proving anything here, just saying it's possible.

Some elderly people live below the poverty line or are homeless today. What's your point?

Should we leave it up to the free market (to help out)? Should they be die "on the street?" (out of sight) Should we offer to put them to sleep? Or shame them into doing the right thing? Force them?

You seem to equate "[leaving] it up to the free market" to "[dying] 'on the street'". That's a non sequitur. Are you implying that, if people were left to their own devices, no one would voluntarily (help) take care of the elderly, even their own parents?

Let nature take its course? Bring back poorhouses? Orphanages? Debtor's prison? Jail for vagrancy?

These things have not gone. They've simply changed shape.

I'm asking because it's going to happen. I don't know about pre-Industrial, but since the migration to cities we have had plenty of poor. Did we just let them die? I really don't know.

Here's the other fallacy I mentioned earlier: the assumption that, if it were not for the almighty State, we would be thrust back into "primitive" social conditions. Take a look at the technological advancement since the nineteenth century, and the wealth-generating possibilities it's given us (in spite of the State, not because of it), and get back to me.

No matter what people are taught, how often they are nagged, someone's going to fall through the cracks and then what? Someone's going to wind up saving nothing or losing everything. Thieves, hucksters, stupidity, luck, any number of reasons.

By that reasoning, no one, not even the almighty State itself, can "save" everyone. Does that make it right for the State to come and take others' hard-earned money? Better yet, does it mean that, if the State does do that, everyone is better off?

These are issues that the free market isn't concerned with.

Wrong. Everything has a cost. Nothing is free. Where there is cost, there is exchange of some sort. All else follows.

The attitude a society has for its weakest members reveals something about a society. I forget what.

Society is nothing more than the individuals that make it up. To personify "society" as an entity in its own right is to engage in fiction.

Externalities can include a dead breadwinner from externalized waste products, accidents, etc.

One cannot prevent externalities.

Before Social Security, poverty rates for old folks was something like 50%, it's closer to 20% since that time. I'd argue that it has outperformed expectations. Other than the occasional tweak, it mostly runs itself.

What are your sources for these statistics?

I think what I've said already can stand to respond to the rest of your post.

- Rob

[Autolykos]

Quote by: Gorgo Government is one of the ways that society acts. It is not separate from society.

Society cannot act. It is not an entity per se. Try again.

People that think taxation is stealing, think that they create their own wealth by themselves and own it without government interference. Such a thing is ridiculous. The very technology that lets me use communicate with you was largely created by the government and given to the computer industry. The school taught me to type, etc., etc. etc.

If a theif steals your wallet and then buys you a hot dog with some of the money, is it still theft? (Hint: the answer is "yes".)

If the school had not taught you to type, would you never have learned otherwise?

Regarding the technology argument, I'll have to look into the history of telecommunications. For now, however, I can say that even if the government had a big hand in it, it does not follow that it never would have happened otherwise.

I don't know what you mean about society not being an acting entity. Parts of society get together and do things. "Society" itself is made up of those parts. That is not contradictory to anything that I've said.

Any "society" is simply a collection of individuals and their interactions. If you disagree here, then there can be no further debate between us, as our definitions of a very fundamental concept are at odds. However, it seems readily apparent to me that only individual human beings can act.

- Rob

[Mr.Vicchio]

Quote by: Autolykos What difference does it make whether your SS taxes go out to current retirees or if they go into a "private account"? They are still taxes. - Rob

Two Reasons.

1. While yes, it is still a defacto "tax", unlike the current system, where the money dissappears into DC. Individual accounts are "mine" and thus not sucject to the hands of the government. Plus I can earn more then 1.6% of lifetime gain on what I "add" to social security.

2. The novel idea of "taxing" me into a system I control, can pass on, and gives better return on investiment then the goverments handleing... is a "tax" I can live with.

[donkrabbit]

Quote by: fushigi Not at all. I'm acknowledging that some people would use poor judgement and end up with nothing, and asking what would we do with these people? Would there be any safety net at all?

No. I am in favor of the radical idea that each individual be responsible for his own decisions.

The "safety net" is the option not to make risky investments.

[Mr.Vicchio]

Quote by: donkrabbit No. I am in favor of the radical idea that each individual be responsible for his own decisions. The "safety net" is the option not to make risky investments.

WAIT! I wanna give the answer! Before they do

"donkrabbit, what about those people that make risky investments, lose everything, what about thier CHILDREN? Are you saying we should let children jsut starve because thier parents were dumb?"

[Gorgo]

Yes, and collections of individuals are called groups. Society is one of those groups. If you're saying otherwise, then I just can't comprehend.

Quote by: Autolykos Any "society" is simply a collection of individuals and their interactions. If you disagree here, then there can be no further debate between us, as our definitions of a very fundamental concept are at odds. However, it seems readily apparent to me that only individual human beings can act. - Rob