THE GREAT DEBATE OF SOCIAL SECURITY
Ok, here’s a touchy subject bound to get every one all riled up, Social security.
Social Security is a documenting of a basic reality about America: that the people of America can not and will never in good conscience allow our elderly, regardless of the reason, to lie homeless on the streets.
The biggest objection to privatizing Social Security has been the transition to a privatized system. The yearly transition deficit would be offset after about 14 years.
14 years add that to the current deficit spending and you have a major problem.
But enough of that for now, allow me to quote here a copy of president Bushes plan from http://www.aft.org/topics/social-security/
The negitive side of President Bush’s Proposal:
Privatizing Social Security has been a goal of George W. Bush since he ran for Congress in the 1970s. Since 2001, when he named a special commission composed exclusively of members committed to privatization, the president has made private accounts a top priority. In his Feb. 2, 2005, State of the Union address, the president called for a radical overhaul of the nation’s retirement security program. Although he has so far left details of the actual plan to Republican leaders in Congress, incorporating the president’s ideas would involve the following measures:
- Creating individual private accounts diverting up to 4 percent of the 12.4 percent of the Social Security payroll tax into individual private accounts.
- Borrowing $4.9 trillion in the first 20 years of the program to pay full benefits to current retirees and all American workers now 55 and older.
- Changing the formula for calculating benefits from the increases in wages during the retiree’s working lifetime to the increase in prices for all workers under 55.
- Requiring most retirees with private accounts to buy an annuity when they retire.
Here is the other side of the debate courtesy of http://www.cato.org/pubs/ssps/ssp8es.html
- Current workers could be free to choose either the private option or Social Security. For those who choose the private plan, workers and employers will each pay 5 percent of wages, instead of the current Social Security payroll tax of 6.2 percent for each, into private investment accounts, resulting in an eventual payroll tax cut of 20 percent. Besides supporting retirement benefits, the accounts would finance private life and disability insurance, thus replacing Social Security survivors and disability benefits.
- Workers who opt out of the current Social Security system would receive recognition bonds from the federal government that would pay them a proportion of future Social Security benefits equal to the proportion of lifetime taxes they had already paid.
- Benefits promised to current retirees would be paid in full, with no reduction of any kind.
The problem with this side of the debate is the Social Security payroll tax of 6.2 percent. While most of us have that 6.2% taken right off the top of everything we earn, this is not the case for everyone. This 6.2% is only taken out on the salary you earn up to $87,000. So for people earning over that, they get a massive tax break of 6.2% on the rest of what they earn, while the rest of us pay the 6.2% on every penny.
The Heritage Foundation and other groups try to defend this setup, saying it was historically how the program was set and so it should stay that way. But these are the same people who then propose to replace guaranteed benefits with win-or-lose private investment accounts, who are okay with raising and raising the retirement age, and who are for changing how payout benefits are figured so that what you pay in no longer correlates to what you get in benefits by tying benefits instead to a generic cost-of-living percentage rather than what you pay in.
This is an obvious fraud on the Heritage Foundation’s part and those who are pushing their dishonest, falsely pious claims to be standing for principle.
Private accounts will cost everyone a lot of money. Under President Bushes proposals, the average worker who lives 20 years beyond retirement will see a $152,000 cut in benefits whether or not he or she chooses to have a private account. If the formula the White House proposes were in place now, the average retiree worker retiring this year with full benefits would get $515 a month instead of $1,278 per month. Retirement will be less secure because guaranteed benefits will be cut by 40 percent or more for workers who put in a full career under the new system, according to the experts at the Social Security Administration.
Also, Wall Street is filled with people willing to do anything to make a buck, not the place where I would want my money to go. Also, this would require unnecessary government to manage the new system.
And, here’s my favorite, Privatization would hurt the economy and explode the deficit, which is already at an all time high, passing on almost $5 trillion more in debt to younger Americans during the first two decades alone. Foreigners hold Eighty percent of all U.S. debt, the lion’s share by bankers in China and Japan. And if you’ve read my previous articles on the economy, you’d know about my concerns about the Yuan, and the housing market. In this, I estimated that is the dollar looses it’s value slowly, everything would work out fine, but a sharp drop in the dollars value would almost certainly cause Mortgage rates to skyrocket, well, guess what, the added debt to make the Privatization of social security would cause a sharp drop in the dollars value, as our administration would be forced to payback almost, and it absolutely pains me to say this, $7 trillion dollars in deficits.
But, there are benefits to the program, but I ask you to weigh those benefits against the consequences and make up your own mind.
Antilla the Hun, (Mr. Jack)
Javan Says: June 7th, 2005 at 7:08 pm
Social Security is definatly a huge debate but the whole reason for trying to privatize it isn’t so the rich can get richer. It’s actually to try and stop a failing system before it makes us all completely bankrupt. At the current rate social security will not be able to support high school students graduating this year by the time they retire.
So we’ll have a large percentage of our population pouring money into a system that won’t even be able to help them!
Maybe privatizing the whole system isn’t the best choice but I haven’t heard anyone else come up with a working solution either so the question is do we gamble on making SS private or just wait it out until the eventual bankruptcy of SS occurs?
I’d much rather take the gamble personally.
Mr. Jack Says: June 9th, 2005 at 4:27 am
Well, IF our president would stop taking money away from it in his budget cuts, the system would be much better off. We’d actually be putting in more then we’re taking out.
And if you read the last part, that gamble would cost TRILLIONS, money that would explode the deficit.
Lefty Says: June 10th, 2005 at 2:29 am
Private retirement accounts are a great idea. I have one myself. But Bush’s proposal doesn’t solve ANY aspect of the Social Security problem. I hear people say that the democrats haven’t proposed anything (which is actually not true, but that’s another matter) but the fact is, Bush hasn’t proposed any solution to the social security shortfall either.
K. Marx Says: June 12th, 2005 at 9:21 pm
Why is it the duty of the U.S. government to babysit some of its citizens? How does ‘preserving rights’ translate to ‘taking away rights to help out the less fortunate’?
Brooks Kinch Says: June 15th, 2005 at 9:06 pm
I, personally, just want the Government to leave me alone. I can take care of myself, I can be responsible of myself, it is not the U.S. Government’s position to make sure I can retire. The Government’s job is to protect the rights of it’s citizens… I agree with you K. Marx.
I heard a guy on CNN the other day ( I think it was CNN ) say, and I quote, “People want Government to help them.” The first thought that ran through my head was “I don’t want to government to help me, and I’m a person of the people”.
Suzanne Says: June 16th, 2005 at 9:09 am
Social Security is not People wanting the Government to help them. The Government for the people created Social Security. The Citizens of The United States have been putting their hard-earned dollars into Social Security for a lifetime. In return for their investment in this Government Program for retirement, these same citizens expect their Government to follow through with its promise. Citizens invest part of every paycheck during their entire working lifetime, into Social Security, and at a specific age, they may retire, and receive an unlivable income in the form of Social Security.
The money they would receive is in truth not the government’s money, nor is it the Government taking care of the citizen.
In fact, it is just the opposite;
The money these citizens have invested throughout their lifetime has taken care of the Governments spending problems. Instead of placing the Social Security Monies into investment accounts so that this plan made by the government will work, they instead used and use - our money for government purposes without regard or without plans on paying back to the citizens their Social Security invested monies.
Part of paying into Social Security during one’s lifetime is the process of taking care of one’s own future. This is quite different that the statement referring to the “again” assumption that people expect the government to take care of them, (whom ever them may be)
Social Security does not belong to the government, it belongs to the citizens of America who have paid their dollars into this program, the citizens of America did not create this program, nor did they expect the government to take care of them before the government created this program.
In addition, fewer and fewer Americans depend upon Social Security as their retirement income, as most Americans know their investment, into their future, was not in their future but in buying weapons, creating wars, and other things I shall not mention.
In a comment to Mr. Jacks Commentary, “that the people of America can not and will never in good conscience allow our elderly, regardless of the reason, to lie homeless on the streets” - Is a fact!
On the other hand, does our government have the same ethics?
Every word in Mr. Jacks Commentary is truth, and fact. Who or what killed Social Security. Do I need to spell it out, or is it very clear in the minds of those with some logical thinking?
Brook, what exactly is “A person of the people”? This is what you state you are, so what is it or this or whatever such a person is when they are “A person of the people”?
We are a country that takes pride in helping those who need help, a country that does not allow our older citizens to die in the streets. Those who choose to be homeless, and those who choose not to work, do not fit into the category of those we must help, yes in the beginning, but after awhile, those who are not willing to work, and continue to demand the government support their lifestyle fall into a different category. This group of people we may call “users and takers” they abuse the help provided by government agencies. This however has nothing to do with Social Security, and people expecting the government to take care of them, There are very few of “Users and Takers” in this country, the majority are “Givers and Helpers.”
The comment about “The duty of the US Government to baby-sit some of its citizens, in relation to “preserving rights” does not relate to the “taking away rights to help out the less fortunate. Three different subjects, three different problems, one of which being “babysitting the duty of the Government”.
What is wrong with some of you? Have people become so hard and without feeling that to help a needy person, is considered babysitting?
This is America we help each other. Now it seems as if America is turning into a country of people whom only care about their own self, and would walk over a dying person, starving in the street, thinking not of the person starving but of the inconvenience of stepping over the body.
Suzanne
Sean Says: December 6th, 2007 at 1:05 am
LIBERALS SHOULD NOT HAVE A WEBSITE DEDICATED TO THEM TO BE LAUGHED AT! CONSERVATIVES ARE WHAT CAUSED GREATER FINANCIAL INEQUALITY FOR AMERICANS!!! THAT IS A FACT THAT SHOULD BE LAUGHED AT!
Buck Evinger Says: December 6th, 2007 at 11:03 pm
Sean,
What the heck are you talking about?