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Invisiblecarbonhoots
old hand

Registered: 09/11/01
Posts: 1,351
Loc: BC Canada
Ol' Bushy's war on social security
    #3444483 - 12/04/04 03:41 AM (12 years, 7 days ago)

Some of you think this it's such a great thing that the government is moving away from public pensions.

Let me state clearly that there are no free lunches here,"

WASHINGTON - Calling the current system of Social Security benefits unsustainable, a top economic adviser to President Bush on Thursday strongly implied that any overhaul of the system would have to include major cuts in guaranteed benefits for future retirees.

"Let me state clearly that there are no free lunches here," said N. Gregory Mankiw, chairman of the Council of Economic Advisers, at a conference on tax policy here.

"The benefits now scheduled for future generations under current law are not sustainable given the projected path of payroll tax revenue," he added. "They are empty promises."

Mr. Mankiw's remarks suggested that President Bush's plan to let people put some of their Social Security taxes into "personal savings accounts" would have to be accompanied by changes in the current system of benefits.



Throughout the presidential campaign and in remarks after he was re-elected, Mr. Bush focused almost exclusively on these accounts as a crucial way to shore up Social Security. Most experts have said that the accounts must be accompanied by other belt-tightening measures. When asked about cuts in future benefits, Mr. Bush, however, has said only that any overhaul should make no changes in the benefits for people in retirement or near retirement. The president has said that overhauling the Social Security system would involve "costs," but so far he has not indicated what those might be.

In his speech, Mr. Mankiw flatly rejected raising taxes as a means of saving the federal retirement system, which government actuaries say is on track to become insolvent by 2042 if no changes are made to the current law. Instead, he took particular aim at a specific feature of current law under which retirement benefits are linked to the rise in wages rather than the rise in consumer prices.

"Each generation of retirees receives higher real benefits than the generation before it," Mr. Mankiw said. Because wages typically climb faster than inflation, he said, an average worker retiring in 2050 would get benefits that are 40 percent higher, after inflation, than a comparable worker who retires this year.

Mr. Mankiw emphasized that Mr. Bush has yet to decide on a specific proposal for fixing Social Security, except that it would have to include personal accounts and that it would not include raising taxes. But the issue he highlighted is at the center of a major debate within the administration and among Congressional Republicans.

Policy analysts say changing the way benefits are calculated could save trillions of dollars in decades to come. But it would imply significant reductions from the benefits promised under today's laws. The idea behind personal accounts is that workers, by making investments in stocks and bonds, could more than make up the difference with extra earnings.

In what seemed an effort to anticipate complaints that a new system would reduce future benefits, Mr. Mankiw warned that the benefits promised under current law are fictitious because they cannot be afforded.

"Be wary of comparisons between a new, reformed Social Security system and current law," Mr. Mankiw said. "Unless a listener is discerning, empty promises will always have a superficial appeal."

Claire Buchan, a White House spokeswoman, said Mr. Bush had not decided on a specific plan and refused to comment on any need for reductions in future benefits.

"The president is committed to strengthening Social Security for younger workers so they don't face the massive tax increases or benefit reductions that are certain with inaction," Ms. Buchan said.

The specific issue that Mr. Mankiw highlighted on Thursday, though seemingly obscure, involves the level at which a person's initial benefit is set at the time he or she retires. Under the current formula, which was established by Congress in 1978, the annual benefit is pegged to increases in average wages while the person was working.

The idea was to keep retirement incomes in line with overall wages from generation to generation, and analysts said the formula was far more generous than simply pegging benefits to inflation.

Kent Smetters, a former Treasury official under President Bush who is now an associate professor at the Wharton School of Business, said linking benefits to inflation would in itself save trillions of dollars. But Professor Smetters said the idea was not as tame as it sounded. Although retirement incomes would not be eroded by inflation, the guaranteed benefits of retired people would be lower, and lower than average incomes, as time went on.

Copyright 2004 The New York Times Company


Edited by carbonhoots (12/04/04 03:43 AM)


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Invisiblesilversoul7
Chill the FuckOut!
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Registered: 10/10/02
Posts: 27,301
Loc: mndfreeze's puppet army
Re: Ol' Bushy's war on social security [Re: carbonhoots]
    #3444509 - 12/04/04 04:00 AM (12 years, 7 days ago)

Can you please stop referring to him as "Ol' Bushy"? It's extremely annoying. kthx


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"It is dangerous to be right when the government is wrong."--Voltaire


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InvisibleRandalFlagg
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Registered: 06/15/02
Posts: 15,608
Re: Ol' Bushy's war on social security [Re: carbonhoots]
    #3444511 - 12/04/04 04:02 AM (12 years, 7 days ago)

I don't understand what you are trying to get across here. You seem to be for public subsidized retirement benefits and against Bush's idea to allow taxpayers to "hang on" to and invest more of their money, yet you post an article that quite clearly shows that the benefits that are promised to future generations under Social Security CANNOT be paid for.

We can't afford to give all of the future retirees a ton of money. There just aren't enough taxpayers to support that. The only way to fix the problem is to cut benefits or raise social security taxes drastically. It looks as if privatization(if done correctly) is the only thing that can save the whole disgusting mess.


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Invisiblesilversoul7
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Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3444540 - 12/04/04 04:14 AM (12 years, 7 days ago)

Seriously. Even when I was making minimum wage at my last job, the social security taxes really fucked me over, and I'm not even going to see the benefits of that money if social security keeps at its present course. If that money hadn't been taxed away, I might not have to mooch off my parents so much, which would allow them to save more money for their retirement.


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"It is dangerous to be right when the government is wrong."--Voltaire


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OfflineAhronZombi
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Registered: 04/06/04
Posts: 1,265
Loc: NY
Last seen: 2 years, 6 months
Re: Ol' Bushy's war on social security [Re: silversoul7]
    #3444544 - 12/04/04 04:16 AM (12 years, 7 days ago)

screw the system screw ss and screw bush too


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Offlinelonestar2004
Live to party,work to affordit.
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Registered: 10/03/04
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Re: Ol' Bushy's war on social security [Re: AhronZombi]
    #3445168 - 12/04/04 10:48 AM (12 years, 7 days ago)

i have a 401k that i pay into, because there is no way s.s. will be around when i get old. i would love to be able to use some of the money s.s. takes out of my check and put into my 401k.


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America's debt problem is a "sign of leadership failure"

We have "reckless fiscal policies"

America has a debt problem and a failure of leadership.

Americans deserve better

Barack Obama


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InvisibleDNKYD
Turtle!

Registered: 09/24/04
Posts: 12,326
Re: Ol' Bushy's war on social security [Re: lonestar2004]
    #3445337 - 12/04/04 12:05 PM (12 years, 7 days ago)

It irritates the living shit out of me that I keep paying SS every month despite this junk. I know I won't see this money when I get old. They need to let ME put MY money into a private savings account that I have rights to, instead of feeding it to a ever-hungry federal monster.


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InvisibleXlea321
Stranger
Registered: 02/26/01
Posts: 9,134
Re: Ol' Bushy's war on social security [Re: lonestar2004]
    #3445364 - 12/04/04 12:22 PM (12 years, 7 days ago)

i would love to be able to use some of the money s.s. takes out of my check and put into my 401k.

And if a lorry ploughs into your car tomorrow and leaves you sucking soup through a straw for the rest of your life will you have enough in your private account to keep yourself?


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Don't worry, B. Caapi


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InvisibleRandalFlagg
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Registered: 06/15/02
Posts: 15,608
Re: Ol' Bushy's war on social security [Re: Xlea321]
    #3445407 - 12/04/04 12:40 PM (12 years, 7 days ago)

Social Security has nothing to do with paying for catastrophic medical bills. It gives a small monthly allowance to people who are above a certain age or people who are disabled. That small monthly allowance would never be able to pay for a life eating through a straw anyway.

My main problem with social security is not helping people who are sick, but the fact that it has become a behemoth of a retirement plan. A large amount of a worker's income is taken away from them and put into the social security fund. I would much rather have that money in my pocket and do what I wanted with it. I especially think that as things are now, it is not possible to fund the social security program at the current level. The U.S. federal government will have to borrow even more money to keep it going.

With the amount of Social Security tax I pay every month, I could pay for health insurance and put away a nice amount for retirement.


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InvisibleXlea321
Stranger
Registered: 02/26/01
Posts: 9,134
Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3445438 - 12/04/04 12:55 PM (12 years, 7 days ago)

Social Security has nothing to do with paying for catastrophic medical bills.

Not talking about the medical bills. I'm talking about from 3-5 years after the accident when you're unable to work and there's nothing left in the private bank account. What happens then?


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InvisibleRandalFlagg
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Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3445443 - 12/04/04 12:58 PM (12 years, 7 days ago)

Social Security has also become a vicious trap. Think of all of the people who have given large amounts of their income to the Social Security fund over their entire lives. Even people like me who are unhappy about all of that money being taken away from them are now faced with the opinion that they should get some of that money back. If the program were to end today, think of all of the people who are nearing retirement age who have contributed thousands and thousands of dollars to it. If benefits were to be cut partially or completely it is inevitable that a lot of these people would be enraged and feel ripped off.

So, part of me recognizes that Social Security is unsustainable. But another part of me realizes I have paid so much into it that I should get something out of it. What a socialist mess.


Edited by RandalFlagg (12/04/04 01:03 PM)


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InvisibleRandalFlagg
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Registered: 06/15/02
Posts: 15,608
Re: Ol' Bushy's war on social security [Re: Xlea321]
    #3445451 - 12/04/04 01:03 PM (12 years, 7 days ago)


Not talking about the medical bills. I'm talking about from 3-5 years after the accident when you're unable to work and there's nothing left in the private bank account. What happens then?

Will that $400 a month that you get from Social Security be enough to pay the bills? Hell no.

As I said, the "taking care of sick people" aspect of Social Security I don't mind as much. The thing about it that is really bothersome is that it tries to be a retirement plan. It takes away so much of a person's money that a lot of people are incapable of saving on their own.


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Invisiblelooner2
ABBA fan

Registered: 06/20/04
Posts: 3,849
Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3445475 - 12/04/04 01:11 PM (12 years, 7 days ago)

The reason SS is such a pitiful mess is because of the incredibly dense and selfish voting block between the ages of 60 and death. If you mention even reforming SS they will not think twice and vote you out instantly. Something needs to be done-- but thats been said for 10 years now. I propose euthanasia!


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OfflinePhred
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Registered: 10/19/00
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Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3445544 - 12/04/04 01:40 PM (12 years, 6 days ago)

People need to realize there is no such thing as a Social Security "fund". A "fund" implies a lump of money sitting somewhere -- presumably invested -- out of which can be drawn payments to recipients. This is not what occurs with US Social Security income -- it goes into the same general pot of tax revenue that income taxes do and is spent (overspent, actually) just like all other government revenue.

When an SS payment is made to some retired American, it isn't taken out of the "SS fund", it's taken out of general revenues. It is -- no exaggeration -- a textbook example of a Ponzi scheme.

pinky


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InvisibleRandalFlagg
Stranger
Registered: 06/15/02
Posts: 15,608
Re: Ol' Bushy's war on social security [Re: Phred]
    #3445554 - 12/04/04 01:45 PM (12 years, 6 days ago)

I was under the impression that the federal government's collected taxes and the collected social security money were kept seperate. I could have sworn I have heard that before.


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OfflinePhred
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Registered: 10/19/00
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Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3445565 - 12/04/04 01:50 PM (12 years, 6 days ago)

A lot of people are under that impression.

pinky


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InvisibleRandalFlagg
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Registered: 06/15/02
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Re: Ol' Bushy's war on social security [Re: Phred]
    #3445573 - 12/04/04 01:54 PM (12 years, 6 days ago)

Do you have a source on that?

Are you saying that the federal government's collected revenues and collected Social Security monies are all kept together in the same pot? And that Social Security monies can be used for other stuff?


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OfflinePhred
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Re: Ol' Bushy's war on social security [Re: RandalFlagg]
    #3445718 - 12/04/04 02:45 PM (12 years, 6 days ago)

Sure. Here's one. You can find dozens of others with a Google search.

http://www.fee.org/vnews.php?nid=4569

It's a very detailed article, well worth reading in its entirety, but here's the nitty-gritty --

Quote:

The Social Security Act of 1935 created an ?Old-Aged Reserve Account? in the Treasury and required that every year an amount determined sufficient to pay that year?s benefits was to be appropriated to it. Any of this money not needed for benefits was to be invested in federal debt (including unmarketable debt issued for this purpose) earning 3 percent interest, or other government-guaranteed debt.[4]




It is not a "fund", it is merely an account, no different from the account for Defense or Education or Immigration or Energy. At no time is there more in the account than is required to cover the anticipated payouts for the current fiscal year. It is an accounting convenience, nothing more. It most certainly is not a trust fund.

SS payments are not even deposited directly into the account -- the account is filled from general revenues (of which, obviously, SS payroll deductions comprise a part) collected by the federal government.

pinky


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Invisiblesilversoul7
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Registered: 10/10/02
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Re: Ol' Bushy's war on social security [Re: carbonhoots]
    #3445728 - 12/04/04 02:48 PM (12 years, 6 days ago)

One thing I've noticed in my experiences at various jobs I've had is that while income taxes may be targeted at the rich, Social Security tax was fucking me and all the other low-wage workers over. All on this false pretense that we were going to get it back someday. I think if we got rid of Social Security tax, it may be bad for some elderly people in the short run, but in the long run it would greatly increase the standard of living for low-wage employees.


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"It is dangerous to be right when the government is wrong."--Voltaire


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Offlinezappaisgod
horrid asshole

Registered: 02/11/04
Posts: 81,741
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Re: Ol' Bushy's war on social security [Re: silversoul7]
    #3446335 - 12/04/04 06:14 PM (12 years, 6 days ago)

And don't forget, kiddies, your paystub only tells you half the story. Your employer makes an equal payment, which could have gone into your gross wages if he didn't have to pay it to the gov.


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