Here’s an Idea: How About a Real Social Security Trust Fund?
No, not the one we have now — which is neither a “trust” nor a “fund.” My idea is an actual trust, with an actual fund.
Here is the way the current “trust fund” works, based on the official explanation on the Social Security website: all money is “invested” on a daily basis in “special issues” of the U.S. Treasury, which are not marketable securities like other Treasury securities but supposedly provide “the same flexibility as holding cash” since they can be redeemed at any time — assuming the Treasury can later borrow enough money to pay them, since the government immediately spends the money and no longer has it when the time for repayment comes.
When your taxes are paid into the “trust fund,” the cash actually (in the words of the website) “goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.” Translation: there is no Social Security “fund,” much less one held in “trust” by trustees complying with normal fiduciary standards in protecting your retirement assets. The federal government gives the money to itself, spends it, and promises it will pay it back later.
You might think a shorter way to describe the Social Security “trust fund” would be as a mere accounting device, a paper account simply holding IOUs. The government apparently gets a lot of questions about this, because it shows up on the Social Security Administration’s FAQ page:
Q. Why do some people describe the “special issue” securities held by the trust funds as worthless IOUs? What is SSA’s reaction to this criticism?
A. Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
This answer reminds me of the one a friend of mine gave that got him off jury duty. One of the defense lawyers questioning him as a prospective juror said: “This is a lawsuit against my client, which is a large insurance company — do you think you would be unduly prejudiced against such a defendant?” My friend thought for a moment and answered: “Unduly prejudiced — no, I don’t think so.” He was dismissed.
When the Social Security trust fund gives its money to the government, which spends it and provides simply a promise to repay, does the trust fund only get “completely worthless IOUs” to hold? No, not completely.
But they are IOUs just the same, just like any other IOU of the federal government (except that, unlike public debt, they cannot be sold on the open market by the “trustees”). When there is a problem — say a debt ceiling that can’t be exceeded, or a downgrading of government debt that makes it hard for the government to borrow much more (including amounts necessary to pay the “special issues”), or a limit is reached to the taxes the government can impose on the people to fund prior obligations — Social Security recipients suddenly find out that their “trust fund” is at risk, and that they are running risks no different than your average Chinese creditor.
It turns out neither Grandma nor the Chinese has a trust fund. Grandma has only a website that tells her: “I took your money and spent it, but don’t worry — I replaced it with an IOU and I will hold my IOU for you in trust. Don’t let anyone tell you it’s worthless — I’ll borrow some money from some other people later on to repay it. And I can keep doing this indefinitely.”
The federal government is fortunate it is not bound by generally accepted accounting principles (GAAP), or by the Sarbanes-Oxley law, or by the criminal statutes relating to Ponzi schemes. If it were, the Social Security “trustees” would be in jail. One can only imagine the cross-examination of the “Managing Trustee of the Trust Funds” (currently Timothy Geithner) on how he gave the money to the secretary of the Treasury (currently Timothy Geithner) in exchange for Geithner’s promise to repay Geithner, who won’t be around when the repayment comes due.
So here’s my idea: an actual trust, and an actual fund. Instead of the federal government “investing” in the federal government, invest the money in the Social Security fund in the securities of American companies, through publicly-traded mutual funds. It would be a balanced approach (which should be sufficient to get President Obama’s backing for this idea): an equal mixture of stock and debt in publicly-traded companies on the New York Stock Exchange.
There are many advantages to this idea, beyond the obvious one that it would put actual assets into the fund that the government could not get its hands on: First, it would mean that the federal government, instead of investing in itself or simply spending the money, would be investing in America.
Second, the federal government would be putting more money into the country’s capital markets, instead of borrowing from them in ever-increasing amounts.
Third, the federal government might become a little more sympathetic to the need for tax relief for American companies, currently paying one of the highest corporate tax rates in the world, and for relief from burdensome regulations, and the continually increasing costs of simply hiring employees. If the government invested in funds holding the stock and debt of those companies, it might be more concerned about the need for those companies to prosper and grow, even if it took a lower tax rate, less federal mandates, and a few corporate jets to make it happen.
Fourth, the history of investment returns indicates that anyone investing long-term in a balanced mixture of stock and debt of American companies has generated significantly greater returns than simply investing in the debt of the federal government. The Social Security trust fund would have more money to provide for the retirement of Americans — which was the original purpose of the fund before it became a cash cow for other goals.
In 2004, President Bush proposed that younger people have the right to invest a portion of their Social Security taxes in a private investment account for their retirement. Both Democrats and Republicans in Congress rejected that idea. They thought it wouldn’t be prudent to let people control their own accounts. They feared it would take away from other things they wanted to do with the money until “the out years.” They liked the “trust fund” the way it was, especially its reassuring name, although some proposed it be renamed a “lockbox” to provide further assurance.
My idea is to let the taxes remain with the government, but require them to be placed in investments that will be better for everyone, and keep the fund honest in the process. Think of it as an actual fund, held in actual trust, for the benefit of the beneficiaries, rather than the government.
Science fiction. There is nothing on this Earth that politicians cannot find a way to steal.
They can’t steal back their lives if we take them. That’s unpleasant, but may well be what is required to stop the pilferage.
AlGore had a lock box.
I have a retierment fund.
The government will eventually nationalize it and give me bonds for it.
I do not need to give them more money that I will never see.
http://www.youtube.com/watch?v=7GSXbgfKFWg
hmmm, sounds familiar…
Under Democrat regimes, such a fund would become a massive weapon used to bolster pro-union and “green” companies while being denied to “right to work” and other politically incorrect companies. The size of this fund would rival all private investment in industry, and it would become a primary weapon used to smash the free market forever.
We are now suffering the dreadful economic effects of government using scads of taxpayer money to skew the marketplace. Do we really want to amplify the damage?
That’s only true if government is allowed to direct its investments. Why do you think that would be the case? Do you also think it is inevitable that Obama will be re-elected?
Objecting to improvement on the ground it is not perfect and incorruptible is silly, I think.
Who do YOU think would direct government investments?
And, don’t be so quick to label others as “silly,” chum.
Bebula is absolutely correct Tom. If you thought Freddie and Fannie were, are, corrupt wait until this idea comes to pass.
GE got themselves into a load of financial trouble during our continuing crisis. They were caught in the whirlpool, and that giant sucking sound was making a lot of people nervous. To escape the whirlpool, Immelt crawled right into bed with Obama, and he is still there, doing whatever favors need to be done to get new government contracts and legislation to help GE. He even laughs loudly at all of Obama’s not-so-funny jokes, like about “shovel ready” not being very shovel ready. Immelt, sitting next to Obama, guffawed.
This administration has taken crony capitalism to new lows (We feared Cheney and Haliburton might be carrying on under the covers– if only that was the worst case scenario.
After watching this administration do unmentionable acts with every union whore around, and regular sleepovers with GE, everybody should have a very healthy fear of what government might do with Social Security cash, if they were able to really get down and dirty with it.
When you read the writings of Jefferson, Adams, et al, you find repeated warnings about government, and how difficult it is and will be to keep government from destroying everybody’s liberty.
Take heed. We are where Jefferson feared we might go.
anson, bart, bebula:
Thanks, you folks exposed the “crux” of dissent to this essay right away.
Perkins:
After reading your response to KZ@1, I wondered if you were serious, or why you might have another motivation such as “just trolling” or “crazy-baiting.”
You took the bag off the cat with your post @4.1, ending:
“Objecting to improvement on the ground it is not perfect and incorruptible is silly, I think.”
Specifically your response begs the question “What is an improvement?” – to which anson, bart, and bebula had already offered “THIS IS NO IMPROVEMENT!” as a response. I concur with them.
But I’m still troubled about your response @4.1, especially with respect to that @2. So I submit to you:
One might propose that “Random mass-extermination frees the demand on goods and services and should therefore be an option in limited-resource planning.” Another might agree that while “not perfect and incorruptible” such might be a responsible option.
Others still might see BOTH as being unconscionable and ultimately quite stupid, with both “limited-resource planning” and “freeing the demand on goods and services” being new questions begged.
Please re-read the blog, then the above-referenced comments. Then, please post back so that I will know how to resolve my original quandry about your comments.
??
Why do you think it would not be the case? Who else would direct the “investments”? Do you really thing the statists would allow such a massive change in one of their pet programs without making sure such a powerful weapon remained under their control?
Pointing that a proposed change is an invitation to a worse disaster is hardly the same as objecting to an improvement simply because it is not perfect.
Yes, and it would also be the target of every financial/Wall Street investment entity to direct its investment their way, promising and bribing everyone along the way while collecting exhorbitant fees for their services. Much like the investment of other public and private pension funds.
Consider the State Pension Funds- managed by state employees for the benefit of themselves and other state employees. Sure, they have some limitations on what they’re allowed to invest in, but their primary goal is producing a sufficient return to pay the pension obligations. They don’t politicize their jobs, because they can’t afford to. They know that the unions will be screaming at them if the money isn’t there to make pension payments.
Yes. Here’s how it works. You VOLUNTARILY take a little money each week from your paycheck and put it into a special account and collect it, with some interest upon your retirement. The account would be in a PRIVATE BANK and it could be called something like an individual retirement account – an IRA for short. It’s catchy and easily remembered.
Oh, wait a second…
How about the government just make participation in the Social Security system optional and let us take OUR OWN money, which they confiscate, and invest or save it ourselves. We could save billions in administrative costs by eliminating the SS Department.
If you left it in the stock market, it might have lost some of its value. It’s much better that the government took it and spent it all. It’s backed by the full faith and credit of the United States, and besides, they can just decide to pay you less when you retire – or nothing at all. Bernie Madoff was such a piker.
No wonder they need to use force to collect the money. No sane person would voluntarily participate.
Bernie Madoff, indeed. The man most qualified to manage this country’s finances is sitting in jail.
Not going to happen. No politician can look at a dollar and not think “Mine! Mine! All mine!” Professional thieves are more honest — with themselves, at least.
If Social Security is not ended completely within ten years, it will crash so catastrophically that the Sendai earthquake will look like a mild breeze in comparison. Even should that unthinkable step be taken, the trillions of “special issue” T-bills in the Social Security account would remain to be paid off — and that’s never going to happen, either.
How about calling government involvement in charity, retirement planning, and healthcare what it is; an un Constitutional, very, very, bad idea. The nation can not survive this sort of Ponzi scheme in any form.
Rick, you need to read the Supreme Court case Helvring vs Davis. This is from May 1937. The Court decided that Social Security was constitutional with two conditions:
1. That the employer and employee contribution goes into the general treasury.
2. That these funds cannot be earmarked for a specific purpose.
This means that Social Security is just a flat tax and Congress can spend the money on just about anything. In 1937 the average life span was about 59 years old and you did not start collecting benifits untill age 65. This was a huge cash cow for the government untill folks started living longer in large numbers and recieving benifits. The purpose of the special bonds is to fool the public into thinking that the money will be there for them in the future. Look since Social Security is just another tax and we really can’t make any legal claim on it, the funds are distrubted as welfare payments. I know that nobody wants to hear this, but just read the court case and you will understand. Most of the money paid out today is borrowed on the backs of our children and the money that you paid into the system went to your parents checks. There is no real trust fund and it never was from the start.
Goodness gracious, you mean that all these organizations and Members of Congress who keep selling the idea of lockboxes and wanting to protect us from the the lurkers who nightly prowl the halls of Congress pilfering money from the (apparently unlocked) Social Security Trust Fund are just blowing smoke? Boy, that’s a relief, one more thing we don’t have to stay awake nights worrying about!
Oh, wait! You mean there aren’t even any worthless IOUs? But we can trust The Government to keep its promises, right?
You misrepresented the legislative and legal facts of the case at the time….especially why the point of rulling re ‘general funds’ was relevant!
SCOTUS has proved itself for generations to be either unable or unwilling to rule according to the plain and obvious meaning of the Constitution, so I couldn’t care less what they ruled in 1937. As I understand it, one justice switched his vote from ‘against’ to ‘for’ b/o Roosevelt’s threat to get a law passed increasing the # of justices to 17; it was known as the ‘switch in time that saved nine’. SocSec is unConstitutional. The authority to force the citizens of the States into a Federal retirement/disability/medical plan at gunpoint is not listed in the enumerated powers. If a state wants to do such a foolish thing it may, and people may vote with their feet.
The only debate we should be having now is not how to ‘save’ SocSec, it should be how to least unjustly end it. But we won’t do that. We the People are a wicked and lazy sovereign, hiring ministers who trample on our foundational Law while the rot spreads and the poor suffer. This does not end well.
I did not misrepresent anything. The holding is from Wikipedia. The pols were telling the people one thing and the courts something else.
Doc, you are right about SCOTUS. They have made many bad choices and we pay the price.
Maybe do your research from first hand resources and more legitimate summary and detailed backgrounding. You fail to bring forth the adversarial legal points that moved the case before the Supreme Court. At best, your wiki source should only be a starting point in your research if you don’t know where to start.
T.T Thomas, you can spend all the time that you want looking at thre nuts and bolts of the case. You can state what they should have done, but they did what they did. Mark Levin in his book Liberty and Tyranny on page 101 claims the same as I am. He is a pretty bright guy and out of my league. Go discuss the case with him and see where it goes.
SCOTUS has a long history of ruling contrary to the plain language of the Constitution.
Just because the federal government (SCOTUS included) has gotten away with it so far does not make it morally right, wise, or even legal.
There are many dozens of such rulings being enforced today as if they were legal. It is naked power disguised as legality.
It does not help the cause of liberty to go along with this charade.
You have a valid point Mark v . All I an saying is that the progressives tricked the public into believing this line of bull. As long as the checks keep on coming, most don’t care. The real question to ask is what generation will step up to the plate and stop the generational theft. This will be the greatest generation, for they will be an active partner in saving our Republic.
Your idea sounds like something Bush proposed about ten years ago and as I recall, it was demagogued to death.
That’s because Bush wouldn’t incorporate the #1 objective of every Democrat into his plan: Take the money of all the people who contributed, add an appropriate amount of interest (depending on the economy) & hand it over ONLY to those who didn’t put in a dime.
Social Security can be saved if congress just seizes all government pensions and puts all government employees into Social Security.
Do you really believe that all those government pensions are actually funded by billions of dollars invested by the government and earning dividends? That money is in the same kind of trust fund. It’s labeled “unfunded obligations”, and it amounts to over 100 T-rillion (not B-illion) dollars now.
Roll all those government pensioners into Social Security and the benefit is that they will be entitled to a lot less money when they retire, but they would not be bringing any stored up money with them.
How about individuals are responsible for their own retirement.
Period.
What an old fashioned idea eman, you must be one of those ignorant hillbillies clinging to your guns. Of course, many of us have prepared for own own retirement instead of thinking social insecurity would provide. Many of us are debt free, own our own home, etc. If DC tries to nationalize (steal) personal retirement accounts the ballot box must be exchanged for the other box.
Why not look at something like the Federal Employees TSP program? There are a number of managed funds from which you choose to distribute part of your retirement contribution. More info at http://www.tsp.gov.
I don’t know, that plan would only work if we could change the culture. What do you think the odds are of developing a culture that when anyone, Senator, Congressman, small child, community organizer, president or beloved star of screen and stage, said “We could use the Social Security…” they are immediately and without recourse, executed? That is the only way to keep the money from being absconded with. Otherwise, at some point, there will be “crisis.”
BTW, the “reserve” fund was absconded with even before they got a handle on the whole scheme. Here is a Life article from 1939, 2 yrs after enactment, that explains the
scamscheme.wouldn’t brag too much about the gov. ee TSP fund. weeks ago i heard on the news some slight mention that odummy has already raided the ‘G’ fund, the largest and supposedly safest fund in the gov. retirement scheme. probably true since the lame media isn’t really reporting on it. if it is something bad about their saviour, it is hard as he!! to find out the truth about it.
btw – as a young man i worked on some of those ‘great society’ projects they used our SS $$$ to pay for, and in no time at all new buildings were turned into …well, you know. when they move them into nice neighborhoods here at our expense, you can spot the place by the trash thrown everywhere.
there is really nowhere to hide $$$ from the politburo. there is nowhere commies will not go to get our $$$. just look at all the special perks they vote for themselves, and they are many. superduper healthcare, perk after perk after perk. just like in all communist countries.
might as well get ready, this is not going to end well.
On the surface not a bad idea. HOWEVER, do not forget the fact that with Obama and the Auto unions and a federal government masacur of the auto business, several hundred years of contract law was trash-canned and bond holders were simply told tough doo-doo baby.
Our government has turned into the largest collection of con-artists, thieves and just plain criminals in one place, at one time, in the history of the planet. They will do whatever they need to do to consolodate and hold on to the a seat at this most powerful (and criminal) “Club” in the history of man.
Rick Richman; what a wonderful idea but you must be very young. What you are proposing here is nothing really new. It’s called “privatization” an idea that the Democrats, relying on the ignorance of a large majority of the senior citizenry and citizenry in general, have successfully fear mongered as “extremely dangerous and risky.” This, like so much of what the Democrats assert, is nonsense. To suggest that private pension funds, those offered by almost every large corporation in America, are rife with risk is to demonstrate an extreme, biased ignorance of the facts.
Here’s a one page overview of pension law. http://topics.law.cornell.edu/wex/pension
Conversely, to suggest that the Government is the epitome of fiscal responsibility, efficiency and ethical behavior is laughable in the extreme.
The Employee Retirement Income Security Act (ERISA) was passed in 1974. This act provides strict ground rules and controls governing the administration of pension funds and income protection insurance for what are called defined benefit plans like mine, which provide a fixed monthly income to pensioner and spouse for both their lives. I’ve been collecting from this pension, without interruption, since 1991.
It is quite likely that this law could be modified if necessary to increase protection for pensioners in the case of pension plan failures which will inevitably occur (http://money.usnews.com/money/blogs/planning-to-retire/2009/09/04/the-10-biggest-pension-failures). ERISA already provides for this with the “Pension Benefit Guaranty Corp. (PBGC), a government agency that insures defined benefit, private-sector pension plans and pays out benefits if the plan fails.”
This suggests a slightly different version than that of Mr. Richman. The Government should do the following:
o End the fear mongering by telling the truth. Correct the impression the politicians, particularly the government centered Democrats, have created that privatization is a bad thing.
o Restructure and re-task the Social Security Administration using the PBGC as the model. SSA would become an insurance agency providing income protection for those whose pension plans fail. This should ultimately eliminate the looming Social Security financial meltdown.
o Promote expansion of existing retirement planning vehicles such as IRAs, 401Ks, tax deferred savings plans, etc. to be managed by existing, private financial institutions, banks, insurance companies, brokerage houses, etc. to act as strictly regulated and monitored trustees for the purpose of retirement planning.
o As is now the case, every employee selects a basket of investment vehicles, mutual stock funds, bond funds, ETFs, TDSPs, etc. commensurate with considerations of risk vs reward; personal decisions which can be revised on an annual basis.
o Employers who are now required to pay into the existing Social Security system will continue to collect those funds and make those payments but deposit them at their private pension institution of choice who will manage them according to the established criteria.
o No employer, large or small, can be affiliated with any of these institutions which, as a Trustee, must remain independent of all conflicting influences. No employer will have access to these funds.
o Trustees will be required to report the results of their efforts annually which must meet certain minimum standards established in the law.
o Individual participation in self initiated retirement planning should be encouraged and allowed to continue.
It is no doubt more complicated than as Mr. Richman suggests or as presented here but not excessively so. Private pension plans have been around for a very long time and, despite the highly touted failures, the majority function quite well as does Social Security. But the key difference is that private pension funds are not allowed to use the funds they’re entrusted with and replace them with worthless IOU’s. They’re replaced with marketable instruments, investments in American enterprise that have historically and consistently produced above average returns. The Governments contention that their IOU’s have the same value as the cash they replaced is ludicrous and clearly demonstrates the typical Government attitude that in a pinch they’ll just print more money or raise taxes, neither of which can even remotely be considered sound fiscal policy, a practice strictly forbidden in the private sector. What monumental, arrogant, irresponsible hypocrisy.
Actually, I’m for a system in which every employed American pays some rate into a mandatory ‘taxed’ system as provided by the current type social security system….and then [means tested] at time of eligibility. The only problem with the system is it has historically been robbed from by the congress, which could easily be fixed. Everybody should have a ‘stake’ in the welfare of not only themselves but the society they co-exist within IF, they wish to stand as a society….unless, a society wishes to execute all who become non producers regardless of circustance.
Next! The social security act should be amended to free ALL employers from extending ANY social types of benefits (employer based welfare entitlements) to ANY employee. Now watch and listen to all the folks in denial that they’re happy socialist entitlement recipients by choice and demand. Folks of means should be ‘responsible’ for all their own goods and services choices and needs. That would have an overnight positive effect of the gross and arbitrary inflated values of goods and services in America!
All to many folks who claim so righteously, to dispise the abortion at the frontend of lifes cycle, seemingly have no problems with abortion mentality at the back side of life.
That might be a good idea. Now all you have to do is get a Constitutional amendment passed allowing for it. Otherwise it’s illegal. Let’s quit breaking our own foundational Law. And please don’t quote some SCOTUS decision. When SCOTUS continues to maintain that the Constitution forces every state to allow a woman to have her unborn child killed up ’til the moment of birth w/o meaningful restriction, one can assume they are incompetent or unwilling to rule according to the plain and obvious meaning of the document.
Hey, its constitutional amendment season! Whats an additional amendment or two…or three.
Kinda funny actually! Folks across all political parties have, for 50+ years, been enamored and chasing the European model. Now that they finally realize they’ve achieved it for some time, they want to run out and do some constitutional amendments to reverse themselves.
Not all parties. I suspect the Constitution Party has no desire for any amendments. I certainly don’t want any; I just want to follow the Constitution as written. If we did so large swathes of Fed rules/regs/laws would disappear, allowing business to boom, wealth to mushroom, freedom to reign.
But We the People couldn’t care less what our own foundational Law says. This does not end well.
Doc…you have my full appreciation for that commenting. Sadly, we’ve become a nation of fickle people regardless of how educated and genius they want to claim.
best wishes!
“IF, they wish to stand as a society….unless, a society wishes to execute all who become non producers regardless of circustance.”
Really, these are the two choices? We must either pay for those without sufficient retirement funds or excute them? With thinking like that you can see why we are in this mess.
I think we can agree that there should be a safety net in our society. The problem comes with our concept of entitlements and the notion that they should be supplied liberally, without stress to the recipients, and while preserving all of the dignity that normally accures from living a self-supporting life.
Does that sound harsh or cruel? Well so is life. Our formerly free society has done a great job overall in reducing poverty and raisng the average standard of living. But keep pressing these ideas – we need to add yet another example of the failure of socialism so that just maybe our great great grandchildren will get the idea.
I’m just following up on the mentality expressed on here by so many. Non producers, regardless of circumstance, it appears, are the dregs of our society……
Did you miss my last little paragraph?
["All to many folks who claim so righteously, to dispise abortion at the frontend of lifes cycle, seemingly have no problems with abortion mentality at the back side of life."]
If you have any solutions for the harvest being reaped from the seeds the people have sown over the past several decades, bring them forth to your congrssional legislators. All the puppies ‘barking’ on here should be sending their legislators their comprehensive solutions. Long on bark and short on reasonable solutions, maybe?
Since I have yet to collect the paper IOUs I have an idea: Why not carve out some few acres (10-20) from vast regions in this great land that have been set-aside by the likes of Bill Clinton and deed them to me? I’ll forfeit the SSI payments in trade.
If it could be farmed, mined, or fished from I’ll just put-off retirement a few more years, similar to the way they raise the retirement age in the hope folks croak before receiving any benefit payments. I’d rather be working with something tangible than waiting for a promise that may not arrive on time.
Did you mean ‘garden’ rather than “farm”? City folk misuse the term “farm’ all the time since the government set out a special definition for the suburban farmer. Farming is highly regulated and a very…did I mention very expensive proposition. When considering the breakout of ‘virgin’ ground for farming you better have an idea of what you’re doing….not that your dream has any chance of coming into fruition. I’d rather you envision breaking out a cancer city street or knocking down a cancer city trillion dollar condo for ‘farming than the nations conservation lands.
Oh you stated ["...and while preserving all of the dignity that normally accures from living a self-supporting life."]
Do you get around any at all? Millions work their entire adult life before going into retirement and then don’t haven’t a pot to pee in. Not because they were irrepsonsible with their incomes but rather, because they worked at and around minimum wages while raising a family. Most of the private sector doesn’t work in the union shops and most of the private sector non union jobs pay wages that barely keep up with inflation, if in fact it does. Inflation doesn’t stop when you retire either.
To many folks spend all their time in and around the cancer cities and haven’t traveled around mainstream America. Travel the thousands of towns 10K and less populations to view real America. Do a state by state check of the means income and working poverty data. Mainstream America is not what the elitist’s on sites like this purport it to be.
That there are large numbers of hard working people who remain forever below the poverty level due to the evils of capitalism is a myth perpetrated by statists, socialists and union leaders. In the end it is shortage of jobs relative to the number of available workers that keeps wages where they are. But the primary root causes for this are regulatory extremism, high taxation needed to support big government and inability to compete globally due to high wages/benefits and low productivity of union workers in certain industries. Those low paid private sector workers struggling to save for retirement need look no further for the cause of their plight.
It really kills me when union types complain on behalf of their private sector counterparts. The last thing they really want is to see everyone “unionized”. Because the only reason they can get relatively lavish pay/benefits and retirements is because the rest of us don’t. Think about it – if we all got those things the cost of everything goes way up and negates the wage gains; more jobs are lost overseas and the government grows even larger. What the #%ll – let’s go straight to socialism so everyone can see this clearly.
I’ve never been in a union, never advocated for unions but have a long documented history of anti labor union activism. That aside, your comment was very entertaining….and revealing.
I don’t believe it is legal for the Federal Government to take taxpayers money and invest it in the Market for any purpose. If they could, the Government could completely distort the market, just as if the Federal Government required banks give prospective mortgager loans to people who don’t meet historically developed requirements for ability to repay. It would be disastrous and break the banks, would it not?
That is why it was proposed that people could opt out of social security and put their social security payments into their own Social Security fund that they would manage and get any benefits from. The Democrats said absolutely not, the citizens might not invest properly, or at all, and end up in their retirement years having to borrow money just to pay for the interest on the money they have already borrowed. The Government claims that, just like Arizona, citizens cannot act like the Federal Government, and if they try the Government will sue them.
And so I think you made your point, that for any program to pay you back more than you paid in, or at least as much as you paid in, the money paid in is like “seed corn” and has to be invested wisely. The recipients will get additional repayments in the far future based on how wise the investments were over the intervening time, which is also the way “insurance” policy’s work.
Only Congressvarmints are smart enough to manage their own retirement fund. Of course, they get to use insider information to assist in their investments, while we get tomorrow’s newspaper, but I digress…. Harry Reid, for example, gets to make all manner of illicit and crooked real estate deals that are not even in writing, invest in stocks of companies that his committee is writing laws to help, and engage in general thievery. We get an IOU from Harry and his ruling class friends.
— “Here’s an Idea: How About a Real Social Security Trust Fund?”
Mmmmmm, no. Sorry. President Obama and the Democrat Senate would not approve.
That would require money. Which the United States of America no longer has.
On the other hand, we COULD take out another loan. Any takers? Aside from the Red Chinese?
” ….backed by the full faith and credit of the U. S. Government.”
The only entities that believe this tripe any more, is the CMA (Communist Media of America).
Does anyone understand that Social Security is based on people actually being paid wages and salaries that can be taxed FOR Social Security?
And when you have fewer people getting wages, what happens to the funding?
The Democrat Party and the CMA are still telling the American public that Congress and the President can get blood out of turnips.
Social Security and Medicare taxes are very destructive of jobs and productivity in the USA because they are assessed on employers whether or not the company is making money, and because they are costs US employers have to pay on hings made here and companies from other countries do not pay on things made overseas and shipped for sale here. There does need to be a social safety net for the old, infirm and unemployable, but other means should be found to fund it.
Do you understand that a business with zero employees pays zero for Social Security and Medicare?
And since the first of this year, Obama has signed into law, a 2% DECREASE in Social Security deductions from employees wages. THAT’S A 2% DECREASE IN FUNDS.
If you think Obama is doing this to be nice, you’re nuts. He wants to undermine the system, and make it so undesirable that Congress will want to eliminate it altogether.
What Obama lacks in experience, he makes up for with incompetence.
I paid $32.67 for a XBOX 360 and my mom got a 17 inch Toshiba laptop for $94.83 being delivered to our house tomorrow by FedEX. I will never again pay expensive retail prices at stores. I even sold a 46 inch HDTV to my boss for $650 and it only cost me $52.78 to get. Here is the website we using to get all this stuff, CentShack.com
Not gonna happen. The Social Security and Medicare taxes are regressive taxes that take a much higher proportion of the income of the poor than they do of the rich, and both the Democans and the Republicrats like it that way. One side can threatens that if the other wins the Congress and the presidency the peoples’ entitlements will be taken away, while the other side can warn that if the other side achieves power socialism and confiscation of wealth will happen, and point to how large a proportion of the INCOME TAX the wealthy pay – with no mention to the other taxes paid by the working poor. (The 110th and 111th Congresses have shown that the predictions are not far wrong, but that is another story.)
I like the idea of investing excess Social Security taxes. The issue of government manipulation could be addressed by including language in the legislation specifying exactly how the money must be invested in various indexes (e.g., the NYSE index or S&P 500 for the equity portion). The major problem with the idea is that there are no excess Social Security taxes projected in the current or future budgets. In fact, we will almost certainly be running deficits given the current Social Security system. So the legislation would have to cut Social Security benefits to current and prospective recipients (a good idea) or raise Social Security taxes (a very bad idea) to generate surpluses in future Social Security budgets.
We should have adopted a policy like this decades ago when the Social Security system was running huge surpluses.
Obama signed into law a 2% cut in Social Security deductions for employees the first of this year. Add that to the higher unemployment figure, and you have a higher percentage of S.S. taxes not even being collected.
Now, throw in the fact that “baby boomers” are increasing the S.S. rolls and expenditures, and you have another fine program unable to function because Obama had to screw with it.
Obama has the reverse Midas touch; He knows it and he uses it liberally.
I paid $32.67 for a XBOX 360 and my mom got a 17 inch Toshiba laptop for $94.83 being delivered to our house tomorrow by FedEX. I will never again pay expensive retail prices at stores. I even sold a 46 inch HDTV to my boss for $650 and it only cost me $52.78 to get. Here is the website we using to get all this stuff, CentShack.com
I really don’t care what happens to Social Security as long as I can get that xbox 360 for $32.67.
Seriously…
“Ponzi scheme”
…that pretty well sums up Social Security, except it’s the only Ponzi Scheme you ever heard of where the suckers are forced to take part in it at the point of a gun.
If you had any choice in the matter, and you STILL signed up for Social Security, you would automatically qualify for a brain transplant.
Big Surprises Uncovered in Fed Audit Written on July 25, 2011 by Ann-Marie Murrell
http://sanders.senate.gov/imo/media/doc/GAO%20Fed…
“Associate with men of good quality if you esteem your own reputation; for it is better to be alone than in bad company.” George Washington
Put the plan in private hands away from and out of the hands of politicians. We can not trust that politicians will use these funds for their own uses.
We should get the government out of insurance altogether. They can continue to collect employer/employee contributions. Then every ten years (not forty quarters) companies compete to sell a fixed annuity that makes monthly payments immediately (no waiting for a retirement age.) Work forty years and get four checks per month. Spend them however you like.
We eliminate unemployment insurance. No more 99 weeks. No more 26 weeks. No more Nancy Pelosi trying to teach economics. If you worked for less than ten years… live with your parents, otherwise you have some emergency income.
Buy your own medical insurance. The government is out of the medical insurance business.
If you don’t plan for your retirement you’ll still have something and the government can’t touch it. After the first ten years, you’ll have a monthly income that you might want to spend to increase your retirement.
This is a real balanced approach that takes care of those that refuse to take care of themselves. Takes away the ability of the government to steal the money. Doesn’t put so much burden on people they can’t do for themselves. Almost treats people like adults.
A few more obvious rules. Every ten years you must buy the annuity from a company you do not already have an annuity with. These companies are forbidden from merging. They must hold your lump sum payment in diversified assets. When you die they keep the balance so will be able to make better rate offers in the future.
If you don’t like the idea of those companies keeping the principle spend your own money on stocks and bonds you can will to your
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. . . The idea below (FROM ARTICLE) stinks (imo) unless it is stipulated that a stop-loss occurs when the MARKET takes a dive… AND, a padlock needs to be placed on it, to NOT allow any part of government to ever take money from it and just leave a worthless IOU. . . Before that, Social Security needs to call in the IOU debts and add back to the SS FUND. . .
So here’s my idea: an actual trust, and an actual fund. Instead of the federal government “investing” in the federal government, invest the money in the Social Security fund in the securities of American companies, through publicly-traded mutual funds. It would be a balanced approach (which should be sufficient to get President Obama’s backing for this idea): an equal mixture of stock and debt in publicly-traded companies on the New York Stock Exchange.