Social Insecurity

[Value Buy]

We have all been discussing taxes and the fiscal cliff.

Let's talk Social Security.

My proposal:

Re institute the 2% reduction that has been in place for two years.
If the original amount was truly needed when implemented, it is more than truly needed in today's economy.
Remove the dollar limit currently in place where high earners do not pay in after that gross earning point.
This is definitely a 2 percenter fiscal advantage only available to high earners. If necessary, we could cap it at, ten million, but I feel the 2 percenters should then pay a higher gross income tax of 2% on all job related income to recapture this tax that only low income earners are forced to pay on their total earnings income. If this tax were to go to Treasury, rather than Social Security, it is still a win for the country.

Company contribution portion is capped at $175,000 tied to an inflation index for future years.
(Modified for failure to include the company contribution)

If retired, and have fiscal "gross earnings" of $300,000 or more, you do not receive Social security payments regardless of your true net earnings after deductions. To save paperwork, they would receive payment of social security, but would have to repay it to the Government when they file their tax papers.
Index this amount to yearly inflation.
This would more than save social security for decades.

Thoughts?

[mmhmm]

I don't see anything wrong with that proposal, Value Buy.

[djAdvocate]

Dec 30, 2012 12:29:04 GMT -5 Value Buy said:

We have all been discussing taxes and the fiscal cliff.

Let's talk Social Security.

My proposal:

Re institute the 2% reduction that has been in place for two years.
If the original amount was truly needed when implemented, it is more than truly needed in today's economy.
Remove the dollar limit currently in place where high earners do not pay in after that gross earning point.
This is definitely a 2 percenter fiscal advantage only available to high earners. If necessary, we could cap it at, ten million, but I feel the 2 percenters should then pay a higher gross income tax of 2% on all job related income to recapture this tax that only low income earners are forced to pay on their total earnings income. If this tax were to go to Treasury, rather than Social Security, it is still a win for the country.
If retired, and have fiscal "gross earnings" of $300,000 or more, you do not receive Social security payments regardless of your true net earnings after deductions. To save paperwork, they would receive payment of social security, but would have to repay it to the Government when they file their tax papers.
Index this amount to yearly inflation.
This would more than save social security for decades.

Thoughts?

there is only one problem with that, and it is mostly rhetorical.

if we MEANS TEST social security (something i have advocated for years), it will make it TRULY a welfare system. right now, it isn't. it is a mandatory pension system. so, if we do this (and i am wavering), it will load the rhetorical cannon against SS. fiscally good, but politically bad.

[Value Buy]

Dec 30, 2012 12:35:33 GMT -5 djAdvocate said:

Dec 30, 2012 12:29:04 GMT -5 Value Buy said:

We have all been discussing taxes and the fiscal cliff.

Let's talk Social Security.

My proposal:

Re institute the 2% reduction that has been in place for two years.
If the original amount was truly needed when implemented, it is more than truly needed in today's economy.
Remove the dollar limit currently in place where high earners do not pay in after that gross earning point.
This is definitely a 2 percenter fiscal advantage only available to high earners. If necessary, we could cap it at, ten million, but I feel the 2 percenters should then pay a higher gross income tax of 2% on all job related income to recapture this tax that only low income earners are forced to pay on their total earnings income. If this tax were to go to Treasury, rather than Social Security, it is still a win for the country.
If retired, and have fiscal "gross earnings" of $300,000 or more, you do not receive Social security payments regardless of your true net earnings after deductions. To save paperwork, they would receive payment of social security, but would have to repay it to the Government when they file their tax papers.
Index this amount to yearly inflation.
This would more than save social security for decades.

Thoughts?

there is only one problem with that, and it is mostly rhetorical.

if we MEANS TEST social security (something i have advocated for years), it will make it TRULY a welfare system. right now, it isn't. it is a mandatory pension system. so, if we do this (and i am wavering), it will load the rhetorical cannon against SS. fiscally good, but politically bad.

I disagree that it would be welfare.
The individual and their company they worked for had made the payments.
If it was not considered welfare before under this procedure, it would not be welfare now, imo

[Value Buy]

I am going to go back and modify my original proposal, as I left out one important issue.
Company contributions- I do believe their payment has to be capped at some point.
My proposal: $175,000 also tied to inflation index.

[djAdvocate]

Dec 30, 2012 12:41:32 GMT -5 Value Buy said:

Dec 30, 2012 12:35:33 GMT -5 djAdvocate said:

there is only one problem with that, and it is mostly rhetorical.

if we MEANS TEST social security (something i have advocated for years), it will make it TRULY a welfare system. right now, it isn't. it is a mandatory pension system. so, if we do this (and i am wavering), it will load the rhetorical cannon against SS. fiscally good, but politically bad.

I disagree that it would be welfare.
The individual and their company they worked for had made the payments.
If it was not considered welfare before under this procedure, it would not be welfare now, imo

ok, you disagree. that's great.

but how can it NOT be considered welfare if some qualify on the basis of income and others don't? or am i not understanding your proposal?

[resolution]

I like removing the cap and charging everyone the 2% again, but not the means test to receive payments. The lower payments for higher earners is already built into the formula, but if the rich receive nothing at all it is more likely to be perceived as welfare. I know its not really welfare since everyone has paid in, but we have also all paid income taxes that go to food stamps and that is considered welfare because you have to be poor to qualify.

I would also support moving up the retirement ages by a year or two, including the early retirement age. An exception could be written in for the disabled so they could receive early retirement at 62 even if they were partially disabled and didn't meet the full social security disability criteria.

[Savoir Faire-Demogague in NJ]

Milton Friedman on Social Security, in 1978/79... just as valid 30 years ago as it is today... video is 10 minutes and worth viewing.

[djAdvocate]

Dec 30, 2012 13:03:06 GMT -5 Savoir Faire-Demogague in NJ said:

Milton Friedman on Social Security, in 1978/79... just as valid 30 years ago as it is today... video is 10 minutes and worth viewing.

i disagree with the basic premise. there is always something in myth. in Freidman's case, a fair amount of hot air.

edit: there is so much falsehood in this speech that it would take me all day to dissemble it. but just to use one example, there is absolutely no implication of voluntarism in contribution insofar as it refers to social institutions such as SSI. on the contrary. contribution is often considered consequential, based on other actions. ie, when one (voluntarily) joins a charitable organization, he contributes to the betterment of mankind. the contribution in this case is a consequence of the voluntary action, not the other way around. it is ONLY when you think of something as a charity that the alternate meaning which Friedman asserts is considered, and i don't believe that anyone contributing to SS thinks of it as "charity".

but furthermore, and most fundamentally, Freidman presumes things about the relationship between the electorate and their government that are totally false. and he does it over and over and over again. his followers make the same mistake.

[djAdvocate]

the last line is also false. socialized medicine has had broad popular support for decades.

his analysis of what social security IS is correct. it is a pay -as- you -go system. there is no trust. and it is not an investment.

i can't speak to the propaganda of the 30's that was used to get SS passed. i have not studied it.

[rileyoday]

I like the proposal Value Buy. I could support that.

[Savoir Faire-Demogague in NJ]

Dec 30, 2012 13:44:52 GMT -5 djAdvocate said:

the last line is also false. socialized medicine has had broad popular support for decades.

his analysis of what social security IS is correct. it is a pay -as- you -go system. there is no trust. and it is not an investment.

i can't speak to the propaganda of the 30's that was used to get SS passed. i have not studied it.

I'll have to defer to you. You are definitely more intelligent and knowledgeable then one of the greatest philosophers and economists of the 20th Century.

What the heck was I thinking... Of course all Social Security does is keep people in poverty.

[Savoir Faire-Demogague in NJ]

the last line is also false. socialized medicine has had broad popular support for decades.


Sure, popular support amongst far left, radical politicians wanting to control your life.

[djAdvocate]

Dec 30, 2012 14:39:50 GMT -5 Savoir Faire-Demogague in NJ said:

the last line is also false. socialized medicine has had broad popular support for decades.


Sure, popular support amongst far left, radical politicians wanting to control your life.

oh, i am sure that all six of them would like it to. but i was referring to the majority of Americans polled on this subject between 1988 and 2009.

edit: what Friedman said in the 70's might have been true. people were probably not polled on the subject, so his claim that popular support COULD NOT BE SHOWN was probably TRUE. that doesn't mean that support didn't exist, any more than oil reserves don't exist. you need to survey it to prove it.

[djAdvocate]

Dec 30, 2012 14:39:04 GMT -5 Savoir Faire-Demogague in NJ said:

Dec 30, 2012 13:44:52 GMT -5 djAdvocate said:

the last line is also false. socialized medicine has had broad popular support for decades.

his analysis of what social security IS is correct. it is a pay -as- you -go system. there is no trust. and it is not an investment.

i can't speak to the propaganda of the 30's that was used to get SS passed. i have not studied it.

I'll have to defer to you. You are definitely more intelligent and knowledgeable then one of the greatest philosophers and economists of the 20th Century.

cut that out, dude. i am as dumb as a post. but that video that you posted is ridiculous. period. even smart guys say stuff that defies logic. Freidman is not immune to that. you need to stop worshipping him, and start questioning him. dogma is not healthy for free thinkers.

What the heck was I thinking... Of course all Social Security does is keep people in poverty.

sorry to blaspheme the church of supply side, SF, but it is what i do.

[Deleted]

"Thoughts? "

Except for adding back the 2% "stimulus" cut, you're advocating turning SS into welfare and advocating theft of benefits from one person to give to another.

Aside from re-instating the 2% cut, they need to cut everyone's benefits relative to their age and stimulus benefit they received. That would at least get the trust fund back to where it was a few years ago.



"his analysis of what social security IS is correct. it is a pay -as- you -go system. there is no trust. and it is not an investment."

There is a pool of money invested in gov't bonds, isn't there?

[djAdvocate]

Dec 30, 2012 15:22:23 GMT -5 @investorbob said:

"his analysis of what social security IS is correct. it is a pay -as- you -go system. there is no trust. and it is not an investment."

There is a pool of money invested in gov't bonds, isn't there?

i am of the mind that the pool of money doesn't exist.

[fairlycrazy23]

Dec 30, 2012 15:31:37 GMT -5 djAdvocate said:

Dec 30, 2012 15:22:23 GMT -5 @investorbob said:

"his analysis of what social security IS is correct. it is a pay -as- you -go system. there is no trust. and it is not an investment."
There is a pool of money invested in gov't bonds, isn't there?

i am of the mind that the pool of money doesn't exist.

No the trust fund exists and it has a lot of 'money' all if it invested in treasuries.
However, they should get rid of the trust fund and just have all the money go into the general fund.

But what will probably happen is as Social Security needs to draw upon the trust fund, the treasury will buy back the bonds from the trust fund, but then turn around and sell an equal amount to almost certainly the Federal Reserve.

[zibazinski]

I'm okay with no limits on how much you can tax. It isn't right but I can live with it. I can also live with raising the age of collecting it. What I am not okay with is the idea that I have paid for years and because I saved and "don't need it to survive" you can steal it from me. No way, no how, am I ever going to be okay with that. Like welfare, that rewards those who played for years and punishes those who didn't.

[djAdvocate]

Dec 30, 2012 15:39:30 GMT -5 fairlycrazy23 said:

Dec 30, 2012 15:31:37 GMT -5 djAdvocate said:

i am of the mind that the pool of money doesn't exist.

No the trust fund exists and it has a lot of 'money' all if it invested in treasuries.
However, they should get rid of the trust fund and just have all the money go into the general fund.

that is not my understanding. my understanding is that it "exists" as a book item ONLY. there is no reserve, no fund. the money is spent in the general fund even before it is collected.

[Savoir Faire-Demogague in NJ]

Another screw job by govt over the middle class... would you think anything else???
Social Insecurity as Milton Friedman calls it.... oh, wait, Friedman is an idiot according to DJ Poll Dancer....

xfinity.comcast.net/blogs/finance/2012/12/24/chaining-inflation-gauge-would-hurt-social-security-recipients/

“Chaining” Inflation Gauge Would Hurt Social Security Recipients

MoneyWatch) Among the policies lawmakers are considering as part of the “fiscal cliff” talks in Washington is to change how the government measures inflation in Social Security payments. President Barack Obama has proposed adopting what is known as a “chained” Consumer Price Index, or CPI, as part of his plan to reduce the nation’s deficit and raise revenue through an income tax hike on wealthy Americans.

Advocates contend that this approach is a relatively painless way to shrink the government’s budget gap and to shore up the federal retirement program, which they contend is financially troubled. But liberal lawmakers and pundits have panned the idea, arguing that it would result in lower benefits for Social Security recipients, millions of whom depend on the program as their main source of income.

What does chained-CPI mean?

The government currently calculates Social Security’s cost-of-living adjustment, or COLA, each year based on how inflation affects urban wage earners and clerical workers. Known as CPI-W, this index measures changes in the prices of a fixed basket of goods that are deemed to be representative of regular purchases by wage earners.

In contrast, the chained-CPI assumes that as prices increase, consumers make substitutions in what they purchase. The common illustration is that if the price of beef increases but the price of chicken is stable, consumers will purchase less beef and more chicken.

The chained-CPI is being proposed to adjust not only Social Security benefits, but also benefits from a host of other federal programs, such as federal pensions, veterans benefits and Supplemental Security Income (SSI). It would also be used to index future increases in tax brackets. This last item is particularly important because if tax brackets rise at a slower rate, then federal tax revenues will increase, also helping to reduce the deficit.

The Bureau of Labor Statistics estimates that for the past decade, the chained-CPI increased at an annual rate that was about 0.33 percent lower than the CPI-W. The Congressional Budget Office estimates that in future years, increases in the chained-CPI might be 0.25 percent lower each year than increases in the CPI-W.

Click link for full text...

[resolution]

Latest I heard, the republicans refused the democrat offer of chained CPI and took their christmas break. Now that they are back the republicans want the chained CPI and the democrats are refusing it.

[djAdvocate]

Dec 30, 2012 16:28:00 GMT -5 resolution said:

Latest I heard, the republicans refused the democrat offer of chained CPI and took their christmas break. Now that they are back the republicans want the chained CPI and the democrats are refusing it.

Obama is willing to accept the chaining proposal.

[djAdvocate]

Dec 30, 2012 16:18:24 GMT -5 Savoir Faire-Demogague in NJ said:

Another screw job by govt over the middle class... would you think anything else???
Social Insecurity as Milton Friedman calls it.... oh, wait, Friedman is an idiot according to DJ Poll Dancer....

i don't call people idiots, SF. Friedman is a bright guy who says all kinds of stupid shit. kinda like you in that way.

[resolution]

Dec 30, 2012 16:37:06 GMT -5 djAdvocate said:

Dec 30, 2012 16:28:00 GMT -5 resolution said:

Latest I heard, the republicans refused the democrat offer of chained CPI and took their christmas break. Now that they are back the republicans want the chained CPI and the democrats are refusing it.

Obama is willing to accept the chaining proposal.

The either NBC got it totally wrong (unsurprising) or someone needs to tell that to Harry Reid. firstread.nbcnews.com/_news/2012/12/30/16252559-fiscal-talks-hit-major-setback-as-gop-appeals-to-biden?lite

[Savoir Faire-Demogague in NJ]

Dec 30, 2012 16:28:00 GMT -5 resolution said:

Latest I heard, the republicans refused the democrat offer of chained CPI and took their christmas break. Now that they are back the republicans want the chained CPI and the democrats are refusing it.

Seriously, I'd love to see a link to an article on that one.... hilarious...

[Savoir Faire-Demogague in NJ]

Dec 30, 2012 16:38:24 GMT -5 djAdvocate said:

Dec 30, 2012 16:18:24 GMT -5 Savoir Faire-Demogague in NJ said:

Another screw job by govt over the middle class... would you think anything else???
Social Insecurity as Milton Friedman calls it.... oh, wait, Friedman is an idiot according to DJ Poll Dancer....

i don't call people idiots, SF. Friedman is a bright guy who says all kinds of stupid shit. kinda like you in that way.

You sound tense? Maybe you need a drink...?? Perhaps a frisky woman?

Will ya' chill.....

[resolution]

Dec 30, 2012 16:51:23 GMT -5 Savoir Faire-Demogague in NJ said:

Dec 30, 2012 16:28:00 GMT -5 resolution said:

Latest I heard, the republicans refused the democrat offer of chained CPI and took their christmas break. Now that they are back the republicans want the chained CPI and the democrats are refusing it.

Seriously, I'd love to see a link to an article on that one.... hilarious...

It's touched on in the NBC link firstread.nbcnews.com/_news/2012/12/30/16252559-fiscal-talks-hit-major-setback-as-gop-appeals-to-biden?lite

I haven't seen it really put together anywhere but I am sure it will eventually become fodder for late night TV.

ETA: Fox running the same story about democrats now rejecting the chained CPI www.foxnews.com/politics/2012/12/30/congress-returns-sunday-to-strike-deal-to-avert-fiscal-crisis-details-and-times/ This is a few hours after Obama gave a speech on meet the press about how his offer of chained CPI was rejected by republicans.

[Deleted]

"that is not my understanding. my understanding is that it "exists" as a book item ONLY. there is no reserve, no fund. the money is spent in the general fund even before it is collected."

That's just semantics. If you invest all your money in gov't debt, you still have an asset, right? Same for SS.

[ameiko]

An interesting idea. My questions:
1. would the higher earners who put more into the system now that the income cap has been removed, be eligible for higher SS checks?
2. Would the 300K means test, which as I understand it means those earning over 300K would not receive a SS check, really make any sort of meaningful difference? How many SS eligible people earn that much?
3. Any thoughts of indexing age of eligibility to expected life span?

It's an interesting idea but one, except for the reinstitution of the 2%, that I'm not crazy about. The idea of SS is that we all contribute and thus all receive. To change the rules now is breaking ones word and reneging on a contract.