OT: How to Save Social Security

[Stewart Schooley]

I'm starting an OT discussion because I want to follow up on some things that were mentioned here.

To understand SS problems you have to understand the national debt. It is listed as 7 trillion dollars, but that is not the whole truth. Only

60% of it is "debt owed to the public". This is money owed to buyers of regular government bonds [individuals, retirement plans, corporations, foreign nations] and this debt must be paid or we are a bankkrupt country.

40% is "intra governmental holdings" and it is comprised of money 'borrowed' from SS, the railroad retirement fund, government workers pension fund and the military pension fund. Each year Congress 'borrows' the surplus from these funds and gives them special government bonds that were created for this purpose. The debt owed to SS alone is now just about 1.5 trillion dollars. These bonds pay an average rate of 2.2% and they are not available to the public. Every year Congress has to pay interest on the bonds, but no money is exchanged. Congress authorizes more bonds in the amount of the interest due, the money stays in the treasury and Congress spends it.

There is no law that says Congress must pay their debt to SS or any of the other pension funds. Congress created this situation and Congress can simply wipe the books clean if they wish. You can only depend on the honesty and personal integrity of members of Congress to pay back the money they owe to SS....................

Here's what I think should be done - Congress should issue more regular government bonds to fund the transition to privatization for younger workers. The money generated will automatically be deducted from the debt owed to SS and the "intra governmenta holdings" will now be reduced by that amount.

Let's say one trillion dollars has to be raised. Our total national debt will remain the same because one trillion dollars will be subtracted from "intra governmental holdings" and added to the "debt owed to the public" which means it will then be about 5.2 trillion dollars.

We can handle a 5.2 trillion debt that has to be paid. Think back over your own life. When you bought a house, financed a car, had some charge accounts to pay for the new baby, etc, as well as paying property taxes and other obligations due to government, what percent of your income was being used to pay your debts? Make the comparison and I think you will see that our government with a 5.2 trillion dollar debt is better off than you were.

Privatization is the only way to keep the polititians hands away from your money ...............unless you are one of those Democrat Liberals who believe that SS should be a re-distribution of wealth scheme.

Stewart

[Uncle Peter]

I'm starting an OT discussion because I want to follow up on some things that were mentioned here.

Privitazation didn't work in Britian and other countries. What seems to happen is that the management "fees" become excessive, and you're basically at the mercy of the brokers. Long term investment seems to be a good idea, but for someone in their 50s the timeframe is way too short to ensure any reasonable longterm accumulation.

Pete

[hagstar]

No crisis or ANY kind until 2042, per Social Security's own recent pessimistic study. No "saving" of it needed, just small tax changes.

[Stewart Schooley]

Pete,

Not true. Only in England has there been a problem. Companies managing the system were gouging so much that they were forced to pay back 20 billion dollars. Chile has the model system where workers have 22 different plans they can invest in and they can change from one plan to another anytime they want to. All they have to do is make a phone call.

I'll make you a bet. I bet you can't name one union pension fund that isn't privatized. And I'll bet you double that you can't name one city, county, or state pension plan that isn't privatized.

Stewart

[Uncle Peter]

" I'll make you a bet. I bet you can't name one union pension fund that isn't privatized. And I'll bet you double that you can't name one city, county, or state pension plan that isn't privatized.

Stewart

Railroad

[John Goller, k9uwa /W4 Snowbir]

I'll go you one better than the above .... I'll bet that of all the Union and city,county,state whatever pension plans.... that you can NOT find one that has earned the same lousy rate of return that the SS plan has received.... it earns something in the area of 2% ....

Thats one of the main reasons the blasted thing is going broke slowly.. plus of course... we the american people ... don't have 4 kids per family anymore... so workforce isn't an ever increasing thing like it was in the beginning of the SS plan ...

Peter.... U aren;t in the game anyway... none of us that are 50 or over will ever be eligible to get into the new game if and when they decide what the new game will be ... its for the younger folks .... not us old geezzers

Ya know why Congress is so much against this "Privitization Plan" so much?.... It is because the SS plan is where they have been all these years borrowing money to pay for all the crap that congress passes .... so our own Gubmint is paying that lousy 2% to the SS fund... which means that YOUR TAXES are really paying it.... so that makes it doubly stupid to have the SS plan like it is now...

Bet if your congressment had to live on SS income plan... that they might then have real incentive to fix it... John k9uwa

[Stewart Schooley]

I think I screwed up. I think it was because someone said I wasn't posting in plain text. I was in the habit of typing in wordpad and copying and pasting in e-mails. I posted to both RAR+P and rec.woodworking rather than going through the trouble of doing them separately. Now replies from here are showing there. First time I've done it and it won't happen again. I could let it go and the groups could get in a fight and have a duel with woodworking tools. They have bigger and nastier tools so I'll take care of the problem each time I reply.

Anyway, the crises starts in 2018 and that will be after more money has been voted to meet the public clamor for more medical coverage. With medical costs rising 12% a year there is no way Congress will meet its full obligations to SS after 2018.

Stewart

[John Goller, k9uwa /W4 Snowbir]

Stewart has it just about perfect...the only thing I see wrong is that so far Bush has done a piss poor job of explaining the real problem.... as in see above the 2.2% earnings rate on the SS fund .... and Congress.. mostly the Dems... but also the REP ... they are afraid to let go of the ability to mishandle all this money and live within a budget like the rest of us have to do.. John k9uwa

[Stewart Schooley]

Here's what I posted to the antique radio group,

Sorry about this.

Stewart

[Uncle Peter]

[e-mail]

Don't affect me. I only paid into social security for a few years, and I have a federal pension. But, what should be noted is that when Social Security no longer can meet payments, by law, the payments will be reduced. There is no guaranteed furture payment rate.

Personally, raising taxes is distasteful. It will increase for employers as well as workers--equally--and that means more work sent overseas.

Taxing about 90K income is simply redistribution of wealth. Raising the retirement age? Again? No thanks. People should be allowed to retire and enjoy it, while they still have their health.

John had it right, social security was invested in Federal notes, horrible interest rates compared to the market long term.

Pete

[xrongor]

1) increase taxes and pay off the debt. dont want to increase taxes? sell alaska and pay off the debt. have a bake sale and pay off the debt. pay off the god damned debt.

2) stop deficit spending. period. do whatever it takes. dont run the government on the credit card method.

3) lower taxes by 15% and STILL have more money to spend than we do now to fund social security, schools, health care, and the other programs the 'evil liberals' want, save a little for a rainy day, and STILL have your stupid war.

4) if you dont NEED social security, you dont GET it. dont like it? tough.

randy

[Doug Winterburn]

What he had right is that the excess above what was required to pay current SS recipients was invested in government notes. When the time comes that current collections don't meet recipients requirements, my kid/grandkids and your kids/grandkids will not only get to pay whatever SS taxes are in effect at that time, but they will get to pay an increased income tax to redeem the government securities to pay the trust fund + interest for a second time as the first excess payment was spent on us to falsely inflate general revenue and falsely give the appearance of limiting the current year deficit. I'm sure they will look back on us with fondness for spending the original SS trust fund on ourselves and passing on the debt to them.

- Doug

[Doug Winterburn]

Just how much did the 2000 "surplus" reduce the national debt?

So, the solution is to do nothing or increase the SS taxes and keep increasing the national debt so that our heirs can repay it with increased income taxes?

So you are all for increasing the national debt by 5 to 9 trillion more than the 1.5 trillion accrued by the SS trust fund to this point by spending the SS trust fund on us and passing on the debt to our heirs?

BTW, turn of your html

-Doug

[Richard Clements]

ok I'll chip in here, mostly because this is probably more relevant to me then most of the rest of the posters here, mostly because I'll be 65 years old in 2043, and the idea of paying more and more for benefits that I'm not going to get upsets me a little, I like the Idea of having the option of setting up a private account something akin to a 401k or IRA if you think back how nice it would have been to set up a 401k with .48%(this isn't all of SS just the proposed amount you can contribute 3% of 16% (8% you put in and 8% your employer dose) )of your earnings from the time to turned 16 or when ever you started working to the time your 65 ok now lets put it in an account earning say 9% like Prudential Financial's Lifetime40 Fund (last 10 years has preformed at 9.09%) lest say you earn an average of 40,000 for 44 years (last I heard that was the average yearly income) .048 * 40,000 = 192 increasing annuity n r -1 a(-----) = Amount r - 1 44 1.09 - 1

192(--------) 1.09 - 1 44 1.09 -1 192(-------) .09 61.85 -1 192(--------) .09 60.85 192(-----) .09

192(687.25) = 131,953.87

add this to your other retirement > I'm starting an OT discussion because I want to follow up on some

[tomeshew]

Quote}

4) if you dont NEED social security, you dont GET it. dont like it? tough.

randy Then, don't pay in? SS is a socialist program that has no place in fre market America these days. Nor on any day in capitalist America. Jeez! HTH! To

-- tomeshew

[tomeshew]

Then, don't pay in? SS is a socialist program that has no place in fre market America these days. Nor on any day in capitalist America. Jeez! HTH! To

-- tomeshew

[Steven Dinius]

I can't save Social Security. I don't receive enough to save any.

Maybe you concur.

[Thomas Bunetta]

Require members of Congress and the Senate and other Government officials to abandon their current "salary for life" plan, and make them participate in SS benefits alone! Tom

To understand SS problems you have to understand the national debt. It is listed as 7 trillion dollars, but that is not the whole truth. Only 60% of it is "debt owed

[Mike Marlow]

So - you start an OT thread because you want to follow up on some things that were mentioned here... and you throw in some cross-posting to unrelated newsgroups for good measure? Why not just go to alt.politics where this sort of thing belongs?

[William Sommerwerck]

Absolutely it should be.

The wealth of the rich is obtained from the labor of others. Government has a moral obligation to rip it out of their filthy hands and spend it on something constructive.