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Discussion Starter · #1 ·
I promised LinMar to do some research on the Social Security "reform" proposals. This is the first attempt at it.
Social Security: The Phony Crisis
by Dr. Dean Baker, PhD in Economics at the University of Michigan
Dr. Mark Weisbrot, PhD in Economics at the University of Michigan
(these will not be the only resources used. Our library had 3 on the subject).
p. ix "The Social Security system is currently threatened more than ever before in its 64-year history. The problem is not financial, economic, or demographic - the standard projections provide no basis for serious concern about the program's finanacial survival...
The problem is that people have become convinced that the program is in serious trouble. As a result of a steady stream of misinformation...(the program) is seriously undermined (and could be) dismantled. Ironically, the greatest threat to SS has come from its would-be rescuers."
 

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I must be so because 2 PHD`s said it.The facts are more people going on the books collecting than suppling funds,politicans using it like an ATM and lousy returns on the invested funds points to it`s demise.
 

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I`m one of the collectors also.Having said that I`m sure I would be setting a lot better if I would of had control of the contributions made by me and my employers.
 

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Discussion Starter · #5 ·
"Both Krugman and Thurow (economists) fell for the "entitlements trick," a device deployed with great success by advocacy groups like Peterson's Concord Coalition. The idea is to lump Social Security and Medicare together as "entitlements for the elderly" On the basis of the last 30 years of health care inflation, it is easy to project explosive growth in future Medicare spending...

But the two programs are financed separately....Although Social Security is not facing any serious financial difficulties, Medicare will run into serious trouble within the next decade if medical care inflation continues at its historic rate. P4

I seek information of such important issues from the best minds possible. If I want my car fixed I'll call you Jerry...otherwise why not read and learn something that does not appear on Fox news.
 

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I gotta little experiment for ya .You and I start putting $1 a day away lets say for a month.After that month I stop,but you keep putting the dough in.Now when I stop I start taking $1 out for the first month.I the second month your are still doing your thing but I start taking $1.50 out.Guess what I doesn`t take a PHD to figure out that at this rate of put and take our little kitty is going to run out of money.Also there will be no IOU`s accepted.I don`t need Fox or some knucklehead couped up academic to teach me basic
math.Now as you suggested you add high cost medical care to this basic equation it only expedites the failure.To make a little easier for you to understand I didn`t even factor in the thief[congress]
 

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Discussion Starter · #7 · (Edited)
Why bother Jerry. I'm not a PhD on the subject and you feel much smarter than they.
Here are the credentials of another who is degreed and writes in the field:

Daniel Shaviro
I am the Wayne Perry Professor of Taxation at New York University Law School. My research mainly emphasizes tax policy, government transfers, budgetary measures, social insurance, and entitlements reform. My most recent book is Taxes, Spending, and the U.S. Government's March Towards Bankruptcy (2006). My other books include Do Deficits Matter? (1997), When Rules Change: An Economic and Political Analysis of Transition Relief and Retroactivity (2000), Making Sense of Social Security Reform (2000), and Who Should Pay for Medicare? (2004). I am also the author of an unpublished novel, Getting It. I am married with two children (boys aged 10 and 13) as well as three cats.

p 75 Making Sense Of Social Security Reform
"The Social Security debate has been dominated by gibberish about saving the Social Security system (as distinct from helping the people whom it effects) or about "investing" the budget surplus in the Trust Fund and/or the Trust Fund in the stock market, without an adequate focus on what these policies would actually do."
 

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Beings that you are the research expert do a little exploring on a town in TX.I`m not sure but I think it is Galvaston,anyway they dropped out of the SS system many years ago ,I don`t have a clue to how they were able to do it with Uncle Sam `s long arm,but anyway they did.The SS funds were invested into low risk funds and bonds.Long story short of this little ditty is that them folks are doing much better then if they had of stayed with SS.Here is another thing to think about if SS were so good how come congress isn`t in on this great deal.:rolleyes:
 

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Discussion Starter · #9 · (Edited)
Galveston. Buy a dictionary....look it up and cut and paste it. Your not to lazy to type so quit being so lazy as to post your ramblings without verification. Your petty little jabs at me personally is noted. I will refrain from the same. Here is another well educated individual who gives these thoughts on the subject:

This brings back the nostalgia for me a bit, because I remember the Social Security debate. Recall that his plan, such as it was (since he disclosed it but declined to endorse it), for many years bore the label "privatization." I argued in my 2000 book, Making Sense of Social Security Reform, that this label was in fact a misnomer for a genre of proposal that in essence would lend people the money to make debt-financed purchases of government-selected stock and bond funds. But they called it privatization anyway, I think sincerely even if inaccurately, because this term had a positive valence in the conservative think tank circles where it spent a couple of decades gestating.

Once Bush was actually proposing it, this handlers started to focus-group the name "privatization," and found that it was a flop with the general public. So, as I discuss in what I considered one of the more amusing sections of my forthcoming book, the name marched ever onward from privatization to private accounts to personal accounts to personalization (this last one being too strained and ludicrous to catch on). Dr. Joseph White, Luxenberg Family Professor of Public Policy, Department of Political Science, Center for Policy Studies, Case Western Reserve University.

OK JERRY HERE YOU GO: The Galveston Plan and Social Security: A Comparative Analysis of Two Systems - Statistical Data Included
Social Security Bulletin, Spring, 1999 by Theresa M. WilsonThis report presents a comparison of benefits under the Galveston Plan versus Social Security, based on different earner and family scenarios. These scenarios include single and married workers at the low, middle, high, and very high earnings levels.

PS You answered you own question genius.....government employees including Congress can opt not to be part of the Social Security system. This is Galveston city employees not the city of Galveston at large. So much for your "deep thinking".

Executive Summary

On January 1, 1981, the county of Galveston, Texas, opted out of the Social Security system and implemented the alternate plan (referred to in this report as the "Galveston Plan") in place of Social Security.(1) The Galveston Plan has received recent attention in the press and in congressional testimony as an example of a privatized plan that could serve as a model for the privatization of Social Security.(2) The purpose of this report is to compare and contrast the Galveston Plan with Social Security, and examine how certain workers with different earnings levels and family types fare under each system.

Key findings indicate that in comparison to Social Security,(3) Galveston's plan does not have a waiting period for coverage (full coverage begins in the first pay period of employment); it offers more pay-out options (lump-sum or various annuities) than Social Security; and, in general, provides higher benefits to those with higher earnings and/or those with fewer dependents who would qualify under Social Security.

Furthermore, under the Galveston Plan, contribution rates (payroll taxes) are higher than under Social Security; there is a risk of outliving one's benefits under certain pay-out options (lump-sum or fixed annuity); there are no additional spousal or dependent benefits (benefits are based entirely on contributions);(4) benefits are paid to a named beneficiary, and there is no guarantee that benefits will be provided to a spouse/divorced spouse or dependent child; benefits are not portable to future employers; benefits are not adjusted for inflation; and, in general, benefits are lower for those with lower earnings and/or with a greater number of dependents who qualify under Social Security.

Whether the Galveston Plan provides a retirement, disability, or survivor's benefit that is higher or lower than Social Security's depends upon factors including the worker's earnings, time in the labor force, the age and number of beneficiaries, and the type of benefit being evaluated. This report presents a comparison of benefits under the Galveston Plan and Social Security based on different earner and family scenarios. These scenarios include single and married workers at the low, middle, high, and very high earnings levels. Earnings levels represent earnings at the following percentiles in the year 2045: low=10th middle=50th high=75th and very high=90th In the case of disability and survivor's benefits, married workers are assumed to have two children (see appendix A for a full description of methodology). Findings from this analysis indicate that:

* Galveston provides a higher initial retirement benefit than Social
Security to single workers (without dependents who would qualify under
Social Security) at the middle, high, and very high earnings levels, and to
married workers at the very high earnings level. Social Security provides a
higher initial retirement benefit to low-earning single workers and to
married workers at the low, middle, and high earnings levels. Because
Galveston's benefits are not indexed to inflation, they lose value relative
to Social Security's benefits over time.

* The initial disability benefits provided under the Galveston Plan are
higher for single workers at all earnings levels and for married workers
with two children at the very high earnings level. Social Security offers a
higher benefit to married workers with two children at the low, middle, and
high earnings levels. As with retirement benefits, inflation reduces the
relative value of Galveston's disability benefits over time.

* In general, total benefits provided to survivors of current workers
(nonelderly survivors) by the Galveston Plan are higher for workers who
either do not have dependents, or in cases when dependents are present but
do not qualify for Social Security. Total benefits for married workers with
two children may be higher or lower under the Galveston Plan depending on
the number and age of qualified dependents. Under the scenarios considered
in this report, Social Security offers a higher total benefit to families
with two younger children (ages 5 or 10), whereas Galveston offers a higher
benefit to families with older children (age 15).

* With respect to survivors of retired workers (elderly survivors),
assuming that a Galveston retiree elects a 2/3 joint-contingent survivor's
annuity at the time of retirement, Galveston's initial survivor's benefits
are higher for widow(er)s of retired workers at the very high earnings
level. Social Security offers a higher initial widow(er)'s benefit to those
at the low, middle, and high earnings levels. Again, Galveston's benefit
loses its relative value over time.

I'am not a expert on research but I do feel that if I post I should attempt (not always successfully as I make errors) to be honest and truthful. Some are too lazy to do the same.
 

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Have you ever heard of Life Insurance?As far as personal jabs your the one that implied the only thing I can do is fix cars,so Mr.Pot the kettle is black.Now can you please tell me how you can remove more money from an bank than you put in to it and have any money down the road.
 

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Discussion Starter · #11 · (Edited)
Interest. I sold life insurance, stocks and bonds for Prudential before my health cratered and all have a place in retirement planning. Insurance is not personal retirement unless you are retiring into eternity...anyone buying insurance for retirement income needs their head examined. What in your background would lend itself to my taking your word on the subject of Social Security over my own knowledge or that of qualified individuals who have studied deeply in the field?
I note you did not comment on the Galveston results! Why? Oh yeah it proved your assessment as being foolish....except of course if you are in the highest income bracket so you pull a Fritzer and try to change the subject from Galveston to life insurance (by the way only buy term or if you have millions buy enough to avoid death taxes so that your family has something left). If this is all you got...I'm through with you and will continue posting info for LinMar and anyone else who does not think they have all the answers...including me.
 

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Here goes of coarse the people who made more money had higher retirements and the reason is they payed more into the system.The life insurance is to take care of ones family if you happen to not make it into retirement.Another thing with all of these professions you claim to have had it doesn`t seem you made the most of them.Also you havn`t responded to my little put and take exercise about removing more than you put in.By the way I`m also done with you.
 

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You know what bothers me about it. It's that they are looking at everything except the reason it got the way it did in the first place and so are all the the really so called smart people in this country. If a board of directors of a company would have done, to a empolyee pension plan what the politician did to ss. They would have gone to jail . You don't steal from the ss like the gov did. And you shouldn't get away with it. Put all the politician on ss instead of the retirment plan that they created for them selfs. and I'll bet it would be find in a really short time. But they have everyone one fooled into thinking that it needs fixing. when all it needs is for them to stop stealing from it.
 

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The problem with social security is in the name, "social". FDR created SS during the New Deal time when the depression was at the forefront of the country. FDR's theory was to provide unemployed older people at the time, with an income. I guess FDR didnt figure that the govt would raid the funds or that a bloated population, called the baby boomers were going to break the bank.
 

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With the birth rates going down and the baby boomer retiring in record numbers the math don`t work.I know why them lib politicans want to give all of the illegal Mexians citizenship .With them going into the SS system it will put a thumb into the dike.
 

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Discussion Starter · #16 · (Edited)
Annuities: One suggested way to privitize SS would be the use of annuities in order for the money saved to last the length of time that one lives.

A recent study of the premium assed on annuities found that insurance companies charge on a average of 15-20 %, meaning that the retirement income individuals can expect will be 15-20% percent less than they should be able to expect based on their lifetime accumulations. Thus, a worker setting aside $1000 every year for 40 years and received a3.15% return before deducting expenses (2.15 after) will have accumulated approximately $63,750. It this worker buys and annuity with this money, he or she will lose between $9,563 and $12,750. If the worker has a life expectancy at age 65 of 19 years, he or she can expect an annual payment of between $3,319 and $3,527, or a monthly payment of between $277 and $294

The Galveston study which shows that a individual in the lower, middle or high income brackets have lost retirement income under privatization. Only the highest income bracket, which would have put the most into the private system. would have a retirement income which would have exceeded the Social Security payments. A system which pays out less than retirement income for 3 out of 4 income brackets would be in my estimation a failure. From Social Security: The Phony Crisis by Dean Baker and Mark Weisbrot.
 

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Discussion Starter · #17 ·
The Social Security Trust Fund is not a body of money from which the political administration can take from to cover federal budget deficits and the national debt. Nor does SS contribute to the federal budget deficits and national debt.

The SS Trust Fund loans its annual surplus, now running at over $124 billion (at the time of this book), to the federal government (at interest). The surplus, which has been accumulating since 1983, when the payroll tax was increased, will help finance the baby boomer's retirement, which is why the program will not have any trouble meeting its obligations while the boomers are retiring. IBID

The compounded interest from billions invested in government bonds is not "simple math" but it is the reason that the present work force is not paying dollar for dollar for the retirement of those now over 65. For example a contribution of $2400 per year ($200 mo.) for 30 years @ 3.5% interest accumulates $112,472.53 by retirement. This mornings government treasury bond rate is 4.96 so my above calculations are purposly conservative. At the current rate of 4.96 the accumulation would be $166,217.06. The actual money saved without compound interest would be $72,000.
 

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Come on now you can't be that out of touch with what the gov. has been doing with ss funds. They have been taking all funds that is over a give acess. For the geranl fund. THATS WHY SS IS HAVING FUNDING PROBLEMS TO BEGAIN WITH. What the gov is doing is called missdirction. They make you think its one thing so you won't complain about what is really happening. And as I see it. those of you that don't see it are playing right into their hands. wake up people. if every penny that was colected for ss from it's conseption where in their , ss would be the only gov system with more money then they know what to do with.
 

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Discussion Starter · #19 · (Edited)
1. SS funds are collected and distributed to qualified retirees.
2. Surplus SS funds are invested in US Treasury notes at whatever is the current interest rate.
I looked it up. Trying to make sence of the SS scare and SS reform options including privatization. I will keep posting that which I find.
 
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