Privatizing Social Security

[maat55]

One of the cons against privatization is that many believe that americans are too stupid and irresponsible to save the money as apposed to just spending it. As a staunch Constitutionalist, I happen to agree. The american people have been dumbed down into little socialist.

So, how about a privatized plan that is mandated? One that has a built in diability and term life policy? Would you be acceptable to such a plan?

When you consider the cons of continuing the failing ponzi-scheme we have today, is it fair to future americans to push this abomination any further into the future?

What is clear, is that switching to a private system will be painful. That is due to the fact that SS funds has been grossly mismanaged and basically pillaged to hide deficits for years.

I bring this question to this site because this is a site filled with responsible americans, people who know the power of private investing. The big question is: If we were to privatize the system, how many years would it take to fairly distribute the pain among all age groups? I'm guessing 20 to 30. This is not a thread to layout plans, but to ask the question: Which would you rather endure, passing down a horrible plan to the future or suck it up and privatize the system?

[Mr Nice Guy]

Id rather have the option to invest my own social security

[GREENBACK]

Do you really believe the empty suits that we keep electing will ever do something like this? I think It would take something revolutionary to make this happen. 20 to 30 yrs. to make this happen is pretty optimistic. I think it will require a few generations. Unfortunately, this "Genie" is out of the bottle and I can't imagine the legislation even being introduced much less passed to make this happen.

I do like the concept of your idea but don't see it as very realistic at this point. Privatizing a massive system like SS will take lots of "baby steps".

[maat55]

Originally Posted by GREENBACK

Do you really believe the empty suits that we keep electing will ever do something like this? I think It would take something revolutionary to make this happen. 20 to 30 yrs. to make this happen is pretty optimistic. I think it will require a few generations. Unfortunately, this "Genie" is out of the bottle and I can't imagine the legislation even being introduced much less passed to make this happen.

I do like the concept of your idea but don't see it as very realistic at this point. Privatizing a massive system like SS will take lots of "baby steps".

The transition would be the difficult part. We would have to come up with a way to partially fund current and near term recipients. Beyond that, the system is basically in place. Employers are used to the deduction process, all they have to do is send the money to the fund company.

My main focus on this is for several reasons:

1) The government is incapable of properly management of the funds they recieve.
2) The program is more costly to each following generation.
3) Taking 12.4% of ones income leaves low income earners no possible way to build wealth.

Having a mandated 401k system is not really eliminating SS, it is getting the funds out of the hands of the government and keeping benefits balanced with available funds. This eliminates the unfunded liability scenario. And, I think many would agree, that the growth of 12.4% of ones income over 45 years will be far greater a retirement plan than the current poverty level ponzi-scheme we have.

[cooliemae]

To play the Devil's Advocate: If SS was privatized and everyone had a 401kish account for their retirement, what happens if the market falls and everyone's money is tied up in it? As a constitutionalist, how do you square a government mandated savings program with the party's platform?

[maat55]

Originally Posted by cooliemae

To play the Devil's Advocate: If SS was privatized and everyone had a 401kish account for their retirement, what happens if the market falls and everyone's money is tied up in it? As a constitutionalist, how do you square a government mandated savings program with the party's platform?

Like with current investments, your risk level should be lowered as you close in on retirement. Naturally, people tighten their belts to avoid over usage of funds, maybe work part time.

As a Constitutionalist, I am for voluntary retirement plans, but people have been weened to SS and will need to be weened off of it. Mandated plans are a compromise to appease the liberal element. Getting the money out of the hands of politicians and ending the unfunded liabilities issue are urgent.

[kork13]

A mandated retirement plan... Looks to me no different than what SS is (or would be), except for the gross mis-management. Whether the government or a private company handles the program, people lose. If it's the government, red tape, over-legislation, waste, and all the related madness afflict the system. If it's a private (for profit) company, a mandated program only means guaranteed profits for the company and abuses stemming from that fact. If a non-profit company, a mandated program guarantees cushy jobs for the executives leading again to waste, mis-management, and something remarkably like the government program.

Personally, I have no faith in most social programs like social security and the like. No one cares more about your success, happiness, comfort, and safety than yourself. I would never trust someone else to "ensure" my future for me. I pay into social security and medicare to stay out of jail. But if I had the option not to, I'd drop it in a heartbeat and actually use the money productively, since I'm nearly assured of never receiving any benefit from either program (or most any other social program). Why is that? Because I'm a responsible, productive member of society. Remarkable, isn't it?

[/soapbox]

[Mjenn]

I disagree with privatization - esp. since the way the system is set up, it would leave my generation stranded without pension (we the current working generation pays for the current retiring generation - while our kids will pay for us) if I don't get started with my private savings until my late 30's early 40's I'm the one who gets screwed.

Also, I think up until the last administration - SS was actually one of the pretty stable benefits in the US.

But on a possibly ironic note - did you know that in the Kingdom of Socialism - Scandinavia - we get to place a large chunk of our state pension in funds of our choosing? The funds all have to be on the approved list - and there is a 'default' fund - you cannot choose to take the money in cash - but you do have a say in how it is invested. But I know - booo hisss nanny state....

[littleroc02us]

I would be a proponent of that idea, but it would never happen because it would require sacrifice from those already recieving checks. In addition to your idea, I would be willing to opt out of the system entirely, if they wouldn't take ss out of my pay check and I would give up my prior contributions in exchange.

[cooliemae]

Originally Posted by kork13

Personally, I have no faith in most social programs like social security and the like. No one cares more about your success, happiness, comfort, and safety than yourself. I would never trust someone else to "ensure" my future for me. I pay into social security and medicare to stay out of jail. But if I had the option not to, I'd drop it in a heartbeat and actually use the money productively, since I'm nearly assured of never receiving any benefit from either program (or most any other social program). Why is that? Because I'm a responsible, productive member of society. Remarkable, isn't it?

[/soapbox]

I would have to disagree that you don't receive any benefit from social security and medicare. You might not receive direct benefit, but I don't even want to imagine what this country would look like if there was no 'safety net.' While I think there is an argument to be made that people abuse the systems and that reform is needed, I see benefits in taking care of people that can't necessarily take care of themselves.

[kork13]

Originally Posted by cooliemae

I would have to disagree that you don't receive any benefit from social security and medicare. You might not receive direct benefit, but I don't even want to imagine what this country would look like if there was no 'safety net.' While I think there is an argument to be made that people abuse the systems and that reform is needed, I see benefits in taking care of people that can't necessarily take care of themselves.

I'd rather leave the government out of charity work. I absolutely agree that people who truly can't provide for/take care of themselves need help, which is why I happily and heavily contribute to a few organizations that I know for a fact provide directly for those in need, and take steps to help them become self-sufficient if possible. From my view and experience, governments are terrible administrators of charity programs. But again, just my opinion...

[littleroc02us]

Originally Posted by cooliemae

I would have to disagree that you don't receive any benefit from social security and medicare. You might not receive direct benefit, but I don't even want to imagine what this country would look like if there was no 'safety net.' While I think there is an argument to be made that people abuse the systems and that reform is needed, I see benefits in taking care of people that can't necessarily take care of themselves.

Socialism or Communism....

[bjl584]

I'd be for eliminating the entire thing altogether. I know that I can do better with the money that is taken out of my check every payday than the government can.

My fear is that even if it were privatized, the fund choices that would be offered would probably still be driven by politics and lobbyists. It would be slow, inefficient, and mismanaged.

I'd rather eliminate the entire program entirely and just let me handle my own retirement investing.

[littleroc02us]

Originally Posted by kork13

I'd rather leave the government out of charity work. I absolutely agree that people who truly can't provide for/take care of themselves need help, which is why I happily and heavily contribute to a few organizations that I know for a fact provide directly for those in need, and take steps to help them become self-sufficient if possible. From my view and experience, governments are terrible administrators of charity programs. But again, just my opinion...

That's not an opinion, it's a fact. SS is terribly mismanaged and they have broken away from it's original intent. FDR never thought the gov't would write IOU's on the system. He's probably rolling around in his grave.

[Mjenn]

Originally Posted by kork13

I'd rather leave the government out of charity work. I absolutely agree that people who truly can't provide for/take care of themselves need help, which is why I happily and heavily contribute to a few organizations that I know for a fact provide directly for those in need, and take steps to help them become self-sufficient if possible. From my view and experience, governments are terrible administrators of charity programs. But again, just my opinion...

Say what you will about Social Security but it is NOT CHARITY WORK! You pay into the system and you get out of it related to what you earn over time. A charity is when you donate money to people and the gain is that these people get something they couldn't have afforded.

If you want to donate to charity - good on you - but there is nothing charitable about Social Security!

[EEinNJ]

The problem with idealogues such as Constitutionalists is they get hung up on principle, on how THEY think things "should" be, and ignore reality and facts which contradicts this.

Saying Social Security is broke, or mismanaged, are opinions, not facts, and the GAO says differently.

Saying SS should be privatized conveniently ignores the recent history of what happened to the US and global financial systems, when financial firms profited on a debt bubble and the US Gov't. got stuck with cleaning up the mess. Would you really want the gov't. to hand the keys to any portion of your retirement income to the likes of Goldman Sachs, AIG, Bank of America, Citibank, etc?

[feh]

Originally Posted by EEinNJ

The problem with idealogues such as Constitutionalists is they get hung up on principle, on how THEY think things "should" be, and ignore reality and facts which contradicts this.

Saying Social Security is broke, or mismanaged, are opinions, not facts, and the GAO says differently.

Saying SS should be privatized conveniently ignores the recent history of what happened to the US and global financial systems, when financial firms profited on a debt bubble and the US Gov't. got stuck with cleaning up the mess. Would you really want the gov't. to hand the keys to any portion of your retirement income to the likes of Goldman Sachs, AIG, Bank of America, Citibank, etc?

[littleroc02us]

Originally Posted by EEinNJ

The problem with idealogues such as Constitutionalists is they get hung up on principle, on how THEY think things "should" be, and ignore reality and facts which contradicts this.

Saying Social Security is broke, or mismanaged, are opinions, not facts, and the GAO says differently.

Saying SS should be privatized conveniently ignores the recent history of what happened to the US and global financial systems, when financial firms profited on a debt bubble and the US Gov't. got stuck with cleaning up the mess. Would you really want the gov't. to hand the keys to any portion of your retirement income to the likes of Goldman Sachs, AIG, Bank of America, Citibank, etc?

Your wrong, because FDR didn't mean for it to turn into IOU's did he? There isn't enough money in there to pay everyone out and eventually they will have to raise the age requirements. For those of you who are relying on SS for your retirement, good luck! Never will I rely on the govt to plan my retirement, I'm going to be my own financial planner.

[kork13]

Originally Posted by Mjenn

Say what you will about Social Security but it is NOT CHARITY WORK! You pay into the system and you get out of it related to what you earn over time. A charity is when you donate money to people and the gain is that these people get something they couldn't have afforded. If you want to donate to charity - good on you - but there is nothing charitable about Social Security!

I realize that SS and Medicare are not actually charities, that line of thought was just based on cooliemae's idea that it's a benefit for those who can't take care of themselves, not necessarily to provide a direct benefit to myself. Basically, a charity--I give money to help other people but don't get any tangible benefit from it. Because as I said earlier, i truly doubt that I'll ever see a dime from them even though I pay into them with every paycheck. The programs are on the way to bankruptcy and unaffordability on the part of both the government and individuals. I'm 24 y/o, and by the time I qualify for either of them, I am convinced they either won't exist, or they will be meaningless/unaffordable and I'll have to rely entirely on my savings anyway.

[maat55]

Originally Posted by kork13

Personally, I have no faith in most social programs like social security and the like. No one cares more about your success, happiness, comfort, and safety than yourself. I would never trust someone else to "ensure" my future for me. I pay into social security and medicare to stay out of jail. But if I had the option not to, I'd drop it in a heartbeat and actually use the money productively, since I'm nearly assured of never receiving any benefit from either program (or most any other social program). Why is that? Because I'm a responsible, productive member of society. Remarkable, isn't it?

[/soapbox]

Do you invest in mutual funds? I'm sure a qualified mandated 401k system would offer low cost investments.

Perosnally, I would rather make those choices myself, but a mandated private system is far better than letting Congress get their hands on the money.