Privatizing Social Security

[maat55]

[QUOTE]

Nope it's a right. Basic healthcare is a right. People have a right to treatment and I hate to point out but do you know anything about socialized healthcare? How about the fact recently the best man from our wedding, his dad underwent triple bypass in Canada. He had it done faster than if he were waiting in the US for zero OOP. So whose the losers now? The fact is that yes you do have to wait for small things, but then for bigger things they can get through faster?

One of my clients(who used to live in Canada) stated that they kept standby tickets to the US for medical emergencies.

I'm curious, do people have a right to food, water, shelter and a car?

Yes I believe that with or without insurance people should get care. And in the US they don't because it'll bankrupt them. They don't buy insurance because they can't get it from pre-exisiting condition.

I have no problem with Congress mandating that insurance be uniformed for those healthy and having pre-conditions provided their condition is not self-imposed. Aside from this and the CHIP program, people should be own their on in the free market.

They don't get it because they need to eat or pay rent. Or perhaps they can afford it but who would actually cover them (that's my DH). So yes you can have the opinion that healthcare is a right.

At what point is being free come with responsibility?

Just because it's different doesn't it wrong or not understandable. If it were so dumb, then why are so many countries doing it? Why do so many people believe it? Why are so many people for it?

The socialistic system is unsustainable, everywhere. You can think it is good all you wish, but it will fail. It is easy for people to believe in freebies, it is another thing to provide them.

Something I find interesting is that many of the most philanthropic people are the wealthiest, but the people who cry about taxes and whine about every man for himself? I would consider upper middle class. The truly wealthy don't worry, the poor don't worry, and the middle class? Whine about taxes until suddenly THEY need help. Then suddenly it's gimme, gimme, gimme. Suddenly a job loss, loss of insurance and they want government intervention. They want unemployment, they want insurance.

Noone ever said that life was equal or fair. Some will achieve wealth with little effort, most will earn every penny. Some will never be wealthy, no matter how hard they work. In order for products and services to be affordable to the masses, we have to have free market principles which promote utmost production. Telling people they can sit on the sidelines and get paid is a detriment to society, charities will take care of those who cannot provide for themselves.

Our economy is addicted to over-consumption of luxuries and ignoring basic needs with the expectation that it will be provided by big brother. People are not saving properly for emergencies or retirement because of big brother. People are buying too much house and car while neglecting insurance because of big brother. These are not isolated problems, these are a national detriment that are unsustainable.

So, enyoy your illusion of socialism while you can, it is going to crumble within your lifetime and punish future generations for your idiological whims.

[shanecurran]

Social security was not intended to completely support retirees. The benefits have increased over the years and with a pay as you go system this is problematic for future generations. I don't expect there to be benefits when I retire and individuals need to plan ahead assuming there will be no money in social security. To privatize or not, the younger generation is going to have to "suck it up".

[Snodog]

Although I would rather have the option to invest my own social security I am an outlier. Investing is a hobby for me and I enjoy it.

The vast majority of people do not have the time, ability, or interest in investing their own money. These are the people who went to all cash in March of 2009.

Keep Social Security as it is. Why set people up to fail? Social Security is run very efficiently.

Interesting how different people define freedom. I say give people the freedom of not having to worry about their investments.

Same with healthcare. Give people the freedom of not having to pick a healthcare plan that may or may not cover you when you get sick. Give people the freedom of not having to spend hours trying to decipher all the legalese of your plan. That is real freedom.

The social democratic countries have a higher quality of life IMO. Interactive Infographic of the World's Best Countries - Newsweek

[maat55]

Social security was not intended to completely support retirees. The benefits have increased over the years and with a pay as you go system this is problematic for future generations. I don't expect there to be benefits when I retire and individuals need to plan ahead assuming there will be no money in social security. To privatize or not, the younger generation is going to have to "suck it up".

My beef is that 12.4% of ones income is a serious amount of money. It could be used to grow real wealth for anyone at any income level. The only reason the government should force anyone to save is because they are too ignorant to do it. Privatiziation is a good solution for growing the wealth of the poor, getting the funds out of the hands of a corrupt government and ending unfunded liabilities.

[maat55]

[QUOTE]

The vast majority of people do not have the time, ability, or interest in investing their own money. These are the people who went to all cash in March of 2009.

Decades ago, this had merit. Today, there are many easy options for they who do not wish to learn the ropes in investing. Target funds are a good solution for they who want to use auto-pilot.

Keep Social Security as it is. Why set people up to fail? Social Security is run very efficiently.

Having Congress pillage SS, while causing future generations to pay more and recieve less, does not constitute a well run program. Please, judge SS just as you would any other private sector product.

Interesting how different people define freedom. I say give people the freedom of not having to worry about their investments.

This statement defi's logic. How on earth is forcing people into a failing ponzi-scheme giving them freedom, let alone a good product?

Same with healthcare. Give people the freedom of not having to pick a healthcare plan that may or may not cover you when you get sick. Give people the freedom of not having to spend hours trying to decipher all the legalese of your plan. That is real freedom.

No, it is not. It is you saying you are fine with incompitent government control of your life. I do not wish to participate in your idiology, these programs should be voluntary or not exist at all. I am not forcing you to agree with me, I am saying you do what you want, and I will do what I want, when it comes to my personally issues.

This is why the social democratic countries have a higher quality of life. Interactive Infographic of the World's Best Countries - Newsweek

What makes you think that they have higher quality of life? If left to socialist countries, we would still be living in the 1800's.

[woodie96]

One of the key issues concerning SS is that when it was enacted years ago, There were approximately 16 people paying taxes, for every person receiving benefits. With todays smaller families, and elderly people living longer, that number has changed now to approximately 4 taxpayers for every recipient.
So, something is going to have to give. Either a reduction in benefits, or an increase in taxes to pay for it. But the system is not sustainable unless we do something.
The answer: cooperation, communication, AND sacrifice......by both sides.

JMHO

[Scanner]

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.

Among the argument that there are predators out there in the financial industry that even sucker the most savvy. Remember Madoff? At least the gov't requires some transparency.

As a staunch Constitutionalist, I happen to agree. The american people have been dumbed down into little socialist.

The Constitution is an antiquated document in a lot of ways and I am not sure I agree with worshipping it.

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?

I am open to it. . .but why do we need to feed the financial industries and Big Insurance any more than we already do?

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?

It's a Ponzi scheme only if

A. We don't continue to have births.
B. We adopt a staunch anti-immigrant policy that prohibits young workers entering our country to be productive and pay taxes.

YOu don't think America has gotten any more anti-Immigrant in the last 2 years, do you?

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.

Compared to Medicare, SSI looks like a gold mine.

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?

I don't agree with privatizing. There are ample opportunities to invest outside of SSI. Look what happens when we privatized jails in Texas - they're a mess.

I just don't always buy the fact that Private Sector always trumps the Public Sector.

[maat55]

[QUOTE]

Among the argument that there are predators out there in the financial industry that even sucker the most savvy. Remember Madoff? At least the gov't requires some transparency.

So, you compare T. Rowe Price, Vanguard and Fidelity to Madoff? I actually equate Congress to madoff on steroids.

The Constitution is an antiquated document in a lot of ways and I am not sure I agree with worshipping it.

The Constitution was established to restrain the federal government from interfering in the states and individuals personal issues. Its only duty is to protect property rights and freedoms from foreign and domestic threats. How this can be antiquated is strange to me.

You might as well tells us that living below our means is antiquated.

I am open to it. . .but why do we need to feed the financial industries and Big Insurance any more than we already do?

Because they provide a better product. If you stopped and really judged SS,SSi and medicare for their performance and solvency, you would find they would not come close to private sector insurances and returns. BTW, the average SS recipient recieves 13k per year after investing 12.4% of their income for 40+ years, of which for the most part have nothing to leave their families.

It's a Ponzi scheme only if

A. We don't continue to have births.
B. We adopt a staunch anti-immigrant policy that prohibits young workers entering our country to be productive and pay taxes.

YOu don't think America has gotten any more anti-Immigrant in the last 2 years, do you?

Is population a critical element in your portfolio?

Compared to Medicare, SSI looks like a gold mine.

Just another example of improper federal government. It is not wise to have a drunken sailor, having huge financial responsibilities, also have a printing press.

I don't agree with privatizing. There are ample opportunities to invest outside of SSI. Look what happens when we privatized jails in Texas - they're a mess.

What ample opportunities? Has it escaped you that a majority of americans do not save properly for retirement? This is not solely because they are idiots, it is also because they are having 15.3% of their incomes confiscated by Bernie on steroids.

I just don't always buy the fact that Private Sector always trumps the Public Sector.

I don't recall the american dream being addicted to government programs.

[tripods68]

I voted Republican all my life, and not ashamed to admit it. But I have change the last few years toward more moderate, fiscal conservative, liberal in most social issues especially when it comes to women's right.

I truly believe government have a duty to provide its citizens basic functions, protecting its citizens, especially the vulnerable (young, old, and disabled), provide education, defense, and upholding our Constitution. In the modern society, there is something MORALLY WRONG if this great Nation doesn't provide some "safety net".

I agree, Social Security, Medicare, and Military spendings changes must change. However, it must not be done over time to avoid many unattended consequences. Eliminating either entitlements isn't an answer either. But privatizing it ALL will actually do more harm done good (i.e, GREEDY WALL STREET) invite more corruptions without oversight regulations.

So my solutions:

--Earners making $1 million or more should pay millionaire surcharge tax.
--Closed all TAX LOOPHOLES (US based companies can't hide their billions profit outside the US to avoid paying).
--Amend the Constitution to add debt ceiling or balance budget requirement
--Raise middle class taxes by at least 1% to 5% (everyone pay taxes)
--Pay Higher Tax Rate on family making $250K a year, OR Flat Tax across the board
--Better yet, have Consumption TAX across the board
--Increased Corporate tax from 35% back 39% permanently.
--CEO & Board of companies should pay additional taxes because of their overall compensation is tied to the overall profitability of the companies (stocks) while the rank-and-file workers income has been stagnant for the last 30 years.
--Eliminate Mortgage deductions
--Cut defense spending by at least $100 billion in the next two or three years. Now we're talking!

Achieve any of the 7 of 10 listed above, then I am willing and ready to change all entitlement programs.

[maat55]

[QUOTE]

I truly believe government have a duty to provide its citizens basic functions, protecting its citizens, especially the vulnerable (young, old, and disabled), provide education, defense, and upholding our Constitution.

In the modern society, there is something MORALLY WRONG if this great Nation doesn't provide some "safety net".

Maybe you need to read your Constitution. It was not established in order to provide safety nets for the people, it was establisned to provide national defense and see to national threats and not those of the individual. The founders attempted to guard the states and individuals rights from the federal government.

I agree, Social Security, Medicare, and Military spendings changes must change. However, it must not be done over time to avoid many unattended consequences.

A phaseout would take some time.

Eliminating either entitlements isn't an answer either. But privatizing it ALL will actually do more harm done good (i.e, GREEDY WALL STREET) invite more corruptions without oversight regulations.

I suppose you have pulled all of your investments out of mutual funds and the market, right? Have you really looked at how Congress has managed SS/Medicare? Why do any of us waste our time saving for retirement outside of the government? How many people do you know, that are living well in retirement, do so on SS? Do you really think that having 12.4% of your income confiscated by a Bernie on steroids, for more than 40 years to recieve a poverty level check each month, constitutes a good product? Not to mention that SS/Medicare are massively under funded(BANKRUPT).

I'll address your solutions when I get home.

[tripods68]

[QUOTE=maat55;290468]

Maybe you need to read your Constitution. It was not established in order to provide safety nets for the people, it was establisned to provide national defense and see to national threats and not those of the individual. The founders attempted to guard the states and individuals rights from the federal government.

A phaseout would take some time.

I suppose you have pulled all of your investments out of mutual funds and the market, right? (BANKRUPT).

Yes! Our constitution doesn't mention "safety net", but our founding fathers also believe the Constitution were meant to change/amend over time, as it should.


I still believe in the market place as my Pension, Roth, 457 are all tied to the market. That's the option that we have today so to millions of Americans who wants a secure retirement. I'm force contribute to my pension, pay social security, and medicare to sustain the system. With that--I would like to benefit from what I contributed to the system as well. Why should I not be entitled to what I put in? We should be disgusted that your Government wants to eliminate it after we've already put in almost 20 years in the system and end up with NOTHING. That doesn't seem right to me. Do you? People in my age group should be OUTRAGE, MAD as HELL for this! Let me clarify, not all companies are corrupt, I prefer companies that actually make and produce things for profit. "Pushing paper" and then make billions of profit--off people hard work seems dubios unworthy.

Giving away too much credit is way allows this system to be corrupt. FEDS should stop propping the rates. Fed should stop buying US Treasury, and let it the market rates float as it should.

I don't particularly like what has happened to our Banking industry. Sure it opens up credits to consumer, finance consumer's spending habit, small businesses, etc, but also helped fueled the debt crisis in America. Removing the Glass Steagal ACT was a costly mistake. The idea of bailing out these SuperBanks with taxpayers dollar was the crux that broke the camel's back for me without anyone going to jail to this day.

[disneysteve]

I have no problem with Congress mandating that insurance be uniformed for those healthy and having pre-conditions provided their condition is not self-imposed.

I'm curious where you draw the line on this issue. As a very busy family practice physician for the past 18 years, I can tell you that a high percentage of conditions that I treat every day are self-imposed. Obesity, smoking and sedentary lifestyle, to name a few biggies, account for a tremendous segment of the healthcare pie.

[Scanner]

So, you compare T. Rowe Price, Vanguard and Fidelity to Madoff? I actually equate Congress to madoff on steroids.

Hey even Janus, a respectable mutual fund company, got in trouble for some fraud years ago (paid fines).

It's not beyond TRP, Vanguard or Fidelty to totally wipe a person's savings out.

The Constitution was established to restrain the federal government from interfering in the states and individuals personal issues. Its only duty is to protect property rights and freedoms from foreign and domestic threats. How this can be antiquated is strange to me.

You might as well tells us that living below our means is antiquated.

Well, okay, the gov't takes 15% of your income. What's stopping you from living 30% below your means?

Why does every family have to have a house? Could 2 families share a house while 2 families share for retirement?

Why is the American Lifestyle a Sacred Cow but SSI and Medicare aren't?

Because they provide a better product. If you stopped and really judged SS,SSi and medicare for their performance and solvency, you would find they would not come close to private sector insurances and returns.

Actually, that is simply "Rush-talk" - I hate to tell you. Look, I have no love of Medicare - in fact, to a doctor, they can kind of be scary. . .but they have over 97% efficiency of premiums collected to care delved out, not to mention the contracting leverage they have.

Private pay sometimes achieves 90%.

Again, I know no capitalist likes to hear that and Medicare does have some problems, namely physicians are getting to the point they may opt for a Conceirage type of practice and just simply opt out.

But for just the basics of healthcare, Medicare beats anything private.

Now. . .more to the topic SSI. . .I do think the private sector is superior for retirement. It IS better to put your money in TRP, Vanguard and other sacred cows. That being said, for disability, there is often no other social net available.

I have tried for years to get disability insurance. I am bare right now. You know why? No private company wants to insure chiropractors.

Apparently, back during the Mercedez 80's a lot of chiropractors used their disability policies as a "Golden Parachute."

"I'm getting tired of practice, my hand are achey, my back in achey. I think it's time for me to go out on disability." The same thing happened in general medicine too but maybe to the large degree it happened in my profession when managed care hit it.

So what's the result? Since mid 90's when I started practice, no disability policies.

I am reliant on SSI for that safety net and I am frankly not sure any private companies can pick up the slack. SSI won't give much if I am disabled, but I would appreciate what it would give me.

[LivingAlmostLarge]

Maat, my in-laws, friends and family living there currently do not buy tickets to the US. Rather they stay there in Canada because it is superior. As are others in socialized countries. I have multiple friends and families compared to one client. Ask that client when they would come to US? Ask them if they know what it really costs and tell them to "Show me the ticket!" Then i'll believe. In fact I believe Debbie is in Vancouver, why don't we get her to comment? I will call her out and ask if she believe most people she knows (canadians living and working in canada are coming to the US for healthcare?)

I don't think so. Our healthcare is broken and it needs to be fixed. Medicare costs more than SS and that's not debatable. But people argue over SS.

Second, 12.4% is only for self-employed. Sorry to say most people are not self-employed and let's be honest again, why employer is going to give us a 6.2% in raise? Rather they'd pocket the money. But assuming we got to manage where that 12.4% went, again let's be honest how many people could even invest it properly? Not many. How many would be able to use it to prepare for disability or death?

Furthermore, 12.5% or 6.2% = 13k/year? Nice. Why? Come on the average salary is $48k/year so this person is getting back 25% of their income from saving 6.2%. Better than getting nothing.

SS does need some revamping but a lot of the problems are due to people living longer and living off of SS longer than initially thought.

[maat55]

[QUOTE=LivingAlmostLarge;290516]

Second, 12.4% is only for self-employed. Sorry to say most people are not self-employed and let's be honest again, why employer is going to give us a 6.2% in raise? Rather they'd pocket the money.

This is a myth. Employers would be forced to keep providing the additional 6.2%. Just because you privitize a system, does not mean you avoid government mandates. I as an employer would do exactly what I am doing only it would go to the brokerage as apposed to the drunken sailors in Washington.

But assuming we got to manage where that 12.4% went, again let's be honest how many people could even invest it properly? Not many. How many would be able to use it to prepare for disability or death?

There would be qualified brokerages that would have to meet certain mandates in order to participate in the program. These mandates would include disability and term insurances.

Furthermore, 12.5% or 6.2% = 13k/year? Nice. Why? Come on the average salary is $48k/year so this person is getting back 25% of their income from saving 6.2%. Better than getting nothing.

No, it is 12.4% invested over a 45 year period. You run the numbers, the likely returns will be in the 7% to 10% range. Even at 4% and up, they would provide far superior monthly incomes even when placed in annuities. You know the 401k system, there are a mixure of funds to choose from, for they who do not want to research, they can use a target fund.

SS does need some revamping but a lot of the problems are due to people living longer and living off of SS longer than initially thought.

In 1935, the average recipients were expected to live 13 years past the mortality rate(63) when you considered only they who reached 21 years of age. This means that living longer is not that big an issue.

Life Expectancy for Social Security

If we look at life expectancy statistics from the 1930s we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits. Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security. A more appropriate measure is probably life expectancy after attainment of adulthood.

As Table 1 shows, the majority of Americans who made it to adulthood could expect to live to 65, and those who did live to 65 could look forward to collecting benefits for many years into the future. So we can observe that for men, for example, almost 54% of the them could expect to live to age 65 if they survived to age 21, and men who attained age 65 could expect to collect Social Security benefits for almost 13 years (and the numbers are even higher for women).

Life Expectancy for Social Security