Social Security???

[Laker]

Is there a thread on this? I looked for the first several pages and didn't see it.

If not, there needs to be one. If there is, please post the link. Thanks.

I don't think there has been a debate about this. At least not recently -- have at it!

[Laker]

Why did the democrats stand up and clap about doing nothing to social security during the president's address? It angers me that people are playing partisan politics instead of trying to find a solution for the next generations to come. I don't want to pay more, I just want the program reformed so that social security earns a competitive return, there is less cost in administering the program, etc. The "just raise taxes" method is not acceptable to me.

I would like to see reform in social security. The system will go bust unless we decrease benefits or raise taxes or both.

I liked the private accounts idea. I like to invest and be in control of my own money. Also, it would be nice to be able to bequeath that benefit to your loved ones.

[DCJenn]

Why private investing is a BAD idea?

Because I would conservatively guess that 70% of the American population has NO idea how and why to invest their money, are too lazy or don't trust Big Business and also aren't willing to risk losing 'guaranteed' income.

Would I personally do a better job managing my finances? Well, better than my husband, probably not better than my financial advisor. (but you never know, the 6th grade class in DC did a better job of picking stocks last year than the numerous financial planners that the Wash Post asked to participate...)

I managed to get the majority of my staff to participate in the 403(b) program at my office- think High school diploma/GED level who don't own anything other than their cars (maybe). But it took me several meetings with my staff and me basicially standing on my soapbox telling them "We don't pay you for crap so let the company give you money through the match- and yes, you WILL be working until you're 75 so do what you can to get as much money for then when it's still painless." Seriously. These were majority first generation immigrant children who grew up with their parents saving cash under the mattress. The concept of investing is what "rich white people do" (Direct quote from my secretary)

Does Social Security need to be reformed? Yes, but not so that the undereducated or uneduicated masses get screwed in the process.

Jenn

I think part of the SS private investment thing is that plenty of people are aware of what happens when investments fail, when you lose your whole life savings because you bank is rushed. Yeah, I know we have FDIC and that stuff now, but its not ancient history for many retirees and Boomers. As we all know, it wasn't just Rockafellers and Morgans who felt the bust, it was middle class business owners and professionals too, and when they went belly up, so did the people they employed.

I like the idea of private investment or savings accounts, and I think all workers should have access to them, following them from employer to employer but as supplements to SSI, taken out of their wages the same way SSI is. But when you are dealing with a huge percentage of the population who are living paycheck to paycheck, saving isn't a high priority.

I can't remember where I read it, raising the income cap for SS taxes from 90K to say 150K. would help fill the coffers again.

[PrincessFiona]

I can't remember where I read it, raising the income cap for SS taxes from 90K to say 150K. would help fill the coffers again.

Interesting idea...until it affects you though. We just finished filing our taxes...thanks to the ATM, we paid...are you sitting? A total of 100k after we just paid in more. Seriously, if this country decides to raise the income cap for SS from 90k to 150k, I'm so out of here...because I'd rather live in Sweden where I actually GET something for that money!

I know that there are people here saying "hey, why NOT pay that much in taxes"...well...why should I pay proportionately so much more than someone else?

Back to the question at hand. Laker, I'm on the fence on this issue. I don't know that privatizing social security is the answer for many of the reasons that Jenn already outlined. It is, in my opinion, too risky to put too much of our retirement into investments that aren't a 'sure thing'. At the same time, it is an inviting idea to think that we might be able to control how some of our money is invested. That being said, my uncle had to go back to work after retiring because his investments went belly up and we left with practically nothing...My mom's retirement fund dropped over 30,000 in the last couple of years...and my dad lost a boatload too. At some level, that 'sure thing' of $900/month (or whatever you'd get depending on what you've paid in) doesn't seem so bad.

I also wondered where on earth we were going to borrow another couple of trillion dollars from to make the transition to the private accounts.

I don't know that I have a clear idea of what 'should' happen yet. I also agree that it was silly for the dems to be applauding doing nothing...I would day thought that I think Medicare is a bigger problem than social security right now and should be addressed with more/if not equal vigor.

I believe that democrats have been much to silent on producing alternative, viable ways to fix the problem of social security. Hiding behind partisan applause is a cop-out in my view. At the same time, republicans blindly supporting administration policies and painting any dissenting/questioning voice as anti-american is also wrong.

Cheney is right :! Americans need to start saving! Most Americans do not realize how little money social security will actually provide them with. We have a massive personal debt-load and are so busy consuming instead of putting aside anything for the future. Of coruse, with wages so low in many fields, that's tough to do.

I'd start with advocating a higher minimum wage..I'd quit outsourcing and paying new workers less for the same job...and maybe I'd add a new 'private investment' tax of sorts....just a couple of cents on the dollar...that would be removed from people's paychecks and would be put into a private investment account that they could only touch during retirement. Too many people don't save or invest because they "don't have the money" but can afford their cigarattes, etc. (Am I starting to sound like a neocon )

My own brother will end up penniless at the end of the day because he is irresponsible with his money and..he doens't have a high-paying job. As a society, we will end up picking up the tab for his healthcare/maintentance etc...it will happen...so..maybe taxing him a couple of extra cents on the dollar now and putting it into a private tax investmetn fund on TOP of social security wouldn't be such a bad idea.

long-winded...sorry.

kris

[Laker]

The idea has always been to offer certain choices in the "private accounts". These would have been diversified in stocks/bonds/real estate/foreign markets etc... You just select a group with a mix that you like or just pick any box. It really could be dumbed down so that everyone could just select a box. That way you can at least have some control and along with it would have been the "ownership" so that you can gift it to you family upon your death.

The idea that social security is "guaranteed money" is simply not the case. The system will go broke. It is only a matter of time. There are going to be more people drawing on it than paying in or at least such a small ratio of payers to drawers that it simply will fail. Therefore, clapping about doing nothing is screwing anyone younger than the baby boomer generation.

Even if they just took the money and invested it into goverment bonds it would earn a higher rate than it is currently. The rate of return is not even keeping up with inflation. A bank account would be better....anything.

[PrincessFiona]

I think the problem is just the idea of risking guaranteed money...which...it could continue to be. Social Security isn't teetering on the edge about to explode. We're still sitting on plenty of reserves and with some changes we could end up not having the shortfalls in 2042.

I think people get nervous at the "The sky is falling" throw the baby out with the bathwater politics around this issue. It's not like the republicans came out and said "Here is the problem that will be hitting us in about 35 years...what can we do to solve it.." and then came up with several alternatives including privatizing social security. To me, it felt like just another attempt to steer away from any type of humane politics...more big business in our lives.

I know plenty of people who've lost a lot of money in diversified funds...ours has actually gone down $4000 this year. It's good that we aren't close to retirement or don't have a lot more invested that we are losing...but the markets just aren't a sure shot either. You can 'dumb it down' as much as you want, but with corporate greed what it is and the Enron scandals etc out there showing falsifying books to make dividends appear larger, etc I think the public is a little wary of investing right now. I dislike the idea of being dependent on the same businesses who are outsourcing our jobs and underpaying our workers for the sake of my retirement...it's a real source of conflict for me.

I am NOT opposed, however, to the idea of an additional 'social security' on top of the one that we currently have...while we're busy fixing social security or deciding how best to change it, people could be forced to put some of their money aside by 'ticking the box'. Everyone would have to do it...and maybe if it ended up being successful, people would be less afraid to slowly make a more permanent switch.

I actually don't think social security will go broke. There are many things that we could do over the course of the next 30 years to put things right.

There are bigger problems to deal with right now, imo...medicare, healthcare, etc. This is a red herring issue.