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  1.    #1  
    (Information for this is borrowed, in part, from David Wessel, a WSJ writer.)
    I urge people to respond with ideas and suggestions. Thanks.

    * What's the matter with Social Security?
    -The fundamental problem is demographic. In 1960, there were five workers for every Social Security beneficiary. Today there are slightly more than three. In 30 years, there will be only two.

    * How big a tax increase would stabilize Social Security?
    -Social Security today depends on the payroll tax, income taxes collected on benefits paid to the highest-income elderly and interest on agency's holdings of government bonds. The system could be financed by other federal taxes. An immediate 15% increase in the payroll tax -- from today's 12.4% on wages to about 13.9% -- would stabilize the system for 75 years, according to Social Security's trustees (four government officials and two outsiders).

    * What would private accounts do to stabilize Social Security's finances?
    -In the short run, they would cause a problem. Social Security depends on taxes paid by today's workers to pay today's retirees. If those taxes are diverted to private accounts, then the government has to find another way to cover those retirees' benefits. Mr. Bush proposes to borrow the money, perhaps $1 trillion or $2 trillion over 10 years.
    Over the long run, private accounts are a wash, at best, for the system. Diverting payroll taxes to private accounts would reduce the flow of tax money into the system in exchange for reducing government benefits when workers with private accounts retire. That's why the White House, to the consternation of some Republicans, says the president will seek other money-saving changes to the program.

    *Are there other sorts of private accounts?
    -Yes. Many Americans already have Individual Retirement Accounts or 401(k) retirement accounts. Several Democrats would expand those, creating private accounts alongside Social Security without diverting payroll taxes into them."

    * What are the leading alternatives to Mr. Bush's proposal?
    -Economists Peter Diamond and Peter Orszag offer a detailed plan to raise payroll taxes to 14.2% (split between employer and employee) by 2055, increase the base on which taxes are levied, lift the age for the full retirement benefit, and trim benefits for higher-income recipients while increasing them for low-income workers.
    Robert Pozen, a former Fidelity Investments vice chairman who served on Mr. Bush's Social Security commission, embraces the structure of the plan that the Bush administration praises -- but he would make it more generous to lower-income workers and less so to higher-income workers.
    Sen. Lindsey Graham, a South Carolina Republican, would offer workers under age 55 a choice: Stay in today's Social Security program and pay two percentage points more in payroll taxes or accept lower benefits or divert four percentage points of payroll taxes into a personal account in exchange for accepting lower benefits. Full-time workers who took the private-account option would be guaranteed a retirement benefit 20% above the poverty line.
    Two other Republicans, Rep. Paul Ryan of Wisconsin and Sen. John Sununu of New Hampshire, would allow workers to divert an average of 6.4% of wages (10% on the first $10,000 of wages and 5% on wages above that) to private accounts in exchange for accepting lower benefits. They say they would guarantee that all workers would get at least as much from combined government benefits and personal accounts as Social Security promises today. To pay for all this, they vow to restrain the growth in other government spending and count on a tax windfall from the added saving and corporate investment generated by private accounts.

    * What is the Social Security trust fund?
    The trust fund is an accounting device, but one with enormous political significance. Franklin D. Roosevelt wanted a program that workers would see not as a welfare program, but as one into which they made contributions and got old-age pensions. "If I have anything to say about it," he once said, "it will always be contributed, both on the part of the employer and the employee, on a sound actuarial basis. It means no money out of the Treasury." The creation of a Social Security trust fund in 1939 to serve as a holding pen for worker contributions solidified this notion.
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    I have never let my schooling interfere with my education.
    -Mark Twain
  2. #2  
    In today's NY Times, Paul Krugman addresses some issues about the proposed reforms. The most interesting note is that the same economic projections used by the proponents of the Bush plan to show that private accounts will work can also be used to advocate making little or no changes in the current system. It is interesting that the Bush people can be so confident in the market to make private accounts desirable, but at the same time so gloomy about the economy growing enough to support current benefits.
    Zane
  3. #3  
    This is one of the clearest, most concise explanations I've seen. One thing it makes clear is that the Bush plan, whether you agree with it or not, has more to do with ideology than with "fixing" social security. Even Bush has had to acknowledge that other cost savings (lower benefits, higher taxes, higher retirement age, or some combination) will be necessary even with his privatization plan.
    Bob Meyer
    I'm out of my mind. But feel free to leave a message.
  4. #4  
    It seems clear to me that Bush and Cheney are using misleading information in an effort to scare people into social security reform.

    http://factcheck.org/article302.html
  5.    #5  
    Perhaps some cynics will consider this thread as (yet) another anti-Bush propaganda, but it isn't. The Wall Street Journal is a pro-Bush newspaper and very conservative. The author of the article was neutral in his points and directions. Besides, GWB has his heart in the right place on this particular issue (I am no fan of the president, as you might now), but his "fix" to this huge problem might be a tiny band-aide size.
    Privatization is a misleading word to begin with. Neither the president nor most economists suggest to embark on a full-scale privatizing process. Yet something needs to be done and MORE discussions by lawmakers are needed. I have 401k via my job, which is a "privatized" system to save for retirement (meaning I have control over my money), and I like that. But many American are either deprived nor expose to 401k/401b and such. Many retirees never had 401k/b in their arsenal either.
    I have never let my schooling interfere with my education.
    -Mark Twain
  6. #6  
    I think we have more important problems to deal with and social security isn't one of them. On top of that - can you really trust a bunch of rich white guys to make the right decisions for the rest of us?

    Just my two cents...

    a middle class white guy.
  7. #7  
    You have the right mindset m00se, in that you " have control over my money." More people should adopt this attitude. Unfortunately, people have becomed conditioned to grovel at the Government trough.

    Social Security was realistically, never intended to be a retirement plan. But it seems the masses are conditioned to believe this. If one were to take that same amount that the government withholds, and invest it...mutual funds, IRA, gold, whatever, they'd be far better off in the long run. However, Economics is lost in the High School curriculum, and people go into the world these days without a clue as to how to mange their finances.
    MaxiMunK.com The Forum That Asks, "Are You Not Entertained?"

    Remember: "Anyone that thinks the Treo should just work right out of the box, shouldn't own a Treo..."
  8. #8  
    Quote Originally Posted by Insertion
    You have the right mindset m00se, in that you " have control over my money." More people should adopt this attitude. Unfortunately, people have becomed conditioned to grovel at the Government trough.

    Social Security was realistically, never intended to be a retirement plan. But it seems the masses are conditioned to believe this. If one were to take that same amount that the government withholds, and invest it...mutual funds, IRA, gold, whatever, they'd be far better off in the long run. However, Economics is lost in the High School curriculum, and people go into the world these days without a clue as to how to mange their finances.
    Is it true that Social Security was originally just a retirement program?

    A: Yes. Under the 1935 law, what we now think of as Social Security only paid retirement benefits to the primary worker. A 1939 change in the law added survivors benefits and benefits for the retiree's spouse and children. In 1956 disability benefits were added.

    Keep in mind, however, that the Social Security Act itself was much broader than just the program which today we commonly describe as "Social Security." The original 1935 law contained the first national unemployment compensation program, aid to the states for various health and welfare programs, and the Aid to Dependent Children program.

    ---


    We should always strive to do better for ourselves and our community. Even if that means government assistance. Just my opinion.
  9. #9  
    Quote Originally Posted by larry91403
    Is it true that Social Security was originally just a retirement program?

    A: Yes. Under the 1935 law, what we now think of as Social Security only paid retirement benefits to the primary worker. A 1939 change in the law added survivors benefits and benefits for the retiree's spouse and children. In 1956 disability benefits were added.

    Keep in mind, however, that the Social Security Act itself was much broader than just the program which today we commonly describe as "Social Security." The original 1935 law contained the first national unemployment compensation program, aid to the states for various health and welfare programs, and the Aid to Dependent Children program.

    ---


    We should always strive to do better for ourselves and our community. Even if that means government assistance. Just my opinion.
    Your opinion is always welcome! At any rate, if you notice in my post, I said "realistically." When introduced in 1935, benefits would be paid at age 65. Do you know what the average life expectancy was in the US? Around 62 years. Hence , "realistically."
    MaxiMunK.com The Forum That Asks, "Are You Not Entertained?"

    Remember: "Anyone that thinks the Treo should just work right out of the box, shouldn't own a Treo..."
  10. #10  
    Quote Originally Posted by larry91403
    ...can you really trust a bunch of rich white guys to make the right decisions for the rest of us?

    Just my two cents...

    a middle class white guy.
    Well lets get some poor dumbazz bubbas on the job. They should be able to come up with a great plan
    Well behaved women rarely make history
  11. #11  
    Quote Originally Posted by clairegrrl
    Well lets get some poor dumbazz bubbas on the job. They should be able to come up with a great plan
    Well (to be serious for a moment if that is possible)...

    It should probably be a group that represents everyone - not a representative body of people that makes recomendations for change. So...

    dubya rich
    rich
    middle class
    poor
    dumbazz bubbas
  12. #12  
    Quote Originally Posted by Insertion
    ...Do you know what the average life expectancy was in the US? Around 62 years. Hence , "realistically."
    Do you know that I don't care. I think we all have a collective responsibility to look out (financially) for our elderly. This is an area where we might differ. I think it is sad that in what is suposedly the best country in the world we are not looking to increase these government benefits instead of looking for ways to weasle out of them. I am willing to accept increases in my taxes to pay for it because I know that it is for the good of my fellow man. But then I would also be willing to pay more in taxes if it meant universal healthcare. Of course I don't want my taxes increased until we stop paying for stuff like illegal wars and offices of faith based initiatives.
  13. #13  
    Quote Originally Posted by larry91403
    Well (to be serious for a moment if that is possible)...

    It should probably be a group that represents everyone -
    Isnt that Congress?? With Senators and Representatives directly elected by our citizens I would think that issue is covered.
    Well behaved women rarely make history
  14. #14  
    Quote Originally Posted by larry91403
    Do you know that I don't care. I think we all have a collective responsibility to look out (financially) for our elderly. This is an area where we might differ. I think it is sad that in what is suposedly the best country in the world we are not looking to increase these government benefits instead of looking for ways to weasle out of them. I am willing to accept increases in my taxes to pay for it because I know that it is for the good of my fellow man. But then I would also be willing to pay more in taxes if it meant universal healthcare. Of course I don't want my taxes increased until we stop paying for stuff like illegal wars and offices of faith based initiatives.
    Aside from perhaps immediate family, I have no responsibility to look after any elderly person. I may choose to help someone, if am able to financially, but count me out of your collective hive mentality.

    Nor am i looking for universal healthcare. Aetna works just fine for me. If I'm making a poor leap in assuming this, forgive me but, you seem to be the type that rails against the "Evil HMO's." Do you really want a Government HMO?? How insane is that idea?

    Every year we hear of how we must save SSI. Now you want to throw another entitlement out there. Isn't Social Security enough? What will happen in twenty or thirty years (if Universal Healthcare is realized) when we're having the same bankrupt debate over healthcare funding? How much money do you want to give the Government? Sixty percent of your pay? Seventy-five??

    Why people need the Government to hold their hands throughout life is something I'll never comprehend.
    MaxiMunK.com The Forum That Asks, "Are You Not Entertained?"

    Remember: "Anyone that thinks the Treo should just work right out of the box, shouldn't own a Treo..."
  15. #15  
    Quote Originally Posted by clairegrrl
    Isnt that Congress?? With Senators and Representatives directly elected by our citizens I would think that issue is covered.
    Not quite. You are talking about represenative government or republic. I am talking about a commission with represenatives in it from all walks of life.
  16. #16  
    Quote Originally Posted by Insertion
    Nor am i looking for universal healthcare. Aetna works just fine for me. If I'm making a poor leap in assuming this, forgive me but, you seem to be the type that rails against the "Evil HMO's." Do you really want a Government HMO?? How insane is that idea?
    YES!!! Since we have never tried it noone knows how it will work out. Anything can be better than what we have now. I have Aetna & Blue Cross and I can tell you that my payments go up every year and my coverage goes down. I am the type that rallys agaisnt the evil anything...

    Quote Originally Posted by Insertion
    Every year we hear of how we must save SSI. Now you want to throw another entitlement out there. Isn't Social Security enough? What will happen in twenty or thirty years (if Universal Healthcare is realized) when we're having the same bankrupt debate over healthcare funding? How much money do you want to give the Government? Sixty percent of your pay? Seventy-five??
    It is never enough when people can't afford to make ends meet. If the government can use my tax dollars to my benefit I would give them what it takes. We can agree to disagree.

    Quote Originally Posted by Insertion
    Why people need the Government to hold their hands throughout life is something I'll never comprehend.
    It's not about holding your hand. Think of it this way... You pay bills for every service you use (cable, phone, internet, medical, dental, vision, electricity, water, trash). All of these services are becoming as nessesary as food in our society. The private sector is shareholder driven and caters first to the stockmarket. The government does not have that added issue. If you pay collectively 300 bucks a month for all those services why would you care if they went to Aetna, SBC, Edison, Time Warner, etc.. or your state or federal government just as long as you got what you needed? On top of all that - SBC can go out of business and you might lose service - the US government cannot.
  17. #17  
    Quote Originally Posted by larry91403
    I am talking about a commission with represenatives in it from all walks of life.
    Sounds like a HUGE waste of time
    Well behaved women rarely make history
  18. #18  
    Quote Originally Posted by clairegrrl
    Sounds like a HUGE waste of time
    Just like this whole thread? :P
  19. #19  
    Quote Originally Posted by Chick-Dance
    Bury our head in the sand won't solve anything. It is a big problem and it does need to be resolved. And regarding a "bunch of rich white guys" comment, well, who are they?
    The White House and most of Congress (Republicans, Democrats & Independents)
  20. #20  
    Quote Originally Posted by Chick-Dance
    Last thing I want is to hold hands with the government, honestly. But any government on the face of the earth, to some extend, must take care of its citizens and to an acceptable capacity. Whenever I read about JFK's remark: "...ask not what your country can do for you - ask what you can do for your country," it rings volumes, I admit, but still: How far removed do you want to be from the government?

    We need to find a balance.
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