Fixing Social Security 'for Dummies'

[Blower]

SUBJECTS: FEDERAL RESERVE POLITICS ECONOMY

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www.libertywhistle.us

Fixing Social Security 'for Dummies'
-President’s plan will lead to “droves of old ladies with heart attacks”
By Dan Spillane The Liberty Whistle

(SEATTLE) 02/15/05 - There are several key points neglected in the debate over Social Security. First, the fundamental claim that change is needed is based entirely on projections of diminishing numbers of Americans paying in to the system, against those withdrawing—but this is key—the degree of this problem is totally dependent on the number of new jobs generated today, tomorrow, the next day…and every day in the future. In short, any policy that creates jobs paying into the system today--based on the existing and very successful structure of Social Security--also reduces the possibility for a shortfall tomorrow. Curiously, it is on this fundamental point that many Republicans base their claim of “need” for changes to Social Security; disappointingly, this is also where Democrats have missed a key chance to “pounce”--given the Bush administrations absolutely horrible record on job creation, weighed against the high expense of his tax breaks. Who for example, has figured out how many new workers should be paying into the system--based on the presidents original job creation promises related to his cuts? To wit, today there would be millions more paying into the system, if it weren’t for so-called “job creation policies” of Bush and the Federal Reserve…which instead, encourage overseas investment, favor job-destroying mergers, and incite high producer inflation which trounces US jobs.

Another key point overlooked by Democrats is the positively absurd suggestion that money be put in the stock market, given certain other claims made by Mr. Bush. Specifically, the president has repeatedly told us that we are at risk for terrorist attacks for years to come. Now, it doesn’t take a genius to figure out the stock market is not a very secure place to save money as a nation. A relatively small attack on September 11th had severe financial effects. Under the president’s plan, old ladies would be driven to heart attacks in droves, in the likely case the nation suffers another incident like September 11th.

Astonishingly, no one has yet pointed out how the President’s claims about “terror” are completely at odds with his plans for private investment accounts, which are completely and utterly inappropriate for a terrorism-hardened society. Let’s not forget to remind the president that the idea for Social Security in the stock market came from a “pre-911 way of thinking.”

[shraby]

1. If they put the amount of money (2 trillion dollars) it would take

to "fix" social security into the system, there would be no shortfall for the foreseeable future.

[Blower]

2. without 2 trillion, as well, things are okay for some time

Actually, if job growth were strong, no money would be required ever

That is the point I am trying to make.

Here they are talking about less workers per retired, and the labor force participation is going down!

[Blower]

3. kick

[Callboy]

4. If Congress kept their snouts out of the ss fund then

we wouldnt have this problems. Whose idea was it to pop the ss gucchi to get extra money for other purposes anyway. And yeah, I really trust that this new pvt account will be mine and they wont be able to touch it. Just like the ss lock box.

[SharonAnn]

5. Social Security came about because of a complete stock market failure.

STocks crashed, the market tanked, banks failed, many people lost all their savings and all their assets (especially if they had been borrowed against).

People who had saved for a lifetime were wiped out!

The economy collapsed, people lost their jobs and there were no new ones. There was no Unemployment Insurance, people became homeless and went hungry.

That's why Social Security was developed. And it's why Unemployment Insurance was started.

We didn't think it was right that families should be on the streets and starving, especially when they had been working and "playing by the rules" and it was the greedy "fat cats", the "market makers", the bankers, the financiers, in other words, the Republicans who had caused this.

[David K.]

6. A key is found to Social Security

Rise in immigration could cut the deficit
 
"WASHINGTON The size of Social Security's financial shortfall in the decades ahead will depend partly on how many people are allowed to immigrate to the United States, a new report shows.

"The report, based on an analysis of data from the Social Security Administration, concludes that if legal immigration rises by one-third over the next 75 years, the result will be a 10 percent reduction in the Social Security deficit."

http://www.iht.com/articles/2005/02/16/news/socsec.html

So, now the bait and switch. This immigration growth is all OK now so that Social Security will be better off! Maybe the Social Security "crisis" is all about increasing immigration as the end game.... Just a thought.

[Blower]

7. That article was written by my Repub evil twin!

I noticed that article after I wrote mine.

His analysis basically says the same thing as me. Except he says "don't give Americans job at normal wages. Instead, bring in cheaper labor."

Yet I don't get his point entirely. Based on his analysis...so current Americans won't be hired at normal wages, if at all? The labor participation rate of Americans has plummeted as they have given up looking since their jobs are offshored.

"Move over, unemployed, we will bring in cheap foreigners to do your job, and support the old."

[JPZenger]

8. The Easy Fix for Social Security

There is an easy way out of the Social Security funding problems. Charge the same rate of social security tax on people making over $90,000 a year as people making less than that amount. Then put all that ADDITIONAL money into index funds in the Stock Market, where it cannot be raided by Congress. All revenues would be required to go back into buying more index funds.

When Clinton proposed this in the 1990s, he was attacked because the U.S. Government would be "picking winners and losers" in the stock market.

However, with index funds, they are buying a sampling of all stocks based upon their current market values. Based upon consistent trends over many decades, the rate of return would easily surpass the measely rate of return that Social Security gets from its current investments in U.S. Treasury bonds.

This would greatly simplify the process and guarantee social security income to people no matter how long they live. With true private accounts, there is a danger that people may outlive their savings.

The main difference in having the Feds buy index funds vs. having individuals set up their own "low risk balanced" retirement accounts is that the Social Security fund would be keeping the money if someone died prematurely, vs. under Bush's plan the heirs could inherit it. I believe it is the job of the Feds to guarantee seniors and disabled persons a basic standard of living that will be there no matter what happens, vs. helping their kids get rich without their working for it.

[Blower]

9. Government putting money in stock market not good

Particularly in the "era of terrorism", per the article.