TomPaine suggestions on saving Soc Security - reduce National Debt! :-)

[papau]

http://www.tompaine.com/articles/an_easy_mark.php

<snip>One obvious and immediate way to relieve long-term pressures on Social Security financing is to reduce the national debt ... by ending our habit of running huge annual deficits or even better by paying down some of our accumulated debt (there are complicated macro-economic questions related to this second point; but in general it's correct.)

But what has President Bush done? He's presided over the biggest
fiscal turnaround in American history, taking the country from modest
annual surpluses to the biggest deficits -- at least in non-adjusted
dollar terms -- in American history. And that's only one reason why
you can make a decent argument that President Bush has done more than
any other president and perhaps any other single American ever to
endanger Social Security's future.<snip>

[The Judged]

1. Better yet, pay back all of the borrowed funds that are now gone 4ever!

Lots of I.O.U.'s in the Social Security cookie jar, but * wants to shred them and make believe that the program is an abject failure.

Please, just pay back the money that was robbed from the fund, that would have made the plan self-sufficient from day one until forever finally arrived. That alone would put the program in the black forever.

Who will ask about the money that Congress took away from the plan and never repaid?

Who will do this instead of agreeing that the plan is a failure?

As a result of the pilfering of the Social security reserves, the rules for participants have been modified already on numerous occasions, which has truly weakened the program for elderly recipients.

Now they point to pie in the sky and blame the program as a failure, rather than admit that they pilfered the funds that would have made the program self -sufficient and eliminated the need for all of these already enacted changes for participants.

Lastly, they want to reward the economic perverts on Wall Street with individual savings accounts, when the evidence is that Wall Street is out of control and responsible for some of the most heinous economic disasters known to mankind.

[mulethree]

3. Might depend on what you call Wall Street

Here is the 'Thrift Savings Plan'. A fund-type savings plan for Federal civilian employees and referred to as a model in the study Bush keeps referring to.

http://www.tsp.gov/ See 'Fund Sheets' on the right by the Bull ( Hah! should be a Bear given how the Common Stock fund has done the last few years )

This currently totals about $130 Billion, a SS accounts plan would quickly exceed that.

All the funds have management fees of $1 per $1000 of balance, so $130 Million a year in fees for the current TSP plan. This includes the Govt bond fund - managed by "Federal Retirement Thrift Investment Board" and the others, which are all managed by Barclay's.

Barclay's is a U.K. based bank - a London bank. Not quite the same as wall street. So of the $130 Million a year, they ship $75 million or so overseas. So if it were private SS funds of say $5 Trillion, we would pay $5 Billion a year in fees and perhaps send a bunch of it overseas?

Bond funds (Fixed Income) are marketed as lower risk than Stock funds (Equities). But notice the return chart of the 'G Fund' versus the 'F fund'. The Board managed 'G Fund' has fairly constant returns tied to the interest rates of the bonds they buy. The Barclay's managed 'F Fund' sometimes has negative or zero returns.

How do you get negative returns by buying and holding bonds that pay fixed or at least positive interest? By speculating on interest rates, and constantly buying and selling selling bonds, sometimes at a loss. Not a whole lot less risky than stocks except you theoretically don't loose out as bad in a case of bankruptcy.

[muriel_volestrangler]

7. Those management fees are a bargain too

The 'stakeholder pension' rules that the UK government introduced to try to get people saving for their own pensions have a maximum charge (which most providers are close to) of 1%, ie ten times what the Thrift Savings Plan gets charged. And that 1% is lower than many personal pension plans were before the stakeholder pensions started. Expect charges around 1% a year - if you're very, very lucky and there's a lot of competition, maybe .5%.

The one group who is guaranteed to benefit hugely from Bush's plans is the investment industry. They'll get .5% of your accumulated fund, each year, until you retire. That's probably equivalent to 10% from the end amount.

[bpilgrim]

2. make EVERYONE pay their share

stop the cut off after 90k

peace

[mulethree]

4. Not good enough

People who make under $90K a year, typically make 90% or more via wages. In the $500K+ a year crowd, income typically comes 50% or less from wages, when you look at Billionaires their paycheck is a tiny portion of their income.

So, make them pay the self-employment tax (12.65% = employer share plus employee share of FICA) on non-employment income? (Investment) (used to be un-earned income but they seem to have scrapped that name - wonder why?)

The Idea, now, is that your benefits are related to how much you pay in. It's skewed to give those who earn low wages a better return, but in general someone who makes $80K will get twice the benefit of someone who makes $40K.

So if someone pays FICA on $400K, and you pay them 5X the benefit of the $80K guy, what does that solve? How much do you pay them back? Given that they will have superior medical care, since they won't rely completely on medicare, they will likely live longer and collect their share for more years than those in lower classes. So pay them say 3X the benefit for 5X the contribution?

[papau]

5. the top end benefit factor is 15%, extending that to all wages, offset by

extending the payroll tax to all wages, means a major drop in the payroll tax rate for all of us because the SS system truly is progressive.

Like why else would Bush work so hard to kill it

And why else would the rich not be content to just steal from the system to finance their tax cuts, but also demand more - either more payroll tax surplus or the end to the system.

[struggle4progress]

6. kick