I'm still confused about this SS crap

[holiday]

I'm trying to talk to a freeper and she thought that under Bush's plan when you die your children get your money in your private account. Well I set her straight on that due to an article I read today "What Mr. Bush Isn't Telling Us" by Marie Cocco

Now this is what I get in return:

I wonder if the government is trying to get of the SS business
altogether. If they are then it would cut our taxes dramatically and we
could take that money and put it in our 401k's or investment accounts.
I don't know how it works for people who never paid in to it to begin
with. Do they currently get it anyway?"




Now this person is BIG on wanting to pay less taxes, less taxes, less taxes. She says people would have more money and then could give to charities themselves instead of having these taxes and be forced..I have tried to tell her that Bush's tax cuts didn't make us any richer... we have more than made up for that money by our schools and cities not getting enough money from the government so they are coming to us (we are having huge school levy problems here!)

Is this how Republicans think? They don't want SS either. I know that neocons don't want it but regular republicans don't? What about other political parties?

[Worst Username Ever]

1. Doesn't she understand that freedom isn't free?

[bryant69]

2. There is a strong anti Social Secuity Strain in conservative thought

You just go look at how they talk about Social Security and you can see that--check out this post from yesterday --> http://politicalcomment.blogspot.com/archives/2005_02_06_politicalcomment_archive.html#110780495593494676

But does that mean your average REpublican is ready to drop Social Security? I don't think so. Some are, sure. But many more have seen the benefits of Social Security in their individual familes.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[sinkingfeeling]

3. Ask her if she really believes that over the course of the next

30 years or so that the stock market will never decline? Aske her what will happen with the declining US dollar and if those countries that have loaned us trillions of dollars (China, Japan, etc.) decide to bail out. The thing that Social Security avoids is RISK. And the way Bush has manipulated the calculations...his rosy, pie-in-the-sky projections, will never happen. Have her read the column by Molly Ivins, call 'No-Brainer'.

[stevedeshazer]

4. No taxes, no services

She probably believes in police and fire protection. Do her kids go to public school? The something-for-nothing mentality of these folks drives me up the wall.

As for Social Security, and why the Bush plan won't work as (some) Republicans claim, here's a link to the best explanation I've yet seen:
http://www.latimes.com/news/opinion/sunday/la-oe-kinsley19-proof,0,7948674.story

[holiday]

That is EXACTLY what bothers me about most republicans

viewpoint on taxes.. Something for nothing. Or it's all about how they get to keep more money in their pocket. I'm one to have never minded my tax dollars used to help children get medicine or health care.. to make sure that the poor are fed. They want to keep more of their tax money? How about being upset about tax money going into the hands of Halliburton.. or for dubya to have a yacht!

[BlueEyedSon]

7. That's great, thx! nt

[BlueEyedSon]

5. Young people don't remember the Depression

The don't understand true and pervasive poverty.

As a result they can't see the need for a safety net.

[meti57b]

6. republicans do not want to have *ANY* "social" programs....

They are trying to bankrupt the federal government so that only the military and a skeleton-type federal government can be funded.

[Virginian]

8. How much will she contribute to charity?

I know it isn't as fashionable as tsunami relief, but will she help feed and provide medicine for the people who's retirement plan was ruined by Ken Lay? Will she be their safety net?

Will she pay to feed and shelter 90 year olds who have outlived their retirement savings?

Will she support the children whose parents died in a car accident and not in a September 11 tragedy?

Will she pay the doctor bills for the handicapped young man who bags her groceries for minimum wage?

Or will she contribute to some scam artist who makes a good story sound true?

Where and how much will she cheerfully donate?

Added on edit:
Social Security is an insurance plan, not an investment plan. We have 401(k), 403(b), IRA and other plans for investments.

[qwghlmian]

9. When you die, the children, in fact,

will get the money in your private account, not sure why you would argue otherwise.

http://www.washingtonpost.com/ac2/wp-dyn/A61708-2005Feb3?language=printer

"It is the individual's account, and the government cannot touch it."

"If I die, it belongs to my estate. If I divorce, it's a marital asset. And it's protected from political risk. Government can't take it away."

Don't see how much clearer it can be stated.

[papau]

10. Not quite true - if you die after retirement they get nothing unless

there is still something in the account after the "claw back tax" of all contributions plus 3% interest on that loan per year compounded annually.

(earn 4.7% net after 1% investment fee for an 80% "tax" reduction to the account)

of course if the markets go up that much on average then the 1.9% assumption in the SS in crisis projections no longer make sense - GDP must have grown a great deal more to justify the great return.

And if GDP does grow that much - well - there just is never a crisis - despite the GOP scare words of 2 workers per benefit getter.

As to divorce, the rules have not been laid out - but their is no plan as yet to split the account - so you's most likely be left with a hope that spouse died before retirement so you's get your split then, or that the excess funds in the account after the claw back tax - if any - result in his pulling them out so you can take your piece, or in your getting a Court order for a piece of the extra pension.

MOST LIKELY IS THE SPOUSE GETS NOTHING. In current divorces I do not recall the Soc Sec annuity being an item that was split up. But a case can be made for a marital asset that can not be claimed until retirement of the spouse.

BUT THE BEST PART IS THE KIDS INHERITING - you give up todays Soc Sec survivor benefits worth hundreds of thousands of dollars so as to have a private account that is worth a few thousand

I love con jobs!

:-)

[qwghlmian]

12. From the same article I cited above:

"The Washington Post incorrectly reported Thursday that the balance of a worker's personal account would be reduced by the worker's total annual contributions plus 3 percent interest. In fact, the balance in the account would belong to the worker upon retirement, White House officials said."

I think that is where your incorrect "claw back tax" information is coming from.

[papau]

13. There being no "plan" we are looking at option 2 from the Bush commission

- with claw back

and we are looking at the administrations release of numbers that include claw back - We do not have numbers that reflect cost of no claw back - or at least did not have them this morning.

we are looking at the WH running scared and telling the Post that the plan they will release by Xmas will not have claw back - but just do not ask about numbers or description about such a plan until Xmas.

The latest - last 12 hour - Whitehouse explanation is that you can LOOK AT THE NUMBERS AS IF THE RETIREE OWNED THE ACCOUNT BUT GOT AN AVERAGE GUARANTEED SOC SEC RETiREMENT BENEFIT OF 7% OF FINAL SALARY - and HAD THE OPTION TO SURRENDER THAT ACCOUNT FOR A LARGER ANNUITY -ALTHOUGH THE WH SPOKESPERSON SAID THEY MAY WANT TO REQUIRE THAT PART OF THE ACCOUNT IS SURRENDERRED FOR AN ANNUITY.

The WH is winging this - as it goes along it changes.

The numbers reflect the claw back (the Cheney numbers of 800 billion over 10 years and few trillion over 20). Those numbers become a few trillion over 10 years and perhaps 12 trillion over 30 if the accounts have no claw back.

Good Grief a fully funded defined benefit plan (in non-gov bond assets) with a minimal annual payroll tax only requires 12 to 15 trillion today to cover all future liabilities. Soc Sec is not pre-funded now - but it would be cheaper to pre-fund the current system than it will be to fund this Bush idea.

[papau]

15. The revised article doesn't revise a great deal-there's still the pay back

Specifically, workers who opt for the accounts would lose a proportionate share of their guaranteed payment from Social Security, plus interest equal to the amount that money would have earned if the government had invested it in Treasury bonds. They would recoup those lost benefits through their accounts if their investments realized a return equal to or greater than the 3 percent earned by Treasury bonds currently held by the Social Security system.

The Washington Post incorrectly reported Thursday that the balance of a worker's personal account would be reduced by the worker's total annual contributions plus 3 percent interest. In fact, the balance in the account would belong to the worker upon retirement, White House officials said.<snip>

As details about the proposal emerged yesterday, the White House and opponents began sharpening their arguments for and against personal accounts. Opponents argued that reductions to guaranteed benefits that would accompany the accounts would render them all but pointless. Whether those reductions come out of retirees' monthly Social Security checks or out of their personal accounts "is a distinction without a difference," said Gene B. Sperling, a National Economic Council director in the Clinton White House. <snip>

SO A CLAW BACK TAX IS NOT A TAX IF IT IS YOUR CHOICE TO ACCEPT A DRASTIC CUT IN BENEFITS - BUT IN THE END THE ACCOUNTS $221,552 in today's dollars IN THE EXAMPLE BECOMES $69,562 - ASSUMING HE WAS LUCKY ENOUGH TO MAKE THE 4.8% NET RETURN. INDEED IF LESS THAN CONTRIBS PLUS 3% COMPOUNDED IS IN ACCOUNT - YOU NEVER CAN GET BACK TO SOC SEC BENEFIT BENEFIT LEVEL WITHOUT ACCOUNT.

AND THAT IS BEFORE THE ACTUAL SOC SEC BENEFIT CUTS ARE ANNOUNCED AT XMAS - THE ABOVE WAS BASED ON CURRENT SS BENEFITS.

<snip>It is still not clear how Bush's retooled system would work in total. The White House this week has chosen to discuss only a part of it, the private accounts. But those accounts will not close the projected $3.7 trillion gap between Social Security benefits promised over the next 75 years and taxes expected to be collected. That gap would have to be closed through benefit cuts that have yet to be detailed.<snip>
In effect, said Democratic economist Peter R. Orszag of the Brookings Institution, the system works like a loan, in which the government grants workers four percentage points of their payroll tax to invest in stocks and bonds. The loan would have to be paid back with interest out of workers' monthly Social Security checks.
<snip>

I DID LIKE "by leaving the balance of the account untouched, the White House would impart a sense of ownership in the economy, said Stephen Moore, a conservative Bush supporter".

AND "This is like borrowing on a credit card to invest in the stock market," said Jason Furman, a former Clinton White House economist.

[qwghlmian]

16. Let's cut through the bull

it is simple stuff, that is unnecessarily obfuscated by people with agendas. This is how I understand this is supposed to work. Correct me if I am wrong.

1. Since you pay less into "old" Social Security under the plan, your "old" Social Security benefits after you retire are proportionally reduced. That is obvious, and does not need to be presented in such a breathless manner. What exactly did you expect would happen? You pay less into it but get the same benefits?

2. The part that you are not paying into the "old" Social Security scheme goes into your own account. You have a choice (limited) what to invest it in.

3. It is assumed that the stuff that Social Security trust fund invests in - Treasury securities - earns 3%/year. Thus, naturally, if in your own account you manage to earn net 3%/year, you will come out even with the old system. If you manage to do more, you will come out with more. If you do less than 3%, you will come out with less. If you wanted to, I am sure one of the options that will be allowed will be to put it all into Treasury securities. If you do this, it is the same as the old scheme - except it is your money under your name.

4. After you retire it gets murky. Just like SS you can't just get a lump sum, so they are talking about purchasing annuities with some portion of the money etc.

That's it. Please explain where I understood it incorrectly. And if this is it, please show me where there is some kind of "clawback" tax.

[Village Idiot]

11. My TAKE - it is a DISTRACTION -

There is NO crisis - the CBO says the crisis point will not occur until 2053, and even then they will STILL be able to pay out 81% of what is owed to retiring Americans.

Look at what else is happening...the run up to War in Iran and back-story cover-your-ass games of the ReThuglican Party continues!!!

And this BUDGET!!!! Whoo-hoo...SOMETHING sure smells funny 'round here!!!

[holiday]

14. this is what it said in the article.........

By the White House's own account, people who opt for personal accounts would
first have to agree to deep benefit cuts in the guaranteed portion of SS.
Then at retirement age they would be required to purchase an annuity --
monthly benefits to be paid out over their remaining years, not a lump sum
to do as they wish. If a retiree dies at say age 68, the rest of the annuity
would be lost. The monthly benefit dies with the person.