Eric,

The tax cuts are unrelated to SS. SS is funded by FICA not income tax. Your step one and step two are moot points because your premise is wrong.

Yes, the two are unrelated. That's the point of "starve the beast" -- it's bait and switch. Drain the money out of government so that you can then cut popular government programs.

The point is that the two are unrelated, in fact.

"So before anybody jerks around with Social Security, often referred to as the most successful program ever instituted by the United States government"

If that's not the most damning indictment of the federal government I've ever heard, I'll paint myself pink and vote for the greens in the next election.

Speaking of things which are unrelated, what people seem not to be grasping in the Social Security debate is that bailing out the current system is utterly unrelated to switching people over to a fair system where they can invest their money in a government sponsored alternative program. The costs people keep claiming go with this reform are all costs for the bailout - the actual establishment of an alternative system would cost little or nothing.

Dave

Dave sez..
*Speaking of things which are unrelated, what people seem not to be grasping in the Social Security debate is that bailing out the current system is utterly unrelated to switching people over to a fair system where they can invest their money in a government sponsored alternative program. The costs people keep claiming go with this reform are all costs for the bailout - the actual establishment of an alternative system would cost little or nothing.*

ok..correct me if i am wrong here..but the money to put into the privatized accounts, 4% of the tax, would be TAKEN FROM the money that IS SUPPOSED to go into the Trust fund..

so how can the two NOT be ralated..even if we forget the HUGE amount of deficit run up just to start this puppy...we are STILL draining 4% per annum out of the black ink column..and thus STARVING the Fund that PAYS out to the actual recipients

seems like they are related to me..

now...it sounds to me like this "privitization" plan has some interesting points in it's favor..as an ADDITION..which it is in the Federal Workers program it is modeled after...a supplement, NOT a replacement to Social Security....but the reality of it is that it seems like one fucking HUGE windfall for the brokers that will be handling these funds and skimming their commisions from the single larges market ever seen

so...how does it help balance out the shortfall in Social Security?

it doesn't

what is the Presidents plan to make up both the current shortfall, and make up for stripping out 4% of the calculated income?

he doesn't have one

and who gets the benefit from this pet project?

money managers..

kiddies..get yer own 401k...save and handle yer own investments...vote for folks that will work out REAL solutions for social security...ya know..for those that will receive it NOT for profiteers looking to suckle the public tit some more..

now..why doesn't the Shrub talk about the more immediate federal program in fiscal danger..meaning Medicare/Medicaid?

good Question...don't hold yer breath waiting for the answer...ya could get brin damage and be kep alive for years...

but we have no fucking clue who would pay for it after your loved ones failed to be able to file bankruptcy...

aaAAAaaARrrrRRRrrRRgggGGGggGGGghHHh!!!!

/aneurysm

Excelsior!

>>ok..correct me if i am wrong here..but the money to put into the privatized accounts, 4% of the tax, would be TAKEN FROM the money that IS SUPPOSED to go into the Trust fund..<<

Yes, but those same people who are privatizing are giving up their entire claim on benefits from the system, so while the system loses less than half of what they pay in, it keeps ALL of what they would have been paid out. So the trust fund is ahead bya large margin.

>>so how can the two NOT be ralated..even if we forget the HUGE amount of deficit run up just to start this puppy...we are STILL draining 4% per annum out of the black ink column..and thus STARVING the Fund that PAYS out to the actual recipients<<

The relationship which isn't there is the supposed cause and effect relationship between letting people out of the system and the system going bankrupt. There's no connection there, because the people who leave the system leave behind both the money they've already paid and a portion of their future earnings as well.

Moving some people into a private system where they give up benefits to get part of their money back takes no money out of the trust fund and only adds money to it. The peoples money is still involved, but makign this change in no way relates to the increasing insolvency of the system. That's entirely self-contained. Partial privatization actually helps make the system MORE solvent.

Dave

Dave sez..
*Yes, but those same people who are privatizing are giving up their entire claim on benefits from the system,*
not the way i have read and heard it Dave..they would be receiving between 75 and 80% of their benefits in addition to what they get from the new privatized accounts..could be mistaken here..since the actual Plan doesn't seem to be concrete yet...

as for the rest..that ain't how a Ponzi scheme works..you need new Marks coming in to pay off the older marks..the newbies never see their own money, they get it from fresh marks coming in after the originals pass on...and so on..

so it seems to me, that if you remove the fresh blood, you will starve off the Flow to the old tier folks...as in, need to reduce and eventually stop paying out..or find another source of Revenue to feed it, cuz the Trust fund is a big IOU...

so we can speak Intelligently on this once there actually IS a fucking Plan on the table and NOT just a few words...

interesting that millions of txpayer dollars are being spent in the barnstorming campaign th eShrub is on..what 60 cities playing to loyalty oath swearing crowds...but there still is NO actual Plan "on the table"

typical..

Excelsior!

>>not the way i have read and heard it Dave..they would be receiving between 75 and 80% of their benefits in addition to what they get from the new privatized accounts..could be mistaken here..since the actual Plan doesn't seem to be concrete yet...<<

That doesn't sound like any plan I've heard about. All I've heard was that they'd have to give up all benefits and keep paying into the system to get a portion of their money in a private account. I agree that it would be nice to have a concrete plan on the table.

>>as for the rest..that ain't how a Ponzi scheme works..you need new Marks coming in to pay off the older marks..the newbies never see their own money, they get it from fresh marks coming in after the originals pass on...and so on..<<

The Ponzi Scheme still works if people have to pay part of their money in forever and get nothing back in return.

Dave

so you believe the Proposal is that they divert 1/3 of their FICA to these privitization plans and the rest goes to SS, but they NEVER get SS...ONLY the Plan?

boy..that sounds even worse...then BOTH sides..the old folks, AND the kids get royally screwed with no lube in a prison fashion..

no wonder nobody wants to sign on for this one..

but still..the devil is in the details, and since the Shrub has not shown the balls to actually write down any details or lay his "plan" on the "table"..the whole argument is moot now ain't it

when ya can show me the actual figures..we will talk..until then..no thanks..i learned the lesson of Jim Jones and Guyana..i don't want any of Karl Rove's fucking kool-aid

Excelsior!

>>so you believe the Proposal is that they divert 1/3 of their FICA to these privitization plans and the rest goes to SS, but they NEVER get SS...ONLY the Plan?<<

That's the last I heard.

>>boy..that sounds even worse...then BOTH sides..the old folks, AND the kids get royally screwed with no lube in a prison fashion..<<

The kids don't actually get screwed. If the stock market returns average returns over their lifetime they probably do slightly better than the old system. If it does any better than average they do better.

Dave

oh Dave...

Dave sez..
*The kids don't actually get screwed. If the stock market returns average returns over their lifetime they probably do slightly better than the old system. If it does any better than average they do better.*

so now you advocate gambling for Retirement plans..??

please read the original Post and then the statement from yours i just Quoted

notice the "if's" ?

can you say "Great Depression"?

remember it came just after a huge period of rampant , unregulated speculation by the Robber Barons?

and now we come full ciorcle to my George Baily Story from a little while ago..

you remember how Potter went from rich to obscenely wealthy, bought out a bank and everything else that wasn't nailed down?

happened when everything crashed...ruined 999 out of 1000...but folks like Potter made a mint..

>looks up at the starve the beast scenario<

do i hafta spell it out ?

and that's the Fear of it all...that's why a GUARANTEED system was originally put in place

sorry..play the shell game all you want..i saw ya palm the pea

i ain't laying my sawbuck down, thanx much

Excelsior!

Gonzo, any 30 year period including the Great Depression averages 6.5% return or more from the stock market. We've been over this before. So long as you're in an indexed fund and not just a couple of selected stocks there's virtually no risk.

That said, if the government is going to take our money and provide for our retirement, why shouldn't we expect it to do a halfway decent job of it instead of basically providing zero return on our investment? We wouldn't be discussing changes in the system if the government had managed it decently in the first place. But the truth is that the horrible rate of return and the way they've abused the 'trust fund' really disqualify them as a responsible manager of the money.

All the government can promise is that if you put money into social security they'll rob your grand children to make sure you get something back - maybe even less than you put in. We deserve better service than that.

Dave

Dave sez..
*Gonzo, any 30 year period including the Great Depression averages 6.5% return or more from the stock market.*
i agree...when viewed as an average this is correct..

Dave sez..
*So long as you're in an indexed fund and not just a couple of selected stocks there's virtually no risk.*

no RISK???

here we disagree...ya see, yer trying to present this "average" as a single rising line on a graph...the Reality is more like a sinewave..peaks and valleys representing the ups an ddown of business cycles.. bubbles and crashes..

sooOOooo...what happens if you start on a bubble and retire on a crash?

that is one of my worries here...the other is the articficial inflation of the market's prices due to the huge influx of cash driving up share prices for no good reason...that's just asking for trouble

now we will ask another question...are the monies going to be invested in only American companies making goods in this country and hiring american workers while operating in an ethical manner?

in yer Dreams buddy boy....we can easily guess the answer to that...

so the beneficiaries of this influx of cash are NOT "loyal" to those who have invested and the money is not neccesarily working for the good of the Citizens that invested it except in that they are literally betting that it will be worth more than when they started after indexing for inflation..

not happy sounding to me..and DEFINATELY NOT the "guaranteed" retirement incom the SS program is supposed to be..

now..as for it being handled poorly and us deserving a better deal etc...that i can easily agree with...can the whole thing be improved...of course!

do i think the non-existant plan put forward by the Shrub will do it and do i Trust in him to figure out the Answer..ummm...nope

when he shows me he can balance the countries checkbook...then i will listen to financial planning by him and his cronies...

just to show i am not entirely all about the negativity..here's a Thought

we can get rid of HUD, Fannie Mae, Freddy Mac AND the current system..

the American Social Security Mortgage Bank!

bvear with me here...take all the assets etc from ALL the agencies i have mentioned...add to it the money the Federal Government has "borrowed" from the Trust fund...this is the total "capital" of the Bank

now..the Bank's ONLY business is to take in the FICA deposits, collect it's currently outstanding Debts and interest (pegged to the Fed's prime rate)...an duse said assets to pay out SS benefits and MAKE NEW MORTGAGES to ONLY american citizens for residential real estate ( primary homes only plz..no vacations houses or business property..leave that to commercial banks)

think about it fo ra second..this new Bank makes it's money by creating wealth in lending americans money for a home..good jobs building /maintaining/furnishing said homes...it collects the FICA as well as the old mortgages held by HUD, Fannie Mae and Freddy Mac...in addition to the monies owed to the Trust fund by the Federal Government AT THE SAME RATE OF INTEREST AS HOME MORTGAGES!!!

a win-win-win...it also has the benefits of shrinking the size of government by removing those pesky agencies mentioned, and creates a new, efficient , sgtructure..operated at a sane profit..that provides good services to the Public..and the money it makes goes to helping fund our homes as well as our retirements!!

damn ...i'm good, eh?

just a thought here...yoru mileage may vary

Excelsior!

Good discussion, fellas. I'd hop in but I'm honestly sick to death of talking about this topic!

I'm kind of sick of and burned out on politics in general at the moment. Movies and music and television are the things that really interest me at the moment. I wonder if anyone else feels the same way. I was going pretty strong on politics until about a month ago. Now I feel like hitting the politcal snooze button until around October of next year.

that's what they count on Eric B

i am kinda with you..disgusted and frustrated..

but i'm a stubborn McWoodshoe
(half irish, half dutch..to Romantic to know any better, and too stubborn to care)

so i just ain't gonna let it go..

otherwise we get done prison style without even getting dinner first, much less a reach around..

not me man...

Excelsior!

>>sooOOooo...what happens if you start on a bubble and retire on a crash?<<

The funds are diversified into not just stocks, but also bonds and other instruments which are either resistent to crashes or react to some degree in inverse of the stock market. A balanced and extremely diverese fund like this will be relatively unaffected by a crash, and remember, the crash is only relative to all the growth that went on before the crash, including dividends and interest, so if you're up say a total of 400% after 30 years and a crash knocks you down by 50% - which would be as bad as any crash we've had - you're still up 200%, or an average of just under 7% per year.

>>that is one of my worries here...the other is the articficial inflation of the market's prices due to the huge influx of cash driving up share prices for no good reason...that's just asking for trouble<<

The term of these investments would be so long and the conversion would be sufficiently gradual that I don't see how that's going to be much of a problem.

>>now we will ask another question...are the monies going to be invested in only American companies making goods in this country and hiring american workers while operating in an ethical manner?<<

How is that relevant? A diverse indexed fun will hold every sort of investment imaginable and the nature of the individual companies is almost meaningless.

>>so the beneficiaries of this influx of cash are NOT "loyal" to those who have invested and the money is not neccesarily working for the good of the Citizens that invested it except in that they are literally betting that it will be worth more than when they started after indexing for inflation..<<

This means nothing to me. Companies are loyal to their own success. Stockholders get carried along for th eride.

>>not happy sounding to me..and DEFINATELY NOT the "guaranteed" retirement incom the SS program is supposed to be..<<

Well, there's no 'happiness' or emotion involved in this sort of investment. It's a purely mechanical process, really.

>>do i think the non-existant plan put forward by the Shrub will do it and do i Trust in him to figure out the Answer..ummm...nope<<

Well there I'm with you. A non-existant plan will do nothing, and the proposed plans I've seen are inadequate and unfair.

>>we can get rid of HUD, Fannie Mae, Freddy Mac AND the current system..

the American Social Security Mortgage Bank!

bvear with me here...take all the assets etc from ALL the agencies i have mentioned...add to it the money the Federal Government has "borrowed" from the Trust fund...this is the total "capital" of the Bank

now..the Bank's ONLY business is to take in the FICA deposits, collect it's currently outstanding Debts and interest (pegged to the Fed's prime rate)...an duse said assets to pay out SS benefits and MAKE NEW MORTGAGES to ONLY american citizens for residential real estate ( primary homes only plz..no vacations houses or business property..leave that to commercial banks)<<

So you basically want to take the social security funds and invest them in real estate, which is far riskier than a diverse stock fund, because it's entirely at the whim of the market. Plus you want to actually pay off the social security debt to do it, incurring an immediate cost of several trillion dollars just to finance your plan?

>>think about it fo ra second..this new Bank makes it's money by creating wealth in lending americans money for a home..good jobs building /maintaining/furnishing said homes...it collects the FICA as well as the old mortgages held by HUD, Fannie Mae and Freddy Mac...in addition to the monies owed to the Trust fund by the Federal Government AT THE SAME RATE OF INTEREST AS HOME MORTGAGES!!!<<

And woohoo, when the American Public all default on their mortgages this plan might actually be risky enough to actually bankrupt the entire federal government too.

>>damn ...i'm good, eh?<<

Good and nuts.

Dave

yep..i'm nuts..never said anythign different...but i think we have some conflict here..

Dave sez..
*The term of these investments would be so long and the conversion would be sufficiently gradual that I don't see how that's going to be much of a problem.*
i guess my concern is the influx at the very beginning of the theoretical program...remember that several trillion dollar conversion estimate inherent in the cost of setting this up?...also add in that it is not the Fund not the Fed that makes the cash on these transactions , but Wall Street firms..

hmMMmmm wonder who cooked up this idea then?

a few in a row to be covered in a single comment..

Dave sez..
*How is that relevant? A diverse indexed fun will hold every sort of investment imaginable and the nature of the individual companies is almost meaningless.*

and..
*This means nothing to me. Companies are loyal to their own success. Stockholders get carried along for th eride.*

from the sheer fiscal standpoint of abstract numbers..i can understand where yer coming from here Dave...my Point is that the Ends do NOT justify the means..do i want to finance my Retirement by investing in a corporation that uses child labor in south east asia to make sneakers?...ummm...nope..

i would gladly sign on to something that went for the whole "buy American" thus using the cash influx to expand the american economy, NOT finance golden parachutes nor exploit workers or wreck the environment..

do i thik this would be the case eVERY time...nope...but once is too much for me...i do NOT want any fucking "blood money" ...even if i do get a good rate of return or compound interest..

i'm silly like that

Dave sez..
*So you basically want to take the social security funds and invest them in real estate, which is far riskier than a diverse stock fund, because it's entirely at the whim of the market.*

first..check the figures for real property versus the market for the same period of time...depending on th etime period studied, and the location involved..it's pretty close..some figures show a decided advantage to property....

but i am not talking about investment in the property , per se..i am talking about Investing in the American Dream ..and the Public itself..by helping them to finance their homes...and using american dollars to leverage american property...you know..an "ownership society" kind of thing...

Dave sez..
*Plus you want to actually pay off the social security debt to do it, incurring an immediate cost of several trillion dollars just to finance your plan?*

umm..Dave..you misunderstand..what i said was that this new Bank would take on the Government's IOU that currently resides in the Trust fund..and charge the government the same interest rate as it does for it's mortgages...NO trillions of upfront costs...that's the pretty part..it would actually help the fund..and hopefully force the government into paying it's bills and balancing the budget!!

Dave sez..
*And woohoo, when the American Public all default on their mortgages this plan might actually be risky enough to actually bankrupt the entire federal government too.*

more fallacious distraction Dave?

the odds of the american public ALL defaulting is more or less than a stock market collapse?

and even if it did..you still have the FICA revenue stream as well as the Fed debt payments to help work it all out, eh?

i never said this Idea was perfect...but it is better than you give it credit for..IMO...any accredited Economists out there wanna look it over and make suggestions?

soOOOOoOOOOooo..i may be "good and nuts" Dave...but what i suggested saves those trillions of dollars in start up costs instead of adding them as red ink , which even the Administration admits the "privitization" plan would incur..

remember i said i would get back to those trillions..

so i may be nuts...but at least i am trying to solve the problem, rather than kissing the Shrubs ass over a "plan" that does nothing but COST money and is dependant on the vagries of the market even more so than mine...a Corporation goes bankrupt it is gone...land is always there, eh?

what's YOUR proposal then?

Excelsior!

>> guess my concern is the influx at the very beginning of the theoretical program...remember that several trillion dollar conversion estimate inherent in the cost of setting this up?...also add in that it is not the Fund not the Fed that makes the cash on these transactions , but Wall Street firms..<<

JESUS CHRIST NO! There IS NO CONVERSION COST (well, small administrative costs). How often do I have to explain this. The several trillions are to stabilize the existing system and we're paying them eventually no matter what. The switch to a different system is self-funding.

Dave

Dave..yer gonna hafta provide actual numbers to back up that claim..my poor kitchen math skills don't bear ya out

and yer "small administrative costs"" BULLSHIT...let's say..what half a per cent fer the brokers?

how much does that come out as per year with billions involved?

sorry..that money shoudl be in the system..NOT in some wall street firm(s) that lobby'd the best..

so i do believe that YOU believe all this...but until the Numbers are on the "table" for ANYONE to add up...

then it is all flotsam and jetsam and an excercise in more dollars spent on Propaganda without anything to back it up

spend the money on ACTUALLY PUTTING UP A PROPOSAL...then i will take it seriously

otherwise..fun as it is..you and i are merely engaging in some recreational sophisty...

Excelsior!

>>Dave..yer gonna hafta provide actual numbers to back up that claim..my poor kitchen math skills don't bear ya out<<

What does math have to do with it? It's not about math, it's about identifying what is actually being paid for. The sucking hole of missing money is in the current system, not in some hypothetical alternative system that hasn't even been set up yet. And all plans for that hypothetical system have it being paid for with future money taken out of people pay, so that money isn't part of the SS trust fund yet, so it's not part of the problem.

>>and yer "small administrative costs"" BULLSHIT...let's say..what half a per cent fer the brokers?<<

Actually, I believe the proposals all indicate that these have to be 'no-load' funds where there are no brokers fees.

>>spend the money on ACTUALLY PUTTING UP A PROPOSAL...then i will take it seriously<<

The problem is that because of all the carping, when they do put up a proposal it's going to be a sucky half-measure that does no one any real good.

Dave

as for the math..i meant to show that this "proposal" that we do have so far would be at no cost...that's all...

Dave sez..
*Actually, I believe the proposals all indicate that these have to be 'no-load' funds where there are no brokers fees.*

so no one is going to get paid to handl these funds and brokerage duties?

if you expect me to believe there is such Charity on Wall street, yer gonna hafta produce both Santa and the Easter bunner for sunday dinner...

{8^)

Dave sez...
*The problem is that because of all the carping, when they do put up a proposal it's going to be a sucky half-measure that does no one any real good.*

i agree with the outcome..but i believe it will stem from lack of Political Will...not any "carping"

however..essentially we have Agreement here on the actual outcome

thanx fer yer Thoughts..

Excelsior!

>>so no one is going to get paid to handl these funds and brokerage duties?<<

Traditionally even no-load funds have a 1% management fee, but I suspect that could be whittled down given the volume involved here. In addition, there's no reason why the government can't manage a broad index fund specific for SS investors and thereby cut overhead even more, at least in theory. The idea of government management reducing overhead does seem unrealistic though.

Dave

so 1% of a coupla hundred billion a year..

now it all makes perfect sense to me

who gets the no-bid contract on this one?

and i bet ya own stock in the brokerage company, Dave...

{8^P~~~~~~~~~

Excelsior!

If I knew who it was I'd buy stock in it. But it's not the brokerage company that gets the money, it's the management company.

Dave