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Highlighted
Advisor

I agree with Obama on SSI

that privatization would kill the program.   Worse than that it would end our government.

 

Why?  If people could put their SSI tax money into their own account, FICA going to the government would drop to near zero instantly, because anyone still in the working world knows they're not going to see anything (of value) out of SSI.  Without the income stream the government would have to come up with new funding to support those already on SS.  They've already spent every nickle they've ever collect toward the program.   The new funding necessary is unattainable, the government would have to massively modify the program instantly or it would be bankrupt.

 

End result will eventually be the same, privatization brings it about quicker.

11 Replies
Highlighted
Senior Advisor

Re: I agree with Obama on SSI

Sam, it took 70 years for SS to get into the shape it is in. It can't be reformed over night but we need to slowly change the program. Privatization is just one part. We need to allow the young the CHOICE of privatizing a portion of their SS. We need to raise retirement age and index it to life expectancy. We will also have to means test a portion of it also. I know that will be a hard sell but there are simply no other choices. Eventually , over say a 70 year period, it needs to be eliminated. Dead beat seniors need to be treated like the rest of the dead beats. Blew every dime you had when you were working, then we give you enough to survive but that is it. The vast majority of Americans can and will take care of themselves. Time to let people keep more of their own money, they better than the government, will help those in need. All the current system does is guarantee you a retirement in poverty and a Democratic your vote at election time.

Highlighted
Veteran Advisor

Re: I agree with Obama on SSI

It must be the alignment of the planets or something funky, as I find myself agreeing with some of what you say.

 

As in "some form of means testing" and total dead beat srs. aren't going to be saved by S.S. and we are going to have a bunch of them where it's all they've got and they ain't gonna get much, with or without reforms.

 

I'd be totally in favor of Congress looking hard at S.S, reform and seriously going out to the public and find out what would fly and what would not. Sam's right that it's doomed one way ot the other...or the other....or the other. The worker to recipient demographics that we'll have by the time my grandkids hit the workforce in 15 years or so will find the surviving boomers at 75-90 yrs old......and there are a ****load of us. (But then the Senate would have to pass it and according to Sam the Senate doesn't represent the proper interests).

 

Lift the limit on income that's subject to FICA first for a while as we attempt to recover and maybe it all gets easier.

 

 

And on another, but related note, this could all be moot if we hit a tipping point where "walk away" becomes first necessary for many and then conveniently logical for many, many more. In that event we'd end up with an entirely different system rising out of the ash heap.

 

http://www.webofdebt.com/articles/homeowners.php

Highlighted
Senior Contributor

Re: I agree with Obama on SSI

Sending more money to Washington is not the answer. They have proved already they are not capable of spending it wisely. Lifting the limit on income would be another disaster. I agree with 3020.

Highlighted
Advisor

Re: I agree with Obama on SSI

Well, 2 replies.  The one that will happen and the what should happen.

 

a) Its a sacred cow, nothing will happen and the country will implode under the weight of SS and medicare.

 

b)  We need to eliminate the idea that SS even exists.  It in fact does not.  It is an entitlement create to make people think they were part of some retirement system, its real goal was to increase revenue to the government.   A means tested retirement assistence plan could be implemented funded from general revenue.  The truth is that FICA goes into the general fund and we should stop this cheraide that there is some trust fund.   The government wants to take your estate when you die anyhow, use it then go on assistance if need be.

 

Maybe I should add an answer for those who don't like the truth. Ok, just means test SS, everthing is fine, SS will be there when you need it.  It's like an insurance annuity were you're benevolent enough to let others have your benefit.  

 

I wouldn't lift the retirement age, hell there are no jobs for the young as it is.

Highlighted
Veteran Advisor

Re: I agree with Obama on SSI

The Bush SSI proposal preloaded the fund by borrowing a few $trillion with bonds.

Since in 2005 everybody still "knew" that stocks outperform bonds, that was supposed to be a great deal.

Of course now that bonds have outyielded stocks by a sizable amount over a period of a dozen years that doesn't look like it would have been such a great idea.

  Basically the mother of all carry trades. And it actually might have worked for a while as the $trillions were being crammed into equities although apparently little shame about calling that a free market. In the end you would have had even greater distortions.

On the other hand in the near term you might have had another successive republican presidentcy and gotten another supreme or two locked in.

However I don't recall a lot of kicking from the right side of the aisle over borrowing trillions. Suppose that was because anything is worth it if you can finally get rid of that hated program.

But hey, it was about an ownership society and personal responsiblity. h

 

 

 

 

Highlighted
Veteran Advisor

Re: I agree with Obama on SSI

Hi Bruce,

 

In GWBs defense, when his SS initiative quickly went thud, he said, "OK, let's talk about what we can accept" and that quickly went thud too.

 

It is the toughest issue I know of to get anyone to talk about reasonably although recently they're all becoming that way.

 

Reforming medicare isn't that hard if it is part of comprehesive health reform, reforming SS isn't that hard with a few tweeks. OK. it is sort of hard now but would have been easy in 1993 in relative terms.

 

Unfortunately that is a lot like telling a bunch of orthodox jews and muslims that this starving problem isn't hard - just eat these nice pork chops.

 

Also, I'm personally not feeling real hopey changey about the government that is going to rise out of the ash heap.

 

best, h

 

 

 

 

Highlighted
Veteran Advisor

CNBC interview with Kyle Bass

Not exactly related to this discussion but worth a listen. A bit of hoopla before they get to it but, hey, it's CNBC.

 

http://www.expectedreturnsblog.com/2010/08/great-interview-kyle-bass-on-sovereign.html

Highlighted
Senior Advisor

Re: I agree with Obama on SSI

Here I thought that the flat tax was a favorite idea of conservatives. Where the same tax rate is applicable to all.

 

I don't understand the concept that people that make more are freed up from paying a tax simply because they were fortunate enough to exceed an arbitrary limit. Do we do that with other taxes. Sir, you have bought 5000 gallon of gasoline. You need nit pay gas tax anymore this year. Same with sales tax. You have paid sales tax on $100k. You need not pay sales tax again until January first. What kind of mindset excludes some income from SS tax and not others?

 

What s the logic behind that other than Higher income folks don't want to pay their share?

 

Think not? When you and I pay as much SS tax as multimillion dollar incomes, it hard to see the justice in that.

Highlighted
Senior Advisor

Re: I agree with Obama on SSI

Then do you support the multi millionaire drawing according to how much he paid in? Should his check be 10 time that of a widow?