number of the week: The 49.1%

[flintlock]

Re: number of the week: The 49.1%

I have the pleasure of knowing many octo-genarians through my church. They are really great people. Trouble is that a large percentage of them 50%?? could not work due to severe health issues. COPD, arthritis, cardiacic and neurological issues. In each of our lives there is going to come a time when we can no longer contribute economically. I think many today are deluding themselves that they can work into advanced age. Some can, many will not be able too.

Very true. People are deluding themselves about working untill they die. And why will an employer hire some geezer with health issues when he can hire a 50 year old whipper snapper who still has plenty of experience?
This is not a realistic plan, working to 75 or 80. If you can great. But not every field is condusive to it.

We all complain about the lack of qualified plumbers, mechanics, etc. It cost a fortune to fix your car and half the time they still screw it up. Now tell me how we are going to attract better people to those fields that require some physical exertion when they are going to face poverty for another 20 years when they can no longer perform? Its not realistic and the best will be forced to take a different career path. And we will continue to be left with dregs.

The naturally ocurring labor shortage that is due to happen due to demographics must be allowed to happen so that workers can earn enough to save for retirement. But it wont. Instead corporations will lobby for mass outsourcing and immigration, claiming they cant compete at current wages. The race to the bottom continues.

[flintlock]

Re: number of the week: The 49.1%

You're absolutely correct. The people trying to turn SS from an insurance program into a retirement account never seem to give up or go away. And they appear to be gaining ground. Many people I know claim that the government "raided" SS and that's why there's no money to pay benefits. This is a common belief and is consistent with the idea that SS is a retirement account.

The reason why Grandpa gets his SS as a right, not a government "benefit", is that he paid all his premiums. If my house burns down, is the insurance company being charitable by honoring my insurance policy? Of course not, and neither is the SSA when it merely honors its contract with each citizen who paid his SS premiums and lives to the required age.

As to the SSA investment of surplus premiums into treasury bonds with maturities to match scheduled benefit payouts, what could be more prudent, particularly given the last 12 years of negative real stock returns?

I wretch every time I see this stat about half the households being on the govt payroll. So my dad who was maxing out his contribution to SS and medicare is on the dole now? You can see what they are trying to do here. Equate some career welfare recipient with a life long worker. That we are all already Socialists in fact so we should just realize it and go along with the trend. How do you convince an enemy to surrender without a fight? Convince them they are already surrounded and have no hope of winning.

[flintlock]

Re: number of the week: The 49.1%

What if the insurance company is broke? What if the only way they can pay for your house is to enroll new policyholders against their will? Is this still a valid analogy?

You are an attorney, right? Can I sign a contract pledging your future income, without your consent, to pay back money that someone else is giving to me to use right now? If so please forward me the documents.

I'm not saying that no consideration should be given to people who paid in to SS. However, to pretend this situation is some kind of valid contract is dishonest. I've certainly never consented to this "contract". I've been paying into this since before I could even vote.

Its a tax, pure and simple, But a tax only passed due to the unique insurance like benefit promised. When are we ever allowed to consent to a tax? Blame the politicians, not the working stiff who has done his part. Now medicare, thats a whole other issue. Talk about wealth transfer from one generation to another. My dad has had two knees replaced on it. My kids will be lucky to get a bandaid.

[Polish_Silver]

Re: number of the week: The 49.1%

these same workers are largely funding the retirement of the 1 out of 3 current retirees that largely depend on Social Security for their income:

Some of the increase in government dependent households is just the aging of the population.
But how much? Young people are paying for the exhorbitant health care of the elderly, and there will be no comparable slave labor for them.

The military has been expanding the last 10 years, and military retirements are quite generous. Half my brother's friends get income from the military industrial complex. It is hugely expensive. Not to mention all those CIA, homeland security, farm subsidies, etc. We are spending money on 10 kinds of stupid stuff, then we wonder why we are broke !

Many families are spending extravegantly on luxuries: look at the huge houses, huge cars, crowded parking lots at the shopping mall.

Undoubtedly, many are hard up as well.

Think back to 1950: The median house was about 1/2 the area of today's. Many families had only one car.

[jiimbergin]

Re: number of the week: The 49.1%

eye hear that (and feel it) - and it will only be an option for those that dont actually physically labor for a living
aka: what the social security system was meant to address (was it not?)
vs padding for the mid-uppermid class' pensions and 401k's - but hey!
IF THE ENTITLEMENTS ARE SUPPOSED TO BE THE BIG PROBLEM, why not simply raise the income limits subject to FICA (better yet, eliminate em completely, as least until the SS account 'balances'?)

and leave the rates the same

as one who has to pay the full 15point-whatevah% on ALL my income, it strikes me as more than a wee bit unfair that those above 110k get a free ride from there? (and never mind the fact that congress is exempt and has their own GD gravytrain retirement package! while The Rest of US, can do what?!! eat cake )

but nobody (on both sides of the aisle) even wants to discuss it?

(and we wont even get into the INSANITY known as the "middle class tax cut" that cannibalizes socsec and medicare?? - really - and ya cant make this s__t up??? )

congress does pay into social security and has done so for a long time. Here is one link about that
http://urbanlegends.about.com/library/blcongress.htm

[Polish_Silver]

Re: number of the week: The 49.1%

F THE ENTITLEMENTS ARE SUPPOSED TO BE THE BIG PROBLEM, why not simply raise the income limits subject to FICA (better yet, eliminate em completely, as least until the SS account 'balances'?)

It was the worry that "Programs for the poor are poor programs".
If FICA was hugely progressive, it would lose support among the upper income (voting) class.

The high income people were supposed to pay in more than they got out, and above the limit, they had already paid for themselves and several low income people.

In today's world of growing inequality and financial corruption, it is perfectly reasonable to raise the limit. Still, one should be aware of the distinction between "mandatory savings" and "income redistribution".

I think the government should only guarantee a basic standard of living, regardless of age.
Something like a poor farm. You would only move there if you really needed to. There would still be a need for a gate keeping system. For this to work, there would need to be strong incentive for personal savings, since most people do not think long term.

[goodrich4bk]

Re: number of the week: The 49.1%

What if the insurance company is broke? What if the only way they can pay for your house is to enroll new policyholders against their will? Is this still a valid analogy?

It's not an analogy, it's a description of the program. Premiums (taxes) + investment earnings (treasury proceeds) pay claims. This is insurance. This year's claims will be paid from this year's premiums + the insurance company's investment earnings. Neither the insurance company nor SS rely on only past premiums and investment earnings those premiums to fund payouts. Both use the income from those who make no claims to pay those who do. There is nothing "ponzi" about insurance so long as the insurance fund is actuarially solvent.

By law, SS must be actuarially solvent for 75 years into the future. Presently, SS is solvent for less than that. By taxing higher earnings, means testing for those with very high retirement incomes and extending the retirement age, SS can easily be made solvent for 75 years without a dime's increase in SS taxes. As somebody who is 56, I think that is a fair solution, but I'm willing to listen to other ideas.

I am not willing to listen to employees and owners of financial firms tell me why we should convert SS to private retirement accounts. My aunt, her two aunt's and her mother all lived passed 100. How can anybody possibly fund, with 40 year's of work, a 35 year retirement? And even if I could, what would be the point if I die at 65? All of that sacrifice and scrimping would be for nothing. Do you buy a house and then save the cost of a second house just in case the first one burns down? Of course not. When you sell your home, are you angry that you paid fire insurance premiums all those years and never made a claim? Of course not. When your house burns down and the insurance company is still around to build you a new house, do you view it as charity? Of course not.

SS is insurance against living beyond your ability to support yourself. It is insurance for basic survival needs, nothing more. If you want a better retirement, you need to supplement SS with IRA/401k/private pensions.

As for the "contract" part of your comment, the contract is between each of us and the government/SSA. It is a legal obligation. The Supreme Court has settled that SS rights are vested property rights. We give the government 12.4% of our salary and the government pays us SS when we retire. It's no different than if you buy a 30 year zero coupon treasury bond. You lend the government money that is used this year to pay for the government's obligations this year. The money is "gone forever". It is spent on people other than you. Then, when the bond becomes due in 30 years, entirely different taxpayers must pay taxes to retire that bond. Mon dieu! You will be demanding that taxpayers 30 years from now --- who never received the benefits of your loan --- be forced to pay you with interest. How dare you act like you are entitled to repayment....

[DSpencer]

Re: number of the week: The 49.1%

IF THE ENTITLEMENTS ARE SUPPOSED TO BE THE BIG PROBLEM, why not simply raise the income limits subject to FICA (better yet, eliminate em completely, as least until the SS account 'balances'?)

and leave the rates the same

as one who has to pay the full 15point-whatevah% on ALL my income, it strikes me as more than a wee bit unfair that those above 110k get a free ride from there?
but nobody (on both sides of the aisle) even wants to discuss it?

As one who has to PAY THE MOST into this crooked system it strikes me as a wee bit appalling that you would consider the people doing the most to support it as "getting a free ride".

Getting a free ride implies that I'm going to get more out of the system than I put in. Given the decades of work ahead of me and the direction of the system I don't even expect to ever receive anything, let alone more than what I paid in real terms.

As to your question of why not simply get more money from those who have it in order to give to to those who don't: because this is supposed to be America where people have some sense of personal responsibility and a right to what they earn. You know, the kind of principles that made America into the wealthiest country in the world in a relatively microscopic amount of time?

How's this for a deal: you give the option to people to pay into the system for 2 more years (on ALL our income if you think that's "fair") and then we get to stop forever. In exchange we give up all claims to collect any of the money we paid into the system since birth. Consider it a generous gift to help do our part to solve the problem. Then I won't be getting a "free ride" anymore. Would this satisfy you?

Same goes for Medicare. And if I'm old and sick with no money because of the decision. You have my permission to let me die on the street. I'll take my chances.

[c1ue]

Re: number of the week: The 49.1%

Same goes for Medicare. And if I'm old and sick with no money because of the decision. You have my permission to let me die on the street. I'll take my chances.

Whatever you personally might think, it sure doesn't seem like the rest of the population shares this belief. There's a reason why this is one of the third rails in politics.

[DSpencer]

Re: number of the week: The 49.1%

By law, SS must be actuarially solvent for 75 years into the future. Presently, SS is solvent for less than that. By taxing higher earnings, means testing for those with very high retirement incomes and extending the retirement age, SS can easily be made solvent for 75 years without a dime's increase in SS taxes. As somebody who is 56, I think that is a fair solution, but I'm willing to listen to other ideas.

Yes, by getting more money out of high earners and giving them less you can make it solvent. In other words make it more like a redistribution program. Explain again how taxing more of my earnings in order to get more taxes out of me is done "without a dime's increase in SS taxes"? It's certainly going to increase my taxes...that's the whole point of doing it.

As a way of phasing out the program I could be ok with this. As a permanent solution it is just more of the same thing that already is frustrating. Take from me, give to others. Then have people tell me I'm somehow to blame for any shortcomings.

When you sell your home, are you angry that you paid fire insurance premiums all those years and never made a claim? Of course not. When your house burns down and the insurance company is still around to build you a new house, do you view it as charity? Of course not.

I'd be angry if I was forced to buy volcano insurance living in Ohio and from a company that by it's own admission isn't following the law in regard to its solvency requirements. And even more angry if I had to pay a higher premium because I had a good job.

SS is insurance against living beyond your ability to support yourself. It is insurance for basic survival needs, nothing more. If you want a better retirement, you need to supplement SS with IRA/401k/private pensions.

I completely understand the distinction you are trying to make. But I don't want to buy it. Just like I don't buy rental car coverage because my insurance already covers it.

As for the "contract" part of your comment, the contract is between each of us and the government/SSA. It is a legal obligation. The Supreme Court has settled that SS rights are vested property rights. We give the government 12.4% of our salary and the government pays us SS when we retire. It's no different than if you buy a 30 year zero coupon treasury bond. You lend the government money that is used this year to pay for the government's obligations this year. The money is "gone forever". It is spent on people other than you. Then, when the bond becomes due in 30 years, entirely different taxpayers must pay taxes to retire that bond. Mon dieu! You will be demanding that taxpayers 30 years from now --- who never received the benefits of your loan --- be forced to pay you with interest. How dare you act like you are entitled to repayment....

Despite our differences in opinon, I've always found you to be one of the more reasonable and rational members of the forum. But I have no idea how you can say these things as an attorney.

This contract:

1. Was made before I was born and started affecting me before I was an adult - I lacked the capacity to enter it
2. Was made without my consent - There was no offer and acceptance.
3. Is violating the law according to what you wrote above - Is not legal

How can you consider this a valid contract? It's just another tax. The Supreme Court makes plenty of stupid decisions. Almost everything important it decides is decided by ideology. Also the Supreme Court seems to be viewing it as a retirement fund in that case.

[c1ue]

Re: number of the week: The 49.1%

1. Was made before I was born and started affecting me before I was an adult - I lacked the capacity to enter it
2. Was made without my consent - There was no offer and acceptance.
3. Is violating the law according to what you wrote above - Is not legal

Seriously? You're trying to argue American laws as contracts?

Why aren't you arguing the fact of your citizenship - another contract that you were entered into before you were an adult?

What about all the other laws we are supposed to follow, like the Bill of Rights, the Constitution, criminal law, etc etc. You were also entered into these without your consent.

News flash: consent isn't necessary.

Seems more like you're looking for an excuse to not participate in something you dislike.

[goodrich4bk]

Re: number of the week: The 49.1%

Compliment ---and joke --- accepted!

To be honest, there is not one of your above rants that I haven't shared myself, either quietly in my head or elsewhere. Probably the only difference is that I limit my rants to the zerohedge site.

All joking aside, I'm a much bigger fan of austerity when it comes to Medicare. Medicare is not salvageable under any reasonable set of tweaks. With Medicare, we need a radical overhaul, such as the Oregon Plan. Each year the Medicare people put together a list of all of the care we can afford to pay this year with what the actuaries tell us we'll collect in Medicare taxes. A panel of physicians then "triage" this care and limit Medicare recipients to what the system can afford to pay. Your first bypass? Okay, that's probably doable. Your second? Sorry, not enough money this year because its already been spent on cheaper, preventive care for those who appear to be taking better care of themselves.

A death panel? You betcha! Who the hell ever told you could live as long as medically possible? Medicare is a lottery and ought to be run like one. When this year's money runs out, there are no more winners. So to make sure that the poor bastard who gets the flu after Thanksgiving dinner with his grandchildren doesn't die because the uncontrolled diabetic used up all the money earlier in the year, we limit the care that the uncontrolled diabetics get. What's wrong with that? (BTW, before I get a bunch of hate mail from diabetics, I am one ---Type 1 for 17 years and with no health insurance---and if you want to know how I do it, just ask). Sure, its very rough justice and likely to create some tough choices, but choices are what we're making now ---and they are neither rational nor fair. Instead, we're giving gold service to the first in the door (the oldest and sickest), leaving the last (and, by definition, the youngest and healthiest among us) with the worst care or, god forbid, no care at all). This is not what a society that cares about the next generation chooses to do.

So how do I reconcile these two seemingly opposite views concerning SS and Medicare? Is not one view socialist and the other Darwinian? Yes, but here is my reasoning. In our modern civilization, I believe we support the elderly to prevent overpopulation and, indirectly, make our own lives more comfortable. Without SS or a similar retirement program, most people would breed their IRA into existence, creating many more problems and scarcity for the rest of us. Those who did not would hang on to their jobs with a death grip, preventing the young from entering the workforce. By supporting retirement, we allow the young to become productive, and prevent the creation of more young just for the purpose of supporting their parents.

Medicare does nothing of the sort. It keeps the unproductive consuming. It allocates scarce resources to those who are not likely to survive long anyway. It is the opposite of triage. It merely delays the inevitable at great expense, leaving the next generation with a debt burden that will absolutely require that they form their own death panels long after Sarah Palin is in the ground. We're not going to avoid death panels but, instead, we're just going to shift them to the next generation. That is frankly immoral and cannot be justified under any rational philosophy.

Okay, rant over...

[charliebrown]

Re: number of the week: The 49.1%

The people I am talking about could not even function in an office environment. The stress of getting up early, dressing, driving, working a long day, having frequent doctors appointment, needing extra sick days. even a sitting down job would be very taxing on them. I hang out with them at the coffee shop, evey friday for an hour. And they can barely make that.

[lektrode]

Re: number of the week: The 49.1%

Seriously? You're trying to argue American laws as contracts?

Why aren't you arguing the fact of your citizenship - another contract that you were entered into before you were an adult?

What about all the other laws we are supposed to follow, like the Bill of Rights, the Constitution, criminal law, etc etc. You were also entered into these without your consent.

News flash: consent isn't necessary.

Seems more like you're looking for an excuse to not participate in something you dislike.

+1
being a citizen of The US REQUIRES one (and us) to participate, regardless of whether one 'agrees' with all of the elements of social policy - if one doesnt like it, one can either petition the .gov or LEAVE.
(or bitch about it on forums ;)

[goodrich4bk]

Re: number of the week: The 49.1%

You're correct about the proposed fix with respect to the cap --- increasing the cap would increase your taxes and mine (in most years). But I have a significant IRA and a home free and clear. I've traveled enough to know I was blessed to be born in this country at this time and don't mind paying another 1-3k a year to keep older Americans from eating cat food. But, you are correct that this would be a tax increase for the wealthy who presently pay no Social Security taxes on income over $110k.

As for the contract, I was using the term as John Locke did --- a social contract between the governed and the government. Of course I didn't sign any contract to pay for anything I use that was built before I was born, including libraries, databases, roads, armies or our court system. Yet the day after I passed the bar exam, I was able to sell my services as a lawyer --- a service that would have no value without a civilization, a judicial system, courts, court reporters, libraries and about 1000 years of common law developed from the millions of cases that came before me --- and claim all of that income as all MINE.

Doesn't that strike you as an odd notion? That the world begins with us? That what we "earn" in this entirely artificial and man-made civilization is all ours with no obligation to anybody else?

All I'm saying is that when some retired American stands up to ask that his government's promises to him be honored, I am going to support him regardless of whether I think that promise will be honored when I am retired. If I am concerned about the latter (which I am) it is my job to change the system through democratic means or, failing that, save more for my own retirement. I don't consider default to be an option, at least with respect to obligations we owe to our vulnerable elders (which is why I would support means testing and/or increasing the cap if it is necessary to ensure that our promises to tomorrow's vulnerable elders are likewise honored).