US without Medicare and Social Security

[Joe]

That beats most savings accounts and even some money market accounts, actually.

Uh, that would be a no. It's rare to get any kind of investment for retirement give you that low a return.

[TrailerParkJawa]

That beats most savings accounts and even some money market accounts, actually.

Uh, that would be a no. It's rare to get any kind of investment for retirement give you that low a return.

Not right now. If you chose a "safe" IRA at my bank the rate of return is 1.8%.

If you have been vested in stocks over the last 5 years chances are you are negative.

However, the basic point is well taken that the return of Social Security is around 2%. But it is not really a return since you are getting money from current workers. But we all seem to understand that here.

[Joe]

Not right now. If you chose a "safe" IRA at my bank the rate of return is 1.8%.

1.8% to start out with, you mean. Most IRAs, even these days, won't remain that low for very long.

[TrailerParkJawa]

Not right now. If you chose a "safe" IRA at my bank the rate of return is 1.8%.

1.8% to start out with, you mean. Most IRAs, even these days, won't remain that low for very long.

Correct, my bank offers IRA's kind of like CD's you can pick 6 month, 12 month, 2 years, and 5 year terms. The 1.8% return will change down the road for better or worse.

[Patrick Degan]

Oh really? Care to provide the basis for this nice little surmise beyond "wishful thinking" and the assumption of perfect conditions and perfect behaviour?

I'm saying if people are intelligent then they can survive with out Social Security which doesn't cover basic needs anyways. Of course if people are stupid and squander their money they're going to be screwed.

And of course there simply is no possibility that anyone could suffer the sort of unintended and unforseen reverse which can substantially if not totally drain a family's life savings.

Well, that's all very nice and doctrinaire, but like a lot of nice and doctrinaire things it's also bullshit. Pyramid schemes come with no legal guarantee, no means of enforcing the terms of said scheme, and no security backing the investment. Unless you're simply going to stand there and liken the government to a criminal enterprise, which is moronically simplistic in the extreme.

You realize that the government is under no legal obligation to repay so much as one cent of the money paid into social security? That sounds like no legal guarantee to me.

Then what's all that stuff in the law pertaining to Social Security, then?

We know the federal government can't pay for the difference between what we paid in and what stand to get; no security there.

No, all we know for the present is that a crisis may develop if action is not taken. That is worlds apart from a certain collapse of the system.

It might not be a pyramid scam but damn if it isn't doing an incredible impersonation of one.

Again, doctrinaire bullshit does not an argument make.

The other thing that strikes me is how so many of the arguments for dispensing with Social Security turn on the false dilemma of "either scrap it now or face utter ruination later" and also on the ludricous assumption that not only can nothing be done to adjust the system, but that nothing will be done and the whole thing simply allowed to collapse.

Saying those are the only two options is a false dilemna. But I'm not arguing that. I'm say that in it's present form Social Security will ruin us. The option to reform it is there but it won't be for much longer.

Given the fact that neither side has undertaken any meaningful reform of the system is cause to worry. We've got a decade or two at best before the program goes tits up and takes the US government and economy with it. So unless reform comes soon those will be the only two options.

As I recall, the programme was supposed to have gone tits-up and taken the country down with it a decade ago and that crisis was averted. This does not mean that a more permanent solution will not be required. It will. But one thing I am fairly certain of is that the privatisation approach is the wrong way to go. Particularly as, like many laissez-faire curealls, it utterly depends as Communism did upon the assumption of a perfect world populated by perfect people behaving perfectly under perfect conditions.

[Stormbringer]

And of course there simply is no possibility that anyone could suffer the sort of unintended and unforseen reverse which can substantially if not totally drain a family's life savings.

Yes, there is. But smart planning and investment can nullify a lot of that. I'm not saying it's the solution to the problem. But it certainly won't lead to the hordes of dispossed elderly. Which was the point in response to Stravo's question.

Then what's all that stuff in the law pertaining to Social Security, then?

Toilet paper if the feds decide not to pay up. As Durran pointed out, it's up to Uncle Sam to give our money back. It's not a right.

No, all we know for the present is that a crisis may develop if action is not taken. That is worlds apart from a certain collapse of the system.

All of that is based on something being done to reverse it. So far fuck all's been done to stop it.

Again, doctrinaire bullshit does not an argument make.

Then tell me how I'm wrong. You can't just dismiss it as doctrine without actually addressing the point.

As I recall, the programme was supposed to have gone tits-up and taken the country down with it a decade ago and that crisis was averted. This does not mean that a more permanent solution will not be required. It will. But one thing I am fairly certain of is that the privatisation approach is the wrong way to go. Particularly as, like many laissez-faire curealls, it utterly depends as Communism did upon the assumption of a perfect world populated by perfect people behaving perfectly under perfect conditions.

And we got lucky it didn't, and that was solely because of the artificial boost of the 90s. There's no real good solutions which will pay everyone back.

What needs to be done is trim the fat out of the system and dispense it on a means based system. We can't sustain the current roles at the full benefits level, it's fact. So things are going to have to get cut with out hurting those in the most need.

But all this is straying away from the orginal hypothetical of the topic.

[Darth Wong]

Yes, there is. But smart planning and investment can nullify a lot of that. I'm not saying it's the solution to the problem. But it certainly won't lead to the hordes of dispossed elderly. Which was the point in response to Stravo's question.

I am curious how you know this to be "certainly" true. Especially since SS was originally created in response to "hordes of dispossessed elderly"; precisely what you say would not happen if it were taken away again.

[Stormbringer]

I am curious how you know this to be "certainly" true. Especially since SS was originally created in response to "hordes of dispossessed elderly"; precisely what you say would not happen if it were taken away again.

For one thing the Great Depression is hardly analgous to even this minor recession we're having now. So using that situation as the standard for a world with out social security is both pointless and deceptive.

[Darth Wong]

I am curious how you know this to be "certainly" true. Especially since SS was originally created in response to "hordes of dispossessed elderly"; precisely what you say would not happen if it were taken away again.

For one thing the Great Depression is hardly analgous to even this minor recession we're having now. So using that situation as the standard for a world with out social security is both pointless and deceptive.

If you're going to accuse me of being deceptive, you'd better come up with something better than this putrid bullshit.

At no point anywhere did I claim that the current recession was equivalent to the Great Depression. Did my point sail right over your head?

[Stormbringer]

If you're going to accuse me of being deceptive, you'd better come up with something better than this putrid bullshit.

At no point anywhere did I claim that the current recession was equivalent to the Great Depression. Did my point sail right over your head?

You claimed that prior to Social Security there were dispossed masses of elderly. Of course there were since it was the middle of the Great Depression and it's aftermath.

The mere fact that social security is actually a bad investment suggests that should one acutally be careful, it's entirely possible to better Social Security. One can't live off it alone and most people have other in order to support themselves. So if it were not to exist then the money spent on it would likely be placed in other, more productive retirement plans and options. So long as one shows a modicum of care for the future it's entirely possible to have a world with out Social Secruity with out having hordes of dispossed elderly.

[The Dark]

Durran, stop and think about the money no longer being deducted from all those paychecks.

It would depend upon rate of savings. Since MV=PY, increasing money flow would cause either an increase in prices or an increase in production. If money went into savings, it would be a price increase. Investing money would increase production. Given that America's industries are currently at about 72% capacity, it would be likely that the increased money flowing into the economy would lead to industries picking back up towards full production. A few months later unemployment would begin decreasing (you raise hours on underemployed before you hire unemployed, so unemployment is a lagging indicator of the economy), and the demand for investment would begin to increase, causing the Fed to raise interest rates from what they're at (about 1% right now, IIRC, for Federal Funds). Inflation wouldn't strike at higher levels than is normal unless the money no longer being deducted exceeded the excess capacity of industry to expand plus the demand for investment to meet any demand above full capacity.

[MKSheppard]

No, all we know for the present is that a crisis may develop if action is not taken. That is worlds apart from a certain collapse of the system.

Uh, deegan... Social Security was based upon having MORE people paying
into the system than were drawing from it. What will happen as more and
more of the population gets older percentage wise, than there are young
people working and paying for SS?

Japan is facing this problem now with their older population...

[Colonel Olrik]

No, all we know for the present is that a crisis may develop if action is not taken. That is worlds apart from a certain collapse of the system.

Uh, deegan... Social Security was based upon having MORE people paying
into the system than were drawing from it. What will happen as more and
more of the population gets older percentage wise, than there are young
people working and paying for SS?

Japan is facing this problem now with their older population...

For starters, you increase the limit working age. People who live to be one hundred can't reform at sixty five. I don't see how any system can work in the actual conditions. Money most come from somewhere, and if more than half of the adult population is not productive the country is surely in trouble.

[MKSheppard]

For starters, you increase the limit working age. People who live to be one hundred can't reform at sixty five.

Uh uh, and risk pissing off the AARP?

[Joe]

Yes, trying to tamper too heavily with Social Security is an invitation for bluehairs to vote against you.

[Colonel Olrik]

For starters, you increase the limit working age. People who live to be one hundred can't reform at sixty five.

Uh uh, and risk pissing off the AARP?

There will be and already are social convulsions (France a good example, and they have only risen the limit in two years) but it's unavoidable. Admitedly, more in the E.U than in the U.S.

[Stormbringer]

Social Security is a probably the best illustration of the problem with democracy: the voter. Both sides agree that Social Security is broken but neither side will work up the gumption to do anything about it. To start cutting benefits would require Congress and the President to be willing to alienate most of the voting population to push through any meaningful reform. It's not likely to happen.

[The Dark]

Uh, deegan... Social Security was based upon having MORE people paying
into the system than were drawing from it. What will happen as more and
more of the population gets older percentage wise, than there are young
people working and paying for SS?

Japan is facing this problem now with their older population...

For starters, you increase the limit working age. People who live to be one hundred can't reform at sixty five. I don't see how any system can work in the actual conditions. Money most come from somewhere, and if more than half of the adult population is not productive the country is surely in trouble.

Since when do Americans live to be 100? Last I read life expectancy was still in the low to mid 70s. My grandfather never did retire because he died before reaching 65. Doctors are saying my father probably won't live to 65 either because of heart disease. The working age limit right now is less than 10 years under the average age of death. Even if we move it to just 5 years, then we get a working age limit of 68. Any closer to the life expectancy is not practical for political considerations.

[Patrick Degan]

And of course there simply is no possibility that anyone could suffer the sort of unintended and unforseen reverse which can substantially if not totally drain a family's life savings.

Yes, there is. But smart planning and investment can nullify a lot of that. I'm not saying it's the solution to the problem. But it certainly won't lead to the hordes of dispossed elderly. Which was the point in response to Stravo's question.

And that doesn't answer the question one jot, does it? Chanting the "smart planning/investing" mantra all the time is just a way of ignoring the rather messy realities which have a habit of cropping up in life. A situation such as an asset-draining terminal illness, or even a chronic one, can force a family to cash in all its investments simply to meet the medical bills. Daddy getting downsized out of his job can force that decision as well. And this is assuming there won't be the sort of grand-scale securities fraud which will wipe out "smart investments" or a stock market crash. A family can make all the "smart" decisions which seemed right at the time and still find their nest-eggs wiped out. If there is no system of social insurance in that event, then what's the backup plan?

Then what's all that stuff in the law pertaining to Social Security, then?

Toilet paper if the feds decide not to pay up. As Durran pointed out, it's up to Uncle Sam to give our money back. It's not a right.

But that was not the question before the bar, was it? We can argue anything we like by playing the "what if" game.

No, all we know for the present is that a crisis may develop if action is not taken. That is worlds apart from a certain collapse of the system.

All of that is based on something being done to reverse it. So far fuck all's been done to stop it.

Two previous crises were averted by congressional action. What is your basis for declaring with certainty that nothing will be done whatsoever to avert the current crisis?

Again, doctrinaire bullshit does not an argument make.

Then tell me how I'm wrong. You can't just dismiss it as doctrine without actually addressing the point.

Because the "social security is a pyramid scheme" mantra requires one to simply ignore several relevant facts: that the system is established in law and is backed by the security of the ferderal government, pays to its beneficiaries on schedule, and actually has solid assets to draw from and that its accounts are subject to public examination. A pyramid scheme is a criminal enterprise by definition because not only does it have no assets to back its security, its entire intent is to defraud. The only way this formulation can be applicable to social security is to simply deny the legitimacy of the federal government in toto and declare that it exists only to defraud the citizenry. And unless you can demonstrate a pattern by which the government has regularly failed to meet its obligations in regards to the social security system, the argument necessarily fails and therefore is doctrinaire bullshit.

As I recall, the programme was supposed to have gone tits-up and taken the country down with it a decade ago and that crisis was averted. This does not mean that a more permanent solution will not be required. It will. But one thing I am fairly certain of is that the privatisation approach is the wrong way to go. Particularly as, like many laissez-faire curealls, it utterly depends as Communism did upon the assumption of a perfect world populated by perfect people behaving perfectly under perfect conditions.

And we got lucky it didn't, and that was solely because of the artificial boost of the 90s. There's no real good solutions which will pay everyone back.

Again, what is your basis for such a sweeping assumption?

What needs to be done is trim the fat out of the system and dispense it on a means based system. We can't sustain the current rolls at the full benefits level, it's fact. So things are going to have to get cut with out hurting those in the most need.

Agreed that the waste in admin costs needs to be eliminated. But you simply fixate upon one course of action and assume that no plan for long-term solvency is possible.

Furthermore, the inability to sustain full benefit levels is not established fact at this point, it's possibility —on the assumption that no solution to the present problem is found.