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Privatizing Social Security

by Mac McMullen / September 30, 2004 1:50 AM PDT

Would you sign a contract that enabled the other party to change the terms of that contract at will, while you could neither stop him nor make any changes of your own? Probably not. Yet that is exactly what happens when you pay money into Social Security.

No matter what you were promised or at what age you were supposed to get it, the government can always pass a new law that changes all of that. But you still have to pay into the system.

A private annuity plan run by an insurance company is legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem its promises.

One of the few issues on which Senator John Kerry has taken a stand and not changed it (yet) is Social Security. He has said: "I will not privatize Social Security." ......................

Nothing is more risky than depending on politicians.


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Re: Privatizing Social Security
by Angeline Booher / September 30, 2004 8:18 AM PDT

Insurance companies have gone under. The US government has not. (Yet.)

The difference in privatization is that the worker does all of his own investing. Fine, except in a crash or serious downturn. It's a crap shoot.

As it now stands, the government does the investing for the collective workers. Benefits have always been paid, even in downturns.

401K's and IRAs just came in near the end of my working career. They and Roths offer the opportunity for workers to do their own investing.

The money paid by the present work force is not "their money".... it goes to pay SS benefits for me. I paid for my parents. There has been a surplus in the fund, but it has been "raided" to pay for other things, so is not as full as it was.

If individual medical accounts come to pass, that will be another slot for a family to fill.

I am assuming that you are under 65, gainfully employed, have insurance benefits, and an IRA or 401K or Roth.

You should do just fine, if you invest wisely.

click here to email semods4@yahoo.com

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Re: Privatizing Social Security
by Roger NC / October 1, 2004 1:00 AM PDT

The true wrong in SS that anyone is exempted from paying the same as the rest.

While there are many problems with it, the huge unfairness of some being exempted while others have to pay without choice is the only true evil about it.

I don't really have a problem paying it, even to it's roughly equalvalent to my state income tax. Even to I've been told since the 70's it wouldn't be there for me, and still doubt it will (though I'm a LOT closer now Wink ).

All the argument over lock box and such is just arguing over hot air. Shrug, the payout is an amount fixed by law (and changed by laws) as I understand it. Taxes, either SS or otherwise will have to be used to pay it.

SS is a huge government expense no doubt. No doubt some (but not all) would be better with private investments. But some would end up with nothing, not necessarilly through mismanagment.

Governmental management guareentees waste and abuse. But it also guareentees the program (subject to the whims of Congress).

Damn Congresscritters exempting themselves from paying it when 99.9% of them are very well off is what burns me as much as anything.

If you have a mandatory pay system, it should be manatory from the top to the bottom.


click here to email semods4@yahoo.com

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Congressmen pay now, Roger
by Angeline Booher / October 2, 2004 3:00 AM PDT
It is not true that Congressmen do not pay into the Social Security fund. They pay into the fund just as most everyone else does. (A few odd exceptions to the Social Security program still exist, both inside and outside of government.)

It was true prior to 1984 that Congressmen did not pay into the Social Security fund because they participated in a separate program for civil servants (the Civil Service Retirement System, or CSRS), but that program was closed to government employees hired after 1983:


click here to email semods4@yahoo.com
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Opps, an uninformed unjust accusation then
by Roger NC / October 2, 2004 11:23 AM PDT

However, I'm sure those congresscritters found a way to make up for it Wink .

I see it the change only applies to those hired (or in case of congress I guess that is elected) since 1983. So I figure there's still a lot of civil servants still on the better system. Along with a few excepted groups still.

I don't really trust any of those cats I'm afraid, no matter what color their stripes are.

Some are better, some worse, just my jandiced view on them.

Wonder how many groups are still excluded? guess sometime when get a bit of time I better check to correct my "rants".


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Here's my rant
by Angeline Booher / October 3, 2004 1:40 AM PDT

Regardless, Roger, they still have better Health care coverage than most of us.

Groups that hold sessions in the middle of the night during which they raise their wages are suspect.

Also, those who run on a hot issue, then forget about it as soon as they take the oath, are suspect.

Sen. Mitch McConnell of neighboring KY (so I saw his campaign ads) favorite battle cry was term limits - he was dedicated to seeing that they would come to pass. Nary a word after he was sworn in. He is now Majority Whip. he is also married to the US Secretary of Labor, Elaine Chao.

click here to email semods4@yahoo.com

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Re: Here's my rant
by Roger NC / October 3, 2004 7:40 AM PDT
In reply to: Here's my rant

There's been two or three at least in the last 15 years that ran on term limits. At least one, if not more, have promised to not run for re-election after so many terms, whether or not limits were passed.

Of course, when the time was up, he explained how his position he had earned with senority was so important to his district's/states's welfare it would be a disservice to his constituents to leave. And durn it, if I recall right, one case of that was still re-elected.

Wish I could remember name or state.

If they're not crooked when they get there ( a huge IF there), they're crooked soon enough.


click here to email semods4@yahoo.com

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Re: Privatizing Social Security
by Evie / October 2, 2004 1:05 PM PDT

Hi Angeline,

The privately held annuities can be insured by the government, kinda like our bank deposits are insured by FDIC.

Central to Sowell's point is that while the markets have their ups and downs, nobody invests all in one shot, and nobody will be divesting all in one shot either. So over a period of 40 years, it is impossible to find a person that wouldn't be better off today had they invested in even the most conservative of plans, vs. their "return" on SS. (Yes, I understand that I am paying for you, etc., but that's how the system was set up, not how retirement should be handled IMO).

When the system was set up, to get people to go for it, they were promised that it would be voluntary (Dems ended that), kept separate (Dems ended that) and never taxed (Dems ended that). I not only see a pattern, but I also see that until we wrest this large sum from the grasp of politicians we will forever be at their mercy.

When the plan was enstated, the retirement age was three years OLDER than the average age expectancy of the probable wage earner in the home. As we live longer it's just not feasible to keep the benefits at the same level and keep the retirement age at 1950's levels. There won't be enough people working to continue such a system. Europe's various pension plans are apparently worse off than ours with even more dour projected trends in the aging of the population and ratio of working taxpayers.

I have been taught to plan for SS not being there for me from the moment I entered the work force. I sure wish medical savings accounts had been around then too, and I look forward to more privatization and less control by grubby fingered politicians (of any stripe).

Evie Happy

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Re: Privatizing Social Security
by Angeline Booher / October 3, 2004 9:41 AM PDT

The costs for new or used cars, utilities, commodities, education, and core consumer products continually rise higher than income. A bigger share of health insurance is being passed on to workers as employers have to have some help, or will be forced to take more extreme means. More companies are dropping benefits for retirees, and planning to either not offer them to future retirees, or call for bigger contributions from them. So, it's not easy for everybody.

I certainly wish you the very best in your financial planning, Evie. Being a two income family is an asset, which is much more common now than in "my day". And you are in a good age group to take advantage of the opportunities.

click here to email semods4@yahoo.com

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Carlo Ponzi would say, ?Molto buon!?
by Catgic / September 30, 2004 10:21 AM PDT

Social Security is a tax not a deposit. Talk of signing a contract is ludicrous. No one ?pays money into Social Security??there is no ?into? account, only a "goes out" account.

Social Security is not a savings or investment or insurance program. There is no ?Lock Box? or ?Trust Fund? with your name and SSN on it, and you have no ?rights? associated with the SS Taxes you paid in. Social Security benefits are taxable too. You?re wages are taxed during your working years, and your Social Security retirement income is taxed again in your Golden years.

It is a government operated Ponzi scheme that FDR gave Americans in 1935. The eventual death of the Social Security was signaled by two basic factors. On the income side, decreased birth rates due to advances in pharmacological birth control technology and increases in elective pregnancy terminations flatten the growth of the Social Security taxpayer pool. On the outgo side, advances in medical technology and pharmacology have significantly extended life expectancy.

Less Social Security taxpaying citizen units means less SS Income. More and longer living Social Security recipients mean extension in the length of time retirement benefits are being paid out to individuals resulting in increased SS outgo.

Carlo Ponzi would say, ?Molto buon!? and be very proud.

In my opinion, true ?Privatization? will never happen. If something called ?Privatization? were to occur, it would only be part of a government (Republicrats and/or Demopublicans) means testing scheme to cut ?rich citizens? out of some or all of their ?ill-gotten? retirement benefits.

Social Security benefits are already ?means tested? via the stealthy circuitous means of the Social Security Benefits Worksheet ? Lines 20a and 20b of Tax Form 1040.

The imputable law of the government financial bureaucrat is, ?If you generate wealth, they?ll figure a way to get it from you and tell you it?s just your fair-share.?

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(NT) (NT) Too true
by EdH / September 30, 2004 10:45 AM PDT
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