US Privatization of Social Security

[Phi for All]

I think privatizing Social Security is another scheme to help the rich get richer. There are many flaws with Bush's plan, and I'm very leery this will turn out just like deregulation of energy utilities, where service stays the same but costs skyrocket since these new private companies take their profits from the equation.

 

http://www.socsec.org/

http://www.socsec.org/publications.asp?pubid=503

http://zfacts.com/p/486.html

[Aardvark]

I think privatizing Social Security is another scheme to help the rich get richer. There are many flaws with Bush's plan' date=' and I'm very leery this will turn out just like deregulation of energy utilities, where service stays the same but costs skyrocket since these new private companies take their profits from the equation.

 

http://www.socsec.org/

http://www.socsec.org/publications.asp?pubid=503

http://zfacts.com/p/486.html[/quote']

 

Social Security isn't being privatised. Lets get our terminology correct.

 

He's proposing that some money paid into social security funds can be invested on the markets if the individual wants, rather than used to over the governments debt.

 

This may have the effect of increasing economic investment or it may simply help inflate stock prices.

 

It will result in a diversion of funds away from the public sector to the private sector. The government could response by cutting fat and 'pork' and increasing efficency. Or it could simply cut assistance to the poor.

 

Either way, social security based on a 'pay as you go' system does need reforming. At least Bush has the sense to be trying to change the system before it's too late.

[Hellbender]

I think privatizing Social Security is another scheme to help the rich get richer.

 

Thats what republicans are all about, right?

[TimeTraveler]

Thats what republicans are all about, right?

 

I don't know about that, but that is what the Bush administration is about.

[Tetrahedrite]

To quote a famous Australian song:

"the rich get richer, the poor get the picture....."

[john5746]

I think privatizing Social Security is another scheme to help the rich get richer. There are many flaws with Bush's plan' date=' and I'm very leery this will turn out just like deregulation of energy utilities, where service stays the same but costs skyrocket since these new private companies take their profits from the equation.

 

http://www.socsec.org/

http://www.socsec.org/publications.asp?pubid=503

http://zfacts.com/p/486.html[/quote']

 

People have already forgotten about Enron, etc. Of course, I don't think they will allow investment in individual stocks. I would think they could invest in stocks with the money without giving individuals access to it.

 

But, I don't think it is a completely bad idea. I think the democrats could propose to raise the threshold amount, say to 1,000,000. Have the rate from 90,000 to 1,000,000 be 2% employer, 2% company for example. The wealthy person could keep their stock invested portion, but the other would go towards others who need it, if they don't need it.

 

In this way, we may be able to ease the tax burden off the middle class and smaller businesses.

[Phi for All]

I guess it's always been the wish of wealthy conservatives to dismantle Social Security, since they view it as a compulsory waste of their money. Wealthy people probably could invest their money more wisely; in many cases that's what got them wealthy in the first place.

 

Those same people also feel their tax dollars shouldn't go to help the needy either, since they've never been needy and would never be eligible for many liberal programs. I can even sympathize with them there since I've had opportunities to take advantage of unemployment and didn't out of pride. I feel I can make money without recourse to outside aid. But if I was desperate and my family was in jeopardy, you can bet I'd like a little government assistance.

 

But trying to privatize Social Security (I know Aardvark, this initial reform isn't total privatzation, but that's really what the conservatives want, in the end) begins to look more like a scheme to rake in huge profits from misinformed taxpayers. I read the Cato Journal article by Stuart Butler from the Cato Institute and Peter Germanis from the Heritage Foundation from 1983 outlining a "Leninist Strategy" for reform and I was a bit shocked. They advocate a devious approach to fooling the most savvy, experienced sector of the populace, the elderly who are Social Security's recipients.

 

I see more fear-mongering going on here, because it's been such a successful strategy. And not just lately.

The promise of secure retirements is a "hoax." Taxes paid by workers are "wasted" by the government rather than prudently invested. And "the so-called reserve fund ... is no reserve at all" because it contains nothing but government IOUs.

That was a quote from a speech by Republican presidential candidate Alf Landon in 1936, and words like it have been spoken by many other conservative leaders since that time.Cato-Heritage excerpt

[Aardvark]

I see more fear-mongering going on here, because it's been such a successful strategy. And not just lately. That was a quote from a speech by Republican presidential candidate Alf Landon in 1936, and words like it have been spoken by many other conservative leaders since that time.Cato-Heritage excerpt

 

There may be scaremongering, but the fact remains that social security on a 'pay as you go' is not sustainable. As the general population ages there will be fewer workers supporting more retired people. The sensible course is to build up investments in advance. Therefore the current system does need reform.

 

If anyone has any constructive alternatives to Bushes proposals i'd be very interested to hear them.

[TimeTraveler]

I don't fully understand the proposal. Correct me where I am misinformed, because I keep hearing different stories.

 

So instead of a national social security, our social security funds will instead go into a privitized account for each individual in which he or she maintains his or her own account based on what they personally pay into it?

 

In turn those funds can be used a variety of different ways, they can be invested or saved or whatever, but we personally manage it?

[blike]

I think privatizing Social Security is another scheme to help the rich get richer.

Yes, but what's wrong with that? I don't think it's an attempt to get richer, per say. It's not just rich republicans who are for this proposal. It probably is more accurate to say that it's an attempt to have more control over the money they've earned, and thus place their "security" in their own hands; or at least keep more of their money. I can't fault them for being unhappy about being forced to pay into a system more than they'll get out of it.

 

I guess it's always been the wish of wealthy conservatives to dismantle Social Security, since they view it as a compulsory waste of their money...

Those same people also feel their tax dollars shouldn't go to help the needy either, since they've never been needy and would never be eligible for many liberal programs.

Indeed. Though I must object that it's not just wealthy republicans, it's most republicans. That's the foundation of republican philosophy.

 

I'm not directing this comment at you specifically Phi, but it seems the left tends to demonize the right by making it a "rich vs. poor" issue on everything. Just look at the way the Johns spoke at the DNC. "Two Americas". What's wrong with being rich? Absolutely nothing is wrong with being rich. Absolutely nothing is wrong with trying to further your own wealth, and absolutely nothing is wrong with supporting measures to control your own money.

[Aardvark]

So instead of a national social security, our social security funds will instead go into a privitized account for each individual in which he or she maintains his or her own account based on what they personally pay into it?

 

The idea is that you will have the choice of putting a small amount of your contributions into an individual investment account you would manage yourself.

 

Or, you could choose not too.

[john5746]

I just have this nagging feeling we are getting away from the intent of the program. Isn't it meant to keep old people out of poverty? I have money in the stock market and understand all that.

 

Shouldn't we just try to scale back the program and call it social welfare? Pool all the money and invest it in the market kind of like a mutual fund? An index fund? The personal responsibility thing sounds good when you talk about a wealthy person - he may not be able to have a boat if his stocks tank. But, if someone can't afford medicine, etc. we are going to pay for it.

 

Better to just pool all the money, investing some in bonds, stocks, etc. and dole it out to those in poverty. This SHOULD lower the tax rate.

[Aardvark]

Shouldn't we just try to scale back the program and call it social welfare? Pool all the money and invest it in the market kind of like a mutual fund? An index fund? The personal responsibility thing sounds good when you talk about a wealthy person - he may not be able to have a boat if his stocks tank. But' date=' if someone can't afford medicine, etc. we are going to pay for it.

 

Better to just pool all the money, investing some in bonds, stocks, etc. and dole it out to those in poverty. This SHOULD lower the tax rate.[/quote']

 

If you trust the government to make those investment decisions for you then that is one step.

 

Then you face the fact that the government would be a very large investor in private companies, in effect nationalising large swathes of the economy. Governments love to meddle. With the influence of holding large blocks of shares it could influence investment decisions and how companies are run. It is almost impossible to imagine such an investment fund not resulting in major government meddling in private businesses. If you are a socialist who believes in state ownership of the economy this might seem a good idea. But i think it would be corrupting and seriously damaging.

[john5746]

Well, I hadn't thought about that problem. OK, have the rich invest the money, and give it too the poor?

 

I'm not sure who to trust. Every month I hear something about this CEO or that mutual fund manager, etc. Can't trust anyone. Certainly can't trust poor people that don't know what a P/E ratio is. Oh well, life stinks.

[Aardvark]

Well, I hadn't thought about that problem. OK, have the rich invest the money, and give it too the poor?

That might have been a joke, but 'many a true word said in jest'. That's probably a good solution, the rich invest their money and pay a portion of the returns to the poor.

 

 

I'm not sure who to trust. Every month I hear something about this CEO or that mutual fund manager, etc. Can't trust anyone. Certainly can't trust poor people that don't know what a P/E ratio is. Oh well, life stinks.

 

I only trust aardvarks (and the occasional honey badger). Everyone else is crooked.

[Phi for All]

Yes, but what's wrong with that? I don't think it's an attempt to get richer, per say. It's not just rich republicans who are for this proposal. It probably is more accurate to say that it's an attempt to have more control over the money they've earned, and thus place their "security" in their own hands; or at least keep more of their money. I can't fault them for being unhappy about being forced to pay into a system more than they'll get out of it.

I have no objections to people doing all in their power to secure their happiness, within the framework of society. But I see our government as a tool to help maintain cohesion in society, not a tool for those with power and money to get more power and money. A democracy or a republic is created to be of benefit to to its members, all its members, not just the ones with the most money or power. In fact, I see it as a true test of the success of a society if it can take care of it's least powerful members.

I'm not directing this comment at you specifically Phi, but it seems the left tends to demonize the right by making it a "rich vs. poor" issue on everything. Just look at the way the Johns spoke at the DNC. "Two Americas". What's wrong with being rich? Absolutely nothing is wrong with being rich. Absolutely nothing is wrong with trying to further your own wealth, and absolutely nothing is wrong with supporting measures to control your own money.

I'm not sure if many rich and powerful people realize that they need all levels of society in order to even be rich. If everyone had Bill Gates' wealth, we'd all just be average earners.

 

There is nothing wrong with being rich. But we adopted democracy, among other reasons, to end the tyranny of the feudal system and make a more representative government. And while the wealthy have the business savvy to invest their social security money shrewdly, the majority of Americans do not, and I think this will be used against them to the detriment of their retirement. The wealthy have the means to make more money without controlling the government, and the poor need the government to make sure they aren't abused again. It's all they've got.

[Aardvark]

There is nothing wrong with being rich. But we adopted democracy' date=' among other reasons, to end the tyranny of the feudal system and make a more representative government. And while the wealthy have the business savvy to invest their social security money shrewdly, the majority of Americans do not, and I think this will be used against them to the detriment of their retirement. The wealthy have the means to make more money without controlling the government, and the poor need the government to make sure they aren't abused again. It's all they've got.[/quote']

 

What you are advocating is a return to the feudal system.

 

In a feudal system the poor can not take care of themselves so they turn themselves over to the existing power structure. They offer dependancy in return the power structure offers the basics of life.

 

To accept the reasoning that the poor need the government to take care of them is to accept a modern version of feudalism in which swathes of the population are completely dependant on government benevolence. They become clients of the state.

 

In the UK one result of the welfare state is that large numbers of people grow up going to government schools, listening to government radio, watch government television, claim government benefits and live in government houses before going on to claim government pensions.

 

An entire generation of modern day serfs.

[Phi for All]

What you are advocating is a return to the feudal system.

To accept the reasoning that the poor need the government to take care of them is to accept a modern version of feudalism in which swathes of the population are completely dependant on government benevolence. They become clients of the state.

Clever rebuttal' date=' but I didn't say the poor needed the government to take care of them, I said they need the government to take care [i']of their interests[/i]. I'm not talking about welfare or "the dole", I'm talking about a retirement fund that working individuals paid into all their working lives to insure a modest income when they were too old to work.

 

I look at the Social Security system as insurance that society isn't burdened by you when you retire. If the pay as you go system won't remain viable after the next forty years, then another mandatory system should be adopted. But Bush's Thrift Savings Program has major flaws when applied to Social Security. Republicans (who normally favor smaller government) should read this about the TSP. It seems like another neocon attempt to look Republican while simply being huge-government elitist.

[Aardvark]

Clever rebuttal,

Praise from Caesar.

 

but I didn't say the poor needed the government to take care of them, I said they need the government to take care of their interests[/i'].

 

A subtle distinction. In what way is a government pension taking care of a persons interests rather than that person? Or are you suggesting another system of old age income security?

 

I'm not talking about welfare or "the dole"' date=' I'm talking about a retirement fund that working individuals paid into all their working lives to insure a modest income when they were too old to work.

 

I look at the Social Security system as insurance that society isn't burdened by you when you retire. If the pay as you go system won't remain viable after the next forty years, then another mandatory system should be adopted. But Bush's Thrift Savings Program has major flaws when applied to Social Security. Republicans (who normally favor smaller government) should read this about the TSP. It seems like another neocon attempt to look Republican while simply being huge-government elitist.

 

The only problems highlighted by your link are that the scheme would inevitably require the hiring of more staff to administer and that this would involve some expenses. This seems to be more an objection on a matter of practicalities rather than of principal. I can't see the proposed scheme as being particularly more expensive to administer than any alternative, although it is a good point to be wary of big government creep with the implied extra costs, poorer performance and red tape.

 

The logic of your objections would seem to lead to the conclusion that the Republicans are not being radical enough and that people should be able to choose to opt out of the state system altogether and instead use private retirement investments, with a state scheme being maintained for the poor. Would you be happy with that eventuality?

[TimeTraveler]

I think many may forget that the lower and lower-middle class is the backbone of this country. The construction workers, the rescue workers, the school teachers, the police officers, the volunteers, the Auto mechanics, the librarians, the super market employers, the sanitation workers, the postal service ect.

 

I am a person who actually hates money (I might be alone in that) I only accept and make what I need to survive, anything more than that does not go to luxury (well maybe a little, but I don't over indulge) but instead goes to my children for medical or schooling needs, or college. I don't have medical insurance and I have some medical problems including MRSA staph infection. I cannot afford to get it treated because I do not have insurance, I do not make enough to afford a payment plan and I do not have someone I could borrow from. I am a college student, and due to government cuts my college does not have an insurance program for students any longer.

 

Staph infection is something that is dangerous in a community, and I am not eligible for low cost or low income type assistance due to financial aid receipot to attend college. So I am stuck between a rock and a hard place.

 

When I watch TV and see people who are overly rich, whos contributions to society does not outweigh mine, who have 7 cars, a 35 million dollar house, it makes me sad that this is the society we accept and live in. I am a volunteer, and a community oriented person. Once a week I take a few hours with my children and pick up garbage and litter on the side of the streets, my wife is a CNA we have spent the last 6 years taking care of people who do not have the ability to take care of themselves.

 

We moved to LA to take care of her grandfather and mentaly disabled uncle after 2 years there her grandfather passed away and we decided to take permanant care of her uncle. Her family's other option was to put him in a home. They are very wealthy people, retired and spend all their time traveling, they do not have time to take care of him. I guess spending money is more important. We have been taking care of him ever since. We do get some compenation from state-funded government programs, but it barely covers the cost it takes to care for him, usually it costs us money to take care of him, but thats okay, im not complaining. Taking care of him and ensuring that he has a chance to pursue happiness is more important than money. He is like a 45 year old big kid, he collects comic books and is infatuated with super heroes, he has the ability to make everyone around him smile, no matter how bad of a day they might be having. He is a gift to the human race, he has a job kinda, he collects alluminum, cardboard and plastic from everyone in the neigborhood and off the sides of the streets and recycles it. Which helps the community and allows him to earn money to buy his toys and comic books.

 

I agree with Phi when he implies that the rich need the poor and they tend to forget about the poor. It kinda disturbs me some that some people can depict the difference between rich and poor to statistics and stereotypes though. The wealthy can and do do alot to help their communities through donations and funding, but many don't. Many strive to earn and spend their money and think only of themselves, and pay no attention to those who do the things necessary to pave the way for the rich to make money.

 

Like the old saying " I like being poor; it makes you remember what your friends and family are here for." (Heard it in a rap song )

 

Sorry to stray off topic, but I guess my point is, some people just are not interested in striving for wealth and material things, those people should not be punished for that.

[Phi for All]

A subtle distinction. In what way is a government pension taking care of a persons interests rather than that person?

You had implied that my suggestion was a reversion to the feudal system where the poor were taken care of for life. This is a system for retirement. Not so subtle a distinction.

The only problems highlighted by your link are that the scheme would inevitably require the hiring of more staff to administer and that this would involve some expenses.

Some expenses? Fifty times the current number of counselors, for one. Another of your subtle distinctions?

This seems to be more an objection on a matter of practicalities rather than of principal.

A systemic problem with the Bush administration, seemingly. If they would consider practicalities a little more often, they could spend less time, resources and even human lives on cleaning up their messes.

I can't see the proposed scheme as being particularly more expensive to administer than any alternative, although it is a good point to be wary of big government creep with the implied extra costs, poorer performance and red tape.

This seems to be oxymoronic.

The logic of your objections would seem to lead to the conclusion that the Republicans are not being radical enough and that people should be able to choose to opt out of the state system altogether and instead use private retirement investments, with a state scheme being maintained for the poor. Would you be happy with that eventuality?

I would simply like to see a government sponsered plan that insured a bit of pride and independence for people who are too old to work full time anymore. I would like to see a plan that can be trusted because it is sponsored by the government, not some privateers who are looking to make a profit from people's earnings. I don't know how it can be accomplished, but I do know Bush is again ignoring top advisors, I know that any privatized portion of Social Security monies will be exploited, and I know this whole scheme stinks of corruption and cronyism.

[Aardvark]

You had implied that my suggestion was a reversion to the feudal system where the poor were taken care of for life[/i']. This is a system for retirement. Not so subtle a distinction.

 

When the pensions are seen in the context of a series of other welfare measures the distinction blurs.

 

Some expenses? Fifty times the current number of counselors, for one. Another of your subtle[/i'] distinctions?

 

The expenses would be higher because more people would be using the scheme, what matters is the expenses per head, not the total figure. Fifty times the number of counselors would be perfectly reasonable if you had fifty times the number of people to serve.

 

A systemic problem with the Bush administration, seemingly. If they would consider practicalities a little more often, they could spend less time, resources and even human lives on cleaning up their messes.

 

Agreed, but practicalities can be overcome, if the principle is important enough then practicalities should not be allowed to dictate policy.

 

 

I would simply like to see a government sponsered plan that insured a bit of pride and independence for people who are too old to work full time anymore. I would like to see a plan that can be trusted because it is sponsored by the government, not some privateers who are looking to make a profit from people's earnings. I don't know how it can be accomplished,

 

Reasonable enough, would not allowing people to choose to invest some of their pensions contributions privately whilst the government underwrites a basic minimum pension be one way of doing this?

 

but I do know Bush is again ignoring top advisors

 

The man has faith in his own judgement.

 

I know that any privatized portion of Social Security monies will be exploited' date=' and I know this whole scheme stinks of corruption and cronyism.[/quote']

 

Well, i don't know that, but i can't deny the strong possiblity. Cronyism always does seem to creep in somewhere when the government is dealing with large amounts of taxpayers money.

 

 

[Phi for All]

I do believe we're narrowing this down a bit. I know I have a better grasp of things, so thanks. There are many different species of anteaters, but only one Aardvark.

The expenses would be higher because more people would be using the scheme, what matters is the expenses per head, not the total figure. Fifty times the number of counselors would be perfectly reasonable if you had fifty times the number of people to serve.

Ah, but as we all know, (x) 50 + government does not equal 50x. Add in extra training due to multi-lingual needs and all the myriad expenses it takes to go from serving the needs of 3 million to the needs of 147 million, all of whom are new to the system and needing investment info, and you have a nightmare.

 

On the employers end, it gets worse. Mid-size companies on down will need extra staff to handle the paperwork. Large companies will need extra training for existing admin people. The costs will continue to multiply.

The man has faith in his own judgement.

I've seen what his judgement has done to his own companies, this country and the world.