Medicaid

Simpson and the Sacred Cow

The reaction to the former senator's comments on Social Security shows he's right.

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Alan Simpson violated a taboo last week when he likened Social Security to "a milk cow with 310 million tits." But contrary to the dictionary-deprived critics who accused him of sexist vulgarity, the former Wyoming senator's transgression had nothing to do with his use of a perfectly acceptable synonym for teat. Simpson's real sin was "belittling a bedrock program," as the AARP put it—i.e., showing insufficient reverence for a sacred cow.

To Simpson's detractors, it is self-evident that a man who supports entitlement reform has no business serving on, let alone co-chairing, a presidential commission devoted to fiscal responsibility. But anyone who takes an honest look at the federal budget can see how crazy that position is.

Just three entitlement programs—Medicare, Medicaid, and Social Security—account for two-fifths of federal spending, representing 10 percent of GDP. Without reform, they are expected to consume half of the budget and about 20 percent of GDP by 2050.

It's true that the fiscal outlook for Social Security, which has about $18 trillion in unfunded liabilities, is not nearly as bad as the fiscal outlook for Medicare, which has a long-term shortfall five times as big. Simpson's controversial comments nevertheless reflect some important truths.

First, Social Security is neither a pension fund nor a means-tested assistance program for the needy. It is a pay-as-you-go system of transfer payments that takes money from relatively poor workers and gives it to relatively affluent retirees.

Second, despite all the talk of a "$2.5 trillion surplus," Social Security is indeed "in trouble," thanks to a shrinking ratio of workers to retirees and repeated raids on its revenue by legislators looking for easy spending money. The year of reckoning is not 2037, when the program's imaginary "trust fund" is expected to run out; it is now, since the cost of benefits already has begun to exceed annual revenue. There is nothing in the trust fund but IOUs from the federal government, which can be redeemed only through cuts in other programs, more taxes, or more debt.

Third, entitlement reform, including Medicare cuts as well as changes to Social Security, will be fought tooth and nail by the AARP, the National Organization for Women, and other denialist defenders of the status quo. That much was confirmed by the reaction to Simpson's complaints about charges of "ageism" and "sexism," which were cited as further evidence of his ageism and sexism.

Yet this self-hating senior citizen, who turns 79 this week, is right to question a retirement age that was set at 65 in 1935 and has been raised by only two years (for people born after 1959) since then. Meanwhile, life expectancy at 65 has gone from about 13 more years for men and 15 for women to 17 for men and 20 for women, and those numbers are projected to continue rising.

Simpson is also right to point out that Americans receive Social Security (and Medicare) benefits regardless of how wealthy they are. You might think progressives would welcome means testing. But as Trudy Lieberman explained in the Columbia Journalism Review, they worry that targeting benefits to people who actually need them would undermine "the program's social solidarity."

Translation: Voters love middle-class entitlements, but they hate welfare. That's why progressives were so upset about Simpson's cow comparison, with its implication of unseemly dependence. Sen. Bernie Sanders (I-Vt.) and Rep. Peter DeFazio (D- Ore.) claimed to find the simile "beyond comprehension" but nevertheless concluded that it was both "false" and "demeaning."  

Transforming Social Security into a true pension program by letting workers invest part of what they now see disappear in payroll taxes is likewise anathema to the "social solidarity" crowd, since it would let people go their own way instead of forcing them to participate in the government's Ponzi scheme. Simpson is not suggesting anything nearly so radical, which makes the silly, sanctimonious storm over his comments all the more depressing.

Jacob Sullum is a senior editor at Reason and a nationally syndicated columnist.

© Copyright 2010 by Creators Syndicate Inc.

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  1. Sure. And as the election approaches, look for Democrats and especially Republicans to retreat into a fog of gray platitudes, both sides afraid to say anything specific that could be construed as “tinkering” with our sacred and unsustainable welfare state. Too much is riding on the election. Too much is always riding on the election.

  2. As others have said before, he was correctly pronouncing the word spelled “teat.”

    1. As others have also pointed out, his was the secondary pronunciation. But still correct.

      1. It helps to remember that people from that region also pronounce creek as ‘crick.’

    2. Tits, teats, tits, teats. I would never have apologized.

      1. That’s why you’re not a politician.

  3. The old folks will never give up the money that is “owed” them for “paying into the system” for their entire working career. Just because it’s not actually their money (which has already been spent) and is actually the money of younger workers (which is supposed to be invested for them) won’t cause them to be angry with the politicians who squandered their money. They just get paid off by the politicians with money from other sources, and the corrupt system rolls on.

    1. I would not be too hasty to blame the old people entirely. This entire program has been dedicated to deception: Social Security numbers, “benefits” statements, etc.

      1. I’m perfectly comfortable blaming them for buying into a transfer payment system. As well as the politicians who promise magical money from said transfer system.

        1. I’m perfectly comfortable blaming them for buying into a transfer payment system.

          Who the fuck is them, Kemosobe? It’s not like paying into social security is an option. The deceit was/is presenting SS as an insurance system, rather than what it is a Ponzi scheme transfer payment scheme. If I had the option, I’d had preferred to keep and invest my own money. There was a President that suggested a system like that, but he certainly didn’t win any love over that idea.

          Regards,

          Go Navy, age 54
          (throws away every AARP mailing unopened, as does his 50ish sisters and 80-something parents)

          1. Im trying to figure out which president you are referring to, because I dont remember one who suggested that. I remember one who half-assed that.

          2. I have to agree. It’s not like the government didn’t steal money for the stated purpose of funding people’s retirements. That chunk of change taken out of each paycheck could’ve provided a nice nest egg.

            SS is an absolutely appalling system, and the comeuppance is on its way. I certainly don’t plan my retirement with any expectation of receiving SS benefits. I just watch my money go elsewhere, money I might use to help out my own senior family members. Or save for my retirement.

          3. Is it possible to communicate your thought without the foul language? Cussing simply shows a lack of linguistic creativity.

            1. Aww, did the naughty words hurt your feelings? Quit bitching and grow a pair you whiny piss-ant.

              Goddamn, stupid-ass, abstemious, censoring motherfuckers- there’s nothing wrong with a little profanity!

              1. Aww, did the naughty words hurt your feelings? Quit bitching and grow a pair you whiny piss-ant.

                Apparently, the anwser to the original question is ‘no’.

              1. Yes, but cunilinguistic creativity is what is important.

                1. … right behind learning how to spell…should be cunnilinguistic.

                  1. I prefer cunninglingus, myself.

            2. No, it shows a creative use words to express emotion beyond that which punctuation marks and more mundane words would do.

              1. No one expresses emotion.

                Emotion is the act of expressing feelings.

                You should quit discussing how the mind works as you are oh-so-far behind already.

            3. I haven’t been reading this shit. Just randomly piping in. So, what the fucking fuck of all fucks is fucking go-fuck-ing on guys?

              [No Homo]

              1. Why did you change the spelling of our beloved family name?

            4. It does fucking not! What using “foul language” in a comment section does is allow me to make up for the lack of the ability to show emotion and emphasis through tone of voice and expression.

              1. What using “foul language” in a comment section does is allow me to make up for the lack of the ability to show emotion and emphasis through tone of voice and expression.

                Because that’s about all you have.

          4. right on. I am 58 and do not expect to receive anything from SS and I am not rich.

          5. Don’t throw them (AARP mailers) out. Open them, and mark them “Hell No!” with a red Sharpie and send them back. Make them pay for annoying you.

          6. Who the fuck is them, Kemosobe?

            Probably the people who voted to establish Social Security and then year after year refused to vote for politicians who wanted to change it.

            Just guessing, though.

        2. Did they buy in or were they forced to buy in?

          1. As some California judge is sure to remind us, decisions made at the point of a gun are still legally enforceable, if the beneficiaries are politically powerful enough. Think public sector unions and the biggest, most active voting block in the country.

        3. you people are fools. I didn’t “buy into the system”. I was forced to donated a portion of my salary for 40 years. In return for that I was given a promise.

          Blame congress for spending the money.
          If you can’t understand that you are a complete moron!

          1. You were lied to, brother. And you and the rest of the boomers have been warned for decades that the ‘trust fund’ is empty and the money was pissed away. You did nothing. Now the young and poor have to pay your bills? And the bills of every affluent retiree? It’s not going to happen in the long run, and anyone who says otherwise is lying to you, again.

        4. Yea, like you’re going to kick ass and change things!

    2. The old folks will never give up the money that is “owed” them for “paying into the system” for their entire working career.

      Why should they? A taxpayer near retirement who has been fleeced by his government for 45 years should just say, “Hey, no problem. Keep it!”? It is their money, but it’s in the form of a very problematic IOU, not a room full of gold.

      [It] is actually the money of younger workers

      It’s “the money” of everyone who has been taxed to support the system since its inception. That includes 20-somethings who (despite their whining) haven’t paid a whole lot to begin with, to 60-somethings who have.

      The demographics make the current system unsustainable without higher taxes, a higher retirement age, reduced benefits, etc. But to say “fuck you” to the people who have their money stolen from them by their own government is no answer. It’s a typically naive and petulant response, not a solution.

      1. Will I see a single dime of the money stolen from me? If not, I have every reason to complain. You see, it was STOLEN from me.

        1. If you never see “a dime” of the money stolen from you, then you do indeed have every right to be outraged. But the intergenerational warfare I see on these threads isn’t helpful. It isn’t a solution.

          1. So epi, just sit back and relax and try to enjoy it. Your complaints about having your money stolen from you are just intergenerational bickering. Boomers don’t like it intergenerational warfare, just ask “meathead”.

          2. I’m in my 20s. I’m getting fleeced for 11.something% of my paycheck (net of company contribution) for money where, 40-50 years from now, I don’t even expect a return of principal. And that’s because it’s all going to older folks who have voted themselves a share of my money instead of a responsible retirement scheme.

            Recognizing that is intergenerational warfare?

        2. Why don’t you tell us how to change it, bright boy>

          1. > should be a ?

          2. Congressman Ryan has some ideas…but he’s not old enough to be taken seriously. He just hates old people, yeah, that’s it.

      2. Sunshine, I basically agree with all you say except the 20-somethings whining. They still have to pay 6.2% of their income to the system…oops I mean Ponzi scheme. Of course, they did vote for Obama by a 2-to-1 margin. So the Obama voters don;t get to whine!

        1. 12.4%

          The fact that they dont see 1/2 of it first isnt their problem.

          1. Well, technically 11.52% once you add the 7.65% onto the denominator too.

            1. robc, point taken. But should we just go ahead and add the medicare portion too!

      3. “Why should they? A taxpayer near retirement who has been fleeced by his government for 45 years should just say, “Hey, no problem. Keep it!”? It is their money, but it’s in the form of a very problematic IOU, not a room full of gold.”

        What about all the folks who have already collected a lot more in benefits than what they paid in?

        I don’t see why their benefits can’t be reduced or cut off. They already got their money back.

        1. Because that is not how it works. It’s a social insurance program that aims to make sure that those who need it are covered. Everyone pays in, everyone gets back, but need plays a factor too. But what the person who never needs as much “gets” is the “security” that if, God forbid, they ever need it they will get it.

          1. SS is a contract that the federal government has forced upon every wage-earner. We (the taxed) have no choice in the matter. They (the government) hold the gun. But we the fleeced have every moral right to demand that the government honor its side of the deal. SS must be reformed and eventually dissolved. But to let the government off the hook would set a dangerous precedent. Having defaulted on SS, what would stop them from defaulting on other obligations, such as T-bills? Just because it has never happened doesn’t mean it couldn’t. Such a default would cause a catastrophic, wordwide depression.

          2. I fucking hate it when redistribution schemes are called “social insurance”. It’s NOT FUCKING INSURANCE. Insurance “insures” against an unlikely but possibly financially ruinous event. Social security redistributes wealth from young people to old people (and redistributes somewhat from rich to poor). Now, if you’re in favor of income redistribution, then fine, but call it what it is, rather than the mealy-mouthed pussyfooting, lying piece of shit terminology so common in politics.

            Not that I’m surprised. This is MNG, after all, the master of disingenuous and downright idiotic arguments.

          3. No MNG, what it is is an unconstitutional, socialist redistribution of wealth program that steals private property from people who legitimately own it and gives it to people who don’t.

          4. One of the most consistent laws of the universe is that when somebody puts “social” in front of another word you know they are full of shit. Like “social insurance” might be a lot of stuff, but whatever it is, it isn’t insurance. So thanks for providing another data point. I haven’t found an exception yet.

          5. I think I’ve heard this before, but the prose was a little better.

            “From each according to his ability, to each according to his needs.”

          6. MNG is just plain clueless.

            Insurance is something you pay for IN CASE you need it. If we means tested the program as we always should have, we would be much better off as the majority would have saved enough to fund their retirement.

            But to the left, this has never been about about providing security for anyone. It has been about crowding out the private sector and creating dependence.

        2. Exactly! If the original retirees of age 65 were thought to live 13 or 15 years more, then why don’t we just start killing off grandma and grandpa at age 72 and 70 (factoring in the added 2 years before retirement age) if they refuse to stop receiving checks by that time?

        3. How about Mary Ida Fuller – the first person to collect SS benefit paid a total of $24.75 in taxes & collected $22,888.92 in benefits?
          The funny thing is FDR is on record of stating that this plan will “implode” in some time in the near future

      4. It’s “the money” of everyone who has been taxed to support the system since its inception.

        Typical euphemism to hide reality. How is money not yet even earned the possession of “everyone who has been taxed”?

        The very basis of illegality in a ponzi scheme is the simple fact that all of the money gets spent, not invested. Everyone who takes from SS knows that they were screwed by a government ponzi scheme, but want to pass the burden of their mistakes on to others, instead of taking personal responsibility, which is not exactly Libertarian.

        1. [they] want to pass the burden of their mistakes on to others

          Being forced into SS at the point of a gun is hardly a “mistake” by those so forced. They had no choice in the matter. And it isn’t immoral to want to recoup the money stolen from you by a thief, whether that thief is a common criminal or the U.S. government.

          1. And it isn’t immoral to want to recoup the money stolen from you by a thief, whether that thief is a common criminal or the U.S. government.

            I suspect you mean moral and not immoral. How is taxing people today getting the money back? It is gone. If taking people’s money at gunpoint is wrong, and it is, then saying, “I was wronged and that makes wronging others OK” is bullshit. Nothing moral about stealing from someone who didn’t take from you because someone else stole from you. Today’s taxpayers are not the ones who did the stealing, and you know it.

            People were taxed and the money was pissed away. Of course the moral thing to do is make people not even alive at the time responsible?!

            1. Reading comprehension fail. You said: isn’t immoral. I am the one who thinks it isn’t moral.

          2. And it isn’t immoral to want to recoup the money stolen from you by a thief, whether that thief is a common criminal or the U.S. government.

            It is immoral to recoup the money stolen from you by a thief by just stealing it from someone else, though.

        2. Well, then just tax the shit for brains liberals who stated this crap!

      5. The Trust Fund…

        Check out that overgrown crater in a Panamanian jungle made by a Stealth fighter back in ’89. That’s not your tax dollars at work, its your retirement savings at work. Tee-hee.

      6. Money was stolen from you and put into a ponzi scheme that promised you returns. You could take notice that it took a significantly lower percentage of income from those retiring now than those putting into it currently, and that this trend must continue. Sorry your money was stolen, but a big fuck you to anyone who thinks the stealing should continue to pay so as to pay off your losses or those who gave money to Bernie Madoff. Do insolvent companies get more money to keep running in the market or do they go bankrupt? Should the employees of a company get a massive payout that will bankrupt the company? If I was investing in a company and this was happening, you can bet I would sue the company as an investor. Unless there is some plan to fire (kill) these employees that are bankrupting the company, their undeserved salaries must be cut!

      7. What ‘the money’ are you referring to? There’s no money, only claims on future tax revenues. If you want to be honest, say that we’ve been making promises based on the labor of younger generations for years, and you intend to hold THEM to account. YOUR money was long ago pissed away on equalitarian schemes.

      8. Response to:
        It’s “the money” of everyone who has been taxed to support the system since its inception. That includes 20-somethings who (despite their whining) haven’t paid a whole lot to begin with, to 60-somethings who have.
        ———————————–
        While I agree, in principle, with your sentiment; I must point out that the 20-somethings, and indeed we 30-somethings, aren’t whining about because they’ve paid in a lot, but because of how much they WILL pay in over the course of their careers, knowing the chances of the system lasting long enough for them to be able to use it is so abysmal.

        It isn’t the present or past totals each young person has paid that bothers, it’s the simple math calculations that show a young person will pay a lot more before the system crashes, and that the crash is expected to come before any chance to recoup on their “investment”.

        Which is why I am for allowing a person to choose (once and for all, no take-backs as we said as kids) to opt out of the system entirely. The worker makes this decision with the knowledge that opting out means 1. He gets nothing from SS when he retires and 2. He is opted-in to a savings plan (similar to the way you choose your retirement options with most companies… at Stein Mart, for instance, we had a sliding-scale range of investment options that we could use to have more risk early, and less risk later. There were several choices to select from here. Personally, I would also like to see an all-out option where you’re on your own with no government involvement in your retirement plan at all, but this is a libertarian’s pipe dream, unfortunately, since we all know government hands are too sticky to ever allow the people so much freedom in their own lives.

    3. Actually I understand where these “old people” are coming from.
      Perhaps they what they are getting at is that they paid their part of this transfer plan when they could and now they are “owed” that the next generation do the same. One of the things that always made SS seem more fair to me is that pretty much everybody will pay and get benefits.

      1. pretty much everybody will pay and get benefits

        Myself and others who are thirty years away from retirement take it for granted that we’re not gonna get jack shit from the federal Ponzi scheme.

        We got in too late.

        1. I turn 38 this month, and I would GLADLY renounce any future claim upon social seccurity, and say bye-bye to everything they’ve taken from me at gunpoint thus far, if they’d just let me stop paying in.

      2. pretty much everybody will pay and get benefits

        FTFY

        1. We’ve been hearing about this for decades and yet the checks get printed and sent. It’s very popular, I’m betting I’ll see my checks.

          1. I’m betting I’ll see my checks

            I find it’s pretty easy to tell the difference between those who are counting on the government to take care of them in their old age, and those who are counting only on themselves.

            The ones who are counting on the government spend money instead of saving it.

            When the Ponzi scheme fails, and they’re left asking for sympathy because they didn’t save for themselves, I’ll hand them a dictionary and tell them to look between shit and syphilis.

            1. Of course if they’re poor to begin with, they don’t have a reasonable amount of money to save. They could try and not pay that money to government, and with a high risk being robbed and imprisoned. They could try and organize a rebellion and get shot. Or more likely, they can hope to die early while they’re currently getting raped in the ass. I think a bit of sympathy is in order. This sympathy should make you angry. Unfortunately, who gives a fuck about those “irresponsible” poor people? God forbid they be allowed to spend their money which would “create jobs” or be allowed to responsibly save money for retirement.

              1. Of course if they’re poor to begin with, they don’t have a reasonable amount of money to save.

                I used to work with a dishwasher from Mexico who managed to, on a meager dishwasher wage, save up enough money to take a two month long vacation in Mexico every year where he was treated at a respected businessman returning home with American dollars.

                It’s not that poor people don’t have a reasonable amount of money to save, it’s that they take that money that they could save and make the choice to spend it at Rent-A-Center or the liquor store instead.

                Unfortunately, who gives a fuck about those “irresponsible” poor people?

                I know one person who doesn’t.

                Me.

                1. What about all the irresponsible retirees spending their money at the Rent-A-Center liquor store while being funded by a massive government entitlement program?
                  I think I’m liking this idea of locking Social Security to Mexican vacations.

          2. What relation will the size of those checks bear to the amount you paid in over your lifetime?

            That is what truly chaps my hide. The payments you get are so ridiculously low, they could barely maintain you at poverty level. And yet the politicians act like they’re doing us all such a big favor making sure we get our SS payments.

            As has been said upthread, I’d rather not contribute at all and just be left alone to invest my money myself.

          3. I’m betting I’ll see my checks.

            You probably will. But what will they be worth?

      3. Good thought. Let’s extend that to the military. Force every citizen to serve in the military. That way, everybody who “needs” national defense will be providing it as well.

        How perfectly “fair.”

        1. Well, if we need fight wars I do think a draft in which every able bodied person has an equal chance to be drafted is the fair way.

          1. Involuntary servitude is involuntary servitude.

            draft = slavery

            1. “Involuntary servitude is involuntary servitude.”

              taxes = slavery

          2. Wow, you’ve officially lost your mind. Should I reserve a room for you in the ward or will your family be taking care of that?

          3. Remember when I said that the Katrina meme was the dumbest one on the left? I was in error. The draft meme is the dumbest on the left.

          4. Yes, let’s take people out of the professions that they have chosen and trained for, put them through boot camp and some hasty training, then send them to get their asses shot at for a war that they might not even support.

            God, MNG, you really are an totalitarian piece of shit.

          5. That’s it! Confess right now! You are, in fact, the nefarious statist, the villainous rat-bastard, Paul Krugman!

          6. A Nation who’s people will not volunteer to fight for its survival, is a Nation that does not deserve to exist.

            1. That is true, but the last four wars were not important to our survival.

            2. Zieg Heil

          7. Personally, I am against a draft. It is no longer needed or useful. The Vietnam style draft of 2 years is certainly not. It takes a year at least to train a modern soldier who is a volunteer.

            What I would be for, and believe would be beneficial to society, is a system where some form of service is required to gain certain privileges (voting, for instance). I am thinking here of the model Heinlein used in the novel Starship Troopers (not the movie). Federal Service in the novel DID NOT always mean military service, nor should it. Some form of gov’t service should be required for citizens to enjoy all of the privileges of citizenship. Military, civil service (low-paid, I’m also for salary caps and term limits for both houses of congress and an end to all the perks they get.. including making them either use POVs or cap vehicle purchases for civil servants to those models which are more than 5 years old and cost less than 8k). I stress here that this should NOT be compulsory. You serve, and you get the full benefits. You don’t, and you do not. It would once again give Americans a personal stake in the functioning of our government.

            As an aside, I am also for term limits in Congress (perhaps 2 terms in each house… 20 years is more than enough time in the legislature).

            As a note on my main point and my aside, I know that neither of these things will ever happen, but one can hope.

          8. Personally, I am against a draft. It is no longer needed or useful. The Vietnam style draft of 2 years is certainly not. It takes a year at least to train a modern soldier who is a volunteer.

            What I would be for, and believe would be beneficial to society, is a system where some form of service is required to gain certain privileges (voting, for instance). I am thinking here of the model Heinlein used in the novel Starship Troopers (not the movie). Federal Service in the novel DID NOT always mean military service, nor should it. Some form of gov’t service should be required for citizens to enjoy all of the privileges of citizenship. Military, civil service (low-paid, I’m also for salary caps and term limits for both houses of congress and an end to all the perks they get.. including making them either use POVs or cap vehicle purchases for civil servants to those models which are more than 5 years old and cost less than 8k). I stress here that this should NOT be compulsory. You serve, and you get the full benefits. You don’t, and you do not. It would once again give Americans a personal stake in the functioning of our government.

            As an aside, I am also for term limits in Congress (perhaps 2 terms in each house… 20 years is more than enough time in the legislature).

            As a note on my main point and my aside, I know that neither of these things will ever happen, but one can hope.

        2. works for me. Any healthty male that didn’t serve in the military is a useless piece of crap as far as I’m concerned.

          1. Well your concern is certainly paramount to me….dickhead!

          2. Many of the most useless pieces of crap I’ve known were men who served in the military.

            In the military they were taught to do only that which they were ordered to do, they were specifically taught NOT to think (that’s an officer’s job), and when it came time to function in the real world they didn’t know what to do.

            Without someone thinking for them, making decisions for them, and directing them, they couldn’t do a damn thing.

            Useless as tits on a bull.

            1. Many of the most useless pieces of crap that I’ve known where men who never served in the military.

              They would never do what they were told to do, they were specifically taught to throw monkey wrenches into every project, and when it came time to actually get something done, they had no clue on what to do.

              (This is fun!)

              1. Sounds like every union worker I’ve ever met.

              2. Many of the most useless pieces of crap that I’ve known were people who went through public school.

                They would sit around all day waiting for some cunt to make them do something, then they would do it completely half-assed. Upon graduation (or dropping out) they joined the military or majored in Womyn’s Studies at a state university. That partially explains Iraq, Afghanistan, and our cradle to grave whiny-assed pussy culture. Then these fuckers voted.

                (This is Magically Delicious!)

          3. Any healthy male that doesn’t spend at least two years of mandatory incarceration is a useless piece of crap as far as I’m concerned.

          4. I’d prefer to do something other than murder innocent women and children.
            But whatever gets you off, JohnD.

        3. I’ve already been forced to serve in the military, for $112.50 a month, IIRC. I don’t think they took Social Security taxes out of that, but I do know I have paid over $200K into the system in my career. I would propose a devil’s bargain: My employer cannot lay me off or fire me or reduce my salary until I decide to retire. In return, you can keep the $200K.

          The unstated cost is that 3 of you kids won’t be getting hired by my employer, but that’s your problem.

          1. “The unstated cost is that 3 of you kids won’t be getting hired by my employer, but that’s your problem.”

            We can always pick fruit…oh wait.

      4. yeah like my sister who paid in for almost 40 years and then died before getting anything…

        1. Then she doesn’t need a check, does she?

          1. that’s cold.

              1. Ssshhha boom!

      5. Actually, the last generation to pay into the system gets screwed. Not to mention.

      6. One of the things that always made SS seem more fair to me is that pretty much everybody will pay and get benefits.

        Sucks to be the person who dies a few years before or only a few years after retirement age.

    4. That’s actually pretty stupid Epi. If you really hold that view you should stop paying your taxes. Really, it’s the same thing.

      Are you paying your taxes? Then STFU about all the other people who also paid/are paying their taxes without any more choice than you have.

      I’m totally fine with just cutting everyone a check for what they actually paid into SS and turning the whole thing off but you can’t deny that they paid in and should get what they put in back out.

      1. I agree with your last paragraph, and would go one farther, in accepting the reality that younger workers such as myself would lose what we have paid in. I can do without that check for what I’ve paid in if it means getting me out of the system altogether.

    5. Old folks? Sure. But check how many other special interest groups have been added as beneficiaries to this supposed retirement program. According to data from the SSA from 2009, only 64 % of the payola actually went to retired workers who had contributed to the system.

      It’s not social, or secure, but it certainly is a system. An alternative system of Federal taxation.

  4. I don’t know anyone my age or younger who expects to get anything out of SS. I suspect this cow could be sacrificed if people actually voted when they’re young. Still, the boomers (I ‘spose I’m on the tail end of that demographic) have everyone outnumbered, so what are you going to do?

  5. I can’t understand you, Jacob. That silver spoon is garbling your message.

  6. In an ideal world this old Bush idea might actually work. In THIS world it’s a scam to transfer funds to Wall Street. You can bet there would be all kinds of “instruments” being sold to people that don’t have any idea what they’re doing and we would end up having to support them after their little bit of SS has been pilfered.

    I don’t particularly like social programs but this one protects me from having to cough up more money for my neighbor’s destitute granny.

    The current system feeds her. Bush’s system robs her and makes me feed her. I think I’ll pass on this scam, thank you.

    1. The current system robs me to feeds her. Bush’s system robs her and makes me her feed herself.

      FTFY

      1. bluecrane’s point is that, what happens when granny’s investments do poorly (or are stolen, etc.)? A civilized society will refuse to let her die of starvation, so she’d go on welfare. It’s a good point, but I still think that would be a better system than the current one. At least the majority of people would be supporting themselves from their own savings/investment-income.

        1. If making rules makes you wet Uncle Sugar could mandate your first 10 years contributions would only be insured CD’s, laddered in 1,3,5,10,20 year maturities. Part of each years “contribution” must be used to secure an “approved” disability insurance policy. Takes market crashes and “Wall Street” out of the equation and gives the banks cash to lend. After 10 years the “participant” could additionally feel free to invest in only an S&P 500 quality security. After 20 years gold & commodities could enter the picture. No withdrawels either, before age 60. He dies? Think of his happy children, spouse, church, etc.
          Or you could write no rules and assume the pud had a mind of his own and get the fuck out of his life.

          1. Harvardnot: Your scheme is very conservative and wouldn’t return anything better than SS does (which is about 2% over inflation).

            Your purported advantage is that if someone died early, their heirs would hit the lottery, rather than the money benefiting the taxpayers in general as it does under SS. I actually think the latter is preferable.

            1. Of course you do because you suckle at the government teat and think they are all knowing and all powerful. Just a little news flash: people are still fucking up their lives even with the safety nets the feds have in place.

              Oh, and if Harvardnot’s suggestion wouldn’t return anything better but isn’t worse, then that means that YOUR plan is pretty shitty.

            2. Harvardnot: Your scheme is very conservative and wouldn’t return anything better than SS does (which is about 2% over inflation).

              You read well, you just can’t figure. My calculations seem to indicate, given any historical 45 year working history (age 20 – 65), the returns generated by my “scheme” would generate participant retirement returns at 1.7 times those generated by SS, assuming death at age 85. The added benefit is an actual disability plan, at no public cost. If you think those returns are too generous, and are happy mandating health insurance, require the participants to carry a catastrophic health plan too, then we can both celebrate the much needed demise of Medicaid. Of course this will strangle the government of 15% of all the wages paid to Americans and deprive it making much mischief, but one must take the bitter with the sweet…. even a liberal.

            3. I think he was mainly trying to stress his last sentence.. that he would prefer the government accept that the “pud” has a mind of their own and stay out of it altogether.

    2. The mating call of the young progressive: Boosh! Boosh! Booooosh!

    3. Bush’s system was a half-assed attempt at doing it better, so ignore that.

      But how does it rob her? You wouldnt HAVE to invest in the market, invest in CDs instead.

      1. You can bet there would be all kinds of “instruments” being sold to people that don’t have any idea what they’re doing and we would end up having to support them after their little bit of SS has been pilfered.

        Fannie Mae and Freddie Mac?
        US Saving Bonds?

    4. don’t particularly like social programs but this one protects me from having to cough up more money for my neighbor’s destitute granny.

      You are delusuional. Social security forces you to cough up money for your neighbor’s granny and millionaires like Warren Buffett.

    5. Don’t like social security?

      Me neither.

      Don’t like the idea of mandatory “privatized” social security?

      Me neither.

      The answer is granny should take care of herself. Perhaps with some form of extreme minimal means tested safety net. Or euthanasia.

  7. Real privatization of social security would be great. It’s not going to happen. What will happen is having all future payments handed over to Goldman Sachs or other Wall Street bailout billionaires who will promptly invest it all in something they know is going to crash just so they can bet against it.

    1. Or perhaps with real privatization, you will keep your money and decide how you want to save for your retirement year should you choose to retire.

      1. That would be real privatization. I am not naive enough to believe that Wall Street’s lobbyists and bought and paid for politicians would let such an opportunity go by. Of course the money would have to be directed to “approved” investments “for the people’s own financial safety”.

    2. Or it would be like IRAs and you could stay out of the stock market if you wish.

      1. That would be real privatization. I am not naive enough to believe that Wall Street’s lobbyists and bought and paid for politicians would let such an opportunity go by. Of course the money would have to be directed to “approved” investments “for the people’s own financial safety”.

    3. No it won’t crash just, slowly bleed for 3 generations.

    4. Does real privatization mean the same thing as keeping my money and deciding whether or not I invest anything at all?

      Because I call that freedom.

  8. But, but, but these programs are popular!

    Doesn’t that mean they’re good?

    1. About as good as Transformers 2: Revenge of the Lowest Common Denominator.

  9. There are a lot of idiots in this thread.

    1. Which makes this thread unique how?

    2. They’re called average Americans.
      For citation see Obama wins Presidency!

  10. It’s not too hard to see how this is going to turn out: the politicians coming to us with a sorrowful “this is gonna hurt me more than it’s gonna hurt you” face on, saying that gee, it would be just so irresponsible to cut government spending, so there’s nothing left but raising taxes, er, I mean enhancing revenues.

  11. An open letter to NOW:

    Your recent attempts to villify Alan Simpson as ageist and (even more stupidly) sexist, because someone finally told the truth about our welfare state prompts this riddle:

    What is the difference between a cow and a NOW member? When you pull on a NOW member’s teats, they don’t shit down their legs…..I think.

    1. NOW members are not allowed to have tits.

      1. ….or want them!

    2. A cow actually produces something of value?

    3. What do you get when you put 50 Congressmen and 50 NOW members in the same room?

      100 people who don’t do dick.

      1. So you are leaving out Barney Frank!

        1. Yes. Yes I am.

          1. Barney Frank is a member of NOW?

  12. Perhaps if we all just changed our name to Nathan C. Vance, the honorable Mr Simpson wouldn’t mind us suckling so much. I also wonder where that act switches from and Act of G_d, to an expression of free will.

    1. What’s the “e” for???

  13. This controversy ain’t nothing compared to what is going to happen when we wake up to a failed treasury auction, and the Social Security Ponzi checks start bouncing. Can’t wait to see Barney Frank et al. doing a Bernie Madoff Perp walk (of course I am only dreaming that any of the theives in Congress will get that treatment, but it is a nice dream).

  14. So how much would it cost to just pay out what was paid in? I know it would cost more than the US has but how long would it take to get back even? This seems possible to me but I don’t know what the number look like in the real world.

    1. that’s because it’s one of those imaginary numbers like the square root of a negative number

      1. Thanks. Not an answer.

        Imaginary numbers are very useful in real science. Not so much in economics.

        1. Your leader seems to disagree:

          “The $150 billion in grants and loans made so far under the economic stimulus package have created or saved about 650,000 jobs, White House officials said Friday morning.”

  15. 1st, Technical point.

    Each person pays 6.2% of their income to SS, and their employer matches that with another 6.2%. This is the FICA line on your pay stub, although very few people show the employers contribution.

    Everyone also pays 1.45% for Medicare taxes, also matched by the employer. Together it means that we pay 7.65% of our wages for the two programs. Most people are unaware of how the two programs are taxed. Very few see that their employers (unless they are self employed) pay a matching amount.

    2nd., Some changes to the system are inevitable. I am 43 and expect to be working to a retirement age of 72 or 75 before I see a check (if).

    3rd, Some solutions,

    Raise retirement age,
    Limit SS increases to less then inflation, this can be tiered so that higher earners are affected more.

    And finally, when people reach the age of 65, the US government should send them a post card with the following question,

    Menthol Yes or No.

    Depending on the answer, that senior citizen should be given free cigs (say two cartons per month?) until his or her death.

    Remember a dead body is cheap, it needs no government support or medical care. But can still vote.

    1. “Limit SS increases to less then inflation, this can be tiered so that higher earners are affected more.” This is more redistributionist bull shit.

    2. Matching amounts…

      What a neat accounting prank to make it look like its not costing 12.4% and 2.9% respectively.

    3. You had better believe your employer counts its 7.65% as part of your compensation.

      That is, you get to pay the full 15.3%, no matter the syntactic sugar.

      1. It is part of your compensation, and therefore should be part of the denominator as well:

        15.3 / 107.65 = 14.2%

        See? It’s not that bad!

  16. Not that I necessarily disagree with his premise, but I wouldn’t call anyone in the Senate or Congress “self hating”. They have taken care of themselves with the utmost diligence.

    1. black man who hates black people
      IS TO Uncle Tom

      AS

      old man who hates old people
      IS TO_______________________

  17. The Dems and their allies have come up with a terrifying meme. They are pretending (or have talked themselves into) the position that nothing is wrong with social security because its all paid for. In the real world we know there is no ‘lock box’ and that surplus money has long been spent. They are arguing that since the Treasury owes SS the money, they just pay it and everybody is happy. But obviously that is just printing money. Somehow Krugman et al have brainwashed the left into believing that wont have diabolical consequences- that somehow that money we looted from the entitlements is free. How anyone can believe that is beyond me, but that idea is dangerous and insidious and (worst of all) comforting, and it needs to be challenged and defeated right away.

  18. SS is an annuity, not a transfer program. You pay the premium, and you get inflation adjusted income that you don’t run the risk of outliving.

    The only need is setting the premium correctly, namely by changing the retirement age to account for whatever the demographics are.

    As for transferring income from the poor to the rich, that’s because it’s a superior tax, namely a flat tax.

    All taxes ought to be flat taxes, far from that being an undesireable feature.

    That way voters finally have a stake in the taxes they vote for.

    1. Calling Social Security what it is…a tax, is part of the rhetorical battle here. So long as it is perceived as an annuity, or a pension, or anything else like that, it will not be a superior tax but an inferior benefit. Especially to the poor.

    2. you are full of shit

  19. No matter the rhetorical battle over Social Security, its “tits” up anyways. Economic events will overtake the hot air just as surely as they did with the housing market.

    In a perverse way, I kind of appreciate things like our new health-care mess and such, because it will speed up the day of reckoning when somewhere, somehow, that first Treasury check bounces, or we go all Mugabe with a Xerox to prevent that from technicall occuring.

    The perfect analogy for the U.S. debtsplosion is that of a unreformed drunkard in denial, you can only pick yourself up after you hit the bottom. This “one more bender, then I’ll clean up” schtick is just about done. In eerily similiar terms, when the Korean guy at the liquor store doesn’t take your checks anymore because they bounce, that’s the only way we’ll get off the sauce: When the funny foreigner stops giving it to us.

    The question isn’t if that happens but when. And that’s when we’ll figure out what kind of a drunkard we really are. Will we put the sauce down and think of our kids at that point (painful but necessary tax, fiscal, and government reform)? Or will we just move down a notch on the drinker’s ladder from real booze (actual credit) to raiding the wife’s medical cabinet for the nail polish remover and the Scope (the Xerox solution)?

    1. I believe our rulers (I refuse to call them leaders) will inflate the debt away.

      I figure by the time I get to retirement age a penny candy will cost a hundred bucks.

      1. Scope it is. Bottoms up.

      2. Another Heinlein analogy (from Number of the Beast this time)

        Inflation so bad that it forced them to knock two zeroes off the dollar in creating the new dollar.

        Where total_time_needed_to_fix_this_mess is 2 years + whatever_after_Obama_time_needed_to_fix_this_mess

        One can only hope and pray that the total time is less than time_until_we_go_tits_up (to use the cow analogy)

  20. Sounds like the young who have bought in want to blame the old who have bought in. Of course then two wrongs don’t make a right.
    But wait our government has taken and misused our money and resources to near destruction and no revolution from any of you so unless you have never used a public service you are in, stuck so to speak like the rest of us including the near dead greatest generation who let this all happen in the first place any suggestions about pulling the plug on them.
    I for one will not stand still for any community taking something from me by force and failing to honor the promise of a return, That community is made up of all of you unless of course you have become a revolutionary which would mean you either are in prison or are armed and roving out there with some independent constitution and not paying a damn thing to government, in fact probably hiding from them.

    1. We don’t want to blame the old who have bought in. At least the vast (thinking) majority of us don’t. We simply want the option to get out. As I said in an earlier comment, keep the money I paid you (Social Security taxes) so far, just stop taking more and let me out of the program. I don’t blame my grandparents and other retirees who paid in. I blame the government for forcing me to pay in.

  21. I am about to start collecting SS. It isn’t my only retirement funding but it makes the difference between being OK and poor.

    I wish I would have had a chance to pay my half and the employer’s half into an IRA, but that wasn’t an option. It was an offer I couldn’t refuse. I am owed, not only my money back, but a fair rate of return on it too. Had I invested the money in Fed Bonds, I would likely have a $Million or more which would be far preferable to the small check I am going to get from SS.

    Yes, all retirements should be funded exclusively through individual investment accounts, and defined benefit plans outlawed, but the question is, how do we get there from here without ruining the lives of a large segment of the population who worked and paid in for a lifetime under the current system? To glibly say, well it’s your fault for buying into a ponzi scheme, tough luck, may sound clever in a Libertarian coffee clatch, but is politically untenable.

    The people in the system never had a choice. The Democrats created this system for us. Investing in your own retirement wasn’t a choice, because the 15% that one should prudently invest for their retirement was taken and invested for them, and the majority didn’t have another spare 15% to invest wisely.

    Saying tough luck is just as extreme as saying we’ll just raise taxes to whatever it takes to make it work. Neither is an election winning proposition, and electoral results will depend upon coming up with a good solution to this mess.

    1. excellent. I am in the same situation.

    2. Unfortunately, for decade after decade people let this problem grow worse and worse, and steadily we’ve voted ourselves into this mess as a whole nation.

      Politically, the goal in the near future will not be who the political winners are versus the losers in budget battles (though they still play that game in D.C.) it will be how we all lose equally. There is no other way at this point.

      At 35 years of age, I am basically willing to write off SS as nothing more than a tax, not a benefit. But to keep being crushed by the taxes, there will be reduced benefits. But that will be the political hat trick: Figuring out a way for everyone to lose equally.

    3. I’d say, let’s cut it all off today (or ASAP) and whatever you paid you will get back. For example if you are 40 and you paid 150K into the bullshit, then you get 150K (inflation adjusted) back from the bullshit upon retirement. At 40 you still have 15-30 years left to work and for the rest of that time you are on your own. So save your shit. If you are 25 and have only dropped 30K into the bullshit, you will only get 30K back. If you are 66 and 11 months and have paid 600K into the bullshit you will get it back. Gradually, over another 50 -70 years the effects of the bullshit will have been washed from our collective system and people will have long adjusted to planning for a future instead of being dumbasses. Of course, this would require scaling back most military endeavors, scrapping our European healthcare aspirations, and firing a lot of worthless bureaucrats but sometimes you have to shed dead weight to rise back to the surface and breathe the sweet air of the non-aggression principle.

      And what happens if a lot of people are just irresponsible and blow their money on shit they don’t need? Then they die premature deaths rotting in the street. That’s what fucking happens when you buy a Mercedes Benz instead of Toyota when you only make 50-100K a year. Deal with it. Live within your means. Better yet, live BELOW your means. Eat tuna instead of crab, buy clothes from Wal-mart instead of Macy’s, and buy a crappy house instead of nice one. Just fucking deal with it. No one deserves a nice car, nice clothes, or a nice house let alone a non-starving-in-the-streets(patent pending) retirement. For some people, they can only get one of those and I would vote for the retirement above the other crap. And yes, I know I will probably be killed in the ensuing chaos/civil war encited by the very act of cutting off the “benefit” of SS. I’m counting on it.

      1. LMAO. Great post Drax!

      2. Then they die premature deaths rotting in the street

        It’s rare to see an honest libertarian.

        *bow*

        1. So being thrifty is something that should not be espoused? The only way to motivate people to be thrifty is give them potentially dire consequences if they aren’t. But you’re a de facto Keyensian and saving is a sin to you, so I digress.

      3. I would like to point out that where I live in Florida, I could afford a Mercedes on 75k a year (to split your amounts). I agree with many of your other statements, however. Except that you should get your money back. I agree with the moral SHOULD part of that, however, I don’t believe it’s practical. I, personally, would be happily willing to write off the 19 years (started working p/t at 16) of SS taxes if it meant I could be out of the system for good.

    4. For the record, I don’t blame you at all. SS/Medicare can be fixed relatively painlessly by raising eligibility age to 70 or so for anyone who is currently under age 55. Problem solved. The confounding thing is that so many of the 55+ year olds (who wouldn’t be affected by such a plan) get up in arms about it and threaten to vote out anyone who so much as suggests a fix to entitlements. I don’t know if it’s ignorance or pride
      (“raising the eligibility age will make me feel like I’m on welfare in the interim” ???) that causes that reaction, but those are the people who are to blame for the mess.

      1. … but those are the people who are to blame for the mess.

        Other than the idiot democrats who started the whole scheme, that is.

    5. You guys are all under the impression that what you paid in is ‘your money’ that you are due back. That’s a bill of goods, sorry. All the money we’ve paid in is a tax, just like medicaid or anything else, that was spent on other people as quickly as it came in. You might (probably) see some of it back, but make no mistake that is an outlay on a government ledger, and you are just another expense… no more no less. That expense will very likely be cut or eliminated as time goes by- it has to be, the money doesn’t exist. You’d do as well to expect a return on your income tax.

      1. ooohoohhoohhhh.. you mean the “return” I get from the government each year is really only my money anyway?

    6. I suggest you re-do your math, Old Guy. The rate of return for current (or nearly current) retirees on SS has been very similar to bonds, around inflation+2%. It’s bit less if you are high income and paid near the cap most of your life, and notably better than inflation+2% if you are poor.

      Btw, the returns for typical small investors in the markets have been attrocious.

      http://www.slaughter401k.com/w…..he-market/

  22. I Have to differ with your comment that SS is a income transfer from poor to rich. That is not true at all if a person contributes 10 times as much as another person, they will not get 10X as much, maybe 3X. SS is skewed toward the lower end and rightly so, as it is a combination safetynet as well as a modified Defined Benefit Pension Plan, combined with a disability plan.
    To tell people that even though by earning at the max, you now are too well-to-do to have any return is probly a political third rail but morally wrong.

    1. The fact that Social Security is a payroll tax – i.e. only comes off of paychecks, not all income checks, precludes anybody from putting 10x the money into Social Security than the next guy. What’s the cutoff this year? $90,000 or something?

      The evolution over time of “soak the rich” progressive tax schemes on income alone but essentially a different, flat tax on investment income, plus a bizarrely un-progressive income cutoff for the benefit programs has led to the rich essentially now paying for all Federal discretionary spending, and bankrupted bennefit programs for the little guy. Ah, the best of both worlds…

    2. The progressivity is beside the point he was making Paul.

      The transfer is from poor people who are WORKING NOW to fund the retirements of people who are RETIRED NOW.

  23. 75 years of Social Security deductions and it has all been spent or “borrowed” from the Federal “Gummint”, which cannot manage it’s way out of a paper bag. Had this money been invested in a low-earning account and never touched by the crooked idiots who “administer” it there would be no problem. Halt federal salaries, lessen pay for elected officials and put THEM (Politicians and federal employees) on Social Security, and cut the shit out of all the damned pork!

    1. right.

  24. First, it’s normal for people to be relatively poor when young. And that’s certainly better than to be poor when old.

    Second, a Ponzi scheme is designed to blow up from the beginning. SS isn’t a Ponzi scheme, it’s just a forced savings plan designed to help the lower paid citizens by paying them more than they contributed, to assure they’re not out on the street in old age. It’s a *social security system*.

    If you look at your SS statement, you’ll see it doesn’t pay out much if you didn’t earn much. But you can get along, especially if you keep working (and contributing) until you are 70. And, to have a comfortable retirement, you have to have piled up savings outside of SS.

    If it’s out of balance, either increase the payin rate, or raise the retirement age.

    The problem with the latter is, who is hiring 65 year olds at a living wage? You’re fine so long as you don’t get riffed (and you will be), but then what? Greeter at Wal-Mart, with 200 applicants for the job?

    1. Why is it better to have a lower income when you are trying to get educated or gain a skill, getting married, buy a house, having kids, sending them to college in order to send money to people that have already done that, generally own their homes, kids are grown, and have greater (statistically) the highest strata of wealth?

      Now indeed, some retirees are destitute and many would be without social security. Fine, we can balance SS instantly by means testing. That’s GOING to happen, we might as well start sooner to make it hurt less later.

      1. I said “normal”. And it’s better to be a poor student (teaches you thrift) than a poor senior. By the time you start a family, your income and, hopefully, net worth have started to climb. If not, maybe you shouldn’t be doing that.

        Typically, people’s net worth peaks around 65. (Though I’m sure you’re aware that the boomers haven’t saved much, until recently.) After they retire or get riffed, they start to chew though that pretty fast.

        Do you really believe that the retiring boomers have their houses paid for? I don’t think so. Maybe their parents did. Boomers moved too often, and mortgaged up each time.

        Means testing? There aren’t enough people making over, say, 60K in retirement to make much of a difference. If you go lower, you will remove a third of a couple’s income (that they had planned and paid for) through “means testing”.

        I’m getting out much less than I put in. I figure that’s my contribution to the social security system – to help seniors who didn’t make much during their careers.

        Some of the people here sound pretty greedy – totally privatise the system so they get theirs. What about the bank teller, receptionist, or carpenter who hasn’t managed to put away $300K for retirement? Most people like that have nothing at all.

        During the market crash, did SS say, sorry, everyone’s benefits are cut 40%? No. How’s your 401K doing? How much do you have in it, anyway?

        SS can easily be fixed. Just raise the retirement age and increase the payroll tax a bit. And keep the inflation escalators in line with income, not cost of living. Most everybody’s getting a reduction in living standard, thanks to our decision to fair trade personal service income.

        And pass a law, right now, that any SS surplus can’t be loaned out in return for T bonds or “IOU”s. It’s got to be in T bills, to keep the kelptocrats from further shifting the burden out to our grandchildren.

        1. It’s not greed. It’s self preservation. Why didn’t your bank teller put away money to savings. I can tell you why I haven’t: I made bad descisions with credit when I was in my early 20’s and my job barely covers my bills and food. I will probably work as an architect until I die. You do not have the right to retire. And you definitely don’t have the right to take my money because you kept voting for the bums in Washington (I’ve only been able to vote for 12 years so someone who’s been there since 1984 isn’t on me).

          1. Most people (take a poll!) believe that society should provide safety nets. The argument is whether they should be nets or guilded nests. SS is the former, if you compare to government and union pensions.

            If you had been given the chance to opt out of SS, would you have saved or spent the money? And if you had saved it, how would you have felt when 40% evaporated in 2008?

            There’s no right to retire. But, there’s also no right to a job when you get old (or any time). When you get to be 65, no one wants you. As an architect, you may be able to get through the following 30 years, but improvident hourly workers have a real problem. Society would end up covering them, one way or the other. And we are all part of society, I hope.

            Save a copy of this thread and re-read it when you are seventy-five.

            1. Most people are cows and expect someone else to take care of them but don’t think about who’s taking care of the person taking care of them.

              If, and that’s a big if, I had been given the choice ten years ago to opt out of SS, you’re darn right I would have. Would I have saved that money? Probably not, but I was 20 and stupid. I can only dream about what I would do then, but I know what my wife and I would do now: we would use that money to pay down our debt and keep our belts tight like they have been.

              If I had saved it in a bank, it wouldn’t have lost 40%. If you’re playing the stock market, you’re not exactly saving. I would never tell anybody to place all of their faith and retirement in the stock market seeing as it’s practically a game of chance. However, they should have the choice to do that as they see fit.

  25. Social Security is paid for and the
    Feds have stolen billions from the
    Trust Fund. I have paid into SS
    for 47 years and my employers(only
    3) have matched it. Now these
    morons want to cut my benefits. I
    have earned it and darn well expect
    to get it. I can not speak for
    Medicare. It may be the “cash cow”
    but my benefits were promised, paid
    for and will be delivered or you
    will see a real revolution in America.
    Try cutting some of the outrageous
    spending on defense or the GM
    Bail out, etc., etc.

    1. This country could use a bunch of armed pissed off elderly people randomly blowing young people away. Nothing like a bullshit war to “get us out of a recession/depression”.

        1. Hell yeah. But we know their weakness. Old Country Buffet.

    2. Its going to be a generational war.

      When people like this fellow start demanding that they get back what they “paid in” to SS (and it will be a chorus that way for Medicare as well) as it breaks down, they’re going to find out they’re like the ladies in Fight Club who were unwittingly buying their own fat asses back as soap for decades.

      1. Drax,
        You got it right brother I paid
        it, as did my employer and I damn
        well am going to get it. I was given
        no option and the gov’t has no
        option in returning to me what they
        took, with the promise to always be
        there. Just remember my friend,
        the “elderly people” are the ones
        that vote and we’ll vote those bums
        out of office. If the Dems were
        smart they would pound the GOP with
        this issue this Fall and would
        retain Congress, even though I think
        that would be bad for America

        1. Did not mean to offend you Steve. You are right, and at least you seem to acknowledge you have been shafted. The trick will be in making sure you are satisfied while not screwing over my children.

        2. Votes will not matter when Treasury checks bounce, or when China elects not to show up at Treasury auctions anymore.

          Like I said in an earlier post, failure to deal with these programs does not mean they won’t eventually deal with it themselves – by their own failings – eventually. They will, as sure as any unsound financial entity mails-it-in.

          If you take the defined bennie programs, interest payments on splurges of yore, and add the military budget (+wars) in there, not much left in the cupboard of government spending. When you expand the interest payments and the natural progression of the defined bennie programs over the next fifteen years, no more military left either. Tits up no matter which way you vote there.

          The only fixes is some of us lose totally, or we all lose equally. But it will be about the loss and not the gain, something progressives are going to have a very hard time rationalizing over the next decade. It won’t be about throwing up some new edifice of government, but about how to tear down the ones that don’t work without crushing everyone huddled under it.

      2. This column get linked to the old folks’ home, or are the Reason staff trying on their “old people” sock-puppets for a change? I’ve rarely read so many comments where you could almost hear the dentures sucking as they typed.

        For those people who think that cutting discretionary spending—“the pork”—will get the U.S. out of this, go look at a pie chart of Gov’t spending sometime. The big slices are SS, Medicare/Medicaid, Defense, and Interest. (Look for Interest to get even more obnoxious in the future.) Go see this: http://en.wikipedia.org/wiki/F…..egory2.png for example. (How they have the balls to segregate War on Terror from DoD spending takes more insight than I have.)

        Everything else is icing on the shit cake that is the budget.

        Serious question for the robc’s, johnny longtorso’s, and others who know their way around a balance sheet: how much $ would it take, right now, to pay back all SS contributions to all surviving people who paid in? No interest—just the expenditures. And screw the heirs of the dead contributors.

        I’m ballpark guessing it’s in the ~$12 trillion range (150 million workers, average years contributed 20, average contribution per year ~11.5% of 35k–>4k). Pretty sure the Gov’t doesn’t have 12 trillion lying around.

        I personally think the debt will be inflated away, along with means-testing SS benefits, and a gradual escalation of eligibility age. Still won’t matter for the U.S. though if Medicare is left alone…

  26. The problem is NOBODY wants to or is hiring anyone over 65. Even 55. The system is supposed to provide security in old age – the ability to provide for yourself.

    Why not reduce the 1 trillion dollar annual defense spending, increase the SS income cap substantially to get more money in the system and tweak the actuarial work?

    OR would everyone here spit on the old and say “it’s too damn bad – your fault you picked a bad portfolio or didn’t invest enough” and let them all starve to death?

    It’s not like these people are getting massive social security checks. My grandmother gets enough to share an apartment and eat that’s about it.

  27. Uh-uh, congress wouldn’t have voted for this if it wasn’t POPULAR among voters (ie old people). We’ve all known for years that this time was coming, but voters wouldn’t let the Ponzi scheme disappear until “I get mine, too”.

    I can’t afford your winter home in Destin, and it’s just plain shitty to use my money and my kids’ future income to pay for your house in an “active adult”* community.

    *You know, where it’s legal to discriminate against people with children.

  28. Disclaimer: I am 67, receive SS and will not live long enough to recover taxes contributed to same.

    My solution: Discontinue SS as of a date certain – say 1/1/12. The government records contain data as to each individuals payments. Offer the people less than 40 years old a full refund of their taxes paid, with option to invest in 401K or any other use of their choice. In exchange, there will be no government support for disability, survivors benefit or retirement.

    For those between ages of 40 and entry into SS, give option of same as under 40 above or entry into SS at minimum current benefit with no inflation adder.

    For those currently enrolled in SS, reduce all to minimum benefit level with no income taxation and CPI inflation adder only.

    This would be funded by the current $2.5 Trillion “trust fund” that has been “borrowed” by the Congress for other purposes, and additional treasury debt as and if required.

    Hopefully, this will mitigate the grievances of the younger/future generations. Perhaps with this or similar solutions, the youngsters might reflect on the advantages they have had (education, roads, defense, etc., etc.) that were funded through taxes paid by us greedy seniors.

    1. There is no trust fund. The Treasury would have to print trillions of dollars, which would instantly collapse the dollar.

      We need to understand this- there is NOTHING behind social security. Folks, we need to stop thinking of it that way. Its not a retirement account. It is a tax. Its gone.

      1. Mark,

        You are partially correct, but the fact remains that the United States Government has issued Treasury Debt Instruments in the amounts previously borrowed and issues more annually to cover interest on said debt. It is certainly true that the Government can default on those promissory obligations, but to do so will in fact call into question the value of any such promises to other debt holders. There is as much behind this debt as any other, including the instruments held by the Chinese and others. What would you have them do? Write it off? Ignore it? What?

        1. Its funny money… certainly funnier than what we owe the Chinese. We need to restructure social security immediately to lower its outlays and raise its takings. THAT’S what creditors will pay attention to, whether we can be solvent- not whether the treasury department ‘restructures’ the pretend debt it owes social security. Think about it, the government could theoretically cancel SS tomorrow, and all that liability would disappear. Why not? What collateral do the American people have? What court can they sue for damages? How can they change the credit rating on future ‘borrowing’? You can’t equate an entitlement with external debt. Its like credit card debt versus putting 20 dollars a week in the cookie jar. Can the cookie jar put a lean on you if you borrow and default, or change the arrangement?

  29. Oddly enough, I expect to recieve my social security checks in 35 or 50 years.

    I just don’t expect them to worth anything: better to wipe you ass with them ’cause they won’t buy as much as a roll of TP.

    Because barring a sudden national attack of sanity the actual response to the combination of program in deficit and no actual money in the “trust fund” will be to devalue the currency (probably by simply printing money) so that the “obligations” can be met.

    Problem solved. As long as you didn’t care to have a working economy.

    OTOH I don’t think much of the “we paid in we’re entitled” argument. Certainly the current crop of oldsters didn’t start the insanity, but they were ruthless in punishing any politician who suggested the system was broken. Not that the current crop of youngsters is showing anymore sense or responsibility.

  30. Libertarians would rather contemplate their ideological navels than discuss issues.

    The Baby Boomer Generation, once the largest group of contributors into the Social Security Trust Fund, is now becoming the largest group of recipients of the Social Security Trust Fund.

    No one volunteered to sign up for Social Security. You were required by law to contribute.

    I supported a gradual phasing out of Social Security in lieu of private retirement accounts, but it’s too late in the game to start changing the rules on benefits.

    Too bad the unReasonables at Reason don’t vent as much about Military spending and Immigration reform as they do about Social Security.

    Jacob Sullum is just another boring contributor who fancies himself as a serious thinker.

    1. Why do you support private accounts? They have proven to be an epic failure.

      http://www.slaughter401k.com/w…..he-market/

      The idea that average people can compete with Goldman Sachs and the gang is idiotic at first glance, and the data only confirms that the little guys are getting annihilated.

      SS works just fine. It simply transfers ~5% of the income of current workers to current retirees. It is not a “Ponzi scheme” and can work just fine with no population growth, or even income growth.

      Current promises are slightly out of line with future taxes, and one or both will have to be adjusted slightly. It’s an easily solvable problem.

      1. …which is why all private investments should be banned.

      2. “It is not a “Ponzi scheme” and can work just fine with no population growth, or even income growth”

        Immaterial, what it CANT work with is a vast decline in the number of contributors vs the number of recipients. It doesn’t take an MBA to figure that one out.

        And youre foolishly judging independent accounts over a short time frame. Everyone knows its a long game not a short. And if you’re trying to compete with investment houses instead of a diversified portfolio you deserve to lose.

        1. Mark, SS works in a steady state population with no income growth. Tax 5% from the workers, give it to the retirees.

          Assume the average worker works for forty years, and therefore on average pays in 200% of his income. Since the average person collects for about 10 years, even with no population growth or income growth, SS can pay out 20% of retirees’ incomes indefinitely. Assuming real-world growth population and income projections, that is more like 35% or so.

          The only way SS would fail to provide the basics to everyone would be under a drastic population decline scenario. But under that scenario, the markets would be suffering the same problems due a lack of customers, workers, and corresponding profits.

          And you clearly did not read the article I linked: it was about mutual fund investors, not day traders. People are getting hammered because after their accounts take a 50% beating, they head for the hills and miss most of the rebounds. This isn’t irrationality: unlike the big banks, who are playing with other peoples’ money and can double down after busts, little folk like you and me are playing with our rent and food money and are forced by necessity to be cautious after a big loss.

          1. “Mark, SS works in a steady state population with no income growth.”

            Chad, that is demonstrably wrong. Simple experiment- drop the retirement age to 40. Steady population, no income growth, does your model work? Of course not.

            Population is immaterial. Contributors vs consumers is what matters, and if you would look at the demographics we are on the cusp of a HUGE shift in age strata. Which means the population remains steady by the working age folk as a percentage of them drops precipitously. Is that really difficult to see?

    2. You must be new here. They usually have at least one article a week about military or other wasteful government spending and immigration.

      And most people alive today didn’t volunteer for social security. But you’re being intellectually dishonest if you’re trying to claim that those same baby boomers, who want what they “paid in”, weren’t screaming bloody murder if anyone mentioned shutting the program down 30 years ago. Not to mention the fact that those same people are the ones in Washington right now fucking up the rest of the country.

  31. Oh, where to begin:

    It is a pay-as-you-go system of transfer payments that takes money from relatively poor workers and gives it to relatively affluent retirees

    The average retiree brings in $28k a year, $13k of which is from SS.

    http://www.ehow.com/about_5132…..tates.html

    http://ssa-custhelp.ssa.gov/ap…..ed-worker.

    Oh, how affluent these people are!

    1. …and oh, how I hate affluent people.

      1. “The average retiree brings in $28k a year, $13k of which is from SS.”

        Hence the ‘retirement’ moniker- by definition your income declines. That isn’t the question. What is the wealth they’ve accumulated? 28 grand a year isn’t bad when you own your own house and don’t have kids to support… or a retirement to plan for! Add that on top of your savings and you can sure as hell live a lot better than the guy paying 50% in taxes with a mortgage, cars, and kids… and retirement to save for.

        Check these http://research.stlouisfed.org…..9707jw.pdf statistics
        In 1992, the highest median net worth age bracket was 55-64 with $110, the second highest was 65-74 with 96k, the third highest was 75+ with 87K. All the rest were younger than 55 and had significantly lower not worth.

        1. Mark: where to begin

          First, I am an affluent young single guy (high five figure salary). My all-in net tax rate (including everything from payroll taxes to the gasoline tax) is about 35%. Anyone paying anything near 50% is bleeping rich.

          The general rule of thumb is that you need 80% of your pre-retirement income after retirement, so yes, our seniors are livin’ it up like those younger folks making $35k. Without SS, it would be around $20k. Remember, those are averges…most people fall well below the average.

          Net worths don’t mean diddly. You can’t eat your house.

          1. That’s just income. Add in all other taxes, like sales, gas, property and so on and you’ll get pretty close to 50% in several states. Then add in OASDI and FICA. I got pretty close starting out in California in the mid-5 figures.

            And you can most definitely reverse-mortgage your house and use that money to buy things you can eat.

            1. No, Amakudari. It is my “all in” tax rate, including my best estimates of the sales, property (part of my rent), gasoline, and excise taxes. Basically, its 12% federal, 1.5% local, and 2.5% state income taxes, and 12% FICA. Sales and property taxes come to about 3% each. Excise and fuel taxes are about 1% total.

              Were you counting your un-taxed benefits as part of your income, btw? Your employer-provided health insurance, 401k match or pension, disability and life insurance, etc are all income.

  32. “Net worths don’t mean diddly. You can’t eat your house.”

    That’s the stupidest thing i’ve ever heard. How can you judge your necessary income based on your pre-retirement income? If i made a trillion dollars when i was 30 and took a job baggin groceries for lulz when i turn 60, i’d need an $19,000 a year income to survive? Wealth is everything. You certainly can’t eat your house, but what’s YOUR number one monthly expense? Mortgage maybe? Then a car? College fund? Retirement fund? I bet your paying more for your health insurance than medicare premiums. Not only are you ignoring net wealth, your also ignoring expenses. What the hell kind of accounting is that?

    1. Mike, yes, your expenses go down when you retire, but not that much. People making $20k (which would be the average, if we nuked SS) ARE NOT AFFLUENT. Not even remotely. Not even sortof kindof debately. They have enough to keep the lights on, eat, get around, and give the grandkids $100 for Christmas. That’s pretty much it. What fantasy world are you living in?

      1. Not that much?! Thats ridiculous. Secondly- you keep talking about income, which isn’t wealth. People with hundreds of thousands of dollars in the bank and 20K worth of income (because they don’t work after all) ARE NOT POOR.

        Finally- I’m not advocating nuking SS. I’m advocating means testing it so those people you are talking about that really don’t have much wealth can survive.

        “They have enough to keep the lights on, eat, get around, and give the grandkids $100 for Christmas. That’s pretty much it.”

        Ooook. There are a ton of younger people in the same position. Why are you taking money from them so the older people can live on the beach and buy their grandkids motor bikes? How does that make any sense?

  33. Here’s the fix: stop all other government programs. Pay back everyone who paid into SS, including retirees who haven’t gotten their full payback. Then STOP. Stop taxing and stop paying out. The remaining tax money we all pay would go for paying off that debt, then the treasury debt then STOP. The only legitimate functions of government are defense, local police and courts. All the rest is gravy.

    1. And your plan for the legions of poor, starving eldery that your policy would create is???

      1. Ice flows.

      2. The historical solution to protect against poverty in old age is to have children.

        In the days of yore, people could also prepare for retirement by setting
        aside a portion of their income during their working years to be used later- a process known as “saving.”

        However, thanks to big-government dickheads, many people are now dependent on the government to pay back the money which was stolen from them.

  34. At some point we will have to “suggest” that people “voluntarily” die by a certain age so the MediCare can continue to operate.

    It’s the only fair thing.

  35. This article is awesome for all the working professionals as well students working on some sorts of projects. Thanks for posting!

  36. Wjo cares about the AARP , union bosses and the ACLU. All have lost credibility. AARP is just an Insurance agent and spend millions advertising all their various insurance plans and the rest for administration. They have lost their main purpose of speaking for the elderly and have become useless to them. Just another pawn for Obamamaniacs as are the others.

  37. The original purpose of AARP was to sell insurance.

    AARP is founded by the marketing people at Colonial Penn Insurance as a non-profit front to endorse their insurance.

    Later, AARP broke free and evolved into a political force, but they have always profited from the endorsements of various lines on insurance marketed to old people.

  38. I think it would be better if we all had our seperate accounts so the money that we put in we will get back when we retire.

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