Quote:Quote:1. On its own, private accounts do nothing to address the fundamental actuarial problem with the traditional Social Security system, which is that by 2042 or so, the traditional system will only be able to afford to pay out 73 percent of promised benefits. Private accounts do *nothing* to change this.
Wrong.
No, my statement is accurate.
Private accounts have nothing to do with shoring up traditional Social Security, at least not for the next forty or fifty years (when many of us here will already be receiving it, and a few of us might be dead).
Quote:Private accounts that are CHOSEN in turn mean that the person chosing them does not get their full benefit from the traditional system, opting instead to use their private account to suplement that which they aren't collecting. As a result people are taking less out of the system thus leaving that money for people who choose to stay in the standard system.
I'm pretty sure its one to one. If the employer/employee contribution is 12 percent, a four percent reduction would mean a reduction of a third -- in both contributions and benefits. Social Security isn't going to profit on this transaction.
All Bush is proposing, essentially, is to borrow money and give people the chance to try to invest their way past what it will cost to borrow the money, plus interest. (The rate of inflation plus three percent).
We're talking trillions of dollars in new debt. This doesn't concern you?
Quote:Quote:Bush has also ruled out any sort of moderate tax increase (e.g., increase the amount of pay subject to the payroll tax, now about $90,000) to deal with this problem. This leaves... cuts, in some form, to the traditional system. Possibilities: changes to the formula by which benefits increase with inflation or increasing the retirement age, or somethnig else.
Amazing the definitive statements you can make with so few details being known. :rolleyes:
Wrong again. It doesn't simply leave cuts to the traditional system.
If tax hikes are off the table and private accounts do nothing to shore up the system, do you have another option?
And keep in mind, I threw in tinkering with the retirement age because it is, in one sense, a "cut."
Quote:Quote:That won't be easy without a certain degree of financial risk. And what happens to the people who fall short and fall into poverty?
Oh no!!!! Not risk!!!! :eek: You don't want the risk? You don't opt for the private account. It's that simple.
No, seriously. What are we going to do with this new cohort of poor seniors? Tell 'em "tough?" Let them freeze to death in their unheated homes? Let 'em eat cat food?
If we create a welfare program to handle the social damage -- or if we can assume that existing programs will be drawn on to a greater extent -- that's a cost, and it needs to be considered as part of any "reform" plan.
It doesn't appear Bush is considering the possibility at all.
Quote:It never ceases to amaze me liberal mindset that says we need government to insure our well being and financial future. At what point in time did hard work and personal responsibility give way to the nanny state?
First of all, Social Security is entirely about work. If one doesn't work, one doesn't get Social Security. Period.
Second, Social Security is just one part of securing a financial future.
There are three elements to a well-planned retirement: Social Security, a private employer-based pension and whatever individuals are able to do on their own in terms of IRAs or other investments.
Social Security ensures a basic minimum, no matter what happens with these other two elements of a strategy. And with employers increasingly limiting their pension obligations, Social Security may grow in importance over the next few decades.
Quote:Quote:One final thought: I am under the impression that the federal Thift Savings Plan is in addition to Social Security and not a replacement for Social Security. Does anyone know for certain?
It's in addition to, not replacement for.
Democrats have made it clear they don't oppose the concept of a Thrift Savings Plan. They just would want it as an add on to Social Security, not a replacement for it.
And since it is in addition to Social Security, wasn't Bush a bit intellectually dishonest by discussing Thrift Savings Plans in the way he did? Because it isn't like he's going to deliver it to Americans as an add on. It comes with a price: A cut in Social Security.