Social Security: The Sequel

There are a lot of movies whose sequels should not have been made. The first installment sucked bad enough.

The pay-as-you-go Social Security system is another such performance for which a sequel would be inadvisable to say the least.

A lot of Conservatives are concerned that a Democratic Trifecta may lead to a level of catastrophic creativity not seen since The New Deal.

Unfortunately, we don’t even have to wait for the election to see some of the most obtuse products of this alliance.

If you have a 401(k) or equivalent retirement plan, you’ve probably been watching nervously the past few weeks as your nest egg has shrunken owing to the current turmoil in the markets.

Well, it could be worse. But don’t take heart, for what we mean is it could get worse. The market turmoil has some politicians on Capitol Hill eyeing the end of the 401(k) as we know it.

We have a Social Security system that is currently running on fumes, backed by a trust fund containing a treasure trove of I.O.U.s.

We have a generation of taxpayers that hold little hope of ever recouping their contributions, many (most?) of which aren’t saving enough to make up for it. What is the solution?

Take away the tax benefits of saving into a 401k including the incentive the employer has to match contributions.

In exchange for what?

Another Social Security benefit. Guaranteed by whom?

The U.S. Government.

The same government that has pissed away $10,000,000,000,000 (and counting).

What would the money be invested in?

Special “Government Bonds” that would pay inflation plus three percent. Forfeit a bouquet of shares in a carefully arranged and assorted arrangement of global enterprises that have averaged between 8 and 12 percent per year over periods of time that easily fit twice within the average career span. Trade them for a share of the magnificent crater that forty years of tax-once, spend-thrice government corruption and mismanagement has left for us and the next twenty generations.

Sounds swell.

I’ll take my chances with the stock market, thank you.

Democrats think Americans are too stupid to save for retirement. The sad thing is, they might be right. Most don’t save enough. We know that.

As usual, the Democrats think it’s the government’s job to confiscate the hard-earned assets of the self-reliant, the prudent, and the hard-working and dole it out to the spendthrifts, the lazy, the leeches who can’t or won’t do anything for themselves…but vote.

17 thoughts on “Social Security: The Sequel

  1. Democrats think Americans are too stupid to save for retirement-

    JR – a rather callous comment, but then you went on to agree. The point is, the evidence shows conclusively that Americans DON’T save for retiremet. Deciding to label that as thinking they are ‘stupid’ is your wording only. I would say, they, except for a brief period from 1947 – 1977, have never really made enough, on average, to save effectively for retirement. Social Security is/was a way to ‘rig the system’ by baking retirement funding into the everyday economic model through putting it into both the cost and benefit stream for companies and employees respectively. Put in a shorter way, retirement taxation at a low rate simply creates a higher price offset by a higher artificial before tax wage, it’s a zero sum game.

    That said – you’re absolutely right that we have HUGE debt looming. The solution, however, isn’t to continue to decrease taxes on those who benefit from this economy – in favor of putting it on those who don’t (long term). Further, 80% of that debt came in a 16 year period of supposed ‘fiscal conservative’ control of the Presidency. There are very very hard choices coming, no doubt, among the most easy to make, which you will disagree with most vehemently, is to have the health system nationalized, and taking the difference in current funding cost, and put it to debt and retirement funding. We spend 18% of GDP on healthcare, our next highest peer spends 11%. If we took 7% of GDP and spent it on debt retirement and funding Soc. Security, we would no longer have a debt. It will take taxing business to do so, and probably lead to devaluation of the currency to some degree as business’ ramp up prices to cover this – but it’s really no more than they currently commit to benefits/healthcare expense now.

    Frankly, that’s just throwing ideas out there, poke fun as you like, but if JR – you have a better idea, I’m all ears.

  2. Actually, over 80% of the true national debt comes from two programs initiated by Democrats. If you use legal (for the rest of us) accounting methods, Socialist Insecurity has a ten trillion dollar unfunded liability, and Mediscare has a forty trillion dollar unfunded liability.

    Moreover, the failure to save by most Americans also comes from these programs (which tell people they don’t need to save for retirement, effectively) and also from another Democratic initiative, the Federal Reserve. This unconstitutional bank has kept inflation high (no deflation has been seen since 1954) and interest rates low, and hence they have inflicted a shift in the time value of money from saving to spending.

    And you would trust the party that has done this damage with more of your retirement account? Not I.

  3. You have to understand what is is to be a Democrat to understand their point of view.

    If your worldview was twisted by a continual close contact with dim-wits *coff*peevee*coff*, you would probably believe that everyone was a dim-wit too.

    SSI is the playing out of Charles Ponzi’s wildest dreams. Anyone that is within 20 years of retirement, and is counting on seeing one-thin-dime of their lifetimes “investment” into SSI probably votes a straight Democrat ticket.

  4. SSI takes 12.4% percent of every worker’s dollar from the first but he or she makes until he or she reaches about $99k. Invest that in Wall St. or a simple annuity & most people would retire with enough to see them living in comfort after the age of 65.
    Instead that 12.4% goes into government coffers & is spent immediately on what politicians want to spend it on, which is whatever will enhance their re-election prospects.

    The economic impact of SS on wages would be the same for the worker & employer if the $ were put into a 401K rather than junk promises from greedy, stupid politicians. If you’re a socialist SS does two things that you like: It gives the government more money and it forces the workers into a collective enterprise.

    80% of that debt came in a 16 year period of supposed ‘fiscal conservative’ control of the Presidency.

    Peev, you may be the only one in the entire world who supposed that Bush cares about ‘fiscal conservatism’.

  5. No Terry, I grasped he didn’t, it’s just he ran as ‘one of you’ – I knew, like most business conservatives, what he meant was, ‘raid the treasury on behalf of his friends’ as Paul O’Neill charactarized Bush’s administration.

    BTW – Terry, investment in the market would have netted a loss for SS over the past 18 years, when adjusted for inflation. I find it difficult to assume the next 18 years are going to be markedly better.

    Bike B – Social Security was a program defended by Dwight Eisenhower, Dick Nixon and Ronald Reagan. In fact, the largest tax increase in history, outside GHWB increase in 1991 was Reagan’s SS increase. It is the third rail of american politics – everyone (including republicans) defends it. The debt present to payoff those IOU’s is one shared equally by both parties. Further, many of the IOU’s were borrowing done during the administrations of Reagan and Bush – thus your statement is fatuous – of the roughly 30 Trillion or so owed, a great deal comes from the IOU and interest owed against those IOU’s taken out during those two administrations. You may want to include that in your ‘accounting principal’ argument. The programs were started during a time of great need – and their continuance has no reasonable argument against it other than debt. Americans STILL don’t save sufficiently, period.

  6. Oh, Swift, you clearly show you’re as much of an unhelpful, polemic tool here as you do everywhere else. Good on ya’ for consistency… no really.

    I made a suggestion – you are free to counter it – but simple invective is useless prattle, if that.

    My suggestoin is to nationalize healthcare, and take the difference to payoff the debt, including social security. Privatization will not work, and has been proved to not work by the ample evidence of conduct prior to SS’s inception. If you can provide a reasoned argument against that outside the ‘no choice healthcare’ meme’, or even a reasonable alternative that requires the rich to pay their fair share in equal measure to how their wages/compensation has grown over the past 30 years, I’m heppy to hear it. Hell, I’m happy to hear it if you can even provide ANYTHING that doesn’t result in a massive tax increase on the middle class. If you can only provide invective, go scream at people on Hennepin or something, because you seem, at this point, to have taken up the same role in this community as the tin-foil bag-lady shouting about conspiracies while she rumages through other people’s cast-offs.

  7. My suggestoin is to nationalize healthcare, and take the difference to payoff the debt, including social security.

    I let this go the first time you said it but how can you possibly say that with a straight face? Nationalize=Socialize.

    What makes you think

    (1) that Nationalization of anything would result in a savings given the corruption, theft and inneficiencies that have routed Social Security’s future and

    (2) that even if there were savings realized, that Obama, Reid & Pelosi wouldn’t spend it on the next pet project on the Socialization of America checklist?

    There is no accountability in government any more and your assumptions fly in the face of history and reality. Government now seeks to exist and grow for it’s own sake. Long gone are the days when government sought to serve it’s citizens. Give these guys more money and they will piss it away; and then some.

  8. JR – first, Nationalized medicine works, and is cheaper, and delivers better care than our model.

    Second, you’re right, government spends money, no doubt, recklessly, including handouts to large corps – especially to large corps. That said, are you willing to cut defense by 50% or 70%? We don’t need it, period.

    Long and short, we have to find the funds to make this work, but in all seriousness, privatization has failed utterly, repeatedly, and without any question.

  9. Penigma, as a guy who’s had a gallbladder out, I assure you that I do not desire the Canadian solution of waiting four months for surgery–and that being surgery that leaves BIG scars instead of the little ones I’ve got. I’m calling BS on your claim that nationalized healthcare works. Anyone that works at Mayo knows better.

    And regarding Socialist Insecurity–well, that’s one thing Reagan got wrong, but it doesn’t change the fact that FDR got it passed, and moreover got it passed by stealing about 40% of the value of currency/annuities/pensions held by private citizens–be devaluing the dollar vs. gold. Again, it doesn’t suggest that I want government, especially Democrats, running (ruining) my retirement.

    And if you (again) want to point to Reagan…well…he dealt with a Democratic Congress, didn’t he, and the fix from then is found to be insufficient after only a decade or two.

    It’s time to listen to the actuaries and admit that it’s insolvent, and get government out of the action.

  10. JR – first, Nationalized medicine works, and is cheaper, and delivers better care than our model.
    Peev, that’s an assertion without an argument. If the case for socialized medicine was really as you say it is, we would have had it decades ago.
    You also argue using what is called a “false choice”. Health care is not a choice between the “current system” and “nationalized health care”.
    Your statement that you’ll take the money saved by nationalizing healthcare and spend it on social security makes about as much sense as saying that you’ll reduce carbon emissions by increasing cafe standards to fifty MPG and then take the money saved on gasoline & use it to equip every house with solar panels.
    In other words you sound like an idealist giving a report to his seventh grade government class.

  11. In other words you sound like an idealist giving a report to his seventh grade government class.

    Terry, my son is in seventh grade and he knows better than that.

  12. From the article swiftee links to:

    “We thought we could resolve the system’s problems by rationing services or injecting massive amounts of new money into it,” says Castonguay. But now he prescribes a radical overhaul: “We are proposing to give a greater role to the private sector so that people can exercise freedom of choice.”
    Castonguay is identified as “the father of Quebec medicare”.

  13. JR – first, Nationalized medicine works, and is cheaper, and delivers better care than our model.

    My conservative friends have already debunked this assinine statement hereabove but I just gotta ask…

    Where the hell did you pick up that information? Michael Moore?

  14. Lessee…we have a nationalized retirement system that is failing because its actuaries didn’t do their work correctly, a nationalized retirement healthcare system that is failing because its actuaries didn’t account for societal shifts correctly, and the solution to this is to turn over pre-retirement healthcare to the government?

    Say what, Peev?

    Yes, you can cut healthcare costs by delaying care until people die. However, that’s not the choice that I’d recommend to anyone.

  15. Hey Penguin_ Prove the rich aren`t already ‘paying their fair share.’ Assertions are easy.

  16. Look what the liberal elitist illuminatis are eyeballing now. Some politicians on Capitol Hill want the end of our 401(k). Even if they allowed us to keep it, the troika of Reid, Pelosi and Obama would spend the savings on their next pet project.

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