What amuses me most is that the only way Social Security won’t be there when young Noah is old enough to be President is if Bush touches the program. The problem isn’t with social security itself (which has enough T-bills in its coffers to pay every dollar owed from now until 2047), but the fact that when those T-bills come due, it will put enormous strain on the general account. In order to pay for that, we need to raise taxes, pure and simple...
If you don’t like this plan, blame Allan Greenspan and Ronald Reagan. They designed it back in the mid 1980s...
Andrew, I believe that you are mistaken. If you follow the money, Social Security contributions end up in the general fund (after some accounting tricks) and Social Security benefits are paid out of the general fund. The T-bills you talk about are like a second mortgage. They only get paid after all other obligations of the federal government are paid. The Supreme Court has ruled that no individual has a legal right to either their own "contributions" nor to any specific benefit. It was a Ponzi scheme from the outset when FDR started it, and it's a Ponzi scheme now.
What has changed is that after about 2018 there will no longer be a surplus to go into the general fund, due to demographics, and pols can no longer use the surplus to fund their pet pork. Both sides of the aisle are guilty of misrepresenting SS while taking advantage of the surplus for their pet projects. That said, the Dems are probably more to blame because (1)they thought it up, and (2)LBJ ensured it's early insolvency with his Great Society programs. Then too, the Dems have controlled the Congress for most of the time that SS has been around.
Calling it a "Ponzi Scheme" just shows your ignorance as to what a ponzi scheme is.
The original planners always expected that people would live longer in the future. If anything they overestimated the increase in longevity.
No one could have anticipated the huge size of the Baby Boom cohort, though.
Social Security will be back in balance once this cohort has passed its way through the system.
So it is not a ponzi scheme at all, just a demographical imbalance, which would have caused us fiscal issues no matter which scheme we use for retirement.
Despite Jim Ausman's claim to the contrary, the current system IS a Ponzi scheme, and a particularly selfish one, for it has from the beginning been structured under the assumption that every generation would be bigger than the last. FDR recognized that this was a problem, which was why when he passed it he also proposed that over a period of decades it slowly be devolved to be managed by the states, and toward voluntary and involuntary self-supporting equities (news flash: self-supporting equities are insurance policies, stocks, bonds--i.e. individual accounts!).
It's particularly disingenuous of anyone to claim that the system will only fail to be there if the current administration finally does the moral and upright thing and begins the transition process that should have begun decades ago. It's particularly irksome to see people opposing this merely because the current administration has proposed it--and no question about it, just reading many of the objections, it's fairly clear that much of the resistance is just the typical kneejerk "if Bush is for it I'm agin' it" reasoning we've seen so much of in the last few years.
We need to stop burdening our children like this. At one point it could be argued that it was a necessary evil. But it isn't any longer, and it's time to do the unselfish thing, bite the bullet, and start the transition process toward individual ownership that was always intended.
Dean's economics and ethics are very good. The politics of this particular strategy doesn't sound too sound to me, though. Appealing to kids and teenagers? They can't vote. And young people who can are notorious for not doing so, even with all the "Rock the Vote" campaigns and so on. Older people, by contrast, are known to vote regularly. Better make the case to the elders, for it is they who decide things, not the teeny-boppers.
I don't understand all the economics involved, but I've often wondered if something this simple wouldn't work:
Take the percentage an employee gets deducted from a paycheck and allow the employee to invest that entire amount in a personal IRA, whether it be one already set up by the employer, or a personal one with a private investment firm. As long as the employee can prove the investment on the 1040 every year, deductions from SS can be stopped from the paycheck.
If you don’t like this plan, blame Allan Greenspan and Ronald Reagan. They designed it back in the mid 1980s...
What has changed is that after about 2018 there will no longer be a surplus to go into the general fund, due to demographics, and pols can no longer use the surplus to fund their pet pork. Both sides of the aisle are guilty of misrepresenting SS while taking advantage of the surplus for their pet projects. That said, the Dems are probably more to blame because (1)they thought it up, and (2)LBJ ensured it's early insolvency with his Great Society programs. Then too, the Dems have controlled the Congress for most of the time that SS has been around.
The original planners always expected that people would live longer in the future. If anything they overestimated the increase in longevity.
No one could have anticipated the huge size of the Baby Boom cohort, though.
Social Security will be back in balance once this cohort has passed its way through the system.
So it is not a ponzi scheme at all, just a demographical imbalance, which would have caused us fiscal issues no matter which scheme we use for retirement.
Despite Jim Ausman's claim to the contrary, the current system IS a Ponzi scheme, and a particularly selfish one, for it has from the beginning been structured under the assumption that every generation would be bigger than the last. FDR recognized that this was a problem, which was why when he passed it he also proposed that over a period of decades it slowly be devolved to be managed by the states, and toward voluntary and involuntary self-supporting equities (news flash: self-supporting equities are insurance policies, stocks, bonds--i.e. individual accounts!).
It's particularly disingenuous of anyone to claim that the system will only fail to be there if the current administration finally does the moral and upright thing and begins the transition process that should have begun decades ago. It's particularly irksome to see people opposing this merely because the current administration has proposed it--and no question about it, just reading many of the objections, it's fairly clear that much of the resistance is just the typical kneejerk "if Bush is for it I'm agin' it" reasoning we've seen so much of in the last few years.
We need to stop burdening our children like this. At one point it could be argued that it was a necessary evil. But it isn't any longer, and it's time to do the unselfish thing, bite the bullet, and start the transition process toward individual ownership that was always intended.
Take the percentage an employee gets deducted from a paycheck and allow the employee to invest that entire amount in a personal IRA, whether it be one already set up by the employer, or a personal one with a private investment firm. As long as the employee can prove the investment on the 1040 every year, deductions from SS can be stopped from the paycheck.
Would that work?