Social (in)Security and who did what.

[LazurusLong]

Was on the phone earlier and my buddy started his sentence by claiming that Ronald Regan was the first to take money from Social Security for the general fund.

WHOAH!! I offered to bet him lunch on this. He got pissed and hung up.

"Medicare and Medicaid were added in 1965 by the Social Security Act of 1965, part of President Lyndon B. Johnson's "Great Society" program.

Social Security was changed to withdraw funds from the independent "Trust Fund" and put it into the General Fund for additional congressional revenue."

Facts are a bitch.
http://en.wikipedia.org/wiki/Social_...ty_Act_of_1965

Reagan wanted to privatize and stop taking the damn funds out of Social Security to pay for other things in the overall budget.

How's that Great Society working out now, 45 years later?

People who are under 40 right now, which includes many escorts, can't hope to see a dime from any monies paid into Social Security.

Of course, I highly doubt many escorts, if any at all, pay FICA taxes on their hobby incomes and very few actually put even 10% away let alone enough to have a comfortable living once they retire.

Although it is not as hot of a topic as illegals are right now, how many people think that letting people have control of their own retirement by setting up private accounts for social security would help wean the government spending off the tax payer teat? And allow folks to watch their own retirement grow as the FICA tax is put into private trusts that the government can't touch?

I also feel that any limits on how much you can put into retirement accounts should be lifted and you should be able to put as much money as you want in them and the only way it can be taken out by the government is if you did something illegal to get the money in the first place.

[Rudyard K]

Originally Posted by LazurusLong

Was on the phone earlier and my buddy started his sentence by claiming that Ronald Regan was the first to take money from Social Security for the general fund.

WHOAH!! I offered to bet him lunch on this. He got pissed and hung up.

"Medicare and Medicaid were added in 1965 by the Social Security Act of 1965, part of President Lyndon B. Johnson's "Great Society" program.

Social Security was changed to withdraw funds from the independent "Trust Fund" and put it into the General Fund for additional congressional revenue."

Facts are a bitch.
http://en.wikipedia.org/wiki/Social_...ty_Act_of_1965

Reagan wanted to privatize and stop taking the damn funds out of Social Security to pay for other things in the overall budget.

How's that Great Society working out now, 45 years later?

People who are under 40 right now, which includes many escorts, can't hope to see a dime from any monies paid into Social Security.

Of course, I highly doubt many escorts, if any at all, pay FICA taxes on their hobby incomes and very few actually put even 10% away let alone enough to have a comfortable living once they retire.

Although it is not as hot of a topic as illegals are right now, how many people think that letting people have control of their own retirement by setting up private accounts for social security would help wean the government spending off the tax payer teat? And allow folks to watch their own retirement grow as the FICA tax is put into private trusts that the government can't touch?

I also feel that any limits on how much you can put into retirement accounts should be lifted and you should be able to put as much money as you want in them and the only way it can be taken out by the government is if you did something illegal to get the money in the first place.

I have mixed feelings on the "letting people control their own retirment accounts". In concept, I think it is good. But I know, that the Great Society will never just "kick them to the curb" should they fail to accomplish providing for their retirement. So, in the end, there will be an outcry for public money to take care of all these people who have run out of money.

I believe in personal responsibility as my obligation. And I believe in charity as my obligation. It is when we start mixing the two...and your (the generic "your"...not you personally) idea of charity becomes my personal obligation...that we run afoul of things.

So, while it is personally distasteful to me...I think the only practicle answer is to have societal control of retirement funds, to fulfill what will most certainly be percieved a societal obligation.

[Sa_artman]

If only we had a crystal ball. I cringe when I look at the money my young employees pay into SS with the knowledge that they may never see any of it. Maybe we should start a Logan's Run program to ensure their future?

[LazurusLong]

Originally Posted by Sa_artman

Maybe we should start a Logan's Run program to ensure their future?

Considering that the United Kingdom has just announced that rationing of health care will be instituted in order to control costs and knowing that the vast majority of health care costs happen in the last few years of life, anyone who thinks a Logan's Run sort of scheme is not about to happen is dreaming.

And our fearless leader loves the UK model.

But back to the issue.

One of the unstated reasons for giving amnesty to the illegals would be to get them paying taxes into the system which will include FICA at whatever rate the government wants to take.....

[pjorourke]

Originally Posted by LazurusLong

a) Although it is not as hot of a topic as illegals are right now, how many people think that letting people have control of their own retirement by setting up private accounts for social security would help wean the government spending off the tax payer teat? And allow folks to watch their own retirement grow as the FICA tax is put into private trusts that the government can't touch?

b) I also feel that any limits on how much you can put into retirement accounts should be lifted and you should be able to put as much money as you want in them and the only way it can be taken out by the government is if you did something illegal to get the money in the first place.

a) Private social security accounts is actually two distinct issues wrapped up in one.
1a) The first is the problem that Social Security is what is known as a defined benefit plan or a DB plan for the knowledgeable. The formula specifies your benefit, typically as a function of your covered earnings over the years of you participation. These kinds of plans work well when their is discipline by the sponsor to make sure the funding keeps up. And unfortunately, that happens almost never. Way back in the 70's, there was a another round of auto bankruptcies (and related field like steel) where employees got left holding the bag when companies went under without adequately funding their benefits. Congress passed this elaborate law called ERISA (popular acronym for "Every Ridiculous Idea Since Adam) that imposed funding standards on businesses but not on union or government plans and certainly not on the worlds largest Ponzi scheme -- SS. Short form, municipal plans are a time bomb that will make the mortgage mess look like a tea party. Anyways, the alternative approach is what is known as a defined contribution or DC plan. Here your benefit is a function of what is put in for you. If you have an IRA or a 401(k) at work, that is a DC plan. The beauty of a DC plan is that you can't fuck with the funding -- the funding is the plan. You can't provide bigger benefits to constituents or negotiate higher benefits without allowing for the funding -- i.e. pay up. The supposed negative with these plans are two-fold -- there needs to be a way to deal with short service people (transitional, death, disability) to build a full benefit and two they shift the investment risk/decision making to the participant. The first can be overcome with some limited DB benefits or supplemental "pure insurance" to cover the gaps. The later in my mind is a non-issue. First, you could have the investments centrally managed (see2a below) like is done in many corporate plans. Alternatively, let participants manage their own within limits. Employees actually do a pretty good job managing their 401(k)'s (unless management forces them into company stock ala Enron) and there could be large investment funds established to make it easier, e.g. using generation funds that automatically get more conservative as you age (like you should). But the other big advantage of DC plans is that you have risk diversification. In a DB plan, you may hold all kinds of securities to secure the benefit, but at the end of the day the plan is only as strong as the sponsor and their ability to keep funding. With DC's funding = benefit -- no problem. If a company goers under, its plan is fully funded.

2a) DC plans create big piles of invest-able assets, which is a good thing. It fuels the growth in the economy and keeps the punch bowl full. But it is also an opportunity for mischief. Suppose we had a government come into power that didn't like how the capitalist system worked and wanted to spread the wealth a bit whether it made economic sense or not. They might be tempted to fuck with that pool to serve their own interest, not the interests of the participants who want a reasonable return for their investment risk. Even if they weren't that far around the bend, there is still the temptation to screw with the investments through proxy voting. The best way to avoid the politicians succumbing to this potential power (which they will) is to not give it to them -- let the SS participants keep it, with pass through voting rights. talk about building a nation of capitalists.

b) People have talked about such ideas. Conceptually any money that you saved wouldn't be taxable income and any money you took out of savings and spent would be taxed then. Its very neat and conceptually consistent In fact, it is mathematically a consumption tax not an income tax -- but one where you can have personal exclusions and graduated rates. It would be economically a lot less damaging that what we have now, but again the Achilles heal is that the pols don't get to fuck with definitions as much so they can't gin up sufficient campaign contributions.

[WTF]

Originally Posted by LazurusLong

Facts are a bitch.
http://en.wikipedia.org/wiki/Social_Security_Act_of_1965

Reagan wanted to privatize and stop taking the damn funds out of Social Security to pay for other things in the overall budget.

Well what he said and what he actually did are 180 degree's apart. He spent all that extra cash on his Defense buddies.

[Sa_artman]

Originally Posted by WTF

Well what he said and what he actually did are 180 degree's apart. He spent all that extra cash on his Defense buddies.

I think he used the extra money to pay for the cheese. Now that's how to spend tax dollars.

[pjorourke]

Originally Posted by Sa_artman

I think he used the extra money to pay for the cheese.

Trying to generate methane gas to solve the energy shortage.

[LazurusLong]

Originally Posted by pjorourke

Trying to generate methane gas to solve the energy shortage.

Was that some of the first biomass efforts to be green and reduce our carbon footprint? In that case, if true, Regan should have been a hero to the progressives!

[pjorourke]

Originally Posted by LazurusLong

Regan should have been a hero to the progressives!

I'm sure he would be turning over in his grave if he was their hero.

[Mazomaniac]

Originally Posted by LazurusLong

Facts are a bitch.

Yep. They sure are.

Particularly when you consider that Social Security funds have NEVER been put into the general budget. This is a myth that has been circulating through the internet for years now. It's getting real old hearing people repeat it. It's just another scare tactic from the pols.

You and your buddy were both wrong. The Social Security trust fund is still handled under the exact same accounting and exact same rules as it was when it was first created in 1939. None of the trust fund money has ever been allocated for use in the general fund.

Cheers,
Mazo.

[LazurusLong]

Originally Posted by Mazomaniac

The Social Security trust fund is still handled under the exact same accounting and exact same rules as it was when it was first created in 1939. None of the trust fund money has ever been allocated for use in the general fund.

Wow.

I spit my shot of Patron all over the keyboard when I read this.

Have you not bothered to actually read the laws passed in 1965?

Or any laws passed since then/

Really?

[TexTushHog]

Originally Posted by LazurusLong

Considering that the United Kingdom has just announced that rationing of health care will be instituted

I have no idea what "announcement" you're referring to, but we ration health care. We ration it to people who have insurance or are otherwise wealthy. Seems like a more logical way to ration it would be by need, by whether the care will do any good, whether a disease is curable, etc., rather than allow our fellow citizens to go without and die from lack of routine medical care.

[TexTushHog]

Originally Posted by LazurusLong

Wow.

I spit my shot of Patron all over the keyboard when I read this.

Have you not bothered to actually read the laws passed in 1965?

Or any laws passed since then/

Really?

Then why does the current SS Trust Fund have a $2 trillion surplus?

http://www.tcf.org/Publications/Reti...s6-25-2008.pdf

[Mazomaniac]

Originally Posted by LazurusLong

Wow.

I spit my shot of Patron all over the keyboard when I read this.

Have you not bothered to actually read the laws passed in 1965?

Or any laws passed since then/

Really?

Yes. Really.

Yes. I have read the law.

The Social Security Ammendments of 1965 created Medicare and Medicaid. It didn't do ANYTHING else.

Maybe you should read it too and stop believing all the horse dung written about it on the internet. You can find the text of the law - all two pages of it - here: http://www.ssa.gov/OP_Home/comp2/F089-097.html

But perhaps I'm missing something. If so then could you please quote the section of this law that states "Social Security was changed to withdraw funds from the independent "Trust Fund" and put it into the General Fund for additional congressional revenue" as you claim it does?

Or perhaps you would just prefer to take the Social Security Administration's word for it. Here's what they say about it on their website:

[T]here has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.

The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself

This whole thing is a myth. A lie. A big fat falsehood designed to dupe people like you into thinking and voting the way somebody else wants you to. It never happened no matter how many times people say it on the internet.

Stunningly enough, some people will actually make shit up in order to scare you into giving them your vote.

Cheers,
Mazo.