Social Security Fact or Fiction

[Vol_Bengal]

Since we'd had an interesting discussion last week regarding privatization and the current state of the social security system I ran across some information and thought I post.

Don't know if these are legitimate facts or not but interesting if they are...

If you can refute any of these feel free as I'd like to verify if what is stated here is legitimate or not. If they are, oh how different social security would look today if they'd held true.

[quote]Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program he promised:

1.) That participation in the Program would be completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund" rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.


Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away," you may be interested in the following:

--------------------

Q: Which Political Party took Social Security from the independent "Trust" fund and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.

--------------------
Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

--------------------

Q: Which Political Party started taxing Social Security & annuities?

A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice
President of the U.S.

-------------------
Q: Which Political Party decided to start giving annuity payments to immigrants?

A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it![/quote]

[sois]

A lot of those changes are good.
Social security = take care of your fellow citizens who can't take care of themselves.
It is not a retirement account.
Nothing is stopping you from having your own IRA, 401k, savings account... etc.

I don't get why people get so worked up about this. Lots of us pay taxes for crap we don't use. For example, if you pay taxes for public schools, should you be allowed to take your money back or privatize that money for when you do have kids? That is stupid.

I am happy a lot of those changes took place.

[Homer_Rice]

Most of those claims are false, Vol.

Not that it matters in essence as it relates to the conversation of last week.

[sois]

I was wondering about that too Homer. Where can I find out the history of the SS program? I would really like to know the true story behind it because that article is totally opposite what I was led to believe.

[Homer_Rice]

[quote name='sois' post='650155' date='Apr 8 2008, 12:37 PM']I was wondering about that too Homer. Where can I find out the history of the SS program? I would really like to know the true story behind it because that article is totally opposite what I was led to believe.[/quote]
Lots of egghead-wonk white papers on SS out there. Google around. I'd recommend for more fun reading the Kenneth Davis bio series on FDR.

[Vol_Bengal]

[quote name='Homer_Rice' post='650152' date='Apr 8 2008, 12:25 PM']Most of those claims are false, Vol.

Not that it matters in essence as it relates to the conversation of last week.[/quote]
No, I wasn't attempting to relate any of that specifically to what we were referring to. I'd just come across it and since we'd had the discussion threw it out there. I didn't attempt to fact find on any of the points but thought that there were surely some folks on here (I had you in mind Homer!) that could chime in with such knowledge.

[Fanatical]

[quote name='sois' post='650146' date='Apr 8 2008, 11:04 AM']I don't get why people get so worked up about this. Lots of us pay taxes for crap we don't use. For example, if you pay taxes for public schools, should you be allowed to take your money back or privatize that money for when you do have kids? That is stupid.[/quote]

My beef is that by the time I retire the whole system will have been bankrupt, and I won't see a dime.

[Homer_Rice]

Here's a nice place to start, sois. Lots of think tank and other SS resources [url="http://www.nysscpa.org/social_security/websites.htm"]listed here.[/url] A little old (2005) so searching for newer material within some of those sites might turn up more reading.

Take a look at this [url="http://www.nationalpriorities.org/auxiliary/taxday2008/999.pdf"]small pdf.[/url] It's a breakdown of the federal fiscal budget. Here is the related [url="http://www.nationalpriorities.org/node/6487"]sources page.[/url]

My take: Way too much spending on national defense and debt service. I'd also like to see a comparison of the current costs of health care in relation to a per capita (or household) measure of the expenditures of some nations who currently offer universal health care, and also to prospective universal care plans proposed for the US.

The anti-poverty costs are interesting for two reasons. It's what most people complain about and related to this thread, it includes SSI payments, which is not SS, but is given to people (disabled or dependents) who have not contributed to SS.

Now, imagine you were an executive sitting around a conference table, working out the annual budget (as no doubt some of you do.) What sorts of adjustments or policy changes might come to mind that would be consistent with the goals of the organization?

I would be motivated by two challenges. First, I'd want to re-calibrate the expenditures in light of efficiency. Second, and this is more important in general, I'd want to do so in the context of a well-conceived plan to increase revenue. (In this case, tax revenue.)

So, and maybe this is sort of what CTBengal was looking for last week, I would propose something along the lines of the following:

1) Reduce overall military expenditure, using some of the difference as savings (in the sense of money not spent) and reallocating some funds to better deal with current military needs, especially in the areas of pay and dependent care, as well as in the areas of vet health care. All military spending is considered as non-productive expenditures for accounting purposes, even though some spending is obviously necessary. Nevertheless, it's an overhead cost and does not directly contribute to the wealth of a community. (There are sometimes some indirect benefits to the economy at large, especially when research/technology gets transfered to the civilian sector.) I'd focus especially on minimizing the debt service in this area as much as possible.

2) Health care costs, too, are an overhead/non-productive cost. Being a proponent of universal health care because of the indirect benefits it has for the community at large, I'd be interested in trimming administrative costs (bureaucracy) by creating a single payer plan of some kind, and extending some of the savings across better means of health care delivery. More hospital beds per capita, better training for professionals (including some incentives to build up the work force) and a bit of rational funding of cutting edge science in the medical field.

3) Debt Service: Obviously, minimize this as much as possible. But, really do it the correct way and not the "bubble" way. The correct way is to grow the productive secotrs of the economy, thereby raising tax revenue through expansion and not gouging. The incorrect way is to do as we have for the past few decades, when we have made concerted efforts to reduce the national debt (and this applies in particular to the Clinton admins): artificially raise nominal assets such that revenues increase, but in non-productive sectors of the economy.

4) Anti-Poverty expenditures. I'd look at ways to increase employment through calculated investment in sectors of the economy which have some direct payback: manufacturing and engineering, for example. I'd also invest in a massive infrastructure rebuild of the nation, thereby laying the substrate for the next fifty years of productive society. Lots of useful and decent paying employment there. I'd be inclined to raise some forms of payment to the SSI folks, with the proviso that there be stronger guidelines for rooting out abuse of the system.

5) I'd take a look at taxation policy, shifting the burden away from the middle class, and raising it on non-productive activities in the economy. Capital gains taxes would go up in general, but with some strong incentives for individuals to favorably invest in targetted areas of expenditure (such as the aforementioned infrastructure projects), thereby nudging capital flows in positive directions for the overall economy. The general rule of thumb would be to tax nominal asset appreciation at a higher rate than taxes in areas which contribute directly to a real expansion of the economy. (This is what makes the parasite class among us fearful.)

Under such conditions of [i]truly[/i] growing our way over the next fifty years, your SS will not only be more secure than it already is today, it might even become less of a political football for pols.

But these things will only happen if folks sublimate a little more of their individual greed (the part of each of us which says, "Too bad for you, I've got mine") for the benefit of the community. No more lifeboat ethics, but really do as Reagan wished, but failed to do: raise the level of water for everyone.

We're as strong as our weakest link.

[sois]

[quote name='Fanatical' post='650322' date='Apr 8 2008, 07:02 PM']My beef is that by the time I retire the whole system will have been bankrupt, and I won't see a dime.[/quote]

well, this has a few reasons.
first of all, there are too many people in your the boomer generation.
that was an unexpected hiccup in the population growth trend.
shouldn't have had so many kids from 1946-64.

also, you will get something, it may not be much, but you will get something.
there will be people working and paying into SS when you are retired.

[Fanatical]

i was born in 1980, I'm paying for the boomers

[bengalrick]

[quote name='sois' post='650404' date='Apr 8 2008, 10:49 PM']well, this has a few reasons.
first of all, there are too many people in your the boomer generation.
that was an unexpected hiccup in the population growth trend.
shouldn't have had so many kids from 1946-64.

also, you will get something, it may not be much, but you will get something.
there will be people working and paying into SS when you are retired.[/quote]

bullshit... the system will be bankrupt about 10 years before I will even be smelling retirement, and that is assuming we don't move back the retirement age (which we will HAVE to)

And an expected hiccup? Does that mean that we should ignore it? I am trying to say "theres a fucking mountain right in front of us!!!" and you are talking the boomers hsouldn't have had so many kids?

unless you like handing your money to the gov't with absolutely no chance of ever seeing a bit of that help, you should also want to fix the problem instead of talking semantics about what the system was originally intended for...

[sois]

[quote name='bengalrick' post='650519' date='Apr 9 2008, 10:50 AM']bullshit... the system will be bankrupt about 10 years before I will even be smelling retirement, and that is assuming we don't move back the retirement age (which we will HAVE to)

And an expected hiccup? Does that mean that we should ignore it? I am trying to say "theres a fucking mountain right in front of us!!!" and you are talking the boomers hsouldn't have had so many kids?

unless you like handing your money to the gov't with absolutely no chance of ever seeing a bit of that help, you should also want to fix the problem instead of talking semantics about what the system was originally intended for...[/quote]

1. Why are you so mad?
2. How can a system be bankrupt when there is money still coming in?
3. I regularly hand over money to the government and do not expect a return service. I have no problem with that. Public school taxes and Medicare taxes are two I can think of right now which I pay into and will not use. Will I cry about this? No. Those are social services. You can't always expect something in return. That is the price you pay for living in a society. Why do you have a problem with SS?
4. My solution is to eliminate the wage cap, raise the SS age to 75 and limit beneficiaries to those below the poverty line. Of course, nobody likes my solution.

[CTBengalsFan]

[quote name='bengalrick' post='650519' date='Apr 9 2008, 11:50 AM']bullshit... the system will be bankrupt about 10 years before I will even be smelling retirement, and that is assuming we don't move back the retirement age (which we will HAVE to)

And an expected hiccup? Does that mean that we should ignore it? I am trying to say "theres a fucking mountain right in front of us!!!" and you are talking the boomers hsouldn't have had so many kids?

unless you like handing your money to the gov't with absolutely no chance of ever seeing a bit of that help, you should also want to fix the problem instead of talking semantics about what the system was originally intended for...[/quote]

I'm paying for the War in Iraq and I'm soooo not getting anything out of it.

[CincyInDC]

[quote name='CTBengalsFan' post='650537' date='Apr 9 2008, 11:28 AM']I'm paying for the War in Iraq and I'm soooo not getting anything out of it.[/quote]

But it makes us safer and we get oil out of it, right?

[Jamie_B]

[quote name='CTBengalsFan' post='650537' date='Apr 9 2008, 12:28 PM']I'm paying for the War in Iraq and I'm soooo not getting anything out of it.[/quote]


What your not happy with these magic beans?

[bengalrick]

[quote name='CTBengalsFan' post='650537' date='Apr 9 2008, 12:28 PM']I'm paying for the War in Iraq and I'm soooo not getting anything out of it.[/quote]

great comparison.. I remember it like it was yesterday when bush was like "we are invading iraq so that they will send us checks when we retire."

[bengalrick]

[quote name='sois' post='650534' date='Apr 9 2008, 12:15 PM']1. Why are you so mad?[/quote]

I never like getting screwed out of money, especially when those screwing me are telling me that my grandparents shouldn't have had so many kids... But overall, i'm just irratated at your ignorance of this subject...

[quote]2. How can a system be bankrupt when there is money still coming in?[/quote]

huh? You do realize that congress takes the excess money that we are paying our seniors now, and uses that to help finance other things, right?

[quote]3. I regularly hand over money to the government and do not expect a return service. I have no problem with that. Public school taxes and Medicare taxes are two I can think of right now which I pay into and will not use. Will I cry about this? No. Those are social services. You can't always expect something in return. That is the price you pay for living in a society. Why do you have a problem with SS?[/quote]

We were PROMISED that if we pay in for 40 years, that we will then start to get it back... but the system will have ran out of money by the time i retire... Don't tell me its the price i pay for society... I have a problem with people like you that are not willing to say "well shucks, the system is going to implode, but fuck it, lets ignore it and talk down to people."

And don't get me started about public school taxes...

[quote]4. My solution is to eliminate the wage cap, raise the SS age to 75 and limit beneficiaries to those below the poverty line. Of course, nobody likes my solution.[/quote]

yeah, i hate that idea... I am now expected to work 12 years longer than my grandparents, b/c people like you are not willing to start to fix the problem?

[CTBengalsFan]

[quote name='bengalrick' post='650559' date='Apr 9 2008, 01:54 PM'][b]I never like getting screwed out of money[/b], especially when those screwing me are telling me that my grandparents shouldn't have had so many kids... But overall, i'm just irratated at your ignorance of this subject...[/quote]

So why do you support the Iraq War then?

[bengalrick]

[quote name='CTBengalsFan' post='650568' date='Apr 9 2008, 01:19 PM']So why do you support the Iraq War then?[/quote]

would you stop talking about the damn war and comment about the topic at hand?

I support the war in iraq for many reasons, but none of which have a damn thing to do w/ my retirement or SS...

[sois]

[quote name='bengalrick' post='650559' date='Apr 9 2008, 12:54 PM']I never like getting screwed out of money, especially when those screwing me are telling me that my grandparents shouldn't have had so many kids... But overall, i'm just irratated at your ignorance of this subject...[/quote]

If you feel that helping people that can't afford the basics of life is "screwing" you, then you have a very terrible outlook on life.

[quote name='bengalrick' post='650559' date='Apr 9 2008, 12:54 PM']huh? You do realize that congress takes the excess money that we are paying our seniors now, and uses that to help finance other things, right?[/quote]
Sure I realize that happens. I don't see what this has to do with bankrupting the system because...

[quote name='bengalrick' post='650559' date='Apr 9 2008, 12:54 PM']We were PROMISED that if we pay in for 40 years, that we will then start to get it back... but the system will have ran out of money by the time i retire... Don't tell me its the price i pay for society... I have a problem with people like you that are not willing to say "well shucks, the system is going to implode, but fuck it, lets ignore it and talk down to people."[/quote]
... when I retire in 40 or so years, there will stll be working and paying into the SS system. I may not get as much as I was "promised", but I will get something (unless they overhaul or kill the whole program).
Secondly, I don't get where you imply a promise on the words "SOCIAL" and "SECURITY". Again, the system is to provide for those who can't provide for themselves. It is not a retirement account, annuity, or entitled benefit. It is welfare.

[quote name='bengalrick' post='650559' date='Apr 9 2008, 12:54 PM']And don't get me started about public school taxes...[/quote]
I am actually interested on what you think about this, because your thinking is very different from mine.

[quote name='bengalrick' post='650559' date='Apr 9 2008, 12:54 PM']yeah, i hate that idea... I am now expected to work 12 years longer than my grandparents, b/c people like you are not willing to start to fix the problem?[/quote]
People like me? I don't know what I can do to fix this. I have an idea I think is logical.
Secondly, You DO realize that your grandparent's generation life expectancy is much shorter than your generation's life expectancy. Yes, the age should be raised. When it first started, the average person DIED 3 YEARS AFTER THEY STARTED DRAWING ON THE SYSTEM. Now people are benefiting for 30+ years. Something has to change about that.

Thanks for the debate, but I really don't agree with anything you say. I don't mean to offend, but I feel my ideas are pretty logical and somewhat thought out. You just seem to feel that you are entitled to something that is a welfare social service.

[Jamie_B]

[quote name='sois' post='650609' date='Apr 9 2008, 03:43 PM'][color="#FF0000"]If you feel that helping people that can't afford the basics of life is "screwing" you, then you have a very terrible outlook on life.[/color]


Sure I realize that happens. I don't see what this has to do with bankrupting the system because...


... when I retire in 40 or so years, there will stll be working and paying into the SS system. I may not get as much as I was "promised", but I will get something (unless they overhaul or kill the whole program).
Secondly, I don't get where you imply a promise on the words "SOCIAL" and "SECURITY". Again, the system is to provide for those who can't provide for themselves. It is not a retirement account, annuity, or entitled benefit. It is welfare.


I am actually interested on what you think about this, because your thinking is very different from mine.


People like me? I don't know what I can do to fix this. I have an idea I think is logical.
Secondly, You DO realize that your grandparent's generation life expectancy is much shorter than your generation's life expectancy. Yes, the age should be raised. When it first started, the average person DIED 3 YEARS AFTER THEY STARTED DRAWING ON THE SYSTEM. Now people are benefiting for 30+ years. Something has to change about that.

Thanks for the debate, but I really don't agree with anything you say. I don't mean to offend, but I feel my ideas are pretty logical and somewhat thought out. You just seem to feel that you are entitled to something that is a welfare social service.[/quote]


:applaud:

[bengalrick]

Are you two serious? Where did I say that i didn't like the idea of SS, and that I wanted to scrap it? Read my words, and don't put words in my mouth...

Answer me one question: Do you expect SS to be there for you when you retire (assuming you are both about my age)?


As far as congress using SS funds to pay for their own crap, are you heartless? why not put the surpluss to the side, until it will be needed (you know, when the system starts to tank)

About the concept of social security, YOU my friend don't understand the concept of SS... That is homer's biggest point... it isn't the money that they will give us, it is the guarentee that they will take care of us in our retirement... btw, here are some definitions of [url="http://www.google.com/search?hl=en&q=define%3Asocial+security&btnG=Google+Search"]social security[/url]:
[i]
The disability or retirement programs established under the federal Social Security Act of the Railroad Retirement Act.[/i]

[i]The US Social Security Act of 1935 plus its amendments and additions provides for disability, retirement and annuity benefits to dependents and survivors.[/i]

[i]A US government pension program that provides benefits to retirees based on their own and their employers' contributions to the program while they were working.[/i]

The last one is the best definition... it says it is pension, which is essentially a promise (guarentee IS too strong of a word, b/c nothing is that) that the company (in this case the gov't) will pay you X amount of dollars, based on how much you put into the system throughout your working career... This is great... i love the idea, and would have signed on w/ a big smile on my face... I STILL love the idea, but i don't like that the system isn't self sustaining, and while we are hurting now, in a few years when the baby boomers do start retiring in massive numbers, we are going to need to figure out a way to sustain it longer... It is NOT heartless for me to be thinking about myself... ONLY because that means i am also thinking about every other 27 year old in America too... Which means i am anticipating problems, and trying to spark debate about the best ways of fixing them...

As far as education, we have one of the worst education systems in the world, and imo it is b/c (unless you have alot of money) you are forced to go to school in your own district... There is no competition for schools to hire the best teachers.. And how do we expect to fix the problem, if we pay teachers shit? IMO, we need to go to school vouchers and make it more of a free market system... of course, this comment will spark some more comments from other members on this board, so let me apoligize ahead of time for (probably) not responding back... I had a slow day at work, but now its off to school again

[sois]

[quote name='bengalrick' post='650639' date='Apr 9 2008, 04:49 PM']Answer me one question: Do you expect SS to be there for you when you retire (assuming you are both about my age)?[/quote]

Yes, when I retire in 2040, anybody working will be paying money into the SS system, therefore I will get SOMETHING. May not be much, but I will get my $150 monthly check.


[quote name='bengalrick' post='650639' date='Apr 9 2008, 04:49 PM']As far as congress using SS funds to pay for their own crap, are you heartless? why not put the surpluss to the side, until it will be needed (you know, when the system starts to tank)[/quote]

In an ideal situation, I am with you 100%. Any SS monies should ONLY go to SS beneficiaries. Not much you can do about a corrupt congress spending money incorrectly.

[quote name='bengalrick' post='650639' date='Apr 9 2008, 04:49 PM']About the concept of social security, YOU my friend don't understand the concept of SS... That is homer's biggest point... it isn't the money that they will give us, it is the guarentee that they will take care of us in our retirement... btw, here are some definitions of [url="http://www.google.com/search?hl=en&q=define%3Asocial+security&btnG=Google+Search"]social security[/url]:
[i]
The disability or retirement programs established under the federal Social Security Act of the Railroad Retirement Act.[/i]

[i]The US Social Security Act of 1935 plus its amendments and additions provides for disability, retirement and annuity benefits to dependents and survivors.[/i]

[i]A US government pension program that provides benefits to retirees based on their own and their employers' contributions to the program while they were working.[/i]

The last one is the best definition... it says it is pension, which is essentially a promise (guarentee IS too strong of a word, b/c nothing is that) that the company (in this case the gov't) will pay you X amount of dollars, based on how much you put into the system throughout your working career... This is great... i love the idea, and would have signed on w/ a big smile on my face... I STILL love the idea, but i don't like that the system isn't self sustaining, and while we are hurting now, in a few years when the baby boomers do start retiring in massive numbers, we are going to need to figure out a way to sustain it longer... It is NOT heartless for me to be thinking about myself... ONLY because that means i am also thinking about every other 27 year old in America too... Which means i am anticipating problems, and trying to spark debate about the best ways of fixing them...

As far as education, we have one of the worst education systems in the world, and imo it is b/c (unless you have alot of money) you are forced to go to school in your own district... There is no competition for schools to hire the best teachers.. And how do we expect to fix the problem, if we pay teachers shit? IMO, we need to go to school vouchers and make it more of a free market system... of course, this comment will spark some more comments from other members on this board, so let me apoligize ahead of time for (probably) not responding back... I had a slow day at work, but now its off to school again [/quote]

I haven't started much research on the origin or history of the SS program, but I believe what you say about its beginnings.

I also would love to sign up for a pension retirement system, but in reality, how feasible is it to keep this promise to EVERY citizen of our country?

Some ideas just fail for lack of planning. Look at the pension funds of all of major corporations these days. Everything has switched to defined benefit. I don't like that answer, but its the hard truth. People are living longer and there are more of them.

I don't know that you fix that system. That is really why people should be saving for their own retirement.

[CTBengalsFan]

[quote name='bengalrick' post='650639' date='Apr 9 2008, 05:49 PM']As far as education, we have one of the worst education systems in the world, and imo it is b/c (unless you have alot of money) you are forced to go to school in your own district... There is no competition for schools to hire the best teachers.. And how do we expect to fix the problem, if we pay teachers shit? IMO, we need to go to school vouchers and make it more of a free market system... of course, this comment will spark some more comments from other members on this board, so let me apoligize ahead of time for (probably) not responding back... I had a slow day at work, but now its off to school again [/quote]

You should read "Savage Inequalities" by Jonathan Kozol if you really believe this.

[url="http://books.google.com/books?id=UEJ3QAukj9oC&printsec=frontcover&dq=savage+inequalities&ei=UKj9R47ECqHayAS1tNHHAg&sig=a9JplFntEO3o5OF3VxoRQ165ZO8"]http://books.google.com/books?id=UEJ3QAukj...5OF3VxoRQ165ZO8[/url]

[bengalrick]

[quote name='CTBengalsFan' post='650786' date='Apr 10 2008, 01:40 AM']You should read "Savage Inequalities" by Jonathan Kozol if you really believe this.

[url="http://books.google.com/books?id=UEJ3QAukj9oC&printsec=frontcover&dq=savage+inequalities&ei=UKj9R47ECqHayAS1tNHHAg&sig=a9JplFntEO3o5OF3VxoRQ165ZO8"]http://books.google.com/books?id=UEJ3QAukj...5OF3VxoRQ165ZO8[/url][/quote]

interesting... thanks for the heads up... sounds interesting