Well, I'm quite satisfied with my social security as is my wife. We draw 2997 a month between the two of us in addition to my retirement and hers.

Our home is paid for as are both vehicles.

Life is good if you plan for it. It sucks if you didn't.

It was never meant to be your sole income for retirement; only a supplement of course. As stated above, life is good if you plan for it and sucks if you don't. They will raise the retirement age in the future and I'm sure FICA withholdings will rise someday on paychecks as more people get older. A lot of baby boomers are going to be drawing on it.

Sling Fade- SS is a mandatory savings system; only those who contribute will receive $. It is not "taking from some to give to others deemed worthy". Slap Shot- The stock market, where some speculators are leveraged at 30 to 1 is a Ponzi scheme. Social Security collects real money and does not pretend to have more than it really has. It has a 2.5 Trillion-with-a-T surplus. How does that resemble a Ponzi scheme? 

Yes, many people recently lost 1/2 or more of their retirement savings in the stock market crash. 1/2 of Americans have no connection to the stock market at all. The populist stock market is a myth, as is the "self-correcting" market.

Dave .... how about handicap people on group homes many of them have never worked a job and collect ss.

As I said in the other thread.  Social security can be fixed forever by taxing income above 120k.

That's a good point pH, but with our corporate-captured representatives doing the looting and deciding what to do with the loot, it sure doesn't feel like it was "We" as in "We-the-People" doing all this. Point taken, though.

Lojasmo: I work at group homes and find your social security survivor benefits statement to be false. Many young individuals who are disabled collect SS who never worked a day. They also have parents who are alive and in many cases collecting SS themselves. I am not saying these individuals don't need to be taken care of but your assesment of it being from money their parents paid in isn't correct. Nor do the parents pay extra SS tax in order to pay for their childs SS. Just thought someone who deals with this stuff at group homes should point out you are wrong.

It is a Ponzi scheme because it depends on the next person down the line to fund it.  There's no SS account sitting in DC with Dave Sorenson's name on it; Dave Sorenson will be collecting money paid into the system by the next generation of workers.  It is unsustainable in its current form regardless of pointing to "income above $120k" ... keep in mind that not all income is subject to SS taxes, nor is all wealth.  Bill Gates will only be paying on his Microsoft-paid salary, not his billions.  And I hardly think there are enough people earning over $120k via employment to make your pipe dream float.

Yeah, Bruce, but the problem is there will be far more retirees than workers in the not-so-distant future.  So I guess your solution is to take more from the younger generation.  Problem is, unless each generation gets larger in numbers than the previous one, it is one big Ponzi scheme.  Coupled with the fact that life expectancy continues trending upward, and we've got one big problem.  As Bernie Madoff proved, the house of cards comes crashing down eventually.  But even more stunning than Madoff's racket is that Social Security pays far, FAR more to its recipients than what they paid in; inflation itself is a danger to SS system.  With our current debt trajectory, inflation is coming.  It's only a matter of time.

The system is broken, and it needs to be fixed.

The private sector has done a great job keeping this economy running so smoothly. What? You couldn't afford college? You worked your entire life doing low wage, menial work? Don't worry, you can invest in the stock market! If you have any free time, you could attend a rally full of angry white people who already retired and complain about taxes and health care.

@TimK: You assume that the current economic situation is the fault of the private sector; it has never occurred to you that it might be the fault of the public sector, has it?

Problem is, government programs very, very seldom are a permanent solution.  They only provide a temporary fix ... one that usually comes in the form of benefits, subsidies, handouts, grants or loans.

Slapshot - we are the "public sector".

Social Security was not intended to be "weaned off" ... 

Social Security is designed to protect citizens when they encounter social situations that make it difficult for them to provide for themselves. These protections include unemployment, old age and disability.

The baby boomer generation greatly outnumbers the two succeeding generations, and as more baby boomers retire, more money will be paid out to Social Security than is being paid into it...however; that will not last forever - as future generations after 1946 etc. have been increasingly getting smaller in number. There is a potential to bankrupt the Social Security program for future generations who are already paying into the program, but with continued funding and decreasing family sizes it may equalize itself out.

My dear mother worked her whole life from age 14 to 65. She worked as a waitress, a shop clerk, dish washer, etc. Her last job was working in the kitchen of a nursing home which afforded her a small pension -- she draws about $50 a month. Without social security she would be in pretty rough shape. So tell me, oh brilliant expert, how was she supposed to "plan" for her retirement? She has lived below the Federal Poverty Standard for most of her life. She worked hard. Harder than most of the people whining about taxes and Social Security going bust have ever worked. There comes a point in this "debate" where I literally can't listen to you any more. Your breathless Ayn Rand sermonizing is merely vapor.

SlapShot- really? Sorry you are such a heartless asshole.

@TimK: Heartless asshole?  Is that what you call someone telling it like it is?  Or how's about this: I'll bake you some chocolate chip cookies and pour you a nice glass of milk before I sit you down to give you bad news that Social Security is broken.  Frankly, I don't care about your mother's life story--that's your job.  What I am concerned about is the millions of retirees--my relatives amongst them--that will be left hanging when the proverbial shit hits the fan.  For some reason, the word "sustainable" only matters to liberals when referring to the environment.  Pointing this out makes me a "heartless asshole"?  

And what, pray tell, is wrong with suggesting that your mother could've achieved a better result simply by investing her Social Security withholdings in a more efficient manner?  Does that make me a heartless asshole?  Here's an idea for you, Timmy: Stop letting your heartstrings control your logic.  Doing good for your fellow man is one thing; doing it in a sustainable, responsible manner is quite another.  Heartless Asshole?  Good.  Great.  Grand.  Heartless Asshole it is.  Logic is on my side.

While the rhetoric used is bit edgy, I'm not seeing where SS is wrong.  Dick?  Maybe.  But not wrong......

I'm sure that when my mom was making 15 cents an hour back in 1952 she could have made out like a bandit investing in an IRA. At least 20 percent of the US population has no way to put aside a portion of their earnings into some private sector scheme with merely a HOPE of seeing a return by the time they can no longer work. The solution IS progressive taxation. You free market fuckwads are incapable of seeing that. Capitalism is a failure without progressive regulation -- including higher taxes on those that can pay. If you're going to be a troll, please accept that I will refer to you as heartless assholes and fuckwads.

You've got it wrong - pointing out that people could do better for themselves than the government SS program didn't make you an asshole, mocking TimK's mom for not having a big retirement fund is what makes you an asshole.

Japan has universal healthcare and price controls. They are achieving security for the elderly and disabled through different means, but still use taxes to do it. As for inflamatory rhetoric -- why is it that the league of craven acephalic nepocrats and fools (a.k.a. right wingers) can call for the outright assassination of liberal (and middle-of-the-road) politicians, but it's some how not okay for me to call an asshole an asshole?

And goddamnit! I got baited into feeding the trolls once more - I'm outta here. Have fun frothing at the mouth while you angrily type on your keyboard to the silence of the internet where despite all of your impassioned arguments, you will make no difference whatsoever.

If you believe Social Security isn't the way to go, stop bitching about it, come up with a better idea, and push it forward. Anyone can be an armchair quarterback with a keyboard, only leaders actually change the world.

Also, calling those who disagree with you assholes and trolls is rather assholish.

At present SS seems to be an unworkable mish-mash of government-secured retirement investing and social welfare. To my mind, the crucial function of SS is to provide a minimum standard of living to people who cannot earn a living-due to old age, disability, or the stinginess of their employers. 

It would make more sense to me to detach this benefit from any concept of public retirement fund and charge progressive (broadly defined, perhaps to include capital gains at the same rate as earned income) income taxes to meet this cost, having taken a sober look at probable future demographics to estimate what sort of benefit can reasonably be expected to be sustainable. 

I am disturbed the concept of privatizing SS by setting up "FDIC-insured IRAs." Such vehicles would a) be restricted to federal bonds, and thus be functionally (in terms of ROI) indistinguishable from what we've got now or b) an invitation to moral hazard. 

Let's let the government do what the market cannot, take care of people whose work won't fetch a living wage. No more, no less. Of course, we'd all be better off if we took personal responsibility for our neighbors, but I'm not holding my breath. 

Can anyone characterize ROI for social security taxes, say for a worker who worked from 1940 till 1985 or 1960 till 2005 compared to a couple of private, uninsured strategies?

I stand by my use of "league of craven acephalic nepocrats and fools."

@Dave: Your article is circa 1998.  There have been some serious developments since then, such as two recessions, the housing bubble and record-low interest rates.

Even the Social Security Administration has its doubts:

"The last 5 Trustees Reports have indicated that Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) Trust Funds would become exhausted between 2037 and 2041 under the intermediate set of economic and demographic assumptions provided in each report. If no legislative change is enacted, scheduled tax revenues will be sufficient to pay only about three fourths of the scheduled benefits after trust fund exhaustion."

@SlapShot
I don't think there's really any argument between you and Dave-demographic reality implies that the rate of SS taxation will have to be increased to keep pace with payouts-the sooner the better if we want to keep things the way they are. 

The SS Admin says in it's not so fast fast facts, "As reported in the 2008 Trustees Report, the shortfall over the next 75 years is 1.70% of taxable payroll." I read this to mean that increasing SS taxation by 1.7% total right now (or in 2008) would keep things solvent for another handful of generations. Elminating the income ceiling-as Dave suggests-would, as far as I can tell, reduce this increase. (you can see all the cool charts at http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2008/fast_facts08.html)

You imply that DIY investments using insured vehicles would outperform SS witholding and repayment. This may or may not be true (http://www.angrybearblog.com/2009/03/social-security-return-on-investment.html suggests not http://politicalcalculations.blogspot.com/2007/01/approximating-social-securitys-rate-of.html suggests so-but it points me right back to the tension I tried to tease out earlier-SS as government run retirement plan vs. SS as insurance of basic livelihood. 

I think SS should be doing the latter and individual people should be doing the former. If by paying tax I can ensure that all people have their basic needs met in a reasonably efficient manner-I'm willing to do that. This doesn't mean that I'm going to treat my tax contribution as an investment or put one penny more than necessary in there, though. 

It's hard for me to imagine any kind of investment currently insured through FDIC that I'd like to park retirement money into at my age (29). Talk about a crappy rate of return. And as I said above, I rue the day that the feds would qualitatively expand the scope of that insurance-now that's a bailout!

Given that the top 1% of earners control 50% of the wealth, and the top 10% of earners own 80% of the wealth, and contribute a meager fraction of SS dues, well...

Usa money is backed by what not the gold standard ... basically Monopoly money. This thread has become a pissing contest to see who knows more facts.

Japan:

"The pension reform bill, approved by the lower House of Representatives with the backing of Prime Minister Keizo Obuchi's ruling political coalition, will pare core public pension benefits for new retirees by 5 percent and gradually raise retirement age to 65 from 60. 

The reductions, which will take effect next month, will slice deeply into the benefits of Japanese retirees. For example, the government said the lifetime retirement benefits claimed by a typical salaried worker age 40 today could be as much as 20 percent lower than what he or she would have received previously." 

and:

"According to the OECD's "Pension at a Glance 2009″ report , Japan's public pension system is expected to provide 33.9% of salary as pension to workers entering the workforce in 2009. This is the second lowest figure in the OECD, with only Britain trailing Japan. The OECD average for public pension payouts is 59% of salary." 

Numerous economists are seriously doubting the ability of Japan's national pension plan to weather their demographic shift.  Same with much of Europe, who we're apparently supposed to be more like according to folks 'round these parts.

@Lojasmo: Why increase SS withholdings when this same problem will occur again and again every time there is a variation in generational population?  Why not fix the system for the better?  From your cited article about Japan:

The government estimates that the premium will be 29.5% (of wages) in 2025 assuming that the elderly ratio becomes 25.8 %. If the ratio becomes 28%, the premium will be higher.

So 30% for SS/Medicare on top of 20-40% in federal income taxes and another 3-10% in state income taxes?  Yep, screw those rich people, they deserve to pay 90% of their income in taxes. It is unsustainable.

SlapShot: you keep insisting the SS system is broken, but you yourself write that the trust fund won't be exhausted until 2037-2041. That's 3 decades away. Plenty of time for minor tweaks, like what Reagan and Tip O'Neal agreed to in the 1980s, to work.

Also: why are you worried about a 25% reduction in benefits in 30 years if we do nothing? Doesn't sound like a big deal to me. This sounds more like an extremely successful government program that is working well and needs minor changes to allow for a major generational shift. 

If I tell you my car is broken, you'd assume that it is not working now, not that it's scheduled to be slightly less effective in 30 years. So why do you say that SS is broken?

@WTF: You assume that the privatization would have shifted SS funds solely to the market.  There are numerous financial instruments that can withstand market volatility and are FDIC-insured.  

@wageslave: To continue on your analogy, your car is still running, but the check engine light is on and you're now getting 10 mpg as opposed to the 25 mpg it used to get -- not to mention it's burning oil.  Something is wrong with the system, and it needs to be fixed before your car breaks down and needs much more expensive repairs.

@Dave: You have a very pessimistic view of people in general, and wealthy people in particular.  When I refer to people being able to "invest," I'm talking about utilizing the same funds that would be going to Social Security -- not additional funds.  Secondly, investing as little as $25 per month over 45 years will yield nearly $100,000 for the retiree.  Since our government is already pumping the "surplus" in government bonds, why not allow the worker to do that instead?  It would eliminate another huge part of the government bureaucracy.  

And, as far as bailouts go: You're spot on.  Wall St. shouldn't have been bailed out.  By rewarding failure, a horrible precedent has been set regarding "too big to fail."  In my opinion, smaller, more responsible banks should've used any TARP-type funds to buy up the pieces of the failed behemoths.  Problem is, you insinuate that capitalism failed when in reality it was the government-sponsored entities Fannie Mae and Freddie Mac that loosened lending guidelines and issued the bundled investments that precipatated the economic recession.  Anyhow, going forward do me a huge solid and please be sure to include GM and Chrysler in future demonization of gov't bailouts -- because they made out like bandits as well in complete circumvention of bankruptcy law.  And the UAW?  Essentially stole from secured creditors during the "reorganization."

You're also absolutely correct in stating that our economic system is broken; that is, our public sector is becoming too large and bloated.  If you're looking for the #1 reason that (primarily) blue states are facing huge budget deficits and potential insolvency, look no further than public sector pensions/wages/employment.

@Bruce: So to h*ll with the rest of us who won't be utilizing the system within the next 40 years?  I'm trying REALLY hard to figure out why people like yourself don't want the system reformed, because it clearly needs it.

Somewhere buried between ideological arguments and name calling, somebody asked a pertinent question: "can anyone characterize ROI for social security taxes...?" Sure, over the history of the program it's been about 1.5-3%. (Those on left and right can easily manipulate the data to suggest something outside that range for their own purposes, but objectively, that's basically it.) It varies depending on, of course, how much you paid, at what age you retired, at what age you died, and if you have a survivor who was also a beneficiary of your social security (and what age that survivor died).

It's an ideological argument for SlapShot and company to say something like "that doesn't even outpace inflation" or "you could put your money in a savings account and earn more." It's an ideological argument for TimK and company to say something like "but, there are no other reasonable options because banks and the stock market can't be trusted."

Save it. You're not going to convince anybody in a forum like this.

The best all of us can do in a forum like this is to maintain civility (sorely lacking from many here), present a new perspective, and honestly find the focus of an issue like this.

So, here's my best shot at that. It's not really relevant whether or not social security as a system is sustainable. It's not really relevant whether or not a push for "privatization" is an effort by a private sector eager to exploit somebody. What's relevant: what's the role of government? Do we want government (at some level: federal, state, local) to provide a minimum amount of cash to assist the elderly in retirement? If so, can we stop calling social security an investment or insurance program? It's not. If so, can we talk about fairness, i.e. taxing income above $120k and paying in proportion to the amount an individual contributed versus paying a set minimum/need-based amount? If not, can we talk about some mandate (or mandate-like) to contribute to an individual savings/investment account of some sort (FDIC insured or not)? If not, can we talk about what might fill the void now occupied by social security? Maybe some tax credits/breaks for private charities that would help provide for the elderly? How about some tax credits/breaks for families who care for elderly grandparents in their homes?

A lot to discuss. A lot of options. But, only one ideological question: what's the role of government? Not one angry entry addressed that question directly. Just take a poll on that question and move on graciously, civilly, and constructively to the others. That's how it works in our society (or that's how it's supposed to work).

I might add, these economics of the 1930s era, are not a lot different than the economics of the 2010 era.

We have old age, unemployment, burdens of widows and fatherless children - have times really changed?

Slapshot, I agree our government is bloated, especially the military. If we shut down the empire we'd have a whole lot more money to work with.

I also think our financial sector is bloated. It produces little besides fictional wealth that can disappear in an instant. As the stock market is relevant to this discussion, I am curious as to where people think the profits made from investments come from, and why investors think they are entitled to "passive income" (love that phrase). Does the labor of people who work at said companies generate the wealth? If so, why do investors get any? Because they risked lending money to support the companies? Actually 99% of stocks traded are speculative -- the money goes to other speculators -- you're not "supporting" a company. Only with Initial Public Offerings does the investor's money go to supporting the company. So I don't really understand why speculators deserve a return. 

I think I'm about done with this thread. Thanks for the food for thought and diverse opinions expressed without censorship. And welcome brother Jim -- it was your comment on the snowmobiling thread that inspired this one. I think I'm done. See y'all downstream.

I agree ... I'm done with this thread.

Don't give up on America people, we are still a lot better off than a lot of people in other nations.

Take care everyone.