Do we need a social security program? (now with poll!)

Interloper · Post by **Interloper** » Sat Dec 11, 2004 9:13 pm

I voted to nix SS, but, I do support it for those who truly cannot work. I do not support it as a retirement income. I am planning and saving for retirement right now as if I will get not a single penny from SS. I think it's the wise thing to do. I do not want to be dependent on the gov't to sustain me in my retirement years. I really wish they'd at least let us take half and invest it into a fund for us only, not to be shared among the populace. (By us I mean your own personal account that stays with you and withdrawn and invested as you see fit.) It's a broken system, that much is obvious, so I really hope they make some drastic changes to it.

Kraken · Post by **Kraken** » Sun Dec 12, 2004 11:50 am

Today's news (or rumor) is encouraging. Bush will supposedly propose indexing the annual cost of living adjustment to the price index instead of the wage index, so that bennies will keep pace with price inflation, not earning power. As you would expect, The Boston Globe casts this as a benefit cut, but I don't consider reducing the rate of future growth a "cut". It is a very sensible move, very similar to one point of the Moynihan plan that I explained on the first page. The SS benefit should track the real cost of living, rather than the growth of wages. Past indexing has already brought SS to the forefront of the income curve and significantly reduced poverty among the elderly; future wealth gains properly belong to wage earners. SS troubles didn't start until Congress automated the COLA in the first place. We don't index the minimum wage to inflation; why should we index the retirement benefit at all?

I am not alarmed that my monthly payment 20 years from now will be 6% lower than it might have been. Hooray for you, Mr Bush.

As a lame duck with a friendly Congress, Bush has a historic opportunity to reform SS. If he can put the program on a more stable path without relying on debt, his legacy will be assured. Let's hope he doesn't screw it up, like Clinton botched his chance at healthcare reform. These opportunities come along very seldom.

Interloper wrote: I am planning and saving for retirement right now as if I will get not a single penny from SS. I think it's the wise thing to do.

Yes it is wise, and good luck with that. May you remain healthy and continuously employed for the next 40 years in a high-wage occupation that permits you to save some serious money. Few of us are so fortunate.

Laura · Post by **Laura** » Sun Dec 12, 2004 2:43 pm

I just read a very interesing article in the Los Angeles Times on the surprising health of Social Security even if no changes are made. The median annual benefit today is $14,209. That will rise to about $18,500 in 2042, when the surplus will be exhausted. At that point, there will be a 25% drop to $14,000. With it being only supported by the payroll tax, it will rise to $19,590 in 2080. This does not sound like the death of Social Secuity that I have been reading about. I would be willing to take a 25% cut today to keep the system healthy as I think we are paying out too much, especially to well off retirees.

noxiousdog · Post by **noxiousdog** » Mon Dec 13, 2004 11:11 am

Laura wrote:I just read a very interesing article in the Los Angeles Times on the surprising health of Social Security even if no changes are made. The median annual benefit today is $14,209. That will rise to about $18,500 in 2042, when the surplus will be exhausted. At that point, there will be a 25% drop to $14,000. With it being only supported by the payroll tax, it will rise to $19,590 in 2080. This does not sound like the death of Social Secuity that I have been reading about. I would be willing to take a 25% cut today to keep the system healthy as I think we are paying out too much, especially to well off retirees.

Are those inflation indexed numbers?

Kraken · Post by **Kraken** » Mon Dec 13, 2004 12:37 pm

Laura wrote:I just read a very interesing article in the Los Angeles Times on the surprising health of Social Security even if no changes are made.

I have read arguments saying that the "crisis" is mostly artificial, manufactured for political advantage and amenable to minor tinkering. I have no citations to back it up; just pointing out that conventional assumptions are always worth questioning.

effidian · Post by **effidian** » Mon Dec 13, 2004 4:10 pm

Here is a 2001 report from the Social Security Advisory Board. From the report, any of the following three things sound like they would have maintained SS benefits as is.

* Increase payroll tax by 2% in 2002 OR
* Increase payroll tax by 2.4% in 2020 and another 2.4% in 2050 OR
* Make all earnings subject to payroll tax in 2002.

Since this was 2002, the numbers for the first might be a little different since we didn't make that time. The report has a lot of good information about SS in general, and it certainly is not as drastic a problem as I had believed before reading the report (it is, however, still a problem).

Laura · Post by **Laura** » Mon Dec 13, 2004 5:16 pm

It would be inflation adjusted though I don't know what numbers they used. The only increase in benefits is through cost of living index.

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Do we need a social security program? (now with poll!)

Do we need some type of SS program?