COMMENTS on SOCIAL SECURITY

It's interesting to note that even in the Valhalla of Socialism, Sweden, citizens enrolled in their equivalent of Social Security are allowed to have 'Personal Accounts'. Of course, that's true for our Senators, Congressmen and Federal government workers as well.

What's more, those with Keogh or IRA or 401(k) plans don't seem to be complaining about their inability to handle their accounts in the face of the vagaries of economic fluctuations. After all, no one is forcing them (in fact there are some restriction on how the money can be invested) to put their money into speculative ventures and if they don't like the risk, they can move their money into index funds or bonds or annuities or CD's or even a bank or credit union. It would appear that none of them have blown their nest eggs on Brazilian Coffee Futures, and yet are enjoying a better yield on their investments than the 'princely' 1% or so currently provided by Social Security.

Things are also different today than when Social Security was first enacted in 1935. At that time life expectancy was 63 years while the retirement age was 65, there were 16 payroll taxpayers for every retiree, and the payroll tax was around 3% with an income cap for payroll deductions of around $10,000 (inflation adjusted).

Today life expectancy is in the 80's and the retirement age has been moved up to 67 for some retirees, there are 3 taxpayers for every retiree, and the payroll tax is 12.4% while the income ceiling for this tax has been raised to $90,000.

In the 'out years' the taxpayer to retiree ratio will decline to 2:1, life expectancy will continue to go up and the 'Baby Boomers' will flood the ranks of retirees. What's more, Social Security payments will outpace INFLATION, since they're INDEXED to increases in SALARIES rather than COST of LIVING.

To listen to DEM Senate minority leader Harry (RETRO) Reid, one would think things have not changed since 1935. WRONG!! They have. We cannnot afford to live in the past. However, while something needs to be done, this 'crisis' is more like a 'wasting disease' such as AIDS or TUBERCULOSIS, than an acute illness like APPENDICITIS. That does not make it any less lethal or minimize the need for intervention.

If we implement 'Personal Accounts' as part of the solution, we should also be aware that there will be transition costs (additional borrowing) that would not be there if we simply let things go until the whole 'Ponzi Scheme' collapses.

THOUGHTS ON SOCIAL SECURITY AND MEDICARE
http://members.fortunecity.com/veritas1/aopedpt2.html#PART2093

These transition costs will be trivial and temporary compared to the financial debacle that will occur if we don't intervene before the current system eventually IMPLODES.

Privatization as a component and/or option in Social Security will happen.

Those who most oppose privatization and reform (mostly Dems, but also lobbying groups like AARP), have a vested ideological interest in 'The Government as Nanny', as well as a more pragmatic concern that Social Security Bureaucrats as well as 'camp followers' like AARP employees, who like Government Bureaucrats tend to be reliable Dem voters and contributors, will start to lose their jobs in a more privatized environment. Of course, AARP can play it either way vis-a-vis privatization since they also sell Mutual Funds. Nevertheless, they don't like the added competition that privatization would bring.

If the ranks of those dependent on Government for all their problems, begin to thin out, then the need for the Misery Maggots (Dems) who feed upon these people, also begins to lose its reason for being. That was one of the side effects of Welfare Reform (under Clinton no less), so the Misery Maggots know full well what awaits them if something similar happens with Social Security. That's why they screech hysterically when faced with even a modest phased in 1% to a maximum of 4% of payroll taxes going to personal accounts. Even such a small percentage of TAXES no longer going into their coffers is begrudged by these Misery Maggots.

If the Misery Maggots really wanted to forestall Private Accounts, they would remove Social Security surpluses (while we still have them... as we do today) from General Revenue and put them into a 'real' TRUST ACCOUNT that generates the same rate of interest as Treasury Bills, and that could NOT BE SPENT on other GOVERNMENT PROGRAMS as it is now. Had something like this been done earlier, there would be no 'Solvency Crisis' today or even in the 'out years'.

Of course doing this would have the same effect in terms of 'taking money from the Misery Maggots' as diverting a piddly 1% to 4% to on a voluntary basis from payroll deductions out of their coffers. Either way, the Misery Maggots would have less money to spend, and that's why they're not even putting the notion of a 'real' SOCIAL SECURITY TRUST FUND on the table for negotiation.

It's not really about 'Private Accounts', but about keeping the Misery Maggots from spending more money. If people ask what happened to the Social Security Surplus (i.e. the extra money from Payroll Deductions that was left over after the current Social Security recipients had been paid) that was supposed to be there for the future, the answer is:

"The Misery Maggots already SPENT IT!!!"

The Misery Maggots try to scare the people with the bugaboo of risks associated with Private Accounts. Meanwhile, they demonstrate their concern for future Social Security recipients by SPENDING the Social Security SURPLUS on their pet PROGRAMS. Yet they expect the people to trust them with their money. LOL!!

The clients of these Misery Maggots (i.e. the people Dems currently claim as their 'dependents') are not likely to be endowed with overwhelming amounts of cognitive competence or skepticism or rationality, so they most likely are not aware of what's being done to them. The Dems' control of the Public Education System, the Media, and the Manufacturers of Pop Culture has seen to that.

* EMPIRICISM and MATH/SCIENCE EDUCATION (12-17-04)
http://members.fortunecity.com/veritas1/aopedp12.html#PART12DEC02

* DUMBING DOWN and EDUCATION
http://members.fortunecity.com/veritas1/aopedix1.html#education

That would explain why some of them believe with Metaphysical Certitude in 'Global Warming' whose effects (if warming or its effects even exist) will be felt sometime in the 'out years' if at all, while they adamantly refuse to believe that if we don't fix Social Security in the next few years (we have a window of opportunity until 2018 to act before all attempts to fix things will be too late and in vain... money paid to retirees will exceed money coming in from taxpayers), things will somehow magically right themselves.

Never mind that we know more about Economics (though not all that much) than about Ecology and/or Climatology, and have a significantly better chance of implementing effective course corrections in a rather narrow and controllable economic area like Social Security, than attempting to understand, diagnose, predict, command, and control Nature.

As they see it, things will felicitously turn out OK in spite of the 'Baby Boomer Pig' emerging from the vent of the demographic python and dropping into retirement, while the pool of highly skilled, highly paid workers to pay for all this, becomes dramatically depleted. They somehow hope/expect that illegal immigrants will pick up the tab for retired 'baby boomers'. It is clear that uninformed and unsupported blind faith is in evidence here, rather than reason.

A few years ago, a survey indicated that about 30% of its respondents believed that the Government has vast stores of money derived from income completely independent of taxes (maybe Uncle Sam has some sort of rich 'sugar daddy' that the rest of us know nothing about??). In a different survey, about the same proportion (30%) believed that the sun revolves around the earth. It's highly probable that the same 30% was contacted by both surveys.

It's also likely that this 30% is contained within the ranks of the close to 50% of the population that doesn't pay any Income Taxes. The idea that the almighty Government is supported by taxes is somehow off their radar. They can't bring themselves to believe that if the system is not reformed, only dramatically higher payroll taxes and reduced benefits and massive borrowing may have an outsdide chance of keeping it from collapsing. They don't realize that the system would already be in trouble today if payroll taxes had not been increased in the 80's.

Many of the Misery Maggot's 'dependents' continue to beleive that they have their very own Social Security Account that contains all the money they put into it during their working years, awaiting them at their retirement. They are not aware that it's a 'pay as you go' system, and the money they put into it has already been spent on those who preceded them. They also are not aware that money going into Social Security is treated as general revenue by the Government. The so-called Social Security Trust Fund is only a bunch of IOUs.

The more 'sophisticated' in this bunch (blithely ignoring history) believe that more taxes and reduced benefits are not necessary, and that the whole system can be set right (shades of the previously mentioned 'sugar daddy') by some sort of mystical increase in wealth derived from the Government simply borrowing or printing more money... without any thought given to the consequential inflation and devaluation that comes from this. Boy would that fatten up the buying power of their Social Security checks.

* ECONOMIC ISSUES
http://members.fortunecity.com/veritas1/aopedix1.html#economy

Of course the Dems and their Mendacious Media Megaphones will not lift a finger to alleviate these misconceptions, and in fact encourage them.

To be fair about it, the relative indifference of some, and the outright opposition of others, to any attempts to change things in order to address the Social Security 'Solvency Crisis' is not entirely due to ignorance. It should not come as any big surprise that those who expect to get MORE from their Social Security BENEFITS than they put in via PAYROLL DEDUCTIONS (in some cases, practically nothing), are much more likely to OPPOSE CHANGE (even if it's necessary to save the system), than those who expect to get LESS than what they put in.

So it goes.