Social Security

[opewon]

Why is it no one is noticing the problems with Social Security? Since Congress opted out of social security and went with their "new plan" why isn't anyone posting on this matter? This is a serious issue for everyone involved here. Reps and Senators alike are running this country into the ground and no one is saying anything. Is it me or have we all gone complacent in our thinking....any thoughts?

 

[Mr. P]

Why is it no one is noticing the problems with Social Security? Since Congress opted out of social security and went with their "new plan" why isn't anyone posting on this matter? This is a serious issue for everyone involved here. Reps and Senators alike are running this country into the ground and no one is saying anything. Is it me or have we all gone complacent in our thinking....any thoughts?

I think it’s just “you”.

Groups not required to pay Social Security
There are a number of groups of workers who are exempted from Social Security taxes:
• Federal employees hired before 1984 who elected to continue to participate in the federal retirement program instead of receiving part of their retirement under Social Security coverage.

http://en.wikipedia.org/wiki/Social_Security_(United_States)

• It is not true that Congressmen do not pay into the Social Security fund. Since 1984 they have paid into the fund just as most everyone else does. (A few odd exceptions to the Social Security program still exist, both inside and outside of government, but not for members of Congress.)
• It was true prior to 1984 that Congressmen did not pay into the Social Security fund because they participated in a separate program for civil servants (the Civil Service Retirement System, or CSRS), but that program was closed to government employees hired after 1983:
In 1983, Public Law 98-21 required Social Security coverage for federal civilian employees first hired after 1983 and closed the Civil Service Retirement System (CSRS) to new federal employees and Members of Congress. All incumbent Members of Congress were required to be covered by Social Security, regardless of when they entered Congress. Members who had participated in CSRS before 1984 could elect to stay in that plan in addition to being covered by Social Security or elect coverage under an 'offset plan' that integrates CSRS and Social Security. Under the CSRS Offset Plan, an individual's contributions to CSRS and their pension benefits from that plan are reduced ('offset') by the amount of their contributions to, and benefits from, Social Security.

http://en.wikipedia.org/wiki/Social_Security_(United_States)
http://www.snopes.com/politics/taxes/pensions.asp

 

[ScreamingEagle]

Why is it no one is noticing the problems with Social Security? Since Congress opted out of social security and went with their "new plan" why isn't anyone posting on this matter? This is a serious issue for everyone involved here. Reps and Senators alike are running this country into the ground and no one is saying anything. Is it me or have we all gone complacent in our thinking....any thoughts?

For many it is considered to be a false crisis and so they don't even want to deal with it.
Here is the argument:

Currently Social Security takes in more than enough money to pay benefits. The Social Security Surplus is estimated to reach $3.0 trillion by the year 2018. Unfortunately, the entire trust fund surplus is borrowed every year by the government to pay for the operations of the U.S. government. The trust fund is made up of special interest bearing federal bonds (currently whose average yield is 9.5 percent) which are non-callable and have no maturity date. They are backed by the faith that future generations of U.S. citizens will continue to pay into the fund at a sufficient rate to meet the benefits due the Social Security beneficiaries. If the money going out to pay benefits ever starts to exceed the money coming into the trust fund then eventually the trust fund will have to make up the difference. If, and only if, the economy limps along at about one half the annual rate of growth (1.7 percent) of the previous 30 years will the money collected be less than the money needed to pay the benefits.

Without Social Security as it exists today, about one-half of all senior citizens would have incomes below the poverty line. Contrary to the current propaganda, the retirement of the "baby boom" generation will not bankrupt Social Security. In fact, that generation will be retired long before there is any projected shortfall from a low growth rate economy. What if the dismal 1.7 percent growth rate used by spreaders of the "crisis" propaganda come true? Would the wage and salary earners of those years suffer an undue burden supporting retirees? Not a chance! If the annual earnings were not capped at today's levels, and all wages and salaries were subject to Social Security taxes, an additional $67 billion would go into the Social Security Trust Fund. Less than 10 percent of the wage and salary earners would be affected by such a change.

The basis of the "crisis" propaganda is their belief that future wage and salary earners will not be able to meet Social Security's obligations out of a projected inflation adjusted increase of 30 percent in real wages. This belief is based on the experience of past years in our country, the majority of wage and salary earners have seen a decline in their pay. The most important solution to guaranteeing the security of the majority of future generations of retirees, is to increase the wages and salaries of the majority of America's employees by their getting a better share of the income resulting from their actual work. In addition we need to maintain a higher rate of economic growth than the dismal 1.7 percent projected by the promoters of "privatization" in their campaign to "fix" the Social Security "crisis".

"Privatization" will divert tens of billions of dollars from Social Security Funds and give it to Wall Street financial and investment services tycoons in administrative and brokerage fees. Their firms are anxious to get Social Security "privatized" before the American people rediscover that stocks can go down as well as up. There are a number of ways to raise revenue for the Social Security System which would make it more fair than "privatization". For example, we could tax income not resulting from wages or salaries such as capital gains. Income to investors derived from capital gains in recent years has increased significantly more relative to income from wages and salaries.

Social Security has faced long-term financing problems in the past for which workable options were found without destroying the safety net of our children and grandchildren that was created by preceding generations of Americans. Here are some statistics that the "privatizers" want us to forget in the process of destroying the safety net of Social Security.


1. More than two-thirds of elderly households rely on Social Security for half or more of their income. Social Security is safety-net income for millions of Americans.

2. Currently, 44 million people receive Social Security benefits which includes 7 million survivers of workers who have died, 6 million dependent children, and 4 million disabled persons.

3. Only 45 percent of American families get pension income.

4. Half of the elderly households have income from savings that totals less than $110 per month.

5. The number of Americans filing personal bankruptcies reached more than 1.5 million. It is not a good idea to hand over safety-net Social Security money to millions of people who have disastrous records of handling personal finances.

6. If Social Security is privatized into personal accounts, cost of living adjustments will no longer be guaranteed. Even a modest 3 percent inflation rate cuts the purchasing power of a benefit check by 26 percent in 10 years and by 45 percent in 20 years - when most people start receiving their benefits.

7. Women - often in the work force 10 years less than men and likely to live 5 years longer - will not, under personal stock market accounts, be able to get actuarially fair annuities at retirement to last them the rest of their lives.

8. The stock market lost 45 percent of its value between 1965 and 1978. What will happen to the personalized account values of those persons who retire during such a market plunge in the future?

Our present Social Security System has an administrative cost that is just 0.7% but by contrast the U.S. life insurance industry's operating costs average 12-14% and often exceed 40%. A "privatized" retirement system in Chile, often pointed to as an example by supporters of "privatization", runs close to 30% of revenues due to the fact that the competing mutual fund managers and portfolio managers all have their fees. The Chilean model is based on a compulsory IRA scheme in which all covered employees put 10% of their earnings into one of several approved mutual funds which invest their holdings in the stock and bond markets. Chilean employers are relieved of making any matching contributions. So much for the advertized "efficiencies" of privatized systems over Social Security's more than 60 year history of paying its pensioners without the volatility and scandal associated with the financial markets in the U.S. It is conservatively projected that as many as half of all future Chilean retirees will draw a poverty level pension and the poorest of them will receive a public pension check equal to less than $2 a day.

Waste, mismanagement, and fraud among stock brokers and brokerage firms concern securities regulators. Privatization will put tens of millions more unsophisticated investors in the position of dealing with fraud and chicanery without the resources to sue brokerages on an individual basis.

CONT:
http://web.pdx.edu/~psu01435/sscrisis.html

 

[Annie]

Why is it no one is noticing the problems with Social Security? Since Congress opted out of social security and went with their "new plan" why isn't anyone posting on this matter? This is a serious issue for everyone involved here. Reps and Senators alike are running this country into the ground and no one is saying anything. Is it me or have we all gone complacent in our thinking....any thoughts?

IT's dead.No change for foreseeable future.