A Union's View of Social Security

[PoliticalChic]

The following, "Social Security Benefits Us All," was produced by the New York City United Federation of Teachers. They seem to fear attacks on the program, and make some interesting suggestions.



1. "Social Security is once again under attack by conservatives who are fanning false fears of the program going broke as an excuse for cutting benefits. It is important to counter their rhetoric with facts, including the far-reaching impact of this vital program on our state as well as the nation..... a national coalition, Strengthen Social Security, shows how Social Security, Medicare and Medicaid benefit New York State. The coalition — which is made up of 320 national organizations including the AFL-CIO’s Alliance for Retired Americans, to which all UFT retirees belong — found that in 2010, nearly 3.3 million people in New York State received $44.8 billion in Social Security payments.

a. More than 2.9 million people in the state received $34.1 billion in Medicare benefits, and 5.2 million New York residents received $49.4 billion in Medicaid benefits. That means New York residents received an overall $128.3 billion in federal benefits,...

b. Over 1/3 of NYState recipients were not retirees: 4.2% were spouces; 7.4% were widow(er)s; 7.9% were children; 15% were the disabled; and 65.5% were retirees.

c. The nearly 3.3 million New Yorkers who received payments in 2010 represented 16.9 percent of all state residents, one out of six people.... The average benefit to New York residents in 2010 was $13,641. This single government program kept more than 1 million New Yorkers out of poverty that year.




2. A 30-year-old who earns about $30,000 per year and has a spouse and two young children will over his or her career receive Social Security insurance protection equivalent to a private disability policy of $465,000 and a life insurance policy of $476,000..... It represents the best of American values — rewarding work, honoring our parents, caring for our neighbors,.... Social Security is an earned benefit, not — as some of its critics call it — an entitlement.




3. The recently released 2013 Social Security Trustees Report shows that the program has sufficient funds to pay full benefits until 2033. Even if Congress makes no changes, the program would still after 2033 have sufficient funds to pay 77 percent of scheduled benefits. Many respected actuaries believe that any future shortfall will be covered by a return to an expanding economy.

To ensure that Social Security can pay full benefits in the future, most people in every generation surveyed by the National Academy of Social Insurance prefer the following package of changes:

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security so that the 5 percent of workers who earn more than the cap, currently $113,700, pay into Social Security throughout the year, as other workers do.

• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent.

• Increase Social Security’s basic minimum payment so that a person who has paid into Social Security for 30 years can retire at age 62 or later and not be poor.
• Increase Social Security’s cost-of-living adjustment to more accurately reflect the level of inflation experienced by seniors. (This is the opposite of a proposed change to a “chained” cost-of-living measure that would grow more slowly than the current calculation.)
Social Security benefits us all | United Federation of Teachers




So.....ya' got a problem wit' dat?

 

[Spoonman]

all well and good, but i think unions should be more concerened about all the pension plans they have negotiated on their members behalfs going broke

 

[PoliticalChic]

all well and good, but i think unions should be more concerened about all the pension plans they have negotiated on their members behalfs going broke

I have friends in that union....that being said, let me say two things:
1. I have no problem with unions asking for the world. We elect officials to make the hard....the correct...decisions. They are the ones who say yea or nay to the union requests.
They are the blame for outlandish pensions.


2. Now...speaking of outlandish pensions...I know for a fact that there are teachers who wound up with a 30% increase in pay when they retired. Get that? 30% more than they were making while employed.

Not less....more.

Plus social security.


Did I just ruin your day?

 

[Spoonman]

all well and good, but i think unions should be more concerened about all the pension plans they have negotiated on their members behalfs going broke

I have friends in that union....that being said, let me say two things:
1. I have no problem with unions asking for the world. We elect officials to make the hard....the correct...decisions. They are the ones who say yea or nay to the union requests.
They are the blame for outlandish pensions.


2. Now...speaking of outlandish pensions...I know for a fact that there are teachers who wound up with a 30% increase in pay when they retired. Get that? 30% more than they were making while employed.

Not less....more.

Plus social security.


Did I just ruin your day?

you see that with police and firemen a lot too. I think the fact that you can retire at a higher rate then you worked at is wrong. it's one thing if it something a company choses to offer becasue they have the profit margins to justify it. but when it is a tax payer funded program, it is even more wrong

 

[PoliticalChic]

all well and good, but i think unions should be more concerened about all the pension plans they have negotiated on their members behalfs going broke

I have friends in that union....that being said, let me say two things:
1. I have no problem with unions asking for the world. We elect officials to make the hard....the correct...decisions. They are the ones who say yea or nay to the union requests.
They are the blame for outlandish pensions.


2. Now...speaking of outlandish pensions...I know for a fact that there are teachers who wound up with a 30% increase in pay when they retired. Get that? 30% more than they were making while employed.

Not less....more.

Plus social security.


Did I just ruin your day?

you see that with police and firemen a lot too. I think the fact that you can retire at a higher rate then you worked at is wrong. it's one thing if it something a company choses to offer becasue they have the profit margins to justify it. but when it is a tax payer funded program, it is even more wrong

So....who gets the blame?

 

[Spoonman]

I have friends in that union....that being said, let me say two things:
1. I have no problem with unions asking for the world. We elect officials to make the hard....the correct...decisions. They are the ones who say yea or nay to the union requests.
They are the blame for outlandish pensions.


2. Now...speaking of outlandish pensions...I know for a fact that there are teachers who wound up with a 30% increase in pay when they retired. Get that? 30% more than they were making while employed.

Not less....more.

Plus social security.


Did I just ruin your day?

you see that with police and firemen a lot too. I think the fact that you can retire at a higher rate then you worked at is wrong. it's one thing if it something a company choses to offer becasue they have the profit margins to justify it. but when it is a tax payer funded program, it is even more wrong

So....who gets the blame?

ask a liberal, well obviously bush lol

its hard to say because different situations have different players. if we are talking strictly teachers, i have to put the blame on government because they are the stewards of the tax payer dollar. unions will fight for all they can get. what incentive does an administrator have to fight for saving a tax dollar

 

[PoliticalChic]

you see that with police and firemen a lot too. I think the fact that you can retire at a higher rate then you worked at is wrong. it's one thing if it something a company choses to offer becasue they have the profit margins to justify it. but when it is a tax payer funded program, it is even more wrong

So....who gets the blame?

ask a liberal, well obviously bush lol

its hard to say because different situations have different players. if we are talking strictly teachers, i have to put the blame on government because they are the stewards of the tax payer dollar. unions will fight for all they can get. what incentive does an administrator have to fight for saving a tax dollar

Exactly.

I've posted that elected officials who have the power to sign contracts should be required to have insurance so that when they are out of office....the results of the contracts that they sign still redound onto them.

Then they'd have a reason for due diligence.

 

[Spoonman]

So....who gets the blame?

ask a liberal, well obviously bush lol

its hard to say because different situations have different players. if we are talking strictly teachers, i have to put the blame on government because they are the stewards of the tax payer dollar. unions will fight for all they can get. what incentive does an administrator have to fight for saving a tax dollar

Exactly.

I've posted that elected officials who have the power to sign contracts should be required to have insurance so that when they are out of office....the results of the contracts that they sign still redound onto them.

Then they'd have a reason for due diligence.

that is one of the major underlying problems with government and government jobs. no accountability. at least if something is a private enterprise there is profitability to be concerned with. the private enterprise is audited to ensure compliance with laws. the governemtn writes their own rules and judges themselves. there is no accountability.

 

[boedicca]

The following, "Social Security Benefits Us All," was produced by the New York City United Federation of Teachers. They seem to fear attacks on the program, and make some interesting suggestions.



1. "Social Security is once again under attack by conservatives who are fanning false fears of the program going broke as an excuse for cutting benefits. It is important to counter their rhetoric with facts, including the far-reaching impact of this vital program on our state as well as the nation..... a national coalition, Strengthen Social Security, shows how Social Security, Medicare and Medicaid benefit New York State. The coalition — which is made up of 320 national organizations including the AFL-CIO’s Alliance for Retired Americans, to which all UFT retirees belong — found that in 2010, nearly 3.3 million people in New York State received $44.8 billion in Social Security payments.

a. More than 2.9 million people in the state received $34.1 billion in Medicare benefits, and 5.2 million New York residents received $49.4 billion in Medicaid benefits. That means New York residents received an overall $128.3 billion in federal benefits,...

b. Over 1/3 of NYState recipients were not retirees: 4.2% were spouces; 7.4% were widow(er)s; 7.9% were children; 15% were the disabled; and 65.5% were retirees.

c. The nearly 3.3 million New Yorkers who received payments in 2010 represented 16.9 percent of all state residents, one out of six people.... The average benefit to New York residents in 2010 was $13,641. This single government program kept more than 1 million New Yorkers out of poverty that year.




2. A 30-year-old who earns about $30,000 per year and has a spouse and two young children will over his or her career receive Social Security insurance protection equivalent to a private disability policy of $465,000 and a life insurance policy of $476,000..... It represents the best of American values — rewarding work, honoring our parents, caring for our neighbors,.... Social Security is an earned benefit, not — as some of its critics call it — an entitlement.




3. The recently released 2013 Social Security Trustees Report shows that the program has sufficient funds to pay full benefits until 2033. Even if Congress makes no changes, the program would still after 2033 have sufficient funds to pay 77 percent of scheduled benefits. Many respected actuaries believe that any future shortfall will be covered by a return to an expanding economy.

To ensure that Social Security can pay full benefits in the future, most people in every generation surveyed by the National Academy of Social Insurance prefer the following package of changes:

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security so that the 5 percent of workers who earn more than the cap, currently $113,700, pay into Social Security throughout the year, as other workers do.

• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent.

• Increase Social Security’s basic minimum payment so that a person who has paid into Social Security for 30 years can retire at age 62 or later and not be poor.
• Increase Social Security’s cost-of-living adjustment to more accurately reflect the level of inflation experienced by seniors. (This is the opposite of a proposed change to a “chained” cost-of-living measure that would grow more slowly than the current calculation.)
Social Security benefits us all | United Federation of Teachers




So.....ya' got a problem wit' dat?

Yes, I do.

We'd all be better off if Social Security were privatized similar to the Chilean Model, with individuals owning their retirement accounts and the government not able to raid the funds.

The safety net for the truly poverty stricken should be funded out of general tax receipts.

 

[Spoonman]

The following, "Social Security Benefits Us All," was produced by the New York City United Federation of Teachers. They seem to fear attacks on the program, and make some interesting suggestions.



1. "Social Security is once again under attack by conservatives who are fanning false fears of the program going broke as an excuse for cutting benefits. It is important to counter their rhetoric with facts, including the far-reaching impact of this vital program on our state as well as the nation..... a national coalition, Strengthen Social Security, shows how Social Security, Medicare and Medicaid benefit New York State. The coalition — which is made up of 320 national organizations including the AFL-CIO’s Alliance for Retired Americans, to which all UFT retirees belong — found that in 2010, nearly 3.3 million people in New York State received $44.8 billion in Social Security payments.

a. More than 2.9 million people in the state received $34.1 billion in Medicare benefits, and 5.2 million New York residents received $49.4 billion in Medicaid benefits. That means New York residents received an overall $128.3 billion in federal benefits,...

b. Over 1/3 of NYState recipients were not retirees: 4.2% were spouces; 7.4% were widow(er)s; 7.9% were children; 15% were the disabled; and 65.5% were retirees.

c. The nearly 3.3 million New Yorkers who received payments in 2010 represented 16.9 percent of all state residents, one out of six people.... The average benefit to New York residents in 2010 was $13,641. This single government program kept more than 1 million New Yorkers out of poverty that year.




2. A 30-year-old who earns about $30,000 per year and has a spouse and two young children will over his or her career receive Social Security insurance protection equivalent to a private disability policy of $465,000 and a life insurance policy of $476,000..... It represents the best of American values — rewarding work, honoring our parents, caring for our neighbors,.... Social Security is an earned benefit, not — as some of its critics call it — an entitlement.




3. The recently released 2013 Social Security Trustees Report shows that the program has sufficient funds to pay full benefits until 2033. Even if Congress makes no changes, the program would still after 2033 have sufficient funds to pay 77 percent of scheduled benefits. Many respected actuaries believe that any future shortfall will be covered by a return to an expanding economy.

To ensure that Social Security can pay full benefits in the future, most people in every generation surveyed by the National Academy of Social Insurance prefer the following package of changes:

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security so that the 5 percent of workers who earn more than the cap, currently $113,700, pay into Social Security throughout the year, as other workers do.

• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent.

• Increase Social Security’s basic minimum payment so that a person who has paid into Social Security for 30 years can retire at age 62 or later and not be poor.
• Increase Social Security’s cost-of-living adjustment to more accurately reflect the level of inflation experienced by seniors. (This is the opposite of a proposed change to a “chained” cost-of-living measure that would grow more slowly than the current calculation.)
Social Security benefits us all | United Federation of Teachers




So.....ya' got a problem wit' dat?

Yes, I do.

We'd all be better off if Social Security were privatized similar to the Chilean Model, with individuals owning their retirement accounts and the government not able to raid the funds.

The safety net for the truly poverty stricken should be funded out of general tax receipts.

raid the funds, raise the age you are eligible to receive, decide col adjustments. I'll take a privatized fund anyday.

I have a suggesttion. lets have two options. you can continue to pay into SS and take advantage of the current system, or you can opt out and utilize a private method and not be eligible for SS benefits. Conservatives will retire comfortably and liberals will retire at 75.

 

[PoliticalChic]

The following, "Social Security Benefits Us All," was produced by the New York City United Federation of Teachers. They seem to fear attacks on the program, and make some interesting suggestions.



1. "Social Security is once again under attack by conservatives who are fanning false fears of the program going broke as an excuse for cutting benefits. It is important to counter their rhetoric with facts, including the far-reaching impact of this vital program on our state as well as the nation..... a national coalition, Strengthen Social Security, shows how Social Security, Medicare and Medicaid benefit New York State. The coalition — which is made up of 320 national organizations including the AFL-CIO’s Alliance for Retired Americans, to which all UFT retirees belong — found that in 2010, nearly 3.3 million people in New York State received $44.8 billion in Social Security payments.

a. More than 2.9 million people in the state received $34.1 billion in Medicare benefits, and 5.2 million New York residents received $49.4 billion in Medicaid benefits. That means New York residents received an overall $128.3 billion in federal benefits,...

b. Over 1/3 of NYState recipients were not retirees: 4.2% were spouces; 7.4% were widow(er)s; 7.9% were children; 15% were the disabled; and 65.5% were retirees.

c. The nearly 3.3 million New Yorkers who received payments in 2010 represented 16.9 percent of all state residents, one out of six people.... The average benefit to New York residents in 2010 was $13,641. This single government program kept more than 1 million New Yorkers out of poverty that year.




2. A 30-year-old who earns about $30,000 per year and has a spouse and two young children will over his or her career receive Social Security insurance protection equivalent to a private disability policy of $465,000 and a life insurance policy of $476,000..... It represents the best of American values — rewarding work, honoring our parents, caring for our neighbors,.... Social Security is an earned benefit, not — as some of its critics call it — an entitlement.




3. The recently released 2013 Social Security Trustees Report shows that the program has sufficient funds to pay full benefits until 2033. Even if Congress makes no changes, the program would still after 2033 have sufficient funds to pay 77 percent of scheduled benefits. Many respected actuaries believe that any future shortfall will be covered by a return to an expanding economy.

To ensure that Social Security can pay full benefits in the future, most people in every generation surveyed by the National Academy of Social Insurance prefer the following package of changes:

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security so that the 5 percent of workers who earn more than the cap, currently $113,700, pay into Social Security throughout the year, as other workers do.

• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent.

• Increase Social Security’s basic minimum payment so that a person who has paid into Social Security for 30 years can retire at age 62 or later and not be poor.
• Increase Social Security’s cost-of-living adjustment to more accurately reflect the level of inflation experienced by seniors. (This is the opposite of a proposed change to a “chained” cost-of-living measure that would grow more slowly than the current calculation.)
Social Security benefits us all | United Federation of Teachers




So.....ya' got a problem wit' dat?

Yes, I do.

We'd all be better off if Social Security were privatized similar to the Chilean Model, with individuals owning their retirement accounts and the government not able to raid the funds.

The safety net for the truly poverty stricken should be funded out of general tax receipts.

As you know, there are several Texas counties that opted out of social security.
They have a system that works like this:

"1. In the Alternate Plan, retirement benefits are a direct result of employee contributions. In each paycheck, employees contribute 13.9 percent of the their gross pay (6.1 percent from the employee, 7.8 percent from the county) to a private account. First Financial Benefits invests the accounts conservatively, Mr. Gornto said. The company guarantees a minimum rate of return of 3.75 percent to 4 percent on the accounts to safeguard employees’ benefits against inflation and severe drops in market rates.

2. Employees can elect to put their portion of the contributions into riskier investments, likemutual funds and stocks, potentially to generate more interest. At retirement, employees in the Alternate Plan can choose to take the money in a lump sum, take monthly benefits for a given time period or take a lifetime annuity, with slightly reduced benefits. Social Security is subject to whatever rules the federal government makes, Mr. Gornto said, and there is “not a guaranteed promise to pay any certain amount.”
http://www.nytimes.com/2011/09/18/u...y-works-in-galveston.html?pagewanted=all&_r=0

 

[SteadyMercury]

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security so that the 5 percent of workers who earn more than the cap, currently $113,700, pay into Social Security throughout the year, as other workers do.

Sounds good.

• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent.

Is this necessary after above adjustment to earnings cap?

• Increase Social Security’s basic minimum payment so that a person who has paid into Social Security for 30 years can retire at age 62 or later and not be poor.

This is pretty vague. Raise it to what? How are they defining poor?

If someone works at fast food restaurants for 30 years they were likely poor the entire time, should a goal of social security be to increase anyone's economic status at a certain age.

• Increase Social Security’s cost-of-living adjustment to more accurately reflect the level of inflation experienced by seniors. (This is the opposite of a proposed change to a “chained” cost-of-living measure that would grow more slowly than the current calculation.)

I've read people's cost of living peaks at some point then slowly goes down as we age. Maybe Bernike? If this is the case I'm not too concerned about exactly matching a rate of inflation.

 

[oldfart]

My first impulse was to respond with a snarky comment about PC's penchant for burning through a topic and starting a new thread rather than answer the issues brought up in the old one. While that is certainly true, this particular thread brings up some good ideas.

1. "Social Security is once again under attack by conservatives who are fanning false fears of the program going broke as an excuse for cutting benefits. It is important to counter their rhetoric with facts, including the far-reaching impact of this vital program on our state as well as the nation....."

I have always been a bit perturbed at the reasoning that because we might have to limit benefits in the future, the solution is to cut benefit now. If the object of such a cut were to assure the financial stability of the system, that would be one thing. But most of the rhetoric for cutting Social Security and Medicare comes from people who want to eliminate or severely reduce both programs and who use the funding arguments as justification for further reducing funding. This would be like advocating that the armed forces be eliminated because Congress will not fund ten new aircraft carriers, only eight.

3. The recently released 2013 Social Security Trustees Report shows that the program has sufficient funds to pay full benefits until 2033. Even if Congress makes no changes, the program would still after 2033 have sufficient funds to pay 77 percent of scheduled benefits. Many respected actuaries believe that any future shortfall will be covered by a return to an expanding economy.

Several good points here. First, the estimates change with the economy. It is possible that if we do nothing, economic growth could erase the entire shortfall. But it's probably not a good idea to rely on that. Second, the low point is not zero benefits, it's 77 cents on the dollar and doesn't stay that low very long. That's not a good outcome, but it probably is survivable.

To ensure that Social Security can pay full benefits in the future, most people in every generation surveyed by the National Academy of Social Insurance prefer the following package of changes:

• Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security so that the 5 percent of workers who earn more than the cap, currently $113,700, pay into Social Security throughout the year, as other workers do.

As I've noted in a previous post, the benefit formula raises benefits only 15% of the average adjusted earnings after the second inflection point, so even if benefits are not capped, increasing the wage base makes the system more solvent. I would favor an immediate increase of a substantial amount (say $200,000) which would generate most of the increased revenue potential and then phasing out the upper limit more quickly.

• Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2 percent of earnings to 7.2 percent.

I really don't see the reason for this. The DI fund needs a fix, but the OASI fund is in pretty good shape. I would favor an increase if it accompanied folding the UI system into Social Security, making benefits more uniform among states and providing better coordination of disability coverage, retirement coverage, and unemployment benefits to prevent simultaneous coverage.

What would make much more sense would be backup withholding on all personal service income. Then "independent contractors" would have enough withheld to at least cover their SECA liability, drastically reducing the amount of uncollectible accounts worked by the IRS.

• Increase Social Security’s basic minimum payment so that a person who has paid into Social Security for 30 years can retire at age 62 or later and not be poor.

I would favor an adjustment of the inflection points and a subsidy for early retirement in certain dangerous or physically demanding occupations. We already do this for military and certain polic and fire workers. Why not for foundry workers and agricultural labor? It reflects the fact that in my job I can work into my eighties, while many workers are "used up" by age 50.

• Increase Social Security’s cost-of-living adjustment to more accurately reflect the level of inflation experienced by seniors. (This is the opposite of a proposed change to a “chained” cost-of-living measure that would grow more slowly than the current calculation.)

I really cannot see a valid objection to measuring a cost of living for retired workers and using in COLA for retirement benefits.

Again, good topic!

 

[oldfart]

its hard to say because different situations have different players. if we are talking strictly teachers, i have to put the blame on government because they are the stewards of the tax payer dollar. unions will fight for all they can get. what incentive does an administrator have to fight for saving a tax dollar

Exactly.

I've posted that elected officials who have the power to sign contracts should be required to have insurance so that when they are out of office....the results of the contracts that they sign still redound onto them.

Then they'd have a reason for due diligence.

that is one of the major underlying problems with government and government jobs. no accountability. at least if something is a private enterprise there is profitability to be concerned with. the private enterprise is audited to ensure compliance with laws. the governemtn writes their own rules and judges themselves. there is no accountability.

I'm all for increased accountability! But the basic problem is that the law allows local governments to underfund retirement plans. Workers give up current pay for increased benefits, public employers can get away with not funding the retirement benefits, and later the chickens come home to roost. Rather than fight human nature, why not just require full current funding of public pension liabilities?

 

[oldfart]

We'd all be better off if Social Security were privatized similar to the Chilean Model, with individuals owning their retirement accounts and the government not able to raid the funds.

The safety net for the truly poverty stricken should be funded out of general tax receipts.

I have a suggesttion. lets have two options. you can continue to pay into SS and take advantage of the current system, or you can opt out and utilize a private method and not be eligible for SS benefits. Conservatives will retire comfortably and liberals will retire at 75.

There are four problems with that suggestion:

1. Social Security has an insurance element. A part of your tax goes to fund disability and survivor benefits. For a worker at peak earning years, this is the equivalent of a disability policy and a life insurance policy of about $450,000 each. Private insurance could be used in conjunction with an alternative retirement system, but I have never seen proponents of such a system factor in the insurance costs BEFORE making their claims of how much better of an investment the alternative is.

2. Social Security has a subsidy element. The two inflection points in the benefit formula result in low income workers having higher relative benefits than higher income workers. Alternative systems usually ignore this and do not factor in an equivalent subsidy.

3. Social Security does not create property rights, private plans do. When a person dies, all benefits other than survivors and the $255 burial allowance terminate, and no matter how much a worker has paid in, his family has no property rights outside of those benefits. In the private alternatives, heirs get the remaining balance in any accounts.

4. Investment risk and expense is transferred to the participant. Under Social Security, the participant does not bear these expenses and risks. While intellectually we might be OK with letting grandma starve if she invests unwisely, I doubt that when the time comes we will let that happen.

I have not seen a proposal that addresses these problems meaningfully, and the partial analyses I have seen were not very palatable to the employees. This is why union busting is so important to employers. They can save money if they can reduce their Social Security contributions and shift the expenses and risks onto the employees. This is a lot easier in unorganized labor markets.

 

[regent]

We'd all be better off if Social Security were privatized similar to the Chilean Model, with individuals owning their retirement accounts and the government not able to raid the funds.

The safety net for the truly poverty stricken should be funded out of general tax receipts.

I have a suggesttion. lets have two options. you can continue to pay into SS and take advantage of the current system, or you can opt out and utilize a private method and not be eligible for SS benefits. Conservatives will retire comfortably and liberals will retire at 75.

There are four problems with that suggestion:

1. Social Security has an insurance element. A part of your tax goes to fund disability and survivor benefits. For a worker at peak earning years, this is the equivalent of a disability policy and a life insurance policy of about $450,000 each. Private insurance could be used in conjunction with an alternative retirement system, but I have never seen proponents of such a system factor in the insurance costs BEFORE making their claims of how much better of an investment the alternative is.

2. Social Security has a subsidy element. The two inflection points in the benefit formula result in low income workers having higher relative benefits than higher income workers. Alternative systems usually ignore this and do not factor in an equivalent subsidy.

3. Social Security does not create property rights, private plans do. When a person dies, all benefits other than survivors and the $255 burial allowance terminate, and no matter how much a worker has paid in, his family has no property rights outside of those benefits. In the private alternatives, heirs get the remaining balance in any accounts.

4. Investment risk and expense is transferred to the participant. Under Social Security, the participant does not bear these expenses and risks. While intellectually we might be OK with letting grandma starve if she invests unwisely, I doubt that when the time comes we will let that happen.

I have not seen a proposal that addresses these problems meaningfully, and the partial analyses I have seen were not very palatable to the employees. This is why union busting is so important to employers. They can save money if they can reduce their Social Security contributions and shift the expenses and risks onto the employees. This is a lot easier in unorganized labor markets.

I think privatization of Social Security is a great idea as long as the government makes up any losses people might have.

 

[AmazonTania]

There is only one place you can go to escape this Social Security scam: Galveston County, Texas. This county took advantage of a loophole in the tax code, allowing it to run it's own pension plan instead of participating into Social Security. Naturally, congress quickly closed the loophole so that no other county can do it. After so many years, we can easily look at the long-term results of the Galveston County model, as opposed to Social Security.

 

[oldfart]

There is only one place you can go to escape this Social Security scam: Galveston County, Texas. This county took advantage of a loophole in the tax code, allowing it to run it's own pension plan instead of participating into Social Security. Naturally, congress quickly closed the loophole so that no other county can do it. After so many years, we can easily look at the long-term results of the Galveston County model, as opposed to Social Security.

You do realize that one of the prime supporters of the Galveston County plan, Ray Holbrook, a now-retired county judge, exhausted his Alternative Plan account (which is a savings account not a social insurance plan) and now gets......

Wait for it.............

$1300 a month Social Security benefits from his earnings before Galveston public employees opted out of Social Security.

But it gets better. Who pays for Ray's SSA benefits? You do of course. And since the benefit formula has two inflection points, be gets treated like a poor ditch digger in the water department. The first $747 per month of average monthly earnings while the county was part of Social Security generates a benefit of 90% of the earnings amount. The excess (up to about $4750 where the benefit drops further to 15%) generates only a benefit of 32%.

In other words, Ray got far more out of the two systems combined than he would if the Alternate Plan had truly replaced Social Security. If he had relied solely on the Alternate Plan, he would be receiving nothing now.

 

[lynn63]

New York should address their over 2.5 million that are between the ages of 18-64 that are unemployed. To pay for all these government programs, people have to be employed so instead of complaining how much it cost them, they should get job creative.

 

[EdwardBaiamonte]

There is only one place you can go to escape this Social Security scam: Galveston County, Texas. This county took advantage of a loophole in the tax code, allowing it to run it's own pension plan instead of participating into Social Security. Naturally, congress quickly closed the loophole so that no other county can do it. After so many years, we can easily look at the long-term results of the Galveston County model, as opposed to Social Security.

You do realize that one of the prime supporters of the Galveston County plan, Ray Holbrook, a now-retired county judge, exhausted his Alternative Plan account (which is a savings account not a social insurance plan) and now gets......

Wait for it.............

$1300 a month Social Security benefits from his earnings before Galveston public employees opted out of Social Security.

But it gets better. Who pays for Ray's SSA benefits? You do of course. And since the benefit formula has two inflection points, be gets treated like a poor ditch digger in the water department. The first $747 per month of average monthly earnings while the county was part of Social Security generates a benefit of 90% of the earnings amount. The excess (up to about $4750 where the benefit drops further to 15%) generates only a benefit of 32%.

In other words, Ray got far more out of the two systems combined than he would if the Alternate Plan had truly replaced Social Security. If he had relied solely on the Alternate Plan, he would be receiving nothing now.

you do realize that if an average American puts 15% of his lifetime income in a private account he would retire with a $1.4 million estate rather than the dog food money liberals now give him as SS, assuming he lives long enough to collect a penny from is liberal dog food Social Security money account.