The truth about Social Security!!! by CrevanReaver

REAL WORLD EVENT DISCUSSIONS

The truth about Social Security!!!

POSTED BY: CREVANREAVER
UPDATED: Monday, January 31, 2005 15:46
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Monday, January 31, 2005 5:47 AM

Here is some great information I found...

http://www.dkosopedia.com/index.php?title=Social_Security&oldid=20200

Social Security is an involuntary social insurance program enforced by the United States federal government. The socialistic program was one of the "hottest" topics under consideration in the 2004 U.S. presidential election. In early 2005, the Bush Administration began in a campaign to give Americans the right to voluntarily opt out of the system and seek personal retirement accounts by depositing their payroll taxes into personally owned and invested accounts similar to 401(k) plans or IRAs.

Currently, workers pay a 12.4 Social Security payroll tax (FICA) on all wages up to $87,900, and Congress sets their retirement benefits. Under reform, workers would be able to deposit that 12.4 percent into their personally owned accounts. Workers and/or their employers would select a company to manage and invest that money. Over time, a worker's account would grow in value, culminating in a substantial nest egg. Once a worker had accumulated sufficient retirement funds, she could purchase a lifetime retirement annuity, which would pay a monthly retirement check.

Social Security and African-Americans
Social Security is a bad deal for all Americans, but African-Americans often get the worst deal. This is because African-Americans pay too much into Social Security while working and get back too little in retirement benefits to make Social Security a good deal. So they also have the most to gain from moving to a system based on individual ownership and private investment.

How much you get from Social Security depends partly on how long you live, and African-Americans generally have lower life expectancies than other groups. When a black man reaches age 65, he is expected to live only another 13.9 years, almost 2 years (24 payments) less than a white male. The RAND Corporation concluded that, because of differences in life expectancies and marriage rates, on a life-time basis the income transfer from blacks to whites is as much as $10,000 per person.

African-Americans often do not have enough money left over after paying taxes to save for retirement. Elderly African-Americans are much more likely than other groups to be totally dependent on Social Security for retirement income. Social Security's benefits are simply not enough: the poverty rates among black elderly women is 29 percent-almost twice the rate for all women.

African-Americans would be among those with the most to gain from transforming Social Security into a system of individually owned, privately invested accounts, similar to IRAs or 401k plans. Social Security reform must be looked at in light of the alternatives. Incremental reforms to prop up the existing system-such as raising payroll taxes or cutting benefits-could disproportionately harm African-Americans.

Social Security and All American Women
According to a study by researchers at Harvard University, virtually every woman-single, divorced, married, or widowed-would probably be better off financially under a system of personal retirement accounts, the earnings of which could be shared by spouses. The researchers studied 1,992 actual women who retired in 1981, and compared their Social Security benefits to what they would have received from a personal account that returned 6.2 percent. Every woman studied would have been as well off or better off with a personal account. Not one woman was worse off under a voluntary system. On average, personal accounts would have provided the single women with 58 percent more than Social Security and wives with 208 percent more. Those higher returns are critical to women's well-being in retirement. Today, Social Security leaves 13.6 percent of women in poverty: the good news is that the research shows that it doesn't have to be that way. In addition, voluntary account plans typically include a safety net that can ensure that every woman's retirement income is at least at or above the poverty line.

Why Social Security needs reform
Social Security is going bankrupt. The federal government's largest spending program, accounting for nearly 22 percent of all federal spending, faces irresistible demographic and fiscal pressures that threaten the future retirement security of today's young workers. According to the 2003 report of the Social Security system's Board of Trustees, in 2018, just 14 years from now, the Social Security system will begin to run a deficit. That is, it will begin to spend more on benefits than it brings in through taxes. Anyone who has ever run a business--or balanced a checkbook--understands that when you are spending more than you bring in, something has to give--you need to start either earning more money or spending less to keep things balanced. For Social Security, that means either higher taxes or lower benefits.

But even if Social Security's financial difficulties could be fixed by raising taxes or cutting benefits, the system would still need to be reformed because it is a bad deal for most Americans. Social Security simply costs too much and pays too little. Social Security's rate of return on payroll taxes is dismal (about 2 percent) and declining. Workers deserve a retirement system that will make the most of their money.

The benefits of personal retirement accounts

* Higher Returns and Greater Benefits: Even the most conservative investors would accrue substantial assets during their lifetimes through privately invested accounts, yielding far more than Social Security promises in retirement income.
* Private Property: Individuals would own their personal retirement accounts. Accumulated assets could be used at retirement and/or passed on to family members.
* Creation of Wealth: Low-wage workers would become shareholders in the U.S. economy and, through private investment and participation in the market, accumulate wealth.
* Individual Empowerment: Individuals would control their retirement security, and they would see their accounts grow as a result of hard work.
* Improved Economy: Economists believe that the overall economy will benefit from an increase in savings and investment resulting from this system.

How Social Security Reform would affect the economy
Social Security Reform would lead to an increase in national saving, with hundreds of billions of dollars invested through individual accounts every year. Those investments, in turn, would substantially increase national investment, productivity, wages, jobs, and overall economic growth. In addition, Social Security Reform would amount to an effective cut in payroll taxes, boosting productivity and employment. Martin Feldstein, of Harvard University, estimates that modernizing Social Security has a value of $10-$20 trillion to the U.S. economy and would permanently increase our GDP by 5 percent. That would translate into at least one million new jobs and an increase in annual income of $5,000 for a family of four.

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Monday, January 31, 2005 8:49 AM

CONNORFLYNN

Well there are some issues with the above article. First and foremost is how much of your social security taxes would go into a personal savings program. I'll try and find some decent articles that get into that. Primarily from what I've been reading, Only a portion of your taxes will go to a personal savings account..not the whole kit and kaboodle. Theres so much spin and misinformation coming out about this it makes me sick.

Secondly..I doubt seriously(in this day and age that's not difficult to do) that the government will "Allow" you to determine where your money goes. There are too many risks involved to do that. Some folks would take crazy risks and there are too many gullible people out there who would be easily swayed by bad investment schpiels. The government would be right back where it started but worse if it has several 1000 people making bad investments and having nothing to fall back on except an even smaller Social security blanket.

All this will do IMHO is make the rich richer and the poor poorer. As I've posted before 12.6% (or whatever the phantom figure is at the moment) of nothing is still nothing. Joe Blow who lives week to week now and makes a pittance of a wage is still only going to be able to "invest" a pittance. Blacks and minorities aren't the only folks who live in poverty in the US. Many blue collar workers make shite for an income. My hometown had the highest rate of Unemployment and folks on the "Welfare" system then any other part of the state a few years back. At one point I was forced to take a job in a crappy little machine shop for $5.50 and hour. My supervisor said folks should be happy for the opportunity to make $11k a year. I felt like an indentured servant. The highest paying job I could get as a professional while living there equalled out to approx $25k a year before taxes. Thats roughly $10,000 above the poverty level. Thats not enough to own your own home, have a car and pay the bills...let alone "Invest" in potentially bad stock market funds or look forward to retirement. Friends of mine who were laborers made on average $18k a year before taxes. I was considered well to do. Fortunately I have since moved and found employment that pays much better..but there are millions of folks who are not that fortunate.

I see this as a GIANT smokescreen to make large corporations and independent traders wealthy at tax payer expense. I feel a giant Enron coming on..or maybe just a migraine.

I'm working on developing a taste for catfood and have started stockpiling aspirin and Ibuprofen to cut my drugs (If I will be able to afford them at that point) with once I become infirm..if I'm lucky enough to reach that age.

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Monday, January 31, 2005 9:39 AM

JUSTDAVID

The part regarding black males seems to be the wrong way of thinking. We should be focusing ways to help them enjoy a longer life. Even if the system were somehow improved, the inequity would still be there. Or are you/they suggesting that black males should get a higher benefit than everyone else? I just don't see that becoming reality.

"Light it."

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Monday, January 31, 2005 10:53 AM

MANIACNUMBERONE

It's good that people are thinking of the black man, but this sounds like it's off target. Life expectancy rates are (foolishly) based on the entire spectrum of the population... so all of the unwed, underage African-American mothers who give birth to a still-born child, all the deaths due to childhood poverty and disease, and not least of all, the tons of deaths resulting from drug abuse and gang violence in African-American communities have their part in that life expectancy number.

The point I am making is that blacks and whites live to be the same age, if they happen to be fortunate enough to not die from unnatural causes... like the ones I listed above. The numbers are skewed because of the unnatural amount of deaths in young African-Americans.

If we weren't to take all those unnatural premature deaths into the count, the system is pretty fair towards each contributor. I personally don't think all deaths should be factored into figuring out social security issues. Those who unfortunately die at an earlier age haven't contributed any money into the system anyway.

This concludes my callous statement for the day.

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Monday, January 31, 2005 10:54 AM

BYTETHEBULLET

Quote:
From their site...

The dKosopedia is written from a left/progressive/liberal/Democratic point of view while also attempting to fairly acknowledge the other side's take.

Always consider the source, especially on the internet.

ByteTheBullet (-:

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Monday, January 31, 2005 1:03 PM

SOUPCATCHER

Quote:
Originally posted by ByteTheBullet:
Quote:
From their site...

The dKosopedia is written from a left/progressive/liberal/Democratic point of view while also attempting to fairly acknowledge the other side's take.

Always consider the source, especially on the internet.

ByteTheBullet (-:

The article linked in the first post was a hack to the dKosopedia. Here is the revision history for the page on Social Security.
http://www.dkosopedia.com/index.php?title=Social_Security&action=histo
ry
The version that was replaced by the hack has been restored:
http://www.dkosopedia.com/index.php/Social_Security

I found the exact same article at the jnana wiki:
http://jnana.wikinerds.org/index.php/U.S._Social_Security

This article was pieced together from the Cato Institute FAQ on Social Security reform. The section on African Americans is from:
http://www.socialsecurity.org/reformandyou/you.html (scroll down to the heading, "I am African American. How does Social Security reform affect me?").
The remaining sections are lifted whole cloth from:
http://www.socialsecurity.org/reformandyou/faqs.html
The questions from the FAQ referenced are, in order, #12, #2, #4, and #17.
The first two paragraphs might be the only thing original about this piece (but I highly doubt it, I just don't feel like spending more than ten minutes to find where they were originally written).

So, in short, someone put together a piece based on the views of the Cato Institute (which is very much pro privitizing/private accounts/personal accounts in place of the current incarnation of Social Security) and is posting this article into databases put out by groups that do not hold this viewpoint.

---------------------
"What sort of raw meat do you people feed your cruiser captains, Hamish?" - Queen Elizabeth III of Manticore

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Monday, January 31, 2005 3:46 PM

SIGNYM

I believe in solving problems, not sharing them.

Leave it to Crevan to jump on a hack piece. Seems to have problems telling propaganda from reality (or even correctly identifying who's face matches which propaganda). Rolleyes

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