You all should love this.

Found this posted by ykkir of gucomic's forums.

http://www.nathannewman.org/nbs/

My results:

Old budget was $3747.36 billion
($2672.527 billion in spending, $1074.833 billion in tax expenditures and cuts).
New budget is $3513.95 billion
($2783.55 billion in spending, $730.4 billion in tax expenditures and cuts).

You have cut the deficit by $233.41 billion.
Your new deficit is $167.59 billion.


My choices would not get me reelected and my party members would want me hung. The plan wouldn't make it past the Senate nor the House. Making up a budget is easier than getting it past special interests.

I do not have a problem with deficit spending to build roads or during a recession. The economy is fine and the gov't should be paying back debt. *shrug* congress reacts to voters and voters do not want a balanced budget.

Actually, I think voters want a balanced budget and they want their stuff. What voters really don't want to do is pay more taxes or have less services.

What annoys me is that the government spends more and more money on things that take away individual responsibility (Social security, medicare, etc.)

What I did was leave a number of things about the same. I reduced tax cuts all across the board by 10% and I increased science, research and education spending by a great deal. I still cut the deficit.

If you do the detailed one you should look over your results, mine didn't always properly add or subtract numbers in accordance with the policy I chose.

Here's my result:

Your New Budget

Budget Totals
Old budget was $3747.36 billion
($2672.527 billion in spending, $1074.833 billion in tax expenditures and cuts).

New budget is $3078.47 billion
($2445.31 billion in spending, $633.16 billion in tax expenditures and cuts).
You have cut the deficit by $668.89 billion.
Your new deficit is $-267.88 billion.

Oops!
You've cut so much that the federal budget now contains a substantial surplus. Many economists warn that this budget may help induce or prolong a recession, and ordinary citizens demand a refund. You might want to cut taxes or raise spending.

I cut an enomous chunk of fat.... the Iraq war and most of the military. :p

It does not have an option to cut home mortage welfare tax deduction.

Fyyr, if you do the more complicated one, you can line item out the mortgage deduction.

When I did the longer version I saved quite a bit more money.

Yep. I did the long form, and ran a 2 trillion dollar surplus.

I just eliminated anything that's not constitutionally permitted and went for a flat tax structure.

I don't like how you can only increase stuff by 100%. If it were up to me, I'd more than double the money put into things like education and alternative fuel research.

Here's my result:



I cut an enomous chunk of fat.... the Iraq war and most of the military. :p

Bah, you cut me out of a job.

Sorry about that, how about we ramp up spending on infrastructure and you can work on a system to monitor freeway speeds all over the US?

What annoys me is that the government spends more and more money on things that take away individual responsibility (Social security, medicare, etc.)

How does Social Security take away individual responsibility? Nice catchphrase, but empty words.

You can be a responsible as you wish. They don't make you sign a waiver declining your rights to responsible action and thought when you get your SS check.

Yep. I did the long form, and ran a 2 trillion dollar surplus.

I just eliminated anything that's not constitutionally permitted and went for a flat tax structure.

So basically you doomed the working poor to a life of destitude, set states like Alabama and Kansas back about 50 years, and probably sparked an armed revolution in the process =D

Its so nice to meet people who think my 86 year old mother, who is going blind, is irresponsible because she probably couldn't survive without her social security and medicare.

Yet, some idiot who perhaps never had to work a day in his life, gets whisked through college on his parents money, who grows up with wealth, inheirits it from his parents, is responsible by your definition.

I'm with Aidon. I'd definitely join that revolution.

set states like Alabama and Kansas back about 50 years
Which, by my tally, places them just prior to the stone age.

So basically you doomed the working poor to a life of destitude, set states like Alabama and Kansas back about 50 years, and probably sparked an armed revolution in the process =D

Pretty much. Would that be so bad at this point? ;)

The federal government does many things that have no constitutional basis. Not all of these are bad. On the contrary, there are a number of good federal laws that have been upheld by the supreme court only by a prostitution of logic. There are also a number of very bad federal laws that have been upheld in the same way.

Both sides of the the congressional aisle are guilty of pushing their agenda without regard to the foundation of law in the US. The way things are done now, the Constitution is almost irrelevant.

You know, one thing I think we can learn from looking at Iraq is just how vague and open-ended constitutions are. I think our own was that way because if you get right down to spelling out every little details, no one would agree and the damn thing would never get approved. As it was, it barely did get approved (ours).

So what is a constitution? Its a framework and it has different meaning at different times. Take the basic premise in the Bill of Right that all people should be equal. That wasn't obeyed for a long time. Then all of a sudden, slavery was kaput. So you've got a class of people that have no education, no money, no land. Just because they're not slaves any longer, does that mean they're all of a sudden on equal footing with everyone else? No. That's why busing came about, and equal opportunity and quotas and assistance. Its trying to take what was very, very wrong and make it right. Its trying to elevate those people and make them truly equal.

After putting those people on an equal footing with opportunities, education, voting, jobs, ownership... then we've acheived what was described as all people being equal under the law.

I heard Justice Breyer talking today, I think he's got a book out on what he calls "Active Justice". I liked his ideals.

http://www.npr.org/templates/story/story.php?storyId=4929668

How does Social Security take away individual responsibility?
The savings rate in the US is at the lowest it has been ever. Ever since SSI was instituted, the US has slowly stopped saving.

I'll have to read Breyer's book. I'm sure it's obvious that I'm something of a strict constructionist, and so disagree with the flexible interpretation that Breyer espouses. Who knows - maybe his book will change my mind.

Although I really hate to see my paycheck have chunks taken out of it for SS, espcially when I make so little (i'm 20 oK!) The program itself is important.

Welfare on the other hand, I'm not as much of a fan of, I knew more then one family when I was growing up who cheated the system, short term? Definately, safety nets are important not just for the individual but for society at large due to indirect and associated sts.

Re: Budget.

I think some debt is a good thing as long as its debt to people or corporations within the US, foreign debt imo is generally a bad thing (some of its ok but not the degree that exists today.

Even though war itself and some aspects military is rather offputting to me, I dont beleivee in drastically reducing the military budget, it provides a job to tens of thousands, has associated benefits from advances in weapons, (technology) and trained troops can be a valuable asset not just for war, but for things well like natural diasters (.... assuming they are deployed quicker and used better but thats a different thread~)

Iraq war? Well, I was against it from the start, at least the way we entered, like being led by a gung ho cowboy without proper intelligenance and thinking about it) However, i don't think just drastically reducing budget tc an ongoing conflict is a wise thing, nor is just withdrawing, we cant just go run some country over and withdraw in the middle of it.

i cut the funding to the IRS but i still received taxes! if only we could pull off the impossible.

p.s. its sad how little effect increasing some things have on overall budget. ie science/education

How does Social Security take away individual responsibility? Nice catchphrase, but empty words.

You can be a responsible as you wish. They don't make you sign a waiver declining your rights to responsible action and thought when you get your SS check.

No they don't but I believe that more people would put a little more thought into their choices in life if they knew that screwing them up would leave them homeless and destitute in their old age. As it stands they know that they will at least have the basics covered . I am busting my ass to make sure that I don't have to depend on the support of the government in my old age and it annoys me to see those that never bothered to prepare living off of my tax dollars.

If social security was such a great plan congress would have voted themselves into the system not out of it.

i'm not super familiar with the tax code, and how SS etc works, but arnt people who are living off SS, living off of their own tax dollars from years past, and the ppeople who are living off of your tax dollars are people on welfare?

granted the currennt money they are spendin might have come from what you pay into SS, but they arnt living off of your dollar, thhey are living off of their own. its not that they couldn't or didnt plan for their future, they did, they planned on social security, which they put money into

once again i'm not terribly familiar with the intricaticies of the system so feel free to tell me i'm wrong if you have a better explanation!

Yet, some idiot who perhaps never had to work a day in his life, gets whisked through college on his parents money, who grows up with wealth, inheirits it from his parents, is responsible by your definition.

That just reaks of jealousy and class envy.

Both of which I find as very base(debased) human motivations and emotions.

Does the foo shlt?

i'm not super familiar with the tax code, and how SS etc works, but arnt people who are living off SS, living off of their own tax dollars from years past, and the ppeople who are living off of your tax dollars are people on welfare?

granted the currennt money they are spendin might have come from what you pay into SS, but they arnt living off of your dollar, thhey are living off of their own. its not that they couldn't or didnt plan for their future, they did, they planned on social security, which they put money into

Social security is not a plan, it's what you end up with.

It does not pay enough to cover basic needs of an elderly person. That is why we also have programs such as medicare/medicaid, prescription drugs, etc.

It, along with long term welfare, is a crutch that people come to depend on when they would be better served taking responsibility for themselves.

Does the foo shlt?

I honestly do not know where the idea that taking, by force, money from people who earned it and giving it to those who have not(or worse, to those who WILL not) is better than giving money that you earned to your family members; came from.

That is just a perversion to me. I have encountered this opinion before, you are not the only one who has it.

It is illogical, inferior, and bereft of any redeeming qualities. It is one of the few things that I feel perfectly comfortable in saying is immoral.

Well I'll take a middle ground. There needs to be a balance.

Social security can reduce people's intentions to save. In the UK we have plenty of retired people who spend their savings very quickly after retirement as any money they keep saved just reduces their assessment for a state pension. People who try to keep small savings get little reward for their efforts.

On the other hand if there is no social security you could effectively leave people with nothing. Even with the best intentions, not every hard working honest person is going to earn enough money to guarantee their retirement through thick and thin, lawsuits and illness, hurricanes and floods. A modern ethical country shouldn't patronisingly tell its citizens that they're workshy losers who deserve to starve homeless on the streets.

i'm not super familiar with the tax code, and how SS etc works, but arnt people who are living off SS, living off of their own tax dollars from years past, and the ppeople who are living off of your tax dollars are people on welfare?

A retiree that makes minium wage gets 16k per year. A retiree that makes 90k or more per year makes 20k per year. 7.5% of your income is taken out of your pay check regardless of how much make up to 90k and SSI ends. Your employeer matches the 7.5% up to 90k. The total contribution is 15% of your pay. If a dumb ass saved 10% per year and put that money into bonds that paid 7.2% plus inflation... They can retire with 20 times their income.

SSI is adjusted for inflation IIRC.

On the other hand if there is no social security you could effectively leave people with nothing.

Well, I don't want to see anyone starve but if you are destitute poor, you get to live on the gov'ts dime. There is little incentive to save.

I think I might do what Ignatius was going to do in confederacy of dunces, form the All Gay Military.

Well, I don't want to see anyone starve but if you are destitute poor, you get to live on the gov'ts dime. There is little incentive to save.

If you're destitute poor then you can't save, whatever. There's no point putting 10% away so you can buy clothes when you retire if that means you can't buy your children any clothes today.

You know investing is something that has only been available to middle class people for a relatively short amount of time. There haven't been the sort of mutual funds and such thing around for all that long. And ones that were were often fraught with people losing all their money in risky schemes. It was probably in the 1980's when it started to take off a bit.

It certainly wasn't available, or even commonplace, during my father's working years. And, even if it had been, his generation lived through the great depression and many of them had no faith in anything but government insured savings, which earn perhaps at the rate of inflation.

Social security is a good thing for folks like my parents. I probably won't depend on it as much as them but there's no guarantee that housing prices will stay high and there's no guarantee that my money in my retirement accounts will be there when I retire. For people of my generation, we're among some of the first that have had 401k's and other retirement plans accumulating for a relatively long time. I am in a very, very different place than my parents when I retire (should things not crash between now and then).

So for some of us professionals with good careers, good educations and a reasonable about of discipline, SS isn't really necessary. But I bet if you got rid of it, the rate of poverty in this country would skyrocket amongst the people least able to do anything about their standard of living, the elderly.

i'm not super familiar with the tax code, and how SS etc works, but arnt people who are living off SS, living off of their own tax dollars from years past, and the ppeople who are living off of your tax dollars are people on welfare?No, both are living off of your tax dollars. You pay 12.4% of your income, up to the first $90,000, to support the CURRENT generation of old people. (If you are an employee, your employer pays half of that 12.4%, but make no mistake, you still "lose" it because it's money that would have otherwise gone elsewhere.) You will never see that money again, unless the government finds some way to pay it to you when you get old.

Social security is welfare for old people, and it hits the lower/middle class workers the hardest because a greater majority of their income will be under the $90K cap and it is a huge percentage of the taxes you pay. The rich don't care about it because it's such a tiny percentage of their tax responsibility.

And yes Aidon, it takes away personal responsibility. If those old people had saved responsibly through a retirement fund, there would be little or no need for social security. Not to mention, private savings would be far more efficient with less government waste, leading to more income.

No, both are living off of your tax dollars. You pay 12.4% of your income,

Closer to 15%.

Unless I have been overpaying all these years.

Social security is welfare for everyone, not just poor elderly people. Everyone gets back what they paid into it, and probably then some.

Closer to 15%.It has been exactly 12.4% since 1990. You're probably thinking of Medicare tax, which is an additional 2.9% (also spit 50/50 for employees).
Social security is welfare for everyone, not just poor elderly people. Everyone gets back what they paid into it, and probably then some.ROFL. You have the "welfare" part right, at least. <img src=http://lag9.com/biggrin.gif> However, there is no guarantee that you will ever get any part of it back, especially if you are now a young worker. Furthermore, if you "get back what you paid into it" 30-40 years later, with zero interest or adjustment for inflation, you're really getting nothing at all.

Social security isn't an "investment". It's a tax, pure and simple, to support welfare to old people (who may or may not deserve it). And considering it's one of the largest chunks out of most people's paychecks, you would think they would be at least somewhat annoyed.

Its so nice to meet people who think my 86 year old mother, who is going blind, is irresponsible because she probably couldn't survive without her social security and medicare.


I may sound like an ass saying this but it's your job to take care of your mother, not the governments. I contribute to charities voluntarily to help the needy. Having the government take even more out of my pocket in the form of social security just pisses me off.

Social security isn't an "investment". It's a tax, pure and simple, to support welfare to old people (who may or may not deserve it). And considering it's one of the largest chunks out of most people's paychecks, you would think they would be at least somewhat annoyed.

I don't think people are annoyed because most of them are counting on it.

As far as I know, there's something similar to social security in just about every modern democratic country.

What makes you think there's any guaratee that any sort of retirement savings you're doing will be there when you retire? I'm a lot more certain SS will be than I am my mutual funds or house value.

There are 4 gov't programs that are funded with the 15% tax. SSI, Medicare, Medicade and Health Insurance.

I don't think people are annoyed because most of them are counting on it.

And therein lies the problem.

It has been exactly 12.4% since 1990. You're probably thinking of Medicare tax, which is an additional 2.9% (also spit 50/50 for employees).


Yup, I was adding them together.

There are 4 gov't programs that are funded with the 15% tax. SSI, Medicare, Medicade and Health Insurance.

You mean I get health insurance?

I did not know that.

What makes you think there's any guaratee that any sort of retirement savings you're doing will be there when you retire?There's never any guarantee of anything (except death), but with that caveat, I'd sooner trust a spam e-mail "get rich quick" scheme with my money than voluntarily hand it over to the U.S. government to "invest" it for me using its own judgment and efficiency.
I'm a lot more certain SS will be than I am my mutual funds or house value.Are you referring to the normal risks of investment, or the risk that your house or money will just disappear one day due to war, massive fraud, or theft? The risks of investment are rarely a problem in the long term, and if they really bother you, you can just pick a less risky or more diverse investment portfolio. And the risk that your money will vanish tragically is infinitely greater when you put it in the government's hands as opposed to a reputable private party. For example, Congress can decide tomorrow to cut off your benefits, and there's nothing you can do, but the private party is bound by law to pay you. (In fact, reducing benefits is one of the options on the table for the near future, when it is predicted that there will be too many old farts demanding their paycheck and too few young productive workers to support them.)

You mean I get health insurance?
I did not know that.Yes, it's called Medicare. However, you have to be a totally unproductive member of society (or nearly so) to qualify. <img src=http://lag9.com/biggrin.gif>

Social security is welfare for everyone, not just poor elderly people. Everyone gets back what they paid into it, and probably then some.

No, they don't. A few years ago, USA Today published the CBO numbers on the effective rate of return on social security taxes. While the return depended on age and income, in no case was it very good, and in many cases it was negative. That's right, for those such as yours truly, a thoroughly middle-age, middle-class guy, I would literally be better off taking my social security taxes and sticking the money under a matress rather than letting the government put it away for my golden years.

A few years ago, USA Today published the CBO numbers on the effective rate of return on social security taxes.

Think of it as insurance as much as investment. The insurance companies take in more than they pay out too.

The social security you pay in taxes today goes straight to the people who need it today. If you need social security tomorrow then the workers of tomorrow will be paying for you. The money never sits in investments to accumulate interest as it is always in circulation. If you expect investment returns from the system then it's not suprising that you're disappointed.

Think of it as insurance as much as investment. The insurance companies take in more than they pay out too.

The social security you pay in taxes today goes straight to the people who need it today. If you need social security tomorrow then the workers of tomorrow will be paying for you. The money never sits in investments to accumulate interest as it is always in circulation. If you expect investment returns from the system then it's not suprising that you're disappointed.

There is a problem with your rational. Your rational assumes that the population distribution remains constant from generation to generation. That is if 12% goes to retirees and the working life is 20 to 60 and average social security draw is 10 years ... there is 4 times the number of workers to retireees. So one could roughly conclude that each retiree gets 48% of the median income.

If demographics shift to retireees and there are less than a 4:1 ratio then the gov't needs to borrow to meet the short fall or reduce benefits or inflate the currency. That is the looming problem for Japan and Europe.

By having actual savings, that capitol can travel from country to country and seek out young working populations to earn a return.

On the benefit side, if 12% * 4 = 48% of the median or .48 * $40,000 = $19,200. If the median income shifts up and the ratio of workers shift down then that number, in real terms, may remain the same. Boosting efficiency is another problem France and Germany have which may not change for another 10 years, reflecting on the last election.

In the nightmare scenario, the median age shifts out 10 years, the retirement age remains the same, efficiency remains stagant and overseas cost of labor increases which would push the gov't to borrow or cut benefits. This has not happend but it could. Placing in stone expenditures which span a life time is dangerous.

For as long as the GDP grows as the working population declines with the retirement population increasing ... can the current social security program remain solvent? The longer term question is whether current commitments can be met in the future and what is the best method to meet future commitments.

As an asside, insurance companies and reinsurance companies invest in real property. The gov't has the right to tax and print money. Both of those can be inflationary which plays into the nightmare scenario.

There is a problem with your rational. Your rational assumes that the population distribution remains constant from generation to generation.

Well that is the rationale used by most western governments. It is also the rationale used by many pension schemes. It is the reason why there is now a looming pensions deficit as people live longer. The numbers will have to change but the mathematics behind them will not.

Governments do not invest financially, they borrow, and they are right to do so. They can invest in the people and the country today for the good of the country tomorrow. Social security is one apsect of that along with education, transport infrastucture, and defence. I don't think anyone expects the government to take taxpayers money and invest it in stocks and shares.

I think I might do what Ignatius was going to do in confederacy of dunces, form the All Gay Military.

The Janasaries were a formidable force.

No, they don't. A few years ago, USA Today published the CBO numbers on the effective rate of return on social security taxes. While the return depended on age and income, in no case was it very good, and in many cases it was negative. That's right, for those such as yours truly, a thoroughly middle-age, middle-class guy, I would literally be better off taking my social security taxes and sticking the money under a matress rather than letting the government put it away for my golden years.

First of all, your rate of return on SS totally depends on how long you live.

But what you aren't taking into account is the risk of someone coming in and stealing your mattress, your house burning down, etc.

Or if you decide to invest that money, the risk of losing it entirely.

People have forgotten that there can be considerable risk in investments. They assume that they're going to have them when they retire. They're probably right. The odds are pretty good. But they might not be worth what you think they should be. And there have been times in history when the market has really tanked and people have lost fortunes. There was a time in history when banks didn't have enough money to cover the deposits their people made.

I heard that baloney about SS going bankrupt for the last 20 years and that it wasn't going to be around when I retired. It reminds me a bit of the Jehovah's Witness speil, they're always forecasting the end of the world (for the unbelievers).

There's a lot of uneducated people, people who are too busy to learn how to invest, people who are trying to stretch every dollar to its maximum, that if they didn't have money withheld from their paycheck, they would never have any retirement savings at all.

One interesting thing I've been reading about is how many people, maybe even most, who do have work related 401k's, either never bother to sign up for it, or else if they do they let the money accumulate in the "default" account that makes very little return. So now they're experimenting with automatically signing people up to the 401k and you have to "opt out". And they're picking some default funds for them and giving them the ability to opt out of those. So for those people, they might be just as well off stuffing the money into the mattress.

Most people are ignorant and uninterested in learning about how to invest. They don't spend time understanding asset allocation. In fact, I bet most of the people here don't either. If you completely left their retirement savings up to them, they simply wouldn't do it. Even I have a good deal of inertia to fight to spend the time I should figuring it all out.

SS is not in too bad of shape. It needs some adjusting so it can meet its obligations 50 years from now, but destroying it entirely would simply mean that millions of elderly people would become welfare recipients. And we could become the biggest democracy in the world with the most poverty. Wouldn't that be a fine incentive to other countries to turn to democracy?

There's a lot of uneducated people, people who are too busy to learn how to invest, people who are trying to stretch every dollar to its maximum, that if they didn't have money withheld from their paycheck, they would never have any retirement savings at all.

One interesting thing I've been reading about is how many people, maybe even most, who do have work related 401k's, either never bother to sign up for it, or else if they do they let the money accumulate in the "default" account that makes very little return. So now they're experimenting with automatically signing people up to the 401k and you have to "opt out". And they're picking some default funds for them and giving them the ability to opt out of those. So for those people, they might be just as well off stuffing the money into the mattress.

Most people are ignorant and uninterested in learning about how to invest. They don't spend time understanding asset allocation. In fact, I bet most of the people here don't either. If you completely left their retirement savings up to them, they simply wouldn't do it. Even I have a good deal of inertia to fight to spend the time I should figuring it all out.

umm did I miss something? Are you supporting my argument that social security takes away personal responsibility?

umm did I miss something? Are you supporting my argument that social security takes away personal responsibility?
If you want to live in Darwin-land you're going to have to leave the comfort of living in a fairly stable democracy.

Most people are ignorant and uninterested in learning about how to invest. They don't spend time understanding asset allocation. In fact, I bet most of the people here don't either. If you completely left their retirement savings up to them, they simply wouldn't do it. Even I have a good deal of inertia to fight to spend the time I should figuring it all out.

For better or worse there is nothing like talking from ones own personal experience. The stock market can be a lottery of sorts but it can be a method to build wealth as well. I take issue with pension plans that are partially funded and other pit falls in investing.

I think there are resonable recommendations the gov't could put forth as methods to save for retirement. Particularly asset allocation or low management fee index funds.

I do not want to US Federal gov't to start investing or managing funds but there are prudent methods of investing that can provide 8% plus per year over ones life time.

What that does not cover are those who did not work but are left alone and poor. Lets say a grandmother whom stayed at home to take care of her children is left without a pension or savings after her husband dies.

I guess there are many examples of how someone can become poor. There are as many examples of how someone can approach retirement and not have saved or planned for retirement. As much as SSI is needed, so is a formalized savings plan. If the average worker has a declared savings for retirement, meeting that savings goal will ensure less dependance on SSI.

Simply, if someone had 2 times their income 10 years into their working life and 5 times their income 20 years into their working life... and so there could be a projected savings rate to meet mile stones toward retirement. Perhaps the savings would be compulsary up to that expected savings...

This assumes that society wants to continue SSI. *shrug* I see the value in giving the aged some amount of dignity in their last years.

First of all, your rate of return on SS totally depends on how long you live.

Well, no. The effective rate of return is easily calculated by taking a person's contributions over his working life, determining the social security payout he's entitled to upon retirement, then calculating the cost of an immediate payment, life income annuity needed to provide that income.

Looked at another way, an individual's effective rate of return depends on how long he lives, but a group's effective rate of return depends on the mean life expectancy of the group.

Either way, the CBO numbers are valid in evaluating social security as a retirement vehicle.

But what you aren't taking into account is the risk of someone coming in and stealing your mattress, your house burning down, etc.

Or if you decide to invest that money, the risk of losing it entirely.

People have forgotten that there can be considerable risk in investments. They assume that they're going to have them when they retire. They're probably right. The odds are pretty good. But they might not be worth what you think they should be. And there have been times in history when the market has really tanked and people have lost fortunes. There was a time in history when banks didn't have enough money to cover the deposits their people made.

This is a logical fallacy often used by SS apologists. Yes, someone might come in and steal my mattress. On the other hand, the federal government is not bound to honor its promises to workers. The federal government has cut SS benefits in the past, and is free to do so in the future.

If, on the other hand, an individual is free to choose investments with his money, then he suffers whatever risks are associated. Companies may go bankrupt. The composite companies of the NYSE are highly unlikely to do so. Various bonds are secure to a greater or lesser degree. And, if you like, you can buy government notes, in which case your money is as secure as the government. In the last case, you get more security than SS provides (since the government cannot renege on its bonds), and more money to boot (since you get a real return). Not only that, the money is yours - not the governments - and if you die, you heirs inherit.


I heard that baloney about SS going bankrupt for the last 20 years and that it wasn't going to be around when I retired. It reminds me a bit of the Jehovah's Witness speil, they're always forecasting the end of the world (for the unbelievers).

Yes, it was just about 20 years ago that Reagan & Greenspan "saved" SS via a massive tax increase.



There's a lot of uneducated people, people who are too busy to learn how to invest, people who are trying to stretch every dollar to its maximum, that if they didn't have money withheld from their paycheck, they would never have any retirement savings at all.

There are also a lot of people who could and would do a hell of a lot better with their money than they will receive with SS.

One interesting thing I've been reading about is how many people, maybe even most, who do have work related 401k's, either never bother to sign up for it, or else if they do they let the money accumulate in the "default" account that makes very little return. So now they're experimenting with automatically signing people up to the 401k and you have to "opt out". And they're picking some default funds for them and giving them the ability to opt out of those. So for those people, they might be just as well off stuffing the money into the mattress.

Most people are ignorant and uninterested in learning about how to invest. They don't spend time understanding asset allocation. In fact, I bet most of the people here don't either. If you completely left their retirement savings up to them, they simply wouldn't do it. Even I have a good deal of inertia to fight to spend the time I should figuring it all out.

Yes, educating the public is quite a problem, I'll agree with you on that, but SS doesn't solve that problem.

SS is not in too bad of shape. It needs some adjusting so it can meet its obligations 50 years from now, but destroying it entirely would simply mean that millions of elderly people would become welfare recipients. And we could become the biggest democracy in the world with the most poverty. Wouldn't that be a fine incentive to other countries to turn to democracy?

SS is in trouble. 2018 I think is the current forecast for when the government will be paying out more in SS benefits than it receives in taxes. At that point, the system is broke. Make no mistake about it, the so called SS "trust fund" is a sham.

As far as making many elderly people welfare recipients, what (besides the basic concept of welfare) is wrong with that? If we want to have a welfare state, then lets do so. Poor people get government money. Let's not have this make-believe retirement system that confiscates a huge percentage of low- and middle-income working wages.

Think of it as insurance as much as investment. The insurance companies take in more than they pay out too.

The social security you pay in taxes today goes straight to the people who need it today. If you need social security tomorrow then the workers of tomorrow will be paying for you. The money never sits in investments to accumulate interest as it is always in circulation. If you expect investment returns from the system then it's not suprising that you're disappointed.

Think of it as a Ponzi scheme. If you or I do it, we go to jail. If the politicians do it, they get re-elected.

Think of it as a Ponzi scheme. If you or I do it, we go to jail. If the politicians do it, they get re-elected.

That's a cheap shot. The whole point of government is that it does things we can't do ourselves. We can personally invest our income in shares so there's no point the government doing that, it needs another solution.

SS is in trouble. 2018 I think is the current forecast for when the government will be paying out more in SS benefits than it receives in taxes. At that point, the system is broke. Make no mistake about it, the so called SS "trust fund" is a sham.

As far as making many elderly people welfare recipients, what (besides the basic concept of welfare) is wrong with that? If we want to have a welfare state, then lets do so. Poor people get government money. Let's not have this make-believe retirement system that confiscates a huge percentage of low- and middle-income working wages.

Because welfare is a popular chopping block/political game item. I can just imagine the howling if suddenly the welfare roles exploded. You'd have republicans talking about those terrible Welfare Grannies and how they should be forced to work or have their canes taken from them. And it'll put a huge burden on states they don't currently have. Can you imagine Florida with all those retirees on welfare?

What makes you think that the government isn't going to step in and bolster SS again? Their are a number of solutions. They can stop increasing the benefits so much. They can delay when you can start collecting it. They could raise taxes again for it (hope not, but they could).

Lets look at the reality of the situation. By 2042 the social security trust fund, that's the surplus money, will be exhausted and there won't be enough current workers to support all the old folks. If NOTHING is done between now and then, you'll still receive 3/4ths of your expected payment. Because the folks working then will be 75% of what is needed to cover the old folks in 2042.

http://www.fool.com/news/commentary/2004/commentary040308RB.htm

Lets look at the reality of the situation. By 2042 the social security trust fund, that's the surplus money, will be exhausted and there won't be enough current workers to support all the old folks. If NOTHING is done between now and then, you'll still receive 3/4ths of your expected payment. Because the folks working then will be 75% of what is needed to cover the old folks in 2042.

You do understand that Someone born today would be 35 years of age in 2042, right?

And someone born next year will be 34. Yes, I think I have that concept down.

Because welfare is a popular chopping block/political game item. I can just imagine the howling if suddenly the welfare roles exploded. You'd have republicans talking about those terrible Welfare Grannies and how they should be forced to work or have their canes taken from them. And it'll put a huge burden on states they don't currently have. Can you imagine Florida with all those retirees on welfare?

What makes you think that the government isn't going to step in and bolster SS again? Their are a number of solutions. They can stop increasing the benefits so much. They can delay when you can start collecting it. They could raise taxes again for it (hope not, but they could).

Lets look at the reality of the situation. By 2042 the social security trust fund, that's the surplus money, will be exhausted and there won't be enough current workers to support all the old folks. If NOTHING is done between now and then, you'll still receive 3/4ths of your expected payment. Because the folks working then will be 75% of what is needed to cover the old folks in 2042.

http://www.fool.com/news/commentary/2004/commentary040308RB.htm

I love the Fool! That link has a good discussion of some of the SS issues.

I did not mean to imply that SS will stop paying benefits totally. On the contrary, the likelyhood of that happening is zilch. On the other hand, I think it is almost certain that the government will indeed step in to bolster SS in some way. However, this will not wait until 2042 when the trust fund is exhausted. Instead, it will happen sometime between now and 2018-ish when SS expenditures will exceed SS payrool taxes.

The reason for this is simple. As noted in the article in the link, there are no assets in the trust fund. It consists of nothing but IOUs. Consequently, maintainence of benefits at the currently mandated levels will mean funding SS payouts with money from general revenues, i.e., income taxes.

Even ignoring some obscure legal issues with doing this, the government will have to decide where this money is to come from. There are several possibilities: (a) borrowing the money, i.e., running even larger deficits than are being reported today, (b) increasing taxes, and (c) cutting benefits in some shape, form, or fashion.

Option (a) is politically unattractive, since the unfunded liability for SS benefits is huge. Option (b) is possible. Option (c) is one the government has indulged in before.

My guess is that in the next few years we will see a combination of (b) and (c). I expect the cap on SS taxes to be removed, just as the cap on Medicare taxes was some years ago. I wouldn't be surprised to see additional types of income also subjected to additional taxation. I also expect benefits to be cut in the form of an increase in the age at which people qualify for benefits. Other forms of cuts, such as taxing income from SS, are also likely.

What all of this really means is that the government isn't going to fix SS at all. SS as it currently exists is a bad system. It sucks up huge amounts of money and provides pitiful benefits. We could do much better, but we won't. SS is just to solidly entrenched to be really overhauled, no matter how badly it needs it.

Oops - I forgot one other option to paying existing SS benefits. That is cutting existing spending programs. This, of course, is so unlikely that it didn't even cross my mind as I was writing my previous post.

If you want to live in Darwin-land you're going to have to leave the comfort of living in a fairly stable democracy.

You call it Darwin-land, I call it the land of "If you want something reach in your own damn pocket and buy it and stay the hell out of mine."

But did you ever stop to think that this isn't going to happen in a democracy?

In fact, your land of "If you want something reach in your own damn pocket and buy it and stay the hell out of mine." used to be what much of Europe was before the aristocracy was overthrown and democracies were created.

The last set of people that were like that ended up parting company with their heads.