The 112th Congress: Debt ceiling edition

[Almington]

Re: The 112th Congress: Debt ceiling edition

I'm sure there are a few people here and there who kick it early and never collect social security. I suppose that as long as it's not 100%, it's technically "insurance."

Social security is basically one very, very large and underfunded pension system. It isn't really any different than of the other private or public pensions with the exception that the fund is invested completely in treasury bonds.

 

[Foxton]

Re: The 112th Congress: Debt ceiling edition

Ponzi Scheme

Sounds pretty similar to me. Maybe this is the best way to look at it. If someone in the private sector were to do what the gov't is doing with SS I'm pretty sure they'd be arrested.

Unofan just pointed out why it's not. A Ponzi scheme specifically pulls the rug out of the last group of investors. It also requires greater and greater amounts of investors to join in or you can't pay the earlier investors the greater and greater amounts that are supposed to be there from investments that don't exist.

SS works just fine if it's a 1:1 ratio. The big issue we're going through now is the Baby Boomers are starting to collect after paying in less than they could have. So there are less people paying in and more people collecting.

 

[MinnFan]

Re: The 112th Congress: Debt ceiling edition

SS works just fine if it's a 1:1 ratio. The big issue we're going through now is the Baby Boomers are starting to collect after paying in less than they could have. So there are less people paying in and more people collecting.

Do you not see how you just proved that it is a Ponzi Scheme?

 

[Bakunin]

Re: The 112th Congress: Debt ceiling edition

Social Security may not be a Ponzi scheme in the strictest sense, but it very clearly screws over the young (who have less) to benefit the old (who have more). The young will pay higher payroll taxes for a longer period of time to collect fewer benefits. Meanwhile, the current benefits are untouchable because of the powerful senior lobby, and even doing something as blatantly obvious to maintain the solvency of the program such as recalculating the COLA is a giant pain in the *** to approve.

Please forgive those of us who aren't particularly thrilled to be forced into participating in this program. Oh, and because the older generations so badly managed the federal budget over the years, we'll also likely have to pay higher income taxes to deal with that while having fewer services. I guess in short, I have this to say to those over 50: **** you very much.

And Social Security is NOT a 1:1 ratio. If the ratio you are referencing is workers to retirees, it's more like 3:1 - http://www.ssa.gov/history/ratios.html - given the fact the system is now paying out more than it is taking in, I'd say any further decline in this ratio is very bad news for the program's future without significant reforms.

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

I think the people of Galveston would disagree with you.

So they're making however much more per month than social security alone. Most workers don't have just social security - they also have a pension/401k/IRA/some other form of retirement savings as well. My wife will be getting both social security and her state pension upon retirement (assuming the former is still around, which is questionable). It's disengenuous to act as though the people of Galveston would be relying solely on SS if they hadn't opted out.

But keep comparing apples to oranges.

 

[Almington]

Re: The 112th Congress: Debt ceiling edition

I think the people of Galveston would disagree with you.

As they said:

Two government studies of the Galveston Plan - by the Government Accountability Office and the Social Security Administration - claim that low-wage workers do better under Social Security. However, these studies assumed a 4 percent return, which is the minimum rate of return on annuities guaranteed by the insurance companies.

It depends on what the ASSUMED rate of return on the investments is. Given that was written in 2005, I wonder how well the pension managed through the decline of 2007-08.

 

[Foxton]

Re: The 112th Congress: Debt ceiling edition

Do you not see how you just proved that it is a Ponzi Scheme?

No because there will always be people paying in.

 

[MinnFan]

Re: The 112th Congress: Debt ceiling edition

So they're making however much more per month than social security alone. Most workers don't have just social security - they also have a pension/401k/IRA/some other form of retirement savings as well. My wife will be getting both social security and her state pension upon retirement (assuming the former is still around, which is questionable). It's disengenuous to act as though the people of Galveston would be relying solely on SS if they hadn't opted out.

But keep comparing apples to oranges.

Why wouldn't they have additional money put away too?

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

Do you not see how you just proved that it is a Ponzi Scheme?

If that's your definition of a Ponzi scheme, then the entire world economy is a ponzi scheme.

It's not; but I understand that simpletons like yourself think as such.

 

[MinnFan]

Re: The 112th Congress: Debt ceiling edition

No because there will always be people paying in.

If they're paying in less than the system is taking out then the system isn't exactly sustainable.

 

[Foxton]

Re: The 112th Congress: Debt ceiling edition

If they're paying in less than the system is taking out then the system isn't exactly sustainable.

Which doesn't make it a ponzi scheme, which was your point.

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

Why wouldn't they have additional money put away too?

Probably because they're already contributing more...I have no idea what contributions are in galveston, since your link is severely fact-deficient.

but if it's at all like railroad pensions (which are likewise excluded from SS) - it's essentially taking what would've been contributed to SS and lumping it in with what would've otherwise been a company pension into one overarching pension plan.

It's also noted that your galveston article is from 2005 - i'd be interested to see how those numbers looked for people who retired 3 years ago or even today given the stagnating investment market.

 

[MinnFan]

Re: The 112th Congress: Debt ceiling edition

Probably because they're already contributing more...I have no idea what contributions are in galveston, since your link is severely fact-deficient.

but if it's at all like railroad pensions (which are likewise excluded from SS) - it's essentially taking what would've been contributed to SS and lumping it in with what would've otherwise been a company pension into one overarching pension plan.

It's also noted that your galveston article is from 2005 - i'd be interested to see how those numbers looked for people who retired 3 years ago or even today given the stagnating investment market.

They're contributing approx the same amount so I'm pretty sure they'd be able to supliment their income.

Given that the historical rate of return is 10-12% and gov't is less than 3% they'll come out way ahead over the course of 30 years of investing even after a downturn.

I know it pains you that the gov't isn't always the answer for everything. Is this the point where I'm supposed to call you a name now. It seems like to you that the only way to win an agrument.

 

[Bakunin]

Re: The 112th Congress: Debt ceiling edition

Probably because they're already contributing more...

Isn't this essentially what the federal government's old retirement system was (CSRS) before they switched to FERS?

 

[Foxton]

Re: The 112th Congress: Debt ceiling edition

I know it pains you that the gov't isn't always the answer for everything. Is this the point where I'm supposed to call you a name now. It seems like to you that the only way to win an agrument.

I've heard this enough times now that I want to know what you actually think the government is good for?

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

If they're paying in less than the system is taking out then the system isn't exactly sustainable.

Which doesn't in and of itself make it a ponzi scheme. Again, just because a baseball is a ball, doesn't mean all balls are baseballs.

Logic 101.

 

[MinnFan]

Re: The 112th Congress: Debt ceiling edition

I've heard this enough times now that I want to know what you actually think the (Federal) government is good for?

Defense. Courts. Foreign diplomacy. Interstate infrastructure. -- Basically those things that are put forth in the Constitution.

The states can take care of the rest and the beauty of that is we can chose the system we want to live under. If one state is becoming too oppressive or another state is has put forth some really good ideas we can then vote with our feet. To me that beats the one size fits none approach we're moving towards.

 

[unofan]

Re: The 112th Congress: Debt ceiling edition

Given that the historical rate of return is 10-12% and gov't is less than 3% they'll come out way ahead over the course of 30 years of investing even after a downturn.

Come again?

Do you even read the stuff you link to? It said the average return it was basing its projections on was 6%. Where the fark are you pulling 10-12% from?

Jesus H Christ, even when something tends to support you, you can't even quote it accurately.

 

[Foxton]

Re: The 112th Congress: Debt ceiling edition

Defense. Courts. Foreign diplomacy. Interstate infrastructure. -- Basically those things that are put forth in the Constitution.

The states can take care of the rest and the beauty of that is we can chose the system we want to live under. If one state is becoming too oppressive or another state is has put forth some really good ideas we can then vote with our feet. To me that beats the one size fits none approach we're moving towards.

Oh okay, the federal gov't is bad but the states are free to do what they wish and that's good.

 

[MinnFan]

Re: The 112th Congress: Debt ceiling edition

Come again?

Do you even read the stuff you link to? It said the average return it was basing its projections on was 6%. Where the fark are you pulling 10-12% from?

Jesus H Christ, even when something tends to support you, you can't even quote it accurately.

If you had any concept of the free market you'd know that the histocial rate of return of the stock market is 10-12% depending on how you calculate the numbers. I was speaking towards if you let people keep their own private accounts. No wonder you like SS so much. You have no idea how much more money you could make it you were allowed to invest it yourself.

Galveston has likely has safer investments that don't have as high of an overall rate of return, but won't be hit as hard during a downturn like we just had.