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Social System in the US
As usual, I have to do some research for a project for my study (as you all know I switched from law school to American Studies). This time – however – I do not have to write an essay: I have to hold a presentation. Subject: the social (security) system in the US.
Finding data etc. is not that difficult, but I like giving the perspective of Americans on subjects like this as well. So I am wondering what you all think of your social security system, should it be improved, if so how? Do you favor a bigger social system, or do you believe that the government is overdoing it as it is?
24 Responses to “Social System in the US”
Finding data is easy. In fact, you could probably find hundreds of thousands of Social Security numbers and Birthdates if you really wanted to do “research!”
But a serious answer:
I believe the solution to social security is to phase it out.
Stop taking money from our paychecks as of now, and decrease payments based on your years of work. It’s going to happen anyway. They might as well be honest about it.
It’ll never happen. But it should.
I personaly think that our Social Secruity is a pretty good system, (I know I’m prolly in the minority) The only thing I hate is how Congress is raidig it to pay the National debt.
To all those free market types who want to disband SSI bring up Enron and the current pension mess. SS right now is a security blanket, one cammot live on SS alone. Any privatization should be a suppliment to the current system. Bring on more savings with SS+, a personal savings system in addition to whats there now. Wall Street and the Mutuall fund would be like vultures if the system was completely private. We aren’t Norway and I don’t want the US to become Mexico or Brazil of the 19080′s.
We pay it but feel that it won’t exist by the time we’re eligible to collect it.
I used to buy the meme that the social security system was doomed to collapse because ratios were off et cetera. A critical analysis shows that simply isn’t the case. If you take the best case economic estimates that the pro-privatization people then the system is solvent for the entire projection period (out to 2080) with no changes. If you use the middle-road projection you get the 2065 number where benefits decrease if there are no changes. It therefore needs tweaks not to be ripped down and torn apart. So it therefore should have retirement indexed to life expectancy, and perhaps have a slightly raised cut-off on taxable income (everything over $95,000 a year doesn’t get the social security tax).
However one thing that needs to be straightened out is the perception among many people, even those that say that the system won’t be there for them, that this is their retirement plan. We need to save for retirement and use social security as an insurance policy of sorts, to provide some guaranteed cash flow if necessary but not as a sole source of income. Social security can certainly stop you from starving, but it won’t help prevent you from buying, “100 Ways To Prepare Alpo and Love It.”
I like it. I think it needs minor adjustments, but not major ones and not privatization, which I oppose. My take is that it has worked perfectly well, doing what it promises to do, for seventy years or so. Changing it drastically would probably break it, and I don’t know that I trust the crew in Washington these days to fix it in an appropriate manner, though Sen. Max Baucus has announced he’ll be holding hearings to do just that.
A little lightbulb just went on…Since Bush’s Social Security plan didn’t pass muster to kill it, maybe the whole point of the Iraq war was his Plan B? Inflate the National debt so much that Social Security is emptied trying to pay it off? (This is said [partially] toungue-in-cheek).
Anna,
Thats what my mother thinks.
That the real motivation of the Big Gov’t republicans is to bankrupt the Federal gov’t thereby makeing the destruction of those ‘hated’ gov’t programs.
I however am not that cynical.
I agree with Mr. Moderate. I might consider some means testing regarding people for whom the SS check would be pocket change.
Cleaning up SS, Health Care and Pensions can give millions of folks peace of mind in their waning years.
I think social security should stay the same, we should fund it as necessary to provide its well being. I’m a well-off person, my family makes over 200,000 a year, and in my opinion, although in retirement I probably won’t need that money. Its good to know its there. The market in the last six years has been volatile, crashing in the early 2000-2002 cycle, and now booming, but I trust it as far as I can throw it, just because the market has been so fickle.
I wouldn’t call that tounge in cheek Anna, considering that has long been the deconstructionists(modern conservatives) goal. Despite the fact conservative used to mean to conserve (baby steps, and maintain rather than grow gov.) the modern conservatives (Reganites) goal was to pull the programes instituted by Johnson,FDR, and even TR apart. The drown the gov. in a bathtub comment made long ago wasn’t a joke, it was real. So by completely screwing up the system, and causing fiscal chaos very well might have been their goal, and the past statements are not on their side in refuting this assumption. Now some of the bureacracies created were pure garbage in the long term (welfare), but I doubt even FDR would have kept some fo them going after they had made an impact, and the US was out of socio-political-economic danger of the depression.
That aside, if we can keep the gov.’s hands out of the till (lockbox…LOL I know was damn funny when Gore said is so many times) and tax the people that don’t need to use it, but still recieve benefits (Warren Buffet’s of the world) it will be fine. I’d say SS tax on income over $300,000 a year, but leave the rest of the SS tax as is, and maybe even lower it if fiscally possible on the lowest earners.
Bush, when he was running unsuccessfully for public office in the ’70′s said that SS would be bankrupt by 1988. I take everything he and his party say about SS with a great big grain of salt.
Watching my parents losing a big chunk of their retirement a few years ago was what convinced me (along with a very bad mutual fund I was not avble to get out at the job I had) did b=not endear me to privatisation.
I could have recovered my losses (when I quit that job, I was able to take out the capital (there was no earned interst and pput it elsewhere), but my parents could not as they were very close to retirement and did not have the years to recover the losses in the market.
I don’t have the faith in the markets some do, but I do know that no matter how my investments do, the broker still gets his cut.
SS will need tweaking, as should any government program, but I want it to stay.
But is there done enough? For instance for the disabled? Is it not true that one has to be completely disabled to be able to receive any help? What about 80% disability? Would it not make sense to let someone work for 80% and give the other 20% for instance?
Mr. Moderate, what a great analysis. The same thing I found.
Social Security is supposed to be a safety net, not a retirement plan. As such, it should not be privatized and be put in investments such as the stock market that are risky. Would you put your personal safety net in the stock market? Use SS as your backup plan, then use your 401(k) or IRA to invest in stocks or other more risky investments.
The plan really needs tweaking, not an overhaul. Lift or remove the cap on wages that SS contributions are made on and, if necessary, index increases not on wage increases but on inflation.
Not only do people need to understand that this is not a retirement plan, people also need to understand that it’s not going anywhere. Even without changes, benefits will always be around in some form. Even once the trust fund is out of money, incoming money will be able to cover a large portion of scheduled payments. While we may not get as much as we would be scheduled, with no changes, we would get something. That doesn’t mean it shouldn’t be put on more solid ground but it is another misconception many people have about the system.
Michael, I doubt many disabled slip through the cracks although I can’t say for sure. My mother has a heart condition that slowed her down considerably. She felt that she could have kept working part time but SS kicked in for her because of her disability.
Now, I think there is room for improvement. Had they said that she could continue working part time but a portion of her benefits would be withheld if she did, I have a feeling she would have continued to work part time for at least a few more years. Instead, they said if she went back to work, she got no benefits. Seeing as she couldn’t work full time, the choice was obvious.
But is there done enough? For instance for the disabled? Is it not true that one has to be completely disabled to be able to receive any help? What about 80% disability? Would it not make sense to let someone work for 80% and give the other 20% for instance?
That’s not a bad idea M. That’s how privately purchased long term disability works. SS disability payments, which are a small section of total disbursments, are an all or nothing proposition AFAIK.
Mr. Mod.: exactly. That is something i noticed. we do it like i described in the netherlands.d
Problems with social security:
1. Every generation gets a worse deal than the preceding generation. My grandparents paid 1% and received double digit returns. My parents paid 4% and recieve a real return. I pay 7% (plus the employer contribution) and will proably not receive much of a return. My daughter will probably pay more than 10% and receive a negative return.
2. There is only there things that can be done: raise taxes, cut benefits, or try to actually invest the trust fund.
3. The only thing that pays SS benefits is current year SS taxes. The trust fund is a claim, by the Social security adminsitration, on future general revenues.
4. Projections over aobut 10 years are virtually worthless because we do not know how immigration changes will affect SS. We also do not know what the employment statistics will be in the future.
Another myth perpetrated largely by Bush from the 2004 campaign is that the trust fund is just a bunch of IOUs and that we should not expect those IOUs to be paid back. The truth is that the trust fund is United States bonds, a very safe investment considering the fact that the United States has never defaulted on a bond.
Ryan, to state the obvious, government bonds issued by the government to the government are simply IOU’s (debt) moved from one pocket to another–internal accounting. When the time comes to “cash” them the actual money still has to come from somewhere. It doesn’t materialize out of thin air.
Superdestroyer nails the core of it in his 2 &3. When current SS tax revenues run short, the shortfall will be paid by new taxes or borrowing, or overall benefits will have to be cut to match the insufficient revenues.
On the bright side, SS is in better shape than Medicare.
Thanks for all your comments in this thread. I can use some quotes from this for the presentation. Much appreciated.
Tully, that still doesn’t change the fact that the US has never defaulted on those IOUs, whether they were written to another part of the government or to other governments or individuals. I’m sure the likes of China would love to hear that this history may change in the near future.
Taxes are going to have to go up significantly no matter what. A small portion of the government’s debt is held in IOUs by the Social Security administration. Taxes are going to have to skyrocket to cover the debt owed to China alone. The amount taxes will have to go up in order to pay back the debt to the Social Security administration is miniscule compared to the amount they will have to go up in order to pay back the debt to other governments and individuals.
There are several basic problems with the Social Security system, but they are seldom discussed honestly.
First, the privatization mantra is a red herring promoted primarily by the very well off who do not even depend on Social Security. They are not trying to revitalize it, they are trying to marginalize its beneficiaries. And they have a very good reason for wanting to do this.
Over the past 20 years, the over-tax in social security (payroll tax) has supported an under-tax elsewhere. The retirement of the baby boomers will reverse this. Inevitably, this means that there will be an OVERTAX in the general fund, most likely in corporate income tax and in tightening the taxes that have lately been loosened. The WEALTHY will have to pay. The middle income popluation is already paying a historically high tax rate. This is why the Republicans have been urgent to repeal the estate tax, they realize that with another couple of years, it will be utterly impossible.
This brings us to the best first fix of Social Security, which is to eliminate the income cap. There should be capping on the benefit side, but not on the income side. All payroll income (all earned income, even stock options and perks) should be subject to social security taxes. Elimination of the income cap would go a long ways to filling the social security revenue hole. It would also reduce the unfair nature of the present tax structure.
The next step is to deal with the worker to beneficiary ratio. There are two ways to do this, either get more workers or make them more productive. Oddly, it is too late to birth enough more workers for the short run. So, you would think we would have exactly the opposite view of immigration than we have. Hmmm. MORE WORKERS = stronger social security. So too, is greater productivity so long as it results in better wages.
Oh well, just some ideas.