A strong "guarantee" is not an "absolute" guarantee. That is my problem with the privatize mindset. Sure it will be great to have it privatized until that one time when it fails because it is not absolutely guaranteed.
Of course the debt our current system causes throws a whole other variable into the equation because as it is now the absolute guarantee method cannot be sustained. So, maybe even if privatization has flaws then it is still better than an unsustainable system? It would appear to be. But I have one question... how does the privatization method affect an elderly person who didn't work all her life? Will that system still help her or does it only help those who worked their whole lives?
Two points, I think there can be some backstop. I think democrats would want that on the table if they ever got to the table. Some way to have Government give some degree of a backstop for a catistropic failure.
However, if structured correctly, the only time you would see retirement plans fail would be in a world wide collapse that would also impact the governemnt.
The thing we have to realize is that there is no such thing as an Iron clad guarantee now, and with each passing day, the guarantee the government has made us grows weaker.
When you speak of a woman who has never worked, I assume you mean she is married to a man who did and who paid into the system. in the current system, she would get a smaller percentage of his SS check in her retirement years, the SS website calculator I posted can give you that information.
But what you need to know is, that this number is SMALLER than the income from SS they got when her husband (in this scenario) was alive.
In a privitized system, the money the man paid into the system is part of his estate. So his "nestegg" is still there when he dies. His widow, still has all of that money and still draws based on the same numbers that existed when he was alive.
and when she dies, the estate passes to their heirs. This is important.... the government doesnt get any of the money. It is thier money.
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Two points, I think there can be some backstop. I think democrats would want that on the table if they ever got to the table. Some way to have Government give some degree of a backstop for a catistropic failure.
However, if structured correctly, the only time you would see retirement plans fail would be in a world wide collapse that would also impact the governemnt.
The thing we have to realize is that there is no such thing as an Iron clad guarantee now, and with each passing day, the guarantee the government has made us grows weaker.
When you speak of a woman who has never worked, I assume you mean she is married to a man who did and who paid into the system. in the current system, she would get a smaller percentage of his SS check in her retirement years, the SS website calculator I posted can give you that information.
But what you need to know is, that this number is SMALLER than the income from SS they got when her husband (in this scenario) was alive.
In a privitized system, the money the man paid into the system is part of his estate. So his "nestegg" is still there when he dies. His widow, still has all of that money and still draws based on the same numbers that existed when he was alive.
and when she dies, the estate passes to their heirs. This is important.... the government doesnt get any of the money. It is thier money.
#1 If a worldwide collapse occurs that is when we need SS more than anything. Having a "backstop" might solve this problem... however, such a "backstop" is going to take alot of money... So I'm not sure the individual benefits of privatizing when coupled with a backstop will really be that much greater than the current SS plan.
#2 If SS is privatized I would assume some individuals retiremants can tank and others will be okay. Will such a backstop help those people in this situation?
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#1 If a worldwide collapse occurs that is when we need SS more than anything. Having a "backstop" might solve this problem... however, such a "backstop" is going to take alot of money... So I'm not sure the individual benefits of privatizing when coupled with a backstop will really be that much greater than the current SS plan.
#2 If SS is privatized I would assume some individuals retiremants can tank and others will be okay. Will such a backstop help those people in this situation?
Structure is key. when we hear "privitize" we are conditioned to think "stock market"
this is a huge problem and one caused by those who oppose taking SS away from Government control.
properly structured, a retirement account can be very safe. and backstops do not have to be government promises. Insurance companies have insurance companies that insure their insurance. this is a backstop.
Annuities are very safe, very stable and very good vehicles. Realistate Investment Trusts can be very good methods for building retirements.
even when the value of property goes down, REITs can do well because you do not rely on the value of the property, you rely on the income from rents.
in down economies, people rent more than in up econonmies.
there are vast numbers of options outside of buying shares of Exxon.
Total Federal/State/Local spending is almost $7 Trillion per year. Total revenue is less than $4.5 Trillion. We are headed for a trainwreck.
Currently we are taking in less than $900 Billion in Payroll Taxes. (SS Tax).
We have on the books right now, more than $14 Trillion in SS liabilities.
this system is unsustainable. we have zero guarantee from the government now.
Not to mention that the total unfunded mandates are in the area of 112 TRILLION dollars. That is promises made by our governmnet that they have not figured out how to pay for.
so we have 14 trillion dollars in debt. we are borrowing an additional 1.5 Trillion dollars per year, and we have promised 112 trillion to people that we have not figured out how to pay for.
My brother, we have a serious problem. we cannont sustain this for very many more years.
__________________ If I do something stupid blame the Lortab!
Structure is key. when we hear "privitize" we are conditioned to think "stock market"
this is a huge problem and one caused by those who oppose taking SS away from Government control.
properly structured, a retirement account can be very safe. and backstops do not have to be government promises. Insurance companies have insurance companies that insure their insurance. this is a backstop.
Annuities are very safe, very stable and very good vehicles. Realistate Investment Trusts can be very good methods for building retirements.
even when the value of property goes down, REITs can do well because you do not rely on the value of the property, you rely on the income from rents.
in down economies, people rent more than in up econonmies.
there are vast numbers of options outside of buying shares of Exxon.
Total Federal/State/Local spending is almost $7 Trillion per year. Total revenue is less than $4.5 Trillion. We are headed for a trainwreck.
Currently we are taking in less than $900 Billion in Payroll Taxes. (SS Tax).
We have on the books right now, more than $14 Trillion in SS liabilities.
this system is unsustainable. we have zero guarantee from the government now.
Not to mention that the total unfunded mandates are in the area of 112 TRILLION dollars. That is promises made by our governmnet that they have not figured out how to pay for.
so we have 14 trillion dollars in debt. we are borrowing an additional 1.5 Trillion dollars per year, and we have promised 112 trillion to people that we have not figured out how to pay for.
My brother, we have a serious problem. we cannont sustain this for very many more years.
You have hit the nail on the head.
SS issue with the Republicans and "doing away" or privatizing Soc. Sec. is a strawman argument.
Why.
Because we will not be able to support this program in the future, no matter what political party is in charge.
Then we will be in worse shape than we were before Soc. Sec. started.
I looked at this 25 years ago, when I started my first job and I started putting money into my 401k.
Now the government is talking about taking MY MONEY and re-distributing it.
Egypt will look like a calm place, compared to here, if this happens.
Structure is key. when we hear "privitize" we are conditioned to think "stock market"
this is a huge problem and one caused by those who oppose taking SS away from Government control.
properly structured, a retirement account can be very safe. and backstops do not have to be government promises. Insurance companies have insurance companies that insure their insurance. this is a backstop.
Annuities are very safe, very stable and very good vehicles. Realistate Investment Trusts can be very good methods for building retirements.
even when the value of property goes down, REITs can do well because you do not rely on the value of the property, you rely on the income from rents.
in down economies, people rent more than in up econonmies.
there are vast numbers of options outside of buying shares of Exxon.
Total Federal/State/Local spending is almost $7 Trillion per year. Total revenue is less than $4.5 Trillion. We are headed for a trainwreck.
Currently we are taking in less than $900 Billion in Payroll Taxes. (SS Tax).
We have on the books right now, more than $14 Trillion in SS liabilities.
this system is unsustainable. we have zero guarantee from the government now.
Not to mention that the total unfunded mandates are in the area of 112 TRILLION dollars. That is promises made by our governmnet that they have not figured out how to pay for.
so we have 14 trillion dollars in debt. we are borrowing an additional 1.5 Trillion dollars per year, and we have promised 112 trillion to people that we have not figured out how to pay for.
My brother, we have a serious problem. we cannont sustain this for very many more years.
I think that any SS solution must meet certain requirements.
#1 The replacement must be sustainable.
#2 The replacement must have a minimum guarantee.
#3 The minimum guarantee must be enough to meet basic needs.
I can imagine a sustainable privatized solution with insurance to guarantee a minimum value. However, in the case of a financial catastrophe there would need to be something like FDIC where the government would insure the guarantee from the insurance company.
However, the numbers would really have to be worked out by people smarter than me to see if something like this was really feasible
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I think that any SS solution must meet certain requirements.
#1 The replacement must be sustainable.
#2 The replacement must have a minimum guarantee.
#3 The minimum guarantee must be enough to meet basic needs.
I can imagine a sustainable privatized solution with insurance to guarantee a minimum value. However, in the case of a financial catastrophe there would need to be something like FDIC where the government would insure the guarantee from the insurance company.
However, the numbers would really have to be worked out by people smarter than me to see if something like this was really feasible
My solution left out one very important dynamic. What about the people who haven't worked enough to put enough money into this new SS to be able to draw enough money out to maintain their basic needs for long?
I would say that a government fund be started for such people and that it would only be accessible after their and their spouses privatized SS dried up.
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jf - the Federal government will never have a fund that just banks the money for future use. They will always find a crisis to use it on and pass the problem down to the next guy.
That is basically my entire issue with Social Security.
Some people believe that there is some account out there with all of the money that they have paid in, sitting in.
If they did some research they would realize that Social Security is actually a pyramid scheme, sponsored by your Federal Government.
Social Security's $2.5 trillion surplus
Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.
The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest.
I think that any SS solution must meet certain requirements.
#1 The replacement must be sustainable.
#2 The replacement must have a minimum guarantee.
#3 The minimum guarantee must be enough to meet basic needs.
I can imagine a sustainable privatized solution with insurance to guarantee a minimum value. However, in the case of a financial catastrophe there would need to be something like FDIC where the government would insure the guarantee from the insurance company.
However, the numbers would really have to be worked out by people smarter than me to see if something like this was really feasible
I dont think your view here is unreasonable at all.
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My solution left out one very important dynamic. What about the people who haven't worked enough to put enough money into this new SS to be able to draw enough money out to maintain their basic needs for long?
I would say that a government fund be started for such people and that it would only be accessible after their and their spouses privatized SS dried up.
Long term disability.
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