sant (01/20/83)
I would like to start a discussion on how netlanders feel about
social security. This week's Newsweek contains the following table:
AVERAGE WAGE EARNER
Year attaining Total social-security Benefits worker
65 taxes paid(1) can expect to
(includes interest) receive during
retirement
1940 $ 63 4,867
1960 1,972 25,995
1980 24,206 125,125
2000(2) 174,860 404,204
(1) Includes worker's and employer's payments
(2) Projections
Clearly this robbing Peter to pay Paul pyramid cannot continue
indefinitely. I myself am 28 and do not feel confident about social
security being around when I retire. How do you feel?
Do you think it would be fair to reimburse everyone whatever they
have paid into the system so far and then shut down the system altogether?
Does anyone know what overheads are associated with social
security? What fraction of the dollar you put into the system is actually
paid to the retirees?
I understand that there are several very powerful groups(e.g. AARP)
which vehemently oppose any tinkering with the system's present structure.
Is there any organization along the lines of 'People against
social security' ?
Please reply to the net.
Deepak Sant
HP Labssoreff (01/21/83)
The most important thing to remember about the social security system is that it is really a transfer payment system. It is not now, and is not going to be a savings system. In an inflationary economy of constant size with steady demographics, it would be perfectly possible for each generation to receive more dollars out of the system than they put in. The thing that would have to balance under those circumstances would be total payments after adjustment for inflation, since that determines what actual flows of goods are taking place. The real situation is not, of course, one of demographic stability. As the baby boom generation (myself included) eventually reaches retirement, we can't expect to do as well as the preceding generation for the same reason as will be true all our lives: our cohort's size will always mean more intense competition for availible resources than in smaller cohorts. Note that this applies regardless of whether our retirement system is a transfer payment one or a savings-based one. If it is transfer-payments-based, then payroll taxes will become very high when the number of retirees peak, with obvious political pressures to cut benifits. If it is savings-based, those savings must be held by someone, and that someone will have a huge debt at the time the number of retirees peak, with consequent pressure to reschedule or default on it. -Jeffrey Soreff (hplabsb!soreff)
dfz (01/21/83)
I haven't heard of any organization called "People Against Social Security" but if there is one I'd sure appreciate some info on it so I can join. I do not favor the (fraudulent) removal of benefits from those who have something coming but they better stop the (also fraudulent) claim that people in their working prime now will live to see any benefits. Also, is there any information on tax reform groups looking into such issues as "flat income tax" and, in general, the elimination of the various tax deductions which favor special interests (such as the home construction industry)?
mmt (01/21/83)
The original article contained what looked like very misleading figures, for two reasons (1) they compare start-up time input to the system with ongoing output and income, and (2) they use current dollars, rather than allowing for inflation. The commentary by Sant also sounds like either a self-serving bit of propaganda (I don't want to pay for my retired relations and other old people to survive) or foolish misunderstanding (my dollar now is worth the same as a 1940 dollar or a 2000 dollar). Basically, social security is what we who are now working owe to those who made it possible for us to exist and to work. The business about getting out what you put in is baloney; it's a way of ensuring that we all can share the wealth when we are too old and sick to contribute any more. It is the workers NOW who are paying for benefits received NOW, not workers of 20 years ago paying for what they now receive. I hope our children believe that we should not starve when we are old. If they don't, BOY will there be a revolution!!! If we don't support our dependents, what kind of morals do we have? Will we deserve support later? Martin Taylor
pn (01/22/83)
My opinion is that Social Security is just a Ponzi scheme run by the Federal government. Unfortunately, SS allows a certain segment of the population to vote themselves benefits paid for out of someone else's pocket. As the average age rises due to medical advances, this problem will only get worse. The suggestion that everyone just get paid what they paid in and the system ended would be fine by me, but the AARP would scream. Those people seem to feel they "deserve" their SS benefits. Also, where is the money supposed to come from to pay off people? I wish there were some way to end SS. But I think the elderly have too much political power.
gnu (01/22/83)
One group that truly cares about tax reform is the Libertarian Party. Whether they ever have enough political muscle to do something about it mostly depends on you, and you, and you too. John Gilmore, Association of Libertarian Feminists
bj (01/22/83)
Clearly this robbing Peter to pay Paul pyramid cannot continue
indefinitely. I myself am 28 and do not feel confident about social
security being around when I retire. How do you feel?
I believe that figures presented are misleading. The comparison being
made is between apples and oranges. To get figures which have any
value you have to look at real dollar ammounts.
For a contrived example, assume that people put in $1000/year for 40 years
and then collect $5000/year for 8 years. In this case the ammounts put in
and taken out are the same. If this happened for everybody and there was
a constant population, the system would work. Income each year would
exactly match expenses.
Now, assume there is an inflation rate of 10% per year and that all
collections and payments are indexed. The figures would then show
that a person puts in a little more than $440,000 and takes out almost
$2,600,000. In spite of the apparent imballance, the system still
works since the collections and payments in a given year have the same
1 to 5 ratio as they did when the system started. Income each year
would still exactly match expenses.
In order to get make the Newsweek figures meaningfull you have to
have a lot more information and do more compilcated things to it.
I suspect that meaningfull figures would show collections and payments
about even (except for the first generation). It is not a pyramid scheme.
Social Security does have some problems, mostly due to the fact that are
society is getting older. There are fewer and fewer people paying Social
Security and more and more collecting. It used to be around 5 workers per
collector. The ratio is somewhere around 4 to 1, will drop to 3 to 1 in the
next decade, and finally drop to 2 to 1 somewhere around 2020.
[caveat - all the numbers in this article are from memory (except for the
$44,000 and $2,600,000 which I just calculated). If you discover minor
errors in the numbers, please notify /dev/null.]
Do you think it would be fair to reimburse everyone whatever they
have paid into the system so far and then shut down the system altogether?
I won't make a judgement about fairness, but I do not think is should be done.
One reason is that the government could not to afford to. It has less than
one years income at the present time, it could never pay back all the money
it has collected (plus interest). Another reason is that the goverment does
a better job of supporting people than they would do. If you gave the money
back, millions of people would spend it rather than investing for later.
B.J.
decvax!yale-comix!herbison-bjheliotis (01/24/83)
There is one thing about your "robbing Peter to pay Paul" problem that makes it less bad. The *current* workers are paying the older people's *current* benefits. It really is not a savings plan, no matter what they say. More importantly, I think the way to solve this problem is to look at the main cause: people are living longer, so the payer/payee ratio is getting samller. The solution: raise the retirement age; people are healthier at 65 than they used to be. (Yes, I know this does not work well when unem- ployment is high, but I think that in the long run it's the best way) Jim Heliotis P.S. Let's hear others' ideas on how to "save" S/S.
ken (01/24/83)
I do not have faith in the U.S Government as a manager of my finances;
it can not even manage its own. Therefore, I would like to unsubscribe
from the social security system, investing that money instead into my own
IRA or equivalent. Does anybody know whether it is possible to not
contribute to social security?
Ken Turkowski
{ucbvax,decvax}!decwrl!turtlevax!kenken (01/25/83)
I agree with Bob Warren. After this year when the funds run out, the
payments that people received as Social Security should instead be
called Welfare payments. Similarly, if general tax revenues are used
to bail out the S.S system, two checks should be sent: one from Social
Security and one from Welfare.
Ken Turkowski
{ucbvax,decvax}!decwrl!turtlevax!kensteve (01/26/83)
I agree with you 100% we should take care of our parents and grandparents who made it possible for us to live and work and share in this country. What I dissagree with is the premiss that my parents and grandparents are the governments responcibility. They are not.They are mine !! Milions of our older people(my grandmother included) thought that they wrer going to be able to retire on the government SS program. This program was started when an 8th grade education was concidered well educatated and children were working in sweatshops. People believed what the government told them and maybe the government believed it to. SS was realy supposed to SUPLEMENT privite plans such as pensions, investments, and savings(remember when people saved for retirement) but when all these people retired verry few of them had anything long term put away and besides the government had been saving for them. Well these people screwed up and we can't abandon them now but I would like a choise of wether or not to partisipate in SS. Get me out and pay those who are still in from general revenue untill they all die out. That takes care of them and lets me take care of mine. steve (bunker)
fair (01/27/83)
The way to stop contributing to the Social Security System is to become a federal employee. Erik E. Fair fair@Berkeley (ARPA) ucbvax!fair (UUCP) Former postal worker.
eager (02/04/83)
There are some interesting features of the Social Security System: 1. Only earned income is taxed. If you receive your income from investments or anuities, there is no tax. This is mostly of benefit to the upper classes. 2. There is no trust, although there is a Soc. Sec. Trust fund. No investment is done, all income goes to the Treasury and all expenses are paid by the Treasury. 3. Soc. Sec. System tries to keep people out of the work force by offering benefits at 65, and further by decreasing benefits dollar-for-dollar to offset earned income. 4. SSS is paid for by the middle classes. With the top limit of earned income somewhere about $30,000, the wealthy pay a small percentage of income compared with the average wage-earner. 5. If I could invest 13% of my salary in a real investment, I would be well prepared for retirement. This is the amount the Feds take (6.5+% from my paycheck, 6.5+% from my employer). Just figure up what $4000 per year at 10% interest gets you after 40 years! 6. Welfare is of benefit to the society as a whole. SSS as a retirement system (which it was never intended to be) is a cruel joke on the people who expect it to support them in their retirement and even crueler to those who will bear the burden of this fiscally mismanaged system. -- Mike Eager @ amd70