Social Security Surplus

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Quote Capital:... clearly you already looked back further than the 20 years and choose not to answer the question on the terms offered. He said 7% in 40 years. NOT 7% in 20 years. You purposely cherry picked his question. Than chastised his intelligence. I find that funny.

You got caught being a disingenuous A-hole, Don't try to make a discussion out of it.

I know you need to bastardize reality to keep your delusions alive but I didn't question Maui's math... I QUESTIONED THE ASSUMPTIONS THAT WENT INTO HIS MATH. And clearly the two main inputs... his 7% average doesn't hold up in every 40 year period. And more ridiculous was his claim someone 40 years ago could have easily socked away $8000 a year. I was doing well back then and my/employer SS contributions were around 1/10 Maui's assumptions. So if he can't make a point without gross distortions... HE HASN'T MADE A POINT... and therefore his claim he could be worth 1.5 or 1.7 million getting $75k a year is pure bullshit. Gettin' in yet Einstein?

Quote Pierpont:So in your mind picking HALF of the last 40 years is "cherry picking"?

Quote Cap:Did you not say "First the 10-year Treasury yield has only been above 7% for about ONE year in the past 20"

You can answer your own question. I'll assume it was rhetorical.

Maui never presented a credible source for his 7% average TBill yield holding up over 40 years. But it's clear just because one historical period that included the high interest rates of the late 70's and early 80's brings up the average, doesn't mean that's the norm as he's claiming. All one has to do is look at yields in the 50s and 60s. If you bothered to look at the 10year TBill yield chart I posted, it's only been above 7% for 12 months in the last 20 YEARS. That's not being rhetorical… it's the fact. Maui's scenario was deeply flawed and if you believe it… it's because you're a a gullible fool than needs to believe ANYTHING the Right claims no matter how unrealistic or idiotic.

You can't have it both ways Cap... though I'm sure you want to. You can't claim there may have been a 7% yield average over the LAST 40 years and pretend that proves Maui correct without also seeing the absurdity of his $8000 a year assumption over that same period. All I was doing was showing his assumptions were nonsense. And I ask again, what of those who start their retirement planning in 1992 where clearly there have NOT been 7% yields the past 20 years?

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Feb. 29, 2012 2:19 pm

Quote Pierpont:It's a rather unfair accusation. When Democrats were in control the entire national debt was about 960 billion in 1981. That was cumulative from all past admins... at least going back to about 1960 when the last time debt was paid down. Not a perfect record, but Reagan increased debt to about 2700 billion. You might deny it but the GOP changed at that point from the penny pinching party to the party of fiscal irresponsibility. Bush1 was perhaps the last of the old time fiscal conservatives. Clinton cut the deficit and got to a surplus... Newt's spending cuts helped but not my much. Clinton would have gotten to at least a unified surplus without Newt. And soon as there was a surplus, Newt tried to sabotage it in 1999. Where Newt failed Bush2 succeeded with tax rates so low that in constant dollars they've only exceeded Clinton's last year in 2 of the past 11 years... and then only by a total of 140 billion (2005 constant dollars). Then there was the GOP's reckless spending. The unanswered question was why Bush ran on preserving the surplus and paying down debt... then went fiscally insane?

What drove the deficit growth? Large spending increases, look how little spending growth was under Clinton with a Republican Congress. Apparetly the solution is a divided governmnet since, as you stated, the party that preaches fiscal restraint has a history of saying one thing and doing another when in power.

As for the trust fund, it's purpose was never to last forever... but if it can be increased or stretched out, then it will help close the gap. Just having an expanding economy will help as will pumping up wages... something the GOP seems determined to beat down.

What good is the trust fund if it is composed of debt that will have to be paid back when the Tbills are redeemed?

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Apr. 28, 2012 12:22 pm

Quote Capital:Sorry Pier. Apparently Facts cannot pierce dogmatic delusion bubble. Just find it funny where you delude yourself into thinking you smart them Dumb and you think you can barrel over people with your lies.
So let me see if I understand your latest excursion into insanity: if a fellow right winger poses a bogus scenario to claim anyone 40 years ago someone could now easily have 1.5 million except for that evil Social Security... we must believe him even if the assumptions that went into his little bogus exercise were untrue? Ya, you probably do.

You want me to scare you. As of a couple months ago. I’m am now a City Councilor.

I see you live in a town where the voters with IQs over 78 stayed home. God help your town.

Look Cap, I don't want to just trade insults with you. You questioned my critique of Maui's scenario yet even dealing with one of two variables, the other which you ignore, you STILL can't muster an intelligent rebuttal. Where's the beef Cap?

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Quote WorkerBee:

Wt What drove the deficit growth? Large spending increases, look how little spending growth was under Clinton with a Republican Congress. Apparetly the solution is a divided governmnet since, as you stated, the party that preaches fiscal restraint has a history of saying one thing and doing another when in power.


Sorry, the Clinton era is really a topic for another thread. And there is one here somewhere where I showed Newt's spending cuts were NOT what created the Clinton Surplus.

Found it last post here: http://www.thomhartmann.com/forum/2012/03/what-have-republicons-ever-done-americas-middle-class?page=6

The savings just don't add up fast enough. Clinton's own budget cuts and tax increase would have got us to a unified surplus alone. The Orwellian Right just refuses to give tax hikes any credit even if you look at CBO numbers, the revenue poured in. The Right NEEDS to rewrite history to give the credit to spending cuts or a cap gains tax cut. Again the numbers don't add up. It's an intellectually dishonest argument and only meant to convince those who already are predisposed to believe their narrative. Any objective person would laugh at their argument.

That being said any spending cuts obviously DO help cut deficits. Why the Right now claims increasing revenue is not necessary... you'll have to ask them why they are taking common sense off the table when revenues have in real dollars been essentially FLAT for 12 years. When one ignores what they say and looks at what they do, the GOP has been deliberately building up debt for 30 years. Why else so defend the irresponsible tax cuts that were once justified by the Clinton Surplus when that surplus disappeared the same year they were passed in 2001?

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I have got to find a new topic to disscuss with Peir, You are a hoot. You always work so hard to prove a falsehood. It's like a hamster on a wheel.

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Quote Capital:I have got to find a new topic to disscuss with Peir, You are a hoot. You always work so hard to prove a falsehood. It's like a hamster on a wheel.
And your main mode of debating is to claim what you believe is true and we must be dogmatic if we prove you wrong. That's why when cornered, you always run away from threads like the Second Amendment thread and the one that got hijacked into discussing Clinton's Surplus. Then you come back and make the same false claims all over again. Even now, you can't find the hole in my critique of Maui's example, yet you're implying I must be wrong without demonstrating where. Hell, you don't even have another of your Magic Numbers you think proves whatever nonsense you say is true! Which is why I love to ask if there are any intelligent Right wingers out there... because people like you clearly don't fit the bill.

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Mmm picking a fight are we?

What you deeming "running away" is the slow dawning of realization that you really haven't a clue, but that such flaws in your reasoning are never to be overcome, slowing turning away and tentatively walking away, looking over my shoulder hoping that you'll say something that will change my mind that our discussion isn't a complete waste of time.

Concernly hold to your personal dogma that Conservative's Flee from your incredible intellect.

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Quote Capital:What you deeming "running away" is the slow dawning of realization that you really haven't a clue, but that such flaws in your reasoning are never to be overcome, slowing turning away and tentatively walking away, looking over my shoulder hoping that you'll say something that will change my mind that our discussion isn't a complete waste of time.
ROTF... you can rationalize your inability to deal with reality any way you want Einstein. I could care less. But thanks again for demonstrating your fatal flaw... one that will make you a one term dog catcher, once the people of your town see how you've not only stabotage your own intellect, but you're so convinced of your own infalibility you won't be able to resist abusing power to impose your idiocy on others. Who cares. We're off to the shore for some well deserved R&R..

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Quote mauiman58:

The average T bill Rate for the last 40 years or so is around 7% last I looked. If you take somewhere between $8-9,000 a year, get 7% earnings every year, and do that for 40-45 years, you will have in the neighborhood of 1.5 million dollars.

Capital, do you have an opinion on mauiman's assertion? Do you think if put his social security taxes (employee and employer) starting in 1967 into T-bills he would have $1.5 million today?

chilidog
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Quote chilidog:

Capital, do you have an opinion on mauiman's assertion? Do you think if put his social security taxes (employee and employer) starting in 1967 into T-bills he would have $1.5 million today?

Why thank you for asking.

Any compound interest calculator online will tell you his numbers under the terms he used are basically correct. It is actually 1.7M, not 1.5.. but who is Quibbling.

Here is my problem with SS. It was NEVER meant to be a retirement program, in fact at the beginning it was pegged to life expectancy.. but now it's an entitlement. It pays out on average far more that you pay into the system

Maui's premise that you would make more money in the private market is correct, However, SS wasn't meant as a retirement nest egg.

You want to fix it, Peg it back to life expectancy. If not, like all entitlements, It will fail under its own monumental weight. When governemnt finally realizes that it can't pay back the $4T it owes SS and wants to raise Taxes on the remaining workers to offset the eventual deficits. well....... People will be angry.

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Quote chilidog:Capital, do you have an opinion on mauiman's assertion? Do you think if put his social security taxes (employee and employer) starting in 1967 into T-bills he would have $1.5 million today?

I know you didn't ask me... and it would have been nice if Maui actually cited a calculator we could use to verify his claims, but even if the average TBill yield averaged 7% for the past 40-45 years... who the hell had $8-9000 to sock away back in 1970 when making a mere $15k put someone at the top of the 3ed quintile of income? This is how such Orwellian Math works. To convince people today that SS is a bad deal... the Right has to contrive a scenario that seems plausible so its premises won't be examined. It won't include how market investments depend on variables that probably won't be repeated... such as government law encouraging IRA, or Baby Boom demand… or that SS has a mission beyond just simple retirement. What people have grown up to expect is SS will be there… regardless of the market. And that's exactly the expectation the Right wants to destroy. Which raises the obvious question... why doesn't the Right go after ALL insurance? Surely it's unfair to some. Oh... because the private sector is already cashing in on private insurance.

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Quote Pierpont:

I know you didn't ask me... and it would have been nice if Maui actually cited a calculator we could use to verify his claims, but even if the average TBill yield averaged 7% for the past 40-45 years... who the hell had $8-9000 to sock away back in 1970 when making a mere $15k put someone at the top of the 3ed quintile of income? This is how such Orwellian Math works. To convince people today that SS is a bad deal... the Right has to contrive a scenario that seems plausible so its premises won't be examined. It won't include how market investments depend on variables that probably won't be repeated... such as government law encouraging IRA, or Baby Boom demand… or that SS has a mission beyond just simple retirement. What people have grown up to expect is SS will be there… regardless of the market. And that's exactly the expectation the Right wants to destroy. Which raises the obvious question... why doesn't the Right go after ALL insurance? Surely it's unfair to some. Oh... because the private sector is already cashing in on private insurance.

You are absolutely correct.... I didn't ask you.

If you don't like his "Orwellian Math" I suggest you find something that refutes his main point that Social security Historically pays out better than Private retirement. Which you will not find. Or even address my compliant that SS was never meant to be an entitlement..

or just argue anything old thing you like all alone.

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Quote Capital:
Quote Pierpont:I know you didn't ask me... and it would have been nice if Maui actually cited a calculator we could use to verify his claims, but even if the average TBill yield averaged 7% for the past 40-45 years... who the hell had $8-9000 to sock away back in 1970 when making a mere $15k put someone at the top of the 3ed quintile of income? This is how such Orwellian Math works. To convince people today that SS is a bad deal... the Right has to contrive a scenario that seems plausible so its premises won't be examined. It won't include how market investments depend on variables that probably won't be repeated... such as government law encouraging IRA, or Baby Boom demand… or that SS has a mission beyond just simple retirement. What people have grown up to expect is SS will be there… regardless of the market. And that's exactly the expectation the Right wants to destroy. Which raises the obvious question... why doesn't the Right go after ALL insurance? Surely it's unfair to some. Oh... because the private sector is already cashing in on private insurance.

You are absolutely correct.... I didn't ask you.

If you don't like his "Orwellian Math" I suggest you find something that refutes his main point that Social security Historically pays out better than Private retirement. Which you will not find. Or even address my compliant that SS was never meant to be an entitlement.. or just argue anything old thing you like all alone.

Gee Cap, I wasn't responding to you, was I? Or have you just admitted that you're here using Chili as another user name? And I the burden's not on me to disprove Maui's claims since they are bogus on the face of it. SS may or may not be a "good deal" for all the social benefits it does, if so it should not take Orwellian Math to demonstrate it.

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Feb. 29, 2012 2:19 pm

Wow, I really started a firestorm here. Please let me explain my assumptions. obviously I did a very poor job of that based on some of the comments above.

I was very interested in my case, what if I had been allowed to opt out of Social Security when I started working and buy 30 year t bills with the money that I have been forced to donate to Social Security. The real way to do that is look at my contribution history, subtract out a reasonable amount to cover for the disability insurance Social Security gives me (say $1,000-$1,500 a year), then take what's left and buy 30 year t bills at their rate in the year I put the money into the system. Sorry I am not going to do that, so we have to use average contributions and average rates of return for the 30 year t bills.

I'm not going to tell you exactly what I made, so let's make some assumptions here. Say I started working in 1982 at $30,000 a year. (yes even a idiot right winger like me can see that 12.4 percent of $30,000 is well short of $8,000, remember we are looking for an average over 45 years here). By the late 1990's let say i got up to the low $80,000 range, which means at that point I am contributing $10,000 a year or more with the employer match. And from around 2005 on, I will contribute the max, which is around $12,000 a year right now I think. And I will contribute the max for another 15 years, becasue I do not plan on retireing anytime soon. So in a 45 year career, I will contribe the max to SS for about half of the years, and over $10,000 a year 30 years. So my $8,000 a year average does not look to be that bad to me, but I will discount that to $6,500 a year just to try and reduce a little of the firestorm I have caused and to note that Social Security does have a disability provision that I would have to pay for insurance wise in the private sector. I will actually argue that my $6,500 a year number is actually low, considering that the max contribution to SS almost certainly go up in the future, but we will leave it there for now.

So what rate of return should I use for the 30 year T bil for this time period? Look at this link:

http://www.federalreserve.gov/releases/h15/data.htm

Go to the tab that shows historical data for the 30 year t bill rates from 1982 to 2011. Use the annual data. You will see that there are years that are not listed, so I just put in numbers that were similair to the years around it (about 5%). Guess what the average rate was for those 30 years.......

8.66%

So yes I am a lying right wing idiot (like all right wingers are in the opinion of most of the people posting here), I UNDERSTATED the return by 1.6%. And in my original statement I only figured 40 years, not 45. So I am going to stick with my 7% figuring that this rate may drop over time. And I'll use $6,500 a year to reduce the firestorm of protest this calculation will cause to show what a complete and total rip off Social Security is (and yes it is the largest Ponzi scheme in history)

A person putting up $6,500 a year into an account for 45 years and getting a 7% return on their money would have an account worth almost 2 million dollars at the end. That's what I should have in 15 years, instead I'll be stuck with whatever Social Security is willing to give me, I figure around $40,000 a year by then. Which would you rather have, $40,000 a year or 2 million dollars? That's a no brainer.

Anyone still willing to defend Social Security after seeing numbers like this? Like I said, just another example of the governemt sticking its nose into something it should have stayed out of (retirement accounts). A beautiful example of why us right wing idiots don't want the government to do anything that the private sector can handle on its own.

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There isn't something by Cato or Heritage that looks at SS paid on median wages over 30-year periods invested in T-bills? It shouldn't be hard to do if someone has a couple of hours.

And is there anything wrong with my hypothetical of zero inflation leaving you with 558% of your annual earnings after 45 years? I leave out investment returns over the rate of inflation, which is probably de minimus over 45 years.

chilidog
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Jul. 31, 2007 4:01 pm

Yes Chilidog there is a whole lot wrong with your assumption of zero rate of return. You do not understand the effect of inflation, which in the calcultion is irrelavent except for my guess as to how much Social Security I will get in 15 years. I did inflate that from the current number, which is $25-28,000 a year (correct me if I am wrong). Social Security does get indexed to inflation, so it will move up 2-3% a year.

The analysis you give is a "take the money and bury it in your backyard every year" analysis. Sure compared to that Social Security is a great deal. Even us idiot right wingers aren't stupid enough to do that.

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Quote mauiman58:.... but I will discount that to $6,500 a year just to try and reduce a little of the firestorm I have caused

Your whole case depends on garbage in, garbage out. Leaving aside the matter of average yield pumped up by the high inflation of 30 years ago, or atrifical growth in the S&P created by government policies promoting tax free IRAs to a Baby Boom demographic... and whether those policies created their own Ponzi Scheme, you're determined to use unrealistic numbers to suit your contention. As I said... in the REAL world of the past 40 years... to put in $800 a year... both employee and employer contribution, back in 1971 was something done only by persons at the top of the 3ed quintile of income let alone $8000 or $6500.

So just when would the average person be putting in $6500 a year into SS? Even today a person, if my quick math is correct, might have to make around $45k. Using averages often conceals more than it reveals... just like we know we all don't have 2.5 kids, or we don't all pay some average tax used as the basis of some mythical Tax Freedom Day.

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Quote Capital:
Quote chilidog:

Capital, do you have an opinion on mauiman's assertion? Do you think if put his social security taxes (employee and employer) starting in 1967 into T-bills he would have $1.5 million today?

Why thank you for asking.

Any compound interest calculator online will tell you his numbers under the terms he used are basically correct. It is actually 1.7M, not 1.5.. but who is Quibbling.

Here is my problem with SS. It was NEVER meant to be a retirement program, in fact at the beginning it was pegged to life expectancy.. but now it's an entitlement. It pays out on average far more that you pay into the system

Maui's premise that you would make more money in the private market is correct, However, SS wasn't meant as a retirement nest egg.

You want to fix it, Peg it back to life expectancy. If not, like all entitlements, It will fail under its own monumental weight. When governemnt finally realizes that it can't pay back the $4T it owes SS and wants to raise Taxes on the remaining workers to offset the eventual deficits. well....... People will be angry.

How is Social Security an entitlement? When you pay into SS you are in fact paying into a system that is paying out to millions of retirees at the same time you are paying in. You are putting that money to work for the better of your fellow Americans. If after 40 years of doing so and it becomes your turn to withdraw from the system and you live long enough to extract more than you put in then good for you. If that is an entitlement then so is the money you made on your IRA over the years. Why should you be entitled to interest on money that's been sitting in an account for years but not be entitled to interest on money that's been taking care of retirees for years? Entitlement my ass.

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Bush_Wacker
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Quote Bush_Wacker:

How is Social Security an entitlement? When you pay into SS you are in fact paying into a system that is paying out to millions of retirees at the same time you are paying in. You are putting that money to work for the better of your fellow Americans. If after 40 years of doing so and it becomes your turn to withdraw from the system and you live long enough to extract more than you put in then good for you. If that is an entitlement then so is the money you made on your IRA over the years. Why should you be entitled to interest on money that's been sitting in an account for years but not be entitled to interest on money that's been taking care of retirees for years? Entitlement my ass.

What is the offical title of Social Security?

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Quote mauiman58:

Yes Chilidog there is a whole lot wrong with your assumption of zero rate of return. You do not understand the effect of inflation, which in the calcultion is irrelavent except for my guess as to how much Social Security I will get in 15 years. I did inflate that from the current number, which is $25-28,000 a year (correct me if I am wrong). Social Security does get indexed to inflation, so it will move up 2-3% a year.

The analysis you give is a "take the money and bury it in your backyard every year" analysis. Sure compared to that Social Security is a great deal. Even us idiot right wingers aren't stupid enough to do that.

It is not my assumption, not my prediction, it is an assumption for a hypothetical.

Most people do not save anything. So yes, burying money in the backyard beats having nothing, even with inflation.

chilidog
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Quote Bush_Wacker:How is Social Security an entitlement? When you pay into SS you are in fact paying into a system that is paying out to millions of retirees at the same time you are paying in. You are putting that money to work for the better of your fellow Americans. If after 40 years of doing so and it becomes your turn to withdraw from the system and you live long enough to extract more than you put in then good for you. If that is an entitlement then so is the money you made on your IRA over the years. Why should you be entitled to interest on money that's been sitting in an account for years but not be entitled to interest on money that's been taking care of retirees for years? Entitlement my ass.

Entitlement refers to something that there is a legal obligation to pay, unlike food stamps or such where there is no legal obligation for the government to fund at all.

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WorkerBee
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Quote WorkerBee:
Quote Bush_Wacker:How is Social Security an entitlement? When you pay into SS you are in fact paying into a system that is paying out to millions of retirees at the same time you are paying in. You are putting that money to work for the better of your fellow Americans. If after 40 years of doing so and it becomes your turn to withdraw from the system and you live long enough to extract more than you put in then good for you. If that is an entitlement then so is the money you made on your IRA over the years. Why should you be entitled to interest on money that's been sitting in an account for years but not be entitled to interest on money that's been taking care of retirees for years? Entitlement my ass.

Entitlement refers to something that there is a legal obligation to pay, unlike food stamps or such where there is no legal obligation for the government to fund at all.

I am using the conservative version of entitlement. You know the one's that get thrown out with welfare, food stamps, healthcare, social security, etc. They call everything an entitlement like it's some kind of a freebie given by the taxpayers. Entitlements are hand in hand with communism according to the right wing. Now all of a sudden the conservatives are going to claim that entitlements are what is legally due? Make up your minds. Are entitlements good or bad? I guess it depends on which day you are watching O'reilly.

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Bush_Wacker
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Jun. 25, 2011 7:53 am

Pierpoint, if you going to comment on one of my posts, at least give me the courtesy of reading it first. If you would have taken even 5 minutes to read it, you would have seen that I started the case in 1982, not in the 1970's.

The only logical conclusion that one can come to about you is that you have your mind made up about the situation and refuse to be confused by the facts.

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mauiman58
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Jan. 6, 2012 6:45 pm
Quote Bush_Wacker:

I am using the conservative version of entitlement. You know the one's that get thrown out with welfare, food stamps, healthcare, social security, etc. They call everything an entitlement like it's some kind of a freebie given by the taxpayers. Entitlements are hand in hand with communism according to the right wing. Now all of a sudden the conservatives are going to claim that entitlements are what is legally due? Make up your minds. Are entitlements good or bad? I guess it depends on which day you are watching O'reilly.

Let me guess you don't find it disturbing that a program created that was pegged to life expectancy that serves as an "insurance" (yes it is actually in the Title) against poverty in your old age. Has over the Years been changed to an Entitlement (NOT in the Title) where it covers 12 years of retirement (regardless of Actual Need) before reaching life expectancy and beyond. Do you know of any insurance product where you get all you money back plus money from other people? Home, Car , Health, Flood, Renters. No.

Since you bring up O'rielly. He is entitled to receive his old age insurance regardless of his financial Need and collect to for as long as he lives. That is the difference between Entitlement and insurance. Under insurance O’Rielly doesn’t receive Social security

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An Alternative to Capitalism (if the people knew about it, they would demand it)

Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:

http://evans-experientialism.freewebspace.com/steinsvold.htm

John Steinsvold
“Insanity is doing the same thing over and over and expecting a different result."~ Albert Einstein

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John Steinsvold
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Quote Capital:

Do you know of any insurance product where you get all you money back plus money from other people? Home, Car , Health, Flood, Renters. No.

Actually yes. When your house burns down you're going to receive more money than you ever put in. The rest of the premium payers pick up the tab. A friend of mine only had insurance for 6 months when he fell off a roof and his insurance paid over 20 grand for a broken ankle. He immediately lost his job and had to drop his insurance. Millions of people get more money back from their insurance company than they put in. Because insurance companies are in the business of risk, people are ENTITLED to it. I guess insurance and entitlements go hand in hand don't they.

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Bush_Wacker
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Quote mauiman58:

The only logical conclusion that one can come to about you is that you have your mind made up about the situation and refuse to be confused by the facts.

YOU HAVE NOT PRESENTED FACTS.

I HAVE NOT PRESENTED FACTS.

NO ONE HAS PRESENTED FACTS.

This is all just nonsensical blathering. I think your claim is b.s. unless you can at least show me some think tank's paper supporting it.

chilidog
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Jul. 31, 2007 4:01 pm

So unless it comes from a think tank it is not valid?? You have got to be kidding!!

The only reason you had to make the last post is because even you know that you cannot poke holes in the arguement I made. The math is all there, and neither you nor anyone else here has been able to dispute it.

And I have some very bad news for you, your favorite think tank could not dispute my conclusions either.

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mauiman58
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Jan. 6, 2012 6:45 pm
Quote Bush_Wacker:

Actually yes. When your house burns down you're going to receive more money than you ever put in. The rest of the premium payers pick up the tab. A friend of mine only had insurance for 6 months when he fell off a roof and his insurance paid over 20 grand for a broken ankle. He immediately lost his job and had to drop his insurance. Millions of people get more money back from their insurance company than they put in. Because insurance companies are in the business of risk, people are ENTITLED to it. I guess insurance and entitlements go hand in hand don't they.

Do they pay you if your house DOESN'T burn down? By virtue that you paid into the policy.

Capital's picture
Capital
Joined:
Sep. 30, 2011 3:51 pm
Quote mauiman58:

Say I started working in 1982 at $30,000 a year.

If we're going to "say" that then I suppose we'll get nowhere.

Federal minimum wage was $3.35 an hour in 1982. There was a recession that year. It's not impossible to earn 500% of the minimum wage when you're 18 years old with just a high school diploma. You could have been a child actor or a natural salesman.

No one is arguing with your "math." We are disputing your data, aka "facts."

chilidog
Joined:
Jul. 31, 2007 4:01 pm

You're right, you could not earn $30,000 a year with a high school diploma in 1982, I just got a BS in Chemical Engineering in 1981. That was the going rate for a starting engineer that year. And anyone over 50 who has that degree now will be maxed out on Social Security, or they need to find a new employer. And the demand is higher than the supply, so no trouble finding a job now.

So the case presented is real. Understand that our group has had some tough times (the mid 80's) just like every other profession, but fortunately for us that is not the case now. And I do realize that if you run the numbers for someone my age who did not get a college degree it will look much different. But I'll bet "forget about Social Security and invest that money in 30 year T Bills" solution will still be better for anyone around 55 years old right now. And that trend will only get stronger as you look at cases for people who are younger.

For other cases, I will yield to others who can look at other situations. But you will have to forgive me, but Social Security completely screwed me and a whole bunch of others So when someone tells me "I am from the government and we have a new program to help you", I run for hills every time.

mauiman58's picture
mauiman58
Joined:
Jan. 6, 2012 6:45 pm
Quote WorkerBee:

Straw man arguments aside, the demographics are what they are and we will be down to a ratio of 2.1 workers supporting each retiree. Is raising the retirement age to 68 or so really that terrible?

When you're approaching 65, yes!

Is it that terrible to remove the cap on SS taxes? Why is there a cap anyway? The rich can certainly afford to pay a little more to help their fellow citizens.

Oh, that's right, the wealthy Americans are renouncing their citizenship to avoid taxes. Darn.

DonaldFG
Joined:
Jul. 31, 2007 4:01 pm
Quote Capital:
Quote Bush_Wacker:

Actually yes. When your house burns down you're going to receive more money than you ever put in. The rest of the premium payers pick up the tab. A friend of mine only had insurance for 6 months when he fell off a roof and his insurance paid over 20 grand for a broken ankle. He immediately lost his job and had to drop his insurance. Millions of people get more money back from their insurance company than they put in. Because insurance companies are in the business of risk, people are ENTITLED to it. I guess insurance and entitlements go hand in hand don't they.

Do they pay you if your house DOESN'T burn down? By virtue that you paid into the policy.

No. Do they have to pay you your SS if you die at age 66? By virtue that you paid into the policy.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am
Quote Bush_Wacker:

No. Do they have to pay you your SS if you die at age 66? By virtue that you paid into the policy.

Actually they Do as a part of the "survivors" portion of the "Insurance". But the act was orginally created to insure against poverty, not as a 401K

Capital's picture
Capital
Joined:
Sep. 30, 2011 3:51 pm
Quote Capital:
Quote Bush_Wacker:

No. Do they have to pay you your SS if you die at age 66? By virtue that you paid into the policy.

Actually they Do as a part of the "survivors" portion of the "Insurance". But the act was orginally created to insure against poverty, not as a 401K

Only if you have a spouse or if you're a real horn dog and you have kids under 18 when you die at that age. The reality is that millions of people never get back out what they paid in due to premature death.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am
Quote Bush_Wacker:

Only if you have a spouse or if you're a real horn dog and you have kids under 18 when you die at that age. The reality is that millions of people never get back out what they paid in due to premature death.

Nor should they, I don't get back anything I paid on my home insurance if my house is never damaged. Nor my car, Nor my health.

Do you beleive SS is just a blanket payment entitled to you by virtue of reaching a specfic age? Or like all other insurances, only gets activated when needed. In this case, poverty

Capital's picture
Capital
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Sep. 30, 2011 3:51 pm

Donald:

Yes I object to raising the cap because I have already been screwed bad enough. I should get a one time payment of 2 million from Social Security when I retire, instead I will get about $40,000 a year. And if the cap is raised and benefits are not, then the amount of money I should get as a lump sum will go up $200,000 or so.

The reason there is a cap on the earnings taxed is because there is a cap on what is paid out. If you raise the earnings cap, you also have to raise the max payout. This is supposed to be a government run pension plan. When a person puts more in, he should get more out. That's how it works in the private sector, and that's the way it should be here.

If Social Security wasn't the largest Ponzi scheme in history we would not be having this discussion.

mauiman58's picture
mauiman58
Joined:
Jan. 6, 2012 6:45 pm

So, a chemical engineer who either works for an oil company or Dow, who is complaining about how much the government takes from him. I bet you don't kvetch too much when it is time for your company to suck on the gubmint teat, you don't cry real hard over the massive tax giveaways or subsidies, or government cost plus contracts.

Oh, but tax you 6% on the first 100,000 and that is horrible...

Phaedrus76's picture
Phaedrus76
Joined:
Sep. 14, 2010 8:21 pm
Quote Capital:
Quote Bush_Wacker:

Only if you have a spouse or if you're a real horn dog and you have kids under 18 when you die at that age. The reality is that millions of people never get back out what they paid in due to premature death.

Nor should they, I don't get back anything I paid on my home insurance if my house is never damaged. Nor my car, Nor my health.

Do you beleive SS is just a blanket payment entitled to you by virtue of reaching a specfic age? Or like all other insurances, only gets activated when needed. In this case, poverty

The whole idea of SS was to take care of those close to poverty when they retired. Why would they make a program like that? If they didn't then you would have a huge mass of senior citizens in need of government help. With the SS program each of those citizens actually pays a much larger portion of that cost as opposed to a regular welfare program where many benefit even though they may have not contributed much at all. I don't think anyone who doesn't need SS benefits should receive it. "Poverty" is subjective so I wouldn't go there even though you want me to. Need isn't directly connected to "Poverty".

The Obamas' and the Bushs' of the world should never receive a penny of SS benefits. But they should pay into the system as support for their fellow citizens.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am
Quote mauiman58:

Donald:

Yes I object to raising the cap because I have already been screwed bad enough. I should get a one time payment of 2 million from Social Security when I retire, instead I will get about $40,000 a year. And if the cap is raised and benefits are not, then the amount of money I should get as a lump sum will go up $200,000 or so.

The reason there is a cap on the earnings taxed is because there is a cap on what is paid out. If you raise the earnings cap, you also have to raise the max payout. This is supposed to be a government run pension plan. When a person puts more in, he should get more out. That's how it works in the private sector, and that's the way it should be here.

If Social Security wasn't the largest Ponzi scheme in history we would not be having this discussion.

The reason there is a cap on earnings taxed is because rich people wanted it that way. Rich people know that they will never need a penny of Social Security benefits and therefore want to contribute as little as possible. You are not entitled to jack if you don't have a need. SS is a safety net for people in need at the retirement age. SS is not an investment for rich folk. It's no different than income taxes in that everyone should contribute for the betterment of our nation's senior citizens. I know that you don't give a rat's ass about your fellow citizens when it comes to your lord and savior, the almighty dollar, but that's just too bad. You wouldn't know a ponzi scheme if it bit you on the hind end.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 7:53 am

Donald:

There is a huge difference between giving money to the church for God's work and the government. The church actually cares about the people they are trying to help. Politicians don't give a rat's ass about the people they give tax dollars to, they are just buying their vote, and doing everything in their power to keep those people dependant on the government. That way they will keep their vote.

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mauiman58
Joined:
Jan. 6, 2012 6:45 pm

I can guarantee you the company I work for gets no tax bailouts or company handouts, there are only about 15 of us who work for this company. And yes, that's the way it should be.

I wouldn't mind putting up 10-12% of my yearly salary for SS if the program at least came close to what I could get in the private sector. But as with all government programs outside of their range of expertise, it is a total finacial disaster.

mauiman58's picture
mauiman58
Joined:
Jan. 6, 2012 6:45 pm
Quote mauiman58:

Say I started working in 1982 at $30,000 a year.

I still say B.S. on your "lowball" estimate of $1.5 million.

Now I'm assuming that that $1.5M includes everything you think you've accumulated as of today, from 1982 to 2012, plus everything you're going to pay for the next 15 years (you said 40-45 years) and everything's going to earn 7%.

So I don't know what your calculations say your value is today.

If you made $30k in 1982 you paid $2,415 in Social Security taxes, employee plus employer.

http://allamericaninvestor.blogspot.com/2009/04/30-year-treasury-in-pers...

That guy says you could buy $1 million in 2012 for $15k in 1982. $2,415 is 16.1% of $15k, so your SS for 1982 is today worth $161,000.

http://www.withdrawtaxfree.com/newsletter-sample.htm

"Based on the maximum payment by a worker retiring at the end of 2010 at the “normal” retirement age of 67 after working since age 21 the total Social Security taxes paid by the worker would total $113,173 and the same amount for the employer for a total of $222,346. Had the money been invested, like millions of other investors have, in U. S Treasures at 5 percent, the tax payments over the entire time should have grown to $497,270."

chilidog
Joined:
Jul. 31, 2007 4:01 pm

Chilidog, his rate of return is too low! He states that the 10 year t bill rate should be 5% over time, yet the average rate over the last 45 years for this t bill is actually 7%

Check out this website again:

http://www.federalreserve.gov/releases/h15/data.htm

This makes a huge difference.

Consider that $6,500 inversted every year for 45 years at 7% return will grow to just under 2 million dollars.

The same investment at 5% for 45 years is only just under 1.1 million.

So rate of return is everything, and he understateds that. Garbage in, garbage out, and this is a classic case.

So if you do these kinds of analysis, what you set as the assumed rate of return is EVERYTHING. And when you set that rate, you have to kep in mind the folowing facts:

The 30 year T Bills have averaged 8.7% for the last 30 years

The 10 year T Bills have averaged 7% for the last 45 years.

So my conclusion that Social Security is the largest Ponzi scheme in history still stands. Anyone who wants to dispute that, show me your numbers. But remember, MONEY INVESTED OUTSIDE OF SOCIAL SECURITY GETS A 7% RETURN. No less.

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mauiman58
Joined:
Jan. 6, 2012 6:45 pm

Our privateer sector fans contend that government programs are run by people operating out of their areas of competence; and/or that Congress institutionalizes bad financial social programs that we could do cheaper and better with more free market people running them.

The performance of the Privateer Sector has not backed their case as it has given us less for more with greater corruption than ever. After all the privateers are all about fiduciary responsibilities, so they take all the money they can find from the citizens/consumers and the government they bribe freely. We get wonders like Medicare "Advantage" where taxpayer money goes straight to the corporate coffers for stuff we could get from our own Medicare public program without paying these highly competent profiteers.

We can make other privateer cases against the for profit education and test material industries where public money goes to student loans with banksters pocketing the profits for loaning our money to our kids. We haven't even gotten to war and crime where there is lots of money to be made from having more people to put in prison than any real democracy would provide.

If the question were what a Social Security or Medicare taxpayer owned system could do against privately owned competition, there would have to be some real incentive for the latter to do the best job for society and not just make the most money they can. There are plenty of talented and dedicated people who would bring great expertise to the task of doing the best we can for our people and we really don't need those who are really good at getting all the profits they can at the expense of that mission.

The problem of fiduciary responsibility is that it does not factor out in great quality and efficiency for customers and society. The incentives are all for doing the least for the most, and even were funds invested in their profit systems to pay off at a decent rate, they would come at the cost of a truly functional medicare or social security or they would really have to compete with the world of tbills and social infrastructure. And, they would have to be trustworthy, not bubble-inflating financialist scam artists. Which they are not and have not seemed to learn from their recent disasters.

That we have to package our basic social obligations in "insurance" instead of birthright entitlements is a sad commentary on how dishonest we are with ourselves about what we are doing. There ought to be no question that neglect and poverty is something we cannot afford, meaning that these investments pay off and even save money. Paying for healthy, educated children and for comfortable and healthy retired elders gets us a good society as well as better workers and taxpayers to share the work and costs of society. It is such a good deal that successful countries do it "for free" instead of charging users much, if anything.

It also makes sense to shorten the required period of work before retirement given the nature of a lot of work and the issues of unemployment. Raising the age of retirement is a lousy way to save a buck, another false economy where 'austerity' causes more problems than it solves.

Finally, with due respect to an authenitc swindler, I find the need to call SS a Ponzi Scheme part of the impossible defense of the privateers where deflection and hyperbole must replace any honest comparison of these social programs. Had the Robber Barons wanted to prove how well they could run a democratic society, they could have met these needs like conservatives promise they can. Had the Banksters wanted to take the Reagan Revolution as a chance to prove how the New Deal had failed to compete with their better way, they could have. What we have seen instead are the kinds of scams that are truly in Ponzi's league as government has been looted by Corporate.

drc2
Joined:
Apr. 26, 2012 12:15 pm

Problem with your log on DRC?

Capital's picture
Capital
Joined:
Sep. 30, 2011 3:51 pm

change of email made it easier to re-register.

drc2
Joined:
Apr. 26, 2012 12:15 pm

FIrst of all DRC, I think you misunderstand the fiduciary responsibility of a business, it is to make money for the owners, nothing more, nothing less. It does not exist to provide jobs and/or pay taxes. You can't expect businesses act any other way.

The saying that is true in business is that everybody listens to the same radio station, WIIFM. What's in it for me. Nothing wrong with that. As long as businesses obey the law, you can't criticize the moves they make. And those who are successful in business in the long run tell the truth, obey the law, and deliver what they promise.

As fas as Social Security goes, I have shown that I should have an account worth 2 million dollars when I retire. I won't get anything close to that out of Social Security. Kudos to Chilidog, when he last challenged me, he threw numbers at me in an attempt to show me what an idiot I was. Unfortunately his basis was incorrect, but I give him points for trying. You on the other hand just brush me off as another right wing idiot, but cannot even throw any numbers at me to prove your point. THAT'S BECAUSE YOU HAVE NO POINT!

Social Security is the largest Ponzi scheme in history. I am still waiting for soemone to throw some numbers at me to prove that statement wrong. You didn't even bother to try.

mauiman58's picture
mauiman58
Joined:
Jan. 6, 2012 6:45 pm
Quote drc2:

change of email made it easier to re-register.

Good news for the Righties ..... I thought Thom might have cloned "DRC".

You know Thom's a science geek.

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Laborisgood
Joined:
Jul. 31, 2007 4:01 pm
Quote Laborisgood:
Quote drc2:

change of email made it easier to re-register.

Good news for the Righties ..... I thought Thom might have cloned "DRC".

You know Thom's a science geek.

I thought they banned him and now he's trolling the board. ;-P

Capital's picture
Capital
Joined:
Sep. 30, 2011 3:51 pm

Currently Chatting

Should public radio program in the public interest?

NPR is supposed to be our national public radio, but they're barely covering climate issues that are in the public's interest.

Only one month ago, a national New York Times/CBS News poll found that half of all Americans think that global warming is already having a serious impact. Sixty percent of those surveyed even said that protecting our environment should be a priority “even at the risk of curbing economic growth.”

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