Think you are entitled to the amount of money you paid into Social Security? Think again. Think Democrats are protecting your benefits while Republicans want to cut them? Think again.
Category: Social Security
Why We’re In the Budget Mess
Watch John Stossel last night or read his latest column?
Since America is on the road to bankruptcy, we’ve got to make some changes. What would you do?
The Peter G. Peterson Foundation gave $200,000 to six think tanks to write budget proposals. The money went to the conservative American Enterprise Institute and Heritage Foundation; the “liberal” Center for American Progress, Economic Policy Institute and Roosevelt Institute Campus Network; and the Bipartisan Policy Center.
The liberal budgets raise spending and taxes, cut military spending, and keep entitlements. The conservative budgets keep military spending but just trim entitlements, and reform the tax code.
Medicare, Social Security Funds Expiring Sooner Than Projections
May 1 is the 30th Birthday of Chile’s Private Pension System
May 1 marks the 30 years since Chile became the first nation to privatize its social security system. By turning workers into investors, the move solved an entitlement crisis much like the one America faces today.
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Instead of paying a 12.4% Social Security tax as we do here, Chilean workers must pay in 10% of their wages (they can send up to 20%) to one of several conservatively managed and regulated pension funds. From the accumulated savings, they get a life annuity or make programmed withdrawals (inheriting any funds left over).
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In 2005, New York Times reporter John Tierney worked out his own Social Security contributions on the Chilean model and found that his privatized pension would have been $53,000 a year plus a one-time payout of $223,000. The same contributions paid into Social Security would have paid him $18,000.
Tierney’s example show how much we Americans are getting screwed by Social Security and the politicians who defend it.
Social Security to Run Permanent Deficits
WASHINGTON (AP) – Sick and getting sicker, Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037, congressional budget experts said Wednesday in bleaker-than-previous estimates.
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“Its’ an IOU that is backed by Treasury bonds and the faith and credit of the United States government,” said Sen. Bernie Sanders, I-Vt. “It is the same faith and credit that enables us to borrow from rich people and from China and from other countries. As you well know, in the history of this country, the United States has never defaulted on one penny owed to a creditor.”
Very reassuring words from a fiscal conservative!
Those Toxic Free Lunches
Economists are the real “Party of No.” They keep saying that there is no such thing as a free lunch — and politicians keep on getting elected by promising free lunches.
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We are currently seeing what happens, in fierce riots raging in various countries in Europe, when the money runs out and the brutal truth is finally revealed, that there is no free lunch.
Democratic Base Voters Getting Screwed by Democrats
Younger voters here by spending and entitlement programs.
Gays and aliens by Obamacare.
It goes without saying that the rest of us are also getting screwed.
Support for Social Security Privatization
From CFG via Pew Research Center:
…58% favor a proposal that would allow workers under age 55 to invest a portion of their Social Security taxes in personal retirement accounts that would rise and fall with the markets; 28% oppose this proposal. Majorities across all age groups – except for those 65 and older – favor this proposal.
Among senior citizens, as many favor (42%) as oppose (42%) allowing private investments in Social Security. By contrast, fully 70% of those younger than 30 favor this idea.
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The breakdown among the political parties is even more impressive. Republicans favor personal accounts 65-21, Democrats are 50-36, and Independents are 61-27.
Obama Questioned on Economy at Backyard Gathering
I want to respond to this paragraph:
He said Social Security is supposed to be a “rock solid” and secure floor for people to tap when they have retired. He dismissed the notion of privatizing Social Security, saying, “Imagine if Social Security, if a portion of that, had been in the stock market back in 2006 and 2007?”
Okay, let’s say it had. Let’s further stipulate it had been privatized in 1982, and an employee retired in 2007 at the age of 65, was 40 years of age in 1982. That employee made regular contributions to the program, reinvested the dividends, and invested in the “market”, as defined by the S&P 500.
In that 25 year period, the market returned 9.68% per year on average. Some years the market went up more, some years it went down more. This period includes the tech-bubble of 2000. A dollar invested in 1982 would be worth $11 now. That $11 is adjusted for inflation, meaning the value was not eaten up by inflation. See this calculator.
Social Security Card Maxed Out
On Saturday, President Obama railed against supposed Republican attempts at privatizing Social Security. He also warned against letting people on Wall Street manage it. I don’t know what Republicans want to do with the program.
I do know that if you controlled that portion of your taxes that are now taken for the program, politicians couldn’t get their hands on it. You would have the choice of what to do with your own money. We see what politicians do with money: they spend it on all sorts of boondoggles. Social Security taxes are no different. There is a trust fund, there IOUs in it, you do not own your portion of it. Its simply another program taxpayers finance and politicans manage.
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