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Scrap a government program and start over: Social Security

TownieDeac

TownieDeac

words are futile devices
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Social Security is about to turn 80.

Let's say it went bankrupt tomorrow.

Would you restart it? What would you do differently?

I think it could be interesting to see this board's opinions of government programs in a vacuum, or with a fresh start rather than the way they currently are.
 
Scrap it. Increase funding for welfare and let seniors apply for that if they can't support themselves. I don't see why a poor 75 year old should be on a different program than a poor 22 year old, just for the 75 year old to avoid a stigma in his own mind. Either way, other people are working to carry your ass, so just accept it for what it is. Part of our problem is that we have too many programs trying to do the same things. Simplify it all into as few programs as possible.
 
There may in fact be too many government programs but Social Security is not part of the excess. Indeed, it is essential. There is simply no viable alternative to it.
 
How is it any different than welfare with a different name and a multi-decade advertising fraud that people have "paid into" it so are somehow getting something back? It is a tax-to-redistribution just like welfare or any other safety net program.
 
The federal government should require everyone to create an investment account and hold the money in stocks or an interest-bearing account for ~40 years. I don't think the stock market has ever lost value over a 40 year period, so even in the event of a catastrophic crash account holders would get their initial investment back. The government would need to impose a small tax to support SS recipients such as the disabled. It would be a huge jump start for the economy as long as politicians were not able to raid the accounts.
 
UNCG Deac said:
The federal government should require everyone to create an investment account and hold the money in stocks or an interest-bearing account for ~40 years. I don't think the stock market has ever lost value over a 40 year period, so even in the event of a catastrophic crash account holders would get their initial investment back. The government would need to impose a small tax to support SS recipients such as the disabled. It would be a huge jump start for the economy as long as politicians were not able to raid the accounts.
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Theoretically, I would rather have none, but in practice we probably are best off with what UNCG has proposed. The stock market has never lost money over a 15 year period and it certainly would never lose money with this mandatory influx of money. I would want to give the payee a pretty reasonable amount of flexibility as to how they invest it. I am not sure that we could ever keep politicians from raiding it or somehow borrowing against it even though they do not own the money.
 
LOL. If you think the financial industry has too much power over our economy and politics now, go ahead and give them eleventy billion US taxpayer dollars to gamble with. Or are you going to have bureaucrats be the investment managers for this enterprise? We're going to have corporate America give earnings reports to underpaid bureaucrats who have the power to move their stock prices on a massive scale? No potential for corruption there at all. What happens when there is a recession and millions of old voters are screaming at their congressmen to fix the stock market so they can afford their metamucil? How long do you think the bureaucrats and money managers will stay independent of political meddling to steer investments to preferred sectors and individual firms? Check out the history of the various state public employee pension funds that are invested in the private market. They're all broke as a joke due to decades of unrealistic projections, underfunding and overpromising.

Nobody who cares about small government, clean government, or basic common sense should support the idea to replace Social Security with the stock market.
 
So what difference would it make that the stock market always preformed well over 15 and 40-year timelines if the next Black Tuesday occurs right when I'm hitting retirement age and I haven't properly allocated into bonds of companies that aren't also going to be taken down by the crash?
 
Capitalize the profits, socialize the losses?
 
TownieDeac said:
Capitalize the profits, socialize the losses?
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Exactly. Corporate America (and multinationals) get a massive infusion of US taxpayer dollars to drive up their share prices, but when the stock market craters the politicians will scramble to either borrow money or tax the rest of us to make sure the olds don't see even a moment of decline in their monthly dividend check. And all those CEOs who got sweet compensation deals tied to the stock price will laugh at us while smoking rolled up $100 bills on their yachts.
 
Deacon923 said:
LOL. If you think the financial industry has too much power over our economy and politics now, go ahead and give them eleventy billion US taxpayer dollars to gamble with. Or are you going to have bureaucrats be the investment managers for this enterprise? We're going to have corporate America give earnings reports to underpaid bureaucrats who have the power to move their stock prices on a massive scale? No potential for corruption there at all. What happens when there is a recession and millions of old voters are screaming at their congressmen to fix the stock market so they can afford their metamucil? How long do you think the bureaucrats and money managers will stay independent of political meddling to steer investments to preferred sectors and individual firms? Check out the history of the various state public employee pension funds that are invested in the private market. They're all broke as a joke due to decades of unrealistic projections, underfunding and overpromising.

Nobody who cares about small government, clean government, or basic common sense should support the idea to replace Social Security with the stock market.
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Pretty much right on target. A government run social security system, or pension system, is essential in a modern economy. Chile tried privatizing retirements and abandoned it. Several Eastern European countries tried it after the collapse of communism and abandoned it. Any mass privatization of retirement pensions at the expense of government run retirement systems will not last beyond the next recession.
 
I'd like to see the system scrapped and replaced. Too many of my clients are collecting social security with 6 figure incomes. Roll the whole system into a welfare system that includes Medicare/Medicaid/disability.
 
DeaconCav06 said:
I'd like to see the system scrapped and replaced. Too many of my clients are collecting social security with 6 figure incomes. Roll the whole system into a welfare system that includes Medicare/Medicaid/disability.
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Well, they paid into the system under the promise that they would be able to draw out income in retirement age.
 
Right. And this exercise presumes that system is bankrupt and we are starting over.
 
I think the system works. Just means test it. If you are worth x dollars you don't get to collect.
 
Keep Social Security. Uncap the earnings tax limit, but keep the limit for benefit calculations. Social Security will be solvent and the additional means testing will only hurt those who can afford it. I'd also increase the earnings penalty modestly for early retirees, but make 100% of SS benefits subject to FIT for higher income retirees.
 
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