Smoke and Mirrors
I've been reading a bunch of things on Social Security and have come to a few conclusions. Granted they may be based on bad info but from what I've been able to tell this is reasonably accurate.
The main problem is two-fold. First, there are more retired people (those getting benefits) than working people (those paying benefits). Unless either the workers get busy "making copies" to increase the workforce in the next generation or the retirees start dying off faster this isn't fixable (if nothing else changes). Certainly nothing a "politician" can do about it (why yes, that is sarcasm). Second, the government keeps borrowing from the trust fund holding all the money to pay it's bills. (Kind of like paying your rent from your savings but if you're spending more than your salary it's gonna happen. But eventually your savings is gonna be gone, which is what Bush said at the state of the union.)
So the government needs to pay back the trust fund. However as long as we keep up the deficit spending this isn't going to happen since there's no money to pay it back with.
But to fix the root problem (the first one) since increasing the workers paying is unlikely you really have to cut benefits or otherwise decrease the money going out to match the money coming in. It's basic math. Zero plus two minus three does NOT equal zero, no matter how hard you try to make it work.
And privitizing the accounts is only going to further reduce the amount of money that comes into the trust fund (zero plus one minus three) so that's not really an answer either. Unless your goal is to get friends who run investment firms nice big juicy government contracts.
So it's all smoke and mirrors. And not even particularily clever ones at that.
The main problem is two-fold. First, there are more retired people (those getting benefits) than working people (those paying benefits). Unless either the workers get busy "making copies" to increase the workforce in the next generation or the retirees start dying off faster this isn't fixable (if nothing else changes). Certainly nothing a "politician" can do about it (why yes, that is sarcasm). Second, the government keeps borrowing from the trust fund holding all the money to pay it's bills. (Kind of like paying your rent from your savings but if you're spending more than your salary it's gonna happen. But eventually your savings is gonna be gone, which is what Bush said at the state of the union.)
So the government needs to pay back the trust fund. However as long as we keep up the deficit spending this isn't going to happen since there's no money to pay it back with.
But to fix the root problem (the first one) since increasing the workers paying is unlikely you really have to cut benefits or otherwise decrease the money going out to match the money coming in. It's basic math. Zero plus two minus three does NOT equal zero, no matter how hard you try to make it work.
And privitizing the accounts is only going to further reduce the amount of money that comes into the trust fund (zero plus one minus three) so that's not really an answer either. Unless your goal is to get friends who run investment firms nice big juicy government contracts.
So it's all smoke and mirrors. And not even particularily clever ones at that.
posted by banzai at 09:13
2 Comments:
First, there are more retired people (those getting benefits) than working people (those paying benefits).Not completely true. Right now there are about 3 workers for every retiree. There were 16 workers per retiree when the program was started, and there soon will be just two workers per retiree.
So the government needs to pay back the trust fund. However as long as we keep up the deficit spending this isn't going to happen since there's no money to pay it back with.Not true. No money went into the trust fund when we were running a surplus. Some money (a very small amount) was used to pay off some of the debt, but since LBJ the government has stolen everything from the trust fund and replaced it with IOUs.
And privitizing the accounts is only going to further reduce the amount of money that comes into the trust fundTrue, but since the government spends all of the money that goes into the trust fund, this just means they have less to steal.
And the money that goes into the private accounts means there will be something for workers that are 20 to 30 years old today to have when they retire, and/or to pass on to their heirs if they should die before retirement.
First, there are more retired people (those getting benefits) than working people (those paying benefits). Not completely true. Right now there are about 3 workers for every retiree. There were 16 workers per retiree when the program was started, and there soon will be just two workers per retiree.Perhaps but the net effect, a reduction in the ratio, is the gist of the statement. Anything else is just pedantics and when politicians are involved it's mostly pedantics so we need to escape it.
So the government needs to pay back the trust fund. However as long as we keep up the deficit spending this isn't going to happen since there's no money to pay it back with. Not true. No money went into the trust fund when we were running a surplus. Some money (a very small amount) was used to pay off some of the debt, but since LBJ the government has stolen everything from the trust fund and replaced it with IOUs.Well the assumption in this statement is that the government intends to honor it's debts and pay them back. If you invalidate that assumption (a perfectly valid position given the behavior of our government) then the rest of the discussion falls apart. Perhaps I should have prefaced it with "I wish the government would pay back the trust fund."
And privitizing the accounts is only going to further reduce the amount of money that comes into the trust fund. True, but since the government spends all of the money that goes into the trust fund, this just means they have less to steal.
This is like saying "since it will only get dirty again, we shouldn't clean the bathroom". A logical argument and valid from that standpoint but I wouldn't want to use that bathroom!
And the money that goes into the private accounts means there will be something for workers that are 20 to 30 years old today to have when they retire, and/or to pass on to their heirs if they should die before retirement.However should the government be in the business of securing our retirement? Shouldn't that be an individual's responsibility? And if you're unable to take care of that then perhaps you need to learn the hard lesson the hard way. A particularily brutal way of thinking but if someone won't learn by "nice" methods how else can you teach them? You can't *push* a nail into a board, you have to use a hammer. Or a two by four.
I seriously think that one of the major problems in our society is the idea that the government should protect us from ourselves. I seem to be particularily Darwinian when I express the idea that if someone wants to do something that will (as opposed to might) kill them then they need to be allowed to do it so that those tendencies (if you subscribe to the "nature" viewpoint) are removed from the gene pool.
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