How GOP Social Security Cuts Will Hurt You

You can see the increases here:

https://www.ssa.gov/oact/progdata/taxRates.html



Except the money for EITC comes from the General Fund, not the Social Security Trust Fund.



Well, if they're union pension plans, they're based on Ponzi Schemes.

Everyone needs a guaranteed source of retirement income, instead of some pie-in-the-sky hypotheticals.



[/QUOTE]The EITC is a Negative Income Tax first championed by Milton Friedman.[/QUOTE]

Sure, but not in the way it has be implemented. He proposed getting rid of the entire welfare bureaucracy and replacing it with a NIT. Of course he would have gotten rid of SS too.

 

If its that simple, then its an annuity. You make your contributions, you earn interest, when you retire you get defined payments. You put your money in, you get your money back plus whatever interest your money earned.

But that's not how social security works. Social security requires other people to pay into it in order for you to get your payments. That's why people claim the ss tax has to be increased in order to save the program. Its a Ponzi scheme. Its a scam.

The solution is simple - leave it in place for those already on it or are so close to retirement that they are dependent upon ss; greatly reduce benefits based on years until retirement with the aim that it will only be a subsistence for those who absolutely need it; means test benefits.

For me, let me out of it. The govt can keep half of what I paid in, give me the other half, and leave me alone. I will take care of myself.

 

I think you misunderstand what an annuity is. The way it works is that you give a certain amount of principal to the annuity, and in turn they promise to send you monthly checks for life. To quote:

"A 65-year-old woman investing $100,000 in an immediate annuity today would receive about $630 a month, according to ImmediateAnnuities.com; a 65-year-old man would get $684. (The guy gets more because of his shorter life expectancy.)"

Thus, there is no guarantee of return of principal. If you die the day after you signed the contract, you are out of luck and the company keeps the whole amount. On the other hand, if you live 10 years beyond your life expectancy, you are lucky and the company has to pay much more to you than you payed into as principal.

SS for retirement works somewhat the same way. If you live long, you get lucky and keep getting payments. If you die soon after or before reaching retirement age, your money is lost.

I am fine with that system, because I Iike some guaranteed monthly payments, which do not depend on the stock or bond market.

 

Privatization is the only way to save Social Security and would result in a system which would pay out at ~ 5% return instead of the ~ 1% return from the current system. Additionally money's accumulated and remaining in a person's account would transfer to their beneficiaries when they pass away.

The country of Chile has privatized its social security system and the public employees in three counties (Galveston, Brazoria, and Matagorda) in TX have done the same. This is a much superior system based on payouts, benefits, and transferability. Addionally it gets the socail security liability out of the government income statement and balance sheet.

http://www.nationalreview.com/agenda/278264/texas-model-social-security-reform-avik-roy


Paul Ryan's Roadmap also has a section on reforming Social Security by priviatizing it. I hope this is implemented for our kids and grand kids sake.

http://www.deseretnews.com/media/pdf/349985.pdf

 

There is no way Trump wants to cut Social Security benefits and no clear plan on how to fix Social Security. A lot of suggestions has been thrown out, but nothing is final. One thing is certain, something has to be done. We have millions of Baby Boomers retiring now. People are living much longer and families are much smaller. They all cause a problem with Social Security.

 

The strict definition of an annuity is irrelevant.

The point is that for social security to pay people, others must make payments. That's a ponzi scheme.

You have no guarantee that social security will be around when you are eligible to receive payments, and you have no guarantee that those payments will be what you expect. Social security is a government program - it can go bankrupt, it can be reformed, it can be means tested, it can even be abolished. You have no contract with the government.

If you want guaranteed monthly payments, then get a real annuity, or save your money and plan for your future. If you want safety, then invest in government bonds - that way you have your principle and the interest.

 

Annuities are inheritable. SS is not.

 

These are atypical annuities, since they would result in low monthly income. For typical annuities, like SPIAs, the payment ceases after one or both partners die, the heirs get nothing. That's why most people decide to only annuitize part of their portfolio for fixed income, while leaving the rest for other than every day expenses and to, hopefully, pass on to their heirs.

And that's how it works for SS as well: The risk is spread over many people. That means one won't get rich from social security, but also that some people get a lot more out than what hey paid in. I'm probably among the latter crowd. However, I don't mind because I don't like to see destitute seniors begging on the street. And I realize that my gravy train can be over any moment. All it takes is some unlucky accident and I'd be a receiver for the rest of my life.

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Do you think Trump will go against the GOP congress? And we all know that the GOP dream for decades has been to privatize SS.

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SS is not a Ponzi scheme.

And, so far, people have ALWAYS received their SS payments. The same can't be said for pensions from the private sector, insurance companies, or private retirement accounts.

 

Social security absolutely is a Ponzi scheme. People that paid in when they were working are now paid by people who are now working. And the system is going into the red because there are only ~ 3 people working for every person who receives benefits.

Why shouldn't people receive a reasonable payout from their contributions ??

What holders of private retirement accounts have not received their proceeds ??

My dream for my kids is to privatize SS. They will receive a much greater return, the national debt will not be a drag on the economy, and the balance of their accounts will transfer to their kids when they pass (some friends passed at 59 and 62 - their kids received nothing from their contributions which they never benefited from). It is tantamount to child abuse not to favor privatizing SS.

 

if SS is privatized then the too big to fail corporations cannot fail, since the stock market will be paying the returns for the accounts.

that will stop free market competition, since everyone will be dependent on the biggest companies for social security.

 

Why what is your reasoning behind that conclusion ??

 

Nobody is keeping one red cent of what I paid into it. If they privatize it, I want every penny back, and there will be a lot of Americans who line up to sue for the same. I don't trust wall street with any of my money if I can have any say in it, so if the government, republicans and Donald Dump want to privatize, then have at it. I'll be waiting for my check, and if they don't send it, I'll sue the fed, the state, and every single senator and congressman that voted to privatize it.

And the hilarious thing is, I'd win.

 

Of course it is a Ponzi scheme. Why do you think the proposed solution to "saving" social security is to increase the tax? Why do you think people always talk about demographics as part of the problem (too many people receiving benefits, not enough people paying in)?

Because the payouts are dependent upon the current payments in - the very definition of a Ponzi scheme.

I see, so you are abandoning all ability to think and project ahead, to anticipate the problems that are obvious and be proactive in order to mitigate the effects of those problems. You would rather look backwards and pretend that nothing ever changes. Got it.

 

I agree with the sentiment, but I am not so sure you would win. To win you have to have an honest judicial system and an honest political system, and the USA has neither.

Also, there are people who are already on social security, they planned on it all their lives and its too late for them to accommodate a decrease in benefits. Their benefits depend upon people paying in today. Whether you leave some of your ss "contributions" in the system to pay those people, or whether the govt increases your taxes to pay those people, you will end up paying those people.

Taxes never go away. I just assume a clean, closed ended approach of me leaving some amount of my "contributions" in the system to cover those people, and I'm done with it forever.

 

Yes, Republicans are generally more open to real reform that Democrats.

The we owe Bond and the Limeys a lot.

 

IF they had privatized SS back when they first started talking about it when the Dow was at 2,000, now it is at 20,000, there would be no problem.. Wouldn't you like to have 10x as much in your retirement acct?? Dumb ass, short sighted liberals at work once again..

 

Trump mentioned he was going to EXPAND social security benefits.....is he a liar? *shocked*

 

I hope never. Love willing elections.

 

SS is the dumbest regressive tax and welfare system and needs a total overhaul..It should be phased out slowly over the next 5 decades. Another disastrous welfare program with the typical govt outcome,,,failure and bankruptcy..

 

Privatization does indeed expand benefits.

 

No, it doesn't. It means privatizing the motive behind the intent of the program, from benefit allocation to profit.

 

Of course he will not cut SS. He isn't a modern con, who salivates to cut SS. Working people got him elected, not the upper middle class or upper class. He will represent these people the best he can, and this will put him at odds with this sold out GOP, who he beat in the primaries. Trump is not an ideologue at least to date. He is am American pragmatist. He has already shown these colors. Will he change colors? Will he be another Obama who forgets as soon as he takes office? Only time will tell, but I am betting that he will not. I cannot see him changing that drastically, for he said things during his run for office he was saying decades ago, who like sanders has not changed much in beliefs over the years. Whether you agree with his beliefs or not.

But he will get blasted by the left when he helps out the same kind of people they once represented, before the arrival of the Clintons. And the GOP are not gonna like trump either. For he is not like either party in the treason they have committed on America to pay back their big donors, who has a leash on both parties in congress.

 

That's why he staffed his whole cabinet with supply siders, Wall streeters, and small government ideologues? I don't know what he has been selling to you, but if I was you, I'd rather look at his actions than words. And they don't bode well for the non-1%ers.

 

Chile and the three counties in TX show that privatization does indeed expand benefits. Payouts are larger, account balances transfer to beneficiaries, and perhaps most importantly the social security entitlement is removed from the national debt and yearly deficit accounting. Private accounts are a superior way to deliver the benefits.

 

The non 1%'rs are the ones which will benefit most from a economic growth of ~ 4% which is what the supply side policies will deliver. The US voters rejected a third term of the control-command BIG GOV 2% economy of Barack Obama.