Tuesday, August 16, 2005 - 12:02 AM EDT
SORRY FOR THE CAPS, BUT I WANTED MY RESPONSES IN THE BODY OF YOURS, AND WANTED THEM TO CONTRAST.
Actually the Social Security system itself is fundamentally fine. The fact is, like it or not, that without a required tax used to set earnings aside, many people, especially the poor, would not voluntarily save any money, or anywhere close to enough money, to survive past their ability to perform labor.
FUNDAMENTALLY, SOCIAL SECURITY DESTROYS INITIATIVE, INDEPENDENCE, SELF-SUFFICIENCY, AND PREYS ON THE FINANCIALLY UNSOPHISTICATED, AS WELL AS THOSE WHO MIND THEIR OWN BUSINESS.
SURE, THE EXISTING SAVINGS PROBLEM SHOULD BE FIXED. THAT DOESN'T REQUIRE DRAGGING ALL WAGE EARNERS INTO A PONZI SCHEME.
SO IT SEEMS REASONABLE TO HAVE A GOVERNMENT MANDATE THAT ALL MUST BE FORCED TO SAVE.
THOSE WHO DETERMINE THAT SELF-INSURANCE IS THEIR DESIRE, SHOULD BE ABLE TO OPT OUT AFTER SATISFYING BASIC REQUIREMENTS.
America currently has the lowest savings rate of any industrialized country, has among the highest incomes, and has the lowest taxes. People in America can certianly afford to save many times more than Americans do, but they don't. The savings rate in China is 40% of income! And the Chinese have incomes FAR less than we do.
SEE ANSWER TO FIRST STATEMENT.
I'm not sure hat anyone is "destroying" the wealth of the poor, but they are certainly underpaid for their work in general. The laborers who create wealth certainly see too little of it, most of the wealth going to financial institutions that siphon off large chunks of the value created by labor without adding any value themselves. That's the root cause of economic and social problems around the world of course, and America is no exception.
WORKERS HAVE THEIR WEALTH CONFISCATED BEFORE THEY SEE IT THROUGH THE ABERRATION OF PAYROLL WITHHOLDING.
HOW MUCH ESTATE MAY A WORKER LEAVE TO FAMILY, FRIENDS, INSTITUTIONS, OR OTHERS UNDER SOCIAL SECURITY?
NOTHING. THE SYSTEM EATS IT.
A WORKER WHO EARNS $37,000/YEAR AVERAGE OVER A 40 YEAR CAREER GIVES UP 12.4% OF THAT AMOUNT, $4588 TO SOCIAL SECURITY.
OVER 40 YEARS, ASSUMING NO ADDITIONAL FUNDS FROM THE SAVER, THAT $4588/YEAR TURNS INTO A TOTAL PRINCIPAL SEIZURE OF $183,520.
IF INVESTED AT A MODEST 4%, BELOW THE CURRENT HISTORICLY LOW TEN-YEAR BOND RATE THAT WE WILLINGLY OFFER TO THE CHINESE, THAT PRINCIPAL WOULD IN 40 YEARS BECOME $475,000.
CAN THAT WAGE EARNER ACCESS THAT $475,000? NO, AS IT HAS BEEN SEIZED BY THE GOVERNMENT.
CAN A WORKER WHO DIES AT 65 LEAVE THAT $475,000 TO A BENEFICIARY? A CHILD'S OR GRANDCHILD'S COLLEGE FUND?
NO, IT HAS BEEN SEIZED BY THE GOVERNMENT, WHICH THEN MAY ISSUE A $255 DEATH BENEFIT. YEE-HAH!!!
THAT IS MASSIVE DESTRUCTION OF WEALTH.
ASSUMNG A $15,000 INCOME FOR 40 YEARS YIELDS A $74,400 SEIZURE. INVESTED AT 4% YIELDS A NEST EGG OF $190,000 IN 40 YEARS.
CAN THAT WAGE EARNER ACCESS THAT $190,000? NO, AS IT HAS BEEN SEIZED BY THE GOVERNMENT.
CAN A WORKER WHO DIES AT 65 LEAVE THAT $190,000 TO A BENEFICIARY?
NO, IT HAS BEEN SEIZED BY THE GOVERNMENT, WHICH THEN MAY ISSUE A $255 DEATH BENEFIT.
THE POOR AND NEAR POOR GENERATE GREAT WEALTH, AND HAVE IT SEIZED AND DESTROYED. THEN THEY ARE TOLD THEY ARE POOR BECAUSE THE "RICH" DON'T WANT TO PART WITH THEIR WEALTH.
Social Security is actually one of the few working system that has a good benefit, largely because there is so little government involvement in it. Its a government run program, but there is little activity, so its pretty basic.
What makes it work is the fact that it is an INSURANCE program, and this is why keeping it as one huge monopoly program is an advantage, because it shares risk across the broadest possible pool.
A person with a poverty level income all their life will get back what they paid into Social Security within 5 years of their first benefit if they retire at age 65. Everything past 5 years will be a gain above what they paid into the system, and that payment goes on indefinitely until they die.
I don't think that people who live in poverty their whole lives, most of which have IQs below 80, are going to make better investment decisions than that on their own and be able to safely manage their money into their elderly years, that's just reality.
The "what they could do with their own money" scenario assumes that if Social Security were eliminate than everyone would invest that some amount of income into some other stable and secure investment. The reality is that even today the majority of people know little about investment, and shocking as reality may be to some, yes half the people in the world have less than average intelligence.
What are you going to do with millions of workers who don't save their money, don't know what to do with their money, etc, whatever, and then they get in a debilitating accident or they retire and they can't pay their electricity bills, they can't afford food, now you have millions of homeless elderly and disabled people, what will care for them, will we let them rot in the streets, what now, etc?
YOU HAVE BOUGHT INTO, AND PROMOTE, ONE OF THE FUNDAMENTAL ORWELLIAN DOUBLESPEAK LABELS FOR SOCIAL SECURITY.
IT IS NOT "INSURANCE," DESPITE THAT OFT-USED CANARD.
INSURANCE SPREADS RISK, AND REWARDS THOSE WHO HAVE LEAST RISK WHILE PENALIZING THOSE WHO HAVE THE HIGHEST RISK.
I GET LIFE INSURANCE AT A BETTER RATE THAN A SMOKER. AS IT SHOULD BE.
I INSURE MY BUSINESS AT A LOWER RATE SINCE I PROVED MY ABILITY TO CONTROL LIABILITY.
AS IT SHOLD BE.
I WRECKED MY CAR AND MY INSURANCE WENT UP. AS IT SHOULD BE.
BUT I CAN DETERMINE MUCH OF MY COVERAGE, ONCE I MEET GOVERNMENT MANDATED MINIMUMS.
I CAN DETERMINE THE PAYMENT SCHEDULE, TO SOME EXTENT.
I CAN OPT FOR MORE OR LESS DEDUCTIBLE.
I CAN DROP MOST INSURANCES I DON'T WANT, OR NO LONGER NEED.
NONE OF THIS IS TRUE WITH SOCIAL SECURITY, SINCE IT IS NOT AN INSURANCE SCHEME. IT PERVERTS THE REWARD ONE SHOULD RECEIVE FOR REDUCING RISK.
IT IS A POWER GRAB PONZI SCHEME. IT IS A WELFARE PLAN.
Umm... think that won't happen? That's what already did happen in the 1900s-1940s prior to Social Security.
Everyone gets out of Social Security what they paid into it within 7 years of when they start drawing it if they retire at 65. Its not a rip-off, it works fine. Its a stable and secure PART of the retirement is disability system.
Everyone is free, and even encouraged, to save on their own for their retirement in private accounts.
IT IS A RIPOFF, AS EVIDENCED ABOVE.
IGNORING THE TIME VALUE OF MONEY IS COMPLETELY IRRESPONSIBLE. IT IS A BLATANT VIOLATION OF ANY FIDUCIARY DUTY ANY AGENT COULD HAVE FOR A CLIENT.
Even men like Henry Ford and other major industrialists supported the idea of a national mandatory savings system. You see, the rich don't want waves of poor people mobbing the street any more than poor people want to be out on the street.
The fact is that Social Security has been the single largest stabilizing force on the American economy at a macro-economic level in the history of the country.
UH, THAT'S JUST ..........
BUT SOCIAL SECURITY IS A POWER-GRAB, VOTE-BUYING SCHEME, AND REALIZING THAT, ONE WOULD EXPECT TRUTH TO FLY OUT THE WINDOW.