Jul 13, 2011 Political
Social Security was supposed to be the safety net that allowed people to have a little money coming in when they retired. This is a program that was designed to assist those incapable of saving for their own futures and it has morphed into an albatross that includes all kinds of things like disability payments to people who are allegedly unable to work.
The money that is taken in each month is sent to the Treasury and the Treasury issues a worthless piece of paper indicating that the money is there if it should be needed. All Social Security has to do is ask and they can get the money they need to make payments. Nice idea except the money confiscated goes into the general fund and politicians spend it on everything under the sun. When Social Security asks for the money to make payments our country has to borrow it from another country (usually one that is not a friend) and then pay interest on the money borrowed. The process costs us a hell of a lot more than it should. If they had left the money alone there would be no problem.
This leads us to the current debt ceiling “crisis” and the statement by Barack Obama that he could not guarantee that Social Security checks will go out on August 3rd if the debt ceiling is not raised. This is a blatant lie because Social Security is required to be paid and that means other programs will be cut so that Social Security recipients get their money. Besides, there is still plenty of money coming in to service the debt and pay Social Security. Other programs will have to be cut. Look at it this way, either the Congress makes serious cuts now or they will happen automatically in August.
The whole issue shows why privatizing Social Security is an important and necessary measure. People work to put their money into the system and then government takes that money and spends it on things for which it was never intended. When trouble hits, Obama (using scare tactics) says he can’t guarantee people will get the money they paid in. In fact, the Supreme Court has ruled that people have no right to receive Social Security and government can end it at any time (they would have to change the law).
The federal government had its chance and it terribly mismanaged the funds. If any private business took money for one thing and spent it on another and then could not meet the original obligation the people in charge would end up in jail. Ironically, the people in Congress who gave us the Social Security mess would be leading that charge.
It is time to privatize Social Security and allow people to put money in accounts that they own and that they have control over. It is time they owned it all and were able to pass it on to their heirs. This would have an added benefit of allowing people to retire when they felt they could rather than having to hit a government mandated age before they could draw the money. People would be better off and they would not be dependent on government (which is why politicians don’t want you in control).
I know the tired arguments about market crashes and all that. There are funds that start out with risk and get less risky as the worker gets older. There is a certain amount of risk in anything but it is unlikely that people will go completely bankrupt. The simple truth is they can be no worse off than they are right now with all the money they “contributed” squandered on wasteful government programs and Obama telling them they might not get a check in August (and for who knows how long). If they controlled their own money this would not be an issue because they would be in control of their own assets.
The government in general has mismanaged the program by wasting the money. They now have to borrow to make payroll, so to speak. Obama as much as admitted that the program would be better off if we privatized it when he admitted he can’t guarantee that people will get their checks.
It is time to move Social Security away from government control and put it back in the hands of the people who actually earn the money. It will take a while and we still have obligations to those currently drawing Social Security. We could afford to do that if we open a lot of off shore oil leases and allow American businesses to drill for oil. We will create jobs, will produce our own oil and gas and a portion of the revenue can be earmarked specifically for Social Security to pay those currently in the system (with no possibility of the money being used for anything else).
Let the younger generation start setting aside money for their own retirement and let them have a prosperous old age free of dependence on government.
You know they can’t sustain it. You know they can’t run it effectively. You know they can’t keep their hands out of the till. You know that they cannot guarantee you will receive your money. And they know it too.
So let us do the right thing, the smart thing, and push for privatizing Social Security.
We certainly cannot possibly do any worse than the government has.
And in all likeliness we will do much better.
Never surrender, never submit.
Ever since the instability in the market started last week with its subsequent government bail outs I have heard a number of Democrats blame the entire mess on Republicans. I am not going to pretend that the problems belong solely to one party. There is enough blame to go around but Democrats can’t seem to understand that. While blaming George Bush and John McCain they conveniently forget that Clinton Administration policies that relaxed the requirements to get loans led to a lot of people borrowing more than they could ever hope to afford. Democrats also seem to have forgotten that it is hard to manage a business when it is shoveling truckloads of money in your direction and when your friends are making millions because they are bilking the system.
In the last week I have also heard that George Bush and John McCain supported privatizing Social Security and then that statement was usually followed by, “Imagine where your money would be right now after this market collapse.” Yes, we are led to believe that Bush and McCain’s idea of privatizing Social Security was to invest it in the highly volatile housing market and hedge funds (where Chelsea Clinton could manage them) when the fact is, the plan has always been to allow investment in a range of securities from those with no risk to those with moderate risk. The government already allows investment in those kinds of funds for its workers. The program is called the Thrift Savings Plan (TSP) and there are five funds in the family of investments. Workers are able to allocate their money between the funds and to determine how their earnings are invested. There are also life cycle funds which incorporate the five funds in an automatically adjusting format that goes from higher risk when one is younger to little risk as one gets older.
What does all this mean? First, there are risks with everything. The federal government cannot insure that people will get their Social Security checks. There is no guarantee that the money you paid in will ever be paid to you. The program can be reduced or increased at any time and Congress can continue to raise taxes in order to fund a program that earns less than 1% interest. Congress can also pilfer from the money at any time. In fact, Social Security is in bad shape because Congress has raped it over the years.
So there is risk even with the government. But there is also the injustice that the money is taken from you and if you die before you can collect, it goes away. There might be survivor benefits but if you had been able to invest the money yourself you would have made more and could have passed it to your heirs.
How does all this square up with the volatility in the market this week? The price of the shares in the TSP have remained steady since the problems began. There have been minor fluctuations in price as there are in any stocks but the change was less than a dollar. This chart at the TSP website shows the daily price for each fund in the program. Notice that the five individual funds and the life cycle funds remained constant.
Of course, almost all investments carry risk. The G Fund is the only one that is protected from market changes but even with the potential risks the other funds did not fall. So for those who say that if we had privatized Social Security we would have a bunch of bankrupt old people eating cat food, they are just plain wrong. Old people will still receive money under the current plan and younger people would transition into a TSP kind of plan over time. As the elderly die off the current system would gradually fade. It will work and those who believe otherwise are wrong.
Social Security is a system that allows the government to have control over your money and your lives. It is a weapon used to scare old people during elections and it is a socialistic system where money is redistributed. People who believe in this system are use to having the government take care of them instead of taking care of themselves. Social Security is not guaranteed and it is no safer being controlled by the government than it would be controlled by you. It is your money. You should be able to say where it is invested and where it goes when you die.
Just to drive the point home, the G Fund is the safest fund in the portfolio therefore it has the lowest rate of return. The 10 year monthly average for the G Fund is 5.12% and it has not been negative in that period of time. So people would have the opportunity to invest in a fund like this paying just over 5% or they could just stick with the government run program that gets less than 1% return on its money.
People work to grow personal wealth and by letting invest their own money and take control of their own destiny we will have a whole lot more they retire. Additionally, there would be little need to have a retirement age that continues to rise in order to meet the needs of Social Security. The government should not be able to keep raising the retirement age, you should decide when you will retire. As it stands now, the government controls YOUR money so it can make the rules. If you controlled your own money, you could make the rules.
To further illustrate the point, assume a person starts working at 20 and will retire at 60. This person has $100 taken from his check for Social Security each month. At 0.08% (best guess for the less than 1% return) the person will have $48,774 when he reaches 60. If that person invested in a fund like the TSP G Fund the amount after 40 years would be $157,469. A hundred dollars a month would equate to an income of $10,000 a year. Certainly no one will make that amount of money for an entire working career. Besides, minimum wage is $4000 higher than this. The point is, while it would be unreasonable to think a person could retire on $157,469 it is also unreasonable to think that the same person would only make 10 grand a year for 40 years. It is also unrealistic to think that a person would even see an increase under Social Security. They have formulas to determine how much you get. If you invest your own money, you get to keep what you make.
There are safe market investments and those who are trying to make an issue out of the current market and how Social Security would have been affected are not paying attention or don’t understand.
I will make a deal though. I am willing to take the risk. Let me keep the money I would be required to pay into Social Security and I will invest it myself. I have no worry that I will not retire a wealthy man and I will absolve the government of any responsibility should I fail.
UPDATE: Newsbusters reports that Newsweek has caught Obama in a blatant lie while trying to scare the elderly in Florida:
[OBAMA] And I’ll protect Social Security, while John McCain wants to privatize it. Without Social Security half of elderly women would be living in poverty – half. But if my opponent had his way, the millions of Floridians who rely on it would’ve had their Social Security tied up in the stock market this week. Millions would’ve watched as the market tumbled and their nest egg disappeared before their eyes. Millions of families would’ve been scrambling to figure out how to give their mothers and fathers, their grandmothers and grandfathers, the secure retirement that every American deserves. So I know Senator McCain is talking about a “casino culture” on Wall Street – but the fact is, he’s the one who wants to gamble with your life savings.
That’s not true. The plan proposed by President Bush and supported by McCain in 2005 would not have allowed anyone born before 1950 to invest any part of their Social Security taxes in private accounts. All current retirees would be covered by the same benefits they are now.
Obama is pulling the same scam I discussed earlier; lie to seniors about Social Security in order to scare them into voting for Democrats. Obama is a liar. I wonder if the liberals will hold him to the same standard they demand of McCain?
Mar 25, 2008 Political
In an interview in Pittsburgh Hillary was asked about Social Security and here is what she said:
On Social Security:
“We need to have a bipartisan commission much like President Reagan and Tip O’Neill had in the ’80s where they worked together, and we have lived off of those efforts. But we need to do something now. One of the caveats that I would have is that people that are presently on Social Security or about to go on Social Security not be affected.”
George bush has said that Social Security is broken and that it needed to be fixed. He wanted to privatize it or at least part of it. His plan would not affect those already on SS or those about to go on SS. It would have allowed younger people to put away THEIR money instead of giving it to the government so it can be spent on everything but SS.
Hillary stated in the past that SS was on the way to being solvent until 2055 (not accurate) until Bush squandered that. Bush did not spend the SS money. Congress has been dipping into the money forcibly removed from workers for years. SS has been declining because of the growing number of people drawing it and the declining number of people paying in and because the members of Congress cannot keep their grubby little hands out of the till.
Bill Clinton wanted to privatize SS because he knew that it was in bad shape. Congress (all parties) cannot let this happen because they lose the cash cow. Most of them will be dead before the IOUs are ever paid back (as if they ever will be). Hillary wants to fix SS because it is always a problem and in bad shape when republicans run the place and it always needs Democrats to fix it. Hillary kind of suggests that the fix (privatization) would be OK if people on it or about to be were not affected.
If we had done this when Bill Clinton wanted to or when Bush wanted to then there would be a lot of people saving and earning more money for retirement and we would not be talking about running out of money. SS could be invested so that say 50% is invested for the worker and the other 50% pays for the benefits already being dispersed. As recipients under the old system die off the amount workers are allowed to invest would increase until it hit 100%. This would allow workers to start investing for themselves and eventually lead to them investing 100% of the money in their own accounts that no member of Congress could EVER touch.
The money would belong to the worker for retirement and could be passed on as part of the estate. No matter what liberal groups say the end result would be retirees with quite a bit of money. They would live better and not depend on the government to dole out a measly portion of money each month. people would not be tied to a political party for fear that something bad would happen to the money. people would actually be responsible for their own retirement.
The rate of return, even in down markets, would be better than the less than 1% the government gets and the maintenance costs would be less than what it costs to run the boondoggle that is SS today. I know that I have been working for 37 years and I have made more from my investments than i have accumulated in SS. Even a bad market outperforms the government.
Hillary is playing coy because she did not come out and say that privatization was best but she, as well as all members, know SS is in serious trouble and taking more money from higher wage earners to give it to retirees is not the solution to the problem. They just have trouble letting go of a cash supply that they do not have to account for and that they can tap into when they need money.
Our government is not good with money and we should never trust them with any. We are getting rebate checks (well i won’t but non taxpayers will). The government spent $43 million to send letters telling us about the program. That was a judicious use of our money…
Maybe Hillary can take credit for Bill’s idea about privatizing SS. Hell, what’s another lie? And did she invoke Reagan’s name? Let’s see if she catches hell like Obama did.