On Thu, 24 Mar 2005 10:49:37 -0500, "P.Fritz"
wrote:


"Dave Hall" wrote in message
.. .
On Wed, 23 Mar 2005 19:12:14 -0500, DSK wrote:

... What I have said is based 100% on what has been announced by
the Bush Administration as their plan, and applying some very straight
forward common sense.


Dave Hall wrote:
Specific details have not been finalized yet.

Is President Bush going to backpedal as hard as you are?

Who's backpededalling? I'm stating a fact.



.... Your "common sense" is based mostly on speculation and
conjecture.

And the facts of what Social Security *is* and what the SS trust Fund
*is*.

A ponzi scheme that's heading for financial insolvency?


One of the most definite facts about Bush's plan is that his supporters
are trying to sell it by lying about Social Security... and you claim
that telling the truth about SS is "scare tactics."

How does the proliferation of the ideas such as "Seniors will have
their benefits cut", and "Bush's plan will put money in the pockets of
Wall streeters", relate to telling the "truth" about SS?



Welfare Junkies

By Robert J. Samuelson
Thursday, March 24, 2005; Page A19

We are a nation of closet welfare junkies, which helps explain why we can't
have an honest debate about Social Security. Social Security and Medicare
are our biggest welfare programs, but because Americans regard "welfare" as
shameful, we've found other labels for them. We call them "social insurance"
or "entitlements." Anything but welfare. Democrats and Republicans alike
embrace the deception. No one wants to upset older voters. Well, if you
can't call something by its real name, you can't discuss it honestly.

Welfare is a governmental transfer from one group to another for the benefit
of those receiving. The transfer involves cash or services (health care,
education). We have welfare for the poor, the old, the disabled, farmers and
corporations. Social Security is mainly welfare. Workers' payroll taxes pay
the benefits of today's retirees. The taxes aren't "saved" for the workers'
own retirement. There have been huge disparities between taxes paid and
benefits received.

Ida May Fuller, the first retiree to receive benefits, in 1940, paid $24.75
and got almost a thousand times that ($22,888.92). In the 1950s and '60s,
many beneficiaries received 10 or more times the amount their payroll taxes
would have returned if invested in U.S. Treasury bonds and kept for retirees
(they weren't). Indeed, most beneficiaries who retired before 2000 have
received -- or will receive -- a surplus in benefits over what their taxes
would have returned if similarly invested, write Sylvester Schieber and John
Shoven in their history of Social Security, "The Real Deal." This surplus
now has a present value of almost $16 trillion, says Schieber, head of
research for the consulting firm Watson Wyatt Worldwide. (Shoven is a
Stanford University economist.)

Naturally, the elderly don't see themselves as freeloaders. They think
they've "earned" their Social Security benefits by paying payroll taxes. As
Schieber and Shoven note, the term "social insurance" dates to Bismarck in
19th-century Germany. But applying it to Social Security involved much
political license. In normal usage, insurance suggests protection against
something you don't expect to happen -- a house fire, a car accident. By
contrast, most people expect to grow old. Using the "terminology of
insurance . . . [was intended] to mask the huge welfare payments being
made," they write. People falsely believe they're "only getting what they
have paid for." That is even less true of Medicare. In 2006 the
Congressional Budget Office expects Medicare to cost $383 billion. Medicare
premiums (paid by recipients) pay 12 percent; payroll taxes, 49 percent;
general taxes and borrowing provide the rest.

This mass deception may seem harmless. After all, most Social Security
recipients have been responsible citizens and productive workers. Why accuse
them of living on government handouts? The answer is that today's myths
perpetuate unrealistic expectations and prevent honest debate. Americans
regard "earned benefits" and "welfare" differently. The first is a right,
the second a privilege. In theory, welfare should serve some public purpose
and not just enrich the recipients. By admitting that Social Security and
Medicare are welfare, we allow relevant questions to be raised. Do all
beneficiaries "need" or "deserve" their welfare? Is the cost "unfair" to
taxpayers or burdensome to the economy? Have the social and economic
conditions that originally justified the welfare changed?

For Social Security, they have. In 1935 Americans 65 and older were 6
percent of the population. They're now 12 percent and by 2030 are projected
to be 20 percent. Most Americans can now save for their own retirement,
including the cost of health insurance. The Social Security debate ought to
involve moral values and economic realities. How generous a "safety net" for
the elderly can a decent society afford without overtaxing the young or
harming the economy? How can changes be made without being too disruptive?
Instead, the debate has degenerated into an obscure technical exercise
focused on baffling accounting concepts (trust fund "solvency," "unfunded
liabilities").

Despite what you've heard, the real issue is not Social Security's
"solvency." It is the total cost to the government of baby boomers'
retirement, including Social Security, Medicare and Medicaid (which covers
much nursing home care). The real issue is preventing those costs from
becoming economically oppressive and politically poisonous. Even if the
Social Security trust fund is made permanently "solvent" -- in the sense
that taxes cover benefits -- the costs of all federal retirement programs
may still become undesirably high. In 2004 Social Security, Medicare and
Medicaid were 8 percent of national income. Left alone, they'll reach 14.5
percent by 2030, the Government Accountability Office projects. The CBO has
made a similar projection.

If these costs are too high (and I think they are), the only way to curb
them is to cut benefits. Neither Democrats nor Republicans want to face that
reality. President Bush's proposal for "personal accounts" diverts the
debate. To enhance their appeal, he promises to exempt anyone 55 or older
(anyone born in 1950 or earlier) from any benefit cuts. Some other proposals
lower the exemption to 45 (anyone born in 1960 or earlier). Well, that
covers most of the baby boom, which stretched from 1946 to 1964. If the real
problem is the baby boomers' retirement costs and you exempt baby boomers
from benefit cuts, then by definition you ignore the problem.

On these issues, we can't think straight unless we talk straight. We can't
control our welfare habit unless we admit our addiction. Don't hold your
breath.

http://www.washingtonpost.com/wp-dyn...2005Mar23.html


That was insightful. That pretty much sums up how I feel about SS. SS
does seem to be more like an insurance policy than an investment
account. You pay in, and if you die, your beneficiary gets SS. If you
make it to retirement, you get an annuity. If you die at 65 alone, you
put in for nothing, but others benefitted from your contribution.

As the life expectance increases, the length of time that a retired
person potentially can expect payment from SS also increases. This
just adds to the problem. For SS to continue, the government would
have to hope that people collect less than they put in. Recent trends
would seem to predict the opposite.

Dave