Page 1 of 5 123 ... LastLast
Results 1 to 15 of 62

Thread: A permanent fix for social security

  1. #1
    Join Date
    Jan 2003
    Location
    Bradenton, FL
    Posts
    1,942

    Exclamation A permanent fix for social security

    Now I wasn't too sure about private social secutiyu accounts even at 2%, but now I am sold at 6%. Why? Thank you Wall Street Journal editorial page!

    By allowing people to create private social security accounts instead of the current system, we will secure the program forever. It could cost a few billion dollars over 8 years, but we could get a lot.

    By allowing this, the social security chief estimates the following:

    In 75 years, we will double the nation's wealth just through private accounts. The trust fund will appreciate 9 trillion dollars, enough to pay off the national debt many times over.
    People investing in the private accounts will probably have on average 2/3s more money than those choosing to remain in regular social security.
    The system will never become insolvent with these projections. It will continue generating huge amounts of revenue for the government.

    Now I am kind of tired.. expect some editing and additions to this, but these are the basics. Should the government move to permit this?
    Conservatism...You liberals have no idea what you're missing!

    "Weren't you wondering why you were getting checks in the mail for not doing anything?"

    "No, I just thought the Democrats were back in power."

  2. #2
    Join Date
    Oct 2003
    Posts
    48
    link to the article?

  3. #3
    Join Date
    Jan 2003
    Location
    Bradenton, FL
    Posts
    1,942
    It wasn't an online article... it was in the print version of the WSJ.
    Conservatism...You liberals have no idea what you're missing!

    "Weren't you wondering why you were getting checks in the mail for not doing anything?"

    "No, I just thought the Democrats were back in power."

  4. #4
    Join Date
    Apr 2003
    Location
    California
    Posts
    340

    Cool

    Quote Originally Posted by Broker
    Now I wasn't too sure about private social secutiyu accounts even at 2%, but now I am sold at 6%. Why? Thank you Wall Street Journal editorial page!

    By allowing people to create private social security accounts instead of the current system, we will secure the program forever. It could cost a few billion dollars over 8 years, but we could get a lot.

    By allowing this, the social security chief estimates the following:

    In 75 years, we will double the nation's wealth just through private accounts. The trust fund will appreciate 9 trillion dollars, enough to pay off the national debt many times over.
    People investing in the private accounts will probably have on average 2/3s more money than those choosing to remain in regular social security.
    The system will never become insolvent with these projections. It will continue generating huge amounts of revenue for the government.

    Now I am kind of tired.. expect some editing and additions to this, but these are the basics. Should the government move to permit this?
    But Broker where would the politicians get their money from for their programs. They need that account to barrow from.

  5. #5
    Join Date
    Jan 2003
    Location
    Bradenton, FL
    Posts
    1,942
    They'll have 9 trillion dollars in the trust fund... isn;t that... scary. There'd be so much pork in the budget bills...
    Conservatism...You liberals have no idea what you're missing!

    "Weren't you wondering why you were getting checks in the mail for not doing anything?"

    "No, I just thought the Democrats were back in power."

  6. #6
    Join Date
    Sep 2003
    Location
    Southwest USA
    Posts
    3,234
    So you are saying the only way to save social security is to eliminate it. Basically saying the government has proven itself to be a lousy handler of money and that the individual is the best handler of the money and people should be encouraged to SAVE for retirement like they used to!
    epaphras_faith

    He is no fool who gives up what he cannot keep to gain that which he cannot lose. (Jim Elliot)

  7. #7
    Join Date
    Jan 2003
    Location
    Bradenton, FL
    Posts
    1,942
    Are you talking to me?
    Conservatism...You liberals have no idea what you're missing!

    "Weren't you wondering why you were getting checks in the mail for not doing anything?"

    "No, I just thought the Democrats were back in power."

  8. #8
    Join Date
    Sep 2003
    Location
    Southwest USA
    Posts
    3,234
    Quote Originally Posted by Broker
    Are you talking to me?
    Yes, and by the way, it isn't clear from my post, but I agree with you.
    epaphras_faith

    He is no fool who gives up what he cannot keep to gain that which he cannot lose. (Jim Elliot)

  9. #9
    Join Date
    Jan 2003
    Location
    Bradenton, FL
    Posts
    1,942
    Yes, I did find myself a little confused...

    I wrote this up a lot better on another forum with some of my own insight.

    Here:

    The President may bring this up in the State of the Union, which reminded me that I have been meaning to post it.

    All of this information is based on a Wall Street Journal opinion article citing information from the Social Security... uh... I'll just call it Administration, because I can't remember what they call it, but I think that's it...

    Most importantly, note that this is a CHOICE. NO ONE will be forced to move to private accounts if they are established, and everyone who wants to can remain in the old system.


    The president will most likely propose accounts that allow people to invest 2% of the 12% taken out of their pay checks in social security taxes in equity markets. The numbers I will deal with will involve a 6% allowance.

    Are there risks? Of course there are risks; you never know when you'll pick an Enron or Worldcom. But over a 45 year period those things wouldn't matter. Even if something was to happen close to your retirement you wouldn't be allowed to invest too much in one stock. And in the end stocks always go up.

    The SSA (I think O_o) estimates that the average return on this money will be 2/3s more than what someone would get from the old system, on average. Now as someone who has an interest and has a web site dealing with equity markets I can tell you that 2/3s is really, really, really on the lowest scale possible. The average market return is about 5% a year, so your portfolio would probably end up at a minimum of 300% of what you originally had (that's conjecture on my part assuming a 5% return over 45 years and investment of new money, but once again it is still a lowball estimate).

    What does this mean? The Social Security Trust Fund is currently going to be running a 10 trillion dollar deficit on current projections. The surplus of today will end shortly as the government's obligations come due to the baby boomers. Over a 75 year period, the SSTF (once again assuming only a 2/3% return on everyone's private accounts) would accumulate 10 trillion dollars, doubling the nation's wealth. Once again I would tell you that I think that number way too low. I would expect more like 40 trillion dollars over that 75 years, most likely more.

    It's possible that people could live quite well on their social security, pass sizable amounts of cash to their families, and we could transform America with the money flooding into the system. Let's take my number. There would be no budget deficit today, there would be a surplus of something like 60 billion dollars.

    But the only negative thing would be an addition to the current deficit of 250 billion dollars for 8 years to meet obligations during the transition.

    Once again, I remind you that these projections assume average returns on my part and tiny returns on that of the government. In all honesty I would expect the actual rates to be a lot higher.

    What do you think? Is it worth it?

    (Edit: I looked up some rates of return for a few companies. Berkshire Hathaway has had returns of at least 5% and as high as 59% averaging 25% year over year since 1965. That means that just assuming the average that they've had a return of 1000% just in the last 40 years)
    Conservatism...You liberals have no idea what you're missing!

    "Weren't you wondering why you were getting checks in the mail for not doing anything?"

    "No, I just thought the Democrats were back in power."

  10. #10
    Join Date
    Sep 2003
    Location
    Southwest USA
    Posts
    3,234
    Quote Originally Posted by Broker
    Yes, I did find myself a little confused...

    I wrote this up a lot better on another forum with some of my own insight.

    Here:

    The President may bring this up in the State of the Union, which reminded me that I have been meaning to post it.

    All of this information is based on a Wall Street Journal opinion article citing information from the Social Security... uh... I'll just call it Administration, because I can't remember what they call it, but I think that's it...

    Most importantly, note that this is a CHOICE. NO ONE will be forced to move to private accounts if they are established, and everyone who wants to can remain in the old system.


    The president will most likely propose accounts that allow people to invest 2% of the 12% taken out of their pay checks in social security taxes in equity markets. The numbers I will deal with will involve a 6% allowance.

    Are there risks? Of course there are risks; you never know when you'll pick an Enron or Worldcom. But over a 45 year period those things wouldn't matter. Even if something was to happen close to your retirement you wouldn't be allowed to invest too much in one stock. And in the end stocks always go up.

    The SSA (I think O_o) estimates that the average return on this money will be 2/3s more than what someone would get from the old system, on average. Now as someone who has an interest and has a web site dealing with equity markets I can tell you that 2/3s is really, really, really on the lowest scale possible. The average market return is about 5% a year, so your portfolio would probably end up at a minimum of 300% of what you originally had (that's conjecture on my part assuming a 5% return over 45 years and investment of new money, but once again it is still a lowball estimate).

    What does this mean? The Social Security Trust Fund is currently going to be running a 10 trillion dollar deficit on current projections. The surplus of today will end shortly as the government's obligations come due to the baby boomers. Over a 75 year period, the SSTF (once again assuming only a 2/3% return on everyone's private accounts) would accumulate 10 trillion dollars, doubling the nation's wealth. Once again I would tell you that I think that number way too low. I would expect more like 40 trillion dollars over that 75 years, most likely more.

    It's possible that people could live quite well on their social security, pass sizable amounts of cash to their families, and we could transform America with the money flooding into the system. Let's take my number. There would be no budget deficit today, there would be a surplus of something like 60 billion dollars.

    But the only negative thing would be an addition to the current deficit of 250 billion dollars for 8 years to meet obligations during the transition.

    Once again, I remind you that these projections assume average returns on my part and tiny returns on that of the government. In all honesty I would expect the actual rates to be a lot higher.

    What do you think? Is it worth it?

    (Edit: I looked up some rates of return for a few companies. Berkshire Hathaway has had returns of at least 5% and as high as 59% averaging 25% year over year since 1965. That means that just assuming the average that they've had a return of 1000% just in the last 40 years)
    Oh yes, it is well worth it. My personal opinion is that SSA is eliminated. All of the money that is in it is transferred to individual accounts over the course of 10-15 years. This allows people to begin to use dollar cost averaging. (I would even be okay with 20-30 years to allow for a generational shift). It would prevent the market from being overwhelmed and allow us to slowly decrease the SSA workforce (The largest US government employer I think.) This would in turn reduce the financial obligation of the government, infuse the economy with more money, lower taxes, increase consumption, production, jobs, technology, etc.

    Over any 10 year period the stock market has been up. The plan to allow a phase out over 20 years or so would allow those short timers to keep their current savings in the SSA to minimize risk to them. The rest of us that are looking at 20 to 30 years to retirement would likely have a million or two to work with at retirement.

    What do you think?
    epaphras_faith

    He is no fool who gives up what he cannot keep to gain that which he cannot lose. (Jim Elliot)

  11. #11
    Join Date
    Oct 2003
    Posts
    890
    Is this something like how much surplus we were going to run because there would be so much more tax revenue due to the huge tax cuts? Sounds a lot like the voodoo economics that Bush talked about when Reagan was running. Turns out he was right. It's deficit city again.
    Our most base instinct is fear.

  12. #12
    Join Date
    Sep 2003
    Location
    Southwest USA
    Posts
    3,234
    Quote Originally Posted by Hank
    Is this something like how much surplus we were going to run because there would be so much more tax revenue due to the huge tax cuts? Sounds a lot like the voodoo economics that Bush talked about when Reagan was running. Turns out he was right. It's deficit city again.
    Hank:

    How is this voodoo economics? Elimination of the Social Security Administration would significantly impact the budget and provide a reasonable cut wouldn't it. Additionally, it can be easily shown that the individual investor has massively outperformed the SSA on money investments. Isn't that good?
    epaphras_faith

    He is no fool who gives up what he cannot keep to gain that which he cannot lose. (Jim Elliot)

  13. #13
    Join Date
    Jan 2003
    Location
    Bradenton, FL
    Posts
    1,942
    I say they contract the portfolio management out to a company like Berkshire Hathaway. If you invested your money with them over the last 40 years you would have had a 1000% return.
    Conservatism...You liberals have no idea what you're missing!

    "Weren't you wondering why you were getting checks in the mail for not doing anything?"

    "No, I just thought the Democrats were back in power."

  14. #14
    Join Date
    Oct 2003
    Posts
    890
    Quote Originally Posted by epaphras_faith
    How is this voodoo economics? Elimination of the Social Security Administration would significantly impact the budget and provide a reasonable cut wouldn't it. Additionally, it can be easily shown that the individual investor has massively outperformed the SSA on money investments. Isn't that good?
    I’ve seen enough of the ‘pie in the sky’ scenarios to know that when something sounds too good to be true, it probably is. The devil is in the details. However if it’s as sure a thing as they say it is, why not just find someone that was willing to guarantee a certain rate that was discounted say a percent for their take. That much money would make anyone rich quickly if it panned out. That’s a sure way to find out how good the deal is. Ask the proponents to back up what they say with money.

    BTW if it doesn't work out as you say, guess who's going to be required to cover the loses?
    Our most base instinct is fear.

  15. #15
    Join Date
    Oct 2003
    Posts
    890
    Quote Originally Posted by Broker
    I say they contract the portfolio management out to a company like Berkshire Hathaway. If you invested your money with them over the last 40 years you would have had a 1000% return.
    That's an average of 19% per year. Think we could get them to guarantee say 10% over the next 40 years? Seems like that would be a sure thing considering what you are saying.
    Our most base instinct is fear.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •