Social Security - To Privatize or not

[GenMarshall]

I have been losely following the debates regarding the US Social Securtiy. Right now I am in the middle road right now of chosing of which side to fall under. I have stumbled uppon this article from the LA times. Oviously there are two sides of the issue, especialy in the article when Bush had a debate with FDR's grandson. (FDR was the one who created the Social Security in 1935* in part of the New Deal.)

I am curious and willing to hear from both sides of the table on what their oppinion about Social Security privatization.

 

[SeleucusNicator]

I don't see any advantage in privatization, especially with the astronomical costs associated with it. Perhaps I'm biased because of my distrust of corporations and the fact that the money that was supposed to pay for my college tuition was invested in WorldComm, after which I never heard from it again.

Anyway, I'd be more partial to abolishing social security as it stands, and completely replacing it with some sort of newer approach to the issue. Don't ask me what that is, as I'll be having finals over the next week and will be unable to make any prolongest posting sprees.

 

[IglooDame]

In your poll, is "I support it" referring to SS itself, or the effort to privatize it?

 

[GenMarshall]

In your poll, is "I support it" referring to SS itself, or the effort to privatize it?

The effort to privatize it.

 

[Sparta]

I'm with SN - given the choice, I'd gladly abstain from the system entirely as it stands now. Better to forfeit the pittance I'll ever see from it than to continue to be forced into supplementing baby boomers the rest of my life. Of couse, senior citizens would rather jail me than allow me to opt out of subsidizing their retirements...

 

[Yom]

Though privatization has its upsides (such as increased money due to the returns of investment over time), it's not worth it. An investment in the stock market has an average return rate of 8%, which is very good and high, but the standard deviation is huge (I'm not sure exactly the standard deviation of the average, but I know that within two standard deviations, there would be some people who lost money). While this may be okay for those who are working, because over a long period of time, as long as they are careful with their investments, they will win out, those on Social Security do not have that privilege.

 

[IglooDame]

The effort to privatize it.

Roger, my vote is now recorded.

 

[amadeus]

It's funny to see how little people actually know about this plan.

Under the current proposed plan, you can (it is not compulsory) direct 4% of your taxable wages up to $1,000 to a small number of diversified holdings, not any one corporation.

The people that see Social Security and want to do nothing is like sitting on the Titanic and yelling at the iceberg to go away.

 

[storealex]

Ups, I thought it was in general. I know nothing of the plan and don't care.

 

[IglooDame]

It's funny to see how little people actually know about this plan.

Under the current proposed plan, you can (it is not compulsory) direct 4% of your taxable wages up to $1,000 to a small number of diversified holdings, not any one corporation.

The people that see Social Security and want to do nothing is like sitting on the Titanic and yelling at the iceberg to go away.

Do you know offhand what percentage of taxable wages currently are directed (at least on paper) toward Social Security?

 

[GenMarshall]

Do you know offhand what percentage of taxable wages currently are directed (at least on paper) toward Social Security?

This is from Wikipedia in the link next to "1935" w/ the astricks

"This tax is 6.2% of an employee's income paid directly by the employer, and 6.2% deducted from the employee's paycheck, yielding an effective rate of 12.4% of an employee's income."

Not 100% sure if this is right.

 

[amadeus]

It's 12.4%. If you're self-employed, you have to pay the whole thing yourself. If you're employed by someone else, the cost is "split in half" (when in fact all the employer does is subtract that money from your potential salary to pay their obligations.)

Either way, you're paying 12.4% in payroll taxes for Social Security.

 

[Renata]

Against. Not worth the cost for the dubious benefit, as shown by other countries that have already tried it. Not to mention that any taking money out of social security will only accelerate the rate of loss of the surplus.

Can anyone answer me why the situation now is so much more awful than the situation in 1983, when Congress approved a payroll tax increase to generate the current surplus? (Which surplus will continue to grow for about the next dozen years, by the way.) Could it be because Bush has already robbed the fund blind and doesn't want to pay the political cost of paying the money back?

Renata

 

[GenMarshall]

It's 12.4%.

Ok, so Wiki's is a few digits off

 

[amadeus]

Against. Not worth the cost for the dubious benefit, as shown by other countries that have already tried it.

Chile and Singapore?

 

[EquinoxOmega]

There are things a state should care and others it shouldn't mind. For me a social security system is an important matter of state! Don't privatise it! Companies don't act for the community and you will be glad to have such a system when you need it. But I'm opened to an additional private assurency to have a better life in case of need.

 

[CIVPhilzilla]

I'm not planning on Social Security when I retire. If its there great, however I am going to be smart and invest in a 401K and other retirement plans so I have a nice cushion to sit on. Bush's plan won't save Social Security, and will add extra burden to a balooning deficit, something I am not happy with.

 

[IglooDame]

It's 12.4%. If you're self-employed, you have to pay the whole thing yourself. If you're employed by someone else, the cost is "split in half" (when in fact all the employer does is subtract that money from your potential salary to pay their obligations.)

Either way, you're paying 12.4% in payroll taxes for Social Security.

Thanks (to you and to CG).

I gather the 4% is in lieu of paying it in SS tax and isn't another IRA plan.

Anyway, it is a step in the right direction.

 

[Zarn]

I hate Social Security, so I naturally would like to see it not exist. If it must stay, I would rather it be privatized.

 

[YNCS]

Social Security privitization is part of the Bush "No Millionaire Left Behind" plan.