D.C. Circuit guts ObamaCare

[Timsup2nothin]

I don't consider applying a means test to be 'stopping SS'. I put money into the system. Call it forced loan or call it forced saving for retirement call it whatever, I did it. In practice that money went immediately back out to people who had put in before me. In theory me and everyone else my age will be able to draw out money based on what we put in, and the workers of that time will chip in to cover that.

Well, here's something you should know about people my age. In the eighties there was widespread recognition that Social Security was badly broken and was not going to work. People my age started paying into the system with a very low level of confidence that it would be able to do anything for us, ever. (shouldn't claim to be spokesman for a generation...let's add 'if we were paying the slightest attention to events') So if the system were changed and we got screwed it isn't like we didn't have every opportunity to see it coming.

Now, if that 'getting screwed' was in the form of a means test, I personally don't think it would be so bad. If whatever I've 'got coming' were distributed instead to people who actually need it I'm quite fine with that. I frankly don't understand why anyone wouldn't be. If you planned to live on social security, and you need it, great, take it. If you don't, don't. If your savings run out before your time, take it then.

 

[DinoDoc]

DinoDoc implicitly feels like it's 'his' money and he's going to get it back 'later'. Yes. In some ways, that true. He's lending money (involuntarily) and he's gonna get paid back.

Actually, it's more of a question of what we consider SS to be? If we consider it to be a welfare program, I'll grumble about it but it's existence still makes a kind of sense if it is means tested. If it is a "forced" retirement savings plan, I would like my money back because I could get a better return on my investment in the private market. I don't see anything morally gray about either position.

 

[Tahuti]

On an individual level, SS disincentivises having children. You no longer need any children to ensure you are provided in your old day, like was the case in the Pre-SS era.

This is however a perverse incentive. At the same time, SS is reliant on generations of the future to keep functioning. Who may not come in the amount needed, because of SS.

 

[Timsup2nothin]

On an individual level, SS disincentivises having children. You no longer need any children to ensure you are provided in your old day, like was the case in the Pre-SS era.

This is however a perverse incentive. At the same time, SS is reliant on generations of the future to keep functioning. Who may not come in the amount needed, because of SS.

I think the real perversity is that it entitles people to treat their offspring like .... because the government will collect their support from the little brats for them anyway no matter how justifiably hated they make themselves.

But that doesn't mean I think the system has no merit.

 

[Antilogic]

Actually, it's more of a question of what we consider SS to be? If we consider it to be a welfare program, I'll grumble about it but it's existence still makes a kind of sense if it is means tested. If it is a "forced" retirement savings plan, I would like my money back because I could get a better return on my investment in the private market. I don't see anything morally gray about either position.

Means-testing it increases the administrative costs and stigmatizes the program. Its current structure also evades the risk in the markets--since crashes happen every 6-9 years or so, you are basically guaranteed to get whacked in retirement unless you die really quickly.

 

[warpus]

Worse in -your- opinion. Maybe some people think being free to succeed OR fail on their own (among other things) is more important than being spoon fed healthcare and a guaranteed salary for sitting on your butt by the federalies.

That's such hyperbole. I won't even respond to it, but I'd like you to know that it's hyperbole. *tip of the hat*

Many Americans subscribe to 'better a free man in hell than a servant in heaven' and are inclined to produce hell in order to test the concept.

I think all men and women should be free too, but the idea that the concept of freedom trumps all, no matter all, is a broken one.

I'll have more freedom if I'm allowed to poo on the sidewalk. But is that a good idea?

I'm 100% for looking at the facts before making the call, whether freedom is involved or not. But the way a lot of people seem to deal with such things.. is as soon as the word "freedom" or "liberty" comes up, they immediately jump on that side of the argument, even if they haven't had time to think through the consequences.

That's just dangerous.

The issue kicks in when there are 'forced' payments into a system you'd have voluntarily bought into anyway.

It seems that the problem is one of details, rather than broad "freedom always wins" type pronouncements.

 

[El_Machinae]

Actually, it's more of a question of what we consider SS to be? If we consider it to be a welfare program, I'll grumble about it but it's existence still makes a kind of sense if it is means tested. If it is a "forced" retirement savings plan, I would like my money back because I could get a better return on my investment in the private market. I don't see anything morally gray about either position.

Of course you don't see anything morally gray. You didn't even think about the question. Who pays you 'your' money back? Who gets screwed?

And frankly, it's both. It's an incredibly cheap welfare program AND a means of forcing retirement savings.

I honestly don't know what means-testing is. Canadian SS is very different, because it's subject to income tax. So are your withdrawals from your RRSP. Rich people will pay more tax (effectively receiving less SS) than poor people.

 

[Ziggy Stardust]

On an individual level, SS disincentivises having children. You no longer need any children to ensure you are provided in your old day, like was the case in the Pre-SS era.

Score one for SS!

If you're having kids so you'll have someone to provide for you, you shouldn't have kids. Not in the best interest of the kid to be concieved with that motivator.

This is however a perverse incentive. At the same time, SS is reliant on generations of the future to keep functioning. Who may not come in the amount needed, because of SS.

So people should work longer than they do now if they are capable, and we may have to increase what we have to chip in to keep society functioning.

 

[DinoDoc]

Of course you don't see anything morally gray. You didn't even think about the question. Who pays you 'your' money back? Who gets screwed?

If it is a retirement plan, it is my money. Paying it out to other people is an example of what in the private sector would send people before a judge. Ponzi schemes have been illegal for quite awhile after all.

I honestly don't know what means-testing is.

http://en.wikipedia.org/wiki/Means_test

 

[El_Machinae]

If it is a retirement plan, it is my money.

Yes. It's your money. There is no trust fund. That money was spent. It's been that way before you were born. Now, you want 'your' money back. Who gets forced to pay you back?

You're not acknowledging the question. I've already acknowledged you have a claim to that money, so who do we take money from (using force) to pay you back?

 

[Farm Boy]

There was something about cake.

 

[Timsup2nothin]

I honestly don't know what means-testing is. Canadian SS is very different, because it's subject to income tax. So are your withdrawals from your RRSP. Rich people will pay more tax (effectively receiving less SS) than poor people.

While that difference also exists in the US, it is pretty negligible here. If you are making little enough the benefits are not taxed. As you pass certain income thresholds more of the benefit becomes taxable, and that taxation does in effect reduce the benefits. But when you say 'this person is making three times as much as that person, let's start taxing part of their benefits' you are pretty far past what most people consider 'means testing'.

Means testing, at its extreme, looks at SS as a 'floor'. You contributed to the system, you worked hard, maybe you took bad risks and maybe you took no risks or maybe you just didn't plan ahead...here's the floor and you won't starve.

Without means testing SS isn't a floor, it's a step on a ladder. If things went badly, you have the bottom of the ladder because SS is the lowest rung. If things went okay you are a rung above. And if you inherited a fortune and that tiny rung at the bottom of the ladder is totally meaningless to you...we are going to collect from working people and give it to you anyway, but take some back.

The issue with means testing, of course, is where is a cutoff point? If someone has saved wisely enough that they can almost make it on their own do you give them just enough to reach the floor while giving a wastrel everything they need to reach a floor they contribute nothing to reaching themselves? What about someone who can get just barely above the floor on their own? Don't they deserve at least some of the propping up that other people are getting just to reach the floor? People in general hate the whole concept of a floor, because they think it encourages that wastrel.

I don't. I recognize that no one shoots for the floor, even though the majority do end up there. As long as I can be at the floor I don't feel any need to be propped above it, but if the risks I took to establish my own place had gone bad I was really happy to know that there was a floor, so I paid for it being there for the previous generation quite happily...or saved for it inefficiently at gunpoint, however you prefer to look at it.

 

[El_Machinae]

Oh, I see. It's pretty easy (here) to pay more in income taxes than you receive in SS. It becomes, really easily, a complete clawback. Any person with a reasonable pension will not (effectively) receive very much in gov't income.

 

[Timsup2nothin]

Oh, I see. It's pretty easy (here) to pay more in income taxes than you receive in SS. It becomes, really easily, a complete clawback. Any person with a reasonable pension will not (effectively) receive very much in gov't income.

Well, it could be seen the same here...unless I'm not understanding you.

I mean there are people who collect social security who can say 'this pittance doesn't even pay the taxes on my income'. But they do benefit from it offsetting the taxes on their income, and subjectively someone who actually has to live on that pittance would suggest they could bloody well do without it then and pay their taxes in full themselves.

I suspect it is harder here to reach the point where SS doesn't cover the tax though. I've never done the math, so the only guy I can say for sure fits that profile is Mitt Romney...who I am sure glories in every penny he receives from SS.

 

[onejayhawk]

There was something about cake.

Big Macs.

J

 

[Zkribbler]

Yes. It's your money. There is no trust fund. That money was spent. It's been that way before you were born. Now, you want 'your' money back. Who gets forced to pay you back?

You're not acknowledging the question. I've already acknowledged you have a claim to that money, so who do we take money from (using force) to pay you back?

There is a trust fund. Since SS inception, the Fund has been legally required to invest everything in US Savings Bonds. Not only has that money not "been spent," we're just getting to the point now where benefit payments will be exceeding income from taxes and interest payments on the bonds.

Unlike retirement plans, there are no individual accounts. Employees and employers pay payroll taxes into a trust fund; benefits are paid out according to certain specifications. For example, after fully vesting in social security, I entered public service. For the last ten years of that, I paid into a government pension fund. The presents of a government pension triggered a "windfall avoidance" provision, and my right to Soc. Sec. benefits was cut by about 90%.

 

[Timsup2nothin]

There is a trust fund. Since SS inception, the Fund has been legally required to invest everything in US Savings Bonds. Not only has that money not "been spent," we're just getting to the point now where benefit payments will be exceeding income from taxes and interest payments on the bonds.

Unlike retirement plans, there are no individual accounts. Employees and employers pay payroll taxes into a trust fund; benefits are paid out according to certain specifications. For example, after fully vesting in social security, I entered public service. For the last ten years of that, I paid into a government pension fund. The presents of a government pension triggered a "windfall avoidance" provision, and my right to Soc. Sec. benefits was cut by about 90%.

In short, the 'trust fund' has been loaned to the US government, which is bankrupt in every way except for their ability to print money. There is no trust fund.

 

[Zkribbler]

In short, the 'trust fund' has been loaned to the US government, which is bankrupt in every way except for their ability to print money. There is no trust fund.

Like any trust fund, the SS trust fund invests its assets. It holds securities, in this case bonds. These bonds are AAA rated, the safest investments in the world.

"Bankrupt" is a legal term involving court action; you mean "insolvent." However, "insolvent" means unable to pay bills as they come due. The US has no difficulty in paying its bills.

The paying of bills has almost nothing to do with quantitative easement. That is a Fed tool used to achieve its two goals: maximizing employment while minimizing inflation.

What you really need to look at is the government's ability to tax...after all, taxation is the main method of raising revenues. There is LOTs of leeway to tax. For example, it we were to return to Clinton-era tax rates on income, the budget would be in surplus again.

 

[Timsup2nothin]

What you really need to look at is the government's ability to tax...after all, taxation is the main method of raising revenues. There is LOTs of leeway to tax. For example, it we were to return to Clinton-era tax rates on income, the budget would be in surplus again.

You are talking to the champion of arguing that we need to attack the deficit from the revenue side...but...

It might be accurate that a return to Clinton era rate schedules would put us in surplus. That's a whole lot of math to prove or disprove and I'm not up for it.

But just taking your word for it and running...the biggest contribution to making that true is that the cut points for marginal rates would be spun back against 15 years of inflation. So anyone of any substantial income, and I don't mean overpaid top end, I mean anyone, would be over the top bracket line. A married couple where they both work for minimum wage would hit the third step.

If you reinstate rates from before good time Bush gave away the farm, but use the same inflation adjustments, you do get more revenue, but nothing like a surplus. You do however have some chance of collecting it without breaking three quarters of the population.

All that said, calling US treasuries a safe investment for the amount of money in the theoretical trust fund is really reaching, because current conditions show no way to meet the obligation short of devaluing the currency. That devaluing is almost a certainty at some point, either abruptly or at least over short enough time to screw bond holders...China I'm lookin' at you.

 

[El_Machinae]

There is a trust fund.

Yes, I know. It's basically guaranteed due the willingness to tax future generations. I'll never deny that SS is awfully safe. In fact, I said it was a (reasonably) stable Ponzi scheme. It's stable because SS 'pays' such a low return, all told.

Now, Dinodoc wants his money back. He refuses to answer, but his money has gotta come from somewhere. Someone is gonna get screwed. Now, he'll just force his kid to pay back those bonds so that he gets 'his' money back. Or, he might not force his kid to do it, he's just not answered the question of 'who gets screwed'? Who pays in, but gets nothing back?