>
> "Alan Lichtenstein" wrote in message
> news:k_idnZUtdpniC5zbnZ2dnUVZ_rOqnZ2d@rcn.net...
>
>> Jerry Okamura wrote:
>>
>>>
>>> "Alan Lichtenstein" wrote in message
>>> news:tfidnUc_0cbj9J3bnZ2dnUVZ_q6vnZ2d@rcn.net...
>>>
>>>> Jerry Okamura wrote:
>>>>
>>>> ( previous post snipped- follow thread )
>>>>
>>>>>>> I don't know what the math tells us, but the way I look at all of
>>>>>>> this is based on the simple fact that social security does not
>>>>>>> have the money to meet the promises it made, and someone at some
>>>>>>> future time is going to pay the price.
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> Jerry, if you don't know what the math tells you, then you should
>>>>>> not make evaluative assertions regarding that which you do not know.
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> Well, I depend on what the trustee of the Social Security
>>>>> Administration is saying about the matter....are they inaccurate in
>>>>> their assessment?
>>>>
>>>>
>>>>
>>>> I do not believe the trustees ever said anything with regard to the
>>>> Bush plan. So, since they said nothing about it, then what you post
>>>> above is really not germane.
>>>
>>>
>>>
>>> No they did not. But they did say that the program is fiscally
>>> unsound. If we take that as a given, then it becomes a matter of what
>>> is the best way, with the least amount of pain (because there will be
>>> pain) to both the people who contribute to the plan, and those who
>>> will eventually become the beneficiaries of the plan. My contention
>>> has been, that "if" people could set aside part of their
>>> contributions to the plan, into a private account, that "if" it works
>>> out as planned, then the funding solution becomes a little easier,
>>> since some segment of the beneficiaries are not going to be as
>>> serverly impacted by whatever changes are made to the plan, for the
>>> simple reason that they do not depend on what happens to the plan as
>>> much as someone who has not taken advantage of the set aside.
>>
>>
>> Jerry, the simple fact is that the shortfall needs to be made up.
>
>
> That is what I said didn't I?

Not fully. You seemed to allude that people could and should be responsible for it regardless. However, I'm glad you clarified your paragraph. Apparently I got the wrong impression.

> The
>
>> only issue is WHO will pay to make it up. Should it be the taxpayer,
>> The Government, Wall Street, or some combination thereof?
>
>
> The sixty four thousand dollar question.

I answered it below.

>> I vote for Wall Street to make up the majority, through the
>> establishment of a Government invested trust, similar to virtually
>> every state public employee pension fund, the Government and taxpayers
>> to make up the remaining difference.
>
>
> How would Wall Street make up the difference? How big would that
> difference be?

Wall Street would make up the difference because if the surplus was invested, market returns would make up close to 50% of it with little or no risk to each individual participant.

>>>>>> As far as your second assertion, you are absolutely correct. But
>>>>>> my assertion did not dispute that; it only spoke to the failure of
>>>>>> the Bush plan to address the shortfall, merely transferring it to
>>>>>> the foolish individual who bought his fuzzy math.
>
>
> NO ONE, since this darn program was created, has come up with a
> permanent solution to the funding problem. They have succeeded in
> making it harder to solve the problem, but they sure as heck have not
> solved the problem....have they?

Jerry, you've ignored my question. OK if you don't want to speak to it. I'll let you run away from it.

>>>>>> When that day happens, how our legislators determine
>>>>>>
>>>>>>> how big the pain will be and to whom, will be determined by how
>>>>>>> exposed people are. My argument has been that assuming the Bush
>>>>>>> plan had been approved and "if" it did deliver as promised, then
>>>>>>> those who decided to participate in the plan, would not be
>>>>>>> serverely affected by any needed changes to the plan, since the
>>>>>>> government cannot touch that part of the plan.
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> Au contraire. Instead of Government being responsible for the
>>>>>> shortfall, THEY would now be responsible. Under the Bush plan.
>>>
>>>
>
> Who is THEY?

Every individual fool who buys into the Bush Plan.

>>> Yes, but then it is not the Government's fault, it is the persons
>>> fault. Unless the government then wants to "bail them out", which I
>>> would not be in favor of.
>>
>>
>> Indeed they would, Jerry. If they're stupid enough to accept the
>> Government's debt and its responsibility to pay that debt.
>
>
> Now, I am a cynic, and you just beat me hands down

Hardly, Jerry. I just won't permit the wool to be pulled over my eyes and easily fooled, as do those who support the Bush Plan.

>>>>> How? "if" I set aside 2% of my contributions to Social Security
>>>>> and put that money into say a balanced mutual fund, why should the
>>>>> government be responsible for my own investment decisions?
>>>
>>>
>>>
>>> I never said the government should be responsible....
>>>
>>>>
>>>> Social Security, if left unaltered will only be able to pay 70% of
>>>> the promised benefits in 2040, assuming the funding mechanism
>>>> remains the same. That being 6,2% employee contributions and 6.2%
>>>> employer contributions, for the Social Security component. 12.4% of
>>>> your contributions( employer plus employee ) should fund 100% of
>>>> your benefit, but if left alone, those amounts will only fund 70% of
>>>> the benefit. Now, Bush intends to allow you to take 2% of your
>>>> contributions to put into a private account, leaving you with only
>>>> 84% of your Social Security required contributions. That remaining
>>>> 84% will fund only 58.8% of the promised benefit. Thus, your
>>>> 'privatized' account will have to earn that missing 41.2%. Since
>>>> under the old plan, the government would have been responsible for
>>>> funding the missing 30%. Now, Bush has made YOU responsible for it,
>>>> and in fact, even increased it.
>>>
>>>
>>>
>>> Pay me now, or pay me later...it doesn't really matter....
>>
>>
>> Jerry, Jerry, Jerry, don't you see that under the Bush plan he gets
>> you to pay his debt under the guise of 'controlling your own
>> investments? If Bush said that he'd pay you 84% of the promised
>> benefit, which he should since you're taking 16% of the funding, it
>> would be something to consider. But he isn't. Are you that Greedy or
>> suspicious of Government that you can't see that?
>
>
> I was not addressing the short term problem, I was addressing the long
> term problem, which you admit there is....

And I was speaking to the Bush Plan, which I thought we both were. Apparently you are not.

>>>>>> So, since there is some segment of the Social Security plan that
>>>>>>
>>>>>>> cannot be touched, that makes it easier to deal with the issue of
>>>>>>> the funding shortfall and how to address that.
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> Not necessarily, Jerry. Someone has to pay for the shortfall.
>>>>>> Even if the entire Social Security surplus was invested from now
>>>>>> to 2018, it would only be sufficient to cover half of the
>>>>>> shortfall. The remaining half would have to come from somewhere
>>>>>> else.
>>>
>>>
>>>
>>> Yep, which only means that they have a shorter time to try and tinker
>>> with the funding shortfall....
>>
>>
>> More reason to raise general taxes, get the surplus back and begin to
>> retire the treasury notes held by Social Security, giving it more
>> money to invest and further reduce the shortfall.
>
>
> What do you think the odds of that happening anytime soon.

Little to none, because people want a free lunch, and there just isn't any. And there's no politician to stand up and tell them that.

Besides, how
> much added revenue would you actually have to obtain in order for the
> program to have as much money coming in as going out?

If 50% of the debt could be retired through investment of the surplus given current return estimates, then simply rescinding the ill-advised Bush tax cuts would likely accomplish that.

And what do you
> think are the odds, that even if they had such a plan, that they would
> not then think about adding a few more sweateners to give seniors even
> more money, which then brings us back to the position we find ourselves
> in at the present time?

Seniors could retain the cost of living increases built into the plan with no difficulty.

>>>>> Only, if the government decides to get involved in protecting my
>>>>> "choices".... I would not be in favor of that either....
>>>>
>>>>
>>>>
>>>> Social Security would form the largest, and most likely, the most
>>>> secure fund around, and would give you the best return that you
>>>> could get under those circumstances. You are looking for bugaboos
>>>> that simply don't exist. You cannot do better than the myriad of
>>>> professional managers, and you're foolish to think you can.
>
>
> It is secure because it depends on the taxpayer, and it is secure
> because it depends on the people who are working now, to pay for those
> who are not working anymore.

Wrong. That's exactly why it isn't secure. There simply is not enough money coming in to pay for the money going out. If the surplus was invested, to give additional income, not presently available, we'd be far better off.

But that is going to be awful hard to keep
> up, when the rubber hits the road, and the outgo is far greater than the
> inflow, and if the number of workers who currently are needed to pay for
> us seniors decreases even more than projected.

That's why the funding mechanism needs to be changed.

>>> Doesn't that depend on how much money it takes to pay the benefits
>>> promised.
>>
>>
>> No, Jerry. In fact if Social Security was funded like an annuity, it
>> would likely earn sufficient revenues to pay BETTER benefits that it
>> now does.
>>
> You keep saying that, but it is not funded like an annuity, is it?

No. I have proposed a mechanism to make it so.

>> It seems to me, I read recently that some 40% of total
>>
>>> government spending is going toward the three big entitlement
>>> programs and as a percentage of total government spending it is
>>> getting bigger and bigger with each passing year. Which means that
>>> it is squeezing out all other spending priorities. At what point does
>>> it get to the point where it really starts to hurt?
>>
>>
>> We're not talking about Government spending, Jerry. We're limiting
>> ourselves to Social Security. What you post above is another matter.
>
>
> Two of the three big entitlement program are for us seniors. It is
> Social Secuirty and Medicare.

Regardless, we're still talking about Social Security. Medicare is another issue.

>>>> So, your suspicions will cost you money; a great deal of it.
>>>>
>>>>>>>> Had the plan gone through, I would have
>>>>>>>>
>>>>>>>>> told my daughters to take advantage of that 2% option.
>>>>>>>>
>>>>>>>>
>>>>>>>>
>>>>>>>>
>>>>>>>>
>>>>>>>> You would have given your daughters better advice by telling
>>>>>>>> them to sharpen their math skills.
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>
>>>>> They are very good at math, they do not need my help in that area.
>>>>
>>>>
>>>>
>>>> Then maybe they can explain to you why this is a bad deal.
>>>
>>>
>>>
>>> They haven't.
>>
>>
>> Then ask them to. If they can't explain why the math is bad, perhaps
>> their math skills are not as substantial as you believe. I posted a
>> very simple explanation above. They should be able to come to the
>> same conclusions.
>
>
> Or their math skills are far superior to yours?

Likely inferior if they neglect that which I post.

>> Besides, from an individual standpoint, it cannot
>>
>>> possible be a bad deal.
>>
>>
>> Jerry, I just explained to you above why it is a bad deal. Did you
>> not understand the math? Do you not understand that by agreeing to a
>> private account you get to take on the Government's debt for the
>> shortfall? You think taking on someone else's debts is a good thing?
>> You think it's in your interest?
>
>
> Total foolishness.

The only foolishness appears to be your inability to understand.

When I invest my money, the only thing I am
> concerned about is what is the return on investment vs. the risk, and am
> I better off in the long term, by making such a decision.

Exactly, Jerry. But in order to get to that point, you have to accept the shortfall as part of YOUR risk, NOT the program's. You seem to have a hard time understanding that.

>> Can you explain why it would be a bad deal for
>>
>>> an individual?
>>
>>
>> See above. And if you still don't understand, I have a bridge to sell
>> you. Cheap.
>
>
> Let me ask you a simple question. Do you have ANY money in the
> instrucments we are talking about?

What has that got to do with the price of tea in China? My private resources don't have anything to do with how Social Security functions, or doesn't function.