Obama: Social Security Fix Would Be Simple

[Abracadabra]

The system is funded with a tax on earnings, up to $109,000 a year. Obama says lifting that cap to tax a larger share of income would be one way to extend the system of monthly payments for retirees.

The real need behind obama solution is more money is needed for the government to spend while hiding it behind the need to pay Social Security retirees beyond 2018. Do not believe it than......look at what has happen over the last 35 years......read the following......

A problem is the federal government wasn’t allowed to actually save this money. Since 1939, federal law has required Social Security to “invest” its extra money in Treasury bonds. In other words, the government lends the money to itself. Those funds are then mixed in with all other tax revenue and spent on programs such as education, foreign aid and defense.

So in 2018, when the Social Security program tries to redeem these bonds, the Treasury (having already spent that money over the previous 35 years) won’t be able to repay Social Security from any pre-existing store of cash. Taxpayers will be forced to pay extra taxes in order to fund Social Security’s 40 million retiring baby boomers.

It’s like a family that borrows money from its retirement fund each year to pay for vacations and expensive dinners. When they finally retire, their retirement fund consists of nothing more than paper IOUs.
         
Some observers erroneously blame the budget deficits for the empty trust fund. Critics regularly assert that any policy increasing the budget deficit would mean “more money taken from the Social Security trust fund.”

That claim is also wrong. The Social Security surplus is spent each year regardless of whether the budget is in surplus or deficit. When the federal budget is in deficit, the Social Security surplus funds current government programs. When the budget is in surplus, the Social Security surplus pays down the national debt. Either way, nothing is saved for future retirees.


Elections has consequences...become informed on the issues and the candidates before voting.

[grantpk]

The system is funded with a tax on earnings, up to $109,000 a year. Obama says lifting that cap to tax a larger share of income would be one way to extend the system of monthly payments for retirees.

Twisting the facts again! (I realize you were quoting an AP report verbatim, but nevertheless, it's still misstating the facts.)  Obama didn't say it was a way to "fix" the system.  He said, in part, "The fixes that are required, are not huge.  ... we could make adjustments to the payroll tax; for example -- I'll give you just one example -- the payroll tax..." and then goes on to explain how raising the limit would help raise more revenues for social security.   Admittedly, he did say that "... then, Social Security would be there well into the future; and it would be fine.", but one would interpret it as meaning that taxing the incomes above $109,000 would be a total fix to the system only by taking the quote out of context.

Now, about the social security surplus.  You are correct in that the surpluses have been invested into Treasury bonds, and when SS needs to redeem those bonds, the government is going to have a problem raising the cash.  However, before ranting or being overly critical, about the issue one should have an answer to the question "what should the government have done with the surplus?"  Put it in a bank?  Hide under a mattress?  Invest it in the stock market?  I can think of negative aspects to each of these answers.  Do you have a reasonable idea as to what the SSA should do (or have done) with its surpluses?

And, as far as fixing the system, the real solutions include a combination of:

• Increase the revenues (taxes)
• Reduce the benefits
• Increase the age at which retirees can begin withdrawing (really part of #2)

None of the items are without problems, but something must be done, and soon.  The longer we wait, the more costly the fixes are going to be; if not in total, at least in the annual amounts to be paid for by our children.  Bush (GWB) introduced this problem but his proposed fix included privatizing portions of SS; a fix rejected by congress, thereby causing the entire proposal to fail.

[Abracadabra]

Twisting the facts again! (I realize you were quoting an AP report verbatim, but nevertheless, it's still misstating the facts.)  Obama didn't say it was a way to "fix" the system.  He said, in part, "The fixes that are required, are not huge.  ... we could make adjustments to the payroll tax; for example -- I'll give you just one example -- the payroll tax..." and then goes on to explain how raising the limit would help raise more revenues for social security.   Admittedly, he did say that "... then, Social Security would be there well into the future; and it would be fine.", but one would interpret it as meaning that taxing the incomes above $109,000 would be a total fix to the system only by taking the quote out of context.

Now, about the social security surplus.  You are correct in that the surpluses have been invested into Treasury bonds, and when SS needs to redeem those bonds, the government is going to have a problem raising the cash.  However, before ranting or being overly critical, about the issue one should have an answer to the question "what should the government have done with the surplus?"  Put it in a bank?  Hide under a mattress?  Invest it in the stock market?  I can think of negative aspects to each of these answers.  Do you have a reasonable idea as to what the SSA should do (or have done) with its surpluses?

And, as far as fixing the system, the real solutions include a combination of:

• Increase the revenues (taxes)
• Reduce the benefits
• Increase the age at which retirees can begin withdrawing (really part of #2)

None of the items are without problems, but something must be done, and soon.  The longer we wait, the more costly the fixes are going to be; if not in total, at least in the annual amounts to be paid for by our children.  Bush (GWB) introduced this problem but his proposed fix included privatizing portions of SS; a fix rejected by congress, thereby causing the entire proposal to fail.

Twisting the facts again!

Guess this means I was twisting the facts and AP misstated the facts.

Obama didn't say it was a way to "fix" the system.

This could be considered twisting and misstating the facts. Here is the part of obama's speech that applies....notice the underline words...

So that would just be one example. That's not the only way of fixing it, but if you made a slight adjustment like that, then Social Security would be there well into the future and it would be fine. All right? (Applause.)

I agree that ….obama didn't say it was a way to "fix" the system....obama said “That's not the only way of fixing it.”

Looks to me like he implied that “it was a way to "fix" the system”and there is not much difference between “a way to fix” and “not the only way of fixing”......guest that is twisting the facts. Oh well, I am just a dumb*ss non-disciple of the Messiah.

Obama's fix of SS is to raise taxes on people earning less than $250,000. This increase is not to fix SS, is it to give the government more money it can use for the future health care bill and other government entitlement programs. They d*mn sure will not invest in a descent plan.

The filth rich who by the way provide 90% of the jobs will not continue to being screwed. These people are leaving states like NJ and CA because of the screwing they are getting and guess what the every increasing federal screwing will cause.

  Bush (GWB) introduced this problem but his proposed fix included privatizing portions of SS; a fix rejected by congress, thereby causing the entire proposal to fail.

Of course, they rejected it because it meant the start of the lose of control of votes for them.

Do you have a reasonable idea as to what the SSA should do (or have done) with its surpluses?

It appears congress does not have a reasonable idea as to what to do with the SSA (or have done)surpluses instead they spent it like drunken sailor.  Policymakers should consider harnessing the power of private investment and compound interest. Although this is the correct approach, it is important to ensure that a pre-funded system is not hijacked by the political process so that politicians or their appointees take control and are able to steer investments to politically favorable businesses, their cronies, or their campaign contributors.

The safest way to protect the money of workers for their future retirement is to have a portion of their Social Security payroll taxes invested by professionals from the financial services industry. Not only do these professionals have the knowledge and the incentive to invest the money wisely, they also are legally obligated to act in the best interests of the workers in their fund.

[grantpk]

Obama's fix of SS is to raise taxes on people earning less than $250,000.

err, then what did he mean by "-- maybe you hold people harmless till they make $250,000 a year, but between $250,000 and a million or something, they start paying payroll tax again --"?  Could it be his campaign promise not to raise taxes for those earning less than $250k?

The safest way to protect the money of workers for their future retirement is to have a portion of their Social Security payroll taxes invested by professionals from the financial services industry.

This is a matter of opinion, and one with which I do not agree. 

First, the stock (as well as bond) markets fluctuate over time and the results to any individual will depend on luck; i.e., where the market stands at the time funds are being withdrawn.  I do not consider that safe.

Second, in spite of their claims, the professionals' record is not significantly better than the market averages, and there are large gaps between the poorest and best fund managers.  I have had long term investments in some mutual funds who claim to have returns of X% but when I checked my earned returns over the period they cite, the were significantly smaller than their claims.  I suspect some sort of an accounting gimmick -- similar to how the banks use methods to compute their credit card interest APR's that are smaller than the actual percentages.

Third, the social security program is there to give people the means to provide basic food and shelter in their retirement.  For those for whom SS is the only source of income, market fluctuations are simply not acceptable.

Fourth, if a person wants to participate in the better overall returns of the stock market, he or she is allowed to invest into IRA's, 401k's, and other similar programs.  There is no need to place portions of their SS funds into the market.  Remember, SS provides the safe basic portion of retirement income.

There are other reasons also, but the above illustrate the basic idea behind our social security system.

[Abracadabra]

err, then what did he mean by "-- maybe you hold people harmless till they make $250,000 a year, but between $250,000 and a million or something, they start paying payroll tax again --"?  Could it be his campaign promise not to raise taxes for those earning less than $250k?

This is a matter of opinion, and one with which I do not agree. 

First, the stock (as well as bond) markets fluctuate over time and the results to any individual will depend on luck; i.e., where the market stands at the time funds are being withdrawn.  I do not consider that safe.

Second, in spite of their claims, the professionals' record is not significantly better than the market averages, and there are large gaps between the poorest and best fund managers.  I have had long term investments in some mutual funds who claim to have returns of X% but when I checked my earned returns over the period they cite, the were significantly smaller than their claims.  I suspect some sort of an accounting gimmick -- similar to how the banks use methods to compute their credit card interest APR's that are smaller than the actual percentages.

Third, the social security program is there to give people the means to provide basic food and shelter in their retirement.  For those for whom SS is the only source of income, market fluctuations are simply not acceptable.

Fourth, if a person wants to participate in the better overall returns of the stock market, he or she is allowed to invest into IRA's, 401k's, and other similar programs.  There is no need to place portions of their SS funds into the market.  Remember, SS provides the safe basic portion of retirement income.

There are other reasons also, but the above illustrate the basic idea behind our social security system.

err, then what did he mean by "-- maybe you hold people harmless till they make $250,000 a year, but between $250,000 and a million or something, they start paying payroll tax again --"?  Could it be his campaign promise not to raise taxes for those earning less than $250k?

Err, the key word is “maybe”.
Err, err, how do you hold people harmless from $109,00 till they make $250,000?? Does that mean no increase in tax rate until $250,000?? If so, why did he beat around the bush (not GW)? Why not say increase the tax rate increase will start at $250,000....not beating around the bush (or not beating up GW) is not his style. He wants to be able to say that "I did not say that or what I meant was...."
Anyone who makes money is not always stealing it from someone else only the government does that. In a free market, wealth is created and is constantly expanding and the free market lifts the economic conditions of all men and the creativity, ingenuity and hard work of the self-made millionaire's who creates better products or a better service, will creates a better life for all mankind.

This is a matter of opinion, and one with which I do not agree.

Reminds me of those Congressional Idiots that say to the voters.. “That is a matter of opinion, and one with which I do not agree, so I am going to do as I want”.
William F. Buckley once famously declared that he would rather give control of our government to “the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University.”
The opinions (which I share) from articles that I have post, are good solid opinions by professionals in these areas and know a lot more than I..but guess that does not include you. I am sorry that the facts of logic and history do not support the agenda you are seeking to advance.

Second, in spite of their claims, the professionals' record is not significantly better than the market averages, and there are large gaps between the poorest and best fund managers.

Because PRAs (personal retirement account ) would earn higher returns than the current 100 percent government-paid system can afford to pay.
The experience of over 25 countries shows that PRA systems can be structured to deliver improved benefits in a cost-effective way.

Remember, SS provides the safe basic portion of retirement income.

For you and me that may be true but for many it is not.
For older workers, nearly 30% had no personal retirement savings — zip, nada — according to a recent analysis by benefits consultants Watson Wyatt, which reviewed data from the 2007 Survey of Consumer Finances (the most recent available). Those non-savers were mainly low-income households, but even among middle- and upper-income groups, retirement wealth was "generally inadequate," say the consultants



 THE ABOVE IS A POST FROM SOMEONE WHO DOES NOT      NOR    WITH BARACK OBAMA KOOL-AID JUST ADD  *NUTRAHOPE!






*NUTRASWEET-ARTIFICIAL SWEETNER----NUTRAHOPE-ARTIFICIAL HOPE!

[grantpk]

The opinions (which I share) from articles that I have post, are good solid opinions by professionals in these areas and know a lot more than I..but guess that does not include you. I am sorry that the facts of logic and history do not support the agenda you are seeking to advance.

Ooh, but they do.  Read on.

The experience of over 25 countries shows that PRA systems can be structured to deliver improved benefits in a cost-effective way.

Yes, I agree that, when considering the overall (and averaged) returns of PRA's, it does give slightly greater income to retirees.  However, that is true only if the retirement timing is correct -- which admittedly is true more often than not.  But if the program would have been in effect all along, what would have happened to the people who had retired in 2009, 2008, 2006, 2005, 2004, 2003, 2002, 2001, 1998, or 1988?  They would not have done very well; although, I'll admit that in the other years they would have gained nicely.

I did a study of some of the more popular mutual funds past performances and they showed considerable variance between the "professionals".  For example:

SYMBOL	FUND	TEN YR ANNUAL AVG RETURN
PRGFX	T. Rowe Price Growth Stock	1.12%
PRDX	T. Rowe Price Dividend Growth	2.77%
FBGRX	Fidelity Blue Chip Growth	-2.28%
GCMX	GCM Focus	18.81%

It is interesting that the best fund, GCM Focus, would have produced the outstanding result only if the investor timed the purchases just right.  According to a Morningstar article, the average investor would have lost 16.8% instead of gaining 17.84%.  (The discrepancy in the gain percentages - 17.84 vs. 18.81 - is due to a slightly different dates on which the computations were made.)

Another article by Motley Fool discusses the discrepancy I mentioned in my previous post of how the claimed gains differ from the actual realized investor returns.  The point here is that most people who need the extra income in their SSA monthly checks do not know which fund they should pick, and, even the rare ones who might have done some research, may have been misled by the exaggerated claims of fund returns.  And finally, even the most expert investor may still fall into the trap created by market conditions.

And another issue, mentioned at the beginning, is that the gains obtained by these "professionals" is not as good as many people believe.  And one more:  Past performance record does not guarantee the future.

[Abracadabra]

Ooh, but they do.  Read on.

Yes, I agree that, when considering the overall (and averaged) returns of PRA's, it does give slightly greater income to retirees.  However, that is true only if the retirement timing is correct -- which admittedly is true more often than not.  But if the program would have been in effect all along, what would have happened to the people who had retired in 2009, 2008, 2006, 2005, 2004, 2003, 2002, 2001, 1998, or 1988?  They would not have done very well; although, I'll admit that in the other years they would have gained nicely.

I did a study of some of the more popular mutual funds past performances and they showed considerable variance between the "professionals".  For example:

SYMBOL	FUND	TEN YR ANNUAL AVG RETURN
PRGFX	T. Rowe Price Growth Stock	1.12%
PRDX	T. Rowe Price Dividend Growth	2.77%
FBGRX	Fidelity Blue Chip Growth	-2.28%
GCMX	GCM Focus	18.81%

It is interesting that the best fund, GCM Focus, would have produced the outstanding result only if the investor timed the purchases just right.  According to a Morningstar article, the average investor would have lost 16.8% instead of gaining 17.84%.  (The discrepancy in the gain percentages - 17.84 vs. 18.81 - is due to a slightly different dates on which the computations were made.)

Another article by Motley Fool discusses the discrepancy I mentioned in my previous post of how the claimed gains differ from the actual realized investor returns.  The point here is that most people who need the extra income in their SSA monthly checks do not know which fund they should pick, and, even the rare ones who might have done some research, may have been misled by the exaggerated claims of fund returns.  And finally, even the most expert investor may still fall into the trap created by market conditions.

And another issue, mentioned at the beginning, is that the gains obtained by these "professionals" is not as good as many people believe.  And one more:  Past performance record does not guarantee the future.

Yes, I agree that, when considering the overall (and averaged) returns of PRA's, it does give slightly greater income to retirees.  However, that is true only if the retirement timing is correct -- which admittedly is true more often than not.  But if the program would have been in effect all along, what would have happened to the people who had retired in 2009, 2008, 2006, 2005, 2004, 2003, 2002, 2001, 1998, or 1988?  They would not have done very well; although, I'll admit that in the other years they would have gained nicely.

Need I say more?? Every year can not be a golden year for anyone or anything!!! We have to try (at the minimum) to break even, which is more than will happen when the government becomes involved...as in the situation with the Social Security Trust Fund.

And another issue, mentioned at the beginning, is that the gains obtained by these "professionals" is not as good as many people believe. 

Gains obtained by these "professionals"will be a h*ll lot better than an individual investing in the market on their own knowledge (unless he/she is a professional in this area) and that includes you and I.

And one more:  Past performance record does not guarantee the future.

The only guarantee for the future is death.

I am sorry that the facts of logic and history do not support the agenda you are seeking to advance.



 THE ABOVE IS A POST FROM SOMEONE WHO DOES NOT      NOR    WITH BARACK OBAMA KOOL-AID WITH OR WITHOUT NUTRAHOPE!!






*NUTRASWEET-ARTIFICIAL SWEETNER----NUTRAHOPE-ARTIFICIAL HOPE!

[deb]

So Grant, you are OK having a person who makes more than $250K cover your retirement benefits?

I'm not.  It will be our children and grandchildren paying the additional taxes, and I would much rather see MY children and grandchildren have to ability to manage for their own retirement.  I don't want to see them paying for the "sins of the fathers".

Also, this proposal is a direct redistribution of cash funds.  The benevolent government wants to take cash from the successful and disburse it to those who "need" it.

I do not make $250K per year, but simple pride keeps me from wanting someone else to fund my old age.  To approve of the government taking money away from someone else to give it to me is a proclamation that I failed to take care of myself and the government failed to take care of the SS taxes I paid in over the last 25 years.

I have a suggestion - keep SS mandatory, but let people draw against what they paid in and what their employers paid in on their behalf.  No pay in, no pay out.  You have $50k in credits, you and/or your family get $50K in benefits.  Oh, that would never work because it makes each of us responsible for our own financial well being.

[Abracadabra]

I do not make $250K per year, but simple pride keeps me from wanting someone else to fund my old age.  To approve of the government taking money away from someone else to give it to me is a proclamation that I failed to take care of myself and the government failed to take care of the SS taxes I paid in over the last 25 years.

AF*CKINGMEN....Sorry Heavenly Father..but the devil liberals made me do it.