Welfare question

[piezoe]

When I was young I knew practically nothing about social security, how it worked, etc. All I knew is that I was required to pay into it, and after I got to a certain age I could draw a pension from it. There is far more to know.

In recent years, since I now get a nice check every month from social security, although mine gets taxed rather heavily, I have learned much more about social security. I learned that it is rather brilliant in both concept and execution. Kudos to that very bright guy who was asked to devise it during the Roosevelt administration. It very well may be the best of all government programs. I would suggest that all of you not do as I did, but instead take time to learn about its various features while you are young. You'll be impressed with how sensible the system is and its great benefit to American citizens. Spend some time exploring the social security website.

I have posted extensively on the trade-offs between social security and private retirement plans. Those of us of means are very fortunate to have the best of both worlds available to us -- we have both social security and private retirement plans. There are many though that are not so fortunate, and for those, social security is a godsend. But rest assured, it is a good deal for all of us.

 

[brokerboy]

you put a penny in and get a dollar out. its as genus as the fed chair bailing out the banks getting stock than buying all the bad mortgages and bonds in the market than selling stock in the market for a profit and ending the story there.

Quote from piezoe:

When I was young I knew practically nothing about social security, how it worked, etc. All I knew is that I was required to pay into it, and after I got to a certain age I could draw a pension from it. There is far more to know.

In recent years, since I now get a nice check every month from social security, although mine gets taxed rather heavily, I have learned much more about social security. I learned that it is rather brilliant in both concept and execution. Kudos to that very bright guy who was asked to devise it during the Roosevelt administration. It very well may be the best of all government programs. I would suggest that all of you not do as I did, but instead take time to learn about its various features while you are young. You'll be impressed with how sensible the system is and its great benefit to American citizens. Spend some time exploring the social security website.

I have posted extensively on the trade-offs between social security and private retirement plans. Those of us of means are very fortunate to have the best of both worlds available to us -- we have both social security and private retirement plans. There are many though that are not so fortunate, and for those, social security is a godsend. But rest assured, it is a good deal for all of us.

 

[piezoe]

Quote from brokerboy:

you put a penny in and get a dollar out. its as genus as the fed chair bailing out the banks getting stock than buying all the bad mortgages and bonds in the market than selling stock in the market for a profit and ending the story there.

You may put a penny in and get a half cent out or you may get 1.5 cents out. It depends. It is sound on an actuarial basis. Those who die younger subsidize those who live longer. The amount you get out depends on how much you contributed during your most recent 35 years of employment and, of course, on how long you live. Your contributions earn interest.

It's a defined benefit plan based on actuarial calculation. Please go to the social security website and become informed.

The disability part of social security has a separate trust fund and is in a bit of trouble because the number of people being declared disabled is higher than anticipated. (There seems to be some successful cheating, in spite of strict requirements. Some seeking disability status are hiring lawyers that specialize in getting there clients qualified. You're not qualified, for example, if your disability is self-inflicted --alcoholism or drug use-- yet some hide this successfully with help from attorneys.) The pension Trust, a separate Trust has nearly 3 trillion in it, but the problem for it is that, because of deficit spending in the discretionary budget, the Treasury will have to borrow to pay the Trust what it owes when the Trust needs to redeem its bond holdings. The actuaries have called for a two cent increase in contribution rate, one cent employee and one cent employer, to adjust for demographics, but Congress has dragged its heels on enacting the change. Blame Congress, not Social Security.

 

[brokerboy]

i don't have a problem with social benefits but if you don't believe the youth of america does not get left the debt of ss and medicare your dreaming. do you really think the system can continue for the youth when it takes about 4 workers to cover 1 person on ss? we are not even touching medicare yet. the US debt has run up to 16 tillion now and a college education for 200k does not even promise a decent job. when you bought a house 40 years ago it was a years pay but how it can be 10 years pay. you now need 2 incomes in a lot of homes to cover bills but 40 years ago one typically covered that. your not looking at how you set up the world for the next generation that's more of the point i am trying to make. also the people receiving the ss hold most of the wealth age wise. i am just pointing that its not a perfect system for everybody and it really was created at a time when the poorest class were the elderly. i believe in helping the poor i just don't see it as a perfect system like you do i guess.
http://www.pewsocialtrends.org/2011/11/07/the-rising-age-gap-in-economic-well-being/

also the interest word is a joke because they used that money to benefit you for roads, bridges, and whatever federal programs that were needed. your taxes never covered the government spending on people and people who were not even born have to pay those bills in the future. so your interest from ss is not even close to the interest owned to US bond holders like china.

ps i am not a republican i am very liberal and even share socialist views of caring for people.

Quote from piezoe:

You may put a penny in and get a half cent out or you may get 1.5 cents out. It depends. It is sound on an actuarial basis. Those who die younger subsidize those who live longer. The amount you get out depends on how much you contributed during your most recent 35 years of employment and, of course, on how long you live. Your contributions earn interest.

It's a defined benefit plan based on actuarial calculation. Please go to the social security website and become informed.

The disability part of social security has a separate trust fund and is in a bit of trouble because the number of people being declared disabled is higher than anticipated. (There seems to be some successful cheating, in spite of strict requirements. Some seeking disability status are hiring lawyers that specialize in getting there clients qualified. You're not qualified, for example, if your disability is self-inflicted --alcoholism or drug use-- yet some hide this successfully with help from attorneys.) The pension Trust, a separate Trust has nearly 3 trillion in it, but the problem for it is that, because of deficit spending in the discretionary budget, the Treasury will have to borrow to pay the Trust what it owes when the Trust needs to redeem its bond holdings. The actuaries have called for a two cent increase in contribution rate, one cent employee and one cent employer, to adjust for demographics, but Congress has dragged its heels on enacting the change. Blame Congress, not Social Security.

 

[Mav88]

Quote from piezoe:

I wasn't addressing all payroll taxes , I was addressing your statement: "If you are young your payrolls taxes are basically welfare for old poeple. There is no way you'll get it back." And specifically the last sentence of your statement.

I was not referring to income tax which is part of your total payroll tax. However with respect to medicare and social security your statement is only correct under specific circumstances. Social security fica taxes don't depend on whether you have dependent children, or how many, but your social security benefits may, depending on the options you choose when you begin to draw on it and also when you die. It is clear that your knowledge of the features of social security is incomplete, as is mine. The best way for you to familiarize yourself with social security is to go to the social security website. It is also possible for you to draw more from medicare than you paid in, but I did not address anything to do with that.

And it isn't at all clear that social security and medicare taxes are not a good deal for anyone under 50, as you assert. In fact your statement that it is not a good deal is flat wrong. Not only that, it is ridiculous, because a healthy person does not know when they will die, or if they will become disabled, or if they will leave dependents when they die; or how long they will live.

You are correct about some of the conditions under which you would do relatively better with regard to return on your social security benefits. Also, as someone who pays the maximum into social security, you subsidize to a small extent the low wage earner in the benefits formula. However even that is a good deal for you, but that's a topic for another day.
http://www.ssa.gov/survivorplan/onyourown.htm

It's quite clear that SSI is a bad deal for young people.

For workers full time, there is private disability insurance. For your familiy there is life Insurance. I'm not sure why you want to pretend that gov't is the only option.

In my case the numbers are staggeringly bad. My lifetime contribution (assuming work to 65, which I am not doing btw) would be near $450K, that's raw unadjusted. If you assume a modest 3% annual return had I kept the money, then it's closer to $600K.

The maximum payout is $2513 a month (which I will NOT get), I would need to live to 81 just to break even on principle, however I could purchase an annuity (age 65 with 50% survivorship) that pays $3000 a month with $600K even at todays crappy rates. There is no debate here despite your claims, SSI is a raw deal for young people who pay a lot into it.

To get the maximum of $2500 a month, you would have to pay the maximum from age 21 to age 66. Hardly anyone does that, but let's take a hypothethical 21 year old today. Assume that incomes and payouts are flat. He pays $12,500 a year for 45 years, that's $562,500. With a 3% compounded annual return it's $1.2M in the bank. With $1.2M he could buy an annuity that pays $6K a month. What a shitty deal.

You claim it's a great deal for people who earn less, prove it with numbers.

 

[oldtime]

some of these things we as a country decided to do because the alternative is worse

foriegn aid, doesn't make much sense to give millions to people that hate us, but it can be cheaper in the long run than a war

bankruptcy, keeps otherwise honest men from to resorting to a life of crime

social security, keeps the old people off the streets

welfare, keeps the orphanages from overflowing

 

[Mav88]

Quote from oldtime:

some of these things we as a country decided to do because the alternative is worse

foriegn aid, doesn't make much sense to give millions to people that hate us, but it can be cheaper in the long run than a war

bankruptcy, keeps otherwise honest men from to resorting to a life of crime

social security, keeps the old people off the streets

welfare, keeps the orphanages from overflowing

ok, just don't try and tell me what a great deal SSI is for me persoanlly or other young people, I am basically paying a hell of a lot more in welfare taxes and that's my point

 

[oldtime]

Quote from Mav88:

ok, just don't try and tell me what a great deal SSI is for me persoanlly or other young people, I am basically paying a hell of a lot more in welfare taxes and that's my point

it was never meant to be a great deal

just better than the alternative

there's a lot of pressure on employment right now, ssi takes some of that pressure off by removing the elderly from the workforce

easier to send an old person a small check, than figure out what to do with too many kids with no jobs available

 

[zdreg]

Quote from piezoe:

You may put a penny in and get a half cent out or you may get 1.5 cents out. It depends. It is sound on an actuarial basis. Those who die younger subsidize those who live longer. The amount you get out depends on how much you contributed during your most recent 35 years of employment and, of course, on how long you live. Your contributions earn interest.

It's a defined benefit plan based on actuarial calculation. Please go to the social security website and become informed.

The disability part of social security has a separate trust fund and is in a bit of trouble because the number of people being declared disabled is higher than anticipated. (There seems to be some successful cheating, in spite of strict requirements. Some seeking disability status are hiring lawyers that specialize in getting there clients qualified. You're not qualified, for example, if your disability is self-inflicted --alcoholism or drug use-- yet some hide this successfully with help from attorneys.) The pension Trust, a separate Trust has nearly 3 trillion in it, but the problem for it is that, because of deficit spending in the discretionary budget, the Treasury will have to borrow to pay the Trust what it owes when the Trust needs to redeem its bond holdings. The actuaries have called for a two cent increase in contribution rate, one cent employee and one cent employer, to adjust for demographics, but Congress has dragged its heels on enacting the change. Blame Congress, not Social Security.

taxes and more taxes to continue this ponzi scam.
why don't you look at the situation in greece and spain after their ponzi scams have collapsed.

_______________
it is laughable your writing about how walmart benefits because the minimum wage is too low and its workers are receiving welfare.
what they should do is make welfare have a job requirement for everyone.
the minimum wage is too high. inexperienced teenagers and unskilled adults cannot get jobs because of the minimum wage.

 

[Mav88]

Quote from oldtime:

it was never meant to be a great deal

just better than the alternative

there's a lot of pressure on employment right now, ssi takes some of that pressure off by removing the elderly from the workforce

easier to send an old person a small check, than figure out what to do with too many kids with no jobs available

It was a fantastic deal for the first generations since they had not paid in much.

what about the pressure on the national budget?