Monday, January 31, 2011

RE: Retirement Fun-for Boomers and Beyond

Mayberry said:

Ryan, Yep, the division/diversion campaigns have worked very well. You are still in bed with the system, therefore you lash out at those who've done nothing more than start to collect on that which they paid into their entire career. Your diatribe is best directed at the criminals who 1) created the Ponzi scheme to begin with, and 2) stole from the "trust fund" for decades, and 3) made promises to pay ever increasing "benefits" from that fund, knowing full well there was not enough money to cover those promises. For no other reason than selfish political gain...

But those truths seem to be lost on the right wing crowd, who have no problem forking billions into illegal wars of imperial aggression, while screaming for SS beneficiaries to have their funds cut.

SS is not "welfare". It WAS a retirement program, which, by the way, was (is) FORCED upon us working stiffs by, and has been aborted beyond it's original intent by criminal politicians. Do I like it? No. Do I want it? No. But I've been forced to pay into it for 20 years now, and like all the others who've paid, I damn sure expect to get back what I've put in, with INTEREST.

Will it be my sole retirement income? No. Hell, I doubt I'll ever be able to retire. But do I want to see my 80 year old Grandmother's SS go away? Hell NO! That, and a small pension from my Grandpa is all she's got.

Now to address you on your Dave Ramsey high horse: MAYBE if SS was not extracted from our pay by the barrel of a gun, folks could have planned better for their retirement. But they suck a hell of a big chunk of cash from our pay, reducing our ability to plan and save for ourselves. So maybe you want to rethink your "welfare" position. Maybe you want to open your eyes and SEE that the government WANTS people dependent on them. It's a self preservation thing you know. Most people, yourself included, refuse to recognize that little fact. Chew on that for a while...

TOR here:

Mayberry, You've got it twisted. Maybe I wasn't as clear as I could have been anyway moving on.

First and most importantly I am not looking at what I want to happen but what I see happening. The combination of impossible numbers/ demographics and changing political power situations will make drastic changes unavoidable. I know old ladies who rely on SS to live also and don't think it would be desirable in any way to change the income they depend on.

If I was the King of America (a hypothetical situation where I had wide sweeping powers to fix entitlements and such) here is what I would do. I would sit down with a bunch of economists and actuaries and such. We would figure out how much money is needed to pay for those collecting or about to collect SS benefits. The unfunded obligation would have to come from somewhere, really a whole bunch of places. Foreign aid, agricultural subsidies, and defense (foreign wars, bases and cushy defense contracts) are likely candidates.

As for figuring where exactly to draw the line for who would get SS benefits that is a toughy. We would have to look at what we could actually afford and balance that with an individuals ability to adjust their retirement plans (ie a 55 year old doesn't have a lot of time while a 30 year old does). I would like to say we could offer some sort of benefit to those in their early to mid 40's but imagine the numbers will actually support SS benefits for those in their  late 40's or even early 50's. Maybe some sort of individual retirement fund type thing with some money could be done for people who we can't fund SS for but will be seriously affected by this move.
As for if entitlements are welfare. I tend to classify entitlements as welfare because, despite forced contributions, the money that comes in (even if you factor out the money pulled into the general fund) doesn't equal the money going out. I don't think anyone can actually believe the money they pay into medicare covers the free market cost of insuring them through the most expensive years of their life. SSI paying widows and children vastly beyond what a wage earner may have made, let alone contributed is IMO welfare. Social Security minus SSI is a bit more  complicated. We would have to do some research and look at all kinds of tables, charts, etc. However lets say we had all that stuff and were sitting around in a nice quiet bar. I would wager the next round of drinks that some people, most likely low income ones who just made the required number of quarters, receive a payout that is dispurportionately generous when compared to what others receive. Maybe welfare is a poor word because it has a lot of stigma attached to it. Anyway lets focus less on one word and more on the big picture.
As for blame. There is so much to go around that most everybody can take a nice big bite. I blame the politicians who created the stupid program as well as the people who voted them in. Most of the folks meaningfully involved in that stuff are long dead. I don't blame individuals collecting Social Security because they are just doing what normal reasonable people would do. That would be like blaming a bank teller because a bunch of CEO's got the bank into mortgage backed security madness.

I am young enough that I've been paying in my whole working life knowing I will never get benefits. Seriously lighting a bunch of 20's on fire every payday would be way more entertaining. I could light a cigar with a hundred dollar bill somewhat regularly which would be kinda cool too.

I know you would like to receive benefits that reflect what you have put in. However lets be realistic here. As a guy in his 30's do you actually see that happening?

I agree that our government likes people being dependent on it. However the government is simply not going to be able to make it work. Right now the subject is essentially toxic. Expecting politicians to commit job security suicide is just not realistic. Sooner or later a radical change in entitlement benefits is inevitable.

Lastly I want to talk about why I wrote the original post. I am sure somewhere in the last few years you have heard the phrase "stress test". Basically a stress test is, at least in theory, a way to see how a corporation, bank or person would do in different scenarios. I wrote this to be thought provoking and to lead people to do their own personal stress tests on what I see as plausible scenarios. If it was a bit gloomy that is meant to be a warning. Sort of how you would warn your buddy if the 300 pound gorilla sitting at the bar slamming shots started angrilly glaring at them. My intent was not so much to talk about the ethics of entitlements or even entitlements in general but to provoke some thought and get folks to consider how these events would affect them.


milton f said...

Hah! I have read both of you guys, and you have more in common, than you have in differences. Don't we all agree that socialist security is a big scam? If there were an opt-out would any of us participate?
It seems to me that we need to work to end this ripoff, and end it as soon as possible. Better that Ryan recognizes it for what it is. And us older folks just need to work that much harder to be able to be free from it, that means not NEEDING it even though it has take 15% of our shit since we started working. Sucks to be us, but our kids, grandkids, etc., deserve better.

Mayberry said...

Personally, I would toss SS if I has the choice, because I know it won't be there when (if) I retire. I wouldn't even bother about the money that's already been stolen from me to date. Regardless of what you get back versus what you've put in (ever heard of compound interest?), it is not "welfare" to those who've worked and paid into it.

I realize there is a welfare component (disability, etc.). I realize the outlay is exceeding the income. I've said all along it's a Ponzi scheme. It is collapsing. It's not to be counted on, like anything "government" is not to be counted on or trusted. But to paint the whole thing with a broad "welfare" brush pisses a lot of folks off. They paid in, and deserve to get what they were promised.

russell1200 said...

SS is a transfer payment from the working to the retired. It is not a forced savings program. In general a person has received every last penny plus interest that they put into the system by the fourth year.

The problem is not a matter of dollars (well it is that too) so much as productivity. A U.S. dollar is a lien against future production within the United States. If the majority of our people are not working, than production is going to go down. Other countries will not want our dollars as much, and the relatively scarcer items will become expensive. This will not necessarily make all prices go up, some items (such as houses) may very well continue to plummet.

You can odd dollars out versus dollars in until you are blue in the face, but until you figure out where you are going to get your future production it is not going to matter.

Anonymous said...

You are speaking the truth. Alot of people don't like to hear the truth. Needs to be told anyway. I am 54 and don't expect any SS. I have my personal savings. It should not be the responsibility of my kids and grandkids to support me. They will have enough challenges. Stumpjumper.

Brass said...

Russell nailed it. It is a wealth transference scheme. I am not obliged to cover your butt because you had money robbed from you all your life. You have absolutely zero right to rob ME because YOU were robbed. That's the bottom line.

I am compassionate, however. I am all in favor of D.C. being closed, and selling off the buildings to the highest bidder, and using that to pay for all the dependents the State has created.

I remember seeing a jab at the "Tea Party" members, who have no idea what revolution or Constitution were about:

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