| Topic: |
Politics > Politics-USA |
| User: |
"Harry Hope" |
| Date: |
23 Jan 2005 10:01:58 AM |
| Object: |
Bush's Social Security Scam: The Next Disaster |
From The Chicago Tribune, 1/23/05:
http://www.chicagotribune.com/news/opinion/perspective/chi-0501230005jan23,1,5294610.story?coll=chi-newsopinionperspective-hed
Social Security `fix'--the next disaster
By R.C. Longworth, former Tribune senior correspondent and business
editor
President Bush has promised to make Social Security reform the
domestic centerpiece of his second term in office.
But this reform, to be unveiled next month, shows all the unreality,
fiscal irresponsibility and overhyped salesmanship of the keystones of
his first term, the war in Iraq and tax cuts for the rich.
Like these two adventures, Social Security reform is a disaster in the
making.
For that reason, it is necessary to sort the facts from the fiction in
this flawed proposal.
No matter what the administration says, there is no Social Security
crisis.
Social Security isn't broke and doesn't need fixing.
It is a system that will run just fine for 40 years, probably more,
even if nothing at all is done.
A problem will appear at midcentury, but it's a relatively small
problem that is easily fixed.
Full-scale reform, on the other hand, would end up killing the system
it is meant to save.
In his inaugural address Thursday, Bush said he wants to "build an
ownership society" in America, and he has made clear that a key to
that would be partial privatization of Social Security.
But he had launched his campaign for partial privatization of Social
Security earlier this month with a fear-mongering speech that told
young workers, "If you're 20 years old, in your mid-20s, and you're
beginning to work, I want you to think about a Social Security system
that will be flat bust, bankrupt, unless the United States Congress
has got the willingness to act now."
Vice President ***** Cheney followed this up by predicting "fiscal
collapse" by 2042, leaving the government no option "other than to
suddenly and dramatically reduce benefit payments by over 25 percent,
or to impose a massive, economically ruinous tax increase on all
American workers."
These two statements, by the two highest officers in the land, are not
even remotely true.
Here are the facts:
Social Security began in 1935 and has gone a long way toward
eliminating poverty among America's elderly.
That rate is about 8 percent today, down from 35 percent in 1960.
The payback is not lavish:
The typical annual pension for a retired couple amounts to less than
$17,000.
Better-off retirees supplement it with private investments, but
two-thirds of older Americans rely on it for the majority of their
income.
For most of the elderly, it's insurance, and it works.
In an era when most private pensions are tied to the value of an
employer's stock, this guarantee is more important than ever.
_______________________________________________________
Bush's attempt to enrich his cronies on Wall Street, Las Vegas on the
Hudson, will fail.
Harry
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| User: "Alan Lichtenstein" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
23 Jan 2005 12:43:05 PM |
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Harry Hope wrote:
From The Chicago Tribune, 1/23/05:
http://www.chicagotribune.com/news/opinion/perspective/chi-0501230005jan23,1,5294610.story?coll=chi-newsopinionperspective-hed
Social Security `fix'--the next disaster
By R.C. Longworth, former Tribune senior correspondent and business
editor
President Bush has promised to make Social Security reform the
domestic centerpiece of his second term in office.
But this reform, to be unveiled next month, shows all the unreality,
fiscal irresponsibility and overhyped salesmanship of the keystones of
his first term, the war in Iraq and tax cuts for the rich.
Like these two adventures, Social Security reform is a disaster in the
making.
Perhaps if it is reformed according to the President's Plan. But there is no room to doubt that reform is needed to prevent a
recurrence of this problem at some point in the future.
For that reason, it is necessary to sort the facts from the fiction in
this flawed proposal.
No matter what the administration says, there is no Social Security
crisis.
What a crisis is in the eye of the beholder. One's man crisis is another man's minor problem. Dispensing with those loaded
phrases and words would be far better for a rational discussion. Now, bush has in the past, used fear to promote his agenda, so
why not use it again, by promoting that fear by conjuring up a crisis?
Social Security isn't broke and doesn't need fixing.
If it doesn't need fixing, then why does it have a projected deficit?
It is a system that will run just fine for 40 years, probably more,
even if nothing at all is done.
You know, even machines which are broken or have minor problems will run for a period of time. If Social Security didn't require
some adjustment, it would run ad infinitum without any problems. The fact that it won't tells, or should tell any reasonable
person, that all is NOT well.
A problem will appear at midcentury, but it's a relatively small
problem that is easily fixed.
In one assertion, the author asserts that Social Security is NOT broken, yet, if it isn't broken, why does it have to be fixed?
Do I detect speaking out of both sides of one's mouth?
Full-scale reform, on the other hand, would end up killing the system
it is meant to save.
Hardly. there are other proposals and cures that have not even been mentioned or considered. Some of those would solve the
problem permanently.
In his inaugural address Thursday, Bush said he wants to "build an
ownership society" in America, and he has made clear that a key to
that would be partial privatization of Social Security.
Indeed. There can be no dispute that Bush's primary motivation is NOT to fix Social Security, but rather to get the Government
out of the pension business.
But he had launched his campaign for partial privatization of Social
Security earlier this month with a fear-mongering speech that told
young workers, "If you're 20 years old, in your mid-20s, and you're
beginning to work, I want you to think about a Social Security system
that will be flat bust, bankrupt, unless the United States Congress
has got the willingness to act now."
Of course, anyone who has the facts knows that Social Security cannot go bankrupt, because the Government will stand behind it.
The only way Social Security can go bankrupt is if the Government went bankrupt. Now, to be certain, the fund can face a
deficit, but it can never go bankrupt. Bush and company depend on half truths and fear, combined with a general ignorance on the
part of the electorate to carry their plan. And well it might have worked, save the increasing skepticism of the electorate, due
to the situation in Iraq as it continues to unfold, with regard to Bush's initial pleas for war.
Vice President ***** Cheney followed this up by predicting "fiscal
collapse" by 2042, leaving the government no option "other than to
suddenly and dramatically reduce benefit payments by over 25 percent,
or to impose a massive, economically ruinous tax increase on all
American workers."
To be sure, the government can do that. But that would be political suicide for anyone in office at that time. More likely, the
government would be forced to cover the shortfall.
These two statements, by the two highest officers in the land, are not
even remotely true.
Well, they may be HALF true.
Here are the facts:
Social Security began in 1935 and has gone a long way toward
eliminating poverty among America's elderly.
That rate is about 8 percent today, down from 35 percent in 1960.
The payback is not lavish:
The typical annual pension for a retired couple amounts to less than
$17,000.
Better-off retirees supplement it with private investments, but
two-thirds of older Americans rely on it for the majority of their
income.
For most of the elderly, it's insurance, and it works.
Actually, Social Security is a retirement plan and it functions like the annuities of retirement plans. Now, people may use it
as INSURANCE against poverty, but how they use it and how the plan works are very different. Social Security is a retirement
plan. It is NOT insurance.
In an era when most private pensions are tied to the value of an
employer's stock, this guarantee is more important than ever.
True, but your 'facts,' in no way refute the assertions attributed to the President and vice-president.
_______________________________________________________
Bush's attempt to enrich his cronies on Wall Street, Las Vegas on the
Hudson, will fail.
Agreed that it will fail. Even now, Republicans in Congress, gauging the public distrust in Bush and his proposals, are now
backing away from it. There have been comments from them that it is likely that the Bush Plan, will be DOA.
Alan
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| User: "Puddy" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
23 Jan 2005 07:08:22 PM |
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"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F3F03A.88D4FA6@xyz.com...
Harry Hope wrote:
From The Chicago Tribune, 1/23/05:
http://www.chicagotribune.com/news/opinion/perspective/chi-0501230005jan23,1
,5294610.story?coll=chi-newsopinionperspective-hed
Social Security `fix'--the next disaster
By R.C. Longworth, former Tribune senior correspondent and business
editor
President Bush has promised to make Social Security reform the
domestic centerpiece of his second term in office.
But this reform, to be unveiled next month, shows all the unreality,
fiscal irresponsibility and overhyped salesmanship of the keystones of
his first term, the war in Iraq and tax cuts for the rich.
Like these two adventures, Social Security reform is a disaster in the
making.
Perhaps if it is reformed according to the President's Plan. But there is
no room to doubt that reform is needed to prevent a
recurrence of this problem at some point in the future.
Some reform is needed, but it isn't urgent, and it doesn't need to be an
overhaul. The current system for the most part works.
For that reason, it is necessary to sort the facts from the fiction in
this flawed proposal.
No matter what the administration says, there is no Social Security
crisis.
What a crisis is in the eye of the beholder. One's man crisis is another
man's minor problem. Dispensing with those loaded
phrases and words would be far better for a rational discussion. Now,
bush has in the past, used fear to promote his agenda, so
why not use it again, by promoting that fear by >conjuring up a crisis?
That's exactly what he is doing. Social Security could continue to
pay full benefits until sometime between 2042 and 2052. That isn't a
crisis.
Social Security isn't broke and doesn't need fixing.
If it doesn't need fixing, then why does it have a >projected deficit?
Not until 2042. And the SS trustees who oversee the program have said
only minor tweeking is needed, not an overhaul.
Jeremy Olson
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| User: "InsuranceBroker" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
24 Jan 2005 08:41:02 AM |
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Subject: Re: Bush's Social Security Scam: The Next Disaster
From: "Puddy"
Date: 1/23/2005 8:08 PM Eastern Standard Time
Message-id: <ct1hq5$m19$1@nwnexus-news.nwnexus.com>
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F3F03A.88D4FA6@xyz.com...
Harry Hope wrote:
From The Chicago Tribune, 1/23/05:
http://www.chicagotribune.com/news/opinion/perspective/chi-0501230005jan23,1
,5294610.story?coll=chi-newsopinionperspective-hed
Social Security `fix'--the next disaster
By R.C. Longworth, former Tribune senior correspondent and business
editor
President Bush has promised to make Social Security reform the
domestic centerpiece of his second term in office.
But this reform, to be unveiled next month, shows all the unreality,
fiscal irresponsibility and overhyped salesmanship of the keystones of
his first term, the war in Iraq and tax cuts for the rich.
Like these two adventures, Social Security reform is a disaster in the
making.
Perhaps if it is reformed according to the President's Plan. But there is
no room to doubt that reform is needed to prevent a
recurrence of this problem at some point in the future.
Some reform is needed, but it isn't urgent, and it doesn't need to be an
overhaul. The current system for the most part works.
The biggest problem with social secuirty is the fact that Congress has looted
the money. It really boils down to the fact that the biggest thief in American
history was done by the republican controlled congress. They have taken
trillions out of the social security accounts. BTW your congressman was not
stupid enough to put his money into accounts controlled by people like your
congressman.
For that reason, it is necessary to sort the facts from the fiction in
this flawed proposal.
No matter what the administration says, there is no Social Security
crisis.
What a crisis is in the eye of the beholder. One's man crisis is another
man's minor problem. Dispensing with those loaded
phrases and words would be far better for a rational discussion. Now,
bush has in the past, used fear to promote his agenda, so
why not use it again, by promoting that fear by >conjuring up a crisis?
That's exactly what he is doing. Social Security could continue to
pay full benefits until sometime between 2042 and 2052. That isn't a
crisis.
Social Security isn't broke and doesn't need fixing.
If it doesn't need fixing, then why does it have a >projected deficit?
Not until 2042. And the SS trustees who oversee the program have said
only minor tweeking is needed, not an overhaul.
Jeremy Olson
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| User: "Alan Lichtenstein" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
24 Jan 2005 07:11:47 AM |
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Puddy wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F3F03A.88D4FA6@xyz.com...
Harry Hope wrote:
From The Chicago Tribune, 1/23/05:
http://www.chicagotribune.com/news/opinion/perspective/chi-0501230005jan23,1
,5294610.story?coll=chi-newsopinionperspective-hed
Social Security `fix'--the next disaster
By R.C. Longworth, former Tribune senior correspondent and business
editor
President Bush has promised to make Social Security reform the
domestic centerpiece of his second term in office.
But this reform, to be unveiled next month, shows all the unreality,
fiscal irresponsibility and overhyped salesmanship of the keystones of
his first term, the war in Iraq and tax cuts for the rich.
Like these two adventures, Social Security reform is a disaster in the
making.
Perhaps if it is reformed according to the President's Plan. But there is
no room to doubt that reform is needed to prevent a
recurrence of this problem at some point in the future.
Some reform is needed, but it isn't urgent, and it doesn't need to be an
overhaul. The current system for the most part works.
The current system has NEVER worked. Social Security pays benefits annuity
style, but fails to fund, always has failed to fund, and unless changes are
made will continue to fail to fund the reserves needed to pay those benefits.
It has required continual fixes which are no more than band-aids applied to a
wound that really needs to be sutured. I do not continue temporary 'fixes' as
solving the long standing problem. However, the President's plan does nothing
to address the problem either, and would likely be disastrous for most people.
For that reason, it is necessary to sort the facts from the fiction in
this flawed proposal.
No matter what the administration says, there is no Social Security
crisis.
What a crisis is in the eye of the beholder. One's man crisis is another
man's minor problem. Dispensing with those loaded
phrases and words would be far better for a rational discussion. Now,
bush has in the past, used fear to promote his agenda, so
why not use it again, by promoting that fear by >conjuring up a crisis?
That's exactly what he is doing. Social Security could continue to
pay full benefits until sometime between 2042 and 2052. That isn't a
crisis.
It is a serious problem. If you understand annuities, you understand that
reserves need to be built up over long periods, usually between 30-40 years.
You have 24 years between 2018 and 2042, and almost 38 years if you start now.
So prudence dictates that a solution be offered and implemented NOW, not when
the problem hits, because if you wait until 2042, you can NEVER recoup the lost
years for money growth.
Social Security isn't broke and doesn't need fixing.
If it doesn't need fixing, then why does it have a >projected deficit?
Not until 2042. And the SS trustees who oversee the program have said
only minor tweeking is needed, not an overhaul.
They assume that the funding of the plan uses the same actuarially and
financially unsound mechanism as it does now. If a change is made to correct
that erroneous assumption, it needs to be made now. Furthermore, in 2042, the
shortfall will be far too great to cover at that time without serious financial
implications for the government and therefore, you, the taxpayer. Solving the
problem NOW results in far less difficulty than if you waited.
Alan
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| User: "Courageous" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
23 Jan 2005 12:48:47 PM |
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Like these two adventures, Social Security reform is a disaster in the
making.
Perhaps if it is reformed according to the President's Plan.
I doubt it. I searched. I found the 3 alternative plans. They're
all micro plans, hardly sweeping or threatening to the system.
Henceforth: I'm dismissing all these apolyptics as partisan
hysterical reactionaries.
The sky is falling, the sky is falling. Good grief.
C//
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| User: "Alan Lichtenstein" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
23 Jan 2005 01:06:46 PM |
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Courageous wrote:
Like these two adventures, Social Security reform is a disaster in the
making.
Perhaps if it is reformed according to the President's Plan.
I doubt it.
Don't doubt it. Do the math. When you do, you will clearly see that the
'reform' the President has in mind, is not only not solving the problem, but
will result in an actual cut in benefits for most recipients.
I searched. I found the 3 alternative plans. They're
all micro plans, hardly sweeping or threatening to the system.
What three plans are you talking about? There have literally been scores of
plans and proposals generated. Please be specific.
Henceforth: I'm dismissing all these apolyptics as partisan
hysterical reactionaries.
Don't dismiss them. Ask them to show you WHY the sky is falling, using
figures. Most reactionaries can't, because they don't have a clue.
The sky is falling, the sky is falling. Good grief.
But ignoring the little meteorites that do fall from the sky, is similarly
unwise,, wouldn't you agree?
Alan
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| User: "Courageous" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
23 Jan 2005 01:56:54 PM |
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What three plans are you talking about? There have literally been scores of
plans and proposals generated. Please be specific.
http://www.npr.org/templates/story/story.php?storyId=4164384
But not to evaluate in a vacuum. One has to ask how these plans
compared to projected shortfalls, and what otherwise /must/ occur
(one way or the other) if the shortfalls aren't seen to one
way or the other.
C//
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| User: "Alan Lichtenstein" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
24 Jan 2005 07:04:17 AM |
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Courageous wrote:
What three plans are you talking about? There have literally been scores of
plans and proposals generated. Please be specific.
http://www.npr.org/templates/story/story.php?storyId=4164384
But not to evaluate in a vacuum. One has to ask how these plans
compared to projected shortfalls, and what otherwise /must/ occur
(one way or the other) if the shortfalls aren't seen to one
way or the other.
The only difference between these three plans is essentially the amounts
diverted and how they would be indexed. NONE of the plans addresses the
shortfall. Essentially what they do is TRANSFER the shortfall to the holder of
the private account. NONE of these plans addresses the cut in benefits that
would have to occur if these plans are implemented. Doing the math, one sees
that there is between a 16%-32.25% cut in FICA contributions that would result
from these plans, thus producing between a 40%-51% cut in benefits is any of
them are implemented. The private plans would be expected to make up the
difference. Using realistic growth rates, it can be demonstrated that using
these plans, the holder of the private account is NOT likely to recoup what he
would lose from the defined benefit as it stands now.
If you'd like, I can detail the math for you.
Alan
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| User: "Courageous" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
24 Jan 2005 09:35:37 AM |
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But not to evaluate in a vacuum. One has to ask how these plans
compared to projected shortfalls, and what otherwise /must/ occur
(one way or the other) if the shortfalls aren't seen to one
way or the other.
The only difference between these three plans is essentially the amounts
diverted and how they would be indexed. NONE of the plans addresses the
shortfall. Essentially what they do is TRANSFER the shortfall to the holder of
the private account.
Neither which way, really. They reduce future benefits by price indexing,
instead of wage-indexing.
difference. Using realistic growth rates, it can be demonstrated that using
these plans, the holder of the private account is NOT likely to recoup what he
would lose from the defined benefit as it stands now.
You treat retaining future, projected defined benefits as a given.
I do not. They're clearly and obviously unsustainable.
C//
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| User: "Alan Lichtenstein" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
24 Jan 2005 11:24:29 AM |
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Courageous wrote:
But not to evaluate in a vacuum. One has to ask how these plans
compared to projected shortfalls, and what otherwise /must/ occur
(one way or the other) if the shortfalls aren't seen to one
way or the other.
The only difference between these three plans is essentially the amounts
diverted and how they would be indexed. NONE of the plans addresses the
shortfall. Essentially what they do is TRANSFER the shortfall to the holder of
the private account.
Neither which way, really.
Sorry, but the indeed TRANSFER the shortfall to the investor. Please allow me to
show you how they do it:
First of all, it is NOT in dispute that if nothing is done, in 2042, Social
Security will only be able to provide 28% of current benefits. Thus, the benefit
as compared to today's benefits, will be 72%. Now, taking the maximum allowable
amount to be diverted under the three plans( 4% of the 6.2% current employee FICA
taxes, when expressed as a function of total FICA dollars, it computes to 32.25%.
This number is arrived at by dividing the percentage diverted to private accounts
by the total amount of FICA taxes, which is 12.4%( employer and employee
contributions ). Thus, if you divert 4% of that total of 12.4%, you get a figure
of 32.25% of all FICA contributions diverted to private accounts. This leaves
roughly 68% of total contributions left to fund the defined benefit of Social
Security. Using a proportion,
100% of FICA taxes = 72% of the benefit in 2042
-------------------------- --------------------------------
62% of FICA taxes X % of the benefit
Solving for X, we get 51.04% of the benefit as compared to present. Thus, under
the President's proposals, if money is diverted to the private accounts, less will
be available to fund the defined benefit. Under the maximum allowable diversion of
4%, there will only remain less that half of the money needed to fund the benefit,
with the private accounts expected to make up the difference, assuming that the
funding of the defined benefit will be paid out of current receipts, as now. As
you can see from the above example, the shortfall was NOT eliminated, but merely
TRANSFERRED to the holder of the private account who was told that he now has to
make it up. And this has nothing to do with anything except the numbers that exist
now, keeping everything else constant. The President himself has asserted that he
would cut benefits by 49.6%, so these numbers are NOT inaccurate, but very closely
agree with his proposals.
They reduce future benefits by price indexing,
instead of wage-indexing.
Doing so will only reduce the benefit even more. The formula which is used to
provide the benefit is irrelevant to this calculation.
difference. Using realistic growth rates, it can be demonstrated that using
these plans, the holder of the private account is NOT likely to recoup what he
would lose from the defined benefit as it stands now.
You treat retaining future, projected defined benefits as a given.
Indeed they are. That was the promise of Social Security. I take guarantees very
seriously.
I do not. They're clearly and obviously unsustainable.
Indeed not. They are quite sustainable with adjustments to both the funding
mechanism of Social Security as well as short term band-aid approaches. If Social
Security can be made to fund itself like every other annuity that promises a
lifetime income, not only will the defined benefits be sustainable, but they will
not place any pressure on the government, as is the case now. In any event, the
President's Plan is NOT among those plans that address the problems of Social
Security. By transferring the shortfall to the individual citizen, what it does is
get the Government out of the retirement business and leaves the citizen to fend
for himself. What the President's Plan does, is essentially take the 'security'
out of Social Security..
Alan
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| User: "Courageous" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
24 Jan 2005 07:56:06 PM |
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First of all, it is NOT in dispute that if nothing is done, in 2042, Social
Security will only be able to provide 28% [sic: insert "less" perhaps?"]
of current benefits. Thus, the benefit as compared to today's benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're in
approximate agreement, certain assumptions withholding.
4% of the 6.2% current employee FICA taxes, when expressed as a
function of total FICA dollars, it computes to 32.25%.
Hold it right there. The maximum is $1,000 per individual per annum
in plan 2. You're percentages are inaccurate as a consequence. I'll
give you a retry.
Indeed they are. That was the promise of Social Security. I take guarantees very
seriously.
No, you only take the promises you /like/ very seriously. For example,
you're throwing out FDR's promise that SS would be self-funded by now.
You're pick'n and choose'n 'em, I say.
I do not. They're clearly and obviously unsustainable.
By transferring the shortfall to the individual citizen, what it does is
get the Government out of the retirement business...
The way that the government has been eating SS, it's plain and
obvious it shouldn't have been involved in the retirement business
to begin with. Given what congress critters have done with it so
far, it's beyond me why you'd trust them any further, frankly.
C//
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| User: "Alan Lichtenstein" |
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| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 06:34:20 AM |
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Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in 2042, Social
Security will only be able to provide 28% [sic: insert "less" perhaps?"]
of current benefits. Thus, the benefit as compared to today's benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of benefits is 72%.
4% of the 6.2% current employee FICA taxes, when expressed as a
function of total FICA dollars, it computes to 32.25%.
Hold it right there. The maximum is $1,000 per individual per annum
in plan 2. You're percentages are inaccurate as a consequence. I'll
give you a retry.
Sorry, but the figures are correct. Social Security as an aggregate must accrue
aggregate average costs. It can't compute each individual's contribution, which would
be required using the $1000 maximum figure. and furthermore, if you use that, then
you have to use the actual amounts an individual sets aside, another unknown. Thus,
it is indeed correct to figure revenues for Social Security based on that figure. In
point of fact, if you follow through the calculations you see that you get a 51%
reduction in benefits. The figures are correct because by the President's own
proposals, they figure a benefit reduction of 49.6%.
Indeed they are. That was the promise of Social Security. I take guarantees very
seriously.
No, you only take the promises you /like/ very seriously. For example,
you're throwing out FDR's promise that SS would be self-funded by now.
Not at all. I take those promises seriously as well. That is why this is now being
discussed; to insure that Social Security remains self-funded. Now, if you want to
argue that the self-funding mechanism that was chosen originally and which exists now
is ineffective, you'll get no argument. But that doesn't mean that it should not be
corrected to insure that guarantee in perpetuity.
You're pick'n and choose'n 'em, I say.
Not at all. That is the entire basis for discussions centered around 'fixing' Social
Security.
I do not. They're clearly and obviously unsustainable.
By transferring the shortfall to the individual citizen, what it does is
get the Government out of the retirement business...
The way that the government has been eating SS, it's plain and
obvious it shouldn't have been involved in the retirement business
to begin with. Given what congress critters have done with it so
far, it's beyond me why you'd trust them any further, frankly.
Statistics show, that even with the myriad of tax deferred plans available to
individual citizens they still don't put away enough. At the present most retirees
use Social Security as an integral part of their retirement income, which is was NOT
designed to be. Thus, poor planning on the part of individuals is evident. The
Government's objectives in this are to avoid having to pay welfare for these people,
which is far more expensive, with all the deleterious effects that has on budgets and
spending. Thus, Social Security which due to the nature of removing savings from
individuals through FICA taxes forces them to save for the eventuality of retirement,
and insures them a benefit by so doing.
Given those circumstances, i can't see why YOU would want to give up a guarantee of
regular benefits for the uncertainty of investing on your own, which you may now do
anyway, if you so choose, while at the same time, willingly reduce your benefits for
the privilege. That doesn't make much sense to me.
Alan
.
|
|
|
| User: "Larry Hewitt" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 12:46:17 PM |
|
|
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in 2042,
Social
Security will only be able to provide 28% [sic: insert "less"
perhaps?"]
of current benefits. Thus, the benefit as compared to today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a percentager of
"current" benefits, but of "projected" benefits. The payments at theat time
will still be higher than they are today.
This is why one methid under discussion for lessening the shortfall is to
change the way benefit increases are calsulated from the rate of change of
income to the rate of change of costs.
larry
4% of the 6.2% current employee FICA taxes, when expressed as a
function of total FICA dollars, it computes to 32.25%.
Hold it right there. The maximum is $1,000 per individual per annum
in plan 2. You're percentages are inaccurate as a consequence. I'll
give you a retry.
Sorry, but the figures are correct. Social Security as an aggregate must
accrue
aggregate average costs. It can't compute each individual's contribution,
which would
be required using the $1000 maximum figure. and furthermore, if you use
that, then
you have to use the actual amounts an individual sets aside, another
unknown. Thus,
it is indeed correct to figure revenues for Social Security based on that
figure. In
point of fact, if you follow through the calculations you see that you get
a 51%
reduction in benefits. The figures are correct because by the President's
own
proposals, they figure a benefit reduction of 49.6%.
Indeed they are. That was the promise of Social Security. I take
guarantees very
seriously.
No, you only take the promises you /like/ very seriously. For example,
you're throwing out FDR's promise that SS would be self-funded by now.
Not at all. I take those promises seriously as well. That is why this is
now being
discussed; to insure that Social Security remains self-funded. Now, if
you want to
argue that the self-funding mechanism that was chosen originally and which
exists now
is ineffective, you'll get no argument. But that doesn't mean that it
should not be
corrected to insure that guarantee in perpetuity.
You're pick'n and choose'n 'em, I say.
Not at all. That is the entire basis for discussions centered around
'fixing' Social
Security.
I do not. They're clearly and obviously unsustainable.
By transferring the shortfall to the individual citizen, what it does
is
get the Government out of the retirement business...
The way that the government has been eating SS, it's plain and
obvious it shouldn't have been involved in the retirement business
to begin with. Given what congress critters have done with it so
far, it's beyond me why you'd trust them any further, frankly.
Statistics show, that even with the myriad of tax deferred plans available
to
individual citizens they still don't put away enough. At the present most
retirees
use Social Security as an integral part of their retirement income, which
is was NOT
designed to be. Thus, poor planning on the part of individuals is
evident. The
Government's objectives in this are to avoid having to pay welfare for
these people,
which is far more expensive, with all the deleterious effects that has on
budgets and
spending. Thus, Social Security which due to the nature of removing
savings from
individuals through FICA taxes forces them to save for the eventuality of
retirement,
and insures them a benefit by so doing.
Given those circumstances, i can't see why YOU would want to give up a
guarantee of
regular benefits for the uncertainty of investing on your own, which you
may now do
anyway, if you so choose, while at the same time, willingly reduce your
benefits for
the privilege. That doesn't make much sense to me.
Alan
.
|
|
|
| User: "Alan Lichtenstein" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 12:51:50 PM |
|
|
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in 2042,
Social
Security will only be able to provide 28% [sic: insert "less"
perhaps?"]
of current benefits. Thus, the benefit as compared to today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a percentager of
"current" benefits, but of "projected" benefits. The payments at theat time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of reference in
predicting the shortfall, other than current benefit levels, as they exist
now. They cannot predict any changes which have not as yet been made, which
would change the benefit levels. So the projection is that the benefit level,
if nothing were done, would be only 72% of what it is now.
This is why one methid under discussion for lessening the shortfall is to
change the way benefit increases are calsulated from the rate of change of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
Alan
.
|
|
|
| User: "Larry Hewitt" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 01:48:12 PM |
|
|
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in
2042,
Social
Security will only be able to provide 28% [sic: insert "less"
perhaps?"]
of current benefits. Thus, the benefit as compared to today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a percentager of
"current" benefits, but of "projected" benefits. The payments at theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of reference
in
predicting the shortfall, other than current benefit levels, as they exist
now. They cannot predict any changes which have not as yet been made,
which
would change the benefit levels. So the projection is that the benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law, calculated
on the increase in the average family income. Based on economic projections,
the trustees can and do compute these increases as part of their model ---
the same projections are used to calculate the number of retirees, FICA
taxes paid, average income levels (and therefore the projected benefits paid
to new retirees), expected disability payments, and a whole lot more. Basic
actuarial science.
This is why one methid under discussion for lessening the shortfall is
to
change the way benefit increases are calsulated from the rate of change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
True. But it is a suggested change in the law mandating benefit increases.
Again, these increases are currently MANDATED BY LAW, and are calculated as
part of the general economic projections used by the trustees to determine
the health of the system.
Larry
Alan
.
|
|
|
| User: "Alan Lichtenstein" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 04:43:13 PM |
|
|
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in
2042,
Social
Security will only be able to provide 28% [sic: insert "less"
perhaps?"]
of current benefits. Thus, the benefit as compared to today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a percentager of
"current" benefits, but of "projected" benefits. The payments at theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of reference
in
predicting the shortfall, other than current benefit levels, as they exist
now. They cannot predict any changes which have not as yet been made,
which
would change the benefit levels. So the projection is that the benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law, calculated
on the increase in the average family income. Based on economic projections,
the trustees can and do compute these increases as part of their model ---
the same projections are used to calculate the number of retirees, FICA
taxes paid, average income levels (and therefore the projected benefits paid
to new retirees), expected disability payments, and a whole lot more. Basic
actuarial science.
Your explanation is what I meant with regard to benefits. I understand those
actuarial considerations. i thought your assertion was meant to apply to
actual benefits rather than predicted benefits based on current information and
formulas. I see that we are in agreement. The shortfall is the projected
deficit based on current information and formularization as those formulas
currently are used.
This is why one methid under discussion for lessening the shortfall is
to
change the way benefit increases are calsulated from the rate of change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
True. But it is a suggested change in the law mandating benefit increases.
I understand that. However, it must be unmasked for what it is. Changes in
wages have risen faster than indexed prices, hence, to change the
formularization is in effect, decreasing benefits.
Again, these increases are currently MANDATED BY LAW, and are calculated as
part of the general economic projections used by the trustees to determine
the health of the system.
I agree. So what is your point, exactly?
Alan
.
|
|
|
| User: "Larry Hewitt" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 05:37:54 PM |
|
|
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6CB81.E758CAA6@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in
2042,
Social
Security will only be able to provide 28% [sic: insert "less"
perhaps?"]
of current benefits. Thus, the benefit as compared to today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're
in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a percentager of
"current" benefits, but of "projected" benefits. The payments at
theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of
reference
in
predicting the shortfall, other than current benefit levels, as they
exist
now. They cannot predict any changes which have not as yet been made,
which
would change the benefit levels. So the projection is that the
benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law,
calculated
on the increase in the average family income. Based on economic
projections,
the trustees can and do compute these increases as part of their
model ---
the same projections are used to calculate the number of retirees, FICA
taxes paid, average income levels (and therefore the projected benefits
paid
to new retirees), expected disability payments, and a whole lot more.
Basic
actuarial science.
Your explanation is what I meant with regard to benefits. I understand
those
actuarial considerations. i thought your assertion was meant to apply to
actual benefits rather than predicted benefits based on current
information and
formulas. I see that we are in agreement. The shortfall is the projected
deficit based on current information and formularization as those formulas
currently are used.
This is why one methid under discussion for lessening the shortfall
is
to
change the way benefit increases are calsulated from the rate of
change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
True. But it is a suggested change in the law mandating benefit
increases.
I understand that. However, it must be unmasked for what it is. Changes
in
wages have risen faster than indexed prices, hence, to change the
formularization is in effect, decreasing benefits.
Again, these increases are currently MANDATED BY LAW, and are calculated
as
part of the general economic projections used by the trustees to
determine
the health of the system.
I agree. So what is your point, exactly?
You have confused the bejeezus out of me. I accept that we agree, but I
still cannot follow what you said --- "current information and
formularization as those formulas currently are used." is indecipherable to
me.
MY only point was to show that the 72% figure IS NOT based on current
benefit levels, as many right wing liars assert, but is based on projected
benefit levels in 2042, and that even at the 72% level those bemefits exceed
current benefits. Right wing liars are trying to make the minor molehill a
major mountain, and I was merely doing a little shoveling.
Larry
Alan
.
|
|
|
| User: "Alan Lichtenstein" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 07:32:01 PM |
|
|
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6CB81.E758CAA6@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done, in
2042,
Social
Security will only be able to provide 28% [sic: insert "less"
perhaps?"]
of current benefits. Thus, the benefit as compared to today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe we're
in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a percentager of
"current" benefits, but of "projected" benefits. The payments at
theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of
reference
in
predicting the shortfall, other than current benefit levels, as they
exist
now. They cannot predict any changes which have not as yet been made,
which
would change the benefit levels. So the projection is that the
benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law,
calculated
on the increase in the average family income. Based on economic
projections,
the trustees can and do compute these increases as part of their
model ---
the same projections are used to calculate the number of retirees, FICA
taxes paid, average income levels (and therefore the projected benefits
paid
to new retirees), expected disability payments, and a whole lot more.
Basic
actuarial science.
Your explanation is what I meant with regard to benefits. I understand
those
actuarial considerations. i thought your assertion was meant to apply to
actual benefits rather than predicted benefits based on current
information and
formulas. I see that we are in agreement. The shortfall is the projected
deficit based on current information and formularization as those formulas
currently are used.
This is why one methid under discussion for lessening the shortfall
is
to
change the way benefit increases are calsulated from the rate of
change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
True. But it is a suggested change in the law mandating benefit
increases.
I understand that. However, it must be unmasked for what it is. Changes
in
wages have risen faster than indexed prices, hence, to change the
formularization is in effect, decreasing benefits.
Again, these increases are currently MANDATED BY LAW, and are calculated
as
part of the general economic projections used by the trustees to
determine
the health of the system.
I agree. So what is your point, exactly?
You have confused the bejeezus out of me. I accept that we agree, but I
still cannot follow what you said --- "current information and
formularization as those formulas currently are used." is indecipherable to
me.
Current information meaning the information which is currently being used by
the trustees to predict benefits. Formularization meaning those formulas which
are currently being used to calculate benefits.
MY only point was to show that the 72% figure IS NOT based on current
benefit levels, as many right wing liars assert, but is based on projected
benefit levels in 2042, and that even at the 72% level those bemefits exceed
current benefits. Right wing liars are trying to make the minor molehill a
major mountain, and I was merely doing a little shoveling.
I'm not going to get into a semantic dispute over what the maximum benefits
actually are. The 72% figure is used to express the level of benefit Social
Security will be able to pay with respect to whatever the maximum benefit is
projected to be at the time.
Reactionaries make many claims, most of them fail to meet the test of validity
when even fundamental mathematics are applied. If we adopt the President's
plan, we can expect that the defined benefit of Social Security will be at a
level of under 50% of whatever the maximum projected benefit is. Given the
fact that the private plans will be expected to make up the difference, it
appears quite unlikely that such will be the case, assuming a reasonable rate
of return. Only using the most optimistic rates of return will the private
plans even equal the defined benefit that they are supposed to replace. A very
bad business for the unsophisticated investor, or even the sophisticated
investor, and only serves to remove the 'security' from Social Security.
Alan
.
|
|
|
| User: "Larry Hewitt" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
25 Jan 2005 11:34:02 PM |
|
|
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6F311.860844B1@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6CB81.E758CAA6@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done,
in
2042,
Social
Security will only be able to provide 28% [sic: insert
"less"
perhaps?"]
of current benefits. Thus, the benefit as compared to
today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe
we're
in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the
level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a
percentager of
"current" benefits, but of "projected" benefits. The payments at
theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of
reference
in
predicting the shortfall, other than current benefit levels, as
they
exist
now. They cannot predict any changes which have not as yet been
made,
which
would change the benefit levels. So the projection is that the
benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law,
calculated
on the increase in the average family income. Based on economic
projections,
the trustees can and do compute these increases as part of their
model ---
the same projections are used to calculate the number of retirees,
FICA
taxes paid, average income levels (and therefore the projected
benefits
paid
to new retirees), expected disability payments, and a whole lot
more.
Basic
actuarial science.
Your explanation is what I meant with regard to benefits. I understand
those
actuarial considerations. i thought your assertion was meant to apply
to
actual benefits rather than predicted benefits based on current
information and
formulas. I see that we are in agreement. The shortfall is the
projected
deficit based on current information and formularization as those
formulas
currently are used.
This is why one methid under discussion for lessening the
shortfall
is
to
change the way benefit increases are calsulated from the rate
of
change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
True. But it is a suggested change in the law mandating benefit
increases.
I understand that. However, it must be unmasked for what it is.
Changes
in
wages have risen faster than indexed prices, hence, to change the
formularization is in effect, decreasing benefits.
Again, these increases are currently MANDATED BY LAW, and are
calculated
as
part of the general economic projections used by the trustees to
determine
the health of the system.
I agree. So what is your point, exactly?
You have confused the bejeezus out of me. I accept that we agree, but I
still cannot follow what you said --- "current information and
formularization as those formulas currently are used." is indecipherable
to
me.
Current information meaning the information which is currently being used
by
the trustees to predict benefits. Formularization meaning those formulas
which
are currently being used to calculate benefits.
Well, I DO want to get into a semantics battle There is no need to specify
"current information" --- it is assumed that the information being used is
current unless otherwise specified. In fact, in the context we are using, it
is not "current information" that is important, but projected information.
Your awkward phrasing is a substitute for "projected benefits" ---
needlessly, confusingly pedantic.
I also have trouble with "formularization" While I could find defintions of
this word on the web, the defintions are not complete, often circular, and
what they do say disagrees with your use. You define it as a set of
formulas.
http://www.hyperdictionary.com/dictionary/formularization defines it as:
Definition: \For`mu*lar*i*za"tion\, n.
The act of formularizing; a formularized or formulated
statement or exhibition. --C. Kingsley.
That is, an act, not a set. And they do not define "formularizing"or
"formularized", and formulated means "devised; developed according to an
orderly plan". This is not how you you used the word --- you intended to say
that formulas were applied, not that the formulas were devised and
developed. And while I could find other sources thatr used the word, none
were standard dictionaries (or they just wanted to sell me a
dictionary) --- all were usng the word in highly specific technospeak
jargon, and all were using it in the form Hyperdictionary did - as in the
act of formularization of the JARC program.
MY only point was to show that the 72% figure IS NOT based on current
benefit levels, as many right wing liars assert, but is based on
projected
benefit levels in 2042, and that even at the 72% level those bemefits
exceed
current benefits. Right wing liars are trying to make the minor molehill
a
major mountain, and I was merely doing a little shoveling.
I'm not going to get into a semantic dispute over what the maximum
benefits
actually are. The 72% figure is used to express the level of benefit
Social
Security will be able to pay with respect to whatever the maximum benefit
is
projected to be at the time.
I don;t know where you got "maximum" benefits --- certainly not from me. I
am talking "expected" benefits, or , if you prefer, "total" benefits.
And you are dead wrong about the 72% figure being the percentage of maximum
benefits, as I have said twice now. It is the percentage of EXPECTED
benefits. That is, if your legally mandated benefit is $1.00, they will be
able to pay $0.72. If your beneft si $20.00 they will be able to pay $14.40.
It does not say that if your benefit is up to 72% of the legal maximum will
be paid in full, and then capped at 72% of maximum, or only those earning
72% of maximum or less will get benefits and hte rest of the retirees get
bupkiss, or anything like that. It means that EVERYONE will get 72% of what
they "should" have gotten, assuming that the benefits formula has not
changed.
Reactionaries make many claims, most of them fail to meet the test of
validity
when even fundamental mathematics are applied. If we adopt the
President's
plan, we can expect that the defined benefit of Social Security will be at
a
level of under 50% of whatever the maximum projected benefit is. Given
the
fact that the private plans will be expected to make up the difference, it
appears quite unlikely that such will be the case, assuming a reasonable
rate
of return. Only using the most optimistic rates of return will the
private
plans even equal the defined benefit that they are supposed to replace. A
very
bad business for the unsophisticated investor, or even the sophisticated
investor, and only serves to remove the 'security' from Social Security.
Again, this is a false statement, if only because Bush has not come out with
a plan yet. It is reasonably close to the numbers floated by some
"revisionists", and is accurate in the conclusion that private investment
will not make up the losses, let alone increase retirement funds.
Larry
Alan
.
|
|
|
| User: "Alan Lichtenstein" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
26 Jan 2005 07:36:14 AM |
|
|
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6F311.860844B1@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6CB81.E758CAA6@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is done,
in
2042,
Social
Security will only be able to provide 28% [sic: insert
"less"
perhaps?"]
of current benefits. Thus, the benefit as compared to
today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe
we're
in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the
level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a
percentager of
"current" benefits, but of "projected" benefits. The payments at
theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of
reference
in
predicting the shortfall, other than current benefit levels, as
they
exist
now. They cannot predict any changes which have not as yet been
made,
which
would change the benefit levels. So the projection is that the
benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law,
calculated
on the increase in the average family income. Based on economic
projections,
the trustees can and do compute these increases as part of their
model ---
the same projections are used to calculate the number of retirees,
FICA
taxes paid, average income levels (and therefore the projected
benefits
paid
to new retirees), expected disability payments, and a whole lot
more.
Basic
actuarial science.
Your explanation is what I meant with regard to benefits. I understand
those
actuarial considerations. i thought your assertion was meant to apply
to
actual benefits rather than predicted benefits based on current
information and
formulas. I see that we are in agreement. The shortfall is the
projected
deficit based on current information and formularization as those
formulas
currently are used.
This is why one methid under discussion for lessening the
shortfall
is
to
change the way benefit increases are calsulated from the rate
of
change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing more.
True. But it is a suggested change in the law mandating benefit
increases.
I understand that. However, it must be unmasked for what it is.
Changes
in
wages have risen faster than indexed prices, hence, to change the
formularization is in effect, decreasing benefits.
Again, these increases are currently MANDATED BY LAW, and are
calculated
as
part of the general economic projections used by the trustees to
determine
the health of the system.
I agree. So what is your point, exactly?
You have confused the bejeezus out of me. I accept that we agree, but I
still cannot follow what you said --- "current information and
formularization as those formulas currently are used." is indecipherable
to
me.
Current information meaning the information which is currently being used
by
the trustees to predict benefits. Formularization meaning those formulas
which
are currently being used to calculate benefits.
Well, I DO want to get into a semantics battle There is no need to specify
"current information" --- it is assumed that the information being used is
current unless otherwise specified. In fact, in the context we are using, it
is not "current information" that is important, but projected information.
Your awkward phrasing is a substitute for "projected benefits" ---
needlessly, confusingly pedantic.
Please allow me to explain further. i had assumed that you understood the
basis for making predictions. I see may has assumed incorrectly. When making
predictions of any kind, one starts with some BASIS. Now, one can pick ANY
number one wants to identify as one's BASIS. However, Social Security uses
current information as its BASIS. It makes predictions based on that BASIS.
Now, there is no semantic dispute. I'll accept your nit-picking. The result
is the same regardless.
I also have trouble with "formularization" While I could find defintions of
this word on the web, the defintions are not complete, often circular, and
what they do say disagrees with your use. You define it as a set of
formulas.
http://www.hyperdictionary.com/dictionary/formularization defines it as:
Definition: \For`mu*lar*i*za"tion\, n.
The act of formularizing; a formularized or formulated
statement or exhibition. --C. Kingsley.
Formularization merely applies to the mathematical application of a formula to
the solution of a problem. Indeed, Social Security's benefits, either
calculated, or predicted, are based on the application of a formula.
That is, an act, not a set. And they do not define "formularizing"or
"formularized", and formulated means "devised; developed according to an
orderly plan". This is not how you you used the word --- you intended to say
that formulas were applied, not that the formulas were devised and
developed.
Indeed. I am pleased that you have come to that fundamental conclusion.
And while I could find other sources thatr used the word, none
were standard dictionaries (or they just wanted to sell me a
dictionary) --- all were usng the word in highly specific technospeak
jargon, and all were using it in the form Hyperdictionary did - as in the
act of formularization of the JARC program.
Instead of arguing, you could have asked. I would have defined the use of the
term for you. The manner in which I have used it is generally common practice
in making calculations which deign to standardize actions and arrive at
objective and useful information.
MY only point was to show that the 72% figure IS NOT based on current
benefit levels, as many right wing liars assert, but is based on
projected
benefit levels in 2042, and that even at the 72% level those bemefits
exceed
current benefits. Right wing liars are trying to make the minor molehill
a
major mountain, and I was merely doing a little shoveling.
I'm not going to get into a semantic dispute over what the maximum
benefits
actually are. The 72% figure is used to express the level of benefit
Social
Security will be able to pay with respect to whatever the maximum benefit
is
projected to be at the time.
I don;t know where you got "maximum" benefits --- certainly not from me. I
am talking "expected" benefits, or , if you prefer, "total" benefits.
Fine. I have no objections to your use of terms.
And you are dead wrong about the 72% figure being the percentage of maximum
benefits, as I have said twice now. It is the percentage of EXPECTED
benefits.
Fine. I meant maximum benefits not to apply to individual benefits, but to the
maximum available benefits to the system as a whole. I have no qualms about
using your terms.
That is, if your legally mandated benefit is $1.00, they will be
able to pay $0.72. If your beneft si $20.00 they will be able to pay $14.40.
It does not say that if your benefit is up to 72% of the legal maximum will
be paid in full, and then capped at 72% of maximum, or only those earning
72% of maximum or less will get benefits and hte rest of the retirees get
bupkiss, or anything like that. It means that EVERYONE will get 72% of what
they "should" have gotten, assuming that the benefits formula has not
changed.
Fine. No problem. The result is the same.
Reactionaries make many claims, most of them fail to meet the test of
validity
when even fundamental mathematics are applied. If we adopt the
President's
plan, we can expect that the defined benefit of Social Security will be at
a
level of under 50% of whatever the maximum projected benefit is. Given
the
fact that the private plans will be expected to make up the difference, it
appears quite unlikely that such will be the case, assuming a reasonable
rate
of return. Only using the most optimistic rates of return will the
private
plans even equal the defined benefit that they are supposed to replace. A
very
bad business for the unsophisticated investor, or even the sophisticated
investor, and only serves to remove the 'security' from Social Security.
Again, this is a false statement, if only because Bush has not come out with
a plan yet.
Please. The reactionaries retreat to this defense, because they know that
sufficient details of the likely 'Bush plans have been leaked, and people have
DONE the math, they see that they are indeed NOT in the interests of the
majority of the people. I would hardly have expected one who appears to NOT be
in favor of the Bush plan to support that backtracking. Do you honestly
believe that any modifications of the Bush plan will be significant? I
sincerely doubt it.
It is reasonably close to the numbers floated by some
"revisionists", and is accurate in the conclusion that private investment
will not make up the losses, let alone increase retirement funds.
Of course it's accurate. I've done the math and calculated reserve aggregates
as well as likely annuitized pay outs, even using more highly favorable
mortality tables than individuals are likely to get from the private sector,
and it STILL comes up short. In fact, when you look at the calculations, you
see that the Bush plan, as it has been 'leaked,' does NOT solve the shortfall.
It merely TRANSFERS it to the individual who is foolish enough not to
objectively look at it
Alan
.
|
|
|
| User: "Larry Hewitt" |
|
| Title: Re: Bush's Social Security Scam: The Next Disaster |
26 Jan 2005 11:23:06 AM |
|
|
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F79CCE.45A072DD@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6F311.860844B1@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F6CB81.E758CAA6@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F69545.B21BD977@xyz.com...
Larry Hewitt wrote:
"Alan Lichtenstein" <arl@xyz.com> wrote in message
news:41F63CCD.88A23D8F@xyz.com...
Courageous wrote:
First of all, it is NOT in dispute that if nothing is
done,
in
2042,
Social
Security will only be able to provide 28% [sic: insert
"less"
perhaps?"]
of current benefits. Thus, the benefit as compared to
today's
benefits,
will be 72%
Well I think you didn't phrase that right. But I believe
we're
in
approximate agreement, certain assumptions withholding.
Sorry for the misstatement. The shortfall is 28% and the
level of
benefits is 72%.
Just for the sake of accuarcy, the shortfall is not a
percentager of
"current" benefits, but of "projected" benefits. The
payments at
theat
time
will still be higher than they are today.
Indeed it is. The trustees of Social Security had no frame of
reference
in
predicting the shortfall, other than current benefit levels,
as
they
exist
now. They cannot predict any changes which have not as yet
been
made,
which
would change the benefit levels. So the projection is that
the
benefit
level,
if nothing were done, would be only 72% of what it is now.
No no no no no. Benefit increases are currently mandated by law,
calculated
on the increase in the average family income. Based on economic
projections,
the trustees can and do compute these increases as part of their
model ---
the same projections are used to calculate the number of
retirees,
FICA
taxes paid, average income levels (and therefore the projected
benefits
paid
to new retirees), expected disability payments, and a whole lot
more.
Basic
actuarial science.
Your explanation is what I meant with regard to benefits. I
understand
those
actuarial considerations. i thought your assertion was meant to
apply
to
actual benefits rather than predicted benefits based on current
information and
formulas. I see that we are in agreement. The shortfall is the
projected
deficit based on current information and formularization as those
formulas
currently are used.
This is why one methid under discussion for lessening the
shortfall
is
to
change the way benefit increases are calsulated from the
rate
of
change
of
income to the rate of change of costs.
This is just a benefit reduction in another guise. Nothing
more.
True. But it is a suggested change in the law mandating benefit
increases.
I understand that. However, it must be unmasked for what it is.
Changes
in
wages have risen faster than indexed prices, hence, to change the
formularization is in effect, decreasing benefits.
Again, these increases are currently MANDATED BY LAW, and are
calculated
as
part of the general economic projections used by the trustees to
determine
the health of the system.
I agree. So what is your point, exactly?
You have confused the bejeezus out of me. I accept that we agree,
but I
still cannot follow what you said --- "current information and
formularization as those formulas currently are used." is
indecipherable
to
me.
Current information meaning the information which is currently being
used
by
the trustees to predict benefits. Formularization meaning those
formulas
which
are currently being used to calculate benefits.
Well, I DO want to get into a semantics battle There is no need to
specify
&qu | | | | | | | | | | | | | | | | | | |
