Author Topic: Social Security Running Dry?  (Read 13803 times)

jmusic

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Re: Social Security Running Dry?
« Reply #50 on: February 11, 2015, 01:21:39 PM »
If you don't believe taxation is theft then don't give the government any money and see how long it takes before the extortion begins. If you personally want to give the government money then go ahead and do so on your own terms, but do not impose your will with the threat (and use) of violence upon those who do not wish to give anything to government. The only "tool" the government has to enforce laws is violence, as that is the logical conclusion of all attempts to enforce the law. You'd could get whatever it is you want from government for far cheaper through an individual or private organization, unless of course what you really want is to control other people who are in no way associated with you.

I can understand to a point the Libertarian philosophy, but if it was taken to the logical conclusion, the end result would be no government at all (anarchy).  Whether you individually partake of all the government services or not, you still benefit from them through protection from foreign invasion, disaster assistance, our world-class healthcare system (R&D often funded by grants), protection from criminals, assistance if your house catches fire, a modest retirement plan through Social Security, roads, schools, running water piped into your home, trash removed from your home, legal protection of PRIVATE PROPERTY, etc. 

Sure, we could privatize most or all of these, but I don't believe that is always the answer.  What would a private water company care if they tear up the roads to fix some pipes?  Would they be responsible for damage to your lawn or house?  How would a privatized military protect paying customers but not everyone else? 

I for one do not want to live in a "Mad Max" world by choice.  If I did, there's probably somewhere in the world I could move to that's like that right now (Afghanistan? North Korea?).  I do enjoy the benefits of living in the USA, and I also contribute to providing those very benefits to others through my service in the military.


It is true in my case simply because if my employer did not spend on me what they were willing to pay me previously, I would go elsewhere. Changing jobs tends to give a good pay increase anyway, 6.2% less tax would ensure I see more of that pay bump. What someone else would do, regardless of the pay or nature of their work, or how much (if at all) they choose to plan ahead with is none of my business and does not justify the threat of violence required for the government to collect money they did not earn.

Again, I wasn't arguing against your case specifically, as you likely have an in-demand skill and are paid accordingly.  My point is that the government needs to protect (most) people from themselves as has been proven time and time again. 

SS is a plan imposed by the govermnet for people who fail to plan. Is it a perfect plan? 

Nope, but it's better than none at all.


For further reading, here's a recent article on this topic from another "frugal" blogger:
http://livingstingy.blogspot.com/2015/02/make-social-security-optional.html

mm1970

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Re: Social Security Running Dry?
« Reply #51 on: February 11, 2015, 01:47:13 PM »
If Congress just got rid of the income cap for SocSec, the problem would be solved with 99% of workers not feeling anything different.

For a little while - however the general trend is for people to live longer and longer lives.  When Social Security was enacted in 1935, retirement age was defined as 65 years old and the life expectancy of the average American was just 61.7 years.  Think about that for a while any time you view Social Security as an entitlement: it was created only to apply to people who lived significantly longer than average.

One option could be creating a benchmark for retirement age that floats with life expectancy, same as the benefit itself is based on inflation.  For example, it was created to pay out 3.3 years after the average age of death.  Today it pays out an average of 12 years before death.  If you float the retirement age to be based on X years before average death, that too would go a long way towards keeping it solvent for the long run.

Raise the contribution cap, raise the overall tax rate a little, phase out payments for people who already have high income in retirement, and peg the benefit to start X years before the average age of death.  It's actually a very easy program to fix because it already collects enough to pay out about 80% of the benefits, and this is in the so-called "broken" state of affairs!
Yeah, my Dad went on SS at 62 (I think), and lived to be almost 82.

My mom went on SS at 65, and died at almost 67.

Big difference.

I have two sisters who are on SS now, early 60's, very healthy.  Who knows how long they will live!

beltim

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Re: Social Security Running Dry?
« Reply #52 on: February 11, 2015, 02:36:14 PM »
SS won't go away, and it can't go "broke", it just runs out of the money it previously gave to the general fund and must meet all new expenditures with new revenue. The closer we get the more likely changes will be made to make the system "work" to some degree or another. Obviously it won't likely stay the same, but changes don't have to be draconian. I have no idea if the fix will mostly depend on increasing revenue or decreasing expenditures, or an even mix of both. And I don't much care since it is 30 years off for me and I won't need it since I'll FIRE before then without planning to use it. But when it does show up I look forwarding to using that money for extras, maybe sending a grandkid to college or something. :)

Yes, exactly.  Repeat after me.  There is no Social Security trust fund.  There is no Social Security trust fund.  There is no Social Security trust fund.  This is a marketing gimmick by politicians.  All money collected via the "Social Security Tax" goes into the general fund, the same as the gas tax, income tax, and all other revenue.  The only "shortage" is the tax dollars designated as "Social Security" don't cover the payouts.  This is essentially meaningless, and can be solved by myriad options, including raising other taxes, cutting spending in *any* other area, adjusting payout amount or schedules, or any combination of those.

Exactly. We should start by getting rid of the charade that social security taxation and spending is somehow separate from other government taxation and spending. Money comes in, money goes out. The "trust fund" is smoke and mirrors. Get rid of it.

After that, I would add some form of means testing to the program. If you have a stash of your own, you should be expected to spend most of it before you get any government benefits. The benefits should be set to a high enough level to guarantee a reasonable standard of living, but not so high that people would try to spend their own stash at an accelerated rate so they can get on social security sooner.

I might even go so far with the means testing as to put a family obligation into it, similar to college financial aid but without the loans. When you apply for social security each year, you'll need to submit information about your kids' income and assets to show that they can't afford to support you on their own. Prior to social security there was a moral obligation to support ones' parents once they can't work anymore because nobody else will keep them fed and housed. Social security distributed this obligation to all workers, but maybe a hybrid approach would be better where you still have an obligation to your family but there's a safety net if you can't afford it.

For the bolded: how do you get rid of something that doesn't exist?

For the remainder: Dude is absolutely right on this one: there is not a faster way to kill Social Security than to means test it and make it a welfare program instead of a progressive retirement plan.  Personally, I think killing Social Security would be extraordinarily bad for the country.

Sid Hoffman

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Re: Social Security Running Dry?
« Reply #53 on: February 11, 2015, 02:52:02 PM »
Someone on page 1 pointed out that Social Security is already means tested by taxation.  I suppose that's true if you look at it that way.  Once you make over $25,000 as an individual or $32,000 as a couple by IRS rules, your Social Security income is up to 85% taxable.  The complete math is a little complex, but it still stands that Social Security already does in fact have means testing, just in a roundabout way where they say "Hey, here's your Social Security check!  Oh wait, you make a lot of money, so you need to give us some of that SS money back when you file your taxes.  Thank you!"

So that gives another lever to pull in addition to the many levers already mentioned: the threshold at which SS income becomes taxable can be lowered if needed, although IMHO it's already pretty low to begin with, especially with many seniors undoubtedly being like my parents who even at their young ages are spending about $1500/month on supplemental medical insurance in addition to what little Medicare covers for free.  If we wanted to make healthcare more affordable for seniors then they wouldn't need so much money to retire in the first place.  $1500/month is $18,000/year just for health insurance on top of medicare.

Honestly, I see healthcare as a way bigger problem than disability or old age benefits.

jmusic

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Re: Social Security Running Dry?
« Reply #54 on: February 11, 2015, 04:44:54 PM »
For the remainder: Dude is absolutely right on this one: there is not a faster way to kill Social Security than to means test it and make it a welfare program instead of a progressive retirement plan.  Personally, I think killing Social Security would be extraordinarily bad for the country.

For those keeping track, SS is actually a REgressive tax.  Progressive taxation implies that those who make more pay a greater percentage of their income than lower income folks, which is not the case due to the SS income ceiling. 

beltim

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Re: Social Security Running Dry?
« Reply #55 on: February 11, 2015, 04:52:33 PM »
For the remainder: Dude is absolutely right on this one: there is not a faster way to kill Social Security than to means test it and make it a welfare program instead of a progressive retirement plan.  Personally, I think killing Social Security would be extraordinarily bad for the country.

For those keeping track, SS is actually a REgressive tax.  Progressive taxation implies that those who make more pay a greater percentage of their income than lower income folks, which is not the case due to the SS income ceiling.

It's a regressive tax, but because the payout is so insanely progressive, it's a progressive system overall.  In other words, the lower your income, the greater percentage benefit you get in retirement.  The overall effect shifts money from the high-income workers to the low-income workers.

wtjbatman

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Re: Social Security Running Dry?
« Reply #56 on: February 11, 2015, 05:12:48 PM »
Can we make a Category for political ranting so I can completely avoid it. There was a day on this site when a topic like this would give some useful info and stats on social security ( or any other topic for that matter). More and more it now turns into some left/right bashing which is totally pointless, it like fucking Fox News or  Marketwatch, everyone here needs a dose of reality and stop whining.
MMM posted an article some time back ( maybe someone can find it ) talks about the fact that as we are sitting here reading this blog suggests we are better off than 99% or the worlds population ( or something like that ) - so STFU.

Complaining about political ranting while bashing fox news... got to love it lol ;)

I was totally going to comment on that. Thanks for jumping ahead of me and stealing my thunder.

Kind of like all those boomers who are going to steal my social security. Am I right?

Indexer

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Re: Social Security Running Dry?
« Reply #57 on: February 11, 2015, 05:20:06 PM »
For the bolded: how do you get rid of something that doesn't exist?

For the remainder: Dude is absolutely right on this one: there is not a faster way to kill Social Security than to means test it and make it a welfare program instead of a progressive retirement plan.  Personally, I think killing Social Security would be extraordinarily bad for the country.

There is a SS trust fund.  Its small, and completely invested in T bonds.  So through the T bonds the whole thing has been loaned back to the government for spending.  This isn't surprising, the government invests all the money it can back into T Bonds(loans to itself).  Look at MyIRA or the G fund in government retirement accounts.  The trust fund is insignificant, unable to really pay for anything.  Its talked about in politics because the Democrats can say it exists so everyone feels better, and then the Republicans can say the Democrats spent it all and its all IOUs because technically its invested in Government Bonds so technically it was loaned back to the government and spent.  Doesn't matter, its a tiny political talking point, and does nothing to help SS's long term insolvency. 

This brings up a bigger issue.  Its been said before and everyone who has said it has been criticized, in some cases publically... it doesn't change the harsh truth.  Its a ponzi scheme.  Its very design is that of a ponzi scheme.  No one can get 'their' money back out.  Its already gone.  Current inflows from person A cover current outflows for person B.  Sometimes there is a small surplus which is where the 'trust' fund came from, but the trust fund is insignificant and shrinking due to deficits.

Just like a Ponzi scheme it works great while its growing, but once outflows are greater than inflows the whole thing starts to unravel.  Person A can't get their money back, person B just spent it. 

I'll agree getting rid of SS would be devastating to our country.  Equally its very creation was a horrible mistake.  I think having a big insurance plan to assist people makes sense, but setting it up as a blanket pension for all with no regards to the money put in or life expectancies was moronic.  Why not set it up like what it was suppose to be... an insurance policy?   Here the money you put in over your lifetime equals X, and on the day you retire X will buy you $____ income per year for life.  Also nice would be if the money going in was kept separate so it was allowed to grow(instead of going right back out the door).  As a second thing include disability insurance and make it work the same as 'traditional disability insurance'!
« Last Edit: February 11, 2015, 05:22:18 PM by Indexer »

surfhb

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Re: Social Security Running Dry?
« Reply #58 on: February 11, 2015, 05:41:11 PM »
There are not enough eyeroll emojis for the idea that taxes are theft and extortion.

Theft: the taking of another person's property without that person's permission or consent with the intent to deprive the rightful owner of it.

Extortion: the practice of obtaining something, especially money, through force or threats.

If you don't believe taxation is theft then don't give the government any money and see how long it takes before the extortion begins. If you personally want to give the government money then go ahead and do so on your own terms, but do not impose your will with the threat (and use) of violence upon those who do not wish to give anything to government. The only "tool" the government has to enforce laws is violence, as that is the logical conclusion of all attempts to enforce the law. You'd could get whatever it is you want from government for far cheaper through an individual or private organization, unless of course what you really want is to control other people who are in no way associated with you.


While that might be true in your case that some of the employer contribution would be transferred to you, I highly doubt that folks working blue-collar jobs would ever see an extra dime, and they're arguably the folks that need SS the most.  Let's face it, SS is there for the Joe Paychecks who never plan ahead. 

It's nice to have for everyone else, but we view it as a retirement supplement, not the whole enchilada.  Myself, I'm 33 and fairly certain that SS will still be around when I retire.  The terms may not be the same, but I'll get something.

It is true in my case simply because if my employer did not spend on me what they were willing to pay me previously, I would go elsewhere. Changing jobs tends to give a good pay increase anyway, 6.2% less tax would ensure I see more of that pay bump. What someone else would do, regardless of the pay or nature of their work, or how much (if at all) they choose to plan ahead with is none of my business and does not justify the threat of violence required for the government to collect money they did not earn.

Just think?!   If we abandoned SS, you'd be able to build those gun towers you always wanted!   :)

Eric

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Re: Social Security Running Dry?
« Reply #59 on: February 11, 2015, 06:14:08 PM »
This brings up a bigger issue.  Its been said before and everyone who has said it has been criticized, in some cases publically... it doesn't change the harsh truth.  Its a ponzi scheme.  Its very design is that of a ponzi scheme. 

No, it's not.  That's just silly.  A Ponzi scheme is based on fraud.  That's the basic design.  So ask yourself a simple question.  Is there fraud involved?  If not, then by definition it cannot be a Ponzi scheme. 

http://www.washingtonpost.com/blogs/wonkblog/post/is-social-security-a-ponzi-scheme/2011/08/25/gIQA2t0dcL_blog.html

Quote
What makes a Ponzi scheme a Ponzi scheme is that itís a giant fraud. .... In Social Security, conversely, itís perfectly clear what is going on. Every year, Social Securityís actuaries release an insanely detailed report on the systemís finances, its balance of payments, the potential problems it could face, and so on. You can read their report here. In a Ponzi scheme, the finances are a secret, and thatís central to the enterprise. In Social Security, they are, as a matter of law, public.
"Compound interest is the most powerful force in the universe."  -- Einstein

Sid Hoffman

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Re: Social Security Running Dry?
« Reply #60 on: February 11, 2015, 07:19:44 PM »
It's a regressive tax, but because the payout is so insanely progressive, it's a progressive system overall.  In other words, the lower your income, the greater percentage benefit you get in retirement.  The overall effect shifts money from the high-income workers to the low-income workers.

Yeah that's exactly the point I was about to make.  Here's the exact figures for calculating benefits in 2015:

Quote
PIA formula
For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2015, or who dies in 2015 before becoming eligible for benefits, his/her PIA will be the sum of:
    (a) 90 percent of the first $826 of his/her average indexed monthly earnings, plus
    (b) 32 percent of his/her average indexed monthly earnings over $826 and through $4,980, plus
    (c) 15 percent of his/her average indexed monthly earnings over $4,980.

So you get 90% for your first $10k of income or so versus only 15% for income above $60k/year.  That is a VERY progressive payout schedule.  90/32/15 is about as far progressive as you can get in terms of benefiting the low income workers the most, especially when you take into account that high income workers are the ones who are most likely to end up owing income taxes on their SS benefits once they do actually retire and start collecting benefits.

Sid888

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Re: Social Security Running Dry?
« Reply #61 on: February 12, 2015, 06:02:31 AM »
For further reading, here's a recent article on this topic from another "frugal" blogger:
http://livingstingy.blogspot.com/2015/02/make-social-security-optional.html

Thanks for posting - this is a very good article on SS.

Sid888

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Re: Social Security Running Dry?
« Reply #62 on: February 12, 2015, 06:07:09 AM »
SS won't go away, and it can't go "broke", it just runs out of the money it previously gave to the general fund and must meet all new expenditures with new revenue. The closer we get the more likely changes will be made to make the system "work" to some degree or another. Obviously it won't likely stay the same, but changes don't have to be draconian. I have no idea if the fix will mostly depend on increasing revenue or decreasing expenditures, or an even mix of both. And I don't much care since it is 30 years off for me and I won't need it since I'll FIRE before then without planning to use it. But when it does show up I look forwarding to using that money for extras, maybe sending a grandkid to college or something. :)

Yes, exactly.  Repeat after me.  There is no Social Security trust fund.  There is no Social Security trust fund.  There is no Social Security trust fund.  This is a marketing gimmick by politicians.  All money collected via the "Social Security Tax" goes into the general fund, the same as the gas tax, income tax, and all other revenue.  The only "shortage" is the tax dollars designated as "Social Security" don't cover the payouts.  This is essentially meaningless, and can be solved by myriad options, including raising other taxes, cutting spending in *any* other area, adjusting payout amount or schedules, or any combination of those.

Exactly. We should start by getting rid of the charade that social security taxation and spending is somehow separate from other government taxation and spending. Money comes in, money goes out. The "trust fund" is smoke and mirrors. Get rid of it.

After that, I would add some form of means testing to the program. If you have a stash of your own, you should be expected to spend most of it before you get any government benefits. The benefits should be set to a high enough level to guarantee a reasonable standard of living, but not so high that people would try to spend their own stash at an accelerated rate so they can get on social security sooner.

I might even go so far with the means testing as to put a family obligation into it, similar to college financial aid but without the loans. When you apply for social security each year, you'll need to submit information about your kids' income and assets to show that they can't afford to support you on their own. Prior to social security there was a moral obligation to support ones' parents once they can't work anymore because nobody else will keep them fed and housed. Social security distributed this obligation to all workers, but maybe a hybrid approach would be better where you still have an obligation to your family but there's a safety net if you can't afford it.

Disagree strongly on this -- SS's viability hinges on buy-in from everyone putting in, otherwise, it's a straight-up wealth re-distribution scheme and it will die on the vine.  SS is already skewed to replace more of lower income earners' salaries than higher income people, so perhaps tinkering with that a bit is palatable, but cutting out entire segments of the population because they may have been smart enough to learn valuable skills, find well-paying jobs, and make the sacrifice needed to save and invest while their neighbors pissed everything away is not going to enamor those people to the system, myself included, at which point they will work to abolish it altogether.  THIS is most likely the REAL reason the Right keeps throwing means-testing out there -- they know it will kill the system, which has been their longstanding goal.

Great post - I agree that means testing SS will destroy the program.

Sid888

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Re: Social Security Running Dry?
« Reply #63 on: February 12, 2015, 06:09:29 AM »
Why should the boomers get significantly more than the next generations?  Wouldn't that collapse political support for the entire system amongst the losing generations?
They shouldn't. If you want to keep the payroll tax rate the same for everybody, then I'm saying that we can only sustain this if people get back what you put in. If we're somehow going to switch the system from today's workforce paying today's old people to everybody getting paid what you put in, then we need to build up a buffer to do that. The boomer's wouldn't be getting any more than they are now.
Admittedly politically this is never going to happen. The buffer has to come from somewhere, and that's most likely today's workforce.

Are you talking about capping boomers payouts to what they paid in?

Liberty Stache

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Re: Social Security Running Dry?
« Reply #64 on: February 12, 2015, 06:30:42 AM »
Add yet another (albeit small) reason to reach FI ASAP. Less safety nets = more self-reliance in my book.

So is your policy to not pay those who should be self reliant, i.e. means test?

No, my personal policy in this respect is two-fold:

1) Control what I can control: I control my personal wealth (to some extent), I can't control what the government does on a large scale.
2) Self-reliance: I'm 30, I plan on never needing a pension, SS, SSDI, Medicare, etc.

Nothing in those two "policies" says I don't want to help others who need help.
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GetItRight

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Re: Social Security Running Dry?
« Reply #65 on: February 12, 2015, 06:35:41 AM »
This brings up a bigger issue.  Its been said before and everyone who has said it has been criticized, in some cases publically... it doesn't change the harsh truth.  Its a ponzi scheme.  Its very design is that of a ponzi scheme. 

No, it's not.  That's just silly.  A Ponzi scheme is based on fraud.  That's the basic design.  So ask yourself a simple question.  Is there fraud involved?  If not, then by definition it cannot be a Ponzi scheme. 

http://www.washingtonpost.com/blogs/wonkblog/post/is-social-security-a-ponzi-scheme/2011/08/25/gIQA2t0dcL_blog.html

Call it whatever you like... fraud, compulsion, extortion. While the first is debatable the latter are crystal clear. Either way you slice it it's unethical as it is enforced with the threat of aggressive violence.

dude

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Re: Social Security Running Dry?
« Reply #66 on: February 12, 2015, 08:26:41 AM »
Here's a good discussion on raising the taxable maximum:

http://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html

Personally, I've always enjoyed those several pay periods toward the end of the year when my take-home check was fatter as a result of having maxed out SS contributions for the year, but I wouldn't cry over losing out on it because I think Social Security is vitally important to this country.

Tabaxus

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Re: Social Security Running Dry?
« Reply #67 on: February 12, 2015, 08:33:34 AM »
Here's a good discussion on raising the taxable maximum:

http://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html

Personally, I've always enjoyed those several pay periods toward the end of the year when my take-home check was fatter as a result of having maxed out SS contributions for the year, but I wouldn't cry over losing out on it because I think Social Security is vitally important to this country.

+1

I have a budget item for "post-SS cap investing"--it goes directly to Vanguard--and the bump is certainly nice.  But the cap shouldn't exist.

Sid888

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Re: Social Security Running Dry?
« Reply #68 on: February 12, 2015, 08:44:53 AM »
This brings up a bigger issue.  Its been said before and everyone who has said it has been criticized, in some cases publically... it doesn't change the harsh truth.  Its a ponzi scheme.  Its very design is that of a ponzi scheme. 

No, it's not.  That's just silly.  A Ponzi scheme is based on fraud.  That's the basic design.  So ask yourself a simple question.  Is there fraud involved?  If not, then by definition it cannot be a Ponzi scheme. 

http://www.washingtonpost.com/blogs/wonkblog/post/is-social-security-a-ponzi-scheme/2011/08/25/gIQA2t0dcL_blog.html

Call it whatever you like... fraud, compulsion, extortion. While the first is debatable the latter are crystal clear. Either way you slice it it's unethical as it is enforced with the threat of aggressive violence.

I think its unethical for a society to let "free riders" milk the system. http://en.wikipedia.org/wiki/Free_rider_problem

In economics, the free rider problem occurs when those who benefit from resources, goods, or services do not pay for them, which results in either an under-provision of those goods or services, or in an overuse or degradation of a common property resource.
« Last Edit: February 12, 2015, 08:47:04 AM by Sid888 »

Knaak

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Re: Social Security Running Dry?
« Reply #69 on: February 12, 2015, 09:05:44 AM »
Just think?!   If we abandoned SS, you'd be able to build those gun towers you always wanted!   :)

Gun towers are so 1900s.  I want a drone like Martha in the old sci-fi show Eureka.

fodder69

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Re: Social Security Running Dry?
« Reply #70 on: February 12, 2015, 09:28:41 AM »
There are not enough eyeroll emojis for the idea that taxes are theft and extortion.

Theft: the taking of another person's property without that person's permission or consent with the intent to deprive the rightful owner of it.

Extortion: the practice of obtaining something, especially money, through force or threats.

If you don't believe taxation is theft then don't give the government any money and see how long it takes before the extortion begins. If you personally want to give the government money then go ahead and do so on your own terms, but do not impose your will with the threat (and use) of violence upon those who do not wish to give anything to government. The only "tool" the government has to enforce laws is violence, as that is the logical conclusion of all attempts to enforce the law. You'd could get whatever it is you want from government for far cheaper through an individual or private organization, unless of course what you really want is to control other people who are in no way associated with you.


While that might be true in your case that some of the employer contribution would be transferred to you, I highly doubt that folks working blue-collar jobs would ever see an extra dime, and they're arguably the folks that need SS the most.  Let's face it, SS is there for the Joe Paychecks who never plan ahead. 

It's nice to have for everyone else, but we view it as a retirement supplement, not the whole enchilada.  Myself, I'm 33 and fairly certain that SS will still be around when I retire.  The terms may not be the same, but I'll get something.

It is true in my case simply because if my employer did not spend on me what they were willing to pay me previously, I would go elsewhere. Changing jobs tends to give a good pay increase anyway, 6.2% less tax would ensure I see more of that pay bump. What someone else would do, regardless of the pay or nature of their work, or how much (if at all) they choose to plan ahead with is none of my business and does not justify the threat of violence required for the government to collect money they did not earn.

So move to a country that has no tax! That is the simplest answer to the stoned college freshman level argument you are making here. Taxes are the price we pay for living in a society with a certain quality of life. So go find a country with no taxation and compare that quality of life to what we have here, or countries with similar or greater levels of taxation.

<quote>You'd could get whatever it is you want from government for far cheaper through an individual or private organization </quote>

Ignoring the butchered grammar, what is your evidence for this? I've never understood how adding a profit motive automatically makes things cheaper (cost+profit < cost ?).