[excon]

Hello:

Aren't you glad the dufus in chief didn't privatize your Social Security?? You do know, don't you, that John McSame wants to do the same thing? Er... at least he WANTED to, before the flip flop. The stock they WOULD have invested YOUR money into went bust yesterday. That would be AIG - the worlds BIGGEST insurer.

Buy gold.

excon

[tomder55]

I still think the system should be partially phased out and privatized . AIG might have been one of the options of course ;but my guess is that most people would opt for tresury's instead. What is a bad option;risking your retirement money on the market , or letting the leeches in the government guarantee it ?
The Associated Press: Federal bank insurance fund dwindling

Where is the SS trust fund ? In a lock box ? I would be sitting pretty even with the market fluctuations if I could've invested all I've paid into the system myself.

[tomder55]

A libertarian would call Social Security what it is ; a Ponzi scheme that creates a disincentive to private saving because you know the big nanny will be there to give you your pittance in your old age.

While it reduces poverty by providing income to retired persons, it discourages private saving during the working years—ultimately decreasing the private assets people bring to their retirement. The net effect of this is increased poverty among the retired population.

To understand this conclusion, it is important to compare the rate of return on taxes paid that is generated by Social Security to the rate of return people could receive on their private saving. For those retiring in 2008, the average implicit real (inflation-adjusted) rate of return on Social Security taxes paid was slightly below 3 percent—and it is scheduled to decline to under 2 percent in the next forty years. In contrast, if people retiring in 2008 had invested the taxes they paid into Social Security in a balanced portfolio (60 percent stocks and 40 percent bonds), they would have received a return of 5.5 percent.

The difference between a 5.5 percent return and a 3.0 percent return may not sound like much, but in annual returns compounded over a lifetime, this difference has a huge influence on the income available during retirement. In fact, the annual retirement income provided by a 5.5 percent return is double than that provided by the 3.0 percent return of Social Security. Even more compelling, an investment in the stock market averages a 7 percent real return, which would mean an annual income of three times what Social Security provides.

In short, it is likely that we would have fewer poor among the elderly had they been free to invest their taxes in private assets. Once Social Security's rate of return drops to below 2 percent, it will only continue to aggravate poverty in the future.

While this simple comparison is compelling, it overlooks the huge hidden costs of this system. By reducing the incentive for workers to save privately for their own retirement, we reduce the economy's saving and investment in productive assets. This means the economy grows more slowly as a result of Social Security and people end up with lower incomes even before they pay their taxes. When this cost is taken into account, the real return from Social Security to those retiring today is actually negative!

Social Security Increases Poverty: Newsroom: The Independent Institute

[excon]

Hello again, tom:

I don't disagree that that's what it is. I simply suggest that what's left of the fund - (or their idea of what's left of the fund) NOT be privately invested. Because if it was, there would be NO Social Security for those millions of workers, who worked and paid their SS taxes their entire lives. Those people would have lost EVERYTHING.

excon

[tomder55]

That was never the plan the President proposed. He was always going to keep the system the same for people who are already retired or near retirement . His proposal would've gradually phased it out giving younger workers the choice.

Edit : see page six of the pdf
http://www.whitehouse.gov/infocus/so...alsecurity.pdf