Privatizing Social Security

[Revolution 9]

Romney, and Ryan both for it although slightly different.

Doesn't sound too bad in theory if it's voluntary. What is the great risk here?
Is it that depending on what you choose to invest your money you could lose all or most of it?

Would love some opinions, and knowledge shared here.
Are you for or against it?

 

[Gyp Rosetti]

Without a link, based on what you've described, is it basically like a 401K or 403B? We could contribute x amount per month...so would the government...and we would reap the bennies at 65 or whenever? But no, it would be privatized so there'd be no gov't contributions. So who would "contribute" then? Some private company? Why would they? Wouldn't it just be like having a 403B or 401K?

 

[Revolution 9]

Without a link, based on what you've described, is it basically like a 401K or 403B? We could contribute x amount per month...so would the government...and we would reap the bennies at 65 or whenever? But no, it would be privatized so there'd be no gov't contributions. So who would "contribute" then? Some private company? Why would they? Wouldn't it just be like having a 403B or 401K?

We would be investing in private companies is my guess. Our own money would be used to invest in stocks.
I'd like to know more about it. In theory it sounds like worthwhile idea. I'd like to know more.

 

[franklin]

I'm in favor of moving toward a sovereign wealth fund hybrid model. I see no reason to allow utility monopolies when there's plenty of funds for old people to own these productive assets. How much less I would bitch about my cable bill constantly rising--which is anti-capitalistic no?--if the money was going to my grandparents.

Also, if they were privatized then a very large chunk would purchase the same Treasuries as the trust fund currently holds, which would make the obligation mandatory which weakens the budgetary outlook.

 

[Gyp Rosetti]

We would be investing in private companies is my guess. Our own money would be used to invest in stocks.
I'd like to know more about it. In theory it sounds like worthwhile idea. I'd like to know more.

I don't know much about financial investments but it sounds shaky to me. Would we be "forced" to invest a certain amount from each paycheck into this? Into stocks essentially? Color me very skeptical. I know our system's broke but there has to be a better solution than this which sounds like a ton of risk with mediocre reward.

 

[franklin]

Another solid option would be allowing individuals to opt out of the federal program & into a state pension system (with much tighter regulations & more contribution based payout rates). State of Utah's Tier I program pays 13.44% into the pension fund, compared to 13.3 into SS under the non-stimulus rates. Funds would have to be transferrable across state lines or back into & out of the ss trust fund.

 

[Gyp Rosetti]

I'm in favor of moving toward a sovereign wealth fund hybrid model. I see no reason to allow utility monopolies when there's plenty of funds for old people to own these productive assets. How much less I would bitch about my cable bill constantly rising--which is anti-capitalistic no?--if the money was going to my grandparents.

Also, if they were privatized then a very large chunk would purchase the same Treasuries as the trust fund currently holds, which would make the obligation mandatory which weakens the budgetary outlook.

Can you explain, from beginning to end, what you describe here? I get paid twice a month. In each check, let's say $50 went toward your model. Where would it be going exactly? How would it work? In layman's terms, please.

 

[JAZZGASM]

Without a link, based on what you've described, is it basically like a 401K or 403B? We could contribute x amount per month...so would the government...and we would reap the bennies at 65 or whenever? But no, it would be privatized so there'd be no gov't contributions. So who would "contribute" then? Some private company? Why would they? Wouldn't it just be like having a 403B or 401K?

The difference is part of our mandatory FICA payments could be directed by us for our own retirement. The problem with Social Security is it was underfunded from day one as people that never paid in received retirement benefit. It worked at the time because the baby boom could afford to keep up with the smaller population in retirement. Now the baby boom is retiring and there aren't as many wage earners to keep up anymore.

Letting part of our required FICA payments go into our own accounts will ensure we have something at retirement.

Maybe we should just start a new social security fund that will give us retirement benefits and let our future generations deal with it...

 

[franklin]

Can you explain, from beginning to end, what you describe here? I get paid twice a month. In each check, let's say $50 went toward your model. Where would it be going exactly? How would it work? In layman's terms, please.

Sovereign wealth funds own productive stuff & bonds instead of IOU's that can be voted away. Basically, part of your ss contributions would go into funds that buy companies. The funds would be government ran & could acquire voting controll of utilities & such, or could fund municipal projects like toll roads that have been trending into private hands. Why should we sell infrastructure projects to private monopolies when we have these funds lying around? We can help shore up the budget & fix part of the "future generations" problem.

 

[Gyp Rosetti]

Sovereign wealth funds own productive stuff & bonds instead of IOU's that can be voted away. Basically, part of your ss contributions would go into funds that buy companies. The funds would be government ran & could acquire voting controll of utilities & such, or could fund municipal projects like toll roads that have been trending into private hands. Why should we sell infrastructure projects to private monopolies when we have these funds lying around? We can help shore up the budget & fix part of the "future generations" problem.

Random thoughts...and I apologize in advance if I've misinterpreted anything you've stated.

"Productive stuff"? Meaning what exactly?

I'm still not seeing how this is a good thing. We'd still be giving money to the government, the very people who've created our ss problem, and then let them run with it as they deem fit. Why should we trust them to do right by this? I would guess it would go even more toward their own buddies or special interests. Not my own.

Isn't privatizing infrastructure projects much more cost-friendly than the ******** bid process that's currently in place between unions and states? Maybe I'm off as to what you were getting at here.

 

[Gyp Rosetti]

Let me just add that I am assuming when you say IOU's, you're referring to our current SS program. If so, I agree with you and think we need major reform. I simply don't like the idea of giving it to the government, as you stated, so that they can then spread it where they want, so their buddies get rich, get big bonuses, and hopefully don't need a bailout to not go belly-up.

 

[Hotdog]

I'll opt out of the whole thing right now if they gave me the option. SS is a mandatory pyramid scheme, and it's never going to work the way it should as long as there is massive inflation.

 

[Dr. Jones]

Busy day, but can't wait to get back later and read this thread (haven't read anything yet).

 

[franklin]

"Productive stuff"? Meaning what exactly?

Owning shares in publicly traded corporations being the simplest example.

I'm still not seeing how this is a good thing. We'd still be giving money to the government, the very people who've created our ss problem, and then let them run with it as they deem fit. Why should we trust them to do right by this? I would guess it would go even more toward their own buddies or special interests. Not my own.

I share the same concerns. However, if it were privatized then we'd be giving our money to "their own buddies or special interests" to invest on our behalf anyway. There have been a few studies out lately showing just how much we're already getting ripped off by institutional investors. Banks already have a subsidy built into the system & have been picking up plenty more over the last few decades. They don't need another.

Isn't privatizing infrastructure projects much more cost-friendly than the ******** bid process that that's currently in place between unions and states? Maybe I'm off as to what you were getting at here.

Each state's bidding process wouldn't change. The only difference is who you sell the project to in the end. We don't have real toll roads in Utah so I'll defer to you out-of-staters on whether the public or private manages these best. However, with a government commission overlooking these monopolies, I don't see how we couldn't set up a similar program where a ssn owned toll road is ran like a private concern incentive wise while fighting with the state commission on rate levels.

We already have non-profit utilities ran as private companies but owned by a conglomerate of municipalities. I've seen these operated just as efficiently as the privately owned ones like Pacificorp while being multiple times better to employees & providing cheaper energy as there's no Warren Buffett vig raked off the top. If social security were to own power companies then it would still have to compete with these corporations, so the government corruption incentive would be minimized at least in part.

Let me just add that I am assuming when you say IOU's, you're referring to our current SS program. If so, I agree with you and think we need major reform. I simply don't like the idea of giving it to the government, as you stated, so that they can then spread it where they want, so their buddies get rich, get big bonuses, and hopefully don't need a bailout to not go belly-up.

Agreed. I want to dramatically raise the retirement age on those able as it's more than long overdue. Adjusting retirement to life expenctency increases should be job number one. Transitioning toward self-sustaining funding can come next.

 

[Revolution 9]

Another solid option would be allowing individuals to opt out of the federal program & into a state pension system (with much tighter regulations & more contribution based payout rates). State of Utah's Tier I program pays 13.44% into the pension fund, compared to 13.3 into SS under the non-stimulus rates. Funds would have to be transferrable across state lines or back into & out of the ss trust fund.

This seems like a good option to me. The problem with getting anything done is that to appease the other side compromises are made on every issue.
This is why we need both parties to stop demonizing each other, and make deals to get this country back on track. Instead of compromising an issue
to death basically ruining it or making it less than it can be.

The problem is both sides, the right especially, don't want to meet in the middle. Both sides have some good ideas, and neither is going
to get there way for everything. I'd be all for working together to make the best national health care possible, and the dems support this
going through. Let's trade universal health care for privatizing social security. Both sides get something they want, and get to take the lead on their issue until it's fully realised.

Oh the thinks you could think up if you only tried...

 

[The Thriller]

So what happens if someone opts out of SS, makes bad investments, and then has nothing at an older age? Rely on charities and family members? What happens if that doesn't work out? Starve to death on the streets? Will repubs finance assisted suicide so folks won't have to suffer a slow horrible death on the streets?

IMO, it is better to maintain that safety net than to try and score jackpot via private investment. IMO, privatizing SS is one of the worst ideas in a huge cloud of horrible ideas floating in our political arena right now.

Adjust the payroll tax, and most of these "Armageddon" SS prophecies are gone.

 

[candrew]

So what happens if someone opts out of SS, makes bad investments, and then has nothing at an older age? Rely on charities and family members? What happens if that doesn't work out? Starve to death on the streets? Will repubs finance assisted suicide so folks won't have to suffer a slow horrible death on the streets?

.

Under Ryan's plan the goverment backs the individual's investment. If they tank - the government steps in and makes up the difference.

Under Bush's plan the individual would have to buy insurance guaranteeing a minimum rate of return.

 

[TheSilencer1313]

Under Ryan's plan the goverment backs the individual's investment. If they tank - the government steps in and makes up the difference.

Under Bush's plan the individual would have to buy insurance guaranteeing a minimum rate of return.

Ryan's plan is not sustainable, unless you cut massive spending somewhere.

As where Bush's plan is at the very least, left up to the individuals to actually think and plan for themselves a little bit.

 

[candrew]

Ryan's plan is not sustainable, unless you cut massive spending somewhere.

Ryan's plan also calculates real return on equity stocks at 6.4% - another fantasy.

Of course there is the other matter of the billions and billions of dollars in Social Security tax coffers (that both republican and democratic administrations raid to pay for present day expenses) which will no longer be available.

 

[Former Member]

This was actually a very impressive thread to read. It doesn't sound like Ryan's plan is too sustainable. Am I to understand that Bush's plan is better than Ryan's plan when it comes to privatizing SS? I'm extremely wearisome about allowing a bunch of kids (who think they will live forever) to risk their safety net at old age. If they chose to pull out and they lose everything, why should the government fill in the gap? That would eliminate all risk on the investor's behalf. I just don't see privatizing SS as a feasible option (I'm sorry I don't know a lot of the nuts and bolts about how it would work). Because if there is no risk for the investor... everyone is going to risk their safety net so they can possibly get more money. Then the government is going to struggle covering the losses.

It's amazing... when the stock market dropped to under 9,000 under Bush nobody talked about privatizing SS anymore. In fact, I remember a lot of people pointing to the fickle stock market as a reason Bush's idea is bad. Yet, all of a sudden, the stock market is back to over 13,000 and people are beginning to think that privatizing SS is a good idea again.

Does anyone know how long it will be until our current well runs dry?