The end of Social Security (Not a flame thread)

by Preston 24 Replies latest social current

  • Preston
    Preston

    Do you guys think Social Security will ever be reformed? During the election Bush proposed to fix Social Security through private accounts but given the stock market's last couple of years I don't think private accounts are going to be the solution to it all. This is not a post written with the intent of bashing a single person, because frankly I think there's enough blame to go around. I think social security is a great idea but because our government keeps on borrowing from it they really benefit from social security being in place for the time being without the immediate prospect of people given the option of taking their percentage that gets taken out from their account (here in Arizona its 6.2%) and having it put into a private account. In other words, there will be a lot of talk around this but...it will never materialize. It will just run out and then the government will have to take a hard look at how to exploit its citizens financially in different ways.

    I researched the issue and I think as much as we've isolated ourselves in different ways in the world, the world is still a business and foreign investors play the biggest part in keeping our system in place.

    I read in Wall street journal that Foreign investors and Social Security tax receipts have helped pay for the majority of it. The main reason why this is important is because not all of our national debt is something we owe ourselves. Treasury statistics show that since Bush took office, foreigners have put up more than 90 percent of the cash it's taken to keep our government's checks from bouncing. From January 2001 through this past August, the amount of "privately held" Treasury securities (as opposed to those held by federal trust funds) rose by $910 billion. During this period, foreigners' privately held Treasury securities rose by $830 billion?91 percent of the increase. Foreigners now own 43 percent of our privately held national debt, up from 30 percent in 2001. If foreign central banks that are major purchasers of Treasury debt cut way back or stop entirely to protect their own currencies, for instance, or diversify into euros we'll be vulnerable, extremely vulnerable.

    Unless you expect the rest of the world to lend us cheap money forever, which I don't, then the main issue is clamping down on how much we're borrowing from it.

  • bigboi
    bigboi

    My feeling is that a lot of those countries that loan us money are extremely dependent on the interest payments made in US currency generated by the aforementioned loans. I think basically that they bet on the ability of the US economy to re-bound from a bad economic downturn and to continue to make those timely interest payments on the debt we owe. However, that will change when the Baby Boomers retire and a real domestic pressure is put on the SS trust fund. I think that is the reason why Bush wants to use the stock market to grow the fund through individulaized accounts. All in all a lot of places around the world don't want to see the US economy falter badly. There is no other economy that is so deep and varied on the face of the planet. I guess the European Union would be next but they don't allow rich people and corporations to rob the rest of the population blind.

  • battman
    battman

    Dear BigBoi,

    Check out the tax rates of your friendly Euro goverments. The tax rate in Europe is siginicantly higher than the US. Uneployment is also twice the US rate. The economies of France, Germany et al are in terrible shape. The concept of always loading the tax burden on those "nasty" "evil" corporations has been shown counterproductive so many times it is beyond debate. Most companies are very pleased to make 10% net profit. In fact in order to be able to survive the lean times they must make this percentage to survive and be able to provide us all those wonderful modern conviencences we all have come to depend on. When "we" raise the tax rate the corps must raise their prices, lay off people or reduce investment is equipment and plants in order to survive. Witness the Reagan, Bush tax cuts and corresponding economic increases.

    Raise taxes and the economy slows. If a business does not feel it has a chance to make a decent return on risking their capital to make an investment they won't and the econony starts to shrink and you are out of a job.

    What inflation are you talking about? It has been non existant for the last 5-6 years. Quit reading and beleiving the mass media and research the issues and start to think for your self.

    battman

  • bigboi
    bigboi

    Battaman,

    I'll just respond to a few points you made.

    When "we" raise the tax rate the corps must raise their prices, lay off people or reduce investment is equipment and plants in order to survive.

    A large tax burden can have an adverse effect on corporations bottom lines. However, what do you say to corporations who post profits, but then send jobs overseas or choose to layoff workers anyway. Also, what about corporations who dodge paying millions of dollars of income taxes throug loopholes in the tax code, despite having a lot of their business subsidized by taxpayer money.

    Witness the Reagan, Bush tax cuts and corresponding economic increases.
    I thought the jury was still out on the Bush tax cuts and their effect economy. However as far as Bush1 and Reagan are concerned I seem to remember Clinton asking the public to support the largest tax increase in history to offset that twelve year period of record setting deficits. Thereafter we enjoyed one of the most properous periods of economic growth the nation had ever seen. Fiscal responsibility and nurturing new industries and technologies can be as effective as tax cuts.
  • roybatty
    roybatty

    I'll give you a personall example. I just had to lay off two workers who were each making $25.00 an hour plus the standard benefits. There were a few reasons involved but a main reason was that I can't afford the federal payroll taxes (FICA, etc.) It's especially brutal when my guys put in over time. These tax laws are killing small businesses. It sucks when a corporation sends job overseas but it's even worse when small business close their dorrs because of these tax burdens.

  • Elsewhere
    Elsewhere

    Conservative America will not fix Social Security any faster than it will improve environmental regulations. Conservatives don't seem to understand the saying: An ounce of prevention is worth a pound of cure. Instead, they wait until all hell is breaking loose and then they throw far too much in resources at the problem than they should ever have needed.

    When I review my retirement finances, I don't even factor in any Social Security. That is how doubtful I am that they will ever fix it. As far as I am conserned all of the money that is being taken out of my paycheck for Social Security is just being pissed away. I would MUCH rather put that money into other investments. Hell, even stuffing the money in a matress will provide a better return than what I am expecting from the current system.

  • bigboi
    bigboi
    give you a personall example. I just had to lay off two workers who were each making $25.00 an hour plus the standard benefits. There were a few reasons involved but a main reason was that I can't afford the federal payroll taxes (FICA, etc.) It's especially brutal when my guys put in over time. These tax laws are killing small businesses. It sucks when a corporation sends job overseas but it's even worse when small business close their dorrs because of these tax burdens.

    So, the Bush tax cuts aren't working?

  • Big Tex
    Big Tex

    I've read that GAO (Goverment Account Office) estimates Social Security will go bankrupt in 2019 (approximately). After that, we're SOL.

    It's got to get fixed, but no one in Washington (liberal or conservative) has the desire right now.

  • Happy Guy :)
    Happy Guy :)

    Fiscal responsibility and nurturing new industries and technologies can be as effective as tax cuts.

    Not trying to increase tension on this thread but I just wanted to let you know BB that the above statement is actually factually incorrect.

  • heathen
    heathen

    I thought Ralf Nader made a good point on the fact that 60% of all corporations do not pay taxes and I was very confused when John Kerry said that he would give corporations tax breaks for staying in the US and not outsourcing jobs . I never did like the social security crap they came up with , I think people could use that money to invest in whatever they chose and it would look way more domocratic than what the [email protected]#$ these jerks in washington keep coming up with . I think social security is the biggest mistake the citizens of the US made by forcing people to live on fixed incomes . I also think one of the best things the clinton administration came up with was not taxing social security as income . The Bush administration is one of the worst ever to take power .

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