From: bboerner@novell.com (Brendan B. Boerner)
Newsgroups: tx.politics
Subject: Re: Social Security
Date: 10 Jan 93 20:16:14 GMT
Distribution: tx
Organization: Novell, Inc. --Austin

In article <1993Jan9.170201.16302@rpp386> jfh@rpp386.cactus.org (John F. Haugh II) writes:
>In article <1993Jan8.145455.4336@novell.com> bboerner@novell.com (Brendan B. Boerner) writes:
>>Sounds like SS is meant to be all things to all people, a common
>>criticism of Democrats, in which case I've got to wonder, why are
>>you defending it?
>
>I'm =not= defending Social Security.  I am simply refuting the claim
>that Social Security benefits the rich over the poor, or that Social
>Security isn't going to be around in 30 or 40 years.  Social Security
>benefits the poor in favor of the rich, by design no less.  As for
>"being around" in 30 or 40 years, unless the government decides to
>waste even more money in the program, it is being funded well enough
>to be around when I reach retirement age.

Sure, by 2010 SS is supposed to have about $1 trillion; however all
that's there now is a bunch of IOUs from the Feds promising to pay it
back.  Considering the current debt and projected deficits, do you
think there's a chance in hell that 1) the money will be paid back, and
2) if it is, that it'll be worth anything?


>>Another way of looking at this is:  suppose that you DO decide to
>>retire and collect SS - you'll collect less of what you paid in, while
>>the previous generation (your dad as an example) will have collected
>>more than they paid in.  Does that bother you?
>
>Aside from the fact that this is a false statement, yes, it would
>bother me.

False?  Which part?  I've seen/read in several places that it currently
takes between 2-4 years to receive benefits equal to what was paid in,
adjusted for inflation.  Is this the part you think is false?  As you
pointed out in a much earlier post, if someone starts paying in on $55K
of income for the next 47 years, then the odds are that that person
will be dead before they collect all of what they paid in.  Is this the
part you think is false?


>Yes, Social Security needs to be abolished.  We need to do this today.
>But you need to stop pretending that an annuity program which pays
>money to people who've paid in is "unfair" because some people will
>receive more than they paid into it.  Perhaps when you start complaining
>that some people who pay for car insurance never get to make claims
>because they are good drives, then I'll take you seriously.

It's an annuity program in which the rules get changed depending on how
much power AARP can wield.  Suppose you sell me an annuity today and I
start collecting in 40 years.  We'll have some sort of contract in
which in exchange for my monthly premiums you'll agree to pay me a
certain amount each month until I die, perhaps there'll be a COLA built
into it if we agreed to that, or whatever, but we know before I make a
single premium payment what each of us is obligated to do.  If I were
to treat you in relation to that annuity like AARP treats Congress in
relation to SS, I'd be banging at your door, demanding that you
increase my monthly payments despite what our contract says.  Is this
right?


>Having the current generation of workers fund the previous generations
>retirees is NOT a bad idea, per se.  Nor is it even a bad idea to raise
>the retirement age as the life expectancy increases.  What is a BAD
>idea is the political games that are played with Social Security to use
>it as a vote buying tool.  For example, I think that an increase in
>Social Security taxes should be matched by a corresponding decrease in
>Social Security benefits.

Hmmm, I think I like this.  It'd address my concern that AARP can get
Congress to raise their benees and charge it to the current SS
taxpayers.


>Again, this does not matter.  Many financial institutions operate on a
>"pay as you go" business.  For example, does it bother you that the
>life insurance benefits provided to someone who dies today aren't paid
>out of the premiums that they paid in over the last 72 years?  Or are
>you happy knowing that EACH YEARS deaths are paid for out of EACH
>YEARS premiums and that the invested reserves only act to lower the
>required premiums for NEXT YEARS policy holders?  I have life insurance
>with the oldest life insurance company in this country.  They are not
>only still in business, but they are one of the most stable life
>insurance companies in the world.  And - they don't pay your death
>benefit or retirement annuity using the same dollars you put it.  They
>pay it using money they received THIS YEAR.  My premiums have already
>been given to someone else.  It's so UNFAIR!


You make a good point, however, these businesses are in well, business
to make money and one of the things they need to do is to try as best
they can to predict the future so that they make SOME attempt to
collect today what they'll be paying out tomorrow.  Congress is not
interested in making sure that SS is actuarily sound its interested in
buying votes.  Even though it may be sound NOW doesn't mean that it
wasn't until, what, 1983 that this attempt was made, and that was,
what, 50 years after SS was introduced?

Brendan
-- 
Brendan B. Boerner    Phone: 512/346-8380    MHS: bboerner@novell
Internet: bboerner@novell.com     \  Please use either if replying
   or  Brendan_Boerner@novell.com /  by mail exterior to Novell.