From: jfh@rpp386 (John F. Haugh II)
Subject: Re: Social Security
Reply-To: jfh@rpp386.cactus.org (John F. Haugh II)
Organization: Los Tejanos SCUBA Club and Beer Joint, Austin, Tejas
Distribution: tx
Date: Tue, 12 Jan 1993 02:44:57 GMT

In article <1993Jan10.201614.23705@novell.com> bboerner@novell.com (Brendan B. Boerner) writes:
>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?

Would you rather they had a bunch of Federal Reserve Notes?

How about you go down to your bank and ask to look at all of the Federal
Reserve Notes they have sitting in the vault.  Will you freak out when
they show you a bunch of IOUs from the Feds promising to pay it back?

Now, ask yourself the same questions you just asked me.  This time, try
to remember that all your bank has is a bunch of IOUs from the government
and that there is no promise the government is going to treat your bank
any different.

>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?

INDIVIDUALLY, yes.  Again, are you going to quit asking your insurance
company for benefits when you, INDIVIDUALLY, collect more than you've 
put in.  Now, ask about all the dead people, and the people who don't
qualify for any benefits, and those who get reduced benefits, and so on.

Try to keep a straight face when you say "yes."

>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?

No, in the case of life insurance, most companies are trying to make
sure they collect TODAY what they are going to put out TODAY.  If all
of the young people with life insurance suddenly decided to cancel
their policies, many of the old people would be screwed when they die.

But people don't suddenly up and decide they don't want life insurance
any more than this country suddenly winds up with no young workers to
fund the Social Security system.  We will likely have more young people
putting in to the system in 40 years than we have today.  Why?  Because
the natural trend in this country is towards increased population.  If
we raise the retirement age so that the same fraction is paying in as
before, and the number of years of benefits received is the same as
before, then Social Security can survive just fine.

Social Security's "evil" comes not from the fact that it's a good or
bad investment, but rather from the fact that it's an INVOLUNTARY
investment.
-- 
John F. Haugh II                  [ PGP 2.1 ] !'s: ...!cs.utexas.edu!rpp386!jfh
Ma Bell: (512) 251-2151           [ DoF #17 ]        @'s: jfh@rpp386.cactus.org
"If we make SS need based, can we change the name to: Failing Incompetents
    Compensation Allotment?"  -- Dr. Michael Reed