Social Security vs. Private Retirement Accounts

[rb3264]

Social Security was intended to be a crutch. Nothing in the system is guarenteed because today's congress really is not bound to the congress of the 1930's. They could repeal social security if they wanted to.

[KittenKoder]

I wish I had the internet when I was younger ... could have saved me a ton of headaches.

[killlagger468]

OMG THIS VIDEO IS AWEEESSSOOMMMMMEEEE!!!!

[wizardry06acer]

@sanitydotorg: If you assume an inflation rate of 3.01% for the next 45 years (22 to 67) and apply that to the maximum monthly social security payment and multiply it by 12 months per year (see the url ssa-custhelp.ssa.gov/app/answe­rs/detail/a_id/5/~/maximum-soc­ial-security-retirement-benefi­t) -- you get actually $107,837. But that's "2056 dollars," not 2011 dollars.

[sanitydotorg]

WTF? Pull out 1.2 million? I think the second half of his graph is a bit skewed to say the least. I've never heard of any one on SS make $80K a year

[Norie92]

@sanitydotorg He said that number is not adjusted for inflation. He said with inflation it'd be around $25k.

[sanitydotorg]

@Norie92

Um what? I was talking about his claim that people on S.S. are drawing $80K a year. Do you know anyone drawing $25K a year on S.S.? No. 4500 a year is more like it.

[imrnlil]

A 100% tax. How about that!

[chifylube]

Can you use graphs and statistics that don't assume I'll live to 100?

[StateExempt]

@chifylube - He already did. 

[billybbob18]

I say get rid of SS all together. At least for those who don't want it. Social Security is a service. If one does not wish to partake in the benefit; then he should be able to opt out. I want out. The reason I want out is because I do not wish to pay for someone's retirement. I want to save for myself. If anyone knows How I can opt out, then please let me know. Thank you.

[nunayafb]

Typical republican, he suggests benefits of private accounts by ignoring all negative aspects. I'd like to know how minimum wage workers are supposed to pay into 401k when they are living check to check? How are working class Americans supposed to grow an account when they to pull money out for emergency purchases like medical, vehicle/home maintenance, etc. How do you not dip into an investment when your job is outsourced? What about war and economic collapse?

There are 2 sides to this coin!

[FletchforFreedom]

@nunayafb Typical economic ignoramous. Minimum wage workers (most of whom are teens or secondary income generators) are already harmed by the regressive nature of payroll taxes. Working class Americans have already demonstrated that they are more than capable of paying for their everyday needs and, in an emergency, they would obviously be better off if they had not been forced to pay into the program. The other issues are non sequiturs (albeit outsourcing is more than offset by INsourcing).

[nunayafb]

@FletchforFreedom You seem to think that poor people are going to invest their minuscule wages into retirement, statistically they won't.

Good job ignoring the other risks I mentioned, keep believing what you want to. I pay into both SS and a 401k, as far as I am concerned it reduces my risk and all but guarantees a pleasurable retirement for me. BTW, it is not the poor who are complaining about SS it is the republicans- few of which are poor.

[FletchforFreedom]

@nunayafb In the real world, very few poor people STAY poor and they are certainly not helped by the regressive taxes that they are subject to under the current system. I ignored the "other risks" you mentioned because they deserve to be ignored. They do not bear on the issue. The risks of which you speak may be addressed in so many ways (insurance and countless other forms of risk management) that the notion that they present a problem on this topic is imbecilic.

cont

[FletchforFreedom]

@nunayafb Moreover, social security is such a bad deal - particularly for the poor - it has the effect of transfering wealth from poor black men to wealthy white women. No matter what other risks one faces, the forcible taking of assets primarily from those who can least afford it to (far under)finance a retiremnt in a future that taxation has made that much more difficult to achieve is monumentally stupid.

[nunayafb]

@FletchforFreedom "transferring wealth from poor black men to wealthy white women" You are making this shit up.

"forcible taking of assets" This is called eminent domain, SS is called taxation.

"who can least afford it..." That is why poor people pay so little in taxes, including SS. The more you make the more you pay. And SS is not you paying for your self it is you paying for the currently retired.

If you want to retire with more money then do it, but why eliminate the security part of SS?

[FletchforFreedom]

@nunayafb I'm not responsible for your ignorance, poor black men start work sooner and live shorter lives. The research is easily located. If you can't grasp that taxation is, by definition, the forcible taking of assets, you need to pull your head out of ... a dark place. And there is NO security in SS sicne the system is bankrupt, few people get even what they pay in, the return even for those that do is terrible and Congress frequently changes the rules.

Grow up.

[vilekyle22]

@FletchforFreedom You forgot about the inflation tax that is HEAVILY felt by those who finally get to receive it. It is a nightmare of a retirement program that nobody would get into unless they were forced to. Why would you accept the results you get from Social Security when you would throw a hissy fit if you ordered no pickles on your burger! THIS IS AN EPIC ROBBERY done unto the American people and you idiots are NUMB!!! YOU ARE LOSING YOUR COUNTRY AT WARP SPEED AND YOU WANT MORE!?!?!?!?

[egcroan]

@FletchforFreedom Blah Blah Blah . Wall Street just wants more of your money, and private retirement accounts is their way of getting you to invest in the largest Ponzi Scheme in existence. Stocks !! We should be glad that everyone wasn't allowed to do this back when then President Bush tried to get approved because the bust of the economy would have destroyed retirement accounts !! The money borrowed from S.S. should be repaid. What's hurting medicare is the cost of medical Care going up!

[FletchforFreedom]

@egcroan In the real world (as opposed to your drug induced fantasies), not only would the stock market have ensured a rate of return that would have resulted in the same amount of investment yielding a greater return even AFTER the crash for the great bulk of retirees, but, given that the funds would have been available in the private sector rather than government, the economy would be tremednously stronger and the likelihood of a crash would have been far less.

[egcroan]

@FletchforFreedom Go on and believe that unproven dribble if you want. BTW no drugs here just the ability to rad books about the depression, and what really happened as opposed to your opinion based upon some conservative writer like Glenn Beck or Bill O. that have no credentials, and publish their biased diatribe as facts. I would suggest you read a book about Brooksley Born's attempt to explain the risk associated with "Derivatives" to Alan Greenspan, but you don't want the facts.

[FletchforFreedom]

@egcroan You apparently haven't read any books about the depression. Try "America's Great Depression", "A Monetary History of the United States", "FDR's Folly" and the related economic research. All are written by well respected economists wh have impeccable credentials (Greenspan doesn't even make it to the bottom of the list of credentialed sources with credibility).

[egcroan]

@FletchforFreedom With that title I can only expect an biased position, and just because some one is an economist doesn't mean they can rewrite the history that clearly shows the FDR programs worked regardless of some theories on paper about what happened in the recoveries in other countries.

[FletchforFreedom]

@egcroanThe only one rewriting history is you.  Again, it isn't that AN economist argues FDR's programs didn't work. Virtually ALL economists acknowledge they didn;t work. Even Keynes himself was critical of FDR. The best example is that one can compare the initially much deeper recession in 1920 which was quickly resolved in the absence of a New Deal.

[egcroan]

@FletchforFreedom BTW just because someone wrote a book doesn't make it fact. The recent sophomoric attempt by Bill O. to write about the Lincoln assassination is just one such example where there have been hundreds of books written about this subject only six and considered by historian to be accurate, and his isn't one of them as he just plain makes up things and/or get them wrong. The critics who read his book slammed it, but I am sure many will quote his untrue claims of prisoner torture.

[FletchforFreedom]

@egcroan One of the authors was Nobel Laureate Milton Friedman; other Nobel laureates taking the same position include Freidrich Hayek. Another is a Keynesian. Unlike O'Reilly's books, these are peer reviewed and highly regarded inthe literature. You keep pretending that everyone who disagrees with you is a right wing nut; I'm not even a conservative; I'm referencing the overwhelming body of peer reviewed scientific research.

[FletchforFreedom]

@egcroan Moreover, the FACT is that what is driving up the cost of medical care is Medicare and programs like it that interfere with the market pricing mechanism and vastly drive up costs. The government pays more than half of medical costs and imposes a system in which costs are so rarely borne by the consumer that no one even knows what the cost of care is. This is a recipe for economic disaster ... as history demonstrates.

[egcroan]

@FletchforFreedom Keep pushing your lies as truth. The cost of Medical is because of the amount of money the Medical Insurance Companies have posted in profits with an average yearly gain of 43% as well as the average salary of a GP doctor being 348K, and specialist being more than double that. Go ahead don't blame medicine or the doctors, but blame the lowest cost providers Medicare. Most of what you say can't be proven so just shut up and spread your ignorant propaganda somewhere else.

[FletchforFreedom]

@egcroan I don't need to lie. I've got decades of economic experience to back me up. Profits invite investment in any endeavor ultimately resulting in a REDUCTION of expenses. Anyone ever claiming that profits drive up costs is demonstrating economic ignorance on a galactic scale. Your 43% figure is also complete BS. And Medicare is a HIGH cost provider that shifts its expenses to others.

I will continue to present the economic facts that are so readily available.

[egcroan]

@FletchforFreedom Why don't you take you supposed decades of economic experience, and use the internet to look at the profits of some of the companies involved in medical insurance. The facts clearly support my case. I see you didn't address the salaries of the medical industry as well as they are not disputable.

[FletchforFreedom]

@egcroan Because the facts clearly demonstrate you're an economic imbecile. Econ 101 - profits are what attract investment; greater investment results in greater economic efficiency (absent monopoly) and, ultimately LOWER prices. Only a blithering idiot EVER argues that profits raise prices.  Supply and demand determine prices subject to those economic efficiencies. So long as you keep looking at profits and salaries, you are doomed to look like a dimwit. Looks aren't always deceiving.

[egcroan]

@FletchforFreedom The profits are directly related to the cost of policies which is how all insurance companies work It's just simple business. Your point is dribble. The profits do not get shared with everyone so again your point is dribble.

[FletchforFreedom]

@egcroan That you ahve no clue how insurance companies work is hardly surprising. In fact, insurance companies of all types tyoically pay out MORE in benefits than they take in in premiums. they make their money investing funds between the time premiums are paid and the time payouts are made. Anyone arguing that profits should be "shred" by anyone simply proves that the only thing between their ears is ... well.. dribble.

[StateExempt]

@nunayafb - Fletch did not make anything up; it has been a known fact for some time that because of differences in life expectancy, low-income black men ten to get less out of Social Security than richer white women who live longer and thus can collect more.

This is due to the fact the latter spends more years of life on average past the retirement age of 65.

[nunayafb]

@StateExempt Even if that is true now, will it be in 20, 30 or 40 years from now?

IF it is true, so what? We should abandon a national security plan because certain groups benefit more than others?

I have yet to hear a single republican explain how to mitigate the risks I mentioned initially, Fletch ignored them completely. Both of you are making this about racism completely ignoring the risks to the country.

This is just republicans wanting tax breaks, everything else is smoke and mirrors.

[StateExempt]

@nunayafb - Probably. If anything I wouldn't be surprised if the life expectancy gap increased even more.

And what does national defense have to do with social security?

What are the risks you claim only government can mitigate? Do you really believe the current social security system is money that could not have been better spent elsewhere?

By the way, the vast majority of people either featured in this channel or having agreement to it are not "Republicans."

[nunayafb]

@StateExempt This life expectancy crap is a red herring argument, SS benefits everyone until they die, regardless of that age.

Social SECURITY it is a NATIONAL safety net, pay attention I never said defense!

What risks? read my original post! Money better spent???? Tell that to everyone who lost their life savings, homes and jobs due to financial deregulation and need SS to survive.

You need to stop thinking about short term benefits for the middle and upper class and think long term for all.

[StateExempt]

@nunayafb - And those that live longer get the most out of it. Simple.

And as for the idea that people would LOSE money under private pensions/IRAs, if you look at the Dow Jones Industrial Average chart for the past century you will see that the stock market increased by 10% during any 40 year period. Now THAT is long term benefits for all.

[toshzpelta]

@nunayafb I think you might be missing the fundamental point:

Should we be free to choose to save for our own retirement? Or should the government take over the roll of saving for retirement? I personally believe individuals would make smarter decisions than the government in saving for retirees. I think actually reducing or having an opt-out mechanism in SS would be the fair way to go, as I don't believe in throwing the people on SS now out on the streets, but rather give the young an option.

[nunayafb]

@toshzpelta Actually you are missing the fundamental point, SS if for everyone and it is a safety net in case shit happens.

reducing or opting out is what collapses SS forcing the elderly to starve to death in the streets. The only people who want to opt out are the ones who are foolish enough to think that their private investment will be secure when they retire. What if it isn't? Recent deregulation of the finance industry shows how secure our economy isn't.

[toshzpelta]

@nunayafb Im not going to fall into your demagoguery of the subject. No one said "reducing [funding]", I said give the option to opt-out, you chose to put those words there, so really, stop being a demagogue with statements like, "forcing the elderly to starve to death in the streets" "Foolish enough" ? So you believe you know better than me where I should put my own money for my own retirement? If you say no, you're a dishonest demagogue at that! Your tyrannical position shows itself clearly.

[nunayafb]

@toshzpelta You should read your post, you said "reducing or having an opt-out". If you can't understand how opting out will collapse the SS system then we're all fucked.

Funny how you switch to personal attacks to avoid discussing the risks of relying solely on private investments, especially in this economy. Do some research, people retiring now are fucked!

I am sure you are a competent investor, but you are selfish and America needs a reliable system for everyone not just you.

Tyrannical? :)

[toshzpelta]

@nunayafb Sorry, I meant "reducing BY/via opting-out" because if you look at the reasoning for poor people being poor it has nothing to do with them not receiving enough in SS. The cost of living is the main negative factor for poor people in general, and it effects the elderly the most b/c they cannot work anymore etc.. I simply believe had people been able to keep that money and invest it for themselves - be free to choose - then they wouldn't be in a financially devastating position.

[toshzpelta]

@nunayafb And the way you could have an opt-out program by not "throwing people out on the streets" - which is definitely demagoguery on your part b/c you and I know well that that would never happen - is by cutting funding in other places, I propose militarism around the world as an example, to pay for the gap in funding that would occur with an opt-out system.

And you give no credit to the masses of people, I believe individuals would do better than the Gov. has been doing that's damn sure !!

[nunayafb]

@toshzpelta So your solution is to cut SS taxes for those who think they can do better on their own and fill in the gap with other taxes? All you're doing is relabeling the tax money that comes out of your pocket to fund retirement for others.

It is not demagoguery, when you allow the largest contributors to opt out of SS you eliminate the bulk of funds, that means elderly can't pay for food and housing and they end up on the streets!

I do give credit to the masses, but SS protects ALL of us.

[toshzpelta]

@nunayafb I would much rather spend my taxes on funding an opt-out program for SS for the young suckers like me who are paying into it and are going to receive very little if anything in return, rather than paying for endless militarism around the world protecting countries that don't even need our help. I think that's that point you're missing. And minus that, SS will never be able to protect me or anyone else my age, because it will be gone or completely worthless by the time I get of age.

[nunayafb]

@toshzpelta WOW, you dumb mother fucker! of course it will be gone- because people like you support opting out instead of proper funding!!!

If you want less wars then demand less wars, wtf do private investments/SS have to do with war?

BTW, your investment account grow because of wars and exploitation of 3rd world countries....

You should do some research on the risks of relying on private accounts when the economy is shit (like now), I think it will open your eyes to the risks.

[toshzpelta]

@nunayafb LOL if you honestly think SS will be gone "because people like you support opting out instead of proper funding!!!" then you're the only "dumb mother fucker" here.

"BTW, your investment account grow because of wars and exploitation of 3rd world countries...."

What??... I honestly don't think you know the first thing about the economy and how it works, if you honestly believe the nonsense you spew, well, I feel sorry for your ignorance.

I don't advocate government from cradle-to-grave.

[nunayafb]

@toshzpelta Do some research, there are plenty of articles out there that spell out the problems people with private accounts are currently dealing with due to the economy.

I have read and listened to both sides, you haven't. How do you plan on convincing me that you are right if you have no relevant evidence?Finally, good investors diversify their funds, why not allow SS to be a safety net? Oh yeah you want a tax break

Americans are good investors? illiterate HS grads and mortgage crisis.

Think

[toshzpelta]

@nunayafb What a comment on your part lol

I could easily say the same things about you. You're far more illiterate than I am lol, and you present no evidence to back your own cases up yet have the nerve to say that of me. Im presenting ideas, you're trying to defend a failing system.

Obviously, new ideas are too much for you to handle.

And what'd I say about you not having faith in our fellow man...

"Americans are good investors? illiterate HS grads and mortgage crisis."

I knew it ;-)

[nunayafb]

@toshzpelta More mindless personal attacks...

I got to this video by wanting to study alternate viewpoints, my initial comment was that the video only showed the immediate benefits w/o addressing any of the long term risks. Have you researched any of the risks? I went to various news sites which did articles on the impact of economy on private investment retirees, what research have you done?

BTW, what ideas have you "presented"? I have mentioned several risks, you've ignored them all.

[toshzpelta]

@nunayafb "mindless personal attacks" coming from the person who called me a "dumb mother fucker"?

"I went to various news sites..."

Good for you... your point? So there's probably hundreds of thousands of pages on the internet concerning Social Security... You read a couple... that makes you the holy saint of SS?

I've presented an alternative, and a way to fund my alternative. You've presented nothing, and you admit it.

You support the present system, but I respect your opinion at least.

[egcroan]

@toshzpelta If you can't see this is all hype & scare tactics to get your money funneled into Wall Street they you are more than just young. You are young and stupid. Mark Twain but it best when he said I thought my father a fool when I left home as a young man, and when I returned home a few years later I was amazed at how wise he had become. It is this having lived a while type of wisdom that many like you don't have, and the people selling this propaganda know that.

[toshzpelta]

@egcroan Because Social Security is such a huuuge success, right?

I just don't lie to myself, SSI worked for your older generation but all signs point to it being next to worthless for mine. Stocks in and of themselves are a ponzi scheme?.... And why do you think medical care is going up in price? Because big corporations have infiltrated government to benefit themselves at the expense of the consumer? Or because the benevolent government needs to do more to protect us against big corporations?

[egcroan]

@toshzpelta Social Security is better than the alternative which is nothing, as many of us lost our retirements from companies, and our 401K due to the great gambles of Wall Street.

[toshzpelta]

@egcroan We have 2 different ways of thinking, but I won't lower myself to your level and call you stupid. I think that you put way too much trust into government and that is where we differ on our opinions. I would much rather tend to my own personal retirement than give my money to the government so they can take care of me... 2 opposing views, but no reason for your insults.

[egcroan]

@toshzpelta I have already gave money to the government, and that is something your simpleton approach neglects to take into consideration by calling my entitlement something slanderously close to a hand out. BTW I am old enough I already get the existing program regardless of what changes are made. Putting your money in the bank is not safe or going to get you any descent return given the low interest rates paid on savings accounts in order to motivate you into the stock market.

[toshzpelta]

@egcroan I don't think you're actually replying to me b/c what you just said was utter dribble. I could spend an hour replying to you point-by-point proving you wrong, so instead I'll just poke fun at you and say that you're probably just too damn old to even consider a different point of view or to go read a book by someone who you disagree with.

[egcroan]

@nunayafb Thanks for explaining to these morons that Social security is a Social Safety net that was instituted after the last great raping of the US Economy by Wall Street & the Big Banks because they wanted people to have a system outside of the US economy to depend upon for their security during the retirement years.

[FletchforFreedom]

@egcroan Since it is well established that the Great Depression, like the current crisis, was created by GOVERNMENT (not Wall Street), specifically the Federal Reserve and was prolonged for years by governmnet intervention and since people were not dying in the streets (and the elderly were better taken care of) BEFORE the institution of governmnet charity, your "theory" collapses under its complete disconnect from reality.

[egcroan]

@FletchforFreedom Your facts about the Great Depression are just Conservative talking Points that have been rolled out recently to push the lies that government intervention was bad, at a time when many would have dies without government help. Keep you FDR hatred to yourself, and stop telling your Glenn Beck lies.

[FletchforFreedom]

@egcroan My facts about the Great depression are consistent with the view of an overwhelming majority of economists and even, now, a majority of historians. I have no "hatred" of FDR, but the simple fact, agreed upon by economists, is that FDR prolonged the Depression for years. If you can't be bothered to look at the overwhelming research on this point in no way reflects poorly upon me.

[toshzpelta]

@nunayafb And the way you could have an opt-out program by not "throwing people out on the streets" - which is definitely demagoguery on your part b/c you and I know well that that would never happen - is by cutting funding in other places, I propose militarism around the world as an example, to pay for the gap in funding that would occur with an opt-out system.

And you give no credit to the masses of people, I believe individuals would do better than the Gov. has been doing that's damn sure !!

[s0l1dsnake]

Let's not forget that your brokerage account is going to want to charge you fees as well for maintain that account gosh stop watch videos people and live in the real world.

[s0l1dsnake]

What he failed to mention is that you pay taxes on retirement account's as well, isn't lying by omission fun?

[Maxx61]

This is the kind of video that scares the living daylights out of liberals.

[Avnatanyel]

The theft of everything left over from what was acrued not going to one's estate is abominable. How can it be moral to force people at gunpoint to save in a government account that upon death reverts to the government? Can I say what about the children now or is that only for food stamps and landmines?

[PinyinReader]

High frequency trading has turned our stock market into a casino and at the time I'm writing this, 30 yr treasury bonds are at 3.3%. If you invest $1000 a month into those bonds over the next 40 years, you'll have a little over $1 million but you'll need to get a six figure salary at 25 and you can NEVER EVER lose your job.

Honestly, we need social security. It's our hedge against stock market crashes and economic downturns like the one we're in now.

[mecher3k]

Lol all the idiots on here.

You somehow fail to noticed the corporations fucking you in the ass, or prehaps your actually gay and enjoy it.

[shmiggen]

First of all, to my knowledge public employees pay into their pension plan via a payroll deduction, the same as private employees. The problem with employee based pensions is companies are saying they cannot afford them, which is true, because companies in the USA, unlike most competitor countries, pay for their employees health care as well. Companies in Canada, Australia, etc do not pay for their employees health care, so they have a competitive advantage.

[tsharpmac420]

he said renig, we need to denig

[shmiggen]

This is deceit. What the narrator fails to mention is that your employer also pays into social security. Your 6.2% social security tax is matched, dollar for dollar, by your employer. This omission is deceit, is it not?

[AustereAustrian]

@shmiggen So? What's your point? Who cares if the employer matches it "dollar for dollar"? It doesn't change the fact that it's wrong for the government to get in between employers and employees and the social security is bankrupt

[9971explorer]

I would opt out of social insecurity in a heartbeat. But statist control freaks will not let me.

[JudgeNapolitanoFTW]

can you guys put a link to the slides in the description box?

[anonymoususerguy]

@JudgeNapolitanoFTW: See  antolin DASH davies DOT com. Click on Conventional Wisdom then scroll down to "What happens if Social Security is privatized?"

[MFP1520]

SS is bad my brother passed he paid $4800 a year in SS He had no family we get NOTHING from SS if I had a company that did this I would be in jail.FUCK SS

[LetsCook2gether]

Take a look at yahoo group of Patrick Devine

groups DOT yahoo DOT com  / group / WethePeople_Shareholders /files /

[ggallman]

Could be that Paul Ryan' suggestions to modify entitlements should get a fair hearing. Could be that allowing people to opt out of SS and choose another plan may not be the disaster Progressives libs, and democrats would like for us to think. twitter [dot] com /ggallman

[egcroan]

@ggallman Come on if you can;'t see what Paul Ryan's motivations are to serve his corporate masters and the Koch Brothers at AFP then you are blind.

[Daisy4Loka]

People should take responsibility for their own retirement like the adults they are.

[egcroan]

@Daisy4Loka Blah Blah Blah keep shoving the Conservative Talking points given to Paul Ryan by his masters at AFP.

[FletchforFreedom]

@egcroan Do you have any idea how stupid someone looks ignoring the points made and simply calling everything one disagrees with as "Conservative Talking Points". If your sole objective is to parody a clueless liberal, you're succeeding admirably.

[grandfoundation1]

Social Security vs. Private Retirement Accounts

[ianhowe007]

Nice chart. But grossly inflated. So why not reform healthcare? Or impose tax. Both would save. Oh shit I'm sorry forgot I have to pay corporate welfare. Whoops my bad

[egcroan]

@ianhowe007 LOL !!

[toshzpelta]

@egcroan Oh I've seen you before too... You're a local youtube troll who goes on rants and calls everyone Paul Ryan supporters and listeners of Neo-Con radio shows... typical troll, you got me again!

[bwaryn]

Great video. This should be required viewing for everyone in the USA.

[danneland]

I think this video is more of an argument that your social security system is broken, not that private security is better - arguing that 'uh uh theres also risk in social security' is implying that two wrongs make one right.

[Wormtail81]

I wish there was more background information. What are the assumptions, etc.?

[Jotto999]

Retiring is yet another service the private sector can do much better than the government.

[TheAngryAmericanwon]

oh okay! what ever u say.. liar..  Social security is not ending because it's always being paid into!

[17Spartacus76]

@TheAngryAmericanwon

Lol, keep clinging to that security blanket.

[TheAngryAmericanwon]

@17Spartacus76 Oh okay! you keep believing the lies.

[wadams19]

@TheAngryAmericanwon

There are two ways that social security is funded for a given year.

1) Payroll taxes from the previous year.

2) Income from the social security trust fund.

On 1, presently, there are more payroll taxes paid than money paid out. But, much everyone agrees that in less than 10 years, that is going to stop because of the baby boomers.

The disagreement is over 2. Some people believe that the trust fund is unsustainable.

[Slim934]

@wadams19 There is mistake here: it isn't. Especially since the only thing in that trust find is IOU's from other government agencies. There is not really a single Federal Reserve note in the trust Fund, all of that money has been spent. Inorder to for money to legitimately be drawn from it, it must be either borrowed or taxed from somewhere else.

[Slim934]

@wadams19 ....how can something that does not legitimately exist possibly be sustainable? There is no actual money in the trust fund, it is all IOU's from the government. Mostly treasury bonds.  Since THAT money must come from either borrowing or taxation (read: theft), we can conclude that there are no genuine assets there.

[wadams19]

@Slim934 I totally agree. The federal government's social security scheme relies on depositing their own checks into their own account and calling in an investment. If any entity other than government did that, it would fraud.

I was trying to lay out the political policy debate for TheAngryAmericanwon, who seems only know appeals to emotion. My use of "sustainable" is an attempt to speak the same language.

[egcroan]

@wadams19 The Trust Fund is only in trouble because of mismanagement of it in the past where it was used by government to solve other problems by borrowing money from it. I agree the Trust Fund needs to be managed better, but killing it isn't a solution.

[v2joecr]

@TheAngryAmericanwon Do you not realize that Social security is the worlds longest running Ponzi scheme in the history of the world. It makes Bernie Madoff look like an amateur at Ponzi schemes.

[TheAngryAmericanwon]

@v2joecr O--kay..

[truevoice08]

Wow.. This has the power to silence those who think its 'cruel' to end Social Security. Do you have a video on Medicare?

[LearnLiberty]

@truevoice08 Unfortunately we don't have a video focusing specifically on Medicare yet but in the meantime you should check our video called "Top 3 Healthcare Policy Proposals" with Harvard Economist Jeffrey Miron.

Another video of interest is called, "Why Washington Only Cut 38 Billion: A Public Choice Perspective" with Ben Powell which discusses the inherent problem in getting politicians to cut spending.

[shmiggen]

@LearnLiberty This is excellent information. Is there any way we can stop paying social security to the aged and infirm, and let them fend for themselves?

[AustereAustrian]

@shmiggen More fallacious logic. You used the informal fallacy of "If the government doesn't do it, no one will". Maybe these "aged and infirm" have families that can take of them? If not, there's these things called charities that will give you money because they're nice like that. And even IF these people are still not getting taken care of, that's just life. social security still doesn't provide enough to take care of everyone and it never will.

[shmiggen]

@AustereAustrian We've already been down this road in 1936. Why would we want to revisit it? Prior to social security fully half of US seniors were living as paupers. By the way, I wouldn't mind scrapping social security if there were a plan to replace that income. I would expect federal regulations forcing employers to pay a pension to their employees. So I am flexible. But the lesson of history is that left to volunteerism alone, millions would hungry.

[tsharpmac420]

@shmiggen social security did nothing to keep old people from living as paupers, that did not start to change until 1958 when Dr. Ethel Percy Andrus started AARP after she found a retired school teacher living in a chicken coup because that was all she could afford

[shmiggen]

@tsharpmac420 so are you saying social security did prevent people from living as paupers?

[tsharpmac420]

@shmiggen No, I am saying social security did nothing to keep the elderly from being poor, the act signed into law in 1935, it did not change any situation any of those people were in before the act, they may have had a little extra money, but they were sitll poor. The change did not start to take place untill 1958 with the founding of AARP.

[shmiggen]

@tsharpmac420 ok, gotcha. I thought you were another right-wing nutjob. Ya know, I wouldn't mind if social security were scrapped. But what I find deceitful is videos like this which cleverly omit the fact that companies match, dollar for dollar, our 6.2% payroll contribution into the social security fund. So ok, I am a reasonable guy. Get rid of social security. Now I want a new law making it illegal for private companies to not provide a pension.

[tsharpmac420]

@shmiggen Yea but an individual should have the choice of privately buying treasuries with the dollar for dollar match or continue the system we have now... I am 24 years old and paying into a system that if not reformed will not be around in 2049 when i can start collecting. But allowing me to op out of the govt program and do it privately will never happen, they need my money now to pay for those withdrawing SS today. Also I am a "crazy right winger" but i prefer the term rational right winger

[shmiggen]

@tsharpmac420 I agree with you but I wanted it pointed it that companies pay into SS - which this video insidiously omits. I am 42 and when it comes time for me to collect my benefit will be reduced by 25%. Why don't we just get rid of SS and have the companies instead pay us a pension? It doesn't have to be rich. If you only work for a company for two years then maybe you get $250/month when you're 65.

[tsharpmac420]

@shmiggen When i watched this the first time i did not get the impression that he was excluding the contributions the employer makes to SS, it seems like he is including that, if he did not then there is now way the return from privately acquired Treasury bonds could equal more than the return from SS. On pensions I do not know, i am not versed in how private pensions work, is it similar to SS where u and the employer pay into it, or the employer pays nearlly all of it like in public pensions?

[anonymoususerguy]

@shmiggen: No, employer contributions to SS are included in the figures.

[shmiggen]

@anonymoususerguy I listened to the video again, and I did not hear him speak of the employer's contribution. Could you point out where he mentions that so I may review it, please?

[anonymoususerguy]

@shmiggen: He doesn't say it, but you can see it in the numbers. He says he's talking about an average 22 year old college graduate. The average 22 year old earns $37,500 (statistical abstract of the us, table 687). He's talking about a college grad, so let's bump it to $40,000. Historical wage growth is 4.2%. Grow the $40,000 at 4.2% annually, multiply by 12.4% and add. You get $700,000. Multiply by 6.2% instead and you get $350,000. He quotes $820,000, so he's clearly counting both halves.

[shmiggen]

@anonymoususerguy If the individual has paid into SS over the course of his/her working life approx $350,000, then getting back 1.2 million (his number from the video) is an excellent return, isn't it? Let's say you save 6.2% of your own money and invest it in T Bills. You are still saying goodbye to the other 6.2% you would have gotten from SS. Now, you will be receiving half of what you would have gotten. How is this a good deal?

[anonymoususerguy]

@shmiggen: Getting back $1.2 million on $350,000 invested over 40 years is a 4.2% return. But you're missing the employer's contribution. Studies have shown that employers simply reduce workers' pay by the amount of the SS tax the employer is required to contribute. So, the 6.2% that the employer pays is really coming out of the worker's pay. This leaves you with $700,000 (using your numbers) invested to get you a $1.2 million return. That's a 1.7% return.

[shmiggen]

@anonymoususerguy I agree with you that the employer simply reduces employee compensation by 6.2%. This is the organizational behavior we see throughout society. Universities see banks handing student loans to everyone, so they raise tuition. Same logic. But there is a problem with what you suggest, because we have the historical record prior to the advent of SS. Fully 50% of the senior population of the USA were considered living in poverty. Continued...

[shmiggen]

@anonymoususerguy They were living in poverty not as a result of a moral failure, but rather, wages insufficiently high enough to save. In other words, just enough to exist, and nothing more. We put our trust in the magnanimity of the employer, but when that failed, the American people smartened up and elected FDR. We have put our faith in the stock market once before - again, a simple matter of history. I do not disagree with your idealized worldview, however. But it isn't realistic.

[TheLoa14]

@shmiggen I agree.What hapens to the man or women whoo does not invest wislely? They will lose everything and then where will the money come from in retirement years. this guy is talking baout savvy 22 yr old professionals.Come back to earth!

[diurdi]

@TheLoa14 You don't need to be a genius to invest in US govt. Bonds. Not that it would be a very smart investment either, but that's what the social security trust fund does.

[PanzerDivisionBOM]

@TheLoa14

I bet it's a lot easier to walk into a bank, hand the cashier a check and say "I want US Treasury Bonds" than to fill out your 401k. And it nets you the exact same security, with better returns and less overhead, and it benefits your heirs.

Oh, and that's assuming that you've zero knowledge in investment, and that you want the precise same parameters of retirement as social security prescribes. If you know anything about investment, or if you have different ideas about if, when -

-

[PanzerDivisionBOM]

-

- and how you should retire than the bureau of central planning, then private investment is going to come out even further ahead.

Finally, with private investments, it's more difficult for the government to pull a Clinton on you and give your retirement money away to someone else. They can still expropriate your savings account, but at least they will pay for it through loss of PR. It's a lot less convenient to steal someone's savings if you have to go to the bank and demand it yourself.

[FletchforFreedom]

@TheLoa14 In actual fact, prior to the implementation of Social Security, even into the Depression, the story of widespread destitution among the elderly is entirely mythological. Setting aside the fact that government meddling has caused every crash that wipes out savings, private charity is quite capable of aaddressing the problem in the absence of the economic crowding out effects of state intervention.