30-05-2003 21:18									#241
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quote: Originally posted by JohnT "Let's say it's my "perception" that the risk the US government will legislatively dance around what would otherwise be a default on SS obligations." There are no obligations for the government to pay any SS funds according to Nestor vs. Fleming and another (earlier) USSC decision that I can't remember right now.

That's the first part of the dance, but it's also the one that SSA doesn't like to admit. They still throw around the term "obligations" (because it sounds nice) when the real meaning is "obligations which exist at the present time based on current legislation, which may be amended at any time"

	30-05-2003 21:19									#242
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Not the 20 somethings Kidicious. Just those who are of age to start collecting it. What is that age? 65? 20 somethings still have to pay. Yet, as more and more ppl opt out of collecting SS (not paying it) there will be more money going in and less going out. Making it easier to get rid of the whole thing all together.

	30-05-2003 21:20									#243
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quote: Originally posted by Kidicious Where would the money come from to pay the current retirees?

Why should that be my problem?

	30-05-2003 21:36									#244
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quote: Originally posted by Japher Not the 20 somethings Kidicious. Just those who are of age to start collecting it. What is that age? 65? 20 somethings still have to pay. Yet, as more and more ppl opt out of collecting SS (not paying it) there will be more money going in and less going out. Making it easier to get rid of the whole thing all together.

Oh, Ok. The benefit for opting out would have to be better that staying in though, so wouldn't that cost more?

	30-05-2003 21:38									#245
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quote: Originally posted by DinoDoc Why should that be my problem?

Because the homeless elderly will clutter in the street, and sometimes you may have to step on them.

	30-05-2003 21:42									#246
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Can someone explain to me how robbing Peter to pay Paul (as the current system essentially works) is a financially sustainable strategy for the Social Security slush fund?

	30-05-2003 21:47									#247
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quote: Originally posted by DinoDoc Can someone explain to me how robbing Peter to pay Paul (as the current system essentially works) is a financially sustainable strategy for the Social Security slush fund?

It's worked so far. It's up to you to show why it won't.

	30-05-2003 21:49									#248
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Kidicious,

Because demographic trends indicate that Peter's getting smaller & Paul's getting much bigger. Peter isn't going to have enough pounds of flesh to cough up.

-Arrian

	30-05-2003 21:53									#249
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Solidarity between generations. Works well until the generations paying becomes smaller than the generations retired. We are currently facing that problem. Difficult.

	30-05-2003 21:54									#250
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quote: Originally posted by Arrian Kidicious, Because demographic trends indicate that Peter's getting smaller & Paul's getting much bigger. Peter isn't going to have enough pounds of flesh to cough up. -Arrian

There aren't THAT many baby boomers. True, they are a larger generation, but they aren't as big as people are making them out to be. The histeria in here is absurd. There have been no serious projections that have predicted that the current system can not be maintained with some minor adjustments.

	30-05-2003 21:56									#251
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quote: Originally posted by DAVOUT Solidarity between generations. Works well until the generations paying becomes smaller than the generations retired. We are currently facing that problem. Difficult.

What can you tell us about the French system?

	30-05-2003 22:02									#252
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What we need is massive population growth to solve our demographic problem. I propose we start importing hot Russian women and then I will handle it from there.

Last edited by Oerdin on 30-05-2003 at 22:10

	30-05-2003 22:12									#253
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Kidiculous,

By the way, my prediction of collapse wasn't limited to Social Security. I was talking about the US government in general.

Sound crazy? Maybe, but the utter and complete lack of anything remotely resembling fiscal responsibility in government will eventually catch up to us.

As for SS in the particular, your "minor adjustments" are most likely political heresy. Everyone has gotten used to a big juicy pie, and they want their slice - regardless of the fact that we cannot afford it.

-Arrian

	30-05-2003 22:17									#254
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quote: Originally posted by Arrian Kidiculous, By the way, my prediction of collapse wasn't limited to Social Security. I was talking about the US government in general. Sound crazy? Maybe, but the utter and complete lack of anything remotely resembling fiscal responsibility in government will eventually catch up to us. As for SS in the particular, your "minor adjustments" are most likely political heresy. Everyone has gotten used to a big juicy pie, and they want their slice - regardless of the fact that we cannot afford it. -Arrian

Cutting benefits will be hard, but raising taxes will be easier once the deficits start skyrocketing. Like I said earlier. The working people are going to end up paying for this crisis.

	30-05-2003 22:22									#255
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We are exactly facing the consequences built in the system (for the basic retirement pension). The baby boomers expected to retire in 2006 appears to be largely exceeding the average number of yearly retirees. Minor adjustments is an understatement since their effect on the pension is not marginal, and people desagree; currently, civil servants are in strike, and make demonstrations.

The civil servants have their pensions paid by the state, but all others have an autonomous system totally financed by employers and employees.

What make the matter worse, is that the civil servants have a system much more favorable that the other one which has already been hardened seriously 10 years ago. This hurt the equalitarian principle of the French.

In addition to the basic pension, a complementary pension is financed also by employers and employees, and is facing the same difficulties, since working people are paying for retirees.

Currently (first figure civil servants):
- number of years of work required = 37.5 / 40
- age of retirement = 60/60
- average salary referred to = last 6 months/last 20 years

Project :
- number of years of work required = 40 / 42
- age of retirement = 65/65
- average salary referred to = last 6 months/last 20 years

	30-05-2003 22:29									#256
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Asking again, can anyone explain the SS system in a similar way?

	30-05-2003 22:29									#257
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quote: Originally posted by Kidicious True, the govt has no obligation to pay you your SS. Your contributions go to pay current retirees, and yes it's a tax, not a personal investment or personal insurance. Future generations could decide that when you retire you shouldn't get benefits even though you paid for others to recieve benefits.

I hope future generations are that smart.

Btw, the government has no obligation to use any SS tax money for SS.

	30-05-2003 22:32									#258
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quote: Originally posted by DAVOUT Minor adjustments is an understatement since their effect on the pension is not marginal, and people desagree; currently, civil servants are in strike, and make demonstrations.

This sounds like a golden oppertunity for the French state. Just tell these buggers to get back to work or they will all be fired. Either they go back to work (problem solved) or they all get fired and the state won't have to pay them pensions (problem solved).

	30-05-2003 22:33									#259
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quote: Oh, Ok. The benefit for opting out would have to be better that staying in though, so wouldn't that cost more?

Not really. In fact it would save, if not earn the government more money, and save the consumer or reitree more money... It's a win, win, if that person who opts out has enough money to hit the break even, or break the break even point. Giving people money with a lower tax to save the gov. hundreds of thousands per household would be great! Especially since these people would be able to invest more (nail 'em with capital gains), buy more (love sales tax), and set up more trusts (gotta love estate taxes)... In the end everyone gets what they want. Just allowing someone to roll their traditional IRA to a roth IRA with a lower penalty would be huge.

	30-05-2003 22:33									#260
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Davout,

You guys don't have a privatized system there, do you?

	30-05-2003 22:39									#261
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quote: Originally posted by JohnT I hope future generations are that smart.

It's not smart at all. A bunch of poor people would have to let their parents live with them. I for one will be outraged.

quote: Originally posted by JohnT Btw, the government has no obligation to use any SS tax money for SS.

Right, there is a surplus which is used for other govt obligations.

	30-05-2003 22:41									#262
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Until the like of Saddam take over the country, it cannot be done that way, unfortunately
The law rules here (l'Etat de Droit), and the right to go in strike will not be removed soon; the status of civil servant includes the right never to be fired (unless you have killed several people around), and as soon as you have worked 15 years for the state, you are definitely entitled to a pension (not full rate).

	30-05-2003 22:43									#263
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quote: Originally posted by Kidicious There aren't THAT many baby boomers. True, they are a larger generation, but they aren't as big as people are making them out to be. The histeria in here is absurd. There have been no serious projections that have predicted that the current system can not be maintained with some minor adjustments.

Kidicious, the ratio of "contributors" to "retirees" has fallen from 42:1 in 1945 to 9:1 in 1955 to 3:1 in 2000 to a projected 2:1 in 2030*.

BTW, at SocialSecurity.org I found the following in re: to the referenced USSC cases:

' Ephram Nestor was a Bulgarian immigrant who came to the United States in 1918. He paid Social Security taxes from 1936 until he retired in 1955. In 1956 Nestor was deported for being a member of the Communist Party in the 1930s. His Social Security checks were stopped in accordance with a 1954 law that stated that deportees would lose their Social Security benefits. Nestor sued the federal government, claiming that he had a right to collect Social Security benefits because he had paid his Social Security taxes.**

The Supreme Court disagreed, saying, "To engraft upon the Social Security system a concept of accrued property rights would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands."

The Court's decision was not surprising. In an earlier case, Helverigh v. Davis (1937), the Court had ruled that Social Security was not an insurance program: "The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way." '


*Source: President’s Commission to Strengthen Social Security, "Interim Report," August, 2001.
**Isn't that funny? A Communist suing the government for private property rights of public funds!

	30-05-2003 22:45									#264
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quote: Originally posted by Kidicious Davout, You guys don't have a privatized system there, do you?

Edit : No, it is not private, it is autonomous and dont make profits
The system is managed jointly by the employers and the syndicates representing the employes. They mainly decide how the burden will be shared. But they cannot change the structure of the pension scheme without governement approval.

	30-05-2003 22:45									#265
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quote: Originally posted by HershOstropoler Asking again, can anyone explain the SS system in a similar way?

Heh-heh. Apparently, not.

Go to http://www.ssa.gov/ and see if you can make heads or tails of how it's run.

	30-05-2003 22:47									#266
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Kid: "Right, there is a surplus which is used for other govt obligations."

No, I meant any of the money. If Congress enacted a law tomorrow that stopped all SS checks but kept the taxes, there's not a single thing anyone can do about it.

Let me quote the USSC again: "The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way."

And they aren't, despite what you might hear of a "trust fund."

	30-05-2003 22:48									#267
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quote: Originally posted by HershOstropoler Asking again, can anyone explain the SS system in a similar way?

Here's a Social Security Handbook .

I think the retirement age is 65 now, but it says 62 in the handbook.

	30-05-2003 22:50									#268
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Thanks, Kid.

	30-05-2003 22:55									#269
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quote: Originally posted by JohnT Kidicious, the ratio of "contributors" to "retirees" has fallen from 42:1 in 1945 to 9:1 in 1955 to 3:1 in 2000 to a projected 2:1 in 2030.

Please give me another source for this.

Even if these numbers are correct it doesn't say anything about the ability to maintain benefit payments.

	30-05-2003 22:57									#270
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Asking again, can anyone explain the SS system in a similar way?

No. Of course not.

It's more complicated, because some have pensions + reduced social security, some have pensions + social security, some have 401(k)s or 403(b)s + social security, some have Keoughs and IRAs + social security.

Social security now is 65, 2 months+, but by the time our generation gets there it is 67+, but probably will be changed to be even 69+ or 70+, which are the figures being bandied about.

401(k)s and 403(b)s are 59.5+ for unpenalized withdrawals, IIRC.

In general, the payout for social security is based on your average wage over your working lifetime, indexed to inflation, and adjusted in some other ways. If you retire late, you get a bonus.

Last edited by DanS on 30-05-2003 at 23:20