Barack makes this a good news day..

For what...wrecking the economy in the short term?

 

1. Keep working as long as you're able.
2. Do what people do in other societies -- live with your kids when you are older.
3. If Social Security dried up/changed, you would see businesses offering more pensions/401(k) options to lure workers.

When did it become government's responsibility to protect us from our own bad decisions? Bad choices have consequences. I see it in my classroom -- first, that they do, and second, that kids just expect that they can be stupid and never learn anything because somebody (mom & dad, the government) will bail them out every time they screw up.

I have no understanding of why people don't trust the private sector, but trust government to meet their needs. Social Security is broken in part because it's run like a pyramid scheme -- they take our taxes to pay for today's retirees, and assume that our grandchildren will pay for us. Not only that, but the social security taxes (which are higher than income taxes for most of us) are treated like an extra income source for a government that is all too happy to spend your money on projects to get Congresspeople reelected. Part of the reason social security is broken is because Congress keeps taking your payroll taxes and putting them in the general fund.

It was created to satisfy socialists like Huey Long and Dr. Francis Townsend who had a key following and was pressuring FDR from the left in the 1930s. It is kept alive because the elderly are the most loyal voters in the United States, and anyone who touches it will commit political suicide. Socialists like social security because it is a program to redistribute wealth -- everyone gets the same amount back, whether you paid in your 15.3% of a $20,000 salary or a $100,000 salary. The cap on incomes at least took away some of the blatant socialism from the program.

The political argument aside, the other part is that I don't understand why people have such blind trust in the government to manage their money for them. Over the long term, private sector retirement accounts should double in value every 7-10 years. There is risk involved, but one can put their $$ in the bond market instead.

The average rate of return of social security is about 2%.

Which is a better investment? And because of its problems -- by the time we get old, we'll be living on the taxes of 3 people -- the bond market or even the stock market is safer. I'm not expecting to see social security when I turn 65.

Of course, we always rely on the most productive people in America -- the ones who pay everyone else's salaries -- to pay for all of these schemes. If we tax the rich too much, the rich will eventually not make enough money to pay salaries of their workers, nor will their incomes stay high enough to pay for everyone else. That's the lesson Europe is learning right now.

 

When did it become the government's responsibility to protect us from criminals? When did it become the government's responsibility to provide us fire departments and public schooling? How about roads? Let's just turn everything over to private companies and see how that works out!

Of course, that's an insane idea. One thing government run services provide is accountability. If the city isn't running right and a profit-driven private company is charged with running, say the police department, what happens when the company decides to cut the force in half to make the shareholders happy? More crime probably? Longer response times? Then what? You can call the police station and complain that nobody showed up when you were robbed at gunpoint, but just like any other private company with a monopoly, they can tell you to go 'F' yourself and there's nothing you can do.

With SS, it's easy to say "work as long as possible" and "move in with your kids." But in the real world, a lot of times those options aren't available. If you're poor, you're more likely to be in bad health (I can point you to evidence, if you wish, but I don't feel like getting the books down again!!), which makes it harder for you to work longer. And it's the really old people (80-plus) who are in the worst shape in terms of poverty. They've spent their life savings during their early retirement years, they're usually widowed and SS is all they have to count on. Could some of them move in with their kids? Maybe? I'm guessing a lot of them already do. But what about those who don't have kids and all of the other scenarios? Where do they go then? The street is all that's left unless maybe some charity puts them up.

As for businesses providing pensions: Pensions are a thing of the past unless you work for the government or have one of the last remaining union jobs. To think that businesses are all of a sudden going to start providing pensions if SS is done away with is just plain naive. Employer-provided health insurance has been on the decline for the past decade and those who are lucky enough to work somewhere where they do get health insurance are being priced out of the market because premiums keep going up at rates much higher than inflation every year.

I'm not saying corporations are all bad (there are plenty of great ones out there and in general I'm against levying higher taxes on businesses because those taxes get passed on to the employees and consumers), but relying on your job for health insurance, much less relying on it for a pension are becoming less of a reality, particularly now, when the income gap between the rich and poor is as bad as it's been since the Gilded Age.

So that gets us back to SS and FirstDown's point. I believe it is society's responsibility to take care of its elderly. Obama has a proposal that will fund SS for generations to come. If you want to save money in an IRA or buy stocks, nobody is stopping you from doing that. But when the alternative to saving SS is us telling our old people who have worked hard all their lives and don't have any savings because they couldn't get a high paying job with great healthcare and a pension (my deceased grandmother was a janitor at a high school for decades ... don't tell me she didn't work hard ... but she needed every bit of that SS check and the little pension she got to get by after she retired because of poor health) to go live on the street, I don't think there's really a debate. As I said previously, Bush was a lame duck when he went around trying to push privatizing SS with his political capital from the '04 election. He was in as safe a position as a politician can be in, he had a GOP Congress fully capable of sending him the bill to sign and yet the idea flopped. Why? Well, we know why ... in March 2005, 35 percent of Americans thought it was a good idea. Coincidentally, Bush's approval ratings soon reached the same number and kept going South! Seriously, 35 percent – I don't think you can say it's just old people who were against the idea.

To quote Adam Smith, that great free-market economist: "What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."

 

The government provides accountability? Really?

I agree with alot of what you've written, here. But not that.

 

I'm citing what I learned in academia (from an economist who was asked to be on Bush's Economic Council of Advisors a few years ago ... she said 'no' and spends most of her time traveling the world working with countries like Russia, India, Pakistan, Guyana and Jamaica to name a few, setting tax policy). One of the advantages to government-run services is that if you don't like how the city is being run, you can, as they say, "throw the bums out." Look at countries like Argentina where private firms were hired to provide water etc. ... it didn't work out so well, and there's no real recourse. That's all I was getting at. I know the conservative mindset is generally that privatizing everything would be heaven on earth, but I don't like the profit motive all private companies implicitly have when it comes to my safety, health and overall well-being.

 

Here's the lesson we're about to learn: America as we know it is in its last days, and it will come without a military shot or terrorist hit.

Beginning with the Enron debacle as a test run of even bigger meltdowns to come, the Corporate Monarchy has slowly taken steps to the point that the Republic of America will be no more and the constitution will be only as strong as it serves the ruling class. They've sold out the American economy to other foreign market buddies who they will soon share exquisite time-share accomodations with while playing poker with the remnants of our pension funds and enjoying what used to be a dad-and-son trip to the ballpark, paying $2,500 a ticket for luxury accomodations. They'll refer to a dank area in the outfield as steerage. The only justice in all this is that at one point, the Chinese and other bastards this class has sold its souls for will turn around and cut their throats when they've done all the bidding they care to have done.

Sorry for the dad-and-son burp. I was reading the Washington Post link on yahoo.com about the outrageous ticket prices, which of course, only serve "corporate" interests.

 

I do believe America is in its last days, but for a different reason ...

"(Democracy) can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship."

-- unknown --

(heck, even Karl Marx acknowledged that).