From Michael Hiltzik at the Los Angeles Times:
Former Vice President Mike Pence dipped his toes into the presidential campaign waters Feb. 2 with a proposal that would mean the death of Social Security. ...
Pence unearthed the old Republican idea of privatizing Social Security wholly or partially. ...
Pence didn’t say outright that he advocates killing Social Security. Instead, he took the course I reported on just last week. That’s the Republican and conservative habit of employing plausible-sounding jargon and economists’ gibberish to conceal their intention to hobble the program. ...
But make no mistake: Diverting any significant portion of Social Security taxes into private accounts would make the program unworkable, funnel untold wealth into the hands of Wall Street promoters and leave millions of families destitute. ...
[Pence] whined about “this trajectory of massive debt that we’re piling on the backs of [our] grandchildren” and attributed most of it to Social Security and Medicare (the “entitlements”). Never mind that well more than $1 trillion of that debt was incurred when his party passed a massive tax cut for the rich in 2017. ...
He promised, as Social Security “reformers” always do, that he would hold seniors harmless: “To everyone that’s got hair the same color hair as me, nothing’s going to change for you,” but younger Americans would face a changed landscape, “better choices that would also be better for the country.”
This is also a cherished Republican stunt — guaranteeing that their “reforms” won’t harm current retirees and the near-retired. It’s pure politics because they know that seniors would slaughter them at the polls otherwise. But if their ideas are so great, one must ask, why not impose them on everybody? ...
I won't repeat it here but Hiltzik goes on to eviscerate every premise that has ever supported the notion of private accounts to replace Social Security. No, they're not a pathway to wealth for Americans. No, they're not at all safe. No, they wouldn't begin to replace the protection against disability and early death contained in the Social Security Act. No, they can't replace the inflation protection of the Social Security Act. As Hiltzik concludes:
It’s a crap shoot. And in craps, like any other gamble promoted as a sure thing, it’s the house that wins. Pence is carrying water for the Wall Street firms that will be circling small investors to suck up their assets. When they’re done, there will be nothing left of Social Security.
Why should I trust SSA and the government to actually pay me what they say when they say when they make the rules and have already lied to me and moved my retirement age? And they can change it again at any time. And they can change the calculation on what I get at any time. And I have no say in it. None. No say.
ReplyDeleteBlah blah blah vote blah blah blah.
Guess what didnt stop them from making the last changes did it? They made the change anyway.
And that’s why I think some proposal of privatization may got through in the future. There are a lot of people that justifiably don’t trust the government to do what’s best for them. And they are correct, the government doesn’t care at all. I think a full on privatization would be a complete failure for the majority of people. However, a hybrid system might not if it’s set up correctly. Imagine having a disability option ties to a privatized account that the government can’t deny.
DeleteHaving said that, after working with the public for over two decades, most wouldn’t contribute unless forced and most would lose their money or withdraw it early with a privatized account. That’s the saving grace for most people when it comes to SSA…they don’t have a choice.
You shouldn’t trust the government. But you shouldn’t trust the idiots gambling with your money on Wall Street either. And if I have to choose between letting a bunch of greasy sociopaths on Wall Street gamble with my money, and investing my money with a government that can guarantee a decent return via taxation authority, I’m going to trust the government every single damned time.
DeleteLet's keep subsidizing the rich on the backs of the middle class. Help them buy more vacation homes and jets.
ReplyDeleteSocial Security benefits in the United States are low compared with those in other advanced countries. The average member country of the Organization for Economic Cooperation and Development has a public pension program whose benefits replace about 61 percent of prior earnings for the median (or typical) worker. The U.S. system is far less generous, ranking 26th out of the 30 OECD nations.
They’re going to buy more vacation homes and jets either way. The only fix would be to makes it so somehow being “rich” was less desirable than being middle class. If you can find a way to make being rich a burden, then it might work.
Delete
ReplyDeleteAfter George W. Bush was reelected he foolishly said he was going to invest his "political capital" in pushing for partial privatization of Social Security. That went nowhere and he lost prestige.
I'm a Republican and was thinking about voting for Pence if he runs. But I won't if he pushes this absurd idea of private accounts to replace Social Security.
The government should not have let IRA's replace company pensions either that has not worked well.
If you represent claimants you are seeing increasingly egregious and frequent errors in all aspects of claim processing. You are also seeing hearings taking on a more adversarial tone. No one is answering the phone at many local offices and hearing offices. It's time to privatize the program and let these folks that hate claimants work elsewhere or stay and work for a private boss that won't put up with their incompetence.
ReplyDeleteCome work for the agency and help us out. We could desperately use more people like you who love working with the public and never makes mistakes.
DeleteIt’s really not that hard a job to catch on to as I’m sure you’d be up and running in a matter of weeks.
Wow! It is unbelievable how many nutters there are signed up on this page. I want to ask each of you who died and made you Pope? Sheesh! Yes, the system sucks, I agree, but it is all run by people. People make mistakes, politicians grab the easy solution. It is what we have. Privatizing will not make the system run any better. How long do you have to sit on hold for any kind of service these days? It is not just the government, but the government receives your wrath. Where is your wrath for large corporations that do not give a rat's behind for you or anyone else? And you want these people to be in charge of Social Security? I think not.
ReplyDeleteHe should devise a program like FERS for federal employees [and MOCs]. They payinto Social Security exactly as everyone else. In addition to that they can, on a voluntary basis, contribute a portion of their earnings to a retirement account that has option for investment that include a low cist stock in dex fund. There are over 75,000 fed employees who have accrued over a million dollars this way.
ReplyDeleteThe last wonderful move to partially privatize Social Security Payments brought us the Windfall Elimination Provision which has substantially cut WORKED and EARNED Social Security Benefits for many who also receive a private pension. Over 40 years later we're still trying to get that Windfall Elimination Provision Repealed.
ReplyDeletePlease, all of you "don't trust the goberment" types need to spend some time reviewing how private companies handle long-term disability claims. "Privatization" is not only bad for the individual for the numerous reasons mentioned in the article, that most of you clearly did not actually read, but wait until you are dealing with someone who has an actual direct financial incentive to deny and refuse to pay you. Think that private insurance companies will whip those government employees into shape? Doubtful considering dollar for dollar SSA is more efficient in terms of amounts paid v administrative costs. But what they will be doing is training their staff to be as aggressive as possible in trying to keep any money from walking out the door. Private insurers literally make money by denying claims, not paying them, and somehow you feel they are more deserving of your trust?
ReplyDeleteWow 4:31 just invented the 401K
ReplyDeleteLove the 12:30 comment about us poor folk subsidizing the rich. The rich get almost nothing in return for their contributions to the retirement system. The system is skewed HEAVILY toward the poorest; they get far more out of it than what they contribute. Keep up the misinformation!
ReplyDeleteAnyway, does anybody have some reliable statistics on the rate of return on the DOW over the past 40 years versus what we earn on our "investments" with the government each paycheck?
"Love the 12:30 comment about us poor folk subsidizing the rich. The rich get almost nothing in return for their contributions to the retirement system. The system is skewed HEAVILY toward the poorest; they get far more out of it than what they contribute. Keep up the misinformation!"
ReplyDeleteMy post read middle class not poor but it seems that you group poor and middle class as one of the same. Most middle class are unable to itemize on their income taxes thanks to Trump and gang. Hence, I am paying more income taxes proportionally than the rich.
You're not going to spin my post!
Aside from Social Security, nearly everyone a=can already take advantage of tax deferred retirement accounts invested however they see fit through an IRA or 401(k) or the like. Yes, by all means do that and invest in private securities and I hope you all make out but that still allows for the reality that for nearly every one else, Social Security remains the lifeline that cannot be taken away.
ReplyDeleteAgain, 12:30, 11:37; we are supposedly talking about Social Security contributions and returns. We can debate other elements of our nation's tax structure, but the fact is that the poor get far more out of their contributions to Social Security than the rich do. It is purposely designed that way. There is no question on this - - go look up how your retirement benefits are calculated; the first X number of dollars gets returned at a very high rate and it decreases from there. The highest contributors get the lowest returns.
ReplyDeleteThere is also a cap on benefits. So one argument to raising the cap on earnings taxed is that you then need to remove the cap on the benefits payable. I’m sure that’s an unpopular opinion on this blog, lol.
ReplyDeleteThe rich don’t get richer by giving away their money for nothing in return.
5:36 doesn't seem to understand that providing all Americans with income adequate to cover their needs does benefit the rich, along with the rest of society, as it helps maintain order and lowers crime rates
DeleteYes he does. Then by your logic, the answer is a simple one…universal basic income. Everyone is taken care of for their most basic needs. If that’s what the answer is, by all means I’m for it.
DeleteSame here...scrapping Social Security and instituting UBI to keep everyone above the poverty level, adjusted each year for inflation, is the long-term solution. Note, everyone in my scheme would get UBI. You choose to work in order to afford more than the bare necessities? Great! You choose not to? Fine, but don't complain that you cannot afford more than food, clothing, and shelter.
DeleteSame goes for scrapping Medicare and instituting universal healthcare. That allows you to eliminate the FICA tax and raise the Federal income tax rates by roughly 6% across the board to cover the new programs. This means the vast majority of Americans would see an effective tax decrease while simultaneously enjoying a stronger social safety net.
I personally don't take anything Pence has to say seriously; especially in matters relating to Social Security. He's irrelevant.
ReplyDeleteMy 401K payment is already higher than my PIA
ReplyDeleteWould it have paid your spouse and children benefits for many years if you had died young?
DeleteIt would. That’s what a beneficiary is for.
DeleteIt wouldn't pay nearly as much for as long. Kids can get paid up to 18 years, more if a DAC. Widow's could possibly be paid 40 years in addition to mother's benefits earlier.
Delete1:13, who can we get to volunteer to work twice as hard so that I can kick back? And if we are all on the dole, who is working to allow all of us this life of leisure?
ReplyDeleteAnd as a side issue, one wonders what effect subsidized indolence will have on the character of our citizens. We are not speaking here of disability, or earned benefits, but a supposed right to receive a paycheck merely for drawing breath.
Oh, the world owes me a living . . . .
Actually, yes, its called a trust.
ReplyDelete6:15 Actually if I died young, my wife (of the same age) would not be entitled to any benefit after $255 until she was aged. The trust would easily cover my son. Plus life insurance benefits that were enough to pay off the remainder of the mortgage.
ReplyDeleteYou can be an ant or you can be a grasshopper.
SSA may be able to pay your wife before 60 if she has a child under 16 or DAC in her care. Her wages could reduce that benefit to nothing if she has a good job.
DeleteWould the trust pay your son and wife until they both die if your son happened to be disabled before age 22? With yearly COLAs?
I mean young as in age 30.
Wow an example that could possibly happen in about a one in a million cases. But the life insurance would have it covered. Thanks for playing.
Delete@344 Obviously you never worked in an SSA office. Even when there's no war, military deaths are not terribly uncommon. 40,000 motor vehicle deaths per year, at least some who are workers with young children.
DeleteSo only young people are getting killed in car crashes?
ReplyDeleteUS population 331.9 million. 40,000 is %.1205%
How many active-duty soldiers died in 2022?
In total, the Army lost 82 soldiers to fatal mishaps, a 22% decrease from the preceding year when 105 soldiers were lost, according to Army safety data released Friday.Oct 11, 2022 www.armytimes.com