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Title: Bush: People Should Work More Hours To Grow Economy
Source: Daily Caller
URL Source: http://dailycaller.com/2015/07/08/b ... rk-more-hours-to-grow-economy/
Published: Jul 9, 2015
Author: Blake Neff
Post Date: 2015-07-09 09:31:10 by buckeroo
Keywords: None
Views: 9034
Comments: 97

Democratic operatives are all over Jeb Bush for declaring in an interview that Americans need to “work longer hours” for substantial economic growth to return.

The Republican presidential candidate was conducting a recorded interview with New Hampshire’s The Union-Leader and was answering a question about his tax plan, which he used as an opportunity to state his goals for economic growth. Democratic operatives are all over Jeb Bush for declaring in an interview that Americans need to “work longer hours” for substantial economic growth to return.

The Republican presidential candidate was conducting a recorded interview with New Hampshire’s The Union-Leader and was answering a question about his tax plan, which he used as an opportunity to state his goals for economic growth.

“My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see,” Bush said. “Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and, through their productivity, gain more income for their families. That’s the only way we’re going to get out of this rut that we’re in.”

According to OECD data, U.S. workers average 1789 hours of work per year, above the global average for developed countries. Among those with full-time jobs the average work week is 47 hours, according to polling by Gallup, while for part-time workers the average is about 26 hours per week.

Democratic operatives are all over Jeb Bush for declaring in an interview that Americans need to “work longer hours” for substantial economic growth to return.

The Republican presidential candidate was conducting a recorded interview with New Hampshire’s The Union-Leader and was answering a question about his tax plan, which he used as an opportunity to state his goals for economic growth.

“My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see,” Bush said. “Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and, through their productivity, gain more income for their families. That’s the only way we’re going to get out of this rut that we’re in.”

According to OECD data, U.S. workers average 1789 hours of work per year, above the global average for developed countries. Among those with full-time jobs the average work week is 47 hours, according to polling by Gallup, while for part-time workers the average is about 26 hours per week. According to the Department of Labor, about 6.5 million Americans are stuck in part-time rather than full-time jobs due to economic conditions. An aide told the AP that Bush’s intent was to highlight how many Americans have been working less than they want to due to President Obama’s policies.

“Under President Obama, we have the lowest workforce participation rate since 1977, and too many Americans are falling behind,” the statement said. “Only Washington Democrats could be out-of-touch enough to criticize giving more Americans the ability to work, earn a paycheck, and make ends meet.” The average hours worked of part-time workers has fallen sharply from just 15 years ago, something critics claim is partly due to Obamacare classifying a 30-hour job as “full time.” (RELATED: Obamacare’s Biggest Impacts: Americans Losing Hours, Losing Coverage)

Update: A transcript of the event forwarded to The Daily Caller News Foundation by a Bush campaign spokeswoman shows that Bush clarified his comments to New Hampshire reporters Wednesday night. When asked whether working “more hours” meant more Americans getting full-time work, Bush replied people needed to be “given the opportunity to work.”

“Incomes need to grow,” Bush said. “It’s not going to grow in an environment where the costs of doing business are so extraordinarily high here… If anyone is celebrating this anemic recovery, then they are totally out of touch. The simple fact is people are really struggling. So giving people a chance to work longer hours has got to be part of the answer. If not, you are going to see people lose hope. And that’s where we are today.”


Get the lazy, fat, do-nothing bureaucrats off their asses and force them to get a real job. OOPPSS! I forgot, they can't. In effect, a governemnt job is just another form welfare.

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#8. To: TooConservative (#5)

What is most disappointing here is Bush's total lack of ideas.

His name is "Bush." Isn't that enough?

I expect ZERO ideas from Senor Jeb (R-D) about anything substantial. Nothing but the usual cliches and platitudes -- presented in the most insincere-sincerities. Same as his mirrored image, Frau Hitlery (D-R).

They are two self-entitled empty suits. One's goal is to turn the US into Northern Mexico, circa 1840; The other into the Soviet Union, circa 1925.

Liberator  posted on  2015-07-09   17:22:32 ET  Reply   Trace   Private Reply  


#9. To: A Pole (#4)

Where's is the white America middle class male represented in that commie-inspired cartoon? Oh wait -- they're UNDER the boat. Weighted by anvils.

Liberator  posted on  2015-07-09   17:25:27 ET  Reply   Trace   Private Reply  


#10. To: Stoner (#2)

It was something like ten or fifteen years ago, we were talking about the Bush Crime Family.

Don  posted on  2015-07-09   17:42:13 ET  Reply   Trace   Private Reply  


#11. To: buckeroo (#0)

Awe the bushes. Just stay out of the bushes because you never know what you will find!

Well I guess I could give up sleep. 7 hrs is alot to waste on sleep. Then I could just skip a meal once a day.

OMG we are ruled by idiots!

I suppose he read that article that claims Americans only work 30-35 hrs a week. I tell you I work 60+ and get paid for 20! There are times when I just ask myself why do I work so much for so little pay! Then I remember the federal government is fucking things up so bad that I have to work all the time to make a living!!!!

Justified  posted on  2015-07-09   18:05:09 ET  Reply   Trace   Private Reply  


#12. To: Justified (#11)

I just ask myself why do I work so much for so little pay!

So Jeb will like you.

A Pole  posted on  2015-07-09   18:33:38 ET  Reply   Trace   Private Reply  


#13. To: Justified (#11)

Then I remember the federal government is fucking things up so bad that I have to work all the time to make a living!!!!

I think you mean to say, "I have to work all the tyme to pay the phuckin' parasites that are US/State/County/City and other local bureaucrats."

buckeroo  posted on  2015-07-09   18:35:24 ET  Reply   Trace   Private Reply  


#14. To: SOSO, Vicomte13 (#7)

Yet I and my employers on my behalf (in lieu of paying higher wagers to me) paid more into the SS system than I will ever get got, even if I live to 100.

Statistically, you will break even on SS but consume 3 times as much Medicare/Medicaid as you ever paid into it.

Tooconservative  posted on  2015-07-10   1:12:47 ET  Reply   Trace   Private Reply  


#15. To: Liberator (#8)

I expect ZERO ideas from Senor Jeb (R-D) about anything substantial. Nothing but the usual cliches and platitudes -- presented in the most insincere-sincerities. Same as his mirrored image, Frau Hitlery (D-R).

You would expect he would offer something that sounds like serious policy. He is a lot smarter than Dumbya ever was.

No doubt, he understands the problems. He just won't talk about them honestly.

Tooconservative  posted on  2015-07-10   1:14:07 ET  Reply   Trace   Private Reply  


#16. To: SOSO, Too Conservative (#7)

Yet I and my employers on my behalf (in lieu of paying higher wagers to me) paid more into the SS system than I will ever get got, even if I live to 100.

Not true at all.

My employer and I have paid the maximum Social Security tax on me for the past 16 years, and will continue to do so for the foreseeable future. The amount has changed over the year, as the cap on the amount of the income taxed moves upward. In 1999, the cap was at $72,600. This year, the cap is $118,500.

Social Security tax is 6.2% from me, 6.2% from my employer. So, using 2015 as the measuring point (highest it's ever been), my employer and I pay a combined total of $14,694 per year.

If I were age 70 and retired right now, having paid into the system at the top rate for most of my working life, my monthly benefit would be $42,002 per year, which is $27,318 per year more out than I pay in this year.

Also, if I die first, my wife will get my Social Security until she dies.

And it will all be adjusted upwards over time for inflation.

Fact is, there is no investment program you could have done with that Social Security money that pays better, or that has better features (inflation adjustment and survivor benefits are huge advantages).

And if you get crippled between now and retirement, you get disability insurance. And if you die, you kids get survivors benefits.

Fact is, Social Security is an investment whose combined features cannot be purchased in the private sector at a reasonable price, or at all.

Add Medicare into the picture and it becomes even better.

Social Security will be the primary payor in your retirement, for your income, and for your medical costs, which will spiral upwards. Without Social Security, most people would be destitute in their old age.

Vicomte13  posted on  2015-07-10   9:47:37 ET  Reply   Trace   Private Reply  


#17. To: TooConservative (#14)

Statistically, you will break even on SS but consume 3 times as much Medicare/Medicaid as you ever paid into it.

Document this. I will bet that you are wrong about on both counts.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   10:56:26 ET  Reply   Trace   Private Reply  


#18. To: Vicomte13, TooConservative (#16)

Not true at all.

It's totally true. You neglect the imputed interest rate that would be earned on what you and your employer "invests" into your SS account. Over a 30-50 year period of contributions that will much more than double the amount paid in. And what about those whose spouse also works and pays into SS? The surviving spouse is only entitled to the payment they have earned or just 1/2 of what the deceased spouse has earned, which ever is higher.

As for Medicare, I have private insurance which is primary over Medicare. It is unlikely that I will ever enroll in Medicare B or D. FYI we just had a super major medical event which to date has racked up over $300,000 of medical bills and Medicare hasn't paid one cent and will not pay anything in the future.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   11:05:31 ET  Reply   Trace   Private Reply  


#19. To: SOSO, Vicomte13 (#18)

By your own description, you are not an average voter or consumer.

When I spoke of average citizen outcomes, I meant average, not high-end earners who naturally do pay more. Because some pols like to transfer their income taxes to poorer people.

Surely we don't need to explain income transfer for you. The upper brackets must always get hit hardest in any progressive taxation scheme.

Dems would naturally assert that you are paying the cost of freight for living in a modern industrial economy with a big transport system and a global military reach and the other accoutrements of Big Government. This was the subtext behind the "You Didn't Build That" brouhaha in the 2012 election, the subtext being "you couldn't have built that if you didn't live in a modern Western country that possesses substantial resources and military and economic might". It's the old argument for "infrastructure".

Tooconservative  posted on  2015-07-10   11:43:48 ET  Reply   Trace   Private Reply  


#20. To: buckeroo (#0)

clearly he stumbled over this response and did not convey what he means . All you have to do is look at the labor participation rate (lowest since 1977) to see that Americans are not working at levels needed to grow the economy . The emperor keeps on touting the creation of a couple hundred thousand jobs which in fact doesn't keep up with the replacement rate ,let alone grow the economy . Bush has been saying the economy should be growing at 4%( which in itself is low expectation of where it should be ) . But clearly to get to that level of growth ,more Americans need to be working ,and working longer hours . Instead of attacking him , Republican candidates should be harping on the reasons that Americans aren't working .(ie Obamacare gives incentives to employers to hire workers who work no more than 30 hr/week) .

Quis custodiet ipsos custodes?

tomder55  posted on  2015-07-10   12:39:41 ET  Reply   Trace   Private Reply  


#21. To: All, TooConservative, Redleghunter (#20)

clearly he stumbled over this response and did not convey what he means . All you have to do is look at the labor participation rate (lowest since 1977) to see that Americans are not working at levels needed to grow the economy . The emperor keeps on touting the creation of a couple hundred thousand jobs which in fact doesn't keep up with the replacement rate ,let alone grow the economy . Bush has been saying the economy should be growing at 4%( which in itself is low expectation of where it should be ) . But clearly to get to that level of growth ,more Americans need to be working ,and working longer hours . Instead of attacking him , Republican candidates should be harping on the reasons that Americans aren't working .(ie Obamacare gives incentives to employers to hire workers who work no more than 30 hr/week) .

ping

Quis custodiet ipsos custodes?

tomder55  posted on  2015-07-10   12:42:29 ET  Reply   Trace   Private Reply  


#22. To: SOSO (#18)

It's totally true. You neglect the imputed interest rate that would be earned on what you and your employer "invests" into your SS account.

I did neglect that imputed interest. (I also neglected the taxation of the interest in any real account.)

This is an easy calculation. Actually, the amount I have paid in over my working life is easily determinable: I get that Social Security statement every year that says what I have paid in, and I can double that number for the employer contribution (which, lest we forget, is tax-deductible to the employer).

Then we look at the IRS imputed interest chart on long-term loans or, if you prefer, at the treasury rate, the bank deposit rate or CD rate during each year since 1981, when I started working and paying taxes.

One aspect of this investment is that it's a government entitlement, so the risk is the same level as treasuries: full faith and credit of the US government.

I guarantee you that after going through all that work, we'll discover that, no, the total will not "more than double the amount paid in". Especially not on a risk-adjusted basis.

Also, bank interest, CDs and bond interest is taxable, so we'd have to chop down your return every year for taxes. I suppose we could go ahead and consider that some of the money was invested in an IRA, but IRA's have upper- levels.

It all depends on how detailed you want the analysis.

I'm going to do it back of the envelope now, and demonstrate it.

Vicomte13  posted on  2015-07-10   12:55:29 ET  Reply   Trace   Private Reply  


#23. To: SOSO (#18)

FYI we just had a super major medical event which to date has racked up over $300,000 of medical bills and Medicare hasn't paid one cent and will not pay anything in the future.

Medicare may never pay a dime. But if your private insurer goes bankrupt and ceases to exist because of corporate events or internal corruption - things you can neither foresee nor avoid - then you'll be old, heading into the sickly years, without that health insurance.

But once you've paid down your resources, you will still have Medicaid. You won't be allowed to die for want of money for your care. Instead, you'll be cared for in your destitution, which happened because you trusted in a private company that was not trustworthy and which blew itself up through no fault of your own. And those taxes you paid will have supported that insurance.

Ultimately, that's what Medicare and Medicaid and Social Security are: social insurance.

But let's get to that calculation.

Vicomte13  posted on  2015-07-10   13:00:48 ET  Reply   Trace   Private Reply  


#24. To: TooConservative (#15) (Edited)

You would expect he [Jeb] would offer something that sounds like serious policy. He is a lot smarter than Dumbya ever was.

REALLY? You actually consider Jeb smarter than Dubya? Based on accomplishments? Policies? Opinion? (Not that Dubya was brilliant either.)

IF so, that can't be based on Jeb coming up totally empty on ANY proposals or solutions (other then grant Amnesty to 40 million illegal invaders.)

After witnessing the blatant sabotage of America for for 6 1/2 years and the mayhem created by 0blabla, Jeb's lack of revealing what should be a bunch of solutions that address the economy, sovereignty, security, etc. is incredibility short-sighted, lazy, and....DUMB. But then he's counting on a DUMB electorate.

No doubt, he understands the problems. He just won't talk about them honestly.

Jeb has not proven to demonstrate ANY understanding or curiosity for the plethora of serious problem besieging America other than his single pet project -- AMNESTY.

"Honesty" is the last thing I expect out of Jebster. He's an absolute puppet, as self-entitled and centered an elite as Hitlery. NO proposals. NO solutions. NO creative suggestions. He's a coward who insults our intelligence.

EDIT:

I just noted that Jeb HAS indeed made a proposal posted here at LF:

'People (aka SERFS) Should Work More Hours To Grow Economy'

What a lazy, elitist POS.

Liberator  posted on  2015-07-10   13:08:54 ET  Reply   Trace   Private Reply  


#25. To: tomder55 (#20)

 ,more Americans need to be working ,and working longer hours

More Americans yes. Longer hours no.

A Pole  posted on  2015-07-10   14:11:51 ET  Reply   Trace   Private Reply  


#26. To: Vicomte13 (#22)

I did neglect that imputed interest. (I also neglected the taxation of the interest in any real account.)

And the taxes that may have to be paid on the SS payments if one's total income exceeds a very modest level.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   15:01:50 ET  Reply   Trace   Private Reply  


#27. To: Vicomte13, TooConservative (#22)

It all depends on how detailed you want the analysis.

I'm going to do it back of the envelope now, and demonstrate it.

I want to consider all material aspects of the determination. I assure you that when you do the imputed interest calcualtion for a 50 year pay-in period it WILL more than double the contributions made by you and your empolyer(s).

If you are a white male with a life expectancy as of Oct. 2014 of 76.4 years and you retired at 70, you would collect the $42,002 per year you cited in your earlier post and you would have recieved $268,813 in SS payments. Let's assume that you didn't have to pay taxes on any portion of that amount. Let's also assume that you started paying into the SS system when you were 20 years old, or for 50 years. How much would you and your employer(s) have paid into the SS system in those 50 years? Then add the imputed interest earned in an qualified tax deferred IRA. Please get back to me when you complete your back of the envelope the calculation.

HINT: $268,813 divided by 50 is $5,376 total average SS contribution per year.

HINT: Use the rule of 72 which says that the interest rate times the number of years to double the invested amount to double is 72. So to double an invets of $1 in 50 the compounded interest would have to be 1.44%. To triple use the rule of 121, so to triple a $1 investment in 50 years the interest rate would have to be 2.42%. What has been the average interest rate on 30 year Government Bonds over the past 50 years? On tax exempt A+ 30 year Municipal bonds? The average annual return on the S&P 500? The average 10 year bank CD?

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   15:20:54 ET  Reply   Trace   Private Reply  


#28. To: buckeroo (#0)

Libtards: people should work less and get more tax funded welfare to improve the economy.

I'm the infidel... Allah warned you about. كافر المسلح

GrandIsland  posted on  2015-07-10   15:23:19 ET  Reply   Trace   Private Reply  


#29. To: Vicomte13 (#23)

Medicare may never pay a dime. But if your private insurer goes bankrupt and ceases to exist because of corporate events or internal corruption - things you can neither foresee nor avoid - then you'll be old, heading into the sickly years, without that health insurance.

Medicare may also go bankrupt or be changed by Congress or Potus. I'd say that is of equal or greater risk these days. "But once you've paid down your resources, you will still have Medicaid. You won't be allowed to die for want of money for your care." On what planet do you live?

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   15:23:24 ET  Reply   Trace   Private Reply  


#30. To: SOSO (#26)

Those taxes on the SS Payments are deferred for 50 years, assuming an age 70 retirement. The taxes on the interest are due and payable at once, year by year.

The average savings account interest rate since 1981 when I started working was 6.007%. It's a lot lower today; it was higher in the early 80s. The mean over that time is 6.007%.

Income taxes have been around 28%, which puts the net interest rate earned at approx. 4.325%.

I'll base the calculations on that.

Vicomte13  posted on  2015-07-10   15:30:02 ET  Reply   Trace   Private Reply  


#31. To: SOSO (#29)

Medicare may also go bankrupt or be changed by Congress or Potus. I'd say that is of equal or greater risk these days. "But once you've paid down your resources, you will still have Medicaid. You won't be allowed to die for want of money for your care." On what planet do you live?

The real one. Medicare will not go bankrupt. We will, instead, go to a single payer system, have tort reform and medical school tuition and malpractice reform, increase immigration quotas for primary care doctors and nurses, impose price controls and raise taxes to cover the difference.

Universal health insurance is a fundamental feature of the modern world. It is not going away, it will be paid for - through taxes. The inexorable logic of the real planet on which we live means that the economy, and legal system, and tax code, will all be adjusted as necessary to pay for it.

Just watch. Resist it all if you must, but you will not stop the tide. Nor will the world in fact come unraveled and fail because of it. Universal health care, pensions and education will be maintained, and socio-economic structures will be adapted to provide for those needs. It's just a matter of getting there.

Vicomte13  posted on  2015-07-10   15:33:55 ET  Reply   Trace   Private Reply  


#32. To: Vicomte13 (#30)

Those taxes on the SS Payments are deferred for 50 years, assuming an age 70 retirement. The taxes on the interest are due and payable at once, year by year.

Payments into the SS sytem are with after tax dollars, i.e. - you paid income taxes on the contributions when made. So add that into your calculation as well.

"Income taxes have been around 28%, which puts the net interest rate earned at approx. 4.325%. I'll base the calculations on that."

You may start at that but I suggest a better rate would be on tax free A+ bonds and forget about the tax on interest earned. Also, one may total defer any accumulated interest until the retire or 70 1/2 which ver is older for a traditional IRA or never for a Roth IRA (remember the tax free traditional IRA to Roth IRA rollover period in you calcualtion if you wish to be totally accurate).

If you use 4.325% investments made 50 years ago will more than quadruple. Investments made about 29.9 years ago would have tripled. In fact investments made just years about 16.5 years ago would have doubled.

Are you going to assume that the maximum payment into SS is made by you and your employer in each of the 50 years?

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   15:45:53 ET  Reply   Trace   Private Reply  


#33. To: Vicomte13 (#31)

Just watch. Resist it all if you must, but you will not stop the tide. Nor will the world in fact come unraveled and fail because of it. Universal health care, pensions and education will be maintained, and socio-economic structures will be adapted to provide for those needs. It's just a matter of getting there.

And the quality of our lives will be the less for it. In addition to aborting the unborn (or perhaps even the new born) we will be aborting the elderly (65? 70? 75?) as well.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   15:53:26 ET  Reply   Trace   Private Reply  


#34. To: All (#0)

Has anybody stopped to think that this maybe a jab at the Demoncraps for making the work week 30hrs via the legislation they passed called ObozoCare???

“Political correctness is a doctrine, fostered by a delusional, illogical minority, and rapidly promoted by mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end.”

CZ82  posted on  2015-07-10   17:19:34 ET  Reply   Trace   Private Reply  


#35. To: SOSO (#32)

Are you going to assume that the maximum payment into SS is made by you and your employer in each of the 50 years?

No, because that is not the life that I've lived or that most people live. I'm going to use the actual amount I earned and paid into Social Security during each of the years.

I can see that a back of the envelope is not going to work, because you're going to pick at the result. So I shall have to be precise, and use the actual IRA contribution limits each year.

And there will be a few other things that must be factored in.

One is the cost of disability insurance, because Social Security is not simply a retirement fund, it's also permanent disability insurance. My uncle had a massive heart attack in his late 40s, did not die, but could not work. He had two children. He got disability until retirement. Had he died - a distinct possibility - his wife and children would have gotten survival benefits, inflation adjusted.

That is real, valuable insurance that would have to be purchased in the private market (if it existed).

Likewise the death benefit for the surviving spouse.

Inflation-adjusted insurance annuities don't exist, so a discounted present- value of money calculation will have to be made. The cost of that premium must be factored into the expenses of the "without Social Security" model. You don't get to take the ENTIRE Social Security amount and invest it at 3% interest. Some of that money has to pay for disability insurance, and for survivor benefit annuities, year by year. And the amount has to be adjusted upward for age and inflation. And a guaranteed insurability rider has to be placed on it. Private insurance will cut you off if you don't pay the premium, or when the policy expires and is reupped, and you can't buy the policy with a pre-existing condition. But Social Security disability insurance adjusts upward for inflation, has guaranteed insurability, and has guaranteed "premium payment" (it's paid out until retirement) with no further contributions.

Some of these features don't exist in private insurance. Some do, and they are expensive, and all of the money spent on that insurance each year is not available to sit and grow without interest.

ALL of the features of Social Security must be priced out and paid for, to REPLACE Social Security in all of its protections at each stage.

We cannot pretend that Social Security is merely a retirement annuity. It's also disability insurance and a survivor annuity.

Vicomte13  posted on  2015-07-10   17:19:38 ET  Reply   Trace   Private Reply  


#36. To: SOSO (#33)

And the quality of our lives will be the less for it.

Social Security has immeasurably improved the lives of the elderly, the disabled, and survivors of both, and will continue to do so.

Vicomte13  posted on  2015-07-10   17:20:46 ET  Reply   Trace   Private Reply  


#37. To: Vicomte13 (#35)

No, because that is not the life that I've lived or that most people live. I'm going to use the actual amount I earned and paid into Social Security during each of the years.

Don't forget to add what employers paid into your account as well.

"I can see that a back of the envelope is not going to work, because you're going to pick at the result. So I shall have to be precise, and use the actual IRA contribution limits each year."

Do you want it quick or do you want it right?

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   18:19:03 ET  Reply   Trace   Private Reply  


#38. To: Vicomte13 (#35)

One is the cost of disability insurance, because Social Security is not simply a retirement fund, it's also permanent disability insurance. My uncle had a massive heart attack in his late 40s, did not die, but could not work. He had two children. He got disability until retirement. Had he died - a distinct possibility - his wife and children would have gotten survival benefits, inflation adjusted.

How was the amount of your Uncle's disability payment calculated?

In case you haven't noticed in recent years the rapid run-up in disability claims is a scandal of massive fraud to which the Fed has turned a blind eye.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   18:22:16 ET  Reply   Trace   Private Reply  


#39. To: SOSO (#37)

Don't forget to add what employers paid into your account as well.

I will add it in, but that's a tricky one. Employers would not simply pay that money to me if they weren't paying it to the government. They do not consider it part of my salary. They consider it a tax they have to pay.

How do I know? Because it is precisely on payroll taxes that employers who hire illegal aliens cheat. They don't pay the illegal aliens more money, or give them the benefit of the payroll tax that they'd pay. They just pocket the money.

So, although I will include that money in my calculations, truth is, that money is the employers, was never mine to begin with, and if the payroll tax went away or were reduced, employers would never pay me or anybody else the difference.

It's a cost of doing business employers bear, grudgingly. If the tax were taken away, it would NOT flow to me. So really that money should NOT be accounted as "mine", because in the absence of the law, it would not be credited to me at all.

Vicomte13  posted on  2015-07-10   18:30:13 ET  Reply   Trace   Private Reply  


#40. To: SOSO (#38)

In case you haven't noticed in recent years the rapid run-up in disability claims is a scandal of massive fraud to which the Fed has turned a blind eye.

It's not a scandal, it's a public policy. Thanks to "free" trade, we have permanently destroyed a substantial portion of the available US jobs. They're gone forever. And that means that there are huge numbers of men, especially, who would be working class guys working jobs, who instead dwell on the unemployment rolls, and then the welfare rolls. This is a political liability across the board.

By finding the cumulative effects of stress on them to be "disabilities", and paying them a check, a solution is found that provides them an unemployment check, for life until they get Social Security retirement, they are removed from the unemployment rolls and cease to be a political liability. The numbers look better than they are. AND, instead of being desperate people, they are transformed into political allies of the system that provides for them.

Part of the political game of the right is to pretend that this is all "fraud", as opposed to the deliberate policy of socializing the unemployed of free trade. But that's what it really is. It's not fraud, it's intentional.

Vicomte13  posted on  2015-07-10   18:34:06 ET  Reply   Trace   Private Reply  


#41. To: Vicomte13, TooConserative (#35)

Go ahead, add in the cost of the equivalent cost of a 50-to-life time term life insurance policy that your Uncle could have bought when he was 18 or 20 (which probably was well under $500/year average over the past 50 years). Also add the cost of a similar disability insurance policy (which was also likely well under $500/year average over the past 50 years).

However, I will concede $1000 year as the average cost over the past 50 years for the private equivalent of what you claim is de facto SS life and disability insurance policies. If you choose a different amount please document the basis and justification for it. HINT: The cost of a $1 million today for 20 year term life policy for a 30 year old man in good health is less about $37/month. For a 40 year old man it is about $56/month. These are to costs today and are much, much higher than what they were in 1965 or 1975.

BTW, did your Aunt and any of her dependent children that were factored into the SS disability payment have to pay any taxes on those payments? If so please factor that in.

But remember what TooConservative claimed, i.e. - that ON AVERAGE (statisically) one will get back from SS what one had been paid into one's account. So you may wish to tailor your analysis to the AVERAGE SS recipient, e.g. - a white male who paid into the system since 1965 and retired at age 66 at full reitrement benefit and a life expectancy of 76.4 years old. If you chose to do this I would use the assumption that this person earned the national median individual (not family) salary for each of the 50 years he worked and what he and his employer(s) paid into the system each year was based on this earned income amount.

Good luck to you.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   19:10:25 ET  Reply   Trace   Private Reply  


#42. To: Vicomte13 (#40)

It's not a scandal, it's a public policy.

Fraud is not a scandal in your world?

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   19:11:02 ET  Reply   Trace   Private Reply  


#43. To: Vicomte13 (#40)

Thanks to "free" trade, we have permanently destroyed a substantial portion of the available US jobs.

We are talking about the rapid run-up in disability claims which have nothing to with the availability of jobs. Get with the program, V.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   19:12:31 ET  Reply   Trace   Private Reply  


#44. To: Vicomte13 (#40)

Part of the political game of the right is to pretend that this is all "fraud", as opposed to the deliberate policy of socializing the unemployed of free trade. But that's what it really is. It's not fraud, it's intentional.

Then it's an intentional fraud but fraud none-the-less.

потому что Бог хочет это тот путь

SOSO  posted on  2015-07-10   19:17:33 ET  Reply   Trace   Private Reply  


#45. To: SOSO (#44)

A fraud perpetuated by the government agencies themselves, who wave people into the program without a second look, to get them off the unemployment rolls, as a matter of policy.

"Fraud" with no reasonable chance of detection, and no effort by the authorities to detect it, and no desire to do so because of the underlying policy, is fraud in name only. It's policy.

Vicomte13  posted on  2015-07-10   19:35:51 ET  Reply   Trace   Private Reply  


#46. To: SOSO (#41)

Ok, I'm going to buckle down to do this analysis. It's going to take time, so I'm going to have to be radio silent on everything else until it's done.

It's hard for me to resist hitting back at taunts, so if you want me to complete this task, don't taunt me!

If you have further thoughts on the analysis, please DO post those, here, because I want it to be a full and comprehensive a study as I can do in a reasonably short period of time.

I can see a couple of divergences in our views that I will have to address.

The first we touched on already: you want me to include the employer portion in the analysis. I don't think that it should be. The employer contribution is a tax. If employers did not have this tax, they would not pay over this money as salary. They would keep most of it as profit. When employers illegally hire people "off the books", they don't pay them the difference of the payroll taxes. They pocket it.

Also, we know the assumption that if people weren't paying Social Security, they'd invest the money for their retirement is wrong. They didn't before Social Security was instituted, and most recently, they didn't do that when the Social Security personal tax was cut during the first couple of years of the Obama Administration. The public at large did not take those percentage savings and put it into retirement accounts. They used it to pay bills. All experience has shown that people live close to the margin and, without forced savings, will not save enough for retirement. I would assert that this is because in an industrialized urban society, most people CAN'T save enough for their retirement needs, which is why we need Social Security. But regardless whether one agrees with me or not on that score, the fact is that when people did get their Social Security taxes substantially cut, they used the money to retire debt. They didn't use it to save for retirement.

Another thing that I will factor in is that the employer contribution is not a 1:1 match, for the employer gets to deduct the amount s/he/it pays for Social Security payroll tax. With a corporate tax rate of 35%, this means that the real economic contribution of the employer is a little less less than 2/3rds of the employee contribution.

Because we don't agree on whether or not the employer contribution should be included at all (as that money is not the employee's), I will prepare the analysis both ways, using the employer contribution, and not using it.

As far as insurance goes, I cannot look at healthy insurance policy, because Social Security covers morbidly obese diabetics with cancer also, automatically. Also, Social Security survivor benefits pay in the event of suicide. Life insurance policies don't. The premia don't change for health conditions, and there is no pre- existing condition waiver. Social Security has to cover everybody. The alternative is more massive welfare. Social Security is social insurance whose price is a fixed aspect of income.

Also, there is a feature of Social Security insurance that does not exist in private life insurance policies or annuity: inflation adjusted payouts. Life insurance and annuities are for fixed amounts, but Social Security adjusts upwards year by year for the Cost of Living. Now, it doesn't always adjust upwards to fully match the inflation rate, but it does adjust upwards in correlation with inflation. Private insurance and annuities do not. So, to simulate this effect, we have to periodically increase the amount of life insurance purchased, to match the cost of living adjustment in Social Security, and we have to take into account that life insurance and disability insurance premia rise with age and pre-existing conditions, and some people are not insurable, but Social Security is guaranteed insurance with no change in premia for existing conditions.

Also, as mentioned above, there's no suicide exemption from this life insurance.

As far as tax advantaged investment goes, I agree that the only fair way to calculate hypothetical performance is by looking at the amount of income that could be sheltered by an IRA during the periods of time in question. This will cover some of the principal and interest. The 401(k) should not be used for comparison, because many employers do not offer it. Personal IRAs are open to all.

I agree that the tax-deferral on payments should be taken into consideration. IRA distributions are taxed upon withdrawal, so the taxes will be taken into accounts. Social Security payments are taxed or not taxed by states depending on state laws. As I will be using my own data, I will apply the tax laws of the state of my current residence: Connecticut. I have no real idea where I'll be living at 70. My wife would prefer New York City. I would prefer northern Michigan, Finland or Siberia. So there's a bit of a difference there. I expect that we'll settle on Paris as a compromise. How awful.

As far as the investment goes, I will look at what you suggested. It must be a very safe investment, something insured. Or something that has never defaulted. Bank deposits are insured by FDIC, but muni bonds, which pay better, HAVE defaulted in some cases. US Treasuries have not. Nor have US Savings Bonds. Equities, common and preferred, are out of the question: a third of the companies on the Dow when I was born went bankrupt and ceased to exist. Social Security has never defaulted on payments, and the only thing comparable are other things that have never defaulted on payments since the 1930s. There are not many instruments like that, but that is the only true comparison. Of course that inevitably means a lower rate of return than can be obtained from riskier investments, but that's part of it too. In any pool of nesters, some people will lose money. But with Social Security, the social safety net, people who lose their retirement or disability money still have to eat, so they'll just pass onto the welfare rolls and continue to be a cost to government. That is why the only comparable securities are those that cannot take a loss - Social Security must have a 100% payout, by it's nature. No default on payment is really possible, because the government will then just have to pay the money out anyway, out of a different pocket.

Even life insurance companies can go out of business, and do. Same with disability insurance companies. Once again, that is not permissible for Social Security, because the government ends up paying anyway, in the form of welfare, if the security fails and people are destitute. Therefore, the only insurance companies that are comparable are those of the top rated insurers. And they usually charge a little more in premium precisely because they offer a lower risk.

Zero risk is a feature of Social Security that is hard to replace in the private sector, but we must get as close as we can. And that means higher rated, safer securities, which means lower returns.

Zero risk with guaranteed insurability and no termination ability are features of Social Security that are invaluable to the young, terminally ill worker with a family who must nevertheless have disability and survivor benefits, who cannot be refused coverage, and who must be able to get the insurance at a fixed proportion of salary.

It's not simply "retirement savings", it's social insurance, and quite comprehensive, and it cannot have any exclusions. You can't really find that in the private sector, because for-profit insurers cannot afford to cover people on whom they cannot possibly make a profit, but the need to manage social welfare needs means that the state has to. You either do it through Social Security, or you do it through outright welfare paid out of the general fund.

Social Security taxes recoup some of the costs. By making the pool include everybody, the risks on each are lowered.

Finally, once we get to the end of the period and to the time of payout, we have to start measuring outcomes. One can retire at 62, or at 70 for maximum benefits. How much one gets depends on how long one lives. Different scales can be used to show when Social Security has paid for itself in terms of retirement annuity. Obviously if you die the day after you retire, you lose. Obviously if you live to 122, you win big. So it's a matter of longevity, and that can be demonstrated.

This is an analysis with a lot of moving parts. I don't have a particular stake in the outcome. In other words, I'm not going to jigger the numbers to prove what I believe to be the case. I am pretty sure that, all in, Social Security will prove superior, hands down, to every other private alternative. I've done a weaker form of this analysis before and came to that conclusion - I don't state opinions about this on emotion. Still, a more thorough and detailed analysis will be useful, not just for me, but for anybody who reads it.

If I am right, the analysis should be so clear an forthright that anybody looking at it will see it and agree. If I am wrong, then i will change my own views on it. I don't love the idea of social insurance because I love the state. I don't like authoritarianism very much at all. I believe that social insurance is necessary to avoid starvation and shortened lives and premature deaths for old people, and miserable suffering by the children of the disabled. I have thought, more than once, that instead of the farce of Social Security accounting (It all really goes into the General Fund, there is no lockbox), that we should just frankly abolish Social Security and Medicare, call all of it Welfare, greatly simplify the tax code, and just pay the costs out directly, perhaps even abolish taxes and just print the money that the government needs to operate, instead of printing the money and "lending" it to banks to invest to expand the money supply. (I speak of "print" conceptually, not referring to ACTUAL printing.)

But let's not get ahead of ourselves. Let me consider the investment vehicles and then begin.

Vicomte13  posted on  2015-07-10   20:32:13 ET  Reply   Trace   Private Reply  


#47. To: SOSO (#41)

You suggest tax free A+ munis. I have to look at them to discern two things: (1) Has there ever been a default on an A+ bond since 1932, and (2) What is the size of the A+bond market.

The instruments in which investments are done has to be a large enough market to handle all of the Social Security money. If it isn't, then the money pouring into the market from every retiree will drive up the price of the instruments being chased. I don't think the A+ muni bond market is big enough to hold the trillions in Social Security money.

I think we're going to end up with Treasury bills or bank deposits, or the money market. Perhaps CDs (though I don't know if any of those have defaulted).

The market has to be able to clear all of that money, and it has to be secure.

The zero risk aspect of this is important, because every individual has to be guaranteed the payment and the insurance at retirement age.

And the size of the market matters, because it has to be able to absorb all of that money without inflating to the moon a limited supply of money.

Alas, one effect on investors that having all of that money pour into lending markets is that it will drive down the interest paid on the funds deposited.

My bet is that we'll end up with federal bonds and bank deposits, but I'll look.

Vicomte13  posted on  2015-07-10   20:39:00 ET  Reply   Trace   Private Reply  


#48. To: SOSO (#43)

The total muni bond market in the US is currently a little shy of $4 trillion, up from $1 trillion in the 1980s.

Of this, 9% is Aaa rated. That's $360 billion.

Aaa rated munis have a 0% default rate over the past 10 years.

Aa rated have a 0.3 per 10000 default rate.

So, to be as secure as Social Security, we cannot use Aa, or A+ rated munis. We would have to use Aaa rated. There's only $360 bn to buy, and they'd need to be bought at par as new issues to really be tax free. That's not enough to cover Social Security's investment needs.

I suppose we could build a composite, and start with munis as a piece of it. But I think we should note that the relentless pressure of Social Security on Muni issuers would push down the rates they'd have to pay, so historical performance data will outperform what would actually happen.

Vicomte13  posted on  2015-07-10   20:48:45 ET  Reply   Trace   Private Reply  



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