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War in Ukraine Turns on Russia what happened during total solar eclipse Israel Attacks Iran, Report Says - LIVE Breaking News Coverage Earth is Scorched with Heat Antiwar Activists Chant ‘Death to America’ at Event Featuring Chicago Alderman Vibe Shift Status: Not Logged In; Sign In United States News See other United States News Articles 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: 8236 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. Post Comment   Private Reply   Ignore Thread   Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 92. #5. To: buckeroo (#0) What is most disappointing here is Bush's total lack of ideas. Rather than asking the 50% who do work to work longer hours, unemployed people should be returned to work instead of getting endless checks and "food stamps". And the retirement age should be raised, say, a couple months per year until the minimum age is 65. Or 67. Social Security was never intended to be a retirement plan lasting 20 years or more for most retirees. It was predicated on half of all payees dying before retirement and the majority who did retire collected 5-10 years on average. To see real economic improvement, you have to raise the employment rate and the retirement age. I would give bonus points to any pol who just admits this fundamental but unpopular fact. Tooconservative  posted on  2015-07-09   13:27:13 ET  Reply   Untrace   Trace   Private Reply   #7. To: TooConservative, buckeroo, All (#5) Social Security was never intended to be a retirement plan lasting 20 years or more for most retirees. It was predicated on half of all payees dying before retirement and the majority who did retire collected 5-10 years on average. 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. SOSO  posted on  2015-07-09   17:14:42 ET  Reply   Untrace   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   Untrace   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. SOSO  posted on  2015-07-10   11:05:31 ET  Reply   Untrace   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   Untrace   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. SOSO  posted on  2015-07-10   15:01:50 ET  Reply   Untrace   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   Untrace   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? SOSO  posted on  2015-07-10   15:45:53 ET  Reply   Untrace   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   Untrace   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. SOSO  posted on  2015-07-10   19:10:25 ET  Reply   Untrace   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   Untrace   Trace   Private Reply   #57. To: Vicomte13 (#46) You should read this full report (the PDF) before you start your analysis. I suggest you stick to the closest representation of the "average" SS payer. Probably this would be: - a married two income white couple, - the male born in 1945 and spouse say in 1948, - the male entering the work force in 1965 (46 years of working and contributing to the SS system)), the spouse say in 1985 (i.e. - after the kids get old enough for her not to have to be a stay at home Mom), - each retire at age 66, - the male earning the median individual income in each year of employment, the spouse 50% of that when she works (i.e. - the spouse will be entitled the higher of 1/2 of the male SS payment or what she is eligible for based on her employment history, which likley would be 1/2 of her spouses payments), - no disability payments for the spouse or kids, - both live to their respective life expectancy, - a reasonable imputed interest earnings rate on the IRAs of both the employees and employers contributions to their respective SS account (i.e. - taxes on investment earnings deferred until retirement). From the foregoing you can calculate: - the total contributions made by the couple and their employers, - the number of years SS payments will be made to the couple and the surviving spouse, - the combined annual SS payments to the couple and to the surviving spouse, - total amount paid by SS to the couple and the surviving spouse. You then can compare the total amount paid by SS to the amount of the combined payments invested at the assumed interest rate. Then reduce the later by $60,000 ($1000/year for 60 years) for the cost of a $1 million term life insurance policy and disability insurance for the male. I am certain that you will find that the amount paid to the couple and the surviving spouse will be significantly less than the payments invested at the assumed interest rate less the cost of the insurance. I know this is true for my wife and I as we closely match this "average couple" except that I earned near or more than the capped SS taxable income for my working career and my wife never earned 50% of my annual income (about 25 years of full time employment after our daughter was sophomore in HS). SOSO  posted on  2015-07-11   1:40:46 ET  Reply   Untrace   Trace   Private Reply   #60. To: SOSO (#57) I will use myself as the basis for the analysis, because I have the exact income figures and the exact taxes paid. I was the average earner for many years when I was in the military, a below-average earner when I was in law school, and an above-average earner as a lawyer. The normal pattern for people is to earn little when young, and gradually earn more over time. In my case, today I earn about ten times what I earned as a man right out of college. For most people, that number is more like five times. So, the point you are trying to make about Social Security will be better made, for you, by my case than by the average case. The average person doesn't hit his peak earnings until a few years before retirement, and so doesn't pay the peak into the fund until the end. He ends up getting the benefit of the high years without having paid into it for decades at the maximum level. In my case, from 1981 to 1998 I paid into it at lower levels, but from 1999 onward I've always had to pay the maximum amount. This will skew the numbers more towards your argument, but I believe it will still come out to have been a great investment. I will assume retirement at 62 (the earliest one can retire) and at 70 (when benefits hit their maximum), and give the numbers for both. As I have no idea when I will die, I'll simply give the numbers on a going-forward basis, year by year. Obviously the longer I live, the better Social Security will look. If I die in a car crash a month after I retire, it was a bad investment. But then, if I won the lottery and died the next day I'd be in exactly the same place: you can't take it with you. As far as the employer portion goes, we will have to agree to disagree on this. From my perspective, money the employer pays to the government in taxes, for which he gets a tax deduction, is not pay to me, and doesn't belong to me. If the tax were not there, he would not pay that money over to me. It is not an investment that I made, and I am looking at the situation from the perspective of the individual, not from the perspective of an account. What the individual pays is what makes it a good investment or not. I grant the truth of what you say: that if the employer didn't pay that portion of the account, the account total would be less. But that doesn't perforce mean the benefits would be less. Rather, taxes might overall be the same and the difference be paid over from the general fund. (In ultimate truth, dollars are fungible, "personal accounts" are an accounting fiction myth, and everything is really just paid out of the general fund, but politically people have not been willing to address things so directly, so we have all of the various fictions). In any case, although our philosophical views on the employer contributions are different, I will present the numbers both ways, with and without the employer contribution. As an individual, what I experience is what I have to pay into it, so that's the cost TO ME. The employer contribution is a cost that has been pressed out onto the general public as a tax. Employers do not pass along the entire cost of taxes onto their customers. When LLC owners cross a tax threshold, they don't suddenly jack up their prices to account for the higher marginal rate. Prices are driven by the market, and can only partially recapture tax costs. Taxes cut into profits. If they did not, business owners would not scream so much when they are raised, because they would simply hike prices by the added tax. In truth, they do not and cannot do that. When taxes go up, businesses are squeezed on profit margin precisely BECAUSE they cannot pass all of it along to customers. If the employer contribution were removed, the employer would not pay me that difference. The Social Security surplus, of which you spoke, is the product of the fact that the since Social Security was implemented, the work force has streakily grown due to population increase, immigration, and longer life spans, all of which have brought more people into the system than there have been people paid out of the system. The system has not profited on individual people, it has simply accumulated a surplus because more is going in than going out. This, ultimately, is the fatal aspect of contraception. The population would have decreased, and Social Security have become a net outflow, but for the immigration to fill the hole. But these are macro- issues that go well past tax policy. Contraception policy ultimately drives demographics, which drives everything else (for people are literally everything in a polity), but those vast forces and factors are not what you or I experience when money is taken from our paycheck for Social Security. We experience what we pay, and what we get paid. That is why I believe that the proper measure is only what the worker pays. But I'll present both sets of numbers, because there is obviously a direct nexus between the employers side of the contribution and the size of the benefit that the government has paid out. I content that the size of benefit is based roughly on needs of life, and that if the employer were not paying the payroll tax into the simulated "lockbox" - the "personal account" that only exists as a bookkeeping fiction - that the government would have to pay out at least the welfare and food stamp and public housing amount anyway, because those address direct needs that, if unaddressed, would result in starvation and mass homelessness of the elderly. Welfare money doesn't come out of the "Social Security" side of the fictional ledger, but welfare benefits would substitute for the portion that is called "Social Security" now, if the Social Security payments were less. Without the Social Security surplus, if we just abolished Social Security and paid all old people straight welfare, the cost would be a lot less…but the politics would be unbearable: old people are not willing to have worked their whole life to live in utterly penury, hand-to-mouth on welfare, in their old age. Want to abolish Social Security and have everything cheaper? Then build public housing for retirees, give each means-tested retiree an apartment in public housing at retirement, and give them food stamps and Medicaid and some spending money stipend. Welfare would be a lot cheaper than Social Security, and there would be no money trapped in a simulated trust fund. If I were king, that is probably how I would do it: no Social Security at all, and no Medicare. Just welfare. Most old people would be on welfare. That would be cheaper. But you'd have to be a king to pull that off, because retirees don't like to think of Social Security as welfare, and are not willing to live at bare-bones welfare and Medicaid levels. Social Security and Medicare are the "Gold Plan" versions of welfare. If we really want things cheaper, abolish all of it, use the trust fund to eliminate debt, and just have a "Tin Plan" welfare program for everybody who is poor. Allow people to go on welfare permanently at age 70. Means test them and deplete all of their savings first, then gradually raise their benefits as their own means run out. This would be far cheaper, and would be just as direct "socialism" as Social Security is. But it would never fly in a democracy. Social Security and Medicare is the grand political compromise to achieve a middle class standard of living for retired and disabled people, as opposed to just having all of the old and disabled be at lower-class welfare subsistence levels. Really, THAT is the choice that we're all on about: do we have Social Security and Medicare and seek to maintain retirees at a middle class standard of living, or do we just have Welfare and have retirees and the disabled at a lower class standard of living. Having no safety net at all means Calcutta, and that's not politically sustainable in a Christian country. Maybe it IS sustainable in a post-Christian country, to which we seem to be hurtling, but the examples of Europe, including the Soviet Union, show that people will not accept utter penury, and will instead demand at least a US-welfare standard. And that's what we'd be talking about, policy-wise, if we got rid of Social Security (assuming it were even politically possible to cram down a lower-class welfare standard on the Social Security middle class0. I'm going to get away from policy, though, and get to this analysis, so that at least we'll have it to compare to the costs of public housing, food stamps and Medicaid. Vicomte13  posted on  2015-07-11   10:19:31 ET  Reply   Untrace   Trace   Private Reply   #67. To: Vicomte13, SOSO, A Pole (#60) And that's what we'd be talking about, policy-wise, if we got rid of Social Security (assuming it were even politically possible to cram down a lower-class welfare standard on the Social Security middle class0. All advanced nations have a social security system pretty much like our own. I don't get why so called American conservatives act as if it is some new idea that does not work. Why do American so called conservatives want to adopt the way Somalia or Haiti or the Congo is? I mean there are not taxes and limited govt there and thus I assume they are paradise on earth. Meanwhile I assume the socialist Scandinavians are living in poverty and are starving. Pericles  posted on  2015-07-11   19:10:59 ET  Reply   Untrace   Trace   Private Reply   #68. To: Pericles, Vicomte13, A Pole (#67) All advanced nations have a social security system pretty much like our own. I don't get why so called American conservatives act as if it is some new idea that does not work. Who on this thread claimed SS doesn't work? SOSO  posted on  2015-07-11   21:42:56 ET  Reply   Untrace   Trace   Private Reply   #69. To: SOSO (#68) Who on this thread claimed SS doesn't work? All SS is about: another tax collection scheme that has been abused by the US government to pay for other federal operations consistent with creating wars around the world. Ronald Reagan made borrowing from the SS "funds" an easy proposition, whereas before his approach for federal revenue generation, there was only begging, borrowing and cheating. buckeroo  posted on  2015-07-11   21:50:10 ET  Reply   Untrace   Trace   Private Reply   #82. To: buckeroo (#69) SS is not about that. Social Security is about providing income security for workers and their dependents, for life, no matter what happens to them, and regardless of the particular circumstances of the individual. The most unlucky, star-crossed worker in America - the guy born with all sorts of congenital diseases that cannot be cured - or insured - is covered. The alcoholic, depressed, chain-smoking worker who reaches retirement age is covered. That's the point: cover EVERYBODY in the safety net. It's not a particularly generous safety net. SOSO is right that Social Security Disability, Survivor, and Retirement Benefits, all on their own, provide a lower-middle-class living wage, nothing more. This is higher than the lower-class, bare-bones subsistence provided by Welfare. Social Security disability recipients, and those on survivors benefits, or those living solely on the Social Security retirement check, take home more than those who are just on food stamps and living in shelters or government apartments. Social Security is not a tax collection scheme, it's a comprehensive salary insurance program. It's expensive, and taxes are assessed to pay for it. Because of political resistance to the idea of simply taking money out of the general fund to pay these costs (and raising general taxes to cover the costs), the FDR- Era politicians established a separate tax and a structure to make Social Security look and feel like an annuity. That was window-dressing to make it politically palatable. Social Security preceded welfare. Social Security does an exceptionally good job at what it was designed to do. That is why it remains such a popular program. Vicomte13  posted on  2015-07-12   13:55:32 ET  Reply   Untrace   Trace   Private Reply   #85. To: Vicomte13, bukeroo, All (#82) The most unlucky, star-crossed worker in America - the guy born with all sorts of congenital diseases that cannot be cured - or insured - is covered. Exactly. And that is why some risks are not worth the cost of coverage. The government underwrites these total catastrophic risks for us and that is a good thing - I never disputed this. But the reality is that there are quite affordable alternatives in the private markets that will cover a wide majority of ALL of these unlucky poor soul events. At some point the incremental cost of insuring the incremetal risk by the individual is simply not worth it. Would you pay $100,000 per year for a $1 million lifetime life insurance policy starting at age 20? If you take the system as a whole and use a very modest historical risk free interest rate (10 year U.S. Tresury Bond) and add the cost of reasonably cost effective private life, accidental death and disabilty insurance, on average those that paid into the SS sytem will not get out of the system what was contributed into the system on their behalf. If that has not be true since the beginning of SS there never would have been the surplus that system has built throughout the decades. SOSO  posted on  2015-07-12   14:17:04 ET  Reply   Untrace   Trace   Private Reply   #88. To: SOSO (#85) SOSO, I've spent a few hours over the last two days shopping the Disability Insurance Market, and today, the Annuity Market (to get the survivor benefit that Social Security offers). You've said that these insurances provided by Social Security can be replaced by private market products. That is not true. The products flat out do not exist. They cannot be bought at any price. NO insurer provides Cost-of- Living adjustments for a lifetime. The best you can get on disability insurance is 5 years, and that costs a 40% premium. Social Security covers workers with disability insurance for 50 years, with COLA. To get the comparable return out of a private policy, the policy price would be on the order of 400% the cost - but it does not exist. You cannot buy that insurance if you want to. Social Security is the only place in the world where that insurance is available. It is of tremendous value. Likewise, a man with developing muscular dystrophy and cancer cannot but disability insurance. The underwriting is massive. But he automatically gets it, for 6.2% of his wage up to $117,000, through Social Security. Once again, Social Security provides a product that CANNOT BE REPLACED by private insurance. That's the REASON why it is superior to private insurance. Private insurers operate for profit. They can only sell policies to people for whom it would be, on average, profitable for them to do so. Women pay a generic 30% more than men on disability insurance, because women are far more likely to become disabled than men. That is priced into private insurance, and it plus medical exclusions for pre-existing conditions render disability insurance out of sight for anybody who is nearly certain to meet it. The point of Social Security is NOT to run a profit for the government. It's purpose is to provide income security NO MATTER WHAT, to EVERY SINGLE PERSON. THAT is why everybody pays the tax on all wages. Private companies cannot provide that coverage. If they could, they would, but there is no profit in it. They CAN'T, so the government does. The same is true with medical insurance for 85 year olds. At that age, everybody is developing illnesses of some sort, and maybe 10 people in the whole country have the direct income at that point to pay it. Insurance will CERTAINLY operate at a loss covering such people, so no insurance does. The government does. Everybody gets covered, because the people with the worst luck HAVE to be covered, or let die, and letting people die for want has not been our way, at least not when we were a Christian country (which we were when all of this was set up). This burden cannot simply be shifted to the private sector. The PROBLEM is that you'd end up with all of the worst cases, only, paid by the government, without the revenues coming in from the larger pool of everybody (the biggest pool of all) to cover it. When I looked at annuities today, I likewise found that the Social Security product: Cost-of-living adjusted, 50-year annuities with survivor benefits, do not exist. The best you can do is a 25-year annuity. And for me to buy such an annuity today, from an AAA rated insurance company, spending the full $14,000 of self+employer social security contributions, would buy a 25 year annuity of $55 dollars per month. My Social Security survivor benefit for my wife and minor child would be $3650 per month. To equal that would require 70 YEARS of $14.000 per year premiums. The premiums on Social Security Disability Insurance, and Social Security Survivor Benefit insurance, each alone, would be more expensive per year than the amount my employer and I pay into Social Security. We haven't looked at the retirement benefit at all yet, and already the price of these two insurances: disability and survivor annuity, outstrip the maximum contribution into Social Security (about $14,000 per year). Social Security is THE single best insurance program available, precisely because it covers all, without conditions, at a flat premium, and is adjusted for COLA. You cannot even come close to replacing that in any private insurance vehicle. The insurance aspect of Social Security ALONE is worth the cost. If you disagree, I challenge you to go out there and find a disability insurance product or a survivor annuity product that has the features of Social Security. Go try. You can't. It doesn't exist. Vicomte13  posted on  2015-07-12   15:01:45 ET  Reply   Untrace   Trace   Private Reply   #89. To: Vicomte13 (#88) You've said that these insurances provided by Social Security can be replaced by private market products. That is not true. I said there is reasonable insurance coverages available. The issue is not the coverage available to the worst of us but to what is actually consumed by most of us. Any rational individual would look at the cost-benefit relationship of private coverage and decide that covering ANY AND ALL POSSIBILITIES is simply not a rational decision. There is power and truth in actuarial data. I never stated that the private matkets can or should cover all 6 sigma risks. But through what emploers offer to employess and what is commercially available at a sensible cost cand and does cover 3+ sigma. For the 3+ sigma of participants, they will not get out of SS what was paid into the system on their behalf aven at a modestly low risk free interest rate of 5%. Also, for those unlucky, unfortunate souls that incur catastrophic eventys their still is a safety net of welfare, medicare, medicaid, etc. So its not SS or nothing. You are really bending over backwards to defend the indefensible by trying to conjure use a 6 sigma event to represent the bulk of the population. If that's what you insist on doing save your time. I already conceded tha SS is a very goos deal for some people. SOSO  posted on  2015-07-12   15:16:38 ET  Reply   Untrace   Trace   Private Reply   #91. To: SOSO (#89) No. "What is consumed by most of us" is NOT ADEQUATE when you are speaking of the role of the King. The King is charged to look after ALL of the citizens. The last, smallest, least of the sheep must be provided for. The 6-sigma event happens to millions, and there is a cardinal difference between welfare, which is now TIME LIMITED, and Social Security, which is for life and a more generous benefit. Social Security, you have correctly noted, is lower-middle class living. Welfare is grinding poverty. One does not STARVE, but one lives precariously, and the government is always threatening to snatch it away. We could save a lot of money by abolishing welfare and Medicare, and telling the old that they have to save and invest for it, and that the only government benefits available to anybody are welfare and Medicaid, once they have completely exhausted all of their personal savings. That would certainly save money. And the electorate would overwhelmingly reject that. No, welfare subsistence is NOT ENOUGH for people who have worked hard for years. They demand more protection than that, against 6-sigma events. If I get a brain tumor and die mid-stream, that my children can go to the projects and live on food stamps for a few years, and then maybe lose their eligibility and be homeless, is not good enough, and it isn't Christian either. Social Security disability and survivor benefits are lower middle class, but they are orders of magnitude better than welfare. Welfare as currently structured is NOT an acceptable floor. Abolish Social Security and make the Social Security disability and survivor and old age levels the WELFARE level - THAT is an acceptable floor. But to rip away the Social Security safety net and rely on WELFARE, which leave our streets full of homeless we can all see, is NOT adequate. Social Security is the FLOOR of acceptable. How to do that is the question, and who to do that. If you want to have everybody buying private insurance, and then the government provide the Social Security level of benefits to everybody in the event of the uninsured six-sigma, that would work. But the 6-sigma event cannot be IGNORED. Social Security COVERS THAT, for everybody who works, and that is the POINT. So, any proposal MUST cover that, and it must cover it AT THE CURRENT LEVEL. Throwing six-sigma workers down into the destitution of WELFARE is not a solution. Private insurance for what it will cover, and government insurance of the catastrophe, and of the cost-of- living adjustments? Maybe. But then there is the simple question: within the EASY range of coverage, where insurers make a profit, per capita Social Security is pretty cheap because it's not for profit. So how is there an advantage in cost by taking all of the cheap insured for whom there would be little payout out of the not-for-profit Social Security system and putting a profit margin on those accounts? If it could be demonstrated that the costs would be lower overall to individuals, all in, to privately ensure against the short-term risks but have public insurance against the catastrophes, that would be fine. But I don't believe that the economics would ever bear that out. Insurance pool theory says the exact opposite. Bottom line: a million six-sigma events happen every year, and they must be covered. Only the state can cover them. Throwing them into the penury of welfare is unacceptable, unless you raise welfare benefits to match what Social Security pays. And you'll never accept that. Vicomte13  posted on  2015-07-12   16:26:23 ET  Reply   Untrace   Trace   Private Reply   #92. To: Vicomte13 (#91) You have communism and christianity confused. The Bible says if you don't work you don't eat. I'm not talking about the old. That is the role of the church not the government. A K A Stone  posted on  2015-07-12   16:34:25 ET  Reply   Untrace   Trace   Private Reply   Replies to Comment # 92. #97. To: A K A Stone (#92) The Bible says if you don't work you don't eat. No it doesn't. Paul said to a specific church that had lots of hangers-on coming there specifically to mooch meals, but who would not assist in the operation of the Church, that they were not to be given the free meals then, because they refused to assist in the religious service. What God says about the poor is extensive, and it is a stream of commandments to give them what they need to live, that your property is not your own but God's, and that God commands you, as steward of his property, to use it to help the poor. Vicomte13  posted on  2015-07-13 19:15:30 ET  Reply   Untrace   Trace   Private Reply   End Trace Mode for Comment # 92. Top • Page Up • Full Thread • Page Down • Bottom/Latest

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