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detox665 t1_jc3fld4 wrote

Reply to comment by thunder-thumbs in [OC] US Social Security Fund History by PM_Ur_Illiac_Furrows

The bonds that the trust fund holds are a unique series issued to the trust fund. You cannot buy them anywhere else. Makes it easy to default on them without harming the value/credit associated with other US bond series.

"The full faith and credit of the United States" is valuable only for as long as we can levy sufficient taxes to cover our bills. After that point, very bad things start happening very quickly.

I've been advocating for privatization since the Reagan administration. As things stand right now, I and my cohort are about to take it in the shorts because propaganda beats facts.

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windershinwishes t1_jc459n7 wrote

OK so just eliminate the income cap that the SS tax is applicable to. Or collect more from 401ks and IRAs.

Privatization of Social Security is non-sense. It would cease to be Social Security, as it would no longer provide a guaranteed income to all Americans.

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TracyMorganFreeman t1_jc48qng wrote

Sweden privatized its social security decades ago.

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windershinwishes t1_jc7tub6 wrote

Is a person in Sweden guaranteed a certain income from it upon retirement, regardless of how much they paid in?

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TracyMorganFreeman t1_jc7x3bc wrote

Given that isn't the case for any retirement plan, SS included, no.

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windershinwishes t1_jc80sns wrote

"Regardless" was a bit too broad, sure. So how about "even if it is much much more than they paid in?"

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detox665 t1_jc6o2ts wrote

Eliminating the income cap will not generate enough revenue to cover the shortage. It isn't even close.

A privatized plan could still provide a minimum guaranteed income to all workers. (the "workers" part there is important, IMO).

If you take the FICA taxes that I generated (taken directly from my paycheck and my employer's "share"), and pretend that it was invested in a variety of index funds with a long-term growth of 5% (actual long-term growth is closer to 7%), I should have a bit over a million dollars at retirement age (+/-65). That includes the various "crashes" that have happened over the years.

If my retirement income is kept to less than long-term growth, I would have roughly $50k per year. Right now I'm projected to get $20-$25k depending on when the "haircut" hits and I have to work until almost 68.

Make it so half of any unused funds go back to the feds to cover those with lower lifetime earnings.

Even a person that works for nearly the minimum wage can generate $500-700k of retirement. But we can sweeten that a little from the government.

In the case of people with significant old-age issues (i.e. dementia) there is a pile of money that can be used for their care. That reduces the amount of money that the government must pay.

Social security as currently established is a Ponzi scheme. Sweden has privatized successfully as has Columbia. The only thing Social Security does well is to ensure that seniors are as equally poor as possible.

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windershinwishes t1_jc7vq7r wrote

Calling SS a Ponzi scheme while calling for all of that money to instead be injected into the financial market to be managed by private bankers is just funny.

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detox665 t1_jc8ofvd wrote

Private bankers have a better track record for fiscal responsibility that congresscritters. I know that isn’t saying much but it is true.

The important thing is that the money be actually invested in something real and not just congress’s ability to tax future citizens.

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