Democrats use Fuzzy Math to fund Social Security.

[Power Wagon]

Within 50 years, unless there are dramatic changes to Social Security... including radically changing the retirement age well up into the 80's and cutting off benefits to anyone who saves up thier own retirement, the "promise" of social security will be little more than a bad joke. It has a 100% chance of failure.



If we project the age and demographic changes of our country from the past into the future, by the year 2050, there will be 1 person collecting SS checks for each 2 people paying taxes into the fund. When the program was started, about 1 in 10 people actually lived long enough to collect benefits, and generally only for a few months to a couple years. At that time, there were 22 payers for each collector.



At present, there are between 5 and 6 taxpayers for each collector, and as we all know, the it continues to slip. Presently, the taxes that fund SS amount to 17% of our gross earnings. Your employer is required to hide half of it from you by paying the government before he pays you, but you're still having to earn it anyway. When this ratio falls from the nearly 6 down to just 3, which is expected in about 20 years, there will not only be proportionately more people reaching SS age, there will be more people living longer on it. It's expected at that time that benefits will cost 1/2 of your gross earnings. And, if present trends hold, your income taxes and state taxes will tack on another 35% of your gross earnings, leaving you just 15% to live on.



"What???" you say, "I can't live on 15% of my earnings!!!". Of course not. This information is widely known, actually, and any financial analyst can find the trends and make projections into the future with pretty decent accuracy.



The fact is, it has NEVER been possible to fund the retirements of the public by redistributing the earnings of the working. France, for instance, has less than 2 people working, for each person collecting some kind of money. But the French are on the train wreck now. Thier national debt and continuing deficits, along with an inability to get unemployment below double digits will eventually bankrupt the economy or else cause the currency to fail. Just a couple years ago, France was teetered on the edge of complete collapse and was rescued temporarily, but continues to drift toward the same conclusion.



Every time some politician accuses others of "taking away" social security or that he/she is "saving" or trying to "save" it, they are flat out lying. It is impossible to "save" it in it's present form. The numbers prove it. But for those who've staked thier political future upon this dead horse, those facts are mighty inconvenient.

 

[Steve M]

There's that big IF word again. If a baby doubles his weight in the first year and that being the precedent, by the time he's 80 and has doubled his weight every year, well, you do the math.

A third of the population over 65? That would be quite interesting. I wonder what other ramifications that would have on a society. I think the economy would simply colapse with so many old geezers gone fishin' and not enough young strapping workaholics to fill the void.

So with this hypothetical scenareo on the horizon, should we start packing away the bucks for future retirement??? Wouldn't that hurt the economy now? Or do we spend now to keep our economy healthy? This is so confusing?

 

[Power Wagon]

Originally posted by Steve M

There's that big IF word again. If a baby doubles his weight in the first year and that being the precedent, by the time he's 80 and has doubled his weight every year, well, you do the math.

A third of the population over 65? That would be quite interesting. I wonder what other ramifications that would have on a society. I think the economy would simply colapse with so many old geezers gone fishin' and not enough young strapping workaholics to fill the void.

So with this hypothetical scenareo on the horizon, should we start packing away the bucks for future retirement??? Wouldn't that hurt the economy now? Or do we spend now to keep our economy healthy? This is so confusing?

There are some assumptions you're making that are not quite true...



One: No, we'll not have a third of our people over 65... We'll have 1 for every 2 taxpayers... different numbers.



Two: Some trends are not open to change. Birth rates for the last 20 years, death rates for the last 20 years, the aging boom of the baby boomers, and the resultant drop in birth rates... These aren't really "guesses". They are pretty much established, and we can easily project the next 50 years demographic trends, with error being in the single digit percentages.



Investing your money will not "hurt" the economy. On the contrary... Investing your money puts it in circulation in the business of economic growth. Taxing it to redistribute makes us dependent upon a consumer economy... One that gets pneumonia each time there's a little sniffle in the markets. No, investment-based retirement is good economics and good retirement funding. Please don't put all your eggs in one basket, however.

 

[Rammin On]

I just wish they would give me what I've put in SS . . and let me fend for myself.



Power Wagon is right ..... learn from ENRON ... never never put all your eggs in on baskets ... . if you drop it you go broke ... of is it the eggs that get broke ... .



:--)

 

[Steve M]

Rammin on, I have to agree with you but, that's one of those balls that got started with good intentions and to stop it now would either have to screw us or the oldsters that paid in before us. I'd like to see some of the missuse of SS put to a stop. I've known of young 40s people who have "back problems" and can't work anymore so they go on SS all the while they can do all kinds of things they "want" to do. SS for the elderly who have worked all their lives and contributed to society in a positive way I think is not too much to ask. Some people are good people but have never had the mental capacity to make much income. Much less how to save or invest. That doesn't make them mooches. We need People to work the menial jobs as well as trades and above. What do we do with these people when they're too old to work and too young to die?

PW, I'm not going to lose any sleep over it. I lose sleep over everything else. You have always seemed to be much smarter than me. I'll have to take your word for it. I do understand a diversified investment portfolio. I even understand why K-Mart is going belly up. Losing one's identity in a fiercely competitive economy isn't good. I also understand how insider trading is hands down the best way to go for personal gain but I don't know any big guys. But I provide their transportation to the offices in the sky.