"Social Security is a compact between generations" is a rationalization of the mediocrities who are employed by the SSA who could get neither the same salary nor the same benefits from a private sector employer. If you're going to boil the arguments down to "cui bono", don't act as if the SSA is staffed by a bunch of angels in whose mouths butter would not melt. They're just a less-well-compensated bunch of crooks than the Wall Street bunch. Why is there even a single person employed by the SSA, since the entire "investment program" is "buy special Treasury IOUs"? You can set up an automated program to do that, as well as automated programs to collect the necessary data to determine the size and timing of the buys. You want to take your chances with those crooks and I prefer taking my chances on Wall Street. The fact that I would gladly let you put your money with the SSA if you wanted, but you won't let me opt out says volumes about the kind of program you support and the kind of petty fascist which lurks inside you.
(1) "Compact between generations"... aka Wind Song obfuscating the fact the program was ill-conceived and hosed in execution. And was it Wall Street who stole the SS trust fund or CONgress? (2) Not a Ponzi Scheme? What do you call it when the first in contribute $200 and collect $100K plus in benefits... and the later who put in $HUNDREDS OF THOUSANDS... get back a fraction of their contribution? Sounds like your opinions need more education.
I want to post an important correction to my 12:00 pm CST post four posts above this one. In the next to the last paragraph I wrote: "This is patently untrue! Current workers are contributing to their own retirement benefits and potentially to the retirement benefits of their fellow workers who may die before they do." This is incorrectly stated. My post should read instead: "This is patently untrue! Current workers are contributing to their own retirement benefits and potentially to the retirement benefits of their fellow workers who may live longer then they do. Sorry for this error.
I don't care about "shared risk". Obviously, that's a feature of the program's mechanisms and I'm aware of that. We differ on the desirability of that feature. I think it's basically theft and you think it's just peachy. It's obviously not "shared risk" because your "low wage earner" risks nothing. Where's the "low wage earner's" risk? You do realize that if low wage earners had their own and their employer's contributions, that would give them on the order of 12% more income to invest, right? You also do realize that hardly anyone stays in the "low wage worker" category their entire working lives from age 18 to 65, right? So, your whole "they wouldn't have enough to invest" sob story is built on a foundation of sand. Sell it somewhere else.
You will have to study social security, then you can answer your questions for yourself,and decide whether social security is good or bad. Quickly I can state that the shared risk feature of social security is responsible for some getting back less than their contributions and others getting more than their contributions. You might also want to study annuities offered by life insurance companies and ask the question: what happens to my money if i die before I have received in benefits what I spent to buy the annuity? There are also tax implications that must be considered. Social security contributions are not taxed. Benefits for workers who retire on only social security are tax free. Tax on social security benefits is phased in depending on AGI. Scat, all of your Social Security benefits will be taxed. That's the price we have to pay for making a lot of money. Sorry about that!
Good, now we are getting somewhere. It's a matter of your personal philosophy. Though i think it is short sided, and not in your best interest, I won't argue with it. It's your right to think as you do, so long as your thinking doesn't harm others. That's the part I'm not so sure about. To answer a few of your questions: 1) The low wage earner's risk is in dying young before they receive a return commensurate with their contribution. 2) correct, the current employer/employee contribution is 12.5% (I think.) -- its been reduced just recently. Supposedly that's temporary. 3) No, I don't realize that. 4) I don't think so. I think this isn't just true of very low wage workers, but those in the lower half of whats left of the middle class as well. They also have, in general, too little disposable income to properly fund an individual retirement account.
it wasn't directed at you particularly, most everbody that posted has an opinion, but it doesn't sound like their spirits are that broken
All of your points boil down to "I decree that the Federal government shall take from some to give to others". It's mob rule. Can't you just admit that rather than resort to ludicrous rationalizations? What you are also enabing is for young low wage (and now you're bringing the middle wage earners in, too) workers to substitute other types of current consumption over retirement savings, which is another prioritization of consumption over savings which distorts capital formation. You're basically saying to them, "Go buy that flat screen because Uncle Sam's got your back for retirement". Is that really the most socially-beneficial message to send? If individuals had that 12%+ of income that they contribute and their employer contributes to SS, that would be more than adequate to fund a retirement account that they would OWN rather than one subject to shifting benefit rules and other program changes. Why don't you want poor people to own capital? You'd rather they depend on the whims of bureaucrats and politicians? How many of those poor could leverage that ownership into other things, such as starting their own business without the need for bank loans? You are a typical narrow-minded supporter of a "least common denominator" society where choices and freedom are circumscribed to narrow options that simple-minded people can handle. Yet, I'd be shocked to find that you consider yourself anything but a broad-minded person. You just don't know what you don't know. Actually, if you put contributions into a private account, the risk to the low wage earner of dying too young would dissolve because his ownership of that account would enable him to leave it to his family, including non-relatives, who would not be eligible for survivor's benefits. Heck, he might even leave it to a charity he likes. Point being, it would be his to do with as he saw fit, rather than locked up in a giant pool of money. Please find me even 5% of workers who remain "low wage" their entire lives. Do these people never upgrade their skills? Do they never get promoted in their workplace? They just do the same menial work for 50 years? Even a guy who starts on the frying station at a fast food place gets promoted to manager or goes to college some day. Finally, you do realize that black men do not, on average, live to collect SS equivalent to their payroll tax contributions, right? And that the primary beneficiaries are white women? Why do you hate black men so much that you'd take their money to give it to white women? Are you a racist? As for my "short-sighted" views, you may recall that I was the one saying that programs like SS and Medicare, which distort individual incentives to save, should only be put in place if they can be shown to be sustainable for centuries. Yeah, I'm soooo short-sighted. We know what works for centuries and it's private ownership of capital, i.e. private retirement savings.