Get rid of social security?

Of course there is risk. A successful self-employment endeavour will typically require capital and will certainly involve significant opportunity costs.

There is no such beast. 'Pie in the sky' stuff won't help you much when trying to refer to economic reality

 

It costs absolutely nothing for me to push my lawnmower from house to house and see if someone will pay me $40 or $50 to mow their lawn. It costs all of $20 to buy a paint brush and a paint roller to paint a house (the homeowner buys the paint). I could do this all day long and never incur any additional expenses. I could buy a few bags of apples and sell them on the street corner for a buck a piece doubling my money all day long and always be making money. Given a choice between going hungry and doing any of the above isn't even a "real" choice because I'd choose to do any of them before I'd sit on my butt and do nothing. Unfortunately if I did any of the above the government would bust me and take any income I earned plus impose fines that exceeded any income I might have made for not having a government issued licence.

Sure, under today's draconian government interventionism it would cost a lot of money to do any of the above. To paint a house or mow a lawn it's going to cost me $1000-$5000 to obtain the correct licenses and for the unemployed that is a huge risk that literally takes food off their table. Even to sell apples on the corner I need a business license as well as a food handler permit that takes both time and money to obtain. These are government imposed expendatures that have no return on investment as they are unrelated to the actual business. Starting an enterprise is only expensive because of the government. I've read too many stories of successful enterprise before the government got involved.

The individual that happened to own a small truck began hauling stuff for people locally and that "enterprise" expanded to include a fleet of dozens of large tractor-trailers hauling freight from coast to coast. McDonalds started out as a small hamburger stand that cost a few hunderd dollars to establish before government regulations set in and it expanded into a $24 billion enterprise.

Success in enterprise does not depend upon money, except for the non-value-added costs of government regulations, per se but instead depends upon dedication towards achieving a goal of success. There is virtually no risk for the individual that is truly dedicated to success and all that the government does is impede that success through regulation. Government does not promote success, it impedes it.

 

I would agree with you more, but the corporate "poor" in our republic can even get multi-million dollar bonuses with their corporate welfare.

I do agree with you to a certain extent regarding regulation; but that does not account for persons who may not be able to find a private sector means of production or why social security was invented, for the elderly, in the first place.

What objection can there be to correcting for the inefficiency of a natural rate of unemployment above one percent in our political-economy? It would act as a simple means of production that could function in a manner analogous to a rising tide lifting all boats and prevent any "race to the bottom" through that form of minimum wage that could be as easy to administer.

 

Bringing this back on topic thousands and thousands of enterprises do require capital which is why privatization of Social Security makes sense and works. Obviously the person that starts a house painting service only requires enough money for a paint brush and a paint roller but corporations do require capitalization and that comes from investors. The capitalization of enterprise generates wealth for the investors that own the corporation. Privatization provides the funding for the capitalization of enterprise or by the purchase of a percentage of the enterprise the wealth created by the corporation is shared by the owners.

If, as an investor, I purchase partial ownership of a corporation by purchasing stock in that corporation and over time it generates enough wealth to double it's own worth then when I sell my stock (percentage of ownership) then I can expect to double my investment. As the corporation grows, re-investing in itself, my personal wealth grows because I own a percentage of that corporation. That is called capitalism because the people own the means of production and they profit from that ownership.

Diversified and age adjusted investment accounts are always successful because the economy always expands because there is always increasing demand for commodities and services over time.

 

Does anyone have the current numbers on the percentage of small businesses that fail?

 

I've addressed the questionable or erroneous assumptions and calculations in your theory before, demonstrating several errors you made as well as higher questionable assumptions. I'll refer anyone who wants to see them to the prior threads we had.

Someone who retired in 1999 thinking they'd continue to get 10% returns in the stock market is now up (*)(*)(*)(*) creek without a paddle.

Frankly, I don't care what private system you have, as long as it provdes a minimum level of living income for retirees until they die.

I'm not supporting any system that potential leaves aged people out on the streets because their portfolio did turn out like you claimed.

 

It is not the fault of the People, that their even wealthier, elected representatives to government can't seem to come up with simpler public policies that are not subject to as many political passions of the moment even with their presumably, greater access to be better education.

 

A sense inconsistent with pareto improvement? You're wasting my time.

 

Leave social security as it is. Privatizing would be the worst thing that could be done; the only people who'd benefit from privatizing would be the clearing houses who depend on commissions.

 

Age adjusted accounts move a person's assets out of the stock market by the time they reach retirement so the above simply doesn't happen. We already have annuities in the private sector that provide a check monthly for life regardless of how long the person lives. Many corporate pension plans use these types of annuities for their employees retirements. They are completely unaffected by fluxuations in the stock market.

These annuities don't pay 10% but more in the range of 5% but a person with a million dollars only requires a 5% payment for a $50,000/yr annual income. The key to having that one million dollars in assets is diversified and age-adjusted investing over a 45 year working life because even someone earning minimum wage with 10% of income invested will have well more than one million dollars at retirement.

How many times does it have to be brought up that a "safety net" is a necessity for the privatization of Social Security?

Currently the minimum retirement income that Social Security provides is about $7,000/yr. Personally I believe that should be doubled for a privatized Social Security program (which is more than the average SSI benefit today) but the amount of income from the "safety net" is subject to discussion and debate.

I don't believe that having safety net is really open to debate because I see it as a requirement. Privatization has to promise more for Americans and not less. Because the history of diversified and age adjusted long term investments have a 100% success rate we can assume that few if any would ever require the safety net but the "just in case someone fails" is always a theoretical possibility it needs to be addressed. Beecause the possibility of it happening is so remote it could afford to provide double what Social Security offers today IMHO.

This is where I find most well intending "liberals" miss the boat. Assuming the mandatory requirement for a safety net how can they actually oppose privatization of Social Security? Privatization can work and low and middle income individuals will accumulate a huge amount of personal wealth based upon historical data. They won't require a welfare program because they will have the personal wealth that they need to ensure a life-long income that is many times more than Social Security can provide.

Instead of being "naysayers" why don't they jump onboard to ensure that the safety net is adequate and also address the specifics of how to use personal asset growth to improve the lives of the elderly? When we can demonstate historically that a person that might receive $1000/mo on Social Security would instead receive $4000/mo with diversified and age-adjusted investment accounts with no unmitigated risks then why would they oppose this? It makes no sense because we would still have a safety net "just in case" to ensure that "granny doesn't end up on the street" in her old age.

Instead of opposing privatization liberals need to help create it.

 

In my opinion, a more efficient social safety net would act in a manner analogous to a rising tide lifting all boats and ensure full employment of resources in the market for labor.

 

The People have 100% ownership who is voted into office...

 

Retirees are not concerned with unemployment and, as was demonstrated in the 1930's, at least 50% of the people don't invest so that they will have the assets to generate income when they reach old age. Employment does nothing to help the elderly. Only investments to generate personal wealth will resolve the plight of poverty in old age.

 

The only problem is that the choices are "Dumb and Dumber" based upon our two party system. LOL

 

I agree and this is why all the crap we complain about today ain't going away soon. I listen to Dems complaining that Obama can't achieve anything because of Congress, yet those Dems will vote again for Obama full knowing that Obama is ineffective...this is stupidity on a grand scale! Will Romney be equally ineffective...maybe or maybe not?? But when voters keep these politicians in office, many times solely because they are incapable of voting for anyone outside of their heavily biased political party, they are just perpetuating all the crap we have today...

 

SS is not going away.

It is unsustainable on it's current path and it should be called what it really is, a tax to support the current users and it should be indexed to a person's wealth.

 

Neither Romney or Obama have suggested anything to fix Social Security because, like all of their predecessors, they are talking about Social Security addressing a symptom which is a lack of income in retirement as opposed to addressing the problem which is a lack of personal wealth that provides income.

We've had far better discussions on Social Security here at Political Forum than anything thats been done by Congress or the candidates.

 

If we have about 50 million receiving SS payouts...and if we wished to on average give every one of them an increase of $500 per month...and assuming we have maybe 135 million workers paying FICA...on average each of these 135 million FICA contributors would need to contribute about $185 per month...about $93 for the worker and $93 for the employer.

If our workers and employers cannot afford, or refuse, to pay an additional $93 per month in FICA, then the ONLY way to increase SS payouts is to have a fund of money earning enough interest in order to make SS a more reasonable retirement program.

So the only question then is do we have these interest-bearing accounts in SS or in a non-government system...the private sector?

 

No, it won't go away because individuals are finacially irresponsible. What does need to be done is to address the problem which is the failure on individuals to provide for their future by responsible investing that creates personal wealth. That has always been the problem and not a lack of income which merely reflects a lack of personal wealth when people reach 60 or older.

Privatization (with a safety net) addresses the problem by generating personal wealth based upon the investment advice of all the experts.

 

No, it won't go away because individuals are finacially irresponsible. What does need to be done is to address the problem which is the failure on individuals to provide for their future by responsible investing that creates personal wealth. That has always been the problem and not a lack of income which merely reflects a lack of personal wealth when people reach 60 or older.

Privatization (with a safety net) addresses the problem by generating personal wealth based upon the investment advice of all the experts.

 

I would agree with you if we had a public policy of less than one percent "natural" rate of unemployment. But, we don't.

 

Which is exactly what we have now. Privatization (eg IRAs, 401ks, Roths) with a saftety net (SS).

So how does what you propose differ?

 

How do you intend to pay for the "safetfy net"?

 

This is an excellent question although there is one erroneous statement.

Social Security is not a safety net but instead is a general welfare program regardless of whether a person requires it or not. I'll avoid going into this too much but will note that a person earning minimum wage living in virtually proverty their entire life is going to be in worse proverty when they go on Social Security. I don't see this "You think you're poor now when you're working? Just wait until you retire because you're going to be even poorer then" as being a real safety net. As I mentioned, if I were to create a safety net I'd have it pay at least twice what the minimum benefits are for Social Security today. That's open to debate but I just don't see giving someone as little as $7,000/yr as providing a safety net.

Several positive differences do exist related to Privatization and those do need to be restated.

1) Privatization makes investing mandatory. Individuals are generally irresponsible with about 50% of the working class not investing in their future with 401K's or Roth IRA's. Privatized Social Security is a mandatory investment program where the individual is 100% vested.

2) Privatization corrects the problem. The problem identified in the 1930's under FDR was a lack of personal wealth which provides income. Social Security addressed "income" which is merely a symptom of a lack of personal wealth. Privatization of Social Security forces wealth accumulation which resolves the problem. If Americans acquire personal wealth then they don't require welfare.

3) Privatization doesn't reduce living standards. For low income and even many medium income individuals they simply can't afford to support the Social Security welfare program plus also contributing to a 401K or Roth IRA. To do so would necessitate lowering their already low standard of living. Privatization uses the same money that people automatically have withheld from the paycheck as FICA taxes to invest so their standard of living is not reduced.

4) Privatization greatly reduces poverty over time. Because privatization increases personal wealth (without imposing additional costs on the individual) the assets belong to the individual and also become a part of their estate if/when they die. This not only increases the wealth of the individual but also increases the wealth of their family. This is of extreme importance especially for low income families as the wealth of the family is not increased by the Social Security welfare program. Every generation is logically better off because excess wealth is handed down from one generation to the next and, over the long term, can reduce poverty overall in America.

These are some pretty compelling reasons IMHO.