Is Obama Making a Mistake by Offering to Cut Social Security?

[BrooklynIRT]

http://online.wsj.com/article/SB10001424127887324050304578413421108874266.html?mod=WSJ_hpp_LEFTTopStories

 

I know a lot of Democrats are really speaking out against it..

[CenSin]

A mistake for his popularity? Yes.

I'd take it further and say that social security should be done away with.

[BrooklynIRT]

alright, but is this the right thing to do as far as the proper functioning of the country is concerned? will this help or hurt most of the US citizenry in the long run? is it for the greater good?

[BrooklynIRT]

well they can do away with SS only if the citizenry becomes more farsighted and has the ability to save enough money to not need SS.

 

why do you think it should be done away with? surely you are not insinuating that 100% of the onus is on the citizenry that is currently elderly to be farsighted enough and have the ability to save money such that they do not need SS.

 

warning those who still have time before becoming elders is one thing, but would doing away with SS work for those who are currently elderly? sounds like throwing them into the fire to me.

 

I do not take offense to your statements; I just want to know the basis for them.

[Interested Rider]

It's about time that a discussion of the future of Social Security is being started. To the members of both parties that are afraid of the debate,  Remember what President John F. Kennedy said "Ask  not what your country  can do for you but what you can do for your country" as it is better to save it now that having the entire thing collapse in the near future.

 

I plead with those in Congress to stop thinking about getting re-elected and let's have some honest and forthright debate on the subject (and the other entitlements as well) and not one for the running of the cameras and the sound bites. 

[CenSin]

People who already get Social Security benefits or are close to getting them should continue getting them. After all, they likely contributed to the program when they were younger and working.

[BrooklynIRT]

alright, but if you want to eventually eliminate the program you need to draw a line somewhere. obviously us youngins (particularly working youngins who pay into the SS system) are going to have to plan for a future without SS benefits and will be expected not to use "we contributed to the program when we were younger and working" as justification for our receiving SS benefits.

 

I think I know you meant that those who have time to plan for a future without SS benefits should plan for such a future; I was just nitpicking I suppose.

 

it probably will not be easy to ask people to plan for a future w/o SS benefits b/c many will probably go on about "we are entitled to so and so" or "the GOVT is taking too much away from the citizenry" and whatnot. not that I agree with that by the way.

[Grand Concourse]

They should've done this: every 10 years the age minimum is raised by 1 year. If this started with say 1960, by now the age would've been raised 6 years. Average life span has increased as well as improved medicine to keep more ppl alive. How many people were expected to live past 70 in the 1940s? It was a flawed system, but no one wants to touch the issue because those that are now paying into the system wants their money back. This is also why there needs to be term limits. Senators should only have 2 terms and that's it. None of this life time elections with Ted Kennedy or whomever. If senators don't want to risk alienating people, then they have no business being in office, imo.

[Via Garibaldi 8]

Well they're going to have to address Social Security sooner or later because all of the baby boomers are retiring and if something isn't done soon, the system will be bankrupt eventually because you'll have too many people getting it and not enough paying in, especially with today's poor job market.  He's kept on extending unemployment benefits and then we got Obamacare coming in 2014, so something has to give.  There isn't enough money for all of this and we're in a huge hole fiscally that I don't see us coming out of anytime soon.  The jobs reports are still lagging because the economy isn't producing enough jobs to get us at a stable point to where we see the unemployment numbers decreasing and there are fears that we may slip right back into a recession as banks start to talk about layoffs.

 

Therefore, I think anyone who is thinking about collecting Social Security from my generation down should think again and have a plan in place (i.e. an IRA, a 401k and anything else that they can put money into to secure their nest egg).  Those of us that are working now are all paying into the system but there is no guarantee that the money will be there when it's time for us to retire.

[Interested Rider]

I am one of those that has placed money into an IRA for most of my career even though for a considerable portion of the time, it was not deductible. In 5 1/2 years I will have to start withdrawing money and even though I paid taxes on the money when I deposited it in the first place. It was a hedge on the social security and the pension. It was supposed to earn a rate of interest that would provide for retirement (not almost zero). instead of raising the threshold of deducting IRA contributions which would have encouraged more savings, nothing was done.

 

The politicians knew that there were problems in the Social Security and Medicare programs for as long as I can remember since the 1960's  but they never did anything about it as they consider it the "third rail" of politics. Instead of raising the age to collect Social Security, they kept it as is thus causing the problems we have today. The Drug  part of Medicare was added by George Bush the younger even though he was warned about adding it as it was cost prohibiitive. Now we have Obamacare which is the elephant in the room as it took a lot of  money from Medicare and will destroy our medical system.

 

I hope that our elected leaders would take the words of John F. Kennedy seriously but my feeling is that they will cut and run. The run is to the television cameras to say we did something when it reality, the problem will just get worse.

 

 

 

 

[CenSin]

About raising the age… see France. Their citizens were angry. Yet, look at how much shit the Eurozone is in. The money coming in must be balanced by the money going out (or should this be phrased the other way around).

http://www.telegraph.co.uk/finance/financialcrisis/9314666/French-president-Francois-Hollande-cuts-retirement-age.html

[Quill Depot]

Good, he's doing something for the good of the country, not for popularity. 

[Trainmaster5]

To all those who advocate the elimination of Social Security I'd ask you to slow down a bit and look at the historical reason it was set up in the first place. Basically it was a program for widows and orphans to collect from when the primary wage earner died. Unless you were a unionized worker in auto, mineworker, longshoremen, or a similar profession there were no pensions at all. The wage earner worked 'til he dropped and the family was left SOL. Is that what we're advocating here in the 21st century? I'm not even sure all of the the unions I mentioned earlier even had pension plans when the original act was passed, things were that bad back then. Take a look at our recent past in 2008-2009. Remember those people of retirement age or close to it ? Those people who had their retirement nest egg in 401ks and the like. Those who lost most or all of their nest egg in the great recession and had no company pension plan or a meager supplemential plan to fall back on? If not for Social Security they, too, would be SOL. I can vividly recall a transit supervisor crying because she couldn't get through on the telephone to her plan as she lost almost $62,000 of her money in one day. I bet her plan's managers didn't lose that much. In short I'd be very leery of putting all of my eggs in one basket, even if said basket was providing a non-guaranteed return of 4 or 5 %. All it takes is one market downturn to put a serious crimp in your potential financial picture. Before I finish let me just say that I'm not against SS retirement benefits or even SS disability to a certain extent. I don't recall all of the acronyms the SS dept uses but I am totally against people getting SS benefits for bogus "disabilities", especially those that have never/rarely worked. People who are getting benefits for alcoholism, drug addiction, obesity, and the like. I realize that these are diseases but I've seen people on my train who are sightless, deaf, using wheelchairs, carrying portable oxygen tanks and these people were working 9 to 5 like healthier people. IMO if these people aren't trying to collect SS benefits why should those other people be able to sit at home and collect. That's where I think the anti-SS hatred stems from. My simple solution is to continue the present Social Security program while slowly raising the age to collect early or full benefits while throwing those "sketchy recipients" off the money train completely. Furthermore as much as we advocate for a transit "lockbox" in New York state we should also be advocating for a Social Security "lockbox" for the federal government. People don't realize that a lot of the money that's supposed to be in the Social Security program has been "loaned" to the federal government for general use. The Department of Social Security isn't as broke as some opponents make it out to be. The money is just being used to prop up the rest of the federal government. I realize it's overly simplistic but my solution is " Lockbox Social Security" and throw the freeloaders out. I mean no offense to anyone. It's just my personal observations and opinion Carry on.

[BrooklynIRT]

slowly raising the age is something they should have started doing many moons ago, but as Rider said it has always been the 3rd rail of politics.

 

what do you think the maximum age for people to get SS benefits should be in the long run Trainmaster? I mean at which age do you think they would have to stop raising the age?

[Trainmaster5]

slowly raising the age is something they should have started doing many moons ago, but as Rider said it has always been the 3rd rail of politics.

 

what do you think the maximum age for people to get SS benefits should be in the long run Trainmaster? I mean at which age do you think they would have to stop raising the age?

You've asked a very important, but hard,question one that I'm  not qualified to answer. That's better left to the real actuary professionals out there. If you look at Social Security as an insurance plan like Prudential or MetLife do it becomes simpler to understand. The basic idea is a legal Ponzi scheme. Raise the current full retirement age from say 66 years old in steps until you reach 69 or 70 until one would qualify for full benefits. People are working longer and living longer these days so # 1-you have more people contributing for a longer period of their working lives meaning the total amount of money Social Security gets from the public should grow over time. Number 2 is the hard part because people are living longer it means that Social Security pays an individual  money over a longer  period of time. The trick is for the actuarial people to find a balance between the two points to set a fair and proper age for benefits to be paid out. The dirty little secret most people don't realize is that when the program was set up most working class people, especially minorities, and those who worked the most physically taxing jobs never lived to collect Social Security themselves. Their spouses did. Just look back at the age to receive full benefits. It was 65 and went to 66 years old. The average life expectancy for a white female was the only one close to 65. I'm speaking of my generation, Baby Boomers. The life expectancy for white males, black females, and black males, was even lower.In short many of us would never collect a dime. Those that did collect anything it was usually for less than 5 years. That's the reason the early (62 yr old) option was created. Even today many overlook what happens if a married ,working Baby Boomer couple both die before reaching retirement age. All of the money they contributed over their working careers is kept by Social Security and never paid out to those that contributed or their families, except $255 for burial expenses. That money stays with Social Security just like it does with Prudential or MetLife. The difference is that Congress (and Presidents) of both parties have passed legislation increasing the pool of people eligible for some type of benefits which were not a part of the original plan. People like those I mentioned in my last post. If those people start collecting benefits at a young age, rather than the 65 or 66 year olds, they throw a monkey wrench into the conversation. These people may collect benefits for 50 years or more without ever contributing a dime to Social Security. In other words John or Jane Doe may collect more money over a longer period of time than Mr and Mrs American Worker will ever collect. That is patently unfair, IMO. The problem President Obama faces is trying to find a balance between what's fair and what's necessary. When I saw Democrats and Republicans (for different reasons) come out against him I knew he stepped on the "third rail" of politics. I happen to agree with him that something must be done with Social Security and Medicare/ health care. We need an honest , non-partisan, discussion of these issues and stop kicking them down the road for the next generation to handle. That's the problem with American politics today. While the Congress and the Presidents pointed fingers across the aisle in the past they all voted to extend newer benefits under Social Security without considering how to pay for them. President Obama is right this time. It's time to stop the bull and come clean with the public about what needs to be done to Social Security. Call in the  real actuarial people and let them figure out the proper age limits and ignore the lobbyists on both sides. I approve this message. Carry on.

[Interested Rider]

You do not have to be a Democrat or a Republican to agree with the President on this issue.

 

There is a considerable amount of waste in the Social Security and Medicare programs and it has to be rooted out especially when it comes to the disability programs. When I see persons that are "on disability"  and they are far younger than me then I ask the question is this the new form of welfare? Yes drug addicts (just one example) and others in similar situations are "entitled to it" and if their eligibility is challenged for the reason that they spent their time doing drugs and not working then the howls from the do-gooders and their ilk will be heard from near and far. Is it wrong yes and should the standards be changed similiar to the move made by former Mayor Rudolph Giuliantsi for the welfare receipient, yes! and will it help Social Security in the long run, absolutely!

 

Many Republicans have been focusing on the issue of waste, not only in Medicare and Social Security but in other areas as well. For any program to become more efficent, it needs persons that have a backbone to make decisions regardless of the political ramifications and consequences. The program should get get back to basics and that is provide for those who really need it. If the legislation is passed and it looks like it will be signed, watch the numbers on disability start to drop like a rock as it did in New York City when reform was implemented.

 

A comment about those who placed their 401K plans in the stock market or their deferred compensation plans in the same or similar types of financial instruments. I do not cry for them had an option to place the money is something more secure but will earn far less interest , namely the bank. There were plenty of times where the person earned far more on their 401k then anyone that placed it in the bank.  The stock market is a crap-shoot as it can both ways so they should stop complaining.