Obamacons (REAL Libertarians vote Obama!)

I think you need to look at how Social Security RETIREMENT works Craig. You pay 6.2% and you're employee has to match that same 6.2% IN YOUR NAME. If you work a job, say with the railroad, military or a fire department and that 12.4% is not contributed IN YOUR NAME, you're not elegible for social security retirement.

Now if you want to talk about disability income, DHHR (welfare) benefits or survivor benefits that's a different matter entirely. With those benefits, no, you don't have to work or pay into SS to receive funds from hard working Americans. Of course, those programs are why we pay 12.4% of our income in taxes instead of the 2% originally scheduled of the 3% Truman PROMISED would never increase and more then anything are responsible for 2 income families.

But that's another thread all together.

From your link Craig.

You pay Medicare taxes on all of your wages or net earnings from self-employment. These taxes are used for Medicare coverage.

If you work for someone else Social Security tax Medicare tax
You pay 6.2% 1.45%
Your employer pays 6.2% 1.45%
If you are self-employed
You pay 12.4% 2.9%


Where your Social Security tax dollars go
When you work, 85 cents of every Social Security tax dollar you pay goes to a trust fund that pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. The other 15 cents goes to a trust fund that pays benefits to people with disabilities and their families.

From these trust funds, Social Security also pays the costs of managing the Social Security programs. The Social Security Administration is one of the most efficient agencies in the federal government, and we are working to make it better every day. Of each Social Security tax dollar you pay, we spend less than one penny to manage the program.

The entire amount of taxes you pay for Medicare goes to a trust fund that pays for some of the costs of hospital and related care of all Medicare beneficiaries. Medicare is managed by the Centers for Medicare & Medicaid Services, not Social Security.

Understand now?

You said, "I pay 12.4% of my salary every 2 weeks to FICA, which is the tax used
to fund Social Security retirement. (Another 2.9% is taken out and paid
to fund Medicare)"

You don't pay that, and that is not the amount "taken out". The employer contributes an equal amount to you...6.2, and 1.45 respectively.


Unless you're self-employed, and the link shows that you pay more than the 12.4.


You still have not answered the redistribution part.

Your text says, "When you work, 85 cents of every Social Security tax dollar you pay goes to a trust fund that pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died"

Your money - current retirees. Get it?

Whether I pay it or my employer pays it, it is money paid on my behalf and reduces my income by 6.2%, I pay it. Frankly, I could do a better job of investing it then the government does.

My money, the entire 12.4% goes to a trust fund.

Understand?

SFCraig wrote:Sam, although your points are valid, it's not at the core of the discussion. Whether or not the pols have looted the trust fund, etc, does not impact that the principle that SS is and was from inception income redistribution. Right?

Craig, from inception, I'm going to say no, unless there is/are historical documents that say so, ....... and my reason is thus.

If SS had initially been set up as a "redistribution plan", ...... they would have never established an SS Trust Fund. The name itself implies their SS contributions "are being held in trust for the retirees".

Now the SSA knew there would be people retiring shortly after SS was implemented, but there were millions of people paying into the Fund and that money could be invested and the earned income would be substantial enough to pay expenses and to pay those early retirees their SS checks and the principle (all FICA monies paid in) would remain intact.

Besides, the retirement age of 65 was intentionally set at that to insure a "savings" for the SSA because at the time, the average "life expectency" was less than that, to wit:

1950 68.2 years
1940 62.9
1935 61.7
1930 59.7

And anyone paying into SS who died before the age of 65, and no dependents, was SOL except for $2 burial expense from SSA ...... and all their FICA paid in was then said "savings" because the SSA doesn't have to pay a dead person .... OR THEIR ESTATE anything.

Now SSD (Social Security Disability) is paid by the SSA to anyone who became/becomes disabled and unable to work and their SSD payment is calculated same as for the SS Retirement payments (checks).

And SSI (Supplemental Security Income) is also paid by the SSA to people who have low income and few resources and are: Age 65 or older; Blind; or Disabled. http://www.ssa.gov/pubs/11000.html

And some people receiving SS Retirement can also receive SSI ..... but not all people who get SSI ..... get an SS check.

And yes, there are hundreds of people receiving SS and SSD checks that have never paid a penny into the SSA via FICA ..... and they are not dependents of anyone who did.

.

One thing I recall learning is that those stats lie a bit. Although they do reflect overall life expectancy; then, as today, if one makes it out of childhood, or past 50, or past 65, their likelihood of living longer goes up.

Make sense?

In any case, see here:

http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

"The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system"

Which is why I mentioned pay-go earlier. Pay now, go now. The surplus is diverted into the trust funds.

Aaron, there is no personal fund for you. The employer would not pay you 6.2% more without SS.

What would your wise investments be today? What have you invested in for your retirement? Is it making a lot of ROI right now?

Give us your stock tips.

Well I dont know why the obsession with the term "income redistribution" anyway.

Of course it is an income re-distribution.

And the only reason it is not an even bigger re-distribution is because poor people dont live to collect as long as rich people.

'The employer would not pay you 6.2% more without SS.'--SFCraig

How can you be so sure?

SFCraig wrote:Aaron, there is no personal fund for you. The employer would not pay you 6.2% more without SS.

I disagree.

SFCraig wrote:What would your wise investments be today? What have you invested in for your retirement? Is it making a lot of ROI right now?

Give us your stock tips.

Energy.

I have been invested there for years. And I've recently maxed out my 401 (k) contributions and will be investing every penny I can and 5 years from now when the stock market is hovering around 16,000, I'll have a nice little gain.

But whether it makes money or not is not the piont. The point is, I couldn't do worse then the government, which has economist and politicians telling us we need to fix Social Security.

Social Security was never broke.

What was broke was politicians saw all that money and couldn't leave it alone. The initial contribution to the trust fund was 2%. HST promised us when it was raised to 3% that it wouldn't go higher. 12.4% of my wages is now contributed to the social security trust fund. How high will it go?

What do you disagree with? That the employer would decide to give you the money saved? Or that there is no personal fund for you?

I'm vested in Social Securty as I've worked 40 quarters. Yes, there is a fund for me. All that is to be determined is how much I am elegible to receive and that will be based on my final contribution and my retirement age. Of course, I'm not only dependent on SS for my retirement and I don't plan on having to work until I'm 67 to withdraw it.

So unless SS goes bankrupt, there is a fund with my name on it. I get a statement twice a year.

We're just going to keep this going, eh?

The statement you get is your eligibility, not your fund. It is more like insurance than a bank account.

If you are not married and have no children, who do you bequeath your fund to?

(And if you're maxing out on your 401k you probably know that you only pay on the first 90k or so anyway. Your SS taxes are the least of your worries).

Also, as it is primarily a pay-go program, the crisis that everyone cries about is that there may no longer be a surplus and may even run a deficit. Not really "bankruptcy" or insolvency. That is why, by all accounts SS is wildly successful and has practically eliminated Senior poverty. It actually made extra dough.

Lastly, read here: From the conservative Cato institute

http://www.socialsecurity.org/reformandyou/faqs.html

"Under the current Social Security pay-as-you-go system all of the money going into Social Security is being spent on retirees' benefits and other government programs."

It wouldn't run a deficit if they would eliminate all the BS programs like DHHR and disability and took it back to what FDR passed in 35.

SFCraig wrote:One thing I recall learning is that those stats lie a bit. Although they do reflect overall life expectancy; then, as today, if one makes it out of childhood, or past 50, or past 65, their likelihood of living longer goes up.

No, Craig, those stats do not lie. They are an average age of death based on the total US population.

The SS Act was signed into Law in 1935 with the Retirement age of 65.

Now the Life Expectancy Age has increased and the SSA increased the RETIREMENT AGE.

You tell me why the SSA did that Craigy.

Make sense? NO, ..... not what you posted.

In any case, see here:

Better yet Craig, ..... you see here below, ..... ESPECIALLY the "big red" below.

Provisions of the Act
The Act is formally cited as the Social Security Act, ch. 531, 49 Stat. 620, now codified as 42 U.S.C. ch.7. The Act is also known as the Old Age Pension Act. The Act provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payments to current retirees were (and continue to be) financed by a payroll tax on current workers' wages, half directly as a payroll tax and half paid by the employer. The act also allocated money to states to provide assistance to aged individuals (Title I), for unemployment insurance (Titles III), Aid to Families with Dependent Children (Title IV), Maternal and Child Welfare (Title V), public health services (Title VI), and the blind (Title X).[9]

Most women and minorities were excluded from the benefits of unemployment insurance and old age pensions. Employment definitions reflected typical white male categories and patterns.[10] Job categories that were not covered by the act included workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers.[11] The act also denied coverage to individuals who worked intermittently.[12] These jobs were dominated by women and minorities. For example, women made up 90% of domestic labor in 1940 and two-thirds of all employed black women were in domestic service.[13] Exclusions exempted nearly half the working population.[14] Nearly two-thirds of all African Americans in the labor force, 70 to 80% in some areas in the South, and just over half of all women employed were not covered by Social Security.[15][16] At the time, the NAACP protested the Social Security Act, describing it as “a sieve with holes just big enough for the majority of Negroes to fall through.”[17]

1939 Amendments
Economic concerns
One reason for the proposed changes in 1939 was a growing concern over the impact that the reserves created by the 1935 act were having on the economy. The Recession of 1937 was blamed on the government, tied to the abrupt decrease in government spending and the $2 billion that had been collected in Social Security taxes.[30] Benefits became available in 1940 instead of 1942 and changes to the benefit formula increased the amount of benefits available to all recipients in the early years of Social Security.[31] These two policies combined to shrink the size of the reserves. The original Act had conceived of the program as paying benefits out of a large reserve. This Act shifted the conception of Social Security into the pay-as-you-go system.[32]

Creation of the Social Security Trust Fund
The amendments established a trust fund for any surplus funds. The managing trustee of this fund is the Secretary of the Treasury. The money could be invested in both non-marketable and marketable securities.[33]

http://en.wikipedia.org/wiki/Social_Security_(United_States)

And Craigy, there ain't no money in the Trust Fund, ....... because the Secretaries of the Treasury have been investing all of it in "non-marketable securities" called
Federal Government IOUs.




And the Federal Government is not even paying the INTERE$T on those IOUs, ...... they are just writing INTERE$T IOUs and sticking them in the "LockBox" in Parkersburgh, WV, with all the other IOUs.



.

Aaron, read that statement you get from SSA. It says "Summary of your benefits", not "balance statement".

I believe, as most do, that the program would run a deficit in the future anyway because more is going to be paid out than will be coming in. During all those years that the program has run a surplus the money is set aside in the fund to pay for such events. We all know it's true that the Government has deposited the IOUs and spent much of the surplus on various projects they've deemed necessary.

Sammy, you're a logical guy so surely you see where you're wrong. Many people never make it to retirement age, but those who do tend to outlive the average life expectancy. They draw benefits into their 80s and above.

Those who make it to 65 are much more likely to make it to 85. Those who have genetic predisposition or lifestyle choices that put them at risk (smoking, diet) will most likely not receive benefits, yet they factor into the life expectancy average.