Social Security?
Answer:
The problem is in the construction of the "system". The reality is that Social security is a giant pyramid (ponzi) scheme and now just like for all other scams it's falling down. If you tried to do something similar you'd be in jail. The premise is that today's workers would pay for yesterdays and unfortunately there aren't enough workers today to pay for the baby boom generation. The system is borrowing money to survive and it's always been that way and always will be. It was an ill concieved government plan that corresponded with labor market changes. The biggest change was a complete disassociation of workers value/ contribution with pay. For example workers are paid hourly rather than based on productivity and this is an outgrowth of that. 100 years ago if you needed a wagon you went to a wagon builder and said how much to be me a wagon and he replied $30 (or so) not 5 hours at $6 per hour. So the government caved in to bad policy and out came social security.
It doesn't work because it only pays workers roughly 1/3 of their pre retirement income and it's constantly at the end of solvency causing the government to throw more good money after bad. Privatization will cause it's imminent collapse because of the removing of most of the contributions to this ponzi scheme which is fine with me because I'm not basing any calculations on this scheme. Increased taxes leads to decreased productivity and increased use of loopholes which means the burden falls as always on the backs of the middle class. Its not an easy solution because corrupt politicians are only interested in get reelected and paid and when you cut back on the elderly... you get neither.
The basic problem is that life expectancy has increased markedly. When the program began, few people lived to age 65, and a 2% total tax rate was plenty to fund it. Now people typically live into their 80's, and the present 15+% tax rate is no longer sufficient. There will perforce be a compromise: later retirement (already done), higher taxes (ditto), or lower benefits. But the real problem with social security is that it is the wrong sort of investment: over the very long term, people should be investing in equities, not debt, especially if the debt pays at Treasury interest rates. I did a mathematical analysis of how much better off I would have been had my Social Security tax payments simply been invested in the stock market -- no fancy timing, or clever choices, just buy the Dow Jones Industrial Average once a year at the closing price. I would be better off by a factor of four -- over $600,000. You can do the same analysis with Excel, the Dow Jones web site, and the Social Security web site -- and should. The Democrat's trashing of Bush's private accounts program is the biggest screwing of the US taxpayers in a generation.
The problem with social security is that while it sounds like an excellent idea, it is hard to put into practice.
From the start social security was in debt. The first people to receive social security didn't have to pay for it. Still, when i pay social security tax I'm paying for someone else's retirement, not my own, and thats because social security is and has been in debt. Social Security sounds Utopian "lets help the old folks" and whatnot but when it comes down to it, the government is just too wasteful to take care of something like this. Before social security, people had to save money for their retirement (many still do). But if they did not save enough and ran out, it was the FAMILY'S job to care for there parents, it had been that way for hundreds of years in almost all cultures. But then FDR had the idea to change that and let the government take over that, not seeing that the government getting involved leads to complication and waste, from the very beginning. Social Security should be put out of its misery. Its in debt, and it costs millions. people should plan ahead and save for retirement. people could, instead of paying it to the government, put the social security money in an account and earn interest on it, while it accumulates until they retire. and if they don't save any money, lets hope they have nice kids or they will have a lousy retirement and thats not the governments fault its the consequence of THEIR OWN INACTION. We live in a capitalist society, and social security is a small remnant of socialism in our society and it has failed as socialism always seems to do. Social security is dead weight weighing down our already fat government, and must be removed.
Well you asked for ideas...
social security nets are no guarantee that poverty can be eliminated. The problem is not always a matter of money, and siphoning more will not always produce results.
If you give a beggar 10 bucks, they certainly will not get on a bus to take care of his mother, sorry this is a lie.
in addition, taxing the rich is not very nice either. If one day, you become rich, and you know that an extra 2 percent of your hard earned wealth is going towards some alcoholics' habits, you would not be so happy.
If you want to improve an economy, you need to find opportunities for wealth creation for everyone. However, some people will always rebel and feel cheated.
Some people cannot be helped. this is a fact of government, and they try to minimize the cost to the country as a whole.
Social security is a catch phrase for all the problems in society, but the government should not be responsible for feeding those who dont want to work. Taxing the rich is an answer, but not a very good one.
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