Obama re-elected to grow our national pie, not just re-divide it

[an]

[quote=bearishgurl]What would members of Gen X/Y think if they contribute all their lives to SS and then find out at the 11th hr (age 65) that their benefits will be drastically reduced or eliminated?

Boomers, in general, worked hard all their lives in much lesser circumstances than younger workers of today and many are still working. They *deserve* to retire.[/quote]I’m part of the Gen X/Y you’re referring to and I’m expecting my benefits will be drastically reduced or eliminated. That’s why I’m not counting on them in my planning. FYI, those WWII and Greatest generation paid into the system all their lives as well and they die a lot earlier, which mean they take out less. So your entire argument sounds like the boomer will be a biggest drainer yet due to their longevity and the medical advancements.

[livinincali]

[quote=SK in CV]
How far can you go taxing the rich? That’s a good question. Certainly much farther than we’ve gone so far. We’ve done it in the past during boom times and they didn’t stop working, they didn’t get poorer as a whole. The rich have had extraordinarily low taxes over the last 10 years, when compared to prior decades.
[/quote]

There’s a theoretical Laffer curve which says there’s some optimal tax rate in which the most tax dollars are collected. There’s probably also a curve for the most optimal tax rate for economic growth. History says the best economic time have been associated with an effective tax rate of around 18-20%. I could see revenue increases to 2.8, maybe a little higher but you still have a ton to cut. Of course with medicare and social security growing faster than GDP it just gets worse. In essence you need to slow the growth of SS and medicare to something less than GDP. Maybe the easiest solution is to just have people wanting to join those programs wait in a queue. You could arrange that queue based on need, but you stop the uncontrollable growth.

Based on the actions taken by many high wealth individuals towards the end of 2012 I’d be willing to bet right now that 2012 tax revenue is higher than 2013 tax revenue.

[livinincali]

[quote=AN][quote=bearishgurl]What would members of Gen X/Y think if they contribute all their lives to SS and then find out at the 11th hr (age 65) that their benefits will be drastically reduced or eliminated?

Boomers, in general, worked hard all their lives in much lesser circumstances than younger workers of today and many are still working. They *deserve* to retire.[/quote]I’m part of the Gen X/Y you’re referring to and I’m expecting my benefits will be drastically reduced or eliminated. That’s why I’m not counting on them in my planning. FYI, those WWII and Greatest generation paid into the system all their lives as well and they die a lot earlier, which mean they take out less. So your entire argument sounds like the boomer will be a biggest drainer yet due to their longevity and the medical advancements.[/quote]

I’m pretty much expecting the same thing. Social Security has always been a pay as you go system, and frankly Social Security is fairly fixable. Tweak the retirement age, index the payment increases to actual revenue coming in, maybe some means testing for high income, and you can probably keep the system. You might lose ground to inflation but there won’t be a sudden shock that is built into the current system when the IOUs run out in about 20 years.

It’s medicare and medicaid that aren’t fixable. Pretty much everybody is going to cost $250K+ in medical care before they die and most put in a tiny fraction of that amount in payments.

[SK in CV]

[quote=livinincali][quote=SK in CV]
How far can you go taxing the rich? That’s a good question. Certainly much farther than we’ve gone so far. We’ve done it in the past during boom times and they didn’t stop working, they didn’t get poorer as a whole. The rich have had extraordinarily low taxes over the last 10 years, when compared to prior decades.
[/quote]

There’s a theoretical Laffer curve which says there’s some optimal tax rate in which the most tax dollars. There’s probably also a curve for the most optimal tax rate for economic growth. History says the best economic time have been associated with an effective tax rate of around 18-20%. I could see revenue increases to 2.8, maybe a little higher but you still have a ton to cut. Of course with medicare and social security growing faster than GDP it just gets worse. In essence you need to slow the growth of SS and medicare to something less than GDP. Maybe the easiest solution is to just have people wanting to join those programs wait in a queue. You could arrange that queue based on need, but you stop the uncontrollable growth.

Based on the actions taken by many high wealth individuals towards the end of 2012 I’d be willing to bet right now that 2012 tax revenue is higher than 2013 tax revenue.[/quote]

I think your numbers are wrong wrt to the best economic times being when the effective tax rate was 18-20%. It’s been in that range during the last 10 years. During most of the 90’s, it was over 22%, and never dropped below 20% for more than the last 2 decades of the last century. I can’t quickly find numbers older than that, but I’ve seen some pretty well laid out arguments that the greatest economic growth has come when top tax rates were substantially higher than they are today.

Laffer was probably right that there is a optimal point on the curve, all else remaining equal. He was just way way low on where it is. He wasn’t even close.

[bearishgurl]

[quote=AN][quote=bearishgurl]What would members of Gen X/Y think if they contribute all their lives to SS and then find out at the 11th hr (age 65) that their benefits will be drastically reduced or eliminated?

Boomers, in general, worked hard all their lives in much lesser circumstances than younger workers of today and many are still working. They *deserve* to retire.[/quote]I’m part of the Gen X/Y you’re referring to and I’m expecting my benefits will be drastically reduced or eliminated. That’s why I’m not counting on them in my planning. FYI, those WWII and Greatest generation paid into the system all their lives as well and they die a lot earlier, which mean they take out less. So your entire argument sounds like the boomer will be a biggest drainer yet due to their longevity and the medical advancements.[/quote]

AN, what those older gens paid into the “system” was minuscule compared to what boomers paid into the system. And the vast majority of women in those gens did not qualify for SS in their own right. All along, these previous gens have been getting SS COLA’s almost every year the last 40 years. Due to their ultralow payroll deductions during their working years, I figure it took them =<5 years of "retirement" at age 62 or 65 to use up their contributions ... yes, even collecting a ~$500 mo benefit. And I would estimate that 45% of them made no SS contributions at all in their lifetimes!

In recent decades, these older gens haven't "died a lot earlier." They lived and live with incapacity, both physical and mental, which costs everyone.

I just don't see boomers living with the length and degree of incapacity that their forebears did and are, due to all the reasons I noted above and more, including education about causes of bone loss, Alzheimers, effects of smoking, etc.

For instance, the older gens were ignorant of the consequences of smoking when they started at a young age and continued to smoke throughout their working lives. Now we are all paying for their oxygen and medical bills due to chronic COPD/emphysema (which is a very slow, agonizing death).

[an]

BG, what you say about gen before you will be what us Gen X/Y will say about your generation. I can say with a certainty your generation will live longer than the gen before you. You’ll have access to stuff like, new cancer treatments, new AIDS treatments, new body party replacements using your own stem cell, etc. So, yes, on average, Boomers WILL live longer than their parents. So, you will use more than you put in to SS.

[bearishgurl]

[quote=AN]BG, what you say about gen before you will be what us Gen X/Y will say about your generation. I can say with a certainty your generation will live longer than the gen before you. You’ll have access to stuff like, new cancer treatments, new AIDS treatments, new body party replacements using your own stem cell, etc. So, yes, on average, Boomers WILL live longer than their parents. So, you will use more than you put in to SS.[/quote]

I agree that we will live longer than WWII and Greatest Gen (not too many of these folks left). All I’m saying is that we put a LOT more into “the system” than our forebears did and are the first generation who very well may not see our “investment” come back to us in full. This is due to overpaying recipients who shouldn’t have qualified to get as high a benefit as they did and allowing some recipients to base their benefits on another’s work record when they didn’t contribute to “the system” themselves. I don’t care what anybody says. At all times after WWII, it was a personal choice of an individual (usually female) to stay out of the workforce for life. There are other ways to take care of someone until death who never worked and was never able to save anything for retirement. In other countries, the financial duty to care for indigent senior citizens falls on their family … as it should be. That same family benefited from the care and attention that (now indigent) non-working parent was able to give them when they were growing up.

Believe it or not, I am against “means testing” for OASDI benefits. A high-paid worker and/or worker with a long career deserves his/her SS based upon their contributions.

Since OASDI is funded by FICA employer and employee contributions, it should be used solely to help fund the retirements of those workers who contributed to it and no one else.

[an]

[quote=bearishgurl][quote=AN]BG, what you say about gen before you will be what us Gen X/Y will say about your generation. I can say with a certainty your generation will live longer than the gen before you. You’ll have access to stuff like, new cancer treatments, new AIDS treatments, new body party replacements using your own stem cell, etc. So, yes, on average, Boomers WILL live longer than their parents. So, you will use more than you put in to SS.[/quote]

I agree that we will live longer than WWII and Greatest Gen (not too many of these folks left). All I’m saying is that we put a LOT more into “the system” than our forebears did and are the first generation who very well may not see our “investment” come back to us in full. This is due to overpaying recipients who shouldn’t have qualified to get as high a benefit as they did and allowing some recipients to base their benefits on another’s work record when they didn’t contribute to “the system” themselves. I don’t care what anybody says. At all times after WWII, it was a personal choice of an individual (usually female) to stay out of the workforce for life. There are other ways to take care of someone until death who never worked and was never able to save anything for retirement. In other countries, the financial duty to care for indigent senior citizens falls on their family … as it should be. That same family benefited from the care and attention that (now indigent) non-working parent was able to give them when they were growing up.

Believe it or not, I am against “means testing” for OASDI benefits. A high-paid worker and/or worker with a long career deserves his/her SS based upon their contributions.

Since OASDI is funded by FICA employer and employee contributions, it should be used solely to help fund the retirements of those workers who contributed to it and no one else.[/quote]Unless you agree to stop SS payment upon complete drainage of the $ you put in, then it makes no difference if you put in $5 and get $10 in SS or $5k and get $5005 from SS. This is why I mentioned that your generation will most likely out live your parents’ generation. Which means your generation will most likely extract more from SS than your parents’ generation. Even if you put in more. There are a lot more exotic procedures today to keep you alive and I’m assuming that there will be even more in the future. So, how much you put in doesn’t matter as much as how much you take out from the system.

[SK in CV]

[quote=AN]BG, what you say about gen before you will be what us Gen X/Y will say about your generation. I can say with a certainty your generation will live longer than the gen before you. You’ll have access to stuff like, new cancer treatments, new AIDS treatments, new body party replacements using your own stem cell, etc. So, yes, on average, Boomers WILL live longer than their parents. So, you will use more than you put in to SS.[/quote]

You’re probably right, but the difference isn’t all that great. Overall life expectancy has almost no bearing on calculation. What’s important is life expectancy AFTER benefits begin. Seventyish years ago, when SS benefits began being paid, infant mortality was much higher. Over 400,000 future SS recipients died in WWII. If I remember my stats right, people who lived until they were 65 had life expectancies about 5-6 years less than they do today. With normal retirement age already increasing to 67 over the next couple decades, most of that increase has already been factored into the calculation. That life expectance has not significantly increased over the last few decades. Whether it will in the future remains to be seen.

[bearishgurl]

[quote=AN][quote=bearishgurl][quote=AN]BG, what you say about gen before you will be what us Gen X/Y will say about your generation. I can say with a certainty your generation will live longer than the gen before you. You’ll have access to stuff like, new cancer treatments, new AIDS treatments, new body party replacements using your own stem cell, etc. So, yes, on average, Boomers WILL live longer than their parents. So, you will use more than you put in to SS.[/quote]

I agree that we will live longer than WWII and Greatest Gen (not too many of these folks left). All I’m saying is that we put a LOT more into “the system” than our forebears did and are the first generation who very well may not see our “investment” come back to us in full. This is due to overpaying recipients who shouldn’t have qualified to get as high a benefit as they did and allowing some recipients to base their benefits on another’s work record when they didn’t contribute to “the system” themselves. I don’t care what anybody says. At all times after WWII, it was a personal choice of an individual (usually female) to stay out of the workforce for life. There are other ways to take care of someone until death who never worked and was never able to save anything for retirement. In other countries, the financial duty to care for indigent senior citizens falls on their family … as it should be. That same family benefited from the care and attention that (now indigent) non-working parent was able to give them when they were growing up.

Believe it or not, I am against “means testing” for OASDI benefits. A high-paid worker and/or worker with a long career deserves his/her SS based upon their contributions.

Since OASDI is funded by FICA employer and employee contributions, it should be used solely to help fund the retirements of those workers who contributed to it and no one else.[/quote]Unless you agree to stop SS payment upon complete drainage of the $ you put in, then it makes no difference if you put in $5 and get $10 in SS or $5k and get $5005 from SS. This is why I mentioned that your generation will most likely out live your parents’ generation. Which means your generation will most likely extract more from SS than your parents’ generation. Even if you put in more. There are a lot more exotic procedures today to keep you alive and I’m assuming that there will be even more in the future. So, how much you put in doesn’t matter as much as how much you take out from the system.[/quote]

AN, that’s easy for you to say because you have only been working a few years. I’d like to hear how you feel about the matter 30 years from now … after reviewing your annual SS report :=0

We didn’t put in “a little more” than our parents did. Collectively, boomers probably put in 8-12 times as much as both Greatest Gen and WWII Gen combined! Remember that payroll FICA deductions (not sure they were called that back then) didn’t start until 1935 or 1936.

http://en.wikipedia.org/wiki/Federal_Old_Age_%26_Survivors_Insurance

The amount one “extracts” from the system is directly proportionate to how much they (or their “sponsor”) put into it. The problem is that it has minimum payments ($380 mo? regardless of contribution) and most of its current beneficiaries are overpaid every month in proportion to their contributions.

I am MORE than okay with taking my and my employers’ contribution as a lump sum when I am eligible for it, in lieu of a monthly “annuity.” I don’t even care whether they pay me any interest for all those years.

Actually, I think we should have the option of taking a lump sum of our contributions at 62. I’ve seen too many people die after working their entire lives without collecting a dime (exc spouse $250 benefit).

I can manage whatever amt it is from there. At least I will have collected it.

[an]

[quote=SK in CV]That life expectance has not significantly increased over the last few decades. Whether it will in the future remains to be seen.[/quote]
What would you consider significant? Over the last 2 decades, life expectancy went up 4% (3 years) and over the last 5 decades, life expectancy went up 12%. So, boomers in their 50s, if we see another 12% over the next 5 decades, their life expectancy would be 9 years longer. I don’t think we’re delaying SS full retirement age by 9 years.

[SK in CV]

[quote=bearishgurl]
Actually, I think we should have the option of taking a lump sum of our contributions at 62. I’ve seen too many people die after working their entire lives without collecting a dime (exc spouse $250 benefit).

[/quote]

I have problems with that option, but almost that exact thing happened to my dad. He paid in maximum every single year from when FICA began (save for 2 years in the service during WWII) until he was 70. At that time, if you were still working and earning a living, you couldn’t collect until 70. He got exactly one check. And died.

[an]

[quote=bearishgurl]AN, that’s easy for you to say because you have only been working a few years. I’d like to hear how you feel about the matter 30 years from now … after reviewing your annual SS report :=0

We didn’t put in “a little more” than our parents did. Collectively, boomers probably put in 8-12 times as much as both Greatest Gen and WWII Gen combined! Remember that payroll FICA deductions (not sure they were called that back then) didn’t start until 1935 or 1936.

http://en.wikipedia.org/wiki/Federal_Old_Age_%26_Survivors_Insurance

The amount one “extracts” from the system is directly proportionate to how much they (or their “sponsor”) put into it. The problem is that it has minimum payments ($380 mo? regardless of contribution) and most of its current beneficiaries are overpaid every month in proportion to their contributions.

I am MORE than okay with taking my and my employers’ contribution as a lump sum when I am eligible for it, in lieu of a monthly “annuity.” I don’t even care whether they pay me any interest for all those years.

Actually, I think we should have the option of taking a lump sum of our contributions at 62. I’ve seen too many people die after working their entire lives without collecting a dime (exc spouse $250 benefit).

I can manage whatever amt it is from there. At least I will have collected it.[/quote]
Like I said, I have no expectation of getting any money I put into SS, so yes, it’s easy for me to say. I expect the boomers to drain the system and leave my generation with an empty coffer.

Do you have data to back up the 8-12x as you claimed? But again, that’s irrelevant. What’s the NET difference between boomers vs your parents generation, assuming average life expectancy will be 8-9 years longer yet retirement age won’t change nearly as much. I’m also pretty sure my generation will pay much more than your generation into the coffer as well. But I’m not optimistic in being able to get those money back through SS. If we do, that’ll be a pleasant surprise.

[SK in CV]

[quote=AN][quote=SK in CV]That life expectance has not significantly increased over the last few decades. Whether it will in the future remains to be seen.[/quote]
What would you consider significant? Over the last 2 decades, life expectancy went up 4% (3 years) and over the last 5 decades, life expectancy went up 12%. So, boomers in their 50s, if we see another 12% over the next 5 decades, their life expectancy would be 9 years longer. I don’t think we’re delaying SS full retirement age by 9 years.[/quote]

You totally missed my point. Total life expectancy is immaterial. Life expectancy at retirement age is what’s important. I think that number is 7 years higher now than it was when SS started.

[an]

[quote=SK in CV]You totally missed my point. Total life expectancy is immaterial. Life expectancy at retirement age is what’s important. I think that number is 7 years higher now than it was when SS started.[/quote]Data?
Here’s the full retirement age for SS: http://www.socialsecurity.gov/retire2/agereduction.htm. Are you saying your generation total life expectancy is only a few months to <2 years higher than your parents', since according to SS's full retirement age, that's how much older you'd have to be to reach full retirement age. Yet, over the last 50 years, life expectance have gone up 9 years. But that's really besides the point. What I'm trying to tell BG is, stop complaining about her parents' generation being a drain on SS, but fail to see her generation is doing the same thing.

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