tag:blogger.com,1999:blog-3294580951502585066.post3115448264833089217..comments2023-10-18T19:32:44.252-07:00Comments on It's just my opinion, I could be wrong: How to fix social securityNickhttp://www.blogger.com/profile/05587036619182019599noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3294580951502585066.post-55193705983947739962009-03-24T13:55:00.000-07:002009-03-24T13:55:00.000-07:00Yes, there's a large ideological gap between the t...Yes, there's a large ideological gap between the two general philosophies: people who want to keep social security a Ponzi scheme and keep adjusting the numbers until it becomes painfully obvious that it's doomed to failure, and people who want to privatize the system, restoring it to its original stated function and intent (as a retirement and financial security blanket program, not a wealth redistribution program), but forcing the government to acknowledge all the pending losses up-front while dismantling the Ponzi scheme aspect of the system. I thought my idea was interesting because it balances between both of those to some extent: the government would still be able to pay current benefits from the money currently being paid in (which the government would be borrowing from the private accounts), while converting to a more fair and sustainable private accounts model. I don't think the government would "catch up" immediately, or possibly ever, but at least the real future deficit could then be accurately and transparently accounted for, instead of inviting manipulation, accounting tricks, and arguments about the extent of the problem.<BR/><BR/>See, a large part of the current problem is that many people don't understand the future obligation, or why it's not sustainable. It's a property, to some extent, common in all good accounting fraud schemes: people don't understand the numbers, so they can believe people who distort or misrepresent them. For example, some people in and out of government continue to argue that we can just adjust the numbers in slight, non-drastic ways to keep the system solvent in the future: a concept which is fundamentally false given current projections of population growth, and the inherent problems with Ponzi schemes. This is the kind of misunderstanding which my plan would hopefully eliminate: by clearly accounting for all the future obligations through explicit borrowing, there would be much less doubt about if and when politicians needed to act on the problem.<BR/><BR/>As for the issue of wealth redistribution, it's true that my mechanism would reduce some of the inherent socialistic monetary balancing which occurs in the current system, which I view as a good thing. Moreover, it would remove entirely the temptation for politicians to expand social security taxation well beyond what would be conceptually necessary for its stated purpose, and use it as a full-fledged socialist wealth redistribution tax mechanism, which I would view as a vitally important check on the current government direction and tendencies. This is not to say that we should not have a socialist government, or socialist wealth redistribution systems (I don't personally think we should, but that's a different debate); however, it's fundamentally disturbing and dangerous when the government expands a social security safety net and retirement program, which is ideologically sound, into a socialist wealth redistribution program, which is a whole different beast. We should have that debate openly, not have the program thrust upon the country through the back door under the guise of tweaking numbers.Nickhttps://www.blogger.com/profile/05587036619182019599noreply@blogger.comtag:blogger.com,1999:blog-3294580951502585066.post-43717598211619309572009-03-24T11:49:00.000-07:002009-03-24T11:49:00.000-07:00There are two issues here: a) The system depends o...There are two issues here: <BR/>a) The system depends on current payroll taxes to pay current benefits, rather than saving current payroll taxes and paying them in the future.<BR/>b) The system is government run, which some people are ideologically against.<BR/>If you want to change the system to one that saves money, it is the hard b/c future benefits are like a huge debt owed to people who paid into the system. I agree with your goal of switching to a savings-based system, but no matter how you slice it we have sacrifice to pay down that “virtual debt”. In your system, you turn the virtual debt into actual bonds, which will have to be paid back with taxes on the workers. Either way, <B>you have to “get caught up” by having current workers keep paying taxes while saving additional money for retirement / disability / life insurance that Social Security would have covered.</B> That’s the rub.<BR/><BR/>Getting caught up is work. Tweaking the current system is easy. Some people (not me) actually prefer a gov’t-run system, so they have no incentive to “get caught up”. There are people like me who don’t like a huge gov’t system but like the fact that it drastically reduces poverty by forcing people to save and by giving wealthier people’s money to the poor. We are therefore going to go the easy route and simply adjust the payroll tax rate, retirement age, and benefits, on a regular basis such that the system stays solvent. The system’s critics continue to paint this condition as a crisis and a crisis caused by the fact that it’s government-run. These claims are false, so the critics look foolish.CJhttps://www.blogger.com/profile/05824987036580158137noreply@blogger.com