Social Security (Ecolanguage)
Privatizers don’t like this! Best overview of the U.S. Social Security debate. Vote it up!
The economy actually has a good outlook for Social Security: In fact it has been doing better than the long-term projections by Social Security of its own fiscal health.
And the warning about the short-term Trust Fund deficit is a decoy to distract you from Social Security: It was the Bush income tax cuts that swallowed the payroll tax surpluses. (And then some!)
Tell the politicians to put taxes back the way they were, fix the healthcare system instead, and leave Social Security alone.
In another animation we will show that Social Security is the most-highly-evolved program to cover all the variables that it does so well.
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Tags: Animation, Income Tax Cuts, Payroll Tax
May 22nd, 2009 at 6:40 am
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In economics TERMINOLOGY: markets are better than government because they promote ALLOCATIVE EFFICIENCY and FREEDOM.
But there is a list of (1) regular MARKET FAILURES for which government policy is needed.
In addition, markets can lead to (2) unfair results in the DISTRIBUTION OF INCOMES AND WEALTH.
Social Security is a safety net hitting both problems.
Also, all INSTITUTIONS (business firms and governments) reduce TRANSACTION COSTS of the participants, creating growth by efficiency.
May 22nd, 2009 at 9:46 pm
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Social Security, financial investments, insurance policies, and Ponzi schemes are all forms of transfer, if that’s what you mean. Otherwise they are very different.
May 25th, 2009 at 2:08 am
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Thanks for replying - I am not trying to turn it into an absolute principle, I am just trying to follow the logic.
If the government is better at something in one instance, why wouldn’t it be better in another similar? Maybe ‘better’ is a bad way to put it, more efficient or stable?
Also, I am having a discussion with friends about the Ponzi scheme relation. The only real difference we have come up with so far is intent. Thanks
May 27th, 2009 at 9:20 am
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Why does something have to be turned into an absolute intellectual principle? Saying that the government should provide a good safety net is NOT saying that government should control everything.
Government should not control everything, it would be a disaster, and the voters will never allow it.
May 28th, 2009 at 4:33 pm
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Also, if you are saying the government is a better at collecting, saving and distributing money through something like Social Security, aren’t you then making the case that government should be in charge of more of peoples money? and if so why stop there, why not all? if that is the case.
Thanks for your consideration - trying to figure this out.
May 29th, 2009 at 11:09 pm
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Hello, I am still trying to understand why you say Social Security is not a Ponzi scheme.
The only reason I can grasp from this video (which is nicely animated - Flash?) is it will last longer because we become more productive.
Does that really separate it from being a Ponzi scheme? Didn’t Pozi essentially promise the same thing - outcome will be greater than input?
May 31st, 2009 at 8:18 am
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This comment will be deleted because you must CITE EVIDENCE that the safety net isn’t going to be around by the time you qualify.
There is no such evidence. The safety net will be here.
The Social Security Board of Trustees construct three different scenarios every year — and at the current time, Social Security is heading toward full solvency.
Stop falling for scare stories. Emotions are not good arguments.
June 2nd, 2009 at 7:29 pm
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If this so called safety net isn’t going to be around by the time I qualify in drawing from it, than why in the hell should I have to pay for it. All I know is that my parents and my in-laws have it damn good like most their age do. They are collecting from retirement pensions and collecting from social security.
June 4th, 2009 at 5:30 pm
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If you earned 5% growth rates, then that would only be a 2% real return after inflation. Broker fees are minimum 1%, or 2% on average… which is most of your earnings.
This is why countries like Chile with privatized pension plans have seen most of their market gains lost to fees and administration. Social Security is far less than 1/1000th the overhead of a traditional investment vehicle.
Social Security is by far the most efficient system, revenues based on taxing the entire economy.
June 8th, 2009 at 3:41 am
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“Risk free” here means “FDIC insured” means “covered by a taxpayer bailout” if it crashes.
Currently, Social Security is heading between the Trustee’s low-cost and middle-cost projections. Hardly a failure, not even a big problem if it comes to it.
June 10th, 2009 at 2:02 pm
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high yield accounts insured by the FDIC are completely risk free. Once you reach the maximum that the federal government will insure, its simple to find another bank with a high yield account. have the interest on your 100k-200k (depending on if you have a joint owner) spill over into a different high yield account at a different bank.
It’s simple, social security is a failure.
June 11th, 2009 at 3:23 pm
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Learn about risk. Average return is not actual return –actual may be more, it may be less. And it doesn’t pay-off in down cycles, nor help against some other possible adversities in life.
June 12th, 2009 at 5:15 am
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fair enough on the political thing
losing your shirt happens all the time, if you look short term.
for large common stocks the worst single year was in 1931 with a average loss of 43.3% however, even that year is included in the 20 year indexes, and still the lowest average return has been a positive 3.1%
June 14th, 2009 at 3:10 pm
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Losing your shirt is not hard to do either: see today’s newspapers, Sept. 15, 2008.
June 16th, 2009 at 10:29 am
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I deleted your other comment because it advocated a political candidate. One of several reasons to get booted from here.
June 18th, 2009 at 4:58 pm
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even at 3% which can be earned in an ING savings account and is risk free, and insured by the federal government up to $200,000 with a joint owner, you will still end up better than the social security system.
Also, on a 20 year investment horizon the best average return on a large company stock portfolio has been 17.7%. The LOWEST has been a POSITIVE 3.1%, and that was during the great depression.
earning 5% is not hard to do.
June 20th, 2009 at 9:50 am
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As in some of the other comments here, this ignores RISK, in financial markets, in life. You need a retirement account and a safety net, and you aren’t seeing enough income to pay for both — although Lehman Bros. is now bankrupt on $613 billion dollars worth of debt. Who would bail out your annuity? The taxpayers. Social Security is not a retirement account. It is the SAFETY NET.
June 21st, 2009 at 2:37 pm
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do an annuity. $31,695 salary = US median income.
12.4% of that is given to the gov’t 1/2 paid by employee 1/2 paid by employer.
12.4% of $31,695 = $3,930.18
lets assume the individual earns that salary from age 21-64, no raises, not adjustments.
put that in an annuity earning 5% (a pretty conservative rate)
by the time you are 65 you will have $623,720.
if you can earn 5% on that sum you will make $31,186 a year in interest, and have a fortune to pass on to your children.
June 23rd, 2009 at 1:30 pm
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This is incorrect. The Japanese public pensions system is invested in stocks and that is part of the reason why they have been in a mess. Social Security is a simple transfer system that, on its own, is either heading toward a little reconsideration in 40 or 50 years, or else no shortfall, ever. It’s just not a big deal.
June 25th, 2009 at 2:48 pm
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What will happen is what happened in Japan with pensions they are about 10-20 years ahead of us in demographics what they did is increase premiums and cut outlays. Probably some socialist trend such as ” people who are worth so and so wont qualify to recieve any payment etc…” I am a free man and live in a nation where I dont have to go through any of this leearnold you are a slave.
June 26th, 2009 at 3:11 am
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Your comment is misinformation and it will be deleted shortly.
(1) It’s not anti-Bush especially, it’s anti-privatization. (2) Gov’t has to provide a safety net, due to the reality of the market economy. This has been understood for a few hundred years. (3) Clinton still made the deficit SMALLER. (4) We’re not printing money to pay for SS. (5) We’re printing it to save the private financial markets! (6) Current “inflation” is mostly from exploding global demand for raw materials and energy.
June 29th, 2009 at 5:44 am
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Well taking an anti bush stance you are proving another point. Government should not be involved in any of this shit, look at the complicated account etc… if a private company did this they would be sued. Clinton used the social security surplus towards the budget to make it look like there was a surplus there wasnt. What you fail to mention is where inflation comes from (printing too much money for pay for this crap) it isnt that we can pay the checks but the money wont be worth anything.
June 30th, 2009 at 9:09 am
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Fisher’s $13.6 trillion shortfall for SS is over the infinite horizon. That is about one year’s GDP over eternity. Hardly a problem! (And it is only a guess, based on a low productivity rate.)
July 2nd, 2009 at 11:19 am
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No, Social Security does not resolve any other issues in the market economy. As for inflation adjustments in benefits, these comments are restricted to 500 characters. This sort of information can be found rather easily on the internet.
July 5th, 2009 at 5:49 am
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In regards to your comment on inflation, “With inflation, everything rises: wages, benefits”, today we have inflation, quite a bit when looking at headline, but wages aren’t following. Does SS have a way or resolving this issue? Also, when they make an inflation adjustment, do they use headline or core? And do they raise it enough to cover the inflation costs incurred during the prior year, or just going forward?