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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (212685)	12/4/2004 5:43:56 PM
From: i-node	Read Replies (1) \| Respond to of 1573207

JF The end result would be a HUGE surplus; enough to bury the cost of several wars. I don't know what your background is. But it clearly is not financial. We're talking about $50 trillion in liabilities and you're talking about the "cost of several wars"? LMAO.

To: Road Walker who wrote (212685)	12/5/2004 3:45:17 AM
From: Amy J	Read Replies (2) \| Respond to of 1573207

RE: "The solutions are so simple." While I agree with most of your solution, none of your solutions involve self-responsibility or giving, they only involve taking more from the next generation because you neglected to add one item: Why not make people save a little bit too? This is what I mean by giving a little bit - by asking people to take this one small step of responsibility for themselves. A solution needs to have some component of self-responsibility, rather than exclusively taking from the next generation. (No one from my generation believes for a second they'll even see a penny of their SS, except for any privatized component.) Why not create a matching contribution - so people have the incentive to save for themselves? The govt places 3% into your private individual SS fund to match your 3%. If you don't put an extra 3% above and beyond FICA, then you don't get the govt's privatized matching of 3%. Leave everything else unchanged, meaning keep requiring people to pay the 15% FICA so current retires aren't impacted. Loosely speaking, that's approx 7.5% from employee (EE) & 7.5% from employer (ER) as it is today but now add + 3% from your additional savings into a "privatized SS" which the govt matches by 3%. This achieves a few things: - it keeps the current SS unchanged - the govt still collects its 15% from EE and ER to pay for the current retires. - but it creates a wonderful venue of opportunity for people to save money for the future with an incentive of a 3% match. So many people will save an extra 3% into a privatized fund if it's matched. ==> And if people saved this additional 3% per year, it's equivalent to raising FICA tax by 40%, but it feels better because they get to save it for themselves rather than see a 40% increase in FICA tax. Same way to achieve the goal, but with an incentive program tied to responsibility. - but you ask, how does the govt pay for this extra 3% matching? Unlike Bush's proposal, the underlying SS program continues to collect the full 15% (i.e. isn't privatized), so you aren't stealing from it to do the conversion. So it will operate fine for a couple more decades, but meanwhile you're putting in an extra 3% of retirement savings for the future - and that's like the govt raising FICA by 40% because 40% of 7.5% = 3%. You had proposed only a 10% increase in FICA, but this is even better - it's more but not punative. The govt floats a bond for 3% to match people's extra 3% savings, and as that extra 6% amount grows in a privatized fund that you control, the govt can reduce the future payout to my generation at the same time the bonds come due, while continuing payouts to the current retires & boomers because the underlying SS hasn't been tampered with. The big reason why people are against Bush's proposal is because he steals from the 15% to create a privatized fund. My proposal is: keep the 15% the same and don't touch it - because this needs to go to the retires and boomers as promised. However, my proposal creates an incentive matching program of 3% for a total of 6% extra in retirement savings per year, where the matching bond comes due exactly as my generation retires. My generation shouldn't get the component of the non-privatized fund. Most of us would be thrilled if we could even get 3%, so 6% is even better. It is a wonderful way to increase this country's savings rate without the punative tax. Let people feel good about placing an additional 3% away into a privatized fund - don't make them feel like it's another tax. Loosely, we would have a 3% increase in savings from the people. So, while I like your solution, your solution neglected to create an incentive for people to save more money. And that's the real problem here, it's that people aren't saving enough money - they are shopping at Walmart like obsessive shoppers buying junk. But by creating an incentive to save, you solve that problem. My solution also keeps the feet in place for the current retires and boomers as well as the needy, while creating an incentive for my generation to keep giving, that increases the savings rate. How's that? Regards, Amy J