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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Rose who wrote (39725)	3/25/2005 3:33:53 PM
From: geode00	Read Replies (1) \| Respond to of 173976

What happens AFTER the BABY BOOM/BABY BUST combo goes through? After that, SS gets back into savings mode because there's another baby boom generation from the 80s coming through to take care of the baby busters. Large generations and small generations come and go. If there was a permanent problem like the boom/bust scenario we're looking at currently, we would be seeing a decline in the US population to ZERO. SS is not a ponzi scheme which goes permanently in one direction instead of flowing back and forth. IRAs, 401Ks, SEP-Iras, life insurance, etc. are not even used fully. If people want private retirement investment outside of SS, it's available everywhere. The entire point of SS is INSURANCE. Insurance against financial disaster of one kind or another. Insurance is most needed when the risk is highest. With the decline in pensions, with the mobility and insecurity of the job market, with the decline in REAL INCOME for most of the country, the financial risk is greater now. Why wouldn't we want MORE INSURANCE and not less? It's completely illogical.

To: Kevin Rose who wrote (39725)	3/25/2005 3:44:58 PM
From: Peter Dierks	Read Replies (2) \| Respond to of 173976

Are you familiar with the charges of corruption against Worldcom? Enron? etc... SS is still taking in more than it is paying out, and will do so until about 2017. Most estimates say the excess contributions end around 2014, you say 2017, either one will work. In corporate accounting, GAAP requires that unfunded liabilities be reported. Federal pension regulations require that privately held pensions be fully funded. In 2002 the government passed a law allowing companies to have unfunded pensions for a short period of time to recover from the 911 disaster’s effect on security valuations. SOCIAL SECURITY practices are to create an unfunded liability by spending the money in the current fiscal year (off budget). For a corporation to do this would be fraud. Do you want to bet that your grandchildren will want to pay high taxes to fund your retirement? Raising taxes to cover the difference is one way to help close the gap. Cutting expenses is another. Both will be needed. The drunken sailors in power right now need to have their check writing hands slapped. By recognizing the liability and monetizing it, we will allow taxpayers to become the policing force that puts the cuffs on the drunken spending spree. Ignoring the problem until all of the money is gone and the debts are out of control is irresponsible. If the US declares bankruptcy, SS payments will cease. Private investment will do nothing to change the so-called 'Ponzi' scheme of SS. The current proposal is to allow people a choice of very conservative, low return investments. In fact, the system loses a significant amount of money because of the transition and setup costs. Who wins? Wall Street. More money on the street means more profits for them. Works the same as in Vegas. The more you play, the more they win. A recent estimate stated that current retirees are earning 1.8% return on their tax withheld (and that future retirees wood have lower returns - even negative). Assuming you worked for 40 years and contributed 1000 per year at 1.8% return you would have $57,887. Assuming you worked for 40 years and contributed 1000 per year at 4% return you would have $95,210. Assuming you worked for 40 years and contributed 1000 per year at 6% return you would have $155,344. Assuming you worked for 40 years and contributed 1000 per year at 8% return you would have $260,665. Assuming you worked for 40 years and contributed 1000 per year at 6 % return you would have $260,665. This uses simple annual interest computations. Assuming you have a choice of 1.8% or 6%, doing nothing optimistically, projects you choose to have 37% of the total potential retirement income. How does dog food soufflé sound for dinner for the last 25 years of your life? Here is the last line of my computation if you wish to recreate the spreadsheet, you can compare the numbers. Prior EB Contrib Int Ern End Bal 1.8% 40 55881.32 1000 1005.86376 57887.18 4% 40 90586.62 1000 3623.4648 95210.08 6% 40 145607.8 1000 8736.468 155344.27 8% 40 240431.37 1000 19234.5096 260665.88