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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: geode00 who wrote (262185)	4/22/2008 11:56:34 AM
From: TimF	Read Replies (1) \| Respond to of 281500

It doesn't do any good to say it is too much when you don't know what too much is. Nonsense. If its 150 degrees in the shade, you don't have to decide on a perfect temperature in order to say "its too hot". So, you are saying that it is dumb to have people save for retirement by buying into Social Security. I'm saying they aren't saving for their retirement through Social Security. They are having some of their income taxed away from them (and so unavailable for them to use for saving) in return for a promise that the government will give them benefits later. Meanwhile the money is spent on other things, it isn't invested in a way to bring a real rate of return wither directly to the individual, or to the US federal government. Investing in the government is as close to zero risk as they come. The risk of getting a negative real rate of return is not insignificant. The risk of under performing is near 100%. Then there is the additional political risk. If the program wasn't so expensive, and the expense wasn't growing at a good clip, this political risk would be minimal, perhaps near zero. But with the program becoming unaffordable, the risk becomes significant. There is only a very tiny chance the program outright gets canceled, but the chance of reductions in benefits is very high. (Technically the benefits would probably not be reduced in nominal terms, but the rate of increase would go down, and its even possible the payout will be reduced in real terms.) You still can't manage to wrap your mind around a mandatory insurance program. If the government mandates you pay in than it IS a tax. The government can call it anything it wants, "fees" "insurance contributions", etc, but its a tax. Voluntary payments to the government (say charges for entering a national park) - Not a tax. Involuntary payments to the government - Tax