Oregonians Can Help Reform Social Security

Ask the typical young person what they think of Social Security, and they are likely to tell you that it was fine for their parents, but they simply don’t believe it will be there for them when they retire. Sadly, they are probably right.

A Social Security system designed for the world of 1935 (when it began), and that worked well for years, will not work in the world of 2035 and beyond. Here is why:

In 1950 there were sixteen workers paying into Social Security for every one retiree. Today, that ratio is only about three to one; and when our children retire there will be only two workers paying into the system to support them. That is a recipe for financial disaster, but we can reform the system before we are bankrupt.

What can Oregonians do about fixing Social Security? Isn’t this a federal issue? Remember, Oregon has been a leader in changing the way federal programs operate in the states. We secured federal waivers to alter use of Medicaid funds for the Oregon Health Plan. We obtained waivers to extend our innovative JOBS Plus program, putting welfare recipients to work. So, Oregonians have helped change federal policy in the past, and we can and should do so in the future.

That is why Cascade Policy Institute, an Oregon think tank, has been working to reform Social Security since 1996. We brought José Piñera, architect of Chile’s successful Social Security reforms, to Portland that year. In 1997 we helped the Oregon legislature craft a resolution asking Congress to allow Oregonians to opt out of Social Security and design our own retirement program based on personal accounts. Unfortunately, Congress was not ready to listen.

Now, a national organization called America is Listening has crafted a proposal that could gain real traction in Congress and lead to change for our children and grandchildren. It’s called the SMART Act. The Act recognizes that employers and employees each pay 7.65% of wages into the Social Security System. This money should be set aside to pay future retirement benefits. However, the truth is that the U.S. Supreme Court has ruled that no one has a property right to any of that money upon retirement. Congress can change the rules, and the benefits, at any time.

The SMART Act would let individual workers save for their own retirement in protected, personal accounts. The accounts would be owned by the workers, just like any other financial asset. America is Listening has short videos on its website that describe the problem and introduce its proposed solution. The proposal is financially sound and could form the basis of a real reform effort in the near future. What can Oregonians do to help promote real Social Security reform?

“¢ Go online and visit www.thesmartact.org.
“¢ Read the information there, watch the short videos and enter your zip code for information about how to contact your local media and your federal representatives.
“¢ Contact your local cable access stations and ask them to run the America is Listening videos.
“¢ Contact your members of Congress and ask them to consider supporting Arizona Congressman Jeff Flake’s bill, HR 4181, the Secure Medicare and Retirement for Tomorrow (SMART) Act of 2007.

Some of our national “leaders” tell us that there is no crisis now and won’t be for years, so why act now?

The truth is, the longer we wait, the harder it will be to effect change. The Baby Boomers are already beginning to retire, and the system’s so-called financial surplus soon will disappear. Wait too long, and the only options may be large tax increases or sharp benefit cuts, or a combination of both.

If we act today, changes can be phased in gradually over a number of years. If we fail to act today, future generations will be faced with changes that are large, abrupt and potentially devastating to their financial future.

The time to reform Social Security is now. Please do what you can to make the process a success for all Oregonians, and all Americans.

Steve Buckstein is Senior Policy Analyst and founder of Cascade Policy Institute, a Portland-based think tank.

  • Sybella

    Actually for the younger people, I think it would be a good idea. It would have to be locked in so they couldn’t touch it before age 62. I see so many come through my office that pulled out their retirement plans early. They have nothing, when they get to Social Security they will still have nothing set aside.

    For anything like this to work, it would have to be written in stone. If something like this went through, it would leave a huge gap for older workers who have been planning on Social Security and have put nothing aside. Yes there are a lot of them. We live in the NOW generation. We want it now and we can’t see beyond today. Scary.

    Truthfully, I’m a penny pincher and if I’d had that option when I was younger and had time for it to grow, I could be rolling in clover. Unfortunately I wasn’t that much of a penny pincher all my life and even though I’m ok, I’m not as good as I should be for financing my retirement. I was 40 when I started doing any investing.

    When I was selling mutual funds I had an advertising cube. It involved two people. The figures were figured on an 8% return over time. The first put $2000.00 per year in his IRA starting at age 21. He did this for nine years and stopped. The other person started putting $2000.00 in his IRA at age 40 and stopped at age 49. Each put $18,000 into their accounts. The 21 year old at age 65 had $465,000 in his account and the 40 year old had $65,000 in his account. I thought it was a great example of the time value of money.

    Look at the possibilities if the employees today could put their 7.65% into an account and with the required employer match to Social Security also added to the individual’s account that would be 15.3% of a person’s earnings a year put into a retirement account.

    Just think of it. Social Security has become an easy cushion that you may or may not get any advantage of.

    Go for it.

    • Steve Buckstein

      Sybella, glad you like the concept. For clarification, the SMART Act would allow older workers (and all other workers) to choose the new program or stay in regular Social Security, so the “huge gap” you are rightly concerned about wouldn’t occur.

  • Jared

    Good insights. This issue is ever becoming more important and it needs to be addressed.

  • eagle eye

    It might be a good idea but the real problem is not Social Security, it is medical care and as far as the government goes, medicare and medicaid.

    Social Security is manageable even the current system will not eat up the national output. With modest changes — indexing wealthier recipients’ benefits to inflation, not the growth of income — it would be very stable.

    Meidicare/Medicaid, however, are on track to eat up 3/4 as much of GDP as the current entire federal budget — i.e. federal spending will go from about 20% to 35% of GDP by 1980 with present trends. This clearly cannot happen without massive tax increases. Something has to be done.

    Fred Thompson was the only presidential candidate who talked about this. Look where it got him.

    • Steve Buckstein

      ee, while you’re correct that government health care programs pose a much bigger unfunded liability problem, I believe Social Security is a less complex issue to tackle now.

      We know how Ponzi schemes ultimately turn out, and we know how sound market and investment principles can result in much better retirement alternatives.

      As I see it, the primary obstacle to SS reform is simply political. It’s a tough obstacle, but we owe it to future generations to try.

      • eagle eye

        I agree that SS should be reformed. As I said

        “with modest changes — indexing wealthier recipients’ benefits to inflation, not the growth of income — it would be very stable.”

        I believe this will be easier to push through than a proposal to create private accounts. I would be favorabaly disposed toward the latter, but I don’t think it’s going to happen for a while. What I am proposing, I believe, will happen sooner. Eventually, both could take place. Fred Thompson proposed something like what I propose; look where it got him. It is going to be hard to change anything. But the sooner the better.

        • Jon

          eagle eye and steve. We are in agreement that there are problems facing Social Security Retirement and Social Security Medicare. However, after reading the above dialog i did a little digging. The Social Security Administration has written a lot of material about potential ways of alleviating the very significant funding shortfall in the near future. Here is a link to many different options and their overall impact on the retirement trust fund. Once you’ve read all of the options you’ll see that very few “modest changes” will solve the problem and in fact these changes, in terms of generating additional revenue for the system, are far from modest. Please take a look.


  • dean

    Steve…what is substantively different from your proposal as compared to what President Bush atempted in 2005, that ended in a resounding thud?

    • Steve Buckstein

      Dean, Bush empanelled a commission but never submitted a specific bill. Rep. Flake’s bill lays out specifics; not all of which will please every reform advocate, but it’s a concrete attempt to move the ball forward.

      • dean

        Granted Bush did not get specific, but his parameters seemed identical to what you have shown us here. The essential problem is bridge funding. How do you pay for Baby boomer retirement while letting young payroll tax payers opt out? It does not add up unless you use Bush math (i.e. full speed ahead on deficits).

        Plus…you are asking americans to give up a proven bird in the hand (existing SSI) for a possibly better bird somewhere in the unexplored (except in Chile) bush (no pun intended).

        How would you feel about a proposal that would retain the existing SSI system as is, shoring it up financially as EE suggests, for say the next 25 years, while initiating a new system that is more of an IRA, starting small and building it up over time?

        Then, if the IRA system proves itself capable of financing retirement, phase back and possibly eliminate the existing SSI.

        This would of course require a new tax source to fund the new IRA program, again unless we use Bush math. Some have suggested reinstituting the estate tax, and using those funds to buy IRAs at the low economic end, with diminishing subsidies as one’s income rises. We could also have a voluntary payroll tax addition that is matched by the government.

        Your thoughts?

        • Steve Buckstein

          Dean, you’re correct that the plan relies on more debt to bridge the transition, but the alternative is either much more debt to fund future benefits, or slashing those benefits, or sharply higher taxes, all of which are not very palatable either.

          With a funded personal accounts approach, however, there will be less call on payroll taxes to pay SS benefits, allowing those funds to help pay off the transition debt over time. Again, not ideal, but we lost the ideal opportunity long ago when we embarked on this current pay as you go SS system in the first place.

          I’m not in favor of any alternative system that requires more taxes than workers are saddled with now. The 15.3% combined payroll tax is already a bigger tax bite for most workers than even the federal personal income tax. Letting workers divert just half of that into their own personal accounts would be a great step toward letting them build real assets that they own, instead of relying on political promises that almost certainly won’t be kept.

  • eagle eye

    dean, thud or not, social security as currently practiced is unstable (medicare/medicaid is ultra-unstable). Something has got to change, so something will change. I think my proposal is more politically feasible, but any change is going to be a tough sale. But change is going to come, like it or not. As the greenies like to say, the current system is “unsustainabale”.

    A new system such as you propose might be an attractive option. I think it could actually be done without bridge funding, on a volumtary basis, with the current taxation structure. The reason being that the well-to-do are going to end up with less, no matter what reform takes place — lower benefits, higher taxes while working, or both.

    • dean

      Steve…with due respect, I can’t support any more pie in the sky “conservative” programs that rely on debt financing. SSI and an IRA replacement can easily be financed by raising or eliminating the upper cap, which presently goes only to 90 something dollars. Britain has no such upper cap and their economy is doing fine.

      If you are really serious about wanting to phase down SSI, then be prepared to pay now, not later. We have had enough of that with the Iraq war and upper end tax cuts. The hole we are leaving our kids is just getting too deep. ‘letting workers put 1/2 into a personal account” means deficit financing existing retirees. Bad idea.

      I think we all, liberals and conservatives, need to stop handing out free candy. On my side of the aisle, promising new services (i.e. health insurance) that are not adequately financed. On your side, advocating new prisons (Mannix), wars (McCain), increased defense spending (Bush),and more tax cuts (every Republican on earth it seems) at zero cost to anyone or anything. Let’s all start acting like adults and we can begin rebuilding our economy instead of spending the rest of our legacy before our kids even grow up.

      EE….I don’t think it can work without dedicated funding. We already have a “voluntary” program, called an IRA.

      Its all unsustainable. Our climate, energy use, ecosystems, agriculture, transportation infrastructure, economy, health care system, way of life…unless we wake up and grow up fast. The sand is leaking out of the dial. Auntie Em!

      • Jon

        For those interested in the intricacies of Representative Flake’s transition funding. It is quite different from anything proposed by President Bush’s commission or any other “fundamental reform” advocate. The nuance lies in the decision to let individuals choose between the traditional system and the new system at retirement age, when they have all the information.

        Here’s how it works. Everyone working today gets an account today. Employers continue to contribute their portion of the tax to support current retirees. The SSA changes the indexing formula (one of the moderate adjustments proposed by ee) to help keep transition costs low.

        Once an individual reaches retirement age they have a choice. They compare the annuity value of their account with the traditional benefit annuity and choose the one that is better for them.

        The choice at the end is important not just for the individual but also in terms of transition costs. If an individual chooses the account annuity then they forgo traditional benefits thus lowering the unfunded liability of the current system. If they instead choose the traditional annuity they forgo their account annuity to the trust fund. This means SSA will only have to come up with a fraction of the traditional benefits after the funds received have been depleted over time.

        If any of the above is unclear please let me know and i will attempt to clarify.

  • Rupert In Springfield

    Frankly any problem with funding social security is going to have to start with a big change of mindset in the American public. The average person out there is under two serious misconceptions. One is that SS is not pay as you go. Two, the average person seriously does believe that the money set aside from them, is actually in an account with, if not their name on it, then in a special SS till, not general revenue. Sadly, this isn’t helped by the Democrats, who about ten years ago came up with the great idea of sending everyone an annual statement on their SS funds, making it appear even more like a bank account just for them.

    Any privatization of SS is, frankly, a scam without one big consideration, what to do about current retirees?

    To my mind what will eventually have to be done is one of two things, either tell current retirees “sorry, what you were expecting to get isn’t coming, you were lied to”. The other option is to tell future retirees the same thing. Either one of these will do and is really the only way I can see to allow people to truly set aside money for themselves, which is what privatization in the end means. Without ending the current ponzi scheme, of one generation funding the previous one, I just don’t see how you do it.

    So what’s the moral choice? Who gets told that they aren’t going to get what was promised to them? To my mind it is current retirees, people of my parents generation. Why? Because given what they paid in SS taxes and given their return people of my parents generation recouped what they put in within something like fives years. That quite a generous return. The other option, doing it to future generations seems hardly reasonable. Current and future generations are taxed at a far higher rate than the previous generation, and can currently expect to see a slightly negative return on their money. Cutting their benefits seems quite a bit less fair than cutting the benefits of a generation that stands to reap a windfall.

    Don’t like it? I can see why. But lets face it, its the truth, at some point the system will fail and a whole generation will be told “guess what, you were lied to”. I don’t see any moral issue with saying that to the current generation, as opposed to a future one. In the end, SS was a lie from the start, a scam to strip people of their money and nothing more. How do we know this? The original age for collection of benefits was set beyond the average lifespan. No one would ever invest in something like that unless compelled to by government.

    Its time to end this entire cruel system, that takes from even the lowest paid worker an amount that would assure him of retirement as a millionaire, even if invested in an index fund, and returns a sum that will not even bring him above the poverty level from a principle over which he has no ownership.

    • eagle eye

      Rupert, it sounds like you’re saying boils down to “screw my parents’ generation”. Because, you say, current and future generations are taxed at a far higher rate than the previous generation. But that is nonsense. There is no law that says future generations will be taxed at anything other than the current rate. The social security rates have been what they are for something more than 20 years, is my recollection. Before that, they were slightly lower. Your parents are not responsible for the Social Security system being what it is, unless they were adults in the mid 1930’s. They are not even responsible for the existence of Medicare, unless they were adults in power in the mid 1960’s.

      You may think that you’re entitled to live in a world where you can abnegate your responsibilities that you were born with. Yes, born with, we all are born into a network of obligations and responsibilities. You might wish otherwise — I once thought I was born into a world where I had no obligations except to myself — but that is not the way the world works.

      And stop feeling so sorry for yourself. Your generation has been born into a country that is far richer than the country in which your parents was born. And they were born in a far richer world than your grandparents. Your generation, on average, will inherit much more wealth per capita than your parents’ generation.

      By the way, you will probably get a much larger inheritance than you would otherwise if Medicare didn’t exist. I don’t know if your parents have an estate that they are planning to pass on to you, but if they do, it can be diminished or eliminated quite easily with some health in their declining years.

      And don’t forget, you owe your parents and society for the education you got. Or did you pay for it yourself?

      You may think you’re being screwed over by the older people. But I’ll tell you, a lot of the older people are not at all impressed with your whiny, smug, semi-civilized generation that seems to feel it is entitled to live like aristocracy with no output of work or accomplishment of its own.

      • Rupert in Springfield

        >The social security rates have been what they are for something more than 20 years, is my recollection. Before that, they were slightly lower.

        Any check of ROI ( return on investment ) for those of my parents generation will quickly show that they will get back what they put into social security in something like a 2 to five year time span. Sorry, but I am not persuaded with any argument that somehow they are entitled to a windfall, while the ROI for those of my generation ( I am 46 ) will be essentially what we put in or up or down a percent or two.

        >You may think that you’re entitled to live in a world where you can abnegate your responsibilities that you were born with.

        Not at all, in fact the exact opposite was the thrust of my argument. I don’t feel I have any moral responsibility ( I do have a legal one ) whatsoever so pay into a system that guarantees me a zero or negative return just to accord a previous generation a larger return. This is “abnegating” my responsibilities how? What does “abnegate” mean anyway? Is that a real word?

        Aren’t current retirees abnegating their responsibility by fighting any cut in their benefits, thus assuring current workers negative or zero returns?

        >And stop feeling so sorry for yourself.

        Where am I feeling sorry for myself? I simply think it is wrong to cripple my SS retirement to pay fat returns to others. How in the world would it be unfair to say to them, “sorry, you are going to get a zero return, just like your kids are” and cut current retirees benefits now to the same level as my generation? You call that feeling sorry for myself, I call it asking for the same responsibility of the current retirees that they ask of me.

        >By the way, you will probably get a much larger inheritance than you would otherwise if Medicare didn’t exist.

        Big whoop, who cares. I sure don’t. I wasn’t addressing Medicare, I was addressing Social Security. Where in the world do you see in my post that I am addressing Medicare?

        >And don’t forget, you owe your parents and society for the education you got. Or did you pay for it yourself?

        I don’t owe society jack for my education. I don’t owe my parents either. I never attended public school in my life and I paid for college. As for primary and secondary school, my parents paid for that. Their parents paid for their education, and I am currently paying for my kids education ( they go to private school ). Even Steven.

        >You may think you’re being screwed over by the older people.

        I am, so you are right on that score. Social Security is pay as you go. So since I am currently paying for older people, and since the system, as currently structured, took little from their pay checks compared to current workers, and since they are getting far higher benefits than current workers can ever expect to see, yes, I am being screwed over by them by any definition of the term. Your point is what?

        >But I’ll tell you, a lot of the older people are not at all impressed

        Who cares? I have no interest in impressing them. I have interest in reforming Social Security, not impressing older people. I am terrible at golf and have zero affinity for baby blue jump suits. I have, therefore, always had low expectations of myself insofar as impressing older people goes. But then again I have always been a humble sort in that regard.

        >with your whiny, smug, semi-civilized generation that seems to feel it is entitled to live like aristocracy

        When did I ever say I was entitled to live like aristocracy? You are the one who is saying that, in terms of current SS benefits vs. future ones. I am simply arguing for equality of benefits. Lets start paying current retirees exactly what all the actuarial tables say future retires will get. Seems like the shoe is on the other foot. Current retirees put in a pittance, as a percentage of their pay, compared to what my generation will have put into SS, and yet they feel entitled to have their benefits so high as to guarantee future retirees will have zero return. Why should I see zero or negative return, just to pay high returns to current retirees, the richest demographic by age in our society?

        >with no output of work or accomplishment of its own.

        Where do you get that I have no work output or accomplishment? I’m really fascinated by that one. I’m 46 years old. I have never been employed by anyone other than myself except when I was working in college. I have never received a cent of unemployment, or welfare of any kind. I also had no scholarship for college, I paid full boat at Boston University,one of the most expensive universities in the country at the time. When I graduated college with a degree in Electrical Engineering I had nothing but debt as far as the eye could see and I worked my ass off to pay that debt. I still rarely work less than a 60 hour week, and I have the unique privilege of turning half my income over to the government for that singular joy of self employment.

        Now, if you would kindly tell me how in the hell that translates into no work or accomplishment, Id be more than glad to listen. I am sure it would be quite an astonishing litany and I can assure you, I would listen with more than rapt attention.

  • eagle eye

    OK, you’re older than I thought; usually, the people with your attitude are in their 20’s and 30’s.

    Ooops, sorry about the word “abnegate”. For someone who works so hard, I’m surprised you didn’t look it up, it takes about 30 seconds.

    The trouble with the “screw my parents generation” is that promises have been made to those people. Societies break those fundamental promises at great risk.

    You don’t care what the older people think, but you want to reform Social Security? Well, for quite a few years, you are going to need their cooperation, to have a prayer of getting anywhere. “Screw them” is not likely to work. This is the level of acumen (look it up?) that got Ron Saxton elected.

    The point about Medicare is that it is a far bigger problem than Social Security, which can be reformed with fairly modest steps (but politically impossible at present). See my post above for a modest proposal.

    Actually, I doubt that Social Security is as great a deal as you make it to be for people retiring now, and it is not going to be quite as lousy a deal as you think when you are of retirement age. You are actually going to end up screwing yourself if you have your way, especially if your engineering career should come to a premature end.

    I’m somewhat impressed by your devotion to private schools. In choosing BU though you chose an overpriced, overrated place to get in debt for. I don’t feel sorry for you there. Maybe you don’t owe for your education, but most people who want to screw Social Security do.

    And do you not owe something for inheriting the country into which you were born? Forget about your parents. There are still plenty of people around living off of Social Security and Medicare who were the people who saved civilization, in WWII and Korea and the Cold War and VietNam. They were also the ones who created a world with a lot of demand for EE majors and a high payoff for that kind of work. “Screw them” does not cut it with me.

    I still think you probably had it better than your parents, certainly better than most of the grandparents of people your age.

    • dean

      Hate to butt into this one, but for a few small points. First, I’m recalling a Tom Toles cartoon that had the last will and testament of “the greatest generation.” It included a world of depleted fossil fuels, a warming planet, species going extinct, a mounting national debt, and “by the way, we spent your inheritance.” A bit cynical, but it does point out the mixed bag being left behind.

      Second, Rupert apears to be fairly representative of Gen Xrs, or those who came of age during the great Democratic-liberal crackup and the ascendency of Reagan and “morning in America. The meme for this group has been that only the individual matters.
      What’s mine is mine, and screw those who can’t fend for themselves. There are not enough lifeboats, so over the side with them. Unfortunately we are reaping what we sowed with that cohort.

      But the next generation, “the millenials” as they are called, are coming of age during the great conservative-Republican crackup. And their ethics and politics seem to reflect this. My son is part of this group. Their meme appears to be much more community and environment minded. They seem to know they are inheriting a mess from the previous 3 generations (including mine, the baby boomers,) but instead of despairing over it they appear to be rolling up their sleeves. I’m way impressed with what I am seeing so far. And this is the largest generation in numbers we have ever had. Multi-racial, non-judgemental, not moralistic, not materialistic, skeptical but not cynical….I like them, and am learning a lot from them.

      This is the group that is propelling Obama and responding to his hopefull, if a bit vague message. Things could get very interesting over the next few years.

      • eagle eye

        I think the “greatest generation” did a whole lot better than that cartoon, if it was really about them. Those who are dying out now left a whole lot better world to their children, the boomers. It sounds like you’re talking about the boomers, not their parents. If Rupert is really 46, he would be at the tail-end of the boomers.

        I think it’s ridiculous to judge any age group as a group, but I don’t see the current young adults as much more or less self-indulgent than the Xers or the boomers. Environmentally aware? I just don’t see it. There’s not much push any more for environmental preservation. The global warming stuff is mostly talk (and quite possibly a distraction from real environmental concerns like species extinction due to loss of habitat.) Recycling? Big deal! That is mostly just feel-good stuff.

        I do feel bad that the millenials are going to face the coming social security/medicare unraveling. (And they will be cause as much as victims: the projections I’ve seen are for medical care to cost more and more indefinitely into the future, through 1980 where the projections stop.) Therefore I’d like to see a gradual reform of those programs. The big one, of course, is medical care.

        • Rupert in Springfield

          I really am 46. I was born in 1961. If you like I will send you a picture. I’m incredibly handsome and have a quite lithe and well preserved body.

          I’m also left handed. My sign is Scorpio.

          Turn ons – Great service at a restaurant. Cuddling by the fire. Old Movies.

          Turn offs – Bigots. Travel by bus. Bad coffee.

          Celebrity you would most like to sleep with – Myself. I am the brightest star in my galaxy. For me, a mirror is porn.

    • Rupert In Springfield

      >Ooops, sorry about the word “abnegate”. For someone who works so hard, I’m surprised you didn’t look it up, it takes about 30 seconds.

      I didn’t feel it was my responsibility to look up the word. Frankly I liked it, so I figured I would use it.

      >You don’t care what the older people think, but you want to reform Social Security? Well, for quite a few years, you are going to need their cooperation, to have a prayer of getting anywhere.

      Yes, quite true. I frankly don’t think anything that cuts current benefits is ever going to happen. To be honest, I don’t think it is a problem that will ever be solved as I do feel there is a strong chance we are in the tail end of our democracy here. It has been said before that Democracy is doomed once the people find out they can vote themselves money. America’s contribution to that was voting money through inter generational theft. I do fully expect to see an eventual bankrupting of this nation due to entitlement programs, what will come after that is anyone’s guess. Thankfully though I do have a taste for Chinese food.

      >You are actually going to end up screwing yourself if you have your way, especially if your engineering career should come to a premature end.

      The way I see it, SS guarantees me a virtually negative return. This is especially so being self employed, where I theoretically pay both sides ( we all do in fact, it is just more apparent to me as I physically write out the check for both ). The only way I could do worse with investing in index funds as an example, would be for the stock market to go into a long term crash, such as in the depression. Anyone who thinks that SS benefits will persist under such conditions is fooling themselves I think.

      >I’m somewhat impressed by your devotion to private schools. In choosing BU though you chose an overpriced, overrated place to get in debt for.

      Private schools have stood me and mine very well. Frankly the education is superior, this is why most public school teacher in NY send their kids to private schools, as do most politicians.

      I frankly did feel BU was probably somewhat overpriced, but engineering schools in a city environment are infrequent, and often expensive. I don’t know what you base your “overrated” comment on, as at the undergraduate level, BU is quite good in engineering. My other option was RPI, in Troy NY. This was a much higher rated engineering school, and for which I was offered a scholarship. I was prohibited from attending however as my Uncle went there and my parents felt he did not turn out well.

      >And do you not owe something for inheriting the country into which you were born?

      Of course I do. This does not translate into sacrificing my future and my kids to bestow lavish benefits on a single generation. I look at it this way. If I owe my country then certainly my parents generation did as well as those before them. However, when my parents were coming into the work force in the late 50’s, 60’s and 70’s, people over 65 were the poorest demographic by age. My parents and previous generations hadn’t exactly done a lot for them. Once the great society programs took hold, with ever increasing benefits, by the 80’s and 90’s, when I was coming into my working life, those over 65 constituted the richest demographic by age. In 1986, with TEFRA, Regan saw that the bill for SS had simply been passed along and thus increased taxes. The great society programs helped older people and I will certainly not deny that. They did it, and continue to do it through wealth transfer, as all social programs do. My problem is bankrupting future generations simply to pay benefits far beyond what they put in (my father has gleefully run the numbers on this and notifies me with annoying regularity of SS’s actuarial future) for the current one. They simply did not put in anywhere near what current workers put in and are reaping quite a profit. I am simply asking them to accept the same returns as they are asking their children and future generations to accept, and that which their parents also accepted ( through SS being set with a retirement age past the life expectancy ). I see nothing morally wrong with that.

      >There are still plenty of people around living off of Social Security and Medicare who were the people who saved civilization, in WWII and Korea and the Cold War and Vietnam.

      Yes, quite true. Whenever I do become aware of someone I am speaking with being a veteran, I do thank them. I actually do have strong belief in the bumper sticker that says “Like your freedom? thank a veteran”

      My corollary to that would be a bumper sticker that reads “Like your SS? Thank your grandkids for their sacrifice”

      People might not like to face that fact, but its true. One generation thinking it is entitled to another’s money doesn’t cut it with me, and it sure doesn’t cut it with me when accompanied by any self righteous cane waving about Vietnam or Korea. Every generation has wars sad to say. You think current retirees are going to bow down to some kid waving a skateboard in their face and yammering on about Iraq? That’s about as far as Vietnam and Korea get me. If you are a veteran, thank you for your service, I and our nation are indebted to you. Do not, however, think your sacrifice as a veteran is unique to your generation, as that sullies the contributions of all veterans.

      >They were also the ones who created a world with a lot of demand for EE majors and a high payoff for that kind of work.

      I created my own job, always have, always will. Until I see some sort of halo around a previous generations head showing me they are the creator, I’m not going to accord them a whole lot of status as world creators. I have never been employed as an Electrical Engineer, my only interest in the field was the discipline involved in getting what is the hardest degree to attain as an undergraduate. Once I attained that I had no more use for it as I felt that discipline had been instilled, and after that, any goal would seem far easier. That has been true, for me, to a fairly great extent.

      >I still think you probably had it better than your parents, certainly better than most of the grandparents of people your age.

      Of course I do. This is unremarkable and has been the path for most civilizations. This does not translate into any sort of logical leap that justifies one generation taking from the next, whether I do it, or my parents do. That’s why I would like an end to social security and a system, private or otherwise, where one generation pays for its own retirement.

      • dean

        Interesting (not the narcissistic part…but the rest).

        EE, the cartoon was about the “greatest generation.” It was probably done as a counterpoint to the Brokaw series. My own take is they are leaving us a mixed legacy, as we are going to leave our heirs, and all those after us. Humans are an imperfect lot.

        Rupert…..I’d like to offer an alternative view. It seems you are mixing up the “Great Society,” a Johnson program, with the New Deal, which was much earlier. Social Security, Unemployment Insurance, the Federalization of welfare, and a huge public works investment were put in place NOT by the greatest generation (my parents,) but by THEIR parents….the Roosevelt-Truman-Eisenhour cohort. They experienced the collapse of an unregulated free market, feared that communism was a too attractive alternative, and opted for a mixed system with a strong social safety net.

        They also taxed the heck out of the rich, establish a minium wage, and made it much easier to form unions. I would say that was the group that actually defeated Hitler and Tojo by the way, at least if generals count for something.

        The greatest generation was the beneficiary. They had their college paid for, much improved public schools, good paying union jobs, government insured mortgages, and a government built highway system that allowed them to move out of dirty, crowded cities and into the burbs.

        There was a limited expansion of the New Deal in the 60s by Johnson, mostly in the form of Medicare, but not much else that survived the Reagan reaction.

        The late 40s-70s were our most prosperous era as a nation. The Great Depression opened the door for the new Deal, which was a late adoption of the platform of the Progressives from 2 decades earlier. (By the way, prior to the New Deal 11 states had already adopted old age pensions, while others created workers comp.) The American middle class expanded dramatically in the 50s. The rich actually got poorer, and the economy boomed. Taxes on upper incomes rose to 90%, 45% on corporate profits, and up to 77% on the wealthiest estates.

        Blue collar workers did great. Competition from overseas was minimal, immigration had slowed to a trickle, and unions were ascendent. In 1930 only 10% of non-ag workers were in unions. In 1950 it was over 30%.

        As we have rolled back these gains and de-industrialized, we have seen a gradual increase in income inequality to the point where we have rejoined the Hoover era. Our elders have supported cuts to welfare for the poor, but have retained their own benefits. It has now gottern to the point where very low income workers are transferring income UP the ladder to well off retired seniors…the same ones who have the union pensions, who bought their homes on the GI Bill, and so forth. And it is getting worse. New hires at places like John Deere make 1/2 what the older workers make for exactly the same work. Why? The retirees and near retirees sold out the youngers to preserve their own pensions. And college kids today? They are graduating with $50-100,000 debts, and are met with a way over inflated housing market that shuts them out. I disagree with both of you that they are going to be materially better off than the previous generation. I don’t even see how that is possible, let alone probable. If you look at the long view of history, you will see there is no rule that each generation is better off. Past civilizations have over-shot their capabilities on many occasions.

        So Rupert…you are right about the inter-generational inequity we are experiencing. But the story is way more complex than Social Security and Medicare. And it won’t be solved by dissolving the present systems and cutting everyone loose. Quite the opposite. We are either going to solve this as a nation or we are going to continue to sink as a nation.

        • Rupert in Springfield

          Zoot Allores – but of course! I forget myself, silly silly me.

          I am so stupid I had no idea SS came to be under The New Deal, and Medicare under “The Great Society”. How inane of me, and clearly somewhere in there I must have said SS was established under “The Great Society” as I am sure Dean could not be setting up a straw man argument so as to justify a pedantic tone.

          My apologies for being so so silly and completely not understanding who enacted SS. Thank you so very much for pointing it out Dean!

          Sorry, but I told you I wasn’t going to engage you. Conversation with someone who will excuse anything by his party, and condemn anything by the other and insist on juvenile tactics such as arguing straw man points like this you did with the New Deal/Great Society conflation is simply a waste of my time.

  • Anonymous

    Rupert said above……”Once the *great society* programs took hold, with ever increasing benefits, by the 80’s and 90’s, when I was coming into my working life, those over 65 constituted the richest demographic by age. In 1986, with TEFRA, Regan saw that the bill for SS had simply been passed along and thus increased taxes. The *great society programs* helped older people and I will certainly not deny that. They did it, and continue to do it through wealth transfer, as all social programs do.”

    Since the topic was Social Security, and you didn’t say anything about the New Deal, I mistakingly thought maybe they skipped that part in your private school education. Please accept my apology for the misundersgtanding.

    And hey…for the record I don’t need to do anything to justify my pedantic tone. I can be pedantic for any reason I want. What is pedantic?

    (You do realize that you just recalled the character in Monty Python’s “Argument Clinic.” He sat back with his arms folded across his chest and said “i’m not going to argue with you.” Of course, that in itself was an argument, so he violated his principle, which his adversary immediately pointed out. You Rupert, having just “engaged me,” have violated your non-engagement vow. One could argue that means no one should believe anything that you say. But I won’t argue that. It would be a logical fallacy.

    • dean

      Ooops…not anonymous above. Actually Dean. So do not re-engage by accident.

      • Rupert in Springfield

        And how astonishing that the quote shows nothing of the sort of confusion Dean ascribes to me. It is a simple paragraph establishing a chronology of events, showing how my parents generation didn’t exactly put themselves out for their parents, so the idea that they are owed a whole hell of a lot isn’t all that persuasive. This was in response to a point by EE, a subtlety that was obviously lost.

        Nice try at a straw man argument Dean, but when you set it up like that, and demonstrate little but poor reading skills, and a lack of knowledge of the word “pedantic”, combined with some sort of weird jealousy of my scholing it is quite funny and I do have to respond.

        Keep flailing around buddy. While you bring a smile to my face, you bring absolute vacuity to an argument.

        • Rupert in Springfield

          And yes, the typo is for you Dean, gotta throw you a bone somewhere.

    • eagle eye

      dean — how pedantic of you actually to quote him!

      • dean

        EE…I finally had to go and look it up. It meant something different than I thought it did. Dang my public school education anyway.

        Rupert…I was not ascribing the confusion to you. I was merely (I know that sounds pedantic, but I can’t help myself) pointing out why I was confused. Your chronology of events left out an important historic event, the Great Depression, which spawned the creation of a Federal social safety net where there had previously been only a local, state, and private charity net, which proved to be inadequate to the scale of the problem.

        But now we are all so far off topic. What was this all about? Oh yes… inter-generational equity and reform of Social Security.

        To sum up….I’m for honoring our present commitments, making adjustments to keep the system solvent for 25 years (which probably includes raising the present upper cap on contributions,) initiating a new personal retirement savings program (hey…I’m a liberal,) and if this proves out over time, dialing back SSI to a lesser level, possibly all the way down to a true “insurance” program that bails out the few who fall through all the cracks.

        On Medicare/Medicaid…its a much more urgent, and much tougher nut that probably has to be dealt with in the context of a wider health insurance reform. And we are rapidly running out of time since it is poised to break the bank. And neither political party can solve this one on their own, because it will prove to be too risky in terms of the elder vote.

  • Rupert in Sprindfield

    Yay, we can all agree on reforming SS.

    Ok, that’s a pretty reasoned response. Frankly I think that the basic equation comes down to the fact that these programs are unsustainable. Everyone seems to agree on that.

    I see two choices, means test all of them ( SS and Medicare, Medicaid remains for the indigent ), or cut benefits right now and for future generations or a combination of the two.

    Even if one accepts the premise, and I don’t, that if government run health care there would be savings, those savings aren’t going to be enough to bail out the red ink maintaining these programs in their current state will require. Anyone who argues the savings would be that substantial exited real world a long time ago.

    For myself, I would be more than happy to flush all of my SS/Medicare contributions thus far ( at age 46, my sign Scorpio, turn ons….. ) down the toilet right now in exchange for the following – cut my payment in half, to 6%. I continue to pay 6% for a benefit I will never see to support current retirees. The remaining 6% I get to invest on my own to provide for myself.

    by the way Dean – Glad you looked up Pedantic, its actually a pretty good word isn’t it?

    • dean

      Fits me to a T.

      • dean

        Rupert…you say you “see two choices.” I assume you mean these are the only 2 choices that you would support. Clearly there are more choices available, i.e. raising the current cap,raising the retirement age, raising taxes onhigher income SSI recipients…and so forth.

        • Rupert in Springfield

          Sure, we could raise the current cap. I am not entirely sure how this worked in the past though. Would benefits go up with it or no?

          Previously, round numbers, wages were taxed up until $60k and then not at all after that, this was fair because benefits did not increase after that either. Clinton raised the limit to something like $90k. I am not sure if benefits also increased or if they remained at the $60k level. I’m not entirely sure raising the cap, combined with raising benefits accomplishes anything in terms of savings. It might. I would not support in any way raising the cap without raising benefits as I frankly don’t think that continued increase of the share of taxes paid by top wage earners is sustainable. The top wage earners pay pretty much all the taxes as it is, there is only so far that sort of thing will go. I also think it is fundamentally wrong, in the moral sense.

          Raising the retirement age – Id support this, especially if it were done immediately and not gradually, which allows more tinkering. If the retirement age were raised past life expectancy, as SS was originally conceived, then possibly it could get back to what it essentially was at the outset, a revenue gathering program. This might be a good idea for all these programs ( Medicare etc. ). I doubt raising the retirement age could be done retroactively, so this is a long term solution but that doesn’t make it invalid. Current payees into the system would likely never see benefits, thus revenues now could be more justifiably used to pay off those currently retired. The system (here I am talking about SS and Medicare) would then be somewhat solvent and essentially be used to to pay off current retirees comparatively lavish benefits, with current workers getting nothing as most would be dead before they were eligible. This would avoid a lot of cane waving about how ungrateful the current generation is, and likely result in an ending of the system as people would rapidly figure out they will likely never collect. While there would be resentment among current workers, with the ending of these programs other far more attractive retirement options would open up ( people would be free to invest on there own, as they would no longer be paying into these programs ). Frankly I think this would be more palatable than most might think as we are currently in a trend of massive widespread investment in the stock market by average Americans. It would take little to make most Americans realize that by investing a fraction of what they pay into SS, they could retire far more handsomely.

          Raising taxes on upper income recipients? No, I don’t support that, because that is somewhat circular. Why hand out benefits only to tax them back? Why not simply means test the program in the first place and avoid the round trip of the money? This would be less cumbersome. Although it does constitute yet more reliance on upper income wage earners, I support it because it also would accomplish the goal of making people more aware that all these entitlements are simply welfare, and thus lower support for them.

          In short, I would support just about anything that would accomplish a psychological shift in people away from voting themselves money, the doom of Democracy as others have said before. Anything that ends the idea of taking money from a future generation to pay for the non emergency needs of the current one is a good thing as far as I am concerned.

  • sandy

    How about a Social Security Lottery ?

  • Sandy

    How about this lottery giving better odds, “to help stimulate that economy”…. how about putting slot machines out that are for social security and medicare…how about giving people choices of where they want their lottery dollars going ?

    How about checking on where the lottery dollars are going that are supposed to be supporting our schools…..

    it seems the lottery dollars that went for fish and wildlife are doing good… they went from being in the red to being able to buy up extra properites…(good or bad)

    If Lottery is working for schools and fish and wildlife, it can work for more programs. Its allready set up….

    .. social security is a good and needed program…it scares me about investments…always seems there is slight of hand when investments are concerned…it always seems that when monenies are approprated there are more hands out from the dispatchers than the getters, the ones who need it…

    like the tobacco awards…who got that money? why wasn’t that used for health care… it seems to me that a person running for office that wanted to clean up all the corruption in the different agencies would save enough to support some needed programs…but then maybe iam just cynical.