Comments on: Another Dialog on Social Security

By: Bill Woessner

Bill Woessner — Mon, 30 Nov -0001 00:00:00 +0000

If Social Security is a safety net, why does Warren Buffett collect a Social Security check every month? If Social Security is a safety net, why do you have to pay in to Social Security before you collect? That doesn’t sound like a safety net to me. It sounds like a defined contribution plan.

But let’s be honest: Social Security isn’t about helping the poor; it’s about buying votes. The poor, by and large, don’t vote so politicians don’t waste their time on them. Instead, they target union workers and the middle class – people who think Social Security actually benefits them when, in fact, it’s robbing them blind.

By: Amanda

Amanda — Mon, 30 Nov -0001 00:00:00 +0000

The problem with saving for retirement is that no one can possibly understand how much their health care will cost them in old age until they get there. Making revisions to Social Security without taking a look at the obvious flaws in the current Medicare benefits is like (pardon the analogy) ripping a hangnail from a gangrenous toe.

My husband's grandparents have lived frugally on a modest income for their entire lives. Now they're millions of dollars in debt after just a year of ICU and surgery, for only his grandfather. These are people who survived the Great Depression with a savings account. The cost of health care is ridiculous, unless you settle for subpar care in a government-funded facility. Believe me, we paid enough when Neilen was born that I understood why some of my coworkers had committed fraud to qualify for Medicaid.

A program designed to help our older population to live more comfortably (or just to live at all)? This should be a non-issue, in my humble opinion. These are the people who powdered our bottoms. The least we can do is contribute a portion of our paychecks to buy their medication.

(I've grown addicted to your blog, as you can see, haha. How are your wife and girls?)

By: Anonymous

Anonymous — Mon, 30 Nov -0001 00:00:00 +0000

Bill’s comments above include one valid point and then some silly vitriol. It is a valid point that there is no reason for Warren Buffett to be collecting a Social Security check. I’m in favor of a means test to limit benefits to those that need it.

By: Bill Woessner

Bill Woessner — Mon, 30 Nov -0001 00:00:00 +0000

It's not "silly vitriol". As things currently stand, the middle class stands to gain absolutely nothing from Social Security. With the 12.4% tax rate, the 36% replacement rate and the retirement age of 67, the middle class can expect to pay more in to Social Security than they get out. So what's the point?

At this point, Social Security is pretty much a guaranteed losing proposition. Everyone would be better off taking their FICA dollars and sticking them in a high-yield, FDIC-insured savings account. At least then, you wouldn't be guaranteed a negative rate of return.

By: Anonymous

Anonymous — Mon, 30 Nov -0001 00:00:00 +0000

Bill, your comments are exactly correct – if Social Security was ment to be an IRA. It’s not. The goal is not for middle class workers to get more out of it than they paid in. It’s for the lowest income workers to be able to live in retirement with just a bit of security and dignitiy. As I mentioned in a previous blog entry, Social Security is an insurance program, and like fire insurance on our home, we should all hope that we get a "negative rate of return" on the premiums. That’s success.

By: Bill Woessner

Bill Woessner — Mon, 30 Nov -0001 00:00:00 +0000

Not so, Chris. The middle class (and indeed everyone) used to get a decent return out of Social Security. That was back when the ratio of workers to retirees was high and the tax was low. Sadly for the middle class, those days are gone.

So what you're basically saying is that Social Security is a welfare program and the middle class has the dubious honor of paying for it. No wonder the middle class is having such a tough time. We tax the crap out of them and then give them nothing in return.

By: Anonymous

Anonymous — Mon, 30 Nov -0001 00:00:00 +0000

You think it is tough being middle class? Try being poor.

By: Bill Woessner

Bill Woessner — Mon, 30 Nov -0001 00:00:00 +0000

I have no problem with helping the poor. I just don't think the middle class should be taxed to the hilt to do so. Currently, the United States spends about $1.5 trillion on social programs. Despite this massive spending, our success rate is only about 45%. Of the 55 million people living in poverty without government assistance, 30 million remain in poverty after the myriad of government programs.

So that really makes me wonder... where is all the money going? We're spending almost $28K per person below the poverty line. Given that the poverty line is $10K, we should be able to elevate EVERYONE above the poverty line. In fact, we should be able to do so with significantly LESS than $1.5 trillion: $562 billion according to my calculation.

Yes, the poor have it rough. But let's be honest. Social Security doesn't help the poor. It taxes them just as much as it taxes the middle class. They pay the same 15.3% as everyone else. If they're lucky enough to make it to 62, they might get some of that money back. In the mean time, we have to maintain the Ponzi scheme that is Social Security. After all, Warren Buffett is expecting his check.

By: Sunny Kalsi

Sunny Kalsi — Mon, 30 Nov -0001 00:00:00 +0000

I’m so glad I live in Australia.Also, you guys are talking about a bunch of issues at once: Welfare, pension, and health care. You need all three.Also tax your rich more.