The GOP have been trying to gut or privatize Social Security ever since Franklin D. Roosevelt put it into place in 1935. They refer to it alternatively as a Ponzi scheme, or as socialism…
“MY” representatives are installed Puppets working with Fascist Billionaires Charles KKKoch, Joe Ricketts and the Peed Family. As Libertarians, they are dedicated to robbing the people, destroying social systems, health systems, education and infrastructure while avoiding taxes. Absolutely greedy—Look no further than Chile in the 1970’s to see what Fascist Billionaires have in mind for the rest of us. No, “my” representatives are puppets and they are happy to hitch their wagons to the Uber wealthy, rather than to do anything moral, decent or patriotic.
OT: I haven't yet read the article, but will. I just have to blurt this out. I watched the SOTU speech last night and I am enthused, finally Biden breaks out of his chains, and he sure shut up the dissenting Republicans without losing it.. bravo. And that MTG, what an ass, but she will get reelected her district is a bunch of rich white racists as bonkers as she is.
The GOP has been obstructing any progress for the working man going back to the early 1900s or farther.
The GOP just wants a cut of the action, like the mob does. Privatize social security, or else abolish it. The bankers will look after the social security fund /s.
There is money in looting a government and that's where the GOP comes in. We need strong laws protecting democracy with swift and just punishment!
Another off topic comment, but this one is also a question.
I get a lot of newsletters, especially from Never Trumpers, but one refrain is common, Polls say Biden is trailing Trump.
That causes me a problem. I don't believe polls, because polls are funded by organizations which have their own agenda, and that agenda is a maximum positive quarterly profit and earnings report.
Media is of the same, after all it is corporate.
The organizations are funded by private equity funds, investment bankers, and corporations who all have a vested interest in cutting taxes, labor expenses, and making as much profit as they can, while delivering minimal quality and services.
The point is that because of the profit motive the polls and the media can't be trusted.
A prime example is this. The polls ask, in various ways, whom do you view favorabbly or unfavorably, and Biden comes out with unfavorable ratings more than Trump.
The question should be, and I want to see a poll that asks this question, and it is the only important question (but not for the media and pollsters whose livelihood relies on the horse race)
Who will you vote for in November?
Biden or Trump.
That is the only question that is relevant that is the only question that should be asked.
I've had an unfavorable opinion of Biden, for his bipartisanship and timidity , but will crawl over broken glass to vote for him, and I am not alone, hence the polls are pure unadulterated bullshit and are to be ignored.
The only poll that counts is Nov 5th.
The powers that be use polls to fashion attitudes and opinions and create self fulling prophecies.
The money, the CEO's, millionaires and billionaires (the Plutocrats) are almost to a person Trump Humpers, not because of his social policies, but because he promises to cut (eliminate) all taxes for the wealthy and corporations and deregulate industry (financial and manufacturing) that they can rape and ruin the world and society without any fear.
I wonder whether any Republican members of Congress will support the legislation, even when their friends and family desperately need it. As of today, the Catfood commission, which Thom has discussed previously, is poised to recommend cuts to all benefits.
Social Security is social insurance and everyone who is fully and currently insured has the equivalent of a million dollar policy covering the entire family. There are two funds, the retirement fund and the disability fund. As of today, the funds are still solvent, although it's estimated that the retirement fund will "default" in 2033. Republicans tried to kill the disability fund several times. I've written about it, Save the Social Security Disability Trust Fund! and Reduce SSI Exposure to the General Fund, 36 J. Nat’l Ass’n Admin. L. Judiciary 142 (2016). https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1601&context=naalj
I've also written about the retirement fund. The main problem is that baby boomers had huge populations that will expend expenses until the apex in 2033, when population should return to normal. Once upon a time, my theory was that if the rate of contribution were supplemented, using charitable deductions, the apex could be exceeded.
Here's a paper I wrote for lawyers, December 01, 2011 FINANCIAL PLANNING
Social Security—Maybe Charity Should Begin at Home
By Daniel F. Solomon
For most of its history, Social Security was a terrific bargain: our parents and grandparents most probably received significantly more benefits than they paid into the Social Security Trust Fund. The trust fund comprises the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds (OASDI, collectively).
In most cases, because our family units could rely on these benefits, they were able to enjoy enough financial independence to send people like us to school so that we could become lawyers—productive and, in some cases, wealthy, members of society. For 75 years, the Social Security Trust Fund has helped enable American soci- ety to achieve far beyond the aspirations of its founders, ultimately providing more than subsistence to retirees by also protecting widows, orphans, and disabled people. The dignity provided to needy beneficiaries surely far outweighs the economic value of the funds.
However, financial experts have long predicted a future insolvency of the funds. A majority of Americans have invested in the funds, recognize their social utility, and do not want to burden their heirs. Although there have been legislative attempts to “fix” the system, there is no consensus how to do it. The Congressional Research Service reported:
For example, for workers who earned average wages and retired in 1980 at age 65, it took 2.8 years to recover the value of the retirement portion of the combined employee and employer shares of their Social Security taxes plus interest. For their counterparts who retired at age 65 in 2002, it will take 16.9 years. For those retiring in 2020, it will take 20.9 years.
Geoffrey Kollmann and Dawn Nuschler, “Social Security Reform” (October 2002).
The National Commission on Social Security Reform (informally known as the “Greenspan Commission” after its chairman) was appointed by the Congress and President Ronald Reagan in 1981 in response to a short-term financing crisis that Social Security faced at that time. Estimates were that the OASI Trust Fund would run out of money possibly as early as August 1983. Congress rendered a compromise that extended the retirement age from 65 to 67, through a deal that raised payroll taxes and trimmed benefits enough to keep Social Security solvent. See Jackie Calmes, “Political Memo: The Bipartisan Panel: Did It Really Work?” New York Times, January 18, 2010. However, the legislation addressed only the immediate problem and did not address the long-term viability of the fund. See also Rudolph G. Penner, “The Greenspan Commission and the Social Security Reforms of 1983,” in Triumphs and Tragedies of the Modern Presidency, David Abshire, Editor. Washington: Center for the Study of the Presidency, pp. 129–31.
The George W. Bush administration commission deliberated on the issue and then called for a transition to a combination of a government-funded program and personal accounts (“individual” or “private accounts”) through partial privatization of the system.
President Barack Obama reportedly strongly opposes privatization or raising the retirement age but supports raising the cap on the payroll tax ($106,800 in 2009) to help fund the program. He has appointed a National Commission on Fiscal Responsibility and Reform, which is to report and offer another fix.
Current estimates predict that payroll taxes will only cover 78% of the scheduled payout amounts after 2037. This declines to 75% by 2084. 2010 OASDI Trust- ees Report, Figure II.D2, www.ssa.gov/OACT/TR/2010/ trTOC.html.
Although the congressional plan was to ensure solvency through Federal Insurance Contributions Act (FICA) tax, there is a private means to help: to also consider the humanitarian and charitable nature of the Social Security Administration (SSA), which has been possible since a legislative fix in 1972. Before then, bequests naming Social Security or a trust fund as a beneficiary could not be accepted, which caused problems in administration of some estates. Money gifts or bequests may be accepted for deposit by the managing trustee of the OASI and DI funds. Section 170(c)(l) of the Internal Revenue Code lists the U.S. government among the educational or charitable organizations to which donations are acceptable. Gifts must be unconditional, except that the donor may designate to which fund the gift should be donated. If no fund is designated, the gift is credited to the OASI Trust Fund.
However, SSA has not publicized its charitable persona. Although the agency has received some gifts and bequests, they have been insignificant and not given consideration in a possible fix. The concept has been so unimportant to the experts that the Annual Statistical Supplement to the Social Security Bulletin does not specify how much the administration has received in gifts and bequests. Total revenue from gifts to the trust funds has been quite small. From 1974 to 1979 the most received in any one year was $91,949.88. During that period, the average annual amount was only $39,847. In 1980, almost two-thirds of the gifts were less than $100. The median gift size was $50. One person, for example, donated $13.11. She arrived at that amount by applying 5.85% (the employee tax rate then in effect) to her benefit amount and donated it to help “‘shore up’ the sagging, dwindling Social Security fund.” However, the 2010 Social Security Trustees Report lists them as about $98,000 (www.ssa.gov/OACT/TR/2010/III_ cyoper.html#2). Compared to many other charities, this is a paltry amount.
Apparently, SSA has never done a feasibility study nor marketing research to determine how an aggressive campaign could raise funds to support Social Security, or how gifts and bequests could reduce the current estimates of impending doom. According to some estimates total deductions taken for all charities next year would be $413.5 billion. Estimates for fiscal year 2011 are that SSA will spend $730 billion. That amount is already covered through “contributions” (taxes), but it is reasonable that charitable contributions to the trust fund could significantly lessen taxpayer exposure for impending doom, if not return the fund to solvency.
As lawyers, we have the capacity to remind our families, our clients, and the public at large that there is a way to contribute to help endow future generations in the pursuit of the same kind of social stability that Social Security provided to our parents and grandparents.
We have a tiny island of Democrats within a gerrymandered sewer. . . This year, we do have two Dem. Candidates, great ones, facing biased MSM and an opposition funded by billionaires.
Trump’s campaign ran commercials against Haley, saying she would end Social Security and that he would save it. A complete lie, but I’m sure many fell for it.
The Repubs congressional members all want to get rid of Social Security because their ideology is against democratic socialism better known as regulated capitalism. Hard core no soul capitalism is all they believe in and to hell with the people it crushes. They simply do not believe in win win wins.
The elites who have been supported by both parties want hungry workers who will work for the lowest possible wage and require the least support in terms of schools and infrastructure and services. It was Bill Clinton with his welfare cuts that put an additional 1 million children into poverty. It was Clinton that doubled the prison population in the USA. It was Bill Clinton that pushed for NAFTA that made it easy for companies to move manufacturing jobs out of the country. It was Bill Clinton that deregulated the banks and commodity exchanges that led to the 2007 financial crisis and Larry Summers increasing the federal debt to bail out the banks under Obama to the tune of $7 trillion.
Sorry for the length of this, BUT there are many, MANY reasons why privatizing Social Security will never work, and we all need to be aware of them and able to talk about them...
There are numerous reasons why privatizing Social Security is doomed to catastrophic failure.
Keep in mind, we’re a nation with nearly 340 Million people, all of whom must be served (or offered service) from the system. Here my high level and abbreviated observations, and some calculations that for me is more than enough to confirm that privatized retirement systems of any kind will Never work. Any of these points can be more deeply looked into and expanded upon, but there’s not enough time in my day to lay out all the details.
A.. There is not enough wealth in America to privative it…
There is far too little wealth in:
Stock Market valuation ($50T market cap valuation - it’s not Real Money!)
Bonds ($45T)
Savings (< $1T)
because...
B.. Take a closer look at the largest of those investment pools - stock market wealth (capitalization or value), with the top 10% of Americans owning 92% of stock market wealth.
That leaves just $4 Trillion to be divided amongst 300 Million people. Without allocating it by demographics for all of us, this simplified picture here is grim. That leaves just $13,333 Total - Per Individual, whereas each retiree gets on average $20,000 EACH year now in Social Security benefits. If that $4T doubles to $8T, that's only $26,666 total. Remember that years from now retirees will need much more.
C.. Forcing the input of $ trillions into and out of stocks, bonds and savings will put massive and new pressures on capital markets, causing wild swings of prices and valuations, causing enormous volatility - and surges and crashes that we’ve not seen before. All surges and crashes will impact retirement portfolios, be they managed by individuals or big banks.
D.. Each retiree needs nearly $500K in a personal drawdown annuity to earn $20K-$30K/yr in retirement, which eventually goes to $0 and leaves them broke. America's savings and investments are nowhere near sufficient to grow into even this size nest egg.
E.. Wages are not high enough for individuals to each save a nest egg of $500K.
To save 10% of your income over 30 years to build $500,000, you’ll need to be earning over $100,000 Per Year for 30 years. And while needing to earn annual interest that can never go below 3.4%. We are nowhere near doing that! Again, wages are nowhere near what’s required for all of us to do that.
F.. Saving 10% of workers’ salaries EACH year by putting it into stocks, bonds and bank CDs takes a huge amount of money OUT of the consumer and industrial economies, reducing economic growth, harming companies and workers. This money will be sequestered into only investment instruments for 25-45 years! The harm to the economy has not been studied. In the current system, the 6.2% from payroll taxes and 6.2% from employer contributions is effectively being funneled right back into the economy, providing for growth and stimulation.
G.. Wall Street will take a cut off the top of Each and Every dollar you have already earned for their profit and executive pay. There is no reason on earth for retirees to be forced to pay a percentage of their hard earned wages to banks and Wall Street.
H.. When Wall Street and Banks FAILS, as they always do, the Federal government will be forced to bail them out. Get ready for the Mother of All Bank and Wall Street Bailouts.
It will be bigger than anything America has ever seen.
I.. Stocks and bonds go down in value. When Wall Street loses your retirement, the Federal Government will need to do a massive multi-trillion dollar bailout of WS. And like the Wall Street and Big Bank Bailout of the Great Recession, they will take that money to pay their executives first.
For this we will need to get used to Wall Street becoming a retirement savings incinerator.
J.. The Employer Contribution will vanish immediately. Bye bye!
K.. in a privatized personal retirement system,it is ridiculous to require every individual to become a stock market analyst and broker, in direct competition with Wall Street. Why should Every Worker need to compete against Wall Street insiders, analysts and brokers? You’ll never have the inside information and immediate access to company performance data vs. Wall Street. Workers will be left holding the bag after Wall Street has already cashed in on stock market increases. You’ll never be on top of all the daily and hourly announcements that drive stock prices up and down - you’ll be at your day job!
L.. We already had privatized retirement accounts and systems for the first 150+ years in America. It was a catastrophic failure. Banks and corporations were never able to fund our citizens retirement, nor were individual citizens. Epic. Catastrophic. Failure. - Always.
Learn from the past. Social Security works spectacularly well, whereas private systems failed to work for all of us.
M.. A $500,000 nest egg will not be enough for retirees 30, 20, or even 10 years from now, as inflation will have eaten away the money you’ve been forced to give to the Big Banks. They will pay themselves profits long before they give you a Cost Of Living Increase.
N.. Federal Social Security has the ability to protect seniors when the cost of living goes up. SS can raise payments and revenues by an act of Congress. Private accounts and private systems have no such protection ability. Under privatization, as the cost of living increases, there are no cost of living increases of any kind. It’s problematic to allow or require private banks to measure inflation and pay for COLAs. Today, banks and bond issuers do not give inflation adjustments after you’ve bought a regular CD at a fixed rate. Banks and Wall Street will pay themselves first, like they do with Medicare Advantage.
O.. Having millions of workers buy FDIC insured CDs opens up massive risk to the Federal government if banks default. Workers will also demand the FDIC cover up to 1 million, whereas it’s just $250,000 now.
P.. Where is the demand for bank loans to come from when banks become bloated with millions of workers’ trillions in investment savings CDs? This would push interest rates lower, requiring workers to put in even more savings to make up for losses in interest paid to them.
Q.. It is a VERY bad idea to place everyone’s retirement security in the hands of the same brokerages and banks who gave us the Great Depression and Great Recession. Peoples’ retirement savings and investments were wiped out. The same people as taxpayers were then stuck with the bill as the Federal government had to spend $ trillions to bail out the offending banks and brokerages. Whereas the Social Security system is guaranteed by the Federal government.
There is Nothing guaranteed or secure about stocks and bonds.
Plus, corporate failures and interest rate declines will wipe out peoples’ investments.
R.. As Thom recently reminded us of the FDR and Truman era mantra, “Don’t Be A Sucker.”
Privatizers like Romney and Pence get air time to float their simple notion (shabby sales pitch) of “allowing an individual to X dollars that will grow into their retirement nestegg.”
Many people have heard how, “You can save $2000 per month tax deferred at 7.5% for 20 years and you’ll be a millionaire!”
Wow, That’s Exciting! But it’s for suckers. Most people can’t save that monthly amount, The 7.5% rate for 30 years won’t happen in any safe and secure investment, like Federally insured instruments. It MAY have happened for some period of time for those who made great stock market investments. But for reasons noted above, it won’t work as any kind of privatized retirement system. If everybody actually did this, we're needing to pump in and grow over time $300 Trillion in valuation.
The 25 wealthiest men in Germany made a deal with Hitler and the Nazi party leaders to support the party financially (as it was bankrupt) in return for Hitler banning workers unions. Their businesses took a portion of each worker's paycheck and gifted it to a slush fund controlled by the Nazi party leaders. Hitler rose to power with the support of these men and these men profited enormously while the Nazi were in power and were allowed to retain that wealth by the American administrators after the war.
The elites prefer is not desire a fascist state that makes democracy impossible at any level. It maximizes their profits and protects their wealth. The mistake Americans make is thinking that it is Republicans versus Democrats when it is actually the elites against everyone else.
"It makes no difference who you vote for - the two parties are really one party representing four percent of the people." - Gore Vidal
People who are trying to survive a day at a time with jobs like "door dashing" have no idea what is going on in Congress. I try, but I miss a lot. Our daily newspaper never even mentioned the State of the Union Address. I find out what's happening from some substacks like this one and some podcasts. It feels like the oligarchs are going to do what they're going to do no matter what the people want. We are on our way back to the middle ages.
Thank you! Every time I read you I dive deeper into catatonic state. Gonna open a bottle of prosecco. Maybe the bubbles will lift me in a higher mood. Mama miiiiiaaa
Same old, same old GOP BS year in and out. connive to steal the money we spent our lives paying into Social Security, by any of several shady means, and when the President calls them on it in public (SOTU), they're all shocked monkeys, full-fisted, locked in the cookie jar, "Not me, did not, nuhn-uhh".
Yeah, but ALL Republicans HAPPILY accept and cash their Social Security checks....
“MY” representatives are installed Puppets working with Fascist Billionaires Charles KKKoch, Joe Ricketts and the Peed Family. As Libertarians, they are dedicated to robbing the people, destroying social systems, health systems, education and infrastructure while avoiding taxes. Absolutely greedy—Look no further than Chile in the 1970’s to see what Fascist Billionaires have in mind for the rest of us. No, “my” representatives are puppets and they are happy to hitch their wagons to the Uber wealthy, rather than to do anything moral, decent or patriotic.
OT: I haven't yet read the article, but will. I just have to blurt this out. I watched the SOTU speech last night and I am enthused, finally Biden breaks out of his chains, and he sure shut up the dissenting Republicans without losing it.. bravo. And that MTG, what an ass, but she will get reelected her district is a bunch of rich white racists as bonkers as she is.
The GOP has been obstructing any progress for the working man going back to the early 1900s or farther.
The GOP just wants a cut of the action, like the mob does. Privatize social security, or else abolish it. The bankers will look after the social security fund /s.
There is money in looting a government and that's where the GOP comes in. We need strong laws protecting democracy with swift and just punishment!
Another off topic comment, but this one is also a question.
I get a lot of newsletters, especially from Never Trumpers, but one refrain is common, Polls say Biden is trailing Trump.
That causes me a problem. I don't believe polls, because polls are funded by organizations which have their own agenda, and that agenda is a maximum positive quarterly profit and earnings report.
Media is of the same, after all it is corporate.
The organizations are funded by private equity funds, investment bankers, and corporations who all have a vested interest in cutting taxes, labor expenses, and making as much profit as they can, while delivering minimal quality and services.
The point is that because of the profit motive the polls and the media can't be trusted.
A prime example is this. The polls ask, in various ways, whom do you view favorabbly or unfavorably, and Biden comes out with unfavorable ratings more than Trump.
The question should be, and I want to see a poll that asks this question, and it is the only important question (but not for the media and pollsters whose livelihood relies on the horse race)
Who will you vote for in November?
Biden or Trump.
That is the only question that is relevant that is the only question that should be asked.
I've had an unfavorable opinion of Biden, for his bipartisanship and timidity , but will crawl over broken glass to vote for him, and I am not alone, hence the polls are pure unadulterated bullshit and are to be ignored.
The only poll that counts is Nov 5th.
The powers that be use polls to fashion attitudes and opinions and create self fulling prophecies.
The money, the CEO's, millionaires and billionaires (the Plutocrats) are almost to a person Trump Humpers, not because of his social policies, but because he promises to cut (eliminate) all taxes for the wealthy and corporations and deregulate industry (financial and manufacturing) that they can rape and ruin the world and society without any fear.
I wonder whether any Republican members of Congress will support the legislation, even when their friends and family desperately need it. As of today, the Catfood commission, which Thom has discussed previously, is poised to recommend cuts to all benefits.
Social Security is social insurance and everyone who is fully and currently insured has the equivalent of a million dollar policy covering the entire family. There are two funds, the retirement fund and the disability fund. As of today, the funds are still solvent, although it's estimated that the retirement fund will "default" in 2033. Republicans tried to kill the disability fund several times. I've written about it, Save the Social Security Disability Trust Fund! and Reduce SSI Exposure to the General Fund, 36 J. Nat’l Ass’n Admin. L. Judiciary 142 (2016). https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1601&context=naalj
I've also written about the retirement fund. The main problem is that baby boomers had huge populations that will expend expenses until the apex in 2033, when population should return to normal. Once upon a time, my theory was that if the rate of contribution were supplemented, using charitable deductions, the apex could be exceeded.
Here's a paper I wrote for lawyers, December 01, 2011 FINANCIAL PLANNING
Social Security—Maybe Charity Should Begin at Home
By Daniel F. Solomon
For most of its history, Social Security was a terrific bargain: our parents and grandparents most probably received significantly more benefits than they paid into the Social Security Trust Fund. The trust fund comprises the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds (OASDI, collectively).
In most cases, because our family units could rely on these benefits, they were able to enjoy enough financial independence to send people like us to school so that we could become lawyers—productive and, in some cases, wealthy, members of society. For 75 years, the Social Security Trust Fund has helped enable American soci- ety to achieve far beyond the aspirations of its founders, ultimately providing more than subsistence to retirees by also protecting widows, orphans, and disabled people. The dignity provided to needy beneficiaries surely far outweighs the economic value of the funds.
However, financial experts have long predicted a future insolvency of the funds. A majority of Americans have invested in the funds, recognize their social utility, and do not want to burden their heirs. Although there have been legislative attempts to “fix” the system, there is no consensus how to do it. The Congressional Research Service reported:
For example, for workers who earned average wages and retired in 1980 at age 65, it took 2.8 years to recover the value of the retirement portion of the combined employee and employer shares of their Social Security taxes plus interest. For their counterparts who retired at age 65 in 2002, it will take 16.9 years. For those retiring in 2020, it will take 20.9 years.
Geoffrey Kollmann and Dawn Nuschler, “Social Security Reform” (October 2002).
The National Commission on Social Security Reform (informally known as the “Greenspan Commission” after its chairman) was appointed by the Congress and President Ronald Reagan in 1981 in response to a short-term financing crisis that Social Security faced at that time. Estimates were that the OASI Trust Fund would run out of money possibly as early as August 1983. Congress rendered a compromise that extended the retirement age from 65 to 67, through a deal that raised payroll taxes and trimmed benefits enough to keep Social Security solvent. See Jackie Calmes, “Political Memo: The Bipartisan Panel: Did It Really Work?” New York Times, January 18, 2010. However, the legislation addressed only the immediate problem and did not address the long-term viability of the fund. See also Rudolph G. Penner, “The Greenspan Commission and the Social Security Reforms of 1983,” in Triumphs and Tragedies of the Modern Presidency, David Abshire, Editor. Washington: Center for the Study of the Presidency, pp. 129–31.
The George W. Bush administration commission deliberated on the issue and then called for a transition to a combination of a government-funded program and personal accounts (“individual” or “private accounts”) through partial privatization of the system.
President Barack Obama reportedly strongly opposes privatization or raising the retirement age but supports raising the cap on the payroll tax ($106,800 in 2009) to help fund the program. He has appointed a National Commission on Fiscal Responsibility and Reform, which is to report and offer another fix.
Current estimates predict that payroll taxes will only cover 78% of the scheduled payout amounts after 2037. This declines to 75% by 2084. 2010 OASDI Trust- ees Report, Figure II.D2, www.ssa.gov/OACT/TR/2010/ trTOC.html.
Although the congressional plan was to ensure solvency through Federal Insurance Contributions Act (FICA) tax, there is a private means to help: to also consider the humanitarian and charitable nature of the Social Security Administration (SSA), which has been possible since a legislative fix in 1972. Before then, bequests naming Social Security or a trust fund as a beneficiary could not be accepted, which caused problems in administration of some estates. Money gifts or bequests may be accepted for deposit by the managing trustee of the OASI and DI funds. Section 170(c)(l) of the Internal Revenue Code lists the U.S. government among the educational or charitable organizations to which donations are acceptable. Gifts must be unconditional, except that the donor may designate to which fund the gift should be donated. If no fund is designated, the gift is credited to the OASI Trust Fund.
However, SSA has not publicized its charitable persona. Although the agency has received some gifts and bequests, they have been insignificant and not given consideration in a possible fix. The concept has been so unimportant to the experts that the Annual Statistical Supplement to the Social Security Bulletin does not specify how much the administration has received in gifts and bequests. Total revenue from gifts to the trust funds has been quite small. From 1974 to 1979 the most received in any one year was $91,949.88. During that period, the average annual amount was only $39,847. In 1980, almost two-thirds of the gifts were less than $100. The median gift size was $50. One person, for example, donated $13.11. She arrived at that amount by applying 5.85% (the employee tax rate then in effect) to her benefit amount and donated it to help “‘shore up’ the sagging, dwindling Social Security fund.” However, the 2010 Social Security Trustees Report lists them as about $98,000 (www.ssa.gov/OACT/TR/2010/III_ cyoper.html#2). Compared to many other charities, this is a paltry amount.
Apparently, SSA has never done a feasibility study nor marketing research to determine how an aggressive campaign could raise funds to support Social Security, or how gifts and bequests could reduce the current estimates of impending doom. According to some estimates total deductions taken for all charities next year would be $413.5 billion. Estimates for fiscal year 2011 are that SSA will spend $730 billion. That amount is already covered through “contributions” (taxes), but it is reasonable that charitable contributions to the trust fund could significantly lessen taxpayer exposure for impending doom, if not return the fund to solvency.
As lawyers, we have the capacity to remind our families, our clients, and the public at large that there is a way to contribute to help endow future generations in the pursuit of the same kind of social stability that Social Security provided to our parents and grandparents.
[signed me]
We have a tiny island of Democrats within a gerrymandered sewer. . . This year, we do have two Dem. Candidates, great ones, facing biased MSM and an opposition funded by billionaires.
Trump’s campaign ran commercials against Haley, saying she would end Social Security and that he would save it. A complete lie, but I’m sure many fell for it.
The Repubs congressional members all want to get rid of Social Security because their ideology is against democratic socialism better known as regulated capitalism. Hard core no soul capitalism is all they believe in and to hell with the people it crushes. They simply do not believe in win win wins.
The elites who have been supported by both parties want hungry workers who will work for the lowest possible wage and require the least support in terms of schools and infrastructure and services. It was Bill Clinton with his welfare cuts that put an additional 1 million children into poverty. It was Clinton that doubled the prison population in the USA. It was Bill Clinton that pushed for NAFTA that made it easy for companies to move manufacturing jobs out of the country. It was Bill Clinton that deregulated the banks and commodity exchanges that led to the 2007 financial crisis and Larry Summers increasing the federal debt to bail out the banks under Obama to the tune of $7 trillion.
Sorry for the length of this, BUT there are many, MANY reasons why privatizing Social Security will never work, and we all need to be aware of them and able to talk about them...
There are numerous reasons why privatizing Social Security is doomed to catastrophic failure.
Keep in mind, we’re a nation with nearly 340 Million people, all of whom must be served (or offered service) from the system. Here my high level and abbreviated observations, and some calculations that for me is more than enough to confirm that privatized retirement systems of any kind will Never work. Any of these points can be more deeply looked into and expanded upon, but there’s not enough time in my day to lay out all the details.
A.. There is not enough wealth in America to privative it…
There is far too little wealth in:
Stock Market valuation ($50T market cap valuation - it’s not Real Money!)
Bonds ($45T)
Savings (< $1T)
because...
B.. Take a closer look at the largest of those investment pools - stock market wealth (capitalization or value), with the top 10% of Americans owning 92% of stock market wealth.
That leaves just $4 Trillion to be divided amongst 300 Million people. Without allocating it by demographics for all of us, this simplified picture here is grim. That leaves just $13,333 Total - Per Individual, whereas each retiree gets on average $20,000 EACH year now in Social Security benefits. If that $4T doubles to $8T, that's only $26,666 total. Remember that years from now retirees will need much more.
(See Robert Reich’s video reels on wealth inequality, and the Federal Reserve source data, this link shows a bit more owned by the bottom 90% - the 300 million of us, https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:134;series:Corporate%20equities%20and%20mutual%20fund%20shares;demographic:networth;population:1,3,5,7,9;units:levels;range:2008.1,2023.2 )
C.. Forcing the input of $ trillions into and out of stocks, bonds and savings will put massive and new pressures on capital markets, causing wild swings of prices and valuations, causing enormous volatility - and surges and crashes that we’ve not seen before. All surges and crashes will impact retirement portfolios, be they managed by individuals or big banks.
D.. Each retiree needs nearly $500K in a personal drawdown annuity to earn $20K-$30K/yr in retirement, which eventually goes to $0 and leaves them broke. America's savings and investments are nowhere near sufficient to grow into even this size nest egg.
E.. Wages are not high enough for individuals to each save a nest egg of $500K.
To save 10% of your income over 30 years to build $500,000, you’ll need to be earning over $100,000 Per Year for 30 years. And while needing to earn annual interest that can never go below 3.4%. We are nowhere near doing that! Again, wages are nowhere near what’s required for all of us to do that.
F.. Saving 10% of workers’ salaries EACH year by putting it into stocks, bonds and bank CDs takes a huge amount of money OUT of the consumer and industrial economies, reducing economic growth, harming companies and workers. This money will be sequestered into only investment instruments for 25-45 years! The harm to the economy has not been studied. In the current system, the 6.2% from payroll taxes and 6.2% from employer contributions is effectively being funneled right back into the economy, providing for growth and stimulation.
G.. Wall Street will take a cut off the top of Each and Every dollar you have already earned for their profit and executive pay. There is no reason on earth for retirees to be forced to pay a percentage of their hard earned wages to banks and Wall Street.
H.. When Wall Street and Banks FAILS, as they always do, the Federal government will be forced to bail them out. Get ready for the Mother of All Bank and Wall Street Bailouts.
It will be bigger than anything America has ever seen.
I.. Stocks and bonds go down in value. When Wall Street loses your retirement, the Federal Government will need to do a massive multi-trillion dollar bailout of WS. And like the Wall Street and Big Bank Bailout of the Great Recession, they will take that money to pay their executives first.
For this we will need to get used to Wall Street becoming a retirement savings incinerator.
J.. The Employer Contribution will vanish immediately. Bye bye!
K.. in a privatized personal retirement system,it is ridiculous to require every individual to become a stock market analyst and broker, in direct competition with Wall Street. Why should Every Worker need to compete against Wall Street insiders, analysts and brokers? You’ll never have the inside information and immediate access to company performance data vs. Wall Street. Workers will be left holding the bag after Wall Street has already cashed in on stock market increases. You’ll never be on top of all the daily and hourly announcements that drive stock prices up and down - you’ll be at your day job!
L.. We already had privatized retirement accounts and systems for the first 150+ years in America. It was a catastrophic failure. Banks and corporations were never able to fund our citizens retirement, nor were individual citizens. Epic. Catastrophic. Failure. - Always.
Learn from the past. Social Security works spectacularly well, whereas private systems failed to work for all of us.
M.. A $500,000 nest egg will not be enough for retirees 30, 20, or even 10 years from now, as inflation will have eaten away the money you’ve been forced to give to the Big Banks. They will pay themselves profits long before they give you a Cost Of Living Increase.
N.. Federal Social Security has the ability to protect seniors when the cost of living goes up. SS can raise payments and revenues by an act of Congress. Private accounts and private systems have no such protection ability. Under privatization, as the cost of living increases, there are no cost of living increases of any kind. It’s problematic to allow or require private banks to measure inflation and pay for COLAs. Today, banks and bond issuers do not give inflation adjustments after you’ve bought a regular CD at a fixed rate. Banks and Wall Street will pay themselves first, like they do with Medicare Advantage.
O.. Having millions of workers buy FDIC insured CDs opens up massive risk to the Federal government if banks default. Workers will also demand the FDIC cover up to 1 million, whereas it’s just $250,000 now.
P.. Where is the demand for bank loans to come from when banks become bloated with millions of workers’ trillions in investment savings CDs? This would push interest rates lower, requiring workers to put in even more savings to make up for losses in interest paid to them.
Q.. It is a VERY bad idea to place everyone’s retirement security in the hands of the same brokerages and banks who gave us the Great Depression and Great Recession. Peoples’ retirement savings and investments were wiped out. The same people as taxpayers were then stuck with the bill as the Federal government had to spend $ trillions to bail out the offending banks and brokerages. Whereas the Social Security system is guaranteed by the Federal government.
There is Nothing guaranteed or secure about stocks and bonds.
Plus, corporate failures and interest rate declines will wipe out peoples’ investments.
R.. As Thom recently reminded us of the FDR and Truman era mantra, “Don’t Be A Sucker.”
Privatizers like Romney and Pence get air time to float their simple notion (shabby sales pitch) of “allowing an individual to X dollars that will grow into their retirement nestegg.”
Many people have heard how, “You can save $2000 per month tax deferred at 7.5% for 20 years and you’ll be a millionaire!”
Wow, That’s Exciting! But it’s for suckers. Most people can’t save that monthly amount, The 7.5% rate for 30 years won’t happen in any safe and secure investment, like Federally insured instruments. It MAY have happened for some period of time for those who made great stock market investments. But for reasons noted above, it won’t work as any kind of privatized retirement system. If everybody actually did this, we're needing to pump in and grow over time $300 Trillion in valuation.
The 25 wealthiest men in Germany made a deal with Hitler and the Nazi party leaders to support the party financially (as it was bankrupt) in return for Hitler banning workers unions. Their businesses took a portion of each worker's paycheck and gifted it to a slush fund controlled by the Nazi party leaders. Hitler rose to power with the support of these men and these men profited enormously while the Nazi were in power and were allowed to retain that wealth by the American administrators after the war.
The elites prefer is not desire a fascist state that makes democracy impossible at any level. It maximizes their profits and protects their wealth. The mistake Americans make is thinking that it is Republicans versus Democrats when it is actually the elites against everyone else.
"It makes no difference who you vote for - the two parties are really one party representing four percent of the people." - Gore Vidal
People who are trying to survive a day at a time with jobs like "door dashing" have no idea what is going on in Congress. I try, but I miss a lot. Our daily newspaper never even mentioned the State of the Union Address. I find out what's happening from some substacks like this one and some podcasts. It feels like the oligarchs are going to do what they're going to do no matter what the people want. We are on our way back to the middle ages.
Thank you! Every time I read you I dive deeper into catatonic state. Gonna open a bottle of prosecco. Maybe the bubbles will lift me in a higher mood. Mama miiiiiaaa
I cannot share these articles to my facebook! Used to be easy, now nothing goes through. Any help?
Same old, same old GOP BS year in and out. connive to steal the money we spent our lives paying into Social Security, by any of several shady means, and when the President calls them on it in public (SOTU), they're all shocked monkeys, full-fisted, locked in the cookie jar, "Not me, did not, nuhn-uhh".