Interest of the State: Realities and Fallacies of Social Security

Some very interesting reading on Social Security propaganda: Realities and Fallacies of Social Security.

One of the fallacies most pertinent to some of my recent posting on the topic is #3 on the list:

“Fact #3:” Social Security provides a foundation of retirement protection for nearly every American, and its benefits are not means-tested.”

Reality: Social Security provides a foundation of dependency.

According to the center, Social Security “encourages private pensions and personal saving because it isn’t means-tested — in other words, it doesn’t reduce or deny benefits to people if their current income or assets exceed a certain level.” This is far from the truth. Only 10% of the working population have privately held saving accounts, leaving 90% of the workforce with Social Security pensions as their only backup. As discussed before these benefits are subject to change by the swipe of a pen. Thus, Social Security is the only means necessary for most Americans of all income brackets.

I don't know the source of the numbers the author used, but whether they're accurate or not, the important point is that Social Security is not something that one can depend on, but many people do depend on it. It's not just the elderly and disabled, but also working people who put off or don't bother with saving for retirement on their own because they foolishly believe that Social Security will be their retirement!

There's more in the linked article than just this point. Another interesting tidbit that I had not heard before: Social Security may keep poor minority workers poor by taking their wages and putting them into a system which largely will not benefit their heirs should they die before the given retirement age. Had those folks been able to save that money in their own accounts, they could leave something behind for their heirs, which could in some cases break cycles of poverty.

AP: Social Security advocates fear payroll tax cut

Of course they do.

Social Security advocates fear payroll tax cut

President Barack Obama's plan to cut payroll taxes for a year would provide big savings for many workers, but makes Social Security advocates nervous that it could jeopardize the retirement program's finances.

The fact that there is a proposal on the table to reduce the worker's share of the Social Security tax by 2%, on its face, would make this seem to be a valid concern. However...

The government would borrow about $112 billion to make Social Security whole. Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.

...the money is to be replaced from another source (not a good one, mind you, but more certain than a payroll tax - to tax a worker's wages, there must be wages, and with so many out of work, borrowing to fund Social Security is a sure source of funding by comparison). This proposed tax holiday is for just one year, so there shouldn't be an issue of Social Security being forced to "rely on borrowed money" in the future, right? (That itself is a funny statement; some claim that Social Security taxes are not taxes but "contributions" that are given back to the worker later, meaning Social Security as a whole is "borrowed money.")

Social Security advocates are not worried about the long-term viability of Social Security due to this proposed tax holiday. What these folks are afraid of is that we'll enjoy not shelling out as much of our hard earned money into this failing Ponzi scheme, that many will realize that there are other, better means of securing one's retirement, and that a majority will finally come to understand what a horrible, inefficient, and unnecessary mess Social Security is. They're worried that we'll want a permanent tax holiday, and eventually the dismantling of Social Security itself.

If this deal is passed, I'm not going to rush out and spend the money on toys, I'm redirecting every penny of SS "contributions" I would have paid into a self-directed Roth IRA. This is an opportunity to show people how the creation of an individual's retirement can be done without Social Security.

Bert from St. Louis

I heard this call on Rush Limbaugh's radio show yesterday. It was one of those "right on!" calls that are very much worth repeating. From the transcript, Who's Being Held Hostage Here?, here's the redacted version of Bert's monologue:

Hey, talking about hostages, let me tell you who the hostages are, Rush. Me, you, our children and our children's children who these Democrats are holding hostage with $13 trillion in debt they can't pay. There are your hostages. Now, I'm a little tired of this demonization of the rich. You know what? The rich's money belongs to them. That's their private property. If they want to sit on it, that's their prerogative. It wasn't the rich who promised shovel-ready jobs. It wasn't the rich who promised green jobs. It wasn't the rich who promised hopey changey. You know what, these people want a job, go out and get some of them hopey-change jobs. You don't need unemployment insurance. And let me tell you what I don't believe in, Rush, and then I'll tell you what I believe in. What I don't believe in is the communist manifesto. The second plank calls for a progressive tax. The third plank in the communist manifesto calls for an inheritance tax. I don't believe in that. Now, let me tell you what I do believe in. On the Supreme Court of the United States building it says, "Equal justice under law." Tax is law. If you make a dollar or a trillion dollars you pay 15% because if it's important enough to raise taxes on one single American, it's important enough to raise taxes on every single American. And, you know what? When you hear the Democrats talk about the rich or corporations, just replace those words with the bourgeoisie or capitalist pigs and you'll know exactly where they're coming from.

As Rush said many times during the call, amen!

A Chance To Privatize Social Security

The news is out: Obama and the GOP have reached a compromise on taxes and unemployment transfer payments.

Perhaps bigger news than that is the 2% reduction in an employee's share of Social Security payroll taxes, which will take an employee's share from 6.2% of gross pay to 4.2%.

This creates an opportunity to make a small statement about the future of our country while also bettering your own.

They want us to take that money and spend it on toys. I think we can make much better use of it than that, however. Instead of putting that 2% into your pocket and blowing it on discretionary spending, put every penny of it into an IRA or some sort of retirement account.

This is a chance, albeit a small one that will only last one year, to show the difference that can be made by allowing people to opt for private retirement options rather than being held hostage by Social Security (which in its own yearly benefit statements declares that it will be a guaranteed loser). You are already accustomed to not receiving that money in your paycheck, so you will not suffer if you do not allow yourself to spend it now. However, you will build up assets and help yourself have money to live on later in life.

This is what I will be doing as of January 1st. I hope millions of folks throughout the U.S. will do the same. Let's show our elected aristocrats how this can be done!

Problogger.net: When's the Best Time to Publish Blog Posts?

 I found an interesting read on when and how often to publish blog posts to maximize response. There are two pieces of data contained within that pertain directly to this post:

1. Most people read blogs early in the day, so I'm posting this now (check), and

2. Multiple posts per day result in a greater number of links to the blog (oops!)

Obviously, on most days (weeks, months...) I fail on point #2. However, now that I have this info...

If you're a blogger, have a look over the post. There's good info on there about timing the use of Facebook and Twitter for maximum effect, too.