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View Diary: Why do Republicans hate Social Security? (218 comments)

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  •  Destitution Insurance ? (0+ / 0-)

    As near as I can figure, the Social Security System was adopted to avoid instituting a "Prussian Socialist"   Old Age Pension Scheme in the United States ...

    So ... in order to put  buying power in the hands of Depression Era seniors, the system was presented as a "sort of" personal savings account in which the level of contribution determined the amount of benefit -- leaving the Bush Administration with room to argue that "as an investment, Social Security under-performs compared to trading common stocks."

    Unfortunately, the FDR Democrats' decision to Save Capitalism and avoid Socialism resulted in a program that collects more from some than it pays, and pays some more than it collected -- and yet does not protect ANYONE from destitution in old age without extensive personal savings and/or investments.

    Now, for the record: I did sign Sen. Sanders' petition. Social Security is what everyone is used to.  It works fairly well, cushioning the really needy elderly from UTTER destitution, and providing welcome supplemental income to everyone else.

    A better system might be a graduated, progressive,  means-tested pension system, understood as a pure Insurance proposition, which would pay the DIFFERENCE between the Insured's actual retirement income and some arbitrary figure representing a middle position between "comfortable" and "near-poverty."

     In other words, most people would pay premiums for the entire working lives, but if their savings and investments did well they would receive little or no pay-back -- any more than they receive payback from their casualty or liability insurance products.

    The fact is, almost EVERYONE is one bad break away from destitution -- even the mighty and virtuous Job Creating High Earning and Successful Entrepreneurs.

    While I'd hardly expect such a program to ever be adopted in the political give and take ... ADVANCING the idea of such a program whenever the Right proposes "reforming" Social Security out of existence might be a useful push-back -- especially from a Socialist Senator.

    •  Man the original Adam Selene was so (0+ / 0-)

      much smarter. Certainly more data oriented.

      First of all FDR implement a Prussian style old age pension program right along side the insurance based program we have today. In fact the former was Title 1 of the Social Security Act of 1935 while what we know as Social Security today was Title 2. And Title 1 benefits went to more people at a higher dollar cost that Title 2 all the way to 1950 and the Social Security Amendments of that year.

      And the first monthly payments under Title 2 didn't even start until 1940 and at that a year ahead of schedule, at which time we were on the verge of emerging from the Depression via war spending that was already ramping up.

      Plus while like any actuarially based joint insurance plan there is not an exact correspondance between contributions and payouts but three things are known: 1) under Social Security if you have a higher lifetime history of contributions you will get a better absolute benefit than someone earning less over that same lifetime arc 2) offsetting that lower income workers, while getting a lower absolute benefit get a higher replacement rate of their final wage and 3) every generation of Social Security recipients have received a better benefit when measured in real basket of goods terms.

      You can screw around with rate of return all you want the system manages to both reward hard work (or luck) in the form of a bigger check even as it progressively adjusts the benefit formula to give proportionately better results to to those less fortunate in their choices or just their life circumstances.

      And your "doesn't protect anyone from destitution" is nonsense, compared rates of poverty among the elderly previous to Social Security and since, fewer than 10% of seniors life in absolute poverty today. Granted 100 of FPL is not remotely living large but your grandparents grandparents might have seen the result a little differently. My Dads own parents lived and died in pretty abject poverty, and he was essentially on his own from the 10th grade on until he was old enough to join the Navy at 17 in 1945.

      And while I support a universal pension program in principal, if you are going that route there is no reason to confine its funding to worker contributions at all. I mean make it welfare or keep it insurance.

      Please visit, follow or join our Group: Social Security Defenders

      by Bruce Webb on Fri Sep 23, 2011 at 01:39:00 PM PDT

      [ Parent ]

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