Issues: Social Security

Social Security. My arch enemy. For years I have looked at my beloved pay check wondering where all my hard money goes. I knew who you were SS. I even knew most of what you did, but I had heard the rumors. The rumors that all this money I was giving to you would never be seen by these eyes again. Now I finally get of my ass to figure this out. What are you really? Are the rumors true? Finally, what if anything, will be done about this system by the two men running for the White House?

Social Security is a program signed into law by President Franklin Roosevelt in 1935. It has changed a lot through the years, but the basics of the program remain the same. We the people are taxed directly from our paychecks and all the money is put into a fund nicknamed the "federal old-age, survivors and disability insurance." Its like a little savings fund the government forces on us in case we have a rainy day. Don't let my language mislead you. Forcing us into action on something like this is actually a good idea. I am horrible with my money and it is nice to know that my hard earned cash will be there when I get older or when doctors finally admit that I am mentally disabled.

Anyway this fund covers me for when i want to retire (the retirement age of course being set by the government babysitting my money) or if I become disabled. If I die the money will go to my wife (that I dont have) or my children (that dont know I exist) and all the accumulated monies are invested in treasury securities. It is apparently against the law for this money to be invested into the private sector like Wall Street. Thats not a joke, the money can only be invested in government securities instead of taking a chance on a high rate of return on wall street or other private sector investments.

If that were not enough that very same government our funds are invested in can, and does, reach into this social security surplus when it needs some extra cash by replacing it with government bonds. Basically imagine you are a small child trying to save up your allowance money to buy the newest super soaker gun (man I loved those things) so you can out duel the neighborhood kids. Only daddy needs a case of beer and all of his money is wasted somewhere else so he opens your money jar, takes out your money and replaces it with a little piece of paper with I.O.U. written on it. Thankfully every four to eight years mommy gets smart and gets a new daddy. However, this new daddy needs money for his crack cocaine and the whole freakin process starts all over again. Suddenly you wonder if you will ever see that fancy new super soaker. Fun fact: in 2007 the social security surplus fund held 2.2 trillions government bonds i.e. daddy's I.O.U.'s

The final kick in the balls from this shoddy operation is that the social security tax is only taken out of the first 102,000 thousand you make. So thankfully after that 102,000 all the rest of my money is.....awwwww, fuck. Never in my days did I ever dream of hitting it big so that I could make enough money to stop paying social security. I wanted to make mucho money to have golden super soakers and be comfortable in life. Sadly I doubt I will ever come close to that $102,000 threshold. So if a person stops paying at $102,000 they get less benefits right? Nope. The upper class pays less into the system and makes the same benefits of the middle and lower classes who need the money more.

More controversy comes from those politicians in the government who think we would benefit more by privatizing the program. There are many different ideas on how to do this, but the simplest way seems to be making it like a 401(k). A 401(k) is already like privatized social security. If your job has it as an option and you choose to take it, then a portion of your weekly paycheck will go into a 401(k) account. This money is invested in stocks, bonds, money markets or a mix of anything you want. You are the one who usually chooses how the money is invested. None of this money is taxed until after you decide to remove it from the fund.

Barack - He strongly opposes privatizing social security and wants to fix the payroll system so that it applies to more then just the first $100,000 a person makes. I believe I read that he would increase the cap to $250,000,but don't quote that number. He has also said that he will work with congress to get a new reform package on the books that will keep the program healthy for at least the next half century.

note - many people attack Obama because they feel he wants to raise taxes. In fact by removing the social security tax cap there will be a 1.3 billion tax increase. However since anyone making under $100,000 is already putting in the full amount they can, then this tax would only affect people with incomes greater then $100,000. So the talk of him taxing the middle classes in this case is false.

McCain - He advocates supplementing the social security benefits with individual investment accounts and prefers slowing the growth benefits to raising the taxes.

My View - I am not much of an economist and I have not seen a serious plan from either one of the candidates, but instead just quotes on what they would like to do. Like I said above their are many different ideas on how to privatize and I don't have the first inkling on how McCain's plan would work. Hopefully we learn more during one of the upcoming debates. Having said all of that and read all I have on this subject i would personally vote to privatize social security. The program is not working in its current state, its not making enough interest as it could on the private market and quite frankly its my money and I should be able to invest it how I please. Every week workers in this country pay into social security and many of them also pay into 401(k) accounts. The government should be able to find an intelligent plan to combine these two systems while still insuring our money that is invested just as I described last week with my housing blog. Why the government will insure investors in the housing market, but not insure our social security benefits is beyond me. Obviously the hardest part of this would be the change over. I am not sure how it would be done or if it could be done, but I am willing to listen to ideas on privatizing more then I am willing to listen to ideas on how to fix a failing pyramid scheme.

Obama - 2
McCain - 1