A small question about Social Security

At the end of the year, the government takes the surplus of money in the SS fund, and just spends it on other parts of the National Budget. Why don’t they just like, leave it in there? Is there any GOOD reason?

I’m need to know this for a research paper; I’m trying to give different proposals to make our Social Security System solvent, and that just seemed like a pretty obvious one.

No, there isn’t a good reason to take it out. But some people feel that the funds could be better used elsewhere.

When policticians are short of money for something, and they won’t raise taxes, social security is the first thing they target. This is a constant in the whole world.

Now, giving it a budget and then taking the surplus away may seem okay today. Wait a few decades… Every developed country is going to have (a lot already do) more old people than young ones, and the young will have to work doubly very hard to pay for old people retirements via social security. The surplus should be stored to help keeping things in order in the future.

Let’s take a look at Europe to see an example.


Blame LBJ. Before him, Social Security was in a “lockbox” so to speak. But then this lockbox was removed under his administration.

If I recall correctly, Social Security will be burned out by 2030 or something.

Hey 984, could you find me a website that states or explains what you just said? That would be a great thing to add to my essay. :smiley:

And Amerycinsycho, it’s supposed to start running deficits at about 2014 I believe.

America has social security?

Social security was created millenia ago. In the ancient Egypt, old people who had given their labor to the Pharaoh received a lot of benefits. In ancient Greece, there was the “Law of the Swan” (funny, couldn’t find anything about this one in the internet), which obligated the adults and young in productive age to sustain their old relatives.

But then came the dark ages, when people lived little, so nobody cared about the old anymore.

A few centuries later came the industrial revlutions. Then, when medicine advanced a little, people started living more. The first organized groups of workers for their rights, a kind of grandmother of today’s unions, started asking for benefits to those who were so old, they couldn’t work anymore.

And then, after a lot of strikes and legal battles, they got it. Social security. A small point should be noticed, though: by that time, employers calculated the average age at which most people died (average life expectancy of a population). People would have the right to retire and be paid for it at that age. So nice from their part, huh?

That was by the passage of century XIX to XX. Since then, governments have had a lot of fun taking money from social security. Let’s see an example that happened in Brazil: retirement was regulated by the 30’s, 40’s; the condition for one to retire is that they must have paid their dues to the SS for at least 30 years. In the late 50’s, nobody had paid the SS for 30 years yet, hence the fund was billionaire and no worker had ever seen the color of that money. Simultaneously, the government had set to build a new capital. What did they do? They took what would be, if converted today to dollars, some US$200 billions (I think) and built a city. Complete with hospitals, churchs, schools, colleges, artifical lakes the size of the city itself, etc. It’s called Brasilia, and thanks to it, we have a gigantic hole in the SS funds which has not been efficiently dealt with to this day.

So you see… The SS is like the piggy-coffer of the president. When he wants some expensive candy and he doesn’t have enough pocket money, he breaks the coffer.

I demand that SG now include the SNL Gore/Bush debate sketch featuring “lockbox” in his paper.

Lol, that was a funny one, but 984 could find it faster than I could :stuck_out_tongue:

Hey, another question:

What’s the difference between reason 1 and 3? Both of them kinda sound like privatization to me. Also, why exactly would opposing payroll taxes help Social Security Solvency? I don’t really understand.

It was part of FDR’s new deal.

And SG, i think reason one is more of letting people use money that would be going to social security, and put it in their own retirement funds, while reason three just sounds like the government setting a minimum amount of money to be paid to each citizen, and no action may be taken that will make that amount impossible to pay.

If that is the case, wouldn’t reason three encourage misuse of the social security money if government knows they can take out as much as they want so long as they can ay the minimum to each person?

I’ll give you my responce, but i need some research, better give me your social security number

Indeed I can. http://snltranscripts.jt.org/00/00adebate.phtml

As for your question, I believe the difference between 1 and 3 is that under most privatization plans, it will only be partly privatized. You take a certain amount and invest it yourself, but you also have a bare minimum that you have to be paid.


Excellent. Thanks 984 :smiley:

Yeah, that’s why Gore’s plan was to put Social Security in a “lock-box” to keep the government from messing with it and prevent it from running out so soon.

Privitization has 3 serious flaws though. SS isnt a investment, its just you paying for today’s old people, and when you’re old, the young will pay for you. The amount you put in, even collecting an outragous 10% interest rate, would be used up in under 3 years. Additionally, every penny put in will mean less to pay for today’s senior citizens. Also, the stock market isnt necessarily solvent, anybody who had put in say 50k in investments from 92 to 97 would have roughly 30k today. This is assuming a wide diversifying of funds. Losses of course would vary with portfolios. The state of Florida actually lost 75% of our state pension fund because Jeb Bush moved most of it into Enron stock a few years back.

I think one of the ideas of privatization is that you put a certain amount of your payroll taxes that go into social security into a personal retirement account. Of course, that isn’t really social security, is it :stuck_out_tongue: That being said, Privatization is totally lame. :stuck_out_tongue: