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Date: Fri, 18 Feb 2005 15:17:10 -0500 (EST)
To: Matthew R Rudary <mrudary &AElig eecs.umich.edu>
cc: improvetheworld &AElig umich.edu
From: Kevin Lochner <klochner &AElig eecs.umich.edu>
Subject: Re: Keep the Security in Social Security!
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yeah, there will certainly need to be adjustments to get our govt/economy
back into a stable state, probably including a lower dollar,
increased interest rates, and likely a reduced quality of life for a lot
of americans

i just wanted to point out how silly it is to say that there is
money in a social security trust fund.  It's like me being in debt for
$100, but saying I have $20 in a trust fund because i owe it to myself.

--
   -------   kevin lochner    -------------------------------------
    -----     http://www.eecs.umich.edu/~klochner/    --------------


"Our priorities is our faith."
-- G.W. Bush, Greensboro, N.C., Oct. 10, 2000


On Fri, 18 Feb 2005, Matthew R Rudary wrote:

> Well, all treasury bonds are just IOUs from the government. If we
> default on those bonds, I have a feeling that the market will fall out
> from under US treasury bonds in general; the government running out of
> money (and being unable to borrow to cover) would have effects more
> serious than shortfalls in SS. Clearly we have to do something to
> address the problem; not running a budget deficit would help a lot.
> Growing the GDP so that tax receipts increase would also help.
>
> Matt
>
> Kevin Lochner wrote:
> > The "trust fund" is just an iou from the government to the government.
> > Since  our taxes pay off these iou's, having treasuries in the trust fund
> > is like saying "it's okay, we're going to pay ourselves to keep funding
> > social security".  If the governement runs out of money, there isn't
> > going to be anything for social security regardless of these iou's,
> > meaning that we will get higher taxes, or reduced benefits, or whatever
> > else is necessary to fund both social security and these IOU's.   read the
> > following, but ignore the advice about creating private accounts :-)
> >
> > http://www.heritage.org/Research/SocialSecurity/em940.cfm
> >
> >
> > --
> >    -------   kevin lochner    -------------------------------------
> >     -----     http://www.eecs.umich.edu/~klochner/    --------------
> >
> >
> > "Many of the punditry.of course, not you (laughter).but other
> >  punditry were quick to say, no one is going to follow the United
> >  States of America."
> > -- G.W. Bush, Washington, D.C., Jan. 21, 2003
> >
> >
> > On Fri, 18 Feb 2005, Matthew R Rudary wrote:
> >
> >
> >>Stealing from social security == investment in treasury bonds.
> >>Essentially, the government borrows the surplus from social security
> >>taxes every year by issuing treasury bonds in that amount to the social
> >>security trust fund.
> >>
> >>http://www.ssa.gov/pressoffice/factsheets/WhatAreTheTrust.htm
> >>
> >>Also, I think raising/eliminating the FICA cap is a good idea;
> >>regressive taxes are, well, regressive. However, raising the cap may
> >>raise benefits for people making more than the cap; as I understand it,
> >>you benefits are calculated based on your average income over your
> >>highest 35 years of earnings, but the amount for each year is limited to
> >>the tax cap for that year.
> >>
> >>Also, it should be noted that the caps have been growing; it's $90k for
> >>2005, but it was 87.9k for 2004, $76.2k in 2000, 51.3k in 1990, etc.
> >>
> >>http://www.ssa.gov/retire2/maxtax.htm
> >>
> >>Lisa raises a good point about raising the retirement age--I think that
> >>the retirement age should be indexed with actuarial tables in some way
> >>(with the proviso that when you're within X years of retirement, your
> >>retirement year can't increase again, where X = 10 or 15).
> >>
> >>Matt
> >>
> >>Robert Felty wrote:
> >>
> >>>I am not opposed to privatization in theory, but after reviewing Bush's
> >>>plan, it does not seem very good.  In order to do better than what
> >>>social security would normally pay out, one has to have investments that
> >>>get 3% above inflation, which could be anywhere from 4%-8% probably,
> >>>which is not terribly difficult, but not that easy either.  The risks
> >>>also seem quite great.  So to me the potential reward does not seem
> >>>worth the risk.  In talking with my dad, I suggested that they simply
> >>>invest the social security money in U.S. treasury bonds, instead of
> >>>having it just sit around not earning any money.  My dad informed me
> >>>that they already do this.  However, there usually isn't much money
> >>>sitting around.  When there is some money sitting around, our
> >>>legislators usually pillage it for other reasons.  So that leads to my
> >>>first proposal
> >>>1.  Stop stealing from social security.
> >>>
> >>>My dad also made another recommendation, which president Bush has
> >>>recently said he will consider, which is raising the cap on how much of
> >>>income is subject to social security tax (FICA).  Currently one only
> >>>pays FICA on up to $90,000 of income (it has been going up slowly -
> >>>$76,200.00 in 2000).  This obviously benefits the rich greatly.  If we
> >>>got rid of the cap entirely, that would greatly increase social security
> >>>money.
> >>>2.  Lift CAP
> >>>
> >>>Unfortunately, Stabenow's petition offers no suggestions, merely,"We
> >>>need to build on the success of Social Security by developing bold and
> >>>innovative ways for Americans to build wealth and save for retirement.
> >>>Privatization is not the answer."  Why not suggest some alternatives?
> >>>I am not going to sign her petition, but I will send her my suggestions.
> >>>
> >>>Thanks.
> >>>Rob
> >>>
> >>>On Feb 18, 2005, at 10:15, Lisa Hsu wrote:
> >>>
> >>>
> >>>>hey guys,
> >>>>
> >>>>by writing to our senator (whom i like, she always sends back a
> >>>>relevant message), i guess i've now gotten on the list to receive
> >>>>emails on her pet issues.  this one is about social security and what
> >>>>our michigan senator is doing about it.  she includes a petition to
> >>>>tell Bush to take privatization adn shove it.
> >>>>
> >>>>lisa
> >>>>
> >>>>---------- Forwarded message ----------
> >>>>From: Senator Debbie Stabenow <senator &AElig stabenow.senate.gov>
> >>>>Date: Fri, 4 Feb 2005 20:53:42 -0500
> >>>>Subject: Keep the Security in Social Security!
> >>>>To: kerry &AElig lisazapato.com
> >>>>
> >>>>
> >>>>
> >>>>
> >>>>February 4, 2005
> >>>>
> >>>>Miss Lisa Hsu
> >>>>2200 Fuller Court, Apartment 401B
> >>>>Ann Arbor, MI  48105
> >>>>
> >>>>Knowing of your interest . . .
> >>>>
> >>>> . .  in critical issues affecting the future of our country, I am
> >>>>writing to update you regarding the current debate over Social
> >>>>Security.  As you may know, I am leading efforts in the United
> >>>>States Senate to keep Social Security secure and ensure its
> >>>>solvency through the 21st century.
> >>>>
> >>>>Social Security is a great American success story.  We need to
> >>>>reject privatization schemes that would require deep benefit cuts
> >>>>and massive increases in the national debt and work together to
> >>>>strengthen and improve Social Security. We should look to the
> >>>>future to create new ways for Americans to build wealth and
> >>>>retirement security.
> >>>>
> >>>>Working together, we can achieve these important goals. But I
> >>>>need your help. We need to join together and fight these
> >>>>privatization schemes to keep Social Security safe for all
> >>>>Americans.  I invite you to visit my website at
> >>>>http://stabenow.senate.gov/socialsecurity for more information and
> >>>>to sign my online petition to encourage President Bush and the
> >>>>Congress to reject privatization and instead, build on the success of
> >>>>Social Security.
> >>>>
> >>>>As always, thank you for your interest in the important issues
> >>>>facing our country.
> >>>>
> >>>>Sincerely,
> >>>>Debbie Stabenow
> >>>>United States Senator
> >>>>
> >>>>---------------------------------------------------
> >>>>You are receiving this e-mail because you have previously
> >>>>communicated with my office about a related issue. If you would
> >>>>rather not receive e-mails like this in the future, please respond to
> >>>>this message with the word REMOVE in the subject line.
> >>>>
> >>>>
> >>
> >>--
> >>Matt Rudary
> >>Graduate Student
> >>Intelligent Systems
> >>University of Michigan
> >>(734) 262-4760
> >>
> >>i'm not an egomaniac.  i'm a *realist*. --mlt
> >>
>
> --
> Matt Rudary
> Graduate Student
> Intelligent Systems
> University of Michigan
> (734) 262-4760
>
> i'm not an egomaniac.  i'm a *realist*. --mlt
>