An additional thought about "redistribution". I am a retired guy who benefitted from a business career. I have always supported a system where hard work and good ideas are rewarded. And laziness...not.
But. We are entering an era when the above will not apply. Jobs are being automated. Opportunities for "white collar" employment will be evaporating. Even Uber drivers will be dinosaurs. Long haul truckers - gone.
In order for people to live, I mean to have housing and food, there will need to be a universal basic income from the government. And that will need to be funded by the oligarchs who are benefitting from robots and AI who don't require health insurance and 401ks.
The payroll savings will be gigantic. We can let all that money continue to funnel to the few and treat the rest of us as dispensible vassals...or share the fruits of modern technology.
So the distribution of wealth is a huge subject. Under the current process we are launching what will be know as The New Feudalism. The Peasants won't be happy.
When I speak of "redistribution," I'm speaking of the "Robin Hood" kind. I agree that the technological and societal changes we're seeing need to be managed, but I still have faith in free markets, regulated to give people equitable opportunity. That last phrase is key, and today's Republicans don't care a whit about it. Those who make their money from products and services need customers who can afford them, so there's that, and the market will also drive people to where the jobs are. AI centers don't build themselves, and cottage industries pop up to support whatever is new, so while we may need to support people thru a transition, as long as the proper incentives (and disincentives) exist, I think we'll be okay. Of course, the morbidly rich will wield too much influence, and that needs to be managed as well.
Bob, I like this. I think most major corporations could handle incremental increases until over a period years they reach your target.
As you indicate, companies benefitted greatly by shifting from pensions to 401ks. Which I believe was a huge mistake.
As to the idea that our contributions are "our money" or not or whether this should be viewed as an annuity...I see all that as a blizzard trying bury the badic premise. People need an deserve a decent retirement. Everyone.
As to the concern about redistribution? Bring it on! The ultra wealthy have schemed a way to avoid taxes for decades. It is long past a time for a payback - a claw back. I know you don't like this.
But I don't think Elon Musk deserves anymore than $100 million. Beyond that (pick a number) it is immoral hoarding.
JMO.
Good post. Creative thinking. We need to tackle this ASAP.
Thanks, Bill! Good response. I don't begrudge anyone's success, as long as it's earned. A wise (and humble) guy I know says, "Nothing worth anything comes at the expense of others." I think there's a lot that can be done with corporate taxes, incentives with strings attached, making them spend their money (i.e., put it back into the economy), etc., but that takes courage and farsightedness that's currently lacking.
By the way, I constantly hear complaints about corporate execs making megabucks, but I never hear the same about athletes and entertainers. Why's that?
p.s. I'm by no means rich; comfortable and fairly secure, so I'm certainly not advocating morbid wealth for my own sake.
OK. I don't have time to do the research, but I've always thought that the money payroll taxes that we paid as workers to the Social Security Administration was OUR MONEY! Yes, it goes into a pretty large "pool," but what we paid into it over our years of paid employment was supposed to be available to us proportionately when we retire. Has that changed? I sure hope not!
I live on my social security funds exclusively! And I'm lucky enough to have applied for a housing voucher years ago and now have it to pay most of the egregious rent charged in the LOW-INCOME SENIOR APARTMENT where I live, after having to move from the coast where I was born and lived from 1940 to 2018! I'm a "fish out of water" living inland, but at least I'm still living! And I'm very appreciative of the assistance I'm getting.
And I'm very worried about our young folks, who can't afford their own apartment even though they may have a college degree and a decent job. It's time for a "re-set" in any of several possible scenarios which I will not delineate!
It certainly should be "our money." Our income now is entirely dependent on Social Security and my wife's small an non-inflation-adjusted pension (thanks Chris Christie). Fortunately, we put money in 401k's and IRAs, but we planned our remaining years based on the promise of Social Security.
I understand your point on changing the nature of Social Security from an annuity to a welfare program complete with wealth redistribution and there's no doubt about the Republican response. I'd be less opposed to the redistribution if it was more clear that the money was being used productively, an admittedly subjective judgment.
To say that it's complicated is one of the great understatements of all time, and in the interest of seeing some movement off of the historical 3rd rail, increasing the employer contribution is a reasonable start and I'll let my Senators know. Like yours, my Representative is a witless worm and I have some hope that she will drown in the Blue wave that seems increasingly possible in November.
We'll agree to disagree on removing the income cap Bob, and I have no problem with leaving the payout schedule as it is because presumably anyone whose income subjects them to the higher taxes will have sufficient assets to make their SocSec income supplemental only or, income cases superfluous.
That said, I like your idea of increasing the employer contribution while maintaining the employee portion as it is. Anything that will help balance the books while observing your stipulations about keeping retirees whole is worth a look.
My reasoning is that Social Security is basically a government-run and government-backed annuity. What you put in you expect to get back over your expected lifetime. If we remove the cap, that essential feature no longer applies, and it just becomes another means of redistributing wealth (which I'm also not a fan of), and an attack line for the Republicans. The problem as I see it is that the "annuity" is paying out more than it's being bought for. Exacerbating the problem is the baby boomers who are draining the fund faster than the later, smaller generations are replenishing it. It's not a Ponzi scheme, but in some ways it acts like one.
What might make sense, though, in the context of your observation about wealthier folks, is perhaps a reduced payout or an extended schedule (since the wealthier generally live longer, I think). Maybe another option is to let them defer collecting in exchange for a death benefit at some lower net present value. Or how about this? - their name on a memorial wall!!! Obviously, the simpler and more consistent things can be, the easier it is to administer and the more difficult it is to cheat. Like everything else, it's complicated.
In any case, I'd like to focus on the idea of increasing the employer contribution alone. It might be the lowest hanging fruit that has a big impact on survival of this vital program.
An additional thought about "redistribution". I am a retired guy who benefitted from a business career. I have always supported a system where hard work and good ideas are rewarded. And laziness...not.
But. We are entering an era when the above will not apply. Jobs are being automated. Opportunities for "white collar" employment will be evaporating. Even Uber drivers will be dinosaurs. Long haul truckers - gone.
In order for people to live, I mean to have housing and food, there will need to be a universal basic income from the government. And that will need to be funded by the oligarchs who are benefitting from robots and AI who don't require health insurance and 401ks.
The payroll savings will be gigantic. We can let all that money continue to funnel to the few and treat the rest of us as dispensible vassals...or share the fruits of modern technology.
So the distribution of wealth is a huge subject. Under the current process we are launching what will be know as The New Feudalism. The Peasants won't be happy.
When I speak of "redistribution," I'm speaking of the "Robin Hood" kind. I agree that the technological and societal changes we're seeing need to be managed, but I still have faith in free markets, regulated to give people equitable opportunity. That last phrase is key, and today's Republicans don't care a whit about it. Those who make their money from products and services need customers who can afford them, so there's that, and the market will also drive people to where the jobs are. AI centers don't build themselves, and cottage industries pop up to support whatever is new, so while we may need to support people thru a transition, as long as the proper incentives (and disincentives) exist, I think we'll be okay. Of course, the morbidly rich will wield too much influence, and that needs to be managed as well.
Bob, I like this. I think most major corporations could handle incremental increases until over a period years they reach your target.
As you indicate, companies benefitted greatly by shifting from pensions to 401ks. Which I believe was a huge mistake.
As to the idea that our contributions are "our money" or not or whether this should be viewed as an annuity...I see all that as a blizzard trying bury the badic premise. People need an deserve a decent retirement. Everyone.
As to the concern about redistribution? Bring it on! The ultra wealthy have schemed a way to avoid taxes for decades. It is long past a time for a payback - a claw back. I know you don't like this.
But I don't think Elon Musk deserves anymore than $100 million. Beyond that (pick a number) it is immoral hoarding.
JMO.
Good post. Creative thinking. We need to tackle this ASAP.
Thanks, Bill! Good response. I don't begrudge anyone's success, as long as it's earned. A wise (and humble) guy I know says, "Nothing worth anything comes at the expense of others." I think there's a lot that can be done with corporate taxes, incentives with strings attached, making them spend their money (i.e., put it back into the economy), etc., but that takes courage and farsightedness that's currently lacking.
By the way, I constantly hear complaints about corporate execs making megabucks, but I never hear the same about athletes and entertainers. Why's that?
p.s. I'm by no means rich; comfortable and fairly secure, so I'm certainly not advocating morbid wealth for my own sake.
OK. I don't have time to do the research, but I've always thought that the money payroll taxes that we paid as workers to the Social Security Administration was OUR MONEY! Yes, it goes into a pretty large "pool," but what we paid into it over our years of paid employment was supposed to be available to us proportionately when we retire. Has that changed? I sure hope not!
I live on my social security funds exclusively! And I'm lucky enough to have applied for a housing voucher years ago and now have it to pay most of the egregious rent charged in the LOW-INCOME SENIOR APARTMENT where I live, after having to move from the coast where I was born and lived from 1940 to 2018! I'm a "fish out of water" living inland, but at least I'm still living! And I'm very appreciative of the assistance I'm getting.
And I'm very worried about our young folks, who can't afford their own apartment even though they may have a college degree and a decent job. It's time for a "re-set" in any of several possible scenarios which I will not delineate!
It certainly should be "our money." Our income now is entirely dependent on Social Security and my wife's small an non-inflation-adjusted pension (thanks Chris Christie). Fortunately, we put money in 401k's and IRAs, but we planned our remaining years based on the promise of Social Security.
I understand your point on changing the nature of Social Security from an annuity to a welfare program complete with wealth redistribution and there's no doubt about the Republican response. I'd be less opposed to the redistribution if it was more clear that the money was being used productively, an admittedly subjective judgment.
To say that it's complicated is one of the great understatements of all time, and in the interest of seeing some movement off of the historical 3rd rail, increasing the employer contribution is a reasonable start and I'll let my Senators know. Like yours, my Representative is a witless worm and I have some hope that she will drown in the Blue wave that seems increasingly possible in November.
We'll agree to disagree on removing the income cap Bob, and I have no problem with leaving the payout schedule as it is because presumably anyone whose income subjects them to the higher taxes will have sufficient assets to make their SocSec income supplemental only or, income cases superfluous.
That said, I like your idea of increasing the employer contribution while maintaining the employee portion as it is. Anything that will help balance the books while observing your stipulations about keeping retirees whole is worth a look.
I love agreeable disagreements!
My reasoning is that Social Security is basically a government-run and government-backed annuity. What you put in you expect to get back over your expected lifetime. If we remove the cap, that essential feature no longer applies, and it just becomes another means of redistributing wealth (which I'm also not a fan of), and an attack line for the Republicans. The problem as I see it is that the "annuity" is paying out more than it's being bought for. Exacerbating the problem is the baby boomers who are draining the fund faster than the later, smaller generations are replenishing it. It's not a Ponzi scheme, but in some ways it acts like one.
What might make sense, though, in the context of your observation about wealthier folks, is perhaps a reduced payout or an extended schedule (since the wealthier generally live longer, I think). Maybe another option is to let them defer collecting in exchange for a death benefit at some lower net present value. Or how about this? - their name on a memorial wall!!! Obviously, the simpler and more consistent things can be, the easier it is to administer and the more difficult it is to cheat. Like everything else, it's complicated.
In any case, I'd like to focus on the idea of increasing the employer contribution alone. It might be the lowest hanging fruit that has a big impact on survival of this vital program.