Social Security Fix

**alaskaguy** · 11-13-2007, 10:01 AM

The Dallas Fed has released an interview conducted with Milton Friedman little more than a year before his death in 2006. Among his many insights is this proposed fix for Social Security: “My favorite solution… would be to give every individual who’s in a Social Security system now — either as a recipient or as a payer — a bond equal to the present value of what they so far have actually earned and then close the system down.”

**Incyte** · 11-13-2007, 10:25 AM

That works for me. We can then return the system to what it should be: a safety net for the poor who had no oppertunity to save for their later years.

**Cyclonepride** · 11-13-2007, 10:30 AM

I'm all for killing it as soon as possible. Has anyone put a dollar figure on the cost of such a buyout? I am sure it is huge, but less than continuing the farce.

**brianhos** · 11-13-2007, 10:42 AM

Just let me out right now, keep all I have put in.

I am 34, let me keep my $12,000/year and put it in my 401k. 30 years, 12k per year, 5% return. That is $800k in my 401k extra when I retire. Now invest that in an annuity for 30 years, and that is $54k per year in additional income. That is a hell of a lot more than SS will ever provide me and my wife.

**jdoggivjc** · 11-13-2007, 12:40 PM

Heck - cash me out right now with everything I've invested. I'll keep it in 4-5% CDs for the next 30 years and I'll be guaranteed a sum that I will probably never see from the government when I retire.

**Johnny Tremain** · 11-13-2007, 01:00 PM

Originally Posted by brianhos

Just let me out right now, keep all I have put in.

I am 34, let me keep my $12,000/year and put it in my 401k. 30 years, 12k per year, 5% return. That is $800k in my 401k extra when I retire. Now invest that in an annuity for 30 years, and that is $54k per year in additional income. That is a hell of a lot more than SS will ever provide me and my wife.

Let us suppose that your wish is granted and you now live in a world without Social Security, Medicare, and Medicaid. You are in hog heaven banking your $12,000 a year for your future.

Then, in his sophmore year in college, your son develops adult onset schizophrenia.

What happens now to your financial future?

Think it can not and will not happen to you. Think again.

**brianhos** · 11-13-2007, 01:18 PM

Originally Posted by Johnny Tremain

Let us suppose that your wish is granted and you now live in a world without Social Security, Medicare, and Medicaid. You are in hog heaven banking your $12,000 a year for your future.

Then, in his sophmore year in college, your son develops adult onset schizophrenia.

What happens now to your financial future?

Think it can not and will not happen to you. Think again.

I am not saying to end medicare or medicade, I am just asking to get out of SS, that is not the governments problem to provide me retirement income. That is my problem.

**Incyte** · 11-13-2007, 01:29 PM

Originally Posted by Johnny Tremain

Let us suppose that your wish is granted and you now live in a world without Social Security, Medicare, and Medicaid. You are in hog heaven banking your $12,000 a year for your future.

Then, in his sophmore year in college, your son develops adult onset schizophrenia.

What happens now to your financial future?

Think it can not and will not happen to you. Think again.

That's a pretty bad hypothetical being no one here has advocated getting rid of Medicare or Medicaid. Social security needs to be a welfare program for the poor and not a retirement program (ponzee scheme) for the masses.

**Cyclonepride** · 11-13-2007, 01:42 PM

Originally Posted by Johnny Tremain

Let us suppose that your wish is granted and you now live in a world without Social Security, Medicare, and Medicaid. You are in hog heaven banking your $12,000 a year for your future.

Then, in his sophmore year in college, your son develops adult onset schizophrenia.

What happens now to your financial future?

Think it can not and will not happen to you. Think again.

Insurance? I'm willing to bet that you could buy a healthy insurance policy to cover your family with that money instead.

What we have in all cases is a wealth transferral system, just the same as our income tax. Make people who are responsible for themselves pay for those who are not.

**Ames** · 11-13-2007, 02:06 PM

Originally Posted by Johnny Tremain

Let us suppose that your wish is granted and you now live in a world without Social Security, Medicare, and Medicaid. You are in hog heaven banking your $12,000 a year for your future.

Then, in his sophmore year in college, your son develops adult onset schizophrenia.

What happens now to your financial future?

Think it can not and will not happen to you. Think again.

Are we required to also not have insurance?

**Kyle** · 11-13-2007, 02:18 PM

Originally Posted by Ames

Are we required to also not have insurance?

Insurance that covers long-term mental health care is quite expensive and is not easy to find.

**Kyle** · 11-13-2007, 02:22 PM

Originally Posted by Incyte

Social security needs to be a welfare program for the poor and not a retirement program (ponzee scheme) for the masses.

I can get on board with this. The objective of social security should be to ensure that our elderly and disabled are not destitute. It's objective should not be to provide a major source of retirement income for everyone.

**Ames** · 11-13-2007, 02:23 PM

Originally Posted by Kyle

Insurance that covers long-term mental health care is quite expensive and is not easy to find.

If everything were dropped we get more back than just some SS money. We all could decide our level of comfortable risk and exposure and buy appropriate insurance.

**Kyle** · 11-13-2007, 02:30 PM

Originally Posted by alaskaguy

The Dallas Fed has released an interview conducted with Milton Friedman little more than a year before his death in 2006. Among his many insights is this proposed fix for Social Security: “My favorite solution… would be to give every individual who’s in a Social Security system now — either as a recipient or as a payer — a bond equal to the present value of what they so far have actually earned and then close the system down.”

While I am on board with reforming social security, I don't think this is the solution, mostly because it would cost a ton. From my understanding most people won't get back from social security what they put into it (Which makes it very similar to a crappy long-term annuity). It is probably more feasible to refund a smaller percentage, or provide pro-rated benefits.

It should also be pointed out that some sort of tax will be necessary to support a dramatically reduced social security program to ensure that there is some sort of a safety net for the elderly and disabled.

**Kyle** · 11-13-2007, 02:36 PM

Originally Posted by Ames

If everything were dropped we get more back than just some SS money. We all could decide our level of comfortable risk and exposure and buy appropriate insurance.

Except that most people suck at doing so, and we would have a large number of people requiring treatments and services that had no means to pay for them.

Additionally, I don't really trust insurance companies. There are major problems in Iowa right now with long-term care insurance where people thought they would be covered and are not. As an FYI to anyone who engaged in the health care thread a while back, I checked with the health law professor here if there were regulations against insurance companies compensating employees based on denying claims. To her knowledge there is not.