Tycho:
Would you say it's the concept of social security that you consider broken, or the practice of 'borrowing' money from the social security trust for other expenses?
katisara:
Both, really. The current system takes money from the young to pay for the old. As long as you have two or three or four young people to every old person, that works fine, but it's very short-sighted.
Why do you think that's short sighted? You can achieve a surplus of young to old even without population growth (because we each spend more time in the "young" category than the "old" category).
katisara:
On the most basic level, I don't think it's well defined.
I would largely agree on that. Though, I might say it's less an issue of it being well-defined, and more an issue of people not realizing how it's defined, but that's not a huge difference.
katisara:
Is it meant to keep old people from starving?
In my view, yes. Or, at very least, it
should be. Though I'm using "starving" in the broad sense of "being financially destitute," not just the literal sense of having no food.
katisara:
If so, wouldn't it make more sense for it to be paid in food stamps, or in government-run housing, rather than cash payouts? Food stamps 'cost' less because it's the government buying bulk surplus effectively, and it prevents people from using it so much as a 'free money because I'm old' program.
I wouldn't necessarily be opposed to such a change. It would be hard to get pushed through, I think, precisely because so many people view it as a retirement plan, rather than a safety net, but that doesn't mean it wouldn't be a change for the better, or that it's not something that should be on the table. The housing aspect is a bit trickier, as I think most would prefer a system that helps retired people keep whatever home they have to one that moves them elsewhere (especially if the cost of each of those options is more or less the same), but the basic principle you're suggesting (payment in benefits instead of just cash) I think is fine.
katisara:
Is it a forced retirement plan?
In my opinion it should not be viewed this way. One could argue that there
should be a forced retirement plan, but even in that case, I think it should be separate from the social security safety net. I'd probably not support a forced retirement plan, for what that's worth.
katisara:
Regardless, putting the money into the hands of people who can use it for short-term gain without any restrictions, depending on constant, baby-boom levels of child-bearing is GUARANTEED to fail. Even our current system could have worked if we didn't have our elected officials blowing the money every chance they got.
Okay, so it sounds like the critical flaw, in your view, is that congress can 'borrow' from the SS trust, since you don't trust them to pay it back (or perhaps not be able to pay it back)?
katisara:
That is true, if you extend the age social security starts paying out until say 75, it significantly reduces the number of children required to support the aging population. Currently you're dividing up the living expenses of each old person among several young, working people. Most people cannot afford the cost of supporting themselves plus one other person, so this cost needs to be chopped up. Even assuming people will work for three times as long as they retire for, having your cost of living increased by 33% is pretty significant.
But 33% assumes the system gives out the same amount of money to retired people as the working people are earning themselves, which I don't think is necessary for a safety net system. Still, I do see your point, that it's not an easy price to pay. Can we agree, though, that there is some price at which it becomes worth it?
katisara:
Therefore, we can either reduce social security benefits (or allow them to become defrayed by inflation), push back the age of payback or otherwise limit who gets money, increase the taxes paid to make up the deficit, or increase the number of new people entering the system. When the system was created, as a temporary stop-gap, people didn't live long past retirement and on average were supported by very many working children, so the math was nice. That isn't the case any longer.
Like I said, I'm not opposed to changing the details of the system. Pushing back the retirement age isn't the best option, in my opinion, but leaving it as an option on the table is fine by me, though. How 'not nice' do you consider the math to be at this point? I've heard a lot of vastly different views on this. I've heard people who say the system will be broke in 15 years, and others who say that it's fine for at least the next 70 years (though that's based on the assumption that congress will actually pay back the money it's borrowed from the trust), and others that say there will be a shortfall soon, but that offsetting it would require a tax increase smaller than tax increase set to come when Bush's tax break for the top 10% ends. So, to be honest, I'm not entirely sure just how dire the situation for social security. I'm also not sure how much is a perpetual problem, and how much is a temporary (though long in duration) problem due to the baby boomers being an unusually large generation. Everyone seems to agree that right now SS takes in more money than it gives out, but that "soon" that's going to change ("soon" seeming to mean something between 5 years and 25). Then there's the time when it can eat up the "reserves" it's built up over the years (which congress has borrowed, spent, and has said it will pay back), which will last for some number of years, and then after that it actually starts going into debt. At some point the boomers will be gone, and we won't be quite as top-heavy age wise, which will reduce the problem somewhat (though, to what extent I'm not sure). Some people seem to view it as an entirely lost cause, with absolutely no hope of being fixed, while others seem to think it just needs some adjustments. Am I right that you're closer the former camp? For me, I guess, the basic idea seems sound, so while adjustments to the current system may well be necessary, it doesn't seem like it should be entirely impossible to make it work in some form.