Who has a better chance of winning with Obama?

[Sheilbh]

If younger people bury their heads in the sand and expect the same benefits as their grandparents then would cutting their benefits be unfair too?

We're assuming a change to social security benefits.  That'll happen with public debate, in Congress and the news media and should then be publicised by the state to different age groups. 

So, no.  It's no more unfair than changing the retirement age, as has happened in the US.  If someone assumes they can retire at 65, when in fact they can't retire until they're 67 that's not unfair that's stupid.  As long as the government's open and transparent then you can't force people to keep well-informed.

[DGuller]

Interesting little factoid I picked up from an Atlantic article by Michael Kinsley on what the boomers can give back to the US to make up for their selfishness: the average Social Security payout is 139K.  The average estate at death is 139K.  (They probably aren't exactly the same but they were pretty darn close.)  The average retiree has a private pension and private savings sufficient (if we accept Kinsley's info) to finance life in retirement.  Social Security is pure gravy.

  Solid conclusion.  If one person has 278K and another person has 0K, then on average their assets are sufficient to finance life in retirement.

[Admiral Yi]

  Solid conclusion.  If one person has 278K and another person has 0K, then on average their assets are sufficient to finance life in retirement.

What conclusion are you referring to?

[DGuller]

  Solid conclusion.  If one person has 278K and another person has 0K, then on average their assets are sufficient to finance life in retirement.

What conclusion are you referring to?

The one saying that "Social Security is pure gravy."

[DontSayBanana]

Yi, you're skirting the number one fallacy about Social Security.  Per the automated recording I heard almost daily at my last job, "Social Security is not an individual retirement account.  The money you pay to Social Security today goes into the Social Security Trust Fund to pay benefits today."

The "shelf boomers" paid a lower rate because they were supporting the generation before them, which cost less to support.  It's a wealth redistribution mechanism, sure, but it has nothing to do with "inflated numbers."  The rates are higher because the cost of living is higher and there are more people to cover.  Today, today, today.  There's no promise of a return, which is kind of a necessary element of a ponzi scheme.

If you pay money now in return for money later, there's a return, either explicit or implicit.

No, you pay money now in return for not being prosecuted for tax evasion now or later.  The amount of the stipend allocated to the retiree is not linked to the amount in contributions previously paid by a retiree (except that the retiree has to have paid in something).  You're confusing retirement with temporary disability benefits.

[Admiral Yi]

The one saying that "Social Security is pure gravy."

To the average retiree it is.  To the significantly above average retiree it's who gives a shit.

[Admiral Yi]

No, you pay money now in return for not being prosecuted for tax evasion now or later.  The amount of the stipend allocated to the retiree is not linked to the amount in contributions previously paid by a retiree (except that the retiree has to have paid in something).  You're confusing retirement with temporary disability benefits.

First of all, you don't seem to understand what an implicit return is.

Secondly, you're wrong in believing there's no connection between contributions and payouts.

[DGuller]

The one saying that "Social Security is pure gravy."

To the average retiree it is.  To the significantly above average retiree it's who gives a shit.

Evaluating the effect of insurance by looking at averages is quite daft.  On average, having insurance is throwing money away.

[MadImmortalMan]

SSA is not insurance. Not really. You expect to get something out of it.

[Admiral Yi]

Yeah, what exactly is the insurable event in your analogy?  Reaching 65?

[MadImmortalMan]

http://www.sec.gov/answers/ponzi.htm

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

So, is the SEC's definition too broad?



Edit: If you think SSA is a ponzi, better report it: http://www.sec.gov/complaint/select.shtml

[DGuller]

SSA is not insurance. Not really. You expect to get something out of it.

It is, which is why it's called social insurance.  So what if you expect to get something out of it, annuities are a form of insurance.

[DGuller]

Yeah, what exactly is the insurable event in your analogy?  Reaching 65?

More generally, the insurable event is not dying.  Annuity is an insurance policy against outliving your assets.  My statement wasn't an analogy either, Social Security is not like insurance, it is insurance.

[Barrister]

Edit: If you think SSA is a ponzi, better report it: http://www.sec.gov/complaint/select.shtml

[Admiral Yi]

More generally, the insurable event is not dying.  Annuity is an insurance policy against outliving your assets.

A type of insurance for which it is very germane to discuss your other assets and whether you will outlive them.