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Willisms

« Trivia Tidbit Of The Day: Part 410 -- Prison & Crime. | WILLisms.com | Quotational Therapy: Part 125 -- Ronald Reagan, On Freedom. »

Social Security Reform Thursday: Week Seventy -- Don't Raise The Cap.

reformthursdayblue.gif

Thursdays are good days for reform, because they fall between Wednesdays and Fridays.

That's why WILLisms.com offers a chart or graph, every Thursday or so, pertinent to Social Security reform.

This week's topic:

Making A Terrible Deal Even Worse.

Imagine for a second that you are from someplace like North Dakota or Montana, and have made your career as a Senator. You plan on spending another decade or three in Washington, DC.

Question: What would be your philosophy on Social Security?

Maybe this?

"Both sides have to be willing to give up their fixed positions," [North Dakota Democrat Senator Kent] Conrad, 58, said at a Washington press conference last week. "There needs to be more revenue."

Answer: More revenue. Higher taxes, in other words.

Kent Conrad, chair of the Senate Budget Committee, views his role in government as a revenue maximizer. In order to keep the Democrats' 1930s-style dream government afloat, perpetually more tax revenues are required. For Democrats like Conrad, the only way to earn more tax revenue for the government is to confiscate it from Americans.

While entrepreneurs and corporate leaders must generate revenue through superior products/services, competitive pricing, innovation, and creative marketing, Conrad doesn't need to worry about any of that. He can simply compel Americans to pay more for less.

It's an unfortunate view of government. Instead of viewing his role as an innovator, a facilitator of a superior Social Security system, Conrad views himself as a revenue maximizer.

What's even more unfortunate is that Democrats hold such a narrow and reactionary view of revenue maximization. Democrats believe that raising the wage cap on payroll taxes will maximize revenue enough to save FDR's legacy.

Here's what raising the cap would do:

* Reduce the annual take-home pay of 10.3 million workers by an average of $5,650 in the first year alone after the cap is removed. Most of these workers have incomes below $125,000.

* Raise taxes on 4.0 million workers over the age of 50—just when they are trying to steer towards retirement.

* Raise taxes on 3 million small business owners.

* Greatly increase the top effective federal marginal tax rate.

* Weaken the U.S. economy by reducing the number of job opportunities and workers’personal sav­ings. By fiscal year 2015, the number of job opportunities lost would exceed 965,000, and personal savings would decline by more than $55 billion, in real terms.

* Not save Social Security. A 2003 Social Security Administration study showed that eliminating the Social Security wage cap would delay the program’s deficits for only about six years.

More than that, it would basically mean that millions of Americans would be paying more into a broken system, without getting more out of it in the end. Social Security, then, by definition, becomes a full-fledged welfare program. It becomes a full-fledged rob from the rich and middle class to give to the poor, but even then, give the poor the shaft program. It becomes a full-fledged Marxist tool of forced wealth confiscation/redistribution.

How is that program supposed to survive election after election, through the generations?

If it's not a welfare program, what is it? A retirement program?

Coyote Blog looks at Social Security as a retirement program:

Fine, let's call it a retirement program. Well, as a retirement program, it is a really, really big RIPOFF. Ever worker in this country is being raped by this retirement plan. In fact, it is the worst retirement program in the whole country:

* As we see above, it pays a negative rate of return
* It is not optional - you go to prison if you choose not to participate
* Unlike a private annuity contract, the government can rewrite your benefits level any time, and you have to take it. In fact, my statement says "Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2040, the payroll taxes collected will be enough to pay only about 74 percent of scheduled benefits."
* There are no assets backing this annuity!! An insurance company that wrote annuities without any invested assets backing them would be thrown in jail faster than Jeff Skilling. The government has been doing it for decades.

Just how bad is your Social Security rate of return? Find out here.

Under the current system, as we move into the future, the average worker will already be paying far more per retiree than ever originally intended:

eachworkerperretireee.gif

Conrad wants to "increase revenue," something that won't fix Social Security but will make Social Security a worse deal than it already is.

Why not instead fix Social Security permanently? Why not instead make it a better deal? Why not personal accounts?

The clock is still ticking:


Tune into WILLisms.com each Thursday or so for more important graphical data supporting Social Security reform.

--------------------------------

Previous Reform Thursday graphics can be seen here:

-Week One (Costs Exceed Revenues).
-Week Two (Social Security Can't Pay Promised Benefits).
-Week Three (Americans Getting Older).
-Week Three, bonus (The Templeton Curve).
-Week Four (Fewer Workers, More Retirees).
-Week Five (History of Payroll Tax Base Increases).
-Week Six (Seniors Living Longer).
-Week Six, bonus (Less Workers, More Beneficiaries).
-Week Seven (History of Payroll Tax Increases).
-Week Seven, bonus (Personal Accounts Do Achieve Solvency).
-Week Eight (Forty Year Trend Of Increasing Mandatory Spending).
-Week Nine (Diminishing Benefits Sans Reform).
-Week Ten (Elderly Dependence On Social Security).
-Week Eleven (Entitlement Spending Eating The Budget).
-Week Twelve (Benefit Comparison, Bush's Plan versus No Plan).
-Week Thirteen (Younger Americans and Lifecycle Funds).
-Week Fourteen (The Thrift Savings Plan).
-Week Fifteen (Understanding Progressive Indexing).
-Week Sixteen (The Graying of America).
-Week Seventeen (Debunking Myths).
-Week Eighteen (Debunking Myths).
-Week Nineteen (Reform Needed Sooner Rather Than Later).
-Week Twenty (Global Success With Personal Accounts).
-Week Twenty-One (GROW Accounts: Stopping The Raid).
-Week Twenty-Two (Millions of Lockboxes).
-Week Twenty-Three (Support for Ryan-DeMint).
-Week Twenty-Four (KidSave Accounts).
-Week Twenty-Five (Latinos and Social Security).
-Week Twenty-Six (AmeriSave).
-Week Twenty-Seven (Cost Of Doing Nothing).
-Week Twenty-Eight (Chile).
-Week Twenty-Nine (Entitlement Spending Out Of Control).
-Week Thirty (Reform Better Deal Than Status Quo).
-Week Thirty-One (Social Security As A Labor Cost).
-Week Thirty-Two (Social Security And Dependence On Government).
-Week Thirty-Three (Social Security, Currently A Bad Deal For African-Americans).
-Week Thirty-Four (Longer Life Expectancies Straining Social Security).
-Week Thirty-Five (Howard Dean & Salami).
-Week Thirty-Six (Growing Numbers of Beneficiaries Draining Social Security).
-Week Thirty-Seven (The Crisis Is Now).
-Week Thirty-Eight (Disability Benefits).
-Week Thirty-Nine (Broken Benefit Calculation Formula).
-Week Forty (German Social Security Disaster).
-Week Forty-One (Crumbling Pyramid Scheme).
-Week Forty-Two (Overpromising, Globally).
-Week Forty-Three (Demographic Wave).
-Week Forty-Four (The Jerk Store).
-Week Forty-Five (Defined Benefit Plans).
-Week Forty-Six (Even The Empty Promises Are A Bad Deal).
-Week Forty-Seven (Our Aging Population).
-Week Forty-Eight (The Tax Increases Required To Cover Social Security's Costs).
-Week Forty-Nine (Much Longer To Get Your Money Back From Social Security).
-Week Fifty (A Vote, At Last).
-Week Fifty-One (We Can Do Better).
-Week Fifty-Two (Socialist Security).
-Week Fifty-Three (China Has The Same Problem, Only Worse).
-Week Fifty-Four (Potential Crisis Size).
-Week Fifty-Five (The Crisis Moves Closer).
-Week Fifty-Six (Big Brother Social Security).
-Week Fifty-Seven (Personal Accounts Are Awesome).
-Week Fifty-Eight (Private Accounts and Presidential Proposals).
-Week Fifty-Nine (The False Promises Of Social Security = Unwise Investing/Saving).
-Week Sixty (Declining Rate Of Return).
-Week Sixty-One (Entitlement Spending Threatens America's Defense Capabilities).
-Week Sixty-Two (Dismal Rates Of Return Only Getting Worse).
-Week Sixty-Three (Lost Time, Growing Shortfall).
-Week Sixty-Four (Solutions & Consequences).
-Week Sixty-Five (Totalization Agreements).
-Week Sixty-Six (The 7.65% Solution).
-Week Sixty-Seven (No Reform Means The End Of Many Federal Agencies Or, More Likely, Higher Taxes).
-Week Sixty-Eight (Our Next President Faces Serious Social Security Challenges).
-Week Sixty-Nine (Taxing Social Security Benefits).

Posted by Will Franklin · 1 February 2007 10:08 PM

Comments

Can you say . . . ponzi scheme?

Posted by: Ken McCracken at February 2, 2007 12:58 AM

Ponzi schemes are illegal are they not?...

Posted by: zsa zsa at February 2, 2007 07:11 AM

IF this had been a large Corporation??? Look at the Enron situation and compare?

Posted by: zsa zsa at February 2, 2007 07:13 AM

I want to know what fixed position of the Democrats he wants them to give up. If there really anything is behind that statement, I'll listen.

Posted by: Assistant Village Idiot at February 3, 2007 01:12 PM