Before modification by Joel at 04/03/2013 01:39:54 AM
You know, admitted, that; why try to prove their claim with facts INVALIDATING it? The election is over, man, and did not exactly vindicate that strategy. 
When we say food stamps provide "sustenance" we do not mean they make people fat, or rich, or that government cheese is delicious: They survive, with a minimum nutrition standard. Living off MREs is SUSTAINABLE; soldiers can survive on nothing else indefinitely without muscle loss, lethargy or other malnourishment. Many options are tastier and many others cheaper, but that is irrelevant to sustainability. Soldiers on MREs can SUSTAIN a days march; whether to a field position, the next camp or nowhere except back to last nights camp is irrelevant to that. Sufficient soldiers with adequate arms can SUSTAIN an attack; whether it goes like San Juan Hill, Normandy or Picketts Charge does not change that. An attacks sustainability does not depend on its outcome (often, the reverse is true.)
I bolded the condition satisfied by "Kinda hard to run in the red any sort of pension or savings plan where your customer pool has been increasing every year." I agree "Any given year in which the number of people 18-65 outnumber the number of people 65+ that SS doesn't bring in more than it shells out would represent an epic disaster of mismanagement nearly worthing of mass public hangings," but that does NOT mean SS is a Ponzi: It means SS has been mismanaged since (at least) 2011, even though contributors outnumber beneficiaries >2:1, so "get a rope...."
Evidently, Bushs idea to raise the witholding limit then declare multiple witholding tax "holidays" was somewhat inefficient, one might even say, "mismanaged."
Social Security was not just in the black the 1 or 2 months it had a mere handful of beneficiaries but a nation of contributors to eventually pay: It was in the black for each of 900 consecutive months. Literally half "current" beneficiaries were not even BORN when it was created; we (should) have moved past Ponzi comparisons.
Name three 1935 investments that immediately paid their full legally obligated return, each and every month, but STILL had $2.5 trillion in the bank after 75 years. Hell, name ONE: All stocks went up AND down over time, so people who retired on stocks in 1995 or 2000 did great, but those who did it in 2002 or 2009 took a bath (hence we do not do that with SS.) Inflation often outpaced CDs and Treasury securities—EXCEPT (wait for it...) SSs unique Treasury securities, because the CoLA ensures SS ALWAYS beats inflation.
Incidentally, saying, "it is not a Ponzi but it is but I just do not want to CALL it that" is as contradictory as it is inconsistent. My goal here was separating baseless criticism and excuses for SSs abolition from valid criticisms motivating sincere reform. Your inconsistent use of "sustainable" just further muddies rather than clearing the water (not accusing you, but I suspect other Republicans favor it for just that reason.) You have a good mind; wasting it carrying water for rather than fixing the GOP would be tragic. You have no obligation to accept absurd Dem partisanship, but none to accept it from Republicans either, and the sad truth is doing so harms rather than helps your party. It may be impossible to go broke appealing to the Lowest Common Denominator, but the GOP is sure giving it the old college try. 
I not only can but YOU DID: "Any given year in which the number of people 18-65 outnumber the number of people 65+ that SS doesn't bring in more than it shells out would represent an epic disaster of mismanagement." As long as contributors outnumber beneficiaries everything is fine; what makes a Ponzi a Ponzi is that it cannot accomplish that for more than a few months, let alone indefinitely. Ponzis cannot wait two GENERATIONS for new contributors to be born, grow up and enter the workforce, while half their beneficiaries die before reaching eligibility age. Social Security can and does, which makes all the difference in the world. You already explicitly conceded that, so htf can you now say things like:
It still is; we just need to adjust the benefit terms to reflect a centurys worth of changing reality. How best to do that is a valid vital discussion, but it is inane to claim SS was always a Ponzi scheme and thus inherently, inevitably, doomed from the outset to go bankrupt. You KNOW that; why else shy away from the Ponzi charge? If Cannoli and A2Ks charges are substantively valid so is their terminology; if not, not. It is impossible to accept MY logic but THEIR claim, because the two are contradictory. Pick the logic OR the claim; "both" is not among your options.
Savings - Low interest gain, low risk, average low gain
Insurance - No risk, average net loss
You can exist in between these things, insurance as low interest bond or moderate risk investment like a mutual fund, but hand waving is needed to have insurance risks with investment gains. Original SS was insurance, essentially a lottery, most would live to collect it only shortly if at all. It was security, not profit, motivated. Not a pyramid scheme. It began to mutate into one when it was noticed that the number of people paying in would exceed previous years as long as the population was growing which it has been and will continue to be for at least some decades. Thus benefits have been able to be artificially higher while appearing sustainable. The core concept of a mix of savings and insurance is not flawed - my objections to SS conceptually have to do with it being both mandatory and singular in nature, rather than voluntary and allowing some range of options - my objections to how it is being run practically though parallel A2k and Cannoli I imagine.
Not really; they have repeatedly said outright SS was ALWAYS a Ponzi scheme, and therefore a swindle that COULD not remain solvent, on ANY basis. Not that it became one (which does not really work; a Ponzi schemes fraud is inherent in its fundamental structure) but ALWAYS WAS one. That is the basis of their claim SS was always a moneypit that MUST be abolished because it CANNOT be saved. And the fact is, urging we replace defined benefit retirement insurance with gambling at Atlantic City North is still urging we abolish SS, even if the reasons are different. If the GOP honestly thinks it can sell that to America in the wake of Ken Lay, Worldcom, Lehman Bros., Merrill-Lynch, Citigroup et al. fraudulently robbing investors: Good luck.
Trust me, they heard what I was saying more clearly than you did.
Did they? They still say SS could never avoid bankruptcy on any basis. Not "unless it always had more contributors than beneficiaries" (which they claim is impossible, making SS a Ponzi.) Not "unless benefits were restricted to equal or less than contributions." No how, no way; no matter WHAT we do to reform SS it CANNOT be salvaged, because it was a fraudulent Ponzi from inception. Maybe you are not hearing what they are saying, because you and they are NOT making the same argument. At all. You are making my arguments to support their contention; do you genuinely not see the contradiction in that, and if so, HOW?! Their postulates are "absurd" but their conclusion valid?
) debating its return rate/size is quite reasonable. Irrefutably established? We did no such thing, we discussed how an increase in obligations can conceal the sustainability of a system. Robbing Peter to pay Paul is only effective if the specific method involves taking $100 from Peter, earning $10 in interest and returning $100 plus inflation to Peter before giving Paul whatever is left over. Not if it is achieved by getting the $100 from Peter, giving it to Paul, then borrowing $100 from Luke and repeating the operation on Matthew and Mark.
"...an increase in obligations can conceal the sustainability of a system"? Was that a Freudian slip?
Because CONCEALING SSs sustainability is EXACTLY what increased obligations did. It remains as institutionally sustainable as ever (despite many Republicans contending just the opposite,) but raising total benefits without proportionately raising contributions is finally, after 75 years, yielding a net loss.
"Robbing Peter to pay Paul" is back to saying, "SS is a Ponzi scheme, but I will not take the heat for using the term." Call it what it is. Social security insurance—around the world—consists of "robbing" Peter and Pauls 5 kids to pay the 2 of them; nothing unsustainable in that, so few other countries are having our problem. Since 1983 Americans have partially paid their OWN benefits as well as their parents, precisely because the Boomers created a (temporarily) top heavy population pyramid. Debating whether we get the best or even a good return is fair; calling the system mathematically and inherently unsustainable is just horrible math.
Risk and return are not inherently proportional on investment. In a free market system absent fraud and concealment and subsidy a higher rate of return must be promised to potential investors if successful for higher risks to convince them to input their cash. A person informed that investing $100 in a bank for X time will have a 99% chance of returning $120 and 1% of total loss approached by a startup that tell him they can offer him a 50% chance of total loss is going to be expecting at least a 50% chance of getting $240 or more by time X to make it worth their while.
... That means investment risk and return are inherently proportional. High risk, low return investments are unmarketable, because less risk provides the same return. High risk investments are only marketable with proportionaly high return.
We dare not gamble with the whole nations retirement fund.The nice thing about gambling your cash with the gov't, especially the US gov't, is that if it does collapse you are guaranteed to have much more serious concerns then the status of your portfolio, and that our sheer size and quantity of military hardware represents a safeguard against pesky debt collectors in the worst case scenario. We still gamble though, its just the epic-bad loss options on gambling on the stability of a superpower are fairly minimal and likely to be twinned to something of an 'oh, fuck, is that a mushroom cloud?' case. I'm not debating the security of an investment in the US based on its stability and security, I'm debating the management of that investment and the mandatory and singular nature of that investment. I don't think it is morally right to force people to do SS, but I understand and sympathize with the logic of it, I do not understand giving people only one option. One need not include wild gambling to let people have a diversified portfolio subject to some control and options by them, but required by the state and managed principally by the state.
Again, one aspect of a much larger valid discussion. Here is the thing though:
That discussion is impossible until we put to rest the popular but false claim SS is BY NATURE unsustainable. The tens of millions of conservatives who believe it are not interested in better managing what they insist is inherently a Ponzi scheme. The tens of millions of liberals who hear that claim cannot believe conservative demands for "reform" are made in good faith rather than as a Trojan horse for ending SS altogether. Citing all reasons the Ponzi charge is substantively false yet insisting it is nonetheless substantively true but the term unmarketable does not help.
I could ask what non-gambling you have in mind apart from government securities (of which the entire SS trust fund consists; converting them to T-bills etc. would change nothing.) But it is irrelevant while your Congressional delegation tries to abolish SS under the guise of "reforming" it, reducing the Dem delegation to fighting a holding action rather than saving SS. While that impasse endures, SSs chance of doing so diminishes; it is not INHERENTLY unsustainable, but IS unsustainable on its CURRENT TERMS. That was the whole point of "starving the beast," was it not?
Once we agree SS is not an inherently unsustainable Ponzi that must be abolished ere insolvency, THEN we can talk about ways to manage it better. As long as one side tries to get rid of it as a money pit the other cannot take any supposed "reforms" seriously, so no progress is possible.
Hence why I always complain about confusion of concept. Welfare is a form of insurance, taken out by a nation, not an investment though it can have aspects akin to that such as education, training, etc. The left - and I mean the sane left not the fringe commies and the like - are fixated on a safety blanket, which is laudable and in my opinion even practical, I am a Republican, not a Libertarian, and a Christian, not an Objectivist. The issue with the left is that perpetually seek a higher standard and an increasingly lower risk, and faster than society can really build up for that, especially since they also stack on lots of the things that make high return investment harder. It is not simply ensuring that every $1 invested into public works is getting me back a $1, when it should be getting me back at least $1 and in practice is often less than $1, it is also that this is mandatory investment.
If my neighbor sees me unloading my groceries and spots a bag of apples and asks me how much I paid, and I say $5, and he says "Hey, for $4 now I can give you the exact same thing this fall" I have the right to take that offer and be either happy with my investment or angry at getting screwed or I can decline the deal and I have no right to complain. When someone demands my money (democratically, we're not talking robbery here) for a specific investment I have every right to throw a fit if it fails to live up to promises. Alternatively if the gov't approaches us and says "Here's the score, we have three different types of schooling and we'll be taking 5% of your income to fund them, and we'll be taking 5% of the income of the graduates of these schools to give back to you, you get to pick which one your money goes into and those are the grads you'll be getting refunded from." that is an infinitely preferable option to many of us because we have been given an individual choice. More a lot of us feel a system like that would give people motivation to run that system efficiently and effectively.
Again, a valid aspect of a much larger administrative discussion. If/when we ever get past "SS was a fraud doomed to bankruptcy from the start and must be ended before it takes the country down with it" I will be happy to go there. Until then that is not an option, because even when a Republican makes a sincere reform proposal much of the party still uses SSs cited flaws as an excuse to abolish it, prompting most Dems to resist ALL GOP reform efforts (sincere and otherwise.)
More simply: Until we agree SS was not inherently a lost cause from the start, discussing how to save it is pointlesss.
Eliminating withholding or making it means testing is shifting it more to insurance rather than savings, one of the things about SS is that we perpetually tell people they've 'paid into the system', implying savings rather than insurance. The issue with an insurance variety pension system is that a lot of people know very well they have a better than 99% chance of doing better by handling it themselves, and that this is true of everyone who has to be considering withholding limits. Insurance is still an economic concept revolving around risk and benefit tied to pay in vs return by the individual, national welfare systems are by the nation, not the individual. Investment/insurance revolves around everyone involved receiving their risk and benefit relative to their amount of investment, not as a percentage or progressive percentage of their investment.
Now as to LE, that is kinda-sorta right and wouldn't be a bad idea, but it isn't LE that really matters, retirement age onto the public system needs to be tied not to age but to when someone can no longer work to produce. Part of our problem is this relatively new concept of retirement at all. Part of the whole lists of queer ideas that developed mid century. A moral society has a need to attend to those who can't take of themselves and to supplement those who can only partially do so. Nobody should be going from 40-hour work week to 0 hour at age 65 unless they just coincidentally suffered massive impairment one their 65th birthday. It's just a flawed concept, people should work to support themselves until they have the funds to retire if they wish to and in cases where that is not possible they should be working as much as is reasonable and ethical. Frankly I think it almost insane to dump people directly into retirement anyway, not healthy, they should be decreasing their workload gradually and phasing into retirement.
No argument, and as to treating SS as insurance rather than (other) investment: "Old Age, Survivors And Disability Insurance Program." What could be clearer?
A case can be made that the people who owe a debt they themselves inherited are not morally obliged to pay it. One of the reasons I've never seen it as moral to deficit spend outside of a defensive war for survival.
Yes, because by that definition defaulting on most US federal debt would be moral within 20 years. Even if that were moral it could never be tenable. YOU tell my mom it is "moral" to deny her SS benefits after she paid into the system her whole life. Do not kid yourself that argument will get easier to sell once most Boomers are gone and the number of retirees falls. For one thing, we do not have that kind of time, and for another the "Baby Bust" will reduce much of SSs funding problems. But you will NEVER convince most adults who lived through this past decade that they are better off putting their retirement savings in the hands of Lehman Bros. or Ken Lay than the federal governments.