How to Fix Social Security

• Number one is to eliminate everyone that never paid into the system. Social Security was a pension scheme for workers. It was never intended as a lifetime welfare program. It was intended to help a worker after he retired, not pay a drug addict a check from the age of twenty-five till the day he overdoses. Other programs can be set up for welfare payments. It should not be the burden of people who had their payrolls taxed for retirement.
• All savings from payroll and wages should be tax exempt. It makes no sense to discourage capital formation and savings which helps create jobs and tax payments into the system.
• Eliminate the earning restrictions on retried people. Why discourage payments into the social security system? In fact the opposite should be done. Eliminate federal taxes from those working after retirement age. They would continue to pay into social security but in exchange for them deferring social security payments they would be able to work with a federal tax holiday. What would be wrong with productive workers deferring retirement until the age of 75?
• Lastly, eliminate the upper cap on taxable income. People work and plan on their net take-home pay. No one plans to increase their income so that they no longer pay social security taxes. People wish to maximize their income for many reasons and do not regard the upper income cap. Eliminating the upper income cap  brings the system into solvency.

Cooking the Numbers on Social Security

The Obama Administration needs three extra months to release data on how Social Security and Medicare is affected by Health Care reform?

They don't know how they changed and affected Social Security and Medicare?

Think about that. They don't know or they ain't saying. Pelosis was right. They don't know what they did, or more likely are horrified to admit what they did.
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AP Source: Report on Social Security delayed
By MARTIN CRUTSINGER (AP)

WASHINGTON — The Obama administration is delaying release of the annual report on the financial health of Social Security and Medicare so that the new report can reflect the impact of the recently passed health care overhaul.

An administration official told The Associated Press that this year's trustees report will be delayed until June 30, three months later than it usually comes out.

The official, who spoke on condition of anonymity before the formal announcement, said Monday that the delay will allow the government to determine the impact of the massive overhaul of health care that President Barack Obama just signed into law.

In January, Richard Foster, the chief actuary for Medicare, estimated that the Senate bill which passed on Christmas eve would extend the life of the Medicare hospital trust fund by 10 years. The legislation that finally passed Congress was the Senate bill but with revisions approved to win House support.

The administration official said that passage last month of the health care overhaul legislation had made the trustees report, which usually comes out around April 1, obsolete. This official said the decision was made to incorporate all of the changes made by the legislation to better reflect reality now that Congress has passed health care overhaul.

The new health care law seeks to guarantee health insurance coverage for nearly all Americans while cracking down on insurance industry abuses. It also promises to reduce federal deficits by an estimated $143 billion over a decade.

The proposal was passed without any Republican votes. The GOP has vowed to work to repeal the measure and replace it with a less sweeping proposal that they contend would have the support of a greater number of Americans who are worried that the Democratic-sponsored plan will represent massive government intrusion into health care.

Last year's report of the trustees for Social Security and Medicare, the government's two biggest benefit programs, said that the Social Security trust fund would be depleted by 2041 and the Medicare trust fund would be depleted by 2019.

The trustees warned that the financial pressures would begin much sooner when the programs begin paying out more in benefits each year than they collect in taxes. Officials with the Congressional Budget Office say that Social Security will start paying more in benefits than it collects in payroll taxes this year for the first time since the 1980s.

Supporters of the new health care overhaul believe it will have a favorable impact on both Medicare and Social Security, extending the life of both trust funds.

The benefits would occur in large part through lowering health costs by expanding the pool of people buying insurance coverage.

For Medicare, that would result in a direct benefit in lower medical bills while the boost to Social Security would occur in an indirect way. If employers see their costs for health insurance fall, they would have more money to spend on employee salaries. Higher salaries would mean a larger amount of wages that would be subject to the Social Security payroll tax.

This year's trustees report would represent the most authoritative estimate on the impact those changes will have on both Medicare and Social Security.

The report will also estimate the impact the health care overhaul will have on the premiums that Medicare recipients must pay. Supporters of the overhaul believe those premium costs will fall.

The estimate that Social Security will pay out more in benefits this year than it collects in taxes is based on budget data produced by the nonpartisan Congressional Budget Office. The CBO projects that because of a recession that cut the number of people working and paying payroll taxes, Social Security will be paying out more in benefits this year and for the next three years.

CBO analysts see Social Security returning to small surpluses in 2014 and 2015 before returning to indefinite deficits starting in 2016 under the impact of a rising number of the 78 million baby boomers retiring.

The Elephant Bar Solution to Social Security

The boomers are lining up for social security and everyone knows that the system will shortly be stretched to the limit. Meanwhile many of those who have been frugal have seen both their 401k's and equity in real estate diminished. There is a rather simple and elegant solution. It would include these points:

• Allow potential retirees to opt out of the system on a yearly basis in exchange for permitting them to work without paying any income taxes with no income limit.
• Allow those who are at retirement age to collect medicare. This would relieve worry about medical coverage, both privately and from employers.
• Those opting to take the tax free income would continue to make payments into social security but the matching component by the employer would be dropped.
• There would be no cap on social security payments by the tax exempt earner.
• The combination would be very attractive to employers as they could hire skilled people without healthcare costs and with reduced tax liabilities.
• This system would be very attractive to entrepreneurs and would create jobs.
• Senior workers would have a higher propensity to save and that would help build the national saving base.

There is no reason why many millions of potential retirees could not work well into their seventies if they so chose and defer retirement in exchange for tax free earnings.

Republicans, Grow a Backbone. Sieze the Moment.

Events in the World are presenting an opportunity to positively change the US Social Security System. The Democrats, handcuffed by their doctrinaire rhetoric, cannot make the bold move. Republicans can change the subject of the campaign and form a winning strategy based on the financial security of American pensioners. The opportunity, discussed in our previous post, has to do with the recent formation of sovereign funds , by countries bursting with US dollars. The article below is telling: ...

About two dozen countries have established sovereign wealth funds, including Iran, the United Arab Emirates, Singapore, Kuwait, Australia and Russia. While precise data about each of the funds can be difficult to obtain, most Wall Street analysts agree that the value of the funds has reached about $2 trillion and is likely to grow at least fivefold by 2012."

The US may be in deficit, but the US Social Security System is in surplus. The political ball is there to be snatched up. The US has to get into the game and while the rest of the world is recycling their surplus, we can solve the unfunded liability of the social security system at a time when many American families are losing anticipated equity growth in their homes.

Oil and Trade Gains Make Major Investors Of Developing Nations

By David Cho and Thomas Heath
Washington Post Staff Writers
Tuesday, October 30, 2007; Page A01

The government of Libya, flush with oil, has amassed $40 billion and is ready to put it in play on Wall Street. China recently acquired a huge stake in one of the biggest names in U.S. finance. Tiny Qatar is adding $1 billion a week to its investment coffers and is trying to buy the leading grocer in Britain.

Developing nations, especially in Asia and the Middle East, are aggressively stockpiling some of the largest concentrations of investment money in history. The cash hoards, called sovereign wealth funds, are controlled not by state-run companies or private investors but by governments.

These investment pools are equal to or even bigger than the largest pension and private-equity funds in the United States, and many are highly secretive about their activities. The Abu Dhabi Investment Authority has an estimated $875 billion to invest, while China's first stab at a sovereign wealth fund, which started last month, has $200 billion. The largest private-equity firm has about $90 billion under management.

Sovereign wealth funds have been around for decades. But enriched by the surge in the price of oil, which settled at a record $93.53 yesterday, and the trade gap between the United States and Asia, these funds have grown to gigantic proportions. This has alarmed U.S. politicians and regulators, some of whom held a series of meetings on the topic here this month. Some on Wall Street say the growing prominence of these funds portends a fundamental shift in financing power away from Western nations.

"It's evidence of the emergence of the developing world as an economic superpower and . . . of a shift of economic power away from the United States," said Alex Patelis, head of international economics at Merrill Lynch.

In the past, these funds had largely been content to hold safe, low-yielding investments such as U.S. Treasurys. Now, with the expectation that Treasury yields could be low for years and the recent weakening in the U.S. dollar, they are seeking higher returns and taking bigger risks.

Some are buying stakes in key industries in the United States and Europe, including banks, ports, stock exchanges and energy companies. Others are looking beyond opportunities in the West, shoring up Asian banks and building Africa's infrastructure.

The new, more aggressive investing strategy is reigniting nationalistic sentiments around the world. Germany has been alarmed at Russia's move to acquire stakes in pipeline and utility companies. New Zealand opposed an effort by Dubai investors to take over a major airport.

In the United States, lawmakers reacted strongly against a state-run Chinese firm that tried to take over a U.S. oil company in 2005 and a Dubai firm that wanted to buy U.S. seaports last year. But the response to sovereign wealth funds has been more mixed.

Few eyebrows on Capitol Hill were raised when Dubai paid $825 million for U.S. clothing retailer Barneys in June and followed it with a 19.9 percent stake in the Nasdaq Stock Market last month. But some officials are concerned about what other kinds of businesses might be bought by governments that are secretive about their investment activities. It would be difficult to know whether these countries are just aiming to make money or have ulterior motives.

The emergence of sovereign funds "challenges us to ask whether these many benefits of markets and private ownership will be threatened if government ownership in the economy . . . becomes more significant," said Securities and Exchange Commission Chairman Christopher Cox at a speech at Harvard University last week. "When the regulator and the regulated are one and the same, deference to [sovereign wealth funds] can all too easily trump vigorous and neutral enforcement."

"You can see already in 10 to 20 years these funds are going to lead to a sophisticated asset-management system in Asia and the Middle East," said Patelis, of Merrill Lynch. "We already have huge interest among our clients to link up with these funds. Everybody wants us to introduce them."...

the rest here

In 2004, the Democrats Opposed Putting Social Security Funds in Stocks. Since then, SP500 Goes from 1040-1500. Up 44%.

The big thing today, that sends shivers down the spines of Democrats, are sovereign funds. These are mostly US currency and US treasury bonds held by the Arabs, Chinese, Russian and other Asian government central banks. The sovereign funds exceed two trillion dollars. The Communists, wisely, have decided to do something useful with their piles. They are going to invest them, hopefully in the US market.

We had a chance to get in on the action but our Democratic rulers and masters in Washington are counter-intuitive. They unlike, the Chinese, do not trust the market, except of course for their own private equities. The Democrats scared our Republicans poopless over the surplus social security funds. Privately, Hillary Clinton, Al Gore, John Edwards and Democratic money man George Soros, have piles of money, and the piles gets bigger and bigger, because they are invested in US stocks and bonds. They denied that benefit to American pensioners.

That was easy for them to do in America because of one persistent American surplus, economic illiteracy. We have that by the bazillions.

No one can beat us in mass stupidity when it comes to to misunderstanding our own economic and capitalist system, courtesy of the trillions spent on US public education.

Maybe we will catch on when the surpluses in social security run out. Here is what the Republicans should be reminding the American public about what the leftist Democrats said in 2004:

Twelve Reasons Why Privatizing Social Security is a Bad Idea
SocialSecurity.org
Greg Anrig, Jr., Bernard Wasow, The Century Foundation, 12/14/2004

Addressing Social Security’s potential long-term financing challenges by taking the dramatic step of diverting its payroll taxes to create new personal accounts will have drastic consequences for federal finances, future retirees, and those who rely on the system the most. Learn more about twelve major reasons why less costly and less painful reforms should be considered instead.

Reason #1: Today's insurance to protect workers and their families against death and disability would be threatened.

Reason #2: Creating private accounts would make Social Security's financing problem worse, not better.

Reason #3: Creating private accounts could dampen economic growth, which would further weaken Social Security's future finances.

Reason #4: Privatization has been a disappointment elsewhere.

Reason #5: The odds are against individuals investing successfully.

Reason #6: What you get will depend on whether you retire when the market is up or down.

Reason #7: Wall Street would reap windfalls from your taxes.

Reason #8: Private accounts would require a new government bureaucracy.

Reason #9: Young people would be worse off.

Reason # 10: Women stand to lose the most.

Reason #11: African Americans and Latin Americans also would become more vulnerable under privatization.

Reason #12: Retirees will not be protected against inflation.