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Sat Dec 8, 2012, 07:14 PM

You Must Read This If You Receive Social Security Or May Receive It



Read Original HERE.

The article in Slate titled CPI Unchained by Matthew Yglesias must be read and comprehended by every American that may possibly be depending on receiving Social Security. While the politicians are claiming that the battle over the fiscal cliff will not involve Social Security, every American citizen will need to remain vigilant.

It is easy to manipulate a program as big as Social Security in forms that are not immediately evident. In his piece Mr. Yglesias details some shenanigans that both Republican and Democratic politicians seem to support. Specifically it involves indexing Social Security to inflation differently.

Mr. Yglesias explains it this way.

The way the index works is that the Bureau of Labor Statistics sends its minions out through the country to find out what things cost. They write this down, and the bureau notes the change over time. Then it weights the change in the price of different things according to how large a share they are in the typical consumer’s overall basket of purchases. An increase in the price of cars is a bigger deal than an increase in the price of violins because the average American spends much more on cars than on violins. The bureau also adds in some fancy math and a bit of hand-waving to try to account for changes in the quality of goods and the arrival of whole new products. The idea is to track the prices of a constant basket of goods over time.

“Chaining” the index means taking a slightly broader view of how the baskets should work in order to account for switching behavior. One reason people buy pork, for example, is that it’s cheaper than beef. But so is chicken. So if pork prices rise, price-sensitive shoppers will probably shift and buy less pork and more chicken. In other words, the price of pork went up, but the overall impact on meat prices is smaller than a naïve look at the movement in pork prices would suggest.


One must realize that over the years this type of indexing progressively make social security recipients poorer and poorer. Not only does it affect current recipients, but future recipients as their starting base would have started from a declined position, than had Social Security kept pace with real inflation.

One should note that Social Security is an entitlement that most have worked for. It is a pact between workers and society. One works during their most productive years knowing that they will receive a living stipend that they paid for based on their level of income.

Whenever America has “wanted” to go to wars to protect mostly the interests of the Plutocracy, mostly middle class, and poor Americans have bled and died to fight these wars. Middle class America has paid for the country’s infrastructure and military thorough regressive taxes, low wages, and the purchase of overpriced products. Middle class America has afforded the wealthy their wealth and security.

Dependable Social Security is the least that must be afforded to American retirees. They have earned it. While it is true that the baby boom will put a strain on Social Security, that strain is temporary and must be amortized over a generation.

Currently the wealthy pays no Social Security taxes over $110,000 of their income. This means the person who makes $110,000 pays the same amount of social security as that person that makes $100 million. This is patently unfair and should be where the solution to the Social Security shortfall starts. While there is a fallacy that there are not enough rich people to make up the shortfall, real arithmetic makes that the lie that generally goes un-refuted in the mainstream med The top 20% of Americans make over 50% of all income, the top 40% almost 75% of the income.

One should not believe that there is some attempt to soak the rich. The very hardworking middle class citizen is simply being made poor by the systematic pilfering through various methods. Indexing Social Security as described above removes the duty of those that have not paid their fair share into it and whose wealth because of compound growth, have extracted more capital from society consummate with their work or deeds. Social Security is an entitlement that must remain unchanged.

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Arrow 10 replies Author Time Post
Reply You Must Read This If You Receive Social Security Or May Receive It (Original post)
egbertowillies Dec 2012 OP
NCarolinawoman Dec 2012 #1
dkf Dec 2012 #2
jeff47 Dec 2012 #3
eridani Dec 2012 #4
sorefeet Dec 2012 #5
No Vested Interest Dec 2012 #6
snogwabble Dec 2012 #7
NMDemDist2 Dec 2012 #8
RebelOne Dec 2012 #9
Filibuster Harry Dec 2012 #10

Response to egbertowillies (Original post)

Sat Dec 8, 2012, 07:41 PM

1. Food prices have been going up for several years now, but

it seems it was only until recently that the government finally acknowledged this.

People in the REAL knew what was going on at the grocery store. Everybody has been talking about this for a long, long time.

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Response to egbertowillies (Original post)

Sat Dec 8, 2012, 08:28 PM

2. Again if you raise the cap do you also raise the eventual payment?

 

If you disconnect the relationship between what you put in and what you receive are all future payment also subject to being reduced?

If some people pay millions, future generations may need to pay these people huge social security checks.

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Response to dkf (Reply #2)

Sat Dec 8, 2012, 09:08 PM

3. Yes, but you don't raise it as much as the tax

That way the "rich" folks in the retirement home will still get to feel superior in return for paying more. Yet the additional revenue handles getting everyone paid.

If some people pay millions, future generations may need to pay these people huge social security checks.

Which will be paid by the rich people in those future generations.

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Response to dkf (Reply #2)

Sat Dec 8, 2012, 09:15 PM

4. There is currently an upper limit of ~$32K/ year on benefits

This could be replaced by a rising line with a comparatlvely flat slope. BTW, it's insane to suggest that anyone paying in get nothing. Already initial benefits calculations are slanted toward lower income people, and they could stand to favor them even more iMO.

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Response to egbertowillies (Original post)

Sat Dec 8, 2012, 10:16 PM

5. I'm only one person

and I bet I know a dozen men who worked for 25 0r 35 years, never had a pot to piss in, kids or a wife and they died. They paid into social security but never got to collect. My brother died in October at 54, paid in to SS for a good 25 years and no one to collect it. He got about one year of medicade before he died. So that has to contribute something to SS from all the people who don't get to collect it. Not everyone gets to collect from the money they put in. Most of the people who I know that abuse alcohol (especially) and hard drugs have already or will meet an early demise I have just seen too much of it in my life.

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Response to sorefeet (Reply #5)

Sun Dec 9, 2012, 02:02 AM

6. Social Security is a form of insurance or annuity

If a person dies with minor children (under 18) those children will get SS payments until they turn 18.
The widow or widower who has not worked enough to earn SS payments on their own will get full payment the spouse would have gotten had he/she survived. It can be collected at 62 at a reduced rate.

For everyone who dies prematurely (before eligible to collect SS) there must be 10, maybe 20 who live long enough to collect multiple times what they contributed.

Then there is the situation where if you contributed enough to be eligible for both Social Security and a state pension, your benefits are reduced considerably, so that you cannot benefit appreciably be "double-dipping".

My view is that the age to be eligible for Social Security should not be raised any more than now permitted in the law. Many people simply are not physically able to work past 66 or 67. I'm not looking for the SS payment to be reduced, but, in my opinion, it would be better to reduce it slightly than to raise the age of eligibility.

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Response to egbertowillies (Original post)

Sun Dec 9, 2012, 02:28 AM

7. The future of social security.

On the Conservative agenda, the first to be totally axed from social security shall be the unemployed. The Fox media wil insidiously appeal to parochialism, saying the unemployed are bludgers, loafers, parasites, anti-socials, etc. They will have the more financially secure Sheeple bleating, " don't pay them any money '. the type of pampered sheeple who can't or won't see things at ground level. The Conservatives will have military veterans the very last on their social security cutbacks. Military memorialism is a valued parochial/false patriotic rallying cry for the business suits runing the corporate media. It helps the business media sector engage in prideful mutual ingratiation with the sheeple. So military veterans are relatively safe on the social security front. No dole - the Conservatives will make a Third World dump of the USA - unemployed will be hawking trinkets at intersections to tourists, whilst the military wil be pampered by taxpayer endowments in the trillions of dollars per annum. This class warfare is based primarily on the rich parasites' perpetual resentment to paying tax, out of a non-allegiance to the country per-se.

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Response to snogwabble (Reply #7)

Sun Dec 9, 2012, 05:42 PM

8. Welcome to DU snogwabble!

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Response to egbertowillies (Original post)

Sun Dec 9, 2012, 06:25 PM

9. I am currently collecting Social Security.

So how does this affect me now? I am a vegetarian, so I am not worried about the price of pork or chicken.

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Response to egbertowillies (Original post)

Tue Dec 11, 2012, 02:38 PM

10. Just back from a seminar in which social security and its future was discussed.

many ideas for solutions were discussed. The more popular ones were raising the retirement age as well as raising the base salary. The base salary would go up to a max of $ 190,000.- and the rate up to 8.2%.
Now according to one source, this has been discussed in congress but confusion arises when congress agreed to reduce the rate from 6.2% to 4.2%. Because this impacted ALL earners whereas the Work for Pay Credit
only impacted those low income earners on their first $ 20,000.- It was discussed that the 4.2% be raised to 6.2% but the Work for Pay Credit be reinstalled for low income earners up to $ 50,000.-

Also remember that the government owes the social security trust fund.

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