Should you pay so people can have beer and DVD's while not saving?
Published on April 29, 2007 By greywar In Politics

 *edited to include drmiler's dispute over the payout arrangement of Social Security. I will have to do more research on this aspect.   

      There is a nice article over at National Review dealing with Social Security and it's impending collapse. I suggest you read it but in case you don't want to I will summarize the key points:


1. Social Security will not cover its yearly payouts with contributions starting in 2017. Then it would have to rely on the trust fund (where past surpluses were supposed to have gone).

2. The trust fund would keep it running until 2041.

3. The trust fund is already gone (long, long gone actually).

4. This means that in 2017 Social Security is broke. We will either have o lower benefits or raise Social Security deductions from current workers.


     The article goes on to laud the benefits of private retirement accounts. This is fine and true but also not the point. Social Security is not about your retirement. It is about other people's retirement and sundry payouts.

      This is why Social Security is going broke. If you simply paid a given amount of money into the government during your working years and had it doled back out to you when you retire Social Security would be just fine even if it didn't pay you interest on your money.

     The problem is that Social Security takes the money you have paid in and gives part of it away to other people who either didn't pay in as much as you did or even to some who never did or ever will pay in a dime.

      Social Security payments pay around a center line*. If your career was spent earning (and thusly contributing) less than the average American worker you will be paid back more than you contributed. The poorer you were the bigger the difference. Conversely if you were well paid during your lifetime you won't get back out as much as you paid in. Social Security is also used as payments to people who do not and cannot ever pay into the system (like the mentally handicapped).

 

*drmiler disputes this part of the article and has personal experience to back it up:


"This where you're dead wrong! What you get is based "solely" on how much you put in. So much per quarter. When you apply they take what you've paid in over your working years add it up and divide that by 20 (years which is what they figure you'll last). The figure is now your annual income. So you take that and divide it by 12 (months) and that's what you get per month! And don't try to tell me different. I "just" went through this with my wife. So I'm 100% positive on those figures. And it's the same figures with disability. Which I know because "I" went through that!"


     Add in the overhead of a large government agency running the program and you get a negative rate of return overall. Run this way for enough years and add in the fact that people retire earlier and live longer and get what we have: a program that is mathematically unsustainable without even more taxation.

     This is why comparing Social Security to private accounts, IRAs, or 401k plans is senseless. None of those plans are intended to do anything for anyone except the person who pays into them. No one else gets paid, they are invested in solid plans, and they have a lot less admin overhead.

     The only issue to decide is whether you think that people at or above the median income in America owe a retirement to those who live below it or to those that cannot work at all. In essence it is Capitalism vs. Socialism and what balance is to be struck between the two as a moral society.

     My opinion is that the folks like the mentally handicapped should be cared for with monies held separate from anything intended as retirement for anyone. Simply make it a separate tax. Aside from that I do not buy into Social Security for anyone of my generation or later. If you were born after 1970 and can't figure out how to succeed moderately over the course of a 45-47 year working career with the current flood of government subsidies, education programs, and job placement programs then I don't have a lot of sympathy for you.

     Americans seem to believe that they shouldn't have to budget or live within their means. Most of the minimum wage people I worked with over the years drove cars that were more expensive than they needed. They bought fast food for lunch and got their groceries at expensive places like the 7-11 rather than go to the grocery store.

     Many drank, smoked weed, or had other recreational drug habits. They had nice stereos, TV's, and multimedia electronics while collecting food stamps or other government benefits (read as your tax money). I would say that 98% of the minimum wage co-workers I had over the years could have lived comfortably while saving 10-15% of their income.

     There were exceptions to this rule but these were mainly the fast food folks with lots of kids; a personal choice. Almost all of them could have started saving for retirement at age 18 or even sooner since many had worked in for minimum wage since age 14 or 15 (not an upwardly mobile crowd you see) had they simply cut back on non-essentials and saved some money. The issue was not that they couldn't save but rather that they didn't want to make the sacrifices to do so. Should this sort of decision making be paid for by the taxpayer?

     It would have been hard but even working as a pizza guy I could have saved enough for a modest retirement over the course of 47 years. I would have had to lower my current standard of living and cut out most entertainment expenses of course.  I don't think anyone should owe me any money when I am 65 just because I wouldn't do without DVD's, fast food, or a car I shouldn't have bought. You should have to make the right choices to be rewarded.

 

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Comments (Page 4)
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on May 01, 2007
Average preson in the bottom 10%tile in the United States works less than 20 hours per week and is has no listed disabilities.


They have no listed disabilities because that can't afford treatment! duh!

Or they can't afford transportation

or they have young kids at home and can't afford to pay someone else to care for them.
on May 01, 2007
Ugh,

I was trying so hard to save those 30 for retirement that I forgot that my parents need their medications each month... now what do I do?
on May 01, 2007

Comon, Draginol, you know how most humans are. not very charitable. Giving a lot is not easy for the average person.

I would like to see your source on that.  Since all the studies I have seen contradict that statement.

on May 01, 2007
In the year 2005, individuals, corporations, and foundations gave $260 billion in charitable contributions to nonprofits


If you combine what we voluntarily give with what the government forcibly takes from us so they can 'give'....I'd say we're a pretty freakin' charitable nation


the non-profit sector accounts for 5.2% of our nation's gross domestic product and 8.3% of the wages and salaries paid in the United States.


Thanks LW, that should answer Doc's question.

Now let's look at these numbers.

First, we certainly are Very Charitable nation.

Second, How much more you think we can give? As it is, with all that charity, it is only a small % of what is required. the total of the programs that you guys are complaining about is at least 5 times as much. even if we double our contributions, we still be short of covering what we do now, which is not enough since about 35 million people currently living at or below poverty level.

We can certainly cut the waste, improve effeciency, minimize fraud, and do a lot more to use the money available in a better way. But eliminating these programs will have surprising unintended consequences that will hurt the people who are complaining now the most.

look at what Draginol said:

if people buying my software are doing so from welfare then that's not a good thing


Sure it is not a good thing. but for whom? for me not you Draginol for sure. It is good for you. but you are the one complaining.
I am not complaining. I know the money is used in a way that is not very smart in this case. but it makes your business go on and that is good and you hire people and you and them pay taxes.

so the balance is not bad, even the act was not very smart. now think how the balance is for all the other cases where the money is spent wisely.

So, overall, it is really excellent deal for all of us, specially the business owners. and they are the ones, at least most of them, who complain.

As i said, i trully think it is a love-to-hate thing. i hate paying too. but i hate going to the dentist and to doctors in general and i hate standing in line and waiting my turn. but if i eliminate these things, who will be the first to complain? ME. i can assure you of that. I cant stand permanent pain and i am very lousy in any disorganized setting. i cant do anything. i will be lost if there was no lines to stand in.


on May 01, 2007

that should answer Doc's question.

No, it does not.  I will concede that perhaps a cup half full to one is half empty to another, but you made a very blanket statement that is not born out in any numbers supplied so far.

Part of the problem in giving is in living.  i.e., taxes come before anything.  Get the government out of the charity (or welfare - your choice of words), and you not only put more money in the pockets of people that can be used for charity (and I am not going to argue a 1-1 relationship), but you cut out a huge and wasteful bureaucracy that siphons off a large percent of that money in administrative overhead.

Again, you said:

you know how most humans are. not very charitable

Which regardless of the numbers so far presented, is nor represented by the data.  Simply put, it appears that humans are very charitable - but for whose definition of it?  A welfare state's?  Or in the amount that you or I give?

So you have actually opened a 2 part question with one blanket statement.  One is how much (which was answered) and how does that relate to the needs that are out there?  Seems to me that between a very ineffecient government and what we are giving to existing charities, it is keeping the needs of those in need satisfied.  So should we give more so they not only have their needs filled - but their mercedes Benz as well?

on May 01, 2007
I dunno about the rest, but if you're a single person who is spending $300 a month on food, you're eating too damned much or not spending wisely at the grocery store.



Don't ya remember that I'm feeding my parents too? Are you including toilet paper and tampons and cleaning products and laundry soap and all this misc stuff - because I am.
on May 01, 2007

You still missing the point that you agree with. "people should" doesnt make it happen. i said not enough of us are willing to do that on their own. what do you do if that is the case, which is the existing reality?

People should be nice too.  But in reality, they don't.  I don't feel any moral responsibility to give money to stupid people who couldn't be bothered to save up for retirement.  Americans DO give enough to charity to ensure that no Americans starve. You may want to look up some of the stats on private charitable giving in this country.

There is no middle ground on this particular issue - you are either forcibly taking from people to give to another or you're not. I think it's wrong to loot from people.

Also, promoting the general welfare does not mean income re-distribution.  You might want to read the Federalist Papers to learn what the founding fathers meant.

This article isn't some vague question. It is specific - should we pay for the retirement for other people. My answer is: No.  I am okay with stupid people who didn't retire starving to death (even though that wouldn't happen).

Believe it or not, elderly Americans were not starving enmasse on the streets prior to the 20th century.  They had these things called families who took care of them. This is the way most of society has lived throughout human history.

the reason is simple. not everyone is a genius like Draginol.

Comon, Draginol, there cant be 35 million lazy bums among us. we are not that bad.

Yes, there are 35 million idiots (at least) in the United States.  As someone who has years of experience in hiring people (and the people I hire are generally far above average) I have seen plenty of the kind of people who end up relying on people like me to feed and shelter them when they retire.

It doesn't take a genius to say $20 a week. It just requires some basic personal discipline.

They have no listed disabilities because that can't afford treatment! duh!

Or they can't afford transportation

or they have young kids at home and can't afford to pay someone else to care for them.

This is too stupid to respond to.  You should get out more, talk to a social worker or two. 

 

 

on May 01, 2007
Seems to me that between a very ineffecient government and what we are giving to existing charities, it is keeping the needs of those in need satisfied. So should we give more so they not only have their needs filled - but their mercedes Benz as well?


Not all of them Doc. there are a lot of people, specially in the country and rural areas that are really living at or below poverty level. So, please dont take it on them because some, specially in urban area are real crooks. the question is do we want to hurt the real poor because of the actions of the crooks. You think private charities are managed better. believe me, they have their crooks too.

I wish it was possible to have a perfect system with no crooks or thieves.

It really depends on what society we like USA to be. Other rich Nations dont have the programs we have, do we want to be like them? I want USA to be better even if that will let some crooks in. you disagree, but i think you want it to be better too. you think this can be achieved by private donations. I dont think it will achieve the same thing. we will be less than what you and I want.
on May 01, 2007

Now, with regarsd to Q of the Day:

Let’s just say that I’m one of those lazy, good-for-nothing schmucks that finally gets off my butt and goes to work at 25. But I’m not as smart as you are. I’m making $8/hr with hopes of a 2% raise each year (I have high hopes).

For starters, if you're over 35 making $8 per hour you have either chosen that job because you want to live that way, have health problems or you're a loser who has managed to go over 15 years without developing any skills. There may be some people who don't fit into one of those categories but for the most part, those are the types that are making $8 an hour at 35 or older.

The base salary of an office worker (someone who answers phones, photo copies, does email, etc.) is well over $10 per hour and that's usually someone right out of high school or college. 

So my first question to you is, what the hell are you doing with your life?

Secondly, $8 an hour is around $1,400 a month. 

Let's talk about your costs:

Housing is probably at least $300 assuming you live in a dumpy mobile home park and have no insurance
Utilities $150 (heating, elect, phone)
Food $300
Clothing/misc. $25 (I’ll shop at Good Will for clothing but must by new shoes – they have a crappy selection and I know this from personal experience – I’ve also got a bunion and wide feet so they cost $30 a pair)
Transportation $100 I’ll drive a clunker (which will need lots of repairs)
Gas $175+ (remember I’m driving a clunker so its mileage stinks)
SS taxes 86
Fed tax 70
Medicare 20
Personal allowance $40
Prescriptions $60 (remember I have no insurance but I do have high blood pressure and take antidepressants)

First thing you do is get an apartment with a roommate which should cost you less than $400 per month with utilities. So now you have around $1,000 per month.

If you're spending $300 per month on food, you're a dumbass. My family of 5 spends around $600 per month on food and we don't skimp.  You should be able to eat decently on around $150 per month ($200 tops).

Why are you spending $25 on clothing each month?  You spend nearly $300 a year on clothing? That's more than I spend.

My Jaguar gets 15 miles per gallon. I fill up twice per month at around $40 per fill up for a total of $80 per month.   You can't manage manage to get a Toyota that gets 30 miles per gallon? Even an old clunker can do tha tif it's small.  So where in the hell do you need $175 per month on gas? You driving over 50 miles per day to your $8 an hour job???

The federal taxes you get back so you can't count that.  What is personal allowance? 

But just casually looking at your own budget, you are wasting easily $200 from where I'm sitting.

But let's get to the meat: Do you really believe it's my responsibility to take care of you in your old age?

It's easy for guys like you to cry about "bias against the poor" or sound compassionate because you don't actually have to do anything to back up your principles.  It's guys like me who end up having to deliver. 

That's one of the things that makes me so resentful of welfare programs. Guys like you will spit out how greedy or uncaring I am even as you cash checks paid for by guys like me.

Pyramid schemes like Social Security and Medicare hide the fact that people are getting money paid for by other people that they didn't earn.  With retirement age now 65 but people living until 75 or 80 or older, that's 15 years of money that typically goes way beyond what they ever put in.

on May 01, 2007

there are a lot of people, specially in the country and rural areas that are really living at or below poverty level.

Other than those that CHOOSE to live that way, I defy you to find any living below poverty.  Poverty being defined as not being able to adequately feed oneself (or family in the case of a head of household), or provide shelter.

Note, I did not say Poor, but poverty.  Note also I am not using the Government's definition (since it is indexed and hence will always be with us regardles of the standard of living defined).

Now, you might want to check out a list on Island Dogs latest article that shows 80 welfare or safety net programs available.  You might also want to show where those programs cannot be used by the people you have tried to define.  Then you may want to show where they have been denied assistance by any charity organization they have applied for.

Simply put, you are going to be hard pressed to gather those statistics, much less prove such a nebulous assertion as you have made.  For other than those that chose to be homeless, there really is no one in this country that lives in poverty.  Poor?  Sure.  But when 90% of the "poor" in this country have at least one TV (hardly a necessity), 75% have a car (definitely not a necessity), and over 70% suffer from obesity (hardly the symptom of a lack of food - whether it is nutritious or not is another matter altogether), you are not going to convince anyone outside the DNC or the left that there is non-voluntary poverty in America.

on May 01, 2007

(regarding people using welfare money to buy my products ThinkAloud responded)

Sure it is not a good thing. but for whom? for me not you Draginol for sure. It is good for you. but you are the one complaining.
I am not complaining. I know the money is used in a way that is not very smart in this case. but it makes your business go on and that is good and you hire people and you and them pay taxes.

No, it's not good for me.

If I can turn every $1 of capital into $5 then when the government takes that $1 much of it is lost to beauracracy. Hence, only around 25 cents gets to the recipient.

So why should I get excited if that 25 cents of the $1 I paid makes its way back to me in the form of a software purchase? I would rather have kept the dollar in the first place. 

Your line of thinking would be like me going to Best Buy and buying my own game thinking I got a good deal because the money comes back to me.  But not all of it does. That $40 game only results me me getting $20 of it because of all the beauracy (middle men) involved.

So, overall, it is really excellent deal for all of us, specially the business owners. and they are the ones, at least most of them, who complain.

And this is why you are poor. You really have no understanding of economics.  Looting money from me and then giving me back a pittance is not a good deal.

The best thing our federal government can do for the vast majority of people is to leave us the hell alone.

on May 01, 2007

It really depends on what society we like USA to be. Other rich Nations dont have the programs we have, do we want to be like them? I want USA to be better even if that will let some crooks in. you disagree, but i think you want it to be better too. you think this can be achieved by private donations. I dont think it will achieve the same thing. we will be less than what you and I want.

Other rich countries have even more programs. And we don't want to be like them.

I would rather be a society that values self-reliance than a society that has endless amounts of compassion.

As LW pointed out, we give hundreds of billions of dollars to charity each year. But at the end of the day, as long as people feel entitled to have a certain standard of living, whether they've earned it or not, we will always have demands for people to leech off of others.

on May 01, 2007

Not all of them Doc. there are a lot of people, specially in the country and rural areas that are really living at or below poverty level. So, please dont take it on them because some, specially in urban area are real crooks. the question is do we want to hurt the real poor because of the actions of the crooks. You think private charities are managed better. believe me, they have their crooks too.

First off, bullshit. Only a tiny % of Americans, mostly in urban areas, live in anything that could be considered true poverty. You need to quit thinking with your gut and research some of this stuff before spouting off things that are patently untrue.

Secondly, the difference between charities and the government is that governments force me, at the point of the gun, to contribute to them, charities do not.  I gave more to charity last year than you made. Much more.  But I chose to do that and I picked charities I felt were the most effective.

The government, however, took vastly more than that from me.  Money that I would have used to hire more people to keep growing faster.  The federal government alone prevented me from hiring 10 more people last year.  TEN people.  Do you think the government created 10 jobs with that same money? Hell no.  

on May 01, 2007
If I can turn every $1 of capital into $5 then when the government takes that $1 much of it is lost to beauracracy. Hence, only around 25 cents gets to the recipient..... Draginol


the other 75 cents go to others (the beauracracy) and are used similarly. in effect they go back into the market where they get back to business owners. those 75 cents do not disappear in the great void, they work and are part of the economy that makes it possible for you to turn $1 into $5. if that $1 is withdrawn from the market there will be no room for you to expand. and your $1 will just sit idle. there will be no need to hire more people.

In the first place, our arbitrarily set 'poverty level' has nothing to do with true poverty.


very true. and that is the USA. It is not other countries we talking about. our poors are considered rich in other countries. but to our standard of living they are "poor". no one is denying that. if you prefer to degrade our society to a lower level, then that is something else. I dont want that.

I gave more to charity last year than you made. Much more.


Good, but why did you do that considering the following?:

The government, however, took vastly more than that from me. Money that I would have used to hire more people to keep growing faster


there must be a good reason for you to pay more in addition to what the government took. you didnt have to do that. why didnt you use those contributions to create more jobs? according to you, those jobs are more effecient use of your money. Why then did you pay the money to charity? most Charities deal with what you call lazy bums, why are you still paying for them?

From the size of the contributions in this country, a lot of people must feel that the government is not doing enough. is that wrong conclusion too?

The standard of living of the society you live in does not depend only on your own standard, it also depends on the standard of living of all around you. what we call poor countries, have people richer than many in the USA, but their standard of living is still poor. driving your Jaguar in dirty streets full of people in dirty clothes doesnt feel good at all and doesnt make you feel that you are well-off at all. Go live in one of these countries for a month and you will know what i mean.

Money in the bank (or how fast you expand your business) is not everything Draginol, it is much more than that. Trust me, you will be the first to complain if this society make the changes that you and LW envision.

There will always be lazy bums and poors no matter what we or any society do. that is natural. not everyone is motivated or honest. Rich societies try to minimize their numbers and make their condition a decent one in order for the society in general to enjoy its rich status. That is really how we got to where we are now. it was not like that 200 yrs ago. how did we get here? we are not that dumb or just want to take money from people against their will. it is a necessity you just dont like. All of us dont like it either. but it is the cost of living the way we are.



on May 01, 2007
LW,

Don't ya remember that I'm feeding my parents too?Show me where they are included in this budget, please.


I said that I'm single - i.e. no spouse no kids - not that I didn't have a family. There is a difference. Maybe I do spend a little too much on food, but I'm not buying weed, or crack, or CDs or DVDs. It's food for me and my family. Are you going to tell me how much I can spend on food?

Brad,

For starters, if you're over 35 making $8 per hour you have either chosen that job because you want to live that way, have health problems or you're a loser who has managed to go over 15 years without developing any skills. There may be some people who don't fit into one of those categories but for the most part, those are the types that are making $8 an hour at 35 or older.The base salary of an office worker (someone who answers phones, photo copies, does email, etc.) is well over $10 per hour and that's usually someone right out of high school or college. So my first question to you is, what the hell are you doing with your life?Secondly, $8 an hour is around $1,400 a month.


In the quote you took out of my article and put above what you wrote, it says I'm 25. I'm 25 (the age your article about saving refers to). Even so, if my dumbass just got a job at 35 how much do you think someone's going to pay me?

First thing you do is get an apartment with a roommate which should cost you less than $400 per month with utilities.
.

I'm taking care of my parents, i.e. they are living with me so I already have two room mates. The little money they have in savings is used for medical expenses. I feed them too (groceries) and run them to their doctors appointments (gas).

My Jaguar gets 15 miles per gallon. I fill up twice per month at around $40 per fill up for a total of $80 per month. You can't manage manage to get a Toyota that gets 30 miles per gallon? Even an old clunker can do tha tif it's small. So where in the hell do you need $175 per month on gas? You driving over 50 miles per day to your $8 an hour job???


It's 15 miles to work. I work 7 days a week - remember two part time jobs at two different places. That's 15 x 2 (gotta get there and home) x 7 days = 210 miles a week = 10920 miles a year. my car gets 18 gpm (it’s all city driving too) so that's 606 gallons * $2.50/gal = $1517 / 12 = $126 per month. This is just for work. No grocery shopping, no driving to the FREE park, no carting mum and dad around town, no Church.

If you're spending $300 per month on food, you're a dumbass. My family of 5 spends around $600 per month on food and we don't skimp. You should be able to eat decently on around $150 per month ($200 tops).


Are you including paper products in this too? Are you going to tell me I have to start getting my neighbor's newspaper to wipe my dumbass with? I'm feeding my parents who live with me too. Groceries as I said above include all the stuff i need for my home and I do regularly buy store brands.

Why are you spending $25 on clothing each month? You spend nearly $300 a year on clothing? That's more than I spend.


I don't have an office job and the work I do can be hard on clothes. Three new pairs of scrubs cost $60 per year (I've yet to find them at Good Will) Two pairs of shoes is $60. Have you ever bought a decent support bra? (I can't get these at Good Will either) On sale they still cost at least $12, and they don't last forever. If I buy just two a year, that's $24 but usually I need to buy 4 so in reality that's $48. I'm on my feet constantly so my socks get worn out a lot. I go through two packs a year. That’s another $15. Underwear’s another $10.

So that's a total of $60 + $60 + $48 + $15 + 10 = 193. The remainder of the money I use to buy clothing at Good Will. One pair of jeans or a top there costs $5. So I use the rest of my money a whole $107 there. I’m willing to concede that maybe I could give up $50 here. That’s 50 a year.

The federal taxes you get back so you can't count that. What is personal allowance?


Actually, the fed taxes shown are bases on income minus the standard deduction minus my personal exemption so no, I’m not getting it
back.

You think I don’t need any money in my pocket at all? Not even $10 a week? Sometimes I don’t spend much of it sometimes I spend more. Come on were talking $10 here! That’s all I carry in my wallet at one time.

But let's get to the meat: Do you really believe it's my responsibility to take care of you in your old age?


Where did I ask you for a handout? I posted this so you could tell me just how I could get $4000 to put in an IRA so that I could become that multi-millionaire that you wrote about in your article. The only thing I asked you to do was look at it from my view point. That's all. There was no line in my budget that said Handout from Brad $xxxxx.

It's easy for guys like you to cry about "bias against the poor" or sound compassionate because you don't actually have to do anything to back up your principles. It's guys like me who end up having to deliver.


I just got up off my lazy ass got a job and started saving what money I could and you're still blaming me? I'm not asking you to deliver anything to me. I'm just laying out the facts. That's all. In fact if you'll remember I'm the one who said further up that we shouldn't be capping the rich.

I also said I'm all for raising the retirement age.

That's one of the things that makes me so resentful of welfare programs. Guys like you will spit out how greedy or uncaring I am even as you cash checks paid for by guys like me.


Where in any of my responses do I call you or guys like you "greedy or uncaring"? I said you were biased agains the poor thats it.
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