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Yes, but your employer must pony up a matching 6.2% of your salary, making a total FICA contribution of around $12k at the SS limit. And in the case of self-employed individuals, the full 12.4% comes out of the worker's pocket. Even for the non-self-employed I would argue that without their employer having to pay that half of the FICA taxes, some portion of the savings would be passed on to employees as higher wages. This may have been where the OP got the $12k number, so perhaps you shouldn't be so quick to judge his math skills.

Also, before you go spouting off about the the "typical liberal," perhaps you should check your own post. The upper limit on SS-taxable income is $94,200 for 2006, not $96,400 as you assert.

There could be no such thing as landed property originally. Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue. Whence then, arose the idea of landed property? I answer as before, that when cultivation began the idea of landed property began with it, from the impossibility of separating the improvement made by cultivation from the earth itself, upon which that improvement was made.

The value of the improvement so far exceeded the value of the natural earth, at that time, as to absorb it; till, in the end, the common right of all became confounded into the cultivated right of the individual. But there are, nevertheless, distinct species of rights, and will continue to be, so long as the earth endures. (from http://www.ssa.gov/history/paine4.html

The Social Security Administration does not give out or verify SSNs for non government entities.

That is incorrect-- you can verify up to !250,000 at a time if you want-you just need to be an employer
http://www.ssa.gov/employer/ssnv.htm
in part
There are two Internet verification options you can use to verify that your employee names and Social Security numbers match Social Security's records. You can:

Verify up to 10 names and SSNs (per screen) online and receive immediate results. This option is ideal to verify new hires.
OR

Upload batch files of up to 250,000 names and SSNs and usually receive results the next government business day. This option is ideal if you want to verify an entire payroll data base or if you hire a large number of workers at a time.
While the service is available to all employers and third-party submitters, it can only be used to verify current or former employees and only for wage reporting (Form W-2) purposes.

If you're interested, I found the information in their Questions and Answers section:
http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/en duser/std_adp.php?p_faqid=78

Not two clicks away, but not too difficult to find after all.

All this talk of protecting our SSNs got me thinking, who do I have to give my number to when I'm asked for it? So I went to the source to try to find out, Social Security Online.

Much to my surprise, when I drilled down two pages (click "Your Social Security Number & Card", then "Protect your Number", both on the left menu), I get a page that says:
"This fact sheet is no longer available. It was removed from www.socialsecurity.gov because it has been discontinued."
http://ssa.gov/pubs/ssn_1.html

Discontinued! What the hell is that about? This is going to involve much more searching than I originally thought.

All this talk of protecting our SSNs got me thinking, who do I have to give my number to when I'm asked for it? So I went to the source to try to find out, Social Security Online.

Much to my surprise, when I drilled down two pages (click "Your Social Security Number & Card", then "Protect your Number", both on the left menu), I get a page that says:
"This fact sheet is no longer available. It was removed from www.socialsecurity.gov because it has been discontinued."
http://ssa.gov/pubs/ssn_1.html

Discontinued! What the hell is that about? This is going to involve much more searching than I originally thought.

...can be found here.
http://www.ssa.gov/history/ssn/geocard.html

The first three digit group is geographical, but only related to the area of the office where you APPLIED for the card. It has no real correlation to the location of your residence or of your birthplace.

The second two digit group is merely descended from an internal paper filing system; the system was run for decades without computers. No useful data here, not even on your race or gender (another bad internet rumor).

Heh
B

The first three numbers refer to the area. There was a 001-01-0001, although it wasn't the "first issued". Read all about it: First SSN & Lowest Number.

US employers must require a document that proves you have the right to work in the country. For US citizens that's the social security card (not really ID, just your name and number printed on cardstock that's supposed to be hard to forge). I got mine as a teenager when my mom attested for me and presented them with my birth certificate.

My account number is 000000042
My Social Security Number is 078-05-1120 (of course!)
My pin number is 1234

Following up on my own comment some of you may be interested by the fact a social security dog tag was once proposed. This was at the time when they were still deciding on how to implement SSNs.

Just use your Social Security number. Good idea?

Well, considering that it's a NUMBER, and there are obvious and public rules that determine its composition, this is a very trivial brute-force crack waiting to happen.

The key reason why alphanumeric passwords are conventional (often a network password policy requires a certain combination of numbers and letters), aside from over-the-shoulder obfuscation, is that they are harder to crack with a dictionary or brute-force approach.

Most private investigators could tell you a person's social security number for a fee; in fact, many internet sites offer this same service.

In general, pairing obvious personal information with your identity/alias/etc is a bad, bad, bad idea. I remember from my technical support years, seeing passwords that were obviously bank card pin numbers, or SSN serials, or daughter's name. If your password stores more information than a keyed access to your private/proprietary systems, it's a bad password.

What if Disney required your home address and social security number to enter their park? You know that some people would provide that, stupid as it may be. Instead, the government has laws that limit who can require your social security number.

Can you provide an example of such a law? I just found this explanation on the Social Security website:

If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested.

http://www.gao.gov/htext/d0482.html
http://www.ssa.gov/oig/executive_operations/eyeono ig/eyeoig10162002.htm
http://www.bizjournals.com/denver/stories/2002/09/ 16/daily26.html

Learn to google.

I've consulted for three different local colleges. Here are a couple things you might want to consider (applyies to colleges in Ohio):

• Most pay into their own retirement system, not social security - which could mean a reduction or elimination of your social security benefits due to the Windfall Elimination Provision.
• All of them offered free tuition or reimbursement at a specific level, usually percentage of Ohio State's rates. Some offer reductions for children and spouses.
• Most universities have free use of library and athletic facilities.
• The level of bureaucracy in both faculty and administration is significantly higher than the private sector.
• Stress levels are typically lower, but that is changing as more and more technology gets required at reduced budgets. Stress levels due to increased political and bureaucratic tension is also a growing problem.
• Salary is usually lower than the private sector.
• Benefits are usually better, but that is also changing due to increased problems with health care.

The one caveat about schools and universities; all of the benefits like low-stress, tolerant atmosphere, good benefits, paid-overtime, etc. can disappear quickly if funding decreases and/or the administration changes - leaving you with a job similar to the one in the private sector just with less pay and free library and gym time.

No, that doesn't appear to be the case.
The SSN Numbering Scheme

The first three digits are based on location.

http://www.ssa.gov/foia/stateweb.html

Of course they would. There's ranges for many states. It's not just one number.

There's even some 10 digit SSN's out there. It has to do with the 1950 military personnel or something (Im still unclear about this one) and their distinctions therof.

Most systems that have SSN coding do not account for this, nor do they account for a few 8 digit SSN's used during the thirties (when SS was enacted). Most of the 8 digit ones were renewed to the now 9 standard, but it was not a requirement to have the 9 vs the 8.

Hopefully, this site will help you understand.http://www.ssa.gov/foia/stateweb.html

Yes, you can. According to the Social Security Administration's website, you may request a new Social Security number if you are a victim of identity theft.

Urban legends need to have some basis.

This is from the Social Security site:

The Privacy Act regulates the use of SSNs by government agencies. When a Federal, State, or local government agency asks an individual to disclose his or her Social Security number, the Privacy Act requires the agency to inform the person of the following: the statutory or other authority for requesting the information; whether disclosure is mandatory or voluntary; what uses will be made of the information; and the consequences, if any, of failure to provide the information.

If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested. For example, utility companies and other services ask for a Social Security number, but do not need it; they can do a credit check or identify the person in their records by alternative means.

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/en duser/std_adp.php?p_faqid=78&p_created=955482891&p _sid=4s9RaDBh&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5 PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NjMmcF9wcm9kcz0mcF 9jYXRzPTE2LDAmcF9wdj0mcF9jdj0xLjE2OzIudTAmcF9zZWFy Y2hfdHlwZT1hbnN3ZXJzLnNlYXJjaF9ubCZwX3BhZ2U9Mg**&p _li=&p_topview=1/

You may want to get you children a SSN. They need to have a SSN to work and if the apply for one when they are older than 12 they will need to do an in-person interview and explain why they don't have one.

There are 3 types of SSN cards.
one for US citizens,
one for Valid for work with DHS authorization,
and one that is not valid for employement.

All this and more can be found at http://www.ssa.gov/pubs/10002.html/

Take an American Social Security Number for instance. Technically, no one but the government can require you to give out the number.

That is most certainly incorrect. Anyone may ask for it, there are no laws preventing someone from doing so. Its even legal to deny services for refusal.

...they mount Trojan horses, right? (ba-doom-ching)

Seriously, that is amazing. I gotta move there; I prefer the CN over the Empire, and I'd rather not have an easy-to-get number used as my very identification. It's too easy here; I don't know about where you are (but clearly they gave you some nice help kicking identity-thief ass).

try transposing a few numbers on the next document that requires it.
Nobody checks

AFAIK, my bank and the DMV are the only places i've given my SSN too that ever bothered to make sure it was mine.

History of the SSN

Um, I did, perhaps you should learn to read, asshat.

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/en duser/popup_adp.php?p_sid=_uCHQ2Bh&p_lva=&p_li=&p_ faqid=78&p_created=955482891&p_sp=cF9zcmNoPSZwX3Nv cnRfYnk9JnBfZ3JpZHNvcnQ9JnBfcm93X2NudD02NDQmcF9wcm 9kcz0mcF9jYXRzPSZwX3B2PSZwX2N2PSZwX3BhZ2U9Mg**

If you really wanted to cut government discretionary spending, cut defense spending. By eliminating the non-functional boondoggle that is Star Wars and cutting funding for other Cold War weaponry (about $50 billion off of the current $400 billion defense budget), we can free up enough to more than pay for the Voyager program AND a whole bunch of other things.(Source)

A company that does, and that refuses to do business with you if you refuse to give them your SSN is in violation of federal law.

"If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested. For example, utility companies and other services ask for a Social Security number, but do not need it; they can do a credit check or identify the person in their records by alternative means."

"Specific laws require a person to provide his/her SSN for certain purposes. While we cannot give you a comprehensive list of all situations where an SSN might be required or requested, an SSN is required/requested by:

• Internal Revenue Service for tax returns and federal loans
  
• Employers for wage and tax reporting purposes
  
• States for the school lunch program
  
• Banks for monetary transactions
  
• Veterans Administration as a hospital admission number
  
• Department of Labor for workers compensation
  
• Department of Education for Student Loans
  
• States to administer any tax, general public assistance, motor vehicle or drivers license law within its jurisdiction
  
• States for child support enforcement
  
• States for commercial drivers licenses
  
• States for Food Stamps
  
• States for Medicaid
  
• States for Unemployment Compensation
  
• States for Temporary Assistance to Needy Families
  
• U.S. Treasury for U.S. Savings Bonds"

The Privacy Act regulates the use of SSNs by government agencies. When a Federal, State, or local government agency asks an individual to disclose his or her Social Security number, the Privacy Act requires the agency to inform the person of the following: the statutory or other authority for requesting the information; whether disclosure is mandatory or voluntary; what uses will be made of the information; and the consequences, if any, of failure to provide the information.

A company that does, and that refuses to do business with you if you refuse to give them your SSN is in violation of federal law.

"If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested. For example, utility companies and other services ask for a Social Security number, but do not need it; they can do a credit check or identify the person in their records by alternative means."

"Specific laws require a person to provide his/her SSN for certain purposes. While we cannot give you a comprehensive list of all situations where an SSN might be required or requested, an SSN is required/requested by:

• Internal Revenue Service for tax returns and federal loans
  
• Employers for wage and tax reporting purposes
  
• States for the school lunch program
  
• Banks for monetary transactions
  
• Veterans Administration as a hospital admission number
  
• Department of Labor for workers compensation
  
• Department of Education for Student Loans
  
• States to administer any tax, general public assistance, motor vehicle or drivers license law within its jurisdiction
  
• States for child support enforcement
  
• States for commercial drivers licenses
  
• States for Food Stamps
  
• States for Medicaid
  
• States for Unemployment Compensation
  
• States for Temporary Assistance to Needy Families
  
• U.S. Treasury for U.S. Savings Bonds"

The Privacy Act regulates the use of SSNs by government agencies. When a Federal, State, or local government agency asks an individual to disclose his or her Social Security number, the Privacy Act requires the agency to inform the person of the following: the statutory or other authority for requesting the information; whether disclosure is mandatory or voluntary; what uses will be made of the information; and the consequences, if any, of failure to provide the information.

For a California Driver's License you need to provide proof of birth date and legal presense in the country. IIRC, Illinois and Florida were the same.

For a US passport you need proof of US citizenship (a birth certificate or SS card) and a photo ID or someone with a photo ID who is a citizen and is willing to confirm your identity.

For a Social Security card you need a photo ID.

So it sounds like if you hang on to your birth certificate, you've got all you need to get any ID you want. Which hopefully makes sense to everyone...

To be fair, it is possible to obtain a new SSN. They don't like to, but enough bitching can get it done. Link Here
I can attest that this works but it is also a pain in the ass because sooooo many places tie you to your ssn.

Banks require your social security number for tax reporting purposes.

Before people take your advice and start threatening to sue everyone for violating a law, they should make sure the law actually exists where they are and applies to their situation--otherwise they'll just end up looking looking silly.

Let your fingers do the walking: http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/en duser/std_adp.php?p_faqid=78

If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested. For example, utility companies and other services ask for a Social Security number, but do not need it; they can do a credit check or identify the person in their records by alternative means.

Giving your number is voluntary, even when you are asked for the number directly. If requested, you should ask why your number is needed, how your number will be used, what law requires you to give your number and what the consequences are if you refuse. The answers to these questions can help you decide if you want to give your Social Security number. The decision is yours.

Obviously there is little protection for Social Security Numbers today if you want to participate in polite (well, consumerist) society. True protection against identity theft is vigilance, and even this can be bought cheaply in the form of credit monitoring services. Of course the alternative is not participating in polite (consumerist) society. :-)

It says:

If a business or other enterprise asks you for your SSN, you can refuse to give it. However, that may mean doing without the purchase or service for which your number was requested. For example, utility companies and other services ask for a Social Security number, but do not need it; they can do a credit check or identify the person in their records by alternative means.

So basically, they are allowed to deny you service if you don't give them your SSN, even though except for banks (who are legally required by the government to get your SSN), brokerages, etc, they don't need it.

There is no such as a trust fund

Yes, there is.

The current beneficiaries are paid from the general fund

No, they're paid from the Old Age and Survivors Insurance Trust Fund.

If you read the tax laws you would be surprised at the fact that even if you hit max payments with one employer the moment you switch employers you start all over on the deduction count.

On the assumption that the employee only has one employer. I can think of tons of reasons this makes sense. Illegals sharing ssn's, for instance. The Trust Fund gets to keep all the money since if you don't report the excess tax on your federal forms, you don't get it refunded. What if a prior employer didn't actually pay those taxes? Better to have the individual on the hook than the government _and_ the individual.

The key issue is to provide some means for younger Americans to realize a retirement and should they fail to live to collect it something to pass on to their survivors.

Ah, because the 401k's, 403b's, Roth IRA's, traditional IRA's, etc. we currently have are not available to young Americans and are not transferrable to heirs. Thank God Bush is finding a way to solve that problem.

I loose over $9,000 dollars a year to this non-investment.

I don't even want to get into how much I lose to the Defense Department non-investment every year, or at least every year since January 2001.

If I die before I can collect nothing will come of my "investment" for my family.

Except by dying, you DO collect. Looks like in 2003 over $25 billion was paid out in just such circumstances.

GROW UP.

Get educated on the issues. Stop listening to whoever's filling your head with these falsehoods.

There is no such as a trust fund

Yes, there is.

The current beneficiaries are paid from the general fund

No, they're paid from the Old Age and Survivors Insurance Trust Fund.

If you read the tax laws you would be surprised at the fact that even if you hit max payments with one employer the moment you switch employers you start all over on the deduction count.

On the assumption that the employee only has one employer. I can think of tons of reasons this makes sense. Illegals sharing ssn's, for instance. The Trust Fund gets to keep all the money since if you don't report the excess tax on your federal forms, you don't get it refunded. What if a prior employer didn't actually pay those taxes? Better to have the individual on the hook than the government _and_ the individual.

The key issue is to provide some means for younger Americans to realize a retirement and should they fail to live to collect it something to pass on to their survivors.

Ah, because the 401k's, 403b's, Roth IRA's, traditional IRA's, etc. we currently have are not available to young Americans and are not transferrable to heirs. Thank God Bush is finding a way to solve that problem.

I loose over $9,000 dollars a year to this non-investment.

I don't even want to get into how much I lose to the Defense Department non-investment every year, or at least every year since January 2001.

If I die before I can collect nothing will come of my "investment" for my family.

Except by dying, you DO collect. Looks like in 2003 over $25 billion was paid out in just such circumstances.

GROW UP.

Get educated on the issues. Stop listening to whoever's filling your head with these falsehoods.

There is no such as a trust fund

Yes, there is.

The current beneficiaries are paid from the general fund

No, they're paid from the Old Age and Survivors Insurance Trust Fund.

If you read the tax laws you would be surprised at the fact that even if you hit max payments with one employer the moment you switch employers you start all over on the deduction count.

On the assumption that the employee only has one employer. I can think of tons of reasons this makes sense. Illegals sharing ssn's, for instance. The Trust Fund gets to keep all the money since if you don't report the excess tax on your federal forms, you don't get it refunded. What if a prior employer didn't actually pay those taxes? Better to have the individual on the hook than the government _and_ the individual.

The key issue is to provide some means for younger Americans to realize a retirement and should they fail to live to collect it something to pass on to their survivors.

Ah, because the 401k's, 403b's, Roth IRA's, traditional IRA's, etc. we currently have are not available to young Americans and are not transferrable to heirs. Thank God Bush is finding a way to solve that problem.

I loose over $9,000 dollars a year to this non-investment.

I don't even want to get into how much I lose to the Defense Department non-investment every year, or at least every year since January 2001.

If I die before I can collect nothing will come of my "investment" for my family.

Except by dying, you DO collect. Looks like in 2003 over $25 billion was paid out in just such circumstances.

GROW UP.

Get educated on the issues. Stop listening to whoever's filling your head with these falsehoods.

• 
  
• Those considering granting you credit.
  
• Landlords.
  
• Insurance companies.
  
• Employers and potential employers (but only with your consent).
  
• Companies with which you have a credit account for account monitoring purposes.
  
• Those considering your application for a government license or benefit if the agency is required to consider your financial status.
  
• A state or local child support enforcement agency.
  
• Any government agency (limited usually to your name, address, former addresses, current and former employers).
  

"Special public-debt obligation Securities of the United States Government issued exclusively to the OASI, DI, HI, and SMI Trust Funds and other Federal trust funds. Section 201(d) of the Social Security Act provides that the public-debt obligations issued for purchase by the OASI and DI Trust Funds shall have maturities fixed with due regard for the needs of the funds. The usual practice in the past has been to spread the holdings of special issues, as of each June 30, so that the amounts maturing in each of the next 15 years are approximately equal. Special public-debt obligations are redeemable at par value at any time and carry interest rates determined by law (see "Interest rate"). See tables VI.A5 and VI.A6 for a listing of the obligations held by the OASI and DI Trust Funds, respectively. "

"Special public-debt obligation Securities of the United States Government issued exclusively to the OASI, DI, HI, and SMI Trust Funds and other Federal trust funds. Section 201(d) of the Social Security Act provides that the public-debt obligations issued for purchase by the OASI and DI Trust Funds shall have maturities fixed with due regard for the needs of the funds. The usual practice in the past has been to spread the holdings of special issues, as of each June 30, so that the amounts maturing in each of the next 15 years are approximately equal. Special public-debt obligations are redeemable at par value at any time and carry interest rates determined by law (see "Interest rate"). See tables VI.A5 and VI.A6 for a listing of the obligations held by the OASI and DI Trust Funds, respectively. "

>> If those people had family, then why didn't they get help from their families instead of social services?
Like I said, these cases are few and far between.

>> Since you've assumed all families have the extra resources
No I haven't. Giving, like it is today, would be optional. The US gives generously , with an average donation of 3,658 per family per year.

>> I never said that Social Security was a for-profit insurance system.
It's not an insurance system. It is a pay as you go system. Read this for a definition of insurance. The military is not insurance, they have no obligation to protect your person or property. In fact, the US military (unlike other countries) is prohibited from performing police operations inside of the US.

>> The Homesteading of the West
Let's go one at a time:

1- At the time the US colonized, the formal grants were from the Atlantic Ocean to the Pacific (I'm guessing throwing out the Indians, French, Spanish and Dutch occupying the middle of the country, was their problem ;-). Those tracts of land were held by the states, and not the federal government. Since the newly formed states each contributed separately to the war efforts, in conjunction with the weakly funded federal government, some states compensated war suppliers and vets with land grants. In fact, CT still laid claims to most of North-east Ohio in the late 1700's, selling off a large chunk to settle debts.

2- The Merchants/taxes thing: When you tax a company, the company passes the increased cost along to customers to "pay" the tax. At the time, the US was a classic third-world country, exporting raw materials, importing finished goods; since a large amount of economic activity occurred at ports, collecting taxes there was cheap and easy. Plus, most of the federal debts were owed to countries with a large merchant marine fleets, so I'm sure they understood this business model and that helped reassure them that the country would be able to repay.

3- At the time the constitution was written, "The West" was anything past the Allegheny in the North or the Blue mountains in the South. I doubt the founders of country had considered the mechanics of the dispersing lands they didn't have. It was not until the Louisiana purchase (Jefferson's administration, bailing out French to return the favor from the war) that the federal government held title to substantial tracts of land, and we still needed to chase away those pesky Indians.

At that time, when the federal government held title to land, it owned on behalf of the citizens, so the idea behind Homesteading wasn't that the government was giving something to the people; the land was the people's to begin with, homesteading was a good way to put it back into private hands. In the past 75 years or so, the concept of public land being private property of the federal government (which I think is your point of view) has appeared.

And (sorry for the long post) you haven't answered the question: Which of the founders of the country would have advocated an income transfer system like Social Security?

Yet the numbers tell a different story. You are being swindled, pal.

And your numbers are?

I'm quite well aware of people writing up reports saying that there is nothing to worry about. Some say, for example that the assumptions of the models that predict bankruptcy are excessively pessimistic. But unless you point us to what you are using as the basis for your statement that we're being swindled, we can simply assume you are just blowing rhetoric.

On the other hand, I'm looking at a $20B hedge that one of financial history's most consistent performers has placed against the dollar. That is 15% of market cap on Berkshire Hathaway. Even more interesting, that is over 50% of the company's cash position, what it really took to position that hedge (he still has the cash, but it is a real pain in the ass to manage multiple currency positions like that). He is not the only one taking short positions against the dollar, just a trader who is well known to the mainstream. In his entire career, he has only ever made one other investment of comparable magnitude, and that is when he bought GEICO, which rocketed BRK.A to the top by essentially giving him a private venture fund to capitalize purchases of other income-producing assets. There is a first time for everything, and Buffett might be wrong, but odds are he knows something you don't.

Talk is cheap, but 50% of cash in the billions backs up a metric assload of talk. And Buffett is saying we're borrowing too much. He doesn't give specific prescriptive advice, but when you look at what we are spending on well, it doesn't take a genius to figure out that even if we dropped defense to zero, we still won't dig out of our hole fast enough; and that's just the public debt. You want to talk about Social Security? Sure, let's talk unfunded liabilities. You think our current public debt hole is manageable? Okay, I'll give you a hole so deep, it exceeds the total net worth of the nation. In equities terms, the "book value" of the nation cannot cover the unfunded liabilities. The Social Security and Medicare Trustees' annual reports have to be off by almost 100% to make the unfunded liabilities even match the net worth of the nation.

Naturally, when you are talking about what you owe versus what you have, prudence dictates that you don't risk more than 10% of capital on any one class of expenditures. So you probably want the Trustees to be off by a factor of 10 to be relatively prudent. The only reason our creditors are not running screaming in the other direction is because we don't have to pay these unfunded liabilities right away, so it is not yet impacting our ability to pay them back. It's someone else's problem at this time, in other words.

I don't know what reports you're reading, but I'm looking through the Trustees' own words. If you can point to analyses that can demonstrate how the Trustees' numbers are off by an order of magnitude, hey, I might think history is being made and Buffett will make the biggest mistake of his trading career. The swindle I believe history will write, is upon the enstupidated and innumerate American voting citizenry, for believing they can get something for nothing. Thank God that we have intrinsic strengths that have not been totally destroyed yet, so we are unlikely to see Chinese Cultural Revolution scale deprivation and slaughter when the bill comes due. But make no mistake about it. If Buffett and a hell of a lot of other traders are right, we are in for an incredibly tough, whipsaw ride starting around 2010 or so. And going on for anywhere from 5 years to possibly decades, depending upon

Well, sort of. They have been borrowing it. The SS surplus is (by law i believe) invested in Treasury Notes. T-bills being on of the *safest* investments in the economic universe (if the US Gov't stops paying out on those, then you can rest assured we are in shit deep enough that SS is irrelevant), and the same thing that individuals, other countries, investment firms, and even Bush himself (to the tune of *at least* $5,000,000) invests in. There is this myth that come 2013 or 2018 comes around, and some of those t-bills need to be cashed in, that the Gov't won't pay. This is just outrageous, and historically false (SS has cashed in the past many times).

There are going to be more people collecting from SS when the baby boomers retire than there will be contributing to it.

False. Totally false.

The ratio of payee to retiree will decline when the baby-boomers retire, which is exactly why SS was revamped to run a huge surplus until then.

Politicians bought votes in years past by adjusting the cost of living based on wage inflation, versus the previous (more reasonable) way of calculating it based on regular inflation.

Not really, it was a reasonable choice, not a pandering to old folks choice. Wages increase faster than inflation does. That is why the standard of living increases with each generation. You can (in general) live better than your parents did, who lived better than your grandparents. This is life in the US, and has been for a long time. Pensions (including SS) are meant to replace a fixed proportion of you income (for SS it's, on average, ~40%). If you peg SS to inflation, you are decreasing that as time goes on, so the older you get, the poorer you get relative to the rest of the population. And note, that SS has been indexing against wages since the beginning, this isn't a new bit of old-voter pork.

I don't agree with Bush on much, but I like his ideas for SS reform. It's a broken system. You can either start to fix it, or you can try to prop it up until it completely collapses.

You've apparently drunk the kool-aid.

It is *not* a broken system. There is no crisis. According to 1. the SSA trustees, and 2. Bush's own CBO report, SS can meet all of it's obligations until either 2042 (1), or 2050-something (2). Even then, with no changes whatsoever, the benefits will be reduced by only 25% for a relatively short number of years. Keep in mind, these are *conservative* (fiscally, not idealogically) projections for nearly 40 years down the road. Using slightly less pessimistic projections (the SSA uses 3 scenarios, and in the recent past, the most optimistic has been closest to reality), SS is good through 75 years (which is as far out as the projections are made). Calling a possible scenario that is 30 years away a crisis stretches the term to flat-out dishonesty (not that this is unusual for the Bush administration).

What people don't get is that bush's private accounts proposal is flat-out, no-bones-about-it intended to be a step on the path to ending SS. Even calling it the 'ownership society' belies the point. SS is intended to be a collective, universal program...it doesn't work any other way. When you convert it to individual "ownership," you are dismantling it. Period. If that is what people would actually prefer, that is one thing, but trying to claim that you are doing the exact opposite ("saving social security") is wrong, and offensive, and decidedly undemocratic.

-Ted

Well, sort of. They have been borrowing it. The SS surplus is (by law i believe) invested in Treasury Notes. T-bills being on of the *safest* investments in the economic universe (if the US Gov't stops paying out on those, then you can rest assured we are in shit deep enough that SS is irrelevant), and the same thing that individuals, other countries, investment firms, and even Bush himself (to the tune of *at least* $5,000,000) invests in. There is this myth that come 2013 or 2018 comes around, and some of those t-bills need to be cashed in, that the Gov't won't pay. This is just outrageous, and historically false (SS has cashed in the past many times).

There are going to be more people collecting from SS when the baby boomers retire than there will be contributing to it.

False. Totally false.

The ratio of payee to retiree will decline when the baby-boomers retire, which is exactly why SS was revamped to run a huge surplus until then.

Politicians bought votes in years past by adjusting the cost of living based on wage inflation, versus the previous (more reasonable) way of calculating it based on regular inflation.

Not really, it was a reasonable choice, not a pandering to old folks choice. Wages increase faster than inflation does. That is why the standard of living increases with each generation. You can (in general) live better than your parents did, who lived better than your grandparents. This is life in the US, and has been for a long time. Pensions (including SS) are meant to replace a fixed proportion of you income (for SS it's, on average, ~40%). If you peg SS to inflation, you are decreasing that as time goes on, so the older you get, the poorer you get relative to the rest of the population. And note, that SS has been indexing against wages since the beginning, this isn't a new bit of old-voter pork.

I don't agree with Bush on much, but I like his ideas for SS reform. It's a broken system. You can either start to fix it, or you can try to prop it up until it completely collapses.

You've apparently drunk the kool-aid.

It is *not* a broken system. There is no crisis. According to 1. the SSA trustees, and 2. Bush's own CBO report, SS can meet all of it's obligations until either 2042 (1), or 2050-something (2). Even then, with no changes whatsoever, the benefits will be reduced by only 25% for a relatively short number of years. Keep in mind, these are *conservative* (fiscally, not idealogically) projections for nearly 40 years down the road. Using slightly less pessimistic projections (the SSA uses 3 scenarios, and in the recent past, the most optimistic has been closest to reality), SS is good through 75 years (which is as far out as the projections are made). Calling a possible scenario that is 30 years away a crisis stretches the term to flat-out dishonesty (not that this is unusual for the Bush administration).

What people don't get is that bush's private accounts proposal is flat-out, no-bones-about-it intended to be a step on the path to ending SS. Even calling it the 'ownership society' belies the point. SS is intended to be a collective, universal program...it doesn't work any other way. When you convert it to individual "ownership," you are dismantling it. Period. If that is what people would actually prefer, that is one thing, but trying to claim that you are doing the exact opposite ("saving social security") is wrong, and offensive, and decidedly undemocratic.

-Ted

1998: $68400
1999: $72600 +6.1%
2000: $76200 +4.9%
2001: $80400 +5.5%
2002: $84900 +5.5%
2003: $87000 +2.4%
2004: $87900 +1.0%
2005: $90000 +2.3%

"You're Wrong."

Source: Social Security Administration - Annual maximum taxable earnings and contribution rates, 1937-2003.

Only recently has the cap risen less than the rate of inflation.

Stock is not an IOU from a corporation. It represents ownership. When a corporation is worth something, a little sliver of it is also worth something. When you buy and sell stock, you're just trading the little slivers of a company (maybe a desk or a coffee machine's worth) for money.

Bank accounts are not IOUs from banks. They represent property. The bank is contractually obliged to give you that money on demand. That's what "money" in a checking or savings account is. It's as real as what's in your wallet.

Social Security's investment in Treasury bonds is not the same thing. The bonds may be real, but Supreme Court ruled in 1960 that people who paid into SS do not have a right to any of that money. When you "buy" into SS, you don't own anything.

> Hmm, my parents and surviving grandparents LOVE me. I'm sorry that yours don't, and you seem to think that's the norm.

The intergenerational arguments cut both ways.

(Hmm, do you love your children and surviving grandchildren? I'm sorry that you don't, as you seem to prefer that someone else take care of them :)

No, we're not. It's true that the unfunded liability of the Social Security pyramid scheme greatly exceeds its assets.

Because we want to avoid the fiscal meltdown that comes from redeeming the bonds (with printed dollars or taxed dollars), and (as you correctly point out) because the catastrophe of defaulting on those bonds is just plain unthinkable, there's only one thing left to do:

Renege on the contract, because it doesn't exist.

If your bank or brokerage house pulls something that, you can sue it into the stone age. But the Supreme Court has already said that entitlement to Social Security benefits is not contractual right.

When I say that the treasury bonds are "no good", that's a shortcut. In truth, the bonds are just fine. But the people who paid for those bonds do not own those bonds -- they have no right to expect to see one thin dime.

It's an easy mistake. Most of the time, when someone pays for something, they own it. The government plays by different rules.

The retirement age hasn't kept pace with advances in life expectancy. But it's not politically savy to tell people you can retire at 65...no wait, make that 67...oops hang on, better make that 70...or maybe 72.

Last time I checked, my bank accounts didn't come with a disclaimer like this:

There won't be enough younger people working to pay all of the benefits owed to those who are retiring. At that point, there will be enough money to pay only about 73 cents for each dollar of scheduled benefits.

-Social Security Statement, Page 1

If a mutual fund propspectus said "By 2042, there won't be enough other investors depositing checks with us to pay all of the net asset value of the fund. At that point, there will be enough money to pay only about 73 cents for each dollar presently shown on this statement", would you invest in it?

Say what you will about Kenneth Lay and Bernie Ebbers. Neither of them pointed guns at people's heads and said "buy our stock or we pull the trigger."