On Wed, 30 Nov 2005 17:57:29 -0800, Robert Sturgeon
wrote:

On Wed, 30 Nov 2005 10:28:05 -0800, "Jeff McCann"
wrote:


"Robert Sturgeon" wrote in message
. ..

(snips)

SS payouts are based on "contributions." If we increase the
"contributions" from the rich, we'll just increase the
payouts to the rich. The only way to soak the rich with SS
taxes is to decouple the payouts from the "contributions" or
to institute a needs test. But the SS supporters are the
ones most opposed to doing either, as it would (further)
delegitimize SS.

So you're saying that because it was and is marketed as some sort of Ponzi
scheme, we must run it like a Ponzi scheme? Nonsense.

The government runs it as if it was a scheme in which the
pay outs are somewhat related to the "contributions." If I
had the final say, we wouldn't "run it" at all. But I
don't. I'm merely pointing out the basic fallacy in
thinking that increasing the "contributions" from the rich
would solve the problem.

Social Security has
ALWAYS been pure income reallocation, i.e., social welfare. The first SS
check went out the same week SS wihtholding began. What has been missing is
reallocation of the upper end of earned income and all unearned income, both
of which have been exempt from reallocation.

... because it was sold as an insurance program in which one
got back money roughly commensurate with what one paid in.

We ought to make Social Security more honest and rationalize it at the same
time, by funding it with a low tax on ALL personal income and making the
payout the same for everyone who qualifies. We should also impose a means
test that eliminates or reduces benefits for those with high incomes or
substantial assets that put them in, say, the top quartile.

That would do it, but we wouldn't have "Social Security"
anymore - just another pure welfare plan. We have a
well-disguised welfare plan now, because people LIKE to be
fooled about the whole thing - told that they are really
getting back "what they paid in." They don't want to be
told, "You're now old and on welfare." I know this from
direct experience.
=====================
Pay as you go is the only practical way. The amount of capital
accumulated if it were 'saved" would be so huge as to shortly
dwarf all other sources, and how do you allociate the
investments. Think of government backed funds like Freddy Mac,
on steroids and with an attitude.

Uncle George