Should Social Security Taxes Be Optional for Younger Generations?

[Cyrus]

Just a note: I am all for helping people with disabilities which means they cannot provide for themself. I don't agree that "all of us" should get healthcare though. People who smoke 2 packs a day don't deserve health care on my dime. If they want to smoke, each pack should have a $2.00 dollar tax that goes just to a fund for when they get cancer and die, it covers their medical bills.


Edit: Oh, I forgot fat people. I don't want to pay for fat peoples medical bills either. Garbage in = garabage out. Learn to cook and eat healthy, and exercise, or die.

 

[gravenewworld]

Yeah, and there are other people with disabilities that entail visual problems, diabetes, neurological disabilities, immune-deficiencies, etc. I tossed that in there because you don't seem to be willing to regard others with disabilities or infirmities (perhaps due to age) as "worthy" compared to your own. Please try to grow up and realize that all of us should get health care and some sort of "safety net" when we are too old or too sick to work. Some day you will need help (you maybe have already been there, I don't know) and we will all have to pitch into help keep you going. I'm willing to do my part, as long as our system is fair and dependable.

Please don't bring in universal health care into the thread. That is a whole different issue, which I agree everyone should have. It baffles me how Americans want SS but hate universal health care.

Most people wouldn't be millionaires. Most people nowadays barely know how to manage money at all.

You don't need to be a genius, all you would have to do is take that money and invest it into a mutual fund. The fund manager does all the work for you and all for an extremely low cost (like $20 per year). If there were ever a transition from SS to privatization there would have to be education courses on how to invest, risk vs. rewards, etc. that came along with it. If we just got half the amount that we pay in SS tax to invest ourselves we would be much better off, even if you hardly knew anything about investing.

 

[Economist]

That's not a scare tactic. It is the truth. It's like health insurance. We could all have affordable health insurance like most of the industrialized countries, but the insurance companies get to pick and choose who they will cover, and leave at-risk or poorer people with little or no coverage, exposing them to bankruptcy at the onset of the first major illness, and pushing the cost of their care onto taxpayers.

Actually, it seems to me that this is more of a scare tactic used by those who want socialized health care in the US. I heard that insurance companies only deny a small percentage of claims (about 3%). And you need to realize part of the reason they deny claims, because if they pay for unreasonable or fraudulent claims or take on people who are already sick, THEN THE PRICE OF HEALTH INSURANCE WILL GO UP FOR THEIR MEMBERS, WHO WILL THEN SWITCH TO ANOTHER INSURANCE COMPANY. If your insurance company makes bad decisions, you will pay (because they pool risk) and then you will probably go elsewhere for insurance.

If you don't want to fix the system so that it continues to work (at least as a safety-net for disabled people and retirees), fine. You should be prepared to come up with a way to make the program solvent in the long-term because there are a lot of people that will have to be cheated otherwise.

Fixing it in the long-term would probably be abolishing the system, in which case you wouldn't be able to receive any benefits.

 

[Economist]

My wife and I have a little log house on 8-9 acres and we drive used vehicles.

Good to know that if social security ended, you'd still be able to live comfortably. I'm sure you could sell some of those extra acres and still live a pretty good retired lifestyle.

 

[turbo]

Actually, it seems to me that this is more of a scare tactic used by those who want socialized health care in the US. I heard that insurance companies only deny a small percentage of claims (about 3%). And you need to realize part of the reason they deny claims, because if they pay for unreasonable or fraudulent claims or take on people who are already sick, THEN THE PRICE OF HEALTH INSURANCE WILL GO UP FOR THEIR MEMBERS, WHO WILL THEN SWITCH TO ANOTHER INSURANCE COMPANY. If your insurance company makes bad decisions, you will pay (because they pool risk) and then you will probably go elsewhere for insurance.



Fixing it in the long-term would probably be abolishing the system, in which case you wouldn't be able to receive any benefits.

Please enlighten us with your claim that US health insurance companies deny 3% of claims. That is an entirely fabricated and unsupportable claim, and I can't believe that you posted it. Insurance claims that are denied or delayed are pure profit to to the carriers, and probably 30% of the overhead of any given medical practice is dedicated toward battling coding claims and getting paid. I was the network administrator for a large ophthalmic practice (over 20 doctors), and my cousin was their chief billing specialist, so I do have an appreciation for where the claims and denials conflicted.

 

[turbo]

Good to know that if social security ended, you'd still be able to live comfortably. I'm sure you could sell some of those extra acres and still live a pretty good retired lifestyle.

Land is less than $1000/acre, here. How long do you think we could last, economist? Can you add?

 

[Economist]

Why is it wrong to ask for people to take care of themselves?

I don't think it is wrong. Adults are expected to be responsible and should be expected to make sound decisions and pay the consequences of those decisions. Someone once said, "With freedom comes great responsibility." It seems to me that many people think the government is there to protect them, and take care of them, and make sure their life is good (even if it means burdening other people). In a sense, many people think the government is their parent. Since when is retirement something that the government needs to provide? It's one thing when we're talking about "Social Security" for people who have serious disabilities, but why should someone at age 65 get a retirement plan through the government just because they're 65? Especially, a responsible adult who worked for 40 years and had a long time to prepare for retirement by setting some money aside. When SS was first set up the average person didn't even live to 65, which is why that age was choosen (but today things are quite different).

 

[Economist]

Just a note: I am all for helping people with disabilities which means they cannot provide for themself. I don't agree that "all of us" should get healthcare though. People who smoke 2 packs a day don't deserve health care on my dime. If they want to smoke, each pack should have a $2.00 dollar tax that goes just to a fund for when they get cancer and die, it covers their medical bills.


Edit: Oh, I forgot fat people. I don't want to pay for fat peoples medical bills either. Garbage in = garabage out. Learn to cook and eat healthy, and exercise, or die.

I agree. Another thing that scares me about socialized health care, is then it's in the government's interest to monitor what you eat. Essentially, peoples freedoms (such as what they eat, drink, etc) will start to be infringed upon, because no longer is it your decision to drink 6 beers a day (because now I am footing the bill).

 

[Economist]

Insurance claims that are denied or delayed are pure profit to to the carriers

Ok, then why stop at the 30% you claimed? If it's so profitable to screw your customers, then why not deny 50% of claims? Hell, why stop at 50%? I think it's hilarious how people always want to talk about the evil role that profits play in health care, and the government would do much better because there would be no profit. First of all, economically it's a rediculous claim that profits are bad, but don't worry because I won't even go there. Second, it's rediculous because most health care revenues have nothing to do with profits.

Here's an analysis of the merits of that logic (from Cafe Hayek):

Proponents of a single-payer system in health care argue that it would save costs because of lower industry profits and lower administrative costs. Arnold Kling argues that the impact would be minimal. Is he right?

According to Public Citizen, a source not particularly friendly to corporate interests, pharmaceutical industry profits in 2002 (the year I happened to stumble on) were 36 billion. If all pharmaceutical companies were forced to serve the public at zero profit, that would lower US health care expenditures from 1.3 trillion to 1.3 trillion.

That's a pretty small change

I'll carry it out to a few more decimal places. In 2002, total health care expenditurea in the US were $1.342 trillion. So taking out ALL pharmaceutical profits lowers that number to 1.306 trillion. I don't think there's any way you can argue that the profitability of the pharmaceutical industry is a large factor in the size of US health care costs or that moving to a system where government could exploit its power as a large buyer of drugs would lower total expenditures.

Does anyone have data on administrative costs in the current system?

 

[Cyrus]

I agree. Another thing that scares me about socialized health care, is then it's in the government's interest to monitor what you eat. Essentially, peoples freedoms (such as what they eat, drink, etc) will start to be infringed upon, because no longer is it your decision to drink 6 beers a day (because now I am footing the bill).

I think you can have a socialized health care system, and I'd support one. Just make it in such a way that if you smoke, drink, or eat excessively, you will be taxed much more to make up for your bills that will come in the future. You have to pick up your own slack up and above everyone else. The doctors all have charts for your ideal weight based on your height and age. Get within the charts and your rates go down. Far away from the charts? Pay more taxes.

Reward healthy choices. Penalize unhealthy ones.

 

[turbo]

Ok, then why stop at the 30% you claimed? If it's so profitable to screw your customers, then why not deny 50% of claims? Hell, why stop at 50%?

Are you trying to be funny? I said that at least 30% of the operating costs of a medical practice was involved in trying to get paid from insurance companies that make their money denying and delaying claims. I can back this up. It is absolutely true and if you ask any doctor in your locale they will back it up, and the denials and fights for payments are much worse in some specialties. At no time did I say that 30% of insurance claims were denied, though this is probably very close to the truth for first-applied claims. If you have never spent any time trying to get paid by insurance companies, you should probably educate yourself or recuse yourself from arguments such as this.

 

[russ_watters]

Or scrap the project entirely and pay back what people put in. If you're turbo's age, you'd get a pretty big sum. If you're my age, you might get a little check worth a few hundred dollars.

Well that's part of the problem - if they were just paid back what they paid into it, they'd get much, much less than what they are currently promised.

At the same time, they have been promised much, much less than they would have gotten had they instead taken the money and invested it wisely.

 

[ShawnD]

Just a note: I am all for helping people with disabilities which means they cannot provide for themself. I don't agree that "all of us" should get healthcare though. People who smoke 2 packs a day don't deserve health care on my dime. If they want to smoke, each pack should have a $2.00 dollar tax that goes just to a fund for when they get cancer and die, it covers their medical bills.

http://www.forestonline.org/output/page22.asp

In the UK, for example, tobacco tax revenue currently stands at £7 billion a year compared with the £1.5 billion it allegedly costs to tackle 'smoking-related' diseases.

Simple math. When smokers give the system 7 billion pounds, but their health care costs 1.5 billion pounds, that means smokers give a net profit to the health care system (under UHC where taxes and health care flow from the same system).

Edit: Oh, I forgot fat people. I don't want to pay for fat peoples medical bills either. Garbage in = garabage out. Learn to cook and eat healthy, and exercise, or die.

Wrong again

This left them with a final sample of 2,957, of whom 268 had died. When the researchers analysed this group they were surprised to find that those who had stuck to their commitment to dieting were more likely to die young than those who stayed fat.

Other studies support the research. In America researchers followed 6,391 middle-aged people, who were either obese or overweight, for nine years and found the lowest mortality among those whose weight remained stable or increased.

So apparently fat people are a lot healthier, on average, than skinny people like me.

 

[russ_watters]

You will be old someday. Who will take care of you? You can't be young and healthy forever.

The point we young wippersnappers are making is that we could take that 15% of our income, throw it into a safe investment, and come out far ahead of what SS promises us. You could have done that too. See, you are thinking about this all wrong: you haven't gained money by investing in social security, you have lost money by not investing in something better. And at the same time, you are dooming your children to an even worse fate. That's selfishness.

The only people who actually gained money via social security were the first people to get it - those who got it while paying little or nothing into it.

I will not be supporting my parents when they are old. They saved and invested and have plenty of money. And my children (if I ever have any) will not be supporting me either. I wouldn't do such a horrible thing to them.

 

[Cyrus]

The paper, to be published in a science journal tomorrow, stresses that the findings did not apply to the obese or to overweight people with related conditions such as diabetes.

For such groups the relative benefits of weight loss are likely to be far greater, especially if accompanied by taking more exercise


from your link.

 

[Gokul43201]

Side note: I think about 20% to 30% is the national average for the claim rejection rate. I've seen these numbers more than once in just the last month. Shouldn't be terribly hard to dig up, I imagine. Also, this seems to be primarily an artifact of large times and high costs involved in processing paper claims. With the advent of e-filing claims, there is expected to be a significant decrease in this fraction.

 

[russ_watters]

Most people wouldn't be millionaires. Most people nowadays barely know how to manage money at all.

The sick thing is that it is one of the easiest things you could possibly do. I set up an IRA that automatically deducts a certain amount of money from my checking account every month and sends it to an S&P Index fund. Besides checking it when the govt raises the limit on it, I don't have to do anything and will be able to retire rich.

A quick and dirty calculation says that with $3500 (I think the limit is somewhere around there) in after-tax money a year paid into an index fund that earns an average of 8%, inflation adjusted, after 40 years of work, I'd retire with a million dollars in today's money.

[edit] I work for a small, but growing company. At the moment, I'm on my own, but I expect soon that I will have a 401k as well. Same idea, just as easy, same result.

 

[ShawnD]

I agree. Another thing that scares me about socialized health care, is then it's in the government's interest to monitor what you eat. Essentially, peoples freedoms (such as what they eat, drink, etc) will start to be infringed upon, because no longer is it your decision to drink 6 beers a day (because now I am footing the bill).

Does anybody actually think to pull their head out of their ass and fact check anything before posting?

Alcohol consumption by country
USA is at 40th place in terms of alcohol consumption. Luxembourg and Ireland are first and second place respectively, both of which have UHC. Other countries on that list with both higher alcohol consumption and UHC are Germany, Denmark, Britain, Spain, France, and Australia. Looks like the government really doesn't care.

 

[Cyrus]

Check facts? You're no fun...

 

[ShawnD]

Well that's part of the problem - if they were just paid back what they paid into it, they'd get much, much less than what they are currently promised.

At the same time, they have been promised much, much less than they would have gotten had they instead taken the money and invested it wisely.

That's true, but it's unrealistic to try and pay out what they promised since the government has already spent that money on pork projects and other garbage. All of it would be coming from national debt, so the only question now is how much debt can the US take on in order to pay for this project? My guess would be that most people will get nothing close to what they put in, let alone more than what they put in.

edit: yes I realize that's a very obvious guess.

 

[JasonRox]

Yeah, and there are other people with disabilities that entail visual problems, diabetes, neurological disabilities, immune-deficiencies, etc. I tossed that in there because you don't seem to be willing to regard others with disabilities or infirmities (perhaps due to age) as "worthy" compared to your own. Please try to grow up and realize that all of us should get health care and some sort of "safety net" when we are too old or too sick to work. Some day you will need help (you maybe have already been there, I don't know) and we will all have to pitch into help keep you going. I'm willing to do my part, as long as our system is fair and dependable.

I don't even consider my own, so I have no idea why you're blowing off.

Like I said, life isn't fair and I stand by that. Life isn't fair for me. Done.

 

[JasonRox]

The sick thing is that it is one of the easiest things you could possibly do. I set up an IRA that automatically deducts a certain amount of money from my checking account every month and sends it to an S&P Index fund. Besides checking it when the govt raises the limit on it, I don't have to do anything and will be able to retire rich.

A quick and dirty calculation says that with $3500 (I think the limit is somewhere around there) in after-tax money a year paid into an index fund that earns an average of 8%, inflation adjusted, after 40 years of work, I'd retire with a million dollars in today's money.

[edit] I work for a small, but growing company. At the moment, I'm on my own, but I expect soon that I will have a 401k as well. Same idea, just as easy, same result.

I know! It's one of the simplest things one can do. When it comes to my retirement plan, I don't rely on company built in plans or government plans. I can't put my future life, especially a time in life that is crucial, in the hands of other people saying they'll take care of me. I rather take care of myself and if the help of others are still around when I retire, then sure help and that'll just be the bonus package.

I already have a savings fund and retirement fund in the works. I still owe money for school of course. A certain amount goes to my debt and the rest to my emergency fund (savings), but that's now up to the amount I want. So, now it's off to putting money into my debt mostly. My retirement fund right now is what I have from work, but I'm pulling that out when I finish school and move on to another job (I worked there for 7 years).

 

[JasonRox]

So apparently fat people are a lot healthier, on average, than skinny people like me.

That's skewed.

What's the diet? Most believe the diet recommended by the government isn't even a good one. Also, no one said dieting means skinny and no one said people who have strict diets are healthier. Also, dying younger does not imply your medical bills are more expensive!

It's well-known that fat people put a strain on the health system. It's funny though because now the government is trying to take the initiative to solve this obesity problem when people can't just do it themselves kind of like saving for retirement back in the day. I suggest people do it themselves and stop being lazy asses!

 

[turbo]

Just in time, Robert Reich has weighed in on SS reform during his analysis of the Clinton campaign.

I'm becoming increasingly concerned about the stridency and inaccuracy of charges in Iowa -- especially coming from my old friend. While I'm as hard-boiled as they come about what's said in campaigns, I just don't think Dems should stoop to this. First, HRC attacked O's plan for keep Social Security solvent. Social Security doesn't need a whole lot to keep it going -- it's in far better shape than Medicare -- but everyone who's looked at it agrees it will need bolstering (I was a trustee of the Social Security Trust Fund 10 years ago, and I can vouch for this). Obama wants to do it by lifting the cap on the percent of income subject to Social Security payroll taxes, which strikes me as sensible. That cap is now close to $98,000 (it's indexed), and the result is highly regressive. (Bill Gates satisfies his yearly Social Security obligations a few minutes past midnight on January 1 every year.) The cap doesn't have to be lifted all that much to keep Social Security solvent -- maybe to $115,00. That's a progressive solution to the problem. HRC wants to refer Social Security to a commission. That's avoiding the issue, and it's irresponsible: a commission will likely call either for raising the retirement age (that's what Greenspan's Social Security commission came up with in the 1980s) or increasing the payroll tax on all Americans. So when HRC charges that Obama's plan would "raise taxes" and her plan wouldn't, she's simply not telling the truth.

http://www.huffingtonpost.com/robert-reich/why-is-hrc-stooping-so-lo_b_75191.html

 

[Economist]

If you have never spent any time trying to get paid by insurance companies, you should probably educate yourself or recuse yourself from arguments such as this.

I haven't had much trouble getting the insurance company to pay my various health problems. Broken arm, needed surgery. Had a good deal of dental work done (root canal in same tooth worked on 3 times as well as wisdom teeth removal). Only one time (for the last root canal on that tooth) did I have to pay out of pocket, and it was a little over $300 after insurance.

 

[Economist]

Does anybody actually think to pull their head out of their ass and fact check anything before posting?

Alcohol consumption by country
USA is at 40th place in terms of alcohol consumption. Luxembourg and Ireland are first and second place respectively, both of which have UHC. Other countries on that list with both higher alcohol consumption and UHC are Germany, Denmark, Britain, Spain, France, and Australia. Looks like the government really doesn't care.

Hold on a second, I think you're missing my points. I was not even trying to talk about facts. I was just saying that it scares me, that people will now have a greater say in what other people do, and they will be infringing upon the personal liberties of others.

In my opinion, you may see people try to set up more laws about what other people can do. Do you disagree that there may be additional nanny state laws under such a system?

 

[turbo]

I haven't had much trouble getting the insurance company to pay my various health problems. Broken arm, needed surgery. Had a good deal of dental work done (root canal in same tooth worked on 3 times as well as wisdom teeth removal). Only one time (for the last root canal on that tooth) did I have to pay out of pocket, and it was a little over $300 after insurance.

Doctors have a hell of a time getting payments from insurance companies, which was my point. Perhaps 30% of the overhead in a medical practice is dedicated to trying to get paid for covered services. I was a network administrator for a large opthalmic practice so I know how medical billing works. The most important people (after the doctors) in such a practice are the coding specialists - highly skilled people who review procedures and structure insurance claims to conform to the peculiarities of all the various carriers. It is not unusual to have claims rejected several times, even if they are coded properly because the insurance companies make lots of interest on the money they hold. People who decry social programs like SS and call universal health care "socialism" have no idea of the amount of money that private health insurance companies suck out of our health care system. The folks who want to privatize SS are apparently willing to slap a similar layer of parasites on our country's most important social welfare program.

 

[Economist]

Doctors have a hell of a time getting payments from insurance companies, which was my point. Perhaps 30% of the overhead in a medical practice is dedicated to trying to get paid for covered services. I was a network administrator for a large opthalmic practice so I know how medical billing works. The most important people (after the doctors) in such a practice are the coding specialists - highly skilled people who review procedures and structure insurance claims to conform to the peculiarities of all the various carriers. It is not unusual to have claims rejected several times, even if they are coded properly because the insurance companies make lots of interest on the money they hold. People who decry social programs like SS and call universal health care "socialism" have no idea of the amount of money that private health insurance companies suck out of our health care system. The folks who want to privatize SS are apparently willing to slap a similar layer of parasites on our country's most important social welfare program.

Some people tend to think that the government can do a better job with these things because there are no profits, and I strongly disagree with that (and encourage people to research the role that profits play in economics). If it's true that the government can do a better job with these things because of the lack of profits, than that argument should hold in many industries. Why stop at health care? The government should be able to provide all goods and services better than the private sector.

You're right that there are many overhead costs associated with insurance. Some have blamed this on the way insurance is run (claiming that it is not free market enough because customers, doctors, and insurance companies are too detached from one another). However, do you really think that there will not be large amounts of governmental administrative costs to take the place in a "universal" system?

 

[turbo]

You're right that there are many overhead costs associated with insurance. Some have blamed this on the way insurance is run (claiming that it is not free market enough because customers, doctors, and insurance companies are too detached from one another). However, do you really think that there will not be large amounts of governmental administrative costs to take the place in a "universal" system?

The administrative costs would be greatly reduced, in part because the procedure coding requirements would be standardized, and because there would be no incentive for the universal payer to withhold payment and force numerous resubmission of claims. This is a huge problem in medical practices, and it requires them to borrow against their receivables when big expenditures pop up unexpectedly - like a retinal laser than goes toes-up and needs to be replaced NOW.. The problem is that banks prorate their interest rates based on the ages of the receivables. They may lend no money at all on receivables aged 90 days, some on 60-day receivables at a high interest rate, and more money on 30-day receivables at a lower interest rate. Like I said, this is a big drain on our health care system. Privatization of SS would encourage investment bankers to jump in and game the system in similar ways.

 

[mheslep]

Why stop at health care? The government should be able to provide all goods and services better than the private sector.

The administrative costs would be greatly reduced, in part because the procedure coding requirements would be standardized, and because there would be no incentive for the universal payer to withhold payment and force numerous resubmission of claims. This is a huge problem in medical practices, and it requires them to borrow against their receivables when big expenditures pop up unexpectedly - like a retinal laser than goes toes-up and needs to be replaced NOW.. The problem is that banks prorate their interest rates based on the ages of the receivables. They may lend no money at all on receivables aged 90 days, some on 60-day receivables at a high interest rate, and more money on 30-day receivables at a lower interest rate. Like I said, this is a big drain on our health care system. Privatization of SS would encourage investment bankers to jump in and game the system in similar ways.

You didn't address the quoted question. The logic of your argument (from points above) appears to be that a government run enterprise will, from costs of scale and other factors, always be more efficient than a privately held for-profit one. I believe the evidence is clearly to the contrary.

 

[turbo]

I do not believe that to be the case, either, but in this particular case there is a real need for universal coverage with a single payer. In one stroke, it would eliminate much of the drag on the system, reduce overhead for doctors, and simplify claims submissions and payments. Once you get into basics, like health and economic security, there are some real benefits in a centralized system of administration. Like I've said in earlier posts, the people lying to Generation Xers about the inevitable collapse of SS are neo-cons who want to dismantle all social services and let the "free market" take over. If you think that health insurance companies have a lot of money to throw around, buying Congressmen to prevent discussion of universal health care, think of what kind of clout investment bankers would gain if all the young, healthy people opted out of SS and they had all THAT money to play with. Privatization of SS would bankrupt the system and finance a lot of Ferraris for the bankers. SS can be fixed by increasing the total amount of income subject to taxation modestly, as Robert Reich points out. Congress doesn't have the guts to do it, though if Obama is elected, he can hold their feet to the fire.