Let Detroit be a LESSON to ANYONE advocating "alternatives" to Social Security!

[bvar22]

Republicans and "Centrist" Democrats have long advocated for "alternatives" to Social Security. They INSIST that the "private" Market offers better returns on the investment.

The Firefighters and Police in Detroit had one of these "secure alternatives" with the City of Detroit, and were exempted from Paying In to Social Security.

NOW, these hard working individuals who Did-Everything-RIGHT,
and courageously put their Life on the Line over 30 and 40 year careers [font size=3]are likely to lose ALL Retirement funds[/font] through the bankruptcy of Detroit.

That is WHY Social Security,
Publicly Owned, Government Administered Pension is the very best way to provide for ALL of us.
(That works for Health Insurance too, but that is another issue).

Let Detroit serve as a LESSON,
and a WARNING.
We need to preserve and expand Social Security,
NOT defund and Privatize it.
[font size=3]Everybody IN.
Everybody PAYS.[/font]
Say NO to ANY and ALL "Private" alternatives.[/font]
"Private" pension funds CAN and DO "disappear" overnight,
and NOBODY goes to jail.

The forces are gathering to raid the Social Security Fund,
now running a multi-TRILLION DOLLAR SURPLUS.
It is about all the Working Class has left of FDR's New Deal.
Let Detroit serve as a LESSON.

The ONLY acceptable change to Social Security is Raising-the-Cap.




Question for those more knowledgeable than myself:
When were City Employees exempted from Social Security?

[Faygo Kid]

1. Yep, and the GOP is going to fight to end it during the debt ceiling debate

Make no mistake, chained CPI is nothing to them - they want Social Security either ended or privatizes for their Wall Street buddies. The chipping away (with a cudgel) is about to begin.

[NorthCarolina]

32. The real insult to me though is that they have Democrats who sympathize with their cause. nt

[libodem]

2. FN exactly

Exactly!

[SunSeeker]

3. Totally agree, except I am unaware of any elected Dem who is advocating for privatization of SS. nt

[bvar22]

6. Then you are not familiar with the DLC.

One of the Foundation Goals of that organization was the Privatization of Social Security,
and they made no secret of that right up to the collapse of Wall Street in 2007.

They cloaked it with words like "Individual Accounts",
but the end result is ALWAYS the same:
The deflection of the Revenue Stream from Social Security to the control of their Wall Street friends.

"The DLC champions privatization of Social Security as a centerpiece of its program for the new century. Or in DLC speak, as Will Marshall, one of its founders, puts it, "using choice and competition to advance...the big social insurance programs like Social Security and Medicare."

http://www.thenation.com/article/dlc-comes-manhattan#

The DLC achieved their goals of placing their people in control of the Democratic Party by selling out to Wall Street and Big Business interests,
and shed their skin once the organization known as the DLC vehicle was no longer necessary.

But make no mistake,
the people who championed this Doctrine are STILL with us,
Still in control of the Party,
and STILL allied to the interests of the 1%.
Cutting benefits is just the 1st Step.

[font size=5]
The DLC New Team
[/font]
(Screen Capped from the DLC Website)


[font size=3]Forewarned is forearmed![/font]

[SunSeeker]

11. Are you saying Emanuel, Clinton, Napolitano, Summers, Sebelius, Vilsak, Salazar and Kirk do?

That 2002 Nation article does not mention any of them by name; it just talks about the DLC.

And more to the point, it does not mention any currently elected Democrat who actually supports social security privatization.

[bvar22]

15. You can trust them if you want to,

...and believe that they have had an epiphany and reformed their ways and allegiances,
or maybe they just have the good sense NOT to talk openly about giving Social Security to Wall Street since 2007, but I don't believe in those cartoon conversions.
They may just opt for a smaller goal at first, like cutting benefits.

I remember the 90s and up to 2006, and don't recall any of them refuting the Major Beliefs of the organization that helped direct funding to their campaigns.
Individual Accounts" was common talk among the "New Democrats".

"A president decides that Social Security is in need of radical reform. He assembles a team of experts to examine the issue and they conclude that allowing workers to privately invest a portion of their Social Security taxes in individual accounts is a viable way to solve the program’s financial problems, increase the rate of return to young workers, and allow low income workers to accumulate real wealth. They conclude that most criticism of individual accounts — they would be too risky, too costly to administer — is unfounded. The president leans toward quick implementation.

George Bush?
No. Bill Clinton. So much for the myth that Social Security privatization is a “partisan” or “conservative” issue.

http://www.cato.org/publications/commentary/clinton-wanted-social-security-privatized

Now I've provided two credible sources that confirm my claims.
You can pick up the clues,
and allow your curiosity to motivate your OWN research,
or just blindly hold on to whatever opinion you hold now.

The Bottom Line is that the ONLY change to Social Security I will support
is Raising or Eliminating the CAP, and INCREASING benefits.
Everybody IN.
Nobody OUT.
Everybody PAYS.

[SunSeeker]

17. I trust them more than the Cato Institute. Got a better link? I don't want to give it the clicks.

And saying Bill Clinton--in 2001--assembled a team to study it is not the same as saying he supported it. Either way, a lot has happened since 2001. I think the financial crash of 2008 made every Dem realize the folly of privatization. And Bill Clinton is not an elected Dem anymore. I can't imagine any Dem, elected or about to run, who would argue for SS privatization. I think suggesting "centrist" Dems support SS privatization has no basis in fact and appears to be a Cato Institute smear.

[WinkyDink]

24. Have you heard of Obama's commission with Bowles and Simpson, who hates the elderly?

[SunSeeker]

33. Did Obama ever support the idea of privatizing SS?

[yellowcanine]

14. A Nation article alleging what the DLC says is not the same as a statement from an elected Democrat.

So you failed to answer the challenge, imo.

FWIW, I think it is a HUGE stretch to suggest that centrist Democrats support SS privatization. The evidence just isn't there, articles in the Nation about the DLC which cite no actual examples notwithstanding.

[bvar22]

16. Then THIS should end your quest with a Death Blow.

(The same response I gave to your friend above)

You can continue to believe believe that they have had an epiphany and reformed their ways and allegiances,
or maybe they just have the good sense NOT to talk openly about giving Social Security to Wall Street since 2007, but I don't believe in those cartoon conversions.
They may just opt for a smaller goal at first, like cutting benefits.

I remember the 90s and up to 2006, and don't recall any of them refuting the Major Beliefs of the organization that helped direct funding to their campaigns.
Individual Accounts" was common talk among the "New Democrats".

"A president decides that Social Security is in need of radical reform. He assembles a team of experts to examine the issue and they conclude that allowing workers to privately invest a portion of their Social Security taxes in individual accounts is a viable way to solve the program’s financial problems, increase the rate of return to young workers, and allow low income workers to accumulate real wealth. They conclude that most criticism of individual accounts — they would be too risky, too costly to administer — is unfounded. The president leans toward quick implementation.

George Bush?
No. Bill Clinton. So much for the myth that Social Security privatization is a “partisan” or “conservative” issue.

http://www.cato.org/publications/commentary/clinton-wanted-social-security-privatized

Now I've provided two credible sources that confirm my claims.
You can pick up the clues,
and allow your curiosity to motivate your OWN research,
or just blindly hold on to whatever opinion you hold now.

The Bottom Line is that the ONLY change to Social Security I will support
is Raising or Eliminating the CAP, and INCREASING benefits.
Everybody IN.
Nobody OUT.
Everybody PAYS.

[yellowcanine]

35. Nice Gish Gallop* but still you haven't made your case.

Bottom line - no elected Democratic politician has proposed this, regardless of what some CATO Institute stooge might be claiming. I don't doubt that Clinton may have had people studying this - so what? Not the same as proposing it publicly, is it?

*http://rationalwiki.org/wiki/Gish_Gallop

Individual Accounts" was common talk among the "New Democrats".

Yeah, that's a persuasive argument. Equivalent to saying - "I read an article somewhere that said...."

[BrainMann1]

4. Reagan policies killed the city and the republicans helped

Get the record straight look for yourself. Obama tried to help with no help from these centrist democrats. I'm a Progressive Democrat and we will fix this.

[WillyT]

5. K & R !!!

[MotherPetrie]

7. K&R

[Civilization2]

8. They will get at that money too,. be if local, state, or federal, they are coming for your retirment

Well I do applaud your pointing out that the city workers of Detroit got shafted with a "we got a better deal for ya' over here" move. I really don't think the banksters are planning to let the fed system off easy either,. they want 100% private, all your savings in the Wall St. casino set up,. and they will stop at nothing. Plan for your retirement by supporting your children, and investing in the actual people that produce and provide your food and requirements for living. Slow Money is a great resource for finding ways into this mind set. Keep all your savings out of the hands of Wall St. and investments in people you don't know on a personal level. Trusting banksters is a losing proposition, every time.

[adirondacker]

9. Thank You for bringing this up and making a terrific point. nt

[JDPriestly]

10. Coming interest rate for one very large, well known bank is .0125. That is on $1000, $12.50 per

year.

Try supplementing Social Security at those rates. Don't grow old.

[geek tragedy]

12. Agree 110% nt

[leftstreet]

13. DURec

[dsc]

18. at the onset of SS is when the exemption happened

Public pensions that predate social security were not forced to join social security. The police and fire pensions would have been among those.

[former9thward]

19. "When were City Employees exempted from Social Security? "

In 1935. When Social Security started all federal, state and local employees were exempted. http://www.ssa.gov/history/35actix.html

[WinkyDink]

25. As a teacher in PA, I paid---thank God---into S.S.

[dtom67]

20. agree on SS....

Detroit was fleeced by Wall street derivatives Ponzi, and wll now raided for remaining Public assets. After privatizing everything into unaffordability, the poor will be driven from the city . In a few years, we will be reading about Detroit's great "comeback", which came at the expense of her current citizens.

[WinkyDink]

26. Exactly. And the 1% will literally own an entire major U.S. city, lock, stock, etc.

[ceonupe]

28. The problem is the avg Detroit citizen makes less than 30k a year far less

So the only way to save the city is to get a higher wealth tax base and or shrink city debt to what it can afford.

Yeah it sucks but inordinate for the city to recover u need some mega rich folks to do the city a favor with long term investments.

People don't like some of the 1% but note that the CEO of quicken loans had bought over 700million in property in Detroit. A long term investment like this is what the city needs. A good program that encourages those with the funds to reinvest. The truth is without the middle class and 1% who control the money Detroit has no future.

[dtom67]

38. that's not MY point...

My point is that the phrase " the City of Detroit " means " the people who live there". These people will be forced out of their City, in a classic case of gentrification. " It sucks " doesn't even begin to describe the process. The Detroit you are talking about does not exist, yet.

What has really happened here is that Detroit ( and many other cities around the country ) have been assaulted by Wall Street. Byzantine derivatives investments sold to hapless Pension funds combined with Municipal bonds underwritten by Wall Street ( that they KNEW the City would eventually default on ) have created most of the shortfall.

Of course, it is in the best interests of the 1% that we only talk about the erosion of the tax base. The Masses need not concern themselves with that other financial stuff.

All part of the continued transfer of Wealth from poor to rich.

[ceonupe]

40. What other stuff

That cities like Detroit sold their debt as bonds knowing they would not be able to honor the payments but using it sort of like a credit card to keep things moving (Detroit tried lots of debt deals in the last 10 years to prevent this)

An maunicipal bonds for things like water and sewer and hard infrastructure. These types of debt for infrastructure deals are quite common but is not yn heard of for lots of fraud to be involved in who gets the deals.

Look I understand that Detroit is broke and they knew this over 30 years ago in the early to mid 80s.

The biggest problem is the city took far to long to right size it sled and delivery of services. A big part of that is its hard to right size a city built for 2 million with room for million more easily (land size is larger than 3 mega cities combined) down to a size for 800k. I don't act like their are easy ways. Maybe the city could have looked to break itself up into more manageable pieces or deannexation (is there such a word) let's face it once the suburbs setup shop and the flight happened unless Detroit had a commuter tax like NY it was done for.

Yeah we all know about the single industry town and how the city did little to diversify until it was to late but let's look at how single industry towns were run in the 50-70s. Basically the auto industry ran the show and controlled most policies and law making. And quite honestly a large manufacturing industry outside of autos was not going to work there and looking back now at how much of manufacturing of us bought goods is done overseas it may have done the city little good.

America has a problem. We really don't have a viable industry to replace manufacturing in the USA. Yeah for now The southern states are doing some manufacturing but the reality is most of that is only for US purchase (outside of some luxury SUVs ) and that is not enough. China and other emerging markets are where the growth is and us manufacturing is playing a very minor roll in that growth.

Sorry for the rambling response but yes I understand its complex. Many a single industry town has been wiped out in the USA, Detroit may be no different.

[Enthusiast]

21. There is no viable alternative to social security.

Period.

[HiPointDem]

22. kr. except for the raising the cap, which there's no need for at this moment.

as for the city employees, it's my understanding that most exemptions are either because of some specific characteristic of the work or because a group of employees has their own retirement plan.

[PoliticAverse]

23. "Publicly Owned, Government Administered Pension is the very best way to provide for ALL of us."

Um, that's what they have in Detroit.

[ceonupe]

29. As a backup source of income

You can really live off social security. It is a great base but for those who have the funds and the option there are better retirement choices.

I don't support making ss private but I'm not crazy either at 31 I don't expect SS to be the same when I get to 65-70 years old.

Some on this board advocate mans testing for SS so that the wealthy can't get SS tey paid into so others that paid less in can get more because the lower income people needed it. These kinds of ideas about what to do with SS push people aginst the system.

Combine this with the fact that since it started congress has been stealing from social security to balance the budget. Yes I'm aware had we not stole the money the system would be so much better off but the reality is congress took the money so what do we do now for people like me (workers in their young 30s)

[bvar22]

41. If you own your home & property outright,

own you vehicle(s) outright,
can repair your own vehicles,
don't mind driving old vehicles,
only carry Liability

have no mortgage,
no Loans,
no credit card debt,
no dependents,
and a big Deep Freeze

are healthy and strong with no big monthly drug bill

live in a Southern State with a low cost of living and mild Winters,
cut, haul, and split your own fire wood to burn for Winter heat,
keep chickens for fresh eggs,
grow your own Green Beans, potatoes, Okra, Tomatoes, Peppers, Basil, Onions,
Watermelons, Cantaloupes, and are good at canning & freezing,

grow a lot of Beans for the Winter
grow Strawberries, BlueBerries, and Peaches (preserves),
have a couple of HoneyBee Colonies

Buy in bulk those things that you can not grow
cook from scratch,
never buy anything NEW
build or repair everything yourself
are a decent electrician, mechanic, plumber, carpenter, landscaper, vet,

Go on the weekly Supply Run with a good list
so you don't have to go back the next day for what you forgot,

have hunting and fishing skills,
and live in a place where you can do so

never have any "unexpected" expenses like a lightening strike that blows out all of the electrical items in your cabin, or a trip to the hospital,

Rarely Go Anywhere just for fun, and stay out of trouble,


...they YES.
You CAN live on Social Security,
and have a TV and Internet,
and an occasional Bottle of Wine.


---bvar22 & Starkraven
Living Well on a Low Taxable Income
and stuff we learned in the 60s

[ceonupe]

42. Funny and true

Think about it this way.

A "poor" retire in Florida living in a trailer/manufactured home they own, driving a car they own outright and no credit card debt personal loan debt has I higher networth than prob 50% of the country.

If your liabilities exceed your assets/income then you are broke.

A quick story. I have 2 aunts both collecting SS now. One has only SS and a small pension and the other has SS and 401k (that she borrowed aginst lots of times and is not funnded where it needs to be)

The aunt with SS and her small pension lives in nice but modest 4 bed room 2 bath home that she owns completely no mortgage (she has lived there over 30 years) she drives a 2003 Toyota matrix (paid for)

The other aunt has a nicer 4 bed room 3 bath house all stainless steel appliances and in a "developed community" and she owes darn near 80% of the value of her home to the bank. She drives a 2011 Buick .

The aunt with the smaller house is far more $ secure. And she seams so much more happier.

Both are at an age for Medicare and both also have supplement plans as well.

[ceonupe]

27. Funny

I have heard many on this site advocate additional taxes on investments and private retirements to shore up social security.

Some even advocate forcing people to turn over part or portions to the Feds to solve funding issues. Yes some specificly advocate forcing people out of private accounts

[riqster]

30. Certain governmental employees have been exempted since the Act was passed.

I agree that Social Security must be safeguarded and expanded. However, it is not more or less safe from the type of robbery that is about to be perpetrated upon the public employees of Detroit (and indeed, others across the nation).

If Bush had had enough Right-Wingnut Reeps in Congress, they'd have wrecked SS already. Just like they are doing to municipal retirees today.

The problem is: "republicans" don't respect contracts. They break 'em as they see fit. So, no contract is safe when they are in power.

[HenryWallace]

31. Social Security is not a "Pension" (nor an alternative to a pension)!

It is a transfer of wealth! From younger working citizens to the elderly (historically the largest class of impoverished individuals). You gain coverage in the system through minimal participation standards.

As a whole, society accepts the transfer as necessary, desirable, and just.

There are no entitled "account," an individual's heirs do not receive the balance of their benefits at death, and no 103 year old women are thrown out on the street when their account runs out!

FICA (Federal Insurance Contribution Act) is in the nature of insurance: current premiums fund current and future benefits.

As a matter of practicality, an individuals benefits are tied to the amount of their contribution. However, the overriding objective of the system is to provide every elderly individual with livable minimum benefits.

[frazzled]

34. Not just Detroit, but CA, IL, TX, etc.

This is not some recent phenomenon. In most cases the public employee unions chose not to participate in the Social Security system, because they believed that a private pension system would provide better benefits. Take the Chicago Teachers Union as an example:

Chicago teachers in particular beat the Social Security system to the punch; the Chicago Teachers’ Pension Fund was created in 1895, making it one of the oldest pension systems in the country. The feds, though, took until the 1930s — four decades later — to create Social Security. But even after Social Security was in place, it was still a work in progress; by the 1950s the federal government expanded the program, opening it to new classes of state and municipal workers.

At this point Chicago teachers had the option of joining, too, but they took a pass. Why? Kevin Huber, the current head of the Chicago Teachers’ Pension Fund, says most people involved in the teachers’ pensions (whether it be the pension fund board trustees or the teachers themselves) felt that they already had a good thing going.

“In the ‘50s, it didn’t make a lot of sense (to join Social Security) because you had an established plan that was 60 years old. 1895. Sixty years old,” Huber says. “It was working well, so why would we? Why would we go into Social Security?”

Let that sink in for a moment. If you don’t feel the teachers made the right call, consider the timeframe under which they made their decision. According to the Centers for Disease Control and Prevention, the average life expectancy of working-age people at that time was in the range of 60 years. So, from the Chicago teacher’s viewpoint, his or her retirement system had been humming along for (literally) the equivalent of a lifetime. The federal system — not the teachers’ own — was the newcomer, the less-tested retirement plan.
The logic is similar for teachers outside Chicago. The Illinois Teachers’ Retirement System, or TRS, was created in 1915 to cover teachers in the suburbs and downstate Illinois.

“The decision was made that teachers would stay out of Social Security because Teachers’ Retirement System was providing a comparable benefit to the federal Social Security plan,” says Dave Urbanek, a spokesman for TRS. “And that’s basically the way it’s continued until this day.”

http://www.wbez.org/series/curious-city/question-answered-why-don’t-most-illinois-teachers-receive-social-security

Maine is thinking of trying to opt back in, but it's complicated:

More than six million public employees work outside the Social Security system, including roughly 1.7 million teachers in California, Illinois and Texas, and nearly two million employees of all types in Alaska, Colorado, Massachusetts, Nevada and Ohio, as well as Louisiana and Maine. For years, these and other states have insisted they could provide richer pensions at a lower cost, both to workers and taxpayers, because of investments.

Some of those states’ pension plans now have shortfalls so large that they need outsize contributions. Virtually all state pension funds have had big losses in the last two years, but the go-it-alone states appear especially vulnerable.

Not only are these states trying to provide richer benefits with smaller contributions than the payroll tax for Social Security, but they have promised to do it for workers who can retire 10 and sometimes 20 years younger.

With pension costs ballooning and taxpayers lashing out, many workers in states with deeply underfunded plans fear their benefits will be cut. Those being asked to put more into their pension funds complain they feel caught up in Ponzi schemes. Some wish they had been part of Social Security after all.

http://www.nytimes.com/2010/07/21/business/economy/21states.html?pagewanted=all

Read the whole of the above article to see the problems states face with trying to opt back in while maintaining promised benefits.

But why have these funds been underfunded? Largely because of actuarial mistakes in promising too large of returns (7-9% annually), when such gains on the pension fund were completely unrealistic. Thus the forecasts were causing state and local governments to think the funding was a lot cheaper that it actually would be, when it came time to pay out funds. Critical reading is this article that explains the issues, from which I quote only a small part:

But Detroit’s pension revelation is nothing new to many people who advise pension plans for a living, the math-and-statistics whizzes known as actuaries. For several years, little noticed in the rest of the world, their staid profession has been fighting over how to calculate the value, in today’s dollars, of pensions that will be paid in the future.

It may sound arcane, but the stakes for the country run into the trillions of dollars. Depending on which side ultimately wins the argument, every state, city, county and school district may find out that, like Detroit, it has promised more to its retirees than it ever intended or disclosed. That does not mean all those places will declare bankruptcy, but many have more than likely promised their workers more than they can reasonably expect to deliver.

The problem has nothing to do with the usual padding and pay-to-play scandals that can plague pension funds. Rather, it is the possibility that a fundamental error has for decades been ingrained into actuarial standards of practice so that certain calculations are always done incorrectly. Over time, this mistake, if that is what it is, has worked its way into generally accepted accounting principles, been overlooked by outside auditors and even affected state and municipal credit ratings, although the ratings firms have lately been trying to correct for it.

...

When a lender calculates the value of a mortgage, or a trader sets the price of a bond, each looks at the payments scheduled in the future and translates them into today’s dollars, using a commonplace calculation called discounting. By extension, it might seem that an actuary calculating a city’s pension obligations would look at the scheduled future payments to retirees and discount them to today’s dollars.

But that is not what happens. To calculate a city’s pension liabilities, an actuary instead projects all the contributions the city will probably have to make to the pension fund over time. Many assumptions go into this projection, including an assumption that returns on the investments made by the pension fund will cover most of the plan’s costs. The greater the average annual investment returns, the less the city will presumably have to contribute. Pension plan trustees set the rate of return, usually between 7 percent and 8 percent.

In addition, actuaries “smooth” the numbers, to keep big swings in the financial markets from making the pension contributions gyrate year to year. These methods, actuarial watchdogs say, build a strong bias into the numbers. Not only can they make unsustainable pension plans look fine, they say, but they distort the all-important instructions actuaries give their clients every year on how much money to set aside to pay all benefits in the future.

If the critics are right about that, it means even the cities that diligently follow their actuaries’ instructions, contributing the required amounts each year, are falling behind, and they don’t even know it.

http://dealbook.nytimes.com/2013/07/19/detroit-gap-reveals-industry-dispute-on-pension-math/?hp

This is crazy, complex stuff. But it's not something that one can pin on the governments du jour. They've inherited an issue that has been half-a-century in the making. It's just that it's finally broken open. I feel sorry for the pensioners, and I feel sorry for the governments. Both are going to need to find a way out, without too much pain.

Since the 1990s, the error has been making pensions look cheaper than they truly are, so if a city really has gone beyond its means, no one can see it.

[madrchsod]

36. just read on facebook that the boys in chicago drove illinois`s credit rating on purpose

they want to break afscme to privatise the state agencies.

flat tax illinois....

[frazzled]

37. Facebook is such a good source for such information

[madrchsod]

43. most if not a left wing sites have a facebook page.

my wife`s state and national afscme union have facebook page. in fact she runs her local unions political facebook page.

[Generic Other]

39. What rotten deals some of these folks made

Why did any worker bargain away social security?