Apparently Social Security is considered a very good investment in some circles.

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We seem to be averaging at least one a decade since the 1980's. The hard truth is, Social Security isn't likely to see meaningful reform of any sort. Privatization and/or means testing are the elephants in the room that no one is going to be able to garner enough support to implement. Warren Buffett is right that the projected SS deficit isn't going to bankrupt the United States. Short of that, I just don't think we'll ever really reform the prgram.

My take on the initial question was whether or not there was a better way to utilize those FICA funds for the purposes they were originally intended. I think there is. If Social Security was a market fund, a government bond, or even a savings account, no one in their right mind would put their money in it. The rate of return is pitiful and projected to go negative for post boomers.

How poor an investment is it, really? Well, you could take what you need from FICA to provide disability and survivor benefits, use a part of it to boost the underwriting of the FDIC from $100,000 to $1,000,000 per, and mandate that everyone transfer the rest of it into a savings account at a FDIC insured banking institution. The rate of return of just doing that would be significantly better than what is offered today, and there still wouldn't be any risk to the individual investor. It's just a lousy way to "save" for retirement.

However, it's also a very emotionally charged issue, and money and emotion are very unhappy bedfellows as a rule. Consequently, no reform of how FICA dollars are utilized is forthcoming. We're just wasting pixels suggesting otherwise.

"unless your candidate is 1. going to raise taxes substantially or 2. make huge cuts in government spending."

I should clarify, no candidate will tell you this is what they are going to do. There may be some general references to spending cuts, but little particulars. Some candidates' plans will raise taxes, but not tied to SS.

In a couple of posts there seems to be a confusion between SS retirement benefits and SS disability. Those are two distinct programs. It's the retirement that's the primary issue.

With the number of those set to retire starting about now, the so-called babyboomers, there is not enough money in the SS program to pay those benefits. In 1950, there were 16 workers supporting one retiree. Today, that number is about 3. In a few years it will be 2.

Not electing "Bush's" won't solve the problem, unless your candidate is 1. going to raise taxes substantially or 2. make huge cuts in government spending. And, even with those it would only prolong the end, not solve the problem. Given no candidate currently running will do 1 or 2, we need to find a viable solution.

As previously pointed out, SS is a bad investment. It's worse for the poor who do not have the choice to make other investments. The wealthy don't depend on SS. The poor do. Doesn't it make sense to give those people options to get a fair return on the money the government is taking in SS taxes?

Some interesting information from the SS Board of Governors here:

http://www.ssa.gov/OACT/TR/TR05/II_highlights.html

Finally WhitesCreek states the obvious. Social Security is just fine the way it is and has been taking in more money than is paid out for about 20 years now.

As long as we stop electing Bushs our economy should be more than strong enough to push through the baby-boomer retirement pinch.

DOBBS: Are you surprised when you focus on the two deficits we just talked about, the trade deficit, and the budget deficit? The budget deficit is 3.6 percent of our GDP. The trade deficit is reaching just almost 6 percent of GDP. And the president is talking about reforming Social Security. Does that surprise you?

BUFFETT: Well, it's an interesting idea that a deficit of $100 billion a year, something, 20 years out, seems to terrify the administration. But the $400 plus billion dollars deficit currently does nothing but draw yawns. I mean the idea that this terrible specter room looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me.

That was in 2005. The numbers are even scarier now.

And...Remember to fact check anything a Republican says.

It's an insurance policy against disability. It's actually not even social security..It's the "Old Age Deposit Insurance Program" and I am personally a testament to its value to Americans and America.

My father died when I was 11. Mom survived on the $500 a month check while she took office classes and found a job. We didn't eat very well or have new clothes all the time, but we got by. Mom eventually worked her way up to Deputy Director in the Georgia Secretary of State's office working for Max Cleland. Between the two of us we have repaid the insurance system many times over, though Mom has passed on, and I'm still paying...Happily!

And anyway...There is no $10 trillion unfunded mandate and Social Security is not bankrupt. There's is a calculated deficit in 20 years, and that's all.

I don't agree with means testing for Social Security the way it is currently setup (and the way I have paid in to it for 40 years). I think wealthy people who pay in should get a check, even Bill Gates and Warren Buffet.

What wealthy people should be required to do, though, is pay in the same as working people. Some analysts say removing the income cap on payroll deductions would fix it.

After my benefit is locked in at the current rates based on my contributions and I start getting my checks, y'all can restructure it any way you want.

Giving money to millionaires seems really silly to me.

Even if these millionaires paid in to the SS system and are drawing based on their contributions the same as a more modest earner? So, we just say thanks for the pay-in, but we'll just keep it and give to someone else?

And, these reformers want to change the system where my money is down the crapper as far as I am concerned.

Some 'reformers' realize the SS system as-is cannot survive. They want to figure a away from keeping what you've paid-in from 'going down the crapper'. The gov't can't meet the obligations promised to the millions of baby-boomers. The SS system will bankrupt if there are no significant changes. We must have significant reform. The sad part is you can't have a discussion without scare tactics. It's a perfect example of political fighting bleeding over into policy-making.

We used to leave a lot of politics behind after the elections and try to do some good for the people. Now, too often, it's 24-7 political sound-bites. We need leaders, not politicians.

That is thing that chaps my backside.

I have looked at the amount taken out of my check for what, 35 years now? A good amount gone each paycheck.

And, these reformers want to change the system where my money is down the crapper as far as I am concerned.

That doesn't make me happy, though I will have to say I am not surprised.

I just applied for my first SS check last month. If the younger generation is planning to do away with it, I would ask that you please consider grandfathering just a pittance for my wrinkled old backside. I promise that I will only use the system for another forty years or so and I don't require much.

Carry on.

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Look, Social Security is not a safety net. It's not an anti-poverty program. It's not even a wealth redistribution program. It'a a defined benefit program with an absolutely abysmal rate of return. In other words, you get what you pay for. You don't pay in, you don't get anything out. Plain and simple.

Just get rid of it. Replace it with an honest-to-goodness anti-poverty program that targets ONLY THOSE WHO NEED IT. There's no reason Warren Buffett should be collecting a Social Security check. Pay for it out of general revenues so you don't have a parallel tax system (wait... that's 2 parallel tax systems, since we also have the AMT).

There are not enough choices in the list. It takes a mix of changes to age, eligibilty/means and the option of diverting some to private accounts. Few politicians will talk about it. All that 'third-rail' stuff, you know.

I don't think a tiered experiment would be easy to implement and it's still an experiment on people's retirement money that is bound to fail for too many.

Only the very savvy and lucky investors will do well. I pump a lot into my 401(k) and my Roth, and I try to manage it as best I can. I'm totally confused most of the time and I don't have enough time to work at it--even without kids. And all my retirement accounts are doing pretty poorly. (I hate to think how much I lost in 2000!) Most of my peers say they are in a similar situation.

I think we're going to wind up with masses of broke boomers and post boomers when we/they hit retirement (and who have been mostly politically disengaged), and they will demand that the government support them. And the government will have little choice but to do just that.

Social Security should remain the safety net. Anyone with more cash can invest in plenty of other ways.

The question should be "Once social security is not being used to cover the real size of the deficit in Washington (i.e., the SS payroll tax is not in surplus), what should be done about it?" The payroll cap is definitely the place to go at that point.

Remove the payroll cap.

If I were somehow appointed Social Security Administration dictator for a day, I'd remove the payroll cap entirely. However, I would permit half of the contributions above the present cap to be directed toward a portfolio of indexed mutual funds if the taxpayer opts to do so.

There's enough data about the long term (20+ year) growth of the stock market's primary indexes to attract my interest. At the same time, I have enough concerns about the general economic impact of of the impending mass retirement of the boomer generation to not want to take huge risks with the system we have now.

For those reasons, I'd like to experiment with limited privitization by allowing those who can best afford to take the risk to go ahead and take it. If the long term experiment proves successful, at some point in the fairly distant future (20 or 30 years from now), I'd remove the threshold and open up the 50% private investment option to everyone. If the experiment proves to be a failure, those who will depend most on social security would have been entirely protected.

Okay, let the bashing begin!