My folks had a rental property. It was a source of passive income for them. They paid taxes on this income. They sold the property and paid capital gains tax (a hefty amount). They got a notification this year that - because their income was greater - their SS was going to be cut this year. So - to recap - they paid taxes on a thing, paid taxes for the profit on the sale of the thing, and are now getting penalized for having money left over from the untaxed sale of the thing. All this is happening while Congress is arguing about how much more they want to go into debt - and what to spend that debt on. Imagine if we ran our household budgets the way the government runs the budget.
Paul Krugman is another one, although he is a legitimate economist. In fact, someone did sort of make an entire career out of debunking him. Check out the podcast and book (I think both exist) called “Contra Krugman”.
I just can't believe how easy it is to lie to people and tell them social security is their best path forward. The numbers are so clearly and obviously in the favor of the private market that ANY option that involved it would almost immediately be superior.
I said this to a friend of mine who was Ivy League educated. His immediate (programmed) response was that everyone's SS payments are too "big of a football" to enter the free market. I fail to find that a compelling argument at all...like additional investment money would crash the system? His actual concern was that ordinary people wouldn't know what to do with their investments, or whoever was assigned might be corrupt and do the wrong things with it -- like now 😂
@jdraven0890 well the easy answer is they don't have control of it... it would just automatically go into a broad market index or similar... and at some point you can control a certain % above it after a certain number of years
@@jdraven0890 You have an ignorant ass for a friend that is not educated but indoctrinated. Private insurance companies have been doing this for years and would leap head first into this. Tell your ignorant friend this and don't forget to tell him that he is ignorant.
Social Security is "popular" because no politician is willing to honestly talk about changing it. The word "privatize" will lose elections, regardless of which party is dominant in that district and any form of "fix" that isn't based on "tax the rich" will also lose elections.
First, Reich was once ranked 6th most influential business thinker by the WSJ. He received a Rhodes scholarship in political economy at Oxford, and spent his entire career studying public policy, teaching it at both Harvard and Berkeley. So, denigrating his credentials is a red herring. 70% of the economy is lower and middle income consumerism. So, while under ideal conditions private returns outpace soc sec, that's because of soc sec sustaining demand while the economy endures boom-bust cycles. 250 Americans now own more wealth than half of all Americans combined. So, the higher income earners are effectively disproportionately benefiting from soc sec since they're also benefiting the most from an economy sustained by soc sec along with other social programs. As the SSA website explains, the percentage of covered earnings has fallen since 1983 because higher incomes have outpaced the rest of wage earners.
@@tuberific454 Being influential isn't the same as being right. But as the video points out, taxing the rich isn't a fix, it's a temporary patch. There is no permanent fix as the system currently exists. It must be fundamentally altered for it to last. The makers of this video suggest privatization. There may be other alternatives. As for the system disproportionately benefiting the rich, that's Congress's fault and they won't change it because they directly benefit being all rich people. Congress always makes exceptions and workarounds for rich people because they are for themselves. The minimum pay for a Congressman puts them just shy of the 1% line in America. Most make a lot more than that from being paid to write books and do TV appearances, "consulting" fees, pushing their government expense accounts to the limit, being paid for other speaking engagements, spending campaign funds on personal things, etc.
@@darthhodges My point about Reich is that it is false to suggest that he's unqualified simply because he's a lawyer, which Davies suggests. Also, per a recent New England Journal of Political Science report, today's current budget woes are largely due to radical anti-tax policies that began in 1981. And, whether that's congress' fault or how much they're paid are more red herrings since the issue at hand is whether taxing the rich is an appropriate policy. Davies argues it isn't a solution, meaning by your logic, it's his fault since Congress, as far as policy is concerned, echoes that viewpoint. Simply put, Davies speaks to a fringe economic view that we all know as trickle-down economics. We know that tax cuts for the wealthy don't create jobs. Davies' economic ideology suggests otherwise, and money in politics has allowed that position to proliferate in public policy and in the public imagination despite its inherent fallacies.
@@tuberific454 My point is that the very politicians who advocate for policies like you and Reich are promoting are the very rich people they claim to be fighting against, so is Reich. As a result any attempt to implement such policies is filled with exemptions and loopholes negating their effect on actual rich people. A government made of rich people will never do anything to negatively affect themselves. Which is why I and Davies instead believe government should be smaller. A government with less power isn't worth bribing and won't attract people who intend to use it as a means to get rich.
I'm 40 and am assuming I won't be able to collect Social Security. Firstly because the government is so bad at handling money there won't be any in 23 years when I am eligible. Secondly because I'm a straight, white, male and I could easily see the next stop gap measure to be to declare certain "undesirable" people to be ineligible. The kind of people who would propose that see me as the worst of the worst.
@@Satjr35031 I don't have an IRA and haven't tracked any of the 401ks my current or previous employers supposedly set up for me. Since some of those companies no longer exist I'm assuming at least some of that money is lost permanently. Right now my retirement plan is that one of my kids makes enough money to take my wife and I on as dependents, or I work until I die.
even if Social Security is "bankrupt" in 2034 they still will be able to pay over 70% of benefits. Secondly, over 66 MILLION people are on Social Security. Do you know what would happen to the economy is this many people took a 20% hit to income? we're talking another Great Depression. except worse.
@@ShaggyRodgers420 You're incorrect on almost every 'point'. There are many countries that have retirement programs not run or mandated by the government. The actual argument here isn't only about the current SS system, it's about whether or not people are better off without government 'programs' that force compliance. I will argue to the death that we are. The 'One size fits all' approach of government programs is the model of inefficiency and kills competition and innovation.
@@ShaggyRodgers420 There is not even a grain of truth in our assertions. The professor is right in saying that SS is not fair, the idea that people make rational choices is not outdated, behavioural economists have only succeed in poisoning the definition of rational. The IRA rate of return is far superior to SS. And, it is a ponzi scheme because current retirees are funded by new investors.
The crowding out effect of social security is a disaster. It so severely limits the portion of income that can actually be saved for retirement or other life needs that has a crippling affect on society.
SS works as any other insurance - it’s crowd sourced. When you pay your car insurance or private health insurance, your resources are gone for the crowd to use. You get your IRA or 401k for individualized needs. I wish professor would create similar video exposing private insurance companies running same scheme as SS, and actually much worse.
@vg7985 You are the crowd, too. Except Social Security doesn't guarantee money to pay back to you but only to treasury bills. The professor even talked about this saying you can have the same security putting your money to treasury bills while having a much greater return than SS can ever provide.
The 1936 government Social Security pamphlet said that "after the first 3 years (1940) you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. Beginning in 1942 you will pay 2 cents and so will your employer for three years. Beginning in 1949 you and your employer will each pay 3 cents on each dollar up to $3,000 a year. This is the most you will ever pay!" The Social Security pamphlet closes with another lie: “Beginning November 24, 1936, the United States government will set up a Social Security account for you … The checks will come to you as a right.” First, there’s no Social Security account containing your money, but more importantly, the U.S. Supreme Court has ruled on two occasions that Americans have no legal right to Social Security payments.
I'm 54. I don't expect to get to retire because I made bad decisions on my retirement planning when I was young. I'm going to likely be working until lunch on the day of my funeral and will have to help to bury myself to pay for my funeral. Of course, I'm joking about my mistakes. But, I don't see Social Security as any security. I just won't retire if I have it to draw on it. I don't suspect that I will.
The other thing is that social security is counting on you to die before you receive all of the benefits you paid for. In a private retirement account the money you put in is yours and if you die it goes to your spouse or your children!
My BS radar turns on when some one says, "The rich need to pay their fair share." The term "fair share" is not adequately explain although it just comes down to envy.
Can you really envy? Then there is ill-gotten gain and untethered greed? Who doesn't such destroy by such behaviors and beliefs? The earth is choking on the gods and goddesses excess. Rich and poor. All ethnicities,religions,socioeconomic status are guilty. As the earth is dying under our golden feet. How many extinct animals? How many coral reefs are breathing? It's not about money. It's about having a conscience. The cost of a box of cereal says alot.
Back in the 80’s there was a popular consumer advocate named Howard Ruff. One day he did a short expose on the ultimate failure of the SS system. He proposed we should stop the charade and just call it what it really was, Welfare for seniors. Make it needs based and give it to those who qualify. Since then I have organized my life around that concept. Still too many of my Boomer cohort believed SS was their retirement plan. They will be gravely disappointed when between the programmed devaluation of the US currency and increasing taxes on benefits, their SS check will be lucky tobuy loaf or two of stale bread and a pint of rot gut vodka.
@@ShaggyRodgers420 of course you could be right. However, when I was working in public health service I had the occasion to be at a meeting with some upper level officials from Washington DC. The topic of the potential insolvency of Social Security and Medicare was discussed. The top official in the room did not share our concerns. He calmly explained that all we had to do was lower life expectancy by 5 years and everything would cash flow. We laughed, until we realized he was serious. It the to face the fact that the bureaucratic class view you and me as nothing more than an inconvenient expense, One they feel they can cancel at their leisure.
Why doesn't America do what we have in Australia, "compulsary supperanuation", essentially you pay the same amount ~12% of your income but it goes to your choice of private trust or company to reinvest for you. No defaulting on your loans or the government getting in the way, what you pay is what you get.
I would prefer to have all of that as well, but we do have something like that on top of social security. I put in 5% and my company matches 5% on my “401k account” that I invest in a global equity fund.
Thanks Prof Davies, I was waiting for you to set the record straight on one of Mr. Reich's misleading videos. Here in Canada, Canada Pension contributions stop after a person's gross income reaches a ceiling amount, and I take full advantage of that by investing more. We pay quite a bit less here and CPP is nothing to live on unless a person has no rent or mortgage or any debt at all. I didn't know SS was that broken. You are world class sir !
Basic math proves that redirecting SocSec contributions into an IRA-type vehicle results in more funds available to individuals over the long term. That said, has anyone modeled the effects of all that extra cash suddenly going into securities? Would it be too much $$ chasing a finite amount of return or would it spur the economy to tremendous growth? Probably both, depending on time horizon?
You already see it with retirement accounts. Stocks just simply become overvalued. Instead of the historical avg stock trading at a P.E. ratio between 10-15 most now trade over 20 with many over 50 which is insane.
There is no such thing as a finite amount of return. Wealth is not a zero sum game, new wealth can be created everyday. New companies, new products, new tech.
The problem is for people who have paid in for decades but have not yet received anything from social security. What is the best age group to start changes?
Robert Reich claims to be an economist? Me, too! I got my degree from Armchair University. Which wasn't easy, considering that most of my chairs don't have arms! And even i know that the only way to "save" Social Security is to raise taxes and/or lower benefits. The sooner we scrap it the better. I'm not getting any younger!
Yeah, his # are no more accurate than RRs. Employees don’t pay @ a rate of 12.5% they pay half that and the employer pays the other half. He also doesn’t include current data for early withdraws from deferred accounts seen every time there’s an economic downturn and people lose their jobs. The real issue is debt fueled consumption by both the private/public sector.
@@Newlinjim I'm stunned he said the "rich" employee paid over $3 million in Social Security tax. How? And then he had him dying at 80 too, even though the life expectancy for someone at 65 is in the late 80s Criticize the system all you want but man, at least provide the evidence of where the numbers come from.
The ultimate problem is this: you CANNOT have an honest, open discussion about this with people in Congress. Anybody wanting to raise the issue gets attacked, demagogued, and spit upon by the media.
Yes - and since everyone has no choice to contribute and had already been contributing at the level required into accounts that were supposedly individual accounts...how can Reich say that with a straight face unless he is total fraud.
Simple, he is paid to do it and doesnt have to worry about it. Google says his net worth is over 4 million so he is probably worth well beyond that with assets that dont show as net worth.
I remember in the 1980's reading about Social Security that I as young won't seen Social Security when I reach the retirement age. I did learn to invest and saved, and boy did that article hit it spot on on when they said Social Security won't be around for us Gen X, and millennials, and gen Z, and Gen Alpha etc. etc. etc.
Very good video I got to say if you want to see more debunking of Robert Reich. You should checkout the political checkmate videos responding to Robert Reich.
Exactly why I never depended on the government program called Social Security! I have lived my life with the basic principle of frugality and never bought anything I didn’t have the cash for. Every subsidy designed by governments is a business subsidy.
First step is not making retirement planning attached to your employment. It should be like your bank account. Something you give to your employer and they deposit to it. Instead of how it is now, where your benefits are whatever management chose. Then you go work somewhere else and have a huge headache transitioning. Especially since it locks your account down during that transition.
This concept of "paying your fair share" is perhaps one of the most unfair ideas that socialists have. It's based on the misguided notion that simply having more means you should pay more, but it completely ignores HOW a person accumulated their wealth, or why they didn't accumulate enough wealth. This is a core concept of socialism and it's one of the reasons socialism can never work: it discourages rather than promotes wealth creation. Let's be honest, the vast majority of workers utterly depend on business owners to provide them with a job. How well is the average gig worker doing? Most of them would be much better off with a stable well-paying job---that someone else gave them.
Stop funding social security through taxes immediately, and to ensure that the people who have already paid in will get their just benefits, demand that all misappropriated social security funds be psid back into the social security fund. The government departments who took money from social security must replenish social security from their own budgets, including interest that would have been earned. Easy peasy.
Lezs not forget that if you tax the rich too much that they become poorer and what that?If they become a middle class earners than we can surely expect social security to fail and collapse
The government doesn't care about you. Also, we are all assuming that the dollar is going to have value when we retire. At the rate of monetary inflation is going, millions will be left in the cold.
Great video, although you missed the most obvious effect of Mr. Reich's decision to remove the cap - 12% payroll and investment tax on the wealthy. This will have a huge negative effect on the economy. Private accounts would be the only answer to saving social security in the long run. I believe Argentina took that route decades ago.
The last person in this country that I will allow to define for me what is the "fair share" of the anyone is Robert Reich. Good Lord, is that man a little creep.
at 2:26 how do you figure the person paid over $3million into Social Security taxes? Secondly, you have the person dying at 80. The life expectancy for someone at 65 is WAY beyond 80.
He has some videos that are out right laughable, and then you read the comment section and it’s even worse. He did one recently on airline travel that I swear was written by a 4 year old.
@@itsoktobehappy461 I know that feeling a few weeks The Political Checkmate has done a video responding to Reich video where he scapegoats candy cost on candy business profits completely hand waving the increase cost and them having increased sales
@@ericbailey9549 No they didn't and they haven't. Maybe for the younger generation that believes poison is food will fall into that category but that is a life choice not how life was designed.
@alfrednewman292 You really seem passionate about this and at this point I'm just another thing on the internet. But maybe take a minute and look into it for yourself. Merry Christmas and have a happy new year.
My dividend journey began when I realized that two particular expenses in my budget were always going to go up and never go down. The two expenses were taxes and insurance. I realized that the dramatic rise in both will need some added income. So, I started buying shares paying dividends. I can now see that this will be the path I need to take to make sure those two expenses will not overtake my future income.
As a beginner, educate yourself, Learn the basics of investing and the stock market. There are many resources available online, including books, articles, and online courses. It’s a good idea to diversify your portfolio across different stocks and sectors to minimize risk. I’ve heard of people accruing over $550k during recessions and inflation, its important to do your own research.
Yes, I've been in constant touch with a Financial Analyst for approximately 8 months. You know, these days it's really easy to buy into trending stocks, but the task is determining when to sell or keep. That's where my manager comes in, to help me with entry and exit points in the industries I'm engaged in. Can’t say I regret it, I’m 40% up in profits just in 5months with my initial capital of $160k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I might need some management on my much larger portfolio. Don't want to take any chances.
“Jessica Lee Horst” is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
The numbers: SS is taxed at 6.20% of our income (7.65% if you include Medicare). USA made $1.1 Trillion from SS taxes in 2022. USA spent $1.4 Trillion in 2023. There is a discrepancy that needs to be addressed.
@@HeritageWealthPlanning If you read my following post you should have your answer. Everyone pays at an ever DEcreasing rate according to income that amounts to nothing they'll ever miss. The dilemma is that those who depend on SS can't have a quality of life that anyone considers 'quality". Think "hungry". The system is rigged to make the wealthy wealthier by making the poor poorer. I'm retired and do much better than "hungry" but if there' were no SS I'd be cutting it close.
Even giving every citizen a government account to hold 12% of their annual income, which was solely invested in treasury bills, bonds, and notes, TIPS, or I bonds would be a better solution. These investments don’t offer the same potential rate of return as the private equity market, but they carry the “full faith and credit” guarantee that the current SSI system does. It seems like this would maintain the revenue stream that the federal government needs while offering a better retirement to every US citizen. It might sorely disrupt the bond market as maybe the federal government wouldn’t need to sell as many bonds to foreign governments and private equity firms. But i’d be willing to bet this problem could be solved. Alternatively, push the program down to the state governments to manage. Make the accounts transportable if you move from state to state. Let competition for performance drive returns on state bonds and responsible governments reap the benefits of more people and money migrating to the states that offer a better rate of return.
How about instead of asking the rich to pay more, we(as in the rest of the country) just stop federal taxes instead? I think everybody can get behind that.
There seems to be a slight issue with the initial "rich" calculation unless I'm missing something. The max any person will pay into social security tax is approximately $10,000/year as the max income limit for the tax is around $160k. So, the most a person would pay in (without inflation adjustments down the road) is about $420k over 42 years in this case.
You have to double your number you figured it as a 6.2% tax when it actually eats 12.4%. Yes, SS automatically lowers wages because your employee pays half of your payroll tax instead of paying you. Secondly, you have to figure for the cap slowly growing over that 42 year period. Thirdly, you have to account for opportunity lose as instead of making a small amount of interest you actually lose to inflation.
@@raywillett8050 All the factors? Unless I'm missing a comment somewhere you only listed one, which is the company's required SS payment. That also stops (as of today) around $10k. Therefore you can just double the numbers I mentioned previously. The only way the math gets close to the $3.1 million mentioned in the video is if you assume the SS tax limit keeps getting raised at around 9% per year on average for the next 42 years as it has for the last 8. But, using that assumption the taxpayer would pay a total of $4.4 million over the 42 years and would pay almost $400k into social security in their last year of work alone. My guess is they used some kind of inflation adjustment for the social security tax but I don't see the numbers for the calculation listed in the video.
The only issue I see with this is that I serisouly doubt of a lot of people's ability to take that 12% and invest it instead of spending it away on stuff or getting caught in BS "investment opportunities"
Wait, if the population shrinks, it might help. We could also always tell illegal immigrants they will not be eligible for benefits yet still have to pay the taxes. It won’t solve both problems, but it might help both a little.
Illegal immigrants are actually a net positive for SS. Half of them pay into Social Security and Medicare, though they won't ever be able to claim benefits.
It's probably the lesser of the evils that it wasn't put into the S&P. Had it been, politicians would have quickly come under pressure from lobbyists to invest more in the lobbyists' favored stocks. That would have ruined stock markets.
Plus, not everyone who pays into SS gets anything back at all. Some people die after paying in for decades but before they start to collect, or die immediately after they start to collect
the same could happen to people with 401k and/or IRA accounts. Both my parents had it set up that if one died , the other would get keep getting retirement SS on top of their own check. Your family members could be listed as beneficiares.
I also need to find out where Richard Wolff and AOC got their economics degree? They must have gone to the World Wrestling Federation or Jerry Springer of universities.
Just imagine if instead of SS having a separate fund and the massive bureaucracy that has been built up around it, what if people were simply required by law to have put all that money they’ve contributed to SS in a mutual fund which they legally cannot access until their 60th birthday. They would have earned about 10% on their money and many of the people who barely eke out a retirement with SS funds might instead be millionaires. Is that too naive?
It’s delusional, not just naive. No private fund would guarantee you 10% return. Chile actually is done something similar. After overturning communist government people were allowed to contribute to private retirement funds instead of government run SS. I would suggest you check how this experiment turned out.
The problem with private retirements is that people don't have the discipline to keep their hands off their long term savings such as 401ks. When people reach their first $100k they decide that it's time to withdraw money and drain their 401ks. Need to pass laws on forbidding people from withdrawing money from their private accounts. If not this private retirement funds will not work either.
Much of the top earners are already paying on all their income. Only the very rich aren't. Let's assume the untamed income is $1T, at 15%, that is $150B, with 75 million on SSI, that is $2000 per year. How does that little save SSI? This is just another "blame the rich" diatribe.
Government: we will provide for your retirement by taking your money in taxes and then giving it back when you are older, calling that income and taxing your taxes again.
The idea that the average to below average 40 year old would start immediately saving 12% of their income as soon as they stop paying SS tax is a fairytale. Do you make some sort of law that people are forced to put money into private retirement accounts? If so then it's not that different from SS it's just you get to keep it? If not then there is going to be a massive burden on future generations having to take care of their parents/grandparents who now don't even have the tiny bit of social security to fall back on.
@@raywillett8050or bad investments. Private funds would never guarantee you return, any return. Many funds will burn through people money and will pay nothing when they get old. It will be much worse than SS.
11:00 you mention that Social Security is good for the Very Poor. You didn't mention the fact that the poor are almost exclusively the young, by the time you get to the end of your life almost no one who began poor will be there by retirement age.
Professor Davies we must restructure the whole of federal state and local government spending we need government government spending to slow while we also need governments to save more and help citizens as well save more 25% of GDP
They never will, because they want to manage our money instead of helping empowering people. The rich should pay more into social security, it's ridiculous.
It is also the same in Malaysia. You pay into the system into your own accounts, the company will also pay into the system almost matching or more than your contribution. The money is your own. You get them back after age 55.
Right, because those making 200k+ shouldn't pay into Social Security according to what they make on their entire income.., yet it's fair for anyone making 35-100k to pay off their ENTIRE salary just because. Talk about unjust. @@HeritageWealthPlanning
I love the 'Social Security has lost money due to income caps' argument. What?!? To the contrary, the continuous increases in the income cap have meant an increased loss of money to each new generation of taxpayers! The last increase is nearly double the cap of ten years ago! Is it better yet? Nope!
So instead of our money being taxed and going directly to people for retirement, we can buy stocks, putting money into ownership of companies. These companies hopefully will use that capitol for loans in a productive manner and produce products and services for the people. Does adding money to the stock market help or make much of a difference in an economy? I am still split after watching. I agree that Robert Reich is spewing completely ignorant falsehoods, but that doesn’t mean scrapping the social security program is a good idea. I suppose is not scrapping all of it, but keeping it for the low income?
The only way to save people from themselves is to slowly increase taxes on the rich until it's 100% and then slowly moving down to middle class and the poor.
If everyone who works and their employers pay more in taxes, say it's 5% more combined, isn't that 5% out of the economy that would otherwise be spend in other ways?
This was rhetorical. About 14% comes out of a workers check, so if 5% more comes out of everyones check to keep Social Security going for a little bit longer, that's 5% out of the economy that everyone would have otherwise used elsewhere. That'd be 5% less out of the economy for this big program that's always going to need more tinkering. It would be the same if it's just for the wealthy.@@RextheRebel
I think you are smart enough to know most people will not invest the money currently being captured by social security. I don't usually champion Robert Reich's points or ideas but on this I will take his opinions vs yours.
Not only that, but if private retirement investments were so much better, wouldn’t it make sense for the social security administration to simply do the same thing, to invest the social security fund the same way as a private investor would? There must be some reason why they don’t do that, why they continue with more conservative investments.
@@jpny4750 Probably because social security is a child of the greate depression. Being in the market at that time was not favorable. Times have changed and I would not be bothered if they invested part of the funds in the market.
I watched your video until the end. I personally think your premise is partial. First, social security pays also to disabled and needy. The reason for the lower rate of return is the disbursement to those who end up becoming disabled. You're completely ignoring this segment, which i hope, given your expertise, is not intentional . I do however believe that high earners should be taken off while do pay into the system just as initially FDR in 1940s proposed to congress. Also, we could reform input of funds into private indexes to get better result. Second, politicians are not the only con artist for ponzy scheme. It hasn't been much long since head nazdaq. Third, I still didn't understand how you came up with numbers for income earners above social security $142k cap. I love to have a debate with you.
"...social security pays also to disabled and needy." Yes, but that's a small portion of Social Security. We could keep that and have a program a fraction of the size it is now. "The reason for the lower rate of return is the disbursement to those who end up becoming disabled." No, the reason for the lower return is that, by law, SS invests its surplus in Treasury bonds - they pay the lowest interest of pretty much any investment on the planet.
in an era when a simple majority of adults NEVER work, NEVER pay taxes, and live their entire lives at the expense of those who do work and pay taxes, no politician is ever going to be in favor of scrapping a ponzi scheme in which they buy votes of the unproductive at someone else's expense and moving to a system like Singapore's where the citizens are required to save for retirement, but the system is that the citizen does not pay into a "social security" plan, but into IRAs, 401Ks, etc. Private retirement accounts are mandatory, but government ponzi schemes are not part of it. So how do politicians get elected in Singapore? By delivering a safe, secure, and economically free nation. What a concept.
Taxing social security doesn't tell me it's not successful. You don't tax a program that isn't making any money. Taxing social security was a trick to raid the social security fund, because it is so successful. We are then told that without social security socked away, retirees would have that income available for a private retirement fund. Of course, in real life it would all get spent up on everyday bills for most people during the course of their lives, and we would have massive rates of poverty. That's why ss was invented in the first place, and these impoverished elderly would be a burden on the state.
Well, if McDonald's workers were given the choice between their current situation and earning a wage above the current cap, they would probably choose the latter and start contributing to a private retirement account. Give me a break.
My folks had a rental property. It was a source of passive income for them. They paid taxes on this income. They sold the property and paid capital gains tax (a hefty amount). They got a notification this year that - because their income was greater - their SS was going to be cut this year.
So - to recap - they paid taxes on a thing, paid taxes for the profit on the sale of the thing, and are now getting penalized for having money left over from the untaxed sale of the thing.
All this is happening while Congress is arguing about how much more they want to go into debt - and what to spend that debt on. Imagine if we ran our household budgets the way the government runs the budget.
I should have known Robert Reich wasn't a real economist. Now I totally get why he makes the arguments he does.
Nah, don't give "real economists" any credit. You ever heard of Paul Samuellson? Come on, now
Have you looked at yourself in the mirror? I hope the rich can afford to give more to those who need money versys those who give lip service.
@@persianmoney3678 I don't pretend to be an economist.
@@HeritageWealthPlanningyeah that dude was wicked dumb for being locked smart
social security is so great you face imprisonment if you don't participate.
Unless you're in the clergy of some religion or in government.
And where did you come up with that gem?
????????
Police and Fire in my City can opt out.
Query: GPO/WEP
@@alfrednewman292 Have you tried not paying your taxes? You'll find out real quick.
Some teachers and railroad workers don’t pay into Social Security either
Someone could make an entire career out of debunking Robert Reich.
Paul Krugman is another one, although he is a legitimate economist. In fact, someone did sort of make an entire career out of debunking him. Check out the podcast and book (I think both exist) called “Contra Krugman”.
@@PseudifyI second this. The Contra Krugman podcast was pure gold!
@@PseudifyWasn't Paul Krugman known as the "forehead" by Rush Limbaugh?
Not to mention, if social security never existed people would not look forward to it and would then, hopefully, plan accordingly.
The Political Checkmate has made an entire series of responses to Robert Reich videos
I just can't believe how easy it is to lie to people and tell them social security is their best path forward. The numbers are so clearly and obviously in the favor of the private market that ANY option that involved it would almost immediately be superior.
I believe Norway does something like this... I call it a "Forced Roth IRA"
Well in a sane world you would be entirely right but then this has not been a sane world for a long, long time.
I said this to a friend of mine who was Ivy League educated. His immediate (programmed) response was that everyone's SS payments are too "big of a football" to enter the free market. I fail to find that a compelling argument at all...like additional investment money would crash the system?
His actual concern was that ordinary people wouldn't know what to do with their investments, or whoever was assigned might be corrupt and do the wrong things with it -- like now 😂
@jdraven0890 well the easy answer is they don't have control of it... it would just automatically go into a broad market index or similar... and at some point you can control a certain % above it after a certain number of years
@@jdraven0890 You have an ignorant ass for a friend that is not educated but indoctrinated. Private insurance companies have been doing this for years and would leap head first into this. Tell your ignorant friend this and don't forget to tell him that he is ignorant.
Social Security is "popular" because no politician is willing to honestly talk about changing it. The word "privatize" will lose elections, regardless of which party is dominant in that district and any form of "fix" that isn't based on "tax the rich" will also lose elections.
Unfortunately, you're right.
First, Reich was once ranked 6th most influential business thinker by the WSJ. He received a Rhodes scholarship in political economy at Oxford, and spent his entire career studying public policy, teaching it at both Harvard and Berkeley. So, denigrating his credentials is a red herring. 70% of the economy is lower and middle income consumerism. So, while under ideal conditions private returns outpace soc sec, that's because of soc sec sustaining demand while the economy endures boom-bust cycles. 250 Americans now own more wealth than half of all Americans combined. So, the higher income earners are effectively disproportionately benefiting from soc sec since they're also benefiting the most from an economy sustained by soc sec along with other social programs. As the SSA website explains, the percentage of covered earnings has fallen since 1983 because higher incomes have outpaced the rest of wage earners.
@@tuberific454 Being influential isn't the same as being right. But as the video points out, taxing the rich isn't a fix, it's a temporary patch. There is no permanent fix as the system currently exists. It must be fundamentally altered for it to last. The makers of this video suggest privatization. There may be other alternatives.
As for the system disproportionately benefiting the rich, that's Congress's fault and they won't change it because they directly benefit being all rich people. Congress always makes exceptions and workarounds for rich people because they are for themselves. The minimum pay for a Congressman puts them just shy of the 1% line in America. Most make a lot more than that from being paid to write books and do TV appearances, "consulting" fees, pushing their government expense accounts to the limit, being paid for other speaking engagements, spending campaign funds on personal things, etc.
@@darthhodges My point about Reich is that it is false to suggest that he's unqualified simply because he's a lawyer, which Davies suggests. Also, per a recent New England Journal of Political Science report, today's current budget woes are largely due to radical anti-tax policies that began in 1981. And, whether that's congress' fault or how much they're paid are more red herrings since the issue at hand is whether taxing the rich is an appropriate policy. Davies argues it isn't a solution, meaning by your logic, it's his fault since Congress, as far as policy is concerned, echoes that viewpoint. Simply put, Davies speaks to a fringe economic view that we all know as trickle-down economics. We know that tax cuts for the wealthy don't create jobs. Davies' economic ideology suggests otherwise, and money in politics has allowed that position to proliferate in public policy and in the public imagination despite its inherent fallacies.
@@tuberific454 My point is that the very politicians who advocate for policies like you and Reich are promoting are the very rich people they claim to be fighting against, so is Reich. As a result any attempt to implement such policies is filled with exemptions and loopholes negating their effect on actual rich people. A government made of rich people will never do anything to negatively affect themselves. Which is why I and Davies instead believe government should be smaller. A government with less power isn't worth bribing and won't attract people who intend to use it as a means to get rich.
I'm 40 and am assuming I won't be able to collect Social Security. Firstly because the government is so bad at handling money there won't be any in 23 years when I am eligible. Secondly because I'm a straight, white, male and I could easily see the next stop gap measure to be to declare certain "undesirable" people to be ineligible. The kind of people who would propose that see me as the worst of the worst.
How is your IRA or 401K doing?
@@Satjr35031 I don't have an IRA and haven't tracked any of the 401ks my current or previous employers supposedly set up for me. Since some of those companies no longer exist I'm assuming at least some of that money is lost permanently. Right now my retirement plan is that one of my kids makes enough money to take my wife and I on as dependents, or I work until I die.
even if Social Security is "bankrupt" in 2034 they still will be able to pay over 70% of benefits. Secondly, over 66 MILLION people are on Social Security. Do you know what would happen to the economy is this many people took a 20% hit to income? we're talking another Great Depression. except worse.
There shouldn't be anything beyond 2035 from what I’ve heard.
@@CigaretteCrayon You heard it so it must be true.
Great video. Thank you Prof Davies for clear and honest talk. I'm so sick of the political talking points rather than actual facts.
@@ShaggyRodgers420 You're incorrect on almost every 'point'. There are many countries that have retirement programs not run or mandated by the government.
The actual argument here isn't only about the current SS system, it's about whether or not people are better off without government 'programs' that force compliance. I will argue to the death that we are. The 'One size fits all' approach of government programs is the model of inefficiency and kills competition and innovation.
@@ShaggyRodgers420 There is not even a grain of truth in our assertions. The professor is right in saying that SS is not fair, the idea that people make rational choices is not outdated, behavioural economists have only succeed in poisoning the definition of rational. The IRA rate of return is far superior to SS. And, it is a ponzi scheme because current retirees are funded by new investors.
The crowding out effect of social security is a disaster. It so severely limits the portion of income that can actually be saved for retirement or other life needs that has a crippling affect on society.
SS works as any other insurance - it’s crowd sourced. When you pay your car insurance or private health insurance, your resources are gone for the crowd to use. You get your IRA or 401k for individualized needs. I wish professor would create similar video exposing private insurance companies running same scheme as SS, and actually much worse.
Except that social security has very little in common with insurance.
@vg7985 You are the crowd, too. Except Social Security doesn't guarantee money to pay back to you but only to treasury bills. The professor even talked about this saying you can have the same security putting your money to treasury bills while having a much greater return than SS can ever provide.
The 1936 government Social Security pamphlet said that "after the first 3 years (1940) you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. Beginning in 1942 you will pay 2 cents and so will your employer for three years. Beginning in 1949 you and your employer will each pay 3 cents on each dollar up to $3,000 a year. This is the most you will ever pay!" The Social Security pamphlet closes with another lie: “Beginning November 24, 1936, the United States government will set up a Social Security account for you … The checks will come to you as a right.” First, there’s no Social Security account containing your money, but more importantly, the U.S. Supreme Court has ruled on two occasions that Americans have no legal right to Social Security payments.
Robert Reich isn't held up inn public because he's a serious intellect. He's held up in public because he's too short to see otherwise.
Funny !
So glad to see Learn Liberty coming back to its roots in making videos like this. Going to increase my annual donation to SFL.
I'm 54. I don't expect to get to retire because I made bad decisions on my retirement planning when I was young. I'm going to likely be working until lunch on the day of my funeral and will have to help to bury myself to pay for my funeral. Of course, I'm joking about my mistakes. But, I don't see Social Security as any security. I just won't retire if I have it to draw on it. I don't suspect that I will.
Always loved these videos. Hope you guys do more
The other thing is that social security is counting on you to die before you receive all of the benefits you paid for. In a private retirement account the money you put in is yours and if you die it goes to your spouse or your children!
My BS radar turns on when some one says, "The rich need to pay their fair share." The term "fair share" is not adequately explain although it just comes down to envy.
Very true, it’s almost pure envy. They know it’s envy, but will go to the grave stating otherwise.
Can you really envy? Then there is ill-gotten gain and untethered greed? Who doesn't such destroy by such behaviors and beliefs? The earth is choking on the gods and goddesses excess. Rich and poor. All ethnicities,religions,socioeconomic status are guilty. As the earth is dying under our golden feet. How many extinct animals? How many coral reefs are breathing? It's not about money. It's about having a conscience. The cost of a box of cereal says alot.
This professor is absolutely great
Name three things he's ever been right about.
Back in the 80’s there was a popular consumer advocate named Howard Ruff. One day he did a short expose on the ultimate failure of the SS system. He proposed we should stop the charade and just call it what it really was, Welfare for seniors. Make it needs based and give it to those who qualify. Since then I have organized my life around that concept. Still too many of my Boomer cohort believed SS was their retirement plan. They will be gravely disappointed when between the programmed devaluation of the US currency and increasing taxes on benefits, their SS check will be lucky tobuy loaf or two of stale bread and a pint of rot gut vodka.
no, abolish all govt welfare and destroy all regulations on the real solution: mutual aid. Read mutual aid and fraternal societies by david beito.
Yes -- I have always assumed that SS won't be available when I retire, it's not even part of my thinking on it
@@ShaggyRodgers420 of course you could be right. However, when I was working in public health service I had the occasion to be at a meeting with some upper level officials from Washington DC. The topic of the potential insolvency of Social Security and Medicare was discussed. The top official in the room did not share our concerns. He calmly explained that all we had to do was lower life expectancy by 5 years and everything would cash flow. We laughed, until we realized he was serious. It the to face the fact that the bureaucratic class view you and me as nothing more than an inconvenient expense, One they feel they can cancel at their leisure.
We need an opt out it's absolutely insane it's forced on us all.
@@ShaggyRodgers420 Read Mutual Aid and Fraternal Societies by David Beito.
Let them cry @@ShaggyRodgers420
Why doesn't America do what we have in Australia, "compulsary supperanuation", essentially you pay the same amount ~12% of your income but it goes to your choice of private trust or company to reinvest for you. No defaulting on your loans or the government getting in the way, what you pay is what you get.
I would prefer to have all of that as well, but we do have something like that on top of social security. I put in 5% and my company matches 5% on my “401k account” that I invest in a global equity fund.
Thanks Prof Davies, I was waiting for you to set the record straight on one of Mr. Reich's misleading videos. Here in Canada, Canada Pension contributions stop after a person's gross income reaches a ceiling amount, and I take full advantage of that by investing more. We pay quite a bit less here and CPP is nothing to live on unless a person has no rent or mortgage or any debt at all. I didn't know SS was that broken. You are world class sir !
Basic math proves that redirecting SocSec contributions into an IRA-type vehicle results in more funds available to individuals over the long term. That said, has anyone modeled the effects of all that extra cash suddenly going into securities? Would it be too much $$ chasing a finite amount of return or would it spur the economy to tremendous growth? Probably both, depending on time horizon?
You already see it with retirement accounts. Stocks just simply become overvalued. Instead of the historical avg stock trading at a P.E. ratio between 10-15 most now trade over 20 with many over 50 which is insane.
There is no such thing as a finite amount of return. Wealth is not a zero sum game, new wealth can be created everyday. New companies, new products, new tech.
The problem is for people who have paid in for decades but have not yet received anything from social security. What is the best age group to start changes?
At 62 years--If you don't need it for living expenses, put it in S &P 500 mutual funds.
Robert Reich claims to be an economist? Me, too! I got my degree from Armchair University. Which wasn't easy, considering that most of my chairs don't have arms! And even i know that the only way to "save" Social Security is to raise taxes and/or lower benefits. The sooner we scrap it the better. I'm not getting any younger!
What about inflation? Do these stats adjust for inflation? A 4% return is negative if inflation is more than 4% annually.
Yeah, his # are no more accurate than RRs. Employees don’t pay @ a rate of 12.5% they pay half that and the employer pays the other half. He also doesn’t include current data for early withdraws from deferred accounts seen every time there’s an economic downturn and people lose their jobs. The real issue is debt fueled consumption by both the private/public sector.
@@Newlinjim I'm stunned he said the "rich" employee paid over $3 million in Social Security tax. How? And then he had him dying at 80 too, even though the life expectancy for someone at 65 is in the late 80s
Criticize the system all you want but man, at least provide the evidence of where the numbers come from.
The ultimate problem is this: you CANNOT have an honest, open discussion about this with people in Congress. Anybody wanting to raise the issue gets attacked, demagogued, and spit upon by the media.
Reminder that there is no such thing as a “fair share” and such words are only used by greedy thieves wanting to take more of your money.
Yes - and since everyone has no choice to contribute and had already been contributing at the level required into accounts that were supposedly individual accounts...how can Reich say that with a straight face unless he is total fraud.
RR knows that his “solution” isn’t a long term solution. How do guys like him sleep at night when they lie to the public in such a despicable way.
I'm not so sure, Reich is an idiot and probably knows nothing
Simple, he is paid to do it and doesnt have to worry about it. Google says his net worth is over 4 million so he is probably worth well beyond that with assets that dont show as net worth.
I hear hobbit holes are quite comfy.
Robert Reich always has the worst possible takes. He’s better at dunking a basketball than he is at economic policy.
Agreed and The Political Checkmate has made many videos supporting that idea
Not sure who's more dangerous, Paul Krugman or Robert Reich. But neither should have any say in our public policies.
I remember in the 1980's reading about Social Security that I as young won't seen Social Security when I reach the retirement age. I did learn to invest and saved, and boy did that article hit it spot on on when they said Social Security won't be around for us Gen X, and millennials, and gen Z, and Gen Alpha etc. etc. etc.
Very good video I got to say if you want to see more debunking of Robert Reich. You should checkout the political checkmate videos responding to Robert Reich.
I wish I could opt out of SS
There’s a form
Only exempt if you work for religious organization or resident alien/non-citizen. Everyone else it’s mandatory.
Exactly why I never depended on the government program called Social Security! I have lived my life with the basic principle of frugality and never bought anything I didn’t have the cash for. Every subsidy designed by governments is a business subsidy.
First step is not making retirement planning attached to your employment. It should be like your bank account. Something you give to your employer and they deposit to it. Instead of how it is now, where your benefits are whatever management chose. Then you go work somewhere else and have a huge headache transitioning. Especially since it locks your account down during that transition.
This concept of "paying your fair share" is perhaps one of the most unfair ideas that socialists have. It's based on the misguided notion that simply having more means you should pay more, but it completely ignores HOW a person accumulated their wealth, or why they didn't accumulate enough wealth. This is a core concept of socialism and it's one of the reasons socialism can never work: it discourages rather than promotes wealth creation. Let's be honest, the vast majority of workers utterly depend on business owners to provide them with a job. How well is the average gig worker doing? Most of them would be much better off with a stable well-paying job---that someone else gave them.
Stop funding social security through taxes immediately, and to ensure that the people who have already paid in will get their just benefits, demand that all misappropriated social security funds be psid back into the social security fund.
The government departments who took money from social security must replenish social security from their own budgets, including interest that would have been earned.
Easy peasy.
I would love to see a live debate between Professor Davis and Reich.
Lezs not forget that if you tax the rich too much that they become poorer and what that?If they become a middle class earners than we can surely expect social security to fail and collapse
When I retire, I expect the government to send me checks. Anything other than that is brutal, cruel, and unfair.
The government doesn't care about you. Also, we are all assuming that the dollar is going to have value when we retire. At the rate of monetary inflation is going, millions will be left in the cold.
I’m sure they’ll provide a ‘safe space’ for you.
It’s literally “the more you make, the more they take”.
No it really isn't, because those making 150-200k+ pay no social security on wages beyond those levels.
Great video, although you missed the most obvious effect of Mr. Reich's decision to remove the cap - 12% payroll and investment tax on the wealthy. This will have a huge negative effect on the economy. Private accounts would be the only answer to saving social security in the long run. I believe Argentina took that route decades ago.
I guess it was alright to go from just over 4% in 1972 to 6.2% in 1992
The last person in this country that I will allow to define for me what is the "fair share" of the anyone is Robert Reich.
Good Lord, is that man a little creep.
at 2:26 how do you figure the person paid over $3million into Social Security taxes? Secondly, you have the person dying at 80. The life expectancy for someone at 65 is WAY beyond 80.
A textbook Ponzi scheme - thank you!!
Robert Reich is insufferable. But at least he makes it easy: if he says we should do something, we should do the opposite.
He has some videos that are out right laughable, and then you read the comment section and it’s even worse. He did one recently on airline travel that I swear was written by a 4 year old.
Yeah The Political Checkmate has shown that doing the opposite of Reich suggests would be beneficial
@@itsoktobehappy461 I know that feeling a few weeks The Political Checkmate has done a video responding to Reich video where he scapegoats candy cost on candy business profits completely hand waving the increase cost and them having increased sales
A word not commonly used anymore, insufferable.
@@jeannedouglas9912 Agreed and the many videos I have debunked on him insufferable is light way to describe him
Social security was always meant to be a tax.
By the exercise of language you are absolutely correct but in reality it is much worse than taht.
@@alfrednewman292 From day one they set the collection age higher than the average life expectancy.
@@ericbailey9549 No they didn't and they haven't. Maybe for the younger generation that believes poison is food will fall into that category but that is a life choice not how life was designed.
@alfrednewman292 You really seem passionate about this and at this point I'm just another thing on the internet. But maybe take a minute and look into it for yourself. Merry Christmas and have a happy new year.
@@ericbailey95491935 , the collection age was after the life-expectancy
My dividend journey began when I realized that two particular expenses in my budget were always going to go up and never go down. The two expenses were taxes and insurance. I realized that the dramatic rise in both will need some added income. So, I started buying shares paying dividends. I can now see that this will be the path I need to take to make sure those two expenses will not overtake my future income.
As a beginner, educate yourself, Learn the basics of investing and the stock market. There are many resources available online, including books, articles, and online courses. It’s a good idea to diversify your portfolio across different stocks and sectors to minimize risk. I’ve heard of people accruing over $550k during recessions and inflation, its important to do your own research.
Yes, I've been in constant touch with a Financial Analyst for approximately 8 months. You know, these days it's really easy to buy into trending stocks, but the task is determining when to sell or keep. That's where my manager comes in, to help me with entry and exit points in the industries I'm engaged in. Can’t say I regret it, I’m 40% up in profits just in 5months with my initial capital of $160k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I might need some management on my much larger portfolio. Don't want to take any chances.
“Jessica Lee Horst” is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
My needs are kind of unique and complex. I'll contact her nonetheless, and I hope I'm able to make something out of it.
Good to find your channel debunking the Marxist inclined professor. Thanks for pushing back on his non-stop mental flatulence.
I don't know Antony. Reich has a slogan...and it even rhymes! "Scrap the cap!"
The numbers:
SS is taxed at 6.20% of our income (7.65% if you include Medicare).
USA made $1.1 Trillion from SS taxes in 2022. USA spent $1.4 Trillion in 2023.
There is a discrepancy that needs to be addressed.
Is that a large number nowadays? I'm being facetious, but there are a lot of programs that the government spends on that could be nixed.
No, SS tax is 12.4%. The worker pays 6.2%. The employer pays an additional 6.2%.
The difference came from cashing its federal bonds. We're in trouble when it becomes depleted.
There is no injustice with those who have vastly more than enough paying in an extra share to help those who have very little.
define "vastly more" please
@@HeritageWealthPlanning If you read my following post you should have your answer. Everyone pays at an ever DEcreasing rate according to income that amounts to nothing they'll ever miss.
The dilemma is that those who depend on SS can't have a quality of life that anyone considers 'quality". Think "hungry". The system is rigged to make the wealthy wealthier by making the poor poorer. I'm retired and do much better than "hungry" but if there' were no SS I'd be cutting it close.
We should help those who are less fortunate, but we should never incentivize slackers.
@@timmarshall7292 Wholly agree.
If they just had a "forced Roth IRA" where you just put the same $ into the S&P500 or similar... we all would make more
Love the way the late, great Tush Limbaugh used to say his name…Robert Reisssssshhhhhuuuuhhhh…
Even giving every citizen a government account to hold 12% of their annual income, which was solely invested in treasury bills, bonds, and notes, TIPS, or I bonds would be a better solution. These investments don’t offer the same potential rate of return as the private equity market, but they carry the “full faith and credit” guarantee that the current SSI system does. It seems like this would maintain the revenue stream that the federal government needs while offering a better retirement to every US citizen. It might sorely disrupt the bond market as maybe the federal government wouldn’t need to sell as many bonds to foreign governments and private equity firms. But i’d be willing to bet this problem could be solved.
Alternatively, push the program down to the state governments to manage. Make the accounts transportable if you move from state to state. Let competition for performance drive returns on state bonds and responsible governments reap the benefits of more people and money migrating to the states that offer a better rate of return.
How about instead of asking the rich to pay more, we(as in the rest of the country) just stop federal taxes instead? I think everybody can get behind that.
There seems to be a slight issue with the initial "rich" calculation unless I'm missing something. The max any person will pay into social security tax is approximately $10,000/year as the max income limit for the tax is around $160k. So, the most a person would pay in (without inflation adjustments down the road) is about $420k over 42 years in this case.
You have to double your number you figured it as a 6.2% tax when it actually eats 12.4%. Yes, SS automatically lowers wages because your employee pays half of your payroll tax instead of paying you. Secondly, you have to figure for the cap slowly growing over that 42 year period. Thirdly, you have to account for opportunity lose as instead of making a small amount of interest you actually lose to inflation.
So then double my numbers. That's fine. You still don't reach anywhere near the numbers presented in the video.
@@planepirate you would need to multiply your numbers by a lot more than 2 to make up for all the factors I just listed.
@@raywillett8050 All the factors? Unless I'm missing a comment somewhere you only listed one, which is the company's required SS payment. That also stops (as of today) around $10k. Therefore you can just double the numbers I mentioned previously. The only way the math gets close to the $3.1 million mentioned in the video is if you assume the SS tax limit keeps getting raised at around 9% per year on average for the next 42 years as it has for the last 8. But, using that assumption the taxpayer would pay a total of $4.4 million over the 42 years and would pay almost $400k into social security in their last year of work alone. My guess is they used some kind of inflation adjustment for the social security tax but I don't see the numbers for the calculation listed in the video.
@@planepirate or if you consider the opportunity loss. Even at half the average index return you would hit 3million in 42 years.
The only issue I see with this is that I serisouly doubt of a lot of people's ability to take that 12% and invest it instead of spending it away on stuff or getting caught in BS "investment opportunities"
Wait, if the population shrinks, it might help. We could also always tell illegal immigrants they will not be eligible for benefits yet still have to pay the taxes. It won’t solve both problems, but it might help both a little.
Illegal immigrants are actually a net positive for SS. Half of them pay into Social Security and Medicare, though they won't ever be able to claim benefits.
Why wasnt social security put into the SnP500 to start?
The chest would be overflowing with money
It's probably the lesser of the evils that it wasn't put into the S&P. Had it been, politicians would have quickly come under pressure from lobbyists to invest more in the lobbyists' favored stocks. That would have ruined stock markets.
Plus, not everyone who pays into SS gets anything back at all. Some people die after paying in for decades but before they start to collect, or die immediately after they start to collect
the same could happen to people with 401k and/or IRA accounts. Both my parents had it set up that if one died , the other would get keep getting retirement SS on top of their own check. Your family members could be listed as beneficiares.
For people who think the stock market is risky. Not investing is way more risk.
Very true, most people never view missed opportunities as losses.
Thanks!
I also need to find out where Richard Wolff and AOC got their economics degree? They must have gone to the World Wrestling Federation or Jerry Springer of universities.
Just imagine if instead of SS having a separate fund and the massive bureaucracy that has been built up around it, what if people were simply required by law to have put all that money they’ve contributed to SS in a mutual fund which they legally cannot access until their 60th birthday. They would have earned about 10% on their money and many of the people who barely eke out a retirement with SS funds might instead be millionaires. Is that too naive?
It’s delusional, not just naive. No private fund would guarantee you 10% return. Chile actually is done something similar. After overturning communist government people were allowed to contribute to private retirement funds instead of government run SS. I would suggest you check how this experiment turned out.
@@vg7985 The fact that the stock market has earned 10% per year on average is not delusional. No it’s not a guarantee, but it’s pretty rock solid.
The problem with private retirements is that people don't have the discipline to keep their hands off their long term savings such as 401ks. When people reach their first $100k they decide that it's time to withdraw money and drain their 401ks. Need to pass laws on forbidding people from withdrawing money from their private accounts. If not this private retirement funds will not work either.
Much of the top earners are already paying on all their income. Only the very rich aren't.
Let's assume the untamed income is $1T, at 15%, that is $150B, with 75 million on SSI, that is $2000 per year.
How does that little save SSI? This is just another "blame the rich" diatribe.
Government: we will provide for your retirement by taking your money in taxes and then giving it back when you are older, calling that income and taxing your taxes again.
The idea that the average to below average 40 year old would start immediately saving 12% of their income as soon as they stop paying SS tax is a fairytale. Do you make some sort of law that people are forced to put money into private retirement accounts? If so then it's not that different from SS it's just you get to keep it? If not then there is going to be a massive burden on future generations having to take care of their parents/grandparents who now don't even have the tiny bit of social security to fall back on.
No, people can do what they want. They have to deal with the negative consequences of bad choices.
@@raywillett8050or bad investments. Private funds would never guarantee you return, any return. Many funds will burn through people money and will pay nothing when they get old. It will be much worse than SS.
Yes!!
There is a huge conflict of interest. The government mandates the social security fund to purchase government bonds, i.e. lending them cheap money.
any ghoul who wants the ss insurance to be scrapped was born without a mother
Why should someone pay for a program they won't use, like the rich?
Because selfishness and greed.
Are your numbers adjusted for inflation? No mention. Hmmm
A CEO can bay 1% tax and it will be more than you make in a year.
11:00 you mention that Social Security is good for the Very Poor.
You didn't mention the fact that the poor are almost exclusively the young, by the time you get to the end of your life almost no one who began poor will be there by retirement age.
That is his point. The program doesn’t benefit many people.
Professor Davies we must restructure the whole of federal state and local government spending we need government government spending to slow while we also need governments to save more and help citizens as well save more 25% of GDP
We should implement the Singapore system where the government compels people to save/invest in a private account setup for each person.
They never will, because they want to manage our money instead of helping empowering people. The rich should pay more into social security, it's ridiculous.
It is also the same in Malaysia.
You pay into the system into your own accounts, the company will also pay into the system almost matching or more than your contribution.
The money is your own. You get them back after age 55.
you want the government to do more "compelling"? No thanks
Right, because those making 200k+ shouldn't pay into Social Security according to what they make on their entire income.., yet it's fair for anyone making 35-100k to pay off their ENTIRE salary just because. Talk about unjust. @@HeritageWealthPlanning
My belief is that the government should never compel, rather offer sweeteners. The sweeteners being the 401, IRA, Roth, HSA.
I love the 'Social Security has lost money due to income caps' argument. What?!? To the contrary, the continuous increases in the income cap have meant an increased loss of money to each new generation of taxpayers! The last increase is nearly double the cap of ten years ago! Is it better yet? Nope!
Did enjoy.
So instead of our money being taxed and going directly to people for retirement, we can buy stocks, putting money into ownership of companies. These companies hopefully will use that capitol for loans in a productive manner and produce products and services for the people. Does adding money to the stock market help or make much of a difference in an economy? I am still split after watching. I agree that Robert Reich is spewing completely ignorant falsehoods, but that doesn’t mean scrapping the social security program is a good idea. I suppose is not scrapping all of it, but keeping it for the low income?
I like the examples- what each group gets back. But to get $2.70 back on every dollar, let’s say, what was that money invested in?
T-bills. Risk free so no market gains. The returns come from redistribution from higher income people - higher taxes paid in, lower payments paid out.
@@DroopyLemming T-bills are traded. Social Security is not invested in them.
Robert Reich has clearly been educated beyond his capacity to understand.
The only way to save people from themselves is to slowly increase taxes on the rich until it's 100% and then slowly moving down to middle class and the poor.
If everyone who works and their employers pay more in taxes, say it's 5% more combined, isn't that 5% out of the economy that would otherwise be spend in other ways?
No, because the average worker always pays into the economy more than than wealthy.
This was rhetorical. About 14% comes out of a workers check, so if 5% more comes out of everyones check to keep Social Security going for a little bit longer, that's 5% out of the economy that everyone would have otherwise used elsewhere. That'd be 5% less out of the economy for this big program that's always going to need more tinkering. It would be the same if it's just for the wealthy.@@RextheRebel
@@RextheRebelpatently false. Go peddle your BS elsewhere
what happens to people who never get a house or never got a 401k
I'm kind of suspicious of a commentary about someone who is not actually present to debate you
I think you are smart enough to know most people will not invest the money currently being captured by social security. I don't usually champion Robert Reich's points or ideas but on this I will take his opinions vs yours.
Not only that, but if private retirement investments were so much better, wouldn’t it make sense for the social security administration to simply do the same thing, to invest the social security fund the same way as a private investor would? There must be some reason why they don’t do that, why they continue with more conservative investments.
@@jpny4750 Probably because social security is a child of the greate depression. Being in the market at that time was not favorable. Times have changed and I would not be bothered if they invested part of the funds in the market.
@@jpny4750Your talking about Big Government Bureaucratic Boondoggles of fraud, waste and abuse.
So those of us who take Personal Responsibility must pay for those who don't; Yes, a forced Socialist Program that achieves equality, equally poor.
Or the government has to get its hands out of the cookie jar
I watched your video until the end. I personally think your premise is partial. First, social security pays also to disabled and needy. The reason for the lower rate of return is the disbursement to those who end up becoming disabled. You're completely ignoring this segment, which i hope, given your expertise, is not intentional . I do however believe that high earners should be taken off while do pay into the system just as initially FDR in 1940s proposed to congress. Also, we could reform input of funds into private indexes to get better result. Second, politicians are not the only con artist for ponzy scheme. It hasn't been much long since head nazdaq. Third, I still didn't understand how you came up with numbers for income earners above social security $142k cap. I love to have a debate with you.
"...social security pays also to disabled and needy."
Yes, but that's a small portion of Social Security. We could keep that and have a program a fraction of the size it is now.
"The reason for the lower rate of return is the disbursement to those who end up becoming disabled."
No, the reason for the lower return is that, by law, SS invests its surplus in Treasury bonds - they pay the lowest interest of pretty much any investment on the planet.
Had social security not existed many would have spent and squandered the money
Cancel SS. I don't want it
Robert Reach at it again…
in an era when a simple majority of adults NEVER work, NEVER pay taxes, and live their entire lives at the expense of those who do work and pay taxes, no politician is ever going to be in favor of scrapping a ponzi scheme in which they buy votes of the unproductive at someone else's expense and moving to a system like Singapore's where the citizens are required to save for retirement, but the system is that the citizen does not pay into a "social security" plan, but into IRAs, 401Ks, etc. Private retirement accounts are mandatory, but government ponzi schemes are not part of it. So how do politicians get elected in Singapore? By delivering a safe, secure, and economically free nation. What a concept.
Taxing social security doesn't tell me it's not successful. You don't tax a program that isn't making any money. Taxing social security was a trick to raid the social security fund, because it is so successful. We are then told that without social security socked away, retirees would have that income available for a private retirement fund. Of course, in real life it would all get spent up on everyday bills for most people during the course of their lives, and we would have massive rates of poverty. That's why ss was invented in the first place, and these impoverished elderly would be a burden on the state.
I hope this is a regular series that debunks Robert Reich. He puts so many terrible things out there on social media and people eat it up.
Indeed. Debunking him could be its own channel. BTW, no matter how civil you are on his channel, if you disagree I bet you get muted.
Well The Political Checkmate has made a series of videos responding to Robert Reich
@@nunyabidness3075 Well The Political Checkmate is that kind of channel that is dedicated to debunking Robert Reich misinformation
Not only does Professor Davies make Reich look like an ignoramus, he’s such an attractive man 😍
❤️❤️❤️
Well, if McDonald's workers were given the choice between their current situation and earning a wage above the current cap, they would probably choose the latter and start contributing to a private retirement account. Give me a break.