Discussion:Wow! This just surprised me for some reason...

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Discussion Forum Index --> General Chat --> Wow! This just surprised me for some reason...


JR1 (talk|edits) said:

October 18, 2007
The maximum amount of earnings subject to Social Security tax will rise to $102,000 in 2008, the Social Security Administration announces.

Srf764 (talk|edits) said:

18 October 2007
Well let it not surprise you. If Hillary gets in it is going to get a lot higher.

Kevinh5 (talk|edits) said:

18 October 2007
No matter who gets in it must go higher. Google 'Boston College Social Security' to read their suggestions on how to fix what IS broke.

Pegoo (talk|edits) said:

18 October 2007
I don't think that little raise is not enough to solve the problem.

Death&Taxes (talk|edits) said:

18 October 2007
Greenspan has been quoted recently as saying it takes little to rescue Social Security, but Medicare, that is another thing. This was Meet The Press Sept 23rd:

GREENSPAN: "Social Security is not a big crisis. We are approximately 2 percent points of payroll short over the very long run. It's a significant closing of the gap, but it's doable, and doable in any number of ways.

Medicare is a wholly different issue... We're going to double the size of the retired population, and by all of the analysis I go through in the book, it's very evident to me that we are not able to actually deliver on the Medicare we are promising..."

Sea-tax (talk|edits) said:

18 October 2007
Privatize Social Security, who better to manage your retirement than you?

Kevinh5 (talk|edits) said:

18 October 2007
If we sent the Medicare recipients over to India for their operations and other non-routine procedures, we would come out ahead even after paying travel expenses for the patient and a family member.

Death&Taxes (talk|edits) said:

18 October 2007
Be nice to use our privatized retirements to prevent mortgage foreclosures.

Srf764 (talk|edits) said:

18 October 2007
Well I don't know how old you guys are but I do not expect to see much money when I reach of age and to me it is just another income tax. The money goes into the general fund anyways and the goverment uses it as they please. I agree that it should be privatize.

JR1 (talk|edits) said:

October 18, 2007
I think that the only reasonable solution is to turn in all our money to the gov't and let them take care of us. They're going to get it all anyway....

Srf764 (talk|edits) said:

18 October 2007
Or maybe one day we will file a class action suit American citizens VS. The United State Goverment

CrowJD (talk|edits) said:

18 October 2007
Social security is one government program that has worked very well. It saves people from themselves. Take a look at what's going on in the credit markets right now, and tell me if you want a bunch of greedy brokers handling grandma's grocery money? I don't believe any "market structure" should be worshiped. Take all the talking heads on CNBC, they always cry for "market forces" to control UNTIL their A** gets in a sling, then they trip over themselves calling for Uncle Ben Bernacke and Uncle Paulson (aka Uncle Sam's money boys) to bail them out. Sickening. Sorry in advance for the rant.

Death&Taxes (talk|edits) said:

18 October 2007
Crow, you are right on! All I have to look at is the number of clients who've raided 401Ks, or like the one client who sold her stocks to buy variable annuities, or the retired pilot who thought UAL and its pension would be there for him....and before I hear about greedy airline workers and how much they made, do remember he flew you safely all over the world, taking your life in his hands.

CrowJD (talk|edits) said:

18 October 2007
Yep. Isn't it a baby boomer right of passage to raid them, one and all, at least once? Now, what's the total after tax return on THAT investment? P.S. Well, come to think of it, maybe they should raise the penalty to 20%, some people are better investors than others, lol.

Srf764 (talk|edits) said:

18 October 2007
Just because there are stupid people out there that do not know how to handle their money should not be a reason to impose on society as a whole to steal their money to "save" for retirement. The bottom line is I would rather pay extra taxes to pay for services like medicare, medicaid, HUD etc. for people who needs goverment assistance than to be told to give up my money so that "they" can manage my retirement. Besides for which they have the nerve to tax you again on social security benefit. I am not disagreeing that there aren't greedy brokers who are unethical but I don't believe gining to the goverment is the right answer. If the gov't invest the money as they were suppose to and we wouldn't be in a crisis I would agree but that isn't the case and will never be the case. What will you do in 40 years from now the gov't says no more SS payments I don't think it is so far fetch that this might happen.

CrowJD (talk|edits) said:

18 October 2007
Fine, Srf, you get a law passed that a present or future Fed. Chairman will bail out grandma like he has bailed out the markets with YOUR money (essentially a printing press), and I'll switch sides. Right now, the stock market is being propped up just long enough for the knowledgable to get out...I won't continue this, in that it is political in it's essense, but how short-sighted we can be!

JR1 (talk|edits) said:

October 18, 2007
Crow, I'm a little concerned when we build government policy based on the lowest common denominator of human behavior. Sorry, but that totally removes personal responsibility from the equation. Just because there are idiots out there doesn't mean that I have to be the one responsible for the irresponsible. That's where our nation is headed, at least the blue voters generally. The reds just want to be left alone, and yet will happily give for those who CANNOT be responsible. Big diff between CANnot and WILL not...

Srf764 (talk|edits) said:

18 October 2007
I apologies as you are correct this is more political. Honeslty, I feel there is no right solution and we will just have to wait and see what happens.

CrowJD (talk|edits) said:

18 October 2007
Heh, well this is an above-average group, so we can rightfully cross swords with no harm! But, one way or another, we will have to take care of the LCD.... visions of Soilent Green(sic) aside. What burns me though are the Larry Kudlow & Jim Kramer types who, as I say, cry for market forces to operate until they need Uncle's arm to cry on. Corruption is down to a very, very fine science now, and a gated community can only do so much when people eat out as much as they do... e.g. does it matter if you have health insurance if the guy making your sandwich doesn't? Can I edit in a "Cough, Cough"?

TexCPA (talk|edits) said:

18 October 2007
Social Security was a foot in the door for Socialism, Privitization looks good on paper, unfortunately most people are not investor savy enough to manage there own 401k's, and the pension acountability was/is a joke.

There should be no tax on SS benefits. When taxes are assessed / collected, there should be a law mandating that the tax be used for it's intended purpose, not a pot of gold (or tin) that allows those funds to be borrowed against.

CrowJD (talk|edits) said:

18 October 2007
Oh, socialism is alive and well, it's just turned upon it's head. Call it corporate welfare, whatever you want; but the big boys don't play by the rules they preach. Let's see, we've had the S&L bailout (Bush I), at the same time we bailed out our banks over their loans to Mexico & Latin America (Bush I), we "solved" the Asian financial crisis under Clinton, and now, holy cow, we bail the deep pockets out again because of the "actions of a few bad apples" in the credit markets. Any of these people normally considered the LCD, the poor? Who's really begging; and how can you ever lose if you are a player in THIS game? I'm becoming annoying, I know it, and I apologize again, but both sides of the story benefit from the telling.

KatieJ (talk|edits) said:

18 October 2007
Thanks, Crow.

Gosix (talk|edits) said:

18 October 2007
You're right on it CrowJD. Greenspan created (well maybe enabled is a better word) this housing mortgage disaster. Remember when the clown Greenspan said 'adjustable mortgages were a great thing for consumers' and this advice was trumpeted all over by CNBS. Then Greenfool went out the very next month and began raising rates non-stop. To the point where all these adjustable mortgages he enabled and recommended are now in deep do-do.

Then you have that clown Krudrow spouting nonsense. And his buddy Crapper de Clown boooooooyaing nightly to insane people. Now back to some breathless nonsense commentary by Maria Barfmoreonya.

Where is the next bubble?

Death&Taxes (talk|edits) said:

18 October 2007
You guys forgot or are too young to remember the mantra of 'Too big to fail' that Lee Iafleecya rode to milk a few more bucks out of a gullible public before the Valkyries bought him out.

It does seem sometimes that the deck is stacked, but there is nothing wrong with the idea of each person being responsible. Then, again, we come across situations that were no one's fault, such as Enron workers beloieving their boss and saving through their 401K and now owning bupkis .....who is to judge who will be bailed out and who will be sent to the workhouses?

I recall getting a man off a big penalty for investing and deducting lossess in a leveraged type tax-shelter in the early 80's. $1 of investment produced $8 of tax write off. IRS rarely waived the penalties on these deals because they felt the buyers went into them simply to save taxes. My man won because it was sold to him by his brother-in-law. He had little reason to buy for tax savings. He was told it was a good deal, and if you can't believe family, who can you believe? Of course, he was 55 and still out 250K, a substantial part of his savings. So would we grant him some kind of relief and give him something from the public tit if there were no SS?

Kevinh5 (talk|edits) said:

18 October 2007
who was it that said "If I borrow $100,000 from the bank and can't pay them back, that is my problem. If I borrow $1,000,000 from the bank and can't pay them back, well, then that's THEIR problem." ??

Donniecastleman (talk|edits) said:

18 October 2007
Is it just my imagination or did Social Security tax start out at like 2.9%? How long until they raise it to 20-25% and financially kills every self-employed person in the US, not to mention business owners?

CrowJD (talk|edits) said:

18 October 2007
No one would have believed 130 years ago that the economic torch would pass from England to the USA, but it did. What if the smart money (a lot of smart money), decides that the torch is about to pass again? They need to unload. They need a buyer, better yet, they need a sucker if one can be found. A privatized social security system is a lot of sucker money. It's the ultimate switchover from a defined benefit to a defined contribution plan, if you will. Now, I am not saying that the govt. has been a good steward of this money, in fact, it goes straight into the general fund, in exchange for an IOU: it is a pure and simple income tax, in addition to the taxes we already pay. But, at least theoretically, we can throw the bums out when the games up; and in the meantime, folks are getting checks who do really need them.

Death&Taxes (talk|edits) said:

18 October 2007
What we have experienced (until the recent meltdown) has been the socialization of credit downward and the transfer to the retirement burden to the worker. Retirement today is employee funded, leaving investment decisions to those who know least about what they are trying to do. Educate them, by all means, but the situation snuck up on us so that we might have almost a 'lost generation' of post-1981 savers.

Death&Taxes (talk|edits) said:

18 October 2007
Around 1984 a journalist client asked what I thought would happen in 2030 years, when all the millionaires created by the expansion of IRAs would retire. He specifically wanted to know what those without IRAs would do. I thought a second and then remembered Paul Muni in the final scene of I Am A Fugitive From a Chain Gang, fading to black as he hissed to his girlfriend when she asked a similar question, "I'll steal."

Of course three years later, Congress took away the deductible IRA for most people when they tried to flatten the tax rates.

Natalie (talk|edits) said:

October 19, 2007
Part of the problem, I think, is that SS is given to people who are not retirees, including people who have hardly paid into the system at all. And they receive these benefits for years and years. It might be interesting to find out how much goes out the door each year to those people, but I don't think I really want to know.

While we will definitely continue to have problems with social security, I don't think it will go away. Can you imagine the outcry from people if there were an announcement that benefits were going to be cut? The maximum wage base will continue to increase until there is no limit. (JR, I think the reason the limit hit you is because it just passed the $100,000 threshold. All of a sudden it looks like such a large number.)

Smokeytax (talk|edits) said:

19 October 2007
Being 58, I always say I hope I live long enough to see how it all turns out.

One thing, I think it's very likely that the courts will get involved.

Good luck to all of us.

Bottom Line (talk|edits) said:

27 October 2007
I'm surprised that no one's mentioned that SS is a regressive tax. The high wage earners pay less tax than lower wage earners.

Dennis (talk|edits) said:

27 October 2007
Not really so much. Higher earners pay more dollars, just a lower percentage of total tax. Lower earners pay less dollars and a higher percentage, but get far more bang for the benefit buck when you discount the effective disability insurance premium. The problems are structural and will not be fixed. Every little item has its own constituency and special interest.

JR1 (talk|edits) said:

October 27, 2007
Agreed. The benefit package is regressive, too!

Bottom Line (talk|edits) said:

27 October 2007
What I'm talking about is that someone with wages of $1,000,000 pays the same SS tax as someone with wages of $100,000.

JR1 (talk|edits) said:

October 27, 2007
And what we're talking about is that someone who's paid in SS at the lowest levels gets darned near as much as those who've paid in at the highest. The return on investment for the lower wage earner is huge, while for the higher earner is about 20% of what they could earn on their own. Hence, the lack of interest in paying more in.

Bottom Line (talk|edits) said:

27 October 2007
Agreed

Donniecastleman (talk|edits) said:

27 October 2007
Problems will never be solved by raising taxes and throwing money at government social programs, period.

TAXi driver (talk|edits) said:

29 October 2007
Best line ever from John Edwards

http://www.concordmonitor.com/apps/pbcs.dll/article?AID=/20071026/FRONTPAGE/710260384

"I think if we want to fund the things that I think are important to share in prosperity, then people who have done well in this country, including me, have more of a responsibility to give back," he said. Later, he added: "There are no free meals."

JAD (talk|edits) said:

6 March 2009
I revived this thread to vent re something that happened today. Speaking of free meals.

Today I learned that a friend is purposely and unnecessarily not paying her mortgage because the bank won't pay attention to her if she is current on her loan. She heard about 2% interest rates and feels that she has a right to that. Esp since she feels like it's not her fault that the value of her home has declined. She is going to game the system. I knew this was happening, but I didn't personally know someone who was doing it.

As the responsible taxpayer who pays for this fiasco, I am livid. Beyond belief.

Yt1300inHtown (talk|edits) said:

6 March 2009
I think it's your patriotic duty to burn her house down.

I am working on a re-fi with my lender and they basically told me their hands are tied with the govt't assistance when it comes to helping out their good customers.

This help is only for the poor decision makers. Now go mail us another timely payment YT!

Sandysea (talk|edits) said:

6 March 2009
Agreed JAD...this angers me beyond belief as well.

In FL,Isee it all the time....much of this was our doings and it infuriates me.

I know of at LEAST 1 dozen people who are only paying their escrow amounts...wanting some of the stimulus. I HOPE THEY ROT!!

I also see people who are getting unemployment who are essentially RETIRED but they qualified before all the extensions. They are not looking for work and will never work again but they collect unemployment?

Then those gaming the food stamps, welfare, medicare, medicaid, and disability?

I know of peopleright now who make more $$ than I do sitting on their asses, living in homes that they do not pay the mortgage on, getting food stamps, etc.and I bust my ass every day.....

AARRGGHH!!!!

I feel better now, thank you :)

JAD (talk|edits) said:

6 March 2009
I read the WSJ and the SF Chronicle, which could cause a personality disorder in anyone. Anyway, in the WSJ, day after day, there are so many people who are so angry at the lack of accountability etc. If there are so many of us who are so angry (and yes, it is my patriotic duty to burn her house down, isn't it?), then why are our elected officials creating these kinds of entitlements that are so easy to abuse? Are we three (and the people writing in to the WSJ) the only ones to visualize the long-term impact of this type of disincentive to be responsible?

Here it is tax season...all this work....not even 2:00....and I am so angry and desperately in need of a drink.

Sandysea (talk|edits) said:

6 March 2009
It is 5:00 somewhere!!!! :)

Lalva (talk|edits) said:

6 March 2009
JAD, if you burn that friend's house she will collect the insurance!!

Yt1300inHtown (talk|edits) said:

6 March 2009
I'll be ounding margaritas by 6PM JAD. I'll raise one in your honor.

JAD (talk|edits) said:

6 March 2009
Lalva, that's true. I would have to somehow engineer a flood that doesn't hurt any of the surrounding property....

Yt1300, Thanks, I'm more of a straight tequila person myself, and I will drink one to you, Lalva and Sandy too. Thanks for the laugh.

Rgtaxservice (talk|edits) said:

7 March 2009
the long-term impact of this type of disincentive to be responsible?

And it's only going to get worse. There's an aura of govt 'welfare' going around and everyone is so busy sticking their hand out (waiting for free govt money) that no one is stopping to ask who will pay for it.

It just doesn't seem right to reward people for being stupid or irresponsible. If you bought an overprized 200K house for 300K when you have only afforded a 150K house then you deserve to live in a cardboard box. Personally I think it's time to cull the herd.

I'm a bourbon man myself...and it'll will be a few more weeks before I raise my glass.

Natalie (talk|edits) said:

March 7, 2009
It just doesn't seem right to reward people for being stupid or irresponsible

Rg, it isn't right, pure and simple. I feel the same way you do Sandy. I'm wondering when they're going to help the people who have to pay rent.

Sandysea (talk|edits) said:

7 March 2009
Hey NAT!!

They won't help the renters or the persons who actually DO NOT have their hands out. Squeaky wheels or at least irresponsible wheels get the maintenance.

The rewards go to those who want something for nothing. Now we are teaching our children and our society that the government will bail you out even if you make stupid choices.

A revolt is coming....honest persons with honest taxes paid are going to get tired of paying for loafing, irresponsible persons.

      • HAND WAVING HERE***

CrowJD (talk|edits) said:

8 March 2009
This whole mortgage disaster was a scheme from the start. The banks (through lobbying and favorable legislation) were able to separate themselves from liability for the fraud of the mortgage orginators (loan brokers). Once the big banks could not be held responsible for intentional fraud committed by loan brokers, the game was on. The brokers were free to scam people across the fruited plain, while the banks pretended to look the other way.

In essense, it was the same story we run into all the time, in that the banks really controlled these brokers, but they were able to claim they were independent contractors.

I do not think that it is fair to blame this solely on the homeowner, far from it.

They are now finding that a lot of the people who would have qualified for a conforming mortgage were put into subprime mortgages, because the commission on the subprime loan was higher. This was a disaster for many people because the subprime loan was ironically almost designed to fail because of it's interest rate resets, higher initial rates, etc.

Death&Taxes (talk|edits) said:

8 March 2009
The wheeler-dealers and schemers always pile into well-meaning programs. Maybe that is why the only charities I give to are animal shelters.

Spoke to a client in the Dallas area yesterday and he mentioned that in 2000-01 he worked for a mortgage brokering outfit where he was stunned at the lackadaisacal attitude....just get the loan approved. Of course, I reminded him how he used Chapter 7 to get out of a New England house when the Massachusetts miracle collapsed twenty years ago.

But all of us have short memories. 5-10 years ago, clients would sit down and tell me how they wanted to buy a house. I am not talking just off welfare people, but those who if you gave them $100, could spend $110....living on income that was five years out. I'd tell them it was a fool's paradise but they would not listen, so I would tell them to speak to a realtor; most would assure the person there was a house for them. The agents had certain mortgage brokers on speed dial. The brokers knew just what information to present to the 'committee.' And so within months my spendthrifts would be going to settlement, and the realtors, mortgage brokers, their parent companies and the lenders were rushing like lemmings toward the cliff that only a few saw coming. Truly it was the blind leading the blind.

TexCPA (talk|edits) said:

8 March 2009
"I'm wondering when they're going to help the people who have to pay rent. " - [Rent control]

Crow - did you read the NY times article about PennyMac?

Maybe my eyes were blury, but I swear I read a post from Crow back in 2007 predicting this whole mess...

TexCPA 18:58, 7 March 2009 (CST)

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