Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84 exptools; site whuxl.UUCP Path: utzoo!lsuc!watmath!clyde!burl!ulysses!mhuxr!mhuxt!houxm!whuxl!orb From: orb@whuxl.UUCP (SEVENER) Newsgroups: net.politics Subject: Re: Re: Social Security vs Social Welfare Message-ID: <784@whuxl.UUCP> Date: Thu, 7-Nov-85 14:18:01 EST Article-I.D.: whuxl.784 Posted: Thu Nov 7 14:18:01 1985 Date-Received: Fri, 8-Nov-85 08:46:32 EST References: <756@whuxl.UUCP> <29200244@uiucdcs> <361@whuts.UUCP> <1270@mhuxt.UUCP> Organization: AT&T Bell Laboratories, Whippany Lines: 50 > From Jeff Sonntag: > If social security *were* government forced savings for retirement, > then I wouldn't consider it social spending. But that's not what social > security is. In reality, as I'm sure Sevener is well aware of, the > government collects funds from working people and transfers them to > retired or disabled people immediately. This sounds *awfully* similar > to other forms of social spending. It is *not* similar to other forms of social spending. In order to be eligible for social security you must have paid into Social Security for a certain number of quarters of your working life. Those people who have worked all their lives and dutifully paid into the Social Security have every right to the pension they have paid for. Moreover this is often the *only* protection some people have, particularly those with lower incomes and less ability to save voluntarily, for some sort of pension at retirement. There are some major problems with the way that many corporate pension programs work. If you get laid off and are forced to work somewhere else your private pension is usually untransferable. Social Security remains in effect wherever you work, so long as payments are made into the Social Security Trust Fund. Many corporations unfortunately engage in the practice of deliberately laying off older employees as they approach their retirement so they are not forced to pay the full benefits they would otherwise have to pay if those workers remained in the company until their retirement. This is frequently done to engineers and others with technical skills which become considered *obsolescent*. Younger workers fresh out of college are assumed to be more up-to-date and also to be a lot cheaper given that they have not accumulated the vacation days, and salaries of older workers at the same time they do not present the same potential costs in terms of imminent full-fledged retirement benefits. Nor are corporations (*or* unions!) immune to using pension funds for other uses besides simply paying workers' retirement. The New York Times Business Section just had an article on corporations use of pension funds for their own investments and purposes. I believe there is something approaching $400 billion controlled by pension funds in today's economy. That is a lot of money to have to use for capital leverage. The fact that current payments to Social Security are used to pay retirement benefits to current retirees is a potential problem for the Social Security system as the very large baby boom population comes to retirement to be supported by a much smaller generation of younger workers. But this problem and this practice is no different than that used by banks, insurance companies or other pension and disability funds. -tim sevener whuxn!orb