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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
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>  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