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Social Security system is inefficient

September 12th, 2007 Toasted

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Ah.. Social Security… It’s wonderful program that takes 12.4% of your income each year in order to secure you your future. Let’s analyze Social Security a bit, shall we?The purpose of Social Security is to help the average American save money for retirement. Although the funds average annual yield is 5.3%, it’s backed by the United States treasury, meaning it’s a guaranteed investment. 5.3% may seem acceptable when compared to the national average savings account yield of approximately 0.54%, but the truth is that many competitive money market accounts yield upwards of 5.4% without locking up your investment until retirement, or jeopardizing your retirement savings, as nearly every reputable bank is a member of FDIC and have lengthy histories of customer satisfaction. When was the last time you went to your local bank and they didn’t allow you to withdraw your money?

Now let’s compare Social Security to a safe investment in the stock market. History has proven that the safest investment in the market is the S&P 500 index. This index tracks 500 of America’s most prestigious blue chip companies and is a sound investment, with minimal risk. The S&P 500 average annual return on investment is approximately 10.4% (This figure is based on a 78 Year average). The difference may not seem much, but it’s gargantuan on a long term basis. See my calculations below:

Scenario: Let’s say you begin working at the age of 25, and earn $40,000 a year. The government takes 12.4% of your income every year on social security alone. This is the actual percentage that they withhold from your income. (Your employer will adjust your salary in order to cover his side of social security without spending additional money. The employer pays ~6.2% for your social security and you pay ~6.2% this will be explained below.) Let’s also assume you retire at age 65. That’s 40 years of contributing to social security. Let’s see how much you’ll get back in social security when you retire, and how much you would have gotten back if you invested the same 12.4% each year in the S&P 500 index instead.

Social Security: *$696,699.17
S&P 500: $2,702,720.36

*The social security total is actually higher then it should be, because I used today’s social security yield, instead of the 50 year average, which is LOWER the today’s yield.

You may be confused about where the 12.4% was derived from. The way social security functions is that you, the employee pay 6.2% on each paycheck, and the employer pays 6.2% on the wages he pays you, the employee. You may think to yourself that, the 6.2% that the employer pays has no effect on your salary, but you are mistaken. Your salary is adjusted (decreased) to cover the employer’s end of social security. This doesn’t apply to all employees, but Milton Friedman, Nobel Peace winning economist, got several large employers to admit to using this practice. Let me provide you an example. Let’s say, as an employer, you want to spend a total of $100 on your employee for his services. But you know that an additional $6 will be added on top of the base $100 salary to cover the employer’s portion of social security. Instead of paying out a total of $106 (100$ to the employee and 6$ to the government, the employer will instead, pay the employee 95$ as a salary, and pay 5$ on top of it for the employer’s portion of social security. Now the employer spent his intended 100$ on the employee, instead of the $106 he would have paid if he set the employees base salary at $100. Now the employee must also pay a 6.2% tax on the $95 he earned through wages. If Social Security did not exist, the employee would have received the full $100 in wages, instead of $95 minus social security taxes.

Don’t assume that I don’t agree with the general philosophy of Social Security. The purpose of Social Security is to provide for the elderly once they retire so that they may sustain themselves. I am not against its purpose, but I am strongly against the way it’s forced down our throats. If the money is intended to be spent on your future, why can’t the government allow you to save it on your own? The only way for social security to function in an honest fashion is for it to be voluntary. If an individual wants to invest their money elsewhere, that individual should have the option to opt out of the Social Security system. The government simply cannot spend your money in a better fashion FOR you then you can for yourself. An individual should have the liberty to decide how he chooses to invest his own money, instead of the government forcefully taking it and investing it in their place.

The S&P 500 is not a guaranteed investment, but history has proven it to be the safest investment in the market, and has a proven track record of 75+ years at an average annual return of 10.4%. Ultimately, an individual should have the choice of opting out of government run social security. Countries like Chile, Mexico, Britain, and Australia have already transitioned from failing government run social security type programs to healthier systems based on individual retirement accounts.

Original Article on www.TheLibertarianForum.com Visit us, and learn more about Libertarian politics! Learn about Capitalism, and why small government works!

Original Article on
http://www.TheLibertarianForum.com

About the Author: Omer Altay is the owner of The Libertarian Forum. Make sure to visit us and read up on the latest Libertarian News
Make sure to post on our Libertarian Forums as wellThis article was printed from: http://www.easyarticles.com/article-75685.htm

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Americans Work, Why Doesn’t America?

September 11th, 2007 Toasted

(1 votes, average: 1 out of 5)

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When two opposing viewpoints about American workers were emailed me in the same day this week I had to wonder: if Americans are working so hard, why isn’t America working?

According to a recent article published on popular Web site Alternet, The Vanishing American Vacation (http://alternet.org/workplace/61122/) , compared to people in other developed countries, Americans don’t ask for more vacation time, don’t take all the vacation time their employers give them and continue to work while they are on vacation. It’s common knowledge to most American workers that they receive far less vacation time - in weeks not days - than their foreign counterparts. With the average American receiving two weeks vacation time, not taking it all seems incomprehensible. Unless of course, you’re doing what you love so much that it doesn’t seem like work and therefore you don’t need “vacation”, in which case you’re probably self-employed and the whole concept is mute. (If that’s you, welcome to my world. There’s much to be said for the self-directed integrated work/leisure existence! But that’s a topic for another day.)

Simultaneously, Fortune (and countless other American business publications) tell us American workers can’t compete globally unless they work harder. (See “Are Americans Too Lazy?” at http://money.cnn.com/2007/08/22/news/economy/lazy_american_workers.fortune/index.htm) According to the article, “The surprising report of our relative sloth arrives in new research from the United Nation’s International Labor Organization (UNILO) , which looks at working hours around the world. When it comes to what we might call hard work, meaning the proportion of workers who put in more than 48 hours a week, America is near the bottom of the heap. About 18% of our employed people work that much. That’s a higher proportion than in a few other developed countries like Norway, the Netherlands, and even Japan. But it’s actually lower than in Switzerland and Britain, and way lower than in developing countries like Mexico and Thailand. It’s drastically lower than in what may be the world’s two hardest-working countries, South Korea and Peru, where the proportions are about 50%. ”

So with the average Brit worker receiving 20 or more days off a year (in France it’s a government-mandated 30), are they really working more in total, or simply just logging more hours per week? Yes, an obvious disconnect here may be that vacation stats are mostly reported for salaried (white collar) workers while the other UNILO data is from among all workers, a huge proportion of which are hourly (blue collar). But I suspect there’s more to it.

As my Mexican in-laws would corroborate, Americans have forgotten how to work to live. Instead, we’ve been conditioned to live to work. This breeds an entire society valuing material acquisitions and accomplishments over quality of life, direct experience, and relationships. This inbalance has clearly and successfully fueled the capitalist juggernaut that is America. Yet we may not only have sold our souls for a bigger house and the latest fashion, we’ve also become inefficient. In short, the fruits of our labors don’t carry the impact they should.

The principle I remember best from a time management class early in my career is proving true in America “Work expands to fill the time available for its completion”. With more Americans working overtime than ever before it’s clear we’ve lost our efficiency. We work more because we can, but do we work better? It’s no longer a matter of working harder, it’s one of working smarter.

The Vanishing Vacation article sums up the facts well, “Our mythology claims the work ethic makes America great, but does it? We have the highest productivity in the world because we work more overtime - 40 percent of Americans work 50 hours a week and some workweeks typically run 60 to 70 hours. Workers in France, Ireland, Norway and Holland are more productive than American workers; Germany and Britain lag slightly behind, and all of them have more vacation time than we do.”

Personally, I’d like to see the whole lexicon of work, even the word itself, kicked to the curb. Because the truth is when a person, a culture, or even a country is passionate and inspired about what it does, it’s not “work” at all, it’s doing what you love and believe in. It’s doing what is necessary and required without wastefully efforting in ways that don’t add value to the overall objective. It’s balancing periods of intense activity with periods of relaxation and replenishment, which make intensity of purpose possible. Most of all it is being mindful and intentional of the big picture, which is to live first, then work. None of which seems to have taken root in the modern American psyche.

In America, particularly in the corporate environment, there is so much “make-work”; rules, regulations and bureaucracy that it’s a wonder a job with any potential for passion exists at all. Even white collar executives are held hostage by large corporations under the promise of a lucrative bonus package or early retirement plan, a reward for years of loyalty. Those not nearly as high on the totem pole are conditioned to produce or perish, fear of economic hardship or ruin keeps them playing by the rules. Until we the people, the workers, learn to reclaim a perspective of what really matters, the gap in this country’s work/productivity ratio will continue to grow.

The American federal government - at least the current regime - does not care about your quality of life. Corporations and companies trying to compete for global survival do not care about your quality of life. The investors and backers of those organizations also do not care about your quality of life. I could argue that they - all of them - should care, and that doing so would ultimately be to their benefit, and I could probably be proven right. But the here and now is this: No one cares about your quality of life more than you. So start caring. If not you, who? If not now, when?

Article Source: ABC Article Directory

An exploration of contradictions between American work habits and productivity and American’s slipping competitive position in the global workplace.

Karen Talavera is a keen observer, critical thinker and aspiring book author with a passion for writing, learning and teaching. She lives in South Florida and sounds off frequently on her blog of the same name, Sound Off. Read more of Karen’s writing at http://worldwidesoundoff.blogspot.com .

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Information The Government Makes Public About You

September 10th, 2007 Toasted

(1 votes, average: 5 out of 5)

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Most of you reading this probably have no clue what is “publicly available” about you to anyone that is interested in doing some simple research. The internet holds unlimited access to what governments consider public records. Governments you ask? Yes, this means not just the United States, but also many records for Mexican and Canadian. As more countries become technologically advanced, more information will be readily available for anyone to research at will.

Currently, within the United States, anyone with internet access and a little information about you can divulge the following information about you:

• Real Estate Ownership
• Traffic Tickets
• Conviction Records
• Criminal Arrest Records
• Arrest Warrants
• Case Indexes
• Civil Court Recordings
• Professional and Business Licenses
• Motor Vehicle Records
• Registered Voter Files
• Court Files
• Property Tax Assessor Files
• Tax Liens and Judgments
• Bankruptcy Files
• And Much More

There was a time where many of these records were trade secrets of private investigators but now they can be easily uncovered through simple online searches. Our government has and continues to convert these public records into digital format for easier accessibility directly and publicly through the internet. The internet is finally allowing public records to be more public so anyone, including you, can uncover information about any person or company.

Personal information isn’t always as private as one may think. Generally speaking, your date of birth, social security number, financial, insurance, and medical information is protected by law. Companies and corporations also have similar protection. Unfortunately, research into public records can commonly reveal these items through background checks, court records, divorce records, bankruptcy files and many other sources of readily available information.

Although many people may have privacy concerns, all of these records have been made public for important reasons. For example, detailed background checks are necessary for the security of the general public and business security. You wouldn’t want someone watching your child at a local day care that has a warrant out for their arrest or has past criminal records would you? Perhaps you are a proud owner of a limousine business. It could be devastating is it is later revealed that a driver you hired has multiple DUI charges on his or her record.

Just as people do with credit reports, I would recommend that you research yourself. You may be surprised with the information that is available to anyone interested in looking into it. In the past I have seen someone lose their job because they were unaware of a charge on their record and didn’t disclose it on his hiring application. Simple mistakes like this can be prevented or corrected before they become a problem.

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