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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Re: Clinton Retirement Plan Date: 10/10/2007 7:01 PM
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TMFPMarti:

<<<But if the government eventually "fixes" the Social Security mess by heavily means testing it -- as would seem to be one option for "fixing" it -- then they would be actively discouraging saving, especially if the phase-out was sharp and the phase-out income level started at a modest level.>>>

"Not necessarily. It would, however, require abandoning fiction and returning to looking at SS as what it was designed to be--welfare to keep old people without private resources from starving in the streets, but just barely.

Instead of admitting that the payroll tax is exactly that, a tax, the politicians sold a story that makes people think every one of us has a box in Baltimore with "our" money in it. As late as the 1970's SS benefits were meager, and the tax was low. And very few people complained that the gummint was robbing them of their future."


I have two words for you:

Inflation and COLA

Historical Rates
Calendar year OASDI HI Total 
1969-70 4.200 0.600 4.800
1971-72 4.600 0.600 5.200
1973--- 4.850 1.000 5.850
1974-77 4.950 0.900 5.850
1978--- 5.050 1.000 6.050
1979-80 5.080 1.050 6.130
1981--- 5.350 1.300 6.650
1982-83 5.400 1.300 6.700
1984--- 5.700 1.300 7.000

http://www.ssa.gov/OACT/ProgData/taxRates.html

Maximum Amount:
1972 9,000
1973 10,800
1974 13,200
1975 14,100
1976 15,300
1977 16,500
1978 17,700
1979 22,900
1980 25,900
1981 $29,700
1982 32,400
1983 35,700
1984 37,800

http://www.ssa.gov/OACT/COLA/cbb.html#Series

COLAs implemented in 1974-1975
Year COLA
1975 8.0%
1976 6.4%
1977 5.9%
1978 6.5%
1979 9.9%
1980 14.3%
1981 11.2%
1982 7.4%
1983 3.5%
1984 3.5%
See http://www.ssa.gov/OACT/COLA/colaseries.html

Regards, JAFO
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