The Technology Behind the Social Security Debate — Here is a nice techie breakdown on the Social Security debate issues. I have not seen this discussed anyplace else. Kudos to Baseline for running this.

Today, SSA systems account for a limited number of data inputs.

Is the beneficiary alive? What’s the age? Are there dependents? Is there a divorce?

Once those questions are answered, they are matched to rules and formulas, and a check is sent.

Private accounts introduce moving parts.

What percentage of funds will be invested in a private account? Did the allocation change this quarter? Should the accounts be paid in an annuity if below a set level or taken in a lump sum? This information would probably be collected quarterly.

And money needs to go to accounts faster.

Currently, it can take 18 months to reconcile individual contributions to Social Security, Salisbury says.

That lag applied to private accounts means you could miss an entire bull market.

“It’s impossible to do what has to be done,” says Francis Cavanaugh, the first executive director of the Federal Retirement Thrift Investment Board, which was the agency responsible for administering the Thrift Savings Plan for federal employees. His tenure ran from 1986 to 1994.

via the Kitsap Pundit



  1. Richard Rollo says:

    Oh, come on! This is just so lame. If it takes 18 months to credit a
    social security account, then that by itself screams out for change.
    People need to remember that these proposals are VOLUNTARY, that means you don’t have to participate. Anyway, what’s the alternative? What does the AARP propose? What do the Democrats propose?

  2. roborob says:

    Social Security isn’t broken. it only looks that way if you (wrongly) imagine there’s a chunk of money set aside somewhere, rather than in the general fund. And of course, when you bankrupt the country with massive handouts to those who need it least and are least likely to put it back into the economy, the general fund suffers. What do Democrats propose? Keep our promise to our elders! This isn’t a freaking handout. We paid into it every working day. With respect to “saving” social security? Let the Repugnicans fall on that sword. It’s the quickest way to lose Florida.

  3. Thomas says:

    You might want to rethink that strategy. IMO, it is probable that the Democrats will take the White House in 2008. If that were the case, it will be the Democrats sitting under Democles sword not the Republicans.

  4. site admin says:

    Exactly WHY is it “probable” that the Dems will take the White House in 2008? They can’t do crap. Who is the person that will do it? Hillary? Obama? Quasimodo? They got nothing.

    2012 for sure since the country will be in the middle of a depression.

  5. Ed Campell says:

    And as is usual leading up to and into a Depression, the Republikans won’t give a damn. The “leaders” of that Party will be busy counting their ill-gotten gains.

    By 2012, half of Silicon Valley will have relocated to Shanghai, anyway. John you’re going to get some helluva frequent flyer miles covering technology news, by then.

  6. Tomas42064 says:

    Another tax? Yes. Somehow the Government will buy the SS system and sift the money out and then sell the system back to us without any retirement money in the fund.

  7. Johnathan Stein says:

    Sounds like B.S./straw-man argument to me.

    Ameritrade, ETrade, Vanguard & others have already developed, tested & put in place such systems, not just for investing but banking, credit-loans & mortgages as well. And you can BET they’ve designed them to scale up. Even if scale were a problem not, they could certainly be regionalized, or done by state, to reduce storage size. Hardly a “rocket science” problem…

  8. Pat says:

    Social Security is an answer looking for the problem.

    The Republicans want to focus on SS so we won’t notice the economy tanking, Tom Delay, or the continued violence in Iraq.

    The simple solution for SS would be to increase contributions. Ooops, can’t do that. The deficit Bush has racked up will so overwhelm American taxpayers that they just couldn’t afford 1% more for SS.


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