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Thread: Social Security Deficits Now Permanent

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    Social Security Deficits Now Permanent

    Yup. The entitlements have now officially shifted from being a source of extra "revenue" (yay free money! yay hopefully never having to pay it back! we have to pay it back? yay for making our kids cover the tab!) to a drain on a General Budget that is already running an annual $1.5 Trillion Deficit.


    Social Security will run a permanent yearly deficit when looking at the program’s tax revenues compared to what it must pay out in benefits, the program’s trustees said Friday in a report that found both the outlook for Social Security and Medicare, the two major federal social safety-net programs, have worsened over the last year...

    The figures come as Congress and President Obama are wrestling over whether to make major changes to the entitlement spending, and Republicans said the new projections should force the debate to turn in their direction.

    “Today’s report makes it clearer than ever that doing nothing is not an option. The failure to act means current as well as future beneficiaries, will face significant cuts even sooner than previously estimated,” said three top House Republicans on the Ways and Means Committee, which oversees both programs...

    Social Security began running an annual deficit in 2010 when looking at tax income and benefit payments...


    heyyyyyy, now this strikes me as the perfect time to create a brand-new huge entitlement! Obamacare, meet your doom - you have predecessors and they've already taken all the money.

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    Re: Social Security Deficits Now Permanent

    .....and the Ponzi scheme begins to unravel.

    A permanent yearly deficit is Liberalism realized......
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    Re: Social Security Deficits Now Permanent

    Social Security's challenges are mild compared to those of Medicare. Moreover, Social Security can be fixed with some actuarial changes (eligibility age, benefit structure, funding, or some combination of the three). Medicare's challenges are far more complex. In part, they result, from problems inherent in the nation's health care system, specifically the excessive cost growth problem.

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    Re: Social Security Deficits Now Permanent

    Quote Originally Posted by donsutherland1 View Post
    Social Security's challenges are mild compared to those of Medicare. Moreover, Social Security can be fixed with some actuarial changes (eligibility age, benefit structure, funding, or some combination of the three). Medicare's challenges are far more complex. In part, they result, from problems inherent in the nation's health care system, specifically the excessive cost growth problem.
    Medicare's issues stem from the fact that making cuts hurts industry and thus affects the economy. A majority of healthcare funding in this country comes from Medicare. It's easy to say "cut medicare" unless you realize that at the same time you are saying "cut healthcare reimbursement to providers, thus cutting healthcare access/quality to patients." With a population that lives longer, and baby boomers entering the system (and likely stressing the hell out of it) the challenge of keeping medicare viable is astronomical.
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    Re: Social Security Deficits Now Permanent

    Quote Originally Posted by donsutherland1 View Post
    Social Security's challenges are mild compared to those of Medicare. Moreover, Social Security can be fixed with some actuarial changes (eligibility age, benefit structure, funding, or some combination of the three). Medicare's challenges are far more complex. In part, they result, from problems inherent in the nation's health care system, specifically the excessive cost growth problem.
    They are both screwed. If people with good will pay into these schemes expecting the promised benefits then they should realize those benefits. But their dreams will probably not be realized.

    We can certainly be sympathetic but it's difficult to feel too much sympathy for those who believe the government will take their money and return it later with added benefits. This is a political Ponzi scheme invented by politicians whose only ambition is to gain political office in the short term, and promising to finance it with the the money of others.

    The Greeks will finally realize the cupboard is bare and their experience should encourage everyone to look after their own futures rather than rely on politicians, who they never really trust anyway, to look after something as important as their health and retirement..

    Rely on the government and odds are you're going to get dumped on, particular in the second and third generations of any promised benefits.
    Last edited by Grant; 05-13-11 at 11:32 PM.

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    Re: Social Security Deficits Now Permanent

    Quote Originally Posted by cpwill View Post
    Yup. The entitlements have now officially shifted from being a source of extra "revenue" (yay free money! yay hopefully never having to pay it back! we have to pay it back? yay for making our kids cover the tab!) to a drain on a General Budget that is already running an annual $1.5 Trillion Deficit.
    I suggest the following steps to solve the social security imbalance. If these steps are followed, the program could be made solvent into the foreseeable future:
    1. Automatically raise the retirement age by 2 months every year.
    2. Index starting benefits to price inflation, rather than wage inflation.
    3. Index annual increases to a price inflation measurement that takes into account changes in buying habits, rather than the antiquated CPI.
    4. Allow more legal immigration, so that we have more young people to balance the number of older people.
    5. Means-test social security, so that we start reducing benefits when the recipient is earning around $150K per year, and phase them out entirely by $250K.
    6. Increase the cap on taxable income for social security; we should be taxing at least up to $200K, rather than the $100K we tax now.

    Quote Originally Posted by cpwill
    heyyyyyy, now this strikes me as the perfect time to create a brand-new huge entitlement! Obamacare, meet your doom - you have predecessors and they've already taken all the money.
    This assumes that the Affordable Care Act creates an expense out of thin air that previously did not exist. It already existed, it was just being paid in the private sector, or by the public in other ways. Had the ACA not become law, it would not change the underlying problem with rising health expenditures, it would just foist them off to individuals and/or make the public pay for it in more concealed ways (e.g. lost productivity from being sick, inefficient pricing mechanisms, etc.)
    Last edited by Kandahar; 05-13-11 at 11:42 PM.
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    Re: Social Security Deficits Now Permanent

    And to think it all started with that hero LBJ, no wait a minute he was a stupid racist idiot who was first to steal money from the Social Security Lock Box as "Al the damn fool "global worminger" Gore" would call it, and it's been a president that lives on to this day.

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    Re: Social Security Deficits Now Permanent

    Quote Originally Posted by Kandahar View Post
    I suggest the following steps to solve the social security imbalance. If these steps are followed, the program could be made solvent into the foreseeable future:
    1. Automatically raise the retirement age by 2 months every year.
    2. Index starting benefits to price inflation, rather than wage inflation.
    3. Index annual increases to a price inflation measurement that takes into account changes in buying habits, rather than the antiquated CPI.
    4. Allow more legal immigration, so that we have more young people to balance the number of older people.
    5. Means-test social security, so that we start reducing benefits when the recipient is earning around $150K per year, and phase them out entirely by $250K.
    6. Increase the cap on taxable income for social security; we should be taxing at least up to $200K, rather than the $100K we tax now.
    i think your last point risks hurting more than it helps; but with that exception I would happily take all of these.

    This assumes that the Affordable Care Act creates an expense out of thin air that previously did not exist.
    it doesn't have to assume any such thing - the ACA objectively does do this. Specifically the subsidy for general middle-class health insurance.

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    Re: Social Security Deficits Now Permanent

    Quote Originally Posted by Kandahar View Post
    I suggest the following steps to solve the social security imbalance. If these steps are followed, the program could be made solvent into the foreseeable future:
    1. Automatically raise the retirement age by 2 months every year.
    2. Index starting benefits to price inflation, rather than wage inflation.
    3. Index annual increases to a price inflation measurement that takes into account changes in buying habits, rather than the antiquated CPI.
    4. Allow more legal immigration, so that we have more young people to balance the number of older people.
    5. Means-test social security, so that we start reducing benefits when the recipient is earning around $150K per year, and phase them out entirely by $250K.
    6. Increase the cap on taxable income for social security; we should be taxing at least up to $200K, rather than the $100K we tax now.



    This assumes that the Affordable Care Act creates an expense out of thin air that previously did not exist. It already existed, it was just being paid in the private sector, or by the public in other ways. Had the ACA not become law, it would not change the underlying problem with rising health expenditures, it would just foist them off to individuals and/or make the public pay for it in more concealed ways (e.g. lost productivity from being sick, inefficient pricing mechanisms, etc.)
    There are always those who will come up with a myriad of ways government programs ought to work but in fact they never do over the long term. A teweak here or there won't matter at all/

    Health insurance became less affordable the more it became less competitive. Big corporations took over the health care business the same way big government did, and the person in need of medical attention was left with less freedom of choice and greater costs.
    '
    Politicians often believe they have come up with foolproof systems that will work, particularly when anonymous taxpayer's money is being used but, as we see in Massachusetts, even very smart people cannot control a government bureaucracy, or the politicians with different philosophies who succeed them. We have to look after ourselves our families and our neighbors, all old fashioned virtues but ones that last.

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    Re: Social Security Deficits Now Permanent

    Quote Originally Posted by cpwill View Post
    it doesn't have to assume any such thing - the ACA objectively does do this. Specifically the subsidy for general middle-class health insurance.
    It subsidizes health insurance, but insurance itself is not the issue...it's just a way of paying for health care. The reason insurance is expensive is because health care is expensive. For that matter, health care itself is just one of many ways of paying for health problems. People can seek treatment, or they can choose to be less productive and/or die earlier because they're sick, or they can choose to take care of themselves through behavioral changes they'd prefer not to make. But one way or another, people WILL pay for the fact that health problems exist.

    Government-subsidized health insurance does not change this reality. It merely affects the WAY in which people choose to pay for health problems (e.g. more people seek treatment, fewer people choose to forgo it and be less productive) and it changes WHO is paying for it. Therefore I reject the notion that this is a "new entitlement" (in the sense that a new expense is suddenly being created that didn't exist before), because people have always had health problems and frequently have sought health care to solve those problems. The important question is how it affects the overall economic costs...and I'm including both the financial costs and the hidden costs.
    Last edited by Kandahar; 05-14-11 at 02:24 AM.
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