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Thread: Social Security To Go Bust By 2030: CBO

  1. #111
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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by Winchester View Post
    Those over 55 need to share part of the burden of reform as well. Immediately implement COLA freezes and start phasing in the higher retirement age now. They should also have to cough up more for their subsidized Medicare premiums.
    They already implemented stupid changes in COLA a few years back.

    I'm OK with the higher retirement age. Maybe something like you get 100% at 75 years of age, and 0.1% less for every month earlier you start collecting. Retiring at 65 makes it 88% of max.

    Since people are living longer, they can work longer.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by mtm1963 View Post
    every time the FICA tax has a surplus congress spends it on something else other then SS. what do you do about that?
    Dynamically adjust it so it only brings enough to pay out. Then you actually have a small reserve to cover swings. The last time the rate was adjusted was 1988 and things have changed.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    The cost has risen how much? 10 fold. The average worker now contributes more than he collects even with longer life expectancies. So raising life expectancy by definition cannot be contributing to the problem....
    Good grief. Let's try this again.

    When we look at life expectancy changes AFTER reaching adulthood, aka 21 years of age:

    People are living longer than in the recent past.
    People are living more years beyond age 65 than in the past.
    As a percentage of the population, more people are living beyond 65 than in the past.
    People are retiring earlier than in the recent past.
    People are working fewer years than in the past.
    The age of eligibility has barely budged, in fact it was reduced slightly
    Women have increasingly entered the labor force since the 1970s. While this means more contributions, it also means higher payouts -- especially since women's adult longevity has increased more than men's.

    Separately, birth rates have fallen, so we have fewer contributors as a percentage of the population.

    Result? You have fewer contributors trying to support more recipients, at the same per-capita benefits.

    It would be mistaken to say that the increased adult longevity is the only factor. But it's equally mistaken to say that it has no effect whatsoever.


    The question isn't whether we are living longer but at what age.
    I addressed that extensively in my post. Please try to actually read what I write next time.


    In any case of increasing life expectancy, it is nothing compared to the rise in costs.
    And which "rise in costs" do you mean? Surely you can't mean COLA, since the payroll taxes have also kept pace with inflation, until a few years ago. Could it be that SS costs are rising because... more people are collecting Social Security for more years?

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by mtm1963 View Post
    the trust fund exist on paper but there is NO money in it.

    benefits are paid from the SS tax on everyone's pay check.
    If that were true, benefits would have been automatically cut every year since 2009 when the revenue from "the SS tax on everyone's pay check" failed to cover the expense of everyone's benefits.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by jonny5 View Post
    Dynamically adjust it so it only brings enough to pay out. Then you actually have a small reserve to cover swings. The last time the rate was adjusted was 1988 and things have changed.
    Well, my solution is this. Since the FICA is treated like a tax rather than insurance anyway, change it to a variable tax that everyone pays on every dollar, and make everyone see their actual contribution.

    Not everyone is aware of this, but the employer matches our FICA. we pay 6.2% SS and 1.45% medicare for a total of 7.65%. It is 15.3% of our wages.

    Here's how we do it:

    Make a one time mandatory pay increase of all income wage earners of 7.65%, and the employers no longer match the money.

    Eliminate FICA (SS & Medicare insurances) and replace it with a 14.21% Social tax.

    For every $100 earned, FICA is $7.65 leaving the employee with $92.35. Now the employee earns $107.65, and the 14.21% tax is $15.30.

    $107.65 - $15.30 brings us back to the original $92.35.

    The biggest thing I like about this is every tax payer now has a dog in the fight when it comes to congress spending money. Their vote will be tempered by more, by how it affects they "social tax." When congress needs to spend more money for all these pet projects, the Social tax is increased. When congress starts spending less, and starts paying the debt down, the Social tax can be decreased. As it sits now, we have 47% of tax filers that don't care how tax rates effect others, because they either pay no taxes, or get other peoples money back in forms like earned income credit.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    If that were true, benefits would have been automatically cut every year since 2009 when the revenue from "the SS tax on everyone's pay check" failed to cover the expense of everyone's benefits.
    The problem is that SS runs a surplus every year. Congress just spends it. When SS no longer has a surplus, it will contribute to deficits and debt even more than we already have.

    In 2009, SS took in $807.49 billion and dished out $685.801 billion. This is a $121.689 million surplus. Not deficit. Who told you it was in deficit in 2009?


    By the end of 2013, congress has spent the accumulated surplus the SS phantom fund has of $2.764431 Trillion.

    http://www.ssa.gov/oact/STATS/table4a3.html

    The surplus for 2013 was only $32 million.
    Last edited by Lord of Planar; 07-17-14 at 03:42 PM.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by Lord of Planar View Post
    The problem is that SS runs a surplus every year. Congress just spends it. When SS no longer has a surplus, it will contribute to deficits and debt even more than we already have.

    In 2009, SS took in $807.49 billion and dished out $685.801 billion. This is a $121.689 million surplus. Not deficit. Who told you it was in deficit in 2009?


    By the end of 2013, congress has spent the accumulated surplus the SS phantom fund has of $2.764431 Trillion.

    Trust Fund Data

    The surplus for 2013 was only $32 million.
    There is a point where the discussion leaves the tracks. It is what Moynihan said. You can have your own opinions but not your own facts. Social Security taxes do not cover benefits. The revenue that you are quoting includes interest on the Trust Fund that you say doesn't exist. It started running deficits in 2010, generally speaking I say that it has not produced any revenue to borrow since 2009. That means it produced some excess cash to borrow in 2009, but not in 2010.

    "When SS no longer has a surplus, it will contribute to deficits and debt even more than we already have."

    This is factually not true. When SS no longer has a Trust Fund (surplus if you will), benefits are automatically cut. This is why people have a discussion about the size of the benefit cuts in 2033.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by Lord of Planar View Post
    Well, my solution is this. Since the FICA is treated like a tax rather than insurance anyway, change it to a variable tax that everyone pays on every dollar, and make everyone see their actual contribution.

    Not everyone is aware of this, but the employer matches our FICA. we pay 6.2% SS and 1.45% medicare for a total of 7.65%. It is 15.3% of our wages.

    Here's how we do it:

    Make a one time mandatory pay increase of all income wage earners of 7.65%, and the employers no longer match the money.

    Eliminate FICA (SS & Medicare insurances) and replace it with a 14.21% Social tax.

    For every $100 earned, FICA is $7.65 leaving the employee with $92.35. Now the employee earns $107.65, and the 14.21% tax is $15.30.

    $107.65 - $15.30 brings us back to the original $92.35.

    The biggest thing I like about this is every tax payer now has a dog in the fight when it comes to congress spending money. Their vote will be tempered by more, by how it affects they "social tax." When congress needs to spend more money for all these pet projects, the Social tax is increased. When congress starts spending less, and starts paying the debt down, the Social tax can be decreased. As it sits now, we have 47% of tax filers that don't care how tax rates effect others, because they either pay no taxes, or get other peoples money back in forms like earned income credit.
    You lost me at mandatory pay increase. Two wrongs dont make a right. But I agree with the fundamental idea of getting rid of employer contribution to make it more transparent (though that would do away with passing that cost on to the general populace, something democrats like). The rest is just solving different issues than the basic revenue problem.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by haymarket View Post
    Which is why we must take action to
    1 - pop the cap on FICA contribution so that ALL 100% of earners pay FICA on all 100% of their earnings just like 93% of earners do today
    2 - freeze benefit levels with a possible modest inflation increase

    Studies and experts have demonstrated that if you do these two things, you solve over 80% of this financial problem.
    WOW! we might be in agreement here (stranger things have happened)... Do you "pop the cap" on the employee side only? Also Add to the list tighter scrutiny of disability benefits.
    "It is only when men contemplate the greatness of God that they can come to realize their own inadequacy." Jean Calvin

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    If that were true, benefits would have been automatically cut every year since 2009 when the revenue from "the SS tax on everyone's pay check" failed to cover the expense of everyone's benefits.
    your statement is not true.

    evidently do you not understand the trust fund is full of IOU's? there is NO cash in the trust fund. ZERO nada nothing!!
    Go Vols

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