So we have nearly 20 years to raise taxes/cut benefits before benefits get automatically cut to a smaller amount?
I guess I'm not really that alarmed.
We have 20 years to raise SS taxes to the point where we again take in as much as we take out. Like I said, I'm not really that alarmed.
This thing will never go broke, as there will be a fix when things get desperate. Perhaps one fix would be how this long term asset is invested. No retirement fund would be 100% in government treasuries, the lowest return going. Fix that you go a long way to fixing the funding problem.
20 year might sound like a lot to someone that is not into investment strategy and national accounts. But believe me. It is not.
Think about what the political disaster there would be to those in power at the time.
David Cay Johnston:
With the coming bulge in retirees, Social Security will start to pay out more than it takes in 2021, according to projections in the latest annual report. Under current law the program would be able to pay only about three-quarters of promised benefits starting in 2033. But that scenario can easily be avoided through a combination of four policy changes that would ensure full benefits continue to be paid, though I fear Congress will continue to do nothing.
One would be restoring the Reagan standard that 90 percent of wages are covered by the Social Security tax, which now applies to only 83 percent of wages. If we went back to the Reagan standard, the Social Security tax would apply to close to $200,000 of wages this year instead of $110,100.
Two would be raising the Social Security tax rate by two percentage points. That tax hike could be smaller or even avoided if, three, we reignited the growth in wages. Median wages have fallen in 2010 back to the level of 1999. And, four, it would help just as much if we created millions more jobs, which since 2000 have grown at only a fifth the rate of population increases.
Social Security is not going broke | David Cay Johnston
When a man lies, he murders some part of the world.
So why would I look at the math, if you admit you're not sure what the math is?I admit that I looked at the German and British systems in detail and only cursorily at the US
20 years is plenty of time when you understand how Social Security works. Congress could pass a law tomorrow which would make the Trust Fund solvent for the next ~75 years, which shows you how little of a problem this truly is, as long as Congress does their job. And since Social Security is a pay as you go system, there really isn't much of a danger for the next 15+ years.20 year might sound like a lot to someone that is not into investment strategy and national accounts. But believe me. It is not.