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Thread: 2014 Social Security Trustees Report

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by azgreg View Post
    My thoughts come from the idea that politicians are more interested in votes than governing. I'm one of those 50 year olds you are talking about and since I see what's happening I have taken my retirement into my own hands. I will not need my SS benefits to get by. If they are there than nice, but I'm not counting on it.
    The issue for politicians of voters is about participation. At 2033, the percentage of registered and active voters is 45% or so. Every year that percentage rises... How long do you think that audience will put up with "So we have nearly 20 years to raise taxes/cut benefits before benefits get automatically cut to a smaller amount?"

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by BMCM View Post
    I seem to remember back in the mid 70's we were told that the SS fund would be completely depleted by the mid 90's. Didn't happen. If it was a real problem, why didn't the politicians deal with it at that time. The short answer is the SS is a campaign talking point for both sides. The main problem is the American people took money out of the fund and replaced it with IOU's via the politicians. Now it's time to replace those IOU's with real money. If we keep re-electing the same politicians over and over the problems will never be fixed.
    No. I do not think anyone thought that at that time. In the 1980's, however, it was quite clear that it would run into problems later, when the Baby-Boomers went into retirement, if nothing was done to stop that from happening.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by Slyfox696 View Post
    No, I'm just not freaking out about it. You and I have discussed this already.

    No, it's not even close because the person knows at the bottom of the next 19 floors is the very end. In 20 years, Social Security will not be at its end. Why you continue to try and push this false narrative, when you clearly know better, is beyond my understanding.
    It is because I know that the narrative "So we have nearly 20 years to raise taxes/cut benefits before benefits get automatically cut to a smaller amount? " is complete non-sense. It is silly. If benefit cuts are OK, we can have smaller ones today. It isn't a reasoned argument, it is the politics of delay.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by joG View Post
    No. I do not think anyone thought that at that time. In the 1980's, however, it was quite clear that it would run into problems later, when the Baby-Boomers went into retirement, if nothing was done to stop that from happening.
    I forgot about the Baby Boomers, they're mostly a worthless bunch, not all but a large amount. But they didn't stop dipping their fingers in the till.
    I confess, I did it, I let the dogs out.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by MTAtech View Post
    That's not true. There is a growing disparity in life expectancy between the haves and the have-nots. Yes, conservatives say we need to raise the retirement age to 67 on janitors because lawyers are living longer.

    Moreover, even if the trust fund reserves are depleted in 2033, SSA will still be able to pay about 2/3 of the benefits. But the solutions are what really doesn't make sense, which is to cut benefits now so we won't have to cut them in the future.
    One of us has actually traded emails with SSA about this subject. They say that there is actually a slight difference, but that the impact of shorter life expectancy is offset by the higher collection rate on disability.

    Who are you kidding. The figure is about 77% of promised beneifts. If that is OK, let's have 85% of promised benefits today. It is an absurdly dishonest argument.

    Quote Originally Posted by MTAtech View Post
    But the solutions are what really doesn't make sense, which is to cut benefits now so we won't have to cut them in the future.
    So the conclusion is to .... ignore the problem. The system is a vital program, and yet you treat it as though it were nothing but a pot of cash to throw around on current voters.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by Kal'Stang View Post
    Bah, Its a simple fix for the government. Just have them infuse the trust fund with more money. I'm sure they can get a loan for it from China. They know we're good for it!
    Print money that will solve everything.... You don't appreciate things until they are gone, and SS is going to be one of them.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by Slyfox696 View Post
    Because people have absolutely no idea how Social Security works and become alarmists for no reason. So I try to shoot down the false sense of danger.

    Like they always have. That's exactly how the system is set up.

    What? This sentence of yours makes absolutely no sense. Who is the "insured"?

    Maybe you don't understand. We can pay full benefits from Social Security for the next 20 years, without having to do ANYTHING (theoretically, since the economy is never completely stable and prone to positive and negative swings). 20 years, full payment, no problem.

    We have 20 years to figure out and pass a law which allows us to meet the full financial obligation. Congress could pass a law tomorrow and by Friday we could have SS payed for for the next ~75 years. And even if no law is EVER passed, we STILL can afford to pay out over 75% of benefits as defined under law.

    Yeah, it would suck for those receiving SS to only get 77% of what is legally promised to them under law, but it's not like they are going to get nothing. Social Security is a pay as you go system. There will never be a time where people aren't getting paid anything.

    Do you have any idea what you are talking about? How does debt/deficit have anything to do with Social Security, when Social Security can ONLY be funded, under current law, by payroll taxes?

    No, what's irresponsible is how some Chicken Littles run around claiming the sky is falling and do not seem to understand what the acorn really is.

    I'll try one more time to explain it to you, because I do not get the feeling you truly understand how Social Security works.

    1. Current workers pay payroll taxes. These taxes are set aside specifically, and only, for Social Security.
    2. Social Security payments are made from today's employees' payroll taxes.
    2a. For example, if I'm working and you're drawing SS, the tax I pay in my next check theoretically goes straight to you.
    3. The excess of payroll taxes paid went into the Trust Fund. For simplicity's sake, the Trust Fund does NOT pay Social Security benefits unless the amount of taxes is not enough to cover the amount of benefits.
    4. We are currently in a situation where taxes to not make enough to pay out benefits, so we are now tapping into the Trust Fund after the decades of overpayments which were made.
    5. We have enough in the Trust Fund to supplement current worker taxes to pay full benefits for the next 20 years.
    6. If no law is changed, if the economy does not go through a prosperous period or anything which affects how long we can make payments, then those collecting Social Security will STILL receive over 75% of the benefits owed to them. The amount SS collects in taxes will be enough to still payout 75% of benefits on time.
    7. Since the Trust Fund is ONLY used to supplement payroll taxes, any law passed which brings the amount collected in payroll taxes even with the amount paid in benefits means the Trust Fund will no longer be drained.


    This is why having 20 years to do something about it really isn't something to become alarmed over. If we passed a law changing Social Security now or passed one in ten years, it will have absolutely no change in reality.
    Actually....

    waiting 10 years will mean that the problem has grown. This is one of the things you clearly do not understand. The Trustees said that this year the size of the problem grew 900 billion dollars, just because we changed the calendar year from 2012 to 2013.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by BMCM View Post
    I seem to remember back in the mid 70's we were told that the SS fund would be completely depleted by the mid 90's. Didn't happen. If it was a real problem, why didn't the politicians deal with it at that time. The short answer is the SS is a campaign talking point for both sides. The main problem is the American people took money out of the fund and replaced it with IOU's via the politicians. Now it's time to replace those IOU's with real money. If we keep re-electing the same politicians over and over the problems will never be fixed.
    In 1977, Jimmy Carter signed a reform plan which 'guaranteed' the system would be solvent into the 2030s. Six years later the system was insolvent. So the Trust Fund was COMPLETELY DEPLETED only it was 10 years before. The politicians did something. They advanced the system cash and borrowed from the DI fund.

    What you call IOUs, investment professionals call cash-equivalents. Replacing them with cash only means that the system has a $24 trillion dollar shortfall. The Trust Fund is little more than economic parsley.

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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by JoeTheEconomist View Post
    Print money that will solve everything.... You don't appreciate things until they are gone, and SS is going to be one of them.
    Well...that IS how the government thinks after all. Unless of course there is a political advantage to decrying it.
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    Re: 2014 Social Security Trustees Report

    Quote Originally Posted by JoeTheEconomist View Post
    One of us has actually traded emails with SSA about this subject. They say that there is actually a slight difference, but that the impact of shorter life expectancy is offset by the higher collection rate on disability.

    Who are you kidding. The figure is about 77% of promised beneifts. If that is OK, let's have 85% of promised benefits today. It is an absurdly dishonest argument.
    1. There is no debate as to whether life expectancy is income dependent. There is research on this (see: Trends in Mortality Differentials and Life Expectancy for Male Social Security Covered Workers, by Average Relative Earnings)
    the top half of the average relative earnings distribution has experienced faster mortality improvement than has the bottom half. Specifically, male Social Security–covered workers born in 1941 who had average relative earnings in the top half of the earnings distribution and who lived to age 60 would be expected to live 5.8 more years than their counterparts in the bottom half.
    That means that proposals to raise the Social Security eligibility age works against low income workers, who need Social Security the most.

    Quote Originally Posted by JoeTheEconomist View Post
    So the conclusion is to .... ignore the problem. The system is a vital program, and yet you treat it as though it were nothing but a pot of cash to throw around on current voters.
    No, what I am saying is that right-wingers have always been looking for excuses to cut entitlements and ultimately eliminate them. Considering that there is no crisis for decades, let's address more vital crises, such as climate change, that have a much more devastating outcome and needs to be addressed right now.

    I read your threads which seems to all have a boner for Social Security, which has no crisis at hand.
    "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it." --J.S. Mill

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