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Social Security To Go Bust By 2030: CBO

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.
Wind it down and stop the stupidity. That's the real answer
 
Free lunch? I paid into Soc Sec for 30 years. Now I am collecting what I put in.

Nope, you're money is gone. You are collecting what other people put in.
 
Free lunch? I paid into Soc Sec for 30 years. Now I am collecting what I put in.
Nope. You paid thirty years for others. There be less workers. Too bad.
 
How can something manged by the fed. govt. be going broke?
 
Holy red herring Batman!

Please stay on topic. First you created a misleading headline. Then, when given a factual number from the CBO on how to keep the Trust Fund funded for the next ~75 years, you go off on random tangents about parents.

The fact of the matter is Social Security is not going bust. It's a pay as you go system. The trust fund could be made solvent until 2087 (under current law) by raising payroll taxes to 16%. I have no idea whether people would accept that or not, but that wasn't the point. The point was you created a hypothetical scenario and I countered with an equally possible hypothetical scenario. To create my hypothetical scenario, I used actual numbers from the CBO, which you seemed to think I pulled out of a hat. And to counter this, you went off on a red herring.

Please discuss this without hyperbole. That's all I'm asking.

The ratio between those paying in and those drawing isn't what it was 40-50 years ago. If it truly was pay as you go, why would it only be solvent until 2087, why not in perpetuity? My father retired and started drawing in 1986, he's 90 now and still drawing. He has far outdrawn what he paid in. My mother having never worked a day outside the home, and having never paid into it, started drawing in 1990, she is still drawing. That's not sustainable.
 
I have to guess that you picked 16% out of a hat. We shouldn't pretend that we have any idea where Social Security is going regardless of what the headline says. I suspect that 12.4% of wages is a tough sell to future voters. You are basically suggesting that future voters are going to be more willing to pay taxes that we wouldn't.

Voters? Since when do we have votes on social programs? No candidate would be stupid enough to campaign on a platform that ends Social Security either. You are dreaming.
 
the point, there is NO trust fund because it has been spent by congress. that 2.8 trillion dollars spent by congress from the SS trust fund is part of the national debt. its called Intragovernmental Holdings.

Government - Frequently Asked Questions about the Public Debt

there is NO doubt the government will honor all of its debts.

There is no difference between the securities in the intragovernmental holdings and the securities in the publicly held. So you are right, but the information isn't useful. Whether the govt honors its debts in the future is unknown. No one at this point suspects that it will not honor the debt held by the Trust Fund.

Again, if the Trust Fund isn't real, how did scheduled benefits get paid.
 
Free lunch? I paid into Soc Sec for 30 years. Now I am collecting what I put in.

But you expect to be paid until you die? What if that date goes beyond what you have paid in? At least in a private plan, you get a better return and know exactly what you have.
 
Holy red herring Batman!

Please stay on topic. First you created a misleading headline. Then, when given a factual number from the CBO on how to keep the Trust Fund funded for the next ~75 years, you go off on random tangents about parents.

The fact of the matter is Social Security is not going bust. It's a pay as you go system. The trust fund could be made solvent until 2087 (under current law) by raising payroll taxes to 16%. I have no idea whether people would accept that or not, but that wasn't the point. The point was you created a hypothetical scenario and I countered with an equally possible hypothetical scenario. To create my hypothetical scenario, I used actual numbers from the CBO, which you seemed to think I pulled out of a hat. And to counter this, you went off on a red herring.

Please discuss this without hyperbole. That's all I'm asking.

I misunderstood your point. I thought you were suggesting that if future voters ended Social Security that they would have to pay 16% of their wages to support their parents. Yes, CBO projects that they can pay 16% of their wages to support everyone's parents, or they can cut back the system and take care of their own parents and the debt that was left to them by everyone's parents. Today the system has a negative return. People contribute more to it than the expect to collect from it, and your solution is to throw another 25% more at the system. Again, I can't imagine what will go wrong with that idea.
 
Voters? Since when do we have votes on social programs? No candidate would be stupid enough to campaign on a platform that ends Social Security either. You are dreaming.

That was true in the past. Today roughly 60% of the voting public expects to retire after the Trust Fund is exhausted. You are dreaming to think that politicians will ignore that voting block forever.
 
The Ponzi scheme has been dead for nearly 50 years. People born in 1960 expect to get less back from SS than they contribute. If the ratio is the problem, why did SS reach insolvency in 1983? Who are you talking about when you say that people have been added?
Whoops there goes any semblance of credibility you may of had, Social Security is not a Ponsi scheme. Ponzi scheme promise large payouts to attract new investors and ultimately do go bust because of the lack of new investors. Social Security doesn't have that problem, its a pay as you go system.
 
How can something manged by the fed. govt. be going broke?

Simple. The system has defined inputs and defined outputs. The latter is bigger than the former. How much? Well the Trustees project that the system has a negative net worth of 23 trillion. That is nearly $1.50 of broken promises for every dollar that the system has ever collected.

Who would have imagined that a machine managed by politicians would over promise what it could deliver.
 
Whoops there goes any semblance of credibility you may of had, Social Security is not a Ponsi scheme. Ponzi scheme promise large payouts to attract new investors and ultimately do go bust because of the lack of new investors. Social Security doesn't have that problem, its a pay as you go system.

Social Security gave a couple retiring in 1960 an expected retire of roughly $8 for every dollar contributed on an INVESTMENT adjusted basis. Is that outsized enough for you? It paid those benefits by promising a couple retiring in 1985 about $3 of benefits for every dollar contributed. Is that outsized enough for you? In 2010, the system hit a milestone, new retirees expected to contribute more than the expected to collect.

My point is that there is no outsized payouts. There are no investors because the government legally mandates participation. So you can parse words and say that it isn't a Ponzi-scheme.

Social Security doesn't have that problem, its a pay as you go system.

Social Security has a pay as you go problem.
 
Social Security gave a couple retiring in 1960 an expected retire of roughly $8 for every dollar contributed on an INVESTMENT adjusted basis. Is that outsized enough for you? It paid those benefits by promising a couple retiring in 1985 about $3 of benefits for every dollar contributed. Is that outsized enough for you? In 2010, the system hit a milestone, new retirees expected to contribute more than the expected to collect.

My point is that there is no outsized payouts. There are no investors because the government legally mandates participation. So you can parse words and say that it isn't a Ponzi-scheme.
No parsing of words are required., Social Security isn't a Ponsi scheme, it can never go bust like they do. Social Security is an insurance program.

Social Security has a pay as you go problem.
Yes it does, there are fixes that are needed. We need another commission like the Greenspan commission we had in 1983.
 
Social Security gave a couple retiring in 1960 an expected retire of roughly $8 for every dollar contributed on an INVESTMENT adjusted basis. Is that outsized enough for you?
Life expectancy in 1960 was 70 years -- only 66 for men, who were still the primary breadwinner then.

Life expectancy now is 78 years, and women have been increasingly paying into the system (which increases household benefits). That's a lot more to pay out.


In 2010, the system hit a milestone, new retirees expected to contribute more than the expected to collect.
Not for everyone. E.g. lower-income married couples, and married couples with one worker, both receive more in benefits than they pay in. And when we include Medicare, everyone receives more than they paid in taxes.


My point is that there is no outsized payouts. There are no investors because the government legally mandates participation. So you can parse words and say that it isn't a Ponzi-scheme.
It isn't a Ponzi scheme. Just saying so suggests that you don't understand how Social Security works, or how Ponzi schemes work, or are just using an inaccurate insult because it's politically expedient.

A Ponzi scheme is a fraudulent system where the organizer uses funds collected by the later "investors" to pay off the new "investors." No matter how fast it grows, it is unsustainable. Social Security, in contrast, is a pay-as-you-go system, so current revenues pay for current outlays. Surpluses from the year's collections went into the trust fund. It's been sustainable for about 80 years so far, albeit with a few tweaks.

Given the major demographic shifts since the 1930s (significantly longer lifespans, women working in larger numbers, changes in birth rates) and the lack of adjustments to Social Security, it really shouldn't be a surprise that the system needs further refinements at regular intervals.
 
Life expectancy in 1960 was 70 years -- only 66 for men, who were still the primary breadwinner then.

Life expectancy now is 78 years, and women have been increasingly paying into the system (which increases household benefits). That's a lot more to pay out.

That is life expectancy of a baby - which is a completely irrelevant data point in a pension system. This is an article that I wrote which explains some of the impacts of life expectancy on Social Security. Some are plus and some are minus. The standard material that you read is either based on irrelevant data or incomplete analysis. I haven't seen any research that looks that the issue correctly.

The Impact of Life Expectancy on Social Security : FedSmith.com




Not for everyone. E.g. lower-income married couples, and married couples with one worker, both receive more in benefits than they pay in. And when we include Medicare, everyone receives more than they paid in taxes.



It isn't a Ponzi scheme. Just saying so suggests that you don't understand how Social Security works, or how Ponzi schemes work, or are just using an inaccurate insult because it's politically expedient.

A Ponzi scheme is a fraudulent system where the organizer uses funds collected by the later "investors" to pay off the new "investors." No matter how fast it grows, it is unsustainable. Social Security, in contrast, is a pay-as-you-go system, so current revenues pay for current outlays. Surpluses from the year's collections went into the trust fund. It's been sustainable for about 80 years so far, albeit with a few tweaks.

Given the major demographic shifts since the 1930s (significantly longer lifespans, women working in larger numbers, changes in birth rates) and the lack of adjustments to Social Security, it really shouldn't be a surprise that the system needs further refinements at regular intervals.

You continue to quote research that you do not understand. It is possible to say that Social Security now delivers a negative return for average workers based on the UI research. The UI research confirms this statement. That fact that the assumptions of UI overstate the economic returns does change the core finding.

Suggesting that it says : "And when we include Medicare, everyone receives more than they paid in taxes." Suggests that you haven't read the disclosures.
 
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But you expect to be paid until you die? What if that date goes beyond what you have paid in? At least in a private plan, you get a better return and know exactly what you have.

I'm in my seventies, so the chances I'll be around after 2030 doubtful.
 
The ratio between those paying in and those drawing isn't what it was 40-50 years ago. If it truly was pay as you go, why would it only be solvent until 2087, why not in perpetuity?
Are you claiming Social Security doesn't work mostly as a pay as you go system?

The fact is today's payroll taxes pay for today's beneficiaries. Unlike what most people think, which is my contributions today go to my retirement tomorrow, Social Security is essentially a pay as you go system. Why is there a deadline on solvency? Because the amount being paid out is/will be greater than what's taken in. However, there's nothing which says it must continue that way. That was the point of the link, if I'm not mistaken.
Today the system has a negative return.
Yes, after a long history of more being paid in than was paid out. I suspect it will continue to go back and forth over time, where payouts and taxes are adjusted as needed.

People contribute more to it than the expect to collect from it, and your solution is to throw another 25% more at the system.
It is? When did I offer any solution? No, my point from the very beginning was that your headline was entirely misleading and that Social Security is not, and theoretically cannot be, going bust.
 
Are you claiming Social Security doesn't work mostly as a pay as you go system?

The fact is today's payroll taxes pay for today's beneficiaries. Unlike what most people think, which is my contributions today go to my retirement tomorrow, Social Security is essentially a pay as you go system. Why is there a deadline on solvency? Because the amount being paid out is/will be greater than what's taken in. However, there's nothing which says it must continue that way. That was the point of the link, if I'm not mistaken.
Yes, after a long history of more being paid in than was paid out. I suspect it will continue to go back and forth over time, where payouts and taxes are adjusted as needed.

It is? When did I offer any solution? No, my point from the very beginning was that your headline was entirely misleading and that Social Security is not, and theoretically cannot be, going bust.


Economic returns are not a cashflow measure. Today the system has a negative return, meaning that statistically a worker will not collect his contributions in benefits.

The idea that workers can put 16% of payrolls into Social Security is possible. I don't see them doing it, but maybe future voters will be willing to pay the taxes that we didn't. You never what is possible.
 
I'm in my seventies, so the chances I'll be around after 2030 doubtful.

Far from doubtful. You expect to live another 15 years. So there is a fair change that you will be around. You certainly have friends who will be around. So let's think about someone beyond ourselves.
 
Are you claiming Social Security doesn't work mostly as a pay as you go system?

The fact is today's payroll taxes pay for today's beneficiaries. Unlike what most people think, which is my contributions today go to my retirement tomorrow, Social Security is essentially a pay as you go system. Why is there a deadline on solvency? Because the amount being paid out is/will be greater than what's taken in. However, there's nothing which says it must continue that way. That was the point of the link, if I'm not mistaken.
Yes, after a long history of more being paid in than was paid out. I suspect it will continue to go back and forth over time, where payouts and taxes are adjusted as needed.

It is? When did I offer any solution? No, my point from the very beginning was that your headline was entirely misleading and that Social Security is not, and theoretically cannot be, going bust.

No, I'm not claiming that, certainly historically it did, however, on an increasing basis that's less the case. As technological advances continue to extend life expectancy, are we going to continue to allow people to stop working and begin drawing out of it at 62? The rest of my post, the part you didn't comment on, provides just one example of what's harming SS.
 
Far from doubtful. You expect to live another 15 years. So there is a fair change that you will be around. You certainly have friends who will be around. So let's think about someone beyond ourselves.

My children are not relying on Soc Sec. They are aware of what is happening. I have confidence that solutions will be found beyond 2030.
 
My children are not relying on Soc Sec. They are aware of what is happening. I have confidence that solutions will be found beyond 2030.

Family is another question. I am speaking about friends, who you hypothetically care about.

On what basis do you believe that solutions will be found?
 
No, I'm not claiming that, certainly historically it did, however, on an increasing basis that's less the case. As technological advances continue to extend life expectancy, are we going to continue to allow people to stop working and begin drawing out of it at 62? The rest of my post, the part you didn't comment on, provides just one example of what's harming SS.

Early retirement is a nightmare for SS as far as I can tell. But I think that it is a cliché to blame longer life expectancy for Social Security's problems. Most of the analysis uses the wrong data points, and fails to look at both contributions and benefits. Here is an article on the possibilities. It isn't saying that longer life expectancy does not hurt Social Security. It says we don't know what the impact is. Yes people will collect more, but they will contribute more. Statistically, people born after 1960 still lose money even with longer life expectancies. So the reasoning seems to stem from politicians looking for an excuse.

The Impact of Life Expectancy on Social Security : FedSmith.com
 
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