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Thread: 5 Myths That Pass For Facts About Social Security

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    Re: 5 Myths That Pass For Facts About Social Security

    [QUOTE=fmw;1067379760]
    Quote Originally Posted by JoeTheEconomist View Post
    In the discussion of Social Security, the meaning of the same word changes from sentence to sentence. This is how you find that SS is a driver of our long-term deficits, and yet does not add a penny to our deficit. You need to know what the word "deficit" means. Most of these myths come from people who think that the words have the same meaning as in the English language.



    The reason is that social security is not counted in government deficit reports.



    Depends on the economy and revenue collection.



    If government had a legal requirement to pay SS benefits from FICA taxes collected, it would have been bankrupt long ago. Bankruptcy doesn't apply to government. It can reduce or cancel payments without bankruptcy.



    It doesn't spend anything. SS payments are made from the general fund. Government spending including SS drives our long term debt.





    Revenue from FICA taxes goes into the general fund and goes out of the general fund. You can't separate out SS except as an accounting entry.
    You would be surprised. SS is supposed to be uncounted in the govt's budget. The unified budget includes SS, and people cite the figures. This is why there is a disagreement about the impact on the deficit. Pundits are talking about two different measures of the deficit.

    2 and 3 are essentially the points that I made in the article. 4 and 5 benefit checks are paid by the Treasury from payroll taxes which by law can only be spent on Social Security benefits or expenses. Given the law, you have to separate out SS - it is the law. At this point, no FICA taxes go into the general fund because there is nothing left over to put anywhere. Every penny is used to pay benefits. If benefits were paid by the general fund we would not be talking about automatic benefit cuts.

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    Re: 5 Myths That Pass For Facts About Social Security

    Doesn't the OP post this same thread wvery few months? I swear I've read this B4.
    "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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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by MTAtech View Post
    Doesn't the OP post this same thread wvery few months? I swear I've read this B4.
    I haven't posted it here or anywhere. I generally avoid the # myth/facts articles because they tend to be filters of ideology. That said, you will find probably 7 of them in the past month because everyone else loves them.

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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by longview View Post
    I fully expect the Government to start means testing Social Security at some point.
    it will start small, like if someone has any type of income above $6000 a month,
    then their SSI payment will drop to zero, with a sliding scale above $3000 a month.
    Oh, you mean, 'from each according to their abilities, to each according to their needs'?
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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by JoeTheEconomist View Post
    I haven't posted it here or anywhere. I generally avoid the # myth/facts articles because they tend to be filters of ideology. That said, you will find probably 7 of them in the past month because everyone else loves them.
    Ok, I just seem to remember you having a fixation with SSA.
    "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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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by Grand Mal View Post
    Oh, you mean, 'from each according to their abilities, to each according to their needs'?
    I strongly suspect, they will not sell it that way!

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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by MTAtech View Post
    Ok, I just seem to remember you having a fixation with SSA.
    It is an interest when we agree, and a fixation when we don't.

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    Re: 5 Myths That Pass For Facts About Social Security

    Social Security doesn't concern me that much. In the worst case scenario the government will just reduce benefits.

    The real problem is Medicare. You can't just reduce benefits with it because healthcare needs are going to be completely unrelated to benefit levels or economic performance for seniors (how the economy is doing, what Medicare benefit levels are and so on have nothing to do with the number of seniors with heart disease, cancer, diabetes, dementia and so on). Moreover, you can't privatize it because insurers run into the same problem the government is running into - seniors are very, very, very expensive to insure because they are very, very, very high risk. The only solution to the Medicare problem is to significantly reduce provider costs and get them more in line with our peer nations, but no one in either party is talking about that one. They treat health care costs as a problem with insurance premiums and ignore the fact that insurance premiums are high because many providers are billing exorbitant rates for their services. The closest anyone in either party gets to talking about actual healthcare costs are drug prices, but that is only about 10 to 15% over all health care spending.

    Another big looming problem is that the shift from pensions to 401Ks for most people has not really panned out. Most people in their 50s don't have nearly enough money in their 401Ks to fund their future retirement. There is a variety of reasons for that, some related to poor planing by many individuals, but also a lot of things outside of their control.
    Last edited by SouthernDemocrat; 07-06-17 at 10:56 PM.
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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by SouthernDemocrat View Post
    Social Security doesn't concern me that much. In the worst case scenario the government will just reduce benefits.

    The real problem is Medicare. You can't just reduce benefits with it because healthcare needs are going to be completely unrelated to benefit levels or economic performance for seniors (how the economy is doing, what Medicare benefit levels are and so on have nothing to do with the number of seniors with heart disease, cancer, diabetes, dementia and so on). Moreover, you can't privatize it because insurers run into the same problem the government is running into - seniors are very, very, very expensive to insure because they are very, very, very high risk. The only solution to the Medicare problem is to significantly reduce provider costs and get them more in line with our peer nations, but no one in either party is talking about that one. They treat health care costs as a problem with insurance premiums and ignore the fact that insurance premiums are high because many providers are billing exorbitant rates for their services. The closest anyone in either party gets to talking about actual healthcare costs are drug prices, but that is only about 10 to 15% over all health care spending.

    Another big looming problem is that the shift from pensions to 401Ks for most people has not really panned out. Most people in their 50s don't have nearly enough money in their 401Ks to fund their future retirement. There is a variety of reasons for that, some related to poor planing by many individuals, but also a lot of things outside of their control.
    Here is the part that no one is talking about. As people get older, they become more dependent upon Social Security. The program does not look important today because the Boomers make the demographic of seniors fairly young, and most seniors have saved for at least a few years of retirement. Dependence on Social Security basically doubles between the age of 70 and 80. That means that Boomers who are now 70 will cause SS dependence to rise rapidly.

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    Re: 5 Myths That Pass For Facts About Social Security

    Quote Originally Posted by JoeTheEconomist View Post
    In the discussion of Social Security, the meaning of the same word changes from sentence to sentence. This is how you find that SS is a driver of our long-term deficits, and yet does not add a penny to our deficit. You need to know what the word "deficit" means. Most of these myths come from people who think that the words have the same meaning as in the English language.


    1. Social Security has not added one penny to the deficit.


    You tell me which "deficit" you are talking about, and I can tell you how much SS adds to it.

    2. Social Security can pay every penny of benefit to every eligible American for 17 years.

    The Trustees say that SS has a coin flips chance of paying scheduled benefits in 2034. People are generally converting a wild-ass guess into some kind of promise.

    3. Social Security is going/is not going bankrupt.

    When someone uses the word bankrupt in a discussion about Social Security, it is click bait. Whether it is pro or con, the writer is trying to get shares.

    4. Social Security is a driver of our long term debt.

    The problem in Social Security is the amount of money that it will not spend. Not spending money is not the cause or really even a contributor to our debt.

    5. The government has raided the Trust Funds to pay for other programs.

    The program has not generated a penny of free cashflow to "raid" in 7 years.

    If you wish to find source material or a longer description,
    5 Myths About Social Security Often Accepted as Facts
    Let's see. #1 is a bold-faced lie. Total money out vs total money in, IOUs, etc., means it has been used to mask the real deficit.

    re #7: Ooooh, 7 years. Convenient cut-off point. That's not very long ago. How about before that?
    If you claim sexual harassment to be wrong, yet you defend anyone on your side for any reason,
    then you are a hypocrite and everything you say on the matter is just babble.

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