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Public Pension Crisis: Two options remain -- Implosion or Reform

But I have read up on this extensively. I have never seen one bit of evidence that the US government cannot meet the shortfall in SS payments.

We can raise the SS tax.
We can use other government revenues to meet the shortfall.
Are you aware we've been doing the exact opposite for decades? We've been using surplus SS contributes to offset deficits elsewhere in the government.

haymarket said:
There is no reason to cut benefits as promised.
Other than not having the money to do so, you're absolutely correct.:roll:

haymarket said:
My father was born in 1925 and like many in the Greatest Generation was a strong fiscal conservative. He taught me to be the same. One of his rules was you never ever incur a new debt when need the money to pay for ones you have already incurred. In other words, you don't go out and buy a new car when you have not yet paid off your old one. I believe that is the conservative economic philosophy and I support it.
I guess most senators and congressmen didn't have the wise fathers you and I had.

haymarket said:
Se we as a nation have a debt in terms of SS payments promised to people who earned them. We must pay those bills before we incur any new debts. If that means going into the regular budget aside from FICA payments - we simply do that. It is the fiscally conservative thing to do... not to mention the honorable thing to do as well.
Great idea, what do you propose cutting to make it happen?
 
Other countries can do this. Its time American citizens got the full benefit of being one of the richest countries o the planet. Another aircraft carrier does nothing for me
I love your consistent "but, mommy, all the other countries are doing it" arguments. Have you actually LOOKED at the situation in "other" countries actually is?
 
Meet it how? SS is a 'pay as you go' system that had previously built up a surplus (the 'trust me' fund) which is fast being depleted. Once the 'trust me' fund is gone then FICA revenues will no longer support SS benefit obligations (promises?) meaning that either FICA taxes must be raised, SS benefits cut or a combination of both.
excellent answer. SS is not going totally broke but soon it will only be able to pay what it take in.
 
excellent answer. SS is not going totally broke but soon it will only be able to pay what it take in.

The only problem with that (reduced benefit?) plan is having retirees explaining to their landlords, utility companies and/or care homes that they can no longer pay the full bill but would really not like to live on the streets.
 
Sure. AARP good enough for you? IF this isn't good enough google "states facing pension problems". One hit I saw said 43 states were facing problems.

Where in this article does it say that the states will not have enough income to pay the shortfall on pension accounts from other revenues to honor their obligations?
 
Are you aware we've been doing the exact opposite for decades? We've been using surplus SS contributes to offset deficits elsewhere in the government.

Other than not having the money to do so, you're absolutely correct.:roll:

I guess most senators and congressmen didn't have the wise fathers you and I had.

Great idea, what do you propose cutting to make it happen?

For some reason I keep telling you the answer and you keep playing ostrich.

There is plenty of money to pay SS and pensions. It will come from other revenues to make up the SS shortfall.

Do you get it now?

This is really beyond simple.

No cuts will be made as we simply pay old debts first before allocating money for anything else. We allocate what remains based on our priorities at that time.

This is really beyond simple.
 
That is BS - that surplus (the 'trust me' fund) was borrowed (and spent), as was required by law. Where money was borrowed from, does not make that borrowed money interest free or with no need to repay it. Essentially what you are saying is that once we could tax "too much" (under FICA) and now we can (must?) tax "not enough" (under FICA) and still (pretend to?) have a 'pay as you go' social safety net.

If you take (give yourself?) a loan that does not mean that you have more net worth or that you can borrow more money to repay your past debts endlessly.

Let me make this very clear and as simple as possible: the SS fund will continue to bring in money. If we want to maintain the comforting idea that the system pays for itself, then we simply need to increase FICA taxes and it will take care of that. If we do not want to do that, we simply make up the annual SS shortfall from the general budget revenues from other taxes.

Got it?
 
Let me make this very clear and as simple as possible: the SS fund will continue to bring in money. If we want to maintain the comforting idea that the system pays for itself, then we simply need to increase FICA taxes and it will take care of that. If we do not want to do that, we simply make up the annual SS shortfall from the general budget revenues from other taxes.

Got it?

Yep I got it - which is why we now have a federal deficit. Congress continues to borrow from future generations to buy votes today.
 
Where in this article does it say that the states will not have enough income to pay the shortfall on pension accounts from other revenues to honor their obligations?
Huh? That's exactly what "shortfall" means. They don't have enough revenue to pay obligations.
 
For some reason I keep telling you the answer and you keep playing ostrich.

There is plenty of money to pay SS and pensions. It will come from other revenues to make up the SS shortfall.
WHAT "other revenues"?
haymarket said:
Do you get it now?

This is really beyond simple.

No cuts will be made as we simply pay old debts first before allocating money for anything else. We allocate what remains based on our priorities at that time.

This is really beyond simple.
Sorry no. There are NO spare revenues. It's THAT simple. Every penny we take in goes somewhere else, and we still have to borrow more.
 
I love your consistent "but, mommy, all the other countries are doing it" arguments. Have you actually LOOKED at the situation in "other" countries actually is?

Yeah. They are doing great. Time we did that
 
WHAT "other revenues"?
Sorry no. There are NO spare revenues. It's THAT simple. Every penny we take in goes somewhere else, and we still have to borrow more.

You are ignoring the reality that the Federal government takes in massive amounts of money and only a very small amount would be needed to cover the SS shortfall down the road.

https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762

The U.S. government's total revenue is estimated to be $3.422 trillion for fiscal year 2019. That's the most recent forecast from the Office of Management and Budget for October 1, 2018 through September 30, 2019.

As I have said, I take a very conservative approach to this matter. You pay your already incurred financial obligation first before you take on new ones. That is the fiscally prudent and honorable thing to do and the thing we must do.

Please note that a little over a quarter of that revenue comes from SS taxes. That means that in a future year with a shortfall where those specific SS revenues do not meet the payout for SS benefits, we still have nearly 3/4 of the federal budget, or in 2019, about 2.2 trillion dollars, to make up that shortfall.
 
Yep I got it - which is why we now have a federal deficit. Congress continues to borrow from future generations to buy votes today.

I have long advocated an across the board tax increase for anyone in this nation making dollar one on up. I would begin at increasing whatever is your federal tax bracket by a full five points.

I do NOT want to borrow from future generations. I want us here and now to pay more.
 
I wish you the best with that. But make alternative plans. Look at the experiences of Vallejo and Stockton California as cautionary tales

Thanks. I'm hoping to collect the pension that I'm vested in. The state runs a surplus every year, so it can afford to deliver on its promise.
 
I have long advocated an across the board tax increase for anyone in this nation making dollar one on up. I would begin at increasing whatever is your federal tax bracket by a full five points.

I do NOT want to borrow from future generations. I want us here and now to pay more.

Please explain to me how it is possible to "borrow from future generations". It's not like we can transfer future production backwards in time. The federal debt is just an accounting thing, not based on real wealth but a point system (dollars) much like a sports game. The score keeper can never run out of points, and doesn't have to borrow points from future games if todays game ends up with a high score.

Otherwise I love your position on SS.
 
Please explain to me how it is possible to "borrow from future generations". It's not like we can transfer future production backwards in time. The federal debt is just an accounting thing, not based on real wealth but a point system (dollars). It can be dealt with using accounting procedures.

Otherwise I love your position on SS.

Thank you.

I was using the phrase used by another poster when replying to them. I think what it means - as common used - is that we spend today and ask our kids to pay for it later with their tax money. Of course, we paid for WW2 like that and nobody seemed to mind. But I do think we need to raise taxes today.
 
Whether or not the federal government will honor its obligation to repay the SS funds depends on one thing:

Were those funds borrowed?

Or were they stolen?

If our elected officials have any integrity at all, which is a debatable question, then they will pay back the money that has been misspent and make Social Security whole.
And, if hey don't, the seniors should, and probably will, vote the rascals out of office.
 
Whether or not the federal government will honor its obligation to repay the SS funds depends on one thing:

Were those funds borrowed?

Or were they stolen?

If our elected officials have any integrity at all, which is a debatable question, then they will pay back the money that has been misspent and make Social Security whole.
And, if hey don't, the seniors should, and probably will, vote the rascals out of office.

I can think of no other single issue that would unite people over the age of fifty on all parts of the political continuum that saving SS. And that would indeed rule the day at the ballot box.
 
I can think of no other single issue that would unite people over the age of fifty on all parts of the political continuum that saving SS. And that would indeed rule the day at the ballot box.

Exactly.
The other one is Medicare, which is currently under attack. There is a proposal to eliminate Medicare in favor of giving seniors "vouchers" with which to purchase their own insurance.

Since insurers aren't exactly clamoring for the seniors market, that one is probably worse that reducing SS.
 
i am vested in a public pension that i accepted as deferred salary. i worked for a much lower wage than my education and skills should have warranted, and the pension was one of the benefits intended to offset that low wage. changing the terms now amounts to wage theft.

I'm in the same boat you are. My job comes with a pension, however, that pension is unlikely to prove sustainable, and so it will likely be altered, not terribly to my benefit.

I can complain about that all I like. But complaining doesn't change the math. When pension programs are unsustainable that means they will not be sustained.

Really, public service ought to come with no pension at all - 401(k) matches could cost the same, still provide for retirement, and be better for the worker (it's something we own, instead of something we are dependent on others for, decades down the road), and it's a form of deferring costs from one administration to the next. We're likely going to continue to move in that direction, and I would encourage you not to plan on your pension being there (certainly in its current form) when you do your retirement planning. That way, if something is left after paying off the Boomers and the rest of the Xers for us, well, that's a pleasant surprise, instead of the nasty shock of how little it might be.
 
Exactly.
The other one is Medicare, which is currently under attack. There is a proposal to eliminate Medicare in favor of giving seniors "vouchers" with which to purchase their own insurance.

This is not a proposal to eliminate Medicare, it's a proposal to reform Medicare and make it (somewhat) more sustainable.

Currently, Medicare is unsustainable. Meaning that it will not be sustained. Foot stomping and being Very, Very Angry, and banging our sippy cups and blaming each other isn't going to stop the math.
 
I'm in the same boat you are. My job comes with a pension, however, that pension is unlikely to prove sustainable, and so it will likely be altered, not terribly to my benefit.

I can complain about that all I like. But complaining doesn't change the math. When pension programs are unsustainable that means they will not be sustained.

Really, public service ought to come with no pension at all - 401(k) matches could cost the same, still provide for retirement, and be better for the worker (it's something we own, instead of something we are dependent on others for, decades down the road), and it's a form of deferring costs from one administration to the next. We're likely going to continue to move in that direction, and I would encourage you not to plan on your pension being there (certainly in its current form) when you do your retirement planning. That way, if something is left after paying off the Boomers and the rest of the Xers for us, well, that's a pleasant surprise, instead of the nasty shock of how little it might be.

Then pay me the money up front. They chose to defer the salary. If they renege, it's theft.
 
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