4 Takeaways from the latest report on social security's solvency

code1211 said:

If the original model was based on the 401K Model that did not exist at that time, then the abuses you describe would not have happened. The cash would have been in private accounts, not an accessible fund.

Since the model was one of a Ponzi Scheme, there was no way that it would not, at some point, collapse under its own weight.

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If SS and Medicare collapse, it's because we decide to let it. There is nothing inevitable about it - it will be our CHOICE.

At the time when Social Security Retirement benefits were set up, the life expectancy was lower than than 65 years old. Now it's just under 80 years old.

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That's true but misleading, and I have explained why. That big difference is mostly due to much higher infant mortality back then, which doesn't impact SS.

If the original model was a 401K, the impact of the Baby Boomers retiring would have been a windfall to the Treasury from the combined amount of tax paid by the Boomers and the folks replacing them on the jobs they vacated.

Still another example of the predictable failure of centralized programs compared to dispersed programs controlled at the local level. Personal control is pretty local.

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OK, but the problem is SS and Medicare came into being because those "dispersed programs controlled at the local level" failed poor seniors, and there are lots of them.

cpwill said:

HAH. I did not know that, but that sounds exactly like the VA.



Uh, no, that's why they are called unfunded liabilities. They are liabilities because the spending is mandatory, and it is in the future, and they are unfunded because we aren't going to have the funds to pay for them in revenues.


Examples of Unfunded Liabilities

In reference to the U.S. government a prime example of an unfunded liability is Social Security. When Social Security was first implemented by Franklin D. Roosevelt in 1935, there were more than enough payees (working taxpayers) to support the number of Social Security beneficiaries (retirees). In 1940, the ratio of payees to beneficiaries was 159 to one. Today the ratio of workers to beneficiaries is less than three to one. Medicare has a similar problem with unfunded liabilities.

Another example of unfunded liabilities is with pension plans. For example, state pension plans reportedly have more than $6 trillion in unfunded liabilities. The worst states include California, New York, Illinois, Ohio and Texas. A pension plan is a retirement benefit sponsored and fully funded by an employer on behalf of their employees....​

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Unfunded liabilities is a parlor trick to keep us from investing in the very things our nation needs to have a robust economy today and a prosperous future that provides for the needs of our people.

I'm not a big believer in locking up trillions of dollars while yelling about unfunded liabilities.
For one, I have very serious doubts that those locked up trillions would ever actually GO TO paying down the liabilities.
Someone twenty or thirty years down the road sees that lock box and they pick the lock, and they pocket the money, just as has already happened in the past.

The USPS had to pay a $5Bn ransom every year for almost a decade to "fund health and other benefits for USPS 75 years into the future".
You want to bet a hundred bucks that those billions saved up for the next 75 years WILL NOT GO to their intended target?

Second, there is one "unfunded liability" that counts more than anything else.
Capital development of our nation. A lock box isn't going to buy back our kids education and our broken infrastructure twenty years down the road when we don't have either the skills or the infrastructure to stay relevant WRT the rest of the world.

Money today is used by people living today. Money tomorrow (twenty or thirty - or even 75 years down the road) will be used by people living tomorrow.
Investment today in research, funding promising technology advances that don't make economic sense yet for the private sector to invest in, developing state-of-the-art public infrastructure (roads, transportation systems, hospitals, schools, training facilities, research laboratories, etc.) supporting the continual improvement of our agriculture, food production, and the quality/nutritional value of our nation's food supply, investing in cleaner and more sustainable energy sources that lower energy costs for business and consumers... all these things are what will ensure that future generations will have their needs met, not some lock boxes full of "saved taxes".

cpwill said:

HAH. I did not know that, but that sounds exactly like the VA.

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No, it doesn't sound like the VA, it sounds like CONGRESS, who put the VA in that position.
That happened in 1994.

cpwill said:

HAH. I did not know that, but that sounds exactly like the VA.

Uh, no, that's why they are called unfunded liabilities. They are liabilities because the spending is mandatory, and it is in the future, and they are unfunded because we aren't going to have the funds to pay for them in revenues.

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That's bolded simply isn't true, or at least it's not a given, as you imply, and part of the definition.

Your mortgage (if you're like most people) and your car most likely is an "unfunded liability" because you don't have the car note balance and/or the mortgage balance in a savings account. That simply does NOT mean that you aren't going to have the funds to make the payments with future revenues/income. Same with SS and Medicare.

JasperL said:

That's bolded simply isn't true, or at least it's not a given, as you imply, and part of the definition.

Your mortgage (if you're like most people) and your car most likely is an "unfunded liability" because you don't have the car note balance and/or the mortgage balance in a savings account. That simply does NOT mean that you aren't going to have the funds to make the payments with future revenues/income. Same with SS and Medicare.

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Where are those funds going to come from? The point made is accurate, SS is an existing unfunded mandate as the money contributed to the SS fund was borrowed in the past for other obligations and secured by IOU's that have to be funded when they come do or people start retiring which is happening now. Seems that so many like you don't understand that an IOU's in the SS fund still has to be paid for and with the gov't running a deficit due mostly to entitlement spending the money will be printed, borrowed, or taxes raised to cover for the Gov't misuse of the money

JasperL said:

If SS and Medicare collapse, it's because we decide to let it. There is nothing inevitable about it - it will be our CHOICE.



That's true but misleading, and I have explained why. That big difference is mostly due to much higher infant mortality back then, which doesn't impact SS.



OK, but the problem is SS and Medicare came into being because those "dispersed programs controlled at the local level" failed poor seniors, and there are lots of them.

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I have no idea what the "dispersed programs controlled at the local level" were or how they apply to anything I posted.

Social Security collapsing if we "let it"? The whole point is that as Ponzi Scheme that is prone to collapse without Herculean efforts to support it.

It it had been set up like a 401K, it would be both self supporting and an income generator.


Life Expectancy at Birth by Race and Sex, 1930–2010

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Conservative said:

Where are those funds going to come from?

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Taxes.

The point made is accurate, SS is an existing unfunded mandate as the money contributed to the SS fund was borrowed in the past for other obligations and secured by IOU's that have to be funded when they come do or people start retiring which is happening now. Seems that so many like you don't understand that an IOU's in the SS fund still has to be paid for and with the gov't running a deficit due mostly to entitlement spending the money will be printed, borrowed, or taxes raised to cover for the Gov't misuse of the money

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That's not the part of the point that was inaccurate. "Unfunded liability" does not mean, "we don't or won't have the funds in the future to pay for it."

JasperL said:

Taxes.



That's not the part of the point that was inaccurate. "Unfunded liability" does not mean, "we don't or won't have the funds in the future to pay for it."

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Another subject you know nothing about but for some reason believe you do. There currently isn't enough money to cover the long term liability and as the current deficit shows SS and Medicare are costing more than the revenue received thus borrowing, printing has been taking place

Unfunded Liabilities Definition and Examples

code1211 said:

I have no idea what the "dispersed programs controlled at the local level" were or how they apply to anything I posted.

Social Security collapsing if we "let it"? The whole point is that as Ponzi Scheme that is prone to collapse without Herculean efforts to support it.

It it had been set up like a 401K, it would be both self supporting and an income generator.

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The point was whatever programs existed for retirement and healthcare were FAILING seniors when SS and Medicare passed. And the herculean task to save SS is to raise taxes. That's doable.

And as to life expectancy, the Social Security people have some discussion of my point.

Social Security History

Checkerboard Strangler said:

Actuaries make adjustments to insurance and pension funds all the time.
The actuarial adjustment Social Security is known for is the income cap, which today stands somewhere around $150k per year.
Adjust it to $250K per year and the fund will be solvent through 2100.

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Actually, I’m pretty sure that the income cap is actually lower that that.

We have known for years that a small rise in the SSA tax and a removal of the income cap (another benefit for the 1% in its current form) will stabilize the system for a century.

This is exactly the same fix Ronald Reagan applied in the early 1980’s. And it worked as planned. Predictions at the time were that we would face this issue again right about now.

Conservative said:

Another subject you know nothing about but for some reason believe you do. There currently isn't enough money to cover the long term liability and as the current deficit shows SS and Medicare are costing more than the revenue received thus borrowing, printing has been taking place

Unfunded Liabilities Definition and Examples

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Yes, and raising payroll taxes like we did in the Reagan era is now UNPOSSIBLE cause REASONS!!! IT'S A CRISIS!!!

Of course we cut taxes by $2 trillion and no one blinks an eye over the DEFICIT!!!!

JasperL said:

The point was whatever programs existed for retirement and healthcare were FAILING seniors when SS and Medicare passed. And the herculean task to save SS is to raise taxes. That's doable.

And as to life expectancy, the Social Security people have some discussion of my point.

Social Security History

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The tables in your link support what I posted. There are more retirees all the time due to folks living longer.

The Current system requires a huge outlay on an annual basis to support it.

A 401K modeled system would require no Federal Treasury outlay and would instead generate taxes TO the Federal Treasury.

The 401k Model would also deliver huge sums of money to heirs surviving the deceased benefit recipients.

The 401K model would cost our treasury nothing, would deliver a superior benefit to heirs and would maintain the benefits paid to the retirees.

Basing SS on a 401K Model would provide superior outcomes and carry no cost to the government to pay cash to beneficiaries.

In my personal case, a 401K model would have delivered a far more lucrative monthly payment than the Ponzi Scheme currently in use.

Most of Budget Goes Toward Defense, Social Security, and Major Health Programs | Center on Budget and Policy Priorities

JasperL said:

Yes, and raising payroll taxes like we did in the Reagan era is now UNPOSSIBLE cause REASONS!!! IT'S A CRISIS!!!

Of course we cut taxes by $2 trillion and no one blinks an eye over the DEFICIT!!!!

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What the hell does FIT have to do with SS and Medicare? Raising payroll taxes was required due to misuse and abuse of SS and Medicare funds by Congress and previous Administrations. Raising taxes is always the solution radicals like you have and yet you still ignore that 44% of income earning Americans pay ZERO in Federal Income Taxes! You and the rest of the left are the most poorly informed people in this country. Doesn't matter to you that FICA funds SS and Medicare and FICA funds were used to fund other gov't expense items so now we have to raise taxes again to cover that abuse. By all means keep ignoring gov't abuse and cover it up by taxing the rich more!

JasperL said:

Taxes.



That's not the part of the point that was inaccurate. "Unfunded liability" does not mean, "we don't or won't have the funds in the future to pay for it."

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sorry course, you can parse that all you want. But, that won’t change the fact that we don’t have the funds to pay for it now unless something changes.

Perhaps there is a genie in a bottle somewhere who will conjure up these funds.

Conservative said:

What the hell does FIT have to do with SS and Medicare? Raising payroll taxes was required due to misuse and abuse of SS and Medicare funds by Congress and previous Administrations. Raising taxes is always the solution radicals like you have and yet you still ignore that 44% of income earning Americans pay ZERO in Federal Income Taxes! You and the rest of the left are the most poorly informed people in this country. Doesn't matter to you that FICA funds SS and Medicare and FICA funds were used to fund other gov't expense items so now we have to raise taxes again to cover that abuse. By all means keep ignoring gov't abuse and cover it up by taxing the rich more!

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UYou don’t have a leg to stand on when you attack people as “uninformed” while making the sort of knee jerk false claim that is so typical of the uninformed talk radio right.

In reality, the actuarial model for Social Security has been very accurate.

The popular right wing rant about borrowing against the trust fund is idiotic. bond issued against the trust fund are securities and have value. the will be paid or refinanced, just as any other debt would. whether the government borrows from itself, or it goes to Wall Street does not matter.

And there would be a lot less need t9 borrow were it not for the borrow and spend policies of every GOP president since Reagan.

TomFitz said:

UYou don’t have a leg to stand on when you attack people as “uninformed” while making the sort of knee jerk false claim that is so typical of the uninformed talk radio right.

In reality, the actuarial model for Social Security has been very accurate.

The popular right wing rant about borrowing against the trust fund is idiotic. bond issued against the trust fund are securities and have value. the will be paid or refinanced, just as any other debt would. whether the government borrows from itself, or it goes to Wall Street does not matter.

And there would be a lot less need t9 borrow were it not for the borrow and spend policies of every GOP president since Reagan.

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Oh, my, please, where did you get your education? This is a walking advertisement for school vouchers and school choice. You couldn't be more poorly informed. another liberal out of touch with reality with no understanding of the line items in the budget and no understanding of SS and Medicare. Borrow and spend? Tell me who borrowed and spent

Reagan 1.7 trillion added to the debt in 8 years
GHW Bush 1.4 trillion in 4 years
GW Bush 4.9 trillion in 8 years

Total Republicans 8.0 trillion in 20 years

Clinton 1.4 trillion in 8 years
Obama 9.3 trillion in 8 years

Total Democrats 10.7 trillion in 16 years.

Doesn't look like facts and math have any place in that liberal world in which you live

Debt to the Penny (Daily History Search Application)

Government - Historical Debt Outstanding - Annual 2000 - 2018

code1211 said:

The tables in your link support what I posted. There are more retirees all the time due to folks living longer.

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They do but it's not nearly the difference you pointed to earlier. That's the talking point used by people who want to cut SS or at least criticize it and it ignores that the big difference in longevity is mostly the huge drop since then of infant mortality.

The Current system requires a huge outlay on an annual basis to support it.

A 401K modeled system would require no Federal Treasury outlay and would instead generate taxes TO the Federal Treasury.

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I'll end it there, because we don't have a 401(k) model, we have SS. When someone presents a detailed plan to transition to that, and figures out how to pay for it, I promise I'll listen with an open mind. For some reason, that's not happened...

TomFitz said:

sorry course, you can parse that all you want. But, that won’t change the fact that we don’t have the funds to pay for it now unless something changes.

Perhaps there is a genie in a bottle somewhere who will conjure up these funds.

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No need for a genie - math will give us the answer about what kind of tax increases we need to fund it for the next 75 years. I don't know why people think this is magic.

OR, OR, OR, we can cut benefits and use math to tell us how much. OR we can do a little of both. SS is really not a problem. The only problem is we give out tax cuts of $200 billion/year, add it to the deficit, and no one gives a flying ****, because the money boys who own Congress all got their candy. The problem is for poor seniors on SS who don't have private jets and lobbyists and who don't funnel $10 million or whatever into campaigns, no one wants to pay for what we promised and we owe.

JasperL said:

They do but it's not nearly the difference you pointed to earlier. That's the talking point used by people who want to cut SS or at least criticize it and it ignores that the big difference in longevity is mostly the huge drop since then of infant mortality.



I'll end it there, because we don't have a 401(k) model, we have SS. When someone presents a detailed plan to transition to that, and figures out how to pay for it, I promise I'll listen with an open mind. For some reason, that's not happened...

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Don't you just hate it when a poster edits your post for no other reason than to change the meaning and then presents it as if not editing was done?

The plan was presented in the 90's.

Gingrich explained the plan, compared the benefits, suggested that the systems be allowed to run side by side and noted that the current system would be so unpopular that it would die "on the vine".

Every one of the propaganda outlets in our mass media "reported" that the Republicans wanted Social Security to die on the vine.

This was the first time that I noticed that our mass media had become a propaganda machine to CREATE opinion as opposed to an industry to distribute news in the form of accurate reporting.

It was an awakening for me.

Social Security was not mentioned in the Constitution or in the Declaration. It is a service distributed in a changing world that can be improved and should be improved.

It can deliver a better benefit AND do so while generating an income instead of an outlay. Why not take advantage of the possibilities?

Checkerboard Strangler said:

--A standard tax hike isn't necessary, only a bump in the income cap. Raise it to $250K per year, as in: The first 250 you make every year is SS taxed but everything over that isn't.
That will keep it in the black till the end of the century.

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That's a pretty steep tax hike for middle class earners.
Would that apply to businesses as well? A tax hike that steep might be a job killer,no?

As you know raising the cap would also raise the amount of benefits. Would you propose keep the cap for benefit purposes?

Conservative said:

Raising payroll taxes was required due to misuse and abuse of SS and Medicare funds by Congress and previous Administrations.

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This is a lie, or intellectual dishonesty (which means you don't know any better) at the very least. Raising payroll taxes was the solution from the Reagan administration to deal with the fact that demographic changes were going to create a long term shortfall. The solution was rather effective: increase taxes to create a surplus, and then convert the surplus funds into a special purpose Treasury bond that earns interest. Once the boomers retire, the trust fund would be drawn upon until exhaustion, and the system would once again function strictly as a pay-go.

Your welcome for the free education. Perhaps i won't have to explain this to you in the future (doubt it).

KLATTU said:

That's a pretty steep tax hike for middle class earners.
Would that apply to businesses as well? A tax hike that steep might be a job killer,no?

As you know raising the cap would also raise the amount of benefits. Would you propose keep the cap for benefit purposes?

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Do you remember when Reagan raised the cap?
What happened then?
We're not solving interstellar space travel here, or inventing a new species of life in the animal kingdom, we're doing an actuarial adjustment to a pension and insurance fund.

It's been done before, successfully. Drag out the procedure that was used last time and do the same thing.
Fix the goddamn cap.

Kushinator said:

This is a lie, or intellectual dishonesty (which means you don't know any better) at the very least. Raising payroll taxes was the solution from the Reagan administration to deal with the fact that demographic changes were going to create a long term shortfall. The solution was rather effective: increase taxes to create a surplus, and then convert the surplus funds into a special purpose Treasury bond that earns interest. Once the boomers retire, the trust fund would be drawn upon until exhaustion, and the system would once again function strictly as a pay-go.

Your welcome for the free education. Perhaps i won't have to explain this to you in the future (doubt it).

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So Reagan raised FEDERAL INCOME TAXES to refund SS and Medicare?? OMG, you truly are one of the most misinformed people in this forum. You continue to show your arrogance as well as your ignorance on this issue

Checkerboard Strangler said:

Do you remember when Reagan raised the cap?
What happened then?
We're not solving interstellar space travel here, or inventing a new species of life in the animal kingdom, we're doing an actuarial adjustment to a pension and insurance fund.

It's been done before, successfully. Drag out the procedure that was used last time and do the same thing.
Fix the goddamn cap.

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Reagan did indeed raise the cap but had nothing to do with Federal Income taxes which you radicals now want to use to refund SS and Medicare. Those that don't collect SS and Medicare didn't pay for that increase.

Conservative said:

So Reagan raised FEDERAL INCOME TAXES to refund SS and Medicare??

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You clearly suffer from a severe reading comprehension deficiency:

Kushinator said:

Raising payroll taxes was the solution from the Reagan administration to deal with the fact that demographic changes were going to create a long term shortfall...

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The poster child (Conservative) for the Dunning–Kruger effect has another opinion.