87% of Americans Want Politicians To Do Something Before Social Security Runs Out of Money

[cpwill]

Well yes I do want you to think it out.

Social Security isn't going to be solved by bumper sticker mentality that puts platitudes over people. So ya, I expect if you are going to put forth an OP that says end SS and take it private, that you will of thought about timeline, different age groups, how it's to be accomplished, and the costs involved.

Things need to be done for social security, we agree. But the math **IS** important because you payout existing recipients and refund to existing working isn't feasible.

WW

I went through and did a rough version of the math a few years ago in my own proposal. It required a large amount of debt to cover the transition, which I paid off by taxing retirement accounts 50% at the death of both the retiree and spouse.

Thanks to both parties engaging in deficit spending like insane fools since then, we may have moved out of a window in which we could have taken on sizeable additional debt - even if it was tied to a guaranteed income stream.

Both parties are currently de facto running on cutting benefits (as nether is proposing to reform current law). In reality we will be dealing with this about the same time we have to deal with Medicare funding, meaning we are likely going to have no choice but to cut benefits (harming retirees) and raise taxes (harming current workers). That's what happens when you refuse to address a problem until all you have left are bad solutions.

One place I might note a slight disagreement with you, here: as I understand it, employer contributions to FICA tend to come out of monies allocated for Labor Cost; meaning the employee is generally paying that side through reduced compensation.

 

[AZRWinger]

The overwhelming majority of the increase in life expectancy came from reducing death while below the age of 30. Life expectancy after the age of 65 has only gone up a little so most of the increase is in the number of people paying in. One of the biggest drains are people receiving full benefits well before the age of 65 for disabilities. For the most part this is a racket especially in the Southern States where it has become common practice. In other words the BS about people living longer being the downfall of SS is way overblown. This benefit should be paid out, as intended, to just those with truly severe handicaps.

Remember when Republicans insisted that SS was Communism. They spent years trying to get it abolished on this basis until it became so ingrained in our society that to get rid of it outright would have the death of the party. Then the party became more moderate and strived to keep it viable. Now they are back at it but realize that they they need to get rid of it in a covert operation.

Regan was a huge fan of SS. The bipartisan committee during his presidency that made changes to save it did a good job except for one thing they did not anticipate. A greater and greater percentage of our total earnings are going to the wealthy so less and less of the wages earned were subject to SS taxation. If income was still distributed that same as in the early 80s then we would be almost OK. This is why we need to tax a much greater percentage of the wealthy's earnings in order to maintain it.

The problem is the reduction in the ratio of workers to beneficiaries. A few years after SS was passed the ratio was nearly 160 to 1. Currently it is 3 to 1; heading towards 2 to 1. Like all Ponzi schemes SS is collapsing when new investment isn't enough to meet payments to early investors. The collapse has nothing to do with the so-called maldistribution of wealth.

Revenue shortfalls are made up by cashing the IOU in the so-called trust fund with current year tax revenues. The trend will only accelerate with the decline in the worker beneficiary ratio. The trust fund is forecast to be exhausted no later than 2030 by the trustees.

 

[Mike1950]

The problem is the reduction in the ratio of workers to beneficiaries. A few years after SS was passed the ratio was nearly 160 to 1. Currently it is 3 to 1; heading towards 2 to 1. Like all Ponzi schemes SS is collapsing when new investment isn't enough to meet payments to early investors. The collapse has nothing to do with the so-called maldistribution of wealth.

Revenue shortfalls are made up by cashing the IOU in the so-called trust fund with current year tax revenues. The trend will only accelerate with the decline in the worker beneficiary ratio. The trust fund is forecast to be exhausted no later than 2030 by the trustees.

When they changed SS under Reagan they knew all of this was going to happen and took it into account. They had all of the data about the baby boom generation and the stress it would put on the system. They said as much. The huge influx of people who would be retiring all at once was the very reason for the changes.

 

[AZRWinger]

When they changed SS under Reagan they knew all of this was going to happen and took it into account. They had all of the data about the baby boom generation and the stress it would put on the system. They said as much. The huge influx of people who would be retiring all at once was the very reason for the changes.

SS is in a death spiral due to a structural fault. By law surplus revenues could only be "invested" in special purpose bonds owned by the Federal government. These are commonly known as IOU.

Funds from the phony sale of SS bonds were added to the current year general revenue, spent. Now that the beneficiary to worker ratio has dropped, ending surpluses, the SS bonds are being presented to make up for the shortfall in revenue to meet current obligations. SS is mandatory spending meaning it gets first call on general revenue even over defense. When the trust fund is exhausted in 10 years or less according to trustees, benefits will have to be slashed by at least 20% or taxes increased to crushing levels.

President George W Bush sounded the alarm on SS insolvency but of course Democrats screamed about turning granny into the street. Hating on Dubya won the day over fiscal sanity.

 

[bomberfox]

Or we could realize a sovereign currency issuer cant run out of money lol.