Social Security: Obama and the Democrats Dodge Their Debris
The most recent Social Security Trustees report, issued last year based on the situation at the end of 2009, told us the following:
Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. … This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.
As already seen, the economy in 2010 did not improve in a way that would have helped the Social Security system retain its last shreds of solvency. As a result, the Congressional Budget Office now projects Social Security cash deficits as far as the eye can see, rising from over $40 billion in 2011 to over $100 billion by 2021. Until recently, today’s workers were funding the retirements of today’s retirees. Now generations yet unborn have also been conscripted for that same purpose.
Yet the Obama administration, including the aforementioned, and now about-facing Jack Lew, insists that Social Security must be off-limits in any deficit discussions because, as Lew wrote in response to a USA Today editorial, “Social Security benefits are entirely self-financing.” Suddenly, the “trust fund” which Lew’s 2000 OMB correctly asserted “do(es) not consist of economic assets” is what will in 2011 and beyond enable the system to “have adequate resources to pay full benefits for the next 26 years.”
The 2000 version of Jack Lew was right. Politicians raided Social Security for decades by “borrowing” its surpluses and squandering over $2 trillion. But that wasn’t enough. Except for a brief, primarily Republican-inspired period around the turn of the century, Democratic and Republican administrations have continually added to the nation’s debt load. The Obama administration has taken it to a horrifying new level. By September 2011, it will have rung up over $4 trillion in additional deficits in three fiscal years (it gets responsibility for fiscal 2009 because, as noted earlier, Democrats created the POR economy before that fiscal year began). It has also increased the national debt by roughly $5 trillion.
So, if we’re to believe Team Obama, the 2011 version of Jack Lew, and Harry Reid — who doesn’t see a need to deal with Social Security for 20 years — a government whose nonpublic debt is projected to be within a whisker of what many experts believe is the code-red level of 90% of GDP in 10 years is automatically going to be able to continue to fund Social Security’s cash deficits for the next 26 years. Horse manure.
These people know the truth, and they’re deliberately dodging it. They’re cynically hoping to ride a wave of ginned-up opposition to any and all entitlement reform in hopes of getting across the finish line in the 2012 elections. I don’t believe I’ve ever seen a more cynical strategy on a problem so important in my lifetime.
I hope they fail.
I get very angry when I think about the points raised in this article. There are many seniors and near-seniors that claim they were “promised” Social Security (and Medicare benefits too) and by God they’re going to collect it. Basically the Country be Damned. The political class (mostly Progressives, Democrats) are totally committed to the Socialist utopia fantasy of the socialist welfare state and are not going to give an inch to improve the solvency of the system..again the Country be Damned. These leftists continually dredge up the class warfare Alinsky-inspired arguments to keep real reforms from happening. Many folks don’t even bother saving for their retirement and a completely dependent on SS. Lastly why doesn’t the Government require the same Accounting rules that they apply to corporations to the Government itself. That would show the true magnitude of the crisis we are facing.
The elephant looks a bit different when you are nearing 65 as I am. While I recognize the system is set up to pay out benefits to individuals far in excess of their contributions over the years and may need to be modified, still I don’t think it is unreasonable for current and prospective retirees nearing retirement to expect something in return. If for no other reason, it is a cruel trick to promise (represent, if you prefer) that a retirement benefit will be available then yank it away at the last minute for whatever reason.
I don’t think it’s really necessary to do that sort of thing to any great extent, however. All that I’ve read on the subject seems to indicate that there are available fixes that will not immediately impact current retirees. A slow adjustment over time is vastly preferable to a drastic cut in benefits or a sudden crash.
The problem is the Democrats think of SS as their re-elect machine, and it has been for 60 years or so. They won’t let any compromise through as long as the issue promises to benefit them in the next election. Only when that calculus changes can we do what’s necessary. Even if the Democrats are in the minority, change of the type needed will be difficult and dangerous for the Republicans and conservatives and may well be reversed after the succeeding election.
the statists are insane but not stupid; they realize that they must maintain the illusion of social security so the current crop of eligible benefactors will receive checks to keep the smoke screen going
the last thing they want are hordes of seniors making a ruckus and rocking the boat
The Kleptocrats’ answer will be to crank up the printing press and print dollars like it was 2008 and they were printing “hopenchange” bumper stickers again. They will pay us off, in nominal terms anyway, the “benefits” we were all promised. In REAL terms, we will be getting less and less and less as inflation chews away at our living standards like a bunch of community organizers hacking into a crate of blank voter registration cards. Of course, most of us AREN’T stupid and will notice the increasing inflation, but the Kleptocrats will blame the greed of big food and big oil for the problem (nothing is ever THEIR fault.) They will demand higher taxes to fix things which they will turn around and flush down new ratholes. Lather, rinse and repeat.
This is and was SOP for the lousy lying fraudulent Party of the People for decades.
“While I recognize the system is set up to pay out benefits to individuals far in excess of their contributions over the years”
I dunno where you got that information, but I’d sure like to see it. About a decade ago, after receiving one of those summary of benefits statements from SS, I calculated how much I’d put into SS at the rate they were confiscating at that time and then how much I’d get back from age 65 to 80 or 85 (assuming I’d die by then) at the rate they were paying and I wasn’t getting back more than 5% of what I put in. I dont believe your assertion for a minute.
Well I just happen to have my most recent statement handy. It says I have contributed $40,246 and my employers $42,773 over the years; that is $83,019 total contributions (OASI only, no Medicare). It further states that I am eligible for a benefit of $1880 per month at my full retirement age of 66.
Now let’s do some math. $1880 per month is $22,560 per year. If we didvide that into $83,019, I will run through my contributions in about 3.67 years, or 3 years and 8 months. I don’t have the mortality information handy, but certainly the life expectancy of a 66 year old male in good health is more like 15 years than 3 years 8 months.
The calculation does not include interest on the contributions. Perhaps the payout would be more proportional to the contributions with interest included in the computation, but with the data I have it can’t be done.
But if we assume that contributions were equal over my 44 year working life — highly unrealstic –, and interest were 5%, then total interest would be something like $45,000 — another 2 years of payouts and still well short of my life expectancy at this point.
Not being an actuary, I can’t allow for the effect of premature deaths, benefits to spouses, survivors, etc, but from my perspective, it looks like a good deal for what I and my employers have contributed and it is indexed to (wage) inflation to boot.
Got your statement handy?
You’re right, by god I intend to collect as much as I can of the hundreds of thousands of dollars my spouse and I have had confiscated for decades for the clearly defined and specific purpose of social security pensions, stated many thousands of times by many thousands of public officials. That “investment”, btw, if adjusted for inflation and with extremely modest rates of return would amount to well over a million dollars. And my spouse and I are not unique. Perhaps we have “invested” a bit more than average, but not much.
So although I can understand your desire to steal it from us so that you can spend it on yourself, I am one of the ones who intend to frustrate your greed by any means necessary. Any means necessary.
proreason;
The money that was confiscated from you went to the previous generation of retirees. While it may be satisfying to rob those who didn’t rob from you, the politicians don’t have your stolen money.
We all know that. We aren’t fools.
It still doesn’t give some greedy bastard like rrbs or progressives the right to declare they will fix the problems they created themselves by making the obligations go away.
All of a sudden, you see, it’s become the problem of the people who have had the trillions confiscated…we are un-american…not the problem of the people who want to payoff government workers, unions, and blow trillions on boondoggles and bribes.
Don’t be fooled. That’s exactly the strategy. Trillions for cake, not one cent for the elderly who weren’t able to save for themselves because of the 45 year 15% confiscation.
There will be a real war over this if they try it.
Would it be to much to ask then to throw the politicians that did steal the money to be thrown in prison. Ponzi scheme. I would say any Rep. or Dem. that has been in office for 10 years or more.
rrbs, I understand your frustration but don’t blame the seniors. I’m planning retirement and I’ve saved toward it but SS was part of my calculation. I’ve regarded it, rightly, as part of my retirement income. That’s what it was designed to be. The blame lies squarely on the shoulders of the political class that has used the SS program to buy votes through class warfare and welfare. They have used it to their ends at your cost.
The Republicans need to leave Social Security alone. Eliminate the Departments of Education, Energy, HUD, Transportation, Agriculture, Labor, and the wasteful programs in the rest. Cut the remaining programs by 15%. Cut the executive branch spending 15% and Congressional spending by 50%. Then take on entitlements.
yes, this is the right approach.
How about going after the $1 trillion that little lenin has added to the budget in two years. Next, how about going after the 50% fat that was in the budget before he added his $1 trillion.
At that point, then and only then, turn Medicare into a viable program by making it into a fixed payment system rather than one that promises insane unbounded “benefits” for bounded payments. At the same time, fix the trivial issues in the SS system, which everybody knows can and will be corrected by tweaking the retirment age.
But don’t even touch Medicare and SS until the obscene, corrupt, useless spending on all of the other unnecessary political slush-fund departments are eliminated.
If the Republicans make “entitlement reform” (Newspeak. Calling programs that people have funded to the tune of hundreds of thousands of their own money “entitlements” is the classic political lie of all time.) the top priority, they are fools. It’s exactly what the marxists want. Exactly.
proreason, *IF* Terry Anderson’s proposals were enacted, I would support a measure that would sell federal lands and pay back to each worker the non-inflation adjusted sum of $ he had paid into SS. Yes, we all just got screwed (I’m 60) but I think the situation is THAT BAD.
Assuming Terry’s cuts, a buyout of SS and a revamping of Medicare as you suggest lead to a balanced budget and real deficit reduction, the resulting $ benefits (from economic activity, lower inflation, etc.) would pretty much offset the loss in total SS reimbursement.
Plus, I don’t want SS tweaked. I want it *ended.*
I could support ending SS, but only if the NPV of the confiscated money of every person who has been forced to pay into it was returned to the people who had it confiscated, in inflated dollars and with interest.
But I also think there is a tremendous amount of false information about Social Security. First, it is hardly in disastrous shape, and part of the reason that its has problems is due to increasing life spans. Another problem is that is has a disability component that has rampant fraud. In fact, an entire industry has grown up to rake in the fraud. The payouts should simply be adjusted to fit the current demographics and life spans and the fraud should be eliminated. The general complaint about the lifespan issue is that people think they should still be able to retire at 65. Well, there is no question that the “collection time” has been steadily increasing from the beginning. It’s conceivable that an average 20-year old today could collect for 25 or 30 years whereas our parents more likely collected for about 10 years. It doesn’t make sense and it has to be corrected.
If the program os modernized it can easily be made viable for many decades. The problem with disbanding it is that the problem it corrected in the first place will arise again very quickly. So that isn’t going to happen.
We can do that, but it has to be done in phases, because there isn’t enough cash in circulation to facilitate the necessary transactions in a single year.
I agree that the Departments you list for elimination plus other spending cuts are necessary. Unfortunately, such cuts are woefully insufficient,, even though they may appear to be quite substantial. So-called entitlements (SS, Medicare, and other miscellaneous) plus interest on the debt equal the entire revenue of the Federal government. Modifications to SS and Medicare are absolutely required for fiscal sanity.
Every “drop” in the bucket adds up until the bucket is filled. Cutting useless departments, cutting aid to countries that hate us, etc., may all be drops, but drops add up.
On a side note, a cottage industry may spring up from all the feds thrown out of work. We need to make adjustments (we can’t go on as we have) and it might as well be now.
Social Security is the pinnacle of success for special-interest legislation and politicking. FDR engineered a system by which a growing and inherently vulnerable sector of our population could be induced to become dependent on the government. Simultaneously, other developments in tax law provided working-age Americans witl reasons to retreat from willing support of their elderly relatives. Consider the home-mortgage interest deduction in this light; its consequences might surprise you.
This is what Democrats do. It’s what they’ve done since the Wilson Administration. And it’s why electing Democrats to high office is always a mistake.
Got to admit, it’s a winning tactic.
Dem message to the “poor”: You have to vote for us or the evil Repubs will cut off your money.
Dem message to the “old”: You have to vote for us or the evil Repubs will cut off your money.
They are the masters of tell the people what they want to hear. I always recall a town hall campaign stop in 1992 where Bill Clinton seemed to answer every question with “I feel your pain, and that’s my #1 priority the second I get elected.” I was dumbfounded that noone was listening to his answers to the other folks’ questions, just to their own.
The redemption of the Treasury bonds in the Social Security trust fund represents a conversion of funding via the payroll tax to funding Social Security from general revenues. Unfortunately, the general revenues rely most heavily on the federal income tax. Not only is the federal income tax code a nightmare of complexity, but the Congressmen who write it, such as Congressman Rangel, are among the most corrupt in Congress.
The “Trust Fund” is, always has been, and always will be a fiction. The Federal Government, as the SOURCE of money in our system, cannot have a trust fund in the usual sense. A trust fund owns things which produce, i.e., the means of production. A government owning the means of production is more or less a definition of Communism. We have eschewed that model here for very good reasons.
And, it would not matter, anyway. It’s a quasi-closed system. We cannot just magically pull money out from under the mattress, distribute it far and wide, and have the goods and services it would buy magically appear. If we could, we might as well just crank up the printing presses and make everyone a millionaire. Money is a merely a medium. It is what we use to trade in and from the existing pool of goods and services. If you give one class of citizens the wherewithal to drink more from the pool, the entire pool level goes down, and others have to make do with less.
Production is the key, not valueless shifting of paper representations of wealth in a zero sum game. Increase production, and the pool expands, to everyone’s benefit. Anything else is just so much sloshing of the waters.
Just tell everybody that deficits don’t matter, there is no inflation, and we’ve turned the corner on unemployment. They’ll be happy watching their taxes go up, their savings eroded, and enjoying the time with their friends and neighbors in the unemployment line.
Meanwhile, low tax states are doing better than the rest, but why let annoying facts get in the way of a wonderful theory?
“I get very angry when I think about the points raised in this article. There are many seniors and near-seniors that claim they were “promised” Social Security (and Medicare benefits too) and by God they’re going to collect it. Basically the Country be Damned.”
Well I’m one of those near-seniors and while I really don’t think I have a ‘country be damned’ attitude, I do have a ‘wasteful giveaway my money programs be damned to hell and back’.
Before I would consider voluntarily relinquishing one penny that I’ve paid in I’d have to see :
1. the entire budget slashed by 15% minimum.
2. immediate end to unearned income credit.
3. corporate tax loopholes closed.
4. illegal immigrants denied any welfare/education.
5. all foreign aid stopped.
6. congressmens lifetime welfare stopped..put them in Social Security program
7. public assistance limited to 1 year all recipients subject to drug test
- earmarks
- medicare fraud
- platinum government pensions
- gauranteed civil service raises
- Pelosi’s plane, et al
- the Dept of Education, the EPA, the Commerce Dept, Dept of Energy
- the white house’s unconstitutional “czars”
- no competition bids
- military waste and fraud
- redundant departments (as many as 50 doing the same thing)
- GE tax exemptions (I oppose Corporate taxes, but if you are going to have them, they shouldn’t be fascist)
- umpteen presidential vacations per year
- privatise federal lands and buildings
- Unaffordable Health Care
- Unspent stick-it-to-us funds
- Unspent TARP funds
- Fannie Mae and Freddi Mac funding
- funding for NPR, PBS, “the arts” and thousands of other boondoggles
After that, maybe consider reforming the only two government programs other than the military that do any good.
rrbs, I’m not sure what your definition of “seniors and near-seniors” would be. I can only assume you’re referring to those who have worked and been forcibly coerced into paying substantial sums into the current system for decades. How you get “Country be Damned” out of their expectation that the system now work as advertised is a little beyond me. In short, I think you might want to eliminate those folks from your list of culprits here.
The fact is that any overhaul of the SS system that stands even a remote chance of averting irretrievable breakdown must honor the contract government has struck with “seniors and near-seniors”. Paul Ryan’s proposal addresses this by keeping the current system intact for those 55 and over. Below that age, however, necessity dictates that individuals begin making financial plans that do not include being supported by other working Taxpayers well into their 70s or early 80s. Whether by legislative mandate or by a fiscally calamitous default, that is not going to happen.
Class warfare can only be waged on an ignorant electorate. Unfortunately, that is precisely the electorate we’re currently working with (see the recent unpleasantness in late 2008). The simple facts must be made widely known: there is no “fund”; Social Security WAS NOT DESIGNED FOR and, therefore, won’t survive the current demographic trends; SSDI waste, fraud and abuse is rampant; the expense of running the system is cost-prohibitive; those nearing retirement age, who don’t have time to make alternate arrangements, must receive their benefits. On that basis, voters can be made to understand that the current system is non-viable and, therefore, must be terminated. Same goes for Medicare/Medicaid.
i understand the sentiment but why would any statist voluntarily deprive himself of one of his gravy trains?
we must always remember what social security is— it is a slush fund/”petty” cash drawer that is used for all the shenanigans– and it must be refilled on an annual basis as there are no reserves; it is all a bluff
For the record, I am a fiscally conservative, constitutionalist republican with very strong libertarian, tea party leanings. I must say however, as someone whose employer, as well as myself, have been required to pay a combined total of 12% of MY income into a government run retirement fund, I strongly resent Social Security being referred to as an entitlement program. Social Security was meant to ensure that every working person had some resources in retirement. The assumption being that there are those among us not disciplined enough to provide for themselves. Social Security is in trouble not because of a shortage of contributions. It is in trouble because the politicians couldn’t stand it any longer that there was a huge amount of dollars out of their reach. Further, the current crisis is being exacerbated by the large number of retiring baby boomers. So the same greedy, sleazies are fooling you into believing that the funds are not in fact yours but some kind of entitlement that they need to place further from your reach. Don’t fall for BS. Think of the retiring boomers as a sort of a bubble that will pass as they die off. If the prostititions have their way, we would welcome the rules being changed to reduce the likelihood of ever recouping anywhere near what we have contributed. The politicians need to get there sweaty, grimy paws out of the cookie jar and rededicate Social Security all funds to pay only what it originally meant to pay. If you really want to get upset, actually read the entire social security act. Specifically for all the extra programs that it pays for beyond its original intent. Our corrupt representatives have turned Social Security into the worlds largest Ponzi scheme and anyone who has had SS deducted from their pay is the victim. The Social Security Fund should be solvent. Imagine a Mutual Fund company that was guaranteed 12% of every tax payer’s income from their first job until some 40-45 years later when they retire. Also, if that person should die without a spouse or children under 18, the mutual fund company could keep all the contributions. Anything left when the spouse dies or the children reach 18 would also allow the company to keep any left over funds. This would be the richest and largest accumulation of wealth on the planet. Ask Jack Bogel or anyone who understands mutual funds. So please, don’t be a fool’s fool. Social Security is not an entitlement. In it’s current form it is a scam whose operators should be imprisoned just like Bernie Madoff and restitution guaranteed.
“It is in trouble because the politicians couldn’t stand it any longer that there was a huge amount of dollars out of their reach.”
It’s not just Social Security they’re after. If you have a pension or savings or valuable property, good luck keeping it, because if taxes don’t get it inflation will. Just pray that the laws against age discrimination and mandatory retirement don’t take your job, because retirement is looking less and less like a real option for anyone who works for a living.
Soylent Green is people.
Excellent Point on “Entitlement”.
We have all paid into it. It is ours.
Not THEIRS to squander away..
For us to sit back and gratefully lap up the “entitlement” that we all paid 15% of our incomes to is outrageous.
This question should be put to every politician running for any future office…
How is Social Security an “entitlement” when we paid 15% into it for our own retirement.
Very good post… John. I too, share your libertarian feelings.
such a kick to see the ignoramouses at pjmedia and tea party rallies get angry at politicians who actually want to cut the deficit talk about the need to put their social security and medicare bennies on the table.
fyi, there ARE progressive answers to the “entitlement funding crisis.” eliminate the earnings cap on the payroll tax and raise the retirement age for non-blue collar workers a little bit and you solve the problem of long-term social security funding for all time. create a single-payer Medicare for All program with generous benefits and you solve the Medicare funding crisis for all time as well.
Comforting to see that the level of “progressive” comprehension and “solutions” remain the same.
Try to comprehend: if you’ve already paid for it (i.e., for decades), it’s not a “benefit”.
“Progressive” answers always seem to work out the same: increase taxes, stick it to the “non-blue collar workers” (i.e., tax the so-called “rich” MORE), collectivize commodity purchases, apply some magical thinking and the problem is solved.
oh yeh, making the Medicare program with it’s $54 trillion unfunded liabilities universal is a GREAT idea.
Progressives are really smart.
Buddy, Medicare is the PROBLEM with health care, not the solution. To fix it (since it will never be shut down), the “benefits” have to be bounded realistically (as Paul Ryan’s suggestion does), not unbounded, as they are today. Anybody with a drop of common sense can see that.
But even Medicare isn’t the biggest problem. Bigger, BY FAR, is that current out-of-control, insane, country killing spending on booddoggle programs whose only purpose is to be bribes to get politicians reelected. Medicare is less than 10% of the federal budget. More than 50% is stuff other than SS and Mediare. Even without considering military spending, the biggest part is the corrupt and useless part. Or in other words…the part that “progressives” love.
the unfunded liabilities would get funded when healthier non-retirees and their employers start paying their health care dollars into Medicare, rather than into insurance company coffers. And such a system would be INFINATELY easier to administer for providers and consumers than the current patchwork system, made even more complex by obamacare.
Government fraud and inefficiency is multiples of whatever profits insurers make. The same is true of every single service government provides. It is alway the least efficient, highest cost, and most fraudulent provider. It’s a built in function of government.
To hold insurer’s “profits” down, if you are looney enough to consider that a worthy aim, the approach should be to encourage high deductable plans. The cost of administering plans that have 10 times the paper work because of knee scrapes and sniffles unquestionably drives prices up, in addition to masking the true price of services from the consumer.
The absolute worst approach is to have government involved.
But it’s not about health, longevity, quality, or price. It’s about power. That’s why progressives love it.
“create a single-payer Medicare for All program with generous benefits and you solve the Medicare funding crisis for all time as well.”
And create a bigger, nastier mess in the process.
We could solve Medicare by sunsetting it, as well. That has the advantage of backing away from the people being little more than tax-generating livestock.
But that’s not “progressive”, is it?
“fyi, there ARE progressive answers to the “entitlement funding crisis.” eliminate the earnings cap on the payroll tax and raise the retirement age for non-blue collar workers a little bit and you solve the problem of long-term social security funding for all time.”
So, your “progressive” solutions are:
1. Raise taxes
2. Raise the retirement age for “non-blue collar workers”, i.e. punish the rich.
Funny how these are ALWAYS the solution to any problem according to a progressive, especially in the case of funding the Social Security ponzi scheme that is built around an outdated population model from the 1930′s. Well done, Mark.
Since the problem with SS and Medicare is a lack of funds due in great part to the aging baby boomers, why shouldn’t raising taxes (a VERY small amount) be a reasonable solution to the problem? Stating reflexive canards like “Funny how these are ALWAYS the solution to any problem according to a progressive” simply shows your basic prejudice and unwillingness to actually discuss the problem, which is, I think, the point of the original article, although from the viewpoint of the other side.
Hugh;
Entitlements are eating up almost 60% of the budget. A small increase in taxes isn’t going to solve it. Either we cut benefits drastically or we make it clear to the American public that maintaining the system requires massive increases in taxes. And point out that there aren’t enough rich people to tax to pay for it all.
As now, I see government cutting programs for the young.
fyi, there ARE progressive answers to the “entitlement funding crisis.” eliminate the earnings cap on the payroll tax and raise the retirement age for non-blue collar workers a little bit and you solve the problem of long-term social security funding for all time. create a single-payer Medicare for All program with generous benefits and you solve the Medicare funding crisis for all time as well.
Ah yes…..there be Unicorns, flatulent with multicolored misty prisms of glorious visual atmospheric splendor.
I was able to retire a few years ago at 60. At 62 I applied for Social Security. I have young children so not only did Social Security pay me but they pay me DOUBLE since I have two kids under 18. What is unusual is the fact that my retirement income is in the high six figures. This seems wrong to me. I might add that the all money I receive from Social Security and then some goes to charity.Both political parties send our young men and women off to war – we all can agree that is asking so much. In a time when this country is in financial trouble why shouldn’t Social Security be in some ways means tested. I know we have paid into it but if we can ask young people to die in questionable wars why not ask those older people that can afford it to forgo all or part of Social Security. There are consequences to elections – and we have elected way to many idiots.
WTF does Social Security have to do with war?
What does your reply have to do with BigRed’s point?
BigRed- The decision on how to spend your Social Security income should be yours. It should not be determined by a bureaucrat with an agenda. I commend you for donating your excess income to the charity of YOUR choice. I think everyone should have the same opportunity. Also, for those that believe that congress needs more money to allocate as they please, it is perfectly acceptible to pay higher taxes or to donate to the treasury.
You are in an extremely rare situation that is hardly representative of the SS program.
A lot of people don’t know that SS pays survivor benefits for people who die before their time. Having children under 18 at 62 is highly unusual. For most people, the survivor benefits are a welcome benefit, particularly when the primary provider dies.
Regarding your main point, one of the changes likely to occur to SS is to means test it. The problem with that is it won’t make much of a difference. People like yourself are extremely rare. Most people need the money.
A much bigger problem is the rampant fraud in the disability program. If you allow yourself to get obsese and have a good lawyer through a church, you have a good chance of getting a grand or two a month because of your diabetes disability, even if you are 30 years old. You will collect that, with cpi adjustments for life. Or maybe you hurt your back, if you know what I mean. There’s a whole industry for it.
So who held that gun to your head and made you file for your benefits?
If you’re receiving a six figure retirement and getting double SSI just because you have two kids under age 18, then you’re part of what’s wrong with the country whether you donate the SSI to charity or burn it to start fires with.
Sorry but you sound exactly like those liberal millionaires advocating tax increases but not having the moral initiative to write the govermnet a check each year.
According to the US Census, the over 65 group is the demographic with the highest net worth in the country and the lowest rates of poverty.
http://www.census.gov/hhes/www/poverty/poverty07/pov07hi.html
Quite frankly, seniors just don’t need it.
Excuse me? That is possibly the most ignorant uninformed statement I’ve read in a long time. Is it possible that some small part of that wealth IS THEIR SOCIAL SECURITY MONEY they’ve accumulated throughout their working career?
The statement is not ignorant or ill informed, but in fact correct. Seniors have the highest net worth of any age cohort, even without counting SS. If you count SS they are even wealthier. Of course, there are still some minority of seniors that did not save for retirement, and thus totally depend on SS, but most do not. It is also fairly natural they would have a high net worth, since they had a lot of years to save.
Raising the retirement age would definitely be a reasonable thing to do, since life expectancy, and thus total benefits paid out, has greatly increased over the years. We might also consider some means testing for seniors with a high net worth. They should still receive SS, but perhaps not get the full COLA.
I also agree with others that any cut in SS should accompany lots of cuts elsewhere in the budget, including medicare and medicaid, ag subsidies, any other business subsidies like green energy and ethanol, education, housing subsidies, special interest business tax breaks (partly offset by cut in corporate tax rate), and other cuts suggested by the deficit commission.
And before you accuse me of selfishness, I am only 10 yrs from retirement, and thus am advocating a cut in benefits I will soon receive. I dont mind, as long as all the other things I cited are also cut. I have saved responsibly,and thus will not totally depend on SS.
I’m 3 years from retirement age and as you know my retirement age has already been extended 1 year from 65 to 66. The ignorance of that statement lies in the fact that whatever I have saved and accumulated is my money and no one else has the right to make any claim against it. No I’m not being selfish or greedy, just a statement of fact. Just because our generation is the ‘wealthiest’ in the nation does not mean anyone else has claim to our earning. We do not live in a collectivist society. What is mine is mine and what is your’s is yours. Statement of fact, not greed.
Having said that I agree wholeheartedly that extending the retirement age out gradually over 25-50 years to age 70 is a viable and practical option and should be done immediately. But means testing of those currently enrolled is nothing more that denying someone what is rightfully theirs.
I can give money to those in need, I can even send money to the teasury is i so choose but no one has a right to simply take my money or anyone elses. Your need does not constitute my obligation.
The human infirmity which greed is constitutive of has been with mankind for a long time, and can no CDC control:
So, Mr. “Lhog”, how are you to finish explaining away the remnants the fact that, because law and equity recognize that, we are social creatures, and within which, our system of commerce functions to produce wealth to the nation through wealth in individuals (in YOU), ours is a system in which all others have had a part, and are to share in the success—but if that were true, it’d be some awful damn tough medicine forya t’choke down, now—wouldn’t it?
As follows, your presentation deserves but hard entertainment:
One of the current problems in the USA, has to do with the fact that—not only Charlie Rangel, but many home-born and foreigners—so very many deny the import of the 1st paragraph, and are hell-bent on using the USA as their personal trove, their cash cow, for “me-myself-and-I”.
reed has blinded to sunlight, it just never dawns on them that, no man can exist—nor his fortunes—as an island unto himself, but all are part of the whole—I’m thinking, that was Brothius in about the 4th cent. AD.
And, this to say that, while there are things which are solely yours, the benefits due your acceptance by and participation in the commercial community is not one of those, . . .
Think about waking up to the light of a larger reality, . . . before you have to be startled to wakefulness by a good sharp kick.
Bill Gates was as you are now. Oh, gosh but how he complained against the property taxes—650k / year—on his 15 acers on the east of Lake Washington, and a man’s money was his own, and all that. But at the length, some one got to him, and he was able to apprehend of the fact that, even a Bill Gates can eat only just so many big meals in one day. He’s different, now; and appears to be a lot happier, . . .
The “net worth” figures count home equity, and home equity is naturally higher for seniors since many of them own their homes. But you can’t eat home equity, and selling and moving is worse, and probably impossible in today’s real estate market.
So the high net worth of seniors is another bullshit statistic.
Moreover, an accurate “net worth” number would include liquid assets and lifetime earning potential. Obviously, a 30 year-old won’t have many assets, but the npv of his or her earning potential is on average, a couple of million dollars. The npv of the future lifetime earnings of a 65 year-old is ZERO. If you factor in inflation, the disparity is even greater.
There is NO WAY the true net worth of an average senior citizen comes anywhere close to an average person 30 years younger.
Your statistic is not only pure BULLSHIT, it is dangerous propaganda.
Lhog;
You get social security AFTER you retire, not during your career. Seniors are wealthy because they’ve accumulated savings and assets over their lifetimes.
The stereotype of the poor senior living on dog chow just isn’t true for most retirees. The Census reflects that fact.
Wrong again. I can draw SS now and continue to work if I so choose. My ‘benefit’ will be reduced as a function of what I earn but I can still draw it. When I reach my full retirement age I can draw my full benefit (adjusted again for what I drew before FRA)and continue to work with no limit on my earnings. I can work until I’m dead and draw SS if I so choose. Why you ask? Because it is my money.
Lhog;
If you die young, all “your money” vanishes. Your estate gets no refund from the government for everything you paid in. Your heirs are left with none of it. Nada. Zero. Zilch.
That money in your social security check isn’t “yours” in the sense that you think it is. It;s income that is being confiscated from current workers, just like a portion of your paycheck was confiscated to subsidize the previous generation of retirees.
What you are missing on this tread and in your arguments is the fact that SS is not a tax paid to the government for the functioning of the government. It is a contribution to a retirement fund. It has been misused and misappropriated to pay for other things that have little or nothing to do with retirement. You say it not my money? Then whose money is it? If I lent my money to others to help support them in their retirement are you then saying my money for my retirement is now gone?
As for Need? Bill Gates doesn’t need his billions, Michael Moore doesn’t need his millions. Does that give you a right to claim some of their money for your needs? No, it does not.
Correction:
Bill Gates’ 15 acres, . . .
Thank you
This is why Republicans must not, under any circumstances, raise the debt ceiling. Let them try to pretend things are fine without the ability to borrow. Let them try to avoid spending cuts with no money in the Treasury. The Democrats’ irresponsibility makes this step necessary.
There’s no need to shut down the government. Just cut off the endless borrowing. Now.
Mark*s–You are a bit out over your skis on the one. There are lots of ways to fix social security: raising the earnings cap, raising the retirement age, changing the COLA factor to a basket of items rather than wage inflation, means testing (limit benefits to amounts paid in above certain income levels). The fact remains that there is no trust fund–there are just IOUs that have to be paid by inflating the currency, borrowing more, or taxing more.
As to medicare, a single payor system that provides generous benefits is a bureaucratic monster that will combine the sensitivity and efficiency of the DMV with massive opportunities for special pleading and corruption. If you wonder where your incandescent light bulbs went in a few years, contemplate the opportunity offered to GE and Sylvania to ban by law a product that sells for 50 cents and substitute a product that sells for five dollars. The British National Health Service is still trying to get the average wait between cancer diagnosis and first meeting with a specialist down to 90 days.
Mark*s–I see great changes ahead if we put you in charge. Eventually, we’ll have your head on a pike.
Social Security can be reformed and kept sound, but the Democrats deny reality. My son, age 26, received a letter from Social Security warning him that when he is old enough to be eligible for Social Security, the money won’t be there to pay benefits. Here the civil servants are required by law to tell the truth, but the Democrats just go on lying. It’s in their nature.
Entitlement
A right to benefits specified especially by law or contract.
I think SS fits this definition. Quit your whining. Seriously. I don’t care what YOU put in the bottom line is that the VAST majority of the people in program will collect far, far beyond their contributions.
Me – 44. Been paying the max to SS since 26. Own a business – so been paying DOUBLE the max for years.
So all of you on this board talking about how “you’ve paid in for years” – exactly how is the fact that you all allowed politicians to sc##% the system up so badly – absolutely knowing that it was a Ponzi scheme from day one – supposed to make me feel better about the fact that I am still sending money into a sinkhole with no bottom? Don’t pretend that you have not been playing a part in this forever. “Not my problem, my money will there.”
Bite me.
About the fastest way to get me to leave my $ off shore is to lift the cap on the payments to SS. I already know what I pay is just chucked into a hole. What happens when that number is tripled or more? Talk about incentive to deal in another economy.
This whole set of comments is part of a common theme I’ve been seeing on the web lately – this isn’t our biggest problem, so why fix it? With all of the resources thrown at Washington, there is plenty of capacity to clear up more than one problem at a time.
P.S.
I’m guessing BigRed is an 18 yr old sock puppet. No one that successful would willingly hand over the cash based on the one issue of sending young (volunteer) men and women off to war.
You haven’t been paying twice what other people pay. You have been paying less than salaried workers because you get a tax break on the “employer piece”.
Everybody else pays double what is deducted. The employers pay a matching 100% (which goes directly to the government and is just as real compensation as the paycheck), and then take the tax breaks for themselves.
So quit YOUR whining. You obviously don’t know what you are talking about.
proreason
I’m guessing you are not an accountant.
The tax break comes in the form of a reduction of business income – just like salaries paid. It isn’t a credit, so the savings isn’t a direct one to one. Since it is money that has to go out – meaning that it is money I cannot use to invest in the business, why shouldn’t it count as a business expense? Salaries do. Are you saying that I shouldn’t deduct the cost of employing people?
If I paid the money to my team to then pay the government, it would be the same deduction. The reason the employers pay half is so that the politicians can hide just how big of a bite they are taking. People already b%*&$ about FICA witholding from their pay checks. Remember the shock of seeing how much is gone when you received that first paycheck? I do. What if that number was doubled? I am thinking people would be even LESS happy with the current situation.
You still don’t address the issue that the current batch of folks receiving benefits were part of the citizenry that allowed this scheme to develop. You are not innocent and I should not have to continue paying into a system that will…never…pay….me….back. Ever.
If it’s welfare, call it that. It is to me, because all it does is transfer my income to someone else with no hope me ever getting it back. I really don’t care how we got to here. The bottom line is that the system is patently unfair to me and anyone under the age of 50 that is paying into the system.
SS was only the insurance plan that it was sold as to the people for a short period of time. It no longer even resembles the original plan, we shouldn’t pretend that it does.
The dems have always demagagued on SS and medicare. They are definitely being totally irresponsible now, both the dem congressioonal leadership, and Obama. Unfortunately, the repubs have been beaten over this issue so bad over the years that they are not that eager to lead either, although I think Tea Party pressure will finally force them into it.
I thought we all knew by now that GETTING ELECTED IS THE ONLY THING THAT MATTERS. Screw the country. What’s in it for me?
Social Security is an insurance program (look up its original title) and according to multiple court rulings the payers (us) are entitled to exactly nothing. That’s right. The federal government is not obligated to pay a dime to any of us. It is purely the whim of the government whether we get any payments. Oh, the politicians go to great lengths to make it sound like a savings plan, but it isn’t. The “solution” will be to educate the masses that we never had any right to this money. Nice government we have there.
Mr. “Eufordem”:
“educate the masses”, . . . “educate the masses”? I think that—if correctly understood—a great many of us wait with bated breath and would marvel to be informed as to what manner or means you would suggest be employed to fulfill this, . . . your, . . . educational idea. Would you mind expanding that just a little?
Thank you, so much, . . .
“It is purely the whim of the government whether we get any payments.”
sure.
The governent owns everything, of course…according to…marxists.
Okay, well, so, what if there was a big ol’ war here, and a lot of people were no longer living—maybe that would take away from some of the SS problems, . . .
Entitlement or non-entitlement? Ponzi scheme or non-Ponzi scheme? – excuse me – but so what. The politicians will do what they want so as to best insure their reelection and we seniors can call foul all we want – it never minds. But – during the Clinton administration a certain portion of the payments were made taxable, depending on your income level. It is a complicated computation to determine what, if anything, will be taxed. Net effect however – the after tax value of what you receive is reduced, depending on your income level. The government has already inserted a means test, not so indirectly, on the amount that you can keep without giving something back to the government – thus putting your social security check in one pocket, and then taking income tax on part of that payment from the other pocket.
Modest suggestion – make the whole payment taxable and have that taxable income given to the social security “trust fund.” Everyone. Well, almost everyone, will be happy – the amount of social security payments will not be reduced (thus keeping the politicians in power), the deficiency in the SS trust fund will be substantially, if not entirely, be reduced, and everyone will be gloriously happy. Of course, it’s an accounting gimmick. but it will not be the first one the government has used, and probably not the last, but at least our entitlement (or maybe it is not an entitlement) will be secure. Sleep well, my fellow seniors – your income, but not the amount you can keep, is secure and we will not have to debate the semantics of whether it is an entitlement or not. Ain’t logic grand. Wheeee!!
RRBS #2 – You bring up a valid point: “Why doesn’t the Government require the same Accounting rules that they apply to corporations to the Government itself.” –
The Tea Party has been successful at bringing to light, and holding our Congress accountable for many things, especially for their spending and their “out of control spending”. Keeping their feet to the fire to rein in this type of Government corruption. No easy feat.
On the other hand, you have ‘those’ who do not put a ‘value’ on the dollar nor the tax payer’s dollar, want to spend this country into oblivion, rape our Government’s coffers, and it seems the Congress (both sides) doesn’t have the backbone to call it as they see it. And do something (drastic) about it.
There are ‘people’ who offer ‘No Solution’, want to ‘keep on spending’ yet, continue to peg The Tea Party and it’s affiliates with every vicious name in the book. The Tea Party is not ‘asking’ the Government for “any money”. Wow !! Isn’t that a switch!! They are asking our Government to do their Job according to our Constitution and the oath they took. The Tea Party embraces limited Government, free markets, Dependency on Self and not the Government, the ‘Equal’ Opportunities this great country offers ‘everyone’, among others… Life, Liberty and the ‘Pursuit’ of happiness…
So, I ask you, what’s wrong with this picture?
Here is a summary of US finances and entitlement promises. $75,100 billion ($75.1 trillion) is the amount of a fund which would pay for the unfunded part of promised entitlement programs over the next 75 years, if available today and invested at 3% interest. Of course, there is no such fund, so meeting those promises would require increasing tax revenues by 76% to pay off that “mortgage”, or those promises will be broken.
Raising that much in taxes might cause or deepen unemployment, or might be impossible (actually decreasing tax revenues), or it may be impossible to convince younger people to give up their savings for the right to charge their children high taxes in turn. I think the promises will be broken.
Unfunded Promises (billions)
7,900 Social Security
22,800 Medicare
35,300 Medicaid
9,100 Federal Debt
——-
75,100 Total Unfunded Promises
(above curent tax collections)
2,100 Federal Pensions
3,700 Veteran Benefits
1,600 All Other
—–
7,400 In current budgets (billions)
$82,500 Total Promises (billions)
$14,500 US 2010 Yearly Total Production (GDP)
$ 2,200 US 2010 Federal Tax Revenue (billions)
The unfunded promises of $75,100 billion are 34 times the $2,200 billion in taxes estimated to be collected in FY 2010 (the year ending Nov 30, 2011). There is nothing saved or set aside to satisfy those promises, and there is no tax revenue now collected or saved to pay those amounts over the next 75 years; that is the meaning of “unfunded”.
What if (say) Bob’s family budget operated like the government, in proportion? That gives a feeling for our situation:
$50,000 Bob’s Disposable Income (after tax)
$29,900 Yearly Borrowing
———
$79,900 Bob’s Yearly Spending
60% more than Bob’s income
The proposed GOP cut in spending of $61 billion is just 1.8%. For Bob in proportion, it would be $1,400.
Bob’s unfunded promises (in proportion) would be $1,736,00 increasing at 3% yearly, to be paid off in 75 years, over and above Bob’s current, spendable income (current tax collections) of $50,000.
EasyOpinions -> Family Budget
Just pay me what i’ve paid in over the years – TAX FREE DAMMIT – and i’ll go quietly into my dark retirement years. You can’t extend the retirement age without re-education of bosses who only want you to die (so they don’t have to fire you) beginning at about age 59. To all you marxists out there, it IS MY MONEY, i was FORCED TO CONTRIBUTE, and I WANT IT ALL BACK. Keep it from me, you can all FOAD. Does anyone remember the guy who sued SS probably 20-30 years ago, and got his $$ out of the system?
I may take hostages if I hear one more Democrat say SS will be solvent for at least two more decades (I even heard a Republican say as much today). They act as though there’s a 20-year supply of cash sitting in Al Gore’s lock box just waiting to be distributed (and let’s not forget, the special issue T-bills that do sit there are interest-bearing). It galls me that they consider us that stupid.