Social Security faces a $32 trillion shortfall

[JoeTheEconomist]

Just raising the cap to 250K would fix that, putting SS on all earnings would give the system a vast surplus, and enable us to give the seniors that have worked their whole lives for this nation a secure old age. But that is against the morals of the 'Conservatives'. Much better the trader that was making fun of 'Grandma Millie' while ripping us all off in the GOP's Enron scam retire with millions, than the lineman that worked night and day in the worst of weather to keep the power flowing be able to have a comfortable retirement.

Raising the cap to $308,000 solves about 30% of the financing gap. Chances are the information you are looking at is about 10 trillion dollars ago.

 

[JoeTheEconomist]

Workers and their employers currently pay 6.2 percent of earnings up to $106,800 into the Social Security system, or a maximum of $6,622 each per year. Self-employed workers are required to pay 12.4 percent of pay up to the same cap. If the contribution rate were increased by 1.1 percent to 7.3 percent of earnings, Social Security’s projected deficit would be eliminated. Using this fix, a worker making $43,451 in 2010 would face a tax increase of $478 a year, or $9.19 a week, and the employer would face an identical increase.


$9 Bucks a week ... NINE BUCKS !

keep your ass out of Starbucks !

Thanks for the trip down memory lane. If this were 2010, that would be relevant. SSA says that it is 2.58 percent now. CBO says that it is 4.4% now.

Time is like dog-years in SS. 2010 might as well be Paleozoic Era.

 

[Al Azar]

SS was fine till the Dems threw it in the General Fund. They have been robbing blind ever since.

I don't know who made the first raid into SS, transferring it from a lock-box fund to the General fund. Depends on party, I guess. Some say Johnson to cover VietNam and some say Reagan in a 1983 piece of legislation, but it's pretty clear the fund has been raided by every president since then. I remember back in the 90s a big fight (lost) to eliminate the caps on the SS deduction. Seemed sensible to me. The people most able to pay the deduction were exempted because they made over 100K, or whatever the cap was. They got a break, and those under the limit would pay it the rest of their working lives. That fight is still going on, isn't it? The fight to keep the caps and find another way to spare the well-off from the burden of taxes, that is?

I couldn't be LBJ. The system was a pay as you go system at the time with almost nothing to transfer. Reagan is just as silly. The first 3 years of his administration the system lost money. It wasn't until 1988 that the system actually generated excess cash to raid. It is mostly urban legend.

And that excess was specifically generated to deal with the boomer retirement bubble.

Then Bushonomics worked its magic, throwing millions of boomers out of work and having to file for benefits years earlier then they, or actuaries, expected. That put a sudden strain on the system and altered the timeline.

 

[rdean]

My eyes are old. Someone else do that math. Does 32 trillion divided by 3 hundred million come out to about a hundred million per person? Funny, currently, I would only get about $21,000 a year if I got SS right now.

 

[Al Azar]

How much in US Debt does the SSA hold ?

Answer; around four trillion or so.

It is about 2.8 trillion, but the unfunded liability is net of the surplus. Hence the name "unfunded"

That $2.8T is earning the program 3.37%.

 

[JoeTheEconomist]

My eyes are old. Someone else do that math. Does 32 trillion divided by 3 hundred million come out to about a hundred million per person? Funny, currently, I would only get about $21,000 a year if I got SS right now.

I would suggest finding out what the shortfall is. I had an article carried by a couple of outlet's : What Is The Social Security Shortfall? | Fox Business

 

[pwjohn]

Republicans have been predicting the demise of Social Security for 80 years

All it needs is a few tweaks to raise the earnings cap and retirement to age 70

Exactly.

Forty years ago, when I was younger and impressionable, I allowed myself to be convinced that SS was a Ponzi scheme and that there would never be any benefits for me when I got old enough, so I dropped out. I suspended my contributions. I didn't leave altogether, as I wanted to be able to resume participating later if I wanted to.

I never did get around to getting back into it, so today my benefits are quite modest. They reflect only about 14 years of earnings at pretty low wages, mostly while I was in the military and a student. But sure enough, when I turned 62, there they were as promised.

And still, after all this time, people with an agenda are selling that same snake oil to the gullible, with absolutely no evidence to back it up. They're exploiting ignorance and fear to promote a political agenda and it's disgusting what they get away with.

I was told the same thing when I entered the workforce 40 years ago

Social Security is insolvent, it won't be there by the time you reach 62, it is a waste

Social Security is still paying. Statistical calculations declare if no changes are made that Social Security will collapse by 2080. The changes needed are relatively minor. Raise the earnings cap, gradually increase the retirement age to 70, slightly increase contributions

70 is to old! Especially for the working man.

 

[rightwinger]

Republicans have been predicting the demise of Social Security for 80 years

All it needs is a few tweaks to raise the earnings cap and retirement to age 70

Exactly.

Forty years ago, when I was younger and impressionable, I allowed myself to be convinced that SS was a Ponzi scheme and that there would never be any benefits for me when I got old enough, so I dropped out. I suspended my contributions. I didn't leave altogether, as I wanted to be able to resume participating later if I wanted to.

I never did get around to getting back into it, so today my benefits are quite modest. They reflect only about 14 years of earnings at pretty low wages, mostly while I was in the military and a student. But sure enough, when I turned 62, there they were as promised.

And still, after all this time, people with an agenda are selling that same snake oil to the gullible, with absolutely no evidence to back it up. They're exploiting ignorance and fear to promote a political agenda and it's disgusting what they get away with.

I was told the same thing when I entered the workforce 40 years ago

Social Security is insolvent, it won't be there by the time you reach 62, it is a waste

Social Security is still paying. Statistical calculations declare if no changes are made that Social Security will collapse by 2080. The changes needed are relatively minor. Raise the earnings cap, gradually increase the retirement age to 70, slightly increase contributions

70 is to old! Especially for the working man.

If you hold a job where you are physically unable to perform after age 60, you need to start making plans while you are still in your 20s. You need to either build a 401k nest egg to carry you once you hit 60 or you need to develop other job skills that you can use in your 60s

 

[Mac1958]

The article itself points out:

By then, if Congress does nothing, the federal government will collect enough in payroll taxes to pay about 75 percent of scheduled retirement benefits until 2090.

Congress isn't going to just sit there. There are several tweaks that can and will be made:

• Slowly increasing eligibility age
• Increasing or eliminating the cap on Soc Sec taxes
• Increasing payroll taxes in general
• Means testing

This hysteria brought on by static analysis is silly. Here:

If Payroll Taxes Increased by This Much, There Would Be No Social Security or Medicare Shortfall -- The Motley Fool
.

 

[Old Rocks]

OK. I am 72, and still working. I collect SS, over $24K a year. I paid into it every year of my working life. And am still paying into it. However, not one of my peer group that I knew when I started working are still working, most simply cannot for health reasons. If we continue to increase the age of retirement, then we had better make provisions for those that cannot work for the inevitible ravages of age.

That being said, the cap must be raised, and those that can, should work a longer time. Most jobs today are not that physical.

Yes, SS is easily fixable, and an excellent program to protect the working man from the vissicitudes of the market. But the Republicans were against it when it started, and continue to be against it. Too bad that they could not see the wisdom of the GOP President that was wisest concerning SS and many other things, Eisenhower.

 

[easyt65]

The 'Ponzi Scheme' is running dry.

 

[JoeTheEconomist]

The article itself points out:

By then, if Congress does nothing, the federal government will collect enough in payroll taxes to pay about 75 percent of scheduled retirement benefits until 2090.

Congress isn't going to just sit there. There are several tweaks that can and will be made:

• Slowly increasing eligibility age
• Increasing or eliminating the cap on Soc Sec taxes
• Increasing payroll taxes in general
• Means testing

This hysteria brought on by static analysis is silly. Here:

If Payroll Taxes Increased by This Much, There Would Be No Social Security or Medicare Shortfall -- The Motley Fool
.

The hysteria is more about understanding what the numbers mean and less about static analysis. Yes, there is a component of the latter, but let's not forget the former. The problem is that you are getting your information from Motley Fool, and not the SSA. You are talking about a different shortfall, one that is designed to be smaller. SSA says that the I&P tax increase to mean that there is no shortfall would be over 4%. CBO says that SSA is wrong. They project that it would require a 4.4% I&P. The Social Security Administration Advisory Board says it is roughly 3.5%.

Your link doesn't say anything about 75 percent or 2090. CBO says that by 2040, the system will payout about 60 percent.

There are no guarantees.

 

[Conservative65]

They should take it out of the general fund and put it back in that lock box.

What "lock box"? All they're doing it now is taking the (fiat currency) Federal Reserve Notes (in digital form) and replacing it with another type of fiat currency in the form of Federal Government Bonds, either way it's just entries in a ledger backed by nothing but printing presses.

If you put Federal Reserve Notes in some mythical "lock box" all the miscreants in Washington will do is issue more bonds that the Federal Reserve will then "print" fiat currency to "buy" (aka monetizing debt) thus giving the drunken sailors in Washington the same amount of money to blow and hastening the increase in the Federal Government cumulative operating deficits (and the eventual collapse of the dollar), meaning at the end of the day you'll still end up with a "lock box" full of worthless currency you just get there faster because the federal debt service will increase at a faster rate.

What you do is let people opt out of such a foolish program and invest their money the way they see fit. That way, those that do the responsible thing benefit and those that don't, well, tough shit.

 

[Conservative65]

The article itself points out:

By then, if Congress does nothing, the federal government will collect enough in payroll taxes to pay about 75 percent of scheduled retirement benefits until 2090.

Congress isn't going to just sit there. There are several tweaks that can and will be made:

• Slowly increasing eligibility age
• Increasing or eliminating the cap on Soc Sec taxes
• Increasing payroll taxes in general
• Means testing

This hysteria brought on by static analysis is silly. Here:

If Payroll Taxes Increased by This Much, There Would Be No Social Security or Medicare Shortfall -- The Motley Fool
.

The hysteria is more about understanding what the numbers mean and less about static analysis. Yes, there is a component of the latter, but let's not forget the former. The problem is that you are getting your information from Motley Fool, and not the SSA. You are talking about a different shortfall, one that is designed to be smaller. SSA says that the I&P tax increase to mean that there is no shortfall would be over 4%. CBO says that SSA is wrong. They project that it would require a 4.4% I&P. The Social Security Administration Advisory Board says it is roughly 3.5%.

Your link doesn't say anything about 75 percent or 2090. CBO says that by 2040, the system will payout about 60 percent.

There are no guarantees.

Wouldn't you expect some guarantee from a system you're REQUIRED to be a part of?

 

[rightwinger]

The 'Ponzi Scheme' is running dry.

Conservatives have been predicting that for 80 years

 

[rightwinger]

They should take it out of the general fund and put it back in that lock box.

What "lock box"? All they're doing it now is taking the (fiat currency) Federal Reserve Notes (in digital form) and replacing it with another type of fiat currency in the form of Federal Government Bonds, either way it's just entries in a ledger backed by nothing but printing presses.

If you put Federal Reserve Notes in some mythical "lock box" all the miscreants in Washington will do is issue more bonds that the Federal Reserve will then "print" fiat currency to "buy" (aka monetizing debt) thus giving the drunken sailors in Washington the same amount of money to blow and hastening the increase in the Federal Government cumulative operating deficits (and the eventual collapse of the dollar), meaning at the end of the day you'll still end up with a "lock box" full of worthless currency you just get there faster because the federal debt service will increase at a faster rate.

What you do is let people opt out of such a foolish program and invest their money the way they see fit. That way, those that do the responsible thing benefit and those that don't, well, tough shit.

How do you pay existing retirees?

 

[Mac1958]

The article itself points out:

By then, if Congress does nothing, the federal government will collect enough in payroll taxes to pay about 75 percent of scheduled retirement benefits until 2090.

Congress isn't going to just sit there. There are several tweaks that can and will be made:

• Slowly increasing eligibility age
• Increasing or eliminating the cap on Soc Sec taxes
• Increasing payroll taxes in general
• Means testing

This hysteria brought on by static analysis is silly. Here:

If Payroll Taxes Increased by This Much, There Would Be No Social Security or Medicare Shortfall -- The Motley Fool
.

The hysteria is more about understanding what the numbers mean and less about static analysis. Yes, there is a component of the latter, but let's not forget the former. The problem is that you are getting your information from Motley Fool, and not the SSA. You are talking about a different shortfall, one that is designed to be smaller. SSA says that the I&P tax increase to mean that there is no shortfall would be over 4%. CBO says that SSA is wrong. They project that it would require a 4.4% I&P. The Social Security Administration Advisory Board says it is roughly 3.5%.

Your link doesn't say anything about 75 percent or 2090. CBO says that by 2040, the system will payout about 60 percent.

There are no guarantees.

Of course there are no guarantees, and the 75% and 2090 references are from the OP.

Regardless, screaming about something if we do nothing is not helpful to the conversation. There are fixes, if we just stay calm and communicate.

That was and is my point.
.

 

[rightwinger]

OK. I am 72, and still working. I collect SS, over $24K a year. I paid into it every year of my working life. And am still paying into it. However, not one of my peer group that I knew when I started working are still working, most simply cannot for health reasons. If we continue to increase the age of retirement, then we had better make provisions for those that cannot work for the inevitible ravages of age.

That being said, the cap must be raised, and those that can, should work a longer time. Most jobs today are not that physical.

Yes, SS is easily fixable, and an excellent program to protect the working man from the vissicitudes of the market. But the Republicans were against it when it started, and continue to be against it. Too bad that they could not see the wisdom of the GOP President that was wisest concerning SS and many other things, Eisenhower.

You can still raise the age of full retirement to 70 and allow workers to take early retirement at a younger age at reduced benefit

If you are in a profession where you physically cannot perform past age 60, you need to plan ahead either by investing in a 401k starting in your 20s or learning skills you can use in your 60s

 

[Conservative65]

They should take it out of the general fund and put it back in that lock box.

What "lock box"? All they're doing it now is taking the (fiat currency) Federal Reserve Notes (in digital form) and replacing it with another type of fiat currency in the form of Federal Government Bonds, either way it's just entries in a ledger backed by nothing but printing presses.

If you put Federal Reserve Notes in some mythical "lock box" all the miscreants in Washington will do is issue more bonds that the Federal Reserve will then "print" fiat currency to "buy" (aka monetizing debt) thus giving the drunken sailors in Washington the same amount of money to blow and hastening the increase in the Federal Government cumulative operating deficits (and the eventual collapse of the dollar), meaning at the end of the day you'll still end up with a "lock box" full of worthless currency you just get there faster because the federal debt service will increase at a faster rate.

What you do is let people opt out of such a foolish program and invest their money the way they see fit. That way, those that do the responsible thing benefit and those that don't, well, tough shit.

How do you pay existing retirees?

With the funds you Libs say are there claiming the system is solid.

Why do you oppose people opting out? You'll come up with some excuse that you're looking out for them. The real reason is you know those that actually keep the system going would opt out, make far more on their own, and those that rely on the redistribution would have nothing. In other words, the higher incomes support the lower incomes. Typical redistribution mentality of the left.

 

[easyt65]

If the govt says, 'Give me $20. I will put it aside for you, No one will touch it because it's your money'. When it comes time for me to be able to collect my $20, how can there be a 'shortfall' if no one could touch my money that was put aside for me and the govt could not use it any time they wanted?

The BS claim that the govt didn't raid social security like their own piggy bank / slush fund is just that - BS!