3 Statistics About Social Security That Are Frightening

[JoeTheEconomist]

Typically, we hear a lot of drama and get a lot of hand-wringing over the possibility of benefit cuts 16 years in the future. Comically enough most of the articles are talking about a fairly benign impact.

Here are three stats to worry about :

The Social Security Shortfall Is Growing Three Times Faster Than the US Economy.

In other words, the hole in the program’s finances is growing at three times the rate of our ability to fill it.

People Turning 70 Today expect to Be Alive When Benefits are Reduced

The problem of Social Security hasn't been about those 40 and younger in decades. Here is the SSA's life expectancy calcuator : Calculators: Life Expectancy

In 2016, The Program Lost More Money Than It Collected

We could have reduced benefits to zero for the entire year of 2016, and the program would have finished the year in worse shape than it started. "Loss" here is looking at the $ value of promises that we believe will go unfulfilled.

If you want the details, here is my article, but the stats are pretty simple.

No Way Around Sorry Shape Social Security Is In

 

[BluesLegend]

Don't worry President Reagan signed a SS tax increase in the 1980's to build up a surplus so we have enough for the baby boomer retirement surge...oh wait Congress stole all our money and spent in on stupid shit but they gave us IOU's...oh wait how exactly are they going to pay us back?

 

[Mr Natural]

Raising (or better yet, eliminating) the earnings cap will solve all those problems.

 

[JoeTheEconomist]

Don't worry President Reagan signed a SS tax increase in the 1980's to build up a surplus so we have enough for the baby boomer retirement surge...oh wait Congress stole all our money and spent in on stupid shit but they gave us IOU's...oh wait how exactly are they going to pay us back?

Reagan signed a tax increase so that we could get to the baby boomer's retirement not through it. The Congress "stole" all our money is a feel-good excuse that we were not paying attention over our entire voting lives. At this point, it would help if you would wake.

 

[JoeTheEconomist]

Raising (or better yet, eliminating) the earnings cap will solve all those problems.

If feels good to say, but it is factually inaccurate. It doesn't even kick the can anymore.

No Simple Solution To The Social Security Deficit

 

[AntonToo]

Raising (or better yet, eliminating) the earnings cap will solve all those problems.

If feels good to say, but it is factually inaccurate. It doesn't even kick the can anymore.

No Simple Solution To The Social Security Deficit

Of course, raising revenues doesn’t ever kick - right?

 

[beagle9]

So should the people be able to sue the government for stealing their money for decades now ? The fund should have been solvent, and it should have been paid out to it's rightful participant's, and what about those who passed and never drawed a dime of it or never drawed over two years before death (where'd that money go) ?

Why was it or is it still run as a socialist program that forces all regardless of job titles to have to await the same time in order to draw on it ? Is this in hopes that those who have been worked to death will fall out before their draw date arrives ?? Otherwise is the thing set up in a way that is designed specifically to let those who pass early, then pay for the ones who survive, and the excess is shaved off to go for other bullcrap that isn't related to the program ??

I just can't figure out how we have a retirement program for workers who pay into that program, and it is run by the government, yet it steady is failing ?? So is it evidence that the government is corrupt, and stealing people's money through a slush fund called the social security retirement fund ?

How is it the government can declare emergencies here or over seas, and all these millions or billions just magically appear ?? I'm not to schooled on the subject, but just a worker who has worked all my life paying in, yet to constantly hear threats of the program failing, going bust or the age being extended well beyond people's years to draw on it because they are predicted to most likely die first. What kind of corruption is this bullcrap ?

 

[JoeTheEconomist]

So should the people be able to sue the government for stealing their money for decades now ? The fund should have been solvent, and it should have been paid out to it's rightful participant's, and what about those who passed and never drawed a dime of it or never drawed over two years before death (where'd that money go) ?

I am curious. On what basis do you believe that the program "should have been solvent".

I can explain the latter question, but it pretty much deals with the fact that the program has never been actuarially sound. That isn't my opinion. It is straight from the Congressional testimony of A.J. Altmeyer, who was the first person to run what we call the Social Security administration.

 

[JoeTheEconomist]

Raising (or better yet, eliminating) the earnings cap will solve all those problems.

If feels good to say, but it is factually inaccurate. It doesn't even kick the can anymore.

No Simple Solution To The Social Security Deficit

Of course, raising revenues doesn’t ever kick - right?

The type of revenue makes all the difference. Payroll tax revenue for example kicks the can. Interest from the Trust Fund on the other hand does not generate higher benefits in the future. It is solution revenue.

 

[JoeTheEconomist]

How is it the government can declare emergencies here or over seas, and all these millions or billions just magically appear ?? I'm not to schooled on the subject, but just a worker who has worked all my life paying in, yet to constantly hear threats of the program failing, going bust or the age being extended well beyond people's years to draw on it because they are predicted to most likely die first. What kind of corruption is this bullcrap ?

It is a sign of character that you disclose the schooling on the subject. Do you want an answer - even though it is apt to make you realize that it is less about bullcrap and more about voters not paying attention?

 

[Mac1958]

There are only so many moving parts:

• Increase of the eligibility age
• Increase of the taxes
• Decrease of benefits, which would be political suicide, thankfully
• Increase or elimination of the contribution income cap

My anticipation is that, to address this critical and impending problem, we'll do what we always do: We'll have silly and binary partisan slap fights until we have run out of time, and then we'll come up with some ridiculous and one-sided "solution" that will be questionable at best.
.

 

[beagle9]

So should the people be able to sue the government for stealing their money for decades now ? The fund should have been solvent, and it should have been paid out to it's rightful participant's, and what about those who passed and never drawed a dime of it or never drawed over two years before death (where'd that money go) ?

I am curious. On what basis do you believe that the program "should have been solvent".

I can explain the latter question, but it pretty much deals with the fact that the program has never been actuarially sound. That isn't my opinion. It is straight from the Congressional testimony of A.J. Altmeyer, who was the first person to run what we call the Social Security administration.

. The program should have remained within the boundaries it was designed or created for. Right ?? The government could screw up a two car funeral.

 

[JoeTheEconomist]

There are only so many moving parts:

• Increase of the eligibility age
• Increase of the taxes
• Decrease of benefits, which would be political suicide, thankfully
• Increase or elimination of the contribution income cap

My anticipation is that, to address this critical and impending problem, we'll do what we always do: We'll have silly and binary partisan slap fights until we have run out of time, and then we'll come up with some ridiculous and one-sided "solution" that will be questionable at best.
.

Your analysis is pretty straight forward and consistent with the public view. I happen to write on the issue because that view is skewed wildly towards optimism. Increasing age is a benefit cut. Increasings the cap is a tax increase. So you are limited to two solutions.

We will have silly and binary partisan bickering until the public starts paying attention. If we wait long enough, the crisis will define the solution. That possibility is pretty consistent with your prospective end. The only material place where I disagree with you is that benefit cuts are suicide today. Over time, the make-up of the electorate will shift to a point where not having cuts will become suicide.

I will only say that the public does not pay enough attention to this issue. The longer we wait the harsher the solution.

 

[JoeTheEconomist]

So should the people be able to sue the government for stealing their money for decades now ? The fund should have been solvent, and it should have been paid out to it's rightful participant's, and what about those who passed and never drawed a dime of it or never drawed over two years before death (where'd that money go) ?

I am curious. On what basis do you believe that the program "should have been solvent".

I can explain the latter question, but it pretty much deals with the fact that the program has never been actuarially sound. That isn't my opinion. It is straight from the Congressional testimony of A.J. Altmeyer, who was the first person to run what we call the Social Security administration.

. The program should have remained within the boundaries it was designed or created for. Right ?? The government could screw up a two car funeral.

The program left its boundaries in 1939. FDR rejected the model with have today, and in fact veto'd legislation that was part of the transition to our current pay as you go slow motion debacle. Once the voters did not have to pay for benefits, increasing benefits became very popular with the electorate. You couldn't get elected in the 1950s if you didn't support more benefits for more people. But we are kidding ourselves to think that the 'extra' is going to poor people or to illegal immigrants. This is a matter of voters voting for people who promised them dollars of benefits for dimes of cost.

 

[kyzr]

Raise the retirement ages to 63 & 67 and remove the cap, SS problem solved.

MediCare is a tougher entitlement program to fix

 

[KissMy]

Don't worry President Reagan signed a SS tax increase in the 1980's to build up a surplus so we have enough for the baby boomer retirement surge...oh wait Congress stole all our money and spent in on stupid shit but they gave us IOU's...oh wait how exactly are they going to pay us back?

".oh wait how exactly are they going to pay us back?"

They will pay us back with a worthless printing press!

 

[JoeTheEconomist]

Raise the retirement ages to 63 & 67 and remove the cap, SS problem solved.

MediCare is a tougher entitlement program to fix

Please tell me you are kidding. The retirement age is already scheduled to be 67. We can raise the retirement age to 70, and it doesn't fix the program according to the Social Security trustees....

 

[BluesLegend]

Don't worry President Reagan signed a SS tax increase in the 1980's to build up a surplus so we have enough for the baby boomer retirement surge...oh wait Congress stole all our money and spent in on stupid shit but they gave us IOU's...oh wait how exactly are they going to pay us back?

Reagan signed a tax increase so that we could get to the baby boomer's retirement not through it. The Congress "stole" all our money is a feel-good excuse that we were not paying attention over our entire voting lives. At this point, it would help if you would wake.

Look fool congress took and spent $2 trillion dollars from the SS trust fund HELLO.

 

[BluesLegend]

Don't worry President Reagan signed a SS tax increase in the 1980's to build up a surplus so we have enough for the baby boomer retirement surge...oh wait Congress stole all our money and spent in on stupid shit but they gave us IOU's...oh wait how exactly are they going to pay us back?

".oh wait how exactly are they going to pay us back?"

They will pay us back with a worthless printing press!

No they are going to raise the retirement age so that more people die before they can collect a dime of SS benefits and means test to screw people out of SS benefits they were forced to purchase. Can you imagine your average 70 year old still standing on the factory floor working? How retarded is that.

 

[imawhosure]

So should the people be able to sue the government for stealing their money for decades now ? The fund should have been solvent, and it should have been paid out to it's rightful participant's, and what about those who passed and never drawed a dime of it or never drawed over two years before death (where'd that money go) ?

I am curious. On what basis do you believe that the program "should have been solvent".

I can explain the latter question, but it pretty much deals with the fact that the program has never been actuarially sound. That isn't my opinion. It is straight from the Congressional testimony of A.J. Altmeyer, who was the first person to run what we call the Social Security administration.

OK Joe, you are the economist, and have all the facts and figures, and I am not being sarcastic, I am actually trying to get an answer for these people, up to, and including myself.

Let us all forget the IOU's, and everything else for a second, and ask pertinent, economic questions about a few things, including how much, and where, the blame lies; specifically in percentages, so we can come to a conclusion on how much we should help fund, and how much we demand our politicians come up with an answer by defunding other programs to transfer to SS, and Medicare!

QUESTIONS, and COMMENTS------------->

1. S.S. and Medicare, are 2 separate entities. While they are BOTH important to all of us, we need to separate the discussion on them.

2. We know, that S.S. is a pay as you go system. In essence, we pay in today for those that are collecting today, and expect those of tomorrow, pay in for us to collect.

3. Now the hard questions------> Was there EVER a time that S.S. took in more revenue then its outlays?

a. If so, how many years did that surplus last?
b. If those years of surplus were put into even government bonds at that time, how much would the fund have grown; in essence meaning........how far in arrears would the fund be today as opposed to its current situation?

I would like to explain something to people reading my post, and in no way am I trying to detract from the factual points that economist Joe is trying to make.

Did you ever wonder why when an income tax cut comes up, the 1st thing you hear about is either S.S. or Medicare, and NOT welfare, foreign aid, billions being lost through fraud, or most any other federal program? (full disclosure--------->entitlements are much larger % today of the federal budget, than any of these others, although together, they do make a significant outlay in the budget)

ANSWER---------> (using SS) Because it affects EVERYONE, thus it SCARES everyone! It will allow them to manipulate you to vote against your best interests, because you are afraid of the fall out to you personally!

Now what if I told you that-----> foreign aid was causing a 30 billion dollar deficit per year? (just creating numbers, not actual) What if I said------>if we cut taxes, the deficit for that program would rise, become insolvent, and we might have to shrink funding? What would you say? How about if it was welfare programs that incessantly over lap?

See my point, lol. Now you know why they point directly at what affects you, although the federal governments payments actually derive from the general fund, where ALL these programs reside.

Doubt me?

Then consider this--------------> What was our deficit last year, and our projected deficit this year? Pick either one! Now I am guessing, so maybe Joe will prove me wrong, but-------> what was the deficit last year for the S.S. fund? What is the projected deficit next year, for the S.S. fund?

So now, if the Federal governments deficit was HIGHER than the deficit for the S.S. fund, then why are the non-tax cut people just focused on that particular program? Shouldn't we be focused on ALL programs causing deficit? I mean, these other programs are NOT ENTITLEMENTS, so we could just lop them off, yes!

So while I agree Joe is accurate, we are addressing this particular issue because Washington feels by shaking you up, you will be more inclined to allow a RAISE to fund them in taxes, and stop concentrating on cutting their PET programs that are NOT entitlements; transferring the money to these entitlements, to help save them. In essence, it is the 3 card Monty trick. Where is the penny under the shell, and you never find it!

Now then, in fairness, I agree with Joe, something has to be done. But, don't allow them to raise your taxes to fund them, WITHOUT cutting programs to help pay for them. Say that, and watch Washington scream, and the whole narrative change. Always remember------->it is EASY PEEZY for someone to go to Washington and create give aways to people, or entities. A real legislature, has to sometimes decide what to cut! I am not sure we have any of those today in Washington, and if we don't, it is up to you in 2018 to make it happen!