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

/——/ Social Security is a ponzi scheme.

. Did'nt alot of people go to jail in the past for running Ponzi schemes ??

/-----/ Dig up FDR and LOCK HIM UP

Not that you want to invest 10 minutes of time in your opinion. Here is a piece on FDR and Social Security. He specifically opposed the current structure because what we have today is unavoidable. There are a lot of politicians that are responsible for where we are. FDR isn't one of them.

Would Roosevelt recognize today’s Social Security?

I have had an on-going exchange with Beagle9 about who is at fault. If you get nothing, it will be the fault of people who voted without bothering to even look at the basics of the program. The people who blindly trust politicians that they 'paid' for their benefits. Instead of looking at facts, we think that we can get change by hurling insults at the program, and nameless politicians.

 

[JoeTheEconomist]

The retiree of Galveston County in 1980 did very well. He basically had bought a dollar benefits for around $0.33 cents.

How does that compare to the retiree of anywhere besides Galveston County in 1980?

Risk Adjusted? Hmmmm... Please tell me you are kidding.

The $0.66 cents was shifted to future workers, of which Galveston no longer participated. It absolved itself of any payment related to the $0.66 for every retiree from that year, and any previous.

And it removed future Galveston retirees from the responsibility of not-Galveston.

No. Anyone who worked for 10 years for Galveston County, say someone who was 30 could draw Social Security for the next 25 years. Then assuming that he married a younger wife who could when she turned 60 collect for another 30 years. The Galveston accruals didn't go away. The workers of Galveston County simply stopped paying toward maintaining them.

How does the 2015 Galveston retiree expect to do compared to the 2015 non-Galveston retiree?

Galveston is a savings plan. Social Security is an insurance product. This is like comparing runners and swimmers. It is like saying that Michael Phelps sucks as a swimmer because he swims slower than Uriah Bolt runs. It is a pointless discussion.

Even if they were similar, the situation for the broader U.S. is not the same as it was for Galveston County. Those people walked away from the unfunded liabilities. The workers in the U.S. can't, unless you are suggesting that we tell existing retirees to pound sand.

The 1982 retiree from Galveston had the same risk as all Social Security beneficiaries.

Risk Adjusted?

Social Security....

Anyone who worked for 10 years for Galveston County, say someone who was 30 could draw Social Security for the next 25 years.

Based on how many years of Social Security contributions?

Galveston is a savings plan. Social Security is an insurance product.

And the savings plan gives a much better payout. Right?

You seem to conflate today and yesterday. The retiree of 1980 made a killing in Galveston and elsewhere on Social Security. Today the program has an absurd unfunded liability that is projected to fall somewhere in the next decade or 2. All told, the workers of the 1950s, ie the retirees of the 1980s, made a killing. In 1980, the rule was highest 23 years - which was the problem. So someone who worked for 10 years for Galveston looked like a low-wage worker, where the returns are even higher.

And the savings plan gives a much better payout. Right?

Yes and sprinters are faster than swimmers. Why is that you don't have a personal auto wreck account?

 

[Toddsterpatriot]

The retiree of Galveston County in 1980 did very well. He basically had bought a dollar benefits for around $0.33 cents.

How does that compare to the retiree of anywhere besides Galveston County in 1980?

Risk Adjusted? Hmmmm... Please tell me you are kidding.

The $0.66 cents was shifted to future workers, of which Galveston no longer participated. It absolved itself of any payment related to the $0.66 for every retiree from that year, and any previous.

And it removed future Galveston retirees from the responsibility of not-Galveston.

No. Anyone who worked for 10 years for Galveston County, say someone who was 30 could draw Social Security for the next 25 years. Then assuming that he married a younger wife who could when she turned 60 collect for another 30 years. The Galveston accruals didn't go away. The workers of Galveston County simply stopped paying toward maintaining them.

How does the 2015 Galveston retiree expect to do compared to the 2015 non-Galveston retiree?

Galveston is a savings plan. Social Security is an insurance product. This is like comparing runners and swimmers. It is like saying that Michael Phelps sucks as a swimmer because he swims slower than Uriah Bolt runs. It is a pointless discussion.

Even if they were similar, the situation for the broader U.S. is not the same as it was for Galveston County. Those people walked away from the unfunded liabilities. The workers in the U.S. can't, unless you are suggesting that we tell existing retirees to pound sand.

The 1982 retiree from Galveston had the same risk as all Social Security beneficiaries.

Risk Adjusted?

Social Security....

Anyone who worked for 10 years for Galveston County, say someone who was 30 could draw Social Security for the next 25 years.

Based on how many years of Social Security contributions?

Galveston is a savings plan. Social Security is an insurance product.

And the savings plan gives a much better payout. Right?

You seem to conflate today and yesterday. The retiree of 1980 made a killing in Galveston and elsewhere on Social Security. Today the program has an absurd unfunded liability that is projected to fall somewhere in the next decade or 2. All told, the workers of the 1950s, ie the retirees of the 1980s, made a killing. In 1980, the rule was highest 23 years - which was the problem. So someone who worked for 10 years for Galveston looked like a low-wage worker, where the returns are even higher.

And the savings plan gives a much better payout. Right?

Yes and sprinters are faster than swimmers. Why is that you don't have a personal auto wreck account?

You seem to conflate today and yesterday.

No, that's your confusion.

The retiree of 1980 made a killing in Galveston and elsewhere on Social Security.

Excellent! That was my point.

Yes and sprinters are faster than swimmers.

Sounds good. You swim, I'll save.

 

[JoeTheEconomist]

You seem to conflate today and yesterday.

No, that's your confusion.

The retiree of 1980 made a killing in Galveston and elsewhere on Social Security.

Excellent! That was my point.

Yes and sprinters are faster than swimmers.

Sounds good. You swim, I'll save.

Sounds good. You swim, I'll save

Let's see how savings working in a flood.

 

[Jarlaxle]

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

Just stop spending (really wasting) TRILLIONS on the war machine and empire building.

Problem fixed.

Thanks for your thoughts, but you can cut the government's spending to zero and Social Security is unaffected. It still goes bust at the same time.

Wrong. Just stop war spending and transfer those trillions to SS.

. Why we are still in Afghanistan just boggles the mind really.

OK, let's leave right now and Al Qaeda/Taliban/ISIS will take over the country in a matter of weeks. Is that what you really want?

Personally...at this point, I don't give a shit.

 

[DOTR]

At 2% inflation a dollar loses 70% of its value over a twenty year period.

Ummm....loses 33%.

I do believe you are correct (or at least more correct than I was). Sorry about that.

 

[beagle9]

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

/——/ Social Security is a ponzi scheme.

. Did'nt alot of people go to jail in the past for running Ponzi schemes ??

/-----/ Dig up FDR and LOCK HIM UP

. Yeah, you think the blame has died with FDR, but that is what the hope is by those who crooked the citizens out of their money through a system that has been run by the culprits for the last 4 or 5 decades. Just blame the dead guy right ? Not so fast.

 

[beagle9]

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

/——/ Social Security is a ponzi scheme.

. Did'nt alot of people go to jail in the past for running Ponzi schemes ??

/-----/ Dig up FDR and LOCK HIM UP

Not that you want to invest 10 minutes of time in your opinion. Here is a piece on FDR and Social Security. He specifically opposed the current structure because what we have today is unavoidable. There are a lot of politicians that are responsible for where we are. FDR isn't one of them.

Would Roosevelt recognize today’s Social Security?

I have had an on-going exchange with Beagle9 about who is at fault. If you get nothing, it will be the fault of people who voted without bothering to even look at the basics of the program. The people who blindly trust politicians that they 'paid' for their benefits. Instead of looking at facts, we think that we can get change by hurling insults at the program, and nameless politicians.

. It's like the penalty for Obamacare, where as it didn't matter how much you looked at anything, you still had to pay it, but that's why we voted for Trump, and yes we knew what the Dems did to us in Obamacare, and now SS needs to be re-visited and fixed.

 

[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

/——/ Social Security is a ponzi scheme.

. Did'nt alot of people go to jail in the past for running Ponzi schemes ??

/-----/ Dig up FDR and LOCK HIM UP

Not that you want to invest 10 minutes of time in your opinion. Here is a piece on FDR and Social Security. He specifically opposed the current structure because what we have today is unavoidable. There are a lot of politicians that are responsible for where we are. FDR isn't one of them.

Would Roosevelt recognize today’s Social Security?

I have had an on-going exchange with Beagle9 about who is at fault. If you get nothing, it will be the fault of people who voted without bothering to even look at the basics of the program. The people who blindly trust politicians that they 'paid' for their benefits. Instead of looking at facts, we think that we can get change by hurling insults at the program, and nameless politicians.

. It's like the penalty for Obamacare, where as it didn't matter how much you looked at anything, you still had to pay it, but that's why we voted for Trump, and yes we knew what the Dems did to us in Obamacare, and now SS needs to be re-visited and fixed.

It starts with you. You have to make it important enough to you that you tell family, friends, neighbors that it is important. As a side note, I have two articles that demonstrate the problem.

About 2 weeks ago I published a column in MarketWatch on the impact of tax reform on SS. The analysis that you see in the media today is a joke. The fact is that no one knows, because no one asked. I am not kidding.

The tax cuts ignore this impact on Social Security’s finances

This one is about a statement from Jeb Bush. It was no more sensible than predicting manned flights to the moon. Yet, he was treated as a credible leader and candidate for President.

Voters oblivious to Jeb Bush's flawed Social Security vision

"Bush does, however, serve as a poster child of Social Security's dysfunction. He is a wealthy politician who is unacquainted with his own retirement age, the impact of his proposal, or the reasoning for it. He is supposed to be a serious contender for the presidential election in 2016, and he treats the issue of Social Security as though it were a campaign stop at a working-class burg in the political outback of America."

 

[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

/——/ Social Security is a ponzi scheme.

Not that it will change your mind, but I happened to publish a column this AM on the question of whether Social Security is a Ponzi scheme.

If Social Security Is A Ponzi Scheme, Where Is The Money?

 

[Markle]

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

/——/ Social Security is a ponzi scheme.

Not that it will change your mind, but I happened to publish a column this AM on the question of whether Social Security is a Ponzi scheme.

If Social Security Is A Ponzi Scheme, Where Is The Money?

Social Security did not start out as a Ponzi Scheme but it is today.

Ponzi scheme
A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.
Wikipedia · Text under CC-BY-SA license

 

[Cellblock2429]

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

/——/ Social Security is a ponzi scheme.

Not that it will change your mind, but I happened to publish a column this AM on the question of whether Social Security is a Ponzi scheme.

If Social Security Is A Ponzi Scheme, Where Is The Money?

/——/ Not smart posting your real name on USMB. Secondly, from the Heritage Foundation: “The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs“ And that is the benefit to Uncle Sam running this scam. Why do you think they block every effort to privatize even 3% of SS. They don’t want to lose any control.

 

[JoeTheEconomist]

/——/ Not smart posting your real name on USMB.

I know I will regret asking.

Secondly, from the Heritage Foundation: “The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits.

The Heritage Foundation has fallen in recent times. It now proposes making SS just another welfare program. They want to continue to pay those at the front end of the program, by giving those coming up a crappy deal. If you are going to end it, just end it.

If that is a true worry. This should be terrifying. The Federal Reserve shows much the government has borrowed from China, but the ledgers at the Federal Reserve do not provide any way to finance the repayment of those loans.

The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs“ And that is the benefit to Uncle Sam running this scam. Why do you think they block every effort to privatize even 3% of SS. They don’t want to lose any control.

The money will have to come from higher taxes or less spending elsewhere. I think that is going to create significant pressure on the program in the future as younger Americans start to feel the pressure of repaying principal (a subject that rarely gets mentioned by anyone). You can't privatize a hole. The system has an unfunded liability of 12.5 trillion. Privatization isn't a very good idea. I have had this discussion before. Insurance manages risk. It is an expense. Personal accounts build wealth. This is an investment. These aren't the same thing. If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?

 

[Hutch Starskey]

What does this mean and what does it have to do with my post?

If you change it from everybody puts in, everybody gets out into
the people who put in twice as much don't get a larger benefit,
you've changed it into a welfare program. Screw enough of the people
and they'll vote against your new welfare program.

That's the way it already works. There is a maximum benefit. Once a person is fully insured, the benefit is the same regardless if someone else paid more into it over their lifetime.

That's the way it already works. There is a maximum benefit.

And if you remove the cap and keep the maximum benefit the same, it will be a welfare program.

What cap and who has proposed doing so?
It will never be a welfare program if people have to earn the benefit.

Todd is correct at this point. And it is a matter of degree. The program is supposed to be progressive, but it is not supposed to be an income transfer from rich to poor. At this point, rich (and likely average people for that matter) do not get a return on their contribution. On the last $1000 of wages, workers at the max pay a tax of $103 for retirement benefits. Their check increases (at most) $4.28 per year. That means that just to break-even the worker has to collect for 25 years, more than 5 years more than expectation. Mind you, after the 36th year of work that return drops a lot.

FDR rejected this model. So if you want a tax the rich and redistribute end SS and transfer the resources to an actual welfare program one that has a stated purpose so that we can confuse welfare with 'earned benefits'.

Tax the rich?

Only the first $117k of income is taxed.
That's rich now?

 

[JoeTheEconomist]

If you change it from everybody puts in, everybody gets out into
the people who put in twice as much don't get a larger benefit,
you've changed it into a welfare program. Screw enough of the people
and they'll vote against your new welfare program.

That's the way it already works. There is a maximum benefit. Once a person is fully insured, the benefit is the same regardless if someone else paid more into it over their lifetime.

That's the way it already works. There is a maximum benefit.

And if you remove the cap and keep the maximum benefit the same, it will be a welfare program.

What cap and who has proposed doing so?
It will never be a welfare program if people have to earn the benefit.

Todd is correct at this point. And it is a matter of degree. The program is supposed to be progressive, but it is not supposed to be an income transfer from rich to poor. At this point, rich (and likely average people for that matter) do not get a return on their contribution. On the last $1000 of wages, workers at the max pay a tax of $103 for retirement benefits. Their check increases (at most) $4.28 per year. That means that just to break-even the worker has to collect for 25 years, more than 5 years more than expectation. Mind you, after the 36th year of work that return drops a lot.

FDR rejected this model. So if you want a tax the rich and redistribute end SS and transfer the resources to an actual welfare program one that has a stated purpose so that we can confuse welfare with 'earned benefits'.

Tax the rich?

Only the first $117k of income is taxed.
That's rich now?

Social Security is highly progressive. It has reached a point where a good portion of the public loses money on the trade of payroll taxes for future benefits. This is the exact opposite of what FDR wanted.

I do not care whether you want to turn Social Security into a welfare program. A lot of people agree with you. I will tell you that the program was specifically designed to avoid what you are suggesting. So essentially, people like you hate the concept of Social Security. You want it to do something else, and do not want to advertise that you are hijacking the program in the process. If welfare is your goal, it is cheaper, faster, and infinitely more efficient to end SS and transfer the resources to an actual welfare program.

 

[Hutch Starskey]

That's the way it already works. There is a maximum benefit. Once a person is fully insured, the benefit is the same regardless if someone else paid more into it over their lifetime.

That's the way it already works. There is a maximum benefit.

And if you remove the cap and keep the maximum benefit the same, it will be a welfare program.

What cap and who has proposed doing so?
It will never be a welfare program if people have to earn the benefit.

Todd is correct at this point. And it is a matter of degree. The program is supposed to be progressive, but it is not supposed to be an income transfer from rich to poor. At this point, rich (and likely average people for that matter) do not get a return on their contribution. On the last $1000 of wages, workers at the max pay a tax of $103 for retirement benefits. Their check increases (at most) $4.28 per year. That means that just to break-even the worker has to collect for 25 years, more than 5 years more than expectation. Mind you, after the 36th year of work that return drops a lot.

FDR rejected this model. So if you want a tax the rich and redistribute end SS and transfer the resources to an actual welfare program one that has a stated purpose so that we can confuse welfare with 'earned benefits'.

Tax the rich?

Only the first $117k of income is taxed.
That's rich now?

Social Security is highly progressive. It has reached a point where a good portion of the public loses money on the trade of payroll taxes for future benefits. This is the exact opposite of what FDR wanted.

I do not care whether you want to turn Social Security into a welfare program. A lot of people agree with you. I will tell you that the program was specifically designed to avoid what you are suggesting. So essentially, people like you hate the concept of Social Security. You want it to do something else, and do not want to advertise that you are hijacking the program in the process. If welfare is your goal, it is cheaper, faster, and infinitely more efficient to end SS and transfer the resources to an actual welfare program.

It must be progressive as wages cover a wide range. Benefits are tied to contributions as they should be. It's intended as a safety net, not a complete retirement plan.

I have said nothing about making it a
"welfare" system or that I hate it.

There's nothing wrong with SS when all of it's parts work as intended. The problem is not generational, it's thirty plus years of rampant growth in income disparity.

How much in contributions and the associated interest are missing from the trust fund after thirty plus years of wage stagnation? More than enough that we wouldn't have any concerns over long term solvency now.

Republicans, who haven't made it a secret that they wish to end entitlements, just blew a huge hole in the deficit with tax cuts. Their plan asked no concessions from business that could have helped with wage growth which, in turn would have assured solvency much further into the future. They have done the opposite. They've set the stage for phase one of the dismantling of the programs altogether.

 

[JoeTheEconomist]

It must be progressive as wages cover a wide range. Benefits are tied to contributions as they should be. It's intended as a safety net, not a complete retirement plan.

I have said nothing about making it a
"welfare" system or that I hate it.

There's nothing wrong with SS when all of it's parts work as intended. The problem is not generational, it's thirty plus years of rampant growth in income disparity.

How much in contributions and the associated interest are missing from the trust fund after thirty plus years of wage stagnation? More than enough that we wouldn't have any concerns over long term solvency now.

Republicans, who haven't made it a secret that they wish to end entitlements, just blew a huge hole in the deficit with tax cuts. Their plan asked no concessions from business that could have helped with wage growth which, in turn would have assured solvency much further into the future. They have done the opposite. They've set the stage for phase one of the dismantling of the programs altogether.

I write on the issue to bring facts to readers in terms that lay people understand. In all honesty your entire post is simply a reflection of ignorance of the system's finances, history, and mechanics.

It must be progressive as wages cover a wide range. Benefits are tied to contributions as they should be. It's intended as a safety net, not a complete retirement plan.

Social Security isn't a safety-net, and FDR specifically said it shouldn't be a safety-net. You want it to be a safety-net, but do not want to admit that you don't like what the program is actually supposed to do. The system is progressive. You have to pay at a higher rate as benefit levels increase. This doesn't mean that you are supposed to pay for someone else's benefits.

I have said nothing about making it a "welfare" system or that I hate it.

True. That would be the full-disclosure. You are simply re-writing the historic and mechanics of the system to fit your world view.

There's nothing wrong with SS when all of it's parts work as intended. The problem is not generational, it's thirty plus years of rampant growth in income disparity.How much in contributions and the associated interest are missing from the trust fund after thirty plus years of wage stagnation? More than enough that we wouldn't have any concerns over long term solvency now.

This is the cliche that ruins the future of the system. Social Security isn't the victim of wage-stagnation it is likely the cause of it. That and the rising cost of healthcare both of which disproportionally affect the wages of workers. The claim that wages are missing because of "wage-stagnation" is non-sense. Let's keep in mind that average wages as tracked by the SSA have risen faster than inflation for nearly 30 years.

Republicans, who haven't made it a secret that they wish to end entitlements, just blew a huge hole in the deficit with tax cuts. Their plan asked no concessions from business that could have helped with wage growth which, in turn would have assured solvency much further into the future. They have done the opposite. They've set the stage for phase one of the dismantling of the programs altogether.

This is the ideological non-sense that creates the polarized standstill that we call the Social Security debate. The GOP does not agree with your new direction for the program, and so you say that they want to dismantle it. Blah, blah, blah...

 

[Hutch Starskey]

It must be progressive as wages cover a wide range. Benefits are tied to contributions as they should be. It's intended as a safety net, not a complete retirement plan.

I have said nothing about making it a
"welfare" system or that I hate it.

There's nothing wrong with SS when all of it's parts work as intended. The problem is not generational, it's thirty plus years of rampant growth in income disparity.

How much in contributions and the associated interest are missing from the trust fund after thirty plus years of wage stagnation? More than enough that we wouldn't have any concerns over long term solvency now.

Republicans, who haven't made it a secret that they wish to end entitlements, just blew a huge hole in the deficit with tax cuts. Their plan asked no concessions from business that could have helped with wage growth which, in turn would have assured solvency much further into the future. They have done the opposite. They've set the stage for phase one of the dismantling of the programs altogether.

I write on the issue to bring facts to readers in terms that lay people understand. In all honesty your entire post is simply a reflection of ignorance of the system's finances, history, and mechanics.

It must be progressive as wages cover a wide range. Benefits are tied to contributions as they should be. It's intended as a safety net, not a complete retirement plan.

Social Security isn't a safety-net, and FDR specifically said it shouldn't be a safety-net. You want it to be a safety-net, but do not want to admit that you don't like what the program is actually supposed to do. The system is progressive. You have to pay at a higher rate as benefit levels increase. This doesn't mean that you are supposed to pay for someone else's benefits.

I have said nothing about making it a "welfare" system or that I hate it.

True. That would be the full-disclosure. You are simply re-writing the historic and mechanics of the system to fit your world view.

There's nothing wrong with SS when all of it's parts work as intended. The problem is not generational, it's thirty plus years of rampant growth in income disparity.How much in contributions and the associated interest are missing from the trust fund after thirty plus years of wage stagnation? More than enough that we wouldn't have any concerns over long term solvency now.

This is the cliche that ruins the future of the system. Social Security isn't the victim of wage-stagnation it is likely the cause of it. That and the rising cost of healthcare both of which disproportionally affect the wages of workers. The claim that wages are missing because of "wage-stagnation" is non-sense. Let's keep in mind that average wages as tracked by the SSA have risen faster than inflation for nearly 30 years.

Republicans, who haven't made it a secret that they wish to end entitlements, just blew a huge hole in the deficit with tax cuts. Their plan asked no concessions from business that could have helped with wage growth which, in turn would have assured solvency much further into the future. They have done the opposite. They've set the stage for phase one of the dismantling of the programs altogether.

This is the ideological non-sense that creates the polarized standstill that we call the Social Security debate. The GOP does not agree with your new direction for the program, and so you say that they want to dismantle it. Blah, blah, blah...

Who is " paying for someone else's benefit"?



You fancy yourself as some sort of "economist". You're not. You're clueless, dude.

If wages are flat for three decades, so are contributions.

You simply cannot ignore that fact when the solvency of the entire system is based on those contributions.


You're just another self-deluded pontificator.

 

[Cellblock2429]

/——/ Not smart posting your real name on USMB.

I know I will regret asking.

Secondly, from the Heritage Foundation: “The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits.

The Heritage Foundation has fallen in recent times. It now proposes making SS just another welfare program. They want to continue to pay those at the front end of the program, by giving those coming up a crappy deal. If you are going to end it, just end it.

If that is a true worry. This should be terrifying. The Federal Reserve shows much the government has borrowed from China, but the ledgers at the Federal Reserve do not provide any way to finance the repayment of those loans.

The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs“ And that is the benefit to Uncle Sam running this scam. Why do you think they block every effort to privatize even 3% of SS. They don’t want to lose any control.

The money will have to come from higher taxes or less spending elsewhere. I think that is going to create significant pressure on the program in the future as younger Americans start to feel the pressure of repaying principal (a subject that rarely gets mentioned by anyone). You can't privatize a hole. The system has an unfunded liability of 12.5 trillion. Privatization isn't a very good idea. I have had this discussion before. Insurance manages risk. It is an expense. Personal accounts build wealth. This is an investment. These aren't the same thing. If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?

/----/ " If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?" Actually I've done it my adult life. You see if my car is older than 6 years, I drop fire, theft, glass and collision and insure myself with the savings from the premiums. On new cars, I increase the deductible to $1,000 for additional savings. All I asked was to be allowed to invest 3 - 5% of my social security deductions into something like the S&P 500 since I started working in 1970.

 

[JoeTheEconomist]

/——/ Not smart posting your real name on USMB.

I know I will regret asking.

Secondly, from the Heritage Foundation: “The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits.

The Heritage Foundation has fallen in recent times. It now proposes making SS just another welfare program. They want to continue to pay those at the front end of the program, by giving those coming up a crappy deal. If you are going to end it, just end it.

If that is a true worry. This should be terrifying. The Federal Reserve shows much the government has borrowed from China, but the ledgers at the Federal Reserve do not provide any way to finance the repayment of those loans.

The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs“ And that is the benefit to Uncle Sam running this scam. Why do you think they block every effort to privatize even 3% of SS. They don’t want to lose any control.

The money will have to come from higher taxes or less spending elsewhere. I think that is going to create significant pressure on the program in the future as younger Americans start to feel the pressure of repaying principal (a subject that rarely gets mentioned by anyone). You can't privatize a hole. The system has an unfunded liability of 12.5 trillion. Privatization isn't a very good idea. I have had this discussion before. Insurance manages risk. It is an expense. Personal accounts build wealth. This is an investment. These aren't the same thing. If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?

/----/ " If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?" Actually I've done it my adult life. You see if my car is older than 6 years, I drop fire, theft, glass and collision and insure myself with the savings from the premiums. On new cars, I increase the deductible to $1,000 for additional savings. All I asked was to be allowed to invest 3 - 5% of my social security deductions into something like the S&P 500 since I started working in 1970.

View attachment 170748

We both do that. But you are limiting your fire risk, not your accident risk.

I happen to be writing a piece on the returns of someone who started work in 1972. It is surprising to me anyway. The math here is not hard to understand. Every dollar of tax that you divert to a personal account has to replaced by a dollar of tax with a different name. Given your situation, that means you are apt to lose more than the dollar you save.