3 Statistics About Social Security That Are Frightening

[JoeTheEconomist]

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.

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

I am going to pass on this at this point. I don't sense you have a strong background on the mechanics of the system.


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

The SSA says that they aren't. Here are average wages :

National Average Wage Index

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.

No because contributions are a function of number of workers as well. Even if you were correct about wages (and you aren't), contributions would rise because of the rising number of workers. Moreover, benefits are indexed to wages. So as wages rise there is nothing that stops the system from distributing the increase in the form of higher benefits.

You're just another self-deluded pontificator.

I just get my data from the SSA. Maybe they are deluded as well.

 

[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.

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.

/----/ It's a moot point since it will never happen.

 

[mikegriffith1]

The government began raiding the SS trust fund in the '90s, and it has never stopped. This is why Democrats won't even support making a SS account for each taxpayer and allowing each taxpayer to be able to check on and update his SS account.

 

[JoeTheEconomist]

The government began raiding the SS trust fund in the '90s, and it has never stopped. This is why Democrats won't even support making a SS account for each taxpayer and allowing each taxpayer to be able to check on and update his SS account.

Mike this is a myth. We think that the Trust Fund is large. Most of the money in the Trust Fund is interest and interest on interest. $1.9 trillion. That is an expense to the government, not money that it can borrow. The $1.9 trillion is money that SS collected as a credit. We can't borrow what we have already spent on interest. More than half of the rest is subsidies TO the system. In English, every penny of excess contribution ever borrowed by the government was spent on one program : Social Security.

This is a column I contributed to MoneyTips this morning. It runs through the cash flows if you want the longer version.

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

 

[Toddsterpatriot]

The government began raiding the SS trust fund in the '90s, and it has never stopped. This is why Democrats won't even support making a SS account for each taxpayer and allowing each taxpayer to be able to check on and update his SS account.

The government began raiding the SS trust fund in the '90s, and it has never stopped.

What do you mean by "raiding"?
They've always put "excess receipts" into US Treasuries.

 

[mikegriffith1]

Here's a good fact-checking article on some myths about Social Security:

Social Security History

 

[Markle]

If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?

I do, I paid cash for my cars except two I bought decades ago. One was because I was the broker of a successful real estate company which was part of a group. My agents shamed me into a new car since I was driving my toy, a "66 Goat. They said a loud, overpowered muscle car didn't have the image of a successful Realtor. The other was when, through a loophole in the tax law, if I bought a truck over 6,000# I could get a $25,000 tax deduction. The large SUV's qualified. So, though I didn't want one, I bought a Cadillac Escalade. After three years, I dropped collision and comprehensive. I've saved tens of thousands over the years.

 

[Markle]

The government began raiding the SS trust fund in the '90s, and it has never stopped. This is why Democrats won't even support making a SS account for each taxpayer and allowing each taxpayer to be able to check on and update his SS account.

Every taxpayer can check on their SS account any time they wish.

 

[Markle]

The government began raiding the SS trust fund in the '90s, and it has never stopped. This is why Democrats won't even support making a SS account for each taxpayer and allowing each taxpayer to be able to check on and update his SS account.

The government began raiding the SS trust fund in the '90s, and it has never stopped.

What do you mean by "raiding"?
They've always put "excess receipts" into US Treasuries.

True! 100%

Q: Which Political Party took Social Security from the independent “Trust” fund and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically-controlled House and Senate.

As noted above, the monies paid into the Social Security trust have never been “put into the general fund.” The requirements for how the Social Security Trust Fund is to be financed and invested have not changed since the fund’s inception in 1939. The reference to Lyndon Johnson indicates that someone was probably confused by a change implemented at the end of the Johnson administration (1969) that altered how the fund was accounted for in the federal budget but did not change the actual operations of the fund itself:

Beginning in fiscal year 1969, Social Security and other Federal programs that operate through trust funds were counted officially in the budget. This was done administratively by President Johnson. At the time Congress did not have a budget-making process. In 1974 Congress adopted procedures for setting budget goals through passage of annual budget resolutions. Like the budgets prepared by the President, these resolutions were to reflect a “unified” budget that included trust fund programs such as Social Security in the budget totals.

Beginning in the late 1970s, Social Security faced financial problems, and over a period of time legislation was enacted to restore the financial health of the program. However, because the Federal budget deficit remained large, interest in reducing Social Security spending continued. This routine consideration of Social Security constraints led to concerns that cuts in Social Security were being proposed for budgetary purposes rather than programmatic ones.

In response to this concern, a series of measures were enacted in 1983, 1985, and 1987 making the program a more distinct part of the budget and permitting Congressional floor objections (points of order) to be raised against budget bills containing Social Security changes.

[...]

Social Security Changes

 

[Cellblock2429]

The government began raiding the SS trust fund in the '90s, and it has never stopped. This is why Democrats won't even support making a SS account for each taxpayer and allowing each taxpayer to be able to check on and update his SS account.

/----/ My wife and I received a statement yearly from SS until we started collecting.

 

[Skull Pilot]

Social Security is designed to keep people dependent on the government.

If you took all the money you and your employers pay into the SS slush fund over your working lifetime and invested it in a balanced portfolio you would be able to retire with far more money and actually in many cases have a nice inheritance to leave to your family

 

[Cellblock2429]

Social Security is designed to keep people dependent on the government.

If you took all the money you and your employers pay into the SS slush fund over your working lifetime and invested it in a balanced portfolio you would be able to retire with far more money and actually in many cases have a nice inheritance to leave to your family

/----/ And 3 counties in Texas were allowed to opt out of SS. They are in better shape now than those stuck with SS:
How Three Texas Counties Created Personal Social Security Accounts and Prospered
And those who retire under the Galveston model do much better than Social Security. For example:

A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financial’s calculations.
A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.
And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan.
Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.

 

[JoeTheEconomist]

If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?

I do, I paid cash for my cars except two I bought decades ago. One was because I was the broker of a successful real estate company which was part of a group. My agents shamed me into a new car since I was driving my toy, a "66 Goat. They said a loud, overpowered muscle car didn't have the image of a successful Realtor. The other was when, through a loophole in the tax law, if I bought a truck over 6,000# I could get a $25,000 tax deduction. The large SUV's qualified. So, though I didn't want one, I bought a Cadillac Escalade. After three years, I dropped collision and comprehensive. I've saved tens of thousands over the years.

We have a very similar approach to life, but you still have auto insurance not a personal auto wreck account. Who pays for the medical costs of an accident? This is where the big money is not in comp and collision.

You are absorbing the cost of risk yourself. You are not 'saving' money by self-insuring. You are saving money by not having accidents. You simply believe that the insurance company cannot assess risk as well as you can. Insurance is the most effective way to manage risk. Savings is a personal choice (and a wise one).

FYI, I am not a fan of insurance companies because they do a crappy job of assessing risk.

 

[JoeTheEconomist]

Social Security is designed to keep people dependent on the government.

If you took all the money you and your employers pay into the SS slush fund over your working lifetime and invested it in a balanced portfolio you would be able to retire with far more money and actually in many cases have a nice inheritance to leave to your family

I happen to be writing on this question at the moment, and I suspect that you will be surprised.

 

[Markle]

If you think personal accounts are such a good idea, why don't you have a personal auto wreck account?

I do, I paid cash for my cars except two I bought decades ago. One was because I was the broker of a successful real estate company which was part of a group. My agents shamed me into a new car since I was driving my toy, a "66 Goat. They said a loud, overpowered muscle car didn't have the image of a successful Realtor. The other was when, through a loophole in the tax law, if I bought a truck over 6,000# I could get a $25,000 tax deduction. The large SUV's qualified. So, though I didn't want one, I bought a Cadillac Escalade. After three years, I dropped collision and comprehensive. I've saved tens of thousands over the years.

We have a very similar approach to life, but you still have auto insurance not a personal auto wreck account. Who pays for the medical costs of an accident? This is where the big money is not in comp and collision.

You are absorbing the cost of risk yourself. You are not 'saving' money by self-insuring. You are saving money by not having accidents. You simply believe that the insurance company cannot assess risk as well as you can. Insurance is the most effective way to manage risk. Savings is a personal choice (and a wise one).

FYI, I am not a fan of insurance companies because they do a crappy job of assessing risk.

I carry the insurance I am required to carry and I carry far in excess of the minimum for liability. It is not that much more than the minimum plus I use my car in my business. I am a Realtor.

I'm happy with insurance companies. I pay them to take the risk. Seems fair to me.

 

[Kondor3]

Not to worry.

The next time Democrats gain office, they'll just tax the $hit out of the rich and Big Business and make up the shortfall.

 

[Markle]

Not to worry.

The next time Democrats gain office, they'll just tax the $hit out of the rich and Big Business and make up the shortfall.

Keep that up on as many threads as you can!

Great advertising or Republicans!