Social Security and Medicare shortfalls

[BruceWayne]

You realize where the US gets the money to "pay" back on the bills? Taxes...... No amount of paper is gonna be around to pay back the IOU's for the funds taken.

The ENTIRE point of raising taxes in the 80's was because in the future there would be no money to cover the program. The point was to raise money NOW and invest it OUTSIDE a tax base or hold it unspent.

Put on your little beanie and think for a second. If in 2040 we won't have the tax base to pay for Social Security, HOW exactly will the government have the tax base to pay back the money it took and covered with T bills? Not only will the Government now need the money it was supposed to be saving or investing but since it SPENT it now it needs to both pay it back AND give it out in Social Security payments. With the same tax base that won't be able to pay Social Security.

You seem to be very confused. The trust fund (according to current projections) will begin being spent in 2017, not 2040. It should be gone by 2042. I don't expect that the US government will have any problem paying it back over that time frame, do you?

 

[jreeves]

You seem to be very confused. The trust fund (according to current projections) will begin being spent in 2017, not 2040. It should be gone by 2042. I don't expect that the US government will have any problem paying it back over that time frame, do you?

http://www.centrists.org/pages/2003/12/1_guest_budget.html
By comparison, total federal spending is about 21 percent of GDP currently. Therefore, spending for the four largest entitlements currently encompasses about half of the budget. But by 2030, Social Security, Medicare, Medicaid, and Interest would together account for more than the whole current budget.


Yeah and here is the consquences of paying that debt back.

 

[jeffex]

every election cycle both sides bring out the social security scare tactics. they all claim to have a plan to do something about it "for our children and grandchildren". It is a proven election hot topic and a sure vote getter. As we have seen with the mortgage crisis and the bears and stearns buyout as well as the S&L bailout , just print more money. Thats the reality and thats why my first car in 1975 cost $2737.49 brand new on the road and that money today will get you a lawn mower at home depot. I believe in the tooth fairy more than I believe statistics printed by the gov. or any other selfserving entity trying to sell their side . Who realy knows. If all you have is a dependency on SS for your retirement then your F-ed any way and will be working the day you die.

 

[jreeves]

every election cycle both sides bring out the social security scare tactics. they all claim to have a plan to do something about it "for our children and grandchildren". It is a proven election hot topic and a sure vote getter. As we have seen with the mortgage crisis and the bears and stearns buyout as well as the S&L bailout , just print more money. Thats the reality and thats why my first car in 1975 cost $2737.49 brand new on the road and that money today will get you a lawn mower at home depot. I believe in the tooth fairy more than I believe statistics printed by the gov. or any other selfserving entity trying to sell their side . Who realy knows. If all you have is a dependency on SS for your retirement then your F-ed any way and will be working the day you die.

I agree politicians have said they are going to fix it every election cycle. Yet it's still doomed for failure. A centrist website is hardly partisian. I agree if your depending on SS you are screwed, that's my point. SS will go bankrupt, its not a matter if, its a matter of when. Although the government has no problem mandating that you pay SS taxes when study after study show it's doomed.

 

[BruceWayne]

I agree politicians have said they are going to fix it every election cycle. Yet it's still doomed for failure. A centrist website is hardly partisian. I agree if your depending on SS you are screwed, that's my point. SS will go bankrupt, its not a matter if, its a matter of when. Although the government has no problem mandating that you pay SS taxes when study after study show it's doomed.

I would hardly say it's doomed. IIRC, an increase of SS taxes by ~15% now would solve the problem indefinitely, as would eliminating the salary cap, as would any other number of small changes.

And if you're going to claim that SS is bankrupt because its surplus is depleted, then this country has been bankrupt (running deficits) for two centuries without any real problems (particularly paying back its debt).

You're being an alarmist.

 

[jillian]

You're being an alarmist.

Nah... he's being a government-hating right winger. They've been trying to kill social security since Roosevelt was president.

 

[BruceWayne]

Nah... he's being a government-hating right winger. They've been trying to kill social security since Roosevelt was president.

I can't really fault him... it's an extremely expensive socialist program.

But one should argue its merits/costs, not doom and gloom about it.

 

[Paulie]

every election cycle both sides bring out the social security scare tactics. they all claim to have a plan to do something about it "for our children and grandchildren". It is a proven election hot topic and a sure vote getter. As we have seen with the mortgage crisis and the bears and stearns buyout as well as the S&L bailout , just print more money. Thats the reality and thats why my first car in 1975 cost $2737.49 brand new on the road and that money today will get you a lawn mower at home depot. I believe in the tooth fairy more than I believe statistics printed by the gov. or any other selfserving entity trying to sell their side . Who realy knows. If all you have is a dependency on SS for your retirement then your F-ed any way and will be working the day you die.

This ends the thread right here. None of you made a better argument than this right here.

You can't argue about economics if you don't include money printing and inflation among the problems. We're printing money to bail-out private banks, and we're ultimately going to be taxed that money now, and we DEFINITELY didn't have representation on THAT.

We're printing money to "stimulate our economy", and it's being handed out to the most fiscally irresponsible people on the planet, the American public.

All the while, our dollar is dropping like a stone, and even the Federal Reserve chairman has a frightened look on his face. He can't hide it, it shows right through.

Social Security makes for a great debate and all, but there are far more important things that we need to be addressing.

The Federal Reserve's gotta go. Don't be afraid of that. It's our money, not a bunch of bankers'.

 

[jeffex]

W's proposal for what amounts to 401K type accounts for a portion of every taxpayers retirement is a reasonable alternative to workers who's employer does NOT offer such benefits. The same problem of beaurocracy and potential for corruption are inherant for any gov. run entity. Private accounts with gov. oversite and transparency. Using modern technology like DNA identification to assure validity of account owner and de-centralizing mgt of accounts within the private sector. Some of your eggs in many baskets . I am a free market type that believes the gov. has a role of refferee to make sure people follow the rules and play nice. the forclosure bebacle is proof that the FED is just another failed beaurocracy. Who needs a watchdog that needs feeding and care but is asleep when the breakin accurrs? The private interest groups hire lobbyists to represent their interests at a cost to the general interest of most Americans. We elect reps who are SUPPOSED to represent the common voter-taxpayer . What we need is a USMESSAGE BOARDS lobbyist to get US special tax breaks , kickbacks, pork barrel goodies, and oh yeah sign me up for congress' health care system.

 

[Paulie]

What we need is a USMESSAGE BOARDS lobbyist to get US special tax breaks , kickbacks, pork barrel goodies, and oh yeah sign me up for congress' health care system.

What do WE have to offer? That shit don't come free.

 

[jeffex]

START A PAY-PAL ACCOUNT and upload the bucks that is all a lobbyist knows. What are the #s of members ? can we vote as one? I believe our gov. and its elected officials count on Americans to bicker about minor things while they rob the store. Thats the big SS bomb they toss in at election time to keep us busy as voters fighting over dem . or rep. They are all masters of deception. Many people like to look back and see where things went wrong and as soon as fault is applied the inquistion is over. Where SHOULD we go now is my thought process. look at how much money ron paul raised in a day on the internet with very little chance of being elected. Pent up anger generates money.

 

[jreeves]

I would hardly say it's doomed. IIRC, an increase of SS taxes by ~15% now would solve the problem indefinitely, as would eliminating the salary cap, as would any other number of small changes.

And if you're going to claim that SS is bankrupt because its surplus is depleted, then this country has been bankrupt (running deficits) for two centuries without any real problems (particularly paying back its debt).

You're being an alarmist.

This letter responds to your inquiry regarding the state of America’s entitlement
programs and the effect of the future growth of those programs on the economy.
In fiscal year 2007, spending by the federal government will amount to $2.7 trillion,
or one-fifth of the nation’s economic output, the Congressional Budget Office
(CBO) projects. The three major federal entitlement programs------Medicare,
Medicaid, and Social Security------will account for about 45 percent of those outlays,
or about 9 percent of gross domestic product (GDP). If policymakers leave current
laws unchanged, federal outlays will claim a sharply increasing share of the nation’s
output over coming decades, driven primarily by growth in the health-related
entitlement programs.1
Many observers have noted that the aging of the population increases spending in
all three major entitlement programs. Today, for every person age 65 or older,
there are five people 20 to 64 years old. That figure is projected to fall to below
three by 2030. Even after the retirement of the baby-boom generation, the
population will continue to age, demographers project, as life expectancy
continues to increase and fertility rates remain low by historical standards.
The aging of the population is not the primary factor affecting the growth of
entitlement programs, however. Instead, the most important cause is the projected
increase in health care costs. Federal health spending, mostly in the Medicare and
Medicaid programs, has been consuming a growing share of the nation’s
economic output for several decades. Costs per beneficiary, even after adjusting
for changes in the population, have, on average, increased about 2.5 percentage
points faster than has average per capita GDP.2 The rate of growth in health costs
is unusually difficult to project, but even if growth falls well below historical
levels, spending on Medicare and Medicaid will continue to grow faster than the
economy and faster than other major government programs.
1. See Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2008
to 2017 (January 2007) and The Long-Term Budget Outlook (December 2005).
2. See “The Growth of Health Care Costs,” Box 1-3 in CBO’s The Long-Term Budget
Outlook.
Honorable Jeb Hensarling
Page 2
CBO has produced estimates of long-term outlays and revenues under various
scenarios, most recently in its December 2005 Long-Term Budget Outlook. That
report included three scenarios for the rates of increase in Medicare and Medicaid
spending. The low-cost scenario illustrates the relatively small increase that will
result from only the aging of the population. The intermediate scenario assumes
that expenditures per beneficiary will continue to grow but slow from current
rates to 1 percentage point above per capita GDP growth, a level consistent with
the intermediate assumption used by the Medicare trustees. Under that scenario,
Medicare and Medicaid spending would grow from about 4.5 percent of GDP
today to about 9 percent of GDP in 2030. And the high-cost scenario assumes that
future growth will be consistent with the historical average, with costs growing at
2.5 percentage points above the growth in per capita GDP. Outlays on Medicare
and Medicaid would then approach 12 percent of GDP in 2030. (See Figure 1.)
Relative to the range of projected increases for Medicare and Medicaid, projected
spending increases for Social Security as a share of the economy are smaller; they
are driven primarily by aging. CBO projects that those costs will grow from 4.3
percent of GDP today to 6.2 percent in 2030.

http://www.cbo.gov/ftpdocs/78xx/doc7851/03-08-Long-Term Spending.pdf

No I'm not being an alarmist, just a realist. The CBO recognizes entitlement spending is a huge problem, they are political cowards and have no backbone to do anything about the problem.

 

[jreeves]

This ends the thread right here. None of you made a better argument than this right here.

You can't argue about economics if you don't include money printing and inflation among the problems. We're printing money to bail-out private banks, and we're ultimately going to be taxed that money now, and we DEFINITELY didn't have representation on THAT.

We're printing money to "stimulate our economy", and it's being handed out to the most fiscally irresponsible people on the planet, the American public.

All the while, our dollar is dropping like a stone, and even the Federal Reserve chairman has a frightened look on his face. He can't hide it, it shows right through.

Social Security makes for a great debate and all, but there are far more important things that we need to be addressing.

The Federal Reserve's gotta go. Don't be afraid of that. It's our money, not a bunch of bankers'.

Entitlement spending is the issue, Medicare, Medicaid, Social Security and Interest payments on the national debt. Unless we curtail spending on these four areas, the country will go bankrupt. It's not doom and gloom it's reality. There's a reason the dollar has been dropping like a stone, it's called defecit spending.

 

[BruceWayne]

Entitlement spending is the issue, Medicare, Medicaid, Social Security and Interest payments on the national debt. Unless we curtail spending on these four areas, the country will go bankrupt. It's not doom and gloom it's reality. There's a reason the dollar has been dropping like a stone, it's called defecit spending.

Why do you list interest payments as entitlement spending, and how would you plan on curtailing spending on it? Default on the debt??

 

[jreeves]

Why do you list interest payments as entitlement spending, and how would you plan on curtailing spending on it? Default on the debt??

No, by balancing the budget. That's one part of the entitlement spending that definetly can be controlled. By balancing the budget you eliminate growth of that expense. This takes sacrifice not just lip service. Discretionary spending as well as growth of current governmental programs is the best way to control interest payments. By balancing the budget you could actually shrink spending in the future, which would leave more money for future spending.

 

[jreeves]

I would hardly say it's doomed. IIRC, an increase of SS taxes by ~15% now would solve the problem indefinitely, as would eliminating the salary cap, as would any other number of small changes.

And if you're going to claim that SS is bankrupt because its surplus is depleted, then this country has been bankrupt (running deficits) for two centuries without any real problems (particularly paying back its debt).

You're being an alarmist.

What implications would raising Social Security taxes by 15 percent have on small business and individuals paying the tax? I don't know if you are aware Social Security taxes are paid half by individuals and half by businesses. Would that not curtail spending by consumers and businesses which would shrink the overall pool of taxes collected?

 

[jreeves]

What implications would raising Social Security taxes by 15 percent have on small business and individuals paying the tax? I don't know if you are aware Social Security taxes are paid half by individuals and half by businesses. Would that not curtail spending by consumers and businesses which would shrink the overall pool of taxes collected?

Eliminating the current cap at around 98 k per year would have a similar effect on the economy as raising the rate by 15 percent. In addition, Social Security taxes collected on individuals who make more than 98k would not be returned to the individuals paying this extra tax in the form of Social Security payments.

 

[Paulie]

Entitlement spending is the issue, Medicare, Medicaid, Social Security and Interest payments on the national debt. Unless we curtail spending on these four areas, the country will go bankrupt. It's not doom and gloom it's reality. There's a reason the dollar has been dropping like a stone, it's called defecit spending.

You're partly right. But it's not merely deficit spending that caused the drop. It's our monetary policy overall.

You also can't just say that everyone who's been conditioned to be dependent on the social handout system has to all the sudden take the loss and deal with it, while we cut all the programs they've been dependent on, and meanwhile we continue policing the entire world, spending a Trillion dollars a year doing it.

To say that, it means you think that our own citizens should be damned, while we continue spending money we don't even have, making a better life for people in OTHER countries INSTEAD. Just like since the New Deal, we've been slowly conditioned to be dependent on the government, we need to reverse that, and slowly start conditioning people to be responsible for themselves again. You can't just cut all the programs and say oh well, deal with it. There needs to be a transition period, and probably a LONG one.

There should be cuts in spending in ALL areas, not just entitlements. We should stop bombing countries and rebuilding THEIR towns and infrastructures, and instead work on OUR infrastructures.

Just because you're scared of terrorists, doesn't mean our country should go bankrupt building nations while simultaneously saying FUCK YOU to our own citizens. I don't like the entitlement spending any mroe than you do, believe me, but it's not morally right to cut our OWN citizens off and continue funding FOREIGN citizens. I mean, you might as well just agree with amnesty for illegal immigrants too.

 

[jreeves]

You're partly right. But it's not merely deficit spending that caused the drop. It's our monetary policy overall.

You also can't just say that everyone who's been conditioned to be dependent on the social handout system has to all the sudden take the loss and deal with it, while we cut all the programs they've been dependent on, and meanwhile we continue policing the entire world, spending a Trillion dollars a year doing it.

To say that, it means you think that our own citizens should be damned, while we continue spending money we don't even have, making a better life for people in OTHER countries INSTEAD. Just like since the New Deal, we've been slowly conditioned to be dependent on the government, we need to reverse that, and slowly start conditioning people to be responsible for themselves again. You can't just cut all the programs and say oh well, deal with it. There needs to be a transition period, and probably a LONG one.

There should be cuts in spending in ALL areas, not just entitlements. We should stop bombing countries and rebuilding THEIR towns and infrastructures, and instead work on OUR infrastructures.

Just because you're scared of terrorists, doesn't mean our country should go bankrupt building nations while simultaneously saying FUCK YOU to our own citizens. I don't like the entitlement spending any mroe than you do, believe me, but it's not morally right to cut our OWN citizens off and continue funding FOREIGN citizens. I mean, you might as well just agree with amnesty for illegal immigrants too.

I'm not saying fuck our own citizens, the best way to get people independent and off government assistance is to grow our economy. Simply taking money and setting it aside for welfare, entitlements and the such does nothing but foster future generations a sense of entitlement. I think your assesment of the cost of the war is mistaken. The wars as of this year have cost about 780 billion dollars. That is spread out over a period of 5 years. Social spending has trumped that by leaps and margins in one year alone.

The net effect of spending over 50 percent of the national budget on social programs is an economy that doesn't fully recognize market factors and an economy that is missing incentatives. In this type of economy why do I want to make, for instance, 100,000 dollars if the government is going to take a huge chunk of that and redistribute that money to lower classes. Where are the incentatives for the American worker? Where are the incentatives for companies to stay in America when they have to pay the second highest taxes in the world? Shouldn't we be trying to increase business in the US not prohibit it, through heavy taxation and over regulation? Wouldn't the neediest in our society have a better chance in suceeding if they could find a job readily?

As far as foriegn aid, no I believe the money should stay right here in our borders. Now with that being said, in Iraq and Afgan., there has to be some reconstruction or else terrorist organizations will come in and rebuild for them. This would have devastating effect on US foriegn policy and our national security. These organizations would become heros in the eyes of the Iraqis and Afgans.

 

[Paulie]

I'm not saying fuck our own citizens, the best way to get people independent and off government assistance is to grow our economy. Simply taking money and setting it aside for welfare, entitlements and the such does nothing but foster future generations a sense of entitlement. I think your assesment of the cost of the war is mistaken. The wars as of this year have cost about 780 billion dollars. That is spread out over a period of 5 years. Social spending has trumped that by leaps and margins in one year alone.

I wasn't just talking about the war, I'm talking about our entire yearly defense budget. We could save 10's of billions, if not 100's, if we simply closed some of the bases around the world that aren't really doing us any good. I'm sure you would argue, but I don't see where we still need to be established in Korea and Japan, for starters.

The net effect of spending over 50 percent of the national budget on social programs is an economy that doesn't fully recognize market factors and an economy that is missing incentatives. In this type of economy why do I want to make, for instance, 100,000 dollars if the government is going to take a huge chunk of that and redistribute that money to lower classes. Where are the incentatives for the American worker? Where are the incentatives for companies to stay in America when they have to pay the second highest taxes in the world? Shouldn't we be trying to increase business in the US not prohibit it, through heavy taxation and over regulation? Wouldn't the neediest in our society have a better chance in suceeding if they could find a job readily?

Well, maybe this helps you recognize why there are so many people who think our government, and people in elite circles, are doing this on PURPOSE. With all that knowledge, and all those brilliant minds, how could it be possible that our government is really that clueless? You mean to tell me that a bunch of anonymous internet message board posters know what the problem is, but people who've been highly educated and are tasked with fixing it DON'T?

There's 2 possible explanations. The system's been so fucked from the inside out, that they don't KNOW how to fix it anymore, or they're screwing us on purpose. I haven't decided yet, but either way we're fucked.

in Iraq and Afgan., there has to be some reconstruction or else terrorist organizations will come in and rebuild for them.

Everything you said sounded great until this. You sound like any one of those other 2-bit pundits on the MSM talking out their asses while trying to sound like they're intelligent. You say this with absolutely no basis other than your opinion, which has obviously been persuaded by OTHER opinions.