There Is No Social Security Solvency Crisis. Why Is MSNBC Telling Us Otherwise?

[hadit]

It’s one thing for Republicans to threaten Social Security. It’s another for our “liberal” media to aid and abet them by pushing the false narrative that Social Security has a “solvency crisis.”

The Myth of Social Security Insolvency

Economist Stephanie Kelton destroys this myth in her book, In The Deficit Myth, recently chosen by BookAuthoirity.org as No. 1 on a list of the Best Economic Theory Books of All Time:


FDR designed Social Security with FICA contributions and trust funds to gain popular support of the programs. People would “see” the funds were there to pay the benefits. But now, people “see” or are being told to “see” the funds are not there.

So what would we do to provide for if and when Social Security benefits exceed the contributions?

What can be done

Congress can pass a law today providing that full Social Security benefits will be paid even if the Trust Fund is exhausted.

Wait! They can do that?

Not only can they, but they already do it for Medicare Parts B and D. Unlike the trust funds for Social Security and Medicare A and C, the Trust Fund for Parts B and D (“SMI”) has the authority to pay full benefits from general federal government funds. So the same Social Security and Medicare Trustees report containing scary predictions for Social Security and Medicare A and C states: “For SMI, the Trustees project that both Part B and Part D will remain adequately financed into the indefinite future because current law provides financing.” As Kelton writes, “That keeps SMI financially secure to infinity and beyond!”

All Congress would have to do is apply the provisions of SMI to the other Social Security and Medicare Trust Funds and every one of MacGuineas statements falls.

• We can afford to pay for all benefits to current and future retirees even if contributions lag benefits.
• There is no reason to cut benefits, now or in the future, or even to raise taxes, now or in the future.
• Not even to raise the cap on contributions (which would violate President Biden’s pledge not to increase taxes on income under $400K).
• There is no reason to pit generations against each other to triage government funds.
• There is no reason to raise the retirement age.

There is no Social Security Solvency Crisis. Why is MSNBC telling us otherwise?

It’s one thing for Republicans to threaten Social Security. It’s another for our “liberal” media to aid and abet them by pushing the false narrative that Social Security has a “solvency crisis.” Last Sunday, Maya MacGuineas of the Committee for a...

www.dailykos.com

Would somebody please think about the bankers.

That's odd. We routinely run deficits of over a trillion dollars, and you think we "can afford to pay for all benefits to current and future retirees even if contributions lag benefits". Kind of dooms your entire premise there.

 

[Lesh]

It’s one thing for Republicans to threaten Social Security. It’s another for our “liberal” media to aid and abet them by pushing the false narrative that Social Security has a “solvency crisis.”

The Myth of Social Security Insolvency

Economist Stephanie Kelton destroys this myth in her book, In The Deficit Myth, recently chosen by BookAuthoirity.org as No. 1 on a list of the Best Economic Theory Books of All Time:


FDR designed Social Security with FICA contributions and trust funds to gain popular support of the programs. People would “see” the funds were there to pay the benefits. But now, people “see” or are being told to “see” the funds are not there.

So what would we do to provide for if and when Social Security benefits exceed the contributions?

What can be done

Congress can pass a law today providing that full Social Security benefits will be paid even if the Trust Fund is exhausted.

Wait! They can do that?

Not only can they, but they already do it for Medicare Parts B and D. Unlike the trust funds for Social Security and Medicare A and C, the Trust Fund for Parts B and D (“SMI”) has the authority to pay full benefits from general federal government funds. So the same Social Security and Medicare Trustees report containing scary predictions for Social Security and Medicare A and C states: “For SMI, the Trustees project that both Part B and Part D will remain adequately financed into the indefinite future because current law provides financing.” As Kelton writes, “That keeps SMI financially secure to infinity and beyond!”

All Congress would have to do is apply the provisions of SMI to the other Social Security and Medicare Trust Funds and every one of MacGuineas statements falls.

• We can afford to pay for all benefits to current and future retirees even if contributions lag benefits.
• There is no reason to cut benefits, now or in the future, or even to raise taxes, now or in the future.
• Not even to raise the cap on contributions (which would violate President Biden’s pledge not to increase taxes on income under $400K).
• There is no reason to pit generations against each other to triage government funds.
• There is no reason to raise the retirement age.

There is no Social Security Solvency Crisis. Why is MSNBC telling us otherwise?

It’s one thing for Republicans to threaten Social Security. It’s another for our “liberal” media to aid and abet them by pushing the false narrative that Social Security has a “solvency crisis.” Last Sunday, Maya MacGuineas of the Committee for a...

www.dailykos.com

Would somebody please think about the bankers.

Thee only reason not to do this is that it makes Social Security true entitlement.

Big ducking deal. Do it and if you don’t like that it’s paid for out of the General Fund then raise the cap to cover it.

Don’t FUCK with our retirement

 

[Lesh]

All true.
The short term fix is to raise the cap.
The longer term fix is to raise the ages since people are living longer, 54 and younger add 1-year to 62 & 67, 34 and younger add 2-years.

Eliminating the cap fixes it permanently

 

[kyzr]

Eliminating the cap fixes it permanently

True, but that will never happen. You need to do what can pass both the House and Senate.

 

[WorldWatcher]

All true.
The short term fix is to raise the cap.
The longer term fix is to raise the ages since people are living longer, 54 and younger add 1-year to 62 & 67, 34 and younger add 2-years.

I disagree.

The short term may be to raise the cap. (But I think we can do better.)

The long term fix isn't cutting benefits by raising the retirement age. There are a lot of people whose bodies are wearing out by their late 60's. A model of work until you die or work longer for less benefits isn't going to cut it.

The long term fix is to restructure SS to better reflect the change in "income" from 100 years ago. To move from a "wage only" model to a "income model" as a means of increasing revenue instead of cutting benefits. All income that qualifies for Income Tax becomes subject to a SS Tax. This would include interest, dividends, short term stock/commodities trading, long term capital gains. See below.
.
.
.
.
.
As such:

• Current SS tax of 12.4% would remain (6.2% by the EE and 6.2% by the ER).
• Non-wage income would be taxed at a rate equal to 25% of the total FICA rate or another way to say it as 1/2 of the individual EE rate. That would currently be 3.1%.
• Financial institutions would be required to collect the 3.1% at the time of posting, just like employers (ERs) collect it at the time of payment.
• Because the non-wage rate is 25% of the wage rate (3.1% compared to the FICA total of 12.4%), then 25% of non-wage income would be credited to SS Income for that year.
• Current cap of 160K on wage income could remain the same.
• A cap of 160K would also apply to non-wage income.
• The sum of the wage credit and non-wage credit is posted as the total SS Income for the year which is then used to determine SS benefit amounts.

Example:

A high wage earner make $300K in wages, taxes are collected on wages up to $160K for a total of $19,840 in wage tax. Applicable income credited (partial) for the year for future benefits calculations is $160K. If the same person has 100K of passive investment income, the SS Tax would be $3,100 at 3.1%. Total SS Taxes would then be $22,940. 25% of the $100K passive income would be credited to SS Income for the year equaling $25K since the tax rate is 25% of the full FICA rate. So the individuals total SS Income credited for the year would be $160 + $25K = $185K.

WW

 

[hadit]

Eliminating the cap fixes it permanently

As long as you also eliminate the cap on how much a person can receive from SS per month. Otherwise you have people paying in what they could never get back, and that's welfare, not a retirement system.

 

[kyzr]

I disagree. The short term may be to raise the cap. (But I think we can do better.)

The long term fix isn't cutting benefits by raising the retirement age. There are a lot of people whose bodies are wearing out by their late 60's. A model of work until you die or work longer for less benefits isn't going to cut it.

The long term fix is to restructure SS to better reflect the change in "income" from 100 years ago. To move from a "wage only" model to a "income model" as a means of increasing revenue instead of cutting benefits. All income that qualifies for Income Tax becomes subject to a SS Tax. This would include interest, dividends, short term stock/commodities trading, long term capital gains. See below.
As such:

• Current SS tax of 12.4% would remain (6.2% by the EE and 6.2% by the ER).
• Non-wage income would be taxed at a rate equal to 25% of the total FICA rate or another way to say it as 1/2 of the individual EE rate. That would currently be 3.1%.
• Financial institutions would be required to collect the 3.1% at the time of posting, just like employers (ERs) collect it at the time of payment.
• Because the non-wage rate is 25% of the wage rate (3.1% compared to the FICA total of 12.4%), then 25% of non-wage income would be credited to SS Income for that year.
• Current cap of 160K on wage income could remain the same.
• A cap of 160K would also apply to non-wage income.
• The sum of the wage credit and non-wage credit is posted as the total SS Income for the year which is then used to determine SS benefit amounts.

Example:
A high wage earner make $300K in wages, taxes are collected on wages up to $160K for a total of $19,840 in wage tax. Applicable income credited (partial) for the year for future benefits calculations is $160K. If the same person has 100K of passive investment income, the SS Tax would be $3,100 at 3.1%. Total SS Taxes would then be $22,940. 25% of the $100K passive income would be credited to SS Income for the year equaling $25K since the tax rate is 25% of the full FICA rate. So the individuals total SS Income credited for the year would be $160 + $25K = $185K.

WW

1. Agree working to late 60s is too long. Early retirement would be about 63.

2. Totally agree with your "fix" to SS.

 

[Grumblenuts]

As long as you also eliminate the cap on how much a person can receive from SS per month. Otherwise you have people paying in what they could never get back, and that's welfare, not a retirement system.

The original Social Security Act of 1935 established a national plan to provide economic security for the nation's workers and to enable the states to provide more adequate welfare benefits.

 

[WorldWatcher]

1. Agree working to late 60s is too long. Early retirement would be about 63.

2. Totally agree with your "fix" to SS.

Thank you.

WW

 

[Grumblenuts]

I disagree.

The short term may be to raise the cap. (But I think we can do better.)

The long term fix isn't cutting benefits by raising the retirement age. There are a lot of people whose bodies are wearing out by their late 60's. A model of work until you die or work longer for less benefits isn't going to cut it.

The long term fix is to restructure SS to better reflect the change in "income" from 100 years ago. To move from a "wage only" model to a "income model" as a means of increasing revenue instead of cutting benefits. All income that qualifies for Income Tax becomes subject to a SS Tax. This would include interest, dividends, short term stock/commodities trading, long term capital gains. See below.
.
.
.
.
.
As such:

• Current SS tax of 12.4% would remain (6.2% by the EE and 6.2% by the ER).
• Non-wage income would be taxed at a rate equal to 25% of the total FICA rate or another way to say it as 1/2 of the individual EE rate. That would currently be 3.1%.
• Financial institutions would be required to collect the 3.1% at the time of posting, just like employers (ERs) collect it at the time of payment.
• Because the non-wage rate is 25% of the wage rate (3.1% compared to the FICA total of 12.4%), then 25% of non-wage income would be credited to SS Income for that year.
• Current cap of 160K on wage income could remain the same.
• A cap of 160K would also apply to non-wage income.
• The sum of the wage credit and non-wage credit is posted as the total SS Income for the year which is then used to determine SS benefit amounts.

Example:

A high wage earner make $300K in wages, taxes are collected on wages up to $160K for a total of $19,840 in wage tax. Applicable income credited (partial) for the year for future benefits calculations is $160K. If the same person has 100K of passive investment income, the SS Tax would be $3,100 at 3.1%. Total SS Taxes would then be $22,940. 25% of the $100K passive income would be credited to SS Income for the year equaling $25K since the tax rate is 25% of the full FICA rate. So the individuals total SS Income credited for the year would be $160 + $25K = $185K.

WW

Tie all that in with real Medicare4All so we can begin competing honestly with the rest of the industrialized world and cease playing top cop / arms dealer / drug addict.

 

[Unkotare]

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And that's a WIN in states like mine where illegal invaders are not allowed in.

...

.

Which state?

 

[OhPleaseJustQuit]

Which state?

.

I'm not sure I feel comfortable when people here demand personal information about me.

.

 

[WorldWatcher]

.

I'm not sure I feel comfortable when people here demand personal information about me.

.

U.S. unauthorized immigrant population estimates by state, 2016

Pew Research Center estimates that 10.7 million unauthorized immigrants, the lowest level in a decade, lived in the U.S. in 2016. View state by state data on unauthorized immigration.

www.pewresearch.org

Is your state one of the ones on the list with "0" undocumented aliens?

WW

 

[OhPleaseJustQuit]

U.S. unauthorized immigrant population estimates by state, 2016

Pew Research Center estimates that 10.7 million unauthorized immigrants, the lowest level in a decade, lived in the U.S. in 2016. View state by state data on unauthorized immigration.

www.pewresearch.org

Is your state one of the ones on the list with "0" undocumented aliens?

WW

.



The point is not whether there are any here. In order to know that, I would need to be able to monitor all the borders of the state at all times.

The point is that our governor has signed legislation to the effect that no new illegal criminal invaders will be accepted here via busloads, planeloads, or any other effort by this treasonous "administration" to relocate them here in numbers.

Besides, since it's impossible to tell where they are, your map is kind of fraudulent anyway.



.

 

[WorldWatcher]

.



The point is not whether there are any here. In order to know that, I would need to be able to monitor all the borders of the state at all times.

The point is that our governor has signed legislation to the effect that no new illegal criminal invaders will be accepted here via busloads, planeloads, or any other effort by this treasonous "administration" to relocate them here in numbers.

Besides, since it's impossible to tell where they are, your map is kind of fraudulent anyway.



.

Ah. So illegal aliens are allowed in the state. The Governor signed legislation, but that doesn't stop an illegal alien from crossing the state border. Hence the "illegal" part.

Thank you.

WW

 

[OhPleaseJustQuit]

Ah. So illegal aliens are allowed in the state. The Governor signed legislation, but that doesn't stop an illegal alien from crossing the state border. Hence the "illegal" part.

Thank you.

WW

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Whatever gets you through the night, semantically speaking, pixie.



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[Unkotare]

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I'm not sure I feel comfortable when people here demand personal information about me.

.

I didn't ask for your home address.

 

[WorldWatcher]

I didn't ask for your home address.

That's all right we already figured out that "well the governor signed a law" meaning illegals can't come into her state. You know, being that "illegals" actually will follow that law.

WW

 

[OhPleaseJustQuit]

That's all right we already figured out that "well the governor signed a law" meaning illegals can't come into her state. You know, being that "illegals" actually will follow that law.

WW

.


And......................

WHOOOOSSSSSSSSSSSSSSSSSSSSSSSSHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!





.

 

[Lesh]

Ah. So illegal aliens are allowed in the state. The Governor signed legislation, but that doesn't stop an illegal alien from crossing the state border. Hence the "illegal" part.

Thank you.

WW

Kinda like how guns get to places where laws would otherwise prevent that