If We Put 10 Million Americans Back to Work That Social Security "Shortfall" Would Disappear

[Donnachaidh]

http://www.ourfuture.org/blog-entry/2010083211/if-we-put-10-million-americans-back-work-social-security-shortfall-would-disap

There's a great deal of alarmist talk these days about the fact that Social Security won't be adding to its surplus this year. Instead it will call in some interest payments (and possibly other monies, too) on the money Uncle Sam borrowed from its fund. (When a rich person retires on interest income they're called "lucky" or "successful." When the rest of us do - however indirectly and slightly - it's called a "crisis.")

Those who claim to be so gravely concerned about the financial stability of Social Security should consider this: If our government had put ten million unemployed Americans back to work, Social Security would have added to its surplus this year.

Since our professors trained us to always "show our work," here are the (admittedly back-on-the-envelope) calculations used to reach that conclusion:

a) An estimated 156 million people had earnings covered by Social Security and paid payroll taxes in 2010.
b) Net contributions plus taxable employee benefits totaled $689 billion.
c) That comes to an average of $4,416.67 in benefits per covered worker.
d) Multiplying the average contribution by 10,000,000 = $44 billion and change
e) This year's "shortfall" is $41 billion

(figures from the 2010 Annual Social Security Trustees Report)

Ten million new workers would have left us with a net surplus for the year of slightly over $3 billion. So why aren't those who profess such concern about Social Security's fiscal soundness pushing for more stimulus spending? Could it be because their real concern isn't protecting Social Security?

More at the link ---

[truedelphi]

1. Ssh. those master minding the destruction of the American Way of life

Don't want us to know this.

Creating jobs (to them) is un-patriotic.

[Bitwit1234]

2. ADD that to another reason for republicans voting no on the jobs bills

they want to get rid of social security and maybe no no no on the bills in another nail they are trying to drive into social security.

[SoCalNative]

3. If we actually taxed people on their full incomes

and didn't cap it at $106k, that "shortfall" would disappear too.

[pitohui]

6. yes but the OP's idea is better, let me explain

the longer you work and the higher the income you make while you work, the more you will eventually be entitled to withdraw from social security

fixing the shortfall (if shortfall there really is, i'm skeptical) by raising the cap is fine and would work BUT it wouldn't help the persons who are out of jobs and therefore get a double whammy -- have no choice but to retire early because they can't find a new job at their age and have a tiny pay-out because they never had a high average income to contribute with

more and better jobs for more people means that more people will actually have a social security payment that they can live on

investing is not gonna work for most people in a MATURE economy that is going in circles, the interest rate is nothing (it's been nothing in japan for years, another mature economy), the stock market goes in circles you make nothing there, you HAVE to be able to rely on a decent FICA check when you're too old to work or you're screwed in my humble opinion

investing was an OK idea in a GROWING, DEVELOPING economy but we're now a MATURE economy, the ronald reagan lovers were looking back on a world already passing (the explosive growth after ww2) instead of the world of the future (where tech is mature and most people already have it, not many westerners are any more buying their first car or first cell phone, say)

[Hannah Bell]

4. +100.

[pitohui]

5. i would support some kind of new deals type jobs program

if you look into it, they created all kinds of jobs, not just for laborers but for those who couldn't do heavy labor also, for example, at least one unemployed writer got a job collecting folklore -- talk about a cool job!

visitors to hoover dam can see the beautiful terrazzo flooring put in the dam, giving artists work

just two small examples, i know there are a great many, it wouldn't just be digging ditches and picking up trash (jobs that, in our world, are done by prison slave labor anyway)

i think the new deal type jobs should be competitively paid, not min. wage type jobs, and they should be at all levels -- you need engineers not just day laborers to repair a bridge, for example, photographers and writers to record the story, not just an accountant to scribble out the cost

if we were serious abt creating jobs, we could do this, after all, we did at a time when we had far less tech

[damntexdem]

7. If we raised the FICA tax cap, or eliminated it, no shortfall would ever appear.

But even with the current cap, the shortfall will be brief, and tiny compared to the Trust Fund.