US Treasury chief says Social Security 'unsustainable'

[babsbunny]

http://rawstory.com/news/afp/US_Treasury_chief_says_Social_Secur_03252008.html

US Treasury Secretary Henry Paulson said Tuesday that America's Social Security program for the retired is "financially unsustainable" and needs an urgent overhaul.

Paulson, speaking after a government panel had completed its annual assessment of the Social Security and Medicare benefits programs, said waves of retiring Americans threaten to soon deplete available funds stockpiled in the two programs.

"As the baby boom generation moves into retirement, these programs face progressively larger financial challenges," Paulson said.

[ck4829]

1. And let's take a guess at what the proposed solution will be...

Privatization, right?

[anigbrowl]

3. Silly...that would have the same problem.

More immigration is the only viable long-term solution (yes, I actually think that). Otherwise we go into a demographic reversal rather like Japan.

[SharonAnn]

18. Privatization actually has reduced benefits and cost more in Chile, for example

Banks and financial institutions love privatization, because they get to control their fees (and make them ever higher).

I have in front of me a newspaper clipping that I saved in December of 2000. Title "American could pay off public debt by 2009, Clinton Says". In the article clinton says "These are conservative numbers." and "Over that same 10-year period, the surplus for Social Security is expected to grow to $2.5 trillion while the Medicare surplus is expected to grow to $532 billion. "

So, it would seem that the GOP has royally f****d things up.

No matter, I'm not cutting them any slack. I'm part of the first generation that has paid Social Security for my grandparents, my parents, AND myself. I will not accept anything other than continuing Social Security as it is.

If we have to change other financial and budget factors to pay for it, then so be it. We as a country have to pay for these bad decisions, but I don't intend for it to be only at my expense. Sorry, but now I'm going to be selfish.

My entire life I've always supported the greater good and now that I'm at the age to soon use Social Security benefits, I intend to get them. I've done more than my part.

[Benhurst]

2. Then so should be all federal penisions, especially those excessive ones

covering presidents and members of Congress.

[mountainvue]

40. Touche'. n/t

[madrchsod]

4. that`s ok

we`ll all die so the money class can enjoy their lives ...after all what good are people over 65? they just live off the people who work. i`ll have another 3 1/2 years to enjoy my life before the great thinning of the herd takes place...

[Richard Steele]

5. Pop the cap, and SS is in the black for another 100 years. nm

[WHEN CRABS ROAR]

9. I agree.

[Richard Steele]

13. Hiya, WCR!

I haven't come across one of your posts for quite a few weeks now;
I'm glad to see that you're still with us! :hi:

[Liberal In Texas]

16. Yep. But that makes too much sense. Plus the stock market needs

an infusion of $$ to prop up the sick economy.

The repubs could also stop raiding the SS funds to build bombs and kill people.

[Richard Steele]

19. G*d forbid that folks at $10 million/yr should take a 0.5% hit to keep our elderly from starving.

This shit is just too fucked up for words. :grr:

[Ikonoklast]

22. Winner.

Solves the problem in one fell swoop.

[Zorro]

26. Popping the cap is only fair

if there's a commensurate increase in the checks for the people who earn more than the cap.

[Name removed]

27. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Zorro]

29. So you think it's fair

to force workers to pay more into a program than they will be able to get out?

[Name removed]

30. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

37. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[creeksneakers2]

47. AARP made the same argument at first

AARP feared that further uncoupling of payments from benefits would make SS more of a social program than a retirement programs. That could lead to loss of public support.

AARP since dropped its objections.

If benefits are increased in exact proportion to revenues from removing the cap there would be no benefit to the bottom line. Perhaps a compromise would work.

If anybody asks me, I'd say the real way to protect SS is to balance the budget and pay down other debts. That's the only way to save the future generations some money.

[Raksha]

42. I used to know a "Zorro" on another forum. He's still there,

but he's got a different screen name now. It doesn't matter because we all know who he is. Anyway, this guy is a free-market fundamentalist and a RW shill--and also a habitual liar. He'd HATE the idea of raising the cap on Social Security deductions and react with knee-jerk horror.

Interesting coincidence...

[Zorro]

44. Well that's not me

So do you think it's fair to remove the cap on SS payments but deny workers that continue to pay any additional benefits?

If you do, I'd like to hear why that's fair or good policy.

[Lugnut]

31. Yup.

It's not rocket science.

[Hannah Bell]

35. Why, when there's no reason to?

The forecast that predicts calamity has been proven dramatically wrong the last 8/10 years. The real numbers came in higher than even the "optimistic" forecast - the forecast that predicts SS chugging along forever, paying out scheduled benefits, without even using the Trust Fund.

That suggests the "intermediate" forecast, the one used to hype the crisis, is cooked.

and even in the event that the trend changes, & follows the "intermediate" scenario, it would cost an average of $1 a week to fix it.

So why lift the cap, or do anything at all, unless the trend changes?

The cap is there for a reason. SS taxes are assessed on 90% of national income precisely so the rich don't pay significantly more without getting significantly less benefit. Once you skew the funding, it becomes "welfare".

[Zorro]

45. Good post, Hannah

I think you've captured the essence of why eliminating the cap is problematic.

[Juche]

48. 90% of national income

When you consider that the 90th percentile in income is around 140k, I wouldn't have a problem with lifting the cap to 140k or so.

[Yael]

6. Heres an idea -- how about we dump it all into the open market to prop up

the unregulated investment banks?

:shrug:

[swag]

7. He's the guy who told us last summer that the housing crash had bottomed.

Clueless asshole.

[gristy]

8. Tax cuts for the rich - now THAT'S SUSTAINABLE!!!

Asshole.

[OmmmSweetOmmm]

12. And for high wage earners, no cap on FICA.

[stevedeshazer]

10. It's the timing, people. Which candidate is addressing the economy?

http://blog.washingtonpost.com/the-trail/2008/03/25/mccain_to_address_economic_cri.html

<snip>

McCain to Address Economic Crisis

By Michael D. Shear
Sen. John McCain plans to declare the nation's economy in "crisis" this morning at a speech aimed at bolstering his image on domestic issues.

In a speech to a small business group in Southern California to be delivered at 10 a.m. Pacific time, McCain will play amateur economist, describing the development of the housing bubble and the forces that combined to burst it, according to prepared remarks.

"The net result is the crisis we face," McCain will tell the group. "What started as a problem in subprime loans has now convulsed the entire financial system."

The speech is the beginning of an effort to shift the perception that McCain's only expertise is on foreign policy and military matters.

Democrats, including his potential rivals for the presidency, have hammered McCain, saying he appears disconnected from the economic situation for most Americans and has not laid out an economic vision for the country.

</snip>

Now, grasshoppers, why do you suppose that the Treasury Secretary chose to make this pronouncement at this particular time?

Back in the height of the Cold War days, Soviet citizens and their fellow Iron Curtain komrades were forced to read between the lines.

Today, it's the same for Amerikans.

For the simple-minded (not most DUers), this can be spelled out quite simply.

[BadgerKid]

17. Hey McCain -- Don't make us bleed, kill the greed. n/t

[jimshoes]

11. Bring back some of those jobs you sent overseas

you fucking geniuses. Either that or slap a tariff on the savings these greedy pig corporations are making by sending our former work to India, Mexico, China, etc.

[YellowRubberDuckie]

14. I really don't get this.

We paid into it. They were supposed to keep track of how much we paid into it. They weren't supposed to touch it except for that amount to those people. And now they say this? How fucking retarded is that?
Duckie

[bdamomma]

15. this was their plan right along, due to the problems in the economy

oops you are not eligible for Social Security. These thugs have to be dealt with, or do we need them to throw people in the streets, oh silly me, that is already happening.

[bemildred]

20. Let's can his ass instead. nt

[Arctic Dave]

21. As if you couldn't see this a mile away.

If you think this was not going to come back from the dead you need to brush up on your B movie horror flicks. If the govt can pay for a fucking war with an unlimited checkbook they can pay to keep the SS and MC going! Speaking of B movie hooror flicks, when do we get to eat all the pugs.

[Justitia]

43. LOL! I like the way you post. -eom

[Rex]

23. Oh please, your bosses lose a trillion dollars here and there.

You better get that fucker up and running WITHOUT an overhaul. That is if you want people to go to work! Just sayin...

[tom_paine]

24. Self-fufilling prophesy: Thieves blaming the victims for having no food in the house

Sadly, the Bushies are looting the country and the Public Treasury as quickly as they can, and that WILL make this self-fufilling prophesy a reality.

Tipping points everywhere, everywhere. It may turn out that the Stolen Election of 2000 was in fact the tipping poitn for the extinction of humanity.

But that is hubris, and looking back could a Gore Adminstration stopped these Bushies, could a single American President have done more than delay what probably already was long inevitable by 2000.

[roamer65]

25. Paulson is a irritating fuck.

He and that son of a bitch Bernanke are running our economy into the ground. Stupid * buttkissers.

[unkachuck]

28. listen, paulson....

....you're a jagoff lacky, repugs and you are what's 'financially unsustainable'....if you won't do what it takes to help make the Social Security solvent, then resign and let someone in there who will!

"As the baby boom generation moves into retirement, these programs face progressively larger financial challenges,"....not if we end your corporate wars and tax your rich fat ass....

....never mind paulson, in few months we will have a group of people in the executive branch who will know what to do....then you can return home and resume sucking that corporate cock....

[lpbk2713]

32. Rethuglican victory in the war on 'Entitlements' is in sight.

This is one of the reasons BushCo wanted to bankrupt the US Treasury. So that there would be no money to spend on programs that the rethuglicans hae regarded as a thorn in their side for decades.

[Jack Sprat]

36. Bingo! The MAIN reason.

[lovuian]

33. well they sure took our money from our checks

now its time to pay
We could pay for a War but not the American people

[Hannah Bell]

34. Paulson is a crook. SS is 2 trillion in surplus, & everyone (not just

the boomers) has been paying extra into it for 24 years.

There is NO crisis. None, zippo. It's smoke & mirrors; they've been lying to everyone so long - The Big Lie - that they've succeeded in their aim, which is to get people believing in the phoney crisis & going along with their "solution".

The only way there'd be a "problem" with SS is if liars like Paulson take down the whole economy, which they seem determined to do. But in that case, nothing else will do any better.

Social Security Trustees' Reports: Crisis?
Posted by Hannah Bell in Editorials & Other Articles
Sun Feb 10th 2008, 11:54 AM
http://econospeak.blogspot.com /

The folks at Econospeak have done a public service by charting the GDP growth predicted in 10 years of Social Security Trustees Reports against actual GDP growth in the same years.

If you don't know how the SS Trustees Reports work, here's the short version.

Using economic & demographic data, the trustees make 3 forecasts every year:

1. Low-cost (optimistic about SS's future viability/cost)
2. Intermediate cost
3. High cost (pessimistic about SS's future viability/cost)

The intermediate forecast is the one considered most likely to occur; it's the one all the numbers you hear in the media come from. You know, the headlines like: "Trillion-dollar SS Shortfall!"

GDP growth is a key variable in these forecasts, & is itself aggregated from other data.

However, as it turns out, in 6/10 years, real GDP growth not only exceeded the growth predicted in the intermediate forecast - it exceeded the growth predicted in the "low-cost" (optimistic) forecast.

And in the low-cost forecast, SS chugs along forever, paying rising scheduled benefits, without going into deficit, without additional taxes - while accumulating a growing surplus! That is, current evidence suggests we need to reduce SS collections rather than increase them, & certainly there's no evidence for any radical overhaul or benefit reductions.

In only 2 years did GDP = the intermediate (supposedly most sound) forecast. In one year (the year of 911), reality was worse than the intermediate forecast. In one year, reality was in-between the optimistic & intermediate forecasts.

On average, though, over 10 years, reality turned out better than even the supposed "optimistic" prediction.

That is, the forecasts used to hype the SS crisis in the media are dramatically skewed to the negative.

But I'd bet that for most people reading this, it's the first time you've heard anything about it -- but you've heard A LOT about the coming SS "shortfalls," the "crisis," & the need for "change".

Why the deafening silence on this key point?


Year IC LC Actual

1997 2.5% 3.2% 3.8%
1998 2.5% 3.1% 3.9%
1999 2.6% 3.4% 4.0%
2000 3.5% 3.9% 5.1%
2001 3.1% 3.5% 1.0%
2002 0.7% 1.6% 2.4%
2003 2.9% 3.8% 3.1%
2004 4.4% 4.9% 4.4%
2005 3.6% 3.9% 3.6%
2006 3.4% 3.8% 4.7%

1997-2006 average IC = 2.92% LC = 3.51% Actual = 3.60%
2001-2006 average IC = 3.02% LC = 3.58% Actual = 3.37%

http://journals.democraticunderground.com/Hannah%20Bell/1

[Ganja Ninja]

38. But we can stay in Iraq for 50 or even a 100 years.

I guess it all depends on your priorities.

[mountainvue]

39. Remember when Bush wanted

to invest it in the stock market? :silly:

[Oldtimeralso]

41. This is just a part of the Greedy Old Perverts plan to...

help the greedy by screwing the needy!

[AzDar]

46. Nobody touches ANYTHING 'til Bush is OUT OF OFFICE.

Let's let the grown-ups handle this one....

[pinto]

49. While I don't buy the fear mongering about Soc Sec, I agree with raising the cap on withholdings.

A modest increase on the limit to incomes liable to Soc Sec withholding seems prudent. Or some limit to the formula for retirement payments that cap payments on a basis of income in years when Soc Sec was withheld. Income after that wouldn't apply to Soc Sec benefit payments. :shrug: