So please explain the problems social security faces (as it is now) to me.

[dubeskin]

As someone born at the beginning of the 90s, I don't have as much knowledge as many of you do about the history of social security and the current problems it's facing. I understand (from basic government classes in high school) what the system is and why it was implemented. However, it's difficult to find any sort of non-biased coverage of what the real issues social security is facing and WILL be facing in the next 20 years are without someone either advocating it's end or suggesting a 100% tax on incomes more than 200k.

What I currently don't understand is why there's a large discrepancy with it. As a constant lurker but seldom poster I've seen recently the issue re-arise and more discussion take place on it, and I'd like to try to make some informed decisions on the matter.

So, in short, what has happened with social security (besides the fact that it's a federal program which of course the Right despises) that is cause for alarm, and what is the general left-wing consensus (note: not Democratic leaders' positions, but rational liberal suggestions) on how to fix it?

Thanks!

[CBGLuthier]

1. the largest problem it faces

Is that the RW political and business community has been 100% against it since its inception.

[kentuck]

2. At the present time...

there is enough to pay benefits until 2037 at present rates. After that, unless some changes are made, benefits will only be about 75%. Hardly a crisis. It could be easily fixed if we decided it was a priority? But why should taking care of our elderly be a priority over taxcuts for the rich or keeping the hogs fat in the defense establishment?

[sandnsea]

4. Where is the $4 trillion trust fund? n/t

[kentuck]

16. It was borrowed by the government for general purposes...

and replaced with bonds backed by the US Government. Is the good faith and word of the US Government no longer any good?

[sandnsea]

21. How do we get the money to pay the bonds? n/t

[kentuck]

30. The government funds it as it is needed...

Maybe they can borrow it from China?

[sandnsea]

32. Kentuck votes we add $4 trillion to the deficit

Good enough (seriously). I just want to get these solutions down so people understand what we're talking about.

[kentuck]

40. I thought you said there was a $29 billion deficit in SS fund this year??

So you want to pay the full $4 trillion all at once?? Well, thank you very much. We would settled for only $29 billion. Of course, I guess when you have 17 million unemployed, that does create a hole in the FICA taxes collected?

[sandnsea]

46. Each year that figure will grow

That's what the trust fund is for, to cover the deficit as millions of boomers choose to retire.

Yes, this year the deficit is due to unemployment. I said that below.

Over the course of the next ten to twenty years, there is $4 trillion of trust fund bonds to be paid. If you want to borrow it, fine by me. It's just fair that people understand so they get the issues.

[kentuck]

55. If we can borrow $300 billion a year for the military adventures...

We should be ready to borrow up to that much for our folks that are old or needy. Just my opinion.

[sandnsea]

62. Makes me no never-mind, honestly

I just want people to understand the reality of what is going on here, that's all.

In my opinion, the Bush tax cuts stole our FICA. I want it back. That's why it pisses me off beyond words when MoveOn et al come out and say there's no problem with social security. Well fuck yes there is, the rat bastards stole our money and now they want to lump the whole problem in one big federal pot so they can cry broke and steal some more in the form of cuts. Fuck No.

If they can't afford to pay back the trust fund, then they better cut their military adventures or some other wild goose chase boondoggle.

I agree with you 100% that taking care of the elderly has to come first, especially when the elderly paid into a system in good faith in order to get that money when they needed it.

[SharonAnn]

93. Right. They stole it "fair and square" and they don't want to pay it back.

[sabrina 1]

65. You are giving wrong information. The SS Fund has nothing to do

with the deficit. It is impossible for SS to cause the deficit as it is a totally separate fund. The defiicit we currently have was caused by the Financial meltdown.

The trust fund will take care of the baby boomer retirement as this was predicted and dealt with decades ago.

There is no need to touch the trust fund for at least another two decades.

The rightwing has been using these scare tactics for decades. None of their predictions came true because they were lies, just as they are now.

The Trust fund is backed by U.S. Treasury bonds and is as safe as possilbe in terms of being secure. If the U.S. Government defaulted on its debt to SS, that would be a catastrophe of mammoth proportions and we would have more to worry about than SS.

The problem really is that the wealthy do not want to have to pay higher taxes. They want to take money from the 'lesser people' and force them to pay THEIR debt.

Anyone who helps them do this cannot call themselves a Democrat.

There is no crisis in SS and it doesn't matter how many boomers retire, there will still be no crisis.

[sandnsea]

73. If the trust fund will take care of the boomers

and the boomers are retiring now, then how can you say the trust fund won't be touched for two decades?

Where does the money come from to pay out US Treasury bonds when they're cashed in?

And I never said social security was causing the deficit, not once, not ever.

[lumberjack_jeff]

94. SS isn't causing the deficit, it's financing it.

The money will come from those who haven't had to pay any taxes for the last 30 years because workers have been paying it for them.

Sucks to be rich, I guess.

[sandnsea]

95. Well, not entirely, but to a large extent, yes

And I just want to make damn sure the ones who didn't pay taxes all these years have to pony up now that the bill is due.

If we keep saying there's no problem, they'll have a built-in excuse to object to paying any more taxes.

[lumberjack_jeff]

100. Rich people and companies are the only place there is money.

Government has no other choice, and it's patently obvious that the rich realize it.

[kentuck]

106. Well, they can put it in a lock box if they don't want to borrow it...

and they can get their money for their war games and toys and taxcuts elsewhere....

[sabrina 1]

107. The reason we don't have to dip into the trust fund now is

because there is still a high enough ratio of workers to retirees (not all boomers will retire at the same time). That will change in about 25 years when it will begin to level out and there is a smaller ratio of workers to retirees. That's when the Trust Fund will be needed.

The fundes must come from the government. That is why the Deficit the government has needs to be addressed because the Government has run up huge debts, not just to SS but other debts as well, like to China. This can be done by several different means. Raising taxes on the wealthy, cutting spending eg on the military. And creating more jobs as the more people working the more money will be paid in. Also, accepting more immigrants legally so they are paying into the system. Just a few ways to start working on the economy.

Many economists have submitted plans to fix the economy which is necessary anyhow. And on how the government can pay its debts, one of which is to the Trust Fund.

But one thing will do nothing to help the economy rebound is cutting SS. If anything that would just increase the deficit. It would put more money into the Trust Fund and he Government would simply use THAT money to pay its debts.

Iow, they would make American workers who owe nothing to the government, pay the government's debts because they don't want to.

I think the people who ran up the debts should pay them. So does Paul Krugman, Galbraith, Dean Baker and just about everyone else who has not fallen for the lie that SS is in crisis and its because of more retirees.

[sandnsea]

108. Did you look at the graph?

The trust funds will be needed within the next few years.

By 2037 the trust fund will be completely gone, regardless of how we go about covering it. That's when there will only be enough to pay 75% of benefits.

Yes the government has run up huge debts. And on top of that there is $4 trillion dollars that is due the baby boomers.

Then, AFTER THAT, there is a 25% shortage in FICA itself.

But according to Moveon, none of that is a problem.

[sabrina 1]

110. You are wrong. The trust fund will not even be needed for more

than two decades. I don't know where you are getting this information but is incorrect.

Your numbers are all wrong also. Right now there is 2.5 trillion dollars in the trust fund. There was never any more than that. So where are you getting that the Government has to pay 4 trillion?

There won't be 4 trillion until 2023. Which shows how solvent the SS system is. There is more than enough going into the fund to pay all the benefits that are due for 25 more years. And there is a surplus which goes into the Trust Fund and will keep increasing until it reaches 4 trillion in 2023. That fund is backed by Treasury Bonds the most secure backing it could have. Regardless of the fact that the government has borrowed it. They have borrowed from China also. Are you saying the U.S. government will not honor China's Treasury Bonds also? Do you think China would not be making demands right now if they beleived that the U.S. Government could not honor its debt?

We, the American People are the Government's biggest debtor, China is pretty big also. The Government will not default on its debt. If it does, we will have way more to worry about than SS.

The only thing in question is that the Government might try, urged on by the Rightwing nutjobs on the Commission, to make the American people pay THEIR debt. That would NOT help the deficit, all it would do is to further increase the Trust fund and allow the Government to get into even more debt. It is the stupidest idea ever which is why the Rightwingers on the Commission must be stopped from even suggesting it.

100% of the benefits due, retirement, disability etc. can easily be paid until at least 2037. And that's being conservative.

The baby boomers are the ones who have helped build this massive fund. And they have more than taken care of their own retirement and that of others. After all the baby boomers retire, and many will die before all have retired, the pay-outs will begin to diminish again as they begin to die and the ratio of workers to reitirees will increase again.

What needs to happen is taxes on the rich must be raised, NOT on the middle class. No more wasteful, illegal wars, they'll just have to get along without them. Bases we don't need around the world can be shut down. We COULD cut the pensions of former elected officials like Alan Simpson. And a huge jobs program nees to be initiated starting now.

But the one thing that will do nothing to help the deficit is to cut benefits and I hope people fight like hell to stop them and to stop them from lying about the baby boomer retirement.

[sandnsea]

111. Froim the Trustees Report

By this measure, the OASI Trust Fund is financially adequate throughout the 2010-19 period, but the DI Trust Fund fails the short-range test because its projected trust fund ratio falls to 93 percent by the beginning of 2013, followed by exhaustion of assets in 2018. The HI Trust Fund also does not meet the short-range test of financial adequacy; its projected trust fund ratio falls to 94 percent by the beginning of 2012. In contrast with the 2017 fund exhaustion date reported last year, the ACA is expected to result in much smaller HI deficits for the next several years, followed by small annual surpluses through the remainder of the short-range period, which postpones trust fund exhaustion to 2029. Chart A shows the trust fund ratios through 2040, the expected year of OASI Trust Fund exhaustion, under the intermediate assumptions.



http://www.ssa.gov/OACT/TRSUM/index.html

Money in the trust fund doesn't mean money available to pay out in benefits. That means money that has to be reimbursed to the trust fund from the federal budget.

[sabrina 1]

116. I think you don't understand the Trustees report. I've seen the

report and ALL of the charts. The Report confirms everything I just said. I'm not sure you understand that. They make several projections using worst case scenarios and best case scenarios. They make lots of charts. So does the Congressional Budget office. The trustees projections are far more pessimistic (although even they project that the system is healthy and can pay all benefits until at least 2037) than the Congressional Budget Office.

From Paul Waldman

The trustees actually make three sets of predictions: a "high cost" prediction (the pessimistic one), a "low cost" prediction, and an "intermediate" prediction. The intermediate prediction is the one that gives us the 2041 date for the exhaustion of the trust fund. But it isn't just the "high cost" prediction that is pessimistic -- all three are.

The Social Security trustees aren't the only ones who have tried to crunch these numbers; the Congressional Budget Office estimates that the trust fund will be exhausted in 2049, not 2041

From Dean Baker

The Social Security trust fund has accumulated a surplus of more than $2.5 trillion. According to the report issued just last week by the Social Security trustees, the program can pay all future benefits through the year 2037 with no changes whatsoever

Nothing in that report contradicts what is already known about SS. The purpose of the trustees report each year is to give Congress some projections so that they have a very long time to make adjustments when necessary.

The report simply verifies the numbers already known, and it projects in the most pessimistic way which is good. It confirms that nothing needs to be done right now. It also confirms that the focus needs to be on the Economy.

In brief, they predict even with an anemic economy continuing for years, that SS benefits can be paid for 26 more years after which 75% of benefits can be paid even IF CONGRESS DOES NOTHING and WITH A WEAK ECONOMY.

I could link to dozens of analysis' of the Trustees' Report all by some of the country's most respected economists, I've read many of them. And not one is worried about SS. They ARE worried about the economy.

Fixing the economy by raising taxes on the wealthy, keeping jobs here in the U.S., creating new jobs and making these changes last in order to provide job security for Americans, that is how we ensure that SS can continue to be what it always has been, the most successful and fiscally responsible program ever.

I think you should read a lot more about this topic. I am assuming from your posting of one of the many charts they created that you completely misunderstood the report because as I said, it confirms what I already stated.

I am very happy with the report. It proves the Rightwingers wrong when they claim SS needs to be cut. That is an outrage to even suggest. And I hope politicians realize what will happen if they try.

[sandnsea]

124. How do we get the money to pay the trust fund bonds? n/t

You're missing the first part of the problem. When we have to use the trust fund to pay benefits. The federal budget has to pay that. That is not the problem that appears in 2037 or 2040 or 2049. We will need to use the trust fund within the next ten years. I'm referring to that problem.

[dkf]

123. The bonds the SS system holds are not the same bonds China holds

China's bonds have an interest rate that is paid in cash twice a year. At the maturity date China will get a lump sum payment for the face value of the bond. At any time they wish, China can sell their bonds in the secondary market and get a price for them.

The SS bonds are non negotiable bonds held in the basement of a federal building. If someone stole them they would ne worthless because they don't trade in the secondary market. They pay interest in more bonds, not in cash. They have no maturity date at which they are redeemed for cash.

Should benefits be reduced or not used, these bonds will sit as IOUs in perpetuity.

[sandnsea]

79. Here's a graph

See where the yellow starts going upside down around 2015. That's when FICA taxes will not be enough to cover benefits. All that yellow represents the $4 trillion trust fund. That will have to be cashed in to cover benefits. That money has to come out of the federal budget to pay the trust fund bonds.

[lumberjack_jeff]

91. That $4 trillion is already debt.

I shouldn't think it so controversial that workers should expect repayment.

Certainly China or any other central bank that buys our paper would expect it.

[sandnsea]

96. Some people think it's an asset

That it's really just sitting in the bank, ready to be spent on benefits for the next 20 years. Or at least they pretend to believe that because I don't think anybody is really that uninformed.

And sure it's owed to the people. And if the plan is to borrow and pay it back, that's fine.

I just wonder who is going to pay back the interest and the money borrowed down the road.

[lumberjack_jeff]

99. It is an asset, and it is sitting in a "bank".

A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers with capital deficits to customers with capital surpluses.

An organization with a capital surplus was connected with an organization with a capital deficit. The fact that it's inconvenient for the borrower to repay really isn't the lender's problem.

Exactly like the bonds that the Chinese government invested in.

[sandnsea]

101. No, it's a liability, all the way around

It's a liability to social security because it has to be paid out in benefits.

It's a liability to the federal budget because the loan is due.

[Warren Stupidity]

121. The 4T is already part of the total debt. You don't get to add it back in again.

The trust fund is a bunch of t-bills that get paid back over time along with the trillions of dollars of other t-bills out there. The federal government borrows money to float the government and pays it back as per the terms of the bond. Some of that money is our SS trust fund.

[sandnsea]

125. Well, it'll be moved to public debt

Right now it's intergovernmental debt. We'll just have to borrow some more to pay it back, so it will move to public debt as that is done. Hopefully interest rates won't skyrocket as that happens, which will add another layer to the debt. It just is not as simple as borrow it and move on.

[Curmudgeoness]

This really isn't the point. This is a separate debate.

Where do we get the money to pay China for the bonds they hold? Where do we get the money to pay ordinary Americans for the bonds that they hold. The argument here is....whether SS is broke.

[sandnsea]

47. That's the exact point

Social Security is not currently broke. The federal government owes it $2.5 trillion dollars right now, and will owe it $4 trillion at its peak.

[elocs]

22. In 2037 the baby boomers who will retire on full benefits next year at age 65

will be 91 years old. That is, those who live to be 91 years old. My guess is that by 2037 the number of baby boomers still alive will be greatly diminished.

Yes, the generation following the baby boomers is smaller, but once the baby boomers begin to age and naturally die things will financially improve.

[sandnsea]

31. Between now and 2037

The baby boomers are supposed to draw on a $4 trillion trust fund. That's the problem we face right now. Does the federal budget borrow the money and add it to the deficit, cut federal spending, raise taxes, or some combination.

[kentuck]

41. Why not just pay for it with the FICA taxes that are collected this year...

Why borrow anything? Unless there is a deficit of $29 billion, then borrow that from the SS fund and pay it back in good times. There is no maturation date, right?

[sandnsea]

50. There will be a deficit

That's the problem. Very soon, as boomers retire and remove themselves from gainful employment, and take their FICA taxes, there will be FICA deficits larger than that $29 billion. That's the SS trust fund.

The federal budget has to pay it back.

[kentuck]

63. We cannot dishonor those bonds ....

and pay others that were borrowed. I don't see it as that big of a problem. It is not like we borrow $4 trillion dollars at one time. We do have hundreds of billions of dollars paid into the fund each year by working people. If there is a deficit, I have no problem borrowing that from whomever or whatever. At the present time, we can borrow it from the SS fund. We do not have to borrow it from the Chinese. We borrow it from ourselves. There is a difference.

[sandnsea]

75. You mean we can cash in the trust fund bonds

We can't borrow from social security if its not paying enough to cover benefits. That's when we have to cash in the trust fund. Is that what you mean?

[kentuck]

104. They can either borrow the money or they can print the money...

We owe it to ourselves, as opposed to another country.

If we can borrow money for everything else, we can borrow money to make up any difference in SS...

Most of the baby boomers will be dead before the $4 trillion in assets (bonds) run out.

Medicare is more of a problem.

[DURHAM D]

42. JFTR - 65 is not the full retirement age. nt

[elocs]

80. You're right. For this group it would be 66, but that does not change the point of my post. n/t

[sandnsea]

3. To the point

In 1987 they looked forward and realized there wouldn't be enough workers to cover boomers. FICA, your social security tax, was increased and boomers became the first generation to cover their own retirement.

The excess paid in is what is referred to as the social security trust fund. It will have grown to $4 trillion when it reaches its peak, sometime in the next few years. Although this year, workers did not pay in enough to cover social security benefits due to the recession.

When there isn't enough coming in out of FICA taxes to pay benefits, the balance has to come from somewhere. The trust fund is bonds that the US Government must pay when they're presented for redemption.

The US Government is in mega debt. Redeeming these trust fund bonds will require more borrowing.

PROBLEM ONE.

Then, around 2040, there won't be any trust fund to cover the difference and social security will be just plain short. Workers will pay in enough to cover about 75%. The remaining 25% will have to come from somewhere, cuts or taxes.

PROBLEM TWO.

That's it.

One wrinkle. Republicans will say it's all one big pot. (Some liberals too but god they are megastupid to do it) The whole idea of a trust fund is comical, haha, empty drawer in West Virginia. Then they lump everything together, Medicaid, Medicare, welfare, social security, and say "Entitlements" are bankrupting the country. That Is Bullshit.

$4 Trillion In FICA. We paid it. We need to get it back.

[mrcheerful]

5. Well the problem is today the governments low on funds, has raided the SS money

and they are worried that if everything remains the way it is today in 20 years SS won't have any money to give the people. So to solve the problem 20 years away they want to change SS because if they don't do something right now it might not get fixed 20 years from now all based on todays economy because they have no ideal what the economy will be in 20 years. You know like when Clinton balanced the budget, got a surplus started and it was projected to grow for the next 10 or 20 years until Clinton left office and GWB went on a drunken spending spree.

[sandnsea]

7. FICA didn't cover SS benefits THIS year

The problem of where to get the $4 trillion surplus that is supposed to cover benefits is here. The 2037 problem is completely different.

[Hannah Bell]

12. .

[kentuck]

18. What was the shortfall this year?

Do you have a link to that?

[sandnsea]

$29 billion

http://www.nytimes.com/2010/03/25/business/economy/25social.html

[ipaint]

35. The article goes on to say-

In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.
Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete.

[sandnsea]

45. The trust fund, right, that needs to be paid out of the budget

I said that the shortfall this year is primarily due to the recession. My point was that this is not a problem that begins in 2037. Dipping into the $2.5 trillion begins happening in the near future. The 2037 problem is different.

[ipaint]

23. They did in 2009

The amount bought in 2009 was $1,049 billion, while the amount sold was $950 billion. See investment transactions for more detail and earlier years.
http://www.ssa.gov/OACT/ProgData/fundFAQ.html#n2

According to the same data available for 2010 so far-

bought 306,719,454
sold 271,701,143

I don't see the negative balance.

[sandnsea]

27. $29 billion

I read it at the social security site previously, was quite surprised. There are articles on it too.

http://www.nytimes.com/2010/03/25/business/economy/25social.html

[ipaint]

37. See my reply above.

Also the times article is from march. The SS website figures I posted are from today.

[Radical Activist]

9. They don't care about giving money to people.

They care about not having that SS tax money to fund other portions of the budget, like they're doing now. If they didn't have that SS tax honeypot they might have to raise other taxes that rich people pay. No one wants that.

[Warren Stupidity]

122. nothing has been raided.

The surplus exists as t-bills. Those bonds are as good as all the trillions of other t-bills out there.

[Radical Activist]

6. The problem is that it's the most unfair, regressive tax in America.

You won't hear that in the press because most media pundits and their bosses are too close to retirement age to look at the issue that way. They're worried about the system running out of money. They're even more worried about their own benefits getting cut and they want to keep taxing younger, low-income workers to keep the system going.

Right now, the social security tax money is being used for other parts of the budget, which makes it another way that the tax burden is pushed onto middle and low income workers. The other issue is that the huge baby boom generation is getting ready to retire. That places a larger tax burden on younger workers, who are smaller in number than the boomers. That threatens government's ability to take from social security and fund other parts of the budget because not as much surplus SS tax income will be available.

[sandnsea]

10. That's if you consider it all one big pot

I don't look at the budget that way.

FICA is social insurance and if it were kept that way, most people would be fine with paying in a share and getting a return based on what they paid in.

Boomers retiring really has nothing to do with this, except for the fact that they gave the surplus away in the Bush tax cuts and that surplus was supposed to go back to the boomers who had already paid it.

By 2040, 30 years from now, when the boomer trust fund runs out and there really isn't enough workers to cover social security, the boomers will be dead.

This isn't a boomer problem. It's damned annoying that they keep saying it is. We Paid Our Own Retirement, while paying for our parents and grandparents too.

[Radical Activist]

33. ...

You say that the surplus was given away to pay for tax cuts. Isn't that because Bush essentially took social security money and used it to fund the general budget. If SS tax money is being used to fund the war and everything else, then why should we keep up the pretense that it's a separate pot of money? It's just a creative way to regressively tax the public.

[mikehiggins]

61. given?

The money accumulated because of the increase in SocSec taxes was "LOANED" to the Government in exchange for Federal bonds. Nothing was "given", all of it was "borrowed" without our knowledge or approval.

Let's say you loaned your irresponsible child $1000, on the basis of his "full faith and credit." At some point the kid decides that paying back the loan would be inconvenient, and would require he not buy his PlayStation 12 or stop buying rounds in the bar for his wealthy friends(or maybe borrow more money from chumps to pay you back).

What is happening now is that people are claiming that it would be too inconvenient to pay back the initial loan, and therefore the reasonable thing would be to start treating it as if it were a gift.

Of course, if the kid refuses to pay back the money, you aren't likely to loan him anymore and, more importantly, other people who loaned him money will begin to reconsider what his "full faith and credit" is really worth.

Clear enough?

And those who claim China, et al, will ignore our defaulting on a couple of trillion bucks in bonds have absolutely nothing to base that beleif on, other than blind faith and overwhelming hope.

We don't want to see how that works out, now do we?

HANDS OFF SOCIAL SECURITY!

[Radical Activist]

64. So you're saying the money has already been spent elsewhere.

Exactly my point. Let's stop pretending that we're being taxed regressively for our own retirement. It's funding the war and everything else. If we're honest about that then we can discuss what alternatives make more sense.

[sandnsea]

76. Because poor people pay FICA

and they love to say how low income workers don't pay any tax. They've got no reason to think they've got a valid debt if those poor people never paid anything to begin with.

That's why you make damn sure you keep the line drawn between the two sets of taxes.

[Hannah Bell]

13. winger talking points

[Radical Activist]

24. Progressives don't support regressive taxes.

You obviously do.

[Hannah Bell]

86. yeah, those new deal guys & their regressive schemes. raise income & capital gains taxes on the top

since you love progressive taxes so much.

[Curmudgeoness]

17. The really regressive part of this tax is the cap. After you make

$106,200 or thereabouts, you pay no more SS tax. You and I paid SS taxes on 100% of our income. Someone making $1 million only pays it on 10% of their income. That is the definition of regressive.

[Hannah Bell]

20. The progressive part comes in the payout, including SS disability.

and the cap on benefits.

[Radical Activist]

28. That would make it less regressive.

I'm glad Obama supports that. But the truth is that we'll still be taxing low income workers struggling to get by and giving some of that money to rich people who don't need to work for a living. It's obscene.

[Hannah Bell]

105. no, what's obscene is the dlc wingers who want to turn social security into welfare,

the second step toward axing it for everyone.

when the upper middle class is funding most of social security & getting little in return, they turn into an interest group dedicated to destroying it.

taxing all wages at 6.2% = the upper middle are paying more in combined ss & income taxes than the ruling class capitalists.

[avaistheone1]

29. DON'T BLAME THE BOOMERS. The boomers have paid into Social Security more than any other generation.

In 1983, the payroll tax was increased substantially in response to the recommendations, the previous year, of the Greenspan Commission on Social Security Reform. Prior to 1983, Social Security had operated on a "pay-as-you-go" basis with each generation responsible for paying for the benefits of the generation that preceded them.

The 1983 legislation changed the nature of Social Security funding. In addition to paying for the benefits of the preceding generation, as was customary, the baby boomers were also required to pay additional taxes to partially pre-fund their own retirement.

The net result is that the baby boomers have paid more into Social Security than any other generation. Yet they are often made scapegoats and blamed for the Social Security funding problem. I am not a baby boomer, but I am very sympathetic to them. They are getting a bum rap.

The intent of the 1983 legislation was to generate large Social Security surpluses for the next 30 years that were supposed to be saved and invested, in order to build up a large reserve in the trust fund that could later be drawn down to pay benefits to the baby boomers. The 1983 payroll tax hike has generated more than $2.5 trillion that is supposed to be in the trust fund. If the trust fund actually held this amount in real assets, full Social Security benefits could be paid until at least 2037 without any changes. Unfortunately, none of the surplus revenue was saved or invested in anything. It was all spent, by the government, on wars and other government programs without making any provisions for repaying the money.

http://www.newschief.com/article/20100710/NEWS/7105014/1013/opinion?p=all&tc=pgall




btw the Millennial generation is also larger than the Baby Boomer generation.

[Radical Activist]

34. ZOMG! Because who takes the blame really matters!

[avaistheone1]

43. WTF. If it doesn't matter then why did you bring it up??

[Radical Activist]

53. My post wasn't about what generation to blame.

Your response reveals more about your own concerns.

[avaistheone1]

66. Perhaps you should reread your own post.

"The other issue is that the huge baby boom generation is getting ready to retire. That places a larger tax burden on younger workers, who are smaller in number than the boomers."

So if you are not blaming the boomers, what are you suggesting that boomers be subjected to poverty after paying for the previous generation's retirement as well as a good portion of their own retirement, or are you suggesting that the boomers be left simply to die?

You are also in error about the size of the boomer generation. The millennial generation is larger than the boomers. The Millennial generation combined with Generation x is of course even that much larger than the boomer generation.

I suggest you go back to Pete Peterson and the rest of your right wing heros and get your facts straight.

[Radical Activist]

72. You added some words of your own.

"you suggesting that boomers be subjected to poverty"

I suggested no such thing. Switching to a different tax structure doesn't condemn anyone to poverty. It would keep boomers out of poverty without forcing younger workers into it with a regressive tax structure. Stop looking for monsters under the bed and respond to what I actually wrote.

[customerserviceguy]

97. I wouldn't call us scapegoats

I would just call us suckers, we're going to be left holding the bag for the end of this thing. Or, we're going to be the most hated generation of Americans because of the coming tax increases and benefit cuts.

Frankly, I'd be surprised if younger generations didn't want to put a bullet through our heads to avoid paying us.

[ipaint]

49. That last paragraph is right out of pete petersons scare the shit out of young people handbook.

His MTV propaganda campaign and website tell the young people all about the "horrors" of entitlement costs.

The Recent Crisis

We’ve all heard about the recession and how we need some thoughtfully targeted government spending to get back on track.

This spending will have the effect of raising our debt in the short term, but if done responsibly, the payoff will be worth it.

Our Current Debt

New government spending aside, the U.S. is already burdened with a nearly $11 trillion national debt!

This consists of money the government borrows from the public in the form of US Treasury bills and savings bonds, plus money that the government borrows from itself - i.e., money it takes from one pot to spend on another.

Other Obligations

The government has other financial commitments. The biggest by far are its promised payouts in Social Security and Medicare benefits, totaling nearly $43 trillion.

http://www.indebted.com/get-informed/government/

Right wing propaganda. Same as his "the elderly are hogs" media campaign when him and greenspan orchestrated the same heist in the 80's.

Some of us do remember. We were there and have been paying ever since.


Going back to your first paragraph, are you honestly trying to sell this crisis baloney as the wealthy want their monthly check so they aren't telling the truth, really? That's a ridiculous new twist. lol.

[Radical Activist]

57. I don't see the resemblence.

Are you suggesting that the US Goverenment DOESN'T have obligations to pay social security? Because that's what you put in bold as evidence of right wing propoganda. Facts are facts.
But please tell us more about why you support regressive taxes.

[ipaint]

69. The boomers already paid for their ss retirement.

They already paid the excess needed to cover the increased numbers.
If younger workers are burdened it will be as a result of the wealthy refusing to pay their fair share in addition to paying back their tax cuts and the cost of their vanity wars for resources. We need that tax money so the government can cash in their our excess payments held as treasury bonds to cover our retirement.

The shortfall in taxes has nothing to do with the increased number of baby boomers retirees.

Your framing the problem exactly like peterson did in the 80's and does today. Thereby creating a divide between the young and the old. As intended.

[Radical Activist]

74. No boomers paid for the retirement of previous generations

just like Gen X and Y are being asked to do now. Boomers also paid for other budget items not related to SS, as you pointed out.

Boomers have done an excellent job of looking out for their generational interests and you should expect others to do the same.

[ipaint]

78. No they did both.

Once again-

Prior to 1983, Social Security had operated on a “pay-as-you-go” basis with each generation responsible for paying for the benefits of the generation that preceded it. The 1983 legislation changed the nature of Social Security funding. In addition to paying for the benefits of the preceding generation, as was customary, the baby boomers were also required to pay additional taxes to partially pre-fund their own retirement.

See their are no generational interests. That's a pete peterson lie. Social security is an American interest regardless of age as us baby boomers proved by not only paying for the older generation but ourselves as well.

This right wing divide you are pushing is pure DLC. Just what I would expect. Theives and parasites on the backs of all american workers, the whole lot of them.

[Curmudgeoness]

8. The problem with Social Security is the Republicans hate it.

This program was set up at a time when most older Americans who were too old to work were indigent, usually had to live with their children and had no money. They became totally dependent on their children, and if they had no children, they often did not last long.

The debate over SS from the Repubs side is that SS is bankrupt and has no money. This is not true at this time, or in the near future. But what is true is that the excess "money" that SS has is not tucked away in a giant vault. It has been invested in US Treasury Bonds. When SS bought these bonds, that money was then used to fund the government because that is what bonds are used for. So....the United States owes the money back to SS, and that is the rub. The money in SS is just as safe and available as the money you would invest in bonds on a personal level. You would not say that you are broke if you had trillions of dollars invested in Treasury Bonds. But that is what the Repubs want you to believe---that SS is broke because the money is not in a vault. And yes, the people of the US owe the money that the government has already spent when those bonds come due. But that really is a separate issue.

[Hannah Bell]

11. The financiers want your money. That's the biggest problem.

They need to be up on charges & relieved of their money. That's the solution.

[xchrom]

14. Recommend - great discussion. Nt

[DJ13]

15. Those trillions in the SS trust fund have been spent to pay for wealthy tax cuts

Theres two ways to solve this, remove the FICA tax cap so the top income brackets repay us, or force the rest of us to suffer by slashing SS.

The cat food commission thinks the second alternative is the best choice.

[Hannah Bell]

19. Uncapping fica won't touch the crooks. They make their income from CAPITAL, not wages.

Rescind the bush INCOME tax cuts to the top 1%. That's how they stole it, that's how they pay it back.

The oligarchs want more taxation on labor so they can keep stealing from the social security surplus.

[Curmudgeoness]

36. I suggest both, remove SS cap and rescind Bush income tax cuts.

Yes, a lot of income is capital and therefore not taxed by SS, but there is a great amount of wages untaxed by SS as well. No doubt there would be a scramble to rearrange compensation, but not all of this.

And if the wealthy are paying higher income taxes, and that would have to include higher capital gains taxes if we deal with your dilemma, then the US Treasury can afford to pay back SS.

[Hannah Bell]

84. there isn't "a great amount". ss cap is supposed to be pegged to cover 90% of all wages.

your suggestion would only give the crooks more money to steal.

having a huge trust fund is a historic anomaly; it was fixed that way to give $$ to capital in the form of tax cuts.

if capital pays back ss, no need to change the structure of ss funding so as to turn it into a welfare arrangement.

[Curmudgeoness]

89. Cap is "supposed" to cover 90% of wages? Does it?

I am not following the whole argument you are making, and don't see why there would be more money to steal, but I am curious about the cap. I have not heard that it covers 90% of all wages. I do know that when I worked at an accounting firm, almost every return that I did was for people with wages over the limit for SS----and that was one firm in one podunk town. If I were to project this to the whole country, there are a tremendous number of people who are not paying SS on a large part of there wages.

[Hannah Bell]

103. uh, do you think that could be because most people don't HIRE people to do their taxes? duh?

you think the kind of people who HIRE ACCOUNTANTS to do their taxes is a random slice of america?

the cap is raised almost every year. it's been variously reported to currently cover somewhere between 80-90% of total wages.

the original design is for it to cover 90% of wages, & there's a reason for that.

[ipaint]

71. +1 nt

[Radical Activist]

38. 3) Stop pretending. Abolish the regressive Social Security tax.

Replace it with a progressive tax structure and make the payouts income based. No more taking from poor workers and giving to retired millionaires.

[kentuck]

44. Because people would die...

when they needed the money and it wasn't there and the conservative government would not allocate anything to help those in need.

[Radical Activist]

59. That's a very imaginative theory.

As long as people over 65 continue to vote in high numbers then that isn't a serious concern. Social Security will be preserved regardless of the tax structure used to support it. Back in the real world, people continue to be deeper in poverty because they pay a regressive SS tax for retirees who travel the country in their Winnebago.

[kentuck]

70. Personally, I do not have a problem with means-testing SS...

At a certain point, they should be taxed at a rate where all the SS funds they receive would go back into the Treasury. Just my opinion.

Sorry for the lack of imagination. But I know what it was like before Social Security. Why would it be different if there was no SS fund? Do you think that money would be spent elsewhere if it was not allocated specifically for Social Security? It probably would be.

[DURHAM D]

48. Its regressive on the collection side but

progressive on the pay out.

But you have already been told that and don't seem to want that to be the truth.

[Radical Activist]

60. No, paying wealthy retirees on the backs of the poor is not progressive.

The facts are that millionaires get SS too. The entire system is regressive on both sides.
And why would one justify the other anyway? It's a nonsensical argument.

[DURHAM D]

68. whatever...

You are aware that there is a cap on SS pay out aren't you?

I have made more money (paid more SS) than my sister (who is one year older) every year of my life. Some years twice as much. Our pay out is within $200 of each other. It was not a good savings plan for me. But I figure I am contributing to my sister's well-being and happy to do so.

[sandnsea]

58. Then they'll just cut it down to a meager poverty benefit

Trust me, this is really such a horrific idea. Have you ever been to a welfare office?

[Radical Activist]

67. I believe that a big part of the current system

is that people don't want to bruise their pride by having to apply for welfare when they reach retirement. But pridefulness isn't a very convincing reason for me. I believe the voting power of retirees will stop big cuts.

[sandnsea]

77. Have you been to a welfare office?

People apply for food stamps when the social security isn't enough. They apply for Medicaid. It's not pride.

And if you make it needs based, they'll just reduce social security down to the $650 a month they give people who don't have enough quarters. That is not a good idea. We won't have seniors eating cat food, but they'll be living in dog crates because they won't be able to pay rent.

[Radical Activist]

88. Yes.

But it was only part of a job. I didn't have to apply. It's a depressing place and I don't wish it on people. And I believe there a lot of people who would never apply for SS benefits if they thought it was welfare. That's pride.

This is all theoretical anyway. There won't be major changes to social security taxes no matter how grossly unfair it is. Too many people are invested in it the way it is now, and would be too scared of any major change. They'll keep raising taxes on workers before doing anything else.

[sandnsea]

92. Yes, it's a depressing place

But the pride comes from supporting yourself, not being too good for hand-outs or charity or that crazy crap.

But the real reason for not making it means tested is so the people who do think they're too good for government hand-outs can't cut the program down to nothing. You do at least see the likelihood in that happening?

[Hannah Bell]

85. winger talking points.

[Radical Activist]

87. left-winger talking points. yes.

Posting it twice doesn't make it any more valid.

[Hannah Bell]

102. you ain't fooling no one, rad.

[Radical Activist]

109. Who am I trying to fool? Please explain.

You post this often enough to explain yourself. "I see through you" and similar comments. It sounds pretty nutty when you follow me around from thread to thread typing things like that. My arguments are straightforward. What exactly do you mean?

[Hannah Bell]

112. i'm not following you -- you responded to *my* post.

don't want my response, then don't respond.

[Radical Activist]

114. No. you responded to two of my posts with the same ugly one-liner.

I was responding to someone else each time and it's not your thread.

Why didn't you answer the question? Don't be the junior-high school mean girl who spreads gossip in secret behind a persons back where they can't respond. Anything honest and decent can be said out in the open. Or, if it isn't honest or decent then don't insinuate anything at all.

[Hannah Bell]

115. if you don't like it, put me on ignore. you're mouthing winger talking points, i call it as i see

it, & i said it quite openly, to *you*, so you can stop with the phoney story about the mean girl talking behind people's backs.

stop spouting winger talking points if you don't want to be criticized for spouting winger talking points.

[Radical Activist]

117. Arguing for a more progressive tax structure is a left-wing position.

Next time, why don't you try defending your conservative positions with substance rather than making more of your strange insinuations.

[Hannah Bell]

118. lol. sure, rad. whatever you say, rad.

[The Magistrate]

25. In Simple Out-Line, Sir

Social Security is a generational transfer; money paid in by working people goes out to retirees. Very few retirees are left who receive any benefit without having previously paid into the system all their working lives.

The amount paid in by working people has greatly exceeded the amount paid out in benefits for years. It will continue to do so for about a quarter century.

This surplus paid in by working people over benefits paid out has been lent to the U.S. government, which has used the money in the same way it uses general funds. The Social Security Trust fund accordingly holds a tremendous sum of Treasury bonds, rather than cash or other possible investments a pension fund or annuity trustee might choose.

Social Security will need to draw on these bonds, to begin to cash some of them in, when the money paid in by working people falls below the benefits that must be paid out, which, again, will occur about a quarter century in the future, if present trends hold.

The real 'problem' is that the people presently in Congress, and various financiers, do not want to have to honor the obligations on the Treasury of the bonds held by the Social Security Trust Fund. The former want to continue to treat the legally dedicated pay-roll tax (an extraordinarily regressive fiscal instrument) as part of general revenue; the latter fear the value of their own investments will decline if the government diverts its income stream to paying debts it owes to the populace at large, rather than tending to their needs.

What is happening in this present propaganda drive against Social Security is about what has been done in the business world when older companies were brought up by financial buccaneers in the eighties and nineties: the proprietors want to loot the pension funds, using them for interest expenses and dividends, while evading their contractual obligations to people who worked, and are working, for the company. One of those things where, as the saying goes, 'the crime is what's legal...'.

'Fixing' the matter, to the limited degree it needs fixing, requires the government to raise more money. The degree it needs 'fixing' is limited because the system needs to be 'fixed' only if one accepts the premise that the government will not honor the Treasury bonds held by the Social Security Trust Fund. Thus all proposals for 'fixing' the system really aim at putting off the day when a U.S. government may state flatly it will not honor an obligation on the Treasury, because the Congress will not live up to its legal obligations in regard to dedicated revenues.

With that said, a variety of small changes would postpone this day of reckoning for many years. The most desirable would be to address the regressive nature of the payroll tax by removing the cap on it, and ceasing to exempt salary above a certain amount from the tax. If properly done, this would include a levy on income from options and similar devices companies use to pay salaries that are not legally salaries to many employees. It has long seemed to me that a proper measure, going even further than this, would be a 'sales tax' on transfer of investment instruments, or a dedicated surcharge on capital gains taxes, both of which would capture some portion of wealth generated by the economy at large for the pensions of working people.

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

[customerserviceguy]

26. The history of the system

shows that it has collected somewhat more than it pays out, up until just recently, and that has been it's Achilles heel. Congress saw the fund as a way to buy votes from almost the get-go, and in the early years, expanded benefits greatly. The last time it did this was in the early 1970's, when it instituted a cost of living adjustment for the first time to Social Security.

Before that, the system had been relatively impervious to recessions, but in the mid-1970's, we had something called 'stagflation', where the economy was soft, yet inflation persisted. My belief is that this occurred after each time oil prices went up dramatically, something that happened in the mid-1970's, the late 1970's, and 2007-2008 (remember $4-5 a gallon gas, depending on where you lived). The first two events were triggered by OPEC, the countries that formed a cartel to control oil prices, and while they were successful in the short term, oil prices plunged after the world economy suffered the resultant recession.

Once we had a situation where expenditures were way up, and inflow was way down, Social Security faced it's first bankruptcy crisis in 1977:

http://www.time.com/time/magazine/article/0,9171,918946,00.html

The solution was to raise taxes, especially the wage base, and cut benefits. After the 1979 oil shock and the 1980-1982 recession, the Greenspan Commission did the same thing all over again. Both sets of increases took advantage of a new phenomenon in the United States, the baby boom. By taxing the hell out of that large generation, the system was enabled to flourish for about another quarter-century.

The current recession, being far deeper and longer than any other since the Great Depression, really took a toll on the inflows of FICA taxes. Add to that the fact that the leading edge of the baby boomers were eligible for early retirement (and reduced benefits), and you finally have produced another time that inflows were exceeded by outflows (the first one happened in the 1980') :

http://www.google.com/hostednews/ap/article/ALeqM5hG-m9BDHQn71Nv0MQXiyMQFvSsuQD9HD65080

That outlook barely mentions the fact that the very first baby boomers born in 1946 will be eligible for full benefits in just a bit more than four months. They will be followed by ever-increasing waves of boomers, until we hit the 1957 peak, eligible for full benefits at age 67 in 2024. After that, there will be another seven years of boomers, finally subsiding in 2031. However, most of those baby boomers will be alive and kicking, the oldest ones will be 86. Perhaps that seems old to you now, but a lot of people survive to that age. My dad's only two years away from that, and while his health is poor (Parkinson's) his brother with the same illness passed away at 89 years of age.

Of course, after Congress stopped handing out extra benefits, there was a surplus most every month for the last few decades. The problem is, those surpluses were used in a sort of creative accounting to hide budget deficits in many of the years over the last four decades. The Treasury issued special certificates, that while technically bonds, were not negotiable instruments like the Treasury bonds that you or I might be able to buy either from the US Government, or a private holder of those tradeable securities.

Every time the system has been in danger of having to redeem those securities (I call them IOU's, but some here would quibble with me) they always seem to find a way to raise payroll taxes and cut benefits. You see, the only way to redeem the special bonds is to run a surplus in the economy, which has only happened twice since 1959. The only way to pay those securities is to raise taxes, cut spending, or just simply issue checks with nothing behind them, even creative accounting, and that inflates the currency. Check out the histories of Weimar Germany, Argentina, or even present-day Zimbabwe to see what hyperinflation does.

[iamtechus]

39. So much mythology so little time. Read this and pass it along.

Top 5 Social Security Myths

Myth #1: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever. After 2037, it’ll still be able to pay out 75% of scheduled benefits—and again, that’s without any changes. The program started preparing for the Baby Boomers’ retirement decades ago. Anyone who insists Social Security is broke probably wants to break it themselves.

Myth #2: We have to raise the retirement age because people are living longer.

Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than they did 70 years ago. What’s more, what gains there have been are distributed very unevenly—since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half. But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth #3: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come. Right now, high earners only pay Social Security taxes on the first $106,000 of their income. But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

Myth #4: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market—which would have been disastrous—but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

Myth #5: Social Security adds to the deficit

Reality: It’s not just wrong—it’s impossible! By law, Social Security’s funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.

----------------------------------------------------------------------------------
http://delmontpda.wordpress.com/2010/08/15/top-5-social-security-myths-debunked/

[Kalun D]

52. GOOD POST

Awesome

[sandnsea]

54. Broken down into real dollars and cents

2010 $2 trillion surplus, 2023 $4.5 trillion surplus

That is the money that will be used to pay out scheduled benefits until 2037.

"And those bonds are backed by the full faith and credit of the United States."

The United States federal budget, which runs a trillion+ deficit and is $13 trillion in debt.

Each year the trust fund "surplus" is used to pay benefits, the real dollars and cents has to come from the federal budget. So we will either tack it on the trillion dollar deficit, or figure out some way to reduce the federal debt through budget cuts and higher federal taxes.

In 2037, we may have to do something else entirely to bring benefits up to 100%.

[BeFree]

126. Half truths

Like this one:

""Myth #4: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States.""

The cash that was taken in by the SS was borrowed and then spent by the rest of govt.

It is the same as if you had a million in the bank and then borrowed a million to go spend. You'd pay interest on what you borrowed and so you'd lose money everyday. That's just plain stupid.

So, the bonds - special bonds - since they can't be redeemed or sold, are IOUs.

And since the govt. has promised to pay off the bonds the are IOUs and are counted as a debt, the IOUs add to the deficit. Every year the deficit grows.

Right now, whatever cash comes into SS goes right back out to pay SS recipients. There is no reserve of funds, as there damn well should be, since the reserves have been loaned out to the govt. and will NOT ever be paid back.

It's a ripoff of the grandest sort.

[Kalun D]

51. Easy

""So please explain the problems social security faces""

a hostile corporate White House

[DURHAM D]

56. Your question "So please explain the problems social security faces (as it is now) to me."

The problem is just two words - Barack Obama.

The House and Senate voted not to set up the Cat Food Commission. The President then did it by Executive Order. He stacked it with conservative appointees who would help perpetuate the big lie that SS is in crisis. Obama started that lie during the primary? Don't know why a Democrat would do that.

[inna]

81. Obama didn't START the problem and the lie...

It's been floating around for at least 20 years.

Still, creating the Commission by Exec Order and stacking it with known SS looters is nothing short of unexcusable.

[DURHAM D]

83. To clarify -

What I was trying to say is that Obama started repeating the lie during the primary. You are right - he didn't start it. But his buy in to the myth was shocking.

[sandnsea]

90. See post #4

Follow. Also, please look at the graph posted in #79.

I'd like to know where you propose to get the money to pay back all that yellow that is in the graph. That's the trust fund that allows Moveon to say there's no problem. We will be needing to use that to offset the FICA shortages within the next 5-10 years. We have to cash in the trust fund bonds.

Where do you plan to get that money?

[customerserviceguy]

98. Your posts on this topic

have been succinct and relevant. There are many here who think that just because something seems to have been going on for years and years, it will continue to do so perpetually, with no visible means of support.

[ipaint]

120. Tax the rich, tax transactions on wall street and really put an end to

both wars, not a fake end with a doubling of hired guns and big new embassys. That ought to do it.

Why should the only group that is defaulted on by the gov. be American workers? The problem is the top few percent of greedy americans not social security or treasury bonds. This "the sky is falling and we can't redeem our bonds" meme is pure right wing nonsense and enables the heist.

If the administration and congress side with the wealthy hoarders and choose to make social security the problem, and it looks like that is the way it will be, they will be making a big f*cking mistake.

This is undeniable out in the open class warfare and the majority of americans know it. Social security is common ground for most workers regardless of party. As folks get poorer and poorer an attack on something we all treasure and increasingly rely on is very dangerous and stupid.

[laughingliberal]

113. +1000 nt

[Skink]

82. the only problem I see is that

today's meager wages mean that by the time I retire the return on the investment I was able to make will also be meager. And the meager wages also mean I didn't do much other investing. I might end up working longer and getting less becuase of it.

I'm guessing after 2037 that retirees, even without cuts to their benefits, will recieve less because of the high healthcare costs that were placed on employers.

[xchrom]

119. kick

[Yo_Mama]

127. To Summarize

A) Social Security began as a pay-go system, in which every year the taxes paid in are paid out to beneficiaries.
B) It is now running a deficit and will next year. In this year's trustees report, it is predicted to go mildly positive in 2013 and 2014, and then roll back into permanent deficit in 2015.
C) Since 1983, the date of the last major adjustment, Social Security taxes have been set at a level that is supposed to produce a surplus. And it has. Currently all wages and salaries up to $106,800 annually are taxed at a 12.4% rate for SS. So an annual salary of 100K generates $12,400 in revenue to the fund, a salary of 50K generates a payment of $6,200 to the fund, etc, a salary of 25K generates $3,100 for the fund.
D) Unfortunately, the surplus was given back to the general fund, and spent. The Trust Fund is almost entirely a pile of special Treasury bonds issued by one arm of the federal government to another arm of the federal government. When the money is needed, the general fund has to pay the money back to Social Security (as it is this year). The theory always was that we would borrow to do that. See Treasury Direct Debt to the Penny, and note that the sum of our current debt held by the public plus our intragovernmental (almost all of which are the Medicare/SS trust funds) is almost equal to nominal GDP (currently 14.6 trillion) already:
http://www.treasurydirect.gov/NP/BPDLogin?application=np
Next year it will get there.
E) Regardless of what the law says, current predictions show that the US debt load held by the public (domestic and foreign) will reach the level at which it is about equivalent to total GDP sometime in the 2020-2023 period. At that point, the US will be unable to borrow more money, because creditors will not believe we'll be able to pay it back. Call it the Greece R Us era. Plus, our interest payments on the debt we have out will rise very sharply, which will put much more pressure on the federal budget.
F) So regardless of what the law says, as things stand we will not be able to pay all the Social Security benefits to which Social Security beneficiaries are expecting to receive, because we won't be able to borrow the money to pay the benefits.

So, we have to fix it. All the debate is about how we fix it, not whether it needs to be fixed. We can cut benefits (not a good plan, IMO) or raise taxes or cut other areas of the budget or some combination of all three, but we don't have the option to do nothing. However, whatever we do, we ought to move the money out of the government's hands and create a real pool of assets on which to draw. One could do that by placing the money out on deposit in banks in insured CDs or so forth.

The worst part of it is that Medicare is running a much more severe deficit, and that will put dual stress on the US general fund. Much more of Medicare is paid out of the general fund. So we have to raise Medicare taxes substantially, plus cut Medicare benefits.

To give you an idea of how huge the Medicare/Social Security payments are in relation to our total budget, see the most recent Monthly Treasury Statement (pdf warning):
http://fms.treas.gov/mts/mts0710.pdf

Fiscal year-to-date (FYTD) total expenditures have been 2.9 trillion. Revenue FYTD has been 1.75 trillion.

CMS (Centers for Medicare and Medicaid Services, see page 10) total outlays FYTD have been 0.88 trillion.
SSA (Social Security Administration, see page 16) total outlays FYTD have been about 0.63 trillion.
Together, the total outlays are over 1.5 trillion, or more than 50% of the outlays. They are also about 85% of all current government revenues FYTD.

Medicare, Medicaid (a lot of the elderly most disabled receive Medicaid as well) and Social Security/Disability expenses will rise far faster than GDP or program revenues over the next few decades because the proportion of retirees as a percent of the population will continue to rise.