Please Help. Son writing paper on Social Security "Crisis"

[IScreamSundays]

My son was given a list of subjects by his economics professor. I know I have read many an article here over the years regarding how solvent SS actually is and the manufactured crisis. Not very long ago I was reading a post where someone had put up a diagram showing the flow of money into SS and how it is borrowed by Congress and then paid back. I would like to be able to direct him to some factual information. If you could help me out, I will burn incense and send positive thoughts your way. Thanks.

[KeepItReal]

1. Check this out from the Social Security Trustees

"Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession and to an expected $25 billion downward adjustment to 2010 income that corrects for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy. After 2014 deficits are expected to grow rapidly as the baby boom generation’s retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers. The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about 75 percent of scheduled benefits through 2084. The projected exhaustion date for the combined OASI and DI Trust Funds is unchanged from last year’s report.

The long-run financial challenges facing Social Security and those that remain for Medicare should be addressed soon. If action is taken sooner rather than later, more options will be available and more time will be available to phase in changes so that those affected have adequate time to prepare.

...


Conclusion

The ACA makes significant progress toward making Medicare financially viable. But while it is projected that the Medicare HI Trust Fund is adequately financed until 2029, and the Social Security OASI and DI Trust Funds are adequately financed until 2040 and 2018, respectively, the significant longer term financial imbalances of the programs still need to be addressed. The sooner action is taken to address the long-run financial imbalances, the more reform options will be available, and the more time there will be to phase in changes so that those affected will have adequate time to prepare. "

Full link:

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

Here's a link to Expenditures year-by-year:

http://www.ssa.gov/OACT/STATS/table4a1.html

[IScreamSundays]

3. So sweet. Thank you. nt

[sandnsea]

5. The Trust Fund is financed by the US Govt

When the US Govt is already $13 trillion in debt, saying the Trust Fund is adequately financed until 2029 is pretty much a faith-based proposition.

[Turbineguy]

2. Be OUTRAGED!!!!!

about this CRISIS!!!!!

[sandnsea]

4. Social Security IS NOT solvent

A Trust Fund that is owed money from an institution that is trillions of dollars in debt, is not solvent.

The Trust Fund DOES NOT have any money in it. The US Govt will have to borrow money to pay back the trust fund.

In the future, around 2030 or so, AFTER the govt pays back the trust fund AND it still runs out; then social security will only bring in 75% of what it will owe in benefits.

There is no "crisis". But social security is also NOT solvent.

If you turn in anything that doesn't include that information, your son should get an F. The twisting of the social security problems has been disgraceful.

You can even find articles from Krugman that verify that social security IS NOT solvent.

[rocktivity]

7. And he should get an F-Minus if he says one word in favor of privatization

Which is nothing but a richest-get-richer scheme for Wall Street corporate personhood.

:headbang:
rockivity

[sandnsea]

9. Why do you jump to that conclusion?

I thought only right wingers thought in black and white.

Isn't it possible to identify a problem and NOT come up with a right wing solution?

I just don't pretend you have to "strengthen" social security if there's no problem. What a bunch of weasel-word bullshit.

[rocktivity]

13. SS privatization IS a right-wing solution

To wit, it's not a solution at all. If SS needs more money, the most fiscally, politically and morally responsible solution IS reducing or eliminating the salary cap.

Parents can be SO overprotective...

;)
rocktivity

[sandnsea]

18. Of course it is

I still don't get why you jumped to the conclusion that someone would support privatization just because they acknowledge the "potential insolvency" of social security. You call it potential, I call it as obvious as the mortgage crisis was five years ago.

[Hannah Bell]

22. I call it bullshit. Right-wing bullshit, no less.

[Luminous Animal]

11. Absolutely, have your son read Krugman

http://www.nytimes.com/2010/08/16/opinion/16krugman.html

And Dean Baker
http://www.truth-out.org/article/dean-baker-fiction-social-security-trust-fund

[sandnsea]

12. Yes, let's look at that

"Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come."

Yes, the "so-called trust fund". Where is the money going to come from when we start paying benefits from the "so-called trust fund"?

And where are benefits going to come from after 2037, when the program's actuaries forecast 75% income of expected pay-outs?

That's not solvent and Krugman knows it.

Unless, as I said above, you just want to go on faith-based social security.

[Luminous Animal]

20. The trust fund holds government bonds. And just like any other bond that the U.S.

government holds, it must be paid back. Unless, you are advocating that the U.S. default on those bonds.

Also, Krugman is using the term "so-called", to mean "commonly called." The trust funds actual name is Old-Age and Survivors Insurance Trust Fund. And where are those benefits going to come from in 2037 when those funds might be exhausted? As everyone and their grandmother knows, the least painful and most pragmatic solution to avoiding a shortfall in 2037 is to raise the income threshold now.

[Hannah Bell]

23. Why do you ask the same questions you ask in every post on this subject?

The answers have been explained to you, patiently, painstakingly, dozens of times, but you just go on & on like a broken record, repeating the same set of talking points out of Pete peterson's playbook.

[Hannah Bell]

21. Baloney. US debt = 94% of GDP (most owed to its own citizens).

So if I make 100K/year & buy a house for 94K, by your reckoning I am "bankrupt" & my mortgage holder is "insolvent".

The US has income of approximately $14T/year.

By your reckoning anyone who buys US Treasuries = also insolvent.

Define insolvent: A situation in which a person or business is unable to pay off their debts even if all their assets are liquidated.

governance.tpk.govt.nz/utilities/glossary.aspx







Please don't let your son take economics from sandnsea.

[BzaDem]

24. The only way you get solvency is to assume the US could "liquidate" 14 trillion of assets.

Of course, that assumes the government could tax 100% of everyone's income, and that this would somehow be legitimate. In general, your argument assumes that ALL income belongs to the government, and that the government lets you keep an allowance out of the kindness of its heart.

I would much rather have my son taking economics from sandnsea than learning voodoo from you.

[Hannah Bell]

25. only if you assume all the debts fall due on the same day & the us has no income.

but they don't, & it does.


If I make $100K a year I can borrow $200K to buy a $300K house. I'm not therefore "insolvent". Nor does my entire $100K/year go to my mortgage payments, but only a fraction thereof.

I become "insolvent" only if:

1) I lose my source of income, &
2) My remaining assets won't pay off my bills on their scheduled due dates.


Since neither you nor sandnsea apparently understand something as basic as the meaning of insolvency, you're all welcome to your own special economics class.


Alf Landon, 1936:

In his 1936 campaign against FDR, Alf Landon called the new program a “fraud on the workingman,” and continued:

“Every month they bring 6 per cent of their wages…so that he may act as trustee and invest their savings for their old age….the day comes…What do they find? Roll after roll of neatly executed IOU’s.”2


George W Bush, 1978:

In 1978, a young Congressional candidate picked up the theme of crisis. Stumping at the Midland Texas Country Club, George W. Bush said Social Security:

“ will be bust in 10 years unless there are some changes…The ideal solution would be… to invest the money the way they feel.”8

Like the WMDs, the 1988 Social Security bust never manifested. You’d think Bush would be embarrassed, but 20 years after the crisis-that-wasn’t, he’s still banging the privatization gong..

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x326490


http://www.theatlantic.com/past/issues/98jul/socsec.htm

[Yupster]

26. But if you made 100 k and had a 94 k mortgage

you would year by year be gradually paying that debt off.

You wouldn't be taking out another 10 k loan year after year.

Any one would know that would be disastrous.

[Hannah Bell]

27. But we don't have to take out a $10K mortgage every year. That's a policy choice driven

by the finance sector -- which makes money on the deal.

kinda like it sold the "mortgage debt" scam, the "student loan debt" scam, the "credit card debt" scam, etc.

40% of us profits go to the finance sector, & they make them mostly by figuring out new ways to get people, cities, counties, states & nations into hock.

and they bribe politicians to get there.

[Yupster]

28. I meant the new loan each year

to be the additional money the government borrows each and every year.

Basically we owe $ 14 trillion and are borrowing $ 1 trillion more every single year.

That's a lot different than a family that's scared of its huge $ 100,000 debt, but each year they're slowly paying off $ 2,000 or $ 3,000.

[Hannah Bell]

29. so did i.

[rocktivity]

6. Hope this helps

http://www.bushin30years.org/about.html

And here's a coincidence--this was posted today:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9360861&mesg_id=9360861

The bottom line is, Social Security can solve its potential insolvency problems forever by eliminating the salary cap, with the added benefit of lowering everyone's rate.

:headbang:
rocktivity

[sandnsea]

10. "potential insolvency"

lol. Yeah, that would be... INSOLVENT. I don't know why the fuck people have to pretend otherwise.

[rocktivity]

17. "Potential Insolvency PROBLEMS," I said

But two out of three isn't bad.

:headbang:
rocktivity

[pinboy3niner]

8. Good info and links here:

Fight the Social Security Fear Mongers! (posted by alberg 8/5/10)
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=8886226

[AngryAmish]

14. Why are you doing your son's term paper?

[B Calm]

15. According to republicans social security has been in a crisis for over 70 yrs.

[IScreamSundays]

16. Wow. Thanks so much

Anyone else care to chime in??

[hugo_from_TN]

19. He needs to learn to do his own research.

Give him directions to the library.