Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Social Security's $20 Trillion Shortfall: Why Reform is Needed
Heritage Foundation ^

Posted on 01/17/2008 6:14:34 PM PST by newbie2008

Social Security faces an enormous future deficit: Between today and 2075, the inflation-adjusted shortfall is projected to reach a staggering $20 trillion. Although the problem with the current system is due in part to changes in demographics, the root of the problem lies in the fact that the Social Security system itself is poorly designed. Workers, particularly those under age 50, are slated to receive very low benefits in return for a record amount of payroll taxes they send to the federal government. 1 These workers could enjoy substantially greater levels of retirement income if they were allowed to place the bulk of their payroll taxes in professionally managed individual retirement accounts, 2 which historically have had significantly higher rates of return.

Defenders of the current system generally admit that personal accounts would make workers better off, but they also argue that the "transition cost" of privatizing would be significant. More specifically, because a major share of the payroll taxes now used to pay benefits would be invested instead in private accounts, policymakers would need to find several trillion dollars to finance benefits for current retirees and those nearing retirement (and, therefore, too old to take advantage of private accounts).

(Excerpt) Read more at heritage.org ...


TOPICS: News/Current Events
KEYWORDS: genx; greedygeezers
Navigation: use the links below to view more comments.
first 1-5051-73 next last

1 posted on 01/17/2008 6:14:37 PM PST by newbie2008
[ Post Reply | Private Reply | View Replies]

To: newbie2008
Social Security is nothing more than a Ponzi scheme.

It is bankrupt right now because every dime that was ever collected has already been spent.

2 posted on 01/17/2008 6:19:30 PM PST by evad (.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: newbie2008
If SS had been set up to really accrue funds in a real separate account for each enrollee, we would be sitting on such a large pile of assets, but nooooo! The supporters of big and bigger government engineered the most spectacular money and power grab, even one that eclipsed the one that forced citizens to exchange all their gold for paper money.

This abomination of a system brings in so much power and money that not even the driver of the Straight Talk Express can speak with total honesty about how bad it is, or what really needs to be done to fix it.

3 posted on 01/17/2008 6:22:15 PM PST by theBuckwheat
[ Post Reply | Private Reply | To 1 | View Replies]

To: ErnBatavia

Ping.

Boomers fault!

Glad I was born in ‘45.


4 posted on 01/17/2008 6:24:45 PM PST by Graybeard58 ( Remember and pray for SSgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
[ Post Reply | Private Reply | To 1 | View Replies]

To: evad

All of us baby boomers can only hope that they can tap into another government Ponzi scheme to pay us!


5 posted on 01/17/2008 6:25:35 PM PST by doc1019 (Rabbit and the Hare Fred 08)
[ Post Reply | Private Reply | To 2 | View Replies]

To: qam1; ItsOurTimeNow; PresbyRev; Fraulein; StoneColdGOP; Clemenza; m18436572; InShanghai; xrp; ...
Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.  


6 posted on 01/17/2008 6:25:48 PM PST by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
[ Post Reply | Private Reply | To 1 | View Replies]

To: newbie2008
Uncle Sam: "Gimme some money for your retirement."

Man: "What happened to the money I gave you last week?"

Uncle Sam: "I spent it."

Man: "Maybe I should put some of this money in the stock market."

Uncle Sam: "Nah, too risky."

7 posted on 01/17/2008 6:29:32 PM PST by groanup (IRS. It's what we live for.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: newbie2008

newbie2008, grab a bottle of hootch and take a shot every time you see the word “Ponzi” or “boomer” on this thread. You’ll soon be drunk.


8 posted on 01/17/2008 6:29:44 PM PST by Graybeard58 ( Remember and pray for SSgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Graybeard58
Boomers fault!

Sorry, you cannot blame this on the Boomers. It was enacted by Roosevelt and Johnson was the first to start stealing from it. Then Reagan increased the contribution rate to it to save it, which Congress gladly spent.

You can blame a lot of things on the Boomers, but this is not one of them. And as a Boomer, I do not expect to get a dime from this system.

Of course, that is why you are glad you were born in 45, so you will get some of it before it goes bankrupt.
9 posted on 01/17/2008 6:31:13 PM PST by microgood
[ Post Reply | Private Reply | To 4 | View Replies]

To: newbie2008
Very simple. SS ends today. All people eligible as of midnight tonight will proceed to their SS office and sign a document either stating they WANT the benefit, or they DO NOT WANT the benefit.

Those taking the benefit will get their money and pay takes on same. Those not taking the benefit will receive a percentage tax break each year for the rest of their lives until they die said benefit exceeds the actual SS benefits they would have received.

Then it's up to government to STOP SPENDING!

10 posted on 01/17/2008 6:31:39 PM PST by Doc Savage (The tree of liberty needs to be refreshed from time to time with the blood of patriots and tyrants)
[ Post Reply | Private Reply | To 1 | View Replies]

To: newbie2008
the inflation-adjusted shortfall is projected to reach a staggering $20 trillion.

Add Medicare and it becomes $47 Trillion. Future looks bright

11 posted on 01/17/2008 6:32:18 PM PST by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
[ Post Reply | Private Reply | To 1 | View Replies]

To: microgood
You can blame a lot of things on the Boomers, but this is not one of them.

Boomers are in charge now and instead of attempting to fix it, they piled on with the Prescription Drug Pandering Act

12 posted on 01/17/2008 6:34:34 PM PST by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
[ Post Reply | Private Reply | To 9 | View Replies]

To: newbie2008

You can take my SS check....from my cold dead hands.


13 posted on 01/17/2008 6:34:48 PM PST by Gator113 (My short list..Fred, Hunter, Romney.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: groanup

Exactly. The politicians will never reform SS because they won’t have trillion$ to toss around like confetti any more. They never rescind a tax once it’s in place and generating lots of play toys.


14 posted on 01/17/2008 6:35:01 PM PST by Dumpster Baby ("Hope somebody finds me before the rats do .....")
[ Post Reply | Private Reply | To 7 | View Replies]

To: newbie2008

If the shortfall is $20 trillion, then no reform is going to fix it. Might as well send the bill to the Democratic Party.


15 posted on 01/17/2008 6:35:19 PM PST by Brilliant
[ Post Reply | Private Reply | To 1 | View Replies]

To: evad

The general fund ... we are awash in IOUs, worhtless IOUs. But don’t we have a ‘great society’?


16 posted on 01/17/2008 6:36:45 PM PST by MHGinTN (Believing they cannot be deceived, they cannot be convinced when they are deceived.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: qam1
Boomers are in charge now and instead of attempting to fix it, they piled on with the Prescription Drug Pandering Act

I would agree, but that is Medicare, not Social Security, which Bush actually tried to fix.
17 posted on 01/17/2008 6:38:08 PM PST by microgood
[ Post Reply | Private Reply | To 12 | View Replies]

To: groanup

Exactly.


18 posted on 01/17/2008 6:38:16 PM PST by BenLurkin
[ Post Reply | Private Reply | To 7 | View Replies]

To: microgood

I’m joking kiddo.


19 posted on 01/17/2008 6:39:01 PM PST by Graybeard58 ( Remember and pray for SSgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Graybeard58

LOL! Could use that philosophy on any thread here. Theme = drink, theme = drink … great idea. ;-)


20 posted on 01/17/2008 6:39:33 PM PST by doc1019 (Rabbit and the Hare Fred 08)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Graybeard58
I’m joking kiddo.

You got me!
21 posted on 01/17/2008 6:42:17 PM PST by microgood
[ Post Reply | Private Reply | To 19 | View Replies]

To: microgood
I would agree, but that is Medicare, not Social Security, which Bush actually tried to fix.

Huh..are you series??

22 posted on 01/17/2008 6:43:01 PM PST by evad (.)
[ Post Reply | Private Reply | To 17 | View Replies]

To: newbie2008

So folks, tell me....this has gotten better with the democrats in control of congress, right? I mean, it’s much better now than it would have been if anyone would have backed Bush when he was taking on the issue, right? Just wait until there is a democrat in the White House...then this problem will be completely resolved, right?


23 posted on 01/17/2008 6:43:07 PM PST by Gator113 (My short list..Fred, Hunter, Romney.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: newbie2008

This is from 1998, and there is a lot better data on SS from 2005.

The trust fund is currently worth about 3 trillion...it is not going bust anytime soon.It is backed by government bonds that the US has never reneged on, and by law, can only invest in those US government bonds.

Social Security as we know it isn’t going to be touched by politicians for a decade, if then. Bush tried to just get a dialog going...you saw how well that worked.


24 posted on 01/17/2008 6:43:51 PM PST by A.Hun (Common sense is no longer common.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: evad
Huh..are you series??

I thought Bush tried to privatize Social Security at some point. I know he failed but I thought he was going to give people control of at least some of it.
25 posted on 01/17/2008 6:44:52 PM PST by microgood
[ Post Reply | Private Reply | To 22 | View Replies]

To: A.Hun
What a crock.

The trust fund is worthless. The only thing social security has to back it up is the government's ability to confiscate money in the form of taxes.

26 posted on 01/17/2008 6:47:03 PM PST by evad (.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: microgood

I helped an elderly man load a couple of those big bags of dog food in his pick up at Wal-Mart the other day and he told me I was a nice young man. Made my day and I’ve been feeling frisky ever since.


27 posted on 01/17/2008 6:47:45 PM PST by Graybeard58 ( Remember and pray for SSgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
[ Post Reply | Private Reply | To 21 | View Replies]

To: microgood
oh..ok, I see how it reads now.

You're right of course.

28 posted on 01/17/2008 6:48:12 PM PST by evad (.)
[ Post Reply | Private Reply | To 25 | View Replies]

To: evad
The trust fund is worthless. The only thing social security has to back it up is the government's ability to confiscate money in the form of taxes.

US bonds are the safest investment in the world. Of course they are based on US tax revenue. I don't see your point. The bonds are not worthless.

29 posted on 01/17/2008 6:54:04 PM PST by A.Hun (Common sense is no longer common.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: A.Hun
The trust fund is currently worth about 3 trillion...it is not going bust anytime soon.It is backed by government bonds that the US has never reneged on, and by law, can only invest in those US government bonds.

Here is the situation:

Currently Social Security is running a surplus which Congress is spending every year to help reduce the deficit. But that number is beginning to decline (currently about 300 billion) and will be gone in 2016. Each year it is declining which gives less money to Congress to steal.

In 2016, the Social Security System will go to Congress to make up for the deficits it has after 2016 with the IOUs the Congress have given them. At this point they have enough IOUs to last them to 2040, but Congress has spent all the money. They will either have to raise taxes or cut spending to cover it.

In 2040 the IOUs run out and current taxes will only pay about a percentage of what is needed (about 30%).
30 posted on 01/17/2008 6:55:24 PM PST by microgood
[ Post Reply | Private Reply | To 24 | View Replies]

To: doc1019

Well, Doc, here’s my solution. If you need more taxpayer money, just simply provide your bank account and routing numbers to me, and I’ll help the government collect the money and deposit it for you.


31 posted on 01/17/2008 6:59:17 PM PST by Tolerance Sucks Rocks (I resolve to remember to write "08" on my checks.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: doc1019

Its my thought that the powers that be will successfully eliminate SS. It all part of the cabal that wants to reduce America to a turd world country.


32 posted on 01/17/2008 6:59:56 PM PST by abigkahuna (Step on up folks and see the "Strange Thing" only a thin dollar, babies free)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Graybeard58
Made my day and I’ve been feeling frisky ever since.

I guess we better keep an eye on you for the foreseeable future.
33 posted on 01/17/2008 7:00:41 PM PST by microgood
[ Post Reply | Private Reply | To 27 | View Replies]

To: Gator113

As long as you’re willing to support private accounts, you can have the rest with my compliments.


34 posted on 01/17/2008 7:01:56 PM PST by Tolerance Sucks Rocks (I resolve to remember to write "08" on my checks.)
[ Post Reply | Private Reply | To 13 | View Replies]

To: newbie2008

those under age 50, are slated to receive very low benefits in return for a record amount of payroll taxes

While baby-boomers enjoy the money, some stupid young folks will continue to vote Democrat.


35 posted on 01/17/2008 7:02:30 PM PST by Son House (Protection For Opportunity Seekers And Tax Payers From Congress Spending: Low Tax Rates !!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Tolerance Sucks Rocks

Well, I don’t need “more” taxpayer money, just that which is owed to me from a lifetime of paying into the SS debacle.


36 posted on 01/17/2008 7:03:29 PM PST by doc1019 (Rabbit and the Hare Fred 08)
[ Post Reply | Private Reply | To 31 | View Replies]

To: newbie2008
What's scary to me is that any fix attempted will invariably be a convoluted mess. I've been fortunate enough to be in industries that aren't in social security practically all of my working life.
37 posted on 01/17/2008 7:03:32 PM PST by Richard Kimball
[ Post Reply | Private Reply | To 1 | View Replies]

To: A.Hun
The trust fund is worthless. The only thing social security has to back it up is the government's ability to confiscate money in the form of taxes.

US bonds are the safest investment in the world. Of course they are based on US tax revenue. I don't see your point. The bonds are not worthless.

What post #30 said...but let me also offer an analogy.

Suppose you have $1,000 and you put it in a "lock box".
Then suppose you take $100 out and put an IOU to yourself for $100.

Question: How much money do you have?

That's exactly what these bonds are. The government has slipped a piece of paper (bonds) into an accounting ledger and spent the "real money". They have promised to redeem their own debt with their own IOU.

Question #2: How do you think they will do that?

38 posted on 01/17/2008 7:04:17 PM PST by evad (.)
[ Post Reply | Private Reply | To 29 | View Replies]

To: qam1

"I'm old. Gimme, Gimme, Gimme..."

 


39 posted on 01/17/2008 7:04:57 PM PST by Incorrigible (If I lead, follow me; If I pause, push me; If I retreat, kill me.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: newbie2008

So you’re telling me not to count on Social Security when I turn 65?

:-)


40 posted on 01/17/2008 7:06:11 PM PST by writer33 (The U.S. Constitution defines a conservative and Rush Limbaugh knows it.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: doc1019

Which I was forced to do, by the way.


41 posted on 01/17/2008 7:06:33 PM PST by doc1019 (Rabbit and the Hare Fred 08)
[ Post Reply | Private Reply | To 36 | View Replies]

To: writer33
So you’re telling me not to count on Social Security when I turn 65? :-)

Look at the bright side...yer young with plenty of time to build your own private retirement account.

42 posted on 01/17/2008 7:08:42 PM PST by evad (.)
[ Post Reply | Private Reply | To 40 | View Replies]

To: Doc Savage

it’s up to government to STOP SPENDING!

Republicans don’t, Democrats won’t. It’s up to citizens to vote in lower tax rates to protect us from excessive spending.


43 posted on 01/17/2008 7:09:04 PM PST by Son House (Protection For Opportunity Seekers And Tax Payers From Congress Spending: Low Tax Rates !!!)
[ Post Reply | Private Reply | To 10 | View Replies]

To: microgood

Pretty accurate summation, but it means that no one is gonna do anything until about 2025 when the shortfall begins hurting.

If we can maintain our growth of 2 to 3% GDP annually, the US can afford to make up the shortfall for a long time.

I’m not suggesting there is no problem with SS, just that there is no point in worrying about it now.

I believe you would enjoy this website, I check his figures regularly and he is usually spot on.

http://optimist123.com/


44 posted on 01/17/2008 7:15:31 PM PST by A.Hun (Common sense is no longer common.)
[ Post Reply | Private Reply | To 30 | View Replies]

To: evad
Look at the bright side...yer young with plenty of time to build your own private retirement account.

But I want the American people to support me. :-)

And I am building a private retirement account with a lot better return than I would've received from Social Security.

45 posted on 01/17/2008 7:18:48 PM PST by writer33 (The U.S. Constitution defines a conservative and Rush Limbaugh knows it.)
[ Post Reply | Private Reply | To 42 | View Replies]

To: Gator113
":Just wait until there is a democrat in the White House...then this problem will be completely resolved, right?"

Yes. Just ask John Edwards. The solution is to make the "rich" pay more for OTHER people's retirements.

46 posted on 01/17/2008 7:18:54 PM PST by boop (Democracy is the theory that the people get the government they deserve, good and hard.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: evad

Sorry, but that is just not a good analysis. The reason for the government borrowing from the trust fund is to give the trust fund interest income, not to just steal it. It was designed that way.

Without this mechanism, the trust fund would lose value every year. In a way you are right though. It really just amounts to bookkeeping

Check out the link at post 44.


47 posted on 01/17/2008 7:21:55 PM PST by A.Hun (Common sense is no longer common.)
[ Post Reply | Private Reply | To 38 | View Replies]

To: newbie2008

If the damn hippies and feminists baby boomers hadn’t murdered 1/3 of my Generation ( born in 1973) and those in the 80’s and 90’s we wouldn’t be having these problems.

Elect Ron Paul. He at least is the only candidate that wants to allow people to opt-out of the marxist social security system.


48 posted on 01/17/2008 7:24:39 PM PST by Chewbacca (Vote Ron Paul for President in 2008!!!!!! The best man for the job!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: A.Hun
The reason for the government borrowing from the trust fund is to give the trust fund interest income, not to just steal it. It was designed that way.

LOL..wow.

Hard for me to argue with that type of reasoning.

Bye the way, why is it not a good analysis? I think it's a perfect analysis.

The government has no real money and generates nothing other than what it confiscates from it's citizens.

49 posted on 01/17/2008 7:27:43 PM PST by evad (.)
[ Post Reply | Private Reply | To 47 | View Replies]

To: Gator113

You remind me of my Father, our latest correspondence;

> Dad,
> > My Charter Service is not working, please advance my inheritance so you
> > don’t have to retire to a nursing home. Son
> >
> > P.S. It is now working after a complete shut down of everything, I will
> > still need the inheritance.
> >
DEAR SON.
CHARTER HAS BEEN SLOW AT TIMES BUT IS NOW RUNNING OK.
I AM ALSO WAITING FOR MY INHERITANCE.
I WILL BE KICKING AND SCREAMING ALL THE WAY TO THE HOME.
THEN I WILL TRY TO ESCAPE. HAVE A NICE DAY.
YOUR FRUGAL “DAD”


50 posted on 01/17/2008 7:30:25 PM PST by Son House (Protection For Opportunity Seekers And Tax Payers From Congress Spending: Low Tax Rates !!!)
[ Post Reply | Private Reply | To 13 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-73 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson