Posted on 03/25/2008 2:00:57 PM PDT by Menelaus
NEW YORK (CNNMoney.com) -- Treasury Secretary Henry Paulson, saying that Social Security is "financially unsustainable," called Tuesday for quick action to keep the system strong and released a report detailing the program's funding shortfalls.
The federal government will have to start paying back what it owes the Social Security trust fund in 2017 so the program can continue paying 100% of benefits. By 2041, if the system is left unchanged, Social Security will only be able to pay out 78% of benefits promised to future retirees.
Those are two key estimates in the Social Security and Medicare trustees' 2008 annual report.
Shoring up Social Security is one of the main economic issues that will face the next president. Most proposals involve raising taxes or reducing benefits. Democrats typically have opposed benefit reductions while Republicans have opposed tax increases.
"This year's Social Security Report again demonstrates that the Social Security program is financially unsustainable and requires reform," Paulson said at a briefing. "The sooner we take action ... the less drastic needed changes will be."
(Excerpt) Read more at money.cnn.com ...
I'd like to make the government a deal: I'm young. I've paid some--but not a lot--of money into social security. You can have it. Use it to bail yourself out. But only on the condition that you stop this absurdly unsustainable program that is just getting worse and worse every year.
I say we adopt a dearly held and beloved democrat/liberal tradition, and abort the deficit.
How stable will it be if we start paying SS benefits to millions of Mexican illegal aliens and their families back home in Mexico under the terms of Bush's Social Security Totalization Agreement with Mexico?
Ok, in 2017 we raise taxes. Raising them now ( implicitly recommend in all these stories) is more than useless.
This proves that the government especially the liberals cannot control themselves. They now want another nightmare money pit, national healthcare. We already can see the mismanagement and sloppy unaccountablity with social security, medicaid and medicare. This money is handed out to everyone and anyone who can hire a sleaze lawyer to prove they are eligible. These political morons can’t even balance thier own personal check book and we are allowing them to manage more of our money. I agree! fix it where the ones who put in are comfortable with the plans you have to safe gaurd and protect and not squander and hand it out like candy, or let us out of it! This is another form of welfare for the unmotavatable lemmings the socialist democrates have on their hook.
Neither economic nor an issue that concerns the Pres.
NOTHING is promised. They can change terms and eligibility requirements by voice vote. Your SS payments are a TAX, nothing more.
President Bush wanted to do something that was very positive fix for SS, he was shot down by the Democrats in congress.
I don't expect this to happen so some kind of revolt is invertible.
The so-called SS "surplus" starts declining next year, which means less revenue coming into the general fund.
You get it. Any increase in SS tax at this point is only a general tax increase to pay for current spending.
Past IOU’s will be paid back from the general fund by raising income taxes as more retirees put a demand on SS funds.
SS is unsound as currently structured. This Ponzi scheme can't be saved by increased taxes. In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2. By 2030, there will be 70 million Americans of retirement age--twice as many as today.
If the current rates are maintained, but the cap on income subject to social security is removed, the projected "break even" year moves from 2018 to 2024. Whoopee. The inevitable is delayed a whole 6 years. Of course the projections might be wrong. The amount of social security collections each pay period might drop much faster than projected as very high income earners retire. The high income earners fund the bulk of social security receipts, yet are a minority of the taxpayers. Once again the nasty consequences of relying on a "progressive" tax structure make the whole thing a flimsy house of cards.
Removing the cap will have another nasty impact on the economy. The high income earners (myself included) have extra disposable income to spend in the economy toward the end of the year after the cap is reached. Remove the cap and that extra disposable income goes away. The extra economic stimulus that is represented by that money is much more than the paltry little checks that will be mailed out soon. It will have a devastating impact on end of year sales figures.
$5000 a pack cigarette tax and all will be fixed.
I disgree with your general statement here. I contend that there are probably 12-16 workers "paying Social Security taxes for every retired person receiving benefits" today, too. It's just that 9-12 of them live in Asia, Africa, and Latin America. Sure, they technically aren't really "paying" Social Security taxes at all -- but they're helping to prop up our aging country by working to produce cheap consumer goods under conditions that no American would have tolerated in the last 100 years.
This is what "free trade" is all about, folks.
The system will long be destroyed by then. It is unsustainable. By 2017 it goes into the red. And then there is Medicare, which is in even worse shape. Social Security pays more than $475 billion in benefits each year. If nothing is done, by 2060, the combination of Social Security and Medicare will account for more than 71 percent of the federal budget.
Approximately 17 cents out of every dollar of total tax revenue collected is immediately used merely to pay the burgeoning interest on the Federal debt. This is now surpassing the costs for our entire defense establishment, and it is exceeded only by the revenues needed to fund the total Medicare and Medicaid programs.
The Ponzi scheme was stupid from the beginning, but was made much worse by the corrupt politicians spending the "surplus" that should have been invested for the future..
And what would they have invested it in? The problem is that if the USG had borrowed the money from someone else other than SS, then they would be paying more to service the national debt. We would have been far better off making SS a line item on the Federal budget rather than as a separate system outside the normal budget process. SS benefits are not tied to revenues and go up automatically. It is on automatic pilot. SS should resemble Medicare B.
The only way SS can be "saved" is to privatize most of it leaving a small defined benefit program that could cover disability and survivor benefits.
You obviously don't understand the way SS works. Trying to link it to "globalization" is pure sophistry. SS is a pay as you go system. It is a Ponzi scheme. Those at the top of the pyramid [currently retired or about to retire] have gotten far more out of the system than they paid in. That won't be true for those who follow.
I think it has reached the point where there is no money left after our elected theives stole it all. In their way of logic thinlking the answer is RAISE SS TAXES, presto two problems solved. More money to steal and that will leave a SMALL amount in the kitty.
As was originally intended. SS was envisioned to cover a nominal 5 year survival gap between widows and husbands as originally conceived. It was never supposed to be a government retirement system. The camel got his nose into the socialist tent.
Why, start handing out SS benefits to ILLEGAL ALIENS, of course!
Guh...and he expects me to vote for him. What a dope.
People often forget that there's a reason why slavery was a well-established institution for most of human history.
The two just aren't related. SS would go bust whether we had globalization or not. It is structurally not sustainable. In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.
People often forget that there's a reason why slavery was a well-established institution for most of human history.
Slavery predates our entitlement programs and ended before they were started. We do have a form of slavery, i.e., illegal aliens who are being subsidized by the taxpayer.
Here’s my take. I’m 52 and have paid the max since I was about 25. Any fix will cost me even more $$$$. Let it crash and burn.
"Free trade" with nations that have very low standards of living is what allows someone to pay less for a 12-foot plasma television today than a 12-inch black & white television cost 40 years ago -- which means an American citizen today can afford to enjoy the highest standard of living in the history of mankind even as he is being forced to dedicate an ever-growing portion of his income to taxation for the support of these massive entitlement programs.
It's also what allows the Federal government to restrain the growth of these entitlement programs by engaging in a deliberate under-reporting of inflation rates from one year to the next.
No, they are not related no matter how much you repeat it. In many cases, corporations are increasing their profits and not passing on the "savings" to the consumer. They move their factories offshore to China, India, Indonesia, etc. to reduce production costs, but they sell them at a much higher price in the US to increase their profitability.
The rising costs of the entitlement programs have nothing to do with globalization. Rather, it is related to how the programs are structured. Much of it is on automatic pilot. COLA increases, the annual increase on the SS earnings cap, etc. are not related to costs and revenue, except for Medicare B. And then there is the matter of an aging society and the baby boom cohort that is just starting to draw on the system. To reiterate, the current systems are unsustainable. It has to with structure and demographics.
It's also what allows the Federal government to restrain the growth of these entitlement programs by engaging in a deliberate under-reporting of inflation rates from one year to the next.
The SS tax rate of 12.4% [6.2% each for employee and employer] has not been raised since 1990. Social Security & Medicare Tax Rates. The Medicare tax rate of 2.9% has remained constant since 1986.
The earnings cap for SS has increased annually since 1951. Contribution and benefit bases, 1937-2008. The increases are based on the National Average Wage Index , which is actually going up faster than inflation. The earnings cap in 2000 was $76,200. It is now $102,000.
FYI: Nearly 80% of Americans pay more in Social Security taxes than they do in federal income tax.
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