Skip to comments.Social Security Now Officially in the Red
Posted on 10/30/2011 4:58:03 AM PDT by Stajack
Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nations budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require an additional $105 billion. If the payroll tax break is expanded next year, as President Obama has proposed, Social Security will need an extra $267 billion to pay promised benefits.
(Excerpt) Read more at washingtonpost.com ...
I tell you the solution this problem is a TAX ON DEMOCRATS ~ just them. They would all pay the tax computed on their gross wealth and gross income combined for a 10 year period. Sure, this might result in some forced sales (bankruptcies) but who cares ~ we don't!
Just posted a article on this topic:) under front page news
the GOP was more than willing to go along.
Kick that can extra, extra hard nobama. What the hell, no skin off your nose.
Next up... your 401k’s will be needed to fund SS.
Wait and see.
Payroll tax cut is absurd if you do not cut equal amount of promised benes to recipients.
LOL. I have asserted here that if taxing a behavior reduces such behavior, then let us just tax liberalism!
This will be offset, significantly, by the large number of retirees dying earlier then expected due to Obamacare and the lack of proper medical care and services.
No matter how it adds up it will be via tyrannical methods that we are FORCED to give up everything that most of us have worked for all of our lives...freedom to retire and lament on the past and the labor that got us there.
Those idiots in Washington are like drug addicts feeding on more and more for the same high to the point that they will steal and kill to get their fix.
What these fools don't realize is that there is NO Social Security Fund! That is a myth that liberals keep touting! The money that people are receiving from Social Security comes from the General Treasury, there isn't a Fort Knox full of Social Security money!!!
But what else would you expect from democrats? Remember we just like to starve granny, force granny to eat cat food, and throw them down stairs...
If you are an AARP member take your card and burn it, the discounts aren't worth supporting a leftist organization full of Obama worshipers.
America is quickly going the way of Greece... Lazy bums who refuse to work, this #OWS is mimicking what occurred in Greece to start off their economic collapse. Lazy bums who just want to complain and demand they are owed a living.
I'm 28 and know that there will be no SS for me. That is why I invest my money. The future is not guaranteed. Unfortunately, this is not taught at the high school level nor at many colleges. The most education I received regarding investing came in Graduate School as one of my professors was a part time investment adviser who told us how we would look back at now (then it was 2008 when the Dow was around 7000) and regret not investing. I bought some stocks and even though I still believe we are in a Depression, those stocks rose dramatically and I literally doubled my money in the stock market.
It wasn't that hard but when you have bums who think that there will always be a gravy train, nothing will change their minds. They think the world is a "Robin Hood" world, and think Uncle Sam will bail them out. How wrong they are.
I'm already seeing them.
Wait just a minute. The politicians have been saying this point wouldn’t be reached for decades.
It it possible that they were lying?
SS started out in the red. I really don’t think it was ever self-sustaining.
Someone please correct me if I’m wrong.
not a fan of SS...this should have been privatized decades ago...but I have reached that age and paid for it all my life and expect to have it....
that being said....if it was kept a separate fund from the general...as it was designed...there would be enough money in it...though not a tremendous amount..it would still be in the black.
No I meant more ads, they’ve been absolutely swamping Fox News with scare ads about “MY BENEFITS!!!” They are even getting more ad time than good ole’ Doug with mesothelioma....
I seem to recall SS already being in the red even before this year’s “payroll tax holiday”.
Since the “Social Security Trust Fund” has long been spent, and in order for the Social Security Administration to redeem one dollar in its bonds the Treasury Department must sell one dollar of bonds elsewhere, the Social Security Trust Fund should be recognized as the accounting fiction it is and declared Null and Void.
From now on, Social Security payouts should be funded solely by FICA tax revenues.
This requires, of course, some combination of increasing the retirement age and means-testing all recipients, at a minimum.
Raising the retirement age, of course, worsens the unemployment problem.
I’ve been saying for some time that “much unpleasantness lies ahead, no matter what anyone does”.
Many on this site are still in self delusion over our problems.
but...but....you forgot the four freedoms....
Freedom of speech and expression (yes that is in the Constitution)
Freedom of worship (yes that is in the Constitution)
Freedom from want (???? WHAT?...thats communism)
Freedom from fear (????? fear...fear of what...the landlord, the credit card companies...thats communism too..)
OK...piss on him
You may be right. But whether it's raiding 401's or something else, I agree that now that the politicians have procrastinated until the system is actually in crisis, their medicine will taste nasty.
Someone please correct me if Im wrong.
You are absolutely correct. There is no such thing as a "Social Security Fund". Like I said I used the analogy of picture Fort Knox, now picture that filled up with all the money for Social Security, that doesn't exist.
All of the money paid to Social Security recipients comes out of the General Treasury, it is no different than funding the military, paying government salaries, ect...
It is con groups like AARP that are trying to brainwash Seniors that there is some mythical Fort Knox filled with funds that are labeled "The Social Security Fund" all of which is only to be spent on Social Security. Complete con.
Think of a simple x / y graph. At a certain point the money going in towards social security by those working and money being paid out has hit the point where more money is paid out than coming into the Treasury. I don't know how to do graphics but I think this little explanation should sum it up for those not familiar with how Social Security works.
Sardonic wit noted ;-)
Wise planning. I would hope for best, but plan for the worst. By the time your ready to retire who knows. The best case scenario might be an age of 75 before one is eligible to start collecting. If you want to retire at 65 or before, you'll need to live off of investments...
Good point. You're technically right, the building in West Virginia that's supposed to hold the SS Trust Funds was raided years ago, but the projections were that costs wouldn't exceed revenues until 2032. Seems we're there already.
Social Security operated "in the black", continuously I believe, from its creation until recently. Otherwise it wouldn't have a $4 trillion "Trust Fund".
That does not mean it was not doomed to fail from the beginning.
Ida Mae Fuller, the first Social Security recipient, paid roughly $24 in FICA taxes from the beginning of the program until her retirement, and then collected roughly $22000 in benefits. A 100000% return on her investment. Ponzi schemes are generally good deals for those who get in early.
There is, in fact, a "Fort Knox" filled with funds that are labeled "The Social Security Fund" all of which is only to be spent on Social Security. It's somewhere in West Virginia.
The problem is that the trust fund has long been spent and for every bond the Social Security Administration redeems in order to pay Social Security benefits in excess of FICA revenue the Treasury Department must sell another bond of equal value.
As such, the Trust Fund is an accounting fiction and should be declared Null and Void, making Social Security a pay-as-you-go program, to be phased out completely over the next 40 years.
I belonged to AARP for about fifteen minutes when I turned fifty. That’s how long it took for me to realize that NO, I AM NOT IMAGINING THINGS, THEY HAVE NOTHING TO OFFER ME FOR MY MONEY!!! It took me a while to stop wondering why anyone joins, the dues were about eight dollars a year then which is not worth worrying about but I couldn’t see where they offered anything worth even eight cents.
Not true for SS Disability.
The work requirement is waived for applicants who can prove that they became disabled at or before the age of 22, as these individuals may be allowed to collect on their parent's or parents' work credits. The parent(s) experience no loss of benefits.
How would you do that? Have the Mint print up a bunch of $1,000,000 bills and store them in Ft. Knox?
I hope competition for greeter jobs a Wal*Mart doesn’t heat up too much in the next 5-10 years.
And what did no COLA for 2 years put into the system. My rent went up. Food went up. Gas went up....but no cola. It really hurt.
The projections did not allow for a depression.
What really set me off about AARP in particular was an article they had in their magazine. It was an interview with notorious anti-American hack Harry Belafonte. This guy literally despises the country.
I do admit that the AARP scare ads are humorous, it is typical lefty tactics of trying to scare granny.
There is a limit to how much the retirement age could be raised on those that actually work for a living. I doubt it could be raised at all for those workers.
There are only so many walmart greeter jobs.
It depends on what they did with the separate fund.
As currently implemented, the "trust fund" was essentially invested in US Treasury bonds. They aren't marketable bonds, but they are bonds: they really do exist in a file cabinet in some government office.
If the "trust fund" had been kept separate and just invested in real US Treasury bonds, the outcome would have been the same: the return on investment would have been very similar, and would have to be redeemed with current tax revenues.
The only way that the "trust fund" would have done any better is to invest it in something OTHER than US government bonds, that have historically yielded a better return. Of course, there have been multiple opportunities to do better, but also many to do worse.
And frankly, I think that if the Social Security administration had invested it in something else, they would have screwed it up. It would have Solyendra multiplied by thousands.
Congress would have never let competent investment managers choose assets wisely, based on yield, risk, etc. They would have been constantly interfering: you have to invest in this boondoggle, you can't invest in this politically-incorrect industry. The results would likely have been worse than it is now.
The real problem with Social Security is demographics and policy. If benefit payments had been tied to sound actuarial projections, it would be in much better shape. But, between the unsupportable cost-of-living increases and the unfunded disability benefits, Social Security has turned into a mess.
Did you have to mention that guy? I actually used to like his music fifty years ago when I was too young to know what a disgusting person he is.
How about freedom from fear of Obama and his henchmen and all his pomps and all his works? Now, that would be a guarantee worth having!
Do you have a source for this because I honestly never heard of this. I understand why FDR created the program. During the Depression society was much different. The elderly had to pretty much fend for themselves or live with a relative. And life expectancy was considerably lower than it is today.
However, everything I have heard about all the projects under the New Deal was that the money for the various programs like FERA, PWA, CCC, TVA, CWA, ect... all came out of the General Treasury. There was not a New Deal Treasury, there has always been the National Treasury to fund these programs.
Just as Barry's failed stimulus came from the Treasury. They don't just make separate funds. It all comes from one source.
I am curious as to your statement about the SS Vault in West Virginia as I never heard that and I've studied the New Deal in great depth, far more reading than I ever wished I would have to endure.
No argument here. The first social security recipient, Ida May Fuller paid a grand total of $22.54 into Social Security between 1937 and 1939. When she died in 1975 at age 101, she had received $22,888.92 in SS benefits. So by that criteria, Social Security did in fact start out in the red. But in terms of current projections, SS costs weren't projected to exceed revenues until 2032. SS Trustees are now reporting that this projection was off by 21 years.
Yeah, but they DID make nice Norman Rockwell Paintings, even if they were just slogans and platitudes! LOL!
That’s why I said that raising the retirement age makes the unemployment problem worse.
No matter what anyone does, much unpleasantness lies ahead.
The law requires the difference be made up out of the General Revenues, in other words, money borrowed from China. It was still a stupid idea, just for different reasons. It actually is a redistribution scheme, since the SS Payroll tax is distinctly regressive, Warren Buffet's Secretary actually does pay at a much higher rate than the Oracle of Omaha, the money is mostly coming from the top income people.
This is an anathema to a lot of liberals, because it gives the game away, Social Security has now officially become a redistribution scheme, not an insurance scheme. I have a defined benefits retirement program with my company and a 401k. If I retire today and took a second job elsewhere, they would still be on the hook for 100% of my retirement pay and my 401k and outside income would have no effect, whatsoever. If I retire next year and take early retirement form Social Security, I lose at least one dollar for every two dollars I make working! For someone like me, the actuarial value of my SS benefits is very much smaller, like 50% of my and my employers "contributions".
To top it off, when they "needs test" Social Security (which will happen), folks like me who were frugal, saved, worked for lower pay at jobs with pension plans and retire later will get a further screwing.
Well the good thing with that interview with the old communist hack is that it opened the eyes of many conservatives who decided to rip up their AARP cards.
However, as a younger person at 28 the commercials to scare granny really anger me. They are nothing more than Barry 2012 campaign ads. Notice how they focus on the word "benefits", when they should be saying "entitlements". Medicare, Medicaid and Social Security is the new mantra instead of Medicare, Medicaid and the Environment. Sorry Algore, saving Barry's Presidency seems to be more important for the AARP.
I agree. Shut them down. Of course you won't hear this coming from anyone running for President right now. That would be like political suicide.
That is why instead of sitting in a park in Chicago and complaining like the little rats from #OWS I choose to invest my money, put money away so that I have my own security blanket. The rats in the various parks defecating on police cars are screwed, because they expect that the Government owes them a living, when they are too damn lazy to get a job.
Instead of Occupying Wall Street the morons should protest the Democrat politicians who are blocking any spending cuts for handouts to lazy bums.
I just got done watching the documentary "The West" by Ken Burns. And one thing stood out to me comparing this generation of louts to the pioneers. The pioneers went West with nothing, they didn't get a fat check from Uncle Sam, they worked, many died working, but even if they lived in sod houses, they took pride in their work.
The bums in the parks protesting have no pride, only greed.