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How big is Social Security's funding shortfall?
Pioneer Press/AP ^ | 8-12-12 | Little Stevie Ohlemacher

Posted on 08/12/2012 10:08:28 AM PDT by TurboZamboni

WASHINGTON—Social Security's long-term funding shortfall is big by any measure. How big? That depends on how you look at it. Over the next 75 years, after Social Security drains its trust funds, the massive program is scheduled to pay out $134 trillion more in benefits than it will collect in tax revenue, according to agency data.

That's an immense number that could use further explanation. Three ways to look at $134 trillion spread out over 75 years:

— $30.5 trillion in 2012 dollars. We all know that $134 trillion won't buy nearly as much in 2086 as it would today. Social Security's number crunchers project that annual inflation will average 2.8 percent in the long term, after a short period of slightly lower inflation. When the annual shortfalls are discounted for inflation to 2012 dollars, they come to $30.5 trillion.

— $8.6 trillion in present value. This is a financial term that Social Security uses to reflect the time value of money. It means that if Social Security had an additional $8.6 trillion on hand today and invested it in a security that paid returns of 2.9 percent above inflation for 75 years, the program would have enough money to cover the shortfall.

The problem, of course, is that Social Security doesn't have an additional $8.6 trillion on hand to invest.

(Excerpt) Read more at twincities.com ...


TOPICS: Business/Economy; Government; Politics/Elections
KEYWORDS: bankrupt; debt; deficit; socialsecurity
Treasury Secretary Timothy Geithner, speaking on behalf of the Obama White House, to Rep. Paul Ryan: “You are right to say we’re not coming before you today to say ‘we have a definitive solution to that long term problem.’ What we do know is, we don’t like yours.”

http://www.freerepublic.com/focus/f-news/2847964/posts

1 posted on 08/12/2012 10:08:35 AM PDT by TurboZamboni
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To: TurboZamboni
after a short period of slightly lower inflation

Is that the inflation that excludes food & fuel?

Anyway, I'm not so sure the usual models are in play. You've got the crowding-out effects of massive non-SS transfer payments, future employment & wage projections, etc. Add to that the huge percentage of SS payments are not paid to seniors, fraud, etc.

2 posted on 08/12/2012 10:16:13 AM PDT by P.O.E. (Pray for America)
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To: TurboZamboni

The sad thing is that, even here at a conservative web site, there are a lot of people who secretly believe in the Keynesian rubbish that we can just endlessly borrow and print money and that everything will be just fine.


3 posted on 08/12/2012 10:17:50 AM PDT by jpl (The government spent another half a million bucks in the time it just took you to read this tagline.)
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To: jpl

Also, anyone who thinks we can go on for another 75 years like this is living in a delusional fantasy world. Not even close.


4 posted on 08/12/2012 10:21:03 AM PDT by jpl (The government spent another half a million bucks in the time it just took you to read this tagline.)
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To: TurboZamboni

Social Security Disability is taking the place of Welfare in States that want to dump problems on the Federal Government... That’s what going to break Social Security. And it’s what will break Disability for the folks who REALLY are disabled...


5 posted on 08/12/2012 10:25:26 AM PDT by GOPJ (Freeper Neveronmywatch's convinced: Put a compass in the hands of a liberal it'll point south.)
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To: TurboZamboni
First solution is to begin rebating Social Security payments subject to income taxes BACK to the Social Security side of the ledger rather than just stuffing it into the General Accounts to be wasted on GSA parties.
6 posted on 08/12/2012 10:26:33 AM PDT by muawiyah
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To: TurboZamboni

All BULLSHIT, communist scare tactics in a desperate attempt to “scare up” an election victory. Won’t work, commies!!!


7 posted on 08/12/2012 10:27:12 AM PDT by GoldenPup (Comrade "O" has got to GO!!)
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To: GOPJ

Social Security Disability is administered by the Social Security Administration but it’s funded out of General Revenues, not Social Security payments (FICA)


8 posted on 08/12/2012 10:28:22 AM PDT by muawiyah
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To: P.O.E.

Probably make more sense to compute present value in terms of a future governed more by DEFLATION than INFLATION ~ much like today


9 posted on 08/12/2012 10:30:22 AM PDT by muawiyah
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To: TurboZamboni

Reality has been lost with the Democrat party for years. The American voter has been forced into sleep to keep them in power. If you can see reality, you know our freedom is mostly gone with our nations wealth.


10 posted on 08/12/2012 10:31:18 AM PDT by bmwcyle (Corollary - Electing the same person over and over and expecting a different outcome is insanity)
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To: GOPJ

Disability Ranks Outpace New Jobs In Obama Recovery

The disability ranks have outpaced job growth throughout President Obama’s economic recovery. While the economy has created 2.6 million jobs since June 2009, fully 3.1 million workers signed up for disability benefits.

http://news.investors.com/article/617233/201207060945/disability-climbs-faster-than-jobs-under-obama.htm

anyone who has unemployment about to end is now...DISABLED!

see how easy this is?


11 posted on 08/12/2012 10:35:30 AM PDT by TurboZamboni (Looting the future to bribe the present)
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To: TurboZamboni
How big is Social Security's funding shortfall?

Let's look at Social Security in a different light:

Would there be any shortfall at all if:

They weren't giving Social Security to illegal aliens, and

The money paid in had been set aside in a "lockbox" as promised, instead of being used as a slush fund by cooked and irresponsible politicians?

12 posted on 08/12/2012 10:41:46 AM PDT by The Sons of Liberty ("Get that evil, foreign, muslim, usurping bastard out of MY White House!" FUBO GTFO!)
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To: TurboZamboni
"How big is Social Security's funding shortfall... after spending all it's surplusses on welfare?"

Well, like any investment plan whose assets have been looted for consumption- too big!

13 posted on 08/12/2012 10:47:23 AM PDT by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat Party!)
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To: TurboZamboni

And Commiecare™ hasn’t even kicked in yet.


14 posted on 08/12/2012 10:49:33 AM PDT by Libloather (The epitome of civility.)
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To: TurboZamboni
And unlike ‘unemployment; benefits, disability benefits can last for 60 to 70 years. They don't end.

Go down to your local Social Security office - more than half the people waiting to see a clerk are under 30 and look like gang bangers. You, TurboZamboni will be supporting them until they collapse the system... Then they'll move on to the next scam and grandma and the injured army vet will die...

Dems think of that as 'compassion'... Sick. Dems are sicko...

15 posted on 08/12/2012 10:49:33 AM PDT by GOPJ (Freeper Neveronmywatch's convinced: Put a compass in the hands of a liberal it'll point south.)
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To: muawiyah
Comparint the SSA's own press releases from April 2011 and May 2012.

The point at which non-interest income fell below program costs was 2010. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period. (April 2011).

In April 2011 they project fund exhaustion a year earlier than before. In May 2012 they project fund exhaustion 3 years earlier than the 2011 projection

In 2011 they're earning 4.6 percent interestand in 2012 4.4 percent (not sure how this works, given that SS payments are then "loaned" to the general fund), and one wonders what their interest rate projections are going forward.

I mean it's a shell game anyway, but point is I have trouble believing any government projections.

16 posted on 08/12/2012 10:51:01 AM PDT by P.O.E. (Pray for America)
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To: P.O.E.

Comparint s/b comparing
interestand s/b interest and

That’s what I get for posting while watching TV.


17 posted on 08/12/2012 10:56:07 AM PDT by P.O.E. (Pray for America)
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To: P.O.E.
The whole point of doing a present value analysis on something 75 years in the future is to INVENT MONEY ~ that's how Olympia Snowe came on the idea of charging the USPS $5.3 billion a year for 10 years to pay for postal employee medical insurance 75 years in the future!

It became an enormous sum and she and her running dog lackeys in the Senate could then say, with a straight face, that they'd come up with a $50 trillion addition to the US Budget ~ so everything was balanced back to George Washington's time.

This article, to the degree it looks at present value, is garbage unless the readers understand what that means ~ but, like the US Senate where people ought to know, even the people who know are easily tricked and panicked into making rash judgments and stupid decisions.

18 posted on 08/12/2012 11:01:45 AM PDT by muawiyah
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To: TurboZamboni

Obama & Geitner couldn’t think of enough mischief, so they lowered the EMPLOYEE part of FICA payments by 2%.

Let’s do some math:

Say there are 50 million people in the USA working fulltime.

Lets say they are making ONLY $10 an hour.

40 hours a week ..... 52 weeks a year ==2080 hours.

Let’s say they work the whole year & their gross income is $20,800.00

$20,800 times 50 million == $1,040,000,000,000
One Trillion, Forty Billion dollars gross income-—at only $10 an hour.

The 2 % ‘discount’ Barry & Little Timmy handed out for a ‘stimulus’ calculates as such:

2% of the 1 Trillion 40 Billion ==$20,800,000,000.

That is $20 BILLION 800 MILLION in funds which is NOT going into the Social Security fund via payroll deductions.

At ONLY $10 per hour!!!

Since the FICA deduction is taken out until up to a threshhold which is OVER $100,000 in individual earnings, the shortfall of money not deducted is causing serious problems for the USA.

The stimulus of the American economy which was promised by this discount in the FICA deduction never happened-—because the cost of everything, led by gasoline, has continually gone up and up.

Barry & Little Timmy are doing a great job—at destroying America.


19 posted on 08/12/2012 11:12:24 AM PDT by ridesthemiles
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To: TurboZamboni

The way out of the social security morass is to go to a forced defined contribution plan (401K’s) for people under a certain age, say 40, and deduct a small portion of wages to cover a means-tested retirement payment for people who would go without shelter and food without it, much like nursing homes now operate. If you’ve got the money to pay for nursing home care, you pay it yourself; if and when you don’t, the government steps in. That’s humane, but doesn’t give away the store.

Then, in 30 or 40 years, aggregate social security payments would be significantly reduced by the means testing, and most people would have significant 401k’s built up for their retirement. And with only a limited number of people qualifying under the means testing, the pressure to continually pump up benefits would diminish considerably, unless the program became fully funded at which point benefits could be increased and/or the tax funding the means-tested program could be reduced.

At a minimum, anyone entering the workforce today should be put on such a program. Those who’ve paid in for, say, five years already could be offered non-public treasury debt as buyouts from SS, to be placed in their 401K plan. This could be done for everyone up to a specified age, say 40, 45, or even 50. Eventually we’d get to a more stable situation that way.

States are finally realizing that defined-benefit retirement plans lead only to fiscal disaster. The federal government needs to come to the same conclusion, and soon.


20 posted on 08/12/2012 11:24:41 AM PDT by Norseman (Defund the Left-Completely!)
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To: Norseman

and make this mandatory for gubmint employees to replace their current pensions.


21 posted on 08/12/2012 11:39:25 AM PDT by TurboZamboni (Looting the future to bribe the present)
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To: bmwcyle
The American voter has been forced into sleep to keep them in power. If you can see reality, you know our freedom is mostly gone with our nations wealth.

They're living the real Matrix. Give 'em the red pill.

22 posted on 08/12/2012 11:42:20 AM PDT by citizen (America is at an awkward stage...Too late to work within the system, too early to shoot the bastards)
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23 posted on 08/12/2012 11:44:29 AM PDT by RedMDer (https://support.woundedwarriorproject.org/default.aspx?tsid=93destr)
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To: TurboZamboni

>>and make this mandatory for gubmint employees to replace their current pensions.<<

Oh, absolutely! All publicly-financed defined benefit plans should be prohibited by law. Get the government out of the investment business completely.


24 posted on 08/12/2012 11:50:26 AM PDT by Norseman (Defund the Left-Completely!)
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To: TurboZamboni

I stopped reading at “after Social Security drains its trust funds”.

There is no trust fund. It is a fiction. The so called “SS trust fund” is literally a file cabinet in WV (thank you Senator Byrd!) filled with IOUs that aren’t worth spit.

http://madashelland.com/?p=1199


25 posted on 08/12/2012 12:03:37 PM PDT by FreedomPoster (Islam delenda est)
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To: FreedomPoster

I’m with you. As soon as I read the suggestion that there was something in a trust fund somewhere that hadn’t already been spent, I knew the rest was probably bogus as well!!!


26 posted on 08/12/2012 12:16:40 PM PDT by LTC.Ret (You'd think I would know better than to volunteer!!! www.sendmetocongress.us)
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To: TurboZamboni

>>and make this mandatory for gubmint employees to replace their current pensions.<<

Oh, absolutely! All publicly-financed defined benefit plans should be prohibited by law. Get the government out of the investment business completely.


27 posted on 08/12/2012 1:15:33 PM PDT by Norseman (Defund the Left-Completely!)
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To: GOPJ

Here in Arizona they give children health insurance if mom and or dad are unemployed or on welfare or any other reason they use.

The biggest problem is mom/dad get health insurance as well.
Its become a permanent part of life for many. Food stamps, healthcare, side jobs, welfare and SS D.

Try to tell them it may end or hit them hard and tell them they dont deserve it and watch the self righteous fireworks


28 posted on 08/12/2012 1:16:12 PM PDT by winodog
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To: FreedomPoster
There is no trust fund. It is a fiction. The so called “SS trust fund” is literally a file cabinet in WV (thank you Senator Byrd!) filled with IOUs that aren’t worth spit.
There is a Trust Fund; it’s invested in “safe government bonds.” So when the Treasury writes the social security check, it bills the Social Security Trust Fund - and that fund produces a bond which is a valid obligation of the Treasury itself. So instead of taking the money out of the right pocket, Treasury takes it out of the left pocket - but it still comes out of the Treasury either way, same difference.
The SSTF exists, but it is nothing more than a record of money the government doesn’t have.

A lot like “altitude above you, runway behind you, or fuel used” - the "three most useless things" to an aviator.


29 posted on 08/12/2012 7:18:35 PM PDT by conservatism_IS_compassion (The idea around which “liberalism" coheres is that NOTHING actually matters except PR.)
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