Skip to comments.Where's the Leadership on Social Security? (Failure reform this catastrophic program is bipartisan)
Posted on 09/22/2012 8:01:33 AM PDT by SeekAndFind
In 2010, the Social Security Trustees Report said Social Security would be able to fulfill all current obligations until 2036. In 2011, that estimate was bumped to 2035, and this year it was changed to 2033.
Clearly, the program must be reformed, yet many Washington politicians think like Senate Majority Leader Harry Reid (D-NV), who said in January 2011 that "Social Security is a program that works and is fully funded for the next 40 years" and that "the arithmetic on Social Security works."
Any politician who thinks Social Security "works" for the American people is either dishonest or not paying attention to the facts. This was starkly outlined recently by Charles Blahous, a trustee for Medicare and Social Security. In a paper published through George Mason University's Mercatus Center, Blahous explained the bleak situation Social Security finds itself in. From the paper:
"Social Security's future, at least in the form it has existed dating back to FDR, is now greatly imperiled. The last few years of legislative neglect ... have drastically harmed the program's future financial prospects. Individuals now planning their financial futures ... should be pricing in a substantial risk that the federal government will not be able to maintain Social Security as a self-financing, stand-alone program over the long term. If Social Security financing corrections are not enacted in 2013, or at the very latest by 2015, it becomes fairly likely that they will not be enacted at all."
"Had across-the-board price-indexing been enacted in 2005, it could have kept Social Security fully solvent, left those over 55 untouched, and generated additional funds to provide for faster benefit growth on the low-income end. Enacted last year, however, such across-the-board price-indexing would no longer be enough;
(Excerpt) Read more at americanthinker.com ...
Bush tried, Democrats lied.
We better start speaking out quickly.I just came from Miami and the radio spots up there are accusing Romney/Ryan of changing SS to an insurance policy that will cost Sr’s $6,000 per year.They are lying their asses off while we do little.
By the way SEIU was paying for the spot.
Legislative neglect gone wild.
Two things have damaged SS and neither party did anything to change them.
1] Inflation - Current earnings are 20X [$2500 annual to $50000] when I started so SS can’t keep up. At this inflation rate people will be getting 20x today’s $50000 or $1,000,000 per year so people will back ‘get their old money’ which won’t cope with the then current. This looks like a ‘handout’ but it wouldn’t be necessary if there was no inflation. So cut out inflation.
2] SS was designed for working Americans to support retired Americans. Estimates have ranged to 20 for the number of workers for each retiree. Let’s assume 10. Well there are still 10 only 7 are in other countries. Neither they nor their employers are paying in to SS. So SS is running out of money. So bring the jobs home paying back into the SS system.
In 1950, there were 16 workers paying taxes into the system for every retiree who was taking benefits out of it. Today, there are a little more than three. By the time the baby boomers retire, there will be just two workers who will have to pay all the taxes to support every one retiree.
Fewer workers for more retirees mean each worker bears an increasing financial burden to pay the benefits that Social Security has promised. The original Social Security tax was just 2 percent on the first $3,000 that a worker earned, a maximum tax of $60 per year. By 1960, payroll taxes had risen to 6 percent. Today’s workers pay a payroll tax of 12.4 percent.
It is going to get much worse. In order to continuing funding retiree benefits, the payroll tax will have to be raised to more than 18 percent. That’s nearly a 50 percent increase.
Let’s look at that financial burden another way. The Social Security payroll tax is already 12.4 percent of wages, or one eighth of a worker’s total annual wages. It is the biggest tax the average household must pay. Roughly 80 percent of American families pay more in Social Security taxes than they do in federal income taxes.
Despite that already huge tax burden, the payroll tax will have to be increased by nearly half in order to continue paying Social Security benefits. That’s a terrible burden to impose on our children and grandchildren.
The only way out of this problem is to change Social Security from a pay-as-you-go model to a system based on savings and investment...
That article was written 7 years ago (When the economy was booming and unemployment was at or below 5%). Things have gotten much worse since.
The article [7 years ago] did not take into consideration that most of the products you buy are not made here. They are made in other lands and they do not pay into the SS system nor do their employers. This is a shortfall that used to be provided by workers and employers when the products were made here. Put a SS tax on imported products and restore the SS which is being robbed.