In GOP war on Social Security, only Trump gets it

MySanAntonio ^ | Aug 18 2015 | Paul Krugman

[RFEngineer]

” collecting the annuities”

It is not an annuity. It’s an entitlement - in other words and hand into someone else’s wallet who actually did the work to earn the money.

” us deluded conservatives who paid 50 years into a government forced savings plan “

It was a tax. It was not, and is not a “savings plan”.

You are taking someone else’s money - at least be honest with yourself when you are taking it.

I’m not telling you not to take it. Of course you (and half of all Americans) are going to take the money. That’s easy. Whether you consider yourself “conservative” or not - you’ll take it just like everyone else.

It’s much harder to be honest about who’s money it actually is.

I understand that, and I expect you to be angry about it.

Still, you should be honest about it.

[silverleaf]

After I take my money from 50 years of deductions, calculated at what interest I Would have earned if the government let me save and invest it, then I will be taking someone else’s’ money - realistically that’s about 10’years from now if I live that long

Yeah, I am entitled to that because the government made a contract with me, just like an insurance company - which also pays benefits with OPM ( (you don’t have or intend to ever collect on insurance, right? Because you’ll be taking other peoples’ money)

You might not like social security but too bad.

You have the same contract now , which is why you have to pay into the system

but if you hit 66 and don’t want to take the entitlement - don’t

Same with your parents and grandparents if you have any alive
If you are young enough you can go start again in a country that doesn’t collect taxes for old age pensions by whatever name they call it
I read the Caymans is not too tough to move to

[RFEngineer]

“government made a contract with me”

No they didn’t.

” I am entitled to that...”

Which is to say you are entitled to take someone else’s money.

“You might not like social security but too bad.”

It’s not about “like” or “dislike” it’s about being honest about what it is, and where the money comes from

“After I take my money from 50 years of deductions...”

It was a tax, as such you had no (legal) choice but to pay - since you didn’t change the system then, you had to pay. Don’t be surprised if the system changes though, while you are still collecting.

“but if you hit 66 and don’t want to take the entitlement - don’t”

I’m sure that decision will be made for everyone without any action on their part.

[NTHockey]

I’ll double check his financial data he’s required to submit; it’ll be there.

[Henry Hnyellar]

Yes.

https://www.opm.gov/retirement-services/fers-information/

[kabar]

This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.

If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.

[kabar]

While policymakers obsess about the income tax, they often lose sight of an important detail: For two-thirds of households, the levy that matters most is the payroll tax.

According to a new report by the Joint Committee on Taxation, the 80 million tax filers making $40,000 or less will collectively pay no federal income tax and many will even receive cash payments from the IRS in 2015. But they will pay $121 billion in Social Security and Medicare payroll taxes (including the employer share, which most economists believe falls on workers).

Even middle-income households—those making between $40,000 and $75,000—will pay three times as much in payroll tax than federal income tax—nearly $190 billion of the former and just $64 billion of the latter. Over all, three-quarters of these middle-income households will pay more in payroll tax than income tax, according to JCT (see Table A-7 of the report).

In fact, income tax payments don’t begin to exceed payroll taxes until household incomes reach six figures, and only really dominate for those making $200,000 or more.

Still, the design of the income tax very much matters to those low- and middle-income households. Thanks to personal exemptions and the standard deduction, many households making less than $40,000 can zero out their federal income tax liability. Refundable credits, such as the Earned Income Tax Credit and the Child Tax Credit, make it possible for many middle-income families with children to receive income support through the revenue code. If Congress revises the rules, the income tax liability of those households could change significantly.

[Grams A]

The bureaucracy is worse than the mob.”

Great comment. Agree wholeheartedly. We must have term limits. Also IMO we need rules which are enforced which do not permit going from one government related position to another without serving a period of time as an employee in a for-profit organization which is subject to all the rules and regulations enacted by the government. But unfortunately I don’t think either will happen. The worlds the geese and the ganders live in are totally disconnected.

[kabar]

Yeah, I am entitled to that because the government made a contract with me, just like an insurance company - which also pays benefits with OPM ( (you don’t have or intend to ever collect on insurance, right? Because you’ll be taking other peoples’ money)

Wrong. SCOTUS decided otherwise in Flemming vs. Nestor

The Court ruled that no such contract exists, and that there is no contractual right to receive Social Security payments. Payments due under Social Security are not “property” rights and are not protected by the Takings Clause of the Fifth Amendment. The interest of a beneficiary of Social Security is protected only by the Due Process Clause.

Under Due Process Clause analysis, government action is valid unless it is patently arbitrary and utterly lacking in rational justification.

When I first paid into SS, the retirement age for full benefits was 65. In 1983 Congress changed it to 67 and it was signed by Ronald Reagan. Your SS contributions don't belong to you. The government can change the rules any time it wants.

[silverleaf]

There is this concept of a “ social contract” which yes, does not meet the legal standards of a business contract

Once the government breaches such a visible ( and for millions, life sustaining ) social contract as social security, then the government risks losing any remaining credibility in any future programs, leaving only coercion to control people and take their wealth

I don’t believe they are quite ready to go there, although preparations seem to be underway

The slow drip drip drip of a breach was set in place a long time ago.when SS collected funds were made accessible to be frittered in general spending and replaced by IOU’s .... As long as the federal reserve printing presses stayed going, nobody noticed or cared

As long as it was just taking a few more percentage in tax, pulling more people into mandatory “ contribution” like the military, raising the base income subject to the tax, raising the full retirement age by a few years... It stayed under the radar except for those directly impacted

There has to be “someone” now calculating how many seniors are expendable and how to make the working sheep see them as leeches and a burden on society so there is no objection , in fact popular support for dehumanizing yet another class of Americans

[Reily]

And those who were retired and receiving social security while you were working took your money and lived on it.
You have to remember it was set up purposely so the working generation pays for the upkeep of the retired generation. It only sort of works if you have more people putting in then taking out and working demographics & age of mortality reflect the 1930s. Guess what they don't and the truth is it never could! Insurance executives at the time warned Congress that it could never work in the long term. (They were evil business people! So boo hiss! Don't listen ! They like profit! /sarcasm) The system was cynically created to permanently create a dependent class beholden to those working and the government meaning “elected or appointed” democrats. The “current group working” will also more or less vote democrat in order to not starve grandma & grandpa.
So yes you paid into it but it immediately went out the door, you do have the USG IOUs that the new “working generation” can be persuaded by Rat politicians to keep the Ponzi scheme going.

[RFEngineer]

“If the notion that Medicare recipients are simply “getting back what they paid in” is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.”

You get nothing but agreement from me. If conservatives are consistent, then they have to acknowledge that they aren’t conservatives when it comes to big government programs like SS and Medicare.

They continue to exist because people like getting stuff from government.

The effort to convince “conservatives” on this board that they should at least be honest about where the money comes from is probably humanly impossible.

So we roll on until we can’t roll no more.....

[RFEngineer]

“....then the government risks losing any remaining credibility in any future programs”

“The Government” doesn’t have the money for the present programs it pays for using as yet uncollected future funds.

So I wouldn’t worry too much about “government credibility” for future programs - it’s already gone, along with any money that may have been available to pay for “future programs”.

“dehumanizing yet another class of Americans”

You mean like how the present programs dehumanize present and future (even unborn) taxpayers.

The RIGHT thing to do would be to acknowledge this fact and fix it today. We won’t do that, as we both know.

Which generation would you like to die as a result of a failing social security and medicare system? Yours or someone elses?

You may think you have the moral high ground, but you do not - you don’t care who dies in the future (when the program fails) as long as it is not you. Do I have that about right, or would you care to modify my interpretation of what you seem to be saying?

[Tau Food]

Medicare, Medicaid, Obamacare, Unemployment Insurance, Welfare, Food Stamps and Social Security have nothing to do with contracts. They're just different forms of socialism. Just about everyone is on the dole now. We should oppose all of it, but the politicians have learned how to manipulate each voter into opposing just the types of benefits that he/she doesn't receive.

That way, each voter can pretend that he/she isn't on the dole.

[silverleaf]

Attacking me as immoral ends the discussion

[RFEngineer]

“Attacking me as immoral ends the discussion”

Staring your own argument in the face SHOULD end the discussion

[GOPJ]

Easiest thing to do is stop any and all payments to illegals, foreign counties and paychecks to congress people who were in on the fraud...

Really, the above should help with any SS shortfall... If that's not enough we can start telling Europe, Japan and Germany to kick in some money for their defense or defend themselves.

If we're not total chumps we should be able to meet our obligations to US citizens. Well, if our US congress people don't sell the country for pennies on the dollar to their benefactors...

[Tau Food]

Which generation would you like to die

I'm against all of these programs, but no generation is going to die. The rules will just change.

[kabar]

There is this concept of a “ social contract” which yes, does not meet the legal standards of a business contract

Once the government breaches such a visible ( and for millions, life sustaining ) social contract as social security, then the government risks losing any remaining credibility in any future programs, leaving only coercion to control people and take their wealth

I don’t believe they are quite ready to go there, although preparations seem to be underway

There is one slight problem. These programs will bankrupt us if we don't reform them, i.e., cut benefits or raise taxes or both. Some time ago, Mark Steyn wrote an article essentially saying that Americans want all the benefits of the European-style welfare state, but they are unwilling to pay for them.

The slow drip drip drip of a breach was set in place a long time ago.when SS collected funds were made accessible to be frittered in general spending and replaced by IOU’s .... As long as the federal reserve printing presses stayed going, nobody noticed or cared

The revenue from SS was always immediately converted into T-bills and held in the SSTF. The SSTF is included in the $18.5 trillion national debt and held under "intragovernmental holdings." These T-bills are backed by the full faith and credit of the USG just like the T-bills held by China and Japan.

SS is not going broke because the federal government put the money into "IOUs." The SS "surplus" could have been put into a lock box and we would have the same problem of SS running out of money (the ability to pay full benefits) by 2034. The retirement of the baby boomers and benefits not being linked to revenue is the problem. SS has been running in the red since 2010 and will continue to do so from here on out. The SSTF will be used to make up the shortfall until it runs out of T-bills. The population over 65 will double over the next 20 years with one in five being over 65 by 2030.

Since the US must borrow about 40% of the money it spends, then when SS must redeem T-bills to make up the shortfall, the USG is essentially borrowing money to pay for SS and Medicare, which has been running in the red since 2008.

As long as it was just taking a few more percentage in tax, pulling more people into mandatory “ contribution” like the military, raising the base income subject to the tax, raising the full retirement age by a few years... It stayed under the radar except for those directly impacted

It really hasn't stayed under the radar. The politicians would prefer that the American people remain ignorant of how SS really works. The SS DI Trust Fund will be exhausted next year, 2016. As has been done nine times before, Congress will move money (T-bills) from the SSTF to the SSDI so full benefits can continue to be paid.

There has to be “someone” now calculating how many seniors are expendable and how to make the working sheep see them as leeches and a burden on society so there is no objection , in fact popular support for dehumanizing yet another class of Americans

The longer we wait to reform entitlements, the more painful the solution will be. For the longest time, SS was the third rail of American politics. No one wanted to tell the people the bad news. Now that SS is actually taking money from the General Fund, it has become more of a problem.

Medicare is even worse. And it matters when you consider how to reform Medicare. While the payroll tax does fund some of the senior health program, its share is much lower than the government’s carefully constructed narrative suggests. In reality, more than 40 percent of Medicare is financed through the general fund (which is to say, mostly though income taxes). Payroll taxes support only one-quarter of Medicare Part B and 14 percent of Part D (the drug benefit), by law.

So as the number of Medicare recipients grows with the retirement of the baby boomers, more and more money will be sucked out of the General Fund to pay for Medicare, Parts B and D. Overall, the entitlement programs represent an unfunded liability of $100 trillion or $60 trillion over a 75 year period. This is on top of our growing national debt of $18.5 trillion. The entitlement programs and so called other mandatories like Medicaid and food stamps plus debt servicing costs make up two thirds of the budget. And they are on automatic pilot. The percentage will increase absent reform.

We are in deep trouble. SS is just one of the symptoms. I blame the voters most of all. Our elected representatives are doing what the people want when it comes to entitlements. Anyone who sticks his/her head up and talks about needed reforms, which will necessarily mean a reduction in benefits and/or increase in taxes, is voted out of office.

[Eric Pode of Croydon]

It's still MY money dimwit.

But....it's gone.