Posted on 11/04/2015 7:13:16 AM PST by SeekAndFind
The incorrect assumption is that “Conservatives” don’t want “their” check from the government.
The only actual conservative solution to Social Security is to end it completely. Stop taking it out of paychecks, stop paying out any money.
If some people can’t make it (and there will be a lot of them), then they are wards of the state based on their need.
Anything short of that is nonsense and a lie, including keeping the current system.
I think it would be 3 - 5 years and we'd be solvent again ... even WITH the lack of employment
Please, not this meme again.
Social Security is not "in the general fund". Excess Social Security taxes have been LOANED to the federal government, in the same way you loan money to them if you buy US Treasury Bonds.
That loan (which constitutes about $2.7T) is now being paid back, with interest. If it wasn't being paid back, Social Security benefits would have been reduced in 2010 and later -- because the payroll tax wasn't sufficient to fund benefits.
I think it would be 3 - 5 years and we'd be solvent again ... even WITH the lack of employment
Social Security is in serious trouble. The SSA has been telling you this for at least the past decade, if you had been paying attention. But, since you haven't -- I'll quote this year's report:
https://www.socialsecurity.gov/oact/tr/2015/tr2015.pdf
For the combined OASI and DI Trust Funds to remain solvent throughout the 75-year projection period: (1) revenues would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 2.62 percentage points (from its current level of 12.40 percent to 15.02 percent, a relative increase of 21.1 percent); (2) scheduled benefits during the period would have to be reduced by an amount equivalent to an immediate and permanent reduction of 16.4 percent applied to all current and future beneficiaries, or 19.6 percent if the reductions were applied only to those who become initially eligible for benefits in 2015 or later; or (3) some combination of these approaches would have to be adopted.
These changes would have to be made NOW. If nothing is done, here's what you can expect: around 2034, the Trust Fund will be exhausted. Social Security benefits will be reduced about 21%, BY LAW -- because Social Security can't borrow money.
Government shouldn’t be making disability payments, because there is no incentive for government to turn anyone down. Bureaucrats know that someone above them will just cave and give people what they want, so why bother?
The Social Security disability program is rife with fraud.
Correct me if I'm wrong;
My SS check is backed by present day FICA witholdings from workers
thus;
My check comes from a worker (I know, more than one ... KISS) from his last month's labor
If he contributed to FICA (the SS part) more than what I needed, the fed got to use it ... "general fund"
While this might be the only way to end it completely, it's politically impossible. Everyone alive today has had payroll taxes collected from them for their entire working career, and made it difficult or even impossible for some to invest for retirement on their own.
The truth is that the inter-generational transfer of income was always doomed to fail. Progressives thought the party would never end -- population and wage growth would continue indefinitely and keep the Ponzi scheme alive. But, then reality set in.
It never occurred to them that population growth was largely because parents had lots of kids in the hope that at least one would survive accidents and disease and be sufficiently successful in life to take care of them. Take away the need for lots of kids (by providing old-age support), and the birth rate dropped like a rock. Right now, it's BELOW replacement rate in the US. Immigration is the only thing that keeps our population growing, and that's depressing wage growth.
A transition to an asset-based system like Australia and New Zealand (and Chile and Singapore) is the only long-term solution that won't be perpetually in crisis. But, the transition will be tricky: current and near-future retirees will have to accept a cut in benefits, while several generations will have to contribute payroll taxes to fund those reduced benefits without any return on investment -- all while saving for their own retirement.
The federal government BORROWED it. It's actually part of the deficit, although they don't always make it obvious.
The problem with your original assertion: Just take it out of the general fund and put it back into an untouchable fund
It is in an "untouchable" fund. That's why Al Gore's "lock box" meme was laughable... it's always been that way.
The Social Security Trust fund is invested in the equivalent of US Treasury Bonds. They pay dividends that are equivalent to long-term US Treasury Bonds. You can look at the balance sheet in the report I cited above and see that: $98.2B on a balance of $2.76T in 2014.
That same annual report also shows that benefits paid exceeded taxes collected. That why the Trust Fund only increased $25B last year: because $73B was withdrawn to pay benefits. In the next few years, the Trust Fund balance will start to decrease as withdrawals increase.
Finally, I'll answer the question many people ask: why US Treasury Bonds? The truth is: until Obama screwed the pooch by threatening to suspend dividend payments, US Treasury Bonds were considered the safest investment in the world. But, consider what would have happened if the SSA had invested in equities or corporate bonds: it would have been crony capitalism at its worst. Congress would have never let the SSA choose investments based on value or safety -- there would have been all kinds of prohibitions and "earmarks" to pay off political favors.
“the transition will be tricky: current and near-future retirees will have to accept a cut in benefits, while several generations will have to contribute payroll taxes to fund those reduced benefits without any return on investment — all while saving for their own retirement.”
Tricky indeed. This is precisely why you just end it. The government need not be involved in creating asset-based retirement plans, in fact, they ought NOT be involved.
Once you start shifting the sacrifice to the future, it will never stop. “I get mine now, and folks who can’t vote pay but don’t get a thing” is a winning political strategy every time. “conservatives” here would vote for it.
End it, deal with the social welfare ramifications now, and don’t pretend that the party can roll on. It can’t and it won’t.
You’re right that it is politically impossible - right up until it’s fiscally impossible to pay another dime. Then and only then will folks understand.
I won't disagree with that, but it's not likely to happen.
You’re right that it is politically impossible - right up until it’s fiscally impossible to pay another dime. Then and only then will folks understand.
That won't happen. The worst that will happen is benefits will be cut to what can be sustained with the current payroll taxes. That's about 79% of currently legislated benefits with the current payroll taxes, around 2034. Of course, the date and percentage will likely be different by then -- it's been getting worse year by year.
What then, did Johnson do in ‘65 ?
For the government to borrow from itself has about as much meaning as me borrowing from myself.
You tell me. I'm tired of people repeating this meme with no evidence.
I showed you evidence that it's not true. You can go back and look at the prior annual reports, and see the same line items.
Why ISN'T an actual account generated ?
Have you ever borrowed from one credit card to pay off another? It's a dumb thing to do, but many people do it all the time.
If you don't cut spending, you eventually will run out of options when you hit your credit limit. But, the federal government can raise it's own credit limit.
However, the question here isn't whether the government is acting wisely. The usual claim is that the government "stole from Social Security". They didn't. Every dollar that was borrowed is accounted for, and is earning interest.
And the real issue is: it doesn't matter. Using the relatively safe assumption that every dollar borrowed from Social Security is paid back: It won't be enough!!!
This is what I'm trying to get you, knarf, and all of the other mis-informed people on FR to understand: Stop whining about non-existent and trivial problems with Social Security.
Social Security has a real problem, but it's not the piddling crap that you complain about. Even if you were somehow able to magically wave them away, Social Security is still in trouble. By focusing on the non-existing and trivial problems, you are ignoring the elephant in the room:
There are no little "tweaks" that can fix it at this point. We passed that decades ago. We are now looking at a lot of pain for beneficiaries, taxpayers, or both. And the longer we wait to address it, the worse it will get.
[[Social Security Reform: A Conservative Plan; Strengthen safety net, build private savings on top.]]
Here’s a better plan. STOP sending hundreds of billions of dollars to terrorist nations, Stop the $150 BILLION that we are going to pay Iran, stop spending billions on USELESS special interest groups, stop giving hundreds of billions to ILLEGALS, and then RETURN the money that was stolen from SS!
Problem solved!
“the federal government can raise it’s own credit limit”
The real credit limit isn’t how much the government has said is the max it will borrow, it’s how much its creditors are willing to lend.
And the sad truth is we hit that limit years ago.
You obviusly have information I can use
IF we suddenly stopped paying out SS ... CAN we recover to SS solvency, and if so ... when
I'm sure it's an academic excersize, but ... can it be done ?
Just a couple of points...as I see it, one reason we do not have enough workers contributing is that we have aborted generations of potential contributors in the name of “Woman’s right to chose”. Secondly, how does pegging the SS benefit to about what one could make flipping burgers help the elderly stay out of poverty? Do we not see many of these fast food workers demonstrating for a “living wage”?
[[Social Security cannot indefinitely pay the current level of OLD AGE benefits with the existing payroll tax rate]]
Let’s put this in perspective-
We can afford to pay between $400 BILLION and $600 BILLION dollars every single year for illegals, but we can’t find the hundreds of billions that our government STOLE from SS?
There4 are still more people paying in to SS that are actually around to collect it in the end- (or at least all of what they payed in) so that would still mean a surplus (which apparently also gets stolen)-
“Is this Social Security’s worst financial report ever?
Far from it. In the late 1970s and early 1980s Social Security ran deficits. Trust fund insolvency loomed in July 1983. With mere months of solvency left, Congress acted to bolster finances on April 20, 1983. SSA still operates under the 1983 funding arrangement, generating surpluses every year since.”
http://www.marketwatch.com/story/exposing-the-social-security-solvency-hype-2013-06-12
“I keep hearing that Social Security is about to go broke. What do the numbers show?
The Trustees’ Report presents these data:
•Social Security has $2.73 Trillion in trust fund reserves.
•Social Security reserves are still growing and will continue to grow through 2020.
•Beginning in 2021, program costs are projected to exceed income, shrinking the trust funds.
•The trust funds will be exhausted in 2033, the same year projected in the 2012 report.
•After 2033, income will cover 77% of scheduled payments”
As stated before though, things can be done to ‘fix’ the problem before 2030 (some now think it will be solvent out till 2040 or so)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.