Posted on 11/04/2015 7:13:16 AM PST by SeekAndFind
[[IF we suddenly stopped paying out SS ... CAN we recover to SS solvency, and if so ... when ]]
We shouldn’t have to- SS supposedly was ‘insolvent’ back I nthe 70’s and congress ‘fixed’ the problem then- It was supposedly running in deficit- not surplus
In 2012 we had a $54 billion dollar surplus- (not sure hwat the surplus is today)
[[one reason we do not have enough workers contributing is that we have aborted generations of potential contributors]]
That coupled with the fact that families stopped having as many children as more folks focused on careers rather than families
There is still a surplus of workers per non working elderly retired, disabled (although under this current regime many millions more went on disability who did NOT need it)- although it’s less worker per non worker than it used to be, there still should be a surplus- and I find it very odd that the surplus hasn’t been used in investments in such a way as to keep it growing money in an effective manner- With smart investments, we should never have gotten into this problem in the first place- instead though SS was stolen and spent, and now they can’t find the money they spent to replace what they stole, but they can find $600 billion a year for illegals?
The way to get rid of the SS monstrosity without hurting people is to start from the start. That is, no new enrollments in the system. And since SS is tied to Medicare with the FICA Tax, Medicare ends the same way.
This means instead, the money that would have gone to FICA, to be immediately squandered by the government, instead of saved as they promised, effectively doubling the Income Tax, goes to individual health and retirement savings accounts, hopefully tax free.
This also means that federal revenues lose about a quarter or so of their ill gotten gains. Which means either big time cuts to government or huge deficits.
But if you are willing to kill SS and Medicare, you probably are not in favor of huge deficits. So your task becomes what parts of the federal government to put out of business.
The whole point of Social security was for everyone working to contribute, knowing that they may or may not live long enough to collect it- the reason it paid off was because many die before being old enough to collect, and that ‘surplus’ goes into the coffer. Most people being willing to contribute for the purpose of taking car of other should they themselves not live long enough to collect- SS is a payment into a system for the elderly, not just into a system for ourselves alone- Some think this is unfair, but many are willing to do their part to take care of elderly and sick and veterans-
a Single person trying to save up enough for retirement won’t have that advantage- They will only be able to collect what they save-
Except it is all a lie. Every dime of taxes that is supposed to go into SS and Medicare is instead immediately spent, and then some. Congress figure out long ago that if they just appropriated enough money to pay for the monthly expenses, then they could call the system “solvent”. It is anything but.
However, their treachery also points out how to turn the fraud into something real and tangible that won’t be stolen by greedy politicians. Because they were right, as long as the money is paid out monthly, the system still *seems* to work.
And importantly, it *doesn’t need* any “new” money into the system, as long as those payments are made. So it can be dismantled, and a real system built to take its place, without hurting any beneficiaries now or in the future.
The *only* player that does get hurt is the government, by being denied “free money to waste”. Something I think we can all live with.
But guaranteed if we leave things the way they are now, the suffering will be terrible.
Right now, Social Security, Medicare and Medicaid amount to 43% of federal spending. Primary receipt categories included individual income taxes ($1,395B or 46% of total receipts), and Social Security/Social Insurance taxes ($1,024B or 34%). Add these two together to see what our REAL Income taxes are right now.
It was a damned lie and it must end.
The investment rules governing payroll tax income were also established in the 1935, and are essentially the same ones in use today. Specifically, the 1935 Act stated: "It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States." (See Title II, Section 201of the 1935 law)
It goes on to explain that the Trust fund has been in both marketable and special-obligation bonds. And it explains:
Since the assets in the Social Security trust funds consists of Treasury securities, this means that the taxes collected under the Social Security payroll tax are in effect being lent to the federal government to be expended for whatever present purposes the government requires. In this indirect sense, one could say that the Social Security trust funds are being spent for non-Social Security purposes. However, all this really means is that the trust funds hold their assets in the form of Treasury securities.
What changed in the LBJ administration:
This 1968 change grew out of the recommendations of a presidential commission appointed by President Johnson in 1967, and known as the President's Commission on Budget Concepts. The concern of this Commission was not specifically with the Social Security Trust Funds, but rather it was an effort to rationalize what the Commission viewed as a confusing budget presentation. At that time, the federal budget consisted of three separate and inconsistent sets of measures, and often budget debates became bogged-down in arguments over which of the three to use. As an illustration of the problem, the projected fiscal 1968 budget was either in deficit by $2.1 billion, $4.3 billion, or $8.1 billion, depending upon which measure one chose to use. Consequently, the Commission's central recommendation was for a single, unified, measure of the federal budget--a measure in which every function and activity of government was added together to assess the government's fiscal position.
This was all about budgets. The excess Social Security payroll taxes still went into the trust fund. As the article also notes, there were already two other major trust funds (civil service retirement and life insurance for WWI soldiers) when Social Security began. So, this wasn't a new concept.
But, you can skip all that and read the last paragraph:
Finally, just note once again that the financing procedures involving the Social Security program have not changed in any fundamental way since they were established in the original Social Security Act of 1935 and amended in 1939. These changes in federal budgeting rules govern how the Social Security program is accounted for in the federal budget, not how it is financed.
Why ISN'T an actual account generated ?
For you individually?
If that's what you meant, it's simple:
Sigh, here we go again. Why won't this meme die? It's wrong, and you are just making the problem worse by giving people the false hope there is an easy fix.
Read the rest of the thread. The government didn't steal anything from Social Security. They borrowed it, and are paying it back. This is nothing new, as the original legislation said: this is what the Secretary of Treasury shall do.
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)-
There are not enough payroll taxes being collected to pay benefits NOW, and withdrawals from the Trust Fund have begun. It started in 2010, thanks to the recession. At the moment, the Trust Fund is earning enough interest to keep growing despite the withdrawals, but that will end soon. And around 2034, the Trust Fund will be exhausted. By law, SSA must reduce benefits if they aren't given additional money.
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)
I don't think you realize the magnitude of the problem. There are no easy fixes -- it's too late for that.
I'll again quote what the 2015 Trustee report says:
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.
That's what has to be done NOW. If we wait until 2034, the tax increase (or the benefit cut) will have to be larger.
And even then, that only "solves" the problem until 2090. Presuming we reach that point, the problem will just occur again without a structural change -- it's a demographic problem we can't repeal.
Historically, the economic and demographic assumptions used by SSA have been too optimistic. An example: Back in the 80's, the SSA's assumptions forecast that the increase in payroll taxes (about 50%) would put Social Security back on solid footing until 2060.
Guess what: we aren't going to make it.
But, I'll reiterate: Social Security won't go "bankrupt". They must simply reduce benefits to whatever level can be sustained with the incoming payroll taxes. Currently, that's about a 21% reduction in 2034. But, the date generally gets closer and the reduction gets bigger every year.
[[So it can be dismantled, and a real system built to take its place, without hurting any beneficiaries now or in the future.]]
I don’t see how it can be done unless there is a large enough ratio of workers to non workers- (unless there is some way to invest the money for large enough gains to be able to pay people more than they put into the system like SS does- but the SS model relies on a good number of folks paying in but not living long enough to collect)
[[The *only* player that does get hurt is the government, by being denied “free money to wasteâ€. Something I think we can all live with.]]
I agree with that- but really, the government won’t be ‘hurt’- they will just be losing something that isn’t theirs to begin with, and will have to quit funding useless programs like federally funded studies, stop paying hundreds of billions of dollars for illegals, stop sending terrorist nations hundreds of billions of dollars etc- The free for all spending spree has to stop-
we gave the government a credit card, and they are being grotesquely irresponsible with it- The system was fine when it went to helping those who truly neede3d it like the elderly, the sick, and even helping single moms get back o n their feet with temporary help- And I think most healthy working people would feel we as a nation have an obligation to help those who can’t help themselves very well- but liberals have so perverted the system that now everyone and their brother is on welfare, illegals are on it, nearly 70% of ALL immigrants (legal and illegal combined) are on it whether they are able bodied or not- millions who aren’t disabled are now on disability-
This is what broke the system and overwhelmed it financially— Had it remained available only for the truly needy, and the retired, there would be plenty of money
I agree something has to be done now, but we must make sure that retirees, and the disabled and veterans are taken care of while transitioning- I know many disabled and elderly that get by on as little as $650 a month- and they are just barely surviving- (many do get more, but many folks only worked min wage jobs all their lives and ended up getting below poverty SS or Disability when they became disabled and couldn’t work any longer)
The whole deal with SS was that it works like health insurance used to work- people would pick up health insurance, pay in their whole lives, and need it only briefly at the end, or die suddenly and not use it- this is what keeps the industry alive (well, that and insurance claims adjusters denying payments for certain cases)- The4 whole idea of course is to get more coming in than is going out-, and for that you need lots of people involved to get the averages in favor of those who need it In the end-
With individual plans, you don’t have that advantage- there’s just what the individual puts in, and it usually won’t be enough to keep them for the rest of their lives ocne they retire, and so many will go to nursing homes and end up costing loads to the government who have now lost the income from SS
Meh- it’s complicated- I’m no financial guru that’s for sure-
The unfunded liability for Social Security is estimated to be about 27 trillion, or about 10 times the current Trust fund.
In 2014, about $786 billion was collected in payroll taxes and income taxes on benefits.
Starting with the current Trust Fund balance of $2.764B and presuming an annual dividend rate of 4%, it would require 19 years to build that balance to over $27 Trillion.
But once again, Social Security won't simply go bankrupt. They will just lower benefit payments to whatever can be sustained with the incoming taxes. But, how they would do it is anyone's guess.
My suggestion: plan for a reduction of at least 20% in 2030. That's what I'm doing.
[[It’s wrong, and you are just making the problem worse by giving people the false hope there is an easy fix.]]
first off I didn’t’ say it was easy- I said there were reasons why we’re In the mess and said there were things we could do to fix the problem-
The government is stealing the money because they are using it for things that were never meant for it to be used for- and while the money is tied up paying for those other things, it’s not drawing interest and isn’t being invested- and it’s beign used to pay for things like illegal imigrants-
[[I don’t think you realize the magnitude of the problem. There are no easy fixes — it’s too late for that.]]
Return the money now, invest it like it’s supposed to be- Perhaps we are even beyond this point now, but it certainly wasn’t due to us if this is so- it was due to the money being improperly used for other things and not gaining the interest it could have, or being invested like it should have been- instead it’s used to give free thigns to people that don’t deserve it- illegals, special interest group studies, grants etc-
[[That’s what has to be done NOW. If we wait until 2034, the tax increase (or the benefit cut) will have to be larger.]]
That is projected based on not taking the steps needed to correct the problem and for continuing on the way we are right now- ‘borrowing the money’ to spend on things it shouldn’t be spent on
[[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);]]
I’m no expert in this issue for sure, but it appears to me they are saying this simply because the government does not want to quit spending SS money it ‘borrows’- then the money is gone and they have to borrow from other countries to pay back the money they ‘borrowed’ from us, and we end up paying interest to other countries,. and the problem worsens- there is a spending problem in Washington- and the people who suffer are NOT the illegals, or terrorist nations, but rather our nation’s most vulnerable citizens
[[But, I’ll reiterate: Social Security won’t go “bankrupt”. They must simply reduce benefits to whatever level can be sustained with the incoming payroll taxes. Currently, that’s about a 21% reduction in 2034.]]
They are talking about whacking the disabled this year perhaps with a nearly 18% reduction- Rather than reduce government spending, they reduce the income for our nation’s most vulnerable citizens
Now, I’m just thinking off the cuff here- so if I am indeed off, don’t take it as me being obstinate or bull headed- I’m simply unprofessionally noodling the issue over- and likely I am off on some things- but I do believe the government has taken money from SS, and while they may be paying it back, it’s now too late because I’m sure they are not paying it back with interest, and like I mentioned, that money could have been invested in other things to keep the system solvent instead of going to things it shouldn’t have
I hope we can keep this conversation civil- like I said, this certainly is not my area of expertise, and perhaps I am wrong- perhaps the government has paid back everything with interest and SS didn’t ‘lose’ a dime after all, but I have my suspicions
[[My suggestion: plan for a reduction of at least 20% in 2030. That’s what I’m doing.]]
the problem is, that like I said in a post above, I know many seniors and some disabled people who are living on the bare minimum (Around $650 a month) (Compare that with some illegals and some immigrants getting government freebies to the tune of nearly $45,000 a year)- and a 20% reductions means they would be getting only $510 a month now- That’s a drastic cut- these folks are just barely making it as it is— (People in congress voted themselves a ‘daily personal spending fee’ of nearly $125 per day- compare that to seniors on the minimum amount getting only $15 a day or so, and this isn’t a ‘personal spending amount’ like they get in congress- but rather comes out of their monthly income) (Note, I’m not looking with jealousy at what congress gets, I’m simply showing that our country has it’s priorities screwed up- We NEED to take care of our nation’s most vulnerable citizens- elderly, disabled, and veterans, but instead, we punish them with further cuts, while every year awarding more and more to others like illegals, immigrants I(nearly 75% are on one type of government program or another)
[[Starting with the current Trust Fund balance of $2.764B and presuming an annual dividend rate of 4%, it would require 19 years to build that balance to over $27 Trillion.]]
But by then there will be more people on SS, (It seems our liberals in government want to push for government dependent citizens for some unknown reason, plus the ratio of workers to retired/disabled etc will be lower) and so the burden will be even greater than 27 trillion likely-
Bah what a mess
Except your reasons are wrong. And all you are doing is preventing people from facing the real reasons, and participating in the resolution. An object example:
The government is stealing the money because they are using it for things that were never meant for it to be used for- and while the money is tied up paying for those other things, it’s not drawing interest and isn’t being invested- and it’s beign used to pay for things like illegal imigrants-
All of this is demonstrably false.
Nearly all of the payroll taxes collected in the past few decades were used to pay benefits to current beneficiaries. A small portion were not needed, and BY LAW, were invested in the equivalent of US Treasury Bonds.
The Trust Fund collects dividends every year. You can read the Social Security Trustee's annual report, and it will tell you exactly how much.
https://www.socialsecurity.gov/oact/tr/2015/tr2015.pdf
See the table on page 7.
If you don't go read the Trustee's report and confirm it for yourself, you are consigning yourself to being willfully ignorant on the subject.
And if you repeat this incorrect claim after I've pointed you to authoritative information that clearly contradicts it, you are willfully lying in order to agitate people that don't know any better.
I don't think I can make it any clearer than that.
I'm not going to bother to respond to the rest of your claims, because they arise from information that is just as wrong.
I hope we can keep this conversation civil- like I said, this certainly is not my area of expertise, and perhaps I am wrong- perhaps the government has paid back everything with interest and SS didn’t ‘lose’ a dime after all, but I have my suspicions
Yes, I'd like to keep this conversation civil. But, that requires you to start reading and learning, rather than spouting this kind of crap.
Go read the Trustee's annual report and learn, and I'll be happy to discuss the finer points of it. Or, just shut up because you don't know what you are talking about, and aren't helping.
At its very beginning, SS was cringe worthy, for several reasons. Rational people described it as a way for minimum wage workers, with no other means of retirement, could have a retirement. Certainly not salaried people.
However, it was passed by its advocates with the idea of nationalizing all retirements under the government umbrella. So, in a manner of speaking, it was created with the duplicity of Obamacare, an effort to nationalize health care. Included in the deal was the national identification number system on Social Security cards, that they swore up and down would *never* be used for identification.
It was created smack dab in the middle of the New Deal, in 1935, when congress was heavily Democrat, and there had already been many socialist and fascist-style schemes foisted on America.
There had already been the agricultural equivalent of the “red terror” with federal officers going from farm to farm, killing livestock and destroying crops. On top of the Great Depression, it broke the will of most to resist.
[[But, that requires you to start reading and learning, rather than spouting this kind of crap.
you are willfully lying in order to agitate people that don’t know any better.
Or, just shut up because you don’t know what you are talking about, and aren’t helping.]]
I asked y7ou t5o keep it civil- apparently you’
re not capable of doing so- It was never my intention to ‘willfully lie and agitate’ people- don’t know why you even have to bring crap like that up? I was trying to have a discussion with you hoping you would clear some things up as I mentioned I probably was wrong- but I don’t really care to discuss the issue further if you’re going to act like that
and just for the record- even congressmen and women make the claim SS was stolen from- You point to a SS link run by the government- fine- however, the government isn’t exactly known to be honest now are they>? They will rob you blind and claim they did not do so-
Again- IF you can keep the conversation civil from here on out, and stop with the childish veiled insults, I’d like to discuss the issue further0- IF you are incapable of that- then again, I don’t care to discuss it further-
We’ve had congressman after congressman state that the funds were misappropriated- Are they too ‘willfully lying in order to agitate”?
Good, I got your attention.
Here's the problem: You have been arguing from a false premise, like "gun control saves lives", or "man causes global warming".
I'm not going to waste my time arguing with you about that. If you refuse to acknowledge that you're wrong, we have nothing further to discuss.
However, if you do want to discuss the real issues, I'll be happy to do so. But, you'll have to start by dropping all the "illegal aliens are stealing Social Security" crap. You've posted absolute falsehoods over and over in this thread, despite earlier postings with references that point out the flaws in your argument.
We have to move beyond arguing about non-existent or irrelevant problems, because all it does is poison the discussion about what really needs to be done.
Here's the basic truth: Social Security is in trouble because it pays more "old age" benefits than it can afford. It's been doing it for decades, despite an attempt to fix it back in the 80's. The problem is demographic and economic:
It isn't SSI. That's administrated by Social Security, but separately funded from general revenues.
It isn't disability fraud. Yes, the disability fund has its own problems, and it's actually in worse shape than the old age/survivor fund. But, it's separately accounted -- and even if you were to completely remove disability benefits (and taxes) into another program, the Social Security OASI (old age and survivor insurance) program is still in trouble.
It isn't "illegal aliens". If anything, they are actually HELPING Social Security, by paying taxes and never collecting benefits.
What I am trying to get you (and many others) to understand: Social Security old age benefits will be in jeopardy in the next two decades. So, stop whining about other stuff that is either untrue or irrelevant. They can't solve the problem.
It comes down to what I posted earlier: in order to keep Social Security going in its current form, taxes must be increased, or benefits must be reduced, or a combination thereof. And because we (collectively) have put our head in the sand for the past two decades, the changes are going to be painful. The only question is how the pain will be distributed. And, the longer we wait, the more painful it will be.
The Social Security Administration has a web page showing their evaluation of dozens of proposed changes:
Individual Changes Modifying Social Security
I highly recommend taking time to look at them, as they have some variation of almost every proposal I've seen for "fixing" Social Security. There are two simple, easy-to-understand graphs for each proposal. If you have any questions about how to interpret them, let me know and I'll explain.
But, I'll also point out that I'm actually not advocating that Social Security should be "fixed" so it can continue in its current form. I just want everyone to understand what it will take, and decide if they really want to put that burden on their children and grandchildren.
Any "fix" is doomed to fail, for the same reason that every other "fix" since Social Security was first created: the demographic trend is not favorable. We have to find a way to transition to an asset-based system like Australia, New Zealand, Singapore and Chile. But, it's going to be painful, because during the transition both taxpayers and beneficiaries must bear an extra burden because previous generations were so short-sighted.
Yes. That's what many Congressmen do.
People like Nancy Pelosi, Elijah Cummings, Harry Reid, and Chuck Schumer shamelessly lie to the cameras, knowing that the lamestream media will lap it up and not bother to fact-check them.
Alcee Hastings was a US District Court judge before he was IMPEACHED by Congress for bribery and perjury. He was subsequently elected to represent the 23rd District in Florida. Do you really think being a Congressman makes someone trustworthy?
I don't think it was intended to "nationalize" retirement: there were still privately funded pensions in many industries. But, there were a subset of people that didn't, and just like Obamacare: they upended the entire nation for that subset of people.
The ugly truth: Social Security included the middle class, because it was the only way to pay for it. But, by selling it to the middle class, they created a large constituency to protect it.
And here's how they hood-winked the middle class: they set up the benefit formula so that the middle class actually paid for most of the benefits of the lower income workers. From a posting I wrote earlier:
The payroll tax is flat, up to 118K per year (in 2015).
Over your lifetime, the highest 35 years of wages are used to calculate your benefit. If you don't have 35 years of earning, 0 is used for the remaining years.
Wages are indexed by average wage growth (which is similar to inflation, but not exactly). So, at retirement, you have what is called AIME, or average indexed monthly earnings.
The AIME is then plugged into a formula to determine your benefit. You might be thinking: they take my AIME, multiply it by 50% (or whatever), and that's my benefit. So, everyone gets a benefit proportional to the wages that were taxed. Right?
Nope, that's not how it works. In 2016, the calculation is:
Repeat the calculation for a median AIME, like $5,157/month. Their Social Security Benefit at FRA would be $2,148/month, or 42% of their AIME.
Finally, at a low income level: $856/month. Their benefit would be $770/month, or 90% of their AIME.
As you can see, Social Security is means-tested. Low-income wage earners receive replacement of almost all of their income in retirement, vs. between 1/4 and 1/3 for higher income workers.
Depending on what assumptions you use for rate of return and life expectancy, it turns out that if your average wage is BELOW the median income, you get an above-average return from your Social Security contributions. Conversely, if you were ABOVE the median income, you get a below-average, or even negative return.
Frankly, if this had been obvious at the time, I don't think Social Security would have ever passed. But, ObamaCare wouldn't have passed either, if we knew what we knew now.
[[Here’s the problem: You have been arguing from a false premise,]]
I’ve been arguing what many argue- and also trying to figure out, not knowing much about it myself, how we could go from a worker to non worker ratio of 16 to 1, and not have surplus still (even though we are now apparently down to a ratio of aprox 6-1)- It seems the money has been mismanaged (When thinking this through without knowing actual figures- and again, perhaps I’m wrong)- As it is evident that survivors (those who make it to retirement age, and don’t die before reaching it) are not paid in excess of 16 times what they put in- there should have been plenty of surplus.
From what I understand, (and again, I may be wrong, but many make this argument- and it seems a reasonable argument to make) while the surplus did go into a trust fund with government bonds- bonds are nothing more than iou’s, the actual money being spent on other things, and when it comes time to make good on the iou’s the government has to borrow money to pay the SS
Further, from what I understand, and again, I may be wrong, but, Had the money been invested, like it was supposed to be invested, in pre-existing marketable U.S. Treasury bonds, the money would actually still be there, and we would not have to be borrowing, paying interest on the borrowed money, and repeating the cycle over and over and over again driving us further into deficit in SS (not actual deficit, but to where we have to pay out less to each SS recipient)
[[But, you’ll have to start by dropping all the “illegal aliens are stealing Social Security” crap.]]
I won’t drop that because we are paying out between $400 billion and $600 billion every single year to illegals, they are destroying the economy, and the government ‘borrows’ the money from the trust fund in some cases to ‘fix the budget’
It all ties in whether you want to admit it or not- Clinton supposedly ‘borrowed’ over $700 billion from it to ‘fix’ the economy during his tenure- We keep going further and further into debt In this country, and a large reason we are doing so is special interest groups, government grants to crap programs, and illegals sucking this country dry, and if you have some evidence that NO SS money actually went ot ‘fixing’ these problems, then present it0- Calling me an ignorant liar, and pointing me to a government website isn’t proper evidence- no more so that someone questioning Hillary Clinton as a liar being told to go to her website to see that she says ‘nope, I am not a liar’ is evidence that she isn’t
[[Here’s the basic truth: Social Security is in trouble because it pays more “old age” benefits than it can afford. It’s been doing it for decades, despite an attempt to fix it back in the 80’s. The problem is demographic and economic:
Life expectancy is increasing.
Fertility rate is lower than expected (it’s currently less than replacement rate).
The economy isn’t growing as fast as expected.]]
That’s what I’ve been told, however, only until recently has the ratio dropped to 6-1- Before that it was approx. 16-1 which should have been plenty HAD the money been invested in pre-existing marketable U.S. Treasury bonds
What exactly is the ratio of worker to non worker for which we fall under’ sustainable levels?
[[It isn’t “illegal aliens”. If anything, they are actually HELPING Social Security, by paying taxes and never collecting benefits.]]
I will have to disagree with this- as nearly 70% of all immigrants are on some form of government handout/program, many to the tune of nearly $45,000 a year as they milk every program they can, and again We get back to illegals costing this country approx. $600 Billion a year, and the possibility that SS is being tapped to help offset the problem- if not as a direct result, but rather an indirect result in an attempt to ‘fix the economy’
[[So, stop whining about other stuff that is either untrue or irrelevant. They can’t solve the problem.]]
nobody is whining about anything- We’re simply asking questions which seem reasonable questions to ask since SS had surpluses all those years and still couldn’t manage- It only seems reasonable to question where the mismanagement happened- Sorry if you don’t like that
[[It comes down to what I posted earlier: in order to keep Social Security going in its current form, taxes must be increased, or benefits must be reduced, or a combination thereof. And because we (collectively) have put our head in the sand for the past two decades, the changes are going to be painful. The only question is how the pain will be distributed. And, the longer we wait, the more painful it will be.]]
nobody is questioning that something has to be done now- This whole discussion took place because I’ve echoed what many others, including congress people, and not just democrats ‘looking to scare people’ have made- You claim the money was never misappropriated and mismanaged - that’s it- many think otherwise, and it seems for good reason- you disagree- that’s fine- but you don’t have to point to a government website, and declare anyone who doesn’t buy it completely as an ignorant liar- we should be able to discuss the issue in a civil manner without resorting to playground insults- that does nothing to strengthen your argument- and only shows weakness- but do as you l ike
It's called demographics. When people don't have a bunch of kids, and live longer, the ratio of contributors to beneficiaries goes down. There's no conspiracy.
From what I understand, (and again, I may be wrong, but many make this argument- and it seems a reasonable argument to make) while the surplus did go into a trust fund with government bonds- bonds are nothing more than iou’s, the actual money being spent on other things, and when it comes time to make good on the iou’s the government has to borrow money to pay the SS
That's essentially correct, as long as there is an annual deficit. What is happening is the government sells new US Treasury bonds to individual investors and banks. There's no surprise there.
Further, from what I understand, and again, I may be wrong, but, Had the money been invested, like it was supposed to be invested, in pre-existing marketable U.S. Treasury bonds, the money would actually still be there, and we would not have to be borrowing, paying interest on the borrowed money, and repeating the cycle over and over and over again driving us further into deficit in SS (not actual deficit, but to where we have to pay out less to each SS recipient)
No, that's not true. Per the link that knarf posted: the SSA has the option of buying marketable and non-marketable special obligation bonds. They've done both, but since 1980, they have been buying non-marketable bonds. But, the non-marketable bonds dividend rate is tied to the US Treasury Bond Rate. You can look at the annual report and do the calculation: the Trust fund earned 3.55% last year, consistent with US Treasury Bonds.
I won’t drop that because we are paying out between $400 billion and $600 billion every single year to illegals, they are destroying the economy, and the government ‘borrows’ the money from the trust fund in some cases to ‘fix the budget’
Look, this is the last time. What the government does with the money it borrows from Social Security is irrelevant. As long as it pays it back when Social Security needs it, and pays a market dividend rate, Social Security financing is secure.
Again, this is your last chance. You want to discuss this civilly, drop the conspiracy crap. You are wrong, it's a lie, and whoever told it to you did it to get you agitated. And it's working.
[rest of conspiracy crap ignored]
What exactly is the ratio of worker to non worker for which we fall under’ sustainable levels?
It all depends on how much you are willing to tax the workers, and how much you want to pay in benefits. Read on.
nobody is whining about anything- We’re simply asking questions which seem reasonable questions to ask since SS had surpluses all those years and still couldn’t manage- It only seems reasonable to question where the mismanagement happened- Sorry if you don’t like that
If you want to ask questions about why, that's fine. But, spare me the complaining about stuff that didn't happen, or stuff that is irrelevant. I'll answer your question, but I'm not going to start with your false premise.
So, if you want to know what happened -- this is it:
Here's where we stand: There is about $2.7T in the trust fund. But, Social Security pays about $859B in benefits, every year. That's only enough for less than 3 years in benefits. The surplus over the past few decades wasn't that large, because most of the payroll taxes collected went to the beneficiaries. And ultimately, that's your answer.
I read this repeated meme that "Congress stole SS". So, let's go with that for a moment -- pretend that Congress "stole" SS: who did they "steal" it for?
The answer: Social Security recipients. In other words, the exact people for whom the benefits were intended.
In the 70's, Congress decided that Social Security recipients needed more money. They increased the benefits significantly, AND added a COLA every year. Why did they do it? Simple: to buy votes. If you think they had altruistic motives, you don't know many Congressmen.
Despite attempts to raise taxes to pay for it, and accelerate that increase in the 80's, the demographic and economic assumptions were too optimistic. They raised benefits too high, and/or didn't raise taxes enough.
So, Social Security has been paying more benefits than it could afford for at least the past 40 years. And who got the extra money? Again:
Past, Present, and Future Social Security recipients.
You aren't going to like this, but I'll make this as simple as possible: if you are collecting Social Security, go look at your last check or direct deposit. If you haven't started collecting benefits, look at your last Social Security statement or online at SSA.gov, and determine what you are being promised.
Take that amount, and multiply it by 16.4%. If the amount is $1000, 16.4% is $164.
That amount is why Social Security is in trouble.
It's being paid to you now or in the future and Social Security can't afford it, in the long run. It's not your fault you are receiving it, other than if you voted for someone that gave it to you. Congress didn't give it to "someone else": they gave it to your parents and grandparents, and are promising to give it to you.
If you aren't willing to give up all or some of that extra benefit right now, you are contributing to the financial problems with Social Security. Because, the only way you can continue receiving that extra amount is to raise taxes on your children and grandchildren by 21.1% to 15.02%, combined.
If the changes aren't made this year, then the reduction to benefits or the increase in taxes will have to be bigger next year. And it will get worse every year until about 2034, when the SSA will have no choice but to reduce benefits by about 21%.
If you don't like the truth, please spare me the outrage. You don't have anyone else to blame, other than previous generations that didn't have enough children to keep this inter-generational income transfer going.
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