Posted on 03/29/2023 9:24:23 PM PDT by SeekAndFind
Brenton Smith ([email protected]) is a policy advisor with The Heartland Institute.
Social Security reform has been largely dormant for 40 years as politicians from both parties have talked diligently about the program’s long-term outlook while assiduously avoiding taking any action to deal with it.
The sad truth is the longer we wait, the harder it gets. Given the passage of time, a person turning 76 years old today expects, on average, to outlive the system’s ability to pay scheduled benefits. It only gets harder from here. That statistic should draw the attention of our elected officials, but it has done little more than get fingers pointing.
To those in Washington, the answer isn’t to fix Social Security. It is to change the role it plays in our lives.
Social Security has one feature that has allowed the program to endure over time: earned benefits. The idea that people have paid for their benefits has allowed the program to pay benefits despite the financial problems of the broader government. Right now, in Washington, politicians are haggling over where to make cuts; everything is on the table—except Social Security.
The reason is payroll taxes, a bedrock feature of the program designed by the program’s chief champion: President Franklin D. Roosevelt.
How important is the link between what we contribute to the system and what we collect? FDR rather sensibly said, “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions.” He designed Social Security so that it would not be confused with the public dole, or in modern parlance, a welfare program.
FDR created the framework of earned benefits to protect the program from those “damn politicians.” He wanted to ensure that the needs of the elderly would not have to compete for resources with the other priorities of the government in a debate about who does and does not need benefits.
If we allow politicians to sever the tie between payroll taxes and benefits, all that is left is a welfare program that Congress would nominally call “Social Security” for those nostalgic voters who hold some emotional attachment to the name.
Today, there are a range of politicians offering to give you more money from Social Security. What they are not telling you is that higher benefit payments are the price of your legal and moral rights to benefits when you retire. Whether it is $20 or $200 more per month, it is not worth it. It is just a shiny bauble.
Keep in mind, whatever the politician promises you today can be taken away in the future by other politicians because none of these manufactured benefits come with a legal or moral right to the money. In the end, all you will have is a political right to vote for the guy who will stuff the most cash in your pocket.
There are proposals on both sides of the aisle that would reshape Social Security by financing the program from the federal government’s General Fund. For example, senators are quietly talking about borrowing $1.5T to form a “sovereign wealth fund” that would generate revenue for the program.
It is a fancy new name for an age-old concept: bail-out.
The interest on that fund is $60 billion per year, which is no different from giving the program a cash infusion from the General Fund. That cash infusion opens the door to future politicians who want to reduce benefits because the program is “driving our deficits.” The legal and moral protection that seniors now enjoy will be gone.
Imagine for a minute that the hedge fund concept works. The unavoidable outcome of that success will be younger voters demanding more benefits. They will argue to double the size of the fund, as a means to provide relief from the payroll tax.
If you think the long-term outlook for Social Security is perilous now, just wait. It is likely to get worse before it gets better.
Social Security is math. Math us hard for politicians and reporters. There is nothing to reform. Al Gore’s lockbox was and is laughable.
Social Security is a ponzi scheme and it’s already underwater. Covid was supposed to kill all the old people. That didn’t work, so the vaxx will kill most people. If that doesn’t work, I don’t know.nukes?
The people in charge of most of this world are insane maniacs with double digit IQs.
Our unelected leader shits his pants. Think about that.
This is a DEMOCRAT program and they’ve clubbed Republicans over the head with it non-stop for the past 50 years, and the RINOs seem to keep coming back for more clubbing.
So, if it needs fixing, let the DEMOCRATS fix it. If they won’t, then let the DEMOCRATS deal with the political fallout of every recipient getting a haircut.
Reform can start by having the Govt. pay back all of the surpluses that were taken out of those surpluses and cancelling out the worthless, non-negotiable promissory notes issued in place of those surpluses.
SS was always a ponzi scheme, the money long got buried in the general fund and is gone, and figuring out which Americans get shafted is entirely pointless when the rest of the government is destroying the entire US financial system.
Oh, but SS will be 70% of ‘promised’ when I retire? I’d be happy if we’re not a Mad Max post-apocalyptic nightmare by then.
We can all be assured that if Congress ‘fixes’ SS it’ll be, like everything else they do, for the benefit of themselves and their donors and whichever honeypot serves as the laundering facility for corruption $ (currently Ukraine, might change by then).
THIS is the ‘mother of all’ time bombs. Although, the RATs will probably settle for lifting the ‘cap’ to give another decade of life.
It’s only going to get worse because Democrats - this Administration has plans on giving all the illegals here amnesty and THEN back qualifying them for Social Security.
Couple that with the severe abuse of SSDI by young and older people here who find a doctor and lawyer willing to say they’re “disabled” and you have another nail in SS.
Wanna disappointing day trip? Take a ride over to any SS office and sit for a while and see what walks in. Here’s a clue, they aren’t the old grey haired tax paying, SS contributing people you’d think they’d be. Foreigner parents of legal immigrants who ‘sponsored’ and then the work minimum qualifying quarters. And then there’s the gamut of young and somewhat older people who just don’t want to work anymore.
“THIS is the ‘mother of all’ time bombs. Although, the RATs will probably settle for lifting the ‘cap’ to give another decade of life.”
I’m good with lifting the cap as it will hit their wealthy, white, coastal, voting base far worse than it will hit Republican voters.
But, for that reason, Biden won’t even consider a clean lifting of the cap.
Don’t forget the expansion of SS benefits to those who did not pay into the system.
>> Our unelected leader shits his pants. Think about that.
I see your point, but I’d rather not think about it.
If you know what I mean (and I think you do).
>> I’m good with lifting the cap
I, too, am in favor of ANY solution to this difficult problem that does not affect me personally.
Wanna disappointing day trip? Take a ride over to any SS office and sit for a while and see what walks in.
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I’m 77 years old. When I was 62, I went to the S.S. office to sign up for retirement, the waiting room was packed and I was, by far, the oldest person in the room.
Any Legislation put forward by the GOP to reduce Social Security benefits will be officially named the “GOP Suicide Act”
And that's the way it is.
Same here with me 11 years ago at 62. Many, many young people either ‘seeming’ disabled or a single parent with 203 kids there looking to get SSI. (SSI doesn’t come from SS but SSA administers it).
The rest were non-English speaking parents with their sponsor legal immigrants. That’s what prompted me to search what the cost breakdowns were. IIRC, it was 25% of SS payments are for SSDI - disability.
Yes, the Govt is destroying the financial system.
Let’s imagine you make $200K/ year, but unfortunately you and the wife are spending $340,000/ year. And you’ve been running a deficit for many years so you’re $1,650,000 in debt. Not a bad salary, and since your boss is already paying you nearly 20% of his gross revenues he’s tapped out. Your only options are to cut cost or keep borrowing.
Your neighbor is not doing well so he’s also hitting you up for money. He can’t afford to borrow, he just needs free money. The problem is all the neighbors need money, and since you seem like the only one that has any, they’re all coming to you. What to do? If you cut the wife off she cuts you off. If you cut the neighbors off they’ll all hate you. If you just borrow some more money everybody’s happy, and your problems are gone for another year. 😃
Who in his right mind, who’s already in debt way over their head, whose income is already breaking his boss, whose expenses are completely out of control, would go borrow money to give to his neighbors free of charge, for any reason? Only the government of the U.S. of A. could possibly think that makes sense. The Congress and the President must get on the same page and get their expenses under control. As for the neighbors, they already think we’re stupid and they’ve never liked us so cutting them off is a no brainer. And the only solution for that huge hole, stop digging right now.
“I, too, am in favor of ANY solution to this difficult problem that does not affect me personally.”
I was going to mention that I’m also good with raising the rate (6.2% for employees), since it would probably be phased in after I retire.
With all the proposals like adding illegals to S.S. payments let’s put the blame where it belongs & cut the pay of the politicians at the same time the social security payments may have to be cut. After all, they caused it. Those drawing social security never got to vote on that money that was supposedly set aside for them....not to my knowledge anyway.
I’m one of those old,gray-haired recipients of S.S. who has in his day walked into that office. I worked 10 yrs later than I had to & paid into the system during that time, then finally actually retired(quit working entirely) mainly because I could not handle the 8 hours of being on my feet & working all day.
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