Posted on 07/14/2017 8:53:33 AM PDT by SeekAndFind
The government is out today with its annual update of Social Security’s sick finances:
--The system is $12.5 trillion under water, up from $11.4 trillion a year ago.
--Absent law changes, checks to retirees will have to be chopped 23% beginning in 2035.
--To fix just the retirement pay program, Congress could kick up the payroll tax by 2.8 percentage points. Fixing Medicare’s disastrous finances would be in addition.
--The retirement operation is running an $86 billion annual deficit. That’s the difference between the money coming in from Social Security’s share of payroll taxes (12.4% of covered payroll) and the money going out in monthly checks and in overhead.
Ponzi? That’s too kind an interpretation. A Ponzi scheme has old investors being paid off with money raised from new ones. In this case there isn’t enough cash coming in from new players to pay off the old ones. The $86 billion shortfall is being covered in traditional federal fashion, by drawing on general tax revenues and by printing money.
The trustees of the Social Security system put the grim news in as positive light as they can. They cheerily note that “asset reserves” grew from $2,813 billion at the end of 2015 to $2,848 billion at the end of 2016.
But these “reserves” are not a pile of saved capital in the form of stocks, bonds and mortgages. Rather, they are a bookkeeping entry in which the government borrows money from the government, and the government pretends to have “income” by collecting interest from…the government.
(Excerpt) Read more at forbes.com ...
Even before Obama was elected, SSDI was rife with fraud.
Estimates back then were 30 % of the roughly 6milllion SSDI enroll es were fraud of one form or another
When Obama was President he fraudulently enrolled 7. 5 million more able bodied American into SSDI, most right off the unemployment insurance rolls when their 99 weeks of extended unemployment checks ran out
Obama more than doubled the SSDI rolls while he was in office. He also doubled the National debt and the two are connected
As of Jan this year , the SSDI “Trust Fund” is fiscally depleted
It is impossible for a pay-as-you go program to be underwater. There is no crisis here. SS has always been funded by current taxes. Money is taken from today’s paychecks and sent out to today’s recipients.
To that simple transfer scheme has been layered on piles of lies and promises such earned benefits, trust funds, lock boxes, intergenrational trust, etc.. these things have been said and done by a political class to build a dependent class.
Future retirees will get their money from the same people that past and present retirees get their money, from today’s workers. The only unresolved questions are the political ones of payments vs taxes or retirees versus workers.
Spare the corruption lecture and the I earned it they didn’t lecture or the we was robbed by the crooked politicians lecture. SS was promoted by FDR to build a permanent Democrat beholden voter base. It has succeeded beyond his wildest dreams. It is and continues to be a successful program.
Several years ago AARP magazine had a main article on how the SS system was NOT a Ponzi scheme as all Ponzi schemes collapse. Because the SS system had not collapsed was “proof” it was not a Ponzi scheme.
A few pages later in the same issue was an article by Jane Bryant Quinn on how the SS system was set up. While she did not say the word “Ponzi Scheme” the description of the SS system was just like a Ponzi scheme.
Now think of this. It used to take about 19 people to support one retiree, now it takes three.
So, if you have thirty million retirees it will take 90 million to support them.
And when those 90 million retire, 270,000,000, and when they retire WOW!
It is like the old game of place a grain of rice on a checkerboard, then add three to the next square, then 9 to the next, then 27 to the next, and so on. Soon you have used up all the rice in the world.
FDR.
Yep, they no sooner got it then they started spending it.
Of course the headline is nonsense. There is enough money coming in to pay American retirees.
What there isn't is enough money to pay all the people who are getting crazy checks and grandma from China who never worked in the US.
But guess who they want to put the blame on?
Yep.
http://www.ontheissues.org/celeb/Lyndon_Johnson_Social_Security.htm
Raising marginal rates will decrease or hold Federal revenues the same year over year. Always has. Lowering tax rates increases Federal revenue. Always has.
I have it from a generally reliable source that under Obama if you applied for SSI, and you were black, you got rubber-stamped.
My source says that field level SSA employees feared being called on the carpet and potentially fired if they rejected a minority applicant.
When SS was first passed, the average life span for a man was 57 years. For women, 65.
Then came Penicillin and antibiotics and life spans increased. So did the draw down on the funds.
I’ll be dead by then, but here is my Plan for the next Generation.
If they want to extend the Scam, start adding one Month a Year before people can receive Benefits, including the “early” Benefit at age 62. Do it for Medicare as well.
Do this for 36 Years. Then the “early” Benefit moves up to age 65 and the “full” Benefit moves up to 70 with Medicare Eligibility starting at age 68.
That should extend the life of the Ponzi scheme. Life Expectancy has moved up over 20 Years since SS was started.
They should have started to notch up the Age 62 “early” Benefit when they did the SS overhaul under President Reagan, but they were Cowards.
That being said, when I applied for my SS at age 62, I didn’t actually receive my first payment until I was 62 and two Months old. Since I have Leukemia, I wasn’t about to wait until my so called “full” Benefit age of 66.
Dead people don’t collect (most of the time) though they might still Vote for Democrats.
I also knew at least four People who paid hundreds of thousands of dollars into to the SS System all and ended up dying before they got a dime back. Their Families got a $255 Check and that’s it.
Forget putting Social Security in a lock box. Put Congress in a lock box. We’ll be safer.
Correction from my previous Post.
I said: “Life Expectancy has moved up over 20 Years since SS was started”
Should be 15 or more Years depending on the Sex of the Individual.
Since people are living longer why not boost retirement age a few years? I fear the way they will solve the problem eventually will be to deny people who have other sources out income. Only the people who failed to gather their nuts will be rewarded with our nuts.
But the American workers are just not smart enough for hiring AND hiring foreigners means not having to pay employer taxes.
I think the only solution besides the simplistic and draconian “tax hike” is to phase out Social Security on a sliding scale based on one’s age or more precisely, based on how much one has already paid into the system.
But for illustrative purposes let me talk in age ranges.
So someone 66 and above down to maybe 55, would get 100% of what they’re entitled to based on what they’ve paid.
54 down to 45, maybe 50% of what the 100% get now or perhaps put better, what their annual benefit statement they receive from the SSA now is what they will get when they retire, whichever is greater.
44 down to 35, what their statement says they get or 25% whichever is greater. Etc.
All the way down to the last, youngest legal worker now. The same sliding scale.
Eliminate SS tax all together, dump SSD entirely, and throw everyone in SSD now onto Medicaid. (Or Medicare depending on age).
Raise the tax on Medicare to half what SS was before.
Pay everyone what they would have been due at retirement all at once in a lump sum (not accounting for interest) then dump the system entirely.
It’s the only way other than drastic tax hikes to keep the scheme alive during the boomer years. This way though we can get everyone off this addictive notion that the government should take care of you in retirement.
Just an idea.
It’s going to collapse though. Anyone my age (46) or younger shouldn’t count on it at all. If you haven’t saved enough yourself you better start (at least 10% of your gross pay) because those of us who have saved enough will not be bailing you out when the time comes.
And it will come. The time will come when the government passes a law to raid everyone’s IRA/401k to make a new “social security” system. They will dress it up with terms like “government security” and “equitable distribution”, but it will be the largest assault on the middle class seen, and the greatest insult will be that it will be sold as “protection for the working class”.
It’s coming you can take THAT to the bank. But those of us who have saved, will not be going quietly into that good night, I can assure you. Baby boomers aren’t the only ones well armed, but unlike them, we won’t have to take offensive action to take what is ours. We will only have to defend our hard earned living.
That’s when CW II is really going to start.
Not to mention the possible millions of elderly immigrants who never paid into the system, but are still receiving SSI benefits.
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