3 Reasons to Fix Social Security Now!

[haymarket]

The point is you cant. They will use their resources to stop you. Or they will move. Or they will do any of a hundred other alternatives to keep their taxes low.

No doubt a good fight will indeed happen. And resources on the side of the government are not without power. If people want to move, that is always their right. The government has ways to deal with tax exiles and can even pass new law to deal with such people.

 

[Federalist]

Raise the tax rate?
Raise the retirement age?
Privatize all or a portion?
Let people opt out?
Means test and make it a welfare program?

We should gradually reduce the social security benefit over time. We can't leave people in the lurch, the if we phase out social security over, say 50 years, people will be able to adjust. Also, at the end of that 50 years, nobody will have to pay social security taxes. They system will no longer be broken, because the system will no longer exist.

 

[cpwill]

Oh, we've only got 7 years left?

:shrug: I wouldn't be that specific, but depending on how we implement Obamacare.... roughly-ish. Then we will have to start making sudden, drastic alterations to our entitlement programs of the "sorry-grandpa-but-you-just-aren't-going-to-get-what-we-promised-you" nature.

We can change the programs now and do so in a manner that we control and in a manner so as to protect the most vulnerable among us.... or we can change the programs later and do so in a manner controlled by events and sure to fall most heavily on the most vulnerable.

The first option is responsible, but difficult. The second is disastrously irresponsible, but easy. Guess which one we are going to pick.

After Obama, won't some future Conservative take over and rescue America? Maybe they can print up a few trillion and save the day?

No. A dollar is not value. It is a storage unit of value, and can have its' value increase or decrease. The United States is not quite, but almost in a Zero Interest Rate Policy Trap, where any increase in our cost of borrowing (such as would come through attempting to monetize the debt) quickly spirals out of control. They don't call it the "Dismal Science" for nothing.

The dollar bill is America's #1 product you know. Just because the politicians have "borrowed" SS funds doesn't mean those same yahoos can't or won't create the money they need. Look at all they've created so far!

As a businessman, the MO is just bizarre to me. And to you. Because we are logical. We are not run by logic though, it's a totally different reality that the USG operates under.

Of course, I could be wrong. Maybe SS and Medicare will vanish in 2020. Or maybe they'll means test them and kick me to the curb. Remember, when I was your age I didn't expect either of these programs to still exist. Maybe we'll be forced into the Libertarian Dream. I'll just have to wait and see.

Means testing will probably be a big part of it. Once it becomes clear to a significant enough portion of our political left that we have to reduce expenditures, that is where they will wish to to do. It's just a matter of how long that takes.

 

[cpwill]

Whether you cut other services or increase taxes, you are asking the workers to make a sacrifice for you. Workers will look back, and see that retirees who were voters at one time were not will to put a dime of their own money into the pot. They were only willing to spend other people's money, the remove the cap crowd. They wanted to raise the cap to pad their retirement account, instead of controlling the debt.

They were willing to spend on themselves, and leave the cost to future workers. Keep in mind SS only lasts until 2033 if interest rates normalize. SSA's projections are based on interest rates returning to 5.6% by 2015. Interest costs would be nearly 2 trillion dollars. So interest burden will eat-up most of the government services anyway.

Those are both excellent points. If interest rates go back to 5.6%, the ability of the government to pay out SS and Medicare is eaten up by paying net interest on our debt. There is literally not enough money in the world at that point for us to be able to meet our obligations.

Well played, baby boomers. Really well done.

 

[Woodman909]

As I approach the age where I can start taking SS Retirement benefits, I am sorry that I never had the "freedom" to "choose" between my own private investments vs SS mandates. I would not have gambled in the stock market, rather look for solid returns. I would at least be able to receive back what I put into it. As it is, what I expect to get will be far far less than what I put in. For people who are not comfortable with investing or managing their savings, then by all means stick with SS. But we should have had the freedom to make the choice.

 

[JoeTheEconomist]

:
Means testing will probably be a big part of it. Once it becomes clear to a significant enough portion of our political left that we have to reduce expenditures, that is where they will wish to to do. It's just a matter of how long that takes.

Social Security is already means-tested, with a test that reaches up to 1/3rd of retirees. So it is already a big part, and there isn't much leverage left.

 

[specklebang]

I'll guess that the easy one will prevail. The entire monetary system is thoroughly detached from reality and operates on what I'll call the unicorn effect. Money is real, it is completely perception driven. When the debt hit a billion and then a trilion and then 10 trillion and it all kept functioning, it's clear that the unicorns are already here.

Aren't unicorns immortal?

It's pretty clear (to me) that our future will only see more programs as we come to realize that we are now just a part of a global economy. But our dollar makes the globe spin and nobody can harm it without harming themselves.

:shrug: I wouldn't be that specific, but depending on how we implement Obamacare.... roughly-ish. Then we will have to start making sudden, drastic alterations to our entitlement programs of the "sorry-grandpa-but-you-just-aren't-going-to-get-what-we-promised-you" nature.

We can change the programs now and do so in a manner that we control and in a manner so as to protect the most vulnerable among us.... or we can change the programs later and do so in a manner controlled by events and sure to fall most heavily on the most vulnerable.

The first option is responsible, but difficult. The second is disastrously irresponsible, but easy. Guess which one we are going to pick.



No. A dollar is not value. It is a storage unit of value, and can have its' value increase or decrease. The United States is not quite, but almost in a Zero Interest Rate Policy Trap, where any increase in our cost of borrowing (such as would come through attempting to monetize the debt) quickly spirals out of control. They don't call it the "Dismal Science" for nothing.



Means testing will probably be a big part of it. Once it becomes clear to a significant enough portion of our political left that we have to reduce expenditures, that is where they will wish to to do. It's just a matter of how long that takes.

 

[JoeTheEconomist]

As I approach the age where I can start taking SS Retirement benefits, I am sorry that I never had the "freedom" to "choose" between my own private investments vs SS mandates. I would not have gambled in the stock market, rather look for solid returns. I would at least be able to receive back what I put into it. As it is, what I expect to get will be far far less than what I put in. For people who are not comfortable with investing or managing their savings, then by all means stick with SS. But we should have had the freedom to make the choice.

Social Security is insurance not an investment. One manages risk, and the other accumulates wealth. That might sound similar, but it is more like bacon and eggs. They go together. Living past the point where you can work is a massive expense. You share that risk just like you do with auto or health. It provides supplemental income. It is not a retirement account.

If you are 60 or younger, you probably did pretty well. If you were a maximum wage worker, you may have lost something on the deal. The people entering the system today have very different terms. If SS is important to your retirement, you ought to make it a voting priority.

 

[JoeTheEconomist]

We should gradually reduce the social security benefit over time. We can't leave people in the lurch, the if we phase out social security over, say 50 years, people will be able to adjust. Also, at the end of that 50 years, nobody will have to pay social security taxes. They system will no longer be broken, because the system will no longer exist.

Phasing it out is a lot harder than you might think. On one hand, we are voting to eliminate the benefits of people who can't vote while expecting them to contribute for 45 years. Something tells me that isn't going to work-out very well. Every year you are adding people to the pool who have no incentive to keep the system going at all.

 

[Woodman909]

Social Security is insurance not an investment. One manages risk, and the other accumulates wealth. That might sound similar, but it is more like bacon and eggs. They go together. Living past the point where you can work is a massive expense. You share that risk just like you do with auto or health. It provides supplemental income. It is not a retirement account.

If you are 60 or younger, you probably did pretty well. If you were a maximum wage worker, you may have lost something on the deal. The people entering the system today have very different terms. If SS is important to your retirement, you ought to make it a voting priority.

INSURANCE???? You must be joking. SS is an even worse deal if you want to spin it as an insurance policy. You think SS has NOT been a voting priority for me over the years? The only bright spot in this , is that the young people now can really see what a terrible system SS is and they best find other baskets to keep their eggs. Politicians from all parties have made it not only their cash cow (lock box my ass) but a means to harness the votes of seniors they continually scare with loss of benefits. Government (via politicians) has labeled this a 'Retirement account' and an 'investment' since it's inception. So regardless what you care to call it, the deal sucks. We should be (in my case should have been) given a choice between 'insurance' and investment.

 

[cpwill]

That is utterly without any foundation. By your own charts the worst year has a shortfall of 344 billion. That will not even be 10% of federal revenues that year. The government could cover that shortfall and still have 90% of revenues remaining to run its business.

The numbers simply do not support your dire predictions.

:doh

1. By my charts the shortfall in 2035 is $344 Bn - it goes lower from there.

2. That is the shortfall, not the cost of Social Security.

3. We also do lots of other stuff with our budget. For example, we are required by the Constitution to make good on our Debt, and we have a program called Medicare. So what does it look like when you add in net interest on the debt plus the other entitlements?

It looks like that. So. As I said. Sure, we can fully fund Social Security. So long as we are willing to get rid of Medicare.

 

[haymarket]

:doh

1. By my charts the shortfall in 2035 is $344 Bn - it goes lower from there.

2. That is the shortfall, not the cost of Social Security.

3. We also do lots of other stuff with our budget. For example, we are required by the Constitution to make good on our Debt, and we have a program called Medicare. So what does it look like when you add in net interest on the debt plus the other entitlements?

Point 1 and 2 is exactly what I said.

As to point 3, yes, we must pay our debts. So lets do that. And we pay outstanding bills first before we go incurring new ones. That is the conservative approach to money management.

 

[cpwill]

Point 1 and 2 is exactly what I said.

As to point 3, yes, we must pay our debts. So lets do that. And we pay outstanding bills first before we go incurring new ones. That is the conservative approach to money management.

I would love to pay down debt instead of rolling it over. Unfortunately, your proposals (and you continue to ignore this) require not funding Medicare. Are you willing to address that?

 

[Dooble]

3 Reasons to Fix Social Security Now! - Reason.com

Common sense article from Reason. Really this is a broken record. Social Security has been headed downhill for decades, with the date where it will be unable to pay benefits closely approaching. It already takes in less than it pays out, and is cashing in bonds from the Treasury, which is also taking in less than it pays out. Lowering the payroll tax a couple years ago made it worse. And Im ignoring the fact that its unconstitutional in the first place.

Regardless, whenever someone tries to fix it, Democrats cry foul and use it as a wedge issue. Yet they propose little of their own. So, what solutions are you liberals willing to accept that conservatives also agree with?

Raise the tax rate?
Raise the retirement age?
Privatize all or a portion?
Let people opt out?
Means test and make it a welfare program?

Privatize it or make it go away.

 

[jonny5]

No doubt a good fight will indeed happen. And resources on the side of the government are not without power. If people want to move, that is always their right. The government has ways to deal with tax exiles and can even pass new law to deal with such people.

And how has that worked?

 

[haymarket]

And how has that worked?

By what scale of measurement and evaluation?

 

[head of joaquin]

Those are both excellent points. If interest rates go back to 5.6%, the ability of the government to pay out SS and Medicare is eaten up by paying net interest on our debt. There is literally not enough money in the world at that point for us to be able to meet our obligations.

Well played, baby boomers. Really well done.

Pssst: baby boomers will mostly be dead by 2036, and the next cohort, the Xers and Millennials are much smaller, requiring smaller payouts.

Sorry, your hope for the collapse of the nations safety net just isn't going to happen.

 

[JoeTheEconomist]

INSURANCE???? You must be joking. SS is an even worse deal if you want to spin it as an insurance policy. You think SS has NOT been a voting priority for me over the years? The only bright spot in this , is that the young people now can really see what a terrible system SS is and they best find other baskets to keep their eggs. Politicians from all parties have made it not only their cash cow (lock box my ass) but a means to harness the votes of seniors they continually scare with loss of benefits. Government (via politicians) has labeled this a 'Retirement account' and an 'investment' since it's inception. So regardless what you care to call it, the deal sucks. We should be (in my case should have been) given a choice between 'insurance' and investment.

It hasn't been a voting priority for anyone. In the last election we had two candidates who agreed on one thing : Social Security is structurally sound. They talked about tweaks.

It is a worse deal as an investment. It cannot even be passed through inheritance.

If you give anyone today an option, everyone will flee. How will you pay for benefits to existing retirees? Or will you tell them to pound sand.

 

[JoeTheEconomist]

:doh

1. By my charts the shortfall in 2035 is $344 Bn - it goes lower from there.

What is your source of information? The trustees project the financing gap over 75 years to be 10 trillion dollars. When you look at the infinite shortfall it is 23 trillion. That doesn't look to get better.

 

[cpwill]

What is your source of information? The trustees project the financing gap over 75 years to be 10 trillion dollars. When you look at the infinite shortfall it is 23 trillion. That doesn't look to get better.

Lower = further down into the negatives. It was a reference to the visuals of the chart.

 

[haymarket]

There simply is no political will to end Social Security.

There simply is no political will to allow benefits NOT to be paid in the future even if it means taking 10% of the rest of the budget and allocating it for the shortfall.

That is reality. And without that political will, all the charts we have been presented with and all the projections we have heard about and all the analysis we have read matter for nothing.

 

[head of joaquin]

There simply is no political will to end Social Security.

There simply is no political will to allow benefits NOT to be paid in the future even if it means taking 10% of the rest of the budget and allocating it for the shortfall.

That is reality. And without that political will, all the charts we have been presented with and all the projections we have heard about and all the analysis we have read matter for nothing.

Conservatives can always hope for a complete mental breakdown of the American people in order to get their way. Short of that, they have no hope on this issue.

 

[jonny5]

There simply is no political will to end Social Security.

There simply is no political will to allow benefits NOT to be paid in the future even if it means taking 10% of the rest of the budget and allocating it for the shortfall.

That is reality. And without that political will, all the charts we have been presented with and all the projections we have heard about and all the analysis we have read matter for nothing.

True, but thats why Im trying to get liberals to define what is acceptable to them. As you can tell from this thread, few are willing to even have a conversation. Without explaining why I can only assume they dont care, are ignorant of the topic, or dont wish to remove it as a wedge issue.

 

[haymarket]

True, but thats why Im trying to get liberals to define what is acceptable to them. As you can tell from this thread, few are willing to even have a conversation.

I can only speak for myself. If we popped the cap on FICA income limits to be taxed, I would accept a ten year freeze on benefit levels.