When it looks like it's about to crash, something will be done to save it. Seniors, after all, vote.
Yeah. We'll cut benefits and raise taxes, "saving" the program by making it worse
Seniors get a vote. So does mathematical reality. If you write a check for more than is in your account, it's going to bounce, no matter how much you stamp your feet and demand that it not.
Raising taxes always fixes the problem, doesn't it?
Anyway, lots of politicians seem to think so.
Social Security is pay-as-you-go, and already doesn't produce enough revenue to cover current benefits. Plus, 10% of payroll taxes go to Medicare.Allow workers to opt into a partially privatized system, where of their 7.65% FICA expenditures, 5% goes into a private TSP-style account; and the Employers match follow the same.
You just punched a 65% hole in revenues, and increased the gap by 350%. Eliminating the cap claws back 75% of the gap. So that's 275% to go.To ensure solvency in the adjustment period (and to make it politically palatable); lift the cap.
Uh huhThe 10% of his income goes into a mix of funds that matches the S&P 500 Combined Annualized Growth average since 1982: 7.98% (after you account for inflation)....
Sure. It just takes a few years.BUT WAIT!!! WHAT IF THE MARKET TANKS!!! Markets recover.
In that scenario, it'll take 20 years or more -- and put the federal government in the red for $6 trillion in current USD --
$50k income, age 30, retiring 65, saving 10% of income, living on 75% of current income, maxing calc out at 10% = income of $2354
The scheme might work... if the program basically forces the investor into a no-fee index fund or ETF, and balances automatically to move into bonds as they get older, and prevents the investor from touching anything until retirement
The average investor pretty much sucks, typically netting a 2% return. This is in no small part because people panic-sell
if you grant Joe unrestricted access to $1 million on retirement, he's going to blow it on a Maserati and a yacht.
It also means that if the markets drop, so will senior spending, as their income that year will go down. Needless to say, if that market drop is connected to a recession, that's going to compound the economic downturn. Alternately, because seniors lose their collective minds when their benefits drop, they might force the government to do a supplementary payment. Who pays for that?
And again, if you run through your funds, then what?
You're back on a defined benefit, and... we are collecting far less in payroll taxes.
• Getting there will be incredibly expensive.
It will make the "insolvency" problem worse, for years and years, before it gets better.
• We'd need extremely strict controls in place.
Undefined benefits mean that in a given year, millions of seniors could have a lower income all at the same time
Keeping any sort of guaranteed income in place creates harmful incentives.
You can't fix a Ponzi scheme.
You are confused. The Alt-Right are motivated not least by a refusal to acknowledge or deal with Social Security's structural problems. The Classic Conservatives are the ones trying to find a way to fix this system.You're right, Wall Street can't be fixed, least not till they are held accountable. We were talking about Social Security though.
"Ponzi" doesn't mean what you think it does. You do know your erroneous and irrelevant conservative talking points though. The alt-right programming is working!
You're right, Wall Street can't be fixed, least not till they are held accountable. We were talking about Social Security though.
"Ponzi" doesn't mean what you think it does. You do know your erroneous and irrelevant conservative talking points though. The alt-right programming is working!
Nice try. We all know what we're talking about. Lying, thieving liberals who can't discuss SS so they want to go to Wall Street. You've passed your class in distraction, change the subject. Now, suck up the the elites and see what it gets you.
I'm sorry. I just realized as a devout liberal, MarkJS never learned what a Ponzi scheme is.
Mitchell Zuckoff, a Boston University journalism professor who has written a book on Ponzi, noted three critical dissimilarities between Social Security and a Ponzi scheme. We will summarize Zuckoff’s comments from an earlier fact-check:
• "First, in the case of Social Security, no one is being misled," Zuckoff wrote in a January 2009 article in Fortune. "Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns."
• Second, he wrote, "A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted." While Social Security faces a huge burden due to retiring Baby Boomers, it can be and has been tweaked, and "the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing."
• Third, Zuckoff wrote, "Social Security is morally the polar opposite of a Ponzi scheme. ... At the height of the Great Depression, our society (see 'Social') resolved to create a safety net (see 'Security') in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones. That might rankle, but it's not fraud."
Of Zucks three points, the first two are incorrect, and the third boils down to "I like one, but not the other". Just pointing out.Only programmed conservatives call it that, because anything that benefits anyone but you is suspect. Selfishness is at the very core of conservatism. Take all that you can, give NOTHING. Regard for the environment, or damaging the welfare of others is weakness.
Yep a ponzi scheme, in your mind, but that's quite divorced from reality, clearly.
Surely a complete waste of time on one so thoroughly programmed as you, but maybe other readers will appreciate:
You argument was invalid and ludicrous on it's face. Epic fail.
As I demonstrated exhaustively, this is fearmongering and historical illiteracy that can be (and has been) repeatedly destroyed by fairly simple math, and basic reading comprehension. Come back and make this complaint when any numbers back you up, and when you have actually bothered to read the proposal you are responding to.I further have to ask, when we have shown an absolute commitment to NOT holding Wall Street accountable, how can you feel safe putting this in their hands?
There's no incentive not to play the line and be fraudulent. Sure we slap them with a fine, but even so they make more on their scams than they get fined, so the incentive is to continue the fraud.
Yes, we do have the option of not screwing people who have already reached retirement age. Anything else, as I already called it out -- is confiscatory crap! That's exactly the kind of nonsense that wrecked Crusader Rick Santorum's campaign in 2012, and it has already contributed quite a bit to the death-spiral that both Jeb Bush and Butter-tub Christie have experienced in the Republican race this cycle.
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Could not vote since I am an Independent, but I am against the suggestion. Just put back what was Borrowed.
There are ways to get the money back, it will just take a little pain.Too Late. The Boomers Spent it already, and now costs are spiraling out of sustainability.
There are ways to get the money back, it will just take a little pain.
:shrug: Social Security is already running an annual deficit because of it, and is scheduled to do so as far as the eye can see. The current projections that have everybody who retires today currently scheduled to outlive their benefits are built on the assumption that it is all paid back. So that money that you are hoping to save the system is A) already built into the projections (and it isn't enough) and B) not coming.
The reason people outlive their benefits is because we were busting our asses at <$2.00/Hr.
Inflate that amount to today's money and most won't live that long. A nickel is now more than a dollar. By far.
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