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Social Security not as broke as we thought

Hoplite

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Will Social Security be there for today’s young workers? | Analysis & Opinion |
The doubts aren’t difficult to understand. “If you listen to any number of the news outlets, they’ll tell you the system is going broke,” says Brown. “Every year I get a mailing from Social Security detailing what I can expect in benefits, and they say themselves that it will be bankrupt around 2040 and that they are going to be paying out more than we’re paying in. So it’s not fear, it’s math.”

But Social Security isn’t going bankrupt — far from it. The system was intended — and has always been — a pay-as-you-go system, with taxes collected from workers used to pay current retirees. But Social Security also is sitting on a $2.5 trillion Social Security Trust Fund (SSTF) that has been stockpiled to fund the looming wave of baby boomer retirements; that fund is projected to be sufficient to pay benefits until about 2037.
An interesting take
 

BWG

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Article said:
Pessimism about Social Security among the young isn’t new. “It’s a very longstanding trend,” says Virginia Reno, vice president for income security at the National Academy of Social Insurance. “It was true in a survey we did in 1979, and another in 1991.
This is quite true. When I first began my career, one of my mentors (He was on the board of directors for our credit union and I was young so I listened) took me aside and said 'save all you can because SS may not be there when I retire and it damn sure won't be there when you do'. I took him, and others, at their word and saved every which way I could. Contributed the max in every plan offered, as well as something as simple as a plain old saving account at my credit union. Got lucky in some investments and did good on others.

Long story short, I retired comfortably at a young age and will have more than a couple of grand 'extra' per month when I become eligible for SS in the coming years.

Don't go running for cover in the SS scenario of chicken little, but be prepared just in case. There may be a little treat waiting for you at the end.


Also noted the poll (since the cons seem to really be interested in the polls lately) as to whether SS should be changed significantly to reduce the national debt, 77% said "Leave Social Security Alone". Listen to the people. Right?...:lol:
 

Ockham

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Until Social Security is detached from the Treasury - it will continue to be a burden on this country. The countermeasures used to keep it afloat are nothing more than fingers plugging the leaks in a dam ready to break. According to a few sources the Treasury had to borrow 15 out of the last 25 months to pay out Social Security. It's been used as a credit card for a long time and there's no quick fix.

Allan Sloan - Social Security, the trust fund and funny money
 

CriticalThought

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It's nice to know we are screwed but we aren't completely screwed until 2037.
 

Goof Noodle

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I was going to read the article, but I saw it was written by a ginger. Did the ginger mention anything about all the IOUs that have been written for the money taken out of SS? Probably not
 

pbrauer

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Until Social Security is detached from the Treasury - it will continue to be a burden on this country. The countermeasures used to keep it afloat are nothing more than fingers plugging the leaks in a dam ready to break. According to a few sources the Treasury had to borrow 15 out of the last 25 months to pay out Social Security. It's been used as a credit card for a long time and there's no quick fix.

Allan Sloan - Social Security, the trust fund and funny money
Social Security is not 'attached' to the Treasury, FICA funds are use to buy Treasury Bonds, those funds are put into the Treasury. If you buy Treasury Bonds, the same thing happens with the dough.
 

Kernel Sanders

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But Social Security also is sitting on a $2.5 trillion Social Security Trust Fund (SSTF) that has been stockpiled to fund the looming wave of baby boomer retirements; that fund is projected to be sufficient to pay benefits until about 2037.
This is technically true but meaningless. The government has been "borrowing" from social security from years. So there isn't $2.5T in cash sitting in an account somewhere, there's $2.5T in IOU's where the US government owes the US government.
 

cpwill

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cpwill

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SS will have to be ditched soon if we want to pay off our debt
ditched? i don't know if it can be. means tested certainly. also tied to lower growth rates, such as inflation, rather than COLA.

the real gorilla in the room is Medicare.
 

haymarket

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simple math
pop the $106K cap on taxable income for FICA contributions
problem is solved
 

Taboon

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It's nice to know we are screwed but we aren't completely screwed until 2037.
When am I retiring? Oh yeah, right around 2037. Well, looks like I'll keep pumping money into my 401k. Anyway, Social Security is less of an issue than Medicare & Medicaid. We're paying out three times as much as we are bringing in on that program. Anyone else see an issue with this?
 

Taboon

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ditched? i don't know if it can be. means tested certainly. also tied to lower growth rates, such as inflation, rather than COLA.

the real gorilla in the room is Medicare.
You've got that right. Something major needs to be done with Medicare/Medicaid.
 

ptif219

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There is no trust fund. LBJ took care of that


Social Security History FAQs Internet Myths II

Q1. Which political party took Social Security from the independent trust fund and put it into the general fund so that Congress could spend it?

A1: There has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government. The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

Most likely this question comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no effect on the actual operations of the Trust Fund itself.
 

pbrauer

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Social Security History FAQs Internet Myths II

Q1. Which political party took Social Security from the independent trust fund and put it into the general fund so that Congress could spend it?

A1: There has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government. The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

Most likely this question comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no effect on the actual operations of the Trust Fund itself.
Emphasis added.
 
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TOJ

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You've got that right. Something major needs to be done with Medicare/Medicaid.
Haven't you heard? ObamaCare fixed that. ;)

.
 

Black Dog

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Social security is broken if for no other reason than I say so.

/Thread :2razz:
 

pbrauer

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Yet it is full of IOU's from congress because they see it as a slush fund
You said there was no SS Trust Fund, then you quote from the SS administration which says you are full of ****. I'm loving it.

Get this concept through your head, U.S. securities are not IOU's and that's what the SS Trust fund is - Treasury securities - and are guaranteed as to both principal and interest by the Federal government.
 

ptif219

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You said there was no SS Trust Fund, then you quote from the SS administration which says you are full of ****. I'm loving it.

Get this concept through your head, U.S. securities are not IOU's and that's what the SS Trust fund is - Treasury securities - and are guaranteed as to both principal and interest by the Federal government.
Congress spends the money

Stopping the Social Security Raid - March 20, 2007 - The New York Sun

President Bush explained this pretty well in a speech in 2005: "You pay your payroll tax, we pay out to current retirees, and then we spend your money on other government programs."

In 2006 this thievery reached a milestone, passing the staggering number of $1 trillion used for programs other than Social Security since 1983. And that's not including interest. That enormous amount of money has allowed both parties in Congress to fund innumerable wasteful programs and pork-barrel projects while concealing the size of the deficit.

Social Security is expected to remain in cash-flow surplus for the next decade, and the raid is scheduled to continue. Under present law, Congress will raid Social Security funds to the tune of $693 billion over the next decade, not including interest. If a tax-increase deal did come together, it would amplify the size of the larceny while doing nothing to make Social Security a better deal for workers.
 

TOJ

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You said there was no SS Trust Fund, then you quote from the SS administration which says you are full of ****. I'm loving it.

Get this concept through your head, U.S. securities are not IOU's and that's what the SS Trust fund is - Treasury securities - and are guaranteed as to both principal and interest by the Federal government.
Could you please explain to me the difference between an IOU and a security?

.
 

pbrauer

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Could you please explain to me the difference between an IOU and a security?

.
An IOU is a promissory note, a security is actually an asset and payable upon demand. Daily FICA inflow is used to buy securities and the money is put into the Treasury, when benefits are paid money from the Treasury is used pay the SS administration for the securities they hold. The resulting monies are distributed as benefits.

If they were IOU's, they could remain that way forever and never paid. The claim that the SS Trust fund is a bunch of worthless IOU's is BS.
 

washunut

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An IOU is a promissory note, a security is actually an asset and payable upon demand. Daily FICA inflow is used to buy securities and the money is put into the Treasury, when benefits are paid money from the Treasury is used pay the SS administration for the securities they hold. The resulting monies are distributed as benefits.

If they were IOU's, they could remain that way forever and never paid. The claim that the SS Trust fund is a bunch of worthless IOU's is BS.
Sad that everyone laughed at Gore in 2000 when he talked about a social security lock box. I sure wish we had that now.
 
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