Social Security's Risk-Free Guaranteed Return

[cpwill]

Greetings, Gaius46. :2wave:

Since SS was set up as a form of savings account,

This is unfortunately incorrect - SS is not a form of savings account, as your monies are not saved, but rather immediately spent. SS should be turned into a forced savings account, but for the last three quarters of a century or so we've pretty much just depended on people consistently having enough kids to keep the ball rolling.

and since workers have their "contributions" taken from their paychecks whether they like it or not, isn't it their own money being slowly returned to them monthly when they retire?

Nope. They are getting the next generations' money at that point.

Since politicians have taken millions of dollars from SS over the years for their pet projects, and left IOUs in return, how is that the workers' fault if the fund is now in arrears?

Because they voted the politicians into office, and refused to listen to years and years of warnings that they were screwing themselves long term in order to avoid having to make hard choices?

When you are told that - mathematically - Policy X will give you Result Y, and you support Policy X for 40 years, you don't get to them claim innocence in suddenly discovering that you are facing Result Y. You made your own choice.

 

[haymarket]

No, but it's rulings are binding on the US government, which includes the Social Security Administration.



No, but it's rulings are binding on the US Government, which includes those who do manage the funding of the Social Security program.

So what? Unless you have a ruling from the Supreme Court which bars the Congress from exercising its Constitutional powers to fund the program - you got zip, nothing, nada.

That is correct. However, it is also a non sequitur. Either our government will change Social Security in a way that allows us to protect poorer seniors with a sustainable program, or math will change it for us in unpredictable and significantly more damaging ways.

You forgot something. Congress can change the math.... you know - the so called "mathematical realities" that you side alludes to but does not produce.

On the contrary, the point that SCOTUS has clearly ruled that you do not have a right to a Social Security payout is extremely relevant.

Until Congress votes to NOT fund Social Security or to cut Social Security - thats just words on a paper which mean nothing in everyday reality as what is happening. And the hard and cold political realities prevent Congress from taking that action.

Ah. "Law" was anti-SS, and now describing how the Social Security system functions is "Ageist".

I have no idea what that means.

The program has functioned for three quarters of a century. But now, society has changed, our situation has changed, and so the program is increasingly creaking, tottering, cracking, and unsustainable. If we want it to survive for another three quarters of a century or three centuries, we need to change it to allow it to do so. It hasn't, as near as I can tell, made us a better people, if anything, slightly the opposite, as it has encouraged each of us to try to enrich ourselves at the expense of others.

You have FAILED to prove any of those claims.
And your doom and gloom prognosis fails to take into the consideration that then numbers can be changed as to how much money is available to pay these promised benefits. Six words take care of the lions share of the problem - POP THE CAP WHILE FREEZING BENEFITS.

:shrug: I wouldn't know exactly where Joe is going with that. However, the point that current generations should not put future generations in debt is well-made. That is the opposite of what each generation in America is supposed to do - we are supposed to leave our children better off than we were, not expect them to live in debt bondage so that we can avoid the consequences of our own decisions.

How do you think World War II was paid for? Get real.


What was the old anti-Iraq slogan? Not In My Name?



:shrug: my role at current is fairly limited. But one of our major two parties has decided to be the adult in the room on this issue, and even wise Democrats admit that eventually someone will have to fix our system. We'll get there. Hopefully sooner rather than later.

 

[haymarket]

Congressional Budget Office on Social Security
Congressional Budget Office on Social Security Disability Insurance
Congressional Budget Office on Medicare
International Monetary Fund: US Sustainability Report
President Obama's Bi-Partisan Commission

Or, if you need something less "government":

Nate Silver's 538 Blog: What is Driving the Growth in US Spending?
Alice Rivlin: Social Security is not in sound fiscal shape and fixing it now means avoiding more dramatic adjustments in the future
Brookings Institute: Entitlement Reforms are necessary NOW and waiting is shortsighted and irresponsible
Fiscal Times: CBO Warns Entitlement Spending is Unsustainable
Institute for Policy Innovation: Unsustainable Entitlement Spending pushing US towards Cliff

Etc. so on and so forth. Enjoy reading.

Well, you wont'. But enjoy trying to justify why you won't read.

What specifically in that massive information dump shows that the money will not be there to pay our Social Security obligations? I have read these things before and have not seen one thing which says the government could not pay the promised benefits. Not one thing.

So be specific. You have FAILED again to cite that with verifiable evidence that there will not be money there to uphold the governments end of the bargain that the people have kept and honored.

 

[SenorXm/Sirius]

I don't think some here understand just how much of a political suicide it would be, not for a single politician, but a whole party if they even mention stopping SS.

Hell, even talking about tweaking it to fix it is taboo. Imagine saying were going to shut it down, or 100% privatize it. Many Republican voters are on SS, or close to SS age. They sure as hell won't touch it, and the Dems sure as hell won't either.

It's all talk, they talk about doing something, they scare people with dire predictions, they point fingers, but when push comes to shove neither side has the balls to even fix it let alone can it.

 

[haymarket]

You're a braver man than I.

Thank you.

 

[haymarket]

You're a braver man than I.

I simply have faith in the goodness of the American people and their values.

 

[JoeTheEconomist]

Greetings, Gaius46. :2wave:

Since SS was set up as a form of savings account, and since workers have their "contributions" taken from their paychecks whether they like it or not, isn't it their own money being slowly returned to them monthly when they retire? I don't understand the problem here. Since politicians have taken millions of dollars from SS over the years for their pet projects, and left IOUs in return, how is that the workers' fault if the fund is now in arrears?

SS was never a savings account. And the point of the article is that no it isn't their own money - and the SCOUS says so. If you don't understand the problem, it is likely because you believe that politicians have taken millions of dollars from SS for their pet projects. The system is a paygo system which for decades promised dollars of benefits for dimes of cost - that is why it is in arrears.

It is the voter's fault because they are not paying attention.

 

[polgara]

This is unfortunately incorrect - SS is not a form of savings account, as your monies are not saved, but rather immediately spent. SS should be turned into a forced savings account, but for the last three quarters of a century or so we've pretty much just depended on people consistently having enough kids to keep the ball rolling.



Nope. They are getting the next generations' money at that point.



Because they voted the politicians into office, and refused to listen to years and years of warnings that they were screwing themselves long term in order to avoid having to make hard choices?

When you are told that - mathematically - Policy X will give you Result Y, and you support Policy X for 40 years, you don't get to them claim innocence in suddenly discovering that you are facing Result Y. You made your own choice.

Greetings, cpwill. :2wave:

Is there any company in America that refuses to follow federal law on taking SS out of their workers' pay? I doubt it. Why doesn't the SS administration just issue a check to the worker when they retire for all the money they have paid in and be done with it? I agree that the extraordinary amount of Boomers retiring is a problem currently, but they have had those figures for years, so it's not a surprise. Now they're talking about "means testing" to determine if a retiring worker really needs the money? WTH difference does that make - it's still their money that was taken from them involuntarily while they were working! Do government promises mean nothing, or is this another case of "kick the can down the road" because of lack of foresight on their part? We sure seem to have money available for giving away to countries that hate us, but not for our own people? And this administration is talking about giving SS payments to illegals who have never paid one cent into SS? Unbelievable! :thumbdown:

 

[cpwill]

So what? Unless you have a ruling from the Supreme Court which bars the Congress from exercising its Constitutional powers to fund the program - you got zip, nothing, nada.
You forgot something. Congress can change the math.... you know - the so called "mathematical realities" that you side alludes to but does not produce.

:shrug: I gave you the relevant data. You are free to read or refuse to read it.

As for Congress changing the math - that is precisely the relevance of the SCOTUS decision. Since you do not have a right to a Social Security payout, Congress is free to adjust the math as needed in order to ensure that the program remains sustainable.

Until Congress votes to NOT fund Social Security or to cut Social Security - thats just words on a paper which mean nothing in everyday reality as what is happening. And the hard and cold political realities prevent Congress from taking that action

:shrug: colder, harder, mathematical realities are going to ensure that it happens regardless.

I have no idea what that means.

I described how Social Security functions, you declared it to be "ageist". I found it entertaining.

You have FAILED to prove any of those claims.

:shrug: In fact I gave you pages and pages of the evidence, but you refused to read them (see below)

And your doom and gloom prognosis fails to take into the consideration that then numbers can be changed as to how much money is available to pay these promised benefits. Six words take care of the lions share of the problem - POP THE CAP WHILE FREEZING BENEFITS.

:shrug: sure - reducing benefits over time by reducing their growth rate will reduce expenditures. Popping the cap, however, only creates new liabilities, as we owe money for the money we are taking in. So it's less of a help unless you are willing to additionally means-test the benefit. You additionally will get less revenue than you planned for due to the effects on incentive structures.

But that loss of growth in benefits effects the poor the most when done universally - you could think of it as functioning similarly to a flat tax. That's not fair and it's not the purpose of our system (to protect seniors from poverty once they are no longer able to support themselves). So in that context, we need to reduce payouts to upper-income earners in order to protect lower-income earners.

How do you think World War II was paid for?

WWII was a short term emergency, and once it was done, we "paid" for it partly by slashing the federal budget by 75%.

What specifically in that massive information dump shows that the money will not be there to pay our Social Security obligations? I have read these things before and have not seen one thing which says the government could not pay the promised benefits. Not one thing.

Evidently you haven't read those things, because that is, in fact, precisely what they say. As Joe is fond of pointing out, every individual retiring today is currently scheduled - according to the government projections - to outlive their benefits.

Wait. You do know what the definition of "unsustainable" is... right?

 

[cpwill]

Greetings, cpwill. :2wave:

Is there any company in America that refuses to follow federal law on taking SS out of their workers' pay? I doubt it

Some employees can be exempt. Up until the end of the 80s, for example, local government officials could opt out, and those with religious objections that are employment-based can do so (pastors, members of the Amish community, etc).

Why doesn't the SS administration just issue a check to the worker when they retire for all the money they have paid in and be done with it?

because they don't have the money. They spent it all. They have to pay in installments because they are taking the paycheck-by-paycheck pay-ins from current workers to pay off current retirees, and we're not even able to make that system work anymore, which is why we are having to draw from the General Fund.

I agree that the extraordinary amount of Boomers retiring is a problem currently, but they have had those figures for years, so it's not a surprise. Now they're talking about "means testing" to determine if a retiring worker really needs the money? WTH difference does that make - it's still their money that was taken from them involuntarily while they were working! Do government promises mean nothing, or is this another case of "kick the can down the road" because of lack of foresight on their part?

Well, it's not a lack of foresight - as you point out, everyone who pays attention has known it was coming for years. It is a lack of wisdom and an indication of short-sightedness: we the people chose not to listen to bad news, and rewarded politicians who lied to us and punished the ones who told us the truth. Politicians aren't dummies, and they learned the lesson - which is why it was the "third rail" of politics for so long until Paul Ryan proved you could grab it with both hands and survive.

We sure seem to have money available for giving away to countries that hate us, but not for our own people?

Foreign aid is a relative pittance compared to the money we spend on our elderly.

And this administration is talking about giving SS payments to illegals who have never paid one cent into SS? Unbelievable! :thumbdown:

Well I think they are going to have to pay in in order to get the retirement benefit, but not the Disability benefit, which is the new Welfare-for-Life model.

 

[cpwill]

I simply have faith in the goodness of the American people and their values.

No you don't - you've made that explicit. Taking care of the poor isn't your fight - getting yours is. You put your faith in fellow members of your generation to also push politically to "get theirs" and damn the consequences.

 

[longview]

Greetings, cpwill. :2wave:

Is there any company in America that refuses to follow federal law on taking SS out of their workers' pay? I doubt it. Why doesn't the SS administration just issue a check to the worker when they retire for all the money they have paid in and be done with it? I agree that the extraordinary amount of Boomers retiring is a problem currently, but they have had those figures for years, so it's not a surprise. Now they're talking about "means testing" to determine if a retiring worker really needs the money? WTH difference does that make - it's still their money that was taken from them involuntarily while they were working! Do government promises mean nothing, or is this another case of "kick the can down the road" because of lack of foresight on their part? We sure seem to have money available for giving away to countries that hate us, but not for our own people? And this administration is talking about giving SS payments to illegals who have never paid one cent into SS? Unbelievable! :thumbdown:

Hello Polgara,
I want to say many School districts are exempt from Social security,
as they have teacher retirement plans in place.
So they do not pay SS, but also cannot receive benefits.

 

[JoeTheEconomist]

Greetings, cpwill. :2wave:

Is there any company in America that refuses to follow federal law on taking SS out of their workers' pay? I doubt it. Why doesn't the SS administration just issue a check to the worker when they retire for all the money they have paid in and be done with it? I agree that the extraordinary amount of Boomers retiring is a problem currently, but they have had those figures for years, so it's not a surprise. Now they're talking about "means testing" to determine if a retiring worker really needs the money? WTH difference does that make - it's still their money that was taken from them involuntarily while they were working! Do government promises mean nothing, or is this another case of "kick the can down the road" because of lack of foresight on their part? We sure seem to have money available for giving away to countries that hate us, but not for our own people? And this administration is talking about giving SS payments to illegals who have never paid one cent into SS? Unbelievable! :thumbdown:

You have a lot of fact problems here. I am curious whether you are familiar with the meaning of the word pay-as-you-go.

 

[polgara]

SS was never a savings account. And the point of the article is that no it isn't their own money - and the SCOUS says so. If you don't understand the problem, it is likely because you believe that politicians have taken millions of dollars from SS for their pet projects. The system is a paygo system which for decades promised dollars of benefits for dimes of cost - that is why it is in arrears.

It is the voter's fault because they are not paying attention.

Greetings, JoeTheEconomist. :2wave:

What's to pay attention to? FDR started SS in the 30s as a savings account for workers to receive their money back when they retired. They even made lump sum payments to retirees for a few years - after that it became monthly payments. Just because various administrations, starting with LBJ using the money to help pay for the VietNam war, decided to raid the fund doesn't make it right. Oh, they all left IOUs, which means they knew the money belonged to someone else and they were just "borrowing" it. Trillions of dollars have been taken from the SS Trust Fund by politicians over the years, and now they are in arrears, and they are searching for a solution on how to pay benefits to current and future retirees? If I were a worker just starting out to make a living, I'd be upset too, knowing that there might not be any money for me when I retire, when my paycheck clearly shows I have involuntarily been forced to pay into it! It looks like a Ponzi scheme - early recipients got theirs, but I might not? Madoff went to jail for doing the same thing!

 

[JoeTheEconomist]

Evidently you haven't read those things, because that is, in fact, precisely what they say. As Joe is fond of pointing out, every individual retiring today is currently scheduled - according to the government projections - to outlive their benefits.

Wait. You do know what the definition of "unsustainable" is... right?

Slight adjustment. It is a matter of averages not every. Retirees turning 66 today <on average>. Statistically, that means that about 1/2 of the people turning 66 today will be alive in 2033 when the system is projected to pay depleted benefits. What I say is that retirees turning 66 today "expect" to outlive full benefits in the system.

If you want unsustainable, that isn't the quote that I would use. I would say that SS created $900 billion in unfunded liabilities over 2013 solely because the clock moved forward by 1 year. That is more than the system collected in all forms of revenue. In English, that means that every penny of benefit paid in 2013 came at the projected expense of a future retiree. Social Security is like an interest-only mortgage where we aren't covering the interest, much less paying anything toward the upkeep of the house. Do you recall a situation in which that happened in the recent past.

 

[polgara]

Hello Polgara,
I want to say many School districts are exempt from Social security,
as they have teacher retirement plans in place.
So they do not pay SS, but also cannot receive benefits.

Greetings, longview. :2wave:

Well at least that's fair! You don't pay in... you don't get a payout! I understand that government workers didn't used to pay into SS, but that has also changed - now they do, because the fund needs money to meet their obligations, I guess.

 

[haymarket]

:shrug: I gave you the relevant data. You are free to read or refuse to read it.

I have indeed read reports like the ones you cited. I have read articles like the one you cited. There is not one line in there which states that the US Government will not have the money to pay the promised benefits. If you can find a line which says that, please REPRODUCE IT HERE.

You cannot since there is not such a statement in any of those reports.

As for Congress changing the math - that is precisely the relevance of the SCOTUS decision. Since you do not have a right to a Social Security payout, Congress is free to adjust the math as needed in order to ensure that the program remains sustainable.

I worked my way through college by working in a good sized hotel and auditing the books each night. It was pretty simple really - money coming in and money going out. Why do you presume that if Congress changes the math they would only deal with one side of the ledger and not both?

colder, harder, mathematical realities are going to ensure that it happens regardless.

Then present them...... AND NOT IN SOME MASSIVE INFORMATION AND OPINION DUMP which fails to state that the government will not have the money to pay the benefits.

Well, it's not a lack of foresight - as you point out, everyone who pays attention has known it was coming for years. It is a lack of wisdom and an indication of short-sightedness: we the people chose not to listen to bad news, and rewarded politicians who lied to us and punished the ones who told us the truth. Politicians aren't dummies, and they learned the lesson - which is why it was the "third rail" of politics for so long until Paul Ryan proved you could grab it with both hands and survive.

Paul Ryan promised nothing of the sort in destroying Social Security or reneging on its bargain with the American people. Furthermore, the one national office he ran for - HE LOST. Hardly grabbing it with both hands and surviving. Far more like pretending to hint and beat around the bush and then getting nowhere.

Popping the cap, however, only creates new liabilities, as we owe money for the money we are taking in.

False. Popping the cap while freezing benefit levels to today plus a modern inflation allowance if affordable - obligates us to no new liabilities.

WWII was a short term emergency, and once it was done, we "paid" for it partly by slashing the federal budget by 75%.

False. Slashing a budget pays for nothing. Revenues coming in pay for government expenses. And lots and lots and lots of people paid taxes for a war they had no say in as they were too young at that time or were not even alive. Something which your side seems to believe was just invented yesterday for Social Security.

No you don't - you've made that explicit. Taking care of the poor isn't your fight - getting yours is. You put your faith in fellow members of your generation to also push politically to "get theirs" and damn the consequences.

Before SS , some of the poorest people were the aged. SS has taken care of that so it is a weapon to take care of the poor or those who otherwise would be poor. So you simply are wrong in your personal attack on me motivated by your own ageism.

 

[longview]

Greetings, longview. :2wave:

Well at least that's fair! You don't pay in... you don't get a payout! I understand that government workers didn't used to pay into SS, but that has also changed - now they do, because the fund needs money to meet their obligations, I guess.

It is fair, but sometimes those state pensions have trouble on their own.
I think in the past few years, the receipts from Social security taxes, lagged behind the outlays.
I do not see that improving, short of massive immigration.
The SS system is based on continued growth, both economic, and population.
Nether have maintained the pace necessary to keep up with the number of retirees.
At some point fixing SS will move from "hey that would be a good idea!",
to a political and financial necessity.
By my way of thinking, if you know there is a battle ahead,
it is better to choose where it will occur,
than letting circumstances choose for you!

 

[polgara]

You have a lot of fact problems here. I am curious whether you are familiar with the meaning of the word pay-as-you-go.

I know what that term means - my point is just that it was not the original intent of Social Security. Everyone does not get the same amount when they retire because it's based on worker earnings. When seven out of the top ten jobs in the US are currently paying less than $30,000 a year, where's the money going to come from to pay the Boomers who are now retiring by the thousands every day? Many of them worked during the high-paying job years which appear to have all but disappeared today. If they haven't saved on their own, it's going to mean a lower standard of living for them in the future, doesn't it? They are not going to like that!

 

[longview]

I know what that term means - my point is just that it was not the original intent of Social Security. Everyone does not get the same amount when they retire because it's based on worker earnings. When seven out of the top ten jobs in the US are currently paying less than $30,000 a year, where's the money going to come from to pay the Boomers who are now retiring by the thousands every day? Many of them worked during the high-paying job years which appear to have all but disappeared today. If they haven't saved on their own, it's going to mean a lower standard of living for them in the future, doesn't it? They are not going to like that!

The way I see it, the politicians will have some tough choices.
The will ether have to reduce everyone's payout by some fixed percentage,
or limit who actually get's payments, to insure the available money is protecting the bottom
rungs on the economic ladder, or some combination in between.

 

[polgara]

It is fair, but sometimes those state pensions have trouble on their own.
I think in the past few years, the receipts from Social security taxes, lagged behind the outlays.
I do not see that improving, short of massive immigration.
The SS system is based on continued growth, both economic, and population.
Nether have maintained the pace necessary to keep up with the number of retirees.
At some point fixing SS will move from "hey that would be a good idea!",
to a political and financial necessity.
By my way of thinking, if you know there is a battle ahead,
it is better to choose where it will occur,
than letting circumstances choose for you!

CALPERS in California had the same big problems a few years ago - I don't recall how they handled that. Talking about circumstances choosing your future for you - today we are all strongly encouraged to save for our own retirement years, which is a good idea, but for many who are struggling to live paycheck to paycheck now, where are they going to get the money to follow that advice? And what's going to happen to people who are already on government assistance to survive now...how are they supposed to save money for some future problem? :shock:

 

[cpwill]

I know what that term means - my point is just that it was not the original intent of Social Security. Everyone does not get the same amount when they retire because it's based on worker earnings. When seven out of the top ten jobs in the US are currently paying less than $30,000 a year, where's the money going to come from to pay the Boomers who are now retiring by the thousands every day? Many of them worked during the high-paying job years which appear to have all but disappeared today. If they haven't saved on their own, it's going to mean a lower standard of living for them in the future, doesn't it? They are not going to like that!

No they aren't. They are, in fact, going to be hilariously furious.

 

[haymarket]

The way I see it, the politicians will have some tough choices.
The will ether have to reduce everyone's payout by some fixed percentage,
or limit who actually get's payments, to insure the available money is protecting the bottom
rungs on the economic ladder, or some combination in between.

Or they can pop the cap on FICA contributions and freeze the benefits levels to where they are today plus a modest inflation raise if affordable.

 

[longview]

CALPERS in California had the same big problems a few years ago - I don't recall how they handled that. Talking about circumstances choosing your future for you - today we are all strongly encouraged to save for our own retirement years, which is a good idea, but for many who are struggling to live paycheck to paycheck now, where are they going to get the money to follow that advice? And what's going to happen to people who are already on government assistance to survive now...how are they supposed to save money for some future problem? :shock:

I have lived on a lot less (time proportional) than I do now.
People seem to lack the ability to distinguish between wants and needs.
Depending on which generation you are from, you may remember when people did not
have cell phones, cable TV, and the internet in their hand.
I remember before we had a TV, single party telephone, or Air conditioning(It was bad in Louisiana).
There is always a little room to improve, if not now then a bit later.
Stages of life come in waves, expenses flow and ebb, applying the receding expenses to savings,
can be a good start.

 

[longview]

Or they can pop the cap on FICA contributions and freeze the benefits levels to where they are today plus a modest inflation raise if affordable.

I have heard popping the cap would only be a modest increase in the SS revenue,
and benefits are already frozen except for modest inflation tied COLAs.
It will take much more than that!