SS needs to be addressed, not ignored, if Americans want it to continue

[Mircea]

In the next 30 years, these programs face a $116 trillion shortfall, says Brian Riedl, senior fellow in budget, tax and economics at the Manhattan Institute. If reforms aren’t put in place now, we will hurdle toward a fiscal crisis that will spark significant tax increases (think European-style value-added taxes) for the middle class and high inflation and interest rates, among other ills."

Wow, he thinks increasing the FICA Tax 2.0 to 2.2 points will cause America to burn down, fall over and sink into a swamp.

Can you say "click-bait?"

Have SS managed as a pension fund by an independent body of financial experts. That's what we do in Canada ...

O, Canada! has 30 Million people.

I get that you weren't able to benefit from Sesame Street, so you obviously don't understand the difference between 30 Million and 330 Million.

I doubt it. I'm assuming they have mandatory contributions from wage earners and since they actively manager investments that the rate of return is higher then the SS Trust Fund which by law is required to invest any excess ONLY in Special Treasury Bills (which have a lower return on investment).

Right, because a non-marketable treasury security in the OASI Trust Fund earning 3% or the prime-rate, which ever is greater has a lower return on investment than a T-bill at 1.19% (actual T-bill rate in 2017).

Got it.

 

[Callen]

I get that you weren't able to benefit from Sesame Street, so you obviously don't understand the difference between 30 Million and 330 Million.

Could you be anymore condescending if you tried? The number of persoans is irelevant . to my point which is how it managed. There is no reason tat the managinf of SS couldn't be removed from the hands of carrer beurocrats and politicitans and managed by an independent body of financial experts who could not access the fund as their personal slush fund.

 

[Mircea]

Adequate planning and information dissemination is a must. Congress isn't always good at this, but a Congressional bipartisan committee has to be formed to address a solution and it can't be centered on politics but must be about saving the programs.

Really?

From Day #1 the problem of Social Security has been the ratio of workers-to-beneficiaries relative to the FICA Tax Rate.

The SSA website says that on Day #1 the ratio of workers-to-beneficiaries was 159:1 and that by 1945 it was 46:1 and by 1960 it was 13:1 and today it is 2.8:1.

The most recent Social Security Trustee Report says the ratio will be about 2:1 to 2.3:1 for the foreseeable future.

The SSA website also shows the history of FICA Tax Rates from the initial 1% to the current 6.2% effective 1993.

And we need a "Congressional bipartisan committee" to figure all that out?

Wow, you guys are in some serious trouble.

 

[rickc]

Well one thing is for sure Republicans will never fix social security to benefit the working class.

Their fixes include cutting benefits and extending the retirement age. They really just want to bankrupt it where they can do away with it.

 

[ttwtt78640]

Really?

From Day #1 the problem of Social Security has been the ratio of workers-to-beneficiaries relative to the FICA Tax Rate.

The SSA website says that on Day #1 the ratio of workers-to-beneficiaries was 159:1 and that by 1945 it was 46:1 and by 1960 it was 13:1 and today it is 2.8:1.

The most recent Social Security Trustee Report says the ratio will be about 2:1 to 2.3:1 for the foreseeable future.

The SSA website also shows the history of FICA Tax Rates from the initial 1% to the current 6.2% effective 1993.

And we need a "Congressional bipartisan committee" to figure all that out?

Wow, you guys are in some serious trouble.

SS beneficiaries (including their surviving spouses) are now living longer, thus they get benefits for more years.

To make up the projected 25% shortfall (which is rapidly depleting the SS ’trust me’ fund), simply increase the SS FICA ’payroll’ tax rate(s) by 25% (from 6.2% to 7.75%).

 

[Mircea]

Raising the Income Cap:
Agreed, it's much two low. Remove it all together? No. At least double to current models cap? Yes. Doubling or raising the cap to $500K would solve the SS all by itself.

The FICA tax does not need to be raised. It needs to be applied to all income. Problem solved.

Adjust/remove the tax caps and you don't have to raise the retirement age like the GOP wants to do.

The simplest and quickest way to secure the SS trust fund is to eliminate the cap, which is currently at $118,500.

2. Go with the Elizabeth Warren Plan. Remove all caps from super-rich people paying into the system. Force them to pay the same percentage as everyone else. (they currently pay a fraction.) Benefits could be increased by $200 a month for all recipients and the system would be solvent for the rest of the century.

Those are patently false statements and Pocahontas is a known liar.

Let's start with removing the caps on income, make sure that the people are paying SS taxes on investment income as well.

You cannot prove your claim. All you can do is link to propaganda and disinformation websites that make the same claim but refuse to provide any evidence to support the claim.

On the other hand, I can show you the math in detail using IRS links that prove removing the cap completely won't even generate enough money per year to pay for 1 month of benefits.

Quite a number of states have state pension plans for teachers, various state workers, etc.

Yes, and many of them are insolvent.

 

[Mircea]

Understood, my question is where does this grandfathering kick in?

As I said: (The numbers I read are raise the age to 70, and grandfather those over 50. Is that about right?).

The stepped grandfathering would occur for those younger than 50 because they have more projected hears in the workforce and by 50 it's kinds of hard to change paths for retirement. Is that what we are talking here?

WW

That will fail.

Many will be approved for disability and they would draw 100% of their full-retirement benefits until age 70 at which time they would be converted from OADI to OASI.

Several countries, including France raise their retirement age.

Within 1 year they were experiencing higher than normal unemployment rates which continued to increase to damaging levels and then they repealed the laws and restored the original full-retirement ages.

Had you bothered to read the many publications from the Bureau of Labor Statistics published from 1998 to 2018 then you'd know that 2 out of every 3 jobs "created" (snicker) would be "created" (snicker) by a retiring Boomer.

There is absolutely no possible way you can increase the amount of job creation by 70% each month and sustain that month after month through the end of this Century.

Because you cannot, your UE Rate will be perennially 7%-9% creating social and economic problems that will necessitate massive increases in government spending on social welfare programs.

That will increase both taxes for everyone and deficit spending which will bloat your federal debt even higher and faster rates leading to demand destruction for your treasury bills, notes, and bonds and ultimately to perennially high Monetary Inflation rates, and coupled with Demand-pull Inflation and Cost-push Inflation could push that into the 25%-35% range annually.

 

[Mircea]

For what it's worth I think they will eventually means test SS to protect the low income recipients from getting a
percentage cut.

If SS becomes means tested, it will no longer be the program it was designed or meant to be. That changes it into a welfare program which is an entirely different discussion.

Social Security is already means-tested and has been since 1983.

It was designed to begin payments when you were about to die.

Not on this planet.

Your lack of knowledge is not impressive.

A Republican governor started social security.

As governor of New York State, FDR appointed a commission to study the social security programs of other States and a social security program for New York was established in 1929. New York was the 28th or 29th State to do so.

At the time FDR nationalized the State social security programs in a manner most-Stalin, there were 35 States with social security programs, 9 States had pending legislation to create a social security program, and the remaining States (there were only 48 States) had commissions or panels studying the implementation in their State.

When you study Actuarial Science, you will learn that there is Life Expectancy from Birth, Life Expectancy from Age 35, and Life Expectancy from Age 65.

Now that you've been educated, the reason Congress chose age 65 as the full-retirement age is because:

1) 29 out of the 35 States that had social security programs set age 65 as the full-retirement age; and

2) Actuarial Science using Life Expectancy from Age 65 supported age 65.

In 1935, Life Expectancy from Age 65 was was 12 years for men, meaning age 77, and 13.5 years for women, meaning 78.5 years.

Presently, Life Expectancy from Age 65 is 16 years for men, meaning 81 years, and 18.2 years for women, meaning 83.2 years.

 

[ttwtt78640]

Social Security is already means-tested and has been since 1983.


Not on this planet.

Your lack of knowledge is not impressive.

A Republican governor started social security.

As governor of New York State, FDR appointed a commission to study the social security programs of other States and a social security program for New York was established in 1929. New York was the 28th or 29th State to do so.

At the time FDR nationalized the State social security programs in a manner most-Stalin, there were 35 States with social security programs, 9 States had pending legislation to create a social security program, and the remaining States (there were only 48 States) had commissions or panels studying the implementation in their State.

When you study Actuarial Science, you will learn that there is Life Expectancy from Birth, Life Expectancy from Age 35, and Life Expectancy from Age 65.

Now that you've been educated, the reason Congress chose age 65 as the full-retirement age is because:

1) 29 out of the 35 States that had social security programs set age 65 as the full-retirement age; and

2) Actuarial Science using Life Expectancy from Age 65 supported age 65.

In 1935, Life Expectancy from Age 65 was was 12 years for men, meaning age 77, and 13.5 years for women, meaning 78.5 years.

Presently, Life Expectancy from Age 65 is 16 years for men, meaning 81 years, and 18.2 years for women, meaning 83.2 years.

SS is mostly ‘means tested’ by the FIT code (in the following tax year) for those SS beneficiaries deemed to have “too much” additional income. Unfortunately, that nonsense ends up transferring money from the SS ‘trust me’ fund to the US treasury.

 

[Mircea]

I do not think the program as designed can continue, unless we do what Bush suggested and open
up the choices of what SS can invest in.

That defeats the whole purpose and premise of OASI, which, by the way, stands for Old Age and Survivors Insurance.

The operand is "insurance."

Apparently, you are unable to understand the distinction between insurance and investments.

Social Security is insurance to hedge your bets in the event your investments fail, or your life goes terribly wrong, or both.

A smart person has saved for retirement and there are numerous methods. Sadly many don't.

A smart person with a simple, easy, uncomplicated life who suffered no major setbacks and everything went their way 95% of the time.

I'm in a "funded retirement" plan at work.

Good for you, but that assumes your plan is funded and your employer doesn't muck it up and your employer doesn't fold or your employer isn't purchased/merged with another and you don't get terminated and you don't get injured or disabled and have to quit work.

 

[reflechissez]

Social Security is already means-tested and has been since 1983.


Not on this planet.

Your lack of knowledge is not impressive.

A Republican governor started social security.

As governor of New York State, FDR appointed a commission to study the social security programs of other States and a social security program for New York was established in 1929. New York was the 28th or 29th State to do so.

At the time FDR nationalized the State social security programs in a manner most-Stalin, there were 35 States with social security programs, 9 States had pending legislation to create a social security program, and the remaining States (there were only 48 States) had commissions or panels studying the implementation in their State.

When you study Actuarial Science, you will learn that there is Life Expectancy from Birth, Life Expectancy from Age 35, and Life Expectancy from Age 65.

Now that you've been educated, the reason Congress chose age 65 as the full-retirement age is because:

1) 29 out of the 35 States that had social security programs set age 65 as the full-retirement age; and

2) Actuarial Science using Life Expectancy from Age 65 supported age 65.

In 1935, Life Expectancy from Age 65 was was 12 years for men, meaning age 77, and 13.5 years for women, meaning 78.5 years.

Presently, Life Expectancy from Age 65 is 16 years for men, meaning 81 years, and 18.2 years for women, meaning 83.2 years.

How's your day going? You seem to be triggered already.

 

[Mircea]

It is a program designed to promote social welfare. It doesn't redistribute wealth, but it certainly could and should, imo.

Except that it wasn't necessary since 35 States had social security programs and the remaining States either had pending legislation or were studying how to implement a social security program in their State.

FDR did not create or invent social security. He merely nationalized State social security programs in a manner most-Stalin just like Eisencoward nationalized the superior disability programs of the 48 States in 1957 in a manner most-Castro.

And they were superior. Social Security only recognizes permanent total disability but the all of the 48 States recognized permanent total disability, temporary total disability, permanent partial disability, and temporary partial disability.

That is superior to Social Security hands down.

What exactly do you call it when a nationalizer like Eisencoward accuses a nationalizer like Castro?

Doesn't that fall under "Pot. Kettle. Black?"

You are correct in that Social Security does not redistribute wealth, but it should not do that ever.

A Ponzi scheme is one in which you eventually and inevitably run out of new participants.

False. That is merely a possible characteristic of a Ponzi-scheme. You need to go back to law school.

Right now it is income capped at $147,000. If the rich were to pay more based on their income, the system would be well-funded.

False.

You cannot prove it. Linking to propaganda and disinformation websites that also make the same claim but without proving it is not proof.

I can provide links to the IRS Bulletin of Income Statistics which shows all the necessary data to make the calculations and show you with the very simple math proving conclusively that removing the cap won't even generate enough money to pay for 1 single month of benefits.

So you remove the cap and pay benefits in January with 28%-32% reduction in benefits and then from February to December beneficiaries still get a 28%-32% reduction.

Not cool.

SS is one of, if not the most successful social program in history. Before SS, poverty among the elderly was a huge problem.

No, it was not.

In 1935 and the decades prior American society was based on the hyper-extended nuclear family. The hyper-extended nuclear family consisted of grandparents, aunts, uncles, nieces, nephews, and cousins, great aunts and uncles and 2nd cousins. The elderly lived with their children or another member of their hyper-extended family.

For those elderly where that wasn't possible regardless of the reason, States, counties, and cities operated pension homes for the elderly, and counties operated pension homes for veterans (at that time of the Spanish-American War and WW I and Civil War veterans until they died off).

For someone who was not a veteran and did not qualify for an old aged home, there were boarding houses. If you seen TV shows or movies made prior to 1965 they are often set in boarding houses or one of the characters lives in a boarding because that's how freaking popular they were.

You got a nice room, 3 meals a day, and could enjoy the company of others playing cards or board games, or listening to your favorite radio show, and in the 1950s with the advent of TV could watch TV.

States, counties, and major cities operated subsidized housing for decades before the federal government went on another big power grab, and States, counties, and some major cities also had a food stamp program before the federal government went on another big power grab.

There is ample evidence to show that after the creation of HUD, States legislated boarding homes out of existence. It was then cheaper to rent an apartment than to rent a room and the primary purpose was to drive the elderly into HUD housing at a time when States also got block grants from HUD for the elderly.

The only people living on the streets were winos, hobos, and other vagrants, and those are life-style choices.

At least hobos were respectable. They would actually work for food/money. I doubt if any of you have ever seen a true hobo so you probably have no idea what I'm talking about. Seriously, I haven't seen one since 1974.

 

[Mircea]

Those of us who planned better, have other income streams, and while important,
the loss of some of our SS income, would not be life threating.

We're glad you had an easy life with no trials or tribulations.

So there is no hope for the present SS operation.

Yes, there is.

It's incredibly simple. You just step-increase the FICA tax 0.2 every 2 years until you get to 8.0%-8.2% and Social Security will be solvent for the next 500 years without any need for any additional tax increases.

The simplest fix would be to raise the FICA payroll tax rate (last done in 1986?).

1993.

Sometimes I believe you are right. When I feel kind and generous toward the Treasury Dept. I want to call them up and say, "You know, I really don't need the monthly amount you are depositing in my account. Why don't you keep it and maybe give it to someone else?".

There are Millions of wealthy Americans who never apply for their Social Security benefits.

Someone I know lives comfortably and can spend up to maybe $250,000 year if he wanted to. He never applied for benefits because it's too much of a hassle and it would cost him money. He's means-tested so paying the quarterly tax to Social Security or having it deducted from his check and the additional steps on his tax returns and other things and he said he just doesn't want the hassle.

 

[Peacenik]

Those are patently false statements and Pocahontas is a known liar.

She is well acquainted with the math. The numbers do not lie. The super-rich are done paying into SS by a few minutes after midnight every new year's eve. Workers pay all year long. It's not right. Why are you defending the super-rich? They should pay the same percentage of their income that paycheck earners pay.

The super-rich only pay a very small, tiny, itty bitty, minute fraction of the percentage of their income as workers do. Let them pay the same cut as the 99% do. Then the system would be solvent for the rest of the century; and all recipients could all have another $200 a month.

It's a crying shame what some retirees scrimp by on after working their whole lives away making somebody else rich.

It's just not right. We need a better system. Elizabeth Warren is absolutely correct in her observations.

 

[rickc]

Well one thing is for sure Republicans will never fix social security to benefit the working class.

Their fixes include cutting benefits and extending the retirement age. They really just want to bankrupt it where they can do away with it.

How about we make all income, earned and unearned subject to the social security tax.

Return the retirement age back to 65.

Stop taxing social security benefits

Give SS a 25% increase to adjust for the real cost of living.

 

[Mircea]

If SS was a Ponzi scheme, it would have failed decades ago.

Somebody obviously didn't go to law school.

You ran a Ponzi-scheme. You promised 0% ROI and you were honest enough to tell every investor they could lose their shirts and get nothing in return, your scheme never collapsed, and not one of your investors lost any money.

No actual loss to the victims is required. See United States v. Pollack, 534 F.2d 964, 971 (DC Circuit)

You'll be going to prison.

It really doesn't. A Ponzi scheme is not fixable. SS certainly is.

Ponzi-schemes can be fixed. Social Security can be fixed, too.

The element of proof is the underlying financial scheme is not viable, ie not solvent.

The interest rate, or return on investment is not an element of proof and as a juror, you will be prohibited from discussing interest rates.

Whether or not investors lost money is not an element of proof and since United States v Pollack, as a juror you are not allowed to discuss whether investors lost money or not or whether they might actually also lose money or not.

"No particular type of victim is required . . . nor need the scheme have succeeded." United States v. Coachman, 727 F.2d 1293, 1302-03 n. 43 (DC Circuit 1984).

The problem with people like you is the misinformation you spread. It isn't disinformation because I do not believe you're doing it intentionally.

Your grandma goes to a website where some jackass talking out of both sides of his neck says "It ain't a Ponzi-scheme unless it has a ridiculously high interest rate."

So, I offer 2.5% and take your grandma's money and now she ain't got no money and you ain't got no inheritance.

I can get 5 investors to pony up $1 Million each or I can get 100 grandmas to pony up $50,000 each.

Either way, I got $5 Million in walking around money.

?? How is significantly reducing poverty among the elderly a "slogan"? It's an outcome of the program and it's a fact. It's called, "success."

The government manufactured a problem and then created a "solution" for the non-existent problem.

 

[Mircea]

Probably something included in:

• Raise the Full Retirement Age (FRA) to 70 immediately to cut benefits years and reduce expenditures to be able to have an impact over the next decade.

That will result in perennially high unemployment rates in the 7%-9% and increase income taxes and deficit spending leading to perennial Monetary Inflation.

• Increase the cap from the current $160K on wages to at least double, probably $500K. Will extend the SS Trust fund beyond 2035 and is politically doable.
• Eliminate the cap all together.

Neither will make Social Security solvent and both are harmful.

It's obvious you're not well-informed and don't have command of the subject matter, because if you did, then you'd be familiar with a Bill the Democrats introduced that went nowhere, but does actually address the wage cap.

I have never said that the wage cap should or should not be eliminated.

I have merely pointed out the blatant lies claiming it will save Social Security because it cannot and will not. As I've said, it won't even pay for 1 month of benefits.

What the Democrats had in the Bill that I liked is the "donut hole."

Some time around October/November of this year SSA will publish the average wage for 2022.

The current average wage is $60,575.07 for 2021. For those who turn/turned 62 years this year, your annual wages will be adjusted against the 2021 average wage to calculate your benefits.

The average wage also determines the 1st, 2nd, and 3rd Bend Points, as well as the wage cap.

The donut hole is the wage cap plus $400,000. Anyone earning in that range does not pay the additional FICA taxes.

Why?

Let's face it. Americans are just plain stupid. A guy gets offered an IT job in Cincinnati (OH) for $44,000 and he turns it down to take an IT job in White Plains (NJ) because he is stupid enough to think he's making more money.

The $44,000 IT job in Cincinnati actually pays $4,000 more per year. How can that be?

It's called the Cost-of-Living. The person in Cincinnati and White Plains both have the same size house, they both have 3 cars of the same year, make, and model, but probably different colors, they have the same furniture and appliances, they have the same clothes and shoes, they eat out at the same places, go to sports and entertainment events and on and on.

The only difference is that in Cincinnati you can do that on $40,000/year. In White Plains, you'll need $100,000 to have the same life-style.

HUD data is actually the best and easiest to use. If were were to set the federal minimum wage based on Cost-of-Living then some Americans would get $6.70/hour while other Americans would get $26.96/hour and all other Americans would fall somewhere in between.

That is how wildly the Cost-of-Living varies in America. Like I said, the stupid Americans would move to the places paying $26.96/hour thinking they'll be getting mo' money when in fact their financial situation is likely to worsen and they'll end up moving back to the place where they were getting $7.10/hour so they can actually enjoy life.

The point being just because someone earns $200,000 or $250,000 a year does not make them "rich." Whether they are or not depends on which one of the 595 separate but interdependent economies they live in.

Where I live, people earning $400,000/year are basically "millionaires" but in other places in the US they might be near the high end of Middle Class, maybe even Upper Middle Class, but they ain't Upper Class.

So, the Democrat's approach is the right way to deal with it.

 

[Mircea]

• Implement a small SS Tax on other forms of income besides "wages" to include interest, dividends, and capital gains.

Not gonna work. It's also destructive. It would harm the Middle Class 401(k) accounts. Every study ever done, including those by Ohio State University, the Congressional Research Service, the Congressional Budget Office, and even the IRS shows the optimal capital gains tax rate to be about 9.5%. It's 15% now and increasing will decrease revenues. If decreased to 12%, revenues would actually increase.

• Means Testing is another idea that gets floated.

Social Security has been means-tested since 1983.

Currently, SSA receives $10 Billion to $12 Billion each month from means-testing.

• Another poster in these threads proposes a new national sales tax to fund SS and debt reduction. (I don't think that is politically doable.)

It isn't and will have a negative impact on the economy.

• Finally there is "do nothing".

That's what Congress will do and they'll wait until the 11th Hour to rescue it and that will necessitate a huge increase in the FICA which could be detrimental. The last time it was harmful but not enough to cause a recession.

Actual the thread is about SS and MC problems.

They are two different animals. Strange how you don't understand that.

I mean, sorry, maybe I am wrong, I’m not an expert. But I was under the impression that your SSI benefit is based on your average income and your age when you start collecting it.

Nope.

SSI is a State program administered by SSA as a cost-saving measure.

 

[Mircea]

Just like universal health care

The rich don't need it and don't want to pay for it. They have very powerful lobbiest in congress to ensure that those bought and paid for representatives do their bidding.

You're not qualified to discuss health care.

When you learn how your State and federal governments, and a trade association known as the American Hospital Association created the nightmare you hate, then we can have a fruitful discussion.

Until then, all you've got is emotional-based arguments which are logical fallacies.

 

[Bullseye]

they'll wait until the 11th Hour to rescue it and that will necessitate a huge increase in the FICA which could be detrimental. The last time it was harmful but not enough to cause a recession.



They are two different animals. Strange how you don't understand that.

Actually they're not. Both funded from FICA tax and both have serious funding problems coming. Strange you don't understand THAT.

 

[ttwtt78640]

Actually they're not. Both funded from FICA tax and both have serious funding problems coming. Strange you don't understand THAT.

They are separately funded programs. The scam preferred by demorats is to tax only “the rich” more, despite that not solving the funding problem.

 

[rickc]

They are separately funded programs. The scam preferred by demorats is to tax only “the rich” more, despite that not solving the funding problem.

Well one thing is for sure Republicans will never fix social security to benefit the working class.

Their fixes include cutting benefits and extending the retirement age. They really just want to bankrupt it where they can do away with it.

 

[ttwtt78640]

Well one thing is for sure Republicans will never fix social security to benefit the working class.

Their fixes include cutting benefits and extending the retirement age. They really just want to bankrupt it where they can do away with it.

I’m not a republicant. See post #730 for an easy fix.

 

[rickc]

I’m not a republicant. See post #730 for an easy fix.

I can agree with that.

But it won't get through congress without a democrat supermajority and the white house

 

[ttwtt78640]

I can agree with that.

But it won't get through congress without a democrat supermajority and the white house

We had that under Obama, yet nothing like that was done.