Ways to fix Social Security

[Ontologuy]

I have given you facts. There are no 'shoulds' in here. When you read facts, you infer your own thinking on these facts to me. You aren't in any position to judge my view to Social Security. The only thing you know is that I have presented facts to you that differ from your beliefs. What fact are you questioning?

The paradigm you attempt to construct here is non-existent.

Again, you appear to be oblivious to how government budget administration truly functions.

 

[iguanaman]

Had we actually invested in something or even kept the money in cash, we would be in a better fiscal position than we are currently, where SS is de facto at the mercy of the General Budget. Really the ponzi model isn't viable any more - people aren't having enough kids to make it work.

SSDI is currently scheduled to go broke in 2016. Good luck explaining how smart we are for producing that result.

T bills are the safest investment in the world and 1000's of investors all over the world prove it. How is the trust fund at the "mercy" of the budget? Are you claiming we will default on our T-bills? Go back to your mattress stuffing and see where that gets you.

 

[iguanaman]

You have a mix of fact problems and misunderstandings of how the system works.



Social Security has never been actuarially sound from day 1. Social Security is financed not funded. We borrow money from one generation in exchange for a promise of future payments. When someone talks about the 'surplus', it is looking at the money we have borrowed without considering that we have to pay it back. If you borrow $100,000 from a bank for a house, you aren't really $100,000 richer. The people who talk about Social Security having money believe that they are rich.



While it would be very nice if we didn't have war, the cost of war has nothing to do with Social Security or its financial woes. Social Security lends excess cash to the government on better terms than private pensions get. Saying that the Social Security was robbed to pay for wars is no different than saying every private pension in America was robbed. Sounds great, complete non-sequitur though.



Social Security is not paid to illegals. It sounds great, but the fact is that illegals do contribute without the possibility of collecting because they do not have an SSN. Your point about jobs being offshored is true, in part because of the high cost of Social Security. That problem does not change the dynamics of Social Security because for every dollar in there are promises made in exchange. This problem does not cause the problems in Social Security it only pushes the problems forward in time.




We just had an election with two candidate who agreed on one thing that Social Security wasn't very underfunded. They called it structurally sound. Virtually no one is paying attention because.... "Social Security will pay full benefits for at least another blah, blah, blah..."

The problem is very simple. We paid outsized benefits to the first 50 years of retirees with a system that created no economic resources with which to pay those benefits. We paid the first generation with promises to the second. We paid the second with promises to the third. Each time, we paid more to people than they contributed. This isn't a ponzi-scheme. It is check-kiting with every generation serving as a new bank. There is a huge difference. Ponzi-scheme run until they run out of capital. Check kiting run until a bank says no. The ponzi-scheme always has some residule that can pay-off contributors. In check kiting there is nothing but blank checks.

Ponzi schemes fail when they run out of new investors, SS is continuously funded by American workers. As long as we have workers we will have SS.

 

[iguanaman]

Had we actually invested in something or even kept the money in cash, we would be in a better fiscal position than we are currently, where SS is de facto at the mercy of the General Budget. Really the ponzi model isn't viable any more - people aren't having enough kids to make it work.

SSDI is currently scheduled to go broke in 2016. Good luck explaining how smart we are for producing that result.

SS or SSDI can NEVER go broke, they are continuously funded. Even if we do nothing and the SS trust fund is depleted, SS can continue to pay benefits at 75% for 75 years.

 

[cpwill]

It sounds nice, but you have to contribute to it for 10 years before you can collect. It is difficult to call anything welfare that excludes people. It is difficult to call anything welfare that does not pay even a penny based on need. You accurately point out that in a nominal sense high-wage earners (who are married) collect some of the largest paychecks. So how is that welfare?

It is a welfare program - it is what we use to provide some measure of protection against destitution for our elderly. It is stupidly designed, I agree; which was deemed necessary at the time to give workers a (false) sense that it was "their" money they were getting, establishing a (false) belief in ownership and political devotion to the program.

Exactly! thing like old-age for example. The likelihood of reaching 100 is roughly 1% or so. The costs associated with living 25 or 30 years past the point where you can realistically work is staggering. Without old-age insurance the vast majority of Americans would be unable to retire at all because of the uncertainty of the costs of surviving.

If SS didn't pay out until you hit 100, you would be absolutely correct, it would be insurance. However, hitting 62 1/2 or 65 is hardly an unforeseeable or unlikely event - it is, in fact, something that pretty much the vast majority of those currently paying into SS expect to do. So as long as we count "65" as "old-age", then no, not exactly at all.

Here you are factually wrong. Social Security is a highly progressive system, which has been documented many times by SSA, CBO, and the Urban Institute. You are looking at just the payroll tax side. That is like looking at half a baseball score. Cardinals 5 tells you nothing. The economic returns are highly skewed to low-wage earners.

That is incorrect - early dollars see a greater return which does not make it progressive. If you have a thousand dollars and the guy next to you has a hundred, and I give him 99 bucks but I give you $750, I am not giving him more than you. The rule is easily enough demonstrated by comparing benefits for our low-income workers to benefits for our high-income earners, who need it less, but yet receive more.

Just Facts : Social Security is a contributory benefits system which pays benefits based on past contributions. This isn't about contributing to society. This isn't about making the spouse more productive. Contribute means how much cash have they put into the system.

You don't see Social Security as a contributory benefit system. You see it as welfare, which means everyone should be entitled to benefits.

That is incorrect; everyone is not entitled to benefits of a welfare program - only those who have a demonstrated need for it in order to avoid destitution.

Social Security has been means-tested since 1983, with a test that reaches up to 1/3rd of retirees. Again, Social Security doesn't pay a penny based on need, and has no idea who is poor and who is a widow. So there really isn't a way to kick poor widows off the system.

Oh. That's interesting. The Social Security Administration apparently cuts these people checks, but has no idea who is collecting spousal or spousal survival benefits. Huh.

Well then - that's fantastic! We can save a bundle of money by firing the lot of them and hiring a kid right out of school who has the ability to run an excel spreadsheet. I've got a slow schedule for the next couple of weeks if they need some temp help figuring out how to do "count" functions.

If your problem is with the marriage penalty, fix the IRS tax code. It is insane to break Social Security because the unrelated tax code is unfair.

None of this says that women can't collect, but rather that their husbands credits should be divided between the two not magically replicated to fix an injustice of a far removed tax code.

Unrelated? Dude, FICA is a tax - it is part of the federal tax code. It's not "far removed", it's part and parcel of the same dang thing. Furthermore, they are effecting the same people. Having already shot someone in the face is not an excuse for then shooting them in the leg, claiming blithely that the body parts are unrelated.

 

[cpwill]

SS or SSDI can NEVER go broke, they are continuously funded. Even if we do nothing and the SS trust fund is depleted, SS can continue to pay benefits at 75% for 75 years.

Oh - that's fantastic to hear. Apparently we need to fire the Trustees and hire you because they claim that the trust fund is depleted in 2016 for SSDI, making it "broke".

Incidentally, saying "oh, if &2.7 Trillion magically shows up in between now and the 2030s instead of us running a continual massive deficit (as we are scheduled to do), then by that point we only have to slash poor people's incomes by 25%!" isn't what you would call a "solution".

Because in reality land, there is a program called "medicare" that is going broke much faster, and is going to take social security with it in the 2020s. Good luck getting money out of the general fund when there ain't no money in the general fund.

 

[cpwill]

Ponzi schemes fail when they run out of new investors, SS is continuously funded by American workers. As long as we have workers we will have SS.

No - Ponzi schemes fail when they cease to bring in an adequate number of new investors. Social Security would be right as rain if only we could figure out how to travel 35 years back in time and convince the Baby Boomers to have as many kids as their parents did, and raise them better to boot.

In order to have a program that depends upon future workers to pay current workers, you have to produce the future workers in adequate numbers. The West at large and us as well have by and large failed to do so, making our social programs unsustainable.

 

[longview]

No - Ponzi schemes fail when they cease to bring in an adequate number of new investors. Social Security would be right as rain if only we could figure out how to travel 35 years back in time and convince the Baby Boomers to have as many kids as their parents did, and raise them better to boot.

In order to have a program that depends upon future workers to pay current workers, you have to produce the future workers in adequate numbers. The West at large and us as well have by and large failed to do so, making our social programs unsustainable.

We could also increase population through immigration, but that does not seem popular ether.

 

[cpwill]

T bills are the safest investment in the world and 1000's of investors all over the world prove it. How is the trust fund at the "mercy" of the budget?

Social Security is running an annual and now permanent deficit, meaning that it is at the mercy of the General Fund to transfer monies every year to the Trust Fund to keep it afloat. It is just as much at the mercy of the General Budget as (for example) Defense.

Are you claiming we will default on our T-bills?

Nope. However, what the SS Trust fund is holding is not T-Bills. They are "special promissory notes" - pretty promises with sugar on top that some other Congress down the road will get stuck with the bill for the money we are using to get ourselves reelected.

Nor is default necessary. Congress has the ability to change the benefits at any time - since SS is a tax, you have no right to its' payouts. Congress could pass the "screw iguanaman bill" tomorrow, and you would have no legal recourse because it's not your money.

Go back to your mattress stuffing and see where that gets you.

Actually I went through and did the math on a much, much smarter method for saving for Social Security.

 

[cpwill]

We could also increase population through immigration, but that does not seem popular ether.

Importing mass low-value labor that disproportionately drains our social safety nets and increases competition for our low-value labor (which is already suffering) is a dumb idea. I agree we should be increasing our population through immigration, and that this will help buy us some wiggle room for entitlement reform, but in order to be successful we need to be smart and design our immigration system towards that happy result.

 

[cpwill]

But, you have quoted quotes, which I did NOT quote. I didn't type some of that stuff you replied to, but thanks for your input.

Sorry - I was using the excellent and timely example of your mother as a case in point precisely why a program designed to protect our elderly from falling into crushing poverty should not toss widows off it's rolls on the basis that they are somehow not as worthy as their husbands.

 

[grip]

Stop the government from spending SS funds, and make them pay back what they owe.

Don't pay out to people who don't need it.

Fixed.

 

[cpwill]

You are looking at this as a linear problem within a specific co-hort, and you should be looking at it on a system wide basis. We want to expand means-testing so that we can extend the life of the system by a year. In that year, you will bring on millions of more retirees. This would be fine if means-testing really made the system whole, but it doesn't. It simply postpones the crisis with more dependent people. The only people that you let on the Titantic are the ones who can't swim.

Not at all - means testing gets rid of the most expensive people and makes the more expensive people less expensive. You do not increase SS's rolls by throwing rich people off of it.

 

[Ockham]

Stop the government from spending SS funds, and make them pay back what they owe.

Don't pay out to people who don't need it.

Fixed.

I've never heard of the Federal Government paying back what they owe - ever.

 

[cpwill]

Stop the government from spending SS funds, and make them pay back what they owe.

Don't pay out to people who don't need it.

Fixed.

That's a Great Idea!



Um..... where are we going to get the necessary trillions of dollars? And, given that that will only buy us a few years, what are we going to do once we have bankrupted everything else the government does in order to prolong social security, and then Medicare goes belly up?

 

[grip]

I've never heard of the Federal Government paying back what they owe - ever.

Because they're money hungry crooks. Make them pay.

 

[RiverDad]

Social Security is not paid to illegals. It sounds great, but the fact is that illegals do contribute without the possibility of collecting because they do not have an SSN.

No, the possibility is still there. The US has totalization treaties with a number of countries which enable people to work in countries, contribute to their retirement schemes, and either withdraw all their contributions when they exit the country or qualify for a pension. The US and Mexico have negotiated such a treaty but it's not yet passed into law.

There are provisions in the treaty which directly address the contributions made by illegals, either in their own name or under a false name. Once that treaty is passed into law all of those contributions which we thought were "Free Money" are now going to be assigned to the accounts of the illegals.

So the only way the condition you note is true is if the US and Mexico don't pass this already negotiated treaty. It could happen. The treaty has been sitting around now for nearly a decade because it's sure to infuriate most Americans. The basic premise though is sound - the illegals paid into a retirement scheme, so why shouldn't they get that money back.

 

[grip]

That's a Great Idea!



Um..... where are we going to get the necessary trillions of dollars? And, given that that will only buy us a few years, what are we going to do once we have bankrupted everything else the government does in order to prolong social security, and then Medicare goes belly up?

LoL... don't annoy me with reality. Take all the defense spending for the next few years and put the rest on the FED's bill.

 

[Ockham]

Because they're money hungry crooks. Make them pay.

I'm all for garnishing their wages but it'll take a bazillion years.

 

[grip]

I'm all for garnishing their wages but it'll take a bazillion years.

Garnish their bosses (corporations) also and we'll have it back, tout de suite.

 

[cpwill]

LoL... don't annoy me with reality. Take all the defense spending for the next few years and put the rest on the FED's bill.

:lol: well, unfortunately, reality is where our bank accounts live. What are we going to do to make up the loss of revenue when the economy collapses following getting rid of the DOD?

 

[grip]

:lol: well, unfortunately, reality is where our bank accounts live. What are we going to do to make up the loss of revenue when the economy collapses following getting rid of the DOD?

Just tap into the $32 trillion in offshore accounts held by the rich, they won't even miss it.

Super rich hold $32 trillion in offshore havens | Reuters

 

[longview]

Importing mass low-value labor that disproportionately drains our social safety nets and increases competition for our low-value labor (which is already suffering) is a dumb idea. I agree we should be increasing our population through immigration, and that this will help buy us some wiggle room for entitlement reform, but in order to be successful we need to be smart and design our immigration system towards that happy result.

I agree it would be best to import the best and the brightest, but we do need the bodies.
We might have to settle for the hard working, who don't want to kill us.

 

[cpwill]

I agree it would be best to import the best and the brightest, but we do need the bodies.

We have 25% unemployment among our own low-income / low-skilled populace. "Bodies" is not the issue.

We might have to settle for the hard working, who don't want to kill us.

Well then we need to make it impossible for them to access the social safety hammock.

 

[cpwill]

Just tap into the $32 trillion in offshore accounts held by the rich, they won't even miss it.

Super rich hold $32 trillion in offshore havens | Reuters

1. That money is currently invested - you still going to wreck the global economy trying to pull it out.

2. What you are suggesting is illegal, and criminal.

3. Not least because that is the holdings of the wealthy from 139 separate countries combined, not just Americans.

You are also signficantly exaggerating available assets:

The research estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3 to $9.3 trillion of "unrecorded offshore wealth" by 2010.

Having (for example) the NSA go raiding the accounts of (for example) all German millionaires is going to go over about as well as murdering your wife in the middle of a dinner party. The whole thing is going to come to a crash.