What should the government do about the money it owes the Social Security system?

[Critter7r]

Has anyone done the math on whether that generation will be large enough and/or earn enough income to maintain the status quo (more or less) with SS?

I have to say, I'm assuming the SSA has, as they are required by law to project solvency for the next 75 years. I haven't seen any indication that the SSA (or anyone else) expects deficits to narrow or disappear as more Millennials move into the workforce.

Well, unlike the Gen X / Boomer issue where there are fewer Gen X'ers that have to support Boomers, there are more Millennials than Gen X'ers, so there will be more Millennials to support the Gen X'ers.

 

[Mircea]

Indeed it is the ambiguity of Social Security's mission that confounds explanation:

Is it a welfare program (yes/no)

No.

Are benefits directly related to contributions (yes/no)

No.

Is it a retirement benefit (yes/no)

Yes.

Is it pay as you go or forward funded (yes/no)

The provision for a Trust Fund clearly demonstrates it is "forward funded."

Is it a wealth redistribution scheme (yes/no)

No.

Is it poverty insurance (yes/no).

Yes.

Are investors who get wiped out protected by Social Security (yes /no)

Yes, so long as they paid FICA Taxes for a least 10 quarters of employment.

I dare say these and hundred of other SS questions cannot be answered with integrity by anyone.

I did.

The determination of benefits is related to contributions.

That is incorrect. Contributions have never been a factor in determining benefits.

That money is gone and is never coming back. The only way to repay it is to borrow even more money from China, which is just not acceptable.

That's quite untrue.

When the OASI and DI Trust Funds require redemption of those securities to make expenditures, the Government finances those expenditures out of accumulated cash balances, by raising taxes or other receipts, by borrowing from the public or repaying less debt, or by curtailing other expenditures.

Stop putting money collected for SS in the black hole of deficit called the general fund and actually invest the money.

Invest in what, Solyndra?

The government has a poor track-record of picking Winners & Losers.

 

[Critter7r]

Originally Posted by Visbek View Post

The determination of benefits is related to contributions.

That is incorrect. Contributions have never been a factor in determining benefits.

That's also a little misleading.

Earnings determine one's contributions, and SS benefits are based on earnings. Ergo, contributions are a factor in one's benefits, just not the determining factor.

https://faq.ssa.gov/link/portal/340...nd-how-many-do-I-need-to-qualify-for-benefits

"We use your total yearly earnings to figure your Social Security credits. The amount needed for a credit in 2018 is $1,320. You can earn a maximum of four credits for any year. The amount needed to earn one credit increases automatically each year when average wages increase.

You must earn a certain number of credits to qualify for Social Security benefits. The number of credits you need depends on your age when you apply and the type of benefit application. No one needs more than 40 credits for any Social Security benefit."

 

[JoeTheEconomist]

If you look at the chart on the link I gave you it clearly shows the amount collected minus the amount paid out. That comes to 2.5 trillion dollars. Supposedly every year there was a surplus a special treasury note was issued with interest of about 5%. I have been trying to get my information directly from the government which does have to make it available. The problem is they can make it very confusing when they don't want you to actually figure out what they are really doing.

The "amount collected" includes interest (which is a cost to the govt) and general fund subsidies TO the system. That isn't the amount of taxes that we have paid above what the system distributed.

Here is the chart that you want :

https://www.ssa.gov/oact/TR/2017/VI_A_cyoper_hist.html#297482

Table VI.A4.—OASI Trust Fund Asset Reserves, End of
Calendar Years 2015 and 2016

 

[JoeTheEconomist]

That's also a little misleading.

Earnings determine one's contributions, and SS benefits are based on earnings. Ergo, contributions are a factor in one's benefits, just not the determining factor.

https://faq.ssa.gov/link/portal/340...nd-how-many-do-I-need-to-qualify-for-benefits

"We use your total yearly earnings to figure your Social Security credits. The amount needed for a credit in 2018 is $1,320. You can earn a maximum of four credits for any year. The amount needed to earn one credit increases automatically each year when average wages increase.

You must earn a certain number of credits to qualify for Social Security benefits. The number of credits you need depends on your age when you apply and the type of benefit application. No one needs more than 40 credits for any Social Security benefit."

They are a coincidental factor, not a determining factor of benefits. The problem is that we have changed the tax rates so that contributions are much higher today than in the past. Yet the worker today does not get anything extra.

 

[poweRob]

I have read that the government owes through bonds somewhere over 2.7 trillion dollars to the Social Security trust fund. Although the system started paying out more in funds than it took in in 2010, with interest from these bonds the fund will continue to grow until 2025. I have read that many conservatives see this fund as just another form of Federal tax and should be treated like any other tax, available for any use that the congress wants to use it for. Those who believe so do not think that the government needs to "pay back" these funds and that Social Security is nothing but another entitlement program. Others seem to think that it should be used for the purpose it was originally taxed for. Those who believe that the money should be used to pay for social security payments think that at some time the government has to pay back these funds and that this is not an entitlement program but one leg in what the originators called the three legs of retirement plans for the elderly. What do you think?

This...

 

[Visbek]

Well, unlike the Gen X / Boomer issue where there are fewer Gen X'ers that have to support Boomers, there are more Millennials than Gen X'ers, so there will be more Millennials to support the Gen X'ers.

Well....

It doesn't quite work that way. What is happening is that people aged 65 and up (which is mostly "Silent" and "Greatest" generations) are collecting SS, and Boomers are just starting to collect SS. Gen X is smaller, and Millennials are about half in the workforce. Meaning a huge bulge is about to start collecting SS -- and even before they start, SS is running a deficit.

By law, the SSA has to project SS's solvency 75 years into the future. If they saw that Millennials and GenX would earn enough to offset the Boomers, I'd assume that would show up in their figures. As far as I know, the SSA expects indefinite deficits after 2032.

So if you were correct, I'd assume the deficit would shrink at some future date.

 

[JoeTheEconomist]

Well....

It doesn't quite work that way. What is happening is that people aged 65 and up (which is mostly "Silent" and "Greatest" generations) are collecting SS, and Boomers are just starting to collect SS. Gen X is smaller, and Millennials are about half in the workforce. Meaning a huge bulge is about to start collecting SS -- and even before they start, SS is running a deficit.

By law, the SSA has to project SS's solvency 75 years into the future. If they saw that Millennials and GenX would earn enough to offset the Boomers, I'd assume that would show up in their figures. As far as I know, the SSA expects indefinite deficits after 2032.

So if you were correct, I'd assume the deficit would shrink at some future date.

You are essentially correct. The gaps increase from 2032 to eternity with a pause once the Boomers pass. The system never returns to solvency, though. The rate of increase in the gaps slows down.

 

[PIPEWRENCH]

Invest in what, Solyndra?

The government has a poor track-record of picking Winners & Losers.

They seem to do pretty well when investing their money. Plus lets look at this from a pure logical standpoint. I know very little about investing. So I am better off spending the money I am now investing in my retirement and hoping my children will be able to afford to pay my way later?

 

[JoeTheEconomist]

Not good enough.

If you're going to complain, and shoot down solutions, then you have an obligation to explain what can work.



Privatization is an option. Paul Ryan was pushing it just a few years ago, and is also behind the current push for "entitlement reform." It's just that moving to a privatized system would be stupendously expensive, and we're not willing to spend that kind of money to make SS more stable in the long run.



And here we are again, with you shutting down solutions, without offering anything -- and without acknowledging the basic options.

Money is not going to materialize out of thin air. The Fed is not going to print up trillions and give it to Social Security for free.

Since you claim to understand the problems, surely you realize that some time around 2032, SS will have an annual deficit and the Trust Fund will be gone. You have also, in this thread alone, shut down the following possibilities:

• Privatization
• Increasing revenues (via taxes)
• Closing the SS deficit with general tax revenues
• Borrowing to close the SS deficit

That only leaves one thing: Slashing benefits. (Or did I miss that one?) Since you've ruled everything else out, we'd have to cut benefits to the bone. You good with that?



That's nice, but let me catch you up on current events: Thomas Jefferson is dead, as is his theories on government debt.

I'm also curious, who is it exactly that you imagine will be able to vote to cancel Social Security? Whoever it is, they will almost certainly be outnumbered or at least outpowered by the millions who paid into Social Security, and expect at least something as a result of contributing all those payroll taxes.

So, it's time for you to have an adult conversation. You know the choices. You know they all suck. You know it's coming. Why are you so afraid to commit, even tentatively, to an actual solution?

There are two choices cut taxes and reduce benefits. The rest is parsley. I haven't ruled anything out. We are where we are because politicians have kicked-the-can on the system for decades with small talk and euphemisms. All I ask for is an honest discussion. If you want to raise taxes, the question is upon whom. If you want to cut benefits, the question is on whom. The GOP seems content to cut the benefits of future retirees (ie me). I do not see the point of taking 30 percent cuts so that I can be spare a 25% random cut. Call me stupid. It sounds like I am just taking a needless 5% reduction. That isn't a serious proposal.

I do not believe that we agree upon what the system is suppose to do, enhance we will never agree on a 'solution'. Separately, my 'solutions' are apt to see draconian to those who do not believe the problem is serious. The problem starts in 2022 or there abouts once the government has to refinance the bonds held by the Trust Fund. Today, the economic impact of the Trust Fund is near zero. In flows almost pay entirely for outflows. The interest is a credit of bonds from the government to the Trust Fund. There is no competitive bid on those bonds. This year, we had to pay about $50 billion in hard interest costs. By 2022, we will start redeeming bonds on top of interest. That is apt to be 250 billion every year.

My guess is that no adult conversation is coming. We will wait until the crisis defines the response.

 

[Critter7r]

They are a coincidental factor, not a determining factor of benefits.

Right. That's what I said.

"Ergo, contributions are a factor in one's benefits, just not the determining factor."

 

[jdog21]

The gov needs to pass legislation to remove the cap from which they stop taking funds out for SS. It would help keep SS going longer

 

[Critter7r]

Well....

It doesn't quite work that way. What is happening is that people aged 65 and up (which is mostly "Silent" and "Greatest" generations) are collecting SS, and Boomers are just starting to collect SS. Gen X is smaller, and Millennials are about half in the workforce. Meaning a huge bulge is about to start collecting SS -- and even before they start, SS is running a deficit.

By law, the SSA has to project SS's solvency 75 years into the future. If they saw that Millennials and GenX would earn enough to offset the Boomers, I'd assume that would show up in their figures. As far as I know, the SSA expects indefinite deficits after 2032.

So if you were correct, I'd assume the deficit would shrink at some future date.

Yeah, I was off by 5 years ... I used 60 when doing the quick math in my head. smh

people turning 65 this year were born in '52. The number of births kept increasing until about 57, then levels off and starts falling around '61. So we've got a few more years of increasing retirees, and a decade until it begins to decline.

 

[Visbek]

There are two choices cut taxes and reduce benefits. The rest is parsley. I haven't ruled anything out.

You sure about that? Because it sure looks like you slammed the door, right there, on:

• paying SS out of general funds
• borrowing to close the SS deficit
• privatization

While doing any of those three would require an act of Congress, and privatization would be stunningly expensive, they certainly are options.

We are where we are because politicians have kicked-the-can on the system for decades with small talk and euphemisms. All I ask for is an honest discussion.

OK then. That honest discussion should include how it isn't just the politicians, it's senior citizens and their advocates. Any time anyone talks about cutting SS, they go to war.

In this particular instance, politicians are mostly doing what their constituents are telling them to do.

If you want to raise taxes, the question is upon whom.

Workers and/or the wealthy.

Or, we can get rid of this shell game. Remove payroll taxes; increase other taxes to make up the shortfalls; pay for senior citizen pensions and disabled insurance out of general funds. AFAIK that's what most nations do, with basically the same results.

If you want to cut benefits, the question is on whom.

That's even more obvious: Recipients of SS benefits.

These issues are why I point people to the CFRB's interactive tool. You can adjust a few parameters, and see how the changes that you select are likely to influence the outcome, and whom it will cost.
The Reformer: An Interactive Tool to Fix Social Security

For example: We can get SS pretty close to solvent for 75 years by:
• Indexing longevity to 67
• Switch to chained CPI
• Re-index the maximum payroll tax income level
• Increase payroll taxes by 1.25%

Bam. Donezo. Taxes go up a little, benefits go down a little. It's definitely more fair than putting everything on retirees or everything on workers. Yes, lots of people want something for nothing, but I think this -- or something like it -- is achievable.

I do not see the point of taking 30 percent cuts so that I can be spare a 25% random cut. Call me stupid. It sounds like I am just taking a needless 5% reduction. That isn't a serious proposal.

...and that sounds like you are ruling out another option, namely cutting benefits.

I guess that means higher taxes. Of course, Congress just voted in a big tax cut, so.... Good luck with that.

I do not believe that we agree upon what the system is suppose to do, enhance we will never agree on a 'solution'. Separately, my 'solutions' are apt to see draconian to those who do not believe the problem is serious..... My guess is that no adult conversation is coming. We will wait until the crisis defines the response.

So you want to have an adult conversation, but you don't want to have an adult conversation, because you think people are going to ding you for picking a solution. Seems odd, especially since there do seem to be people who are willing to discuss this, and are willing to advocate for specific solutions.

 

[Carjosse]

I think that a government paying its debts is mandatory.

It even says that in the Constitution, it would be unconstitutional to not pay them.

 

[JoeTheEconomist]

You sure about that? Because it sure looks like you slammed the door, right there, on:

• paying SS out of general funds
• borrowing to close the SS deficit
• privatization

All I ask for is an honest conversation. I couldn't care less what form reform takes.

Paying the money out of the General Fund, means that we are taking money from people who do not participate in SS in order to preserve a system that pays Bernie Sanders $50K per year, and many poor seniors nothing. It is the point where Bernie Sander didn't pay for his benefits, and we are going to ask Americans to forego things like student loan reform so that we can prolong a program that will require greater and greater subsidies from the government as time passes. The fact is that paying out of the general fund can be reduced to option two "borrowing to close the SS deficit", because we already spend more than we take in.

"borrowing to close the SS deficit" means that we are going to force our children to pay the taxes that we would not - we pretty much already do that. In this case, we want to preserve a system that rewards the rich at the expense of the poor. Do you want your grandkids paying off the bills that made sure that Bernie Sanders didn't miss his 50K paycheck. This is the problem with general fund subsidies. It make the program a welfare program for the rich. The only positive of this idea is that politicians get to ignore the problem for another X years.

privatization is very expensive. It would cost about $30 trillion in total. So I can't oppose anything until I hear where that money is coming from. It can come in parts from (A) seniors in the form of reduced benefits (B) those approaching retirement from lower benefits or higher taxes (C) those younger in the form of lower benefits or higher taxes. So it means cutting benefits and raising taxes. So it is just the same mix with different players. Do you believe that we should break the promise of Social Security to future retirees in order to keep them for those people today. That is what politicians want to do because they will be gone by the time the impact is felt.

Separately privatization is just a bad policy. It shifts the cost of risk from insurance to savings. On a policy basis that is a disaster waiting to happen. If this were a good strategy, we would all have personal auto wreck accounts.

OK then. That honest discussion should include how it isn't just the politicians, it's senior citizens and their advocates. Any time anyone talks about cutting SS, they go to war.

In this particular instance, politicians are mostly doing what their constituents are telling them to do.

Correlation does not imply causation. We have been at war for nearly 2 decades, the wisdom of which is always questioned in the campaigns and somehow never followed-up on in the aftermath. War and Social Security have no connection.

Politicians aren't answering questions that we aren't asking. It is not the job of politicians to fix the problems we don't believe we have. The ones who try do not get elected because voters want action on immediate things. Your point goes to the idea that politicians are suppose to lead us into a better world. I think that is expecting too much. The problem we have is the media does a poor job of informing the public, hence the voters do not do their job, hence the politicians do theirs.

 

[JoeTheEconomist]

It even says that in the Constitution, it would be unconstitutional to not pay them.

The OP is a red-herring. No one is seriously talking about not repaying the debt held by Social Security. The problem is that reserve represents about a nickel of every dollar of problem. The Trust Fund is basically the fuse attached the bomb, and yes it is burning. So the answer to the OP, is yes is going to keep burning whether the Constitution likes it or not.

 

[JoeTheEconomist]

That's even more obvious: Recipients of SS benefits.

These issues are why I point people to the CFRB's interactive tool. You can adjust a few parameters, and see how the changes that you select are likely to influence the outcome, and whom it will cost.
The Reformer: An Interactive Tool to Fix Social Security

For example: We can get SS pretty close to solvent for 75 years by:
• Indexing longevity to 67
• Switch to chained CPI
• Re-index the maximum payroll tax income level
• Increase payroll taxes by 1.25%

Bam. Donezo. Taxes go up a little, benefits go down a little. It's definitely more fair than putting everything on retirees or everything on workers. Yes, lots of people want something for nothing, but I think this -- or something like it -- is achievable.

I think it is great that people use the CRFB calculator to advertise the problem. It is not however a meaningful measure for two reasons.

This solutions tend to affect each other. If you raise the retirement age, there are fewer years over which to capture savings from switching to Chain-CPI. Separately, these solutions assume that these changes do not affect wage growth. If you increase payroll taxes, you will slow the wage growth. That will have a nasty impact on Medicare as well.

In terms of your solution, it is asking kids to pay the taxes that we didn't. It rewards those who have put in the least and obstructed progress the most. It is tax increases and benefit cuts on someone else in my case. While I might like the results, I would tell younger Americans it is exactly the same deal I took in 1983 and 40 years later I am looking at a system that is ready to collapse in my retirement.

The problem is more serious than most Americans see because there is no adult conversation. Today we go on and on about demographics, which do not cause the problem. They tend to more the structural problems more visible. We do not talk about the causes or the size of the impact. Yes I have become convinced that benefit cuts are coming. It is a matter of the math, and the degree of indifference in the public about the system. My guess is that we do nothing long enough that the crisis will define the solution. At which point, voters young and old are irrelevant, pretty much like the financial crisis in which we bailed-out those who deserved it the least.

 

[Visbek]

All I ask for is an honest conversation. I couldn't care less what form reform takes.

...and then you immediately start slamming the door on options -- and accept the fundamental deceptions of SS. Nice.

Paying the money out of the General Fund, means that we are taking money from people who do not participate in SS in order to preserve a system that pays Bernie Sanders $50K per year, and many poor seniors nothing.

You want an honest conversation? OK.

The payroll segregation of SS is total bull****, it's an illusion to make a safety net more palatable to Americans. We should just get rid of the whole illusion, and set up a standard system to provide a basic living for seniors and the disabled. That way, we don't have to deal with the deceptive "crisis" mentality all the time, we can just say "wow this program is expensive."

I might also add, if we can't find any other option, then it is either "pay out of general funds" or "slash benefits by 20% or more."

Oh, and who are these "undeserving" seniors? Might they be former home makers receiving spousal benefits? People who have no other income? Who will end up on the street without SS? Hmmmm.

"borrowing to close the SS deficit" means that we are going to force our children to pay the taxes that we would not....

Just like we do with EVERY OTHER GOVERNMENT PROGRAM.

privatization is very expensive.

Yes, I said that. To be more precise, though, it is more expensive in the short term, and saves money in the long term.

Do you believe that we should break the promise of Social Security to future retirees in order to keep them for those people today.

I believe that if we move to a privatized system, then in the long term costs will drop dramatically. It will take a long time for it to pay off, but eventually it will pay off.

Separately privatization is just a bad policy. It shifts the cost of risk from insurance to savings. On a policy basis that is a disaster waiting to happen. If this were a good strategy, we would all have personal auto wreck accounts.

And yet, we are perfectly fine with switching from defined benefit pensions to 401(k)s, and encouraging people to max out their IRAs. Hmmmmm

Correlation does not imply causation. We have been at war for nearly 2 decades, the wisdom of which is always questioned in the campaigns and somehow never followed-up on in the aftermath. War and Social Security have no connection.

Seriously?

You can't recognize a metaphor?

Let me rewrite that in a more literal fashion. Every time someone talks about making a structural change to Social Security, senior citizens and their advocacy groups (and other Americans) get incredibly upset, and lose their ****ing minds over it. They then advocate to leave SS alone, with writing campaigns, call-ins, and so forth.

This is what happened to Bush 43. Right after his re-election, he and declared "I've got a mandate now, I'm banking my political capital on fixing Social Security" and were flayed alive for it. There were many reasons for this failure -- an imperfect plan, partisan politics, broader economic nervousness -- a big component was that Americans, particularly seniors, strongly dislike the very idea of changing SS.

Politicians aren't answering questions that we aren't asking. It is not the job of politicians to fix the problems we don't believe we have.

Or:

Lots of people know already that there is a problem, and that the only way to fix a problem is to actually propose solutions. The problem is that people want benefits, but ultimately don't want to pay for it. To make matters worse, we've spent decades borrowing instead of dealing with

And again: You have knocked out 3 major options. That leaves us with the following:

• Increase taxes
• Cut benefits
• Combination of the above

You want to be honest? Those are your choices. What's your preference?

 

[Critter7r]

...

And yet, we are perfectly fine with switching from defined benefit pensions to 401(k)s, and encouraging people to max out their IRAs. Hmmmmm

Actually, it isn't "we" that were perfectly fine with switching to 401(k)s, it was employers that switched, because 401(k)s cost them essentially nothing unless they match funds, and most don't. "We" just accepted it because it was the only thing being offered, and something is usually better than nothing.

 

[JoeTheEconomist]

...and then you immediately start slamming the door on options -- and accept the fundamental deceptions of SS. Nice.



You want an honest conversation? OK.

The payroll segregation of SS is total bull****, it's an illusion to make a safety net more palatable to Americans. We should just get rid of the whole illusion, and set up a standard system to provide a basic living for seniors and the disabled. That way, we don't have to deal with the deceptive "crisis" mentality all the time, we can just say "wow this program is expensive."

I might also add, if we can't find any other option, then it is either "pay out of general funds" or "slash benefits by 20% or more."

Oh, and who are these "undeserving" seniors? Might they be former home makers receiving spousal benefits? People who have no other income? Who will end up on the street without SS? Hmmmm.



Just like we do with EVERY OTHER GOVERNMENT PROGRAM.



Yes, I said that. To be more precise, though, it is more expensive in the short term, and saves money in the long term.



I believe that if we move to a privatized system, then in the long term costs will drop dramatically. It will take a long time for it to pay off, but eventually it will pay off.



And yet, we are perfectly fine with switching from defined benefit pensions to 401(k)s, and encouraging people to max out their IRAs. Hmmmmm



Seriously?

You can't recognize a metaphor?

Let me rewrite that in a more literal fashion. Every time someone talks about making a structural change to Social Security, senior citizens and their advocacy groups (and other Americans) get incredibly upset, and lose their ****ing minds over it. They then advocate to leave SS alone, with writing campaigns, call-ins, and so forth.

This is what happened to Bush 43. Right after his re-election, he and declared "I've got a mandate now, I'm banking my political capital on fixing Social Security" and were flayed alive for it. There were many reasons for this failure -- an imperfect plan, partisan politics, broader economic nervousness -- a big component was that Americans, particularly seniors, strongly dislike the very idea of changing SS.



Or:

Lots of people know already that there is a problem, and that the only way to fix a problem is to actually propose solutions. The problem is that people want benefits, but ultimately don't want to pay for it. To make matters worse, we've spent decades borrowing instead of dealing with

And again: You have knocked out 3 major options. That leaves us with the following:

• Increase taxes
• Cut benefits
• Combination of the above

You want to be honest? Those are your choices. What's your preference?

I appreciate your thoughts and the exchange. Here is why no solution that I suggest will ever make sense to you. "The payroll segregation of SS is total bull****, it's an illusion to make a safety net more palatable to Americans. We should just get rid of the whole illusion, and set up a standard system to provide a basic living for seniors and the disabled. " I see this segregation as vital, and the only thing that separates Social Security from a safety-net. Instead of making SS a safety-net, just end it and transfer the resources to an actual safety-net.

And yet, we are perfectly fine with switching from defined benefit pensions to 401(k)s, and encouraging people to max out their IRAs. Hmmmmm

I am fine with that switch so long as we don't switch SS in the same direction. Pensions and savings go together like bacon and eggs. At this point, putting an investment account into SS is like switching the eggs for sausage.

 

[JoeTheEconomist]

Lots of people know already that there is a problem, and that the only way to fix a problem is to actually propose solutions. The problem is that people want benefits, but ultimately don't want to pay for it. To make matters worse, we've spent decades borrowing instead of dealing with

And again: You have knocked out 3 major options. That leaves us with the following:

• Increase taxes
• Cut benefits
• Combination of the above

You want to be honest? Those are your choices. What's your preference?

People can't agree on what the program is suppose to do. You want it to be a safety-net. Others want it to be a personal savings account. I want it to be a pension. You want solutions provided that they fit into your paradigm for the system. In general there is little consensus on what the program is suppose to do, or what problems it faces. Millions of people think the solution is as simple as 'putting the money back'.

 

[Visbek]

I appreciate your thoughts and the exchange. Here is why no solution that I suggest will ever make sense to you. "The payroll segregation of SS is total bull****, it's an illusion to make a safety net more palatable to Americans. We should just get rid of the whole illusion, and set up a standard system to provide a basic living for seniors and the disabled. " I see this segregation as vital, and the only thing that separates Social Security from a safety-net. Instead of making SS a safety-net, just end it and transfer the resources to an actual safety-net.

It isn't vital.

The world will not come crashing down if we treat SS like a safety net, or replace it with a safety net, or fund it from general revenues. A tax is a tax is a tax, revenues are revenues, and there is no magic to a payroll tax. Lots of nations have state-run pension systems that are funded by general tax revenues.

And disagreeing with me on this point doesn't let you off the hook from the need to commit to a solution, or at least say which solutions you will accept.

People can't agree on what the program is suppose to do. You want it to be a safety-net. Others want it to be a personal savings account. I want it to be a pension. You want solutions provided that they fit into your paradigm for the system. In general there is little consensus on what the program is suppose to do, or what problems it faces. Millions of people think the solution is as simple as 'putting the money back'.

Millions of people are wrong. No surprise there, given how the system is basically structured to fool them.

Americans don't agree on a great deal of public policy. That doesn't change the fact that SS is headed for a deficit; that change is required; that all the options have major downsides.

Disagreement about what we should do also doesn't let you off the hook from the need to commit to a solution, or at least say which solutions you will accept.