The Trustees Report released Monday discusses the end of the Social Security program for retirement benefits to be in 2035, which is three years earlier than its previous estimate in 2011.
The current program supporting Medicare will dry up as soon as 2024, along with Social Security's disability relief program in 2016 (also 2 years earlier than predicted).
Neither side (political party) has offered a plan for Social Security, which at a 2011 cost of $736 billion is the U.S. government’s largest single program.
- What do you guys feel is the solution to addressing the issue of social security?
- Will privatization of these social programs be the new norm for the US? Or are lawmakers just holding out for the last possible moment to address it?
In order for Social Security to be fixed, it needs to be changed from the current PAYGO system. PAYGO works fine when each following generation is larger, but it does not work otherwise.
Temporary "fixes" might include raising the retirement age, the cap for OASDI payroll taxes, and so on. Our politicians will avoid truly fixing entitlements for as long as possible. Privatization of SS - something like the Chilean model - will ultimately be the solution.
This wont be addressed until the last dollar is depleted from the fund.
If you think otherwise, you haven't been paying attention to history. See Bush Administration trying to privatize this in 2004. See Bush Administration trying to address the Housing Bubble in 2006. See Ron Paul trying to address the seriousness of the Housing Bubble in July of 2002. See the serious calls of the looming Student Loan bubble.
None of these have been addressed, why would this? Dont you remember who votes?
The solutions that you will hear will be "more revenue, more revenue now!" by taking a lot more from the 'rich' (people making more then the cap of $110K) and businesses. This is hardly a solution, as we all know this money will never, ever go toward the SS fund but toward funding some other bullshit program like GSA's all expense paid trips to Vegas or to teach people in Taiwan fucking English and how to work in a call center taking US calls.
You will have to raise the retirement age. That has been pretty much rejected by Democrats. You will also need to ween new workers from the govt funded toward private funded SS accounts. And the big 'to do' about going private is that those accounts can lose money or citizens wont invest the money properly and we will end up having a bunch of 70 year olds with no retirement to live of of. I say cry me a god damn river to those people.
As it is now structured, our Social Security system is just the world's biggest Ponzi scheme, which is quickly approaching insolvency.
Too bad politicians will continue to kick this can down to road to appease older generations, who as a demographic vote at a much higher percentage compared to younger generations who bear the increasing costs.
I think the easiest solution would be to start reducing promised benefits to future recipients today, along with increasing the retirement age, and reducing who will be eligible for benefits.
Guys, love the discussion. Wanted to say I think "Insolvency" would be the wrong word to use, once the trust fund is depleted, the program is still able to pay out 73-75% of benefits indefinitely. While this is not ideal, it is far from the end of America. I think increasing the retirement age pegged to increases in life expectancy (about 1 month every two years) with a hardship exemption (for instance coal miners, construction workers, those with strenuous physical activity at their jobs) would be exempt from the raise in retirement age and would stay at the 66 mark. I also agree with raising the cap on taxable income up to the
I would also change the bend point, resulting in the highest bend point being above $64,000, with the $107,000 bend point eliminated. However, those in the $38,000 - 64,000 would get an increase from 10% return to 30% return. Those 9,000 - 38,000 would get a decrease to 30%.
I would also raise taxes. Taxation is currently capped at $106,800, I would restore taxes to the levels intended under Reagan's reforms. Reagan intended for taxes to be placed on 90% of wages. But COLA adjustments haven't kept up with wages and now cover only 86% of wages, so I would raise taxes appropriately. Taxes would be raised in years in which COLA adjustments are not made as well. This cap change would not fully kick in until 2050. I would also recommend changing from the standard CPI to the chained CPI for calculating COLAs.
Thoughts?
Cool, so if we're going based on intention then we should eliminate the AMT, too, given that it was a tax to ensure that the wealthy didn't escape taxation.
19,000 people paid AMT in 1970. Today it's millions.
http://www.smartmoney.com/taxes/income/the-alternative-minimum-tax-9540…
If the govt. decided to end social security, what would happen to the taxes I've already paid into the program?
Good point, I guess I should have said insolvency seems to paint a picture where people imagine the program is completely over, as in no more checks going out.
Laser, the money would most likely be transferred into the general fund if the program were completely eliminated. There is essentially a 0% chance of that happening because of its popularity.
This makes me wonder, who actually likes SS? I mean, you get money once you retire, but not enough to live on. If you are under 55, you probably won't see a dime.
Why not kill it, eat the costs until the current 55 plus crowd dies, and be done? It is not a good program. It is just (inefficiently run) forced savings.
I say we take a page out of Jonathan Swift's book and eat all the old people. For all you uneducated gents out there, Jonathan Swift thought we should solve Ireland's burden by eating hungry children....
http://art-bin.com/art/omodest.html
Why can't we do it with granny and pop pop? They already had their fun and it cost us TRILLIONS!
This sounds promising
The premise of the article is a lie- there is no funded SS trust. Social Security is effectively run as a transfer payment (i.e. PAYGO). The trust fund has been repeatedly 'borrowed' from by the Federal Government and is currently filled with promises by the U.S. Government to tap the treasury market and replace the money it borrowed from the fund plus interest. The way SS was supposed to work, in the modern era, was to run large front-end surpluses that would be placed in a trust that would invest conservatively. Over the decades, as the beneficiaries retired and began drawing on the fund, the trust fund would run large deficits, that would equal the early surpluses. But, as you can imagine- leaving politicians near large piles of money is a bad idea. And, the borrowing began...
However, there is a simple solution. End it, immediately. No more transfer payments. Will there be suffering? Of course- all frauds end painfully. But, that is not a justification to continue a fraud. There was a time for a transition time when the U.S. was more fiscally sustainable, but that time, I believe, has passed.
No competent and honest private corporation would want to touch this. Beyond the patent un-workability (i.e.ponzi) of the current system, there is simply no profit incentive that can be maintain in the face of the sheer public sense of entitlement. Imagine a private SS management company cutting benefits to maintain profit margins. Ha!
The whole concept of Social Security has been bastardized. Work was much more manual labor intensive in the 1930s when the concept was conceived, so people literally could no longer work past certain points in their lives. Now people turn 55 and 60 and they just decide to quit working and they expect government assistance to do it. I'm sorry, but if you're not disabled and are doing a sedintary job you have no business retiring unless you can pay for it yourself.
Basically the argument from supporters of SS is that people cant save and take responsibility for themselves. The government needs to guarantee them money or we are going to have a bunch of grandmas and grandpas starving to death.
I don't remember the last time i saw anybody starving to death in America
I like Social Security. It is a great program.
It has its flaws, but overall, it does a pretty good job of spreading the cost to take care of those who can't take care of themselves (the elderly and disabled).
Nobama, according to census figures, 40% of the elderly would be in poverty if it weren't for Social Security. Therefore, I think it is accurate to say that people generally don't necessarily plan ahead like people on this board do. Let's be honest, a grand majority of the people who post here aren't going to be in need of Social Security to get by.
WestCoast, while it is true that you may not see 100% of your benefits, every analysis I've seen from the CBO and the Actuaries puts the possible benefits to be paid out at somewhere between 70-75%. So the fact that you won't see a dime, I think is inaccurate.
Virginia Tech, that is accurate, however, you can't receive reduced benefits until you turn 62, and you can't receive full benefits until you turn 65 (soon to be 66). I do agree the retirement age should be raised (with a hardship exemption), but let's be honest, how many companies want someone in middle management who is 70, yes they are still physically able to do the job, but probably not the sharpest at that point. Also, I'm not too familiar with the AMT, I will have to look into that, but it doesn't have any affect on Social Security as Social Security is completely separately funded (think of it as a separate checking account that the government "steals" for other purposes (roads, bridges, tanks)). It's like if you go to the bank, the bank may not have all 200,000 of your dollars that they claim is in your checking account, because they have been using it for investments, but you still have the right to it, and they must pay it. And it is not as if you are the problem, you provided them with $200,000 therefore you should be able to withdraw $200,000. (On a side note, anyone think it's weird that the dollar sign comes before not after the number even though you say "dollar" after the number i.e. 20$ v $20)
Love the conversation guys, I should just go into policy making...
Yeah, I understand that. Its the libertarian in me that wants to say fuck um for not saving properly, but I also understand that we can't do that. We also can't do what we are currently doing with SS either though.
We can do what we're currently doing with SS, but it will involve raising the payroll tax.
The point I was making about the AMT is that you were saying that we should return to the tax rates that were the intention of the Reagan era reforms. If we're going to operate on intentions, then the entire tax system needs reform because virtually every aspect of the tax system operates in a manner that it was not intended. The AMT is a perfect example of how government doesn't keep its implied promises.
Despite being very not libertarian on fiscal/economic policy, I'm going to have to go ahead and agree with you on both those points. Look at that WSO bringing people together...
I wish there was an option to opt out of SS
I feel like the option of opting out of the program would bring an end to it. People would probably use their extra money that is not going towards taxes to spend it on things in the immediate future rather than investing it for the long run. Which would result in poverty for the elderly.
Opting out would kill SS because the young people who actually make money would realize its a shitty investment for them and opt out. 6.2% and a 6.2% match from your employer, its a very bad deal for people who make good money.
Which is why i want the option to opt out.
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