Social Security is now in the red

• FatHobbit

  

  http://money.cnn.com/2010/08/05/news/economy/social_security_trustees_report/index.htm?hpt=T2
  
  WTF. I knew this was going to happen eventually, but it's a crock of shit that they are going to continue to take money out of my paycheck when there is no plan to make sure there's anything left for me.
• believer

  

  ^^^Which is precisely why politicians on both sides of the aisle know quite well that they have almost no choice but to find a way to bring the program back to sea level...or face MAJOR political peril.
• IggyPride00

  

  Alot of people took early retirement because they couldn't find jobs. That, and high unemployment are why it's in the red.
  
  Things are going to get interesting though when they start cashing in the surplus trust that has been building for 30 years now that is full of IOU's because it was used for new spending and as the rational for tax cuts (depending on which party you subscribe to).
  
  Asuming the government honors the IOU's, S.S is solvent through something like 2037, at which point many of the boomers will have died off and the strain on the system won't be so bad. That is why Greenspan came up with the surplus plan where it had previously been a pay-go program. The surplus that was built will basically cover the "red" portion that everyone is freaking out about.
  
  S.S is not broke right now (unless we are planning the first default in U.S history), and is actually in much better shape than any of the other entitlement programs.
  
  It is Medicare, and not S.S that is the real long term problem that no one quite has a good solution for.
• Manhattan Buckeye

  "Alot of people took early retirement because they couldn't find jobs. That, and high unemployment are why it's in the red."
  
  That's a big part of it, but the contributions on the upper-middle class range (say, $75,000 to the SS max) has been hit harder than any previous recession. Certainly unemployment hurts in all cases, but the idea that the "income wealthy" can shoulder additional burdens is no longer plausible. IMO that's why the 'fix' of just removing the cap isn't going to work.
  
  Even the biggest optimist has to admit that many of the government forecasts were overly pollyannish, there's no reason to believe that the current forecasts aren't as well, particularly if the initial forecast for a deficit was years beyond this year (which to my knowledge was NOT this year, if I can find a link I'll post it).
  
  What happens if high unemployment continues for a decade, or more? SS taxes on capital gains? Wealth taxes?
• IggyPride00

  

  IMO that's why the 'fix' of just removing the cap isn't going to work.

  They won't remove the cap, no one other than the fringe is even talking about that. The reason is because Social Security has never been a welfare program, and lifting the cap without commiserately exploding the benefits received by those who pay on monster incomes would turn it into welfare.
  
  That is the reason that weather you make a billion dollars or $20,000, you only pay tax on X amount of income with set benefit levels depending on your contribution. It has never been a plan to re-distribute wealth, contrary to what many people think. If you pay more because you have a higher income, you get a higher benefit.
  
  Conservatives and liberals don't philosophically agree on the very nature of the program, but for the most part it is remained incredibly stable and insulated from political attacks because it is not a welfare/redistribution program. It polls very high with the American people and always has.
  
  Politicians however know that attitudes towards it would change tremendously if you eliminated the caps on income, and then turned it from what it is into a wealth transfer program. I know some people are paranoid and have convinced themselves that it is the secret plot, but it is not on the table in any way.
  
  Most likely the cap may go up a bit, but it won't be a massive number. The other idea I have heard tossed around is to start to increase the retirement age by 1 month a year, starting with a certain age (probably those under 50 years old) as that would be a realistic way to phase in the changes without really turning the program upside down.
  
  2015 has long been the year that yearly inflows go negative, so it is a little ahead of schedule. The one quasi bright side to the doom and gloom crowd is that even if the government defaults on the S.S surplus trust, the yearly inflows from workers would still cover 75% of promised benefits. When you get past all the rhetoric, Social Security is actually in decent shape and can be fixed with a few tweaks to the current set-up.
  
  If you listen to Greenspan, the debt commission guys and the talking heads, everyone is in agreement for the most part that S.S is the easiest to fix by making small tweaks to the formula as far as future benefits, retirement age, amount subject to the income cap and the employer/employee contribution. No different than what Reagan did 25 years ago.
  
  As I said, S.S is the easy one. Medicare is the one no one wants to talk about, nor does anyone have any good solutions for.
• majorspark

  

  IggyPride00;450615 wrote:2015 has long been the year that yearly inflows go negative, so it is a little ahead of schedule. The one quasi bright side to the doom and gloom crowd is that even if the government defaults on the S.S surplus trust, the yearly inflows from workers would still cover 75% of promised benefits. When you get past all the rhetoric, Social Security is actually in decent shape and can be fixed with a few tweaks to the current set-up.
  
  If you listen to Greenspan, the debt commission guys and the talking heads, everyone is in agreement for the most part that S.S is the easiest to fix by making small tweaks to the formula as far as future benefits, retirement age, amount subject to the income cap and the employer/employee contribution. No different than what Reagan did 25 years ago.
  
  As I said, S.S is the easy one. Medicare is the one no one wants to talk about, nor does anyone have any good solutions for.

  I will agree Medicare is a big problem. Possibly even greater. But which straw is going to break the camel's back? The biggest problem is unbridled federal spending. They rob our forced investments in the SS program with impunity. It is sad that everytime I cut a check to the feds for SS, I realize I am an agent of the federal government compelled by law to collect their investment, though I know the youthful will likely never see a return on it.
  
  I am not a big government fellow nor am I a fan of SS. It was not instituted correctly or morally (constitutional arguments aside). It is a Ponzi scheme that will end as all Ponzi schemes do. Those investors that came in at the end will pay the heaviest price.
• jhay78

  

  IggyPride00;450615 wrote:They won't remove the cap, no one other than the fringe is even talking about that. The reason is because Social Security has never been a welfare program, and lifting the cap without commiserately exploding the benefits received by those who pay on monster incomes would turn it into welfare.
  
  That is the reason that weather you make a billion dollars or $20,000, you only pay tax on X amount of income with set benefit levels depending on your contribution. It has never been a plan to re-distribute wealth, contrary to what many people think. If you pay more because you have a higher income, you get a higher benefit.
  
  Conservatives and liberals don't philosophically agree on the very nature of the program, but for the most part it is remained incredibly stable and insulated from political attacks because it is not a welfare/redistribution program. It polls very high with the American people and always has.
  
  Politicians however know that attitudes towards it would change tremendously if you eliminated the caps on income, and then turned it from what it is into a wealth transfer program. I know some people are paranoid and have convinced themselves that it is the secret plot, but it is not on the table in any way.
  
  Most likely the cap may go up a bit, but it won't be a massive number. The other idea I have heard tossed around is to start to increase the retirement age by 1 month a year, starting with a certain age (probably those under 50 years old) as that would be a realistic way to phase in the changes without really turning the program upside down.
  
  2015 has long been the year that yearly inflows go negative, so it is a little ahead of schedule. The one quasi bright side to the doom and gloom crowd is that even if the government defaults on the S.S surplus trust, the yearly inflows from workers would still cover 75% of promised benefits. When you get past all the rhetoric, Social Security is actually in decent shape and can be fixed with a few tweaks to the current set-up.
  
  If you listen to Greenspan, the debt commission guys and the talking heads, everyone is in agreement for the most part that S.S is the easiest to fix by making small tweaks to the formula as far as future benefits, retirement age, amount subject to the income cap and the employer/employee contribution. No different than what Reagan did 25 years ago.
  
  As I said, S.S is the easy one. Medicare is the one no one wants to talk about, nor does anyone have any good solutions for.

  
  Great. SS isn't too bad for now, Medicare is worse- but how does Obamacare affect all this? There's no way we can continue to expand the welfare state without serious consequences in the near future.
• Manhattan Buckeye

  I still don't get how increasing the retirement age for younger workers "isn't a big deal." It is generational theft. So we're telling current workers and future workers that our dumbass parents and grandparents that bought into this program and "by God deserve what they were promised" even though they were the ones that made those promises TO THEMSELVES!
  
  Any SS reform needs to involve reduction of current benefits. If granny doesn't like it she can move in with her kids, assuming they have a job and can afford a house.
• Paladin

  I chuckle. S.S. will be fixed. Medicare is the real problem. Watch the Rs join the Ds to fix S.S. as Granny won't be denied, lol. I'd like a reasonable response from some of you Right wingers -- what would happen to the millions & millions & MILLIONS of old people when S.S. is eliminated and why would you expect the country to agree with it ?
  
  Investments ?? Everyone has seen what the market can do to investments. Or bad investments.
  
  Old & infirmed ? Poor health & inability to work comes with old age.
  
  Jobs ? Elderly holding onto jobs doesn't do much for the jobs market for younger people.
• CenterBHSFan

  

  Well it used to be that the infirm/elderly were taken care of and looked after by their relatives, neighbors and other loved-ones.
  
  How many people in today's world would even seriously consider it?
• Paladin

  Swing & a miss. Strike one !
• CenterBHSFan

  

  Paladin;451082 wrote:Swing & a miss. Strike one !

  Please explain your reasoning for believing that I'm wrong. I can list many sources that say I'm right. Can you?
• Paladin

  The question was "what would happen to the millions & millions & MILLIONS of old people if S.S. was eliminated and WHY would you expect the country to agree with it" ? You offered nothing in realistic terms. NADA. But I'm waitng for more intelligent policy comments from the Right wing, not your drivel. Any idiot can make a comment here. Serious policy discussion of this is sorely lacking. The Rs will not vote to eliminate S.S. ( and you know it). Now, convice the country that elimination should happen & what will become of tens of millions of old folks ( that will be progressive in numbers as the country ages each year). Don't be stupid.
• Mr. 300

  

  Where has anyone called for elimination of SS?? Restructure, yes, and I think we are all in agreement that it won't be there in the future if we keep going the way we are. What will happen??? Hmmm. What will happen to the American taxpayer with all these entitlement programs expanding?? What is coming next?? Cape-N-Trade.....Fuel Tax....Consumption Tax.....Death Tax.......etc. At what point will we work strictly for the gov't and not ourselves?? I love these self righteous libs here who babble about taking care of everyone, but don't think about the faucet being shut off at some point. The TEA Party has it right in their name.........
• Manhattan Buckeye

  "Where has anyone called for elimination of SS?? "
  
  In the "intelligent policy" poster's imagination, perhaps?
  
  No one called for elimination, just that ALL of us need skin in the game, especially the folks that got us in this mess.
• BGFalcons82

  

  Paladin;451025 wrote:I chuckle. S.S. will be fixed

  
  You can't just say that and run away. What is YOUR fix, since the elitists in Washington don't have any cajones to fix it? You make it sound soooooo easy, all we need is the "EASY" button. Please tell us.
• Mr. 300

  

  BGFalcons82;451147 wrote:You can't just say that and run away. What is YOUR fix, since the elitists in Washington don't have any cajones to fix it? You make it sound soooooo easy, all we need is the "EASY" button. Please tell us.

  Houston, we have a problem.
• Jason Bourne

  

  Certainly no easy answer.
  
  However, if it's guts you want, cut it. The second the money runs out, that's it. It is an object lesson in the inability to continue on in your way of living based on someone else's income. And who gets effected by this? The current generation. Consider me effected.
  
  But, my thought has always been to leave this country better for my kids and grandkids. Guess what, if you eliminate this ponzy scheme now, no other generation has to go through this.No delusions of granduer; no built up hopes of the "easy" life; no dependency. Just freedom. And I'll take freedom over security any day.
• CenterBHSFan

  

  Paladin;451115 wrote:The question was "what would happen to the millions & millions & MILLIONS of old people if S.S. was eliminated and WHY would you expect the country to agree with it" ? You offered nothing in realistic terms. NADA. But I'm waitng for more intelligent policy comments from the Right wing, not your drivel. Any idiot can make a comment here. Serious policy discussion of this is sorely lacking. The Rs will not vote to eliminate S.S. ( and you know it). Now, convice the country that elimination should happen & what will become of tens of millions of old folks ( that will be progressive in numbers as the country ages each year). Don't be stupid.

  I never said I offered an answer to your proposed question. I simply stated a fact that dealt with one part of your post, and then asked a question of my own.
  
  You posted that my post was wrong, I asked why and said that I have proof that my ONE statement was right. And I asked if you have proof that my ONE statement/question was wrong.
  
  And then you go off on a name-calling tangent like some sophmoric kid who got mad at his best friend in highschool.
  
  Ok, let's focus again on "stupid", "idiot", "drivel". Because judging from your posts they always seem to go like this:
  "stupid R's"
  "LOL at the R's"
  "R's offer nothing"
  ... and so on and so on.
  
  BTW, you answered my question as far as people (in general) taking care of the elderly/infirm family members, friends and other loved ones.
• CenterBHSFan

  

  Oh and by the way, I wouldn't mind one bit if SS was eventually, over a certain number of years, phased out totally. Those currently paying into it could keep it. The generation that hasn't started their working lives yet would not be bothered with it.
• BGFalcons82

  

  Jason Bourne;451167 wrote:Just freedom. And I'll take freedom over security any day.

  
  The majority of Americans used to agree with this. In today's world, where the elitist leaders are promoting bailouts, handouts to unions, much more lucrative government programs, and free ObamaKare, they certainly believe in governmental security for all in lieu of freedom. Americans get to state how they believe starting at 6:30 a.m. on November 2, 2010.
• believer

  

  CenterBHSFan;451173 wrote:Oh and by the way, I wouldn't mind one bit if SS was eventually, over a certain number of years, phased out totally. Those currently paying into it could keep it. The generation that hasn't started their working lives yet would not be bothered with it.

  I think it can be phased out but it would have to be incremental over a couple of generations. How do you determine the cut-off points? Who gets to receive max benefits, who gets some, and who gets none?
  
  Like I've said on here several times I'm a conservative who is EXPECTING a full return on my 35+ years of government-mandated "investment."
• Jason Bourne

  

  believer;451190 wrote:I think it can be phased out but it would have to be incremental over a couple of generations. How do you determine the cut-off points? Who gets to receive max benefits, who gets some, and who gets none?
  
  Like I've said on here several times I'm a conservative who is EXPECTING a full return on my 35+ years of government-mandated "investment."

  
  I think that this is tough to consider. One the one hand, I am not a fan of the program. Dare I say detest. On the hand, I've paid into to it, why SHOULDN'T i expect a return!?
• tk421

  

  Young people shouldn't have to work till 80 to support their parents and grandparents who have completely robbed them blind with SS. You older people expecting a full return on your money don't deserve it. You are the ones who voted these politicians into office and went along with this generational robbery. My generation and younger shouldn't have to work to death to pay for you.
• Mr. 300

  

  tk421;451276 wrote:Young people shouldn't have to work till 80 to support their parents and grandparents who have completely robbed them blind with SS. You older people expecting a full return on your money don't deserve it. You are the ones who voted these politicians into office and went along with this generational robbery. My generation and younger shouldn't have to work to death to pay for you.

  
  That's the whole premise for the ponzi scheme that is SS....everyone pays but only those at the top of the chain get to receive the benefits. Those at the bottom are going to get nothing. I want ALL of my monies paid in a private account. This could have been done when the account had trillions in it.....but of course the idiots who run the country and don't pay into SS set that up for themselves, leaving average Joe to fend for himself.