In the case of Social Security, that's actually true. And I say this as one of the "old people".
Social Security has been paying more old-age benefits than it can afford since the 70's. Note what I high-lighted: I'm referring to the OASI (old age and survivor insurance) benefits. These are separately accounted by Social Security, if you take the time to look.
Please stop right there before you reply: it isn't because of SSI, disability fraud, or "stealing the surplus". All of those are separately accounted. Anyone who tells you differently is either misinformed or deliberately lying to inflame you.
The truth is that Congress increased benefits greatly back in the 70's and added the COLA without properly funding it. The Reagan administration tried to correct it in the 80's, but their demographic and economic assumptions were too optimistic.
Since then, anyone that even suggests trying to fix the problem is demagogued out of office. So, the problem just gets worse every year.
How bad is it? At the moment, benefits would have to be reduced 16.4% across the board, or taxes raised 21%, to put Social Security back into balance for the next 75 years.
Lets take everything they got...(government solution)
Anyone that suggests that is an idiot. But, the reality is that any solution will have to be a shared sacrifice. Current and near-future Social Security beneficiaries must accept reduced benefits, and current and near-future taxpayers must pay additional taxes.
We lost the opportunity for an "easy fix" long ago. But, the kind of sniping I see on this thread is a perfect example of why there hasn't been a timely resolution. Rather than throwing blame at each other, it's time for all generations and work together to fix Social Security.
However, perpetuating it isn't the answer -- demographic trends will just make it more and more expensive until it's unsustainable. Other countries have transitioned to an asset-based systems while preserving the retirement security of current generations. But, everyone has to accept responsibility and participate -- and be willing to give up something.
Excellent post sir. Thank you for your contribution of real data to this thread.
As one who is in the group that will have to pay for more people then ever before in American history, my hope was that W would have been able to partially privatize the program in ‘05 with reduced benefits in the future.
It would be terrible to say tomorrow that those who are eligible to receive SSI and Medicare at age 65 now have to wait until 67.
However a phase in of that process is a must. As is a partial privatization, as are young people willing to be paid out less in 35 years (which from my anecdotal evidence, most people my age do NOT expect to get anything from SSI/Medicare 30 years from now)
“We lost the opportunity for an “easy fix” long ago. But, the kind of sniping I see on this thread is a perfect example of why there hasn’t been a timely resolution. Rather than throwing blame at each other, it’s time for all generations and work together to fix Social Security.”
I agree, however, if the SS Trust Fund would have actually existed, in other words, money really in the lockbox, rather than having been squandered in the General Funds, then it would have been accruing interest from having been properly invested. But instead it was squandered. Therefore, if it had been properly saved and invested, there would have been plenty to fund our retirement savings.
That money we paid into SS, just as if we invested into an interest bearing savings account at the bank, would legitimately have been ours, all of it, including the interest, just like in a bank account with interest. So if we got more than we paid in in actual dollars, that’s just fine, because would it have been invested properly, SS money would have been returned to us in interest also, which would have been a huge amount of dollars, not just in principal. It’s all ours, we retired people.