Posted on 01/06/2020 7:48:26 AM PST by SeekAndFind
2020 is here, and many people are excited about starting a new decade. Yet for those who watch Social Security's financial condition, New Year's Day just means we're a year closer to the challenges facing the key government program.
This year is likely to be the last one that Social Security manages to keep its spending under a key psychological level. Starting in 2021, the amount of money that the Social Security Administration spends on benefits for retirees and survivors of retired workers will exceed $1 trillion for the first time -- and that's just the beginning of an upward surge that will pose problems for the program's finances sometime during the 2030s.
This might not be the first time you've heard about Social Security flirting with the $1 trillion mark. In 2019, the total expenditures from the entire Social Security program -- which include not only retirement and survivor benefits but also the payments it makes to disabled workers and their families -- went over $1 trillion for the first time in the program's 83 years.
Yet even though millions of people rely on disability benefits, the retirement side of Social Security makes up by far the majority of total spending from the program, and so it's in position to follow suit over the $1 trillion mark in quick succession. In 2019, about 90% of scheduled benefits were tied to retirement, compared with just 10% in disability benefits. Few see that proportion changing markedly anytime in the near future.
Moreover, the amount that the government spends on retiree benefits will only rise over time. By 2028, Social Security retirement and survivor benefits will likely cost more than $1.5 trillion, and with payroll tax revenue failing to keep up with that surge, the program will be drawing down nearly $200 billion per year from its reserves to pay scheduled benefits at that point.
There's no agreement in Washington about how to solve the problems that Social Security faces. Some believe that reining in the rate of growth of future benefits is the best way to control spending. And measures like tying future increases in benefits related to costs of living to indexes that grow more slowly than the current inflation metrics could help preserve the program's financial condition longer.
In the past, Social Security has gradually raised the full retirement age, at which participants are entitled to receive full benefits under the program. And some lawmakers have proposed further increasing the full retirement age in an effort to save even more over the long run. Yet for the most part, these measures are aimed merely at slowing the rate of growth in Social Security spending rather than actually reducing it.
Other lawmakers believe that the better solution is to look at program revenue. In particular, one popular provision would lift the current cap on the Social Security wage base, potentially making more income subject to Social Security taxation and thereby boosting revenue. Some of those advocating for a higher Social Security payroll tax would actually seek to increase benefits, with the corresponding rise in the rate of spending from the program.
The demographic surge of baby boomers who are collecting Social Security benefits has boosted the cost of the program immensely over the past several years, and it'll be a long time before death rates among that cohort rise enough to let up the pressure on Social Security expenditures.
Until that happens, you can expect to see total spending on retirement benefits continue to rise. And without action from Washington to bring revenue and expenditures into balance, that will inevitably lead to a massive disruption for those receiving Social Security benefits in the future.
Stop giving Social Security Disability to alcoholics, drug addicts, and able bodied adults...
Apparently SecondAmendment has not read his Constitution.
The Takings Clause says property taken must be reimbursed by the Government.
Welfare is no such takings.
One is voluntary. One is coerced.
Takings applies to coerced.
Social Security myths abound.
For my age group, age 66 is really the earliest you can take it if you want to keep earning wages. Otherwise you have to give it back.
I used to work at Fort Knox. There were a lot of “retired military” guys working there. They were getting their wages as well as their retirement income and actually doing fairly well, financially. But it was reflected in their wages - the jobs paid less than a comperable private sector job - which is why all the people there that were not ex-military were contractors.
That is simply not true. For retirement you or your spouse must pay into the system to receive benefits. The only way foreigners can receive benefits without paying in is if they worked in a country with a retirement program, and that we have a reciprocal agreement with, and there system then pays our system for them to receive benefits.
There is a lot of wrong information on Social Security out there. Had a buddy retire from the Army around the time I did that then went to work for social security. We still talk and some of the things he was telling me didn’t match what I had read on the internet. So I researched it myself, even read the law and the additions to the law.
This led me to a conclusion that is not popular in conservative circles. I think social security is a great program. It has save millions of elderly and disabled from poverty. I think it should have been created by a constitutional amendment instead of as a tax under the 16th amendment but it is what it is.
I see it as the military. The military protects us all. Social security protects us from poverty in our old age and if we are disabled. Big difference is that everyone is protected by the military, even if they never pay a red cent in taxes. Social security you, your spouse, or your parent has to pay in for you to receive it.
Thanks Congress.
There have been a couple of USSC rulings that say you have no property rights in your social security. If you did you could include in it your assets and pass it to your offspring. Its an income transfer tax to move money from the current working generation to the current retired generation. When the current working generation retires the next working generation funds them. When there are more working then retired you have “surplus”. (Money is dumped into he SS bucket faster then hole at the bottom paying out!) For example in 1940 it was like 15 workers to one retiree, now its roughly 3 workers to one retire. What happens when it hits one-to-one?
I have, and SS is most certainly a welfare program which was the crown jewel of FDR’s “Freedom from Want” welfare state. For starters the original payout age was 65, which at the time was also the average life expectancy!
This excerpt from Is Social Security Welfare? is a good overview :
”Social Security is an intergenerational, income-transfer, wealth-redistribution welfare program. The federal government takes taxes from the youth and adult working population and spends the money on the boondoggles that 90 percent of the federal budget consists of. Then, as those populations reach retirement age, it takes new taxes from the current group of working youths and adults and gives it to the former group and calls it Social Security benefits”
P.S. This also explains why the Federal Government is so hell-bent on immigration, since a Ponzi scheme such as SS requires an ever expanding number of participants to continue.
CONgress. Turning dumbasses into millionaires for decades.
The Supreme Court also said Blacks were not people.
***sold to the voters as an old age pension by FDR ***
True. When the average life span for a man was 57 years, and a woman 64 years. Benefits began at 62 and 65 years of age.
Then Penicillin was discovered.
Great song, sad truth.
As for fixes, simple or not. When have politicians EVER fixed anything?
They NEVER fixed anything have and never will. They kick the can down the road and never accomplish anything.
I’m 64 and will start SS when I turn 66. Not worried about getting some of it but expect they will further means test it like they do now via taxes. The skunks like this kind of thing because they can do it and you really don’t know what it is until you figure it out.
I guess not, since I cannot find the enumerated power that authorizes Social Security, can you point it out for me ?
You can all thank me for tipping us across the $1 Trillion milestone.
Why? I thought there was a 1.3% increase.
Yes. We have almost all dodged one bullet or another thanks to modern antibiotics of one form or another.
Simple little things used to kill us. Things like a touch of walking pneumonia that is now wiped out in days with a Z-pack.
Its pretty established case law now. I would like to see it disestablished too but that’s not going to happen anytime soon!
Its a tax just like any other tax but this one carries a “mythology” around with it. Its to the government’s benefit that people continue to believe the mythology.
I don’t give a damn. If SS had properly invested and SAVED the funds stolen from me for the past 51 years, my account would be fully funded. SS is not GIVING me anything. Pay up, aspholes.
Social security has its positive elements, but these have been diluted by the social security disability program (total disaster gamed big time), the impact of baby boomers (that will probably bankrupt the system, particularly if medical technology continues to improve to lead to significant life extension), and the lying of politicians claiming there is a trust fund when it is a fraud (actually a pay as you go system).
In addition, .gov has rigged the CPI to minimize COLAs to social security, so that inflation hides the reduction in real benefits.
It is sorta like a food bank run by the local Mafia. Yup, it feeds hungry people, but there are a few issues... ;-)
“””””I have, and SS is most certainly a welfare program “””
You are probably young and do not understand a few things about life yet.
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