Posted on 02/05/2005 5:46:38 AM PST by FlyLow
Considering all the debate going on about Social Security reform, particularly personal retirement accounts (PRAs), I figured that you all might be interested in a new tool created by the good folks at The Heritage Foundation. They have a newly revamped Social Security Calculator where you can figure out how much you could benefit from the creation of PRAs, how much the current system (if left unchanged) will cost you, and much more. Check it out here: http://www.heritage.org/research/features/socialsecurity/
(Excerpt) Read more at heritage.org ...
Increasing taxes on the upper middle class is not the answer to fixing Social Security.
Sounds to me as if you have been drinking the RAT Kool-aid.
In the current system, between 2018 and about 2042, there are already about $6.6 TRILLION in unfunded liabilities (looming debt). Starting in about 2042, there are additional tens of trillions in unfunded liabilities.
Starting a program of personal accounts will cost some money now but it is just moving some of the unfunded liabitity forward, and reducing the later liability.
In other words, paying $2 trillion now or pay something like $10 trillion later. Your choice.
I keep hearing about people collecting because they are drug addicts and yet the papers sent to my wife prior to her hearing before an administrative judge plainly stated that drug addiction or alcohol addiction would DISqualify her for social security disability.
Don't you get it? The SS has NO funds because the politicians have spent all the money and put in about 7 trillion dollars worth of IOUs. Yes, you will get "reduced payments" in the future...like ZERO, NADA, NOTHING. If you have a PSA, you will at least have something for your old age instead of zip. And best of all, your family will get what is in your account when you die instead of the government fraudulently appointing itself your beneficiary as it does in SS.
AHAAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHA!
Bet you believe in the lock box too!
Social Security was a scam to make you dependent on the government. When Johnson needed money for guns and butter in the '60's that's where he got his money. How many "War on Poverty Programs are still around today? All those HUD housing developments are nothing but slums and drug shooting gallerys today. Outside the Washington Navy Yard those projects are being torn down for privately owned office and hotel space. Think revenues form the sale of the land went into the SS lock box? The government really knows how to pick winners. The States passed gambling legislation with the promise to use the revenues for education. Guess what a year later the money goes into general revenues and is spent wherever it will gain the most votes in the next election.
And my suggestion was to have the crowd who will benefit from this program to contribute more to PAY FOR THE PROGRAM and than the program will pass without a trillion dollar cost to everyone.
That way the ones who will not benefit from the program wont have to pay now or later because at some time it will have to be repaid that's my point.
Oh I don't doubt for a second that the entire system is overflowing with waste, fraud and abuse.
That's exactly what I mean. If you took the time to look at the links I provided, you would have an appreciation for the magnitude of the problem. Removing the SS cap will not solve the problem, anymore than it has for Medicare, which is in worse shape.
Effects of Eliminating the Payroll Tax Cap . A new Social Security Administration report estimates the effect of removing the payroll tax cap. It assumes wages subject to the tax will decline as many workers shift their incomes from covered wages to income sources not covered by the tax like stock options or other benefits. According to author calculations based on the report's findings, removing the cap would:
Push back the date of Social Security's cash-flow deficit from 2018 until 2025 — giving Social Security only seven additional years of surpluses.
Increase the Treasury bonds deposited in the Trust Fund by $3 trillion, up to $7 trillion at its peak.
Increase Social Security's income by $14 trillion over the next 75 years, reducing Social Security's 75-year debt from $27 trillion to near $14 trillion, but still leaving a significant debt.
Eliminating the payroll tax cap immediately affects the 9.2 million Americans who earn more than $87,900, raising their marginal tax rate — the tax paid on each additional dollar of wage income — by 12.4 percent. As a result, earners in the top income tax bracket (35 percent) would pay more than half of each additional dollar they earn in taxes. For example:
A family earning $100,000 would pay $1,500 more per year ($100,000 less $87,900 times the 12.4 percent payroll tax). A family earning a million dollars a year would face new Social Security taxes of $113,100.
Problem: Economic Costs of Raising the Tax Cap . Increasing the marginal tax rate will have adverse economic consequences. The Social Security payroll tax already has an economic cost. According to a recent NCPA study by economists Liqun Liu and Dr. Andrew J. Rettenmaier of the Private Enterprise Research Center at Texas A&M University , the current system encourages people to work fewer hours and produce fewer goods and services, relative to an efficient tax system:
The cost to society as a whole from the Social Security payroll tax alone is 11 cents to 18 cents for every dollar of tax revenue collected.
This loss amounted to $49 billion to $82 billion in 2001, or as much as $804 for every household in America . Increasing the payroll tax will exacerbate these already existing losses. According to the Heritage Foundation's Center for Data Analysis:
Eliminating the cap would constitute the largest tax increase in American history — some $461 billion over the first five years alone.
Over the first 10 years, it would cost the economy nearly $136 billion in lost growth and cause the loss of more than 1.1 million new jobs.
Check out this link for more information.
http://www.heritage.org/Research/SocialSecurity/CDA99-01.cfm
The ignorance of the American public about the SS system is staggering. W is going to need a major effort to educcate people about the true state of SS and other entitlement programs. The idea that removing the SS cap will solve the problem and lower rates is part of the Dem class warfare propaganda. I suggest that you become better informed.
Well, if we push your idea to the ultimate limit, we should just go directly to communism.
Thanks for the link. I'll check it out.
Quick Fact Archive
1. Social Security will begin running a deficit by 2018.
Source: 2003 Social Security Board of Trustees Report, Table VI.F2, p.168
I saw a program on TV three or four years ago and several guests were asked to give their ideas for saving retirement in this country. All but one were middle aged or older and they all went into the standard routine about fixed return and variable return blah, blah, blah. Then the youngest guest had his turn and was the only one to call it correctly. Basically what he said was that it all depends on whether there are enough people working to support those who wish to retire and if not then they must continue to work or starve. It really is a function of demographics(the ratio between young productive people and those too old to work) and technology(if robotics can perform enough of the necessary labor then a relatively small pool of human workers can produce enough to support a large retired population). If anyone believes that setting aside huge sums of money now to be spent later (even if possible) would solve the problem then they just don't understand the problem.
Meant to confuse and defuse any SS reform, that is the first myth that is being circulated by the opposition. The Plan is already in place - the federal government plan. Adding people to those roles for retirement money will not cost the stated TRILLION.
Excellent post! I especially agree with the last line.
I'm always skeptical of these calculators. Quite often they use unreasonable underlying assumptions. However, in this case, the methodology they use seems to be rather conservative.
Than you are saying that the trillion cost is lies by the MSM and libs and not the administration???
So this will be a totally FREE program?? Can you show where this is accurate information please?
and your solution is ???
Everyone is being hurt by the current system. Losing 15% of your earnings off the top hurts hard.
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