Social Security's $20 Trillion Shortfall: Why Reform is Needed

Heritage Foundation ^

[newbie2008]

Social Security faces an enormous future deficit: Between today and 2075, the inflation-adjusted shortfall is projected to reach a staggering $20 trillion. Although the problem with the current system is due in part to changes in demographics, the root of the problem lies in the fact that the Social Security system itself is poorly designed. Workers, particularly those under age 50, are slated to receive very low benefits in return for a record amount of payroll taxes they send to the federal government. 1 These workers could enjoy substantially greater levels of retirement income if they were allowed to place the bulk of their payroll taxes in professionally managed individual retirement accounts, 2 which historically have had significantly higher rates of return.

Defenders of the current system generally admit that personal accounts would make workers better off, but they also argue that the "transition cost" of privatizing would be significant. More specifically, because a major share of the payroll taxes now used to pay benefits would be invested instead in private accounts, policymakers would need to find several trillion dollars to finance benefits for current retirees and those nearing retirement (and, therefore, too old to take advantage of private accounts).

[evad]

Social Security is nothing more than a Ponzi scheme.

It is bankrupt right now because every dime that was ever collected has already been spent.

[theBuckwheat]

If SS had been set up to really accrue funds in a real separate account for each enrollee, we would be sitting on such a large pile of assets, but nooooo! The supporters of big and bigger government engineered the most spectacular money and power grab, even one that eclipsed the one that forced citizens to exchange all their gold for paper money.

This abomination of a system brings in so much power and money that not even the driver of the Straight Talk Express can speak with total honesty about how bad it is, or what really needs to be done to fix it.

[Graybeard58]

Ping.

Boomers fault!

Glad I was born in ‘45.

[doc1019]

All of us baby boomers can only hope that they can tap into another government Ponzi scheme to pay us!

[qam1]

Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.  

[groanup]

Uncle Sam: "Gimme some money for your retirement."

Man: "What happened to the money I gave you last week?"

Uncle Sam: "I spent it."

Man: "Maybe I should put some of this money in the stock market."

Uncle Sam: "Nah, too risky."

[Graybeard58]

newbie2008, grab a bottle of hootch and take a shot every time you see the word “Ponzi” or “boomer” on this thread. You’ll soon be drunk.

[microgood]

Boomers fault!

Sorry, you cannot blame this on the Boomers. It was enacted by Roosevelt and Johnson was the first to start stealing from it. Then Reagan increased the contribution rate to it to save it, which Congress gladly spent.

You can blame a lot of things on the Boomers, but this is not one of them. And as a Boomer, I do not expect to get a dime from this system.

Of course, that is why you are glad you were born in 45, so you will get some of it before it goes bankrupt.

[Doc Savage]

Very simple. SS ends today. All people eligible as of midnight tonight will proceed to their SS office and sign a document either stating they WANT the benefit, or they DO NOT WANT the benefit.

Those taking the benefit will get their money and pay takes on same. Those not taking the benefit will receive a percentage tax break each year for the rest of their lives until they die said benefit exceeds the actual SS benefits they would have received.

Then it's up to government to STOP SPENDING!

[qam1]

the inflation-adjusted shortfall is projected to reach a staggering $20 trillion.

Add Medicare and it becomes $47 Trillion. Future looks bright

[qam1]

You can blame a lot of things on the Boomers, but this is not one of them.

Boomers are in charge now and instead of attempting to fix it, they piled on with the Prescription Drug Pandering Act

[Gator113]

You can take my SS check....from my cold dead hands.

[Dumpster Baby]

Exactly. The politicians will never reform SS because they won’t have trillion$ to toss around like confetti any more. They never rescind a tax once it’s in place and generating lots of play toys.

[Brilliant]

If the shortfall is $20 trillion, then no reform is going to fix it. Might as well send the bill to the Democratic Party.

[MHGinTN]

The general fund ... we are awash in IOUs, worhtless IOUs. But don’t we have a ‘great society’?

[microgood]

Boomers are in charge now and instead of attempting to fix it, they piled on with the Prescription Drug Pandering Act

I would agree, but that is Medicare, not Social Security, which Bush actually tried to fix.

[BenLurkin]

Exactly.

[Graybeard58]

I’m joking kiddo.

[doc1019]

LOL! Could use that philosophy on any thread here. Theme = drink, theme = drink … great idea. ;-)