What the graph fails to show is how much those who paid into the system would have had if they were allowed to keep and invest that $55,000. I’m betting that given average stock market returns, their $55,000 would have been a lot more than their payout. That’s a lot different from “accounting for inflation.” (Someone please correct me if I’m wrong.)
If I am correct, those people who complain that the average senior is taking out more than he put in are mistaken. It is not only the next generation, but the seniors themselves who are being ripped off by the government. (What a surprise. /s)
First of all, Medicare is not an investment plan. It was never portrayed that way at inception or thereafter. The fact that people get three times more (in inflation adjusted dollars) then they put into the system means that Medicare is unsustainable. It will bankrupt the country if not reformed since 40% of all Medicare payments come from the General Fund and 75% of Medicare Part B and D payments come from the General Fund. Only 25% of the costs are paid by the premiums charged to retirees.
Unlike SS, there is no cap on the income levels for the HI portion of the payroll tax. In 1966 the HI rate was .350 each for employer and employee; today it is 1.450. 80% of Americans pay more in payroll taxes than they do in income tax.
If I am correct, those people who complain that the average senior is taking out more than he put in are mistaken. It is not only the next generation, but the seniors themselves who are being ripped off by the government. (What a surprise. /s)
Pure sophistry. Today's seniors and I am one, are getting far more out of Medicare than they put in and those costs will go up as the costs of new medical technology increases and people live longer. The problem is the unsustainability of the system. Today's seniors are enjoying benefits that there children and grandchildren won't. If Medicare is to be solvent, benefits must be cut or taxes increased or some combination thereof.
From the SS&Medicare 2014 Trustees Repport
"The Trustees project that the Medicare Hospital Insurance (HI) Trust Fund will be the next to face depletion after the DI Trust Fund. The projected date of HI Trust Fund depletion is 2030, four years later than projected in last year’s report. At that time dedicated revenues will be sufficient to pay 85 percent of HI costs. The Trustees project that the share of HI cost that can be financed with HI dedicated revenues will decline slowly to 75 percent in 2047, and will then stay about flat. HI non-interest income less HI expenditures is projected to be negative this year (as it has been in every year since 2008), and then turn positive for six years (2015-2020) before turning negative again in 2021.