Posted on 07/14/2017 8:53:33 AM PDT by SeekAndFind
The government is out today with its annual update of Social Security’s sick finances:
--The system is $12.5 trillion under water, up from $11.4 trillion a year ago.
--Absent law changes, checks to retirees will have to be chopped 23% beginning in 2035.
--To fix just the retirement pay program, Congress could kick up the payroll tax by 2.8 percentage points. Fixing Medicare’s disastrous finances would be in addition.
--The retirement operation is running an $86 billion annual deficit. That’s the difference between the money coming in from Social Security’s share of payroll taxes (12.4% of covered payroll) and the money going out in monthly checks and in overhead.
Ponzi? That’s too kind an interpretation. A Ponzi scheme has old investors being paid off with money raised from new ones. In this case there isn’t enough cash coming in from new players to pay off the old ones. The $86 billion shortfall is being covered in traditional federal fashion, by drawing on general tax revenues and by printing money.
The trustees of the Social Security system put the grim news in as positive light as they can. They cheerily note that “asset reserves” grew from $2,813 billion at the end of 2015 to $2,848 billion at the end of 2016.
But these “reserves” are not a pile of saved capital in the form of stocks, bonds and mortgages. Rather, they are a bookkeeping entry in which the government borrows money from the government, and the government pretends to have “income” by collecting interest from…the government.
(Excerpt) Read more at forbes.com ...
I suppose the most likely actions will be a little bit of everything: Raise the retirement age even more (already being phased in), raise the tax rate, raised the ceiling, lower the benefits, reduce survivor benefits, give people options to partially/fully opt-out, etc. As others have pointed out, the SSDI portion should be removed.
SSDI is the new cool for the young....go out to a casino sometime...stick around late and see who’s there....a lot of free wheeling young people spending their free money....
OK, thanks.
Actually, I’ve been to two casinos in the last year (western NY area), and all I saw were old people. Of course that was before the sun set.
I have been saying for decades that I know exactly when SS will completely go broke and cease to exist. That date is exactly one day before I expect to draw my first check from them (about 5 years from now).
Well in reality a Ponzi scheme is a voluntary thing whereas SS is mandatory but the schemes are similar but SS shouldn’t be labeled with the word Ponzi.
Good point. SS is actually paid into by people, the things you listed are pure handouts.
This means in 2035 we’re going to have to adjust to living on less than $10k a month. Guess we’d better live it up while we can. We’ll be in our 80’s by then, so we won’t have much longer to live anyway.
“Obama administration cuts second $500M check to Green Climate ...
www.politico.com/story/2017/01/green-climate-fund-obama-administration-233708
Jan 17, 2017 - The State Department announced Tuesday it is sending a second, $500 million payment to the Green Climate Fund.”
That bastard looted the US Treasury. He did it for 8 years and was doing it up to their very last days.
No, it started with Roosevelt and the original SS Ponzi scheme. Subsequent changes helped fund deficits, but ultimately the program was doomed to fail from the beginning.
"Johnson" is another slang term for what LBJ was.
Sigh... remembering the good ole days back in the late 1970s when my CD's were getting 8 percent/year and more. Now nearly nothing. But... I put my money in stocks and it has made much more than the 8 percent/year I was getting from CD's. Getting interest from banked money is a losing prospect, when taking into account that inflation is higher than whatever interest you earn in a bank. Invest in something else. And no, living off SS is not enough for many areas of the country.
Precisely. SS spending is mandatory spending. The real cuts can be made to the critters’ pork barrel: discretionary spending.
Cutting SS would be equivalent to stopping EBT, but the oldsters would march on the capitol, not the suburbs.
If they turned DC into museums (and ghettos) and the critters worked by public Skype, we could see how the sausage is made.
In this electronic age, why are we still doing government as it was done in 1788? Kill the alphabet govt. agencies!
I used CD’s as a “worst case scenario” for exactly the reasons you mentioned. It’s one notch above a mattress. :)
And regarding living off SS is not enough for many areas is exactly right. It’s one of the reasons I moved here from Seattle. There are people here that own their own land and home that are living off disability. Try that in Studio City, CA.
It’s also why a lot of retirees expatriate. I wanted to stay in the US.
I do expect to die in harness, but I’m not so sure that is a bad thing. Most people start to decay when they retire. It was terrible for my dad. Diminished productivity and physical stamina just comes with age, inevitably. But to stop doing anything... well, it’s just to close to a full stop.
Exactly
A friend of mine retired and moved to Nicaragua with his Nicaraguan-born wife, receiving a small pension. Came back to visit with a big smile and pictures of his life there, home at the water's edge with a dock and fishing boat, servant maids, and all the lobster he could eat that he caught daily. Unfortunately, he died from a heart attack only two years after retiring. Died happy.
Gee, it will crash and burn when I am 75. The way I figure it, my wife will probably be living with one of the kids by then.
I imagine that starving to death at 75 will look pretty good by then.
Unfortunately, he died from a heart attack only two years after retiring. Died happy.
A great way to save money on SS is to pass lots of minimum wage increases and then increase the money supply like crazy, both of which will cause huge price inflation.
Then raise SS benefits by practically nothing, year after year.
When the minimum wage hits $150 and hour and SS is paying out only 5% more than it is today, it will get hopelessly monetized.
Frankly, I’m using hyperbole to make the point that that is, in fact, what they are doing. Just not quite so dramatically - and obviously.
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