Posted on 03/09/2020 9:49:19 AM PDT by where's_the_Outrage?
As you may have heard, our nation's most successful social program is in a bit of a bind.
Every year since 1982, the Social Security program has generated a net cash surplus. By bringing in more revenue than is paid out in benefits each year, the program has been able to build up a $2.9 trillion reserve. However, according to the 2019 report from the Social Security Board of Trustees, the program is about to hit an unwanted inflection point.
You see, more than a half-dozen ongoing demographic changes are expected to result in Social Security expending more than it collects in 2020. While this initial net cash outflow will be relatively small, the amount flowing out of the program will increase exponentially in subsequent years. By 2035, Social Security's asset reserves of $2.9 trillion are forecast to be completely exhausted.....
The problem is that Social Security finds itself in a Catch-22. The "Catch-22" phrase describes a dilemma that offers no escape because of mutually conflicting or dependent conditions. In Social Security's case, no matter what unilateral proposal is made to resolve the program's cash shortfall over the long term (defined as the next 75 years), benefit cuts for retired workers seem to be a given.
(Excerpt) Read more at msn.com ...
What about the vast majority of Millenials who have no debt?
“VA disability but other federal retirees get full retirement plus any VA disability”
Did not know that...
Thanks. It’s easy to get inflammatory about this topic.
An additional fact—Johnson changed the way SS funds were handled. Previously, they were kept in a separate account and invested. But, with LBJ’s guns and butter policy (Vietnam and the Great Society), he wanted more funds and wanted to keep down tax hikes. So he tapped the cash flowing into the separate SS account (because at that time the wage with holding exceeded the payout), and replaced them with Treasury IOUs. It’s been that way ever since.
I think they call it an “offset”
How many people are collecting from SS that never paid a penny into it? How many illegals are getting SS disability or other benefits despite having NO LEGAL STATUS in the country?
“the program has been able to build up a $2.9 trillion reserve”
Anyone who believes that is a fool.
Those are US Treasuries, government IOUs.
Wouldn't that entitle the higher paid workers to increased benefits? Or are you in favor of making the program even more progressive?
I would support across the board benefit cuts until the program vanishes. A two percent cut from present benefit amounts would eliminate Social Security in fifty years. Such a time period would allow people time to adjust. Payments into the system would decrease as soon as the program is at break-even.
“You mean just like military get their retirement reduced if they also get VA disability but other federal retirees get full retirement plus any VA disability?”
You failed to mention that reductions offset disability payments that are also tax-free.
You also failed to mention rampant fraud in military disability.
Upon retirement it’s not unusual for a doctor to assign a disability percentage at the retirement physical, converting that portion of retirement pay into a tax-free bonus.
We arent talking about combat veterans with missing limbs here with actual disabilities, we are talking about folks able to get, for example, federal employment, and over time secure multiple federal pensions + Social Security.
Military disability is, in far too many cases “free money for nothing” and deserves a review, but probably wont ever get it.
Everybody who has ever been in the military knows this, has stories about it, or actively participates.
Your both right and wrong in that statement. There really is no reserve is absolutely correct. However from its creation in 1935, by law, any surplus went into the general fund and the Social Security Trust fund was given special(non-tradeable) interest bearing treasury bonds. So Johnson didn’t change that.
One thing that every one seems to be missing here is that for its entire existence social security has contributed to the federal budget. As the amount paid out becomes greater than the amount paid in it will Make our budget deficits worse.
Means testing is a virtual certainty.
There is a third alternative - PRIVATIZE SOCIAL SECURITY.
I have numerous posts saying the same thing but I have never phrased so matter-of-factly as you.
I also make the point that SS cannot go broke since has no legal obligations.
The other point that I make in a pure troll fashion is that SS is just another welfare scheme designed to bend the knee of the middle class to their Democratic masters.
I still wonder though when push comes to shove how many Freeprs will sell their freedom to keep their SS.
Probably wrote this article before Coronavirus.
Thats a good question to be educated on. I get a statement every year telling me what my contributions, years of contribution, and estimated benefits will be. If you havent worked and contributed for at least 5 years, the statement says you dont qualify for SS. So while there may be other sources of welfare for those who never paid in, I am not sure SS is one of them. Correct me if I am mistaken.
Good point.
I’ve told my kids (who are 40 somethings) that the Medicare and Soc Sec budget problems get solved by Corona.
What you are missing is the current workers pay for the current retirees! If you stop collecting the FICA taxes , you still have to collect taxes to pay the benefits for those who are currently retired. Each working generation places a You-Owe-Me on the next generation for the SS benefits. From the SSA website
year: 1940, workers: 35,390,000 SS Beneficiaries: 222,000 Ratio: 159.4
year: 2013 workers: 163,221,000 SS Beneficiaries: 57,471,000 Ratio: 2.8
The SAA site
https://www.ssa.gov/history/ratios.html
I agree do it but you got to provide for the current crop of retirees (and those who are heavily “invested” [time-wise]) in the system and are likely ready to retire. So “taxes” aren’t going to change much likely go up until the those in t he system die off.
This why the SSA system is called a legal a “Ponzi Scheme”!
Yes that’s it , the means testing is what I was getting at. Yes that will definitely happen.
I think we all know some tough choices will have to be made.
We can raise Social Security taxes, raise the retirement age, trim back benefits being paid out, and put more money in circulation to pay benefits. I think we all know some combination of these choices will happen.
Numbers don’t matter when you’re the largest economy and own a printing press.
Pearls Before Swine wrote:
“Thanks. It’s easy to get inflammatory about this topic.
An additional fact—Johnson changed the way SS funds were handled. Previously, they were kept in a separate account and invested. But, with LBJ’s guns and butter policy (Vietnam and the Great Society), he wanted more funds and wanted to keep down tax hikes. So he tapped the cash flowing into the separate SS account (because at that time the wage with holding exceeded the payout), and replaced them with Treasury IOUs. It’s been that way ever since.”
Thanks for that info!
My belief as well. It never was going to work. Then the 1960-1970’s democrats robbed even what little was “in the bank account” to make THEIR deficits at the time seem smaller.
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