Posted on 12/25/2013 7:15:18 AM PST by Olog-hai
Such uninformed statements show how little people know about how SS works. Since its inception SS has worked the same way.
All revenue collected thru the payroll tax is used to pay benefits and any "surplus" is deposited immediately into interest bearing, non-market T-bills. When SS goes into the red, as it has now permanently pending any reform, these T-bills are used to make up the shortfall.
Yes, the $2.4 trillion in the SSTF is included in the $17.3 trillion national debt under "Intragovernmental Holdings" as distinct from the so-called publicly held debt. The T-bills represent debt backed by the full faith and credit of the USG whether they are held by the Chinese, an individual, or the SSTF. The money has not been embezzled by the USG any more than any other debt.
All USG trust funds are treated the same way whether it is the HI Trust Fund (Medicare Part A), the federal employee pension fund, or the SSTF. They are held in interest-bearing, non-market T-bills. Some, including Bill Clinton, at one time, suggested that SS should invest the money in the stock market or some other investment. The only problem is the huge amount of money involved would distort the markets and give government even more power to use the money to influence politics and to choose winners and losers. At this stage, it is a moot point since SS has been running in the red since 2010 and Medicare (HI) has been running in the red since 2008. Both trust funds have been cashing in T-bills to make up the shortfall.
The overall national debt is not affected by such redemptions, but the publicly held debt is increased since the General Fund must borrow money to redeem the T-bills. This gives the lie to Nancy Pelosi who says that SS is not contributing to the national debt. The sad fact is that we must borrow money to pay for SS benefits and Medicare benefits. The SS DI trust fund exhausts its T-bills in 2016--just three years from now. Congress will have to authorize the movement of T-bills from the SSTF so that benefits will be paid and not reduced per the law.
Even if the SSTF contained cash, SS would still go bust. We are paying out more in benefits than we take in in revenue. The baby boomer cohort is retiring at 10,000 a day for the next 20 years. By 2030 one in five Americans will be 65 or older--twice what it is now. SS is going broke because it is not actuarial sound. We either need to cut benefits or increase taxes or some combination thereof. It is why many have compared SS to a Ponzi scheme. The folks at the top of the pyramid like me have gotten far more out in benefits than they paid in. That is not going to be the case in the future. I agree with you we should privatize most of it leaving a small defined benefit program to cover disability and survivor benefits.
Actually, the life expectancy at age 65 is higher than age 78, due to earlier mortality lowering the average of the entire population.
For those who reach age 65, the average life expectancy for men is about another 19 years, and for women another 21 years.
Before Obama hit the medical industry, that is. Now, who knows?
It may have been promoted as a Government resource (rather that charities and churches), to support the disabled, elderly, widows and orphans - but when the Feds mandated deductions from the working poor they called it a ‘future retirement benefit’.
The IRS has no enforcement mechanism to collect the individual mandate penalties, except the one mechanism they already had — offset of any tax debt against any federal refund. Just make sure that you will not get a federal refund, and it’s all good. If in the future, they pass a mechanism to levy bank accounts for the penalty, the day it is enacted or regulations promulgated will be the last day I have funds in a bank account.
My bet as well. Letting the fed courts adjudicate a dispute between a state and another branch of the fed gov is like holding a championship fight between Ali and Frazier, and letting Ali’s manager referee the fight. Hardly impartial.
A private annuity with the same record as SS would be blamed on poor actuarial and risk management....or embezzlement. Either way - they would be jailed for breach of trust.
The Feds just move tax payments around to cover their ineptitude and/or criminality without penalty. The tax payers suffer the penalties.
Right. I check the population statistics once in a while. It should be easy for actuaries and statisticians to come up with working data to perform some better projections for SS.
Have noticed that my grandparents had 9 children and 32 grandchildren. Since that generation, the number of children per family has decreased from 0 to 1. I have 4 offspring to support my SS benefits - in addition to the 40 years I and my employers paid into it.
If SS were an annuity or pension plan, I would agree with you. It is not. You can pay into SS for 50 years at the maximum amount and die the day after you are scheduled to start collecting benefits and your estate would get nothing.
For one third of Americans over 65, SS is their only source of income. For two thirds SS represents more than 50% of their retirement income. Most Americans are not going to have a very pleasant retirement because they have not saved and invested enough.
The Feds just move tax payments around to cover their ineptitude and/or criminality without penalty. The tax payers suffer the penalties.
The taxpayers get the government they deserve. How many taxpayers want to make the changes necessary to make the entitlement programs solvent? They represent a $90 trillion unfunded liability. We have borrowed from our children and grandchildren to fund these programs. The average Medicare recipient gets three times more in benefits than what he contributed. These programs are unsustainable and the longer we wait to address it, the more painful the solution.
Indeed, but it was not originally intended to be something to benefit the large middle class that appeared after World War II. Like the withholding tax, it served as a handy way of capturing a larger share the wealth that fell into the hands of a growing middle class than they might have. Excerpt for withholding, companies might have simply paid workers a higher salary rather than buy health insurance for them, and started us down the road that ends with Obamacare.
Agree both drive up health insurance costs for people and the feds will pay the insurance companies what Obamacare won’t pay so taxes or fees will ensue a.k.a. screwed.
Hope it works but not sure it will.
That Murray-Ryan “bipartisan” budget deal the other week was right out of European style ‘austerity measures’.
The major political parties team up to raise taxes and cut spending simultaneously.
The members who voted NO on it in the House were the left-wing ones and the principled conservative ones.
Third parties have risen up in Europe like Italy and Greece but all that did was to formalize the major parties of the “right” and “left” forming national governments to shove the “austerity” down everyone’s throat.
We are heading for very interesting times ahead.
Yes the raw data is there. It is whether the answers are the right answers AKA the ones they want.
And again yes as far as the demographics of family size - depending on the original ethnicity and national origin, and time of entry / assimilation vs “maintaining diversity” by not assimilating.
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