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Social Security says system's costs will exceed income this year

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Re: Social Security says system's costs will exceed income this year

#61

Post by traek »

TheLoneAdmin wrote: post #57
rayiner wrote: post #32

Earlier quoted context omitted.

> If we had sane progressive tax policy in the US, the SS shortfall would evaporate. Our tax policy is among the most progressive in the developed world: https://www.theatlantic.com/business/archive/2012/02/us-taxe... . The real problem is that the average income earner doesn't pay enough Social Security taxes to cover what they will receive in benefits: http://www.politifact.com/truth-o-meter/article/2013/feb/01/...…

From your link "...and turning 65 in 2010 would have paid $722,000 into Social Security and Medicare and can be expected to take out $966,000 in benefits." So basically, employees are giving the government a 45 year loan at zero interest. Even at just a 1.5% rate, the typical employee pays their own way.

That's already accounted for in the "paid-in" figure:

> (Remember, the couple didn’t literally pay out $600,000; that’s the current value of what they paid out over the years, plus an additional 2 percent they may have gotten had it been invested.)

Even accounting for inflation and investment, the average worker still is paid out more from Social Security than they paid in.

Re: Social Security says system's costs will exceed income this year

#62

Post by ams6110 »

TheLoneAdmin wrote: post #57
rayiner wrote: post #32

Earlier quoted context omitted.

> If we had sane progressive tax policy in the US, the SS shortfall would evaporate. Our tax policy is among the most progressive in the developed world: https://www.theatlantic.com/business/archive/2012/02/us-taxe... . The real problem is that the average income earner doesn't pay enough Social Security taxes to cover what they will receive in benefits: http://www.politifact.com/truth-o-meter/article/2013/feb/01/...…

From your link "...and turning 65 in 2010 would have paid $722,000 into Social Security and Medicare and can be expected to take out $966,000 in benefits." So basically, employees are giving the government a 45 year loan at zero interest. Even at just a 1.5% rate, the typical employee pays their own way.

But the government is not investing that money for the later pay out. They spend it immediately and write IOUs.

Re: Social Security says system's costs will exceed income this year

#63

Post by dragonwriter »

ghouse wrote: post #60

Social Security is a insurance program, not a retirement program. Old-Age, Survivors, and Disability Insurance (OASDI) https://en.wikipedia.org/wiki/Social_Security_(United_States...

“Retirement” and “insurance against becoming aged and/or disabled” are different framings for the same thing.

Re: Social Security says system's costs will exceed income this year

#64

Post by prklmn »

encoderer wrote: post #42
maerF0x0 wrote: post #20

Earlier quoted context omitted.

means testing is super unfair to those who sacrificed lifestyle in their youth to save for retirement. Consider the person that could have, but didnt, live a lavish lifestyle and instead responsibly saved. Then a benefit (which they paid into, and maybe rely upon) is removed after the fact? Bad news.

Social Security is not a retirement account. We're paying today for the current generation of retirees so we don't have a class of elderly homeless eating cat food and dying in our streets. Means testing is consistent with this outcome.

Means testing gets you nowhere because there are so few people who would qualify as too rich- it would be less than a drop in the bucket "saved." It would be purely symbolic, and it's another way for those in power to say that we punish the rich and social security is a wealth transfer to the poor, then use that as a reason to abolish it. The idea of means testing is totally counterproductive to your goal.

Also as an aside, there are wealthy elderly people already not cashing their social security checks, you just don't know it because it makes nearly no difference in the scheme of things.

Re: Social Security says system's costs will exceed income this year

#65

Post by s73v3r_ »

dgzl wrote: post #41
encoderer wrote: post #7

Earlier quoted context omitted.

As a millennial, I do. There are just too many easy mitigations here that will extend life several decades: - Remove the cap and tax income above $120k, just like medicare and income tax - Increased tax rate, possibly just on payroll not income (the employer-paid portion) - Limited forms of means-testing (Maybe, attenuated survivor benefits as your estate value clears a certain high mark like $3 million) - Eliminate…

As a millennial-ish, I think the government should stop stealing my money and make Social Security opt-in only.

As a millennial, I take issue with anyone who mischaracterizes taxes as theft for ideological gain.

Re: Social Security says system's costs will exceed income this year

#66

Post by coredog64 »

encoderer wrote: post #42
maerF0x0 wrote: post #20

Earlier quoted context omitted.

means testing is super unfair to those who sacrificed lifestyle in their youth to save for retirement. Consider the person that could have, but didnt, live a lavish lifestyle and instead responsibly saved. Then a benefit (which they paid into, and maybe rely upon) is removed after the fact? Bad news.

Social Security is not a retirement account. We're paying today for the current generation of retirees so we don't have a class of elderly homeless eating cat food and dying in our streets. Means testing is consistent with this outcome.

One of the problems with means testing is that as the average payout declines, so too does support for the program. Without broad support, cuts/changes to SS become less of a third-rail problem.

Re: Social Security says system's costs will exceed income this year

#67

Post by noobermin »

jakelarkin wrote: post #54
chiefalchemist wrote: post #36

We have the resources. What we lack are necessary priorities and the resolve to fix them. The latest DoD budget is $700 billion. Russia's DoD budget is approx 10% of that. That's not a typo 10%. China might not be an ally - in the historical European sense - but given our symbiotic economic relationship it would like take quite a bit for a true military conflict to break out between the two countries. Even if our DoD…

that's not wrong but for the sake of argument perhaps its better to look at the DoD budget through the political lens ... its a corrupt jobs program in which the government funnels money to a broad swath of American states and counties, mostly via defense contractors. Yes its incredible dumb and inefficient but many millions of people earn their livelihood, healthcare and pensions by building useless bombs, so its ha…

Instead you let a benefit the entire population depends on to keep the jobs of a fraction of the population. How is that a rational choice?

Re: Social Security says system's costs will exceed income this year

#68

Post by Avshalom »

ghouse wrote: post #60

Social Security is a insurance program, not a retirement program. Old-Age, Survivors, and Disability Insurance (OASDI) https://en.wikipedia.org/wiki/Social_Security_(United_States...

>>Income derived from Social Security is currently estimated to have reduced the poverty rate for Americans age 65 or older from about 40% to below 10%

When 40% (or an extra 30%) of a country ends up in poverty without it kind of does become a retirement program. Or at least an 'old-age' program.

Re: Social Security says system's costs will exceed income this year

#69

Post by Apocryphon »

jakelarkin wrote: post #54
chiefalchemist wrote: post #36

We have the resources. What we lack are necessary priorities and the resolve to fix them. The latest DoD budget is $700 billion. Russia's DoD budget is approx 10% of that. That's not a typo 10%. China might not be an ally - in the historical European sense - but given our symbiotic economic relationship it would like take quite a bit for a true military conflict to break out between the two countries. Even if our DoD…

that's not wrong but for the sake of argument perhaps its better to look at the DoD budget through the political lens ... its a corrupt jobs program in which the government funnels money to a broad swath of American states and counties, mostly via defense contractors. Yes its incredible dumb and inefficient but many millions of people earn their livelihood, healthcare and pensions by building useless bombs, so its ha…

If only it's politically feasible to slowly redirect their activities to peacetime activities, like reassign a lot of that personnel to the Army Corps of Engineers, and have them fix America's crumbling infrastructure.

Re: Social Security says system's costs will exceed income this year

#70

Post by s73v3r_ »

lewis500 wrote: post #45
gringoDan wrote: post #5

We've known this was coming for a long time...as a Millennial, I don't expect to ever see a cent of Social Security benefits.

You will have Social Security. You just might receive something closer to the current level of social security benefits rather than a more generous package. Social Security benefits are indexed to median wages, which rise over time. If they just don't increase benefits so quickly system will be fine. Likewise, a hike in taxes which would still leave us one of the lower-taxed industrialized countries would do the tric…

"If they just don't increase benefits so quickly system will be fine."

Problem is that the current level of benefit is completely inadequate.

"A funny thing is that we have both fear of automation and fear of insolvent social security. If the economy gets more automated it will grow quickly, and it will be easy to tax the additional income to pay for social security"

But will that be countered by the larger numbers of unemployed who no longer have an income due to automation?

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