The immoral social security tax is already paying out more than it's taking in

http://www.nytimes.com/2010/03/25/bu...social.html?hp

THE QUALITY THREADS CONTINUE!

My pony was first, but it lost anyway and got deleted.

Drat, I knew they should have stuck with moral taxes only.

What the hell is going on in this forum? I blame the healthcare stuff for all this.

They'll eventually just slowly inflate down the value of benefits, which screws people who paid in with more valuable dollars but isn't the catastrophe most around here seem to see as inevitable.

I suggest that those politicians that took the money out and put in IOU's repay those spent monies back, out of their paychecks. Problem solved. You can thank me later.

Um, this is actually big news. And how is the SS tax moral?

Tell us what makes a tax moral or immoral.

I wonder where this is going.

Actually it was big news like 2 weeks ago when we first talked about it.

If I like it or not.

you should've put that in spoiler tags imo.

Taxing the poor and giving to the rich?

Forcing an economic insurance on people when they have no say whether they want it or not?

Having a regressive tax that affects the poor more than the rich? (said already sorta)

Taking a large chunk of one's wealth each year to lay over to their older ages, if they make it that far, and once you do make it, it's paid out per month and not in one lump sum, and isn't able to be passed on to your dependents?

Having that money taken from you spent on other things and not held over in an account, to fund things that weren't written into law?

SS should have an opt-out feature. Say you're barely getting by, feeding 5 kids, trying to put them in good schools, college, etc, and the government is taking money from you to give back to you in case you make it to a certain age, (at which point you don't earn interest and won't be able to pass on this wealth to your kids) - Don't you think you could use that extra 7% per year of income? What if you wanted that money to use for your kids and your current well being? You should be able to opt out of it.

And, um......IT'S NOT WORKING ANYMORE. Moral?

Ok.

http://www.youtube.com/watch?v=7GSXbgfKFWg

imo

Wait a second... are you suggesting that the government would prey on our ignorance by scamming us? Welcome aboard.

This is not a good option for them, the benefits are indexed to inflation.

1) This is half true, although I suppose the confusion is actually in the interplay between you and USC Cheats. Well, it's totally true (assuming there's an unspoken caveat) but I think misses the point.
2) They're going to have to make some changes to the law anyway.

It's good to cite some of the features of the program here, since it actually speaks to why SS isn't some inevitable catastrophe.

The excesses paid in ("the Trust Fund") won't go broke until ~2037, and the projections are SS will start running surpluses again in 2014. So there's still plenty of time to change the law to make SS solvent again, as has been done a bunch of times in the past.

Citing the law is actually relevant here, since the way SS is structured makes is tough to catastrophically break because it's funded via a dedicated revenue stream, ie FICA taxes.

So yes, it's true, that SS benefits are indexed to wage inflation. This is key since if wages inflate, government will collect more revenue. I assume USC Cheats means that they'll inflate down the value of the benefits by printing and/or drawing back benefits in other ways.

Even assuming the Trust Fund goes belly up, revenues still come in, so people will still collect checks, just with reduced benefits. And this is accounted for in the law, just as benefits being indexed to wage inflation is. The OASDI and CBO project that the worst people of projected revenues/benefits is still funding SS at 70% of its current benefits (something like 2080). So it's important to note that even under the typical Henny Penny narratives about SOCIAL SECURITY DOOM which claim politicians are too cowardly to change the law ergo SOCIAL SECURITY DOOM, it's already law that benefits have to tie to FICA revenues if the Trust Fund is insolvent, ie, benefit reductions are part and parcel of the law assuming no reforms and assuming worst case projections.

So, even under worst case scenarios, is 70% of what people were promised cool? No. Is it a catastrophe? For the poorest people who rely most on SS to fund their retirement, maybe?

If it did, SS would not exist. So, not gonna happen. Deal with it.

Not working anymore? I didn't realize people weren't getting their SS checks.

Also, the EIC works to make the total tax burden less regressive.

Don't know what you're talking about.

No, benefits are also indexed to price inflation after you start collecting benefits. They're indexed to wage inflation pre-retirement, price inflation after retirement.

All pay as you go retirement systems can keep the pension checks going for a while, but it is the unsustainability that is the big problem that makes it "not work" as a system.

wat? Unsustainability is the big problem that makes it not work? That's just circular.

All pay as you go systems can keep the checks going forever. Just perhaps not at the level promised in the past.

I just meant to note that saying SS benefits are indexed to inflation only tells half the story, and it's important to point out how they're indexed to inflation (the unspoken caveat I referenced earlier) to explain why Treasury printing money would or would not promote SS's fiscal solvency.

That's true, but the benefits are paid for by current wage earners, and Social Security benefits are based on the beneficiary's best 30 or 35 years of wage earning or whatever it is, indexed for wage inflation, so to the extent that printing isn't a good option, it's not that the program has these crippling legal obligations such that inflation would bankrupt it, it's that SS is basically designed in a way that inflation isn't a huge variable in the program's fiscal health. Assuming scenarios where wage inflation and CPI don't diverge drastically, which would cause problems.

We may be in agreement, I just want to point that out.