http://www.google.com/hostednews/ap/...672b960d4096b4


For Pete's sake, just cut the benefits already. People are now getting more than they put in (adjusting for inflation and interest). Also, let younger people opt out of the program altogether.

if u let the young folks out of the ponzi scheme then the house of cards falls apart. ask bernie madoff. he will tell u.

Was that loud noise the sound of the sky falling?

Yes! Cut social security to prevent a cut!

The 45 billion that SS will need, in addition to what it pays out this year, is slightly less than 2% of the 2.5+ trillion it is owed from the General Fund.

What the common wage earners (those whose earning are low enough that 100% of it is taxed for SSI) have done over the last 30 years, is supplement the General Fund while the rich, who earn, say 1 million a year, provide a much small percentage of their total income towards the General Fund, since only about 1/10th of their income is taxed for SSI.

It's just another, of many many schemes, in which the rich scam the average joe/jane. Which is why Starbucks saw record profits above expectations last quarter, despite a down ecomony & opened another 500 stores. The largest recession in the history of the United States is not hurting the rich one little bit.

So, raise the cap on SSI, until the rich cut back on the number of 16 oz. $4.50 lattes they buy.

Right now we pay about 13% of our income under 106k to SSI. 6.5% comes from the employer, but it's really the wage earner's money, because, an employer who can afford to pay an employee $15.00 an hr, offers the job at $15.00 pr hr - the 6.5% he has to kick in towards SSI. Another trick of the trade in attempting to fool the general populace.

So, right now, I am paying 13%, or 13k a yr in SSI on my 100k in yearly salary, while Michael Vick, who makes 5 million is paying 26/100% of his 5 million dollar salary towards SSI & he is an ex-con.

SS isn't a welfare program - it's basically forced savings. That's why a cap makes sense. If you tax high income earners more and use that to fund payouts to lower income individuals, then SS essentially becomes a welfare program. That's not its purpose at all.

The easiest solution for now is to just raise the retirement age.

"SS isn't a welfare program - it's basically forced savings."

That's what it's suppose to be, but it has given all the money to the General Fund & we can't pay it back, so it has become an addition income tax on the average wage earner.

It's like when I started saving after my 1st yr of marriage to take my wife to Spain on our 10 year anniversary, didn't leave any wiggle room for unexpected expenses during the decade, had to keep borrowing from the "Spain Vacation Fund" and then when my 10th anniversay came, found I didn't have enough to go. I may have called it my "Spain Vacation Fund" but really it was just an emergency fund.

I guess that's a fair point.

Part of the problem with the current structure of the program is that it allows Congress to squander the trust fund and essentially force tax increases in the future.

I suppose the most equitable thing to do would be to cut spending to offset the amount of money given to the trust fund.

In general, I've found that those proposing extremely simple solutions in complicated matters typically know very little about the matter at hand or the effect their solution would have on it.

..............but we keep re-electing them anyway.

One of the problems that government sponsored pension plans always have is that their is a lack of clarity about whether the plans are supposed to be self-funded forced savings plans or wealth redistribution schemes. Of course, politicians never have the motivation to be clear because as long as the purposes and function of the plans are obscured then they can play it one way or the other as suits their needs at the moment.

Nonetheless, I think a smart thing to do would be to acknowledge that the current FICA rates are insufficient to provide for projected benefits indefinitely and be specific about how the solution addressess the problem. For example, just raising the earnings cap is not a great way to tackle the problem because for every $1 you gain in FICA taxes you give back some amount (say 50 cents) in benefits to the people you're taxing. They should be way more explicit and do something like this:

- leave the current FICA rates and SS maximum covered earnings unchanged and call this "the base contribution"
- add a second earnings threshold above the current SS max earnings and charge taxes on the gap from the current SS earnings to the second threshold and pay no SS benefits for this, call it "the supplemental contribution"
- adjust the supplemental contribution annually so that the plan is projected to be sustainable

That way the plan objectives are clearly separated - the base rate is supposed to be the self sustaining forced savings plan, the supplemental contributions are the additional wealth transfer to fund the benefits above what can be provided by the forced savings rate. At least this framework is transparent about how much of SS is forced savings and how much is a direct transfer.

Of course they won't do this. They will probably "fix" SS by pushing out retirement age again so that there is no immediate tax increase and the cost is borne by future retirees in the distant future, long after today's politicians are enjoying their Federal government pension plan retirement incomes.

There's a vast difference between telling the hamsters that hit the vote button that an issue is simple and fixed easily, and actually believing it's true.

I would think the minority of elected officials in office tread very delicately when it comes to legislation that may put a family out on the streets with no food or shelter.

What is the retirement age in America?

Because im 99% sure the solution is found in that question.

Well the interest payments to trust fund have a line item in expenditures in the Treasury Departments outlays. So the obligation to the trust fund is currently being met.

This implies that it was actually necessary for the govt to borrow from the SS Trust fund. The Federal govt didn't have to spend the excess in SS payments. It's really on the politicians, both Republicans and Democrats, who spent the excess.

No, the whole idea of borrowing from the trust fund and issuing non marketable securities is the scam.

My understanding is that SS redistribution of income is relatively minor. Without a proportionate increase in benefits ie for people that pay more into it get a proporionatly higher payout at retirement then this will increase the redistribution of income effect. I think this will be part of the "solution" when it comes to pass but let's have some intellectual honesty.

Ok

Assuming you pay the max in SS, you receive about the same benefits.

FYP

Thanks for making my point about what the scam really is.

It depends on when you were born. For people born after 1960 the plan retirement age is 67.

There are several retirement ages actually. Depending on which you take determines the amount you receive.

IIRC part of the recent deficit reduction commission advocated raising the retirement age for full benefits from 65 to 68 by 2050. Mainly complaints from the left about doing that.

I wouldn't say that. The formulas are pretty redistributive in terms of contribution rates and benefit rates are different income levels, although this is partially offset by the fact that richer people collect their monthly pensions longer on average.

Ages ago I did some analysis on this and posted it here in the forum if you can dig it up.

I think Phil would have been referring to the date at which you can take an unreduced pension. This used to be 65 but is being phased in to 67 for people born after 1960. You're right that people can go earlier, but if they do so their pensions are reduced.

nb4 trust fund

How can both of these people be among the top 100 lawmakers in the country? It totally baffles me how such a huge segment of people cannot grasp the issue. A huge pile of IOUs does not equal a surplus. Paying interest on a debt with IOUs is ludicrous. Any citizen who attempted to sell such an investment would spend the rest of their life in jail to "protect society". Most of the MSM reports don't even mention the $100+ billion per year in interest "payments" made to the system in the form of IOUs.

Excellent post and to those who believe Social Security should be cut or ended altogether, you should research history a bit, the horror stories of the lives of older people pre SS are simply horrible. And to younger people who want to do away with it, you should remember that when Gramma comes to live with you because she is destitute, either that or you should just set her out on an ice floe to wait for the seals.

it's interesting that there are other developed countries that have developed retirement schemes that aren't based on models that land private citizens in jail when they duplicate them.

"land private citizens in jail when they replicate them" HUH?