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I read this a lot. Why do you expect this to be the case? Social Security may become unable to pay the benefits that you're expecting at some point because the

I read this a lot. Why do you expect this to be the case? Social Security may become unable to pay the benefits that you're expecting at some point because the input from workers will not be enough to pay those benefits. But that doesn't mean it will pay nothing. It will just pay less. You'll still get some payments.

jameskegel 10y ago
How do you support this assertion?
- hooloovoo_zoo 10y ago
  Page 12 and 13 of this report https://www.ssa.gov/oact/tr/2016/tr2016.pdf https://www.ssa.gov/oact/tr/2016/tr2016.pdf.
- garysieling 10y ago
  It's a pay-go system, it works that way by design
Bartweiss 10y ago
Bear in mind that "it goes broke" isn't the only failure mode, and it's certainly not what I consider most likely. Every few years there's another push to privatize Social Security - you don't just have to count on the mathematical solvency of the program but also its political viability.
- aggie 10y ago
  It's one of the most popular social programs ever run in this country and that's why 'every few years' the efforts to privatize it go nowhere. Even the current unified Republican government won't dare touch it, and no one would want to more than Paul Ryan.
mikeyouse 10y ago
Agree wholeheartedly with this. The "Social Security is Failing" headlines are all ginned up to support political ends, they don't have much to do with the reality of the program. Large adjustments were already made to accommodate the baby boomer generation. That's why we have a $2.8 trillion-dollar trust fund. With current demographics, we should be able to pay 100% of promised benefits until the late 2030's. Afterwards, with a pure pay-go system, we'd only be able to pay ~80% of benefits. There are simple fixes that could dramatically extend the reserve depletion date to sometime in the 2050s. Not doing so is purely a political question. Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html
- twoodfin 10y ago
  There are simple fixes that could dramatically extend the reserve depletion date to sometime in the 2050s. Not doing so is purely a political question. Increasing the marginal rate of income tax for anyone making more than $120,000 by 12%+ may be a "simple" fix or just a matter of politics, but it's some pretty hard politics! (And also might lead to some unfortunate economic outcomes.)
  - mikeyouse 10y ago
    > Increasing the marginal rate of income tax for anyone making more than $120,000 by 12%+ may be a "simple" fix or just a matter of politics, but it's some pretty hard politics! (And also might lead to some unfortunate economic outcomes.) Two things come to mind; The politics shouldn't be that hard in the current populist environment since only ~6% of taxpayers earn above the max.[1] Secondly, employees would 'only' see a 6% marginal tax increase since the employer portion isn't included with AGI. But there are numerous other options to extend the program as well. The top 5% of taxpaying households earned at least ~$170k in 2011. As a simplifying assumption, let's just say they all meet the cap. There were 6.8 million returns above this level, which would mean that only $800 billion of the $2.8 trillion in AGI earned that year was subject to the social security tax. If you levy a 1% tax on income above the FICA limit, it would raise an additional $40B/year which with simple perpetuity math would mean an additional $1.2 trillion into the trust fund.[2] Alternatively, since the top 5% of income payers receive something like 1/3 of their income from capital gains (which aren't subject to any FICA taxes), a 1% levy on capital gains would likely raise a similarly large amount. I don't have any specific preference for those two ideas, but they're just a few examples. [1] - https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html [2] - Base figures from here: http://www.mybudget360.com/wp-content/uploads/2015/06/irs-tax-data1.png http://www.mybudget360.com/wp-content/uploads/2015/06/irs-ta...
ryandrake 10y ago
Social Security is a money funnel from the young to the old. It will end if and when young voters ever outnumber old voters. Pretty simple. Likely will not happen while the Boomers are still alive because as a generation they're huge and they vote, but I can't imagine that today's Millennial generation is going to keep Social Security around for us relatively few Gen-Xers when we need it.

jameskegel 10y ago

How do you support this assertion?

hooloovoo_zoo 10y ago
Page 12 and 13 of this report https://www.ssa.gov/oact/tr/2016/tr2016.pdf https://www.ssa.gov/oact/tr/2016/tr2016.pdf.
garysieling 10y ago
It's a pay-go system, it works that way by design

Bartweiss 10y ago

Bear in mind that "it goes broke" isn't the only failure mode, and it's certainly not what I consider most likely. Every few years there's another push to privatize Social Security - you don't just have to count on the mathematical solvency of the program but also its political viability.

aggie 10y ago
It's one of the most popular social programs ever run in this country and that's why 'every few years' the efforts to privatize it go nowhere. Even the current unified Republican government won't dare touch it, and no one would want to more than Paul Ryan.

mikeyouse 10y ago

Agree wholeheartedly with this. The "Social Security is Failing" headlines are all ginned up to support political ends, they don't have much to do with the reality of the program. Large adjustments were already made to accommodate the baby boomer generation. That's why we have a $2.8 trillion-dollar trust fund. With current demographics, we should be able to pay 100% of promised benefits until the late 2030's. Afterwards, with a pure pay-go system, we'd only be able to pay ~80% of benefits. There are simple fixes that could dramatically extend the reserve depletion date to sometime in the 2050s. Not doing so is purely a political question. Trust fund stats: https://www.ssa.gov/oact/STATS/table4a3.html https://www.ssa.gov/oact/STATS/table4a3.html

twoodfin 10y ago
There are simple fixes that could dramatically extend the reserve depletion date to sometime in the 2050s. Not doing so is purely a political question. Increasing the marginal rate of income tax for anyone making more than $120,000 by 12%+ may be a "simple" fix or just a matter of politics, but it's some pretty hard politics! (And also might lead to some unfortunate economic outcomes.)
- mikeyouse 10y ago
  > Increasing the marginal rate of income tax for anyone making more than $120,000 by 12%+ may be a "simple" fix or just a matter of politics, but it's some pretty hard politics! (And also might lead to some unfortunate economic outcomes.) Two things come to mind; The politics shouldn't be that hard in the current populist environment since only ~6% of taxpayers earn above the max.[1] Secondly, employees would 'only' see a 6% marginal tax increase since the employer portion isn't included with AGI. But there are numerous other options to extend the program as well. The top 5% of taxpaying households earned at least ~$170k in 2011. As a simplifying assumption, let's just say they all meet the cap. There were 6.8 million returns above this level, which would mean that only $800 billion of the $2.8 trillion in AGI earned that year was subject to the social security tax. If you levy a 1% tax on income above the FICA limit, it would raise an additional $40B/year which with simple perpetuity math would mean an additional $1.2 trillion into the trust fund.[2] Alternatively, since the top 5% of income payers receive something like 1/3 of their income from capital gains (which aren't subject to any FICA taxes), a 1% levy on capital gains would likely raise a similarly large amount. I don't have any specific preference for those two ideas, but they're just a few examples. [1] - https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html https://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html [2] - Base figures from here: http://www.mybudget360.com/wp-content/uploads/2015/06/irs-tax-data1.png http://www.mybudget360.com/wp-content/uploads/2015/06/irs-ta...

ryandrake 10y ago

Social Security is a money funnel from the young to the old. It will end if and when young voters ever outnumber old voters. Pretty simple. Likely will not happen while the Boomers are still alive because as a generation they're huge and they vote, but I can't imagine that today's Millennial generation is going to keep Social Security around for us relatively few Gen-Xers when we need it.