4 ms·

The Republican-invented meme of social security insolvency because it didn't account for life expectancy increases is tired and worn out. The reality is that th

by nknight 14y ago

The Republican-invented meme of social security insolvency because it didn't account for life expectancy increases is tired and worn out. The reality is that the architects of it were nowhere near that stupid, and they accounted for evolving life expectancies with a fairly high degree of accuracy. Had they not, the fund would have been bankrupt long ago. Even now, the system faces not a crisis, but a need for adjustments. In the 2030s, incoming taxes are expected to be at approximately 75% of payouts. If no changes are made, once the trust fund is exhausted, people will continue receiving at least 75% of their entitlement indefinitely.

shelf 14y ago
Not being able to pay your outgoings is the definition of insolvency, friend. On the other hand, the government is not quite a 'corporation,' and isn't entirely subject to those kinds of notions, is it?
- nknight 14y ago
  > Not being able to pay your outgoings is the definition of insolvency, friend. Didn't say it wasn't. Try not randomly reshuffling the words. You'll get a much clearer picture of what I actually said.
  - shelf 14y ago
    Only paying part of your outgoings is considered 'not paying,' or grounds for a default, typically? So that 'meme' is pretty much factual reality, if your statistics are correct? disclosure: non-American with no knowledge of your welfare scheme
    - lolcraft 14y ago
      Not being able to pay something twenty years from now given current income is much different than defaulting. Specially given historically low tax rates and an economic depression, and a spenditure that has mostly not been made yet.
      - shelf 14y ago
        I agree, but that doesn't seem particularly relevant. The system in question would generate significant revenue shortfall if that fellow's comments are accurate. Typically in public policy we make plans for these kinds of scenarios, instead of just assuming that Future Murika will have a tax base robust enough to pilfer from and a political scenario permitting us to actually legislate. On the other hand, that strategy is working fine for Twitter...
    - nknight 14y ago
      Look very closely at what I actually said. The meme I speak of is not "insolvency" generally, but insolvency due to a specific cause. > disclosure: non-American Which may explain why you're not familiar with the particulars of the meme I refer to, but does not excuse randomly shuffling my words. > with no knowledge of your welfare scheme Social Security is not a "welfare scheme", it is a government-administered pension program. Everyone who has paid into the system, from the very poor to Bill Gates and Warren Buffet, is entitled to benefits at retirement in proportion to their contributions.
newbie12 14y ago
You are badly misinformed. There is no trust fund, only government IOUs to itself. The program already requires revenues from the general Treasury, and the accounting collapse of the fictional trust fund is now in 2020, not the 2030s. http://www.ssa.gov/oact/TRSUM/index.html http://www.ssa.gov/oact/TRSUM/index.html
- guelo 14y ago
  If USA government "IOUs" are worthless you better tell market traders who consider them one of the safest investments out there.
  - dmm 14y ago
    The treasury bills owned by SSA are special non-marketable ones that are only sold to the SSA. They do not have any market value. I have no opinion regarding the solvency of social security.
    - guelo 14y ago
      What this critique amounts to is saying that the US will always honor its commitments to the market but not to it's tax payers. But why would that be? Are the financial elite more powerful than millions of retiring voters? Social Security taxes were raised in 1983 with the expectation of the baby boomers retiring 30 years later. But in those 30 years the surplus SS money was used to paper over deficits caused mostly by tax cuts on the top income percentiles. In effect the wealthy have raided the fund, but now they are wealthier than ever and we should hold their feet to the fire to pay the money back.
      - twoodfin 14y ago
        But in those 30 years the surplus SS money was used to paper over deficits caused mostly by tax cuts on the top income percentiles. This is getting way off topic, but the lower and middle class portions of the Bush tax cuts, for example, contribute way more to the deficit than those for the upper class. And your claim doesn't really square with the trend of more % of all income taxes being paid by the top percentiles over time.
datasage 14y ago
What it did not account for is a shift in the wealth gap and a stagnation of wages, relative to inflation, for a majority of people. The wage base will need to be adjusted to reflect these changes. The last time it was changed was 20 years ago under Reagan.
- tokenadult 14y ago
  20 years ago under Reagan 30 years ago, to the nearest decade. That was the change in Social Security policies that raised my retirement age and the tax rate that I pay into the system. My standard retirement age is just after Medicare "exhausts," that is runs out of accumulated funds to pay full benefits to people who have been paying into the system for their entire working lives.
Duff 14y ago
Yes and no. The original New Deal guys had mechanisms in place to deal with those sorts of things. But in order to keep funding in place for the Vietnam War and other things, the Congress accelerated cost of living adjustments in the 60s and 70s -- basically using Social Security as a political tool. Since adjustments were made long ago, many other tweaks have affected Social Security. Welfare reform pushed folks who were chronic public assistance recipients onto the SSDI rolls. The ceiling for payroll tax adjustments hasn't kept up with inflation. And of course, the Obama administration decided to cut the payroll tax in the short term to stimulate the economy.

by nknight 14y ago

shelf 14y ago

Not being able to pay your outgoings is the definition of insolvency, friend. On the other hand, the government is not quite a 'corporation,' and isn't entirely subject to those kinds of notions, is it?

nknight 14y ago
> Not being able to pay your outgoings is the definition of insolvency, friend. Didn't say it wasn't. Try not randomly reshuffling the words. You'll get a much clearer picture of what I actually said.
- shelf 14y ago
  Only paying part of your outgoings is considered 'not paying,' or grounds for a default, typically? So that 'meme' is pretty much factual reality, if your statistics are correct? disclosure: non-American with no knowledge of your welfare scheme
  - lolcraft 14y ago
    Not being able to pay something twenty years from now given current income is much different than defaulting. Specially given historically low tax rates and an economic depression, and a spenditure that has mostly not been made yet.
    - shelf 14y ago
      I agree, but that doesn't seem particularly relevant. The system in question would generate significant revenue shortfall if that fellow's comments are accurate. Typically in public policy we make plans for these kinds of scenarios, instead of just assuming that Future Murika will have a tax base robust enough to pilfer from and a political scenario permitting us to actually legislate. On the other hand, that strategy is working fine for Twitter...
  - nknight 14y ago
    Look very closely at what I actually said. The meme I speak of is not "insolvency" generally, but insolvency due to a specific cause. > disclosure: non-American Which may explain why you're not familiar with the particulars of the meme I refer to, but does not excuse randomly shuffling my words. > with no knowledge of your welfare scheme Social Security is not a "welfare scheme", it is a government-administered pension program. Everyone who has paid into the system, from the very poor to Bill Gates and Warren Buffet, is entitled to benefits at retirement in proportion to their contributions.

newbie12 14y ago

You are badly misinformed. There is no trust fund, only government IOUs to itself. The program already requires revenues from the general Treasury, and the accounting collapse of the fictional trust fund is now in 2020, not the 2030s. http://www.ssa.gov/oact/TRSUM/index.html http://www.ssa.gov/oact/TRSUM/index.html

guelo 14y ago
If USA government "IOUs" are worthless you better tell market traders who consider them one of the safest investments out there.
- dmm 14y ago
  The treasury bills owned by SSA are special non-marketable ones that are only sold to the SSA. They do not have any market value. I have no opinion regarding the solvency of social security.
  - guelo 14y ago
    What this critique amounts to is saying that the US will always honor its commitments to the market but not to it's tax payers. But why would that be? Are the financial elite more powerful than millions of retiring voters? Social Security taxes were raised in 1983 with the expectation of the baby boomers retiring 30 years later. But in those 30 years the surplus SS money was used to paper over deficits caused mostly by tax cuts on the top income percentiles. In effect the wealthy have raided the fund, but now they are wealthier than ever and we should hold their feet to the fire to pay the money back.
    - twoodfin 14y ago
      But in those 30 years the surplus SS money was used to paper over deficits caused mostly by tax cuts on the top income percentiles. This is getting way off topic, but the lower and middle class portions of the Bush tax cuts, for example, contribute way more to the deficit than those for the upper class. And your claim doesn't really square with the trend of more % of all income taxes being paid by the top percentiles over time.

datasage 14y ago

What it did not account for is a shift in the wealth gap and a stagnation of wages, relative to inflation, for a majority of people. The wage base will need to be adjusted to reflect these changes. The last time it was changed was 20 years ago under Reagan.

tokenadult 14y ago
20 years ago under Reagan 30 years ago, to the nearest decade. That was the change in Social Security policies that raised my retirement age and the tax rate that I pay into the system. My standard retirement age is just after Medicare "exhausts," that is runs out of accumulated funds to pay full benefits to people who have been paying into the system for their entire working lives.

Duff 14y ago

Yes and no. The original New Deal guys had mechanisms in place to deal with those sorts of things. But in order to keep funding in place for the Vietnam War and other things, the Congress accelerated cost of living adjustments in the 60s and 70s -- basically using Social Security as a political tool. Since adjustments were made long ago, many other tweaks have affected Social Security. Welfare reform pushed folks who were chronic public assistance recipients onto the SSDI rolls. The ceiling for payroll tax adjustments hasn't kept up with inflation. And of course, the Obama administration decided to cut the payroll tax in the short term to stimulate the economy.