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On the second point, that baseline is going to drop much, much lower unless they drastically raise taxes. We have what, 8 years until we start taking out more
by spkthed 18y ago
On the second point, that baseline is going to drop much, much lower unless they drastically raise taxes. We have what, 8 years until we start taking out more than is going in.
On the third note, agreed. Medicare/Medicaid have massive problems. That doesn't mean that SS doesn't have problems too. They do have issues with workers taking more out than putting in. The birth rate continues to decline.
On the small payments thing, that maximum SS benefit is what, $1,000 monthly? That is NOT enough to live on. Especially not when you consider the cost of nursing homes, medicine, and all the other costs of living when you are partially or wholly unable to take care of yourself.
I don't know about you but I burn $1,000 just on rent, utilities, transportation and food a month. The fact that so many people put so much of their income in it just shows how misled they've been. That's a scary prospect.
If you make $50k annually averaged out from 15-65 you've put in $300,000 into SS. That's a fairly average income, well within middle-class. If you live until 90 you have pulled out everything you've taken in. If you die sooner, that money is just gone. Most people don't live until 90. Now, combine that with the fact that right now it's 3.5 people supporting one person and it starts to look like a Ponzi scheme.
http://seniorjournal.com/SocialSecurityQ-A.htm http://seniorjournal.com/SocialSecurityQ-A.htm
- tptacek 18y agoOn your first point, the "we have until 2018 before the trust fund runs out" factoid is apocryphal. Present estimates put that date into the 2040s. And that's simply the point at which Social Security starts being funded out the general budget, assuming the retirement age isn't adjusted. On your second point, there's "birth rate" and there's "productivity", and those are two hugely different things. On your third point: again, 1/3rd of Social Security recipients derive almost their entire income from it, and fully 2/3rds of recipients derive more than half their income for it. Your anecdote isn't particularly convincing.
- spkthed 18y agoPoint one: Right, but, depending upon whose numbers you use in 2018 we stop putting money into the trust fund and start pulling from it. Also, it's not really a trust fund. Excess funding does go into a trust fund but it is then lent to the Treasury and spent. Instead of using the power of time to get a decent rate of return it's basically sitting. Two, I agree, mostly. Since SS depends upon multiple workers for every payee, as the birth rate grows taxes increase or benefits decrease. As either happens it stops being perceived as a retirement plan (which the general public currently does) and starts being perceived as welfare. On the third point, I don't disagree at all on how many people live off of it. Our generation expects a much, much higher quality of living than our parents and grandparents. $1,000 a month is barely enough to pay for the cost of very basic living. Think no vacations, meager meals, no cable TV, no going out for movies, etc. The terrible thing is, if that money had been invested instead of sitting like it has, those people could easily be living on man, many times that. I think far less people would have issues with parking a mandatory 12% of their income into investments than letting the government handle it.
- tptacek 18y agoAgain on your first point --- the only one I'll engage here --- the trust fund is: * a fiction only if you believe that the government will default on its own bonds; * projected solid into the '40s; and * a red herring, because without it, we're discussing the general federal budget, and any predicted shortfall in Social Security is going to be dwarfed by Medicare-related programs and defense.