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Social Security: What Crisis?

By Jeralyn, Section Other Politics
Posted on Wed Jan 19, 2005 at 09:14:54 AM EST
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There is no crisis in Social Security. Spread the word. Brought to you by BlogPac.

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    • Social Security: What Crisis? | 56 comments (56 topical)
    Re: Social Security: What Crisis? (none / 0) (#1)
    by desertswine on Wed Jan 19, 2005 at 09:22:03 AM EST
    Perhaps the Iraq Survey Team should now be deployed to find the hidden crises. Smart money says they hid the crises in Syria.

    Re: Social Security: What Crisis? (none / 0) (#2)
    by Richard Aubrey on Wed Jan 19, 2005 at 09:26:09 AM EST
    1998 was a really great year. In it, you can find dems and Clinton talking about the threats of WMD and the looming crisis to SocSec. In fact, Scott McClellan read a long statement on the crisis to the WH reporters, after which he informed them it was from Clinton. You guys just never figure out you get caught in about a minute, do you?

    Re: Social Security: What Crisis? (none / 0) (#3)
    by Adept Havelock on Wed Jan 19, 2005 at 09:30:07 AM EST
    Manufactured Crisis in Iraq: 2002 Manufactured Crisis in S.S.: 2005 Richard Aubery: Don't you get tired of having to rely on the rationale that "just because one side does it, it's OK for me to do it to?" Seems like moral relativism to me. It's either right or wrong. "Bill Clinton did it too" is a truly weak defense.

    Re: Social Security: What Crisis? (none / 0) (#4)
    by Adept Havelock on Wed Jan 19, 2005 at 09:31:53 AM EST
    In the previous post: "to" should be "two" We now return you to your regularly scheduled programming.

    Re: Social Security: What Crisis? (none / 0) (#5)
    by Adept Havelock on Wed Jan 19, 2005 at 09:32:28 AM EST
    Further correction. Previous "two" should be "too." Oy Gevalt.

    Re: Social Security: What Crisis? (none / 0) (#6)
    by pigwiggle on Wed Jan 19, 2005 at 09:33:25 AM EST
    Taken from their FAQ: “When Will The Money Run Out? : It won't. Based on long-term economic projections, the Social Security trust should be fine for 50 years or so. At that point, some experts project that the number of people retiring will demand more money than payroll taxes can provide.” The Congressional Budget Office projects that in 2018 “the number of people retiring will demand more money than payroll taxes can provide.” This is when there will be a draw on the SS trust fund, the empty SS trust fund. It is true that the money won’t run out, congress has codified into law a provision that will cut benefits dramatically when the trust found account has been spent. At that point the benefits will reflect the actual revenues collect, less the administrative costs. This is a poor counterbalance of the perceived fear mongering of the right. Their FAQ is rife with half-truths and inaccuracies. Far too many for a single post.

    Re: Social Security: What Crisis? (none / 0) (#7)
    by Talkleft Visitor on Wed Jan 19, 2005 at 09:43:33 AM EST
    Sure, if you believe that anyone can accruately predict the state of the economy in 50 years, you can buy almost anything. What they are really telling you is that higher taxes will make up the difference.

    Re: Social Security: What Crisis? (none / 0) (#8)
    by soccerdad on Wed Jan 19, 2005 at 09:55:44 AM EST
    There is no crisis. That doesn't mean that there doesn't have to be some changes. The SS "crisis" is much less dramatic than either the Medicare drug benefit or the deficit caused by making tax cuts permanent. I posted a whle bunch of links in a previous thread.

    Re: Social Security: What Crisis? (none / 0) (#9)
    by Talkleft Visitor on Wed Jan 19, 2005 at 10:03:18 AM EST
    I still see no problem with people being able to retain a portion of money taken from them in order to porvide for their own future.

    Re: Social Security: What Crisis? (none / 0) (#10)
    by pigwiggle on Wed Jan 19, 2005 at 10:09:53 AM EST
    SD- “The SS "crisis" is much less dramatic than either the Medicare drug benefit or the deficit” Holey crap, we agree on something; and then … “the deficit caused by making tax cuts permanent.” Have they been made permanent yet? It was my understanding the deficit was the result of care free spending, i.e. the Medicare drug benefit. this notably liberal organization has the tax cuts costing revenue that is around half of the deficit; spending has got to count for something.

    Re: Social Security: What Crisis? (none / 0) (#11)
    by Talkleft Visitor on Wed Jan 19, 2005 at 10:21:55 AM EST
    The feared crisis is that of the collectivists in having their aberration dismantled.

    Re: Social Security: What Crisis? (none / 0) (#12)
    by BigTex on Wed Jan 19, 2005 at 10:22:49 AM EST
    Hmm. Crisis or no crisis. Doesn't that depend on th' time frame yer lookin' at? Fer example, if yer retired and only expected t' live 10-15 more years, then no crisis. If yer in yer 20's and aren't goin' t' get th' benefits that yer payin' fer now, then crisis. Perhaps th' disagreement comes when you look at th' issue as a matter of solvency or benefits paid. Cuttin' benefits will keep th' fund solvent, and therefore no crisis. However cuttin' th' benefits will leave th' future retirees who are plannin' on havin' full benefits in a bind creatin' crisis even though th' fund is solvent.

    Re: Social Security: What Crisis? (none / 0) (#13)
    by Adept Havelock on Wed Jan 19, 2005 at 11:02:19 AM EST
    Want to assure SS solvency? Easy. Remove the ceiling on the payroll tax, and have it apply to ALL earnings. Not just the first 85K.(90K. threshold in 2005, per my accountant). Wile E. Coyote: Nothing in S.S. is preventing you from setting aside a few dollars to gamble in the legal casino that is Wall Street.

    Re: Social Security: What Crisis? (none / 0) (#14)
    by Talkleft Visitor on Wed Jan 19, 2005 at 11:22:49 AM EST
    Before you listen to any politician talk about the solvency, or lack thereof, of Social Security, ask them whether they are part of the program themselves.

    Re: Social Security: What Crisis? (none / 0) (#15)
    by soccerdad on Wed Jan 19, 2005 at 11:33:48 AM EST
    They obviousl have not been made perm. yet. However, Bush wants them and what I said assumed that they were. that was to allow comparison to SS medicare. So it was a "what if". I should have made that clear The current dficit is a combination of wild spending by the repubs combined with a decrease in revenue due to tax cuts and some other factors.

    Re: Social Security: What Crisis? (none / 0) (#16)
    by kdog on Wed Jan 19, 2005 at 12:01:29 PM EST
    Nothing in S.S. is preventing you from setting aside a few dollars to gamble in the legal casino that is Wall Street.
    So true Adept. That is why I prefer poker or blackjack, a lot less cheating and fixing going on.

    Re: Social Security: What Crisis? (none / 0) (#17)
    by Talkleft Visitor on Wed Jan 19, 2005 at 12:08:22 PM EST
    Adept Havelock - Gamble in the legal casino that is Wall Street. I like that line. But since S.S. isn't there to provide 100% of our retirement income, where does the rest come from? Under the mattress? Why does AARP offer stock based saving plans? You are against 401K plans? Do you have an IRA? Where is it? Or do you expect your children to provide for you?

    Re: Social Security: What Crisis? (none / 0) (#18)
    by Talkleft Visitor on Wed Jan 19, 2005 at 12:22:40 PM EST
    When we had a "crisis in military funding" to bring freedom to Iraq, congress ante'd up a big chunk of cash. Why does everyone assume that Social Security running out of money equals the government running out of money.? Unless you fundamentally don't believe that workers deserve a secure, guaranteed income in retirement (as many arguing there's a crisis don't) There is certainly enough taxpayer contribution to the government coffers to fund Social Security. Now, the mechanism through which this is done may need some fine tuning, or even overhaul. This is an opportunity to ensure continuity in perpetua of the program. However some view it as proof that the idea of Social Security is broken and that we 'can't afford' to 'fix it' so therefore we must settle for less or no benefit. Others are fiscal libertarians who want to keep all of their tax money and eliminate government 'entitlement' programs. To these folks the calls to solve the crisis smack of opportunity to eliminate the source. I think Bush said the other day (I paraphrase) that we have a 'profound moral obligation' to address the S.S. crisis. We have a profound moral obligation, rather, to support our citizen/workers in their old age, not to push through more punative legislation.

    Re: Social Security: What Crisis? (none / 0) (#19)
    by Talkleft Visitor on Wed Jan 19, 2005 at 12:35:54 PM EST
    Thanks, Dr. Ace, for proving my point that:
    Others are fiscal libertarians who want to keep all of their tax money and eliminate government 'entitlement' programs. To these folks the calls to solve the crisis smack of opportunity to eliminate the source.
    by saying that:
    It's your money. Why shouldn't you have a choice as long as you're willing to tale the consequences? And THAT's the crisis
    Ummm...duuhhh.... being not willing to take the consequences of the stock market nosediving or the consequences of creating a windfall for Wall St. So, Mr. Trebeck, I'll take "no choice" for "guaranteed check" please.

    Re: Social Security: What Crisis? (none / 0) (#20)
    by Talkleft Visitor on Wed Jan 19, 2005 at 01:09:10 PM EST
    Gee, Doc., you're right. As long as I didn't retire in 2002. As long as companies recommended to me didn't tank (see Enron, WorldCom, Adelphi, Imclone). Whose assets pay the financial advisors that make their recommendations of "winners" to me? Are said advisors liable if I don't get at least the same return as if I had the money in a bank? The idea of workers deserving more than pay per hour while they work is a few hundred years old and founded in Victorian reactions of outrage to industrial revolution capitalism whereby the general populace must depend on profit-motivated employers for sustinence. You're on the wrong side of history, buddy. Wake up and smell the workers rights.

    Re: Social Security: What Crisis? (none / 0) (#21)
    by Talkleft Visitor on Wed Jan 19, 2005 at 01:51:24 PM EST
    Whoever is president in 2018 could be no more clueless than Dubya and I would be less worried about fixing the problem then. With Dubya you have too admit that he just seems to have a way of F*cking up a good thing. Before Dubya we have a budget surplus after 4 years of Dubya we have deficits as far as the eye can see. Let's see his budget plan for 2007 before we trust him to come up with a plan to fix Social Security. the task at hand is to fix Social Security not end it by the way. I'm extremely tired of A**holes quoting Clinton when they never believed a word he said before, and if you are so convinced Bill knows what he's talking about then you would have to agree with him that privatization is not the answer.

    Re: Social Security: What Crisis? (none / 0) (#22)
    by Talkleft Visitor on Wed Jan 19, 2005 at 02:50:21 PM EST
    mfox, Are you really saying that because you desire to have the government hold your retirement nest egg for you everyone else has to go along and do the same? I didn't realize that you were so totalitarian minded.

    Re: Social Security: What Crisis? (none / 0) (#23)
    by Talkleft Visitor on Wed Jan 19, 2005 at 03:25:06 PM EST
    Ace, Worker's rights? I'm not sure I understand the logic that leads to the conclusion that forcing someone to give up 6% of their salary to fund someone else's retirement is a "right" enjoyed by the worker. SOunds more like "government right" or maybe "retiree rights", but not worker rights.

    Re: Social Security: What Crisis? (none / 0) (#24)
    by soccerdad on Wed Jan 19, 2005 at 03:27:05 PM EST
    again the SS discussion is hijacked and the system is analyzed in a frame that is inappropiate. SS was never intended to be a sole source of retirement funds. It is an insurance program against catastrophic events such as another stock market crash. So to talk about it solely in investment terms misses the point, but thats the neo-liberal's goal. Its welefare for wall street. Wall street doesn't even want to handle accounts less than 5k. Those will be handled by the government. (assuming latest proposals go through). The poor will get shafted as usual, and the rich will get richer. Given that many pension funds are close to going belly up there has to be some way to guarantee workers some minimal payout. The elephant in the room that everyone ignores is the transition cost estimated to be over 2 trillion. Bush's goal is to severely cut government social programs and he's going to do it the way Regean dreamt of doing it. Spend the goverment into near bankruptcy.

    Re: Social Security: What Crisis? (none / 0) (#25)
    by Talkleft Visitor on Wed Jan 19, 2005 at 03:29:26 PM EST
    I have no problem with freedom of choice. But investing in the stock market is a far cry from making money int he stock market. I'm sure that some of you have all the answers and there's nary a chance that you'll ever lose money in the market. There are, however, a number of other people who won't make money. For every winner there's a loser, right? So, what do we do with the losers, i.e. the individuals who didn't make money in the market. Blade Runner? Let them starve in the streets? Seems like if we have SS, we pay for their retirement. If we don't have SS, we pay for their retirement. I know, this is all probably pretty stupid, but then anything more complex than quantum mechanical string theory confuses me.

    Re: Social Security: What Crisis? (none / 0) (#26)
    by Talkleft Visitor on Wed Jan 19, 2005 at 03:31:10 PM EST
    After all, Reagan proved that deficits don't matter. I think it was the wart on Bush's a** that said that

    Re: Social Security: What Crisis? (none / 0) (#27)
    by Talkleft Visitor on Wed Jan 19, 2005 at 03:37:07 PM EST
    ytterby, How about some a compromise. Uncle Sam stops taking money out of my pocket and I agree to forgo all future benefits. Uncle comes out way ahead since I've already spent 20+ years paying i nto Social Security; he just doesn't get another dime. Anyone who wants to continue in the systemis free to do so. Soccerdad, Since when are liberals and//or Democrats against an idea because it will be expensive?

    Re: Social Security: What Crisis? (none / 0) (#28)
    by Talkleft Visitor on Wed Jan 19, 2005 at 04:00:22 PM EST
    No crisis? Perhaps not at this very moment but THERE WILL BE. I have no doubt that unless something changes I will never see a dime of the money that gets involuntarily taken from my paychecks. I wished we could just opt out of social security. I don't want to take care of anyone else. My mom is retired and draws social security. A whopping 600 dollars a month. WHO CAN LIVE ON THAT? I can't. She can't. I support her financially. I'm not depending on the gov't for my retirement - to do so would be foolish but if they must take my hard-earned money, then why in blue hell can't I decide what to do with it??? It's not a left or right issue. It's a reality issue. IT'S MY MONEY. I WANT IT. I pay enough to the IRS and in other taxes. There definately needs to be some kind of reform. No crisis but when the millions that are paying this ridiculous charge in our paychecks involuntarily retire and then don't get their MONEY BACK - THEN - there will be a crisis.

    Re: Social Security: What Crisis? (none / 0) (#29)
    by Talkleft Visitor on Wed Jan 19, 2005 at 04:29:49 PM EST
    In my opinion, it DOES seem that there was a bit of a screw-up initially. The first recipients should have been paid out of the General Fund, and everyone who paid into SS should have had that money earmarked for their own personal retirement. I don't like supporting everyone else's retirement eitehr, but I've been doing it for a really long time and I'll get at least some of mine back before it goes belly up.

    Re: Social Security: What Crisis? (none / 0) (#30)
    by Talkleft Visitor on Wed Jan 19, 2005 at 05:26:01 PM EST
    SD is correct. (Don't faint.) SS was never meant to be 100% of the retirement package. Problem is, when the average person has 12.4% of their BEFORE TAX income taken for SS, there is precious little left to invest. As for cutting benefits, that has already begun. If you were born in 1938, or after, the date you become eligible is delayed. In my case, it was two months. The normal retirement age for those born in 1938 and later will be increased in gradual steps until it reaches 67 for those born in 1960 and later. Obviously, loss of the ability to draw the benefit is a significant reduction. BTW - That was done in 1998 as one of the necessary actions to save social security. i.e. You know, the crisis that Clinton told everyone about. You know, the one that has magically gone away.

    Re: Social Security: What Crisis? (none / 0) (#31)
    by soccerdad on Wed Jan 19, 2005 at 05:50:15 PM EST
    justpaul - neoliberalism is an economic, not political, philosophy that believes in unfettered capitalism. WRT SS, why are the rich getting a break by capping the salary at 90k (i think). Uncap it and lower the rate.

    Re: Social Security: What Crisis? (none / 0) (#32)
    by Talkleft Visitor on Wed Jan 19, 2005 at 06:20:31 PM EST
    Y - SS was put into the general fund in 1964, by LBJ. It was also made taxable, by LBJ. And before SD has kittens, yes, only a portion, 85%, and even that is based on overall income. Of course all income tax rates is based on income. Consult your 1040 if you are interested in details. Perhaps you can see why many people were giggling when Algore kept on talking about the "lockbox" during his run in 2000. Of course Al could carry the truth in a lunch bucket, but I digress. et al - Besides reducing benefits, which they are currently doing as I noted above via the later start date, the option is to raise taxes and or the ceilling that it is collected on. This sounds attractive. Soak the rich. But since SS benefit is based on the amount you pay in, all it does is delay the problem, if that. I have seen no numbers that say you could collect enough NOW to fix it. It certainly won't fix it in the FUTURE because those who have paid in more, will get more. What we really need is a higher birth rate, because the real problem is we are running out of people to tax. Perhaps Congress will give up its really great plan and join the peons.

    Re: Social Security: What Crisis? (none / 0) (#33)
    by Richard Aubrey on Wed Jan 19, 2005 at 08:20:35 PM EST
    Hey, Adept. When you guys did it in 1998, were you really screwing the pooch, lying like rugs, or did you really believe it? If it was true then, why isn't it true now? If "one side" did it, that must be your side, lying like rugs. Your pick.

    Re: Social Security: What Crisis? (none / 0) (#35)
    by soccerdad on Thu Jan 20, 2005 at 03:53:43 AM EST
    To defuse the crisis hype it is useful to begin with a few facts. First, Social Security is a significant source of income for elderly Americans, providing the majority of income for two-thirds of elderly beneficiaries and all of the income for 20% of them. Second, according to the most recent report by the Trustees of Social Security, even under the cautious assumption that the U.S. economy grows at the anemic rate of 1.6% a year, the revenues into Social Security from the current level of payroll taxes will cover promised benefits for another 38 years and will be enough to finance about 70% of benefits through 2078.
    Link

    Re: Social Security: What Crisis? (none / 0) (#36)
    by Talkleft Visitor on Thu Jan 20, 2005 at 05:28:16 AM EST
    Okay soccerdad, so in 2038, when I'm 70 and presumeably able to collect social security, are you going to forgo 30% of your benefits so that I can get the full 100% I'm entitled to? Or will you simply say "Sorry, you lose. The government made you a promise and took your money, but now that it's your turn to collect on that promise, the government can't meet its end of the deal." Is this how the great progressive system works?

    Re: Social Security: What Crisis? (none / 0) (#37)
    by pigwiggle on Thu Jan 20, 2005 at 06:58:23 AM EST
    All- If the stock market crashes wages and employment follow. This is the source of the SS revenue; there is no guarantee here. Once again, you cannot mandate affluence. The absurdity is staggering; I get the feeling that most of you would be firmly behind outlawing poverty. I agree that it is lame to barrow money to fund a war. However, it is equally lame to borrow money to fund baby boomer retirement. We have to pay it back eventually. For you folks calling for a raise on the SS tax cap, this would be the largest tax increase EVER. No one is taking this seriously; it would be political suicide. Additionally, it could only have negative ramifications for the economy. For perspective; if you are making $90+ and fortunate enough not to work for yourself it may be a slight increase. If you do work for yourself the financial burden covering both the employee portion of SS and the employer portion as well would likely sink your business. If you exempt small business from the raised cap the revenues would be modest. SD- “The elephant in the room that everyone ignores is the transition cost estimated to be over 2 trillion.” The elephant in the room is the garbage the trustees (and subsequently you) are pedaling. A $3 or $10 trillion deficit over 75 years could be workable. They assume that the trust fund has money. They assume that the current surplus is being saved and invested. There is no trust fund; it’s spent. The taxpayers are going to be stuck paying this back as well as interest. Further, there is no reason to believe Washington is going to change its ways and suddenly stop spending SS revenues on Medicare and elsewhere; let alone the absurdity of investing it.

    Re: Social Security: What Crisis? (none / 0) (#38)
    by Talkleft Visitor on Thu Jan 20, 2005 at 07:21:44 AM EST
    As I was saying... If you want into this system, fine. But aren't we being just a bit high-handed grabbing 14% from EVERYONE, even the ones who know better and can do better? You'd be better off if your 14% went into a passbook, than into the hands of politicians. Note: your congressman doesn't touch it. Only a dupe buys into the left's divide-and-rule manipulation that goes by the canard: "soak-the-rich". It isn't us against the rich. It's you and me trying to make a better life for our families. Who cares what "the rich" are getting. Time to be concerned about what WE are getting. Democrat politicians want your money so they can slobber it around to their pet projects and pretend to be Santa Claus. Let them earn the money like everyone else. Don't let them hornswoggle you.

    Re: Social Security: What Crisis? (none / 0) (#39)
    by Talkleft Visitor on Thu Jan 20, 2005 at 07:37:43 AM EST
    The problem not being addressed is inflation. It's already been posited that the 'government never runs out of money'. Not entirely true. Banks make loans to Uncle, who sells bonds and also then taxes you to pay for the interest; the principal is just too much to pay off. Since Uncle runs the government printing offices, he can print as many increasingly reduced vallue dollars as he wants. But if the currency goes down in value...as it is right now? The value of benefits, as well as the benefits themselves are reduced. Lose-lose all the way. That's what we are facing. If Uncle prints more 'money', then we get inflation. Inflation eats the value of what's left. Looks like a crisis to me...

    Re: Social Security: What Crisis? (none / 0) (#40)
    by Talkleft Visitor on Thu Jan 20, 2005 at 08:00:06 AM EST
    Virtually all the above comments overlook the fact that one or two TRILLION dollars must be borrowed almost immediately to put Bush's plan into place. That is substituting an immediate crisis for a future crisis, given the level of deficit spending already. And SS is supposed to be an insurance program as well as a defined benefit retirement plan. Why convert it even partially to a defined contribution plan when 401K's, IRA's, etc. are already defined contribution plans? The government in my state gave its employees an option to convert its defined benefit plan to a defined contribution plan. Only young fools did so.

    Re: Social Security: What Crisis? (none / 0) (#41)
    by pigwiggle on Thu Jan 20, 2005 at 08:05:22 AM EST
    “Only young fools did so.” Foolish enough to fund your retirement, young enough that their promised future benefits are untenable.

    Re: Social Security: What Crisis? (none / 0) (#42)
    by Talkleft Visitor on Thu Jan 20, 2005 at 09:04:10 AM EST
    Uh...I did say that Uncle has to borrow to pay for all his grandiose schemes. Tax revenues aren't nearly enough. This is where that National Debt comes from.

    Re: Social Security: What Crisis? (none / 0) (#43)
    by Talkleft Visitor on Thu Jan 20, 2005 at 09:14:58 AM EST
    Soccerdad, As an alternative, can I pay only 70% of the normal Social Security taxes, since I'm only going to get "about 70%" of the promised benefits?

    Re: Social Security: What Crisis? (none / 0) (#44)
    by soccerdad on Thu Jan 20, 2005 at 09:17:07 AM EST
    Justpaul - that calulcation assumes an average growth in the economy of 1.6% which by historical standards is low and also assumes we dont change anything. pig - well raise the cap and adjust the rules for the self-employed so they don't get hit as hard. maybe cap the employer side of the contribution from self-employed. Removing the cap would be technically a tax increase. My question is why are those above 90k currently getting a tax break. BTW I make over 90k and would favor the increase as long as it is equitable across all wage earners The long term (50 year or so) problems are rather modest in comparison to other issues.

    Re: Social Security: What Crisis? (none / 0) (#45)
    by Talkleft Visitor on Thu Jan 20, 2005 at 09:34:25 AM EST
    I ujnderstand the basis of the calculation, Soccerdad. Why not answer the questions? Based on your numbers, are you willing to forgo 30% of your future benefits so that I can be paid in full as promised? Or will you agree that those of us who will not receive the full benefits we were promised can pay less than the full taxes imposed? Either way, you yourself have now argued that the system will not be able to meet it's full obligations in the future, so why not do something about it now, before that happens, when there is still enough time to fix it?

    Re: Social Security: What Crisis? (none / 0) (#46)
    by pigwiggle on Thu Jan 20, 2005 at 09:51:37 AM EST
    SD- My point was that a raised cap wont bring in the kinds of revenue folks are claiming. Take out the small businesses and the other inevitable exemptions and you wont have enough to patch the big fat revenue hole. Lets say that the other eventual exemptions could be avoided and the revenue would be nearly enough to patch the revenue hole. The added taxes that are going to be needed to pay back the trust and the interest on those loans are going to be hard enough for folks to swallow. Do you really see the political will to pass an additional cap raise? We are talking about unprecedented tax hikes. “My question is why are those above 90k currently getting a tax break. BTW I make over 90k and would favor the increase” I hardly call letting folks keep their hard earned money a break. You may not mind; but try not to be so cavalier when your talking about giving away other peoples money.

    Re: Social Security: What Crisis? (none / 0) (#47)
    by soccerdad on Thu Jan 20, 2005 at 10:07:46 AM EST
    pig Do you have any proof for your assertions or are you shooting from the hip again Well, if the rich are in essence paying a smaller % than the poor then in the context of this program they are getting a break.

    Re: Social Security: What Crisis? (none / 0) (#48)
    by Talkleft Visitor on Thu Jan 20, 2005 at 10:16:39 AM EST
    "BTW I make over 90k and would favor the increase as long as it is equitable across all wage earners" How benevolent of you, Soccerdad. You're willing to increase your own taxes so long as you can increase mine as well. Well here's a tip for you: All you have to do is subtract 90,000 for your gross income, then send 12% of the remainder to the IRS with a note saying you'd like it added to the Social Security Trust Fund. Then you can keep your hand out of my pocket.

    Re: Social Security: What Crisis? (none / 0) (#49)
    by pigwiggle on Thu Jan 20, 2005 at 10:25:03 AM EST
    SD- “Do you have any proof for your assertions or are you shooting from the hip again” I liked how you slipped that ‘again’ in there; sounds like I’m a real bullshi**er. Have you EVER caught me lying, and before you answer you better be prepared to dig into the archives. I found some numbers on a blog you posted indicating that raising the cap would result in a revenue gain of around 1-3trillion over 75 years, depending on the health of the economy. Since it was a ‘pro-SS’ blog I assumed I could take it as a generous lower limit. Of course, they could be completely full of crap. “Well, if the rich are in essence paying a smaller % than the poor then in the context of this program they are getting a break.” Not if they are reaping a negative gain. And we both now from the CBO report they are. The poor double their money, the rich half it. You call it insurance; I call it wealth transfer through taxation.

    Re: Social Security: What Crisis? (none / 0) (#51)
    by Talkleft Visitor on Thu Jan 20, 2005 at 11:48:48 AM EST
    DA, No, I don't, but my wife does. And that's hardly the point. As I said above, if Soccerdad wants to contribute more to Social Security, he is free to do so at anytime. There is no need for everyone else in the country making more than 90K a year to go along just so he can feel generous. Besides, you might want to consider just what will happen to that increased tax revenue if we do away with the cap. Yes, I know it would supposedly be spent on Social Security benefits, but that is also true of the current taxes paid in, and they are being wasted on all kinds of spending that has nothing to do with Social Security. How likely is it that all those spendthrifts in DC would suddenly discover spending restraint just because they had more money to spend? As my Scottish friends would say: "Not bloody likely." So as it stands now, even Soccerdad, one of the more fervent proponents of leaving Social Security as it is now, freely admits that under the current assumptions about how the economy will pan out, the system will not be able to pay the full benefits promised to those now under 35, even though they will be asked to continue paying the full amount of taxes upon which those promises are based. Soccerdad is essentially telling the next two generations that because the government made a promise to him and his generation, they will be screwed royally. Maybe this is considered generosity by those who consider themselves "progressive", but I consider it thievery, plain and simple. But wait, Soccerdad has an out. He hopes that the economy will actually do better. Well gee, that's just great. If the economy does better than expected, we just might be able to actually pay 85, 90, 95 or even 100% of the promised benefits. Maybe. And if it happens that the economy doesn't even do as well as expected? Well, he's got an answer for that too. Your children, your grandchildren, and your great-grandchildren (assuming you have any of the above) can all pay yet higher taxes to support the benefits to be paid to the boomers and their children. Hey, I think I now understand the idealogy behind the "progressive" movement: Things just keep getting progressively worse over time.

    Re: Social Security: What Crisis? (none / 0) (#52)
    by Talkleft Visitor on Thu Jan 20, 2005 at 12:18:11 PM EST
    DA writes - "Also, the 12.4% figure is misleading, as anyone who pays self-employment tax gets the 'employers share' back as an adjustment to the AGI on the front of the 1040. You are correct, but also misleading. Let us say you have made $50,000. You have paid $6200 in FICA (SS). $3100 is your share. $3100 is the employer share. Which, of course is you, since you are self employed. Now. Let's take your adjusted gross income, and subtract $3100. Now, if you have no other adjustments, your adjusted gross is $46,900. So what have done? You have saved the taxes on the $3100. Your income is $46900 vs $50000. So you have saved around $450. bucks. So you have paid 11.5% (6.2+5.3) instead of 12.4%. Wow.

    Re: Social Security: What Crisis? (none / 0) (#53)
    by Jlvngstn on Thu Jan 20, 2005 at 02:01:49 PM EST
    The mantra of the Clinton Administration was "Save Social Security", he campaigned on it and was seriously devoid of a plan to save it. Privatization is very sexy to repubs because it puts a trillion or so into the market but really does not solve the problem either. Raising the retirement age 3 years would go a long way to helping the funding problem but that may only last 25 years or so. People loved "save ss" but our party never gave a plausible solution. I hope there is staunch resistance to privatization because it is a bad idea, but I also hope that our trusted elected officials assign the top economists in the country the task of sorting it out to save it...

    Re: Social Security: What Crisis? (none / 0) (#54)
    by Talkleft Visitor on Thu Jan 20, 2005 at 06:07:55 PM EST
    JL writes - "Raising the retirement age 3 years would go a long way to helping the funding problem but that may only last 25 years or so..." This has been done. "As for cutting benefits, that has already begun. If you were born in 1938, or after, the date you become eligible is delayed. In my case, it was two months. The normal retirement age for those born in 1938 and later will be increased in gradual steps until it reaches 67 for those born in 1960 and later. Obviously, loss of the ability to draw the benefit is a significant reduction." SD writes - "To defuse the crisis hype it is useful to begin with a few facts. First, Social Security is a significant source of income for elderly Americans, providing..." Quit playing the "fright card." No one is talking about changing anything for those currently drawing funds.

    Re: Social Security: What Crisis? (none / 0) (#55)
    by pigwiggle on Thu Jan 20, 2005 at 06:25:05 PM EST
    “No one is talking about changing anything for those currently drawing funds.” Hmmm. Lets see, cut the funds for the folks that legislated their retirement off my back? Don’t speak too soon.

    Re: Social Security: What Crisis? (none / 0) (#56)
    by Jlvngstn on Fri Jan 21, 2005 at 08:24:20 AM EST
    Retirement age to 70 PPJ, we are living longer and with greater vigor than we were 20-30-40-50 years ago. 65--67 is only two years and is not enough. Not a very popular recommendation but based on the increased life expectancy (which is causing a greater burden on payouts) the retirement age should be given extended consideration.

    Re: Social Security: What Crisis? (none / 0) (#58)
    by Talkleft Visitor on Fri Jan 21, 2005 at 09:12:53 AM EST
    DA`- Your comment clearly was meant to make people think the self employed was getting their (own) employer paid portion back. They aren't. You are correct that the actual benefit will depend on his after deductions income, or net. I just assumed his would put him in the $40K range. Could be more, or less. JL - Hate to tell you this, but by the time most people get to 65 they are starting to show signs of wear and tear, and most employers are ready for them to retire. So the 67 was a real hit, and the 70 figure is totally outrageous. Consider this. With an average end of life at 72 for men and 79 for women, or about 75, the average benefit is 10 years. Raising the start to age 67 cut benefits by 20%. Age 70 reduces them by 50%. Age Link

    Re: Social Security: What Crisis? (none / 0) (#60)
    by Jlvngstn on Fri Jan 21, 2005 at 11:12:32 AM EST
    Outrageous? I know many in their upper 60's still working and performing at high levels. Perhaps i should concede on age as it relates to "diminishing returns" for workers but I am not certain your assessment is accurate but I would be remiss if I did not acknowledge that pushing 7o and working may be quite challenging for some. However, your stats are incomplete PPJ. As a man that constantly admonishes others to "read some history" you conveniently leave out historical perspective often. If the original intent was to provide people with a decade of security, they would have made the retirement age 50 upon creation. When was SS created? What was the life expectancy and retirement age upon its creation? Based on life expectancy and ability to work "era-specific", how long were the benefits expected on average to be paid out to retirees? In 1930 the average life expectancy was 59.7 (all races and genders), in 1950 it was 68.2, in 1960 70.8, and in 2001 it is 77.1. The question is if the retirement age was 65 for the better part of 50 years, the first 25 years or so very little was paid out. The next couple of decades it was paid out for approximately 4 years, from 70-90 approximately 10 years, and as life expectancy stands now approximately 10+ years. Based on the aforementioned, the system was designed to provide security in the remaining "few" years of ones life, not a decade or longer. If people at 70 are incapable of working as a whole then it is a moot point. But raising it to 70 shrinks the security by several years although does not take it any where near the original forecasting. http://www.infoplease.com/ipa/A0005148.html Again, you are probably more right than I with the 70 being too old to be the retirement age because my control group so to speak is not representative of most of america, but if we are living longer and are more productive in our waning years as most studies seem to indicate, a gradual scale-up of the retirement age may be appropriate.

    Social Security: What Crisis? | 56 comments (56 topical)