I’ve been meaning to blog for almost a week on last Tuesday’s Social Security “town hall” held by Congressman Dave Reichert at Bellevue High. According to MSM and blog reports, the meeting didn’t go quite as smoothly as the Republican organizers intended, and I highly recommend Andrew’s excellent personal account and analysis posted over on NPI’s official blog. The Seattle Times’ James Vesely, who moderated the discussion, also describes the scene quite nicely:
If what I saw last week at Bellevue High is any indication, the reform plan to add private accounts to Social Security is a goner.
The school’s auditorium was packed, and not even three panelists urging private accounts
Well there are two choices fix it or sit back and watch it crumble (don’t want to hear that’s in the future BS), Democrats need to offer ideas rather than shameless pete and repeat criticism. I would be open to hearing multiple ideas for SS reform or overhaul. it’s a system that has a slow leak on the highway of life and democrats keep playing hide the jack, when they need to say here’s a way to pump up the tire without taking away more money or raising retirement age.
there is no permanent fix for s.s. nor should there be.
It is a pay as you go system.
Just like any other insurance policy. Can you fix my car insurance problem so I never have a premium increase?
How about my homeowners insurance?
there were surpluses, bush gave them to the wealthy.
Now he wants us to pay for his fuck up.
We dont need to change the system. Just adjust the premiums and payouts.
And I dont want to hear any “sky is falling” bs from you either.
Where were you when gwdummy was robbing the piggy bank?
Diggindude @ 2 If SS is an insurance policy, then wouldn’t it be appropriate to do some sort of means testing? That way, if you need the “insurance” it will be available, and if you don’t, then the premiums you pay would go to pay for those who are in need?
Many thanks for mentioning my analysis of the Reichert forum. It did take a while to write up, so I appreciate that people are reading and absorbing it. It was a fun event. Democrats certainly showed up in force.
B&W @1,
Didn’t I just offer an idea? Do you think I pulled it out of thin air? No… eliminating the cap and raising the retirement age are proposals coming from the Democrats.
BF @3,
Means testing is a reasonable proposal to consider too. There’s no good reason for Bill Gates Sr. to be collecting Social Security.
Big business wants to run government and groups are already out there ready and waiting in the wings wanting to run retirement security. The Bush push has a coalititon going and a campaign in full bloom to hand social security over and it may happen. Privitization is all about keeping brokerages and big business afloat. When interest rates go up, our super 90s growth slows. The names behind Bush’s push are big business. Bush has a security plan, backed by a coalition of big business names, same names that donated and backed his election. Foremost, whom would stand to benefit most from Bush’s privitization plan be? Bush is not fixing what is broke, Bush is paying back, giving an opportunity to his loyal cronies to cut a fat hog off his plan. Spelled: Exchange of favors.
business arrangement with his loyal cronies
BF@3
Exactly.
I pay insurance all my life, but if dont use it, i dont get a refund.
If my plans work out, I wont need s.s.
If , for some strange reason just before i’m ready to retire, my retirement goes to pay for some c.e.o.’s private island, I will have it.
Myers makes some very good points:
http://www.ssa.gov/history/myersorl.html
BF@3
How about starting with the cut off income?
If the cutoff is increased to $120,000, how about using that for the cutoff for benefits?
Black & White,
Why can’t the Democrats just sit back, just like the GOP did when they fought health care reform. There is no pressure on the Dem’s to fix social security now, especially when the projected problems are not critical and may go away with higher economic growth. If Bush claims there is a crisis why has he proposed a plan to fix the projected shorfall? He hasn’t. Blame Bush first.
oops,
typo,
“why has he proposed a plan to fix the projected shorfall?”
should be “hasn’t”
Let’s face it, the real push on social security by many supporting Bush is not to fix it but to end it. Last week on KUOW a talking head for the CATO Institute said that government should not be involved in people’s retirement.
Others in the Bush group want private accounts because then they can reap the economic benefits of administering the accounts. These are the Wall Street interests like brokerage houses that would see more clients. Unfortunately there is no guarantee on return on investment as many who invested during the internet bubble found. Private accounts are not social security with the emphasis on the word security. They are just another way to tranfer money from the poor to the rich.
Social Secirity is operated by our government to insure fairness and protection to elderly retired people and disabled people. The simpliest solutions to “repair” it have already been mentioned.
1. Raise the cap – right now the social security cap stops at $90,000. Why? It doesn’t make sense. Its not being funded by all wages but only wages $90,000 or less. What a simple solution. When was the last time it was raised? Why is the cap not indexed to inflation and raised every year?
2. Do a means income test – does someone making $500,000 a year when retired need social security? Social security should be just like disability insurance. It is there if you truly need it but not automatic.
Not acceptable – reducing benefits. Now that would be truly weird and uncivil and unChristian among other things at a time when Bush has reduced taxes on the wealthy at the expense of the poor. Let’s face it – most Bush proposals that affect the American people are to pay back the upper class wealthy and businesses that put him in office. Even Bush’s drug perscription program to help people was really another government payoff to the drug industry at the expense of American taxpayers.
Does anyone give a rats ass that the system is in serious trouble? Or are you all blinded by your hate of W to take action. The simple fact of the matter is that the current system will fail. This is outlined in the trustees report issued under William Jefferson Clinton. How do we fix it? I was born in 1971 and will not see any of the money I paid in unless action is taken. I trust myself more with my money than the government.
Goldy…there is a good reason why Bill Gates Sr should not be denied his SS benefits. SS is not a welfare program; it was not intended to be a welfare program. It is an insurance program. Implementing means testing would change its character. We don’t need yet one more dividing line between the well-off and the not-so-well-off, or to give the well off another reason to grumble about not getting anything back for the taxes they pay. Better to raise the withholding salary ceiling or to examine the CPI indexing at some point in the life of the retiree.
angry: Define “serious trouble”. The fact is, if no one lifts a finger, you will see at least 72% of your promised benefits — probably more since the economic assumptions that lead to 72% are quite pessimistic. Even at 72%, the dollar value of your benefits is likely to be more than you will see under any of Bush’s trial ballons — although it’s hard to tell because Bush has been deliberately vague in describing his solution.
As many others have noted, relatively small adjustments in taxes or means-testing can get you back to 100% benefits or close to it. Even without changes, the system can pay 100% of scheduled benefits for at least 36 more years, probably longer.
That just doesn’t sound like a system on the verge of failure.
angry @12,
Again… like B&W… do you read the blog? I have proposed a solution to extend solvency indefinitely… eliminate the wage cap, and raise the retirement age to match trends in life expectancy.
Do you have a response? Or are you just angry?
angryvoter @ 12 — No wonder you are angry. You’ve been lied to, by people who have ulterior motives, and you bought it.
If Social Security were in “serious trouble” … or even in “trouble” … I’d be up in arms.
The system will not fail. It will not crumble. I will get more out of it than my Dad did, and you will get more than I did — and that’s assuming we don’tr change a thing, and the Intermediate forecast is perfectly accurate, and the Trust Fund is fully depleted in 2041, or 2052, or whenever.
With average lifetime earnings, a 2041 retiree gets $16,379 a year (74% of the 2041’s scheduled $22,134). A 2080 retiree gets $23,580 (70% of $33,686) … compared to $15,535 for an average 2005 retiree.
Don’t get angry. Get educated.
Have you ever read a Trustees Report? What makes you think the system will fail?
Goldy@ 15 Angry doesn’t need to read what you or anyone else actually says when Fox “News” can just tell him what to think without all those troublesome steps in between.
Why bother with Fox, when you can get your talking points regurgitated by 15 year-old research interns at the Discovery Institute?
http://seattlepi.nwsource.com/.....ity30.html
Gee what a fucking deal I get 72% of what was taken from me.
Bill Clintons trustees issued the report that indicated insolvency in less than 20 years. How hard is it to grasp if a system pays out more than it takes in, somebody is getting the short end of the stick.
Who said anything about 72% of “what was taken from” you? I said 72% of scheduled benefits — at a minimum. That’s likely to be more than was collected from you.
More important, it’s likely to be more than you would collect from any of Bush’s proposals — although we’ll have to wait to see what he’s actually proposing before we can say for sure.
Anyway, don’t believe me — but don’t trust everything you hear from Cato or the Heritage Foundation either. Do your own research.
I did my own research, straight from the trustees report. I will collect less than I paid in, which isnt worse than I would do on my own.
AV @ 22
you didn’t get that from the trustees report; I don’t believe even their most conservative scenario has you earning less in benefits than you would if you retired today.
Read it dipshit, and oh, I am not retiring today, that is at least 25 years out.
AV @ 24
“dipshit”–looks like you know I’m right. You’ll earn more in benefits in 25 years than if you retire today, which is what I said before. If you’re pissed off that it’s not more, starting asking the President to pay back the trillion dollars in SS he’s wasted over the first four years.
Goldy,
Going out on a limb here, but what I read in your CNN link makes sense. My one major concern is this line:
Paying back those bonds means the government, already carrying a large deficit, would either need to issue more debt on which it will have to pay interest, raise taxes or cut spending.
As we have seen since the 1980s, Congress has shown little compunction over settling on the first, since the politics of the last two are not what most politicians facing re-election want to deal with.
Naturally, if Congress had curbed the Debt issue, Social Security would not need such special attention.
TJ: Don’t waste your time. Anyone who resorts to name-calling isn’t interested in a meaningful conversation, he just needs to run through his talking points script.
BTW: I’ve read the Trustees’ report. Can’t remember anywhere where it said typical beneficiaries would collect less than they paid in. If anyone knows different, a citation or page number in the report would be helpful.
it is true no beneficiary will receive less from SS than they put in IF they live to normal expectancy. they just would get a lousy return on the large sums paid in and matched by their employer.
those that say the projections use too modest economic assumptions fail to take into account that when the Baby Boomers retire, economic growth will be less than in recent decades. productivity growth may be less also. the Trustees have made realistic economic assumptions and therefore adjustments are needed to actuarily fund Social Security.
Goldy’s suggestions re raising the retirement age and the earnings cap make sense to better fund social security. but so do private accounts. the returns will be better. those, like blacks and the poor that have lower life expectancies will have an inheritable account whereas now they die at approximately the age that benefits begin. and workers that choose this partial option will realize more than ever that this is THEIR money. and how much money it is.
rush, private accounts make NO sense for funding Social Security, since by their nature they DE-fund SS. There is no evidence that the returns will be better; international models from Chile and Britain show that not to be the case. And it’s not about maximizing benefit; it’s about preserving a safety net. If people want a federal retirement savings plan, let’s build one. What does that have to do with Social Security?
Rush @28
I have no doubt that when an individual places money into a fund and has control (to some degree) over how the money is invested would make the individual a lot more proactive over said fund. I just do not see it as politically viable. Social Security is not called the “third rail” of American politics without reason. Bush does not have that kind of political capital to expend on this without running a deficit (tongue firmly planted in cheek), which is why he was deliberately vague on the details. He can claim victory with whatever comes out of Congress.
No Grey Matter @ 1
We HAVE offered suggestions — raise the salary cap and retirement age. Get the wax out of your ears.
AV @ 12
No, the simple fact of the matter is you;’re lying through your teeth.
TJ: I agree private accounts replace part of Social Security with individual funding. I like that idea. the Federal Savings Program which uses a mixture of stocks and bonds earned 8.8% last year for the more than 3 million members. you can have the 1.6% return of Social Security.
Why are you dems in such an uproar over this haven’t you put away money for retirement, or are you planning on living fat off uncle sam’s “return of premium?” Honestly the only person(s) I could see who would be against taking a “risk” to create a larger return are those who view SS as their only nest egg. Lack of individual planning should not warrant an aging system to continue down the tracks toward an inevitable cliff, don’t you believe your ex-president’s research? Why are you putting on the blinders?
Rush @ 28 — Using simulations based on US stock market history, Shiller (the reigning expert on market volatility) finds we do better in Social Security over 30% of the time.
Using simulations based on world market histories (the century in which US became the dominant economy may not be representative), vanilla Soc Sec outperforms the Bush plan over 70% of the time.
And that’s not counting the hidden taxes lurking in Bush’s plan.
As more people take closer looks at the details, more will realize no advance funded private system can match the low risk high returns of a pay-as-you-go system. I’m not saying you will be one of these people … but life is full of surprises.
B&W @ 34, my biggest problem with privatizing SS and letting people decide their own fate is when some idiot decides it is a retirement plan as compared a means of providing “social security.” What do you say to the person that took “their money” and lose it all on high risk gambles? Do you say tough, your loss and completely defeat the purpose of SS or do you provide some income for them from some non-existant budget? It’s always easy to say we could get better returns but it’s also at a higher risk.
When I retire I am planning to be able to laugh at the money SS provides me. Why? Because I don’t consider SS my retirement I consider it a minimum income in case all my other plans and investments fall through, a last bit of financial “security” one might say. But if I listen to the president etc. I won’t even have that if it isn’t privatized. However, like Goldy said, raising the cap and/or the retirement age make a lot more sense than decreasing the money in SS.
rush @ 33
carve out kills s.s. for those who dont have private accounts (this could be you if you choose to invest badly on your own).
Borrowing 2 trillion dollars to fund private accounts, means you need over 7% to break even before any profit can be realized.( 3% interest on loans, payback of principle, and cola of 3.5%)
This means, you need 16% growth to realize your “WILD” 8.8%!
S.s. needs to be left as it is, with small adjustments.
Ask for tax breaks, if you want a better environment for savings, but leave the safety net alone.
vsoul @ 36
Or does it just ensure that the probability of you actually using your “own” money is slim to none?
Social Security is a tax. The money paid into the system is spent by the government. The money paid in to the SS system has been spent by the government since the system was initiated. It doesn’t matter whether Dems or Reps control the House of Representatives, the money is still gone.
At some point in the future, less money will go in to the SS system than will come out. At this point, general tax revenues will have to be used to pay benefits. This will happen between 2012 and 2018. At this future time, all other federal programs will have to be cut to pay SS benefits.
The SS system is a Ponzi scheme with a 10 year life. It doesn’t matter who proposes a solution, but a solution must be proposed.
At least Bush has looked at the problem and suggested a solution. It may not be the best solution, but other than raising taxes, it is the only proposal on the table.
Instead of criticising Bush, maybe some of you might consider using some of your massive intellects to suggest something else.
The world is waiting.
Good job Goldy. You cracked the code. Ultimately, we should get the Social Security Monkey off everyone’s back. When we encourage the populace to earn their own way and plan for their own future, we create the intellectual capital that is our most important asset and a strong GNP in the process.
It looks like we are going to have to drag it kicking and sreaming from your cold Democrat hands though as you clearly view it as monument to good government and an indelible entitlement.
I sure hope you’ve got a good 401K like I do so my kids don’t have to pay to keep socialists like you around.
mimimimike@39
bush said the system was going to be bankrupt in 1988.
You need to get some facts. You have none at the moment.
Diggindude@40
Can you not do simple math? Due to medicine and better living, people living and continue to live longer every year+ family planning as well as abortion making smaller and smaller per capita families= one person eventually working to support one retired on SS (and all of the other social programs as well) Simple fucking math, use the grey matter you were blessed with! Damn you fucking libs are stupid!
Chuck, if you were so smart, youd see this is another bush smokescreen. I have a hard time believing anyone is following chicken little today. Most people see through this bullshit.
You havent exactly impressed me at this point with your intuition.
Diggindude@42
Then simple math is beyond your grasp? If not tell me where my simple formula is wrong. Do you expect a birth spurt soon? Where is my formula wrong?
Diggindude@42
I finally get it, you are betting on a major disease to wipe out our elderly…
you have no formula. The s.s. insurance program, has worked on small adjustments and corrections for 70 years, and will for the next 70, without chicken little’s screwing it up.
The bush plan IS 1 person supporting 1 person. What dont you understand?
You just need to read more, and spew bull less.
The adults will take care of the problem. Like they usually do.
No Grey Matter @ 34
Are you really this stupid? IRAs, 401(k)s, Keoghs, and Roths are for taking risks. Social Security is what you have if the risks bite you in the ass.
Chuck: I see no “math” in your argument, simple or otherwise. All I see is a bunch of hysterical arm-waving and factoids without a shred of real analysis to back it up.
If you want some real numbers drawn from a detailed model, check out the SSA Trustees’ report at ssa.gov. There you will learn that their current projection shows that SS will be able to pay 74% of scheduled benefits in 2042 going down to 68% in 2080 — assuming no changes in the law and assuming fairly pessimistic economic growth. Even at 74%, the benefits in 2042 are better than today’s average benefit because real salary growth drives up the scheduled payout. And, the report shows, it wouldn’t take much to get back to the full scheduled payout.
A slight improvement in the economic forecast would virtually eliminate the shortfall. Or we could stick with the more pessimistic forecast and raise payroll taxes by a little under 1% each for workers and employers. Other work by SSA actuaries has shown the same effect from lifting the payroll tax cap. Other possibilities include means-testing or a small change in retirement age. If we pulled on all of these levers, the amount of change in any one factor would be barely noticeable — hardly a crisis.
Those are the facts. Go read them yourself, comprehend the numbers, and let us know if you find anything wrong. If you’re not willing to do that, your argument will lack substance.
MIMike @ 40
Social Security has outlived its “10 year life” by 65 years and is good for at least 37 more years with no reduction of promised benefits. After that, it can pay higher than current benefits forever even if no changes are made. It has paid benefits to tens of million of people and every beneficiary has received every cent of promised benefits. Not bad for a “Ponzi scheme.”
Cheesy Chuckie @ 42
But not as stupid as you. What you failed to mention is that increased productivity and rising standard of living allows fewer workers to support a given number of retirees. There were more workers per retiree in 1937, but productivity and per capita income were much lower then.
I’m not sure chuck can read, probably grew up in a right to work state.
And went to a voucher school.
dubyasux@47. You bet they are the risks. Many were forced to pull those risks to save what they could after their loses were realized.
Diggindude@51 Dubyasux@52
No I went to a Washington state public school, but I took some remidial classes as an adult and that straightened me out.
SS is the largest pyramid scheme in history
……@55
bullshit.
Not pyramid, Ponzi. That’s a scheme where money from current investors goes to pay prior investors.
Congrats Reactionaries! You’ve just nailed the entire insurance industry!
SS did not originally have a 10 year life. Originally, there were many workers whose contributions supported a few retirees. 10 years or so from now there will be two workers supporting each retiree, and the workers contribution will be insufficient to fund all retirees. At that point, money to fund SS will have to come from general tax revenues. Not only will SS dollars not be available for general spending, but general taxes will need to be used to pay SS benefits. This is a fact.
the facts you state mimike, dont change the fact that s.s. will pay more than it does today, in 50 years.
This is a fact. You want to cry wolf, there are many things wrong today to cry wolf over. s.s. isn’t one of them.
Try crying wolf over bush creating terrorists. This will play well with many.
“the facts you state mimike, dont change the fact that s.s. will pay more than it does today, in 50 years.”
DUH! inflation happens. that is the only way we will be paying out more to retirees.
B&W: Social Security projections are reported in constant dollars, so inflation has nothing to do with it. Even in constant dollars, payments increase because inflation-adjusted salaries also increase. Projected average benefits in 50 years will indeed be higher than today’s average even after accounting for inflation. In fact, even if benefits are cut to 72% of their scheduled levels, the remaining payments will still be higher than today’s after adjusting for inflation.
My advice: read up on this more and get better informed. ssa.gov is a good place to start.
Scottd @ 62
Scott everything you said makes absolutely no sense when you take into account the fact that there will be 2 to 1, worker/ retiree ratio. Simple math says your ass-umption falls flat on it’s face, 3 workers minus 1 does not equal more than 3.
http://www.justsayno.50megs.com/wr_ratio.html
B&W: Ah, a true intellectual… You know, I never realized that the word “assumption” included “ass” — that’s very good.
So how do the Social Security economists and actuaries do it? Their modeling takes into account worker/retiree ratios (they come up with 2 to 1 in 2041), tax rates, modest growth assumptions, etc. — and yet they still come out with the payout projections I quoted. So where did they go wrong?
As it turns out, some things in life require a little more detailed analysis than “simple math”, and this might be one of them. But even a “back-of-the-envelope” estimate of this isn’t too far off the mark — but I doubt if you’ve even bothered to go that far. No problem, I’ll walk you through it:
1. Two workers contribute 12.4% each of their salaries to SS payments. That’s a total of 24.8%.
2. Typical full SS benefits are ~30-40% of lifetime average salary, adjusted for inflation. Let’s call it 35%.
3. The trustees say they can pay 74% of full benefits after 2041, if no changes are made. 74% of 35% is 25.9%.
So average benefits are 25.9% of average salaries over the retiree’s lifetime. Average SS tax collections per beneficiary are 24.8% of average current salaries. That’s pretty good balance for such a simple estimate. It gets even better when you consider that average salaries over the retiree’s lifetime will be lower than average current salaries of the workers being taxed.
That’s not a detailed analysis, but it was simple — and it’s not too far off from the SSA’s calculations.
Scottd @ 64
The only way I can see that the math works out is if taxes are higher, and like Goldy suggested SS retirement age be increased, therefore hoping for the reaper to make up the difference in the shortfall. Why not find a cheaper more efficient way instead of bilking the younger generation because the current system is withering on the vine and is being harvested (stolen) early by government programs.
So my questions to you are: In your cenario are SS taxes being raised to (over)compensate? or are we taking money out of federal taxes? and if so should I expect federal tax rates to change in the near future?
B&W: My scenario comes straight from the SS Trustees’ report. I think I was pretty clear in stating that the scenario assumed no increase in SS payroll taxes — they remained at a combined total of 12.4% for employer and employee (6.2% each). The scenario also assumed no additional input from general taxation — so there’s no need to raise federal tax rates to make SS payments. With those assumptions, the Trustees report that they will be able to pay 74% of currently scheduled benefits after 2041. My quick estimate showed that this is indeed likely to be true, but I would defer to the Trustees’ more detailed model. The scheduled benefits in 2041 are considerably higher than today’s — even after subtracting inflation — so 74% of that level is still higher than today’s benefits.
It’s all in the Trustees’ report, but you’re not going to hear it from Cato or the Heritage Foundation — you’re going to have to read it for yourself and run your own numbers. Sorry I can’t make it any easier for you.
P.S. : My point is that the future of SS is pretty good, even if we do nothing — but that’s not what I advocate. I’m all for making small changes to get closer to 100% of scheduled benefits. In any case, we’re not on the verge of catastrophic failure and I see no point in dismantling a program that has served most Americans so well.
Scottd @ 66
Once again the math doesn’t add up, in this case the saying less is more does not apply. Nice try but no dice, at least the way you are stating it.
B&W: Your argument would carry more weight if you could point out an error in my analysis or in the SSA trustees’.
It’s pretty simple, in 2041 there will be 2 workers for each beneficiary. SS taxes collected from those two workers will be 24.8% of the average salary of those workers. SS payments to the single beneficiary will be about 25.9% of the beneficiary’s average lifetime salary. To me, that looks like a balance that adds up, especially when you consider that the average beneficiary lifetime salary will be somewhat lower than the average salary of current workers.
If you can spot the error in that, kindly point it out. Don’t be afraid to use a few numbers. Otherwise, all you’re left with is unsubstatiated denial and recycled talking points. You’re free to believe what you want — but it’s really not giving you much to argue with.
Angry @ 19–Today 72%, tomorrow 54%, then 33% and the next generation gets to “fix” it if it doesn’t work when all the population explosion controls and abortions have made it necessary for 1 man to support 27 lazy citizens and 43 illegal aliens. Of course we will all be living longer and “get” to retire at 103 by then–the Dems say so–it MUST be true.
That crazy FDR must have been nuts to think SS could be funded by annuities, but then his descendents who now speak FOR him know better, right? (And people wonder why this site is a good emetic).
Torrid Slow — Just because someone calls you a diptshit you think you won? Typical–if your aim is just to piss off people. But then maybe he was just calling it as he sees it? Could be that the defend-lunacy-at-any-cost approach is what is pissing him off, ya think? And if all it takes to win is get called a name, the conservatives win hands down.
SuxDubble @ 47–“SS is what you have when the other things bite your ass?” No, SS is what you have so that the Dems can scare old people with stories of it being taken away from them if they vote for the evil Republicans, you mean. It is historical and recorded FACT that FDR never meant for it to be a permanent “solution”, but a temporary bandaid. Too bad that is all you have to scare old ladies with, but I, for one, will be glad when they take that crutch away from you and beat you with it until you wake up.
Scottd@64–what you fail to take into account is that we have been bankrupt as a nation since 1933 and we have Wilson to thank for getting the ball rolling. The Federal REVERSE Act caused inflation, FDR assured it with taking the gold standard away and all we have is a “dollar” that is worth approximately 5% of its 1901 value. You can still buy a good suit with silver dollar–can you do that with paper? Inflation IS a fact and when this illusion crumbles, it will make the crash of ’29 look like a picnic–and all your precious SS won’t save your butt, either. Wake up and smell the4 roses, dudes. There are some things we still want in common–we just differ on the method. Sometimes tough love is needed, not a pat on the head and a ‘boys will be boys’ chuckle-head.
ScottD–SS Admin will say and post anything to keep their jobs intact–if they lose that they go postal on us all. And like any good government program, if you can insure no sunset clause, you have done your job as a good lib. Reagan had it right–Government is not the answer to the problem. Government IS the problem. What did those poor people do before SS? How did they EVER survive? Maybe they were–just a guess–SELF-SUFFICIENT! I know that is a radical idea, what with all the handouts and “entitlement” of today (Where is that in the constitution?) Maybe we ought to go back to what works and not to what guarantees job security for public servants?
B&W @ 62 — Did you realize there are currently about 2.15 consumers per worker? And 75 years from now there will be about 2.4 consumers per worker? About a 12% increase in “burden” … while individual productivity increases 1.8% annually, compounded (per Trustees Intermediate model, which most economists consider too conservative).
1.8% growth compounded for 75 years is 281% more output per worker.
281% more production per employed American … 12% more dependents per employed American … yeah, we’re in big trouble, aren’t we?
ronko @ 74–If you can’t impress them with brilliance, baffle them with bull? Did Ron Sims give you that load of crap or just the SSA website again? You and Nebuchadnezzar can’t read the handwriting on the wall, but that’s okay. When the thinning out comes, as it will, I will just consider it to be survival of the fittest and wish you bon voyage to that merry bubble-land you call home. I really DO wish we could divide this state and let you die in baste in your own waste.
Dems had years in office to “fix” things and they scream and whine when we catch onto the fact that voting for them is an exercise in futility. Now you know what a ‘whine cellar’ is. If the answers are so simple, why haven’t you delivered? I suppose you think going back on the gold standard and stopping inflation altogether would be foolish, too? Bush wants that and 12 out of 13 idiots on the panel he appointed to study it say no. Only a Libertarian on the commission said yes. I guess that we “need” instability if we are to survive–now THERE is an oxymoron! Maybe we could just filibuster it all away….
scottd@64
you say that “So average benefits are 25.9% of average salaries over the retiree’s lifetime. Average SS tax collections per beneficiary are 24.8% of average current salaries.”>>>
The problem is they will not live in the dollars of their time, it will be in dollars ajusted for inflation…get real!
scottd@68
OK for a second I will assune your figure is correct, lets add this up this is the working mans pay stub in 2041:
100.0% total wages
-24.8% SS tax for the year of 2041
-50.0% federal, state, and local taxes, fees, and
surcharges in 2041 (assuming there are few
increases between now and then)
=25.2% Actual living wage for this worker….and he is still trying to figure out how to patch the system so he can collect SS as well……
Chuck: I’m not sure what your point is. I was addressing B&W’s misconceptions by pointing out that even if SS only pays out 74% of scheduled benefits after 2041, that will still be more than the average benefit paid out today — and that’s in constant (i.e., inflation-adjusted) dollars.
For some reason, B&W didn’t think it would be possible to meet even that level without raising taxes. I showed that it was, even with 2 workers/beneficiary. If you see anything wrong with that, let me know.
Chuck @ 78:
I clearly stated (@64) that SS collects 12.4% of the salary of each worker. Only 6.2% comes from the worker’s paycheck, the other 6.2% comes from the employer. That’s the situation right now, and the analysis I presented clearly stated no changes in the year 2041. I have no idea where you came up with 24.8% in SS taxes for each worker.
The working man’s paystub in 2041 is the same as it is now, except he’s probably making a higher salary — even after subtracting price inflation.
scottd@68
“It’s pretty simple, in 2041 there will be 2 workers for each beneficiary. SS taxes collected from those two workers will be 24.8% of the average salary of those workers.”
I am simply applying math to your figures…read back.
Chuck: You must have missed the places where I said the scenario included no tax increases.
SS collects 12.4% of salary for each worker. Since there are two workers for each beneficiary in 2041, the tax collected for each beneficiary is 2 X 12.4% or 24.8% of the average worker salary. The amount collected from each worker (including employer contribution) is 12.4% — not 24.8%
BTW, your paystub example @78 is a masterpiece of distortion. The 50% in federal, state, and local taxes is a debatable figure, but even the people who push that number admit that it already includes SS payroll taxes. So you counted the SS payroll tax 2X in your 24.8% figure and once again in the 50% figure — three times the actual amount!
Way to go! Clearly you are a person with keen financial insight.
scottd@82
It isnt as much as a distortian as your SS fantasy. What do you think the average tax rate will be on 2041 if you libs get there way>
Chuck:
I wouldn’t speculate. Instead, I’ll just stick with my original points:
1. Even if we make no changes (including no new taxes), SS will be able to pay at least 74% of scheduled benefits after 2041.
2. Even at 74%, the average benefit in paid in 2041 will be larger than today’s average benefit. Just to be clear, that’s in constant, inflation-adjusted dollars.
That might be hard to swallow, particularly if your politics demands the perception of a crisis, but them’s the facts, straight from the annual SSA Trustees’ Report. You can call it a fantasy if you like, but that’s going to lack credibility coming from someone caught trying to pull a whopper like your paystub fabrication.
I was able to point out exactly how you got that one wrong. I’m still waiting for you to show me the error in the points I’ve made.
Scottd @ all
The math doesn’t add up at all, if they are collecting 12.4% each from the present 3 it equals 37.2, your figures show 24.8 for two, and supposedly in a daydream I will make more than those recieving today?
I guess maybe you are saying that the liberals on capital hill will quit dipping thier paws into the “excess” 12.4 and finally leave SS where it belongs, but wait that still wouldn’t equal more.
By what you prepose 25.9% is total benifits over the lifetime of the individual not the monthly check amount. You should have been counting and cutting monthly benefits paid to retiree which is as follows 74% of 24.8 equals 18.352, not as appealing is it?
By the way where did you go to school? Must have been Seattle, where the superintendant is quoted as saying a bad teacher is one who teaches kids to answer correctly and quickly. He would rather a teacher who makes kids ponder all the possibilities even if they come up with the wrong answer at the end.
B&W: Congratulations, you seem to have grasped the fact that Social Security currently collects more in taxes than it needs to pay current benefits. If this is news to you, you should read up more on the subject before commenting further.
Right now, with a little over 3 workers/beneficiary, SS collects 1.14 times what it needs to pay scheduled benefits. In 2041, with only 2 workers/beneficiary, it will only collect 2/3 as much. 2/3 of 1.14 is 0.76 or 76%. That’s pretty close to Social Security’s report that they will be able to pay 74% of scheduled benefits. They, of course, have a more detailed model, so I’ll defer to their calculation. What part of that doesn’t add up for you?
The rest of your post is pure gibberish. I haven’t “preposed” anything. I’ve merely shown that there is no reason to doubt the SSA report that shows they will be paying higher benefits in 2041 than they are paying right now, even if those benefits are reduced to 74% of the “scheduled” benefits. That’s a simple fact. Even President Bush doesn’t dispute the accuracy of that report — in fact, he frequently quotes from it. I’m sorry if you’re having a hard time comprehending it, but I’ve done my best to help you.
Regarding Seattle schools, I wouldn’t know. Never went there. I’ll leave it for others to reflect on the irony of your commenting on the educational system.
If 74% of what you paid in is an ok pay out in your mind you keep your 74%, I’ll find a way to keep my 100% or invest it to create a larger return instead of letting legislative fools squander it.
I can see that you can’t understand math and I am tired of trying to dumb down your math to show that it 1+1 doesn’t equal more than 2 (and especially not more than 3). So I will just bid you a fair journey through the land of sugar coated BS, and I hope that you will recieve all the hopes and falicies you seek.
B&W: Farewell to you, too. It was pretty obvious from the start that there was little hope in educating you. My goal in trudging through this was to help others see through the innumerate idiocy of your reasoning — and I want to thank you for doing your part.
For anyone else who wants to think for themselves, go check out the info at ssa.gov. You’ll find benefit calculators to estimate your scheduled benefits at retirement. You’ll also find the annual SSA Trustees’ Report that B&W seems to have such a hard time comprehending. In it you’ll learn the following facts:
1. Even with no changes, SSA will be able to pay 74% of scheduled benefits after the much-dreaded 2041.
2. Even at 74%, the average benefit will be higher than benefits paid today — and that’s in today’s dollars so you don’t need to factor inflation.
3. That 74% isn’t a foregone conclusion. If payroll taxes were raised 1.92% (that’s 0.96% each for employee and employer), SSA would be able to fund 100% scheduled benefits after 2041. Other measures are also available, such as raising the cap on taxable income or means-testing the wealthiest recipients. Using a combination of these measures would only require a small change in each factor.
When Bush finally lays out his plan, you’ll need to compare the payments and risks of his proposals with the status quo I’ve outlined above. Then you can form your own conclusion.
I haven’t addressed the philosophical issue of whether government should even be involved in a program like Social Security. That’s a matter of opinion, but I think most Americans have seen the benefit of this program. In any case, people need to make up their own minds on that. But, they should do it on the basis of fact — not the kind of half-witted crap tossed around by folks trying to scare you out of a good thing.
scottd@88
Why dont you join us to find a permanant fix, not another bandaid?
“If payroll taxes were raised 1.92%” indeed, give me a fucking break. Then in 2041 they are STILL even if your fantasy worked going to be trying to figure how to make it solvent again!
Scottd @ 88
“That 74% isn’t a foregone conclusion. If payroll taxes were raised 1.92% (that’s 0.96% each for employee and employer), SSA would be able to fund 100% scheduled benefits after 2041. Other measures are also available, such as raising the cap on taxable income or means-testing the wealthiest recipients. Using a combination of these measures would only require a small change in each factor.”
AHH! that is one of the loopholes I was looking for, now you are starting back on the road from the land of sugar coated BS.
Chuck: Let me know what that “permanent fix” is — in detail — then I’ll compare it with the current system and let you know what I think.
In the meantime, I think the current system is working reasonably well. The last fix (in 1983) had us good to go for almost 60 years and left the system in pretty good shape even after that. If we need to make some minor course corrections every 20 years or so, so be it. If you think adding 1.92% to the payroll tax is a big deal maybe you’ll find some of the other possible tweaks more palatable. It hardly seems worth the apoplexy it apparently sets off in you. It’s definitely not worth scrapping the whole thing.
Speaking of fantasy worlds, I wouldn’t presume to claim to be able to fix anything forever. Planning out 75 years is hard enough. It seems a little premature to worry about the FY 2081 budget when we’re having such a hard time dealing with 2006. Just my opinion.
RonK, Seattle @ 74
That’s the dumbest pitch for keeping SS untouched that I have heard to date, I won’t even further respond to that pathetic propaganda.
The important thing is, most people have already seen through this bush smokescreen, and privatization, is dead.
Piss and moan all you want.