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Old 05-16-2019, 12:49 PM
Wrenching Spanners is offline
Join Date: Jun 2011
Location: London
Posts: 332
Originally Posted by l0k1 View Post
What is the Trust Fund for? Until 1981 it was a surplus used to cover shortfalls. Since 1983, it has been an ever growing rainy day fund. Every year it gets bigger and bigger. Any time the SSA says that we might need to use it, congress cuts benefits or threatens to. Why did Reagan increase the FICA tax we all pay? Why did we build a $3T surplus if we aren't allowed to use it. This ever growing surplus is bad policy. Bad policy should be corrected.
Shouldn't the plan over the long term be to match revenues to expenses? Between the baby boom and immigration, the US had a long period where the ratio of people paying into the system compared to recipients from the system was pretty high. That ratio's been declining for years as the baby boomers have retired and post-retirement lifespans have increased. The revenue banked years ago is now being expended - the long term has caught up.

If the tax base continues to grow, while the number of recipients and associated payouts plateaus, then you'd have an argument for a lower reserve. However lowering revenue while expenses are increasing at a greater rate than current revenues would turn a manageable gentle decline into a steep decline requiring a drastic future intervention. That strikes me as bad policy.