I wasn’t aware the SSA had begun using the trust fund. Tough times ahead.
[Warning, Economics-speak ahead. I’ll try to keep it simple]
[TLDR: Funding is messed-up for the SSA. It can only be fixed by Congress. I have little faith that a group of sycophants who believe tariffs are paid by the exporting country and not the consumer is capable of such a task.]
One thing I rarely hear mentioned when SS is discussed is the practice of requiring excess FICA receipts be used to purchase T-bills^. This has, for decades, provided a captive consumer of T-bills, which has kept the interest rate on T-bills (unnaturally?) lower than they would have had to be to generate the same amount of T-bill sales.
So, this means the interest rate the Feds have to pay for budget deficits is going up because one of the larger buyers is dropping out (this is in addition to how much it has gone up due to the inflationary period we just left). Of course, the larger the deficit, the larger the interest payment being made to T-Bill owners. Since many of these are now foreign interests (China is one of the larger ones, behind Japan), the result is that over 22% (nearly one fourth) of the national debt is being carried by outside interests.
Currently, the interest on the national dept is around 4% of the GDP (Economic output of the nation). This means, roughly, one fourth of that 4% is being paid to foreign interests. This is about one percent off the top of everything the US produces. And, this is going to go up.
^This practice of buying T-bills with excess FICA receipts is really just a shell game. The money the government gets from selling T-bills is just used to reduce the deficit. That is, it is spent as fast as it comes in.
I wouldn’t call it a shell game- the trust fund still has the bonds and will cash them in like any other investor. The money from the bonds gets spent just like the bonds held by any other investor. Many say that Congress “stole” from the trust fund but that is wildly inaccurate.
The status of the trust fund and projections can be seen here. Looks like around 2035 is when it gets depleted completely.
Thanks for the link. As can be seen, expected depleation date changes depending on various economic factors. In VERY general terms, when the economy is going well, more people are working and paying in, and fewer people are retiring or applying for disability bens. So the depletion date was pushed back this year, due to the “horrible” economy. ;).
That is good and bad news. Good news, because more people are employed, and insolvency is further off. Bad news, because that allows the do-nothings to kick the can down the road yet again.
The thing that would scare me if I thought about it much, was if the incoming yahoos wanted to try some kind of privatization. I’ve got no idea what form that would take, but I could imagine it as a sop to big business/finance, and an appeal to every bonehead who thinks they are the next Warren Buffett.
Since all of the above is true, I do wonder if said fat cats will actually do something this time if Trump starts playing Calvinball with their economy.
I’m in a good, but weird situation. I have enough SS credits. But won’t get much.
But the county I work for in Colorado was one of two to not pay into SS and instead pay into other accounts that the employee controls (which you have to do). In short, I think they saw the writing on the wall. So I no longer pay into SS. I haven’t for some 32 years.
There was a short time frame to do this. I guess county governments where given the option.
The money is mine.
I doubt SS will go away, but I/we/the County has done better by making our own investments, instead of SS. Not to mention the fear of SS going away, or doing other ratfuckery to it.
SSA Commissioner O’Malley just resigned today. IIRC he was appointed last year to what IIRC is a 6-year term.
IMO, over the past couple of years multiple steps have been taken to improve/speed up service, and to award disability benefits to more people.
I know nothing about the reasons for his leaving, but I would suspect it reflects an anticipation that the incoming administration will - at the very least - place lower priority on the interests of SS applicants/recipients and SSA employees.
I would imagine many top officials will similarly either pursue other opportunities - or simply retire, rather than put up with the uncertain future. Such absences at the top just make it all the easier for Trump to replace them with less experienced and/or highly partisan individuals.
I am a Democrat, but I’m afraid the answer to the second question is partly yes.
But if Trump really gets his big tariffs, there will be significant inflation. Turkey, with Trump-type leadership, has been running above 50 percent inflation for several years (after 15 plus years of low inflation). The problem with that kind of inflation, for social security recipients, would be that payouts are only adjusted annually. So you might be OK in January or February, but in the second half of the year, you will be hurting.
A lot depends on whether Trump will fulfill inflationary policy promises.
Likely not unique for folk at all levels of gov’t, but especially at the top levels.
The less institutional knowledge, and the fewer folk who have built careers based on public service, the easier it is for neophyte incompetents to enable policy that will truly cause significant and longlasting harm.
You’re certainly right the oligarchs do. But lots of much lesser lights want the same thing.
And if indeed we’re about to see an oligarchic kleptocracy, a lot of those lesser light businessfolks are going to be eaten alive by the real insider oligarchs taking their market or their business from them by force or threat of force.
The most likely thing that will happen is that the age for getting benefits will increase.
Before I started collecting, the age was something like 65yrs old. My benefit age was upped to 66yrs and 4 months, based upon when I was born. If you were born later your benefits may kick in later.
Younger people will have to wait longer, 68, 72, never, something like that, in the hope that more people will die before collecting. People currently collecting will not be affected. Young people are fucked.
You still have to sign up for Medicare at 65 even though you are not collecting SS benefits. You may have to pay out of pocket for Medicare for several years unless you can prove that you are still employed.
I’m a few years out (currently 57) and expecting to get screwed. A lifetime of payments (literally since I was 16) and now the promise is likely gone (or lessened but it wasn’t a lot to begin with).
If enough people get screwed there will be a backlash. Whether that backlash will change anything is anyone’s guess.
Regardless, changes will have to be enacted sooner or later since social security as it is will become insolvent by 2035. AIUI, at that point social security will still exist, but without congressional action retirees will only receive 83% of their full benefits. That’s only 11 years away.
The GOP will only have about a 4 seat majority in the house when they’re done counting the votes. You need 218 votes to pass a bill, and the GOP will have about a 221 seat majority.
This will make passing controversial laws difficult, so hopefully that protects the country a bit.
I’m not sure what all damage Trump can do via executive order though
That’s largely going to depend on the willingness of his cabinet officers to blindly do what he tells them to do.
And that largely depends on whether the Senate allows him to stack his cabinet with idiot yes-men and cranks.
My general expectation will be that they’ll let him have a crank or two in less high-risk areas - like the Surgeon General or HUD - but that he’ll be strapped up with proper people for anything major.