Maybe this is the problem people have with it? That they (perhaps subconsciously) believe in some mystical “money” that has its own, independent intrinsic value? It seems not entirely unrelated to gold-buggery.
To be fair, there is something a little confusing about a large entity like the US collecting money with its left hand and then loaning that money to its right hand. Our leaders play a lot of accounting tricks too. More than once I have seen charts that lumped SS funds in with general revenue, because the SS surplus covers up some of the the general overspending and the huge payouts that SS makes help to make other spending look smaller.
“You think my $100 million pork project is a waste of money? Look, behind you, Social Security is over a third of the budget!!”
Remember too that people with earnings over the cap (100,000) have paid less into the system.
Someone earning say 300,000 per year pays 1/3 the percentage of their salary into SS than someone earning less than 100,000. Of course their benifits are capped too so it all evens out
Except that it doesn’t.
Those high earners have benefited from lower taxes overall due to the raiding of the trust fund.
Since that excess went into the “general fund” for all these years, tax rates have been adjusted (LOWERED) accordingly. Now that the IOU’s are comming due, we’re being told it’s time to rethink the whole system.
It’s actually the high wage earners who should make up the difference since they’re the ones who
benefitted from raiding the trust fund by paying lower taxes with the surplus. Of course they want to abolish the system now that the “bill” is due, scream socialism, and try and get your average joe to
head to wall street to invest in derivatives.
You are incorrect, then correct.
I don’t know who the “they” is in the post you refer to, but certainly any medium-of-exchange in which debt is denominated has it’s own currency risk, which must be evaluated in the course of any investment decision.
That’s why some investors prefer to hedge against these risks by holding baskets of different currencies, or commodities, or income-generating entities that produce income in different currencies.
I don’t know what you mean by “gold-buggery”…it’s hard to tell if you actually understand what you’re talking about, or have drawn a completely wrong conclusion, or are throwing out silly ad-hominem name calling in an effort to be cute. Maybe all three.
Please educate us.
In almost every government document that describes the overall deficit or surplus in the budget, one will find both the “on-budget” or “off-budget” numbers. If you want to include Social Security surpluses, look at one column. If you don’t, look at the other. It isn’t “covering something up” if all the data is right in front of you.
Gather around folks and let’s examine this big turd that IMM just deposited. This is a textbook example. See what he is saying here - he is saying that you either agree with him or admit that you are too stupid to handle your own money. He’s done the same thing with drug regulation - he says that since he is convinced that he can research the safety and efficacy of drugs (with no evidence that he can) you should too, and saying we need the FDA is admitting your intellectual weakness.
However, while most of us forced into this corner will say that we can do it, it is pretty clear that there are lots of Americans who can’t make good investment decisions, either from psychological factors like loss aversion or just through lack of math ability. SS is for everyone, not just for MBAs and PhDs.
And we have a great counter-example. Why regulate mortgages? You wouldn’t take out a mortgage you couldn’t afford, would you? Well, millions did exactly that, and IMM and his ilk now blame them.
If he got his way, when millions of the elderly have no money, he would no doubt blame them, and I somehow doubt that he’d support tax increases to keep them from starving. SS is forced retirement savings. In the libertarian paradise it wouldn’t be necessary since everyone would know to save for retirement, but in the real world a lot of the money would be spent. If you are unemployed, your SS remains untouched. Would any personal savings plan stay untouched if the alternative was immediate homelessness?
Is it a problem that people are living longer?
To make the discussion clearer, every time someone mentions that the SS trust fund contains “assets”, simply substitute “the promise of future tax increases”.
SS is not pay-as-you-go. Therefore one of the problems is that, back when the system was founded, there were more working people paying in than there were beneficiaries taking money out. Nowadays I believe the ratio is something like 3 people paying to every one taking out, and that is projected to drop to a 2:1 ratio.
Regards,
Shodan
I think you meant to say SS IS pay-as-you-go.
Social Security is not broke. It indeed does have a Trust Fund. Rightys just continuously make shit up.
You’re correct, of course. My apologies.
Regards,
Shodan
I don’t think I can answer that any better than Jas9 has here. It is fundamentally dishonest to talk about the fact that social security will have outlays exceeding revenues by 2018 (or whatever) without making it very clear that this is not a problem with social security because it has a trust fund…i.e., it is owed money by the federal treasury. So, the 2018 number has nothing to do with any fix that might or might not be needed to social security to keep it solvent into the indefinite future.
The fix is needed to the rest of the budget…and to imply that it is social security’s problem is, like I said, fundamentally dishonest. And, one motivation for such dishonesty may indeed be a desire to fix the budget woes on the backs of the workers who fund social security rather than on the backs of the wealthy who could and should pay quite a bit more through income tax increases. They are the ones who have made out so handsomely over the past ~40 years, on top of the fact that they weren’t so bad off to begin with…So, they are the ones who obviously should be contributing the most to solving the revenue shortfalls that we are facing in the future.
I missed that response (when in a hurry I skim the thread to see if anyone has quoted any of my posts). I agree with it.
Well, it is the beginning of a problem with Social Security because outflows are now exceeding inflows. The government will have to pay back the trust fund (and I have no doubt that they will) but will reach a point where the whole fund has been paid back and now inflows do not provide enough to pay the benefits, so something has to change.
If the thing being “fixed” is the deficit, I agree. SS does not affect the deficit. If the looming inflow/outflow imbalance is not resolved, AND the government then decides to make up the shortfall from the general fund, then SS would affect the deficit. I don’t even know whether it would be legal to do that.
I agree. I hope you were not viewing me as being one such person.
Here we may depart views. I think that many people can (or should be able to) afford to pay more taxes, not just the top 2% (or whatever). Let all the Bush tax cuts expire. Apart from the fact that the middle class can also afford higher taxes (and I am in that group), just taxing high earners is insufficient to fix the problem.
It was Alan Greenspan the Libertarian who was charged with fixing SS to take care of the boomers. He came up with the fund that would kick in when boomers started and then expire when the last ones kicked off. It was designed to be used . It is being used. That was the plan.
People who say we are hitting the fund and it is wrong ,do not understand. It is solvent for 30 years. I suppose we could tweak it and keep it at full force for many more decades. That would be the wise thing to do, but as this post shows, some people are too dumb to merit having it.
I don’t necessarily disagree with you, especially as part of an eventual solution…although I think the case is much more of a no-brainer for the case of the top 2% than it is for the middle class, and particularly so when the middle class is hurting so much and when the economy is in the dumps.