@justintempler -- Your comment disappeared (something wrong with YouTube). -- If productivity feeds into wage growth (as economics predicts, but class-war prevents) then retirees will maintain a standard of living. This is figured into the Social Security trustees projections. The worker-retiree ratio is a slightly different issue, but it, too, is already figured into the projections. There is no big problem.
@leearnold a forced safety net. . I save my money, work hard, go to school, and take care of my family. I'm forced to pay the govt a portion of my paycheck not for myself but to pay for those who are retired, disabled etc. now. My empoloyer is also forced to pay the govt the same amount which i would prefer go to me along with my fica payment with which i could save or place into a money market account. Believe it or not people didn't used to rely on the govt for their care.
@JesusMakeUpMyDyinBed -- Those whom you are paying for, paid BEFORE you, to others who were retired at that time. It is a social compact. We are also forced to stop at red lights and forced to contribute to the national defense. Some problems are easier to take care of if we make a simple law that covers everybody.
I've never liked Social Security primarily for the fact that a man should be taking care of his own future by the sweat of his brow, not relying on the govt to pay him back once he gets older. How stupid a concept is entrusting your money to crooks to pay you back once you are old and gray. This is so utterly stupid. Save, invest, and guard your own money instead of replying on the Govt to be your provider once you retire. Who thought of this idiotic idea of Social Security?
@JesusMakeUpMyDyinBed -- We just BAILED OUT all the investors, who have ditched the economy. So it is not the sweat of YOUR brow. But even in normal times, about 1/2 of all retirees would be below the poverty line without Social Security. The market system cannot work for everybody: no matter how good you think you will do, there will be lots of losers. The vagaries of life take people into very different scenarios. Social Security is just the safety net.
@JesusMakeUpMyDyinBed Social security has been around since 1935. In over 75 years it has never failed to meet a committment. It's a good system. As far as "the sweat of your brow," it sounds good, but things happen to people. They get sick, their husband dies, etc. I'm sure Social Security has been taking care of someone in your family, and it probably has for generations.
@MrIzzyDizzy -- You vote for the gov't. Don't vote for people who tell you that Social Security is in big trouble, because that is the only way you will be screwed. They are the ones you can't trust: they are lying, to scare you.
In the long term, wage growth has matched productivity gains due to competition for labor. In the short term, the U.S. is losing jobs in some sectors due to increased globalization, but that will likely turn around again.
look at the usnationaldebt clock at unfunded labilities - the baby boomers 1946 -63 are just starting to retire - this will add 1-2+ million per year for the next 15years - look at it jobs will decrease 1-2 per minute (hopefully this will change but very doubtful due to technological unemployment in the service sector which was the last job producing sector and also the non replacemnt of most retiring workers) also retires will rise 3-4 per minute - ratio is 2.1/1 (139 -66million) and droping
@MrIzzyDizzy -- All of this is already included in the Social Security trustees annual reports. A few minor tweaks to the system can make Social Security solvent forever. The main future problem is medical expenditure, public and private.
ii dont think it was a ponzie scheme - but its also not sustainable - partly because its surpluses were spent on other things but mainly because the demographics had changed - in the 30s the average life span was 63 - this meant that 1/2 the population died before recieving benifits and familys were much larger the number of people retiring was alway a small % of the number of people working cont
Two things: 1) A 'bond' IS an I.O.U. What do YOU call a piece of paper exchanged for real money that promises to pay the real money back at a later date? 2) When SS was created: The payer to payee ratio was 160:1, today it's 3:1 and declining. It was predicated on a 'lock box' that contained the actual excess funding UNTOUCHED. In the 60's LBJ raided the 'lock box', filled it with IOU's (now $2.6T) and diverted surpluses to general revenue. debt = GDP and 40% of spending's borrowed!
@justfactsallowed -- Don't fall for scare tactics. The payer-to-payee ratio is ALREADY included in the Social Security Trustee reports, and the whole system has a shortfall of around 0.6% of GDP over 75 years. That is just not a big deal. And don't confuse the two issues. The "lock box" is a separate issue and it disappeared into the Bush tax cuts, from whence it can reappear. The real future problem is medical spending.
All Americans should see this video...so many would be pissed. It all makes sense now. Don't let these "God bless Wall Street people" get in your minds. They rely on " greed and fear" to run the world.All other emotions like fairness, love, unity,and especially truth have no meaning to this business model...only the passion for greed. America is so much more than a "dream". Filled with passion for freedom, liberty, justice, heroism, bravery, and unity. More than a man could ever "dream".
report after report state that the rich have never been richer- corporations, financial institutions, indivuals are sitting on trillions of $'s- while the rest of the nation struggles on the brink of a depression, the elite .125%ers are enjoying wealth never seen before- all this thanks to trickle down policys of the last 30yrs, through every president & congress since reagan-
the results? social nets going bankrupt, infrastructure crumbling, unemployment, stagnation & a forming cast system-
@DangerDan1980 -- It's been upheld as Constitutional twice, and it has lasted 76 years. There is real political authority, and there is real economic need.
@D4Shawn -- No, everything is happening pretty much as the Social Security Trustees predicted. First, you confuse the need to start using the Trust Fund in 2012 with the exhaustion of the Fund in 2035 -- when the "shortfall" starts. Second, the need to start using the Trust Fund in 2012 was bumped up a few years to the present, due to the Great Recession. Note that after the "shortfall" begins in 2035, SS will still pay out more than today -- and the fix is a comparatively minor problem.
@leearnold: In 2010 Social Security took in LESS money than it payed out. This is known as a "shortfall", and due to the present state of the economy, we can expect these shortfalls to continue. As I'm sure you know, the "trust fund" is in the form of Treasury Bonds (IOUs). This means that when there is a "shortfall" (as described above), the government needs to RAISE money to cover the difference. In other words, S.S. is now running at a deficit.
@D4Shawn -- This is correct, but what you wrote before is misleading. The shortfalls have different reasons. The current one shouldn't be happening -- it is caused by an attempt to change the distribution of taxes, as follows: The money needed currently, was PREPAID by PAYROLL tax increases, to make a Trust Fund until about 2035. That money disappeared into the Bush Tax Cuts, which are INCOME tax cuts, benefitting a very different section of the people. Solution? End the Bush Tax Cuts.
social security is a ponzi scheme--the money that i'm paying now is going to today's retirees and the only way that i get any money is from new investors who will pay for me and so forth into perpetuity. thus, there's no way to guarantee that i'll get any money unless future investors make enough contributions. shifting demographics (fewer new investors and more retirees) along with the longer lifespan of the population will result in social security going bankrupt when i collect (i'm 24 now).
@ts235152 -- No, shifting demographics and longer lifespan are ALREADY figured into the Social Security Trustees' actual projections!
At this moment, if we increased payroll taxes 40 CENTS A WEEK, Social Security is solvent into perpetuity. And considering the multitude of sins it covers, that would be a real bargain.
But even without the fix, Social Security would pay 120% of current benefits AFTER a supposed default in 35 years.
Social Security's problems are not a big deal, people.
@ts235152 In essence, you're paying for your mom and dad and their moms and dads. In the same sense, your children will pay for you and your spouse when time comes. It's sort of tribal. It's also a moral thing... Do we take care of each other or not? Also, it's a great way to adjust savings to inflation. The only problem is the shifting sizes of age-groups. I come from a country where social security has been in place and working for almost a hundred years now and if they took it away, i'd move.
@68chargerlover -- It was just used for other government spending, which went right back into the economy. The "missing money" is really not important. The economy is just a great big cycle of money, going around on different avenues -- investing, consuming, taxing, whatever. It is what we decide to divert it to, before it goes back into the economy again. Times are bad now because of the financial crisis and resulting recession. In the long run, Social Security is very affordable.
I think that this ecolanguage is brilliant. Maybe you should do one to show how the joblessness, or shifting of jobs from america to elsewhere, happens. Also you should do a chart to show how huge corporations (particularly Wal-Mart) are bad for America. That is if you think corps. like Wal-Mart are bad for America.
@vidfann -- Thank you very much. There is a complete series on economics coming shortly. I don't think that the size of corporations is itself a bad thing, since it may make them more efficient. But it should be clear that wealth concentration is sending numerically more people to the bottom of the pile.
There is ABsolutely NOthing guaranteed about social security....except that you have to pay into the program. There are no guarantees that you'll get everything you are owed. The gov't can cut benefits at any time.
Your benefits can't be transferred (e.g. to a spouse) in the event of an early death.
@YouAmYeknur -- Then there is nothing guaranteed about anything else, either. We just had to bail out Wall Street because they were endangering the entire system of bank accounts. Social Security is ensured by the knowledge and the will of the voters. Don't fall prey to the anti-Social Security propaganda coming out of Washington, D.C.
@n4m1355 -- Why do you think "the government" can cut benefits at any time, without the politicians then being voted out of office? Who do you think they answer to? Wouldn't they first have to prepare the voters by constantly claiming that Social Security is unsustainable? And isn't that a lie?
@YouAmYeknur -- It is not hidden, it is out in the open and everyone may inspect the books.
It won't cost the government too much to privatize Social Security. It will cost the taxpayers too much. Social Security is by far the cheapest way by to prevent destitution in society.
The government is not suited to spend your money better than you do, except for market failures, requiring a safety net.
"Nobody ever left public office starving." Resentment is one of the telltale memes.
YES EVERYTHING WORKS JUST FINE UNTIL THE USA IS BANKRUPT AND THEN WE HAVE A DEPRESSION LIKE RIGHT NOW. SAME DUMB STUFF THE RICH AND REPUBLICANS HAVE DONE SINCE 1929.
@leearnold Only for the short term. Face it, such a move will bring diversity to a whole new level, bring about new cultures, minimize market failures to their respective locations, allow an angered and divided population to find themselves in a majority again, and the economies will improve over time. Besides, it's just one proposed idea.
Social Security sucks because it's able to be influenced by inflation. It should be hard assets which back its funding, not fiat currency in a big pool susceptible to deficits. Plus the idea that you're forced to save a portion of your life income for retirements, rather than being able to choose wiser options such as starting up a new small business (creating new private jobs, too), or sending your kids to private schools for a better education (which will increase their wealth through life).
@RaptillaMajor -- Social Security can be, and often is, inflation adjusted, so this is not an issue. On the issue of doing something else with your money, starting up a new small business depends upon having a good idea and access to credit. The question is why don't we do both: keep a safety net, and invest for the future on your own. Because obviously people can do both. The answer is usually that people make choices to consume instead.
@leearnold But taxes are too much through the roof to do any of these good investments. A good hefty amount of our income goes through taxation, and while social security might not be a great contributor to that bulk, it sure is something worthwhile to cut to get at least a little more income to do investments. And cutting it would open up minds to cutting other bulk.
@RaptillaMajor -- The main cause for current lack of investment is the lack of demand and the tendency to deflation, because at this moment it is smarter to hold onto money than spend it. This is about to change shortly. For most of the last 100 years, there has been no lack of credit to invest in good ideas.
@leearnold Lack of demand sounds like it stems from lack of being able to set up projects and businesses and other investments due to gov't regulations and taxation. I'd be less motivated to start up a business too if markets were highly regulated and taxed. Only corporations get away with this because they can afford to outsource and go to different countries with less regulation and taxes for their products, while small businesses have to go through the tougher, expensive routines.
@RaptillaMajor -- No, at the current time there is a demand recession, yet businesses are sitting on loads of cash. The circular flow of money has two halves: supply and demand. If you already have enough supply sitting idle as "capacity under-utilization", then there is no sense investing for even more. Because demand is the problem. Propping up consumer spending is the quick way out.
@leearnold As I said in my other post, this "demand recession" is because small businesses are demotivated to start up new projects, investments, and expansions (new demand) due to gov't regulations and taxation, and also the fear of a falling economy, rather than an improving economy. The only ones willing to do any investment to spur demand are the mega corporations that are outsourcing, and are really only creating demand in foreign countries, improving their economies (China, India, etc.).
@RaptillaMajor -- No, it is a consumer demand recession, not an investment demand recession. We know this because capacity is underutilized: there is existing physical plant which is idle. If there was any consumer demand, businesses wouldn't think twice about all the taxes and regulation they are complaining about. Stop believing the propaganda from the "Chamber of Commerce" in the Wall Street Journal.
@leearnold The present mortgage disaster stems from the Clinton years, where banks were encouraged (by gov't) to take on riskier loans to "promote affordable housing". Practices as these went on through the next decade even with Bush in office it seems. Either way, it seems government adjustment actually leads to more problems with the market than if the market was left alone.
@RaptillaMajor -- Markets left alone? Derivatives spread the risk until it was beyond computation and virtually meaningless. Thank Gram-Leach-Bliley. And financial deregulation in the Clinton years began in the Reagan years, when it started with the savings-and-loan crisis.
Somehow, putting millions of seniors into a gamble in the financial markets when the big shots don't even know what's going on, and the taxpayer bails everybody out every 5 years, sounds like a really bad idea.
@leearnold And derivatives are the invention of wall street and their corporate pals. The "deregulation" that shifted power from government to Wall Street was not deregulation at all, simply a transference of power from one big entity to another. Either way, the market loses out. Good deregulation leaves markets alone, and most deregulation does, but bad ones leave power of market to Wall Street. Funny that these Wall Street bastards end up in government too (both parties).
@RaptillaMajor -- No, Wall Street IS the market. And without any regulation at all, you would have extremely concentrated power in Wall Street. Many pure markets lead naturally to monopoly and oligopoly, before government ever gets involved.
@leearnold Well I don't see Main Street shooting up their members into government power like in Wall Street. Those Wall Streeters just forward the agenda in gov't from both parties, and that's part of the reason things are so bad. To consider Wall Street part of the market is undermining the idea of a free market. A free market means there's no centralization whatsoever, and wall street is a centralizer of the market.
@RaptillaMajor -- A bunch of Main Streeters just got elected, and they already appear to be as intellectually corrupt as the others.
But the free market does NOT mean there is "no centralization". Never in history. Market has various natural centralizations: monopoly, oligopoly, and what economists call "monopolistic competition". The only protection is government regulation to ameliorate it. So we overlap ALL the centralizations (called "institutions") for checks-and-balances on power.
The point is that whenever there's centralization, there's corruption. We can talk ages about how the centralization process begins in the free market too, manipulated by some foreign entity or not.
@RaptillaMajor -- And whenever there are "negative externalities" and/or "asymmetric information" in market transactions, there is corruption also. And these occur everywhere. (Two of the regular kinds of "market failures" studied in economics. No centralization involved in either one.)
The point is, you can't avoid corruption any sooner than you can do without TRANSACTIONS (of all types) and INSTITUTIONS (of all types). So we just design it so we can catch the crooks.
@leearnold But centralized corruption is the most widespread and negative of all, and any common corruption in the regular market will be quarantined around its immediate area, and most likely dissipate over time. The bigger the institutions and transactions, the more widespread the corruption will be, including government, which is key because government is supposedly able to stop or dissolve corruption. A limited government with smaller markets is the best solution, as with early US.
@RaptillaMajor -- You won't get smaller markets. They will be as big as they are now, more corrupt, and periodically will cause a complete collapse of the system of bank accounts and credit.
@leearnold Ah, but here's the fun part. Since society is too big to do anything about that, one proposed idea is to divide the current society into smaller units, and strive away from globalization, and let new sovereign nations spur from old empires, letting each different nation handle economics and policies their own way. That would make me happy, and would let others experience new facets to practice their own ideologies. Secession in US states was on the table not too long ago.
@RaptillaMajor -- If you divide into smaller units, you lose the "increasing returns to scale" in various private enterprises. See Adam Smith, chapter 1. That will lead to a lower standard of living, overall.
As an aspiring tax specialist cpa I can attest that if you have a ton of money and a smart accountant you can end up in a lower marginal bracket than most poor people thanks to clever planning.
This was especially true when bush lowered the capital gains tax. =)
@leearnold I hope you don't mean the Tea Party Movement, that movement was hijacked by corporate interest (the founders dislike that party now), and it's been too early for any real change to happen. Just look at the cabinet of Obama, Bush, Clinton, Reagan, etc. You'll see every cabinet has members of prominent Wall Street organizations and such, and even though it may not be a crime, you can see how the agenda of the administrations mimic the interests.
@RaptillaMajor -- Everybody knows that Wall Street-Washington is a single axis of power.
The problem with the Tea Party is that they are easily misled by Chamber of Commerce propaganda. The Tea Party is going to be talked into privatizing Social Security and repealing healthcare reform. Because it's better to be denied care by insurance companies, I guess.
Now it looks like Rand Paul has taken back his pledge to end earmarks. I didn't think the Tea Party would fail so soon!
1. Redistribution of wealth never works, and it's stealing.
2. You can invest your money almost anywhere and end up with more money then you started with.
3. Social security costs administrative costs, and doesn't produce anything for the economy.
4. Have you even considered that you could pay into an insurance company, like any other, that would pay you if anything DID go wrong? Gov doesn't stop you from doing this.
@Houshalter -- 1. It's not stealing. Everybody pays in.
2. This ignores market risk, and the vagaries of life. 1/3 to 3/4 of retirees would break even or lose, compared to the return on Social Security.
3. Social Security's administrative overhead is LESS THAN 1% -- it is possibly the most efficient program, public or private. A means-testing bureaucracy would cost much, much more.
4. Go right ahead -- no one is stopping you from making investments.
1. Ya, everyone is forced to pay in, and if they don't they get shoved in a little cell where politicians use them in ads saying "I put criminals behind bars!" It's stealing.
2. In a bank?! The Feds already insure and heavily regulate banks, at least enough to stop runs and failures.
3. Percentages are meaningless when you are talking about such massive quantities of money. Still, 1% less or 1% more, which would you choose?
@Houshalter -- 1. No matter how responsible people are, about 1/2 of retirees end up below the poverty line. This is probably true under any social or economic system. You don't know how you'll end up, either. It's just the safety net.
2. Social Security has survived since 1935. Take it to court.
3. It's a continuous generational transfer at the Treasury bond rate, with no profit-making. There is no way a private entity could or would do it.
@Houshalter Ah, yes. Redistribution, that is mal-distribution, works quite nicely thanks to policies that result in "flow up" instead of "trickle down" Google "Data on Income & Tax Distributions" to see them.
@me3tv -- (a) No, there is no evidence of this. I would bet the opposite is true: If you were to monetize ALL the personal and social transactions costs in providing a safety net while avoiding moral hazard, I would bet that Social Security is a VERY efficient system. (b) It does not matter to the argument. In economics, the employer's half of payroll tax is considered to be part of labor compensation.
c. fails to note the significant increase in government revenues that follow all major tax cuts because of greater employment and greater sales turnover.
d.Says a "bond is a promise and we should keep promises" - so how does this jive with Obama stealing the bonds from GM and Chrysler and giving the companies to the unions? Democrats do the same dances with figures.
@me3tv -- (c) No, that revenue increase has NEVER been sustained, beyond a short stimulus. Both Reagan's and Bush's tax cuts failed to pay for themselves, i.e. FAILED to close the revenue gap which they opened. (d) Obama had to bail-out Wall Street to prevent our whole bank account and credit system from collapsing, and you are complaining that the taxpayers didn't pay even more, to cover the debt deals that hedge funds wanted from the automakers? Are you a hedge fund manager?
e. fails to note the lower income strata is dynamic and by retirement MOST of that strata have moved upward one or two strata higher.
f. fails to note those remaining in lower strata at retirement are beneficiaries of many more government assist programs besides SS and these are NOT available to the higher strata
@me3tv -- (e) No, income mobility is a good thing but Social Security deals with retirement outcomes. About one-half of retirees would be under the poverty line without it -- in GOOD times. They are probably in worse shape now, although I haven't seen any statistics about this current recession. (f) Didn't we just BAIL-OUT Wall Street? Do you guys have to get food stamps, too?
Moreover, you look at taxes from a purely governmental stnadpoint. Your solution to a broken-ass budget is to raise the income (i.e. taxes) as opposed to omitting the broken communist polices that are causing budget deficits in the first place. Medicare, Medicaid, Social Security, Welfare, I could go on are all broken. You don't seem to get the concept that social security does not protect your finances. A couple hundred a month is poverty, and that is what SS is.
@patsfanczar -- No, the solution to a budget deficit is to FIX the causes that make it necessary, or else to PROVIDE for it. The safety net does not protect your finances any better than anything else can. It is just the safety net. We just bailed out the entire financial system. But the main spending problem is the growth in medical costs as reflected in Medicare.
@leearnold Moreover, how does it help for the government to steal a portion of your income, give it to some retiree, only for you to get paid less back around 45 years after it started? Tell me how it helps to shrink my money and take away from what I could invest? Increasing what I pay now won't fix it, SS doesn't grow, it shrinks. You are trying to use some complex economics when it is really as simple as I have explained.
@patsfanczar -- It is a safety net in a growing economy. You are not going to get paid back less. If and when Social Security needs to be fixed but we FAILED to fix it (which is unlikely), then you will STILL get more than retirees do today: an estimated 120% of today's benefit. So it's not in much trouble. People should also invest for their own future, BUT a large number will get back less money than the return on Social Security, due to market risk and the vagaries of life.
@leearnold Tell me how social security will grow (as in a real investment). It doesn't. The only possible thing to happen to the money an individual payed in to social security originally is for less to come back out (as the percentage of retirees grows, your piece of the pie shrinks, simple economics). Social security is NOT a safety net. You can NOT retire on the little you would get back from social security. It is a worthless communist policy, and clearly you don't understand real economics.
@patsfanczar -- People do NOT think it is enough to retire on. It is ONLY the safety-net. It is NOT an investment: NOT a capital improvement leading to productivity. Standard of living improves by productivity from innovation. Wages (usually) increase with productivity, buying more things than before. Soc. Sec. is a steady tax rate on wages. Therefore it provides more benefit at the exact rate of productivity in the general economy. Current projection: Any benefit shortfall will be easy to fix.
@leearnold Two words: um, no. You can't retire at all on it (unless you plan on being some hobo), so it is in no way a safety net. It is all about feeling. Social security has saved no one. Social security doesn't increase with productivity because wages don't increase in productivity. You spend to much time in your economics room and to little time thinking real world. Nobody just increases or decreases wages based upon how their company is doing.
@patsfanczar -- No, there are many retirees at the present who have little other income.
In the real world, real wage rates closely track the productivity rate, historically. The basic reason is competition in labor markets. For a complete short discussion of how this works out, google: "Greg Mankiw's Blog: How are wages and productivity related?"
@leearnold Furthermore, social security is a waste of money because it CAN'T grow, therefore taking away from what a person can invest and have actually grow. Safety net: lie. If I want a dang safety net, I will stuff it in my mattress, it is safer there than in government hands (as you seem to agree with your moving-the-money theory). Flat out, why not privatize social security? When was the last time the government made any innovations?
@patsfanczar -- Gov't R&D results? The internet, among other things.
Social Security is a guaranteed return at the same average rate as U.S. Treasuries, around 3%.
If we had privatized Social Security, we would have had to bail out all the retirees in the recent financial crisis. They would be holding Treasuries right now, so we would STILL be paying them out of taxes.
Privatization also has a lump-sum cost LARGER than any likely shortfall. See the video.
@leearnold IF it wasn't for government in the first place we wouldn't have such a bad economy right now. "If we had privatized Social Security, we would have had to bail out all the retirees in the recent financial crisis." or "Therefore it provides more benefit at the exact rate of productivity in the general economy."
So which one is it? I don't think you understand yourself what you are saying.
@patsfanczar -- Government is not the cause of recessions. It didn't cause the Great Depression either.
The financial bailout was to prevent a one-time crash in value of everyone's private assets. That is completely different from the question of how to maintain a long-term safety net based on earnings.
Besides bad language, I delete comments which have false or misleading information, or when commentators persist in not studying the subject. Your comment will be deleted shortly.
@leearnold You are one pro flip-flopper. Weren't you just attacking the banks about a bailout? Social security is hardly a safety net. It does not grow. It takes away from what one could really invest in their retirement to get a real return. You can't force a fake "safety net" on a person.
@patsfanczar -- There is a very big difference between (1) bailing-out an entire credit system so the whole economy doesn't crash, and (2) further rewarding the rich people who are still whining for even more loot on top of that.
When you are old and gray and full with sleep, and all your clever investment schemes to make batches of dough have bit the dust instead, we will be forcing Social Security benefits on you, too -- and you will, like a hundred million others, be thankful for it.
@leearnold For one, it isn't the government's responsibility to make sure banks that were engaging in bad business don't go out of business. For two, you yourself said that one CANNOT RETIRE on social security alone, so what good does it do? Social security is nothing but robbery from an investment that could be better made in a private market, not government taxation.
@patsfanczar -- Some banks did go out of business. But the whole financial system started going out of business and the whole monetary system was going to collapse. Because it is ALL held as bank deposits and credit. Bank accounts, mortgages, paychecks would stop dead. Everybody in the country would be in bankruptcy court for a year or two, trying to reclaim their assets.
The solution to this is (1) save the financial system, then (2) regulate it better, and put an end to "too big to fail".
@patsfanczar -- -- No, I wrote that no one "thinks" that Social Security is enough to retire on. Many people DO retire on it, however. There are lots of retirees eating catfood. You don't hear about them, because they don't whine and complain like people who don't understand how the world works.
@leearnold As far as the comment filtering goes, all I have to say is "typical." You support a communist policy, you filter like a communist government.
Your "without SS 50% of retirees would be below the poverty line" is made up unproven false propaganda. SS doesn't grow, so it is wasted money. Your economics is also twisted. People aren't producing a larger relative income. The way you sell it, people are producing nacho chips which go into the ss "surplus" somehow. You made it WAY to complex. Simply put, % of retirees grows, so you are getting LESS out than you even put in.
@patsfanczar _ Google "Policy Basics: Top Ten Facts on Social Security's 70th Anniversary" -- In better times Social Security keeps half of retirees above the poverty line; it is worse than that at the moment. The standard of living grows under capitalism, so you can buy more things than before. % of retirees is built into the projections already. Please learn economics before going further.
leearnold i don't know where you have been getting your information from, but the government has been taking money from the social security trust fund since Reagan . Or i should say since the early 80's. they have been taking money out by the trillions, and they have never paid it back. leearnold it's not normal practice, it's called stealing. really!!!
@FreeByrd5362 -- It's not due to be paid back until NOW. The budget surpluses projected by Clinton disappeared into the Bush Income Tax Cuts which favored the people above the payroll tax cap. We didn't get any extra economic growth from those income tax cuts though that was claimed by the taxcutters. The Trust Fund can be repaid out of letting those income tax cuts expire. It's not going to be "stealing" unless you let them get away with it.
If it wasn't for the government pretending social security was just another checking account for them. then there would be no problem with social security now would there?
i thought the government was there to serve and protect our constitutional rights, not lie and steal from us. you know there is too much fluoride being put in our drinking water when the government doesn't know what the truth is, let alone speak it.
Just because you didn't know about it, doesn't mean that anyone was hiding anything from you. The idea of making a paid-forward credit account, and then using this "Trust Fund" money for current government spending, then paying it back, out of future economic growth, is completely normal -- there is no stealing. At least, not yet.
It is unfortunate that a video designed to appear as an educational item really ends up as a crude propaganda piece. Number one, if an investor "gambled" on stocks in 1926, $1 would have grown to over 2,500 by the end of 2009 in large US stocks and over 39,000 in small value US stocks. However, the same $1 in government bonds, would only be worth $85 today. Number two, we are successful as a country precisely because we haven't punished achievement as much as the rest of the world.
@debbielwinkler -- (1) The video headline says "Politics" and in the video it is labeled "a polemic". Let us NOT allow ANYONE to hide behind a pose of pure economics. (2) The return on stocks is greater than bonds, but you must remember about RISK -- see discussions in the comments below. (3) Social Security doesn't punish achievement. But the Bush income tax cuts DRAINED the extra payroll taxes right out of the Trust Fund -- and didn't give us any extra economic growth!
@leearnold My comment wasn't about Social Security punishing achievement. It was just a general observation about how the left tends to look at tax increases on the "rich". The "rich" are the job creators and elect to leave a country or avoid taxes if they are excessively targeted. That hurts everyone. As for investment risk, I am far more concerned about inflation risk than market risk. By owning stocks I own the entity who must raise prices due to currency devaluation (inflation).
@debbielwinkler -- Who cares what the Left thinks? If you increase payroll taxes then you only cut income taxes, you're not playing fair.
Anyone can start a business and the rich don't create all the jobs, or else they should have done a lot better after the Bush Tax Cuts.
Social Security doesn't cause inflation and beneficiaries keep pace with a cost of living adjustment. Inflation causes problems in Medicare and income tax, but they could be fixed as well as anything else.
@debbielwinkler Sorry, debbie, but the "rich" don't create jobs, small businesses create the majority of the jobs in this country. The "rich" can MOVE their jobs overseas while small businesses remain here, in the good ole USA.
@btdenn -- It should be pointed-out that the economy looks bad, but that won't last. Recessions are short-term things, and the real solid trend line is that per capita GDP has gone up about 2% per year since the late 1800's. Once the economy starts using computers in an integrated way (we are not there yet), productivity is expected to rocket. And the medical sector should be welcomed as a growth industry, providing new jobs and incomes, and hopefully finally bringing down per-unit costs.
@btdenn -- I can't find your other comment, but the reason Social Security stabilizes as a percentage of GDP is that the rate of entry of new retirees maxes-out with the Baby Boom, and after that, everybody's cost of living increases are geared to the GDP. For example, there was no increase last year.
If Social Security is in the red the Federal Govt has to pay money from the general fund to pay back the trust fund. Regardless of the size of the trust fund it's still going to come out of current tax payers and runs out. This means is the rate of the return on Social Security trust fund and how it was invested was not enough to accommodate the retirees at current benefit levels. Keep in mind the Federal govt has also increased the payroll tax multiple times. That's fail X 2
@btdenn -- Also keep in mind: (1) Social Security will stabilize as a % of GDP. (2) The date of Trust Fund exhaustion is now about 30 years away. (3) 78% of benefits continue afterward. (4) Fixing that shortfall is a MINOR problem. (5) Annual projections change these numbers, usually for the better.
MEANWHILE, medical costs are set to explode and destroy us!
Fix Social Security first? Then the politicians will borrow the money again, and avoid dealing with the real problems again. Wrong order.
@leearnold 1) the GDP hasn't stabilized. We have no idea what GDP growth will be going into the future. Most countries with the level of entitlements the US has undertaken have a much lower GDP growth rate. 2&3) The date Social Security was predicted to be negative has happened earlier than expected. The govt is trying to fix this inflation mess through inflation. If they succeed what do you think will happen to the value of the trust fund relative to the cost of living?
@btdenn -- (1) I didn't write that the GDP stabilizes. Social Security stabilizes as a percentage of GDP - going from 4.6% of GDP now to about 6% in 20 years, then leveling off. By contrast, Defense spending jumped more than that, for the Iraq War. (2) In 1997, the SS was supposed to be gone by 2031, now it's 2037 -- it would be further, but for two very bad recessions. The dates change, due to GDP growth, recession, productivity, etc. (The Fed Reserve will definitely not let inflation happen.)
@leearnold 4&5) They expect to raise taxes or remove the cap. Currently the cap increases annually. Implying a program is successful when taxes and cap are continuously raised to maintain it's viability is not reasonable. It screams the rate of return of the Social Security trust fund is inadequate to meet with the needs of retiring seniors. It completely relies on the ability of current taxpayers to fund it whether they are paying back the trust fund or paying benefits.
@btdenn -- The Social Security fix, if and when it comes, needs no more than a mix of small tweaks. The cap doesn't need to be removed -- just raise it a little, to the original intent of covering 90% of all income. Payroll tax for SS would need a tiny increase. Once again, it is Medicare that is going to be the killer, unless we do even more than Obamacare does to try to control medical cost increases overall.
@leearnold If GDP falls below historical averages funding ALL of our entitlements is going to drive the US economy into the ground. If we continue to borrow at a rate greater than GDP growth in perpertuity, and there is no indication that will not be true based on demographics and globaliszation, it's game over.
@btdenn -- If GDP falls below historical averages, then we are going to have a lot more trouble than just the entitlements! But it's a good thing you included ALL entitlements, because we could "fix" Social Security tomorrow, and Medicare will still destroy us. It's the 800-pound gorilla that really rules the discussion. Fix Medicare, and all other problems are solved. Don't fix Medicare, and it won't matter if you END Social Security, it's still game over. Let's focus on the real problem.
@Denon3333 -- That would have (A) undermined Social Security financing, (B) given only a short-term economic stimulus, and (C) inflated the mortgage bubble further.
On the other hand, by insisting on income tax cuts, the ruling class showed that they: (1) don't understand economics, (2) really don't care about deficits (they own most of the bonds); (3) are not serious about the long-term needs of the country; and (4) are willing to engage in naked class war.
@Denon3333 -- Depends on short-term or long-term. Short-term we have a demand-driven recession, so that wouldn't work. In the long-term, the main Federal spending problem is reducing medical per-unit cost growth (which increases Medicare spending). Business start-ups have more problems with local laws than Federal ones, I think. But this is getting off topic.
@leearnold Well, it is not going out of point. You wanna save Social Security with real ways, correct? The simple thing is to destroy it and replace it with a banking system. In fact, we can just replace the system with the help of banks. In fact, banks can just give the retirement systems themselves. And yeah, that's why I said to lossen laws for starting businesses as it ensures services can be easily set up by businesses.
@Denon3333 -- We already have a banking system, and we just had to bail those crooks out at a rate that is much greater than the supposed coming shortfall in Social Security. So much for loosening regulations!
In fact Social Security isn't in nearly as much trouble as the financial system and the fixes, if necessary, will be minor. Please find something else to worry about.
great video people always complain about taxes and social security without knowing how it works, maybe if we didn't spend so many taxpayer dollars on useless wars then people wouldn't be complaining about social security. People need to learn to be patriotic about something other than war.
"Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program's actuary." - The Washington Times Thursday August 5, 2010
@TheVegasPatriot -- No, not in the red: Workers paid extra payroll taxes into a Trust Fund that was vacuumed-out by the Bush Tax Cuts going mostly to the wealthiest. Those Bush Tax Cuts are expiring. Social Security doesn't use up the Trust Fund until 2037, then benefits drop to 78% level, which is around 120% of today. And that won't take much to fix.
Social Security: STILL no crisis!
The Washington Times is a right-wing propaganda machine -- no more of that stuff here.
@leearnold I don’t know what your source of information is, but I don’t care if you are Jo Anne B. Barnhart, herself. I don’t believe anyone in the government can tell the truth! The very fact that you are bashing one side in favor of the other tells me you are a full crap. And just so you know, media such as CNN and THE NY TIMES are reporting the same information and they are not “right-wing propaganda machines.”
@TheVegasPatriot -- Google: "2010 Social Security Trustees Report Summary" and read it YOURSELF. Do NOT believe ANY quickie news reports on this issue!
Read the whole paragraph 6: SS spending starts to exceed revenue regularly in 2014 and then is covered by the "trust fund" to 2037.
These dates usually push further into the future, every year. But this recession has kept the dates same as last year.
If you want something to worry about, then fix Medicare. Now THAT is a problem!
Leearnold- You want examples of half-truths/propaganda. (1) "SS is never going to have a big problem." FALSE! It's BIG problem now is that all of its excess, the "SS Trust Fund" has been SPENT! (2) "SS is discreet & dignified" -- according to whom?? Depending on the govt. for money after they've blown all of our taxes is dignified?? (3) Productivity argument is a HALF-TRUTH- Productivity can't overcome the baby-boom wave of retirees starting NOW. Leearnold don't you dare delete my post!
@CAridge2008 (3) They increased PAYROLL taxes but then cut INCOME taxes, thus the draining the payroll Trust Fund. Productivity has nothing to do with this short-term swindle. (1) If Congress sticks to PAYGO for the whole budget (for example, the Bush Tax Cuts expire as scheduled) then the long-term budget (includes Soc. Sec.) is roughly BALANCED -- new CBO report! Then we can pay down outstanding debt. (2) "Discreet" means SS goes to everybody without means-testing, or a big bureaucracy.
@leearnold I don't disagree with all you say. For example, you're right that Bush increased borrowing from the SS excess, because he (and Congress) DIDN'T CUT GOVT. SPENDING when he CUT TAXES. So he did only half the job. If he wasn't going to cut spending then he shouldn't have cut taxes. BUT every President since Kennedy has taken from the SS excess, Democrats & Republicans. LBJ started the practice of lumping the SS$ in with the general fund. Moral: DON'T TRUST GOVT with TOO MUCH MONEY!
@CAridge2008 Or the moral is, Keep paying attention and remember that it comes due. Don't let politicians scare you that the money is somehow "missing". Clinton + Republican Congress started balancing the long-term budget, which would have made it easier to start repaying the SS Trust Fund. Obama + Democratic Congress also just did the same thing. Let's stick with the guys who are doing it right.
This video has some half-truths in it, but they are tinged with extremely manipulative language and propaganda. Actually it's demeaning, the speaker thinks that the viewers are so stupid and able to be manipulated.
Social Security is in DEEP, DEEP trouble for ONE reason: the US taxpayers entrusted the Federal government with keeping and protecting a LOT of money, when the govt. only knows how to spend it. Republicans, Democrats, whatever, they can't be trusted to be wise with OUR MONEY.
@CAridge2008 You might at least point to an instance of "half-truth" or "propaganda." Meanwhile you say Social Security is "DEEP, DEEP trouble" -- this is false and demeaning. In reality, if it ever needs a fix, it is going to be a little one. I delete comments which contain unsubstantiated assertions, or false or misleading information. Yours will be deleted shortly.
yep. And here in 2010 we have the recessions. and how do they fix it? Raise the deficit , pay it to the rich, and it will stimulate the economy?....... sigh...
@mycrystalmind It doesn't always have to go to the rich.
Economists haven't agreed on the cause of the business cycle. Experience shows the boom/recession cycle never ends. Basic way to ease recessions is SHORT-term deficit spending and then SHORT-term tax cuts -- if you equalize these in the next boom, by reducing spending and raising taxes.
Don't confuse this with the LONG-term budget, which is shaped by bigger flows. Google: "CBO June 2010 Long-Term Budget Outlook"
This video fails to take in to account inflation. Its also fails to take in to account that the Bush tax cuts actually increased the amount of money the government recieves from taxation. It also fails to take in to account that the Bush tax cuts only look like they benefit the rich because the rich pay more taxes and any percentage of a tax cut will always result in more money coming back to the rich. Of course the rich doesen't just let their money sit there.
@CWSmith1982 -- Please read the other comments before making incorrect assertions: (1) Inflation is not an issue here. (2) The Bush Tax Cuts did not even pay for themselves. (3) There are different kinds of taxes. (4) In fact the economy underperformed for most people, while others parked the money on Wall Street for a huge financial disaster.
Billionaire's estate tax...... seems I'm misinformed about the estate tax primarily affecting the middle class and being a huge boon to the estate planning industry.
@rusty2b It does not "primarily affect the middle class." Due to exemptions only a tiny percentage (currently around 0.3%) of estates are affected by the tax.
How so? Nothing has changed. There is a new spate of Social Security doomsaying in the media propaganda, but nothing has really changed that the end of the recession won't cure.
Nothing? Social Security is paying out more than it takes in NOW, not 10 or 20 years from now.
The end of the recession? Keep your fingers crossed. Our government's intervention hasn't worked, just like it didn't work during the Great Depression, just like it didn't work any other time. These TBTF banks still have over $400T of "toxic assets" on their books. Where's that going? It's going to go right on the back of the tax payer, when the TBTF banks have an "emergency."
Social Security was projected to start dipping into its "trust fund" by 2011 or 2017 (the date aways moved around due to economic growth or lack of it.) The current recession is big and moved the date to now. When growth returns, the boom will likely be big due to pent-up demand, will increase tax revenue, and will make trust fund payback easy for decades more. The money disappeared into the Bush Tax Cuts. If it needs a fix, it will be a little one. Find something else to worry about.
I think we have quite a ways to go in this "recession," so that "pent up demand" may have to wait a while. Meanwhile, things like Social Security, Medicare, and public pensions are weigh us down. I know they provide a social safety net, but Chile has privatized their social security and for 20 or 30 year's it's apparently been a huge success. We need to start thinking long-term otherwise our problems with only build.
Privatizing Social Security means we'd be bailing-out all the retirees via Wall Street right now. Instead, SS has been a big stabilizer through this crisis.
Last news I read from Chile was that people didn't like the new system, most want the old gov't system back. That news came BEFORE the world financial crisis.
CBO's long-term budget outlook shows that SS is not a big problem. Medical spending is the problem -- yet some people are against Obamacare's mild cost-reduction measures!
If you do a search for "Cato social security," you'll see Jose Pinera saying that we have a $100T unfunded liability for social security.
I don't understand what the cost-cutting measures are in the new health insurance law. That increases our deficit by $600B over 10 years when you factor in the Medicare costs.
These things are broken, Medicare, Social Security. The government should not be intervening in the market. It just messes things up (like in the Great Depression)
Pinera's may be one of those scarifying "infinite horizon" calculations. Anyway a meaningless number since, like anything else, it's not all due in one lump.
The cost-cutting measures in ACA law (Obamacare) will likely be discussed soon in the newspapers. There are about 5 or 6 main ones, including making administrative procedures more uniform, and competition in exchanges.
Government just saved us from another Great Depression. Sometimes there are market failures. Like in healthcare
@joshfultondotblogspo All privatizing would do is carve out profit for the already wealthy. If we would have adopted this Bush proposal it would have been a complete disaster. Social security would be fine if left alone and it is an essential "entitlement", a paid for entitlement. Chile's system is a failure.
Social Security won't need a fix for 25 to 30 years, if at all. Right now it is not going broke: the Trust Fund is needed. The Trust Fund money disappeared into the income tax cuts, and it can reappear the same way. This has nothing to do with who was elected.
@justintempler -- Your comment disappeared (something wrong with YouTube). -- If productivity feeds into wage growth (as economics predicts, but class-war prevents) then retirees will maintain a standard of living. This is figured into the Social Security trustees projections. The worker-retiree ratio is a slightly different issue, but it, too, is already figured into the projections. There is no big problem.
leearnold 4 months ago
@leearnold a forced safety net. . I save my money, work hard, go to school, and take care of my family. I'm forced to pay the govt a portion of my paycheck not for myself but to pay for those who are retired, disabled etc. now. My empoloyer is also forced to pay the govt the same amount which i would prefer go to me along with my fica payment with which i could save or place into a money market account. Believe it or not people didn't used to rely on the govt for their care.
JesusMakeUpMyDyinBed 4 months ago
@JesusMakeUpMyDyinBed How does Social Security effect private insurance and retirement investment firms?
JesusMakeUpMyDyinBed 4 months ago
@JesusMakeUpMyDyinBed -- 'How does Social Security effect private insurance and retirement investment firms?"
Ans. -- Not at all.
Ques. -- How much money did the U.S. taxpayer pay, to SAVE all of those insurance firms and investment firms in the financial crash?
leearnold 4 months ago
@JesusMakeUpMyDyinBed -- Those whom you are paying for, paid BEFORE you, to others who were retired at that time. It is a social compact. We are also forced to stop at red lights and forced to contribute to the national defense. Some problems are easier to take care of if we make a simple law that covers everybody.
leearnold 4 months ago
I've never liked Social Security primarily for the fact that a man should be taking care of his own future by the sweat of his brow, not relying on the govt to pay him back once he gets older. How stupid a concept is entrusting your money to crooks to pay you back once you are old and gray. This is so utterly stupid. Save, invest, and guard your own money instead of replying on the Govt to be your provider once you retire. Who thought of this idiotic idea of Social Security?
JesusMakeUpMyDyinBed 4 months ago 2
@JesusMakeUpMyDyinBed -- We just BAILED OUT all the investors, who have ditched the economy. So it is not the sweat of YOUR brow. But even in normal times, about 1/2 of all retirees would be below the poverty line without Social Security. The market system cannot work for everybody: no matter how good you think you will do, there will be lots of losers. The vagaries of life take people into very different scenarios. Social Security is just the safety net.
leearnold 4 months ago
@JesusMakeUpMyDyinBed Social security has been around since 1935. In over 75 years it has never failed to meet a committment. It's a good system. As far as "the sweat of your brow," it sounds good, but things happen to people. They get sick, their husband dies, etc. I'm sure Social Security has been taking care of someone in your family, and it probably has for generations.
bruceduece1 1 month ago
@MrIzzyDizzy -- You vote for the gov't. Don't vote for people who tell you that Social Security is in big trouble, because that is the only way you will be screwed. They are the ones you can't trust: they are lying, to scare you.
In the long term, wage growth has matched productivity gains due to competition for labor. In the short term, the U.S. is losing jobs in some sectors due to increased globalization, but that will likely turn around again.
leearnold 4 months ago
look at the usnationaldebt clock at unfunded labilities - the baby boomers 1946 -63 are just starting to retire - this will add 1-2+ million per year for the next 15years - look at it jobs will decrease 1-2 per minute (hopefully this will change but very doubtful due to technological unemployment in the service sector which was the last job producing sector and also the non replacemnt of most retiring workers) also retires will rise 3-4 per minute - ratio is 2.1/1 (139 -66million) and droping
MrIzzyDizzy 4 months ago
@MrIzzyDizzy -- All of this is already included in the Social Security trustees annual reports. A few minor tweaks to the system can make Social Security solvent forever. The main future problem is medical expenditure, public and private.
leearnold 4 months ago
ii dont think it was a ponzie scheme - but its also not sustainable - partly because its surpluses were spent on other things but mainly because the demographics had changed - in the 30s the average life span was 63 - this meant that 1/2 the population died before recieving benifits and familys were much larger the number of people retiring was alway a small % of the number of people working cont
MrIzzyDizzy 4 months ago
@MrIzzyDizzy -- No, the demographics are already included in the Social Security Trustee's annual projections. The necessary fixes are minor.
leearnold 4 months ago
Two things: 1) A 'bond' IS an I.O.U. What do YOU call a piece of paper exchanged for real money that promises to pay the real money back at a later date? 2) When SS was created: The payer to payee ratio was 160:1, today it's 3:1 and declining. It was predicated on a 'lock box' that contained the actual excess funding UNTOUCHED. In the 60's LBJ raided the 'lock box', filled it with IOU's (now $2.6T) and diverted surpluses to general revenue. debt = GDP and 40% of spending's borrowed!
justfactsallowed 4 months ago
@justfactsallowed -- Don't fall for scare tactics. The payer-to-payee ratio is ALREADY included in the Social Security Trustee reports, and the whole system has a shortfall of around 0.6% of GDP over 75 years. That is just not a big deal. And don't confuse the two issues. The "lock box" is a separate issue and it disappeared into the Bush tax cuts, from whence it can reappear. The real future problem is medical spending.
leearnold 4 months ago
All Americans should see this video...so many would be pissed. It all makes sense now. Don't let these "God bless Wall Street people" get in your minds. They rely on " greed and fear" to run the world.All other emotions like fairness, love, unity,and especially truth have no meaning to this business model...only the passion for greed. America is so much more than a "dream". Filled with passion for freedom, liberty, justice, heroism, bravery, and unity. More than a man could ever "dream".
MrBobztermon 4 months ago
report after report state that the rich have never been richer- corporations, financial institutions, indivuals are sitting on trillions of $'s- while the rest of the nation struggles on the brink of a depression, the elite .125%ers are enjoying wealth never seen before- all this thanks to trickle down policys of the last 30yrs, through every president & congress since reagan-
the results? social nets going bankrupt, infrastructure crumbling, unemployment, stagnation & a forming cast system-
aztecadog 6 months ago
Sunset this unconstitutional program. There is no authority for the Federal Government to force me to give them money for my retirement.
DangerDan1980 6 months ago
@DangerDan1980 -- It's been upheld as Constitutional twice, and it has lasted 76 years. There is real political authority, and there is real economic need.
leearnold 6 months ago
Heh... the "shortfalls" began in 2010. You were only off by, like, 30 years!
D4Shawn 9 months ago
@D4Shawn -- No, everything is happening pretty much as the Social Security Trustees predicted. First, you confuse the need to start using the Trust Fund in 2012 with the exhaustion of the Fund in 2035 -- when the "shortfall" starts. Second, the need to start using the Trust Fund in 2012 was bumped up a few years to the present, due to the Great Recession. Note that after the "shortfall" begins in 2035, SS will still pay out more than today -- and the fix is a comparatively minor problem.
leearnold 9 months ago
@leearnold: In 2010 Social Security took in LESS money than it payed out. This is known as a "shortfall", and due to the present state of the economy, we can expect these shortfalls to continue. As I'm sure you know, the "trust fund" is in the form of Treasury Bonds (IOUs). This means that when there is a "shortfall" (as described above), the government needs to RAISE money to cover the difference. In other words, S.S. is now running at a deficit.
D4Shawn 9 months ago
@D4Shawn -- This is correct, but what you wrote before is misleading. The shortfalls have different reasons. The current one shouldn't be happening -- it is caused by an attempt to change the distribution of taxes, as follows: The money needed currently, was PREPAID by PAYROLL tax increases, to make a Trust Fund until about 2035. That money disappeared into the Bush Tax Cuts, which are INCOME tax cuts, benefitting a very different section of the people. Solution? End the Bush Tax Cuts.
leearnold 9 months ago
Thanks for the vid.
SirMalikCobra 10 months ago
Awesome
jthompjd 1 year ago
yes funding war is more important than our seniors paying their bills to live
L0stInDespair 1 year ago
social security is a ponzi scheme--the money that i'm paying now is going to today's retirees and the only way that i get any money is from new investors who will pay for me and so forth into perpetuity. thus, there's no way to guarantee that i'll get any money unless future investors make enough contributions. shifting demographics (fewer new investors and more retirees) along with the longer lifespan of the population will result in social security going bankrupt when i collect (i'm 24 now).
ts235152 1 year ago
@ts235152 -- No, shifting demographics and longer lifespan are ALREADY figured into the Social Security Trustees' actual projections!
At this moment, if we increased payroll taxes 40 CENTS A WEEK, Social Security is solvent into perpetuity. And considering the multitude of sins it covers, that would be a real bargain.
But even without the fix, Social Security would pay 120% of current benefits AFTER a supposed default in 35 years.
Social Security's problems are not a big deal, people.
leearnold 1 year ago
@ts235152 In essence, you're paying for your mom and dad and their moms and dads. In the same sense, your children will pay for you and your spouse when time comes. It's sort of tribal. It's also a moral thing... Do we take care of each other or not? Also, it's a great way to adjust savings to inflation. The only problem is the shifting sizes of age-groups. I come from a country where social security has been in place and working for almost a hundred years now and if they took it away, i'd move.
freedomthrough 11 months ago
@freedomthrough Dont forget the problem of LBJ opening social security to government borrowing, which will never get paid back.
68chargerlover 10 months ago
@68chargerlover -- It was just used for other government spending, which went right back into the economy. The "missing money" is really not important. The economy is just a great big cycle of money, going around on different avenues -- investing, consuming, taxing, whatever. It is what we decide to divert it to, before it goes back into the economy again. Times are bad now because of the financial crisis and resulting recession. In the long run, Social Security is very affordable.
leearnold 10 months ago
I think that this ecolanguage is brilliant. Maybe you should do one to show how the joblessness, or shifting of jobs from america to elsewhere, happens. Also you should do a chart to show how huge corporations (particularly Wal-Mart) are bad for America. That is if you think corps. like Wal-Mart are bad for America.
vidfann 1 year ago
@vidfann -- Thank you very much. There is a complete series on economics coming shortly. I don't think that the size of corporations is itself a bad thing, since it may make them more efficient. But it should be clear that wealth concentration is sending numerically more people to the bottom of the pile.
leearnold 1 year ago
There is ABsolutely NOthing guaranteed about social security....except that you have to pay into the program. There are no guarantees that you'll get everything you are owed. The gov't can cut benefits at any time.
Your benefits can't be transferred (e.g. to a spouse) in the event of an early death.
This video is misleading.
YouAmYeknur 1 year ago
@YouAmYeknur -- Then there is nothing guaranteed about anything else, either. We just had to bail out Wall Street because they were endangering the entire system of bank accounts. Social Security is ensured by the knowledge and the will of the voters. Don't fall prey to the anti-Social Security propaganda coming out of Washington, D.C.
leearnold 1 year ago
@leearnold thats a bold assumption don't you think? what proof do you have that its merely propaganda?
n4m1355 1 year ago
@n4m1355 -- Why do you think "the government" can cut benefits at any time, without the politicians then being voted out of office? Who do you think they answer to? Wouldn't they first have to prepare the voters by constantly claiming that Social Security is unsustainable? And isn't that a lie?
leearnold 1 year ago
Comment removed
YouAmYeknur 1 year ago
@YouAmYeknur -- It is not hidden, it is out in the open and everyone may inspect the books.
It won't cost the government too much to privatize Social Security. It will cost the taxpayers too much. Social Security is by far the cheapest way by to prevent destitution in society.
The government is not suited to spend your money better than you do, except for market failures, requiring a safety net.
"Nobody ever left public office starving." Resentment is one of the telltale memes.
leearnold 1 year ago
Comment removed
YouAmYeknur 1 year ago
@YouAmYeknur -- The economics teacher will flunk you. Government spending is a component of GDP -- a part of market demand.
The shape of the distribution of income is not based entirely on skill. It is also based on luck.
The shape of the distribution of income always looks the same: There are always people left out. See chapter 2 of "The Bush Tax Cuts."
leearnold 1 year ago
Buying missiles and aircraft carriers I can abide. Paying to study the harvest field mouse, I cannot.
I'll be doing everything possible to keep money in the pockets of the people who earned it.
YouAmYeknur 1 year ago
@YouAmYeknur -- So you are against scientific study, too?
leearnold 1 year ago
YES EVERYTHING WORKS JUST FINE UNTIL THE USA IS BANKRUPT AND THEN WE HAVE A DEPRESSION LIKE RIGHT NOW. SAME DUMB STUFF THE RICH AND REPUBLICANS HAVE DONE SINCE 1929.
worseto 1 year ago
@leearnold Only for the short term. Face it, such a move will bring diversity to a whole new level, bring about new cultures, minimize market failures to their respective locations, allow an angered and divided population to find themselves in a majority again, and the economies will improve over time. Besides, it's just one proposed idea.
RaptillaMajor 1 year ago
@RaptillaMajor -- How are you going to enforce "such a move" to smaller units? By government regulation?
leearnold 1 year ago
Social Security sucks because it's able to be influenced by inflation. It should be hard assets which back its funding, not fiat currency in a big pool susceptible to deficits. Plus the idea that you're forced to save a portion of your life income for retirements, rather than being able to choose wiser options such as starting up a new small business (creating new private jobs, too), or sending your kids to private schools for a better education (which will increase their wealth through life).
RaptillaMajor 1 year ago
@RaptillaMajor -- Social Security can be, and often is, inflation adjusted, so this is not an issue. On the issue of doing something else with your money, starting up a new small business depends upon having a good idea and access to credit. The question is why don't we do both: keep a safety net, and invest for the future on your own. Because obviously people can do both. The answer is usually that people make choices to consume instead.
leearnold 1 year ago
@leearnold But taxes are too much through the roof to do any of these good investments. A good hefty amount of our income goes through taxation, and while social security might not be a great contributor to that bulk, it sure is something worthwhile to cut to get at least a little more income to do investments. And cutting it would open up minds to cutting other bulk.
RaptillaMajor 1 year ago
@RaptillaMajor -- The main cause for current lack of investment is the lack of demand and the tendency to deflation, because at this moment it is smarter to hold onto money than spend it. This is about to change shortly. For most of the last 100 years, there has been no lack of credit to invest in good ideas.
leearnold 1 year ago
@leearnold Lack of demand sounds like it stems from lack of being able to set up projects and businesses and other investments due to gov't regulations and taxation. I'd be less motivated to start up a business too if markets were highly regulated and taxed. Only corporations get away with this because they can afford to outsource and go to different countries with less regulation and taxes for their products, while small businesses have to go through the tougher, expensive routines.
RaptillaMajor 1 year ago
@RaptillaMajor -- No, at the current time there is a demand recession, yet businesses are sitting on loads of cash. The circular flow of money has two halves: supply and demand. If you already have enough supply sitting idle as "capacity under-utilization", then there is no sense investing for even more. Because demand is the problem. Propping up consumer spending is the quick way out.
leearnold 1 year ago
@leearnold As I said in my other post, this "demand recession" is because small businesses are demotivated to start up new projects, investments, and expansions (new demand) due to gov't regulations and taxation, and also the fear of a falling economy, rather than an improving economy. The only ones willing to do any investment to spur demand are the mega corporations that are outsourcing, and are really only creating demand in foreign countries, improving their economies (China, India, etc.).
RaptillaMajor 1 year ago
@RaptillaMajor -- No, it is a consumer demand recession, not an investment demand recession. We know this because capacity is underutilized: there is existing physical plant which is idle. If there was any consumer demand, businesses wouldn't think twice about all the taxes and regulation they are complaining about. Stop believing the propaganda from the "Chamber of Commerce" in the Wall Street Journal.
leearnold 1 year ago
@leearnold Also, hard assets are a lot less biased in analysis to inflation adjustment on the market than inflation adjustment by the government.
RaptillaMajor 1 year ago
@RaptillaMajor -- Except for the present mortgage disaster, which has taken down retiree wealth by several trillion dollars!
On the contrary, for 75 years there has been no evidence that having a good safety net causes inflation or lack of economic development.
leearnold 1 year ago
@leearnold The present mortgage disaster stems from the Clinton years, where banks were encouraged (by gov't) to take on riskier loans to "promote affordable housing". Practices as these went on through the next decade even with Bush in office it seems. Either way, it seems government adjustment actually leads to more problems with the market than if the market was left alone.
RaptillaMajor 1 year ago
@RaptillaMajor -- Markets left alone? Derivatives spread the risk until it was beyond computation and virtually meaningless. Thank Gram-Leach-Bliley. And financial deregulation in the Clinton years began in the Reagan years, when it started with the savings-and-loan crisis.
Somehow, putting millions of seniors into a gamble in the financial markets when the big shots don't even know what's going on, and the taxpayer bails everybody out every 5 years, sounds like a really bad idea.
leearnold 1 year ago
@leearnold And derivatives are the invention of wall street and their corporate pals. The "deregulation" that shifted power from government to Wall Street was not deregulation at all, simply a transference of power from one big entity to another. Either way, the market loses out. Good deregulation leaves markets alone, and most deregulation does, but bad ones leave power of market to Wall Street. Funny that these Wall Street bastards end up in government too (both parties).
RaptillaMajor 1 year ago
@RaptillaMajor -- No, Wall Street IS the market. And without any regulation at all, you would have extremely concentrated power in Wall Street. Many pure markets lead naturally to monopoly and oligopoly, before government ever gets involved.
leearnold 1 year ago
@leearnold Well I don't see Main Street shooting up their members into government power like in Wall Street. Those Wall Streeters just forward the agenda in gov't from both parties, and that's part of the reason things are so bad. To consider Wall Street part of the market is undermining the idea of a free market. A free market means there's no centralization whatsoever, and wall street is a centralizer of the market.
RaptillaMajor 1 year ago
@RaptillaMajor -- A bunch of Main Streeters just got elected, and they already appear to be as intellectually corrupt as the others.
But the free market does NOT mean there is "no centralization". Never in history. Market has various natural centralizations: monopoly, oligopoly, and what economists call "monopolistic competition". The only protection is government regulation to ameliorate it. So we overlap ALL the centralizations (called "institutions") for checks-and-balances on power.
leearnold 1 year ago
The point is that whenever there's centralization, there's corruption. We can talk ages about how the centralization process begins in the free market too, manipulated by some foreign entity or not.
RaptillaMajor 1 year ago
@RaptillaMajor -- And whenever there are "negative externalities" and/or "asymmetric information" in market transactions, there is corruption also. And these occur everywhere. (Two of the regular kinds of "market failures" studied in economics. No centralization involved in either one.)
The point is, you can't avoid corruption any sooner than you can do without TRANSACTIONS (of all types) and INSTITUTIONS (of all types). So we just design it so we can catch the crooks.
leearnold 1 year ago
@leearnold But centralized corruption is the most widespread and negative of all, and any common corruption in the regular market will be quarantined around its immediate area, and most likely dissipate over time. The bigger the institutions and transactions, the more widespread the corruption will be, including government, which is key because government is supposedly able to stop or dissolve corruption. A limited government with smaller markets is the best solution, as with early US.
RaptillaMajor 1 year ago
@RaptillaMajor -- You won't get smaller markets. They will be as big as they are now, more corrupt, and periodically will cause a complete collapse of the system of bank accounts and credit.
leearnold 1 year ago
@leearnold Ah, but here's the fun part. Since society is too big to do anything about that, one proposed idea is to divide the current society into smaller units, and strive away from globalization, and let new sovereign nations spur from old empires, letting each different nation handle economics and policies their own way. That would make me happy, and would let others experience new facets to practice their own ideologies. Secession in US states was on the table not too long ago.
RaptillaMajor 1 year ago
@RaptillaMajor -- If you divide into smaller units, you lose the "increasing returns to scale" in various private enterprises. See Adam Smith, chapter 1. That will lead to a lower standard of living, overall.
leearnold 1 year ago
@leearnold
As an aspiring tax specialist cpa I can attest that if you have a ton of money and a smart accountant you can end up in a lower marginal bracket than most poor people thanks to clever planning.
This was especially true when bush lowered the capital gains tax. =)
Rockynurse 1 year ago
@leearnold I hope you don't mean the Tea Party Movement, that movement was hijacked by corporate interest (the founders dislike that party now), and it's been too early for any real change to happen. Just look at the cabinet of Obama, Bush, Clinton, Reagan, etc. You'll see every cabinet has members of prominent Wall Street organizations and such, and even though it may not be a crime, you can see how the agenda of the administrations mimic the interests.
RaptillaMajor 1 year ago
@RaptillaMajor -- Everybody knows that Wall Street-Washington is a single axis of power.
The problem with the Tea Party is that they are easily misled by Chamber of Commerce propaganda. The Tea Party is going to be talked into privatizing Social Security and repealing healthcare reform. Because it's better to be denied care by insurance companies, I guess.
Now it looks like Rand Paul has taken back his pledge to end earmarks. I didn't think the Tea Party would fail so soon!
leearnold 1 year ago
There are many problems with social security.
1. Redistribution of wealth never works, and it's stealing.
2. You can invest your money almost anywhere and end up with more money then you started with.
3. Social security costs administrative costs, and doesn't produce anything for the economy.
4. Have you even considered that you could pay into an insurance company, like any other, that would pay you if anything DID go wrong? Gov doesn't stop you from doing this.
Houshalter 1 year ago
@Houshalter -- 1. It's not stealing. Everybody pays in.
2. This ignores market risk, and the vagaries of life. 1/3 to 3/4 of retirees would break even or lose, compared to the return on Social Security.
3. Social Security's administrative overhead is LESS THAN 1% -- it is possibly the most efficient program, public or private. A means-testing bureaucracy would cost much, much more.
4. Go right ahead -- no one is stopping you from making investments.
leearnold 1 year ago
@leearnold,
1. Ya, everyone is forced to pay in, and if they don't they get shoved in a little cell where politicians use them in ads saying "I put criminals behind bars!" It's stealing.
2. In a bank?! The Feds already insure and heavily regulate banks, at least enough to stop runs and failures.
3. Percentages are meaningless when you are talking about such massive quantities of money. Still, 1% less or 1% more, which would you choose?
4. Yes, they are, through taxes and promises.
Houshalter 1 year ago
@Houshalter -- 1. Everybody gets the pay-out, too. You might move to a country without a safety net, like Somalia. No stealing, there.
2. Returns on savings accounts look to be about equal to average SS return. "The Feds already insure" means "we the taxpayers bail you out."
3. The next best scenario would cost FAR more. I'll choose the 1% overhead.
4. If you mean you're not making enough money, join the club. But taxes as % of GDP appears to be unrelated to stagnating incomes.
leearnold 1 year ago
@leearnold, you are making several assertions here that you can't prove, and I don't think are correct.
1. The government should use any and all force to get people to be responsible with their money.
2. That the Fedral government has the power to establish such a system, as opposed to the states.
3. That a government agency is the most efficient way to handle the money and situation (as opposed to a bank or virtually anything else.)
Houshalter 1 year ago
@Houshalter -- 1. No matter how responsible people are, about 1/2 of retirees end up below the poverty line. This is probably true under any social or economic system. You don't know how you'll end up, either. It's just the safety net.
2. Social Security has survived since 1935. Take it to court.
3. It's a continuous generational transfer at the Treasury bond rate, with no profit-making. There is no way a private entity could or would do it.
leearnold 1 year ago
@Houshalter Ah, yes. Redistribution, that is mal-distribution, works quite nicely thanks to policies that result in "flow up" instead of "trickle down" Google "Data on Income & Tax Distributions" to see them.
scubafox 1 year ago
Fails to make clear several points:
a. payroll tax "efficiency" is far outstripped by increases in payroll tax to carry the load.
b. does not mention that half of payroll tax is paid by the employer.
me3tv 1 year ago
@me3tv -- (a) No, there is no evidence of this. I would bet the opposite is true: If you were to monetize ALL the personal and social transactions costs in providing a safety net while avoiding moral hazard, I would bet that Social Security is a VERY efficient system. (b) It does not matter to the argument. In economics, the employer's half of payroll tax is considered to be part of labor compensation.
leearnold 1 year ago
c. fails to note the significant increase in government revenues that follow all major tax cuts because of greater employment and greater sales turnover.
d.Says a "bond is a promise and we should keep promises" - so how does this jive with Obama stealing the bonds from GM and Chrysler and giving the companies to the unions? Democrats do the same dances with figures.
me3tv 1 year ago
@me3tv -- (c) No, that revenue increase has NEVER been sustained, beyond a short stimulus. Both Reagan's and Bush's tax cuts failed to pay for themselves, i.e. FAILED to close the revenue gap which they opened. (d) Obama had to bail-out Wall Street to prevent our whole bank account and credit system from collapsing, and you are complaining that the taxpayers didn't pay even more, to cover the debt deals that hedge funds wanted from the automakers? Are you a hedge fund manager?
leearnold 1 year ago
e. fails to note the lower income strata is dynamic and by retirement MOST of that strata have moved upward one or two strata higher.
f. fails to note those remaining in lower strata at retirement are beneficiaries of many more government assist programs besides SS and these are NOT available to the higher strata
me3tv 1 year ago
@me3tv -- (e) No, income mobility is a good thing but Social Security deals with retirement outcomes. About one-half of retirees would be under the poverty line without it -- in GOOD times. They are probably in worse shape now, although I haven't seen any statistics about this current recession. (f) Didn't we just BAIL-OUT Wall Street? Do you guys have to get food stamps, too?
leearnold 1 year ago
But in the end, it matters not who one votes into office or out-the whole system is rigged and we will always be the losers.
simichbrau 1 year ago
@simichbrau -- No, Social Security is going to pay you back at the rate on Treasury bonds, as always -- an average 3% return.
leearnold 1 year ago
I agree that the productivity is the key. Thank you for the effort to clear the SS broken myth.
matt38y 1 year ago
Moreover, you look at taxes from a purely governmental stnadpoint. Your solution to a broken-ass budget is to raise the income (i.e. taxes) as opposed to omitting the broken communist polices that are causing budget deficits in the first place. Medicare, Medicaid, Social Security, Welfare, I could go on are all broken. You don't seem to get the concept that social security does not protect your finances. A couple hundred a month is poverty, and that is what SS is.
patsfanczar 1 year ago
@patsfanczar -- No, the solution to a budget deficit is to FIX the causes that make it necessary, or else to PROVIDE for it. The safety net does not protect your finances any better than anything else can. It is just the safety net. We just bailed out the entire financial system. But the main spending problem is the growth in medical costs as reflected in Medicare.
leearnold 1 year ago
@leearnold Moreover, how does it help for the government to steal a portion of your income, give it to some retiree, only for you to get paid less back around 45 years after it started? Tell me how it helps to shrink my money and take away from what I could invest? Increasing what I pay now won't fix it, SS doesn't grow, it shrinks. You are trying to use some complex economics when it is really as simple as I have explained.
patsfanczar 1 year ago
@patsfanczar -- It is a safety net in a growing economy. You are not going to get paid back less. If and when Social Security needs to be fixed but we FAILED to fix it (which is unlikely), then you will STILL get more than retirees do today: an estimated 120% of today's benefit. So it's not in much trouble. People should also invest for their own future, BUT a large number will get back less money than the return on Social Security, due to market risk and the vagaries of life.
leearnold 1 year ago
@patsfanczar -- I deleted your other comment because it contained foul language.
leearnold 1 year ago
@leearnold Tell me how social security will grow (as in a real investment). It doesn't. The only possible thing to happen to the money an individual payed in to social security originally is for less to come back out (as the percentage of retirees grows, your piece of the pie shrinks, simple economics). Social security is NOT a safety net. You can NOT retire on the little you would get back from social security. It is a worthless communist policy, and clearly you don't understand real economics.
patsfanczar 1 year ago
@patsfanczar -- People do NOT think it is enough to retire on. It is ONLY the safety-net. It is NOT an investment: NOT a capital improvement leading to productivity. Standard of living improves by productivity from innovation. Wages (usually) increase with productivity, buying more things than before. Soc. Sec. is a steady tax rate on wages. Therefore it provides more benefit at the exact rate of productivity in the general economy. Current projection: Any benefit shortfall will be easy to fix.
leearnold 1 year ago
@leearnold Two words: um, no. You can't retire at all on it (unless you plan on being some hobo), so it is in no way a safety net. It is all about feeling. Social security has saved no one. Social security doesn't increase with productivity because wages don't increase in productivity. You spend to much time in your economics room and to little time thinking real world. Nobody just increases or decreases wages based upon how their company is doing.
patsfanczar 1 year ago
@patsfanczar -- No, there are many retirees at the present who have little other income.
In the real world, real wage rates closely track the productivity rate, historically. The basic reason is competition in labor markets. For a complete short discussion of how this works out, google: "Greg Mankiw's Blog: How are wages and productivity related?"
leearnold 1 year ago
@leearnold Furthermore, social security is a waste of money because it CAN'T grow, therefore taking away from what a person can invest and have actually grow. Safety net: lie. If I want a dang safety net, I will stuff it in my mattress, it is safer there than in government hands (as you seem to agree with your moving-the-money theory). Flat out, why not privatize social security? When was the last time the government made any innovations?
patsfanczar 1 year ago
@patsfanczar -- Gov't R&D results? The internet, among other things.
Social Security is a guaranteed return at the same average rate as U.S. Treasuries, around 3%.
If we had privatized Social Security, we would have had to bail out all the retirees in the recent financial crisis. They would be holding Treasuries right now, so we would STILL be paying them out of taxes.
Privatization also has a lump-sum cost LARGER than any likely shortfall. See the video.
Please worry about something else.
leearnold 1 year ago
@leearnold IF it wasn't for government in the first place we wouldn't have such a bad economy right now. "If we had privatized Social Security, we would have had to bail out all the retirees in the recent financial crisis." or "Therefore it provides more benefit at the exact rate of productivity in the general economy."
So which one is it? I don't think you understand yourself what you are saying.
patsfanczar 1 year ago
@patsfanczar -- Government is not the cause of recessions. It didn't cause the Great Depression either.
The financial bailout was to prevent a one-time crash in value of everyone's private assets. That is completely different from the question of how to maintain a long-term safety net based on earnings.
Besides bad language, I delete comments which have false or misleading information, or when commentators persist in not studying the subject. Your comment will be deleted shortly.
leearnold 1 year ago
@leearnold You are one pro flip-flopper. Weren't you just attacking the banks about a bailout? Social security is hardly a safety net. It does not grow. It takes away from what one could really invest in their retirement to get a real return. You can't force a fake "safety net" on a person.
patsfanczar 1 year ago
@patsfanczar -- There is a very big difference between (1) bailing-out an entire credit system so the whole economy doesn't crash, and (2) further rewarding the rich people who are still whining for even more loot on top of that.
When you are old and gray and full with sleep, and all your clever investment schemes to make batches of dough have bit the dust instead, we will be forcing Social Security benefits on you, too -- and you will, like a hundred million others, be thankful for it.
leearnold 1 year ago
@leearnold For one, it isn't the government's responsibility to make sure banks that were engaging in bad business don't go out of business. For two, you yourself said that one CANNOT RETIRE on social security alone, so what good does it do? Social security is nothing but robbery from an investment that could be better made in a private market, not government taxation.
patsfanczar 1 year ago
@patsfanczar -- Some banks did go out of business. But the whole financial system started going out of business and the whole monetary system was going to collapse. Because it is ALL held as bank deposits and credit. Bank accounts, mortgages, paychecks would stop dead. Everybody in the country would be in bankruptcy court for a year or two, trying to reclaim their assets.
The solution to this is (1) save the financial system, then (2) regulate it better, and put an end to "too big to fail".
leearnold 1 year ago
@patsfanczar -- -- No, I wrote that no one "thinks" that Social Security is enough to retire on. Many people DO retire on it, however. There are lots of retirees eating catfood. You don't hear about them, because they don't whine and complain like people who don't understand how the world works.
leearnold 1 year ago
@leearnold As far as the comment filtering goes, all I have to say is "typical." You support a communist policy, you filter like a communist government.
patsfanczar 1 year ago
@patsfanczar -- Yes, it is a part of my Evil Plot to Control the World and make you all become my slaves! "Mwah, ha ha!" [laughs fiendishly]
Unfortunately, now I must make you understand that:
a one-time, SHORT-TERM bailout to fix a FINANCIAL PANIC
is completely different from
a continuous, LONG-TERM TRANSFER to fix the NORMAL retirement DISTRIBUTION OF INCOME in modern society.
So now, please go study any basic CAPITALIST economics textbook -- every word in CAPS has a chapter behind it.
leearnold 1 year ago
@patsfanczar You don't understand the concept of insurance.
hoodoo961 1 year ago
Your "without SS 50% of retirees would be below the poverty line" is made up unproven false propaganda. SS doesn't grow, so it is wasted money. Your economics is also twisted. People aren't producing a larger relative income. The way you sell it, people are producing nacho chips which go into the ss "surplus" somehow. You made it WAY to complex. Simply put, % of retirees grows, so you are getting LESS out than you even put in.
patsfanczar 1 year ago
@patsfanczar _ Google "Policy Basics: Top Ten Facts on Social Security's 70th Anniversary" -- In better times Social Security keeps half of retirees above the poverty line; it is worse than that at the moment. The standard of living grows under capitalism, so you can buy more things than before. % of retirees is built into the projections already. Please learn economics before going further.
leearnold 1 year ago
leearnold i don't know where you have been getting your information from, but the government has been taking money from the social security trust fund since Reagan . Or i should say since the early 80's. they have been taking money out by the trillions, and they have never paid it back. leearnold it's not normal practice, it's called stealing. really!!!
FreeByrd5362 1 year ago
@FreeByrd5362 -- It's not due to be paid back until NOW. The budget surpluses projected by Clinton disappeared into the Bush Income Tax Cuts which favored the people above the payroll tax cap. We didn't get any extra economic growth from those income tax cuts though that was claimed by the taxcutters. The Trust Fund can be repaid out of letting those income tax cuts expire. It's not going to be "stealing" unless you let them get away with it.
leearnold 1 year ago 2
If it wasn't for the government pretending social security was just another checking account for them. then there would be no problem with social security now would there?
i thought the government was there to serve and protect our constitutional rights, not lie and steal from us. you know there is too much fluoride being put in our drinking water when the government doesn't know what the truth is, let alone speak it.
FreeByrd5362 1 year ago
Just because you didn't know about it, doesn't mean that anyone was hiding anything from you. The idea of making a paid-forward credit account, and then using this "Trust Fund" money for current government spending, then paying it back, out of future economic growth, is completely normal -- there is no stealing. At least, not yet.
leearnold 1 year ago
It is unfortunate that a video designed to appear as an educational item really ends up as a crude propaganda piece. Number one, if an investor "gambled" on stocks in 1926, $1 would have grown to over 2,500 by the end of 2009 in large US stocks and over 39,000 in small value US stocks. However, the same $1 in government bonds, would only be worth $85 today. Number two, we are successful as a country precisely because we haven't punished achievement as much as the rest of the world.
debbielwinkler 1 year ago
@debbielwinkler -- (1) The video headline says "Politics" and in the video it is labeled "a polemic". Let us NOT allow ANYONE to hide behind a pose of pure economics. (2) The return on stocks is greater than bonds, but you must remember about RISK -- see discussions in the comments below. (3) Social Security doesn't punish achievement. But the Bush income tax cuts DRAINED the extra payroll taxes right out of the Trust Fund -- and didn't give us any extra economic growth!
leearnold 1 year ago
@leearnold My comment wasn't about Social Security punishing achievement. It was just a general observation about how the left tends to look at tax increases on the "rich". The "rich" are the job creators and elect to leave a country or avoid taxes if they are excessively targeted. That hurts everyone. As for investment risk, I am far more concerned about inflation risk than market risk. By owning stocks I own the entity who must raise prices due to currency devaluation (inflation).
debbielwinkler 1 year ago
@debbielwinkler -- Who cares what the Left thinks? If you increase payroll taxes then you only cut income taxes, you're not playing fair.
Anyone can start a business and the rich don't create all the jobs, or else they should have done a lot better after the Bush Tax Cuts.
Social Security doesn't cause inflation and beneficiaries keep pace with a cost of living adjustment. Inflation causes problems in Medicare and income tax, but they could be fixed as well as anything else.
leearnold 1 year ago
@debbielwinkler Sorry, debbie, but the "rich" don't create jobs, small businesses create the majority of the jobs in this country. The "rich" can MOVE their jobs overseas while small businesses remain here, in the good ole USA.
MoDans 1 year ago
@btdenn -- It should be pointed-out that the economy looks bad, but that won't last. Recessions are short-term things, and the real solid trend line is that per capita GDP has gone up about 2% per year since the late 1800's. Once the economy starts using computers in an integrated way (we are not there yet), productivity is expected to rocket. And the medical sector should be welcomed as a growth industry, providing new jobs and incomes, and hopefully finally bringing down per-unit costs.
leearnold 1 year ago
@btdenn -- I can't find your other comment, but the reason Social Security stabilizes as a percentage of GDP is that the rate of entry of new retirees maxes-out with the Baby Boom, and after that, everybody's cost of living increases are geared to the GDP. For example, there was no increase last year.
leearnold 1 year ago
If Social Security is in the red the Federal Govt has to pay money from the general fund to pay back the trust fund. Regardless of the size of the trust fund it's still going to come out of current tax payers and runs out. This means is the rate of the return on Social Security trust fund and how it was invested was not enough to accommodate the retirees at current benefit levels. Keep in mind the Federal govt has also increased the payroll tax multiple times. That's fail X 2
btdenn 1 year ago
@btdenn -- Also keep in mind: (1) Social Security will stabilize as a % of GDP. (2) The date of Trust Fund exhaustion is now about 30 years away. (3) 78% of benefits continue afterward. (4) Fixing that shortfall is a MINOR problem. (5) Annual projections change these numbers, usually for the better.
MEANWHILE, medical costs are set to explode and destroy us!
Fix Social Security first? Then the politicians will borrow the money again, and avoid dealing with the real problems again. Wrong order.
leearnold 1 year ago
@leearnold 1) the GDP hasn't stabilized. We have no idea what GDP growth will be going into the future. Most countries with the level of entitlements the US has undertaken have a much lower GDP growth rate. 2&3) The date Social Security was predicted to be negative has happened earlier than expected. The govt is trying to fix this inflation mess through inflation. If they succeed what do you think will happen to the value of the trust fund relative to the cost of living?
btdenn 1 year ago
@btdenn -- (1) I didn't write that the GDP stabilizes. Social Security stabilizes as a percentage of GDP - going from 4.6% of GDP now to about 6% in 20 years, then leveling off. By contrast, Defense spending jumped more than that, for the Iraq War. (2) In 1997, the SS was supposed to be gone by 2031, now it's 2037 -- it would be further, but for two very bad recessions. The dates change, due to GDP growth, recession, productivity, etc. (The Fed Reserve will definitely not let inflation happen.)
leearnold 1 year ago
@leearnold 4&5) They expect to raise taxes or remove the cap. Currently the cap increases annually. Implying a program is successful when taxes and cap are continuously raised to maintain it's viability is not reasonable. It screams the rate of return of the Social Security trust fund is inadequate to meet with the needs of retiring seniors. It completely relies on the ability of current taxpayers to fund it whether they are paying back the trust fund or paying benefits.
btdenn 1 year ago
@btdenn -- The Social Security fix, if and when it comes, needs no more than a mix of small tweaks. The cap doesn't need to be removed -- just raise it a little, to the original intent of covering 90% of all income. Payroll tax for SS would need a tiny increase. Once again, it is Medicare that is going to be the killer, unless we do even more than Obamacare does to try to control medical cost increases overall.
leearnold 1 year ago
@leearnold If GDP falls below historical averages funding ALL of our entitlements is going to drive the US economy into the ground. If we continue to borrow at a rate greater than GDP growth in perpertuity, and there is no indication that will not be true based on demographics and globaliszation, it's game over.
btdenn 1 year ago
@btdenn -- If GDP falls below historical averages, then we are going to have a lot more trouble than just the entitlements! But it's a good thing you included ALL entitlements, because we could "fix" Social Security tomorrow, and Medicare will still destroy us. It's the 800-pound gorilla that really rules the discussion. Fix Medicare, and all other problems are solved. Don't fix Medicare, and it won't matter if you END Social Security, it's still game over. Let's focus on the real problem.
leearnold 1 year ago
You know, Bush should have just given tax cuts to the payroll tax instead of the income tax.
Denon3333 1 year ago
@Denon3333 -- That would have (A) undermined Social Security financing, (B) given only a short-term economic stimulus, and (C) inflated the mortgage bubble further.
On the other hand, by insisting on income tax cuts, the ruling class showed that they: (1) don't understand economics, (2) really don't care about deficits (they own most of the bonds); (3) are not serious about the long-term needs of the country; and (4) are willing to engage in naked class war.
So, all in all, we learned a lot!
leearnold 1 year ago 2
@leearnold Shouldn't we just cut funding for everything and lossen up the laws for starting businesses?
Denon3333 1 year ago
@Denon3333 -- Depends on short-term or long-term. Short-term we have a demand-driven recession, so that wouldn't work. In the long-term, the main Federal spending problem is reducing medical per-unit cost growth (which increases Medicare spending). Business start-ups have more problems with local laws than Federal ones, I think. But this is getting off topic.
leearnold 1 year ago 2
@leearnold Well, it is not going out of point. You wanna save Social Security with real ways, correct? The simple thing is to destroy it and replace it with a banking system. In fact, we can just replace the system with the help of banks. In fact, banks can just give the retirement systems themselves. And yeah, that's why I said to lossen laws for starting businesses as it ensures services can be easily set up by businesses.
Denon3333 1 year ago
@Denon3333 -- We already have a banking system, and we just had to bail those crooks out at a rate that is much greater than the supposed coming shortfall in Social Security. So much for loosening regulations!
In fact Social Security isn't in nearly as much trouble as the financial system and the fixes, if necessary, will be minor. Please find something else to worry about.
leearnold 1 year ago
great video people always complain about taxes and social security without knowing how it works, maybe if we didn't spend so many taxpayer dollars on useless wars then people wouldn't be complaining about social security. People need to learn to be patriotic about something other than war.
raidergunz 1 year ago
"Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program's actuary." - The Washington Times Thursday August 5, 2010
TheVegasPatriot 1 year ago
@TheVegasPatriot -- No, not in the red: Workers paid extra payroll taxes into a Trust Fund that was vacuumed-out by the Bush Tax Cuts going mostly to the wealthiest. Those Bush Tax Cuts are expiring. Social Security doesn't use up the Trust Fund until 2037, then benefits drop to 78% level, which is around 120% of today. And that won't take much to fix.
Social Security: STILL no crisis!
The Washington Times is a right-wing propaganda machine -- no more of that stuff here.
leearnold 1 year ago
@leearnold I don’t know what your source of information is, but I don’t care if you are Jo Anne B. Barnhart, herself. I don’t believe anyone in the government can tell the truth! The very fact that you are bashing one side in favor of the other tells me you are a full crap. And just so you know, media such as CNN and THE NY TIMES are reporting the same information and they are not “right-wing propaganda machines.”
TheVegasPatriot 1 year ago
@TheVegasPatriot -- Google: "2010 Social Security Trustees Report Summary" and read it YOURSELF. Do NOT believe ANY quickie news reports on this issue!
Read the whole paragraph 6: SS spending starts to exceed revenue regularly in 2014 and then is covered by the "trust fund" to 2037.
These dates usually push further into the future, every year. But this recession has kept the dates same as last year.
If you want something to worry about, then fix Medicare. Now THAT is a problem!
leearnold 1 year ago
Leearnold- You want examples of half-truths/propaganda. (1) "SS is never going to have a big problem." FALSE! It's BIG problem now is that all of its excess, the "SS Trust Fund" has been SPENT! (2) "SS is discreet & dignified" -- according to whom?? Depending on the govt. for money after they've blown all of our taxes is dignified?? (3) Productivity argument is a HALF-TRUTH- Productivity can't overcome the baby-boom wave of retirees starting NOW. Leearnold don't you dare delete my post!
CAridge2008 1 year ago
@CAridge2008 (3) They increased PAYROLL taxes but then cut INCOME taxes, thus the draining the payroll Trust Fund. Productivity has nothing to do with this short-term swindle. (1) If Congress sticks to PAYGO for the whole budget (for example, the Bush Tax Cuts expire as scheduled) then the long-term budget (includes Soc. Sec.) is roughly BALANCED -- new CBO report! Then we can pay down outstanding debt. (2) "Discreet" means SS goes to everybody without means-testing, or a big bureaucracy.
leearnold 1 year ago
@leearnold I don't disagree with all you say. For example, you're right that Bush increased borrowing from the SS excess, because he (and Congress) DIDN'T CUT GOVT. SPENDING when he CUT TAXES. So he did only half the job. If he wasn't going to cut spending then he shouldn't have cut taxes. BUT every President since Kennedy has taken from the SS excess, Democrats & Republicans. LBJ started the practice of lumping the SS$ in with the general fund. Moral: DON'T TRUST GOVT with TOO MUCH MONEY!
CAridge2008 1 year ago
@CAridge2008 Or the moral is, Keep paying attention and remember that it comes due. Don't let politicians scare you that the money is somehow "missing". Clinton + Republican Congress started balancing the long-term budget, which would have made it easier to start repaying the SS Trust Fund. Obama + Democratic Congress also just did the same thing. Let's stick with the guys who are doing it right.
leearnold 1 year ago
This video has some half-truths in it, but they are tinged with extremely manipulative language and propaganda. Actually it's demeaning, the speaker thinks that the viewers are so stupid and able to be manipulated.
Social Security is in DEEP, DEEP trouble for ONE reason: the US taxpayers entrusted the Federal government with keeping and protecting a LOT of money, when the govt. only knows how to spend it. Republicans, Democrats, whatever, they can't be trusted to be wise with OUR MONEY.
CAridge2008 1 year ago
@CAridge2008 You might at least point to an instance of "half-truth" or "propaganda." Meanwhile you say Social Security is "DEEP, DEEP trouble" -- this is false and demeaning. In reality, if it ever needs a fix, it is going to be a little one. I delete comments which contain unsubstantiated assertions, or false or misleading information. Yours will be deleted shortly.
leearnold 1 year ago
Thanks for the link! I'll check it out.
mycrystalmind 1 year ago
yep. And here in 2010 we have the recessions. and how do they fix it? Raise the deficit , pay it to the rich, and it will stimulate the economy?....... sigh...
mycrystalmind 1 year ago
@mycrystalmind It doesn't always have to go to the rich.
Economists haven't agreed on the cause of the business cycle. Experience shows the boom/recession cycle never ends. Basic way to ease recessions is SHORT-term deficit spending and then SHORT-term tax cuts -- if you equalize these in the next boom, by reducing spending and raising taxes.
Don't confuse this with the LONG-term budget, which is shaped by bigger flows. Google: "CBO June 2010 Long-Term Budget Outlook"
leearnold 1 year ago
This video fails to take in to account inflation. Its also fails to take in to account that the Bush tax cuts actually increased the amount of money the government recieves from taxation. It also fails to take in to account that the Bush tax cuts only look like they benefit the rich because the rich pay more taxes and any percentage of a tax cut will always result in more money coming back to the rich. Of course the rich doesen't just let their money sit there.
CWSmith1982 1 year ago
@CWSmith1982 -- Please read the other comments before making incorrect assertions: (1) Inflation is not an issue here. (2) The Bush Tax Cuts did not even pay for themselves. (3) There are different kinds of taxes. (4) In fact the economy underperformed for most people, while others parked the money on Wall Street for a huge financial disaster.
leearnold 1 year ago
Billionaire's estate tax...... seems I'm misinformed about the estate tax primarily affecting the middle class and being a huge boon to the estate planning industry.
rusty2b 1 year ago
@rusty2b It does not "primarily affect the middle class." Due to exemptions only a tiny percentage (currently around 0.3%) of estates are affected by the tax.
leearnold 1 year ago
Looks like your were wrong.
joshfultondotblogspo 1 year ago
How so? Nothing has changed. There is a new spate of Social Security doomsaying in the media propaganda, but nothing has really changed that the end of the recession won't cure.
leearnold 1 year ago
@leearnold
Nothing? Social Security is paying out more than it takes in NOW, not 10 or 20 years from now.
The end of the recession? Keep your fingers crossed. Our government's intervention hasn't worked, just like it didn't work during the Great Depression, just like it didn't work any other time. These TBTF banks still have over $400T of "toxic assets" on their books. Where's that going? It's going to go right on the back of the tax payer, when the TBTF banks have an "emergency."
joshfultondotblogspo 1 year ago
Social Security was projected to start dipping into its "trust fund" by 2011 or 2017 (the date aways moved around due to economic growth or lack of it.) The current recession is big and moved the date to now. When growth returns, the boom will likely be big due to pent-up demand, will increase tax revenue, and will make trust fund payback easy for decades more. The money disappeared into the Bush Tax Cuts. If it needs a fix, it will be a little one. Find something else to worry about.
leearnold 1 year ago
I think we have quite a ways to go in this "recession," so that "pent up demand" may have to wait a while. Meanwhile, things like Social Security, Medicare, and public pensions are weigh us down. I know they provide a social safety net, but Chile has privatized their social security and for 20 or 30 year's it's apparently been a huge success. We need to start thinking long-term otherwise our problems with only build.
joshfultondotblogspo 1 year ago
Privatizing Social Security means we'd be bailing-out all the retirees via Wall Street right now. Instead, SS has been a big stabilizer through this crisis.
Last news I read from Chile was that people didn't like the new system, most want the old gov't system back. That news came BEFORE the world financial crisis.
CBO's long-term budget outlook shows that SS is not a big problem. Medical spending is the problem -- yet some people are against Obamacare's mild cost-reduction measures!
leearnold 1 year ago
@leearnold
If you do a search for "Cato social security," you'll see Jose Pinera saying that we have a $100T unfunded liability for social security.
I don't understand what the cost-cutting measures are in the new health insurance law. That increases our deficit by $600B over 10 years when you factor in the Medicare costs.
These things are broken, Medicare, Social Security. The government should not be intervening in the market. It just messes things up (like in the Great Depression)
joshfultondotblogspo 1 year ago
Pinera's may be one of those scarifying "infinite horizon" calculations. Anyway a meaningless number since, like anything else, it's not all due in one lump.
The cost-cutting measures in ACA law (Obamacare) will likely be discussed soon in the newspapers. There are about 5 or 6 main ones, including making administrative procedures more uniform, and competition in exchanges.
Government just saved us from another Great Depression. Sometimes there are market failures. Like in healthcare
leearnold 1 year ago
@joshfultondotblogspo All privatizing would do is carve out profit for the already wealthy. If we would have adopted this Bush proposal it would have been a complete disaster. Social security would be fine if left alone and it is an essential "entitlement", a paid for entitlement. Chile's system is a failure.
Bozo1360 1 year ago
Well, we voted them out and put the others in charge and guess what, now they are saying that SS is going broke...
rllang01 1 year ago
Social Security won't need a fix for 25 to 30 years, if at all. Right now it is not going broke: the Trust Fund is needed. The Trust Fund money disappeared into the income tax cuts, and it can reappear the same way. This has nothing to do with who was elected.
leearnold 1 year ago
"We have a DEMOCRACY!"
No, actually we don't. We've got a blessed republic. Let's keep it that way.
pkninja47 1 year ago