Did the government make a Social Security goof?
Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.
The fiscal cliff has been averted for the moment, and Congress is continuing its latest game of financial chicken with a new target in sight: the upcoming debt ceiling. But two academics say all this political brawling is taking attention away from another crisis looming on the nation's horizon: Social Security.
Samir Soneji is a demographer and professor at the Dartmouth Institute for Health Policy and Clinical Practice, and Gary King is a professor of government at Harvard. On Sunday, the two boiled down their recent findings in an opinion piece for the New York Times.
According to King and Soneji, the Social Security Administration has grossly underestimated the money it needs for retiring Americans "to the tune of $800 billion by 2031, more than the current annual defense budget."
And if nothing is done, they say, the Social Security trust fund will run out two years ahead of current government predictions.
The professors say two major issues have led to these serious miscalculations.
The government’s forecasting methods for Social Security have barely changed since the program’s creation during the Great Depression -- "even as a revolution in big data and statistics has transformed everything from baseball to retailing."
And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living longer and healthier lives. Better treatment of cardiovascular diseases and a dramatic decline in smoking, they say, "are adding years of life that the government hasn’t accounted for."
The professors believe the nation faces some stark choices if Social Security is to be saved. Among the options they suggest are raising the retirement age to as high as 69 or 70, increasing payroll taxes, limiting annual cost-of-living adjustments and reducing benefits.
They also point to new research that suggests that retirement, while popular, may in itself reduce a person’s life span "by breaking lifelong routines and disrupting deep social connections." And with that research in mind, they wonder if retirement should be optional.
Given modern demographics and statistical analysis, professors Soneji and King think now is a great time to open a public debate about Social Security’s future. The constant political bickering in Congress may make this suggestion seem odd, they say -- but "the longer we ignore the problem," they warn, "the more disruptive any change will need to be to keep Social Security alive."
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Just exactly who in any part of Government can be trusted? Isn't that way too much money only to be constantly being lied to and cheated?
Something really smells in the good ol' USA....
This article is complete BS. I guess they think we’re stupid. The truth is: The Federal Government has used our Social Security Funds for things other than Social Security. The Baby-Boomer generation of Americans has paid into the SocSec Trust Fund for 30-40 years and our employers have matched it too. Until 2012 this amounted to the tune of 12.4 percent of every paycheck. If these collections were saved and compounded at 5-6 percent, there would more than enough funds available.
Our money was, and continues to be, stolen from the Social Security Trust Fund. It’s the thievery and spending stupid!
I can't help wondering what it looks like inside Obama's head. I can picture cobwebs, strange, eerie sounds and a lot of dark, empty space. You can holler in his ear and get an echo!
Obama's #1 comrade-ess, Nasty [bug-eye] Pelosi sez [and she is smiling] "We need MORE REVENUE!" Duh!! Hey Bugsy! Run that by me again! We don't have much left, after Obama's "Tax Cuts" for 97% of us. His math stinks. Wonder what his education level REALLY is? Nobody knows. Perhaps 4th, maybe 5th grade? Nah! They can do math. Well, at least some of them can. The ones in private schools, or those home-schooled.
These next 4 years are going to be REAL interesting!
This is the new American dream! No one comes out of this unscathed. All the public employees who thought they would work an excessive amount of overtime in their final work years to inflate their pensions will really feel the pain. The politicians who promised them their dreams of gold are no longer around or won't be and the ridiculously high pensions they were promised cannot be sustained.
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[BRIEFING.COM] The stock market welcomed the new trading week with a mixed session that saw relative strength among large-cap stocks, while high-beta names underperformed. The Dow Jones Industrial Average (+0.3%) and S&P 500 (-0.1%) finished near their flat lines, while the Nasdaq Composite and Russell 2000 both lost 1.1%.
Equities began the day on a cautious note amid continued concerns regarding the strength of the global economy. Over the weekend, China reported its first decline ... More
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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