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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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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What the hell is wrong with the American public??? The federal govt. is scaring people for no reason other than to run a smoke screen with regard to Social Security!
Social Security is a SELF FUNDED PROGRAM which means that it receives NO money from the federal budget-------------- EXCEPT----------- that the govt. has been "borrowing" the surplus (yearly) for the last 10 to 20 years and its now time to repay Social Security and the federal govt. has NO money return the money they borrowed!!!!!
WAKE UP PEOPLE!!!! Get off your dead and lazy asses and participate in your democracy!!!!!!!!!!! This attitude in this country now of----me----me---me and screw everyone else has to S T O P.
You all realize that before 1984(7) ?? that S.S. funds were used to pay for things like the trip to the moon and the Vietnam and Korean wars. And that S.S. is owed like $10 trillion from these monies that were stolen from it.
But nobody is bring suit against the government for having spent the money on non S.S. issues.
it's just bs that S.S. is going to run out of money If some lawyer would go after this lost S.S. money he could make abotu $1 trillion dollars in a 10 percent recovery fee and S.S. would get a boost of $9 trillion dollars
instead we get this BS that working until you die adds years to your life.
next they will be saying since S.S. retires can not buy enough food to live on that is a good thing as studies have shown that stravation diets make people live 20 percent longer.
I quess that there will be a new study saying that getting back to nature e.g. living on the streets out in the open and forging through dumpsters for food and no medical care increases both the quality and longevity of someone's live.
that making over $1,000 a year and living the life of Riley and getting enough food and having a car and a 5,000 square foot home and health care decreases your quality of life in half and reduces your life span by at least 40 years
We have been hearing this same old song and dance for years. How many times have they said we will run out of Social Security money. I am getting tired of it. It is also funny how it always seems to get fixed, at least temporarily.
I also like the comment of increasing payroll taxes... Go figure, what the heck just happened? A 2% increase started Jan 1, 2013.
These "professors" should stop trying to cause worry by publishing this type of article and do something constructive with their education.
I wonder if they will try and collect Social Security or wait until 70 to retire. Probably have a fat pension from the universities that "employ" them.
The Social Security Abuse along with the head buried in the sand mentality are starting to surface.
They estimate that in the year 2031 they will have a 800 billion dollar deficit. That figure is most likely light, in 2031 it most likely will be over a trillion short.
Options include more SS/tax via: raise wage base ceiling limit from $113,000 to unlimited!!!!!! and include bonuses and perks
Of course this all started when the government spent our social security money on other things and wrote IOUs to the American people for the last 20 years. Don't worry though, we can just print more money or make $1 trillion dollar coins and count it against the social security deficit. Of course those politicians are no longer in office and are collecting government pensions we pay for. What do they care now?
Meanwhile the young people continue voting for spending money without any accountability. Wait until they get old, they can use the American money to burn in trash cans to keep warm.
If you have paid into Social Security, you are entitled to payment when you retire. You are not entitled to a raise every year or so for any reason. That is not how pensions or insurance works. Social Security is meant to keep you out of poverty, not pay for every convenience life has to offer.
Here's one of their options from the NY Times article: "A fourth is to reduce benefits — for example, by lowering the initial benefits for workers whose lifetime wages are above the national average (currently $43,000 a year)."
Make more money and get less benefits ? Anyone else confused by this option ?
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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