6/21/2012 4:02 PM ET|
The great Social Security lie
If you think the retirement of baby boomers is the problem, perhaps you should know about the real root of the problem -- and how it needs to be addressed.
The headline machine was in overdrive earlier this year with the arrival of the latest Trustees' Report on SocialSecurity and Medicare. And while much of the media continues to herald the coming bankruptcy of Social Security, they do so at the risk of ignoring the real story -- a story that is neither difficult to explain nor hard to understand.
Technically speaking, an entity is deemed bankrupt when its obligations exceed its revenues. Therefore, if the projections are accurate, Social Security will, indeed, be deemed bankrupt in 25 years -- absent modifications to resolve the funding problems.
However, that does not mean that the money will be all gone come 2035. Nor do the headlines explain why we have the projected shortfall.
Subsequent to the projected expiration of the period where the trust can pay out 100% of the promised benefits, the fund will then be in a position to pay out 75% of promised benefits for the foreseeable future -- and that is not OK. Clearly, there need to be some changes made to Social Security so as to make up the 25% annual shortfall in benefits we anticipate will begin a quarter of a century from now.
The cause of the shortfall
But if we are to hope to make these adjustments in a sensible and realistic way, it might not be a terrible idea for the American public to actually understand the real causes of the shortfall in anticipated trust revenues.
We are consistently led to believe that it is the "aging workforce" that rests at the heart of Social Security' funding problems. Tune in to any of the media reports covering the numbers just out and this is what you are going to see and hear.
The claim, while legitimately representing a small piece of the problem, fails to explain the lion's share of the crisis we will experience in the Social Security Trust --and by lion's share, I mean a full 60% of the entitlement's funding shortages.
The "aging workforce" narrative serves to encourage and support the critics who claim that our problem is too many retirees lining up to collect their entitlements only to find that the government has failed to properly manage the Social Security Trust -- leaving the next generation of beneficiaries to be shortchanged 25 years down the line. As a result, the privatization pushers argue that Americans would be far better off looking out for their own retirement accounts so that government mismanagement will not come between hard-working citizens and their retirement money.
This is the Great American Social Security Lie.
It is a lie concocted by those seeking to fulfill Wall Street's eternal quest to get its sweaty palms on trillions of dollars of our retirement cash, allowing them to expand their casino operations beyond their wildest imaginations -- and Wall Street has a very healthy imagination.
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I just can't help but wonder how long the vast majority of people who are being screwed by the current trends are going to wake up and put a stop to the nonsense. As someone who is very firmly planted in the top 1% I can afford to watch with amusement as a big chunk of the other 99% fight to help the Republican party convert the U.S. into a third world country with no social safety nets, an inferior education system, a polluted environment and a complete lack of workers rights. The really funny thing is that when the dust settles the only people who are going to come out intact are people like me. So many people are so determined to ensure that some illegal immigrant or welfare recipient somewhere won't get some benefit they are convinced they are receiving that they are perfectly willing to shoot off their own toes and fingers to prevent it. Oh well such is life. They say that only death and taxes are guaranteed, but I disagree. Stupidity is right up there as well.
Social Security is running out of funds and will be empty before my chance to get any,yet I can't opt out or get my share and put it in a savings account to take care of myself.
Each payday funds are taken out of my check.
Atleast in a Poni scheem you can opt out but thanks to Congress I have to pay in and all the while knowing there will be nothing left for me!
But thanks for spending three years liying to me and trying to force the over priced and worthless Obamacare bill down my throat!
Fixing the SSI mess is just to much trouble so lets just creat a new mess that we can't fund or make work!!!
Lift the cap? Oh wait, that would be a tax on the rich.
Tax the illegal that gets benefits without paying into the system? Oh wait, that would lose the fast rising minority vote.
Cut benefits in a bipartisan vote? That will mean voters can't blame one party.......that's the ticket!!!!
On another note:
Congress has yet to repay the money they 'borrowed' from the trust fund to balance the budget. The only way to do that is to raise taxes.
Nice mis-direct MSNBC
You've served your liberal masters well this day.
One additional and costly effect on the social security program is the Social Security Totalization Agreements that our government has entered in with other countries. The totalization agreement with Mexico is one-sided. Its beneficial effects to U.S. workers would be miniscule compared to those received by potentially millions of Mexicans. The totalization agreement with Mexico would:
· Provide only modest tax savings for American workers and their employers compared to other totalization agreements.
· Entice Mexicans to remain in the United States for the 10 years it takes to vest for U.S. Social Security (versus 24 in Mexico) in order to maximize their retirement income. The United States pays out far more to low-wage workers than they contribute to the system. In contrast, Mexico only pays out what was contributed, plus accrued interest.
· Permit Mexicans to return home and have their spouses and dependents receive U.S. Social Security benefits they would not have been entitled to without a totalization agreement.
· Permit partial Social Security benefits to be paid to those who worked in the United States as little as 18 months (six quarters).
· Eventually compel the United States to pay out billions in retirement benefits to Mexicans for credits they acquired while using fraudulent Social Security numbers prior to obtaining legal status.
· Lure even more Mexicans into the United States illegally in the hopes they would obtain amnesty, thereby making themselves and their families eligible to receive U.S. Social Security benefits once the worker returned to Mexico and reached retirement age.
people are living longer and there for sucking out of social security longer hence no money... its not real financial wizardry here.... even though the dip that wrote this article thinks they are,,, it is really tooo many fingers in the cookie jar.
tax increases will not "fix " this either.... taxes for social security go up every year.... but we still have a funding problem.... too much money is paid out.... plain and simple....
the age at which social security can be collected should have risen a generation ago...
A portion of the population is truly responsible enough to handle privatization, either 100% or some other percentage. Its that roughly 25 - 30% of idiots that will always be dependent that they are afraid of creating a system of non dependency for.
They would go to violence and more.
The feds don't like people to know how they social engineer for this segment of the population. SS is one tool.
My suggestion would be to convert anyone under the age of fifty to a TSP, switching the accrued monies into the plan and applying the historical interest as if the money had been invested in the G (bond) fund the entire time. If over fifty and not yet 65, give each the option: switch or stay. Those currently getting checks would continue until they died. By doing this we ensure a) the money will be there b) only those who pay in get paid out and c) we don't have to be bankrupt in 25 years.
Sadly, I don't believe that the idiots in Congress (and I'm talking about both D's and R's here) are capable of dressing themselves without assistance, and I know they won't make something like this happen ever. Not to mention that I don't trust our current administration to run a lemonade stand, much less a multi-trillion dollar operation
Simple fact, if Congress cuts even a penny of my Social Security benefit I'll load the guns and cut down every Republican I can find!
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