Proposed massive cuts to Social Security

[Vas Deferens]

(12-10-2016, 02:09 PM)bfine32 Wrote: We are living too long.

Too many of us are being born.

[JustWinBaby]

(12-11-2016, 08:10 PM)Vas Deferens Wrote: Too many of us are being born.

Not sure how the dynamic may change with globalization and AI/robots....but what most economists site for the slowdown in developed economies is NOT ENOUGH people being born.

SS is a ponzi scheme - with people living longer you need to keep growing the working population to support the entitlements.  Once beneficiaries start outpacing growth in jobs you get an unsustainable funding deficit.

It's not technically a ponzi scheme, obviously, but it started with providing a benefit to people who never paid in.  And so despite being told we are funding our own SS, each generation is actually funding the prior generation

[*wildcats forever*]

(12-11-2016, 08:25 PM)JustWinBaby Wrote: Not sure how the dynamic may change with globalization and AI/robots....but what most economists site for the slowdown in developed economies is NOT ENOUGH people being born.

SS is a ponzi scheme - with people living longer you need to keep growing the working population to support the entitlements.  Once beneficiaries start outpacing growth in jobs you get an unsustainable funding deficit.

It's not technically a ponzi scheme, obviously, but it started with providing a benefit to people who never paid in.  And so despite being told we are funding our own SS, each generation is actually funding the prior generation

This statement is not accurate, according to this: https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p1.html as it seems the fund was started in January '37, with the first scheduled monthly payments to begin in 1942. There were one time payments made (the first being 17 cents) beginning Jan. 1937, and thanks to an ammendement in 1939, monthly payments started in 1940. So for three years a reserve fund was established before main distributions began on a monthly basis. The law required a reserve fund to be set up in order for payments to begin, and so no government money was used to fund this.

[JustWinBaby]

(12-11-2016, 09:14 PM)wildcats forever Wrote: This statement is not accurate, according to this: https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p1.html as it seems the fund was started in January '37, with the first scheduled monthly payments to begin in 1942. There were one time payments made (the first being 17 cents) beginning Jan. 1937, and thanks to an ammendement in 1939, monthly payments started in 1940. So for three years a reserve fund was established before main distributions began on a monthly basis. The law required a reserve fund to be set up in order for payments to begin, and so no government money was used to fund this.

Ahhh, makes sense.

But what about the people already at or near retirement?  Did they receive no benefits?  Seems like there's probably a gap there, but maybe inconsequential given the economic and workforce growth those first few generations.  "No govt money used" is not the same as generational wealth transfer, in the sense your SS is paid by the generation of workers that comes after you.

If I retire in 20 years, there will be no "trust" remaining - the workforce will only contribute enough to pay out 3/4 of promised benefits. Those people aren't funding THEIR SS, they'll be funding mine because my money will have already gone to the previous generation.  They tell us we're funding our own, but implicitly the social contract is you're funding dad and then your kid will fund you.

[oncemoreuntothejimbreech]

(12-10-2016, 02:09 PM)bfine32 Wrote: We are living too long.

God doesn't make mistakes. 

[*wildcats forever*]

(12-11-2016, 09:51 PM)JustWinBaby Wrote: Ahhh, makes sense.

But what about the people already at or near retirement?  Did they receive no benefits?  Seems like there's probably a gap there, but maybe inconsequential given the economic and workforce growth those first few generations.  "No govt money used" is not the same as generational wealth transfer, in the sense your SS is paid by the generation of workers that comes after you.

If I retire in 20 years, there will be no "trust" remaining - the workforce will only contribute enough to pay out 3/4 of promised benefits. Those people aren't funding THEIR SS, they'll be funding mine because my money will have already gone to the previous generation.  They tell us we're funding our own, but implicitly the social contract is you're funding dad and then your kid will fund you.

That's what the one-time payments addressed IIRC. The referenced article goes into a lot of detail, with some of the more cumbersome charts to view. In other words - very dry reading. Interesting to note that the first one-time payment made in 1937 was for 17 cents. The first monthly benefit paid in 1940 was for around $22.

The variables in the information addressing your other points frustrate me when trying to fully define the outcome e.g my father's monthly benefit was so low, relative to what I paid in, which created a healthy margin. Projecting what it would take to cover my monthly benefit with a similar margin is calculable but actual future earnings of that workforce is still an unknown until that cycle concludes. Sure, educated guesses are being made with assigned +/- accuracies, but guaranteed numbers will continue to be elusive. 

Since it's inception, there have only been 11 years where the fund spent more than it took in. In the other years, the surplus was legally deemed to be a loan to the government (reserve trust) which is now around 2.8 trillion dollars, an amount yet to be put back into the fund. Research that subject for a fun time.

Frankly, the social security issue is one of the more heartless scams run by Congress IMO. There just isn't such a thing as 'too much money' for these fund raisers.

[Belsnickel]

(12-11-2016, 12:04 PM)fredtoast Wrote: Yet if you were to become disabled tommorrow you would not have any income to live on and would be dependent on the state to take care of you.

Do you just assume that none of us are enrolled in disability insurance?

[JustWinBaby]

(12-11-2016, 10:19 PM)wildcats forever Wrote: Since it's inception, there have only been 11 years where the fund spent more than it took in.

OK, interesting.  I guess I got confused that the intergovt loan isn't counted and that's why it looks like we are funding the previous generation.  Of course, it's all fungible and $20T is still the tab we're inheriting (but that's a different thread).

I think Medicare is an entirely different issue, though.  Medicare expeditures are about 60% of SS expenditures, yet our contributions are only about 20% relative to SS.

[*wildcats forever*]

(12-12-2016, 12:07 AM)JustWinBaby Wrote: OK, interesting.  I guess I got confused that the intergovt loan isn't counted and that's why it looks like we are funding the previous generation.  Of course, it's all fungible and $20T is still the tab we're inheriting (but that's a different thread).

I think Medicare is an entirely different issue, though.  Medicare expeditures are about 60% of SS expenditures, yet our contributions are only about 20% relative to SS.

That the $20T includes the surplus SS dollars is one of more puzzling aspects of how the whole thing was set up. Why in the world was the surplus forced on the general fund initially makes no sense to me....at all. It seems to belie the purpose of having a stand alone SS fund, one that was supposed to be completely independent from government money entirely. While there are many things I'd love to discuss with FDR, this might be the first question I would ask him.

Medicare! If either of us could solve that riddle, we'd each be looking at the next Nobel prize winner. Maybe in the near future, especially if I think I wouldn't have a stroke as a result of the attempt, I will dive into that one. 

[GMDino]

(12-11-2016, 10:19 PM)wildcats forever Wrote: That's what the one-time payments addressed IIRC. The referenced article goes into a lot of detail, with some of the more cumbersome charts to view. In other words - very dry reading. Interesting to note that the first one-time payment made in 1937 was for 17 cents. The first monthly benefit paid in 1940 was for around $22.

The variables in the information addressing your other points frustrate me when trying to fully define the outcome e.g my father's monthly benefit was so low, relative to what I paid in, which created a healthy margin. Projecting what it would take to cover my monthly benefit with a similar margin is calculable but actual future earnings of that workforce is still an unknown until that cycle concludes. Sure, educated guesses are being made with assigned +/- accuracies, but guaranteed numbers will continue to be elusive. 

Since it's inception, there have only been 11 years where the fund spent more than it took in. In the other years, the surplus was legally deemed to be a loan to the government (reserve trust) which is now around 2.8 trillion dollars, an amount yet to be put back into the fund. Research that subject for a fun time.

Frankly, the social security issue is one of the more heartless scams run by Congress IMO. There just isn't such a thing as 'too much money' for these fund raisers.

They borrowed money they don't want to pay back.

[fredtoast]

(12-11-2016, 10:50 PM)Belsnickel Wrote: Do you just assume that none of us are enrolled in disability insurance?

Less than a third of US workers have any long term disability insurance.

[Benton]

The benefit to SS was having some "savings" protected by the government. With pensions disappearing and investing in stocks being risky, SS gave people something to keep them from being completely destitute if their other plans failed.

I have no issue doing away with SS... as long as we provide more regulation to companies and banks to reduce their chances of failing their stockholders. Given that most big businesses and banks have been against reforms made in the last decade to keep from having another financial meltdown... I'm guessing they're not going to support that.

[Yojimbo]

I think with the disappearance of the private sector pensions, we're going to need SS more than ever. Short term fix would be lifting the cap and long term would be what Al Gore infamously referred to as the "lock box" no SS money can be used for anything other than paying SS benefits. The surplus can't be used for other govt projects.

[*Nately120*]

I would assume pulling the plug on SS and outlawing abortion would be some sort of left-wing plot to phase republicans out of the American populace and/or overwhelm them with a tide of democrats.

[JustWinBaby]

(12-12-2016, 08:06 PM)Yojimbo Wrote: Al Gore infamously referred to as the "lock box" no SS money can be used for anything other than paying SS benefits. The surplus can't be used for other govt projects.

I don't think that would help much.  The govt will print money to pay its obligations, whether that includes SS or not, and the resulting inflation would make that "lock box" worth pennies on the dollar.  Or they don't print money and default on other obligations, and the dollar gets crushed.

[Dill]

(12-10-2016, 12:51 AM)Bengalzona Wrote: http://finance.yahoo.com/news/gop-introduces-plan-to-massively-cut-social-security-222200857.html


Thoughts?

I think I turned 65 this year.

[*michaelsean*]

(12-10-2016, 10:44 AM)xxlt Wrote: Yeah, lift the wage cap so EVERYONE pays in at the same rate on EVERY dollar earned. Problem solved. 

Then they just get more when they retire.  

[xxlt]

(12-14-2016, 12:06 PM)michaelsean Wrote: Then they just get more when they retire.  

Not surprisingly, your analysis is incorrect. 

http://www.pbs.org/newshour/making-sense/what-impact-would-eliminating/

[xxlt]

(12-11-2016, 08:10 PM)Vas Deferens Wrote: Too many of us are being born.

Actually, many conservatives have argued just the opposite. If we all just had 15 kids (and they had 15, and so on and so on) and if all of then were wage earners and none of them made their money off of (untaxed) investments then there would be money to pay for the retirees - so they argue. Questions about the finite resources already stretched thin on this planet are, of course, ignored by the "keeponfuckin'" (and carry every baby to term) and the problem is solved crowd.

[xxlt]

(12-11-2016, 09:14 PM)wildcats forever Wrote: This statement is not accurate, according to this: https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p1.html as it seems the fund was started in January '37, with the first scheduled monthly payments to begin in 1942. There were one time payments made (the first being 17 cents) beginning Jan. 1937, and thanks to an ammendement in 1939, monthly payments started in 1940. So for three years a reserve fund was established before main distributions began on a monthly basis. The law required a reserve fund to be set up in order for payments to begin, and so no government money was used to fund this.

Damn your facts and their liberal biases!