Did You Vote For Obama or GOP Congressman? If So, Your 7% Social Security Benefit Cut is Coming Up

[HistorianDude]

Originally Posted by roysoldboy

Are you telling me that I will have to take a cut in my Social Securithy when just last week I got the same thing that all the rest of the old people got that shows a 1.7% increase as a COLA?

No. You won't. You get to keep the whole 1.7%.

[Mircea]

Originally Posted by padcrasher

Wow. So misinformed. SS deficit is not a major factor in the overall deficit.

Misinformed?

The OASDI (Combined Social Security and Disability) Trust Funds are not part of any, um, "deficit" but they are part of the National Debt.

Since the OASDI Trust Fund (and in fact all Trust Funds including HI, SMI et al) are already included in the National Debt, converting the Trust Funds to cash does not cause any additional harm, so far as the National Debt is concerned.

The only real issue who is who buy the treasury notes over the course of the next 12 years.

Originally Posted by padcrasher

It's a long term, manageable, deficit.

No, it is not.

You are presently $20.5 TRILLION in the hole over the next 75 years, and that will increase to about $24 TRILLION in 2013, and $28 TRILLION in 2014 and so on and so on.

You never had the money to pay for it, you don't have the money now, and you never will.

You need to accept the reality that it is a failed program, end it and transfer Generation Y-Work to a private insurance plan.

Originally Posted by padcrasher

It's a well run program with only a 1% overhead.

Immaterial and Irrelevant. Whether the program is "well-run" or not has no bearing on the fact that it is insolvent.

Originally Posted by padcrasher

Before this program, elderly begged on the streets for handouts.

That's a lie.

In 1929, there were already six States that had retirement pension plans for all State residents.

As was the norm throughout the world, the elderly lived with their children, or other family members, and in the few cases where that was not true, they had "old folks" homes.

Originally Posted by padcrasher

It's human nature that many of us will not save responsibly for retirement, and this program just provides a basic income to keep them off the streets.

It is not human nature, and has more to do with circumstances.

Originally Posted by padcrasher

I seriously wished there was a place we could send you radical economic libertarians to live without government. Lord of The Flies. You'd be begging to be let back in.

Is that what you think?

Let's see....

Minimum wage worker presently pays $96/month in Social Security FICA payroll taxes for the express privilege of:

1] getting $763/month in Social Security benefits -- if and only if the minimum wage worker retires at full-retirement age -- which is age 67 for those born 1960 and later; and

2] having the government and ignorant Liberals lord over him and threaten him with fear discussing potential cuts to benefits.

The ultra-conservative alternative....

Minimum wage worker pays $21/month to a private insurance company via payroll deduction for $500,000 worth of insurance and gets:

1] $1,600/month in benefits; and

2] can draw all $1,600/month at age 62, instead of waiting until age 67; and

3] upon death the balance is transferred to beneficiary named in the will or codicils.

4] government is not involved

5] doesn't have to put up with stupid Liberals.


Any takers?

You don't have to pay $21/month. You can pay less and get less. You can pay more and get more. It's up to you.

Originally Posted by padcrasher

US retirement benefits are on the low side of other western industrialized nations.

Immaterial and irrelevant.

I know Liberals just don't get it, but this isn't one of those "Keeping Up With The Jones'" things.

Originally Posted by padcrasher

I don't give a rat's ass if chained CPI is a better indicator of inflation. I freely admit that.

I know, the only thing you care about is lording over people and maintaining power and control over them.

One of the most difficult things in Economics is getting people to understand that Economics uses math, but it is not math.

In standard Applied Mathematics, $1 = $1. But in Applied Economics, $1 might equal $0.60 or $1 might equal $1.35, and in fact, more often than not, $1 will equal almost everything except $1. Seriously, in Economics, $1 is almost never equal to $1, although it might come very close: $1 = $0.997

I mention that, because Liberals as part of their fantasy believe the United States is Iceland with a population of 397,000 people (less than half of the population of the county I'm in) and has a uniform cost-of-living.

Unfortunately, the US has 314 Million people and the cost-of-living in the US is anything but uniform.

Two people, one living in Los Angeles and the other living in Baton Rouge. They each have $1.

So, $1 = $1 right? Wrong.

$1 "Los Angeles Dollar" is equal to $1.41 in Baton Rouge.

$1 "Los Angeles Dollar" is equal to $1.46 in Cincinnati.

So, you live in Los Angeles on salary or wages of $65,000/year and you're offered a job in Cincinnati at $50,000/year.

That's a $15,000 annual pay cut, right? Wrong, you're actually getting a pay raise.

Quit your $65,000/year job in Los Angeles and take a $50,000/year job in Cincinnati and you won't miss a beat --- your life-style, quality of life and standard of living will in no way, shape or form be negatively impacted. You will do all the things you used to do.....and more....because now you have a few $1,000 extra to play with, which means you can buy more clothes, go to the cinema show more often, eat out more often, burn up more gasoline, party more often, attend more sporting events and concerts.

Why? The cost-of-living. If you Liberals would come out of your Ivory Tower once in a while and hang around real people, you'd know that.

This shows you the how illogical the Liberal position is.

Because Liberals cling to the fantasy of a national government lording over everyone, you end up with situations where a family of four in Los Angeles gets $400/month in Food Stamps, just like a family of four in Cincinnati or Baton Rouge, except that in Cincinnati and Baton Rouge, $400 worth of Food Stamps buys $600 worth of food.

Same thing with Social Security. $1,000 = $1,000, right? That is true if both Social Security recipients live in Los Angeles or if both live in Cincinnati.

But if one lives in Los Angeles and the other lives in Cincinnati, then $1,000 = $1,420.....yeah, that's right, the person in Cincinnati gets an "extra" $420 to play with.

So how stupid is the Social Security COLA computation?

Down-right idiotic.

And the whole thing can be avoided by restoring the US Constitution and letting the States to set up and run their own Food Stamp programs, housing programs, Social Security programs, Medicare programs and everything else.

I challenge any Liberal to justify these gross injustices perpetrated by the national government.

Anyone?

Anyone have the guts to step up to the challenge?

Originally Posted by padcrasher

Using that will reduce benefits over the current method by 7%.

You can't prove that.

Besides, your benefits are already being reduced. The COLA as currently calculated is an average of price indices across the country.

The present 1.7% COLA increase is just an average...in some metropolitan areas, the cost-of-living decreased, so people are being unnecessarily rewarded, while in other metropolitan areas the cost-of-living is actually unchanged, and so they are being unjustly enriched as well.

And then.....thanks to Liberal lunacy, there are metropolitan areas where the cost-of-living increase was actually far greater than 1.7% as much as 5% in some areas, and so those people are getting ripped off.

Gotta love Liberal logic: take from someone else to unjustly reward another.

Originally Posted by padcrasher

It's a benefit cut....

No, it is not....you haven't even been awarded that money yet.

But, hey, thanks for proving to everyone how biased Liberals really are.

Originally Posted by padcrasher

....even thought the gap between rich and poor is the greatest in our nation's history.

That is immaterial and irrelevant as well.

Originally Posted by padcrasher

Nope. It's going over your head. Too complex for you. If we do nothing benefits will drop by 25%.

It's going to be a helluva lot more than that.

Originally Posted by padcrasher

Go learn something before spouting off right wing B.S.

You would do well to practice what you preach.

Originally Posted by padcrasher

What do you prefer "tweeking it"? Or "reforming it"?

Neither, actually.

What I prefer are real, permanent solutions instead of stop-gap band-aid solutions.

To that end, you need to pick a cut-off date, figure out how to pay for everyone through the cut-off date and then transfer the rest to a new program.

Originally Posted by EinsteinsGhost

I agree with that. In fact, the impact from SS is pittance. But, may be this is more about SS and its direction over next two decades than about deficits? You will likely say that...

Deficits? I already went over that previously.

Originally Posted by EinsteinsGhost

... so what, we can work to increase SS revenue... but how do you plan on getting it done?

Gosh, I don't know, payroll tax?

Let's see.....

Silent Generation: Buried with a 520% FICA payroll tax increase...check.

Boomers/Tweeners: Saddled with a 71% FICA payroll tax increase...check.

Generation X-Box and Y-Work....uh, well, um, getting a 2% rebate presently.

Figure it out yet?

Want another hint?

Originally Posted by EinsteinsGhost

How does that math work? Can I see how you calculated?

Your "Comrade in Stupidity" doesn't understand how the math works.

It's real freaking simple.....immediately end the misguided 2% FICA payroll tax rebate restoring the FICA payroll tax to 6.2%.

January 1, 2013: raise the FICA/HI wage/salary cap to $400,000.

July 1, 2013: raise the FICA payroll tax to 6.7%

January 1, 2014: raise the FICA/HI wage/salary cap to $1,250,000

January 1, 2014: raise the FICA payroll tax to 7.2%

January 1, 2015: eliminate the wage/salary cap

January 1, 2015: raise the FICA payroll tax to 8.2%

January 1, 2016: raise the FICA payroll tax to 9.2%

January1, 2017 and for each year thereafter through 2025 increase the FICA payroll tax by 0.45%

That will bring your FICA payroll tax to 12.8%. If you do that, I guarantee you will cover all of the Boomers, all of the Tweeners and at least 85% of Generation X-Box.

What about Generation Y-Work? I'm real sorry about their luck. You'd have to increase the FICA payroll tax to 16.0%-16.4% or more depending on how badly you damaged your economy in the interim.

Do you understand that you're currently collecting about $750 Billion in FICA revenues?

Do you understand that by ~2028, you will need to be collecting $1.5 TRILLION in FICA revenues?

The current FICA tax rate is 6.2% for employee and 6.2% for employer......

You asked how the math works.....there you go.....how do you double FICA tax revenues?

Double the FICA tax rate.

You presently have 2.0 Full-Time Workers supporting each Social Security recipient. That isn't enough. You need at least 2.5 Full-Time Workers supporting each Social Security recipient (with Part-Time Workers making up another 0.3-0.5 workers-per-beneficiary).

You are 23 years ahead of schedule, because you weren't supposed be at a 2:1 ratio until 2035.

That's why Labor Force Participation Rate matters.

Oooops.

Economically....

Mircea

Originally Posted by Mathguy

You are indeed correct to mention that ignoring subsitution tends to make the CPI overstate inflation by around 0.5% historically.

I gotta tell you I'm not particularly charmed by either method of CPI calculation. The flaw in the method is the assumption that the cost-of-living is uniform throughout the US, when it never has been and never will be (at least not in the next several centuries).

You live in the NYC/New Jersey area and you make $150,000/year. You get offered a job in Cincinnati for $70,000.

Should you take it?

Oh, hell, yeah, without delay.

But that's a massive pay cut....nope it's actually a pay raise.

Yes, $70,000 is/can be greater than $150,000 -- in the world of Economics.

At $60,000 the person living in Cincinnati is doing every single thing the person in NYC/NJ is doing: same size house, same amount of property, same number of cars, same amenities, same clothes, they eat out at the same places and do all of the exact same things....the only different is it costs less in Ohio.

So at $70,000 you basically got a $14,000 pay raise....since $70,000 in Ohio = $174,000 in NYC/NJ.

That's cost-of-living, which at one time was almost purely Supply & Demand, but now its all manner of taxes and bureaucratic regulations at the federal and State and local levels (but the spectre of Supply & Demand is still there).

RBOB is a good example of regulations. Many States require it in the Summer, but many don't and RBOB is more expensive that un-reformulated gasoline. It's only $0.45/gallon difference, but that adds up when you're buying hundreds of gallons. All those regulations on business and industry, including health care regulations enacted by the States, "feel good" regulations, food regulations and then idiotic things like no-fault insurance drive up the cost of auto insurance and so on. It all adds up. So do transportation costs to bring food, clothing, medical, household and commercial supplies and equipment into the a city, area, or region for consumption by households and businesses.

That's why the federal government needs to get out of the welfare business, because it's in everyone's best welfare.

Absurdities, like two families each getting $400/month in Food Stamps and then one family gets to buy $600 worth of food with their $400 while the other family can only buy $238 worth of food with $400 would not exist if the States managed and administered those programs, and that includes Social Security, Medicare and every abortion that comes out of the Department of Education.

It's about using money/resources efficiently to avoid waste and other problems.

Like I said, before 1929, there were six States with Social Security, and then by the time the Title 42 was enacted, there were about 29 States with Social Security programs, so it isn't like the States would be totally bewildered by the concept.

Chained-indexing...

Mircea

[Winter_Sucks]

Good. We need to raise taxes and cut spending. Make the far left and far right mad. The financial well being of the country is more important than offending liberal or conservative special interest groups.