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All they need to do is define a worker to retiree ratio. The impossible thing, which the other deluded poster suggested, is done routinely by insurance companies. Simply set the retirement age so that benefits are only available to a 1/5 ratio starting at 18. Thus if 80% of population above 18 is between 18-70, the retirement age is 70.
i like that idea, it sounds interesting.
what i can't figure out is why we lump "retirement" social security in with "disability" social security, and fund all sorts of seemingly unrelated issues with the "payroll tax."
Not everyone is going to be able to work for a company that offers a pension plan or a 401(k) Plan.
In a Perfect World, every person born is a future potential Wall Street Hot Shot, but it is not a Perfect World. It's absurd, if not obtuse to suggest that the average person is sufficiently knowledgeable and skilled to manipulate their 401(k) Plan or their personal savings and investments to generate a sufficient amount of retirement income.
There are many who for any number of legitimate reasons, in addition to not have a pension plan, will not be able to save an amount of money for their own retirement.
If left to their own devices, people will not willingly save, so as elitist as it might sound, you have to force people to save and Social Security is one such vehicle (although not the best).
Finally, if you do a Cost-Benefit Analysis, what is the cost of having a program like Social Security (but not necessarily the program everyone knows and loves) versus the cost of not having such a program?
Social Security is clearly a cheaper alternative to not having Social Security.
Very many things to respond to in your post. You are an ultra-conservative perhaps, but you are extremely realistic and understand the social ramifications of an entire segment of people (retirees) underfunded or destitute. The federal SS program for them would simply by necessity transfer to other federal programs such as foodstamps and state programs such as subsidized housing and utilities help. Both the federal and state gov'ts would be overwhelmed with elderly people potentially in the streets. And these programs will not have had any monies paid in through the SS program; they will be funded broadly by ALL taxpayers. We have a delicate and balanced system that will have to continue, I'm afraid, otherwise the entire apple cart of our capitalist society gets turned over in the street.
The pay as you go system of social security is a pretty simple system where the current generation supports its retired class. Its rather vital to have a retirement path in some way due to its retroactive nature of what fate awaits the productive class. It is certainly no ponzi scheme since it is not bought, sold, purchased on leverage again and resold to a greater fool. However it only reflects the ability of the current economy to pay, and is no direct investment other than its moral. It doesn't invest in the traditional sense of capital. It may indeed motivate labor.
So what has the boomer generation left of the current economy to pay into SS?
Since the the population has leveled off and people are living longer there are fewer workers. Maintaining a worker to retiree ratio seems simple enough rather than a fixed retirement age.They didn't push this ratio far enough. Then they voted themselves cheap medication.
However the real problem is the retiree is double dipping. The cost of housing has made older home owners a landed gentry and reduced the new productive class to serfdom. They also bought up many of the resources embedded in stock market and have to buy into a post credit fueled stock market while many in the older generations sit on their gains since the 80s. They have cut into the bone of the productive class, and its destroying their ability to support the system. This destroys the value of all their assets.
n 2009, households headed by adults ages 65 and older possessed 42% more median1 net worth (assets minus debt) than households headed by their same-aged counterparts had in 1984. During this same period, the wealth of households headed by younger adults moved in the opposite direction. In 2009, households headed by adults younger than 35 had 68% less wealth than households of their same-aged counterparts had in 1984.
So then new workers being saddled with educational debt must also pay into the kitty at higher social security rates, and then finally again must pay more for a living space or in the opportunity cost and transportation cost of being forced into exurbia. The collapse of this edifice once again landed mostly on the emerging productive class in exurbia.
You killed and ate the milk cow because social security isn't saving. It comes from the productive class as a transfer payment. Since it has been recognized that this has led the economy into decline, the one benefit of social security is lost since few believe it has any real meaning.
So not only will housing come down in price, so will social security one way or another. You will either be paid SS benefits in ponzi dollars or the benefits will be cut. Its already a done deal.
However those benefiting from gentrification will also see their benefits begin to evaporate even further. The deal you signed with the banks gives them creditor status on the investment while you are the equity position to take the loss. That is also a done deal.
The Boomers are not immortal, they will die and the numbers will level off. The only change that needs to be made is to eliminate the cap to the wage tax.
Don't be too glad since many of them were invested way before the bubble. Also there really is no lock box. SS withholding just stops workers from consuming their own production to leave room for the beneficiary in real time.
Being Gen-X I am a somewhat neutral party in this. I have a lot of working years ahead of me, but I also have had time to accumulate some assets. Thus from my unbiased position I'd say the boomers have really shafted their own children. They failed to realize their own housing nest egg was really just a wealth transfer from younger generations. They double dipped keeping their own surplus and then socked it to Gen-Y with high housing costs and rents. So they have SS income and their housing along with inflated 401K profits with now very favorable capital gains.
Real estate and capital can be turned into financial assets unlike labor which is why Wall Street lobbied to shift taxes off housing and capital gains. That's the reason behind IRAs and Roth's as well. It shifts the revenue burden to labor and dollar inflation. This again turns the screws on the younger generations. The boomers were able to earn with lower taxes on labor while higher capital gains rates keep capital and asset prices low. Once they could be fully invested, they reversed these polices and were able to grow their wealth. Also its time for people to wake up and realize much of this money goes into ponzi schemes and not industry.
I think that stinks.
i am tired of reading that it is the boomers who have shafted everyone, or actually any one group of citizens-- other than the corrupt legislators who WRITE THE LAWS AND ENFORCE THE LAWS. congress and the presidency have been captured-what other excuse could there be for not representing the interests of the citizens of the country in which they are elected?
citizens paid in and the money was misappropriated.
-if policies weren't so bad and corrupt, if spending wasn't so high, if waste and theft were not allowed, if money stayed at its intended purpose instead of diversion, if the borders weren't wide open to illegal immigration, if offshoring wasn't rewarded, if the elite weren't lining their own pockets with wall street insider knowledge, if government collected revenue wasn't diverted to foreign countries to help the global "ponzi" we might have a chance.
Well I'm young so I say just dump the entire system and liquidate it. Use the treasury bills to pay down the deficit. Stop collecting the social security tax and end all benefits checks.
Thank you so much young one. My wife and I are dependent on SS for our existence. Is it your solution that we should cease to exist?
The Boomers are not immortal, they will die and the numbers will level off. The only change that needs to be made is to eliminate the cap to the wage tax.
is it the fault of the boomers that the federal reserve printed money, FORCING inflation, and debasing our currency?
that screwed the boomers, by the way.
is it the fault of the boomers that our president is involved in umpteen military actions (no specific number because we don't even know where he will send troops next) increasing the price of gasoline for every single american? -although i bet the troops being sent to australia are pretty happy campers for now.
that screwed the boomers and everybody else, by the way.
is it the fault of the boomers that they can't make any interest on their savings because of the actions of the banks and the federal reserve-because they get the money first?
again, boomers are screwed and now the government is going to try and get the pensions.
don't believe me-look at what is happening in europe now.
just watch.
it's not just the boomers who are getting shafted either, so watch the ratigan rant again.
why do you think obama talked about a massive civilian security force? why would he even do that?
is it the fault of the boomers that the federal reserve printed money, FORCING inflation, and debasing our currency?
Yes actually.
Their votes (Or lack thereof) put and kept those politicians into office.
So it IS their fault.
Just like it will be OUR fault if we allow the travesty of 'social insecurity' to continue as soon as enough of the boomers die off so as to make it so our votes about whether we keep paying for something we will never get, and is doomed no matter what count!
For now, with 'the grey vote' in power, it's out of our hands, we just get stolen from because the 'grey vote' believes because money was stolen from them WE should compensate them.
And don't tell me people depend on SS because they didn't know. People were screaming about it failing in the 70's!
...that screwed the boomers, by the way.
...again, boomers are screwed and now the government is going to try and get the pensions.
O.K., it's certainly legitimate to object to "boomer bashing". The vehemence and intensity of the intergenerational hatred I see on City-Data often surprises me. (I used the strong word "hatred" on purpose). And I agree with you to the extent that every ill is not to be blamed on boomers.
However, aren't you also guilty of what you accuse the bashers of, namely treating one large and diverse age demographic as if it were one entity? Sure, many boomers are indeed "screwed", such as those who lost jobs at the point they were planning to retire in a few more years, or those who want to sell their over-sized house in order to downsize but cannot stomach the "loss" of equity, equity they had been counting on to help with retirement.
But, and here finally is my main point, there are also many, many boomers who have it made right now. Those who passed up on the folly of buying real estate at the insanely high prices of the top of the bubble and passed up on the glint of fool's gold and refused to use their homes as ATM machines, by this point in their lives, often have a paid-off house which they find quite suitable for retirement and have no need or desire to sell. The older boomers particularly are more likely to have an asset which is becoming rarer and rarer - a secure, defined benefit pension. Not everybody lost a job; in fact, most people did not. Many (most???) boomers are sitting pretty right now; isn't it jealousy of their situation which drives a lot of the boomer bashing?
O.K., it's certainly legitimate to object to "boomer bashing". The vehemence and intensity of the intergenerational hatred I see on City-Data often surprises me. (I used the strong word "hatred" on purpose). And I agree with you to the extent that every ill is not to be blamed on boomers.
However, aren't you also guilty of what you accuse the bashers of, namely treating one large and diverse age demographic as if it were one entity? Sure, many boomers are indeed "screwed", such as those who lost jobs at the point they were planning to retire in a few more years, or those who want to sell their over-sized house in order to downsize but cannot stomach the "loss" of equity, equity they had been counting on to help with retirement.
But, and here finally is my main point, there are also many, many boomers who have it made right now. Those who passed up on the folly of buying real estate at the insanely high prices of the top of the bubble and passed up on the glint of fool's gold and refused to use their homes as ATM machines, by this point in their lives, often have a paid-off house which they find quite suitable for retirement and have no need or desire to sell. The older boomers particularly are more likely to have an asset which is becoming rarer and rarer - a secure, defined benefit pension. Not everybody lost a job; in fact, most people did not. Many (most???) boomers are sitting pretty right now; isn't it jealousy of their situation which drives a lot of the boomer bashing?
i am not attacking any particular group, except the group that makes and enforces the laws-who refuse to identify the problem, fix the problem, or even address the problem. (no budget was even drawn up for our country-is that insane?)
my point is that everyone is going to be screwed if we keep going in the direction we are going. if the pensions are taken, what do even they have left? you are assuming that the pensions aren't going to be touched? again, have you seen what is happening in europe?
isn't that the last savings the government can tap into? the value of homes has been destroyed in this country-with literally trillions in "wealth" having disappeared. the government can't keep borrowing with external debt because there is debt saturation in the system now.
again, why do you think obama even talked about a massive civilian force?
a lot of the jobs out there now that pay well now are government jobs, would you agree? how do you think those jobs continue to be funded if the economy keeps drying up? how do you think teachers will draw their salaries if housing values continue to deteriorate and they count on property taxes for their pay, especially with dwindling home ownership and more renting?
this is all tied together and needs to be fixed, or we will continue on our slide downward.
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My wife and I are dependent on SS for our existence. Is it your solution that we should cease to exist?
Are boomers really "screwed"?
