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View Poll Results: Does means testing Social Security sound fair to you?
Yes - the well to do should socialize the retirement of the poor 12 20.34%
No - I have payed into the system and i'm entitled to those benefits regardless of my assets 47 79.66%
Voters: 59. You may not vote on this poll

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Old 12-27-2012, 03:21 PM
 
Location: NJ
28,482 posts, read 33,344,501 times
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i was reading an article the other day about how SS ran a $40 billion or so deficit in 2012 and it said that the SS trust fund had something like $2.7 trillion in it. but when our elected geniuses were debting the debt ceiling not long ago, obama suggested SS checks may not be able to go out unless the debt ceiling is raised ASAP. funny that a program with a $2.7 trillion trust fund cant send out checks unless the debt limit is raised ASAP. we just pretend that its ok.
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Old 12-27-2012, 04:52 PM
 
Location: Victoria TX
42,661 posts, read 77,946,364 times
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Quote:
Originally Posted by CaptainNJ View Post
id rather just get rid of social security and just provide welfare benefits to people who need them as they age. then just try to minimize welfare.
How, by forcing people in their 80s to grovel through a lot of red tape and rude functionaries and humiliation and indignity and taking the bus to the welfare office every couple of months to get the benefits? We already do enough of that. Like making them choose a Part D provider (er, profiteer) who covers their Rx needs, when they can't even remember to put their pants on frontwards in the morning..

Last edited by jtur88; 12-27-2012 at 05:02 PM..
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Old 12-27-2012, 06:44 PM
 
Location: Vallejo
15,964 posts, read 17,881,322 times
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Quote:
Originally Posted by CaptainNJ View Post
i was reading an article the other day about how SS ran a $40 billion or so deficit in 2012 and it said that the SS trust fund had something like $2.7 trillion in it. but when our elected geniuses were debting the debt ceiling not long ago, obama suggested SS checks may not be able to go out unless the debt ceiling is raised ASAP. funny that a program with a $2.7 trillion trust fund cant send out checks unless the debt limit is raised ASAP. we just pretend that its ok.
Of course he did. Where do you think the social security trust is invested? It's not in a piggy bank, it's invested in treasuries. The only way the federal government can pay back treasuries during a deficit is by issuing new debt to pay the old debt. The SS trust is no different than any other bondholder. Refusal to increase the deficit means a default on bonds. Since the SS trust is currently paying out more than it is collecting, e.g. it is cashing in bonds as they mature to meet current expenses, it would have no way of meeting current expenses should the federal government default on its bonds.

And at this point, it's really more of a question of when the federal government defaults than if and in what form that default takes. Social security is likely to take precedence over other forms of debt, but with sovereign debt nothing works predictably.
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Old 12-27-2012, 06:46 PM
 
Location: Whoville....
25,387 posts, read 32,181,600 times
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Quote:
Originally Posted by ducviloxi View Post
Means testing as a way to keep Social Security solvent has been suggested time and again and my fear is that this will be instituted. Mostly it will be an asset test but it may also take into account income over the years and what the government expects you should have saved and what you should get. Do you think means testing is fair to people who have payed into the system yet get nothing in return but instead they socialize others who may have not necessarily worked hard to further themselves.
No. Those who make the most pay the most and would see their benefits reduced.
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Old 12-27-2012, 09:22 PM
 
Location: NJ
28,482 posts, read 33,344,501 times
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Quote:
Originally Posted by Malloric View Post
Of course he did. Where do you think the social security trust is invested? It's not in a piggy bank, it's invested in treasuries. The only way the federal government can pay back treasuries during a deficit is by issuing new debt to pay the old debt. The SS trust is no different than any other bondholder. Refusal to increase the deficit means a default on bonds. Since the SS trust is currently paying out more than it is collecting, e.g. it is cashing in bonds as they mature to meet current expenses, it would have no way of meeting current expenses should the federal government default on its bonds.

And at this point, it's really more of a question of when the federal government defaults than if and in what form that default takes. Social security is likely to take precedence over other forms of debt, but with sovereign debt nothing works predictably.
i am aware of the reason why ss couldnt pay if the debt limit is increased. but it should be offensive to people that SS has taken in 2.7 trillon (minus interest) than its paid out and yet there is no money actually there because it "invested" the money in federal debt. it would have been there if it was in a savings account or some other non-government investment. yet people go nuts when you talk about privatizing SS, at least there would be money there.
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Old 12-27-2012, 09:24 PM
 
Location: NJ
28,482 posts, read 33,344,501 times
Reputation: 20729
Quote:
Originally Posted by jtur88 View Post
How, by forcing people in their 80s to grovel through a lot of red tape and rude functionaries and humiliation and indignity and taking the bus to the welfare office every couple of months to get the benefits? We already do enough of that. Like making them choose a Part D provider (er, profiteer) who covers their Rx needs, when they can't even remember to put their pants on frontwards in the morning..
make them live in small apartments with roommates and eat nothing but rice and beans.
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Old 12-28-2012, 12:13 PM
 
48,508 posts, read 87,939,170 times
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Not goig to happen as no one is goig to want additional tax with no beenfit.In the end SS reform will be much like it was in the apst with age raise and some additonal increase in SS taxes;is my guess. One nly has to go back to breaux commision to see options likely to be considered and it does not include changing it into a welfare program by need. that is what welfare is for.
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Old 12-28-2012, 12:24 PM
 
Location: Los Angeles area
14,017 posts, read 18,760,009 times
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Personally, I would be willing to give up my Social Security entirely if I felt it would contribute to the long-term solvency of the system. My SS retirement benefit is small - $149 per month gross and $49 per month net (after they take out the Medicare Part B premium. I would never miss the net payment, and I would never notice the difference paying the Medicare premium out-of-pocket.

However, there is a reason I bolded the word "personally", and that is because there is a difference between what I as an individual would be willing to do and what I think would be good public policy. Public policy is forced on everyone and has various consequences. I question whether Social Security should be turned into a pure welfare system, and that is why I voted "no" in the poll. Turn it into a welfare system today, and see it gutted and endangered tomorrow. It already has welfarish aspects, and that should be enough.
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Old 12-28-2012, 03:52 PM
 
Location: North Beach, MD on the Chesapeake
36,057 posts, read 46,349,477 times
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The idea of means testing for Social Security was floated back in the 1980's and the then recipients (you know, the Greatest Generation) damn near rioted. They did attack Dan Rostenkowki's car and spit on him at an event in Chicago.
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Old 12-28-2012, 04:08 PM
 
Location: Ohio
22,509 posts, read 15,729,941 times
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Quote:
Originally Posted by ducviloxi View Post
Means testing as a way to keep Social Security solvent has been suggested time and again and my fear is that this will be instituted.
Um, I don't want to be the bearer of bad news, but Social Security is already means tested.

If you are single and your income exceeds $25,000 then 85% of your income is taxable. If I'm not mistaken, 50% goes directly to the Social Security Administration and not to the General Fund. The other 35% goes directly to the HI (Medicare) Trust Fund.

If you file jointly and your income exceeds $32,000 then your

If you file separately, then the threshold is $0.

Note that those amounts are fixed (not floating or adjusted) and so each year more and more people are means tested.

Quote:
Originally Posted by ducviloxi View Post
Do you think means testing is fair to people who have payed into the system yet get nothing in return but instead they socialize others who may have not necessarily worked hard to further themselves.
Why don't you read this very informative section of United States Code...

42 USC § 402 - Old-age and survivors insurance benefit payments

(a) Old-age insurance benefits Every individual who—
(1) is a fully insured individual (as defined in section 414 (a) of this title),
(2) has attained age 62, and
(3) has filed application for old-age insurance benefits or was entitled to disability insurance benefits for the month preceding the month in which he attained retirement age (as defined in section 416 (l) of this title), shall be entitled to an old-age insurance benefit for each month, beginning with—

I took the liberty of high-lighting the operand, so you can understand better.

PS...your poll sucks.

Testing...

Mircea

Quote:
Originally Posted by Escort Rider View Post
The formulas used to calculate Social Security retirement benefits...
Formula. Singular. I don't really see where lower wage earners are subsidized, but then I'm too damn lazy to throw it on a spread sheet and look at it.

This is the formula (singular)....

To compute PIA: (1) 90% of AIME below the first bend point; plus (2) 32% of AIME in excess of the first bend point but not in excess of the second; plus (3) 15% of AIME in excess of the second bend point.

The first bend point changes annually. It is currently $767 but is projected to increase to $792 for 2013.

You get your print-out from SSA showing your monthly earnings (the calculation actually starts at age 21). Then you adjust your monthly earnings to the Wage Index. That converts all of your earnings to Year 20NN Dollars (the year in which you file for retirement benefits), because $2,000 in 1983 is not the same as $2,000 today.

Once you do that, you calculate your average monthly earnings. Monthly, not yearly, Monthly.

Having determined your average monthly earnings, let's say $1,000 per month, then...

1] you get 90% up to the first bend point of $767, or......$717.30

2] you get 32% of the amount over $767, but less than the 2nd bend point of $4,624.

$1,000 - $767 = $233 * 32% = $74.56 + $717.30 = $792 per month as a benefit.

Note that someone who has never earned more than minimum wage, and worked 40 hours per week from age 21 to full-retirement date will receive $763/month at present.

Let's say someone had average monthly earnings of $4,000 per month.....

1] you get 90% up to the first bend point of $767, or......$717.30

2] you get 32% of the amount over $767, but less than the 2nd bend point of $4,624.

$4,000 - $767 = $3,233 * 32% = $1034.56 + $717.30 = $1,752/month.

Any subsidy there?

I think not.

Let's say someone had average monthly earnings of $6,000 per month....

1] you get 90% up to the first bend point of $767, or......$717.30

2] you get 32% of the amount over $767, but less than the 2nd bend point of $4,624.

$4,624 - $767 = $3,857 * 32% = $1234.24 + $717.30 = $1951.54

3] you get 15% in excess of the 2nd bend point....

$6,000 - $4,624 = $1,376 * 15% = $206.4 + $1,951.54 = $2,158

Subsidy?

Nope.

The maximum monthly benefit is $2,513. Just eye-balling it, if you earn more than $85,000 per year then you might be able to possibly make an argument that you are subsidizing low class people. I mean low income people (sorry).

Those who take retirement at age 62 never get 100% of their calculated benefits. Those born after 1960 who retire at 62 only get 70% of their calculated benefits for the rest of their lives (and their spouse only gets 35% of the benefits).

Formulating...

Mircea

Quote:
Originally Posted by jtur88 View Post
The reason Social Security has lasted so long is because it is (like the US Constitution) fair and honest and efficient and does what it was supposed to do, to the benefit of the commonweal. In principle, it is above reproach, no matter how loudly the greedy and ignorant scream about it.
Fair? So, you're claiming that the cost-of-living is uniform throughout the US?

How is it fair that one person gets $1,000/month, but due to the cost-of-living $1,000 is only worth $650/month?

How is it fair that one person gets $1,000/month, and due to the cost-of-living $1,000 is worth $1,500/month?

Can you explain that? If States ran their own Social Security programs, cost-of-living would not be an issue.

Also, explain how it is fair that a minimum wage worker should pay $96/month in FICA taxes and get only $763/month in benefits, when the very same worker could be paying $21/month in insurance premiums to a private insurance fund and receive $1,600/month in benefits?

Is there some kind of Lib-logic at work here?

Paying 400% less in premiums and getting 200% more in benefits is evil?

How is that evil?

Quote:
Originally Posted by jtur88 View Post
You do have a point, but I don't think means-testing it the correct approach.
You already are means testing.

Not exactly well-informed are you?

Quote:
Originally Posted by jtur88 View Post
If any adjustments are to be made, the first should be to cap the benefits. Exactly the people who earned enough that they should have made retirement allowances for themselves.....
You just said Social Security was insurance. Make up your mind.

Do you have some kind of crystal ball that let's you see how people's lives will turn out in the future?

Quote:
Originally Posted by jtur88 View Post
, are receiving way too much SS benefits ($30K per year) for the basic sustenance SS was designed to afford. The cap should be about half that, which is quite enough for a working-class retiree to live on. The retired millionaires are the ones getting $30K.
You really out to stay out of economic discussions. Anyone earning $85,000/year will get the maximum monthly benefit of $2,513/month or $30,156/year.

Someone earning $85K is a millionaire. Imagine that.

And since the threshold is $25,000 then that means 85% of their income is taxable.

Yeah, that would be the means test that you pretend doesn't exist.

Not impressed...

Mircea

Quote:
Originally Posted by CaptainNJ View Post
id rather just get rid of social security and just provide welfare benefits to people who need them as they age. then just try to minimize welfare.
Actually they wouldn't need welfare. A minimum wage worker would pay about $21/month for a privately funded retirement insurance plan ---- 400% less than they're paying now --- while getting 200% more in benefits.

The problem with that is Liberals would not be able to lord over people and hold them hostage with threats of cutting their COLA or reducing their benefits or raising the payroll tax rates.

Realistically...


Mircea
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