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No matter how many times the facts are repeated, there remains a large, and completely delusional clientele who cannot understand that: (1) Social Security is little more than a Ponzi scheme; (2) that the end of American dominance of a global economy means that wages in many industries will be depressed, and (3) a heavier burden is falling on a diminishing number of younger workers.
All it takes is a modest increase in the Soc Sec payroll tax and raising the taxable cap of $118,500 to a higher number. Do that and Soc Sec is solvent for decades. The only reason Soc Sec is under stress is because the Republicans refuse to do anything that involves a tax increase.
And no, Soc Sec is not a Ponzi scheme, it is a government-run insurance program. Ponzi schemes fraudulently claim that new capital represents investment returns. Soc Sec does not make that claim, they have never said your money is squirreled away for 40 years until you are old. My insurance company doesn't keep my premiums in a bucket waiting for me to make a claim, they use it to pay other claims, which is fine as long as they pay me when I have a claim.
The "diminishing number of younger workers" is a temporary problem. Out past 2035 or so the number of Baby Boomers on the Social Security rolls will rapidly fall off as mortality takes its toll. Again, if Congress would just do its job, Soc Sec can be funded to get through the Baby Boomer wave.
All it takes is a modest increase in the Soc Sec payroll tax and raising the taxable cap of $118,500 to a higher number. Do that and Soc Sec is solvent for decades. The only reason Soc Sec is under stress is because the Republicans refuse to do anything that involves a tax increase.
And no, Soc Sec is not a Ponzi scheme, it is a government-run insurance program. Ponzi schemes fraudulently claim that new capital represents investment returns. Soc Sec does not make that claim, they have never said your money is squirreled away for 40 years until you are old. My insurance company doesn't keep my premiums in a bucket waiting for me to make a claim, they use it to pay other claims, which is fine as long as they pay me when I have a claim.
The "diminishing number of younger workers" is a temporary problem. Out past 2035 or so the number of Baby Boomers on the Social Security rolls will rapidly fall off as mortality takes its toll. Again, if Congress would just do its job, Soc Sec can be funded to get through the Baby Boomer wave.
Social Security was never intended to be a retirement staple; it was an anchor upon which responsible adults were expected to add their own efforts; and between longer life expectancies and the growth in potential retirement careers in a mature, service-based economy, there aren't many excuses left for failing to do so. Sill, we all have to understand that a certain percentage of people will "fall through the cracks", often through no fault of their own, and for them, SSI (which comes out of general funding rather than payroll deductions), is the proper remedy.
Moderator cut: partisan politics
From a wider perspective, the American economy is entering relatively-uncharted territory. De-industrialization "creates jobs" but these "careers" are the sort of thing no one wants his son or daughter to take up, or marry into; so the lure of SSI and or premature retirement is always there. We've already enacted a few reforms for the more motivated, such as complete removal of the "earnings cap" for those who delay retirement until the prescribed age -- but there will always be fools looking for the easy way out; you'l get no sympathy from me if the whip eventually has to be cracked.
Last edited by toosie; 01-08-2017 at 05:29 PM..
Reason: dont add to polarization here
From a wider perspective, the American economy is entering relatively-uncharted territory.
Same can be said at any point in time in this nation's history, the "this time it's different" thing is a poor crutch to lean on for projecting financial future.
A 40% drop in the stock market over three years is typical and no biggie?
Hah.
a crash is not just a drop . a crash is a sudden dramatic drop in a short period of time , not over years . that is a plain ole bear market .
some stats
. Since 1929, the U.S. stock market has experienced 25 bear markets
7.. Those 25 bear markets lasted, on average, for 10 months.
8. Also like earthquakes, bear markets can be relatively mild or quite harsh. The average bear-market loss was 35%. The smallest loss was 21% in 1949; the worst was a drop of 62% from November 1931 to June 1932.
9. Many of today's investors have lived through two fairly nasty bears: a decline of 58% from 2000 to 2002 and a 57% plunge from 2007 to 2009.
we really have had very few crashes especially in most of our lifetime but everyone keeps using that word as if it is all to common . sure we have had some hefty drops in bear markets but that is normal . 35% is the average . crashes are rare .
The most frequent reasons given by people who to this point have not saved enough for retirement are low wages, student loans, and the need to save for a child's education.
I don't have the link to cite but I think I read more than once that the growing reason why more people are filing for bankruptcy lies with overwhelming medical bills...
Mainly because in cases where people had jobs/insurance and lost that employment, couldn't afford to carry COBRA coverage or couldn't find new work...
So I think your list needs to take into account the growing role of medical debt as well as broken periods of unemployment or drops in income/earnings...
Most people in today's work culture don't have a single employer--with a dependable increasing income stream
I don't have the link to cite but I think I read more than once that the growing reason why more people are filing for bankruptcy lies with overwhelming medical bills...
The topic was actually falling behind in saving for retirement. That's a different thing from filing for bankruptcy.
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