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Again, if Congress would just do its job, Soc Sec can be funded to get through the Baby Boomer wave.
Congress already took care of that particular job in 1983. SS had always been a pay-as-you-go system prior to that with taxes and benefits being about equal to each other in real-time. But when post-WWII birth rates tapered off and then The Pill and Roe v Wade came along, a demographic bulge in the system was set up.
Accordingly, taxes were increased in order to have the Boomers themselves prepay for their retirement benefits. From a 1983 balance of nearly zero, a surplus of more than $2.8 trillion has been built up and is presently sitting in the SS Trust Fund. It will be used on top of payroll taxes, interest, and other income to pay Boomer retirement benefits going forward. The surplus will be used up around the time the last of the Boomers are dying out. That's been the plan all along.
A ponzi scheme is a fraudulent system that will eventually run out of new investors and collapse, while maintaining a deception to investors about it's stability and the source of their investment returns. It will always collapse because there is no actual investment and each layer of new investors needs to be twice as big to continue returns to the layer above it, hence references to pyramids.
Social security will never run out of contributors unless we stop having children, they are quite transparent about financial status and projections of future risk, and doesn't need to double the contributors with every generation. It is also stable, it might be paying less or have a higher tax but there are no projections that show an eventual collapse.
^^^ This ^^^
At the same, it is fair to say that somethings gotta give. It is fair to project that it will most likely be in the form of higher taxes.
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Originally Posted by Escort Rider
Sure, it will be a problem if nothing is tweaked and then benefits have to be cut to 75% of promised levels some years down the road...
While cutting benefits is possible, I find it highly improbable. There will be the usual chants to "Make The Rich Pay Their Fair Share." Why would politicians cut benefits when they could simply raise taxes instead?
The topic was actually falling behind in saving for retirement. That's a different thing from filing for bankruptcy.
I would think its fairly likely anyone filing for bankruptcy isn't saving for retirement
And if you are being dunned for heavy medical bills you could have income garnished
At the same, it is fair to say that somethings gotta give.
That depends on how good the Trustees baseline assumptions turn out to be. They have a poor track record. If they are currently wrong even by a little bit in their assumptions about economic growth, legal and illegal immigration, and the pace of life-extending medical advances, it is entirely possible that the SS Trust Fund will never be exhausted, and the system can pay 100% of scheduled benefits in perpetuity without changing anything at all.
Quote:
Originally Posted by SportyandMisty
It is fair to project that it will most likely be in the form of higher taxes.
That would be an easy way to go if people wanted to bet on the Trustees being correct and taking reasonable precautions on that account.
Quote:
Originally Posted by SportyandMisty
While cutting benefits is possible, I find it highly improbable.
Who would be helped by cutting benefits? Where is the constituency for that?
I would think its fairly likely anyone filing for bankruptcy isn't saving for retirement. And if you are being dunned for heavy medical bills you could have income garnished
Well, 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.
Meanwhile, the classic drivers of personal bankruptcy are job loss, an uninsured health crisis, and a disadvantageous divorce settlement.
The Heritage Foundation is a completely worthless source. They are nothing but a right-wing slop-shop. The fact that the article you link to could not get through its first ten words without referring to SS in Bushie terms as an "insolvent program" is a plain sign of the partisan bias, distortion...
... unlike the progressive bedwetters who have a Pavlovian reaction to attack the Heritage Foundation, or say everything published in The Nation's Fish-Wrap of Record, the NYTimes.
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