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There has been a surplus in Social Security receipts over outlays every year since 1983. The surplus in the 3rd quarter of FY 2007 was a little over $87 billion. The current cumulative surplus is some $2.2 trillion. SS is not now and never has been scheduled to "implode".
So what if there is money left over NOW? As the worker-to-social security-recipient ratio increases, the surplus will dwindle and become a deficit. Social security will not last in its current form!
BTW, Federal employees have access to "FERS" (Federal Employees Retirement System) - they have a choice - to contribute all to social security or contribute part of their retirement deductions into a 401K type program.
Absolutely incorrect. All federal employees hired since 1983 (including all Senators and Congresspersons) must pay into Social Security just as you do, and in some cases more than you do. Such federal employees also earn a trivial pension, and are encouraged to contribute as they can to the Thrift Savings Plan, which is the equivalent of a 401-k.
Those who were already federal employees in 1983 had the option at that time of staying with the old CSRS retirement system or switching to FERS. For those with more than about five years of service, staying in CSRS made more sense. For those with less, switching to FERS made more sense.
Every analysis shows that to be the case. Unless you believe that the USG is suddenly going to start selectively defaulting on its public debt, something that has not happened via any means in the history of the republic, even the most pessimistic forecasts show that SS is absolutely fine exactly as is through the early 2040's. That isn't however to say that we should wait until then to do something about what comes after. Even though problems are unlikely to arise in fact until 2060 or so, you can influence out-years greatly with small changes made early. Waiting until the last minute takes rather drastic action to have any effect.
You wouldn't necessarily need to change the rates, but establishing a floor and phasing out the ceiling would be beneficial as far as out-year funding goes. There is absolutely no reason why everyone alive today should not receive every dime of what current formulas provide for. As for those who are not alive yet, their situation can be dealt with down the road. There have been many adjustments to SS in the years since its inception, and there will be many more. Fair enough I think to leave it to each generation to pick up the tab for its own burdens. That's what the boomers did a quarter century ago. That's what other generations will need to do in the future. For now, small changes have big long-term impacts, and in my view, it would be worthwhile to make some of those.
I know you're pretty thorough in checking out your facts, but this blurb from the Social Security website indicates the problems to be more immediate than you're acknowledging:
"Social Security is now taking in more money than it pays out in benefits, and the remaining money goes to the program’s trust funds. There are now large “reserves” in the trust funds, but even this money is small compared to future scheduled benefit payments. In 2017 benefits owed will be more than taxes collected, and Social Security will need to begin tapping the trust funds to pay benefits. The trust funds will be exhausted in 2041. At that time, Social Security will not be able to meet all of its benefit obligations if no changes are made."
The "problem" is / would be, not only is "her" money there, but, so is her employer(s) - if she withdrew "her" monies, it would only be "hers" and not her employers
The majority of funds contributed by her and by her employer were used as paid in each month to pay the benefits of then retired, disabled, or survivor beneficiaries. The rest was placed in the Trust Fund, but not with anyone's name on them. People need to disabuse themselves of the entirely fallacious idea that payroll taxes are being held in some equivalent of a personal account that will be drawn down on your behalf at a later date. There is no such concept anywhere within the SS system...
The majority of funds contributed by her and by her employer were used as paid in each month to pay the benefits of then retired, disabled, or survivor beneficiaries. The rest was placed in the Trust Fund, but not with anyone's name on them. People need to disabuse themselves of the entirely fallacious idea that payroll taxes are being held in some equivalent of a personal account that will be drawn down on your behalf at a later date. There is no such concept anywhere within the SS system...
I am SO HAPPY I don't have to pay into this BS system!!!!!
It is amazing how many people "contribute" to social security - 20/30/40 years (or more) then die before they get a dime - and how much does their family get? Zip
Maybe you should read up on why it's sometimes called OASDI...old-age, SURVIVORS, and disability insurance...
Maybe you should read up on why it's sometimes called OASDI...old-age, SURVIVORS, and disability insurance...
Inasmuch as I don't pay into "the system", and can never get benifits from "the system", it is of little concern. I do know this however, unlike social security, when I die, what I have in my account can be willed to my grandchildren and greatgrandchildren.
The sole oppostion to PRA's was, and is, the blind hatred for Bush that characterized the previous poster's irrationality.
No, the major opposition to PRA's is that they are grossly ineffective and inefficient. They replace security with risk. They take money from ordinary people and give it to the stockholders of banks and brokerage houses. This is simply another of Bush's programs for the redistribution of wealth to the wealthy. You either don't undertand or are ignoring the fact.
Quote:
Originally Posted by Yeledaf
But Bush won't be president for much longer, and Social Security will still need fixing. It will be interesting to see how the Democrats grapple with this issue without seeming to simply repackage Bush's plan -- because veryone knows it's the best one there is.
Everyone knows no such thing. Bush's never-actually-proposed plan was a vague recipe written by the Project for a New American Miasma. It was an attempt to use lies and alarmism yet again, this time to convince people that they would be better off with $3 than with $4. The plan, such as it was, was resoundingly and deservedly trashed.
I read an article recently, entitled something like, "What is the most Dangerous Threat to the US Economy"? Surprise surprise, it was US consumers SAVING MONEY that would make devastating blows to economy, above terror and all else.
That might be true if people started stuffing money under the mattress, thereby pulling it out of the system. If they were to place their savings in a bank, however, then, like taxes, they would be pumped right back into the economy (with multipliers) to stimulate new demand and production.
Some very interesting posts! I for one do not share the idea that S.S. cannot continue. If S.S. were not in the general fund and subject to poor judgement by our Adm. there is not a good reason why S.S. cannot continue--as well it must.
Kudos for knowing that the General Fund is involved at all, but SS is not in the General Fund. The Trust Fund is invested (by law) in US Goverment securities. The proceeds from the sale by the US Treasury of those securities to the SS Administration are deposited to the General Fund because that's where the proceeds of ALL government securities sales go...even your little old US Savings Bonds. Those funds are general revenues that cannot be expended by anyone absent appropriating and authorizing legislation.
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Originally Posted by bluskyz
S.S. is probably the most effective program of that type on the planet and the huge benefits that spread through many age groups have residual values and effects rarely discussed. S.S. is not just some benefit for lazy or unintelligent seniors.
No probably about it.
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