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And what is one to do if one's girlfriend turns into a boxcar with thirteen plastic wheels and three made out of Jello?
Nobody can answer your question "where do you think that the money will come from" because your question is premised on nonsense. Social Security is not going to be "terminated." The chance of this happening is zero.
One can pose any kind of a ill-premised question, I suppose, and then posture about the lack of an adequate answer in an attempt to spin an issue.
I agree with ^.
It's not going to be terminated no matter who sits the oval or control Congress, including a Tea party majority.
I have never understood the mindset of someone who expects to get their money back from Social Security. Statistically, people on average born 1950 and later will not get their money back. And that assumes that future generations are willing to pay higher level of taxes to support the system.
The extreme end of this mindset expects their money back even if Social Security is terminated. It makes me wonder if they understand the meaning of terminated. From where would the money come? Today the Trust Fund has 2.7 trillion. Without future payroll taxes, that is basically 2 cents on every promised dollar. Mind you, the promise is less than you contributed.
This is the type of response you get : "...and not just what I put into it; I'd also want the 45 years of interest it accrued, too, just like a rich, greedy banker would have to pay to use my money !!!..." Mind you the comments will get positive ratings of 10 to 1.
Seriously where do you think this money would come from?
I don't expect to get back the money I've payed into Social Security.
However, I am okay with that. It helped take care of my grandparents and many other people I knew in their generation. It has also helped take of some younger people in my family.
Apparently there are millions of others who rely on it.
It will pay me a little bit and that will of course be welcomed. Will I get back what I've paid in? Not likely. Regardless of that, I still think it has value as a safety net.
Why do people think money is some natural resource going extinct?
Our money is just a collective symbol of faith/credit in our system-backed by nothing but faith. Once citizens of the country are able to get control of their own currency/financial system from The Federal Reserve/global bankers we can begin to fix problems that are currently limited by a privately owned currency that is not controlled by the people and is allocated to colluding Banks and Corporations across the World.
Thanks for your thoughts. I would agree with much of what you are saying, but historically I am not sure that Social Security was suppose to take care of destitute seniors. The original act only covered workers - and 50% of the work force. The act which created Social Security as we know it provided for direct assistance to the destitute seniors.
The Social Security Act of 1935 covered some workers who had earned at least $2000 in lifetime earnings before the age of 65. This act excluded certain workers, agriculture and domestic workers, which, at the time, accounted for 50% of workers. Monthly payments were capped at $85 which is in the ballpark of current payments, adjusted for inflation.
A 1939 law added spouse benefits. A 1956 law added disability benefits.
If the Act was created to provide direct assistance to the most vulnerable and destitute, it made no sense that those on the bottom of the food chain, agriculture and domestic workers, were excluded from benefits.
Contrary to common perception, SS was designed as a transfer system from younger to older generations. In essence, we are not entitled to get money back because it was spent on our parents and grandparents.
Unlike other taxes, SS tax has been capped. A high income earner pays less as a percentage of AGI than a median or low income earner. A high income earner is also more likely to have only one earner per household than a median or low income earning household. Yet, the high income earner and non working spouse generally receive the same SS benefit as the median or low income earner.
There's also the timing difference. Those who retired in the 60's received, on average 8 X what they contributed. By the 80's new retirees received, on average, 5X what they contributed. That multiplier has been declining, all along.
When the number of kids per adult declines, society has to adjust. When the average life expectancy increases, society has to adjust.
Despite the obvious decline in the number of kids per adult and increased longevity, over time, payroll taxes were not adjusted. Instead, the can kept kicking forward and did so, regardless of who sat the oval or held the majority of Congress.
Just 6 years before the oldest of the baby boom would begin to turn 65, in 2005, the Bush Admin embarked on a major effort to privatize SS. It failed to reach a vote in the Republican controlled house and the Bush Admin abandoned it.
The plan did not remotely call for reducing or eliminating SS benefits going forward because that would have been political suicide and it was seniors who enabled Bush's second term. Instead, it simply sought to cut off new income resulting in SS being 100% deficit spending.
Your understanding of the system is fairly sound. I am mainly interested in hearing people who think that they not only are entitle to their money back, but expect it back whether SS survives or not.
SS is financed by contribution. It is dicey to call that a tax because it creates a private revenue stream in the future. When you give money in exchange for the promise of future payments it is a loan not a tax. The return on that contribution is significantly lower for high-wage earners. Social Security is collectively a very progressive system.
The overpayment of early retirees is a massive problem. This is why statistically current workers will not get their money back.
Bush's plan called for the financing of Social Security to change. His plan would have made payroll taxes partially funding for a private account, and switch the existing retirees draw benefits financed by the general taxpayer. The high cost of the plan was going to be very difficult to explain to taxpayers.
I have never understood the mindset of someone who expects to get their money back from Social Security. Statistically, people on average born 1950 and later will not get their money back. And that assumes that future generations are willing to pay higher level of taxes to support the system.
The extreme end of this mindset expects their money back even if Social Security is terminated. It makes me wonder if they understand the meaning of terminated. From where would the money come? Today the Trust Fund has 2.7 trillion. Without future payroll taxes, that is basically 2 cents on every promised dollar. Mind you, the promise is less than you contributed.
This is the type of response you get : "...and not just what I put into it; I'd also want the 45 years of interest it accrued, too, just like a rich, greedy banker would have to pay to use my money !!!..." Mind you the comments will get positive ratings of 10 to 1.
Seriously where do you think this money would come from?
Wait...Based on your math, we are expected to pay out 135 trillion in ss benefits? Over how long a period? That's roughly 900% of GDP, and 3500% of the total annual budget...That math doesn't sound correct to me at all.
Last edited by MaxwellThomas; 04-16-2014 at 10:43 AM..
The Social Security Act of 1935 covered some workers who had earned at least $2000 in lifetime earnings before the age of 65. This act excluded certain workers, agriculture and domestic workers, which, at the time, accounted for 50% of workers. Monthly payments were capped at $85 which is in the ballpark of current payments, adjusted for inflation.
A 1939 law added spouse benefits. A 1956 law added disability benefits.
If the Act was created to provide direct assistance to the most vulnerable and destitute, it made no sense that those on the bottom of the food chain, agriculture and domestic workers, were excluded from benefits.
This is mostly consistent with my understanding of the law. The other big expansion of the system was in 1950 which added another 25% of the work force.
I don't think that $85 inflation adjusted is near the current $2500 limit. But this is the problem with financing, as you take in a dollar the system has to make promises for more than a dollar. Your previous statistics suggest that in order to pay the original claimients the system promised $5 of benefits for every one dollar collected. So benefit levels have to rise in real terms.
Wait...Based on your math, we are expected to pay out 135 trillion in ss benefits? Over how long a period? That's roughly 900% of GDP, and 3500% of the total annual budget...That math doesn't sound correct to me at all.
The figure $134 trillion dollars is the present value of future SS payments over the next 75 years. The payments are largely due for revenue that has been collected. Another way to look at this is the system is short about $10 trillion dollars of 75 year solvency - assuming that we continue to collect 12.4% of wages. Here is another way to look at it, without payroll taxes Social Security could pay full benefits for about 3 1/2 years. In this case we are going to deny any benefits to people who have contributed and qualify. When I talk about pennies on the dollar it treats all beneficiaries future and present as equal.
Anyway that you slice it, the Trust Fund isn't going to pay to give you your money back. I am curious why people think it would.
The party that even dreams of doing such a thing would be drummed out of existence.
The exact quote is :
"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. "
~ Eisenhower
At the time, Social Security rewarded voters with an expectation of benefits far in excess of cost. Today the system all but guarantees you a losing return - and that assumes that you collect.
Last year, the system collected $840 billion in revenue, and issued $3 trillion of promises for which there is no money. Times have changed.
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