Social Security is missing 1 Trillion

[thyme4change]

Best part is that my parents are too old to be baby boomers - so I think they are safe. The next people I have to worry about is moi! So, I should let my kids know that I intend to be a burden on them.

[handyman2]

If the US would just balance the budget and repay SS for all the bonds it is holding toward the national debt there would not be a problem. Many think China holds the biggest protion of our debt. Not so SS does.
But as long as there are so many out of work and not contributing then the problem will continue.

[djAdvocate]

Feb 3, 2012 16:22:13 GMT -5 @anne81 said:

The outlook for Social Security's trust fund has deteriorated to an astonishing degree over the past year, new Congressional Budget Office projections show.

time to raise the ceiling on SS and means test it.

[rockon]

Seriously SS should be the easiest thing in our budget to fix. It should be removed from the general fund and off limits to any over reaching politicians. The benefits determined, projections estimated, with holdings adjusted periodically as required and the problem would literally fixed forever.

[rockon]

Depends on how the benefits were determined. If the criteria was that it had to be sustainable then the benefits or with holdings would have to be adjusted to achieve that.

[rockon]

Afraid that's looong gooone..

[formerexpat]

That's ok... But if the baby boomers get out of this unscathed and leave the rest of us behind to clean up the mess, I will be upset.

2020 to 2025 - the year that Gen Y will become the largest voting block, depending on the severity of the situation. That's when the Boomers then begin getting fucked since they can't vote themselves the money that they have been giving themselves for the past 40 years.

Gen Y is just 13m smaller than the Boomers and the last of Gen Y will be 18 in 2018. The oldest of the Boomers is 66 now and will be 74 and 79 in 2020 and 2025, respectively.

It's just a numbers game - just like when the Boomers voted in politicians that massaged the SS numbers to adjust just so nicely not to affect them as materially as they're affecting Gen Y.

[formerexpat]

time to raise the ceiling on SS and means test it.

That's ridiculous. It's already welfare enough. No need to make it more so, to the point that you either further discourage savings or punish people by withholding 15% of their salary for life without nothing to show for it.

It's a fucking deferred annuity - not welfare.

[EVT1]

It is much more than that. I have been paying home and auto insurance for a long time and I don't have anything to show for it either if you want to look at it that way.

It is real easy for people who have done well to disparage SS, basically just Monday morning quarterbacking. The real test would be for people to opt in or out at 18- and that's it- before they know what life has in store for them. My guess is that maybe 1% will quickly opt out due to family wealth- everyone else will have to take a gamble- and no matter how smart you think you are that is what it would be if you opted out.

[Deleted]

There's nothing inherently wrong with borrowing from the SS fund as long as the cash is there when it is needed. The fund has to be invested in something, and Americans have made it quite clear that they don't want it invested in anything risky. So US gov't debt is about as low-risk as you can get (for now, anyway).

The problem with borrowing from the SS fund is that it means the gov't is going deeper into debt.

[zibazinski]

Sorry but when you were forced to contribute to ss and told you would collect and collect a certain amount based on your contributions, the govt has no right to means test or do anything else to it based on the fact that they stole from it and put people on it who have no business being on it.

[rockon]

Pretty much sums up my sentiment.

[formerexpat]

It is much more than that. I have been paying home and auto insurance for a long time and I don't have anything to show for it either if you want to look at it that way.

Not the same thing. In your example, you're paying a risk expense that an event may or may not happen over a given period of time.

For a deferred annuity, you are paying for a vehicle that will provide lifetime income during retirement.

Two completely different insurance products.

[formerexpat]

There's nothing inherently wrong with borrowing from the SS fund as long as the cash is there when it is needed. The fund has to be invested in something, and Americans have made it quite clear that they don't want it invested in anything risky. So US gov't debt is about as low-risk as you can get (for now, anyway).

The problem with borrowing from the SS fund is that it means the gov't is going deeper into debt.

Which is why people should be able to direct their own money into a deferred annuity or another type of regulated product that will benefit the citizens instead of fuck them over.

If benefits aren't cut, inflation will cut into the amount owed so it doesn't seem like it's as much.

[EVT1]

Social Security is insurance as well- it is just wrapped up into one item. I doubt there is even a private sector option that would have the kind of coverage SS provides.

[formerexpat]

It is real easy for people who have done well to disparage SS, basically just Monday morning quarterbacking. The real test would be for people to opt in or out at 18- and that's it- before they know what life has in store for them. My guess is that maybe 1% will quickly opt out due to family wealth- everyone else will have to take a gamble- and no matter how smart you think you are that is what it would be if you opted out.

I'm not even saying opt out - allow people to direct the money into separate accounts that cannot be raided [by the person or by government] and has enough regulation on it so it's not in risky investments that can cause a person to lose their shirt. You could come up with any number of conservative investing strategies for people to have. You could even allow people to buy their own deferred annuity through this account that would provide them with a lifetime income after retirement.

The market would give people so much more than the government.

[formerexpat]

Social Security is insurance as well- it is just wrapped up into one item. I doubt there is even a private sector option that would have the kind of coverage SS provides.

Which is precisely why it shouldn't be means tested. If you die, should an insurance company tell your spouse that they can't get the benefits because they already have enough wealth? The government have created another welfare system out of SS.

The like type product is a deferred annuity with disability policy - very simplistic product that is available to people now.

Not only are there options but the private industry does it much better; and are already heavily regulated by the NAIC.

Better to keep people stupid on the topic though; politicians like their power and like to continue to promise you your breadcrumbs while both sides fuck you behind your back.

[EVT1]

Australia has a good plan.

[formerexpat]

Australia has a good plan.

What is it, how is it structured and how does the country ensure the citizens aren't getting the shaft?

We used to have a segregated trust for SS. DC broke that segregation. SS used to also be a reserve based system to ensure financial integrity but that was also messed up by the government.

[formerexpat]

Because, of course, it's all my fault. [image]

Ever read the 4th turning?

Here are the generations - www.fourthturning.com/html/generations___archetypes.html

[Deleted]

Feb 3, 2012 22:07:08 GMT -5 zibazinski said:

Sorry but when you were forced to contribute to ss and told you would collect and collect a certain amount based on your contributions, the govt has no right to means test or do anything else to it based on the fact that they stole from it and put people on it who have no business being on it.

The demographics are changing. People are living longer. The first baby boomers are just five years from retirement and the birth rate is low. Today, there are 3.3 workers paying Social Security payroll taxes for every one person collecting Social Security benefits. That number will drop to 2 to 1 in less than 40 years. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.

Its math.

[Don Perignon]

Feb 3, 2012 22:06:01 GMT -5 @lonewolf said:

Feb 3, 2012 22:02:54 GMT -5 @investorbob said:

There's nothing inherently wrong with borrowing from the SS fund as long as the cash is there when it is needed. The fund has to be invested in something, and Americans have made it quite clear that they don't want it invested in anything risky. So US gov't debt is about as low-risk as you can get (for now, anyway).

The problem with borrowing from the SS fund is that it means the gov't is going deeper into debt.

It has to be invested in something? We would have been better off had we put it in tin cans and buried it.

Imagine if all that SS money had been invested in constructing and owning Nursing Homes and Assisted Living facilities... it could have made the Geriatrics racket self-sustaining (at the cost of squeezing out greedy private operators).

[Sum Dum Gai]

Imagine if all that SS money had been invested in constructing and owning Nursing Homes and Assisted Living facilities... it could have made the Geriatrics racket self-sustaining (at the cost of squeezing out greedy private operators).

Or we could use it to monetize inventions that come out of government funded R&D. If we're going to use government funds to invent the microchip, internet, satellites, etc., we might as well go whole hog and capitalize on them. Why let private industry make the trillions when we used tax money to create the stuff in the first place.

[Tennesseer]

Feb 3, 2012 23:39:09 GMT -5 @joey said:

Feb 3, 2012 22:07:08 GMT -5 zibazinski said:

Sorry but when you were forced to contribute to ss and told you would collect and collect a certain amount based on your contributions, the govt has no right to means test or do anything else to it based on the fact that they stole from it and put people on it who have no business being on it.

The demographics are changing. People are living longer. The first baby boomers are just five years from retirement and the birth rate is low. Today, there are 3.3 workers paying Social Security payroll taxes for every one person collecting Social Security benefits. That number will drop to 2 to 1 in less than 40 years. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.

Its math.

Baby boomers are already retiring and collecting SS.

[formerexpat]

There's nothing inherently wrong with borrowing from the SS fund as long as the cash is there when it is needed.

Sounds like Bernie Madoff...

[formerexpat]

The demographics are changing. People are living longer. The first baby boomers are just five years from retirement and the birth rate is low. Today, there are 3.3 workers paying Social Security payroll taxes for every one person collecting Social Security benefits. That number will drop to 2 to 1 in less than 40 years. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.

Its math.

are changing? They changed enough that the SOA recommended that the retirement age be increased up to 70 so that we wouldn't have to deal with cash flow issues in the SS trust in this decade.

It's actually written in a paper from the early 80's that this decade we would see issues if DC went ahead with their proposed changes that ended up being made in 1983.

They knew the issues would arise and kicked the can down the road so not to piss off their largest constituents. Fuck the boomers for not keeping the foxes out of the hen house. Gen Y isn't taking the shaft for this one.

[Sum Dum Gai]

It's actually written in a paper from the early 80's that this decade we would see issues if DC went ahead with their proposed changes that ended up being made in 1983.

Sort of. The changes made in 83 actually lengthened the time before the trust was depleted. The problem was that all the economists at the time said they didn't go far enough. We've basically known since the Boomers were in their 20s that SS couldn't handle their retirement.

[Sum Dum Gai]

Baby boomers are already retiring and collecting SS.

Yep, and more of them are taking early retirement than anyone planned since the economy is in the crapper and it's hard to find a job for somebody in their early 60s.

The earliest boomers are already 66. Some of them have already been collecting for a few years.

[cranberry49]

Feb 4, 2012 0:40:28 GMT -5 formerexpat said:

The demographics are changing. People are living longer. The first baby boomers are just five years from retirement and the birth rate is low. Today, there are 3.3 workers paying Social Security payroll taxes for every one person collecting Social Security benefits. That number will drop to 2 to 1 in less than 40 years. At this ratio there will not be enough workers to pay scheduled benefits at current tax rates.

Its math.

are changing? They changed enough that the SOA recommended that the retirement age be increased up to 70 so that we wouldn't have to deal with cash flow issues in the SS trust in this decade.

It's actually written in a paper from the early 80's that this decade we would see issues if DC went ahead with their proposed changes that ended up being made in 1983.

They knew the issues would arise and kicked the can down the road so not to piss off their largest constituents. Fuck the boomers for not keeping the foxes out of the hen house. Gen Y isn't taking the shaft for this one.

Wow! Angry much? Excuse me for living! WE as 'boomers' did our part and paid into the SS system. It's not OUR fault that the government didn't know/care what happened with the money that WE paid into. This is not welfare! This is money that we as citizens were forced to pay into and deserve to collect. You wanna get mad? Direct your anger at the right people, the greedy government that wastes' millions every year, and send just as much to other countries regardless of how well their own citizens are living. Thank you!

Carry on with your bad self....

[rockon]

Actually while it is correct that our government borrowed from this fund and without a doubt borrowed and spent recklessly for decades and gave in to political pressure from the liberals to extend benefits to many who were not intended to collect from this fund, it is also a fact that even though many boomers had to know the direction was wrong and unsustainable we allowed it to continue by voting the same two groups of thugs in year after year. We sold our children's future for todays benefit. The trend continues. Now they are selling theirs.