Social Security today

[Broad Street]

Hey all.

 

As most of you know (maybe not the younger folks), Social Security was started in 1935 by Franklin D. Roosevelt to help elderly citizens during the Great Depression. It wasn't originally planned to have lasted this long, yet still it stands. Just another tax the government is pulling out of your paycheck. I've heard arguments of all kinds about Social Security and the effect it's having on our national debt, but what's your thoughts? Do you think it should be discontinued and people should plan better for their future by having more in their savings? Do you think it's just fine the way it is? Or do you feel like it needs to be adjusted with the increasing inflation rates and/or people working later in life?

 

Discuss.

[Jason]

Lol at people saving money and being responsible for their futures. I personally do without the flashier things now and save my money for when I'm retired. I don't see how the current system will still be able to function when it come time for me to retire (15+ years)

[Lhalo]

$16 trillion in the red. End it.

[Glen]

$16 trillion in the red. End it.

 

 

 

I'd like to know where you got that figure from.

[Lhalo]

http://www.usdebtclock.org/

 

bottom left

[Glen]

That certainly looks trustworthy, a chart with no explanation.  I wonder how that figure was derived.

[Glen]

http://www.nytimes.com/2013/01/06/opinion/sunday/social-security-its-worse-than-you-think.html?_r=0

 

 

For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.

[Lhalo]

That certainly looks trustworthy, a chart with no explanation.  I wonder how that figure was derived.

Hover over the "Social Security Liabilty" running number with your cursor and an explanation is given at the top of the chart.

 

Do I have to hold your hand all the time? Gosh.

[Glen]

I couldn't see that because of screen size, but I checked it out.  After finding a way to see it...I'm sticking with my cynicism.  Try to find any info about usdebtclock.org, as in who runs it, where the figures come from, how trustworthy it is, etc.  I may have to hold you hand for this, but I'll let you try it on your own first.

 

But hey, it looks all pretty with the changing numbers and colors!  It has to be accurate.

[Lhalo]

http://www.nytimes.com/2013/01/06/opinion/sunday/social-security-its-worse-than-you-think.html?_r=0

 

 

For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.

I'm confused, are you arguing with me or agreeing with me?

[Catwhoshatinthehat]

I'm sure at some point it will end up being means tested and people who didn't live high on the hog or even make much will end up not getting much out of it because they were responsible and saved.  Whatever they do I hope it doesn't involve raising the contribution rate or removing the income limit.  For now I'd rather see them start to move back the retirement age with people living longer which would impact younger generations (mine) more because no one is going to take on the boomers or other older generations and try to "take" money away from them.   

[Glen]

I'm confused, are you arguing with me or agreeing with me?

 

 

 

I'm disagreeing with the $16 trillion number.  And the quote I provided says SS won't be insolvent for at least another 20 years.  I hope that clears up the confusion,

[Lhalo]

The $16 trillion is an unfunded liability meaning that the government has promised to pay more than it has. Social Security may not be insolvent at the present time but the government has promised it will be.

[HaloMagic]

Promising to pay more than you have isn't a sign of insolvency. If you expect revenue then you'll get money. Does the $16 trillion include the promises of revenue they will receive? It looks like we have 20 years to figure out how to make it solvent after 2033. That doesn't sound like an emergency to me.

[angelduck]

It's all these people playing the system that ruin it for the hardworking taxpayers. Those people disgust me.

[Ray McKigney]

If we could somehow find a way to get rid of all senior citizens then this wouldn't be an issue.

[Lhalo]

Does the $16 trillion include the promises of revenue they will receive?

Yes.

 

Social Security Liability is based on current Tax and Funding inputs and on projections using these assumptions, and future demographic shifts in the US population.

 

Source: Federal Reserve

 

It looks like we have 20 years to figure out how to make it solvent after 2033. That doesn't sound like an emergency to me.

I don't think anybody really said it was an emergency.

 

This is how I view it: Social Security is a giant Ponzi scheme that requires new customers (tax payers) in order to fund the current clientele (people over 65). Without a constant influx of new customers spending their money the system collapses. I fully expect the government to raise taxes in order to compensate for lack of income and I also fully expect that I will not see my "fair share" of Social Security checks. In fact I'm more inclined to believe there will be no Social Security by the time I turn 65 which is well past the year 2033 (the year SS runs out of money according to Tin's article).

 

It's just my opinion and I'm sure there are plenty on here that disagree. I'd love to hear other's thoughts on the matter.

[arch stanton]

Social Security has survived for 78 years.The article does not say it runs out of money in 2033. It says it loses its buffer. I don't see why it can't last indefinitely. If it needs tweaks then make the tweaks. 

[floplag]

end it, as soon as you pay back the money ive put into it, sure.

why does that just get taken from me and written off?

[IEAngelsfan]

If we could somehow find a way to get rid of all senior citizens then this wouldn't be an issue.

Yeah, there was a movie that provided a solution back in the 70's.  It was called Soylent Green.

[Ray McKigney]

Yeah, there was a movie that provided a solution back in the 70's.  It was called Soylent Green.

 

Soylent green is old people!

[mrwicked]

I'm sure at some point it will end up being means tested and people who didn't live high on the hog or even make much will end up not getting much out of it because they were responsible and saved.  Whatever they do I hope it doesn't involve raising the contribution rate or removing the income limit.  For now I'd rather see them start to move back the retirement age with people living longer which would impact younger generations (mine) more because no one is going to take on the boomers or other older generations and try to "take" money away from them.   

 

yeah there is no way they remove the income limit.

that is pure and simple siphoning of wealth, especially if they don't also remove the cap on benefits at the same time.

then it's just welfare.

[Vegas Halo Fan]

Yeah, there was a movie that provided a solution back in the 70's.  It was called Soylent Green.

 

Don't forget Logan's Run, in which everyone in the population was killed when they reached age 30.

[Tank]

end it, as soon as you pay back the money ive put into it, sure.

why does that just get taken from me and written off?

Exactly. I've been paying into the system for 29 years. I expect my money to be returned to me. After that happens do whatever you like.

[EE_]

Exactly. I've been paying into the system for 29 years. I expect my money to be returned to me. After that happens do whatever you like.

 

 

Greenspan: "We can guarantee cash benefits as far out and whatever size you like. But we cannot guarantee their purchasing power."

 

 

With $85B a month of newly created money being dumped into the economy I think we will soon see what Greenspan was talking about. Sure, not all the money created since 2008 (about $3T) has been put into circulation yet, but that is only a matter of time. The status of the dollar as the world's reserve currency is a big part of why the effects of that inflation has been so slow to show up. The merchant in Sri Lanka or the whore in Thailand who accept dollars are getting screwed just as much as anybody in America. She has no idea that she just got f*cked twice. When the world no longer supports the dollar as a reserve currency it won't have that buffer. China has been accumulating massive quantities of gold for 4 years in a row- about a 1000 tons per year. If they chose to offer a gold backed yuan it would hasten the transition.

 

​People have been indoctrinated with the Keynesian bullcrap that some inflation is necessary and even good.

Between 1800 and 1900 there was more than 100% deflation. The value of the dollar more than doubled. $1 would buy slightly more than twice the goods in 1900 as it did in 1800. Nobody took half of the monetary base out of existence. The healthy deflation was due to huge increases in productivity during that century.

 

So how did the purchasing power change in the 20th century? Despite continued increases in productivity the $1 in 1800 that bought $2.04 in goods by 1900 now only bought 8 cents of goods by 2008. Thanks Federal Reserve!

 

Inflation has always been the most insidious of taxes. Double everyone's taxes and they will riot in the streets. Debase their currency and they'll blame the greedy farmer or gas station guy. It's not just a confiscation on earnings like income tax, it's a confiscation of existing wealth for people who have bank accounts and 401ks in addition to social security. The elite hold commodities, not cash. 

 

Hyperinflation is Bernanke's last play. Who the hell is going to keep funding our ever expanding debt when it is obvious that the FED must use inflation just to avoid default. Does anyone really believe that QE is "stimulus"? Paying one credit card with another. Would you buy a 10 year Treasury bond with damn near zero yield (1.84%) when the FED is actively debasing the currency?  You can get an inflation adjusted bond (using the dubious CPI) that actually gives negative yield. Here, use my money for 10 years and then give me back less than what I started with. This shit is going down. If anyone thinks they can keep up this ponzi scheme for very much longer is naive.