Anonymous
08/21/2016 18:00
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Increase immigration.
This just kicks the down down the road, don't ya think/.?
Anonymous
08/21/2016 17:07
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:P?S., good luck on your trip!
Thank you! Maybe I'll come back with a new client or two and will be able to pay even MORE into SS (and taxes in general).
I'll check the pages when I get back. Thanks for steering me in the right direction.
Anonymous
08/21/2016 16:44
Subject: What Would You Be Willing to Do to Save SS?
P?S., good luck on your trip!
Anonymous
08/21/2016 16:43
Subject: What Would You Be Willing to Do to Save SS?
PP with the SSA solvency estimates here. Glad you found these useful! I'm sorry the links didn't work, I'm not sure why. You can find them yourself if you go do www.ssa.gov, find the SSA Actuaries page, and click on "provisions" in the left hand bar.
I agree that we'd need to add a few more provisions into the mix to close all of the gap. So means testing, changing the COLA, changing the benefit formula... there are quite a few choices and the Provisions page scores many of them. To toss in another wrench, you'd probably want more than 100%.
I also agree that if both sides want to find compromise, they will. As you can see from this thread, there are some people who just want the system to go away and don't want any compromises that would keep it working. But look at what happened to the SS disability program last year. It was projected to run out of assets this year and there were all sorts of dire threats and warnings about how compromise was impossible. But in the end... Congress quietly rearranged for full funding for the next few years, with only some token changes to the SSDI program. I'm not saying SS might not need or end up with some more serious changes, but I think political compromise is definitely possible.
Lots of people who work on SS like to say that they're glad they do SS and not Medicare, where the financing problems are more intractable. It's also common among researchers on the issue to say that a handful of bipartisan people could hammer out a solution in a few hours in a smoke-filled room.
I have people coming over for dinner, got to run!
I agree that we'd need to add a few more provisions into the mix to close all of the gap. So means testing, changing the COLA, changing the benefit formula... there are quite a few choices and the Provisions page scores many of them. To toss in another wrench, you'd probably want more than 100%.
I also agree that if both sides want to find compromise, they will. As you can see from this thread, there are some people who just want the system to go away and don't want any compromises that would keep it working. But look at what happened to the SS disability program last year. It was projected to run out of assets this year and there were all sorts of dire threats and warnings about how compromise was impossible. But in the end... Congress quietly rearranged for full funding for the next few years, with only some token changes to the SSDI program. I'm not saying SS might not need or end up with some more serious changes, but I think political compromise is definitely possible.
Lots of people who work on SS like to say that they're glad they do SS and not Medicare, where the financing problems are more intractable. It's also common among researchers on the issue to say that a handful of bipartisan people could hammer out a solution in a few hours in a smoke-filled room.
I have people coming over for dinner, got to run!
Anonymous
08/21/2016 16:26
Subject: Re:What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:
Hi PP....thanks for your insights. (I'm curious if you work with the SS program since you are obviously so knowledgeable.)
1. FWIW, I'm a moderate conservative and feel strongly, as you've noted, that changes to SS need to be a balance of tax increases (on the higher income via the cap adjustment) and a reduction of benefits (via a delay of one year for full retirement benefits). It's true, though, that those who do physical labor would find the latter difficult, if not impossible, and I have no idea how to allow for that. (Having two different "start dates" depending on class of labor or even average wages would not be politically feasible, IMO.)
2. Re the Increased benefits for those who pay more as a consequence of raising the cap, wouldn't that defeat the purpose to a large extent? If we collect more from the higher earners, only to return it in the form of increased benefits, wouldn't that be a wash? (Although I suppose there is room for negotiation here, too. Maybe return somewhat higher benefits by not so much as to offset the higher contribution totally?)
3. I'm unaware of the issue with the cap covering 90% of aggregate wages, but if historically this has been the case and we've "slipped" due to rising inequality, that seems like a politically palatable way to present the cap increase.
4. Finally, while SS needs to be "fixed" and I am very interested in how to accomplish this (I have no particular role other than a concerned citizen), a big problem is that many people have come to rely upon the program as their sole plan for retirement when it was always intended as just one leg of the stool - the others being pensions and savings. Pensions have largely disappeared (for the private sector), and savings are alarmingly low. While the difficulty in saving is apparent among the lower-income, there are far too many people in the UM brackets who spend right up to their means (or beyond!), and give no priority to savings. The WP had a survey recently showing that among those earning $100k plus, fully 20% could not come up with $400 for an emergency (or would have a challenge doing so).
Again, PP, thanks for all the information. I'll look forward to the solvency info, but if you don't hear back from me right away, it's because I have a "day" planned. I will check out any additional postings from you when I get back.
Hi PP, I'm back. Most of the intervening posts since I left were not mine, except for swatting away some rudely presented ignorance just now. People are certainly entitled to their opinions, but they aren't entitled to remain in ignorance. That said, some of the other intervening opinions were quite well informed too, however they're not necessarily the same as my personal opinions.
In answer to your questions,
1. I don't work directly on SS. I work on retirement issues writ large, although that obviously includes Social Security. I don't work for the government, and I've certainly never worked for SSA.
2. Paying benefits to people who pay more as a result of raising the cap does in fact raise net income. This is because of the benefit formula. People at the upper end of the benefit formula basically get a 15% rate on their additional earnings dollars. So their increase in total benefits is going to be lower than what they pay in. It's not a completely fair deal for people who earn above the current cap, obviously. But in the spirit of compromise, they do get something more. Just not a whole lot more.
3. Yes, the argument for 90% is often presented as being politically palatable, and lots of people use that argument.
4. You're absolutely correct that lots of people don't save enough for a rainy day, let alone for retirement. That's why some are suggesting mandatory saving through your employer in the form of these state-run auto-IRAs. You're right, that only 2/3 of people work for employers who offered 401(k)s, and not all participate, and very few save enough. People really don't save unless it's taken out of their paychecks. In fact, there's even more economic theory about how to nudge people to save more within their 401(k)s. But worse, for the people who don't get offered 401(k)s by their employers, if you tell them nicely that they should start IRAs, they don't. As you say.
So on to solvency. The first thing you need to know, although you may already know, is that SS solvency is presented in terms of "percent of taxable payroll." Taxable payroll is basically Social Security's tax base, i.e. the FICA tax * wages subject to FICA. The 75-year financial shortfall, according to the Trustees' most recent projections, is 2.66% of taxable payroll.
So 2.66% of taxable payroll is the gap that needs to be filled. Generally people talk in terms of "what percent of the shortfall" any given proposal or package would fill.
So now you're ready. SSA estimates individual provisions and also packages. Here are all the estimates for individual provisions that they've done recently: https://www.ssa.gov/oact/solvency/provisions/index.html. It's a little daunting because they do estimates for a wide range of phase-in dates, combinations involving donuts and alternative payroll tax rates, and so on.
Let's take raising the retirement age. If you (a) click on "C. Retirement age" and then (b) on the first item (C1.1), and then (c) you click on "Summary Measures and Graphs", you end up here: https://www.ssa.gov/oact/solvency/provisions/charts/chart_run191.html. What you want are the columns headed "Change from Present Law: long-range actuarial balance" and "Shortfall eliminated: long-range actuarial balance." The "long-range actuarial balance" is simply 2.66, the pct of payroll that represents the 75-year shortfall. The Change from Present Law is 0.36, and that's the . If you prefer to think of this in terms of the percent of the financing gap that's closed, then you can look at the "Shortfall eliminated" column, which reads 13% (i.e. 0.36/2.66). And that's your answer for this provision. Raising the Retirement Age by 1 year, from 67 to 68, closes 13% of the 75-year financing shortfall.
Let's look at a version with more impact. I don't know what appeals to you. But how about we take C1.4, raising the retirement age to 69 and then indexing it to changing longevity (that part about raising the retirement age 1 month every 2 years). Click on Summary Measures and Graphs for this provision, and you'll see it closes 40% of the financing shortfall. That's more like it. Also, indexing the retirement age to changing longevity makes intuitive sense and has a lot of political appeal to many people (again, if we can get over the problem of people who can't keep working).
If you move on over to the payroll tax options (group E), you'll see that the options for raising the cap have very different impacts depending on whether you want to pay slightly higher benefits to people who pay more taxes, whether you have a donut hole, and whether you apply the same 12.4% tax rate to wages/salaries above the current cap vs. a lower rate. The simplest illustrative comparison seems to be between E2.1 and E2.2, both of which would eliminate the current cap in 2016 and apply the full 12.4% FICA tax to earnings above that level. E2.1 wouldn't pay benefits on new tax payments and closes 88% of the 75-year shortfall. E2.2 would pay benefits on new tax payments and closes 71% of the 75-year shortfall.
But as you and I discussed, maybe returning to the historical 90% coverage ratio is more palatable politically. In that case you'd look at E3.1 (return to 90% and pay benefits on the additional taxes), which closes 29% of the shortfall. Or maybe E3.2 (return to 90% but don't pay benefits on the additional taxes), which closes 37% of the shortfall.
So you can play with these, and see what variations and phase-ins appeal to you.
Another thing to keep in mind is that some of these provisions have interactions with other, which aren't captured by the individual estimates. So if you raise the retirement age so people work longer, AND you lift the cap, you're going to have a group of higher income people who are working longer AND paying more FICA taxes. The individual provision estimates don't capture these interactions.
As you can see, this gets really weedy. That's why the American Academy of Actuaries' game, which I linked to last night, is more accessible to many people. But if you're up for going through SSA's projections to find the package you like, then major props to you.
Hope that helps.
Wow. (OP here.) Thanks again for taking the time and trouble to outline all this. It IS a bit weedy, but it does show that we can indeed fix the SS program - or at least significantly close the gap so that concerns of insolvency are pushed very far into the future - with one or two manageable adjustments. The challenge, of course, is getting some type of consensus, which, in the current political climate, seems less likely than ever. But I digress....
The links you provided did not work for me, but I could follow along just based on your descriptions. (I'm prepping for a business trip and can't devote as much attention to this right now, but when I get back I'll see if I can find the pages and play around with the different variables.) I was particularly struck that we could eliminate the cap but still pay benefits on the added contribution, and in doing so close 71% of the 75-year shortfall. (I also understand that the benefit "return," to use lay language, is only 15% at that level, so it becomes even more progressive. The high earners are bound to squalk - or at least a significant percentage of them.)
That's why I also like the idea of extending the age of full retirement. I know it's a problem for the "laboring class" (geez....do I sound elitist or what?), but to make the whole thing palatable, I think we need to approach this from a perspective of "shared burden." I see that raising the age one year to 68 closes the gap by 13%. Eliminating the cap makes more of an impact, clearly, but it just seems more equitable to do it this way, and gradually, as you point out. Pushung it up a second year, to 69, of course makes more of an impact, but I wouldn't think that's the way to go. Even more difficult for the blue-collar workers, and just too much of a burden. But maybe one year, maybe.....
And the 90% coverage, while politically the easiest to get through, doesn't seem to close the gap enough. But knowing how things work in Washington, perhaps the powers-that-be could compromise on that and at least slow down the pace of approaching insolvency.
Again, I will definitely try to locate the pages you linked to (and certainly explore the Actuaries "game" from last evening) when I can do them justice but for now, business priorities beckon. Got to keep contributing to SS, after all! (And I'm self-employed, so I oay both halves.)
All that said, I've enjoyed this exchange. My work is far, far removed from economics or statistics, so analysis of SS "adjustments" doesn't play to my strengths, but I think I can muddle through. On a personal note, I've enjoyed talking about policy in a mature manner given some of the childish antics I've seen elsewhere on this forum. It has been a pleasure.
Thanks again for all the insights and tools.
Anonymous
08/21/2016 16:24
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:[quote=Anonymous]You guys are way down in the weeds. The thing is insolvent and you're arguing about mowing the lawn while the house is on fire.
Well put. Most people don't realize they are paying into a system that doesn't exist. there is no real set-aside for you anywhere in the federal system. The money you put into FICA doesn't exist. It's all an IOU - one that can be taken away at will by the democrats - just as Frank Underwood did in House of Cards. It is the ultimate in Ponzi schemes
This was explained earlier, go back and read it. Even Greenspan agrees the trust funds are solid. If you think the dems are going to destroy SS' investments (to do this, they'd have to formally repudiate the debt in question), you live in an alternative universe. Similarly, finding the general revenues to redeem the debt held by SS is the Dems' first priority, way ahead of things like military spending. It seems to be the Reps' first priority too...just look how SS was the catalyst for agreement in several recent debt crises.
House of Cards is Hollywood. It's a great show, but his America Works plan was ridiculous. In what universe does a plan consist of the government paying workers $45,000 apiece to work? Like the whole country is on the government payroll. I bet you'd hate that, and I would too. Don't confuse Hillywood with real life.
Anonymous
08/21/2016 16:14
Subject: What Would You Be Willing to Do to Save SS?
[quote=Anonymous]You guys are way down in the weeds. The thing is insolvent and you're arguing about mowing the lawn while the house is on fire.
Well put. Most people don't realize they are paying into a system that doesn't exist. there is no real set-aside for you anywhere in the federal system. The money you put into FICA doesn't exist. It's all an IOU - one that can be taken away at will by the democrats - just as Frank Underwood did in House of Cards. It is the ultimate in Ponzi schemes
Anonymous
08/21/2016 15:59
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I think I would stop the ability to claim SS if you've never paid in.
Who gets SS if they don't pay in? I thought you had to have 40 quarters of earning, and the benefit is figured in your top 35 years.
DH grandma got SS for decades after her husband died. She never worked a job a day in her life. I'm certain she was not a citizen but drew a check for almost 50 years.
Another solution is to get rid of SS and let your parents move in with you. Wonder if obnoxious PP is down with that.
Actually she lived with one daughter in Greece most of the year and another daughter in Silver Spring the rest of the time. So, yeah... Her family was down with that.
But she didn't live with you? Why is that? Well OK, but I think I can hear the shrieks of anguish starting already from other families around the country. I know plenty of people who would gladly pay SS taxes to keep their parents in separate living arrangements.
She didn't live with me because she died while DH (and most of her grandchildren) were still in college. I'm not sure the dorms at Hopkins would accommodate his elderly grandmother living with him. Also, she had 12 children, all of whom would have been happy to have her live with them. She didn't lack any family to care for her and she never went to a nursing home. Her husband died of pancreatic cancer as a relatively young man. My MIL lives with my SIL most of the time and she stays with us during the summer when my son is home and available to help her out. My FIL died in November, rather suddenly. My parents are able-bodied at the moment, but we have an apartment for them set up in our home so they can use it when the time comes.
Anonymous
08/21/2016 15:02
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I think I would stop the ability to claim SS if you've never paid in.
Who gets SS if they don't pay in? I thought you had to have 40 quarters of earning, and the benefit is figured in your top 35 years.
DH grandma got SS for decades after her husband died. She never worked a job a day in her life. I'm certain she was not a citizen but drew a check for almost 50 years.
Another solution is to get rid of SS and let your parents move in with you. Wonder if obnoxious PP is down with that.
You mean like the norm in much of the world and for most of human history? Families sticking together--what a novel concept.
The norm for most of history is that the average life expectancy was under 40 and you worked until you dropped. If you were lucky enough to live to old age, then sure you family would take care of you, knowing you probably only had a few years left at most anyway.
Correct. If you were lucky enough to live to 65, then on average you lived another 6 years.
Anonymous
08/21/2016 14:58
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I think I would stop the ability to claim SS if you've never paid in.
Who gets SS if they don't pay in? I thought you had to have 40 quarters of earning, and the benefit is figured in your top 35 years.
DH grandma got SS for decades after her husband died. She never worked a job a day in her life. I'm certain she was not a citizen but drew a check for almost 50 years.
Another solution is to get rid of SS and let your parents move in with you. Wonder if obnoxious PP is down with that.
Actually she lived with one daughter in Greece most of the year and another daughter in Silver Spring the rest of the time. So, yeah... Her family was down with that.
But she didn't live with you? Why is that? Well OK, but I think I can hear the shrieks of anguish starting already from other families around the country. I know plenty of people who would gladly pay SS taxes to keep their parents in separate living arrangements.
Anonymous
08/21/2016 14:47
Subject: Re:What Would You Be Willing to Do to Save SS?
Anonymous wrote:
Hi PP....thanks for your insights. (I'm curious if you work with the SS program since you are obviously so knowledgeable.)
1. FWIW, I'm a moderate conservative and feel strongly, as you've noted, that changes to SS need to be a balance of tax increases (on the higher income via the cap adjustment) and a reduction of benefits (via a delay of one year for full retirement benefits). It's true, though, that those who do physical labor would find the latter difficult, if not impossible, and I have no idea how to allow for that. (Having two different "start dates" depending on class of labor or even average wages would not be politically feasible, IMO.)
2. Re the Increased benefits for those who pay more as a consequence of raising the cap, wouldn't that defeat the purpose to a large extent? If we collect more from the higher earners, only to return it in the form of increased benefits, wouldn't that be a wash? (Although I suppose there is room for negotiation here, too. Maybe return somewhat higher benefits by not so much as to offset the higher contribution totally?)
3. I'm unaware of the issue with the cap covering 90% of aggregate wages, but if historically this has been the case and we've "slipped" due to rising inequality, that seems like a politically palatable way to present the cap increase.
4. Finally, while SS needs to be "fixed" and I am very interested in how to accomplish this (I have no particular role other than a concerned citizen), a big problem is that many people have come to rely upon the program as their sole plan for retirement when it was always intended as just one leg of the stool - the others being pensions and savings. Pensions have largely disappeared (for the private sector), and savings are alarmingly low. While the difficulty in saving is apparent among the lower-income, there are far too many people in the UM brackets who spend right up to their means (or beyond!), and give no priority to savings. The WP had a survey recently showing that among those earning $100k plus, fully 20% could not come up with $400 for an emergency (or would have a challenge doing so).
Again, PP, thanks for all the information. I'll look forward to the solvency info, but if you don't hear back from me right away, it's because I have a "day" planned. I will check out any additional postings from you when I get back.
Hi PP, I'm back. Most of the intervening posts since I left were not mine, except for swatting away some rudely presented ignorance just now. People are certainly entitled to their opinions, but they aren't entitled to remain in ignorance. That said, some of the other intervening opinions were quite well informed too, however they're not necessarily the same as my personal opinions.
In answer to your questions,
1. I don't work directly on SS. I work on retirement issues writ large, although that obviously includes Social Security. I don't work for the government, and I've certainly never worked for SSA.
2. Paying benefits to people who pay more as a result of raising the cap does in fact raise net income. This is because of the benefit formula. People at the upper end of the benefit formula basically get a 15% rate on their additional earnings dollars. So their increase in total benefits is going to be lower than what they pay in. It's not a completely fair deal for people who earn above the current cap, obviously. But in the spirit of compromise, they do get something more. Just not a whole lot more.
3. Yes, the argument for 90% is often presented as being politically palatable, and lots of people use that argument.
4. You're absolutely correct that lots of people don't save enough for a rainy day, let alone for retirement. That's why some are suggesting mandatory saving through your employer in the form of these state-run auto-IRAs. You're right, that only 2/3 of people work for employers who offered 401(k)s, and not all participate, and very few save enough. People really don't save unless it's taken out of their paychecks. In fact, there's even more economic theory about how to nudge people to save more within their 401(k)s. But worse, for the people who don't get offered 401(k)s by their employers, if you tell them nicely that they should start IRAs, they don't. As you say.
So on to solvency. The first thing you need to know, although you may already know, is that SS solvency is presented in terms of "percent of taxable payroll." Taxable payroll is basically Social Security's tax base, i.e. the FICA tax * wages subject to FICA. The 75-year financial shortfall, according to the Trustees' most recent projections, is 2.66% of taxable payroll.
So 2.66% of taxable payroll is the gap that needs to be filled. Generally people talk in terms of "what percent of the shortfall" any given proposal or package would fill.
So now you're ready. SSA estimates individual provisions and also packages. Here are all the estimates for individual provisions that they've done recently: https://www.ssa.gov/oact/solvency/provisions/index.html. It's a little daunting because they do estimates for a wide range of phase-in dates, combinations involving donuts and alternative payroll tax rates, and so on.
Let's take raising the retirement age. If you (a) click on "C. Retirement age" and then (b) on the first item (C1.1), and then (c) you click on "Summary Measures and Graphs", you end up here: https://www.ssa.gov/oact/solvency/provisions/charts/chart_run191.html. What you want are the columns headed "Change from Present Law: long-range actuarial balance" and "Shortfall eliminated: long-range actuarial balance." The "long-range actuarial balance" is simply 2.66, the pct of payroll that represents the 75-year shortfall. The Change from Present Law is 0.36, and that's the . If you prefer to think of this in terms of the percent of the financing gap that's closed, then you can look at the "Shortfall eliminated" column, which reads 13% (i.e. 0.36/2.66). And that's your answer for this provision. Raising the Retirement Age by 1 year, from 67 to 68, closes 13% of the 75-year financing shortfall.
Let's look at a version with more impact. I don't know what appeals to you. But how about we take C1.4, raising the retirement age to 69 and then indexing it to changing longevity (that part about raising the retirement age 1 month every 2 years). Click on Summary Measures and Graphs for this provision, and you'll see it closes 40% of the financing shortfall. That's more like it. Also, indexing the retirement age to changing longevity makes intuitive sense and has a lot of political appeal to many people (again, if we can get over the problem of people who can't keep working).
If you move on over to the payroll tax options (group E), you'll see that the options for raising the cap have very different impacts depending on whether you want to pay slightly higher benefits to people who pay more taxes, whether you have a donut hole, and whether you apply the same 12.4% tax rate to wages/salaries above the current cap vs. a lower rate. The simplest illustrative comparison seems to be between E2.1 and E2.2, both of which would eliminate the current cap in 2016 and apply the full 12.4% FICA tax to earnings above that level. E2.1 wouldn't pay benefits on new tax payments and closes 88% of the 75-year shortfall. E2.2 would pay benefits on new tax payments and closes 71% of the 75-year shortfall.
But as you and I discussed, maybe returning to the historical 90% coverage ratio is more palatable politically. In that case you'd look at E3.1 (return to 90% and pay benefits on the additional taxes), which closes 29% of the shortfall. Or maybe E3.2 (return to 90% but don't pay benefits on the additional taxes), which closes 37% of the shortfall.
So you can play with these, and see what variations and phase-ins appeal to you.
Another thing to keep in mind is that some of these provisions have interactions with other, which aren't captured by the individual estimates. So if you raise the retirement age so people work longer, AND you lift the cap, you're going to have a group of higher income people who are working longer AND paying more FICA taxes. The individual provision estimates don't capture these interactions.
As you can see, this gets really weedy. That's why the American Academy of Actuaries' game, which I linked to last night, is more accessible to many people. But if you're up for going through SSA's projections to find the package you like, then major props to you.
Hope that helps.
Anonymous
08/21/2016 14:39
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I think I would stop the ability to claim SS if you've never paid in.
Who gets SS if they don't pay in? I thought you had to have 40 quarters of earning, and the benefit is figured in your top 35 years.
DH grandma got SS for decades after her husband died. She never worked a job a day in her life. I'm certain she was not a citizen but drew a check for almost 50 years.
Another solution is to get rid of SS and let your parents move in with you. Wonder if obnoxious PP is down with that.
You mean like the norm in much of the world and for most of human history? Families sticking together--what a novel concept.
The norm for most of history is that the average life expectancy was under 40 and you worked until you dropped. If you were lucky enough to live to old age, then sure you family would take care of you, knowing you probably only had a few years left at most anyway.
Anonymous
08/21/2016 14:32
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I think I would stop the ability to claim SS if you've never paid in.
Who gets SS if they don't pay in? I thought you had to have 40 quarters of earning, and the benefit is figured in your top 35 years.
DH grandma got SS for decades after her husband died. She never worked a job a day in her life. I'm certain she was not a citizen but drew a check for almost 50 years.
Another solution is to get rid of SS and let your parents move in with you. Wonder if obnoxious PP is down with that.
Actually she lived with one daughter in Greece most of the year and another daughter in Silver Spring the rest of the time. So, yeah... Her family was down with that.
Anonymous
08/21/2016 13:54
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:
What the hell are you ranting about? I've only made two posts in this thread and you quoted both of them. Nice job ranting at me for things I didn't post.
1. Population aging is a filunction of low population growth. The poster I was responding to was clearly suggesting that population growth in absolute terms created the SS mess, not that lack of population growth created the mess.
2. Let me get this straight: That SS will continue to pay out 75% of benefits is a positive? The program will cost five (perhaps six) times what it was originally projected to cost and will deliver only 75% of its benefits. Only a leftist would hold this out as a success or positive. That's a hell of a consolation prize.
3. You claim that SS is free of investment risk and will remain an inflation adjusted source of income. First, those are some pretty incredible claims to make in the same post in which you acknowledge that SS will soon only be capable of paying out 75% of its obligations. You're really arguing that a quasi-retirement program that needs ever escalating amounts of money confiscated through state power and that continuously faces near term shortfalls is free of investment risk? Second, SS is only free of investment risk and a good guard against inflation if you assume the federal government is incapable of default and if you believe that the dollar will remain a reserve currency forever. I wouldn't bet a mortgage payment on either of those assumptions, let alone 5-6% of the national GDP. Your claims are borderline irrational at this point.
4. The real problem is that the political left simply doesn't have the will to accurately price entitlements (e.g., Obamacare, nationalization of student loan program). As a result, entitlement programs virtually always cost more than originally projected and deliver fewer benefits than were originally promised. While myRAs are a decent concept in the abstract, what do you think is going to happen to short term economic growth when employees have fewer discretionary dollars to spend? Do you really believe hat state and federal governmwnts are going to be able to restrain themselves from trying to funnel myRAs toward government debt (increasing systemic risk in the process). Sure, in 30-40 years things should balance out if governments don't default in heir debts, but there will be short term pain.
5. SS will be significantly restructured at some point in time and some cohort of beneficiaries will feel significant financial pain from it. The only relevant questions are when will it happen and how bad will it hurt.
6. Your solution is to simply do the same thing that has been done for 75 years: throw more money at the problem through higher taxes and additionally reduce discretionary income through myRA plans. This time things will be different, right?
Oh FFS. Grow up and act like an adult, and argue like one.
Your uninformed ranting doesn't deserve a lengthy response.
1. If you can't understand the dependency ratio, I can't help you. However, you've basically admitted that I'm right about population aging, even if you tried to twist my argument around.
2. Social Security continues to keep 1/3 of older Americans out of poverty, and yes, that's a huge success. If you're one of those conservatives who thinks the elderly need to go back to living off cat food, again, I can't help you.
3. You're confusing investment risk with political risk--I was very careful to choose my terms but you obviously can't see the distinction. Again, I can't help you become smarter.
4. You're confusing Obama's myRAs with state autoIRA proposals, but these are two very different things. Also, you seem unaware that auto-IRA proposals would rely on private investment managers, so the state or federal governments involved would not handle the funds. Even if the government did handle the auto-IRA funds (which it won't), you also missed the post above about how government bonds as investments are backed by the full faith and credit of the US government and would take Congressional action to change--reading comprehension really doesn't seem to be your strong suit.
For the rest, yes I agree there will be restructuring. But even Trump doesn't think SS should go away completely. Trump has actually said that he wants to preserve Social Security in its present form, all of it. You're out of step with most of your conservative buddies. There's much more likelihood than you want to think that there will be a compromise that preserves a solid first tier benefit, and one that will help the poor in particular.
(And huh? You say I quoted both of your two posts, and so you're mad that I'm talking to you? Huh?)
1. If you wanted to suggest that the LACK of population growth was the problem you should have said that. Don't blame me for your poor writing.
2. Re: SS keeping aging Americans out of poverty being a success: almost any problem can be solved by throwing money at it. Here in reality land, we have finite resources and infinite needs. Hence, achieving an outcome is not enough to declare something a success or failure. In reality land, we have to choose how to allocate our resources efficiently. SS supporters have utterly failed for 75 years to efficiently allocate resources to this issue and we once again are talking about devoting even more resources to the problem. This time, things will turn out different right? That's what you really believe, right? That the problem is that it needs just a little bit more money through a combo of higher taxes and reduced benefits for certain segments of the population? I sort of admire you--a lesser person would be humbled by 75 years of failure. But not you.
3. Political risk IS investment risk, genius. Those of us who actually allocate capital for living generally refer to it as regulatory risk. Call it whatever you want, it IS rolled into the more encompassing concept of investment risk.
4. Distinctions between auto-IRAs and the myRA proposal notwithstanding, the full faith and credit of the US government is a function of the government's ability to pay its debts. That you think congressional action means anything with respect to the governments ability to pay its debts is completing missing the issue. Hint: if the money is not there, Congress' action or inaction is completely irrelevant.
Apetitie for political compromise and the wisdom of the policy changes flowing from such compromise are two entirely different issues. De Tocqueville diagnosed the limit of the American republic in 1835. That politicians on the left and right have a desire to kick the problem down the road through political compromise is not in and of itself an indication that preservation of SS is a good idea. And if not wanting my kids to have to bear the burden of bad policy decisions made today makes me a political outlier, so be it.
Go back and re-read your first paragraph at 7:45 last night. Except for three (now four) posts in this sub-conversation, I haven't posted in this thread. All of those topics you claimed you had to educate me on we're never raised by me that was a different poster and your ranting in that first paragraph had nothing to do with me even though you directed that screed at me.
Also, you rightky bring up the unfunded Bush wars as a problem with conservative governance. I don't defend the financing of Bush's wars. But it is worth noting that the total unfunded liability for that garbage was about $3.5T-4.0T. A staggering sum to say the least. Yet it pales in comparison to the $75T unfunded SS liability and even bigger unfunded MC liability. Conservatives should be humbled by Bush's mistakes. But, from an economic perspective, even given the longer time horizon, the unfunded liabilities arising out of SS and MC are much worse than Bush's unfunded wars. I guess massive finacial mistakes are only a problem when Republicans make the mistake, right? For liberals, it's only a reason to double down on what hasn't worked for 75 years.
All anybody can say is that Trump's right there with the liberals in terms of keeping SS in its present form. So you'd better not vote for him after all.
It does seem obvious now that you're a money manager who wants to get your hands on money from privatizing SS. So long as private accounts aren't subject to any restrictions on the fees you charge. In fact, ICI opposes the auto-IRA plans for that reason and some more reasons having, although they never state it outright, to do with limitations on how money managers could handle and charge fees for the accounts.
Also, where does the $75T figure come from? The 75-year unfunded liability is $11.5T and the infinite horizon unfunded liability is $35T (2016 Trustees p. 201). But even then--and this is key--you have to put that in the context of an economy that will also grow a lot over the next 75 years. It's not like we have to pay $11.5 trillion tomorrow out of today's economic resources. In fact, SS as a pct of GDP actually falls once the boomers start dying off. Infinite horizon quotes never seem to mention this fairly obvious point. Since you're complaining about the inability of forecasters to get things right, and championing your own stellar financial skills, I'm sure you know how very, very bogus it is to project SS out to infinity. That's like asking the founding fathers to project what SS, the population and the economy (all underlying assumptions) would look like in 2016. Most countries project their pension systems out 10-30 years.
Also, if you or someone else got that $75T figure by "forgetting" to discount to PV, as a financial whiz kid you should be ashamed to use it. I'll put my advanced Econ degree from a top university up against your BA in business any day.
Sorry about confusing you with the other rude, arrogant conservative.
Anonymous
08/21/2016 13:14
Subject: What Would You Be Willing to Do to Save SS?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:I think I would stop the ability to claim SS if you've never paid in.
Who gets SS if they don't pay in? I thought you had to have 40 quarters of earning, and the benefit is figured in your top 35 years.
DH grandma got SS for decades after her husband died. She never worked a job a day in her life. I'm certain she was not a citizen but drew a check for almost 50 years.
Another solution is to get rid of SS and let your parents move in with you. Wonder if obnoxious PP is down with that.
You mean like the norm in much of the world and for most of human history? Families sticking together--what a novel concept.