Social Security

"What if he just wanted to nudge the age of retirement to 69 or 70 years?"

The demographics of the system aren't favorable for that change. The biggest problem is that Social Security has created a massive pocket of poverty in the 45 and under set. It is worst in the 35 and under set because of the cost of college. But you have a wave of people who have been unable to prepare for their retirement because they have paid for the retirement of the previous generation. And you are going to ask them to wait?

Today the problem with Social Security is the economic returns. You can't fix the problem with lower returns. The most likely outcome of that solution is the internals continue to erode, and at some point the working generation votes the whole thing away.

What the experts are not looking at is the look-through debt of the average worker. These people talk about retirees to workers as though workers do nothing but pay for retirees. The fact is that they also have to support the cost of the debt. Debt per worker has probably doubled or tripled over the past 15 years.

Do you see the working generation supporting both the debt and the retirees who created the debt as younger workers? I don't

a president alone couldn't...

No,not even on the radar.

Only a few insane rightwingers. No one else does.

What if he just wanted to nudge the age of retirement to 69 or 70 years?

Wasn;t the question, was it?

Well I just asked is all.

Yes, you did. I'm sorry I was so snippy.
Isn't it already slowly being implemented?
I'm 51- I've been getting cut off from programs that could help me all my life- couldn't get a student loan without a co-signer- and couldn't get aid because the baby boomers swept through like a plague of locusts and never paid their loans back.

Yeah, the boomers got pretty sassy. ^_^

I've been getting screwed by them all my life- it's pretty likely they'll be screwing me after their gone.

The numbers paint a very different picture. According to the Trustees, anyone 46 and younger will retire after the Trust Fund is gone. Any one 63 and younger and expect to live long enough to experience the cuts. That means that only 22% of Americans can expect to die before the forced cuts are enacted.

2010 was the first year in which a majority of voting aged-Americans could expect to experience significant benefit cuts. 2011 is the year of the first payroll tax cut in history, and multiple politicians emerge to call it a ponzi scheme.

You may think that they are right wing, but the fact is that they can count. And the demographics of the system are eroding.

Nope- it's 55- not 46.

How do you compute 55. I will grant you that 2033 is a optimistic number based on laughable assumptions. But someone 46 today will retire in 21 years at 67. Someone 63 (according to SSA) expects to live to roughly 84 or 2033.

It's not my computation.

I am trying to understand. Where did the 55 come from?

Are you referring to the promises of politicians that plan X or plan Y will not affect those 55 and older? It is just empty promises.

I'm trying to understand why you think social security has suddenly become a ponzi scheme.

I think ponzi scheme is the wrong term. Technically it is check kiting if it is a scheme.

The finances are eroding. The voting support is eroding. The risk is that the public will wait too long and the system will not be savagable.

If you think not getting your benefits is a problem, wait until your parents lose their benefits and come to live with you..

I don't know dear, it was your term. I was only asking how you came to that conclusion.
Now you seem doubtful whether or not it's even a scheme.
I've been changing diapers on senior citizens for 30 years- so for me-I'm well acclimated to the possibility.
I might even be recompensed in some fashion that is remotely fair.
Now THAT- would be a new development for me!

It's much more likely that I would be caring for YOUR parents.

I think the things mentioned could be fixed by simply doing away with the Social Security cap on earned income.

Or maybe not if millionaires and billionaires get most of their income from investments. Where is an accountant / economist when you need one.

I am one.

Why do you think that doing away with the cap will solve the problem whether simply or not?

If you are reading material that says "over the next 75 years", you are being played. The 75 year numbers include all of the revenue but only a portion of the cost. So the problem appear smaller than it really is.

How would you resolve the issue?

Let me give you two different answers. Our site - ergo me - doesn't advocate a specific solution. You can't ask impartial questions once you have given an biased answer.

That said, I don't believe in one-size-fits all solutions. Something like Simpson-Bowles which has components is the best approach. I don't happen to like the components in that plan though because most of the parts put the cost on people who can't vote today. That was the problem with the 1983 'Fix'.

That said, this is more unsubstaniated opinions,

The cost of education in this country is crazy and here is how it feeds the problem in Social Security. To get a job you have to have a college degree, many of which cost in the 100s of thousands to attain. That means that people have to defer wages (which feed Social Security) for up to 5 years.

I suspect that the benefits formula is out-of-date. Today it takes 40 quarters to qualify, and people like my dad work long enough to qualify before shifting to a job which isn't covered. Whether you increase the number of quarters or change the weighting of wages, what is important to understand is that the formula is compicated.

I suspect that early retirement is drawing in the wrong person. Today more than 60% of first time checks go to people who retire at less than full-retirement age. People leaving the work force isn't the answer.

This is guesswork because these concepts aren't in plans today. So it is difficult to get multiple views on these ideas.

Or we could just reasonably tax capital gains.

Not true at all. Don't let anyone scare you into destroying Social Security.

He is an economist and runs or works with a website dedicated to the issue so, we should at least hear him out. Not that he is more believable than other economists on the issue, but ...

I have heard him out before, and I do not agree with his assessment of the situation.

I will see what his proposed resolution is before I say any more.

That would make you the most reasoned person in the entire Social Security debate.

Where have you 'heard-me-out'?

I will give you the same offer that I give anyone. If you don't agree, tell me where my facts are wrong. I am happy to publish your views on our site, provided that your information has sources at SSA or something comparable.

That isn't a deal that you will get at Social Security Works.

I appreciate the vote of support, but keep in mind that economics isn't a hard-science. For everything I say, there are 250 economists who will say the exact opposite.

I see my job in this isn't to tell you what to think. I try to tell you what other economists are saying and let you make the judgment. The debate is grounded in squirrelly data and statements that can be easily misunderstood. That is why it is going no-where.

This is a piece that explains what the Trustees have actually said about how long the Trust Fund will last.

http://www.fixssnow.org/blog/...

Light, I you are free to tell me how this piece is wrong. And I am not scaring anyone the facts are what the facts are. If they scare anyone, it isn't my fault.

Then instead of trying to kill Social Security (which would be absolutely disastrous), we should either start putting more into it or raise the retirement age. In addition, those who find themselves with enough money to live out the rest of their lives luxuriously should not collect from it.

Ironically, you are suggesting that we kill the existing Social Security and come up with a new one that will have disastrous outcomes.

First, SS is already means-tested and that test affects up to 1/3rd of retirees today. I doubt 1/3rd of retirees live in luxury.

Second, the problem with SS today is that it is a bad deal. You are proposing to fix the symptom (the fact that it is running out of money) by making the disease worse. You can't fix SS by making a bad deal worse.

If you want a disaster, let's continue what we are doing today. We are hiding the problems of the system from the people who are retiring today. If I am right, it will fail about the time that their job skills have eroded to the point where they will not be able to get jobs. Social Security serves an audience that does not adapt well to economic change. Any crisis will focus its energy on those who are least able to adapt to it.

So you are trying to say that things would be much better off if we don't have Social Security at all, and just let people starve to death! Good idea!!!

So much for hearing anyone out. We reduce the discussion to an either my-way or we-let-people starve. Ironically, your approach is the best way to let people starve. The only difference is that your approach will maximize the suffering. You don't care because it is in the future.

Let's ignore the problem until it is a catastrophy.

Then what is your solution that will keep the elderly alive during their golden years, and the poor going after a tragedy? So far, you have offered no solution other than dissolve Social Security entirely. It can work forever, the problems are not unfix-able, and the solutions I suggested would work - prove it can't!

You say that I have suggested 'dissolve Social Security entirely'. Where did I ever say that? All I have done is give you facts. You look at the facts and come to the conclusion that it should be dissolved. Don't blame me for your view of the facts.

Your concept of means testing is pretty simple to disprove. The system is already means tested and affects people who make $25,000 in outside income. That is far from luxury.

In terms of raising taxes, I think it is a matter of opinion. You can certainly fix SS, but only at the cost of breaking everything else. When you throw more of the tax base toward SS it comes at the expense of not raising taxes to paydown the debt. You are suggesting that we can issue more and more debt. No one believes that.

I can't prove that your idea doesn't work. I can tell you that there is a not a single example in the history of the world where it has worked. There are many examples of countries that have tried and failed. All told I wouldn't want to try it again.

You may not have used those words, but by bitching about a problem and saying that there is no way to fix, you are saying you want to get rid of the Social Security system entirely. I am telling you that getting rid of the one program that was such a resounding success, it made us the envy of the entire world..., that would be disastrous!

Where have such attempts to rescue a Social Security system been tried and failed? Prove it with the numbers.

"You may not have used those words"; let keep the conversation to what I actually said rather than your conclusions to the data that I present.

"Where have such attempts to rescue a Social Security system been tried and failed"

1983 for one.

I find it odd that you want such precise numbers but provide none of your own. "I am telling you that getting rid of the one program that was such a resounding success"

According to the Trustee's the program is 20.5 trillion in the hole. Page 15 of the 2012 report

According to the Washington Post/ABC poll, more than 80% of the country thinks that the system is heading for crisis.

It is a system that takes in nearly a trillion dollars can provides nothing but uncertainty for the vast majority of Americans. I don't think that is success resounding or otherwise.

Why don't you just admit that you are trying to sway people into your way of thinking that the Social Security system should be dissolved, and replaced with nothing?

Aren't you just afraid that the people will never accept such a proposal?