Social Liabil...er...Security

[anEinherjer]

Happy 71st, SS. Anyone still think it's a good idea to just ignore the problem?

Overall, the system’s unfunded liabilities—the amount it has promised more than it can actually pay—now totals $15.3 trillion. Yes, that’s trillion with a “T.” Setting aside some technical changes in how future obligations are calculated, that’s $550 billion worse than last year. In other words, because Congress failed to act last year, our children and grandchildren were handed a bill for another $550 billion.

http://www.cato-at-liberty.org/2006/08/14/another-year-older-and-deeper-in-debt/

Any new great ideas, you anti-private account types?

[Ru]

I would do away with the FICA wage threshold and also reduce benefits for retirees whose net worth exceeds certain limits.

[anEinherjer]

Okay, Ru's onboard with raising taxes on anyone making over 90-some K. Everyone else good with that?

[Gibby]

Here is my idea. Privatize up to five percent of your social security taxes in blue chip stocks. Those who are getting guarenteed pensions would not be allowed social security. Also it would be illegal for companies to fire someone just before retirement for the sole purpose of weaseling out of paying pensions. Also companies would be forced to honor all pensions in the event of any merger, bankruptcy, etc... Those without pension plans would be given social security but would have the option of putting up to twenty five percent of their SS and FICA taxes into private stock plans in savings bonds or blue chip safe stocks.

[uppy]

Just face it people ...we will have to work until we drop dead.

[gilchristfan]

Happy 71st, SS. Anyone still think it's a good idea to just ignore the problem?



http://www.cato-at-liberty.org/2006/08/14/another-year-older-and-deeper-in-debt/

Any new great ideas, you anti-private account types?

again.. How do private accounts deal with the 15 trillion dollar trust fund IOU's?

And I already told you my ideas on it months ago.

[JLB]

again.. How do private accounts deal with the 15 trillion dollar trust fund IOU's?

And I already told you my ideas on it months ago.
gilchristfan would you give a small snipette of what you think we need to do?

[gilchristfan]

gilchristfan would you give a small snipette of what you think we need to do?

The goal would be to wean the younger generation from reliance on SS. Its too late for alot of the older workers, and they've paid into all their lives anyways, so its not fair to shaft them by diverting 1/3 of the SS monies into private accounts.

I'd recommend:

1. Increase IRA contribution limits that qualify for a deduction from AGI.


2. Create a new form of IRA account that would be tied into future SS benefits. The worker would still pay SS tax, to ensure that retirees are continually funded, but the worker will obtain an additional tax deduction if they invest in the new IRA. In exchange for the deduction, their anticipated SS benefits would decrease. When they reach retirement age, they won't get as much in benefits, but they shouldn't need it, as the new IRA would be its replacement.

[gunnar_zero]

again.. How do private accounts deal with the 15 trillion dollar trust fund IOU's?

And I already told you my ideas on it months ago.

true,

but private accounts will end the bleeding.

As for the debt, we will have to bite the damn bullet and take the hit somehow. I would reather end the growing debt now, than let it grow larger while it is ignored.


Phantom, good post

[anEinherjer]

Gil, I never said (and would never claim) private accounts would somehow save us from having to pay the 15T. However, once we wean everyone off the current SS (using your method or another - I'd have to consider yours a sort of 'hybrid'), it'll be at least feasible to pay down that liability.

And that doesn't even get us to Medica... man, I'm kind of scared for the future.

I just threw this thread out there to see if there were any new ideas since we just chucked another half trillion away, and the favored option now seems to be the "hide head in the sand" variety.

[г]

Just face it people ...we will have to work until we drop dead.

Speak for yourself.
I guess pancake-flipping didn't pay all that well ?

[gilchristfan]

Gil, I never said (and would never claim) private accounts would somehow save us from having to pay the 15T. However, once we wean everyone off the current SS (using your method or another - I'd have to consider yours a sort of 'hybrid'), it'll be at least feasible to pay down that liability.

And that doesn't even get us to Medica... man, I'm kind of scared for the future.

I just threw this thread out there to see if there were any new ideas since we just chucked another half trillion away, and the favored option now seems to be the "hide head in the sand" variety.

I don't think you can do one without the other. To me, any discussion of private accounts has to address the future liabilities, ie, paying for the people that paid into it all those years.

As to Medicare...buy some pharma stock. Best investment in America.

[35Pete]

The goal would be to wean the younger generation from reliance on SS. Its too late for alot of the older workers, and they've paid into all their lives anyways, so its not fair to shaft them by diverting 1/3 of the SS monies into private accounts.

I'd recommend:

1. Increase IRA contribution limits that qualify for a deduction from AGI.


2. Create a new form of IRA account that would be tied into future SS benefits. The worker would still pay SS tax, to ensure that retirees are continually funded, but the worker will obtain an additional tax deduction if they invest in the new IRA. In exchange for the deduction, their anticipated SS benefits would decrease. When they reach retirement age, they won't get as much in benefits, but they shouldn't need it, as the new IRA would be its replacement.

A realistic option at least worth looking into.

[anEinherjer]

I'm not sure discussion of private accounts or other methods of weaning people off "current SS" has to include discussion about how to pay for the liability - I see it as two separate "problems", each of which could be dealt with separately. I think so because the way I see it, "current SS" is unsustainable and we have to get people off it, period. The actual weaning might take many different forms, really, but the goal is the same.

Is there a particular reason you think payment of the liability has to be addressed in the same discussions?

[Ru]

At this point, worst case scenario has about 80% of the benefits being able to be paid out.

[Bpaup95]

Does anyone know how a group of people or organization can opt out of paying into SS? My sister just got a job in the Boston school system and the teacher's federation there doensn't pay into SS, they have their own. Which is good for her because the teacher's union isn't going anywhere but if she ever wants to leave Mass. than she gets nothing. I'm just wondering how this is possible.

Anyway, If privatization is the future, than i think something smaller/local/voluntary/cooperative SS like in Mass. would be a great option to supplement IRAs.

[dasaybz]

Maybe people should try opening 401ks?

[anEinherjer]

401k's are employer-sponsored, so unless you're self-employed you don't get much choice there. IRA's on the other hand, are fine. So are HSA's if you can get past the scary part of it.

As for "opting out", I've heard of a few groups that challenged it in court and won, including some government in Texas, Galveston maybe. Oh, and there's one other group that doesn't have to pay SS tax. I'll let you guess their name but it starts with "Con" and ends with "gress".

[gilchristfan]

I'm not sure discussion of private accounts or other methods of weaning people off "current SS" has to include discussion about how to pay for the liability - I see it as two separate "problems", each of which could be dealt with separately. I think so because the way I see it, "current SS" is unsustainable and we have to get people off it, period. The actual weaning might take many different forms, really, but the goal is the same.

Is there a particular reason you think payment of the liability has to be addressed in the same discussions?

Its because of the way the system is structured, where the current working class funds the current class of retirees. If you're having any discussion of changing the accounting of funds collected from the current working class, it will necessarily affect the current retirement class.

BTW, that article is a little strange. First it talks about this $550 billion deficit as if its coming from the structure of Social Security, when its in fact, the federal deficit. In addition, as to the 15.5 Trillion with a T deficit, is he referring to the national debt? The "trust fund" is currently at about 1.5 T with a T. Consider it 1.5 T in EE Savings bonds.

But the author sure makes it sound like its Social Security running up a deficit. Its not SSA that's creating these whopping deficits.

Currently, SSA is bringing in $120 billion more in receipts than it pays out. Its not "bleeding". If anything, other areas of government are "bleeding" SSA.

If something needs to be reformed, you'll have to look at the federal budget first. That's where to stop the bleeding.

[anEinherjer]

I believe Tanner, in reference to the amounts, is talking about what the unfunded liability is to SS in the long term. I believe he means that in 2040 or whenever the "trust fund" runs out of money the total bill will be X.

I think he's made the mistake of skipping over some important bits because he's repeated the same warnings over and over to little effect. I've read those paragraphs a dozen times, at least.

I do agree with you, by the way, about the federal "budget" :) (wish I could run deficits yearly and not worry about it).

btw, thanks for the discussion - all too rare around here.