REPORT...Social Security runs dry in 2040

[rsmith6621]

Associated Press

WASHINGTON, D.C. - The trust fund for Social Security will be depleted in 2040, and Medicare will exhaust its trust fund reserves just 12 years from now, trustees for the programs said Monday.

Their annual report showed deterioration in the financial condition of both of the government's two largest benefit programs.

http://www.king5.com/topstories/stories/NW_050106NABsocialsecurityJK.8d2bf570.html

[Left Below]

1. If at first you don't succeed ---

change the data.

[Selatius]

2. Raise FICA cap to 110k from the present 88k

Look, that is far simpler to do than spending trillions trying to set up private accounts for nearly 300,000,000 people.

[MercutioATC]

3. It increases every year already.

it's $94,200 this year.

[papau]

6. True - but it no longer covers 95% of all wages - which was the goal

We pick up a smaller percentage of the wages of the rich than was intended - I wonder if that problem is being ignored on purpose by the Bush administration?

:-(

[MercutioATC]

11. I'm not well-versed in this. When did it cover 95% of all wages?

I believe it would have to be raised to $170,000 to cover 90% of all wages in 2006, so it must have been quite a while ago?

[papau]

16. As with all screw the middle class events, we begin with Reagan

And I may had a memory lapse in that the 95% may actually be 90%.

I'll have to talk to Bob Myers again (the Chief Actuary long ago and a fellow who was one of the 4 who designed the program for FDR in 1934-35).

I believe we were within spitting distance of the wages covered goal back in 1980.

We sure as hell are not now.

By the way, I believe your 170,000 is way off as the 90% cut off point - but I could be wrong.

[MercutioATC]

17. Look at page 10, near the top of the page (warning, it's a PDF)

http://www.house.gov/jct/x-38-05.pdf

Don't know how accurate it is, but that's where I got the $170k number.

[papau]

20. Thanks for the link - the suggestions in the PDF of the testimony

are ripped off the Trustees report and indeed I converted them to Word and posted them on DU in the Seniors section.

The $170,000 is the only new number the Joint Com fellow came up with - but I knew a few of the staff in the past - at least by reputation - and they make near zero mistakes - so I suspect that my 95% should have been 90% - and as noted in the PDF link you posted, that 90% has been the goal for a long, long, time.

[MercutioATC]

21. Even if the goal is 90% you're right....we're WAY short.

As I said elsewhere in this thread, it'd hurt me personally but I think eliminating the cap altogether would be the fairest way of dealing with the problem.

[Selatius]

10. Well, then raise it to 115K and then adjust for yearly inflation afterward

That should go a long way towards improving the situation.

[MercutioATC]

14. From a personal standpoint, I'd disagree...

(I like not paying FICA towards the end of the year) but from a realistic standpoint, eliminating the cap would be the most fair way of dealing with the problem.

[papau]

18. I agree :-)

The effect would be very large checks for the very rich - but they will have paid a large payroll tax for those checks and indeed the payroll tax rate could drop 1.5 to 1.75 below where it is now and we would still be better financed than we are now.

[Yupster]

44. The payout formula

for social security utilizes bendpoints which are incredibly progressive so if you remove the taxing caps and also remove the payout caps, the rich would pay in incredibly more but only get out some more, so the rest of the people would come out way ahead.

[shanti]

52. and that must never happen, right!?

:sarcasm: they'll never LET it happen.

[papau]

56. True - the benefit check the rich would get if no wage cap would be huge &

the tax increase on the rich even larger, fixing the SS shortfall for the next 75 years - or allowing a 1.8% of payroll reduction in the payroll tax rate for all of us.

And this would be ethically morally wrong because of what?

[Yupster]

39. I suggest a two part program

1. Eliminate the cap so all income is taxed by FICA.

2. Force people who are currently not in SS to join. The biggest example is most public school teachers in 14 states including the two biggest of California and Texas.

If these two proposals are passed together I think it could work because each party's politicians would have to go against one of their key interest groups, the rich for Republican congressmen and public employee unions for the Democratic congressmen.

I don't see either party accepting pissing off their own group if the other side doesn't offer anything in return.

PS - Both of those proposals should be enacted for reasons of basic fairness anyway.

[papau]

4. Damn - they lower discount rate from 3.0%to 2.9% so as to made it look bad

Actual SS Report link

http://www.ssa.gov/OACT/TRSUM/trsummary.html
http://www.ssa.gov/OACT/TR/TR06/tr06.pdf

There is just about no change in the actual projection beyond claiming another year - the year 2080 - where they expect a large deficit.

Once again a simple full benefit retirement age increase by 2050 from the current Reagan passed age 67 to say 70, plus a small increase in the wage cap, solves all problems.

Indeed removing the wage all together means WE REDUCE THE TAX RATE!

But you know how the media will report this ..... sigh

[Zynx]

24. They expect less than 2% GDP growth in these assumptions.

If that is the case for the next 80 years US capitalism will fail. GDP growth will be higher than that. The long term trend historically is towards accelerating growth rates over time. With higher growth revenues will be higher than anticipated.

[papau]

28. Very true - the slight increase the CBO used over the SSA assumption

last year caused an increase from 2041 to somewhere in the 2050s for the drop in benefits to occur.

[Gormy Cuss]

5. The annual report was not released on time this year.

Atrios and TPM discussed this at the time. By statute it must be released no later than April 1st. IIRC the official reason for the delay was related to reappointing some commissioners or something procedural, but I guess they needed the extra month to cook the books or develop a spin strategy.

[0rganism]

7. These shortfalls were expected, and track with similar reports from 2000

Of course, Al Gore was ridiculed by the corporate media for proposing steps to re-secure the system, and Dubya has done his best to destroy the existing infrastructure.

I do think the current benefit structure, funded by a regressive flat capped payroll tax, is fundamentally broken and needs to be replaced by a truly responsive and need-based social welfare program funded by progressive income and capital gains taxes, but that's my opinion.

[HereSince1628]

8. Funny proBushites use the rosiest scenarios to project

how the economy is doing while social security opponent use the bleakest.

The truth seems to be with somewhere in between. The singular truth is that responsible management of social security is absolutely necessary to keep it safe indefinitely.

[Le Taz Hot]

9. Oh, goodie!

And I retire in 11-1/2 years. (sigh)

[liberal N proud]

12. Another bu$hwhack at Social Security

Those rich bastards can not stand that lower class people are not starving in old age.

[ShortnFiery]

13. Not this lame shit again ... * never gives up :P n/t

[rocktivity]

15. TORO TURD!

Just raise the SocSec salary cap and roll back the tax cuts!

:headbang:
rocknation

[shanti]

19. well....

i'll be either 85 years old or DEAD by that time. :(

[LiberalEsto]

22. I'll be 88, if I make it that far

Guess I'll just have to go back to work, assuming I ever get a chance to retire in the first place!

[MercutioATC]

23. I'll be 74.

Guess I'll have to give up the $1k per month...I'll have been in Costa Rica for 24 years, so I'm not too concerned about it from a personal standpoint.

[VegasWolf]

25. Hey, that sounds nice. My wife and I are retired and considering

the Caymans or Mexico ( Carribean ). I've done a little looking at Costa Rica. Any advice for a potential ex-patriot now that Bush has fucked this country up so competely!

:toast:

[MercutioATC]

26. Look into Costa Rica...

It's a popular choice, so prices are going up but it's a great place. Fantastic climate, first-class (and nearly free) medical care, a higher literacy rate than the U.S., a stable Democracy and, depending on where you're looking, a much lower cost of living than the U.S.

Friendliest people I've ever met, too.

[Yupster]

45. The retirees leaving the country

really hurts the US economy and therefore the US though.

We yell at corporations moving overseas because it costs jobs. Well, consumers moving overseas does the same thing.

[MercutioATC]

49. True, but I've contributed to the economy enough in the last 20 years...

...and I'll be contributing for the next 10.

If this country can't get its act together enough to become a decent place to retire, screw it. I've paid my dues.

[shanti]

51. but but

what about the snakes and other critters? that is a concern of mine.

[MercutioATC]

53. You left out the scorpions and beetles (some BIG ones)....

Spend a couple of weeks in the rainforest waking up to monkeys in the trees outside your window and you'll learn to live with the snakes and bugs.

Once you're really surrounded by it, nature isn't so oogey...

[shanti]

50. yes!

^5! i would like to be somewhere in the tropics myself.

[Demeter]

27. If Dubya Told Me His Name Was George Bush--I'd Demand ID

There is no way I'm going to believe anything this government prints officially until all the crooks are indicted, imprisoned, or in the grave.

[Bigmack]

29. Everybody read "The Plot Against...

Social Security" by Michael Hiltzik. Brilliant book by Pulitzer-winning financial journalist at the LAT.

If I remember correctly, Congress fixed SS in 1983-4. They raised taxes enough to cover the boomers. SS trust fund would run out around 2040, but so would the boomers drawing it, and balance would be restored. Dimson and his assholebuddies have "unfixed" SS in order to privatize.

Two things that have to happen to "save" SS: One is that the trust fund... actually Treasury notes... will have to start being redeemed. Ouch. Not all at once, but start, anyhow. Two is that the income cap has to be raised.

If Dumbya's tax cut for the rich is rolled back, SS can survive easily.

The screwing of SS... just another reason to hate that asshole!

[sendero]

30. A mere 34 years...

... I'll be happy when any economic forecast is good 5 years out.

Really, this is nothing but a wankfest. Projecting numbers that far out with the huge number of variables involved is an exercise in guessery.

Anyone who is worried about entitlement programs, and we all should be, should be demanding budget restraint, because you can slice it and dice it until your hands bleed, it all comes down to spending less than you take in.

[wishlist]

31. At least these programs are solvent unlike the rest of govt programs

These programs still have large surpluses whereas Bush has already bankrupted the rest of the budget.

[anotherdrew]

32. BUSHSHIT - they don't know whats happening next week, much less 40 years

I think this matter needs much more study

I don't see it happening, I just don't buy their assumptions.

[brentspeak]

33. Trust fund Republicans dream of a Dickensian America now may come true

http://www.umbc.edu/history/CHE/InstPg/RitDop/Online%20image%20-%20Dore's%20poor%20of%20London.jpg

[BikeWriter]

34. That's bad news. The good news is I'll starve to death before then.

[bleedingheart]

35. I say ELIMINATE the CAP...and the problem goes away...

[Name removed]

36. Deleted message

Message removed by moderator. Click here to review the message board rules.

[devilgrrl]

37. FEAR-FEAR-FEAR! Must Destroy! FEAR-FEAR-FEAR

bollocks.

[midnight]

38. It may not even matter if the war in Iran is started or

the direction of our consumption doesn't change or the policies that are being passed continue. But just in case we should ask congress to replenish the reserve bank that was emptied via Bush at the start of the Iraq war. Maybe that money can be put into Social Security .

[0007]

40. Raising the minimum wage would help to keep the wolf away.

[SoCalDem]

41. Good grief.. I HOPE I don't live to be 91.. (1949 boomer, here)

All the government has to do is GIVE THE FUND BACK ALL THE MONEY THEY "BORROWED IN GOOD FAITH"..

The money WAS there...plenty of it..

[Yupster]

46. It was there.

But it ain't there anymore. It's been long ago spent.

Nice answer. Just give the money back.

They have a $ 500 billion annual defecit. They can't even pay their current bills. They sure can't give back the money they stole years ago too.

[SoCalDem]

47. Start looking under the sofa cushions, Dick

or your greedy ole pockets :)

[TankLV]

42. Bullshit. If we DO NOTHING - it will not only remain solvent, but the

financial condition will IMPROVE in the latter part of the century!

This is bullshit, pure and simple.

More lies to scare the sheeple with.

Hmmm...

[Yupster]

48. I think pension funds in general

are in big trouble.

GM has about 140,000 employees and is paying a monthly pension check to over 400,000 retirees. How can that work for long? I read somewhere that GM has been sending one guy a pension check for over 50 years now.

After Bethlehem Steel went bankrupt and shed its pension obligations, then a whole bunch of other steel companies followed.

Now it's the airlines which are looking at the benefits of bankrupcy. Then it will be the car companies. Then the oil companies will be a surprise. They have a classic boom-bust business where during a bust, their pension obligations will be a great burden for a much reduced workforce.

Governments are also looking at bleak projections. I think it was Illinois where the state budget projection was that in not too many years (20?) it will take the entire state budget to pay firemen and police pensions alone.

As for long-term projections, it's true they are often wrong due to new inventions or discoveries, or major changes in life, but I remember being a kid and reading a projection that if things don't change there will be 6 billion people in the world and thinking that it was just plain impossible because the earth couldn't support 6 billion people and something would change. Well here we are withg 7 billion people. Who woulda thunk it?

[electron_blue]

43. That's longer than i thought (for Soc Secy). If we quit fighting wars

we'll have plenty of $ to take care of everyone. I keep hoping that sooner or later we (the American public & its elected officials) are going to catch on. I am an optimist.

[auburngrad82]

54. This is based on an estimated life expectancy of 160 years

I heard on the radio that they're basing this on the increase in life expectancy over the last century which saw medical, nutrition and health advances that almost doubled the life expectancy of Americans. And, by the way, it didn't hurt that Medicare and Social Security improved the health of our elderly and lifted them from poverty.

I seriously don't think we'll be living that long. So if you revise the estimate for a more realistic life expectancy of, say, 90 years, then the study is nothing more than an election year bid to frighten people. It's worked the last few elections, the GOP is hoping it will work again.

If you take fear away from the GOP, they have nothing.



Liberal bumper stickers

[warpigs]

55. Misleading headline

Only the trust fund runs dry in 2040.

[stepnw1f]

57. Here We Go Again

Where do people find this shit. I would have to search this shit out, but hey... it's here.