I'm so tire hearing about SS having to pay out more than they take in

[napi21]

because of the baby boomers retiring! That's why they increased the amount of deductions back in the 70's or 80's (I forget exactly when, and then Shrub gave it all away to his wealthy buddies because he said the Fed Govt should NEVER have a surplus! Well rich folks, it's time to give it BACK! Raise the tax rates on these btds who have been riding the gravy train for 8 f-ing years!

[OHdem10]

1. If Congress paid back all the IOUs for money taken out for other

things, they might not be wringing their hands.

[johnaries]

2. EXACTLY!

[Historic NY]

6. damn skippy...they owe us.

[wroberts189]

9. It was theft..it really was. That was our money. Line item taken out of my paycheck. nt

[jtrockville]

30. That's right. And when those "IOUs" become "only pieces of paper"...

What happens when the United States Treasure can't meet it's obligations? When the United States Treasury is, in effect, BANKRUPT?

[Yupster]

39. You sound as if congress has this pile of money

they're hiding.

The money's gone. It's been spent.

It's like a person who's been robbed who keeps thinking if they only had that money.

It's gone.

[tridim]

3. LOCK BOX!

[wroberts189]

8. bush won ...no box ..no lock. Now no money.

Now its "we need to raise the retirement age" etc.

[kentuck]

4. How much did they spend?

I read someplace that it was like $2.5 trillion dollars?

[RKP5637]

5. Outright White Collar Robbery of SS Funds!!!

[wroberts189]

10. It should be more obvious to people. It was a fund we all paid into for a specific purpose. nt

[wroberts189]

7. Yep ...Alan Greenspan said take more out of their paycheck, they did and then stole it.

And then they all laughed at Al Gore for saying prior to it he would prevent that theft by putting it into a symbolic lock box.

[quaker bill]

16. Thankfully

they did not put the funds, to the extent any remained, into the stock market. It could have all been invested in credit default swaps.

[pampango]

28. Unless they're going to put the trust fund in a giant mattress, they have to invest

somewhere. Government bonds are the safest investment there is. (Sure does beat the stock market and credit default swaps.) If we get to the point where the government doesn't pay off its bonds, we'll be in so much trouble that a broke SS system may be the least of our problems.

[sendero]

34. LOL

.. have another sip of kool aid.

[quaker bill]

35. There is no trust fund

all that is left is debt, and the Chinese own a fair chunk of it. Current taxes pay the benefits the excess goes to the general fund to reduce the deficit. There is no trust fund to invest. There is no pile of money, unless they print it.

[prostomulgus]

11. SS payments should be means tested.

That money was meant for people who really need it, not for the fat cat baby boomers who already have funds put away for retirement. It needs to go to people who didn't win life's lottery so didn't have a job throughout their lives.

SS payouts should be based on how much money a person needs, not on how much they paid in decades ago (that money has already been spent).

[amandabeech]

13. There are fewer fat cat baby boomers than you think.

But those that are fat are greedy like far too many fat cats of all ages.

If SS was means tested, it would have been trashed even more than it has been by those who hate, absolutely hate, anything that has to do with welfare, even if they themselves really could use some help.

If everyone gets it, then it isn't welfare.

It is, however, partially means tested. Those who pay in less get a boost in the payout.

I personally favor a serious surcharge on very high incomes and a "Social Security and Medicare" surcharge on capital gains taxes because the income not taxed since Reagan has been invested, and can only be recouped in that manner or with increases in the estate tax, which I also favor.

[harkadog]

14. No it was meant for everyone. That is what the law says.

[prostomulgus]

17. Laws can be changed.

[Hannah Bell]

26. why would you want to make a bad change?

[Warren Stupidity]

21. Um fuck no. Not welfare.

Plus payments are already subject to taxation if you have enough other income. SS is a universal pension plan, and like universal health care - for example medicare - is actually UNIVERSAL, applying to everyone with very limited qualifications on who 'everyone' is.

[we can do it]

29. BS- You Pay In You Get Benefits

[hansberrym]

12. The chickens are coming home to roost! It was the baby

boomers paychecks that kept the system afloat. And it will be the baby boomers benefits that break the bank.

http://www.nga.org/Files/ppt/0611SENIORWEBCASTKREPCIO.PPT

http://www.ssa.gov/history/supreme1.html





edit to fix link

[quaker bill]

15. Sorry, it was not GWB

It was pretty much all gone by the time Clinton took office. Ronbo spent it on a 600 ship navy and deploying first-strike nukes in Eurpoe. He spent all the extra SS funds plus an average of 300 Billion more every year on defense.

GWB did not spend it, because one cannot spend IOUs. GWB simply wrote more IOUs.

[AllentownJake]

19. Correct

Reagan cut income taxes than increased Social Security Taxes than spent the Social Security money on the defense budget.

[Jim Lane]

22. Right, it was both parties

In 1983, rates were raised so that the Social Security Trust Fund would accumulate a surplus, which it would need to fund the boomers' retirement. The surplus was borrowed to fund other government programs and keep the reported deficit lower (or the surplus higher).

The problem isn't that any money was stolen. It really was borrowed; IOU's (special T-bills) were issued, and I predict those IOU's will be honored, because the political pressure to do so will be overwhelming. The problem is that the federal government's operations other than Social Security were in much deeper deficit than was publicly acknowledged. The result is that the looming necessity to honor the IOU's held by the Trust Fund will put terrible pressure on the federal budget. For some years now, we've been in worse fiscal shape than we realized, in the non-Social Security portion of the budget, and the chickens will come home to roost in the 2020's. If you start with a budget that would otherwise be acceptable, but then add in the necessity of repaying the borrowed funds, you're left with a combination of tax increases, cuts in other spending, and deficit finance. All of those have drawbacks but some combination of them will have to be employed, to the tune of trillions of dollars.

[AllentownJake]

24. It will blow up before that

A jobless recovery means less seniors returning to the work force and less revenues from all tax sources.

Social Security won't be the bomb that goes off in the federal budget. Medicare will be.

Add to that the issues the states are facing.

[quaker bill]

36. It was not "borrowed"

It was spent. New paper was printed to replace it. The bottom line is that no reserve was accumulated. The substitute paper can only be paid off from current revenue, which means you might have just as well not raised the tax at all.

The point of all of this was a republican plan to make taxes more regressive. Cut taxes on the wealthy and increase taxes on wage earners through SSI witholding, then spend it as if it was income taxes. So, what happens at the far end? SSI witholding will have to be increased to pay current benefits, which I am sure will be paid. The boomers are too large a voting block for either party to mess with their benefits and survive politically.

You X-ers and younger folks need to figure out that now is the time to tax us and do it heavily, because soon we will stop making very much money. Every thing about my experience with my cohort suggests that we will have no problem taxing you when it is our time to collect.

[AllentownJake]

18. Well at least they didn't get the private account nonsense they wanted

Imagine if they took a good portion of the fund and had it in the stock market.

[Yupster]

40. I don't agree with the stock market idea, but

if they did that, then we'd each have an account with something in it.

Right now, we just have a promise by someone who doesn't have the money to meet the promise.

[Warren Stupidity]

20. Filed under NO SHIT.

And people here continue to support increasing SS taxes, even while it is running a huge surplus, and even as the insane Reagan/Bush tax cuts for the wealthy remain in effect.

[Jim Lane]

25. Yes, the Social Security tax revenue should be increased, by raising or eliminating the cap

As it now stands, the Social Security tax is regressive. To keep the current cap, and increase the percentage rate, would make it even worse. To raise or eliminate the cap, however, would generate more revenue and make the tax less regressive.

That the system is currently running a huge surplus is no reason not to rectify the tax structure. It must run a huge surplus now so that the Social Security Trust Fund will have ample reserves to pay benefits to the baby boomers.

A pay-as-you-go system like Social Security can run steadily if there are no major demographic changes. If each cohort (the group of people born in a particular year) had at least as many members as the one before it, no surplus would be necessary. The happenstance of the baby boom, however, means that the cohorts from that period are larger than their successors. That's why it was foreseen, and agreed by Democrats and Republicans more than twenty years ago, that the system would have to build up a surplus.

[Hannah Bell]

27. everything you've written is pretty much mistaken.

1. it's not regressive except for income over the cap, which i believe is currently about $106K. however, payout is progressive. payout for someone who made 1mill is the same as for someone who made $100K.

2. there's no reason to lift the cap or increase the percentage tax unless you think it's a good idea to give more excess funds to the feds so they can borrow & spend them while maintaining low income taxes for the super-rich. collections are still in excess of payments last time i checked, so why would you want to increase collections? SS isn't supposed to run substantial surpluses.


3. this is pure bullshit: "It must run a huge surplus now so that the Social Security Trust Fund will have ample reserves to pay benefits to the baby boomers"/

it *must* do no such thing. collecting more money from workers now & borrowing it into the general to spend, mostly on war, doesn't do a goddamn thing to help pay for future boomer benefits. it just reduces worker's disposable income while funding tax cuts at the top.

if the government borrowing were being used to develop the jobs of the future, you might have a case.

there's little evidence this is happening, however. the biggest increases in federal spending have been police/military related. & the associated *income* tax cuts to the super-rich are being used to offshore jobs & invest overseas, or create stock & housing bubbles with nothing real behind them.

without investment to create future jobs, an increase in SS taxes when they're already in surplus is pure robbing the workers to give to the capitalists, & the robbery will continue when the workers are asked to *repay* the borrowed money with the same high SS collection rates on their shitty jobs, or else given reduced SS benefits to look forward to.


4. a pay-go system can run forever, regardless of demographic bumps (& the boomers aren't as big a bump as its pretended anyway), so long as workers get a percentage of productivity increases in wages.

the problem is that they've gotten *none* of the productivity increases of the last 30 years in their checks; it's all gone to capital.


in short, your post is pernicious nonsense & your policy recs are pernicious too.

[Jim Lane]

31. After carefully reviewing your post, I stand by everything I wrote.

You write:

*"it's not regressive except for income over the cap...." Your statement is partly irrelevant and partly false. The irrelevant part is that, yes, it's precisely the cap that introduces regressivity into the taxation of wages. Everyone is taxed at the same percentage of their taxable income. What causes the poor to pay a higher percentage of their total wages than the rich is the cap. Your recognition of this basic fact supports rather than refutes my call to abolish the cap. The false part is your omission of the fact that, even without the cap, a tax limited to wages while exempting other forms of income (interest, stock dividends, capital gains, etc.) will fall more heavily on the poor, because they have a lower share of their income in those exempted categories.

*"however, payout is progressive." Quite so. I didn't say that the entire system is regressive; what I actually said was, "the Social Security tax is regressive." That indictment of the tax isn't undercut by the progressivity of the payout.

*"collections are still in excess of payments last time i checked, so why would you want to increase collections? SS isn't supposed to run substantial surpluses." More precisely, Social Security isn't supposed to run substantial long-term surpluses. Because of the particular fact of the baby boom, however (or, to look at it another way, the baby bust that followed the baby boom), it's necessary for the system to accumulate short-term surpluses for a few decades, then operate for a few decades at a deficit, accommodated by drawing on the previously accumulated surplus. This is well explained in a page that was on the Social Security website but that was taken down during the Bush administration (gee, I wonder why?). Go to the http://www.ssa.gov/history/ponzi.html|archived version> and scroll down to the section headed "The Logic of Pay-As-You-Go Systems".

*"this is pure bullshit: 'It must run a huge surplus now so that the Social Security Trust Fund will have ample reserves to pay benefits to the baby boomers'". Despite your vehemence, you haven't made clear your prescription for Social Security. Sometime in the next ten to twenty years, the system's annual tax revenues will begin to fall short of its annual obligations to beneficiaries. At that point, if there were no accumulated surplus and no Social Security Trust Fund, how would the promised benefits get paid?

*"collecting more money from workers now & borrowing it into the general to spend, mostly on war, doesn't do a goddamn thing to help pay for future boomer benefits." What it does is to generate special-issue Treasury bonds that are issued from the government to the Social Security Trust Fund. The bonds are obligations of the U.S. government. The right-wingers, from Bush on down, like to promote the falsehood that the Trust Fund consists only of worthless paper. That's because they're trying to lay the groundwork for stealing the money. (See for a good presentation of the conflicting views.) In fact, the Republicans have been pushing this idea since Social Security was created. (See : "The so-called reserve fund ... for old age insurance is no reserve at all, because the fund will contain nothing but the Government's promise to pay....") I and other progressives disagree with you, George Bush, and Alf Landon on this point. The bonds exist and, as I said in , I'm confident that the U.S. government will not, for the first time in its history, default on its bonds. The money to pay Social Security benefits will be available. The problem will be in the difficulties created for the non-Social Security portion of the budget, especially the pressure to cut other important government programs.

*Much of your post is inveighing against the uses to which the borrowed money has been put. I certainly agree with your criticisms of those right-wing policies, but the issue for the Social Security system would be roughly the same regardless of what the borrower chose to do with the money. I think there's some effect, because military spending tends to generate less FICA tax revenue than some other forms of federal spending, but spending on civilian pursuits would still leave the future retirees looking to the Trust Fund for a portion of their promised benefits. The issue isn't what the borrower did with the money but whether the borrower will pay it back. And, let's face it, Bush would have invaded Iraq regardless of how Social Security finances were being handled.

*"a pay-go system can run forever, regardless of demographic bumps (& the boomers aren't as big a bump as its pretended anyway), so long as workers get a percentage of productivity increases in wages." That would be true only if two conditions were met. First, the increase in productivity would have to be great enough to offset the change in the ratio of active workers to retirees. I don't know whether that's occurred or not. It's not worth much attention, though, because the second condition is, as you note, that the productivity increase benefits the workers. As you also note, this hasn't happened ("the problem is that they've gotten *none* of the productivity increases of the last 30 years in their checks"). So you're saying that, in an ideal world of complete economic justice, we wouldn't need the Social Security Trust Fund. Fine. When you've established an ideal world of complete economic justice, get back to me and we'll discuss the consequent changes in Social Security. Until then, we need the Trust Fund.

Raising or eliminating the cap makes Social Security taxation less regressive and improves the system's financial picture, thus lessening the need to demand payment on the Trust Fund bonds. It also recaptures, for the general population, some of the fruits of the productivity gains. It should be a high-priority goal for progressives.

[Hannah Bell]

38. response: i'll start from the last point.

"lessening the need to demand payment on the Trust Fund bonds."

Why do you think the bonds shouldn't be paid off? This was, supposedly, the point of assessing an extra 1-2% tax on every working individual the last 30 years - to build up the trust fund to pay for the boomers' retirement.

Well, they're retiring, & now you say that "savings" shouldn't be drawn on, but should keep building up. Why is that? To fund 30 more years of income tax cuts for the super-rich?

The peak year of boomer retirees will be 2019, just 10 years away. The majority will be dead by 2040.

How long do you suggest we wait to demand *repayment* of the extra money we paid in for 30 years, in excess of the cost of funding our parents' SS?

The money which was "borrowed," in the form of lower income taxes, by people who mostly don't pay SS tax at all, i.e. people who don't work for wages.

Your theory is working people should pay even more, forever, while capital never pays back shit.

[Jim Lane]

43. I absolutely never said that the bonds shouldn't be repaid; just the opposite, in fact

You've vehemently attacked a view that I never stated and don't hold.

Short response: I agree with you that the surplus, represented by the bonds, was accumulated for the purpose of funding Social Security benefits during the period of (roughly) 2019 through 2040. Therefore, the bonds should indeed be repaid when the repayment is necessary to meet that purpose. The beneficiaries, however, are better off if, while maintaining full benefit payments, the system draws down on the bonds as little as possible, because that way the bonds will last longer.

Longer version, spelling it out: Right now, the system's annual revenues exceed annual expenses. As long as we're in that situation, the surplus will accumulate. It's only when expenses exceed revenues that there's any need for the Social Security Administration to begin presenting any of the bonds in the Trust Fund and demanding payment on them.

You ask, "How long do you suggest we wait to demand *repayment* of the extra money we paid in for 30 years....?" I would have thought that my answer was obvious. We should wait to demand repayment until the system is running a current operating deficit, at which point the repayment is necessary to maintain the promised benefits.

The greater the system's current operating deficit, the more of the bonds will be presented for payment. The more that are presented and paid, the lower the Trust Fund will go.

On one set of pessimistic projections (which has been challenged), the Trust Fund will be exhausted at a time when the system's expenses still exceed revenues. That's the "crisis" and "bankruptcy" that Bush was trying to hype. Bush's misrepresentations aside, it's clearly in the interest of the beneficiaries that the Trust Fund not be exhausted.

Therefore, if we can improve the system's yearly revenue-and-expense balance now, thereby reducing the drawdown on the bonds, we can defer and perhaps eliminate the problem of Trust Fund exhaustion. Raising or eliminating the cap would produce just such an improvement in the system's balance. A 2001 Social Security advisory board report stated:

Making all earnings covered by Social Security subject to the payroll tax beginning in 2002, but retaining the current law limit for benefit computations (in effect removing the link between earnings and benefits at higher earnings levels), would eliminate the deficit. If benefits were to be paid on the additional earnings, 88 percent of the deficit would be eliminated.

(See the report ; this passage is on page 23.)

That's why I wrote of the removal of the cap as "lessening the need to demand payment on the Trust Fund bonds." It would indeed have that effect, and that would be a good thing.

[Hannah Bell]

44. I've read every SS report dating back to the 90s.

The dates for SS's impending bankruptcy have been pushed forward nearly every year until the current downturn. The mid-range forecasts

SS is currently collecting a surplus. Thus there's no reason to raise the cap, or raise SS taxes in order to collect *more* excess money that will have to be repaid (or not) from the general budget "later".

This is a tax on workers, & it benefits capital.

In 1983 Reagan & Greenspan "saved" Social Security by increasing the taxation rate over the rate required to fund then-current retirees & fund the mandatory 1-year cushion. This is what created the huge TF surplus.

The surplus money was then borrowed into the general fund, as mandated by the original SS legislation. At the same time, income tax cuts which benefited primarily the rich & corporations were enacted, & those have stayed more or less intact ever since.

Rescinding Bush's income tax cuts on the top 5% would pay off the entire TF debt in less than ten years.

This debt should be paid before *any* more money is borrowed from working people.

There's 2.4 trillion in the TF currently. Projected exhaustion date = 2037, by which time the majority of boomers will be in their graves.

$805 billion collected in 2008, $625 billion paid out, = nearly 200 billion in excess funds collected in 2008 from SS taxation & interest payments.

It's specious *bullshit* to pretend increasing SS taxation *now* is rational.

[Hannah Bell]

45. Second response:

"the increase in productivity would have to be great enough to offset the change in the ratio of active workers to retirees."

It's more than great enough.

Index Output/hr: 1987 = 77.3, 2008 = 122.8 = 59% increase.



http://data.bls.gov/PDQ/servlet/SurveyOutputServlet

Population growth: 1987: 242 million; current: 304 million = 25%

Over 65 as % of population 1980: 11.3% 2005: 12.4% (1.1% increase)


% US population <19 v. 20-64 v. over 65 + dependency ratio (working/non-working/(>65)

1940: 34.4 58.7 6.8 DR 5.9: 4.1 (59: 7 = 8.4:1)
1950: 33.9 57.9 8.1 5.8: 4.2 (58:8 = 7.3:1)
1960: 38.4 52.3 9.2 5.2: 4.8 (52: 9 = 5.8:1)
1970: 37.9 52.3 9.8 5.2: 4.8 (52:10 = 5.2:1)
1980: 32.0 56.7 11.3 5.7: 4.3 (59:11 = 5.4:1)
1990: 28.9 58.7 12.5 5.9: 4.1 (59:13 = 4.5:1)
2000: 28.6 59.0 12.4 5.9: 4.1 (59:12 = 4.9:1)
2005: 27.5 60.0 12.4 6.0: 4.0 (60:12 = 5:1)

http://www.infoplease.com/ipa/A0110384.html

Contrary to the hype, >65 as % of the population hasn't changed much since 1980. Furthermore, the years 1960-1970 were the period in which the smallest % of workers supported the largest number of dependents: they were pretty good years economically.

Furthermore, 2000-2010 were the years in which the *largest* percent of workers supported the *smallest* number of dependents: they pretty much sucked, economically.

Furthermore, currently the ratio of working age people to elderly dependents = close to what it was in the 70s.

In 2025, past the height of boomer retirement (it's the year folks born in 1960 turn 65), this is the demographic forecast:

Under 19: 27%
20-64: 54.5%
Over 65: 18.5%

Dependency ratio: 5.5: 4.5 (better than the 60's & 70s)

Workers to >65: 3:1 (versus about 4.5-5.0:1 now.

http://docs.google.com/gview?a=v&q=cache:UJsvlaAcMzAJ:www.census.gov/prod/2/pop/p25/p25-1131.pdf+us+population+over+65+2025&hl=en&gl=us&sig=AFQjCNHRPacYBqUM7ldtE6PmCVQa9xHwvw

This is the straw that will break the camel's back? Bullshit. Consider that we currently have about 10% unemployment & 10% *underemployment*, & we still import workers, do you really TOO FEW WORKERS is the problem?


No, the problem is capital wants young workers to work for peanuts & old people to die.

"When you've established an ideal world of complete economic justice, get back to me and we'll discuss the consequent changes in Social Security. Until then, we need the Trust Fund."

We have NEVER needed the Trust Fund. The Trust Fund is money taken from workers & given to capital. SS was set up to take from current workers & give to retirees. When the pool of workers is smaller, supply & demand dictates their wages should be LARGER, or new workers should migrate into the pool.

Either way, there's no problem PRODUCING enough goods to feed, clothe & house everyone. Nor is there a problem getting workers. In fact, under modern production methods, one country (e.g. china) can literally produce enough goods to supply the world.

The problem is capital wants to pay shit wages & take all the profit, & taxing workers MORE won't fix it.

[W_HAMILTON]

32. You know...

Regarding your first point:

"1. it's not regressive except for income over the cap, which i believe is currently about $106K. however, payout is progressive. payout for someone who made 1mill is the same as for someone who made $100K."

I thought the same when I read the other poster's message. But when I really think about it, I'm not sure this is the case. Maybe on a practical level, but not a theoretical level.

While I'm sure they would never do this, I would lift the cap COMPLETELY. Of course it would mean higher amounts paid out, but we would also be bringing a lot of money into the system, and with the time value of money, it could be incredible amounts down the road. Of course, it would have to be paid out down the road, but what if the person dies? Then the obligation is shorter, and may be removed entirely.

I know that the system was designed as a safety net, and people making millions and hoarding millions do not need social security payments in their later years. But I do see some aspect of it regressive, even though that is probably not the best term to use. Rich and poor people alike get a proportionate payout, but what if there is no payout? The poor people will contribute on most (possibly all) of their income, whereas the rich people may only contribute a small portion of their overall income.

Personally, I would just bump up taxes if we need to cover these services. But we know that in today's political climate, both parties are scared as hell of raising taxes even .0001% since most voters will raise hell, so I'm not sure what to do.

[Yupster]

41. There should be two changes

1. Eliminate the cap.

2. Make the system universal. Bring in those workers who are currently exce,pt from social security. The largest group is public school teachers. Many people don't know that millions of teachers do not pay into social security. There's no reason they shouldn't. Bringing them into the system would be a huge help to social security.

[Hannah Bell]

23. yes. raise their income taxes.

[Mari333]

33. how much are they spending on 2 ILLEGAL OCCUPATIONS?

dont fck with my SS..I get widows SS when I turn 60, and my husband died on the job and paid every penny into SS. Im on the street if I dont get SS in 2 yrs. no, we arent all fatcats.

[4lbs]

37. Raise the Social Security tax cap from $106,800 to $1 million.

Then not only would Social Security be fully funded for the next 50 years, but a full government public option in healthcare could be as well.

The current FICA rate is 7.65% (15.3% for self-employed), which is broken down into 6.2% for Social Security, and 1.45% for Medicare. However, it applies only to an employee's first $106,800 for 2009.

Thus, even if a person has $250,000 in income, they will pay $6621 in FICA taxes (7.65% of 106,800), instead of $19125 (7.65% of 250,000).

Raising the cap to $1 million will bring in an extra $150 billion annually. That's based on my very conservative estimate of 20 million people, that each earn more than $150K, paying an extra $7500 in FICA taxes on average. The increase in FICA taxes would be mostly offset by them being able to have a cheaper public health insurance option.

[Le Taz Hot]

42. Remove the fucking cap!

Problem solved.