Social Security is not going broke .. because it can't

[blackascoal]

5 Huge Myths About Social Security

Myth No. 1: Social Security is going bankrupt
The biggest misunderstanding out there relates to Social Security's financial challenges. (A Google search for "Social Security bankruptcy" turned up 50 million hits.) But the fact is that Social Security isn't going bankrupt, nor is bankruptcy really possible as the system is currently set up.

Here's the source of the confusion: Historically, Social Security has collected more than it paid out. The extra money built up in a trust fund that collects interest. But due to demographic and economic changes (more on that in a minute), it's expected that insurance payments will begin to exceed income in 2021. Around 2033, the fund will run out.

But even then, the revenue Social Security collects each year would still be enough to pay out about three-quarters of scheduled benefits as far as the eye can see.

Source: Social Security Administration.

In short, to say Social Security is going bankrupt, you have to ignore its revenues. But by such a weird standard -- ignoring revenues and seeing how long it would take expenses to drive tangible net assets to zero -- the average member of the Dow would go "bankrupt" in just under three months. (Fascinating bonus trivia: At nine months, Microsoft would survive the longest, while United Technologies wouldn't last two hours, and eight Dow blue chips - DuPont, Boeing, IBM, Pfizer, Hewlett-Packard, Procter & Gamble, AT&T, and Verizon -- would already be bankrupt. Again, that's because ignoring revenues doesn't make sense.)

Of course, doing nothing would mean that Social Security won't be able to meet its full obligations two decades from now. But it's not going bankrupt.

more
http://www.dailyfinance.com/2012/10/15/5-huge-myths-about-social-security/

So if it isn't going broke .. why is Obama so anxious to cut it?

ANSWER: Wall Street

Wall Street's Plan to Push Obama to Betray Those Who Elected Him
Through its lobbying group Third Way and media mouthpieces, Wall Street is determined to destroy the social safety net.
http://www.alternet.org/news-amp-politics/wall-streets-plan-push-obama-betray-those-who-elected-him

 

[Cancel 2020.1]

Even if the 3/4 figure is correct - who is going to tell seniors that their checks will be cut by 25%?

And this is fuzzy math, anyway. SS doesn't add up, and the only thing I've ever agreed with Rick Perry on is that it's a Ponzi scheme. It's a bad system, that doesn't fully take into account the life expectancy changes we are going to see in the next 10 year, much less the next 50.

 

[Cancel 2016.2]

5 Huge Myths About Social Security

Myth No. 1: Social Security is going bankrupt
The biggest misunderstanding out there relates to Social Security's financial challenges. (A Google search for "Social Security bankruptcy" turned up 50 million hits.) But the fact is that Social Security isn't going bankrupt, nor is bankruptcy really possible as the system is currently set up.

It is incorrect to call it a myth. It can and will go bankrupt if left in its current form. That said, the fix is relatively easy.

Here's the source of the confusion: Historically, Social Security has collected more than it paid out. The extra money built up in a trust fund that collects interest. But due to demographic and economic changes (more on that in a minute), it's expected that insurance payments will begin to exceed income in 2021. Around 2033, the fund will run out.

But even then, the revenue Social Security collects each year would still be enough to pay out about three-quarters of scheduled benefits as far as the eye can see.

If I promise you 100% and give you 75%, I am defaulting on 25%. When you consistently pay out more than you receive you eventually bankrupt the system. Just because new flows can fund 75% of what you were supposed to pay... eventually you are going to run out if the problem isn't fixed.

Source: Social Security Administration.

In short, to say Social Security is going bankrupt, you have to ignore its revenues. But by such a weird standard -- ignoring revenues and seeing how long it would take expenses to drive tangible net assets to zero -- the average member of the Dow would go "bankrupt" in just under three months. (Fascinating bonus trivia: At nine months, Microsoft would survive the longest, while United Technologies wouldn't last two hours, and eight Dow blue chips - DuPont, Boeing, IBM, Pfizer, Hewlett-Packard, Procter & Gamble, AT&T, and Verizon -- would already be bankrupt. Again, that's because ignoring revenues doesn't make sense.)

Of course, doing nothing would mean that Social Security won't be able to meet its full obligations two decades from now. But it's not going bankrupt.

more
http://www.dailyfinance.com/2012/10/15/5-huge-myths-about-social-security/

So if it isn't going broke .. why is Obama so anxious to cut it?

ANSWER: Wall Street

Wall Street's Plan to Push Obama to Betray Those Who Elected Him
Through its lobbying group Third Way and media mouthpieces, Wall Street is determined to destroy the social safety net.
http://www.alternet.org/news-amp-politics/wall-streets-plan-push-obama-betray-those-who-elected-him

It is the ongoing revenue that you are getting confused with. Who is going to continue paying into a system when they know the government can default on what they are promising in return? Once the US government defaults, their credibility is gone.

Again, the solution is relatively simple and I doubt they ever let it come to the above. That said, if they do nothing it will indeed default and thus lead to a bankrupt system.

 

[blackascoal]

Even if the 3/4 figure is correct - who is going to tell seniors that their checks will be cut by 25%?

And this is fuzzy math, anyway. SS doesn't add up, and the only thing I've ever agreed with Rick Perry on is that it's a Ponzi scheme. It's a bad system, that doesn't fully take into account the life expectancy changes we are going to see in the next 10 year, much less the next 50.

It's a system that has kept millions of Americans alive since 1935.

You want to replace that with what?

 

[Bonestorm]

Of all the hare-brained reasons why Social Security is going to die, the idea that people will stop paying taxes is probably the stupidest I've heard.

 

[007]

SS is not going broke.
Obama and his hacks will seize all 401ks and IRAs to fund it.

 

[Cancel 2020.1]

It's a system that has kept millions of Americans alive since 1935.

You want to replace that with what?

I want to privatize it, where it will work better & work indefinitely, and yield better returns for seniors so that they will better be able to keep up with cost-of-living increases that are inevitable as the years go by.

As a true progressive, it boggles my mind to see other progressives argue for the status quo on SS, which is clearly unsustainable in the long-run. In fact, the only way politicians will sustain it will be to cut into many other programs that progressives hold dear to pay for it.

 

[blackascoal]

It is incorrect to call it a myth. It can and will go bankrupt if left in its current form. That said, the fix is relatively easy.



If I promise you 100% and give you 75%, I am defaulting on 25%. When you consistently pay out more than you receive you eventually bankrupt the system. Just because new flows can fund 75% of what you were supposed to pay... eventually you are going to run out if the problem isn't fixed.



It is the ongoing revenue that you are getting confused with. Who is going to continue paying into a system when they know the government can default on what they are promising in return? Once the US government defaults, their credibility is gone.

Again, the solution is relatively simple and I doubt they ever let it come to the above. That said, if they do nothing it will indeed default and thus lead to a bankrupt system.

Ignoring revenues will get you any conclusion you want .. but ignoring revenues is ignoring the facts.

75% is only if we do nothing.

Myth No. 2: Meeting Social Security's future shortfall is really hard

We only need to come up with about 0.9% of GDP in order to make Social Security's revenues match up with its expenses for the next 75 years. To put that into perspective, 0.9% is close to the cost of unemployment insurance, the high-end Bush tax cuts, or one-fifth of the Defense budget. That's not insignificant, but it's hardly apocalyptic.

Most in US favor tax hike to save Social Security
http://www.thestate.com/2012/08/27/...-hike-to-save.html#.URloCh1ZWSo#storylink=cpy

 

[blackascoal]

I want to privatize it, where it will work better & work indefinitely, and yield better returns for seniors so that they will better be able to keep up with cost-of-living increases that are inevitable as the years go by.

As a true progressive, it boggles my mind to see other progressives argue for the status quo on SS, which is clearly unsustainable in the long-run. In fact, the only way politicians will sustain it will be to cut into many other programs that progressives hold dear to pay for it.

It boggles my mind listening to anyone favoring privatization of SS.

Any idea what the program would look like now had Bush privatized it?

There is probably NO PROGRAM that "progressives" hold more dear than Social Security and Medicare.

 

[Cancel 2016.2]

Ignoring revenues will get you any conclusion you want .. but ignoring revenues is ignoring the facts.

75% is only if we do nothing.

Myth No. 2: Meeting Social Security's future shortfall is really hard

We only need to come up with about 0.9% of GDP in order to make Social Security's revenues match up with its expenses for the next 75 years. To put that into perspective, 0.9% is close to the cost of unemployment insurance, the high-end Bush tax cuts, or one-fifth of the Defense budget. That's not insignificant, but it's hardly apocalyptic.

Most in US favor tax hike to save Social Security
http://www.thestate.com/2012/08/27/...-hike-to-save.html#.URloCh1ZWSo#storylink=cpy

No, it is not ignoring facts.

If a person files for bankruptcy because they cannot fund all of their liabilities does that mean they won't have any future revenue? Or does it simply mean they are currently insolvent?

You cannot arbitrarily cut expenditures and pretend all is well.

Again, it is an easy fix, so I agree that myth two is indeed a myth.

 

[Cancel 2016.11]

Onceler has this thing about SS. I try to close my eyes and not look. It's like when I met the man of my dreams and I was starry eyed enough to think he was the perfect man. And then we went to the movies, and he talked! And I hate when people talk in the movies. I couldn't believe he talked in the movies, and I was like, well there you go, he does have a fault.

We laugh about that now. You know, about the fact that I once thought he only had one fault.

Anyway, yeah, Onceler's weird SS thing is the message board equivalent of talking in the movie theatre. But what are you going to do. Nobody's perfect. Best last line of a movie ever!

 

[Cancel 2020.1]

It boggles my mind listening to anyone favoring privatization of SS.

Any idea what the program would look like now had Bush privatized it?

There is probably NO PROGRAM that "progressives" hold more dear than Social Security and Medicare.

Privatization was demonized. It would work better, and yield higher returns for seniors. Every time I bring that up, I'm reminded that it's not an "investment" program. But if it works better as an investment program, and seniors are more secure as a result...should that be dismissed out of hand?

It's a program that worked brilliantly for years, but that is not sustainable anymore. The sooner that we realize that, the less pain there will be.

 

[Cancel 2016.2]

Of all the hare-brained reasons why Social Security is going to die, the idea that people will stop paying taxes is probably the stupidest I've heard.

IF they do nothing and arbitrarily cut benefits by 25% it will be considered a default by the US government. In terms of faith and credit the US will lose credibility. If you think people are going to continue paying into a system that can fuck them over to that extent without recourse... you are nuts.

 

[Cancel 2020.1]

Onceler has this thing about SS. I try to close my eyes and not look. It's like when I met the man of my dreams and I was starry eyed enough to think he was the perfect man. And then we went to the movies, and he talked! And I hate when people talk in the movies. I couldn't believe he talked in the movies, and I was like, well there you go, he does have a fault.

We laugh about that now. You know, about the fact that I once thought he only had one fault.

Anyway, yeah, Onceler's weird SS thing is the message board equivalent of talking in the movie theatre. But what are you going to do. Nobody's perfect. Best last line of a movie ever!

You're a Seinfeld fan, right? I love that one where Elaine is ranting about abortion and boycotting a pizza place because of it, and has a crush on that truck driver guy. Jerry gets her to ask him his position on abortion, and he says something like, "One of these days, we'll have enough justices to overturn that law."

The look on her face was priceless.

 

[blackascoal]

Onceler has this thing about SS. I try to close my eyes and not look. It's like when I met the man of my dreams and I was starry eyed enough to think he was the perfect man. And then we went to the movies, and he talked! And I hate when people talk in the movies. I couldn't believe he talked in the movies, and I was like, well there you go, he does have a fault.

We laugh about that now. You know, about the fact that I once thought he only had one fault.

Anyway, yeah, Onceler's weird SS thing is the message board equivalent of talking in the movie theatre. But what are you going to do. Nobody's perfect. Best last line of a movie ever!

:0)

Privatizing SS is kinda' creepy.

A bullet dodged

What would have happened if George W. Bush had actually succeeded in his plan to privatize Social Security? Ask the Italians.

Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.

The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns.

…

Gaetano Turchetta, a Rome office manager, made the irreversible move to a private plan after a union representative boasted of the potential for 20 percent annual returns. The 43- year-old father of three now says he would sign with “two hands and two feet” if he could switch back.
http://krugman.blogs.nytimes.com/2009/01/05/a-bullet-dodged/

 

[Cancel 2016.11]

You're a Seinfeld fan, right? I love that one where Elaine is ranting about abortion and boycotting a pizza place because of it, and has a crush on that truck driver guy. Jerry gets her to ask him his position on abortion, and he says something like, "One of these days, we'll have enough justices to overturn that law."

The look on her face was priceless.

I love that one, and she really doesn't want to dump him (I think) but she has to because she will never live it down if she doesn't. That is a great one.

 

[Cancel 2016.2]

It boggles my mind listening to anyone favoring privatization of SS.

Any idea what the program would look like now had Bush privatized it?

There is probably NO PROGRAM that "progressives" hold more dear than Social Security and Medicare.

Any idea of what SS would look like if we had privatized in the early 90's?

Privatization does not mean all money must be invested in the stock market. That is simply the fear tactics used by some on the left to keep the federal government in control of this ponzi scheme.

That said, the donut hole solution is the more likely one to occur. That and having the full retirement age tied to average life expectancy.

 

[blackascoal]

IF they do nothing and arbitrarily cut benefits by 25% it will be considered a default by the US government. In terms of faith and credit the US will lose credibility. If you think people are going to continue paying into a system that can fuck them over to that extent without recourse... you are nuts.

As you've said .. the fix is easy .. so why trash the program?

 

[Cancel 2016.11]

:0)

Privatizing SS is kinda' creepy.

A bullet dodged

What would have happened if George W. Bush had actually succeeded in his plan to privatize Social Security? Ask the Italians.

Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.

The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns.

…

Gaetano Turchetta, a Rome office manager, made the irreversible move to a private plan after a union representative boasted of the potential for 20 percent annual returns. The 43- year-old father of three now says he would sign with “two hands and two feet” if he could switch back.
http://krugman.blogs.nytimes.com/2009/01/05/a-bullet-dodged/

Thanks great link! but it will send Superfreak sideways. Nothing enrages him more than a Paul Krugman dose of reality!

Watch...

 

[blackascoal]

Any idea of what SS would look like if we had privatized in the early 90's?

Privatization does not mean all money must be invested in the stock market. That is simply the fear tactics used by some on the left to keep the federal government in control of this ponzi scheme.

That said, the donut hole solution is the more likely one to occur. That and having the full retirement age tied to average life expectancy.

Sorry .. that's crazy IMO.

You do recognize that you're dancing for Wall Street, don't you?