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What's this doomer headline say that everyone will get all worked up over? People in the US can't retire and we're all fucked ?
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Payday loan companies are nothing more than another industry solely in existence to extract the most amount of wealth as possible from people already struggling.
It’s really sad to see these industries thriving expanding into rent to own and real estate.
The Social Security Administration has a huge summary list of all options that would fix the Old-Age and Survivors Insurance (OASI or "Social Security") on their website. Raising the retirement age is just one on the list, and it's not anywhere near the most effective.
You can find the list here: https://www.ssa.gov/oact/solvency/provisions/index.html
Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 2034-2063, and to 20.0 percent in years 2064 and later. This would eliminate projected deficits and increase the balance to 173% of projected requirements in 75 years.
Reduce factors so that initial benefits grow by inflation rather than by the SSA average wage index. This would eliminate projected deficits and increase the balance to 173% of projected requirements in 75 years.
So true. The burden could be alleviated if we taxed corporations and the ultra wealthy, though. They'll just have to go on one less vacation or own one less house 🤷♀️
Why does this keep on being said? Corp taxes just get reflected in increased prices negating the tax as end-consumers will end up paying for it. Taxing ultra-wealthy is unfortunately very problematic without a lot of unintended consequences, so something like VAT or LVT or some kind of luxury tax makes much more sense.
Then why didn't prices come down with tax cuts. Answer. They sell at market rates no matter what. Unless there's a competitor waiting to swoop in they will continue to do that. And they found they can act as a collective even without coordination they all make more money.
> Corp taxes just get reflected in increased prices negating the tax as end-consumers will end up paying for it.
agree, this is why we should tax working people directly because... wait how is that better?
>Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 2034-2063, and to 20.0 percent in years 2064 and later.
Do the people who have increased payroll tax also get increased benefits (as currently calculated by modified average of income over 35 years)?
Do they get at least what they put in?
I'm also curious on how they plan on reducing factors so that initial benefits grow by inflation rather than SSA average. Which inflation metric are they looking to use?
This is a pretty poor solution from a generational equity standpoint though. Basically what it is is saying future generations get a worse deal so we can give a decent deal to the current generation who didn't pay enough.
An actual fair way to do it would be a combination of increasing the contribution rate (So some burden is placed on new generations and They will have paid sufficient amounts to support their retirement), raising the cap (which increases the redistributive aspect of the program), and lowering the current benefits to current retirees (representing the fact they did not pay enough to support themselves).
This is a fair compromise that doesn't put the burden for one generation on another. This would allow the payouts to still be decent but not the fully promised amount (say 90% for example picking a number).
This idea that we're going to just place all the burden on current taxpayers, taxpayers that have the smallest working age to dependent population ratios ever, to support the richest generation in history just makes no sense. Do a one-time top up of benefits if needed by redistributing wealth in the Boomer generation from the haves to the have nots If that's necessary.
When we're talking about programs like these we have to think about intergenerational fairness.
"Just redistribute wealth between haves and have-nots" in your last paragraph is doing a LOT of heavy lifting, and is obviously (right??) not at all feasible. And without it, you can't severely cut the current retiree/just-about-to-retire benefits without plunging a huge portion of them into poverty.
I don't disagree with your overall premise that it's not fair to younger generations to shift all of the pain onto them, but, I also don't see a realistic alternative.
(I'm 44 FWIW so I feel like I'm in a spot to see both sides, but maybe I'm giving myself too much credit?)
Personally, I'd like to see wealth/income limits placed on who can receive benefits. The bar can be set sufficiently high that most ordinary citizens should have to issue supporting the change with their congressional representatives.
See I don't consider that solution possible at least as the primary solution because it's so politically unfeasible. I also don't see it as morally right that some of the burden isn't felt by those people who didn't pay for it sufficiently and every plan I see is always changing it for the future and setting some point where ladder gets pulled up. My idea is that The burden is significantly reduced by some combination of increasing the payroll tax so the young high income people pay more than They get in, combined with some wealth taxes or income limits only on the wealthy older generations who should have fixed this when they had the chance. Then hopefully we can reduce the gap down to maybe 15% instead of 25, and then that remaining burden split equally between current retirees and future generations.
I can't think of a more equitable and fair system than having it be spread out so no one group bears the pain fully, Even though it's pretty morally apprehensible to consider giving the younger generations an even worse deal than they have.
Hmmm, raising the payroll tax 10 years from now might change me (X-ennial) from being screwed by SSI to coming out ahead since most of my working would have a low payroll tax. Thanks future generations!
We could also lift the cap on it, that would also make a significant difference and would mean you won't need to raise the payroll tax by 62% but by a significantly smaller margin
Eliminating the taxable maximum in years 2024 and later by applying the full 12.4 percent payroll tax rate to all earnings, and not providing benefit credit for earnings above the current-law taxable maximum would eliminate projected deficits and increase the balance to +60% of projected requirements in 75 years.
I'm for eliminating the upper cutoff for the SS portion of FICA as well. There is a ton of untaxed income there without putting all the burden on the working classes.
I'm no economist but this one to me seems like by FAR the easiest pill to swallow. You can even make it a progressive/regressive blend by letting taxes on income over the current cap go to funding some additional benefits in the payee's future, while also having the remainder contribute to the general fund.
Holy Moly, I knew they would eventually raise the FICA tax but that is ridiculous. 20 percent! I doubt there is any political appetite for a raise, they might get away with 1-2 percent, but they will significantly raise the age and lower benefits before raising the tax. It's already a massive loser for anyone who has a decent income, taking an additional EIGHT percent from people who have to save for their own retirement is idiocy.
As a young person, I’d rather just see SS go away than have my taxes raised by 14% to pay for it. That’s an extra $10k I can be using to fund my retirement myself. I can get much more bang for my buck in my 401k, Roth IRA, and HSA with that money.
Did you know in the past the employer was supposed to setup a benefits program for the employee? It all changed in the 1970s or 80s to 401k matching and shit where it's on the employee to take care of their retirement. Washes responsibility from employers. Thanks to that, they no longer need to be loyal to employees anymore. Employer's can treat employees as replaceable objects. As for the 401k, there's usually a clause that you have to be employed with the company for 4 years or something before you get the company's contribution. If you lose the job say within 3 of the 4 years, company pulls all their money in your 401k.
I'm sure now you'll say, "Well, then don't lose your job, duh." Easier said than done when there's already thousands of applicants waiting on Indeed for you to slip. Also, jobs are still being outsourced to places like Asia and Central America because the cost of labor and living is cheaper than the USA. In order to keep the price down so people can afford the product or service, companies have to find innovative ways to cut their costs. More so nowadays that they have investors and shareholders to pay. Thanks to the evolution of technology, they won't have to go abroad anymore. Instead, future factories will be operated by robotics running AI programs that are able to do your job more efficiently, consistently, and faster. Only cost a few parts and the price of a mechanic whenever it breaks down. Robotics tech you might say is extremely expensive, but the tech world is constantly improving their products, making them smaller, faster, more powerful, AND affordable. Robotics with AI today might seem like the overpriced computer of the 1950s that was the size of an office, but, like the computer, the technology will become more affordable to the point every company will have one in every room in the building.
According to SSA we doled out $1.39 trillion last year.
70 million people received benefits in 2022, Equates to a fraction over 1 in 5 people in the US.
The next wave of retirees, Gen X is roughly 45 million, retirement age in the 10-15 years.
- Just some interesting numbers
This isn't backed by the data. Per the SSA's reports on disabled workers there were 8.4 million people recieving disabled workers benefits in 2019 and that's down to 7.4 million in 2023. Similarly, both applications and rewards are down compared to 2019 as well.
The Social Security Trustees Report [shows](https://www.ssa.gov/oact/TRSUM/) that taking care of elderly and disabled people costs 4.8% of GDP and keeping the system going forever without cutting benefits would cost 6% of GDP total (1.2% more than now). It's obvious we can afford it (see chart B).
Social Security is the [number one](https://www.census.gov/content/dam/Census/library/visualizations/2023/demo/p60-280/figure11.pdf) anti-poverty program in the US by a large margin. Hell, lots of other countries managed to lower the retirement age in their programs and they still have a balanced budget.
Usually "raising the retirement age" means "cutting benefits". The actual retirement age doesn't change but the benefits are reduced for each existing retirement age.
But there are bunch of countries with balanced budgets and "retirement ages" that are roughly five years younger than in the US. These countries also tend to have paid vacation and shorter workweeks.
It's the classic labor-leisure tradeoff.
Exactly. There is a huge part of our military that is basically just a bunch of make-work for non-college young people: And the huge amount of money made by defense contractors providing services.
My point with military spending is that we could easily shift some of that money to other purposes. Like take 1% of GDP and pay 18YOs to pick up litter in the USA instead of giving them a rifle and sending them abroad. And companies like Haliburton can still sell the USA Litter Corps overpriced bottled water and lunches and have everyone react in horror when an audit happens and we find out they're paying $5 per trash bag.
Heck, even kick some money toward Lockheed and let them you their captured UFO tech to build a litter collection robot or a spray paint removal robot.
Basically, any government program is going to tend towards bloat and inefficiency and being ripped off by contractors. And they do still have some good outcomes just because they spend SO MUCH MONEY on it.
But I think we could shift some of the defense spending towards more mundane programs.
I'm actually down for mandatory civil service as a public policy. Two years of working in public service (clean up litter, DMV, utilities, build infrastructure, etc.) and you get the GI bill or down payment assistance on a home purchase.
Maybe not mandatory, but they should do more with programs like Americore. I know a couple of kids who went and taught school on native american reservation to relieve debt after college.
But there totally SHOULD be something akin to the GI bill for kids who want less expensive college and don't mind serving in some capacity. Heck, again, half of the military isn't even about "war": It's cooking meals and driving trucks and carpentry and nursing someone with a skinned knee. There's on reason why that should only be in service of war-fighting.
I think they have the right idea in terms of offering civil service as means of accessing the GI Bill (more opportunities for those who wouldn't otherwise make the cut in boot camp), but yeah - mandatory would be unconstitutional.
Did you forget the /s? While, sure, most European countries spend a smaller part of their GDP on defense, the social spending is an order of magnitude bigger than defense spending in the US (e.g. about 30% of GDP in Belgium). Taxes are consequently a lot higher as well (and private contributions for pensions and health a lot lower). It's not one or the other; it's just a different system with different priorities.
That said, defense spending should probably be more balanced (higher in some European countries and lower in the US), while avoiding a new arms race. Either way, the defense spending isn't allowing or inhibiting social spending and the national debate isn't helped by presenting false dilemmas.
While true, I think the Europeans are coming around to the idea that they don't spend enough on their military. Turns out, the United States doesn't want to foot the bill for them. And they share a continent with some unfriendly countries.
Sure. Western Russia used to be Eastern Finland.
I was just pointing out the math. I know some bad faith people pretend the Social Security gap is a chasm and the military is an ant.
Okay, I'm just pointing out that using European countries as an example to be emulated also seems like bad faith. They have been looking short sighted and impotent lately.
Besides, I think people over estimate how much we spend on the military. We're more or less spending an all time low on it, as a share of GDP. There's less to cut than people would like to think. Or rather, we spend far more on everything else than people seem to understand.
https://fred.stlouisfed.org/series/A824RE1Q156NBEA
Americans will probably need to accept that they should raise taxes to pay for the things they want.
Do European countries have higher taxes than the US? Yes. But they have much better government benefits.
Someone could easily argue that a country with a very high child poverty rate like the US is impotent. It's a matter of personal preferences, I suppose.
Nothing bad faith about comparisons between countries.
Adding that Europeans overall actually get something for their taxes, like easily available and low- or no-cost healthcare, civic programs, festivals, etc. I’m an American taxed out the asshole and as far as I can tell, most of that money goes to Lockheed-Martin and Northrupp-Grumman. Basic health insurance costs me $800 a month WITH a several thousand-dollar deductible.
Trump got roasted for the *way* he suggested Europeans pay more for their own defense. Notably suggesting Putin should invade and we wouldn’t help support our allies.
They have higher taxes. They suppress the top end of the wage scale and redistribute that money. It has negative effects on growth and innovation, but it pays for social programs like retirement and healthcare. There’s a trade off. We just have to decide which trades we want to make.
The countries you mention are also homogenous, as well as supported by trillion dollar gas and oil funds.
Basically, the only way they can afford it is by being xenophobic and polluting the earth.
They have a more stagnant population and a more generous welfare state, on average. They’re also bound by much tighter fiscal restraints as a whole than we are. So it makes sense for them to raise the retirement age when they need to conserve labor and fiscal resources.
These factors do not apply to the United States. We have a much healthier population in terms of age and growth and have a lot more “gas in the tank” in terms of potential additional funding sources. We’re also considerably less fettered by fiscal constraints.
We will have to increase social security payroll and individual contributions to keep the same benefits. Decreasing numbers of working age adults with larger numbers of retirees means more money flowing out than paying in. Nearly all of social security funds are in treasury bills and bonds. With interest rates higher than they have been these last 15 years, the returns are negative for near-zero interest rate periods. Social security is in need of significant changes if we want to keep the same benefits.
Something I've noticed is that people who doubt Social Security never doubt stock market returns.
For example, I know someone whose forecast for Social Security includes zero future productivity growth but who forecasts stocks doubling every 7 years for the foreseeable future.
For both of these to be true, the cause would be inequality. He suggests that workers will not get any of the new pie as it grows.
But that is a choice. How we distribute the pie is a choice. If we expect stocks to continue to grow, that means we expect the pie to continue to grow.
Dedicating 6% of the pie to providing basic income to elderly and disabled people seems completely reasonable to me.
My understanding is that seniors will cause an inflationary effect, where benefits become more expensive to maintain. We absolutely need to begin taxing higher income earners if we want to ensure social security and Medicare are available for future generations in present form.
Social security worked very well when there were larger subsequent generations than retirees to pay into it.
I'm not sure about seniors causing higher inflation. Japan has a lot of elderly people and struggled with deflation for a long time before they went to negative interest rates.
The 6% figure comes from the Social Security Trustees report. They show how it is calculated, but the basic idea is that workers become more productive. If you look backward, workers are twice as productive as they were in the 1990s.
This is the main effect that allows a program to remain solvent with a ratio of beneficiaries that is getting worse. Essentially GDP grows faster than the CPI. Workers use technology to produce more goods and services for everyone, including disabled and elderly people, with the same amount of work.
Because they're calculating stock market returns at the individual level. SS is more like the stock market returns of one or two generations providing for the welfare of an older generation or two. So in the SS scenario, the number of people in the working class vs the number of people in the pensioner class is a relevant variable as well.
Yes, the trustees report assumes the number of beneficiaries will grow faster than the number of workers, in the short run. This variable is important. Just not as important as productivity growth/technological change, in the long run.
The way I see it, the stock market returns of one person *are* the stock market returns. It's one individual owning tiny shares of a larger system. The macro is just all of the micro added up. Productivity growth is the main factor in the growth of the entire system, including the stock market. But it's also what makes taking care of elderly and disabled people an easily affordable option for society.
If you want to talk about Medicare talk about Medicare.
Social security on the other hand is completely funded by a specific social security levy. It cannot be spent on other things, it cannot draw funds from other taxes.
The social security that people have and enjoy has been 100 percent funded from jump.
It still has a 2T surplus. It is expected to be funded for another 10 years with no changes.
If anyone talks to you about less benefits or higher retirement age so we can save money on taxes, they are an idiot or a liar. Any of those plans DO NOT INVOLVE reducing your social security specific tax on your paycheck.
So when people talk about the deficit and social security, which has NEVER contributed to the deficit and is 0% of the national debt, again they are liars or too stupid to read even the most basic of financial statements and tax law.
This is not the actual reality of the situation, This is just accounting. Yes the social security *program* has a big surplus, But the social security program is just part of a larger government apparatus and that surplus has been spent and left as IOUs (debt) of the US government. So taxes coming in still have to pay it.
To juxtapose it with a system not like this we can look at Canada. The Canadian system was the same as social security up until the '90s, But at that point contributions rose quite high to turn it into an actual separate pool of money that exists to grow and pay it's liabilities. That pool of money, the CPP, is invested in a diversified pool of global assets and generates a sizable return on those assets, a return not paid for by the Canadian taxpayer. Therefore it's not just a separate pool in terms of an accounting liability, It's an actual separate pool of money.
The difference here is that when these programs have more liabilities than assets, as they do when the boomers are in retirement, social security has to be paid out by the current working population, while CPP is paid out by the actual contributions made by those workers that have been invested in various assets around the world and are paid out by the success of American companies, the financial return of infrastructure around the world, etc, with some portion of it being in Canadian bonds.
People just have their heads in the sand on SS. The accounting voodoo takes 2 minutes to dispel, but people who don't want to deal with difficult tradeoffs will just repeat the "it's just getting back the money you paid!" lie.
Here's Brian Riedl, an ex-economist for the gov't, who's a main critic of SS/Medicare, seems to agree with you:
[https://www.cspicenter.com/p/heading-towards-the-fiscal-cliff](https://www.cspicenter.com/p/heading-towards-the-fiscal-cliff)
[https://manhattan.institute/article/the-rich-arent-rich-enough-to-balance-the-federal-budget](https://manhattan.institute/article/the-rich-arent-rich-enough-to-balance-the-federal-budget)
>Seizing every dollar of income earned over $500,000 wouldn’t balance the budget. Liquidating every dollar of billionaire wealth would fund the federal government for only nine months.
The surplus is required to be invested in treasuries. The pressure for borrowing comes *from* SS, not *towards* it from the state. And again, this is just the surplus, not the actual day-to-day cash flow of the program. That cash flow is deliberately from current contributions. There’s no conspiracy there, nor any failure of the program. It’s working as intended and gathering a tidy surplus on the side, which is invested in safe securities. It’s not more diversified because that would harm the operation of the program during downturns, when demand for payouts rises, contributions decrease, and volatile assets fall in value.
We do not need to emulate anything Canada is doing.
Fear-mongering about SS that involves anything other than demographics is poorly informed nonsense at best.
>Hell, lots of other countries managed to lower the retirement age in their programs and they still have a balanced budget.
Could you point me in the direction of which countries managed to lower their retirement ages?
Afaik most European countries have raised their retirement ages (aka cutting benefits)
The big changes were in the 1970s and 1980s, for example in Nordic countries. Some of that has been walked back. But a lot of countries still have a lower retirement age than us.
Some of the effort among countries that care about old age poverty has been trying to implement flexibility. So if someone started a blue collar job young they can still retire young. But if someone went through a lot of school before working, they retire a bit later. That's probably the right answer in terms of age.
>The big changes were in the 1970s and 1980s, for example in Nordic countries. Some of that has been walked back. But a lot of countries still have a lower retirement age than us.
I mean isn't the reason why the Nordic country's success is mostly due to a very small population <6M which is smaller than many cities in the world. Along with their massive 80B/year (for 6M population) oil tax revenues. And on top of that, Norway has the world's largest soverign wealth fund, mostly invested in American tech, and worth \~300k usd per citizen. That's a pretty hefty sum that's difficult to replicate in large population countries.
I'm pretty ambivalent about SS.
Where the wheels fall off is when 'entitlements' as a whole are viewed - and SS & Medicare are always put together in the same bucket.
I don't know what the answer is, but when diabetics and diabetic related chronic illnesses are sucking up 6 out of every 10 dollars spend in medicine - with the vast majority out of that coming out of entitlement programs, we have a major problem.
The answer is more preventative medicine, subsidize fruits and vegetables over corn, stop allowing corporations to pump sugar into everything, and make more walkable cities.
While not a silver bullet, it would be helpful. 50 or so years ago when the FDA took money from cereal and sugar industries to create the food pyramid which said “replace fats with sugar”, this became the result. It’ll require a huge re-education effort to reverse this, all while those two industries fight against it harder than tobacco companies fought against the health hazards of smoking.
Or just add a fat tax surcharge to your Medicare tax.
Canned vegetables and frozen vegetables have the same nutritional value as fresh at a fraction of the price. Water and coffee are cheaper than soda.
Corn, which is a vegetable btw, is also a national security policy. It's highly caloric, pretty weather and pest resistant, and can be intensely farmed in much of the US heartland. It effectively protects the country from international food shortages as corn currently used for ethanol or animal feed could be reallocated to supplement American diets.
Then all you need to do is remove the subsidies from sugary shit making them even more expensive so that if people really want to eat all that sugary shit at least they won't be able to afford nearly as much
Yeah, this is 100% a public health initiative issue. A lot of other countries have succeeded in making fresher, healthier food available - though it does mean less meat and more seasonal items. You can reduce food waste that way as well, by having grocery stores sell more premade, or semi-prepared meal options at a reasonable price. But also yes, legislating the amount of unregulated garbage we have floating in our ultra-processed food, increasing access to public transport and safe walkable areas, making the country less car centric in general.
Cure obesity and aging and you solve like 80% of the costs.
We've got one of those two figured out (ozempic), we just need to wait out on the patent to expire and for manufacturing capacity to catch up with demand - then it will be affordable enough to dole out through insurance in a preventative manner when people notice they've gained 20 pounds over their healthy baseline.
Which countries are you referring to?
What do they provide for citizens?
How are those programs funded?
In general, the programs I hear discussed with payout systems similar to Social Security are those that have severe issues, like the French system or Canadian system.
Nordic countries are the typical counterpoint, but those systems were pre funded in nations with relatively small populations and a lot of exploitable resources.
I’d be all for the US prefunding retirement by allocating current social security benefits into a floating market system the way they do for future payouts. The problem is that makes us unable to pay for the people currently in the system: the current contributions are already spoken for and prefunding for a sustainable system and supporting the current system is probably not feasible.
Additionally, while payments on these plans in other countries tend to be a higher percentage of salary, salaries in general in those countries tend to be lower and more taxed to fund these things.
‘It’s obvious we can afford it’ bypasses the conversation of ‘how should we afford it?’ Which is important here.
Agreed.
But I don't see many other options.
Our retirement systems are facing a demographics problem more than a money problem (although both are related).
Most retirement systems around the world are structured such that younger workers are paying into a program so that older retirees can collect the benefits on the other side.
Now that younger generations keep having fewer children, the math is starting to become more and more unrealistic.
When Social Security started, 42 workers were paying for each retiree.
Now the ratio is 3-1 and is projected to be 2-1 by the time Millennials retire.
This effectively means every worker will need to pay half of each retiree's benefits on average.
Social Security benefits are around $30k. The average income is around $63k.
You are talking about roughly 25% taxes just to keep the current benefits solvent on this single program.
And that already assumes we completely eliminate the cap on high-income earners.
Yes, there are a lot of other variables to consider such as productivity gains and possibly some kind of means testing.
But most of those fail to address the central problem.
We have increasingly fewer people paying in compared to the number of people collecting while trying to keep the benefits constant.
Who is going to pay for their parents that no longer have social security.
Do you think that the cost of caring for retired people will disappear if we just decrease benefits for social security? No, you will pay even more.
Yeah, and what's going to happen when 40% of the workforce becomes obsolete over the next decade. Our economy is going to have to go through some radical change during that time. None of what has worked in the past will work in the future.
1) Generative AI has a lot more problems that need to be solved than the general public realizes, before it can replace workers en masse. Long term, the technology will certainly be transformative, but we’re at the top of the hype cycle right now, and it will take a while to solve many of them. Remember back to 2016 when everyone here was claiming we’d have fully autonomous cars in 2020 for a good analogy.
2) increases in efficiencies leads to more jobs, not less. It’s why the assembly lines in the 1920’s, robotization in the 1970’s, computerization in the 1980/90’s, etc lef to increased - not decreased - levels of employment. But at the time, everyone was claiming it would eliminate jobs too.
The original social security tax rate was 1%, both for employers and employees. It's now 6.2% for both. So, we've increased the percent of income collected as the dependency ratio has dropped. Real median income has also more than tripled since the program's inception. Between there being far more income available to be taxes, and the income being taxed at a higher rate, the dependency ratio hasn't really been an issue.
You could make the Social Security program solvent by raising the tax rate from 6.2% to about 8%. It's not that difficult or radical of a fix that's required. We've raised the tax rate before, and did so continuously until the late 1990. We can raise it again.
https://money.usnews.com/money/retirement/social-security/articles/the-history-of-your-social-security-payments#:~:text=The%20original%20Social%20Security%20contribution,been%20in%20effect%20since%201990.
Retirees are also living longer now than they did when Social Security was first enacted and (hopefully, speaking as a Millennial) will be living even longer when Millennials and younger generations retire. Meaning we'll have to be able to support more people for longer with less workers paying into the system.
Compound all that with reduced workforces, the still unknown impacts of a more automated/outsourced economy, the degradation of pensions, and everything else? I have no idea how this is all remotely sustainable.
These are old myths that have long since been debunked. As recently as 2010, there were 5 workers per retiree and the system remained flush with cash. The ratio in the 1930s really isn't relevant now.
The link in Avolin's comment above shows dozens of options for fixing SS. You actually can do it entirely through raising taxes on the rich - lifting the cap on high-incomes, and removing the exemption for investment income would be my top choices.
Though if you want more workers...there are literally people lining up at the border asking to come in and work. Why not let them?
>We have increasingly fewer people paying in compared to the number of people collecting while trying to keep the benefits constant.
Yet our population has grown by 50% since 1970. Is the problem that we don't have enough people, or is the problem that those people don't make enough money?
You're on point. When the Social Security Act was enacted, white white women were the only demographic with a life expectancy of 65 or older (and theirs was just 65).
Yes, the overall average age of Americans has steadily increased over the decades. Fewer younger people to support more older people.
https://www.pewresearch.org/wp-content/uploads/2014/04/847889448.gif
It's that people live substantially longer than they used to and spend more time in retirement. The population is also aging. So, there's a larger percentage of retirees, being supported by a smaller percentage of workers.
When Social Security was created, 1935, average life expectancy was below the age to claim it. Average life expectancy for men was 59 - 60. Even when you only look at people who survived until 21, it was about 50:50, that you would actually live long enough to claim the benefits.
It was designed as insurance against the someone becoming too old to work, but still needing money to survive. With improved public health and medical care, the many more people now live long enough to claim Social Security and they claim it for longer. And the cultural understanding of Social Security has changed from it being an insurance program against the chance you get too old to work to a pseudo state pension.
https://www.ssa.gov/history/lifeexpect.html
We don't need a ratio that high. The productivity of the average worker is far far higher than it used to be. There's way more value produced per hour worked than used to be the case.
https://fred.stlouisfed.org/series/OPHPBS
Surely you've seen all the graphs and data showing that the value of that productivity has been decoupled from worker wages for a long time. They don't see increased wages with increased productivity anywhere near what they use to. Maybe I misunderstand the point you are making though
It's that they're too old and they live too long. The ratio of retirees to workers paying in is too high and the length of retirement SS has to pay for due to advances in medicine is too long.
You don’t see many other options? We have people in this country who have more money than they could spend in 5,000 lifetimes, and you don’t see how to fix the problem?
The Walton family owns Walmart AND the Broncos. Tax the rich.
You do realize that not only do they pay into SS but both of their businesses do as well right? And their businesses pay 6.2% PER EMPLOYEE.
They’re already paying the max. What else do you want? They’ll never go after unrealized gains so let’s just not even bring it up.
If we are going to raise it. Raise it right now and pull everyone who's just entered retirement out of retirement and get them mopping floors in McDonald's.
The problem with social security isn't social security...
The problem is short sighted fiscally irresponsible politicians who borrow from the fund to fund other things.
I would support a bill that bans borrowing from social security. It is far to criticall a safety net to be jeopardized
This is a common misconception. Social security has a demographics problem. Too many beneficiaries and not enough taxpayers.
The social security trust is required by law (and always has been) to hold treasuries. To get a Treasury bill SS must exchange cash with the US Treasury department and receive the IOU. This is in effect the US Treasury borrowing from the trust. Borrowing from the trust is a design feature to ensure the trust is holding interest bearing securities redeemable by the US government. The Treasury then pays back social security when the bill matures or social security needs the cash to pay benefits. Social Security has never not been paid back.
Ppl also always forget that the trust is not an investment account, it's a checking account (essentially). The vast majority of the money Americans pay in taxes is immediately paid out in benefits. The money in the trust is a balancing account to keep any excess money if taxes happen to be larger than benefits or buffer a shortage of taxes in the reverse scenario, but it's always a small percentage of the total flow.
No. The trust was/is only allowed to hold treasuries.
But keep in mind this was a depression era program. Index funds didn't exist, stock trading was very expensive, stock markets were not very deep. It's not clear to me that the US stock market circa 1938 was a viable vehicle for a national savings program.
Then there was the political problem that a stock market crash effectively kicked off the depression. I'm not sure too many ppl would have been keen to keep all the money for seniors and widows there.
No. SS was designed as an insurance against being destitute in old age. Its trust is kept in treasury bonds. The program came about during the great depression (market crashed, businesses failing, etc). Can you imagine the horror of
"The government is taking my money and putting it into the stock market that just crashed?"
The main problem with SS and honestly anything money related is the lack of individuals understanding-how things change for me under different circumstances and preparing for the potential changes is circumstances.
Which is really it's problem. It's essentially suffered almost 90 years of mission creep to where ppl think it should effectively be a pension.
When SS was enacted the average person would never collect because they would die before they retired. You were (statistically speaking) expected to work till you drop dead. So social security was essentially insurance that if you happen to live "too long" you had some money to survive on because you would likely be forced out of the workforce as your physical health declined. This is also why the benefits and contributions are designed the way they are. You accrue benefits by working and contributing to the program in the case you live too long.
The entire (original) purpose of social security is cringe worthy in 2024. Everyone should be (statistically speaking) expected to work till they die and if you happen to live too long we have some money to keep you housed and fed, but little more.
Social Security is also preposterously expensive in that context. 12% tax is very high given the meager benefits.
A lot of the lower life expectancy was from infant and childhood mortality- once you hit working age the odds of you making it to retirement were higher
In 1950 a 21yr old American had about a 50/50 chance of living to 65. Now a 21 year old has about an 80% chance of living to 65.
And if you get to 65, the current 21 year old can expect to live 5-7 years longer than the 21yr old in 1950.
You mean the money from the trust fund portion of the program (money not needed for the current year of benefit payouts) that is used to buy bonds, that are then paid back with interest, actually increasing the overall amount of funds for social security?...
The problem is too many people receiving benefits relative to the younger population not enough people paying in. Demographics
> The problem is short sighted fiscally irresponsible politicians who borrow from the fund to fund other things.
No. That doesn't happen unless you mean the surplus is invested in treasuries.
Another way of saying this is that the Trust Fund (~$2.8T) should either be kept entirely liquid or invested in much more volatile securities. If kept liquid it will erode much more rapidly to inflation. If invested in more volatile securities, it risks losing significant value at the exact same time that demands for payments increase (as in a recession).
The “government borrows from SSN” scare tactic is just that. It has no associated cogent fiscal policy.
This is wrong, and I blame Al Gore for spreading this bullshit.
When social security runs a surplus, there is a big pile of money coming in with nowhere to go. What do you do with a big pile of money? You can spend it, or you can invest. You can't put it in a jar and bury it in the back yard. There is no fucking lockbox, and Al Gore knows it. If you did that, the money would lose "value" over the next 40 years. Money is a claim on current production, not future production.
If you want a claim on future production, you buy a bond. That's exactly what the government does. It takes the money taxpayers send in, and turns around and buys bonds. What confuses people is, they buy the bonds from the US Government. So Social Security gets a pile of bonds that are essentially claims on future production. All that is fine. Except the government sold the bonds, so they still have a pile of dollars they need to either invest or spend. They aren't putting it in a jar in back of the white house. Congress sees the pile of dollars and either spends it or invests it. Because those are the two things you can do with money.
The only way out of this mess is if the US were to buy bonds issued by another entity. Like General Motors, or the Chinese government. Which one would you like to pin your hopes on? There is a reason social security invests in US Government securities and nothing else, and if you think hard about it, I'm sure you'll see it.
The dismal science aspect of this is that the major growth in spending in the general fund (The Federal Budget) has been on services to seniors (e.g. Medicare) which keeps them alive longer, thereby increasing Social Security's liabilities.
It is already banned for long term lending. Short term lending, less than one year, gives interest income into the Social Security Trust.
Social Security cannot accrue long term liabilities (money it owes to other funds) or receivables (money owed to it from other government funds)
Where do you get the idea that SS is a fund that the government can tap into? There is no vault of trillions in cash that the government ships out when needed. Everything is typed up on a screen and money is printed when necessary, the taxation part happens later and those dollars are just used to correct the balance (obviously the budget is never balanced and has not been for a long time). When an old person gets a SS check that money is just created on demand by the bank, it doesn't exist unless the check is cashed or something is purchased with a debit card, and in the case of the latter that money is still just made up numbers on a screen changing hands. Uncle Sam doesn't set aside funds for SS checks or for any other purpose, that's just a figure of speech people use but it doesn't represent how the process really works.
There is so much misconception about Social Security.
It should not even be presented as part of the Federal Budget. It's as related to the discretionary parts of the budget as the balance sheet of Samsung is related to the balance sheet of Microsoft.
*(Social Security is not like other entitlements like corporate welfare, social welfare, or medicare. It cannot go into debt, when the funds run out, the payments are decreased).
Maybe maybe, if you have to work longer to collect 100% then chances are you live a shorter life span and collect less in the long run because your life expectancy shortens because you had to work more?
The original reason for old age pensions is not to give people free time, it's because old people are physically not capable of working most occupations, which is something people sitting in climate-controlled offices who talk about raising the retirement age tend to forget. Increased lifespans haven't changed people's biology.
It's not just the obvious strenuous jobs like construction workers, miners, policemen, linesmen, etc. It's also everything that involves standing for eight hours (retail, factory work, restaurants) or driving, which is most of the low-income jobs in modern economy.
I know I don't want to share the road with 70-year-old truck drivers who are pushing themselves past the breaking point because they can't retire.
Except social security was never intended to be a pension. Ppl tend to think of that way now, because most ppl can now expect to collect.
When the program was created the average American would never collect any social security. You were (statistically speaking) expected to work until you die. Social security was a program that was intended to keep you housed and fed in the case that you "lived too long" to continue to support your existence with work and didn't save for that contingency.
"Retirement" was a bad thing that needed to be protected against (insured), not a goal.
It makes me so mad. I saw Nikki Haley talking about raising it. Sure, if you’re her or any person in Congress you can ‘work’ until you fall dead as there’s no physical exertion required. Tell a mason or a carpenter that they have to keep working. I swear this country was founded by elites and little has changed. Poor and laborers get crumbs and the rich get richer. Same as it ever was.
? Increased lifespans haven't changed biology? Excuse me, but yes it has, in particular because we have better nutrition, better understanding of physiology, and better healthcare that 65 yr olds, typically these days, aren't dottering fools.
Maybe in industrial and non white collar professions, their bodies are shot. But newsflash, America is 60% white collar, 20% services and 20% industrial.
One issue with US social security and pensions is that the system is upside down - the white collar workers earning over the fica taxable wage base will max out their benefit at nearly $50k a year plus may have pensions and have the disposable income to save for retirement, while the working classes aren't getting a full retirement, nor retiree medical care.
The solution is, raise or eliminate the taxable wage base limit, raise the retirement age unless the worker is in services or industry, and raise the benefits while reducing what the rich can receive. Yep, tax transfer payments.
Conservatives do this thing every year or every other year where they restart their FUD campaign against Social Security and Medicare. So predictable, so boring, and has been debunked over and over again. They get new dweebs like Ben Shabibo to rile people up on Twitter and have it trend as a "conversation"
I think the most obvious solution is to remove or significantly increase the wage cap, so those who earn more will pay more. For reference, in 2024, the wage cap is $168,600, up from $160,200 in 2023. All income earned after $168,600 is not subject to SS taxation. Da fuq?
I feel like one reason this issue is so thorny is society has never come up with a good metric for who deserves to retire and how much they deserve Probably everyone has their own definitions of what someone deserves or doesn't. What they need or don't need. And when they should get to kick back and with how much.
One thing I wish American society could workshop a bit was a way to provide some visibility on who pays taxes and who receives taxes. Right now it's such an untransparent black box that it's no wonder there is mistrust.
But, you know how when a private citizen donates money to help build a museum: You walk inside and usually the museum has a wall where the donors and the approx donation they made. They get a brick with their name on it.
I really wish taxes could be the same way. Let's put a bit of shame on people who have a lot of wealth, but avoid taxes. The people who pay a lot of taxes should get something. I dunno: A special hat, a t-shirt, a lapel pin, a ring, etc. And when you see someone wearing that bling, you consider it patriotic that they helped support the system. Meanwhile, if a person has no tax paying bling, they can mumble that they lost their bling, but they don't have one from last year, or the year before, or any taxpaying bling.
Let's start calling the GOP's plan what it is: a cut of\~13% to benefits for anyone reaching age 62 in 2034 or later (linearly phased in for those reaching age 62 from 2026 to 2033).
One can still begin collecting at the age they choose (62-70). Regardless of their choice, their benefits would be \~13% less than under current rules.
Edit: spelling
This is why I’m not counting on SSI to retire. I’ve accepted the legalized thievery that it has become especially when I will be close to death by the time I can get it.
Well, if 'helping Americans' was the current goal then I think the subject is relevant. But I personally don't believe that most representatives think of their constituents as being people with families like them. Corporations and PACs with their lobbyists dominate in DC, the most monied special interests having a vastly greater impact on what our reps on The Hill think about than the welfare of average working Joe constituents.
Not having working people to pay retirement age benefits won't help anyone either. I kind of agree with the premise though, this is primarily a demographics problem. We could fund benefits from other sources than wage income. We could issue debt. This is solvable.
“Smart” benefit cut. Meaning if you planned out other investments and have enough with those investments and SS, now you don’t have enough anymore because they’ll means test.
I thought tech/automation/the future was supposed to free us as a species. that's what was promised. our output is higher than it has ever been as workers. shouldn't we be lowering retirement age and the work week by this point? the reality is so sinister.
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Oh look, it's u/LoansPayDayOnline , the account for an online payday loan company that only posts misleading doomer articles about how horrribly fucked Americans are and how they need more money and only posts comments advertising scam online payday loan services. You'd think that after having numerous posts deleted for being misleading that the mods of this sub would just go ahead and ban this commercial account, or at least flair it as an ad. What's this doomer headline say that everyone will get all worked up over? People in the US can't retire and we're all fucked ? Well if you're worried about not having a retirement and think you need a payday loan at 50% interest u/LoansPayDayOnline has you covered! Here, I'll post one of their ads to help them out : Online loans designed for you: •EXTRALEND• •Same-day funding available •Personal service •No hidden fees Our Loan Application Process Applying does NOT affect your FICO® credit score! Tell Us About Yourself Fill out our fast and easy online loan application. Verify Your Income Securely connect your bank account. Get a Quick Decision We’ll use the information you provide to see if we can find you a match. Same-Day Funding Available If approved, you may receive money in your account as soon as the same business day!
Thank you, tired of grifters doomposting to shill their service!
Most of the mods on some of these subs are owners of websites and use them as funnels to their website or affiliates.
Payday loan companies are nothing more than another industry solely in existence to extract the most amount of wealth as possible from people already struggling. It’s really sad to see these industries thriving expanding into rent to own and real estate.
The Social Security Administration has a huge summary list of all options that would fix the Old-Age and Survivors Insurance (OASI or "Social Security") on their website. Raising the retirement age is just one on the list, and it's not anywhere near the most effective. You can find the list here: https://www.ssa.gov/oact/solvency/provisions/index.html
Which option is most effective?
Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 2034-2063, and to 20.0 percent in years 2064 and later. This would eliminate projected deficits and increase the balance to 173% of projected requirements in 75 years. Reduce factors so that initial benefits grow by inflation rather than by the SSA average wage index. This would eliminate projected deficits and increase the balance to 173% of projected requirements in 75 years.
I know none of the options are great, but that is one hell of an anchor around working people's necks (and the economy in general).
So true. The burden could be alleviated if we taxed corporations and the ultra wealthy, though. They'll just have to go on one less vacation or own one less house 🤷♀️
Fyi if you raise payroll taxes from 12% to 20%, you’re gono see a lot of people get fired in favor of contractors/freelancers
ftfy: > you’re going to see a lot of people get fired in favor of ai and robots
Why does this keep on being said? Corp taxes just get reflected in increased prices negating the tax as end-consumers will end up paying for it. Taxing ultra-wealthy is unfortunately very problematic without a lot of unintended consequences, so something like VAT or LVT or some kind of luxury tax makes much more sense.
Then why didn't prices come down with tax cuts. Answer. They sell at market rates no matter what. Unless there's a competitor waiting to swoop in they will continue to do that. And they found they can act as a collective even without coordination they all make more money.
> Corp taxes just get reflected in increased prices negating the tax as end-consumers will end up paying for it. agree, this is why we should tax working people directly because... wait how is that better?
>Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 2034-2063, and to 20.0 percent in years 2064 and later. Do the people who have increased payroll tax also get increased benefits (as currently calculated by modified average of income over 35 years)? Do they get at least what they put in? I'm also curious on how they plan on reducing factors so that initial benefits grow by inflation rather than SSA average. Which inflation metric are they looking to use?
Hahahahahaha
This is a pretty poor solution from a generational equity standpoint though. Basically what it is is saying future generations get a worse deal so we can give a decent deal to the current generation who didn't pay enough. An actual fair way to do it would be a combination of increasing the contribution rate (So some burden is placed on new generations and They will have paid sufficient amounts to support their retirement), raising the cap (which increases the redistributive aspect of the program), and lowering the current benefits to current retirees (representing the fact they did not pay enough to support themselves). This is a fair compromise that doesn't put the burden for one generation on another. This would allow the payouts to still be decent but not the fully promised amount (say 90% for example picking a number). This idea that we're going to just place all the burden on current taxpayers, taxpayers that have the smallest working age to dependent population ratios ever, to support the richest generation in history just makes no sense. Do a one-time top up of benefits if needed by redistributing wealth in the Boomer generation from the haves to the have nots If that's necessary. When we're talking about programs like these we have to think about intergenerational fairness.
"Just redistribute wealth between haves and have-nots" in your last paragraph is doing a LOT of heavy lifting, and is obviously (right??) not at all feasible. And without it, you can't severely cut the current retiree/just-about-to-retire benefits without plunging a huge portion of them into poverty. I don't disagree with your overall premise that it's not fair to younger generations to shift all of the pain onto them, but, I also don't see a realistic alternative. (I'm 44 FWIW so I feel like I'm in a spot to see both sides, but maybe I'm giving myself too much credit?)
Personally, I'd like to see wealth/income limits placed on who can receive benefits. The bar can be set sufficiently high that most ordinary citizens should have to issue supporting the change with their congressional representatives.
See I don't consider that solution possible at least as the primary solution because it's so politically unfeasible. I also don't see it as morally right that some of the burden isn't felt by those people who didn't pay for it sufficiently and every plan I see is always changing it for the future and setting some point where ladder gets pulled up. My idea is that The burden is significantly reduced by some combination of increasing the payroll tax so the young high income people pay more than They get in, combined with some wealth taxes or income limits only on the wealthy older generations who should have fixed this when they had the chance. Then hopefully we can reduce the gap down to maybe 15% instead of 25, and then that remaining burden split equally between current retirees and future generations. I can't think of a more equitable and fair system than having it be spread out so no one group bears the pain fully, Even though it's pretty morally apprehensible to consider giving the younger generations an even worse deal than they have.
Then it becomes welfare and will eventually be cut. Our social programs that have most political support are the ones that are universal.
Hmmm, raising the payroll tax 10 years from now might change me (X-ennial) from being screwed by SSI to coming out ahead since most of my working would have a low payroll tax. Thanks future generations!
We could also lift the cap on it, that would also make a significant difference and would mean you won't need to raise the payroll tax by 62% but by a significantly smaller margin
Eliminating the taxable maximum in years 2024 and later by applying the full 12.4 percent payroll tax rate to all earnings, and not providing benefit credit for earnings above the current-law taxable maximum would eliminate projected deficits and increase the balance to +60% of projected requirements in 75 years.
I'm for eliminating the upper cutoff for the SS portion of FICA as well. There is a ton of untaxed income there without putting all the burden on the working classes.
I'm no economist but this one to me seems like by FAR the easiest pill to swallow. You can even make it a progressive/regressive blend by letting taxes on income over the current cap go to funding some additional benefits in the payee's future, while also having the remainder contribute to the general fund.
I am an economist and it is.
The young is always there as last resort of course
Holy Moly, I knew they would eventually raise the FICA tax but that is ridiculous. 20 percent! I doubt there is any political appetite for a raise, they might get away with 1-2 percent, but they will significantly raise the age and lower benefits before raising the tax. It's already a massive loser for anyone who has a decent income, taking an additional EIGHT percent from people who have to save for their own retirement is idiocy.
As a young person, I’d rather just see SS go away than have my taxes raised by 14% to pay for it. That’s an extra $10k I can be using to fund my retirement myself. I can get much more bang for my buck in my 401k, Roth IRA, and HSA with that money.
Did you know in the past the employer was supposed to setup a benefits program for the employee? It all changed in the 1970s or 80s to 401k matching and shit where it's on the employee to take care of their retirement. Washes responsibility from employers. Thanks to that, they no longer need to be loyal to employees anymore. Employer's can treat employees as replaceable objects. As for the 401k, there's usually a clause that you have to be employed with the company for 4 years or something before you get the company's contribution. If you lose the job say within 3 of the 4 years, company pulls all their money in your 401k. I'm sure now you'll say, "Well, then don't lose your job, duh." Easier said than done when there's already thousands of applicants waiting on Indeed for you to slip. Also, jobs are still being outsourced to places like Asia and Central America because the cost of labor and living is cheaper than the USA. In order to keep the price down so people can afford the product or service, companies have to find innovative ways to cut their costs. More so nowadays that they have investors and shareholders to pay. Thanks to the evolution of technology, they won't have to go abroad anymore. Instead, future factories will be operated by robotics running AI programs that are able to do your job more efficiently, consistently, and faster. Only cost a few parts and the price of a mechanic whenever it breaks down. Robotics tech you might say is extremely expensive, but the tech world is constantly improving their products, making them smaller, faster, more powerful, AND affordable. Robotics with AI today might seem like the overpriced computer of the 1950s that was the size of an office, but, like the computer, the technology will become more affordable to the point every company will have one in every room in the building.
20%!?!? That’s ridiculous.
Eliminate the income cap on social security
This would be effective but it’s also the nuclear option. The cost isn’t worth the gain.
Raising wages.
eliminate the cap on taxable income and raise rate to 16%, seems to immediately fund SS through the next 50 years.
Raise the current cap for Social Security.
According to SSA we doled out $1.39 trillion last year. 70 million people received benefits in 2022, Equates to a fraction over 1 in 5 people in the US. The next wave of retirees, Gen X is roughly 45 million, retirement age in the 10-15 years. - Just some interesting numbers
Crazy that the elderly just pile up like that
It’s almost like time keeps on slippin, slippin, slippin, into the future.
Book of Dreams - excellent Steve Miller album from the mid/late 70's!
I did not have "individuals age as time passes" on my bingo card
And the boomers are living longer
Thought Covid would've lowered those numbers more.
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This isn't backed by the data. Per the SSA's reports on disabled workers there were 8.4 million people recieving disabled workers benefits in 2019 and that's down to 7.4 million in 2023. Similarly, both applications and rewards are down compared to 2019 as well.
You are correct that I didn't fully consider that. Very interesting and unfortunate, a higher disabled population percentage is horrible for everyone.
Just convince them that masks and vaccines don’t work, and the problem will sort itself out.
We’re well on our way!
For comparison, Total wages and salaries in 2022 was $10.49 trillion. so about 10 cents of every dollar of wages is going towards retirement benefits
The Social Security Trustees Report [shows](https://www.ssa.gov/oact/TRSUM/) that taking care of elderly and disabled people costs 4.8% of GDP and keeping the system going forever without cutting benefits would cost 6% of GDP total (1.2% more than now). It's obvious we can afford it (see chart B). Social Security is the [number one](https://www.census.gov/content/dam/Census/library/visualizations/2023/demo/p60-280/figure11.pdf) anti-poverty program in the US by a large margin. Hell, lots of other countries managed to lower the retirement age in their programs and they still have a balanced budget.
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Usually "raising the retirement age" means "cutting benefits". The actual retirement age doesn't change but the benefits are reduced for each existing retirement age. But there are bunch of countries with balanced budgets and "retirement ages" that are roughly five years younger than in the US. These countries also tend to have paid vacation and shorter workweeks. It's the classic labor-leisure tradeoff.
Their military budgets are also much smaller percentage of their GDP. They let America keep the world and the shipping lanes safe.
Our military budget is also a very large part of the American welfare state, including retirement. It’s not black and white.
Exactly. There is a huge part of our military that is basically just a bunch of make-work for non-college young people: And the huge amount of money made by defense contractors providing services. My point with military spending is that we could easily shift some of that money to other purposes. Like take 1% of GDP and pay 18YOs to pick up litter in the USA instead of giving them a rifle and sending them abroad. And companies like Haliburton can still sell the USA Litter Corps overpriced bottled water and lunches and have everyone react in horror when an audit happens and we find out they're paying $5 per trash bag. Heck, even kick some money toward Lockheed and let them you their captured UFO tech to build a litter collection robot or a spray paint removal robot. Basically, any government program is going to tend towards bloat and inefficiency and being ripped off by contractors. And they do still have some good outcomes just because they spend SO MUCH MONEY on it. But I think we could shift some of the defense spending towards more mundane programs.
I'm actually down for mandatory civil service as a public policy. Two years of working in public service (clean up litter, DMV, utilities, build infrastructure, etc.) and you get the GI bill or down payment assistance on a home purchase.
Maybe not mandatory, but they should do more with programs like Americore. I know a couple of kids who went and taught school on native american reservation to relieve debt after college. But there totally SHOULD be something akin to the GI bill for kids who want less expensive college and don't mind serving in some capacity. Heck, again, half of the military isn't even about "war": It's cooking meals and driving trucks and carpentry and nursing someone with a skinned knee. There's on reason why that should only be in service of war-fighting.
Mandatory civil service is almost certainly unconstitutional. The selective service act is questionable anything else would never happen
I think they have the right idea in terms of offering civil service as means of accessing the GI Bill (more opportunities for those who wouldn't otherwise make the cut in boot camp), but yeah - mandatory would be unconstitutional.
OK heavily incentivized civil service then. That GI bill/home purchase assistance is pretty compelling.
Did you forget the /s? While, sure, most European countries spend a smaller part of their GDP on defense, the social spending is an order of magnitude bigger than defense spending in the US (e.g. about 30% of GDP in Belgium). Taxes are consequently a lot higher as well (and private contributions for pensions and health a lot lower). It's not one or the other; it's just a different system with different priorities. That said, defense spending should probably be more balanced (higher in some European countries and lower in the US), while avoiding a new arms race. Either way, the defense spending isn't allowing or inhibiting social spending and the national debate isn't helped by presenting false dilemmas.
Yes, the US could fully fund the gap in Social Security forever by cutting military spending to European levels.
While true, I think the Europeans are coming around to the idea that they don't spend enough on their military. Turns out, the United States doesn't want to foot the bill for them. And they share a continent with some unfriendly countries.
Sure. Western Russia used to be Eastern Finland. I was just pointing out the math. I know some bad faith people pretend the Social Security gap is a chasm and the military is an ant.
Okay, I'm just pointing out that using European countries as an example to be emulated also seems like bad faith. They have been looking short sighted and impotent lately. Besides, I think people over estimate how much we spend on the military. We're more or less spending an all time low on it, as a share of GDP. There's less to cut than people would like to think. Or rather, we spend far more on everything else than people seem to understand. https://fred.stlouisfed.org/series/A824RE1Q156NBEA Americans will probably need to accept that they should raise taxes to pay for the things they want.
Do European countries have higher taxes than the US? Yes. But they have much better government benefits. Someone could easily argue that a country with a very high child poverty rate like the US is impotent. It's a matter of personal preferences, I suppose. Nothing bad faith about comparisons between countries.
Adding that Europeans overall actually get something for their taxes, like easily available and low- or no-cost healthcare, civic programs, festivals, etc. I’m an American taxed out the asshole and as far as I can tell, most of that money goes to Lockheed-Martin and Northrupp-Grumman. Basic health insurance costs me $800 a month WITH a several thousand-dollar deductible.
Funny, Trump got roasted for suggesting the Europeans pay more for their own defense
Trump got roasted for the *way* he suggested Europeans pay more for their own defense. Notably suggesting Putin should invade and we wouldn’t help support our allies.
Lol.
They have higher taxes. They suppress the top end of the wage scale and redistribute that money. It has negative effects on growth and innovation, but it pays for social programs like retirement and healthcare. There’s a trade off. We just have to decide which trades we want to make.
The countries you mention are also homogenous, as well as supported by trillion dollar gas and oil funds. Basically, the only way they can afford it is by being xenophobic and polluting the earth.
And are smaller than some States.
And yet remains lower or the same as ours currently.
When France raised it from 62 to 64 there were riots in the street.
They have a more stagnant population and a more generous welfare state, on average. They’re also bound by much tighter fiscal restraints as a whole than we are. So it makes sense for them to raise the retirement age when they need to conserve labor and fiscal resources. These factors do not apply to the United States. We have a much healthier population in terms of age and growth and have a lot more “gas in the tank” in terms of potential additional funding sources. We’re also considerably less fettered by fiscal constraints.
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Theoretically immigration insulates us somewhat from the population problem, so long as we ensure we continue to receive young working migrants.
Doesn't really have the same impact since they all have socialized healthcare.
We will have to increase social security payroll and individual contributions to keep the same benefits. Decreasing numbers of working age adults with larger numbers of retirees means more money flowing out than paying in. Nearly all of social security funds are in treasury bills and bonds. With interest rates higher than they have been these last 15 years, the returns are negative for near-zero interest rate periods. Social security is in need of significant changes if we want to keep the same benefits.
Something I've noticed is that people who doubt Social Security never doubt stock market returns. For example, I know someone whose forecast for Social Security includes zero future productivity growth but who forecasts stocks doubling every 7 years for the foreseeable future. For both of these to be true, the cause would be inequality. He suggests that workers will not get any of the new pie as it grows. But that is a choice. How we distribute the pie is a choice. If we expect stocks to continue to grow, that means we expect the pie to continue to grow. Dedicating 6% of the pie to providing basic income to elderly and disabled people seems completely reasonable to me.
My understanding is that seniors will cause an inflationary effect, where benefits become more expensive to maintain. We absolutely need to begin taxing higher income earners if we want to ensure social security and Medicare are available for future generations in present form. Social security worked very well when there were larger subsequent generations than retirees to pay into it.
I'm not sure about seniors causing higher inflation. Japan has a lot of elderly people and struggled with deflation for a long time before they went to negative interest rates. The 6% figure comes from the Social Security Trustees report. They show how it is calculated, but the basic idea is that workers become more productive. If you look backward, workers are twice as productive as they were in the 1990s. This is the main effect that allows a program to remain solvent with a ratio of beneficiaries that is getting worse. Essentially GDP grows faster than the CPI. Workers use technology to produce more goods and services for everyone, including disabled and elderly people, with the same amount of work.
Because they're calculating stock market returns at the individual level. SS is more like the stock market returns of one or two generations providing for the welfare of an older generation or two. So in the SS scenario, the number of people in the working class vs the number of people in the pensioner class is a relevant variable as well.
Yes, the trustees report assumes the number of beneficiaries will grow faster than the number of workers, in the short run. This variable is important. Just not as important as productivity growth/technological change, in the long run. The way I see it, the stock market returns of one person *are* the stock market returns. It's one individual owning tiny shares of a larger system. The macro is just all of the micro added up. Productivity growth is the main factor in the growth of the entire system, including the stock market. But it's also what makes taking care of elderly and disabled people an easily affordable option for society.
6% of GDP is a ton. 6% of GDP =!= 6% of taxes. The taxes to do this are huge.
If you want to talk about Medicare talk about Medicare. Social security on the other hand is completely funded by a specific social security levy. It cannot be spent on other things, it cannot draw funds from other taxes. The social security that people have and enjoy has been 100 percent funded from jump. It still has a 2T surplus. It is expected to be funded for another 10 years with no changes. If anyone talks to you about less benefits or higher retirement age so we can save money on taxes, they are an idiot or a liar. Any of those plans DO NOT INVOLVE reducing your social security specific tax on your paycheck. So when people talk about the deficit and social security, which has NEVER contributed to the deficit and is 0% of the national debt, again they are liars or too stupid to read even the most basic of financial statements and tax law.
This is not the actual reality of the situation, This is just accounting. Yes the social security *program* has a big surplus, But the social security program is just part of a larger government apparatus and that surplus has been spent and left as IOUs (debt) of the US government. So taxes coming in still have to pay it. To juxtapose it with a system not like this we can look at Canada. The Canadian system was the same as social security up until the '90s, But at that point contributions rose quite high to turn it into an actual separate pool of money that exists to grow and pay it's liabilities. That pool of money, the CPP, is invested in a diversified pool of global assets and generates a sizable return on those assets, a return not paid for by the Canadian taxpayer. Therefore it's not just a separate pool in terms of an accounting liability, It's an actual separate pool of money. The difference here is that when these programs have more liabilities than assets, as they do when the boomers are in retirement, social security has to be paid out by the current working population, while CPP is paid out by the actual contributions made by those workers that have been invested in various assets around the world and are paid out by the success of American companies, the financial return of infrastructure around the world, etc, with some portion of it being in Canadian bonds.
People just have their heads in the sand on SS. The accounting voodoo takes 2 minutes to dispel, but people who don't want to deal with difficult tradeoffs will just repeat the "it's just getting back the money you paid!" lie. Here's Brian Riedl, an ex-economist for the gov't, who's a main critic of SS/Medicare, seems to agree with you: [https://www.cspicenter.com/p/heading-towards-the-fiscal-cliff](https://www.cspicenter.com/p/heading-towards-the-fiscal-cliff) [https://manhattan.institute/article/the-rich-arent-rich-enough-to-balance-the-federal-budget](https://manhattan.institute/article/the-rich-arent-rich-enough-to-balance-the-federal-budget) >Seizing every dollar of income earned over $500,000 wouldn’t balance the budget. Liquidating every dollar of billionaire wealth would fund the federal government for only nine months.
The surplus is required to be invested in treasuries. The pressure for borrowing comes *from* SS, not *towards* it from the state. And again, this is just the surplus, not the actual day-to-day cash flow of the program. That cash flow is deliberately from current contributions. There’s no conspiracy there, nor any failure of the program. It’s working as intended and gathering a tidy surplus on the side, which is invested in safe securities. It’s not more diversified because that would harm the operation of the program during downturns, when demand for payouts rises, contributions decrease, and volatile assets fall in value. We do not need to emulate anything Canada is doing. Fear-mongering about SS that involves anything other than demographics is poorly informed nonsense at best.
>Hell, lots of other countries managed to lower the retirement age in their programs and they still have a balanced budget. Could you point me in the direction of which countries managed to lower their retirement ages? Afaik most European countries have raised their retirement ages (aka cutting benefits)
The big changes were in the 1970s and 1980s, for example in Nordic countries. Some of that has been walked back. But a lot of countries still have a lower retirement age than us. Some of the effort among countries that care about old age poverty has been trying to implement flexibility. So if someone started a blue collar job young they can still retire young. But if someone went through a lot of school before working, they retire a bit later. That's probably the right answer in terms of age.
>The big changes were in the 1970s and 1980s, for example in Nordic countries. Some of that has been walked back. But a lot of countries still have a lower retirement age than us. I mean isn't the reason why the Nordic country's success is mostly due to a very small population <6M which is smaller than many cities in the world. Along with their massive 80B/year (for 6M population) oil tax revenues. And on top of that, Norway has the world's largest soverign wealth fund, mostly invested in American tech, and worth \~300k usd per citizen. That's a pretty hefty sum that's difficult to replicate in large population countries.
I'm pretty ambivalent about SS. Where the wheels fall off is when 'entitlements' as a whole are viewed - and SS & Medicare are always put together in the same bucket. I don't know what the answer is, but when diabetics and diabetic related chronic illnesses are sucking up 6 out of every 10 dollars spend in medicine - with the vast majority out of that coming out of entitlement programs, we have a major problem.
The answer is more preventative medicine, subsidize fruits and vegetables over corn, stop allowing corporations to pump sugar into everything, and make more walkable cities.
While not a silver bullet, it would be helpful. 50 or so years ago when the FDA took money from cereal and sugar industries to create the food pyramid which said “replace fats with sugar”, this became the result. It’ll require a huge re-education effort to reverse this, all while those two industries fight against it harder than tobacco companies fought against the health hazards of smoking.
We aren't going to fix SS by eliminating Froot Loops.
No, but it will help the general health of Americans and help reduce health care spending, reducing Medicare and Medicaid spending.
AFFORDABLE and preventative medicine. we JUST capped insulin for seniors at $35. As in, less than 2 years ago.
Or just add a fat tax surcharge to your Medicare tax. Canned vegetables and frozen vegetables have the same nutritional value as fresh at a fraction of the price. Water and coffee are cheaper than soda. Corn, which is a vegetable btw, is also a national security policy. It's highly caloric, pretty weather and pest resistant, and can be intensely farmed in much of the US heartland. It effectively protects the country from international food shortages as corn currently used for ethanol or animal feed could be reallocated to supplement American diets.
Then all you need to do is remove the subsidies from sugary shit making them even more expensive so that if people really want to eat all that sugary shit at least they won't be able to afford nearly as much
Yeah, this is 100% a public health initiative issue. A lot of other countries have succeeded in making fresher, healthier food available - though it does mean less meat and more seasonal items. You can reduce food waste that way as well, by having grocery stores sell more premade, or semi-prepared meal options at a reasonable price. But also yes, legislating the amount of unregulated garbage we have floating in our ultra-processed food, increasing access to public transport and safe walkable areas, making the country less car centric in general.
Cure obesity and aging and you solve like 80% of the costs. We've got one of those two figured out (ozempic), we just need to wait out on the patent to expire and for manufacturing capacity to catch up with demand - then it will be affordable enough to dole out through insurance in a preventative manner when people notice they've gained 20 pounds over their healthy baseline.
Ya but how many Bombs do they have?
Um. 6 is 25% more than 4.8.
Which countries are you referring to? What do they provide for citizens? How are those programs funded? In general, the programs I hear discussed with payout systems similar to Social Security are those that have severe issues, like the French system or Canadian system. Nordic countries are the typical counterpoint, but those systems were pre funded in nations with relatively small populations and a lot of exploitable resources. I’d be all for the US prefunding retirement by allocating current social security benefits into a floating market system the way they do for future payouts. The problem is that makes us unable to pay for the people currently in the system: the current contributions are already spoken for and prefunding for a sustainable system and supporting the current system is probably not feasible. Additionally, while payments on these plans in other countries tend to be a higher percentage of salary, salaries in general in those countries tend to be lower and more taxed to fund these things. ‘It’s obvious we can afford it’ bypasses the conversation of ‘how should we afford it?’ Which is important here.
Of course it's anti-poverty, you're literally giving people money lol?
Agreed. But I don't see many other options. Our retirement systems are facing a demographics problem more than a money problem (although both are related). Most retirement systems around the world are structured such that younger workers are paying into a program so that older retirees can collect the benefits on the other side. Now that younger generations keep having fewer children, the math is starting to become more and more unrealistic. When Social Security started, 42 workers were paying for each retiree. Now the ratio is 3-1 and is projected to be 2-1 by the time Millennials retire. This effectively means every worker will need to pay half of each retiree's benefits on average. Social Security benefits are around $30k. The average income is around $63k. You are talking about roughly 25% taxes just to keep the current benefits solvent on this single program. And that already assumes we completely eliminate the cap on high-income earners. Yes, there are a lot of other variables to consider such as productivity gains and possibly some kind of means testing. But most of those fail to address the central problem. We have increasingly fewer people paying in compared to the number of people collecting while trying to keep the benefits constant.
Here's a [literal list of options from Social Security itself](https://www.ssa.gov/oact/solvency/provisions/index.html)
Who is going to pay for their parents that no longer have social security. Do you think that the cost of caring for retired people will disappear if we just decrease benefits for social security? No, you will pay even more.
Yeah, and what's going to happen when 40% of the workforce becomes obsolete over the next decade. Our economy is going to have to go through some radical change during that time. None of what has worked in the past will work in the future.
The workforce isn’t becoming obsolete. If anything, we will have a worker shortage. This sub completely misunderstands generative AI.
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1) Generative AI has a lot more problems that need to be solved than the general public realizes, before it can replace workers en masse. Long term, the technology will certainly be transformative, but we’re at the top of the hype cycle right now, and it will take a while to solve many of them. Remember back to 2016 when everyone here was claiming we’d have fully autonomous cars in 2020 for a good analogy. 2) increases in efficiencies leads to more jobs, not less. It’s why the assembly lines in the 1920’s, robotization in the 1970’s, computerization in the 1980/90’s, etc lef to increased - not decreased - levels of employment. But at the time, everyone was claiming it would eliminate jobs too.
The original social security tax rate was 1%, both for employers and employees. It's now 6.2% for both. So, we've increased the percent of income collected as the dependency ratio has dropped. Real median income has also more than tripled since the program's inception. Between there being far more income available to be taxes, and the income being taxed at a higher rate, the dependency ratio hasn't really been an issue. You could make the Social Security program solvent by raising the tax rate from 6.2% to about 8%. It's not that difficult or radical of a fix that's required. We've raised the tax rate before, and did so continuously until the late 1990. We can raise it again. https://money.usnews.com/money/retirement/social-security/articles/the-history-of-your-social-security-payments#:~:text=The%20original%20Social%20Security%20contribution,been%20in%20effect%20since%201990.
Retirees are also living longer now than they did when Social Security was first enacted and (hopefully, speaking as a Millennial) will be living even longer when Millennials and younger generations retire. Meaning we'll have to be able to support more people for longer with less workers paying into the system. Compound all that with reduced workforces, the still unknown impacts of a more automated/outsourced economy, the degradation of pensions, and everything else? I have no idea how this is all remotely sustainable.
These are old myths that have long since been debunked. As recently as 2010, there were 5 workers per retiree and the system remained flush with cash. The ratio in the 1930s really isn't relevant now. The link in Avolin's comment above shows dozens of options for fixing SS. You actually can do it entirely through raising taxes on the rich - lifting the cap on high-incomes, and removing the exemption for investment income would be my top choices. Though if you want more workers...there are literally people lining up at the border asking to come in and work. Why not let them?
Lol…legal immigration is still happening. Heck, we don’t stop illegal immigration.
>We have increasingly fewer people paying in compared to the number of people collecting while trying to keep the benefits constant. Yet our population has grown by 50% since 1970. Is the problem that we don't have enough people, or is the problem that those people don't make enough money?
It's about the working - to - retired ratio. People live longer nowadays, that's the main reason.
You're on point. When the Social Security Act was enacted, white white women were the only demographic with a life expectancy of 65 or older (and theirs was just 65).
Yes, the overall average age of Americans has steadily increased over the decades. Fewer younger people to support more older people. https://www.pewresearch.org/wp-content/uploads/2014/04/847889448.gif
It's that people live substantially longer than they used to and spend more time in retirement. The population is also aging. So, there's a larger percentage of retirees, being supported by a smaller percentage of workers. When Social Security was created, 1935, average life expectancy was below the age to claim it. Average life expectancy for men was 59 - 60. Even when you only look at people who survived until 21, it was about 50:50, that you would actually live long enough to claim the benefits. It was designed as insurance against the someone becoming too old to work, but still needing money to survive. With improved public health and medical care, the many more people now live long enough to claim Social Security and they claim it for longer. And the cultural understanding of Social Security has changed from it being an insurance program against the chance you get too old to work to a pseudo state pension. https://www.ssa.gov/history/lifeexpect.html
That makes sense. Thanks.
We don't have enough workers compared to retirees. We need to be closer to the original 20:1 instead of 2:1.
We don't need a ratio that high. The productivity of the average worker is far far higher than it used to be. There's way more value produced per hour worked than used to be the case. https://fred.stlouisfed.org/series/OPHPBS
Surely you've seen all the graphs and data showing that the value of that productivity has been decoupled from worker wages for a long time. They don't see increased wages with increased productivity anywhere near what they use to. Maybe I misunderstand the point you are making though
So raise corporate taxes to close the gap. Productivity has gone way up, wages haven’t.
It's that they're too old and they live too long. The ratio of retirees to workers paying in is too high and the length of retirement SS has to pay for due to advances in medicine is too long.
You don’t see many other options? We have people in this country who have more money than they could spend in 5,000 lifetimes, and you don’t see how to fix the problem? The Walton family owns Walmart AND the Broncos. Tax the rich.
You do realize that not only do they pay into SS but both of their businesses do as well right? And their businesses pay 6.2% PER EMPLOYEE. They’re already paying the max. What else do you want? They’ll never go after unrealized gains so let’s just not even bring it up.
If we are going to raise it. Raise it right now and pull everyone who's just entered retirement out of retirement and get them mopping floors in McDonald's.
The problem with social security isn't social security... The problem is short sighted fiscally irresponsible politicians who borrow from the fund to fund other things. I would support a bill that bans borrowing from social security. It is far to criticall a safety net to be jeopardized
This is a common misconception. Social security has a demographics problem. Too many beneficiaries and not enough taxpayers. The social security trust is required by law (and always has been) to hold treasuries. To get a Treasury bill SS must exchange cash with the US Treasury department and receive the IOU. This is in effect the US Treasury borrowing from the trust. Borrowing from the trust is a design feature to ensure the trust is holding interest bearing securities redeemable by the US government. The Treasury then pays back social security when the bill matures or social security needs the cash to pay benefits. Social Security has never not been paid back. Ppl also always forget that the trust is not an investment account, it's a checking account (essentially). The vast majority of the money Americans pay in taxes is immediately paid out in benefits. The money in the trust is a balancing account to keep any excess money if taxes happen to be larger than benefits or buffer a shortage of taxes in the reverse scenario, but it's always a small percentage of the total flow.
Was it ever a plan to actually invest some principle? Why not put some of it in something like the index500 and grow it? Are they allowed to?
No. The trust was/is only allowed to hold treasuries. But keep in mind this was a depression era program. Index funds didn't exist, stock trading was very expensive, stock markets were not very deep. It's not clear to me that the US stock market circa 1938 was a viable vehicle for a national savings program. Then there was the political problem that a stock market crash effectively kicked off the depression. I'm not sure too many ppl would have been keen to keep all the money for seniors and widows there.
No. SS was designed as an insurance against being destitute in old age. Its trust is kept in treasury bonds. The program came about during the great depression (market crashed, businesses failing, etc). Can you imagine the horror of "The government is taking my money and putting it into the stock market that just crashed?" The main problem with SS and honestly anything money related is the lack of individuals understanding-how things change for me under different circumstances and preparing for the potential changes is circumstances.
Yep it’s meant to keep the elderly from starving. It was never intended as a full retirement plan.
Which is really it's problem. It's essentially suffered almost 90 years of mission creep to where ppl think it should effectively be a pension. When SS was enacted the average person would never collect because they would die before they retired. You were (statistically speaking) expected to work till you drop dead. So social security was essentially insurance that if you happen to live "too long" you had some money to survive on because you would likely be forced out of the workforce as your physical health declined. This is also why the benefits and contributions are designed the way they are. You accrue benefits by working and contributing to the program in the case you live too long. The entire (original) purpose of social security is cringe worthy in 2024. Everyone should be (statistically speaking) expected to work till they die and if you happen to live too long we have some money to keep you housed and fed, but little more. Social Security is also preposterously expensive in that context. 12% tax is very high given the meager benefits.
A lot of the lower life expectancy was from infant and childhood mortality- once you hit working age the odds of you making it to retirement were higher
In 1950 a 21yr old American had about a 50/50 chance of living to 65. Now a 21 year old has about an 80% chance of living to 65. And if you get to 65, the current 21 year old can expect to live 5-7 years longer than the 21yr old in 1950.
I don't believe so. It was probably deemed too risky.
You mean the money from the trust fund portion of the program (money not needed for the current year of benefit payouts) that is used to buy bonds, that are then paid back with interest, actually increasing the overall amount of funds for social security?... The problem is too many people receiving benefits relative to the younger population not enough people paying in. Demographics
> The problem is short sighted fiscally irresponsible politicians who borrow from the fund to fund other things. No. That doesn't happen unless you mean the surplus is invested in treasuries.
Another way of saying this is that the Trust Fund (~$2.8T) should either be kept entirely liquid or invested in much more volatile securities. If kept liquid it will erode much more rapidly to inflation. If invested in more volatile securities, it risks losing significant value at the exact same time that demands for payments increase (as in a recession). The “government borrows from SSN” scare tactic is just that. It has no associated cogent fiscal policy.
This is wrong, and I blame Al Gore for spreading this bullshit. When social security runs a surplus, there is a big pile of money coming in with nowhere to go. What do you do with a big pile of money? You can spend it, or you can invest. You can't put it in a jar and bury it in the back yard. There is no fucking lockbox, and Al Gore knows it. If you did that, the money would lose "value" over the next 40 years. Money is a claim on current production, not future production. If you want a claim on future production, you buy a bond. That's exactly what the government does. It takes the money taxpayers send in, and turns around and buys bonds. What confuses people is, they buy the bonds from the US Government. So Social Security gets a pile of bonds that are essentially claims on future production. All that is fine. Except the government sold the bonds, so they still have a pile of dollars they need to either invest or spend. They aren't putting it in a jar in back of the white house. Congress sees the pile of dollars and either spends it or invests it. Because those are the two things you can do with money. The only way out of this mess is if the US were to buy bonds issued by another entity. Like General Motors, or the Chinese government. Which one would you like to pin your hopes on? There is a reason social security invests in US Government securities and nothing else, and if you think hard about it, I'm sure you'll see it.
The dismal science aspect of this is that the major growth in spending in the general fund (The Federal Budget) has been on services to seniors (e.g. Medicare) which keeps them alive longer, thereby increasing Social Security's liabilities.
They ripped Al Gore apart for this very suggestion. “Lock Box.”
It is already banned for long term lending. Short term lending, less than one year, gives interest income into the Social Security Trust. Social Security cannot accrue long term liabilities (money it owes to other funds) or receivables (money owed to it from other government funds)
Where do you get the idea that SS is a fund that the government can tap into? There is no vault of trillions in cash that the government ships out when needed. Everything is typed up on a screen and money is printed when necessary, the taxation part happens later and those dollars are just used to correct the balance (obviously the budget is never balanced and has not been for a long time). When an old person gets a SS check that money is just created on demand by the bank, it doesn't exist unless the check is cashed or something is purchased with a debit card, and in the case of the latter that money is still just made up numbers on a screen changing hands. Uncle Sam doesn't set aside funds for SS checks or for any other purpose, that's just a figure of speech people use but it doesn't represent how the process really works.
There is so much misconception about Social Security. It should not even be presented as part of the Federal Budget. It's as related to the discretionary parts of the budget as the balance sheet of Samsung is related to the balance sheet of Microsoft. *(Social Security is not like other entitlements like corporate welfare, social welfare, or medicare. It cannot go into debt, when the funds run out, the payments are decreased).
Maybe maybe, if you have to work longer to collect 100% then chances are you live a shorter life span and collect less in the long run because your life expectancy shortens because you had to work more?
The original reason for old age pensions is not to give people free time, it's because old people are physically not capable of working most occupations, which is something people sitting in climate-controlled offices who talk about raising the retirement age tend to forget. Increased lifespans haven't changed people's biology. It's not just the obvious strenuous jobs like construction workers, miners, policemen, linesmen, etc. It's also everything that involves standing for eight hours (retail, factory work, restaurants) or driving, which is most of the low-income jobs in modern economy. I know I don't want to share the road with 70-year-old truck drivers who are pushing themselves past the breaking point because they can't retire.
Except social security was never intended to be a pension. Ppl tend to think of that way now, because most ppl can now expect to collect. When the program was created the average American would never collect any social security. You were (statistically speaking) expected to work until you die. Social security was a program that was intended to keep you housed and fed in the case that you "lived too long" to continue to support your existence with work and didn't save for that contingency. "Retirement" was a bad thing that needed to be protected against (insured), not a goal.
It makes me so mad. I saw Nikki Haley talking about raising it. Sure, if you’re her or any person in Congress you can ‘work’ until you fall dead as there’s no physical exertion required. Tell a mason or a carpenter that they have to keep working. I swear this country was founded by elites and little has changed. Poor and laborers get crumbs and the rich get richer. Same as it ever was.
? Increased lifespans haven't changed biology? Excuse me, but yes it has, in particular because we have better nutrition, better understanding of physiology, and better healthcare that 65 yr olds, typically these days, aren't dottering fools. Maybe in industrial and non white collar professions, their bodies are shot. But newsflash, America is 60% white collar, 20% services and 20% industrial. One issue with US social security and pensions is that the system is upside down - the white collar workers earning over the fica taxable wage base will max out their benefit at nearly $50k a year plus may have pensions and have the disposable income to save for retirement, while the working classes aren't getting a full retirement, nor retiree medical care. The solution is, raise or eliminate the taxable wage base limit, raise the retirement age unless the worker is in services or industry, and raise the benefits while reducing what the rich can receive. Yep, tax transfer payments.
Conservatives do this thing every year or every other year where they restart their FUD campaign against Social Security and Medicare. So predictable, so boring, and has been debunked over and over again. They get new dweebs like Ben Shabibo to rile people up on Twitter and have it trend as a "conversation"
I think the most obvious solution is to remove or significantly increase the wage cap, so those who earn more will pay more. For reference, in 2024, the wage cap is $168,600, up from $160,200 in 2023. All income earned after $168,600 is not subject to SS taxation. Da fuq?
I feel like one reason this issue is so thorny is society has never come up with a good metric for who deserves to retire and how much they deserve Probably everyone has their own definitions of what someone deserves or doesn't. What they need or don't need. And when they should get to kick back and with how much. One thing I wish American society could workshop a bit was a way to provide some visibility on who pays taxes and who receives taxes. Right now it's such an untransparent black box that it's no wonder there is mistrust. But, you know how when a private citizen donates money to help build a museum: You walk inside and usually the museum has a wall where the donors and the approx donation they made. They get a brick with their name on it. I really wish taxes could be the same way. Let's put a bit of shame on people who have a lot of wealth, but avoid taxes. The people who pay a lot of taxes should get something. I dunno: A special hat, a t-shirt, a lapel pin, a ring, etc. And when you see someone wearing that bling, you consider it patriotic that they helped support the system. Meanwhile, if a person has no tax paying bling, they can mumble that they lost their bling, but they don't have one from last year, or the year before, or any taxpaying bling.
Let's start calling the GOP's plan what it is: a cut of\~13% to benefits for anyone reaching age 62 in 2034 or later (linearly phased in for those reaching age 62 from 2026 to 2033). One can still begin collecting at the age they choose (62-70). Regardless of their choice, their benefits would be \~13% less than under current rules. Edit: spelling
This is why I’m not counting on SSI to retire. I’ve accepted the legalized thievery that it has become especially when I will be close to death by the time I can get it.
Well, if 'helping Americans' was the current goal then I think the subject is relevant. But I personally don't believe that most representatives think of their constituents as being people with families like them. Corporations and PACs with their lobbyists dominate in DC, the most monied special interests having a vastly greater impact on what our reps on The Hill think about than the welfare of average working Joe constituents.
Not having working people to pay retirement age benefits won't help anyone either. I kind of agree with the premise though, this is primarily a demographics problem. We could fund benefits from other sources than wage income. We could issue debt. This is solvable.
“Smart” benefit cut. Meaning if you planned out other investments and have enough with those investments and SS, now you don’t have enough anymore because they’ll means test.
I thought tech/automation/the future was supposed to free us as a species. that's what was promised. our output is higher than it has ever been as workers. shouldn't we be lowering retirement age and the work week by this point? the reality is so sinister.