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Author: bdlessans Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5267  
Subject: Social Security and US Debt Date: 3/8/2011 10:22 AM
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Could it be beneficial/possible to recognize unnecessary Social Security expenditures and end them. There are people who relied on their Social Security benefits and who actually need them. I don't want these people to lose their benefits. However, wherever Social Security spending is deemed unnecessary (I recognize this is a relative) I think it should be cut. Currently, 20% of our budget is spent on Social Security with another 23% on Medicare and Medicaid. How are we ever supposed to get out of debt with such a high percentage of our spending there?

I read a quote by an economist the other day that said: "Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second--and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom. But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth--or of more artful lies. Just like Enron." -Thomas Sowell

This quote really made sense to me, and with so much of the US budget going to social security, specifically social security that I pay for but will never benefit from, I have to wonder if there is a better way to spend some of that money. Am I being unreasonable?
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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5253 of 5267
Subject: Re: Social Security and US Debt Date: 3/8/2011 1:32 PM
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<<I read a quote by an economist the other day that said: "Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second--and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom. But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth--or of more artful lies. Just like Enron." -Thomas Sowell>>



Conservatives have been pointing out that Social Security is a Ponzi scheme since it began. It has only survived because of repated tax inc reases and bailouts.

Of course, Democrats have denied that their program was a Ponzi scheme. Just a few years ago Teddy Kennedy and the Democrats pointed with pride at how their program would be solvent for the next sixty years when George Bush proposed to give Gen X, Y and Z ownership of a small portion of their tax payments.


Means test Social Security? It's already means tested in a variety of ways.

I propose NO changes in Social Security. No tax increases, no benefit cuts. Let the spending expand by spending down the "trust fund" just as Democrats proposed.

Of course, if Gen X, Y and Z combine politically to scrap Social Security in favor of a program they would have ownership over, they are entitled to do that, and I'd be glad to support it.



Seattle Pioneer

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5254 of 5267
Subject: Re: Social Security and US Debt Date: 4/4/2011 8:30 PM
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bdlessans: "Could it be beneficial/possible to recognize unnecessary Social Security expenditures and end them."

Defining them and then using the political capital to enact such reform is the daunting task.

Have you ever seen the Dan Rostenkowski pictures after a medicare meeting in Chicago in 1989?

"For Dan Rostenkowski, D-Ill., then powerful chairman of the House Ways and Means Committee, it all boiled over on a hot day in August when he failed to sell the new coverage to elderly activists at a seniors' center on Chicago's North Side. Brandishing canes, some waving signs saying "Rottenkowski," they chased the sweating, panicked lawmaker to his car. When they surrounded his car, he got out and ran down the street.

Within months, Congress had repealed the law."

http://www.commondreams.org/headlines03/1123-11.htm

"Currently, 20% of our budget is spent on Social Security with another 23% on Medicare and Medicaid. How are we ever supposed to get out of debt with such a high percentage of our spending there?"

Social securityis off-budget.


"So, to sum up:

1- Social Security was off-budget from 1935-1968;
2- On-budget from 1969-1985;
3- Off-budget from 1986-1990, for all purposes except computing the deficit;
4- Off-budget for all purposes since 1990."

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

Furthermore, given that SS has been running surplus since 1983, it has actually obsucred the size of the real deficit.

Regards, JAFO

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Author: Donna405 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5255 of 5267
Subject: Re: Social Security and US Debt Date: 4/6/2011 11:41 PM
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Granted, I collect SS and am on Medicare. However, I still pay into the system. I cannot, for the life of me, understand why the rates are not increased.

Donna

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5256 of 5267
Subject: Re: Social Security and US Debt Date: 4/11/2011 10:35 AM
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>> I cannot, for the life of me, understand why the rates are not increased. <<

Easy to say when you've paid the lower rates all your life and will pay little or none at the higher rates you're asking kids and grandkids to pay on top of their already watered down economic expectations for younger generations compared to today's older generations.

We need to stop the generational warfare here and accept that sacrifice must be shared. If younger generations should expect to get screwed by reforms, so too should wealthier SS and Medicare beneficiaries. We all need to be in this together, not expect other people to suffer for our own benefit while we sacrifice little or nothing ourselves.

#29

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5257 of 5267
Subject: Re: Social Security and US Debt Date: 4/11/2011 11:38 AM
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<<>> I cannot, for the life of me, understand why the rates are not increased. <<

Easy to say when you've paid the lower rates all your life and will pay little or none at the higher rates you're asking kids and grandkids to pay on top of their already watered down economic expectations for younger generations compared to today's older generations.>>



Exactly. Predictions of a demographically based bust of Social Security and Medicare have been commonly available since the early 1970s--- that's forty years.

Less than ten years ago Teddy Kennedy and most Dems were crowing about the how solid financially Social Security was to counter Bush's proposal to give Gen X, Y and Z part ownership of their Social Security taxes.

It's only in the past couple of years that Dems have been willing to acknowledge the calamities their pay as you go system imposes on the nation.



Seattle Pioneer

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Author: napari Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5258 of 5267
Subject: Re: Social Security and US Debt Date: 9/29/2011 4:28 AM
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Changing our gov is required for a solution....below is an older post that didnt gain any traction mainly because everyone has lost hope for a viable solution. It is going to take courage and tenacity and a strong leader with support to make it happen.

Correctly defining what has transpired is essential to understanding and solving the problem.

Social Security and Medicare are insurance programs that millions of people and employers have paid for mostly through payroll deductions. In 1965 our government revoked the trust fund status of both insurance programs. Since 1965 3 trillion dollars plus has been taken out of both social security and medicare to fund wars, roads, etc… In return the treasury has given SS & Med worthless IOU’s.
Currently Social security and Medicare are both being referred to as entitlements. This is wrong because entitlement implies welfare and both Social Security and Medicare are insurance programs that has been bought and paid for. Allowing government elects to redefine SS & Med as welfare is disastrous for the millions who have bought and paid for it. Cuts will be imminent and millions of retirees will live in poverty and lack adequate medical for their needs. The robbery of 3 trillion plus dollars by the US gov from its own people will go down in history as the greatest heist ever and "we the people" have allowed it to happen!

The solution is in two parts: A) “we the people” all need to tell our representatives to reinstate trust fund status to both insurance programs Social Security and Medicare. B)”we the people” need to tell all our representatives to pay back the money robbed from both insurance programs.
Without trust fund status both insurance programs would remain vulnerable to future shenanigans of future politicians.

Part A will be difficult but doable and part B will be near impossible but somewhat doable. None the less it is what must be done to save both insurance programs and restore credibility to our gov.

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Author: Dunniesegg Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5259 of 5267
Subject: Re: Social Security and US Debt Date: 10/21/2011 11:14 PM
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Napari! Your reply was brilliant and so right on I am almost out of my chair with glee. How have we as American citizens given our elected officials permission to use SS/MC as their personal slush fund?! If we did something along the same lines, we would be in jail. How can our elected officials bankrupt our country and still be allowed their priviledged lifestyles?

I think it is time our states began taking responsibility for their own livelihood because our Federal Gov is certainly not able to perform properly!

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Author: PuddinHead42 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5263 of 5267
Subject: Re: Social Security and US Debt Date: 1/3/2013 10:11 PM
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Nice thread, let me reply to some multiple posts.

First, as Obama says, the math just doesn't add up. There are problems.

SS is a pay-as-you go system, which is not a pyramid scheme, but not far from it either. You do depend on the kindness of strangers. People think they have "saved" into the system, but really they paid for their parents and grandparents and now retirees must rely on their children and grandchildren.

There is a surplus now, but we know it will end and then the big trouble starts. We are retiring 10,000 people a day. That is 300,000 a month. So until you see employment increasing by 300,000 a month, you know the "pyramid" is inverted and we are draining money.

There is no "lock box", and won't be. Only if you "owned" your contribution and could invest it like a 401k, would you keep the government from borrowing and spending it. It takes the cash and gives the fund 30 year bonds, which are now yielding squat. The fed is printing money and will pay the fund back with inflated dollars (that are worth less while your cost of living has increased).

There are plenty of fair solutions and everyone must share in the pain. Remember, when this was established, benefits started about a year before you were expected to die, now we live much, much longer. Obamacare is supposed to help us live even longer and constant medical advances will do the same. This is not "fair" to the way the system was implemented.

Ok, some suggestions.
1) I like the ideal of "chained CPI", which measures inflation at a lower rate, thus increases benefits (COLA) slower. This hurts current recipients. Also, this makes tax brackets inflate slower, so it hurts the 53% that pay income tax.
2) let the first $10,000 of dividends+interest be tax free - this will help a number of retirees who have been able to save to supplement their SS. But this is a minor thing.
3) More means testing...if you are getting more than ??thousand in income, then SS is taxed at 50% or 75%. Let's say $100,000 income. This is unfair to people who have been able to save lots of money. Maybe even made sacrifices during live to have enough to retire comfortable.
4) Start pushing back the retirement age (for full benefits). If you are 45, you have to wait 6 extra months. The it is 3 more months for every 5 years (40 year old waits 9 more months now). Or something like that. This gives people enough time to save more money on their own. We love to buy that 60 inch LED RIGHT NOW, but saving for IF you make it to 70 is boring. But at least you know it is coming. That hurts younger people.
5) We need more workers paying in. We can get some from economic growth, but we have to reform immigration to let lots more people in to work. Over the years, I have seen plenty of immigrants that have started with "crappy" jobs like mowing my neighbors lawn, but have slowly grown business from all their hard work. One day they will have a second person, then a third, then a new pick up truck, then they finally talk me in to mowing my lawn for a reasonable price. They did not take this job away from anyone. I was mowing my lawn for free and decided I could now afford to watch football for the price I paid to let someone else do it. Eventually these business are legit and start paying SS, etc. They send their kids to school and the kids get better jobs, and pay SS. We need that. This hurts people who hate foreigner and probably hurts the unions.
6) Raise the cutoff for the payroll tax. It is now about $113k. Probably should not be "infinite" like medicare, but maybe cutoff at $150k now. That hurts people that make over $113k and prevents them from saving as much for retirement ;-)
7) End all pensions for Congress. Make them use SS and their own savings only. All their "speaking fees" are just legal bribes anyway, they can put that in their retirement plan. This hurts the people that refuse to deal with the problem.

there, look at all the shared pain. That is fairness.

I would wager that any two people on this board could sit down and create a fair solution if they were not worried about getting reelected.

They say that in a democracy, you get the government you deserve, and boy do we deserve this one!

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Author: Cheers0406 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5264 of 5267
Subject: Re: Social Security and US Debt Date: 4/6/2013 4:55 PM
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The Social Security tax limit is 4.2% of your wages up to $110,100. Normally the rate is 6.2% of your wages up to $110,000. However Obama reduced the percentage to 4.2%, wich increased national debt, hav ing to make up the difference from the general fund. If you are like me I pay (right now) 4.2% of all my wages, because I don't make more than $110,000 a year. I believe by limiting the amount we are taxed on to $110,00 reduces the amount of money going into the system by a huge amount. I think its only fair for everyone to be taxed on their full yearly income. Doing so would bring new money into the system.

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Author: Donna405 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5265 of 5267
Subject: Re: Social Security and US Debt Date: 4/7/2013 6:47 PM
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The employment tax has reverted to 6.2%. See: http://www.irs.gov/publications/p15/ar02.html#en_US_2013_pub...

Donna

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5266 of 5267
Subject: Re: Social Security and US Debt Date: 4/8/2013 5:53 PM
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<<I believe by limiting the amount we are taxed on to $110,00 reduces the amount of money going into the system by a huge amount. I think its only fair for everyone to be taxed on their full yearly income. Doing so would bring new money into the system.
>>


There are and always have been limits on how much SS will pay in benefits, and the tax limit on benefits has been aimed on preventing high income people from being gouged on taxes when they don't receive benefits proportional to what they pay.

Of course, gouging the wealthy has been one of the aims of liberals. Currenrtly high income people pay unlimited amounts of Medicare taxes but receive no more benefits than someone paying a pittance in taxes.

You may consider that just ---- I do not. It's just an effoert by liberals and Democrats to keep their foundering social programs from going bankrupt.

The wealthy still get gouged on Social Security taxes, since there are large biases in calculating benefits that favor those with a history of low income.

I consider it grossly UNFAIR to tax people on unlimited amounts of income and then sharply limit what they can collect in benefits.


But perhaps you'd favor the wealthy receiving benefits in proportion to the taxes they pay? Bill Gates might get a monthly Social Security check of $5 million or whatever under that polcy (just to throw out a number).



Seattle Pioneer

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5267 of 5267
Subject: Re: Social Security and US Debt Date: 4/8/2013 5:55 PM
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<<The employment tax has reverted to 6.2%. See: http://www.irs.gov/publications/p15/ar02.html#en_US_2013_pub......

Donna
>>


That's 6.2% paid by employees PLUS 6.2% paid by employees PLUS Medicare taxes --- for a total of 14.% plus.


No wonder so many blue collar workers are looking for ways to earn income off the books without paying taxes on it.



Seattle Pioneer

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