Future of Social Security

[blue_green_sparks]

The fund reserves that help pay for Social Security benefits will be depleted in 2035. I have updated my financial planning for a 33% cut around 2032, assuming Trump shortens the time to depletion with his policies. I am curious what you all think. I am very opposed a "Means Test" that looks at one's savings to calculate payments. Seems very unfair to those who sacrificed early on to save for retirement.  Cutting SS could be political suicide, but reality dictates that something must happen.

[ixtap]

Depending on your definition of "wealthy," it doesn't really even take that. Just eliminating the income cap on SS contributions would go a long way to fixing things.

[Dictionary Time]

What about an invisible cut: reducing or eliminating inflation adjustments? Over a few years, it can really add up

[dandarc]

What about an invisible cut: reducing or eliminating inflation adjustments? Over a few years, it can really add up

They already did that when they went to the chained CPI - quite unpopular move.

Edit: Maybe they've only talked about it and hasn't actually happened yet.

[dividendman]

I doubt there will be any nominal cuts to social security since both parties are against it and people will notice that more.

Everything else is on the table though.

Then again, Congress might do nothing then we'll get a big nominal (and real) cut.

[reeshau]

If nothing is changed, this is the scenario:

"However, the trustees project that Social Security would only be able to pay 83 percent of scheduled benefits in 2035, and that share would eventually shrink to 73 percent."

https://www.urban.org/urban-wire/if-social-security-runs-out-money-poverty-among-older-adults-and-people-disabilities

So, why would a choice be a cut worse than that?

I think raising the contribution limit would be something that is nominally smaller, but actuality significant (since it affects younger people more--for a longer part of their lives)

[mistymoney]

question I've been thinking about in relation to this - if wages since the 70's had really kept up with inflation would there still be a shortfall?

If we added productivity gains to average salaries, rather than only at the c-suite, what then of the shortfall?

[blue_green_sparks]

question I've been thinking about in relation to this - if wages since the 70's had really kept up with inflation would there still be a shortfall?

If we added productivity gains to average salaries, rather than only at the c-suite, what then of the shortfall?

Good point. The growing wealth divide is a gotcha in so many ways. I just realized there is another way to fix SS. Just raise the threshold cap on earnings that are taxed by more than a token amount. The limit on the amount of your earnings that can be taxed for Social Security is in 2024 is $168,600, increasing to $176,100 in 2025. That means very high earners pay proportionally way less FICA than average workers. Or throw in some FICA tax on large capital gains. But no, that's not gonna happen. The average voter just won't be thinking much about the coming rug pull.

[reeshau]

The fundamental issue has been the aging of the population, and the corresponding drop in active employees per retiree.  It has been declining for a long time, and is projected to continue to decline.

https://www.pgpf.org/blog/2022/08/the-ratio-of-workers-to-social-security-beneficiaries-is-at-a-low-and-projected-to-decline-further

If only we could find millions of young workers, who would be willing to pay FICA taxes to support our retirees.  But no, we're going to kick out this obvious answer to the mess instead.

[blue_green_sparks]

Undocumented immigrants paid $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes in 2022. With no real expectations of any return.

Given the financial prospects of the median recently or soon-to-be retired worker in the US, any functioning government would see SS/Medicare as a top 5 priority (along with climate change). Grandma will be looking for someone to feed and shelter her.

[GilesMM]

The safest assumption for your planning purposes is that SS goes away.

[blue_green_sparks]

The safest assumption for your planning purposes is that SS goes away.

I do wonder how stocks are going to return with a hundred million Americans on the edge of poverty. You don't see that data in the 4% rule. Look how much a couple of additional $2K checks affected the economy during COVID. Now imagine the loss of that amount monthly for a decade.

[Gone Fishing]

What about an invisible cut: reducing or eliminating inflation adjustments? Over a few years, it can really add up

They already did that when they went to the chained CPI - quite unpopular move.

Edit: Maybe they've only talked about it and hasn't actually happened yet.

Not sure what type of mathematical trickery was used, but that is exactly what has happened.  Probably the most politically tenable solution to the shortfall, just fail to keep up with inflation.  Benefits could easily be half (in terms of buying power) or less, of their 2000 levels by 2050.

https://www.cnn.com/2023/05/10/politics/social-security-benefits-inflation/index.html

[Turtle]

question I've been thinking about in relation to this - if wages since the 70's had really kept up with inflation would there still be a shortfall?

If we added productivity gains to average salaries, rather than only at the c-suite, what then of the shortfall?

Good point. The growing wealth divide is a gotcha in so many ways. I just realized there is another way to fix SS. Just raise the threshold cap on earnings that are taxed by more than a token amount. The limit on the amount of your earnings that can be taxed for Social Security is in 2024 is $168,600, increasing to $176,100 in 2025. That means very high earners pay proportionally way less FICA than average workers. Or throw in some FICA tax on large capital gains. But no, that's not gonna happen. The average voter just won't be thinking much about the coming rug pull.

One other option I haven’t yet seen floated is to eliminate the cap on what employers pay, but leave the cap as it currently exists for workers. 

[dandarc]

What about an invisible cut: reducing or eliminating inflation adjustments? Over a few years, it can really add up

They already did that when they went to the chained CPI - quite unpopular move.

Edit: Maybe they've only talked about it and hasn't actually happened yet.

Not sure what type of mathematical trickery was used, but that is exactly what has happened.  Probably the most politically tenable solution to the shortfall, just fail to keep up with inflation.  Benefits could easily be half (in terms of buying power) or less, of their 2000 levels by 2050.

https://www.cnn.com/2023/05/10/politics/social-security-benefits-inflation/index.html

Price of eggs is maybe a bad example. Very volatile - basically driven by how far away from the most recent flu outbreak that required killing half the chickens in the country we are at this moment.

[MrGreen]

What would making SS go away accomplish? If nothing is done and benefits are only paid as revenues come in, it's a net neutral. Nothing is gained by eliminating it entirely.

[reeshau]

What would making SS go away accomplish? If nothing is done and benefits are only paid as revenues come in, it's a net neutral. Nothing is gained by eliminating it entirely.

Yeah, and from the flip side: if it's eliminated, you can't keep the FICA tax--it would be political suicide.

The worst cast is the 73% of promised benefits that are coming in.

Fun fact: the way SS would function under that scenario is itself ugly.  It isn't that your monthly checks would be 73% of promised.  Instead, your payments are delayed until they can be met in full.  So, the checks get spread out further.  Even worse news for Americans on the edge, or unable to budget.

[Telecaster]

The fund reserves that help pay for Social Security benefits will be depleted in 2035. I have updated my financial planning for a 33% cut around 2032, assuming Trump shortens the time to depletion with his policies. I am curious what you all think. I am very opposed a "Means Test" that looks at one's savings to calculate payments. Seems very unfair to those who sacrificed early on to save for retirement.  Cutting SS could be political suicide, but reality dictates that something must happen.

The SS shortfall is a myth created by corrupt politicians.  True, if nothing is done, the SS trust fund will be depleted in a decade or so.   But the notion that SS will then need to be cut is pure fiction. There is nothing that says SS can't be paid for out of general funds.   The only reason why SS won't be able to pay promised benefits is because self-serving politicians want to divert funds for their own purposes. 

Certainly, there needs to be structural changes to SS.  This can be easily accomplished by a variety of small changes.  For example, small changes to the CPI, raising the tax cap, and additional means testing (it already is means tested).   Tax increases are never popular, but drastic measures are not required. 

SS is one of the most successful government programs of all time.   It lifts about 50% of our seniors out of poverty, it provides benefits for families who lose their primary breadwinner, and helps keep the disabled out of poverty.  It does this very efficiently with almost no overhead.

If we, as a society, are unwilling to care for the most vulnerable among us...well, that says a lot about us, and none of it is good.  I don't want to live in a society where our seniors go hungry or cold because of a slight change in the tax code.   

 

[NoEllipsis]

Price of eggs is maybe a bad example. Very volatile - basically driven by how far away from the most recent flu outbreak that required killing half the chickens in the country we are at this moment.

YAY! This is the first time I think I've seen someone actually mention the real reason eggs are a terrible indicator of inflation. It has nothing to do with inflation, it has everything to do with Avian Influenza outbreaks and mass cullings of chickens in farms. I work in wildlife rehab and no one seems to know that this is the real reason egg prices have outpaced everything.

Also, just a forewarning, avian influenza tends to pick up during winter when more migrations happen... so if your grocery store seems low on eggs soon......

[dandarc]

Price of eggs is maybe a bad example. Very volatile - basically driven by how far away from the most recent flu outbreak that required killing half the chickens in the country we are at this moment.

YAY! This is the first time I think I've seen someone actually mention the real reason eggs are a terrible indicator of inflation. It has nothing to do with inflation, it has everything to do with Avian Influenza outbreaks and mass cullings of chickens in farms. I work in wildlife rehab and no one seems to know that this is the real reason egg prices have outpaced everything.

Also, just a forewarning, avian influenza tends to pick up during winter when more migrations happen... so if your grocery store seems low on eggs soon......

I'm a computer programmer who wrote the programs implementing state of the art price controls for WIC in a large state.

Being able to handle this level of price volatility while still controlling prices charged by hundreds (maybe thousands) of grocers is one feature of how we do it vs the old way

[dandarc]

Price of eggs is maybe a bad example. Very volatile - basically driven by how far away from the most recent flu outbreak that required killing half the chickens in the country we are at this moment.

YAY! This is the first time I think I've seen someone actually mention the real reason eggs are a terrible indicator of inflation. It has nothing to do with inflation, it has everything to do with Avian Influenza outbreaks and mass cullings of chickens in farms. I work in wildlife rehab and no one seems to know that this is the real reason egg prices have outpaced everything.

Also, just a forewarning, avian influenza tends to pick up during winter when more migrations happen... so if your grocery store seems low on eggs soon......

WaPo had an article about just this yesterday.

[Dee18]

I voted for raising the cap on income that is taxed for social security.  For years I have thought it is crazy that there is a cap at all.  There is no wage based limit for Medicare tax and Social Security should have the same rule.

[dandarc]

I voted for raising the cap on income that is taxed for social security.  For years I have thought it is crazy that there is a cap at all.  There is no wage based limit for Medicare tax and Social Security should have the same rule.

This. And unless that last bend point is still too steep, you have the carrot of still increasing benefit amounts (just not increasing very fast).

[sonofsven]

Future of SS with *Dr* Oz at the helm: privatization.

[dividendman]

Future of SS with *Dr* Oz at the helm: privatization.

I thought he's just heading up Medicare and Medicaid, not Social Security.

[bacchi]

Future of SS with *Dr* Oz at the helm: privatization.

I thought he's just heading up Medicare and Medicaid, not Social Security.

Right, RFK Jr will (likely) be head of HHS.

[Ron Scott]

In a country like the US, with a successful fiat currency, the only thing stopping the government from simply printing more money to distribute as SS checks is inflation: Too many $$ chasing too few goods. If we can increase productivity (increase the supply of goods without increasing costs of production) that problem just goes away.

If we can’t increase productivity then we need another way to take money out of circulation, to “pay for” SS shortfalls. Rather than raising your taxes to do this, I’d prefer the government just STOP sending SS checks to those of us who don’t need it—and just treat it like the welfare program it is.

[sonofsven]

All they need to do is raise the FICA cap: problem solved.

[sonofsven]

Future of SS with *Dr* Oz at the helm: privatization.

I thought he's just heading up Medicare and Medicaid, not Social Security.

Right, RFK Jr will (likely) be head of HHS.

Oh, well that makes me feel better. Maybe we'll be able to get our ss checks from those convenience store Bitcoin machines.

[bacchi]

If we can’t increase productivity then we need another way to take money out of circulation, to “pay for” SS shortfalls. Rather than raising your taxes to do this, I’d prefer the government just STOP sending SS checks to those of us who don’t need it—and just treat it like the welfare program it is.

This sounds like a feel good measure like testing welfare recipients for drugs (ex-alcohol). Would asset testing actually make a dent and would it actually save money?

[bacchi]

Future of SS with *Dr* Oz at the helm: privatization.

I thought he's just heading up Medicare and Medicaid, not Social Security.

Right, RFK Jr will (likely) be head of HHS.

Oh, well that makes me feel better. Maybe we'll be able to get our ss checks from those convenience store Bitcoin machines.

The checks will be delivered with a quart of lukewarm unpasteurized milk.

[Ron Scott]

If we can’t increase productivity then we need another way to take money out of circulation, to “pay for” SS shortfalls. Rather than raising your taxes to do this, I’d prefer the government just STOP sending SS checks to those of us who don’t need it—and just treat it like the welfare program it is.

This sounds like a feel good measure like testing welfare recipients for drugs (ex-alcohol). Would asset testing actually make a dent and would it actually save money?

I actually spent a little time looking into this and you’re right. Means testing for SS distributions would not save a lot, unless you dipped into taking from the middle class.

But this decades-old game of wondering if SS will continue to be “solvent” and what we need to do to “protect it” still seems like a poorly written movie plot to me.

Just one example: Consider that the (totally voluntary) GOP tax cuts in Trump’s first term cost more than the supposed shortfall SS will experience as the rest of the boomers retire. How the government creates money, spends it, and takes it out of circulation through taxation and bond issuance is just too wrapped up in fairytales for my taste.

So fear not that SS will fail. You’ve got a better chance of getting hit by lightening.

[Much Fishing to Do]

My guess is they'll just add another tax, something akin to the NIIT or the Additional Medicare tax which can bring in funds but without implying a return on it to the taxpayer (just raising the cap without raising the max benefits would probably cause more pushback, just my guess).  The NIIT seemed to appear out of nowhere to me and is a significant amount so I would think the logical approach for sneaking something in.

Raising the full retirement age (which is really no different that cutting benefits, as I'm sure you could still take it at 62+ but then would of course be less), seems a lot tougher to fly.

[Ron Scott]

If it weren’t so sad, it’d be funny.

The SS “shortfall” has been a topic of importance since the 1970s as far as I can tell. The American voters have accepted that politicians will kick the can down the road until the last minute and with a few exceptions (Reagan raised the age and Gore called for a “lock box” fund during his campaign) there has been very little interest in actually fixing anything. The federal government treats it like a non-issue.

My personal view is that the GOP and Dems do nothing because it’s in their nature (they’re useless opportunists) and because they want to angle to point the finger and be the savior when the shit actually does hit the fan.

As above, at the core of the problem is the delicate balance between the amount of money in circulation and the availability of goods and services. The feds need to ensure there’s a way to fully fund SS without pumping so much money into the system that the money ends up chasing too few goods and services…creating inflation.

There are 4 primary ways to prevent the inflation scenario.
1. Raise taxes (takes money out of the economy and that money can’t be spent)
2. Issue Bonds (takes money out like taxes, but requires the government to pay interest…which can spiral)
3. Increase productivity (adds goods and services to the economy, ensuring the additional money doesn’t cause inflation)
4. Screw everyone. The old can’t afford to live and many have to move in with their kids. (This obviously won’t happen.)

#3 is the best and the most difficult to achieve.

Wouldn’t it be great if our leaders actually led, instead of wringing their hands and kicking the can?

[sonofsven]

If it weren’t so sad, it’d be funny.

The SS “shortfall” has been a topic of importance since the 1970s as far as I can tell. The American voters have accepted that politicians will kick the can down the road until the last minute and with a few exceptions (Reagan raised the age and Gore called for a “lock box” fund during his campaign) there has been very little interest in actually fixing anything. The federal government treats it like a non-issue.

My personal view is that the GOP and Dems do nothing because it’s in their nature (they’re useless opportunists) and because they want to angle to point the finger and be the savior when the shit actually does hit the fan.

As above, at the core of the problem is the delicate balance between the amount of money in circulation and the availability of goods and services. The feds need to ensure there’s a way to fully fund SS without pumping so much money into the system that the money ends up chasing too few goods and services…creating inflation.

There are 4 primary ways to prevent the inflation scenario.
1. Raise taxes (takes money out of the economy and that money can’t be spent)
2. Issue Bonds (takes money out like taxes, but requires the government to pay interest…which can spiral)
3. Increase productivity (adds goods and services to the economy, ensuring the additional money doesn’t cause inflation)
4. Screw everyone. The old can’t afford to live and many have to move in with their kids. (This obviously won’t happen.)

#3 is the best and the most difficult to achieve.

Wouldn’t it be great if our leaders actually led, instead of wringing their hands and kicking the can?

Yes, it would be great, but most of them just bring up distractions to avoid dealing with it.
All they have to do is raise the FICA cap. That's it.
For 2025 the cap is at $176,100. So all income above that is untaxed, where those of us with lower income pay the tax on all of our income.
Raise the cap to one million.

[Villanelle]

Is the poll about what I think will happen, or what I think should be done?

I'd start by significnatly increasing the income cap for contributions, if not doing away with it all together.   

How about a policy where companies whose c-suite employees (or any employees) are paid >$10m have to contribute an additional x% as the employer contribution, for all employees of the company.  If you pay your CEO $50m, you can pay more toward social security for every janitor, receptionist, mail room employee (do companies even still have significant mail rooms?)  data enterer, analyst, and all the way up and across the board. 

[By the River]

...
There are 4 primary ways to prevent the inflation scenario.
1. Raise taxes (takes money out of the economy and that money can’t be spent)
2. Issue Bonds (takes money out like taxes, but requires the government to pay interest…which can spiral)
3. Increase productivity (adds goods and services to the economy, ensuring the additional money doesn’t cause inflation)
4. Screw everyone. The old can’t afford to live and many have to move in with their kids. (This obviously won’t happen.)

#3 is the best and the most difficult to achieve.

Wouldn’t it be great if our leaders actually led, instead of wringing their hands and kicking the can?

I would add #5 Reduce government spending which reduces competition for goods and services.  Argentina did it and monthly inflation has fallen from 25% in December 2023 to 2.7% in October. 

[Telecaster]

I would add #5 Reduce government spending which reduces competition for goods and services.  Argentina did it and monthly inflation has fallen from 25% in December 2023 to 2.7% in October.

Isn't that the exact opposite of what we want right now?   Competition for goods and services bids up wages, which increases tax revenue.

[Ron Scott]

If it weren’t so sad, it’d be funny.

The SS “shortfall” has been a topic of importance since the 1970s as far as I can tell. The American voters have accepted that politicians will kick the can down the road until the last minute and with a few exceptions (Reagan raised the age and Gore called for a “lock box” fund during his campaign) there has been very little interest in actually fixing anything. The federal government treats it like a non-issue.

My personal view is that the GOP and Dems do nothing because it’s in their nature (they’re useless opportunists) and because they want to angle to point the finger and be the savior when the shit actually does hit the fan.

As above, at the core of the problem is the delicate balance between the amount of money in circulation and the availability of goods and services. The feds need to ensure there’s a way to fully fund SS without pumping so much money into the system that the money ends up chasing too few goods and services…creating inflation.

There are 4 primary ways to prevent the inflation scenario.
1. Raise taxes (takes money out of the economy and that money can’t be spent)
2. Issue Bonds (takes money out like taxes, but requires the government to pay interest…which can spiral)
3. Increase productivity (adds goods and services to the economy, ensuring the additional money doesn’t cause inflation)
4. Screw everyone. The old can’t afford to live and many have to move in with their kids. (This obviously won’t happen.)

#3 is the best and the most difficult to achieve.

Wouldn’t it be great if our leaders actually led, instead of wringing their hands and kicking the can?

All they have to do is raise the FICA cap. That's it.
For 2025 the cap is at $176,100. So all income above that is untaxed, where those of us with lower income pay the tax on all of our income.

Right, raising taxes could do it. That’s the #1 above. But people have different feelings on doing that; neither party did it while they had control of congress; and at least for the next 4 years or so it doesn’t look like this is going to happen.

I would add #5 Reduce government spending which reduces competition for goods and services.  Argentina did it and monthly inflation has fallen from 25% in December 2023 to 2.7% in October.

Agreed, this should be another solution…#5. It would be hard to find much of a consensus in the country that government is being run efficiently. The trick is—what to cut—which gets different groups motivated to weigh in politically. (Try to close a military base that the military doesn’t want anymore and you’ll hear from the local politicians in short order!)

—-

I like the “increase productivity” idea because it’s really not politically fraught. Most people like to see productivity gains and people aren’t going to complain when SS is safely taken care of. Big tech  may do it. We shall see.

[sonofsven]

If it weren’t so sad, it’d be funny.

The SS “shortfall” has been a topic of importance since the 1970s as far as I can tell. The American voters have accepted that politicians will kick the can down the road until the last minute and with a few exceptions (Reagan raised the age and Gore called for a “lock box” fund during his campaign) there has been very little interest in actually fixing anything. The federal government treats it like a non-issue.

My personal view is that the GOP and Dems do nothing because it’s in their nature (they’re useless opportunists) and because they want to angle to point the finger and be the savior when the shit actually does hit the fan.

As above, at the core of the problem is the delicate balance between the amount of money in circulation and the availability of goods and services. The feds need to ensure there’s a way to fully fund SS without pumping so much money into the system that the money ends up chasing too few goods and services…creating inflation.

There are 4 primary ways to prevent the inflation scenario.
1. Raise taxes (takes money out of the economy and that money can’t be spent)
2. Issue Bonds (takes money out like taxes, but requires the government to pay interest…which can spiral)
3. Increase productivity (adds goods and services to the economy, ensuring the additional money doesn’t cause inflation)
4. Screw everyone. The old can’t afford to live and many have to move in with their kids. (This obviously won’t happen.)

#3 is the best and the most difficult to achieve.

Wouldn’t it be great if our leaders actually led, instead of wringing their hands and kicking the can?

That sounds so esoteric, but it's really not complicated. The money we pay in while working is paid out in benefits at that time. Pay as you go.
They've known for a long time about the coming shortfall. They tried to adjust for the large number of boomer retirees, but that event, combined with a dropping birth rate, is leading to a cut in the future.
In 2034 benefits will need to be cut if nothing is done.
If Trump follows through on his campaign promises he will shrink that timeline to 2031.
And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

[Ron Scott]

And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

BTW, this can put a big dent in the shortfall, but not eliminate it altogether.

What I like about it is it finally discards the myth that SS is an “insurance annuity plan” that pays back what was put in with interest. Then we can treat the “contributions” as what they really are: taxes. And we can start defining realistic eligibility requirements for recipients.

SS is a welfare program for old people. People who don’t need it shouldn’t get it and those who need some should get it on a sliding scale—not based on how much in SS taxes they paid. What sense does it make give more welfare $$ to people based on the fact that they EARNED MORE than others?

This could also eliminate the stupidity of taxing SS payments. You give me $100 and take $15 back? Stop the bullshit and just give me my $85. Etc.

The current plan seems nice until you stop to think how ridiculous it is.

[sonofsven]

And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

BTW, this can put a big dent in the shortfall, but not eliminate it altogether.

What I like about it is it finally discards the myth that SS is an “insurance annuity plan” that pays back what was put in with interest. Then we can treat the “contributions” as what they really are: taxes. And we can start defining realistic eligibility requirements for recipients.

SS is a welfare program for old people. People who don’t need it shouldn’t get it and those who need some should get it on a sliding scale—not based on how much in SS taxes they paid. What sense does it make give more welfare $$ to people based on the fact that they EARNED MORE than others?

This could also eliminate the stupidity of taxing SS payments. You give me $100 and take $15 back? Stop the bullshit and just give me my $85. Etc.

The current plan seems nice until you stop to think how ridiculous it is.

I don't know where you are getting your information from, but it's pretty much wrong across the board. And your ideas would lead to the imminent death of SS.
Right now, the push is on from the Republicans to privatize SS by making Advantage plans the default choice when signing up.

[Ron Scott]

And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

BTW, this can put a big dent in the shortfall, but not eliminate it altogether.

What I like about it is it finally discards the myth that SS is an “insurance annuity plan” that pays back what was put in with interest. Then we can treat the “contributions” as what they really are: taxes. And we can start defining realistic eligibility requirements for recipients.

SS is a welfare program for old people. People who don’t need it shouldn’t get it and those who need some should get it on a sliding scale—not based on how much in SS taxes they paid. What sense does it make give more welfare $$ to people based on the fact that they EARNED MORE than others?

This could also eliminate the stupidity of taxing SS payments. You give me $100 and take $15 back? Stop the bullshit and just give me my $85. Etc.

The current plan seems nice until you stop to think how ridiculous it is.

I don't know where you are getting your information from, but it's pretty much wrong across the board. And your ideas would lead to the imminent death of SS.
Right now, the push is on from the Republicans to privatize SS by making Advantage plans the default choice when signing up.

I am not regurgitating arguments from other sources LOL.

If you disagree with any or all my points, rather than assume they come from elsewhere, why don’t you just respond to them and tell us what your opinions are?

(FWIW, Advantage plans are Medicare, not SS.)

[mistymoney]

And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

BTW, this can put a big dent in the shortfall, but not eliminate it altogether.

What I like about it is it finally discards the myth that SS is an “insurance annuity plan” that pays back what was put in with interest. Then we can treat the “contributions” as what they really are: taxes. And we can start defining realistic eligibility requirements for recipients.

SS is a welfare program for old people. People who don’t need it shouldn’t get it and those who need some should get it on a sliding scale—not based on how much in SS taxes they paid. What sense does it make give more welfare $$ to people based on the fact that they EARNED MORE than others?

This could also eliminate the stupidity of taxing SS payments. You give me $100 and take $15 back? Stop the bullshit and just give me my $85. Etc.

The current plan seems nice until you stop to think how ridiculous it is.

These are your opinoins, not facts. Your postings in general are very light on facts, and very heavy on opinoins. Further, it seems you don't know the difference between the two.

As has been stated before, this may not be the board you are looking for. And in case you didn't know, it is rude to derail a thread on a different question on social security to revisit your unpopular opinoin that you already had an entire thread you started about.

[dandarc]

I mean, removing cap does close about 70% of the gap and also kicks the can on "HAVE TO REDUCE BENEFITS RIGHT NOW" about 25 years further down the road. Seems like raising that or eliminating it all-together should be a part of the solution. But that assumes this link between the payroll taxes and the benefit payouts has to remain the way it has been.

To me, a preferable would just pay this program out of the general budget rather than these dedicated funds that are little more than accounting entries. Might even pave the way to getting a UBI someday if we free ourselves from this assumption that SS has to be paid for out of dedicated revenue streams and funds.

[mistymoney]

I mean, removing cap does close about 70% of the gap and also kicks the can on "HAVE TO REDUCE BENEFITS RIGHT NOW" about 25 years further down the road. Seems like raising that or eliminating it all-together should be a part of the solution. But that assumes this link between the payroll taxes and the benefit payouts has to remain the way it has been.

To me, a preferable would just pay this program out of the general budget rather than these dedicated funds that are little more than accounting entries. Might even pave the way to getting a UBI someday if we free ourselves from this assumption that SS has to be paid for out of dedicated revenue streams and funds.

does 70% that include giving the 15% benefit adding in those wages to the persons 35 year monthly average?

could add another bend piont of only 5% benefit and maybe no benefit at some level?

[dandarc]

More or less - projections have that increasing the income from the payroll taxes by a full 1% of GDP, while the increase in benefits associated with it only costs about 0.1% of GDP.

So yeah, could add another, lower bend-point or even cap benefits, but there isn't a ton of juice to squeeze with that (because that 15% bend point is already quite a slow accumulation of additional benefits. If we take removing the cap entirely as a given, then there's just more room for gains with things like increasing the tax rates or decreasing benefits vs. adding another, slower bend point.

ETA: also cannot help but wonder how much revenue (net of additional benefits) is being lost to S-Corp taxation rules. Wondering that as a solo-S-Corp, who certainly could afford to pay more FICA tax than he currently does.

[dandarc]

Also may have over-stated with 70% - estimates, so depending where you read you'll find numbers from 50-70% of the problem covered by that change, and it is the largest single "increase revenue" side of the coin most places even consider. Next closest impact is a 1% increase in the tax rate (why 2% or more is not really present in most analysis? No idea).

Barring a rethinking of the necessity of tying revenue and costs the way we currently do, gonna have to be a combination of things - both on the income side and the expense side.

[sonofsven]

And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

BTW, this can put a big dent in the shortfall, but not eliminate it altogether.

What I like about it is it finally discards the myth that SS is an “insurance annuity plan” that pays back what was put in with interest. Then we can treat the “contributions” as what they really are: taxes. And we can start defining realistic eligibility requirements for recipients.

SS is a welfare program for old people. People who don’t need it shouldn’t get it and those who need some should get it on a sliding scale—not based on how much in SS taxes they paid. What sense does it make give more welfare $$ to people based on the fact that they EARNED MORE than others?

This could also eliminate the stupidity of taxing SS payments. You give me $100 and take $15 back? Stop the bullshit and just give me my $85. Etc.

The current plan seems nice until you stop to think how ridiculous it is.

I don't know where you are getting your information from, but it's pretty much wrong across the board. And your ideas would lead to the imminent death of SS.
Right now, the push is on from the Republicans to privatize SS by making Advantage plans the default choice when signing up.

I am not regurgitating arguments from other sources LOL.

If you disagree with any or all my points, rather than assume they come from elsewhere, why don’t you just respond to them and tell us what your opinions are?

(FWIW, Advantage plans are Medicare, not SS.)

Thanks for the correction

[Ron Scott]

And again, all we have to do is raise the FICA cap so high income earners are paying tax on all of their income like those under $170k.

BTW, this can put a big dent in the shortfall, but not eliminate it altogether.

What I like about it is it finally discards the myth that SS is an “insurance annuity plan” that pays back what was put in with interest. Then we can treat the “contributions” as what they really are: taxes. And we can start defining realistic eligibility requirements for recipients.

SS is a welfare program for old people. People who don’t need it shouldn’t get it and those who need some should get it on a sliding scale—not based on how much in SS taxes they paid. What sense does it make give more welfare $$ to people based on the fact that they EARNED MORE than others?

This could also eliminate the stupidity of taxing SS payments. You give me $100 and take $15 back? Stop the bullshit and just give me my $85. Etc.

The current plan seems nice until you stop to think how ridiculous it is.

These are your opinoins, not facts. Your postings in general are very light on facts, and very heavy on opinoins. Further, it seems you don't know the difference between the two.

Can you explain to us how you’re not confusing facts with conventions?