Tuesday, November 23, 2010
CBS Evening News reports on Social Security:The reporter, Anthony Mason, had the following talking heads in the segment: - Andrew Biggs of the AEI saying that (a) people living longer is a problem, and (b) Social Security was intended to only be a program to keep seniors out of poverty.
- Erskine Bowles, saying that this nation has made promises that it cannot keep.
- Doris Kerns Goodmwin saying that Social Security was (partially) intended to get seniors out of the workforce so that younger people could get jobs.
- Rep. Paul Ryan saying that raising the retirement age is the way to go.
This was presented as something of a crisis since there are "only" 27 years until adjustments would have to be made.
posted by Quiddity at 11/23/2010 07:08:00 PM
7 comments
I want to emphasis the "partially" qualifier in Doris Kerns Goodwin's answer. The primary purpose of Social Security was to keep the old out of poverty. It has done such a good job of that, that people can't image what the alternative would look like.
Medical science has made it possible to live longer and remain productive longer. I see no problem in increasing the retirement age to match the new reality.
Well, it's really 27 years where more and more of the general fund, coming from income and business taxes, will have to be used to repay the S.S. bonds. This means that, unlike today, tomorrow's working generation is not just going to be paying Social Security taxes to fund Social Security, but the government will be spending more and more of their income taxes to fund the Social Security deficit, until the bonds run out, which will be right about the time the next generation is ready to retire. At that point, their payments will either have to be cut radically, or Social Security will have to be supported by the general fund just like any other government welfare program.
And I've posted at length about how the Social Security "trust fund" is illegitimate. The trust fund is double dipping, plain and simple. The current working generation got the full benefit of the additional money paid into the "trust fund." It was placed in the general fund and spent on things like highways, defense and social programs. Now the same generation that received all those benefits of the additional taxing and spending expect to receive the benefits all over again, in the form of bond repayments. The Social Security trust fund was a cruel scam. It allowed the Clinton/Bush era government to "live large", and place an obligation on the next generation to match their self-indulgent excess dollar for dollar.
It didn't have to be this way. Social Security as a pay-as-you-go system was completely legitimate, so long as each generation understood that their payments were effectively tied to their childbearing rate. Like any Ponzi scheme, Social Security relied on an expanding population of participants. The trust fund was an attempt to not only have it both ways, but to do it by stealing from their own children.
Rockie, you almost have it right. For 30 years, the working class people have paid two income related taxes to enable the rich to pay less taxes. Now the time has come to collect on the bonds and the rich are digging in to avoid paying their obligation.
le sigh.
There is no "double dipping" with SSTF.
Wage earners under the FICA cap overpaid $1.5T in, 1992-now, and the nation's wealthy 10% who pay 70% of the income tax will soon have to repay the money owed to the wage earners.
Double-dip my ass.
>I see no problem in increasing the retirement age to match the new reality.
The problem is it's the people over the FICA cap who are living these extra years.
Raising the FICA cap will allow everyone to retire earlier. Win-win.
Wage earners under the FICA cap overpaid $1.5T in, 1992-now, and the nation's wealthy 10% who pay 70% of the income tax will soon have to repay the money owed to the wage earners.
... instead of paying wages to new employees. It was intergenerational theft.
> instead of paying wages to new employees
complete non-sequitur.
Voodoo economics was BS 30 years ago and it's still BS today.
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