tag:blogger.com,1999:blog-10424035.post1094235598723113695..comments2023-09-11T08:58:24.710-06:00Comments on Reach Upward: Social Security Concerns (Part I)Scott Hinrichshttp://www.blogger.com/profile/11831447472339880148noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-10424035.post-42344415698722090272006-12-16T10:23:00.000-07:002006-12-16T10:23:00.000-07:00I beg to disagree. The Social Security program do...I beg to disagree. The Social Security program does not face a survival threat (except perhaps a political one). There will be a period of time in the 30-50 year horizon when it will be unable to pay ALL the benefits at the currently prescribed levels, but it will still be able to pay something like 70% or more of what is now considered normal. <br /><br />What is not being seriously considered by the "fix Social Security now" crowd is raising the salary cap. If we tripled the cap (calling for contributions on the first $270,000 of income), the additional revenue (including interest earned over the next 30 years) would almost entirely eliminate the hiccup expected.<br /><br />When I hear politicians and think tanks talking about the "crisis" in Social Security and the need to "fix" it immediately, I know that these are people more interested in privatizing or eliminating the program than in saving it.Charles Dhttps://www.blogger.com/profile/02975241234146573609noreply@blogger.comtag:blogger.com,1999:blog-10424035.post-36012771826414059252006-12-15T08:16:00.000-07:002006-12-15T08:16:00.000-07:00DL, thanks for the link. I've checked out many di...DL, thanks for the link. I've checked out many different analyses from a broad range of sources. Many of them include intricate statistical and financial analysis. One thing I can say for absolute certain is that there is extremely broad disagreement among the conclusions of these very smart people and think tanks.<br /><br />All of these analyses rely on guesses of certain factors. A few of these guesses are bizarre, but most of them seem quite reasonable. The upshot is that reasonable and smart people can disagree about what they think will happen with Social Security over the next century. However, most analyses agree that the program cannot survive past 50-100 years from now without major changes. We can work on making changes calculated to improve the program now, or we can leave it to future generations to solve.Scott Hinrichshttps://www.blogger.com/profile/11831447472339880148noreply@blogger.comtag:blogger.com,1999:blog-10424035.post-13747148557477514132006-12-13T18:23:00.000-07:002006-12-13T18:23:00.000-07:00There are a few basic facts that are not in eviden...There are a few basic facts that are not in evidence here:<br /><br />1) According to the numbers President Bush is using, Social Security can pay all promised benefits for the next 37 years without any changes at all. Even if nothing were done by 2043, the program would still pay a higher real (adjusted for inflation) benefit than what people receive today.<br /><br />2) In 37 years, the program will experience a temporary minor shortfall due to the baby boomer retirements. It will only last 20 years or so.<br /><br />3) The entire shortfall such as it is could be removed by simply raising or removing the cap on the payroll tax currently over $90,000.<br /><br />I would suggest you get some more realistic analysis. Try the <a href="http://www.cepr.net/index.php?option=com_issues&task=view_issue&issue=19&Itemid=67">Center for Economic and Policy Research</a> which has done a great deal of work on the subject. Then you might want to turn your attention to some of the real crises facing this country.Charles Dhttps://www.blogger.com/profile/02975241234146573609noreply@blogger.comtag:blogger.com,1999:blog-10424035.post-46794977718415098692006-12-12T14:27:00.000-07:002006-12-12T14:27:00.000-07:00Jesse, thanks for your astute observations. I am ...Jesse, thanks for your astute observations. I am trying to address actions that might have some political feasibilty. In your linked post you discuss killing Social Security completely. But you seem to suggest that we grandfather in those already collecting and those that are fairly close to collecting. I don't this plan would ever make it out of committee. In fact, I'd be surprised if a committee chair would even give it a hearing.<br /><br />To grandfather in anyone, we'd have to continue to collect from current workers. While many in the younger generation do not count on SS being there when they retire, it's amazing to see how people's attitudes change as they get closer to the age for collection. You're not going to be able to sell a plan that keeps younger workers paying only to fund those that are no longer working.<br /><br />Most of us want to help others, but there are limitations. There's got to be something in it for the producers. Rep. Craig Frank has an interesting post about redistricting that relates to this <a href="http://underthedome.org/?p=160">here</a>. I also hope to address this a bit more in detail when I get around to doing part II of this series.Scott Hinrichshttps://www.blogger.com/profile/11831447472339880148noreply@blogger.comtag:blogger.com,1999:blog-10424035.post-68391914652972162042006-12-12T13:52:00.000-07:002006-12-12T13:52:00.000-07:00It's interesting to note that FDR was the same man...It's interesting to note that FDR was the same man who said: "In politics, nothing happens by accident. If it happens, you can bet it was planned that way." It makes you wonder if the system was setup to fail from the start, or perhaps if the original Social Security program was intended to be the first step on our march towards socialized government benefits for all.<br /><br />You're right, though: nobody has the guts to make some tough and risky choices about how to solve this failure of a program. The only real fix is to kill it, but the AARP and political left won't have any of it, and the political right doesn't seem to be willing to reverse the process as gradually as it was hoist upon us. (I wrote at length about what I think <a href="http://www.coolestfamilyever.com/2006/11/02/its-still-good-its-still-good-part-2-government-assistance/">the solution</a> should be.)<br /><br />There is simply no political will to acknowledge that a retirement system that's only a few shades away from a Ponzi scheme cannot sustain itself on the current course. It's going to take slashing benefits, raising the retirement age, diversifying beyond T-bills (the only legal investment vehicle for the "trust" fund), and a long phase-out.<br /><br />We won't see any of these happening, however, because nobody wants to be the one holding the bag. Those currently collecting are trying to maintain the status quo for as long as they can so that it becomes someone else's problem. The near-retirement don't want to lose out on the money they've been paying for 30 or 40 years. The young don't count on it being there for them but aren't terribly concerned as to how the program disappears. The political left either refuses to even acknowledge a problem or stalwartly claims that we can fix it with only minor tweaks.<br /><br />With all of these interests, there is little hope of steering the ship away from the rocky shores before a major catastrophe.Jesse Harrishttps://www.blogger.com/profile/11468928702710912142noreply@blogger.com