Social Security has not been destroyed. However, it could use some modifications (in terms of tax rates and benefits) to reflect current and future demographics as a way of preventing unreasonable SS tax increases in the future (in order to maintain current benefits). I will let you define what "unreasonable" is. The last major changes were over 30 years ago. Whether we will get those changes in the near term is doubtful, in my opinion.
The fundamental issue that makes Social Security viable today, and into the future, is that each worker produces more than he needs and some of that productivity is siphoned off, in the form of taxes, to support retired people. Social Security is a "pay as you go plan". Increases in productivity and/or decreases in benefits will control how much the workers are taxed to support Social Security. The $2.6T "trust fund" simply marks the point in time where Congress will have to make changes to SS or, by law, will be forced to reduce the current benefit schedule. SS has already turned the corner and is paying out more than it takes in but the Treasury department can legally take on new global debt to pay the short fall. Once the "trust fund" (which is only IOUs from Treasury to SS that were issued when SS taxes exceeded benefits payed) is "exhausted", SS will not be legally able to pay 100% of benefits. I believe the projection is 77% of benefits in 2033. Don't be confused by Government rhetoric: the "trust fund" is really an illusion to everybody but Government accountants. For example, in your own personal finances you don't typically write yourself an IOU for $1000 and then go a buy a new TV and call it a wash. If you do, your probably have debt problems.
SS benefits must be paid by incoming SS taxes otherwise the Government must take on additional debt. That is where we are today: incoming SS benefits are larger than incoming SS taxes and the Government is taking on additional debt when the "trust fund" IOUs are exchanged for real money on the global debt markets. The IOUs will have all been "cashed in" in 2033, by current projections.
Quote:
Originally Posted by Guest
I must admit that I have come to ignore some of the technical aspects of government speak because there has been so many layers of creative accounting by pols that one could get caught up in Abbott's/Costello's "Who Is On First?" and its obviously intentional on their part and I am not going to continue to play their game.
Few if any presidential candidates have the political power or will to effectively alter social security. Social security was a good thing that pols greed destroyed. I say so because some folks just will never save they can't or won't and at least this safety net reduce some actual entitlements (ie things they never paid for, unlike SS deductions. For those of us who did save or do, SS has been the third leg of our retirement program.
I agree with adjustments in retirement age and monthly deductions because people live longer and because income brackets etc have changed over the years.
So again we have the pols diverting the problem as being social security when the problem is with thir management and perhaps the focus ought to be on their mismanagement. I write my representatives often and flatly tell them to keep their hands off our money
Personal Best Regards:
|