2024 SOCIAL SECURITY REPORT IS OUT THE MEDIA MISS THE POINT
The 2024 Social Security Trustees Report came out on Monday, May 6. You can find dozens of press reports and other commentary online, most of which are written by people who actually know nothing about Social Security except what they read in the papers. Some are written by people who do know what they are talking about but write in a way that is likely to mislead.
For today I am just going to look at the May 6 analysis: “Analysis of the 2024 Social Security Trustees’ Report-Mon, 05/06/2024 – 12:00,” Committee for a Responsible Federal Budget.
Here are some quotes from CRFB followed my comments.
CRFB Social Security faces large and rising imbalances. According to the Trustees, Social Security will run cash deficits of $3 trillion over the next decade, the equivalent of 2.3 percent of taxable payroll or 0.8 percent of Gross Domestic Product (GDP). Annual deficits will grow to 3.4 percent of payroll (1.2 percent of GDP) by 2050 and 4.6 percent of payroll (1.6 percent of GDP) by 2098. Social Security’s 75-year actuarial imbalance totals 3.5 percent of payroll, which is over 1.2 percent of GDP or nearly $24 trillion in present value terms.
Me: This is all true. But notice the scare language: “large and rising”. The imbalance is quite small and is not “rising,” depending on how you look at it. It is what it has always been (since 1983): a need to increase the payroll tax about 4% (2% for workers and 2% for employers) beginning in about 2035. It looks like it is rising because we look at it through a 75-year actuarial window, and it’s a moving window. Each year, one year that is already paid for falls outside the window into the past, and one year not already paid for enters the window from the future. But nothing important about Social Security has changed.
And notice “cash deficits.” There is no current deficit and will not be one until 2035. The years between now and then are already paid for. In the first place by the existing payroll tax, and in the second place by the Trust Fund that was paid for by the baby boomers in order to pay the extra money that would be needed to pay for their greater numbers, which otherwise would have been an unfair burden on the smaller following generation if paid by the normal pay as you go formula. By “cash deficits” they mean we have now reached the point where total benefits being paid this year will exceed the total cash income that comes from the payroll tax, with the difference being made up by drawing down the Trust Fund, as was always intended.
CRFB tells you the ten, 25, and 75-year deficits. But it is hard to get your mind around numbers that tell the number of dollars needed over tens of years in the future by 200 million to 300 million people whose average wage will rise from about 70,000 dollars per year today to one million 2024 dollars per year (about half of this is inflation).
What this means is while your tax will have increased by 2%, your real wages will have increased about 400%. [Be careful here: I do not intend to mislead you, but because of complications this can be misleading. Rather than go through all the complications now, just take the point that over time your wages are going to increase a lot faster than your payroll tax, so you will not be suffering an unbearable burden.]. But as a way to get a feel for the numbers: the total income of 200 million taxpayers making 60 thousand dollars per year for ten years is 120 trillion dollars. So the 3 trillion dollar deficit could be paid for by 2.5 percent of income. Fortunately for us the Actuaries have done the real arithmetic: the right answer is 2.3%. [Using percents finesses the problems of rising population and rising wages and “present value.”] No one would notice a 2.3 percent increase in the payroll tax, especially if they understood that it is not really a “tax” but a mandatory savings plan and insurance policy to make sure you have enough to live on when you can no longer work. This means you get the money back with effective interest of about three times as much as you pay in. Meanwhile, 8 tenths of a percent of GDP is not a large amount of money to pay for the growing needs of 60 million people (20% of the population). Especially since they paid for it themselves.
This can be thought of as the extra money they will need in order to pay their costs to live about two more years after they can no longer work. Or it can be thought of as the extra money SS will need to collect each year for the larger number of retires that will still be alive each year because they are living longer. This amount will grow over time reaching, a need to raise the tax about 4% of wages (2% from workers and 2% from employers). This can be reached gradually over twenty years, one tenth of a percent at a time while real wages will increase more than 20%. That means that at the end of the day you will have much more “take home” pay than you have today, while at the same time being able to save enough to pay for your needs over a longer lifetime after you can no longer work.
Note: they start with a ten-year deficit, then talk about raising the tax over 75 years, and then the “actuarial deficit” over 75 years. The actuarial deficit is the amount it would take to put in the bank today to pay for SS for the next 75 years. It is less than the amount of tax increase needed by the end of the 75-year period, because that “immediate and permanent tax rate draws down the Trust Fund and will not reach the rate needed to balance income with outgo after that time. While the 4% increase preserves the Trust Fund and reaches the tax rate needed to balance income with outgo for the foreseeable future. We don’t have 20 trillion dollars to put in the bank today to pay for the seventy-five years. But we can rely on our own ability to pay for our daily bread one day at a time.
CRFB Time is running out to save Social Security. Policymakers have only a few years left to restore solvency to the program, and the longer they wait, the larger and more costly the necessary adjustments will be. Acting sooner allows more policy options to be considered, allows for more gradual phase in, and gives employees and employers time to plan.
Me: This is true. But “more policy options” mean Congress will consider cutting benefits, raising the retirement age, privatizing SS, or “making the rich pay.” Other fixes that can be made to look like making SS fairer while in fact making it less fair and destroy Social Security which has worked for over eighty years keeping people out of desperate poverty when they can no longer work. Meanwhile no one would even notice the 2% tax increase if introduced gradually over twenty years raising the payroll tax about one dollar per week in terms of today’s money But this option expires this year. After next year the “gradually” will need to be increasingly less gradual. If we wait until 2033 a 2% increase in the payroll tax for each the worker and the employer would be needed all at once. This still would not really be felt, but it will be noticed, and make it much easier for enemies of Social Security to stampede the people into letting Congress do something stupid that will result in killing Social Security before you even notice they have done it or can remember how you let them get away with it.
In conclusion, CRFB has stuck pretty close to true facts, but in a way that makes the Social Security “problem” sound much worse than it does when you actually know what you are talking about.
Dale,
Ive been following your posts for a while. My question is about whether there will be any visible impact in the Trustees’ report in the immediate years following the adopting of the .1%/yr plan. I’m a policymaker, albeit in the state level, but adopting the tax increase (which is all people will likely hear) will be easier to accept by elected officials if they can then point to the next year’s report and say, “See, we’ve already protected Soc Sec an extra two years” or whatever the case may be.
Halpin
I hesitate to say what the next Trustees Report would say. The Reports are overseen by the Trustees who are politicians and not actuaries. The Reports I have read over the years have always been accurate and truthful, but sometimes use language that misleads. For example they used to report a need for a 33% tax increase to save Social Security. But it is 33% of a 6% tax, or 2% of a paycheck. a paycheck that will be increasing every year.
More recent Trustees Reports have done much better, but you still need to read carefully to see that the increase needed over time is a combined tax increase of 3.5% of payroll, only half of which will show up on the workers pay stub…that will keep SS “actuarily solvent” for 75 years. and then they say, but this will require a “significant” further increase 75 years from now. That “significant” increase would be about 1% out of an income that will be much larger than today’s incomes.
That said, I am pretty sure that if the gradual increase of one tenth of one percent per year was enacted into law, or any other schedule of increase that covered the needed benefits was enacted into law, the following Trustees Report would honestly report that Social Security was not facing an actuarial deficit and was projected to be sovent for at least the next 75 years if not “over the infinite horizon.”
i think that if the one tenth of one percent increase was enacted only for the next year…or only one tenth of one percent for all following years, the Trustees Report would not show much of a reduction in the actuarial deficit. It has to be a fully enacted gradual increase, or a large enough increase all at once (up to that 3.5% “immediate and permanent”) to show enough of an effect that people would understand it. but polls have shown that a 1% immediate and permanent increase would be preferred by people even if they don’t fully understand it. but once they got the idea of small increases from time to time, they might come to understand how it works….if you can get the politicians to explain it to them. I have seen no evidence that politicians either understand it themseves or want the people to understand it.
Thank you for writing. You give me hope.
Halpin
Total payroll tax last year was about 1.2 Trillion dollars.
This was about 40 billion dollars short of needed income.
So it would take a tax increase of about 3.3% to pay for current benefits…othe things being equal, as they mostly are.
This answer slightly surprised me as it should not have.
But you asked a question I had not considered before…and am not really sure I understood.
The reason the answer should not have surprised me is that 3.3% is very close to the “immediate and permanent” increase the Trustees Report says would pay for the next 75 years with help from drawing down the Trust Fund.
So it’s not surprising that 3.5% extra would be needed this year and next and so on …this is not another 3.5% increase, but just keeping the tax 3.5% more than it is today. But note this also pays for every one of those 75 years.
on the other hand a two tenths of one percent increase (please don’t get annoyed with me changing from one tenth to two tenths. the worker would only see one tenth, but the 3.5% includes the empoyers share as well, and trying to compare apples to apples requires me to talk about two tenths here.)…two tenths of a percent INCREASE EACH YEAR up to 4% total increase would keep Social Security solvent forever without running down the Trust Fund.
I don’t know how you could say this in terms of “protecting SS another two years”. If I think about it some ore there may be an intermediate increase that would push the Trust Fund zero date out two years …maybe 4 tenth s of a percent?… but I don’t think that would stop the “we’re all going to die”…they have been saying that since the TF zero date was forty years in the future.
on the other hand, i think you could say one tenth of a percent per year will save SS forever and make the case. because it is true and it is fundamental.
back when i started all this I pointed out that the tenth of one percent increases would not be needed every year but only when the Trustees projected “Trust Fund less than 100% of one year’s benefits” which at time was projected to be about once every five years after about the first five years or so. But now we reached Trust Fund less than 100% in ten years about two years ago and we have Trust Fund zero “looming,” as they say, and will need that tenth percent every year between now and then. but not every year after that, because as the tax increases the “zero” date recedes into the future.
There is no reason we should ever have expected to never have to raise the tax rate, or even that we should always do better than our near ancestors did. wars and plagues and famine, not to mention inflation and recessions and interest rates and bad days on the stock market.
Pete Peterson liked to say “will America grow up before we grow old.” But his idea of growing up was cutting Social Security. my idea of growing up is understanding Social Security.
Halpin maybe best answer:
I just remembered that when “short term financial inadequacy” was getting close I calculated some ways to respond to fix it by increasing the tax rate a little faster than one tenth percent per year. Those ways would almost certainly work to “fix” “looming Trust Fund depletion” by a couple of years or more it that is what you think would work politically.
Almost certainly an increase of 1% (per worker) would push Trust Fund depletion back by much more than a couple of years, and a 1% increase is already poll tested and preferred by voters over any cut in benefits.
This would not be the forever solution, or even the 75 year solution, but it would “save” Social SEcurity for a long time, and even get us out of “short term financial inadequacy.”
There would be cries of “kicking the can down the road,” but I think these can be laughed out of court. I would need to calculate the exact amount and timing of the next needed tax increase…but I am sure it would not be so soon as to make people feel misled….especially if they were told the truth from the start, that it would most likely be that one tenth of one percent per year (but not every year) that was my plan before we ran out of time for it.
So give me some time to do the calculations…or find someone you can trust to do them. i bet Karen Glenn Deputy Chief Actuary. has already done them, or you can ask your U.S. Congressman or Senator to ask the Actuary for a formal evaluation.
Do you get notices from AB about followup comments here?
I don’t, but you can ask AB for my email and i’ll get back to you.
they call the formal evaluation “scoring”.
Thanks, yes I do get notified of replies, but was away for much of the day. I appreciate the response. Politically, if we have to raise taxes and fees, we prefer to do it once, even if that means including an automatic increase like an inflation adjustment or what’s included in the NW plan, rather than take repeated votes each year.
Mike Halpin @ May 12, 2024 at 8:46 am
re “not have to vote every year”
yes, of course. it’s hard enough to get a vote once every forty years.
the one tenth percent increase per year “as needed” would have to be enacted as a complete solution. that should not be a real problem: the 1983 solution included scheduled adjustments for future years. it was a good fix and originally included a tax increase about 30 years in the then future, but that was dropped from the bill and when 2013 cme around nobody remembered that a tax increase then was always understood to be needed.
but if we don’t start the one tenth percent increases by next year, it will be too late for one tenth percent increases per year to prevent a real shortfall where the TF falls to zero and the 2% increase is needed immediately to make the tax income high enough to prevent benefit cuts. But now that you remind me,” it should be possible to write a bill that includes enough of an “immediate” increase to prevent the “zero trust fund” and then follow that with the smaller yearly or “as needed” increases. “As needed” would mean “a projection by the actuaries in the yearly Trustees Report of “trust fund less than 100% of projected benefits less than ten years in the future.””
This is all a little vague without the actual numbers. I can try to calculate them in the next few days.
.Do you think there would be enough support for something like this among state level legislators to get a hearing from U.S.Congress?not necessarily full formal hearing but at least a listen by enough Members to get heard.
Halpin
possible answer
raise the payroll tax 1% for worker by 2026. polls say they prefer that to any cuts..
then in 2030 begin to raise the tax another one tenth of one per year. by 2040 the long range deficit will disappear. without ever approaching a TF zero situation,
you would need to present this package to people in a way they can understand it. from what i have seen, that will be hard.
we would still have the moving window problem,. while this proposal would make SS solvent for over 75 years, fairly soon 75 year projections would start to include years not yet paid for and the yelling about SS going broke would start again.
i think a slightly faster increase after 2030 that reaches a tax rate of 8.5 % might result in All future Trustees Reports projecting long term solvency….or it may turn out to be not a real issue. you would have to tell me. i can do the numbers. not so good at telling the people.
people may think the solution proposed here that avoids default for the present 75 year window will be good enough for now and not worry about future projections of long range deficits that can be avoided by really tiny future tax increases.
i’m going to look at other combinations that might find a balance that people would like better.
I think that the way you’ve described it in the past is fairly effective. You pay an extra $X per week now, so that you receive $10X (or whatever multiplier is correct) per week after your working life is over.
Even if the shortfall starts to creep into the 75-year window after a few years, and the “social security is doomed” crowd starts up again, having 50 years to deal with it would probably be “tolerable.” Realistically, we are now within ten years of the flip to not having sufficient pay-as-you-go contributions to pay 100% benefits, and there still doesn’t seem to be a sense of urgency among our DC officials.
Have there been any Reps or Senators that have previously introduced or signed onto what was then the NW plan? The Feds don’t always listen to state counterparts, but we often have closer relationships with them than the general public, so certainly worth pursuing the angle. I’m not sure how to contact AB for your email, but you can get through to mine at http://www.senatorhalpin.com/contact-us.
Mike
I can ask owner of Angry Bear how to contact him.
your comment here deserves longer reply than I can manage right now,
I couldn’t make the link work.
Maybe advocates of increasing the SS tax rate as the best fix should reconsider describing the program as enforced savings to fund future benefits. The pretty common response to hearing that is that it then shouldn’t matter how much tax workers pay in 2035 to pay the benefits arising for workers who paid their taxes from 1984 to 2025 as an example. But the forecasts are that unless these younger workers pay more, well the benefit for the older worker who paid the required amounts gets a 20%ish haircut. My point is that a really common manner of thinking leads millions to conclude that the basic argument is a lie, which does not help get the best consideration of their ideas, which could well be really good ones. “You have paid for your own pension….except if your kids and grandkids don’t start paying more, we will cut you back hard.” Wait, could you explain that first part again?
Eric
I do describe Social Security as a mandatory savings plan, because I want people to realize they will get their “payroll tax” back plus what amounts to an effective interest rate and an insurance policy that will keep them out of poverty even if their “savings” would otherwise not be enough.
People paying the payroll tax are paying in advance for their benefits, but that does not mean their money goes into a vault until they need it. Like ALL savings plans, the cash is used for other purposes including the cash that is paid in benefits to current retirees, It seems very hard for people to understand this, but it is the way ordinary finance works. When you take your savings out of the bank, the cash comes from someone else who put their own cash into the bank to pay for their own eventual withdrawal plus interest.
On the other hand if those other people “paying for” their own eventual benefits are not paying in enough in total for there to be money to pay the interest on the money the previous savers earned…the bank will default on what it owes those earlier savers. if the economy is growing, those newer savers in total will provide enough profit to the bank so the bank can pay interest to the older savers, but the newer savers will still be “paying for” the right to their own eventual interest.
If I understand what you are saying, the “common way” of describing this IS a lie…it is the way the enemies of Social Security take advantage of most people’s lack of understanding of basic finance in order to keep them mad at “taxes” and thinking SS is a Ponzi Scheme. And while I try to explain how it works, I am completely drowned out by the Big Money people and the careless reporters and commentators and the politicians who get their “ideas” from the people who donate to their campaigns.
Eric
by the way, thank you for your comments today. we can work with them and they help me understand what i need to say better.
try this for example:
back in the day ordinary workers tried to save enough for their old age by putting some of their income into an ordinary savings bank. 10% was the recommended amount. if they were lucky they earned interest and when they could no longer work they took out more money than they had paid in. so where did this extra money come from?
it came from other people, presumably younger, were putting into their own savings accounts the same day, or same month, or same year, as our older person was taking his savings out to pay for his expenses in retirement.
now if those younger people were paying in (saving) the same 10% of their income, where does the “extra” come from?
it comes from the fact that those younger workers are making more money…even if it is partly inflation…. so that if wages over forty years. say, doubled, then the ten percent the young worker paid in would be enough to pay “interest” on what the older worker paid in. but this does not mean, in any meaningful sense, that the young worker is paying for the old workers retirement. this is true even if part of that wage increase over time is “inflation”. the young worker is paying in inflated dollars, and the old worker is getting his “interest” in inflated dollars to pay for his groceries in inflated dollars. hopefully it is not ALL inflated dollars that the young worker is being paid for his work and the old worker is being paid in interest. But even if that were the case, the old worker needs to get the inflated dollars if he is going to be able to pay the inflated price of his groceries.
this is exactly what SS accomplishes with greater security than any other “investment.”
moreover it assures the eventual retiree “enough” while “taxing” the younger worker only a small part of his income…leaving him free to do whatever he wants with the greater part of it…even invest in stock market in search of higher gains.
these are plain facts of life. but people don’t understand them. they know almost nothing but live in a fantasy of a world with no taxes and everyone getting rich on the stock market. or in the case of liberals, the government fairy providing the money by taking it from “the rich” which the rich are powerless to prevent.
for the young worker to be “paying for” the old worker, he would have to be not expecting to collect any benefits himselv when he becomes old.
or he would have to be thinking that if he did not “have to pay the tax” he could get more interest from another investment. which is possible but not certain.
they are two different ways of thinking about the same thing. one is the exact reality of how SS…and America as a country…works. the other is a kind of insanity that believes in a fantasy “how it ought to be.”
when you are thinking about your next meal it is better to be certain than to take a chance on “more” versus “nothing.”
as it turns out about 50% of the poulation lose that bet after a lifetime. back in the old days people knew that. now in the new days people are taught to believe they can never lose that bet. funny thing is Social Security helps them believe that, because of Social Security they have never seen desperate poverty and can’t imagine how it could happen to them.
meanwhile your after tax income is far more than what people had in the days before taxes. surely with that you can make enough by investing without needing to cut your “just in case” lifeline. especially considering that you will get back what you paid for that lifeline even if you never need it. all you will lose is part of what you “might have made if only” and at this point in time “might have made” does not exist.
Is 2033 date to make a one-time “full” adjustment done with a Trust Fund balance of 0 or at the target of 100% annual benefits? Do we run entirely through the TF or run through what is considered excess to target?
Eric
2033 nis the date the Trust Fund will reach a balance of zero. If the current payroll tax is not increased by 2% by then, it will only be able to pay about 80 percent of promised benefits.
eric…
slight oversimplification in the above: the tax does not need to be increased by 2% by then. if it was increased by, say one percent before then, the full 2% increase needed to pay for future benefits would be pushed back …more than you might expect. but if NO increase is enacted by then, the Trust Fund would indeed have reached zero and the full 2%…or 4% combined would be needed to avoid an immediate 20% cut in benefits.
According to the report, the OASI trust fund drops below 100 percent (of one year’s retiree payouts) in 2028. It gets to zero in 2033.
There is nothing in the law to change payouts just because the “test of short-range financial adequacy” is failed. If SS has the asset, it can spend it.
Congress moved money from OASI to DI in the past, and they will be able to postpone action by a year or two by partially reversing that, so you can expect that to happen. For the combined trust funds, which is one of the ways it is reported, the depletion date has actually moved from 2034 to 2035.
Arne:
Something I did not know. Thanks for the input.
Arne
thanks. i believe i may have mentioned that being in “short term financial inadequacy did not require SS to act, but to inform congress of a need to act soon.
the moving money around would likely happen if the R’s haven’t come up with another plan, but it wouldn’t do much for the long term stability of SS. Still, worth calculating the effect if you’ve got the time. DI looks to be in good shape for a long time but it’s a much smaller program than OASI, and more volatile. If you were able to borrow all of DI funds it would not cover the projected 2033 shortall in OASI.
if TF drops below 100% in 2028, we have already entered “short range financial inadequacy” …about two years ago I think.
I think millions have a hard time thinking that there will be broad sustained income growth beyond cost of living increases in the future. They may well be wrong, but thinking that people will hardly notice 3% or so because they make 40% more could be wrong if they feel their costs went up 50%. Consider the implications in the notion that current cap formulas capture less of wage/salary income than expected a couple decades ago. Some view it as an indication that some top slice of the SS-taxable income spectrum really rocketed up, but I’m thinking more likely 10s of millions of people are making $10k, $20k less than experts thought they would back in the day. The complaint is workers do not get their increases in productivity converted to compensation. If that is a true trend, how is that going to play out in coming decades, when the increased tax rate is supposed to be a minor thing if the reality is that a lot of wage growth just does not materialize for millions? This does not even include the risks that “decarbonizing” may have. In sites this blog links to it is exceptionally common to find quite thoughtful pieces that only “radical conservation” very specifically intended to shrink economic activity severely has a chance of controlling climate change in the next 25 years. Degrowth and depopulation.
Eric
it is hard enough for me to deal with the official projections done by competent actuaries, and the bizarre misunderstandings of people who are completely ignorant about how SS works but “just know” what is wrong with it…
without have to answer every potential “problem” someone can dream up out of their own nightmares…
but the fact is that the way Social Security is designed, and my way of making is solvent forever are based on strictly mathematical principles that will not change.
of course the economy can become better or worse, but as long as SS relies on “taxing” part of the actual income of actual workers at the lowest level necessary to provide enough income to cover current benefits at the lowest level necessary for a reasonable income in retirement, the details won’t matter. it might become necessary for mother government to explain what is happening, honestly, so people can take the ups and downs with a level of sanity…the same way people have had to take the ups and downs for the last two thousand or more years.
please note the downs may include climate change, wars, and misgovernment.
unfortunately if misgovernment includes lying to the people about Social Security, I can’t predict how they will react. it won’t be the first time that civilizations destroyed themselves by human stupidity and greed.
but otherwise the worse things become the more you are going to need Social Security
please note my original design for “fixing” SS, not discussed today, included a provision for adjusting the payroll tax, up or down, as needed according to a competent prediction of fiscal reality ten years in advance.
this is comparable to driving a car down the road and making very slight steering and speed changes as the road requires. the current way of guiding SS is more like putting a blindfold on and steering and adjusting speed according to instructions from a pathological liar…or over the phone from someone who isn’t even in the car but is at a party in D.C.
More of a technical question here. It seems to me that “losing” a higher percentage of aggregate potential taxable wages and salaries than expected above the cap doesn’t hurt the system at all. That last dollar under the cap generates the lowest incremental future benefit if I understand how this works. Going over the cap untaxed shouldn’t harm the system at all. If everyone went over the cap all the time, the system should be sounder. So I guess maybe a couple of issues sort of related. First, is the distribution of “under cap” contributions depressed because income distribution below that cap is skewing away from higher incomes? Less revenue? Are people whose careers hit cap for a long time living longer than those who stayed under cap? Higher cost? If the average beneficiary collects for 13 years, but those at +6 years are mostly >$3200/month and those at -6 years are more like $2100, I can imagine it could lead to pressures.
Eric
I honestly can;t follow all this. I may be able to give you sort of an answer after i have let it settle for a while. But mostly I don’t like to spend my time answering questions that are too far away from reality as i know it to have a chance of meaning anything to anyone even the person who asks them.
Eric
I still can’t follow this, but as a shot in the dark: I don’t think the income lost to SS by a having a higher percent of total national income over the cap is a real problem. The people paying the tax are paying enough to pay for what they will get from Social Security. raising the cap would mean they were paying more than what they get. That would annoy them enough that people previously not fanatic about cutting Social Security would drift into the camp of those that are. And in my opinion such an increase in the cap would be unfair. “fair” is paying for what you get, not “paying more for what you get because you have more money.” as far as i am concerned those who demand the rich pay a higher percent of their earnings for SS “because they have more money” are endangering their souls. Note I do not mean “souls” in any religious connotation. It’s just that you can’t live in envy of those who have more, and spend your life-s energy trying to take it away from them without losing your own chances of happiness.
I would like it if ‘the poor’ got a larger share of national income, but Social Security is not the place to make that happen. workers need to orgainz both unions and politcally to gain wage bargaining leverage, a higher minimm wage, and better protection from wage gougind and predatory business practices. but don’t make the fight about SS. SS is worker funded and therefore worker owned if the workers can remember that and keep Congress from changing into either welfare or a private investment plan.
you ask, ” First, is the distribution of “under cap” contributions depressed because income distribution below that cap is skewing away from higher incomes? ” the answer is “no.” the key word is “because.” the two are related, but income distribution under the cap is not “caused” by anything SS does or should do. more money would be available to SS if the cap were raised, bu tnot enough to solve the “solvency problem” and not without turning SS into welfare which would kill it as meaningful insurance for workers against serious poverty.
Rich people do live longer. whther because they are rich and enjoy better living conditions, or because the rich are rich because they are healthier than the poor. in either case we should…for the benfit of the country if not just out of humanitarian concern work to increase life expectancy for the poor, and do reduce poverty. But i don’t think we wan to create a population of people who depend on the government to make the rich pay for their (the not rich) ordinary needs. The R’s claim that this is the “socialism” the D’s demand. I don’t think it is, but sometimes the Left sounds like that is exactly what they want.
Yes, some people make a lot of money by cheating the poor, but the answer is to stop the cheating, not just taking money away from everyone just because they have more. but, again, that does not mean that the government should never tax the rich to help the poor. sometimes it is necessary and actually helps the rich as well as the poor, i think its mostly a difference in attitude.