Fixing Social Security
If nothing is done, the Social Security Trust Fund is currently projected to run out in about 2033. At that point, projected benefits will fall by about 20%.
The Boston Globe has an opinion piece about the coming Social Security crisis/crunch. It talks about how Canada deals with the problem. I have a subscription and so don’t know if the link below is paywalled, but here are the nut grafs:
“Mechanically it works as follows. Every three years, Canada’s Chief Actuary estimates the minimum contribution rate required to finance benefits over 75 years. If this required rate exceeds the current rate — and if policy makers cannot agree on a fix — the backstop kicks in. Contribution rates are then automatically increased by 50 percent of the difference between the legislated and the required rate; and current benefit payouts are frozen until the next actuarial report. This automatic approach works because it gives lawmakers a chance to act to improve the long-term sustainability of the system but provides a fallback mechanism if they do not do so on a timely basis.
“The United States doesn’t have to adopt the specifics of the Canadian backstop mechanism, but including some automatic adjustment in the face of inaction would improve confidence in the long-term stability of our Social Security program.”
Is this ideal? No, of course not. It’s just better than “nothing.” And “nothing” is currently what we’re on course for here.
Fixing Social Security
The Boston Globe has an opinion piece about the coming Social Security crisis/crunch. It talks about how Canada deals with the problem. I have a subscription and so don’t know if the link below is paywalled, but here are the nut grafs:
“Mechanically it works as follows. Every three years, Canada’s Chief Actuary estimates the minimum contribution rate required to finance benefits over 75 years. If this required rate exceeds the current rate — and if policy makers cannot agree on a fix — the backstop kicks in. Contribution rates are then automatically increased by 50 percent of the difference between the legislated and the required rate; and current benefit payouts are frozen until the next actuarial report. This automatic approach works because it gives lawmakers a chance to act to improve the long-term sustainability of the system but provides a fallback mechanism if they do not do so on a timely basis.
“The United States doesn’t have to adopt the specifics of the Canadian backstop mechanism, but including some automatic adjustment in the face of inaction would improve confidence in the long-term stability of our Social Security program.”
Is this ideal? No, of course not. It’s just better than “nothing.” And “nothing” is currently what we’re on course for here.
Fixing Social Security
Here’s the easiest solution: lift the cap. It’s way past due that the wealthy pay their share.
There are evil forces afoot that would love to see SS and Medicare crumble to pieces so all of that money can go to the market or private insurance. You will always hear that SS is “insolvent.” That’s so when they come up with a plan to chip away at it, it sounds reasonable. Don’t fall for it. SS was set up to handle fluctuating workers vs retirees ratios.
SS was “not to be touched.” Almost every president since Reagan chipped away at SS benefits. Reagan raised the retirement age from 65 to 67, and allowed taxation of SS benefits. Clinton increased the amount that could be taxed. Barry reduced SS drug benefits for the middle class to help fund Obamacare. If anything both SS and Medicare should be expanded, and they can easily with the right willpower in congress, but we’ll likely never see that.
Apparently giving billions of dollars on pointless wars is the right thing to do, got it. We can’t take care of grandpa and grandma now can we?
Since the Wealthiest have mostly untaxed ‘income’, or funds available to them far in excess of their reported taxable income, they really could afford higher FICA payments.
When they eventually begin to receive benefits, such benefits will definitely be taxed as income anyway.
So what if they’re already paying 40% of US tax revenue? They can afford much more.
Dobbs
sure they can, but they won’t. if you want to tax them more, use the income tax. taxing them to pay for your groceries is neither fair nor smart.
Those paying 40% of the taxes have 40% of the income. there is no way in hell (literally) they could pay for their per-capita “share” at the same rate as the lower half of the population and the country have enough to pay for its basic needs…the needs even the rich depend on.
btw..i lose track: are they paying 40% of the tax or are they just bitching that 40% of the people pay no tax?
Is forty percent their ‘share’? Why isn’t it 50% or 60%?
It is said that the reason for insisting that the 40% they do pay is too much is that it deprives ‘less-well compensated folks’ from the privilege of ‘paying for civilization’. Thus, it is bad for Democracy for the rich to pay more.
by per capita share
i meant ten billionaires would pay the same tax (not “percent”) as ten minimum wage workers. that’s why we can’t have a per capita tax which would be “fair” according to one idea of fair.
but it turns out that even a “flat” tax … each dollar of income pays the same tax, or each tax payer pays the same percent of his income… though that would be fair according to another idea of fair.
so we have a “progressive” tax, which is actually intended to be fair to the rich as well as the poor, otherwise we could just tax the rich and no one else…which would be fair according to another idea of fair.
so we have a progressive income tax, which is fair according to my idea…or would be if the rich didn’t avoid paying it and lie about the deficit being caused by social security. it is not. it is caused by Republicans who buy things and then don’t pay for them…because “the deficit”, you know.
Please note that the rich do not pay 40% of their income. they pay (maybe) 40% of the taxes paid by everyone (the total of all taxes paid). their effective income tax rate is 17% of their income, not counting unrealized asset appreciation. or 8%, counting asset appreciation.
it’s enough to make you dizzy. but that’s the point.
Here, https://www.ssa.gov/history/thismonth8.html, is a list of changes to SS since its inception. I see the 1981 changes during Reagan. Not the others you mention.
I think raising the cap is a bad idea. I know it is not enough to cover the shortfall.
Having the people (as cohorts) pay for the increases caused by the fact that they are living longer is the easiest solution.
I found this on a different page:
arne
worth noting that retirement income is taxed for plans not SS. the “excess income” tax on SS actually just eliminate the tax break on SS income generally for those who can afford it. that’s part of what makes SS insurance. the idea is to keep the payroll tax as low as possible and still privide meaningful insurance for those who are going to need it. the problem is that Americans see any tax as “theft” even if they directly get huge benefits from it.
and they are not very smart. they read that tax on 85% of their income as a tax OF 85% on their income. even when they know it’s not, that’s the way they feel about it. the tax ON 85% of their income is taxed at the same rate as their non-SS income. that turns out to be not much to pay for a country without old people starving in the streets…which would not be good for business.
jt
lifting the ap will destroy ss as “worker paid insurance and turn it into welfare as we knew it. this is exactly why Roosevelt made it worker paid–“so no damn politician can take it away from them.” but even tht only works if the workers understand it. which 80 years of lies have made it difficult for them to do. please, the obvious choice is not always the best choice, or even a good choice. in this case it’s a suicide choice.
the workers can continue to pay for SS themselves. all they have to do is raise their payroll savings rate (journalists call it the payroll tax) about 2% gradually over about tw3nty years. that’s about a dollar a week per year while incomes will go up about ten dollars per week per year.
jt
it is important to understand that the wealthy DO pay “their fair share.” they pay for what they get…a return of about 2% real, plus the insurance value, of what they contribute. they pay more than you do in absolute dollars, and while they get back more than you do in benefits (they paid for them), they get back LESS as a percent of what they paid in. Their contribution is what pays for the insurance boost that very poor after a lifetime of work people get on their benefits.
making a man who has a million dollars 20 dollars for a loaf of bread that the ordinary worker pays a dollar for is not “fair” by any standard anyone believes in except liberal college professors whose brains have been addled by the need for “progressive taxation”..which only makes sense in the context of income taxes to pay for general government expenses. and no sense at all when talking about paying for your own future groceries, or a carton of cigaretts.
That’s only true if he never makes a profit employing a worker who might retire and need Social Security. It’s like having to pay for education. You may already know your reading, ‘riting and ‘rithmetic, but you have to pay so that your plumber or store clerk or doctor also knows them.
Kaleberg
i have no idea what you are talking about.
Kaleberg
I am guessing you are justifying making the rich pay for SS on the grounds that it is just another tax we pay for the general welfare.
But it is not. It is a way for ordinary workers to save a part of their own wages safe from inflation or bad days on the market or bad years of wages too low to save enough for a basic retirement. your “tax” comes back to you, with your name on it. FDR thought this was important, and he was smarter than both of us.
I have tried to explain this in more detail many times. Not very many people seem to understand it.
The Boston Globe also ran a piece 12 years ago on how to fix S/S, by James Roosevelt III.
Nothing came of that, but it also mentioned the Trust Fund running out in 2033.
Our huge neighbor to the north has a poulation somewhat less than 10% or ours and less than 10% of our GDP, but we could probably learn from them.
The Northwest Plan for Social Security, which increases payroll taxes so that the people who are living longer will continue to pay enough to pay for their own benefits even as they live longer, also includes an automatic mechanism to make the required increases. Using the annual reports as a guide, it is clear that a 0.1 percent increase (for both employee and employer) whenever the 10 year forecast is “insufficient”, will put the program into balance.
@Arne,
The challenge for social security isn’t longevity, it’s the ratio of workers paying into the system to retirees. The average life expectancy *at age 65* has only increased five years since 1940. Most of the gains in life expectancy since SS began has been in the first five years of life, owing to better sanitation, antibiotics and vaccination. The boomer generation is at peak retirement, and there aren’t the same number of workers replacing them.
I do agree that the best way to handle the shortfall is to modestly increase SS taxes. That’s what the Northwest plan does. That’s what the Canadian plan does. I don’t believe that Congress will do anything about this, though, until the last minute.
@Joel,
The number of retirees is in the denominator. If people live longer, there are more beneficiaries in that ratio.
You are correct that fertility is important, but mortality is a bigger factor. Increasing productivity improves SS. Increasing inequality, shifting income out of taxable payroll is another notable factor. But if people were not living longer, SS would be very close to balanced.
@Arne,
I think we agree on how arithmetic works. And if people live longer, there are more beneficiaries, no question. My point is that the people who matter in that ratio *aren’t* living much longer than they did in 1940.
I never said fertility is important. My point was that for SS calculations lifespan from birth isn’t what’s important, it’s the increase in lifespan *after 65,* which hasn’t changed very much. The SS demographic problem is that the number of workers hasn’t replaced the baby boom bolus of retirees. Once we all die off, SS will be very close to balanced. Or, we can allow more legal immigration.
Of course, undocumented immigration has been subsidizing SS, since employers are paying SS taxes to the fake SS accounts provided by the undocumented, who will never make claims on the system.
The short term answer is something like the Northwest plan, which can work in theory but hasn’t been tried, or the Canadian system, which is already working in the real world. Both plans involve tax increases, which are anathema to most American politicians, no matter how logical and reasonable both plans are. That’s why neither will be implemented before 2033.
Cohort life expectancy for men at age 65
1940 14.7
1960 17.4
1980 18.8
2000 20.1
@Arne,
So ca. 5 years for men. What about women?
Period life expectancy for men at age 65 (historical data)
1940 11.9 years
1960 12.9
1980 14.0
2000 15.9
Cohort life expectancy for women at age 65
1940 13.4
1960 15.9
1980 18.4
2000 19.0
cohort life expectancy being predicted for those born in that year
@Arne,
So an increase of 4 years from 1940-2000. I expect it went up some more from 2000-2019, then dropped with COVID.
Period life expectancy for men at age 65 (historical data)
1940 11.9 years
1960 12.9
1980 14.0
2000 15.9
Joel
on how arithmetic works
in arithmetic it is important to get the arithmetic right.
in math it is important to get the right arithmetic.
Joel
as Arne points out you already have a plan in front of you that raises the tax gradually when needed, actually that one tenh of one percent closes the “present” gap instantly.
the gradual increase… one tenth of a percent at a time to about 2% is “only ” a projection of future needs. after it reaches 2% the projection is that no further increases will be necessary.
as for the difference between “living longer” and “having fewer workers to support more retirees”… they are the same thing. there are more retirees at any one time because people are living longer.
there are other factors “causing” the shortfall, but from the point of view of the worker the one that matters is “living longer.”
we need to be willing to pay what it costs for our own retirement and not expect “the young” or “the rich” or “the government” or even “the economy” to pay for what we need.
back in the day, people saved for their own retirement, and sometimes faces depressions, or the draft or…back in the really old days..famine and war, inflation and plague. not every genration gets the same “deal”, but SS is the best deal anyone has come up with so far. maybe aliens will drop food packages from their flying saucers to feed us in our old age.
incidentally, to the extent their are “really” fewer workers and just “fewer workers per retiree” is because people are having fewer children. this should mean they can afford to set aside more money (2%) for their retirement becuse they don’t have to feed and educate so many children….i was going to say “ungrateful bast..ds” but tht would make people hate me, the fact is that those children have been taught that their “greedy parents” are stealing their future. they…students in high end colleges.. have been taught that they owe their parents and grandpaents nothing for the food, housing, education, and infratructure that that the greedy geezers provided them.
to the extend that the shortfall is “because” wages are not keeping up…i would expect a shortage of workers would lead to higher wages (Econ 101 and all that jazz). and that there won’t be enough workers to “support” all those retirees is simply a stupid lie. those few, those brave, those poor workers will only need to pay an extra 2% of their wages…. which they will get back three-fold when they retire themselvs and collect the benefits they will need over their longer life expectance…if, of course, they ever get old. Which they do not think can ever happen to them. Or they will be rich by then. Or at least have a job that they love so much they won’t want to retire. Or will be so healthy they won’t need to retire. Or they will have bosses who will not lay them off in ordr to hire someone younger, more productive, and lower paid.
Lot to think about there. Try it. [this last not directed at Joel but at all those people who think one thought is enough for a lifetime.]
An alternative is to raise the age-of-eligibility for Soc Sec benefits. This gets suggested pretty often. After all, people do work past the current nominal age because they have insufficient funds to live on otherwise.
Or just because they like to work, and contribute to the general well-being.
Young people just entering the work force do not generally approve of this. Who can blame them?
@Fred,
How is raising the age-of-eligibility different from reducing benefits?
Exactly…the current system already provides changes in benefits around 6-8% per year based on when one starts. Presumably the proposal is to change FRA from 67 to 68. If so, and if they leave in place the option to start benefits from 62 to 70, then the effect would just be a permanent reduction in benefits of 6-8%.
Joel
raising the retirement age is different from cutting benefits in that
cutting benefits makes everyone a little poorer.
raising the retirement age means some people die in harness: no retirement for you…just the knackers.
Cervantes et al
you people have got to learn that money is not life.
when you come to die it won’t matter how much money you got out of the system. but how much life you lived.
dobbs
raising the minimum age to retire is a death sentence for about half the people affected. the “average” life expectancy has nothing to do with what happens to people “not average,” living longer does not mean you can work longer, and if you pay for your retirement yourself there is no reason why you should have to.
dobbs
who can blame them for what? for not wanting to pay for someone else to live longer?
i can, they are too dumb that realize that is them who is going to be living longer.
I need to thank Joel for bringing this to our attention.
And to thank Arne for undertanding SS way better than almost everyone.
And to apologize for my typos, which I would fix if AB allowed me to. I hope you can tell what I meant even if I couldn’t spell it right..
I think they should raise the cap to the 90% of income covered range, and include all the forms of compensation paid, with a current value for deferred compensation. You will still miss cap gains, which is where the very wealthy get a lot of income.
By deferred compensation, you mean 401k/IRA assets, right?
Perhaps the main disadvantage, or penalty paid with them, is that although such funds are investments, they do not offer the tax breaks that ‘capital gains’ taxation offers.
Instead, it’s taxed as ordinary income when you take distributions.
Jane
did you read any of the discussions here and on other AB posts? I have talked about why taxing the rich to pay for your groceries is neither fair nor wise…if the rich have to pay for your social security they will kill the program entirely, they know how to kill welfare.
Bring in more young immigrants.
Barnes
yep, another person who wants someone else to pay for his groceries. good to know that instead of wanting to tax the rich he wants to tax the poorest workers.
in fact those immigrants will retire some day, then who will pay for that?
Did you read any of what we have said here or do you just like the top of your head so much better than what the people say who have actually “done the math”?
I don’t see where you’re offering a better solution
If fact it is generally agreed we need more young immigrants
I paid for my grandparents’ groceries, and my mother …
@Ten,
Indeed. And those immigrants will pay for the retiring immigrants. And so on.
Thus has it ever been. America was built with immigrant labor, some voluntary, some not. Also too, the original residents were mostly slaughtered by immigrants, so there is that.
Joel
I am not sure the math works out the way you describe it. Ten Bears wants to increase immigration so the immigrants can pay the extra payroll tax that he would otherwise need to pay for his longer life in retirement. unless the “excess” immigation continues forever the payroll tax would still need to be raised to pay for the longer life expectancy of that first wave of immigrants.
I do not believe we can have an ever-growing population, or an ever growing economy. The earth is not infinite.
Ten Bears
sorry that you don’t see. did you read what i said, or is there another problem.
the young always “pay for” the too old to work. they produce the product consumed by the elderly. but since the invention of money and finance, the young can (and with SS do) pay for their own retirement. think about how saving your money in a bank works. SS works the same way. When you withdraw your savings, the actual cash came into the bank the same day because someone else started or added to his savings account, We don’t say that someone else paid for your withdrawal.
And it is NOT generally agreed we need more immigrants. Don’t you read the newspapers either? or watch the news on TV or the internet? is it possible you only read the people who “generally” agree with you. Or just want someone else to pay for their groceries.
btw this does not mean i am one of those who want to shoot immigrants if they cross the border without a note from the teacher.
I’m sorry, I am indeed blind in one eye but what I see is you’ve decided you’re right and everyone else is wrong and that’s just … wrong. I’m only willing to give you the benefit of the doubt because the point you so labor is a reichwing meme that pretty much dates to inception. You’re repeating what has been said thousands if not millions of times and it doesn’t change anything: the young contribute to their parents and grandparents care and it works just fine until some smartass decides they’re not gonna’ pay their fair share, they’re not gonna’ contribute to their parents care …
Ten Beaars
I think you need your glasses fixed. As far as I know I started my interst in SS when I heard some “serious person” tell Public Radio that SS was going to bnkrupt the country and be a crshing burden on the young. That sounded improbable to me so i did some calculations based on realixtic assumptions about the cost of retirement and foound it to be quite affordable. The one tenth percent solution appeared on my computer while i was playing with numbers…after recreating (as a check) the Trustees Report’s own calculations.
My only exposure to the “reich wing” has been listening to their lies and refuting them based on what I learned from my own study of the basic document: the Trustees Report itself. If I sound like them to you, it is because I begin with their very clever lies and try to explain what’s wrong with them.
Bruce Webb introduced me to the Social Security “defenders” … they welcomed me until they found out I was serious about raising the payroll tax, and told them their plan, which amounted to “social security is not broken, it works because it is worker paid, we can fix it by taxing the rich” was illogical (i used the word stupid, then they called me an asshole and banned me from their society.
so I guess if I sound like a right winger repeating their lies to you, it’s because you don’t understand a damn thing of what i have been saying. but do not despair, you are not alone.
btw
I am not the only one who is right. the American Academy of Actuaries agrees with me. So does the Deputy Chief Actuary at SSA, and I ran into a guy on the you tube who also has it right.
But I wonder, if you think I am wrong, does that mean you think you are right?
How c\can you do that when you apparently believe anyone who thinks they are right is wrong?
Here is a hint for you: sometimes the guy who thinks he is right is right.
Ten Bears
on further thought
I realize that sometimes i do seem to agree with the Right. Because sometimes they are right. Truly right. Even when they are lying they almost always begin with something that is true…something their target already believes….and distot that into the lies that will cause harm.
and the reason the target already believes what the liars start with is…just to make this short…is true. The Left is quite capable of sayig things that are stupid or even dishonest, because as thinkers they are no better than the Right.
The difference is that in general the Right is lying in order to put something over on you to their advantage and your disadvantage. The Left is at least saying that they want to help the poor, the victims of the Right’s lies and power. To this extend I am very much on the side of the Left. So much so that I try to tell them when they are wrong, or shooting themselves in the foot.
This is pretty easy to tell when the Right argues that we need to use violence to force people to “behave” (do what we want), while the Left argues that we need to use kindness to persuade and reduce violence and injustice. Even if Left politicians are lying about what they actually do, they are at least encouraging people to do the right thing. The Right may even be telling the truth about what they are doing, but they are urging their followers to do the wrong thing….which is lying about Truth.
If you can’t tell the difference you are part of the problem.
Unfortunately, I goofed. These numbers are from the cohort life expectancy table.
Aargh, from the period life expectancy table
Arne
don’t worry about it. no one here knows the difference.
It’s funny how people will turn their brains inside out to avoid paying for their own groceries. IS ONE DOOLLAR PER WEEK TOO MUCH TO AFFORD EVERY YEAR YOUR INCOME GOES UP TEN DOLLARS PER WEEK?
Is it too much even if your income does not go up? Your parents and grandparents lived on a lot less than you have.
Is it too much to make sure you have a place to live and enough to eat when you can no longer work?
Even if the rich don’t pay.? Even if the immigrants don’t come? Even if “the government” doesn’t pay?
Or do you think you will love to keep working…or looking for a job…when you are old, no one will hire you, your knees hurt, and your brain isn’t what it was, or maybe you want to do something with the rest of your life better than making money for the boss?
regarding
The commenter seems to think that the quote means SS is intended to run without intervention. Not so. The quote is part of the “third rail” quote, indicating that politicians were unwilling to continue making the changes needed to keep SS in balance. They were okay with it into the 70s, but the mess created by stagflation did not leave easy solutions.
Congress could and should have done something over a decade ago. Being an aware voter now means knowing that we need Congress to touch it. Sadly, that means we will get a compromise even if the best solution is clear.
With the benefit schedule, FICA rate, and the current distribution of covered wages, it takes a worker to beneficiary ratio of about 2.8 to fund SS. You can compare that to the rapid change in demographics and get tangled up trying to figure it out. You can also look at it over a workers lifetime and get an approximation that 40 years of benefits pays for 14.3 years of retirement.
It is not a coincidence that since the last time changes were made to SS, life expectancy at age 65 has gone from below 14.3 years to above. (The annual reports provide data that allow a good estimate using real distributions instead of averages.)
‘Making the rich pay’ feels strange if Social Security is some kind of insurance. Does raising the cap even work if you also restructure the benefits to reflect a new cap? What I mean is do you stretch the marginal benefit formula to fit the new cap? Does the worker who just hit the cap for years now eventually get a 13% benefit increase as their earnings profile is now only 50% of the new cap? What’s the answer to the worker who says ‘if my $170K/year isn’t anywhere near the cap, why is my benefit being stepped on so hard?’ Anyway, my main beef is simply the Trust Fund should get run down to a much lower level than the absurd 100% annual benefit as part of the next reform. Canada sets a 3 year window and ‘cures’ half the problem automatically if action does not happen. The 100% Trust Fund is only notionally useable in a reasonable time-frame under circumstances so horrendous that the more probable solution is hundreds of thousands of seniors who invest in ‘physical precious metals’ learn the very, very hard way just what that really means when there are widespread anarchic conditions.
Social Security is just one element of a huge set of changes yet to come if the globe truly intends to de-carbonize it’s energy supplies. I sense that much of what friend Coberly presumes about the future of wages is going to prove dead wrong. Yes, there are decades of data that strongly suggest the future will be more prosperous, but that data also was generated at the same time CO2 levels ramped up and human population moved sharply higher. What will be the wages of, say, marina services employees 15 years from now? The profits of landscapers when 70% of golf courses close? What about banks holding debt on KwikTrip, CircleK operations that no longer have gas sales to pull customers in for high margin beverages and candy? Autism centers that gradually are too far from 50% of their clients to keep staff (we are 17 miles one-way from our son’s and that seems the median, with at least one 42 miles)? What happens to the clients is also a concern. Someone tell me that we won’t sacrifice material well-being as we have traditionally considered it to get to carbon-neutral and I’ll feel comfortable that incomes are going expand as Coberly expects. Anything that works really, doesn’t need to be carbon….space parasols at Lagrange point, whatever. Call me whatever you wish, but over the past 4 years I’ve witnessed Food prices that simply mock the idea that wages are moving consistently higher in a manner that expands material well-being generally; credit card and other debt expansions that suggest people are having trouble dealing with that reality; a virus that is monstrously suspicious as to origins contributing to a drop in life expectancy. And for those objection to my suspicions about the virus, explain why Fauci and Collins – who faced enormous amounts of work in their actual jobs – dedicated some very intense activity in the early weeks to getting an origin hypothesis out in public when it never their job to do so. My 6 year-olds ‘wasn’t me, dad’ are more compelling.
@Eric,
“explain why Fauci and Collins – who faced enormous amounts of work in their actual jobs – dedicated some very intense activity in the early weeks to getting an origin hypothesis out in public when it never their job to do so.”
LOL! They were hardly the only ones. And I don’t know their personal motivation any more than you do. But my guess it that they felt compelled to treat all the wackjob engineered virus theories seriously, because simply rejecting them for lack of evidence is only validating for the conspiracy.
As for the rest of your comment, I think (if I understand you) that we basically agree. All the evidence I see points to the conclusion that human civilization will be consumed with fighting global resource wars by 2050. I’ll be dead by then, but I tremble for our children and grandchildren. Unless there is a massive investment in carbon capture/geoengineering to reverse the current levels of greenhouse gases, discussions of the future of SS and the stock market are academic.
Eric
I only work with the projections of the Actuaries. You might be right about the end of the world as we know it. But then, you don’t know it.
My assumptions about the growth of wages are those of the actuaries…and those are considered rather pessimistic by historical standards. But, as you point out, we are no longer living in historical times.
I get very frustrated when someone produces a fantasy out of his own head and then free associates from there and imagines he has refuted the actuaries and the people who actually do the math to show the implications of the actuaries projections.
It is not only me who “claims” SS can be fixed by raising the tax one tenth of a percent at a time: it’s right there in the Trustees Report if you actually read it and do some simple math. That Trustees Report is what the “serious people” misrepresent to come up with their “Social Security is doomed, we have to kill it or we’er all going to die!” lies that you hear and apparently believe or substitute your own unanchored fantasies for.
I do not challenge that the actuaries have done their job per current standards or that you then make sensible suggestions on that basis. But in circumstances where the current administration says thinks like (paraphrasing); ‘dealing with climate change is in everything we do’ I think that either the stated goals and timelines are just nonsense, or material living standards will be headed down. Just a hunch, but we have witnessed decades of minimally effective policy maybe precisely as nobody knows how to hit the goals in the timeframes considered without serious economic contraction. I have said here more than once that timelines for these initiatives probably should be 40 years longer and let social changes (housing patterns as an example) organically come about over an even longer timeframe. But okay, if you want to address the 2034 problem with an action in 2024 we should rely on the actuaries. But let’s get honest if in 2029 the reality is taking serious steps for the climate means real sacrifice for beneficiaries anyway. Just do see if material prosperity is reduced to fight climate change that seniors will get a ‘carve-out’.
Eric:
The solution as proposed by Coberly and supported by Bruce Webb was well thoughtout and agreed upon as workable by the Social Security Administration. Ten years later from that decision by them, it is still viable. Even five years from now and if nothing changed, it would still work. There are 44 pages of SS history on Angry Bear. every issue in the book has been covered.
I am going to repost one old post that will bring more things to light.
Eric377
i worry about climate change too, But sufficient unto the day is the evil thereof. I can’t do much about climate change [except live a little more modestly]. But I can do much about Social Security “crisis” by calling the lie and presenting the facts…if i could get anyone to actually think about them.
The one tenth percent at need that I insist on can be easily adapted to emerging events, even climate change…until, of course, we run out of air or the sun explodes.
Joel
yes they are academic. They are based on reason and acturial science and actual math. Your end of the world scenario could well turn out to be true, but it is not a good guide to what we should do now about Social Security.
So lets stop worrying about Social Security and just let the liars and Congress destroy it…it’s only “academic”…and sit in our lawn chairs starving in our old age watching for the sun to explode.
Bill, no more layers of replies available but, yes plans worked 10 years ago and continue to work now, but that was at a point in time with high carbon usage and 10 years later there is even more being burned. Will the plans work if energy inputs drop significantly? Right now we have goals for 2030, 2035, 2050, etc. and we will miss all of those by a lot. Decades. Unless the world sheds lots of energy demand rapidly, that is. So how do we generate “excess prosperity” to share with retirees running our economies with a significant drop in energy inputs? Answer is most likely we do not run the economies with lower energy! It’ll get hot. And with hard work and global cooperation the second half of the century will see improvements, even if reversing the effects lags a century after that.
Eric377
The northwest plan will work with whatever money we have and whatever that money will buy. You could easily get a world in which “the young would no longer pay for the old.” even though the old already paid for their needs in advance. But that world would not last long when “the young” became “the old” and looked around for someone to pay for their food, and the “new young” said, “what’s that to me, grandpa?”
Given that civilization will want to survive, lots of people will be employed in trying to make it do so. There will still be an economy.
Could be society will need more blacksmiths, before ya know it.
Dobbs
there are people who like to point out that the world was warmer 60 million years ago, so what’s the big deal about a little gaming.
I like to point out that 60 million years ago there were no people, no horses, and no grass.
The Bible (you know, that book of lies) says “Honor your father and your mother, so you will live long in the land.” Most people forget that “live long in the land” bit. Funny those old liars figured that out and today’s very serious people can’t even figure out what “Honor your father and your mother” has to do with Social Security. {John Kerry said something about that in a debate, and the gathered high-end news presenters had no idea what he was talking about.?
I guess you can’t really lie if you don’t know what you are talking about.