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Mon Nov 12, 2012, 08:20 PM

Social Security adds to the debt...

this is what I'm hearing from the right. When asked how I get answers like this,

Payouts are exceeding incomes. Ergo, it costs more than it pays and is part of the deficit.



How so? The trust fund reserves will last another 20 years.

The trust fund reserve is basically a legal fiction. Surpluses are paid into a "trust fund", sure, but congress can take those surpluses and spend them with the promise to pay them back. The trust fund does mean that, starting from the time when the surpluses end (expected to be 2021), to the time when the fund is exhausted (expected to be 2033), congress is going to have to keep SS payments at their current CPI adjusted levels using some source of funds (likely debt). After 2033, it is entitled to lower SS payouts to whatever can be provided given merely the current revenue from the SS tax.

Basically, there is no trust fund reserve. When congress takes from the trust fund, it is essentially incurring debt (unless it plans to raise new taxes to make up the expected shortfall, which is unlikely). And, I suppose, it could always just renig on the trust fund.


When FDR created SS, the life expectancy was only 60. Hardly anyone was supposed to collect social security, which would presumably leave a large surplus stashed around for a rainy day. Now, the life expectancy has risen to around 80 (I think it's 77 for men and 82 for women).


Correct the supposed trust fund is filled with nothing but IOUs. Even though Socialist inSecurity was a scam the day FDR the crippled douchebag enacted it, he at least made it its own fund where the money paid into it could only go to Socialist inSecurity payments. That lasted all of 30 years when Lyndon Baines Johnson (democrat) moved the payroll payments into the general fund. You see he had to be able to fund his Guns and Butter program to as he said "get those niggers to vote democratic for 200 years".


Grotesque I know but try to hang in..

Before the trust fund was created, there essentially was no guarantee of what would happen during a shortfall. For a great deal of time afterward as well, there was no automatic adjustment for CPI. The trust fund was created because of controversy over using surpluses as just another source of revenue (essentially just making SS taxes - the amount that's being paid out an incredibly regressive form of income tax. People thought that they should be some further guarantee. However, it's really just created confusion, some people thinking that congress is just storing up money (which would be literally the dumbest thing you could imaginably do with the surplus), and other people, such as yourself, self-righteously bloviating about your supposed right to have that money just stored away doing nothing but incurring inflation.



So this is how you all plan to argue the plan to privatize everything? Amazing.

I mean, if you don't retire between 2021 and 2033, the trust fund is really not concern of yours at all. It would've made no difference to the amount you'd receive anyway. You're not being robbed, you were never owed anything under any sense anyway.


What the hell are these idiots saying? Does any of this make sense to any of you?

If anyone can suggest a good place to get the knowledge I need to debate (I know) these baggers I'd appreciate a link or suggestion.

Thanks.

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Arrow 41 replies Author Time Post
Reply Social Security adds to the debt... (Original post)
haikugal Nov 2012 OP
steelmania75 Nov 2012 #1
nichomachus Nov 2012 #3
haikugal Nov 2012 #6
haikugal Nov 2012 #5
Cobalt Violet Nov 2012 #7
Warren Stupidity Nov 2012 #12
forestpath Nov 2012 #14
haikugal Nov 2012 #15
LiberalFighter Nov 2012 #21
shawn703 Nov 2012 #23
qwlauren35 Nov 2012 #38
Roy Ellefson Nov 2012 #28
nichomachus Nov 2012 #2
haikugal Nov 2012 #9
LiberalFighter Nov 2012 #22
GeorgeGist Nov 2012 #4
haikugal Nov 2012 #11
Blue4Texas Nov 2012 #8
Warren Stupidity Nov 2012 #10
haikugal Nov 2012 #16
msongs Nov 2012 #13
haikugal Nov 2012 #18
DeeDeeNY Nov 2012 #17
haikugal Nov 2012 #19
Scuba Nov 2012 #20
John2 Nov 2012 #24
Maplegrass Nov 2012 #25
eridani Nov 2012 #34
AAO Nov 2012 #26
haikugal Nov 2012 #27
AAO Nov 2012 #30
Kaleva Nov 2012 #29
Warren Stupidity Nov 2012 #35
Kaleva Nov 2012 #36
Sophiegirl Nov 2012 #31
haikugal Nov 2012 #32
eridani Nov 2012 #33
Kaleva Nov 2012 #37
eridani Nov 2012 #39
Kaleva Nov 2012 #40
eridani Nov 2012 #41

Response to haikugal (Original post)

Mon Nov 12, 2012, 08:24 PM

1. I'd raise the retirement age and remove the cap at $106,000.

Life expectancy is increasing, and we need a combination of revenue and spending cuts(especially defense) to pay down debt and have the money to invest in education, green jobs, and infrastructure.

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Response to steelmania75 (Reply #1)

Mon Nov 12, 2012, 08:31 PM

3. Don't need to raise the retirement age.

Increased life expectancy has been accounted for by the actuaries. That's a nonsense argument from conservatives.

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Response to nichomachus (Reply #3)

Mon Nov 12, 2012, 08:33 PM

6. Thank You...

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Response to steelmania75 (Reply #1)

Mon Nov 12, 2012, 08:32 PM

5. Raising the retirement age would be a bad idea.

If someone manages to live that long they often have health issues and have been working for more than 30 years. Depending on the type of work they do and the medical care they've had access to they may be pretty beat up. I have to say that those of my generation provided for our parents and ourselves and I want for those who come behind us to have it as well.

With healthcare this may get better, hopefully but don't forget that many were robbed by the housing market and crash on wall street.

I agree about defense spending but the Bush tax cuts have been huge and I want them repealed.

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Response to steelmania75 (Reply #1)

Mon Nov 12, 2012, 08:37 PM

7. life expectancy is falling for some groups of people. n/t

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Response to steelmania75 (Reply #1)

Mon Nov 12, 2012, 08:42 PM

12. Raising the retirement age is austerity bullshit, it is a cut in benefits.

A progressive government would be lowering the retirement age, increasing the funding to pay for it, and stimulating job growth by coaxing more people into retirement.

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Response to Warren Stupidity (Reply #12)

Mon Nov 12, 2012, 08:46 PM

14. +1

 

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Response to Warren Stupidity (Reply #12)

Mon Nov 12, 2012, 08:48 PM

15. That's what I've been thinking as well.

Why not allow people to retire earlier and open up opportunities for the young? I wish we had a progressive government...we have to keep working toward that.

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Response to steelmania75 (Reply #1)

Mon Nov 12, 2012, 09:08 PM

21. Maybe life expectancy is increasing. But not by much.

Even then you are asking those that work jobs that take a toll on workers physically. Not everyone has a cushy job or can work until they reach a higher retirement age.

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Response to steelmania75 (Reply #1)

Mon Nov 12, 2012, 09:10 PM

23. The other drawback with raising the retirement age

There's a finite number of jobs, so raising the retirement age increases unemployment. If older Americans need to hold onto their jobs longer, those jobs are unavailable to younger workers.

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Response to shawn703 (Reply #23)

Wed Nov 14, 2012, 08:55 PM

38. Good point!

Young people definitely need jobs!

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Response to steelmania75 (Reply #1)

Tue Nov 13, 2012, 11:45 AM

28. Retirement Age

raise the cap and lower the retirement age

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Response to haikugal (Original post)

Mon Nov 12, 2012, 08:29 PM

2. The only thing you need to know

Is that the cap on Social Security taxes was set to cover 90 percent of the wages in the country. Now that the one percent has arranged to have more income funneled to them, the taxes cover only 80 percent of the income. All we need to do is raise the cap on Social Security taxes to cover 90 percent of the income and Social Security will be fine for the next 100 years.

The fact of life expectancy is totally irrelevant. The formula is re-examined periodically by actuaries and adjusted to new demographics. Demographics aren't the problem. Income disparity brought about by conservative policies is the problem.

Your concern is appreciated.

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Response to nichomachus (Reply #2)

Mon Nov 12, 2012, 08:38 PM

9. Thanks

This helps. Why do I feel a need to assure you I'm not a concern troll? It really does concern me and I worry about what both parties may do. I think 'trusting' is part of the reason we get taken to the cleaners and I want us all awake for this next big battle. Thanks again.

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Response to nichomachus (Reply #2)

Mon Nov 12, 2012, 09:09 PM

22. The income disparity needs to be readjusted so the rich aren't hogging all the income for themselves

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Response to haikugal (Original post)

Mon Nov 12, 2012, 08:31 PM

4. Reneging on a debt ...

doesn't reduce debt.

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Response to GeorgeGist (Reply #4)

Mon Nov 12, 2012, 08:41 PM

11. Oh...I'll use this!!

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Response to haikugal (Original post)

Mon Nov 12, 2012, 08:38 PM

8. On paper SS had trust to cover into 2020s-30s

After Clinton, administration borrowed to fund the wars; government paying back as they go so to speak

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Response to haikugal (Original post)

Mon Nov 12, 2012, 08:40 PM

10. If the trust fund is a fiction then so are t-bills.

Trust fund obligations are already accounted for as part of the national debt. Adding payout of those obligations again would be double booking that debt.

It really doesn't matter much if the government finances its annual deficit through public t-bills sold on the market or intra government debt such as the FICA surplus, the net result is a long term debt obligation that is paid back over time with interest.

Right wingers have wet dreams over zeroing out the trust fund obligations. They can go fuck themselves.

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Response to Warren Stupidity (Reply #10)

Mon Nov 12, 2012, 08:53 PM

16. I tell them to do that often!!

They see more "harvesting" in their future I'm sure.

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Response to haikugal (Original post)

Mon Nov 12, 2012, 08:45 PM

13. show them the reagan clip "SS does not add to the deficit) - its on DU somewhere nt

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Response to msongs (Reply #13)

Mon Nov 12, 2012, 08:54 PM

18. I saw that earlier but didn't watch...I'll look for it.

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Response to DeeDeeNY (Reply #17)

Mon Nov 12, 2012, 08:55 PM

19. Damn!! That's great...Thanks!

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Response to haikugal (Original post)

Mon Nov 12, 2012, 09:02 PM

20. Remove cap, apply tax to capital gains, problems solved. 5 minutes if Congress were functional.

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Response to haikugal (Original post)

Mon Nov 12, 2012, 09:18 PM

24. Congress

 

has been robbing Social Security for years to pay for their indiscretions.

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Response to haikugal (Original post)

Mon Nov 12, 2012, 09:37 PM

25. It doesn't add a penny to the debt, as we know

 

And can easily be fixed permanently by removing the cap.

Why isn't this simple solution applied, then? For the simple reason that everyone is afraid wealthy people will complain of "unfairness," since they will pay in more than they can ever get out.

This is why denying that Social Security is welfare program is counterproductive. As long as we continue to insist that it is nothing more than "insurance," we will be unable to lift the cap.

Or means-test, for that matter, which would be even better.

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Response to Maplegrass (Reply #25)

Wed Nov 14, 2012, 07:20 AM

34. Bullshit. The initial benefits calculation already benefits those of lower income

It could certainly be skewed to further benefit them. We could lift the cap on yearly benefits and replace it with an upward trending line with a slope of about 0.01. That is the only "means testing" necessary. People now maxing out at ~$32K/year are only 1% or so of beneficiaries anyway.

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Response to haikugal (Original post)

Mon Nov 12, 2012, 11:47 PM

26. Kind of hard when their grasp of english is so poor you can't understand them. - and never a link!

 

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Response to AAO (Reply #26)

Tue Nov 13, 2012, 12:25 AM

27. They can be very difficult to understand

but they are openly aggressive and ignorant. There is no link because I wrote it. What do you want a link for? I'll happily give you the link to the forum if you pm me.

on edit...

You didn't mean me you meant that they never give a link to back up their claims. No they never back up their BS.

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Response to haikugal (Reply #27)

Tue Nov 13, 2012, 05:42 PM

30. Right!

 

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Response to haikugal (Original post)

Tue Nov 13, 2012, 03:30 PM

29. Drawing money from the Trust Fund decreases the debt

The Trust Fund is part of the national debt and for every dollar paid out of it, the federal debt decreases by a dollar. As there is no actual money in the Fund, just special bonds, the Federal govt. will have to borrow another dollar thus the overall debt remains the same. What does add to the debt is the interest the govt. pays on the money it borrowed from the Trust Fund. About 116 billion a year the last time I looked.

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Response to Kaleva (Reply #29)

Wed Nov 14, 2012, 09:12 AM

35. But it is likely offset by equivalent borrowing so it is net zero.

What it doesn't do is increase the debt.

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Response to Warren Stupidity (Reply #35)

Wed Nov 14, 2012, 10:03 AM

36. It isn't quite net zero as the govt. will pay interest on the money it borrows...

to provide the funds to pay back what was borrowed from the Trust Fund.

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Response to haikugal (Original post)

Tue Nov 13, 2012, 08:06 PM

31. Anyone remember Al Gore

And his stance on a SS lock-box?

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Response to Sophiegirl (Reply #31)

Wed Nov 14, 2012, 01:25 AM

32. From further up in the thread...

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Response to haikugal (Original post)

Wed Nov 14, 2012, 07:14 AM

33. Life expectancy at birth is totally irrelevant. What counts is further life expectancy at age 65.

That has not channged by very much. Reduction of infant mortality is what dropped life expectancy at birth so much. If you die at the age of two, you are irrelevant, as you neither contribute to nor collect Social Security.

Also, the surplus in the trust fund was built up to prepay baby boomer retirements by doubling the FICA tax in the early 80s. It is FUCKING SUPPOSED to be going down now. Gen Y is another demographic lump, so we'll eventually need to build a surplus again.

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Response to eridani (Reply #33)

Wed Nov 14, 2012, 10:12 AM

37. Life expectency of those who have reached adulthood is relevant.

The life expectancy of a 21 year old today is higher then it was for a 21 year old back in 1938.

The average 21 year old today can expect to draw several more years of benefits then the average 21 year old back in the late 1930's could.

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Response to Kaleva (Reply #37)

Wed Nov 14, 2012, 08:58 PM

39. Three or four years is trivial, and 21 is an irrelevant age

The relevant number is further life expectancy from age 60.

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Response to eridani (Reply #39)

Thu Nov 15, 2012, 02:11 AM

40. But if you start at 60, you are dismissing many of the adults...

who worked and paid FICA taxes but died before they collected any benefits.

Here is a link where if you scroll down to table 1, you'll see about a 20% increase from 1940 to 1990 of adults who live to the age of 65. While life expectency of 65 year olds has increased only by about 5 years on average from 1940 to 1990, the percentage of population surviving from age 21 to age 65 has gone way up.

http://www.ssa.gov/history/lifeexpect.html

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Response to Kaleva (Reply #40)

Thu Nov 15, 2012, 02:13 AM

41. What makes you think that this isn't happening even now?

Raising the retirement age is just going to exclude more of them.

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