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In reply to the discussion: Red-State Democrats Buck Obama On Social Security Cuts - HuffPo [View all]RunInCircles
(122 posts)If look at social security from the standpoint of are we pre-contributing enough funding to cover our future benefits as opposed to is the next generation paying my benefits then the system is not stable over the long term.
You are correct that the trust fund is currently increasing. This will reverse around 2021.
You are correct that the deficit is unaffected by social security.
You are in my opinion correct that Wall Street is salivating over the prospect of getting their hands on the revenue stream from social security.
The current 2011 median salary in the US is around $26,965.43
The salary at which a person contributes more including interest on their contributions is over $50K (after adjustment factors are applied) assuming 44 years working and paying into the system.
There are not enough wage earners left given the wage cap providing more contributions than receiving in benefits.
The way the salary adjustment factors are calculated is being distorted by the excessive amount of money going to the to highest wage earners. And They only contribute up to the salary cap! This is artificially pushing up the break even point between positive contributions to SS and taking more out than you put in.
There are bend points in the benefit calculation formula. We need the upper bend point which ultimately determines the dividing line between positive contributions and negative contributions to stop increasing faster than our actual wages are growing.
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