The social security part of tonight's debate is why I am so obscessed with keeping numbers straight

[dsc]

Russert lied to our faces about life expectancy. Actually he probably didn't know any better but he still gave out totally false information. He prefaced one of his many misleading questions in regards to social security with this:

When FDR instituted the 65 year age for Social Security the life expectancy was 65 and now is 78. People only were on Social Security for a couple of months. That is totally, utterly, and completely false but none of our candidates knew it. Here are the real facts.

In 1900, life expectancy at age 0 was 48 for men and 51 for women and is now 75 for men and 80 for women. But, at age 65 those figures are in 1900 12 years for men and 12 years for women and now 17 years for men and 20 years for women. I don't have the exact figures for 1933 but the graph where I got this link makes it appear to be about 13 for men and 14 for women. In any case, what Russert said was totally false. People who were age 65 in the 1930's had a life expectancy of 12 years not a few months.

He went on to tell an even more egregious groaner. He said that if we don't fix social security it won't exist in a few decades. That is totally false. Even if nothing whatsoever is done people in the future would get 70% of the Social Security they are currently promised. Again, he should know that as should our candidates. Apparently none did.

http://www.cdc.gov/nchs/fastats/lifexpec.htm (go to first link under more data then to page 78)

I didn't know this because I am some kind of genius. I surely didn't know the exact numbers without looking it up. But I did know, due to possessing basic numeracy, that there was no way Russert was correct about 1933. I knew that infant mortality and ending childhood diseases were at least as responsible for the increase in life expectancy as our increasingly elderly population. This is a crystal clear example of why I am so picky about numbers.

Finally kudos to Richardson for at least mentioning economic growth being too low in the estimates.

[papau]

1. I am getting used to Russet lies that are read from a GOP handout - you are

correct as to the true facts - indeed there is no real reason to rush to change SS except that they want more SS surplus so as to avoid raising taxes to pay back to SS the money loaned to the rich as a tax cut for the rich - that loan made out National Debt larger - and in 2017 the first repayment on that loan is due from the rich - and they do not want to pay -

The "run out of money to pay 100% of current promise" year of 2043 depends on the rich repaying that loan beginning in 2017 - or are US full faith and credit government bonds worthless when issued to old folks via being put in the Trust fund in return for the payroll tax surplus spent on the tax cut for the rich?

The Clinton comment that simple getting rid of the deficit will take care of SS is correct. The Richardson comment that the "middle" projection is too conservative is also correct.

The only "problem" is the rich repaying those bonds via higher taxes on the rich.

[dsc]

3. that is why the only fix I would see enacted is removing the cap

Preferable would be raising the highest marginal rate by about 5% instead of removing the cap but removing the cap would be an acceptable substitute. Paying back the money should be done and done by the rich who mostly benefited from the raid on the fund.

[Yupster]

13. My fix has two parts

1. Remove the income cap. This would anger the Republican leadership, but it is absolutely fair.

2. Bring workers who do not have to be in social security back into the system. This group is mostly public schoolteachers. This would anger Democratic leadership, but it is absolutely fair.

Doing these two things together I think would work because both sides would have to give up something that they should give up anyway for basi fairness reasons.

[Telly Savalas]

2. It's all part of the stupid shell game.

Any problems we might face in the future regarding retirement income will stem from the simple problem of having a higher ratio of retired people to working people than now.

The concept of a giant mystical trust fund paying for all future retirements is a hoax. Current production by current laborers facilitates current consumption by retirees. Future consumption by future retirees will be enabled by future economic activity of future laborers, not some piece of paper presently sitting in a bank.

Shuffling around these pieces of paper that say who has dibs on the stuff we produce doesn't change the fact that a smaller percentage of people will get up every morning to go make that stuff. This is why the premise for privatization schemes for social security is bullshit.

By the way, good catch on Timmy's "How to Lie with Statistics" example.

[pitohui]

6. this is completely untrue

in the ronald reagan years an additional FICA tax was passed, which every person who works has been paying for 20 years, to cover the fact that there would be a greater proportion of retired to workers

no problem is caused by this, it was all covered and paid for -- until the GOP stole the money

[Telly Savalas]

22. That completely misses the point.

All creating a "trust fund" does is changes who has dibs on future production. You can't eat dollar bills. Stashing them away doesn't save wealth (food, shelter, etc.), but rather the right to acquire such wealth. So if collectively as a society we stash away a bunch of dollar bills, all we're doing is saying we have the right to buy stuff from ourselves. Collectively, we had such a right already.

Retirement schemes all rest on the notion of working people transferring wealth to retirees. That's why when right wingers whine about Social Security going bankrupt, they're full of shit. We can either afford to allocate a certain percentage of our wealth to the retired or we can't. Privatizing social security won't change this.

[bvar22]

15. That is where the "demonized" immigrants will save us.

Providing the Corpocrats don't outsource ALL the jobs in America.
A Progressive policy of Immigration and Integration into an expanding LABOR force that provides GOOD jobs and taxable income will more than balance out the drop in birth rates.

Edited to add:
I also support removing the SS cap.

[PDenton]

20. declining population is a good thing

all things considered. It is not something that should be fought with higher immigration or birth rates. We can deal with the increase in elderly and decrease in younger workers by innovations in technology, higher taxes, and encouraging people to remain productive for a longer period of their life. At this juncture in history we should be pouring more money into ways to fight declines in health, rather than trying to extend the human lifespan, if we had to choose where money should go.

The US is overpopulated. 300 million people. When I was born there was a little over 200 million. This country doesn't need to end up like a giant Calcutta, thank you. You can't on the one hand say you are in favor of the environment, and on the other, be in favor of the increase in the principle cause of environmental harm- human beings.

[pitohui]

4. do you understand we've been paying extra taxes since the reagan years?

mr reagan already was plenty upset that some americans had the audacity to live to be 80, hence we've been paying hugely inflated social security taxes for over 20 years to make up for that

it doesn't matter what the life expectancy was in fdr's day, we've been paying for the life expectancy of modern americans (less than the life expectancy of 40 other nations BTW) for 20 FRECKING YEARS!

we knew this would happen and we paid for it and the GOP stole it



we put the money in and we should get the money out and any other answer is unacceptable unless you propose to somehow give me back the last 20 years of my life

argghhh, not yelling at you, YOU know this, just at the apologists in general who think there should be means testing or other excuses for not paying people for what they put in

[dsc]

5. That is part of it too

but in fairness, some of the Reagan increase was actually necessary but much of it ended up being wasted. The GOP has been lying about this for years.

[Cha]

7. Why the hell did all the candidates agree

on having timmy the ge robot "moderate" for them? They knew it was going to be Bogus from the getgo. hillary knows it from 2000.

[dsc]

8. that is an excellent question

I can only imagine that they felt he would draw ratings and thus be worth the trouble. I think they were wrong.

[Cha]

9. I hope it's the last time.

During the debates in past years..Dems always get these meanass corporatemediawhores who are there to ENSURE Dems don't stand a chance.

HELLO- Is Anybody In There?

[Cha]

10. And by the way, dsc..

Thanks for keeping these numbers straight..no small feat!

[Whereweat]

11. I think you missed the point here

The average life expectancy for that time frame 63.62 from birth. Today the average life expectancy from birth is 77. So there was a much lower percentage of the general population receiving social security because the majority of people were already dead to claim any benefit.

[dsc]

18. not true

The majority of the difference is that kids live through childhood now and women live through child birth. Add in that the majority of women work now when they didn't then and the difference is no where near what it is made out to be.

[papau]

21. bad math - the actuaries say the current and projected working population has no problem paying for

projected benefits until 2041 or so, when only 70% of the promised benefit can be paid - indeed the more likely albeit less conservative - but still very conservative - projection shows SS NEVER has a problem over the 75 years of the projection.

[RamboLiberal]

12. The Truth Right from the Social Security Website

If we look at life expectancy statistics from the 1930s we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits. Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security. A more appropriate measure is probably life expectancy after attainment of adulthood.

As Table 1 shows, the majority of Americans who made it to adulthood could expect to live to 65, and those who did live to 65 could look forward to collecting benefits for many years into the future. So we can observe that for men, for example, almost 54% of the them could expect to live to age 65 if they survived to age 21, and men who attained age 65 could expect to collect Social Security benefits for almost 13 years (and the numbers are even higher for women).

Also, it should be noted that there were already 7.8 million Americans age 65 or older in 1935 (cf. Table 2), so there was a large and growing population of people who could receive Social Security. Indeed, the actuarial estimates used by the Committee on Economic Security (CES) in designing the Social Security program projected that there would be 8.3 million Americans age 65 or older by 1940 (when monthly benefits started). So Social Security was not designed in such a way that few people would collect the benefits.

As Table 1 indicates, the average life expectancy at age 65 (i.e., the number of years a person could be expected to receive unreduced Social Security retirement benefits) has increased a modest 5 years (on average) since 1940. So, for example, men attaining 65 in 1990 can expect to live for 15.3 years compared to 12.7 years for men attaining 65 back in 1940.

(Increases in life expectancy are a factor in the long-range financing of Social Security; but other factors, such as the sheer size of the "baby boom" generation, and the relative proportion of workers to beneficiaries, are larger determinants of Social Security's future financial condition.)

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

BTW, I just emailed this to the MTP contact address. DU'ers appreciate if you could do as well. To bad KO works for the same network and probably can't touch this.

[dailykoff]

14. Thank you.

The SSA is drowning in cash and the surpluses are growing, not shrinking, for many reasons, among them undocumented workers using false numbers who will never see a penny of their benefits.

Didn't see the debate, but if nobody called out fatboy on his lies, that's pretty sad.

[eridani]

16. Yes--what's really annoying is having to constantly point this out to even DEFENDERs of SS

If you die of the childhood diseases that used to be common, you are irrelevant. You will never pay into Social Security or collect from it.

[Jim Lane]

17. Question about eliminating the cap

Under current law, a retiree's initial benefit payment is based on his or her earnings history, but not all earnings are counted -- only those that were subject to the Social Security tax (FICA). Thus, a very rich person will have paid the same amount in taxes as someone who was moderately well off (that's why it's a regressive tax) but the two of them will also receive the same benefit.

An obvious approach to improving the system's finances is, as several people have said on this thread, to eliminate the cap on taxed earnings. The tax would then be neither regressive nor progressive. Everyone would pay at the same rate.

The question it raises, though, is whether to continue to base benefits on all taxed earnings. If that part of the current system is preserved, some retired CEO's will be receiving seven-figure Social Security payments each year. On the other hand, if that rule is changed, it might undercut the perceived link between earnings and benefits, leading to Social Security being seen more as a welfare program (or at least redistributive) as opposed to social insurance financed through a dedicated tax.

I raise the point because I'm not sure what the best approach would be. I'm soliciting opinions from other eliminate-the-cap proponents.

My inclination is to say: Eliminate the cap, count all taxed earnings toward benefits, reduce or eliminate special treatment of Social Security benefits for income-tax purposes, and restore some progressivity to the federal income tax. That way the retired CEO does indeed get a huge Social Security payment but at least has to give a good chunk of it back in regular income taxes.

[PDenton]

19. True and false

On average people did not live to be much older than 65. However, for those people who did reach an old age, they may have lived for a decade or more.

Men did very dangerous work, cancer was pretty much untreatable, heart disease was very common. My great grandfather dropped dead from a heart attack before he was 60, and that wasn't uncommon back then.