Social Security Healthier Than We Were Led to Believe
For the past 30 years I have been hearing how I will never see a penny of social security and how it will be bankrupt long before I ever got there. The doom and gloom has been a slow drum roll. All the boomers thought they were paying in to a system that was giving all our money away to various groups who weren’t old people.
Now in the Huffington Post:
Social Security, according to its annual report, is expected to pay out slightly more in benefits than it receives in payroll tax this year, for the first time since changes were made in 1983. But payroll taxes are only one source of income for the program, and with the others — including interest income on its $2.5 trillion trust fund, held in special issue U.S. Treasury securities — the program is expected to continue to run a surplus until 2024.
The program will need to start spending from its trust fund in 2025, with that fund becoming exhausted in 2037, which is consistent with last year’s estimate. But at a press conference Thursday, Social Security Commissioner Michael J. Astrue, one of the government trustees releasing the report, begged reporters not to scare the public by exaggerating the significance of trust fund exhaustion
“That does not mean that there will be no money left,” Astrue said. At that point, even if Congress took no action, Social Security could still pay out 78 percent of expected benefits from annual revenues. “That would be a bad result, but it is a far cry from having no benefits at all,” he said.
Inaccurate reporting on the topic tends to “make young people despair about Social Security,” he said.
The program, signed into law in 1935 by Franklin Delano Roosevelt, has served as an economic lifeline for millions over the past 75 years. “I’m excited about the next 75 years of Social Security, and you should be too,” Astrue said.
So who has been the social security grim reaper all these years and why? Has it been a way to control seniors? Do we need to look to the future? Of course. But social security is not at critical mass and we need to stop the panic reaction.
there is no social security trust fund. anyone who says there is, is spewing out nothing but garbage. all ss taxes go straight to the govment, that’s all. the govment is running trillion dollar deficits. the govment is broke. in 1933 there were 33 ss contributors for every 1 recipient. and the life expectancy was lower. now there are 3 contributors for every recipient. soon the whole system will collapse, like every ponzi scheme invariably does
Check out the annual report.
checking the annual report is like colonel sanders checking out the chicken coop. is a dot.gov website going to admit to you that gov is bankrupt?
Santa Claus
The Easter Bunny
The Social Security Trust Fund
The Tooth Fairy
Which one of those doesn’t belong?
Santa Claus. He is based at least partially on a real person. The others are all complete fiction.
The Social Security Trust Fund does not exist. It is accounting shorthand for money the General Fund borrowed and spent. Paying back into Social Security will remove funds from the General Fund, increasing annual deficits. If you want to claim that Social Security is healthier than we were led to believe, then you also have to admin that the overall budget is worse than we were led to believe.
Maybe you two can take over the posts for the day. Do you have a spare couple of hours in the middle of the night? I feel certain you could shore things up better than I.
Why do I find this report suspicious?
For years we’ve been shown reports and numbers that illustrate how badly the SS program is going broke. NOW, when budget cutting is on the table, we get a report showing all is well.
I don’t believe them anymore. Government statistics and reports lie. Remember, inflation is non-existent, therefore, gov’t payouts do not need a COLA. But everything is going up in price. Inflation is too much money chasing too few products. What was that about printing MORE money?
Or it could be that someone was trying to scare us to death. I have no clue.
Govt lies, political parties lie, people lie. I guess I will just sit back and be surprised.
And deflation is too many products and not enough money.
Honestly, I don’t see much difference between this report and the ones that have been coming out for years. Everyone has been saying for decades that the trust fund is exhausted in the late 2030s. Here’s a quick rundown on the three different Social Security issues:
1) Because of the current recession, social security payroll taxes dropped significantly in the last two years. That caused Social Security to have to take money from the General Fund this year, much sooner than was expected. This is expected to be a one-time event due to the current recession. Nothing has to be done about this assuming the economy doesn’t get any worse.
2) The date that Social Security will begin requiring annual (and increasing) payments from the general fund is in the range of 2018-2025. It moves around every year slightly depending on how much Social Security brings in every year, how much they spend and the overall economic forecast for the period between now and 2037. This is when the Social Security fund will begin to start cashing in those $2.5 trillion in IOUs they’ve been holding since the 80s and expecting payment between sometime around 2020 and the late 2030s. This is the short term problem with Social Security. Coming up with $2.5 trillion to pay back those IOUs.
3) Assuming the $2.5 trillion in IOUs are paid back from the General Fund, Social Security will not have enough money in its own funds to cover it’s expected obligations after the late 2030s. The incoming Social Security payroll taxes in the late 2030s are projected to cover only about 75% of the projected obligations each year. That’s the long term problem with Social Security.
These are all facts that there is virtually no disagreement on. The disagreement is on how to fix the problems. Debate on how to fix the problems is great but denying that there’s a problem or that there’s some conspiracy theory on this is just refusing to see reality because it doesn’t match your ideology. (Let me be clear, I’m not directing this comment at anyone in particular, just anyone in general who doesn’t believe there is a problem with Social Security.)
This is beginning to sound like what is going to happen to the VRS if Virginia keeps putting its hand in the cookie jar.
Removing cap on SS contributions and holding benefits steady would go a loooonnnng way toward keeping it solvent. I believe this got discussed on here in great detail not too long ago and we weren’t any closer to agreement that we are this round. It is the same old saw–figures lie and liars figure. There are problems and no one seems to have the chutzpah to do anything about it.
@George,
I still haven’t figured out why middle class people continue to protect those making more than $115,000. Lift that cap. I am even willing to let them pay a lesser rate.