How big are those liabilities? The American Enterprise Institute has published a paper by Jagdeesh Gokhale and Kent Smetters that analyzes that question. According to their estimates, we, as a nation, have collectively promised to spend $44 trillion more than we have resolved to collect in taxes, almost all of it on Social Security and Medicare. If the United States government were a private company, we wouldn't just be in the red; we'd be in receivership.
I know it's hard to get excited about the long-term solvency of Social Security, even if you are among the few Americans who has noticed that the Social Security and Medicare "trust funds" are slated to run dry sometime around 2040. After all, if you're over fifty, you probably won't live to see the day that the "trust" is exhausted. And if you're under thirty, you probably have emotional trouble actually imagining yourself needing a walker and a pillbox full of heavily subsidized drugs. That leaves a very narrow band of our citizenry willing to spend precious time worrying about the solvency of our old age programs.
But if you are having difficulty keeping your mind focused on the problem, I think I can help: the problems won't start in some comfortably far off time. They'll start in less than ten years.
I imagine I now have your attention. Let me explain.
I don't think people are really surprised by this timeline too much. Truthfully, I think most people realize the heap of trouble we're heading into. Oddly enough, had the market not taken it's shortfall for the last 2 years, this massive cashing out would have been upon us in 5 years and not 10.
Thinking a politician will build for the future as opposed to saving their own neck from term to term is nuts. These chuckleheads can't even balance the budget in a post-cold war environment.
There's going to be so much fucking poverty by the time I retire. I still know people that haven't done a single thing about 401k/403b plans. Hell, social security is practically poverty level now.
kyoukan wrote:so divert one percent of the dough your president is using to kill arabs and you will never have to worry about social security again.
Bush has asked for 87 billion. Don't remember off-hand if that is in addition to some money already spent or includes the existing. Either way, its bound to go up so lets be generous and double it and throw some more on top and say 200 billion. One percent of that would be 2 billion (ignoring for the moment the silly implication that this money is all directed to "killing arabs" as you put it).
The U.S. spent 452 billion on social security in fiscal year 2002 (228 billion more on Medicare). Don't think 2 billion is going to cut it even in the short term.
By the way, projected 2003 cost for SS is 478 (241 for medicare). Projected for 2008 is 587 (345 for medicare).
Killing arabs is more important to me than supporting poor old farts.
"There is at least as much need to curb the cruel greed and arrogance of part of the world of capital, to curb the cruel greed and violence of part of the world of labor, as to check a cruel and unhealthy militarism in international relationships." -Theodore Roosevelt
Push them out into the snow! I really fail to understand why we spend so much time and money ensuring that people can piss into a bag attached to their hip for 10-20 years after they stopped living.
I understand fear of death, subjectively, I don't share it. We're really keen to extend people past their use by date w/ no real idea what to do with them..
Killing off healthy individuals a`la Logan's Run is silly, but I'd rather be dead than "old and sick".
I could go into my rant on why there are so many more people alergic to basic foods these days.. but that's a side issue, suffice to say Darwin didn't purely cover stupid creatures...
The problem with social security is not in the old people. It is those people who are getting checks that shouldn't be. I knew a guy in his low 30s who received a hefty check every month because he was an alcoholic and claimed that he was unable to work.
I am 30 years old. I will never see a dime of social security and don't really plan too. I have separate retirement investments set up that I will rely on. The sad part is all the wasted money I have spent on Social Security so far.
Retirement age is hardly the end of life in my opinion. I certainly hope to still be going at that point. On the other hand, the only options are not "pushing them out into the snow" and having huge, financially dubious, government programs. Since people have been paying money into them for years and basing their retirement plans at least partially around them its not really feasible to just end the programs at this point either. Its likely to be painful no matter what actions are taken, but the longer we wait around before making some effort to address it, the worse it is likely to be (to say nothing about the negative effect adding huge new entitlements like the prescription drug benefit will have to it).
You don't have to end it, you can phase it out. SS taxation could stop today. You could then provide for SS payouts from the general fund providing people with compensation appropriate to their investment. The size of teh SS beaurcracy could likewise be faded out as the need for adminstration decreased.
I know you can't politically abolish it all at once, but there is no reason to accept it as a permanent part of our governament either.
Deward wrote:The problem with social security is not in the old people. It is those people who are getting checks that shouldn't be. I knew a guy in his low 30s who received a hefty check every month because he was an alcoholic and claimed that he was unable to work.
The main problem (financially at least) with Social Security actually basically is in old people, or to be more exact in the nature of the financing of the program and the changing demographics of the country. The working populace pays into the program and that money is then used to pay out to the people that currently receive social security. At first, this wasn't a problem since the number of workers was high compared to the number of people receiving benefits. As time passed though, more people were living longer and the so the ratio dropped. In particular, in the not so distant future the baby boomers will start to retire and the ratio of people receiving benefits to those paying into the system starts to get really bad. This structure (basically the same as a Ponzi scheme) isn't the only problem of Social Security, but its probably the most signficant, and why the program is very likely to face financial difficulty in the near future.
Aaeamdar wrote:You don't have to end it, you can phase it out. SS taxation could stop today. You could then provide for SS payouts from the general fund providing people with compensation appropriate to their investment. The size of teh SS beaurcracy could likewise be faded out as the need for adminstration decreased.
I know you can't politically abolish it all at once, but there is no reason to accept it as a permanent part of our governament either.
Yes, ultimately if we are going to reform or end it, we are going to have to bite the bullet and pay out the existing commitments in some way and go from there. The amounts involved are staggering though. Social Insurance and Retirement account for 700 billion of the 1,853 billion total receipts in the 2002 budget. At the moment we are actually receiving more than we are paying out. The extra money is being used for other general spending (basically being used to mask the size of the deficit, unethical I know). Plus the baby boomers are about to retire, and then the equation will switch, and amount that needs to be payed out will be greater than receipts. Not saying that we still don't need to make the effort, but its not going to be pretty.
