Social Security

Start Saving Now, Because Social Security Is Screwed

If Congress doesn't address its insolvency issues, payouts will need to be slashed by a quarter starting in fewer than 20 years.

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The single largest government program in the United States will soon have an annual budget of $1 trillion a year. Yet even that amount isn't sufficient to fulfill the promises it has made. If Congress doesn't address its insolvency issues, payouts will need to be slashed by a quarter starting in fewer than 20 years.

The program is Social Security, and our national pastime seems to be turning a blind eye to its dysfunctions.

The problems with this entitlement aren't unique. Obamacare is also a mess, while cumulative government spending on Medicare and Medicaid is growing at a faster rate than Social Security is, and eventually will consume a larger share of the economy.

But that's no reason to ignore the serious fiscal issues with America's main retirement program. Since 2010, it has been running a cash-flow deficit—meaning that the Social Security payroll taxes the government collects aren't enough to cover the benefits it's obliged to pay out. That should have been a signal that the time had come to look at reform.

Instead, we've spent the last seven years ignoring the problem. To get by, the program started tapping into the assets set aside beginning in the 1980s for rainy days. Prior to 2010, the program collected more in payroll taxes than was needed to pay the benefits due at the time. The leftovers were "invested" into Treasury bonds through the so-called Old Age Trust Fund, which is now being drawn down.

In fact, the Treasury bonds are nothing but IOUs. When it's time to disburse benefits they can't afford, Social Security administrators turn in those paper promises in exchange for hard cash from the Treasury Department.

But Treasury also doesn't have the money: It has already spent it on wars, roads, education, domestic spying, and much more. So when Social Security shows up with its IOUs, Treasury has to borrow to pay the bonds back. That adds to the debt that future generations will be on the hook for via higher taxes.

Did you catch that? Past generations of workers paid extra payroll taxes to bulk up the Social Security system. But the government spent that additional revenue on non-retirement activities, so now your children and grandchildren will also have to pay more in taxes to reimburse the program.

You may be tempted to wave away this problem. After all, there's more than $2.3 trillion left in the trust fund.

Don't. The Social Security trustees have calculated that the cash-flow deficit over the next 80 years will amount to a staggering $44.2 trillion, and that's after adjusting for inflation. Under current projections, the make-believe assets in the fund will only be enough to pay full benefits until 2034. At that point, the system will have to revert to paying out only the amount taken in through annual taxes. And that means benefit cuts across the board of 25 percent.

This will screw up everybody's plans, but it will be especially hard on lower-income Americans, who are more likely to depend entirely on the program during their later years.

Options for reform at that point will be limited. With the national debt projected to be 105 percent of GDP, or $39.1 trillion, in 2034—and with Medicare and Medicaid facing even bigger long-term problems—Congress will be too broke to restore full benefits for all. The most likely scenario is that higher-income earners will see their benefits disproportionately reduced, their taxes disproportionately hiked, or both. To them I have but one piece of advice: Start saving now.

Given this predicament, Congress should make it easier for all Americans to save. One way to do that is through the creation of Universal Savings Accounts, or vehicles that allow people to invest money without all the complicated rules that now apply to IRAs and 401(k)s. In addition, Congress should boost the maximum contributions people can make to Health Savings Accounts, so that more Americans can afford the medical expenses most of us inevitably incur in our old age.

More broadly, Congress should shift away from Social Security into a "funded" system based on real savings, much as Australia and others have done. The libertarian economist Daniel J. Mitchell notes that, starting in the '80s and '90s, that country has required workers to put 9.5 percent of their income into a personal retirement account. As a safety net—but not as a default—Australians with limited savings are guaranteed a basic pension.

That program has generated big increases in wealth. Meanwhile, Social Security has generated big deficits and discouraged private saving. Who would you have emulate the other?

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275 responses to “Start Saving Now, Because Social Security Is Screwed

  1. Don’t think people like to save money. Don’t have many friends who will, more fun to blow it on baloney. Part of this I think is they are not married and don’t have kids either, most people don’t really have a reason to plan for the future so they don’t.

    1. Not having kids is more reason to plan for the future, it means nobody is going to open their home to you when you’re broke and too decrepit to work for a living. But, yeah, the people with the greatest need to plan for the future are the people who are least likely to.

    2. I have no kids and no wife but I save money. Nothing is more liberating at your job then having FU Money.

      And when the government tells you they will provide for all your crap, is it a wonder people don’t save? Like in Oregon how they can’t even pump their own damn gas once the government allows you to.
      ….

      And I have friends who came here from Iran 10 years ago… his parents are elderly and can’t work, and they came over and Social Security is paying for their full time care facility. Never worked a day here in their lives or paid a cent into social security, but they cost thousands of dollars a month….

      1. My great fear, as a late boomer, is that when it’s finally time for me to retire, the government will take everyone’s savings to help fund social security.

        1. Cyprus seized bank account funds, didn’t they? Although if it’s a percentage of funds in bank accounts that the government would seize (like checking, savings, money markets, or CDs), you should be fine if you have most of your worth in mutual funds and index funds. Correct?

          1. I’m sure some gov’t will argue that they can seize wealth stored in equities, given that the wealthy own far more equities than the middle class and the poor own none.

            Interestingly, the Bank of Japan owns so much in equities that it is a top 10 shareholder in several large Japanese companies. So the BoJ would not really be able to seize equities from private citizens, as it would be seizing the remainder of the ownership of the companies, effectively turning them into State Owned Enterprises.

            Perhaps the same limitation will prevent the seizure of equities in other countries.

        2. As Obama said, no one needs over 3 million dollars in their 401k….

        3. Taking everyone’s savings to help fund social security is essentially what the government is doing right now.

          The only way the government can redeem the IOUs in the “Social Security Trust Fund” is to pay out from general revenues; ie taxes or borrowing. Either one impacts your savings.

          The next step is an increase in Social Security taxes so that the SSA can meet its obligations with current revenue.

          1. Well yeah. But if they come for my meager savings that will essentially be triple taxation. I plan to play taxes on what I withdraw from savings, because government is already a bastard and will double tax me. But confiscating all my savings because a few of my cohorts did not will be triple taxations. What’s the point of even saving if the government is just going to punish you for it.

            I’m already starting to think about Belize in the back of my mind. I’n thinking the petty corruption is going to be a lot better than the large scale grab that will come about when millenials take over and realize they have to fund the boomer’s retirements somehow.

            1. Like you I’m convinced that even my Roth contributions will be taxed upon withdrawal, but I truly wouldn’t be all that surprised if some was seized directly – somehow. The latter prediction is cynical and paranoid, but the government is doing nothing to ameliorate it. Stashing wads of cash in my mattress is also risky because inflation is guaranteed to spiral out of control, so savings have to be in some sort of bond or other investment.

              Plenty of are putting away our 10+%, but I’m not exactly sure where it’s best to store that money so the government can’t mess with it or devalue it.

              1. Gold and silver my friend! You don’t really make returns on them per se, but they will not inflate like cash. If you have enough savings to be comfortable with losing out on some returns putting a portion of it in gold and silver is not a bad way to go. I had 6-10K worth (depending on the price) a few years back as a SHTF stash, and it felt nice. I had to sell most of it off, at a profit, due to cash issues, but I’m building it back up again.

                Other than that I like rental real estate for riding out bad situations. Other than full blown communist takeover real estate will probably be respected and not actually taken. It might be taxed higher, but that will generally cause rents to rise as everybody else will feel the pinch too. Plus having direct control over it is soooooo much more safe than owning 1/1 billionth of some mega company on the stock market. You can directly control your property, you ain’t telling fortune 500 CEOs what to do.

                1. These are excellent points, and I am planning to invest in something like gold and silver. At my most paranoid I can convince myself that they wouldn’t be all that liquid if civilization completely collapsed. I can stockpile ammo and fishhooks to squelch that tinfoil thought. The value of gold and silver have been overall pretty consistent, except the massive sink in the 90s. Something like you had, $5-10k would be nice. Diversity is key. I can’t afford to lose it all, but I’m decades from retirement, so I can afford to lose quite a bit.

                  I’ve got a fair bit in a 2055 target mutual fund that has been pulling double digits for almost three years now. It’s obviously pretty high risk, but I’m happy with it.

                  Ironic that you’d mention real estate, too. I inherited the family home recently, and I’m playing with the idea of renting it out. The house is in awful shape, but the location is exceedingly desirable. My uncle has a few rental properties. He’s had some issues with bad tenets, but most are pretty cool. The biggest issue is that they just bleed money when they aren’t occupied, and the metaphorical shit always hits all the fans at one time. Septic tank blows? Great, now you get to pay for that AND digging a new well that isn’t contaminated. Oh and the A/C needs a new condenser now that it’s warming back up.

                  1. Yeah, I always thought of my gold/silver as just a short term SHTF cash supply in between chaos. Unless it was full on zombie apocalypse it would retain value during most other problems, and things would probably turn around after awhile. But ammo, stored food, etc is of course the ultimate security. I have a reasonable food stash, but nothing like some of them Doomsday Prepper cats 😉

                    Stocks in blue chip type companies are probably good for the multi decade haul. I’m self employed, and a hustler (LOL), so I like controlling my own stuff. I will probably dabble more with stocks when I have more personal cash to risk.

                    Real estate is the ultimate safe investment for people who don’t have the stomach to own a real business IMO. YOU control it. It has real intrinsic value. Since RE has real value it tends to at least keep up with inflation over the long haul. Many other virtues as well. If I were you I would definitely keep that house, slowly but surely fix it up, and keep it until you die. All of those “costs” are just cost of doing business. In the mean time your mortgage and a healthy profit are being paid by some other sucker. You make tax free gains while equity accumulates. Even if you have bad renters you come out waaay ahead in the long run.

          2. Taking everyone’s savings to help fund social security is essentially what the government is doing right now

            And one of the key ways they are doing this is through inflation, which acts as an inescapable tax on cash savings.

          3. Well that will happen because the government will not cut spending in the agencies that the bonds were issued against.

      2. Social Security doesn’t pay for long term care for anyone neither does Medicare. Social Security pays old age pensions and income payments to qualified disabled people.

        Care for the elderly for the indigent is paid for by Medicaid and and some HUD programs.

        1. Does not Social Security Disability fall under the aegis of Social Security? Doesn’t the same FICA tax pay for both?

          1. Yes, I thought I had made that plain with “Social Security pays old age pensions and income payments to qualified disabled people.

            My major point was that SS makes direct cash (ie they cut monthly checks or do direct bank deposits to current recipients of pension or disability benefits) payments to recipients, not third party payments to entities like nursing homes for the elderly. If esteve7’s friends’ parents are getting senior care paid for it is through some other government program than SS.

            No long term nursing care for the elderly is paid for by either SS or Medicare.

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    3. Even if they’re all irresponsible with their money, it’s nice for them that they’re spending on fun experiences rather than diapers.

    4. Exactly, which is why I feel zero sympathy for such people when they whine about having no money. Maybe if you didn’t go to the bar constantly, pay for extremely expensive cellphone service, buy unnecessarily expensive food, etc., you’d actually have money. I see it with poor people, with middle class people, with single people, and with married people. Then, whenever they get raises or higher paying jobs, they figure they can waste even more money.

      It’s amazing how little money you (and even entire families) can live on when you actually try to make wise purchasing and investment decisions, and it’s a lot less stressful than constantly worrying about emergencies. But hey, that five seconds of happiness (before boredom) is more important than being financially independent!

      1. Yup. The book Richest Man In Babylon basically says it all. Most people spend every penny they have, and with easy credit nowadays MORE than they have. If you save/invest 10-20% of your income ALWAYS, which is frankly not enough to really miss, you will die wealthy, even if you have a modest income.

        I was making bank with my business a few years back, and seemed to be only up from there. So I was spending pretty good, but not being totally dumb about it. Just middle of the road dumb. LOL Then it slowed down and it’s been a crappy couple years. I’m doing pretty well again, BUT if I had just kept my spending down during those good years by just a little more, I would have been able to make investments that probably would have netted me an extra 500K or more over these several years! Kicking myself in the ass is an understatement.

        So never again. I’m going to live like a total penny pincher until I’m at least several hundred K net worth outside of whatever my business is worth. You can increase your spending as your income goes up, you don’t have to live like an actual pauper… But you always have to spend LESS than you take in. That’s the golden rule.

        1. Richest Man in Babylon is a fantastic book. Should be required reading in the gov’t indoctrination camps they call public schools, except that the gov’t-run camps have no interest in teaching people to be financially self-reliant.

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  2. If you have kids, then they should support you. SS should be only for the childless.

    Still Shillin’ for Jill 2020 approves this message.

    1. My parents are living on SS. If they hadn’t had to pay in double all those years (as self employed), they might have actually been able to save more. If my taxes weren’t so high I might actually be able to help them out more than I do.

      1. ” If they hadn’t had to pay in double all those years (as self employed),”

        They didn’t pay in double. Your employer’s portion is paid for out of the total compensation set aside for you. It’s not “free” money. It’s pretty easy to see in my industry, where contractors get a bump to cover the costs of both sides of FICA.

        1. Yeah. The vast majority of Americans pay a flat tax of 15.3% of their gross income into this Ponzi scheme. The “employer contribution” is smoke and mirrors.

      2. As a business owner currently of modest success (I’m young still, I’m still working up to my monacle factory!) almost ALL the money I’ve ever paid in taxes has been FICA BS. Sure I do pay thousands a year in actual income tax… But when I’m cutting 20 something thousand dollar checks to the man, the vast majority every year is FICA and not actual income taxes.

        Given that I will probably never see any of it back, it really pisses me off. If I was ONLY having to pay income tax it wouldn’t be bad. But the sheer amount of FICA has in fact made it very hard to save and invest into real investments outside of SS. Living in Seattle has been a huge burden with the cost of living and high as fuck local taxes too. Which is why I’m bailing.

        I suspect most people would find it a total breeze to save for retirement if FICA taxes didn’t exist. But the gov taking the exact amount that a responsible person needs to save right off the top somehow makes it very tough for most.

  3. This will screw up everybody’s plans, but it will be especially hard on lower-income Americans, who are more likely to depend entirely on the program during their later years.
    Your first mistake was trusting government to help you when you need it.

    Save for your future without counting social security. If you’re lucky, you get back what you paid into it over the years after you retire at 61 years and 9 months old. Of course the government will continue to move the age they want you to retire later and later.

    1. It won’t be especially hard on lower-income Americans — their payouts will be politically popular.
      It will be especially hard on those who actually saved money — their 401Ks and IRAs will be a big fat target to tax, and their SS payouts will be reduced or eliminated.

      1. It’s the classic fable of the Ants versus the Grasshopper. The Ants have such a large stockpile for the winter and the poor Grasshoppers are starving….

    2. 40% of retirees (roughly), rely entirely on SS for retirement income. 60% rely SS for at least half of their retirement.

      My father saved very well for retirement but ended up relying on SS for 100% of his income after the Great Recession wiped out his stocks. Consider this when offering up a 100% self-saved stock-based future. The Boomers and GenX outnumber the younger generations. If significant numbers of these retirees end up homeless, you’ll wish you’d come up with a better solution than trusting Wall Street.

  4. Happy Martin Luther King day, everybody!

    1. Happy Holidays!

      1. Happy “Guy Whose Ancestors Were Brought From Shithole Country [according to the p…y-grabber-in-chief and Racial Expert Donald Trump] By Force Yet They’re Not Good Enough To Come Voluntarily Because They’re Not Vikings” Day!

        Yay!

        1. Still your President!

        2. Still your President!

        3. They can leave the USA anytime they wish.

          I hear Africa is _____ this time of year.

          1. I hear Africa is _____ this time of year.

            I’m gonna go with “a shithole.”

        4. They’re lucky to be here! They’re the Africans with the highest standard of living in the world. If they hadn’t been brought here from their shithole countries they’d still be living in huts, or squalor that makes Detroit look like upper Manhattan.

          And as far as Trump and most other people, all we want is to only let in the PHDs from shithole countries… Not the illiterate peasant farmers. I don’t think that makes me too evil. If we can’t even employ all the poor black people we already have, what’s the use in importing more???

  5. That should have been a signal that the time had come to look at reform.

    That’s simple: either scrap the program and lower taxes or massively increase taxes on the middle class. The latter is how Europe finances its social safety net.

    Lavish social welfare spending financed by “taxing the rich and corporations” doesn’t work, however, because those entities tend to leave the country or stop working when taxes get too high.

    Of course, the libertarian preference would be “scrap the program”, but people keep saying that they want a “European style social welfare state”, and if they do, they need to pay for it.

  6. Veronique would have us believe that more government is the solution to the problem that it created?

    1. Veronique’s proposals sound much better than the current situation to me. What do you propose?

      1. Weening people off of government control, not giving them another government option (Universal Savings Accounts, for instance).

        I personally like Friedman’s solution:

        “What you should do, in my opinion, is to give every person who now has a claim on Social Security bonds equal to the value of his claim, and set him free. Let him save. Let him do what he wants with it. That would not add a dollar to the debt we now have; it would just convert an unfunded debt into a funded debt,” Friedman said.

        I think there’s a Youtube video I’ve seen in the past where he goes into much more detail, but I couldn’t find it off-hand.

        1. So what happens to old people who couldn’t accurately predict their lifespan and run out of money?

          1. I think it’s still reasonable to assume that there would be a public safety net like welfare that would provide for basic needs. In an ideal world the government stops doing the job that charities did decades ago before government became the safety net.

            What happens to those same people when the current Social Security fund becomes insolvent?

            When you advocate for government to be the solution, you’re advocating to put the lives of the elderly into the hands of people you loathe, like Trump. Don’t you get that?


            1. I think it’s still reasonable to assume that there would be a public safety net like welfare that would provide for basic needs.

              Any such system will fail if more people draw from the system that pay in. That’s just a basic fact. It makes people ‘feel bad’ that the Universe isn’t fair but you’ll need to blame god or nature for this basic fact.

              Feels don’t spend, man.

            2. Leo Kovalensky|1.15.18 @ 1:22PM|#
              “I think it’s still reasonable to assume that there would be a public safety net like welfare that would provide for basic needs.”

              This in answer to the question regarding didn’t predict their death correctly.
              I think there should be a place where all those who see this as a sympathetic condition should join together and empty their pockets to avoid stealing from the rest of us

              1. Maintaining the Welfare System as we know it today isn’t a long-term solution, as I allude to in my very next statement. I’m simply acknowledging the fact that you can’t pull the rug out from under people who have wrongly been promised multiple safety nets by the government. It’s not an ideal libertarian solution, but it’s a pragmatic solution.

                I would say that in practical terms there need to be cut-off ages in the system. If you’re within 3-5 years of retirement the system carries on as is. Beyond that you receive a bond as a way of the government buying you out of your SS claim. In reality the bond will probably deliver better returns than SS does today for many people.

                Welfare is an entirely separate issue. If somehow magically we could get through the more imminent SS mess, then I think after a few years of normalization other entitlements like Medicare need to be addressed. Then if all of this happens (it never will by the way) we move on to address Welfare, etc. But I don’t think it’s pragmatic to pull out all of the safety nets at once, nor would it have any chance of passing.

          2. He just told you. They would receive bonds.

            1. He’s asking about once they spent them and were broke, obviously. Try not to be dumber than Tony.

              1. It’s a stupid question though since the person in question received exactly what their claim on social security was. In other words, someone got what they paid into the program (at least) and so the assumption seems to be ‘what if someone received their lump sum value in social security and then spend every penny of it immediately’.

                Well, if you spend all your retirement savings in one sitting I’d say you deserve what you get but you also got exactly what you value since it was you that chose what to spend your savings on.

                Should I weep over a 70 year old spending their life savings on, say, a POG collection? Maybe, but honestly I won’t. That was their choice, and if they didn’t know what they were doing why do they still have their own power of attorney one might ask. I certainly shouldn’t be on the hook for what other individuals choose to do with their own money.

                1. “It’s a stupid question though since the person in question received exactly what their claim on social security was.”
                  If you retire at 65 and drop dead at 65 and 3 months your claim is 3 months worth of monthly payments.. If you retire at 65 and drop dead at 100, your claim is 35 years worth of monthly payments. SS is not an asset. What your 15.3% bought you was a monthly check until you die. Nothing else.

                  1. “SS is not an asset. What your 15.3% bought you was a monthly check until you die. Nothing else.”

                    But that’s exactly how SS was sold. Your money buys federal savings bonds that are, of course, an asset. In reality it’s just another way for the government to get money in a giant Ponzi scheme by buying their own debt with your retirement savings to pay for pet projects.

                    Further reading

                2. In general, this is not a society that is willing to allow people to starve in the streets, no matter how screwed up their previous decisions were. It will never happen, but to be pragmatic I can imagine some “communities” with minimal housing (not unlike prison blocks, but without the bars and barbed wire) set aside for the indigent. Community kitchens and bathrooms. Basically, everything cheap and basic enough to survive. Most of what we think of a necessities today are really luxuries. This would never last, of course. Living standards would be increased beyond what many people who would be working for a living had. It’s not hard to imagine what would follow.

          3. “So what happens to old people who couldn’t accurately predict their lifespan and run out of money?”

            You mean, people will have to look out for and take care of themselves?!?!?! What kind of Anti- Communist rhetoric is this?!?!?

            1. People are taking care of themselves by voting in representatives to create and maintain programs that fund the basic needs of the old. It’s transparent, fair, and effective. You just don’t like it because you’re a dogmatist. But your dogma is not strong enough on its merits to support going to a pre-civilized state where old people didn’t have such a safety net.

              1. In other words, yes, people are ‘taking care of themselves’ by voting themselves money from other people’s savings accounts. So brave.

                Fact: The ‘old’ population has the most money. If you’re 70 and have no money you have failed for 70 years. There is some carve out of that population who did nothing wrong and are the victim of circumstance but that in no way justifies wide spread looting.

                1. And here it is again. There’s no such thing as being old and poor! And there wouldn’t be in the absence of SS! (And if you are old and poor, you deserve to die.)

                  The fact you’re so feebly trying to cite is that older people are wealthier on average. But all that means is that they own more houses. Which, I suppose, if it came down to it, they could burn for firewood.


                  1. And here it is again. There’s no such thing as being old and poor! And there wouldn’t be in the absence of SS!


                    There is some carve out of that population who did nothing wrong and are the victim of circumstance but that in no way justifies wide spread looting.

                    Too stupid to read, I see.

                2. Actually old people have the highest net worth , not money, mostly because their mortgages are paid off.

                  1. That’s merely as a group and on average. There are many “old people” who have nothing, so this is pretty ridiculous to bring up.

              2. No, people are voting to give other people’s money to themselves. That’s it.

                Otherwise they’d save up for their own retirement; not being able to predict your lifespan is a moronic excuse. You can just purchase an annuity then.

                What you’re saying is that some people are too dumb too save properly for retirement, but smart enough to know that’s a bad idea, so they vote to have someone force them to save via social security?

                If that’s the case, let’s make it optional at least: let people who would prefer to save and invest privately be exempt from having to contribute.

          4. You lived too long. Definitely because you were too stupid to save enough or die when your costs got too high.

            Another reason to have no estate taxes. People could save as much as they could and any left over when they die goes to relatives to help for their retirement. And so on and so on.

          5. Tony|1.15.18 @ 12:56PM|#
            “So what happens to old people who couldn’t accurately predict their lifespan and run out of money?”

            So what happens if you find a brain one day?
            Regarding your question, you disingenuous twit, save as if you’re going to live to be a hundred.

            1. Says the admitted welfare queen himself

              1. Tony|1.15.18 @ 6:40PM|#
                “Says the admitted welfare queen himself”

                Nope, you have me confused with someone else, asshole.

          6. So what happens to old people who couldn’t accurately predict their lifespan and run out of money?

            There was a time when people were smart enough to live off the return on their retirement investment, not on the principal.

          7. First of all, people will get far more accurate about predicting their lifespans…

            Second, private charity will step up big time and pick up the slack. Stefan Molyneux rightly points out that private charity in Europe is largely extinct because everyone expects the gov’ts of Europe to take care of the poor and everyone feels that because they are already heavily taxed, they do not need to give to charity.
            He also rightly points out that the US is quite generous now and that in the US’ history, private charity took care of the indigent before we had any social safety nets. There is no reason that we couldn’t return to such a state.

          8. First of all, people will get far more accurate about predicting their lifespans…

            Second, private charity will step up big time and pick up the slack. Stefan Molyneux rightly points out that private charity in Europe is largely extinct because everyone expects the gov’ts of Europe to take care of the poor and everyone feels that because they are already heavily taxed, they do not need to give to charity.
            He also rightly points out that the US is quite generous now and that in the US’ history, private charity took care of the indigent before we had any social safety nets. There is no reason that we couldn’t return to such a state.

  7. Wow, are we actually going to get a break from all the whitey hatin’ in the spirit of togetherness on this Martin Luther King Day?

    1. Happy Martin Luther King day to you, DD.

      Phrased alternatively, Happy Academic Fraud, Communist, Progressive, Socialist, Womanizing Day!

      Of course, if one merely adverts to the facts that King plagiarized major portions of his dissertation and that he had a propensity to cheat on his wife with Caucasian chicks, one is branded as racist.

      1. Well, good thing he’s not being celebrated for being an academic or an anti-communist or a faithful husband. So why bring that shit up?

        1. No, the question is, why would one not bring that shit up?

          1. No, the question is, why wouldn’t one not bring that shit up?

            1. No, the unquestion isn’t, why wouldn’t none not bring that unshit down?

              minimize the positive

      2. I can image that in several decades, Santa Claus and MLK will morph and combine into some strange multi-ethnic entity with a tradition of giving kids trigger warnings every January.

        1. My god, Invader Zim was right!

  8. Lynx?
    ‘MLK-day TDS Edition’:

    “Hollywood Goes Ballistic on Trump Over Hawaii Missile Scare: ‘Load of Bull?’
    President was enjoying a game of golf at the time of the incident”
    […]
    “The short-lived Hawaii missile crisis was triggered after someone “pushed the wrong button” during an employee shift change, according to Gov. David Ige. Those not fond of Trump or his policies already had their dander raised from Thursday, when The New York Times published a damning report saying that the president had described certain nations as “shithole countries.” And the sustained tension had people directing anger squarely at the POTUS once again.”
    http://www.sfgate.com/entertai…..496695.php

    Note this is a heavily D state, where an incompetent employee could press one button without confirmation and bring the state to a halt. But it’s Trump’s fault because he was playing golf and may (or may not, it turns out) have used a swear-word in a private conversation sometime earlier.
    You might hope people like this were capable of embarrassment. You would be wrong.

    1. Absolutely Trump’s fault.
      He personally hired the incompetent button pusher.
      He personally elected all democrats to state government for decades.
      He personally decided to implement a warning system so people could take cover from an attack that taking cover from is impossible.
      He personally kept the other incompetent employees from realizing the error for 18 minutes.
      He personally prevented the state government from correcting the error for over half an hour.
      He personally instructed each idiot on how to panic.
      He personally launched the missile from North Korea that was not launched.

    2. If San Francisco ever receives an “incoming missile alert”, hopefully it won’t be because some minimum-wage bobblehead accidentally sent it out.

      1. But it will be.
        I have a plan. It’s called “reality” and I hope Tony hunkers down in his Trump-shelter and dies.

  9. They’ve got a solution for that – eliminate the contribution cap. I’m sure they’ll have no problem eliminating the benefit cap as well…

    1. I think that is some soak the rich, feed the poor, feel good crap that won’t make much difference. The income cap for SS taxes is over 128K for 2018. Only a few percent of the population earns over 128k per year.

      1. I have not bothered to check the numbers, but I’m guessing that this, like the ‘tax the rich’ schemes assumes there are millions of people not paying taxes because they are too rich, rather than the fact that there are millions of people not paying taxes because they are too poor.

      2. Yep, and it chaps their ass that they can’t get 12.4% of every dollar earned and have it funneled into Social Security.

        Even if the benefit cap was lifted at some point, I’m highly doubtful that they would support the contribution:benefit ratios of today and would play the ‘fairness’ card when they guy who paid 12.4% on $3,000,000 got more than than they guy who paid 12.4% on $30,000.

  10. Under current projections, the make-believe assets in the fund will only be enough to pay full benefits until 2034.

    Since the assets are make-believe, nothing is going to happen when they ‘run out’. Right now, the U.S. government is borrowing the money to cover the trust fund redemptions. After 2034 (or whenever), the government will borrow the same amount of money for the same purpose only without the kabuki theater of the trust fund. Of course, at some point the U.S. debt-to-gdp ratio may get so high that nobody will want to buy our bonds. But that disaster scenario could happen before or after the trust fund funny money is gone. Nothing in particular will change in 2034.

    1. The assets are real.
      Just as real as any series H government bonds, or any other US bonds in your 401K.
      The law requires the excess funds be invested. They require the investments be fail proof. Only US bonds meet those criteria.
      So all that is required is to strip the cap off the payroll tax, and slowly raise the ‘full retirement age’ to again reflect the original gap in time from retirement to death.
      Sadly that requires even more balls that Nancy Pelosi has.

      1. If I give you a check for $100, that increases your assets by $100

        If I give myself a check for $100, that does nothing to my assets

        It’s not about whether the bonds are real or not, it’s that you can’t store value in bonds you issued to yourself.

        1. Except that this isn’t at all how fiat currency works for an entity that literally creates currency, but nice misunderstand of how government finance works.

      2. The necessary fixes (reducing or delaying benefits, increasing taxes … or borrowing still more money) are exactly the same with or without the trust fund. The government has to A) come up with the money to cover the trust fund redemptions (while there are still bonds to be redeemed), and B) come up with exactly the same money to cover the shortfall of payroll taxes vs revenues once the trust fund is exhausted. Real or not, the trust fund has no effect. Either way, Congress has to come up with the money to cover the difference between revenues and payments.

  11. Unfortunately, the more you save, the more they will cut your Social Security benefits in the name of social justice. So get your savings off the grid.

  12. You realize they’re just going to print money to make up the difference right? Old people are the most reliable voting demographic and you better believe that if current politicians aren’t willing to “keep Americas promise” they’ll vote in someone who will.

    I find it funny how this article suggests raising caps on various savings and investment vehicles as if doubling the contribution limit will get the average american to suddenly start saving, but there’s already tons of good ways to save right now and people just don’t use them. The overwhelming majority (nearly 80%) of Americans have access to a 401k, for example, but only about half of them have ever put a single penny into it. Of the fraction that have at some point or another saved anything at all the vast majority save such an insignificant amount as to be essentially worthless. You can’t retire by saving a dollar or two per paycheck. Doubling the caps doesn’t help these people.

    Nothing can. Not even the government.

    And that’s really the issue here isn’t it? The government meddled in the retirement market and created a bunch of perverse incentives and unfunded liabilities and taught five generations of americans that you don’t need to save money to retire. Uncle Sam will take care of you. It turns out that the government isn’t very good at saving money: quelle surprise.

    But hey Reason, I’m sure this next government savings program will work out much better and fix all the problems with the old one, right?

  13. The first time I read about Australia’s equivalent I about shit myself because they’re pretty lefty on a lot of stuff. It’s basically the idea I had years back IF one wanted to make a sane compromise with the proggies, which I was amazed nobody had tried… Except people had tried it. In short they force everybody to save, but it’s actually invested in real things, so they make real returns on their investment… Unlike investing in essentially no yield after inflation US treasuries.

    It has in fact sharply increased the net worth of people down there too. Everybody knows the lower classes usually don’t have the self control to save, because it is genuinely painful when you make little money. But forcing them to do it, and actually investing it in things that make decent returns has done good things in terms of net worth. As far as overbearing government programs go it’s not a bad one.

    If we had done the same things decades ago all these people scraping by on barely over a grand a month from SS would probably have net worths of several hundred thousand dollars or more. I mean even government employee pensions aren’t invested as shitty as SS is, so why should SS? It’s just a total shit show.

    1. But you would be making Wall Street rich? And what happens when the stock market crashes on the day you retire?
      And income equality? And not knowing anything about how investments are supposed to work? And, and, you don’t expect me to know how to put gas in my auto, how do you expect me to know the difference between a bond and a stock?

      /sarc

      1. “And what happens when the stock market crashes on the day you retire?”

        Remember 2008, and how everyone’s retirement was now down the toilet?
        I’m sure there were useful idiots who bought Krugman’s “Great Unraveling” predictions and sold at the bottom. Ha and ha!
        He’s good at that, as you might have noticed the night of 11/9/16.

        1. I’m about to lock in all the gains I have racked up in the last 7 years in my Simple IRA and go real conservative. Would you characterize me as a useful idiot for doing so?

          1. Gee, Mike, maybe you ought to learn to read:
            “…and sold at the bottom.”
            And you’re not useful.

          2. Timing the market? You must be a triple – extra – double – squared genius!

            In the far future the corporations will still be around. The dollar? Maybe, but it won’t be worth much.

        2. I don’t trust the stock market as far as I can throw it… I prefer investments I have personal control over. But someday in the future I will probably start dabbling. When I do I will likely only buy in during sharp downturns, hold it for a few years into the recovery, and then sell out and invest back into something I control. You might miss out on some gains, but the sharpness of ups and downs in stocks during these things is huge.

          I have never understood how people can be so stupid as to sell during downturns, when it will obviously come back around sooner or later. People with margin loans are the only ones who have any excuse for doing so. Everybody else is just being a plain old retard.

      2. Creech, that’s basically their thinking.

        With all the ups and downs of the stock market, it still beats zero actual return guvmint bonds! If they wanted a horrible compromise they could always go 50% market 50% guvmint bonds or something. ANYTHING would be better than the horseshit they have now.

        Literally just switching 25% or 50% of funds over to market investments would probably make SS solvent instantly because they’d be getting 7-10% consistent returns over the long haul. But that OBVIOUS solution is somehow impossible to consider. I don’t like the idea of the US government owning trillions of dollars in stocks, but they already do from their own pension funds, so I don’t see where it’s going to change anything much other than making the program solvent.

        I think opt in/opt out is the best way to go. Let me opt out, and pussy progs can stay opted in, and both of us will be happy. Combine that with throwing even a portion onto the market and the SS problem is solved instantly and everybody will be happy. It shouldn’t be hard to do this, I don’t know WTF is wrong with politicians.

  14. Can’t we just, I dunno, kick the can down the road or something? It’s always worked before.

  15. In the words of our government betters, Social Security is a “compact between generations”.

    The Greatest Generation — who paid at most $45/year in FICA taxes in 1950 — knew that they could rely on the Baby Boomers to fund their inflation-adjusted social security benefits, which can be as high as $31,668/year today.

    I don’t think the Boomers should be quite as confident of the Millennials. I don’t think they’re quite as trusting of government propaganda, and FDR’s scam has become more obvious.

    1. The Boomers existed ina post war vacuum for labor and technology. They then proceeded to spend every dime they could get their hands on and borrow 3 dimes for every one they spent. It appeared to generate this massive economy that they will now walk away from all the while demanding that they’re owed more. Because FYTW! Oh.. and everyone else is just lazy and incompetent.

    2. Boomers started questioning Social Security back in the 70s. Every time in the 80s or the 90s when anyone proposed any change towards an asset/equity/personal ownership type system (like Chile and Australia have) “The Greatest Generation” (the biggest bunch of Communist government titsucking parasites in the nation’s history*) got Democrat politicians to end any such unmutual talk.

      *Ah, I suppose we owe it to them, after all the men kicked Hitler’s and Tojo’s asses and the women riveted airplanes and welded Liberty ships.

      1. Bingo.

        1. Trapped you, you’re nothing but a Boomer apologist like me. 🙂

          I know I can’t be the only one who listened to the lecture in Econ 101 in 1965 when Social Security was explained thought “how in the fuck can this work?”

  16. Oh yes, with those ultra-low interest rates and the government agenda of taxing absolutely every transaction, I’ll get right on that whole saving thing..

    1. There are mutual funds that you can get into for as little as $3000 beginning investment ($1000 for an IRA).

      1. I know Vanguard has some. I’m sure others do.

  17. “social security” funding debacle is on paper, serving as emotional distraction to those who are fooled into thinking the fictions of statutes, formalities and constitutions are reality. SS will be paid out of the general pool of funds controlled by the political class, as it always has been.

    1. SS will be paid out of the general pool of funds controlled by the political class, as it always has been.

      Yes, but that political class is scared shitless that they can’t deliver the kinds of payouts they need to deliver to their voters in order to receive continued support. And so they invent this fiction that they need to get even more money now, and the people they take it from really didn’t deserve it in the first place.

      It’s really just a more moderate form of what the Nazis did: they also promised old age pensions and free educations paid for by the government, and to get it, they promised to go after “the wealthy Jews” and their supposedly ill-gotten riches.

  18. There has been one and only one politician in recent years who dared to suggest that Social Security benefits could be cut.

    His name was Francis Underwood.

    Entitlements will not be cut in nominal terms — no poltiician has the genitals for it. They’ll instead be cut in real terms by massive debasing of the currency.

    Anyone remember Quantitative Easing? Or is two years ago too far back?

    1. This is why i laugh when people are yelling “SELL!” Ok.. and then what? Hold the USD or a BOND? LOL…. what the market climb to astronomical highs as the pension funds chase returns and the USD become toilet paper. It’s not about the companies or the economy, it’s about fighting inflation.

    2. His name was Francis Underwood.

      And look what happened to him.

  19. Current estimates are that pay as you go upon the trust fund running out of treasuries and cash will reduce payouts between 23% and 26% from those currently. Thus the expectation is that pay go will result in payments of between 74% and 77% of current levels.

    If you think your world is totally screwed because SS payments will be reduced by between 23% and 26% from current levels, you have a far, far, far, far, far worse problem to deal with.

    1. I assume that as a saver my benefits will be cut by half or more so that old poor votes can be purchased. Even half reduction won’t break me, it’ll just suck on GPs.

      1. Means testing for SS and Medicare would be a good thing.

        1. Medicare already is means tested to some extent. High income geezers pay $1000s more in premiums than low and middle income geezers.

        2. SS and Medicare are effectively already means tested: low income workers receive a much higher rate of return than high income workers (though both rates are poor).

          They aren’t means tested based on savings or wealth because assessing someone’s wealth is very hard and because that would discourage personal savings even more.

          1. Reasonably affluent geezers also pay income taxes on SS benefits whereas they are tax-free for low and moderate income geezers.

            All SS benefits were originally income tax-free because FICA “contributions” are “after-tax” in the same sense that a Roth IRA contribution is “after-tax”. In fact, however, FICA “contributions” are really just double-taxed income.

            The US welfare state is really a Ponzi scam. However, since it’s run by a government whose currency is the world’s reserve currency, the US can run it for longer than the original Ponzi or a Madoff.

            1. I think that’s “Ponzi scheme”, although “scam” works, too.

    2. Payouts won’t be reduced at all (unless a means test is added, which penalizes those who did actually save).
      Payroll taxes will be hiked, either the rate or the income ceiling, or both.

    3. Those numbers don’t even take into account the lengthening life spans… or even the more scary prospect of immortality. Even if immortality or greatly lengthened life spans is 20 or 30 years away, which isn’t really THAT far out there, it’s going to crush government programs.

      1. Lengthening life spans is not an issue. Over the past two years, mortality rates have led to a decrease in average life spans in the United States. I have had this discussion over on seeking alpha. I discussed with a CFA who thought you should plan for a 40 year minimum retirement. I asked him if he plans to build a portfolio with an average return rate in excess of 14% over a 20 year period. He indicated that planning for that type of portfolio would be idiotic as the likelihood of it happening was so low. I then pointed out that living past 40 years upon reaching age 65 had the same chance of occurring as living more than 40 years upon reaching age 65.

        Needless to say that ended the conversation.

        1. last sentence should be having a 20 year 14% plus return portfolio is as likely as occuring as living 40 years upon reaching age 65.

  20. Why not have the SSA start mining bitcoin or some other crypto-currency. Then in about 10 years it can start paying out in said currency. Bitcoin is soon going to $100k+ right? That’s what the cashier at a grocery store told me and he’s all in.

    1. Until FaceBookCoin gets released, then MySpaceCoin goes to zero.

      1. Just wait until TinderCoin is released.

        1. I’m waiting for SnapChatCoin, it disappears the second you stop looking at it.

  21. The libertarian/conservative establishment does not understand payroll taxes. There is no tax on payrolls that are for occupations of common right not paid from the US Treasury. All the taxes that ordinary workers are told to pay are excise taxes. Per the Supreme Court, there is no un-apportioned direct tax on your payroll receipts.
    Once you establish that payroll taxes are excise taxes, you have to ask what are excise taxes. Excise taxes are laid on privileges. An excise tax is a privilege tax. Working for a living to support yourself and family is not a privilege, but a right.
    The specific excise taxes that are now called income and payroll taxes are classical liberal public office duties. Veronique and the Mercatus Center have never heard of such a tax. Since they have never heard of the tax, they cannot understand it. Others who do not have PhD’s have researched the law and history of taxation and understand what a public office duty tax is.
    One person in particular, Pete Hendrickson, a libertarian who lives in a Detroit suburb, has discovered an administrative way to obtain full refunds of all withheld income and payroll taxes, state and federal, since 2003. Thousands of limited government folks have used his methodology to obtain millions in refunds. Sadly, the libertarian conservative establishment believes the politicians are the solution, not individual action to demand choice in taxation. see http://www.losthorizons.com

    1. Thanks for that.

    2. Yeah, sure. Americans voluntarily fill out Form 1040 and send in their check. Because if they don’t the IRS will steal their property and kidnap them.

    3. Although Pete Hendrickson’s fabulous theories didn’t keep him out of prison. Other than that, brilliant.

  22. Fixing SS is one of the easiest things a competent and functioning government could achieve. But you don’t actually want to see it fixed, of course. Do you ever get tired of the Norquist bullshit? Do you really think his “lie to everyone about the gravity of the crisis in order to force cuts my ideology demands” crap is sufficient to counter the simplicity of the solution combined with the sheer political will in favor of SS? You gotta get new material man.

    1. According to the latest projections, the Social Security Trust Fund

      I’m already suspicious of this ‘simple, easy fix’ because the author of the article actually believes there’s a social security ‘trust fund’.

      According to the latest projections, the Social Security Trust Fund

    2. “But you don’t actually want to see it fixed, of course.”

      Not really. I’d like to see it phased out. And not really because of any Norquist-ian “drown government in the bathtub”. It’s because I want individuals to be in charge of their own retirement portfolios, SO THAT THEY MAKE MORE MONEY. SS has a terrible rate of return, threats of cutting off benefits are constantly used to extort concessions from reformers, and moreover, if a recipient dies before exhausting the benefits arising even from the “principal” paid into the system, all that money is just confiscated by the state.

      SS is a wealth redistribution scheme, not a wealth building scheme like normal investments are. I want retirement plans to be wealth BUILDING schemes. Don’t you?

      1. t’s because I want individuals to be in charge of their own retirement portfolios, SO THAT THEY MAKE MORE MONEY. SS has a terrible rate of return

        As do most conservative, stable savings options. This is a social insurance program–a floor on the level of misery society is permitting for the old and poor. And you’re right about it being structured as a transfer from the young to the old. It’s not meant, and was never meant, to be an investment scheme. People can still invest, and they can do so knowing that they won’t have to go bankrupt paying for completely unpredictable expenses that come with being old or having old relatives. Such stability, along with not having the old dying from poverty en masse, is arguably a bigger boon for the economy even than transferring SS funds to the stock market might be. Not that this is even the point.

        1. “This is a social insurance program–a floor on the level of misery society is permitting for the old and poor.”

          If you want a social insurance program, then that is called welfare. We don’t need a separate program called Social Security for that.

          I would argue that in the minds of most people, Social Security is viewed as a type of pension program, separate from ordinary means-tested welfare programs. Heck, most financial advisors will include SS as a part of “retirement income” when planning for retirement.

          So let me offer this compromise to you:

          1. Expand traditional welfare to include elderly retirees, with no work requirements or things like that. But it is means-tested, as welfare should be.
          2. Phase out the Social Security program over time. So people keep more of their own money, for which they can use to save and invest for their own retirement.

          So your concerns over the elderly poor are met, as they will have welfare. But, the fake pension scheme known as Social Security will also end, so that everyone can save more for their own retirements, making more money for themselves and thus being less likely to need welfare in retirement.

          Sound good?

          1. No. I don’t favor schemes meant to serve only an ideological purpose and not the well-being of humans. Sorry.

            Means-testing SS is an idea cooked up solely in order to turn it into a welfare program (i.e., for the poors), which makes it easier to kill by Norquist types. Its success and political armor have largely depended on its being perceived as not a handout to the poors but as a fair and simple transfer scheme to alleviate old-age poverty.

            Old-age poverty being a problem in any society that will only become old-age misery once we start pretending that every single person has the smarts and wherewithal, not to mention fortune-telling ability, to adequately plan for every eventuality of old age.

            Everything you propose can be added on to the current scheme without having to remove the floor.

            1. I agree that SS enjoys popular support because it is sold as being something other than what it really is.

              If a retiree has private retirement savings that can fully cover his/her own expenses, why should that person be receiving a SS check, if, as you point out, its purpose is to alleviate old-age poverty? If a retiree is not in poverty, why should that person receive a SS check?

              1. As I said, it’s like insurance. They’ve been paying in their whole lives on the bet that they’ll live long enough to get payments out. Denying those payments would be unfair.

                1. Insurance only pays out if there is a claim. If SS is “poverty insurance”, and the payor is not in poverty, what is the claim exactly for which insurance is supposed to pay?

            2. You didn’t seem to address the issue that Chemjeff was discussing: Why are the Kochs and George Soros getting SS payments when they clearly don’t need them?

              Why don’t we means-test SS so wealthier retired persons get either less or none at all, and only the poor receive it. Doesn’t that satisfy your desire to have a safety net for the poor? Or does paying out SS to the wealthiest Americans keep a government program in place for the mere sake of doing so, ie power?

              1. Anyone deserves their money back when it is taken from you at gunpoint. And since the kochs and soros paid more than most, they should get their money back.

                SS is not insolvent because rich people get theirs too.

                It is insolvent like any other massive gov’t boondoggle. That is because of misallocation of capital, looting, and unforeseen consequences.
                There should be no safety net because the promises allotted can never be adequately accounted for nor can bureaucrats tell the future.

                1. Anyone deserves their money back when it is taken from you at gunpoint.

                  Well, yeah, but that’s a larger point about taxes.

                  SS is not insolvent because rich people get theirs too.

                  I’m not really suggesting it is, but I am suggesting that means-testing SS would be an important part of restructuring it.

                  That is because of misallocation of capital, looting, and unforeseen consequences.

                  Kind of. It’s a structure problem to be sure. Again, there’s no trust fund as people like to say, so there is no functional limit on how much SS can pay out compared to what it takes in. There is no functional ‘limit’ to SS, and insolvency is really a chimera to begin with. As long as the government can print money, SS payments will always be made. Their value may be zero, but the payments can go on forever until they soak up 100% of GDP.

              2. How much money would means-testing SS save?

                1. How much money would means-testing SS save?

                  It’s hard to say, but a redefinition of the recipients in general would probably save a lot. If we re-purposed SS to only be for retired persons– probably a lot.

                  Here is a table which might help one figure out how much we’d save if we removed people under 65 who currently receive SS payments.

                  Unfortunately, the explosive growth in SS payments to non-retired persons was a direct result of the crash of 2008 and corruption in the systems which identify people as ‘disabled’. There are no easy answers and anyone who says “this one weird trick will fix social security” is wrong, unless that one weird trick is to massively increase taxes and or cut benefits.

                  1. See you changed the subject. The SSA estimated that changing to a means-tested system wouldn’t even change the date of insolvency.

                    Worse, it changes the nature of the program to something it was never meant to be–and into a very arguably less libertarian-friendly program (welfare for the poor). Currently the government is not prodding around in people’s lives to determine if they deserve social security checks. You want to change the system so that it does?

                    1. Currently the government is not prodding around in people’s lives to determine if they deserve social security checks. You want to change the system so that it does?

                      That’s the problem though, SS is no longer a system for elderly people to have a little stable nest egg, it’s for people with various types of disabilities who’ve never paid into it and never will. Was SS originally sold to the American people as that?

                      I’m essentially willing to admit that a major component of it is welfare, so let’s just start calling it what it is and shuck the wealthy people from the rolls.

                  2. The crash of 2008 certainly did add to the Social Security rolls as you have stated. But I would add another cause of the exploding SS payments. The Clinton era welfare reforms. Prior to those reforms; an unwed mother could collect ADC benefits from the time a child was born until the time the child turned 18. After the reforms; there was a time limit. Perhaps 5 years, but I think it varies from state to state. Many welfare mothers, faced with the loss of their welfare benefits, just got their children diagnosed with some condition that entitles them to a monthly Social Security check.

            3. No. I don’t favor schemes meant to serve only an ideological purpose and not the well-being of humans. Sorry.

              Says the person that fully buys into Climate Change and believes that a warmer environment is somehow worse for humanity.

              Sorry, I don’t believe you when you say this. It is demonstrably not true based upon your prior commentary.

              1. I buy into what current science says (provisionally).

                You buy into the world’s most outlandish conspiracy theory since flat earthers, namely that all of current science is in on a conspiracy to invent a fake climate crisis for motives unknown. To sell solar panels for Al Gore or whatever.

                1. Tony|1.15.18 @ 5:08PM|#
                  “I buy into what current science says (provisionally).”

                  You keep repeating that; it’s a shame you have no idea what it means. Nor that it is largely irrelevant to the conversation.

                  1. Science is irrelevant to a conversation about climate change? Well your views suddenly make more sense.

                    1. Tony|1.15.18 @ 6:49PM|#
                      “Science is irrelevant to a conversation about climate change?”

                      *WOOOSH!*
                      Yep, keep it up; one idiotic statement after the other. You’re good at that.

                2. Actually, my point was simply that if global warming or climate change or whatever you want to call it was true that it would actually be a net benefit which isn’t really that controversial even among climatologists that believe we’re driving the empirical increase in temperature.

                  But you’re so stupid that you don’t understand one bit of it, which was rather the point of my comment. You standing on ‘science’ is amusing since you really, really don’t understand any of it at all.

            4. “Means-testing SS is an idea cooked up solely in order to turn it into a welfare program (i.e., for the poors)”

              Social security has been a welfare program all along.

              The benefit formula is akin to a steeply progressive income tax. It gives poor people a significantly higher benefit relative to the FICA tax they pay in than it does for higher income people. And for higher income people if they have more than a certain threshold of of other income in retirement (that isn’t annually adjusted for inflation), the government takes part of their social security benefit back by making up to 85% taxable. And for good measure if they are high income, they have to pay a higher premium amount for Medicare which is deducted from their Social Security benefit so even more it is taken back by the government.

              There is plenty of welfare built into the program as it is.

            5. No. I don’t favor schemes meant to serve only an ideological purpose and not the well-being of humans.

              Math doesn’t give a shit about well-being.

              1. It is important only that they are *meant* to serve the “well being of humans.” That they fail to do so, is not a bug, but a feature.

          2. SS was marketed as a savings program, to overcome the pride people used to have about not being on the government dole. But no one has that pride any more. So just do away with SS and support the indigent regardless of age. Why tax young working people who can’t afford it, to support wealthy retirees living a life of leisure?

            1. Indeed. It’s always amusing to watch people argue for transfer payments to the wealthiest demographic of American’s from the poorest demographic of American’s by the left.

            2. On what planet do SS checks afford a life of leisure?

              Why are you OK subverting your principles in favor of a welfare program? People have to be taxed for that too.

              1. Well, I have a sister who receives SS checks, her husband makes a healthy income that supports a family of four with a very comfortable lifestyle. She could work, and even did for a while briefly, then quit because her benefits were going to get cut off.

                Does the SS check afford her a life of ‘liesure’? Yes, in a sense it does. It’s much easier to hobble down to the mailbox and pick up a check than it is to sit in a cubicle all day.

            3. So just do away with SS and support the indigent regardless of age.

              If there was any confidence that politicians would keep such a promise, we wouldn’t have gotten Social Security to start with.

        2. Also.

          The estimated rate of return from Social Security (if it were an investment, which it isn’t) is somewhere between 2% and 6.5%. A person’s actual rate of return depends on the individual, because this complex formula is used to calculate benefits. But the high end of that range is for lower-income workers, the lower-end of that range is for higher-income workers.

          If you pick a government bond index fund – you can’t get much safer than that, really – the annual rate of return over the past 10 years is around 6%.

          So, WORST CASE, the ultra-conservative bond fund makes as much money as the high-end estimate for SS returns.

        3. Furthermore.

          The Social Security program, as currently implemented, is racially unjust.

          Blacks have a life expectancy lower than whites, for a large variety of reasons. And if a black person dies before retirement – which he/she is more likely to do, statistically – then the government keeps all of that SS money that the person would have been able to claim as a benefit had that person been able to retire. Whites live longer, and so – statistically – they are more likely to live to retirement and collect those benefits. So, statistically, SS is a wealth redistribution scheme from blacks who die early, to whites who live longer.

          1. Don’t forget those damn Asians! They practically never die! And look like they’re 25 until they’re pushing 70 too!!!

        4. Finally. (for now.)

          The Social Security program, as currently conceived, perpetuates wealth inequality.

          Because retirees do not own the benefits to which they believe they are entitled, they cannot pass on any unused benefits to their heirs upon their deaths. So throughout their working lives, when individuals could have been setting money aside for their retirement, that they actually own, to be bequested to their heirs, thereby building up slowly over time the wealth of their family, instead that money is paid in taxes, to the state, which then decides to spend it on current retirees for current consumption. So, over time, those who started rich get richer because they have plenty of excess income to invest for the sake of their heirs, and those who started poor struggle harder to get richer, because they have very little income to invest and have to pay so much of it to the state in taxes.

          If you want to cut down on wealth inequality, letting people keep more of their own money, to invest and bequest to their heirs, is the best way to do it.

          1. I completely agree that we should make the SS tax more progressive.

            1. A 95% surtax on the entertainment industry would bring in more money than an across the board increase in social security taxes.

            2. Because nothing will improve our country’s low savings rate by further punishing saving and rewarding not saving.

            3. The payouts are somewhat progressive. Retiring at 67 gives you more than retiring at 62, but the increase is not linear. I expect one thing that will be done is to reduce the top payouts of SS since this has actually already been done before.

          2. And inheritability is, I believe, a thing in the Australian model which invests privately. It is very much true that it screws poor people by not being transferable to their heirs.

    3. This is what you call “throwing good money after bad”. Over its entire lifetime social security has proven to be, AT VERY BEST, a grossly under performing investment with rock-bottom returns and, at its worst, an insolvent boondoggle bordering on ponzi scheme.

      I don’t think anyone seriously contends that SS was designed maliciously. It was made with the best of intentions and for 80 years managed by some of the brightest and most compassionate people our nation can muster. However, no amount of finesse or good intentions can change the fact that when it’s working as intended it’s a bad deal and when it’s not it’s a scam. Sure, we could raise taxes and make it solvent, but it doesn’t fix the problem. It only tacitly encourages the continued waste.

      1. I think there needs to be “private” savings account, but run by the government. Each person eligible for SS gets and account. The government puts in a certain amount to each account. The contents of that account is used to pay SS to retirees. This may not be much different that is is now. One difference would be that the worker’s estate gets the contents of that account upon the death of the worker. The main problem with private accounts is that they would not perform the same based largely on how good or lucky the account holder was in managing the account. Having the government “manage” the account could also be optional.

    4. Fixing SS is one of the easiest things a competent and functioning government could achieve.

      What you propose doesn’t “fix” Social Security, it makes the return on investment even poorer, for both rich and poor.

      And while your “screw high income earners” approach may seem appealing if you are at the low end of the income distribution, it’s not going to work: you’re not going to get much new revenue out of big new tax increases on high income earners.

      1. Also, the ultimate oxymoron

        “a competent and functioning government”

    5. According to Tony, the “one of the easiest things” for a “competent and functioning government” is to increase tax rates by 32% and to apply that new, higher tax rate on all income.

      Easy peasy.

      1. I said in a theoretical universe in which Republicans and their stupid plutocratic agenda didn’t exist. Or something like that.

        1. Dude, not many people will be aboard the plan laid out in the CNBC article. People theoretically support tax hikes and wage increases until the cost is spelled out for them.

          The CNBC’s plan involves increasing taxes without actually increasing benefits for those who actually pay more, which they acknowledge will be a problem. And there’s no guarantee these people won’t automate or expand overseas to dodge these taxes. Many workers might be dropped to freelance status.

        2. Where plutocracy is defined as any system that doesn’t tax at least 70% of all income?

          The correct term for that is ‘not communist.’

        3. That “new man” that Marx was on about…

    6. Toady, I have posted many times here at H&R that any country can have Swedish levels of social benefits if only they accept Swedish levels of taxation. The only problem is that even the Swedes don’t accept Swedish levels of taxation.

      The original accept Swedish welfare state was based on a country where everyone was Swedish and everyone was Lutheran.

      1. It’s that funny thing that seems to happen over and over… The wealth created by a virtuous and industrious society leads to the call for welfare. Once welfare is in place it erodes the incentive to work, thus making the society less productive. The less productive society can now no longer support the welfare payments. Rinse and repeat.

        Studies in either Sweden or Norway or whatever have showed the number of people that think it is morally acceptable to accept welfare payments have gone through the roof since the early 1980s. Back then people wouldn’t take welfare even if they were eligible. This is what made it possible to function. Now that people will actually use it, it is no longer sustainable. It would be hilarious to see if only we didn’t have the same problem in the USA!

        1. This is nothing new. Many societies in history became affluent but then the qualities that made them successful were lost. They then fell back into something not quite so affluent if not worse. I’d just like to delay that process here.

          1. An empire rises in hob nailed boots, and descends in slippers! Or whatever the exact quote is. It is a very old story.

            You can even see it in individuals/families. A smart guy busts ass, gets rich, but remembers the climb. He raises his kids better than he had it, but still beats some decent work ethic into them. Maybe the kids even remember being middle class/poor when they were young, so they do pretty well, work hard and are decent human beings. But THEIR kids are almost always spoiled useless brats. A family that keeps their kids useful and hardworking people into the 3rd generation of great wealth has really done things right. Very few pull it off.

            We’re that on a society wide scale. The boomers/gen x were kind of the 2nd kid depending on the particulars of their parents, but now other millennials (which I am an older one myself) are mostly useless tools.

            I too just hope it all gets delayed a bit. I want at least 10-15 years before things turn into a real shit show as I think I can set myself up for life in that time period and be able to weather any storm that comes after.

    7. “Raise taxes” is pretty much your solution to everyone.

      Do you know how to read? Half the comments on this thread have been noting that ‘if we don’t reform social security, it’ll require either massive inflation or major tax increases.’

      And you say, ‘fuck it, let’s just raise taxes right now!’

      To say nothing of the willful ignorance of the abysmally low ‘returns’ on our SS ‘investment’ relative to return on private investment, and all the returns list because idiots still think the state is more efficient at allocating capital than markets.

      But thanks for the reminder that msnbc employs lots of morons to write for them.

    8. Yes. The solution is very simple. It’s called “Inflation”.

  23. We should have started phasing out SS for personal savings accounts over a decade ago when W was pushing for it. At the very least, If you can show incremental retirement savings at the end of the year you should have that amount refunded from your SS contributions and have your SS benefits reduced proportionally. Claiming that refund/reduction would be voluntary.

    1. That is literally the one redeeming thing I have always seen about Bush Jr. He had the balls to attempt that. I don’t remember all the nitty gritty details, but anything would be better than the status quo.

      What you propose would perhaps not be a bad way to alter the system actually. PROVE you saved on your own, and you don’t get forced into the system. If this were a yearly thing it might work. I suppose one could invest, not pay into SS (so reduced benefits), and then develop a cocaine problem in your late 50s and blow all your savings… But still not be owed shit all in SS payments because of all your earlier exemptions.

      I’m okay with this because one would have done it to ones self… But proggies wouldn’t stand for it.

      1. Developing a chemical habit in your late 50s is a pretty good way to ensure that there will be no need to pay benefits in your late 60s.

        That’s a young mans game

  24. USA savings accounts sound good, but need to go further. Why not just abolish all taxes on interest earned? And abolish limits on how much you can save? And eliminate rules on when and how you have to or are able to take withdrawals, all without penalties?

    Sound too good to be true? That’s the savings plan Americans had before the income tax was implemented.

    1. If you want to run for office on a platform of repealing the 16th Amendment, you have my vote.

    2. Sounds like shifting to a sales tax – – – – – –
      Which is not a bad idea if you also cut out 40% of the federal government spending..

      1. I was thinking 100%:)

  25. Given the poor rate of return Social Security provides, one wonders how it can possibly run out of money.

    1. Never doubt the governments ability to underachieve magnificently.

    2. Nice. Is there a newer study? That one is 20 years old. I’m sure the situation is even worse now.

    3. Could you people at least come up with your own bullshit irrelevancies to criticize SS with? SS is supposed to be the most conservative of all investment options–money in your pocket. It’s a safety net, not an individual retirement account. Money transferred from the young to the old. People are free to invest on top of it. More free than they would be if they didn’t have said safety net.

      1. More free than they would be if they didn’t have said safety net.

        That’s factually incorrect. If Bob has four beans to invest, and you take two of them away and throw them in the general bean fund, and that bean fund is used to pay for cowboy poetry, Bob now only has two beans to invest.

        Sure, if Cate has four beans but Cate prefers to spend it on shoes and purchases from Etsy, then she has zero bean to invest, but that’s not a question of freedom, that’s a question of prudence.

        1. This conversation is usually happening in the bizarro fantasy world in which everyone has such total information that individual investment of money otherwise used to pay payroll taxes will result in more wealth in old age for everyone. It’s a fantasy because obviously some people will have bad luck, make bad choices, or simply fail to predict how long they’ll live. That’s why it’s a safety net. With investment comes some amount of risk. People, for good reason, like having one guaranteed source of income in old age so that they are, in fact, more free, and that means everyone, not just the clairvoyants.

          1. “People, for good reason, like having one guaranteed source of income in old age so that they are, in fact, more free”

            People like getting handouts of other peoples money. And that has nothing to do with freedom.

            1. You are in fact more free if you have more money, regardless of where it came from.

              Being old is a fact of life. You know how else SS increases human freedom? By not making young people’s success or failure in life dependent on the random chance of their parents being poor in old age.

              The problem is you guys don’t care about any meaningful definition of freedom.

              1. You know how else SS increases human freedom? By not making young people’s success or failure in life dependent on the random chance of their parents being poor in old age.

                Why would your success in life depend on whether your parents are poor in old age? It doesn’t even depend much on your parents’ income when they raise you. Your success in life is determined by how your parents raise you and by the choices you make.

                The problem is you guys don’t care about any meaningful definition of freedom.

                It may not be meaningful to you, but it is meaningful to us.

                1. Imagine two people equally situated except one has an elderly parent with no money and the other has dead parents. Suddenly the first person has to support two human beings. SS alleviates at least some of that. It makes these “choices” you speak of more like actual choices. It makes capitalism work better.

                  1. “Imagine two people equally situated except one has an elderly parent with no money and the other has dead parents. Suddenly the first person has to support two human beings.”

                    Can the government force Americans is forced to take care of their elderly parents?

                    Your situation can be applied to all sorts of situations. If I had jalopy, 5 kids, a broken down house, and student loans, some sort of welfare program or safety net would alleviate my situation, whereas some guy who aren’t burdened by any of that is home free. That’s not an argument for SS, or just its runaway spending.

                    SS is more than just a safety net, which why that program and medicare takes up more than half the budget. Math is dispassionate and exact, when money runs out, it doesn’t care about cries of “we tried to help people”. If we were like Greece, we’d be hit hard with austerity measures to stop the bleeding once the money runs out. But we could probably kick the can down a road a bit more by printing more money or raising taxes – all to put a program on life support that’s guaranteed to pile on more debt.

                  2. Imagine two people equally situated except one has an elderly parent with no money and the other has dead parents. Suddenly the first person has to support two human beings.

                    It was a choice of the elderly parents not to prepare for their old age. In the US, it is your choice whether and how to support them. Many married couples find it useful to have their in-laws move in with them, and many elderly parents find it useful to be wanted.

                    And those European social welfare states you admire so much? Some of them will recover government support for elderly parents from the children. How about doing that in the US?

                    1. To say “it was a choice of the elderly parents not to prepare for their old age” is to presume a large number of facts, any combination of which could have led to their current situation and would not necessarily be a matter of “choice” inasmuch as people all too often are compelled to meet life as it comes to them and make choices accordingly.

                  3. You’re not required by law to give all your money to your parents to compensate them for not preparing for retirement. Come back later and try again.

              2. “You are in fact more free if you have more money, regardless of where it came from”

                The person who you take it away from ISN’T more free.

                Freedom does not mean the freedom to impose on someone else”s freedom.

                1. At some point there are diminishing returns on money as freedom, which is why we should tax more progressively. If you don’t believe in taxation at all, then you’re an anarchist and there is no sane conversation to have.

                  1. At some point there are diminishing returns on money as freedom, which is why we should tax more progressively.

                    Well, apart from the deeply offensive totalitarianism that you advocate there, you’re missing the point on two counts.

                    First, the point of letting productive people keep their money is not to allocate them a certain degree of freedom, it’s that they are using their resources productively.

                    Second, the problem with redistribution isn’t just that you violate the rights of the people you take the money from or that you harm the economy by taking money from productive people, it’s also that you harm the people you give the money to in the long run.

                    The policies you advocate are evil in a three-for-one way. That’s why socialism and progressivism keep failing.

                    1. Stop equating having wealth with being productive. It makes me vomit.

                    2. Well, for the vast majority of people who didn’t inherit the majority of the wealth they currently possess, they are basically equivalent. Most wealthy people have been more productive in their career/investments, most poor people were not. Reality: It’s a bitch.

                    3. What a rebuttal. Why don’t you go head over to revleft.com and you and the other Marxists can vomit in each other’s ears.

                    4. I am not sure that making you vomit is a disincentive.

                    5. Stop equating having wealth with being productive.

                      Imagine a highly democratic system, one in which everybody got to vote on whether what other people are doing is useful and desirable so that those people then get the resources to do more of what their fellow human beings find useful. You can vote for art, for public infrastructure, for ice cream, for hookers, for moon landings. We call those votes “dollars”. People get to spend them freely on whatever they enjoy, desire, or find useful, and in return, they actually obtain whatever they vote for.

                      It makes me vomit.

                      No doubt it is an unpleasant realization for some that dollars represent an objective measure of how useful and valuable you are to your fellow human beings.

                    6. Perhaps when discussing “original” wealth. The notion falls apart, however, when discussing the wealth of second and third generation “trust fund babies”, who are wealthy without ever having to do a single productive day of work in their lives.

                    7. UnrepentantCurmudgeon, the thing is that trust fund babies do not make up the majority of the wealthy in the USA. Most people in the USA of any real wealth are self made. That’s a statistical fact. It’s even true in the UK, which has far more inherited wealth.

                      NOW, to be honest, most newly wealthy people DO come from middle class backgrounds, not outright dirt poor. But I’m not counting somebody whose parents made 75K a year, and ended up worth 100 million bucks as having it all “handed to them” because that would be retarded.

                      The number of people running around with 50 million bucks they entirely inherited is a very small percentage of wealthy people, and they tend to squander it and end up far less rich than they started, if not outright broke.

                      Trust fund retards exist, but to use them as an excuse to discount the majority of self made people is BS.

                    8. If you think inducing nausea in others is sufficient reason to stop posting things, I suggest you delete your account.

                  2. Why not make it legal to steal from any one wealthier than you? After all, diminishing marginal returns means doing so would maximize our freedom!

              3. Tony|1.15.18 @ 4:36PM|#
                “You are in fact more free if you have more money,”
                Tony just made theft a road to freedom!
                Tony’s a dumb fuck.

          2. Tony|1.15.18 @ 4:23PM|#
            “This conversation is usually happening in the bizarro fantasy world in which everyone has such total information that individual investment of money otherwise used to pay payroll taxes will result in more wealth in old age for everyone.”

            No, you ignorant asshole, it’s happening in the real world, where if you invested in some Dow fund, you’d be 30% better off than you were the night you and that miserable hag lost.

            1. You’re talking about investing when the subject is old-age income security. Dumbass.

              1. Investments = income, dumbass!

                The SS fund simply invests in the poorest possible way. Look into how Australia does it, and tell me that it’s some evil plot to impoverish the old. WARNING: It’s NOT! It’s just a far better way to do it. And Australia is one of your much beloved to the left of the USA countries… So if even they thought it was a good idea, AND it has had such amazing results… Maybe even lefties in the USA should consider at least that small change.

      2. SS is supposed to be the most conservative of all investment options–money in your pocket.

        Social Security is no safer than treasury bills, yet it yields an even lower return on investment.

        1. Somehow, someway, SS is different! Tony doesn’t know how, but he can feel it! He’s got the spirit in em!

      3. That’s got to be the worst conceivable rebuttal. If the rate of return in private investment is higher, then social security should be privatized. It’s that clear. And sare the bullshit about how dangerous the stick market is; even pulling out and retiring 2009 left people with higher returns than SS.

        It’s a demonstrable fact that even the volatility of the stock market still leaves private investment far better than SS.

    4. Whether or not Social Security has a poor return on investment depends on one’s perspective.

      The person who works a middle class job and pays into it for 40 or 50 years receives a very poor return on investment.

      The person who pays little or nothing into it and collects a check for most of their lives gets an excellent return on their investment.

      1. According to studies even low income people WHO WORKED made basically zero positive returns. People who didn’t work, or start collecting SS disability at a young age are scamming… But disability is really a totally unrelated welfare program versus the old age pension portion IMO. And everybody gets screwed in the old age portion of the program, including low income earners.

  26. Don’t do anything to save or prepare.

    Do it the American way; do nothing to plan for the future then whine and complain like a pussy when you can’t pay your bills or feed yourself.

    That is the campaign platform for almost all of our politicians so why we expect anything more from the constituents?

  27. To sum up: Since libertarians can’t admit that they actively want to change society so that more people die in old age for the crime of not being good investors 40 years ago, they all of a sudden claim to favor welfare for the poor to take the place SS.

    Of course, this makes a hash of the libertarian perspective. If you’re going to tolerate a social safety net, SS requires far less government meddling than welfare for the poor. That was part of the entire vision of the program. You get it when you retire no matter how rich or poor, and that way politicians won’t spend time treating the old as another interest group to ping-pong around in budget negotiations.

    You’re OK with a safety net for the old, SS is the most libertarian way to go. Understandably this is not good news for the interest groups who see a huge pile of cash and make up a bunch of nonsense in order to argue for getting their grubby hands on it.

    1. You’re OK with a safety net for the old, SS is the most libertarian way to go.

      No, it’s not. Social security is highly redistributive, which is incompatible with libertarian principles and a recipe for failure in the long run. Any government-mandated retirement scheme should, at a minimum, not be redistributive.

      If you’re going to tolerate a social safety net, SS requires far less government meddling than welfare for the poor

      Tony: “I support my arguments with meaningless statements I pull out of my nether regions.”

      If you’re going to tolerate a social safety net, SS requires far less government meddling than welfare for the poor.

      That’s a false dichotomy. There are, in fact, many other choices. For example, we can require mandatory saving of 10% of their income until they reach some minimum amount in savings and give people a list of low risk investments to choose from. Even a fully government-run program could simply work like life insurance, with monthly payouts proportional to how much people pay in.

    2. “To sum up: Since libertarians can’t admit that they actively want to change society so that more people die in old age for the crime of not being good investors 40 years ago, they all of a sudden claim to favor welfare for the poor to take the place SS.”

      To sum up: This sack of shit is incapable of posting without lying.

    3. If you really want to do well for the old, and FORCE everybody to save, then we should at least do it like Australia. They actually make decent returns, which is actually increasing the wealth of the poorest people in their country.

      Our current system is a total load of horse shit that doesn’t do what you claim you want in a decent way.

      1. Notice how there aren’t scads of old people living on the streets and waiting in soup kitchens? Social Security works. It isn’t “horse shit.” It just uses a funding model that assumes perpetual population growth. It needs a new funding model.

        1. Did you not read??? If we’re going to force everybody to save, we should AT LEAST invest the money in something that makes a real return.

          That’s a compromise from the hardcore libertarian “no SS at all” stance. Australia did it, and they aren’t exactly right wing extremists. And it has done faaar better than SS has at helping out the poorest people in Australia. Read up on it.

          All I’m saying is if we’re going to force people to be in the program, it is a horrible idea to then invest the money in the worst possible way. Government pensions aren’t invested in exclusively shit yield US bonds… They’re invested in stocks, private bonds, some public bonds, etc. It’s a very safe, mixed portfolio… That returns a million times better than the way SS does it.

          I’m not above compromising, and neither are many other right/libertarian folks. But when something is so ineptly executed as SS it does tend to piss us off.

    4. To sum it up, Tony is still illiterate.

    5. Theliberyarian thing to do is to let voluntary exchange (markets) allocate capital. You don’t have to be a good investor to get better returns than pay as you go allows.

      For Christ’s sake, all you have to do is invest in index funds! What the fuck is so hard to understand about that? How stupid can you be? You don’t have to invest in google at the ground floor; the average market return – far better than SS and every bit as safe for a long term investor – is right fucking there for the taking. It’s just people like you who believe the state is magic standing in the way.

      1. The problem that Social Security was enacted to solve was that there were a lot of seniors that were pretty unemployable and had no savings for retirement.

        Is there any reason to think that, lacking Social Security and it’s taxes, that more people would responsibly save then currently are? Because even with Social Security and 401(k)s and Roths, we know most people won’t take advantage of the tools in front of them and go into retirement ill-prepared financially.

        So I don’t doubt that the “libertarian thing to do” is to kill Social Security and let folks do whatever.

        I just doubt that “the libertarian thing to do” actually addresses the problem Social Security is intended to address.

        1. Even if you buy into this, the obvious thing to do would be to AT LEAST invest it better. And if one wanted to be as fair as possible, allow exemptions for people who obviously have the wealth to retire on their own, or want to opt out for any reason.

          1. “Even if you buy into this […]
            I didn’t realize “libertarianism rejects that the problems Social Security seeks to solve are legitimate problems for government to solve” was controversial and required buy-in.

            1. Well, any strict libertarian is certainly against a forced retirement scheme, ESPECIALLY one that is so ineptly run. Some libertarians might TOLERATE such a scheme if it were less poorly executed, like me, but forced government social schemes are most definitely NOT libertarian. They’re the exact opposite.

              As far as dealing with the issue in a world without forced schemes, society used to do that. People knew there was no scheme, so tended to save more historically. Look up the numbers, people saved 10-20% of the income as recently as a few decades ago! THEY STILL DO in Japan, China, and many other nations. It was a culture of saving, something we have utterly lost, but could easily return to.

              Family also helped out. Private charity helped out for the truly needy.

              The Great Depression was literally the worst economic situation in centuries, so using that as your baseline is kinda disingenuous. Most recessions/depressions are hardly a blip, and the GD was probably made worse by the way FDR handled it.

              I would accept a compromise of restructuring SS into something that wasn’t such a shit show, and invested in things that made real returns, but I would prefer being able to opt out as well. Poor/middle class people who wanted the security could opt in, people who handle their financial lives correctly could opt out. It’d be pretty simple and better for everybody, including the poor.

          2. The problem with the government doing the investing is that it gives the government even more control over the market. (Consider the power big pension funds have on Wall Street and then imagine that on steroids and in the hands of Congress.)

            Another problem with “investing” in general is how much risk should be considered acceptable. Large numbers of retirees who saved well lost all of it in the 2008 crash and recession. So they did their due diligence and still ended up impoverished.

            Consider what it means for large numbers of elderly to a) continue to stay in the workforce beyond 65yo and b) living in the streets. (And c) they’re voters who vote in large numbers.) You’re going to end up with a “grey revolution” if you’re not careful.

            1. Not really Shawn. As mentioned the big government pensions already own tons of the stock market, as do private pensions. 2 trillion odd more (the current SS trust fund) would frankly just be a blip.

              You could easily write the law so that the SS administration simply had to invest in index funds that equally bought into every stock on the stock market, which shows to be the best long term way to do it anyway. No timing the market, no picking stocks, just buy in across the board.

              You forget that since it IS socialized, the SS admin could simply continue paying out during downturns as normal. Once it came back around it would all be fine and dandy. It would depend on how you structured it, actual individual accounts with withdrawalable amounts versus a common pool. The fact is that the same amount invested over a working career would have been better returns AT THE BOTTOM of the 2008 market than being invested in government bonds anyway.

              So there are options, but ANY option is better than the zero return the SS admin makes now.

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  29. Under current projections, the make-believe assets in the fund will only be enough to pay full benefits until 2034.

    The largest segment of baby boomers will be dead or dying by then, so I am guessing that everything is working as designed (as designed by Greatest, Silent and Baby Boom generations). FU, Gen Xers and Millennials!

  30. I know. Probably the first political tidbit I was ever confronted with was mentioned by my near-pensioneer 4th grade teacher saying that SS was going to rob my generation. That was about 35 years ago…We’ve known all this time, but no one has the courage to address it.

  31. I have lived in the UK and now live in the US, and I can inform you that the situation in the UK is just the same. It is outrageous that company directors risk jail time if they mess with their company’s pension fund, yet the governments run these Ponzi schemes and get a free pass. Disgusting.

  32. On one hand, I’m not planning around Social Security actually being a thing when I retire.

    On the other hand, folks have been fear-mongering over the imminent collapse of Social Security for decades. Folks retiring now heard the same stories: “when you retire, Social Security won’t be there”.

    And on the other other hand, we also know that when you do more automatic enrollments into 401(k) plans, thus taking more out of people’s paychecks to help them “save”, they compensate by taking on more debt, largely negating the extra “savings”.

    So to sum things up: no, I don’t plan for Social Security to help me when I retire. No, I don’t believe the fear-mongering that it’s going to go away. And no, I don’t buy the farcical argument that if we force more poor people to save that they’ll stop being poor.

    1. Well it could easily be fixed, as with most of our problems… But Pols don’t have the stomach for it. If we even kept the same basic structure it has now, but invested say 25-50% into real investments, it would basically be solvent overnight. But that would make sense, so it doesn’t happen. When it’s truly on the brink of falling apart they will probably do something like that, but of course doing it then will be far less effective than doing it now when there is over 2 trillion in the supposed fund.

      I don’t get why politicians are such useless fucks personally. It’s not like a reasonable compromise couldn’t be made. Keep the socialist scheme in general, just invest it a little better. It’s not that hard. Dems should be happy to save the program and make it solvent, and Republicans could claim victory as well. It’s win win. I guess it’s the public and their lack of knowledge of how investment works that is holding it back. People think investing part of the fund in stocks is like the end of the world somehow, even though it’s a far better and more profitable investment than government bonds.

  33. “Since 2010, it has been running a cash-flow deficit?meaning that the Social Security payroll taxes the government collects aren’t enough to cover the benefits it’s obliged to pay out. That should have been a signal that the time had come to look at reform.”

    Wait a minute! Are you trying to say that there is no lock box? Al Gore said there was a lock box and he is usually not wrong.

  34. There was a time when deaths outpaced births. So, if the government controlled spending and immigration the problem would disappear. So, let us open our borders to more money will be needed for SS.

  35. Yes, embracing some program along the lines of what Australia does would be beneficial. It should have been done decades ago(in fact, decades ago Congress should have rejected LBJ’s plea to submerge the Social Security trust fund into the general fund in order to help finance the Vietnam War). Unfortunately it would be too little too late for actual retirees as well as those who are likely to retire within the next 15-20 years.

    Also, let me object to the term “entitlement” as applied to Social Security and Medicare. Unlike Medicaid, for example, we pay for Social Security and Medicare with every paycheck. Presumably we are depositing funds against our old age. We don’t really get the benefit of those actual contributions because of Congressional accounting tricks, but nobody can question that we are in fact putting our money in.

    All that said, the real scam is that both programs depend for “solvency” on an expanding workforce to compensate for the shrinking baby boomer workforce. That isn’t happening, and it’s unlikely that it will as young people in a position to enter the labor market face an increasingly unfriendly labor market.

    1. How is a labor market “unfriendly?” (especially post-recession.)

      In any event, a shrinking birth rate was never assumed possible when they came up the Social Security scheme. That’s the primary issue here. Immigration can cover a good chunk of the difference if we were politically willing (which, we quite clearly are not.)

      So, in the end, if we don’t have enough babies and we won’t import qualified employees, then Social Security is doomed.

      1. But it’s NOT. We just have to invest it better. But yeah, actual skilled immigrants can help. That’s all most people want. It’s the hardline Democrats who insist we have to allow in millions of people with less than a high school education, who are actually a net drains on taxes (as are all native born working poor), because somehow that’s beneficial for people…

        1. As a “hardline Democrat,” I think that’s a bit of a strawman. Democrats aren’t “open borders” kinda people. Libertarians are, sure, but Dems aren’t. The big difference between Democrats and Republicans on this one is what to do about people who make it here successfully and integrate into society and become productive residents. And yeah, even that is in the millions, no debate there. Still, the folks with less than a high school diploma are economically active and pay taxes. Their kids get high school diplomas and pay more taxes. Some of them get college degrees, too. So I don’t see the problem with immigrants who have a limited education provided they’re willing to work hard.

          I have an employee who’s the son of migrant Mexican farm workers who’s working on his fourth degree (a doctorate). The children of immigrants are the real benefit from immigration.

          Note that Trump & Friends are currently trying to kill the H1B market as well, which are highly skilled foreign workers, often but not always high tech workers like engineers, coders, and bio-tech specialists. So while you say “that’s all most people want,” the current administration and GOP majorities in Congress don’t even want that, either.

          1. It depends on the Democrats! The “Legalize All 11 Million!” people definitely want to legalize a bunch of half illiterates. The average education of an illegal Mexican immigrant is 8th grade… 8TH FRIGGIN’ GRADE!

            My point is that adding more people that may pay some taxes, but pay in less than they receive back, is a NET NEGATIVE. Everybody in the USA pays some kinds of taxes to varying degrees, but about half the country pays in less than they get back out. You add more people like that, versus more people that pay in more than they receive back, and you put a greater burden on the payers. It’s simple math. A person who works 60 hours a week washing dishes is STILL a net drain on the system, it’s just math.

            Certain immigrant groups have higher average attainment levels than the average native born, but others are far lower. Mexicans for instance have far higher levels of poverty, lower high school and college graduation rates, etc including their kids and grand kids. Indians are higher because we mostly only let in more educated ones through the legal system. WHO you let in makes a BIG difference. I’d rather let in people that raise the bar, not lower it.

          2. H1B thing is complicated. I live in Seattle and it is clearly being abused to try to push down programmers salaries. Bring in an H1B for 100K when a native born or green card holder would want 150K for the same skill set. I would prefer more permanent citizens that were highly skilled, versus temporary ones who just take their loot and head home with a pile of money after awhile, money that would have stayed here if a citizen had that job.

            Trump is more or less proposing eliminating all low skilled immigration, including ending the family chain migration situation, so that the new lower number of legal immigrants will be ALL skilled permanent citizens. Makes a lot of sense to me.

  36. Move everyone to Social Security

    Here’s my solution:

    https://drive.google.com/file/d/0B90sU3A
    85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Thoughts?

  37. Nah, we’ll just raise taxes on the wealthy when the time comes.

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