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Social Security Will Be Insolvent In 16 Years. Maybe Congress Should Do Something About That.

Medicare will run dry even sooner. Do you trust anyone in Washington to solve this problem?

Bernhard Claßen imageBROKER/NewscomBernhard Claßen imageBROKER/NewscomSocial Security will be insolvent by 2034, three years earlier than previously expected, and one major fund within Medicare will run dry by 2026, according to a report released Tuesday by the trustees of the two programs.

If you're like me—a 31-year-old who has never harbored any expectation of receiving benefits from either program—then you might have greeted the news with a small degree of cynical relief. This means you'll only have to spend another decade or so throwing a portion of your paycheck into the black hole that is Social Security and Medicaid, right?

It's fine. You can have a moment to celebrate. Go ahead. I'll wait.

OK. By now, that feeling of relief should already be settling into the pit of your stomach and transforming into pangs of fear and loathing. The people responsible for solving this looming crisis—and for mediating what's sure to be a nasty debate over the future of both programs—spent yesterday acting like there is hardly anything more important than a bunch of rich jocks showing appropriate fealty to the president's opinions.

In other words, we are screwed.

Let's review. Social Security is a $900 billion program that provides income to 67 million Americans. About 47 million of them are over age 65, and the majority of the rest are disabled. If you're within 15 to 20 years of that threshold, you might not be relying on that income yet, but you're likely to be depending on it in your future financial plan—if you have one.

Medicare provides health care benefits to about 57 million older Americans—more than twice as many people as had their health insurance disrupted by Obamacare. And you remember how big of a deal that (rightly) was.

It is important to remember that insolvency is not the same as bankruptcy. By 2026 and 2034, respectively, Medicare and Social Security will not have enough money to pay the full cost of their obligations, but that's not the same as saying they'll have no money at all. According to the trustee report, Social Security beneficiaries will face a 21 percent across-the-board benefit cut when insolvency hits. Medicare's insolvency will hit first in the program's hospital fund; without changes that will only be able to pay for 91 percent of costs. And then that number will steadily decline, barring serious reform.

None of this is to suggest that these programs are in themselves worth saving. They are dinosaurs that were designed more than half a century ago for an entirely different workforce and population. For example, when Social Security launched in 1935, the average life expectancy for Americans was 61. Yes, that means the average person died four years before qualifying for Social Security benefits.

Today, the two programs function mostly as a giant conveyor belt to transfer wealth from the young and relatively poor to the old and relatively rich, allowing the average person (who now lives to be 78) more than a decade of taxpayer-funded retirement. Entitlements are also the primary drivers of our national debt, which just hit $20 trillion and is on pace by the mid-2020s to reach levels not seen since World War II.

They are not working. They should be completely revamped.

But do you really believe that Congress and the president are up to the task? They might not even pass a budget this year. Nothing on entitlements will be done before the midterms, and the 2020 presidential race will begin as soon as the last votes are counted on November 6 of this year. Normally, a presidential race could be a good opportunity to debate the future of two of the federal government's biggest expenditures, but these are not normal times.

By the time 2021 rolls around, maybe someone will be ready to do something about Tuesday's news. About the entitlements, I mean, not about whether football players stand for the national anthem.

When that happens, both programs should be restructured to take care of the truly needy, rather than being benefits for anyone who has reached an arbitrary age. As Reason's Nick Gillespie and Veronique de Rugy wrote in a still-very-relevant 2012 feature on the future of America's entitlements, "Focusing on those truly in need instead of automatically shoveling out larger and larger amounts to well-off senior citizens is the best way to avert looming fiscal catastrophe and restore some morality to an indefensible system."

The catastrophe part is pretty unavoidable, thanks to basic demographics. As The Wall Street Journal notes, there were 2.8 workers for every Social Security recipient last year. That's down from 3.3 in 2007, and that's way down from the 5.1 workers per beneficiary that existed in 1960.

Those demographics are destiny. As America ages, this year will mark the first time since 1982 that Social Security has spent more money than it takes in. The Committee for a Responsible Federal Budget, a nonpartisan think tank that favors balanced budgets, notes that the gap will continue to grow, leaving the program with a $900 billion combined deficit over the next decade. (For some useful, if morbid, information, check out the committee's calculator to see how old you'll be when Social Security goes kaputt.)

In the face of that threat, Treasury Secretary Steve Mnuchin issued a statement yesterday promising to do nothing and hope everything turns out okay.

"Tax cuts, regulatory reform, and improve trade agreeements will generate the long-term growth needed to help secure these programs and lead them to a more stable path," Mnuchin said. "Robust economic growth will help to ensure their lasting stability."

This has been a go-to play for the Trump administration. Last year, when various independent projections showed that the Republican-backed tax bill would add $1 trillion to the national debt, even after accounting for economic growth, the Treasury put out a one-page "analysis" promising that future economic growth and politically impossible budget cuts would somehow make the whole thing balance.

"A well-functioning democracy would, by now, have had a mature national discussion marked by a recognition of the need to set priorities among finite resources, as well as the intergenerational unfairness of the status quo, the ethical wrongness of borrowing for current consumption instead of investing in the future, the feasibility of alternative remedies if only we would start now, and so on," writes Mitch Daniels, former governor of Indiana and the current co-chair of the CRFB, in today's edition of The Washington Post. "Regrettably, but realistically, our republic at this point doesn't seem capable of discussions like that."

Photo Credit: Bernhard Claßen imageBROKER/Newscom

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  • Citizen X||

    The question in the subhed kinda cancels out the assertion in the headline, dunnit.

  • SQRLSY One||

    Wait! I have a fix, dammit!!! Let in a YUUUGE flood of illegal humans who pay into the SS system, but do NOT draw bennies!!! Illegal humans sslaving away to support the geezers, THAT is the fix! Seriously now!

    See "The Truth About Undocumented Immigrants and Taxes" (in quotes) in your Google search window will take you straight there, hit number one... AKA http://www.theatlantic.com/bus.....es/499604/

    Illegal humans can support SS, but not get bennies from SS, and all that is swell, 'cause they can't vote.

  • I am the 0.000000013%||

    Good points, though rather dementedly stated.

    How exactly do I go about offering my Social Security number for an illegal to steal? I want as many people paying into my account as I can get.

  • a tandem||

    That Atlantic piece is the definitive fuzzy math. it is not counting huge amounts of costs created by illegals or benefits accessible. Fails to count remittance either. Nor costs from illegals generally drive down wages, especially among working poor and middle class.

    In its SS calculation it does not count the offset costs from retired illegals who go onto a myriad of taxpayer funded public assistance programs that they qualify because they lack SS!

    And illegals can't vote?
    1) they can and do vote legally in more and more US jurisdictions. In my jurisdiction illegals vote in elections for CITY officials.
    2) they do vote illegally. The US uniquely makes this easy with less requirements for voter identification than the EU, Canada, Australia or any developed democracy.
    3) they are counted in proportional representation in state leglistaltive districts and federal legislature districts. This disenfranchises districts with less illegals.

    lastly the argument that we need more and more immigration to support ever more bloated social programs is unsustainable on its face. Not only is the left arguing in effect for the us to have a larger carbon footprint, more paving, more garbage thrown in the environment, more habitat taken out of the wild from an ever increasing population needed to sustain these programs -- this logic goes on ad infinitum. First we need to add 1.5 million, 20 years later we need to add 15 million, then we need to add 150 million, then1.5 billion...

  • retiredfire||

    Maybe, but the move. now, is to give those millions of illegals amnesty, which would make them eligible to be able to collect Social Security.
    Of course, the amnesty will encourage a whole new raft of illegals, flooding across the border, to be the cannon fodder for the system, and all the costs to society that would entail, especially the newly amnestied being able to get onto welfare - probably a good number of whom were counting on that.
    But progs have never been known to look past the good feelz they get for being so generous with other people's money.

  • Rhywun||

    Social Security will be insolvent by 2034

    On my 65th birthday. Perfect.

  • ||

    I'll be 63. Seems to be story of our generation.

  • Don't look at me.||

    Sounds bad, but it's better than being old.

  • NotAnotherSkippy||

    Gen X will be the one to pay for this. The millenials will finally wake up to this problem by then and get reforms just in time to benefit from them.

  • JWatts||

    Not the Millenials, but the Baby Boomers. As soon as the last Baby Boomer goes on SS, then there will be legislation to increase FICA taxes and raise the retirement age again (for Gen X, etc).

  • ThomasD||

    Same here.

    But, let's be realistic. Every time they do these projections the last projection gets moved up. It will be 'insolvent' by 2030 at the latest.

    Although, that's not the real crisis. Medicare is the one that is going to blow up sooner. And when it does the choice will be either watch Granny die, or the family will have to make up the shortfall in cash.

    Fun times ahead.

    My own prediction is we have about ten more years of denial and then shit gets real, real fast.

  • Illocust||

    Oh I'm certain they'll "do something" I expect the tax hike any day now.

  • Hail Rataxes||

    lol you're not real though

  • ||

    A tax hike won't fix the core problem -- Congress passed legislation to give themselves the authority to touch an untouchable trust fund and never paid back the money. As soon as those tax hikes bring in revenue, Congress will spend it on anything they feel like, not paying back their debts.

    After all, who could possibly foreclose on the United States for nonpayment?

  • ThomasD||

    This.

    Which also explains why there is no rush to fix it.

    It cannot be fixed, and will not be fixed.

    But it is touching to see the leftitarians of Reason wishing for a kinder, welfare system.

  • Dillinger||

    they could stop making me pay into it immediately. cut bait.

  • John||

    There is no trust fund. Social Security is as good as Congress's willingness to fund it. Saying it will go broke is an absurd lie.

    It will however begin to cost a lot more money than it takes in I would submit that when consider that spending will never be cut and all social security will do is crowd out other spending, sending money to old people is probably the best of a set of bad options. Sure, "fix" Social Security and ensure it does not crowd out other spending. Give Congress more discretionary funds to play with. That ought to work our well. /sarc

  • Don't look at me.||

    According to the figures above, 2/3 of the recipients will be dead. Self correcting problem.

  • I am the 0.000000013%||

    Agreed.

    Part of the self correction is that since the government is providing health care for the recipients, adjusting the number of recipients becomes pretty doable...

  • Agammamon||

    Richard Murphy? Is that you?

    Because you're saying that money grows on trees and Congress can just print more to cover. If you come back that they can raise taxes to manage inflation while printing money like crazy then I'll know you're the potato hisself.

  • John C. Randolph||

    social security will do is crowd out other spending

    More like, SS will become a larger component of the spending of the Fed's endless magic rubber inflatobucks.

    -jcr

  • John||

    Trump pardoned Alice Johnson. That is so racist.

  • Don't look at me.||

    Obama did not. What is that?

  • John||

    Basically in the future all government spending will go to social security, Medicare, public pensions, a downsized military and debt service. I defy any Libertarian to explain how that isn't an improvement over what we have now.

  • Rhywun||

    Unfortunately, it will also take 100% of everyone's paycheck.

  • John||

    They will be taking as much of your paycheck as they can anyway

  • ||

    I can't speak for the rest, but social security and medicare are supposedly already paid for, since they're funded from the interest generated by the payments made into the fund whether people wanted to pay or not for decades.

    It's basically a loan from the people of the United States to the government, and if Congress would stop buying the equivalent of the newest phone as soon as it comes out, a shiny new car every year, eating out every night and lots of drugs and booze, maybe they could afford to pay their debts.

  • DrZ||

    Phones and restaurants and fancy cars are billions of dollars. Federal obligations are in the trillions.

  • I'm Not Sure||

    "allowing the average person (who now lives to be 78) more than a decade of taxpayer-funded retirement.

    Entirely true but incredibly mislesading. The average person does reveive a taxpayer funded retirement, but what's been left out (not on purpose, one would hope) is the fact that this person has funded another's retirement through taxes paid during his working years. As it just so happens, I received a statement from Social Security in the mail the other day. Based on my projected benefit and supposing I live to be 78, I will receive in benefits $100,000 less than I have paid (so far- I'm still working) in payroll taxes. Not nearly as good a deal as the writer of the article makes it sound now, is it?

  • I'm Not Sure||

    Oh yeah- and despite that, I have managed to save for my "retirement". Not as much as I'd like, but when you're giving up 15% off the top of your paycheck every week, it's not easy. And I am fully convinced that one of the eventual fixes to the SS problem is going to be some sort of means testing, meaning that people who saved as best they could will be getting less because of all the others who didn't save anything, and they really need it more than we do, don't you know?

  • Don't look at me.||

    And your employer matches your contribution.

  • I'm Not Sure||

    To be clear, I allowed for that in my figures above.

  • John C. Randolph||

    Bullshit. Any money an employer has to pay for labor that doesn't end up in the worker's pocket is a tax on the worker.

    -jcr

  • Don't look at me.||

    Said the guy who never had to make payroll.

  • John C. Randolph||

    What's your next guess?

    -jcr

  • I am the 0.000000013%||

    lol. The way people rationalize taking money for taxes is bizarre.

    I didn't drink the drink, the straw drank the drink...

  • DrZ||

    Straws are soon to become illegal so leave them out of this discussion.

  • I am the 0.000000013%||

    Good idea - I might have become known as a straw man poster.

  • a tandem||

    John it is a tax on the emplyer

  • DrZ||

    Let's assume that the employer did not have to pay half of the employee's FICA. Do you think the employee would have a fatter paycheck?

    I do. The employer's portion is a hiring cost which comes out of the employee's paycheck. It's simple.

  • NotAnotherSkippy||

    What they will do is what they always do. They will raise taxes, probably by removing the cap for SS (been there done that for medicare), and they will raise the minimum benefit and cap everyone at the same payout. That will be the spending cut part of ir that just turns it into a more formal welfare program.

  • ThomasD||

    Those might be tried, but I doubt it. Mainly because they are not long term solutions - merely short term can-kicking. But, the effects will be immediate. Which means anyone in Congress who votes for it will get immediate feedback.

    A lotta pain for little to no glory. And even if you do survive your next election by then the futility of it will be clear.

  • Chipper Jones||

    Let's not kid ourselves. You paid into the general treasury via a tax levy. A bunch of that money was given to old people. The government then sent you an IOU worth less than the briefcase full of IOUs in Dumb and Dumber, indicating your alleged benefits when you reach a certain age. Benefits which, the Supreme Court has assured, us, are worthless if Congress says so.

  • I'm Not Sure||

    "You paid into the general treasury via a tax levy."

    Yes, that's what I said.

  • bernard11||

    Your 401(k) is also worthless if Congress says so.

  • JesseAz||

    God you're dumb. No it isn't. It has the same protections as any bank account. Can they start taxing growth? Sure, but only on future earnings. They can't just take your balance though dimwit.

  • ||

    And if Congress says bank accounts no longer have protection, what protection will they have?

    God you're naive.

  • ThomasD||

    God your ignorant.

    Even if Congress ended FDIC, and all the other forms of asset insurance the assets are still there.

  • ThomasD||

    You're, not your.

  • Curt||

    "If you're like me...then you might have greeted the news with a small degree of cynical relief. This means you'll only have to spend another decade or so throwing a portion of your paycheck into the black hole"

    What on earth would suggest to you that you'd stop throwing your money into that black hole? You'd still have to throw money in; you could just be more certain that you'd never get anything out.

    "A well-functioning democracy would, by now, have had a mature national discussion marked by a recognition of the need to set priorities among finite resources"

    Why would we need to have done that? Rich people still have money that we haven't taken yet. Why would we have any kind of mature discussion when rich people still have money for us to take?

  • 100% Satisfaction Guaranteed||

    You're not going to avoid paying Eric. There are more voters that want SS and they will outvote you to get it.

  • I am the 0.000000013%||

    That's the catch 22.

    If we create enough workers to outvote the SS recipients, there will be enough workers to fund it.

    If not, the SS recipients will outvote the workers and force them to fund it.

    I'm glad I'm old enough to get a significant amount of my money back, and I'm libertarian enough to be outraged by that fact.

  • Lester224||

    Old people are living longer and voting longer. Gen X will pay more and get less.

  • mulp||

    Unless young people kill themselves, they become old.

    Young people voting against old people are voting against themselves.

    My parents, and to a lesser degree boomers like me, voted to not have grandma and parents living with us crowding our house as was done before the 60s for lots and lots of families.

  • Rat on a train||

    "A well-functioning democracy would, by now, have had a mature national discussion marked by a recognition of the need to set priorities among finite resources, as well as the intergenerational unfairness of the status quo, the ethical wrongness of borrowing for current consumption instead of investing in the future, the feasibility of alternative remedies if only we would start now, and so on," writes Mitch Daniels
    I remember a couple attempts at that conversation. The screaming from the Democrats was deafening.

  • NotAnotherSkippy||

    Just look at buttplug.

  • bernard11||

    The idiotic non-proposals from the Republicans merited no more than a scream.

  • MarkLastname||

    Republicans made perfectly reasonable proposals like indexing benefits to price level instead of wages; setting up modest personal accounts so social security surpluses would actually be saved instead of spent by the government.

    Since the mid 1990s, Democrats have consistently had rabid tantrums at even the mildest of reforms. They consistently demand, as a sine qua non, benefits that perpetually increase faster than inflation for an ever growing retired population and and smaller working population. Math does not oblige however. We can only have social security reform when leftists stop shitting their diapers and act like grownups.

  • tommhan||

    I know what you say is true but the only thing that can save SS is for both sides of the aisle to actually work on fixing this problem. We have to do one or all of these things, 1. raise the payroll taxes. 2. raise the age you can receive benefits. 3. All workers must pay the taxes on ALL their income, no upper limit cut off. 4. Allow part of your SS to be invested. 5. Do not allow Congress to even touch SS and Medicare money. If most of all of this is not done then benefits must be cut. It is insane to just continually kick this can down the road. This should not be a partisan issue but a mandate from the citizens to all political parties to save the quality of life for our seniors.

  • retiredfire||

    Dude!
    Number 5 is the killer.
    What happens, now, is that the "trust fund" is really a slush fund, that they borrow from to pay for all kinds of things - mostly vote-buying - and then, when they pay it back, they call it "spending on Social Security", which is something no one can criticize.
    If the government, truly, had to "spend on Social Security", the the system would already be bankrupt.
    They're just doing what they do and fooling the low-infos.

  • Bubba Jones||

    Social Security went cash flow negative 7 years ago and no one cared.

    http://www.brookings.edu/opini.....years-ago/

    The depletion of the trust fund will likewise be a non event.

    We will just keep printing money.

  • WC Varones||

    That Brookings link is right on "cash negative" but wrong that there is a "trust fund."

    And the comparison to private pensions, which have declining membership and real, return-generating assets is absurd.

  • ||

    There is no trust fund because Congress gave themselves the right to borrow from it until it no longer existed, then never bothered to pay any of the money back.

    It's only cash negative because Congress is basically the biggest welfare queen of all welfare queens -- the equivalent of a shiny new car and the latest phone every time they feel like it, eating out and running up a huge bar tab every night, then claiming there's no way they can pay the money they owe, they're too poor.

  • ThomasD||

    Congress didn't 'give' themselves the right to 'borrow' from it. As soon as the law was passed SCOTUS declared it was a tax and the money collected was general revenue. Congress spends general revenue.

    Saying Congress borrows from SS is like you saying you are 'borrowing' from your weekly paycheck.

  • Jerryskids||

    The problem with waiting to hit rock bottom before you admit you've got a problem is that rock bottom's still a long way down. We haven't even gotten to the point where we're forced to eat pet food, let alone our pets or each other. Look at Venezuela - we laugh at the idiots who still insist the boat's not sinking and there's no need for alarm and yet there's a lot of them and they really do think there's nothing wrong with Venezuela that a little tweaking won't fix. Long after Social Security and Medicare/Medicaid have collapsed, there will still be people insisting there's an easy fix to resurrecting the corpse.

    Social Security was never anything more than welfare for old folks, but back in the day old folks were too proud to accept charity so the only way to get them to take it was to sell it as an entitlement - it's not charity, it's money you've earned! It's a retirement plan! Bull, retirement plans rely on long timelines and the magic of compound interest, spending the money as fast as it comes in doesn't just cost the money you're spending, it costs the compound interest, which is the main part of a retirement plan.

  • Jerryskids||

    Fixing Social Security has to start with means-testing and an admission that it's welfare, and nobody wants to hear that truth. The government stole the money from you and gave it to your grandparents in return for a promise that someday they'd steal your grandchildren's money to pay you back. You think any politician with any hope of ever getting re-elected has the balls to tell you that? But if Obamacare can be sold on the premise that you have an obligation to buy insurance lest you be a burden to others, mandatory retirement investment can be sold the same way. Unfortunately, there's a lot of people who really don't appreciate how much you have to set aside for retirement or that there's an employer match for Social Security that makes SS a lot more expensive than they know and they aren't going to like seeing the real price tag.

    And then there's the moral hazard of having a big pool of investment money just sitting there doing nothing while the government has to pay for all the free shit somehow - mark my words, Washington's "fix" for Social Security is going to involve wee tiny one-time-only, we swear, massive seizures of IRA's and 401-K's. Why should the evil rich get to hoard all their ill-gotten gains in tax-free accounts when all us poor schlubs shoulder the burden of paying for Social Security? It's not fair!

  • Jerryskids||

    Or as the man said, we're fucked. This ain't getting fixed.

  • Illocust||

    My friend wonders why I won't invest in a Roth IRA. She actually believes they are going to hold to their promise of not taxing her money when she's old enough to take it out.

  • ThomasD||

    If you've had your Roth for at least five years you can take out all your contributions penalty free (gotta leave the growth in, or pay penalties/taxes.).

    If you are also 59 1/2 you can take it all out penalty free.

    That is a lot of people and a lot of money in those two groups.

    If Congress so much as starts talking about taxing Roths there will be a huge stampede for the exits, Wall Street would then make lots of phone calls to DC.

  • Don't look at me.||

    They didn't means test me on the way in, better not do it on the way out.

  • Elias Fakaname||

    So much easier to get rid of the progressives. Maybe send them one way to Antarctica. Them the country cam be fixed.

  • Presskh||

    Instead of means-testing, how about stop giving benefits to those who never paid in, I.e., non-working spouses, for example. I'm not acknowledging that it's a total welfare system, even though it is a semi-welfare one.

  • Mark22||

    Fixing Social Security has to start with means-testing and an admission that it's welfare, and nobody wants to hear that truth.

    Means testing social security would be equivalent to a wealth tax: it would discourage savings and require people to give a complete inventory of personal property to the government. It also wouldn't make much difference.

    And then there's the moral hazard of having a big pool of investment money just sitting there doing nothing while the government has to pay for all the free shit somehow

    There is no "big pool of investment money just sitting there". And even if there were, it wouldn't be a "moral hazard". Uninvested cash "just sitting there" would basically be just a free handout to everybody else who holds cash.

    Washington's "fix" for Social Security is going to involve wee tiny one-time-only, we swear, massive seizures of IRA's and 401-K's. Why should the evil rich

    For the "evil rich", a 401(k) plan is negligible compared to their other investments.

  • ThomasD||

    "Means testing social security would be equivalent to a wealth tax: it would discourage savings and require people to give a complete inventory of personal property to the government. It also wouldn't make much difference."

    True, but foreseeable consequences are not unintended consequences.

  • bct2000||

    Bingo, that's what I've been suspecting for a while. If the government is encouraging you to do something, they are going to get something out of it. Time to find more "tax shelters" outside the US.

  • ||

    The problem is that it's not welfare. It's a defaulted loan.

    If you borrow money, you pay it back. It's a moral and ethical obligation, and our entire system runs on that basic deal. Except Congress doesn't see any need to do so. They're collectively the ultimate welfare queen, and they throw out red herrings by the ton, claiming that the people they owe money to are the 'entitled' ones.

  • ThomasD||

    There is no trust fund. There was no 'borrowing'. It has always been nothing more than robbing the young to pay the old.

    The problem we face is too many old beneficiaries and not nearly enough young payers.

  • Kristian H.||

    Solution: increase labor force participation
    Steps:
    1) reduce undocumented labor supply
    2) incentivize out of the labor force to join the labor force (welfare reform) also addresses Medicaid
    3) reform taxes on pensions so that some retirees will stay in workforce (offset transfer payments with more taxes)

  • ChuckNorrisBeardFist||

    Wow you are all heart. I knew that by reading 'undocumented' and not illegal.

    I'm glad you want to force retirees to work! No rest for you old fart!

  • Agammamon||

    'Force retirees to work'? I don't get that from K's post.

    Nobody is rounding these people up, we're simply no longer forcing *you* to work so they don't have to. If a retiree can, you know, *retire*, its because they have enough income/wealth to not need to work. We didn't create the need to work, that's just what is required to survive in an entropic universe. Blame God.

  • Agammamon||

    1. That's easy. We'll simply require everyone have documentation. Papiere Bitte. The internal checkpoints and travel visas come naturally. BUt while we're constraining people's right to trade, why don't we end imports and require everyone to 'buy American'? After all, if you can tell me I can't trade labor with someone then you can tell me I can't trade goods with them too. And this will spur American industries too!

  • Mark22||

    After all, if you can tell me I can't trade labor with someone then you can tell me I can't trade goods with them too.

    Correct: we don't live in a libertarian society, we live in a social welfare state. That means a complex web of trade restrictions, immigration restrictions, taxes, entitlements, and regulations. Haphazardly removing a few components of that web because they inconvenience you while leaving others in place doesn't make it a libertarian society.

  • marshaul||

    Haphazardly removing a few components of that web because they inconvenience you while leaving others in place doesn't make it a libertarian society.

    Libertarian theory isn't the sort of utopian utilitarianism that you seem to imagine. It's first and foremost a moral system. The utilitarian benefits follow, but they are are not the ends. In libertarian philosophy, the means are the ends.

    "Convenience" has nothing to do with it. Indeed, you possess no right to continue to do immoral things because you imagine it will be inconvenient unless we magically stop doing all immoral things all at once.

    You simply lack moral foundation, and replace it with cheap justifications.

  • Mark22||

    Libertarian theory isn't the sort of utopian utilitarianism that you seem to imagine.

    What exactly do you think was "utilitarian" about my statement? I am consistent that libertarianism is about morality, not about utility.

    "Convenience" has nothing to do with it. Indeed, you possess no right to continue to do immoral things

    I said "Haphazardly removing a few components of that web because they inconvenience you while leaving others in place doesn't make it a libertarian society." That is a moral argument: I am saying that you want to violate equality under the law because you want to increase your personal utility and the utility of your Mexican friend.

    You're like an aristocrat making the argument that if they can exempt themselves from taxes, it makes the country more libertarian because, hey, fewer people are compelled to pay taxes so liberty increases.

    Your preferences are not about upholding libertarian principles, they are about granting some people special privileges, and that is immoral and profoundly unlibertarian.

  • ThomasD||

    "The utilitarian benefits follow, but they are are not the ends"

    No, nothing necessarily follows.

    Frankly, you are the one who lacks moral foundation because you think you can divorce natural and foreseeable consequences from prior acts.

    What part of 'welfare state' do you not see as wholly problematic?

    Assuming you are viewing from an actual libertarian perspective.

    Make the state responsible for the welfare of citizens and the interests of the state supersede the interests of any individuals.

  • ThomasD||

    " we live in a social welfare state."

    Yep, leftitarians and progressives (BIRM) like to pretend that you can have the 'benefits' of top down authoritarian socialism without all the other associated trappings of authoritarian socialism.

  • WC Varones||

    Why is Reason going along with the "trust fund" fiction? There is no trust fund. It's an accounting entry between government departments, and Social Security is already paying out more than it takes in. The "insolvency" date is economically meaningless.

  • TwelveInchPianist||

    Yup. The trust fund is an accounting gimmick designed to make it politically difficult to cut benefits, by tricking people into thinking that they've already paid for them.

  • Longtobefree||

    The trust fund is very real.
    Social Security is required to invest it's surplus in very safe instruments. So safe in fact, that the only one allowed is US bonds. So each year, the surplus is invested in a single purpose US bond of the denomination equal to the surplus amount. When necessary, those bonds will be 'cashed in' to pay benefits as defined by law. It is the same, on a lager scale, as if you directed your 401k entirely to US bonds.
    Not a good investment, but a safe one.
    I have heard that the bonds are in a fireproof file cabinet in West Virginia. (Thank you Senator Byrd)

  • MarkLastname||

    No, you're missing the point. Requiring Social Security to buy bonds means requiring them to loan surpluses to the state. Now, if the government saved the money or even just gave it back to the people in tax cuts each time there was a surplus, it would constitute real saving. But it does neither. Empirical data shows that the government not only spends SS surpluses in addition to whatever it would otherwise have spent, but spends even more beyond that. SS surpluses actually make the government less fiscally responsible. So no, there is no real saving of the surpluses. They're squandered, and future taxpayers will be the ones paying for the mature bonds.

  • ThomasD||

    Wait, so if I start selling bonds to myself I can convince the bank that my assets are growing?

    Or is this only a game government can play?

  • Nardz||

    There's a solution, not a particularly libertarian one but not simply socialist confiscation either.
    Conquest.
    Empires grow by violently taking resources from external entities. When empires stop doing so, they become cannibalistic then eventually wither and die.
    SS is explicit cannibalism.
    Imperialism is a solution. Maybe the only one.

  • SQRLSY One||

    All Mexicans shall be our slaves!!! Lebensraum for all!!!!

  • SQRLSY One||

    And all them damned Canucks from Canuckistanistanistan, too!!!!

  • Mark22||

    All Mexicans shall be our slaves!!! Lebensraum for all!!!!

    It's what progressive politics has been all about for more than a century.

  • Jerryskids||

    Yeah, empire will work - we'll seize Mexico and put all their old folks on the Social Security dole, too, as well as free education for the kiddies, welfare for the poors, disability payments for the arthritic, transition surgeries for the fey and free unicorns for all!

  • Agammamon||

    Its hard to make money in empire building when you're the most efficient economy on the planet already.

  • marshaul||

    That's some zero-sum bullshit economics if I've ever heard any.

  • Incomprehensible Bitching||

    Tax the sex traffickers !!!!

  • Agammamon||

    Yes, that means the average person died four years before qualifying for Social Security benefits.

    'Average' if you count the number of non-live births and deaths in infancy. Most people who made it past 5 years old lived until 70ish. 'Life expectancy' counts all that and gives a not very useful (for these sorts of discussions) metric.

    It would be better to talk about life expectancy at 5 years or 15 years.

  • See.More||

    "Focusing on those truly in need instead of automatically shoveling out larger and larger amounts to well-off senior citizens is the best way to avert looming fiscal catastrophe and restore some morality to an indefensible system."

    Taxation is theft. Reducing the number of recipients of stolen money doesn't diminish the immorality of these programs.

  • Derp-o-Matic 6000||

    This means you'll only have to spend another decade or so throwing a portion of your paycheck into the black hole that is Social Security and Medicaid, right?

    I don't know where you came up with the silly notion that they'd stop collecting those taxes from your paycheck.

  • ||

    So Much Disinformation! I honestly expected better of a writer at Reason, when it comes to fact-checking. I guess you've finally gone the way of Fox News. You will be missed.

    Social Security is not insolvent, nor will it be in 2034. Or even in 2134. The money it represents is -- and always has been -- separate from the federal budget. The ONLY reason it's becoming an issue is the debtors in Congress see no point in paying back the money they borrowed.

    Entitlement has become a dirty word, but think about it -- if you lend $1000 to someone, are you entitled to be paid back the money you are owed? If the debtor honestly cannot pay their creditors, that's one thing. But what we're being told here is that the person who owes us money can't manage to pay it back, but CAN manage to buy a shiny new car every year, always has the latest phone, and goes out partying on the town every night.

    Social Security is a trust fund that Congress gave itself the right to borrow from, but has never bothered to pay back the money they took out. It's only short of money because Congress refuses to honor its obligations and pay back at least the principal of the money they borrowed from all of us.

  • John C. Randolph||

    The money it represents is -- and always has been -- separate from the federal budget.

    You are a liar, and you should be ashamed of yourself.

    -jcr

  • Longtobefree||

    Is your Google broken?
    EXCLUSION OF SOCIAL SECURITY FROM ALL BUDGETS Pub.L. 101–508, title XIII, Sec. 13301(a), Nov. 5, 1990, 104 Stat. 1388-623, provided that: Notwithstanding any other provision of law, the receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of - (1) the budget of the United States Government as submitted by the President, (2) the congressional budget, or (3) the Balanced Budget and Emergency Deficit Control Act of 1985.

    Reads pretty separate to me.

  • ThomasD||

    "shall not be counted as"

    An accounting trick. Only, if you accountant did something like that he's do prison time.

  • NotAnotherSkippy||

    No, that is exactly what the fictional trust fund is: payback. In fact the only reason SS has officially gone cash flow negative this year is because for the last 7 years they have maintained the fiction that the interest on the illiquid treasury notes in the "trust" fund is real income instead of just a redirection of general revenues.

    SS is a ponzi scheme that is finally collapsing under the mathematically certainty of ALL ponzi schemes.

  • Michael S. Langston||

    The ONLY reason it's becoming an issue is the debtors in Congress see no point in paying back the money they borrowed.

    Sure, but the only reason Congress is defaulting is because the money to pay the debt doesn't exist (without major untenable modifications to current tax rates).

    Combine that with the fact tax revenues are not and will not increase enough to over time to cover the difference and you have a debtor with no current or future ability to pay.

    So your delusions notwithstanding, SS will be insolvent.

  • TwelveInchPianist||

    SS is as "solvent" as we want it to be. If we plunk a couple trillion from general revenue into the trust fund, it'll be fine.

  • ||

    If you refuse to include paying back your debts in your annual budget but DO insist on having the latest phone and eating out every night, then OF COURSE you won't have enough money to pay those debts!

    Not spending more than you make, and paying back the money you owe are core tenets of financial responsibility.

  • MarkLastname||

    No, Congress squandered the money the borrowed from the last generation of taxpayers. It's a bunch of IOUs. There's no no saving behind it. It's not that Congress has a treasure chest somewhere they are hiding from social security. The obligation to repay the bonds exists, but not the means to repay them. So how does the government meet the obligation? Taxation. What you're demanding, whether you admit it or not, is that the government raise taxes on you get people to pay for obligations you and preceding generations voted for themselves, without reasonable expectation of getting near as much in return as what they pay to keep you afloat.

    It is entirely appropriate that younger taxpayers tell you and the AARP to go fuck yourselves.

  • ||

    They were required by law to keep it separate, but they passed new laws saying they could borrow from it. They just never bothered to pay back what they borrowed.

    Younger taxpayers have benefited enormously from the taxes of those who came before, and if they decide to be sociopaths, well, they should expect to be treated that way going forward. Isn't it funny though, how many of them would be utterly outraged if they were treated the way they were treating others?

  • Art Gecko||

    Not true. The laws governing the SS trust fund haven't changed at all since the fund was created. There was never anything to borrow; the fund has consisted of ONLY a Treasury Bond since Day One.

  • Art Gecko||

    That's not true. Since its inception, the SS trust fund has contained ONLY a Treasury Bond. Any excess money has always been traded for a bond. The rules that govern the fund have not been changed since the SS Act was passed. Once SS is in the red, that bond will be cashed in (and the taxpayer will be paying his SS tax ***PLUS**** some of his regular income tax money) to make the SS payments.

    And then the bond will be reduced to zero and the whole thing implodes. Currently, benefits are scheduled to be reduced to match SS income once there is no fund, but old people vote, and are the most listened-to demographic in the country.

  • ThomasD||

    "And then the bond will be reduced to zero and the whole thing implodes."

    Things will go south long before the bonds are zeroed out. As soon as the taxpayers start having to pay more to cover those 'cashed in bonds' (where else would the cash come from) the shit will hit the fan.

  • Headache||

    Maybe tariffs could fund the short fall.

  • MarkLastname||

    You certainly chose the right username.

  • John C. Randolph||

    SS has never been "solvent". There was never any trust fund, it was looted from day one. Pretending otherwise is absurd.

    -jcr

  • ||

    By that standard, every bank in the world is bankrupt and always has been. Owning stock is a myth since that money is just plain gone.

    The system relies on the fact that money -- particularly interest on money -- owed to you is an asset. You might fantasize about the system collapsing into total anarchy, but I guarantee you would regret it if you got your wish.

  • ThomasD||

    Stocks are a myth, but interest on money owed is an asset.

    Ok.

  • Procyon Rotor||

    "A well-functioning democracy would, by now, have had a mature national discussion marked by a recognition of the need to set priorities among finite resources, as well as the intergenerational unfairness of the status quo, the ethical wrongness of borrowing for current consumption instead of investing in the future, the feasibility of alternative remedies if only we would start now, and so on," writes Mitch Daniels

    Well-functioning democracy may just be an oxymoron. It sounds like Daniels is not familiar with the perverse incentives necessarily implied by majoritarianism that predictably lead to exactly the outcomes we're now seeing. Mature discussions, recognizing that resources are finite, setting priorities, and avoiding ethical wrongness are never features of democracy.

  • NotAnotherSkippy||

    Indeed.

  • Earth Skeptic||

    Democracy sucks.

  • Iheartskeet||

    Well folks, remember that universal basic income concept that everyone took a gigantic libertarian shit on a few weeks ago ? Yeah, that one.

    Well, its one way out.

    IIRC Charles Murray's proposal was $10k/yr for life for everyone over 21. His book went into great detail, but essentially this was cheaper than the sum of all the benefits and administrative effort, and in 2020 was saving around a trillion $$ (but assumed we'd implemented it by now).

    Before you call me an immoral slaver/communist/whatever, note I'd be for just eliminating all this shit right now, cold turkey. It just ain't gonna happen.

    Yeah, I know it provides an incentive not to work, there is a huge danger of mission and cost creep, and on and on. But its not like the path we are on now is going to end well. One side benefit of the UBI is a significant reduction in government meddling in the economy, as there wouldn't be Medicare or Medicaid...we'd be purchasing health care in the market, though Murray had some insurance reform proposals too.

  • Mark22||

    Yeah, I know it provides an incentive not to work, there is a huge danger of mission and cost creep, and on and on. But its not like the path we are on now is going to end well.

    Without adjustment, our "current problems" inflate away.

    One side benefit of the UBI is a significant reduction in government meddling in the economy

    One side disadvantage is that the number of voters incentivized to increase UBI and raise taxes to pay for it will grow even more.

    as there wouldn't be Medicare or Medicaid...we'd be purchasing health care in the market,

    Don't make me laugh.

  • Iheartskeet||

    If the day comes that our debt is inflated away, we are probably in such an economic shitstorm that this entire discussion is academic. I can't say I prefer that outcome.

    On people voting themselves "raises" via the UBI, as I say elsewhere..."compared to what ?".

    Without action, our SS/Medicare/Medicaid populations are going to soar anyway. They may very well do the same thing. In the article above, SS payout reductions are projected...how likely is that to happen ? IIRC the debt projections are calculated under current law, and so assume these reductions will take place. In all liklihood, our potential debt issue is even larger than projected.

  • Mark22||

    If the day comes that our debt is inflated away, we are probably in such an economic shitstorm that this entire discussion is academic. I can't say I prefer that outcome.

    Our debt inflates away naturally over time; we just need to stop adding to it.

    On people voting themselves "raises" via the UBI, as I say elsewhere..."compared to what ?".

    Compared to a much smaller, much narrower set of voters for each welfare program.

    Without action, our SS/Medicare/Medicaid populations are going to soar anyway.

    They don't "soar" by themselves, they only "soar" if Congress makes them "soar".

    In the article above, SS payout reductions are projected...how likely is that to happen ?

    More likely than that a UBI stays contained. In fact, SS payout reductions aren't needed if we simply lower the COLA adjustments.

  • Iheartskeet||

    The kind of inflation we'd need to cover this is far beyond a few points a year...I'd speculate it would be quite destructive. Moreover, we'd see interest rates rise also, and that would offset some of the debt reduction.

    On the rest, as we see with SS, we've probably already passed the threshold of voters who can drive voting themselves raises. Its far less than a majority...a sizeable minority will do.

    Pretty much every politician runs in terror from any kind of SS cut, of the kind you envision and probably anything in UBI. So, these are both hobbled politically.

  • Mark22||

    The kind of inflation we'd need to cover this is far beyond a few points a year...I'd speculate it would be quite destructive.

    So your belief is based on speculation. Why don't you do the math instead?

    Pretty much every politician runs in terror from any kind of SS cut,

    That's my point: no cut is needed. Politicians really can just let this inflate away. There would still be beating of chests, but it would be politically more palatable.

    and probably anything in UBI. So, these are both hobbled politically.

    Well, I'm glad the UBI is off the table.

  • Michael S. Langston||

    One side benefit of the UBI is a significant reduction in government meddling in the economy...

    That's childishly foolish, as any entity giving you money for nothing of value in return, will attach constraints on that money.

    The feds currently and historically use the possibility of reducing matching funds to States to force states to do things they wouldn't otherwise do.

    So how long after this happens before a law is passed that the money cannot be spent on things like guns? Tobacco? Fast food?

    IE - UBI would not reduce economic interference, but enshrine it.

  • Iheartskeet||

    I acknowledge its a risk, but as Thomas Sowell would say, "compared to what ?"

    First, we already have attempts at micromanagement via food stamps and the like. UBI would shift all of this over to payments that look more like SS...and I have never heard any serious proposals to restrict how SS recipients spend their money. So, its looks far more likely we'd shift spending to a form that is LESS prone to be micromanaged. Plus, I don't see how there would be any effective way to micromanage spending...heck people trade food stamps for all kinds of stuff NOW. Unlike vouchers/stamps etc, UBI would be cash, which is fungible.

    Second, via Medicare, the feds have their hands all over our health system...RUC, coverage, etc etc ad infinitum. UBI would simply say "hey look here's money, go buy insurance in the market". Left unchanged, we'll see Medicare grow to an even larger behemoth, with even larger market distortions.

    One can critique UBI from a bunch of angles, and I get it, but I do think it dramatically mitigates economic micromanagement.

  • Qsl||

    I'd add per Friedman's conception of the negative income tax, decoupling welfare from specific earmarks then allows the market to compete for those dollars, making services more efficient while minimizing inflation, and minimizing market distortions. Full stop.

    Also, as EVERYONE is getting the same, it minimizes playing one group off of another. A vote for increasing UBI is also a vote for reducing the taxes on the rich. More difficult to play the class warfare card if everyone is in the same boat.

    As it is, per voting demographics, I expect the retired to vote to keep all (and perhaps even expand) SS and Medicare until the country is at its breaking point, or enough of them die out to turn the tide at the polls. It will be identity politics writ large, and essentially nothing to force change until the country is well beyond broke.

  • Iheartskeet||

    Agree, unfortunately.

    Its amazing to look around the globe and see other countres with even a worse situation than us (Japan)...this won't end well.

  • ThomasD||

    He who defaults last, wins.

  • MarkLastname||

    A vote for reducing the UBI increases, not decreases, taxes in the rich. Even if the UBI is paid for by a flat tax rate, that still means any increase in the UBI will require a tax increase on those above average exceeding what they will gain from the increase in the UBI. It's basic arithmetic. Class warfare will be much easier, not harder, to play.

    Beyond that, there's no way a UBI could be big enough to replace the current welfare state without causing a huge disincentive to work and massive inflation. And once people realize they can piss away their UBI and still get Medicaid and food stamps because voters won't let them die on the streeet, more and more people will use their UBIs for unnnecessary crap while the old entitlements resurge.

    UBI is just a bad a idea in practice. Friedman was aware of its flaws and that's why he opposed Nixon's proposed negative income tax.

  • Qsl||

    "The negative income tax has come up in one form or another in Congress, but Friedman eventually opposed it because it came packaged with other undesirable elements antithetical to the efficacy of the negative income tax."

    It's not like I have high standards of evidence, especially coming here, but it might be wise to consider anyone can check the veracity of your statements.

    And the rest of your "arguments" have already been discounted by the limited amount of UBI trials that have been performed.

    To be certain, there is a very specific form of UBI that is even remotely palatable to people with libertarian sympathies (hence Friedman's disavowal, you nut), and even then I remain unconvinced it will work as advertised.

    However, in light of fuckall coming from anyone else in how to address welfare spending, looking at UBI as a broad restructuring of welfare makes a degree of sense (especially if it means ending minimum wage, ending all other branches of government that oversee entitlements, reducing current market distortions, etc.)

    I await your dynamic plan on how to solve the SS crisis.

  • Mark22||

    First, we already have attempts at micromanagement via food stamps and the like.

    That's a good thing: it makes using those benefits more cumbersome and less valuable than cash while still achieving their objective of not letting people starve.

    Second, via Medicare, the feds have their hands all over our health system

    Privatizing Medicare would be a good thing, but that issue is completely unrelated to UBI: people can pay privatized medicare from UBI, from welfare, from Social Security, or from a new health care voucher.

  • Art Gecko||

    How does nobody seem to understand the law of unintended consequences?

  • Rockabilly||

    by then I'll be dead

  • L_D_F||

    I'm going on welfare. That never goes broke

  • Don't look at me.||

    Hmmm.

  • Skedoosker||

    Congress, and federal bureaucrats have a pension plan separate from social security. If you want to fis SS, fold their plans into it, and it will get fixed. But since it is doubtful that the American people have the sense or the courage to do that, expect a disaster, and more of the enslavement we seem to want/ deserve.

  • Longtobefree||

    Damn. Next thing you will think that they should have the same health care and insurance as the serfs - - - - - -

  • Cloudbuster||

    it is doubtful that the American people have the sense or the courage to do that

    The American people do not craft and pass legislation. The guys with the separate pension plan do.

  • Mark22||

    Social Security Will Be Insolvent In 16 Years. Maybe Congress Should Do Something About That.
    Medicare will run dry even sooner. Do you trust anyone in Washington to solve this problem?

    Social Security is an intergenerational transfer; it has never been "solvent" and there is nothing to "run dry".

    Congress can cut benefits or increase taxes any time it wants.

  • Longtobefree||

    Congress can cut benefits or increase taxes any time it wants.

    As in 'any time it has the balls' ?

  • Mark22||

    As in 'any time it has the balls' ?

    Correct. Which it doesn't. But that's not my problem.

  • chey||

    Congress, and federal bureaucrats have a pension plan separate from social security so they can reduce the effect of social security in the political and economical change. Americans are now face to face with joblessness, disasters and non security this is a good reason to change the president by a referendum. http://www.docteur-hichem-mahmoud.com

  • Mark22||

    As Reason's Nick Gillespie and Veronique de Rugy wrote in a still-very-relevant 2012 feature on the future of America's entitlements, "Focusing on those truly in need instead of automatically shoveling out larger and larger amounts to well-off senior citizens is the best way to avert looming fiscal catastrophe and restore some morality to an indefensible system."

    The current system already pays a miniscule return on investment for high income earners. Adding means testing is the equivalent of a wealth tax, something that discourages savings and is hard to administer.

    It is incomprehensible how the same people can argue for a UBI and at the same time propose means testing for Social Security.

  • Iheartskeet||

    I think its comprehensible. Means testing is one way of fixing it. UBI is another way of fixing it.They are different, mutually exclusive, ways of fixing it. So what ?

  • Mark22||

    You're completely missing the point. Social Security is already a UBI for the over 65 crowd, yet you say that its problems would get fixed by changing it to a means-tested program. The under 65 crowd has a means tested welfare program, yet you say that it would get fixed by replacing it with a UBI. Why would a UBI be bad for the over 65 crowd, but good for the under 65 crowd?

    The reason why we have the current system (UBI over 65, means tested under 65) is simple: the only means testing we can rationally implement is means testing based on income. Means testing based on savings is a really, really bad idea.

  • Iheartskeet||

    Nope.

    First, SS is not a UBI, as it does not encompass all fed gov entitlements in one payment. UBI would be like SS only in that its a lump of cash you then turn around and spend in the marketplace however you want. Also, everyone gets the same $$ under UBI, whereas SS is based on your historical earnings.

    Second, the point was that you found being for both "incomprehensible", and I merely pointed out that its quite comprehensible. I am for any idea that can be made to work and makes fiscal sense. UBI is broader and a whole different animal than tweaking SS benefits, and so the plans have mutually exclusive aspects.

    Again, so what ?

  • Mark22||

    First, SS is not a UBI, as it does not encompass all fed gov entitlements in one payment.

    SS is very much like UBI in that it is a non-means tested monthly universal payment to everybody over 65.

    Furthermore, although the promise of UBI is that it can replace all other entitlements, that is not a defining characteristic.

    Also, everyone gets the same $$ under UBI, whereas SS is based on your historical earnings.

    Giving everybody the same dollar amount is also not a defining characteristic of UBI; in fact, family structure and cost of living make "the same" a meaningless concept.

  • EscherEnigma||

    And both ideas (UBI for under-65, means-testing for over-65) are likely to make the programs much less popular with large portions of the population.

    It's almost like the suggestions aren't intended as actual fixes, but to be reasonable-soudnign changes that ultimately undermine public support, allowing them to be scaled-back/dismantled without as much blow-back.

    That said, I suspect (without checking) that it's actually different writers supporting different ideas, and that there aren't many (honest) individuals that support both.

  • Mark22||

    And both ideas (UBI for under-65, means-testing for over-65) are likely to make the programs much less popular with large portions of the population.

    I don't see that. The more people you get hooked on government programs, the more people need to vote to keep those benefits flowing.

    African Americans started voting for Democrats in the 1930's because economics compelled them to, knowing full well that Democrats were extremely racist and oppressive back then. Economics trumps all other considerations when voting.

  • Pat001||

    Instead of Mitch McConnell and Paul Ryan telling Americans who paid into SS that they have to accept SS benefit cuts to keep the system solvent, how about if Congress stops handing out SS benefits to non-citizens and every refugee who shows up here? Current law says non-citizens and refugees can get SSI benefits for seven years.

  • loveconstitution1789||

    Social Security is paid for using tax revenue from the current or just past fiscal year.

    There is not bank account holding trillions in social security funds.

    A better way to describe it is unsustainable spending on entitlement programs from year to year helping to accumulate national debt.

  • I am the 0.000000013%||

    Entitlements are an absolute wrong from a libertarian perspective, and it never ceases to make me angry, but that being said, the prognosis is anything but clear and adopting a crisis mentality just opens the door for more government authoritarianism.

    Technology is sure to throw all of the entitlement thinking out of whack. I can easily see medical care dropping to commodity levels. Molecular printers, telemedicine, prosthetics, robot (roomba) surgeons, and on and on.

    The FDA can try to act as a gatekeeper as much as it wants, but when you are able to treat yourself in the privacy of your own home they are going to have a hard time cracking down on you.

    Of course, people living significantly longer will really throw SS out of whack, but presumably robot helpers will increase productivity to the point where the cost of maintaing our living standards don't require as much cash. Though of course our perception of what a reasonable living standard will change.

    The point of all this hand waving (other than to avoid doing my job) is that we aren't carving up a fixed size pie. Nothing is fixed, there are a lot of pies, and there are a lot of things other than pies.

  • ThomasD||

    "Entitlements are an absolute wrong from a libertarian perspective"

    Thank you.

    And they are not only a single sort of wrong, they inevitably lead to an ever expanding series of affronts to liberty.

    I'm not opposed to welfare.

    I'm opposed to the part where it must be a welfare state

    There are all sorts of ways to establish non-governmental forms of welfare, and for any of us concerned about actual human welfare might want to start talking about those.

    Because brother, in the next couple decades we are all going to need them.

  • Nom de Sobriquet||

    Step 1: Reduce benefits by 7% right now, across the board
    Step 2: Upon reaching the age of 60 (or, hell, pick an age - it's arbitrary), offer beneficiaries a buyout equivalent to 5 years worth of benefits.

    This will reduce the strain on a shit-o-saurus rex system, initially; then, those honest Americans who realize and/or planned for not receiving benefits and have the savings to survive, can get out without feeling like paying in was a total loss.

  • Iheartskeet||

    I like it...hell, I like any cut. Thing is, unless you run it through an actuarial model, its hard as hell to tell if it makes any difference or enough difference.

  • Nom de Sobriquet||

    Just like anything else, the benefits of such a change would not be immediately apparent. However, I think after 10 years, one would be able to see the shift back toward solvency. It's not an entitlement panacea, but it's a step away from the mostly untouched model as it is today.

  • MarkLastname||

    Even if we just stop indexing SS benefits to wage level and instead index to inflation, the long run improvements are great.

    The problem is retired people lobbies and leftists lie and call any attempt to even reduce the rate at which benefits grow (in real terms, even after accounting for inflation) benefit "cuts." And most voters are apparently dumb enough to believe them, so benefits keep growing at unsustainable rates.

  • Cloudbuster||

    If you're like me—a 31-year-old who has never harbored any expectation of receiving benefits from either program—then you might have greeted the news with a small degree of cynical relief. This means you'll only have to spend another decade or so throwing a portion of your paycheck into the black hole that is Social Security and Medicaid, right?

    Hahahahaha! That's some top-notch comedy right there! The idea that you'd get to stop paying just because you're not going to collect anything. Hahahahaha!

    By the time 2021 rolls around, maybe someone will be ready to do something about Tuesday's news. About the entitlements, I mean, not about whether football players stand for the national anthem.

    Congress, judging from past activity, is far more likely to take action on football players standing for the national anthem than it is to engage in entitlement reform.

  • Cloudbuster||

    For example, when Social Security launched in 1935, the average life expectancy for Americans was 61. Yes, that means the average person died four years before qualifying for Social Security benefits.

    Understanding mortality statistics is hard. Too hard for Boehm.

  • Earth Skeptic||

    I like the Hunger Games solution: offer a reward (10% of the target's benefits?) to any other retiree who takes out the target.

    Note: this works for public pensions, too.

  • tlapp||

    As a 31 year old you need your generation to understand the math. I have resented being forced into this since my first paycheck as a teenager in 1976. The stole my freedom and forced me into government dependency. An insult telling me I can't manage my for my own life's needs. Top it off later I discover that FDR knew this was not financially sound, was warned by both his Treasury Secretary Morgenthau and Witte, the economist he appointed to head the committee to create it. His lame brain response was yes but once people pay in for a lifetime they will never give it up.

    I think you should all stage a protest at the FDR memorial in Washington. Maybe a group photo of the middle finger salute to the man who knowingly sold all future generations into indentured servitude to the prior into a Ponzi scheme. I'll be happy to join you.

  • JeffreyL||

    Insolvent is the wrong word to use here. Upon exhaustion of the funds held in the trust, the program reverts to pay as you go. So instead of payouts at the current 100% rate, they drop to down to pay out what gets taken in. Current estimates range from a reduction of between 21% and 26% of the current 100% pay out rate.

  • Mark22||

    There are no "funds in the trust"; it's already pay as you go.

  • EscherEnigma||

    Means-testing SS and Medicare are just ways to undermine public support for 'em, making 'em easier to eliminate in the future.

    That's one of the reasons people that actually support the programs don't like those ideas.

  • Earth Skeptic||

    You do know that SS benefits are already means-tested, right? The benefit calcuation has tiers, based on income/contribution thresholds, and those that earned more get lower pay-back for their dollars in higher tiers. In addition, the income tax exemptions for SS benefits decline for higher "retired" earners.

    I do get the point about means-testing fears in general--and I agree that if SS becomes more significantly "progressive" it will be perceived as another welfare plan, and broad support will vanish. Mine, too.

  • Cloudbuster||

    No, they're the opposite of means-tested. The less you've made over your lifetime, thus the likely less your means are, the less you receive as a benefit.

  • Mark22||

    That's wrong. The more you make and pay into it, the less your return on your investment.

    If you are a formerly low income SS recipient, you receive a large net benefit from SS, even if your payments are somewhat lower than average.

    If you are a formerly high income SS recipients, you suffer a net loss from SS, even if your payments are somewhat higher than average.

  • Art Gecko||

    That SS is not perceived as just another welfare plan is the biggest con the feds have ever pulled. SS ***IS*** just another welfare plan. The only difference between SS and any other welfare plan is the line item on your paycheck. It is not a savings plan. It is not insurance. IT IS WELFARE.

    If you don't believe me, read the SS Act; I'm sure you can find it online somewhere. Or read the two most famous Supreme Court cases concerning SS: Helvering v. Davis (1937) and Flemming v. Nestor (1960).

  • MarkLastname||

    Untethering benefits from payment into the system *also* undermines their popularity. You can't expect rich and middle class people to keep supporting what is effectively welfare for poor old people; their support is largely conditional on the belief they're going to get more than a pittance out of it.

  • Mark22||

    Social Security is already a massive redistribution scheme; high income earners suffer a loss (despite nominally higher benefits), while low income earners gain a lot (despite nominally lower benefits). The fact that benefits increase somewhat with lifetime income just masks that a little and makes the program more palatable.

  • Doc Smith||

    SS, or something like it, is an unfortunate necessity in a society that values life. It would be nice if everyone had a plan and saved to fund their eventual retirement, but most don't. A whole lot of folks have only SS for income in retirement.

    And we, as humane and compassionate people, won't abide seniors dying in the street. So we must force the public to fund SS so they will have something when they retire. But the money should never have been given to the govt in exchange for IOUs that may be worthless.

  • Nom de Sobriquet||

    Hm. I think your logic is flawed. Perhaps if a whole lot of folks didn't have to pay into it in the first place, they'd have more money to save/invest. The point is, it's not the government's responsibility to save my money, then pay it back to me (without interest) at a time of its choosing.
    Let the individual take some responsibility for his/her own future. Take the safety net away, fewer folks jump. It's like mandating permanent training wheels. Just fucking pedal.

  • Mark22||

    SS, or something like it, is an unfortunate necessity in a society that values life. It would be nice if everyone had a plan and saved to fund their eventual retirement, but most don't.

    You can do what other countries do and make retirement savings mandatory but private.

    Or you can provide free, government-run old age homes for the poor who have no other choice.

  • bct2000||

    The next thing the federal government will get its hands on is the 401Ks. Since SS is drying up, the politicians "need" another ready source of cash. The big encouragement for people to invest more money in these accounts is a perfect setup for government to suck this dry just like they did SS.

  • RodgerMitchell||

    Social Security will NOT be insolvent.

    The federal government is Monetarily Sovereign; It has the unlimited ability to create its sovereign currency. It creates dollars every time it pays a bill. It cannot run short of dollars.

    Thus, the U.S. federal government never can be insolvent..

    Alan Greenspan: "A government cannot become insolvent with respect to obligations in its own currency."

    Ben Bernanke: "The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost."

    St. Louis Federal Reserve: "As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills."

    Thomas Edison: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. . . . It is absurd to say our Country can issue bonds and cannot issue currency.

    Because the U.S. government never can be insolvent, no agency of the U.S. government can be insolvent, unless the government wants that to happen. Social Security is an agency of the U.S. government.

    Even if all FICA taxes were $0, the federal government could continue paying benefits, if it chose to do so, forever.

    Don't believe the lies. They are delivered to you by the rich who want you to think social benefits are unaffordable.

  • MarkLastname||

    Great, another MMT retard.

  • Art Gecko||

    Printing dollars does not create wealth; it dilutes the value of other dollars and is nothing more than a wealth transfer scheme. Sure, they can print all they want, but the more they print the lower the value, and the country's real wealth cannot increase as a result.

  • jonnysage||

    The problem is the govt takes 15% of every dollar I earn now, and maybe gives me some back if I live that long. Let me opt out.

  • ranrod||

    Last time i looked - this was a Libertarian site that hated borders..... dont tell me that the invaders you want
    in here dont collect welfare, soc. security etc etc

    maybe you could argue this with Judicial Watch

  • ||

    Please let it go bankrupt. Let it die.

  • Liberty Lover||

    Seeing the government stole my money, and then my employers money in my name, which means I earned less, I don't feel it is an entitlement. If they want to end Social Security fine, pay me back my cash, my employers cash in my name and seeing I started paying SS at 15, 50 years of compound interest at a measly 4% compounded interest monthly and I will go away.
    Social Security is theft, It has always been theft. When FDR started SS life expectancy was much lower than 65. The governments promise was to collect from many and pay few. Then farmers and teachers were let in with minimal payments and disability coverage was included. Now people live longer and the lie is exposed. The fund was robbed from day one by Congress, and Bill and Newt finished it off in the 80's to "balance the budget". Yet the Boomers get all the blame, even though we supported our elderly "The Greatest generation" and also the most politically selfish generation in history. So much for any security in old age.

  • Art Gecko||

    In order to give you back "your money" they will have to tax you to come up with it. So it's a moot point. Or tax someone else, which would also be theft.

    BTW, Bill and Newt didn't "finish it off." Since day one, all excess cash has been traded to the Treasury Department in exchange for a bond (a promise to tax someone in the future). The rules haven't changed since the fund was created in (IIRC) 1939.

  • swampwiz||

    It's time to dispense with the cap on FICA taxes, and then add some other taxes on the wealthy, including a death tax that cannot be loopholed away.

  • Mark22||

    Why is it "time" for that?

    More importantly, what exactly is it you expect to happen? If it's more revenue, you'll be sorely disappointed. What you'll get is an exodus of productive people and companies and economic failure.

  • akita96th||

    If the government would pay back all it has stolen from social security it would not be insolvent....And if they would lift the caps on SSA It would not be insolvent...But alas our government is fueled by greed and big money interest and it not interested in seeing the elderly having A DECENT living wage at retirement....SEEMS that politicians and rich arseholes are the only ones deemed worthy of a retirement. They would deny us that which they themselves have already got courtesy of the tax payer.

  • Art Gecko||

    Either a Treasury Bond or cash... the amount would be the same and the fund will still be reduced to zero when it runs out.

  • Art Gecko||

    The SSA has been wrong on every estimate it has ever made; I suspect the SS trust fund will be empty several years before their prediction.

  • BambiB||

    A benefits crash wouldn't be all bad. It would primarily punish those who created the mess - women, Demoncraps. The key should be to tie the disaster to the way the Demoncraps created the mess and kicked the can down the road.

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