Social Security tipping over into the red

posted at 1:28 pm on February 4, 2010 by Ed Morrissey

Last month, we noted that Social Security had delivered its worst performance in decades.  Now, Allen Sloan warns investors at Yahoo Finance that the entire program has gone into the red — and will stay there.  Get ready, Sloan says, for the mother of all bailouts:

Don’t look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.

A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

Instead of helping to finance the rest of the government, as it has done for decades, our nation’s biggest social program needs help from the Treasury to keep benefit checks from bouncing — in other words, a taxpayer bailout.

The only event that might keep this from being the very next bailout would be a faster-than-expected collapse at FHA, which has followed the Fannie Mae/Freddie Mac strategy of buying marginal paper and securitizing it through MBSs.  Otherwise, we’re already beginning to bail out SSA, thanks to a generation-long bailout of the federal government by the SSA in the other direction.

Technically, the fund should receive $120 billion in interest payments from the Treasury, which owes SSA for decades of skim repaid only in IOUs.  However, the interest itself will only be paid in IOUs.  Sloan explains the problem:

The first number is $120 billion, the interest that Social Security will earn on its trust fund in fiscal 2010 (see page 74 of the CBO report). The second is $92 billion, the overall Social Security surplus for fiscal 2010 (see page 116).

This means that without the interest income, Social Security will be $28 billion in the hole this fiscal year, which ends Sept. 30.

Why disregard the interest? Because as people like me have said repeatedly over the years, the interest, which consists of Treasury IOUs that the Social Security trust fund gets on its holdings of government securities, doesn’t provide Social Security with any cash that it can use to pay its bills. The interest is merely an accounting entry with no economic significance.

Just to make clear, that $92 billion surplus includes the nonexistent interest payments from Treasury.  The fund will go into the red for $28 billion, meaning that we will have our first cash-negative year ever in SSA.  It won’t be the last, either.

The crisis in SocSec was supposed to arrive in 2019, according to the CBO in 2008.  Who came up with that figure?  Peter Orszag, the same man who missed the 10-year deficit projection by over $2.2 trillion in the spring of 2009, and who now runs the Office of Management and Budget.  Democrats used that figure, as well as others produced by various sources in the years preceding that analysis, to argue against Social Security reform, and to paint Republicans who warned that the crisis was a lot closer as Chicken Littles or grubby politicians who just wanted to get their hands on Grandma’s Social Security check.

Steve at No Runny Eggs looks at the recalculated projections:

Between this fiscal year and FY2019, instead of a cumulative Social Security primary deficit of $100 billion, we’ll have a cumulative Social Security primary deficit of $157 billion. That is, of course, we actually do get all the economic and tax growth that the CBO seems to hope we will. If we don’t, the chart I put together back in September showing just how easy it was to turn the CBO’s hope into red ink as far as the eye can see will be rosy.

That also doesn’t include Obama’s plan for a second round of $250 checks to every Social Security recipient. That is a drag of another $13 billion on this year, which would make this year’s cash deficit somewhere around $51 billion.

This means that the federal government not only can’t rely on SocSec surpluses, which have been used to paper over budget deficits, it will have to increase the federal deficit to make benefit payments from now on.  George Bush and the GOP saw this coming, while Democrats like Orszag insisted that we had nothing to worry about.  Even if we had a federal government living within its means, this would be a crisis — but with the debt that Obama is accumulating, it’s a fiscal tsunami waiting to crest.


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Basil Fawlty on February 4, 2010 at 4:10 PM

Isn’t this what Obama’s death panels were trying to address? Only one way to reduce costs in those last few years, isn’t there? I would suspect not too many people over 70 with age related health problems could afford private insurance health premiums.

a capella on February 4, 2010 at 4:35 PM

Correct me if I am wrong:):)

I haven’t done payroll since 1998 but at that time SS deduction was 7.5% plus co.match=15%
Medicare was 1.45 plus matching, I’m sure it has gone up since then, this is in the private sector.
Now work for the goverment you do not pay into SS (taxpayer dollars pays the wages) and you collect a nice pension at the end BUT if you EVER put a dime into SS you can also collect that.
SS was meant to pay a small income to those who paid into it, now when them DEMS made SS part of the general fund they use it to pay anything they want, since all this admin. is doing is hiring GOV.workers less is being paid into SS.
I think it is the same for Medicare taxes, I haven’t been able to find this out yet for sure but I think MEDICAID is also being paid out of it.
SO you have GOV.workers collecting it plus their pension, and not contributing,Medicaid recipients collecting and not paying. GEE WONDER WHY IT’S IN THE RED, Maybe GUBMINT can figure it out.NOT!!!

concernedsenior on February 4, 2010 at 4:38 PM

When it was set up, the average person was dead at 65. Now it’s close to 80. The result, an ever expanding pool of beneficiaries, with fewer and fewer workers supporting them. Not supportable.

Thank FDR and his typical socialist short-mindedness. Social Security was completely sustainable when you frequently had beneficiaries either expiring before the bennies kicked in, or only a few years afterward. They never counted on life expectancy skyrocketing and retirement lasting 20 or 30 years. Eighty years later and we still have yet to learn that government cannot be trusted with our money.

Basil Fawlty on February 4, 2010 at 4:10 PM

Yep, sure would have been nice to have an extra 40 million workers in this country to support the old folks.

Oh that’s right, they all got their brains sucked out in utero…

TheMightyMonarch on February 4, 2010 at 4:39 PM

Which is still why I (and at least one other here) think raising the age (it’s already 67 for me) is the best way to go.
MNHawk on February 4, 2010 at 4:13 PM

I’ve got no problem with that. However, having some experience with Fortune 500 machinations to get rid of 55-60 year old scientists who have achieved high compensation levels and can be replaced cheaply, I doubt there will be much of a job market for 67 year old workers unless you are talking about Walmart greeters.

a capella on February 4, 2010 at 4:41 PM

Isn’t this what Obama’s death panels were trying to address? Only one way to reduce costs in those last few years, isn’t there? I would suspect not too many people over 70 with age related health problems could afford private insurance health premiums.

a capella on February 4, 2010 at 4:35 PM

Precisely. I believe that is why Obama came out with his let us just slip Granny the pill policy and not worry about expensive treatment for her in old age.

Basil Fawlty on February 4, 2010 at 4:45 PM

Here’s the exact information, BTW. The cutback is a little higher than I remembered:

The following analysis is based on the assumptions underlying the 2001 Report of the Social Security Trustees, which projected that the combined Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds would be exhausted in 2038. Since the trust funds allow the Social Security Administration to pay benefits when program costs exceed tax revenues, benefits would have to be cut once the trust funds were exhausted. Therefore, Social Security would be able to pay only 73 percent of scheduled benefits in 2039, with further reductions relative to scheduled benefits in future years.

WashJeff, you’re about 15 years younger than I am, so I guess I’ll see about 18 years of full benefits before the reductions kick in (assuming there’s the political will to do that).

MNHawk, they did raise the retirement age for full benefits awhile ago for some of us older than you. Mine increased to something like 66 and 6 or 8 months. And I’ve been paying into the system for close to 40 years now–8 or 9 years when I worked part time in the summer or during the school year in high school, college and grad school and then about 30 years (almost all at the maximum) when I’ve been working full time. My guess is that I’ve paid more into the system than you have.

Jimbo3 on February 4, 2010 at 4:48 PM

I’ve got no problem with that. However, having some experience with Fortune 500 machinations to get rid of 55-60 year old scientists who have achieved high compensation levels and can be replaced cheaply, I doubt there will be much of a job market for 67 year old workers unless you are talking about Walmart greeters.

a capella on February 4, 2010 at 4:41 PM

–And being mid 50s myself and having worked for a bunch of Fortune 500 companies, I can tell you that there’s not much of a job market in those companies for many people over 45.

Jimbo3 on February 4, 2010 at 4:51 PM

Then stop paying in. Simple as that.

a capella on February 4, 2010 at 3:49 PM

Contribute to a ponzi scheme, or go to jail.

What a compassionate choice you offer.

MarkTheGreat on February 4, 2010 at 4:57 PM

That’s exactly how I felt 40 years ago.

a capella on February 4, 2010 at 3:55 PM

So the fact that you were forced to pay into a ponzi scheme is sufficient justification to force others to pay even more into the same scheme knowing that they will get even less out of it?

MarkTheGreat on February 4, 2010 at 4:58 PM

Oh that’s right, they all got their brains sucked out in utero…

TheMightyMonarch on February 4, 2010 at 4:39 PM

One of the great crimes against humanity.

Oh wait a minute I must be clinging to my religion and the great Obama said, in effect, that I should not do that.

Basil Fawlty on February 4, 2010 at 5:00 PM

I agree, but it has to be done so one generation isn’t left totally holding the bag.

a capella on February 4, 2010 at 4:07 PM

To late by 40 years. The current generation is already stuck holding the bag. The only question left is how big will that bag be. As long as you get what you want, you don’t appear to care how much others are hurt.

MarkTheGreat on February 4, 2010 at 5:00 PM

1. Hyperinflation hurts the banks.

2. The banks own Congress, the Treasury, and the Federal Reserve.

3. Therefore, there will be no hyperinflation.

TheMightyMonarch on February 4, 2010 at 4:32 PM

I just love it when the populists start spouting their economic ignorance.

I could have sworn that the unions own the govt. Does this mean that the unions own the banks? Or do the banks own the unions? The truth is, nobody owns the govt. Various groups have a lot of influence, but nobody owns it.

As to your claim that hyperinflation is impossible, that’s refuted by just looking at how fast the money supply is expanding. Inflation, and quite possibly hyperinflation is already on it’s way and there is little anyone can do to stop it.

MarkTheGreat on February 4, 2010 at 5:03 PM

8 or 9 years when I worked part time in the summer or during the school year in high school, college and grad school and then about 30 years (almost all at the maximum) when I’ve been working full time. My guess is that I’ve paid more into the system than you have.

Jimbo3 on February 4, 2010 at 4:48 PM

Can one even work at the age anymore? I personnel think it is fine, and even beneficial, as long as the parents are involved in the decision making (subject to some extreme caveats).

That 2038 date, in terms of funding SocSec payments made is useless. Since current payroll taxes cannot cover presenmt payments, and if it stays this way, that means general funds (i.e., income taxes, corporate taxes, and other government fees) will now start paying SocSec. This means there are less funds for defense, federal law enforcement, and whatever goodies the politicians in power want to bestow on us.

With all level of governments taken into account, I believe we are near 50% taxation in this country. Can we go an higher without makeing the country poorer?

WashJeff on February 4, 2010 at 5:05 PM

Adjusting SS retirement age by one month a year would have worked 30 years ago. It’s way to late now.

An immediate 3 year jump is needed then we can start adjusting by one month a year.

Second, SS needs to be adjusted by inflation, not by the rate at which incomes increase.

MarkTheGreat on February 4, 2010 at 5:06 PM

Gov’s been stealing from the trust fund for decades. Don’t blame us old folks for government manipulation.Put the blame where most of it lies. And…if there is a ‘bail out’ it’s the Gov. having to return what it’s taken and not replaced all these years. The monetary and human costs of cutting or removing SS at this point would be self-defeating as many, if not most, SS recipients would merely be shifted to Medicaid or other taxpayer funded programs. It may sound nice to younger still working folks, but in the end would most likely cost more than a bail out–a lot more.

jeanie on February 4, 2010 at 5:09 PM

Gov’s been stealing from the trust fund for decades. Don’t blame us old folks for government manipulation.Put the blame where most of it lies. And…if there is a ‘bail out’ it’s the Gov. having to return what it’s taken and not replaced all these years. The monetary and human costs of cutting or removing SS at this point would be self-defeating as many, if not most, SS recipients would merely be shifted to Medicaid or other taxpayer funded programs. It may sound nice to younger still working folks, but in the end would most likely cost more than a bail out–a lot more.

jeanie on February 4, 2010 at 5:09 PM

Can’t escape from your responsibility that easy.

Just who was it who kept voting for the politicians who were raiding SS?
Just who was it who kept voting for the politicians who refused to do anything to fix SS?

It was those people who go around telling us that we have to pay for their retirement.
The people who are going to be left holding the bag for this fiasco for the most part weren’t even be voting before the collapse of the system began.

MarkTheGreat on February 4, 2010 at 5:17 PM

To late by 40 years. The current generation is already stuck holding the bag. The only question left is how big will that bag be. As long as you get what you want, you don’t appear to care how much others are hurt.

MarkTheGreat on February 4, 2010 at 5:00 PM

Did I say that? Don’t think so. It is currently unsustainable and will get worse. Benefits will be reduced but I suspect the tax picture won’t change till there is a real tax revolt, meaning lots of people will go to jail instead of whining on blogs about it. You up for that?

a capella on February 4, 2010 at 5:19 PM

Benefits will be reduced but I suspect the tax picture won’t change till there is a real tax revolt, meaning lots of people will go to jail instead of whining on blogs about it. You up for that?

a capella on February 4, 2010 at 5:19 PM

So if I am an employee of Widget Corp and do not want to pay the payroll tax (so I can revolt), how can I do this?

WashJeff on February 4, 2010 at 5:23 PM

The crisis in SocSec was supposed to arrive in 2019, according to the CBO in 2008

And weren’t the Dems claiming that date would be 2040 back during the 2006 campaign?

eeyore on February 4, 2010 at 5:31 PM

Now if the government wants to repeal mandatory withholding…let the fun begin!

WashJeff on February 4, 2010 at 5:33 PM

Sure glad that the donks stopped SS reform in 2005.

BTW, it’s going to be an order of magnitude worse in 2010.

jukin on February 4, 2010 at 1:34 PM

To be fair, it was a bipartisan Party-In-Government stop of SocSecurity reform, but it did have a heavier D component.

steveegg on February 4, 2010 at 5:37 PM

Headline:

Largest Ponzi scheme since Madoff un-covered; Roosevelt plan a scam

Noted Ponzi schemer Madoff is quoted as saying “If I had the power to cover my tracks with legislation, I’d still be in business”

BobMbx on February 4, 2010 at 5:37 PM

a capella on February 4, 2010 at 5:19 PM

Please tell me how I’m supposed to get the company that I work for to stop taking SS out of my paycheck.

I just love the way you want everyone else to do the sacrificing.

MarkTheGreat on February 4, 2010 at 5:38 PM

Should this be $41 billion ($28 billion + $13 billion)?

WashJeff on February 4, 2010 at 1:37 PM

D’OH! By the time I got to that portion of the math last night, I was a bit loopy.

steveegg on February 4, 2010 at 5:40 PM

BobMbx on February 4, 2010 at 5:37 PM

So has anyone answered how what Bernie Madoff did is any different from SocSec, besides having the power of government behind the latter?

WashJeff on February 4, 2010 at 5:43 PM

D’OH! By the time I got to that portion of the math last night, I was a bit loopy.

steveegg on February 4, 2010 at 5:40 PM

Been there done that. Great work and thanks for doing what you are doing.

WashJeff on February 4, 2010 at 5:44 PM

Please tell me how I’m supposed to get the company that I work for to stop taking SS out of my paycheck.

MarkTheGreat on February 4, 2010 at 5:38 PM

Maybe he is for stopping mandatory withholding? I could get behnig that.

WashJeff on February 4, 2010 at 5:45 PM

SO you have GOV.workers collecting it plus their pension, and not contributing,Medicaid recipients collecting and not paying. GEE WONDER WHY IT’S IN THE RED, Maybe GUBMINT can figure it out.NOT!!!

concernedsenior on February 4, 2010 at 4:38 PM

Plus baby boomers retiring, it is really simple math…
If you you are collecting Y and need X, then it is Y-X= to determine profit or loss.
It ain’t rocket science….

right2bright on February 4, 2010 at 5:48 PM

So, what to invest in? Spices? A cow and some chickens for the back yard?

NTWR on February 4, 2010 at 1:49 PM

Ammo. Lots of ammo.

Oh yeah, don’t invest in DemonSheep.

steveegg on February 4, 2010 at 5:50 PM

Headline:

Largest Ponzi scheme since Madoff un-covered; Roosevelt plan a scam

Noted Ponzi schemer Madoff is quoted as saying “If I had the power to cover my tracks with legislation, I’d still be in business”

BobMbx on February 4, 2010 at 5:37 PM

Actually, it’s an order of magnitude (or so) larger than Madoff’s piker scheme – he barely cracked a billion.

steveegg on February 4, 2010 at 5:52 PM

MarkTheGreat on February 4, 2010 at 5:03 PM

So if I changed my wording from “owns” to “every piece of legislation they pass is designed to benefit those who fund their re-election bids”, we’d be in agreement?

In any case, I had posted a genuine argument against inflation. Ain’t gonna happen in a recession caused by too much cheap money and too much debt in the system. Eventually cash flow (or lack of it) stops any entity from spending. Washington is just able to keep it going much longer.

TheMightyMonarch on February 4, 2010 at 5:54 PM

Please tell me how I’m supposed to get the company that I work for to stop taking SS out of my paycheck.

MarkTheGreat on February 4, 2010 at 5:38 PM

That is the problem isn’t it! The upheaval this would cause is not contemplatible. This is the same problem our generation would have had, had we even been able to identify what or whom was appropiating the SS trust fund. It was firmly entrenched as a budgetary fix before most of us knew it was happening. It was not just a few identifiable pols but the whole budget process and the whole Congress. Keep in mind, I am not apologizing for something I know is not fair, I am presenting the facts as I remember them. News was not the immediate thing it is today so even if some members of Congress and or/Presidents were identified, it might have been years before this came to light. And….silly us, we trusted our Government to do the right thing. Huge mistake!!!

jeanie on February 4, 2010 at 5:55 PM

I just love the way you want everyone else to do the sacrificing.

MarkTheGreat on February 4, 2010 at 5:38 PM

I’m not the one waging generational warfare here. SS benefits will be cut in some fashion, or maybe the whole thing will go down. Fine, in that case you win, we lose. Money is fungible. Make enough deduction claims on payroll tax that none is withheld. Then refuse to pay it when you file. Or don’t file. You’re a pretty creative guy,..figure something out. However, I wouldn’t depend on electing the right politicians to do the job of fixing it. I’ve already seen that movie.

a capella on February 4, 2010 at 5:59 PM

So, what to invest in? Spices? A cow and some chickens for the back yard?

NTWR on February 4, 2010 at 1:49 PM

Don’t invest in “hope” and “change” for financial experts are reporting those that invested heavily in such in 2008 have been taken to the cleaners on those investments in 2009 and 2010.

Basil Fawlty on February 4, 2010 at 6:01 PM

As far as I know, government workers cannot collect SS unless their pension is less than their SS benefit,then SS makes up the difference. It’s called the Government Pension Offset or in another form the Windfall Elimination something or other(double dipping). What this can mean is that if you had a government pension but had also worked in the private sector, the monies you paid to SS in the private sector are forfeit if your public pension is higher than your SS benefit. This provision applies to many/most police, firemen, teachers who may have moonlighted in other jobs. You can have your 40 quarters till the git go, but you’ll never collect a dime of SS if you fall into these categories. In short, you are subsidizing others in the system.

jeanie on February 4, 2010 at 6:16 PM

Fixing Social Security is simple. There are 2 issues with it. (1) people are living longer, and (2) the % of workers to retirees is getting smaller (that is related to 1, but also a result of smaller families).

To fix it, the retirement dates (including early retirement) need to be pegged to some age prior to then-current longevity. For example, if the average lifespan is currently 79, then the average full retirement date should be 12 years before that (but the exact amount needs to be calculated by the actuaries).

But that doesn’t fix the family size. That’s a harder problem. One answer could be to set the FICA cap higher for people who don’t have children. Example, if you have no kids, the cap is 125K. One kid, 120K. Two kids 115K. Three kids 110K. The workers who are creating future workers get a tax break. Don’t laugh. That’s similar to what happens with income taxes as. The numbers of course, need to be set to bring in the right amounts.

And the calculations should be made and the levels set while considering the ups and downs of the economy.

And it needs to be phased in. People currently getting SS or approaching the current retirment ages should get the benefits promised them for 40 years.

notagool on February 4, 2010 at 6:20 PM

Have paid the maximum into SS for 42 years and have never expected to get a penny. That expectation will soon be fulfilled as our leaders decide to “means test” SS payments. Will union members, or former union members, and local, state and federal employees (such as themselves) be excluded from the new rules?

GaltBlvnAtty on February 4, 2010 at 6:29 PM

However, I wouldn’t depend on electing the right politicians to do the job of fixing it. I’ve already seen that movie.

a capella on February 4, 2010 at 5:59 PM

I think you are my soul mate. Exactly what I have been trying to get through to so many political sports fans for years.

ClassicCon on February 4, 2010 at 6:36 PM

Have no idea what happened with above post. Can we get the government to get Allah a real fvcking message board with our bailout money.

ClassicCon on February 4, 2010 at 6:37 PM

local, state and federal employees

Most of these are excluded from SS anyway as I explained above. It is already a form of ‘means’ testing. Some public employess must pay SS, others do not–in any case, their pensions are almost always too high to collect SS since the Pension Offset will kick in when/if they apply for SS. If you can collect, say, a 30k pension from your school system or your municipality and your SS would be 12k, you’ll never get SS even if you paid in with a summer job(for teachers for example). Federal employees(inluding pols I think but am not sure)collect such good pensions and benefits that even if they were eligible for SS, they’d never be able to collect. Medicare then comes out of pocket and not the SS check.

jeanie on February 4, 2010 at 6:46 PM

Have no idea what happened with above post. Can we get the government to get Allah a real fvcking message board with our bailout money.

ClassicCon on February 4, 2010 at 6:37 PM

I have found that when I am not careful that I end up with a strike through intsead of a direct quote. I wish that “strike” was near “strong” or “emphasis” not “quote” but then again if I was more careful I would not end up once and while with a non intended strike through.

Basil Fawlty on February 4, 2010 at 6:58 PM

Very late to the party. SS has been worse than a Ponzi scheme since early 60′s. It has been a giant fraud perpetuated on those paying in. SCOTUS ruled no one was entitled to a single payment from the system and that the government could use the money any way it pleased. The idea that a trust fund exists is the biggest political fraud of the last 50 years.

chemman on February 4, 2010 at 7:07 PM

Very late to the party. SS has been worse than a Ponzi scheme since early 60’s. It has been a giant fraud perpetuated on those paying in. SCOTUS ruled no one was entitled to a single payment from the system and that the government could use the money any way it pleased. The idea that a trust fund exists is the biggest political fraud of the last 50 years.

chemman on February 4, 2010 at 7:07 PM

It is my understanding that Congress is required by law to send out the SS checks for that ponzi scheme and that in a way there is a trust fund for that ponzi scheme: the trust fund is called the Chinese government.

Basil Fawlty on February 4, 2010 at 7:16 PM

chemman on February 4, 2010 at 7:07 PM

Just another tax then looks like. Apparently the only way to get ones money back(no matter the age of retirement)is to live a very, very long life.(just to be sure you get it all!! :)

jeanie on February 4, 2010 at 7:17 PM

I have found that when I am not careful that I end up with a strike through intsead of a direct quote. I wish that “strike” was near “strong” or “emphasis” not “quote” but then again if I was more careful I would not end up once and while with a non intended strike through.

Basil Fawlty on February 4, 2010 at 6:58 PM

Hard-coding the HTML into the comments tends to limit those problems. Of course, if there’s a typo,….

steveegg on February 4, 2010 at 7:19 PM

Bush warned us about this and as I remember Harry Reid and the democrats had a talk with Roosevelts statue or some corny bullshit like that

bluegrass on February 4, 2010 at 7:49 PM

So, it is not a matter of deciding about a bailout.

It’s a matter of refusing to return money stolen from Social Security funds.

Money stolen from my FICA taxes.

And guess what. The men who made it possible are all wealthy or died wealthy.

alice on February 4, 2010 at 8:00 PM

just in time to cut Gen X bens again right? the frakkers!
Tea Party Patriots – Time to Start the Countdown

ginaswo on February 4, 2010 at 8:49 PM

If anyone is interested in seeing what the left is pushing as a solution to Social Security, you need to check out Retirement U.S.A.

It’s the brainchild of 5 lefty orgs (SEIU, AFL-CIO, EPI …) that have come together to find a fix to the current retirement system.

They want “UNIVERSAL, SECURE, AND ADEQUATE,” retirement for all, even if it means subsidizing those who haven’t managed to save enough on their own. It’s like Social Security part 2. It’s in the works and it doesn’t look pretty.

Desert Gardens on February 4, 2010 at 9:27 PM

How would you like to be the last man in America to have a job? Geez….you’d have to pay for everything.

BobMbx on February 4, 2010 at 9:40 PM

It’s all Bush’s fault. He tried in 2003 to start reforming SS but nooooooo, the dems said everything was fine and fought it tooth and nail. Liberals are behind every problem this country has.

Kissmygrits on February 4, 2010 at 9:44 PM

Social Security has it roots in progessive (AKA Communist/socialist) legistlations, but on the whole it was not a bad idea in its orginal form. It was a time when investing in stocks each week at payday had proven then as now, a dangerous system of saving for the future, after the stockmarket crashed. The nucelar family that had supported an elderly family memeber was unravialing, leaving many unable to work in old age poor and homeless.

Originally people were suppose to pay a small part of each paycheck into the government fund and when they retired receive a pension that insured they had something to live on if they had not provided for their old age when they were able to work.

Of course all that money was too much of a temptation for politicians to ignore, especially in those progressive times, so they began borrowing some of it, then as in today, they just took it and toss in IOU’s written of bathroom tissue. Worse they began using it to pay for social programs like SSI (another form of welfare), and real or claimed disablities.

Now it is broke and going under with no help in sight, except making the tax payers pay a higher taxes to cover the stolen taxes they already paid or find a way to grab their personal retirement funds.

Could it have been different if they had kept the greedy hands of congress out of the social security cookie jar?

We can look for Texas for that answer. Teachers in Texas are exempt for paying into Social Security and instead pay into our own Teacher Retirement System, that for the most part was based on the original Social Security law.

As I understand it there was a loop hole that exempted academic professors and teachers from paying into the SS fund. Why it is that way I don’t know, but it must be unchangeable, or at least it is in Texas. Texas is a republic tied to the United States by a treaty, so a lot of things are seperated in what we do or have from the way things are or done in other states.

The one of the big differences between the TRS and Social Security; TRS funds are not accessable to the legistlators, unlike the SS funds are to congress. TRS is stable and has adequate funds to meet the needs today and far into the future. The fund is not used to pay for welfare related programs nor to pay out diabilites.

Teachers penisons are based on what they have paid into it, not on the highest year of income. There are provisions for a member to buy retirement years or to transfer other retirement pensions into it.

It might be of interest to note that the baby boomers are not a concern. The reason is simple. TRS is not running a ponzi scheme where a smaller number of younger workers are trying to pay the SS penisons for an increasing number of retiries.

The only way to reform social security is to destroy it and start over with one that does only what it is intended to do, save from embezzlement of its funds by congress. Let there be a way to enroll the younger people, and the goverment to figure out a way for them to manage their ponzi scheme without them.

Franklyn on February 4, 2010 at 10:32 PM

The deficit is a big problem but the real tax and spend issue is entitlements.

The proper analogy for the US and other “rich” countries is the man with a syringe in his arm from which a rubber tube runs into his mouth. He survives by sucking his own blood. Well, he survives for a while and then the fainting fits come. He can only be kept alive with food donated by outsiders and those outsiders will eventually call the shots. That’s what is happening with the Chinese and other buyers of US debt. Obama is just making sure he sucks most of the blood now, while it is still available.

westerncanadian on February 4, 2010 at 11:23 PM

Not to worry. Since Zero has sold our future to the Red Chinese when the ChiComs show up to collect those humongous debts they’ll simply reallocate the retirement centers to chop shops “harvest for parts.”

viking01 on February 5, 2010 at 12:03 AM

I’ve got no problem with that. However, having some experience with Fortune 500 machinations to get rid of 55-60 year old scientists who have achieved high compensation levels and can be replaced cheaply, I doubt there will be much of a job market for 67 year old workers unless you are talking about Walmart greeters.

a capella on February 4, 2010 at 4:41 PM

I have a cousin in that same boat. 3M, engineer, work there for life? Not anymore.

That’s got to change, soon. The sheer numbers of today’s generation taking worthless majors, would say the older generations would have to become a hot commodity someday. It’s not like Junior, with his Communications/minor in Moron-Studies degree will design the next 3M product, cure the next disease, or such.

Then again, looking at companies like GE, maybe the Moron-Studies degree holders are designing the latest products, as long as they last, now…

MNHawk on February 5, 2010 at 8:01 AM

Happy days are here. Social Security can now tap into the Social Security Trust Fund, and save itself. Trust Me!! /sarc

Dasher on February 5, 2010 at 8:18 AM

No doubt G. W. Bush will get blamed for this, since he didn’t force privatization.
But, it would still need to be bailed out with the failure of the market under Obama.

Cybergeezer on February 5, 2010 at 8:39 AM

Adjusting SS retirement age by one month a year would have worked 30 years ago. It’s way to late now.

An immediate 3 year jump is needed then we can start adjusting by one month a year.

Second, SS needs to be adjusted by inflation, not by the rate at which incomes increase.

MarkTheGreat on February 4, 2010 at 5:06 PM

Or…We just start requiring a clean drug test to participate in any entitlement program.

DFCtomm on February 5, 2010 at 8:44 AM

So, what to invest in? Spices? A cow and some chickens for the back yard?

NTWR on February 4, 2010 at 1:49 PM

Yeah, that is exactly what I would recommend, and if you don’t have a backyard suitable, then invest in that first. I hear now is a good time to buy.

DFCtomm on February 5, 2010 at 8:48 AM

I have a cousin in that same boat. 3M, engineer, work there for life? Not anymore.

That’s got to change, soon. The sheer numbers of today’s generation taking worthless majors, would say the older generations would have to become a hot commodity someday. It’s not like Junior, with his Communications/minor in Moron-Studies degree will design the next 3M product, cure the next disease, or such.

Then again, looking at companies like GE, maybe the Moron-Studies degree holders are designing the latest products, as long as they last, now…

MNHawk on February 5, 2010 at 8:01 AM

Won’t happen as long as we’re still flooding the market with over a million legal H1-B visa holders a year. Most of those have some form of hard science or engineering degree.

DFCtomm on February 5, 2010 at 8:51 AM

“Now who’s bull shitting who?”
http://giveusliberty1776.blogspot.com/2010/02/fyi-social-security-scam.html
& this rocks too because it is related:…..
http://www.youtube.com/watch?v=d0nERTFo-Sk

meanwhile the IRS is packing heat!!!

lobosan5 on February 5, 2010 at 12:56 PM

Won’t happen as long as we’re still flooding the market with over a million legal H1-B visa holders a year. Most of those have some form of hard science or engineering degree.

DFCtomm on February 5, 2010 at 8:51 AM

It’s disgusting to me how lazy American kids are.
I encourage my students to avoid the BA degrees & get a BS in something.
You don’t even have to have a hard science major-just take some hard science & math as electives.
I’m not a genius, but my BS is way more valuable than the PE’s teacher’s BA in physical ed.
And I will always be able to find a decent paying job, unlike a phy ed major.

Badger40 on February 5, 2010 at 1:31 PM

daesleeper on February 4, 2010 at 1:47 PM

Saaaay, isn’t it the customary thing to have them pay for dinner and a dance first before they do that kind of thing to us??

Don’t get ahead of me, but I *already* know their solution:

CAROUSEL!!</a.

itzWicks on February 5, 2010 at 3:46 PM

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