Yes, we can fix Social Security (but it won’t be pretty)
Under the current rules, the maximum taxable earnings for Social Security in 2012 is about $110,000. Some argue that an easy fix would be to simply raise the cap on Social Security taxes to include higher wages.
Baker, of CEPR, proposes raising the cap to around $190,000, reflecting the growing wealth at the top of the income scale. Raise it higher than that, he said, and wealthy earners will just start finding ways to dodge it.
But others say that it’s unlikely politicians will propose raising taxes on high earners now, when many expect those taxpayers to already see increases as part of the fiscal cliff negotiations.
“The timing of it just seems kind of awkward,” Auerbach said.
Another option would be to add an across-the-board increase in payroll taxes that go toward Social Security. Although that would help solve the system’s future funding woes, experts say it’s also likely to be a hard sell in these tough times.
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Slight problem with simply raising the cap on FICA/SECA – even though SocSecurity benefits are quite progressive, even the top dollar increases one’s benefit.
Conversely, if wages and benefits become unlinked, there goes SocSecurity’s best defense – that it is not just another welfare program.
Steve Eggleston on December 25, 2012 at 9:48 AM
Why not just up the eligibility age a couple of years for everyone under, say, 50? Seems easy enough to me.
petefrt on December 25, 2012 at 9:49 AM
Better solution: Privatize it.
petefrt on December 25, 2012 at 9:50 AM
Or better yet, name for what it is. Generational theft that makes slaves of other people’s children to pay for a benefit that is long past its time. Raise the age of eligibility to 78 and it will closer to the original. Index the age based on life expectancy.
astonerii on December 25, 2012 at 10:08 AM
By the way, social security is in its base form is a detriment to our nation’s well being. It should be totally dismantled and ended and those in need transfered to the care of those who should be responsible for them. Themselves, immediate family, extended family, friends, community and charity.
astonerii on December 25, 2012 at 10:11 AM
Let folks NOT give the money to the government and let them chose where and how much of it, if any, to save or invest for retirement or old age.
Shy Guy on December 25, 2012 at 10:12 AM
The left managed to make that the moral equivalent of killing babies before birth. OK, bad example…
But if all that money were in private hands, it would have to go somewhere. Those opposed to the risk could easily put it into FDIC insured bank accounts, eliminate risk and, over decades, earn a greater rate of return. Those willing to tolerate more risk would drive up the price of securities, putting a lot of cash into pension funds, 401k’s and even the IRS.
trubble on December 25, 2012 at 10:13 AM
Euthanasia at age 70. It would be patriotic and salve the hatred of Gen Whine.
davidk on December 25, 2012 at 10:31 AM
Harry Reid said there’s nothing wrong with Social Security. Harry wouldn’t lie to me, would he?
/lib
Kraken on December 25, 2012 at 10:31 AM
He hasn’t told the truth about whether or not he’s a pedophile.
davidk on December 25, 2012 at 10:32 AM
Bush was right….but trubble is right, the left screwed that up big time
cmsinaz on December 25, 2012 at 10:50 AM
http://legalinsurrection.com/wp-content/uploads/2012/12/Bumper-Sticker-Charlottesville-VA-entitlements.jpg
davidk on December 25, 2012 at 11:18 AM
Just cap what is paid out to what is taken in.
jhffmn on December 25, 2012 at 11:24 AM
The problem there is that, while in the long run it would help SS solvency, until you had all the opt-outs retiring, you would not see savings, but further shortfalls.
Selling a fix that doesn’t help until 30 years out is a tough row to hoe…
JohnGalt23 on December 25, 2012 at 11:28 AM
Hmm… how to save SS? How’s about in say, 5 – 7 years (to give people time to get prepared), shut the whole thing down. Those who are over a certain age would continue to get their expected ‘benefit’ while everyone else gets cut a check of however much money they’ve paid into the system.
You’ve paid in $40,000 over the years? You get a $40,000 check from the government, right now and nothing else in the future. You paid in $10 because you just started working? You get a $10 check right now and nothing else in the future.
You’re between say, 55 – 65? You get a paper telling you how much your expected benefit is (under the current system) and you have to option to take it all now or have it paid out in installments over 20 years.
You’re over 65? Nothing changes. You get the same stinking benefit you’ve had. Boom, the system is finished.
No one can claim the money they “paid in” was taken from them. And the government gets out of the business of robbing future generations to pay for someone else’s grandma’s retirement.
theblackcommenter on December 25, 2012 at 11:36 AM
A bit drastic. Phasing out SS is the way to go. And it can be funded, at least in part, by the savings from eliminating Big Bird. Dept. of ed., EPA, etc., etc. As the phase releases more and more people from the SS burden, the monies realized can pay off the debt. (But I’m all for telling the Federal Reserve, “Too bad you made this poor investment.”)
I’m sure there’s holes in what I propose; I don’t know that much about the business of economics. But on the face or it, it sound like a place to start.
davidk on December 25, 2012 at 11:48 AM
This problem will be “solved”, as many of of future calamities will be “solved”.
The Federal Reserve will inflate the problem away.
Get your money out of dollar-denominated assets. Any suggestions on how to do so, outside of the obvious, would be appreciated…
JohnGalt23 on December 25, 2012 at 11:58 AM
What is drastic about it?
theblackcommenter on December 25, 2012 at 12:00 PM
http://www.shtfplan.com/
davidk on December 25, 2012 at 12:01 PM
SS can be fixed, but the progs won’t allow it. Its their sacred cow. The Bush plan was good for those who wanted the private option. Fix SS, but give a private option to the people. In this aspect, I’m pro-choice.
tommy71 on December 25, 2012 at 12:32 PM