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tenderfoot

(8,424 posts)
Wed Jun 22, 2016, 08:34 PM Jun 2016

Social Security Still Isn’t Broke, New Report Confirms

Another conservative talking point goes down in flames...

Obama administration officials used the release of a report on the program’s finances to amplify calls to expand benefits.

Although the findings of the annual report on Social Security’s finances are not surprising, the Obama administration and progressive groups are already seizing on it to support their claims that Social Security’s shortfall is infinitely manageable. In fact, they argue, the distinctly non-apocalyptic assessment from Social Security’s nonpartisan actuaries shows that the country can easily afford to both restore the program’s solvency and expand benefits.

<snip>

Social Security is under some financial strain from the retirement of the large “baby boomer” generation. Starting in 2034, Social Security will only be able to pay 79 percent of promised benefits, unless Congress acts to increase the program’s revenues or reduce spending. (Congress has never failed to address the program’s funding gaps in the past.)

That shortfall will likely be a cause for concern in the coming years, but it is hardly the crisis that many prominent Republicans have made it out to be.

For example, former GOP presidential candidate Sen. Marco Rubio (R-Fla.) said in March that “Social Security will go bankrupt and it will bankrupt the country with it.”

<snip>

In reality, Social Security’s costs are currently equal to 5 percent of the country’s gross domestic product — or the total value of goods and services produced — and is expected to peak at about 6 percent of GDP.

Colvin drew attention to those figures at Wednesday’s press conference.

“That one-percentage-point increase to sustain Social Security is surely manageable,” Colvin said.

Colvin also noted that the cost bump for the baby boomers’ retirement is significantly less as a share of the economy than the increase in public spending it took to provide the baby boomers with public education in their childhoods.

more: http://www.huffingtonpost.com/entry/social-security-isnt-broke_us_576ad196e4b0c0252e780295?section=

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Social Security Still Isn’t Broke, New Report Confirms (Original Post) tenderfoot Jun 2016 OP
Consider the trust fund. Igel Jun 2016 #1

Igel

(35,193 posts)
1. Consider the trust fund.
Wed Jun 22, 2016, 10:52 PM
Jun 2016

It has about $2.8 trillion in it.

It's special issue treasury reserve notes.

The current projection is that those notes will have to be redeemed fully by 2035. They expect fund SS by current revenues and interest until 2019. Let's assume the projections are good. Then from 2020 to 2035, 15 years, the US government will have to pay back and disburse $2.8 trillion. That's about $187 billion per year.

That can come from cutting expenses. Raising taxes. Or shifting the debt from in-house to publicly held. Or just printing money.

It'll be interesting to see what the Congress does. The first puts the federal government in the same straits as states during the recession--cut some programs to fund entitlements or raise taxes to continue programmatic spending and also fund entitlements. The third option just increases debt--when running for office, the President said he'd dispose of the deficit because that's what voters wanted, but as soon as he was in office he decided that the deficit wasn't just manageable, it was a good thing. Otherwise he'd have had no money for many initiatives. The fourth is just inflating the money supply which, if not done during deflationary periods leads to price inflation (which requires greater COLAs which makes it necessary to liquidate the SS trust fund debt even fast which leads to printing even more money...).

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