Bernanke: Baby Boomers Will Strain U.S. (SocSec/Medicare)

[NVMojo]

WASHINGTON (AP) - Unless Social Security and Medicare are revamped, the massive burden from retiring baby boomers will place major strains on the nation's budget and the economy, Federal Reserve Chairman Ben Bernanke said Wednesday.

"Reform of our unsustainable entitlement programs" should be a priority, he said in prepared remarks to the Economics Club of Washington. "The imperative to undertake reform earlier rather than later is great," Bernanke added.

It marked the Fed chief's most extensive comments to date on the challenges facing the United States with the looming retirement of 78 million baby boomers.

In his remarks, Bernanke did not offer Congress and the Bush administration recommendations on how the massive entitlement programs should be changed. Efforts by the administration to overhaul the Social Security program - once a centerpiece of President Bush's second-term agenda - sputtered last year, meeting resistance from Republicans and Democrats alike.

more...

http://www.lasvegassun.com/sunbin/stories/invest-corp/2006/oct/04/100408486.html

[Human Torch]

1. Bush tax cuts for the wealthy placed major strains on the nation's budget

...and economy.

Did Bernanke mention tat in the article?

:evilgrin:

:patriot:

[SharonAnn]

68. Greed of the wealthy and maga-corporations are bankrupting U. S.

[aquart]

2. Worthless jackass.

[saigon68]

102. He is on his knees to service the NEOCONS to take care of their

Arousal over greed

[LiberalEsto]

3. If companies didn't rip off pensions

or otherwise shaft people, or lay them off from jobs they had worked in for many years, a lot more people approaching retirement would be in better financial shape.

But yeah, let's just blame the boomers once again. It's all our fault for being born.

[Bacchus39]

9. well, that doens't address the veracity of the claim does it?

something will have to give to maintain the SS program. there are 300 million people in the US and if 80 million are retirement age or older in the next 10 years. when you factor in children, you are only going to have 2 workers for every retiree.

[Demit]

14. That's what the rise in SS withholding in the 80s was for.

To account for the bulge of baby boomer retirees. That money should be there. Except the government decided to spend it and say oops! It's not there, folks!

[pampango]

22. The money is there. It is my understanding that they don't just

put it under a giant mattress, though. I believe that they actually lend it out and make interest on the funds. Guess who they lend (not give) it to? If your guess was the federal government, you win a prize. What does the government do with the borrowed money? Anything it wants to do. SSA is left with a bunch of IOU's, which is bad, but if government bonds ever become worthless we will have bigger problems than where our next retirement check is coming from.

Like many (all!) government programs the future cost of Social Security and Medicare keeps escalating over what projections from 10 or 20 years ago showed. I used to work in a local SSA office years ago. I must be getting old now. It used to be just the "old guys" who constantly complained that they had paid millions of dollars into the system and "this is all I'm getting back." Now it is my generation doing that complaining.

The problem of too many retirees (soon to include me) and not enough workers to support them, is a common problem in the "old" countries of Western Europe and Japan. Social Security here has always been transfer program from current workers to current retirees. The trust fund is there but it would disappear in a heartbeat if current workers ever feel they are taxed too much. (I tell my son that I will start being nice to him as soon as I retire and he enters the work force;)

[Demit]

37. Yes. Our IOUs should have every bit as much validity as China's.

I know and you know, but the poster I was responding to is already starting to buy into the divisiveness that Bush and his minions are pushing. Younger people are being encouraged to resent older people for making them pay for our retirement. We have to keep hammering at this: We PAID EXTRA into the fund—our whole working lives since the 80s—and the government has raided the fund to pay for operating expenses so that they could boast they didn't have to raise taxes. It's crappy enough when corporations make promises to you and then renege. When your government tries to do it, it sucks especially bad.

[LiberalEsto]

25. So what should we do? Die? nt

[The2ndWheel]

60. I find this to be the perfect

way to describe progress. Everything that we've done for the last few thousand years has been to artificially increase our health and life spans.

Yes, you will die. Although, nothing could be more progressive than to fix death. I mean, what should we do? Die?

[SharonAnn]

35. The Social Security system is fully funded for decades into the future

The Old "Social Security and Medicare" Trick
By Dean Baker
t r u t h o u t | Perspective
Wednesday 04 October 2006

As every informed person knows (except those who get their information from PBS, NPR,
the Washington Post or some equivalently shoddy news source) the Social Security system
is fully funded for decades into the future. The program is supported by a designated tax,
which together with interest on the government bonds held in the Social Security trust fund,
is producing a surplus of almost $200 billion in the current fiscal year. The most recent
projections from the Congressional Budget Office show that the program can pay all
promised benefits for the next 40 years, with no changes whatsoever .

Even after 2046, when the program is first projected to face a shortfall, it would still have
sufficient funding to pay a benefit that is almost 20 percent higher (adjusted for the cost of
living) than what current beneficiaries receive. The tax increase that would be needed to
keep the program fully solvent for its 75-year planning horizon is only about half the size of
the costs of the wars in Iraq and Afghanistan.

These are the undisputed facts about Social Security. Given the immense popularity of
Social Security and its incredible efficiency (its administrative costs are less than 1/20th the
size of private sector pension plans) there is little reason to talk about cutting or privatizing
the program.

Since the opponents of Social Security cannot argue against it based on the facts, they
use tricks. One of the most popular is to combine Social Security with Medicare and
Medicaid as "entitlements" and then complain about the "entitlement crisis." This is exactly
the route chosen by Washington Post columnist Sebastian Mallaby in a recent column ("A
Party Without Principles," October 2, 2006; A19).

(Read the rest at the link below)

http://www.truthout.org/docs_2006/100406P.shtml

[pampango]

36. "These are the undisputed facts about Social Security."

Unless you get your facts from some place other than a Truthout editorial. I never trust PBS, NPR, or
the Washington Post (unless they are telling me something that I want to hear.)

[anotherdrew]

43. truthout and Dean Baker are right, you would know it too if you read up

as a previous poster put it, just let our IOUs be as valid as all the rest of the treasury debt.

[Bridget Burke]

66. If you don't trust PBS, NPR or the Washington Post....

Whom do you trust? I don't trust any source 100%, but I recognize some as more reliable than others.

Let me guess: Fox?

[NVMojo]

53. very informative, SharonAnn, thanks for posting!

[Igel]

56. On paper. With paper.

Paper backed by the full earning power of the American taxpaying public.

Hence the problem.

[Dune]

77. shell game

Agreed, but most people don't realize that due to our unimaginable national debt. That SSN lock box is in fact in China. Chinese banks are the repository for our social programs. IRONY!!!

[Peace Patriot]

72. Okay, here's a plan for you, Bacchus39: Bust up bad actor corporations

and seize their assets for the public good. Focus on war profiteers and the other beneficiaries of the corporate oil war. Do like Venezuela (and other sensible governments): nationalize oil and other natural resources, and devote the profits from their use to the public good. PROPERLY AND FAIRLY TAX corporate land-holdings (of those corporations that we permit to continue to exist), and excessive wealth. Finally, prosecute the top layer of the Bush Junta for war crimes, but don't put them in jail; seize their property for the public good (and put them to public service, say, cleaning bedpans in Veterans' hospitals). We'll find a gold mine there, I think. (Been watching Halliburton stock?)

Plenty of money and wealth around. Real dirty money. And unconscionable concentrations of wealth. Bust it up. Seize it. Redistribute it. Problem solved.

And none of this is communism. Just common sense. In fact, busting these monopolies of wealth and power would greatly invigorate the business sector--with competition, innovation, and REAL "free markets."

Most of what we're looking at is corporate WELFARE--and a free ride for the super-rich--at OUR expense! End it! And you could probably even double Social Security benefits AND have universal health care.

To achieve this reasonable solution, though, we have first to....

----------------------

Throw Diebold, ES&S and all election theft machines into 'Boston Harbor' NOW! (--they are not just (s)electing Bushites; they are ALSO (s)electing Corporate Democrats.)

Bust the Machines--Vote by Absentee Ballot this November!

If everyone who despises the Bush Junta--60% to 70% of the American people--votes by Absentee Ballot this fall, the reign of these diabolical machines will be OVER!

And real reform can begin.

[RaleighNCDUer]

104. There ya go. We are facing the modern equivalent of the 19th

century monopolies that were responsible for the greatest (before today) inequities in wealth distribution in American history. And who did something about it? Republican Teddy Roosevelt, with his trust busting anti-corporation reform. When the great depression and WWII allowed the corporations to get back on their feet, they determinied to take over the republican party to prevent any such reforms from ever happening again. so today the republicans are fimly in the corporations' pockets, and it is up to us to come up with a Teddy Roosevelt or three to knock em down again.

[stopbush]

4. Wow! What a surprise. Who could have possibly seen such a looming

expense? No one could have imagined that this would be the case. In fact,
nobody had even heard the term "baby boomers" until last week.

[SoCalDem]

5. B U L L S H I T

We paid EXTRA since St. Ronnie of Raygun was president...so that the "greatest generation" would have a raise, and so that WE would be pre-paying extra for our own older years..

The congress STOLE our money and most recently GAVE it to rich people in the form of "tax-cuts"..

All that has to happen is for the money they "borrowed" for decades, to be paid back..Things will be hunky dory then :)

[AnneD]

21. I remember very clearly when that happened....

Had a discussion with an elderly neighbour about it. I told him that I didn't mind paying the extra now to prepare for my retirement but that I really wanted it to be set aside and not used for the gemeral fund (I pre dated Gore by quite a few years)

[Yupster]

46. For that to happen, the surplus

would have to be stored away from the government because if congress can spend it, they'll spend it.

If they would have taken the surplus and put it into bank cd's or life insurance separate accounts, it would have meaning, but loaning it to yourself and then spending it makes the surplus very meaningless.

[lumberjack_jeff]

90. They're invested in the same bonds that China buys

There are literal, physical file cabinets full of the bonds. The government cannot selectively default on their investors.

[Yupster]

96. The government owes the money to itself

Let's say you have a new car fund and every month you put $ 200 in your sock drawer as your new car fund.

Now one day your teenager needs braces and the only money you have is your new car fund. So you take $ 3,000 out of your sock drawer to pay for junior's braces. In its place you leave an IOU to remind yourself that you owe your new car fund $ 3,000.

What if you never pay your sock drawer back?

Did you then default on your IOU?

I guess you did.

Would your other debtors care?

Imagine calling your mortgage company and telling them that you had a new car fund in your sock drawer ("That's nice," and you borrowed money from it to buy braces, ("uh huh",) and now you're not going to pay it back (um - okay".) The only question they will ask is, "Can you make your mortgage payment this month," and when you say "OF course," they'll say "have a nice day," and wish you all the best.

No one would care if you payed yourself back, and no one will care whether the US government pays itself back either.

The accounting mechanism to do it will be folding the trust fund into the general budget. Then the asset of the trust fund will balance out the obligation within the general budget and the two accounting line items will cancel each other out and voila, the social security trust fund will have disappeared. It's just that easy.

[sadiesworld]

107. This is bs.

You are all over this thread trying to convince people that the surplus SS funds will never be repaid. All your arguments have been shot down leaving you with "well...congress will do whatever it wants". Few DUers would argue that congress has been terribly responsive to the American people in recent years, but if we're never to hope for change, what's the frigging point of participating at all?

People GET that SS taxes were raised in the 80's to prepare for the baby boomer retirement and that $ should be repaid. I read your repeated posts as an attempt to convince DUers not to fight for that repayment.

[Yupster]

117. All my arguments have been shot down?

Show me where you think that's happened please.

And to be clear, my argument is that the bonds in the social security trust fund are worthless.

I believe that the congress will do all it can to keep a steady stream of income going out to social security recipients because that is a guiarantee from generation to generation. However, in the future, as in the past, the formulas will be jiggled with to make them less favorable for the recipients.

None of this has anything to do with any bonds in any trust fund.

Congress will pay out what it thinks it's able to long-term. That's true if there are bonds or if there were no bonds.

They are not part of the argument or equation at all. They truly are meaningless.

[Yupster]

45. That's all great, but

the money is gone. Vanished, looted, it's a dead parrot.

Let's say you have 50 k in an account and you project that in 40 years it will grow to enough to cover your retirement.

Now your worthless brother-in-law borrows your money and puts it on red in Vegas and loses it.

You can continue to charge him interest on the money and assume you'll have it for retirement if you want to, but you're just kidding yourself if you do.

You can also whine that if your brother-in-klaw hadn't wated it, you'd be fine if you want to too.

Neither of those things actually addresses the problem though.

The money is gone and it's not going to be paid back.

So what is actually going to happen with social security?

My guess is that in another five years or so the social security trust fund will be folded into the general budget and the social security obligations will then just become an obligation of the general budget.

Since the general budget will then have a social security paper surplus and defecit, the two accounting entries will cancel themselves out and the surplus will at that point magically disappear.

Then congress will either raise the retirement age, increase means testing, lower payments, or whatever they want to and that will be how congress will balance what it pays out with what it's able to pay out. Just my opinion of course.

[lumberjack_jeff]

89. It's no more "gone" than the bank considers your mortgage to be "gone".

Less so actually, because the government is obliged to honor its debts. It can't declare bankruptcy.

The inherent defeatism in this argument is what will cost US workers $1.7 trillion dollars. It provides cover to the Republicans who would like to keep those deposits for corporate and estate tax cuts.

When retirees outnumber workers, the excess payroll tax revenue source will dry up anyway. It isn't a dramatic additional burden to repay government's obligations.

"Entitlement" isn't a perjorative term. It means that we are entitled to benefit from the system we've excessively funded for the last 23 years. We're entitled in the same sense the bank which holds your mortgage is entitled.

[Yupster]

97. Sorry but AI don't get the mortgage analogy

If you don't pay your mortgage then the bank has the legal right to seize your home. Same thing with any other loan you have. It's collateralized by some asset which can be seized if you don't pay.

So if the government doesn't pay the trust fund back, what's it supposed to do? Seize the National Parks and sell them for the amount of the debt? It doesn't have that authority. It doesn't have any authority. The whole bond idea is just a meaningless gimmick.

The social security payments are backed by the word of congress. That's the truth whether there are bonds or aren't bonds. The bonds make no difference at all.

When the congress sees they can not honor their long-term commitments, they will change the retirement age, benefits formula, or whatever like they've done in the past.

None of that has anything to do with any worthless bonds.

[w4rma]

100. What's it supposed to do?

Raise taxes on the ultra-wealthy, who are the ones who have been profiting from the social security trust fund, at least until it is all paid back.

Not complicated. Easy to understand. It only affects less than 5% of the U.S population. Very simple.

[Yupster]

101. The "it" in my post was the

social security trust fund which does not have the authority to raise anyone's taxes, be they rich or poor or in-between.

The congress does in fact have that authority which is my whole point.

We will get whatever benefit congress votes to grant us. It is completely up to them regardless of whether there are any bonds in any trust fund or not.

The bonds are truly immaterial to the whole situation. Congress will do what it wants.

[RaleighNCDUer]

114. In case you've forgotten,

we are the fucking government. They will do what we tell them to, and even the typical republican does not want them to fuck with SS. If they do, they will be put out of the government. If they refuse to go we will throw them out. If they resist being thrown out, then it's 1776 again.

This is what the boston tea party was all about.

[Yupster]

118. Yeah - we are the government

Congress would sure never do anything without my permission.

The congress has changed the social security formulas many times, the latest time just 20 years ago. They raised the retirement age from 65 to 67. I didn't notice any marches on the capital or bloody coups. Why would you think there will be one the next time?

Most everyone realizes that some tweaking will have to be done just because of longevity issues alone.

[lumberjack_jeff]

109. "worthless IOU" - George thanks you for repeating his meme.

A government bond is not worthless. :mad:

They CAN honor the promises they've made, and they will.

The banks mortgage is collateralized by your house. Workers' social security trust fund is collateralized by "the full faith and credit of the United States".

It is necessary from time to time to tweak taxes and the benefit formula so that the trust fund is never exhausted, thus requiring general fund revenues to finance benefits. Vandalizing the formula to set up the conditions where they can write off that debt is unacceptable.

Having this argument here, of all places, frankly pisses me off.

[RaleighNCDUer]

113. You're talking like the government has no other source of

revenue than Socail Security.

If the government needs to replace SS funds, because of payments to outside entities (like the war and billionaire tax cuts), then it needs to replace those funds from outside sources -- in other words, from money that would go to corporate welfare, the war and billionaire tax cuts. It's a simple matter of moving the numbers on the ledger. Any bookkeeper could do it, if they don't subscribe to supply side theory.

[Yupster]

122. That's my whole point

Don't you understand?

My point is that the bonds in the social security trust fund have no meaning.

When the government needs money for social security they will take it from the general funds if they want to.

If they don't feel they can take that much from the general funds, then they'll change the benefit formulas.

Don't you see that the bonds are meaningless?

Congress will take funds from the general budget or they won't. The decision has nothing at all to do with whether there are bonds in the trust fund or not.
They are meaningless to the argument.

[davekriss]

110. That is the exact truth of the matter

"The congress STOLE our money and most recently GAVE it to rich people in the form of 'tax-cuts'."

And, given this Regime's penchant for stealing elections, ignoring the Constitution, and having their way with the world, I anticipate that Bush will have his way, get his "reform", and thereby protect the theft at the expense of us "non-rich".

[Star]

127. Exactly right!!

Every time I hear that SocSec will be strained by the "baby boomers", I want to scream. While the "baby boomers" are working, they're putting more money into SocSec, which should be used to fund their own retirement.

That's the way the system is supposed to work, but "our" money has been spent on so many other things, including the invasion of Iraq, that its no longer available to us. Its not that the money wasn't there, its that it was spent on other things.

[DavidDvorkin]

6. So the coordinated attack resumes

Bastards.

The solutions are easy and well known. They start with eliminating those evil tax cuts, and they continue with eliminating the cap on SS taxes and making the tax itself progressive rather than flat.

[Selatius]

7. It is easy. Simply bump up the FICA cap to 120K from 90K at present

The extra revenue would be enough to solve solvency issues, and if the damn Republicans would stop raiding the Trust Fund to support their unsustainable spending policies, then the Fund would be in even better shape than now.

[pinto]

13. That would be a good first step, with immediate results.

[Yupster]

47. But only if the surplus is taken away from the government

if congress is able to spend it, it will - regardless of how big or small it is.

[Demobrat]

8. Well who could have known

back in the eighties when SS taxes were raised to prevent just such a scenario, that the money would be stolen?

[RaleighNCDUer]

10. Maybe we better stop spending so much

on unnecessary wars and giveaways to the top 1%.

[Selatius]

11. I second your motion. n/t

[KansDem]

103. Yeah, Bush is stuffing $11 million AN HOUR down the Iraq rathole.

That money could do a lot for Social Security and Medicare, not to mention health, education, and the environment.

[pinto]

12. The Republican agenda is *not* reform, it's dismantlement.

They are using the baby boomer retirement crunch as a tool to scare voters into supporting abandoning the Social Security program. Not surprising, overall, given the recent Republican history of using over hyped fear as a political tool.

[NVMojo]

16. you got that right, pinto, it's all about GOP's dismantlement

of perceived "entitlements" that we've all paid for and they have spent!

[RaleighNCDUer]

17. They believe that entitlements should be a matter of birth,

not of citizenship.

The new aristocrats.

[pinto]

23. Great point. They've not only sent our twenty something's

overseas, they've sent their Social Security funds with them as well...(or to be more accurate, *transferred* their Social Security funds to Halliburton, Chalabi, et al.)

[schmuls]

27. Man am I steaming! Why shouldn't those who have promoted

this bullshit be hauled off to prison? Is it any different than a banker gambling with your saving account and losing it all? But it's o.k. to lose all that money in Iraq, now isn't it? At least that would have paid a small pittance to people who lost their pension. GGGGGGGGGGGGGGGGRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGRRRRRRRRRRRR

[Yupster]

48. Certainly if a company did what the US government

has done for the last 20 years, therir accountants would be in jail.

[sinkingfeeling]

15. Yeah, and the baby boomers are the ones who have paid and paid into

these programs to keep them afloat while the GOP has raided the piggy bank to fight their 'wars' and give $billions in tax breaks to the wealthy and corporations. So take a long walk off a short pier.

[pinto]

28. (aside) Don't forget to vote, and bring a friend.

:thumbsup:

:kick:

[jaysunb]

29. You got that right !

We've the most productive group in the history of the program, and over half will not even be dependent on the fund for our major source of retirement security.
Blame Republican tax cuts for the wealthy , costly wars, and corporate fraud, but not those of us who dutifully paid in for the last 45 years.

[MichiganVote]

33. Amen to that.

[NEOhiodemocrat]

18. Entitlement Program? ENTITLEMENT PROGRAM!!!

Argggg, and who has been paying into this for how many years? They had better leave Social Security alone..They took the money out of it they can take some of that $$$$$$$$$ they waste and pay it back. I am all for raising the amount of income you pay on up, and way past $120,000 like someone mentioned. I am tired of the middle class and poor taking the blunt of every program this administration attacks.

[poofer]

58. For the ones who paid in

Thats what this was supposed to be for us that worked till we could retire not for all the people I know that are collecting because they are SUPPOSEDLY disabled! They must find a crooked stupid doctor or are really good at faking. They are not getting trained for something they can do, at least not around where I live.

[JCMach1]

80. Means test it and make the wealthy pay up to 50% of income

that should resolve any solvency problems

[grilled onions]

19. Entitlement???

Gee I wonder what that chunk of money they take out of every paycheck is for. If they want to check entitlement they should look in their own speical accounts where they get the same pension for life,free medical care,spouse benefits too!! They can almost name their hours to work,never worry about outsourcing,downsizing or losing their job because of age. They have managed to maintain profits,benefits,perks and their financial portfolio alone can allow them peace of mind in their golden years. Far too many baby boomers are struggling with caring for parents,housing adult children who find them under employed and struggling with their own iffy careers as jobs disappear to India and other places and the cost of living flies off the chart.:mad:

[xchrom]

20. oh i see -- it's the baby boomers -- not useless wars --

or spending too much on the pentagon -- or raiding the trust fund -- or misplaced tax cuts for the wealthiest americans -- or raided and dumped pension funds in private industry -- or americas inability to make corporations pay their fair share into the tax system -- etc?

just my short list.

there most certainly does not have to be ANY short coming to social security.

[Megahurtz]

24. Bull-Fucking-Shit!!!

:argh:

If the Boomers are working and contributing to the Social Security Tax,
then the money is there for them!

And if it's not, it's because the ReThugs are robbing it,
so they need to come up with the money.
Like stopping your Heinous Wars for instance?

Hell, get it from Cheney, he's rich enough!



Happy Halloween.

[Yupster]

49. "They need to come up with the money,"

yeah like the government happens to have an extra $ 2 trillion to come up with.

Saying it's not right how it was looted isn't going to bring it back. It's gone.

[Megahurtz]

83. Well stopping the Iraq War will

save an extra, like, how many billions??? Do you forget?
And they need to stop sending billions to Isreal, and "whoever fucking else" other Countries.

They have ways of getting it, they just won't do it.

[Yupster]

99. Yes every problem can be solved

but that doesn't mean they will be solved.

This problem is an awfully big one with lots of zeroes.

The amount of the unfunded obligations dwarfs any savings that can be made by cutting foreign aid or even ending the war. This problem is in the trillions and medicare is an even bigger problem than social security.

[RaleighNCDUer]

115. Bullshit.

The military budget dwarfs the annual SS payout and the medicare payout combined. And more money pours into SS and medicare with every paycheck that is cut in this country. Every. Single. One.

At the very worst case scenario, sometime after 2040 the government will have to begin making SS and medicare payments from the general revenue, because more will be going out than coming in. We're talking a few billion a year. But who will be collecting all that? The boomers will be dying in droves by that time.

You wouldn't happen to run a brokerage firm, would you? That's who will be raking in the bucks if Bushco gets away with privatizing SS. Higher overhead, less return on every dollar, and the rich will get obscenely richer. That's what it's all about.

[Yupster]

119. In the 2005 budget

the social security payments were 21 % of the money spent by the federal government.

Medicare spending was 14 %.
Medicaid was 7 %.

The three entitlements were 42 % of the total budget.

The rest was military spending - 19 %.
Discretionary spending 18 %.
Interest on the debt - 9 %.
Other - 12 %.

I have seen pie charts making the military budget much bigger. They do this by making two changes.

1. They eliminate the entitlement spending from the budget.
2. They attribute the interest on the debt to military spending reasoning that if we had never had any wars we wouldn't today have a defecit.

The entitlement spending is an interesting case because the same people who argue that social security is not part of the budget and therefore military spending is more than a third of the budget, are the same people who argue that social security taxes are part of federal taxes and therefore the poor pay a large percentage of taxes. It's a very flexible standard.

The debt part is just silly as anyone could argue if any department of the government never existed, the debt wouldn't be there. You could just as easily say if there was never a medicaid program, there'd be no national debt, but wouldn't it be silly to just add the interest on the debt to medicaid then?

[Yupster]

120. No - I don't run a brokerage firm, and

I am absolutely opposed to any social security privatization plans.

[RaleighNCDUer]

112. How about repealing the tax giveaways to the rich?

If the government is just spending the so-called trust fund, then it is the government's responsibility to re-fund it, and the the place to do that is stop the corporate welfare, the war spending, and the tax cuts to the people who don't need them.

The money is there. We just have to prioritize where it goes.

[pampango]

55. The contributions that we pay into Social Security

are paid right back out to current recipients. Most of them get back much more than they ever paid in, though not to the extent of the generation before them. It works great as an income transfer system from workers to a group, seniors, who were generally poor a generation or two ago.

[Bridget Burke]

67. I already benefited from that "income transfer"...

My father died when I was 4. So I & my 2 younger sibs received Social Security. We hadn't paid anything in yet.

Add me to your shit list.

[Telly Savalas]

125. It's not a negative observation.

Social security transfers income from people who are able to provide, working age adults, to those who aren't (e.g. the elderly and 4-year old children.) Conservatives view this as bad, whereas people who aren't total assholes don't have a problem with it.

[cornermouse]

26. Here's the solution.

Bump them off at the first sign of terminal illness or if the hospital bill exceeds, say, the equity they have in their home.

Think of all the money we'd save. :sarcasm:

[lovuian]

30. Well considering that that the 78 million baby boomers

paid social security out of their paychecks with the PROMISE that the government would take and give them monthly checks... and PROMISE of medicare
seems to me that 78 million voters need to be recognized and Republicans give them what promised...

[flaminbats]

31. I'm glad Bernanke is doing his job!

never mind that interest rates have risen, or that more government bonds are being issued to cover federal spending. Maybe this creep should try doing his job for change, and let us decide when Congress is capable of reforming our safety net.

[bronxiteforever]

32. This little shit said nothing about the implication of tax cuts for rich

when these passed-classic class warfare-rich get everything-middle and working classes screwed

[lumberjack_jeff]

34. Shoulda thought of that when you started borrowing my money, asshole.

If the budget weren't running a chronic deficit, it might be possible to repay the debt to retiring workers.

But as spiderman said, I missed the part where that's my problem. I did my part. In 1987, the government asked for a BUNCH more money than was necessary to pay for my parents retirement, the idea being that they could set aside the excess in a trust fund so that when I retire it wouldn't overburden my kids and those still working.

We had a deal.

[Yupster]

50. It's only our problem

because the government isn't going to have as much money as they anticipated due to the surplus being looted.

We can pout and insist we get what was promised, but the money's just not going to be there in the amounts we expected.

[lumberjack_jeff]

62. I don't pout.

When someone renegs on a deal, I hold them accountable.

The money exists to finance retirements (I won't be eligible for 20 years) IF the words "full faith and credit of the United States of America" - imprinted on the bonds that the Social Security trust fund has been invested in - means anything.

If the government is willing to default on their debt, social security is the least of our problems. The trust fund was an investment, not a gift.

[Yupster]

65. Read my post 45 for my guess

as to what will happen.

The government won't default. It will just change the benefit formula like they've done about once a decade since social security was enacted.

You'll get something for sure. It just isn't going to be what the cutrrent bendpoint formula promises. That's nothng specific to you. It's happened to almost every generation.

The whole bonds being saved and paying interest idea though is just nonsense. You're going to get what congress decides to pay you and every once in a while congress is going to jiggle the formula a bit changing the payouts or ages or something. That's just the way it's always worked and that's if there are bonds or if there aren't bonds. The bonds really are completely immaterial to the whole system.

[lumberjack_jeff]

69. They're not immaterial at all

The whole point of social security reform (repub style) isn't to tweak the benefits so that the trust fund is never entirely depleted (defensible), it's so that the trust fund is never accessed (indefensible).

Repaying that $1.7 trillion debt to workers while simultaneously losing access to the revenue stream that their surplus taxes provide will provide a undeniable pinch to the budget. They knew this in 1983 when they created the surplus revenue stream.

Changing the benefit formula in such a way as to assure that the SS trust fund grows forever is;
a) a big tax windfall for the government - corporations rejoice, and
b) default by another name.

[Yupster]

73. Your headline says

the surplus bonds are not immaterial at all, but I can't see anywhere in your post where you address that issue.

Republicans want to destroy the system, not tweak it? Okay, I'll agree with you there.

When they created the surpluses in the 80's they knew there was a problem coming down the road? Yup, I agree with that too.

Not ever paying back the money that's been borrowed is a windfall for the government? Well yeah.

It's also default by another name? Absolutely.

I agree with all of that, but none of it makes the IOU's material. They truly aren't. We are all going to get what congress decides to give us. That's true if thaere are any bonds or aren't any bonds. The bonds truly are immaterial.

So what's happened to all that surplus money that we're supposedly saving for the rainy day we know is coming? Oops. Missiles are expensive you know. It's all just gone - spent. And no, it's not coming back because the guy who owes the money is flat busted - broke.

[lumberjack_jeff]

88. If I promised to pay my child's education from HIS piggy bank...

... which he filled by mowing lawns, then reneg on the deal because I want a new car instead, the presence of the piggy bank, how it was funded and it's current balance are not immaterial - at least not to the kid.

As a parent, I do have the right to spend my kids' earnings as I see fit, but as a citizen regarding Social Security, the elected representatives don't have that right. I reserve the right to elect a new "parent".

The Social Security Trust Fund is not gone unless you're not inclined to collect your debt, and don't take seriously the words "full faith and credit". I am inclined.

The debt owed to workers is roughly 20% of the total debt owed by the government. If they can pay off China, they sure as hell can repay workers. If they fear us as much as they do China, they will.

[Yupster]

98. I'm just having trouble making sense of your post

It's late at night though so it may be more my fault than yours.

First, no you do not have the right to spend your child's earnings however you see fit. As trustee of your child's funds you have a fiduciary responsibility to spend your child's money only for his/her benefit and it must be for an unusual parental responsibility.

For instance, you cannot charge your minor child rent or room and board and use his earnings for that purpose.

However, you could use your child's money to buy him a car or send her to camp.

Does that make sense?

Each state's laws are slightly different on this so certainly don't use this as legal advice, but we just in the last two years had a client of ours get sued by her daughter for just this reason. The 19 year old claimed her mother had misspent part of her money that mom was trustee of until age 21. The judge made mom account for each dollar taken out of the account.

The mother was able to, but the judge still allowed the daughter to choose a different trustee for her account.

Hope that's clear.

On the other hand the elected members of congress, as a body by their votes and the president's signature has every right to spend your tax dollars any way they see fit. That's right in the Constitution. The congress votes to fund programs with our tax dollars. They can even spend more than they get. Lots more.

If the congress voted to appropriate the entire budget of the United States to the purchase of pink lawn flamingos, that would be within their power.

What you can do is try to get a new congress elected two years later, but the votes of the previous congress would be perfectly legal.

It's also nice that you are inclined to collect on the debt. You should vote the right way, and if that doesn't work out for you, then you can make posters and hold them up for cars to see passing you by.

[lumberjack_jeff]

108. I wasn't referring to a childs trust fund

The analogy was to savings created by personal earnings - a piggy bank.

If workers are willing to stand by helplessly while $1.7 trillion is stolen from them, then we deserve what we get. China is owed about that much and they sure as hell wouldn't roll over.

[Yupster]

121. The same rules apply

If your daughter has accumulated $ 1,000 from mowing lawns in her sock draweer, and you decide to spend it at a spa, then you have stolen your daughter's money. You do not have that legal right.

Also legally, the money was not stolen. Congress has the constitutional suthority to levy taxes and spend the money any which way it chooses.

People have the assumption that once their tax dollars go to congress they have some right to decide how it's spent. You don't. Once the money goes to Washington, it's up to the congress on how to spend it.

[lumberjack_jeff]

128. disagree.

3. The right to your child's earnings means that you as a parent can legally collect and keep the money that your child earns. However, there are limitations on this right. Your child's earnings will not be entirely available to you in the following circumstances:

* if you have exploited, neglected, or abandoned your child;
* if your child's income is the result of his or her special talent or athletic ability; or
* if your child's income is the result of a gift or inheritance.

Furthermore, most parents allow their children to keep the money that they have earned.

http://www.teenparents.org/prr.html

But I digress. The social security system was set up to explicitly prevent comingling of the assets. The only loophole in this plan was that the trust fund was limited to what it could be invested in - limited to treasury bonds. It'll take affirmative action to rob those assets. Action which the public, if informed by people who understand the obligation involved, will not allow.

[flaminbats]

92. Clinton made excellent use of our budget surplus..

one reason we had a surplus in the first place was that he took less of the dollars from Social Security to fund the programs in the general fund. But that took two important steps, raising income taxes and cutting discretionary spending. Clinton did both, but he paid the price politically. I believe that was worth it and it took allot courage to do.

I have posted this before, and I'll post it again. I believe there are two ways to keep Social Security and Medicare solvent. One is to slash the available benefits and the other is to raise payroll taxes. Either way voters will oppose this, unless you give them something in return. IMO the solution is making Medicare universal, this way younger..and uninsured taxpayers will at least be getting some reliable coverage in return for helping to keep the system solvent. It also reduces the need for cutting benefits, while only requiring a repeal of the Bush taxcuts to bring back the surpluses. Then it will be up to the Democrats, if we finally win for a change, to insure those surpluses are finally used to make substantial reductions in the national debt. And then these government bonds will actually increase in value.

[Rose Siding]

38. How nuts are they to bring this up now?

Democracy Corps: "Seniors are the most volatile and persuadable group in this off-year electorate and certain to turn out in large numbers and thus the number one target for campaigns in the final month. Although seniors favored Bush by a 5-point margin in the last presidential election, Democracy Corps’ recent senior poll indicates that Democrats are winning the seniors’ vote by 4 points, 45% to 41%. Keeping and building that margin will determine how many seats Democrats win."

However, a new AARP survey finds that 59% of seniors are still undecided for their House races, and 52% for Senate races.

http://politicalwire.com/archives/2006/10/04/will_seniors_be_the_key_to_control_of_the_house.html

[Hope springs eternal]

39. You're forgetting the culture factor

Gay marriage, guns, abortion and God can reel in the seniors. Also, there are a lot of "Reagan Revolutionaries" in this crowd. They did vote the bastard in after all.

[tom22]

40. I have spent a lot of time looking at this.

The Social security system is not fully funded. The surplus provided by our payroll taxes just goes to pay for the unfunded war in Iraq. These nonmarketable 'bonds' which the SS administrators accept as 'payment' from the treasury for use of the SS excess will only be redeemed by our grandchildren paying unacceptable rates of taxation. there is a good solution to the coming crisis. Allow much greater legal immigration and increase the number of workers in the next two decades who will be needed to pay for the boomer retirement.

[Rose Siding]

41. But- bush's SS push was when his numbers first tanked

-not just with seniors (though heavily) but across the board. The more he tried to talk it up, the less they liked it. Seems politically stupid to resurrect the issue in the midst of all their other woes.

[Yupster]

51. Maybe this is evidence that

he's got to get his base back which is pretty horrible for a month to go in the race. His base should have been locked up long ago.

[RaleighNCDUer]

116. He's not up for re-election, is he?

He's going to do what he wants, and damn the consequences. And what he wants to do is privatize SS, so another sector of the already rich can get richer.

[Anakin Skywalker]

42. G.W. Bush is a Boomer and What Look He's Done!

[IndianaGreen]

44. All Boomers please report to the Soylent Green factory!

Whatever they do, it ain't gonna be pretty.

[Porcupine]

52. Millions of working americans are flat broke. No savings, assets or

pensions. It's all they can do to stay employed and keep their heads, barely, above water. The GOP has already decided that those of us in our fourties are going to work until we are 70 before we get the pittance of Social Security as it is. Now they want to take that away.

I would like to also point out that many working americans have been thrown out of the regular job market and are eeking out a living mowing lawns or doing other grey-market jobs where they don't pay SS taxes. Unless we intend on throwing them into the streets when they become too old or hurt to work we are going to have to support these people also.

If they take away the last refuge of the american people we are going to see an epidemic of geezers going postal. Mark my words.

[wholetruth00]

54. This is the signal that if Republicans are back in power SS and Medicare

are out the window.

[Igel]

57. It's a problem.

On the other hand, had all the money been kept segregated by Congress and not spent, there'd be another problem.

What does the government do with a trillion dollars in the bank? Does it invest it--and how do politics and favoratism get left out of it? Even the Calif. pension fund manager plays politics, implementing some sort of social policy concerns.

Would the government leave it in the bank? Which banks? And then what happens to the equity markets when that money is pulled out?

[rocktivity]

59. Then raise the 90K salary cap

Eliminate it altogether, and EVERYONE can pay a lower rate--crisis over.

:headbang:
rocknation

[Virginia Dare]

61. Like so many of the other made up crises....

like drugs and immigration. If there was true motivation to do so, it could be solved tomorrow.

[Cha]

63. And we should believe a lyin' greedy

republicON because?

Edit~The republicONs want to steal our Social Security and give it to wall street! :grr:

[earth mom]

64. Social Security is NOT broken! Don't buy into this LIE!

:grr:

[dmallind]

70. Couple of points

Yes the SS fund is "funded" by IOUs. So is all the money we get from China to fund deficit spending. The value of those IOUs will be propped up as long as the US remains a dominant, or even major, market for Chinese goods. After that? Screwed.

The 93K cap is there because that's the maximum income which is used to calculate future benefits. Raising it won't do any good as then $120K would be used to calculate future benefits, so greater inflow now for greater outflow later = wash.

One of the major issues with SS is that the eligibility age was set at 65 based on a tradition started by Bismarck as the age of retirement. Trouble is he did that when 65 was OLD (actually beyond the normal life expectancy). Now it's routine for people to live into their 90s. The tables were not set up to pay benefits for as long as they are paid.

Social security is not a general fund tax but a promise of future payback - many of you are aghast that it is treated that way. That same fact holds true though for things like means testing and a higher income level that is NOT used to calculate future benefits. Then it just becomes another tax.

For long term viability the retirement age must be increased, and budget deficits reduced (which helps this problem, and others, in many ways).

[Yupster]

74. Slight disagreement

Raising the income that is taxed from the current $ 93,000 will not be a wash as because the benefits would go up with them proportionately as you said.

The benefits to the rich would go up, but as you probably already know, the bendpoint formula that the benefits are calculated on is incredibly progressive.

So if a person put X dollars into the system and another person put 2X into the system, the second person does not get anywhere near 2X the benefit the first person gets.

In fact for the top bendpoint, the wealthy get almost no extra monthly benefit for the extra money they put in.

The payout formula favors the poor tremendously.

So if the cap was raised say to $ 250,000 or $ 1 million, it's true that the people in that bracket woud get a bigger monthly benefit, but not even close to enough to make it a wash. The treasury would come out way, way ahead and the rich way behind.
___________________________________________________________

It's fashionable to say that FICA is a regressive tax, which it is, but you never hear anyone saying how incredibly progressive the benefits formula is, which is the flip side of the equation and is equally true.

[dmallind]

79. Actually

I did NOT know that (never thought to look into it to be honest) but thanks for the info and I welcome the correction.

Probably makes raising that cap a better idea than I thought at first then, even though I am one of those "rich" (and therefore according to many here, evil by default ;) ) folks who will have to pay.

let me think here....

...additional $2065.50 tax burden for me (about $172.13 a month) on one hand or collapse of the most meaningful poverty-reduction program in US history on the other.

Hmmm tough one, but I think I will have to forego just that one champagne and foie gras dinner (since making over $90K means that's how I live of course!) every month on balance ;D

[Bridget Burke]

81. So--we should be punished for living longer?

Just more years of working. Then retire. Then die.

How many of those numerous 90 year olds are still working?

[dmallind]

82. Not the point at all

There is no question of punishment, just a need for readjustment based on evolving conditions. If the human lifespan was 150 years should we still retire at 65? That age was first set when the average lifespan for a male was 48!

Clearly if we hold the working (paying in) years constant and expand the retired (cashing out) years then either we have to pay more in, get less out, or change the point at which we move from one condition to the other.

Out of the three, and since on the aggregate (anecdotal and specific experience is not a valid refutation of this by the way, and hopefully it's well enough accepted not to be a cause of debate) people are staying healthier for longer, option 3 seems like the best compromise to me.

[Bridget Burke]

85. Yes, let us rearrange our lives....

So the filthy Republicans can continue to cut taxes & finance their illegal wars.

[dmallind]

87. Not sure I see the connection

Deficit spending is neither new nor limited to wars of choice. Without the illegal wars and, sad to say, probably even without the filthy Republicans (in recent years only Clinton, and only then at the end, avoided it) we would still be faced with a pending imbalance between inflow and outflow in SS. Even without deficit spedning though, if there was actual gold bullion or folding money in the famed lock box of SS, this would still be a problem. The fewer the workers and the greater the number of retirees, and the changing amount of time folks are in these categories, the greater the imbalance.

Sure if every single government had been responsible and not borrowed a dime against SS, we may be talking about this a few years delayed, but it's integral to the design of the program itself.

[Bridget Burke]

93. Now I understand.....

I'll have some pension & SS. And I'll be eligible to collect within 10 years--unless things change, as you recommend. My family is not burdened by extremely long lives. (Not counting my father, killed in an Air Force plane crash when I was 4--but I got SS as a result, so that's OK!)

However, all that's "anecdotal"--& you mentioned YOUR income in another post!

As I said, I understand.

[dmallind]

106. Hey I feel for ya

Nobody in my family has ever lived past 70 for 7 generations either side.

I am overweight and a heavy drinker.

Chance of me collecting a single penny out of those maxed out SS contributions, which absent sudden career collapse should continue for 15-20 more years, is essentially zero.

But larger social questions like this should not be about ME or YOU, but about the greater good for the greatest number possible. If I voted my own financial benefit I'd be on the damn Freeper boards instead wouldn't I? I would find it unconscionable, for example, to lower the retirement age to 55 so there is more of I chance I could collect some back myself, but simultaneously destroy SS for millions of others who would have none when it rapidly collapsed.

MORE people will get MORE benefits if we make adjustments for changing demographics. Isn't taht what matters?

Raise the 90K cap (now I find out it would not just increase similarly payouts too!) would be a good start - hurts me, helps millions.

Raise the retirement age because of an aging population that ON THE WHOLE stays healthier longer is a good start too - hurts both me and you (since we probably won't stay healthier longer and live into our 90s it seems), but also helps millions.

I HOPE that you would not make different decisions on the validity of both these proposals just because you are hurt by one but not the other.

[aggiesal]

71. Riiiigggghhhtttt ...

And the supplemental war budget places absolutely no strain on
the nations budget or economy?
What rock did they find this loser under?


L        OO    SSS  EEEEEE  RRRRR   !!
L       O  O  S   S E       R    R  !!
L      O    O  S    EEE     RRRRR   !!
L      O    O    S  E       R  R    !!
L       O  O  S   S E       R   R
LLLLLL   OO    SSS  EEEEEE  R    R  !!

[Megahurtz]

86. You got THAT Right! n/t

[Peace Patriot]

75. Throw Diebold and all election theft machines into 'Boston Harbor' NOW!

Really. You want good government--maybe get some of our billions back from Halliburton? Don't let Bushite corporations "count" all the votes with "trade secret" programming code!

No-brainer.

[Eurobabe]

76. BLAME TRIFECTA BUSH

for that lousy situation.

No brainer Bernanke.

[dback]

78. That's assuming that all the Baby Boomers retire

A very significant portion of them--in excellent physical health, more so than generations before them--intend to keep working full or part-time until they are 70, 75, or even 80. Yes, they'll be earning Social Security, but ironically they'll also still be putting into it--for themselves, and for other subsequent generations.

[Ignacio Upton]

84. Most Baby Boomers will also be dead by the 2040 date

That's the date where SS cuts benefits because it won't be able to pay everything out in full (although this date is a worse-case scenario date, with the real one being closer to 2050 because they assume economic growth that is almost flat.) Surviving Baby Boomers will be in their 70's '80s and 90's (someone born in 1964, the last Boomer year, will be 76, while the oldest will be 94.) At the same time, Generation Xers (the oldest) willbe retiring, but there were more people from Generation Y than there are Gen X. This problem will only be a major burden in the 2010's-2030's, but by the 2040's it should no longer be an issue because NATURE will take its course on the Boomers, and Gen Xers will replace them in terms of collecting benefits.

[xxqqqzme]

91. from wikipedia

'...Due to the fact that Bernanke has never actually worked in corporate America in his lifetime, investors argue that he is not suited for his position as Chairman of the Fed, fearing that his lack of real life economic experience makes him more likely to institute theoretically attractive but practically untested policies.'...

he was born in '57.

I know I am but what are you?

http://en.wikipedia.org/wiki/Bernanke

[flaminbats]

95. this rich brat needs to grow up!

Bernanke isn't suited for his position, he should go back to Harvard to teach his fantasy and taxless dreams to those who will believe it. He claims that taxes reduce economic growth and reduce the incentive to work..sorry, but that's why we have a progressive tax system, so earning more money never results in a net loss!

Higher taxes didn't reduce economic growth or productivity in the 40's, 50's, or in the 90's..so why would it do this to us now? I only see one answer for that, it would happen if these neocon fruitcakes replace the progressive income tax with their much longed for national sales tax!

[november3rd]

94. Wow, that's NEWS!!!!!

This is the signal for the robberbarons' minions to crawl out from under their rocks and from out of their dark alleys, to assemble in the public square and start screaming, "PRIVATIZATION," in unison, until they can drown out the squeak of the rubber stamp smudging a page of deceptive but devastating legislation.

I guess they know the House is ours in January, so they're going to make BushCo's last stand on SS privatization now.

We're all looking the other way, anyway, so they can steal a step on us before we know what they're up to.

Look out.

[Yavin4]

105. Correct Me If I'm Wrong, but Didn't We Have A Surplus in 2000

And, didn't the "great" Alan Greenspan testify that continuing the surplus would be a problem? And, didn't everyone ridicule Al Gore when he said that the surplus should be put into a lockbox?

Or, did I just dream all of that?

[Sapere aude]

111. If there were no Iraq war and we put those billions in the SS trust fund

what would he be saying then?

[Zorra]

123. Reform can be good: End the occupation of Iraq immediately,

calculate the cost of the occupation for this current month, and put that total into the SS fund on a monthly basis ad infinitum.

Rather than funding an infinite war, we can fund an infinite retirement/safety net program.

No mas problemas.

Of course, Bernanke, being a Bu*h appointee and a republican, could never be expected to do anything decent, honest, or sensible.

Fuck him and his corrupt fascist bullshit.

[pat_k]

124. The shear number of boomers constitute a political force that . . .

. . .will demand a solution.

Where there is a political will, there is a way.

Simply lifting the cap on income subject to Social Security Insurance would do it.

[yorkiemommie1]

126. as long as the richest 1% of boomers are taken care of

it's ok for the rest of us to drift away on the nearest ice floe.