Do y think that Social Security will be around for us if we don't put pressure on our government officials?

Answer 1

You have probably heard that the program is financial trouble. Perhaps you have heard President Bush's statement that the system will go bust in 2042, but it is not that simple.

Not one member of congress has come forward and discussed the real Social Security problem. It is a moral issue which effects both the baby boom generation and the next generation of younger workers; and it can not be understood without a brief history lesson:

Until 1983, Social Security was a pay as you go system - a contract between generations, where the younger generation paid for the retirement of the previous generation. Although next to nothing was saved in the Social Security Trust fund, the system worked well - because as the wages of young workers increased with inflation, larger benefits could be paid to retired workers to protect of them from the effects of that inflation. But late in the Carter administration, Congress recognized that the retirement of the Baby Boom generation would put an unfair burden on the next (smaller) generation of workers unless changes were made to the system.

As a result of the 1983 reform package, the retirement age was scheduled to gradually be raised to 67 in order to account for longer life spans and social security taxes on wages were increased by about 1/3, in order to build up a real trust fund to help pay for the retirement of the baby boom generation. As a result, the trust fund has built up a surplus of over 2 trillion dollars - and the baby boomers became the first generation to pay for their parents' retirement while providing for their own as well. By one measure, the 1983 reform package has been wildly successful, as the surplus in the trust fund is now predicted to last at least until 2042, when the oldest baby boomers will be 96 years old if they are still alive. (Even then Social Security will not be broke - It will just have to go back to the old pay as you go system - which may not be much of a problem if the economy has done well and most of the baby boom generation is dead.)

Even the most pessimistic estimates say that the the system will be able to pay about 70% of promised benefits in 2042 with no changes. These estimates assume that the economy will grow much slower than it has in recent years and that life expectancies will continue to get longer. And nobody can really predict what things will be like 35 years from now. There is a reason that politicians like President Bush focus on 2042: - The law says that the social security trust fund can only be used to pay social security benefits. And the bonds in the trust fund are legally evidence of a debt. Nobody expects the government to default on the bonds, so the President has to come up with an excuse to not pay them off on schedule. By convincing the public that the system will go bust in 2042, he has an excuse to cut benefits in order to build up a bigger trust fund that the government can borrow and not pay back.

When the social security reform legislation was signed into law by President Reagan on April 20, 1983, he said:

"We're entering an age when average Americans will live longer and live more productive lives. And these amendments adjust to that progress. The changes in this legislation will allow social security to age as gracefully as all of us hope to do ourselves, without becoming an overwhelming burden on generations still to come.

So, today we see an issue that once divided and frightened so many people now uniting us. Our elderly need no longer fear that the checks they depend on will be stopped or reduced.

These amendments protect them. Americans of middle age need no longer worry whether their career-long investment will pay off. These amendments guarantee it. And younger people can feel confident that social security will still be around when they need it to cushion their retirement."

You can view President Reagan's complete speech here: http://www.youtube.com/watch?v=0-91w5ls0...

In order for the 1983 reforms to work, congress and the president would have had to act responsibly and not treat the social security trust fund as if it contained free money that could be spent and never paid back. And early in his first term, President Reagan did promise to balance the Federal Budget by 1983.

The problem of course is that we have had an orgy of income tax cutting that has primarily benefited the rich and massive budget deficits under the administrations of Reagan and Bush I and II. Because the baby boom generation has not yet started to retire, last year, congress was able to borrow and did borrow a record 186 billion dollars from the social security trust fund (in addition the approximately two trillion dollars that have already been borrowed and spent), every penny of which was paid for by FICA taxes on the wages of working people - and congress has no plan in place to pay it back when it is needed to pay for social security benefits.

This borrowing has masked the true size of the federal budget deficit. President Bush has stated that the fiscal 2006 budget deficit was 248 billion dollars.. But this figure does not include the 186 billion borrowed from the social security trust fund last year, nor does it include the approximately 100 billion dollars per year cost of the war. From Fiscal 2002 to Fiscal 2006, the Federal Government borrowed approximately 2.4 trillion dollars, including borrowing from social security trust fund. That 2.4 trillion dollars in borrowing means that from fiscal 2002 to fiscal 2006, approximately 1/4 of non social security government spending was financed with borrowed money. (See www.ctj.org/pdf/def0706.pdf)

The lowest paid minimum wage worker and a person making $97,500 per year pay social security (FICA) taxes at the same percentage rate. On wages over $97,500 workers only have to pay the relatively small portion of the tax that goes to support Medicare. The justification for this is that FICA taxes are like retirement savings.

When President Bush complained (in his 2005 State of the Union address) that in 2017, the trust fund will be paying out more than it takes in and when he calls the trust fund a "worthless bunch of IOU's," he is in effect asking for "debt relief." He wants to find a way to avoid repaying the debt to the trust fund so that he can preserve his 15% dividend and capital gains tax rates and his other tax breaks which primary benefit the rich.

It is true that the government bonds in the trust fund don't have economic value like a piece of real estate or stock in a corporation that pays dividends- but they have legal value (they represent a promise by the government to repay a loan when payment is due.) -

But more importantly, they have a great deal of moral value. The moral issue is: Is it right to borrow and spend somebody's retirement money and not pay it back. If the CEOs of a big corporation (like Enron or World Com) had taken all the money from their employees' pension plans and replaced it with a bunch of worthless stock or worthless IOUs, they would be headed to jail. - Moreover, is it right to keep collecting FICA taxes from workers at a rate that creates a surplus, if the government is going to keep up this borrowing and use it to finance income tax cuts for the rich with no plans to pay the money back when it is needed to pay benefits? (In addition to the 2 trillion dollars of social security surplus already borrowed, the government plans to "borrow" over a trillion dollars more of surplus before the well runs dry around 2018.)

In the alternative, is it right to maintain tax cuts for the rich and pay back the retirement money borrowed from the social security trust fund by passing the entire cost of doing so on to the next generation - something the 1983 reforms were intended to avoid?

My personal view is that we should immediately roll back all of the Bush Tax cuts, and then roll back every other tax cut for the rich that has been enacted since President Reagan until the operation of the government is fiscally sound. President Bush believes it is more important to maintain his tax cuts because they have a stimulative effect. - But crack cocaine also has a stimulative effect and that doesn't mean it is a good thing.

The new Democratic controlled congress has no plans to beginning discussing rolling back the Bush tax cuts. We should put pressure on Democratic politicians to show the courage to start talking about rolling them back - not to pay for new programs - but to keep the government solvent.

In order to take the high moral ground Democrats must recognize that they had a hand in creating the big deficits of the past 23 years and they must be willing confront the real issue. Both parties have been buying our votes with borrowed money for far too long. But in any event, the press and politicians have an obligation to explain to the public that it is not social security but the rest of the government that needs reforming. Neither the Democrats nor the Press have done their job.

Answer 2

No, it will be gone if it isn't already. It has degenerated into a vote buying MasterCard with no ability to repay. When Social Security was started, the age limits were set in such a way that very few people lived that long and would ever hope to get back even a portion of what they put in. It was a simple ponzi scheme. Like all ponzi schemes, Amway and other MLM "opportunities" they eventually go bust and some people go to jail. In this case, it will go bust and the perpetrators will be re-elected.

The fund is busted. There are only a few ways to return it to solvency. Raise the revenue through higher SS "contributions", raise the minimum retirement age or reduce benefits. The math is quite simple. The willingness of politicians to make the change and the ability of John Q. Basketballfan to understand the consequences of inaction is not.

No politician that has thoughts of re-election will touch it. It was tried back in '94 / '96 and the MSM crybabies were leading people to think that Newt Gingrich was single handedly going to cut off payments to the elderly and toss them out in the streets to die from starvation.

This is why it is so important for young people today to start saving at least 10% of their income in a mix of savings and investments.

Answer 3

Social Security is a huge Ponzi scheme. It worked okay as long as the government stayed out of the money and each generation was bigger than the one before it. Then congress and the President just couldn't leave that money alone. (I do believe that was President Clinton when he still had a democrat majority in congress) Now, of course, the money is gone and the baby boomers are starting to retire. The generation after the boomers was smaller so now social security is in a world of sh**. Right along with medicare where the theft and deceptions cost that system around a Billion dollars a year. You are quite right they are elected thieves. I say vote ALL incumbents out and start fresh with some people who might actually understand that they work for us not us for them.

Answer 4

The threat has been around for a long time that the money would run out but people are still collecting. You should plan that you will get NOTHING. Invest for yourself and IF it is still around, you will be ahead of the game. Pressuring the government officials or worrying about it won't make a lick of difference...the misappropriation of funds will still continue!

Answer 5

Like we can, really. Every politician says they're for social security, or at least the most popular ones do, then they go the opposite way when they're in office. With people today having fewer children, there might not be enough workforce to provide for all of us when the time comes, so I'd rely more on 401k than anything else.

Answer 6

Start saving your own money NOW, so that you don't have to depend on social security when you retire. Social Security will not provide enough money for you to live on when you retire. You need to do that yourself.

I STRONGLY advise that you start an IRA, and fund it fully every year. Whether you start a Roth or traditional IRA depends on your situation, but either way, your financial independence is up to you - not the government.

Answer 7

Probably not. It has been calaculated that SS benifits wil run out sometime by 2042. http://money.cnn.com/2005/03/23/retirement/2005_trusteesreport/index.htm.

It's not a good thought for all of us busting our a**es everyday to pay into the fund.

Every year they send me an updated statement that tells me exactly how much of a benifit I am entitled to. Since my expected retirement age isn't for another 40+ years or so, you can bet your a** i will be saving these "legal documents" and getting what I am entitled to from our governement one way or another (Better start saving up for my lawyer now.)

Have a great day!

Answer 8

It will be around, now, will it have enough money 30 years from now, for those people to retire on, is a totally different question.

Only Raising the tax on SS, will we be able to have sufficient money in there for those to retire in 30years, or increase the benefit age from 67 to 70 or 72... the only other last resort would be to cut benefits... i see these happening in the near future.

again, social security will be around, but it may no have enough money for those who qualify to retire on.

Invest your money wisely now, so you don't have to rely on SS, when you get older.

Answer 9

Keep working. Work hard, get pay raises, get job promotions. Always pay your taxes.
I am collecting Social Security and am counting on all young workers to keep the tax money coming in.

Answer 10

I am afraid that at the rate they are spending money on foreign wars and cutting taxes and going in debt. It is like a man that says we have gobs of money and pays bills with his credit card.
Over spends on credit and then wonders why people object to his extravagant life style. Then walks away and leaves others to pay his bills. While in office he got rich on oil. In 8 short years then he walks away and when a Demo gets voted in and raises taxes to pay his bills he says see there, they raise taxes.
All they care about is this political struggle, and who wins while the whole country loses. It is a game where there is no winners.

Answer 11

It will be around but whether the benefits will be the same or not is the $64 question