Since social security will eventually break the U.S., should it be abolished? If not, can reform really help?

Question

Knowing that I pay into Social Security every pay check with the possibility that I may never see that money again simply enrages me. With that little less to work with for retirement, the pennies are surely adding up. Is there any solution to this disaster called Social Security? I'm curious as to what others think can turn this failing system of Government around (and please think of something better than suggesting Bush's impeachment, for this has been a downward spiral since before his era). The most intriguing answer will get my vote. Thanks for answering!!

Answer 1

I'm so strongly opposed to the concept of Social Security that I'd be willing to be the one on the edge. If it meant an end to that program, I'd be willing to pay into it my whole life, and be the first one to not be eligible, when that time comes. The problem is that no one who is currently, or soon to be, collecting money, wants it to end. We've entirely forgotten that we don't pay into it for our own retirement, we pay for our parents' retirements. If enough of us realize that, and stop insisting that we deserve to get back what we paid, we might be able to end this pyramid scheme before it collapses. Unfortunately, that won't happen. So the question becomes, how will it's collapse be dealt with? Will we let it die? Or will we just keep raising taxes until there's nothing left to take? As the second option will increase the power of the government, I expect we'll go that way. I see it as possibly the final push to full socalism in this country. I think that was it's goal in the first place.

Answer 2

No, it should not be abolished. They'll have to reform it and they are working on that. The biggest problem is, is that they are letting illegals work in this country, not pay into it, and yet they'll be eligable for SS. This is WRONG. We need reform and we need it NOW.

What the Federal Gov needs to do is either penalize the companies who employ these people, or have the leglislature create a new bill that says these people MUST pay into the SS system to receive it...not just work in the US and get a free pass. The SS system has been failing long before Bush or even Clinton were in office. So impeachment is not the answer, but the new reform is.

They're either going to have to charge these people for working here in order to collect, or ban them from crossing the border. Another issue is the problem with the 'families of prisoners' being able to collect their social security bennies. This should not be either. Whoever is the head of the household once the father is in prison, is just going to have to go out and get a job like everyone else...and pay into the system. I know it sounds harsh, but it's just the reality that if they don't, the system will not survive.

New comers to this country must begin paying taxes from their businesses and paychecks they receive instead of being granted 7 year tax abatements. They've done nothing to earn this priviledge and this 'abatement issue' should be held for 'property re-investment' only. Problem is is that each new person who goes into business usually has family ties to the original owner. This is like the hundreds of party store businesses in my state. The original person still owns it, but they do not sell and turn the business over to a different relative coming to the U.S.. They have their paperwork drawn up by specialists attorneys to make it look as though they sold the store, but in reality they've only changed management. The original owner is still there; and yes, I've witnessed this.

Gas Stations...being bought out and managed by Iraqis, Caldiens and Muslims from Detroit and Dearborn. Companies such as Marathon Oil, Citgo and one other, are letting these people take over without an initial investment. They draw a paycheck in which no taxes are taken out for 7 years. When that 7 years is up, those stations are then newly owned and operated by someone else. Whereever I go, no matter what corner it's on... there are NO AMERICANS with the exception of Speedway (America).

With these people surviving tax free for seven years the original owner can continue to live tax free as long as there is another family member to come over and take control. It's a continous cycle. Dollar stores are the same way here. Continually moving and reopening with a different one, with a then different owner.

When they all retire, they get SS money from the government because they owned a business and drew a paycheck..even tough there was nothing taken out.

Answer 3

I don't believe social security will break the US .I do believe it will run out though that is obvious with less paying in than taking out.I think it should be abolished but not until the majority of the baby boomers are off of it. To stop payments on SS over the next 20 years would create a huge economic and social problem in this country as most retirees rely solely on SS.But yes I think there should be a time when it should be taken away there should be an every man or woman for themselves type system with a certain percentage that goes into a single standing account it would promote a better work ethic as well.Until then we will just have to bear the burden to take care of our elderly and disabled.

Answer 4

I understand why your generation want to abolish social security because its in crisis However I am on disability so I am getting your tax dollars - not much There is always that possibility that 95% of the disabled could work I was told by 3 doctors I couldn't work or go to college I don't think disabilty should be paid for by social security maybe some kind of private insurance but the problem is I haven't paid in so I wouldn't get money out

Answer 5

The best way to protect social security is to make it illegal for congress to use its funds as they have for the past 40 years for anything other than for Retirement Payouts. Our congress ruined social security back in the 1960's by making it social security instead of the Old Age Retirement Fund it was originally intended to be. Now it covers disability, and payments to children of deceased workers. Congress has always robbed from Social Security to fund its debt. Sort of like robbing Peter to pay Paul, now let me get this straight, are you saying that we should not pay Peter now?

Answer 6

I think that a slight reform is possible, we can bring the troops home from Iraq and save 10 Billion a month, that might just help a little to balance the budget and help pay the social security shortfall that is going to happen, due to the polititions putting their fingers in the pot and snatching out dollars to fund a corrupt and illegal war.

Answer 7

Bush tried to reform it and give each person the option to have control of a small part of their social security but the Democrats scared everyone and made them believe that it was too risky so unless we get a super majority of republicans and right thinking democrats it will probably never happen.

Answer 8

One simple change would fix it for the future: take off the income cap or raise it. All we have to find is the political will to make that change. Why don't you start working towards that by contacting your representative and senators and campaigning like crazy?

Answer 9

When the program was set up more than 70 years ago, President Roosevelt made sure it was done in such a way that it could never be completely eliminated by coming up with the concept of a trust fund that could only be used to pay benefits. - People like you who are paying into the social security trust fund now, will not stand for getting nothing when you are ready to retire - And 50 years from now younger workers will still be paying into the social security trust fund and their payroll taxes will be available to pay you something.

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 openly 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=0-91W5LS0E8

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.