A looming problem being ignored?

Question

There are approximately 37 million Americans currently drawing social security benefits. In 13 short years, this number is expected to jump to 72 million.
Since its conception, social security has collected hundreds of billions of dollars above its payouts. Since the Carter administration, the social security trust fund has been raided to balance the federal budget. As a result, the money collected to pay future retirees has been squandered. Our government has done what it does best, create big problems for future generations.
None of the presidential candidates are addressing this looming problem, which will begin to surface in 2012.
Will the solution just be abolishing SS in 2012? Will the feds just keep collecting the money until the payouts are impossible to meet and just say sorry, you guys are screwed?
If SS is doomed to collapse, perhaps the fed should stop collecting the money now.
Any thoughts?

Answer 1

Yes, SS is doomed to collapse, because we do not have the financial resources to correct the problem, and have too much accumulate debt already to be able to delay the problem indefinitely on credit.

And, yes, it's being ignored because everyone is focused on being paranoid about what the rest of the world is doing.

Answer 2

This is the primary reason why I am making arrangements for my own retirement funding. I do not believe SSI will be solvent when I reach retirement age and no meaningful reform can occur because even a hint of such draws immediate criticism and scare mongering tactics. The funny thing is that many people do not seem to care and are also not preparing for their future. Imagination what a catastrophe this will be when people realize how much trouble they are really in. By then I fear it will be too late and no correction of the system will be possible.

handerande: Aparently you fail to realize certain facts, or you are outright spinning falsehoods, but I will give you the benefit of the doubt none the less. So here is what is wrong with your conclusions on this matter.

1) We had a large deficit when Clinton left office, not a surplus. It is true that the Republicans have doubled the deficit, but they did not create it from scratch.
2) The way Clinton managed to create that surplus you speak of was done how? Answer, by borrowing from Social Security. Seems like a catch-22 to me.
3) Make an adjustment to the fund? In layman's term that's a tax increase. Not a preferable solution to the problem and not feasible either. If you were to take the time to read the reports and conclusions from the Board of Governors of the SSI trust you would realize this.
4) 12 million extra people paying into the system? In layman's terms, make all the illegals legal. Again not a preferable solution and one that Americans have rejected in large numbers already.
5) The Bush Administration did try to propose a reasonable solution. It was to allow Americans to invest 5% of their yearly SSI taxes into private investment accounts. A solution which would not destroy the system and makes a great deal of sense. It would operate much like 401K now. However the Democrats in Congress rolled out the scare machine too make sure it was DOA without proper examination.

The only things you are correct on is that the government should not be running up large deficits and they should not be borrowing from Social Security ever.

Answer 3

I agree the problem is being ignored. But any government that can take a 600 billion surplus and run it into the biggest debt in history is not the one that will fix this problem. Why do you think abolishing a program that has run successfully for 60 years will solve anything?The funding has been adjusted to keep it solvent many times over the years without a problem, so to say it is doomed to collapse is to ignore history. So what would help restore this fund to solvency is what a responsible questioner should ask. And a responsible answer would be to adjust the funding upward once again, with the law being changed to prevent the government from robbing this fund every time they need to balance the budget. Would allowing another 12 million people to contribute to the solvency of this program help? Of course it would but you won't allow that either.None of the Presidential candidates are addressing the problem because the Dems are not in charge, and the repubes refuse to address the situation sensibly. You want a revolution, just try and take my social security, that I've contributed to for over 50 years, away from me. You'll see a revolution.

Answer 4

Social Security was, from the very start, a government sponsored and sanctioned Ponzi scheme. If a union or a private employer had suggested such an approach to their pension benefit offering instead of the New Deal Administration, they would have been vilified by economists and beauraucrats alike. I mean, the very year it was created, when it had just begun to collect monies, it began payments. How is that supposed to work long term?

To be fair to the creators of the system, they never intended for Social Security to become what it has, either, a primary income for retired Americans. It was always intended to be supplemental income; retirees were expected to have reasonably substantial investments and assets to fall back on to support themselves.

Our culture of entitlement being what it is, this notion was quickly swept under the rug as Congress after Congress quibbled over benefit levels and diverted critical cash reserves to other budgetary needs.

You are correct that there is a problem looming. It is not, however, being ignored. This is not to say it is being solved either, but analysts have been warning us for a very long time that the Social Security Adminstration is one or two hiccups away from complete systemic failure.

I am now 42, but I have always assumed that this benefit would not be available to me when I retire, and so my financial planning reflects that assumption.

Answer 5

I think the senior citizens, a very large and powerful voting block, would not permit it to simply vanish overnight. What solution they would seek out is unknown to me but I'm fairly certain the government will never stop collecting that money since it is an extra source of income for them.

No one wants to speak about it because the solutions we have or might have are not very popular, raising the retirement age, limiting benefits, even ditching it, etc. Also any who speak out in favor of those unpopular solutions will be asking to defeated in any political run and lose support from others who don't want to seem as if they support said person's position.

Answer 6

Well i think it is working to a degree. The majority of ppl that do draw on SS are either illegal or claim dissability for a very stupid reason. What needs to be done is a thourough sweep of the system and root out the ppl that are just getting fat an lazy b/c they dont want to work. also there are the ID thieves as well. However yes the gov does seem to be making problems for the future b/c the politicians that are there now are either corrupt or dont care. b/c they will be retired and have a pension check that is the same salary as they make now, whic is in the high 100,000s.

Answer 7

It is going to collapse, I see no way to save it. I heard in congress on cspan the other day they were talking about 92% income tax to cover entitalments. In roughly 10 or 20 years entitalments will equal 72 trillion dollars a year, we as a nation cannot afford it. And with this coming I noticed they still found it in their wisdom to keep increasing spending on the deficit. I keep my IRA up, SS will not be there for me, period.

It isn't being ignored, they know it is coming. It seems they just don't care, and it is on both sides of the isle.

Answer 8

I couldn't agree more. Get the hell out of my way and out of my pocket book and allow me to save for my own retirement. Why that is up to the government is beyond me, but oh well. I'm pretty sure I can manage my money better than any government entity can, thank you very little.

And nice question by the way, its nice to see someone actually asking about serious stuff on here instead of how bad President Bush is, or how crazy the liberals and conservatives are and yada yada, the same tired sh!t everyday. Good deal, you my friend get a star.

Answer 9

i've already set up my own 401k... this isn't a new topic... people have been thinking about this for years. If we stopped paying social security nooooooow... then the people currently on it would have no money.

thats what they intended to retire with. i think if you are so worried about it start your own retirement plan. it isn't the current elderly populations fault the government didn't think this plan through.

Answer 10

Bush tried to fix it with privatized SS, but no one would listen to him, they were too busy hating him.