AFTER THINKING ABOUT IT A LITTLE MORE, I'M GOING TO MODIFY THIS POST
This is the first lie - #1, to call Social Security an "entitlement program" is simply wrong. Social Security is an income protection program designed to ensure that retired people do not outlive the money they saved during their retirement.
SOCIAL SECURITY IN FACT IS AN ENTITLEMENT PROGRAM - WE, THE PEOPLE ARE ENTITLED TO IT, BECAUSE, WE THE PEOPLE HAVE PAID INTO IT! THE WORD "ENTIGHTLEMENT" IS ONE OF THOSE HOT-BUTTONED BUZZ WORDS (I THINK THIS IS THE CASE) AND THE SENSE IN WHICH IT IS PRESENTLY UNDERSTOOD BY MANY IS "ENTITLEMENT AS TO A THING FOR WHICH ONE HAS NOT PAID ... YOU ARE 'ENTITLED' TO IT SIMPLY BECAUSE, SAY, FOR EXAMPLE, YOU ARE BLACK, OR HISPANIC, ETC., ETC.,ETC.,"
all MOSTLY emanate from idiots (such as the author of this misinformed op-ed piece) who would take a wonderful-working security program and emasculate it to the extent that it no longer works -- the future security of retirees will not be improved by making any changes which reduce present or future social security benefits.
ACTUALLY, YES, THESE PROJECTIONS DO MATTER A LOT. WHAT REALLY MATTERS IS THAT THE CBO KNOWS WHAT IT IS DOING, AND I AM NOT SO SURE THIS IS THE CASE.
BUT if the future growth rate of the Gross Domestic Product trends towards 2.8% annually (the most recent quarterly experience) rather than towards the intentionally conservative 1.7% assumption implicit in the social security future financial analysis, then the program will be OVER-FUNDED and no changes whatsoever will be needed to be made to increase contributions, or reduce benefits. YOU CAN'T HAVE IT BOTH WAYS - when the economy does better, the social security funding situation is better.
April 4, 2011
To Cut the Deficit, Look to Social SecurityChestnut Hill, Mass.
By ALICIA H. MUNNELL
WHILE Washington wrangles over how much can be cut from a sliver of the federal budget — the 12 percent that makes up nondefense discretionary spending — responsible politicians from both sides of the aisle know that the real issue is entitlement programs like Social Security.
SOCIAL SECURITY IN FACT IS AN ENTITLEMENT PROGRAM - WE, THE PEOPLE ARE ENTITLED TO IT, BECAUSE, WE THE PEOPLE HAVE PAID INTO IT! THE WORD "ENTIGHTLEMENT" IS ONE OF THOSE HOT-BUTTONED BUZZ WORDS (I THINK THIS IS THE CASE) AND THE SENSE IN WHICH IT IS PRESENTLY UNDERSTOOD BY MANY IS "ENTITLEMENT AS TO A THING FOR WHICH ONE HAS NOT PAID ... YOU ARE 'ENTITLED' TO IT SIMPLY BECAUSE, SAY, FOR EXAMPLE, YOU ARE BLACK, OR HISPANIC, ETC., ETC.,ETC.,"
Solving Social Security’s problems would not only reduce the long-term deficit, but also improve the future security of retirees.SOCIAL SECURITY's PROBLEMS
That view might surprise analysts who point out that Social Security has not contributed to the deficit in the past, because it’s been financed by payroll taxes, and technically cannot in the future because, by law, it cannot spend money it doesn’t have.
But in reality, scheduled Social Security benefits and current payroll taxes are included in long-term deficit projections by the Congressional Budget Office, the Office of Management and Budget and the Government Accountability Office. These projections matter: policymakers, investors and the bond markets use them to gauge the nation’s fiscal health. Since a shortfall in Social Security is embedded in these projections, eliminating that shortfall would substantially improve the long-term budget outlook and the nation’s creditworthiness.
ACTUALLY, YES, THESE PROJECTIONS DO MATTER A LOT. WHAT REALLY MATTERS IS THAT THE CBO KNOWS WHAT IT IS DOING, AND I AM NOT SO SURE THIS IS THE CASE.
BUT if the future growth rate of the Gross Domestic Product trends towards 2.8% annually (the most recent quarterly experience) rather than towards the intentionally conservative 1.7% assumption implicit in the social security future financial analysis, then the program will be OVER-FUNDED and no changes whatsoever will be needed to be made to increase contributions, or reduce benefits. YOU CAN'T HAVE IT BOTH WAYS - when the economy does better, the social security funding situation is better.
Restoring balance to Social Security would also make Americans feel more secure about their retirement. Surveys have repeatedly shown that many Americans do not believe that Social Security will be there for them. this is because there is so much misinformation and disinformation out there that this particular insidious lie is permitted to infect its way into the American subconcsious discourse; but it is a lie - a big, bald-faced lie that social security will not be there -- While such an assessment is wrong — even without any changes, Social Security payroll taxes could pay 100 percent of benefits for the next 25 years, and 75 percent to 80 percent of benefits for decades thereafter THIS IS ONE OF THE VERY FEW TIMES THIS INFORMATION IS REFERENCED; NICE JOB, AUTHOR.— anxiety about the program’s future leads people to grab benefits as soon as they can. The problem is that benefits claimed at the early retirement age, 62, are 25 percent smaller than at the full retirement age (currently 66) and are likely to be inadequate when retirees have exhausted their other sources of income later in life. Eliminating the Social Security shortfall will, therefore, reduce the misplaced fear that causes Americans to claim benefits early.
The key question is how much of Social Security’s financing gap should be closed by cutting benefits versus raising taxes. NO! THE KEY QUESTION IS HOW CAN YOU LET BAD ASSUMPTIONS BE PERMITTED TO EVISERATE ONE OF THE MOST POPULAR PROGRAMS TO ENHANCE THE LIVES OF EVERYDAY WORKING PEOPLES? Some of both will be needed, but slashing benefits is dangerous WHO IS SAYING ANYTHING ABOUT "SLASHING BENEFITS?" because retirements are already at risk.
The need for retirement income is increasing as people live longer. Health care costs are soaring and two-thirds of Americans will need some long-term care. ALL THE WHILE MEDICARE CONTINUES TO SPEND 90% OF ITS MONEY ON PEOPLE IN THE LAST YEAR OF LIFE, EXTENDING AND PROLONGING MISERY WELL PAST THE TIME THAT SUCH MISERY OUGHT TO BE EXTENDED AND PROLONGED. At the same time, resources for retirement are diminishing. THIS IS JUST UNADULTERATED BULL SHIT. The gradual rise of Social Security’s full retirement age to 67 serves as an across-the-board benefit cut. And employer-sponsored retirement plans, for those lucky enough to have them, are increasingly in the form of 401(k)’s with modest balances rather than defined-benefit pensions.
Simply put, more and more Americans just don’t have enough for retirement. RIGHT - BECAUSE SINCE 1973, HOUSEHOLD INCOME HAS STAGNATED, EVEN WITH WIVES JOINING THE WORK-FORCE IN RECORD NUMBERS, BECAUSE WAGES HAVE BEEN SUPPRESSED! The National Retirement Risk Index, which I helped develop, shows that 51 percent of households are at risk of not being able to maintain their pre-retirement living standards after retirement. ALTHOUGH, ONE MIGHT ASK JUST WHY ONE OUGHT TO BE ABLE TO MAINTAIN A PRE-RETIREMENT LIVING STANDARD AFTER RETIREMENT.
Solving Social Security’s financing problem is conceptually easy IT SURE IS, BECAUSE THERE IS NO FINANCING PROBLEM— it’s relatively manageable and dozens of proposals have been evaluated. While experts have put forth various solutions, it seems reasonable to draw on the recent work of the Debt Reduction Task Force, a panel convened by the Bipartisan Policy Center and led by Pete V. Domenici, a Republican who is a former senator from New Mexico, and Alice M. Rivlin, a Democrat who is a former director of both White House and Congressional budget offices.
The task force suggested four major changes: indexing the full retirement age (after it reaches 67) to improvements in longevity; switching to a measure of inflation that grows more slowly than the one now used to calculate Social Security’s cost-of-living adjustment; gradually increasing the earnings subject to the payroll tax (and the basis for benefits) to about $180,000 from $106,800 today; and gradually subjecting both employer and employee premiums for group health insurance to payroll and income taxes.A balanced plan of benefit cuts and tax increases can more than solve the Social Security problem for 75 years. While the Domenici-Rivlin plan is far from perfect — for example, the change in the cost-of-living adjustment would hurt the oldest of the old — it can serve as a starting point. Restoring balance to Social Security would make Americans feel more secure, NO - HAVING SOME KIND OF GUARANTEED RIGHT TO WORK POLICY MANDATED BY A STRICTLY ENFORCED LAW NATIONWIDE WOULD MAKE MOST AMERICANS FEEL MORE SECURE ... WE DON'T START TO THINK ABOUT SOCIAL SECURITY BENEFITS UNTIL AFTER WE HAVE RETIRED AND START TO COLLECT THEM. increase national confidence in our finances and set a precedent for bipartisan action. This is not a political game. Someone has to go first and put a proposal on the table.
Alicia H. Munnell, a member of the Council of Economic Advisers under President Bill Clinton, is the director of the Center for Retirement Research at Boston College. AND COMPLETELY IN OVER HER HEAD ON THIS PARTICULAR MATTER.
