Social Security: Anything but Secure
Think Social Security will be solvent until 2041? Think again. The next president will face rapidly growing problems by the end of his or her first term.
The Social Security Administration’s 2008 Old-Age, Survivors, and Disability Insurance (OASDI) Trustees Report has contained this sterile language for several years:
Long-Range Results
Under the intermediate assumptions, OASDI cost will increase more rapidly than tax income between about 2010 and 2030 due to the retirement of the large baby-boom generation. …Conclusion
Annual cost will begin to exceed tax income in 2017 for the combined OASDI Trust Funds, which are projected to become exhausted and thus unable to pay scheduled benefits in full on a timely basis in 2041 under the long-range intermediate assumptions.
Many readers, and many reporters who should know better, naively conclude from this that Social Security’s big problems are 33 years down the road. Others more astutely note that 2017 is when the trouble starts.
I’m here to tell you that as far as the government’s full fiscal situation is concerned, the trouble will really begin in 2010. Things will get progressively worse for the next six years (2011-2016), and go “code red” after that.
To understand why, let’s establish a few undeniable facts about Social Security (Medicare is its own separate nightmare).
For years, Social Security has been taking in more in taxes than it has paid out in benefits — in recent years, lots more. In fact, Social Security has run a 22-year “surplus” of over $2.1 trillion, as reported by the Congressional Budget Office (the full report is a PDF found at this CBO page):
That must mean that Social Security’s Trust Fund is flush with investments, right?
Wrong. This bit of history explains why:
In early 1968 President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a “unified budget.”
Social Security’s Trust Fund, instead of being a separate, untouchable stash of cash and investments (i.e., instead of being run like a normal pension plan), thus became money that the rest of the government could raid.
This fiscal sleight-of-hand didn’t matter much until the mid-1980s; the net Social Security surplus from 1968-1985 was only about $3 billion. But as you see above, the system’s surpluses exploded after that as the Baby Boomers entered their prime earning years.
What have the politicians in Washington done with those surpluses? They’ve spent them, by continually borrowing from Social Security’s “Trust Fund.”
By including Social Security in a “unified” budget and raiding its surpluses, Uncle Sam has been able to paper over typically huge deficits in all other government operations. For example, as you can see above, in fiscal 2007, the government’s operational, or “on-budget,” deficit was $343.4 billion; but after netting in the Social Security surplus and the Postal Service, it “officially” reported a deficit of $162 billion.
This situation has been allowed to continue with rare objection through Republican and Democratic administrations, with the acquiescence of Republican and Democratic Congresses, for 40 years. Insert your own conclusions about the breathtaking irresponsibility of our political class.
The Social Security “Trust Fund” is thus nothing but a pile of IOUs from the rest of the government — which is itself over $9.4 trillion in debt.
So there is no money to speak of in the “Trust Fund” to pay benefits. There is also no indication from anyone who could make a difference in Washington, including the three presidential candidates, that they want to change this situation.
Sorry.
Like it or not, the next president is going to face the “Trust Fund” problem early in his or her first term. That’s because Social Security’s annual surpluses are going to start shrinking, and quickly. You can already see the looming trouble above in the minimal change (less than inflation) from 2006 to 2007.
In 2010 (perhaps 2009, if the economy slips into recession), that subsidy to the rest of the government will get smaller with each successive year. Every year in which the subsidy decreases will be a year with three stark choices: cut spending, raise taxes, or issue more debt.
Beginning in 2017, Social Security will collect less in taxes than it will pay out in benefits. Its annual subsidy to the rest of the government will be a mere memory. The rest of the government will then either have to start paying in to Social Security, or decide to reduce benefits immediately in some way. That’s code-red time.
To believe that the problem doesn’t become serious until 2041, you have to believe that the government, starting in 2017, will “somehow” be able to pay back what will by then be about $4 trillion in Social Security IOUs over a period of 24 years — an average of about $170 billion a year in principal alone — without significantly disrupting or tanking the economy. Surely you jest.
Tom Blumer is a CPA based in Mason, Ohio, outside of Cincinnati. He presents personal finance-related workshops and speeches at companies, and runs BizzyBlog.com.
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35 Comments
1. Bill Nabor:What happens when a private Ponzi scheme inevitably goes bust? The investors who didn’t cash out lose all their remaining funds and the gangsters running the scam go to jail because private Ponzi schemes are illegal.
What happens when a public Ponzi scheme, such as Social Security, inevitably goes bust? Well, presumably the gangsters running it don’t go to jail, no matter how much they deserve to, because they were able to see to it that it wasn’t illegal if the government did it. What about the investors? Isn’t it obvious? They will lose their money, just like the others. You were counting on the government taking care of you? Silly ninny! Beginning in 2017 Social Security benefits will slowly be reduced to zero, starting with the elderly rich, then trickling down to the minimum wage earner. So sorry, but you got what you deserved by voting for big government all those years.
And if Obama or Clinton get elected, our health care will be the next thing fraudulently frittered away.
Apr 3, 2008 - 3:08 am 2. BizzyBlog » New Pajamas Media Column (’Social Security: Anything But Secure’) Is Up:[...] It’s here. [...]
Apr 3, 2008 - 4:14 am 3. Ken:While I completely agree that the SS system is in serious trouble, itself being an unsustainable ponzi scheme, I disagree that borrowing from the fund has much to do with it. When the gov’t borrows money it does so by selling bonds, which as we know are backed by the US gov’t, exactly like money is. So the SS “envelope” is stuffed with blue pieces of paper instead of green ones. Both have the same value and the same guarantee that they will be worth something in the future.
Apr 3, 2008 - 6:12 am 4. WR Jonas:How can this be? It was just a few years ago that Harry Reid and the Democrat hordes were screaming that George Bushs plan to save SS was an evil scheme to destroy it. They proclaimed a 5 or 6% diversion into privatization was unnecessary and SS would last for generations without Karl Rove tinkering with it.
Apr 3, 2008 - 6:36 am 5. Glenn:It looks like THEY LIED AGAIN. Will the public ever catch on to these weasels?
And if you think Social Security has problems take a look at unfunded pension and benefits for public employees. All the cities and counties that have promised legions of public workers mega-benefits are stuck with paying out multiples of any reasonable revenues they can project. Watch Italy and France, they’ry going first, and soon
Apr 3, 2008 - 8:25 am 6. dscott:“When the gov’t borrows money it does so by selling bonds, which as we know are backed by the US gov’t, exactly like money is.”
Yes and No. Yes, bonds are simply dollar bills with interest. However, in redemption of those bonds, the Mint has to print money to pay the holder, the problem comes in if you print too much money, you spark a currency devaluation like post WWI Germany.
No, the issue isn’t that SS Trust fund money were “invested” in bonds to get interest, the issue is pension fund money is supposed to be properly invested by diversification between stocks and bonds (of various kinds) to ensure a rate of return to meet the expected payout each year into the future (Autuarily sound management). It is estimated by the Heritage Foundation I believe the rate of return currently is in the neighborhood of 2% on the money we all paid into the SS Trust fund. Now would you invest your pension fund money in an investment that only gives a 2% rate of return? Would you be able to retire by putting in money over 30 years on a 2% rate of return? NOT! LBJ and the Dem Congress in 1968, perpetrated a financial fraud by spending pension fund money on the annual operating budget. This is what Enron did with it’s 401k pension fund by issuing overvalued worthless stock, so guess who learned from whom?
We spend some $500 billion annually on social programs and subsidies other than SS and Medicare, now a choice has to be made between seniors versus slackers living on hand outs. I vote we cut off the slackers, the seniors have paid their dues, the slackers haven’t. It is criminal even to contemplate cutting benefits to those who paid into the system over their lifetimes because of the financial malfeasance of politicians. Why not just rub the seniors faces in crap? What’s truly criminal is the fact if the 12.4% of everyone’s wages were to have been properly invested like any pension fund, after 30 years everyone could retire with over a $1 million in an account and never run out of money. This is the truly criminally malfeasant crux of the matter. Every politician who voted for earmarks and social programs should be put in jail and the keys tossed.
Any so called solution that penalizes the seniors who had their part of their wages put into the SS trust fund is a non starter. Cutting benefits is basically saying: “We stole your pension fund money, had a great party for 40 years and now we are going jack up the taxes on your kids and cut your income to pay off the balance of our party.” You think Daniel Rostenkoski was car sick when the seniors started bouncing his car??? You try cutting benefits and see what happens, third rail doesn’t even begin to describe the hewn outrage of all of us who put money in this system.
Apr 3, 2008 - 8:47 am 7. mvargus:Incorrect Ken.
The problem is that those blue pieces of paper have to be redeemed by the US Federal Government. And what is the Social Security Administration? Its a branch of…. (wait for it)…. The US Federal Government.
Basically its as if you borrowed from your retirement fund in order to purchase a new car for your 16 year old kid and issued an IOU to yourself. You can pretend that your retirement fund still has money, since you put in a piece of paper saying “I owe this fund for the money I took.”, but in truth that money is gone and spent.
And so it is with Social Insecurity. The money is gone, there is no trust fund, and the bonds everyone says the SSA holds are worthless pieces of paper to be redeemed by tax increases or spending cuts elsewhere in the federal budget.
The system cannot sustain itself and will fail sometime in the 2020’s, probably the early half of that decade, but the consequences of running the Ponzi Scheme will be devestating.
Apr 3, 2008 - 9:07 am 8. Wolf Pangloss:Make sure to get the word out now, cuz if McCain gets elected the whole mess will be blamed on him by the reliably socialist media as soon as it becomes apparent in 2010 or so. There will need to be lots of high profile documentation or the left-wing propagandists will be able to spread their lies all around, blaming Republicans for everything, without any opposing voices.
The Republicans need to resurrect Bush’s SS privatization plan and push at it hard. Not just to counter the future propagandists, but because it’s the right thing.
Apr 3, 2008 - 9:08 am 9. Mike:How fast would SS be fixed if Congress had to live off SS benefits when they retire like the rest of us? They don’t care because it does not affect their lives personally. They have their Gov’t pay for life when they leave office. No matter what the Presidential candidates say how they are going to “fix the problem”. It will not get fixed until the Gov’t has to face the same retirement future as ordinary Americans.
Apr 3, 2008 - 9:19 am 10. fraydna52:Which is why some of us in our 50’s with 6 figure incomes (barely) have chosen to stay in 1400 sq. ft. homes that we own, never borrow money, drive old cars, give away 10 - 15%, and save/invest what’s left over in order to fund our own retirements. Oh, and we paid for our kids’ college educations ourselves by living very lean for a lot of years, and they had a stay-at-home mom. It’s all in the decisions we make each day. We’ve seen this coming for a long time and don’t understand why anyone would think the government will ever fix it.
Apr 3, 2008 - 9:27 am 11. Ken:mvargus, dscott:
Apr 3, 2008 - 10:01 am 12. Ken:I think both of you guys are forgetting that dollars in themselves are worthless pieces of paper. The only reason they have value is that they are backed by the federal government, just like bonds are. Yes, bonds can collapse during inflation and be worth virtually nothing, any scenario that makes bonds worthless, also makes dollars worthless. They go hand in hand. The borrowing from retirement to buy a car analogy is incorrect because it doesn’t take into account that the gov’t can and does create money.
To add: Any event catastrophic enough to devalue bonds, will devalue paper money, and will take with is any value in private retirement funds. The increase in crime will make even investments in hard commodities by the ronulans hard to enforce or keep track off. But barring a scenario in which the entire world goes down the tubes, bonds seem fairly safe.
Apr 3, 2008 - 10:56 am 13. glenn:All that said, 2% return on retirement is downright awful. Its not even keeping up with inflation, and the very idea of a ponzi scheme is non sustainable.
The scenario that we cut off the slackers is the one I’ve been promoting to my friends for several years, it’s the only one I see that has any hope of working.
Apr 3, 2008 - 11:06 am 14. dscott:BUT, we need to remember that all the gov’t giveaways weren’t designed to help the poor, they were designed to help the folks who help the poor and provide government jobs for people who will reliably organize for and vote for Democrats. They aren’t going to give up without a big fight. You are already hearing Barack Obama talking about means testing, I know where he’s going with that, and FRAYDNA52, don’t think for a minute that your (or my)careful planning is going to be rewarded. The only advantage I have over you is that I’m 68 and may not live long enough to lose my money. When the politicians need our money to keep their house of cards standing they will find a way (in the interests of fairness of course) to take it.
Ken, you are sidestepping the elephant in the room, it is a criminal offense to embezzle pension fund money and then use it to pay annual operating expenses. Until the SS trust fund is decoupled from the Federal Budget and the surplus funds properly invested, these crooks (politicians) are going to continue taking pension fund money and dole it out to every slacker to buy their votes. This behavior is wrong on so many levels.
I am completely against any so called reform that simply increases the amount of money going into the SS Trust fund just so these crooks can fritter the surplus away on so called investments until the next date when outlays are greater than receipts twenty years down the road. That’s what happened the last time under Reagan, the Dems got what they wanted, a surplus to fritter away while at the same time crowing over how they saved senior’s paychecks. I for one will not support any pact with the Devil/Democrats. “Fool me once shame on you, fool me twice shame on me.”
Apr 3, 2008 - 11:15 am 15. Ken:dscott:
Apr 3, 2008 - 11:27 am 16. Bill Nabor:I think the only realistic solution to that problem is privatization. As long as there is a fund with that much money in it, people in power will find creative means of using it for their means.
“Any so called solution that penalizes the seniors who had their part of their wages put into the SS trust fund is a non starter. ” - dscott
Sorry to disillusion dscott, but screwing the seniors is NOT a non-starter, it is inevitable. Why? Because the money is gone, spent, vanished, evaporated, poof! Today’s seniors are like the Enron stockholders just before the collapse. Their money has been stolen. It’s GONE! They can’t get it back.
Ken says that the government creates money. Pieces of green paper, yes, but not wealth. The government consumes wealth. The only way the money can be retrieved is to heavily tax the people still earning it. Will they stand for that? I think not.
The seniors will lose in one or both of two ways: Hyper-inflation, Zimbabwe style, with the government creating more and more cash (not money, Ken). The wage earners will strike for and get increased salaries to make up for it but the seniors on their fixed incomes will lose it all. That or the promised social security benefits will be decreased to zero. It can’t be any other way. Why?
1) The seniors deserve their fate. They are the fools who voted for FDR and LBJ and big-government Republicans.
Apr 3, 2008 - 12:01 pm 17. dscott:2) They are a minority. A minority that is expanding in size, but a minority never-the-less. The only way they can get “their” money back is to steal it from the majority, just like their parents stole it from them, and the only way they can do that is if they out-vote the workers. This they will not be able to do, once the workers realize the extent of the planned larceny.
3) Since somebody has to go hungry, who is it going to be; some old geezer who lived high off the hog for 50 years, or a working mother with children to feed? Think about it!
Ken, while privatizaton such as something equivalent to a 401k would make financial sense, we are dealing with a lot of power hungry, self serving, greedy politicians who have nothing to gain by allowing privatization unless… they get their tax on mutual fund transactions to skim the SS Trust and 401k’s funds by stealth. They will never allow individually directed private accounts since they claim that some people are too stupid to invest wisely and thus will not have enough for retirement and then draw food stamps, welfare/TANF or whatever they call it these days. The only viable private type account will be some income percentage based monthly check using a defined benefit standard pension fund model.
Bill, you may be correct, however, unless and until the surplus funds are being invested instead of embezzled for the annual operating budget, there is no hope any of us will ever even come close to getting some of our money back. Until the SS trust fund is uncoupled from the federal budget, the embezzlement will continue, so in the meantime, I say come on 2017! The year the embezzlement ends. Then so many people will be enraged and furious at the incompetent libs, that they will finally stop voting for them.
So my advice to everyone is don’t be a victim, take your fate in your own hands, put $100 away every month in an IRA or 401k and invest in the indexes, if you start in your twenties, you will be a millionaire by retirement.
Apr 3, 2008 - 12:34 pm 18. njcommuter:As bad as all these things are, there’s a fundamental consideration that’s worse.
Let’s say that the money had been invested in private enterprise via the financial markets, with an appropriate amount (8%?) in various government paper. At some point, the amount pulled out of those securities exceeds the amount being put in. The fraction of people living off this money and no longer working increases drastically; the number of people working to support them cannot keep up and actually drops off.
The demand for goods and services–especially services–will increase, and their supply will not be able to expand because there are fewer people to make things and do things. Prices will necessarily rise, cutting into the value of all that money being pulled out of the financial markets.
I can’t see what the secondary effects will be, or how they will balance, but it is a very serious problem that we will all face. Japan is facing it with robots to assist in personal service. We should be facing it by reducing the number of people involved in regulation, and by holding regulatory agencies publicly accountable for the drag that they impose. Making those who support the drag publicly accountable will help also.
Apr 3, 2008 - 1:55 pm 19. Ken:dscott:
Apr 3, 2008 - 2:41 pm 20. Curly Smith:Exactly. Being in my 20’s, I consider all the payroll taxes I pay in lost. What it really means is that I make 6% less than what I think I do. Meanwhile 20% goes into a 401k account that should be relatively safe, as long as our economy remains some sort of shape. Personally, I would be willing to take a deal that would go along these lines. I’ll keep paying 6% of my income just so that every person who is over 50 now will continue to receive benefits. After the last of them dies off, I stop paying. Everyone under 50 is responsible for their own savings. Sure put some safeguards in place to protect people from themselves, like no one is allowed to touch the account until retirement, borrow against it, and they can only receive benefits in monthly payments instead of a large sum. Only “qualified” brokers are allowed to manage these accounts (As long as there is more than one broker, so that there is some competition). Will we see a deal like that? Doubt it.
And please guys; let’s keep the risks in perspective. Our economy may shrink, even considerably. But even multiple acts of nuclear terror acts are not enough to unleash hyperinflation like what we see in Zimbabwe.
Why worry about Social Security?
from: http://www.parapundit.com/archives/002013.html
“The new Medicare drug benefit alone has a bigger unfunded liability than Social Security.
In a briefing Tuesday on Capitol Hill, NCPA Senior Fellow and Social Security and Medicare Trustee Thomas R. Saving reported that:
- Social Security faces an unfunded liability of $10.4 trillion.
- Medicare’s unfunded liability is $61.6 trillion - six times greater than Social Security’s.
- The prescription drug benefit alone faces a funding gap of $16.6 trillion - more than 50 percent greater than Social Security’s.”
For reference, the proposed federal budget will be slightly over $3 trillion. Of course by adopting Universal Healthcare we’ll wipe out the unfunded liabilities for Medicare and prescription drugs. Don’t get me wrong, the liabilities would still exist, they’d just be rolled into Universal Healthcare.
Apr 3, 2008 - 4:03 pm 21. Fatcat:Well now, don’t you folks know what will happen when SS starts to go belly up? I’m sure that most of you who feel secure knowing that you have invested in Mutual funds and bonds and such. And you probably feel that you can do with out SS if need be, but your little nest egg that you have built over the many decades will be TAKEN from you by the gov’t to pay SS benifits.
Yes that is correct. The greatest amount of untouched capital in the country is 401K funds and privet investments. The gov’t will be so desperate that they will say that “you as the winner in life’s lottery need to pay your fair share of your retirement savings to help others”. And the gov’t will give you worthless IOU’s for the $1.5 million or so in your retirement accounts. And don’t laugh this scheme off as “they will never touch privet 401K accounts”, they WILL because there are more poor people who will vote toget their hands on YOUR money then rich 401K savers.
Invest in lead, copper, brass, and smokless power … we’ll need it in the coming decades when it all collapses.
Apr 4, 2008 - 3:31 am 22. Larry J:Being in my 20’s, I consider all the payroll taxes I pay in lost.
I turn 51 in a few weeks and I feel the same about the payroll taxes. That’s money I’ll never see again.
And you probably feel that you can do with out SS if need be, but your little nest egg that you have built over the many decades will be TAKEN from you by the gov’t to pay SS benifits.
Actually, I doubt the politicans have the guts to try and do that. Any politicians who vote to confiscate IRAs and 401K accounts will very likely find themselves hanging by their necks from lamp posts the next time they leave DC. Do you think that millions of people are just going to sit back and let them steal our retirement savings that brazenly? I strongly doubt it. There will be some immediate vacancies in Congress if they try it and I suspect Congress knows it.
Instead, what I see happening is that SS will be means tested. They may say that those of us who saved for our own retirement don’t need SS and deny payments. However, that itself may be too obvious. Instead, what they’ll likely do is to repeat what Congress and Clinton did in 1993 - increase the taxes on retirees who have an income above a certain minimal level. That way, they can say that we’re still getting our SS checks only they’ll immediately be taxed away from us as higher income taxes.
Apr 4, 2008 - 6:39 am 23. Wacky Hermit:Larry J: “I doubt the politicans have the guts to try and do that… Do you think that millions of people are just going to sit back and let them steal our retirement savings that brazenly?”
Well, yes. Think about how many people in this country are enchanted with tax schemes designed to “soak the rich”, with “the rich” being defined as anyone with an annual income over $70,000. Think where this sort of argument could go– “the rich” don’t need that extra money, do they, and they’re all hoarding it away where “us little people” can’t have it! They cheated on the Social Security system, which is of course right and proper and by definition provides a decent, if minimal, retirement! You get the picture.
Any politician who can frame it as a class warfare issue will probably get off scot-free.
Apr 4, 2008 - 8:18 am 24. gcblues:the most important point is missed. if FDR had began this as private savings account, owned solely by the savers and if not used in their life passed on to their heirs, most Americans that worked all their lives would today be millionaires.
your ssi benefits will all be paid in full, unfortunately, they will be paid with dollars that will not buy much.
which is why at 47, a short 4 years ago, being self employed all my life, i sold everything, invested, and left the USA. as an expat, i pay no state tax,all my cap gains are taxed at a low rate. so my net income barely changes by not working because self employed people pay the most of everyone. it is an amazing relief. if some fool wants to raise cap gains rates, i will renounce my citizenship. The usa, land of liberty is long ago gone. i only miss costco and the Oregon Ducks, the rest you can have. time for the Atlases of the USA to shrug, and bail.
Apr 4, 2008 - 8:38 am 25. Johnm:I completely agree with fatcat. The politicians will solve this problem by imposing confiscatory tax rates on 401k withdrawals or, even worse, imposing some kind of annual surcharge on 401k balances. The amount of money there is well over $1 trillion and growing. Do you think that the politicians will look at that pile of money and not try to figure out a way to grab a piece of it? There is no backbone in DC or state capitals to attack the true problems, which is the growth of unfunded entitlement spending. Given the choice, they will take the shortest route. They will tax the “millionaires” who have saved for 40 years, and they will make it sound like we’re the greedy ones for not paying our fair share.
Apr 4, 2008 - 9:41 am 26. dscott:Actually, estimates are much higher for the total worth of 401ks and Defined Benefit plans in the $12 trillion range. http://www.newamerica.net/files/NAF_10big_Ideas_3.pdf
This is why Dems have been floating the tax on mutual fund transactions, it’s their way of pilfering another retirement program because they see they are running out of money to steal from the SS Trust Fund.
gcblues, the reason why they weren’t put in private accounts was SS was essentially a welfare program for seniors when it first started. Those who had jobs supported those who couldn’t work due to age and infirmity. They should have switched after the program got going, but again, the point of government giving something and not casting it as a result of investment income is to make the public beholding to the politician.
Apr 4, 2008 - 10:17 am 27. Baby Boomer:Why worry, We are going to give you all that money in about 20 years..
Hang in there and get rich!
Today’s financial planners sit on the leading edge of what is expected to be the greatest transfer of wealth in the history of America. The economic boom of the 1990s created an unprecedented amount of personal wealth in America—currently estimated at more than $33 trillion. At the same time, today’s retirees constitute one of the wealthiest segments of the U.S. population with more personal wealth than any previous generation.
Economists believe that bequests of this wealth will significantly boost the resources of the 78 million Baby Boomers. That means by the year 2052, an estimated $40.6 trillion will change hands as Baby Boomers and their parents pass on their accumulated assets to their heirs.
We will pass on to our grand children the greatest wealth ever accumulated in America.
Apr 4, 2008 - 10:45 am 28. boqueronman:Hey, gcblues. Welcome to the club. My wife and I also moved out of the U.S. some years ago for the same benefits as you. I can’t believe that the few of us that have already seen the light will not turn into a flood as the Boomers see the troubled waters rising. Lower cost of living and lower taxes (plus in-home help 5 days a week). Can’t beat it. I suggest the rest of you pick out your country and plot of land for investment now.
Apr 4, 2008 - 10:59 am 29. Ouch « Tai-Chi Policy:[...] Politics, Social Security. trackback Tom Blumer has prepared a spreadsheet that shows that our next president will have to start dealing with Social Security in 2010. I just don’t see that happening unless we get the small fraction of Republicans/Libertarians [...]
Apr 4, 2008 - 12:50 pm 30. Bill Nabor:OK, Ken, I did exaggerate with the Zimbabwe example. At least I hope I did, but it does not take that degree of catastrophe to wipe out Social Security benefits. I have been retired for 5 years now, but at 60 I am not eligible for Social Security. Even so, in that short time I have seen gas prices quadruple, the value of my house decrease by $100,000 (one fifth of its value in only 5 years), utilities double, and so forth.
Consider this: When I was in high school (early ’60’s) gas was 25 cents/gallon. I once paid 16 cents ($.159) a gallon in - get this - New Orleans. Motel 6 was $6.00 a night. Premium ice cream (the kind you can’t buy today at any price) was 99 cents a half-gallon. Milk was 47 cents a half-gallon. My first car cost my parents $3,000 brand new. They bought their custom-built house in 1950 for $8,500 (land included). I had a good job - $1.50 an hour and was absolutely elated when the boss raised it to $1.75 on merit. If I retired in 1960 earning that amount in Social Security (some $3,500 a year) would I be able to survive today? That’s how inflation works and that’s how I believe the government (Republican, Democrat, or Ralph Nader) will eliminate the SS benefits: Raise the minimum wage to $100,000 a year, tax that, let prices increase accordingly (thus ripping off everybody’s savings in the bargain), and keep the seniors on their defined allotments (now worthless). Ain’t politics a hoot?
Apr 5, 2008 - 3:09 am 31. BizzyBlog » Social Security Will Cause Fiscal Headaches Within Just Two Years:[...] This column was originally posted at Pajamas Media on Thursday under the title “Social Security: Anything But Secure.” [...]
Apr 5, 2008 - 5:51 am 32. Baby Boomer:40 trillions of transferred wealth from the Baby Boomers to our grand children? Maybe, If we do not allow a Hillary, Bama or any president create a Universal Health care package that would transfer 3 trillion a year from us to the Drug, Doctors, Hospitals, Government surplus. Obamammy and other Democrats know all too well about all the wealth they can get their tax little hands on..
Apr 5, 2008 - 7:41 am 33. Michael Smith:gcblues, I am with you. I’m ready to shrug. What country did you go to?
Apr 5, 2008 - 12:37 pm 34. punslinger:The solution is really quite simple. Put Hillary in charge of SS and let her invest it in cattle futures. Double or tripple the money in no time. We could even reduce the ss taxes.
Apr 6, 2008 - 7:30 pm 35. BizzyBlog » Social Security’s Crisis Will Arrive Six Years Early:[...] A year ago, I wrote: Think Social Security will be solvent until 2041? Think again. The next president will face rapidly growing problems by the end of his or her first term. [...]
Apr 5, 2009 - 12:03 pm