Obama, the Trojan Horse

[onmyknees]

Neither social security or medicare are insolvent. They have their own revenue streams. The big panic is a misread of the boomer phenomenon. There's going to be a 20 year bump in the number of retirees starting this year. It's not permanent. The idea that we need to come up with draconian changes in the system to make up for a temporary anomaly is just silly.

The problem is priorities. For the last 30 years, we've been going out of our way to cut revenues & increase spending at the same time. That hasn't worked out too well. We need to get out of the war biz. Maintaining an empire is ungodly expensive. The beneficiaries aren't footing the bill, & we're not reaping the benefit. We're in the process of trying to shrink the middle class. To what end? Where'd this idea come from that holding down wages boosts the overall economy, that's 70% consumer spending? This is still the world's largest market, but that'll go away a lot sooner than necessary or wanted if the working class goes broke. Derivatives have their place, but when there's more money in hedge bets than productive capital, something is definitely skewed. We've gotten so twisted up in crackpot theories that we've lost track of the realities that are right in front of us. None of this shit's workin'. We need a rethink.

Silly ?????? By 2016, Social Security will begin paying more in benefits than it will collect in payroll taxes. This trust fund will be exhausted by 2037. After 2017 the government will have to borrow money, or tap general revenues to meet the systems obligations. Those are facts provided by the Actuary. Facts....not suppositions. So your "what's the big deal" attitude is strange. Either we make some moderate changes now, involving difficult choices, and spreading the pain equally, or Aunt Nellie will truly be eating Alpo in 10 years ! Does the President have the metal? We shall see, but indications are...he'll keep kicking the can down the road.

With respect to privatazation....It's a classic difference in philosophy. You all prefer government solutions directed by Washington . Talk about things not working out too well !!!!!! I rely on the government for almost nothing. I'm perfectly willing to pay that portion of my SSI tax to keep the social contract with the elderly and widows and orphans, but why should the government be able to prevent me from investing a portion of my money ( and it is my money) into a few selected securities? Had I had that ability to invest a small portion, I could have increased that portion 10 fold over what SSI has done with the same money over the same time. . And I hate to be political, but when Bush's SS commission came out with recommendations, the liberals could get to the microphones fast enough to pander and scare. Chuck Schummer was particularily vocal, but he's never met a camera he hasn't fell in love with and he demagogued the issue. This despite that Patrick Moynihan provided many of these solutions. Any chance of serious discussions was vaporized. Those are facts....like them or not. I do submit that the American worker should not be coerced into planning his or her future on the edicts of Washington politicians and policy wonks. Social Security, like most government programs, offers one-size-fits-all solutions for a diverse nation of 300 million-plus and fosters dependency and conformity.

[hippifried]

It's not your money. It's a collective national fund with a specific putpose. Nobody's keeping you from investing your own money any way you want. You just don't get to play & gamble with the Social Security Trust. Even though the market's back with a vengeance, all that retirement income that was lost in '08 is still lost. That didn't happen to Social Security. 401Ks, annuity funds, & various mutual funds lost their butts or vanished altogether. I've been listening to the doom & gloom of how the fund's going to be in the red in 15 or 20 years for the last 30 or 40 years at least. Yet here we are, still in the black. Like I said, there's a 20 year anomaly starting due to the baby boom. This will pass. We had kids too. I'm a boomer. 2 of my grandchildren are starting to pay into the system. 2 more will start paying in over the next decade, & my first great grandchild is going to start her journey in another month or 2. I'm not even collecting yet, but I figure I'm covered by my own bloodline. The numbers can be skewed any way you like. There are no facts until they actually happen.

[ed_jaxon]

My point is that the problems with both Social Security and Medicare are being caused more by the aging of America than the wars in Afghanistan and Iraq.

In 1935 when Social Security began the average life expectancy was slightly over 60 and now it is almost 80. The age Tsunami is here and will subside when Gen X begins to draw in a little under 20 years.

If you are going to blame anyone blame your grandparents for fornicating when the war ended. Neither Bush nor Obama created this.

[trish]

I knew that was your point, but it's wrong. It's not like we just discovered the baby-boom. Ten years ago we had a budget surplus and SS was determined to be solvent well into the 21st century. That's how Bush sold us on giving that surplus to the wealthy in tax cuts (according to Bush it was their money to begin with...what balls!). After the tax give away and the two wars in the middle east, suddenly China is holding our purse strings. No, you can't lay this on our grandparents. It falls squarely on the shoulders of those who argued for tax breaks to the wealthy, who argued for the wars in the Middle East (and those who are keeping us there), and deregulation of the greedy on Wall Street.

[ed_jaxon]

How does the surplus have anything to do with Social Security. Money promised to workers needs to be paid if there is a budget surplus or deficit. We did not just discover the Boomers but they just started pulling in Social Security beginning in 2007.

Bush never raided the trust fund because THERE IS NO TRUST FUND! The government owes a debt on that money and would owe it regardless of any of the wars. To Hippi's point , the bill has not come due and we don't know what will happen between now and then.

In a simple example in 1940 one person got the first social security check and for a moment everyone else was paying in and one person was pulling out. In 2017 we are scheduled to be running deficits which simply means more people pulling out than putting in. 2040 or so is when the debt that is owed by the government is scheduled to run out. This happens regardless of Wall Street, tax breaks or wars.

For arguments sake lets say that social programs are cut, the wars end, the economy bounces back and the surplus is restored. We are still going to have problems with Social Security because we still owe the debt and people are going to be pulling more money out of it than previous generations because they are living longer into their lifespans. The fastest growing segment of the population is those over 85, designated as the old old.

We have raised the retirement age before as well as adjusted the FICA rate. Politically, it is a big deal but in the long run it's not, adjustments have to be made to fit current and future parameters that were not foreseen previously.

We just had a big tax increase here in Illinois and guess what, my check went up. Why? Because FICA just went down, part of the horse trading to extend unemployment benefits.

Bush did a lot of things (WMD's as an excuse to start an expensive war, budget surplus given away) but he was not responsible for the coming adjustments needed in Social Security.

My main point is this...too many on both sides want to blame the others rather than finding an equitable way out of this problem.

[trish]

When money is collected for a future purpose but isn't invested or set aside that's raiding. Bush wasn't the only one to engage in the practice. Defense budgets and the budgets of other departments have been balanced on the back os SS for decades. SS works. The problem is it worked too well and fell into the hands of "pirates". It's time now for the Defense Department to pay up and stop the wars. It time now to re-regulate Wall Street.

[Odelay]

I was for privatization of ss some time ago, but eventually I saw two problems arising from this and they both involved lining the pockets of rich people.

I. The republican proposals that onmyknees liked so much back in 2005 all involved directing those "private" funds to specific financial funds, which would involve paying fees to specific rich brokerage houses. There was going to be little or no choice involved. If you don't have control of your money, you won't get the imaginary returns that onmyknees envision. Since onmyknees likes to use the word fact, I'll use it here.... fact! Go look it up. Those Bush proposals funneled all privatization funds to specific financial funds that the government dictated, i.e. republicans... since they were controlling the legislation at the time.

II. There's a structural problem with taking a huge part of retirement funds out of the public pension, and putting them into the stock, bond, or funds market. On the day that it looks like the privatization will happen with subsequent signing by the President, all rich investors with money on the sidelines will flood into the market, artificially raising the value of stocks, bonds, funds, etc. Then once the privatization funds (from middle class investors) finally get invested into the market, those rich people that doubled down will sell back their inflated shares back to the middle class, causing a huge downtick in the markets. The rich will make huge profits from this simple arbitrage action. The middle class could see their privatized investments lose 10% to 20% right out of the gate. And there is no way to avoid this structural arbitrage.

[ConradG]

The Trojan Horse was made of wood, Obama is a man. He inherited a dysfunctional system -I defy anyone to come up with a solution in one term to the accumulation of problems left to him by your Grand Old Party.

[hippifried]

Uh, Ed. I don't know where you're coming up with these stats & whatnot, but you're way off base.

First of all, the baby boom only lasted for 10 years. From 1946 to 1956. It's not like there were no babies born before or after, It was just a 10 year spike. Unless they're disabled for some reason or they opted for early retirementat a reduced rate, the first boomers are starting to retire this year. They have 20 years on the outside. 15 on average.

Social Security isn't an annuity, a savings account, or an insurance policy. It's a trust fund, where the current payees are covered by the current payors. It's always run a surplus, & that surplus is invested in treasury bonds. The idea that anybody's "raiding the fund" is a misconstruence of the reality. What's being raided is the treasury, & the fund is being pressured to take on more bonds. There's a question of whether the treasuries can be liquidated in a timely fashion to keep up with the payouts. The fund isn't going broke. It's just not as liquid as it would like, & it will get tight over the period of retirement of the boomer spike, The spike is temporary, although it may deplete a chunk of the surplus by the time it levels back out.

As far as I know, the retirement age has always been 65. Throughout my lifetime anyway, & I've been here for a while. There's been talk about raising the age for the last 30 years. About the same time the deficits started getting out of control. About the time the out of control deficits were being proposed in '81 actually. Almost like today's financial problems were preplanned. Personally, I date it back to '71. August 15th to be exact, although I'm pretty sure the shock was preplanned too, & I have no way of knowing when it all started.

I know things are going to tighten up over the next 2 or 3 decades, but I'm not ready or even willing to panic. If y'all want to jump on Chicken Little's bandwagon, so be it. Most of these problems go away if you just raise the income cap.

[beandip]

SS has a 2.6 TRILLION dollar surplus. It won't run out for almost 30 years

Where? Please provide an account number where this "surplus" is.