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0 pointsbkmartin12y ago0 comments

Please do not lump Social Security as part of the problem. That program is solvent. Your main point is correct, but maybe medicare is a better example since it is not a self sustaining program.

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jes12y ago

This article[1] comes to a different conclusion:

“Neither Medicare nor Social Security can sustain projected long-run programs in full under currently scheduled financing, and legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers.”

Is the article in error?

[1] http://www.forbes.com/sites/mikepatton/2013/06/12/is-the-soc...

Thrymr12y ago

That's because Social Security has been running a surplus for many years (until 2010). The question is whether the US government, which already spent that surplus, but gave a bunch of bonds as promissory notes to repay, will actually do so. Payroll taxes were meant to prepare for the baby boom retirement, and were enough to do so, but that money is gone, not in a "lock box".

_delirium12y ago

It's also been completely expected since the 1980s, so it's weird that this is now being portrayed as some kind of a problem. Reagan proposed an increase in payroll taxes, so that Social Security would run a large surplus for ~25 years, which would then fund the baby-boomer retirement. As far as cash-flow goes, that surplus went into the general treasury during the surplus years, and now it is the general treasury's obligation to repay it to Social Security out of general revenues for the next ~30-40 years.

It's possible people will choose not to do so, but that's not a matter of Social Security being insolvent. That's a matter of people simply not wanting to keep the promises, because they want lower taxes or something. If Social Security is not repaid, then payroll taxes will be retroactively converted to a regressive general income tax, where only income under $114k is taxed, which would be rather bad.

pessimizer12y ago

>Is the article in error?

No, just euphemistic propaganda. The "disruptive consequences" are that within 20-30 years Social Security may have to be cut to what will be a higher benefit (if productivity gains are considered) than people are currently receiving now. The "legislative changes" are to cut benefits now.

Lumping Medicare in, which has a serious problem because of the horrible US healthcare system, allows Forbes to pretend as if there's anything wrong w/SS.

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