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Here are his suggested "fixes" to SS. Problem is, there is a very powerful lobbing organization (called politicians) that would not allow these, what I would call obvious, changes. Can you imagine Republicans pissing off their rich base with option #1, or either party taking heat with options #'s 2 and 3? These things could and should have been done yesterday, but good luck getting politicians to agree. The rich will not want to pay more. The middle class and poor will not want to wait for full benefits.
1- Eliminating the taxable earnings cap over a 10-year period would fix 74% of the long-term financing gap all by itself.
2- Raising the Social Security payroll tax rate from 6.2% to 7.2% over a 20-year period would generate 52% of the shortfall.
3- Finally, gradually raising the full retirement age to 68 would take care of 16% of the funding gap.
How come no one in corporate America or the government has thought about the US Treasury returning the SS funds (aka the Trust Fund) that the government has absconded with since LBJ needed to find money to support his war in Vietnam.?
Myth 4: President Roosevelt promised that the money the participants paid would be put into the independent "Trust Fund," rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement program, and no other Government program
The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.
The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."
Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself.
The debate about Social Security reform contains a certain amount of crazy which has been accepted mostly through volume rather than fact. One of the most pervasive myths in the Social Security debate suggests that President Lyndon Johnson (LBJ) stole the trust fund in order to pay for Vietnam.
Besides, even if true, which it turns out your apparently strong belief is just a myth based on a change in how trust funds were accounted for in the budget, basically an accounting change, how does that fix things going forward? Are you saying Buffet's ideas are not good ones or do you think going forward they can work? Or, do you propose another solution? (Other than looking for money from 1969 that doesn't exist).
So far Maurice your response added nothing to the conversation.
Please don't confuse Maurice with actual facts from this universe. He lives in an alternate universe, which is very confusing because it has a few things in common with ours.
@Maurice, is it hard for you to admit you quote a lot of fake stuff or that you believe a lot of fake myths perpetrated by slanted "news" organizations?
The deficit will be absorbed by the US budget. Problem solved
Not by my statement, it's Buffet's. I just happen to agree with his 3 steps.
but I wonder if someone like Bernie Sanders becomes President, what would we do? would he use current surplus (until the time surpluses are there) toward Medicare? will he adjust SS taxes lower/higher to match expected payouts over next X years? everyone seems to agree something needs to be done about SS but no one can agree on what.
the worst idea i have heard of course is to take part of the collection and invest in the stock market. once you start something like that, it will be followed with, "borrow against the stock market" and "expected 8% return on the money" and some crap like that, to eventually crack the egg.
those who are able to take SS, take it as early as you can. waiting for long and getting higher monthly payout and how if you leave X years you will come out ahead is just statistics and does not take into account inflation. it also does not take into account people have to make decisions in the present and not in the future.
>> those who are able to take SS, take it as early as you can.
I suggest, those who are able to take SS, take it as late as you can afford to. It does take inflation into account --- huh? "Just statistics" is a wonderful. msf and others have spelled out the trades.
>> those who are able to take SS, take it as early as you can.
I suggest, those who are able to take SS, take it as late as you can afford to. It does take inflation into account --- huh? "Just statistics" is a wonderful. msf and others have spelled out the trades.
For someone like me who has made a career of living a miserly life, I might never end up taking it and my quality of life in my last days on earth would suck even more. If I could predict when I was going to die, I would know when to take it. If I am 80 and still have money in the bank do I take it or no?
Right now the way I'm thinking, if I'm not earning at 62, I'm going to take it. I'm wondering when someone is going to publish article that says, "take at 62 and invest in stock market for 8% return and you will come out ahead", and come up with a nice hypothetical chart. Maybe someone already has.
At the risk of sounding like a soak-the-poor lunatic, let me say that I am not in favor of simply removing the cap on wages subject to FICA taxes. By design, there is a coupling between amount paid in and size of benefits - the more you pay in, the more you get out.
Not that I'm opposed to raising (or removing) the cap so long as this coupling is preserved. Just as there are bend points in the payment formula now (it's piecewise linear, for those mathematically inclined), one can add additional breakpoints so that payouts don't go up much as you pay in more. But IMHO they must go up somewhat.
Rather than rant on, let me cite a page with a much richer description of the issue involved, from that well known right wing media source, MSNBC (the URL is NBC, but the writing/program is MSNBC):
Comments
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Derf
So far Maurice your response added nothing to the conversation.
More info on SS myths, including yours:
https://www.ssa.gov/history/InternetMyths.html
Follow your leader.
At the same time, let's let everybody earn the first $10,000/yr Social Security tax-free.
Do you think maybe the significance, importance, and intent of the program may have evolved a little bit since 1939?
but I wonder if someone like Bernie Sanders becomes President, what would we do?
would he use current surplus (until the time surpluses are there) toward Medicare?
will he adjust SS taxes lower/higher to match expected payouts over next X years?
everyone seems to agree something needs to be done about SS but no one can agree on what.
the worst idea i have heard of course is to take part of the collection and invest in the stock market. once you start something like that, it will be followed with, "borrow against the stock market" and "expected 8% return on the money" and some crap like that, to eventually crack the egg.
those who are able to take SS, take it as early as you can. waiting for long and getting higher monthly payout and how if you leave X years you will come out ahead is just statistics and does not take into account inflation. it also does not take into account people have to make decisions in the present and not in the future.
Ted was wise to take at 62.
I suggest, those who are able to take SS, take it as late as you can afford to. It does take inflation into account --- huh? "Just statistics" is a wonderful. msf and others have spelled out the trades.
Right now the way I'm thinking, if I'm not earning at 62, I'm going to take it. I'm wondering when someone is going to publish article that says, "take at 62 and invest in stock market for 8% return and you will come out ahead", and come up with a nice hypothetical chart. Maybe someone already has.
SS can, and will, in a manner of speaking.
Take it when you absolutely need it, sure, and delay if you have any choice about it at all.
As for odds-playing, do you have earlyish mortality in your family? Are you a chainsmoker, or majorly overweight? Etc.
Not that I'm opposed to raising (or removing) the cap so long as this coupling is preserved. Just as there are bend points in the payment formula now (it's piecewise linear, for those mathematically inclined), one can add additional breakpoints so that payouts don't go up much as you pay in more. But IMHO they must go up somewhat.
Rather than rant on, let me cite a page with a much richer description of the issue involved, from that well known right wing media source, MSNBC (the URL is NBC, but the writing/program is MSNBC):
http://www.nbcnews.com/id/51512861/t/what-would-frances-perkins-think-current-social-security-debate/