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Pension Ponzi Scheme $16 Trillion Short?
Laurence J. Kotlikoff, professor of economics at Boston University and author of “Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking”, wrote an op-ed piece for Bloomberg, Retiree Ponzi Scheme Is $16 Trillion Short:
Social Security
just celebrated its 75th birthday. Love it or hate it, it has done its
job and should retire. We need a new system, the Personal Security
System, which retains Social Security’s best features, scraps the rest,
and covers its costs.Social Security’s objective -- forcing
people to save for retirement -- is legit. Otherwise millions of us
would seek handouts in our old age.
But Social Security has also
played a central role in the massive, six-decade Ponzi scheme known as
U.S. fiscal policy, which transfers ever-larger sums from the young to
the old.
In so doing, Uncle Sam has assured successive young
contributors that they would have their turn, in retirement, to get back
much more than they put in. But all chain letters end, and the U.S.’s
is now collapsing.
The letter’s last purchasers -- today’s and
tomorrow’s youngsters -- face enormous increases in taxes and cuts in
benefits. This fiscal child abuse, which will turn the American dream
into a nightmare, is best summarized by the $202 trillion fiscal gap
discussed in my last column.
The gap
is the present value difference between future federal spending and
revenue. Closing this gap via taxes requires doubling every tax we pay,
starting now. Such a policy would hurt younger people much more than
older ones because wages constitute most of the tax base.
What about cutting defense instead? Sadly, there’s no room there. The defense
budget’s 5 percent share of gross domestic product is historically low
and is projected to decline to 3 percent by 2020. And the $202 trillion
figure already incorporates this huge defense cut.
The 3-Year-Old Vote
Reducing
current benefits, most of which go to the elderly, is another option.
But such a policy is highly unlikely. The elderly vote and are
well-organized, whereas 3-year-olds can neither vote, nor buy
Congressmen.
In contrast, cutting future benefits is politically
feasible because it hits the young. And that’s where Congress is
heading, starting with Social Security. The president’s fiscal
commission will probably recommend raising Social Security’s full
retirement age to 70 from 67, for those who are now younger than 45.
This won’t change the ages at which future retirees can start collecting
benefits. It will simply cut by one-fifth what they get.
Some political economists point to Social Security’s 2010 Trustees Report and say, “Leave it alone. The system won’t run short of cash until 2037.”
Misleading Accounting
Unfortunately,
the Trustees’ cash-flow accounting, like all such accounting, is
arbitrary and misleading. In fact, Social Security is broke. Its fiscal
gap, which the Trustees measure correctly, is $16 trillion.
This
gap is small compared with the U.S.’s overall $202 trillion shortfall,
not because the Trustees treat Social Security’s $2.5 trillion trust
fund as an asset (a questionable choice), but because they credit
one-third of federal revenue to the program.
But dollars are
dollars. If we re-label Social Security “payroll” taxes as “general
revenue wage taxes,” Social Security’s fiscal gap increases by $60
trillion, and the fiscal gap of all other government activities falls by
$60 trillion, leaving the overall $202 trillion gap unchanged.
Even
by the Trustees’ measure, there’s a massive problem. Coming up with $16
trillion requires permanently raising revenue or cutting benefits by 26
percent, starting now. In other words, the program is 26 percent
underfunded.
Hitting Young People
Now cutting benefits
of new retirees by 20 percent, with an increase in the so-called full
retirement age, starting 20 or so years from now isn’t the same as
immediately cutting the benefits of all retirees by 26 percent. Hence,
the fiscal commissioners will need to hit young people with an even
bigger whammy if they really want to solve Social Security’s long-term
woes.
Most likely, Washington will simply raise the retirement age and kick the can further down the road. This is what the Greenspan Commission did in 1983, knowing full well that by 2010 the system would be in even worse shape.
I
say, retire Social Security and replace it with a version that works.
Do this by freezing the current system, paying today’s retirees their
benefits, while paying workers only what they have accrued so far once
they retire.
Next, have all workers contribute 8 percent of
their pay to the new system, with half going to a personal account and
half to an account of a spouse or legal partner. The federal government
would make matching contributions for the poor, the disabled and the
unemployed, permitting the system to be as progressive as desired.
Going Global
All
contributions would be invested in a global, market- weighted index of
stocks, bonds, and real estate. The government would do the investing at
very low cost and guarantee that contributors’ account balances at
retirement would equal at least what was contributed, adjusted for
inflation.
Between ages 57 and 67, each worker’s balances would
gradually be swapped for inflation-indexed annuities sold by the
government. Those dying before 67 would bequeath their account balances
to their heirs.
While this plan has
private accounts, Wall Street plays no role and makes no money.
Additional contributions would be used to fund life- and
disability-insurance pools.
Our nation is in terribly hot water.
Business as usual is no answer. The only way to move ahead is to
radically reform our retirement, tax, health-care and financial
institutions to achieve much more for a lot less.
The Personal
Security System is a major step in that direction. It meets all the
legitimate goals of Social Security without the system’s waste and
penchant for robbing the young.
Wall Street plays no role and makes no money? Who are we kidding here?
Wall Street wolves are hungry and they want a piece of the Social
Security (SS) pie. In fact, conspiracy theorists will tell you that this
whole financial crisis was manufactured with the ultimate goal of
privatizing SS, allowing the fat cats on Wall Street to make even more
money as they find new sources of revenues to fund prop desks, hedge
funds, private equity funds and real estate funds.
But there is a legitimate
argument to be made for properly diversifying SS. Back in 2002, Mark
Sarney and Amy M. Preneta of the Social Security Administration’s Office
Retirement Policy wrote a discussion paper on The Canada Pension Plan’s Experience with Investing Its Portfolio in Equities.
The paper is outdated but very relevant and well written. In particular,
there is an excellent discussion on governance and oversight on the
Canada Pension Plan Investment Board, including measures to ensure
accountability to the public:
- It is subject to special examination at
least every 6 years by the federal finance minister in consultation with
the participating provinces.- It must provide quarterly
financial statements and annual reports on the performance of the CPP
Investment Fund to the federal and provincial finance ministers and the
federal Parliament. The CPPIB also issues quarterly statements to the
public, though it is not required to do so by legislation.- It
undergoes a performance evaluation as part of the Triennial Review, a
required review of the financial status of the CPP that includes issuing
an actuarial report on the CPP.- It must hold public meetings to
discuss its performance at least every 2 years in each participating
province (Human Resources Development Canada 1997, 10-11).The
result of having these accountability measures is that the board’s
activities and finances are overseen by several entities: the
government’s Chief Actuary, the federal Parliament and the legislatures
of the participating provinces, the 10 finance ministers, and the
public. In addition, the board has an outside firm conduct an audit of
its finances for its annual report.
Canadians are lucky that they have the Office of the Chief Actuary of Canada (OCA) playing a key role overseeing the activities of the Canada Pension Plan Investment Board (CPPIB).
In my opinion, the OCA sets the bar in terms of professionalism and
accountability when it comes to how Canadian federal government entities
run their operations.
And while CPPIB has its critics, the reality is that they are very well
managed and take governance issues very seriously. My concern with CPPIB
and other large public pension funds is that they're too big. I prefer
splitting up CPPIB, the Caisse, CalPERS, and other large public pension
funds because at one point, size is an issue and it becomes harder to
deliver the required actuarial returns without taking undue risk. But
that's a discussion for another time.
Getting back on topic, is the Pension Ponzi $16 trillion dollars short? No, it's worse if you factor the trillion dollar gap of underfunded state retirement systems. Most state retirement funds lack the governance standards of their Canadian counterparts. [Note: Read on how trustees of the Kentucky state retirement system will re-open an investigation into payments to investment middlemen.]
One thing is for sure, the US and other developed nations face a
huge retirement problem and if they don't take measures and introduce
proper reforms, which includes the highest governance standards and
proper funding of these systems, then they're heading for a major
collision somewhere down the road.
Finally, as long as they reform
retirement systems, maybe authorities can finally introduce meaningful
reforms to financial markets. On Wednesday, the Council of
Institutional Investors applauded the Securities and Exchange
Commission’s (SEC) adoption of a rule that gives shareowners a bigger voice in electing corporate directors.
Great
but this is the tip of the iceberg. Much remains to be done to clean up
financial markets from the crooks and banksters who routinely and
legally steal money from individual and institutional investors. Before
you privatize SS, make sure you restore confidence and faith by cleaning up
markets once and for all. On that last point, listen to Jim
Puplava's recent interview with Laurence Kotlikoff below.
»
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"...permitting the system to be as progressive as desired."
"The government would do the investing at very low cost and guarantee..."
Danger, Will Robinson!
Turning an unfunded entitlement program into a government guarantee for tax-free, private market losses on pensioneering isn't a fiscal improvement.
You have a false sense of compassion and moral superiority if you think robbing one group of people to help a group YOU think is more deserving is what we (the government) should be doing. We have dumped a lot of family responsibility on the shoulders of strangers. If the truly destitute need help, that's one thing, but please don't resort to the tired old canard of the wretched old lady out on the street, in the rain with only a crust of bread in her pocket.
Greenhead,
Do you really think individuals stand a chance in this corrupt and manipulated market? At least the large DB plans can pool assets, negotiate fees lower and manage assets for the long-run. I am all for personal responsibility and tell everyone who incurs large debts that they're flirting with disaster. But this retirement crisis is much more profound than you can possibly realize. Leaving old people suck on salt crackers is not my idea of social justice.
Compassion trap is how corporate government steals working stiffs blind...
Savor the soda crackers, old folks! Thats all youre retiring on.
"Savor the soda crackers, old folks! Thats all youre retiring on."
What a wonderful society when we let the old, sick, and disabled rot in hell. I love reading these comments, shows me how twisted your social values are.
"I'll gladly pay you Tuesday for a hamburger today." - J. Wellington Wimpy
Are people incapable of learning from past examples? Let the politicians and their minions in the specified agencies and/or bureaucracies decide which shares to invest in and it won't be long until they base those decisions on political favoritism, not objective market analysis. Would money go into shares of cigarette companies no matter how well they perform? Or companies manufacturing in third world countries who don't pay a "living wage."? What about choosing between two companies in the same sector, but one is green and the other isn't? Don't think there won't be corporate lobbyist vying to direct where that investment money will go? Don't kid yourself.
Political institutions will ultimately make decisions based on political expediency and poltical pressure. If you don't acknowledge this and deal with it in your proposal, you don't know enough to make such proposals.
Precisely! I don't understand why so many people, to this day, are still not clear about a simple notion:
If government is involved in planning for your retirment...then GOVERNMENT IS INVOLVED IN PLANNING FOR YOUR RETIREMENT.
How can anyone read that statement and conclude: 'Sounds awesome, where do I sign up? Oh, I'm already automatically signed-up? Suh-weet!'
So last year my wife and I recieved approx. $32,000 in SS but had to sustain our unemployed son-in-law to the tune of $36,000. In addition to being unempoyed he was in deep debt. We, meaning my generation did not teach children to accumulate unsustainable debt. Its a generational problem of living beyond your means spurred by the media, retailers and above all our politicians. This is the reason SS is broke as is the entire nation. We have to change our ways and it will be painful.
I'm 19, so coming from the younger generation....I want to opt out, I would rather opt out of ALL benefits because I will never use them..I save my own money my parents wiped my ass so when they get old I'll wipe theirs, to bad older generation take what you put in no more of this robbing the younger generation because we aren't going to pay it. Raise your kids right save some money and they will take care of you. abandon your kids don't teach them what they need to know and suffer at your own whims. I'm sick of these politicians using the older generation AND the younger generation as an excuse to rob both blind...how about we grow up , start saving and handle our financial affairs like adults and save 10% of our wages...ourselves....oh well won't matter anyway in the next couple years we all get fist fulls of cash....I realize that half my arguement is kind of flawed in this subversive predatory economy for various reasons ,but I just got pissed for a second..it would be plausible to fix the problems if we got rid of the central bank and fractional reserve banking and had competeing currencies then the arguements would matter anything before that is just putting fuel on the fire.
Nothing to worry about. The Guv is enabling the continued poisoning of us all via air, food, water, legalized drugs, cell towers, Entertainment Tonight, etc, etc. And the elderly are sure to fall prey en mass.
Larry Kotlikoff is on Bloomberg speaking of this topic now. You should have video soon.
I have a plan to close the entitlement funding gap. I just love those laser disco balls!
http://www.youtube.com/watch?v=xSnLU9nyFSA
The banks engineered the financial crisis just so they could get their hands on the SSTF? What planet are you from? The boys at Lehman, Bear and Citi cooked this up so they could force a privitized SS. Just silly.
There is no way. Repeat, no way that SS is going to privatized accounts in the next five years. Take that off the table Leo. You just wish it would happen so it would support your solar stock portfolio. The lessons of 08-09 prove that a retirment account based on stocks is an accident waiting to happen.
How old are your Leo? Take your age subtract it from 100. That is the % you should have in stocks. Anymore any you are overinvested and should sell. If that rule were applied to all retiement driven investments it would result in massive selling. We are already way too long stocks.
Are you over-invested in common stocks Leo? I bet you are....
bk
Bruce,
Take a breather, you have no idea what I am invested in and how I trade these markets (solar is just an important part of my long-term portfolio). As far as conspiracy theories, financial power is more concentrated post-crisis, not less concentrated. You may be right on SSTF, but that all depends on what happens in the markets in the next few years. Never say never.
Yea, say never. And after the next 2 or 3 general elections in the US, believe never. Pissed is the general concensus. And it's growing rapidly.
Stick to Canadian politicts. It suits you.
Pissed but you keep electing these fools who pander to the financial oligarchs. It's the same everywhere. The whole world is pissed but they suck it up because they have no choice.
That is what I figured you would respond with: Defeatism.
Maybe if more people would vote and pay attention to what is going on? That's "wishful thinking" now isn't it.
The alternatives are too horrifying for most people that can think for themselves to imagine? I stand ready to be a Patriot when the time comes.
And what are you going to do? Join some militia group in Michigan to express your patriotism? C'mon, get serious, and listen carefully to George Carlin below.
Yea, let's get serious. First of all you are Canadian are you not? Yes? If you want to, apply for citizenship and vote in our elections. Otherwise, your opinion of US domestic affairs has a diminished impact.
I do not take any of the militias seriously. In fact I am quite suspicious of their support base and motives. I have seen George many times over the years and I have all his videos and recordings. I happen to believe what he was saying. So tell me something I don't already know. I believe in the USA and it's people. Not in it's government and corporations.
Nice bike you are posing with in your picture. Do you do any racing?
Yes, I am Canadian and very concerned with what is going on down south. I foolishly thought President Obama was going to deliver "change we can believe in". Fat chance, with an economic team that has a track record of pandering to Wall Street every chance they get, it simply isn't going to happen. And now they're talking about President Palin in 2012. God help us all.
Glad to hear your suspiscious of militias and have all of George Carlin's videos. Bike is not mine, it's my brother-in-law's, and I don't get on it without my crash helmet! -:)
Many believed the Obama lie. After 8 years of Bush, Patriot Act, Homeland Security, more wars, they knew we were ripe for an even greater fiction.
Palin 2012! I'm looking at property in Ecuador in October.
It's very difficult to save for the future because you have no idea how much the value of what you save will be inflated away. The dollar you save when you're 22 will be worth squat when you're 70. This endless, mindless inflation treadmill is the monster that makes planing impossible and forces everyone into the casino. The dollar is simply not a long term store of value. Money has to be fixed to something - if gold is their fear or enemy then fix the value to federal land - say $1000.- per acre or the future tax revenue of each and every person in the nation - pick $100,000.- anything to restrain pure printing and the destruction of the hopes and dreams of the future.
exportbank
Great Post !!
This endless, mindless inflation treadmill is the monster that makes planing impossible and forces everyone into the casino.
And we all know how casinos make their money...
+1
Compound interest at 4 or 5% with a hard currency that you know what the future value will be is the only way to "save" for retirement.
Everything else is a Ponzi scheme.
What good is $1400/mo in SS when a loaf of bread is $30?
People are foolish if they count on the government for a comfortable retirement. Government should do what they are supposed to do like offer services for the poor.
The current state run pension funds pay way to much to Wall Street via Funds of funds, Hedgies and sell side pirates. Calpers has proved this.
Chile has a good model where people are required to pay a % into a fund that they own. They can then pick to invest from a basket of blue chip and goverment securities. These could be run like index funds at relatively low costs to consumers. Of course you have to pay the market takers, I mean makers.
Government should do what they are supposed to do like offer services for the poor.
Where exactly in our Constitution does it say that?
The General Welfare is achieved by protecting property rights.
Thought charity was the job of good neighbors and Bible Church...
Leo, is that really you or do we have a Kolivakis wanna be? Glad to see you are starting to stop paddleing against the current and are finally starting to enjoy the scenery during your float.
"Social Security’s objective -- forcing people to save for retirement-is legit."
Utter horse shit. Highlights everything wrong with ebubblegnomists and the f'tards who run the university bucket shops. Oh and the arrogance of the so called elite.
It is NOT legitimate. Therefore any further discussion is completely moot.
+1 Trillion...with extra sauce.
Never dawns on these arrogant vermin that using government FORCE to achieve a desired result is NEVER legitimate. There is already a word for this retarded vision of utopia:
TYRANNY.
My mother is 70, a widow, and payed into the system her entire life. How can we transition out of this system without throwing her and others like her into the street?
And what will happen to her and others like her when the social security checks show up but are worthless?
That's the path we are on -- congress has chosen this path, by default or design, pick one.
Picture a ten times drop in the dollar/increase in prices. Gas is $18/gal, bread is $26/loaf, rent is, perhaps $5k/month (or perhaps since it's not in compentition with imports it's much lower).
After this wages might be pretty similar here and in China (if wages don't increase in measure)...
And the SS CPI adjustment will undercorrect for this, say 5x at best (and lagged, so the adjustment happens a year later from the price increases). How will those on SS do?
This path isn't new, it's the one we've been on all the time, it's
just more obvious now. Short term "fixes" eventually lead to long term problems. Long term is now.
The government doesn't care.
If there is a choice (possibly there isn't), it's to end SS and related government mucking sooner vs later. Later things will be worse and will cause even more suffering. A working currency/economy is worth something. So end government mucking and SS now while the currency is working or wait and have the currency /government fail too (and it will end SS).
PS: SS was created to grab the money. The idea of helping people was the cover story. The money's been grabbed, it's gone. Now all that's left is to redefine the story...
Your mom has it easy,she is closer to death than many.She should be thankful for living in the times that she did,and she should pity her grandchildren for the shitty life they are going to live.
+1
Pensions are doomed.
Whether your pension is defined benefit, defined contribution, or a SS style pass through makes no difference; they are all at their root built upon the earning power of the succeeding generations. All of those pieces of paper in all of those pension plans are just chits; claims on a part of your children's and grandchildren's earnings. When those workers are not doing well, then the retirees are not going to do well.
Since much of the developed world is in a demographic swoon these plans are already running uphill. Add in the hollowing effects of globalism and you've got a formula for collapse. After all, these generous Western-style pensions were designed based on first world salaries earned in first world nations -- and since the purpose of globalism is to eliminate the first world... well, the money is simply not going to be there.
If we are to restore these pension systems we must restore the society that originated and supported them. Restore the worker/retiree ratios of the past: more children is the way to do that (immigration is no substitute as it is more likely to increase the underclass than increase the middle/upper earners... at least for two or three generations). Restore well-paying jobs: bring the wealth generation back home rather than chase stock earnings around the globe. Restore the government/citizen social contract of the late 40's - early 60's: it actually functioned, unlike today's parasitic government-as-overlords regime of maximum benefit extraction.
In short, a healthy retirement depends upon a healthy work force. Until widespread private sector prosperity returns we're all just pissing into the wind.
Close. Actually (actuarily), SS never functioned financially. Ponzi from day one. It just had a longer lead time than most Ponzi schemes, owing to the U.S. government's ability to enforce the theft. I knew by 1982 that my payments were going to be more than my net present value of future payouts; this hasn't changed in 28 years for me, and has obviously gotten worse for the youngsters. Because we have had significant net immigration for the last 50 years, the U.S. will hold out 3-8 years longer than Europe. Because of higher birth rates, perhaps another 10 years. Japan is going to hit bottom awfully fast once the Chinese figure out that the yen, medium-term, is way overpriced.
Solutions? Raise normal retirement to 72, quickly. Freeze, or nearly freeze, current cash payments to current retirees. Raise Medicare age, also to 72, quickly. Go competitive in a way that encourages people to live in a low-cost area (e.g. x bucks per month towards Medicare premium, with negotiated balance billing), or turn it all over to Medicare Advantage type plans. High teens rate of taxes will be enough to cover both SS and retiree medical benefits if all this is done.
Something like this will happen. Faster it's done, the less long-term pain. Of course, political decisions usually made with short-term gain, and damn the long-term consequences.
This will increase birth rates, with a 5-20 year lag. Until then, legal immigration at a higher rate and shorter wait time (real tough sell in 2010, not easier 2011-2013).
Big risk for countries with appropriate policies (e.g. Germany) is domino effect due to cross-holding and effect on trade as other sovereigns default.
Even if you DOUBLED immigration rates, it would only increase the working age population by one percent of total pop. You can't support stupid safety nets that require an ever increasing population pyramid on a finite planet.
http://www.cis.org/AgingImmigrants-BirthRate-SocialSecurity
No you fucking moron! Population growth is the ultimate Ponzi scheme, since it requires more and more young people at the base of the pyramid to keep the every-growing population at the top of the pyramid living in style.
All developed nations must end immigration from countries that have birthrates above the replacement level and must work to dramatically lower birthrates worldwide. Otherwise the Ponzi scheme continues and just gets worse and worse (because it creates more and more people that will need to retire someday), while the earth's environment gets more destroyed and less able to support life until a total collapse happens. Retirement isn't a big issue. People can move in with their children (or the state can provide a modest apartment); they will get fed and will have a roof over their heads. This is how it was in the old days.
You're missing an important point.
You tell everyone, you must have fewer children. We can't all screw like rabbits, we must stop or we all come to ruin.
Not sure you realize what you're demanding of others. Someone else is going to grasp your foolishness immediately and realize that there is a third option - kill everyone else, then do as they please. You most likely overlook this because you're living in a world with padded corners.
The fact that some people think this is wrong is completely irrelevant. What is right, what is practical, and what people choose to do are sometimes 3 different things. You're presuming to tell others what to do on the premise that there are too many people; but you can't convince others to fall on their swords. Either you do it yourself, or do it to them.
Providing people with a "modest apartment" is not going to work. Vast numbers of people will die at that point, if not before. People don't want "modest", they want "their" money that they feel they're entitled to.
And others, conversely, don't feel obligated to give them a damn thing.
So then what happens a few decades down the road once Oil extraction has peaked, natural gas extraction has peaked, and even coal extraction has peaked?
Raise normal retirement to 72, quickly. Freeze, or nearly freeze, current cash payments to current retirees. Raise Medicare age, also to 72, quickly. Peak everything and now its downhill...
ie the Soylent Green Solutions.
http://www.youtube.com/watch?v=8Sp-VFBbjpE 0:18
All the Club of Rome Limits to Growth population control solutions are Nazi Bilderberger Animal Farm Brave New World 1984 dressed in the Emperor's New Clothes.
Why not let people keep the fruits of their own labour instead of promising free lunch?
Now there's a Revolutionary idea not tried for generations...
+1 thoughtful post.
Forcing people to give8% of their money to the government for "safe keeping" because the government doesn't think we will do it for ourselves is a " good idea." that way we don't ask for handouts.
What kind of bullshit is this guy talki about.
Social Security doesn't cover shit for expenses- people need handouts anyway as the system devalues the dollar.
social security was a good idea for the government to access money supply and restrict personal savings so it could blow the world to bits in WW2 and stimulate the velocity of money. Saying the the government will take today's dollars and return them to you totally devalued in the future is basically a general payroll TAX on savings.
If you run a real retirement system, you have to ask fora helluva lot more and people get access to healthcare no questions asked. The US system is a total piece of shit because it:
- steals money in a ponzi scheme
- it's concept of living stipend is nonsense
- it takes one health emergency to wipe out your personal savings unlike other countries.
- the payouts to the current receivers are draining the " accounting"
- the stupid government has borrowed off of current and future social security revenues to cover their budget holes like 2x over.
Giving the US government any money for safekeeping is a FAIL from the outset.
8% isn't nearly enough to fund retirement, let alone retirement medical. Ask any large pension plan. High teens: necessary and sufficient. Already paying that in SS/Medicare alone, before any corporate/PERS costs/benefits kick in.
Two issues: soundness going forward, and retiring the current debt. One is doable; two is politically extremely difficult. In order to get sound going forward, money safekeeping has to be done privately, otherwise we eventually repeat 1935-2020 (SS) and 1965-2020 (medicare).
I don't see any feasible way to retire the current $16 trillion SS and similar Medicare deficiency. Plus, I think the number is understated. More like $75 trillion for the two, and another $4 trillion for state-level deficiencies. Plus another $2 trillion for municipal employees, and corporate/private sector union deficiencies of a magnitude around another $2 trillion. Too much. Would take cutting of current and future promises by at least 60%, or raising retirement taxes from high teens (fair) to around 40% (assessment spiral), or any combination of the two. Think we're within 10-15% of maximum collectible - doubt can go over 20% without hitting Laffer curve.
Replace all taxes with Constitutional Uniform 28 basis point APTT, freeze money supply and government spending, and watch the productive economy grow and debts disappear...
http://www.apttax.com/
A 'freeze' on benefits for existing or almost-retirees is ridiculous. Their benefits must be rolled back as well to something more closely resembling what they paid in.
The 'young' are sick and tired of these schemes which seek to reduce their benefits, while entrenching the benefits of the people who are already collecting, or are about to retire.
The same nonsense permeates government negotiations with unions, whereby, existing union members get to keep their benefits, while the 'new hires' receive little or no benefits. Again, these schemes are doomed to collapse.
What ever happened to the concept of fairness? Seniors on Social Security today are literally living it up, basking in their enormous monthly cheques (which aren't even being adjusted for hyperdeflation), with paid off homes, while most everyone under 40 in the United States today are bankrupt.
O yeah, social security cheques are enormous and (disabled homeless) seniors are literally living it up!;
You voted for the government union Representatives and their forced retirement schemes as they spent your money on themselves.
Politics of envy, the ultimate argument for cannibalism and infanticide...
Get really pissed.
Move in with your children.
Be bitter and resentful for the rest of your life.
What's that flower you have on? I am woman hear me roar....lol