that the SS program can be stabilized without significant and prompt
action to address the underlying imbalances. Failure to deal with the
problem in a timely way will result in a systemic problem for the US
economy in less than ten years.
While there are a number of proposals to address the imbalances, there
really are only two possible out comes. Either the 60-70% of the baby
boomer population who are highly dependent of SS are going to have the
benefits cuts, or younger workers are going to have to dig into their
pocket to pay for the Boomers for the next 30 years.
Bottom line; either a significant portion of seniors are going to be eating cat food, or the next few generations are going to be paying (unfairly) through the nose.
I have not written one of these critical pieces without getting a bunch
of complaints from the big guns who support SS (as it is) and maintain
that what I am saying is just bunk. They are wrong, I’ve been right all along.
Charles Blahous, the Public Trustee for the SS Trust Fund gave testimony (Link) to the House Ways and Means Committee on Friday. I think he laid it on the line rather nicely.
The 2011 Trustees’ report is the first in which Public Trustees have ever participated to have concluded that an era of permanent annual deficits has been reached.
This is important. It’s all you need to know. SS has turned a corner. It
is headed south. It will continue to head south as far as the broader
economy is concerned for the next 75 years (actually SS is in perpetual deficit).
Social
Security expenditures exceeded the program’s non-interest income in 2010
for the first time since 1983. This deficit stood at $49 billion last
year and is projected to be $46 billion in 2011.
These are not small numbers. The $100b shortfall in 2010-11 is a fairly
big burden given that the rest of the government’s finances are in such a
hole. Blahous said something that may have been a “tell” as to what we are looking at in the future with these deficits:
This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.
Blahous is not following the SS “script” with this comment. These are the projected deficits based on the SSTF annual report:
Note that the “projected” annual deficits remain fairly small all the
way out to 2018. So what is Blahous referring to regarding big deficits
post 2014? SS provides an alternate forecast that they call the
“High-Cost” analysis. This chart looks at the two forecasts together.
For Blahous to suggest to Congress that the deficits will be “growing rapidly”
post 2014 represents (to me) that the real thinking inside of SS is
that the actual results will be closer to the worst case scenario.
Should that be the result, the cumulative deficit at SS from 2011
through 2020 will be a very lumpy $900 billion.
My own review of the numbers says that we have little chance of achieving even the results of the high cost analysis. It is likely to be much worse than that.
The problem is that the economy is simply not producing enough jobs.
There are fewer workers contributing to the system. The SSTF is
anticipating “a strengthening economy”, I see no evidence of this today
and have no expectation for a turnaround in the jobs picture any time
over (at least) the next five years. The following graph says it all on
payrolls in America. The recession killed us. As of today the number of
workers contributing to SS is less than it was in 2000. Look at this at
you will understand the problem.
I think that Blahous made some important comments. One’s that will shut up the defenders of SS. The argument that those defenders repeatedly use is that SS does not impact the current deficit. That is flat out wrong:
Social
Security operations are currently adding to the unified federal deficit
and will add substantially more in the years to come.
The facts folks. SS is adding to the annual budget deficit ($116b in
2011). It is adding to our funding deficit (the amount we need to borrow
from the Public). That number was a manageable $49b in 2010 but it will
grow every year from now on. In less than a decade it will become
unmanageable.
Blahous spoke about the “Assets” of the SSTF. The believers in SS constantly point to the huge $2.6T surplus at SS and say: “There is plenty of money in the piggy bank. There is no need to mess with SS today”. That is not the case at all.
If we look at the bonds from the perspective of the Trust Funds, they are assets. If we look at them from the perspective of the unified federal budget, they are a net wash, as are the interest payments that they receive.
Folks, there are no Assets in the Trust Fund. There are pieces of paper
to be sure. But they are just pieces of paper. The merely represent
claims on future taxpayers.
The following words are, I think, critical to the debate on SS:
The costs that will be borne by younger generations will grow significantly each year that a new cohort of baby boomers joins the benefit rolls.
I am screaming at the top of my lungs, “How can we let this happen?”
To me, it is absolutely insane to think that the Baby Boomers (I’m one) can put the burden of SS on younger workers. This simply will not work.
The result of a policy approach that sticks everyone under 50 with the
cost of the Boomers is going to result in deep social divides. We have
enough problems in our society today. We don’t need/want Age Warfare to be added to the list. But if the plan to “fix” SS is one that sticks the bill onto young people we WILL have age warfare, it’s inevitable. The social consequences would be greater than the economic costs. Why does no one see this?
Addressing the imbalances at SS will be painful, and no one likes pain.
So the result has been that our political leaders just kick this can
down the road. I don’t think that there will be any fixes at SS until
after 2012. While an extra two years will not result in a crisis, it
will result in a higher cost of the necessary fixes. I hope all the
defenders of SS read what Blahous has said on this:
Elected officials will best serve the interests of the public if financial corrections are enacted at the earliest practicable time.
Earlier action will also afford elected officials with a greater
opportunity to minimize adverse impacts on vulnerable populations, including lower- income workers and those who are already substantially dependent on program benefits.
The big defenders of SS call themselves Liberals. Paul Krugman and Dean Baker are on top of the list. But there is nothing liberal about their position. Who is going to be most hurt by what is coming (absent changes)? The answer is clear. Older people who are 100% dependent on SS and younger workers who are on the bottom of the income scale.
The Liberals have to come to understand their dilemma. The more they put
their foot down and demand no changes to SS, the worse off will be
those that they are actually trying to help. The liberals are shooting their own constituency.
Note: On these matters I consider myself a liberal. But I
come to a completely different conclusions than those who actually call
themselves Liberals.
My position on this complicated issue:
-We can’t cut benefits across the board. Too many people would be eating cat food. That’s not American.
-We can’t put the burden of the Boomers on younger workers. It’s simply not fair. That’s not the American way either.
-The solution(s) have to be born (largely) by the Baby Boomers
themselves. Post the Boomers, SS can be a PayGo concept. But the
transition is not PayGo. It is a huge inter-generational transfer of wealth. This means that well off Boomers (there are many, including myself)
are going to have to dig into their pockets to support those in their
age group who did not fair so well. That, in my opinion, is the only
viable solution. That would be more representative of the American way. Fairness.
This issue will resolve itself in one of two ways. Rather than cut entitlements, which is what the GOP wants, they will shift the burden of these other than retiree benefits back to the states. The states determine the level of benefits, as care in some poor states is a lot less than NYC, including cost of living, etc. The other solution involves a massive deflationary readjustment, which won't hurt retiree benefits nearly as much as it trims these bloated entitlements, and forcef their cost down relative to retirees. Massive deflation actually helps the poorest members of society, (if inflation is a thief, then deflation puts a little back).
This populist shell game first started with Reagan, who complained about welfare queens in Cadillacs. At the same time he ran up the deficit making defense contracts rich, and staring the end process. We scream at the poor guy who gets $1000 month, and we fail to notice that we are using SSN to fund a lot of other things. SSI (disability) is the litmus test for a whole range of benefits, like food stamps.
As long as states are able to raise revenue through sales tax they should share a greater part of the burden. There is no recession currently in municipal government. The only cavert to that is malinvestment, such as Jefferson County, but who gave these people so much money in the first place? I see local government sharing the load more equally.
It was DOA when it was "saved" in the 1980's as a shining example of Bob Dole's leadership and stellar bi-partisanship. It has been a zombie ever since. Time to drive a stake in its heart and cut if off for everyone below 55 and deal with cleaning up the mess called the Boomers.
the ad at the top of the page had, "free government phone, 250 minutes a month", then a picture of an hispanic woman and child.
what irony
For Xen:
http://www.youtube.com/watch?v=6RVDQgVxprE
The wealth redistribution to the Military Industrial Complex, the Corporate Elites and their Manchurian Candidate Chimp Congressmen will continue until the Middle Class is left,lying dead in the gutter to bleed out.
'Suicide cult driving US econ. to abyss'http://www.presstv.ir/detail/182977.html
(What's so Funny 'Bout) Peace, Love and Understanding?
Well...now we know. It's pick 2 of 3, else we grow broke.
(And who are the strong, and where are the trusted, etc etc?)
"The liberals are shooting their own constituency. "
Bruce, you say that like it's a bad thing...
FAIR!!??
My response got triplicated but I'll let the other duplication stand as Krapping's proposal is so ludicrous it deserves it.
FAIR!!??
How is it fair that someone who saved and perhaps even lived frugally will have to pay for the retirements of spendthrifts who blew their money on expensive vacations and big-screen tv's?
Or, what's fair about paying (via taxes) other peoples' income (welfare) your whole life only to find in retirement their probiscises get rammed up your arse and are still sucking you dry?
FAIR!!??
How is it fair that someone who saved and perhaps even lived frugally will have to pay for the retirements of spendthrifts who blew their money on expensive vacations and big-screen tv's?
Or, what's fair about paying (via taxes) other peoples' income (welfare) your whole life only to find in retirement their probiscises get rammed up your arse and are still sucking you dry?
or! even worse! what about those people who work and save and have money but the FED prints it away and as well sets an interest rate at close to 0-fucking-%!!!
something seems to be missing in this discussion. that is : whose pockets do these dollars that get disbursed from SS/Medis eventually end up? (remember: the "recipients" are just mechanisms of currency flow.) could it be : pharmaceutical companies for overpriced legal drugs, insurance companies for inflated premiums, and hospitals & medical professionals for expensive useless tests that are taken solely so that these said hospitals & medical "professionals" can skirt legal liability?
this is what happens when a society fears death and abdicates its responsibility to the elderly to a central authority : slow rot from the inside out.
disgusting but hey, shit happens, right?. don't forget to buy your Depends. me, i'm long humanure w/ triple leverage.
presumably a diet high in cat food and low in nutritional value will shorten life expectancy. The savings to Social Security and Medicare from a decrease in lifespan amongst the agencies clientele should actually solve the problem shouldn't it?
I have kitties. The high-end cat foods look to me to be hecka lot more nutritious and better quality-controlled than the stuff manufactured for our fellow citizens' consumption.
Just for hoots, take a look inside a can of Fancy Feast and compare it to what you see inside a can of chunk light tuna.
(I can't make any claims as to taste. Yet.)
http://www.valuepetsupplies.com/waggin-train.html?dir=desc&order=bestsellers&_kk=249244ff-b73b-464d-b8af-b19460fa5f74&_kt=6684948994&gclid=CJyEg_yvn6kCFRFU7AodIV5Hwg
the sweet potato wrapped in duck.. they like.. as well.. the costco chicken that people complain about I have had no issues with. I dnt know if its a different brand.. as well the Morton's Steak's the Dogs like as well! LOL!
...
40oz of duck jerky for $28.00?
40 OUNCES?!?
Tip for dog owners: buy Boar's Head roast beef at the deli instead. The dogs will like it just fine, and it'll save you about $2/lb. If you don't mind cooking for your dogs, a prime sirloin is pretty good and a bit cheaper, too.
(The world is an amazing place.)
the sweet potato duck wrapped treats are highway robbery! http://reviews.petsmart.com/4830/3681657/beefeaters-beefeaters-sweet-potato-snacks-for-dogs-reviews/reviews.htm
the costco stuff is not so bad.. but truth be told they eat what i eat as a rule.. they eat skinless chicken.. beucase I love the skin.. I eat the fatty parts of the steak they get the lean middle.. LOL! LOVE!! my babies! one is kind of a rescue becuase he is outside of the bred standard for color and the other I saved off the street as a puppy!
The well off baby boomers will leave the country.
The less fortunate and mostly middle class boomers will be killed off by denial of medical care or bankrupted by trying to get medical care (i.e. - transfer of taxed entitlements reduced and/or denied to individual households).
Illegal immigration will increase and those who never paid in at the lowest end will be given meager benefits to buy votes.
This is already occuring, the only change in the future will be increased taxation, reduction of payouts, no or ridiculously low COLA increases, increased age reqs., etc.
SS is a joke, a political slush fund, a carrot dangled in front of generations, the broken promise of the broken dream of America.
the broken promise of the broken dream of America.
well written, you're a poet and don't even know it.
of course, this has all happened before. for a nice little historical wake up call, read "What Destroyed Rome" here:
http://www.martinarmstrong.org/economic_projections.htm
Thank you.
I Had not read that one, good stuff.
Have you seen this one?
"ON THE CONTINUOUS DEVALUATION OF THE ROMAN CURRENCY"
http://www.rmki.kfki.hu/~lukacs/ROMLAS.htm
(Interesting discussion of inflation too)
cool stuff thanks...i like the whole economic thermodynamics angle.
it seems as if every third person i meet between 35 and 65 is on social security disability. maybe 1 in 10 are really disabled.
get rid of that out of control honey pot and social security will be on much stronger footing
people disabled due to their nerves, i.e. they are long term drug abusers.
I would not let you or anyone else starve on my watch Fred..
give your money away then. Not mine.
so you want to starve your own kind then and its not me?
right? thats what you said mr. conservative.. right. I mean you can say it nice or you can calla cat a cat.. fuck the other guy he should have worked harder or saved more.. you did! and you shouldnt have to pay for someone else, you dont expect them to pay for you, right!
See Fred I look at it from another perspective..
some people dont pay their fair share, some dont pay anything at all or very little.. those people should pay their fair share.. you dont pay more and you would maybe even get more.. if everyone would just pay the same amount.
Do you like loop holes? do you like people who earn 100's of billions paying nothing?
well the Fred you need to worry about everyone being treated exactly the same. I dont think that I should be treated any different than anyone else! everyone should be treated equaly.
I dont want your fellow old people to starve Fred, even though you think its ok.
I am a Liberal.. I am so Liberal that I would like to inflict my will upon the world.. everyone in this country pays the exact same. Liberal Thinking at its best, although the Librarians will be along any minute to try it claim it for their own.
When did you first hear about credit default swaps and mortgage back securities and what did yo do about it? Can the future young people blame you? It looks to me like they will. Be prepared. It's all you fault.
The government took more money from me for SS than you. Taxes too. They took 70 thousand dollars last year. And I voted for the change asshole president that didn't change anything.
Fred.. you ignored everything I said.. try reading it buddy.
And now I find out I let the bankers fuck the world. All from my living room. Don't underestimate a 54 year old man minding his own business. And karma is coming after me! Isn't all of us? I think I can handle it better than you sonny. And I don't have any children. And fuck you too.
you let them do it!
its your money!
it was your vote!
and the concensus here is let the old people starve! Social Security is Bad! we can Not afford it!
Ya see Fred.. I am a Liberal.. and a Progressive Liberal.. so I dont want old people to starve.. even if they did vote themselves down the river..
But! BUT!! the wanna be conservtives here can say it however they want! but what they are really saying is.. let the old fuckers starve!
I would not let you or anyone else starve on my watch Fred.. I am not built that way.. but my paraphrasing to draw attention to what it really means to leave these people out in the cold is needed.. becuase people like Bruce would make it sound o so sweet!
or the others.. with their "resposibility" bullshit!
We are the richest Country in the World.. but becuase we spend all our money on AAA rated Bankers.. on Wars.. and thats all we will print for.. our People should suffer? NO! Not on my fucking watch Fred.. so forgive my rubbin their noses in what they really are saying..
no matter how politely someone says it.. they want people, American Citizens to go without! so that the Banker Class can have more.. AGAIN! and thats bullshit Fred! not on my watch!
so.. pay attention to the ball Fred.. till a few seconds ago I was the bad guy.. but am I really? I say what they mean.. the end result of their dreams come true is to make Americans suffer! so that a very few American can have another pile of money offshore that they dont pay taxes on.
see?
The Moral of this is!
Karma Rules!! if you fuck the world up! then when the kids grow up and see that YOU! fucked it up! the kids will want you to suffer for your bad behavior! take responsibility for your actions!
you old fuckers (Boomers) need to be shot! for you peace, love and hippy bullshit! becuase you fuckers let the bankers fuck the world over!
so! take resposibility for what you allowed to go on! becuase they were polite! such polite bankers! while they molested your childrens future! you did NOTHING! shitty people, shitty parents and shitty human beings to let this go on and On and ON! un-checked!
Fuck ALL of you old fucks! may you starve to death for what you have brought upon the World!
Almost well said g speed. I think you have an important point that didn't quite get out. I want to hear the next one.
I was 8 years old when the war on poverty came out and of course it is all my fault. I am just waiting for young men who don't know how to wear pants to tell me so on a blog to make it official.
It's not your fault Fred. But I think your (my) generation has to take some responsibility for where this issue stands. As many have pointed out, Medicare is in much worse shape than SS. Those are both boomer problems.
I feel like our generation is 'littering'. We are leaving a mess that all can see and we think others should pick it up.
We are not entitled to do that. If that is the boomer legacy it will be a sad commentary on us.
With all my years as Congressman and Senator I should have done better except I had a real job instead of those. As for Medicare there is some good news. I will be living outside of the USA. I have a thing about freedom, I'm funny that way. I don't want to be in the USA where I don't have it. So US taxpayers won't be paying my medicare. I'm just hoping all the do gooders don't steal my social security.
Benefits need to be reduced (which can be done in phased fashion to prevent bedlam), people need to pony up more (remove SS contrib cap, bump rates), and means-testing would help too.
It's not nearly the basket-case that Medicare is.
Its not fair to put it on the youts-- blah blah--- I got news for yous-- its on the younger gen. its called big govt-- you all know the drill-- destroy the base that the middle was built on--destroy the middle-- the divide between top and bottom gets bigger. People forget Long Shanks-- but he is here and doing his damage still.
SS is just a small part of the plan to replace the family with govt-- like the war on poverty( Linden Johnson) -- All the sickies have been at it forever-- destroy the family -- make the subjects dependants-- legitimize debt to the crown and divest the populace--
All the turns and twists of the aurgument does't change what is.
This is neither socialism nor libralism - this is fraud on the people by the elite. Wherever you look it's the same story, by the same people and for some strange reason we keep giving this BS the oxygen of publicity.
If this is what people are calling socialism or libralism then they've got their terms mixed up. Why not tell it as it is - an enormour theft, a huge transfer of wealth from the poor to the rich.
you can not tell the truth!
you have to engage these ignorant fucks on their level!
if you dont engage them on their level you will not reach them!
if you dont reach them then they stay ignorant.
if they stay ignorant we are all going to continue to be fucked.
but other than that you are spot fucking on! Preach it!! Brother!!! Preach it!!
Echoing some of the comments above, the SS deficits look laughingly small compared to the trillions that were heaped on Wall Street with nary a whimper from the CONgress criters. Tax the super-rich and this problem goes away - no need to burden the youth. No sympathy for our higher bracket brethren who benefitted mightily from the past 3 years of programs designed to ensure a comfortable retirement for the superrich in our country (and foreign countries, for that matter.)
Actually, the Medicaid, Medicare portion of the Social Security System is the easies fix of them all.
Medi-Medi will now only pay the lowest non-zero cost that a company or individual has billed ANY individual for a product or procedure sold or performed anywhere on the planet. (Non-Zero cost so that charity work is not affected)
So Glaxo-Smith-Kline sells drug X in Cuba at $0.05 per dose, it can no longer charge Medi-Medi $50.00 per dose for it.
Blue Cross has a deal with hospital X to get treatment Y done for $250.00, Medi-Medi also pays $250.00 for it, and not $5,000.00.
But, Cedar Sinai treats a kids cancer for free - No change in the amount they can bill Medi-Medi.
Doctors, Hospitals, and Corps can either accept it, or lose access to ALL government grants, funding, and contracts. (Which would include research performed in public or private setting, paid for with grants or other government funding being able to be marketed or sold by said doctors, hospitals, or corps.)
Social Security is a little harder, but not much, remove the cap, have it also apply to Cap Gains and Dividends earned outside of a qualified IRS plan (401k, 457, IRA, Edu IRA, etc) and have absolutely EVERYONE pay into it (With elected or appointed government officials paying double). Congress, Cops, Firefighters, Teachers, Librarians, EVERYONE. (Yes, this includes me, who is a County Government worker). Finally, so that the Upper Middle Class arent totally fucked by this change (Just mostly fucked), for each quarter that a person is paying in more than the previous cap they get a 1% increase in their final benefits. (Oh and make half the cost of it a Tax Credit for Self Employed individuals who are paying both the employer and employee portion for the same individual).
Classic gov't policy meltdown. I never expected anything from SS because it has been bankrupt since... well forever and a half.
I don't suppose we are going to pull back on any of our newer imperialist ventures hmmmm? Sure we could pay for expansive SS, Medicare, Medicaid and education and actually build a future for ourselves, but our masters have an Empire to build be'fer the Chi-Com's take us out. Cutting the defense (offense?) budget is tantamount to treason in this country. We can't have Ga-Daffy sellin' oil in gold dinars. BOOM BOOM BOOM! USA, USA, USA!
Bitchez.
But there will be a time you apply for SS benefits. You will expect something for the money that they have taken from you everyday of you life. Don't think so? You will when you are 66. Unless the Bruce do gooders of the world decide you have too much. You may have more in common with Warren Buffett then you thought.
If you are a well-off baby-boomer, I'd suggest leaving the country, sooner than later. Become a citizen of a country with a friendly tax regime, and renounce your US citizenship. Sure, there will likely be some kind of exit tax, but what is that compared to your future freedom from a confiscatory government? Me? I'm just a worker bee who relocated to Germany. Was it a good idea? We'll see. Sorta depends on how long it takes Germany to get out of the EMU, and if doing so means that they can lower taxes. If not, well, Switzerland is just over the border. All I need is that pesky half million Swiss Francs.
You need another passport to renounce your US citizenship and they are not easy to get. If you have buy one it will be a minimum of 100,000 USD. There was a thread here not long ago on the subject. I am hoping to see some third world governments selling citizenships soon. I will be buying. And as info, you can still collect SS even if you give up your US citizenship. That is the law as of now.
True, the Swiss would not give you citizenship. But I will qualify for German citizenship in a few years the normal way. Hopefully enough time for things to clarify themselves.
We can’t put the burden of the Boomers on younger workers. It’s simply not fair.
Took me ahile to figure out what bugged me about this article, but I've got it now.
The problem is NOT that it's "not fair." I mean, sure, we can all whine and cry and such, but what has ever been fair?
I think the problem is that the younger workers *literally* cannot afford to pay for the boomers' standard of living.
(Incidentally, this is also why we "cannot" cut benefits across board. You really can't sustain a civil society when a sufficient percentage of the population is homeless and/or starving. The theory becomes irrelevant.)
They (we) will never starve nor be homeless ... we will adjust to multiple family living together, cheaper food alternatives, less energy consumption ... i.e. a lower standard of living ... from driving to McMansions to walking to McDonalds.
The real extent of the systemic problems with the U.S. economy have not yet reverberated and at this point 44.2 million Americans cannot feed themselves without government assistance. Thats 1 in 7 Americans on food stamps right now.
So when the shit hits the fan, your saying nobody starves? there will be no food riots, no refugee camps, no disease outbreaks as hygiene and plumbing become luxuries?
You know, right now, there are tent cities outside of most american cities, tell me what 29 dollar a gallon gasoline and 60% unemployment does for GDP and social programs.
http://www.youtube.com/watch?v=iqnMrynpq9U
I miss you fucker! whasss up? come around more dick weed! dont make us come find you!
I suspect our wealth inequality is simply incompatible with a civil society. I predict the USA ceases to exist before 80% of us are required to live in squalor while Blankfein and Dimon buy countries for fun.
This is no mystery folks... all wealth (value) comes from the ground -- food, gold, oil. In exchange for world reserve currency status, the US became the de facto World Police. It's everywhere (UN Charter, Bretton Woods, etc...)
It's by design, not accident. It needs to stop to be sure but it ain't no mystery.
Yawn.