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.
Achtung! Wir brauchen Boomerkonzentrationenlager! Arbeit macht frei!
Achtung! Wir brauchen Boomerkonzentrationenlager! Arbeit macht frei!
I'm afraid you can't extract many gold rings or gold teeth from this crowd. Plus the boomers are not exactly in their haydays. They'd eat more food and take more pills than they can produce. Therefore this business model isn't viable.
The power that be won't dirty its hand trying to get rid of people who outlive their usefulness. They'd let Nature take care it.
You are right! Thanks, I forgot that asking people to be individually responsible for their actions is the moral equivalent of Auschwitz.
But stealing my money that I worked hard for all my life, preparing for my senior days without social security, that's a noble cause.
Fuck you, Escapeclaws.
My apologies. You are right--what you said has nothing to do with Auschwitz. I over-reacted.
There is no reason.. NONE! Colonel that anyone that paid in should go without.. except for the fact that those monies paid in were stolen by scumbag Washington DC types..
any extra debt assumed for future payments should be offest by taxes.
a flat tax..
everyone pays the same thing.. no deductions.. fair, flat and no dedections..
how much money did I just save the country? in tax law / code.. IRS employees?
done deal.. But it would cost Bruce less to carry the others becuase of the loop holes.. Bruce is a Government Plant.. a Tester of bullshit ideas.. how do you fuck over the little people.. hwo do you squeeze the government while looking like you give a fuck.. hes a republican.. thru and thru.
There is no reason.. NONE! Colonel that anyone that paid in should go without
Guess that state-sponsored education never taught you that NO ONE HAS PAID IN. There is no "in" in SS, IQ-less. It is a pure transfer payment with the IOU veil that it was tagged with at the New Deal.
I love it when people who make less than I pay in taxes go on rants about "fairness"...
"I love it when people who make less than I pay in taxes go on rants about "fairness"..."
are you talking to me? becuase if you are talking to me coward you can come meet me at one of my offices that is closest to you and I will happily correct your thinking in a way that your ignorance will never be a threat to anyone again.
fucking keyboard tuff guy.
"keyboard tough guy"
LOL
Pot meet kettle.
hey now.. I back my tuff guy up with numbers.. sourced and sited Mr. Polite Fish! LOL!
Dispatcher: Delta, we gotta psychopathic liberal here that's channelling DeNiro and can't find the shift key on the keyboard, over.
Seal_6: Roger that. Any update on his meds?
Dispatcher: Negative, negative. Neighbor says he's long prozac and meth, but pharm reps haven't seen him in a couple weeks. Fear is he's holed up with his peyote and nothing to keep his seritonin in balance.
Seal_6: Copy. Best off to let these guys rant themselves into a tizzy before we go in with the heavy stuff.
YES I'M TALKING TO YOU, SPANKY. THAT'S WHAT THE REPLY BUTTON DOES.
There is no reason.. NONE! Colonel that anyone that paid in should go without.. except for the fact that those monies paid in were stolen by scumbag Washington DC types..
Well, there's your one reason right there - this generation and those before could have changed the system any freaking time they wanted to. They could have fixed the inherent structural problems decades ago when they would have been easy (or, at least, easier) to fix.
They did, well, nothing.
No, worse than nothing - they insisted that a program designed to keep the elderly from becoming abjectly destitute be evolved into a "retirement benefit" program that covers not just early retirees but the disabled.
So, they spent their whole lives making the problem worse and are now complaining that I'm unwilling to pay more than the current 1/8 of my total freaking earnings - more than I spend on food in a year, by the way - propping up their failed system.
Nuts.
Ronnie Reagan told me it was fixed. And Ronnie never lies.
Correction:
Bruce, I do not know if you are a joke ... but, c'mon man, that's the best you can do?!
I don't get it. You guys are acting like we have a responsible congress and executive. The whole thing will be belly up in just a couple years. All the money needed til then for SS will just get printed. No special burden on young people. The whole system collapses into Hyperinflation, and everyone is destitute.
Why even bother arguing about i?
ding ding ding ding ding ding
That's what I keep saying--why does this shit keep coming up? It's not like SS is what makes or breaks us, not at this point.
It's a witch hunt. Lottsa fun . . . except for the "witches."
Good Luck Censoring that shit you fucking Coward!
Social Security was always a scam JW, check out the life expectancy in the mid-1930s. Less than 1/2 of the population made it past age 65 so SS was a bottom floor for people to not starve in the final few years of their lives. Time to return it to its original intention and means-test it. No social security check for Warren Buffet and anybody with a fat 401k or a yacht, thanks.
Damn, you sure one crazy liberal boy, JW! LOL. And you got guns, too.
Damn!
Nice rebuttal that was. So much propaganda from the self-serving sycophantic tools of the elite, who just can't help themselves from prematurely pronouncing SS dead. Ad infinitum.
Get "serious," have an "adult discussion," etc. What a bunch of fucking two-bit husslers.
Point out that something like 60% of the retired population relies exclusively upon SS to live and the best you'll get is that theatrically sad look before they reitterate "we don't have the money."
Ironically, they're usually exactly the people who do have the money. Geez, how'd that happen?
btw, I meant to thoroughly compliment you in all that. Sometimes my dialect may not come through in writing as meant . . .
Off the rail JW, Simma Down NOW!
http://www.youtube.com/watch?v=f9z3Gu9IfhU
We-I have already been paying out the nose
Big trouble if benefits are cut for those now 50 and over.
Politically this is more sacred than unions so I doubt it gets cut
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!
Thank you JW. Your well reasoned and articulate comments are always appreciated. I especially like the solution that you proposed: death to old people. Now there's a solution that nobody can dispute. Oh, but what about the burial/cremation expenses. Should those be borne by the young as well? No! I say let 'em rot in the summer sun on the sides of the roads. Just killing them is not enough -- they must suffer. We need to start with your family, of course, since the germ of the idea is yours.
He's going over the top, Rocky, to be sure ... but he's got a point, and it's a good one.
never answer the first one you see.. and you have too also look at the time line.. this is the second to last I posted..
you know better..
Happy Sunday to You and Yours Rocky