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On the Fall of the PU
I followed what Biden and Ryan had to say about Social Security in their debate. My take on their words:
Ryan said four times that his plan was to restructure Social Security. He said his plan would not involve a sacrifice for anyone who is now 55 or older. Ryan has created a new “Red Line”. If you’re 54 or younger, you are below the red line; bend over. If you are above Ryan’s artificial red line, you get a free ride.
This is an extremely unfair plan. I can’t imagine how it could be implemented without ripping the country apart.
Ryan was referring to a version of the Simpson-Bowles plan for Social Security. A combination of increased taxes, coupled with increased retirement age and lower monthly benefits. There would be delay in implementing these changes, so that those who are now near retirement age would not be hurt.
I give Ryan a B+ for honesty. America’s politicians have to fess up to the fact that Social Security (SS) must make significant changes to remain solvent. Higher taxes and lower benefits are necessary if SS is to last another twenty-years. There is no way around that fact. Any politician, who says otherwise, is just lying.
But I give Ryan a D- for fairness. The idea that everyone today aged 54 or younger gets screwed, while those a few days older get off Scott-free is insane to me.
America’s problem is the Baby Boomers. Every day there are 10,000 new beneficiaries who are hitting up SS for a monthly check. At that rate, over 40 million Boomers will be getting their full monthly checks by the time Ryan’s “Red Line” comes into effect. After the first SS check is written, the future payouts can’t be reduced. So the Ryan plan creates a carve-out that protects a huge chunk of the Boomers. It does it at the expense of everyone who is today under 55.
That’s the plan? Protect the age group that is causing the problem? At the expense of the next few generations? None of the 40 odd million Boomers will suffer at all? None of them? Where’s the fairness in that plan?
What Ryan promised for SS is just a political lie. The fact is that all of the folks who are today 55+ probably liked what they heard Ryan saying. And that is a very big block of voters.
The Boomers are the problem. They have to be part of the solution. Any plan that gives the Boomer age cohort a free ride at the expense of the rest of the population is a recipe for disaster. The risk is Age Warfare.
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Everyone says that Biden is the “smart” debater. Maybe so. His comments on SS were carefully crafted. But if you look through his words, he was just playing politics.
Joe went straight to a liberal hot spot on SS. He flat out promised that an Obama/Biden ticket would never, ever privatize SS. This was a very smart move on Joe’s part. It plays to one of the great fears that the lovers of SS have; that one-day, the Republicans will let the evil guys on Wall Street get their hands on the SS Trust Fund.
Ryan rebutted that privatization should be considered for younger workers, but Biden blew him away with one of his now famous chuckles. Biden knew that he had scored points, as he knew that even the mention of the word “privatization” would get a few hundred thousand folks to the voting booth.
On this exchange I would give Biden a B+ and Ryan a D-. Ryan is wrong on privatization, he should have known better.
Ten years ago SS was running $100+Bn annual cash surpluses. If there ever was a time to consider a partial privatization, that was it. A portion of the surpluses could have been allocated to other investments back then. But not any longer.
SS is running annual deficits now. They are in the -$50Bn range for 2012, but the red ink will grow rapidly north of $100Bn in just a few years. If any portion of SS’s current cash flow were diverted to other investments, it would mean that there would be a larger drain on the Trust Fund surplus. The fact is, privatization is no longer a policy option. So Ryan was selling sound bites of a policy that has no chance of seeing the light of day.
Outside of the attack on the privatization of SS, Biden said nothing about SS that was worth noting. As a debate move, this was brilliant. If you say nothing, have no position and avoid critical issues, you win debates.
Here’s the facts Joe Boy:
Before 2016 the SS Disability Fund will run dry. They next administration has to confront this reality. A fix is required in less than 36 months. There is a gun to your head for action Joe. You have two choices. Raise taxes or cut DI benefits. Which one is it? You can’t hide under a rock for another four years, so what are you going to do?
The retirement side of SS will run off the cliff in 20 years according to the CBO. But that estimate is off the mark. It is not possible to run the SS Trust Fund to zero; a minimum of one-year’s worth benefits has to be retained as a minimum reserve. Over the next decade there will be at least one recession, when that happens the SS death spiral will be advanced by five or so years (as it was from the 08 blowout). The reality is that the SS drop dead date is closer to ten-years away from today. You can pretend this does not exist, but that makes you a liar.
Ryan has a bad plan, Biden has no plan at all. As it turns out, Ryan’s plan of “55 and under get clobbered” is about right. That is exactly the way this is going to play out. Either there is legislation that screws everyone 55 or under, “the Ryan Plan”, or there is the Biden “Do Nothing Plan”, and in about ten-years SS falls off a cliff. Either way, the same folks get screwed.
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I think America needs a new political party. I would call it the Purple Unders Party (PUP). Purple, because it is the color when Blue and Red are mixed equally. Unders, for that group of people who are 55 and under.
The funny thing is that the PUs are out there. They will be voting for either a Red or a Blue. One fringe or the other will win, the PUs will all lose. Those PUs make up most of the population, and well more than half of the votes.
What a stupid system.
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I would happily make this same deal. Let me keep my money going forward and you can have everything that I have put in up to this point. Why would I make this deal? Because, I know all of the money I put in is already gone and I know that all of the money that I will put in in the future will disappear in the same way.
People believe that the money will be there because it has always been there before but at some point this system has to fail, unfortunately, I think one of the next couple retiring generations has drawn the short straw.
MUPpets?
Vote by HOW you want to be screwed?????
Bk? Caused the problem? We paid into it the longest with the biggest salaries. Get over it
As a 35yr old completely screwed by this system I don't "blame" the baby boomers. I think Bruce means the math with the boomers is the problem. They are going to break the system and to screw everyone after them is unfair. I don't think the boomers had secret social security rigging meetings every Tuesday night.....right?
We do. But you're too young to be getting the e-mails just yet.
We also have a secret handshake and a decoder ring!
Ten years ago SS was running $100+Bn annual cash surpluses.
What are you smoking, Bruce? Ponzis don't run surpluses. They are FRAUD, pure and simple.
It was, is, and always will be a fraud. You are smarter than that. Get over it.
Every year there is a deficit in SS take the money from the defense budget. Rather it go to taking care of the old producers than death and destruction.
But there is no profit in that.
So too bad old people your gonna die anyways so take some lying ass politician or financial PhD with ya? What the hell you gave it to them on a promise you might as well get something out of it?
No can do. We need more money for the "defense" of the Zionist Empire.
Whoa up there, buddy. Some things are sacred. Just stick to discussing Ponzi schemes, OK?
The Baby Boomers aren't just leaving the country worse off, their destroying the whole damn thing on their way out.
If you are referring to the Multi-national Corporate job-killing 1% Boomers, you are right. The 'useless eaters' of the Boomer generation had nothiing to do with this destruction.
Now we just have to work longer since our 401Ks were killed back in 2008. We paid into SS our entire working lives. Why are you blaming the 99% for this destruction?
It's TPTB that have ruined this nation and the world, for that matter.
Somedays, I with that Mother Earth would just shrug her shoulders and turn on her axis. Voila, no more worries.
Does it really strike you as rational to blame the demise of a nation on a particular group of people simply determined by the year they were born in?
Why not blame the parents who chose to have children in those particular years? I mean, if we're going to make irrational comments, why not go balls deep and full retard?
Women live, on average, about 5 and half years longer than men. They need to have their eligibilitiy age raised to reflect that. Problem solved.
The UK has raised state retirement age to 70 for both sexes.
Incrementally phased in over a decade.
No massive outcry.
The missus just returned from her annual visit and she said the general mood is
collective resolve , rather than what she sees here in the US.,collective dissipation.
And the missus can get stuffed, too.
Already done,thank you.
What about raising retirement to 70 for both sexes as in the UK ?
Would wipe out a lot of the unfunded liabilities if Medicare matched.
Also the UK contibution rate thru' NIC tax is identical to the US, the top payout is around
90 pounds per week ie $150 per week.
That's all up to the UK. But to say that everyone is cool with it defies logic.
"No massive outcry"
Really? So the missus took a poll, did she? The usual stolid British, is it? Still got the same spirit as during the blitz, do they?
Get stuffed.
Seems we have the usual Yank "Brit-hater" again.
As usual Britain leads you lot by actually DOING SOMETHING ABOUT IT, rather that the US strategy of talking. Better (and far more cost-effective) healthcare system too don't you know? (well, compared with the costly "got to be with the right insurer" system you have, almost everywhere else beats you, don't they!).
As for the Blitz mentality - just wait until Mainland USA gets it Blitz - it'll be "highly educational" to watch all the "Guns and Ammo" bully boys find out just how nasty, and painful, modern warfare is, won't it.
And for all the Countries you've pillaged purely for your bernefit as the planet's most wasteful and self-centred Nation, it'll be one hell of a payback.
Before you and your followers decry me as a "Stupid Brit", you ought to know I worked there, but my passport is Australian . . . .
In the 19th century the British Empire was the USA's singular enemy. And rightfully so. Then Teddy Roosvelt signed us up to support your rotting empire. After saving your butts in two world wars, we inherited your empire at your urging and the "special relationship" was established. A divorce wouldn't bother me in the least. This relationship was never in this republic's best interest.
In the 20th century you got exactly what you deserved.
Australia? How do you like being protected under our defense umbrella? If war breaks out in the east, you guys are the front lines, not us. So stiff upper lip.
Hell, we can't even retire the stupid penny from coinage. Can't eliminate a paper dollar. Lobbyists have more power than most people realize.
Women make 77 cents on the dollar of males. And some were homemakers....raising kids, cooking, etc....you know all of those things that are done for FREE.
And if you read recent census info, women's lifetimes are decreasing. Not surprising. I think all lifetimes have peaked given the introduction of chemically processed foods, the heavy build up of herbicides and pesticides, and the amount of nasty air we breath if in an urban area. Never mind the water....even the rich can yatch around in certain lakes due to blue algae.
Twelve year-olds are now diabetic.
The American Empire is in decline. In fact, I'd say the entire planet is in decline. Even the Chinese are starting to protest the degradation of their environment. "Who cares if I become Middle Class if I can't find clean water to drink?"
Pretty soon, many of us won't want to live. I'm sure TPTB are working on a business model for Assisted Suicide as I type. I know I'm becoming rather tired of dealing with the decline...just looking at your silly idea of solving SS. Dealing with the willfully ignorant gets more and more trying.
Soylent Green could be right around the corner!
Note to Self: Stop reading Comment Sections.
The PTB plan is not Assisted Suicide. It's Culling of the Flock. The old, no longer productive (at least in TPTB's view), "useless eaters" must be eliminated. A new word for the process to replace "murder" is desperately needed and no doubt is the subject of a government agency search as we speak.
Many Americans already no longer want to live. It should be obvious from the suicide rate.
We could declare open season on them, however it's not very sporting since they can't run/hide very well.
It's a lot like hunting cows, but how else do we get naugahide?
Oooh! I see by my votes that I hit a nerve. Either that or the denizens of ZH have more of a heart than sense of humor. Either way, it's all good.
I will get my first SS check in 13 months. I want it to replace the interest income Bernanke is stealing from me. I'm still getting screwed but it will make up for about half of the interest I was getting before this lout started ZIRPING me.
Same thing here but I'm about 30 months away. Fuck You Bernanke
Off topic, but "Inside Job" is free online again, with Spanish subtitles found here:
http://www.filmsforaction.org/Watch/Inside_Job_2010/
I'm sure most of ZH readers has seen it, but maybe pass it on to those that have not for an appetizer of insight to financial fraud and political corruption.
awesome thanks for the link
"Every day there are 10,000 new beneficiaries who are hitting up SS for a monthly check."
Does anybody ever die in this calculation?
How many people die before ever receiving a dime from SS despite having paid into it? Not everyone leaves behind a spouse, and these days, less people are getting married than in the past.
I don't know the answers to the questions I've posed...but I can't recall ever seeing them addressed in the many SS calculations I've seen.
One more thing: As far as privatizing any part of SS (i.e let Wall Street handle it)...you cannot be serious. After everything that has gone on in the past couple of years, do you really think anyone would be in favor of that (other than Wall Street itself)? That's like letting a convicted pedophile babysit your child.
...One more thing: As far as privatizing any part of SS (i.e let Wall Street handle it)...you cannot be serious. After everything that has gone on in the past couple of years, do you really think anyone would be in favor of that (other than Wall Street itself)? That's like letting a convicted pedophile babysit your child.
No it's more like leaving your child with a suspected pedophile. Leaving it in the hands of the government is like leaving your child with a convicted child killer.
The answer? Government should get out of the enforced pensions business altogether. It's up to the individual to save what s/he likes for their retirement, it's not the proper place of government to mandate saving for your old age or incentivise it with tax breaks.
You are welcome to your opinion, but you stand with the minority.
Government's challenge is to make it work. Failure to do so will mean voting out the ones who can't get it done, and voting in those who will make the adjustments. Reagan, for example, was able to work with his opposition to fix it for 50 years. Where is the GOP's equivelent of Reagan today?
Oh! I forgot. Reagan would have no place in today's Republican party. He compromised, worked across the aisle, and raised taxes when he sobered up and realized his job was to actually govern with some sense of responsibility.
...You are welcome to your opinion, but you stand with the minority.
Yes, I suppose it is just a minority who understand that the more money you give to government, the more they'll waste it.
You want 'your' money back? Then get it from all the people who were nett recipients of SS, who bought FDR and LBJ and all the other scoundrels' bribes in return for their vote.
What? They're all dead, you say? Oh dear. That's a shame. But why is it younger generations' responsibility to pay off previous generations' elected liars' promises?
You have the solution. 40% of potential SS takers need to die the year before they start taking benefits. Most efficient and FAIR approach would have the SS Disability folks die within first year of taking benefits.
Finally, somebody who dares pose the solution, DEATH. Well done, Alien with you high IQ
I really do not understand your comment.
If it was sarcasm, it was too cryptic to be effective sarcasm.
Cryptic is always good. Makes people think and provides plausible deniability for the ever watching big brother.
“Be innocent of the knowledge, dearest chuck, Till thou applaud the deed.” (Macbeth act 3, sc. 2) Hank Paulson never does e-mail and all these idiots on twitter and Facebook. Plausible deniability is the best strategy in our check the box judicial system.
The solution already has been applied: inflation. So you get a check in the mail...does it buy you more or less? Obviously the answer is less. MUCH less if we are not wise here. A plan for SS? How about we start with an acknowledgment of reality: the plan as stated by the Fed is inflation. Can it be telegraphed to the market any more clearly? Sure...we all must MAKE dollar denominated assets. By why would we hold them? (I want to list 100 good reasons here btw...I really can't think of any right now.) unfortunately this is not the 80's or 90's where there were no demands on capital to provide for the war. Trying to find out a way from the catastrophic failure...don't see tanking the dollar as anything other than creating catastrophe 2.0. Why color pick up you drive btw BGfB? What? No pick up trucks in the EZ? Why is that? They have them in Afghanistan...
Ryan simply following the cynical GOP game plan - cater to those 53% likely to vote republican, i.e., older baby boomers over 55 and screw the 47%...
Joe is just Biden his time...
Third option: limit the beneficiaries to the people for whom the program was originally designed. No more "disabled" drug addicts, 18 year old college students, etc.
If so you'll see a lot more drug addicts and disabled. A lot more
Tell me more how dropping the goverment subsidy produces MORE drug addicts and disabled!
I thought, at the age of 51, born in 61, I was on the tail end of the Baby Boomer generation. Anyhow, guess I am one of the ones getting screwed. Cannot save due to the high cost of everything, despite the feds "no significant inflation" line of BS. Have a small 401K that the company contributes to, but as of now have not had the extra cash to provide any more contributions. SoI guess I am one of the lucky ones who will have to work until I drop. And if I lose the job and cannot get another, move into that reserved cardboard box under the I-40 overpass downtown.
What a future we have laid out for us. ;-(
cbxer55,
just an accident of birth, lad.
I always thought that it would be me, but after 46 years of paying in---there was still enough left to begin paying out. I hope the same happens for all, and it can if SS is capped and double-dippers taxed; SS was never a 'retirement plan', but always an old-age fund so that old people would not have to beg on the streets. This problem has multiple solutions and if anyone is interested in anything other than themselves----it can be worked out, though, maybe a little different than what was expected.
It does not have to be the War Between the Generations that the pundits want. Fuck the pundits----there is enough for all om
Maroon colour party for combining red and blue?
How many male Americans now know 'maroon' is a colour? - Women know, from buying lipstick and coloured tights - but males tend to not know colours like maroon, mauve and taupe
Didn't Bugs Bunny often say, 'What a maroon!' as a more polite form of 'moron'?
Wouldn't combining red and blue be more clearly and simply given as 'purple'? - People's Purple Party could maybe inspire some populist passion
BK do you have a deep-down feeling, as many others do, that such discussions of US 'Social Security' will seem pretty laughably irrelevant, after the Great Economic Reset that will take place well before 2020? ...
Bugs Bunny saying, 'What a maroon!' -
http://www.youtube.com/watch?v=C_Kh7nLplWo
Somebody linking Joe Biden's gaffes to Bugs' 'What a maroon!' -
http://www.youtube.com/watch?v=DIQ-duxYXMk
...Wouldn't combining red and blue be more clearly and simply given as 'purple'? - People's Purple Party could maybe inspire some populist passion..
Where does Bruce even mention 'maroon'?
I am a male, and I know the color you speak of. Have had three vehicles in that color, Datsun 280Z, Toyota Pickup, and Mitsibushi 3000 GT.
Got some undies that might qualify as being that color as well.
Guess that makes me metrosexual?? ;-)
Yeah, good old Bugs Bunny. He used that line toward TAZ at least once that I recall. ;-0
You are all hitting upon, but missing the real and truely, "final solution" to all this mess the country faces. The color we are to be concerned with is Turquoise. Yes! Turquoise, and namely, to the Turquoise that was put on cars in the glorious American hey day of the 50's and 60's. Simply bring back that old touqoise color on cars, like my Dad and Uncles old Turquoise Impalas, and just watch how everything turns around.