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Social Security Full Fiscal Year Results – Flash Report
In Washington, almost every report is late. The exception is Social Security. They have their numbers for September posted as of today. The folks in D.C. run their clocks on a fiscal year that ends in September. The following are the results and YoY comparisons for fiscal 2010 and 2011 for SS.
Both the top line revenue and benefit expenses rose over the year. It’s not surprising to see that the pace of payouts is continuing to outstrip the rate of revenue growth.
It should be noted that the $24.3b of increased payments is not a result of a COLA (inflation) adjustment. There has been no inflation adjusted increases in the past two years for SS. The higher 2011 payout is exclusively the result of more retiring workers becoming eligible for benefits. The number of new beneficiaries is now growing by 10,000 a day, 7 days a week. That number is going up in fiscal 2012. It will go up every year for the next 14 (The boomers are coming on fast and steady).
I believe that there will be a COLA adjustment for 2012. I estimate ~2%. The inflation adjustment and the aging population will result in an increase in benefit payments next year of ~$40 billion (5.7%). With revenues rising much less than that, the red ink at SS is going to rise next year and for as far as I can see into the future.
What matters (to me) is cash flow. On the critical measure of FICA tax revenues minus Benefits the number comes up negative. For 2011 it will be $57.9 B in deficit. That compares to the red ink a year before that was (only) $47.2B.
The other Cash components that I am estimating for fiscal 2011 include:
Tax on Benefits = +$23b
RR retirement = -$5b
Overhead = -$7b
The sum of all the cash components brings the annual number to -$46.9b versus 2010’s -$36.2. Clearly, things are continuing to head the wrong way at the SSTF
Interest Income is a component of the picture that is not paid in cash. It is paid in script. I expect this number to be $114b. When the "paper" is included in the calculation it will look as if (and be reported as such) that there is a net surplus of $67.1b. I think this is deceiving. The Headline will read “Surplus”, but the reality is that SS is just a drain on us today. It is just a larger promise that has to be kept tomorrow.
For those who “Cheer” a surplus that includes phony interest I point out that in 2006/2007 the surplus was $190b and in 2008 (just 3 years ago) it was $180b. 2011 shows a significant slowdown. The Surplus will have fallen by 2/3rds from that recorded in 2007 (before TSHTF). In a matter of a few short years (and way ahead of the current forecasts) there will be no surplus at all. Not even one made out of confetti.
There are significant adjustments that have been made to the 2010/11 numbers. These represent re-statements of prior years estimates. The adjustment amount in 2010 came to a -$26b. So far in 2011 only $14bn has been recorded. Of the $13.6b of improved tax receipts in 2011, approximately $9b comes from changes in YoY adjustments. In other words, the apples to apples comparison of revenues is only +$4.0b (0.6%).
The annual adjustments to income cloud the results at SS. My conclusion is that on a straight comparison basis there is very little YoY change in revenues at SS. The implication is that there is little growth in total payrolls and there is little growth in wages. That’s not surprising at all. I expect that this will show up in the next few months of NFP numbers. I would, as a rule, take the “Under” on all those estimates.
There is one interesting thing to consider with SS. They have this paper surplus called a Trust Fund. That Trust Fund earns paper interest. Lots of it. At the end of the year that fund will total $2.65 trillion. It will have an investment average maturity of 7 years. The rate of interest paid to SS is currently 4.25%.
Now consider that the Treasury yields today for 7 years is a measly 1.58%. The difference of 2.67% comes to a whopping $70 billion a year in “excess” interest being paid to SS.
If one applied this same thinking to SS’s sisters, (the Military and Federal Workers Funds) it comes to ~$4T of principal that we are (over) paying interest on. The excess interest on the whole mess that is referred to as the “Federal Pension Obligations” comes to a very important $100+ billion. Every Year!
I’m not sure what to make of this. Clearly society is providing a significant ON BUDGET subsidy to these programs (this alone is 7% of the deficit). At a time when everything else is getting ReFi-ed at lower rates (and savers are getting creamed on their holdings) there should be a discussion of the biggest ReFi of them all, the federal Trust Funds.
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"but if spending that $46.9 billion stimulates the economy, isn't taking that $46.9 billion OUT of the economy by taxes a 'drag' on the economy? For a net of ZERO?"
Not if the money is given to elderly Americans that will spend it immediately on services provided by Americans. As opposed to giving it to foreign banks, I mean.
Regarding your numbers, we could go with your calculations, but we hired an actuary instead. I don't want to sound harsh, but you are completely unqualified. BTW, the actuary says the system will deliver >75% of the benefits under some pretty negative scenarios. Assuming, of course, that people like you continue to pay in. Which you will.
No, no, no. The elderly will spend it on healthcare, which goes to the Mega insurance companies and Big Pharma, who will send the money to Wall Street, who will then send it overseas to foreign banks. It all ends up in the same place.
As far as being able to deliver %75 of benefits, look what's happening to the 20-somethings with regards to their job prospects. They're working as baristas and bartenders. How much tax revenue is that going to generate? And what is the current worker-to-retiree ratio, something like 2-1 right? How are two barristas going to provide $30-60K in annual SS and medicare benefits for the retiree they are supporting?
Certainly the money for services stays in America. Mega health insurance companies do not send their money overseas. As for big Pharma, we all have our work cut out for us on a variety of issues starting with medicare schedule D.
Regarding your figures I'm going to have to go with the SS actuary on this and not with a dog. Nothing personal, but you see where I'm coming from.
Are you implying that putting money directly in the hands of the people is a better stimulus than giving to banksters?
Uncap the contributions, means-test the back-end, and bump the FICA rate...or just arrange to have something nasty included in their Medicare Part D meds and be done with it.
The last thing we need is legion elderly gangsters getting stuck on windowsills while trying to break and enter.
The fix to SS is easy. Simply raise the retirement age until expenditures match incomes. And keep on adjusting it as needed. There is nothing written in stone about 62-65 as ages when you get benefits.
Social Security Recipients will get their money. It won't buy anything, but the check will come in the mail (or direct deposit, not sure how it works now).
They'll have a vauge understanding that prices are way up, their standard of living has collapsed, and they're eating cat food. But they'll be happy enough that the government has "taken care of them."
Most people are far too stupid to understand they got royally horsefucked. The unions will be in the same boat. They'll get the pension check but it will buy half a loaf of bread at best.
And the best part is you won't have any real right to complain. You were "promised" $X. You received $X. Nobody ever promised what $X would buy.
now if we could explain this to the tens of millions of baby boomers who keep saying "don't touch my SS / medicare" etc this is a reality check for them.
Unfortunately they'll keep voting for the politician that promises not to cut benefits, but who keeps paying those benefits with debased dollars.
The politician who tells it like it is, SS is bankrupt and there is no money, will be called 'radical'.
"The politician who tells it like it is, SS is bankrupt and there is no money, will be called 'radical'."
Then almost immediately he'll be called "unemployed". And his colleagues will be called "totally cowed".
I'm still waiting for some politician to step up to the plate on this one. It will be entertaining.
You're going to want to see how SS performed during the inflation of the 1970s. Recipients did pretty well.
It is not even remotely close to the 70's. balance sheet comparison is a joke. interest rates rose the entire decade....There is not wage inflation like there was in the 70's...comparisons aren't appropriate because the data is so distant.
Political decisions were made (see Nixon, Richard) to make sure the program remained properly funded. It was about buying votes. That hasn't changed. Lots of boomer votes out there. They seem to be very focused on this issue as I mentioned above.
Oh, you'll get COLA adjustments and all that jazz. Except the COLA will be 2% but inflation will be 8%, 9%, or even 10%. Again, the average person is not able to understand they are getting horsefucked. They'll say "Wow, the government is taking care of me by increasing my Social Security check!" Meanwhile, they are eating kibbles n bits and sleeping under a newspaper filled blanket.
Trust me, your money will be taken from you. In fact, it already has. We are just debating how badly you are going to get fucked and how long it will take you to figure it out.
"Except the COLA will be 2% but inflation will be 8%, 9%, or even 10%."
That is not what happened under Nixon. Quite the opposite. I suggest you count the votes again. Your figures are way off.
You might as well find a spot under the overpass now because that is where you're headed. You are totally clueless and will be sheered.
LOL. Just don't lose your job. You'll want to collect unemployment, and that might bruise your dignity. The good news is there will be room for you under the overpass, because there won't be a single old person crowding you out.
Abolish Social Securty and FICA. Bet "they" wont 'cause Fica is a cash cow.
Abolish SS and FICA? Gubbament can't take any money out if no one is putting it in.
Lesson to be learned, take care of yourself and don't depend on others to take care of you. Big Gov only goes so far. I'm taking care of my health as best I can given the obvious trend line in healthcare. Same goes for my retirement. I'm doing without now, saving as best I can to take care of myself despite the fact I'm forced to give up significant wealth to the whole screwed up system, SS and various other taxes I have no control over. I'm a saver, an ant not a grasshopper. We'll have our day in the end and the grasshoppers will perish when the snow flies. Such is life.
I have saved as well. But it's hard to earn interest income on my savings for some reason (LOL). The good news is that there is a government program that I funded in addition to my savings. It only provides a modicum of income, but it pays regardless of the failures of the "marketplace". It helps to keep me off the street, since midnight basketball no longer holds any allure for me.
Well thats real noble and good luck to you. I am moving back the the Netherlands.
Netherlands has great government paid benefits; smart move.
You're absolutely right that it's the cash components that matter. When FICA revenues fall short of SS payouts, the shortfall is made up from the general budget. And so that payment by the SSTF of "interest" to the SSTF is actually made up two parts: one part of money, exactly equal to the amount of the shortfall between FICA revenues and SS payouts, and one part of meaningless script. As the shortfall grows, the general budget will cover the shortfall with a cash payment of "interest" plus a cash payment of "redemptions" of that script, and the total of those two will be exactly equal to to the amount of the shortfall between FICA revenues and SS payouts. Seeing a pattern here? Follow the money, not the script.
For this reason, your discussion of the interest rate paid on the SSTF is pointless. No matter what the interest rate is, the cash payment from the general budget to the SSTF is exactly equal to SSTF's cash shortfall. The "interest rate" only affects the meaningless script.
If the interest rate were market SS would look far different. The interest rate is just a mechanism to subsidize SS. The interest subsidy masks the weakness at SS.
Tom, there is no "t" in scrip, just a technical note to keep things clear for those that do not have degrees in econ/finance. The trust fund has been raided we have been told for decades to "invest" the surplus paid into it in the "safest investment on the planet," US Treasury bonds. Now whether any bonds traded hands or not is totally beside the point, the trust fund will be treated as if CUSIP numbered treasuries were all sitting in accounts in Woodlawn MD and as of this very moment the intergovernmental holdings are $4,632,518,164,730.04 nearly all from overpayment into the fund.
Actuaries understood that the baby boom generation would indeed overdraw the accounts if payments did not result in an adequate surplus that would be properly invested for a return, I remember them making the argument in the 70's that the rates were essentially enough. The amount that is drawn down will exceed the amount paid in and it looks like earlier than they had predicted, at least in part because of falling real incomes for the great majority of households, falling interest rates on the investment, and do not dismiss undocumented workers who did not contribute, there are tens of millions of them. The gap between that amount collected and that paid in benefits will be made up by drawing down the surplus now held as intergovernmental holdings, and it will take a long time to draw down the greater part of five trillion dollars.
That the money has to come out of the general revenues is neither here nor there, workers that paid into the fund became creditors to the USA, and as we have recently been reminded there is no such thing as selective default on the nations debt, you are either current on all debts or you are in default.
I predict that this will simmer for another four or five years depending on the ability of the economy to slow the hemorrhage from the trust fund requiring those intergovernmental holdings to be made good on, but one day the political class is going to have to confront the will of the vast majority re SS benefits verses the will of the minority on increasing revenues from the wealthy. It could be the battle royal that ends the nation because both are utterly adamant, the poorer SS beneficiaries fairly say they are not entitlements but insurance benefits they paid for, borrowed by the wealthy who refused for decades to pay their fair share of taxes and who now refuse to repay that, and for the vast majority the benefit is poverty level or below. Only the wealthy get a livable check from SS every month.
The wealthy minority will have no morally defensible rebuttal to this, but they have something 70 million retired do not have, all that money they never had to give up in taxation over 60 years or so while the government ate the trust fund surpluses. That money dabbed into appropriate pockets on Capital Hill and into fascist slush funds will make current gridlock look just paltry. Of course should it come to civil war the rich can hire mercenaries while the nursing home crowd will have to fight their own battles. Might be fun to watch, but the greedy should note now that many millions of older people are like me, veterans trained to kill in wars.
How can it be "neither here nor there" that Social Security's current cash shortfall is paid out of the general budget?
We have one federal government. It is a single entity, with a single pool of revenues and a single pool of expenses. The fact that it has come up with an internal accounting mechanism that supports the artifice that a particular revenue stream (FICA) is dedicated to a particular program (SS), there are no - absolutely zero - real-world impacts of this accounting mechanism. When FICA revenues exceed Social Security payouts, the remainder is transferred to the general budget and spent, and when FICA revenues fall short of Social Security payouts, the general budget pays up the shortfall. That is all that's going on under the surface.
If you want to comfort yourself with thoughts of SSTF "savings" and the "interest" it earns, feel free. That might be a pleasant escapist fantasy.
The reality is all of SS's payouts are funded out of current federal taxes and net borrowing. The bottom line is that as SS payouts rise, and as the federal government's ability to expand its borrowing is exhausted, the govenment is going to have to choose between cutting SS benefits, cutting other parts of the federal budget, or increasing taxes.
Yep, politicians just want to scare you when they say SS is running out. It's nothing more than a line item in the govt budget.
Can you tell your mortgage company that your "mortgage fund" is dry? Meanwhile you have a boat and a motorcycle and take vacations. they'll have something else to say about it.
Here's my beef about raising any taxes. Why the fuck should the fed govt get any more money when they have proven they cannot manage the money they already get?
Because $4.6 trillion in surplus was transfered INTO the general fund over the years with the PROMISE that it would be repaid as needed with interest. You think they now will conveniently get out of it by default? No fucking way, I do not care if the income tax has to go back to 94% for incomes over a quarter million as it was in 1944, this is not a zero sum game, those that paid in will be supported in their retirements, those that have to pay will in their turn be supported when it is their time, it does not just simply stop with the baby boom dying, those that are paying in when we stop working are the ones that inherit our estates, inherit America. Seems like a pretty good deal for 16% wage withholding. Unlike the BB generation which is larger than the previous by far thus giving each of a smaller part of the pie, the next is smaller and so will each get larger legacies.
You're kidding yourself. From where do you think the SSTF "savings" will be "paid back"?
Currently, the "interest" on the SSTF's "savings" is being "paid" out of federal borrowing. How long do you think that can go on? Pretty soon it comes down to a choice - raise taxes to pay for the SS shortfall, or cut benefits.
Perhaps you've noticed that taxes aren't very popular, especially not recently. When it comes down to a vote, do you think Americans are going to vote to raise their taxes to pay for growing SS outlays, or are they going to vote to cut the retired boomers' benefits? Go on, take a wild guess.
Now, add on top of that the need to close the deficit. At present, that's about 9% of GDP, or about one-third of total federal outlays - including absolutely everything, even post office operating costs.
Do you think Americans are going to vote to raise their taxes by 9% of GDP to close that gap? Or are they going to elect a slash-and-burn fiscal conservative? Go on, take a wild guess.
What you don't seem to realize is that the SSTF's "savings" are worth exactly nothing to SS recipients. The only thing that matters is the law that determines the amount of their benefits. Congress can cut that anytime it wants or needs to. Extra SSTF "savings" does not protect SS recipients from benefit cuts AT ALL.
But there's some good news. Perhaps if your benefits are radically slashed, the SSTF will again start running surpluses, and you can comfort yourself in your poverty with the thought that the SSTF has more "savings" than ever. Yipee yahoo.
There are some exceptionally vast assets in the USA, and as I said speaking demographically, the baby boom generation was "the pig in the snake" because that is what it looks like when you chart the generational bulge, the generations before were smaller and the generation after is smaller. Those that own the assets will die and leave them to the next generation, in the case of the baby boomers they are already inheriting, but since there are far more of them the legacies are carved up more ways, they are smaller. As we die there will be people inheriting the estates and since their are fewer of them they will inherit more per person, and no matter what the fiat market value of those inheritances are they are still real tangible things, they are AMERICA and everything in it. So, equity in a house is just the cash out value in fiat terms, economics wax and wane, but the USA ain't going anywhere. You might claim they are inheriting a house that is worth little to nothing but I have seen housing decline before only to roar back to many multiples of it's former high value.
You who after all the thoughtful commentary posted in this thread still insist that SS is an entitlement akin to welfare, that is something for nothing, or getting paid for having functional ovaries, well, if you are that dumb then you are either trolls baiting the rest of us or you are not capable of cogent logical thought processes. It is pretty sad when you do not recognize your responsibilities, both legal and moral, but no problem, because I will not be the only old guy out there enforcing his right to collect on the promises made to us when we paid in for 40-50 years of work done, there are over 70 million boomers, people who do not think getting a tattoo is better than getting a job, who might be older but no less able to fend for themselves against a meth addicted generation that can't function beyond texting useless shit to their BFFs.
Larger legacies? What is the average 401K for a Boomer? How much equity does the average Boomer have in their home? How will that home's value hold up if the kids decide to sell when a large swath of other kids are selling to a smaller subset of people?
Riiiiiight. Young people (who have no jobs) are going to stand in line to pay 94% tax rates so you can enjoy an entitlement that you failed to fund by electing intelligent representation in government.
It's not my fault that YOU allowed the politicians to take your money. Your money was taken from you decades ago and you did nothing. Now, (thirty years later) you rant on the internet about how the younger generation has to make good on a promise that you made to yourself.
Fuck that noise.
Here is how it will play out Internet Tough Guy:
1) You will get your check check
2) Your check will buy basically nothing because the currency will be debased.
You personally may understand this but trust me, the vast, vast majority of your cohert can't add two nickels together. If they could, WE WOULDN'T BE HAVING THIS DISCUSSION IN THE FIRST PLACE.
You were promised $X, you got $X. You were never promised that $X would actually buy anything.
You don't like it? Too fucking bad. Get your guns out of the closet old warrior because when younger people figure out that you are willing to sell them into slavery to play the slot machines they will turn your wrinkled ass into Soylent Green.
Call your elected representative with any questions or comments.
Young people would not pay a 94% tax rate unless they have some millions or more in annual income, you are being deliberately facetious when you imply that that our past tax brackets for the very rich would apply to all and you know it. In the past, especially right after WWII the tax rates were fairer, the nation had the will and the morality to pay down the 120% of GDP they had run up in debt to pay for the war, more important they put people to work building the interstate system and took the money from those that had it to pay, the wealthy that were still wealthy after paying their tax bills.
But even then taxes were not so high on lower paid workers to push them into poverty as they now do. It is the cap on taxes at 33% no matter how much money you make along with the absurd levels of deductions and credits available essentially only to the top half and especially to the top 10% of taxpayers that is killing the revenue stream so badly needed to stop the hemorrhage, these effectively reduce the tax rates to single digits for most rich people and even nothing at all, if a rich man pays more than 10% income taxes under the current system he should fire his accountant.
My side of the political divide is more than happy to recognize that there are hundreds of billions, many, to be cut on the spending side, starting with corporate welfare, farm subsidies, which in this day and age is a corporate welfare scheme for 10-20 mega Ag firms, any and all payments to pharma, the drug prescription plan was the wrong answer to a very bad problem, just more corporate welfare. DoD needs wise but deep trimming. I would support the abolition of the Department of Education, it has if anything damaged learning in America. Many other examples are out there, but I will not compromise on anything unless and until the other side agrees that taxes at least for some will have to go back to an earlier and more rational level, supply side economics did not work and is worse than Keynesian garbage. I also will not cooperate until the right reaffirms the responsibility of government and the people to make good on promises of SS, at least of the retirement benefits. Time and numbers are on my side and woe betide those that think they can evade paying their moral fair share. People above had said that we boomers stood by and let politicians just take our money and so we are fucked by our own hand. If that argument is true then when we tax the wealthy at 94% once again as it used to be then it is the fault of those taxed, not those taking. There is but one way they will evade paying, leave. I hear Nepal is looking for wealthy westerners to move in, as is El Salvador and Belize.
Agree with you re cuts in spending. Make it happen.
Quick fix: If you haven't put anything in you can't take anything out. That includes 60 year olds that never worked except under the table, while collecting SS disability all their lives. Illegal aliens grandmaws that are collecting, and above all the Gubbament.
At the very least they should be moved to a different progam so we all know what were talking about.
Both of them?
"Might be fun to watch, but the greedy should note now that many millions of older people are like me, veterans trained to kill in wars."
It won't come to that. I am starting to see Viet Nam veterans begging on the street every day. They gave a piece of their bodies, hearts and minds in service to this nation. These men aren't "crazies". "We" ignored the "crazies" successfully and they died long ago. These men are blue collar guys who worked their whole lives, some with unacknowledged infirmities. They have earned SS and when it is time to get it, they can come off of the street. As their numbers grow, the message will become clear to all.
+55,000
The interest rate is meaningless. It could be 10% or 100%, makes no difference. You are a sharp cookie.
It's an intergenerational Ponzi that is going to crash like all Ponzis, no matter what the ethical or moral considerations.
The money was stolen, period. When will Krasting recognize this? Never.
The interest rate is very important. Say it was your 10%. That would mean Interest at SS would Rise by $162b. This is ON BUDGET expense my friend. This results in an increase in DEBT SUBJECT TO THE LIMIT.
The budget and the rate of debt growth IS THE PROBLEM. What you suggest would make things worse. It does make a difference. That is why I want the interest rate lowered to reflect market. I don't want another back door subsidy to SS or any other part of the federal retirement system.
The guys at SS would love your approach. That is because it is the wrong approach.
"The money was stolen, period."
No, it wasn't. It was invested unwisely which governments tend to do. No matter. They make good or default. If default leads to the end of the entire political class, I feel we may find common ground on this issue.
Yes, well then, Bernie Madoff invested his clients money "unwisely" as well.
Yeah, it's a bitch that his clients didn't have the backing of the richest nation on earth. They f'd up. At least they got Madoff some jail time. Hey, you're not implying that someone should get jail time over the SS snafu?
If I take money from you at the point of a gun and "invest" that money in a profligate lifestyle of my own making, why is that not "stealing"? And why shouldn't I be required to make restitution to you up to the entire amount of my assets?
I think we can both agree that we should get paid.
BK, for whatever reasons, appears to have an axe to grind with the lower classes, and especially with the program most benefiting them, Social Security. He hides it under a cloak of impartiality, bemoaning the “excesses” of the wealthy elite 0.1%, but never their systematic exploitation of the 99.9%, beginning with a militarism that spends more than the rest of the world combined to protect the wealth of that 0.1%
Commenting on a previous BK post
http://www.zerohedge.com/contributed/cbo-social-security-%E2%80%93-all%E2%80%99s-well
I wrote:
(b) A good part of SocSec is not handed out at all. It is IRS withheld and tossed into general revenues …
BK replied:
B) False. Of the $720b SS will pay out this year they collect back $24b in taxes.
I then responded:
(B) why "false"? $24b annually is not exactly chump change, especially over a decade (and again, IRS tax rates are likely to rise as well as the number of people receiving SocSec who pay IRS). I also suggested deducting as SocSec outlays the amount transferred to support Medicare.
BK did not again reply. Perhaps he will do so now.
I also wrote:
(c) Just looking at annual receipts implicitly assumes the US will default on what it has 'borrowed' and owes the SocSec fund. Bad enough, but yet the US will insist on handing out trillion$ to the money cartel (16 trillion$ by a recent count) - no 'default' there.
BK replied:
C) Not sure which money cartel got $16T of late; so no comment.
I answered (although thinking BK was either being deliberately evasive or has a convenient blind spot):
(C) Bernanke handed out $16 trillion
http://www.marketoracle.co.uk/Article29506.html
Today, allow me to re-state my overview of the pejoratively called “entitlements”:
Despite any palliative handouts downward, the flood of wealth is upward to an elite few.
Confusion about language leads to confusion about the problems. Solutions are not to be found by "freeing" corporations from their imagined grip by government. Nor will solutions be found by relinquishing the struggle for good governance to the imagined protections of the “free market”.
Nor is it to be found by allying with the corporations and the elite against the so-called “handouts” to the lower classes. Those “handouts” upon inspection, turn out to be backdoor largesse for mega corporations and the financial tycoons. The health care system primarily operates as a racket to subsidize big pharma and the insurance industry.
Social Security has been until now self-financed by the working classes, and the surpluses collected used as a regressive tax to pay for wars and bailouts. The SS retirement funds have also been raided to offload the costs of a disability crisis. Thereby the working class is handed the disability costs arising from domestic mal-investments and under-investments, a contaminated environment, debilitating work, degraded education, a neo-Prohibition war, overseas militarism, and the marketing of deleterious foods. Unsurprisingly, once the SS surplus ended, the program’s meagre pensions became ‘excessive‘, and the ‘borrowed’ funds too costly to repay. Also unsurprisingly, once the health disaster became obvious, providing public health care became ‘unsustainable’, while fixing the major causes of the disaster remains ‘unthinkable‘.
rwe2late, I'm sure you could have added more, and that you noticed the old game of trying to pit one group of people against another. One of the ways to keep the focus away from them, the root. Of course by simply removing the Cap, now and for the third year set at $106,800 the possible shortage vanishes, could be a surplus. But that too would just be grabbed and tossed into "General Funds".
<<<
In 2010, the Social Security Wage Base is $106,800 and the Social Security tax rate is 6.20% paid by the employee and 6.20% paid by the employer. A person with $10,000 of gross income will have $620.00 withheld as Social Security tax from his check, with the employer sending an additional $620.00. A person with $110,000 of gross income in 2010 incurs Social Security tax of $6,621.60 (resulting in an effective rate of approximately 6% - the rate is lower because the income is more than the 2010 "wage base", see below), with $6,621.60 paid by the employer. A person earning a million dollars in wages will pay the same $6,621.60 in Social Security tax (resulting in an effective rate of approximately 0.66%), with similar employer matching. >>>
One more paste. I have posted this before. The biggest Creditor of US Debt isn't China or Japan, its Social Security. In fact more than half the Debt is Internal, and shouldn't be that big a problem, especially how easily Computerized Bazillions are tossed around internally, even losing a couple Trillion never got this much attention...paste:
Many people — politicians and pundits alike — prattle on that China and, to a lesser extent Japan, own most of America's $14.3 trillion in government debt.
But there's one little problem with that conventional wisdom:
it's just not true. While the Chinese, Japanese and plenty of other foreigners own substantial amounts, it's really Americans who hold most of America's debt.
Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:
So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.
hmmm..thats only 75.7&, wheres the rest of it?
Thanks for sharing your facts. I agree that you must repeat this over and over again. Individuals like you are a rarity, that's those who understand facts and can interpret data stats to derive at the truth on their own.
A little documentation for your case rwe2late:
25 Big Corp CEOs Made More Than Their Companies Paid in Federal TaxesIn case you doubted that America needs more progressive taxation, the case in its favor has just been made in a study, “Executive Excess 2011: The Massive CEO Rewards for Tax Dodging,” by the Institute of Policy Studies (hat tip readers aet and Vlad via the International Business Times). The report found that the CEOs of 25 major companies paid themselves more than their companies paid in Federal income taxes. Exhibit 1 on page 31 names and shames them (well, assuming they are capable of shame), and they include John J. Donahoe of eBay, Robert Coury of Mylan Labs, Jeff Immelt of GE, and Robert Kelly of Bank of New York. The New York Times article on the report elicited some not-convincing rebuttals.
http://www.nakedcapitalism.com/2011/08/25-big-corp-ceos-made-more-than-their-companies-paid-in-federal-taxes.html