Why Social Security Cuts Are Inevitable

For decades, people have predicted that Social Security won't be able to meet the demands of an aging population without cuts in benefits. But now that those pessimistic calls have become the majority view, it has paradoxically become easier for lawmakers and other government officials to consider making those cuts, thereby turning dire predictions into self-fulfilling prophecies.

Confidence in Social Security is falling
The recent Retirement Confidence Survey from the Employee Benefits Research Institute examined a number of the financial aspects involved with retirement issues. One area of the survey focused on attitudes that workers and retirees have about Social Security and Medicare.

The results of the survey show that opinions of the health of entitlement programs are at their most pessimistic levels in 15 years. Asked how confident they are that Social Security will provide them with equally valuable benefits as it provides them today, 41% said they were not at all confident, with another 28% claiming they were not too confident. Only 5% said they were very confident that Social Security could continue at current levels.

Even more alarming, more than one in five respondents said that they didn't expect Social Security to be a source of income at all when they reached retirement. On the other hand, a rise in those expecting Social Security to be their major source of income isn't necessarily good news either, as it reflects trends that have left workers increasingly reliant on government programs to replace the substantial reduction in employer-provided pension benefits that's been occurring gradually for decades. Decisions in the past year from General Motors (NYSE: GM  ) and Verizon (NYSE: VZ  ) to outsource their pension liabilities to insurance giant Prudential (NYSE: PRU  ) mark just the latest in a long series of moves that employers have made to reduce their exposure to the risks involved with providing employee pensions, and newer employees at most companies don't have any access to a traditional pension plan at all.

Medicare is equally endangered
Survey respondents weren't any more confident about Medicare, with 32% feeling not too confident in its prospects for maintaining current benefit levels for their retirement, and 37% being not at all confident of Medicare's prospects. The latter figure is the worst showing since 1996, with only 6% feeling very confident about Medicare sustaining current benefits.

Even current retirees aren't very confident about Medicare's chances of surviving in its current form. A majority, 56%, of retirees are not at all confident or not too confident of Medicare's ability to keep current levels of benefits. Recent threats of cuts to Medicare Advantage plan reimbursements have greatly affected health-insurance companies UnitedHealth (NYSE: UNH  ) and Humana (NYSE: HUM  ) , and with the ongoing need for federal-budget cost-control measures, similar cuts could pop up at any time.

When cuts become politically expedient
Clearly, the EBRI survey reflects the informed views of people who stand to gain or lose a great deal depending on the fate of Social Security and Medicare. But the attitudes that the survey reveals also point to a growing acceptance of the future need for entitlement-program cuts, and that acceptance in itself will make it politically easier for policymakers to make those cuts.

Hoping for outright support among voters for entitlement changes that will hurt them may be unrealistic, but these survey results suggest that voters might well end up resigned to the necessity of cuts after only a token fight. Recent proposals that call for cuts to take effect not on current retirees or near-retirees but rather on those a decade or further away from retirement show the beginning of a movement toward breaking the general public into groups of haves and have-nots, effectively taking advantage of attitudes that generally become even more pessimistic for younger demographic groups.

Be ready for anything
Workers used to be able to rely on three financial support mechanisms in retirement: personal savings, employer pensions, and government entitlement programs. With employer pensions becoming a thing of the past and Social Security and Medicare under siege, you're more on your own than ever in securing your retirement future.

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  • Report this Comment On March 30, 2013, at 11:52 AM, sdchanman wrote:

    Cool so the propaganda worked. Gobles would be proud.

  • Report this Comment On March 30, 2013, at 11:54 AM, ADrolson wrote:

    if there isn't any social security like it is there won't be any more united states. they can fix what ever is wrong and they better do it.

  • Report this Comment On March 30, 2013, at 11:55 AM, 123dlsmith38 wrote:

    I guess people don't pay attention to what economist say and only listen to false news.

    Even though Social Security is not a lot to live on, it provides a valuable benefit, and most economists I've heard talk about the survivability of SS have said that it really ISN'T in danger and very little would have to be done to fix it.

    And for many Americans SS is the best choice as you can lose almost ALL of your retirement via investing, even through IRAs, and supposed company pensions which mean nothing if the company goes through bankruptcy.

    If you can't afford to lose the dollar you invest, then you can't afford that investment, period.

  • Report this Comment On March 30, 2013, at 11:56 AM, tim42358 wrote:

    The third rail! This is inevitable. The formula has to be modified and the concept has to be reexamined. The productivity of the past 50 years is shifted. The benefits of the new economic realities are shifting. So...even with the inevitable changes we will see a great return for our investment. It's our kids I worry about and warn!!

  • Report this Comment On March 30, 2013, at 11:58 AM, micah1982 wrote:

    So why are we even paying into this if the government is taking away from those who have paid?? Oh ok its the greedy government, I forgot. So they are paying out 40 billion a month in bonds was it? I don't remember, but why could they not put that money into the SS system? if they did that then they would actually be providing security.

  • Report this Comment On March 30, 2013, at 12:04 PM, djrichard wrote:

    Ask yourself, who benefits if Social Security benefits are cut. There'll be winners. And it's those potential winners that are behind this campaign of manufacturing inevitability.

    Just like we should have done with the Iraq war. Remember when that was sold as being inevitable? There were winners in the US going to war and they were behind the campaign to manufacture that inevitability.

  • Report this Comment On March 30, 2013, at 12:06 PM, mimad wrote:

    This article is just another ploy to get people used to the idea that there will no longer be social security or Medicare when they need to retire. It can be fixed to be there, we know how to fix it, and it must be there, or there will be a lot of old, sick people begging in the streets in the future. They have taken away the unions, the pensions, and any reasonable means of having any savings, and now they want to take away an insurance program that will be about all many oldsters will have to live on! Don't fall for this bologna people, and speak up!

  • Report this Comment On March 30, 2013, at 12:08 PM, ArnieSchmautz2 wrote:

    I am tired of social security, madicare & medicade being called entitlement programs as if people were mooching off the government. Every time I see my pay stubb it looks to me like I am paying a damned lot of money for these programs. The real moochers are large coporations getting unneeded tax breaks and subsidies. Why don't the cuts start there. OH! I know because big corporation elect our congress.

  • Report this Comment On March 30, 2013, at 12:11 PM, aceventure wrote:

    How the congress repay social security all the money they have BORROWED !!!!!!!!! That should make it last for ever.

    Have you asked that question to your reps and senators????? Keep asking them at least once a week, maybe it would get some action.......

  • Report this Comment On March 30, 2013, at 12:17 PM, MadMike66 wrote:

    Well, Arnie you and I think like but that's were we are different then too many people now a days. The corporation are not the problem when it come to SS, Medicare, and Medicade. Their are too many lazy people who are draining those systems needlessly especially legal people who have never paid into any of those systems and never will. Those program have become entitlements because people have become dependent on them for everything they need in life which was never the intent pf any of these program. If we had proper reforms in place like in SS, Medicare, and Medicaid not to mention election finance we would be better off.

  • Report this Comment On March 30, 2013, at 12:22 PM, radtech3 wrote:

    One solution would be to raise the income cap of $113,700 on which Social Security tax is paid. That's right, none of the money anyone makes over that figure is taxed for Social Security.

  • Report this Comment On March 30, 2013, at 12:33 PM, ted197676 wrote:

    I guess this means I can stop paying into these programs now. Too bad they didn't tell me this in the first 35 years of working. I could have put all that ss & mc money into an interest bearing bond or fund. I'd have alot more money at retirement it I had started back in '72.

  • Report this Comment On March 30, 2013, at 12:33 PM, tom474e wrote:

    SS is not an entitlement program, its funded by the money we put into it.

  • Report this Comment On March 30, 2013, at 12:51 PM, wmvernay wrote:

    It's time for Govt pension cuts to take a turn. They keep getting theirs at our expense, but we are expected to live with ours being reduced further. Nonsense!

  • Report this Comment On March 30, 2013, at 12:57 PM, uglykidjoe wrote:

    foolish readers? from what i've read here their closer to low information readers.

    first, there is no legal mandate that the federal government even pay you social security, it's a fact, and it's the law. for doubters, google is your friend.

    social security is about as close as you can get to a legalized ponzi scheme and unfortunately the pyramid is inverted. due to declining birth rates, there are fewer and fewer coming into the workforce to pay into s.s., those receiving benefits now outnumber those who are contributing, the result being that the government has to subsidize it.

    this leaves the government with 5 options, 1) tax you more to pay for it, 2) print more money, 3) not pay you, or 4) do nothing, and lastly, 5) revise how it works. 1 and 2 are generally how liberals approach the problem, but are not sustainable. the most unlikely scenario, 3, would likely result in citizens revolting. 4) has been what the government has typically done (with 1 & 2 added on occasion to give the appearence of working towards a solution). so were left with 5, which is what conservtives have been promoting all along.

  • Report this Comment On March 30, 2013, at 12:57 PM, BeaPepper wrote:

    How about Social Security stop paying out disability to people who aren't truly totally disabled. I see way too many people in their 30's and 40's who have subjective ailments that are getting disability. They allegedly can't work, but they can go hunting, fishing, camping, and walk around the mall day, but can't work. Yet, I knew a young woman dying cancer that was denied because she hadn't paid in enough. The disability SS disability system is broken. I'm for cutting these Social Security benefits, not the retirement benefits. The older folks paid into the system. Their benefits are not "entitlements"

  • Report this Comment On March 30, 2013, at 1:00 PM, jcmsoh870 wrote:

    All the money our cost cutters have sent off shore that could for Jobs and to make the USA a great place.

    SSA could have been ok. 6 billion here 500 million here

    would made social security solvent .

    I think we need lawmaker that can add sub and divided.

  • Report this Comment On March 30, 2013, at 1:03 PM, caleconwriter wrote:

    I'm with sdchanman below. For future references, though, it was Goebbels who gave us the Big Lie theory. In the US, the Biggest Lie has been that Wall Street is better trusted with retirees' money than Social Security. The Enron investors, some of them about to retire, sure believed it!

  • Report this Comment On March 30, 2013, at 1:10 PM, sdnative1966 wrote:

    so all those years of raping the system for the star wars program and other military toy projects brook the system?. well I me shocked.! after all that is what it was designed for right? NO? oh so does this mean the government is going to pay me back with interest the money they stole? will I ever see any of the money I put into the program so I can invest it how I want? will the government agency who stole this money be prosecuted.. Oh wait! what was I thinking, I for got this is America. we bail out the rich and screw over the middle class. Reaganomics at its best. If only I was one of the 2% on the government welfare bailout program I could take the Billions of dollars and offshore it in a little bank for my retirement.

  • Report this Comment On March 30, 2013, at 1:14 PM, simjam wrote:

    The author is a tool of the financial services industry. The key issue is the growing income gap.

  • Report this Comment On March 30, 2013, at 1:31 PM, quittalking wrote:

    Although some people are using the system "disability" most are not . Do you know how hard it is to get disability? I broke my back and been in pain ever since took me over 3 years to get it. Cannot walk more than a block without hurting to the point of crying . Also I have to sleep on a memory foam bed to get relief and most time that don't help .Some days I can do some things like blowing leaves,but pay a price with pain .Have allergies so only thing I can take is pain pills which are not helping now . Dr. wanted to put a pain pump in me but didn't want it.

    Just wanted to let , BeaPepper most of us need disability to live on . I was on workmans comp for 5 years before they made me settle by quit paying me. That is when I had to go to SS.

  • Report this Comment On March 30, 2013, at 1:49 PM, Boomer57 wrote:

    Social Security can fund itself if the Federal Government would pay back the money they borrowed to balance the budgets for the Reagan, Bush Senior, and Clinton administrations.

  • Report this Comment On March 30, 2013, at 1:51 PM, us54985312 wrote:

    Entitlements, this term is used by politicians because thats what they use it to borrow money when they need a few hundred million. Where did this money come from? If you work look on your paycheck and you will see where it came from. Your employer also contributes a matching amount. If you have worked 7 years go to social security.gov and sign in to see how much you have paid into the system.

  • Report this Comment On March 30, 2013, at 1:51 PM, waveslide wrote:

    What a craptastic self-serving article this is! Cuts are inevitable because some people have lost faith in the system during the worst financial crisis in our lifetime, so you need to invest through Motley Fool. With some minor tweaks to how benefits are paid out and a rise in the income cap on FICA withholding, Social Security could meet its promise indefinitely. Beware the person who points out a problem to you and then promises to fix it with something they are selling. I thought Motley Fool had higher standards.

  • Report this Comment On March 30, 2013, at 2:16 PM, xzimppledink wrote:

    For months before the invasion of Iraq we were bombarded with this kind of phoney propaganda, weapons of mass destruction, which turned out false after several trillion dollars were spent enriching the 2%, and at the cost of thousands of our kids. Now the paper pushers want a cut out of our medicare and social security funds, they salivate at the prospects of cutting themselves into this huge cash flow. Their intent is to rake in billions in "handling fees", we don't need them. Look at your bank account interest, that's what you will be living on with a privatized pension, 0.05%. Like the song says "one thin dime won't even shine your shoes".

  • Report this Comment On March 30, 2013, at 2:29 PM, Stevie54 wrote:

    The government can pay people the Social Security they have paid into and deserve to receive or pay to keep them in prison. I personally refuse to get screwed; I'll rob a bank before I let the government show me to the curb.

  • Report this Comment On March 30, 2013, at 2:41 PM, LilyMarlena wrote:

    Why don't they lift the Social Security payroll tax cap (it's somewhere around $105k)? Talk about a regressive tax! Why should the middle and low class be burdened. How much would that help things? This is something I rarely hear mentioned.

  • Report this Comment On March 30, 2013, at 2:43 PM, dissapointed2013 wrote:

    if they want to make cuts to cut social security I want ALL of my money back that I paid in the last 40 years....and I mean every last penny!!!!!!!!!!!!!!!!!!!!!......Angry American Tax Payer.

  • Report this Comment On March 30, 2013, at 2:48 PM, gistanleyjr wrote:

    This whole article and UR readers are all 26 year old knowitalls. What would U expect them to say? Social security unchanged WILL NOT GO BANKRUPT UNTIL 2030. AS A 65 YEAR OLD, I PAYED FOR MY PARENTS SSI, AND NOW U GUYS WANT TO CHANGE THE GAME. Could it be that you don't want the Baby Boomers to enjoy whatever time we have left on the planet? Of course U don't. UR generation only thinks about U. Motley Fools, I have forgotten more than UR spokespersons know about the MARKET. I have invested since 1993 and took $30,000 to way more than that.

  • Report this Comment On March 30, 2013, at 2:50 PM, jokerjones69 wrote:

    Yes , I can really see how blasting people and probes to the far reaches of space is much more important than making sure disabled and retired Americans have something to rely on . It is nice know where priorities lie when it comes to spending the People's money ! So glad that we can afford Billions in foreign aid and support playing with remote controlled robots on Mars , snapping up close pictures of Saturn's moons and stuff . Those things are definitely more important than making sure my grandfather has a roof over his head .

  • Report this Comment On March 30, 2013, at 2:51 PM, AbuRas wrote:

    Why doesn't the government put back the money they "borrowed" from Social Security. The president , who seems to know a lot about nothing, screwed up health care. He can please leave his hands out of Social Security.

  • Report this Comment On March 30, 2013, at 2:55 PM, greyhound44 wrote:

    The Congressional Research Service concluded not long ago that if the FICA "Caps" (taxable earnings base) on SS were removed that the SS "Trust Fund" would be solvent for 70 years without an increase in the tax rate nor a reduction in benefits.

    Seems the ultimate no-brainer imhPo.

    ret expat MD

  • Report this Comment On March 30, 2013, at 3:02 PM, spkavyo wrote:

    The Republicans have been sowing doubt about the long term health of Social Security and Medicare from the inception of the programs. All it will take is some small changes to the cap on Social Security contributions and maybe a small increase in payroll deduction percentage to fix Social Security for the long term. Medicare does not need to be as expensive as it is for the government. Bargaining for better prescription drug prices, and changes in the way providers are paid for services can fix the current problems. Anyone who tells you these programs cannot be saved is lying, and just wants to destroy these two American treasures.

  • Report this Comment On March 30, 2013, at 3:05 PM, clamfart wrote:

    you can bet your arse our legislature isn't going to get any of their benefits cut. quite the contrary increases all around. vote the sobs out next time and get the new people to cut the benefits of past legislatures.

  • Report this Comment On March 30, 2013, at 3:17 PM, EmilyGoodall wrote:

    I'm not sure who the Government thinks it's kidding. SS coffers were pilfered long ago by misguided politicians with dishonest intentions. Meanwhile, honest workers have been contributing to this retirement fund over an entire lifetime . . . only to find that there's no money left? The U.S. Uncle Sam, you'll find, is no relation, and the Government is a separate entity unto itself that does not represent the interests of Americans in general.

  • Report this Comment On March 30, 2013, at 3:17 PM, WhyoBill wrote:

    If we were to return SS to be a stand alone entity, as it was prior to Lyndon Johnson, they would have more money than they knew what to do with. Just as they did prior to Lyndon Johnson.

    Actually, the quickest way to fix SS would be to put Congress Members on it!

  • Report this Comment On March 30, 2013, at 3:20 PM, gistanleyjr wrote:

    U just got a SSI payroll freebe for what 2-3 years. What happened during that time. My SSI contributions kept SSI afloat, while U guys paid $0.

    George Stanley, BS Microbiology Penn State; MS Microbiology Ohio State; MBA Fresno State

  • Report this Comment On March 30, 2013, at 3:23 PM, n10sfi wrote:

    There's no reason to cut Social Security payments.

    Take the earnings cap off, tax ALL income, earned and unearned (like capital gains, dividends, etc.) at the current rate and there'll be plenty. Enough, in fact, that no one will have to live at or near poverty levels when they do retire or have to go on disability.

    Start paying women equally to men and women won't end up at the bottom of the benefits rung at the end of their lives.

    What a crock this whole thing has become. The largest generation in the country's history is now reaching retirement age and the two generations they spent their lives supporting are now trying to take their hard-earned retirement away. This is disgusting.

  • Report this Comment On March 30, 2013, at 3:31 PM, n10sfi wrote:

    Tie Congressional retirement plans directly to the pitiful amounts working citizens receive and watch the system change for the better.

  • Report this Comment On March 30, 2013, at 3:31 PM, batman9999 wrote:

    Wall St. is salivating at the prospect of privatizing Social Security. Lots of commissions giving people useless investment advice.

    Bailouts at your expense simply aren't enough.

  • Report this Comment On March 30, 2013, at 4:07 PM, rkausch wrote:

    I receive SS for several years as the only income.

    I also like to mention the SS is payed by us and should not be tatched and spend by our government. All SS receiveres worked for 50+ years and paid from their paycheck. SS is not an entitlement it is our money, don't tatch this in any way shape or form. SS is paid by us until 2033.

    Washington take your wastefull hand from our paid money

    R.K.

  • Report this Comment On March 30, 2013, at 4:20 PM, Nylonsrox wrote:

    Obamacare is in more trouble than S.S.---at least people pay into that system---Obozocare is completed underfunded and will destroy health care for all----Yeaaaaaaaah.

  • Report this Comment On March 30, 2013, at 4:26 PM, sb3445 wrote:

    "now that those pessimistic calls have become the majority view, it has paradoxically become easier for lawmakers and other government officials to consider making those cuts"

    This is honestly the most rididulous comment I have ever read. To blame self fulfilling prohecy is the reason for social security cuts is foolish - when in reality - the cuts are being done because there is no money. Nothing like some writer who likes to put a spin on the truth. Right Dan Caplinger?

  • Report this Comment On March 30, 2013, at 4:33 PM, Lilmike11 wrote:

    I cannot believe that so many people believe this nonsence. If they will leave the SS coffers alone , it will be fine. Just quit "borrowing" from the fund. I get my little bit and it is how i survive. Without it, where would I be. I am too American to get any other help. And I agree with the one that said to take the caps off the taxable income. Pay on ALL income if you plan on receiving it. But also, why does a millionare need to draw it anyway. Why should Donald Trump bother with SS or Medicare, even if he did pay into it? GREED!! that is why. I know that if I had millions, I would gladly pass on it.

  • Report this Comment On March 30, 2013, at 4:48 PM, rrc1049 wrote:

    The Media is complicit in hiding the fact that our systemically corrupt system of government has been raiding, stealing and borrowing the money from Social Security for 50 + years. We live in a country that is so controlled by corporations and is so corrupt we should be called U.S.A. INC. I think it is time for blood in the streets!

  • Report this Comment On March 30, 2013, at 5:04 PM, Yourethefools2 wrote:

    This is exactly the kind of article that perpetuates the myths about Social Security so that people believe that it doesn't and won't work - also Medicare. You absolutely lie when you say you are "spin-free". You are obviously all about crooked financial spin!! Social Security is solvent, does not contribute to the deficit, would be in even better shape if financial crooks hadn't robbed it, and could go on for the indefinite future if we only raised the salary cap (of course you idiots have to quit sending jobs overseas) - trust me, those rich folks still collect SS and work their finances around so that they don't even have to pay taxes.

    You even make someone who just wants to comment sign up for your "spin-free" info. What a joke. You truly are fools. Also, I don't want your emails, ever!!

  • Report this Comment On March 30, 2013, at 5:08 PM, CONGRESSWHJOKE wrote:

    I have paid into SS for 47 years and am now 6 years away from retirement. Key is that I, along with millions of other hard working Americans, have paid into SS for decades based on the belief that we would have it for our golden years. Now we are told our elected leaders consider it an entitlement, how convenient. Another funding source for their "sharing the wealth" policy! Control and reduce payments to those who have not earned it, to the fakers and scammers! If our politicians want to end SS, then give me my contribution back and I will invest it myself! I don't need a bunch of golden spooned politicians jacking up my retirement!

  • Report this Comment On March 30, 2013, at 5:11 PM, unclebudd wrote:

    Leave our ss. alone . Keep your hand off. Becaude of the pass preidents and the senate and congress, is why we are in the shape were in. VOTE them out next election. Obama care to. That obama caree is the worst insurance plan ever. The people that don:t work get it for free, when the people that do work has to pay. Vote obama and obama care out. don;t vote demacrates in again.

  • Report this Comment On March 30, 2013, at 5:20 PM, Yourethefools2 wrote:

    One more thing. I absolutely agree that SS and Medicare are miscalled "entitlement" programs. These are earned benefit programs. I have paid into SS since 1962 when I started working and into Medicare since it was created in 1963. I have worked all my life and contributed to these and have, therefore, counted on them. I earned them and was promised they would be there as I had no choice in payroll deductions. Another thing, Medicare is proven to work more efficiently costwise than private insurers. Again, this desire to privatize is all about corporate greed.

    I don't suppose you will pay any attention to the fact that the vast majority of your comments here call your article foolish. I call it criminally foolish.

  • Report this Comment On March 30, 2013, at 6:13 PM, tpryslak wrote:

    Let's be serious! SS doesn't have to go under if idiots will comprimise immediately - to satisfy the repubs, reduce the SS tax rate 10% from 6.2% to 5.7%. Then increase the cap from the current cap of $113,000 to NO cap! We'll have a 100 years of no problems and everyone pays their fair share! Come on guys, its a NO brainer even fro Ryan and Bonehead as well as McConnell and the Dems. Let's get on with some more of the critical problems. tom

  • Report this Comment On March 30, 2013, at 6:39 PM, herky46q wrote:

    TMF's Morgan Housel already wrote about how to keep Social Security solvent indefinitely. Back off already.

  • Report this Comment On March 30, 2013, at 6:59 PM, Jazz92 wrote:

    Seniors have paid for their benefits all their lives! And even when they get to be 65 they still have to pay premuim for their Medicare that only covers 80% of their HOSPITAL BILLS AND DOCTOR BILLS! this maybe something that most people may not know! Most have other insurance policies to pay for the other 20% that MEDICARE DOES NOT PAY!! So seniors do help pay their Medicare cost! NOW this is not including all the money they paid the government over all the years they have worked!

  • Report this Comment On March 30, 2013, at 7:22 PM, dcfoolz wrote:

    Dear Mr. Caplinger.

    Your profile says, "Dan has a healthy skepticism of the mainstream financial industry." How sad that you are merely a parrot for the Mainstream Financial Industry. If America wants to "fix" Social Security, it can. There are several thoughtful ideas which will make SS financially stable for many decades to come without cutting benefits.

    See: http://www.fpanet.org/ToolsResources/SocialSecurityPredictor...

    These "solutions" are basically: raise the income cap above the $110K level and/or increase payroll taxes a small amount (2% in this reference).

    As you should be aware, a huge portion of Social Security beneficiaries rely on SS for all or the majority of their retirement income. In the aftermath of the Financial Collapse of 2009 and its knock-on effects, we have seen a weakening of the financial/retirement security for many middle- and lower-middle-class Americans.

    If Americans can awaken themselves to the cruel lies regarding Social Security coming from Right Wing political rhetoric and co-conspirators in the "mainstream financial industry," our country can begin to have a reasonable discussion about how to help our aging, financially weakened Boomers make it through the remainder of their lives using a strengthened Social Security.

    I am surprised the MF editors published your doomsday rubbish. It was not novel (as most mainstream media has had numerous similar articles) and was not in keeping with providing helpful investment advice. I suppose the only positive for MF is that you've gotten many blog responses. A sad metric for determining which article to publish.

  • Report this Comment On March 30, 2013, at 8:06 PM, seabee1524 wrote:

    EVERYONE has been telling the TOOLS in Washington this has been rolling down the road for at least 20 years or more but they are more interested in their next election. The longer they put this off the more it hurts everyone affected. Even now they choke at the thought of increasing the age, raising the tax and taking off the cap. It looks like they will only be happy when everyone must take a 30 to 40 percent cut. They are pathetic to say the least.

  • Report this Comment On March 30, 2013, at 9:13 PM, TMFGalagan wrote:

    @dcfoolz - Thanks for your comment. But the FPA link you provide supports my point, as it advances ideas like reducing the cost of living adjustment and raising the retirement age, as well as specifically suggesting reduced benefits as an important component of keeping Social Security viable.

    In any event, my point isn't that Social Security *couldn't* be saved - only that it won't be. The more people believe that they'll have to accept less from Social Security, the easier it will be for future cuts to become reality.

    best,

    dan (TMF Galagan)

  • Report this Comment On March 30, 2013, at 9:31 PM, Subusch wrote:

    I want our (we the people's) government to lead by example and change their benefits by taking cuts as we have had to make many changes and concessions over many decades, theirs only seem to get better....does this seem wrong to anyone?

    The only people that are apparently entitled are people not paying into it, I call it a benefit ... If I have paid into it I expect it (as small as it might be) I should be receiving at least what I put in?

    There is no way to change our corrupted government if we are not the ones to make the changes...

  • Report this Comment On March 30, 2013, at 9:47 PM, leerich1 wrote:

    Social Security and Medicare

    I have paid into SS/Medicare for 45 years. I would like to think that it is owed to me when I retire – unfortunately it has already been spent on people who got SS benefits while I was paying. According to the Supreme Court we who paid into it are not entitled to any payback of those amounts. – all we have is a intergenerational “promise” by politicians that we will get benefits when we retire.

    Now they have already spent all the funds (thank LBJ –Democrat) and in 2018 will have to raise income taxes to pay back the Trust Funds IOU’s just to continue paying benefits until 2036 then there will only be enough in SS to pay 76% of the expected benefit and income taxes will have to be raised to pay the other 24% - and not long after these income taxes will have to go up even more to continue this “government Ponzi scheme”.

    We need to reform these programs in order for them to not go bankrupt – and we need to make sure they are available for future generations – even if that means we cut our own benefits some in order for this to happen. In my own opinion we should start transitioning to a “private pension plan for all Americans.

    The current unfunded liability of Social Security is about $11 trillion. That is the additional money needed to pay current promised benefits. By contrast, Medicare's unfunded liabilities are gargantuan, about $66 trillion. These programs will be bankrupt if we don’t change them. The longer we wait to fix these programs – the more harm will be done to beneficiaries as they will not have time to prepare for it. There used to be 16 workers to 1 retiree - today it is 3 to 1.

    SS Trustees estimated by 2018 benefits paid out would exceed amounts being paid in then the Trust Fund would have to cash in its IOU’s. The Trust Fund IOU’s would be used up by 2037 and then current funding would only cover 76% of the scheduled benefit. The 2010 SS Trustee annual checkup also said that the Medicare hospital insurance fund will now be exhausted in 2024.

    As there is no actual cash in these Trust Funds – starting in 2018 we will have to either raise income taxes or borrow the money to pay for the amounts that exceed the amounts paid in. The amounts needed will increase every year after 2018, as more people retire. And in 2024 when Medicare is bankrupt the amounts needed will boom. Our kids will be faced with gigantic tax increases and/or NO BENEFITS available when they retire. Our grandchildren will never get anything period for their lifetime contributions.

    Do we want to steal all of our kids future by forcing them to pay for benefits to us that we can’t afford???? These “ponzi schemes are bankrupt and we need to act now to transition away from this fiasco.

    Currently, employees and employers each pay 6.2% for SS and 1.45% for Medicare. Of the 6.2% - 5.3% SS and .9% SS Disability Fund. A change similar to the following needs to happen soon to alleviate the problem.

    1) For people under 50 today - start lowering their expected SS benefits; mandate that the 5.3% they currently pay for SS will go into a personal retirement account, whereas the employers share will continue to go into the SS Fund to pay current retirees. The .9% for the Disability Fund will continue as is.

    2) For people under 18 today most or all of their and their employers payments will go into a personal retirement fund

    Chile was able to do this over a 20 -30 year period and the citizens now get a greater amount for retirement then they would have by staying in the previous SS style government scheme.

  • Report this Comment On March 30, 2013, at 9:47 PM, leerich1 wrote:

    Facts About S/S and Medicare

    The Social Security Trust Funds

    Social Security has two trust funds, one for its retirement and survivors program, and one for its disability insurance. The formal name of the retirement and survivors trust fund is the Old-Age and Survivors Insurance trust fund, and it is often referred to as the OASI trust fund. The Disability Insurance trust fund is referred to as the DI trust fund.

    What About Medicare?

    Medicare is a federal program that helps to pay for older Americans health costs. Some people incorrectly consider Medicare to be part of the Social Security system because taxes that finance part of Medicare are lumped in with those that pay for Social Security. However, Medicare is also financed by premiums and general revenue, and is not administered by the Social Security Administration. For that reason, Medicare is not considered to be part of Social Security for the purposes of this paper.

    What About SSI?

    The Supplemental Security Income (SSI) program is not part of Social Security. SSI helps aged, blind, and disabled people who have little or no income. It provides cash to meet basic needs for food, clothing, and shelter. To get SSI, a worker must be 65 or older or blind or disabled. Even though the Social Security Administration administers SSI, the program is paid for with general tax revenues. No Social Security payroll taxes go to pay for SSI.

    In 1960, the Supreme Court ruled in Flemming v. Nestor that Americans have no property right to their Social Security benefits. Workers actually neither own nor have a legal right to their Social Security benefits. In fact, the Court has even said that Congress can end Social Security benefits at any time

    S/S Earnings limit, why it is there, and how it is increased

    In 2012, Social Security taxes are only collected on the first $106,800 that a worker earns. This figure is known as the earning limit and it changes each year. Social Security benefits are only paid on the amount of income that is taxed to pay for it. Thus, in Social Securitys eyes, both Michael Jordan and Bill Gates earn $106,800 a year regardless of their actual income.

    The earnings limit keeps Social Security from having to pay benefits on Bill Gates entire income. It allows the program to say that it covers all Americans without paying the very rich benefits that are much higher than those that go to average income workers. Every October, the Social Security calculates and announces the earnings limit for the following calendar year. The change in the earnings limit is based on the increase in both the cost of living and the average income

    As Section IV shows, the bonds/IOU’s in the trust fund can only be repaid through higher taxes, lowered benefits, reduced government spending on other programs, or borrowing. These special Treasury Bonds/IOU’s are non-Marketable only the Treasury Department can buy them back.

    The Treasury pays interest on these Bonds at whatever rate existed at the time they were issued. In addition the Income Tax that is paid on the 85% of S.S that is taxable (for couples with taxable incomes over $17000) is also credited to the SS Trust Fund. Treasury credits the SS Trust Fund and issues IOU’s for the total of the interest and the Income Tax on up to 85% of the SS Benefit.

    Once the trust fund has been repaid, the law requires Social Security to cut benefits by the same amount as its annual operating deficit.

    By waiting until 2041, taxpayers will have nothing to show for the $5.5 trillion that must be used to repay the trust fund. Facing a huge annual operating deficit, they will have few options other than reducing benefits or increasing taxes.

  • Report this Comment On March 30, 2013, at 9:48 PM, leerich1 wrote:

    Social Security Basics

    by The Heritage Foundation

    WebMemo #143

    Problem II - rates of return

    In addition to Social Security's impending financial problems, the program faces another problem that will be much harder to solve. Social Security is an extremely poor investment when one compares the amount of retirement taxes a worker pays over a career to the amount of retirement benefits that the worker will receive. It is especially bad for younger workers. A worker could earn a much higher retirement income by investing his or her taxes in government bonds or a portfolio of investments such as stock index funds.

    Comparing the total amount of Social Security retirement taxes paid over a working lifetime by a 30-year-old, two-earner couple who make average incomes (about $29,000 a year each) with the amount they will receive in benefits shows that they will earn the equivalent of only 1.23 percent (after inflation) a year. Over their lifetime, together they will pay a total of about $320,000 in Social Security retirement taxes (including both the employer and employee shares) and can expect to receive about $450,000 in total retirement benefits.

    If this same couple had been allowed to invest the same amount they paid in Social Security retirement taxes in a conservative portfolio of 50 percent super-safe U.S. Treasury bonds and 50 percent stock index funds, they could expect to have $975,000 at the time they retired--$525,000 more than they would get from Social Security. This equals a rate of return of 5 percent a year, which is over four times higher than they would get from Social Security.

    Rates of return are much worse for younger families. For instance, a married couple with two children and a single earner who was born in 1932 do fairly well, receiving 4.74 percent on their retirement taxes. However, the same type of family in which the earner was born in 1976 will receive less than 2.6 percent. Families with earners born after 1976 will receive even less.

    Single males do especially badly. An average-earning single male born after 1966 can expect to receive a rate of return after inflation of less than one-half of 1 percent on the Social Security retirement taxes that he pays.

    What About SSI?

    The Supplemental Security Income (SSI) program is not part of Social Security. SSI helps aged, blind, and disabled people who have little or no income. It provides cash to meet basic needs for food, clothing, and shelter. To get SSI, a worker must be 65 or older or blind or disabled. Even though the Social Security Administration administers SSI, the program is paid for with general tax revenues. No Social Security payroll taxes go to pay for SSI.

  • Report this Comment On March 30, 2013, at 9:52 PM, leerich1 wrote:

    The current unfunded liability of Social Security is about $11 trillion. That is the additional money needed to pay current promised benefits. By contrast, Medicare's unfunded liabilities are gargantuan, about $66 trillion. These programs will be bankrupt if we don’t change them.

    Almost all of our lives people have been told that they will get a SS benefit when they retire. The SS Administration even sent out SS Benefit statements which provided the following information:

    1) the amounts we paid into SS and our expected benefit based on current government law, “WHICH CONGRESS CAN CHANGE OR STOP AT ANY TIME”.

    2) Told us that SS was NEVER INTENDED to be the only source of income you would need for retirement.

    3) Told us that our SS payments were actually being used to fund “CURRENT RETIREES”, not being put into a retirement fund in our own name.

    4) Estimated by 2018 benefits paid out would exceed amounts being paid in then the Trust Fund would have to cash in its IOU. Unfortunately this means either higher Income Taxes or more borrowing or less benefits.

    5) Estimated that the Trust Fund would be used up by 2037 and then current funding would only cover 76% of the scheduled benefit.

    6) The 2010 SS Trustee annual checkup said that the Medicare hospital insurance fund will now be exhausted in 2024

    During the years you were told by some people (Al Gore, Harry Reid, Nancy Pelosi etc) that there was a SS “Lockbox’ which contained the SS “surplus” of special IOU’s that were accumulating interest, and there was “no problem” with SS.

    In 1937, FDR with filibuster-proof Progressive/Democrat majorities enacted SS with the following promises:

    1) Participation would be entirely voluntary.

    2) Participants would only have to pay 1% of the first $1,400 of their annual Incomes such amounts would be deductible from their income for tax purposes each year.

    3) the funds would be placed in a trust fund and never be used for any other purpose.

    4) the benefits would never be subject to Federal Income taxes.

    In 1965 LBJ and filibuster-proof Democrat majorities transferred all of the “SS cash surpluses into the General Fund and replaced them with IOU’s, and from that time on the surpluses were used to lower the amounts they showed as government deficits – and what this also meant was that the government would have to come up with the funds when these SS surpluses were needed – which they can only do from our TAXES or by BORROWING. They also created Medicare and Medicaid. – which are now the main threats to America’s financial prosperity.

    In 1972 Nixon and Democrat Majorities in both houses added S/S COLA’s that effectively indexed S/S benefits at twice the rate of inflation.

    In 1977, Carter and filibuster-proof Democrat majorities fixed the double indexing of SS benefits and raised the withholding rate from 2% to 6.15% (5.3% SS and .9% SS Disability Fund) and started giving SS benefits to immigrants.

    In 1984, Reagan (with a Democrat House and Republican Senate) enacted legislation that slowly increased the full retirement age from 65 to 67, and made up to 5o% of the Social Security benefit potentially taxable income for Federal Income Tax purposes. (For income over Singles 25,000 Joint 32,000). The income tax paid on the SS benefit goes into the SS Fund. In 1984, Members of Congress started paying into Social Security.

    These measures extended the life of the SS program – or it would probably already have been bankrupt.

    In 1993 Bill Clinton with Democrat majorities changed the portion of Social Security benefits potentially subject to tax to 85% beginning with the 1994 tax year and tied the Social Security & Medicare programs together. Now under that policy, any senior who withdraws from Medicare also loses Social Security benefits.

    In 1997 Bill Clinton and in 2000 George Bush wanted to put the SS “Surpluses” into private retirement accounts that YOU Would Own. Congressional Democrats said NO

  • Report this Comment On March 30, 2013, at 10:01 PM, JackGifford wrote:

    Dan- Why do you "go with the crowd" and refer to SS as an "entitlement program"? Also- publication of this survey's results with no indication of respondents' knowledge of the subject (fund balance, income, outgo, etc.) is meaningless.

    Footnote: I have been collecting SS benefits since retiring at age 65 (in 2005). I recently crunched all the numbers of my personal FICA contributions (1957-2004), expressed in today's dollars. It appears that I'll receive my first dollar of "entitlement" just after age 79, should I survive to that age.

  • Report this Comment On March 30, 2013, at 10:09 PM, leerich1 wrote:

    Progressive Programs always follow the same route. They offer benefits with little or no cost to a large segment of people, usually the lower and middle income groups. Later taxes have to be raised and benefits reduced because the program is unaffordable. Eventually they have problems getting enough extra in taxes from the higher income group and they have to tax the middle class more etc, they means-test who gets the benefit and tax the benefit - robbing the higher income groups who paid the most for it - and now get little or nothing for they higher payments. None of these programs ever get eliminated, even if unaffordable, they just go on bankrupting the nation. There is no way to transition to an affordable program because they wait too long to try to do it and they don't want to take the political risk for doing it. People lose their independence and freedom and become totally dependent on government. After the people get benefits, especially at little or no cost, they will riot to maintain them.Government borrows money until it can no longer do so

    All of this saps the strength of our productive sector, reduces the availability of jobs and result in a stagnant economy that eventually will collapse.

    Social Security, SS Disability, Medicare, Medicaid and now ObmaCare - is resulting in the loss of freedom, independence and motivation and things will continue to get worse UNTIL UNTIL ???

  • Report this Comment On March 30, 2013, at 10:48 PM, saltgrass wrote:

    Worth repeating...

    I am tired of social security, madicare & medicade being called entitlement programs as if people were mooching off the government. Every time I see my pay stub it looks to me like I am paying a damned lot of money for these programs. The real moochers are large corporations getting unneeded tax breaks and subsidies. Why don't the cuts start there. OH! I know because big corporation elect our congress.

    How about congress repay social security all the money they have borrowed....And quit giving billions in aid...

  • Report this Comment On March 30, 2013, at 11:04 PM, bugmenot wrote:

    Sooner or later the Liberal Agenda will result in a mini civil war. The American people will finally feel the pain of Democrat Party corruption that is giving money to their fat cat union supporters, Hollywood cocaine users, and terrorist governments. The news media will be attacked first with the NYT being destroyed. NBC, CBS, ABC, CNN reporters will be hunted as vermin. Then the Democrats begin to leave the country in mass before the people get the old tar and feathers from the wild west to treat the Obama Terrorists. Sarcasm or reality?

  • Report this Comment On March 30, 2013, at 11:05 PM, eviloldguy wrote:

    When I was in my thirties, a co-worker informed me that by the time I was eligible for Social Security that there would be no more Social Security. I've been drawing it now for two decades so I think is pessimism was somewhat misplaced.

  • Report this Comment On March 30, 2013, at 11:31 PM, neamakri wrote:

    Before year 2010 there were 4 workers supporting 1 retiree (4:1). Sometime after 2010 when Baby Boomers start retiring, the ratio will change to 3 workers per retiree (3:1). In order to keep the same pay-as-you-go system, each worker must contribute 33% more to cover the missing worker, or else each retiree must accept 25% less due to missing taxes...or some combination.

    SS currently suffers from two ailments. (1) the money is not invested in the private sector which is willing to pay more interest, and (2) government control.

    The country of Chili had the same sort of SS system we had. Over twenty years ago they privatized. Since then their economy has doubled its growth, and there are far fewer in poverty. It's all good. All we have to do is copy them!

  • Report this Comment On March 31, 2013, at 1:13 AM, fxman4u wrote:

    Its paid by employee and employer and stolen by the united states government If the government had left it alone all would be fine. Work save thrive not is work save have it given to illegals, welfare sucks, and crooked politicians

  • Report this Comment On March 31, 2013, at 1:14 AM, fxman4u wrote:

    No one wants to work

  • Report this Comment On March 31, 2013, at 1:15 AM, fxman4u wrote:

    I LOVE bugmenot

  • Report this Comment On March 31, 2013, at 1:16 AM, fxman4u wrote:

    I still work in Hollywood and its all bull@#$$ unions and crooks etc etc etc.

  • Report this Comment On March 31, 2013, at 2:01 AM, bjones506 wrote:

    Why does Social Security and Medicare get lumped in with Medicaid. They are not entitlement programs. We paid into them, they weren't handed to us. The government doesn't mind using the Social Security fund to finance wars like when President Johnson did for Viet Nam and other things. But I never heard of the money being replaced. If they had we wouldn't be in this situation.

  • Report this Comment On March 31, 2013, at 4:12 AM, spankleelee wrote:

    I disagree with the union comment. It's the unions that pay lobbyists in Washington to fight for workers rights. Without them, we will continue to lose all of our rights. And I mean every worker will. Not just union workers. Only problem is the companies have so many people convinced that unions are no longer needed and people listen and believe. As the unions shrink in size, so does the middle class. Research it, you'll see.

  • Report this Comment On March 31, 2013, at 5:20 AM, arizonacharlie wrote:

    I have yet to read a comment on the real reason why social security is broke, in 1964 in order to fund his great society LBJ was able to get access thru Congress to the social security fund. within a short time they had depleated social security and have taken 13 trillion dollars out since, if a private company had done this to employees pension fund the owner would be in prison.Congress has no idea how to run a country,thats why America as well as social security is broke.

  • Report this Comment On March 31, 2013, at 7:50 AM, livinaboard wrote:

    It only makes sense to kill SS so we can finance the over paid retiremement for our government officials

  • Report this Comment On March 31, 2013, at 8:02 AM, skypilot2005 wrote:

    Dan

    Thanks, for the article.

    Social Security and Medicare are taken from my pay. I don’t have a choice. I expect the promised payments and benefits. Future inflation, even if historically low, will decrease the value of those benefits enough as it is.

    But, isn’t Obama Care going to lower health care costs? Didn’t most “younger voters” vote for President Obama and the Democrats?

    When they “grow up” they will realize what it costs them. I say to them, “Good Luck.”

    It’s true that actions have consequences.

    In regard to the other topic in your article, a person must plan for retirement and the loss of wages. If not, they will lose many enjoyable options during retirement.

    Sky

    Not relying on politicians promises

  • Report this Comment On March 31, 2013, at 8:29 AM, iosax wrote:

    it's only gov propaganda who pushed the idea that ss is an "entitlement" program, akin to food stamps or welfare, when in fact is a trust fund paid for by american workers and employees and (allegedly) administered by gov.

    the same propaganda machine is spreading the rumor about ss going banckrupt and some americans started to believe this con. however, a lot of us think gov simply stole the money and will not change our opinion until we see the result of an independent audit of the ss trust fund (which actually never happened).

    simply put, why should we trust a government who spends 6 trillion dollars on a war started by haliburton and exxon then another 3 trillions to bailout some crooks on wall street and then tells us, sorry, but why do you feel "entitled" to those money you faithfully deposited all your life?

  • Report this Comment On March 31, 2013, at 9:14 AM, Grandpastu wrote:

    Social Security began its downfall when President Johnson opened the SS coffers to Congress in the early 60s. A law should be enacted to close the account to Congress so it will become solvent again, as it was before!

  • Report this Comment On March 31, 2013, at 9:18 AM, incinolet wrote:

    I've been at the same job the past 28yrs.,red-lined at my pay rate the past 12. Until the past 5 or 6 yrs. Thats when right on cue the County I work for jumped on the band wagon and began to plea poverty with the auto industry and wall street.The people at the top had the the problem in hand though thats why they make the big bucks right?Their solution was employee wage and benefit concessions.Then more.I feel badly for people forced to take furlough days then again my job is a 24/7 swing shift operation so I have to get up, get to work, put in a full shift then pay my employer for the opportunity to do so.Now the SS and Medicare that I have paid into since 1973 has vanished into oblivion which is where they prefer I go before trying to collect on it?Wow. This American dream I was sold is not what I envisioned when I signed up.

  • Report this Comment On March 31, 2013, at 1:54 PM, mandywho wrote:

    Congress has worked diligently for years to destroy the ss and medicare system - yet notice all their goodies that are in tact.

    Why do we keep voting these guys back in? - how retarded is the middle class in this country? Well, I say unless we stand TOGETHER the job on all of us will soon be finished.

  • Report this Comment On March 31, 2013, at 2:09 PM, applejack56 wrote:

    There is nothing wrong with Social Security.

    There are those who want the Government to cut it's

    social responsibilities in favor of paying out to the Military Industrial Complex. There are way too many people in this country who have nothing but their Social Security to live on. I look at it like this. If the government can afford $20 billion to build a new submarine or even more than that amount to build a new super carrier than the government can afford to keep Social Security, Medicare, Medicaid a live and solvent, and provide Healthcare for all of us. If national Healthcare is so bad then tell me why is it you never hear about the British, French, Swedes, Canadians, etc demanding their governments fix their health care programs? I do not seem to hear any of them demanding their governments give them a health care system like we have. We could have the best, but instead we have one of the worst.

  • Report this Comment On March 31, 2013, at 8:13 PM, dcfoolz wrote:

    Dear Mr. Caplinger.

    In response to your response, the FPA link offers several possible solutions to the SS dilemma, while you persist in promoting benefit cuts as the only answer. Are you a fatalist or are you part of the "problem?" By "problem," I mean that by repeating that cuts are the only solution, many people are influenced to believe that there is no other way except cuts. Do you want a "fix" to SS? Your earlier comments were neutral, merely stating that you don't believe a "fix" will be made.

    As you can see, I believe the business media is complicit in a great robbery and pauperization of the American people. Are you a "maker/taker" kind of guy? Or are you someone who cares about poverty among the elderly and who is a problem solver?

    .

  • Report this Comment On April 01, 2013, at 2:44 PM, watson14 wrote:

    Ummm, if money is so tight ..... why are we able to fight two wars on the other side of the world, build aircraft carriers for a couple billion every few years, Bush "misplaced" or lost 9 million in cash in Iraq - GO FIND IT !! Please don't whine about no money for Social Security - it's all going to corps and contractors.

  • Report this Comment On April 01, 2013, at 10:37 PM, TomBooker wrote:

    "The results of the survey show that opinions of the health of entitlement programs are at their most pessimistic levels in 15 years. Asked how confident they are that Social Security will provide them with equally valuable benefits as it provides them today, 41% said they were not at all confident, with another 28% claiming they were not too confident. Only 5% said they were very confident that Social Security could continue at current levels."

    I wonder if this dearth of barely marginal optimism is a result of fearmongering articles which reference surveys of people who lack even basic understanding of the System and the numbers involved in any retirement. (as clearly stated by the research, if one actually reads it.)

    The validity and significance of conclusions is specious, then is awarded the amplifier effect of reference.

    Over the past 10 years, we can find (10s) $trillions to save Iraq, save Afghanistan, save failed Banks (foreign and domestic) in direct and indirect costs... but nobody can come up with one positive idea to stabilize SS.

    Meanwhile, the investment/media community hyperventilates the lopsided compelling narrative to advance it, along with their own prospects.

    I wonder what the lopsided compelling narrative for that is?

    Either you die young as one of the Good Guys, or you live long enough to become one of the Bad Guys. ?

  • Report this Comment On April 05, 2013, at 12:55 PM, Pubablack wrote:

    Do not EVER call SS an entitlement program!

    I have paid into it from my first job at 16 years of age. I do think that the people that administer and make the SS laws should be paying SS.

    Let's talk about congressional pensions and the military trough.

  • Report this Comment On April 05, 2013, at 3:39 PM, rich34952 wrote:

    When the President George Bush and the Republican Party suggested that younger taxpayers be allowed to CHOOSE between paying into SS or a 401k, they were mocked by the Dems and the liberal media. We didn't have 401Ks when I began working after finishing high school, but if we did like we have today, with the same SS payroll deductions that I had made all my working life, I would have reaped a lot more than what I am receiving now and the future. Plus I would have had the option of a lump sum payment which would have been in the hundred of thousands of dollars. The Dems were the ones who removed the SS Trust Fund to the general fund, then passed a bill to tax SS payments according to income, now they want to mess with our health care which will bankrupt our country and redistribute income like good socialists like to do. God help and bless America until the 2014 and 2016 elections.

  • Report this Comment On April 05, 2013, at 6:32 PM, MCCrockett wrote:

    I'm not sure how meaningful some of these studies are.

    Had you asked me whether Social Security would be available when I retired, I would have said: "No." Retirement was 40 years in the future and, besides, most doctors in the military hospital where I was being treated thought that I wouldn't make it to my next birthday.

    The Veteran's Administration wasn't much more hopeful about me reaching retirement age even after my medical discharge.

    Of course, all of this occurred before Jimmy Carter had been elected and Social Security became defined as an "entitlement" program: a legal term coined during the Carter Administration.

    Since then politicians have been using the differences between the legal definition and common usage of "entitlement" to scare the American voter. Lost in the rhetoric is that Social Security is one of the few "entitlement" programs that is explicitly funded by tax revenues (FICA taxes).

    The fact that Congress spends the surplus FICA taxes that exceed current Social Security benefit obligations is another problem due to debt instead of revenue being transferred to the Social Security Trust Fund.

    I mean, who would want the Social Security Trust Fund to make informed decisions on how to invest the revenue to pay for future benefits when there are so many "pork barrel" projects that need funding?

  • Report this Comment On April 06, 2013, at 3:05 AM, pangloss888 wrote:

    The only sensible comments in this entire string are those made by leerich1, who seems to know what he/she is talking about. Just because we paid FICA and Medicare taxes (along with our employers) does not mean that these are not entitlement programs. The amounts paid in to medicare do not begin to cover the longterm costs of the program, which will go bust unless changes are made. Our payments into social security went to fund the retirement benefits of the previous generation, just as those made by today's young people will fund ours. Congress didn't steal the Social Security surplus but instead allowed the treasury to borrow it, secured by special interest bearing treasury securities, which became the "trust fund." Because current payments in, including interest on the trust fund debt, will be insufficient to pay the promised payouts to the baby boomers in their retirement, the trust fund securities will have to be used, a debt passed on to current taxpayers. When payment on those securities is exausted in about 2036, Social Security will be insolvent and unable to fully meet all then owed benefits. The only sensible way to prevent this is to modify the system by either increasing the payments in, raising the eligibiligy age, reducing the benefits, or some combination of these.

  • Report this Comment On April 06, 2013, at 7:16 AM, iosax wrote:

    pangloss888, exactly where did you get your data from?

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