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View Diary: Should Americans Forgive the $2.5 Trillion Borrowed From Social Security? (181 comments)

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  •  Not a practicing Economist (7+ / 0-)

    But it seems to me that all the "studies" and commissions that look at the "dire state" of Social Security never look past the year 2040. As a Boomer, I know why. Those of us in that demographic group, no matter how top notch our health is or will be will be - to put it indelicately - will be dropping like flies and becoming "no longer eligible for benefits" at a much faster rate the cadre of citizens in the age cohort right behind us (they used to be called the "Baby Bust" Generation).

    I contend that getting even a flawed, patchwork fix to pull the system past 2040 - a transaction tax on equity trading and dedicating 1/4 of the revenue to the Trust Fund as an example - completely eliminates the peril to the system. I would like to see more done than patchwork: the Financial Elites have gamed so much of our system that most personal savings for retirement has become simply money waiting to be stolen at some point before one of "us lesser mortals" plans on using it

    When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

    by Egalitare on Mon Dec 03, 2012 at 01:11:44 AM PST

    •  They also never tell us that fiat money is (2+ / 0-)
      Recommended by:
      kovie, truong son traveler

      infinite.

      How can you run out of it?  You can't.

    •  Yeah the models they use to forecast the program's (0+ / 0-)

      performance show what I call "a snake swallowing an elephant."  It's not a GOP reference.  It's the sheer volume of the baby boomer generation which will eventually taper off.  If the model is carried forward far enough it shows.  That's part of what was in the back of my mind about the $2.5 trillion.  It will continue to grow for a while too and it will help improve the capacity of the system to absorb the baby boomers.  It's probably not enough but it's far too much to let the vultures take it.  

      "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

      by leftreborn on Mon Dec 03, 2012 at 06:53:37 AM PST

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    •  It's really impossible and pointless (1+ / 0-)
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      leftreborn

      to predict what will happen beyond 30 years. Birth rates, workforce participation, economic activity and retiree health and economic needs will change in ways that we simply can't predict, such that things might be much worse than we predict by 2040, or much better. There's just no way to tell.

      What we CAN do, though, and I believe should do, is reform our social safety net system such that it won't really matter, by increasing, not decreasing benefits, and funding it by making our tax system more progressive. Sure, that'll cost the rich. But I fucking don't give a fucking damn about their fucking whinging.

      "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

      by kovie on Mon Dec 03, 2012 at 06:58:13 AM PST

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      •  Couple of funny anecdotes (3+ / 0-)
        Recommended by:
        kovie, blue muon, bewert

        Republicans in Congress were badgering Harry Reid about the need to reform Social Security because of some future disaster they were predicting.  They kept asking him when he was going to do something about it and finally he blurted out, "20 years from now."

        At the same time, Republicans were badgering Nancy Pelosi the same way.  After being asked over and over when she was going to do something about Social Security she blurted out, "Never.  Is that good enough for you?"  

        I don't know if these stories are true but they do make me laugh.

        "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

        by leftreborn on Mon Dec 03, 2012 at 08:51:36 AM PST

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        •  Even if the SSTF runs out of money in 20 years (1+ / 0-)
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          leftreborn

          if we don't make any changes to SS, no one's asking what happens after that. Does SS remain in permanent deficit, or are we talking 5, 10, 15 years of deficit, following by another 10-20 or more years of surplus due to more people working than retiring again, and if so, doesn't this suggest a financialization solution to SS's supposed "crisis" in 20 years that doesn't need to involve benefits cuts?

          Seriously, have these people never heard of future value amortization?

          Obviously, they have, because it's precisely what was used to justify supply-side tax cuts that would supposedly pay for themselves.

          "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

          by kovie on Mon Dec 03, 2012 at 09:21:40 AM PST

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        •  Just to add (0+ / 0-)

          It just occured to me that we could possibly avoid having the SSTF run out of money in 20 years merely by investing in the economy over that period to an extent and in a manner likely to generate sufficient extra payroll tax revenues to close that deficit, at present rates and with the cap continued to be adjusted upward according to present formulas and not otherwise lifted. And even if this won't be enough to completely avoid a future deficit, it's more than likely to push it well beyond 20 years. Why aren't Dems saying this?

          "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

          by kovie on Mon Dec 03, 2012 at 09:33:00 AM PST

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    •  Yep. I was born in 1951, so in 2040 I'll be (1+ / 0-)
      Recommended by:
      JeffW
      But it seems to me that all the "studies" and commissions that look at the "dire state" of Social Security never look past the year 2040.
      89 years old.  *I* expect to live that long, but many of my contemporaries can't.  Climate change will help; old people are more suseptible to heat exhaustion and other heat-related health problems.  Hmmmm..... Is that why the Rethuglicans are so reluctant to deal with climate change?  If so, 'Thugs, give it up; we've got enough lag in the system to get plenty hot in 2040 - 2060 even if we drop our carbon emissions to zero tomorrow.  

      Renewable energy brings national global security.     

      by Calamity Jean on Mon Dec 03, 2012 at 09:03:20 AM PST

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    •  Look at the Trustees low cost scenario (0+ / 0-)

      it stops at 2090. And the Trust Fund is not depleted.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Tue Dec 04, 2012 at 07:52:34 AM PST

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