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burning ss card
This was depressingly predictable now that the Social Security Trustees report it out. The media (that includes you, Kevin Drum) got this story all wrong. Let's just take Reuters for a typical example.
Aging baby boomers got some jolting news on Monday when the U.S. government said the Social Security retirement program is on track to go bankrupt three years earlier than expected if reforms are not made.
I think bankrupt doesn't mean what this reporter (well, any Social Security reporter) seems to think it means. It means out of money. Full stop. It does not mean that for a period of time that you've planned for, you're spending more than you take in. The federal government and particularly Social Security has this thing called a trust fund where there's savings. And then there's the part that after 2033, Social Security will still not be all out of money, (unless the Republicans and their Very Serious compatriots manage to succeed in killing it) and it will still be about to provide about 75 percent of benefits earned.
The baby boomers—those 78 million Americans born between 1946 and 1964—started retiring last year. With 10,000 of them expected to retire every day for the next 19 years, according to the Pew Research Center, they will increasingly strain Social Security.
Zombie lie alert! There are so many baby boomers retiring in the next two decades, they'll suck up all the money! Yeah, no. Let's go back to that trust fund and the $2.7 trillion surplus the program has (how come that never shows up in press reports in Social Security?) and the fact that the retirement of the baby boomers was planned for. Baby boomers retiring is not coming as a surprise to anyone. (Except Social Security Trustee and Koch-sponsored concern troll Charles Blahous, who screeches to Reuters, "Never since the 1983 reforms have we come as close to the point of trust-fund depletion as we are right now." Which also isn't true. In 1994 the trustees said it would happen in 2029.)

Then we get to the "fixes."

An alternative, in order to keep payments at 100 percent, would be to raise the payroll tax on employers and employees to 16.7 percent from its regular 12.4 percent rate.

Members of Congress also have mulled raising the retirement age or cutting some benefits to the wealthy. But no action is expected before the November elections.

You know what else is an alternative? Lifting the damned payroll tax cap, so that people making more than $110,000 annually have to payroll taxes on that income, too. People like, oh, say Mitt Romney, who made $27 million in 2010 and now pays exactly the same into Social Security as someone making $109,000. That has to end. Granted, old people wouldn't have to suffer a cut in benefits, put more "skin in the game," with that fix. Which is why the Very Serious People and their stenographers in the press seem to always ignore it.

Ironically, Reuters columnist Mark Miller warned his traditional media brethren about all of the pitfalls of reporting on Social Security that the Reuters report includes. Unfortunately, he penned his column too late to influence his Reuters coworker.

The sad part is, this kind of journalistic malpractice is the rule rather than the exception when it comes to Social Security. The way lies proliferate in these stories makes it almost as bad as the Iraq War reporting. It's the norm, as Columbia Journalism Review's Trudy Lieberman writes:

For nearly three years CJR has observed that much of the press has reported only one side of this story using “facts” that are misleading or flat-out wrong while ignoring others. Whatever the reason—ideology, poor understanding of how the program works, gullibility, or plain old reportorial laziness—news outlets have given the public a skewed picture of the financial health of this hugely important program, which is the sole source of retirement funds for millions of Americans and will continue to be for decades to come.
That skewed picture of Social Security is exactly what the Right has been working on for years and years. The only way they can finally kill this very popular program is to make people think it's doomed. The stenographers in the traditional media are only too happy to help them send that message. And the Very Serious People parrot whatever they read in the "real" news and here we are. Supposed "liberals" are joining the gloom and doom pain caucus.

Originally posted to Joan McCarter on Tue Apr 24, 2012 at 02:48 PM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Right and here's what I am posting on Facebook (14+ / 0-)

    antidote to the rw propaganda about SS...

    from Reuters

    Is Social Security really "exhausted?"
    Not at all

    Tue Apr 24, 2012 1:49pm EDT

    By Mark Miller

    •  Forgot to thank you for the link, (3+ / 0-)
      Recommended by:
      Joan McCarter, dewley notid, whaddaya

       one of my former students has already been posting all the msm crap.

    •  These vultures own much of the media, (1+ / 0-)
      Recommended by:
      Matt Z

      and make up their own facts.

    •  The SS report is very skewed.... (1+ / 0-)
      Recommended by:
      NonnyO

      Their projection for running out of money in 2033 depends on a 6.5% unemployment rate continuing to 2033, on wage growth continuing to be stagnant until 2033 growing inflation adjusted at about 0.5%, depends on almost no immigration and continued stagnant fertility rates.

      ALL of these assumptions are patently absurd.

      1. unemployment will go down heavily as more people retire, this will be unavoidable moving passed 2020 as retirement rates swing upwards. Also their are many delaying retirement atm which is also skewing this statistic in a negative way that simply won't hold for the next 20 years.

      2. As more people retire wage pressure will go up, This is a natural and obvious outcome. For the report to pretend that the wave of retirements won't effect wage pressure in the market smacks of delusional or conservatively manipulative designs.

      3. immigration being down is a temporary effect, current anti-immigration fervour is unsustainable for the farming industry and meat/ranching industries.

      4. immigration again will have upwards pressure from increased retirement rates, low hanging fruit of (citizen)American workers held up from job advancement due to delayed retirements will open up more low end opportunities as they are allowed to continue their job advancement after the retirement rate picks up again.

  •  Does Romney pay into Social Security at all (9+ / 0-)

    since his income is all derived from investments?

    We're not perfect, but they're nuts! -- Barney Frank

    by Tamar on Tue Apr 24, 2012 at 02:57:51 PM PDT

  •  and what happens to any business (3+ / 0-)
    And then there's the part that after 2033, Social Security will still not be all out of money,(unless the Republicans and their Very Serious compatriots manage to succeed in killing it) and it will still be about to provide about 75% of benefits earned.
    that can only pay 75% of its bills for the forseeable future? It goes bankrupt. So the analogy works in part.  If SS was a normal business, it would have to go out of business.

    Of couse the government is also different than a business in that it can compel you to be customer, even if you don't want to be, if you think you're getting a bad deal.

    Is there a more correct term to employ?

    •  Not hardly. How about the US Military? Does it (10+ / 0-)

      make a profit? Is it business?  No, it is a goverment funded program ostensibly run for the common good.

      Please don't accept the right wing framing of it as a business. It is not.

      Like all government if it needs more money to make it through a shortfall, we just give it more.  How?  Raise taxes on the rich.

        Thats just what we will do and should when the time comes and it needs some extra funds.  Remember, this is not a business, this is a bedrock E Pluribus Unum  common effort to take care of our own.  Without it and programs like it, we are not a 'nation.'

    •  um, no (4+ / 0-)
      Recommended by:
      JesseCW, wsexson, BigOkie, hazzcon

      Bankruptcy is protection from creditors.

      Since Social Security is prohibited by law from ever going into debt, it can never have creditors, and therefore cannot use bankruptcy court to protect itself from those non-existent creditors.

      The concept of bankruptcy has zero to do with the social security program, past present or futures.

      SS beneficiaries are not creditors. Currently-predicted future benefits are not debt, nor are they an enforceable contract. Congress can change the benefits (or taxes) at any time it wants to.

      In other words, nothing at all in common with bankruptcy.

       

    •  And if Social Security were a frog, it would bump (2+ / 0-)
      Recommended by:
      BigOkie, hazzcon

      its ass every time it hopped.

      Nuclear weapons don't kill people, Harry Trumans kill people.

      by JesseCW on Tue Apr 24, 2012 at 09:24:39 PM PDT

      [ Parent ]

    •  Oh come on -- (0+ / 0-)

      Do you REALLY think that the Federal Government will stop collecting the FICA and Medicare taxes?!!! Please note that this is a prediction about 2033.

      In case you couldn't be bothered to actually become informed about Social Security, the Trust Fund was designed to decrease as the Boomers die off. It's a feature NOT a bug.

      There are several options to increase the revenue stream so that the same level of benefits may be maintained:

      Raise the cap on income subject to the FICA tax -- the current limit is $110,100.

      Broaden the FICA tax so that it covers investment income as well as wages.

      Increase the FICA tax itself. (The payroll holiday should be allowed to expire.)

  •  Reporters just do not do much better than most (4+ / 0-)
    Recommended by:
    dewley notid, whaddaya, NonnyO, Matt Z

    Americans at being numerically literate.  It shows big time in the way that they never question any of these numbers.

    And it feels like I'm livin'in the wasteland of the free ~ Iris DeMent, 1996

    by MrJersey on Tue Apr 24, 2012 at 03:12:32 PM PDT

  •  These bastards have taken money from our,, (10+ / 0-)

    collective "cookie jar" since the last time the system was reformed. Now that the bills are about to come due they simply don't want to pay it back.
            We are facing a similar problem in the state of Illinois. Pension funds are seriously depleted and we face a shortfall.
    Governor Quinn(D) wants to increase pension payments from employees and raise the retirement age to 67. All the "serious folks" agree.
    http://www.news-gazette.com/...
            Absolutely no mention is made of the fact that employee contributions have contributed unchanged for decades while the state has shortchanged the various funds over the same period by hundreds of millions. State employees are expected to take another hit with absolutely no guarantee that the money raised will not just be shuffled off the the general revenue fund.

    ",,, the Political whorehouse that is Fox News." Keith Olbermann

    by irate on Tue Apr 24, 2012 at 03:13:04 PM PDT

    •  Our Teacher pension fund in TX is surprisingly (3+ / 0-)
      Recommended by:
      whaddaya, Calamity Jean, Says Who

      good shape but the Republicans want to gut it as well.  We are not going to let them.

      Here's an idea:

      Defend Your Pension with a Resolution at State Party Conventions

      As for as

      These bastards have taken money from our,, (2+ / 0-)

      collective "cookie jar" since the last time the system was reformed. Now that the bills are about to come due they simply don't want to pay it back.

      see the diary and its links:
      It does not mean that for a period of time that you've planned for, you're spending more than you take in. The federal government and particularly Social Security has this thing called a trust fund where there's savings. And then there's the part that after 2033, Social Security will still not be all out of money, (unless the Republicans and their Very Serious compatriots manage to succeed in killing it) and it will still be about to provide about 75 percent of benefits earned.
  •  Democrats Are Not "Supposed" Liberals Except (7+ / 0-)

    to the Tea Party. There are plenty of philosophical conservatives in the party.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Apr 24, 2012 at 03:16:42 PM PDT

  •  Allowing additional immigration (0+ / 0-)

    in the coming decades and thus growing the workforce more than assumed would also help push the date of exhaustion of the trust fund further into the future.

    And slightly better growth than assumed would have the same effect.

    The bottom line is that people who are interested in rolling back the new deal have been predicting the apocalypse for ages.  Here's what extremely serious person (tm) Bob Kerry said back in 1996:

    CHICAGO - Sen. Bob Kerrey smells an odor coming from the Republican and Democratic stands on entitlements.

    "It's one of the cruelest things we do, when we say, Republicans or Democrats, `Oh, we can wait and reform Social Security later,' " the Nebraska Democrat said.

    Mr. Kerrey says that without reform, entitlements will claim 100 percent of the Treasury in 2012.
    "This is not caused by liberals, not caused by conservatives, but by a simple demographic fact," Mr. Kerrey warned at a meeting of the Democratic Leadership Council.  

    "We [will have] converted the federal government into an ATM machine."

    (ht Digby)

    “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

    by jrooth on Tue Apr 24, 2012 at 05:11:31 PM PDT

  •  Be careful what you wish for. Raising the cap (1+ / 0-)
    Recommended by:
    Clem Yeobright

    will also raise the benefit payment to the retirees proportionately, all things being equal with todays' SS plan.
    I currently receive the maximum SS benefit (based on my age/income), having always 'capped out' yearly prior to retiring. In retrospect, I would have gladly paid to a higher cap amount (usually reached it by Apr-May), because a much higher still benefit would be nice today, had that cap been greater all those years (going back to the early '60's).

    And if you break that input=~output linkage it is no longer a popular, fair, old age insurance plan. It becomes a wealth re-distributing tax vehicle, which would be a fatal flaw. FDR, et al., knew what they were doing.

    Although the present plan is skewed slightly to favor lower income workers today (not complaining, it's fair enough).

    You may think that all that money 'forfeited' in the current rules by workers who die relatively early would favor the SS plan monetarily over those higher earners, but they also tend to live longer too.

    You know what else is an alternative? Lifting the damned payroll tax cap, so that people making more than $110,000 annually have to payroll taxes on that income, too. People like, oh, say Mitt Romney, who made $27 million in 2010 and now pays exactly the same into Social Security as someone making $109,000. That has to end.

    "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

    by Bluefin on Tue Apr 24, 2012 at 06:52:39 PM PDT

    •  It would work out... (2+ / 0-)
      Recommended by:
      cocinero, JesseCW

      No cap on either the income that's taxable OR the benefits that are paid out gets us to 95% solvency for 75 years. No broken input, no caps, no real issue with solvency.

      http://aging.senate.gov/...

      it fitfully blows, half conceals, half discloses

      by Addison on Tue Apr 24, 2012 at 07:23:28 PM PDT

      [ Parent ]

      •  I really don't know actuarily, just know that (0+ / 0-)

        the SS beancounters have planned for almost every contingency; and a damn lot of our politicians, especially the Rescummies, will spin this (or anything SS) in the direction of destroying SS if they can. My Dawg, even saw Alan Simpson making the media rounds recently again, urkkk.
        They simply don't want to face up to to having the federal government repay an obligation backed by 'the full faith and credit' of the USA when demand makes it necessary.
        IE: Repaying US bonds held by SS on the same basis as any others held by creditors (like WS, China, Saudis, etc.), by any means necessary (as in ending the Bushie tax cuts/giveaways, and even raising taxes).

        "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

        by Bluefin on Tue Apr 24, 2012 at 07:54:07 PM PDT

        [ Parent ]

    •  Absolutely. Thank you. (1+ / 0-)
      Recommended by:
      wsexson

      This 'fix' would be a disaster for SS.

      Am I right, or am I right? - The Singing Detective

      by Clem Yeobright on Tue Apr 24, 2012 at 07:25:08 PM PDT

      [ Parent ]

      •  As I see it, maybe some actual expert has it (0+ / 0-)

        differently. The crap in the media is almost 100% BUllSHit all the time.

        "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

        by Bluefin on Tue Apr 24, 2012 at 07:57:35 PM PDT

        [ Parent ]

    •  No, it wouldn't (2+ / 0-)
      Recommended by:
      TRPChicago, JesseCW

      Payouts are not tied to revenues. They're made according to set formulas that get adjusted from time to time, including COLA. According to your logic, we would never have accumulated the trust fund because surpluses (which we've had for most of the last 30 years) would have gone to retirees. They didn't.

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

      by kovie on Tue Apr 24, 2012 at 08:08:00 PM PDT

      [ Parent ]

      •  You may have misunderstood, I was referring to (1+ / 0-)
        Recommended by:
        wsexson

        individual contributions to SS (FICA tax) resulting in proportionate payouts to a given worker.
        They are directly linked in a formula based on years and amounts paid in, yielding a certain retirement monthly payout.
        You make more in earnings, you pay more into your own account (you should get an annual statement?)- up to the cap, then on retirement you receive a proportionate benefit: made less, paid less; made more, paid more. The actual formula is an arcane SS thing worked up by pols and actuaries.

        The accumulated $2.7 Trillion SS surplus, in the form of bonds held by the federal government, are owed to SS.
        That surplus was purposely designed into SS in order to cover the demographic 'bulge' of the "Baby Boomers" retirements (of which I are one) that began recently, it didn't just 'happen'.

         The temporary shortfalls recently are due to the extended economic recession (and deliberately made worse by the Rescummies).

        Payouts are not tied to revenues.
        ...
        SS Benefits
        The largest component of OASDI is the payment of retirement benefits. Throughout a worker's career, the Social Security Administration keeps track of his or her earnings. The amount of the monthly benefit to which the worker is entitled depends upon that earnings record and upon the age at which the retiree chooses to begin receiving benefits. For the entire history of Social Security, benefits have been paid almost entirely by using revenue from payroll taxes. This is why Social Security is referred to as a pay-as-you-go system. Around 2017, payroll tax revenue is projected to be insufficient to cover Social Security benefits[citation needed] and the system will begin to withdraw money from the Social Security Trust Fund. The existence and economic significance of the Social Security Trust Fund is a subject of considerable dispute because its assets are special Treasury bonds; i.e. the money in the trust fund has been lent back to the federal government to pay for other expenses.
        I suggest that you read up on the subject matter a bit.

        "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

        by Bluefin on Tue Apr 24, 2012 at 10:04:27 PM PDT

        [ Parent ]

        •  It's not a proportionate ratio (0+ / 0-)

          It's based on a curve, and there's no reason to not further "bend" it via some sort of means-testing such that the richest don't get proportionate benefits if the cap is lifted, which they don't need and which are better spent on retirees of more modest means. People in the middle would get the most proportionate payout, and everyone else gets a disproportionate payout, the ones nearer the bottom more, the ones nearer the top less. That's how insurance works. Not everyone gets out what they pay in. The most needy get more, the least needy get less.

          Raise the cap and adjust the formula. That's how to fix this. And if someone cries "wealth redistribution!", my response would be "Yes, and your problem is?".

          Civil societies always redistribute wealth. It's called justice.

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

          by kovie on Wed Apr 25, 2012 at 02:25:59 AM PDT

          [ Parent ]

          •  I agree it's somewhat of a curve(d) formula, (0+ / 0-)

            just didn't want to get into the arcana of it, I almost tried to use that (schoolroom) analogy and decided not to. It is designed to slightly favor the lower wage contributor, slightly penalize higher wage workers, not a problem with me as a fairness issue. But stretching that curve too far would not be good for the whole program.

            As far as the insurance analogy, I don't get it. With property type insurance you buy a certain fixed amount for a fixed (ha) cost, and with a casualty, you are paid that amount (if you're lucky), the risks are fairly well known and pooled, and the house/ins co. knows how to get their %age.
            Health insurance works as you describe though, with a pooled risk/benefit, more or less fixed payins, and widely variable payouts. That might be why so many of us hate the present healthcare insurance scheme in the US.

            In any case, SS remains, and is strong and popular as a government program because it is still seen as fair and equitable.
            I regard it that way, I hope to come close to receiving back close to the large sum that I had paid in over 40+ years. If I croak too soon it is forfeit, live beyond the actuarial odds and come out ahead. It seems to be a hybrid insurance/annuity plan to me.

            Your (and the diarist') viewpoint that it become just another tax, and means to redistribute 'wealth', would be fatal to SS, and plays into the hands of the R's, IMO.

            BTW, SS was never intended to comprise a retiree's sole source of income.
            I realize that for many it may be, given the failure of some other of an individuals planned retirement funds (401K's, failed/looted pensions, RE price collapse, etc.) beyond their control, or those who made no other provisions. (I've been fairly lucky, 401K pretty much reduced, but pension, and RE investments still appreciating, A-OK in this area).

            "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

            by Bluefin on Wed Apr 25, 2012 at 12:27:32 PM PDT

            [ Parent ]

            •  We need to be realistic (0+ / 0-)

              Expecting everyone to be wise and prudent and disciplined AND lucky in planning for their retirement is bad policy. Many, for a lack of any or all of the above, will not be able to live decently on their own, so Social Security, along with all the other social welfare programs we have, need to be designed and funded to be able to make up the gap--or else society will end up making up the gap after the fact, at much higher financial and societal cost.

              Which is why, among other things, Social Security needs to never be cut, in terms of raising the age or lowering the COLA formula. Nor should the rate be increased as it's already pretty high. So the only fair solution I see is to raise the cap, but without correspondingly higher payouts at the high end, which should be capped. I.e. bend the curve even further. If that's (semi) means testing, then so be it. We can't have everything and we're going to have to compromise somewhere.

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

              by kovie on Wed Apr 25, 2012 at 01:37:00 PM PDT

              [ Parent ]

    •  It already is a wealth redistributing vehicle. (0+ / 0-)

      The first dollar in every year gets you a substantially largely (about twice as large) return as the "last dollar" in just before the cap.

      That doesn't suddenly break if we make it so that someone paying in on 400k-500k is only getting 1/5th the return.

      Even that isn't as cut and dried as it seems, of course, since it's about average income during qualifying years.  Some peoples incomes vary a lot.

      For someone who has one hit single, and makes a million one year, only to never make more than 20k in a year again....that one big pay in is going to have some great SS benefits if there is no cap.

      Nuclear weapons don't kill people, Harry Trumans kill people.

      by JesseCW on Tue Apr 24, 2012 at 09:29:17 PM PDT

      [ Parent ]

  •  THey say cut back... (1+ / 0-)
    Recommended by:
    cocinero

    we see fight back. Don't lose sight of the goal: protecting our social safety net for the 99%.

  •  Bankruptcy is not out of money. It is insolvent. (1+ / 0-)
    Recommended by:
    cocinero

    If you cannot meet your obligations, you are insolvent.

    Social Security is solvent only because it doesn't have to play by the same rules that we do: it isn't actually obligated to pay a specific level of benefits.  It can cut them back as much as it takes.

    Charming. And so reassuring to those of us nearing retirement age.

    As to eliminating the cap, there is a much better alternative:
    Stop the BS about Social Security just being some kind of insurance plan and admit that it's a major social welfare program -- and fund it accordingly, even if that means taxing money that is not payroll (Oh! You want to hit rich people? Guess what -- most of their income is not from wages!!!!).

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Tue Apr 24, 2012 at 07:08:35 PM PDT

    •  Is that you, John Boehner? (0+ / 0-)

      Am I right, or am I right? - The Singing Detective

      by Clem Yeobright on Tue Apr 24, 2012 at 07:26:24 PM PDT

      [ Parent ]

    •  future benefits are not a legal obligation (2+ / 0-)
      Recommended by:
      JesseCW, wsexson

      as you helpfully pointed out. Therefore by your own definition, social security is solvent because it can meet its obligations.

      You might notice that most proposals for "fixing" social security propose -- wait for it -- cutting benefits.

      •  Please don't ascribe that to me. Political (0+ / 0-)

        weaseling is the work of politicians who work around the ordinary meaning of words so that they can lie to the rest of us without committing a technical falsehood.

        The whole "Social Security is not insolvent" meme is precisely that kind of political bullshit.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Tue Apr 24, 2012 at 08:08:20 PM PDT

        [ Parent ]

        •  Really? You're arguing that Social (1+ / 0-)
          Recommended by:
          wsexson

          Security cannot meet its current obligations?

          Nuclear weapons don't kill people, Harry Trumans kill people.

          by JesseCW on Tue Apr 24, 2012 at 09:31:24 PM PDT

          [ Parent ]

          •  In every way but the strict legal sense, yes. (0+ / 0-)

            Politicians (ahem, Democrats most heavily) have sold the public on the idea that Social Security will be there.

            We get these nifty little mailings every year about the benefits we will receive when we retire, based on what we've paid in.

            We are told the what happens if we retire early vs waiting til full retirement age.

            We are not told that it's all a lie.

            Until some idiot wants to argue that Social Security is solvent because it doesn't actually have to abide by all those mailings and all that advice.

            Smooth.

            LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

            by dinotrac on Wed Apr 25, 2012 at 05:32:05 AM PDT

            [ Parent ]

    •  Yes! (1+ / 0-)
      Recommended by:
      dinotrac

      Taxing money that is not payroll would also help Medicare.

    •  Do you know what happens to welfare programs (0+ / 0-)

      in the US?

      Were you here during the 90's?

      Nuclear weapons don't kill people, Harry Trumans kill people.

      by JesseCW on Tue Apr 24, 2012 at 09:30:44 PM PDT

      [ Parent ]

      •  I've been here for a very long time. (0+ / 0-)

        Like that old joke, "Ya doesn't have to call me Johnson"

        You can still call it Social Security and fund it out of the general fund for the sake of fairness.

        It really is outrageous that the biggest burden for Social Security falls on the middle class and....

        let us not forget the sliding scale of benefits whereby those at the upper limits of Social Security contributions are getting only a fraction back in benefits per marginal dollar what those in the lower limits are.  It's a tax disguised badly as an insurance premium.  Money that doesn't go directly to paying for benefits goes into the general fund, even if some magic T-Bills are generated as IOUs.  Why not be honest and spread the burden around?  Let rich people pay their fair share.  Last I looked, it was the CEOs, etc who make the decisions that leave people without decent pensions, and those tend to make most of their money in non-wage compensation (thank you, Bill Clinton for that -- and Enron, etc).

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Wed Apr 25, 2012 at 05:40:14 AM PDT

        [ Parent ]

        •  No. The middle class gets the most out (0+ / 0-)

          of SS.  There's no reason they shouldn't shoulder a large chunk of the burden.

          The Rich still get to average in high earning years.  If they make 100k a year for 15 years, then move to some small town or suffer a major carreer set back, and start making only 30k....

          They're going to get a damn nice return on their payments, provided they live to a fairly ripe old age.

          If you think T-Bills are "magic", you're essentially calling into question the credit of the United States of America, and saying that you don't have faith in the value of the dollar.  That's an entirely seperate conversation.

          You've been told why, over and over again, your plan to convert Social Security in a Welfare progam is a bad one.

          You just don't care.

          Nuclear weapons don't kill people, Harry Trumans kill people.

          by JesseCW on Wed Apr 25, 2012 at 09:38:08 AM PDT

          [ Parent ]

          •  No. Low earners get the most out of Social (0+ / 0-)

            security. There is that lovely 90-15 sliding scale.   By the time you get into the upper reaches of the cap, you're paying as much per dollar on marginal income as everybody down the line, but receiving 20% on the dollar.

            As to magic T-Bills -- I'm not calling anything into question.
            The fact is the money goes into the general fund and gets spent.  T-Bills are granted in return. Come time to draw on those, the money must come from somewhere -- which is exactly the case if there were no T-Bills.  They are simply a cute little fib to maintain the insurance company fiction.

            As to not caring, you're the one who thinks its ok to ignore the viability of Social Security because you see no need to actually pay the expected, promised, but not legally obligated, benefits.

            You're also the one who thinks its OK to dump on the middle class while the people who create the need for Social Security can use the money for country club dues.

            Perhaps your definition of caring is as tortured as your definition of solvency.

            LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

            by dinotrac on Wed Apr 25, 2012 at 11:40:54 AM PDT

            [ Parent ]

            •  Actually, I need to revise that in light of your (0+ / 0-)

              hyper-legalistic view ---

              low earners get the most value out of Social Security.

              Those who cap out get the most in terms of absolute dollars, but pay far more in relative to payout.

              LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

              by dinotrac on Wed Apr 25, 2012 at 11:42:42 AM PDT

              [ Parent ]

  •  how about apply this to military spending (1+ / 0-)
    Recommended by:
    NonnyO

    we cannot continue to spend on the military like this so we need to start cutting it now to a level we can afford.

  •  A tenth of a percent a year... (3+ / 0-)
    Recommended by:
    cocinero, JesseCW, contrariandy

    ... adjustment to the employee and employer contribution would be sufficient to fund on an ongoing basis without changing benefits or caps.

    Those who ignore the future are condemned to repeat it.

    by enigmamf on Tue Apr 24, 2012 at 07:10:33 PM PDT

  •  "And now they're coming for your Social Security!" (6+ / 0-)

    George Carlin got it dead-on, several years ago:

  •  Dear Journalists (7+ / 0-)

    Dear Journalists,

    Please stop reporting on Social Security until you read this:

    http://aging.senate.gov/...

    All that 95% solvency for 75 YEARS requires is making all earnings subject to the payroll tax -- and people who paid in more taxes under the new rules would also get more benefits, so the link between money paid in and money received would still exist.

    We don't have to starve grandma and grandpa. That doesn't have to happen, and it's not a "serious" proposal, it's a pointlessly cruel one.

    it fitfully blows, half conceals, half discloses

    by Addison on Tue Apr 24, 2012 at 07:20:29 PM PDT

    •  Part of the problem with removing the SS cap (0+ / 0-)

      completely is that it would result in wealthier beneficiaries receiving eye-popping monthly SS checks if the system retains its proportionality (payouts are still biased somewhat in favor of lower wage workers).
      Can you visualize the Rmoney types drawing $250,000 monthly SS checks? Me neither.
       Without a reasonable cap and proportionality it becomes an 'unfair tax on the wealthy' and very vulnerable to the usual R attacks..

      "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

      by Bluefin on Tue Apr 24, 2012 at 10:39:02 PM PDT

      [ Parent ]

      •  so let's cap SS benefits rather than income base (0+ / 0-)

        for a change.  Why do we only tax wages anyway?

        It's the RighTeas who want to make SS into a Welfare only program, so why should it have any tax limitations?

        On the one hand, RighTeas want to be able to say that SS is Insurance and therefore we must be "fair" to the wealthy by only taxing up to $110k of wage income because the benefits are capped.

        But, on the other hand, they want to "means test" Middle Class retirees and turn SS into Welfare.  

        The really Rich don't care about their SS benefits, they care about continuing their unfair tax break.

      •  Actually read the report, please... (0+ / 0-)

        ...I personally don't care if they receive "eye-popping checks" if they've paid into the system, and what's more, it won't matter. We'll get to 95% solvency over 75 years even with those "eye-popping checks". That is a distraction.

        Option 2: Cover All Earnings and Pay Higher Benefits

        If the earnings base was completely eliminated for both employers and employees so that all earnings were taxed, 95% of the projected financial shortfall in the Social Security program would be eliminated. To achieve solvency for the full 75-year projection period under this option, the total payroll tax rate would have to be raised by an additional 0.1 percentage points (from 12.4% to 12.5%) or other policy changes would have to be made to cover the shortfall.

        Under this scenario high earners would pay higher taxes but also receive higher benefits. However, the net benefit to the Trust Funds is positive as $5 in additional revenue would provide only $1 in additional benefits (on average over their 75-year valuation period). Annual Social Security benefit payments would be much higher than today’s maximum of $25,440. A worker who paid taxes on earnings of $400,000 each year would get a benefit of approximately $6,000 a month or $72,000 a year—a replacement rate of 18%—while someone with lifetime earnings of $1 million a year would get a monthly Social Security benefit of approximately $13,500 a month
        or $162,000 a year—a replacement rate of 16.2%.

        it fitfully blows, half conceals, half discloses

        by Addison on Wed Apr 25, 2012 at 06:56:27 AM PDT

        [ Parent ]

        •  I think I more or less agree. As a max SS benefit (0+ / 0-)

           recipient as I stated before, I wish the cap had been higher in the past and I got even more today (heh).
           That doesn't mean that the danger is that SS changes from a fair, proportional retirement income plan for everybody to simply another tax. If your (and the report') numbers work out that way, maybe it would work.

          I just wish liberals/progressives/Democrats could all get on the same page with respect to Social Security. As it is many are playing into the Rescummies hands. And as the diary states, our feckless media isn't helping with their ignorance.

          "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

          by Bluefin on Wed Apr 25, 2012 at 12:39:24 PM PDT

          [ Parent ]

  •  reporters these days (1+ / 0-)
    Recommended by:
    JesseCW

    are little more then copy and paste monkeys.  The simply repost press releases and other shit they are fed.  Pathetic, they are for the most part a pretty pathetic bunch.

    Bad is never good until worse happens

    by dark daze on Tue Apr 24, 2012 at 07:25:46 PM PDT

  •  Thank you for writing this. (3+ / 0-)
    Recommended by:
    cocinero, NonnyO, Matt Z

    The fight to save SSI is the most important fight of all. It affects all Americans, men women and children, the old, the infirm, the weakest and the neediest.

    You may find this link helpful:

    http://www.niemanwatchdog.org/...

  •  Kevin Drum is spot on (0+ / 0-)
    On a related note, I'm going to annoy a few of my fellow lefties and say that we should stop getting bent out of shape when people respond to the Trustees report by saying that Social Security is "going bankrupt" or "running dry" or some similar formulation. There's a hyperlegalistic sense in which this isn't accurate, but honestly, it would be a helluva dramatic event if the trust fund ran out of money and Social Security suddenly had to slash benefits by 25% in 2033 (see chart above). Referring to this as "bankruptcy" isn't all that big a rhetorical stretch, and everyone on both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix that would involve — say it in unison, folks! — a very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes. This isn't a hard problem.

    Am I right, or am I right? - The Singing Detective

    by Clem Yeobright on Tue Apr 24, 2012 at 07:28:33 PM PDT

  •  Then there's the radical option (2+ / 0-)
    Recommended by:
    Mike Taylor, JesseCW

    of paying in the 12.4% that all the actuarial goodness in its creamy center presupposes.   But in the world of "he who cuts taxes the most, wins" we've decided to cheat on the math, and pretend we can get away with it by declaring it a political victory.

    The price will be paid, and it will be high.  Ask any Greek pensioner.

    The law, in its majestic equality, forbids rich and poor alike from sleeping under bridges. ~ Anatole France

    by ActivistGuy on Tue Apr 24, 2012 at 07:30:52 PM PDT

  •  Romney makes 1000X (0+ / 0-)

    I think the proposed solution- raising the level of the cap- works better as a multiple of a lower income instead of as 'the same as for a worker making $109,000'.

    A better way to discuss this is Romney makes 1000x the income of someone making 27,000 a year but pays around 3.5x as much into SS.

  •  What about Crap-0-Crat$ selling us out? What (2+ / 0-)
    Recommended by:
    splashoil, wonmug

    about the class of dilettante diaper pissers who've taken my vote for 30 years and who lost 60 seats in the House by being craven fucking cowards ...

    well, except for the yuppie DLC Third Way New Dem fucking scum selling us out?  

    Do YOU ever tire of the 'Mean Meanies are being Mean' story lines ??

    What about the Inslees and Cantwells and Murrays and Kerrys and ... who've spent decades earning over 6 figures a year, and who can ONLY

    Cry Walker and let slip the dogs of fear?

    gawd.

    the problem ain't the lying stealing fascists, THE PROBLEM is the worthless sacks of shit on 'our' side sucking up leader paychecks.

    rmm.

    Yond Cassius has a lean and hungry look; He thinks too much: such men are dangerous

    by seabos84 on Tue Apr 24, 2012 at 07:44:39 PM PDT

  •  Scare story of the week (1+ / 0-)
    Recommended by:
    ferg

    "Due to the slow performing economy, Social Security will need more money three years sooner."

    Know the solution? Grow the freaking economy!

    Lift the damned cap and apply FICA to Mitt Romney "investment" income, and apply a the personal exemptions to FICA, which will help poor people the most.

    But, but, Mittens would have to pay his share of taxes! Ye gads, we can't have that!

    Sometimes . . . I feel . . . like a redneck with chopsticks . . . Dreaming of squirrel while I'm sucking down squid . . .

    by Pale Jenova on Tue Apr 24, 2012 at 07:52:09 PM PDT

  •  SS will eventually be privatized and mandated. (3+ / 0-)
    Recommended by:
    bepanda, JesseCW, wsexson

    Just like the healthcare system, with an enforcement mechanism applied to the mandate, such as a tax, a fine, or whatever you want to call it, for those who don’t want to participate in mandatory private investment/retirement accounts (just as it will soon be for private health insurance). And it will be ‘bipartisan’, because the banks (i.e. Wall-Street) own the place.
    It’s not hard to see the direction of things to come.

    •  If we let it happen, you're right. (2+ / 0-)
      Recommended by:
      wsexson, Mike Taylor

      There is no sound way to argue that it's a good enough model for health insurance, but not for old age insurance.

      Nuclear weapons don't kill people, Harry Trumans kill people.

      by JesseCW on Tue Apr 24, 2012 at 09:33:36 PM PDT

      [ Parent ]

      •  how about arguing the opposite (0+ / 0-)

        that government insurance is the best, most stable and efficient solution for retirement income (Social Security) and would also be the best, most stable and efficient solution for Healthcare (Medicare For All)

        and that recent history shows that the private for-profit markets have failed America on both counts and don't deserve to take huge cuts of cash for the harm they inevitably do to individuals and the American economy.

  •  some relatively minor adjustments to Social (0+ / 0-)

    Security will ensure its solvency well into the next century: eliminating or raising the cap on incomes that are subject to Social Security taxes (in my opinon, this cap should be eliminated so that all income is taxed; it seems patently unfair that those earning above about $110,000 pay no Social Security taxes on anything above that amount.) In addition, means testing of Social Security (reducing the payout to those who clearly don't need it (such as those earning more than $250,000 a year for instance). Those two relatively minor adjustments will make it solvent well into the next century.

    In fact, in my opinion, every Democrat this year should be asking their Republican opponent why they insist on radical changes to Social Security (and Medicare, for that matter) when only minor adjustments are necessary to make them both solvent well into the next century.

    Apparently, Republicans like scaring the crap out of people (demagogue is the word) in order to achieve their true, over-riding objective: killing off Social Security (and Medicare) as we know it, in order line the pockets of their financial backers.

  •  To their "defense", most of them are too stupid (1+ / 0-)
    Recommended by:
    Matt Z

    to understand what the hell they're talking about. I'm serious. There are not the brightest bulbs in the room. Ever heard David Gregory or Norah O'Donnell try to weigh in on anything? It's like scratching rough porcelein. Just shoot me!

    So when most of them report these lies, they're just reading off a script, be in on paper, their screen, or their empty heads. Of course, the people who do know that these are lies know this, and exploit it. They're being played, for sure.

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

    by kovie on Tue Apr 24, 2012 at 08:03:02 PM PDT

  •  NPR (0+ / 0-)

    covered this social security is going broke crap today. They routinely have the worst economic reporting possible. On economics they might as well be Fox. They were all over this angle today.

  •  Good job. (0+ / 0-)

    Cut the crap; raise the cap.

    "Mr. President, I'm not saying we wouldn't get our hair mussed." General Buck Turgidson

    by muledriver on Tue Apr 24, 2012 at 09:57:10 PM PDT

  •  A young, fresh-faced anchorwoman (0+ / 0-)

    ... said, last night, that Social Security will run out of money in 2033.  I addressed an email to her and to the news tips line for good measure in hopes that someone with some maturity will read it and know what I'm talking about and notify the writers that they got the story all wrong - AGAIN.

    I really am sick and tired of these false memes.  All it does is scare disabled people and senior citizens.

    Wall Street must be desperate to get their hands on the 2.7 Trillion surplus to come up with the idiocy that Social Security will be "broke" or "out of money" in 2033.

    < insert eye roll here >

    I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

    by NonnyO on Tue Apr 24, 2012 at 09:59:26 PM PDT

  •  so why (0+ / 0-)

    aren't there people who know better out there talking it up so that people will understand it?  Why can't we get people who know how to explain complicated issues to people like they are 6 year olds.  You know, smart people LIKE TEACHERS???

    BECAUSE WE HATE TEACHERS!!!!  

  •  SS Trust Fund is used for General Expenses anyway, (0+ / 0-)

    so why not uncap it?  Why should incomes over $110k not pay SS tax when it's just being mixed with General Revenues used for General Expenses?  We need to get SS thru the Baby Boom Bubble and strengthen the retirement insurance guarantees to the next generations.  The Social Stability provided by the federal programs will always be vitally important to the entire American economy.  

    It's idiotic to say that "we" can't afford Social Security and Medicare and so let's cut them and let the people pay.  Who are "we" if not the people?  

  •  to keep payments at 100%, increase SS tax by 35%? (0+ / 0-)

    For the sake of economic stability for all generations, all Americans should be interested in the alternatives to letting Con-servatives destroy Social Security and Medicare.

    All Americans of all generations, need to understand the numbers in the following statement:

    "An alternative, in order to keep payments at 100 percent, would be to raise the payroll tax on employers and employees to 16.7 percent from its regular 12.4 percent rate."

    This appears to be offered as a solution to the estimate that SS will only be able to pay 75% of benefits after 2033.  [0.75 x 1.35 = 1.01]

    But what's missing is WHEN would the SS tax have to be increased by almost 35%?  It seems that a 35% increase would be needed if we wait until 2033 to fix it, but it would be crazy as a nation or as individuals to wait until 2033 to fix it.  We need to start sooner with a smaller increase in the SS tax,  removal of the SS income cap, while at the same time strengthening our individual retirement programs.   It will be an economic disaster if America waits until 2033 to solve its retirement income problems.

    Likewise we need to start now to control Healthcare costs.  "Obamacare" will help, but it's just a start.  Letting Con-servatives destroy Medicare by passing the uncontrolled costs on the elderly is cruel politics and would be insane on the part of anyone (even the Rich) who would voted for it because social instability will hurt the entire American economy.  The right solution is to control Healthcare costs.

  •  Trust fund? (0+ / 0-)

    You all know that the trust fund is a shell game right? There is no account somewhere that holds all this money. The surplus money is used to purchase US Bonds, and then spent as part of general funds. Its a great big IOU from one part of the government to another.

    To put it more simply, part of the trillions of dollars we owe to China we also owe to Social Security. As the Fed tries to reduce our debt burden though "Monetary Easing," aka printing money, we are also reducing the value of the "Trust Fund." As we try to inflate away our debt, we also inflate away the trust fund, which is why it is running out sooner than previously stated.

    The real ugly part is that as the number of retirees increases the amount of "surplus" Soc. Sec. funds that are converted into bonds and spent as "general funds" decreases. Putting a lever increasing burden on our budget.

    Now in a few more years not only will those "surplus" SS funds be gone and that money will not be available for the general fund, BUT the Soc Sec income will actually be smaller than the Soc Sec payments that need to be made. Which means they will have to tap the "Trust Fund." How do we tap the trust fund? The Soc Sec Admin starts cashing in bonds. Where does that money come from? The general account. And we will have yet another NEW bill for the government to pay.

    It is as if its a double negative on the cash flow of the government. Not only will the surplus not be there to feed the bloated government, but it will be time to pay up for orgy of spending that has been going on with the trust fund money for the last however many decades. So we will have lost one source of income and replaced it with a bill instead.

  •  Strengthening Retirement Savings (0+ / 0-)

    Pretty much everything Republicans tell you about Social Security is skewed or wrong. That's because Republican politicians don't know money.

    I've pulled together the essential facts about Social Security on Dkosopedia on the Social Security framing page. Read and then go armed (with information) into your family battles.

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