Social Security trust funds now projected to run out of money sooner than expected due to Covid

In general, I agree with you, but, because Social Security pays out so little relative to the REAL cost of living (not just cherry-picked criteria), a lot of people can't afford to retire. If they stop working, many would risk losing everything of value that they've worked for, including their homes, especially since so many fell for the 'refinance' mania that has swept the country for the past twenty years, pushing out the date they would finally pay off their mortgages.

If younger workers were more knowledgeable, better educated, and had better work-ethics, they'd be able to compete with older workers easily, but what we've seen especially since the so-called "Great Recession" is that companies often prefer to keep the older workers because they are frequently better workers, all the way around....

A look ahead in the future: robots, robots, everywhere -- robots!

"Hire me! No political crap, no sick-time, no personal 'issues'...!"

 

Fixing SS is easy.

 

They'll just squander that too.

We know that SS isn't even a savings plan. They don't invest that money. It's a giant pyramid scheme.

We'd have A LOT more for retirement at a 5% return on the same investment without it.

SS was just a scam for the federal government to take more of our money.

 

Call it whatever you like. I can't help it if you are in denial. If you don't want to trust my terms maybe you you trust someone from your own history, (assuming you are a boomer).
Here is an address made by the Deputy Director of the Bureau of Old-Age and Survivors Insurance Social Security Administration. I chose this speech because it was made in 1961 probably around the time many boomers were entering the workforce. This speech is still of the SSA website.
https://www.ssa.gov/history/churches.html

This is the mistake that many people make when they think about Social Security. You think YOUR contributions should be available to you. Where do you think SS got the money to paid out disability? Certainly they did not just pay out what the disabled person paid in. Where did it get the money to pay spouses when they never worked a single day in their lives? To pay survivor dependents. Your money was not put away into a savings account for you. It was used to pay out the current payments of the time and the rest was put into a group fund. The problem is the trust does not have enough money to pay those collecting it. The trust was horribly mismanaged and everyone knew it.

I would totally support the idea that every person that contributed to Social Security in their life times could split the trust amount remaining based on the proportional amount they contributed. I would even accept that you adjust it for inflation so that lower contributions decades ago are adjusted to today's dollars. That would be a doable calculation. The problem is if you were to do that payout we would be well below the 85% payout they are projecting if we just let the fund run out. The reason why it would way less is because current workers would also cash out and stop paying into the program. They deserve to get a proportional share back to if we were to kill the program.

 

It's different pots of money. Raising FICA is really the only way to save the program.

 

The "different pots of money" thing is just a government controlled shell game.

SS isn't an investment program.

If the SS model of "investment" was used by anyone but the government, they'd be prosecuted for running a Ponzi scheme.

 

Structurally, it is a Ponzi Scheme, however the difference is that there is mandatory participation so the rubes can't bail and let the pyramid collapse. But the reason why FDR set it up that way is to make sure that the program couldn't be repealed, and that's certainly a success. You can't even really reform it to all of those investment ideas the GOP has come up with from time to time; the buy out would probably cost 70 trillion dollars.

So we're stuck with it. The best thing we can do is patch it up.

 

I am on the very border of Boomer and Not Boomer. Regardless, insurance is protection for unforeseen events. Calling it insurance when it is planned and promoted to be paid out at a specific point in time, the only requirement being that you've paid in for X number of weeks, pretty much proves that misnomer.

Disability actually should have nothing to do with Social Security. Two different subjects, and another method of plundering a fund that has guaranteed income.

I don't want other people's money. I don't agree with the theory that someone who is perfectly capable to support themselves should look to other people for support. There are exceptions, and in all honesty, as a society we have failed when it comes to people who are truly disabled (physically and/or mentally).

 

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Thats only part of the issue.

For the past 30 years SS has had a surplus, the US govt took that cash and exchanged it for Treasury bonds which paid a pittance in interest. The SS fund is full of IOUs. As SS cashes in those IOUs the US govt will get the cash by selling more treasury bonds - the US govt is funding debt with debt and thats a death spiral.

To honestly save SS taxes have to be raised to pay the deficit and to pay the treasury bonds as they are cashed in.

So all these proposals to save SS - raise the retirement age, increase the tax limit, increase the tax rate - are just a drop in the bucket. They only address the annual deficit.

And it won't work as expected. If those measures are put in place today then SS will be once again running a surplus. What happens when SS runs a surplus? The govt spends it and puts IOUs in the trust. Its a circle jerk.

The entire US federal financial system is a mess.

 

All SS is is a government ponzi scheme.

 

The whole government is a Ponzi scheme.