Social Security Still Keeping Its Promises

Reader Comments
Back to blog

George,
The core issue is that "the full faith and credit" of the federal government IS the problem.
The federal government is in hock up to, some might argue above, it's eyeballs. The only way it can "repay" social security is to tax or borrow more miney from the financial markets, which are already signalling "enough already!" and "get your fiscal house in order."
While we aren't (yet) the basket case that Greece is, we aren't that far behind.

waldo of RI 9:15AM August 17, 2010

Social Security has been working fine. Unlike just about any other federal program it has been running a surplus for decades. "Fixing" Social Security should not even be on the A list for our new President or the Debt Commission.
The 75-year projections for SS that make it "unsustainable" are nonsense. What other product is forecasted out 75 years? Gasoline? Bread? Peanut butter? Prices for motels? It would be ridiculous to to try to go out 75 years for any of those to make the case that one or more were "unsustainable."
Our Social Security system is the envy of the world. It does NOT need to be "fixed." It has NOT added one penny to our national debt. The repayment of funds to the SS Trust Fund is backed by the full faith and credit of the federal government. Don't let anyone tell you otherwise.

George Fulmore of CA 1:47AM August 17, 2010

Social Security is in large measure a welfare program. The benefits received by lower wage earners are significantly larger per dollar of contributions than higher wage earners. Also, higher wage earners generally are taxed on as mush as 85% of their benefit, whereas many lower wage earners pay no tax on their social security benefit. The welfare cost of social security is paid only by those who are forced to participate in the Social Security system. Many state and local government workers, including public school teachers, are exempt form social security. They have their own retirement program that pays benefits directly proportionate to earnings and contributions. Those workers bear none of the welfare cost of the social security system. The cost of the social security program should be divided between the welfare part and the real retirement part. All workers should have to contribute to the welfare part. It is not fair to those of us who are forced to pay into the social security system to bear all of that welfare cost burden.

Jake of OH 10:03PM August 12, 2010

It's really reassuring to look at the history of Social Security right now. Just as Social Security was strengthen with legislation over the years, eventually including minorities and women, and remains fiscally sound, health care reform will hopefully have a similarly rosy outlook. Dems usually don't get what they want on the first time around, but with persistence do the right thing. Richard Kirsch, former director of HCAN, has an excellent piece on this today: http://www.newdeal20.org/2010/08/12/what-social-security-can-teach-us-about-the-future-of-health-care-17373/

Bryce of NY 5:10PM August 12, 2010

I don't agree with either Marty's Pollyannish point, or Plebus' wild numbers (which is a twist on the unfunded liability game many play, often in misunderstanding, though sometimes just to muddy the dialogue. For instance, depending on your age, your personal unfunded liability for just your food for the rest of your life is probably in the tens of thousands. Add a roof over your head and clothes and you're already bankrupt. But that also skips all your income over those many same years. We have to look at BOTH sides of the ledger.)
As to the true challenge for SocSec, it's 'account' has been spent by the federal government. Not Obama's fault nor Bush's; all presidents and congresses have been spending that -- at our electoral behest -- for decades. What SocSec has is a promise from the federal government to repay SocSec.
The problem is that the federal government doesn't have the money. So it must either increase taxes or borrow even more. But taxes are already high, and the debt is approaching astronomical, with interest payments alone rapidly approaching one trillion every year. And that's why they want to increase the retirement age, increase payroll taxes more, etc. Soon the COLA formula will also be 'revised' to 'more accurately' compensate for inflation, which will also add to the taxes you pay (indexed tax brackets) and reduce what you receive from SocSec, etc. And we've all known this day was coming for at least the last couple of decades. But we've willfully kept our heads in the sand the entire time.

waldo of RI 10:19AM August 12, 2010

The media keep promoting the nonsense that the government has saved money in a Trust Fund to pay SS recipients. The surplus receipts beyond pay-outs of SS have been spent in the year received since LBJ started the practice to reduce deficits in the 1960s. NO money has been saved, and this year $41 billion in payments will be billed to the general budget.
The Trust Fund has Treasury Bonds in it, which are IOUs the government will pay, but it does not have any money saved to pay. The government must get the money the way it gets money for everything else--tax or borrow. SS will compete with all other funding needs. And we are talking about trillions of dollars.
The mythical Trust Fund gives the people the impression that SS has money it does not have. Why does US News and the rest of the media promote this lie?

art woods of IL 9:53AM August 12, 2010

While I would like Social Security to continue to go on and on it simply cannot happen. It is fully unsustainable. The Government Accounting Office (a non-partisan government agency) even knows this. It would require somewhere between $60-70 Trillion in 30-50 years just to keep the program alive, that would be if ALL other government spending were halted. The current global GDP is $46 Trillion a year.
It isn't going to happen. Don't count on it. Don't count on the government helping anybody out. It can barely pay its own bills. It certainly won't be able to pay yours in the future.
If we want to keep the system around we need to gradually raise the retirement age, encourage people in their 30s to have more children, and find ways for people at retirement age to find more meaning in their work.
Ultimately a combination between rising medical expenses, longer life spans and not enough children in the rising generation that is killing Social Security.
There is no such thing as a free lunch. The idea of "retirement" has long been a misnomer. It isn't realistic as it stands.

Plebus of VT 8:46PM August 11, 2010

Nice to see a true discussion rather than the usual sky is falling social security fear mongering that the right loves to start and the media can't help but repeat without doing it's job of verifying the basis of the claims.
It's so sad to see so many yelling "keep government out of my health care and retirement" as they go to cash their checks or visit the doctor using medicare or veterans benefits :)

Marty of FL 4:03PM August 11, 2010