I will NOT cite the source, I have to go to bed, so I do not have time to look for it but it is on the net, but the so called Social Security crisis is a made up crisis. It is made up by running Social Security numbers assuming the worse case for the economy and compare that to a private program based on the best case for the Economy. Yes, if we assume that the economy will do worse then it has since 1980 (and much worse NOT a little bit worse) Social Security is in real problems. The problem is so would any private program in the same economy.
Republicans then compare this worse case scenario for Social Security with a best case scenario for a private plan. In such a comparison the Private Plan is better, but if we use the same economic assumption as use in the Social Security estimate, the private plan is WORSE then Social Security. Thus this is in reality a non-problem EXCEPT if the Economy tanks for the next 50 years. If the economy does tank, we have to do radical changes to Social Security, but that same is true if you had private retirement plan, you will have to do similar if not the same radical changes. Simply put Social Security is NOT in Danger, if Social Security taxes are still collected and applied to Social Security. What danger possible for Social Security is the same danger any private plan will also have to deal with,
Now there is a possibility of a problem for Social Security starting in about 2012, that is about when Social Security Taxes collected each year is less than what Social Security is to pay out. Social Security then has to go to the Treasury and ask the Treasury to start returning all the excess Social Security Taxes collected since 1982. The Treasury will have to go to Congress and ask Congress to increase Income Taxes to pay back the Social Security taxes collected but already spent. In many ways this is what the GOP see and fears. A demand to increase Income Taxes to pay for things the GOP has paid for with Social Security Taxes since Reagan. This is the only way to pay back to Social Security the taxes collected and NOT spent on Social Security since 1982. This issue is NOT even being discussed by either party, but the GOP is lying the Ground work to say it is a Social Security Problem NOT an income tax problem. The Democrats are avoiding the issue but it will be a larger and larger issue as this century goes on. Someday the Treasury will have to repay to Social Security the Taxes paid, have Congress borrow the money to pay Social Security back, have Congress raise Income Taxes to pay back Social Security, or have Congress declare the money spent and Social Security will not get the money back (What I believe the GOP wants to do, but it would be political Suicide, but the GOP is setting up a frame work to do just that, declare the money spent and NOT returnable to Social Security).
Now, many economist do mention the problem with Medicare, but try NOT to combine it with the problem of Health Insurance. At the present time, Social Security is barely collecting enough taxes reserved to pay Medicare (The Social Security Taxes are in really two taxes, a tax for Social Security Retirement and a tax to pay for Social Security Medical Care). Within 1-2 years that will change, i.e. Medicare will need more money then the tax to pay for Medicare brings in. The larger Social Security Tax for retirement can be used to over this over for a few years (And that is expected) but it still is an issue that will have to be addressed. I.e. Raising Taxes to pay for Medicare. Another issue the GOP want to spin to be a Social Security problem NOT a problem involving National Health Insurance or even Income Taxation.
This is all the fault of the Baby Boomers. They paid higher then needed Social Security since 1982 and this year start to turn 62 and can apply for early Social Security. The number of baby boomers over age 62 will raise for the next 11 years and then start a slow decline for Seven more years and then you have a substantial drop. This is do to how baby boomers were born. The boom started in 1947, peaked in 1957 and ended in 1964 (they was a substantial drop off in Births between 1964 and 1965, so the baby boom was considered over by 1964).
Now not all Baby boomers will wait till AFTER they turn 65 before they retire and get full retirement benefits. Many will take early retirement at age 62 (Which for people born after 1960 will mean a 30% drop in monthly payments do to the Early Retirement). The 1982 changes in Social Security law slowly raise the full retirement age starting with people who were born in 1938. For Details see the following Site:
http://www.socialsecurity.gov/retire2/agereduction.htmPeople born in 1960 must wait till they are 67 before they can retire and get their full retirement rate. The GOP wants to ignore the fact that these Baby Boomers put more in Social Security since 1982, then was spent and that money was spent on GOP projects including the end of the Cold War. The GOP really want to end Social Security for then they do NOT have to vote to increase Income taxes to pay back Social Security. If the baby boomers would NOT be looking forward to retire at 62-67, there would be no crisis. The GOP believe low income people should work till they drop. Thus the need to increase Income taxes to pay back Social Security is all the fault of the Baby Boomers, if they would just NOT retire there would be no need to raise Income Taxes. And this is what the GOP is looking at, a demand that Social Security be paid to the Boomers even if that means raising Income Taxes. The GOP does NOT want any Income Tax increase, but you have to do that to pay back Social Security. The GOP is hoping by calling this a Social Security problem NOT a taxation problem they can ride it out and maybe even get re-elected.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
