Academy of Actuaries states the FACTS about Social Security

After reading the usual GOP lies about Soc Security in a post at DU, I wondered why both Dems and GOP'ers do not use the one unbiased source that is also accurate and which is easily available. My goodness - the Academy of Actuaries even has a simple solve the Soc Sec funding game set up at:

http://www.actuary.org/socialsecurity/

which considers:

Benefit Reductions
Gradually increase retirement age for full benefits.
Reduce cost-of-living adjustment (COLA) by 1/2 percentage points.
Reduce benefits by 5% for future retirees.
Affluence Test: Reduce benefits for those whose total retirement income exceeds $45,000 per year.

Revenue Increases
Raise payroll tax on workers and employers by ½ percentage points each.
Increase wages subject to Social Security tax.
Tax Social Security benefits like pension benefits.
Include new state and local government workers.

Investing in the Private Sector
Invest 40% of the Social Security Trust Fund in private investments such as stocks.
Create personal retirement accounts (Divert 1 percentage point of payroll tax to a private account).

Now of interest are the facts that jump out at you if you read through the information. The Academy notes that the life expectancy at birth has increased from 61 to 76 since 1935, a GOP point , and tells you what the effect of age changes for retirement are (hint we do not need a 15 year increase to age 80, since the cost really depends on the life expectancy remaining at "Normal Retirement Age")

So keeping Reagan's age 67 retirement (currently effective for those born after 1959) solves 26% of funding problem if after age 67 becomes the effective "normal retirement age" we index that age for further mortality improvements.

A cola adjustment of subtract 0.5 adds 37% more of the needed funds - but DOL says not really needed.

53% of the cost is easily met with the current wage cap and a 1% payroll tax increase (0.5% to employee and 0.5% to employer)

Simply removing wage cap and of course paying the rich additional benefits based on the current formula for their additional earnings above the current cap, solves 77% of the cost problem. Just raising the cap by 20,000 solves about 26% of the funding problem

Including new State Gov workers solves 11% of the Funding problem.

Moving 40% of the Trust fund to non-gov bond assets - real estate and stock - solves 48% of the funding problem using Bush administration estimates as to yield differences (proving more that the GOP lies a lot rather than that we should invest the trust fund in real assets - but I still like the idea as it prevents the rich from financing tax cuts for the rich via Social Security payroll tax surpluses).

Investing in private accounts solves ZERO PERCENT of the funding short fall, PLUS TAXES GO UP FOR SEVERAL DECADES to pay for those currently retiring or retired. A DISASTER that the media refuses to talk about.

Convert Soc Sec to welfare system (from a universal program for retirement to a poverty program) with means tested benefits and no benefits to those over 45000 per year income solves 85% of the funding problem. A GOP goal that -eventually - moves this "welfare cost" down to the states and onto sales tax collections - and reduces the income tax on the rich.

Below are Slides and discussion - including a bit of Concord data - that is reflected above.

http://www.actuary.org/pdf/socialsecurity/briefing_041604.pdf
http://www.actuary.org/pdf/socialsecurity/benefit_04.pdf

The PDF below on Medicare: this is a simple "Yes - there is a problem - only 80% of current benefits can be paid by current taxes after 2019" discussion - it has no recommendations.

http://www.actuary.org/pdf/medicare/financial_march04.pdf

..is eliminate that laughably low cap on taxable wages. Eliminate it completely, have it apply to ALL income, and give the rich that flat tax they always claim they wanted.

By the time they get back into power and overturn it, social security will be solvent for a century or more.

Seems so simple -

meanwhile we get books on huge liabilities that depend more on armchair assumptions than they do on demographic facts on the ground - and then add the GOP's intergenerational unfairness must be undone (meaning killing social security) -

In the class war the GOP is running - the rich win if the GOP win.

will be plenty of money coming into Social Security.

Of course we could've paid down the debt so that we could afford to borrow when we need it for that "blip" of baby-boomers (me and my generation).