And, at the risk of being the skunk at the garden party, allow me to say that "do something" means restructuring them in the direction of privatization.Concerning entitlements, an issue that’s fallen by the wayside since the horrific Orlando attacks, there’s more bad news. Social Security will dole out additional money to beneficiaries. Is that a good thing? Not really—it’s only increasing by a whopping $2.50, which The Associated Press aptly noted is enough to maybe buy a gallon of gas. It’s Medicare; that’s where the cliff becomes more apparent after 10 years (via AP):Meanwhile, Medicare is expected to go bankrupt sooner than expected – 12 years from now. And some beneficiaries could face higher monthly premiums next year.The annual report from the trustees of the government’s two bedrock retirement programs warned that politically gridlocked Washington needs to act sooner, rather than later, to shore up finances and avoid upending the lives of millions of retirees and their families.Social Security’s trust funds are expected to be depleted in 2034, unchanged from the trustees’ projection a year ago. Medicare’s trust fund for inpatient care will be exhausted in 2028, two years earlier than previously projected.If Congress allows either fund to run dry, millions of Americans living on fixed incomes would face steep cuts in benefits.[…]After Social Security’s trust funds are depleted, the program would collect enough in payroll taxes to pay only 79 percent of benefits.Medicare’s problem is more immediate, and more complicated, because health care costs can change in unpredictable ways.Friendly reminder that 10,000 baby boomers today, tomorrow, and over the next two decades become eligible for their states’ respective Medicare and Social Security rolls. The ship of state sees the iceberg ahead—and we’re going to hit it unless we do something.
Friday, June 24, 2016
A bracing report from the programs' own trustees
Social Security and Medicare are headed for the precipice:
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Oh sure. The whole point of these social insurance programs was to avoid the pitfalls and pratfalls of privatization. Even Reagan did something and assured us these programs would continue to be there for seniors. It will be fixed.
ReplyDeleteHow? Don't say raise taxes. Not only can't it be done, it's an illegitimate answer, if one loves freedom.
ReplyDeleteOn April 20, 1983, Reagan signed a bill to preserve Social Security. At that bill signing, the president said words every Republican should heed:
ReplyDelete"This bill demonstrates for all time our nation's ironclad commitment to Social Security. It assures the elderly that America will always keep the promises made in troubled times a half a century ago. It assures those who are still working that they, too, have a pact with the future. From this day forward, they have one pledge that they will get their fair share of benefits when they retire."
Ironclad, dude, Ironclad!
ReplyDeleteThe market drop, and ones before, expose the dangers of such a plan, which usually entails diverting some or all of the money workers contribute to Social Security through their paychecks into private investment accounts. That would put individuals in charge of making smart enough investment choices in the market to make big enough returns to support themselves in retirement.
ReplyDeleteBut the reality is that’s not within reach for most individual people. During a market rout like Monday’s, many people will panic and sell. “We know a lot of people do what economists say is irrational, they sell at a low point,” said Dean Baker, co-director of the Center on Economic and Policy Research. Research shows that the best thing to do during a downturn is to hold out if possible. But that’s not how most people will react. “People see something like this and go, ‘I better get out,'” Baker said. “When they see the market start to go up, they say, ‘I better buy in,’ and then they’ve lost a lot.”
This is one of the big problems with privatizing Social Security: individual investors don’t tend to be that savvy in chasing higher returns. “A lot of people make wrong decisions,” Baker said. This is even true when it comes to retirement planning: Many people leave money on the table with their 401(k)s by not taking advantage of employer matches or cash out when they switch jobs and incur taxes. The point of Social Security contributions is to make saving for retirement mandatory, he pointed out. But “if you do that and then just tell people to do whatever you want [with the money], then a lot of people will make mistakes and end up with not very much in retirement.”
On a larger level, putting people’s Social Security contributions into private accounts makes them far more exposed to the irrationality of the market. “What’s beautiful about Social Security is that in the long the return workers get on contributions is linked to productivity growth and wage growth,” said Monique Morrissey, an economist at the Economic Policy Institute. “Whereas markets are notoriously volatile and often behave in ways that are not based on the fundamental strength and weakness of the economy.”
Read more at http://thinkprogress.org/economy/2015/08/24/3694668/stock-market-social-security-privatization/
"Individual investors don't tend to be that savvy." And this is being put forth from the commenter who accuses me of being outlandish for my use of the term "cattle masses." This is the heart of the leftist vision: The individual human being is too pathetically clueless to conduct his or her own affairs and needs to be led around by the nose by the enlightened overlords
ReplyDeleteAnd it doesn't matter the first molecule of rat shit what Ronald Reagan or LBJ or FDR said about SS. It's in its current state, and that's a fact. The way out is going to involve a major change to the whole notion that government can provide some kind of "social insurance."
ReplyDeleteLotsa nasty creatures lurk in the investment world. You gotta have a shark cage if you're gonna swim in those waters. It's run on fear and greed. Now those are 2 emotions that every spiritual seer that ever walked the earth recommend that we proscribe. You have to turn this into a cattle masses thing though. Well, cattle are smart enough not to wade into the river where gators abound.
ReplyDeleteIronclad dude, Ironclad. You don't like it, give yours back.
ReplyDeleteWhat's "ironclad"?
ReplyDeleteAlso, there are a lot of people of great integrity in the investment world, people who care deeply about their clients' financial well-being, people who view it as a calling.
Iron clad, lad, Ironclad!
ReplyDeleteWell, wish you could ask your beloved Ronnie what he meant by Ironclad. His words on protecting OASI
ReplyDeleteOnce again, we're at the point where the sputtering begins because you have no answer that hews to the statist model to the question of how to save SS & Medicare. You know they must privatize.
ReplyDeleteThere is no sputtering and the only MUST is that we save the Old Age & Survivor's Insurance plan and Medicare. Again, as our freely elected President of the United States of America Ronald R. Reagan declared on April 18,1983: "This bill demonstrates for ALL TIME our nation's ironclad commitment to Social Security." Call us cattle, call us what you will but a huge majority still agrees with him. Ironclad, lad, IRONCLAD, FOR ALL TIME!
ReplyDeleteIt's sputtering and you're still engaging in it. You have no idea how to save it without moving toward privatization, or you'd put forth at least an outline here.
ReplyDeleteOf course taxes, you think I'm stupid. We got taxed for our parent's generation. What other solution is there? Now call me a commie dog or a moo cow.
ReplyDeleteI noticed all the greed and fear fucks are using the Brexit as another excuse to shit and puke liquid losses all over us again.
ReplyDeleteAnd pay back the huge surplus they raided. I don't care if you take it out of their cold dead asses. Ironclad. For all time! Your freedom lover emeritus so declared.
ReplyDeleteYou can google the outline of plans to save it as well or better than I can. Or peruse and read a portion of the burgeoning bibliography. It is an issue and the overwhelming number of Americans want to save it. Stick that up your cattleman's heinie.
ReplyDeleteYou don't have to look far. Marco Rubio, the junior U.S. senator from Florida, is a member of the Senate Foreign Relations Committee and Senate Select Intelligence Committee proposed proposals in yours and my beloved (but not as beloved as you) National Review.
ReplyDeleteRead more at: http://www.nationalreview.com/article/384638/saving-social-security-and-medicare-marco-rubio
Your own personalble investment advisor is as much a hired gun and trained (brainwashed) go gettum commissioner as that pharmaceutical salesbroad who wows the docs with her revealing bodice. Bet they will be seriously hating on coming into return calls on Monday.
ReplyDeleteAn estimated -- and astounding -- $2.08 trillion worth of wealth evaporated Friday from Hong Kong to London to New York as a result of the vote.
ReplyDeleteThe full $2.8 trillion raided from the trust fund still is owed by the government to Social Security and most projections assume it will be repaid through some combination of reduced government spending, tax increases or federal borrowings.
ReplyDeleteSee, I knew you'd mention tax increases as if that were a legitimate option. And at $19 trillion in debt, where is the first subatomic particle of wisdom in borrowing a penny more?
ReplyDelete