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Okay, so one of my pet peeves is people repeating stuff that just isn't true. I don't mean rumors that I'm sleeping with Jason's ex-girlfriends. Hell, that sort of thing is perfectly okay. Tell all sorts of rumors, true or not, about me that you want. No, I mean things like
One of the ones that I heard last week was that Social Security will be bankrupt before we retire.
Under reasonable assumptions, it's just not true. What do I mean by reasonable assumptions? Like we leave the laws around it alone. We could always make Social Security into a dishwasher funding law, but I'm assuming we won't.
Right now, under the Social Security Trustees projections, Social Security is fully funded through 2041. Under the Congressional Budget Office projections, it's fully funded through 2046. What does that mean? It means that all planned benefits can be fully paid. Benefits go up faster than inflation, actually. That's important for what happens after 2041 (or 2046, under slightly more optimistic projections). At that point, benefits can be paid out at 75% of what's currently planned for those years. 75% of plan at that point is better than if current benefits were indexed to inflation. In other words, retirees after 2041 will be collecting more money, adjusted for inflation, than current beneficiaries.
That's with no changes whatsoever.
Let's also point out how far out that actually is. 2041. I will turn 65 in 2035. I will be 71 when Social Security goes
This point is so far in the future that if we make really minor changes to the funding (I know, my assumption was no changes, we're moving on to another part of the argument), like lifting the cap on wage income that is subject to the tax, it will be fully funded forever. Right now if I made 150,000 a year, only the first 90,000 or so would be subject to F.I.C.A. (the tax used to fund Social Security). Poor people pay a higher percentage of income for F.I.C.A. than rich people do.
However, if the economy does as well as it did in the 1970s and 1980s, no changes will be needed. We don't even need to assume that the economy will be as good as the Clinton years. The economic assumptions in the Social Security Trustees projections assume we won't do as well as the 1970s. They are extremely conservative (not in the political party sense) assumptions.
To sum up: don't panic.

you can't get ticketed for driving too fast in Montana.Stuff that just isn't true.
One of the ones that I heard last week was that Social Security will be bankrupt before we retire.
Under reasonable assumptions, it's just not true. What do I mean by reasonable assumptions? Like we leave the laws around it alone. We could always make Social Security into a dishwasher funding law, but I'm assuming we won't.
Right now, under the Social Security Trustees projections, Social Security is fully funded through 2041. Under the Congressional Budget Office projections, it's fully funded through 2046. What does that mean? It means that all planned benefits can be fully paid. Benefits go up faster than inflation, actually. That's important for what happens after 2041 (or 2046, under slightly more optimistic projections). At that point, benefits can be paid out at 75% of what's currently planned for those years. 75% of plan at that point is better than if current benefits were indexed to inflation. In other words, retirees after 2041 will be collecting more money, adjusted for inflation, than current beneficiaries.
That's with no changes whatsoever.
Let's also point out how far out that actually is. 2041. I will turn 65 in 2035. I will be 71 when Social Security goes
bankrupt. 33 years from now. Social Security was in worse shape in 1986 than it will be in 2041, and with a decent change was fixed. 22 years ago. It's had a surplus since then and we won't even be dipping into the surplus for another 20 years or so.
This point is so far in the future that if we make really minor changes to the funding (I know, my assumption was no changes, we're moving on to another part of the argument), like lifting the cap on wage income that is subject to the tax, it will be fully funded forever. Right now if I made 150,000 a year, only the first 90,000 or so would be subject to F.I.C.A. (the tax used to fund Social Security). Poor people pay a higher percentage of income for F.I.C.A. than rich people do.
However, if the economy does as well as it did in the 1970s and 1980s, no changes will be needed. We don't even need to assume that the economy will be as good as the Clinton years. The economic assumptions in the Social Security Trustees projections assume we won't do as well as the 1970s. They are extremely conservative (not in the political party sense) assumptions.
To sum up: don't panic.

no subject
Date: 2008-04-17 06:33 am (UTC)That's an important and foreboding proviso, considering that a "budget surplus" is an impossible faerie tale, and years of deficit spending are just growing the interest payments. And rest assured that if a balanced budget were ever passed or some unexpected windfall occurred, the Congress would spend that shit faster than a drunken sailor in Olongapo on payday.
no subject
Date: 2008-04-17 06:48 am (UTC)no subject
Date: 2008-04-17 07:34 am (UTC)Or, more money to spend.
But yeah, health care is the killer, but how does it get resolved?
no subject
Date: 2008-04-17 07:41 am (UTC)no subject
Date: 2008-04-17 04:36 pm (UTC)I think you missed the agreement and subsequent subject change, or is the lack of answer to my question your answer (it seems to be effectively everyone else's answer)?
no subject
Date: 2008-04-17 04:43 pm (UTC)no subject
Date: 2008-04-17 05:31 pm (UTC)no subject
Date: 2008-04-17 06:07 pm (UTC)no subject
Date: 2008-04-17 09:12 pm (UTC)It has bullet-points.
So, are you going to give a spoiler and answer yes or no to there actually being an answer to fixing health care (in such a way as to unfuck the projected costs to our government without simply throwing people to the wolves)?
no subject
Date: 2008-04-17 10:07 pm (UTC)no subject
Date: 2008-04-17 10:22 pm (UTC)no subject
Date: 2008-04-17 08:38 am (UTC)Tiptoeing into here, I am following this thread/post with interest.
In Italy we have had and still have plumbeous scenario that seems to be without solution (in short: no more money in the future for retired people, ever, for nobody, we give our Retirements State Funds Service and Social Security half of our grosso wages and we are sure we won't get anything back when we retire, simply because this money is already covering debts). Reading about US though is really interesting. Thanks.
no subject
Date: 2008-04-17 10:15 am (UTC)The reality is, Social Security is bankrupt...heck, technically the entire federal government is bankrupt, if we held governments to the same standards as normal economic entities. However, we don't hold them to that standard, and the long reach effects of pronounced deficit spending are still to be determined.
I honestly think, at this point, any long term forecasting of funding, the economy, or any other such highly volatile public/social entity is going to be wildly inaccurate. Saying Social Security is going to be around in its current effective form or saying it won't is a stab in the dark.
no subject
Date: 2008-04-17 02:15 pm (UTC)