Monday, April 23, 2012
SS Trustees Report
Wow. Combined the exhaustion date is 2033 - about 20 years from now. Not good news if you are 57 and have to wait 10 years before your full retirement age, is it?The Trustees project that annual cost will exceed non-interest income throughout the long-range period under the intermediate assumptions. The dollar level of the combined trust funds declines beginning in 2021 until assets are exhausted in 2033. Considered separately, the DI Trust Fund becomes exhausted in 2016 and the OASI Trust Fund becomes exhausted in 2035. The projected exhaustion date occurs two years earlier for the DI Trust Fund and three years earlier for the OASI Trust Fund and the combined
OASI and DI Trust Funds.
Over on DU the new claim seems to be that this rightwing nutty alarmism, and that the trustees think retirees live forever. But they don't, but hey, one thing you quickly learn about DU is that numbers are not friends to many there.The projected combined OASI and DI Trust Fund assets increase through 2020, begin to decline in 2021, and become exhausted and unable to pay scheduled benefits in full on a timely basis in 2033. However, the DI Trust Fund becomes exhausted in 2016, so legislative action is needed as soon as possible. In the absence of a long-term solution, lawmakers could reallocate the payroll tax rate between OASI and DI, as they did in 1994.
So now it is about four years until disability checks get cut if Congress doesn't act. According to the trustees possible fixes are:
No, there is no escape. SS has to be cut, and taxes have to be raised. The recommended increase would be 4.61% on top of the current payroll tax.For the combined OASI and DI Trust Funds to remain solvent throughout the 75-year projection period, lawmakers could: (1) increase the combined payroll tax rate for the period in a manner equivalent to an immediate and permanent increase of 2.61 percentage points (from its current level of 12.40 percent to 15.01 percent);1 (2) reduce scheduled benefits for the period in a manner equivalent to an immediate and permanent reduction of 16.2 percent; (3) draw on alternative sources of revenue; or (4) adopt some combination of these approaches. Lawmakers would have to make significantly larger changes for future beneficiaries if they decide to avoid changes for current beneficiaries and those close to retirement age.
Note that all of this ignores the real funding problem - there are no assets in the trust funds. SS-DI is running a deficit now and every year in the future, and we have to borrow the money to pay for it.
The shocker in this report is that the long-range deficit was increased so much, but that's because the economy has been so feeble:
The projected long-range OASDI actuarial deficit increased from 2.22 percent of taxable payroll for last year’s report to 2.67 percent of taxable payroll for this year’s report. Changes in economic projections, due to new starting values and revised assumptions, are the most significant of several factors contributing to the increase in the deficit.
Nope, the military "budget" will be drastically cut and all "monies" redirected to the SS fund.
Our way of life is non-negotiable you know.
That is, if our way of life is actually taking care of Americans.
Any other deviation from this plan means we are actually North Korea in disguise.
My suggestion: End the Congressional pensions and put them all in SS. I think that might get some action.
In the meantime we are going to have to start thinking about SS as a welfare program that will be means tested. It's not fair, it's just what needs to be done. Either that or we are Argentina.
This is why the GOP is running Romney. They want this problem to happen on a Democrat's watch. Because you know that at least HALF of the middle class will be means-tested out of the system. Maybe not right away, they'll just do the 1%ers first. Just like the income tax when it started; it will quickly absorb the majority.
Being 47, I foresee twenty years from now that I'll be "means tested" out of the Social Security I paid into AND I'll be whacked for a higher tax rate for my 401k dispersals. I'll be dropping dead on the job, if I have one.
exploit lower cost labor overseas and avoid payroll taxes.
They could place duties on imported manufactured goods
and used these funds to offset the loss of payroll taxes but
that would hurt corporations and the top 1 percent who are
gathering more of the total pie.
"Do you know how many trillions of dollars YOUR Local and Federal Government has invested with Mexico, China, the old Soviet block countries? Investments held in foreign currency? Government investments that greatly profit from that cheap labor abroad and a lower dollar."
Investments that profit even more when the dollar drops in value due to foreign currency exchange rates?
"Could it be that our own Government over the last several decades has been promoting to those fortune 500 companies, of which Government owns most through Bond - Loan investment / stock ownership [EXAMPLES: 82% stock ownership of Microsoft Corporation, Disney 61%, AOL - Time Warner 58%, EXXON 72%] to manufacture abroad so that Government would realize greater returns on their investments at the Peoples of the USA's expense in jobs and wealth retention?"
"In the 60's, most government investment funds were restricted to a cap of 5% to a maximum of 10% invested outside of the USA. By 2000, that restriction has been increased in many a case to over 45% and in some cases no restriction at all per percent of International investments held."
"Is the big picture coming into view for you yet? I sure hope so!"
Links to this post: