Fixing Social Security in the US

[Sam Or I]

How would you go about trying to fix it?

I do not know the whole solution, but one glaring thing that needs to be changed is the age a person can collect. Originally it was set one year after the life expectance of the average male citizen at the time. I think it should be reviewed every ten years and the age should be adjusted for the life expectance of males. (Females live longer.) This would make the age around 71 today.

[Darth Wong]

How would you go about trying to fix it?

I do not know the whole solution, but one glaring thing that needs to be changed is the age a person can collect. Originally it was set one year after the life expectance of the average male citizen at the time. I think it should be reviewed every ten years and the age should be adjusted for the life expectance of males. (Females live longer.) This would make the age around 71 today.

Raise the retirement age you suggest, fold the entire program into the welfare system, fire thousands of newly redundant civil servant paper-pushers, and pass strike-breaker laws to keep the civil service unions from butt-fucking the state in retaliation.

[Illuminatus Primus]

Mike is right, part of the reason for the U.S. incompetence is the useless and ridiculous pretense of pretending social security and all manner of public welfare services are distinct. Terminate social security and merge it the welfare system and fire the employees, eliminate payroll taxes entirely and fund the system from general revenue with particular nod toward progressive income taxes making up the different from the eliminated payroll. And if we had real public health care we would not need a veteran's administration and vet hospitals and all this bullshit. There would be public care and that's that.

[Mr Bean]

Raising the retirment age is the biggest, thing, fuck we have enough access to enough drugs most people can keep working to 75 with ease. Set the retirement age to say 75 would in one fell swoop solve most of the issue.

Baby-boomers an issue? Most of them will now be dead before they can collect and the extra ten years gives us alot of economic breathing room. Remember all the American social security projects assume everyone lives to 80 and collect 15 years of Social Security, if the age were set at it's correct live-time limit of 75 that issue would go away in a very large part.

Plus I like Mike's Welfare idea

[Gerald Tarrant]

How would you go about trying to fix it?

I do not know the whole solution, but one glaring thing that needs to be changed is the age a person can collect. Originally it was set one year after the life expectance of the average male citizen at the time. I think it should be reviewed every ten years and the age should be adjusted for the life expectance of males. (Females live longer.) This would make the age around 71 today.

One thing would be to immediately move Social Security Administration funds out of the control of Congress. (How you'd do that I have no idea.) Currently Congress treats SSA funds as general revenue, spending un-needed money and plopping a T-Bill/IOU in the "Trust Fund". [Pedantic Moment] So "technically" the SSA is fine, it's now just a general Budget Problem [/end Pedantic Moment]. Since the budget problem is brought about by mismanagement of Social Security funds, I'd call it a Social Security problem. In comparison to the SSA's rate of return on "excess funds", we have some well managed pension programs.

Here's the CPP's (Canadian Pension Plan? or maybe it's something French?) performance Link

Direct from their Parliamentary Report
CPP Website

_________________YTD 08__'07_____'06____'05
CPP Fund_________119.4____116.6___98.0___81.3
Net contributions____2.2_____5.5_____3.6____4.5
Investment income__0.6_____13.1____13.1___6.3

numbers are in Billions.
(sorry about the underscores, but I was having some issues having the thing stay in columns, and this was the simplest fix [emo] I fail at BBCode[/emo])

The performance of Canada's investments certainly argues for independent management. Maybe we could copy their program? Those growth rates trounce the growth on T-bills, so for there's no reason for the SSA to continue to draw pathetic interest rates it gets from Congressional IOU's. Maybe there's some way Congress can pay some of the trust fund back to the SSA so they can do proper Pension management. That would stretch the life of the trust fund from 2041 (with current crappy T-Bill growth rates) to who knows when.

[SirNitram]

Removing the 'Income Cap' would also be smart. Unless for some reason Regressive taxes turn you on.

[Rightous Fist Of Heaven]

How would you go about trying to fix it?

I do not know the whole solution, but one glaring thing that needs to be changed is the age a person can collect. Originally it was set one year after the life expectance of the average male citizen at the time. I think it should be reviewed every ten years and the age should be adjusted for the life expectance of males. (Females live longer.) This would make the age around 71 today.

Raise the retirement age you suggest, fold the entire program into the welfare system, fire thousands of newly redundant civil servant paper-pushers, and pass strike-breaker laws to keep the civil service unions from butt-fucking the state in retaliation.

Someone should seriously do some of that firing of the paper-pusher's here. I shudder when I consider, that our government employs over 550,000 bureaucrats who simply push fucking paper. That's twice as much as friggin Japan, and Japan has a population 25 times higher than Finland. *sigh*

[The Duchess of Zeon]

Removing the 'Income Cap' would also be smart. Unless for some reason Regressive taxes turn you on.

Gods yes.

For non-Americans: Currently there is an income cap of about 65,000 USD on social security taxes--any money you make above that does not get taxed for social security. Eliminate the cap, so 100% of national income gets hit with the social security tax, and raise the retirement age to 75 (the present life expectancy is 76 - 78, IIRC).

[SirNitram]

Removing the 'Income Cap' would also be smart. Unless for some reason Regressive taxes turn you on.

Gods yes.

For non-Americans: Currently there is an income cap of about 65,000 USD on social security taxes--any money you make above that does not get taxed for social security. Eliminate the cap, so 100% of national income gets hit with the social security tax, and raise the retirement age to 75 (the present life expectancy is 76 - 78, IIRC).

Which was it that introduced the Payroll Tax in it's current form? Wasn't it Reagan? A beautiful increase in taxation only on the ones who are in the middle and lower.

[acesand8s]

Gods yes.

For non-Americans: Currently there is an income cap of about 65,000 USD on social security taxes--any money you make above that does not get taxed for social security. Eliminate the cap, so 100% of national income gets hit with the social security tax, and raise the retirement age to 75 (the present life expectancy is 76 - 78, IIRC).

To nitpick, the income cap is now over $100K and has been over $65K for over a decade now. And benefits are a function of how much you pay in; so a person making $500K but only paying based on the first $100K of income is eligible for $100K of income worth of benefits rather than $500K. Our situation would likely be worse if it weren't for the cap. Yes, previous years would have seen more money coming in, but the government would have simply spent it on other things and thrown more Treasuries (in other words, IOUs) into the Social Security Trust Fund). At the same time, the program would currently have more obligations (those that paid in all their income rather than up to the cap are entitled to full benefits on income, not just benefits up to that cap).

Now, the income cap system made sense in light of what social security was intended to be, the retirement plan for everyone. Once you transition to more of a welfare type system, retirement only for those who need it (and benefits based on need rather than what was paid in), there's no need for the cap.

Which was it that introduced the Payroll Tax in it's current form? Wasn't it Reagan? A beautiful increase in taxation only on the ones who are in the middle and lower.

Actually, IIRC, the program has always used an income cap and has simply been indexed to inflation since the 1970s.

***

Beyond changing the fundamental nature of the program, a major way to help out the program would be to have the government stop raiding the till. Instead of using the excess proceeds to fund other holes in the budget and sticking Treasuries into the Social Security Trust Fund, the money should be invested. After all, state and municipal governments have their own pension funds (CalSTERs and CalPERs are for all intents and purposes the California Sovereign Wealth Fund these days), there's no reason the Federal government couldn't do the same. It may be too late for that now, given that cash outflows and inflows will reverse in the near future. At the very least though, the fund can invest in Ginnae Mae mortgage backed securities rather than Treasuries, as the Ginnae Mae bonds are explicitly backed by the full faith and credit of the US government (making them equivalent to Treasuries except for the prepayment risk on mortgages) while offering higher yields.

Anyway, no matter what happens to fix social security, I'm assuming I'm going to get screwed over: paying in for benefits of current recipients but never receiving anything.

[The Duchess of Zeon]

*smirks* You automatically assume that just because we eliminate the tax cap, we must eliminate the benefits cap. No, no, that simply won't do.

[Darth Raptor]

No, no, no! You must never cease fellating the bourgeoisie or they'll leave (they'll leave!)! They'll flee the country and take all their wealth with them! You know, the wealth they're hoarding in Scrooge McDuck money bins that never sees the light of day!

[nesaminos]

Raise the retirement age you suggest, fold the entire program into the welfare system, fire thousands of newly redundant civil servant paper-pushers, and pass strike-breaker laws to keep the civil service unions from butt-fucking the state in retaliation.

Is there any way to fix the system that might actually work? While these ideas would most certainly fix the problem, is there any alternative way of doing this without pissing off all the baby boomers looking forward to retirement, along with the thousands of newly unemployed, unnecessary paper-pushers? Of all the ideas posted here, the only one I see that wouldn’t get a politician voted out of office would be removing the income cap.

[Gerald Tarrant]

Is there any way to fix the system that might actually work? While these ideas would most certainly fix the problem, is there any alternative way of doing this without pissing off all the baby boomers looking forward to retirement, along with the thousands of newly unemployed, unnecessary paper-pushers? Of all the ideas posted here, the only one I see that wouldn’t get a politician voted out of office would be removing the income cap.

Upping the retirement age is more manageable if it's phased in slowly; I.E. people retiring in the next 2 or 3 years don't get SS benefits 'til they're 66, people retiring in the next 4 years won't get their benefits until they reach 67, and so on. That would give the people who were counting on Social Security a chance to adjust their finances. That would be partly political necessity, and partly to avoid putting 65 year old retirees in a pinch when their expected benefits don't come due for ten more years. It would be historically ironic if the reforms for preserving Social Security left many seniors unprepared and poor. This isn't unrealistic politically if it's phased in slowly.

Making Social Security an independent agency (which reports to congress), or giving it more control over its finances isn't controversial. As a matter of fact, I remember Al Gore running a campaign back in 2000 where one of his main selling points was that he was going to put the Trust Fund in a "Lock Box"*. Aside from the silliness of that soundbite, I don't think anyone found that idea all that controversial. I think most Americans would have no objections to similar measures which keep the SSA's funds out of Congressional coffers. Of course Congress would need to be a party to such an arrangement, but a popular President might be able to make it happen

*I'm pretty sure the problem with the trust fund isn't that Congress won't pay it back, rather it's the fact that the SSA has no control over it, and is earning very little interest from it.

[acesand8s]

There is also the rather unpleasant solution of raising taxes. From what I remember, a 3 percentage point increase in payroll taxes would solve the problem. The income tax structure could also be changed such that the tax rate below the social security income cap is reduced by 3 percentage points as well, which would make it tax neutral for the tax payer. Of course, that just brings us back the real issue: the federal government needs to get its finances in order.

*smirks* You automatically assume that just because we eliminate the tax cap, we must eliminate the benefits cap. No, no, that simply won't do.

The government thus far has been very meticulous to avoid the accusation that social security is income redistribution. My point was that that needs to change before you can change the income cap but not the benefit cap.

[Darth Wong]

The government thus far has been very meticulous to avoid the accusation that social security is income redistribution.

Well yes, that's part of the problem: America's idiotic notion that wealth redistribution is some kind of "enemy" concept that should never be considered in any form even though the wealth gap has been steadily growing for 30 years. I guess they're waiting until it gets so bad that Marie Antoinette's ghost exhorts the starving crowd to eat cake.

[The Duchess of Zeon]

The government thus far has been very meticulous to avoid the accusation that social security is income redistribution.

Well yes, that's part of the problem: America's idiotic notion that wealth redistribution is some kind of "enemy" concept that should never be considered in any form even though the wealth gap has been steadily growing for 30 years. I guess they're waiting until it gets so bad that Marie Antoinette's ghost exhorts the starving crowd to eat cake.

We could actually eliminate income taxes for everyone making $50,000.00 a year (or less) if we had European levels of taxation on those making more than 50k a year. That's how bad the wealth gap is, such a tax scheme would actually be revenue-neutral.