Over at Forbes, I summarize the new plan from Rep. Sam Johnson (R-TX), which reduces benefits for higher earners, introduces a new minimum benefit for low earners, and establishes new incentives to delay retirement. Check out it here.
Friday, December 9, 2016
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A lot of words, but it all boils down to repackaging a pile of manure. First, the unfunded liability for SS-OASI is far closer to $35 Trillion. This means if SS-OASI ha another $35 Trillion no changes would be needed.
The $11 Trillion is based on the 75 years solvency period. This includes all revenues over that 75 year period and all OASI benefits paid out over the next 75 years. What it does not include is liability of those who do not reach retirement age during that 75 year period. A full retirement age of 69 would mean anyone now age 6 and under would pay SS-OASI taxes all their life only to face the problem SS-OASI faced in 1950, 1976, 1983 and now once again.
Andrew Bigg's does not once identify what the value of SS-OASI is. What is its value? Its value is relative to how old you are. Clearly a person who is retired believes SS-OASI has value. A new worker age 18 may look at it as a money pit that has little value.
What is the value of a 10.6% OASI payroll tax? If applied to a 30 year mortgage, it would be paid off in 14 year 7 months. To replicate the current SS-OASI benefit takes 7-8% payroll tax. Why is it 10.6% and still not enough without drastic changes?
"Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits."
They paid meaningful benefits without those born prior to 1938 (single) and 1945 (married) paying meaningful payroll taxes. This created the legacy debt.
Repackaging ie Social Security Reform is bogus. The millennials and their others outnumber all boomers and seniors. STOP the Ponzi scheme. Don't make the mistake the boomers did in 1983!!
Social Security was never fair, cannot be made to be fair and will forever drain workers of their ability to participate in the American Economy. If you you cannot participate like the rich, you will always create more dependency.
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