tag:blogger.com,1999:blog-7334408760351487944.post3054891542647421141..comments2023-11-12T06:43:00.060-05:00Comments on Notes on Social Security Reform: New paper: “Social Security Reform Could Benefit All Workers”Andrew G. Biggshttp://www.blogger.com/profile/16617460431856611873noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7334408760351487944.post-10010389087077915022014-02-06T13:11:03.378-05:002014-02-06T13:11:03.378-05:00You cannot get something from nothing and there is...You cannot get something from nothing and there is no free lunch. However, it never ceases to amaze me how many try to perpetuate some fix to save social security. I have seen them all since 1970. I have read about the big fix of 1950 (raise the tax by 50%, base by 50% and enroll the other half of workers who were not covered in 1937). All this did was create a second tier Ponzi scheme to support the first one created in 1937.<br /><br />But then in 1970 SS-OASI ran out of new workers to enroll and so we saw huge increases in the base and tax.<br /><br />By 1983 SS-OASI had exhausted it trust fund. Congress authorized borrowing $11 Billion from Medicare and SS-DI trust funds. This was paid back from the increase in payroll tax, base, retirement age and the increase in taxable SS benefits. This "Save Social Security" was projected to work until 2064.<br /><br />Here we are 2014 and SS is projected to exhaust the trust fund (can't due to 1984 legislation) in 2031. Does anyone really believe this? We have treasury rates at below 3%; we have labor participation rates of 7% below normal.<br /><br />We now have people saying raise the retirement age. For each year increase in retirement age, the work pays one additional year and delays benefits by 1 year. If you were doing this with you 401K or IRA you would extend your assets by 2.6 years.<br /><br />The increase in life expectancy is increasing by just 17 days per year at age 67per new cohort. In fact the rate of change in cohort life expectancy at age 67 is slowing, not increasing.<br /><br />Social Security is imploding; the US Treasury has not balanced a general budget since 1957 and now has $17 trillion in debt. Where on earth do you think these resources will come from to save Social Security? When a person is bleeding to death, you put a tourniquet on and cut your losses.<br /><br />Adding a solvency tax - what will with do to savings, spending and ultimately jobs? Keep in mind each time the Payroll tax increased, the national savings rate dropped. Is the purpose of social security to enslave workers and make them dependent on government? If so they are doing a fantastic job.<br /><br />WilliamLarsenhttps://www.blogger.com/profile/00226403551284640494noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-64425710351006939162014-02-05T12:22:20.707-05:002014-02-05T12:22:20.707-05:00If you can delete the last comment, I would apprec...If you can delete the last comment, I would appreciate it. The proposal adds a 'solvency tax'. <br /><br />I still think that the proposal statement that it is means testing is not accurate. JoeTheEconomisthttps://www.blogger.com/profile/15000542138416955049noreply@blogger.comtag:blogger.com,1999:blog-7334408760351487944.post-79924346593921388342014-02-05T10:48:27.898-05:002014-02-05T10:48:27.898-05:00Andrew,
I have to question their research with ba...Andrew,<br /><br />I have to question their research with basic math.<br /><br />CBO projects that the Trust Fund will be exhausted in 2031, or 17 years (that is in an economy which cooperates)<br /><br />A man 67 today expects to live about 17 years. So we can't promise anyone under 67 today scheduled benefits.<br /><br />Mind you, just because someone was a high-wage earner in life, does not mean that they aren't in poverty today.<br /><br />So I question not only the math but the way that the research is presented.JoeTheEconomisthttps://www.blogger.com/profile/15000542138416955049noreply@blogger.com