University of Illinois economist Jeffrey Brown, a former member of the Social Security Advisory Board, writes for Forbes that proposals to raise Social Security benefits without fixing the program’s finances could make America’s retirees worse rather than better off.
Check out his piece here.
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"The program is already running cash flow deficits, meaning that the payroll and income tax revenues coming in to support the program are not sufficient to pay for the monthly checks being sent to beneficiaries. This problem is projected to worsen every year for the foreseeable future thanks to the Baby Boomers entering retirement in droves."
It is just amazing how a writer blames baby boomers for Social Security's demise. Not one boomer was alive in 1935 when the Social Security Act was passed. No one boomer was alive when A.J. Altmeyer testified in 1943 and 1944 that Social Security was insolvent/broke and that the payroll tax of 2% should be IMMEDIATELY raised to 7% or more or future workers would pay far more for their benefits than they were worth.
The only thing boomers can be blamed for is not voting against politicians who supported the big fix of 1983 which just kicked the can down the road. The big fix of 1983 projected the trust fund would be exhausted in 2064. What a bunch of idiots to pass such a bill. Knowing that the same problem faced 1957- 1965 and 1971 - 1983 would occur again with the same outcome.
PONZI SCHEMES always fail.
Altmeyer said that Congress should not delay the increase from 1 percent to 2 percent. Part of the problem is the reality that a workable PAYGO program is not intuitive. As people live longer and the costs increase, the income/premiums/taxes (whatever you want to call them) do need to increase. People like William cannot understand that and think it the same as a Ponzi scheme.
Brown misleads as well. The statement above is only true because he has carefully excluded interest earnings. Any program will have revenues below costs if you ignore part of the revenues.
If we want SS to do more (or continue as scheduled), we will have to raise taxes. The debate we need to have is whether we think it is worth it.
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