Writing for the McClatchy Syndicate, the Mercatus Institute’s Jason Fitchtner and Fred Kilbourne argue that Social Security’s financial problems are larger and more pressing than you may think:
The 2014 report projects depletion of the combined Old Age, Survivors, and Disability Insurance trust funds in 2033. Social Security has no borrowing authority, and after the trust funds are exhausted there is only enough payroll tax revenue to cover a projected 77 percent of benefits; meaning future benefit payments must be reduced by about 23 percent. But the resulting cut in benefits will actually be much worse for retirees, workers and the economy if we don’t act now to reform Social Security.Check out the whole piece here.
Posts
1 comment:
"But the resulting cut in benefits will actually be much worse for retirees, workers and the economy if we don’t act now to reform Social Security."
Let me understand this. Social Security is projected to cut benefits by 23% and that is bad. The writer want us to address the problem now so as to minimize the effect on the economy in the future.
Today's boomers have transferred more than $14 Trillion in value to Social Security during their working lives, only to have none if it perform any work; ie interest. 95% of all taxes have been paid out immediately in the form of benefits.
So what does the write propose? Do we cut payroll taxes and faze out SS allowing workers to save more? This would cut benefits, which reduces spending now and in the future. Do we want workers to save more today which will reduce spending which has a negative impact on the economy.
The problem is that there is no way to address 77 years of transferring wealth from one generation to another in the expectation that following generations will do the same on an ever increasing rate.
The sad truth is that it will take a generation for this mess to work its way through. If we attempt to extend Social Security's life by artificial means or increases in taxes, we will only axcerbate the problem.
The wealth has been spent! The ponzi scheme is crumbling before our eyes for all to see.
Post a Comment