BECKLEY— It happened a few years before expected but social security is now bleeding money.
Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that’s happened since the 1980s.
The deficits — $10 billion in 2010 and $9 billion in 2011 — won’t affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
—The Associated Press: Job losses, early retirements hurt Social Security
As is pointed out by other’s out there this is something that the liberal’s have ignored, something even President Obama cheered about, and now it comes home to roost as this video so blatantly shares.
Obama can be seen in the bottom left of the screen cheering when Bush says, “Congress did not act last year on my proposal to save Social Security.”
Further, even in the AP article there is the lie of the surplus. A surplus is something that is set aside and reserved for the future and has nothing to do with why payments will continue. Payments will continue because the Fed will just keep printing money. As there is no social security trust fund that lie is easily refuted. Deficits are there and most likely there to stay.
The easy option is just increase taxes and avoid real reform. This is what I expect congress and the president will do. I’d think that they’d raise the cap on the tax so they can say they only increased taxes on the top wage earners (a lie because of the match that employers will be forced to pay). This is the most deceitful and second easiest solution. Or they’ll just ignore it because we all know deficits don’t matter to this administration. They only matter to the American citizen who cares about the future of this country!
TennesseePaul
Stephen VanNuys
Brooklyn Daniel
The Freedom Thinker
Why do anything about the deficits? Just let our kids pay for it
http://www.ontheissues.org/2004/Dick_Cheney_Budget_+_Economy.htm
As we all know, deficits don’t matter to either side of our two party system:
“O’Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. “You know, Paul, Reagan proved deficits don’t matter,” he said, according to excerpts. Cheney continued: “We won the midterms (congressional elections). This is our due.” A month later, Cheney told the Treasury secretary he was fired.”
Good stuff! However, Bush at least tried to tackle the issue. That’s back when I admired him before he let me down with his bailout plan.
Yes, but the liberal lion: Paul Krugman, has already declare that “Deficits Saved the World.”
Funny how economic policty and logic is completely opposite for government than it is for every single citizen. Apparently the buck doesn’t ever stop…
The problem with Social Security has been prevalent for at least the past decade or so, but consistently avoided by politicians who are terrified by the potential of losing votes if they support reform.
To avoid increasing the deficit, there are limited options – mostly confined to variations of reducing benefits or increasing the SS tax.
Again, “third rail politics” are the major obstacle to solving this problem.
The statists have a big stake in derailing any solutions to the SS problem, since their playbook depends in great part on overloading the system until it collapses and then inserting their communism-light agenda as the savior to chaos.
Nice segue, eh?
Do you think that is a political miscalculation? If politicians put the right spin on it fixing social security could make them a hero? Privatizing it or eliminating it would be a heroic thing in my book. Do you think it’s a big risk and most American’s would support reform? I wonder how it polls or polled back when Bush tried.
Privatization of the system would not pass during an economic crisis. Especially like this one. The “best time” would have been during Mr. Clinton’s term in office. The memory of economic bad times was distant and, at the time at least, the future of economic bad times seem too far away to consider. Any solution which pegs the system to stocks, mutual funds, or whatever, right now would be DOA.
As much as I disagree with Mr. Obama’s “ideas” on Health Care Reform, he is right in once since. His charisma and character have made it possible to address the problem, despite it not being a major issue (economic revival and national defense are the more pressing problems facing our country). But because Health Care isn’t crippling everything, it seems “harmless” to address it and Mr. Obama had the wave to ride to bring it up and attempt to address it. His single biggest failure was shunning bi-partisan talks, belittling his opponents, and mocking their ideas on the process while attempting to force feed the country a socialistic political ideology wrought with loopholes, poor financing, and out right lies.
I don’t know that privatization is the answer given the climate of corporate rapacity that dominates our economic life, even in good economic times. I think there is perhaps a need to bridge the disconnect most people have between their behavior and the consequences. As it is now, our entire economic system, including retirement planning, is based on rewarding speculative and risky behavior and the continued flow of cheap money. Thus saving for retirement is disincentivized.
I’m not sure that I agree with you. How is speculation and risky behavior reward in retirement planning?
I agree that various types of agents and advisor may make it appear that speculation and risky behavior will be rewarded to individual clients however that is not the actual facts for example options and margin trading are high risk leveraged ventures which serve purposes for hedging various transactions but done alone and on margin one only has to watch “Rogue Trader” the true story of the crash of Barings Bank to see how dangerous such activity is. But this isn’t the entire system…
In my years of service in the financial industry I was rewarded the highest for the least speculative and least risky behavior. The greater the risk in the choice went up the less reward there was to advise/promote/sell that type of product. However, the better a client met the goals of the conservative choices the more I’d move the client along to higher risk areas. As their savings and insurance goals were met I’d move them to EFTs, Mutual Funds, etc. If they met those goals I would have then led them to individual stock investing. (I didn’t stay in the business long enough to move clients fully down that path.) But that was how I was rewarded in developing a client base. The company wasn’t a small one either with $280 billion in assets under management the company is tied for 1st place in their credit rating among financial firms. My experience as a financial services professional were not of risk but the avoidance of risk.
However, it is up to the client to make the choice. They choose the level of risk they want to take. Under the current scenario with social security if it was privatized the individuals could take ABSOLUTELY ZERO risk and still get the same return (if not better) then what social security does. Now if somebody takes the money to Las Vegas and bet’s it all there that is there choice. But hey it’s their choice why should we penalize everybody else for the person that goes to the race track?
We don’t have that choice with social security. Of the 6.20% that I put into social security each year (and the 6.20% that is matched by my employer and doesn’t come to me but instead goes straight to uncle Sam) what is my return. On the 12.40% what rate of return will I get back? Inflation adjusted (I bet they take out Energy so it’s probably even worse) it is expected to be around 1.20% that is if I believe S.S. will still be around when I retire, which I don’t. (Personally, I don’t even put S.S. monies into my personal retirement calculations.)
This is plain crazy! I could put my money in a savings account, FDIC insured, with no risk and get this return. This is as close to putting the money under the mattress you can get without actually taking the money and putting it under the mattress. So instead of giving a person of choices of putting it under the mattress, putting it in a savings account, putting it in a company, or taking it and investing it in a slot machine a quarter at a time the government says we’re going to take 12.40% from you give you a 1.2% rate of return.
Personally, I don’t think I want to try and live on that 1.2% rate of return! Social security is pointless to me. I’ll spend every penny of it on my grand kids because they will be the one’s paying for it anyways.
TBC, something else you might find interesting. Social security is racist as well. As African-American’s have a shorter life expectancy their average rate of return is actually negative as they receive benefits for a shorter period of time on average then do whites. Talk about rewarding risk for African-american’s you have zero risk to on average lose money. Sounds like a rip off to me!
I don’t think retirement investing itself is speculative and risky necessarily. I mean that our national economy is so based on consumption, short tern returns, easy credit, and cheap money, that thrift generally is not encouraged, but rather wastefulness.
Social Security provides some false sense of “security” because many people assume (falsely) that it will “be there” and therefore do not take their own current spending and life habits into account as they think of the future. It is much too easy in our society to live entirely on debt and hope that at some point someone else will pay the bill or accept the responsibility. It is this behavior to which I refer.
Yes, I am aware of the disparate impact of social security on Blacks much less the generational theft inherent in the system.
Ah! I misunderstood. I agree the tax structure itself (i.e. taxing income) encourages spending. Taxing consumption would encourage thrift.
I’m a big fan of the Fair Tax and therefore of doing away with the income tax.