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Quote from oldtime:
yeah thanks, interesting little article. Like you say, media don't cover it much when it's Iceland. If that was USA in 2009, they would have a whole library of books on it by now. And I'm sure it would be somebodys fault, depending on what network you are watching.
And that's the thing us common men can't figure out.
Why didn't we just do that?
I like it, simple, and easy to remember.
When "retail" investors lose money - the common Wall St reply is "You should have done more due diligence. It's your own fault. Eat it."
So when someone loans money and the loan goes bad - what is the moral equivalent?
Quote from logic_man:
The risk adjusted return trend is down, down, down, and already negative for some earning classes and birth years. Eventually, it will be negative for all of them except the lowest earners and SS will be revealed as yet another welfare program only benefiting the least capable and taking capital away from the productive economy.
Looking at history, the benchmark should be "Is this program sustainable for hundreds of years?". If the answer is no, why bother putting it in place? It's just a waste of time and resources.
At this point it appears sustainable indefinitely so long as congress acts on the actuaries and trustees calls for adjustment in the contribution rate to allow for changing life expectancy.
The main problem future social security recipients have are large government deficits so that the Treasury must borrow the money it owes to the Trust Fund. The dollars returned to the fund will be deflated in buying power in proportion to how much of the public debt ends up being monetized.
Medicare and medicaid are other matters all together and should never be lumped together with Social Security in regards to soundness and sustainability.
Quote from piezoe:
At this point it appears sustainable indefinitely so long as congress acts on the actuaries and trustees calls for adjustment in the contribution rate to allow for changing life expectancy.
In other words, it's sustainable so long as we keep changing the rules to make it sustainable. It's not sustainable per se under one specific set of rules.
Yeah, OK, that's about the level of logic I expect from someone defending the program, so, per usual, I'm not surprised.
Remember that the Greenspan fixes were supposed to be "sustainable" for the foreseeable future as well and now we see they aren't. But, I'm sure whoever proposes the fixes this time will pinky-swear they're really, really, really sustainable.
nothing will ever be sustainable if you use words like "65 years of age" or "250K per year"Quote from logic_man:
In other words, it's sustainable so long as we keep changing the rules to make it sustainable. It's not sustainable per se under one specific set of rules.
Yeah, OK, that's about the level of logic I expect from someone defending the program, so, per usual, I'm not surprised.
Remember that the Greenspan fixes were supposed to be "sustainable" for the foreseeable future as well and now we see they aren't. But, I'm sure whoever proposes the fixes this time will pinky-swear they're really, really, really sustainable.
Congress has the power to change the rules, but they can also update the contribution while keeping all the rules the same.Quote from logic_man:
In other words, it's sustainable so long as we keep changing the rules to make it sustainable. It's not sustainable per se under one specific set of rules.
Yeah, OK, that's about the level of logic I expect from someone defending the program, so, per usual, I'm not surprised.
Remember that the Greenspan fixes were supposed to be "sustainable" for the foreseeable future as well and now we see they aren't. But, I'm sure whoever proposes the fixes this time will pinky-swear they're really, really, really sustainable.
If they change the rules it won't be because of any defect in the system. It was, and is, brilliant in conception and arguably the best run and most valuable of all government programs. A rule change would very likely be driven by the need to slow the rate of bond redeemptions from the trust. This would have nothing to do with the soundness of Social Security per se, but would be caused by heavy deficit spending in the discretionary budget resulting in the Treasury having to borrow to redeem the Trust's holdings at a rate that could not be sustained without upward pressure on interest rates.
The system has always been based on actuarial calculation. It has always been assumed that adjustments to the contribution rate would be needed from time to time as lifespans and bond returns changed over the years. There has been a number of adjustments since the inception of Social Security, and there will be more in the future. That's common sense. You wouldn't expect an insurance company selling an annuity in 1970 to necessarily sell the same annuity for exactly the same amount in 2012 would you? I hope not.
None of this has anything to do directly with Greenspan. His mismanagement of the Fed and failure to regulate ultimately had a big impact on bond returns, and that along with inflation does of course impact Social Security.
For your part, you should encourage your Congressmen to adhere to the recommendations of the actuaries and not delay making the adjustments called for.
If you are truly interested in learning how Social Security works, I can't recommend the government's Social Security web site too highly. You can access the Trustee's reports, see how benefits are computed based on one's most recent 35 years of contributions, and many other facts as well.
Quote from trefoil:
SS is insurance, with a massive risk pool that makes it quite solvent if it's funded as it's supposed to be.
It includes disability benefits as well as retirement benefits.
It's meant strictly to keep you out of poverty, not provide a good return. The latter is up to you in your individual retirement program. The gov't is just making sure being old doesn't automatically mean being hungry and homeless.
Is it not clear by now that government is not capable of running a program like this?
-burn8
Quote from logic_man:
In other words, it's sustainable so long as we keep changing the rules to make it sustainable. It's not sustainable per se under one specific set of rules.
Yeah, OK, that's about the level of logic I expect from someone defending the program, so, per usual, I'm not surprised.
Remember that the Greenspan fixes were supposed to be "sustainable" for the foreseeable future as well and now we see they aren't. But, I'm sure whoever proposes the fixes this time will pinky-swear they're really, really, really sustainable.
Disability is the real elephant in the room. The SSA Disability ranks have grown faster than new jobs throughout this administration's "recovery." Among other things, it has a lot of unintended consequences:
http://www.washingtonpost.com/opini...-not-to-work/2012/07/30/gJQA8UvHLX_story.html
Also, it doesn't help that you can file for a number of nebulous mental disabilities, or that some of the judges are bleeding hearts who can't say "no" to any application:
http://online.wsj.com/article/SB10001424052748704681904576319163605918524.html
Quote from piezoe:
If you are truly interested in learning how Social Security works, I can't recommend the government's Social Security web site too highly. You can access the Trustee's reports, see how benefits are computed based on one's most recent 35 years of contributions, and many other facts as well.
Gotta love the .gov apologists around here. At least they're better than the parasites over in Politics & Religion who actually collect the SS "crazy checks" and post like 40 times a day. Nothing better to do, I suppose.
Seriously, their article on why SS is not a Ponzi scheme was a classic case of "Methinks the lady doth protest too much."
Quote from MKTrader:
Gotta love the .gov apologists around here. At least they're better than the parasites over in Politics & Religion who actually collect the SS "crazy checks" and post like 40 times a day. Nothing better to do, I suppose.
Seriously, their article on why SS is not a Ponzi scheme was a classic case of "Methinks the lady doth protest too much."
Agreed, one of them is an "O" fanboy with an alias named after an assault rifle. Neither he, nor any of his cohorts, seem to think anything of it.