4558Re: [ujeni] Social Security
- Mar 5, 2005I've been following it fairly closely. It seems to me that this is a great example of creating as much confusion as possible in order to realize an ideological goal. This is how I understand the issues:1. Sometime around 2018 the incoming Soc Sec taxes will not pay for the recipients. Then money will have to be drawn out of the the SS trust fund. I believe it was 1983 when Congress and President Reagan purposely raised the SS taxes so that a supply of money could be built up to pay for the Baby Boomer's retirement. Under Reagan, Bush 1, Clinton, and Bush 2, that money was put into US Treasury Bills and used for government expenses. It's going to get very interesting when that extra SS tax gradually decreases to zero and makes it harder to find revenue for the federal govt. It will be even more interesting when it's time to use other revenues to pay off the T-Bills that the SS fund is invested in.2. Around 2042 that SS fund in T-Bills is likely to be exhausted. Then other federal revenues would have to be put directly into SS, no longer paying off any T-Bills that SS had invested in.3. My understanding is that fairly minor adjustments to revenues and benefits can be made so that SS never gets to the point where it has to draw money from anyplace other than (a) SS taxes and (b) the SS trust fund. However, even minor adjustments will probably be hard to agree on.4. Creating private accounts will not address the problems in 1 and 2. Whether they are created or not, the steps described in 3 will have to be taken.5. It appears that the real reason that people want to move towards private accounts is they want to make further changes later, where they eventually want to get rid of SS taxes. They don't like this idea of a social insurance program, and they want everyone to be responsibile for their own retirement. This is a legitimate debate to have, but it has little relation to the issues in 1-3. It is another example of pretending two issues are connected more closely than they really are. How long before we hear that the state of social security has "changed the equation" with regards to private accounts?-Eric
Vyrle Owens <vyrle@...> wrote:
Anybody following the Social Security discourse?
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