This is incorrect. The number of people paying in relative to the number of people paying out has been decreasing since day 1.</p>
<p>What makes it sustainable is that FICA taxes have gone up tremendously. If you hit the cap you are probably paying 3-4x as much in FICA taxes as you were 20 years ago.</p>
<p>When I graduated from college, the max tax collected (employee + employer share) was about $3700. In 2012 it will be over 13,000. </p>
<p>FICA tax revenue now almost equals the revenue collected from the Federal income tax (and actually shows that a flat tax would work).</p>
<p>notrichenough: My understanding is that lots of private pensions have been reduced or eliminated altogether because the money collected didn’t produce enough income to fund the pensions (unless there was another reason). I don’t understand why, if the federal gov takes my money for SS, there isn’t money at retirement for me. They have my money for a long time. What are they doing with it?</p>
<p>obviously I am no economist.</p>
<p>edit: okay maybe I had a light bulb moment just now. If more are employed SS is better off. right? thinking about it as a pipeline</p>
<p>Does full employment solve SS funding problems?</p>
<p>I may be forced to sign up for some on-line economics courses.</p>
So you, on behalf of “society”, are asserting an ownership claim on everything I have? Really?</p>
<p>
Yes - many private pensions are underfunded. If the company goes out of business, the pension plan is taken over by a federal agency and pensions are reduced to match what funds are actually in the plan.</p>
<p>Many public pension plans are also underfunded, although taxes can be raised to make up the shortfall.</p>
<p>
The money taken for SS has already been spent. It’s gone. You only get money at retirement from SS if the government takes money from someone else.</p>
<p>dstark: while I really admire and appreciate how very effectively you use the socratic method, I must confess I do sometimes have a very hard time following. I spend a lot of time re-reading your posts. It becomes even more confusing for me because of all the deliberate humour involved in so many posts here. sarcasm, parody, or a statement of purported truth? Sometimes I wonder for days until it clicks.</p>
<p>everyone here is not as smart as you </p>
<p>okay, it is probably pretty outrageous to complain you aren’t making it clear enough - when you are taking so much time to write all these posts… over & over & over
Thank you!!</p>
No. Full employment will cause a slight surplus in collections over the next few years, but after 2015 the system will be in a permanent deficit without raising tax rates.</p>
<p>The so-called “trust fund” is exhausted in 2037 or there-about, but redemptions from the trust fund come out of the general revenue pool or from selling more debt. So it is a mistake to think about the “trust fund” as a big pile of money available to be tapped.</p>
<p>The only way to balance it is to either cut benefits (delayed retirement age, lower payments), raise taxes, or have people not live as long.</p>
<p>Here’s an interesting stat:</p>
<p>“For workers who earned average wages and retired at the age of 65 in 1980, it took 2.8 years of receiving old-age benefits to recover the value of their payroll taxes (including interest). For workers who retired in 2003, it will take 17.4 years. For workers who will retire in 2020, it will take 21.6 years.”</p>
<p>That’s with “average” wages. If you are above-average and under 50, you will likely not recover the value of your taxes without interest.</p>
<p>Oh, look! Another conversation has devolved into a conversation about social security. How refreshing.</p>
<p>They will have to means test SS benefits.</p>
<p>Those in my generation will have paid in at record numbers and will recieve nothing in return. It’s just a welfare program for the baby boomers from here on out. What hasn’t been?</p>
<p>As for medicaid, as the costs of medicaid goes up, the amount of money each state puts into higher education goes down. See the latest article by Orzag. (you can google it.) We should be really careful about how much we are failing to support our younger generation at the expense of the older. We’re really reaching a tipping point with that.</p>
<p>poetgrl: on behalf of the baby boomers, I apologize. We really ****ed it up. I really hope your generation can fix it. Or our childrens’ generation.</p>
I reject the implication that someone who got rich can only get there by exploiting someone else. Wealth creation is not a zero-sum game. Everyone I know who has become wealthy through their own efforts made other people rich at the same time, and created jobs that paid competitive wages to many others.</p>
<p>
As someone who aspires to join the 1% (at least on the asset side, I’ll never make it on the income side), I sure hope means-testing is not the method chosen to reduce benefits, because then we will be unlikely to get anything.</p>
<p>We are planning as if we are not getting anything from SS, though. Anything we get will be a bonus.</p>
<p>
What’s the cutoff for baby boomers? Maybe I am one, although I don’t identify with that group.</p>
<p>This is in today’s NYT and is about fairly recent immigrants to the US who are multi-millionaires, and who speak little English. How they became rich…</p>
<p>parent1986-
I hope you do not mind if I post the article from #178 in the “positive developments” thread. I think it would be a breath of fresh air.</p>