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View Diary: US already has high elder poverty rate, so why are Social Security cuts even on the table? (223 comments)

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  •  Yes, it DOES have an internal deficit problem ... (1+ / 0-)
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    Cedwyn

    Social Security does not have debt problem -- past surpluses have created a significant balance -- but SS is running in the red today, and that's the definition of a deficit problem.

    This is the equivalent of having bank balance of $100,000, an annual salary of $50,000 and spending $60,000 each year.  You're not going to go bankrupt or even have to reduce your spending this year or next, because you can draw down your savings to pay for difference between what you're earning and what you're spending.  But after 10 years (or less, if your annual expenditures are increasing), there won't be any money left in the bank account.  At that point, you're no longer able to spend any more than you earn -- which will be a huge shock to the system for folks counting on those funds.

    All that said, I would also point out that:

    1.  None of this has anything whatsoever to do with the current Federal debt issue, the debt ceiling, the Federal deficit, etc.  You could completely eliminate the Federal deficit and you'd still have an SS deficit issue, and likewise, you could cut SS benefits in half and the Federal debt and deficit would be exactly the same as it is today.

    2. There are a number of ways to fix the SS deficit problem that don't involve cutting SS benefits, e.g., raising the cap on taxed wages.  However, this isn't terribly popular because it translates into a significant middle-class tax increase.

    •  If it has nothing to do with the federal deficit (2+ / 0-)
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      midwesterner, vigilant meerkat

      Why is it included in these negotiations?  There is no emergency.  There's no reason why SS changes can't be postponed until after the deficit wars are over.

      The current negotiations are being handled on the fly, behind closed doors, with no public input and no transparency.  The public (and probably many members of Congress) don't even know what changes are in the bills until after they're signed into law.

      Any discussion related to changes to SS should never be conducted in such a fashion. Ever.  Proposals to change  SS should be handled in slow, deliberate fashion, in full view of the public.  There should be hearings, Congressional testimony (under oath), fact finding presentations, periods for public comment and public debate about any final solution.  

      No demagoguery, no lying, no outside lobbyists and conservative think tanks, no media consulting groups or sham public polling.  No using SS as a hostage.

      When POTUS and his supporters take SS off the table of deficit talks and completely separate the issue of changes from the deficit reduction discussions, then I'll know they're serious. Until then, they're being dishonest and are doing a great disservice to the American people.

      Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

      by Betty Pinson on Tue Jan 15, 2013 at 12:12:18 PM PST

      [ Parent ]

      •  medicare is a driver of *the* deficit (0+ / 0-)

        especially with boomers moving into retirement.

        SS is not a driver of * the * deficit, but has its own deficit problem.  it is burning through savings and will reach a point where it will not be able to pay out on its obligations.  something really does need to be done.

        and dammitall, the GOP controls the House right now and likely will for a decade.  so there's your "why."

        it's also true that SS has quite a population dynamics problem; i srsly think immigration is the only real answer.

        boomers = 79-some million
        gen x = 53-some million
        millennials = 70-some million
        gen z = on course to be smaller than gen x

        millennials are, so far, not having children at the same rate as their boomer counterparts.  so boomers retire; gen x and millennials already in the workforce replace them.  no new net jobs.

        the rest of the millennials will be in the workforce within 10 years; gen x will start retiring within 20.  still no new net jobs, as the boomers will have finished retiring in 10 years.

        then gen z starts working, only they, so far, don't have the same numbers as gen x.  net loss of workers, and payroll tax revenue, for the millennials' retirement.

        the population drop from boomers to gen x wreaked havoc on SS; the drop between millennials and gen z will be worse.  

        Please don't dominate the rap, Jack, if you got nothin' new to say - Grateful Dead

        by Cedwyn on Wed Jan 16, 2013 at 07:17:40 AM PST

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