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Assuming job creation, raising the minimum wage occasionally, and moderate slowdown of workforce growth, Social Security is good thru 2090. Most of the country understands that in one form or another.

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The only thing wrong with Social Security, is the recession we've been in for 4 years, and the continued increase in income disparity. Yes, if we have 20 more years of recession, the Social Security trust fund will be depleted.

#HandsOffmySS

Looking solely at GDP growth, 2.8% or better and SS is good thru 2090. If you want to go with the "trust fund will be depleted in 2033", well you just picked 2.1% growth for most of the next 20 years. Yup, a 25 year recession, thats your prediction. First time since the Black Plague killed off half the human race on Earth. Sort of a Mad Max Scenario, but without Mel Gibson.

Looking just at the growth in the civilian workforce, it is slowing down, most predictions estimate it will slow down from about 1% growth to .7% in 2050. If we see this number at .6% or better thru 2033, SS wont be broke. And .7% should get us thru 2090. But if you think the US is going to build fences, and cut immigration down to .2%, well then, oh noes, SS is broke.

Okay, I've had a little fun at the expense of some folks, but the point I want to make is that the assumption that SS will be broke by 2033 is based on some very severe assumptions about the next 20-30 years.

Below is a screen capture of the 2012 Trustees pdf "Trust Fund Ratios",found here.

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#HandsOffmySS

Eliminating the current cap of $113k is a drastic solution to a problem that doesnt exist. Whats broken is our economy, fix the economy and SS is very likely good thru 2090. Unfortunately too many Americans buy into the hype that SS is going to go broke in 2033 or sooner. And way too many Democrats are in that group. Too many Kossacks believe its going to go broke in 2033 or sooner. Once you buy into the falsehood there is a problem, then you start looking at solutions, instead of fixing the economy, creating jobs, raising the minimum wage and reversing income disparity.

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The DK group Social Security Defenders will be presenting a #HandsOffmySS blogathon March 25th thru March 29th. So stay tuned for more information on scheduling and guests.

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Originally posted to Social Security Defenders on Wed Feb 20, 2013 at 09:16 AM PST.

Also republished by The Royal Manticoran Rangers, Occupy Wall Street, Keynesian Kossacks, Income Inequality Kos, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, and DKos TWEETers.

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Comment Preferences

  •  Tip Jar (15+ / 0-)

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Wed Feb 20, 2013 at 09:16:37 AM PST

  •  Interesting: (4+ / 0-)

    Raising the minimum wage would help with Social Security being solvent.  Hadn't really thought of that before.

    But you don't present any data on that.  How much does it help?

    •  It contributes to wage growth (2+ / 0-)
      Recommended by:
      Mr Robert, musiccitymollie

      IIRC there is just a few million people that earn the min wage, so the direct effect is small, though if the min wage went up a dollar, many employees would bump up their employees, so if you were making $8.25/hr, you might get bumped to $9.25.

      SO the direct and indirect effects may impact many more people.

      IIRC Min wage is 18k a year, median income is IIRC 23k for all workers. SO it maybe that raising the min wage might move median income a bit, as well as median household income of 49k, though thats a stretch. A housewife working part time for min wage would get a raise, maybe $1,000 a year.

      Theres like 28 million people that would take a full time year round job if offered, 20 million jobs at 20k per year is a nice chunk of FICA, IIRC a large order effect when looking at SS projections.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Feb 20, 2013 at 09:53:38 AM PST

      [ Parent ]

    •  by about 26 cents per staff hour for EVERY (3+ / 0-)
      Recommended by:
      Roger Fox, jpmassar, cynndara

      minimum-wage worker in America.  Not sure how much that adds up to but it's a sizable chunk of change.  More of course if minimum wage gets tagged to cost of living so it goes up automatically.

    •  2006 data (1+ / 0-)
      Recommended by:
      jpmassar

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      About 20% made $9.50 per hour in 2006. 2006 civ. workforce is 149 million, about 30 million made $9.50 or less.

      30 million pay 6.2% on an increase of $1.75 for 40 hrs.

      70 bucks per person, $4.34 more FICA, times 30 million is about 130 million per week, times 50 weeks is 6.5 billion a year.

      Just a ballpark figure. And my math might suck....

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Feb 20, 2013 at 10:29:42 AM PST

      [ Parent ]

  •  I remember polls like that back in the 80's (4+ / 0-)

    where people were being asked whether they thought Social Security would be around when they retired.

    Same sort of pessimism.

    •  Hate to credit Reagan (2+ / 0-)
      Recommended by:
      jpmassar, cynndara

      But the 83 SS deal does look like a really good guess as far as the FICA increase setting up long term solvency past the Boomers, we'll all be dead by 2062, mostly dead by 2055.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Feb 20, 2013 at 09:58:54 AM PST

      [ Parent ]

      •  Good because Reagan doesn't deserve credit (3+ / 0-)

        The old Tip'N'Ronnie agreeing to fix SS over B&S's in 1983 is itself a bunch of BS.

        In truth Reagan had made a run at SS in 1981, failed, and in the face of really impending crisis in 1983 (and OBTW an election in 1984) was mostly dragged to agreement by Darman and Baker after a private deal was cut by Bob Ball, acting mostly on behalf of Tip O'Neill.

        Bob Ball, who had a forty year career with SS including a long stint as Commissioner, was the lead Democratic negotiator on the 1983 Greenspan Commission during and after the breakdown (Greenspan Comm broke down much like Bowles-Simpson and for the same reasons and was only patched up after the fact).

        The best version is a book originally intended to be a chapter of Bob Ball's autobiography but published as a stand alone under the title: "The Greenspan Commission: What Really Happened".

        http://www.amazon.com/...

        Along with being the consummate insider's account it also offers Bob Ball's warnings against trying to replicate the 'success' of the Greenspan Commission, mostly on the basis that it really wasn't any more a success than similar efforts in recent years.

        Now to Reagan's credit once his advisors more or less forced him to agree to the deal, he did put the strong arm on wavering Republican Commissioners in a way that produced an ultimate 12-3 approval to the compromise worked out principally by Ball and Darman/Baker and so saved everyone's face. But that is far from making him the actual architect of the deal.

        socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

        by Bruce Webb on Wed Feb 20, 2013 at 11:54:55 AM PST

        [ Parent ]

        •  Dude you are so good with details like this (0+ / 0-)

          there is a theme emerging here......

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Wed Feb 20, 2013 at 01:51:13 PM PST

          [ Parent ]

        •  Can you invite joe shikspack to SSD? (0+ / 0-)

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Wed Feb 20, 2013 at 02:06:50 PM PST

          [ Parent ]

          •  Anyone can request an invite (1+ / 0-)
            Recommended by:
            Roger Fox

            Nobody gets turned down.

            But it does work better if the User does the asking.

            socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

            by Bruce Webb on Thu Feb 21, 2013 at 01:34:49 PM PST

            [ Parent ]

  •  do we REALLY need the hash tag? n/t (1+ / 0-)
    Recommended by:
    Tortured Body Wasted Brains
  •  Roger type alert! $113 not $133. Para after table (2+ / 0-)
    Recommended by:
    musiccitymollie, Roger Fox

    socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

    by Bruce Webb on Wed Feb 20, 2013 at 11:41:54 AM PST

  •  Thanks for this diary, Roger. Speaking only for (1+ / 0-)
    Recommended by:
    Roger Fox

    myself, I'm not seeing :  "Too many Kossacks believe its going to go broke in 2033 or sooner."

    What I've observed, is that it is the Washington Consensus (for lack of a better expression) that Social Security must be "reformed."

    Look no further than the Fiscal Commission's proposal, the Gang of Eight's (then Six) proposal, etc.

    BTW, by the time that you hold the blogathon (which is a wonderful idea), I fully expect that the Administration will have passed the "Chained CPI" cut.

    Will you have anyone here to address the Fix the Debt Campaign, and the so-called "Consensus?"

    Thanks.  Look forward to this event.

    Mollie

    "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

    "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

    by musiccitymollie on Wed Feb 20, 2013 at 12:43:00 PM PST

    •  Eliminating the cap is a recurring theme @DK (2+ / 0-)
      Recommended by:
      cynndara, musiccitymollie

      From my stilted vantage point eliminating the cap gets 3 times more play than raising the cap to 90%, which gets twice the play time of leave SS alone.

      In fact I would go as far as saying that eliminating the cap may be consensus @ DK.

      In fact the last eliminate the cap diary made the rec list, I have NEVER had a SS is good thru 2090 make the rec list.

      And I've had 2 dairies on the rec list at the same time twice, the last time I had 3 rec list diaries on the same day. SO its not like I am unfamiliar with the rec list.

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Feb 20, 2013 at 01:49:17 PM PST

      [ Parent ]

    •  Hope to see you around for the blogathon (1+ / 0-)
      Recommended by:
      musiccitymollie

      http://www.dailykos.com/...

      April 2007 I got 12 recs, just today, 12 recs.

      Leave SS alone dont play at DK.

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Feb 20, 2013 at 01:59:13 PM PST

      [ Parent ]

      •  Roger, guess I didn't articulate my thoughts very (1+ / 0-)
        Recommended by:
        Roger Fox

        well.

        You're obviously right that "raising the cap" plays well at DKos, compared to implementing the Chained CPI, for instance.  

        So what I meant to say, is that I think that it's not so much that everyone thinks that Social Security will go broke, as they believe (as do I) that the PtB (per The Washington Consensus) will cut benefits, regardless of whether or not they need to be cut.

        The PtB's obvious real intent is to "shave off money" for nonmandatory spending:  i.e., education, infrastructure, R&D, etc.  What we're really watching is a classic Washington "bait and switch, LOL."

        Hope that makes more sense.  [This is my takeaway, of course.]

        And, like many of the other Kossacks, I agree that if the PtB are going to cut Social Security, I'd rather they start with "raising the cap."

        But, like you, I'm not convinced that ANY of this is truly necessary.

        For my part, I will basically argue against all "cuts" to benefits.  But, I suppose, given the choice of either benefit "cuts," or the raising of the wage cap, truthfully, I'll go with the latter.

        Sadly, it does not appear that there are any (or many) institutional organizations which are willing to really break with the President on this issue.

        Other than "lip service." So, I fully expect to see (at the very least) the implementation of the Chained CPI, progressive price indexing, and the raising of the FRA and the ERA, before the President leaves office.

        I wouldn't be too concerned, BTW.  Raising the wage cap does not seem to be very high on the Bowles-Simpson agenda.

        Heck, their recommendation is to implement "the raise"  over so many years (not fully implemented until 2050), that it would be virtually useless.

        Actually, I'm on your side--advocating to "keep our social insurance programs intact."

        Thanks for all you do.  :-)

        Mollie

        "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

        "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Wed Feb 20, 2013 at 02:47:28 PM PST

        [ Parent ]

        •  I know thats the crazy part (1+ / 0-)
          Recommended by:
          musiccitymollie
          Heck, their recommendation is to implement "the raise"  over so many years (not fully implemented until 2050), that it would be virtually useless.
          A large portion of the Boomers will be dead by 2050, mostly dead by 2055, and long gone by 2062.

          The big crunch comes @ 2033-2042.

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Wed Feb 20, 2013 at 03:15:26 PM PST

          [ Parent ]

  •  Even better, lowering the retirement age... (2+ / 0-)
    Recommended by:
    Roger Fox, musiccitymollie

    ...to 62 (or something like that) could be an extremely effective way to cut unemployment.

    Suppose we allow full benefits at 62(temporarily), and all 10 million people 62-64 take the benefits, and 4 million retire. 10 million multiplied by about $11K in benefits per person = about $110B in new GDP. Since there's about $100K of GDP per worker, the new spending would create 1.1 M new jobs, plus the 4M of replaced jobs. That could reduce unemployment to 4.5% , if my numbers are correct.

    •  Sorry, create 22 million jobs lowers unemployment (0+ / 0-)

      quite nicely to 5%. And creates a more stable economy.

      in 2011 we spent 1.3% of GDP on Infrastructure, we used to spend 5-6%.

      Pre 1986 Tax Reform Act tax shelters rewarded domestic investments, to the tune of 1.5% to 3% of GDP being spent on jobs in Manufacturing.

      That could reduce unemployment to 4.5% , if my numbers are correct.
      Nope, you forgot U6 unemployment is around 14.6%. About 22 million people would take a full time yr round job if offered. While U6 doesnt count everyone, so call it

      28 million people looking for jobs. Civilian workforce is about 154 million, creating 22 million jobs lowers unemployment to someplace around 5%.

      ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Wed Feb 20, 2013 at 01:39:14 PM PST

      [ Parent ]

      •  5.1 million is still about 3.4% of 150 million (1+ / 0-)
        Recommended by:
        musiccitymollie

        I assumed that unemployment is 7.9% and 7.9-3.4=4.5.
        So if unemployment is really 14.6%, it would lower unemployment to 11.2%. Second, lowering the retirement age would cost only .7% of GDP. No big deal.

        Third, what's the issue with "stability"? I can't see any problems this would cause with stability. People should be able to retire at age 62 if society can very easily bear the cost.

        •  U3 & U6 unemployment 2 different metrics (1+ / 0-)
          Recommended by:
          Nattiq

          U3 is the number of people getting UI checks- 7.9%

          U6 is long term unemployment. 14.4%

          And just to make sure I totally complicate the issue-  :~)

          U1:

          This is the proportion of the civilian labor force that has been unemployed for 15 weeks or longer. This unemployment rate measures workers who are chronically unemployed. During business-cycle expansions, this rate captures structural unemployment. However, during lengthy business-cycle contractions, this rate is also likely to include a significant amount of cyclical unemployment. U1 tends to be relatively small, in the range of 1-2 percent.
          U2:

          This is the proportion of the civilian labor force that is classified as job losers (workers who have been involuntarily fired or laid off from their jobs) and people who have completed temporary jobs. During business-cycle expansions, this rate is likely to capture some degree of frictional unemployment. However, during business-cycle contractions, this rate is most likely to consist of cyclical unemployment. U2 is larger than U1, but still remains substantially less than the official unemployment rate (U3).
          U3:

          This is the official unemployment rate, which is the proportion of the civilian labor force that is unemployed but actively seeking employment.
          U4:

          This is the official unemployment rate that is adjusted for discouraged workers. In other words, discouraged workers are treated just like other workers who are officially classified as unemployed, being included in both the ranks of the unemployed and the labor force. It is technically specified as the proportion of the civilian labor force (plus discouraged workers) that is either unemployed but actively seeking employment or discouraged workers. The addition of discouraged workers generally adds a few tenths of a percentage point to the official unemployment rate.
          U5:

          This augments U4 by including marginally-attached workers to the unemployment rate calculation. Marginally attached workers are potential workers who have given up seeking employment for various reasons. One of these reasons is that the workers believe such effort would be futile, which places them in the discouraged worker category. Those who have other reasons for not seeking employment are placed in the broader marginally-attached workers category. The addition of marginally-attached workers adds a few more tenths of a percentage point to the official unemployment rate.
          U6:

          This augments U5 by including part-time workers to the unemployment rate calculation. The addition of part-time workers adds a full 2-3 percentage points to the official unemployment rate. This measure of unemployment is perhaps the most comprehensive measure of labor resource unemployment available.

          http://portalseven.com/...

          ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Wed Feb 20, 2013 at 02:19:14 PM PST

          [ Parent ]

  •  SS payments are more than benefits (0+ / 0-)

    As of 2010, the average wage earning retiree will have paid more in SS taxes than they will collect.Urban institute Report

    Boomers paid for grandparents and parents, and are now the first generation to get less back than they paid in, at least for average working people.

    And that's before the cuts known as "tweaks to the COLA."

    We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had too much. JK Galbraith, 1991

    by Urban Owl on Wed Feb 20, 2013 at 08:54:17 PM PST

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