What should the U. S. do about the cost of Social Security and the fact that people live longer?

[Adaeva]

Should Social Security be abolished; should the retirement age be increased, should social security taxes be increased, or should benefits be reduced? Or do you have some other recommendation?

Updates

+1 y

Has the government spent the social security trust fund to pay for education, wars and other items? And, since the trust fund is guaranteed by law when Social Security starts redeeming Treasury bond holdings in the trust funds to pay scheduled benefits, will the government have to borrow from the public, raise taxes or cut spending to finance those redemptions? In other words is the following web site accurate? www.thinkadvisor.com/.../

[abc3643]

"Should Social Security be abolished; "

And Social Security shouldn't be abolished. Live long enough and you will understand why it was created in the first place.

People generally aren't stupid. It's why you are capable of asking this question when, 100,000 years ago, we were in Africa roaming around for berries and killing animals and avoiding becoming dinner for lions.

People generally create legislation to solve a problem. Not always, but often.

And Social Security didn't solve a problem but it mitigated it: Being able to survive when you can't earn a living because you can't work anymore. If you respect your elders (and want to become respected when you are an elder), then you will appreciate Social Security.

Should Social Security's retirement age change? Sure, I don't have too much of a problem with that. In fact, Social Security has been elevating the retirement age for some time. Specifically, when I was young, it was uniformly 65. Then, about a generation ago, that started elevating it so the retirement age became a function of when you were born. For instance, my wife was born in 1957. Her retirement age is 66y 6m. I was born in 1963, so my retirement age is 67.

https://www.ssa.gov/benefits/retirement/planner/agereduction.html

There are many things that can be done to keep Social Security going.
One thing is to cut defense spending.
Another is to deny benefits for the next year for anyone making over, say for example, $500,000 in "specialized" income the previous year. By "specialized", I mean 1) it doesn't come from working, 2) it doesn't come from a common one-time source like inheritance or selling your primary home, 3) it can come from a large lottery winning, or 4) it can come from earnings on investments (such as selling second homes).

Of course, raising the taxes on the wealthy like this country used to do would be smart. Until 1981, the maximum income tax rate in the USA was 70%. Now, it is a little over half that: 37%.

Even billionaire Warren Buffett, one of the richest men on Earth, realizes the rich are not being taxed enough...

TITLE: Warren Buffett: We should raise taxes on the rich—it won’t make them flee the US

https://www.cnbc.com/2019/02/25/warren-buffett-and-bill-gates-the-rich-should-pay-higher-taxes.html

"The wealthy are definitely undertaxed relative to the general population."

Bill Gates echoes that:

"Gates, like Buffett, acknowledges that he’s among those whose taxes should go up. 'I need to pay higher taxes,' he told CNN’s Fareed Zakaria during a 2018 interview. 'I’ve paid more taxes, over $10 billion, than anyone else, but the government should require people in my position to pay significantly higher taxes.'"

Buffett even said his secretary is actually taxed at a higher rate than he is. For example, from Newsweek: in 2021:

https://www.newsweek.com/warren-buffett-who-advocates-higher-taxes-defends-paying-least-among-americas-richest-1598830

"Buffett's wealth grew by $24.3 billion between 2014 and 2018 but he only paid $23.7 million in taxes, a rate of 0.1 percent, after reporting taxable income of $125 million".

You see, wealth is a lot more than just taxable income. Another source of wealth that many people don't have enough of (the same people who need Social Security) is "capital gains" - additional wealth they acquire simply because they own stuff that goes up in value.

More from that CNBC article:

"One way to collect more money, Gates says, is to hike the capital gains tax, which would increase how much the wealthy are paying on their investments.

'I think our system can be a lot more progressive (that is, richer people paying a higher share),' he wrote on Reddit on Monday. 'A key element is making capital gains taxation more like ordinary income and having an estate tax more like we had in the past.'

Buffet proposes that the wealthy pay at minimum the same tax rate as the middle class and that the tax laws should be overhauled. This is called The Buffett Rule.

Anyway, Social Security has been very valuable for the past 90 years or so. It is part of what keeps this country stable - especially during bad times like the worst part of The Great Depression 90 years ago.

===================

Now, I want you to think about something else. Any bullshit ideology you or anyone else is fed needs to be thrown out because what I am going to tell you is reality as Nature has dictated for the past 4 billion years...

Every sufficiently complex organism on this planet has the instinct to survive and will do whatever is necessary to keep surviving or keep its offspring surviving. No "rules" or "rights" or "social constructs" is going to override that. No person in the 2+ million year history of humanity ever said "You know, I am starving to death, but the law says I am not allowed to eat. So, I don't want to break the law, so I guess I will just starve."

My point in mentioning this is that we are all hostages to each other's survival instincts. So, to keep a society functioning, it is best to create that society in such a way that its members can all survive. Once your system dissuades easily surviving, you start to see crime and violence from those who need to do what they can to minimize the struggle to survive.

Your country - the United States of America - was created for just that reason. The English were making it increasingly difficult to survive and, with the extra burdens, there were no compensating rewards. In 1775, the American colonists said "Enough is enough. They aren't listening and they just don't get it. Fuck this." and so the American Revolution started and, almost 250 years later, resulted in a nation that, in principle, doesn't fuck over its citizens like the English and other colonial powers were doing.

[monorprise]

@abc3643 Just because you were forced to dumb 15% of your income into a goverment fireplace your entire life doesn't mean that 'investment' was wise or prudent.

Social security as sold as a "safety net" against provision of the elderly. Yet it pays out soo little that you would be poor if you had nothing else, and will pay out much less within a few decades.

Your solutions to recover the money the goverment squandered in its poor investment choices amounts to wealth redistribution from other people both both contemporary minorities who made better personal choices and future generations. Neither of which had anything to do with the poor choices.
Do you really think when said taxes keep going up future generations will keep paying those ever escalating costs?

At the same time you ignore the catastrophic consequences such as "safety net" had on the civilizations that were able to provide it. (U. N. mandated on all nations to try)

Yes it sounds nice to elderly not to have to live with their kids or even have kids with whom they can retire much less save for retirement.

The absences of said grandparents from the home also led to an absence of parenting for every generation thereafter leading to a collapse in cultures able to sustain themselfs.

Yes, it turns out the reason nature allows people to live beyond their reproductive years is so that they can be parents and grandparents.
Instead after the late 1930s we started seeing a entire generation with the many of same social problems of spoiled rich kids.

Is it a surprise rise that their own families fell apart, and their children were even worse to the point where their civilizations are now facing the very real prospect of extinction?

Not only is Social Securty as a Goverment managed 'investment' a poor investment, it is a disastrous service as it drives people away from doing what is essential for civilization simply to exist.

[abc3643]

@monorprise It may be a "poor investment", but:
1. Apparently you forgot about The Great Recession. During the George W. Bush administration, there were a lot of calls from conservatives to privatize Social Security. However then the Great Recession happened, and all those voices were silenced.
2. There's nothing stopping you from investing in other things besides Social Security, but The United States Federal Government is still the safest investment on Earth. That's why other nations invest in the US Federal Government.

[monorprise]

1: I remember Bush's suggestion that we create individualized accounts for social security. It failed long before the recession which was made great by the same means as the 1930s depression.

This was due to the 2006 election losing the house on the erroneous beleive A president Bush was capable of having anything to do with the crippling dispute in Louisiana between the Governor and mayor in Katrina.

After that it remained very much an interest as it is to this day but politically off the table like 1000 other programs our Federal overload impose upon us for which we never vote on.

2: So your saying I get a choice in how that 15% of my income is invested?
Only people who live in experiential zones like Galveston Texas and or work for the rail road get any option whatsoever in how that 15% of their income is invested. Indeed it was Bush's proposal in the 2000's was to give Americans that right.

[abc3643]

@monorprise no. What I am saying is that you can invest money in whatever you want but you still got to pay Social Security. It's just like if you want to send your kids to private school, you still have to pay your taxes to pay for public school. Social Security exists as a means to help people survive for when they cannot work. Yes we all pay into it. That's what United We Stand means. It's insurance also for those people who get screwed over when investing. Look at all the people who just blew their life savings in crypto. Poof! It's all gone. Now they're going to need that Social Security.

I've said what I wanted to say. I am muting the question. It's time for the AFC championship.

[monorprise]

@abc3643 We are hardly united that much is very clear. and why would we be with a bunch of abusive lyers who can't honor the limits of any law?

Tell me what part of the 11 page Federal Constitution did we consent to being "united" for the propose of paying for your irresponsible personal life planning judgements?

We never did agree to that instead your mob simply stole the money and appointed its own men to rubber stamp said thief and imposition of their own schemes. Schemes which have gone bankrupt as predicted, while destroying the very population who were foolish enough to bank upon them.

This is an example of the lawless oppression of the left in their never-ending campaign against the rights of people to think, and act for themselfs.
To stand "united" with you is to stand in the chains of perpetual slavery of the lawless.

[Anonymous]

There's only one thing they can do, in two parts. Raise taxes, and incrementally raise the retirement age. Equally as bad as people living longer is the fact that people are not having as many children anymore (at least not here in the U. S.). Last year was the first year since 1983 that we've had an uptick in the birthrate (my opinion is the reason for that anomaly was the pandemic. No one was going anywhere so people stayed home and pro-created 😆). But back to my original point. With less people being born a smaller workforce will be taxed greater.

But to answer your question "what should the U. S. do"? Well they've already began it. Social security was NEVER meant to be a retirement. It was supposed to be supplemental. The government has to end social security. But how do you do that when the public's perception is what it is, and our society is built the way it is (consumerism). This is why congress passed the "Secure 2.0 act". This requires companies to AUTOMATIC ENROLL employees in thier company sponsored 401k plans. It is the governments plan to slowly reduce dependent on social security and maybe eliminate it altogether if possible. Before you start panicking, no you didn't wake in a totalitarian country. You CAN still opt out of the auto enrollment... at least, for now.👀

[Curmudgeon]

It would be politically impossible to cut benefits to current recipients now, especially with the Bidenflation going on. However, raising the retirement age is an undeniable necessity, especially for young people far enough away from nearing the retirement age. People are living longer, and the ratio of old retirees to young workers is rising ever higher. There will be a breaking point if we have not passed it already.

Nor can raising taxes on some other group of people instead work, because they will just move their capital overseas (which is ever easier in an increasingly globalized world), or they will decide to work less and thus pay less income tax, if they aren't going to get rewarded for it enough to make working more worth it and they can afford to work less, or even just quit. (At a certain level of affluence and a large enough stack of "fuck you money", that happens, believe me).

Some steps have been done in this direction, e. g., raising the age from 62 to 67. But it honestly needs to go to *at least* age 70 and probably age 75.

When "Social Security" was set up in 1935 at age 62, guess what median life expectancy was back then? So nearly half never even collected it back then, and when they did it was often not for long.

Moreover, when it was first set up, it was, ironically, a *youth* benefitting program. That is, in the high unemployment era of The Great Depression, elderly would be "put out to pasture", so young unemployed could better find work. Along came WW2, where all people were either working or in uniform for the war effort, which made this moot, and the postwar relative prosperity made people forget this.

But the inevitable realities of longer life spans and fewer young relative to old make it a necessity, like it or not.

And this isn't just the USA - Europe and Japan have it even worse economically and demographically here. We were all scared by the eco-fiends with Overpopulation and Climate Change boogeymen. But the reality is that world populations are now in most places *graying* much faster than they are growing, and at some point there will be a "Great Die - Off", and any real or imagined Climate Change issues (much more the latter than the former so far) will be irrelevant in comparison or even negated. Even if technology allows us much longer lives, a world of geriatrics will not have the economic dynamism of a world of youth.

If there IS a Doomsday Future for us to all fret about, it will be much more like the movie "Children Of Men", and not at all like the movie "Soylent Green".

[Curmudgeon]

Oh by the way, congrats to @Adaeva for thinking about this at her young age! I have more hope for the future.

[Anonymous]

We got only a few options at this point:
1: Do nothing.

Outcome: The system will decline ever more in value and ween the population off it, until it is effectively worthless.

2: Now or at some point on the future when it is sufficiently worthless we can privatize and make voluntary the existing system. Finance the obligations with dept.

Outcome: This would cost trillions of dollars and perhaps bankrupt the federal goverment however the longer we wait the more inflation will devalue that obligation and thus the fewer real dollars we will be talking about.

Its worth remembering the original "Social security" retirement system was simply a way for "new deal" federal politicians to extract more tax revenue to pay for their enormous welfare state, while also creating a new dependent voter base.

As such the money was never saved, but rather involuntarily "invested" in the government's own bonds to finance its then current spending.

While the pay outs were set politically to buy votes knowing there was nobody to hold them accountable for the fraud. (Hence why you NEVER let goverment run any such program).

[Curmudgeon]

@monoprise Correct, it was, and is, essentially a trans-generational "Chain Letter". But you left out Option 3: Raise the retirement ages enough that the across the generations Chain-Letter scheme is solvent enough again. And as hard as that is politically, that is probably much more likely than your Option 2.

[Opinion Owner]

@Curmudgeon The option 3 you propose is essentially trying to make up the poor financial "investment" choices of the federal goverment by narrowing the number of people who can actually benefit from the 15% of their life's work they were forced to invest into the same.

Not only is this making the system even more abusive and unfair. its ignoring the effects of the system itself on civilization forced by the state to support it.

Believe it or not we don't live beyond our reproductive years for no reason but rather so that we can be parents and grandparents providing for and teaching the next generation.

The 'secure' this goverment ponzi scheme was promising was against the need for elder generations to provide for and support that same future generation and as such on a large scale for the first time in history they stopped in the state actually able to provide it.

So what happened to the kids of said civilizations after the 1940s without the benefit of being raised by their live in grandparents?

Well they became more and more radical and destabilized to the point where they can't even have enough kids much less raise them in a stable environment to sustain themselfs.

[Dargil]

FDR's people set the retirement age for SS at 65 when it was enacted. That was about the life expectancy at that time. It should be no less than 70 now with financial incentives to retire later. Further, those reporting incomes well in excess of what they receive should have "benefits" regulated. If I make $100,000 a year in dividends, I don't need it even though "I earned it". Someone I know will flame me here but that's how I feel.

[KrakenAttackin]

Oh boy, you wait until you are closer to retirement, have lost half to divorce, still paying alimony, child support, etc.

[KrakenAttackin]

Also, not everyone can work until 70 due to health or federal regulations. Air Traffic Controllers have to retire at age 56 for example

[Dargil]

@KrakenAttackin
For those who can't work, there's SS Disability. For retired ATC, there's a government pension.

[KrakenAttackin]

Yes, but Iif you are paying into something FOR LIFE, you have a right to expect a return, otherwise it just becomes a huge tax. Fuck that.

[KrakenAttackin]

Government failed us by raiding the SS trust fun and spending the money to buy votes.

[Curmudgeon]

@KrakenAttackin Be that as it may, longer life spans and a greater proportion of older retirees to younger workers means it is inevitable.

[Curmudgeon]

@KrakenAttackin And believe me, I know about rotten bitches ruining you financially. I get it. But the underlying reality of taxing younger workers to support older retirees is what it is

[KrakenAttackin]

@Curmudgeon Unfortunately, you may be right.

[MikeInHawaii]

I’m 58. I’ve been paying in for 42 years. The rate of return on Socialist Insecurity is so poor, I could walk away from it now, invest the money myself, and still come out ahead in about ten years. It should be abolished for the young and everyone should be able to opt out.

[OddBeMe]

I would ask, “Does that mean they can work longer without being in pain, hurting themselves?” I think the longer lifespans usually correspond with treatment of older people in their waning years. We’re luckily able to prolong their golden years.

That doesn’t mean they should be expected to work until their 70s per se, instead of 67-69 which is usually the age of retirement.

[Cubus]

Retirement age would be increased and it's a necessity, because people don't want to have kids and there are too few people in productive age, compared to postproductive. European countries are already rising it, because of aging f the society.

And if you think that's not a problem - just imagine a country where 2/3 of citizens are 60+. Imagine how politics would look like.

[driven159]

they should repay the money they took from social security that they used and as far as abolishing it we all paid are hard earned money into it it's not the governments money it is the ones that put into to it and as far as abolishing it if they did, they would all be looking for new jobs. Because they would all be voted out so fast, they wouldn't know what hit them.

[HighValue]

Somewhere around $130,000 or so they stop deducting social security. All they need to do is lift that limit and deduct the same percentage regardless of someone's income and it will have more than enough funds.

[Leopard23]

The need to raise the standards of living and people's earnings. All the money in the country is being funnelled up towards billionaires.

[monorprise]

The only thing that makes a rich man more resistant to the debasement of his wealth and income by the mismanagement of the currency than a poor man, is that a rich man can afford to diversify in investments the vast majority of his money.
This is because the rich man doesn't need to live on his money in his day to day life.

A sound currency closes the gap between the rich and poor as it allows the poor to better save and invest the money they do have on par with the rich.

What we need is a return to free banking, where the poor man might choose a form of money held accountable by a market under laws rather than unaccountable politicians without them.

[exitseven]

The threshold should be increase, It is currently 160K.

[FunkyMonkee]

Get Joe to stop spending all our money like a drunken sailor!!

[Curmudgeon]

@FunkyMonkee That would totally help. But discretionary spending, as bad as it often is, is at least not a mandate. What the SS system is, is a mandate, and we are stuck with it unless we can legislatively tinker with it.

[FunkyMonkee]

@Curmudgeon I've been paying into it for most of the past 40 years and, all I'm getting out of it, now, is hardly enough to keep me alive!! It'd be like having a full-time job where you only get paid $2.73 an hour!

[Anonymous]

Increase the retirement age. The problem is it's not popular with the boomers.

[gorydetails]

It should be abolished and let people keep and invest their own money.

[Anonymous]

Once people earn a certain cap, they should have to give back.

[monorprise]

What makes you think in a market in which we all serve each other that a man who invest in new systems of service is not giving back in said investment?

[KrakenAttackin]

Soylent Green.

[KrakenAttackin]

Seriously though, half of the social security money should be invested in the market not just given to the government to piss away (which is exactly what the government has done).

[Curmudgeon]

As awesome as Charlton Heston was in that movie, "Children Of Men" is proving to be a much more accurate doomsday scenario.