I've never been one to believe the hype surrounding a possible demise of our Social Security system. But I've operated more on faith that our government would not allow the system to go under, than any personal understanding of the economics or math involved.
So, thanks to Bob at The Platinum Years Network, I was glad to see this article by Dr. Irwin Kellner.
It's always nice to have some numbers to back up my gut feelings.
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8 comments:
Nope I won't get SS, I'm 28 years old and I won't get I guarantee it. By the time I am eligible it will be means based so because I am a responsible saver I won't have it.
Ya know, LL--much as I love your comments and your blog (and in both case, that is a lot!), you are far too young to be as financially and politically conservative and cynical as you seem to be. To the extent there is ever a means test, I think it will be at extremely high income levels--my hope for you is that, in such a case, you ARE ineligible when the time comes. :)
Grace,
Thanks for the link. There is always exaggeration on the "doom" of things during an election year, especially if the party is about to change. I can not wait until this election is over and we can move on.
The obvious, gaping hole in that article is the Medicare/caid costs. I don't think SS will go broke in the next few years, and even if it does I don't think it will be taken from you, Grace.
But like LL, I have no expectation that I will ever see the 15K/year I pay into Social Security. I don't think that's cynical, it's just math.
Kellner’s article is a comforting change to all the pessimistic articles out there. I just finished Alan Greenspan’s book “The Age of Turbulence” where he predicts both an increase in payroll taxes and a decrease in benefits will be necessary to keep social security solvent. He recommends these strategies begin sooner rather than later. But then again, he also predicts a gas tax of $3 or more per gallon will be necessary before Americans will begin reducing their fuel consumption.
I am okay with paying for it, because I know my family members are drawing on it.
I am not politically conservative if you read my blog, but heck I am fiscally conservative because I have to be.
I feel bad because there is a lot of trouble with the system. We need to revamp the rule and start taxing all income not cap @ $100k/year. This would make SS immediately solvent.
I wish that we would start to revamp a lot of social systems. I don't mind paying for universal health care, more SS tax, etc. But it's the fact that don't bother to even try.
Universal Healthcare would prevent all the medical bills and 50% of BK in the US. But people are too cheap to look long term. They only see the increase in taxes instead of the bigger picture.
Same with SS, long term it'll be better if we lift the cap and tax everyone equally.
But politicians only care about the here and now.
LL--interesting that you say that. My sister who is in banking and made over a million last year says exactly the same thing--she would willingly continue to have SS taken out even at her high income. You and I agree as to healthcare as well.
The bigger picture is that people would end up with more with universal healthcare. People wouldn't worry about medical insurance, they wouldn't stress over being "uninsurable". Also BK for medical bills would be lessened.
But does insurance companies really want this? NO! It goes against capitalism.
SS tax, without a cap then the rich would subsidize the poor. But without this subsidy, how does the poor survive?
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