Still, the real question is what to do about the OASI fund. It can be fixed through benefit cuts, injecting new revenue into the system, or a combination of the two. Facts: Social Security lends money to the federal government, not the other way around. It was designed as a pay-as-you-go program, and every penny it receives is credited to the trust funds. Social Security is prohibited by law from borrowing, so it needs some level of reserve to pay benefits whenever cash on hand runs short.
Those reserves are at a historical high point as a result of reforms made in aimed at funding the anticipated retirement of the baby boom generation. The surplus trust funds are lent via a special type of Treasury note to the federal government, which uses the funds to finance ongoing operations.
Nancy Altman on Social Security Myths
But Social Security is no more a driver of the debt than China. Both are lenders to a government that chooses to spend significantly more than it levies in taxes—and both have the right to be paid back what they are owed. Facts: This is a favorite argument of Social Security conspiracy theorists, who argue that the government has raided Social Security to fund other programs, and that the money will never be seen again. President Bush in effect amplified the myth during his privatization campaign by paying a visit to a fil e cabinet in West Virginia where the aforementioned Treasury notes are kept.
At right, you will find the language from the report.
The perpetrators of Ponzi schemes lie to their investors; Social Security is an open and transparent system. The trustees include three cabinet secretaries, two independent appointees one Democrat, one Republican , and the commissioner of the Social Security Administration. Pages: 1 2 3. This is the most egregious white-wash of the declining Social Security program I have ever run across.
Some corrections. Yes technically Social Security does not go bankrupt. But its revenue stream will be less than the expenditure stream. The difference will start out small, but increase over time. Then some changes will need to made to the program. There are a number of choices. There will be far bigger problems than Social Security if this becomes an issue. Social security is exactly like a Ponzi Scheme in the way it operates. Just pull out the negative sounding words from the inflammatory definition picked nd it fits well.
It has relied on new members to pay off the older members as it continues.
It will have problems, as Ponzi Schemes do, when there are no longer enough new contributors to pay off old members read that as current workers and retirees. We are living longer and that is one of the major problems. When started, the retirement age was less than the expected age of the population. Not that many reached retirement age and they tended not to live that long into retirement age. Now it is not uncommon to live twenty or thirty years into retirement. Extending the retirement age is one of the major factors that can be adjusted.
Yes some groups live longer than other groups, but this is no different from the inception of the program. This option should not be dismissed summarily as the author does. The program is it is currently has a shaky future without major changes. In , there were workers per retiree.
A small contribution from each retiree would easily provide a retirement income for a retiree. We are now down to less than three currently employed people per retired person. On average, an employee must pay enough in taxes to provide for one third of the income of a retiree. You can help adding them by using this form. If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item.
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Consumer Action - The Truth about Social Security
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