Posts in "Social Security"

By Julie Borowski at 3:38PM

Aug 26, 2010

America Needs to Take Social Security Lesson from Chile

In the current Social Security debate, the left often attempts to label those in favor of private accounts as loony. Typically, supporters of the Social Security status quo use scare tactics in efforts to convince the American people that private accounts would be “risky” by “gambling your Social Security on Wall Street.” President Obama pledges that he will “continue to fight to make sure we do not jeopardize the future of Social Security with risky schemes that leave our seniors vulnerable."

In America, how risky would private Social Security accounts be? For this answer, we can look at the country of Chile for some insight. Chile once had a Social Security system similar to what the United States has now. Prior to 1981, Chile’s Social Security system faced a crisis— its Social Security deficit rose to about 25 percent of the country’s economic output. Chile’s efforts to “fix” Social Security by rising the retirement age and cutting benefits proven unsuccessful. Finally, in 1981, Chile emphasized individual liberty by allowing workers the choice to invest in personal Social Security accounts.

In Chile, 93 percent of workers have voluntarily chosen personal accounts rather than government controlled accounts. On the other hand, Congress has trapped all American citizens in the compulsory government run Social Security with no other retirement savings options. Those Chileans who opt for a personal account contribute 10 percent of their wages to one of 20 pension funds of their choice. Unlike the United States, Chileans are able to pass the remaining balance in their pension funds to loved ones upon their death.

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By Matthew Malkus at 6:57PM

Aug 11, 2010

Pick an Agency, Any Agency: SSA

As fiscal conservatives continue to seek avenues through which to derail the federal gravy train, it helps from time to time to take a look at the mind-numbingly long list of federal departments and agencies that are on board. Of course, this list is hardly exhaustive – just one that is publicly available – but it can certainly give us some concrete ideas on how and where to cut the spending.

Today: The Social Security Administration (SSA)

About: “The Social Security Act was signed by FDR on 8/14/35. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940. ”
FY 2010 Budget: $695 billion in benefits + $11.6 billion in administrative costs (Source)

That's right – Social Security. The gift that keeps on giving, if you consider higher taxation, retirement ages, and future entitlements to be a gift. Social Security is the elephant in the room in American politics: everyone knows it's an issue, but no one is willing to cut. Don't you care about the poor and the elderly? We can't just kick them out into the street! Anyone who proposes the end of Social Security must be a heartless monster!

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By Bonnie Kristian at 7:44PM

Apr 21, 2010

Congressional Pay Grows 15 Times Faster Than Social Security Checks

The Senior Citizens League is outraged. Turns out, Congress raises its own pay 15 times faster than it raises the money paid out in Social Security:

Seniors who retired in 1990 with the average Social Security benefit have seen their annual payments increase by just $4,967 over the past 20 years. During the same time period, members of Congress have awarded themselves pay raises totaling $77,400 per year – a whopping 1,458 percent more than seniors.

It's not surprising, really that Congress is more interested in taking care of itself than it is in giving money to old people which it has already spent on other projects. In response, a bill has been introduced to actually cut congressional pay by 5% next year -- the first pay cut in about 80 years. That's a good start, I suppose (though the $4.6 million it will save in the first year is a mere drop in the bucket of the yearly budget -- let alone the national debt).

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By Sam Swedberg at 4:50PM

Feb 8, 2010

$107 Trillion

social uh oh

In 2009 alone we had $107 trillion worth of unfunded liabilites, 10 times our national debt. Unfunded liabilities are the difference between the promised benefits of current and future generations and the amount of taxes and Medicare premiums collected. How long will the American people, especially the younger generations, allow blatent stealing of their money for programs they'll never benefit from anyway? I haven't met anyone who is complacent about money they've rightfully earned, yet most people still don't bat an eye when looking at their paychecks. Is it based on a blind faith that government will always provide? Whatever the reason may be, something must change. The sooner the better.

This article from the National Center for Policy Analysis is a great tool for anyone interested in arguing why Medicare or Social Security should be scrapped.

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By UW Madison at 1:05PM

Sep 29, 2009

Social Security is Now Running Annual Deficits

It was reported over the weekend that Social Security is now running a deficit due to lower revenues and an aging population.

The AP reports that this will not affect payouts but simply add to the federal deficit because SS has accumulated a surplus over the year. The only problem is...that money has already been spent. Our national debt is so enormous that it's foolish to act as if these supposed surpluses mean that those who have already paid into SS will get back their investment.

Also unrealistic is the claim that SS will begin to run surpluses again by 2016. This assumes the recession will end this year and a substantial economic recovery will immediately begin. So I'll predict right now, on the record, that SS will never run an annual surplus again...EVER.

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By Bonnie Kristian at 12:49AM

May 14, 2009

The Beginning of the End of Entitlements?

The Washington Post reports on upcoming troubles with the entitlement system:

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By Chet Butterworth at 8:51AM

Dec 21, 2008

Social Insecurity?

I was sitting in the living room with my aunt, a retired teacher, discussing the finer points of politics when inevitably the topic of Social Security came up with my AARP age family member. Now, my aunt is one step ahead of my grandmother realizing the system is just slightly more than failed. She realizes that she has been paying all her life with not much hope for return in the coming years and that for the younger members of our family the situation gets even worse.

Social Security was originally intended to be left alone and used only for retirement benefits for those who “invested” into the program. Matt Whittlief of United Liberty compares Social Security with a Ponzi Scheme: take money from investors to pay off prior investors.

“You invest in the fund with the promise of future returns, but, in fact, there is no investment made by the administrator. The only source of funds for the returns is new investment…

In other words, more taxes are collected from current workers than are paid out as welfare to beneficiaries. But, like all Ponzi schemes, this will come to an end. The welfare for beneficiaries will exceed contributions sometime in the next 10-20 years as baby boomers retire.”

My aunt, like Ron Paul, agrees that a change has to be made. We need to get my generation out of the deal. While my puny paycheck dwindles to pay for Social Security, a growing number of retiring baby-boomers and increased government spending project Social Security to be gone 2017. What do I get? Nothing. Check out this clip from the documentary I.O.U.S.A

Social Security by 2017

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