Never Discussed Ways to Balance the Budget

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Comment by Prof. Charles Xavier on July 29, 2011 at 1:21pm

Oh H--- YES! Thanks for this blog.

Comment by Val Tom on July 19, 2011 at 2:22am

Barry and others talking about how the actuaries did not count on folks living so long when Social Security was first setup and how we MUST now address the Social Security funding problem.  You realize, of course, that there have been many changes to Social Security over the years to either increase its funding, tax its recipients, etc.  I can't list all of them, but here are some examples:

 

***In 1956, the tax rate was raised to 4.0% (2.0% for the employer, 2.0% for the employee) and disability benefits were added. Also in 1956, women were allowed to retire at 62 with benefits reduced by 25%. Widows of covered workers were allowed to retire at 62 without the reduction in benefits.

**In 1961, retirement at age 62 was extended to men, and the tax rate was increased to 6.0%.

**In 1962, the changing role of the female worker was acknowledged when benefits of covered women could be collected by dependent husbands, widowers, and children. These individuals, however, had to be able to prove their dependency.

**In 1965, the age at which widows could begin collecting benefits was reduced to 60. Widowers were not included in this change. When divorce, rather than death, became the major cause of marriages ending, divorcées were added to the list of recipients. Divorcées over the age of 65 who had been married for at least 20 years, remained unmarried, and could demonstrate dependency on their ex-husbands received benefits.

**In 1993, legislation was enacted which had the effect of increasing the tax put in place under the 1983 law. It raised from 50% to 85% the portion of Social Security benefits subject to taxation; but the increased percentage only applied to "higher income" beneficiaries. Beneficiaries of modest incomes might still be subject to the 50% rate, or to no taxation at all, depending on their overall taxable income.

This change in the tax rate was one provision in a massive Omnibus Budget Reconciliation Act (OBRA) passed that year. The OBRA 1993 legislation was deadlocked in the Senate on a tie vote of 50-50 and Vice President Al Gore cast the deciding vote in favor of passage. President Clinton signed the bill into law on August 10, 1993."

 

The point I am trying to make is that Congress was not asleep at the wheel, but just could not fact making wage earners pay as much as needed, meanwhile increasing payments to buy votes!

 

 

Comment by Catherine on July 14, 2011 at 5:58pm

When these programs were started, the actuarial tables actually predicted most people would never collect everything they paid into the system.  Unfortunately, that is not the reality today.  People will, on average, collect far more than they ever contributed, so if you only contribute a dime to your piggy bank and then remove a dollar for every dime you put in, eventually you will have no dollars or dimes to remove.  All these systems need to be re-evaluated.  Why Social Security could not have been set up as a retirement account like TIAA-CREF, I don't know.  Congresspeople just haven't bothered to address these issues when they could have done something constructive about their problems including the Earned Income Credit, free tax refund in excess of what a person paid into taxes, illegal alien payments and paying ss to someone who never contributed at all and who is not qualified for survivorship benefits.  However, none of that helps the situation today which is much like the piggy bank with dimes and dollars - the piggy bank is simply going to run out of money and while some believe money grows on trees, it doesn't.  People need to be willing to hear the ugly truth about these programs and then work to come up with doable solutions!

Comment by Patriot Kate on July 14, 2011 at 4:18pm

I know that they lump Social Security and Medicare in with Medicaid and Welfare as 'Entitlements."

 

I think this is wrong because how can you call Social Security & Medicare 'entitlements' when we ALL CONTRIBUTED TO IT?

 

Now, Welfare and Medicaid are Entitlements, because no one ever made a contribution.

 

Make sense?

Comment by Barbara on July 14, 2011 at 2:14pm

Yeah why the bleep are they going after the elderly. Why not stop all welfare to the illegals? Stop all housing, food stamps, medicaid, checks and all special programs that has wiped America out.
There are more people on welfare than on SS. You add it up for every child they get xxx amount of money so they go and have another baby so they can get more money.
They've already stop giving them their 240.00 raise for the next 2 years.

Comment by Barry on July 14, 2011 at 1:06pm

Joseph. Treasure bonds ARE IOU's

Comment by Joseph R Gibbs, Jr on July 14, 2011 at 12:58pm

It is my understanding that the money's that were borrowed from the social security programs were replaced with IOU's from the treasury in the form of Treasury Bonds. Cash them in. Remove the illegals, drug addicts and other none deserving recipeints, replace the funds and the programs should be solvent.

Along the same theme, Correct the IRS programs that give a person a tax refund of $2600.00 when she had only worked as a waitress at Waffle House for seven weeks and paid in close to $100.00 in taxes. How does she, and all of the countless others, qualify for a "refund" that exceeds what she paid in by $2500.00? A refund is funds that were paid in and are being "REFUNDED" due to overpayment. If you never paid it in and get a check for it, it is not a REFUND.

Comment by Barry on July 14, 2011 at 12:44pm

You can't get there from here. People indeed paid in but it was immediately removed and spent. Furthermore since the money was not invested there is no gained interest to provide for increased outlay. People are paid far more than they ever put in to these Ponzi schemes so yes they must be trimmed and eventually displaced by sound market solutions or yes, nothing at all. Our founders never envisioned these programs because they fly in the face of liberty.