AJC.com > Opinion > Opinion Talk > Archives > 2008 > March > 27 > Entry
DEL.ICIO.USLong-running D.C. scam called Social Security
The Atlanta Journal-Constitution
The nation’s biggest and longest-running financial scam isn’t playing out in the mortgage industry or on Wall Street. It’s headquartered in Washington, D.C., and they call it Social Security.
This week, in fact, some of the leading perpetratators of that scam called a press conference, hoping to frighten the American people into extending the fraud’s lifespan. As people such as Treasury Secretary Henry Paulson and Labor Secretary Elaine Chao came to the microphone, you could hear the nervousness in their voices. They know that a day of reckoning is coming.
As in most such scams, there are two versions of events. One is the official sales pitch used to bring in the suckers. The second is the hidden reality, the way the racket really works.
In this case, both versions begin in 1983. That year, Congress and President Ronald Reagan agreed to increase Social Security taxes on the working and middle classes well above what was needed to support the retirement program in the near and midterm. Surplus revenue from that higher tax was supposed to go into the Social Security Trust Fund, to be drawn upon later as the baby boom generation moved into retirement.
Officially, the plan has worked pretty much as promised. The surpluses have indeed rolled in —- in fiscal 2007 alone, Social Security taxes raised $175 billion more than the program spent. Thanks to surpluses accumulated through the years, on paper Social Security is financially sound through at least 2041.
But here’s how things really work: Once collected, the extra taxes charged to the working and middle classes for Social Security haven’t gone into the Social Security Trust Fund. Instead, they have been treated exactly like income taxes and have been spent running government. As a result, after 25 years of paying extra taxes, tens of millions of lower- and middle-income taxpayers have nothing to show for it but government IOUs.
For the most affluent taxpayers, however, the 1983 deal has been sweet. First, they are largely exempt from paying the Social Security surtax. In 2007, for example, Social Security taxes were collected only on the first $97,500 of a person’s wage or salary, and not collected at all on other forms of income.
That has produced gross inequities, as billionaire Warren Buffett has repeatedly pointed out. According to Buffett, he pays less than 18 percent of his enormous income in combined federal taxes. But because of payroll taxes, his secretarial and support staff pay a combined rate of more than 30 percent.
In fact, as Buffett and others point out, President Bush’s tax cuts for the affluent would not have been possible without the trillions of surplus dollars collected from secretaries and other working Americans in the name of Social Security.
But pretty soon, that scam is going to come to an end. With baby boomers now retiring, the Social Security surplus declines every year. By 2017, when the surplus disappears altogether, two things will happen:
Without the hidden subsidy from Social Security, the true size of our federal deficit will become clear.
After 34 years in which the general fund was subsidized by Social Security, the flow of money will reverse. The general fund will be tapped to subsidize Social Security benefits, which means taxes will increase, particularly for the affluent.
That prospect has certain sectors of Washington in a low-level panic. President Bush’s Social Security “reform” was one effort to try to squirm out of the deal cut in 1983, and other efforts to solve the problem by cutting benefits to retirees are sure to follow. As Paulson put it this week, “the sooner we take action to strengthen Social Security’s financial footing, the less drastic the needed reforms will be.”
Again, on paper, Social Security’s financial footing is solid through at least 2041, and working Americans have been paying extra taxes for 25 years to make it that way.
But now, when they’re about to start collecting on the deal, their leaders want to deny the deal existed.
Permalink | Comments (108) | Categories: Forum
Comments
Commenting is now closed for this entry.
By ron
March 27, 2008 8:08 AM | Link to this
Good morning Jay,Welcome to the world of savage people.Jim’s bunch will be over soon to tell you where you erred.
By Jim's a Cherry Picker
March 27, 2008 8:16 AM | Link to this
Hi Jay,
Didn’t you read Wooten’s blog yesterday. He said that GW’s done his part to fix Social Security.
I thought that this was fixed.
Where’s the disconnect?
By Ken
March 27, 2008 8:18 AM | Link to this
Good column Jay. The first post is correct, the Jim-bots will soon be over here to tell you that the Rick pay over 125% of their yearly income in taxes and that Reagan (rather than signing larger tax increases as a percentage of the GDP than any other President in history…which is what we call a “fact” in my circle) never, ever raised taxes. In fact he cut them. Oh yes, Dutch cut them while simultaneously arm wrestling the cold war single handedly to an end.
The fact is simply that Social Security COULD work as advertised if the federal government, Democrat and Republican alike, would have kept their promise and used the money the way it was intended. As it is we’re headed for a reckoning. Though I do not believe the affluent will be taxed as you say, but rather the Social Security net will vanish and the nation will plunge into a caste system where poverty of the elderly becomes our greatest national resource.
Have a great day everybody!
By Dusty
March 27, 2008 8:19 AM | Link to this
Well, a lib attacking the paternal benevolence of our elected and business leaders. Typical. Why don’t you support the troops and fight against liberal ideas, rather than criticize our President and other leaders who are just trying to do their best for ALL Americans. In them we trust.
By Steve
March 27, 2008 8:41 AM | Link to this
Wasn’t the law to raise FICA and Medicare taxes something that was passed during Jimmy Carter’s presidency, with the increases to come in future years — and that what happened in 1983 was just an acceleration by one year of the final increase that was passed udner Carter? Why are you blaming Reagan for something that was mostly mandated under Carter?
By yankee
March 27, 2008 8:42 AM | Link to this
Is Dusty usually drunk this early in the AM?
By GB
March 27, 2008 8:52 AM | Link to this
I want my money back!!! Dusty, the majority of our administrations since Reagan have been republican. If I’m wrong let me know, but Clinton created a huge surplus during his term. Did he take it from the SSF? Open your eyes and smell the coffee; the conservative presidents have been robbing us blind. Don’t even talk about the war to find bin Laden in Iraq?!? Remember 9/11…
By MiltonMan
March 27, 2008 8:53 AM | Link to this
Yet another “great” Democrat welfare plan that is going down the toilet. Thanks to you Republicans & Demorats alike who could not even pass a simple privatization.
By Chris
March 27, 2008 9:00 AM | Link to this
With all the 401ks and IRAs, ect…, it seems to me that we need to abolish Social Security. Why should the government be allowed to steal my money for someone else’s retirement or disability benefits, or for any other gov’t program? I think if the American people were given their money back (stop stealing it) then we could make our own decisions on where and how to invest OUR money for OUR retirement. Problem is we all know that the gov’t thinks we do not know what is best for ourselves (see Sonny Perdue and Sunday alcohol sales).
Thank you.
By Auburn3020
March 27, 2008 9:06 AM | Link to this
Check here for a take that doesn’t exactly match Bookman’s standard-issue “everything is fine so long as taxes always go up” nonsense:
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/26/AR2008032602915.html?hpid=opinionsbox1
By Fix It
March 27, 2008 9:08 AM | Link to this
Instead of blaming Republicans & Democrats, it would be nice if the media would start questioning the 3 remaining presidential hopefuls what their plans are to fix this mess. The issue gets ignored in the staged “debates”. I fairness to Bush, he did make an attempt, but the Democrats insist the program is in good shape.
By Fix It
March 27, 2008 9:09 AM | Link to this
Instead of blaming Republicans & Democrats, it would be nice if the media would start questioning the 3 remaining presidential hopefuls what their plans are to fix this mess. The issue gets ignored in the staged “debates”. In fairness to Bush, he did make an attempt, but the Democrats insist the program is in good shape.
By Stan
March 27, 2008 9:14 AM | Link to this
Jay,
You’re half right. Social security is a scam and a long running one at that. However the solution is to dissolve it in a manner that allows the people currently counting on it to draw it as needed and those of us who are not counting on it be allowed to keep at least a part of OUR money that is being taken from us to fund this fraud.
Stan
By AH
March 27, 2008 9:16 AM | Link to this
Wow, instead of pointing out that the whole social security program is a fraud Jim wants to blame Ronald Reagan for all the problems. What if Reagan didn’t touched it then it would have been perfect. Why not admit that the whole thing is a fraud. I want my 12.4% of my paycheck back. (6.2% from me 6.2% from my boss, money I never even get to see.)
By Peter
March 27, 2008 9:22 AM | Link to this
Boy you gotta love the WRONGS on this blog….. You get hit in the head with a board, and they call it a feather.
Lemmings all head to the cliff at once….then jump like the mindless we see as the Right.
Anyone who thinks BUSH tried to fix things, ought to know by now we are lucky he did nothing.
We already have huge MESS created by Bush, and the less he touches at this point, is fine for now!
By ReformEntitlementsNow
March 27, 2008 9:23 AM | Link to this
Jay… you nailed it today my friend! I’ve been talking about these issues for years and you hit all the major points. The President said he was going to fix these problems instead he’s created an even bigger fiscal challenge with Medicare Part D.
By Tom Pain
March 27, 2008 9:24 AM | Link to this
Our politicians simply refuse to ‘fess up about Social Security and the commitment that was made to the taxpayers. Why? Is it simply because they know the money is not there. Is it simply because they know the truth will hurt them in an election. Is it simply because they are too ignorant to handle the truth themselves. I think it may be all these things and more.
By Jay Bookman
March 27, 2008 9:26 AM | Link to this
Fixit, the Social Security program IS in good shape. It is actuarially sound until at least 2041. The federal government, on the other hand, is in bad financial shape, a problem that Paulson, Bush and others falsely try to attribute to Social Security. They would prefer that the solution to the mess come at the expense of SS retirees than affluent taxpayers, which is why they’re pitching it this way. And privatization is just another effort to do that.
By Brian, Decatur, GA
March 27, 2008 9:28 AM | Link to this
Social Security is a program that would work fine if the powers that be in Washington, D.C. would quit raiding it whenever they need some extra cash to run whatever pet program they have going at the time. If they want to “fix” Social Security the best thing they could do is to keep their @#$% hands off of the trust fund.
By Rocko
March 27, 2008 9:30 AM | Link to this
Man that Bookman chick looks slightly man-ish. But only slightly. She even has one of those gender-vague names like Pat or Terry(i).
By Richrd
March 27, 2008 9:31 AM | Link to this
Jay, Just a couple of words, FAIR TAX! Richard
By Copyleft
March 27, 2008 9:31 AM | Link to this
Chris and AH are right! Government shouldn’t be taking our money to help those so-called “other people” in our so-called “society”!
Darnit, I haven’t called the fire department even ONCE, so why should I pay taxes to keep them running? For that matter, I’ve never used the highways in Montana—why should my taxes pay for those? And the notion that we should look out for each other and pay into some sort of “public fund” to help the neediest—well, Ayn Rand put the lie to that, by proving that no such thing as “society” even EXISTS! So what if the elderly starve and die? They deserve to, for making bad choices (like having poor health). That’ll never happen to ME, no sir.
Gimme, gimme, gimme that money. It’s all MINE, every cent of it… and the country and government have done NOTHING to contribute to my success in any way. Waaaaahhhhh!
By zeke
March 27, 2008 9:32 AM | Link to this
Again, Bookman shows his liberal bias stupidity! The problem with social security did not start with Reagan or Bush, but, with that great socialist FDR and continued to be advanced by that second great socialist LBJ! Social security was to have expired 30 years after it’s inception, replaced by personal plans to fund old age and retirement! However, the democrats figured out that they could control, even guarantee, that they could bribe people into voting for them by manipulating social programs and their crimianl confiscation from the hard working successful citizens and handing it out to those “less fortunate”! What a line of crap! Look to Russia and other former soviet block countries and they have instituted their version of the “fair tax” to astounding success! Their economies are exploding with activity and they are flourishing! The liberals and democrats keep pushing us toward socialism, and our economy is faultering! But, they can blame Bush! After all, he caused Katrina, the mortgage fiasco, flooding on the Mississippi and that airplane crash in South America! What a load of horse hockey! Remove corporated taxes! Why? Corporations pay no tax! The citizens who have IRA’s, 401K’s and own stocks individually are the ones who pay that tax! Union menbers, teachers and retired workers pay that tax! And, we keep hearing that we should penalize corporations for moving their headquarters offshore! Again, very stupid! What we should do is allow those corporations to move their profits from operations not located in the US back to the US tax free! They already pay taxes on those operations in the countries where they are located, and, then the liberal socialist here force them to pay an addititonal tax here! Stupid! The US is the only country to do that! I would move my corporate headquarters elsewhere, not to avoid paying the tax on my US operations, but, to avoid paying a ludicrous tax in the US on my other operations! THAT MAKES PERFECT LEGAL SENSE!!!
By Josh
March 27, 2008 9:45 AM | Link to this
The scam of Social Security started well before 1983. Look to Frank Roosevelt for the true culprit.
By Wild Bill Hiltner
March 27, 2008 9:55 AM | Link to this
Jay - how many jobs (and the ripple effect of taxes thereon) have WB’s support staff created v. how many has WB created. Instead of bawling like a three year-old who received one fewer cheetoh than a sibling, perhaps you should consider how lower tax rates encourage entrepreneurs to take risk (because they get to keep more)that creates jobs which broadens nominal tax revenue collections. This, along with your support of the moolie, expose the simple mindedness of your thought process.
By Chris
March 27, 2008 9:59 AM | Link to this
Copyleft, I work hard, save my money, buy my own health insurance. I pay my taxes, own a home, and I make less than $35,000 a year. I realize that there are individuals out there who fall on hard times and at times need assistance. Some hard line Ayn Rand believers would say let the not for profits take care of then, that’s what they are there for right? To a point, I agree with them to an extent. We as a society should help out the less fortunate, the truly less fortunate that is. Everyday I see able bodied people walking the streets asking me for money or a cigarette when they are capable of going out and getting a job and start to support themselves. But why should they? Where is the incentive when there are gov’t programs like Social Security as well as countless others, to provide for them? Where is the incentive for a person living in gov’t housing, receiving food stamps to go out and work hard? There is none! That is the society we are creating and it began with the expansion of Social Security and L. Johnson and his other social programs. When will it stop? When do we as tax payers say enough? When a fat person gets disability for being fat and begins to collect Social Security, then there is an obvious problem. But of course your type wants everyone on an equal playing field and everyone to win. Everyone gets the same amount of money and the same size house. Everyone is the same, no one is better and no one is worse. Sounds alot like the teachings of Karl Marx.
By Chris
March 27, 2008 10:03 AM | Link to this
The whole program is a sham but not for the reasons Jay thinks. The bottom line is why is the government responsible for taking care of people in retirement. The truth is some people take out more than they deserve and others get hosed. There is a cap on wages exposed to Social Security because there is a cap to the amount of benefits. Only a true liberal feels that the rich ought to take care of everyone else.
Ask yourself why, if the government wants to make sure people have money in retirement, that they track each persons contributions in an account, add interest for the debt avoided to each account, and then have a prescribed withdrawal plan for each person. The answer is that Jay and his buddies know that the poorer workers won’t benefit as much if actual contributions are tracked. If you put 12.4% of your salary in savings and earn interest on it, that is going to provide a nice nest egg in your retirement. If its not enough money, then you need to get out and work on making more money rather than counting on the government to provide a better life for you than you can provide yourself.
The truth is under the current system you can work for 10 years and get full benefits. You gain nothing by any work and money you pay in after that point. In my opinion, that is just wrong and is a fundamental flaw in how Social Security works, regardless of all the money shuffling going on in D.C.
By Funnye
March 27, 2008 10:04 AM | Link to this
It’s hilarious to see the Republicans and Democrats here slinging mud at their opponents’ most beloved dead presidents. None of which does a damn thing to address what’s going on now.
By Chris
March 27, 2008 10:04 AM | Link to this
Copyleft, Forgot to mention that your are absolutely right, the gov’t had nothing to do with my success, I credit hard work, and those who came before me and taught me how to do what I do and the values instilled in me by my parents. Not to mention all those who fought the enemies of this great nation that made it what it is today!
By Tom Robinson
March 27, 2008 10:08 AM | Link to this
Clinton raided the SS trust fund to pull an accounting sleight of hand to get his so called deficit reduction.
Team Clinton took the money from the SSTF to reduce the deficit in the general fund and left behind an IOU backed by the federal treasury.
It is akin to an embezzler taking money from a company, but leaving a check behind for the full amount took. the check is good until you try and cash it
By MADMOMMY
March 27, 2008 10:09 AM | Link to this
Richard, I have to agree with you 100% FAIR TAX is the way to go. I fear not only what life is going to be like in the next twenty years, but how is life going to be for my children since things just keep getting worse and worse. Has my ship already sailed, before I was even able to set foot on it? As a young adult, I worry about what the future is really going to hold since I have started giving up on the whole “American Dream” that people always talk about. I don’t think it is the same dream my parents had, or my parents before them. We need to wake up and remember how long Rome took to destroy herself since we really don’t have that long of a track record. What we do have is thinkers. Now, if only we could figure out a way to get them to think. Let’s work on solutions instead of insults like we are children in the sandbox.
By Peter
March 27, 2008 10:16 AM | Link to this
Gotta love Zeke here……. blabbering with hardly anything to say……..But in this mess Bush has created, he wants to point out Liberals, ans say Russia is doing great.
HA HA HA…….. what part of Russian economics is doing great Zeke, the Black Market ?
Gee Zeke if we are doing so well, why has the government stepped in to help with the entire banking sector, and the likes of Bear Stearns?
By archie
March 27, 2008 10:16 AM | Link to this
When Bush was spending what precious political captital he had trying to fix SS, Jay wrote a column essentially stating there was no problem with SS. And now he calls it a scam. With that kind of flexibility, Jay should give up the newspaper business (before it gives up him) and run for public office.
By AH
March 27, 2008 10:19 AM | Link to this
It must have been horrible back before SS when all the old people in this country were living in the streets and their dead bodies filled the gutters. Give me a break people got by without a promised lifelong handout like SS. What did it take back then? Maybe stronger family connections, a lot more personal responsibility than we have today and some God Damn common sense. If your getting older and you don’t have a pot to p** in maybe your doing something wrong. There is no pile of cash up in D.C. that we all get our paid into money back from. That is not how it was set up and it never worked like that. You always have to have more people paying into the system than collecting. And if you can’t make ends meet, oh well just write a check anyway and let someone else pay it off later. BullS&*t, that is a shell game played with more than just our money but with our country and the great experiment.
By Jay Bookman
March 27, 2008 10:20 AM | Link to this
Mr. Richardson, you are correct. Clinton did exactly that. But so did Reagan, and the first President Bush and the second President Bush.
By Middle America
March 27, 2008 10:25 AM | Link to this
I guess the billion dollars a week spent in Iraq is coming at the expense of hard working people who did their part to pay into social security only to have the program be in jeopardy when it is time for them to retire. It’s all a shell game. Social security was set up to pay for itself and if it were left alone, would do just that. The problem is that our government, elephants and donkeys alike, overspend their budgets on things we don’t need, pork barrell projects and needless wars of choice in Iraq, and so they dip into the cookie jar to pay for those things, and then spin social security as a “welfare” program. Last time I checked, you pay in…you get out. How exactly is that “welfare”?
By Hillary
March 27, 2008 10:28 AM | Link to this
The answer is simple. The affluent who have 401K’s, Roth IRAs and corporate pensions should be exempt from receiving Social Security benefits.
Another solution is for the government to seize 15% of each individuals 401K, Roth IRA and corporate pension account, and use that money to prop up Social Security and fund some groovy new government programs.
By Nan
March 27, 2008 10:31 AM | Link to this
Thanks for the good laugh. Banks are collapsing right and left, the stock market is extremely nervous, the economy is in free fall — and Bookman wants us to believe Social Security is a fraud. Privatize, trust your golden years to the same group of free market types who hyped subprime mortgages and pumped up the housing bubble, and look forward to fighting over who gets the best refrigerator box in the alley in which to live.
There’s a reason why the middle class has been able to expand in this country and we’ve been able to do things like own our own homes, send our kids to college, and generally have a pretty nice lifestyle. We’re not picking up the tab for our elderly parents medical bills (at least not 100% and not directly), and we’re also not having to keep them fed and housed. The choice used to be that you worked until you dropped dead or you became a burden on your children. Want to go back to that? Fine, dump Social Security. The idea that the average person working at the median wage in this country can (or will) save enough to support him or her in retirement is a total fraud, a scam. People would have to be salting a heckuva lot more away than they do now. Remember, this is a country with a negative net savings average. If we didn’t have money sucked out of paychecks involuntarily for SS, most people wouldn’t save a dime toward retirement until it was almost on them — and by then it would be too late. Sit down sometime and do the math — and when you see how much you’d really have to save to end up with the same annuity you’ll get from Social Security, especially when you factor in the fees you’d have to pay to mutual funds or stock brokers, some of you might stop drinking the free market Kool-Aid.
By Middle America
March 27, 2008 10:33 AM | Link to this
AH,
I state my question again:
You pay in….you get out. How exactly is that welfare?!?!?
welfare: financial aid and other benefits for people who are unemployed, below a specific income level, or otherwise requiring assistance, especially when provided by a government agency or program
Nowhere in that definition does it say anything about paying into a program and then receiving money back after you retire.
Are we that stupid in America that we don’t know how social security works? The amount of social security benefits you receive are in direct correlation to how much you worked in your life. But you’re right, it’s welfare. Idiot.
By Copyleft
March 27, 2008 10:35 AM | Link to this
Chris, it sounds like your grief is with WELFARE, not Social Security. And if you have ideas for welfare reform, great! Contact your representative and suggest them.
Now, do you have anything to say about Social Security?
By Mom4
March 27, 2008 10:44 AM | Link to this
Mr. Bookman, If Mr Buffett’s secretarial & support staff are paying 30% of their income in federal, FICA and medicare taxes, then they are most likely part of those affluent taxpayers that you speak. Just because people are called secretarial or support staff does not mean that they are “working” (your word - not mine) or middle class. I would really like to see what income ranges you consider fall into the income categories that you refer. ie. affluent taxpayers, low income and middle income taxpayers. If you happen to respond, please differentiate between taxable income and AGI. Thanks.
By Ben Holt
March 27, 2008 10:49 AM | Link to this
Good Morning: It seems to me the real scam is the tapping of the Social Security Trust Fund for general government spending. Ben
By Jay Bookman
March 27, 2008 10:53 AM | Link to this
To Mom4: Mr. Buffett apparently pays his secretary around $60,000 a year, which fits right between what I would call the working and middle classes. That is not what I would call affluent. Personally, I would define affluent as the top 1 percent of taxpayers, which according to the Tax Foundation meant a gross income of $364,657 in 2007.
By Peter
March 27, 2008 11:01 AM | Link to this
I really guess what most folks on this blog do not understand, the reason Social Security is in trouble, and also cannot be stopped, is because Congress and the President keeps robbing from the program to pay for the Tax cuts we have today.
Folks we DO NOT balance the budget, we run the government like a failing corporation.
We have a WAR that is sucking America DRY, we owe Billions to the Chinese because of this WAR.
We are not even close to being able to pay for the WAR, take care of the Vets that come home hurt, and take care of the core programs at home here in America.
When Americans decide this type of foolish Vodoo Economics is enough, then perhaps we can save America, and Social Security.
How much has each person contributed so far in their life time….. I have contributed well over $200 K personally.
So tell me if I do not receive my money back after retirement….. then what will I have paid in for?
All it would then have been is JUST ANOTHER TAX……. and not any type of retirement supplement!
Get a clue folks they take our money monthly…..and what are they actually doing with it ?
By GaLiberal
March 27, 2008 11:05 AM | Link to this
And no one saw through this deception until now? There was a large outcry about this “bailout” in 1983. The critics were stifled because SS was insolvent and action had to be taken now. Reagan panicked everyone into believing this would solve all the SS ills when in fact it simply exacerbated them. Now comes Bush who wants to “privatize” SS by allowing people to put some of their contributions into the stock market. After all, his rich buddies are doing well in the stock market. I wonder what snake oil will be next. Perhaps a “means test” to reduce your benefit based on all the money you put away for your retirement.
When you vote Rethuglicon, you vote against your own best interests. And the SS mess created by Reagan and Bush is living proof.
By The Peoples for a Nuked Amerika' Century~!
March 27, 2008 11:10 AM | Link to this
-=-
Personally I think before we make judgement on the success or failure of the Social Security System, we should collect those debts owed to it by the government. I might add with Interest!….
Cheers’
By Bruce
March 27, 2008 11:22 AM | Link to this
To Tom Robinson - every president since Ronald Reagan has raided the SS trust fund, and most, but not all were Republicans. I don’t understand your picking on one president over another, other than he was a democrat that you happen to have disliked. We’ve got to get over partisan bickering if we are going to solve this issue. Unfortunately our leaders - that we elect - don’t have the courage to do so. We need to be asking our leaders to step up and resolve the issue or elect someone who will. I’m a boomer and SS is part of my retirement. I’ve paid in and am entitled to it. There - I’ve said it. Taking away SS is not going to happen as long as the boomer generation is able to vote.
So what is the alternative. Borrow more, collect more and put it away (remember the lock box promised by Bush and Gore??), or cut benefits. If none of those are done, then the only option left is to cut expenses in other areas drastically. There is only one area that would have an impact - the military budget. As unpalatable as that choice is, it may be the only alternatives if we do not address the issue. The military was cut to the bone during the depression and it can be done again - but at the grievous cost of readiness. Doing nothing sets us on a path that leads to limited choice and I for one would not want to head down that path.
Some will argue that more supply side tax cuts will solve the problem. I am willing to listen to that argument, but remain highly skeptical based on experience under Reagan and Bush II. All reputable economists will agree that their massive tax cuts stimulated the economy, but never generated enough revenue to cover their costs - and resulted in massive federal borrowing that debased the dollar. Is that what we really want ?
By The Peoples for a Nuked Amerika' Century~!
March 27, 2008 11:25 AM | Link to this
-=-
GaLiberal (11:05) makes a very good point.
Privatization of your retirement is very risky for your future. If the stocks tank in the future (as the recent housing market) then there goes your protection of your future years. Furthermore Social Security was to secure your later years even in the worst case scenerios such as a drastic event like the Stock Market crash. So basically it is a backup defense against losing absolutly everything. Including (God forbid) you become disabled.
Instead of stupidly thinking of Social Security as some form of welfare, you better start thinking of it as really good Insurance plan. Personally I think the premiums are much better in the SS plan than AFLAC and the gang.
Cheers’ Thomas
By Jim Patrick
March 27, 2008 11:34 AM | Link to this
What most people are missing is that you cannot trust government. However, we cede more and more control of our lives over to this institution every year. Our founding fathers understood the perils of government and that is why most of the government programs and powers that around today were not included in the founding papers that created our country.
By Dr Coles
March 27, 2008 11:43 AM | Link to this
The full retirement age is based on maintaining a 50% death rate, so the government does not have to pay any paid for benefits but to half of the investors. The government gets 15% of all wages (up to $102,000) in America and is so incompetent as an investment manager, if we could we would have fired them, they do not invest our money and grow the funds. The problem with Social Security is totally caused by government. No, matter your political party affiliation, and setting aside your thoughts on issues. We all need to remember what it is to be an American Citizen. We need to make sure our elected representatives obey their Oath of Office and keep their Oath of Allegiance. See http://tinyurl.com/2znnvl Know whom you are voting for. http://www.fms.treas.gov/fr/index.html
By AH
March 27, 2008 11:55 AM | Link to this
I never said it was welfare, and yes I have a problem with that one too and I have spoken with Rep. Lewis several times about it.
I say that Social Sec. is a scam. You don’t pay into and get out exactly what you put in. In almost all cases you will get out more, much more than you pay into it. It was created when most people didn’t live past 70 so to give them money for just 7-10 years wasn’t that bad, plus there weren’t that many people that actually lived to collect SS. You had a ratio around 160-1, 160 people supporting 1 person. Now were at something like 3-1. You can’t keep this up.
Also they don’t hold that money they never had to. It was just collected and spent. The dollar that they take from you today doesn’t get put in a savings account and come back to you later. It might not even go towards a SS check. They can spend it on anything they want and it’s not stealing that’s just how the system was set up from the very beginning.
Social Security is a bad policy pure and simple. If you want to provide for people who can’t that’s one thing but what is happening here is retarded.
And also while I’m a huge supporter of the Fair Tax I still want to eliminate wasteful spending and stupid programs.
By RightyTighty
March 27, 2008 11:56 AM | Link to this
As a conservative, I have been pinching my pennies for the last 25 years and look forward to the 2019 liberal awaking of social welfare.
Or should I say REALITY CHECK from poorsville??
By Tamika
March 27, 2008 12:07 PM | Link to this
What a Mess The republicans have goten this country in. End Social Securrity NOW and Make people responsible for their own well being. Sorry Babby BOOMERS but you get NOTHING!!!
You invested in a bad Gvt program so you should not get anything Back!
Hillary Clinton Is the Only one that can save our great country
HILLARY 2008!!!
By RealityKing
March 27, 2008 12:07 PM | Link to this
History shows that tax rates have remained about 18% of the GDP. The includes all foriegn, domestic and miliary spending.
By 2040, even with currently ignored reforms in place, just Social Security, Medicare and Medicaid with consume that entire budget. Getting the idea now??
Yes, there is definitely a social welfare nuclear bomb about to go off. And there is nothing we can do about it but cut spending, cut spending, cut spending. Something I have yet to hear come from a democratic presidential wannabe.
By The truth
March 27, 2008 12:17 PM | Link to this
Social Security was how government welfare was born. It is not the job of the government to take care of us. This is another example of how government screws it’s citizens. Hillary and Obama want socialist health care. I really hope people wake up and realize that government does not work well with other peoples money. Bush tried to privatize social security 4 years ago and democrats cried and moaned about it. Now we are about to see the great liberal government fantasy world realized. People should be accountable for their own earnings and save money.
By John
March 27, 2008 12:22 PM | Link to this
The worst thing about social security is that it is terrible for the people who need it most because it is not inheritable. A black male’s lifespan is significantly shorter than that of a white female, yet they pay in the same money over their lives. The black male draws significantly less money from SS, and his family gets nothing of the rest. The white woman will usually draw SS for many years and will probably get a net gain from the system.
By BOOMER BABY
March 27, 2008 12:24 PM | Link to this
As a Boomer hoping to be able to semi-retire in the next 8 years, the whole situation is both frightening and enfuriating.
Just like millions of other middle-income Boomers, I have paid in a huge amount of money to SS. I have watched as the age of qualification is raised and the benefits reduced. I have 40l’s, I have invested, but I also counted on my SS to supplement my income. I do not have a pension nor will I have company provided healthcare when I retire, nor will my spouse. The cost of healthcare is astronomical for seniors.
My contributions to SS went to support my parents and my grandparents and I’m okay with that. I contributed mightily to the “Trust Fund” that has been pilfered by both administrations!
I would agree the system needs to be overhauled, but the Government should not be allowed to abandon an entire generation of people who paid into this system and have been systimatically robbed.
Too much money from SS is being used to provide for illegal aliens and others in this country who are on the government hand out program. We have far too many people milking the system who’ve never contributed the first dime. This is wrong!!
This is another fine example of why you don’t want the government running your healthcare. Can you imagine how well they will manage to screw that up?
By Scooter
March 27, 2008 12:34 PM | Link to this
Well golly Jay, are you just coming to the realization that politicians are crooked and can only be trusted to increase their powers. No, that can’t be, because you consistently advocate to give politicians more power through electoral dependency.
Our entitlement programs are breaking us and we continue to beg for more of them - Medicare Part D, Universal Healthcare, etc… Of course all of this takes place as companies leave the US, causing democrats to scream of outsourcing in one breath and in the next demonize and over tax the remaining corporations. Golly, I wonder why they are leaving? Excessive regulations, unions and corporate taxation (also a scam) are all democrat favs, so maybe the dems create some problems too.
With that said, it is interesting you could only bring yourself to mention republicrats in your epiphany?
Bring tax transparency back with the FairTax. That is if your politics can survive without the envy of class warfare.
By atlmom
March 27, 2008 12:34 PM | Link to this
The reality is that, yes, we SHOULD be ‘taking care’ of those that can’t take care of themselves (not those who won’t).
If Soc Sec were implemented as intended, we would be fine.
When enacted, life expectancy was about 65. Look it up.
So it was a safety net (it was supposed to be a SUPPLEMENT to other money you had) - ie, it was supposed to help you out when you couldn’t work as much as you did when you were younger. Not for people to stop working when they are perfectly capable of doing so.
The reality is the age at which one can collect benefit should be closer to 75 or 80. You want to retire before then? More power to you - YOU have to pay for it. People can work less, people should save their own darn money too!
By fred
March 27, 2008 12:36 PM | Link to this
If S.S. is not good enough for Congress, why should it be good enough for us? Don’t put all of your eggs in the S.S. basket. Max out that 401k and start dumping money into other long term investment vehicles while your young. Take your retirement into your own hands. If S.S. is there when you retire, use it for beer money.
By Edward
March 27, 2008 12:39 PM | Link to this
Why is it all these “conservatives” are so against “socialism” and always advocating “the free market”, yet it seems that only goes for when that market is working the way they want. When their mismanagement, greed, lying, and cheating come home to roost, they’re sure quick to want that “socialism” (the government) to come bail them out (see BearStearns, et al).
As it is, Social Security would be sound and solid for the foreseeable future if CONSERVATIVES would keep their hands out of the till to pay for their boondoggles.
By Julie
March 27, 2008 12:55 PM | Link to this
Well said, Zeke, Chris and Madmommy!
By Analchord
March 27, 2008 12:58 PM | Link to this
Taxes stunt growth. Entitlements stunt productivity. With Social Security, our economy gets a double-wallop of Maoism and I dont like it.
I said I dont like it.
By therealist
March 27, 2008 1:26 PM | Link to this
The only thing I have ever heard Jay Bookman promote was increased government spending. Why now the complaints J? Getting close to retirement maybe??
By Amy in the ATL
March 27, 2008 1:32 PM | Link to this
Bookman is right….the SS system as we currently know it IS a scam. And it’s going to be a costly scam in the future, especially for those of us in Gen X and Gen Y, who will be paying through our noses to support sending SS checks to Baby Boomers who may or may not be more wealthy than we are. To add insult to injury, much of this transfer of wealth will occur while the younger generations are struggling to raise their own kids.
Regardless of whether you consider yourself a Democrat or Republican, this is a big issue that MUST be addressed, and soon. Personally, I think Social Security will have to be phased out or significantly restructured. And in the meantime, we need someone in the White House who is committed to a BALANCED BUDGET. Bush has done immeasurable damage to U.S. economy by cutting taxes while increasing spending, discretionary and otherwise. No true reform of Social Security will be possible until our tax revenues exceed our expenditures, thereby allowing a gradual reduction in national debt.
By Dave
March 27, 2008 1:35 PM | Link to this
Jay,
You’re a “one trick pony” - it’s all Bush’s fault. You need to come up with something new fast….
By Dave
March 27, 2008 1:36 PM | Link to this
Jay,
You’re a “one trick pony” - it’s all Bush’s fault. You need to come up with something new fast….
By John
March 27, 2008 1:40 PM | Link to this
We don’t have to move completely to FairTax (replace income tax with a national sales tax), but why not fund Social Security, Medicaid, and Medicare with FairTax? When those costs begin going up, the sales tax will go up, and people will spend less and save more. Then people will be less reliant on Social Security, etc.
If they decide not to spend less and continue to waste their money - well by all means, they’re paying for their own Social Security anyway.
By bill
March 27, 2008 1:56 PM | Link to this
Social Sucurty is a scam, but not by just the goverment but by the people as well. if you took all the people on disability who are not really disabled and cut them out you would save billions.I am not saying the people that really need it but the ones that draw disability that are able to work and believe me there are a lot of those out there.They are riding a free horse.
By AH
March 27, 2008 2:05 PM | Link to this
You need to read more about the Fairtax, if you keep an income tax and the Fairtax you are going to end up right back in the situation we are in now with politicians stealing your money left right and center.
We need the Fairtax but not if it is compromised.
By Steve
March 27, 2008 2:07 PM | Link to this
The only way Warren Buffet is paying a higher rate on his income than his secretary is to count both the employer and employee share of FICA and medicare taxes as being paid by the secretary — and to also pretend that Buffet doesn’t really pay any of the corporate taxes charged to the the companies Buffett owns stock in.
Now, suppose we eliminate the Social Security and Medicare programs and the payroll taxes that support them. That would certainly greatly decrease the effective tax rate Buffett’s secretary is paying. But would you then argue that this was a good deal for her Jay?
You may not have realized it, but implicit in your argument is that Social Security and Medicare are lousy deals for for regular working people such as Buffett’s secretary. Are you intellectually honest enough to acknowledge as much?
By Blind Homer
March 27, 2008 2:25 PM | Link to this
The easiest and most painless fix is to stop the stupid war, put the same amount of money into the SS trust fund that we’ve spent on the war the last five years (including the deficit spending) and SS will be solvent for the rest of the century. Somewhere between $2 and 3 trillion will just about do it.
By AH
March 27, 2008 2:51 PM | Link to this
maybe someone needs to point out to the blind that last year alone we spent almost 1 trillion on SS and medicare. The war in 5 years has cost us only 1 trillion.
By Disgusted
March 27, 2008 3:03 PM | Link to this
Some of you Social Security abolitionists aren’t old enough to know how desperate a lot of old people were at the time the system began. I happen to be old enough to remember. Laborers making a quarter or fifty cents an hour were unable to make enough money to pay for retirement. If they were lucky, they moved in with their children once they were unable to perform work duties. I remember some of these people, including one set of grandparents, who wandered from one married child’s house to another’s during the last years of their lives. I also recall one 87-year-old man, cancer-ridden, who stoked a coal furnace and swept floors at the local school until he died, because he had no relatives.
Now I’m reading the screeds of the selfish people, all of whom have relied on tax-supported programs at some point in their lives. Because Social Security results in hated taxes, they would like to see the entire program dismantled. And they are saying, in effect, to hell with all the people who haven’t saved enough to fund their own retirements—never mind that many people don’t earn enough money to save such a sum.
While you are crying out for the removal of all social safety nets, pray that you don’t have to make use of one. You’re only one accident or illness away.
By cliff zeider
March 27, 2008 3:13 PM | Link to this
Hey, Social Security was a Scam from day one, Roosevelt knew the average person didn’t live to be 65, thus a hidden tax. Now we live longer and got them them by the a*.
By rd
March 27, 2008 3:27 PM | Link to this
You people are idiots! This is a failure of both Republicans and Democrats, a failure foisted on them by the largest voting segment of our population: the Baby Boomers. You want to know who to fault? Fault your mother, father, grandmother, grandfather. SS is/was a valuable safety net. That safety net has been pillaged for pork spending on both sides of the aisle. The current national debt is $30,000 for every man, woman and child in this country, and yet half the country is lining up to vote for Barak or Hillary and an even bigger health care debacle. We cannot afford this war. We cannot afford pork projects. We cannot afford military expansion. We cannot afford immigrants. We cannot afford government regulation and taxes that put the TRUE taxation of most Americans at about 45% of income. The only way to get through this is that everyone has to feel the pain. Retirees MUST be willing to take less. Workers MUST be willing to pay more. The Federal government MUST balance the budget, keep us out of wars, eject illegal immigrants, get rid of all earmarks, cut programs. The problem is that nobody on any side is willing to give an inch.
By AH
March 27, 2008 3:47 PM | Link to this
CORRECTION RD - most peoples tax burden is 55%. You might be forgetting some of those pesky hidden taxes like unemployment taxes. And then if you were to include sales taxes that would bring you up to 63% in Atlanta.
By hegelian
March 27, 2008 3:58 PM | Link to this
SS is a ponzi scheme, period. You need new money to pay for the old money. We aborted about 40 Million new money contributors. End of story, ponzi scheme broken.
By BOOMER BABY
March 27, 2008 4:07 PM | Link to this
It’s getting time for a tea party people. All this taxation without representation and no one truly knows where all of our money is going. Like another poster said, millions are wasted on pork projects, government agencies that ceased serving a purpose decades ago, paying for foreign students educational grants, on and on.
If we stopped wasting money on wars we can’t win and quit trying to bribe other countries into compliance with UN sanctions, we would have enough money to fund SS, deal with the drug money funding terrorist by fighting it before it crosses our borders and oh by the way protect our borders. We could actually pay our soldiers to work on our own soil.
All of us have to manage our budgets, our government should be held to this responsibility as well. I’d like to get a full accounting of where every penny they spend actually goes. How can you be asked to contribute more without knowing how your money is being spent? Most of these fools spending our money, don’t even pay into SS!!
By Yolanda
March 27, 2008 4:13 PM | Link to this
Why should any one of us be upset — isn’t this the American way? Exploit your people, and then later find ways to blame them for why things are the way they are. And when that doesn’t work, blame the Republicans or the Democrats or the Independents or the little lady crossing the street.
By Danny McIntosh
March 27, 2008 4:27 PM | Link to this
Warren Buffett pays 18% not because he has an income but because he has no income. He pays “Capital Gains Tax”. He isn’t a salaried person, unlike his staff, he is an investor. Is that so difficult to understand Mr Bookman? For all of Buffett’s whining about the tax code…there is nothing, absolutley nothing, that prevents him from writing the Treasury a check for whatever amount he “feels” he should pay. That is what would be called “putting your money where your mouth is”. Taxes aren’t too low, they are too damned high.
By GA_Tiger Fan
March 27, 2008 4:36 PM | Link to this
I crack up when I hear liberal idiots like J.Bookman use the democratic lingo “President Bush’s tax cuts for the affluent”. How hard is for someone to understand that by it’s very nature a tax cut only benefits people that work hard and PAY TAXES!!!
As for SS, I would opt out of benefits in a heartbeat if I could take my employers 7.5% and place in my own account.
By Dusty
March 27, 2008 4:55 PM | Link to this
ID Thief @ 8:19 Not Dusty.
I have never contributed to this blog and never will.
By Jeff
March 27, 2008 4:57 PM | Link to this
The whole system should be scrapped. Or keep the dirty Congress from spending all that money on pork. Sure, the wealthy should pay the same percentage in taxes as the rest of us, even if the dollar sum is tremendous. Why not fund social security entirely through a 15% tax on money transfers out of the country? That way illegal aliens can begin to contribute to the welfare of the country they are taking from but not giving to in return. Jay seems to want to blame Reagan and Bush for the SS mess. Well, equal blame goes to both parties for irresponsible spending. Cut all government programs by 20% next year and strive to pay off the debt not through a balanced budget, but one in the black.
By Louis
March 27, 2008 5:01 PM | Link to this
Hey Jay,
I earn $160,000 a year (oh no!, an EVIL rich guy) and most weeks I work an average of 65-70 hours a week. Does that qualify me to part of your “working class”.
By Scooter
March 27, 2008 5:06 PM | Link to this
Do people ever learn? To read all of these post about not being able to afford the war only reminds me of democrat cries of the late eighties. You know when Reagan was in a defense spending competition with the U.S.S.R., in which; Soviet servitude to the idealistic goal of societal utopia could not compete with American Liberty and therefore the U.S.S.R. financially collapsed. Well, as democrats did little to nothing to imped the U.S.S.R.’s violent expansion around the globe, a conservative came into office and committed to addressing the problem. Even back then, democrats were foreign policy can kickers who screamed that Reagan’s defecits were going to be paid for by our grandchildren - just like today’s MoveOn.org inspired arguments. Now, we forget about those past screams, like we forget about Saddam’s deceptions and UN corruption, in order to repeat the same financial argument.
Facts are, if Saddam was contained he would not have corrupted the Oil For Food Program. And it was likely the younger MoveOn.org crowd that screamed of Reagan’s defecits hurting our grand children, while at the same time bragging about Clinton “balancing” the budget some ten years later. Does anyone see the disconnect from reality?
By The good side
March 27, 2008 5:13 PM | Link to this
People my People!
Will will finance this war and possibly many others because of our so-called super power status, which is a cover-up for protect all our businesses overseas. The government is runned by the corporations. All tax paying people will continue to pay for their greed and mistakes!
We are all crazy to continue paying old boy network games. Paying outrageous salaries to CEO’s who make bad decisions and run major corporations in the ground.
Some of you who have done well do not forget to count your blessing economic downturn can affect you too!
And you may not have a friend or relative to bail you out!
By Antichrist
March 27, 2008 5:22 PM | Link to this
Thank god for that, Dusty.
By GaLiberal
March 27, 2008 7:14 PM | Link to this
Fix It @ 9:09 AM said I[n] fairness to Bush, he did make an attempt, but the Democrats insist the program is in good shape.
Not even close. Bush wanted to ‘fix’ SS by allowing people to put money in the stock market. The Democrats opposed it as too risky. And they were right. Public opinion was strongly against this foolish and hamfisted approach. Just look at the economic mess Bush has put the country in right now. People don’t want the play Russian Roulette with their retirement. The Rethuglicons don’t understand this concept. They and the uberrich they represent don’t worry have about their retirement.
When you vote Rethuglicon, you vote against your own best interests. And Fix It is living proof.
By GaLiberal
March 27, 2008 7:43 PM | Link to this
By MiltonMan @ 8:53 AM said: Yet another “great” Democrat welfare plan that is going down the toilet. Thanks to you Republicans & Demorats alike who could not even pass a simple privatization.
Another entitlement elitist Rethuglicon bootlicker that just doesn’t get it. First off, SS is not ‘welfare.’ The purpose of SS is to prevent the elderly from living in poverty. That means low risk investment of the contributions. Allowing investing in something as risky as the stock market would not be prudent for the government. You personally may be one of the uberrich and not have to worry about retirement, but I’d bet 97% of Americans do.
Secondly, SS is one of the most successful programs ever. The only reason is it in trouble is because the anti-tax talking heads saw the trust fund as a way to increase spending on things like defense and tax cuts for the rich without raising taxes.
When you vote Rethuglicon, you vote against your own best interests. And MiltonMan is living proof.
By Ben Holt
March 27, 2008 7:49 PM | Link to this
In my opinion, the scam was Washington politicians making the Social Security Trust Fund a large fund available to be used for general government spending. Ben
By getalife
March 27, 2008 7:57 PM | Link to this
A report came out saying the government needed to pay back the borrowed money from these accounts.
These greedy, corrupt, politicians can’t keep their greedy, filthy hands off this money and must be held accountable to make them pay it back.
Their goal is to eliminate these programs because they are scum.
By roja
March 27, 2008 9:42 PM | Link to this
According to the Social Security Administration, me and my employers over the years paid in approximately $165,000 into “my” Social Security Account. As luck would have it, I contributed within $5000 of that SAME amount into my 401k during my working years. My Social Security is worth approximately $1450 a month or $17,400 a year.
My Dad who never earned over minimum wage in his entire lifetime draws almost the SAME in SS Benefits that I do. In fact, he recently told me that he actually got a small RAISE when he retired getting more a month in SS Benefits than his take home pay ever was during the 50 years he worked.
Oh yea, lest I forget, my 401k which was funded in the same amount as my Social Security is now worth just a few bucks short of $1 million and is providing me with a fixed income of over $63000 a year for the rest of my life.
So tell me why ANYONE would NOT support putting their money and matching employer funds that currently go into FDRs rat hole called Social Security in to private accounts!!
By Gordon
March 27, 2008 10:10 PM | Link to this
GaLiberal, you are a blithering idiot. Go back and read the column. How could you call SS “one of the most successful programs ever?” It is a Ponzi scheme. It is unsustainable. Only someone in love with government could think it was a good thing. There has NEVER been a 20 year period where the stock market didn’t go up. Do you have any idea how much more money anyone could have if they were forced to leave it in the stock market like they are forced to with S.S.? The bad news is that Medicare is even worse shape. And this is the group that you liberals want to hand health care over to? Wake up!
By OedipusTax
March 27, 2008 10:24 PM | Link to this
Nothing, nothing, has gone up as much as Social Security taxes since 1950. If gasoline prices went up as much as Social Security taxes have since 1950, gasoline would cost $45 a gallon. If Social Security was run by a private corporation, the officers of the company would be arrested for fraud. This is one big ponzi scheme. Incidentally, there never has been a Social Security fund. We simply draw the money out of current taxes. Mr. Bookman perpetuates the fraud through his socialist class envy rhetoric, and accomplishes nothing to help or clarify the inevitable bankruptcy of this ridiculous ponzi scheme.
By Eric
March 27, 2008 10:24 PM | Link to this
Social Security is a ponzi scheme. The rate of return on investment is shameful. Idiot Bookman’s answer is raise taxes on the “rich”. Shocking. How about raising the retirement age to something resemblin