Social Fund News

The debate about Social Security’s depleting fund continues to be going on for years. Recently, analysts have begun discussing possible methods to make sure the availability of Social Security for generations to come. The Administration’s 2005 trustees report predicted massive annual deficits starting by 2017. Which means that by 2017, this Administration is going to be putting out more money than it’s collecting through taxes. What’s even more troubling is that there’s no definite strategy to permanently fix this huge problem.

One idea ended up being to increase the payroll taxes by 2% and also over a 75 year period, the deficit problem was likely to be resolved. However, the near future deficits are growing so large this modest tax increase will still leave a large shortfall. Social Security’s impending crisis cannot be resolved with this particular small tax increase.

Also try this, which is based on President Obama, is to raise SS taxes on individuals who earn more than $97,500 each year. Currently, people who earn more than this cap amount of $97,500 don’t pay Social Security. The Congressional Research Service says when all earnings were subject to payroll tax, the Social Security trust fund would remain solvent for the next 75 years. Senator Clinton opposed increasing taxes for people earning more than $97,500 because she stated it hurts the center class. However, both Presidential hopefuls were strongly against the privatization of Social Security since it leaves the system in the whim from the market.

Former-President Bush has been in support of a plan that allows Americans to get some of the existing Social Security taxes in a personal account. This is kind of semi-privatization. Polls show that you will find many supporters backing this plan of action.

Out of all the proposed applying for grants how to face the impending crisis deficit, nobody plan seems to be favored most importantly the rest and also the deficit keeps growing. Hopefully new ideas keep coming forth in order to solve the deficit problem that Social Security will in the end face.

So far, the Administration continues to be using special issue bonds from the trust fund to cover its financial problems. But by 2041, that trust fund will run out. At that time, a 26 % reduction in benefits for retirees has been planned. So, what does all of this add up to? Basically, current retirees have been in the clear. Their full promised benefits is going to be paid for them. The Administration has enough money to cover everyone promised benefits until 2017. This even enables annual cost of living increases.

However, by 2041 the Administration come in trouble. The trust fund will have run out and so the situation for younger workers looks dire. Anyone born after 1974 will reach retirement after the trust fund is completely exhausted. At the moment, it is estimated that these younger workers will have paid fully into in their careers, but will only get 74% of the benefits which have been promised to them.

There is one solution has little to do with politicians and taxes. It calls for starting an individual retirement account. When President Franklin D. Roosevelt originally come up with SSA, it was never supposed to have been the only supply of retirement income for anybody. It was established like a extra money system. Therefore, younger workers need to think ahead and began searching for different ways to ensure a safe retirement for themselves.

The purpose of this article is to get people to just keep close track of what’s going on with Social Security funds that supports our retirees. It’s been stated in the Washington Post by Mark Weisbrot and Dean Baker, within an article entitled “What Crisis?” that Social Security won’t have a hit until the year 2042. However the issues that Social Security appears to be facing could threaten senior’s life style a lot sooner.

The Social Security meltdown might be because soon as 2018, but it is not the issue that the media and government maybe have you believe.

The issue is that every dime of the trillion dollars in Social Security surplus, accumulated through the 1983 payroll tax hike, continues to be “borrowed” and spent by the federal government which some call embezzlement. This inappropriate utilization of Social Security funds, continues to be happening under each side; the Democratic and Republican party, ever since the surpluses started to surface in early 1980s. It is in my opinion one of the greatest and many devastating fraud ever perpetrated from the United states citizens by their government.

The baby boomers have been blamed but are not the cause of the Social Security problem. In fact the baby boomers would wind up paying enough taxes to secure the retirement price of the preceding generation, plus enough additional taxes to prepay the cost of their very own retirement. If we did not have the federal government mishandling the money, there would happen to be more than enough assets in the trust fund to pay full-benefits of retirees until a minimum of the year of 2040.

October 9, 1990 there was an address given by Senator Harry Reid where he referred to any susipicious activity regarding Social Security money as “embezzlement” and “thievery.” The late Senator Heinz, a Republican from Pennsylvania, also placed the term “embezzlement” to explain that which was happening behind the scenes. Senators Heinz, Reid, Hollings, and Moynihan were among those who some considered whistle blowers, but were merely honest members of Congress who tried to stop the looting when it first started under President George H.W. Bush. Senator Moynihan even tried introducing legislation that will have repealed the 1983 payroll tax increase to maintain the surplus out of Bush’s hands.

Towards popular belief, the Social Security trust fund has gone broke, and doesn’t contain any kind of marketable Treasury bonds. This began once the government started issuing another type of IOU to the funds, shortly prior to the surpluses through the 1983 tax increase began to come in. They entitle these IOU’s “special issues,” plus they can only be declared by the government trust funds. These “special issues” have no cash value, they are in no way marketable, and they are not what most would consider real assets.

Senator Hollings the governor of Sc has been recognized to call these special issue IOUs “a 21st century version of Confederate banknotes.”

There have been books for example “The Looting of Social Security,” which has tried to alert the general public to these facts. Conversely, it, “Social Security: The Phony Crisis,” have stood behind the notion the trust fund holds enough real assets to maintain Social Security going indefinitely, even though it holds no real assets. These opposing views about what is going on with Social Security can potentially keep people off-balance until the trouble hits.

The authors of the latter book, Weisbrot and Baker possess a significant public profile, thus, they’ve been quoted often and widely in media. They have previously posted an op-ed article within the Washington Post which is widely read.

That brings me to the next point, “Social Security: The Phony Crisis” and “The Looting of Social Security” cannot both be right. Either they have, or they do not have, real assets within the trust fund. Because the Washington Post has given Weisbrot and Baker the chance to present their view, that is quite contrary of mine, there have been many other authors who attempted to publish opposing views however it ended up being to no avail. This is too important of an issue for the United states citizens to become denied any perspective.

Just from my research, it may be argued that American has been deceived and misled by their government with regard to Social Security. Yet, there has been journalist and economist who have been denied access to some media outlets because the message that they are delivering didn’t fit neatly in to the government program.

Among the best individuals who could successfully argue this topic could be David Walker, the first kind Comptroller General from the Governmental Accountability Office. David Walker spoke on this very issue a few times in the past years. It was in a San Francisco Chronicle story where Carolyn Lochhead, quoted David Walker as saying the next: “The left hand owes the best hand, and that has legal, political and moral significance. However it doesn’t have any economic significance whatsoever. There are no stocks or bonds or real estate in the trust fund. It’s nothing of real value to attract down… The trust fund gives a very-false sense of security about where we’re and just how much time we have.”

It had been just One or two in the past that social security began running in the red for the first time in a quarter century.

The recession has pushed Americans by the hundreds of thousands onto benefit rolls. That, in turn, has sped up the day of reckoning when the baby boom generation burns with the money put aside because of its retirement.

Fixing Social Security inevitably involves raising taxes and cutting future benefits, and that’s the issue. Doing one and never another would fail politically, with no fancy new gimmick can take the place of these hard decisions.

Higher taxes about the young and middle-aged would be a given. Many economists think that diverting resources from those Americans to older citizens on a large-scale would undermine economic growth.

My presentation of this article is to establishing awareness within the public. I recommend that people begin looking into different ways to begin securing their retirement and safe money. A fix is going to have in the future eventually, hopefully, before were on the brink of the crisis.

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