DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Welfare State: Handouts Make Up One-Third of U.S. Wages

**Quonuttott** · 08-03-2011, 09:51 PM

It's a handout when more is paid out than what was received plus simple interest.

That definition makes sense, although why shouldn't it be compound interest?

SS, as it was established, wasn't a "handout". It was essentially an old school pension plan with a defined benefit at plan maturity. As with other such plans the critical flaw was that invested contributions didn't produce a sufficient return to fund the promised benefit. That flaw was compounded with COLA adjustments implemented in the 70's and then when Congress raided the Trust Fund beginning in '83 the whole system went to hell in a handbasket. Today, instead of being anything resembling a contributory plan, SS is a straight up entitlement and the "contributions" through FICA are little more than another funding source for the General Fund.

SS is very, very broken and needs a complete overhaul if not outright elimination. Government has proved to be unable or unwilling to properly administer the program and they have failed miserably in their fiduciary responsibilities. If they were a private company handling this program there would be people who had traded their pinstripes for prison stripes a thousand times over but that simply isn't going to happen.

There are ways to offer comparable benefits to the general public without direct government control but making such a switch would require either a huge temporary tax increase or elimination of a huge chunk of other government spending. Such a tax increase would be difficult in the extreme since most people are under the impression (justifiably so) that if we agree to a temporary tax increase it will quickly become permanent. The same goes for chopping the government budget by 50% because so many people are now reliant...or at least believe that they are reliant...on the government to provide so many services.

SS will be completely solvent through 2037, which is more than 100 years since it was started, and will be able to pay out funds until 2084. Not many private endeavors do that well do they? Yes, there are problems with SS, but they are surmountable.

7 Ways to Make Social Security Solvent - TheStreet
SEEING A DECLINE: Fears of insolvency have been stoked, rightly or wrongly, by the annual report of the Social Security Board of Trustees. The combined assets in the trust funds of the Social Security Old-Age and Survivors Insurance and Disability Insurance, known as OASDI, will be exhausted in 2037, it estimates. Program costs will exceed tax revenues this year and next. From 2012 to 2014, costs drop back behind revenues, but will permanently exceed tax revenues starting in 2015.

The annual cost of Social Security benefits represented 4.8% of GDP last year and is projected to increase gradually to 6.1% in 2035, then decline to about 5.9% by 2050 and remain at about that level, the report says. Projected OASDI tax income will be sufficient to pay about 75% of scheduled annual benefits in 2037 through 2084 after the combined trust funds are projected to be exhausted. My biggest gripe is that people whine about government entitlements, but then the very same people are the first in line demanding their entitlements. Conservatives whine about the system being a failure, yet they want to do nothing to save it, and they still want their handout that they feel they have coming. They can't have their cake and eat it too. Either they have to be willing to sacrifice some of their entitled benefits, or pay more taxes, or abolish the system and declare all benefits null-and-void, even the ones they think are rightfully 'theirs'.

Right NOW is the time to make minor adjustments. SS insolvency is like a meteorite that's going to hit the earth. Nudge it early and you stave off disaster. Wait until it enters the atmosphere and the world's combined nukes can't stop it.

08-03-2011, 09:51 PM	#9
Quonuttott Join Date Oct 2005 Posts 434 Senior Member	It's a handout when more is paid out than what was received plus simple interest. That definition makes sense, although why shouldn't it be compound interest? SS, as it was established, wasn't a "handout". It was essentially an old school pension plan with a defined benefit at plan maturity. As with other such plans the critical flaw was that invested contributions didn't produce a sufficient return to fund the promised benefit. That flaw was compounded with COLA adjustments implemented in the 70's and then when Congress raided the Trust Fund beginning in '83 the whole system went to hell in a handbasket. Today, instead of being anything resembling a contributory plan, SS is a straight up entitlement and the "contributions" through FICA are little more than another funding source for the General Fund. SS is very, very broken and needs a complete overhaul if not outright elimination. Government has proved to be unable or unwilling to properly administer the program and they have failed miserably in their fiduciary responsibilities. If they were a private company handling this program there would be people who had traded their pinstripes for prison stripes a thousand times over but that simply isn't going to happen. There are ways to offer comparable benefits to the general public without direct government control but making such a switch would require either a huge temporary tax increase or elimination of a huge chunk of other government spending. Such a tax increase would be difficult in the extreme since most people are under the impression (justifiably so) that if we agree to a temporary tax increase it will quickly become permanent. The same goes for chopping the government budget by 50% because so many people are now reliant...or at least believe that they are reliant...on the government to provide so many services. SS will be completely solvent through 2037, which is more than 100 years since it was started, and will be able to pay out funds until 2084. Not many private endeavors do that well do they? Yes, there are problems with SS, but they are surmountable. 7 Ways to Make Social Security Solvent - TheStreet SEEING A DECLINE: Fears of insolvency have been stoked, rightly or wrongly, by the annual report of the Social Security Board of Trustees. The combined assets in the trust funds of the Social Security Old-Age and Survivors Insurance and Disability Insurance, known as OASDI, will be exhausted in 2037, it estimates. Program costs will exceed tax revenues this year and next. From 2012 to 2014, costs drop back behind revenues, but will permanently exceed tax revenues starting in 2015. The annual cost of Social Security benefits represented 4.8% of GDP last year and is projected to increase gradually to 6.1% in 2035, then decline to about 5.9% by 2050 and remain at about that level, the report says. Projected OASDI tax income will be sufficient to pay about 75% of scheduled annual benefits in 2037 through 2084 after the combined trust funds are projected to be exhausted. My biggest gripe is that people whine about government entitlements, but then the very same people are the first in line demanding their entitlements. Conservatives whine about the system being a failure, yet they want to do nothing to save it, and they still want their handout that they feel they have coming. They can't have their cake and eat it too. Either they have to be willing to sacrifice some of their entitled benefits, or pay more taxes, or abolish the system and declare all benefits null-and-void, even the ones they think are rightfully 'theirs'. Right NOW is the time to make minor adjustments. SS insolvency is like a meteorite that's going to hit the earth. Nudge it early and you stave off disaster. Wait until it enters the atmosphere and the world's combined nukes can't stop it.
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