NYT: Social Security is worse than you think

[Winehole23]

Social Security: It’s Worse Than You Think

By GARY KING and SAMIR S. SONEJI

CONGRESS and President Obama have pushed through a relatively modest stopgap measure to avoid the “fiscal cliff,” but over the coming years, the United States will confront another huge cliff: Social Security.




In the first presidential debate, Mr. Obama described Social Security as “structurally sound,” and Mitt Romney said that “neither the president nor I are proposing any changes” to the program. It was a rare issue on which both men agreed — and both were utterly wrong.


For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.


Those facts are widely known. What’s not is that the Social Security Administration underestimates how long Americans will live and how much the trust funds will need to pay out — to the tune of $800 billion by 2031, more than the current annual defense budget — and that the trust funds will run out, if nothing is done, two years earlier than the government has predicted.


We reached these conclusions, and presented them in an article in the journal Demography, after finding that the government’s methods for forecasting Americans’ longevity were outdated and omitted crucial health and demographic factors. Historic declines in smoking and improvements in the prevention and treatment of cardiovascular disease are adding years of life that the government hasn’t accounted for. (While obesity has rapidly increased, it is not likely, at this point, to offset these public health and medical successes.) More retirees will receive benefits for longer than predicted, supported by the payroll taxes of relatively fewer working adults than projected.

http://www.nytimes.com/2013/01/06/op....html?src=recg

[Wild Cobra]

Are you saying this is finally news?

We conservatives have been saying this for several years! However, it is one of those third rail issues. every time someone tries to get a handle on it, they are demonized.

[boutons_deux]

EASILY SOLVED

The cost of closing Social Security’s 75-year shortfall is equal to the revenue lost from the Bush tax cuts for the richest 2% of Americans.

We can close Social Security’s entire funding gap and then some by scrapping the payroll tax cap.

Currently, millionaires and billionaires only make payroll tax contributions on the first $106,800 they make in annual wages.

Most people pay taxes on all of their wages. If the payroll tax cap was scrapped, which would affect just 6% of taxpayers, the modest funding gap could be closed.

http://strengthensocialsecurity.org/social-security-faq

Raise the cap to $500K and

move on the real problems, like setting up public health insurance/Medicare for everyone.

[Wild Cobra]

Shazbot.

It's two different accounts on paper.

It's the "Making Work Pay" and the temporary 6.2% to 4.2% that hurt SS.

[boutons_deux]

raising the SS cap on $500K and to include ALL income fixes the problem.

8M missing jobs due to the Banksters Great Depression is 8M less SS payers.