Friday, November 27, 2009

Fake crisis: Social Security

How can this be a crisis:

27 years from now, if nothing is done, and the economic assumptions don't change, the Social Security System would "only" be able t pay out 75% of promised benefits.

1. This is 2037 we're talking about.
2. Worse case scenario, as stated, people will receive 75% of expected benefits.

If you tell them that starting in say, 2027 or 2022, they'd have 10 - 15 years to get ready for a 25% cut.

But all of this is nonsense anyway.
Once there is an economic recovery then this date will get moved outward again.
Even if there isn't one, there are so many thing that can be done to fix the problem that are relatively painless to the actual recipient.

These include:

using accurate cost of living adjustments (cuts)
subjecting all income to Fica taxes instead of the first $137,000 or so.
raising the retirement age when people are eligible
offering people buyouts

Many of these were mentioned in the above article. The problem is the tone and context of the story. We have enough real problems, let's not invent others.

BTW, we should have personal accounts in social security. Many people would be willing to trade a benefit cut for a guaranteed personal account that can be passed on to love ones.

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