Today's Comedic Reading
Social Security is just fine and dandy!
Brought to you by CNN.
- "QUESTION 1: Can I count on Social Security to be there?
- You can. Despite what you may hear about the system going broke, the funds from workers' payroll taxes will cover all retirees' payments until 2016 even if no changes are made to the current program."
Yes, despite what you may hear about the system going broke, they system actually IS broke. This assumption ignores the simple fact retirees' payments are going to be made with funds that haven't been collected yet. Sharply declining federal receipts are making this assumption look even less certain.
- "After that the Social Security Administration can cover full benefits until 2037 by cashing in its Treasury bonds from the Social Security trust fund."
This is assuming the bonds retain their value. Interest rate fluctuations, ballooning federal debt, and a significant percentage of debt held by foreign creditors mean that relying on T-bonds for safety is dangerous. Throwing out the date of 2037 is a total guess. The incestuous relationship between Social Security and T-Bonds should cause anyone to question the financial validity of such a scheme.
- "And when the bonds run out, income from payroll taxes would be enough to cover about 75% of payments for decades."
So the "you can" answer to the question of social security seems to hit its first caveat. Taking the argument at face value so far, the original answer to Question #1 becomes "yes, about 75% of it might be there...at some point".
- "That said, the government is looking at ways to shore up the system. President Obama has talked about imposing Social Security payroll taxes on income over $200,000 (currently, earnings over $106,800 are exempt). Other possible fixes: upping payroll taxes, raising the retirement age, and scaling back payments in some way."
Raising taxes, moving the goalposts, and scaling back payments. That "you can" answer should have been given an asterisk or three.
- "People 55 and over are likely to see no change or just a marginal change in benefits,"
Considering our illustrious government is already talking about removing the inflation adjustment next year and many economists predict inflation may soar over the next few years, I'd say this little snippet needs more explanation of what they mean by "marginal change".
