Crazy Quotes That Will Not End Well
"Once the trust fund is exhausted, some commentators describe Social Security as 'bankrupt', leaving the impression that the program has no money at all. But payroll tax revenues continue rolling in. So the system will still have enough revenue to pay 77 percent of currently legislated benefits after exhaustion of reserves in 2036."
~Alicia H. Munnell
This statement assumes that people will continue to contribute without regard to falling benefits. That is unsound economic thinking. She is saying that people will continue to contribute even though they are going to get back less to nothing.
Her comment is based on the idea that payroll taxes are mandatory. Today business already pays 30% of wages in the form of benefits which are not subject to payroll taxes. As benefits of Social Security fall, you should expect people to reduce support for the system both in terms of work and at the ballot box. The most likely outcome of what she is proposing is that those near-retirement in 2025, will force a major revision to the system.
"For almost three decades, Social Security was the only major government benefit program that generated more money than it cost, thanks to hefty payroll tax revenue that exceeded benefit payments to seniors."
~US Today OpEd
Social Security only makes money when you exclude the actual costs of the system. It makes money only if you assume that the government can and will renege on its promises to future beneficiaries. This ‘off-balance sheet accounting’ is exactly the way Enron kept its books.
"It is estimated that Social Security keeps 13 million elderly Americans out of poverty."
~The Center on Budget and Policy Priorities
This statement stems from the one-sided accounting that is the root of most Social Security myths. The Center counts the people that are lifted out of poverty without counting the people that Social Security puts into poverty. The cost of Social Security to the average American is more than $500,000 in lost savings. Using the assumptions of the Social Security administration, that would generate an annuity more than double of the amount that Social Security provides. It is true that Social Security keeps them out of poverty, what isn’t said is that Social Security is largely what put them in poverty in the first place.
"Social Security remains immensely popular among Americans of every age. This popularity is based in large part on the belief that workers contribute to the program and thereby earn the right to receive benefits."
~Republican Joint Economic Committee
It is simply a lie. The system is unpopular largely because contributions do not earn the right to receive benefits. This isn’t our opinion. It is the opinion of the Supreme Court. Flemming v. Nestor, 363 U.S. 603 (1960)
" (Social Security) pays a very low rate of return, lower even than risk-free Treasury bonds, and yet it's highly efficient, meaning that you can't make one participant better off without making someone else worse off."
The logic used to determine that Social Security is efficient compares the system to unrelated benchmarks. It is something like ‘my dog is fast because he can outrun my pregnant wife. Social Security is comically inefficient. It is the US Post Office of the investment world.
"The only 2 ways to fix the problem are to cut benefits or increase revenues."
~All Of The Experts
As a rule, never listen to experts who lack the creativity to have their own clichés. Visionless.