Social Security to start cashing Uncle Sam's IOUs

[Xiahou]

Social Security to start cashing Uncle Sam's IOUs
It's official, Social Security is now paying out more than it takes in. Meaning the government has to borrow money from somewhere else to pay back the money that it owes the trust fund. With the possible exceptions of 2014 and 2015, the fund is expected to run deficits... well, forever... until it officially bankrupts in 2037.

Can I opt out of this ponzi scheme please?

[Sasaki Kojiro]

Aren't people going to have less kids over time, and the economy increase? That would seem to make it not quite a ponzi scheme.

[gaelic cowboy]

unfortunately people live longer now which is where the problem comes from things like state pensions etc were never really intended to be paid out as the average life expentacy when they were set was lower than the limit but the doctors caught and then left the line behind

[johnhughthom]

From the article: "Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800."

So are earnings over $106 800 not taxed for Social Security?

[gaelic cowboy]

From the article: "Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800."

So are earnings over $106 800 not taxed for Social Security?

I would imagine it goes to a higher rate at that point

[johnhughthom]

I would imagine it goes to a higher rate at that point

That's what I would have thought, but the article seems to imply (by omission) you don't pay anything on higher earnings.

[Centurion1]

i would be willing to forego it right now. im sure many middle aged americans would too.

you try telling greedy old people you arent giving them money any more.

It has to be scrapped people plan it into their retirement plans FDR never intended it to go so far.

[Louis VI the Fat]

opt out of this ponzi scheme please?

One shall have to increase the taxation level, decrease the payout, or raise retirement age.

The system isn't broken. It's just a confusing pile of accounting tricks. Social security creates the impression of each taxpayer paying towards his own retirement/disability trust fund. Whereas for practical purposes, it more closely resembles an ordinary tax.

The productive generation will always have to pay for the unproductive generation, whether through a trust fund or taxes. The 'ponzi scheme' effect is created by demographic changes. The US faces the same demographic problems as the rest of the industrialised world. We should've done what Norway is doing with its oil revenue: buy up the newly developing countries. Then let this pay for the pensioner explosion.

Too late for that. The babyboomer generation has borrowed, instead of invested. They leave us with a double whammy: their loans, plus the Social Secutiry explosion. Both will have to be paid off at the same time. The whole industrialised world facing this same problem, we can't borrow from one another. We have to borrow even more elsewhere, or accept a steep decline in living standard. Either way: I suggest learning Mandarin.

I would imagine it goes to a higher rate at that point

Don't be silly. Where do you think you are, the Soviet Union? Social Security is a regressive tax system.

[Gregoshi]

So are earnings over $106 800 not taxed for Social Security?

Yes. You pay the SS tax on your earnings up to $106,800. Once you reach that amount they stop collecting on your earnings over that.

[johnhughthom]

I take it if I was to even hint that the threshold could be raised I would be shot down as a left wing commie Euro madman?

[Sasaki Kojiro]

I take it if I was to even hint that the threshold could be raised I would be shot down as a left wing commie Euro madman?

I remember during the campaign there was talk of Obama raising the threshold to 250,000. Or something like that.

And if people don't call Obama a left wing commie why would they call you one? ...

[johnhughthom]

I know a lot of you Americans get very touchy about tax raises.

[HoreTore]

And if people don't call Obama a left wing commie why would they call you one? ...

In what alternate reality was/is Obama not called a left-wing commie babyeating terroristhippie?