Social security: Murdered by default
- February 1, 2010
- 3 comments
- Posted in Latest Posts, Retirement
Fixing Social Security for the Boomers and beyond is a simple job. Blueprints abound, as they have for years. An adjustment in the payout formulas for new retirees (including a higher retirement age) and a small payroll tax increase would do the job. Gen X could then count on Social Security when they retire.
So why isn’t that happening? Maybe I’m paranoid, but I’m thinking that the crowd that wants to privatize or even abolish Social Security is one of the obstacles on the track. “No new taxes, ever, for any reason” could murder the program. So could shouting that “changing the formula would be bad for the elderly, and I’ll whip up the elderly if you try” (even though nothing would change for those currently retired or very close to retirement). It seems to me that the shouters want the program to fail.
Social Security should have–and could have–been repaired years ago. The longer we wait, the bigger the adjustment will have to be.
It is unthinkable that Americans should be thrown back entirely on their own resources, as they were before Social Security existed. Even the most ardent savers can’t put aside enough money from modest incomes (or even healthy incomes) to support themselves in retirement for 30 or 40 years. As for privatization, the Panic of 2008 told us all we need to know about switching to personal accounts invested in stocks.
We’re not going to let the elderly beg on street corners. The poverty rate for those 65 and older is currently 10.1 percent. Without Social Security, it would be 46 percent, the AARP reports. We’d be back in the old days when adult children were expected to feed, house and nurse parents who had run out of money. Practically speaking, however, that’s not likely to happen, given the modest earnings of the majority of working people. Besides, not all the elderly have children, let alone children with enough room and income to take them in.
So what’s the answer? Only the answer of years ago–changing the benefit formulas and raising the tax. If working people aren’t willing to pay the price today, they’d better start saving to support their parents as well as themselves. And their taxes would rise in any event, to welfare benefits to the mass of elderly poor.
In short, the choice is paying some taxes to help keep Social Security going or paying more taxes to mitigate old-age desperation, when the program collapsed. Sounds like a no-brainer to me.
Tags: Retirement, social security
Hi Jane,
I’ve wondered for quite some time if part of the solution to the social security shortfall isn’t to eliminate the ceiling on SS taxes that now is at slightly over $100,000.
I don’t know how much SS would bring in by taxing upper income workers at the same rate that minimum wage earners pay, but it surely would help. It’s also a matter of fairness.
Do you have any thoughts on this?
Thanks,
Liz Wheaton
I agree. Both in terms of revenue and tax fairness, the ceiling should be eliminated. But with Tea Parties raging and Republicans saying NO to any tax (especially taxes on the rich), this isn’t likely to happen.
Reagan did his best to destroy social programs during his entire presidency. What we have created is the worst distribution of wealth this country has ever seen. No one seems to understand that the poor do not want to be that way. The current ideology is to throw so many road blocks in their path that we try to inconvenience them or shame them out of poverty. It is never going to happen. The sad state of affairs is that this is now applying to the Middle Class as well. The rich are trying to abolish our social security and medicare, which they consider welfare though, we have paid in to these programs for our entire working careers. Reagan, Bush, and now the Limbaugh’s, and Becks have stirred up so many lies that, even the people these programs help the most, are being sold on the idea that we cannot afford them. People are being sold such a worthless piece of goods these days. I fear what the end result is going to look like.