Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Social Security “Fixes” Will Compound Existing Economic Problems

Economics / US Economy Jan 26, 2010 - 07:16 AM GMT

By: Nilus_Mattive

Economics

Best Financial Markets Analysis ArticleI take retirement matters very seriously, which is why I’m constantly on the alert for any hint of a change coming out of Washington.

And make no mistake: There have been times when I agree with new legislation. For example, I had no problem with the temporary suspension of required minimum distributions last year. I also love this year’s revamped Roth conversion laws.


But when it comes to Washington’s decisions on Social Security and many other important matters, I’m almost always left fuming. The latest news that just crossed my desk is a perfect example …

These Are Possible “Fixes” Being Contemplated by Lawmakers?

Back in June, U.S. Senator Herb Kohl, Chairman of the Senate Special Committee on Aging, convened a hearing to examine ways to shore up Social Security. And he tasked the Government Accountability Office (GAO) with undertaking a study on various issues related to the program, including ways to improve its impact on lower-income recipients.

I hope Senator Kohl’s report tackles the big issues, but I’m not holding my breath.
I hope Senator Kohl’s report tackles the big issues, but I’m not holding my breath.

Kohl’s larger report on the entire system will be released in the near future, and I can’t wait to see it. But for now, U.S. News recently reported on some of the details in the GAO report. As the story explained:

“The GAO report reviewed eight areas where, it said, benefit changes were most commonly proposed. The report looked at how effectively each proposal would help lower-income beneficiaries, whether it would have much of a financial impact on Social Security, and on how difficult it would be to administer.”

So just what were those areas? What are some of the most common ideas our lawmakers are coming up with when it comes to making Social Security better? Here are a few of them:

  1. Guaranteeing a minimum benefit amount for people who have worked lower-wage jobs during their careers. Lowering the number of credits needed to become eligible for the program. Adjusting Social Security calculations to get more money into the hands of low-income single workers. Giving credits to stay-at-home parents so they don’t miss out on benefits.
  2. Increasing survivor benefits so widowed spouses, particularly those who didn’t work, are less affected by spousal deaths.

And the other ideas are much the same — they essentially amount to increasing benefits and coverage, particularly for folks who didn’t pay into the system (in many cases, voluntarily).

All of which leaves me wondering: Am I the only person who finds these ideas completely off the mark?

For starters, now is precisely the wrong time to be trying to find ways for Social Security to pay out MORE. Heck, over the long term, the system is already unable to pay out the money that has been promised to people!

What’s more, the program’s continual expansion over time has been gasoline on what was a well-intentioned, but ill-conceived, fire from day one.

I Sure Hope Washington Starts Talking About The Real Problems with Social Security Soon

Instead of rearranging deck chairs on the Titanic, our elected officials need to start talking about some simple facts:

Fact #1: Social Security’s pay-as-we-go structure, by definition, means that the more we ask it to pay out, and the more people we ask it to cover, the more money we need going INTO the system.

Fact #2: Right now, LESS money is coming in because of the recession.

Fact #3: Beneficiaries are generally living longer these days, which is compounding the overall funding crunch.

Fact #4: And based on demographic trends, there will be fewer and fewer people paying into the system and more and more people receiving money from the system as the baby boomers retire in droves.

All this is why — based on current estimates — Social Security will begin paying out more than it receives just six years from now.

I repeat: In 2016 (and possibly sooner), Social Security will essentially be losing ground every single day. And by 2037, it will only be able to pay out 78% of the benefits promised today.

Yet nobody in Washington wants to admit the fact that this system is unsustainable even as it currently stands, let alone in an expanded form.

I mean, seriously, can anyone on Capitol Hill even balance their own checkbook? And yet these are the people “fixing” Social Security!

Here’s what I expect to happen: They’ll continually follow the same “what us worry?” policies they pursue everywhere else. They’ll ignore budgets altogether and figure out ways to spend more instead. And they’ll keep kicking the can down the line.

How? By reaching deeper into our pockets through additional tax increases. Because mark my words — another Social Security tax hike and a removal of the current contribution cap are coming sooner rather than later.

Plus, they may even reduce benefits for many of the same recipients who spent the last few decades funding the program in the first place. One way to do this? Through additional taxes on benefits being paid to certain recipients.

Like I said, I can’t wait to get the full report from Kohl and company. Hey, maybe I’ll be pleasantly surprised and it will contain some real-world solutions to a growing problem.

Then again, I’m not counting on it. And you shouldn’t be, either.

Because if one thing is absolutely certain, it’s this: When it comes to planning for the future, and ensuring comfort in your golden years, you can’t rely on anyone but yourself.

Best wishes,

Nilus

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules