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Social Security, Medicare not the problem

December 2, 2013

I am going to comment on the column in the OBSERVER (Nov. 12) headlined “Congressionally duped Americans” by Walter Williams. Mr....

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Dec-02-13 7:02 AM

Thank You.

Social security is NOT going broke nor does it contribute to the national deficit.

"Despite what you may have seen or heard, the Social Security Trust Fund today has a $2.5 trillion surplus that is projected to grow to more than $4 trillion in 2023. According to the non-partisan Congressional Budget Office, Social Security will be able to pay every nickel owed to every eligible beneficiary until the year 2039" Sen Bernie Sanders (confirmed by the CBO)

SS is an extremely successful program, helping seniors stay out of poverty after working their entire lives. Many of us retired with NO pensions or benefits from our employers. We did save, but realistically how much can you save while raising a family? Beyond that, many of us were robbed in the collapse of 2008.

I have NO problem receiving ss nor does by husband. Both of us worked for decades, putting in money to the we are collecting.

Hands off SS and Medicare..hope Congress hears that...

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Dec-02-13 8:03 AM

I agree... Social Security and Medicare are not the problems... but Welfare isn't as much of a problem as it is a worthwhile program that needs tweaking.... I believe MORE of the problem is tax cuts and loopholes for the wealthy... as well as CORPORATE subsidies for corporations that are PROFITABLE. As long as our government prioritizes funneling hard earned tax monies to the wealthy who DON'T NEED OR DESERVE IT... we need to educate the poor and facilitate their re-entry into work... not OVERPAY the wealthy.

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Dec-02-13 8:06 AM

There is so much waste in government and the people who are wasting it are the ones blaming the elderly. Some how we have decided it is OK to blame them for everything. If you ask most people who work after age 63 why, they will tell you they can't afford health care. Nice of the rich in Washington to keep telling this lie.

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Dec-02-13 8:16 AM

judeye gets it wrong again. when SS started there many workers per retirees. Now there is < 5 per retiree. So judeye, SS is not a right and never has been. You get everything wrong as usual. Say, what about a reply about the quadrillions of btu from green energy. Wait till the boomers all retire, there will be no money or such high taxes, the economy will just die. all thanks to the libs like FDR and LBJ. Big govt at work. Fails everywhere its tried.bug govt is bad, except when it benefits me. Wow, thats selfish eh ? judeye , what would christ say ? leys hear it judeye ! blaming corporations agaim, stupid liberals at work. If the corporations and the rich gave all their money to the govt, it would not be enough. How is it you libs miss that ? but the govt spending trillions,. stealing from the producers is OK? what economics book did you learn from libs ?

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Dec-02-13 8:19 AM

now all the author has to say, the funding problem is linked to global warming! we gotta do something.judeye and the rest of the libs would be ranting we are one save SS and the planet ! . My ww2 relatives collected far more than they ever paid into SS. So i guess from reading the libs like judeye approve of govt sponsored stealing. judeye, in earlier times,say the 20's ,you would be a prime candidate for sterilization, under Buck vs Bell for holding such views contrary to reality. All legal judeye,you would have to support your own sterilization !

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Dec-02-13 8:51 AM

"a poor workman blames his tools" too much government is the tool and we are the poor workmen

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Dec-02-13 9:23 AM

The social security disability fund will go belly up in 2016 effecting about 11 million Americans. Ever since the liberalization of conditions allowing for disability there has been a huge increase in allowable claims. Some of you would be surprised to see and hear what is allowable as disabling! Keep in mind as well that SS reforms being talked about will NOT effect those already in the system nor those over 55 as they approach retirement age. Kicking the can down the road is not a responsible way to do business.

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Dec-02-13 9:40 AM

Imagine you worked for a company since turning 18 and you stayed with that company till you retired at age 65. Every paycheck, you put 5% of your earnings into a 401(k) and your company matched you with 3% of your earnings. Both you and your spouse worked for this company and both put the same percentages into each ones 401(k). Due to a good investments, each of your 401(k)’s are worth 2 million dollars at age 65. You and your spouse each figured on drawing out $4,000 per month upon retirement to live off of. By age 85, that would still leave 1.2 million left in each of your accounts. Any amounts left at time of your death will go to your spouse in a lump sum or if he/she doesn’t survive, your heirs will split the remaining money. One year before you begin to collect YOUR money, the fund holding company decided that the maximum you could withdraw each month is $1,500.


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Dec-02-13 9:42 AM

Once a year they would also determine if the cost of living has increased sufficiently to allow you a very small percentage increase in your monthly check. Their rules also no longer allow you to pass any money to your surviving spouse or heirs in the event of your death; the fund holding company gets to keep the money. Instead of retiring on $8000 per month like you and your spouse planned, now you have to get by on $3,000 per month; $5,000 less. That is YOUR money. You put it into YOUR account and your employer also put money into YOUR account as a benefit for working for them. Now, a fund holding company is controlling YOUR money and will keep ALL of YOUR money upon your death. You have no say in the matter and the law is backing the fund management company.


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Dec-02-13 9:42 AM

At $1,500 per month, it would take 111 years to finally exhaust the 2 million dollars you had accrued over your working life. You’ll never even get close to half of that money back. That my friends are exactly how Social Security works

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Dec-02-13 9:43 AM

ss disability claims are the new cash cow, for lawyers and legal system rip offs, lawyers advertising blitz is as criminal as no-fault divorce was, it been reported that the percentage of bogus claims could be as high as 75%

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Dec-02-13 10:42 AM

I agree with JoeW about SS disability. Maybe disability should be part of Medicaid. What I don't understand is how we can pay $12-15 billion per month to fund wars based on lies and how we can fund billions per year in foreign aid to countries who don't need it or deserve it and how we an fund billions per year for a welfare system that promotes poverty and creates parasites but we can't afford to take care of our senior population with social security and medicare. MAYBE IT'S TIME TO RE-EXAMINE OUR PRIORITIES OR GET RID OF THE CLOWNS THAT CLAIM TO BE REPRESENTING US IN CONGRESS.

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Dec-02-13 11:15 AM

The broad use of the term "welfare" is a very convenient and easy bogeyman, for the narrow-minded like this author, as the cause for all our troubles.

The hard, empirical, quantitative fact(s) -- the relentless obviousness of humble math -- clearly shows that welfare -- ADC, SNAP, WIC, CHIP, Medicaid, etc -- isn't the mathematical problem.

For once, I heartily disagree with Judeye: you are receiving far, far more -- at least 2x to 3x -- than the amount you paid into the SS & MC program. to be fair to everyone, by all rights, you are entitled to receive only what you paid into it and nothing more. (Right now, the FICA $s of 3.5 workers are supporting you, Judeye.)

But you're not. You're receiving three times as much. SS & MC payouts ARE THE PROBLEM.

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Dec-02-13 11:17 AM

Social Security also provides for Medicare, leaving that out of the equation is an immense error in computations for retirement. 401K estimates don't allow for HUGE issues like the last stock market crash. I personally knew retired people that had to go back to work because they lost all or most of their money. The assumed fraud in Disability is not what it seems, it's largely caused by people simply living longer than they used to, long enough to have other health issues. I don't disagree with the concept of disability for younger people coming from Medicaid instead, but remember, NYS dumps have that cost on the counties. We'd be bankrupt in this area, and quickly. MANY people on SSD are only getting $400-$700 a month, NOT $1500. People with lifetime taxpayer provided pensions should stay out of any discussion calling for an end to SS benefits. SS is one of the best programs this country has ever had.

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Dec-02-13 11:19 AM

Stangv8 -- your logic is severely faulty.

Your calculations assume a healthy rate of return on investments. But factoring in: only 13% of any stock or mutual fund beats the S&P 500 -- meaning 87% earn below average returns -- AND all those fees incurred over the years driving down rates of return -- the 401k isn't a retirement panacea for over 85% of the population.

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Dec-02-13 11:38 AM

Dcronly, my estimates only use about a 5% ate of return. Although 5% would be a very good rate today and going back even a dozen years, it would have been a good rate. But, using myself as an example entering the workforce back in 1973; rates of return for investments were over 12% for most of my working career. It was after 9/11 when return rates fell and kept falling. My logic isn’t faulty except that it was calculated at a very conservative rate and the “pot” of money would have been much more than 2 million if I had used the rates from the 70’s though the 90’s.

We don’t have to call it a 401K, we can call it an IRA, Mutual Fund, Money Market, Annuity, or anything you want. The bottom line is: It’s your money and you have absolutely no control over it.

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Dec-02-13 12:46 PM

You have less to worry about with SS than you do the next stock market crash and yes it is coming. We are headed for disaster. Govt cannot continue to just print money and go further in debt.

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Dec-02-13 12:50 PM

I just did some math. Some actual math, with a calculator and actual figures. Assuming I make what I do now, and work til I'm 67.. here's what I've found.

Assuming the SS rate of return of 1.8% (quoted), retiring at 67, 45 years of "putting in"... I'll have put in enough + the interest THEY got on it to draw what they tell me I'll get monthly for 16.5 years. Which would be 83.5 years old.

I will have taken more out of the pot than I put in if I live longer than that. Average life expectancy is around 80.

I don't think the problem is SS income payments. I have to agree with judeye, I don't know why, but the math adds up.

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Dec-02-13 1:01 PM

The government has the biggest, most "unfailable" Ponzi scheme going. As we all know a Ponzi scheme generally collapses when there are no more inputs to pay the previous level's output.

Well, with SS, since you are forced to pay in, there will never be a shortcoming of "investors" so to speak. Year after year, there is always influx of new contributors to offset those that start collecting. The only way the SS Ponzi fails is if the contributing population shrinks. And that shrinkage would have to be very significant and sustained to do serious damage.

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Dec-02-13 1:33 PM

The problem is not social security. The amount of money put into the military, more than the next 25 countries combines, is the problem. If we didn't waste so much we could provide for our citizens like other countries do. Let Europe and Asia provide for their own defense. The cold war ended 25 years ago, we do not need the level of troops there that we have.

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Dec-02-13 1:36 PM

Thoughtful is also correct. How many giant profitable companies pay little if any taxes? Yet they receive more fromour country in the way of roads, water, utilities, an educated workforce, and often government funded research. They should be more than willing to help out their, our, country. But they are not. Instead they pay off congress to keep their taxes low.

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Dec-02-13 1:36 PM

One problem is the “aged dependency ratio.” In 1950, each retiree’s benefit was divided between 16 workers. But baby boomers have not produced enough children to replace themselves, and the number of taxpaying workers has shrunk (and is still shrinking) while we're all living (and collecting) longer.

By 1960 the ratio dropped to 5.1 workers per retiree; in 1970 it was it was 3.7; now it’s 2.9 – and by the time all the boomers retire (2030), it’ll only be 2 workers per retiree. The math doesn’t work anymore.

To keep Social Security solvent and paying 100% of benefits, we need to (a) raise the cap on taxable wages ($113,900 in 2013 and $117,000 in 2014) and (b) raise the payroll tax rate – currently 6.2% for both workers and employers – which hasn’t changed/been raised since 1990.

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Dec-02-13 2:05 PM

DKex.. wrong wrong wrong on the taxes. We do not need to raise payroll tax. We don't need to raise ANY taxes. They will only hurt the "already suffering enough" middle class. Us!

How has the number of taxpaying workers decreased since baby boomer era? There are 330M people now, versus 260M in 1980. Maybe the percentage is decreasing, but the amount isn't. And 2 workers per retiree is still better than a ratio less than 1.

Also, how can you dispute math that shows someone like myself merely takes out what I've put in assuming on average I live to 83. Which, I might not even make it that long. Some do, some don't.

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Dec-02-13 2:27 PM

PR, the number of taxpaying workers is a subset of total population, i.e., those in the “Social Security working population” between 20 and 64 who have the potential to work and support the system by paying payroll taxes.

Those are the figures both federal and private actuaries use, and you can find those numbers and the “aged dependency ratio” at a slew of sources - - including the SSA’s own website (Social Security Bulletin, Vol. 70, No. 3).

I wasn’t disputing your math for your retirement benefit, rather the number of working taxpayers per retiree, which has dramatically shifted in the wrong direction.

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Dec-02-13 2:30 PM

The following excerpt is from the 1998 Senate Budget Committee session. HOLLINGS: Well, the truth is...ah, shoot, well, we all know there's Washington's math problem. Alan Sloan in this past week's Newsweek says he spends 150%. What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.

That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus.

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