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Did Social Security Make a Big Mistake?

It is possible the government has "grossly underestimated" its needs "to the tune of $800 billion by 2031," according to analysts.

MSN Money reports that academic analysts say we may be running out of money. The United States Social Security Administration (SSA) has been using "outdated calculations and severely overestimated the money available for retirees," says the report.

The analysis was conducted by Samir Soneji, a demographer and professor at the Dartmouth Institute for Health Policy and Clinical Practice, and Gary King, a professor of government at Harvard, says the MSN report.

The two say the government has "grossly underestimated the money it needs for retiring Americans to the tune of $800 billion by 2031, more than the current annual defense budget."

They say that something must change immediately to save the system.

"And if nothing is done," they said to MSN Money, "the Social Security trust fund will run out two years ahead of current government predictions."

Some items not considered by SSA, according to King and Soneji, include the added longevity to one's life. The two say Americans "are adding years of life that the government hasn’t accounted for."

The duo suggests that major changes may be necessary to alter this problem. Ideas such as "raising the retirement age to as high as 69 or 70, increasing payroll taxes, limiting annual cost-of-living adjustments and reducing benefits" are among those they offer up.

No matter what, the analysts suggest change immediately.

"The longer we ignore the problem," they warn in MSN Money, "the more disruptive any change will need to be to keep Social Security alive."

Julia Zion January 09, 2013 at 05:45 PM
Goldwater, check out Scandanavia. There is a very extensive social net that provides for the basics from birth to death. You never have to worry about being poor or losing your home. You never have to worry about that. Healthcare is provided by the government. There is a mandated amount of paid sick leave for every job. There is a mandated amount of paid parental leave when you have a baby. There are higher school standards, producing a very high level of talent that is prized worldwide, which is why more and more companies want to invest there, despite a 51% tax rate. Swedes see that as just a price of life, providing for the systems and regulations that make the country great. Even with a high tax rate, the GDP is one of the largest in Europe and quality of life and happiness quotients rate as the highest in Europe. http://www.policymic.com/articles/3250/sweden-s-socialist-based-society-can-be-a-model-for-america Through other articles, I have learned that even with these policies, it is a free market. Just take a look at this article. I wish this wasn't the case because socialism worked for them throughout the 20th century. I don't believe increasing GDP is important to a country. Inflation is a horrible side effect of capitalism and a rise in GDP can only keep pace with inflation in that type of society. In a socialist society, things stay the same price because nobody has the need to raise their profit.
John Q. Public January 09, 2013 at 05:53 PM
Pat, another strategy is to tighten eligibility requirements. Perhaps you've read the reports of the many unemployed who qualify for SSI after their unemployment benefits expire? I personally know someone who did this. Also, SSI is supporting a growing legion of substance-abusers, folks whose substance-abuse rendered them unemployable.
Pat January 09, 2013 at 06:10 PM
John Q. No, I did not know that the unemployed were turning to Social Security and I see by a short Google that "The number of Americans receiving Social Security disability benefits has risen to 10.6 million since 2002 -- an increase of 47% according to the WSJ." and that is, indeed, something to consider. However, i cannot find anything - again, a quick Google - to support the substance abuse claims so perhaps you can source that.
Julia Zion January 09, 2013 at 08:00 PM
John Q, I can vouch for that. I do work at the same homeless shelter I stayed at last year. There are a few people whom we know we won't see the first day of the month because they get their SSI or SSD deposits. They either go out and get a hotel room or end up spending it on drugs in most cases. I'm not saying it's the majority, but it happens. I do, though, think these people still deserve the money. It just needs to be spent properly. There are companies that will act as payees. They become the person who receives the money and allocates it to the right places, i.e. rent, bills, etc. That way, the money they receive cannot be used all on drugs and keeps them in a home. I believe in giving people a chance, but I also know that addiction is a disease that needs to be treated as such. Without the money to buy drugs, it can be used to actually support people in ways we can all agree. Pulling the money back is not the right answer. Using it much more efficiently is the right answer.
Anthony Wayne January 10, 2013 at 02:12 PM
Some of the above comments serve to illustrate in no uncertain terms the mess our future generations are sure to be left with. It does not take but one ounce of common sense to realize our country is broke. The past one hundred years of welfare-warfare government, and the sense of entitlement that flawed system promotes, are clearly illustrated above. Statements like "everyone deserves it" or "nobody should be denied anything due to lack of payment" are the antithesis of The American thought process. They show us how much work is ahead to undo the horrible excess of our centrally planned system. The thought that playing around with the details of the tax code or penalizing further the productive members of our society is to buy into the lies spoon fed to us by "our leaders". Only a return to the basic tenants of our Constitution, that is to restrain the power of government, can we find a way out. Nothing short of a total rethink of the role of government can possibly succeed. Years will pass before common sense once again exists in our political action. The young will take up the charge and lead us out of this horrible democracy. They know the promises made by government are lies. They know the system they pay into will never deliver. They know the fault lies with the sleeping previous generations, who have slowly but surely allowed our decent into the madness we now inhabit. Once again, the youth will be our only hope, prepare them well.

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