Perspective for the New Year

These points confirm my perspective.  Our government won’t even acknowledge what has already happened.  It doesn’t have a clue of what is coming.  Yet the people of power and influence think all worthwhile efforts must be directed by our government.  How’s that for a losing proposition?  We are truly on our own to develop the means to cope with what is coming.  That wouldn’t be so bad if we didn’t have to worry about the impediments government currently imposes, and the potentially huge damage that it can cause in panic reaction to a crisis it helped create

Calling something the Truth because you and all of your buddies think it is doesn’t make it so.
              Most of my “buddies” don’t believe it. And only time will tell. But I’m surely not counting on it.

OK, I’ll take the premise that SS is funded…I just see the pain of providing said funding will become unbearable over time.  Realistically I don’t see the funding to be present when I’m eligible after about another 20 years of the current mechanism; I’m “a liability” at that point and I anticipate I’m gonna feel pretty unfunded, but I won’t be alone!Wink

 - it’s unfunded because there are far more promises than can be fulfilled even if it wasn’t looted.  It has been a Ponzi scheme as soon as life span increases caused the number of people able to collect benefits to exceed those paying in.analysis?
Still just semantics.  It’s not unfunded by your definition at the present time.  It’s been generating a surplus up till recently.  Sure, the demographic shift would require some adjustments, and I’m not arguing tacking on other entitlements such as SSI was a good idea, but calling it unfunded just comes across as kind of shrill.  
No, it’s neither a question of semantics nor of being shrill, but rather one of simple accounting.
The definition of “funded” is that funds exist in some amount, somewhere.
There are no funds int the SS “trust fund,” something that is extremely well documented in articles here, in the Crash Course,and in numerous other places that are easily found on the web.  
What does exist in the “trust fund” are slips of paper that represent IOU’s from the government to itself for all the past excess funds that were removed from the trust fund and spent.
As I am fond of saying, it is not possible to owe yourself money and claim the debt as an asset, which is exactly what proponents of the “funded SS trust fund” idea are doing.  It is completely and utterly wrong from an accounting standpoint and, more importantly, its is not representative of what we might call truth or reality.
Here’s how the OMB itself describes the situation (pay special attention to the last sentence):

“These (trust fund) balances are available to finance future benefit payments and other trust fund expenditures, but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. The holdings of the trust funds are not assets of the Government as a whole that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury.”
Let's do this as a Q&A: Q:  How many dolalrs are in the SS trust fund? A:  On any given day very close to zero. Money flows in from FICA taxes and money flows out to SS recipients and any remaining excess flows into the general obligation fund where it is spent by the government.   Q: So what is in the trust fund?   A:  Currently there are roughly $2.5 trillion in non-negotiable United States Treasury bonds and U.S. securities backed by "the full faith and credit of the government."    Q:  How will those get paid off? A:  Someday the US Treasury will have to come up with cash to buy those bonds back.  Here you may note that if one branch of the government claims an asset with a value of $2.5 trillion but another has an offsetting liability of $2.5 trillion, that these cancel out and equal zero. From an accounting perspective, the only correct value to assign to the SS Trust Fund would be zero.  Anything different is an accounting fiction. Q:  Can you be a little more clear?  Who exactly will pay those bonds off? A:  The taxpayer.  Either by direct taxation or by inflation if the bonds are monetized by the Fed.  Either way, the taxpayer pays. Q:  What is the total current net present value of the SS Trust fund?   A:  While $2.5 trillion seems like a lot, under current law the payouts (retirement age and benefits, etc) will be a lot higher over time.  Estimates vary but the SS Trust Fund itself estimates that even after including the $2.5 trillion in the calculations, that an additional $5.4 trillion would need to be held by the trust fund, today, in order for it to be solvent over  the long haul (75 years). Q:  Are you saying that the combined shortfall of the SS Trust Fund (all by itself!) that must be paid by taxpayers is a stunning 54% of GDP? A:  Yes.

ChrisI agree with all that you say, however I’d like to add that as somebody else said on this site “If something can’t be paid, it won’t be paid”. Perhaps it will morph into more af a safety net rather than an entitlement. I think that much is made of projections that forecast doom for SS - yes - but I think a more reasonable reality is that the plan can/will be modified to a level that is reasonably sound when the bell finally rings. Changes such as moving the retirement age to later in life, lowering of benefits (especially with those having higher net worth) can make large changes in the longer term. Of course, this kind of scenario will only work if the S (doesn’t) HTF in a major way and we have a slower stair step spiral down. I know that everyone that paid into SS (myself included) thinks we are owed what was promised, however given the reality we are facing, many of our expectations will need to be reduced. The idea that in a few years there will be nothing for anybody is IMHO unrealistic unless we have a major collapse - and while I personally am planning for the collapse scenario, I can also see the possibility of a softer landing provided enough of our leadership  changes course soon.
Similarly, Medicare can survive if more realistic premiums are charged and the bloat/inefficiency  in our present healthcare system is reduced. The majority of Medicare recipients can come up with 2 or 3 times the premium amount they currently pay, and while that would cause an uproar, if it were phased in over several years, I think it would make a tremndous difference. I’m no expert exactly what these changes would do for the system, however, it seems reasonable that a workable plan is available if we have the strength to face reality. if we get our leadership to  realistically deal with our overall healthcare system and we can stop the bickering over death panels, we have a chance