We've made promises we can't keep. From the city of Knoxville's pension plan to Knox County's Uniformed Officers Pension Plan to Social Security, we are awash in an ocean of obligations that will eventually overwhelm us. Taxpayers will drown as the red tide rises.
The trustees of Social Security and Medicare this week released their annual report. The Social Security trust fund will run out of money by 2033. Medicare will drain its reserves by 2024. Federal disability insurance, a part of Social Security, will be bust by the next presidential election in 2016.
"(These) reports confirm what we all know but Washington has been ignoring for years: Congress must act to reform and restore solvency to Social Security and Medicare and put our country on a path to fiscal sanity," said U.S. Sen. Bob Corker, R-Tenn. "Bold entitlement reform combined with long-term deficit reduction and pro-growth tax reform that lowers rates across the board will cause the economy take off. I will continue working with my colleagues in both parties toward that end."
But we've already seen what happens when "bold entitlement reform" is proposed. Rep. Paul Ryan, R-Wisc., recommends giving retirees control of their Medicare by issuing vouchers that would allow recipients to purchase their own medical insurance. This freer-market approach inspired Democrats to release an ad showing a Ryan look-alike pushing an old woman in a wheelchair over a cliff.
When President George W. Bush proposed changes to Social Security in 2005, including allowing younger workers to invest part of their payroll taxes in accounts they would own (not unlike President Franklin D. Roosevelt's original idea of allowing workers to buy an annuity), the senior lobby screamed and the liberal commentariat pushed the polemic that Bush was ending Social Security "as we know it."
It is not just the left resisting reform. Republicans have, for the most part, gone along with putting expedient politics before sane fiscal policy. According to the trustees, "A temporary reduction in the Social Security payroll tax rate reduced payroll tax revenues by $103 billion in 2011 and by a projected $112 billion in 2012." Last year, Social Security took in $49 billion less than it paid out.
Politicians aren't alone in this insanity. Regular folks often aver conservative bona fides to me and, in the next breath, rant against any change to entitlements. Locally, red-blooded Republicans look awfully liberal when they resist change to underfunded and unaffordable pension plans.
To all of this, there is only one answer. As fewer workers contribute less to support the ever-longer retirements of an aging population — whether in Knoxville or the United States or Europe — individuals must do more. Workers must pay more toward their retirements and their health care. Individuals must take the initiative to secure their own fiscal and physical health.
These entitlements, though, have made us expectant of some grand government bargain to save us. We must save ourselves. And stop making promises we can't keep.
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Comments » 135
HAWAII4 writes:
Absolute total RW BS.
dawgboy21 writes:
I think all those politicians should put an end to their own entitlements. they are entitled to do things that ordinary citizens would go to jail for ...just ask Martha Stewart ,Im sure she knows all about this.
jimbob writes:
Greg, I first voted in 1964 when Goldwater was telling us that SS was broken. No one listened and it still is nowhere near being fixed 48 years later.
But I sincerely differ on SS being called an entitlement. All I want from it is to get back the money I paid in, not what the employer paid. Should I live long enough to start drawing money I did not pay in, well maybe that would be an entitlement.
And it is pathetic to think that a 2% reduction in employee SS withholding will stimulate the economy. It simply shorts billions from going into SS.
Kasey writes:
If most people look at the statement they get from social security and see what they have actually paid in would see generally it only equates to about 6-7 years of collecting social security benefits. Having recently received my own statement I did the math. I am an above avergae wage earner, so I think I've paid in an above average amount in the 40+ years I have been working. According to the benefits I would receive, I would deplete what I have actually paid in in about 6 years. What my employers have paid in would give me another 6-7 years. Anything after those 12 years or so I would collect would be an entitlement.
burpee_von_rotweiler_IV writes:
The first thing to do is to cut the off 90+ percent of those receiving SSI "disability." Most of them could perform some kind of work.
There are mainly two types of SSI moochers. One type are the ones that can tell exactly what lumbar disc(s) or precisely which big toe keeps them from working. When one asks the other type why they are drawing a check, all they can reply is "nerves." No kidding.
For every person that SHOULD be on SSI but isn't, there are a thousand times more that are on it but SHOULD NOT.
rainbow6 writes:
The money that has been withheld for social security was supposed to be held and invested by trustees. Over time the Congress has used the money that should have been accumulating for every thing else they wanted to spend money on.
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If you want to see where the money is going just visit your social security office.---
There is no social security trust fund, only a lot of IOUs.
Every few years somone looks at the numbers and sees that the Social Scurity trust fund; as it is now being administered, cannot stand the rate of withdrawal but maybe "X" number of years. How does it get fixed? I do not have a clue but I do know how it was broken and who is responsible.
As much as I hate to say it ,I probably won't be around in 2033 so it won't matter to me but the rest of you people had best get to work with some solutions.
Social Security.... you can call it what ever you like but it is not going to be around for much longer unless people have the guts to reform it.
CTim writes:
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.”
― Alexis de Tocqueville
The only thing de Tocqueville got wrong is that it isn't the "public's money" the democrats use, they're using our children's.
beammeupscotty writes:
Go ahead Greg, shout from the mountain top loudly and proudly- REPUBLICANS UNITE AGAINST SOCIAL SECURITY, END IT NOW! I really hope that is the new GOP talking point and every single GOP candidate from the top to the local, talks of ending social security.
Go Dems!
LinusUpp writes:
Ever heard of interest? If my SS payments had been invested even at a modest interest rate, I'd be flush for life.
RespectYourElders writes:
Okay, start fixing it now. Start with the people who are still working and have time to prepare another avenue for their retirement. Don't take it from the ones who have worked the last 40+ years, and who don't have another retirement plan. It's too late for them to start something else. Don't cut them off at the knees just because they are old and matured in a time where people thought they could believe what the government told them.
nattybumpo writes:
Cogitate on this:
The United States has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.
bbholston#1398245 writes:
Several comments about this. As usual, Greg got his newsletter this week from Corker's office. The Social Security system is basically sound and can be maintained by changes to the retirement age [change to 67 instead of 65] and other tweaks here and there which will keep the system strong for a long time. If the Ryan budget is passed [which it won't] it would cost the average senior 5,000 a year more in health care costs. Even 70% of Teaparty members do not want massive changes to SS and Medicare. The sky is not falling. No need to panic. And stop calling the retirement that we worked 50-60 years in some cases an "entitlement." We paid into the system for a long time and worked our butts off in the process. Now it is time to collect.
Squeezy (Inactive) writes:
Oh, you silly RWNJ's and your "fiscal responsibility" and your "don't destroy our childrens' future" stuff....
Don't you know that we can just print all the money we want, whenever we want? I think it grows on trees.
There's no need to be "sane" or "avoid an entire financial collapse of the United States"....
it is MUCH more important for grinning, lying liberal politicians to buy votes for themselves - by promising entitlement addicts things they can not ever POSSIBLY deliver.
Money is free. Money grows on trees. We have no "existential debt crisis". We can increase taxes to 110% of income on those greedy "rich people", and they will just keep investing & hiring & working just like nothing changed. They LIKE giving all their hard-earned money to the vermin in DC, to be plundered and embezzled by lobbyists.
Our goal is to have 100% of the population dependent on the gov't. No one needs to work, healthcare should be free, cars should be free, houses should be free, and Michelle should decide what food we are allowed to eat.
We'll get those eeeeeeevil "richers" (aka: taxpayers) to foot the bill, while we party in Vegas on Uncle Sam's dime. Maybe get some prostitutes.
It is only "economic justice" - that those willing to work, get over half their income ripped away... food literally taken out of their childrens' mouths.... so that an ever-increasing portion of the Democrat "base" can sit at home smokin' blounts & drinkin' 40's & playing Playstation until their entitlement checks arrive & they can do it all again.
THAT is "economic justice".
Yeah, you RWNJ's and your silly "responsibility" stuff. Obama is NOT fooled by this "debt crisis" lie that every economist & CBO & credit rating agency & investor on Earth is screaming about.
Spend like maniacs, don't worry about tomorrrow, print mo' money as we need it, buy votes as needed, punish the producers, and opulently reward the non-producers.
Yeah. Obama 2012!
nattybumpo writes:
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Ever hear of the "miracle of compounding"?
Man, would I ever love to be allowed to put my Social Security contributions into a nicely diversified 401K.
The stomach turns every time I compare my SS statement with my IRA statements,..........With the full realization that Social Security is a gigantic government sactioned ponzi scheme that you or I would be in Leavenwoth for operating.
JCJ1986 writes:
As a 25 year old recent grad, here's what I'd like to see/do:
1) Opt out of Social Security completely, the 6.2% (4.2% right now) I would invest in my 401k
2)My employer offers life and disability insurance so I don't need the insurance that SS offers
3) I like the Medicare voucher idea. Stop blindly throwing endless amounts of taxpayer money directly to doctors and hospitals. Vouchers provide the incentive for the individial to shop for and negotiate the cheapest prices, take more responsibilty for their own health since they would still be covering a sizeable portion of their insurance. Is it really fair to ask the taxpayers to foot the medical bills for an elderly lifelong smoker? And people would stop getting multiple, unnecessary treatments.
3) End Medicaid, let the states decide if they want to subsidize their own poor even more.
I don't think that's unreasonable.
JCJ1986 writes:
It seems you either have selective memory or are ignoring the facts. The $3.5 trillion Paul Ryan budget was a pathetic. All of the tough talk on overspending and 'fiscal responsibility' and the best he could do was $3.5 trillion when projected revenues are only $2.8 trillion. Looks like the blame lies on both sides.
whizkidtn writes:
Nope, actual truth bud. Let the light in, it can set your mind free!
Excellent article. +1
whizkidtn writes:
Now I want to go throw up!
Caneoverthere writes:
Sad but true.
bbholston#1398245 writes:
Straight from the official manual of the Young Republican's prayer book. Do you want death panels too?
mike123 writes:
On 1): What's the rest of society supposed to do with you if you don't invest it or get a poor return?
It's the same old fallacy that gets repeated over and over: everybody can do better on their own. Like, by some magic, there's going to be more GDP for society to divvy up out there in the future if only everybody controlled all their own money. It's the same kind of fantasy land idea that somehow imagines that bonds (IOUs) in a trust fund means there's no trust fund. I guess it should have gold in it?
GJ is a regular purveyor of these kinds of fairy tales. Note his supposed solution to (presumed) insufficient funds for social security payments is simply "Individuals must take the initiative to secure their own fiscal...health." In other words, put more money into your retirement. Duh?
doglips_mcghee writes:
blah blah blah...i'll believe it when I see it...
SidelineReporter writes:
So you don't believe the CBO under both Republican AND Democrat controlled offices?
If you don't open your eyes, you will never see. I would suggest you review the CBO reviews for SS and Medicare over the last 25 yrs. They are suprisingly honest about this issue. The factors are number of people paying in, number drawing out, average life expectancy past retirement age and inflation. The baby boomers are now drawing out and there are not enough kids to foot the bill.
It's pretty simple math so go look for it - you WILL see what the numbers are and they aren't good.
RockyTopVolFan writes:
Mr. Johnson, I recommend you take back the TARP Trillion$ to make us all more solvent.
Yes a new program is needed, call it the TTRP,
Troubled Taxpayer Relief Program.
Another helpful program, TTRO or Throw The Rascals Out!
EllieMae writes:
Here's a response to that. It's not mine as I really don't know enough to make my own assertion, but I thought it worth repeating:
"BUT, a large chunk of US debt is from the SS trust fund. Most remaining US debt is held by American institutional investors or individuals whereas most debt from the countries mentioned is held by foreign governments. Makes a huge difference in the stability."
dagamble#346080 writes:
If the cap on the earnings that are taxed for Social Security were eliminated (or even raised), this "problem" would go away. Neither party has the nerve to even consider it.
JCJ1986 writes:
First, I'm a registered independent in North Carolina. Proud UT alum, which is why I still follow the paper.
Secondly, being only 25 I've only voted in two elections the first being for Kerry in 2004 and for Obama in 2008.
Thirdly, again all I'm saying is that I'm willing to tell the government "No, thanks, I would not like to participate in these programs." Let me please keep the money in my paycheck that would normally be deducted for these.
Lastly, scroll up several comments where I blast Paul Ryan's pathetic budget.
JCJ1986 writes:
I'm not sure I follow. I simply stated that there should be an option for those like myself who choose to 'opt out.' I'm willing to take my previous contributions as a loss.
I graduated in May of 2011 from UT, proud and fortunate to land a job that pays above the median US salary. I started my contributions into my 401K on day one and haven't missed one yet. I don't plan to call it quits until my last 60s. Plenty of time for me to adjust my investments and allocations according to age, risk tolerance, and market conditions.
I don't need someone taking 6.2% from me to do for me what I'm already doing myself. Why should I be forced to continue to contribute to a system that will be unsustainable decades before I'm ever scheduled to receive a distribution?
Again, I'm offered great life and disability insurance from my employer, I'm single, don't need SSDI.
And I think my Medicare rationale is pretty reasonable.
1voiceofreason writes:
Of course you'll use what you pay in quickly. You're forgeting that the money you put in would be generating interest for 40+ years. Compounding interest is where the growth is. SS is a joke when it comes to return on investment. I look at my SS statement and then at my 401k and other investments and get sick. We are getting ripped off with every mandated payment into this Ponzi scheme.
RandalH writes:
So, you're on record as being for short term political gains over long term fiscal solvency. That's nice and a typical liberal view. But the problem you have is that the future of your philosophy is at stake. Promises made by our federal government as well as many states and the governments of countries around the world will not be met in the future - the math just doesn't work. When that happens, a lot of people will be forced to admit that statism doesn't work and that the nanny state is a sick illusion pushed by people with big hearts but small brains.
1voiceofreason writes:
BS. The Boomers voted for the fools that promised everything under the sun. They sat idly by why the fund was raided. They get to take a haircut too. Riding off into the sunset unscathed while us young folks pick up the check is not an option.
FactoryGuy writes:
You sound like I did at your age. But as investment firms and insurance companies complicate their documents and rules so as to make it more difficult to understand, you will grow older and your ability to understand and make decisions off of that will dim. Your energy and stamina to deal with "Customer Service" as they continue to obfuscate their contract with you will wane, which is just what they plan on to maximize their profits. You will see them deny coverage for things that are plainly in the contract and make you go around and around to get them paid hoping you'll give up and say "well it's only $500 and it's not worth my time to keep this up", and you will capitulate when the collection calls start.
And one other thing, those that shop for medical care based on price do not understand how it works. It is imperative that you build an ongoing relationship with your doctor. As your doctor gets to know you he can better server your needs.
As to investments. Bernie Madoff ring a bell? Bear Sterns? Lehman Brothers? MF Global? A lot of savvy investors lost money, do you think you can't be got? How about when you're 75 and the rules have completely changed since you retired? The difference in your body at 25 and 40 is not near as great as it is from 40 to 55 (and it dramatically changes from 50 to 55) And I don't smoke, drink, eat to excess and I exercise at least 1 hour a day and have for most of my life. I've had employer insurance so I've gotten regular health care. I know many who have lived the same way, but had strokes, blood clots, and other maladies so what happens to them when they reach retirement? Do you really think insurance companies and investment firms will go the extra mile for them?
RespectYourElders writes:
And, do you vote now? Are the people you vote for above making mistakes or poor choices? I don't know what your generation will be called when they get old, but I thought most people's goal was to live as long as they could. You sound like you are in favor of death panels. People get old, they are too feeble to work and support themselves. Your attitude seems to be saying, "too bad, go off and die and get out of my way, as long as I have what I want." That's what's BS.
I have worked probably three times longer than you, and I have been forced to pay into Social Security all that time. That's the way Roosevelt set it up. Now you want to take away what money I have paid in? That is not an option.
Hopefully, one day you will be old. I hope you remember your holier than thou opinion when you can no longer earn a paycheck and no one cares whether you live or die.
BTW, no one "sat idly by" while Reagan was the first president to "borrow" from Social Security, just as you are not sitting "idly by" while Obama does things you might not agree with, but are powerless to change.
It must be overwhelming to feel so superior.
1voiceofreason writes:
I'm not the one taking your money away. Every Congress and President since LBJ has stolen your money. Who is being greedier, the people that spent their "trust fund" and now want others to pay for their irreseponsibility or those of us that want to keep what we have and save for ourselves? You Boomers inherited a great country from your parents and proceeded to bankrupt it. Time to pay the piper.
Secondly, Johnson was the first President to borrow from SS. He did it to pay for Nam. Get your facts straight.
LouisVol writes:
41% of defense spending worldwide is done by the United States... China is second at about 8%. I wonder why defense spending is never mentioned by Republicans as being bloated and out-of-control?
We need to restore financial sanity in the United States for sure... But, it is anathema, to ask 3% of the top taxpayers to pay at the same rate as the rest of the country.
What I hear from Ryan and those of his stripe, we're better off cutting the pay of teachers who make $50,000 by 20% and by canceling promises made to workers who have worked at lower wages for years with the promise of a pension to make retirement possible.
Thanks for letting us know whose side you're on, Greg.
RespectYourElders writes:
I didn't realize you were old enough to correct my history. I didn't realize you were alive when Lyndon Johnson and Ronald Reagan were Presidents, like I was.
From Just the Facts: "Many people make the mistake of thinking that President Lyndon B. Johnson started using Social Security Trust Funds to finance other government programs. In 1969, Johnson started combining the financial data of the Social Security program with the financial data of the federal government for the purpose of reporting the budget. . . .Johnson did not change the actual finances of the federal government or the Social Security program; only the manner in which they were reported.[37]." Like I said before, REAGAN was the first president to authorize borrowing from SS.
I would have thought you were savvy enough to check your facts before you attack someone else, though. I didn't vote for either Bush, don't blame me for bankrupting anything.
Karma is a *****. Remember your attitude now when you're old and unproductive, and some youngster wants you to just get out of the way for them.
1voiceofreason writes:
Im a conservative and Ive said many times on here that defense spending needs to be cut. Pull the troops back from every location that there isnt an active war going on. Fund weaponry R&D but quit buying as many ships, tanks, and planes that will be obsolete by the time we're in an actual war. Couple that with entitlement reform and we're back in business.
1voiceofreason writes:
What do you think was the point of combining the reporting of the two funds?
Could it be that it made Vietnam expenditures easier to hide.....? Hey, we're still showing a surplus even after the war, yeah!.....
Just more fuzzy math designed to fool sheep into thinking that all was well. Face it man, Johnson started it and every President since has continued the practice.
You Boomers just want to shift blame and make it my responsibility to pay for your boneheaded mistakes while you go retire in Florida and "get yours".
798orange writes:
Once again, another whining right-wing diatribe that rambles much and says little, claiming Obama is to blame again while conveniently forgetting the more difficult situation he has had to deal with as compared to his predecessors. If he had done what the GOP advocates and reduced spending when the economy needed stimulating, what would have been the result? More jobs would have been lost, GDP slowed to a crawl, and the economy would have been even worse off.
How has he punished the producers when he has extended the earlier tax cuts? Many companies are reporting record profits and the stock market is back to near-record highs. Considering that many of the states that tend to be red also are among the lowest in various education rankings, you might want to look again at whose political base is what.
JCJ1986 writes:
Why can't defense spending be on the chopping block as well? If you're going to always compare the federal budget to a household budget shouldn't you use the same rationale and review and adjust ALL expenses?
RespectYourElders writes:
I didn't say why Johnson did what he did. You're probably right. But, it did prove that I was right and that it was Reagan who first authorized borrowing from Social Security. I don't want to blame you younguns for anything except for your intolerance of people who have "flushed more water than you have sailed over" to quote an old Navy phrase. I didn't vote for Johnson, I did vote for Reagan, but that was the last republican I voted for, so don't blame mistakes of the government on me. And, for your information, the majority of Boomers are still on the job and paying into the Social Security and Medicare systems, not retired in Florida. You're so naive, it is hard not to feel sorry for you.
1voiceofreason writes:
If I get grouped into a generation that has to pay the bill, you get grouped into the generation that ran up the bill.
And you guys have definetly done a lot of flushing. As in, flushing the future of the country down the drain. The Greatest Generation handed you a rich country at the peak of its power and you have destroyed it. Good job Boomers.
godlesscommie writes:
Ryan's budget would double the deficiet in 4 years. Ryan's budget also calls for raising the debt ceiling at least 4 times a year. Ryan's budget would also increase spending on the military industrial complex by 500 billion more then what the pentagon is asking for. More pie in the sky, destroy the middle class rwnj bs. Depriving millions of Americans of there healthcare and retirement is not going to fix anything, it going to make things worse. I do hope the GOP makes it a central plank in there platform so everybody knows the priority is to destroy the middle class. The real driver of the debt is bush's tax cuts and military spending. For every 1,000,000,000 spent of the military, 11000 jobs are created. Devote that money to education, you create 27000 jobs. It's real simple, empire is destroying our country and rwnj like greggy merely want to destroy more of it until we come to that hard truth. The American people who have earned there retirement by working should not have it ruined by short sighted idiots who care more about empire building then the welfare of its citizens. All the rwnj screeching and wailing is not going to change that.
RespectYourElders writes:
I'm still paying into SS, so you aren't paying a cent for me.
"Good job Boomers." Hysterical. Just wait until your an old codger. The lack of respect shown for other people is so far down the tubes now, it should be intolerable for you who will be old then. I'm glad I won't be around to see it. But, if your mind is still active, you WILL remember this conversation.
nattybumpo writes:
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So much BS,..............So little time!
1voiceofreason writes:
Well, I will be shortly since there are no savings. You already spent it.
Are you denying that the Boomer generation has overseen the decline of America? In fact, the decline has only gotten steeper once Boomers actually took office instead of just voting.....
1voiceofreason writes:
Im sure you must also believe that a buck of foodstamps creates 1.75 in economic activity.....
RespectYourElders writes:
I, personally, have not spent one red cent of your money, so get off that high horse. I really do feel sorry for you now with all that hate inside you. I guess you aren't old enough to have learned that it will just eat you up from the inside. Bless your heart!
1voiceofreason writes:
You havent yet, but you have spent every dime and more of whatever you contributed to SS. When you retire, you'll expect me to pay.
Respect is earned by actions, not by getting old.
pinhook writes:
And American wealth exceeds that of all nations in the world. Adam Smith's Wealth of Nations will help.
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