Re: Social Security--- Newly you are right about the government expanding the scope of the program until it is a far cry from what was initally intended. You are quite correct also about the 1st people to receive benefits virtually paid nothing into the system. The problem about failure to offer an alternative such as privatization to the current system will result in the same thing...someone will not get benefits ( today's youth). The alternatives seem to be whether we keep the current system in which we KNOW will fail as presently constituted or try another system which MAY fail but offers a chance of success. What if we limit the possible investments to CD's, Bonds, TIPS and well diversified mutual funds? The likelihood of such vehicles going to zero are quite low. Even bonds would give a better return than the government is getting on current contributions. Doing nothing to the current system will result in the SURE failure of the Social Security System.
Here are some facts to consider:
Social Security has an unfunded liability of about 4 trillion dollars.
Medicare has an unfunded liability of 19 trillion
In the 1950s there were 16 workers paying into the system for every retiree. In 2015 there will be 3 workers paying into the system for every retiree and by 2030 there will be 2.2 workers for every retiree.
Anyone who turns 65 this year and paid the maximum Social Security Tax (from age 21 to 65 )would have paid about$82,000 into the retirement fund. With an expected remaining life of 17 years and a 2% inflation rate, this retiree will receive $440,000 by age 82. This does not include any medicare disbursements. Payments into the Medicare system is much less...currently 1.45% of payroll vs the 6.2% paid into the retirement fund. Who doesn't know a friend or family member who has had an extended illness prior to their passing away? FWIW both my parents had extended illnesses before they passed. Each most likely ran up bills in the 300-500 k range. I bet almost everyone has had at least one elderly member of their family on medicare in excess of 100k. Average contributions made into medicare are far less than the $82,000 figure paid into the retirement fund yet payments can exceed even the $440,000 liability listed above for retirement. Some hard decisions are going to have to be made. Can we afford to give heroic care in an effort to prolong life another month or 2? The time for unlimited medicare coverage may need to come to an end.
my .02
Rob
AI
