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October 1, 2014

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Social Security works if left alone

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After reading Jo Ann Simmons in Thursday’s Sun, “Kill the cap on Social Security tax,” I only have one thing to say to her: Way to go!

I totally agree with her, but let me go just a little bit further.

When Social Security was created in 1935, all incoming funds were to be placed in Treasury bonds and not to be used for any purpose other than providing benefits for retirees.

What has happened is that Social Security has become the cash cow for the government to use for whatever purpose it deems necessary or for that matter unnecessary.

In addition to increasing the cap on the amount deducted for Social Security, the other logical thing to do is leave Social Security to pay out for Social Security and nothing else.

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  1. The current cap is fine at $13K plus. Raise the contribution percentages by employer/employee.

    On the latter, abusing the fund, it's too late. The damage has been done and it is irreparable. We can only stop it from continuing.

    CarmineD

  2. SB: $113K plus.

    CDF

  3. Ho, ho, ho. Once instituted, the politicos in Washington, DC almost immediately began siphoning the funds from Social Security. After all, Social Security was set up to hardly ever pay benefits since most people died before reaching the age of 65 back then. It was, and remains, a Ponzi scam. BTW, for all you "big" government advocates - notice the passage of the $9 1/2 billion bill to "replenish" the coffers of the Federal Flood Insurance Program? That's exactly how Washington works. It spends the premiums on anything but what they are intended for and begs for money to "replenish" the accounts. Can you imagine private sector insurance companies operating like that? Washington passes laws, rules & regulations but seems to always exempt itself from them. Welcome to the land of the leftists.

  4. Retirement benefits must be earned and roughly proportional to the input. The politicos would have us believe that all "entitlements" are the problem. Not so. Pull MEDICAID out of the equation because NOBODY is entitled to free health care. Each child has a right to his/her parents' contributions to society / economy. Each person has the right to pursue economic success--nothing guaranteed. Demographics have changed and we need to edge up retirement age but not Medicare age--age 62 for "early" and undocumented disability, 50 or so for many disabled by long years in physical careers so seniors NEED coverage. But let's stop the 25% of Medicare wasted on end-of-life care for the comatose. Let's go after BENEFIT fraud, not just provider fraud. Let's look at SSI and SSDI--in recent years we've "covered" everyone born with a birth defect and those, including illegals, who abuse their bodies into organ failure (drug use) and reward them with a regular income forever and ever after. SSI and SSDI may be appropriate in many cases--but it wasn't funded by FICA legislation. Let's look for a funding source--say confiscation of assets when we deport illegals including criminal / violent illegals.

  5. Roslenda....half the country is either uninsured or on Medicare or Medicaid. In addition health costs will soon exceed $10,000.00 a year per person. Pull Medicaid????? Every major hospital will be bust by happy hour. Many are losing money as it is.

    Most take much more out of Medicare than they ever pay in. Pull both and the only hospitals left will be for plastic surgery and there won't be a cancer center left in the entire country.

    We may not be entitled to FREE medical care but the $150 trillion we will pay over the next 40 years will cause rectal bleeding for the entire nation.

    Don't cover those that abuse their bodies? The obesity epidemic is costing this nation far more than substance abuse. If you take health care away from the poor, the fat,smokers and drinkers you will have very few people left and our entire healthcare industry would go bye-bye . It's the above folks that are keeping the healthcare industry and business.

  6. There was a law passed some time ago that requires hospitals to treat people with serious life-threatening acute illness or injury. Some are entitled to free healthcare by law. They were 123 million emergency room visits last year. Millions resulted in no payment whatsoever.

  7. Given that it's true as lvfacts101 (Jerry Fink) states that ". . . Social Security was set up to hardly ever pay benefits since most people died before reaching the age of 65 back then. . . " perhaps the more appropriate goal is to simply reverse that trend. Overall life expectancy in 1900/1902 was 51.08 years for white females and 35.04 years for other females. By 2004 that had risen to 80.8 years and 76.5 years, respectively. Rates for non-white females, white males, and other males changed about the same amount, but have lagged rates for white females. What do we need to do? Move back to the 1900 level for female deaths associated with child-bearing; move back to the 1900 level for male deaths associated with employment; and move back to the 1900 level for childhood deaths from disease. (See, for example, http://www.infoplease.com/ipa/A0005140.h...)

    Of course a key datum is not just the number of people living to 60 or 65, but the length of time people live beyond 60 or 65. (Die before you reach 65 and SS is the clear winner.) While that has shown an increase between 1900/1902 and 2004, it's not as great. For example, a white female aged 60 had a life expectancy of 15.2 years in 1900/1092 and 24.1 in 2004. The other categories I list above, showed similar, but lower, figures. Maybe we want to penalize white females? Or offer a premium to non-white females and all males?

    (Reference Jerry's original claim: In 1929/1931, shortly just before SS was passed, a white female aged 60 could expect to live an additional 16.05 years, the other categories I list lagged behind that...)

  8. Zippert: I said don't include MEDICAID calculations in "entitlement" POLITICS. We are told that we must cut SS and Medicare because they aren't covering the cost of MEDICAID????? So let's fix SS and Medicare to be self sustaining with FICA taxes on more of the income, removing income cap on employee portions. MEDICAID should be funded but not out of SS / Medicare. Personally, I'd like to see ALL social welfare at a local level--to save taxpayers Billions in federal administrative costs.

  9. Zippert 9:19: Was not a law--it was a court decision that ER's must treat regardless of ability to pay. HOWEVER, there is nothing saying we can't restrict VISAs and work permits to those who PAY THEIR BILLS. And the practice of allowing anyone and everyone to walk on ER bills means many hospitals have closed emergency rooms so care is much less available. Haven't you noticed that things you used to go to ER are now available at Quick Care outlets? More of this is trending.

  10. Thank you, Last Throes. SS is to preclude destitution of elderly. Says a lot about this country and adult children.... We'd rather feed illegals and their babies than our parents, grand parents, aunts, uncles--that's what cutting SS benefits means. More funding for illegal health care than for those who've worked and worked and paid and paid taxes.

  11. Stephin,

    I agree with you and Jo Ann on removing the cap. I suggested the same thing in my own letter to the editor which was published in the Las Vegas Sun on 12/28/2012 (see the archives).

    I also suggested that we might be able to reduce FICA tax rates for everyone, across the board, because of all the additional tax revenue this proposal would generate.

    You also mentioned that the federal government uses Social Security as a "cash cow" to fund projects unrelated to social security. You are referring to the surplus in the Social Security Trust Fund, which our federal government has repeatedly drawn upon decade after decade. Here is how the federal government borrows money from social security trust fund.

    Historically, Social Security has purchased U.S. Treasury Bonds with our FICA tax dollars. These treasury bonds are essentially "loans" to the federal government, to be paid back to social security (with interest) at some future date. The main problem with this, is that these "loans" from social security to the federal government increase our National Debt. How does it increase our national debt ? Because its the American taxpayer who will have to pay this money back, from General Revenue, when social security decides to redeem the bonds. This is nothing more than fancy accounting, which increases the tax burden on the American economy.

    We would have been much better off if we had just taken that FICA tax money, and let it sit in the trust fund, rather than "investing it" in treasury bonds which have added 2.7 trillion dollars to our national debt.

    If we ever get the social security system straightened out, I would recommend that Congress keep its hands off the Trust Fund. That would be the best thing for social security, and for our country as a whole.

  12. I agree totally with the article. Plus it should be a crime to tinker with or use SS monies for anything other than there intended purpose.
    I really doubt BHO and company could stay out of jail long if it were a crime...
    If they did that in the private sector they would be in jail now...

  13. "Carmine:

    Did you really say to take more money out of the paychecks of workers and out of the coffers of their employers," @ Jeff

    I said it. Obama and Dems did it. After two years of extending the Bush holiday FICA tax cuts [4.2 match split both ways], President Obama and the Dems restored to the full amounts of 6.2 for both effective Jan 1, 2013.

    I said in responses to past letters here, I believe one that Marty Stone wrote and was printed, that the amount should be 9 percent with a 4.5 split both ways. No exemptions, no waivers, no tax holidays.

    CarmineD

  14. "We would have been much better off if we had just taken that FICA tax money, and let it sit in the trust fund, rather than "investing it" in treasury bonds which have added 2.7 trillion dollars to our national debt." Marty Stark

    Give employees the option. If workers want to invest their FICA contributions privately in their own accounts, not the Social Security Trust Fund, let them. That's the best way to keep the government's hands out of their pockets and off of the Trust Fund.

    CarmineD

  15. Jeff: You bring out the best in me.

    "Behold, I send you out as sheep in the midst of wolves; so be shrewd as serpents and innocent as doves." St. Matthew

    CarmineD

  16. Ref has a point, again. SS is a RETIREMENT PLAN for Americans. Sure, SS was not designed to fully fund 100% of everybody's retirement. So, you need to fund IRA's and consider private pension plans throughout your working years. HOWEVER, there is no need to disgust high-performing workers. Let them count on SS benefits too. Who says inflation won't be double digits for years and that whatever top out income you design would cut off retirees of modest means 20-40 years from now. (Think AMT that via inflation means many modest income people are hit with additional taxes when AMT was designed for affluent incomes.) SS doesn't and SHOULDN'T be for those who have consistently not worked--most need to have at least 40 quarters of coverage to get benefits. The career-indigent are already living better than many of the rest of us--free / reduced cost housing, free food, free health care, free transportation, non-profit assistance. They just keep the car in Mom's name, the bank account in Dad's name and never pay taxes other than FICA insurance when they have to. Therefore, I'm opposed to reducing FICA on modest incomes. If the best you can do is part-time minimum wage while you collect and collect benefits, you NEED to pay FICA and then some. THE issue here is how to get legislation to eliminate the cap--a difficult proposition made more difficult if you tell the same high-income earners that they will likely get nothing for their FICA contributions.

  17. Carmine (and to some extent, Jeff),

    Bush43 did NOT institute the FICA tax holiday, that was President Obama all on his own as part of the stimulus package. There was supposed to be an offsetting increase in fees elsewhere to pay for it, but I have not seen the results of that, other than the fact that SS does have a negative cash flow sooner than was projected.

  18. "Carmine (and to some extent, Jeff),

    Bush43 did NOT institute the FICA tax holiday, that was President Obama all on his own as part of the stimulus package." @ boftx

    Thank you... BUT as long as you are being technical, it was Congress.

    CarmineD

  19. Freeman said:

    "What the Marty Stark's, Jo Ann Simmons and Stephen Rosin's aren't telling you is that some Americans will be paying into the Social Security program and not getting their full paid for benefits".
    ____________________________________

    Freeman is talking about the wealthy. He is concerned they will end up paying a disproportionate amount of fica tax, and never get it back, when (and if) the fica cap is removed.

    Actually, since its an "insurance" program, there will be many people (besides the wealthy) who might not recover their full fica contribution. And, there will also be many who will recover much more than their fica contributions. In order to understand how this can happen, you need to understand a little bit more about how the program actually works.

    Social Security, as it currently exits and has existed for the past 70 years, is much more than a "retirement insurance" program. It also pays benefits to eligible non-working spouses who have attained the age of 62 (if they choose to apply), as well as minor children up to the age of 18. If the worker dies, his widow can collect benefits on his earnings record if she has attained the age of 60, or even younger if she has minor children under the age of 16 in her care. Surviving children can collect benefits on the worker's record until they reach the age of 18. If a worker has a child who became disabled before the age of 22, that child can also collect benefits on the worker's earnings record, for as long as that child remains disabled. And, of course, if the worker himself becomes disabled before he reaches full retirement age (65-67), he would also also be eligible to received disability benefits on his own earnings record. There are also some limited instances in which the parents of the worker can collect benefits on his record.

    From what I have just told you, you can see this is much, much, more than a simple retirement annuity. It is a comprehensive social insurance program.

    If Freeman is concerned about millionaires having to pay 6.2% on all of their income, I would say that we probably wouldn't have to take it that high. We could leave the cap on, but set it much higher than it is now. And, as I said in some of my earlier comments, along with lifting the cap I would recalculate how benefits are computed, so that EVERYONE receives a comparable and fair return based on their fica tax contributions (even millionaires).

    However, until the CBO takes a serious look at this proposal and runs some actual numbers, its difficult to know if this would be practical, or whether it could actually work in the real world. I haven't heard any mainstream politicians from either Party suggest this approach. I did hear Senator Bernie Sanders (Independent- Vermont) suggest it last week on a radio program, but he is far from mainstream.

    It's time for our politicians to start thinking outside of the box.

  20. Marty, your suggestions will not pass unless you stop giving away everything to the low-income for life types and those who won't work at all. Ever hear of the Boston tea party? Taxation without representation. If you preclude benefits at a certain income level, you CANNOT tax those earners. Confiscation is still unconstitutional.

  21. Roslenda,

    You said: """Marty, your suggestions will not pass unless you stop giving away everything to the low-income for life types and those who won't work at all. Ever hear of the Boston tea party? Taxation without representation. If you preclude benefits at a certain income level, you CANNOT tax those earners. Confiscation is still unconstitutional."""
    ____________________________________

    I don't think you understand my proposal. I am opposed to "precluding benefits" to high wage earners. I am opposed to "means testing". I believe that everyone who pays fica tax should be treated the same way, regardless of income level. I believe in equal treatment. That's why I said we would need to recompute the benefit formula to make sure that no income group was disadvantaged in terms of their contributions. What I am talking about is a massive overhaul of the social security system.

    That being said, I must remind you once again that this is an "insurance" program. Some workers will die before they ever collect a penny, regardless of their income bracket. Not everyone receives benefits. That also happens to be the nature of insurance policies in the private sector. If private insurance companies paid out on every policy that they issued, they wouldn't be in business for very long. They have to make a profit in order to satisfy their stockholders.

    Social Security doesn't have to make a "profit". It just has to remain "solvent". We could think of the American people as being the "stockholders" of the social security program.

    Now, let me address your "taxation without representation" and "Boston Tea Party" arguments. I can't see any similarity between what's happening today and what happened when King George was in charge.

    In 1776 we were the colonial subjects of a monarchy and REALLY DIDN'T have any rights. However, once we had our revolution, wrote our Constitution, and established our state and federal governments, it was an entirely different situation. When we get taxed now, it is our DULY ELECTED REPRESENTATIVES who have made this decision acting on our behalf. You may not like the decisions they are making, but you can't call it "taxation without representation". If you don't like what your "representatives" are doing, you can vote them out.

    You also said this fica tax might be considered "confiscation of property" under the Constitution. Well, we've had a progressive tax system since the early part of the 20th century, and it hasn't been ruled unconstitutional yet. Personally, I think I would prefer a "flat" tax to the "progressive" tax system we have set up in our country. Seems fairer to me. But, no matter what type of tax system we set up, people will always be arguing over how the tax money should be used. Our standard should always be to do what is best for the country. Of course, people will disagree on that as well.

  22. Marty Stark: Several questions for you:

    Why would we want to reward Congress and the Presidents by raising the cap on earnings? This gives them more revenue in the fund to play politics with.

    Why do it [raise the cap] after they [Congress and the Presidents] have done such a poor, scurrilous job of stewardship in the past?

    Don't you believe that people, if they choose to do so, can do a much better job of caring for themselves and their money than Congress and the Presidents?

    Good luck with your answers.

    CarmineD

  23. The problem of upping the limit means more money to be paid out later, as benifit is directly related to what you pay in. Here is a more practical solution.. people who earn less than 50,000 a year pay twice as much, once they earn over 50k they go the current rate. This will ensure they have saved enough for thier retierment years, after all this is the problem, yes? Does the letter writter mean to say have the limit raised then give the extra to someone who did not pay as much? This would be the same as me saving money in my IRA every year for 20 year and my neighbor saves none, then after20 years I split my savings with him. Sorry, but this is what families are for, to save and pass down wealth to future generations.

  24. Marty, you ignore the Bill of Rights and other protections within and outside the Constitution that each has equal protection. Otherwise, we pretty much agree--but no to subsidizing low-income earners--that's already too much built in with "subsidies" to long time "earners" who had very low incomes--like part time work forever and ever. Yes, they get a kicker in their benefits at the cost of the rest of us.

    Nobody has specifically addressed the benefits paid to those who haven't paid in--illegals who've been here a "long time" and are presumed to have paid in under the stolen and fraudulent SSN's they (assumed) used to steal jobs. And, the SSI and SSDI paid to the born-handicapped. I'm NOT saying we shouldn't provide for the handicapped but where is the funding? We just dumped them into SS without funding it.

    Check out Peter 5:25--now that's innovative thinking and has real merit--the working class including working poor would be "forced" to save for retirement--so they'd have an income in their senior years and not be a constant drain on our government programs, our society, our non-profits.

  25. Freeman:

    Excellent points on reasons for not raising the dollar amount on the social security cap. May I add one more? It is absolutely ludicrous from a budget perspective, and also extremely bad government policy, to pay past social security obligations from funds generated by current tax revenues. That's exactly what's being done by increasing FICA contributions and/or wages. We are borrowing from current and future social security revenue to pay past social security obligations.

    CarmineD

  26. Carmine,

    You said: ""Marty Stark: Several questions for you:
    (then came the questions which I won't bother printing here)
    Good luck with your answers.
    CarmineD""
    _____________________________________

    Sorry Carmine. We don't do questions, remember ? I'll give you the same answer that you gave me when I asked you several questions regarding your comments on another thread (See: Clinton Needs To Be Held Responsible). This is how you responded:

    ""Write a letter to the Sun about your post, and if it's printed, I happily will (respond)".

    CarmineD
    --------------------------------

    So Carmine, why don't you go ahead and follow your own advice ? Put your questions in a letter to the editor and, if it's printed, then I happily will (respond). How does that work for ya ?

    Marty Stark

  27. No problem Marty. They were rhetorical questions. I know the answers already and so do you. I wanted to use the same technique you used against you to make my point the way you tried. Except I'll answer my questions for you.

    1 & 2. Of course we shouldn't increase the wage cap to make up for the shortfall in the fund that Congress and presidents caused. It rewards the Congress and presidents for failed stewardship and mismangement of the fund. The answer is not to bail them out for their shortcomings by giving them more to do the same. Not until they prove thay can be responsible stewards.

    3. Of course we should allow persons to opt in/out of social security at their choice. With predetermined follow up times for opportunities to opt in/or out with a catch up payment and interest or payout if they decide to change their minds.

    Check all recent polls of Americans to see what they answer when asked will social security be there for them when they retire. Guess what the majority answer?

    Then, check all recent polls of Americans when asked if they should have the option to pay in or not to social security. Guess what the majority answer?

    Good luck with the answers. As before, I know the answers. But I doubt you do. Prove me wrong if I am.

    CarmineD

  28. Roslenda said, "Nobody has specifically addressed the benefits paid to those who haven't paid in--illegals who've been here a "long time" and are presumed to have paid in under the stolen and fraudulent SSN's they (assumed) used to steal jobs".
    ----------------------------------

    The above statement is a common misconception about Social Security.

    Yes, it is true that some illegals have used stolen or fraudulent social security numbers in order to find work. However, after the 9-11 attacks, the Social Security Administration and the Department of Homeland Security (DHS) together changed their procedures to make this type of fraud much more difficult. They also mandated that employers verify the immigration status of new employees with DHS, prior to hiring them.

    It is impossible for someone with a fraudulent (made-up) social security number to collect social security benefits. Want to know why ? Because when Fica tax is deducted from worker's paychecks, it is only credited to VALID social security numbers. So, if someone is working under a "made-up" ssn, those earnings have no place to go. They end up in limbo, in a sort of no-man's land in the SSA system. Nobody gets to use them to collect benefits.

    What about illegals who STEAL a VALID SSN and work under it ? That's an entirely different situation. In that case, if and when they apply for benefits, they would have to produce satisfactory identification documents to prove that they actually are the person that they claim to be (original birth certificate, driver's license, etc). It wouldn't be enough for them to just produce pay stubs to show that they worked under that SSN. They would have to prove their identity.

    So, there are some mechanisms in place to counteract this type of fraud.

  29. Jeff:

    It is morally apprehensible to pay past debts for social security out of current year and future year taxes. This imposes a huge financial debt on current and future American generations, by most accounts upwards of $1 million dollars for each US student today, for past unfunded/mismanaged obligations like social security. If that's your definition of "tweaking" the system, you better check your Webster's again. It certainly isn't mine and others. Perhaps the fear you cite above for the polling results is real and your head is stuck in the sand.

    CarmineD

  30. Roslenda:

    I opine you're confusing two issues. One, you cited, is the illegal use of false names, SSN's, and addresses to collect refunds for dependent children. The IRS Inspector General recently issued a report on this matter and its an eye opener. Congress needs to close the tax loophole that allows this, but has been dragging its feet.

    The other is FICA wages paid to incorrect non-existent SSN's by immigrant workers. This is a sin that cries out to heaven. These workers often have FICA taxes deducted and paid by employers but the workers never get the benefits. They do it for quite awhile because the Social Security Administration is so slow to address the matter and doesn't put a priority on doing so. The workers move on and continue the same: Paying FICA taxes to false and incorrect SSN's never accumulating legitimate benefits for the future. And so on and on. It's a sin and amounts to billions of dollars.

    CarmineD

  31. Jeff:

    The CBO chart is a guestimate of balances now and the future out years. It is missing one key element IMHO. The guestimate does not show the estimated payouts by the USA over these years. Without these, even if guestimates, a reasonsable thinking person, like me, concludes the chart is worthless for gauging/measuring the objective operations of the social security fund. All the verbage is budget speak. Doesn't mean a thing.

    If you want to read the authoritative conclusions of the social security fund, read the Trustees annual report. If I recall correctly the most recent report states it [social security fund] will be in a deficit in 2017 and bankrupt by 2033, if no actions are taken to sure it up. I haven't mentioned the Medicare fund which is already there [deficit operations].

    CarmineD

  32. Roslenda:

    Here is info on the IRS OIG Report:

    http://www.wthr.com/story/19241488/inspe...

    Russell George, the IG, is well respected. However I noted, and didn't realize, that there is a new IG for IRS. I suspect George is moving on up.

    CarmineD

  33. Just to expand a little bit on what JeffFromVegas said above.

    IF WE DO ABSOLUTELY NOTHING, the surplus in the social security trust fund will be exhausted by 2033. However, there will still be enough FICA tax revenue coming in to pay 75% of promised benefits (declining to 73% of promised benefits) by 2086. That's enough FICA tax revenue from current and future workers to cover the majority of benefits for the next 75 years. Personally, I feel very comfortable with that.

    As Jeff said, if we "tweak it" (make some adjustments) such as lifting or raising the cap, adjusting benefit payouts, etc., it shouldn't be too difficult to make up for the 25% shortfall over that period. And, by 2086, all of us "baby boomers" will be long gone, which will remove most of the stress on the "entitlement programs". In effect, this "problem" will fix itself over the long run.

    As I said in my previous letter to the editor on 12/28/2012, Social Security is easy to fix (if we choose to). However, in order to find these solutions, we must think "outside of the box". To have a constructive dialogue on this issue, we need to discard our preexisting prejudices and assumptions about the social security system, and just deal with the facts.

  34. "Beginning in 2021, cost exceeds total income and combined OASI and DI Trust Fund assets diminish until they become exhausted in 2033. After trust fund exhaustion, continuing income is sufficient to support expenditures at a level of 75 percent of program cost for the rest of 2033, declining to 73 percent for 2086."" Jeff

    What part of a shortage of 25-28 percent in the Trust Fund to meet expected payouts do you not understand?

    If making up a 25 percent shortfall in the Trust Fund is a tweak, we have very different understandings of the word.

    Keep in mind, these are the Trutees projections and estimates based on current factors and information. In other words best case scenario. These [factors and information] are subject to change for the worse, not the better.

    And as I said, this does not take into account Medicare which is running a deficit already and continues doing so into the future. Unless reforms are made.

    CarmineD

  35. "adjusting benefit payouts" Marty

    That's means testing, which you said you are against, and/or changing the COLA on social security from an inflation adjusted basis to a wage adjusted basis [which the liberal wing of the Dems are against.] Or BOTH.

    CarmineD

  36. ""problem" will fix itself over the long run." @ Marty

    And a ONE TRILLION DOLLAR minted coin made out of aluminum will pay for the current US debt too.

    CarmineD

  37. I said the SS Fund would be bankrupt by 2033. Why? When cities and counties accross the USA reach a shortfall in current revenues to current expenses of 75 percent and less, they are on the verge of bankruptcy. If the condition continues, the cities and towns declare bankruptcy [revenue shortage of 25 percent to expenses]. Don't believe me? I recommend that you review the list of cities/towns that have declared bankruptcy. What was the ratio of current revenues to expenses?

    CarmineD

  38. Carmine,

    You picked out the following phrase ("adjusting benefit payouts") from my previous comment, and then proceeded to put words into my mouth.

    You said: "That's means testing, which you (Marty) said you are against, and/or changing the COLA on social security from an inflation adjusted basis to a wage adjusted basis [which the liberal wing of the Dems are against.] Or BOTH."

    Carmine, your comment above demonstrates your ignorance about the social security program.

    Did I say anything in my comment about "means testing", or changing the cost of living (COLA), such as the chained CPI ? I wasn't talking about either of those things.

    What I was referring to was an adjustment in how we calculate the PIA. Do you know what that is, Carmine ? No, of course you don't, so I will tell you. The PIA is SSA lingo for PRIMARY INSURANCE AMOUNT. It is calculated based on a worker's highest 35 years of earnings, and indexed for inflation, and is the basis for determining the monthly benefit amount.

    Now, what does "indexing for inflation mean" ? It means that if you applied for benefits today, for example, the amount you earned in 1980 would be converted (indexed) into 2013 dollars for the purpose of calculating your PIA. Let me repeat. They don't use ALL of your earnings in the computation. They only use the highest 35 years, so there is no 1:1 ratio between FICA taxes paid and benefits received.

    Now, here is actual formula for calculating the PIA, copied and pasted from the social security website (ssa.gov):

    PIA formula
    For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2013, or who dies in 2013 before becoming eligible for benefits, his/her PIA will be the sum of:

    (a) 90 percent of the first $791 of his/her average indexed monthly earnings, plus
    (b) 32 percent of his/her average indexed monthly earnings over $791 and through $4,768, plus
    (c) 15 percent of his/her average indexed monthly earnings over $4,768.
    _______________________________

    That's how the monthly benefit rate (PIA) is calculated, and that's what I meant when I said we could "adjust benefit payouts". I wasn't talking about "means testing" or "chained CPI". What your comment illustrates is that a "little knowledge" can be a dangerous thing. You don't know as much as you think you do.

    So, in the future, I would appreciate it if you WOULD NOT put words in my mouth. If you don't understand what I am talking about, then ask me. But, please stop pontificating on things you know absolutely nothing about.

  39. Carmine 5:41. Not sure why you gave me the link but I know the contents--been there. A little more detail might clue in some of those skeptical of my remarks about illegals robbing us blind--robbing our systems blind. Just do a search for what happens when an illegal steals YOUR SSN (aka ITIN--taxpayer identification numbers include SSNs, substitute SSNs for declared non-citizens with work permits and such, and various other numbers such as business ID #'s aka 88-numbers for many businesses in Nevada.) As an Enrolled Agent I take some interest in the stories regarding tax return preparers--when indicted for such things as giving out the same SSN for many, many illegals--so they can work and claim fraudulent refunds. And to those who think I like to be a no-it-all: it's not fun to have a very good memory and high IQ. It is just NOT fun. But then, it does make me formidable in some situations.

  40. Roberta,

    My comment referred to the common belief among the general public that illegals are able to collect social security benefits. I pointed out that the Social Security Administration and Department of Homeland Security implemented safeguards afte 9-11, which make this type of fraud much more difficult.

    Tax refunds are a different matter, and have nothing to do with Social Security. They are the responsibility of the Internal Revenue Service.

    I am not as knowledgable about IRS as I am about SSA, so I have no suggestions to make in that area, other than maybe the government should hire more IRS agents to prosecute fraud. Of course, that would cost money, which means more taxes, which would make the government larger, which would make the Tea Party very unhappy.

  41. Roberta,

    You said, "Marty, you ignore the Bill of Rights and other protections within and outside the Constitution that each has equal protection. Otherwise, we pretty much agree--but no to subsidizing low-income earners--that's already too much built in with "subsidies" to long time "earners" who had very low incomes--like part time work forever and ever. Yes, they get a kicker in their benefits at the cost of the rest of us."
    -------------------------------------

    You are right. Low wage workers do get a "subsidy" in the PIA computation.

    If you look at the PIA formula that I posted in an earlier comment, it shows that individuals with average indexed monthly earnings under $791 (a very low amount) will have 90% of those earnings credited toward their PIA. As average indexed monthly earnings go up, the percentage credited towards their PIA goes down. This is how the progressive system works in the computation of social security benefits.

    Despite, the fact that low income individuals receive a "kicker" in their benefits (as you put it), their actual monthly benefit amounts are still extremely low.

    For instance, someone who worked most of their life at minimum or low wage jobs would receive a monthly benefit in the hundreds, not thousands, of dollars. By contrast, a wealthy individual who paid the maximum FICA tax for 35 years, and who files for benefits in 01/2013, would receive a monthly benefit amount of $2533 starting in 01/2013. The average monthly benefit, between these two extremes, is currently $1261 per month.

    The social security system was established to provide a "safety net". The progressive feature of the benefit computation formula plays an integral role in sustaining that safety net.

  42. Marty:

    Just as the Dems and Obama refused the "means testing" and "changes in the CPI" for social security, they will refuse your benefits reforms also. Why? Yours are more restrictive than the ones that they object to, despite all your pontificating and voluminous posts here otherwise.

    CarmineD

  43. "Carmine 5:41. Not sure why you gave me the link but I know the contents--been there. " @ Roslenda

    It [the Report] makes the same point as you did. And the IG of Treasury is a repected government servant.

    CarmineD

  44. "It is calculated based on a worker's highest 35 years of earnings, and indexed for inflation, and is the basis for determining the monthly benefit amount." Marty

    Double check your SS requirements. 40 credits [or formerly quarters] is 20 years not 35.

    What was that about knowing everything?

    CarmineD

  45. Marty:

    In the future when you provide ME the calculations of benefits payouts under the PIA formula, show also the benefits payouts under the traditional SS payout. If you are making the point, as you are, that adjusting benefits payouts will reduce the drain on the fund, then you have to show both amounts, not just one. Right? :-)

    CarmineD

  46. Marty and Jeff:

    Interestingly you both use a one sided brain approach to logic. Jeff on one hand shows budget guestimates of the Social Security Fund over 10 years without showing the offsetting payouts. Marty on the other makes the point, or tries to do so, that adjusting SS payout benefits can save the Fund. But fails to show the differences in the amounts for both methods. Are you sure you are not related? You both appear to use one-sided brain thinking.

    CarmineD

  47. PS: And you both call a 25 percent shortfall in the SS Fund for current revenues under current expenses, historically a percentage that forces US cities and counties into bankruptcy, a problem that can be fixed with tweaking. And you glaze over the huge looming deficits and debts for Medicare/Medicaid at the State and Federal levels. You must be identical twins.

    CarmineD

  48. Carmine,

    You said to me (Marty Stark) "Double check your SS requirements. 40 credits [or formerly quarters] is 20 years not 35."
    "What was that about knowing everything?"
    CarmineD
    ---------------------------------

    Don't get too smug, Carmine. Ironically, you are wrong about that too. Perhaps it is YOU who should "doublecheck" your information.

    The "40 quarters" refers to how long you have to work in order to be "insured" for social security purposes. That is the minimum requirement in order to "qualify" for social security benefits. There are some exceptions to this rule, but I'm not going to get into them here. We'll just stick with the general rule, which is 40 quarters.

    Just as with other types of benefits in the private sector, your "insured status" determines whether you are "eligible" to receive benefits. If you are not "insured" for social security purposes, then you cannot apply for benefits. So, the 40 quarters determines WHETHER YOU CAN APPLY for benefits, and nothing more.

    Just to help you out with your math a little, "40 quarters" comes to 10 years, not 20 (there are 4 "quarters" in a year).

    The "35 years" refers to how many of your total lifetime "work years" are used in the computation of your PIA (primary insurance amount), and nothing more.

    So, to sum it up, the "40 quarters" and the "35 years" are referring to two, completely different, things.

    Like I said earlier, a "little knowledge" is a dangerous thing, and you've proved my point yet again. Please research your comments a little more carefully before you post them. Get your "facts" straight. I think you may be in a little over your head on this subject.

  49. "The "40 quarters" refers to how long you have to work in order to be "insured" for social security purposes" @Marty

    "Just to help you out with your math a little, "40 quarters" comes to 10 years, not 20 (there are 4 "quarters" in a year)." @ Marty

    On the first point, that's what I said.

    On the second, typing error. Like you typing 2011 instead of 2012 for your recent printed article in the Sun.

    I opine on the other material points I made to you/your opinions-examples, which you can read above, your silence speaks volumes.

    CarmineD

  50. Here's another question for you, Marty.

    Facts: You are in arrears every day, every week, every month, every quarter and every year on your current and past living expenses by 25 percent. And you have been for several years. This causes interest added for years to the unpaid amounts. Plus, you are in current and past deficit positions with ALL your doctor bills, health care provider bills, medical treatment and drugs for you and all your immediate family members.

    Here's the question: What tweaking would you do to avoid declaring and going into bankruptcy?

    CarmineD

  51. Carmine,

    As usual, you missed the entire point of my previous comment.

    Playing the "gotcha" game that you seem to love so much, you were certain that you had caught me in an error when you said to me " "Double check your SS requirements. 40 credits [or formerly quarters] is 20 years not 35."

    And then you added (sarcastically), "What was that about knowing everything?"
    CarmineD
    ----------------------------------

    So, you thought you had me. Unfortunately, as it turned out, you were wrong. The 40 quarters for insured status, and the 35 years used in the PIA computations, are two entirely different things, used for two entirely different purposes in the social security program. You didn't know that, as your comment above clearly illustrates.

    The main point of my comment wasn't that you made a "math" error (when you said that "40 quarters comes to 20 years"). My main point was that you didn't understand the basic difference between the 40 quarters and the 35 years, and yet you still used it to try and challenge me.

    This is a game that I am not interested in playing.

    You (Carmine) went on to say, "I opine on the other material points I made to you/your opinions-examples, which you can read above, your silence speaks volumes.
    CarmineD"

    No, actually, my "silence" says that I am tired of this game that you play. I have better things to do with my time than engage you in a neverending back and forth.

  52. "No, actually, my "silence" says that I am tired of this game that you play. I have better things to do with my time than engage you in a neverending back and forth." @ Marty

    Too bad. I was actually just starting to enjoy it.

    CarmineD