Obama proposes cuts to social security and medicare

[Demosthenes11]

someone explain retirement funds to me.

[solanis]

someone explain retirement funds to me.

it's kind of complicated to type up for you here, but if you're serious then send me a PM and I can go over the basics with you tonight when I get home. a great starting point is investopedia: http://www.investopedia.com/investing-topics/Retirement they have videos and very colloquial explanations for everything. the absolute most important factors in planning for retirement are:

#1 you are never too young to start, and the younger you start, the less painful it will be
#2 you cannot rely on the government any longer to constitute a large part of your post-retirement income. take charge of your financial future.

[Talint]

it is not our social obligation to bail out the government.

I read statements like this and it makes me fearful that people don't understand what the role of government is.

[Egon]

Getting close to election time, so he has to act like a Conservative again.

[Kurokikaze]

I'll wait to hear where exactly these cuts are coming from before I state an opinion on the matter. SS no matter how you slice it needs to be fixed going forward (not removed) and I'm glad they're considering doing that sooner rather than later.

Although, I'm upset to see that only those two are getting all this attention. Leaving the biggest elephant in the room unmentioned... I'm looking at you Military Spending.

It's sad to say but I'll probably happen... Most of us on this forum won't receive a lick of that SS money we've been paying into.

[*Shinzon*]

I'll wait to hear where exactly these cuts are coming from before I state an opinion on the matter. SS no matter how you slice it needs to be fixed going forward (not removed) and I'm glad they're considering doing that sooner rather than later.

Although, I'm upset to see that only those two are getting all this attention. Leaving the biggest elephant in the room unmentioned... I'm looking at you Military Spending.

It's sad to say but I'll probably happen... Most of us on this forum won't receive a lick of that SS money we've been paying into.

Military spending encompasses so much that it's unfair to just say we should cut it all. I don't consider myself a republican but I know enough that much of military technology helps civilian life, even if indirectly. Technology helps everything. The wars and the bottomless pit they create is the problem. I'm also not saying we should or couldn't reduce it by a large amount but I think people need a better idea of what goes in and comes out of the military budget.

[Meresgi]

God forbid we cut corn subsidies or military spending, or all the welfare payouts going to families who are abusing the system.... Fucking country


Also isnt Social Security fucked because back in the day they decided to take the money and instead of investing it, spend it like it was free cash when more ppl were working then werent, and now that's its opposite we fucked over ourselves? I just remember seeing/reading something about this.

[Pirian]

Also isnt Social Security fucked because back in the day they decided to take the money and instead of investing it, spend it like it was free cash when more ppl were working then werent, and now that's its opposite we fucked over ourselves? I just remember seeing/reading something about this.

The SS money is used to buy US Treasury bonds, so technically it is invested, lol

[archibaldcrane]

I really hope part of the revenue increases involve raising the $108k cap on taxable income for social security. It's ridiculous that a person making $170k is taxed less on their next dollar earned than a person making $35k.

[aurik]

It's only ridiculous if you're earning less than $170k!

[quannum]

The SS money is used to buy US Treasury bonds, so technically it is invested, lol

does NOT raising the debt ceiling effect these t-bonds? or are these special SS t-bonds?

[Kuya]

okay, pulled up some numbers for you kuya. these are from the CBO (congressional budget office) in their 2009 report. projections in this report line up very well with what's progressed in the past two years, so it'll suffice for a layman's explanation of the situation. here's the link: http://www.cbo.gov/ftpdocs/102xx/doc...06-25-LTBO.pdf


http://www.econbrowser.com/archives/...bt2_jul_09.gif

I'll spare you the tinfoil hat bolding, so you'll have to read it. this is their chart showing what will happen to national debt if we continue with our current fiscal policy. medicare and medicaid will more than double as a percentage of GDP by 2035, from 3% to 8% adjusting for inflation (pg. 30). retirement-age population will grow 90 percent while youth population will grow by 12 percent (pg. 39). projected social security spending will increase from slightly above 4% of GDP to slightly above 6% by 2080, which is just one generation of course. this turns into, conservatively, a 15.7 cost ratio (in both extended baseline and alternative fiscal scenarios) and -1.3-.5 actuarial balance (pg. 41).


in layman's terms, this means at some point:
1. we will have to raise retirement age significantly (age at which one becomes eligible for benefits, rather)
2. reduce the amount paid out once that age is reached
3. reduce the cost-of-living adjustment calculated for current beneficiaries and later ones

have a look, the whole document is interesting but the meat and potatoes is in chapter 3.

Just finished reading the link, and it continues to puzzle me why social security would be up for cuts. It's not scheduled to hit red numbers until the next 20 to 30 years, so cutting at this very moment when there's still so much unemployment and low demand is unnecessary. Not to mention none of the meassures mentioned in order to deal with the problem sound drastic, so once again i do not see why social security needs to be handled right this moment.

But of course, we still don't know exactly what Obama intends to do with it. Only thing he has done is make progressives nervous.

[Pirian]

I really hope part of the revenue increases involve raising the $108k cap on taxable income for social security. It's ridiculous that a person making $170k is taxed less on their next dollar earned than a person making $35k.

But the person making 35k a year is much less likely to have a retirement plan than the 170k person, and that's the point <.< It's suppose to force people into having a retirement plan (even though it definitely doesn't do enough), and encourage people with the extra money into having their own.

I'm much more for scraping the entire thing than I am for raising the cap, but I'm also more for forcing people to save (even if it's just sitting in bank(or mattress)) for old age/illness because lets face it - given the opportunity to spend 5k of their 35k income for a slightly better lifestyle NOW, or to put it away and save for later, I would wager the majority of people would actively spend it.

[solanis]

Just finished reading the link, and it continues to puzzle me why social security would be up for cuts. It's not scheduled to hit red numbers until the next 20 to 30 years, so cutting at this very moment when there's still so much unemployment and low demand is unnecessary. Not to mention none of the meassures mentioned in order to deal with the problem sound drastic, so once again i do not see why social security needs to be handled right this moment.

But of course, we still don't know exactly what Obama intends to do with it. Only thing he has done is make progressives nervous.

we're already significantly in the red, as indicated in that report. the problem is that the situation is scheduled to be exacerbated in the next 10-40 years.

It's only ridiculous if you're earning less than $170k!

preach. also, that's completely incorrect archi. someone breaking into the next tax bracket is paying significantly more on the dollar than anyone below. just because those basis points aren't going to social security doesn't mean we aren't being raped with taxes in every other way.

[Kuya]

The report says that from 2009-2033 the balance will remain positive at 0.4.

[solanis]

The report says that from 2009-2033 the balance will remain positive at 0.4.

discounting the trust? what page?

[Pirian]

does NOT raising the debt ceiling effect these t-bonds? or are these special SS t-bonds?

It effects them in the way that the Dollar will be seen as a less secure place to put your money, and the US Government will have to spend a higher % to borrow the same amount of money.


Edited for clarity in what I was trying to say

[Kuya]

discounting the trust? what page?

Page 41

Page 39 to 40 discuses how they arrive at the final numbers.

[Xantavia]

At this point, I would just like to say fuck it all, let these "experts" do whatever the hell they want with the economy. Then maybe people will realize that everything they are spewing are shit, like trickle-down theories don't create jobs and privatized social security won't help. My only fear is that we wouldn't be able to undo the changes.

[Dimmauk]

No matter what, I'm going to riot! That is what they do in other countries right?