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Some Straight Talk for Younger People on Social Security (and Medicare too)

As the scaremongering begins, this is your fight too!

The Social Security Trust Fund: Designed to Be Spent Down

The idea was that by making those changes, Social Security would be fully funded right through the retirement years of the Baby Boomers, the last of whom will retire in 2034 (after which the Baby Boom bulge or retirees will fall rapidly as its members die off and the problem of a shortfall goes away. Meanwhile, a Trust Fund composed of the added funds paid into the system by the higher FICA tax was supposed to cover the shortfall in current workers' FICA tax receipts.

But a combination of continually rising life-expectancy and of lower-than anticipated-birth rates brought a new challenge. The 1983 fix was not enough. The Trust Fund is now slated to run out in 2034 or 2035, but the Baby Boomer retirees -- at least the younger and more healthy among us -- will endure into the mid-2050s.

That has led to dire warnings from politicians eager to convince younger workers to give up on hopes of collecting Social Security, and in corporate media which have that same agenda plus a penchant for publishing ill-supported scare stories claiming that Social Security is going "bankrupt" or is a "ponzi scheme," or at best that "if nothing is done" Social Security benefits will have to be cut by 23% for retirees beginning in 2034.

To that I say nonsense! First of all, if benefit checks were suddenly cut by almost a quarter overnight, the country would face a revolution. Indeed Social Security was at death's door in the early 1980s, about to run out of funds in five years, when Congress and President Reagan (who before becoming president had been an outspoken opponent of the program) realized they'd be facing just such a revolution and passed a reform rescuing it through higher FICA taxes. The program can be rescued again the same way (though it should not involve higher taxes on the already heavily taxed poor and the middle class). It can even improved to pay benefits more like what people receive in Europe (where benefits are closer to 60% of a retiree's final working income compared to just 40% for Social Security here in the US).

What could be done to better fund Social Security now? Well, as I noted above, the best solution would be to end the US policy, since the end of World War II, of endless wars and massive unprecedentedly huge military budgets and after slashing personal taxes, apply some of the rest of the eliminated military taxs to better funding Social Security, and to financing a conversion of Medicare into a Health Care for All insurance program that would eliminate the need for Medicare, Medicaid, Veterans Health Care, charity care, private insurance premiums, employer health plans, etc. The savings from doing that would be extraordinary. For good measure and to help raise Social Security benefits so people wouldn't have to bet on stock markets with their IRA and 401(k) plans, we could also eliminate the cap on income subject to FICA taxation and tax all income -- including investment income -- and by adding a tax on short-term stock trading.

The Battle's Already Begun. Are You Ready to Fight?

story | by Dr. Radut