Talk:Social Security debate in the United States

Updating the Article

Much of this article relates to the debate around privatization in 2005-2006. It is well researched and written generally, but is now dated. Does anyone here have the desire or time to rewrite this into sections that matter to today's debate, which might be organized around the lines of pros/cons or cost/benefits of revenue-side and cost-side ideas? For example, the key debate points going forward are probably increasing retirement age, changing the rate of indexing of future benefits, limiting benefits to wealthy retirees, raising the payroll tax on some or all, raising the payroll tax limit, etc. Side issues would include private accounts to supplement social security so everyone has a 401K or equivalent. Perhaps then we can move much of the existing article to a second article around the 2005-2006 privatization debate, rather than clutter the debate going forward. Obviously, privatization is a non-starter and much debate about it going forward is just an exercise. I'd like to hear some opinions before I start to compartmentalize this a bit differently and split this into two articles, to preserve the good history that is there.Farcaster (talk) 02:36, 20 May 2008 (UTC)

Privatization is still a live issue. McCain has supported it and Obama has criticized him for it. I have no objection to amplifying other aspects of the debate, but I think it's too soon to exile the privatization discussion to a separate article. JamesMLane t c 07:20, 20 May 2008 (UTC)

In January 2009, I resequenced the article to focus on revenue and cost side arguments aligned with Barack Obama's position. I also added some additional background regarding liberal and conservative philosophy/framing. I did not delete any substantive discussion of the privatization debate of Bush's second term, simply moved it down in the article.Farcaster (talk) 16:39, 4 January 2009 (UTC)

Yes, this issue may be on the table again soon. Social Security Bombs About to Explode. An excerpt:

Remember how we didn't have to worry about Social Security now because payments from the program wouldn't exceed revenue for another decade or more? Well, the CBO has revised its estimates. It's still projecting a tiny surplus for next year--tiny--but Chris Martenson thinks those estimates will quickly be revised down:

Bears watching. ô¿ô 18:13, 11 April 2009 (UTC)

This article is now completely out of date. —Preceding unsigned comment added by Beowulfborealis (talk • contribs) 14:32, 15 March 2010 (UTC)

Social Security Administration quote woefully dishonest

I am taking issue with the following line, which is currently the last line in the article. It consists of several pieces strategically taken out of context of the original quote:

" The Social Security Administration, while noting the "superficial analogy between pyramid or Ponzi schemes and pay-as-you-go insurance programs," has described the latter as "a simple pipeline" that "could be sustained forever ... [i]f the demographics of the population were stable". "

This makes the Administration sound ridiculous. Here was their actual quote:

" There is a superficial analogy between pyramid or Ponzi schemes and pay-as-you-go insurance programs in that in both money from later participants goes to pay the benefits of earlier participants. But that is where the similarity ends. A pay-as-you-go system can be visualized as a simple pipeline, with money from current contributors coming in the front end and money to current beneficiaries paid out the back end. As long as the amount of money coming in the front end of the pipe maintains a rough balance with the money paid out, the system can continue forever. There is no unsustainable progression driving the mechanism of a pay-as-you-go pension system, and so it is not a pyramid or Ponzi scheme.

If the demographics of the population were stable, then a pay-as-you-go system would not have demographically-driven financing ups and downs, and no thoughtful person would be tempted to compare it to a Ponzi arrangement. However, since population demographics tend to rise and fall, the balance in pay-as-you-go systems tends to rise and fall as well. This vulnerability to demographic ups and downs is one of the problems with pay-as-you-go financing. But this problem has nothing to do with Ponzi schemes or any other fraudulent form of financing; it is simply the nature of pay-as-you-go systems. "

I'll probably change the thing myself if nobody does, but I wanted to comment on the change either way. This posting is coming from a libertarian who thinks Social Security always was a stupid idea. For those of you who are like-minded to me, please do not sabotage the credibility of our movement by engaging in dishonest editing tactics. Mbarbier (talk) 17:28, 13 March 2009 (UTC)

The short passage you quote is a fair summary of the full quotation from the SSA. In what respect do you think it takes anything out of context? What change do you propose? JamesMLane t c 18:15, 13 March 2009 (UTC)

Well for one thing, "If the demographics of the population were stable" is not the conclusion of the sentence. The way it is written implies the SSA is admitting that Social Security is unsustainable, or at least claiming one thing while saying another. But they are not saying that nor making contradictory claims. Read the two passages again, and you'll see that what is implied in the first passage is not at all what they are saying in the second. They are saying that the system will experience turbulence due to demographic variability, not that it is unsustainable. A more honest paraphrase is probably all that is needed. Mbarbier (talk) 17:57, 23 March 2009 (UTC)

Actually it looks like it was already fixed with the full quote. Mbarbier (talk) 18:01, 23 March 2009 (UTC)

Cite style

The current cite style is a mess. They all need to be converted to on consistent style. Adding <ref> </ref> and utilizing WP:citation templates will aid toward this effort. -- Banjeboi 02:21, 18 March 2009 (UTC)

I'm guessing the old footnotes style survived here because there was a good guide how to use them in a hidden comment. I couldn't see any reason to use different groups for I just merged them all together. — Blue-Haired Lawyer 13:15, 21 March 2009 (UTC)

Good call, if someone's interested it would be good to go through and standardize them all but this is a fine start. -- Banjeboi 02:54, 22 March 2009 (UTC)

Funds run out in 2037?

Quoting from the general release to the public, probably by AP, the article suggests that there will be less money coming in than being paid out (due) to beneficiaries. However, the original language read "75%" pay out which I changed. An editor changed it back (leaving the year current). Does the report assume "reserves?" I assume that this is the reason for the 75% remark which did not appear in the AP summary. Is the reason for the "reserves" discussed? Like having rosy assumptions? :) Or are there other reasons? Leaving it without explanation makes it seem like everything is just fine, which it can't be with a high ratio of retirees to workers. That is the whole point of the alarm being raised by the trustees. Student7 (talk) 23:41, 14 May 2009 (UTC)

Social Security is funded by dedicated payroll taxes of 12.4%, levied on the first 106,800 of income. So it never runs out. Payroll taxes cover payouts fully until 2016. Then, because of the accumulated surplus called the Trust Fund, legally Social Security can pull other government revenues (in addition to the payroll taxes) to cover all payouts so there is no cut in benefits until 2037. The Social Security Trust Fund will be liquidated between 2016 and 2037. Then, benefits get cut by 24%, as only payroll taxes can legally be used to pay benefits. So Social Security never runs out; payroll taxes will cover 75% or so of the payouts for the remainder of the century even if no action is taken. Even with no reforms, we get a sizable chunk of change forever from current payroll taxes; it is a "pay as you go" program. As long as people are OK with a 25% cut in benefits in 2037, no reform is needed. Conservatives don't like the fact that Social Security will pull the entire Trust Fund balance from other government revenue sources between 2016 and 2037 (actually, we're not that disciplined so we'll borrow the funds from China). This will convert what is called the intragovernmental debt (mainly the Social Security surplus) to public debt during the 2016-2037 time period. So those who argue that the intragovernmental debt is not "real debt" are mistaken; in the immortal words of Judas Priest: "You Got Another Thing Coming." Again, the threat is that payouts will get cut by about 25% in 2037. There is no other threat to the program under current law.Farcaster (talk) 23:55, 14 May 2009 (UTC)

Great explanation! Thanks. I've changed the wording somewhat to make it more understandable (to me anyway  :). It's still npov, I think. Emphasized that "expenses" were social security benefits. Previous sentence said that but I missed it. Still, it is a crucial point, and should be emphasized IMO, without a pov spin, of course. Student7 (talk) 11:12, 15 May 2009 (UTC)

Personal commentary

Personal commentary concerning Social Security and the validity of analysis performed by the Social Security Administration has no place in an encyclopedia article. — Malik Shabazz (talk · contribs) 23:01, 16 May 2009 (UTC)

I agree with Malik. The addition was inappropriate. I support his removal of the text.Farcaster (talk) 23:06, 16 May 2009 (UTC)

For reference, here are the disputed sentences, which I added to the existing section Criticism of Social Security as a pyramid or Ponzi scheme:

A Ponzi scheme, however, could continue forever too, under the same conditions: as long as the amount of money coming in the front end of the pipe maintains a rough balance with the money paid out. The reason Ponzi schemes cannot sustain this incoming flow is because they cannot force participants to keep paying in, essentially at gunpoint, as government-mandated programs can. (Stop making tax payments, and sooner or later, men with guns will come for you.)

Relying on the assurances of the Social Security Administration about the integrity of Social Security is like relying on the assurances of Mr. Ponzi or Mr. Madoff about their schemes.

What is it about these sentences that lead you to conclude they are "personal" or "commentary"?

This article is about the debate on Social Security. One of the elements of the debate is the claim that Social Security is like a Ponzi scheme. It is reasonable to consider the bias of a source when evaluating its credibility, and to balance it with the opposing point of view.

The bare assertion that something is "inappropriate" does not make it so. Why do you think it is inappropriate? Refer to wikipedia guidelines please, if you are relying on them. 68.110.107.158 (talk) 23:52, 16 May 2009 (UTC)

First, cite a credible source that feels as you do. Then, balance that with those that have the opposite opinion. In other words, explore the pro- and con- of your statement. That is the spirit of wikipedia. We are here to inform, not to persuade, although that is often subjective. Let the facts speak for themselves. "Credible source X says... On the other hand, credible source Y says"... A good habit to get into. Plus, your language is derogatory needlessly. Comparison social security trustees and actuaries to criminals is a bit much, no? Especially since they are warning about the exact risks the program is facing. They are very direct about the risks the program faces. Read the first 30 pages of their report before you comment here please.Farcaster (talk) 23:59, 16 May 2009 (UTC)

Bob Dole quote

We could include the text regarding Bob Dole's opinion; we should state it as such and put in a counter-argument when we get time. My concern was to cite the source, not the nature of the text or that it is probably not true. I'll review the source over the next few days and see if it is actually what Mr. Dole said.Farcaster (talk) 19:22, 27 January 2011 (UTC)

This text is being reviewed: "The Baby Boomer demographic groups and future demographic groups will be putting as much money via the FICA tax into Social Security as they will be receiving. The generosity of the government to past generations created the projected Social Security deficits. (The kindness of the government to past generations in part was because of the recognition to mothers, as mothers gave up their children to serve and oftentimes die in defense of the country.)" Can the person that placed it there please excerpt the specific text in the source that supports this claim and put it here? I do not see it in the source after a quick scan. It may not be factually accurate and we should specify the source in the body of the article.Farcaster (talk) 19:35, 27 January 2011 (UTC)

-- Another citation: http://www.ssa.gov/history/reports/gspan.html--Cgersten (talk) 00:56, 28 January 2011 (UTC)

Soc Sec as a Ponzi scheme

This is something I brought up on the Ponzi scheme article. Bottomline is that yes, Soc. Sec. is "like" a Ponzi-scheme (it is a Ponzi-scheme for some definition of that term) but unlike what we generally think of as a Ponzi-scheme, it is (at least potentially) sustainable and beneficial to all generations. This is a fairly well covered topic in economics - indeed, it is the classic justification for a government run program like this from economic theory - going back to Paul Samuelson's and Diamond's Overlapping generations model. Some sources: 4:45, [1], [2], [3].Volunteer Marek (talk) 20:20, 23 May 2011 (UTC)

Michael Tanner makes point it's not one because Ponzi schemes collapse when people stop investing but government can force people to keep investing. At some point I might throw that in there. See: Michael D. Tanner, “Social Security, Ponzi Schemes, and the Need for Reform,” Cato Institute Policy Analysis No. 689, November 17, 2011. CarolMooreDC 19:27, 9 January 2012 (UTC)

Three Components

The opening paragraph states that the SS system is base upon three components, but it does not name them. If one goes to the SS trust fund page, there are only two. - KitchM (talk) 22:06, 22 September 2011 (UTC)

The three components of SS (or OASDI) are named in the first paragraph, and those components are: old-age, survivors, and disability. Social Security (or OASDI) provides entitlements to those who qualify by either age, as a survivor, or have suffered a disability. — Preceding unsigned comment added by 76.108.72.238 (talk) 21:29, 28 September 2011 (UTC)

Unclear as written and reference needed

From the article: Between 2015 and 2037, Social Security has the legal authority to draw amounts from other government tax sources besides the payroll tax, to fully fund the program. However, this will liquidate the Trust Fund during that period. ' The use of "this" (grammatically) implies that the drawing of other funds will liquidate the fund by 2037. Is this correct, or will (on the contrary) not drawing from other government funds lead to liquidation by 2037? In either case a reference should be provided.

- Leonard G. (talk) 04:03, 4 December 2011 (UTC)

The whole article is a mess, actually. Did a little fixing cause writing something directly relevant right now, but needs real overhaul to make govt vs privatization discussion less POV and to get rid of a lot of duplicative and argumentative material. Someday. CarolMooreDC 19:29, 9 January 2012 (UTC)

Summary differences

1. FINANCE METHOD. Ponzi Schemes and Social Security are both financed via the cascading transfer of wealth, vice the savings or appreciation of wealth.

2. OBJECTIVE. Ponzi Schemes partipants get involved to get-rich-quick. Social Security was created to help prevent the elderly from being destitute.

3. CHOICE OF PARTICIPATION. Ponzi Scheme participation is voluntary. Social Security participation is legally mandated.

3. SUSTAINABILITY. Ponzi Scheme rates of return are divulged beforehand, based on defined algorithms, which are easily shown to be mathematically unsustainable over time. Participants are ostensibly naive and do not realize they are being defrauded. Social Security rates of return are divulged beforehand, where the long-term participants are told their rates of return will be lowered based on the availability of funds, to ensure some degree of sustainability. Many participants are aware they fall into a category that is unlikely to get their contributions back. Gary84 (talk) 07:37, 17 December 2011 (UTC)

Good points but need references. CarolMooreDC 19:30, 9 January 2012 (UTC)

Apparent conflict in funding during 2011

In the first paragraph it is stated "During 2011, total benefits of $736 billion were paid out versus income (taxes and interest) of $805 billion, a $69 billion annual surplus". in the fourth paragraph it is said "Program payments exceeded program revenues (excluding interest) in 2011". The only difference mentioned between these conflicting statements is the effect of interest. This requires clarification. The effect of interest, and whether or not it really exists may be discussed later, but it raises a question as to the credibility of the article when such an apparent inconsistency in fund viability appears at the beginning. Philip Jones 92.21.224.34 (talk) 18:25, 20 July 2012 (UTC)

Updated to clarify the latter reference is to cash receipts, which excludes interest.Farcaster (talk) 23:57, 20 July 2012 (UTC)

President Bush Fiscal Reform Commission

I am confused why this section is listed under the President Bush, and actually has a date AFTER Obama's section.

On February 18, 2010, President Obama issued an executive order mandating the creation of the bipartisan National Commission on Fiscal Responsibility and Reform,[10] which had the goal to “[e]nsure lasting Social Security solvency, prevent the projected 22% cuts to come in 2037, reduce elderly poverty, and distribute the burden fairly.”[70] The co-chairmen of the National Commission on Fiscal Responsibility and Reform published their final report in December 2010.[71] The co-chairmen estimated the effects of alternative solutions, along with an estimated program deficit reduction:

   Raising the payroll tax cap to cover 90% of earnings: 35%
   Indexing retirement age to life expectancy: 21%
   Adjusting the COLA formula to reflect chained CPI (e.g., reduce the COLA): 26%[72]

In addition, the final report proposed the steps to ensure the sustainability of Social Security, such as:[11]

   “[M]andat[ing] coverage for all state and local workers newly hired after 2020” to “simplify retirement planning and benefit coordination for workers who spend part of their career working in state and local governments, and will ensure that all workers, regardless of employer, will retire with a secure and predictable benefit check”;[73]
   Educating future retirees about “the full implications of various retirement decisions, with an eye toward encouraging delayed retirement and enhanced levels of retirement savings”;[74] and
   Enhancing dialogue regarding the importance of personal retirement savings and responsibility, including a focus reducing personal debt and increasing personal assets.[75]  — Preceding unsigned comment added by 132.183.13.16 (talk) 17:19, 5 August 2013 (UTC) 

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Mention people who it is too hard to build the 40 credits needed

Mention people who it is too hard to build the 40 credits needed. Jidanni (talk) 07:25, 8 August 2022 (UTC)

Update needed

"Due to interest, the Trust Fund will continue increasing through the end of 2020"

It's 2023... 2600:1702:6D0:5160:7546:204:5586:A662 (talk) 16:50, 19 August 2023 (UTC)

Leninist strategy

n.145 seems to be a dead link. I believe this is the relevant document.Shtove (talk) 17:15, 22 August 2023 (UTC)