The Nero of Social Security

 

BIDEN WON BIG AMONG DEMOCRATS WHEN HE TAUNTED Rs AS WANTING TO TAKE  AWAY SOCIAL SECURITY.  Now nobody will talk about it.  He may go down in history as the guy who, like Nero, fiddled as Social Security burned. Charles Blahous of George Mason U. and former Deputy Dir. Of  National Economic Council as well as the CBO are warning that SS and MC will both go insolvent by 2033.  It’s not that there is a real SS trust fund, it’s just that the curve of funding dies out faster while number of recipients continues to rise. It’s simple math. There will be 2.14 workers per SS recipient by 2050 implying a required FICA taxof over 30% to make the entitlement whole.  OR raid general revenues of income taxes for so much money there won’t be any discretionary spending.  It will all be eaten by entitlements and interest on the debt. No funding for defense.  Better learn Mandarin Chinese.

            Ds for a long time have thought that they could just raise the threshold age or raise the amount of earnings subject to SS tax.  Raise the threshold age to about 77 and upper limit on FICA withholding to $1 million.  Nor do the Ds want to be the one party responsible for this.  Rs must be made to share the blame. Only 5% of people make more than the max tax.  That’s not enough people to get significant funds from.

            I was born under Truman, remember Medicare and Medicaid passing and was in college in the 1960s-70s. First I wanted to be a teacher, then a physicist. Physicists are like monks.  You have to take vows of chastity and poverty. So I concluded that when I got to retirement age there probably wasn’t going to be anything for me. And thus endeavored early on, to make some side money and now after 50+ years of work, have what looks like a fortune (to me).  It will feed me in my old age rather than make me dependent on the Nero government. The SS I once put in amounts to about 1.5% return over my 40-year working life.  That amount, invested at 6% would generate 5 times as much. In W. Bush’s 2004 campaign he ran on fixing SS and proposed that 20% of your FICA tax be put in a 401K-type account, payable at age 65. The rest stayed in present plan. That would have dead flat fixed it. But even R’s in Congress and the majority of people balked. Dems went ballistic and nothing got passed. The 3^rd rail, they scorned him. That same kind of fix today would require 50% of your FICA and work-until-70 to make the system come out equal.

            Meanwhile I’m a rare duck with my savings.  But it just makes me sad.  Half the people live to be 65. Of those who take SS, ¼ are living on SS only. Start counting a room of gray heads.  Every 4^th one has nothing but SS. This is a tragedy that could have been avoided.  As the Psalmist wrote, “Trust not in princes, they are but  mortal.”