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Online Social Security Statement In Limbo
coondoggie writes "While the debate over Social Security benefits is heating up in Congress, one of the most basic ways everyone interacts with the agency — the yearly Social Security Statement — is in limbo as the agency struggles to move it online. The Social Security Statement had been issued every year since 2000 to more than 150 million workers serving as the government's key way of communicating with workers about benefits, earnings records and how much retirement money they have. The statement is also a key tool for communicating with the public about the long-term financial challenges the Social Security system faces. However, whether you realize it or not, the SSA suspended mailings of the statement in March citing budgetary concerns."
My grandma calls websites "double-u double-u double-u's". There's no frigging way that she could handle something like this online.
I will gladly pay $1 in taxes each year to pay for them to print and mail a statement.
I've seen the accounting for such things in a number of corporations, and none of them could send out statements at a cost of under $1, so I doubt that the SSA can achieve such a cheap mailing, either.
There are a lot more costs than the paper and postage. This is the reason for the inexorable move to electronic statements. It's far cheaper to move a flock of electrons or photons than it is to move the equivalent pieces of paper. Electrons and photons are much better behaved than pieces of paper, so it can mostly be handled by the computers and comm gear, without human hands getting involved. You'd be surprised at how difficult it is to fully automate paper communications.
(Unless you've done it, of course, in which case you know most of the zillions of ways that pieces of paper -- and the moving parts that push them around -- can screw things up. ;-)
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
In normal years, they could afford it, but the economy made it so they took in $40 billion less than they paid out last year. They expect a similar shortfall this year. This isn't bad, as the trust fund is coming REALLY close to $2 trillion, but they don't want to borrow more than they have to from interest or the general fund (I'm thinking borrow from the general fund is out right now). Basically, they're looking right down the barrel of a HUGE payout of trust fund as the baby boom retires in the next five to ten years, and don't want to take anything for granted.
Just because you're paranoid doesn't mean they aren't out to get you
Maybe you should read one of those statements they mail, or just do some reading online. Social Security in its current state will never "collapse" because it is funded by taxes. It has taxes collected just for it, from every paycheck. As such, so long as there are people working in America, it has a revenue stream.
The problem is not a collapse, the problem is that they will not be able to pay out promised benefits. Currently the SSA takes in less money than they need to pay out for benefits. In the short term, that is ok, they have a large fund which is used to fund the difference. However the difference is quite large, and nothing is being done to fix the problem. That means at some point the fund will be depleted (when depends on a lot of factors, you can look up the various estimates). When that happens, they can't pay out the promised benefits, only a fraction of them, maybe 70% currently.
It is a big problem, particularly since many people depend on social security to not be homeless in old age. However it will not "collapse."
In terms of suspending mailings, well it probably saves more than you think. It isn't just postage, it is printing costs. No, it doesn't cost a lot to print a couple page flyer. Does cost a bit to print a hundred million of them though.
Given that they are spending out more than they take in, it makes sense to cut where it is feasible. This would be a potential area.
I will gladly pay $1 in taxes each year to pay for them to print and mail a statement.
I've seen the accounting for such things in a number of corporations, and none of them could send out statements at a cost of under $1, so I doubt that the SSA can achieve such a cheap mailing, either.
One word. Franking. It helps when you're part of the entity that charges the postage...
Just because you're paranoid doesn't mean they aren't out to get you
In a former job around 6-7 years ago, I worked for a major university that received a lot of state and federal grants, many of which were from the SSA and which included provisions about operating web sites on behalf of the SSA. These were not complex web sites, but they were totally clueless (as was everyone from the SSA that I ever dealt with, though in fairness we only dealt with two or three specific branches). We would get phone calls at 6AM demanding that we remove the SSA logo from a web site that we had done on their behalf, and then a phone call four hours later demanding that we put it back.
Even by government standards, these people had terrible attitudes. Every meeting with them began and ended with the SSA having the attitude that they were performing the most vital government service in existence, and therefore they knew everything about how it should be done -- not necessarily a bad position, but by definition not a terribly logical one if you are hiring outside groups to do certain jobs for you.
The paper statements they send out are a hoot, too. They have a little insert that says something to the effect of 'I've heard that Social Security will be insolvent by the year 20xx (usually around 2030). Will I stop receiving payments?'
'No! Social security will continue to operate as normal. If Congress does not authorize additional funding, you can expect to receive seventy cents on the dollar.'
Their definition of 'insolvent' must be 'nobody receives anything,' but I can lose 30% of what I'm 'owed' without government assistance.
One problem here that not many people know about is that the "trust fund" isn't an actual account with actual money in it.
It's basically just a stack of IOUs from the Treasury dept stating that they will pay that amount when the SSA requests it, but if future government revenues or budgets are not conducive to that money being available from Treasury, it could be hard for them to get it.
One problem here that not many people know about is that the "trust fund" isn't an actual account with actual money in it.
Sure it is. You might as well argue that your bank account has no money in it because they loaned it out, or that any retirement fund with stocks, bonds, or T-bills in it doesn't have any money in the account.
All accounts run like that. "Your" money isn't there. It's in some IOU form. Unless you have your retirement account stashed under the bed, you do exactly what you condemn.
Learn to love Alaska
The difference is that the social security trust fund *is* the federal government. The federal government lent all the money in the social security trust fund to itself, and then it spent the money. A bank would have lent the money to various third parties who would pay it back. The federal government has to pay the money back through tax revenue (or more borrowing). That's a pretty big difference. If a bank lent its deposits to its officers, and then the officers spent the money, all the bank's officers would be in jail right now. An IOU written to yourself is not an asset. The social security trust fund is insolvent. All the money being paid out has to come from taxes, borrowing, or printing money.
One problem here is that people posting things like the above don't know what an "actual account" is, since that's exactly what an actual account (e.g., at a bank) is.
You seem to have "account" confused with "safety deposit box".
anyone doubting this should just look at a somewhat aged copy machine. in order to grip paper the rollers need to be soft, but they wear out and start slipping, paper leaves little pits of paper dust which accumulates and further renders gripping surfaces sticky, sometimes moisture will make paper stick together, sometimes there is no moisture and the paper just sticks together anyways because fuck you, usually when there is a jam it is detected and the process stops, every once in a while the jam keeps piling up and jams in so much paper that the backup gets to a spot where a sensor detects it and many pages are ruined, because fuck you.
and that is assuming that you have no toner explosions from shitty HP toner carts making all your prints and copies from the brand new $7000 multifunction piece of shit (which manages to underperform all of the aging and decrepit equipment in the office in speed, reliability, serviceability and image quality) look like they are covered in snot or bile.
Snowden and Manning are heroes.
This is all about politics and scaring older voters.
Except that that's not true. Uh, no, the most recent trustees report shows, under the intermediate assumptions that the trust fund will be exhausted in 2036, allowing only 77% of authorized benefits to be paid at that time. That gradually worsens to 74% by 2085, which is the end of the projection period; the projection has it worsening at the end of that period, but at a slower rate as you get farther down the line.
Actually, it needs reform on the revenue side; one of the reasons its out of balance in the long term is that social security taxes were set on wages only with the expectation that wages would, over the long-term, bear a stable relation to total income (or at least total income from labor); that assumption has not worked out, as wages represent a declining share of labor income, with a greater share made through fringe benefits which are not subject to Social Security taxes; simply rearranging Social Security taxes to reduce the rates but include fringe benefits, in a manner that was revenue neutral in the short term, would greatly improve long-term balance.
China has a lot of those too, they're called bonds. American citizens buy those too. So do American companies.
What would you like them to do with the money? Tuck it away under the mattress of the Treasury Secretary?
The SSA has been making a large push to direct deposit. I am sure this is saving them far more than the statements that they have been mailing every few years.
This is like every other government "shutdown", shutting down the most noticeable parts of the government to get attention even if it makes no sense. For example, out of all the things to be shut down in a state/local government shutdown it generally won't be the things actually costing the most money, but highly visible things like state parks, or trash service all the while the things that caused the budget to be in a mess are still continuing.
Taxation is legalized theft, no more, no less.
By that logic I have a trillion dollars - I have IOUs from myself worth that much. I also have a trillion Zimbabwe dollars on my desk.
The IOUs have to be from some other credible counter-party to be taken seriously.
It's awfully easy to say "boo freaking hoo" about someone else's money, isn't it? After all, if they have that income level, there's a good chance they may not need to rely on social security to retire (though I suppose that depends on what region of the country they live in). So forcing them to continue to chip into this scheme only serves to benefit everyone else. Hell, why not ask them to chip in at a *higher* rate than everyone else? Why not double? Why not triple? Why not just tell them that $50k is good enough and everything over that should be given to the old people down the street that never bothered to save a dime for retirement, because they believed social security was going to take care of them, because that's what "the government" told them?
Sorry, but you are out of your mind if you think it costs $3 to $10 to produce and stuff and address that statement.
We do such mailings all the time for far, far less. And in THAT type of volume, with automation, the actual costs is well below $1.
Even our Xerox printer/copers at a measly 70ppm, ACTUAL COSTS, including the tabloid paper, would be about $0.03 per statement. Envelope and stuff for another $0.05. Address it for another $0.01 or so. I am guessing the actual costs of their statements, ready to mail, are in the $0.10 to $0.15 range.
There is NO WAY they are going to maintain a website design, and database, and hardware, and electricity, and ISP, AND SUPPORT THE MILLIONS OF LOGINS and HUNDREDS OF THOUSANDS OF CONFUSED elderly for less than their simple annual mailing. No way.
At one time, the trust fund *did* have money in it (yes, the electronic information that we call money), but was looted and replaced with securities, which are NOT money. There is a huge dangerous difference.
if the social security system either starts paying out an amount insufficient for purchase of anything useful, or starts paying out the equivalent of hyperinflated Zimbabwe notes, unsuitable and insufficient for purchase of anything, it can be accurately said to have collapsed. You also assume unemployment can not rise so high that government revenue is essentially zero for any practical purpose. We, the USA, are headed to both those problems on an ever accelerating train.
Anyone up for retirement more than ten years out better have arranged their own finances.
you want to see pitchforks and torches? wait till the boomers retire and are told there is no money (or not enough) in the kitty.
if anything will cause a rebellion, THIS would be it. people HAVE paid into the fund and they do have a right to expect a payback after working 3/4 of their lives.
maybe if we had less wars (...) we'd be able to support OUR OWN FRIGGIN PEOPLE.
we all will retire. this affects us all.
I'm tired of stealing from our own people to line pockets of the aristocracy.
they better hope there is money in the fund. even old guys can put up a fight if they are pushed to poverty.
--
"It is now safe to switch off your computer."
You might as well argue that your bank account has no money in it because they loaned it out ...
A person might make that argument and that person would be correct. That's why when there are runs on banks the banks fail. That's why we have FDIC insurance where the government guarantees your account, because the money is not in the bank.
Hmm. Fortunately most of us boomers were too stupid to save any money, so they can't afford to retire for another 10 or 20 years. That should actually help out SS.
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
Anyone up for retirement more than ten years out better have arranged their own finances.
Although I enjoy cranky anti-government fantasies too, it's better to stay closer to reality. The Republicans are beating this anti-Social Security line because they want to say, "Social Security isn't going to be there for you, so let's end it and save you all those tax deductions" (which are the lowest in the developed world).
http://krugman.blogs.nytimes.com/2011/03/13/cockroach-ideas/
Conscience of a Liberal
Cockroach Ideas
By PAUL KRUGMAN
March 13, 2011, 12:57 pm
“the Social Security trust fund doesn’t exist”
If Ronald Reagan had said, back in the 1980s, “Let’s increase a regressive tax that falls mainly on the working class, while cutting taxes that fall mainly on much richer people,” he would have faced a political firestorm. But because the increase in the regressive payroll tax was recommended by the Greenspan Commission to support Social Security, it was politically in a different box – you might even call it a lockbox – from Reagan’s tax cuts.
Their answer to the pretty good numbers is to say that the trust fund is meaningless, because it’s invested in U.S. government bonds. They aren’t really saying that government bonds are worthless; their point is that the whole notion of a separate budget for Social Security is a fiction.
But there are two problems with their position.
The lesser problem is that if you say that there is no link between the payroll tax and future Social Security benefits – which is what denying the reality of the trust fund amounts to – then Greenspan and company pulled a fast one back in the 1980s: they sold a regressive tax switch, raising taxes on workers while cutting them on the wealthy, on false pretenses. More broadly, we’re breaking a major promise if we now, after 20 years of high payroll taxes to pay for Social Security’s future, declare that it was all a little joke on the public.
The bigger problem for those who want to see a crisis in Social Security’s future is this: if Social Security is just part of the federal budget, with no budget or trust fund of its own, then, well, it’s just part of the federal budget: there can’t be a Social Security crisis.
We can't accurate project what future government revenues or budgets will look like.
However, if it gets to the point where the US government can't honor that debt it means the entire country is really, really screwed anyway. So much so that SS solvency will be one of more minor problems of the day.
When information is power, privacy is freedom.
Anyone up for retirement more than ten years out better have arranged their own finances.you want to see pitchforks and torches? wait till the boomers retire and are told there is no money (or not enough) in the kitty. if anything will cause a rebellion, THIS would be it. people HAVE paid into the fund and they do have a right to expect a payback after working 3/4 of their lives. maybe if we had less wars (...) we'd be able to support OUR OWN FRIGGIN PEOPLE. we all will retire. this affects us all. I'm tired of stealing from our own people to line pockets of the aristocracy. they better hope there is money in the fund. even old guys can put up a fight if they are pushed to poverty.
The smartest thing this government could do is to stop taking taxes out of the people closest to retirement, less than 20 years out but we all know that isn't going to happen anywhere this side of year 2511. The fact that this government would rather see people about to retire, die is more likely.
It's time for these politicians to live like the majority of the population, no job, no health-care, no house, no pension after 35 of saving, then, maybe, they will get it.
The mind conceives, the body achieves, the spirit manifests.
Since you are too lazy to do a web search (Google: tax rate revenues), the seventh hit has an article on exactly this topic: http://www.heritage.org/research/reports/2003/08/the-historical-lessons-of-lower-tax-rates Careful before you jump to polemics about it. President Kennedy is quoted: "the soundest way to raise the revenues in the long run is to cut the rates now." Bottom line: Every time tax RATES were lowered in the 20th century, tax REVENUE increased.
NON-geek Linux user since 1998
No, it is NOT an account.
First, the courts have already ruled on this. According to the Supreme court, the federal government gets to decide each year whether it will pay-out to social security recipients and how much to pay. There is nothing other than public outrage that forces the Federal govt to pay you anything from social security when you retire (they ARE required to pay things like retirement packages of retired govt employees)
Second, if that was an actual account, then why do you not have a PIN number????? (Hint: it's not actually your money, and there is not any actual money there)
Third, IF it is an actual account and IF you own it, then why do your heirs not get to inherit it?
Except the entity who issued the bonds in this case is also the one paying the value plus interest. Therefore, you need the thousand dollars in the other jar to pay for the securities, and then you have to find money elsewhere to pay the interest on those thousand dollar securities. Assuming that, unlike the government, you haven't already spent the thousand dollars in the jar.
The Lie that is social security is that you are somehow entitled to the promised benefits. That was always incorrect as anyone can see: you are entitled to amount of promised benefits that the American people can and are willing to afford. No more. So stop thinking there is a some sort of cosmic unity involved in the baby boomers getting their benefits. There isn't, there never was, and there never will be.
Maybe define tiny. Military expenditures in 2010 were about $650 billion. Social Security payments were about $700 billion. So 1/2 of the military budget would seem to cover a tiny 1/2 of the social security outlay.
Linky:
http://en.wikipedia.org/wiki/2010_United_States_federal_budget
(I realize that the $700 billion present day outlay doesn't really speak to the future obligations, but you have the appearance of just making things up)
Nerd rage is the funniest rage.
Paul Krugman is a Nobel prize-winning economist and an economics professor at Princeton. You ought to consider the possibility that he understands this better than you do.
Don't you realize? No-one under 30 expects to see anything from it. To them it's just another tax with no hope of return.
That's because the Republicans and their right-wing think tanks have conned them in to believing this nonsense.
A bunch of billionaires don't want to pay taxes so they're coming up with this con to convince *everybody* not to pay taxes -- and lose the benefits of government. The Koch brothers on their guarded estates don't need government, but the rest of us do.
If they can convince enough of you, it will be a self-fulfilling prophecy.
Given that, make it official - declare we are paying in to help those in the system now, but it ends with them and we start doing something sane where we sock away money per person, for that person-
Yes, that's step 2 of the Republican plan -- convince you that Social Security will never pay out, so we should destroy it.
You can't buy an annuity on the free market that will pay as well as Social Security. Overall, people can't invest their money in the free market as safely as they can invest in Social Security. Look at all the people who lost their life savings in the technology bubble. Look at all the people who lost their life savings in the real estate bubble. Look at the people who lost half their life savings in the stock market crash, even when they invested in the safest stocks.
Do you think you're smarter than them?
Why don't you put your life savings in your back pocket, fly to Monaco, go to the roulette wheel, and put everything on black? That's what you want us all to do. Under some scenarios, people will do better in a no-load mutual fund, but under other (real) scenarios, they'll lose their shirt. It's even riskier if you try to beat the no-load mutual funds, and try to be clever.
with some extra taken to help the truly needy.
Look at the way these same conservatives are cutting taxes and the social safety net to help the "truly needy". Instead of getting Social Security as a right, you want a government bureaucrat to decide whether we're "truly needy".
Is it really a promise broken if everyone knew you were lying to start with?
Most people, at least those I have talked to, have very little understanding of the accounting fiction that is known as the Social Security trust fund.
Do you think Paul Krugman, the Nobel economics laureate and Princeton economics professor, understands economics?
They don't realize all those taxes are spent immediately, rather than being saved for the future.
Since the taxes are exchanged by securities that are both held by and issued by the same entity, I like to use this example: The Social Security trust fund amounts to taking a dollar from your right pocket and an IOU written to yourself from the left, exchanging pockets, then spending the dollar.
Since at least the renaissance, accountants realized that if you put your savings in gold and hid it under the mattress, you would actually lose money compared to what you would make if you loaned it out for even the safest investments, over the long run.
Accountants also understand internal transfers. The advertising department of GE advertises washing machines, and they bill the washing machine division of GE as an internal transfer. Or they could spin off the advertising department into an independent advertising agency, as companies sometimes do, and bill them as an external payment. They would have essentially the same obligations in either case. The IOUs help GE's accountants track how much money each division is spending on advertising, so they can charge each division appropriately for the advertising (pay the IOUs).
The advertising department is GE's left pocket. The washing machine division is GE's right pocket. What's the problem with GE transferring money from its right pocket to its left pocket?
The Social Security trust fund is an intergenerational transfer. The government provides free education for children, which is a transfer from the old (the left pocket) to the young (the right pocket). Social Security is a transfer from the young (the right pocket) to the old (the left pocket).
Social Security is also a transfer to young people with elderly parents. Having to care for elderly parents can be a great burden, and before Social Security, it was even worse. Even today, people caring for elderly parents can have their savings (and inheritance) wiped out. Social Security cushions you against that risk. So you don't have the burden of caring for your parents who invested with Bernie Madoff. Social
You claim that the IOU amounts to savings, because it is owed to you, but omit the fact that it's also a debt because you are the one liable for payment of that IOU. So the books say you have a dollar, but when the time comes to pay, you have to come up with money from somewhere else in order to actually make good.
It's not a savings, it's a generational transfer fund with some components of savings.
They don't need savings at all, but some people want to pay now rather than later. The Republicans under Ronald Reagan insisted on putting (some of) it in a lockbox, so we put it in a lockbox.
Do you want the Social Security Administration to take everybody's FICA payments and put them in a vault, like Scrooge McDuck's money bin? As accountants realized in the renaissance, instead of leaving the money in a vault, you can use it for safe investments. Having one government department lending money to another, as private companies like GE do, is one of the safest investments they can get. Rather than selling Treasury bonds to the Chinese, they sell Treasury bonds to the Social Security trust fund.
The US is living beyond its means. Eventually, something has to give. Politicians rarely get elected by telling the truth though, since the average voter is too stupid to be able to handle it readily. They just get mad and throw gasoline onto the fire that is current partisan politics.
The US
Assuming it is valid, there is nothing to say it is symmetric and the article you linked to supports the curve being around 70%. So following the Laffer Curve, we need to raise taxes up quiet a bit to reach that point.
From the article: "in other words, that raising taxes would raise further revenue"
Spelling and Grammar errors have been added to this post for your enjoyment
Nonsense. The military consumes a literally infinitely greater share of income tax receipts and borrowing. Social Security is funded by a separate, earmarked tax and has run a surplus every year since it began over 75 years ago. In the most recent fiscal year, expenditures were $712.5B, while income was $781.1B, with the difference $68.6B being taken by the general fund in exchange for non-marketable US bonds. (This system was a Reagan-era fraud. The Social Security Trust Fund is now the largest single creditor of the US Government, holding over $2.5 trillion in US bonds.) One could say that nearly a third of this 68 billion-dollar surplus went just to providing air-conditioning for the coddled invaders of Iraq and Afghanistan, or that about 5 times this surplus was consumed yearly by increases in military spending since 2000.
The military budget has expanded from about $390B to over $700B in level dollars since 2000, and that amount is drastically understated due to the vast increases in debt and obligations for support of veterans which we have undertaken due to the fruitless wars in Iraq and Afghanistan. Social Security is just as it appears on the budget - but with all the expenditures liable to income tax, then most to sales tax, and virtually all staying in the domestic economy. It is paid for disproportionately by people who are not rich - no one pays any SS tax over about $100K in income. For those making under $10-12 dollars per hour, (more than half of all working-age people, when all the ~40% non-employed are taken into account) it is a bigger burden than income tax. The excess Social Security tax is appropriated by the general fund, then given to bankers who borrow for less than nothing (considering inflation) from the Fed and buy US bonds, pocketing the interest paid, and to parasitic war profiteers who feed on the "defense" budget.
"Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?" - Patrick Henry