Social Security strained to the limit: Democrats cheer

Big job losses, early retirements and SSA finds itself suddenly paying out more in a year than it collects. Trust me folks this is just a preview of coming attractions. It’s only going to get worse as the baby boomers flood the system. And before you sneer at the boomers, know this … these are the “kids” who have been supporting SS benefits for decades as Congress (as they did last week), in an attempt to buy votes, generously raised benefits to unsupportable levels.

The deficits – $10 billion in 2010 and $9 billion in 2011 – won’t affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.

Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn’t expect the increase to be so large.

I know … you must think it’s Bush’s fault. But think back to 2004 and 2005 when George Bush begged Congress to enact Social Security reform. Personal retirement accounts for a portion of social security contributions. Congress couldn’t get the votes it needed in either the House or Senate and the Democrats cheered. Nice move.


If I were the Republicans I would be playing this a lot next year

Competition in health care? How about everywhere else too?

I’ve been thinking about this over the weekend, and AJ over at Strata-Sphere posted the same this morning. If competition is good for health care – so much so we need a “public” option – how about competition in public schools (vouchers) and for Social Security (private accounts)?

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Social Security expecting no cost of living increase for two years

What the government gives, they can quickly take away. Last night senior citizens in the United States learned an important lesson; if there is no inflation, their Social Security payments stay the same as last year.

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Social Security Administration spends $700,000 on empowerment conference Update: Video added

Yup, just another symptom of the disease. It was imperative that all 675 managers meet in person at the Arizona Biltmore – part of the Waldorf Astoria Collection.

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Congress wants your 401(k) tax breaks back

This is unbelievable. Since Congress has totally screwed up Social Security and refuse to do a damn thing about it, now they are looking for more cash to fund their out-of-control spending. Since we know we can not depend on Social Security for our retirement, many smart investors are depending on 401(k) accounts, IRAs and Roth IRAs.

Author note: While I’m away from the computer, I’m republishing my top 20 posts from 2008 each afternoon. -Steve

All three offer tax breaks either now or in the future and get this, a couple of Democrats don’t think they are getting enough for their investment. Their investment? They have the gall to think that $80 million in tax breaks provided to 401k investors is an investment. It’s our damn money!

Hat tip goes to LGF for this one, and here is the original article in Workforce Week. My emphasis added in bold.

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

Under Ghilarducci’s [Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York] plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”

Under the current 401(k) system, investors are charged relatively high retail fees, Ghilarducci said.

“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.

It’s not your damn money to spend Ghilarducci.

The savings rate isn’t going up for the investment of $80 billion,” he [House Education and Labor Committee Chairman George Miller, D-Calif.] said. “We have to start to think about … whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”

These politicians want to get their hands on your personal retirement accounts. This is money invested – 100 percent – by you and in many cases your employer. Since tax breaks are involved and the damn politicians need more money from you to give to others and spread the wealth, they clearly are considering just taking it from you.

If the tax breaks go away, employers will stop their contributions and many employees will stop investing their own money, but that’s OK, since the government will demand you invest 5 percent into government bonds administered by the Social Security Administration.

Are you kidding me?

Just wait. Do you think your Roth IRA investments will be safe from government hacks that think you don’t deserve to keep your own money? The return on your Roth IRA investments are currently 100 percent tax free, but I guaranty you that liberals will want to tax that money in the future since people will have invested and “gained more than their fair share” in the stock market.

Hot Air just posted, and James Pethokoukis at US News uses the socialism word. Watch out, you might be called racist.

Vicevich has it too.

Throw all the bums out!

Bush plan to privatize Social Security still a good idea

There has been plenty of talk about how a significant chunk of retirement funds have disappeared during the past month or so, but that does not mean that we should not consider moving towards getting government out of the retirement funding business.

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If you think $700 billion is nuts, wait for the Social Security rescue plan

I’ve been thinking about the bailout again. I’ve been busy, it makes me mad, so I write a little about it and leave it at that. Now I’m thinking about the next government emergency bailout – Social Security.

It will come up on us quickly. It will be a crisis. We may only have days to respond. Congress will be forced into immediate action. If you think $700 billion was a crap sandwich, what do you call a $6.5 trillion dollar emergency bailout? A crap Las Vegas-style buffet?

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