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Coming recession to the USA and world.
Texan77:
We have less than 2.5 workers for everyone on Social Security and Medi care. It is impossible to pay our rate of retirement and medical benefits with such a ratio. This problem has been 60 years in the making and has been known about for at least the last 50 years. Americans would not vote for anyone who wanted to fix it so here we are. Truth be told this has happened in every advance country in the world not just the USA. Most advance countries have a worse ratio than the USA. I do not know what is going to happen, but it is not going to be pretty. It is going to be a global problem not just a USA problem. Try running for president of the USA and say I am going to cut Medi Care and Socia Security Benefits. Trump claimed he would not cut these benefits. We might make the next four years, or we might not. It cannot keep going much longer than that. SSI and Medi care make up over 50 per cent of our national budget.
Contrarian:
--- Quote from: Texan77 on December 13, 2024, 11:08:26 PM ---We have less than 2.5 workers for everyone on Social Security and Medi care. It is impossible to pay our rate of retirement and medical benefits with such a ratio. This problem has been 60 years in the making and has been known about for at least the last 50 years. Americans would not vote for anyone who wanted to fix it so here we are. Truth be told this has happened in every advance country in the world not just the USA. Most advance countries have a worse ratio than the USA. I do not know what is going to happen, but it is not going to be pretty. It is going to be a global problem not just a USA problem. Try running for president of the USA and say I am going to cut Medi Care and Socia Security Benefits. Trump claimed he would not cut these benefits. We might make the next four years, or we might not. It cannot keep going much longer than that. SSI and Medi care make up over 50 per cent of our national budget.
--- End quote ---
Some people have enough common sense to know that Social Security has already been cut, by high inflation.
What the government claims the rate of inflation is and what it really is are two different things.
Manny:
I was doing some work with GPT on another screen. Out of curiosity, I plugged Tex's post into it and asked if it was accurate. That GPT is a clever thing. here's the reply, you chaps can suggest how accurate (or biased?) it is:
Your post raises some valid concerns about the sustainability of Social Security and Medicare, but there are a few points worth clarifying or expanding on.
Worker-to-Beneficiary Ratio:
You're correct that the worker-to-beneficiary ratio has been declining, but the "less than 2.5 workers" figure needs context. According to the Social Security Administration, the current ratio is about 2.8 workers per beneficiary, and it is projected to drop below 2.3 by 2035. While this trend is concerning, reforms could address this imbalance, such as adjusting payroll taxes, raising the retirement age, or altering benefit formulas.
Global Comparisons:
You mention that most advanced countries have worse ratios, but that's not entirely accurate. Many countries, especially in Europe, have implemented reforms over the years, such as higher retirement ages, means-testing benefits, and mandatory private savings schemes. These measures have helped mitigate the challenges of ageing populations to some extent. The U.S. has been slower to act, which exacerbates the issue.
Political Will for Reform:
While you’re right that proposing cuts to Social Security or Medicare is political suicide in the U.S., reform doesn’t have to mean "cuts." Options like expanding the payroll tax base (e.g., taxing incomes above the current cap) or introducing phased adjustments to benefits for higher earners have been floated as less drastic solutions. These changes wouldn’t necessarily mean cutting benefits for everyone.
Spending Context:
You note that Social Security and Medicare make up over 50% of the national budget. This is true when combined with other mandatory spending programs, but it’s important to note that this is based on long-term promises to retirees, funded primarily by payroll taxes and trust funds. Unlike discretionary spending, this is money Americans have largely paid into. Additionally, the rising cost of healthcare — not just demographic shifts — is a major driver of Medicare's financial challenges.
Outlook:
While it’s true that Social Security’s trust fund is projected to run out by the mid-2030s, this doesn’t mean the system will go bankrupt. Even if no reforms are made, payroll taxes would still cover about 75-80% of promised benefits. Similarly, Medicare’s issues are more tied to healthcare inflation, which requires a broader reform of the healthcare system.
In summary, while the challenges you outline are real, there’s more nuance to the situation. Sensible reforms, better fiscal planning, and modernizing systems can mitigate these issues without necessarily leading to the grim outcomes you suggest. It's a tough road ahead, but it’s not as hopeless as it might seem.
Contrarian:
--- Quote from: Manny on December 16, 2024, 06:38:32 AM ---I was doing some work with GPT on another screen. Out of curiosity, I plugged Tex's post into it and asked if it was accurate. That GPT is a clever thing. here's the reply, you chaps can suggest how accurate (or biased?) it is:
Your post raises some valid concerns about the sustainability of Social Security and Medicare, but there are a few points worth clarifying or expanding on.
Worker-to-Beneficiary Ratio:
You're correct that the worker-to-beneficiary ratio has been declining, but the "less than 2.5 workers" figure needs context. According to the Social Security Administration, the current ratio is about 2.8 workers per beneficiary, and it is projected to drop below 2.3 by 2035. While this trend is concerning, reforms could address this imbalance, such as adjusting payroll taxes, raising the retirement age, or altering benefit formulas.
Global Comparisons:
You mention that most advanced countries have worse ratios, but that's not entirely accurate. Many countries, especially in Europe, have implemented reforms over the years, such as higher retirement ages, means-testing benefits, and mandatory private savings schemes. These measures have helped mitigate the challenges of ageing populations to some extent. The U.S. has been slower to act, which exacerbates the issue.
Political Will for Reform:
While you’re right that proposing cuts to Social Security or Medicare is political suicide in the U.S., reform doesn’t have to mean "cuts." Options like expanding the payroll tax base (e.g., taxing incomes above the current cap) or introducing phased adjustments to benefits for higher earners have been floated as less drastic solutions. These changes wouldn’t necessarily mean cutting benefits for everyone.
Spending Context:
You note that Social Security and Medicare make up over 50% of the national budget. This is true when combined with other mandatory spending programs, but it’s important to note that this is based on long-term promises to retirees, funded primarily by payroll taxes and trust funds. Unlike discretionary spending, this is money Americans have largely paid into. Additionally, the rising cost of healthcare — not just demographic shifts — is a major driver of Medicare's financial challenges.
Outlook:
While it’s true that Social Security’s trust fund is projected to run out by the mid-2030s, this doesn’t mean the system will go bankrupt. Even if no reforms are made, payroll taxes would still cover about 75-80% of promised benefits. Similarly, Medicare’s issues are more tied to healthcare inflation, which requires a broader reform of the healthcare system.
In summary, while the challenges you outline are real, there’s more nuance to the situation. Sensible reforms, better fiscal planning, and modernizing systems can mitigate these issues without necessarily leading to the grim outcomes you suggest. It's a tough road ahead, but it’s not as hopeless as it might seem.
--- End quote ---
You have forgotten inflation. I have come to the conclusion that this is the number one way the US deals with this problem.
Jonas!:
If we want to keep SS at the current levels, we can start by raising the cap for higher earners. Always seemed like a no brainer to me, but it never happens. For 2025 the cap is 176K. Money earned over this amount is not subject to SS withholding. If the wealthiest of earners can contribute more, or we can raise the percentage withheld for all earners, or maybe a little of both.
We also have millions of illegals working off the books. I know some work on the books too, often using a fake SS number, they aren't going to be able to collect later. There has to be a compromise made by all. We need more contributors to SS to get past the large group of baby boomers now collecting. Gen X isn't as big and maybe that will offer relief but that won't be felt for decades because many boomers may live to a ripe old age collecting all along the way.
Jonas!
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