As a public insurance program, Social Security is a complex system. Of course, her rationale applies a different definition of solvency, and assumes that time value of money is non-existent. This unfortunate myth leads to great confusion as to what constitutes a "fair" reform of Social Security. 2: Meeting Social Security's future shortfall is really hard We only need to come up with about 0.9% of GDP in order to make Social Security's revenues match … Concerns about the program’s solvency are common. While the Social Security trust fund can always be financed in nominal terms it does not mean it is a good trade-off if it is causing a decline in living standards in real terms. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." We need to improve the future solvency of Social Security, but Congress should not force those who can least afford it to bear most of the burden. Ms. Weston’s article provides a succinct recap of how Social Security funding works, and explains the reality of the looming solvency issue. There is a classic exchange between former Fed Chairman Alan Greenspan and Paul Ryan on YouTube regarding Social Security “solvency” from a 2005 Budget Committee hearing, where Greenspan comes right out and states: “I wouldn’t say the pay-as-you-go benefits are insecure in the sense that there is nothing to prevent the federal government from creating as much money as it … Dear Informed: I’m afraid that what you refer to as “common knowledge” is actually a common myth, pervasive on social media but nevertheless not accurate. Social Security trust fund solvency is a myth News. Social Security is too important for the future of every American to get caught up in all the rhetoric and spin and confused by common myths and misunderstandings. Myth 1: Social Security Is Bankrupt, Insolvent, Running Out of Money Facts: a) Social Security cannot run out of money b) Even if Congress allowed trust fund reserves to deplete… • Continuing income would cover 80% of scheduled benefits in 2035 • And 75% of scheduled benefits in 2093 c) Over 84 years, Congress has always acted timely Furthermore, about 20% of people receiving social security payments are under retirement age. If you have more questions about Social Security, visit the Social Security Administration’s website at www.ssa.gov. Debunking the Myth of Social Security Solvency, despite what the media and the Left tell you, Social Security is not fully funded, Trustees report actually says, what it means With so many misunderstandings about the program, it’s nearly a full-time job quashing Social Security myths. Social Security Solvency, the Gaslight Argument and My Special Kind of Stupid Ever since I recently posted a commentary on social media regarding Social Security and its potential demise under the Trump administration, I received several post comments with attachments that speak about "solvency" and "insolvency" of the Social Security system. Myth #4: Social Security is solvent until the 2030s, so there is still plenty of time to fix it. Ironically, the president's own budget exposes the shoddiness of this plan: "The existence of large trust fund Myth of the Social Security Solvency Crisis. Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. We've all been there before, a perfectly pleasant and enjoyable evening at a cocktail party is progressing swimmingly. Adequate income is a social determinant of health. Myth #3: Social Security solvency can be achieved solely by making the rich pay the same as everyone else. Social Security Taxation. The actual issues with the solvency of Social Security are extremely minor. John Attarian is a freelance writer in Ann Arbor, Michigan, with a Ph.D. in economics. Fact: Eliminating the payroll tax cap would still leave a shortfall. Myth: The Social Security system is bankrupt Submitted by S. F. Ehrlich Associates, Inc. on October 1st, 2016. Photography Inc/Corbis via Getty Images) Corbis via Getty Images. By John Zeltmann. Most likely, the person perpetuating this common myth is acting out of fears linked to the long-term solvency of the Trust Fund. Washington? But the program is not going broke. The point of all this is that there is a persistent myth that Social Security’s Trust Fund reserves have been “stolen,” “looted,” or “dipped into” by politicians over the years. Myth #1: We don’t need to worry about Social Security for many years. There is no “best” age to collect Social Security benefits. John Attarian. The kids are tucked in, the dishes are cleaned and put away, and the conversation is engaging. Let’s scare middle class Americans into doing what really benefits only the rich. Ms. Munnell says that is not so. The massive Social Security trust fund will allow the program to pay out benefits at the current level until 2038 . “The reality of the situation is they have sufficient funds to pay benefits in full until 2034,” says Arthur. Not surprising, since the media is peppered with articles that perpetuate this myth, and Social Media constantly bombards participants with statements that promote the Social Security bankruptcy myth. An evergreen topic for pundits and politicians, Social Security’s solvency is a growing concern among seniors. Social Security Myths – – Myth #1: We don’t need to worry about Social Security for many years. Charles Krauthammer. (Honestly, I had no idea how big these benefits were until I started researching this article). Their strategy is the usual. Everyone knows that the U.S. budget is … In the United States, only Social Security beneficiaries receive inflation-protected guaranteed income. Currently, Social Security’s 12.4 percent payroll tax applies to a worker’s first $118,500 of wage income, and benefits are calculated based on that income. Let’s debunk the top 5 Social Security myths. The Looted Trust Fund Myth Is a Serious Barrier to Social Security Reform Wednesday, March 1, 2000. Myth #1: Age 70 is the best age to collect Social Security. Long term solvency of the program can be easily achieved by simply scrapping the income tax cap that is in place for Social Security. In fact, because private accounts are financed by taking money out of Social Security, privatization nearly doubles Social Security’s funding gap and moves forward the date of its insolvency. Debunking the Myth of Social Security Solvency. MYTH #5: Social Security’s projected solvency through 2036 means that beneficiaries have pre-paid their benefits through that date; any benefit changes, therefore, should be deferred until later. Although the United States is famous – some might say notorious – for drastic changes to its socio-economic structure (including its welfare programmes), its Social Security is the most secure and unchanged public pension programme among major Western countries. Myth #4: Fixing Social Security is too hard. Of course, her rationale applies a different definition of solvency, and assumes that time value of money is non-existent. Myth 3: Social Security solvency can be achieved solely by making the rich pay the same as everyone else The existing Social Security payroll … One of the most misguided aspects of much press reporting on Social Security finances is the routine citation of its projected insolvency date (2034 in the latest report) as a proxy for its financial condition. According to a … Posted on February 16, 2011 by Skip Conover. Clinton's bookkeeping maneuver exploits one of the most enduring myths in the Social Security debate. Social security taxes go directly into the “Social Security Trust Fund”. This Social Security myth is a great segue to the next, one of the most commonly spread Social Security myths. Stability is one of the most crucial elements of social security systems. CRFB says that this statement is a myth. At that point — absent modifications to the program — revenues will only be able to pay out 81 percent of promised benefits . Faithful devotees on the Left continue to peddle the notion that Social Security is not in crisis, that it doesn’t contribute to the deficit, and there is no need for reform. Social Security needs another 1983 compromise in which stakeholders accepted “shared pain” to avoid insolvency. by AMAC Certified Social Security Advisor Russell Gloor, Association of Mature American Citizens. Myth No. The coronavirus pandemic is going to have some serious, long-term effects on Social Security’s solvency. Private accounts do nothing to address Social Security solvency. Lawmakers need to reduce the program's deficits to ensure solvency. Fact: Social Security reform options are well-known, and incremental adjustments - enacted soon - can secure the program for future generations. Mar 12, 2011 - 12:00am. 4 Takeaways from the Latest Report On Social Security’s Solvency by Charles Blahous Why Social Security Must Fail by Dean Russell Seven Social Security Myths by Charles Blahous That myth equates Social Security's health with the size and solvency of the trust fund. Ms. Munnell says that is not so. These people receive benefits because of a disability or death of a parent. While delaying until age 70 to collect Social Security will maximize your individual monthly benefit as much as possible, it may not necessarily be the best age for you to collect. This myth has been propagated by pundits, political ads, and friends and neighbors repeatedly, but the facts show that these allegations are untrue. Conservatives want you to believe that Social Security will go bankrupt. CRFB says that this statement is a myth. This is false. Myth: Social Security is going broke.

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