[Homestead] Morning thought

Clansgian at wmconnect.com Clansgian at wmconnect.com
Wed Feb 2 17:51:50 EST 2005

> My peers and I had the same belief in the seventies. We figured the system 
> would be broke by the time we retired. We were very wrong.

As has been pointed out before, Gene, you were very right.  SS as it existed 
in the 70's would not have enough money to be paying you benefits right now.  
That's how right you were.  Had it not been for huge increases in the SS 
deduction at the beginning of the 70's was 5.9% for employees and employers and 
7.9% for the self-employed.  Had those rates continued, there would be little or 
no SS payments today to anyone on this list.  Today employers and individuals 
are deducted at a rate of 7.65% and the self-employed pay 15.3%.  It is 
meaningless to say that since you could see that mathmatically the system was going 
bust in the 70's but since the taxpayers were tapped for billions more in 
funds it didn't, so that means no one now has anything to worry about, is a 
massive 'non sequitur'.   For the system to continue unabated, there will have to be 
tax increases proportional to those of the 70's.  

> Minor tweaking can keep the present system going for longer than any of us 
> now alive

IF the economy continues without hiatus.  That's  a big IF.  A sharp downturn 
in the economy could bring the end of SS closer by decades.  Keep in mind 
that there is no sack of money from which to draw benefits.  All benefits of the 
current year depend on taxed collected the current year.  That will always be 
the case.  If business sours to any serious extent, there's nothing to tax 
.... hence no benefits to pay.


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