Repeat after me - benefit. Ben-e-fit. Benefit. Social Security is a BENEFIT.

[customerserviceguy]

145. Good to hear from you again, it's been awhile

We last went at it into debate when the Simpson Commission was first appointed and while it was meeting. While it's conclusions were shelved for the expediency of an election, I suspect we're about to revisit the issue. All of the things I asserted then are still true now. Excess FICA taxes (when they existed) were a nice little slush fund for extra government spending. Since the arrival of the Great Recession and the baby boom retirement, those surpluses have dried up, and Congress desperately needs them back again.

I'm glad to see you acknowledging the 75% figure, all we have left to dispute is the number of years that full benefits can supposedly be paid. Your statement says 25 years, but even the Social Security Trustees give a figure of only about 20 years, to 2033:

http://www.ssa.gov/oact/trsum/index.html

I'm not that optimistic. Why? Well, using tables from the Social Security Administration itself (not some reich wing BS stuff) linked on this page:

http://www.ssa.gov/history/hfaq.html

some interesting facts can be obtained merely by a copy operation and a posting into Excel. The SSA doesn't perform percentage difference calculations on the numbers, but you and I can. It's all about inflow and outflow.

Using the table for numbers of people paying into Social Security, we see a steady rise of 3 to 5 percent per year during the "good" years, but those years really don't start until 1965, when the leading edge of the baby boom graduated from high school and started hitting the workforce. There were declines in the number of paying workers during the recessions of 1975 (1.12%) 1982 (1.06%) 1991 (0.45%) and 2002-03 (0.34% and 0.20%, respectively). In the current Great Recession, 2008 already showed a decline of 0.35%, but the really big drop is 2009 of 3.98%. That's well over three times the worst yearly drop since 1955.

I'd sure like to see figures for 2010 and 2011.

Performing similar calculations on the table of number of persons collecting Social Security benefits, we can see that the percentages increased rapidly from 1940 to 1960, as very large numbers of people first qualified for payments. Percentages were in double digits throughout that period, from a high of 95.79% from the 1940-45 period down to 11.13% in the 1957-60 period on an annual basis. That was to be expected, especially as the categories of people receiving benefits was greatly expanded when the system was flush with money, and the first payers started becoming eligible to be payees.

However, by 1980, the annual percentage in the increase of persons receiving benefits slowed from 8.11% in the 1960-65 period to a more normal (from then on) percentage of 2.18% in 1980. In the intervening years from 1981 to 2007, the annual percentage increase in number of persons receiving benefits stayed between about 1 and 1.5% (1997, probably the best of the Clinton years had a low of 0.54%, and 1992, one of the worst of Bush, Sr. years saw 2.25%) which was to be expected as the early 80's recession melted away but was replaced by the 1983 "grand bargain" taking Social Security benefits from people who had previously been eligible to receive them, such as over-18 year old college students.

Then, when we started to hit the Great Recession, 2008 showed an increase of 2.07%, that's also the year the leading edge of the baby boomers turned 62 and were first eligible for early retirement benefits. The next year, 2009 showed an increase of 3.19%. I'd sure like to see numbers for 2010 and 2011, wouldn't you?

Also, the sheer numbers have been growing, the last time the number of recipients grew in the 3-4 percent range was the late 1960's and early 1970's, with roughly half as many people collecting then as did by 2009. I'm absolutely certain that the numbers have risen since, as more and more folks hit either early or regular retirement age, and laid off sixty-somethings finally exhausted their unemployment benefits. The peak year of the baby boom was 1957, those people are still seven years away from early benefits. Unless the job market improves for older middle aged folks, we can expect more boomers to take early retirement than any group that went before them.

It really doesn't make much difference how many accounting entries there are in some big fat book of how much the Federal Government owes the Social Security Trust Fund, the only way those monies are going to be paid is by Federal budget surpluses, new borrowing, or running the printing press and creating new devalued money. The last two are disasters, with either rising interest rates or rising inflation (probably both) and the first option is politically impossible.

You can stamp your feet and say that it just isn't right or fair all you want, you can make all the statements about the sanctity of US obligations all you want, and you can complain to Congress and the President all you want. But it's not going to change the realities that are coming our way. All we can hope to do is shape the changes more to our liking while we still have some power, or we can wait until the Repukes control the White House and both houses of Congress some day.