Ok.. Fuck You Lawrence O'Donnell and MSNBC

[HiPointDem]

203. do you know how stupid *you* sound? 1) SS COLAs weren't even in effect until 1975, the result

of 1972 legislation.


2. In 1977 the Trust Fund had had negative cash flow for three years running and the fund balance was less than 40% of one year's payout, and was projected to be depleted in under 5 years. In contrast with today's situation where the fund has been in continuous positive balance, holds 350% of one year's payout, and is projected to be depleted in two *decades*.

http://www.ssa.gov/OACT/STATS/table4a3.html


3. What happened in 1977 is basically unrelated to what is being proposed now. It had to do with how initial calculation of benefits was done.

The Hsiao panel had characterized the problem with the 1972 automatic benefit adjustment mechanism as one of "overindexing.&quot 26) The advisory council report described it as a "coupled" system.(27)

Both of these terms were widely used in discussions and documents at that time. They referred to the fact that initial benefit levels increased from year to year as a result of two separate indexing mechanisms. Initial benefit levels were computed by applying a formula to the retiree's average wages under Social Security. Under the 1972 legislation, the factors in the formula were periodically increased by the percentage increase in the Consumer Price Index....(28) Thus, initial benefit levels were automatically increased by a mechanism which "coupled" the impact of price growth through an explicit indexing of the benefit formula and the impact of wage growth through the use of average wages. This "coupling" of the two factors made the increase in year to year benefit levels extremely difficult to predict since the increase would be based on both the absolute values and the interrelationship of inflation and wage growth...

The advisory council recommended that the situation be corrected by replacing the "coupled" mechanism for increasing initial benefit levels with a "decoupled" system which would rely entirely on wage indexing. Under the advisory council approach, the 1972 system in which the percentages in the benefit formula were indexed to the CPI each year would be dropped. A new formula would be adopted in which the percentage factors would not change from year to year. Instead of indexing the formula for price inflation, the new mechanism would index the wages to which the formula was applied. A retiree's creditable wages for each year would be adjusted to reflect wage growth in the economy between the year in which they were earned and the year of retirement. The benefit formula would then be applied to the average of those indexed wages.(30) Once individuals had their initial benefit levels computed at retirement, those benefits would be kept up to date through price indexing....
the wage indexing approach recommended by the advisory council, was essentially the approach ultimately enacted in the 1977 amendments.(31)

http://www.ssa.gov/history/notchfile3.html

4. Carter made no change in CPI of the type your post implies.

http://www.dol.gov/oasam/programs/history/carter-bls.htm


So fyi, if your only knowledge of the system comes from media talking points, going around telling others how 'stupid' they are is liable to find you looking -- stupid.

SS benefits have been cut by the following presidents: Reagan, Clinton. Real changes in CPI were made under Reagan, Clinton, & Bush 2.

Reagan made both direct (for example, cutting the student benefit) and indirect cuts. Clinton made indirect cuts through changing the benefit formula and increasing the proportion of benefits subject to taxation.