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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Sept. 8, 2011 / 9 Elul, 5771

The kids expect to get screwed

By Jack Kelly




http://www.JewishWorldReview.com | In a few years -- sigh -- I'll be eligible for Social Security. But Social Security could be broke before I receive benefits.

The Social Security Trust Fund will be in the red by 2014, and by 2036 will be unable to pay all the benefits promised, Social Security's trustees said in their annual report.

It's worse than that, because there is no money in the Social Security Trust Fund. The $2.6 trillion collected in payroll taxes since 1937 long since has been spent.

What there is in the Social Security Trust Fund are IOUs from the Treasury department, IOUs Treasury can't possibly make good, because federal spending vastly exceeds all other tax revenues. The Social Security Trust Fund is an accounting fiction.

This means that if Social Security isn't put on a sound financial footing pronto, benefits will have to be cut a lot sooner than 2036.

How did we get into this mess?

In theory, our benefits are based on what we pay in payroll taxes. In reality, benefits are paid by the taxes of those who are still working. In the private sector, a plan in which initial investors are paid with funds from subsequent investors is called a Ponzi scheme. As Texas Gov. Rick Perry has noted, Ponzi schemes are illegal (except for politicians).

Ponzi schemes fall apart when fewer suckers invest. Something similar has happened in Social Security. In 1940, there were 42 workers for each retiree. Today, there are fewer than three.

This is partly because fewer people are entering the work force, more because people collect benefits for a lot longer. When Social Security was created in 1935, average life expectancy was 61 years. Today, it's nearly 79 years.

This statistic overstates the problem, because back then more people died in infancy and childhood. Life expectancy for those who've reached age 65 has increased by a little more than five years since 1940.

But that statistic understates the problem, because in 1940 only about 57 percent of Americans lived until age 65. Today, about 78 percent do.

Demographic bulges and busts wouldn't matter much if each of us had our own Social Security account, and our benefits were in fact based on what we contributed to it. But then politicians couldn't take our money and spend it on other things.

Benefits have increased a lot over the years, and have been extended to people who didn't pay into the system.

But for many, Social Security taxes have gone up faster. In 1937, the payroll tax was 2 percent, --1 percent paid by the worker and 1 percent by his or her employer -- and was applied to just the first $3,000 of earnings. Today the payroll tax is 12.4 percent, and it's applied to incomes up to $106,800.

The rate of return most of us receive on what we pay into Social Security is frightfully low. The Federal Reserve Bank of San Francisco estimated in 1999 that low paid workers get a 4-5 percent rate of return; middle income workers 1-2 percent, and high income workers -- if they were born after 1975 -- will get back less in benefits than they paid in taxes.

If your Social Security taxes had been invested in the stock market between 1945 and 1989, you'd have gotten a rate of return of 13.57 percent, the Cato Institute estimated. Long term corporate bonds paid 5.42 percent during this period. Treasury bills paid 4.74 percent.

Because the SS trust fund is just an accounting gimmick, when -- in 2014 or sooner -- payouts for benefits exceed payroll tax revenues, Social Security will become a big contributor to our mammoth national debt.

Raising the payroll tax would hurt more than help. It's already a major barrier to job creation, and without more jobs, Social Security can never be put on a sound financial footing.

Two things could. We could means test for benefits. Some conservatives object to this, on the grounds it would convert Social Security into a welfare program, but that ship sailed a long time ago.

More important would be to raise, gradually, the retirement age to 70, to match the gain in life expectancy for those who've reached age 65. This can be done without affecting those currently receiving benefits, or within five years of eligibility.

The kids would get screwed, again. The kids always get screwed, because geezers vote, and they mostly don't, and the geezer population is growing faster.

The kids expect to get screwed. Polls indicate most don't think Social Security will be there when it's time for them to retire. But if we make these reforms, maybe it would be.

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JWR contributor Jack Kelly, a former Marine and Green Beret, was a deputy assistant secretary of the Air Force in the Reagan administration.

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