Social Security: Don’t let me down
A program that will let future generations down
The Chainsmokers ft. Daya help us understand the past, present, and future of social security in America. (Hint: it’s gonna let us down…)
What is it? (From Wiki)
In the United States, Social Security is primarily the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. The original Social Security Act was signed into law by President Franklin Roosevelt (this mother fucker again?) in 1935, and the current version of the Act, as amended, encompasses several social welfare and social insurance programs.
Social Security is funded through payroll taxes called Federal Insurance Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). Tax deposits are collected by the Internal Revenue Service (IRS) and are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund which make up the Social Security Trust Funds. With a few exceptions, all salaried income, up to an amount specifically determined by law has a FICA or SECA tax collected on it. All income over said amount is not taxed. For 2015 the maximum amount of taxable earnings was $118,500.
In 2013, the total Social Security expenditures were $1.3 trillion, 8.4% of the $16.3 trillion Gross National Product and 37% of the federal expenditures of $3.684 trillion. Income derived from Social Security is currently estimated to keep roughly 20% of all Americans, age 65 or /older, above the federally defined poverty level.
The Chainsmokers explain what this means:
Crashing, hit a wall
Right now I need a miracle
Hurry up now, I need a miracle
Stranded, reaching out
I call your name but you’re not around
I say your name but you’re not around
We’re crashing, and we’ve hit a wall. And right now, we need a miracle. We’re stranded, reaching out to fix the problem we call their names, but their not around. Who you might ask?
Answer this riddle: Together we are strong, divided we are weak, but its the number three you seek.
Look no further than the three branches of government, together they can fix the upcoming social security crisis.
But what’s driving the increased costs of the social security program?
The 2015 annual report from the Social Security Board of Trustees shows that the program’s disability component is in immediate trouble. Data from the latest report show that the disability fund will be depleted as soon as next year and unable to pay full benefits to beneficiaries.
This first chart uses that data to show total income, expenditures, and assets in the Social Security Disability Insurance (DI) trust fund (one of the trust funds, another being the Social Security trust fund) going back to 1980. The chart shows that the trust fund has been operating under deficits since 2009, as shown by the decline in the trust fund (green bars) and ever-growing gap between the payments (red line) and receipts (blue line).
It will be tempting for policymakers to avoid the politically difficult decision to rein in benefits by a temporary fix, like raising payroll taxes or shifting “assets” from the regular Social Security trust fund to the DI component. These short-term fixes would worsen the Social Security system’s long-term structural imbalance, while inflicting damage on the US economy.
What does it mean?
They say a picture is worth a thousand words:
This chart is the cumulative Income (not including costs like administrative costs, etc.)
Again we find The Chainsmokers helping us explain this madness:
I think I’m losing my mind now
It’s in my head, darling I hope
That you’ll be here, when I need you the most
So don’t let me, don’t let me, don’t let me down
D-Don’t let me down
Am I losing my mind or is this program extremely disappointing? Especially because all of the people who paid in to it thinking they would be getting their money back at some point. Don’t let us down….but Congress can be our miracle right? Don’t hold your breath.
The government has borrowed nearly $2.8 trillion as of 2014 from the Trust Fund and used the money for other purposes. Under current law, when the program goes into an annual cash deficit, the government has to seek alternate funding beyond the payroll taxes dedicated to the program to cover the shortfall. So more taxes besides payroll, cool. Or we could cut back spending, but like I said, don’t hold your breath.
The program deficits are expected to exhaust the fund by 2034. Thereafter, since Social Security is only authorized to pay beneficiaries what it collects in payroll taxes dedicated to the program, program payouts will fall by an estimated 29%.
2034 shits gonna hit the fan. Why you might ask? Payouts fall over 30 percent and we will have more retirees with baby boomers retiring in hoards…Look at this graph that shows the number of beneficiaries from the OASDI fund currentl:.
And look at the population growth by age:
So it’s projected with baby boomers retiring that there will be more people taking out of the system than paying in to it.
Here’s an over all picture of the fund and what happens to benefits when the fund runs dry under the current laws:
And in come The Chainsmokers:
Running out of time
I really thought you were on my side
But now there’s nobody by my side
We’re running out of time, and Congress isn’t by our side, I really thought with all that great political rhetoric they were on my side. I guess just not when it comes to fixing the Gorilla in the room.
No Congress man or woman wants to run on a platform that says “I’ll cut benefits and lower your standards of living because we need to fix this problem.” It’s because people feel like they have been paying into a personal retirement account, but really its a general trust fund that federal agency controls. Humans are fallible and we make mistakes. But eventually something will have to change.
It’s in my head, darling I hope
That you’ll be here, when I need you the most
So don’t let me, don’t let me, don’t let me down
D-Don’t let me down
It’s in my head, darling I hope, but you said you’d defend the constitution and the American people when we need you the most, so don’t let us down. This problem will face our nation for years to come unless we do the right thing and reign in federal spending in SSDI.
