Social Security “Insolvency”–A Different Perspective - Forbes; AMAC
Despite a seemingly unlimited number of media posts about the rapidly approaching Social Security insolvency problem — the point at which the program would be unable to pay promised benefits in full — there is one viewpoint that hypothesizes a unique interpretation. That interpretation suggests that insolvency will not and cannot happen because of the federal approach to taxation and its role in governing the economy. Calling the looming 2033 Social Security insolvency a “laugh line,” RealClearMarkets editor and Forbes contributor John Tanny suggests in a tangential way that “…Social Security payments are secure now and forever.”
Tanny’s critique (click here to read it) of Social Security’s financial situation, as well as his assessment of the mounting national debt, can be read as a bit speculative or even tongue-in-cheek, maybe even a bit sarcastic. Nevertheless, numbers are numbers, and timelines are timelines, and 2033 is a very real point in time (actually, 2033 may be a bit optimistic), and something will need to be done. As noted in yesterday’s headline post here, there are solutions, with many recommendations having been submitted to Congress for actuarial evaluation over the past few decades. Yet, no progress has been made toward a remedy.
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized to meet the demands of 21st-century economics. AMAC’s position is that this can be achieved without payroll tax increases through relatively slight program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating payments to higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission to preserve Social Security for current and future generations and has garnered the attention of lawmakers in D.C., meeting with numerous congressional offices and staff over the past decade. To learn more about AMAC’s plans, click here.