Oldiron_79: They have altered the deal, pray they do not alter it any further.

I can't help but noticing that the the fictious couple are making average incomes but living above-average life expectancies. In 2012, the State with the highest average life expectancy is Hawaii, at a combined ALE of 81.5. This slight imbalance between pay-in and pay-out is posited on the man living to 82 and the woman to 85. The difference in this case is minus $45,000--and that was in 2011.

FTA: "A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank."

In reality, however, the average American does not live that long and they get a much worse deal as a consequence. And most of that money is going to the woman, who is likely to have worked outside of the home less than her man (or men) and to be get survivor benefits.

Furthermore, social security is not paid out to every person. The working lower and middle classes may need social security just to survive in old age, but the better off workers will have private savings, pensions, and investment income, not to mention things like stock options, while the rich will not be paying payroll taxes on any significant portion of their income.

In the real world, the workiing man is making even less money (a LOT less money) than the average person and being paid for a much shorter retirement during which his needs will be much higher because of health problems.

In terms of preparing people for unemployment, ill health and retirement, social security and other problems are even worse than they appear in such studies. American payroll taxes are simply among the lowest in the world, as are income taxes and (recently) corporate taxes. In Europe, people are forced to save through the tax system and consequenly anybody who works a full career will have more money to pay for a full retirement. Much, much, more money is paid out in government transfers because much more money is taken in by taxes.

In the bootstrapy USA and Canada, you are on your own, and because the whole system is posited on less wealth transfer and much higher GINI coefficient, you are left to fend for yourself without resources to meet even modest needs.

Grotesque inequality is not only the norm, it is actually encouraged by politicians, corporations and voters, plus a giant array of special interest "think tanks" designed to promote the interests of those who can afford to own special interest think tanks and to get legislation and judicial judgements such as the heinous Super-rich Citizens United vs. Everybody Else decision in which the plaintiff and the judges were all owned by the same deep treasuries of private wealth, namely the people who could swim in their money like Scrooge McDuck.

And they did say average--did they mean "average", which is pumped up by the wealth of the rich and the super-rich or did they mean "median", which isn't. If the couple in question is truly average, they are much better off than the people at the very middle of the population because average is much higher than median.

Of course, there is a lot of fear-mongering about social security. It isn't really in the kind of trouble that propagandists would have you believe. For one thing, there's plenty of money floating around in the undertaxed wealth and income of the rich and well-to-do. In fact, by world standards (everybody else, except maybe Japan), Americans are seriously undertaxed, so you are pissing away a lot of money that you should be saving for retirement if you were foresightful or had anything worth putting it into. Bank accounts are a cruel joke and so are most investments. They pay negative income for the most part. Americans and Canadians do not save enough, either voluntarily or through government and corporate foresight and forced savings.

But all the same, the system could be solvent. In Canada, it is solvent, at least for the next 75 years or so.

In the US, the money going out is going to overwhelm the money going in regardless of how many people are screwed in the interim by employers and the government alike.

But tha just means that instead of being encouraged or forced to save for your retirement, you will be forced to pay taxes or accept even lower benefits.

The article goes on to explain that social security offers benefits that private savings and corporate pensions don't. Basically it is part insurance--protecting widows who didn't work, children, and so forth. This is true. But as an insurance scheme, it leaves you seriously under-insured.

If you want the kind of social security that everybody else has, Americans and Canadians would have to get used to higher payroll taxes, on more people (richer people and on younger workers), and more incentives to save, or more forced savings. The rich would have to give up a lot more (rather than giving up less and less every year as their privately owned politicians and lobbyists service their private interests) and the whole economy would have be a whole lot more, shall I say, socialist and democratic, or social democratic.

The banking system, the privileges of super-wealth, and many other things would have to be reformed to a very great degree. You would have to take the vote away from unions as well as other corporations (especially other corporations) by limiting political donations to what middle class people can theoretically afford to give (small donations only, by real citizens, not corporate persons--in Canada, the Liberals did a big part of this job at their own expense, as it turns out).

In some ways the situation is both better and worse than it is painted, but for the large majority of Americans and Canadians, it is worse.

jigger: Early investors make out better than later investors. Eventually the system collapses. That sounds very similar to some other kind of scheme. What was it called? Just can't put my finger on it.

Facebook?

smitty04: It paid for the war on poverty.

Good thing we declared war on poverty, or we'd still have poverty!