Monday, June 20, 2011

AARP comments on Social Security trust fund and Medicare (vs. debt crisis); quotes President Obama

Look at the article “Social Security: Fears vs. Facts” on p 33 of the July-August 2010 issue of the AARP Magazine, “Your Money” column, piece by Liz Weston, link here.

Yes, she debunks the idea that “the Social Security trust fund assets are worthless” (point 2). But the government did spend some of these assets, backed up only by “IOU’s”, and threatens to default on Aug. 2 if the GOP really does forestall raising the debt ceiling limit. That could give creditors a legal basis to demand means testing, even now for some current retirees, to help settle the debt.  A court order to do so is at least conceivable. The other point is that Social Security should tell each beneficiary how much of his or her monthly benefit is actually accounted for by the FICA contributions, when compared to how private insurance companies compute annuity benefits.

Medicare is in fact in worse shape (and even more liable to means testing claims), because medicine keeps finding new ways to keep people alive longer but very expensively.  Previously paid Medicare taxes could not account for this.

On p. 64 of the same issue of the Magazine, President Obama is quoted as saying “Well, seniors have paid into Social Security. They’ve paid into Medicare over a lifetime of hard work. And the notion that somehow they are asking for something they don’t deserve makes no sense to me.”

Let’s hope John Boehner and President Obama made some progress on the golf course Saturday, light rain showers  (no storms) notwithstanding.

3 comments:

Adam said...

All partisan politics aside, we had all better face a simple fact: cuts are coming, and need to happen. If we continue to spend on entitlements at the current rate, we're doomed.

Bill Boushka said...

From feedback I get on this issue, I get the buzz that seniors should be prepared for means testings soon. That affects decisions, like whether to take or keep a less desirable job -- because benefits can't be counted on, even now.

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