Social Security Field Representative Edward Sarkies on Social Security
Social Security is the most successful government program ever. It has been making payments since January of 1940. In the near future, some important changes will have to be made so the program can continue to provide Social Security benefits as usual. Watch this video for a few insightful comments made by a Social Security field representative. He discusses the future of Social Security and what action needs to take place for change.
Ed Sarkies: Hello, my name is Ed Sarkies. I work for the Social Security Administration. I’m a field representative at the local Kingston, New York Social Security office. One of the questions that were frequently asked at Social Security, and you know it’s an issue that’s before the public on an ongoing basis and that is, “Ïs Social Security going to be there for me when I’m ready to retire? I’m 55 years of age now and from what I read in the newspapers, Social Security is in desperate financial straits at the present time or in the near future, it’s possible that maybe there’s no money available for me when I reach age 62 or when I reach age 66? So what’s the story on that topic?”
Well, I can start here and say that Social Security in a historical sense has existed making payments since January of 1940. It was passed into law in 1935. It started payments in January of 1940 and it has not missed any payments since that date to the present time. So it’s a program of long longevity. It’s probably the most successful government program that’s ever been in existence. To make payments from 1940 to the present without missing a payment shows a substantial significant successful program. The government is not going to let Social Security flounder financially.
Changes definitely have to be made with Social Security. In fact, the financial outlook for Social Security if no changes are made in the way Social Security payments are presently being sent out, that is if no legislative changes are made, Social Security is going to not be able to pay all its beneficiaries by the year 2037. At that point, what will happen if no legislative changes are made, if no changes are made in the Social Security System, only 75 percent of the people receiving Social Security benefits will be able to receive their benefits. There is going to be a shortcoming or shortfall of about 25 percent at that time.
So, of course, the system can’t work. It can’t continue to exist if that dire outlook exists. But what’s going to have to happen is there is going to have to be a consensus, a political consensus, to make the important changes in Social Security.
What those changes may be? I don’t know, but it’s going to be basic things like either reduction in the amount of the Social Security benefit payments, changes into who these benefits are payable to, or on the other side of the coin, an increase in the amount of the Social Security taxes. Whatever it may be, Social Security is going to need some changes. It’s going to need some legislative attention soon, and so at that point, when these changes, these necessary changes are made, Social Security, I’m sure, will continue on as it has been since 1940, again, being the most successful government program that’s ever existed.
Mike Kilburn on Social Security
Mike Kilburn, a Warren County Commissioner who is ready to challenge Jean Schmidt (R-OH) for her seat in Congress, recorded the following video on Social Security:
Mike Kilburn: A much bigger problem than healthcare in this country is the financial stability of our Social Security program. Social Security is the program that needs to change. We need to look at the retirement age. We need to look at how we fund Social Security. You know, you only pay Social Security premiums on the first $100,000. You know, anyone making over $100,000 doesn’t pay any premium on that last end of their salary. So if we would revise that, I’m sure we could put Social Security back on a good footing. But we’ve got to get on top of it or people aren’t going to get those benefits they worked so hard and expected to have when they retire.
No COLA for SS Beneficiaries = Lower Benefits?
There will be no COLA this year because officially there is no inflation. But in reality, many prices — above all healthcare costs — continue to rise.
What is your experience? Are your costs of living going up? Should COLA be redefined so that it is more consistent with reality?
Mr. Shepard Smith: For many, many years, some would argue when it’s politically expedient to do so, critics on both sides of the aisle have claimed that Social Security was going to go completely bankrupt. I mean, bankrupt, it’s over, unless the entire system is drastically overhauled. We’ve all heard it.
Well, today, there’s a preview of things to come again. For the first time since the 1970s, the Federal government will not be giving seniors a cost of living increase (COLA). The amount on the checks will instead stay the same, but as healthcare costs rise, what this basically amounts to is a smaller Social Security check for seniors. I mean, if you look at it, that’s what it is.
Complicating matters, millions of babyboomers are now preparing to become senior citizens and it’s the babyboomers that we’ve known all about for decades and all of a sudden, it’s a crisis. With us now is financial consultant and money manager, Rodney Anderson. Rodney, it’s great to see you. Thank you.
Mr. Rodney Anderson: Thanks, Shep.
Mr. Shepard Smith: It’s not as if we didn’t know that babyboomers were about to get older, they are. We’ve known it for decades that it was coming. I mean, please don’t tell me this is the end of Social Security because we all know better. Every time they say it, they just find more money for it and make it work. Otherwise, they’d get voted out of office, right?
Mr. Rodney Anderson: Well, the decision to freeze Social Security is like putting a band aid on a compound fracture. We’re seeing where seniors are having their benefits cut and their cost of healthcare go up. We’re seeing them where they’re having their investments, which are the 401ks or IRAs just plummet down but not only that, we’re seeing their investments such as their CDs and their savings rates go down and this is where they lived off of. But many of these seniors through healthcare are having to finance their debt, debt that they’ve never had to finance before and that is being taken on by credit cards and then we have the banks raising everybody’s credit card rates and it’s killing the seniors and that’s why more and more are going into bankruptcy right now.
Mr. Shepard Smith: Well, it’s killing everybody to bankruptcy. And quite frankly it’s killing the seniors, but I don’t know… I don’t know how that leads us to say that this is the beginning of the end of Social Security because I’m not going to listen to it for a long time anyway because I’ve been hearing it for so many decades and it never happens. I mean, why would it happen this time?
Mr. Rodney Anderson: Well, in 2016, we don’t have enough money going into Social Security to fund it. But in the year 2037…
Mr. Shepard Smith: Yeah, well, in the previous administration, it was a different year, then in the administration before that, it was different year. It doesn’t matter if you have an R or a D after your name. They say this every few years, here it comes, and then we fund it. I mean, what’s different? Help me.
Mr. Rodney Anderson: Well, what’s different this time is truly because this healthcare crisis is going out of control that they have two major crises in front of them; one of them is healthcare. We’re hearing about it every day every minute of the day. The next one is Social Security. They keep wanting to print money, but pretty soon, Shep, the money is not going to be printed anymore.
Mr. Shepard Smith: And so because we’re not printing anymore money, Social Security is going to go away?
Mr. Rodney Anderson: No, Social Security will not go away, but what seniors will see is they’ll see no cost of living adjustment and what they’ll see is those paychecks, those monthly checks go down.
Mr. Shepard Smith: So…
Mr. Rodney Anderson: It may not go away, but it’s just going to be like Medicare where the benefits are cut every year.
Mr. Shepard Smith: So are you saying that an overhaul of the healthcare system is urgent and must happen to keep Social Security from falling apart? We’ve got the cost down?
Mr. Rodney Anderson: I think it’s a must happen… yeah, it’s a must happen. We have to get the costs down because seniors are being hurt from every side right now.
Mr. Shepard Smith: Well, it sounds like the President agrees with you on this, right? He’s the one who said we got to get the costs down. We’ve got to overhaul. We’ve got to overhaul the whole healthcare system and we’ve got to have a government option in there, that is what he used to say. Is that your sense that that would help save Social Security?
Mr. Rodney Anderson: Well, yeah, I think it will help Social Security in a lot of ways, Shep. But here’s what’s going to happen. I talked to my mom on my way here and mom knows best and mom says, “People can’t even or buying food right now, instead of buying medicine. It is a problem and right in my own family, because the fact of the matter is none of us or we’re all living older and that’s going to bankrupt Social Security.”
Mr. Shepard Smith: Well, I’m not well. We’ve known this was coming. This is not brand new information. We’ve known babyboomers were going to get older. We’ve known it forever. Now, all of a sudden, it’s a crisis. Well, yeah, it is. Babyboomers, they’re getting older. We got to do something about it. The President says he has a plan and the Republican say it’s a bad plan and we’ll see what happens. Rodney Anderson, let’s hope something happens. It’s good to see you. Thank you.
Social Security Scare Tactics?
One commentator in this video describes Social Security as a “multi-generational Ponzi scheme that has no end”.
Even if the SS trust fund runs out of money, the government can always print more money to send out Social Security checks.
The only question is, will the money still be worth something? The more money they put out there, the faster its value goes down. And once other countries (like China) recognize that the dollar is losing its value, they will stop buying the US government’s debt.
But even then Social Security doesn’t have to fail. A Ponzi scheme can last for a very long time if it’s supported by a government that can print new money as it sees fit.
The result might well be hyperinflation. In such a scenario, Social Security checks won’t increase every year, but every month. They just won’t buy a whole lot.
If we are to be angry, who should be the target of our wrath?
Mr. Neil Cavuto: Senior citizens are already upset about the direction of healthcare reform and just when you thought they couldn’t get angry, now millions of elderly face shrinking Social Security checks. Trustees who oversee the programs say that the payments will not rise for the first time in a generation. So do seniors have a right to be riled up? Tom, what do you think?
Tom: Absolutely, Neil. They definitely should be angry. There’s a couple of things to look at here. The cost of living adjustment (COLA) is pegged to inflation, which is negative this year. However, the basket that is used to calculate that adjustment is actually calculating things such as the price of DVDs, movie tickets, BluRay machines. They’re now looking at spending patterns that seniors are actually using and that is… there should be a separate basket that is used to calculate that adjustment. That just not there yet.
Mr. Neil Cavuto: But Jonathan, I mean, many of these little rules are going in, right? This is how we’re going to calculate. Now, the two-year thing might be a new deal, but by and large, we always knew we’re going to keep this attached pretty much to the CPI and with very little variation, it’s been working just fine, so what changes things now?
Jonathan: Well, I don’t know, if it’s been working so fine. I mean, Social Security accounts are 20 percent of federal budget. All the entitlements, Medicare, Medicaid, Social Security account for 75 percent of all federal spending. I think what’s….
Mr. Neil Cavuto: No, really, my point is that we knew this math was there and now when it turns up that it’s not generous enough, we want to change it.
Jonathan: Right, well, what it does is it pits one generation against the next, right? So those who paid into the system, of course, feel that they’re entitled to get what they deserve out of it. So we have this multi-generational Ponzi schemes essentially that have no end and if you’re frustrated about your Social Security being cut, just wait until the government gets ahold of your healthcare.
Mr. Neil Cavuto: Liz.
Liz: Yeah, I agree. Jonathan is absolutely right. You know, I feel like that people who really should be riled up are the babyboomers. Boomers should be having their own town halls. They’re not going to see this Social Security benefits like the seniors are getting and you know, Social Security, when it was built in the 30s, the life expectancy was 65, and that meant you’re like, you know, you wouldn’t get any pension benefit from Social Security. Now, you know, babyboomers are expected to work until they drop dead and they’ll take a load off of Social Security and won’t get their benefits and you know, what the seniors are expecting, I get it.
But Medicare too was built in the 60s when we didn’t have MRIs, PET scans, CAT scans, all sorts of cancer treatments. Now, the taxpayer is paying for all sorts of those kinds of treatments and also all sorts of advances in stem cell research and neurology and the like. I think the reality check has bounced a long time ago with this.
Mr. Neil Cavuto: Mike, what do you think?
Mike: You know, I bet Jonathan is one of those people that wanted to give Social Security to Wall Street geniuses, so they can lose 50 percent of the money within two years as soon as they got it. I can just hear it. Government doesn’t have a place, but here’s the point, all of this is about, it’s about the fact that the drug…
Mr. Neil Cavuto: By the way… by the way, Mike, you might be surprised to learn that Jonathan was against all the bailouts in the last administration’s rescue.
Mike: Well…
Mr. Neil Cavuto: He wouldn’t rescue his own grandmother. So I’m telling you. I’m telling you he’s been very consistent on this.
Mike: I’m not saying this…
Mr. Neil Cavuto: So that’s an unfair shot, but continue.
Mike: All right. All right. Well, the AAR people better be pleased that government is still in control of Social Security. Here’s the problem. Here’s what happened. The drug industry can charge people whatever they want and because of that, you have something called the Medicare Prescription Drug program. That’s the only thing that has been affected here because the drug industry is able to charge…
Liz: Mike, Mike. Let me ask you. Before…
Mike: Is able to charge the elderly $50 for two…
Liz: Yeah.
Mike: Wait, let me finish what I’m saying. They were able to charge the elderly $50 for a $2 pill and what that does is raise his premiums.
Liz: Right.
Mr. Neil Cavuto: It’s okay. Jonathan, let me ask you.
Jonathan: Right. Right, well, I mean, you want to blend the drug industry and this industry in this business.
Mike: Give it to Wall Street. Orchestrate it. Give it to Wall Street.
Jonathan: And give it to Wall Street. But let me ask you, Mike.
Mike: Yeah.
Jonathan: Are there any of these big entitlement programs that you love so much that aren’t broke? I mean, this isn’t me. This is CBL. This is an estimate all of those that or eat Medicare. Are there any that are not broke?
Mike: Yeah, I would say. What do you think of the VA? What do you think of the VA? What do you think… what do you think of VA? Do you think VA works?
Jonathan: Social Security, Medicare, Mediaid.
Liz: Mike, you know, Mike…
Mike: You know, maybe Social Security is broke is because your GOP took $1.6 trillion out of Social Security while you were saying give the program to Wall Street. Let the elderly invest the money with Wall Street.
Mr. Neil Cavuto: Right, okay.
Jonathan: I’m saying… all I’m saying is…
Liz: You know, Mike, you know, again, the history lesson, the Democrats let the Congress to get their needs on Social Security for the first time in the 60s.
Mr. Neil Cavuto: All right. All right. All right. I wish we have more time. Thank you for talking over one another. Let’s save a hell of a lot of time; otherwise, we’ll have moments of proverbial break.
Social Security and Medicare as Pyramid Schemes
Dr. Peter Holmes: And good morning and welcome. I’m Dr. Peter Holmes, an orthopedic surgeon and host of your program, Ask the Doctor. My guest this morning is Dr. Byron Limmer. Dr. Limmer is a dermatologist. If you have any question for Byron in the future and my other guest, two ways to reach us, it’s through the foundation and it’s www.kneedfoundation.org or fax, 696-9012.
I’d like to talk about pyramid schemes and your health. Recently, we heard on the news is a gentleman named Madoff who made the news because he bilked some $50 billion off of investors and he did it through what they call a pyramid scheme.
Now, folks, what a pyramid scheme is it’s just that, it’s shaped like a pyramid. You get one person to put money in and he gets notice that his portfolio is worth something and then you get other people to put money in later and you pass some of their money off to the first investor, but for the most part, you spend everybody’s money.
So the person on top is getting a little bit of money, but the key is you have to keep bringing in more and more investors and the pyramid gets wider and wider at the bottom, that’s why it’s called a pyramid.
The money is all gone; it’s just on paper. So the net result is this: you now have this vast fortune of zero. In other words, there’s no money. It’s worth nothing, yet everybody thinks it’s worth something. Any money again going to the top is strictly transferred from new money coming in the bottom.
It sounds pretty ludicrous, doesn’t it? Well, guess what? We have a pyramid scheme in this country and most of you are part of it. It’s called Social Security and Medicare. There is absolutely no difference. You pay your Social Security and Medicare taxes in. That money is being spent in the general budget. It is then put down in the ledger, much like Mr. Madoff, that says “I owe you” (IOU). In other words, the trust fund is owed money by future taxpayers.
So what we have here basically is the money is spent. We have the people retiring now, on Medicare now, and new people coming in the bottom paying to the top. In other words, it is a generation to generation direct transfer of tax revenue. There are zero funds in this trust fund. It’s zero, same as Mr. Madoff’s, nothing.
All we have in the Social Security and Medicare trust funds are IOUs. Now, the problem with this pyramid scheme is that it’s really not a pyramid. What’s happening with the ageing babyboomers as we get older and there are fewer workers below, the pyramid is beginning to look more like a diamond, which is unsupportable in any sort of pyramid scheme.
Your healthcare and your Social Security depends now on a pyramid scheme and they’re both going to collapse. These are my opinions. If you have any comments, two ways to reach me, go to the foundation at www.kneedfoundation.org or fax 696-9012 to Ask the Doctor.
President Obama: After Health Care, I May Address Social Security
In an interview with the Washington Post, President Barack Obama suggested today that, once the health care reform is behind him, he might tackle Social Security reform:
Barack Obama: “I think we’re in a position to be able to, either at the end of this year or early next year, start laying out a broader picture about how we are going to handle entitlements in a serious way. It may start with Social Security because that’s, frankly, the easier one.”
The Future of Social Security
Lady Narrator: On the next Destination Casa Blanca, a large number of Latinos admit not to know anything about retirement saving plans and most of them expect to retire solely on the Social Security funds. But will this money be enough?
Male Speaker: Social Security from the very beginning was not meant to be your retirement plan.
Steve Guss: Exactly. Social Security was intended to provide sometimes referred to as fore-protection upon which people were expected to be building.
Michael Tanner: Every dollar that the government consumes is a dollar that’s not available in the private sector to increase economic growth, to hire people, to make businesses grow, for people to save and invest on their own. There is a cost to doing that.
Lady Narrator: What’s more? Will it even exist?
Male Speaker 2: There is not a long-term Social Security crisis, but there very much is a long-term healthcare crisis.
Michael Tanner: Cutting Social Security benefits angers seniors who are the most powerful voting block there is. Raising taxes on top of all the tax increases we’ve got coming is not good for the economy.
Lady Narrator: Join us for this new edition of Destination Casa Blanca, Thursday, July 2nd, 9 PM, Eastern Time and 6 PM, Pacific Time with an encore at 12 midnight Eastern Time, Pacific Time. Only on HITN educates and entertain.
Do you believe Social Security will be there for you when you retire?
Loading ...The Need for Social Security
Lady Narrator: While the economy worsens, the future of Social Security remains uncertain. As many baby boomers approach retirement age, the funds are shrinking and expected to vanish. At the Covello Senior Center, many retirees share their concerns about this problem.
Milagros Ruiz: You know, we need that check. What are we going to live for? I will be in the street because how would I afford gas, electricity and other bills. How else would I be if not for that? Maybe I will have to live in a shelter.
Lady Narrator: Some economists say the future problems Social Security faces are due to the spending and lending of the $1.5 billion in surplus it had into the less people paying taxes after all baby boomers retire. Those who depend on that monthly check talk about what it would be like without it.
Maria Rivera: It will be very difficult for me to survive without those benefits because it helps you, you know. It’s part of all the years in the labor force. It’s money that we have worked for and the help we receive here is very important and very essential because without it, life would be even more difficult for us.
Lady Narrator: Keeping in mind the not too positive future the next generations will face when they retire, some of these seniors made a recommendations based on their own experiences.
Jorge Rivera: I wish I would have had a better job when it was time to retire. If I had known, I would have prepared to have a better job and to save money, so that I would have had something set aside for my golden years.
Milagros Ruiz: There are many people who didn’t think and spent all their money instead of saving it for their retirement. They just spent it all, but you should save. That’s why people no longer went to retirement early because they don’t have enough money and they would get less benefits, so they rather work until the last days, but the sad thing is, that those who work the longest, usually die the soonest.
Will Social Security Survive?
Lady Narrator: By the year 2016, Social Security will spend more than it collects in taxes. This gloomy forecast has many wondering if they will get any money once they retire. Although Andres Vido is only a few years away from retiring, he shares this concern.
Andres Vido: In this situation, I would have to continue working. One comes to this country to work and progress to find a better way of life. We hope this new president will take care of this. God help him, so he could be able to defend us. If not him, who will?
Lady Narrator: He is among the 78 million baby boomers eligible for early retirement benefits at the age of 62. Although he still has three years left, he is afraid to lose his job before then.
Andres Vido: In my job, they have let go of 80 percent of the workers. They have been laid off and right now, we are only working four days.
Lady Narrator: The good news, he says, is that he has done enough not to depend solely on pension benefits.
Andres Vido: I have been working my way up to save money, here and there, with the goal that I don’t face any problems in the future.
Lady Narrator: And thinking about the future is what he says he has done since he came to this country from the Dominican Republic.
Andres Vido: Since I came to this country 15 years ago, I had bought one of my lots 9 months after I got here. I bought a house through the bank and the other ones I had to work so hard for to build them.
Lady Narrator: But not every future retiree is as prepared as Vido, that’s why there was a push for a reform and the options being weighed into saving Social Security include raising the full retirement age from 65 to 67 and raising the cap on wages, so the higher-earning workers pay more. Even though experts say baby boomers have their money secure, only time will tell if Social Security benefits will last for generations to come.
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