4 Ways to Fix Social Security

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4 Ways to Fix Social Security

iStockphoto/The Fiscal Times

August 14, 2015

Social Security celebrates its 80^th birthday today, and the popular program that provides paychecks for 44 million elderly Americans is in need of a safety net of its own.

As the amount claimed by recipients continues to outpace the amount of money contributed by workers, the system will need to dip into its reserves to keep up with its obligations by 2020. Within 15 years after that (if nothing changes), those reserves will be gone and the system will only be able to pay 77 cents on every dollar owed, an amount that will continue to decrease with time.

The problem is even more acute given that future retirees won’t have the same access to pensions that many current retirees use to fund their retirement, and younger workers haven’t saved nearly enough to cover the costs they’ll face when they stop working.

To close the projected gap, the country needs to raise revenue, reduce benefits or some combination of the two. Here are four of the most commonly proposed solutions:

1. Raise the retirement age. For most Americans, the full retirement age (at which you can get full benefits) ranges from 65 through 67. Advocates of this solution would reduce the amount the government pays in Social Security by gradually pushing back the age at which you’re eligible for full benefits.

The drawback: Many Americans are already forced into retirement before they reach age 65. If they claim early and receive reduced benefits they may not have enough money to meet their basic needs. Also, workers in physically demanding jobs many not be able to work those extra years.

2. Raise the payroll cap. Social Security is funded via payroll taxes, which currently are only levied on the first $118,500 of income. That means that high earners effectively pay a much lower rate toward Social Security than others. Hiking or eliminating that cap, advocates say, would create a fairer system and increase revenue.

The drawback: Critics of this solution claim that increasing taxes on middle- and upper-income earners would reduce their income and stifle the country’s economic growth.

3. Institute a means test. While the vast majority of recipients (80 percent, per AARP) rely on Social Security as an integral part of funding their retirement, extremely high net worth individuals don’t need the additional income. This solution would create a net worth or retirement income threshold over which eligibility for social security phases out.

The drawbacks: It could be politically difficult to settle on a threshold, which might vary depending on the geography of a recipient. Plus, this would require people to pay into a system from which they get no benefits.

4. Freeze the cost of living adjustment. Social Security payments have historically been adjusted based on inflation as measured by the Consumer Price Index. This has been minimal in recent years, but the long-term, compounding effect of inflation makes this provision incredibly expensive.The drawbacks: For many people, Social Security is the only inflation-linked retirement income stream that they have. Limiting it could push some retirees over the financial edge as prices rise.

The 15 Most Valuable NFL Teams

<p>The Lone Star State easily makes the list, since doesn’t have an individual income tax, but in almost every other area, Texas ranks poorly: It comes in at 38th for corporate taxes, 32nd for property taxes, and 36th for its sales tax of $6.25 percent.

REUTERS/Mike Stone

By Millie Dent

September 10, 2015

The New England Patriots may be reigning Super Bowl champs and have the most successful quarterback-coach pair in NFL history -- Tom Brady and Bill Belichick each have four championship rings with the Pats -- but they’re missing something nevertheless.

As they kick off the season tonight against the Pittsburgh Steelers, the Pats aren’t at the top of the NFL in terms of team value. That title still goes to the Dallas Cowboys, according to an analysis at Forbes.

Dallas must be feeling pretty good about beating New England at something. They had the same regular season record as the Patriots last year, with 12 wins and 4 losses, but ended the season with a loss to the Green Bay Packers in the divisional playoffs, while the Pats went on to win Super Bowl XLIX (that’s 49 for all you non-Romans out there).

Even though the Washington Redskins have been playing pretty pathetically for the past decade, they still come in third. Washington’s NFC East rival, the New York Giants, rank fourth at $2.1 billion.

Here are the 15 most valuable NFL teams:

Dallas Cowboys - $3.2 billion
New England Patriots - $2.6 billion
Washington Redskins - $2.4 billion
New York Giants - $2.1 billion
Houston Texans - $1.85 billion
New York Jets - $1.8 billion
Philadelphia Eagles - $1.75 billion
Chicago Bears - $1.7 billion
San Francisco 49ers - $1.6 billion
Baltimore Ravens - $1.5 billion
Denver Broncos - $1.45 billion
Indianapolis Colts - $1.4 billion
Green Bay Packers - $1.38 billion
Pittsburgh Steelers - $1.35 billion
Seattle Seahawks - $1.33 billion

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A Military Coup in the U.S.? A Surprising Number of Americans Might Support One

$<p>Significant defense savings can be achieved by simply relocating a fraction of our troops in Europe to the United States. The Cold War ended more than 20 years ago, and we no longer need to station troops in Europe to hold the line against the Soviet$

Getty Images

By Millie Dent

September 10, 2015

Imagine you’re watching the evening news, kicking back after a long day in the cubicle. Suddenly a breaking news alert flashes across the screen: “Military Coup Overthrows the Government.” What would be your reaction?

While most Americans say they can’t imagine supporting a takeover of the government by the armed forces, or least aren’t sure about it, a substantial number of people say they can imagine supporting the military in such a scenario.

In a new survey by YouGov, 29 percent of respondents said they can imagine a situation in which they would support the military taking control of the federal government – that translates into over 70 million American adults. Forty-one percent of respondents said could not imagine supporting the military taking over the country.

Republicans (43 percent) were more likely to say they can envision a scenario in which they could support a military coup than Democrats (20 percent). Perhaps that difference is related to having a Democratic president who some critics on the right see as overstepping his power.

Regardless of political ideology, one reason people might support a military coup is because they respect officers in the military far more than they do people in Congress. According to the same YouGov survey, almost three-quarters (70 percent) of respondents believe that military officers want what is best for the country, while only 29 percent think the same of members of Congress.

Lawmakers better shape up or they might be shipped out -- literally.

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Sanders Pulls Ahead in Iowa, but a Tougher Clinton Aims to Even the Score

Democratic presidential candidate and U.S. Senator Bernie Sanders addresses the Democratic National Committee (DNC) Summer Meeting in Minneapolis, Minnesota

By Martin Matishak

September 10, 2015

A new poll unveiled Thursday finds populist Bernie Sanders squeezing past Hillary Clinton for the first time as the preferred choice among likely Iowa caucus-goers.

The survey by Quinnipiac University shows the Vermont lawmaker receiving 41 percent, while Clinton garnered 40 percent. The figures put Sanders’ lead well within the poll’s 3.4 percent margin of error, but the numbers serve as another indication of how tight the Democratic primary has become, especially in Iowa where Clinton has long maintained an advantage.

The poll found another 12 percent of voters would support Vice President Joe Biden, who has yet to decide if he will enter the 2016 race. Former Maryland Governor Martin O’Malley received 3 percent, and the same number were undecided.

While many could view the survey as the latest sign Clinton’s campaign is flailing, the timing of the poll could prove crucial.

The study was conducted between August 27 and September 8. That was the same day the former secretary of State told ABC News that using a personal email account while in office was a mistake and that she is sorry for it.

“I do think I could have and should have done a better job answering questions earlier. I really didn’t perhaps appreciate the need to do that,” Clinton said. “What I had done was allowed, it was above board. But in retrospect, as I look back at it now, even though it was allowed, I should have used two accounts. One for personal, one for work-related emails. That was a mistake. I’m sorry about that. I take responsibility.”

The interview marked the first time she apologized for her unique email arrangement. Questions over Clinton’s use of a private server have dogged her candidacy since she entered the White House race earlier this year.

Republicans have used the controversy surrounding the server to paint Clinton as untrustworthy and unfit to serve in the White House.

Indeed, Thursday’s poll found that while Clinton is still liked among Democratic voters who believe she would make a good leader, Sanders fares better on the question of trustworthiness.

The Quinnipiac poll also closed before Clinton gave a muscular foreign policy speech at the Brookings Institution on, among other things, the Iran nuclear deal.

“We should anticipate that Iran will test the next president,” she said. “They'll want to see how far they can bend the rules.”

“That won't work if I'm in the White House. I'll hold the line against Iranian noncompliance,” Clinton added.

On the softer side of things, Clinton’s interview on “The Ellen DeGeneres Show” will air Thursday afternoon. The appearance will give her a chance to connect with female voters who are the backbone of her support.

Taken together, the various actions could put Clinton back atop the polls, at least in Iowa, and help her gain back ground she lost to Sanders in New Hampshire as well.

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College Students Say They’re Good with Money. Do You Believe Them?

iStockphoto

By Beth Braverman

September 10, 2015

A new study confirms it: College students think they know everything, at least when it comes to personal finance.

Nearly 60 percent of college students said that they had good or excellent financial literacy skills, according to a study released today by the American Institute of CPAs.

Despite that confidence, less than half of students say they stick to a monthly budget, nearly 40 percent had borrowed money from friends or family and more than 10 percent had missed a bill payment.

Of those surveyed, 99 percent said that personal financial management skills were important, but only a quarter said they seek out information on personal finance and incorporate it into their spending and saving habits.

“For many students, college is their first time making financial decisions,” Ernie Almonte, chairman of the AICPA’s Financial Literacy Commission said in a statement. “With this opportunity comes serious responsibility, and if they aren’t making informed, intelligent decisions it can have a negative impact on the rest of their financial lives.”

College students without a strong foundation in personal finance are more likely to take on risky debt or make poor saving decisions. But most students aren’t getting the education they need before they get to campus.

Just 17 states require high school students take a personal finance course, and only six require testing of personal finance concepts, according to the Council for Economic Education. Three out of four American teens can’t even make sense of a paystub.

But hey, at least they’re confident.

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How Can You Tell There Are Russian Troops in Syria? Just Look for Some Soldier Selfies

By Millie Dent

September 9, 2015

Although Russian President Vladimir Putin has denied that he is sending troops to Syria, selfies taken by Russian soldiers and posted on social media are telling a different story.

Russian investigative journalist Ruslan Leviev reports that an increasing number of experienced Russian troops have been deployed to a naval maintenance facility in Tartus, along Syria’s Mediterranean coast. His source? Status updates and photos posted on Russia’s two biggest social networking sites by members of the 810th marine brigade, an infantry force in the Russian navy.

One photo Leviev found is of a career soldier named Mazhnikov, who appears to be at the naval facility in Syria. Another soldier, Anatoly Golota, also a member of the 810th brigade, updated his status on the Russian version of Facebook with the words, “Off to Syria :)).”

Russia has not denied that it’s been supplying weapons to the Syrian government and helping train the Syrian military. But Putin knows that combat troops are a different story.

The naval maintenance facility at Tartus is small, and in the past has been manned by just a handful of personnel. Leviev reports that the number of troops stationed at the facility is growing, and the troops are experienced contract soldiers, not draftees.

Videos uploaded to social media sites have raised concerns that Russian troops might be involved in combat inside Syria, according to an article in Foreign Policy. However, beyond the footage, which shows a Russian-made BTR-82A armored vehicle firing its gun in Syria, no other substantial evidence of active combat involving Russian troops has been found.

While the marines may or may not be directly involved in the fighting, the presence of Russian troops in Syria shows how hard Putin is pressing for a victory by the Assad regime. Now if he can just teach his soldiers how to avoid giving themselves away on social media.

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