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cjc
Citizen
Username: Cjc
Post Number: 3005
Registered: 8-2003
| | Posted on Thursday, January 13, 2005 - 11:05 am: | 
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Yes, those kids do understand money these days -- more than their parents did. That's why according to the polls they back reform and private accounts.
The employer may or may not let you have that 'other half' of the FICA tax depending on how you negotiate things, but the fact remains that that 7% is figured into the cost of hiring a person. Or, if he didn't have to pay that FICA tax into a losing system, he just might expand his business by hiring or making capital improvements. However, the self-employed DO pay the whole tax, and yes they would take that other 7% and keep it or invest it in their business.
Since the belief system says the employer has to pay that 7%, we could mandate that 7% be withheld into a private account and pretend the worker is getting money that really isn't his. |
Rastro
Citizen
Username: Rastro
Post Number: 609
Registered: 5-2004
| | Posted on Thursday, January 13, 2005 - 1:16 pm: |
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They back reform and private accounts for the same reason I do (though you wouldn't know it from my posts, I'd guess). It's basic economics. They don't believe they'll ever get anything out of SS, and if they privatize the accounts, they figure they'll get something. Pure dollars and sense.  I doubt there's much thought to social policy or whether it's "the right thing to do."
And the 6.2% from the employer is NOT the employee's, nor is it "pretending" anything to say it's not. It's the employer's money. If the employer wants to give it to the employee, that's fine. But that's a salary increase that the employer has to agree to give. It's not like salaries would magically increase by 6.2% if FICA payments by employers were eliminated.
What I do find interesting, through all this, and that the administration either passed, or is considering (I can't do the research right now) reducing or eliminating the tax benefit to employers for providing health care coverage. I don't want to change the subject, but I kinda feel like they're giving with one hand, and taking away with the other. |
ashear
Supporter
Username: Ashear
Post Number: 1643
Registered: 5-2001
| | Posted on Thursday, January 13, 2005 - 2:06 pm: |
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If the President's argument is so good why does he feel the need to lie.
quote:Fact-checking Bush on Social Security
President exaggerates problems in retirement system
By Rex Nutting, CBS.MarketWatch.com
Last Update: 4:20 PM ET Jan. 11, 2005
WASHINGTON (CBS.MW) - President Bush made several factual errors Tuesday about Social Security's long-term financing problems at a photo op event designed to educate the public about the retirement system.
Bush is expected to offer a plan in the next few weeks to cut future benefits and to divert about one-third of Social Security's tax revenues into individual private savings accounts in order to "save Social Security." See full story.
Before a specific plan is unveiled, the White House is holding a series of events to convince the public that the system must be radically altered to prevent a crisis.
According to the Social Security Administration and the Congressional Budget Office, the retirement system faces long-term funding problems, amounting to about 0.7 percent of gross domestic product over the next 75 years, or $3.7 trillion. Read the Social Security trustees report here. Read the CBO's analysis here.
The SSA says the system's trust fund, financed by payroll taxes and interest payments, will probably be exhausted in 2042, requiring the government to reduce benefits by about a fourth or a third. The CBO says the fund will be exhausted by 2052.
Bush vs. facts
Bush: "As a matter of fact, by the time today's workers who are in their mid-20s begin to retire, the system will be bankrupt. So if you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now."
The facts: The Social Security system cannot go "bankrupt," for it has no creditors. By law, the trustees will continue to pay reduced benefits even if the trust fund is exhausted. Payroll taxes will continue to come in and benefits will continue to be paid.
According to the trustees' intermediate economic forecast (neither doom nor boom), the trust fund will be able to pay about 73 percent of scheduled benefits in 2042 and about 68 percent of scheduled benefits in 2078.
Future presidents and Congresses could also choose to fully fund scheduled retirement benefits from general tax revenue.
Bush: "Most younger people in America think they'll never see a dime."
The facts: Social Security says younger people will see a lot more than a dime. Their retirement benefits - even under a "flat-bust" system -- will be significantly higher than today's benefits in real terms.
For low-income Americans, currently scheduled benefits for those who retire in 2080 are $19,906 per year in 2004 dollars. If Social Security can pay only 68 percent of those benefits, that would be $13,536 per year, compared with benefits of $8,804 for low-income retirees who retired last year.
For the highest earners, Social Security is currently promising $53,411 per year for those who retire in 2080 (or $36,319 per year if Social Security can pay only 68 percent). Current maximum benefits are $21,891 per year for those who retired last year.
Bush: "In the year 2018, in order to take care of baby boomers like me and -- (laughter) -- some others I see out there -- (laughter) -- the money going out is going to exceed the money coming in."
The facts: According to the SSA, costs are projected to exceed income, including tax revenues and interest income from the trust funds' bonds, starting in 2028, not 2018. The 2018 date is when tax revenues alone no longer meet costs; workers have been paying extra taxes since 1983 to build up the trust funds' assets for just this eventuality.
Bush: "The problem is, is that times have changed since 1935. Then, most women did not work outside the house, and the average life expectancy was about 60 years old -- which for a guy 58 years old, must have been a little discouraging. Today, Americans, fortunately, are living longer and longer. I mean, we're living way beyond 60 years old, and most women are working outside the house. Things have shifted."
The facts: According to the SSA, the life expectancy for a 65-year-old man in 1940 was 76.9 years. Today, a man aged 65 can be expected to live to 81. Most of the increase in life expectancy in the past half century has been for infants, not for the elderly.
The increase in the percentage of women working outside the home has boosted Social Security's resources, rather than depleted them. Today, many women who worked receive a widow's pension rather than their own earned benefits. All the payroll taxes they paid are funding someone else's retirement.
http://cbs.marketwatch.com/news/story.asp?dist=¶m=archive&siteid=mktw&guid=% 7B6D56656B%2DD357%2D4082%2DBD70%2D35F6E6D0AA71%7D&garden=&minisitee= |
Michael Janay
Citizen
Username: Childprotect
Post Number: 1440
Registered: 1-2003
| | Posted on Thursday, January 13, 2005 - 2:09 pm: |
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Rastro,
You are right, the employer contribution is definetly the employers, it wouldn't magically appear in the employees salary if it were eliminated. The thing is that salaries on the whole are lowered because of it, but not proportionately.
As for the tax benefit for health care, this is one of the admins proposals that I think is truly the most forward thinking and revolutionary. Right now the employer receives a tax benefit for offering health care to their employees. It is cheaper to insure a group than individuals because the risk is spread across the group. Thats one of the reasons you need to be in a group to get the coverage... since employers get the tax benefits, your employer is pretty much the only group you can get in to (sure there are others, but the savings are minimal because the plans cost so much, mainly because there are no tax benefits to the planholder).
The Administration wants to move the tax benefits from corporations to individuals. So you'll be able to buy insurance from whatever group you want to join, and it will be tax creditable. That is HUGE! Not only would you be able to join a group of your choice that may even qualify you for lower rates (like the non-smokers, nondrinkers, exercisers), but it would be a credit against your taxes. Anyone could join a group (as long as the group accepts them) and buy their insurance. Plus, individual insurance would be far more affordable because there would be a very sizable group of independents that companies could spread the risk over.
That along with HSA's would truly reform American healthcare for the better.
Now of course, people that pay nothing for their coverage will hate it. And you could say there is no way to assure that employers will give the money they are spending on healthcare to employees, and you'd be right. But benefits are something that people look very closely at when looking for and accepting a job. Employers know this and would have to compete.
It would be a great improvement. |
Michael Janay
Citizen
Username: Childprotect
Post Number: 1441
Registered: 1-2003
| | Posted on Thursday, January 13, 2005 - 2:30 pm: |
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The facts: The Social Security system cannot go "bankrupt," for it has no creditors. By law, the trustees will continue to pay reduced benefits even if the trust fund is exhausted. Payroll taxes will continue to come in and benefits will continue to be paid.
Of course it has creditors. The citizens of the United States who have lent the system money expecting that investment to be returned.
WE ARE THE CREDITORS!!
Future presidents and Congresses could also choose to fully fund scheduled retirement benefits from general tax revenue.
That is exactly what reformers are trying to avoid. If the system can't sustain itself it must be changed.
According to the SSA, costs are projected to exceed income, including tax revenues and interest income from the trust funds' bonds, starting in 2028, not 2018. The 2018 date is when tax revenues alone no longer meet costs; workers have been paying extra taxes since 1983 to build up the trust funds' assets for just this eventuality.
So in other words 2018 is when the money going out is going to exceed the money coming in, but because we've been overpaying in to the system for years, we can get another 10 years out of this failing system.
Great, I feel better already.
I'm not even going to get in to the "projected benefits" as no one believes they will remain accurate.
According to the SSA, the life expectancy for a 65-year-old man in 1940 was 76.9 years. Today, a man aged 65 can be expected to live to 81. Most of the increase in life expectancy in the past half century has been for infants, not for the elderly.
According to Infoplease and this chart http://www.infoplease.com/ipa/A0005148.html\ which Sources: National Center for Health Statistics, National Vital Statistics Reports, vol. 52, no. 3, Sept. 18, 2003. Web: www.cdc.gov/nchs .
The life expectancy for men in 1935 was 59.9 and in 1940 was 60.8.
The increase in the percentage of women working outside the home has boosted Social Security's resources, rather than depleted them. Today, many women who worked receive a widow's pension rather than their own earned benefits. All the payroll taxes they paid are funding someone else's retirement.
Mmmm, OK, thats fair. That right there is a reason for private accounts... Little lady, you worked hard all your life and paid in to the system, but since you were married, and now your husband is dead, we're going to just give you widows benefits... you know, the money your late husband paid in. We're giving your money to someone else.
Thank god Bush is our president. |
Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 963
Registered: 8-2003
| | Posted on Thursday, January 13, 2005 - 4:15 pm: |
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quote:WE ARE THE CREDITORS!!
mj, why the shouting? Are you screaming like that about the current federal budget deficit, for which we are also the creditors?
I thought "deficits don't matter." Why not just run bigger deficits to pay for SS? Won't putting that money in the pockets of seniors stimulate the economy, and ultimately increase treasury revenues? Or is that argument only operational as a rationale for tax cuts? |
cjc
Citizen
Username: Cjc
Post Number: 3006
Registered: 8-2003
| | Posted on Thursday, January 13, 2005 - 9:16 pm: |
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I understand the urge to shout. To some, there is no issue with Social Security -- it's not a crisis -- even though actuarily we can prove the water is rising up to our necks due to the inadequacies of the system as the problem becomes more expensive to fix with each year of delay. But global warming -- which can't be empiracally proven (the warmest year on record was 1998 which was 7 years ago) -- is something we of course have to do something about right away.
It's maddening. Hence, the shouting. |
Nohero
Citizen
Username: Nohero
Post Number: 4253
Registered: 10-1999
| | Posted on Thursday, January 13, 2005 - 9:46 pm: |
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"But global warming -- which can't be empiracally proven (the warmest year on record was 1998 which was 7 years ago) -- is something we of course have to do something about right away."
Of course. And arguing that the problems with Social Security can only be solved with the President's scheme for private accounts, is like saying that global warming can only be prevented with a massive effort to control cow flatulance. |
Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 964
Registered: 8-2003
| | Posted on Thursday, January 13, 2005 - 10:38 pm: |
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cjc,
instead of going off on a tangent about global warming, how about addressing this central question -
how come it's ok for the government to borrow money to finance tax cuts? in fact, conservative theory says that borrowing will ultimately lead to greater treasury revenues because the economy will be stimulated.
BUT - the government shouldn't borrow to finance a SS deficit. why not? wouldn't borrowing to pay the obligations to retired people stimulate the economy in a similar way to tax cuts? shouldn't running SS at a deficit actually lead to increased revenues that can then pay off those debts?
or is that whole "tax cuts lead to greater revenue" thing just a bunch of hogwash? |
cjc
Citizen
Username: Cjc
Post Number: 3007
Registered: 8-2003
| | Posted on Friday, January 14, 2005 - 11:09 am: |
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You brought up shouting, I did not. There are many reasons for it, and I gave one.
If you borrow to temporarily plug the hole of Soc. Security, that's just a temporary fix. Given the demographics of our country going forward, you'll still have fewer and fewer workers paying for more and more retirees and you can't sustain the system. As well, you won't get more tax revenues unless you increase the tax rates on those fewer and fewer relative to retired workers as it's capped at 12+%. And you'll have to borrow, borrow and continue to borrow.
Which brings us to the platform of Democrats if they'd have the guts to admit it. "We will raise your taxes and provide you fewer benefits and you can leave less and less to your grandkids." That goes along with "We don't have to do anything yet. Ignore what Bill Clinton said." And I quote via the Boston Globe today from Clinton's OMB at the time:
"In 2000, President Clinton's Office of Management and Budget made a similar point. "These [trust fund] balances are available to finance future payment . . . only in a bookkeeping sense," the OMB wrote in a report. "They do not consist of real economic assets that can be drawn down in the future to pay benefits. Instead they are claims on the Treasury, that when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures."
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Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 966
Registered: 8-2003
| | Posted on Friday, January 14, 2005 - 11:42 am: |
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my point is, why can't the SS shortfall be funded out of the general budget? it seems that if deficits are ok today, and the economic stimulus they provide theoretically leads to greater tax revenue, why not do the same in 40 years? run a deficit, borrow to finance it, and pay it back with all that increased revenue that would theoretically be generated when the seniors spend their SS checks.
and more to the point, why is the idea that SS will run at a deficit in 40 years a "crisis," but adding to the federal deficit today to pay for a tax cut is not?
why is running SS at a deficit until the Boomers all die off seen as any more of a crisis than any other budget deficit we face? |
berry festival
Citizen
Username: Berry_festival
Post Number: 114
Registered: 9-2003
| | Posted on Friday, January 14, 2005 - 11:50 am: |
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HEY DOC,
PLEASE DON'T TRY TO BE LOGICAL AND CONSISTENT.
These traits are not approved of by the current administration. |
Michael Janay
Citizen
Username: Childprotect
Post Number: 1448
Registered: 1-2003
| | Posted on Friday, January 14, 2005 - 12:58 pm: |
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Deficits don't provide economic stimulus, tax cuts do.
Increased revenue won't be recognized from seniors SS checks because they won't be investing the SS money in long term assetts (why would they, the golden years are the time to spend your investments). Plus economic growth comes from letting earners keep their money and invest it, not taking it and redistributing it to someone else.
That little 600$ check that the dems pushed through caused a litle blip of growth, but once the tax cuts on capital and dividends kicked in, the economy caught fire. Why? because earners got to keep more of their earnings and they were able to invest it. That grew GDP and revenue.
Also a current accounts deficit is far different from running a program at a loss, which is what SS will be doing. The problem isn't only the boomers, but a fundemental issue with the structure of the SS system. It won't be able to recover.
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Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 969
Registered: 8-2003
| | Posted on Friday, January 14, 2005 - 1:17 pm: |
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how do you know what people are going to do with their money?
theoretically, any money the govt borrows and distributes to citizens should stimulate the economy. even if senior don't personally invest it, they'll be spending it at businesses that can reinvest the cash to expand or modernize (again, theoretically).
frankly, I even think what I'm proposing is nutty. but Bush can't make one argument about tax cuts and borrowing being a stimulus in one arena, and then turn around and wail that a different govt deficit is a crisis. that, and all of his phony data on other topics over the past 4 years means he has spent all his credibility, and the wise skeptic is loathe to believe his Chicken Little pronouncements, and look instead to the GAO or another source for info. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 5139
Registered: 1-2003
| | Posted on Friday, January 14, 2005 - 1:20 pm: |
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Michael wrote:
quote:[E]conomic growth comes from letting earners keep their money and invest it, not taking it and redistributing it to someone else.
That is sometimes true. Maybe even often. Maybe even most of the time. Maybe even the vast majority of the time. But it is not always true. I notice you hold onto your beliefs tenaciously. Be careful about that.
Income disparity is growing. I see that as a bad thing. The fact that the economy is growing as a whole and income disparity is growing mixed news, both good and bad. An individual doesn't always care about the economy. He cares about his own situation. Therefore, news about the macro-economy isn't the only important thing, though it is important. |
Michael Janay
Citizen
Username: Childprotect
Post Number: 1451
Registered: 1-2003
| | Posted on Friday, January 14, 2005 - 2:13 pm: |
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How do i know what they are going to do with their money? I look at what seniors today are doing with it. It doesn't make sense for seniors to invest in high risk high growth equities. They want (as they should) secure income generating well diversified bond funds (mainly).
That doesn't generate economic growth.
If the government were to just borrow the money for SS in the future, it would be far better than increasing taxes... of course at some point taxes would have to rise because the growth generated (if there was any at all) by pumping this borrowed money into the economy would be far too small to justify the continued debt.
This is the classic arguement between supply siders and demand siders. Of course Demand side economics never works to grow the economy and Supply side has generated the astounding growth we've winessed in the last year.
Bush can't make one argument about tax cuts and borrowing being a stimulus in one arena, and then turn around and wail that a different govt deficit is a crisis.
Of course he can because they are two totally different things. The Bush tax cuts were designed to stimulate economic growth and they have done that. Its like taking out a loan to re do your kitchen... that year your budget is in deficit, but you do it so your assetts will be worth more in the long term.
SS deficits are structural problems in a system that not only isn't designed to stimulate growth, but causes economic contraction.
The system needs to be fixed.
And this is for Tom:
I firmly believe in my positions, but I also realize that there are no absolutes.
With that though, I'd love it if you could point out one example of actual economic growth, anywhere in the world, that came from taxing earners and redistributing that money to the poor.
Many countries have tried, but not one has succeeded. Look at whats happenning in Europe. The socialized countries are mired in recession or periods of incredibly low growth. This is BECAUSE of their tax policies and the entitlements that come with the income redistribution. Look at Israel. Their economy was going nowhere until they virtually ELIMINATED taxes on tech corporations. Now the tech industry is booming yet other industry there is stagnant.
As for income disparity, its no ones business how much I make relative to anyone else. As a whole, incomes are rising. Some faster than others, so what. A rising tide lifts all boats. Why does someone care if he gets a raise that is not as big as bill gates dividends? As long as he gets the raise. |
Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 970
Registered: 8-2003
| | Posted on Friday, January 14, 2005 - 2:55 pm: |
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actually mj, since the US didn't invest in any capital improvements, and just gave it back to citizens, the tax cuts were not like borrowing to fix your kitchen. it was more like borrowing to pay your grocery bill.
And we weren't told to save or invest our tax cut, we were told to SPEND it, and stimulate the economy.
so I still don't see how that's different from borrowing to send checks to retirees.
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Michael Janay
Citizen
Username: Childprotect
Post Number: 1453
Registered: 1-2003
| | Posted on Friday, January 14, 2005 - 4:02 pm: |
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Doc,
Once again, the measly little check you got did little to help the economy. But that was the compromise GWB had to make to get the Dems on board. Its the business, dividend, and capital tax cuts that were and are a direct investment in the economy. They are the ones that injected fire into the economy.
The across the board income tax cut was the easiest for people to understand, but it also did the least, not that id did nothing, but it was the least responsible for the economic recovery.
It may be hard for you to understand, but YOUR tax cut has very little effect on the economy. It IS the tax cuts for corporations and the "rich" (not neccessarily the income tax cuts but the dividend and capital cuts) that do the job. You getting a little back and spending it helps a little, but not nearly as much as helping companies buy capital goods and hire emploees, or encouraging people to invest in stocks.
And your entire premise is false anyway... we aren't borrowing to give money back... we're not taking it in the first place, and then borrowing to fund other programs.
Taking peoples money then borrowing even more just so you can give a little back seems silly doesn't it? Why not just let them keep it in the first place?
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Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 971
Registered: 8-2003
| | Posted on Friday, January 14, 2005 - 4:26 pm: |
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quote:It may be hard for you to understand
I love when people on this board choose to condescend to people they don't even know.
I understand enough to know that Bush's arguments regarding the stimulative value of his tax cut were as questionable as his trumped up SS "crisis." |
Michael Janay
Citizen
Username: Childprotect
Post Number: 1455
Registered: 1-2003
| | Posted on Friday, January 14, 2005 - 4:45 pm: |
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So where did this record setting economic growth come from?
France? |
Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 972
Registered: 8-2003
| | Posted on Saturday, January 15, 2005 - 11:03 am: |
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your pithy responses notwithstanding, the onus is not on me to prove the tax cuts didn't have an effect, the onus is on you and other tax cut proponents to demonstrate that it DID have an effect.
Aside from 3Q '03's extraordinary growth, U.S. GDP growth hasn't been anything unexpected. The norm, throughout history, has been growth. And since WWII, recessions have tended to be short and shallow. The null hypothesis is that the tax cuts had no effect on growth, which would have occurred anyway. It's up to the tax cut supporters to disprove that null hypothesis. |
Joe
Citizen
Username: Gonets
Post Number: 625
Registered: 2-2004
| | Posted on Saturday, January 15, 2005 - 3:00 pm: |
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Why would cutting taxes for the rich have any effect on the economy? One of the nice things about being rich is that during good times and bad you can spend freely, because you're rich even if others aren't doing so well. I might buy the notion that cutting taxes for corporations might help the economy, but I think you're ignoring the fact that businesses have corrected a lot of their imbalances during the downturn. Cutting workforce, allowing inventories to dwindle, etc. Since they've cut expenses they can start hiring again and restocking their wharehouses. Any bounceback in the economy is largely owing to the cyclical nature of the economy, but for obvious reasons you want to act as though all the doing of GWB. |
Face
Citizen
Username: Face
Post Number: 490
Registered: 5-2001
| | Posted on Monday, January 17, 2005 - 3:00 pm: |
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Do you believe in equal results? Or do you believe in a system that guarantees equal opportunity?
Furthermore do you believe that the government should own and control our retirement accounts? Or do you feel that each individual should have control?
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Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 981
Registered: 8-2003
| | Posted on Monday, January 17, 2005 - 3:33 pm: |
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I control my 401(K) and other investments earmarked for retirement. I think it's perfectly reasonable for the govt to control a national pension fund. |
cjc
Citizen
Username: Cjc
Post Number: 3019
Registered: 8-2003
| | Posted on Monday, January 17, 2005 - 8:48 pm: |
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The only difference between the government's 'pension' of Social Security and the steel companies that have gone south making guarantees by ERISA dubious is that the government can go and pilfer the pockets of taxpayers if they mismanage or miscalculate what they promise retirees by passing an act of legislative theft.
Screw pensions. Give me the money, and I'll take care of myself, thanks. |
Bobkat
Supporter
Username: Bobk
Post Number: 7254
Registered: 5-2001
| | Posted on Tuesday, January 18, 2005 - 4:13 am: |
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Cjc, that is naive. If a company discontinues its pension plan, or as is the case with most high tech companies doesn't offer one, the employees never see a dime. |
Dr. Winston O'Boogie
Citizen
Username: Casey
Post Number: 983
Registered: 8-2003
| | Posted on Tuesday, January 18, 2005 - 11:28 am: |
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thanks for being so blunt cjc. I'll readily admit that I have no rebuttal that would satisfy someone who refers to taxes as "theft." |
Tom Reingold
Supporter
Username: Noglider
Post Number: 5152
Registered: 1-2003
| | Posted on Tuesday, January 18, 2005 - 11:30 am: |
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And once you realize what kind of ideologue you are dealing with, you know whether arguing with him is worth your time. |
Chris Prenovost
Citizen
Username: Chris_prenovost
Post Number: 271
Registered: 7-2003
| | Posted on Tuesday, January 18, 2005 - 12:55 pm: |
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We seem to be getting off topic a little here. . .surely a first on MOL.
Social Security was created by FDR as an anti-poverty program for the elderly. It worked.
The problem now is that people see it as an entitlement, and make no effort whatsoever to save any money for their retirement.
And the idea that deficits are better for the economy that taxes flies in the face of logic. Deficits have to be paid back, and that means taxes. Deficits mean interest, and that means taxes. A lot of the Federal Government's bonds are held by foreigners, and that means a lot of our bucks are going overseas to finance that deficit. Not a good idea.
Deficits are the equivalent of a large credit card balance. Also not a good idea. |
Mark Fuhrman
Citizen
Username: Mfpark
Post Number: 1153
Registered: 9-2001
| | Posted on Tuesday, January 18, 2005 - 1:33 pm: |
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I doubt anyone is using SS as a conscious retirement plan or an alternative to one. There are lots of good reasons why people do not save for retirement--mostly because they cannot afford to, given housing and health care costs.
Social security is, at best, a finger in the dyke against future poverty--not a retirement plan.
It is also an implicit social contract that says when we get old, if we are poor, society will do something--however meager--to help us feed and clothe and house ourselves. I really don't care how we do this--SSI, private accounts, taxes or charity--but I do believe we have a moral obligation to take care of the poorest and weakest among us--if for no other reason than to keep society intact.
I also think that relying on charity risks the problem of the "free rider"--wealthier people will not voluntarily contribute uniformly to social needs, figuring that someone else will do it. And so there needs to be some compulsion on the part of society so that those with the means contribute at least minimally to promote social harmony. That is one reason we have government--it is not legislative theft, it is rational social management (or could be if implemented properly). Religious traditions of tithing work similarly.
I know this must make cjc's hair curl. |
cjc
Citizen
Username: Cjc
Post Number: 3023
Registered: 8-2003
| | Posted on Tuesday, January 18, 2005 - 8:44 pm: |
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The naivete that I was cured of from my earliest days if that when someone says they have your best interests at heart and will promise to provide for you in your old age -- be it a pension or Social Security -- don't believe them. My teachers were right on both counts.
Chris is right. I spoke to someone the other day that tried to sell private insurance projects geared to providing retirement income long ago. He was told at the time "no thanks. I've got Social Security." Too bad the government didn't disabuse them of that notion. Just never got around to it I guess. That, and it undercut an implied security that politically advantageous even though it was unrealistic.
And yes -- I'm not against the government providing a meager, subsistenance safety net. However, it's never been sold as that. Witness it's rise geared to the rise in wages and not prices, which isn't at all sustainable given the structure of the program.
Deficits do have to be paid back. That doesn't mean you have to raise taxes to pay them. You can grow the economy, as Reagan and Kennedy proved when the lowered marginal rates and the economy grew increasing revenues to the Treasury. In Reagan's case -- it nearly doubled revenues by the end of his Administration. (who's hair is curling now?).
Deficits are a spending problem anyway. You don't spend it, you don't owe it. If your revenues grow and you outspend the growth, that's not the fault of the growing revenues. |
cjc
Citizen
Username: Cjc
Post Number: 3024
Registered: 8-2003
| | Posted on Tuesday, January 18, 2005 - 8:52 pm: |
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And the best news of the day is the ABC/Washington Post poll out. The overall perception of Bush on social security is negative, BUT...the argument is proceeding nicely.
"Those surveyed gave Bush negative marks -- 38 percent approval vs. 55 percent disapproval -- for his handling of the Social Security issue, and three in five said the system will not have enough money to pay benefits by the time they retire. But by 54 percent to 41 percent, the public supported a plan that would include a reduction in the rate of growth of guaranteed benefits and private savings accounts financed with a portion of payroll taxes. A proposal with those elements is under consideration by the Bush administration."
Also in the poll, almost 7 in 10 say Democrats should compromise with the president. Also, a clear majority think Social Security is facing funding problems, and the analysis says the Democrats risk being out of step with their own party by insisting there is no impending crisis.
Let's roll!
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Bobkat
Supporter
Username: Bobk
Post Number: 7271
Registered: 5-2001
| | Posted on Wednesday, January 19, 2005 - 5:56 am: |
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Did we ever have a surplus during the Reagan years? Didn't think so.
I think with the plunging dollar we have to worry about the deficiet since most of it is financed abroad and interest rates will have to skyrocket to give these investors an adequate return in their base currencies.
I kind of like Lindsay Graham's proposal which would finance most of the cost by raising the base salary amount subject to social security taxes. |
Mark Fuhrman
Citizen
Username: Mfpark
Post Number: 1156
Registered: 9-2001
| | Posted on Wednesday, January 19, 2005 - 9:15 am: |
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bob: That is what will happen in the end, I am willing to wager. Most House Republicans do not want to touch benefits, are leery about privatization's impact on short-term deficit. They are more interested in cutting taxes now.
I can see an easy compromise happening. The SS salary level is increased (effectively a tax on moderate incomes, yet again), and then other taxes are cut (unfortunately mostly benefitting the very wealthy yet again). Repubs will claim victory on fixing SS, while also cutting taxes again. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 5187
Registered: 1-2003
| | Posted on Wednesday, January 19, 2005 - 2:38 pm: |
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Check out Krugman's column from yesterday. |
Bobkat
Supporter
Username: Bobk
Post Number: 7282
Registered: 5-2001
| | Posted on Thursday, January 20, 2005 - 8:10 am: |
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There is an interesting article in the Times this morning. It appears that some GOPers feel taxes have to be raised to pay for this plan.
For the record I buy into the idea of an "Ownership Society" and if benefits are going to be cut the higher probable yields on private accounts might go a long way to making up the difference, assuming that fees can be managed so Wall Street isn't the big winner here. However, I also am a firm believer that "there is no such thing as a free lunch." |
wharfrat
Citizen
Username: Wharfrat
Post Number: 1519
Registered: 6-2001
| | Posted on Friday, January 21, 2005 - 5:16 am: |
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Bobk is onto something when he says, "no free lunch."
Just one of many compelling reasons why Bushes SS program won't work.
quote:The more you pay for an asset, the lower the rate of return you can expect to earn. That's why even Jeremy Siegel, whose "Stocks for the Long Run" is often cited by those who favor stocks over bonds, has conceded that "returns on stocks over bonds won't be as large as in the past."
You can read more, here-
http://www.nytimes.com/2005/01/21/opinion/21krugman.html?oref=login
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Bobkat
Supporter
Username: Bobk
Post Number: 7294
Registered: 5-2001
| | Posted on Friday, January 21, 2005 - 7:58 am: |
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I just had an interesting thought. With the dollar plunging, interest rates rising and the war a real drag on our economy it is possible that switching over to an inflations, rather than wage based, index for SS might backfire.
With outsourcing, etc. real wages aren't really growing. I read a week or so ago that the mean income in NJ went down around 10% in 2002. |
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