Deficit Commission, CBO Scoring and the "Leninist Strategy" for Social Security Reform
by Bruce Webb
I have had occasion before to mention the “Leninist Strategy” for Social Security put forth in 1983 and followed by Social Security ‘reformers’ ever since. The strategy has three main pillars:
One: reassure current retirees that their benefits won’t be cut
Two: convince younger workers that left unreformed Social Security just won’t be there for them
Three: blame the Boomers
Well time has moved on since 1983 and increasingly pillars One and Three are coming into collision and this combined with CBO scoring methodology has put the Deficits Commission into a bind. One which I will outline below the fold.
A central tenet of the Cato endorsed “Leninist Strategy” for Social Security Reform outlined in Butler and Germanis (1983) http://www.cato.org/pubs/journal/cj3n2/cj3n2-11.pdf was that benefits for those in or approaching retirement should not be affected (p.549). This was billed as a matter of equity but was equally a bow to political reality. This tenet was maintained in the establishment of Bush’s CSSS (Commission to Strengthen Social Security) in 2001 as the first of the six Guiding Principles http://govinfo.library.unt.edu/csss/index.htm and most recently is a feature of the Ryan Roadmap which promises to hold at least initial benefits for workers 55 and older harmless.
Unfortunately this consistent upholding of Pillar One of the “Leninist Strategy” is undermining Pillar Three because workers 55 to 64 ARE Boomers and it is pretty hard to hold them responsible for ‘Crisis’ and yet give them a free pass, the rhetorical underpinnings of the “Leninist Strategy” are simply aging themselves out of effectiveness.
Adding to this rhetorical challenge for the ‘reformers’ is a methodological one deriving from CBO scoring. Traditionally both CBO and OMB score proposals over a ten-year time period and only occasionally peak over that horizon. But if as the current Ryan Roadmap does Ryan Roadmap: Social Security and promise that it “Preserves the existing Social Security program for those 55 or older” you get a ten-year CBO deficit score of near-zero. And if you define “preserves” and “existing” as also covering the COLA adjustment you almost equally kill any score for the next ten-year period.
This problem was largely self-created, those pushing for this Commission relied on a deliberate confusion of the concepts of deficit, debt and unfunded liability to use relatively short term deficits to sell’ solutions that realistically only address long-term debt and ‘liability’. In fact the official name of the Commission is Bipartisan National Commission on Fiscal Responsibility and Reform and its mission statement does not explicitly reference ‘deficit’ at all. Yet a search on ‘Obama deficit commission’ pulls up 10X the hits of ‘Obama fiscal responsibility commission’ and most of the latter reference the former anyway. For better or worse the MSM has settled on ‘Deficit Commission’.
A couple of years ago hardly anyone outside the policy world knew or cared much about CBO scoring, but a year of Health Care Reform has accustomed people to use that score as a touchstone. Adhering to the “Leninist Strategy” and the Ryan Roadmap for Social Security will return a big fat Zero as a CBO score. On the flip side most of the ‘fixes’ floating around out there give Boomers a mostly free pass. Which leaves the ‘Deficit’ Commission a tough choice: get a good score by sticking it to Boomers right away, and so angering the single largest demographic cohort of Americas precisely when they are in the prime voting year? or take the zero and try to sell Gen-X and the Millenials that taking huge future benefit cuts that do nothing to address short term deficits is just the price they have to pay for past excesses?
In my view Entitlements Crisis people over-played their hand. First they sat by while their allies in the Republican Party rather cynically used the savings from Medicare reforms in the HCR bill to be framed as “medicare cuts”, and second allowed the framing of the Fiscal Responsibility Commission to fall within “Obama deficits” when realistically they will have no short term effect. Not at least without significant short term political fallout. Should be interesting.
My company does not offer pension anymore. Older employees had their grandfathered in but the younger employees have nothing. This is the future for the post Boomers: no pension, no social security, no welfare, no medicare. Life is going to really suck for you guys at least until you starve to death or die from some easily treated medical problem.
Social Security will be there for younger workers. The belief that it won’t is simple evidence that the propaganda campaign outlined in “Leninist Strategy” worked as designed. Sounds to me like you are a victim of the Con.
If you want to understand the way you have been conned, follow the link in the top bar labeled “Webbs Social Security Series”
Since Obama is a secret comrade of the Leninists here, the Obama Administration will tell every lie it can and use every propaganda trick and psychological warfare tool to try and open
the Social Security money for Wall Street looting regardless. The Obama Administration is just as much my enemy in this as is Peter Peterson himself. Obama revealed his intentions when he named Simpson to head his commission, and Obama is happy to have it called the “deficit” commission.
We just have to make very sure to slam the government up against the wall of its own promises to us and jam the government’s hand down the garbage disposal of its refusal to honor those FICA tax PRE-PAID-FOR promises, if that’s what the Obama Administration intends. One way to do that is for every FICA taxpayer to demand all their FICA taxes (and their matching employers’s FICA taxes as well) back from the government upon the announcement of the cancellation of their Social Security. Such people should demand their money back in the actual value NOW of what they paid in THEN when they PAID it in. And that
accounting for decreasing value of the dollar over timespan of payment should be calculated using some sort of legitimate truth-based service such as Shadowstats, not the fraudulent inflation-concealing Department of Labor’s CPI or such. People should think about how to prepare vast and massive class action lawsuits for getting their money back.
The same people might also think about how to force the government (if it can even be forced) to claw back all the ill gotten tax cuts from the Bush’s Base social class, because all
that money is our future SS benefits presently stolen and given to Bush’s Base.
admire your spirit. but the cuts won’t be obvious. a switch from wage indexed to cpi indexed will do the job. or a decision to tax estates, which will magically disappear when the time comes to actually collect the money.
that’s the trouble with ‘slamming government.’ who do you slam?
Fellas, try hard not to forget that the government you speak of slamming are the people that you voted into office. The only best response to their screwing with your future is to let them know in clear and certain terms that you are going to screw with their immediate futures in return. Write those letters boys and girls. It’s real easy to knock off a few emails to your Senators and House rep. Don’t be vulgar, but don’t be shy either. And let your friends and neighbors know just what the truth of the matter is. They don’t likely read Angry Bear, not any other reasonable source of information. If you sound well informed those friends and neighbors will likely take you seriously when you spell out that there is a scam in the works. Cajole and instigate them to write those same letters and/or emails. “You don’t vote in my interest and I won’t vote for yours” It’s a quid pro quo, but legal. Your selling your vote and all you want is their vote on an issue that means a great deal to you and your friends and your neighbors. Peter John isn’t the only worker without an employer retirement plan. That’s become the rule rather than the rarity. Social Security needs your vote. Write those letters today.
Social Security is fine, but it is supposed to be a supplement. Private pensions are in trouble and housing values are toast , which means potential retirees are not going to be enjoying life.
Thank you and fair question, Coberly. It deserves a specific answer, if there is one. Good
reminder, Jack. Yes , we should do all that. How would we find and cajole-into-action a pro-Social Security democrat to primary Obama for 2012 on a New Deal 2.0 (if you will) platform?
I hope as Bruce Webb and others keep rolling out these virtual meetings and other things to counter the Simpson-Obama conspiracy against Social Security, that they will name their
“commission” the Deficit Truth Commission to cultivate the suspicion that Obama’s commission is the Deficit Lie Commission by contrast; which it is and will be.
I save what I can privately which isn’t much, so Social Security will be crucial for me. Luckily
for me I never expected to enjoy life after work. Surviving existence is all I ask and all I expect.
To see how people do say you could go to the retire early page at http://www.early-retirement.org/forums/ which discusses retireing early ways and means to do it. Basically a lot is to live very frugally, what they call living below ones means.
Be Reddy Freddy. 2012 is too far off for immediate concern. it’s not Obama we need to be focused on at the moment. 2010 is fast upon us. Get out there and make some noise of the specific kind that will influence the people seeking re-election this year. Don’t wait for November, that’s far tool late. Candidates need to know you’re listening to what their promising and you’re not listening for the beat around the bush serenade. The only influence you or I have is on the people that we know. Multiply your vote by getting others to understand this issue. It’s not the elderly that are threatened. It’s all of us in the same boat and the economy has been sinking our ships for a good long time now. Private pensions are a thing of the past. The stock market has become a gambling casino with only the house sure to profit over the long haul. Social Security is the first agenda. Maybe we can get back to focusing on rigged markets and duplicitous bankers next, but at the moment the only significant issue with long term effect on all of us is Social Security. It works. It’s healthy and it doesn’t need the attention of the quacks.
heh, this “Leninist” thing is so obvious. Fully 30% of the population believes SS is bankrupt or whatever.
If the PtB manage to pull this off in the next 10 years it will be nothing but golf claps from me.
FICA payers have overpaid + accrued interest something approaching $2.5T as of now. With the recession and all it looks like the General Fund is going to have to start paying back FICA payers.
Of course, since FICA income is flat-taxed from dollar one to $106,800, and the great bulk of general fund burden is borne by those making more that the FICA cutoff, it’s the wealthy who owe the FICA payers this money.
But the framing is that it’s all worthless IOUs. Nothing could be further from the truth. Those IOUs represent $2.5T of overtaxation of FICA payers.
As long as we’er going to Mars, I’m happy. I thought I was going to be doing something boring in retirement. Like golfing at the local muni golf course. But if I can watch Tiger Jr. hit a 900 yard drive at the New Beijing Hilton on Mars, how cool.
If golf is not your thing, Lloyd Blankfien The Second will be offering a prize pot at the New Beijing Hilton Casino for the first 900 drive. It will be hedged with 900 traunches of CDS, the 1 yard traunch carrying the coveted Moody’s-Standard Poor’s-Fitch AAA rating. Cash only when buying traunches, see prospectus for payout schedule.
Lyle, the retire-early crowd does advocate living within one’s means and savings. But, their strategies are really applicable to higher earners and not so much to the median earner family of four. Social Security discussions are not about people who can save enough to retire early but about people reliant on SS income after age 62 or older. This group is most Americans. Down the road post boomer, this group will still be most Americans.
I’m just an old man, learned to survive on my Social Security stippen over the years out of necessity,but do like the challenge it presents. That said, I agree with Jack is his words this morning. I have noticed that I have the attention of my two Senators & 1 Representative after changing the tone of my letters. Perhaps I’m naive in thinking such, but at the very least, I do get the satisfaction of thinking I do make my point known. The more those we vote for, hear of the displeasure through our letter writing, E-mails, phone calls, then maybe it will penetrait the bubble that encapsulates Washington today. This is the time before the upcoming elections to let them know.
Nice to see and hear the left of center joining in the “Tea Party” movement. Each of us has our set of “issues”, and because the DC crowd are not listening nor supporting our “majority” views we are shouting.
We all voted these fools into office and keep doing it. Now is the time to take back the influence our votes are supposed to provide. Mindless voting got us into this and thinking voters will get us out. No one party has the answer, and that is what “Tea Partiers” understand. It’s the mindset/belief structure of the Pol not the party affiliation.
CoRev every poll I see puts the Tea Party at the same 22% of the country that not so coincidentally was Bush’s approval rating when he left office. The Tea Partiers and the Bush dead-enders are one and the same, they only hate that part of government that gives money to poor brown people. Note any backlash from the Tea Party against the Repubs that are groveling to do Wall Streets bidding?
The Tea Party by and large is Dick Armey’s Dick Army augmented by some fraudsters enriching themselves as poor confused older white people’s expense.
“social security is a supplement and not meant to be your whole retirement” is one of those mind jingles that was created for a specific argument at a specific time and has taken off to mean whatever the jingler wants it to mean.
i can tell you that if your best laid plans don’t work out, that Social Security is enough to live on quite comfortably if you can be sane about what you “need.”
at least it is in my case. i met a lady pumping gas whose social security is 400 dollars a month. i could see why she needed the job.
again, “enjoy” life. it doesn’t take a ticket on the love boat. but you may need to come to grips with what you think you “need” to enjoy life.
I thnk what you say is partly correct. A lot of middle class folk are on the retire early thing as a bit of a fad. I am not saying you can do without Social Security. I am saying you can live on it and enjoy life if your values are sane. And your SS is more than about 600 per month. a thousand would be more relaxed. But you need to have your house paid for.
i’d like to see the tea partiers succeed in bringing democracy back to the people. probably bruce is right that they are being manipulated by Dick Armey and some very bad ideas. but back in the old old days i believed that if the people were more or less forced to “town meeting” style government they would have to “get real.” i’m not sure i believe that anymore, but i am not at all opposed to the experiment. the danger is that “town meetings” turn into party rallies.
it would be interesting to go to a tea party and tell the people there that Obama is going to take away their Social Security.
You are the man. If 25% of all voters had your attitude we’d be on top of victory. One step more will make that happen. Put the email message that you’ve sent to the Senators and put it into an email to your friends, neighbors and relatives. Nudge them to duplicate that letter in their own names, modify it if they like, and send it forward to their Senators and Representative. It can work. Obama is in the White House because of mass action politics. I can’t say that he’s lived up to his promise, but Congressional reps are more susceptible to voter demands. They want to keep getting re-elected and they’re more vulnerable.
COnspirator/REVolutionary (which is it?),
On the one hand your sentiment is on the mark. But I fear that on the other hand it, and certainly the Tea Baggers, have the wrong goals. Less government is not the answer. Better government, one that has the best interests of all of the citizens, is the goal of any truly patriotic person. The Tea Party people sound too much like the Party of Me. “Me and my kind” are all that count. And how the devil do you shrink the government and grow the military budget, and protect the economy from an avaricious banking sector? The Tea Baggers are in conflict with themselves. They are the Republican base, even if they don’t know it. And they’re being led by their collective noses. Think about this. They media “leadership” of the Tea Bagger movement are a couple of hugely wealthy political propagandists.
Actually teh Tea Party is the modern reincarnation of the American (Know Nothing)party of the 1850s. Its real message is the country is changing and I don’t like it, its not the country I grew up in. (Of course by the time you reach middle age the country is not the country you grew up in partly because your generation perturbed it).
Whoa!!!! That’s the Cantab we’ve all grown to know and distrust!. First, he makes up a poll result for the House, then conflates the Tea Baggers with all Republican votes. He needed two misleading statements to get where he wanted to go, and didn’t even blink!
If Cantab is a fair representative of the Baggers, they are entirely likely tol delude themselves into having no influence at all. The good old GOP (and I do mean the old GOP) will co-opt the Baggers and go right back to business as usual – after not winning a majority in the House at the mid-term, after all, because the Baggers were all solid GOP votes when Obama was elected, and won’t change a thing by voting for Republicans at the mid-term.
Oh please CoRev
Dont give me this “No one party has all the answers and that is what the “Tea Partiers” understand”. The tea party “understands” nothing! They dont think they have to understand because they already know whats wrong and its a TOO BIG government.
Stop trying to paint the tea party movement as something that sprang up after contemplation and introspection. They have never considered that THEY might be dead wrong about the founding fathers, the constitution and what freedom actually means. They are the reactionary, “listen to me or else” wing of the conservative movement.
Jack, huh??!!! Saying this: “COnspirator/REVolutionary (which is it?), ” Which????
I do agree better Govt is better than the alternative, but better and smaller is best. That is the goal.
Otherwise, what else you added is just rant.
Bruce, you could be very correct, but than you are as likely to be wrong. Regardless, a 22% active and dedicated counter (hint to you Jack) movement is substatial. Thinking that is all who are involved is wishful thinking.
Speaking about fraudsters, how.s the Hopey/Changey thing working out. A month after passage of the HC bill we find nearly everything said against it re: costs is true, and nearly everything said for it re: costs was a lie. But, when claiming the Tea Partiers are fraudsters, just remember you got your needs covered with the HC Bill based upon lies.
Also, when you add this: “Note any backlash from the Tea Party against the Repubs that are groveling to do Wall Streets bidding? ” The current form of the Bill has been defeated. So, backlash? Not likely, just addition of some common sense to another foolishly, poorly, and politically crafted Bill.
CoRev: “but better and smaller is best. That is the goal.”
That’s a statement with no frame of reference ans is, therefore, meaningless. Smaller than what? Than it is now. Than it was in 1789? What’s your basis for determining the optimal size of a government? And a rant is only that commentary that you happen not to agree with. What part of media whores is a rant instead of a statement of fact? How does Tea Bagger demographics differ from that of the Republican Party?
Dale, you are so out of touch. Saying this: “it would be interesting to go to a tea party and tell the people there that Obama is going to take away their Social Security.” Would do nothing, but get confirmation from some, mostly the youngsters, in the crowd.
If the youngsters did not go on to say well “therefore” Social Security is a fraud because the government can take it away, maybe I could talk to them and persuade them that it will be there for them for a few dollars more… if they can stop their friends and Obama from killing it.
say what you like about the bad cop and i’ll agree with you in my heart, but watch out for that good cop. he really is not on your side.
you just can’t have it. it takes a bigger crew to run an aircraft carrier than it does to run a pt boat.
your “small government” friends want just enough government to jail thier political enemies while they pillage and rape with no effective opposition. what “government” is, is the co-operation of the people to protect themselves from foreign enemies and home grown criminals of great wealth. of course the government needs to be “checked and balanced.” but your friends don’t want that. they want to sell you “small government” so they can steal your wife and eat your children.
Ahh, but Dale, they, those young, are just repeating the messages received from the class warfare bulletins put out by the Dems. Y’ano, that ole Repubs are going to destroy SS, and it won’t be there when you are ready for it, youngster.
But, when we look at US political history we see which party was in power when the major attacks have been made upon SS and the SS trust fund.
Demographics? How about the small percentage of Dems attending and or even larger percentage supporting the movement.
As far as better and smaller, I am quite comfortable with your definition of better above. Smaller? Start with eliminating much of the new HC overhead, add some of the DOD, do away with most of the Dept of Ed, pass a VAT while eliminating the Income Tax and do away with all of IRS, eliminate parts of Justice that is not actually pursuing litigation, and finally do away with most of Dept of Ag. and HHS not associated with research.
We lose most of the salary and overhead for tens of thousands, and lose much of the mission that is now mostly associated with redistribution of Fed tax revenue to states and the private sector. Those both have alternaive sources.
On average, a comparison between Public Sector Jobs with Private Sector Jobs shows that Public Sector jobs pay better with better benefits. The Public sector is not a major source of wealth creation, so at some point, you run into a major economic roadblock.
The point is, when we pass a Stimulus package that was sold as “Pass this to prevent un-employment reaching 8%,” and then after it is passed Un-employment goes well beyond 8%, but the size of the Public sector increases, and the comparison between Public Sector and Private Sector Pay/Benefits increases as well, surely you gotta expect you gonna get some backlash.
That’s what they understand, and how can you blame them? They are seeing the run away spending with no results and they are pissed.
“Tea Party supporters are wealthier and more well-educated than the general public, and are no more or less afraid of falling into a lower socioeconomic class, according to the latest New York Times/CBS News poll.”
“Most of the studies of the optimum size of government made by reputable scholars in recent decades have indicated that total government spending (federal plus state plus local) should be no lower than 17 percent, nor larger than about 30 percent of GDP. In a just completed paper, economists at the Institute for Market Economics in Sofia, Bulgaria, have provided new estimates of the optimum size of government, using standard models, with the latest data from a broader spectrum of countries than had been previously available. Their conclusion is that there is a 95 percent probability that the optimal size of government is less than 25 percent of GDP.”
i was going to avoid this, but once more into the breach:
the logic of : public sector jobs pay more AND public sector is not a wealth creator THEREFORE you run into an economic roadblock is a good indication of brain damage. even if you believe the government does not create wealth which is an absurdity.
someone who thinks the government doesn’t create wealth is like a frog giving flying lessons to an eagle.
So tell us how Government is such a great creator of wealth. Oh wait….Let me guess….Without the FAA, Without Government Regulations, Without the military to protect American Interests the wealthy would not be able to manuver, so that must mean it is the government who is the actual crator of the wealth? And Your questioning me about logic?
JS-Kit blocked your comment because you used the C word. Mr. C got around that by using spaces. Now Mr. C is gone and your comment is visible.
Don’t use the C word. If you suspect the presence of Mr. C drop Dan, Noni, or me a line.
Jimi the stimulus package that was going to keep unemployment under 8% was about 33% bigger than the one that ultimately passed. Given the Republicans demanded it be watered down and that Obama was ultimately driven (mostly by his own team) to commit to first ‘under a trillion’ then ‘under $900 billion’ to the ultimate $757 billion was almost guaranteed to produce worse results than Cristina Romer projected in January when the stimulus was envisioned at $1.2 trillion. Republicans banded with Obama Rubinistas to produce a self-fulfilling failure that undermined the entire Obama agenda.
Heckuva job Rubinistas! But at least they saved the bonuses of the Bankstas.
Odd that they were not pissed when it was Bush and Delay who were doing it. Actually not so odd, they are just the Republican base, complete with the same Red, White and Blue clothing.
(In the Sixties wearing the American flag in any manner was considered an act of desecration, something that only Dirty Fucking Hippies did, see ‘Easy Rider’ for a classic example. When I was a kid even a flag patch was so considered and only a filthy traitor would fly a flag at night or have a tattered flag flying from your car aerial. Until the Right adopted it at which point all of that became the highest indication of patriotism.)
And of course wealthy people are ‘more well-educated’ and it has a lot less to do with any skill premium as with the fact that if your parents have money there is always some party school to park the kid at between 18-22 so as to get the piece of paper needed to enter the work force on a management track. Need an MBA or a JD? Got Rocks? There is always a college for you somewhere in America.
Rich people don’t like paying taxes for services for poor people.Who knew?
CoRev: “…pass a VAT while eliminating the Income Tax and do away with all of IRS,..”
An interesting pair of statements. Is there an implication that a VAT would some how be better for the average tax payer than is the income tax? One thing is immediately obvious with a VAT system. What you don’t spend isn’t subject to taxation. That’s great if you’re earnings are well above subsistence levels. It’s even better if your earnings are well above what even a half dozen cars and other such goodies will cost. The point is that the wealthier one is the more discretionary income one has and such income need not be spent at all and, therefore, escapes any form of taxation. If you earn $60,000 per year and have a couple of kids you’re going to be spending all of your income so every last dollar is going to be taxed.
VAT is the most regressive form of taxation one could devise. The poorest earners pay the largest percentage of personal income in taxes. Are the two of you really that dumb? Or do you just prefer for the wealthiest Americans to pay the smallest share of the cost of government?
no, i am not questioning you about logic. i am laughing at you about your lack of it. without government you would be digging for your supper with a sharp stick.
i am sure you do not change the oil in your car because the oil does not not produce power. and it’s clear the steering wheel doesn’t make you go any faster so it’s just a dead weight loss. and that head on your shoulders… well how does that help you get anywhere?
it’s even stupider than that. NPR began it’s discussion of the VAT by pointing at the “looming costs of Medicare ™”
see, we need a VAT so we won’t have to know we are paying for our medical care. we can think we are paying for plastic toys, and if the tax law is written cleverly enough, we won’t even know the tax is in there.
And that is the exact type of comment that commandes no respect…Who exactly is calling for “No Government?”
You believing what you want to beleive….Not reality!
#1-I’m not for the VAT???????
#2-the wealthiest Americans to pay the smallest share of the cost of government, is not true? The wealthiest Americans pay the majority of the bill.
when you say that government does not create wealth, you remind me of the communists who think the boss does not create wealth.
thank you for giving me the opportunity to say this again:
if you will think about it you will see that the wealthiest MUST pay the majority of the tax. there is no help for it. the poor simply don’t have enough money. and generally the poor have less influence on what policies the government needs the money for (really, it’s true.)
some people confuse their percent paresis with “fairness.” they think a 10% tax on a person making ten thousand a year is equivalent to a 10% tax on a person making a million a year. But it is still easier to get by on 900,000 dollars than it is to get by on 9.000. It just is.
And no, there is no law of nature that assures us the rich man’s million is the perfect and just compensation for his labors than one that assures us the poor man’s pay is exactly what he deserves, no more, no less.
the fact is that everybody knows this. it is assumed in the normal way we do business and tax ourselves. it is only in the heat of political debate… and some people are always in the heat of political debate… that we start talking nonsense about “fairness.”
Frankly I’m too lazy to go digging for the data that backs up the following point. So I’ll lay it down as a challenge to those who admire statistics more so than do I. Jimi claims that the wealthy pay the larger share of the tax bill. I assume that he means that of the tax revenues flowing into the Treasury the majority is coming from the wealthy. That seems self evident. Who the devil else has any earnings worth taxing and the wealthiest Americans take the majority of the total income, earned and otherwise. So here’s the question: Take the top 25% of income earners, and break the group into 2.5 percentile sub-groups. Compare the percentage of total income earned by each sub-group with the percentage of tax paid by each group. My guess. As you go up the income groups there will be a growing disparity between the percentage of total income flowing into the group and the percentage of total tax receipts paid by each group. And please, quality data sources only need apply. No rehashing of bull shit from some think tank. And include all forms of income.
CoRev via Jimi: “ In a just completed paper, economists at the Institute for Market Economics in Sofia, Bulgaria, have provided new estimates of the optimum size of government, using standard models, with the latest data from a broader spectrum of countries than had been previously available.”
An Institute in Sofia, Bulgaria! Well now I am convinced. Could you have found any more obscure source for your “proof?” What other intellectual contributions have come out of that Institute over the past several decades? Why not cite the work of Prof Worthington from the Institute for the Economic Development of Freedonia?
Did you go to the Link, listed in the comment above? It sure as hell was not from the Institue for Market Economics in Sofia, Bulgaria.
Not exactly what your looking for, but you get the picture!
“The top 40% of income earners are paying about 86% of all Federal taxes and that percentage is going up, not down. If you want to peruse the Congressional Budget Office data on which this chart is based, you can go here to the liberal Tax Policy Center table that shows all the CBO’s data. The latest data is from 2006. From the Tax Policy Center, we can also see the breakdown of the top 40% of income earners (income quintiles 4 and 5) for year 2006″
now go back and look at what percent of total income is “earned” by the top 40% of earners. then consider the problem of how you tax people who earn 10000 a year the same percent as people who earn 1000000 a year and either leave them enough for groceries and rent or collect enough to pay for the level of goverment the rich tell their congressmen they want.
go through the budget iine by line and tell us what you would eliminate, and in detail what you would do to solve the problem the budget item is intended to solve.
“Borrowing a graphical technique popularized by Arthur Laffer, Representative Richard Armey,
an economist by training, developed what he termed the Armey Curve (see Figure 1).”
A theoretical construct presented by Dick Armey as a variation of the universally lauded Laffer Curve. Well what more need be said. Now it’s proven beyond the shadow of a doubt. Fund a couple of economics profs from the heartland and the data will be found to support what ever ideological thesis you can come up with. And published internally by the Republican Chair of a committee of the House of Representatives. Well that does support your thesis that government is too large and should probably get out of the business of paying for “scholarly” research.
From Jimi: “The top 40% of income earners are paying about 86% of all Federal taxes and that percentage is going up, not down.”
As I had suggested in my challenge, that point is a given. So what. The top 40% is far too broad a group to allow for understanding the advantage that the top One Percent enjoys, and it’s even more grossly distorted when you start looking at the top 0.5%. And don’t forget that the percentage of the total tax paid cannot be judged for fairness without consideration of the percentage of total income earned. Those who benefit most from the efforts of our government to provide a structured framework within which our economy flourishes owe the greatest share of the cost of that government’s efforts. An example. The government saw fit to deregulate banking and finance at the start of the 21st century. During the ensuing decade bankers and financiers made out like bandits. An apt analogy. Thank you Phil Gramm. Maybe the bankers should pay down the deficit and leave the rest of us out of it.
(clap clap clap)
>and either leave them enough for groceries and rent
Theoretically taxes on wage earners come out of rents.
Theoretically, but I think it can be argued that low tax burdens on the lower 3 quintiles just ends up in higher rents and home prices.
and to some extent in the real world too. it’s all a question of who has the upper hand.
but also in the real world, when the poor don’t have enough money for rent, rents don’t come down. families move in together. more of the efficiency of the marketplace, don’t you know.
that’s what i keep saying. let THEIR landlords lower the rent.