Eyes on the Prize: A Social Security summary
by Dale Coberly
Eyes on the Prize
A Social Security summary.
We have had twenty years and a billion dollars spent by Pete Peterson and friends telling the people that Social Security is going broke and will create huge deficits that will kill the economy and be a crushing burden to the young. Peterson has funded an army of “non partisan experts” who tell the media what to say and what not to say about Social Security.
On the other side we have had Bruce Webb… who does all the hard work… showing that the reports of Social Security going broke are based on assumptions that seem unlikely. Moreover he has shown that each year since we have been treated to the “we must fix (cut) Social Security NOW” , “doing nothing now” has actually reduced the cost of any ultimate fix.
We have had professer Rosser show that even under the pessimistic assumptions Social Security with no changes at all will still be able to pay a benefit that is larger in real value than what retirees get today.
And we have had Coberly show that even under the Trustees projections… the ones that produce the “Five Trillion Dollar Unfunded Deficit!” (or Fifteen Trillion if you want to add up the cost out to “the infinite horizon”), the actual cost to each worker would be a raise of less than a dollar per week from time to time over the next seventy five years, and then no further increases after that.
And we should not forget that CBO has published an “option number three” that shows the cost of one way of fixing Social Security would be a payroll tax increase of one half of one tenth of one percent per year. One half of one tenth of one percent of an average worker’s pay today is forty cents per week, and the boss pays half of that.
Then, we have the good people who want to “fix Social Security” by taxing the rich… either by raising the cap, or by dedicating the estate tax to pay for Social Security. These people do not know, or do not understand that this is exactly what FDR was careful NOT to do. He did not want Social Security to be “the dole” “so that no damn politician can take it away from them.”
And we have the really bad people who want to fix Social Security by raising the retirement age. “It’s the obvious solution,” they say. ” After all, we are going to be living longer.” It never troubles them that if people can pay for their own retirement (with an extra forty cents per week per year) they may not want to work longer, or they may have other age related conditions that will not reduce their life expectancy but may make working painful. But people with jobs they like can’t imagine why working people might want to stop working for the boss and have a few years of freedom before they die.
And we have the strange people who tell us that paying BACK the money that Congress borrowed FROM Social Security… that is from the workers’ savings… will cause the country to collapse: we need to stiff the workers so the bankers can keep their million dollar bonuses for the excellent way they have been managing the economy.
And we have recently had the President and Congress, who decided that since we are facing a “looming deficit” the smart thing to do was to cut taxes. This way they have given you your retirement money to spend now, because they know an extra ten dollars a week spent at Wal Mart will mean more to you than an extra year of retirement.
And we have the eternal obfuscators who will come into any discussion and do everything they can to distract your attention from the basic fact:
Social Security is YOUR money. It doesn’t cost “the government” a dime. Social Security is the ONLY way most workers have to save their own money, safe from inflation and market losses, so they can retire at a reasonable age. And the cost of keeping this insurance is so small no one would even notice it, if it wasn’t for the Big Liars finding ways to make it seem like it was a huge number, or an “unfair” windfall to old people at the expense of the “young” who will never, of course, ever get old themselves.
I have done the math. So has CBO. The cost of keeping your Social Security insurance, just in case you do get old without getting rich, looks like about a forty cents per week increase in the payroll tax each year, while incomes are expected to go up about ten dollars per week each year.
Try to keep that in mind when the man in the suit is selling you snake oil.
Coberly,
Love it! I’ll be linking to it often, and I hope others will, too. Thanks!
SS may be the “prize”, but it is part of a bigger budget problem. The below Utube gives a good pictorial view of that budget problem. http://wimp.com/budgetcuts/ (Watch it to understand the remaining comment)
In the almost two years since this was created we can move the string leftwards, the SSTF is being used to pay the annual SS deficit, and the entitlement’s side of the of the example has grown because increasing numbers of Boomers reaching retirement age; a grand new entitlement (Health Care); increases to the Medicare/Medicaid payments; and because of the recession increased payments to the remaining social programs (food stamps/heat/etc.) payments.
Of all the entitlement programs SS is the the best funded, but as the President, Congress, the Deficit commission, the voters, and even Pete Peterson understand that SS is just part of the growing mandatory spending portion of the budget, that left side of the string.
Speaking of selling snake oil…..
The Plan is to raise ss by 40 cents a week per year. What does that mean? Based on a static work force these would be the numbers. (actually higher do to work force increases) Annual increases:
1) 2.7b
2) 4.5b
3) 10.8b
4)21.6b
5) 43b
6) 86b
7) 173b
8) 346b
9) 692b
10) 1.4 Trillion…..
The plan that is “favored” here would raise taxes by very large amounts. I can’t believe that Webb/Coberly really believe this is possible. It is not.
Go back to the drawing board. There will be no tax increase permitted to continue SS as we know it. It is not in the cards. There is no one in charge who is considering this appraoch. Reason? It is dumb to think that we can raise taxes by this much. It simply is a non starter. Face it.
Peterson’s “non partisan experts” who craft humbug in humbug factories (aka think tanks).
When accountants talk with economists humbug factories grow.
All the discretionary budget is borrowed.
With the recent ‘republicana’ discretionary has gained share over entitlements.
Discretionary is borrowed.
CoRev:
Here is an off budget item with a revenue stream which can be increased a small amount (as Coberly explains) and negate ever having to pay back the TF (which you appear to conveniently side step “again”). If we choose to draw down the TF to make up the difference, a revenue stream muct be found between the TF and the GF . . . higher taxes such as sunsetting the breaks for the 1 percenters. The GF has borrowed the money from the TF to lend to the gov. and more likely give back to the 1% of the taxpayers making >$500,000 annually in income and who saw 31% of the 2001/2003 tax breaks, and also two unfunded wars which should have had revenue streams as previous wars, and finance a recession and poor gov. economic policy for the last decade. The gap between revenue and spending can be closed easily for SS.
Healthcare reform does little to increase medicare payments or medicaid costs, reduces medicare payments by cutting back on Advantage programs, improves the primary care service for both categories, and sets the stage for future healthcare industry reductions by having Medicare becoming the leader in greater benefit for lower cost. Your position and that of the repealers is to do nothing to change the healthcare environment and dependent upon private healthcare insurance or subsidize the same old remedies which have not proven successful since Hillary-Care. If we had implemented Hillary -Care in 1993, the cost would have been dramatically less than today. Instead, we are faced with out-of-control healthcare costs which are driven not by an aging population but by an industry of innovation pharma, procedures, and doctoring having less return for the investment.
CoRev, you choose to balance the deficit and the budget by riding on the backs of the minorities, the elderly, the poor, the sickly, the blue color, etc. (as Bush did) to soldify your position economically. They are not the cause of today’s issues and the solution does not involve sacrificing them into a type of “soylent green” for the benefit of a few who have manipulated the system and gained the most benefit. The solution does not reside in feeding on their economic woes when a far better solution exists.
Here’s even another depiction of what is going on with the US Federal Budget. http://money.cnn.com/news/economy/storysupplement/spending_pie/?iid=EL
It is from this article: http://money.cnn.com/2011/02/01/news/economy/reducing_national_debt/index.htm
take away these messages. Congress does not look at revenues as dedicated, so to them, a(partially/fully) funded SS payment is a political not budgetary argument. That the mandatory portion of annual spending is approaching the limits of available revenues, and that we are approachign the tipping point where all available annual revenues are are expended on mandatory spending. When that happens entitlement spending will crowd out entitlements. We are well past the point of mandatory spending dangerously crowding out revenues available for discretionary spending.
concentrating attention on SS is just a continuation of political-speech surrounding third rail political issues. Congress, the President, a large block of voters, and even P. Peterson understand the budget/deficit issue, of which SS is just a portion.
I asked on the other thread is it willful ignorance or willfully ignoring? To date IIRC, only Dale and Jack claim to admit the budget/deficit to be a problem. Also, from the level of discussion they seemingly do not fully understand its seriousness and have a feel for solving it.
Bruce Krasting
is one of the strange people who wants to stiff the workers so the bankers don’t have to pay back the money they borrowed.
That 1.4 Trillion he comes up with is still forty cents per week per year for the average worker.
The cost of paying BACK the money borrowed FROM the workes would be about a 3% tax raise on those who don’t pay for Social Security (earnings over 100 k per year) for about ten years. Then it would be paid in full. This is approximately the cost of the Bush tax cut that was recently extended because, as you know, we are facing a huge deficit, so we cut taxes.
And CoRev
bless his heart, is one of the eternal obfuscators.
the cost of Social Security is entirely paid by the workers who will get the benefits. if they want to retire at the same age with the same monthly benefit and live longer they will need to pay a slightly higher premium in the form of a forty cents per week increase in the payroll tax.
and please note Krastings “logic”
he takes the forty cents per week and multiplies it times the 200 million taxpayers for years and comes up with … TRillions of Dollars ! too huge to pay.
But its still forty cents per week each year for each taxpayer.
It’s as if I said, Americans will gain an average of one pound a year. That’s 22 billion pounds over the next 75 years. Gosh, I better go on a diet.
Run, I do not diagree witrh anything you says here with the exception of imputing meaning to my discusssions. I DO NOT CARE, how the budget/deficit issue is resolved. You have not, yet admitted that such a problem even exists.
You appear to be using the traditonal Dem/left approach of having the “We care more than you” sock puppet on one hand, while ignoring the seriousness of the problem.
Is it a problem? If so how can we solve it?
Here is what CoREv can’t understand:
There is a budget problem. There is NO Social Security problem.
Run, I do not disagree with anything you say here with the exception of imputing meaning to my discusssions. I DO NOT CARE how the budget/deficit issue is resolved. You have not, yet admitted that such a problem even exists.
You appear to be using the traditonal Dem/left approach of having the “We care more than you” sock puppet on one hand, while ignoring the seriousness of the problem.
Is it a problem? If so how can we solve it?
Sigh! Dale, Run, Jack, Bruce, et al, you can take your disappointment in Obama, Congress, the Deficit commissiion, and all the others like me that point out the obvious seriousness of the budget/deficit. It doesn’t change the problem.
re CoRev
however the Congress “looks at” budgeting.. Social Security has its own revenue source and is NOT “government spending.” The workers pay for their own Social Security and can always do so.
As for the budget problem, the fix is simple. Raise the taxes to pay for what you buy. For now the needed raise will not be that high… simply rescinding the Bush tax cuts… “raising” taxes about 3%…would do the job.
Just to try to be clear: would do the job if the spending is not increased and if the economy recovers from the current recession. But one thing that won’t work is to continue to cut taxes and increase spending. We already bought that snake oil and we see where it has got us.
And there is no need to cut Social Security. It doesn’t cost “the government” a dime.
There will be an argument in future that the payroll tax holiday shows that Social Security really does cost the government. But don’t be fooled. The payroll tax holiday had nothing to do with Social Security funding and everything to do with creating a basis for telling the Big LIe.
The people would be better off to just make up the payroll tax holiday with a small increase in the payroll tax (about a dollar a week), than to let “the government” make it up out of general taxes or borrowing. But whatever happens, the principle remains: Social Security does not depend on “government spending.” Try to understand that the payroll tax holiday was a first step to cutting social security. Very clever those bastards. They saw that they could just go ahead and cut Social Security by first cutting the source of funding.. the workers’ savings.
please understand that paying BACK Social Security is NOT “paying twice for Social Security.”
it is paying once, the first time, for whatever the government bought with the money it borrowed FROM Social Security.
Every dime that you and your employer have paid to Social Security has been spent. Most of it to pay for the benefits earned by contemporary retirees. A relatively small proportion has been spent on other government operations in exchange for the promise that the treasury would step in and pay for the then future and now current shortfall with then then future and now current funding. So to people now looking at the now current general budget, SS looks like a a new, and growing problem.
Of course the politics of this are largely driven by the fact that the Treasury will have to come up with those payments largely through somewhat progressive taxes rather than regressive SS payroll taxes. So the LOUDEST voices calling for the cutting of benefits are those who regularly exceed the SS max contributions. So MY suggestion would be to make this explicit. Say we’re going to raise the highest marginal tax rate for income taxes and dedicate that to “repaying” the SS trust fund to save SS.
You will all note that CoRev and Bruce Krasting cannot resist coming into the conversation and proving Coverly’s point regarding those who will obfuscate the issue. Krasting merely distorts the numbers and CoRev goes a step further and distorts the details of the conversation. Because Coberly focuses on the off budget character of Social Security (that it has a dedicated funding stream not intended to off set budget deficits and that the “unified” budget is a misconceptin that is part of the scam) CoRev side steps to a rant about recognition of the deficit. Nothing is further from the truth. We have all been repeating ad infinitum that the budget deficit must be resolved through budgetary variables, not via an independent program budget, the SS Trust Fund.
Then CoRev and his cohorts talk about all the “experts” and politicians and the media screaming about the need to include SS inn the budget deficit fix. “Congress, the President, a large block of voters, and even P. Peterson understand the budget/deficit issue, of which SS is just a portion.” Note the reference to large blocks of voters. That’s what I term the media because there is no measure of voter discontent regarding Social Security save for those worried about the Peterson scam. The President? He glazed over the issue in his SOTU address.. He did reference his Deficit Commission though note its SS solutions recommendations. Simpson and Bowles, where could the President have found two more partisan hacks to “examine” the role of SS in the deficit?
Webb has provided the data and Coberly and a few others have made the argument repeatedly in replies to the Peterson/CoRev conspiracy. They never refocus on the fact that by legisaltive mandate the unified budget is a non seguitur. There is no such animal and that was by intention in regards to safe guarding the Social Security funding stream, our FICA deductions, and the Social Security Trust Fund, the FICA investment pool.
jim a
doesn’t say it the way i would say it, but he is essentially correct.
the money paid into social security has been spent, either on benefits or lent to the government.
that is normal. that’s the way it is supposed to work. the “promise” that treasury would step in is the same promise you make when you borrow money: that you will pay it back with interest.
and raising the highest marginal tax rate… about 3%… is what it would take to pay back the money they borrowed…. in the form of tax cuts that were going to pay for themselves but didn’t.
CoRev,
You wonder why people get angry at your repeated harping. You are harping on a connection that is not there. The discussion of Social Security’s integrity is parallel to any discussion of the budget deficit. In so many words, find a solution to the deficit that recognizes the integrity of Social Security rather than trying to make it appear that Social Security is a contributor to the problem. The logical conclusion to your focus is that FICA deductions should be redirected to contribute to the general budget and that the Trust Fund Special Treasuries should be disregarded. That is a deceitful approach to a problem that you identify, but apparently have no solution to without resorting to taxing the working class, the primary beneficiaries of the Social Security program. In short, stop lying. That you put yourself in league with the Petersons and Simpsons of the world is evidence enough of your deceit. That you focus on the current administration as the primary producer of the budget deficit is evidence of your partisan ideological intent.
At this point I think that we should all thank CoRev for his persistence at presenting a bogus argument and repetitious retort to re3plies to his distortions. it is his presence here that allows so much of the repetition of the real nature of the relationship between the Social Security program and the budget deficit. I am confident that any reader with even a little capacity for logical thinking can recognize the duplicity of the CoRev Solution. As noted earlier, find solutions to the budget deficit problem that recognizes the integrity of the Social Security program as having a dedicated funding stream that is not intended to support the general budget. Let’s see if there is any integrity to your concerns regarding the deficit, the general budget deficit.
At this point I think that we should all thank CoRev for his persistence at presenting a bogus argument and repetitious retort to replies to his distortions. it is his presence here that allows so much of the repetition of the real nature of the relationship between the Social Security program and the budget deficit. I am confident that any reader with even a little capacity for logical thinking can recognize the duplicity of the CoRev Solution. As noted earlier, find solutions to the budget deficit problem that recognizes the integrity of the Social Security program as having a dedicated funding stream that is not intended to support the general budget. Let’s see if there is any integrity to your concerns regarding the deficit, the general budget deficit.
Morning coberly,
Thanks for your persistence. I just retired.
Been thinking though. I wonder when the story will become some version of “all the bonds held by citizens who work and make less than, say, $200,000/year are spent, gone, just IOUs”, including pension funds. Same difference, you know. Balance the budget any way you can to claw back worker’s earnings. I can’t explain Peterson except to expect that he (and some of your friend here) prefer a yesteryear where masters had their slaves, indentured servants, and serfs and all wealth left after the ghastly cost of minimal maintenance on their human assets was theirs to keep.
I don’t think the above is overboard at all. I was just trying to figure out how some of your friends here would decide to cut their taxes some more but keep the engine servicing their needs in pursuit of empires.
The only reason anyone is complaining about SS is that the law is real and REALLY REALLY says that the government has to honor its TF special Treasuries. Has to. No choice. MUST. If not, then there would be no SS problem. Your SS, federal pension and retirement checks would just stop, poof! no more HI benefits, no Medicare–all gone. Then, it’ll be time to root hog, or die. Not to worry though. You’ll be alright, right?
And then the budget would be balanced! Nope. Not at all. Neither the budget deficits nor the Natl Debt would disappear. The debt would still be there. Nothing would change except the only thing the federal government would do would be pay the Chinese, ship pallets of money to Afghanistan and crank out checks to the defense contractors who do what the military used to do. And, of course, members of Congress and the Senate would need their paychecks. But, look on the bright side–no more greedy geezers! NO
jim a and coberly,
he says it differnetly from you, but is explicit about the main point (well pretty much).
The General budget is broke and very, very deep in debt. Part of that debt is the IOUs to the SS trust fund. Jim is correct that the money has long ago been spent.
The POLITICAL question is now on how will the US Gov handle those IOUs coming due. Coberly has you have pointed out so many, many times there is a couple of solutions you have proposed. Basically a very minor increase in the SS payroll tax or an increase in the taxes going into the general fund (which then covers the funds need to cover the IOUs has we go forward).
Other solutions I have seen (all of which cover the fiscal issue but may/may not have other problems) all add to a rather long list, starting with Coberly’s two:
1) Minor increase in payroll tax rate (the 10 cents a week solution)
2) Increase general fund tax rate (multiple methods here – 3% on the above $250K crowd etc, etc)
3) Increase the retirement age
4) Lower the SS payout
5) Remove the payroll tax cap of $110K or increase it to some #
6) Means test SS benefits
7) Fund with the estate tax (aka Death Tax)
8) Cut funding to some other part of government to cover the funds (meaningless unless we balance the budget – you just get solution 9)
9) Just increase the federal debt (print money to cover it)
Did I miss anything? All of the above will cover the SS shortfall and keep the checks flowing. Its just a political question how it will be addressed.
But the real issue, as CoRev continues to pound and AB continues to ignore, is the huge and increasing Federal Debt. Obama is going to run a $1.5 Trillion debt this year alone with no end in sight. You focus on SS and forget the elephant in the room. Which BTW neither party seems to give a damn about and I’ve been complaing about since I started commenting here.
Islam will change
“Jim is correct that the money has long ago been spent.”
Spent and badly on perpetual war. Money going down a hole of empire and war profits, which take away from other uses,
In 1953 Ike said:
“Every gun that is made, every warship launched,
every rocket fired signifies, in the final sense, a theft
from those who hunger and are not fed, those who
are cold and are not clothed.
This world in arms is not spending money alone.
It is spending the sweat of it s laborers, the genius
of its scientists, the hopes of its children.
The cost of one modern heavy bomber is this: a
modern brick school in more than 30 cities.
It is two electric power plants, each serving a
town of 60,000 population.
It is two fine, fully equipped hospitals.
It is some 50 miles of concrete highway.
We pay for a single fighter with a half million
bushels of wheat.
We pay for a single destroyer with new homes
that could have housed more than 8,000 people.
This, I repeat, is the best way of life to be found
on the road the world has been taking.
Five Star General, Supreme Allied Commander during World War II and President of the United States, Dwight D. Eisenhower, pointedly illustrating the ruinous consequences of money funneled into the military rather than directed to society as a whole.”
It all adds up to lost opportunity to be paid in the future.
Anna Lee
thanks. i don’t think you are overboard at all. i don’t know if the Petersons recognize that that’s the way they feel. but that’s the way they feel.
You should care, CoRev. Here’s what Baker and Thoma have to say on the subject.
http://economistsview.typepad.com/economistsview/ They don’t see it the same way you do.
Jack, what part of: “I don’t care how it is solved” is too hard to understand? Protecting SS, or any of the other entitlements versus defense spending or any other portion of the discretionary budget, is not an issue for me.
Furthermore, I actually do not mind being the proxy for your concern, disappointment and fear created by the real players: Congress, Obama, Peterson, the press, etc. I am secure in my understanding of the seriousness of the budget/deficit issues, and only wish to have a meaningful discussion of it. But, alas and alack, can not seem to have the probelm even recognized let alone a reality-based discussion over how to resolve it.
Is SS part of the budget/deficit problem? Of course it is. Its payments are part of annual expenditures. Is it best to protect it? Of course. Now let’s go on to discuss how to do both, protect SS while solving the budget/deficit problem.
Buff
with all respect and kindness i have to count you among the obfuscators. Social Security can pay for itself.
The budget problem is a separate issue entirely. Of course it’s political. That’s why we are arguing about it. The Big LIars lying about it on the one hand, and us trying desperately on the other hand to get people to understand that they can keep their Social Security at NO cost to “the government” and a cost to themselves so small they will never feel it.
Thanks Linda. Warn them about the obfuscators. You will note that already CoRev and Krasting have been out sandbagging the post with words designed to make you sleepy.
Krasting says “forty cents plus forty cents plus forty cents….. (still counting a million years later) … plus forty cents adds up to a TRILLION DOLLARS! We’re all going to die!”
And CoRev (and Buff) keep saying… it isn’t Social Security, it’s the budget. We need to steal the money from Social Security so the important people don’t have to pay taxes. Or at least we need to keep talking about the budget so plain folks don’t ever hear the plain truth:
Social Security is what will allow them to retire. IT’s their own money. It is not going broke…ever. And it doesn’t cost the government a dime.
coberly and Jack,
Great I will stipulate that there is NO Social Security problem. I agree too.
But that does not change the fact that one of the outflows from the General Fund goes to cover the SS Special Treasuries being redeemed. I doubt you disagree here.
Is there any disagreement with the fact that the general fund is hemorrhaging debt at a rate under Obama and for the foreseeable future that is out-of-control? $1.5 Trillion this year alone?
So we all agree that the General Fund has a big problem, correct? Any dissension at all? Anybody?
So the question comes down to how to pay all the outflows from the general fund, of which redeeming the SS Special Treasuries is just another line on the outflow side of the ledger, just like paying the Congressional electrical bill.
And that is a political question. I listed a bundle of solutions above and coberly/Bruce have posted detailed fiscal solutions for SS going forward. But it’s a political question.
No one in our political class, Dem or Rep, seems to have any stomach for raising taxes. The Dems could have set on their hands and the Bush tax rates would have increased. Obama could have vetoed the bill and gotten the same result. So it’s Obama’s tax rates now. He just signed on his endorsement.
And if you buy all of Mike’s analysis we should have raised taxes and that would have spurred the economy on to greater highs. I just don’t see Obama or Congress believing it.
Islam will change
Jack, by concentrating the budget/deficit attention on SS Y’all are obfuscating the budget/deficit issue. Why not concentrate on any of the other entitlements? Why not discuss, medicare (which like SS has a dedicated funding stream that partially funds it) or food stamps, or heating assistance, etc?
We are on a collision course to have the manadatory spending portion of the budget take over the entire revenue stream (dedicated or not). The bad impacts of that may be catastrophic. While recognize that as a proble and want to diacuss solution sets, you call me a reactionary (viewpoints that seek to return to a previous state), when it is in fact yourself that wants that (protection of SS all else). I fthat’s the only core solution set, fine! Let’s discuss how to do that and solve the bigger budget/deficit issue.
Get it? I don’t care how!
And just to make things explicit, for DECADES we’ve been overpaying our payroll taxes based on the explicit promise that when SS needed more money, the Treasury would extend the funds needed to provide promised benefits. Now that the bill is comming due, those who are most likely to pay a somewhat disproportionate share of taxes to make good those promises are saying that it is BENEFITS that need to be reduced, rathar than have their taxes raised.
And just to make things explicit, for DECADES we’ve been overpaying our payroll taxes based on the explicit promise that when SS needed more money, the Treasury would extend the funds needed to provide promised benefits. Now that the bill is comming due, those who are most likely to pay a somewhat disproportionate share of taxes to make good those promises are saying that it is BENEFITS that need to be reduced, rathar than have their taxes raised.
And just to make things explicit, for DECADES we’ve been overpaying our payroll taxes based on the explicit promise that when SS needed more money, the Treasury would extend the funds needed to provide promised benefits. Now that the bill is comming due, those who are most likely to pay a somewhat disproportionate share of taxes to make good those promises are saying that it is BENEFITS that need to be reduced, rathar than have their taxes raised.
NO, please don’t reference UK solutions to the US problem without converting them to “apples to apples” comparisons. The Baker article did not.
Furthermore it uses a strawman argument “Thus, “austerity is stimulative” is being used very much like “tax cuts increase revenues.” aimed at thwarting policies based upon fellow economic travelers Laffer’s and Alesino’s theories. Theoretical strawman arguments are interesting, but don’t refute the simple reality-based math shown in the two UTube videos provided.
I’ll repeat: “I don’t care how budget/deficit issue is solved” I do care that it be solved before it becomes totally intractable without truly serious impacts as opposed to today’s being just serious.
Welcome to the fray, Buff!
coberly,
I am not trying to obfuscate the SS issue. I have no problem with adding the 10 cents per week you suggest to the payroll deduction and sweeping SS off the table in the general budget discussions.
But you continue to bring up SS in discusions that are not about SS. The general budget is an outright mess. And it not getting any better anytime soon, reguardless of who’s projection you use. Like I mentioned up(down?) thread repaying SS is just another outflow to the general fund. SS CAN pay for itself and basically does that RIGHT NOW.
But that doesn’t have anything to do with the problem in the general fund, except as SS acts as a net input or drain to the general fund. After decades of being a net input its now turning to become another net drain. That’s the reality we face.
(Which is why I like your 10cents/week idea since it keep SS isolated from the general budget and lets it be taken off the table.)
The problem which I think you/Bruce/ & I have repeatedly pointed out is the current set of politicians running things have absolutely no wish to repay that $2.5 Trillion in IOUs to the treasury. A bipartisan problem. No one gets re-elected promising to make you take your medicine…
And I’ve been railing about the budget deficit for years here on AB. But it seems that Obama and the Dems agree with ex VP Cheney – “Deficits don’t matter.”
Until they do…
Islam will change
I looked at my SS statement which said I made approximatly $20,000.00 for the previous year. Now, I multiplied that by 55, as years worked. It seem that the people who are bitching the loudest are the ones who get those nice big fat saleries, $200,000.00 up. Now, they work decreasingly less years to receive that amount I receive after 55 years, with the Wall Streeters even less, some perhaps in a month, if that. I’m not sniveling & whining about what I get, that truth be known allows this boy to eat just above my cats. But I do take issue with the ones who do snivel & whine, have one thing to say to you, get your colective heads out of where the sun don’t shine and work your asses off to right this B.S. that is taking place in this country today. And the next idiot who preaches about leaving the youth, the grandkifds, the great grandkids the bill, can all go to hell.
Dale saifd: “The budget problem is a separate issue entirely. Of course it’s political. That’s why we are arguing about it.” Now e aren’t even discusssing it! Here at AB we always fall back on the SS discussion.
OK! Save SS anyway you wish, but now, let’s talk about saving the country’s economy.
Dale said: “The budget problem is a separate issue entirely. Of course it’s political. That’s why we are arguing about it.” No!!! We aren’t even discussing it! Here at AB we always fall back on the SS discussion.
OK! Save SS anyway you wish, but now, let’s talk about saving the country’s economy.
Coberly,
It isn’t SS – IT IS THE BUDGET. Its not the hard.
And its Obama who wants to steal you money. He’s leading the charge. It was his deficit commission. The Dems must be there to pass anything that changes SS as it is now and Obama must sign the bill. Just like Obama took ownership of the Bush (now Obama) tax cuts.
But the budget is the problem. Can you not agree with that? If not, why?
Islam will change
“…the next idiot who preaches about leaving the youth, the grandkifds, the great grandkids the bill, can all go to hell.”
And that would be Obama. $1.5 Trillion this year alone….
Islam will change
Norman, I agree with this: “get your colective heads out of where the sun don’t shine and work your asses off to right this B.S. that is taking place in this country today.” But as Buff says it does not seem to be part of the poltical will in DC, nor do those here want to reasonably discuss it.
What did you think of the videos I provided?
Buff
look at the headline on this post: A Social Security summary. This post is about Social Security. You want to talk about the deficit. Fine. I agree with you about the deficit. And about the feckless democrats.
Just don’t obfuscate the point that SS can pay for itself. It’s the workers money, not the governments. YOu and CoRev are adding thousands of words to this thread that have no other purpose than to obscure the point that SS is not broke. Never will be broke. Has nothing to do with the deficit.
CoRev
fine, but do it on your own dime.
in case you hadn’t noticed it, this is a discussion about SS. it is you who are trying to change the subject… for the purpose of obscuring the simple answer to SS: it pays for itself. it is not welfare. it has nothing to do with the budget deficit.
Buff
I agree with that.
I’m just trying to make the point that SS IS NOT THE PROBLEM. There seem to be politicians out there who are saying it is, and plan to kill Social Security as soon as they have fooled enough people.
Your contribution here is to put enough words on the page to obscure the point that SOCIAL SECURITY PAYS FOR ITSELF… THAT IS THE WORKERS PAY FOR THEIR OWN BENEFITS… IT HAS NOTHING TO DO WITH THE DEFICIT.
Okay. What are the projected increases in revenues to SS over the next ten years with this plan?
Assume the 2010 SSTF base case assumptions. Then add on the coberly plan. What would be the increases to revenues as a result? By year for ten years if I may.
bk
obfusction alert.
Buff wants to talk about Obama and the deficit. Fine. He should write a post.
But he’d rather fill up this space with enough words so the readers can’t see that
SOCIAL SECURITY HAS NOTHING TO DO WITH THE DEFICIT.
uh oh obfuscation alert.
CoRev is not even pretending to be on topic. This is all about CoRev. Did you se the video? Did you see this picture of his grandkids? Anything to take your mind off the fact that
SOCIAL SECURITY IS NOT GOING BROKE. IT DOESN’T COST THE GOVERNMENT A DIME. IT IS YOUR INSURANCE THAT YOU CAN RETIRE WHEN YOU NEED TO. YOU PAY FOR IT YOURSELF.
Bruce
I sent you the spread sheet. You are pretending you can’t read it?
The projected increase to SS under the Northwest Plan for the next ten years is nothing to OASI and about a dollar and a half per worker for DI. I do not discuss HI and Medicare because the problem there is not the funding but the payout.
The increase in funding to SS under the CBO plan is one percent. That is a raise in the tax of about four dollars per week after ten years. during which time the average worker will get a pay raise of about forty dollars per week.
in case anyone cares
i have to go to work now. i’ll be back about 5 pm pacific time to see if there are any real questions i need to answer. or even any real arguments.
Buff/Corev
Get your collective heads out of your butts and stay on topic. Social Security isn’t contributing to the general budget deficit so stop lying about that. There is a budget deficit. It is a big deficit. Argue for a solution that addresses budget items and follow the law by recognizing that there is no such thing as a unified budget, by law. Keep your hands off FICA deductions as they are needed to pay benefits to SS beneficiaries. They are not deducted for the purpose of supplementing the general budget and general tax receipts. They, FICA deductions, are the dedicated funding stream for the SS security program. A program that has its own independent budget. No amount of your collective bullshit is going to change that. It is the law. No amount of references to other bull shitters i.e. Boweles, Simpson, Peterson et al (you too Krasting) is going to make your argument valid.
Balance the budget. It’s a fine idea, but use general budget items and general budget revenue sources to do so. Stop conflating the SS budget with the general budget. Stop obscuring the issue by suggesting that SS FICA deductions are some how related to the budget deficit. Stop obfuscating the discussion by suggesting that the borrowed assets of the Trust Fund are responsible for the deficit. Write to the various holders of T-Bills across the country and throughout the world and ask them if they would agree to a hiatus of interest payments on their T-Bills. But stop bullshitting about a connection between Social Security and the budget deficit. It is a lie. And stop bullshitting that people at AB are ignoring the budget deficit. That’s discussed on separate threads in response to postings about that deficit, how big it is and how it got that way and how it may grow yet bigger
“No one in our political class, Dem or Rep, seems to have any stomach for raising taxes.”
Any revision to the Social Security benefits structure is a raise in taxes , but for a selective group of people most of whom cannot afford such a loss of revenue. Yes, I agree with what you’ve said in that one comment, but you seem to agree that it is the SS program and its benefits that should be up for grabs. That is a tax increase, but confined to the previously working elderly.
I do not agree with your implication that the deficit is a result of the Obama administration’s actions. It is a problem that stems from two decades of abusive business de-regulation, absurd tax policy on the part of the Bush administration with help from Democrats and Republicans alike. We’ve got a broken two party government and the members of both parties are often donning black hats. We have a one party ruling oligarchy which I refer to as the OnePercenter Party, though probably an additional 3%-4% made up of those who grovel at the feet of great wealth for their share of the spoils support the OnePercenter Party platform. A major plank in the platform is screw everyone else. They need more.
You are so full of crap. You are the one who is constantly bringing up the deficit when the discussion is about Social Security. You’re the one who can’t seem to find some other way to reduce the deficit. You’re the one who talks in the vague generality of cutting “entitlements” without referencing where to make the cuts. And Social Security is not a part of the deficit, but you have difficulty recognizing that fact.
coberly,
And I never said it did. What’s your point?
Remember its YOU that jump in and bring up SS at every and any turn, even when no one is talking about it. Anyone even mentions the Federal deficit and you immediately jump in a talk about SS.
I specifically replied to Norman’s gripe about leaving the youth et al wit the bill. I did not even mention SS.
So again, what’s your point?
Islam will chnage
Jack,
“Yes, I agree with what you’ve said in that one comment, but you seem to agree that it is the SS program and its benefits that should be up for grabs. “
Nope, I do not agree that SS program and its benefits should be up for grabs. I thought that was very clear. (If not it should be now).
What IS clear, IMHO, is that Obama and Congress think that. YMMV.
Islam will change
I cannot speak for anyone but myself:
I think part of the answer is in the effort to change the nature of the discussion that is so well funded. socialsecuritymedicaremedicaidentitlement is the word used in media of various persuasions in relation to deficit talk, so there is great effort to pair the two words in the public mind. And yes, it is somewhat bi partisan at this point, although there are many agendas.
The effort to put SS front and center is quite widespread. The DOD and related funding is merely slowed down in growth rate and is specifically excluded… politicos who use this very long word to duck really hard decisions which also might effect contributors or voters in their districts,, and a well funded cadre of Peterson funded employees throungh foundations, think tanks and such make pronouncements reinforcing the pairing in public venues.
Our defense is of the program, whether it is being undermined by dem or repub, ‘friend’ or foe…any other consideration is actually secondary, and makes no headway in the debate here. Who ‘owns’ the issue is a different question and appears to be mostly political calculation that bears little concern for my or perhaps your welfare.
It is cowardice portrayed as self-interest if the issue is truly the deficit hawk agenda, which I do not believe is the primary agenda of many in public life. Personally I see no reason to let go of the campaign to strengthen SS while this tsunami of propaganda is at such a peak.
Secondly, there are those who maintain that the current spending is okay if misguided, including several prominent economists. You can say they are wrong, but by simply saying so does not make it true. It is a more theoretical argument than most are actually interested in or can be bothered with or by.
The budget can be a problem of course, but their are so many claims about it that it is hard to capture common ground except in some rather vague terms. Peterson people chatter on about medicare in their sendings to me but never suggest that healthcare costs overall are actually a problem for both private and public spending. I think that is telling.
The budget discussion also excludes US trade and industrial policy discussions, much to the frustration of some here also. Growing an economy that grows employment and grows wages is not part of the debate it appears.
If you care to send a post providing a format on deficits that we can agree on please do, and I may post it. But the rules in the public arena are rife with agendas not related to the reality of the deficits both federal and state/local.
Jack,
Since you seem unable to read what I wrote, I’ll repost it to insure you truely understand. BTW, my understanding of how this work is based on Bruce Webb’s and coberly’s rather sound dissection of SS. I suggest you avail yourself of the link at the top. Its very informative.
Now to repeat:
Great I will stipulate that there is NO Social Security problem. I agree too.
But that does not change the fact that one of the outflows from the General Fund goes to cover the SS Special Treasuries being redeemed. I doubt you disagree here.
Is there any disagreement with the fact that the general fund is hemorrhaging debt at a rate under Obama and for the foreseeable future that is out-of-control? $1.5 Trillion this year alone?
So we all agree that the General Fund has a big problem, correct? Any dissension at all? Anybody?
So the question comes down to how to pay all the outflows from the general fund, of which redeeming the SS Special Treasuries is just another line on the outflow side of the ledger, just like paying the Congressional electrical bill.
And that is a political question. I listed a bundle of solutions above and coberly/Bruce have posted detailed fiscal solutions for SS going forward. But it’s a political question.
Jack or coberly,
So what’s your beef with what I just posted? Where am I wrong? coberly I would like a response from you since this is exactly how you describe the situation many times before.
Islam will change
coberly,
Great when (if?) we ever get a discussion on AB about Obama’s exploding deficit I can expect you not to mention SS? Since they have nothing to do with each other.
Islam will change
Jack says: “No amount of references to other bull shitters i.e. Boweles, Simpson, Peterson et al (you too Krasting) is going to make your argument valid.” While add to the BSers list with Obama, Congress (all of them), the Deficit Commission, CoREv, Buff, A majority of American voters (and a longer list could be created by googling).
Jack, it doesn’t help by calling those with which you disagree profane names, It just lowers/bottoms out the discussion.
I would still prefer an increase in the payroll cap, say raising it at 3x the rate of inflation, to an increase in the payroll tax rate, even if it is only $0.40 per week. The payroll tax is about as regressive as one could probably design given the cap. The rest of the points are very well taken.
Dale said: “fine, but do it on your own dime. ” in reference to my: “OK! Save SS anyway you wish, but now, let’s talk about saving the country’s economy.”
What’s funny is that is after the long, long thread re: the Budget/deficit issue and failure to discuss it, in which he continuously brought up SS.
But the funniest part of his comment is the do in on your own dime, which implies he didn’t first reference it in the body. But then I guess we are supposed to ignore: “And we have the strange people who tell us that paying BACK the money that Congress borrowed FROM Social Security… that is from the workers’ savings… will cause the country to collapse: we need to stiff the workers so the bankers can keep their million dollar bonuses for the excellent way they have been managing the economy.
And we have recently had the President and Congress, who decided that since we are facing a “looming deficit” the smart thing to do was to cut taxes. This way they have given you your retirement money to spend now, because they know an extra ten dollars a week spent at Wal Mart will mean more to you than an extra year of retirement.”
So Dale, ironically, it was your dime. Rife with sarcasm? Perhaps, but it was first mentioned by you.
Sorry. You sent that some time ago. My hard drive is small. Rather than send it again just recap the increases over the first ten years. That we could all see them. I don’t care if you gave all the increase to DI. It is one entity after all. Just fill in the blanks”
Year Increase from C/W plan
2011 X?
2012 Y?
2013 Z?
……
2021 AA?
total 2011.. 2021
Thanks, my old eyes hurt looking at those spread sheets of yours.
ILSM, not quite all, but it soon will be.
Jack, You are one persistent and pesky deceiver/disbeliever! 🙂
Dan, thanks for joining in. You said: “The effort to put SS front and center is quite widespread.” and this: “Our defense is of the program, whether it is being undermined by dem or repub, ‘friend’ or foe…any other consideration is actually secondary,…” yes, SS and “socialsecuritymedicaremedicaidentitlement” (let me add mandatory spending) is moving front and center because we are at a tipping point where they exceed annual revenues. And defending them is actually not an issue. Defending them without considering them within the budget/deficit context within which they live is an issue.
The budget/deficit issue is one identified by the conservative side of the political spectrum. Because it is coming from that side, and because we are so hyper-partisan it is an almost automatic response to protest each other’s arguments. Please note Buff and I have not presented anything attacking SS.
Finally, how much confidence would anyone have in expending energy on drafting an article when you say: “If you care to send a post providing a format on deficits that we can agree on please do, and I may post it.” That’s not very encouraging. 🙂
“A majority of American voters (and a longer list could be created by googling).” CoRev
Whether or not a majority of Americans have been convinced by the bullshitters I can’t say, but neither can you. That the corporate media has by and large bought into the BS is not surprising given that most larger corporations seem to want to escape any responsibility for their workers’ retirement needs. And the political class is a reflection of what the corporate elite think, wnat and expect. Peterson is the best personification of that phenomemnon.
Regarding a majority of American’s” opinion in respect to Social Security, which is the topic of this thread, here’s a summary of the findings of a study completed two years ago: From F.L. Cook;
http://www.allacademic.com/meta/p_mla_apa_research_citation/2/8/1/0/8/p281082_index.html
“Historically, Medicare and Social Security have enjoyed widespread support from both policy elites and the general public. However, at the policy elite level what was once a politics of consensus, marked by extensive support for Medicare and Social Security, has transformed into a politics of dissensus, marked by heated and divisive rhetoric regarding the state of the programs. In this paper we ask whether the politics of dissensus at the elite level has caused public support for Social Security and Medicare to weaken.
Public support for these two programs is often said to rest on two pillars of public opinion. The first pillar is a belief in the core purpose of the programs; the second pillar is the belief that the programs are affordable public expenditures. Using data from dozens of public opinion surveys over time, we consider how strong the two pillars of support remain in an era marked by political rhetoric of dissensus. First, we analyze historical trends in public opinion in the support for the purpose of Medicare and Social Security. In doing so, we also consider the extent to which public opinion is unified in its support for the programs, or whether what was once a “single public opinion” has since become divided by partisanship, ideology, and age. Second, we examine the extent to which the public expresses concern over the future financial viability of the twoprograms.
Our analyses find that while public support remains strong, and relatively unified, in the purpose of Medicare and Social Security, the second pillar of public opinion (that the programs are affordable public expenditures) is weaker. Finally, we show that members of the public support a few incremental changes that would address their financial concerns and oppose a number of others. We conclude by suggesting that it behooves policymakers to take a careful look at where the public stands and build on that support in order to overcome the current politics of dissensus.“
Rdan,
When the response to both deficits and surplusses is the same (“We need tax cuts”) one must suspect there is something more going on than response to the current specific situation. Same holds true for dragging out SS as the culprit for any and every thing that ails us. (The use of “ails” is deliberate.)
As for the “connection” between SS and the budget, isn’t it simply the fact that Congress borrowed money it doesn’t want to pay back? Sure, the budget is hurting. So are those in foreclosure. So were the banks!
The difference seems to lie in who gets help and who has to “take their medicine.” And there again, inquiring minds must notice a pattern.
Linda R.,
Your right on the money. I have said many times before the Democrat President Obama and the until Nov overwelmingly Democrat Congress sure as heck doesn’t want to pay it back.
And I sure as heck notice th epattern of who has to take their medicine and who doesn’t. Welcome to Obama’s world…
Islam will change
Jack,
Your list needed to start with Democrat President Obama the leader of his party, then follow it by the now bi-partisan congress. Then you can add the guys on Obama’s deficit commission, and then finally you can get to the list of names of people no one has heard about.
But nothing happens without that first name…
Islam will change
buffpilot,
“Its just a political question how it will be addressed.”
You could have stopped there. Coberly’s mention of budget in this post was in reference to SS. This isn’t a court of law where ANY mention of something opens a door. You listed “fixes” for SS. There is, no doubt, an even longer list of “fixes” for the budget, and opinions about them would differ, but that was not the topic.
“just a political question”? Doe this mean you are minimizing it? Or are you categorizing it? Are you suggesting that it will be solved, and only the choice of solution is in doubt?
The choice of solution will have profound impact on both the program and on our society, and as such, discussion of both is both appropriate and urgently necessary – especially since some of the “solutions” endanger both the population and the program. We continue to have at least an illusion that the will of the people is supposed to influence the actions of our elected Reps. It is better, therefore, that the people be exposed to, and/or aware of, the facts and the history of the program and its budget, as well as the nature and background of the proponents of various “solutions.”
Personally, I tend to dislike “solutions” that blur the line between Social Security and the General Fund. That’s why I particularly like the Northwest Plan (and why I see the recent Obama Compromise as a travesty).
Linda R, the only quiblle I have with your comment is the understanding of: “When the response to both deficits and surplusses is the same (“We need tax cuts”) one must suspect there is something more going on than response to the current specific situation.” the original Bush tax cuts were there to get us from the “budget surpluses as far as the eye can see” scenario. The second round were to provide stimulus to the early Bush recession. The 2010 extension of those cuts were also provided as stimulus (as well as many added billions) to the current intractable recession. They clearly were not part of any direct deficit reduction attempt, with the exception of trying to improve the economy which may have a salubrious deficit affect.
buffpilot,
Welcome to the corporatist USA, buffpilot. The challenge is in seeing through the propaganda to find the real agenda of the real power, which in this country means those with both the means ($) and the single-minded determination to prevail at any cost (not just $).
CoRev
Of course, the stated reasons vary. As to the extension of the Bush tax cuts: 1) There were better ways to provide stimulus (but politically unfeasible due to timing and opposition); 2) An extension for all but those making over the $200/$250K threshold would have been a recognition of the “deficit problem” – IF that was the real issue.
Further, an agreement to cut SS contributions, even on a temporary basis, in exchange for letting Making Work Pay expire, was a double blow to those people who need both programs. Not to mention a gift to the opponents of SS as we know it.
Linda, I agree with everything you said. I really don’t want to go down the better stimulus road, though. 🙂
Yes, It’s not going broke, but that’s not the point. Social Security is a losing proposition for anyone above the bottom quintile of income earners. This is not even discussing the economic impact of using a $700 billion-dollar program to fund government projects instead of private enterprise.
And even for the poorest full-time workers, that FICA money could go towards paying off the morgage early.
http://crwl.blogspot.com/2011/02/social-security-may-not-be-going-broke.html
Nick,
I have to go. But please read the link to Webb’s Social Security at the top. Its an excellent primer. Then come back and try again….
Islam will change
“the poorest full-time workers” overwhelmingly do not have mortgages – even toxic ones.
“Social Security is the ONLY way most workers have to save their own money, safe from inflation and market losses, so they can retire at a reasonable age.”
I’m sure coberly can provide a better response when he returns, but you are ignoring the fact that SS is not an investment. It’s insurance. Some people never file a claim on their homeowners insurance, but they buy it anyway because they know the future is unknowable and stuff happens.
None of Webb’s postings discuss the fact that Social Security is a poor investment, compared to other low-risk vehicles, for everyone above the bottom quintile.
Furthermore, there is no discussion of the negative economic impact of investing 2.5 trillion dollars into government programs instead of the economy.
Social Security is an annuity, which is a form of insurance. SS forces everyone to buy a poor annuity even if its not the best fit for them.
Furthermore, on poor workers, plenty of them own their own homes — particularly in the midwest. And more would be able to afford homes without the FICA burden.
And as mentioned, SS is a good deal for those in the bottom quintile, but a raw deal for those above there (I think there is debate for those in the second quintile).
CoRev,
Sending a post with the caveat of mandatory posting doesn’t seem reasonable. The post you sent to publish here and then put up in the last open thread is a case in point…first, I hadn’t read it by the time you popped it up. Second, the first half began the question of deficits but the second half turned into a political statement, which does not answer a deficit question.
On the economics level there are experts who say that while we need caution the particular situation of the US does not make short term debt ‘dangerous’. Black, Galbraith, etc. Many others. But the debate is beyond my pay grade in this area. Also discussed are the analogies (Greece) and what ifs that are debated, but not in regular media except as words of alarm. Some economists know the theories involved…not you or I. I could invite several to post here should you indicate a desire to learn theory and models, which is what economics actually involves.
Then you wind up in tax theory, other macro, and impacts of spending. I notice you throw away the concept of multipliers in a sentence without establishing or linking to the research and debate and alternatives the actual research indicates.
A different level of discussion involves using the statements of Bush’s own economic advisors on the efficacy of such actions on the stated goals set forth by the politics of that time to use the ‘stimulus’ as a theme.
So while I understand the need to discuss the deficit, we have to choose at what level is useful to this audience. A post helps determine that level, and comments either accept that level or not, or change the spotlight.
The deficit is not divorced from taxation and the economy. Economics today is about pricing mostly for things we need, but demand defined by economics is NOT about ‘hearts desire’ sorts of things which is mostly the political definition of demand.
So yes, take a chance, re write if necessary. People do that, and not every guest gets published for any particular post.
Dirk’
you must really really like that 40 cents that you are willing to lose your Social Security by turning it into a rich man pays welfare program.
The SS tax is not “regressive”. The SS program returns a higher percent of money “invested” to the poorer end of the income scale after a lifetime. It is nonsense to talk about a progressive program because the front end does not tax the rich as much as you would like.
it’s as if I borrowed a dollar from you and borrowed two dollars from a guy with ten times as much money as you. Then I repaid the other guy two dollars and ten cents, and repaid you one dollar and twenty cents. And you complain because I should have borrowed ten dollars from the rich guy, and, I suppose repaid him nothing and repaid you eleven dollars.
Greed is just as stupid in a poor person as it is in a rich person.
Buff
I think I answered this already. Basically I agree with you that the deficit is a problem. That the Democrats are feckless. That it is a political question. But NOT that SS is “just another line.”
SS is paid for by the workers themselves. IT has nothing to do with “the budget.” “The budget borrowed money from SS to buy something else. “The budget” needs to repay the money it borrowed. That is not a problem with SS. It is a problem for “the budget.” The congress needs to raise taxes until the debt is paid down to a sustainable level. IT does not need to steal the money from the workers who were told they were paying into their retirement fund.
Buff
I have no great confidence in Obama. His “accomplishments” are not what I would describe as those of a progressive statesman, but more the grist of a centrist seeking any small morsel from his adversaries on the right at the expense of his previous supporters on the left. He seems to have backed off of the Deficit Commission’s focus on Social Security, but that may only be a bargaining strategy. he still has room to disappoint his base yet again by putting ‘adjustments” to Social Security once again in his never ending pandering to the corporate flacks of the Republicratic Party.
And I may have interpreted some of your comments too harshly. If so my apologies. You were beginning to sound a bit too like CoRev.
buff
my point is that Social Security has nothing to do with the deficit.
this is a post about SS.
buff
maybe the problem you are having here is that js kit has messed up the order of the comments.
Buff
I agree with that. but you need to understand that your comments often sound like you think we should stop talking about SS while it is under attack, and talk instead about Obama and the deficit.
You should talk about Obama and the deficit, but not to the extent of obscuring the attack on SS and the fact that SS pays for itself. It has nothing to do with the deficit.
Buff
no promises. you see, the President just appointed a “deficit commission” who said that the way to solve the deficit was to screw the people who pay for their own Social Security.
CoRev
this is the sort of comment that makes me think you have lost your ability to reason.
what i am objecting to is your trying… or not trying… to obscure the point of my Post… that Social Security is not going broke and does not cost the government a dime… by saying “lets not talk about that, lets talk about the deficit.”
And while you may not think it’s fair, the opposite position is not contradictory. As long as the enemies of Social Security are blaming the deficit on Social Security, it is not only proper, it is necessary for me to step in and say, no, that’s not true.
But if you want to write a post about the deficit without blaming social security or suggesting cutting social security as a way of paying for the deficit (debt) i will be very glad to see it.
Bruce Krasting
I summarized the spread sheet in my earlier reply to you. In the first ten years the Northwest Plan adds nothing to the tax for OASI, and adds one dollar and twenty cents to the tax for DI, for each the employer and the worker. (that’s per week). I don’t talk about HI and Medicare in general because the cost of those programs is subject to other considerations than the simple arithmetic of paying for predictable benefits.
the CBO fix would raise the OASDI tax by forty cents per week each year. So it would be four dollars per week higher in ten years than it is today.
But you are playing a game. Fortunately giving me a chance to repeat some facts that you can’t understand, but I hope the average worker can.
CoRev
by trying to distract attention from the basic facts about Social Security you are attacking it.
as for the post… you got the same guarantee i get.
I wrote a reply to Nick’s blog but could not get it to publish. here it is:
Nick the “break even” point for people who pay the maximum SS tax for 40 years is 20 years. In other words if they live out their life expectancy they will get all of their money back plus an effective interest equal to inflation and the average growth in the economy… or about 5% nominal. Plus they get the insurance just in case one day they wake up with a stroke, or their business becomes obsolete, or their sure thing on wall street comes up lame. SS is not a bad deal. And your saying so doesn’t make it one. Those other comparisons you make are the kind of games people play with numbers to fool the rubes. What they amount to is that SS is a GREAT deal for the people who run into some bad luck in their lives. You’d be surprised how many of the truly poor are “undeserving.”
Dale is wrong when he says:” Basically I agree with you that the deficit is a problem. … But NOT that SS is “just another line.”
But when we look at the President’s 2011 budget what we find right at the top:
4 National defense 5 Human resources 6 Education, training, employment, and social services 7 Health 8 Medicare 9 Income security 10 Social security 11 (On-budget)
12 (Off-budget)
14Veterans benefits and services
From here: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2011/assets/hist03z1.xls
So saying this “SS is paid for by the workers themselves. IT has nothing to do with “the budget.”” is also wrong.
Dale, with this argument: “what i am objecting to is your trying… or not trying… to obscure the point of my Post… that Social Security is not going broke and does not cost the government a dime… by saying “lets not talk about that, lets talk about the deficit.”” you are making an argument with yourself.
You are hyper-sensitive about SS, and nothing I said here even referenced SS, going broke, or …. The videos accurately protrayed the components of the budget and deficit.
Ernest
health care need not cause any deficit either. we just need to decide we want the health care and are willing to pay for it, and medicare or something similar is the cheapest and safest way to pay for it.
then we can stop letting the bad guys scare us.
even with the high cost of health care, and the high projected cost of medicare… HI… the cost will grow only as a percent of income. IT will not grow in absolute dollars anywhere near as fast as incomes are projected to grow. So it will not be a choice between health care and eating, or even health care and a new submarine, but a choice between health care and a SECOND vacation in Vegas. or health care and a new lexus every year instead of every other year.
the bad guys know this. they don’t expect you to think about it, because they know you don’t know all the facts but jump to conclusions based on scary stories they tell.
Nick
Government programs ARE an investment in the economy. Unless you think learning to say yes, boss, in Russian is god for the economy.
I won’t say all government spending is a wise investment. But the idea that no government spending is good for the economy is stupid.
You might look around you right now for those private investments needed by the economy that are going begging for lack of money. Then, of course, if you have any money to spare, you might want to invest in one of them.
CoREv
this is nonsense. you are obfuscating.
CoRev
you are beginning to sound like a nasty little kid playing word games to annoy his big sister.
BWAHAHA, giggle. Got caught out even again. It would behoove you to go to the above cite to review what is actually in the president’s budget.
Here’s a hint, your const5ant carping that SS is not part of, calculated in, … the deficit. Try this on:
—————–Total Recpts- Outlays – — Surplus
2009 –2,104,995 –
3,517,681 –
-1,412,686-
1,450,986 3,000,665 -1,549,679 654,009 517,016 136,993
BWA HA HA, got caught out again. It would behoove you to go to the above cite to see what’s actually in the president’s budget.
Here’s a hint. Take a look at the 2009 budget. Here’s the link: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2011/assets/hist01z1.xls
Pardon my math, but.. $1.40 per week times 160mm workers comes to $10b. As this is a phased in program each preceeding year would be less. This comes to $55 billion over ten years.
Sorry Dan this does not help. You realize that the benefit paid number for Feb 2011 was 59.7b?? Your 10-year plan does not even cover one months worth of current payout. This does not change anything.
You will say no no! 20 years out there really is some bigger numbers.
I say to you that you have just defined a plan that kicks a problem down the road. These ideas where a big bill is passed to a future generation are not in favor these days. For good reason.
No soap.
Krasting
you are still an idiot. The SS “fix”, both mine and CBO’s assumes the Trust Fund is honored as legally required. The Trust Fund will take care of the “looming deficit.” The “fix” is to take care of the long term deficit caused by longer life expectancies. And the “fix” is on top of the existing tax. So you are talking nonsense as usual. The point of the fix is exactly not to kick the problem down the road but to pay for SS as we go. like it’s spozed.
Sorry, this is not meant as an insult. I get no pleasure out of hurting your feelings. But you are showing signs of serious brain damage, or you think you can fool people the way Biggs does. If so, hate to tell you, but you are not in his class.
I was doing some tweaks to the blog earlier — perhaps that’s why you couldn’t comment (you probably can now).
I believe I wrote 20 years for the break-even on a max contributor — not arguing there…so ‘winning’ is getting my contributions back in wage-adjusted terms? Thank you very much.
The life expectancy for a man in the US is 75 — so yo’re looking at collecting half. Scoring with the Death Calculator (below), you’ve got a 50/50 shot at collecting for 20 years — a woman has a 2/3 chance…and 10% of all 55 year olds won’t make it to 65…Black men only have an 18.5% chance of collecting a chance.
This is the great system you love? one that gives “all the marbles” to whoever can live the poorest the longest?
I’m not just saying its a “raw deal” to make it so — the numbers speak for themselves…unless your’re in the bottom quintile and healthy.
There are all sorts of non-coercive ways to plan for the unforseen that are much cheaper than this scheme.
Ever heard of long-term disability insurance? 1 – 2% of your pay will give you 2/3rds of your salary for life if something should happen to you (like a stroke). What does disability pay, $600 a month?
There is also a magical product called “term life insurance”, where for a small fraction of the policy amount, your estate and family are protected against death…you could get whole life too, but its not as good a deal. What’s the death benefit from social security anyway?
You can also reduce risk by lowering your debt load — like paying down your mortgage.
The poor have access to all these policies, and I wouldn’t be opposed to subsidies for them to purchase these products either. Shoot, if the government bought whole life for the poor, it would be much cheaper (and better for the poor) than SS.
Social Security was a scheme to boost demand for Treasury securities and redistribute resources to the most destitite…but there are better ways to do that.
http://deathriskrankings.org/MortStats.aspx?compare=1&222
JS Kit swallowed my comment, let me try again.
10 = total SS
11 = portion of SS on budget
12 = portion of SS off budget thus 11 + 12 = 10
2008: 17830 (11) + 599197 (12) = 617027 (10) 11/10 = 2.9%
2009: 34071 (11) + 648892 (12) = 682963 (10) 11/10 = 5.25%
2015: 39517 (11) + 860617 (12) = 900134 (10) 11/10 = 4.39%
Now since only 0.9% of that final number is due to admin I can only guess that the difference is net Railroad Retirement Exchange which I would think was on budget. But however you slice it 95% plus of Social Security is off budget and if I am right about RRE most of the rest in in the form of Railroad Workers who paid into Social Security before or after their career on the railroad and get a credit for those contributions on their RRR benefit check. (There is also a transfer the other way for people who didn’t work long enough for the railroads to qualify for RRR, they see their contributions in their SS check).
Making Coberly between 95-99% correct and you scoring massive fail for not even understanding the numbers in the spreadsheet.
Maybe you should stop trying here.
“Congress does not look at revenues as dedicated,”
They don’t? Then why did they write language into the Social Security Amendments of 1939 specifying precisely that? Congress has gone back and forth on how they account for Social Security for budget calculations but they have NEVER said that FICA wasn’t dedicated exclusively to Social Security.
It is not spelled ‘Cato-gress’
“SS and “socialsecuritymedicaremedicaidentitlement” (let me add mandatory spending) is moving front and center because we are at a tipping point where they exceed annual revenues”
Only if you disregard interest as part of ‘Income’. Which implicitly is to discount the value of the Trust Fund to zero. That is your ‘tipping point’ builds in the assumption that every President from Reagan on was a thief and a liar by counting Social Security surpluses including interest as positives for calculating the top line deficit/surplus number (i.e. Buff’s $1.5 tn).
On an apples to apples basis in regards to deficit reporting over the last 27 years and more Social Security is running a $72 billion SURPLUS this year. And it wasn’t untiil Hassett moved the goal posts in March 2009 by switching that standard calculation to say we should really be talking ‘primary surplus’ that this whole ‘tipping point’ meme emerged.
Come on, we talked about all of this in real time back in March 2009, insert ‘vanishing surplus’ into the AB search box. You just slurped this talking point up like all other right talking points since you washed up on these shores. The argument that we should be focusing on cash flow has no basis in law, history, or even current practice (given that DI has been cash flow negative since 2006).
If you were new here you would have an excuse, after all anyone can be confused by the current state of media coverage, yet even after being beaten in the eyes of everyone but yourself and maybe Sammy on this topic for years here you doggedly continue to insist on AEI/Heritage talking points. It gets old.
CoRev after all this time you persist in the belief that somehow I won’t check your numbers. Odd.
Jim, I’m sure Bruce and Dale, have the actual numbers, but AFAIK the cash flow went negative in 2010. The number that comes to mind is ~$45B. This year with the 2% cut in revenue it will be worse.
Bruce, as I have already said earlier, when we get to calculating accounting totals, all receipts are included and lumped. IO agree with what you said: “Congress has gone back and forth on how they account for Social Security for budget calculations…” What we are discussing is the accounting functions versus the math functions that reach those accounting totals, and we are probably splitting hairs over dedicated. Dedicated surely can not mean only spent on, because excess FICA funds move to the GF.
The bottom line is that once collected the FICA dollar is not put into a FICA bucket ans stored there anymore than your savings dollar is put into your personal savings bucket at a bank.
Bruce, as I have already said earlier, when we get to calculating accounting totals, all receipts are included and lumped. I agree with what you said: “Congress has gone back and forth on how they account for Social Security for budget calculations…” What we are discussing is the accounting functions versus the math functions that reach those accounting totals, and we are probably splitting hairs over dedicated. Dedicated surely can not mean only spent on, because excess FICA funds move to the GF.
The bottom line is that once collected the FICA dollar is not put into a FICA bucket ans stored there anymore than your savings dollar is put into your personal savings bucket at a bank.
CoRev,
You persistently flip flop between pointing to the SS program as a big drain on the county’s tax payers, “SS may be the “prize”, but it is part of a bigger budget problem.” and then stating that you don’t care how the deficit is reduced. That is what we all mean when we point out your deceptive inclinations.
This added statement by you,
Of all the entitlement programs SS is the the best funded, but as the “President, Congress, the Deficit commission, the voters, and even Pete Peterson understand that SS is just part of the growing mandatory spending portion of the budget, that left side of the string,” further indicates that you want it understood that the SS Trust Fund as a debt holder is a part of the deficit problem. All Treasury notes could then be said to be a part of the deficit problem. Are you next going to suggest that the Treasury suspend all interest and principal repayment on all Treasury notes? That would be a big help in reducing the deficit in the short term. Legislating those Treasury notes out of existence, the ones held by private entities and foreign countries, would be a good long term solution to the deficit. Of course the tax breaks for corporations and the wealthiest Americans could be eliminated to help honor those Treasury notes. Here are two recent articles in the NY Times that explains part of the taxation problem.
http://economix.blogs.nytimes.com/2011/02/01/the-details-on-corporate-taxes/?scp=2&sq=corporate%20taxes&st=cse
http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html?_r=1&scp=1&sq=corporate%20taxes&st=cse
I’m still waiting to read your deficit reduction plan that doesn’t raid the debt holders assets and does be specific as to waste, mismanagement and adjusting the tax code.
I’ve double posted this comment so that CoRev would be more certain to see it as it appears far down the thread. Dan this manner of listing comments is a bit strange.
CoRev,
You persistently flip flop between pointing to the SS program as a big drain on the county’s tax payers, “SS may be the “prize”, but it is part of a bigger budget problem.” and then stating that you don’t care how the deficit is reduced. That is what we all mean when we point out your deceptive inclinations.
This added statement by you,
Of all the entitlement programs SS is the the best funded, but as the “President, Congress, the Deficit commission, the voters, and even Pete Peterson understand that SS is just part of the growing mandatory spending portion of the budget, that left side of the string,” further indicates that you want it understood that the SS Trust Fund as a debt holder is a part of the deficit problem. All Treasury notes could then be said to be a part of the deficit problem. Are you next going to suggest that the Treasury suspend all interest and principal repayment on all Treasury notes? That would be a big help in reducing the deficit in the short term. Legislating those Treasury notes out of existence, the ones held by private entities and foreign countries, would be a good long term solution to the deficit. Of course the tax breaks for corporations and the wealthiest Americans could be eliminated to help honor those Treasury notes. Here are two recent articles in the NY Times that explains part of the taxation problem.
http://economix.blogs.nytimes.com/2011/02/01/the-details-on-corporate-taxes/?scp=2&sq=corporate%20taxes&st=cse
http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html?_r=1&scp=1&sq=corporate%20taxes&st=cse
I’m still waiting to read your deficit reduction plan that doesn’t raid the debt holders assets and does be specific as to waste, mismanagement and adjusting the tax code.
Jim CoRev
Jim, CoREv is probably right about the 2010 negative cash flow. But that negative cash flow is what the Trust Fund was created to take care of. There is always some small short term negative cash flow that the Trust Fund bridges from month to month. There is a “normal reserve” built into the Trust Fund to take care of periods like the present recession when people are out of work and not paying enough payroll tax to cover current benefits. And there is a very large “extra reserve” to help pay for the Baby Boomer retirement. This extra reserve was created by collecting “extra taxes” from the Baby Boomers themselves.
But I think that when you count the interest on the Trust Fund, Social Security actually INCREASED its assets even in 2010. It’s like if you have a million dollars in the bank and you earn fifty thousand a year in interest, along with your regular paycheck of a hundred thousand a year. Then one year you spend a hundred and ten thousand, but you put forty thousand of your interest back in the bank. You had a “negative cash flow” but you also increased your assets.
The 2% payroll tax holiday was a political trick to make the finances look worse… and actually be worse: they gave you your retirement savings and said, go buy a bottle of good scotch with this.
then they will turn around and say… lookie lookie Social Security is going broke.
and they will “repay” the Trust Fund by borrowing from the public and say lookie lookie Social Security is adding to the deficit. But it’s not Social Security that’s doing that… it’s the criminals and idiots in washington. They have already begun to destroy Social Security. Only they don’t call it that. They call it a “payroll tax holiday.”
Nick
you don’t seem to have the actual facts.
life expectancy at birth is not life expectancy at retirement. rich people live longer than poor people… that’s what we were talking about… twenty years of life expectancy at retirement for a person at the top of the SS income scale. you yourself pointed out that the poorer people get their “money back” in far less than twenty years, only then you thought it was a bad deal that they got “more” than the rich guy. of course they don’t get more, they only get a higher percent of what they paid in, some of this is a bit tricky to understand if you don’t want to understand it.
and if you can show a policy that pays as well as Social Security, bring it out. i’ve been looking at this for ten years and haven’t seen one yet. but then i look harder than you do.
CoRev
it is you who are confused. that often happens to people who are lying. you may not think you are lying, but trying desperately to make an invalid point by playing silly word games is lying, and it’s bad for your mental health.
Every dime paid out by Social Security is collected from the workers “Federal Insurance Contribution.”
Social Security pays for itself. It doesn’t cost “the government” a dime.
Jack, let me as clear as it is possible over this confusing issue. SS is part of the mandatory spending portion of the budget. The mandatory spending portion is close to crossing over the available revenue line. meaning swe are at a point where all revenues will be “dedicated” to mandatory spending. That leaves every other dollar spent borrowed (the spending deficit.)
So saying SS has a dedicated funding stream is little different than saying the “mandatory spending portion” of the budget also has dedicated revenue. So my point has been, concentrating on one portion of the mandatory spending budget obfuscates the over all budget/deficit problem, by trying to separate it from the rest of that protion of the budget.
Part of what I think is going on with these discussions, is a reaction to the inclusion of a SS cut in the extension of the Bush tax cuts, and the realization how politically easy it was to pass. It not only threatens the SS Program, but the entirety of the Dem/liberal agenda.
The bulk of the verbage is, however, due to the confusion over terms and processes.
Jack, let me as clear as it is possible over this confusing issue. SS is part of the mandatory spending portion of the budget. The mandatory spending portion is close to crossing over the available revenue line. meaning we are at a point where all revenues will be “dedicated” to mandatory spending. That leaves every other dollar spent borrowed (the spending deficit.)
So saying SS has a dedicated funding stream is little different than saying the “mandatory spending portion” of the budget also has dedicated revenue. So my point has been, concentrating on one portion of the mandatory spending budget obfuscates the over all budget/deficit problem, by trying to separate it from the rest of that portion of the budget.
Part of what I think is going on with these discussions, is a reaction to the inclusion of a SS cut in the extension of the Bush tax cuts, and the realization how politically easy it was to pass. It not only threatens the SS Program, but the entirety of the Dem/liberal agenda.
The bulk of the verbage is, however, due to the confusion over terms and processes.
CoRev
once again you are confusing yourself. my personal savings are not held as dollars by the bank. but they are credited to my account. and reappear as dollars when i ask for them back.
you are playing games with words here. keep your eye on the ball.
to make this a little clearer. Krasting is claiming that the fix is too small to pay the entire Social Security bill. of course it is. the fix is the small addition to the present tax needed to pay the small increase in costs caused by longer life expectancies.
Krasting should understand this. he is either playing a stupid game, drunk, or suffering from alcohol related brain damage.
Dale, what is yor point here? No one is arguing against this! I just showed, how confusing is this subject and refuted two of your persistent claims, not in the budget and not calculated as part of the deficit.
Now your response is to call me names and then to obfuscate. Accept or refute my comment, but please at least look at the sources provided.
What CoRev is doing here is not trying to make any honest points. He is just the guy standing up in the meeting when everyone was about to take some useful action to address a real problem [they are stealing your Social Security: you need to stop them.] and rambles on and on talking nonsense until most of the people have given up and gone home or just lost the momentum they had for doing something.
i can’t tell if he is an “agent” … one of the Big LIars’ little liars … or just a silly old man who likes the attention. But he reminds me of a nasty little brother who likes the attention he gets from annoying his sister and then playing stupid word games to “prove” that she was the instigator.
sorry for this, but he has certainly done a good job… along with Bruce Krasting below… of injecting distracting nonsense into this thread.
please try to keep your eyes on the prize: Social Security is not going broke. It does not cost the goverment a dime. It is your insurance so you can retire in some comfort even if your other plans don’t work out. And it is under attack. Very serious attack from clever, well funded, organized Big LIars. They are smart. It takes some care not to be fooled.
But above all, you, we, must DO SOMETHING, or you.. or most workers anyway… will end up with no ability to retire before you are too old to be of any use to your boss or yourself. Remeber, it’s your money that you are saving for your own retirement, insured against losses from inflation, market losses, or personal bad luck. your own money. not the government’s. it doesn’t take anything away from the rich man. it doesn’t take anything away from any government program.
No, I do have the facts — did you even click on the Carnegie Mellon Death calculator (probably not)? A man who is 65 years old today has a 78% chance of living to 75 and a 43% chance of living to age 85. And we’re not talking about those who don’t even make it to retirement — 15% of 35 year old males won’t make it to 65.
I listed a whole sample of insurance products that can do what SS does — it you want to call social security an insurance product. We can talk about investment products if you want to go that route. The safest way to repalce social security is to acquire insurance products that protect you and your family while paying down debt. If you don’t have a housing payment in retirement, the less you need. And if ending social security would allow every American to have a 15-year mortgage istead of a 30-year mortgage, that is a lot of wealth — that could be used to pay for old-age medical care, for instance.
When I say the low income earner gets “more”, obviously I am talking about return on money put in. the middle income earner and uppler middle income earner get a smaller percentage return than they would with whole life and private annuities, while the lowest income get an amazing return — the minimum qualifier gets all of their FICA contributions back in a year — with a small return.
You haven’t found what you’re looking for because there is NOTHING out there with the progressivtiy and redistributive effects of Social Security. You cannot find a private insurance product that gives poor people a wage-adjusted 100% annualized ROI, while someone at the $100k/year income level gets 5% — the private sector just doesn’t work like that.
I support an equitable system where you get out of it what you put in to it — isn’t that fair? And since I’m only 30, It will take me 25+ years to break even
Sigh, was there any point in that rant?
Dale at least add value. You just repeated what I said!
CoRev
but it is you who creates the confusion.
certainly this post is a reaction to the recent SS “tax cut,” which was a brilliant move by the enemy in a long war to destroy Social Security.
that’s why i am trying to get people to focus on the reality and not the confusing terms and processes.
I’m sorry Bruce, but saying this: “The argument that we should be focusing on cash flow has no basis in law, history, or even current practice (given that DI has been cash flow negative since 2006).” The Federal Budget traditronally runs cashflow negative, but they are at manageable levels. However, at 40 cents of every federal dollar spent we are approaching a danger point where nothing short of draconian levels of Government action will lower that danger. What is that danger? Depression, another recession, years of stagnate economies, etc.
Jack calls me a reactionary wishing to return to the good ole days or yore. Yup! I pine for those good ole days of 2004,5,6. Dont you? Yes, that was snark.
Our views differ. I believe the budget/deficit issue is getting close to a danger point. You do not.
Nick
you still don’t have the facts. you have some facts which you are unable to analyze in sufficient detail to understand.
even the enemies of Social Security used to admit it was a better insurance program than private insurers could afford to match.
you are like most people. you see a “fact” and you free associate from it to a conclusion you want to reach. i’ll say again, present a complete program with all the details that does what social security does… insurance that protects all workers, pays for disability, pays your dependents enough to live on if you die, pays a sufficient retirement, indexed for inflation, and returns at least 2% real on your “investment.”
you won’t find it, because it isn’t there.
then you need to realize that it does all this with a fraction of your wages.. so you have plenty of money left over for all those investments that are going to make you rich.
it’s hard for you to see all this because your ideology gets in the way. you can’t even see that since the bad old new deal provided a way for ordinary workers to manage risk, the rich have gotten richer.
of course we know they did it with their own hard work and smarts and the government had nothing to do with it.
CoRev
you can repeat this more times than i can answer it. when i worked in the psychiatric hospital i had to learn to walk away.
Why don’t you respond to anything I actually post? The market provides a variety of products — that I discussed — that meet the needs that SSA currently pretends to meet. For an additional 12% in contibutions, Galveston provides a whole life insurance plan that provides 50% more in benefits for middle income workers and about the same for low-income workers. The SSA acknowledges the gains for middle-income workers, even assuming a 4% return for their program — below the 6.5% they’ve averaged over 30. There is also a fat, six-figure death benefit in Galveston. There’s supposedly some mythical barbara boxer report that found three families that would do better under SS — the report doesn’t exist anywhere and I’ve read that she made wild assumptions.
CoRev that -$45 billion was more than covered by interest, by the normal way of scoring Social Security ran a $72 billion surplus
Only around $6 bn of that was due to OAS, the rest was mostly due to ongoing and growing negative cash flow from DI, a process that began in 2006.
The 2% one year holiday will be covered by a $120 billion transfer . It is not the fault of Social Security that Obama nd the Republicans took this clumsy method to deliver tac cuts to okers alongside the extension of tax cut for the top 2%. Evey Social Security advocate I know opposes the holiday.
Nick
you are suffering from a common syndrome. if i disagree with you, you say i do not respond to what you wrote. I think that when you account for all the facts, SS is the best deal that workers can get.
but that’s all the facts, not the cherry picked facts.
CoRev this is just pathetic.
You are trying to exploit two meanings of ‘budget’, one as used in the terms ‘on-budget’ and ‘off-budget’ and the other in the sense of the printed ‘Budget of the United States’. Clearly Coberly was making a claim about the first, a claim that would have been 95-99% validated if you had supplied even one year of numbers to go with those spreadsheet labels. Social Security and its Trust Funds are dicussed in the printed Budget, but if you go to h explanatory materials in the Analytical Perspectives on the Budget, mostly in separate sections of the etxt, walled away from the small b budget per se
“So SS is clearly included in the president’s budget deficit total.”
No it isn”t, not in the sense you are claiming. You seem to think that ‘budget total’ and ‘deficit total’ are equivalent and equal, they aren’t.
In deploying the word “clearly” you have just illustrated the old principal that “everything is simple if you ignore the complexities”. You simply don’t understand this topic well enough to play “gotcha!”
Yes, there was an important point to what Coberly is saying and that ppoint bears repeating. The point is that there are many who wouold conflate the issue of a properly finded Social Security program and a poorly funded general budget. Social Security is in the black, well funded via FICA deductions and Trust Fund assets and earnings.
On the other hand the general budget is now, and has been for a decade, running a serious deficit. Those concerned about that deficit need to understand and acknowledge that Social Security benefits do not contribute to that deficit. Any payments from the general fund to the Trust Fund are no different in character from all payments from the general fund to other holders of Treasury notes be they foreign states, private banks or private individuals. Admit that Treasury notes of all types represent government debt and that the payment of interest and the principal is the only connection between the debt holders and the budget deficit. Admit that the debt holders are entitled to that payment of interest and principal, or explain why there would be any stratification of those debtr holders if interest and principal payments were to be interupted.
Admit that FICA revenues cannot be used for any purpose other than the payment of SS benefits and that the Trust Fund assets are legally the supplemental source of benefit payments when FICA revenues are deficient. Any attempt to discontinue that relationship between the payment of benfits and the Trust Fund assets is tantamount to an effort to retire an unpaid debt. That i s something the US Treasury has not done in its existence.
And why would Treasuries held by the Trust Fund be retired before any other form of Treasury debt?
Yup!
Nick, welcome to Coberyland. If you persist he will start calling yout names, instead of impying some mental frailty: “suffering from a common syndrome.”
Don’t let it get to you, just make your point.
Sorry again Bruce, I’m not the one who tried to deflct or obfuscate by trying to confuse with the “on/off budget” definitions. That was you. What I showed was that the president’s budget includes SS with three lines included in that budget. Blame the president if you care to claim the on/off budget high ground.
You also make this claim from thin air: “You seem to think that ‘budget total’ and ‘deficit total’ are equivalent and equal, they aren’t.” “Clearly” I do not. I have never made such a claim.
IIRC you tried a similar gambit to deflect by making false claims of definitions in the past “Open Thread” : “” Its not my definition of entitlements/mandatory spending.”
No and it is not CBOs or OMBs either.” When challenged to provide those definitions you disappeared.
Jack, from this: “Those concerned about that deficit need to understand and acknowledge that Social Security benefits do not contribute to that deficit.” you did not look at the http://www.whitehouse.gov/sites/default/files/omb/budget/fy2011/assets/hist01z1.xls
Please take a quick look at FY2009. and not the difference from 2010. @009 are actuals and 2010 is a budget estimate. BUT, and a very big but, the total deficit shown on that 2009 line is the difference between the “on” budget and “off” budget deficit totals. In 2009 the grand total was adjusted downward as there was an “off” budget surplus.
So, yes, the SS benefits Social Security benefits do contribute to that deficit. In 2010 with a SS deficit, the total budget will be adjusted upwards versus downwards in 2009. Whe we get the president’s 2012 budget in a few days we will be able to see that change with real 2010 numbers.
I do not disagree with anything you added after that phrase.
Thanks. I don’t think I’ve ever seen someone comment like that — ignore everything you say, then say that they did.
This is what defenders of SS resort to.
No CoRev
SS does not contribute to the deficit. SS pays for itself out of payroll taxes and interest on the money it lent to the government.
The deficit is caused by the congress spending more money than it collects in taxes and making up the rest by borrowing from, among others, social security.
Your idea that SS is contributing to the deficit is like you suddenly realzing you owe on your rent and your car payment and your gambling debts, and when your brother in law asks you to repay the money you borrowed from him, you accuse him of adding to your deficit.
well, bradley
i was trying to be nice to you, but you have crossed the line. you are one of those who make a weak argument and then complain because the teacher doesn’t take the classes time to explain everything to you. or in CoRev’s case, explain it again and again.
And what of the debt service attributable to all other Treasury debt instruments? Do they some how not contribute to the deficit in the same manner that you claim that Social Security does? Why single out the Trust Fund Treasuries as being a debt burden? Intragovernmental debt is almost half the amount of publicly held government debt. So then Treasuries held by the public are a burden on the budget and should probably be suspended. That would take a great financial burden off of the budget and reduce interest expense. It will do wonders for reducing the deficit. If Trust Fund assets are a “drain” then so too is the nearly twice as large publicly h eld debt.
No – its like me saying “teacher teacher, 2 plus 2 equals 4”, and the teacher says “you must have a mental illness because it equals 5”.
So I crossed the line by bringing in external data?
Dale, take it up with the president and US Treasury. They’re the ones who calculate the projected budget deficit and track the ongoing deficit.
Jack, you’re starting to think this through (I hope!). You said: “And what of the debt service attributable to all other Treasury debt instruments?” Here I assume you are talking about those treasuries held by the public. Yes, their interest is included in the mandatory budget. Remember in the penny demonstration video, that portion left of the string.
Now that we have the fundamentals down, let’s talk about what happens to the budget/deficit when we convert them to pay the SS deficit, benefitgs paid exceed the FICA collected. That occurred in 2010.
If the SSTF Treasury is redeemed out of the GF revenue the overall debt amount goes down. There is however more shrinkage in that portion of the budget just to the right of the string. That section of pennies between the string and the line where we run out of revenue and need to borrow. That’s what I describe as the crowding out of discretionary spending for mandatory (the conversion of SSTF Treasuries.)
If, however, the SSTF treasury is redeeemd via borrowing the debt calcualtion is unchanged with the exception of any difference in interest btweeen the old and new treasury. If interest is lower on the new publically held treasury the debt is lowered by that difference. If interest is higher on the new publically held Treasury, that differeence i then added to the overall debt. The publically held debt is increased by the amount of the converted treasuries, and the intra-Governmental debt is decreased by the same amount.
Now, since the amount was borrowed, US Treasury will calculate a new value for the spending defcit. At this point the deficit is just a measure of in versus out flows of revenues and expenditures.
dR-dE= SD. A simple model. d = the period measured, R = the revenues in. E = the expenditures out. SD = spending deficit. d periods are commonly weeks, months, FY to date, and FY.
Now, I hope I haven’t messed up the tracking of those cash flow calculations.
nick
no. you got the answer appropriate for this space and my time. your facts are poorly analyzed.
it is true that you can’t understand what you don’t understand so you think you know the facts.
but you don’t. the short answer to your comments is : show us the beef. if you have a private insurance plan that will deliver the same value for the money that SS does, lets see it.
but don’t expect us to take your claim that it does on face value.
For a more complete comparison of SS and the Galveston plan, I read this a long time ago: http://www.ssa.gov/policy/docs/ssb/v62n1/v62n1p47.pdf. I was not at all impressed by the city’s replacement plan and, based on what it does better and what it does worse than SS, concluded that I would oppose a change to this type of system. But everyone’s entitled to an opinion based on what they think SS ought to accomplish.
“The market provides a variety of products — that I discussed — that meet the needs that SSA currently pretends to meet.”
Was this in your blog, or somewhere else in this thread, because I can’t find it? I cannot find an inflation adjusted annuity offered by the market. I can find one with guaranteed returns that are higher than the current inflation rate, but not ones actually indexed to inflation.
I have done the numbers, too. And SS does not provide a good return compared to past stick returns, but it DOES provide a good return if you use risk-adjusted rates. Your return is NOT as good if you earn more, but if you earn more, then you should have enough left over to risk on the higher returns we all want to think the market will give us.
In your analysis have you calculated in the probablility that you might have to retire without being able to work for 40 years? Have you calculated in the probablity that your parents might live long enough to run out of their own nest egg without SS and come to you for help?
When you pay fire insurance, do you complain that you don’t get your money back unless you actually have a fire?
You are truly on your game. You’ve used a great many words and said virtually nothing. Are you familiar with Norm Crosby? You seem to have much in common in regards to verbal skills.
CoRev,
You apparently seem to think that you’ve said something substantive with that statement. You certainly ised a good number of words, but its the meaning that seems to be lacking any substance.
Didn’t understand any of it, huh Jack? 🙂
I’m not sure it’s supposed to mean anything, but it certainly doesn’t address your concern regarding reducing the deficit.
I’m not sure it’s supposed to mean anything, but it certainly doesn’t address your concern regarding reducing the deficit. And the smug nature of your last comment supports our contention that your only interest here at the AB site is to obfuscate the discussion with long winded and obscure comments that may or may not have any valid point.
Lessee, Jack thinks it’s an obscure (Uh oh I forgot long winded) answer because he asked a short question on a complex issue, thinking that complex issue could be explained in a simple short answer. So let me try the short answer. Jack. sh$t associated with Fed Treasuries happens, and it affects the debt (or not) and affects the deficit (or not) depending on the sh$t’s color and odor.
Few here have shown they understand how and what is contained in budgets and why and how deficits are created and calculated. Without that understanding it is unlikely that those same ignoranti will legitimately discuss their surrounding issues. As has been evidenced in the past two threads.
It’s good to see that as you are pressed for clear answers to your own questions that you become increasingly obscure and then hide your obscurity behind a smoke screen of inscrutability of implied knowledge which you then insist that others don’t share and that is the basis of a failure to comprehend what it is you’re trying to say in your obscure manner.
Suffice it to say that you have still avoided/resisted providing a clear answer to your own insistent question, What is to be done about the deficit? To date we only know that you suggest that there be reductions in government expenditures. Very impressive. Reduce the budget deficit by reducing government expenditures. Even Pauyl Ryan has managed to be a little more precise than that.
And if you want to continue playing this game of hiding the answers to your own questions you should start a new thread dedicated to the budget deficit issue. Try to be clear cut as to where you think the fat lies so that everyone can try to slice a bit off here and there. Don’t be coy about your intentions as demonstrated by your protestations of, “But I don’t care where the cuts come from,” as demonstrated in this comment from you,
“CoRev
Jack, what part of: “I don’t care how it is solved” is too hard to understand? Protecting SS, or any of the other entitlements versus defense spending or any other portion of the discretionary budget, is not an issue for me.”
Jack, I’m not trying to be snarky, I have been laying out an article in my head, and I end up spending oost of the time derfining the terms and processes. There is so much misinformation, misunderstanding, ideology and political emotionalism thrown about it gets difficult to get to the meat of an article on the deficit.
I am truly surprised by it. Most of us here are older than new grads, and our educations should have been more extensive in government/civics&economics than today’s youth, but that seems not to be true.
Oh well! You stay well.
Jack, I’m not trying to be snarky, I have been laying out an article in my head, and I end up spending most of the time derfining the terms and processes. There is so much misinformation, misunderstanding, ideology and political emotionalism thrown about it gets difficult to get to the meat of an article on the deficit.
I am truly surprised by it. Most of us here are older than new grads, and our educations should have been more extensive in government/civics&economics than today’s youth, but that seems not to be true.
Oh well! You stay well.
“What I showed was that the president’s budget includes SS with three lines included in that budget.”
No you showed that one Excel spreadsheet that was ultimately used to generate a Table in the printed Budget of the United States included Social Security as a label. That doesn’t validate the claim that “the president’s budget includes SS”. You are either just playing game with language or or just too dim to bother trying to educate. If I abandon threads you are attempting to hijack it is just because you are a total waste of my time, at least after the first three exchanges in the flame war have shown you to be an incorrigible troll. Again and still. Which is shown by the legions of AB folk that jump to your defense. Well crickets do jump even if that jump doesn’t necessarily make a sound.