The few Egyptians I have met are very well educated and driven.
This is a battle in a dark conflict to show that a country with Islamic people is not insane!
Imagine a graceful shift from US sustained dictator without US militarism.
Maybe the trillions a year plundered are not necessary.
Besides with the likes of Paul and Ryan in congress the US is back at 1859 in terms of secession, what is there to defend from foreigners when the indigenous want to break the place apart.
End the war machine, how would it be divided among the seceding states?
What part of $1.5T deficit do you not understand? In 2011, Federal Tax Revenues = $2.2T, Expenditures = $3.7T. So we are spending $1.60 for every $1.00 in revenues.
The government has made lots of promises to a lots of deserving people. Widows, orphans, single moms, sick, elderly, veterans, farmers, International allies etc. etc. Why do you hold them only to the promise to SS recipients?
What part of a $1.5T deficit do you not understand? In 2011, Federal Tax Revenues = $2.2T, Expenditures = $3.7T. So we are spending $1.60 for every $1.00 in revenues.
The government has made lots of promises to a lots of deserving people. Widows, orphans, single moms, sick, elderly, veterans, farmers, creditors, International allies etc. etc. If we don’t “touch” Social Security, we will have to cut these programs more than if we did. Or we could raise taxes 60%.
There are claims being made that public discussions about the Federal budget deficits and national debt have failed to adequately discuss deficit spending issues. That may be true, but there is considerable information available beyond that pitched on the blogs, touched on by the news media, and addressed selectively by interest groups. Next week, the Administration will release the proposed FY 2012 Federal Budget which will be subsequently analyzed by CBO and other organizations. Meanwhile, there are reports available which address the broader issues related to the Federal Government fiscal years’ deficits and national debt.
There is no reason for the blog to avoid presenting the President’s budget proposal nor ignoring other reports currently available on the matter of deficit spending and national debt growth if the readership has any interest whatsoever on these issues. This blog has a number of main posters all of whom appear to be capable of pitching other issues. I will grant you that the majority of econ blogs are very weak on these subject matters, but Angry Bear doesn’t have to follow the path of their pathetic efforts. This blog is supposedly among the top twenty blogs on financial issues, and here is an opportunity to demonstrate that Angry Bear has the ability and interest in addressing the next Federal Budget as well as the fiscal year budget deficit and national debt growth issues.
Perhaps it would help if Angry Bear was willing to undertake main post presentations on the following current CBO presentations, all of which provide considerable public discussions of the impacts of deficit spending and further national debt growth.
Similarly, focusing some attention on budget specifics under consideration involves very little effort. As an example, the U.S. House Committee on Appropriations released the following information this week:
The Angry Bear argument over Social Security’s relationship with the Federal Budget and the General Fund has interestingly, if not conveniently, ignored the following CBO presentation on the subject. It has been available to CBO readers since 2002.
Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective LONG-RANGE FISCAL POLICY BRIEF Published by CBO August 1, 2002 http://www.cbo.gov/doc.cfm?index=3650&type=0
TEXT:
By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget. The separate display, along with the use of trust funds as an accounting device, is a means of distinguishing the program’s finances from those of other government activities. However, the distinction can be confusing when it leads people to think of Social Security as an independent financial entity. Social Security is a federal program, and as such, all of its taxes are received by and its outlays dispensed from the U.S. Treasury.
Focusing on an accumulating balance in the Social Security trust funds can also be misleading. The only economically significant way that the government has a surplus is if there is a unified budget surplus–when total receipts are greater than total outlays. Although separate taxes are collected for Social Security, the money left over after benefits are paid is used to fund other government programs or to pay down the debt held by the public. Moreover, in the future, those separate tax receipts will become insufficient to maintain the program once the post-World War II baby-boom generation begins drawing federal entitlement benefits. Social Security and other entitlement programs will then be dependent on the federal government to cover their costs–at the same time that the government must pay for its many other functions.
Regardless of how any federal program is financed and accounted for–and whether it is presented as on- or off-budget–a full understanding of the government’s looming fiscal strains and the potential economic impact of its fiscal condition requires that all government functions be considered together. It is the federal government’s total claims on the nation’s resources that affect the economy—not the individual components that make up those claims.
The Utility of a Comprehensive Budget Display
The government’s fiscal condition has a significant impact on the economy, and that impact is most effectively summarized by the aggregate flows of money to and from the U.S. Treasury. It is the difference between the government’s total receipts and total spending, including Social Security’s, that determines how much the government needs to borrow from the financial markets or how much it can repay. Social Security benefits alone account for one-fifth of federal spending, and payroll taxes for the program account for one-fourth of federal revenues. Therefore, most economists, credit market participants, and policymakers, when they seek to gauge the government’s role in the economy and its effect on the credit markets, look at the total budget figures, including the figures for Social Security.
Treating some federal programs as off-budget can obscure the government’s total financial picture and its impact on the economy. And fragmentation of the budget can restrict the range of budget choices for policymakers and can complicate the public’s understanding of the government’s long-range fiscal condition.
Social Security as a Separate Display and as Part of the Totals
Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective LONG-RANGE FISCAL POLICY BRIEF Published by CBO August 1, 2002 http://www.cbo.gov/doc.cfm?index=3650&type=0
TEXT: [part 2]
All Federal Income and Expenditures Flow Into and Out of the U.S. Treasury
The concept of federal “trust funds” also contributes to misunderstanding. The conventional view of private trust funds leads many people to believe that the government takes an arms-length approach to the management of federal trust funds–that somehow trust fund money is kept separate from that for the rest of the government. To the contrary, while the accounting for such federal programs is distinct, their cash flow is not segregated.
There are reasons for Social Security to be separately displayed in budget documents: notably its size, the level of taxes it requires, and the program’s significance to the American public. In recent years, some observers have suggested that, with Social Security separate from the budget, the surplus recorded to its trust funds resulted in higher national savings. They argued that the separation protected the surplus from being used to offset other government spending or tax cuts and thereby dedicated the money to retiring the government’s outstanding publicly held debt. That use, in turn, increased the amount of resources available for investment and spurred economic growth.
However, government savings are not determined by the finances of any one federal program regardless of how it is displayed in the budget. Even though Social Security’s surplus funds have been off-budget for nearly two decades, the effect on the net amount of government savings is uncertain. In fact, overall budget deficits characterized most of the period. Even when a clear consensus exists to put surplus federal revenues toward debt reduction–whether they are attributed to Social Security or any other federal program–that posture can be difficult to sustain, as recent experience has shown. Unexpected events, such as a war or recession; new spending priorities; and concerns about tax burdens make it difficult to maintain debt reduction as the government’s highest fiscal priority.
Moreover, having Social Security appear in this fashion, as if it was a separate financial entity, may encourage others to pursue the same treatment for other government functions, particularly those accounted for through trust funds–as shown by recent efforts to take both the Medicare and transportation trust funds off-budget. Such a proliferation of off-budget programs could complicate the public’s understanding of the government’s overall financial condition.
The Shifting Long-Range Context
In the context of long-range fiscal policy, setting Social Security aside from the rest of the budget can obscure the strain that the program may eventually create. Today, the focus of policymakers is on the surplus of Social Security taxes over outlays and how to protect it. That excess of what comes into the Treasury over what goes out, however, is expected to be short-lived as the benefit rolls swell and costs escalate rapidly and permanently with the retirement of the post-World War II baby boomers and the aging of the population. Under the Social Security Board of Trustees’ projections, the excess disappears in 2017 and is replaced by a negative cash flow that is uninterrupted until 2041 (see Figure 1 and Table 1). At that point, the balance of the Social Security trust funds is depleted, causing the program to lose its legal authority to pay full benefits.
BREAKING: House bill unveiled late Friday cuts EPA budget by $3 billion, blocks funding for all current and pending EPA climate regulations for stationary CO2 source Posted onFebruary 11, 2011byAnthony Watts
Finally, some Global Warming common sense. this “Open Thread” may go down as one of the most significant if the level of contributions continue a pace.
CoRev, I’ve been saving this one. Any complaints should be directed at CBO. And it’s posted on an open thread for a reason. None of the standard nonsense about disrupting a main post thread can be played here. CBO did an excellent job of presenting this information.
Let us focus on the single most salient point, divorced from the rest of the CBO article:
By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget.
Period. End of story.
I have no idea who Dave Koitz and Melissa D. Bobb, the authors of this article, are. But this thing, published in 2002, rings very false in the context of the following six years of Bush regime fiscal profligacy. And they are expressing an opinion – an opinion that is negated and refuted by the very first line of their article.
And remeber, Bush wanted to spend his 2nd term political capital privatizing SS. Lovely thought with the S&P 500 – now about 2 years into a rally – 220 points (14%) below its 2007 high. Which was, pretty coincidentally, about the same as the 2000 high. Total gain of the index in 11 years — just about NEGATIVE 14%. Also, stocks went absolutely nowhere for almost 2 decades, from the mid 60’s to the early 80’s.
OTOH, the year end total assets of the Trust fund have grown every year since 1983. Even in 2010, when reciepts declined significantly due to high unemployment, the amount in the fund grew.
These are the points some, esp. you and Co Rev, have been trying to make. Now the coberlys and Webbs have to direct the ad homs and misdirection at the CBO, and that dog ain’t gonna hunt.
Oh, lest I forget, the Tea Party members of the House have convinced the Republican management to follow up with the whole $100B savings in the 2011 budget that they promised during the elections.
And included in those savings is a change to the NASA budget getting them out of the Climate Science business and back into manned space travel. And we haven’t even seen the Obamacare cuts announced yet. The Senate’s in for an interesting ride.
A David Walker speech is always worth listening to with care, for Mr. Walker is a reliable and thorough enumerator of popular deficit-scare themes. Three of these in particular caught my attention on Friday.
To my surprise, Walker began on a disarming note: he acknowledged that the level of our national debt is not actually high. In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt, commonly seen in press reports and in comparisons with other countries. The relevant number is today below where it was in the mid-1950s, and comparable to the early 1990s.
Yep – that’s some crisis. We’re less bad off than we were 55 years ago.
I guess when the sky fell, I must have been to busy to notice.
The Continuing Resolution (H.R. 1) was introduced Friday night. Information about the bill (copy of the legislation, bill summary, list of program cuts, and the subcommittee savings tables) is linked here:
This is part of the Continuing Resolution (H.R. 1) introduced Friday night. Information about the bill (copy of the legislation, bill summary, list of program cuts, and the subcommittee savings tables) is linked here:
smmy, yeah they’re stuck with challenging CBO if such is their intent. OMB and Treasury have raised the same points in other documents. This is straightforward informaiton.
sammy, yeah they’re stuck with challenging CBO if such is their intent. OMB and Treasury have raised the same points in other documents. This is straightforward informaiton.
sammy, yeah they’re stuck with challenging CBO if such is their intent. OMB and Treasury have raised the same points in other documents. This is straightforward information.
JzB, just couldn’t resit calling MG a name. But the most important point is JzB makes the classic mistake for which the article first defined.
As Jazz said: “By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget. “
But why do you think he ignored the remainder of the paragraph? “The separate display, along with the use of trust funds as an accounting device, is a means of distinguishing the program’s finances from those of other government activities. However, the distinction can be confusing when it leads people to think of Social Security as an independent financial entity. Social Security is a federal program, and as such, all of its taxes are received by and its outlays dispensed from the U.S. Treasury.
Focusing on an accumulating balance in the Social Security trust funds can also be misleading. The only economically significant way that the government has a surplus is if there is a unified budget surplus–when total receipts are greater than total outlays.”
JzB displays classic signs of being in denial or serious problems with reading comprehension.
JzB, just couldn’t resist calling MG a name. But the most important point is JzB makes the classic mistake for which the article was trying to dispell.
As Jazz said: “By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget. ”
But why do you think he ignored the remainder of the paragraph? “The separate display, along with the use of trust funds as an accounting device, is a means of distinguishing the program’s finances from those of other government activities. However, the distinction can be confusing when it leads people to think of Social Security as an independent financial entity. Social Security is a federal program, and as such, all of its taxes are received by and its outlays dispensed from the U.S. Treasury.
Focusing on an accumulating balance in the Social Security trust funds can also be misleading. The only economically significant way that the government has a surplus is if there is a unified budget surplus–when total receipts are greater than total outlays.…”
JzB displays classic signs of being in denial or serious problems with reading comprehension.
BTW, Jazz also ignored this little finding buried in the openultimate paragraph: “…And Social Security and Medicare, by their size, are poised to crowd out other government spending and limit the availability of funding for other government functions….” Where have we heard that?????
And CBO concludes: “The future of Social Security and Medicare depends on the capacity of the federal government to cover their costs while paying for its many other functions. Viewing them and other federal programs as separate from the rest of the government’s finances will only obscure the looming fiscal strains.” Where have we seen this point made?
BTW, Jazz also ignored this little finding buried in the penultimate paragraph: “…And Social Security and Medicare, by their size, are poised to crowd out other government spending and limit the availability of funding for other government functions….” Where have we heard that?????
And CBO concludes: “The future of Social Security and Medicare depends on the capacity of the federal government to cover their costs while paying for its many other functions. Viewing them and other federal programs as separate from the rest of the government’s finances will only obscure the looming fiscal strains.” Where have we seen this point made?
Jazz, looks like an article dated 2/11/11 is just the tip of the iceberg of new articles catalyzed by the budget proposals. Finally, we may have a real discussion, although the article you provided is mostly just more deflection. More rant than meat.
JzB, Thanks for your input. I looked at your site, read your brief bio, golly, nice to know that there are others in this country who can see the forest from the trees.
It has been my experience over the many years that I draw upon from my business dealings, to come to the conclusion that when people take issue of others who are unsure of themselves, for what ever reason, they seem to resort to pointing their finger and saying that person has dirty laundry with out either realizing that they too have the same issues, or can’t bring themselves to admit so.
This blog brings together some really interesting thoughts from various quarters, which to my untrained eye, strike me funny bone or leaves me scratching me head wondering, just what universe some might be living in?I suppose that shows I’m biased to a degree, so be it.
I have no problem with spending money to support the men & women of our military, but I do take issue to the wastes that have been generated because the benificiaries seem to think that the Government is their Cherry tree for the picking. As for the people who babble on about the costs of our social programs, while at the same tyme whining about the costs, they conviently omit the benefits that they have derived from living here in this country. As the Revolution in Egypt & Tunisia have shown, at lest so far, this is what’s taking place here too as far as the kleptocracy is concerned. Lets hope that when our turn comes, it too will be a peaceful one.
By the way, I don’t play a musical instrument, but am a Grandfather & Great Grandfather along with being on S.S. & old as dirt too.
Norman said: “ Lets hope that when our turn [revolution] comes, it too will be a peaceful one.” You folks had your “turn” with the elections of 2006 and 2008, and it is being measured.
This is how the presser for the CR starts: “The fiscal year 2011 Continuing Resolution (CR) crafted by the House Appropriations Committee represents the largest reduction in non-security discretionary spending in the history of the nation. This legislation – the first CR in history to contain spending reductions – is a massive down payment on the new Republican majority’s commitment to drastically decrease discretionary funding in order to help our economy thrive and spur job creation….” And in the highlighted comment we find the core of our budget problems.
What happened to the tea party cuts in the really ripe area: militarism?
A whole $100B in discretionary non security……………….
That is a mere 10% of the annual money the war machine wastes.
And hurry up with the real 2011 DoD budget.
The nuclear navy needs a down payment on the new SLBM (multi warhead long range guided missiles, new one for bigger tubes, at that) carrier.
Without overruns and delays a new $100B sub fleet of 12 to match the aging unmatched Ohio Class.
And the Air Force, is buff here today(?) needs some seed money for the next fleet of bombers to replace the B-2, this one will likely be $10B a copy, and be grounded 60% of the time, but still better than B-2.
And the year slip on top of the other 5 or 6 is going to add a billion bucks to the engine P&W would not have had ready anyway.
Where are the cuts to war profiteering and perpetual mutual assured destruction of the US taxpayer by military madmen, and their not so mad profiteers?
Non defense discretionary spending is about 16% of US federal outlays.
Anyone just going there is not serious about deficits, they are serious about retarding the US.
Defense discretionary for paying out half the world’s arms spending is 20% of outlays.
IT should be 6% like the UK or 4% like Germany.
SS spending which is funded by a separate tax and holds $2.4T in US debt is about equal to war rpofiteering and succor is provided to 60 million.
Medicare is about 10% again funded by a separate tax and has a trust fund holding some US debt.
Medicaid paid to states is about 5%.
So, if you worry deficits, the only social program I list here which is paid from general revenues of the US is medicaid, and some of that goes to cover impoverished seniors above medicare.
I have quoted Thomas E Wood before, he refers to Seymour Melman and Ike.
Military spending drains and distorts the civilian economy.By Thomas E. Woods Jr.American Conservative, 1 March 2011http://www.amconmag.com/blog/less-bang-for-the-buck/If you read through Spnney’s stuff over the years he has pointed out the waste and frightfulness of DoD and the complex for years. He referred to them as Versailles on the Potomoc.Good read and necessary to understand that the US is in debt and cannot get up because of the pillaging of the productive economy to build half the worlds military!
If you read through Spnney’s stuff over the years he has pointed out the waste and frightfulness of DoD and the complex for years. He referred to them as ‘Versailles on the Potomoc’. Good read and necessary to understand that the US is in debt and cannot get up because of the pillaging of the productive economy to build half the worlds military!
A few days ago Spinney wrote a piece which I agree and explains what is wrong with the War Machine, and how it spends more and more and the US gets deeper and deeper into a chasm of debt.
Shorter Jazz, continues the deflection: “Any real problem with SS is decades in the future, and can easily be addressed by simply raising or eliminating the ceiling on contributions.”
and this: “No, I didn’t ignore anything. I specifically pointed out that it was refuted and begated (?negated?) by the opening line.” Which is based upon his misunderstanding and obvious confusion over what “off budget” actually means.
The CBO report explains Jazz’zs and many others’ confusion over the term “off budget”: “In summary tables of the budget prepared by the Congressional Budget Office and the Office of Management and Budget, Social Security’s trust fund income and outlays (and the net transactions of the Postal Service) are routinely shown both separately and as part of the total budget. Those various displays, as well as the concepts of “off-budget” and “on-budget,” are often confusing. Few people can understand how Social Security can be off-budget and part of the budget at the same time. To reflect it as off-budget is to suggest that it is an independent financial entity, which it is not.”
Off budget means, therefore, that in the president’s budget they are shown in a separate section, but included as part of the total. “Off budget” does not mean “out of, separate from, nor independent from the budget.
Here is a serious comment on budget deficits, that you will also not accept.
In the history of the U.S., budget deficits have been caused by only three things:
1) Military spending – real wars, and Star Wars 2) Irresponsible tax cuts. (Bush cut taxes while going to war – I don’t think any regime in all of human history had ever engaged in fiscal profligacy at such a grotesque level.) BRUCE BARTLETT said they were irresponsible!! 3) Revenue shortfall, as in the GD, the ’01-’02 recession, and the current Great recession cum jobless recovery.
Notably absent from this list: Social Security Every other social program you can think of.
Caution – this link contains, in addition to FACTS AND DATA, which are always troublesome, text that might be considered name calling, and conclusions that will most certainly be considered deflection. You have been warned.
As an aside, I’ll point out that Mike Kimel has addressed budgets and deficits here before, in some detail. Careful readers might have noticed this.
As another aside I’ll note that someone in the recent SS thread (possibly CoRev, I’m not sure) asked what was the point of resurrecting an article from 2005, but has no reason to raise a similar complaint about one from 2002. Hmmmm.
Link from the left hand column:Why the Defense Meltdown Was Preventable; Defense Death Spiral.
You should read it.The failing “defense acquisition” processes do not exist, but the band aids make it look broken.Every day I can relate failures from newspapers articles and Aviation Week.This lack of “acquisition” process demands resources from the society, and also from within the defense establishment.Failed acquisitions take money away from operations and support budgets, as well as military personnel pay and benefits this rip off is self sustaining.
As the failed acquisitions are “fielded” earlier than the quality of the designs or manufactures would justify (because the DoD is there to keep the industry profitable and more profit is made from producing things than just designing them) they cost too much to maintain (an ilsm is supposed to make sure this don’t happen).The stuff hitting the field is just poor quality.The logistics tail on this new stuff is too big to justify so the unmet demands for support grows with each new delivery.The operating budget of the pentagon with war supplements is over $300B a year.Chuck’s second point is that operating and support budgets already straining are raided to keep the process-less acquisition system running, and increasing it drag on the US.
Chuck’s third point is the DoD non accounting system makes it possible to get away with all the above fraud waste and abuse.
Well, those things were before the Citizens United decision, which effectively gift wrapped our electoral system for the corporate kleptocracy. I believe it was Linda who linked to this article in the SS thread. It’s well worth a read.
Well, guys, I was just sitting here drinking my mediocre Publix coffee thinkin’, Gee! I should go over to Da Bear, and stir things up! Why, I could say something outrageous like, Finally cleared up here and looks like a cold but beautiful day! Or, How bout them Egyptians, huh, guys? Or like as that.
But, I get over here and find a pie fight in progress and without Bruce or Coberly anywhere in sight.
Man, it’s SATURDAY, SATURDAY, SATURDAY! Thrill to CoRev, MG, and sammy teaming up in the tag team fight of the Century VERSUS their determined opponents, Ilsm, jazzbumba, and Norman with Nancy, their fearless Little Old Lady sidekick, all fearless defenders of Social Security! WILL the LIbertarians succeed at last in shutting up the feckless Social Security Crowd???? Or….will they battle to a draw and resolve to battle on till the last Dorito is eaten and the nachos are things of the past??
If you’re looking for some gaming pleasure, just so’s you know, I was a line backer for Green Bay in a past life. All is not what it seems. Mawnin’ y’all! Nancy Ortiz
ILSM, I agree! We need to cut the military budget. I’m not sure if this proposal already includes the Gates’ recommendations, but I am sure that it does not include the F-35 engine. A mistake in my mind.
The F-35 is a bad investment, not needed for any war imaginable. Neither engines are useable; the Pratt engine which is now sole source, nor the GE which needs a lot of development, because F-35 is a dog designed to keep shoddy design houses profitable.
If F-35 were a good investment I would have both the Pratt and GE engines going in the airplane.
I lived through trying to keep F-16s from burning holes in the ground with the sole source Pratt engine and no alternative.
In the early 80’s when the AF complained about the unreliable, unmaintainable, risky SOLE SOURCE Pratt engine the answer was send more money!!!
So, late in the game AF had to get the GE option developed.
There is so limited test time on the F-35 because they cannot get them up that risk demands two engines, for the competition when you find the Pratt engine is legacy failure.
Shorter Jazz, sources, my friend! I refuse to go to a self referencing, self aggrandizing abuser, for confirmation of his personal opinion. And, we are actually trying to compare a CBO report with a dated non-argument? Who has denied the contents of the WaPo article Bruce provided?
Go back to Sammy’s comment, please, for the actual context for the ensuing discussions. In them, no one claimed SS was in trouble, Bruce’s disjointed from reality point. SS is part of political discusssions because the surrounding budget is in trouble. Which is explained in the CBO offering.
The irony is in the refusal to recognize the meaningless of Bruce’s article versus the truthiness of the CBO offering:
Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective LONG-RANGE FISCAL POLICY BRIEF Published by CBO August 1, 2002 http://www.cbo.gov/doc.cfm?index=3650&type=0
NO: “If you’re looking for some gaming pleasure, just so’s you know, I was a line backer for Green Bay in a past life. All is not what it seems. Mawnin’ y’all! Nancy Ortiz” made me laugh out loud!
Just visualizing: “Nancy, their fearless Little Old Lady sidekick…a line backer for Green Bay in a past life.” is precious.
Enjoy the discussion. The clouds of misinformation might clear. But, doubt it.
Cheer up, CoRev, ole buddy. Deal is, once a line backer, always a line backer. But, along the lines of humor a la liberal radical commie pinko sell-out, here’s Paul Krugman on the R’s mandate. http://krugman.blogs.nytimes.com/2011/02/11/dont-cut-you-dont-cut-me/ Truly meant only by way of harmless diversion.
Interesting: ” The clouds of misinformation might clear.”
Especially when MG and sammy look at crystal ball stuff from humbug factoires linked to the monkey cage which parades around as republican politics, as fact.
Predictions are not facts, but they are used to sell snake oil.
In your world, presenting a solution is deflection.
And yes, I meant “negated.” Some moron* put the “N” next to the “B” on my keyboard.
And there is still this niggling little detail.
“By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget.
Plus, SS is self-funded – where have we heard that before? Can you say the same for the Defense Dept?
Here’s an analogy. Bart has a paper route. He doesn’t want to spend his earnings now, but save them for later in life, so he can stop pitching papers some day. His dad, Homer, offers to hold the income in trust. But Homer is a bit careless, and puts the money in the same drawer with his spending cash. It’s in an envelope marked “Bart’s future.” One day Homer gets thirsty and notices that the mad money drawer is empty – except for Bart’s envelope. Homer takes the cash, and slips in an IOU, then goes to Moe’s for a few cold ones. With the passage of time, Bart naively keeps turning the money over to Homer, whose thirst is unqunchable – so the IOU’s build up.
Suddenly one day, Homer has a cup of tea and realizes that he has built up quite a debt to Bart, and doesn’t know how he’ll both pay it back and keep drinking. So he says: “Bart, it is unreasonable of you to expect to get all of your money back. I have a problem with finances, and we must all share the pain. You wanted your money when you were 18. Now you have to wait until you’re 21. And I probably only give you 80 cents on the dollar.
Meanwhile, keep turning over your earnings. I’m thirsty.”
This is how SS is related to the Federal Treasury, and this is how paying SS benefits affects the Federal budget.
Cheers! JzB who no doubt committed another deflection.
Shorter Jazz, I wish: “And yes, I meant “negated.” Some moron* put the “N” next to the “B” on my keyboard. ” those morons would stop randomly changing their location compared to where my own brain says they are supposed to be.
BTW, w2hich part of this explanation: “Off budget means, therefore, that in the president’s budget they are shown in a separate section, but included as part of the total. “Off budget” does not mean “out of, separate from, nor independent from the budget.” do you disagree?
You clearly think that “off budget” is something other than what is reality. So go ahead and define it for us. Oh, and don’t reference your own blog in doing so.
And finally, you say: “In your world, presenting a solution is deflection.” to what problem did you present said solution?
Shorter Jazz, I wish: “And yes, I meant “negated.” Some moron* put the “N” next to the “B” on my keyboard. ” those morons would stop randomly changing their location compared to where my own brain says they are supposed to be.
BTW, to which part of this explanation: “Off budget means, therefore, that in the president’s budget they are shown in a separate section, but included as part of the total. “Off budget” does not mean “out of, separate from, nor independent from the budget.” do you disagree?
You clearly think that “off budget” is something other than what is reality. So go ahead and define it for us. Oh, and don’t reference your own blog in doing so.
And finally, you say: “In your world, presenting a solution is deflection.” to what problem did you present said solution?
a fair proposal. but I am, as you have observed, no expert on “the budget.” I do know that most of what you read about the budget deficit in the mainstream media is lies designed to weaken support for Social Security. but Social Security itself is in good shape and has nothing to do with the deficit. now or in the future.
CoRev: I refuse to go to a self referencing, self aggrandizing abuser, for confirmation of his personal opinion.
Well, if you want to stick you fingers in your ears and go “la-la-la” that’s fine with me. (Yes, that is sarcasm.)
Self-referencing – OK, I guess – but I happen to know where the data is* and how to present it, and that is what I pointed to. That makes it rather convenient, IMHO, and a century of federal budget information is at least marginally relevant to a budget discussion.
My opinions are based on a careful consideration of that data. If you refuse to look at it, then we won’t have much basis for discussion.
If you consider a presentation of real data and logical conclusions derived from that data to be self agrandizing, then more power to you.
But I have NEVER been called an abuser before. I believe this is some kind of promotion.
What Sammy said was: However, the rest of the Federal Budget is less financially sound than ever.
And the Galbraith piece I linked demonstrated that this is absolutley untrue. But in your world that was a deflective rant with no meat. La-la-la.
Cheers! JzB
* Here is my data source, in case you would like to indulge in your own self-referential self agrandizement. I made graphs. What would you do?
In all seriousness, I don’t believe either Reagan or Goldwater would find a place in the modern Republican party. Orrin Hatch is going to get a primary challenge from the right.
The Pauls are, IMHO insane. Ryan is simply an inprincipled liar.
this is misleading. The “budget” for social security comes from a dedicated “tax” (actually “Federal Insurance Contributions”). conflating that with general revenue, as this article does, is dishonest or stupid. Social Security is workers paying for their own retirement/insurance. They can continue to do so under all foreseeable circumstances with no effect on the budget whatsoever. And it is dishonest to claim that as “federal spending” it affects “the economy.” It is the money the workers would have to save, and later spend, on their own retirement in any case. All Social Security does is provide them a secure way to save it.
I am afraid you display your gullibility. Read the lines you cite carefully. They are weasel words designed to confuse you. the taxes may be received, and the outlays may come out of… the treasury,,, but that is like saying the teller at the bank collects your money, and gives it back to you when you ask for it. The money is still dedicated to a particular account, and must be repaid to that account. Just because we have only one federal government does not mean the government can ignore the legal distinction between Social Security revenues and general revenues.
Good list of 3, Jazzbumpa. It doesn’t take a rocket scientist to move between the unified budget and a budget in which SS is separated, but those who badly want a unified budget perspective ought to apply the same perspective to the revenue side of the budget. Isn’t that fair? This is seldom done in part because, unlike the spending side, it is made somewhat difficult. I don’t see the revenue side raised on AB by people talking about the importance of thinking of SS as part of the larger budget.
From a unified budget perspective on the revenue side, in which individual tax rates include FICA, we currently have a nonsensical system that ought to be defended by anyone taking that perspective. The system is progressive for the middle class and regressive for wealthier people. The tax the first dollar of earned income is about 15 percent and, after a low AGI threshold, it is 25 percent. For most Americans the MTR is about 30 percent. Over $70K (married couple AGI), it’s over 40 percent but, for pay above an individual wage cap of $106K, it drops to 33-35 percent. Dividends and capital gains taxes are much lower (15 percent) and most of that money is received by wealthy people.
Especially when so much of US income is going to top earners (at historically high levels), taxes (as a percent of GDP) are at historically low levels, and deficits are at historically high levels, shouldn’t the revenue side be on the top of anyone’s list–even before “painful” budget cuts–from a unified budget perspective? Shouldn’t the wealthy be paying a higher percentage, instead of a lower percentage, than the family making maybe $100K plus-or-minus? What would that do to our (unified) budget deficits and revenue shortfalls?
I’ll go further. The article, CBO or not, is thoroughly dishonest. An attempt to pretend that Social Security is just another part of the budget. It is not. CBO went to a lot of trouble to show that Social Security can pay for itself with a payroll tax increase of one half of one tenth of one percent each year… that forty cents per week for a worker today. They would not have gone to this trouble if SS was just another line item.
There is a whole legal structure and 75 years of history that this article is attempting to convince you isn’t there.
sorry, but this report, CBO or not, is carefully crafted to mislead you. and it succeeded.
SS is “off budget” because it has an entirely separate, dedicated, revenue source: the people paying their Federal Insurance Contribution.. on the promise that the money will be protected from inflation and market losses and paid back to them in their time of need.
Claiming that it’s just another tax and the government can do what it wants with the money is a lie. Even if the liar works for CBO.
DAle, repeating the misinformation: “ but Social Security itself is in good shape and has nothing to do with the deficit. now or in the future.” never makes it correct.
and your continuing to lie about it doesn’t help anyone except the bastards who want to steal it.
read the goddamn trustees report. SS can pay all promised benefits with no changes whatsoever for another twenty plus years. how old will you be then? what else will happen before then?
read the goddamn CBO report: SS can pay all promised benefits for the next 75 years with a payroll tax increase of one half on one tenth of one percent per year… about forty cents per week in today’s money.
read the goddamn trustees report again: SS can pay a benefit greater in real value than today’s for the next seventy five years with no changes whatsoever.
find some way to recognize the obvious: SS is legally distinct from “the budget”, has always paid for itself, has no way to “borrow” from anyone and so cannot create a “deficit”.
note that SS has paid benefits for 70 years that are always greater than the people paid in.. due to the growing economy and the pay as you go with wage indexing feature.
so stop babblling dishonest garbage.
the people who have paid their social security “taxes” have done so on the promise they would get social security benefits. there is no reason they shouldn’t get them, on time. it is their money that paid for them. it has nothing to do with the deficit, not one goddamn dime.
“off budget” means legally separated from the general budget. dedicated to Social Security, collected in the name of Social Security, and legally required to be paid only to Social Security.
PJR, I’m going to bypass most of your data to address the point I think you are making: “and deficits are at historically high levels, shouldn’t the revenue side be on the top of anyone’s list–even before “painful” budget cuts–from a unified budget perspective?”
Perhaps in a normal world of federal expenditures, but we have seen a ~26% increase of Fed spending to GDP since Obama took over. With a projection of it reaching 90% by 2020. Do you really believe that all of the 35%+ increase since 2006 was absolutely, positively, no BS necessarily sacrosanct?
well, somewhere up or down thread CoRev makes his case: in the event the United States goes broke it will have to stop paying Social Security.
But the United States of America is not going to go broke, unless his friends manage to exempt themselves from paying any taxes… it would hurt the economy, you know… and decide that poor people’s life savings have to be confiscated to fund the army and the navy.
But even this is not true: If there is any government at all, capable of opening an office downtown, and keeping the mongol hordes at bay, Social Security could continue to pay for itself, as it always has,.
All that is necessary is the people recognize that one day they are not going to be able to work any more, but aren’t ready to die. They will need to save some money so they can eat when they stop working. It turns out the safest way for them to save money is to form a cooperative: everyone contributes a small part of his income while he is working. this money is used to pay back the people who previously contributed part of their income and now need to get it back to pay for groceries. Then when the new generation gets old, they will get their money back from the next generation.
This is the same system that humans have used for a million years. The only difference is that under today’s conditions the individual family has no way to protect itself from very big forces. So that “cooperative” the people form… sometimes called a government… has to be big enough to weather every storm. The United States of America is big enough. Unless we let lying weasels like CoRev convince us that we should just let the lying bastards klll Social Security… because, after all, it was never real to begin with. seventy years was just an illusion. and after a few years of tEa party rule, the history books will show that.
jeff–Shhhhhh! The first rule of past lives is that we can never identify ourselves! Besides, I used to be a real nice guy off the field. You can ask Bart Starr! Shucks. Now, I’m a little old lady in South West Georgia. I gotta wonder where I went wrong. 😎 NO
Didn’t say that, CoRev. But to balance the budget at 20 percent of gdp (which would be even lower than Simpson-Bowles recommended), you need to cut spending as a percent of GDP by about 20 percent and raise taxes as a percent of GDP by over 33 percent, from current levels (about 25 and 15 percent, respectively). I am suggesting that we not focus on the smaller problem.
Didn’t say that, CoRev. But to balance the budget at 20 percent of gdp (which would be even lower than Simpson-Bowles recommended), you need to cut spending as a percent of GDP by about 20 percent and raise taxes as a percent of GDP by over 33 percent, from current levels (about 25 and 15 percent, respectively). I am suggesting that we not focus on the smaller problem.
Oh, and on that subject, props to Coberly and Bruce for consistently telling us to address the revenue side, by raising revenue collection on wage-earners (SS taxes, on earnings up to the wage limit). THEY are addressing the revenue side.
Gee coberly, do you have to be so harsh on poor old CoRev? (at least I think he’s old? over 60?) He likes to make fun of others, but sure takes offense when it’s his turn on the spit.I had gone away for a nap, came back for more of the interesting takes of this beautiful day out here in the land of sunshine.
I do have one thought that keeps rolling around in my thoughts: “what would all these kleptocracy elits do if one day they awoke to find that their wealth was no more”? Taking it another step, “what would they do if the infrastructure were to collapse while they slept in their McMansions”? A third question; “with the treatment of the I believe 2 million plus members of the military who fought the Bush now “O” wars, that are floating around as just so much used product because the business people are afraid to employ them, for what ever reason, I wouldn’t be so sure that they could be counted upon to be back up for the kleptocracy elits”!
I would also lump into the equation, all those middle class people, both unemployed & just hanging on, who I might add are victims also of the kleptocracy, add up to quite a large cross section of the population.
How long has this kleptocracy been going on here in the U.S.A.? Well, I guess that would depend on who is asked the question. Again, I say: I hope the revolution in this country is peaceful, and to CoRev, your reference to the 2006 & 2008 elections is only in your dreams if you think they were a revolution. You are drinking your own koolaid, my friend!
the article is flawed. it conflates “entitlements” with the debt. Social Security is not part of the debt. Never has been. Never will be. Legally never CAN be. unles they change the law, as with the recent payroll tax “holiday”, a political knife in the dark.
Medicare could add to the debt, but really shouldn’t. It’s just people paying for their own expected health care. If they want the health care,they should pay for it. It only adds to the debt, if we try to have it and not pay for it.
The causes of the debt have been military spending and tax cuts, and the recent flawed “stimulus,” required because of banker malfeasance.
I’m afraid this is just another one of the many many articles that use “the debt” as a stalking horse for cutting Social Security while preserving tax cuts for the rich and the programs they like.
The cost of paying for Social Security would be the equivalent of forty cents per week per year for the average worker. topping out at 2% of wages for the worker, matched by the employer in 2070 or so, long after the last worker now paying for SS has retired. We may be fairly sure that if workers are living long and healthier lives in the brave new world of the next century they will be able to make their own adjustments to SS. the current frenzy to “fix” SS is dishonest.
I guess I would like to know: what part of a $1.5T Federal deficit do you not understand?*
In 2011, Federal Tax Revenues = $2.2T, expenditures = $3.7T. So we are spending $1.60 for every $1.00 we take in.
We have two choices:
1) Raise taxes 60%. This would imply Federal marginal tax rates for individuals and corporations approaching 65%. If you add on state (10%) and FICA (10%) then you have marginal tax rates at 85%.
-OR-
2) Cut spending 60%. Since Social Security = 20% of expenditures, if you are to exempt Social Security completely, as well as interest payments on the debt, you are left with just 70% of the budget to work with, implying that all other federal programs would have to be cut 90%.
Why should Social Security be the only spending left untouched? Is Bill Gates getting his Social Security check a better use of our money than AFDC or food stamps or Medicaid/Medicare?
*coberly, please don’t respond with your 3% tax hike as a solution.
the essential nature of the keptocrats is they believe they are smarter than us. they “win” and we are “losers.” they believe luck has no role in their winning… or that they will always be lucky.
there is some phylogenetic excuse for this. for most animals most of the time it pays to grab the other guys bone, now. if you can get away with it. there is no telling what tomorrow will bring, so do what you have to to end up on top today.
now as it turns out humans evolved from this to be able to cooperate with each other and have made great strides because of that cooperation.
but, perhaps only since the industrial revolution, it has been possible for a few to “succeed” by cheating. that is not necessarily the real cheating that could get you arrested, or killed, but by taking advantage of the labor and kindness of others to build wealth and then claiming you did it all yourself, and anyway “enlightened selfishness” is the Darwinian way to assure survival of the fittest,
anyone who knows anything, knows this is self delusion, but the nature of self delusion is that it deludes yourself.
but it is up to us who still understand the fundamentally cooperative nature of the human enterprise to resist these … well, i was going to call them criminals, but when they make the laws they are not criminals by definition.
but here’s the funny thing… we may actually need some of that criminal spirit in society. the trick is to control it. not let it make the rules. or worse, tell us what to think.
I would encourage Libertarians and those influenced by them to consider one principle of the Founders ignored in their current leaders’ speeches. That is the principle that the United States would maintain no standing army nor would it quarter it in the houses of its citizens. I suggest that what we have now is the modern equivalent of an army whose troops are eating us out of house and home. Anything not taken from us by manipulations of the stock and financial markets is extracted from us by the insatiable appetite of the MIC.
In comparison, whatever else is arguably wrong with SS, it is undeniably good in its effects on retired/etc. individuals and our domestic economy as a whole. I will assume here that the object of proposals to “reform” SS is to abolish it. I think this because it provides, at best, modest benefits to replace lost income in its current form. So, any reduction in the benefits it provides would have the effect of making SS valueless as a base for secure retirement income, thus eroding its political support and causing its eventual abolition.
So, what do “reform” supporters suggest to replace SS in terms of regular and reliable monthly infusions of money into the domestic economy? SS has been there every month for 75 years, good times and bad. Since it is adjusted for inflation, it more or less keeps pace with the current cost of living. I have heard nothing from SS’s detractors to suggest that they advocate abolishing our standing army. Why, therefore, is SS so odious when it stabilizes the cash float in our domestic economy instead of merely transferring general revenues to the MIC? Jus’ asking. Nancy Ortiz
you have said this all before. and the answer is still raise the Social Security tax one half of one tenth of one percent… that forty cents per week… per year. Then to take care of the deficit that has nothing to do with Social Security raise the income tax 3% until the debt reaches a sustainable level
i’m sorry you don’t understand arithmetic. but it works. of course the 2011 rate of deficit spending cannot continue.
there would be no reason to cut Social Security since Social Security pays for itself. You’ll have to trust me that Bill Gate’s Social Security check is not going to solve the problem..
Ok, sammy. Why shouldn’t our general revenues more closely match our federal expenditures? So, if SS needs a 3% boost, we should pay it. No biggee. It beats the hell out of the alternative which is more people starving on the street than are already doing so. And, there are lots, sammy. Thousands upon thousands of people who’s only crime is being unemployed and not being able to pay rent.
And, answer my question. Why are millions of starving old people preferrable to reducing military spending? If no government is the only acceptable government, hang around and watch what happens when you get your way.
if the economy returns to normal, and the Congress does not increase spending, the 2011 deficit could be paid for in four years with no tax increase at all. sorry. math.
just to clarify SS won’t need a 3% tax increase, except over the next 60 years, and I am sure Sammy will never have to pay that much.
during that time wages are expected to increase over 60% in real dollars. you’d think even sammy could understand that if people are going to have a lot more money and live a lot longer they might want to spend some of that lot more money on retirement. i can remember when that was the main point of making more money than you spend… to be able to retire while young enough to enjoy it. Now that it’s possible, the bastards are trying to take it away from you… because they can make more money for themselves by keeping you at work.
Sammy, you banter the 1.5 T figure, yet you don’t address why? I presume you work at some endeavour to feed yourself & those you love, so, what would be the result if your income was in the neighborhood of say $1600.00 a month? Would you survive quite nicely? Do you consider the amount excessive? Too little? What do you consider a proper amount?
if that’s all you meant, you shoudda said it in the first place. for the record. the 2011 defict rate cannot continue. even coberly admits that.
of course it still has nothing to do with Social Securty, which pays for itself. just ask the people who pay their Federal Insurance Contribution “tax” what they think about the government using the money for something else.
Why are millions of starving old people preferrable to reducing military spending?
It’s not. Rich old people getting SS checks is not preferable to starving children either. That’s the thing, we have to make choices. Go ahead and make up your plan that leaves SS untouched. Make the cuts or tax increases where you think they should be. I challenged Bruce and coberly to do this, but they refuse to deal with “liars.” I thought you took up the challenge. I promise, and I’m sure CoRev would agee, to give it fair look.
I can survive on less than that, but my family is grown, my house is paid for, and i drive an old, reliable car. and i don’t have any expensive habits.
on the other hand, those folks who paid for their Social Security have a right to collect it. They can live on it if they have to. Or use it to supplement other income, if they have it, to live a little larger.
For what it’s worth, I can live on my SS, but unlike Sammy who wants to work for his boss until he is completely senile, I was glad to quit working for the boss, and now I work for myself. That is one of the joys of retirement that the lying bastards don’t want you to think about. Of course having a reliable income from SS allows me to take some chances with free enterprise that i otherwise could not afford to risk.
NO said: “Ok, sammy. Why shouldn’t our general revenues more closely match our federal expenditures?” Good question? Many believe they should. So let’s not raise the debt ceiling. Instant fix. Next.
Then you go off and make some comment about raising SS. Sammy, and I know I, agree. Instant fix. Next.
Finally, you ask: “And, answer my question. Why are millions of starving old people preferrable to reducing military spending?” Sammy had said: “…you are left with just 70% of the budget to work with, implying that all other federal programs would have to be cut 90%.” I assume you would accept a 90% cut in DOD? Oh, and every other program, with the exception of SS?
Lessee, that’s a 90% cut for food stamps, medicare, medicaid, EPA, DOE, DOI, Agr., NIH, etc. (the list is too long to include every program). But SS will remain untouched.
Those are your goals, and we solved them didn’t we? Good job! (Just spent the PM with grandson :-))
Dude–Been there and witnessed the amazin’ sight of one person in an elevator because only one would fit. Oh, yeah. And, who can forget the yellow tape line in the middle of the hall floors of the old OPs building. Without it, half the people working there (I among them) couldn’t find their way out of the building. Oh, yes. Woodlawn. Dear to my heart.
I was working, CoRev. Don’t know what they was doin’ because they didn’t even have sign-in sheets. And, I don’t call going to meetings work! I am a Field Office person. Our motto, We get the right check to the right person at the right time, every time. CO’s motto is, “Whatever.” /snark/ Been there, CoRev? It’s ok if it’s the best you can do. NancyO
PJR, I’m not sure of what you are saying here: “But to balance the budget at 20 percent of gdp (which would be even lower than Simpson-Bowles recommended),…” do you actually mean limit the budget to 20% GDP?
You also say: “you need to cut spending as a percent of GDP by about 20 percent…” FY2010 spending just north of 60% GDP. Are you proposing cutting spending to ~48% relative to GDP or do you mean subtract 20% from ~60% to get to just north of 40% relative to GDP?
I have a similar question re: your tax comment. I’m not sure where you got your “by over 33 percent, from current levels (about 25 and 15 percent, respectively).” What I have found is 2009/2010 tax revenue are running ~15% ralative to GDP.
Moreover I’m not comfortable when comparing tax revenues to GDP. Tax revenues are part of the Fed spending which is also part of the GDP calculation. Unless we are clear in our use there could be double counting of revenues, but GDP also includes the spending from borrowing. just trying to say this kind of comparison can be confusin/ed.
Oh, Norman. Don’t bother expecting sammy to know the durn day of the week. I guess you and me and Coberly have our animals and a simple “I paid for my retirement check, it’s mine, don’t mess with it” mentality. Saw a Brown Thrasher today for the first time in more than a month. And, a red wing black bird today showing his red epaulettes to three admiring lady black birds. He didn’t push it, just flashed ’em a little. Mess of Eastern towhees and a pine warbler. Now, that’s beautiful. Good thing to think about at the end of the day. NancyO
Norman said: “Sammy, you banter the 1.5 T figure, yet you don’t address why?” It’s the CBO estimated deficit for 2011. We are expected to spend $1.5T more than we get in revenues. So to answer why? We’re spending too much, and/or not raising enough revenue, consequently we are borrowing too much.
CoRev, at the risk of sounding like a . . . . . . what ever you may put a label upon, how much revenue do you think is lost due to the continuing Bush tax cuts, also the reduction of FICA? Then, what about the pallet losds of crisp new $100.00 bills shipped to the war effort? Now, as a good American patriot, you are a veteran ofthese fine military services of the U.S.A. too I take it, can you sit here and preach to others when your country is falling apart? You know as well as I and every other person who has been around the block a few tymes, I take it you have been, that the present diletantes masquerding as politicians havent any intention of fixing anything in Washington, so why do you keep pointing to old people as being the sacrificial lambs instead of the real culprits?
you are suffering memory lapses and make stuff up. there are no rich old people getting SS checks except the ones they paid for. you simply don’t know anything about SS except the fantasies you spin after the man in the nice suit tells you fairy tales. SS is not welfare. it is an insurance program. what makes it insurance and not “just” insured savings is that you are insured even against failing to thrive… failing to make enough money over a lifetime to be able to save enough for even a minimal retirement. the “insurance payment” makes up the difference between what you save and something closer to what you need. where the extra money comes from is that those rich people… who didn’t know they’d be rich so they bought the insurance too… don’t get quite as much effective interest on their savings (or premium or tax or whatever you want to call it. it is what it is.)
your idea of SS would be like people who don’t have a fire get to have their insurance refunded. or maybe you don’t pay them if they do have a fire because they can afford to fix the damage themselves. your thinking is completely screwy. i suspect you aren’t as dumb in real life. it’s only when certain people start thinking about government spending that they get stupid.
the “tax increases” that coberly proposed were “one tenth of one percent increase in SS whenever the Trustees report short term actuarial insolvency. and a 3% rise in income taxes across the board until the deficit is paid down to a sustainable level. you can’t have it both ways Sammy. you can’t say i “refused to deal” and on the same page tell me not to repeat my 3% tax increase. well, you can, but only if you have a screw loose.
i don’t think i have called you a liar. that’s co rev who has learned the trick. but he’s a pretty small liar. the big liars are famous people whose names you would recognize.
we don’t have to make any choices between old people and starving children. the old people save for their own retirement via Social Security. and lots of them use their benefit checks to help out children. again, you are talking about a world that does not exist except in your imagination.
Norman, let me start with your major misconceptions: “… so why do you keep pointing to old people as being the sacrificial lambs instead of the real culprits?” Where do you get off making such an absurd statement?
$1600.00 a month? ……Do you consider the amount excessive? Too little? What do you consider a proper amount?
I consider $1600 per month to be a subsistance level income. No, I don’t think it should be cut. This is what you get when you choose, or are forced, to depend on the government for your retirement, which is why I would prefer to control my money myself. I may be in the same boat as you in 10-15 years from now in retirement if things don’t work out, but it’s better than having no Social Security system.
Please don’t be alarmed that someone is going to cut your Social Security. Same with you, coberly and NO. The first politiican that proposes that a majority of current retirees will be cut will find out that that ol third rail still has a bit of juice in it. Although you might want to worry about the “Non-Partisan Blue Ribbon Commision” approach.
What probably should and will happen is that maybe the top X% of recipients by income and assets will lose or have capped their payouts (means test), and future generations will be on a much lower payout schedule. The Special Treasuries will be nullified. But you, Coberly, NO probably won’t lose a dime. sammy, on the tail end of the baby boom, will probably not fare so well as you all, social security wise. I will have paid several hundred thousand into the system that I won’t recieve as benefits. But at this point, a subsistance level income would be better than no Social Security.
“I paid for my retirement check, it’s mine, don’t mess with it”
This is not accurate. The way Social Security was designed is that you paid for someone else’s retirement, and then someone else pays for yours. Unfortunately, with the ever growing demands on government funds, what should have been taken for granted has now become a political struggle. Sorry.
CoRev, yes, I was saying a budget that is 20 percent of the GDP (meaning budget/GDP = .20). Both in revenues and spending = “balanced.” I chose 20 percent as a reasonable as well as round number, although I agree with Simpson/Bowles that it will have to be more than that in the future (imho probably much more).
As for the other numbers, this is elementary arithmetic. Going from 15 percent of GDP (revenues) to 20 percent requires you to increase the percentage by one-third (add 5 percent to the 15 percent). Going from 25 percent of GDP (spending) to 20 percent requires you to decrease the percentage by one-fifth (subtract 5 percent from the 25 percent). Got it? If you want to balance the budget at a higher level, increases taxes more and cut less–maybe you want to balance it at 25 percent of GDP, in which case just increase revenues as a percent of GDP by two-thirds (add 10 percent to the 15 percent).
Just to underscore my point (that the revenue side should be the focus): over the coming years, as GDP increases, the tougher policy challenge is to grow revenues significantly faster than GDP growth; the smaller challenge is to restrict spending growth to less than GDP growth. The smaller challenge isn’t small, just smaller.
Gut gesehen, CoRev. I hope your grandson is well. Now, to return to my point. If we had no government of any kind, you’d still have to pay taxes. When Matthew, the New Testament’s tax collector or his modern equivalent , came to your door to take everything you had so that he could make a nice profit as the Roman or maybe Halliburton’s Proconsul for Taxation where you live, you may could understand why a little restraint in stinginess could make sense. However, I am now listening to the Queen of the Night’s Aria from Der Zauberflote. It’s enough for one day. Guten abend. NancyO
Ah, I took my leave for a few hours folks, but here we are again, of course, there is a lag on my part, so, To: CoRev, SHEESH to you, you should be more to the point, without your always pointing out how everyone is wrong except you. As for misconceptions, you are the one with the misconceptions, or maybe in denial would be a better term. You seem to say that anyone who doesn’t agree with your take on a subject, is left wing, out of their tree, hasn’t a grip on reality, the usual banter that indeed comes from people who really don’t have both legs on the ground. Try addressing the real issues here, not the talking points that the Petersons, the Commissions, the so called pundits of doom talk about all the time. You sometimes write as if your a troll. Perhaps you are. But you like to make others out in ways that shows that you are the one who is misinformed. Get real, why is this country falling apart? Who has held the power reigns during this debackle? Who are the ones today that want to return to yesteryear? The fools, yes, they are fools, trying to make points with the puppet masters, when in reality they are only names in someones black book, that which are the real sacrificial lambs the power holders give up. Face it CoRev, even you are in someones book, just waiting to be given up on the alter so that holder can say he gave at the office. You are playing the game, whether you know it or not. Time to check your ego, for one day soon, you will wake up out in the cold and hopefully for your own sake, you wont freeze.
To Sammy, You still don’t get it. You consider $1600.00 per month subsistance, yet there are those that don’t even receive that. They either get another sub to make up for some of the difference, ore go without. As you note, in 10 – 15 years, you might be in the same boat. Well, wake up & smell the coffee young man, for if the Kleptocracy elites have their way, you will be in that boat. Your buying their B.S. today when you agree with their prognosis. Either you are not seeing what is taking place around you in this country, or your drinking the koolaid they are serving you. Open your eyes, because it’s people like you that they are counting on. If you were in the over $1,000,000.00 + per year take home, you’d still be on the botton of the ladder. But don’t take my word, just remember that if they get their way, you’ll be lucky to even have that subsistence sum to live on.
PJR, thanks! That clarified your thinking. I disagree That raising revenue (especially taxes) is the easier political path. We’ve raised spending by ~35% since 2006, and the constituencies are not yet deeply entrenched for that spending. There is more political will to cut, than raise taxes, even though a combination of both are needed if we are to balance the budget.
Furthermore, much of that recent spending has been associated with economic stimulus, and meant to be temporary, but as we know, once spending is increased it is difficult to cut it back, but it is less difficult than increasing revenue via taxes. The latest example is the Bush tax cuts. A combination of both (cutting spending/raising revenue) are needed if we are to balance the budget. I believe there is more political will and therefore ability to cut spending is the smaller challenge versus raising revenue via taxes.
Finally, this statement does make sense: “…over the coming years, as GDP increases, the tougher policy challenge is to grow revenues significantly faster than GDP growth;…” with a balanced budget as a ratio relative to GDP. What you have done is unbalanced the budget to the revenue side. If you are proposing that we spend that increased revenue for redeeming treasuries, then I agree completeley. If not all we are doing is perpetuating the over spending that has gotten us to this point.
Tomorrow will start of one of the more interesting specticals in DC, the Budget Debates. As MG pointed out in the beginning of this thread there is much info to peruse and hopefully understand.
Watching this AM’s talk shows will start in earnest, the demagoguery. There has seldom seen such two differing view points on implementing the budget. Even though the president is more aligned with the House views, his budget will raise hackles on both ends of the political spectrum.
when you put money in a bank the bank gives it to someone else. when you take “your” money out of the bank, the bank gets it from someone else. SS works the same way.
money cannot be put in a drawer with your name on it and given back to you with your very own fingerprints still on it.
you see, it works like this: you belong to a “cooperative” called the Social Security system in which you save your money by putting it in a bank called the Social Security Trust Fund. That Trust Fund uses your money to “make money” by the clever trick of using it to suppport a business that pays people’s retirement benefits so that other people will bring in their money in expectation of getting the same deal… which is a very good deal. better than you can get anywhere else.
by using the pay as you go with wage indexing system, you are assured of getting “your money” back in dollars that reflect the change in the value of money (inflation) and the increase in the standard of living. this is not called “interest,” but it is effectively the same thing.
and none of this has anything to do with “government funds.” Sorry that you can’t understand it.
no. they won’t cut “current” recipients. they are not that dumb. l they will cut “future” recipients, because “the young” are that dumb.
you will get back everything you put in SS… if they don’t change the law… plus enough “effective interest” to pay for inflation and average growth in the economy. about 5% effective rate. You can get better from playing the stock market, but not, i think, from bonds… not bonds that you keep, anyway, maybe bonds that you trade. the big difference that SS is “secure” you can’t lose it to inflation or a bad market. you can only lose it to bad politicians who can fool people like you.
maybe you are smart enough to “control your money yourself,” but most people are not. and it would be bad for you as well as the reset of us if they reach their sixties and can’t afford to retire.
for them SS is essential. for you, all you have “lost” is what you “might have made” if your luck held. which it wouldn’t if half the old people in america were homeless and starving.
if you are smart enough to make money on the markets, you can make money without using your social security insurance,
means testing is ugly and expensive. you won’t like it. either as an applicant, or as the guy who pays the taxes to support it.
the “rich” people you think are collecting SS are not enough to save the system any money. AND they have paid for their benefits.
what you don’t understand is that with SS even the poor people pay for their own benefits.. or at least most of them. with a means tested system, people would not be paying for their own benefits, and unless you want to step over their bodies, and don’t need them as customers, you would end up paying for ALL their benefits.
Actually CoRev, we do not disagree on what is easier or harder. I agree that raising taxes is the bigger challenge, not only arithmetically but also politically. Nobody wants to try. It’s relatively easier politically to cut spending as a percent of GDP by one-fifth as GDP rises–some spending cuts, spending freezes, and/or limits on annual spending growth. It’s going to be more difficult politically to raise taxes as a percent of GDP by one-third as GDP rises. Some angry bears here boldly propose raising FICA tax rates. Good start indeed, but a small one for anybody seriously taking a unified budget perspective. For them it should be about the revenue streams that are supposed to fund the remainder of the budget, to include paying debts as required, defense, medicare, medicaid, yada yada yada.
Re the stimulus, I agree, some of that spending will disappear, but remember that much of the stimulus has been in the form of supposedly temporary tax cuts (extending Bush’s cuts and adding Obama’s cuts). Easy prediction: future fights over extending those tax cuts.
CBO and CRS are humbug factories. GAO is nealry a humbug accounting office/agency, so the A needs changed.
I read every GAO report on the horrors of DoD acquisition and soft soaping is the only description of their review for an unaccountable waste factory.
You need to give some support to the hypothesis that CBO does decent research and support their crystal ball supporting Boehners claim the US is broke……………….
US might be broke but SS trust fund has $2.4T in US notes whicvh Boehner wants to welch on so he can keep military madness pillaging the US.
It ain’t fund the army and the navy it is finance an insane militarism for paying war profiteers.
See the replacement for the Ohio class sub, it will eat about $10B a year on average for the next 30 or so while the “enemy” Russian whole war budget runs about 40B…………
The US militarists have plundered the economy, borrowed money for junk weapons money which should have been used for producing things humans need.
The pillaging of the US is why the liars in Bohener’s party want to welch on SS.
It will always be empire, war profiteers and militarism at the expense of humanity.
We have always been at war with someone but the casualties are you and me.
Granma gets cat food so Adm Roughhead can get a dozen new Boomers with 87″ tubes, meaning a new generation of Tridents too.
Gizzard, and you think we can not run out of money? What happens if/when those buying our treasuries stop, or bid them so low to make them too costly for us? What happens with the interest paid if/when either or both happens? Printing presses aren’t going to help except to cause the inevitable hyper-inflation.
I’m just not willing to risk that if/when scenario. Too many are now saying it could happen in the very near future without getting our budget/deficit under control.
When the budget arrives it will propose spending 20% of the total for militarism, roughly the same for social security, the military planned outlays being twice the planned outlays for medicare.
The country is going broke because SS is not providing cash for the war machine.
SS will need to cash a few tens of billions of its special treasuries, while the war machine is fueling borrowing to the tune of $850B.
So, SS is borke………………………………
You can all the people some of the time, the rest requires Rupert Murdoch.
Boehner was interviewed on either CNN or MSNBC I was flipping around, this AM I was in a hotel drinking coffee when he said those exact words. Coffee did not spew around the room, fortunately.
Pure unmitigated disinformation, from the speaker of the house.
I am finding more positive proof that a republican must be a liar to get to vote in the capitol building.
The US is broke because SS and medicare are cashing a few billion in special treasuries rather than cashing out the empire.
Not a word from anyone about trouble outside of SS and Medi’s!!!
I just did a somewhat thorough (and thoroughly abusive) analysis of the bull shit in the 2002 CBO article. It’s on my blog, with an invitation for comments.
ILSM, I found it. As I said, let the party begin. His repsonse was juxtaposed with Obama’s Budget Dir’s comment of cutting the deficit in 1/2 by 2012 in a budget targeted to cut the deficit by $1.1T in 10 years. Some math doesn’t add up. One hyperbolic comment trumping the other. Gonna be fun to watch!
Let’s not forget that deficit/GDP is higher because GDP is lower. GDP growth wss negative for the greatest part of 2 years,a dnis still far below the previous trend line. There’s always this damned problem with ratios . . .
And always more of my self-refering, self-agranzing abuse.
Are we past the Shorter name calling now? Sorry, I don’t remember the source. Should have provided it in my comment.
When I click on the graphs they expand. Does yours? Also, won’t your browser expand text with the Ctl+ key combo?
Here’s what I found from ths source message on the bottome of the graphs: “Source OMB ….WWW.whitehouse.gov/omb/budget/Historicals (April 27, 2010)… Histoirical Tables Table 1.1…
Dunno if that gets the charts, but it’s about the best I can do.
That’s the thing, we have to make choices. Go ahead and make up your plan that leaves SS untouched. Make the cuts or tax increases where you think they should be.
Cut – Military. Without examining it in detail, I don’t have a detailed proposal or an amount. But we spend more than the next whatever conties on the loist combined, much of it goes to wastful program the military does not want or need. Are we still employing mercinaries in foreign lands at at least 3x what it coss to have the military do the job? Stop that stuff. Stop being the world’s policeman. This is worth multi-trillions.
Taxes – take the ceiling off FICA. Raise income taxes at least back to Reagan levels, but with steep progressivilty. Reagan had the top rate kick in at a little over $30K. That’s insane. Clinton corrected that, at least – and balanced the budget. Hmmmmm. Between FICA, and income tax, we are very close to a flat tax situation in this country.
To have any kind of a shot at equal opportunity, a society needs progressive taxation. If you dobt that, just take a look at what has happened here over thlast 30 years.
The Bush tax cuts were ruinous, and I think deliberately so. B. Hoover Obama has only made it worse.
Contra this I challenged Bruce and coberly to do this, but they refuse to deal with “liars.”
I doubt that any of what I said here is new. You need to keep in mind the long history of posts here and not think in a vacuum.
Another little reported, and potentially monumental, change in the energy issue is quickly unfolding. Low cost hydrocarbons appear ready to trump “alternative Green” energy sources. Shale gas, is being found and quickly developed all over the world. All through Western Europe, the scandinavial countries, South America, obviously in the US and Canada new deposits are being discovered. Moreover, drilling/fracking is quickly being approved.
Here’s just one example: UK Government Encourages Transparent Shale Gas Exploration
The take aways from the article is this: “Offshore shale gas industry could make UK self-sufficient in gas again.”
but also includes this: “Shale gas operators pump fluids into wells to open up cracks in source rocks and stimulate gas flow. In the US, there has been considerable controversy in recent years over the possible environmental impact of chemicals used in the fracking process and whether they could contaminate water supplies….”
The environmentalist will have some traction here in the UD as there is plenty of easier to produce gas deposits. But, in many part sof the world reliant on foreign sources, the politics of carbon indpendence will over ride the environmental concerns until proven to be other than the wisest approach.
if he’s earning at the cap, he will have paid as much as 480 thousand into the system after forty years. thing is, he will get about 520 thousand out of it, and that’s real dollars. (i’d have to go back and check, but i think it’s not only “real” dollars — inflation adjusted — it is also wage adjusted, meaning his effective interest would be more like 5% compounded. not great, but not bad, and with the insurance security… priceless.)
of course if he has a stroke, or whatever he does for a living becomes obsolete, he could end up getting a lot more out of it that he puts in.
I will have paid several hundred thousand into the system that I won’t recieve as benefits.
For someone who started paying the maximum in 1968 and did so until the end of 2010, the total contribution from employer and employee would be $258679.78.
You could expect that amount to be paid back to you over 12 or so years of retirement, if you go out at 62.
I really don’t know why you don’t think it will be there for you – unless you side with the kleptocrats who want to take it away.
So I ask once again that never answered question concerning the SS Trust Fund. If the Trust Fund Treasuries are subject to cancellation what is it that protects the sanctity of all other debt instruments issued by the Treasury? Another yet to be ansewered question. If SS benefits are covered by FICA cash flow and supplemented by Trust Fund income, what is the benefit of reducing benefits? Is there some expectation that FICA revenues may be diverted to cover general budget deficiencies? That would be illegal based upon current legislation. Also, the point about the fallacy of the unified budget is documented in the SS administration’s own documents. Here is one samll section of the description given regarding the Trust Fud:
“Since the assets in the Social Security trust funds consists of Treasury securities, this means that the taxes collected under the Social Security payroll tax are in effect being lent to the federal government to be expended for whatever present purposes the government requires. In this indirect sense, one could say that the Social Security trust funds are being spent for non-Social Security purposes. However, all this really means is that the trust funds hold their assets in the form of Treasury securities. These financing procedures have not changed in any fundamental way since payroll taxes were first collected in 1937. What has changed, however, is the accounting procedures used in federal budgeting when it comes to the Social Security Trust Funds.” http://www.ssa.gov/history/BudgetTreatment.html
There have been repeated attempts by various administrations and Congresses to foster the idea that FICA are just another tax. And all revenues are up for grabs. The result remains the same. There is no unified budget. The Treasury has lots of outstanding debt instruments. If Trust Fund Treasuries are subject to cancelation so too are any others.
Upthread you linked to David Walker to the effect:
In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt,
This excludes the Special Treasuries. So if the Special Treasuries are to definitely be repaid, like Regular Treasuries, the correct figure is the 90+%. If on the other hand they are not to be repaid, you can use the 63% figure. But you can’t have it both ways.
Jack, So I ask once again that never answered question concerning the SS Trust Fund. If the Trust Fund Treasuries are subject to cancellation what is it that protects the sanctity of all other debt instruments issued by the Treasury? A debt owed to oneself is entirely different legally, financially, and morally. If you default on a debt to yourself, you are both the injured party and the beneficiary, therefore there is no cause of action.
Everyone recognizes this, which is why if the Special Treasuries were nullified, there would be a rally in the other debt types, because a large potential liability would be erased.
What protects the sanctity of the other debt instruments is self interest. If the US were to default on an interparty debt, they would find far fewer lenders at much higher interest rates.
Upthread you linked to David Walker to the effect:
In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public,which is the correct construct — not the 90+ percent figure for gross debt,
The Walker analysis excludes the Special Treasuries. So if the Special Treasuries are to definitely be repaid, like Regular Treasuries, the correct figure is the 90+%. If on the other hand they are not to be repaid, you can use the 63% figure. But you can’t have it both ways.
Also, what drove the debt to high levels was WWII. WWII ended. What is driving the current debt is entitlements. The entitlement are not ending, they are growing.
Good try. Let’s do some math. Do you propose eliminating the entire defense department? That is about 20% of the Budget. So instead of spending $3.7T we will spend approx $3T. Then you’ve got some tax hikes, let’s say they add 10% to tax revenues, so instead of $2.2T you get $2.45T So we have about a $.5T deficit. Pretty good!
Of course eliminating our entire National Defense could have some drastic consequences.
the debt is not owed to “oneself.” the debt is owed by the government to the social security trust fund. these are legally distinct entities. you might read the ssa quote jack provided and ask yourself why if the money is owed to oneself, they go to all the trouble to account for it and call it “lent TO the federal government.”
something bad happened to your brain. this has been explained to you many times, yet you keep coming back to it as if we had never heard it before. really, you might disagree with us, but how stupid is it to keep telling us what we have told you we disagree with.
no. what is driving the current debt is the wars and the stimulus and the tax cuts.
social security pays for itself and has no effect on the debt. medicare should be the same way, but the politicians have been “fixing” it, to turn it into welfare so they can kill it.
there is no reason the people can’t pay for their own medical insurance via medicare. they’d have to understand the the high costs are either the result of a criminal health industry or that the high costs are just the costs of medical care that enable them to live longer. in the first case they might demand the government regulate the health industry… fairly easy to do if medicare is paying the bills. in the second case they would just have to make up their mind that they’d rather live a longer healthier life than spend that money in Vegas.
There is an interesting U of Maryland academic study of choices that people would make, or not make, if asked to try balance the budget. At http://www.worldpublicopinion.org/pipa/pdf/feb11/Budget_Feb11_rpt.pdf. A quote on page 42 just for Bruce and Coberly: “Raising the Social Security payroll tax 1 percentage point over 20 years was seen as acceptable by 45%, and as at least tolerable by 85%.” (The presented option would raise it in equal increments annually up to 7.2 percent on the employee and employer.) But you can read the whole thing.
Jack asked a question, and added “again.” I assumed it wasn’t rhetorical. Just because you don’t agree with my answer doesn’t make it wrong. You have your opinion of the sanctity of the Special Treasuries, I have mine. Yours is based on the current law, and so you are currently correct. Mine is based on the fact that Congress can change the rules at any time, and so may, or may not, be proven correct. We’ll see.
Jack asked a question, and added “again.” I assumed it wasn’t rhetorical. Just because you don’t agree with my answer doesn’t make it wrong.
You have your opinion of the sanctity of the Special Treasuries, I have mine. Yours is based on the current law, and so you are currently correct. Mine is based on the fact that Congress can change the rules at any time, has considerable incentive to do so, and with virtually no downside.
that is pretty close to rational. i may even agree with you. the point i am desperately trying to make is that if people understand how social security works they won’t let the congress take it away from them.
thanks. i think i have read the whole thing or something similar. i keep trying to get congress to pay attention to that fact… that people are willing to tax themselves more.
we could raise the tax one half of one tenth of one percent per year and if at some time it becomes “an intolerable burden” we could do something else then.
i general i don’t put much stock in polls because people are pretty ignorant and easily panicked by numbers they don’t understand. but if you have a population that thinks it can tolerate a half a tenth of a percent raise per year, i take that as a good sign that the politics won’t bite you if you try it.
and twenty years later i bet if you asked the same question you’d get the same answer.
Coberly, be aware that you are being very egocentric in your judgement of morality. By insisting on zero change in Social Security, you would be very likely forcing cuts in other social programs. Those beneficiaries would have an entirely different opinion of your morality.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected many of the readers to come unglued. Sounds to me that many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for that discussion.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected many of the readers to come unglued. Sounds like many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for that discussion.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected some to come unglued. Sounds like many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for that discussion.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected some to come unglued. Sounds like many readers haven’t taken the opportunity to open up the above link and note the sublinks. We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for those discussions.
Here’s another explanation of how Social Security finances impact the federal budget. Those who want to deny that Social Security finances have any relationship with the federal budget will have to figure out a way to dismiss the facts provided in the first paragraph below:
Kansas City Fed, 2006:
“Fourth, Social Security finances affect the government’s overall budget deficit because Social Security taxes are paid to the U.S. Treasury and benefits are paid by the U.S. Treasury. Currently, Social Security tax revenues are $67.1 billion greater than Social Security expenditures. This difference represents real resources withdrawn from the public by taxation over and above the real resources given back to the public in the form of benefits. According to the books of the U.S. Government, Social Security is providing $67.1 billion of net revenue. The government’s overall budget deficit in calendar year 2004 was $401 billion. Were it not for Social Security, the government’s budget deficit would have been $468 billion.”
“Over the next decade or so, Social Security will be in sound fiscal shape, as dedicated revenues will more than pay for promised expenditures, even as expenditures rise. Moreover, since dedicated Social Security revenues paid to the Treasury Department are currently greater than expenditures paid by the Treasury Department for benefits, the difference help reduce the federal budget deficit. …But when Social Security’s dedicated revenues fall below promised benefits, the government must draw on other revenues sources to help pay for benefits. In other words, with no changes in other government spending or revenue, the government total budget deficit will grow.”
“…Beginning in 2017, and continuing throughout the forecast horizon, promised expenditures are greater than dedicated revenues. As a result, the government will have to begin drawing on other real resources from the public to pay for the Social Security benefits going to beneficiaries. In other words, Social Security will be running a [cashflow] deficit that must be financed by the federal government in one of three ways: reduce other federal spending, increase other sources of revenue, or borrow more from the public (by running a larger budget deficit). This shortfall is represented in Chart 1 by the vertical distance labeled “U.S. Government revenues to SS.””
Chart 1 is on pdf page 9. The source for the chart: Table VI.F4 and Table VI.F8, 2005 Social Security Trustees Report. The chart is worth a look as it is labeled extensively.
Here’s another explanation of how Social Security finances impact the federal budget. Those who want to deny that Social Security finances have any relationship with the federal budget will have to figure out a way to dismiss the facts provided in the first paragraph below and the subsequent opinions regarding what happens when the Social Security OASDI cashflow is negative, as is the case right now. Again, this is straightforward informaton about how the Federal budgeting process works.
Kansas City Fed, 2006:
“Fourth, Social Security finances affect the government’s overall budget deficit because Social Security taxes are paid to the U.S. Treasury and benefits are paid by the U.S. Treasury. Currently, Social Security tax revenues are $67.1 billion greater than Social Security expenditures. This difference represents real resources withdrawn from the public by taxation over and above the real resources given back to the public in the form of benefits. According to the books of the U.S. Government, Social Security is providing $67.1 billion of net revenue. The government’s overall budget deficit in calendar year 2004 was $401 billion. Were it not for Social Security, the government’s budget deficit would have been $468 billion.”
“Over the next decade or so, Social Security will be in sound fiscal shape, as dedicated revenues will more than pay for promised expenditures, even as expenditures rise. Moreover, since dedicated Social Security revenues paid to the Treasury Department are currently greater than expenditures paid by the Treasury Department for benefits, the difference help reduce the federal budget deficit. …But when Social Security’s dedicated revenues fall below promised benefits, the government must draw on other revenues sources to help pay for benefits. In other words, with no changes in other government spending or revenue, the government total budget deficit will grow.”
“…Beginning in 2017, and continuing throughout the forecast horizon, promised expenditures are greater than dedicated revenues. As a result, the government will have to begin drawing on other real resources from the public to pay for the Social Security benefits going to beneficiaries. In other words, Social Security will be running a [cashflow] deficit that must be financed by the federal government in one of three ways: reduce other federal spending, increase other sources of revenue, or borrow more from the public (by running a larger budget deficit). This shortfall is represented in Chart 1 by the vertical distance labeled “U.S. Government revenues to SS.””
Chart 1 is on pdf page 9. The source for the chart: Table VI.F4 and Table VI.F8, 2005 Social Security Trustees Report. The chart is worth a look as it is labeled extensively.
“What happens if/when those buying our treasuries stop, or bid them so low to make them too costly for us? “
Boy you really have the talkingpoints down dont you?
The answer is SO WHAT. We dont need anyone else buying the treasuries in order to spend. The spending happens first already and the bond sale second. If someone wouldrather have cash then an interest bearing bond so be it, it actually saves us money to not pay interest on our spending.
Hyperinflation is NOT a bond market driven phenomena in a sovereign currency, only in currencies that are pegged to a commodity or another currency. Look at Japan the last 20 years, the hyperinflationistas have been calling for collapse for almost 10 years and the only thing that collapses is their GDP form time to time (like when they decide to try and balance budgets)
Stop listening to Beck and Ron Paul and actually try and understand how different currency regimes operate. Your blood pressure will come down noticeably when you dont fear imminent collapse of your currency every week.
PJR, and thus defines the political conumdrum of all progams in normal times. They all build pro/con constituencies which then influence Congress to expand/protect/cut/eliminate their “pet” progam(s).
The question here and in many (perhaps a majority) voters’ minds are these normal times?
Dan, a fascinating point: “Hoenig’s fed has a point of view.” As does the CBO, the president’s deficit commission, the Congress, the president, Treasury, OMB, and the majorfity of voters which is consistently, we have a problem with entitlement spending in the current budgets.
As you, Buff, I, PJR and many others have pointed out, fixing it is all about political will. Interesting times, no? Tectonic shift or minor subsidence, only time will tell.
Dan, a fascinating point: “Hoenig’s fed has a point of view.” As does the CBO, the president’s deficit commission, the Congress, the president, Treasury, OMB, and the majority of voters which consistently is, we have a problem with entitlement spending in the current budgets.
As you, Buff, I, PJR and many others have pointed out, fixing it is all about political will. Interesting times, no? Tectonic shift or minor coastal subsidence, only time will measure the enitlements’ sea change.
CBO announced the 2011 deficit estimates to be $1.48T, but the 2012 estimates them to be $1.65T so are we looking at the core of the Obama average annual savings of $.11T? See how he has already cut the budget by $60B more than expected? Wow!!!
Nobody has made that claim yet, but… Remember it is all funny money, comparing what ifs?
i thought we had finally understood each other, but looks like not.
Social Security takes NOTHING for any other government program, social or not. The only thing Social Security takes money from is the eventual benefciary… and he gets it back.
There seem to me only two options: either you plan never to retire, so you don’t need to save for retirement, or you plan to get rich so you don’t need Social Security. Neither of these are good bets. What Social Security does is keep you from having to take handouts from others when you need to retire.
this looks like it was copied from the same book as the CBO brief you offered earlier. It relies on the same fallacies. The treasury is the government office that takes in and disburses money. That does not mean that the money becomes fungible when it comes in the door. There is still a legal distinction between money collected under the Federal Insurance Contribution Act and other taxes.
The other fallacy is that because the government will have to find the money to repay the money it has borrowed from Social Security, that Social Security is putting a strain on the government. This is a lie. The strain comes from having to repay money it borrowed. If I borrowed money from you, you wouldn’t want to listen to me complain about the strain that repaying you would put on my finances.
Again, just because someone “official” says it, that doesn’t make it true. And you need to learn to tell opinion or propaganda from fact, even legal fact.
not quite. The money owed to Social Security is a legal debt. You don’t get to say it’s just a matter of political opinion.
Of course, politics can change the law and the law can change what happens. But there is a huge difference between saying the law CAN change, and the law SHOULD change.
It spite of your occasional denials, you are arguing that the law Should change. It should not. IT would be stealing from the people who paid their Federal Insurance Contributions. Worse, it would be depriving them of a way to save their own money protected from inflation and market losses.
Very harmful to them. Almost certainly harmful to even the people who think they don’t need it.
Logic Dale, logic! “The other fallacy is that because the government will have to find the money to repay the money it has borrowed from Social Security, that Social Security is putting a strain on the government. This is a lie. The strain comes from having to repay money it borrowed.”
CBO announced the 2011 deficit estimates to be $1.48T, but the 2012 Obama budget estimates it to be $1.65T. See how he has already cut the budget by $.17T, $60B more than expected? Wow!!!
Nobody has made that claim yet, but… Remember it is all funny money, comparing what ifs?
MG, Chart 1 is already out of date. This 2006 Report projected cross over of revenue to expenditres in 2017, but as I remember it, it actually occurred in 2010 to the amount of ~$45B. So we can assume the bulk of that ~$45B was borrowed and added to the deficit.
Social Security takes NOTHING fromrany other government program, social or not.
Take it up with the CBO:
To focus policy on the segregation of Social Security and other trust funds ignores the significant linkages that exist between them and the rest of the budget. The level of Social Security benefits directly affects spending under the means-tested Supplemental Security Income and Food Stamp programs. Payroll taxes on employers reduce income tax collections….
But how the Federal government pays the $45B it owes to the SS fund this year is a political question. The general fund has to cover that debt somehow, and that line item is just another expense to the general budget. Admittedly its not much money and shouldn’t be an issue in a perfect world.
But its not a perfect world and the numbers clearly show congress is grasping at anything to lower Obama’s huge debt. As we saw with Obamacare lines can be buried in huge legislation that “must be passed so we can find out what’s in it.” If I was looking for a trheat to SS it would be something buried in some ominbus spending bill thats to big to read. One line on page 1,234 of 2,346 pages of some bill could remove the SS cap for example. I don’t think a stand-alone bill will directly attack SS. I expect it to be nibbled to death, by Democrats and Obama.
Well, well, well I was tromping around the Monthly Treasury Statement site and found the latest numbers which say my memory is incorrect. It appears that there is actually a surplus. That’s great news. URL: http://www.fms.treas.gov/mts/index.html
But they also pointed to another GAO site for official defintions (A Glossary). In it I found this:
Receipts Collections from the public based on the government’s exercise of its sovereign powers, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, and deposits of earnings by the Federal Reserve System. Total receipts are compared with total outlays in calculating the deficit or surplus.
Some how all of this sounds familiar. In this thread now we have a CBO document, a Kansas City Fed Report, the MTS report, and the “Official Glossay of Terms” defined by GAO and used by … well everybody, but the SS “Wagon Circulars.”
I provide this information, not to embarrass anyone, nor more importantly to propose cuts to SS, but to show just how much misunderstanding there actually is.
Well, well, well I was tromping around the Monthly Treasury Statement site and found the latest numbers which say my memory is incorrect. It appears that there is actually a surplus. That’s great news. URL: http://www.fms.treas.gov/mts/index.html
But they also pointed to another GAO site for official defintions (A Glossary). In it I found this:
Receipts Collections from the public based on the government’s exercise of its sovereign powers, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, and deposits of earnings by the Federal Reserve System. Total receipts are compared with total outlays in calculating the deficit or surplus. URL: http://www.gao.gov/special.pubs/longterm/deficit/glossary.html
Some how all of this sounds familiar. In this thread now we have a CBO document, a Kansas City Fed Report, the MTS report, and the “Official Glossay of Terms” defined by GAO and used by … well everybody, but the SS “Wagon Circulars.”
I provide this information, not to embarrass anyone, nor more importantly to propose cuts to SS, but to show just how much misunderstanding there actually is.
Also tromping around that ole GAO Glossary page I found this:
“Off-Budget Those budgetary accounts (either federal or trust funds) designated by law as excluded from budget totals. As of the date of this glossary, the revenues and outlays of the two Social Security trust funds (the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund) and the transactions of the Postal Service are the only off-budget accounts. The budget documents routinely report the on-budget and off-budget amounts separately and then add them together to arrive at the consolidated government totals. (See also Nonbudgetary; On-Budget; Outlay;”
But, why would anyone be confused? It clearly says: “… trust funds) designated by law as excluded from budget totals….” then goes on to define reality with: “… The budget documents routinely report the on-budget and off-budget amounts separately and then add them together to arrive at the consolidated government totals.“
So this confirms the CBO comment about them not being separate.
Point of Order!!!!! Every debt holder of US securities draws from the available cash resources of the Treasury. Again I ask, why are Trust Fund securities no more sacrosanct than are any other Treasury debt? Sammy: “Because they can!!” Are you nuts. You stand there with a horde of Treasuries and watch the Congress cancel the Trust Fund securities and tell me that you don’t quake in your shjoes awaiting the second Congressional shoe to drop on all other Treasury securities. I’m all in favor of canceling all Treasury notes held by any private entity. How is that different?
Sammy suggests that there is no serious consequence to the Congress simply canceling the Trust Fund Treasury notes. An interesting concept that appears to be supported by CoRev. It’s getting difficult to determine who, between the two of them, is the dummy and who is the ventriloquist. Sammy, You are the fool that Coberly continuously recognizes as such. Welch on one debt and your other debtors will celebrate. So much for the “full faith and credit of the US government.” I can’t wait to see the look on the faces of all the T-Baggers over 50 when Boehner and his cronies begin “messin’ with their retirement.” Remember, “Keep your government hands off of my Medicare.” If so many other wouldn’t suffer the consequence it would be a pretty sight to see our red state friends, including their cohorts in the blue states, lose both Medicare and Sociaql Security benefits. Who do you suppose actually wants those programs to be defunded or in any other way reduced? Try to remember that the average income of Americans, while better than most other nationals, is still not much more than $40,000-$50,000, if that. How much health care and retirement are those folks going to be able to afford without Social Security and Medicare. I guess we’ll then have to start looking for more revenue or other programs to cut. Note that the only other spending of consequence is the military. Or why not just defund every public educational system. Public education has obviously been a huge waste of money, especially in those red states and for those red necks, north and south of Dixie.
Jack, I realize you are having difficulty arguing the point(s) so must rely on sarcasm and misrepresentations of Sammy’s answer. The appropriate response would have been to copy and paste that specifc portion of Sammy’s comment with which you disagree, and then make your point to the comment.
Both you and Sammy have repeated yourselves enough times as to make it unnecessary for yet another repetition of the bogus idea in order to criticize that idea. He’s said it and so too have you, that the Social Security Trust Fund is made up of “just so many IOUs” and that the Congress can, in effect, retire that debt at will without repayment. You’ve both used a variety of differrent words to express that same idea. You are both pitching an idiotic idea which would certainly impact the view of all other holders of US Treasury debt.
The more subtle approach to the same end would be for Sammy to suggest simply cutting back on benefits. This is where the idea begins to approach your own more deceiptful approach. By cutting benefits to future, and maybe even present, social security recipients it becomes more likely that only FICA receipts will be needed to pay all benefits making it unnecessary for the Trust Fund to be tapped. In that manner the Trust Fund securities merely sit there as a fund that need not be drawn from and whose assets debtors (the US Treasury) need not pay principle on its debt. The result is the same, just a back door approach. Will the next suggestion be to cut benefits down to a point where by the FICA revenues will be in excess of benefit demand and, therefore, yet more FICA receipts will be made available to supplement the budget deficit? In any event its an effort to divert FICA revenues, either those paid as excess in the past or those that may be created, to the general budget fund and thereby reduce the impact of the deficit.
Congress can with a stroke of the pen up the FICA tax by 3% (or whatever the number is) and make the FICA inputs cover the outputs in SS and NEVER pay one cent of the SS trust fund back. Just let that $2.5 Trillion sit on the books, gaining interest, and never ever redeem a penny. Problem solved by raising taxes.
And Congress never retires the debt nor ever repays it. It just sits as an accounting exercise.
Is it that tough to understand?
BTW, yes it would be wrong, but when as morality or ‘wrongness’ ever walked the halls of Congress?
So now we’re into speculative hypotheticals. Yes, where the Congress is concerned anything is possible. I’d like nothing more to see the T-Bagger response to another 3% raise to the FICA. Better yet, while we’re speculating maybe they could raise both employer and employee by three percent. A little extra FICA revenue would put income over out flow and the Trust Fund will grow yet bigger. Of course now we’re into the realm of totally irresponsible governance. Why stop there? Following the FICA increase that you suggest is possible maybe the voters will revolt in a figurative way and vote out the scum they voted in. Maybe then we’ll get 1950s era tax rates with no loop holes. Who knows what the Congress might do. The point is, Buff, that speculation is just that, a lot of self satisfying prognostication.
Jack is your reading comprehension that bad. Find the quotes for Sammy and I where either proposed what you suggest, where it was not in response to one of your own hypothetical questions.
Please stop arguing with your own assertion of what you think we said. If we said it, quote it.
“Find the quotes for Sammy and I where either proposed what you suggest, where it was not in response to one of your own hypothetical questions.”
Why would it change the content of your comments if they are made in response to another’s comment? Don’t your comments represent your own thoughts? And does the meaning of your ideas change with the stimuli that provoked those ideas?
No CoRev, the point is that you didn’t think it through. You use that same tactic in every thread that you seek to dominate. You’re criticized for some repeated theme and then you insist that the entire theme be repeated by the critic as evidence of its occurrence. A lie twice told is no closer to the truth.
The few Egyptians I have met are very well educated and driven.
This is a battle in a dark conflict to show that a country with Islamic people is not insane!
Imagine a graceful shift from US sustained dictator without US militarism.
Maybe the trillions a year plundered are not necessary.
Besides with the likes of Paul and Ryan in congress the US is back at 1859 in terms of secession, what is there to defend from foreigners when the indigenous want to break the place apart.
End the war machine, how would it be divided among the seceding states?
coberly/Webb:
What part of $1.5T deficit do you not understand? In 2011, Federal Tax Revenues = $2.2T, Expenditures = $3.7T. So we are spending $1.60 for every $1.00 in revenues.
The government has made lots of promises to a lots of deserving people. Widows, orphans, single moms, sick, elderly, veterans, farmers, International allies etc. etc. Why do you hold them only to the promise to SS recipients?
coberly/Webb:
What part of a $1.5T deficit do you not understand? In 2011, Federal Tax Revenues = $2.2T, Expenditures = $3.7T. So we are spending $1.60 for every $1.00 in revenues.
The government has made lots of promises to a lots of deserving people. Widows, orphans, single moms, sick, elderly, veterans, farmers, creditors, International allies etc. etc. If we don’t “touch” Social Security, we will have to cut these programs more than if we did. Or we could raise taxes 60%.
There are claims being made that public discussions about the Federal budget deficits and national debt have failed to adequately discuss deficit spending issues. That may be true, but there is considerable information available beyond that pitched on the blogs, touched on by the news media, and addressed selectively by interest groups. Next week, the Administration will release the proposed FY 2012 Federal Budget which will be subsequently analyzed by CBO and other organizations. Meanwhile, there are reports available which address the broader issues related to the Federal Government fiscal years’ deficits and national debt.
There is no reason for the blog to avoid presenting the President’s budget proposal nor ignoring other reports currently available on the matter of deficit spending and national debt growth if the readership has any interest whatsoever on these issues. This blog has a number of main posters all of whom appear to be capable of pitching other issues. I will grant you that the majority of econ blogs are very weak on these subject matters, but Angry Bear doesn’t have to follow the path of their pathetic efforts. This blog is supposedly among the top twenty blogs on financial issues, and here is an opportunity to demonstrate that Angry Bear has the ability and interest in addressing the next Federal Budget as well as the fiscal year budget deficit and national debt growth issues.
Perhaps it would help if Angry Bear was willing to undertake main post presentations on the following current CBO presentations, all of which provide considerable public discussions of the impacts of deficit spending and further national debt growth.
Testimony Statement of Douglas W. Elmendorf, Director, CBO
The Budget and Economic Outlook: Fiscal Years 2011 to 2021
before the Committee on the Budget, U.S. House of Representatives
February 10, 2011
http://www.cbo.gov/ftpdocs/120xx/doc12060/02-10-2011Outlook_Testimony_House.pdf
The Budget and Economic Outlook: Fiscal Years 2011 to 2021
CBO
January 27, 2011
http://www.cbo.gov/doc.cfm?index=12039
and
http://www.cbo.gov/doc.cfm?index=12061
Federal Debt and Interest Costs
CBO
December 2010
http://www.cbo.gov/doc.cfm?index=11999
Similarly, focusing some attention on budget specifics under consideration involves very little effort. As an example, the U.S. House Committee on Appropriations released the following information this week:
CR Spending Cuts to Go Deep
February 9, 2011
http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=259
Rogers Announces Intent to Cut $100 Billion in the Continuing Resolution
February 10, 2011
http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=260&Month=2&Year=2011
The Angry Bear argument over Social Security’s relationship with the Federal Budget and the General Fund has interestingly, if not conveniently, ignored the following CBO presentation on the subject. It has been available to CBO readers since 2002.
Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective
LONG-RANGE FISCAL POLICY BRIEF
Published by CBO
August 1, 2002
http://www.cbo.gov/doc.cfm?index=3650&type=0
TEXT:
By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget. The separate display, along with the use of trust funds as an accounting device, is a means of distinguishing the program’s finances from those of other government activities. However, the distinction can be confusing when it leads people to think of Social Security as an independent financial entity. Social Security is a federal program, and as such, all of its taxes are received by and its outlays dispensed from the U.S. Treasury.
Focusing on an accumulating balance in the Social Security trust funds can also be misleading. The only economically significant way that the government has a surplus is if there is a unified budget surplus–when total receipts are greater than total outlays. Although separate taxes are collected for Social Security, the money left over after benefits are paid is used to fund other government programs or to pay down the debt held by the public. Moreover, in the future, those separate tax receipts will become insufficient to maintain the program once the post-World War II baby-boom generation begins drawing federal entitlement benefits. Social Security and other entitlement programs will then be dependent on the federal government to cover their costs–at the same time that the government must pay for its many other functions.
Regardless of how any federal program is financed and accounted for–and whether it is presented as on- or off-budget–a full understanding of the government’s looming fiscal strains and the potential economic impact of its fiscal condition requires that all government functions be considered together. It is the federal government’s total claims on the nation’s resources that affect the economy—not the individual components that make up those claims.
The Utility of a Comprehensive Budget Display
The government’s fiscal condition has a significant impact on the economy, and that impact is most effectively summarized by the aggregate flows of money to and from the U.S. Treasury. It is the difference between the government’s total receipts and total spending, including Social Security’s, that determines how much the government needs to borrow from the financial markets or how much it can repay. Social Security benefits alone account for one-fifth of federal spending, and payroll taxes for the program account for one-fourth of federal revenues. Therefore, most economists, credit market participants, and policymakers, when they seek to gauge the government’s role in the economy and its effect on the credit markets, look at the total budget figures, including the figures for Social Security.
Treating some federal programs as off-budget can obscure the government’s total financial picture and its impact on the economy. And fragmentation of the budget can restrict the range of budget choices for policymakers and can complicate the public’s understanding of the government’s long-range fiscal condition.
Social Security as a Separate Display and as Part of the Totals
In summary […]
[CONTINUED]
Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective
LONG-RANGE FISCAL POLICY BRIEF
Published by CBO
August 1, 2002
http://www.cbo.gov/doc.cfm?index=3650&type=0
TEXT: [part 2]
All Federal Income and Expenditures Flow Into and Out of the U.S. Treasury
The concept of federal “trust funds” also contributes to misunderstanding. The conventional view of private trust funds leads many people to believe that the government takes an arms-length approach to the management of federal trust funds–that somehow trust fund money is kept separate from that for the rest of the government. To the contrary, while the accounting for such federal programs is distinct, their cash flow is not segregated.
There are reasons for Social Security to be separately displayed in budget documents: notably its size, the level of taxes it requires, and the program’s significance to the American public. In recent years, some observers have suggested that, with Social Security separate from the budget, the surplus recorded to its trust funds resulted in higher national savings. They argued that the separation protected the surplus from being used to offset other government spending or tax cuts and thereby dedicated the money to retiring the government’s outstanding publicly held debt. That use, in turn, increased the amount of resources available for investment and spurred economic growth.
However, government savings are not determined by the finances of any one federal program regardless of how it is displayed in the budget. Even though Social Security’s surplus funds have been off-budget for nearly two decades, the effect on the net amount of government savings is uncertain. In fact, overall budget deficits characterized most of the period. Even when a clear consensus exists to put surplus federal revenues toward debt reduction–whether they are attributed to Social Security or any other federal program–that posture can be difficult to sustain, as recent experience has shown. Unexpected events, such as a war or recession; new spending priorities; and concerns about tax burdens make it difficult to maintain debt reduction as the government’s highest fiscal priority.
Moreover, having Social Security appear in this fashion, as if it was a separate financial entity, may encourage others to pursue the same treatment for other government functions, particularly those accounted for through trust funds–as shown by recent efforts to take both the Medicare and transportation trust funds off-budget. Such a proliferation of off-budget programs could complicate the public’s understanding of the government’s overall financial condition.
The Shifting Long-Range Context
In the context of long-range fiscal policy, setting Social Security aside from the rest of the budget can obscure the strain that the program may eventually create. Today, the focus of policymakers is on the surplus of Social Security taxes over outlays and how to protect it. That excess of what comes into the Treasury over what goes out, however, is expected to be short-lived as the benefit rolls swell and costs escalate rapidly and permanently with the retirement of the post-World War II baby boomers and the aging of the population. Under the Social Security Board of Trustees’ projections, the excess disappears in 2017 and is replaced by a negative cash flow that is uninterrupted until 2041 (see Figure 1 and Table 1). At that point, the balance of the Social Security trust funds is depleted, causing the program to lose its legal authority to pay full benefits.
A similar story […]
Good find, MG. Watch out for the backlash.
It’s posted on an open thread for a reason.
CoRev, it’s posted on an open thread for a reason. None of the standard nonsense about disrupting a main post thread can be played here.
—– My Little Piece of AGW Pron —-
BREAKING: House bill unveiled late Friday cuts EPA budget by $3 billion, blocks funding for all current and pending EPA climate regulations for stationary CO2 source Posted on February 11, 2011 by Anthony Watts
From here: http://wattsupwiththat.com/2011/02/11/breaking-house-bill-unvieled-late-friday-cuts-epa-budget-by-3-billion-block-funding-for-all-current-and-pending-epa-climate-regulations-for-stationary-co2-sources/
Finally, some Global Warming common sense. this “Open Thread” may go down as one of the most significant if the level of contributions continue a pace.
CoRev, I’ve been saving this one. Any complaints should be directed at CBO. And it’s posted on an open thread for a reason. None of the standard nonsense about disrupting a main post thread can be played here.
CBO did an excellent job of presenting this information.
Shorter MG:
Money is fungible.
Let us focus on the single most salient point, divorced from the rest of the CBO article:
By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget.
Period. End of story.
I have no idea who Dave Koitz and Melissa D. Bobb, the authors of this article, are. But this thing, published in 2002, rings very false in the context of the following six years of Bush regime fiscal profligacy. And they are expressing an opinion – an opinion that is negated and refuted by the very first line of their article.
And remeber, Bush wanted to spend his 2nd term political capital privatizing SS. Lovely thought with the S&P 500 – now about 2 years into a rally – 220 points (14%) below its 2007 high. Which was, pretty coincidentally, about the same as the 2000 high. Total gain of the index in 11 years — just about NEGATIVE 14%. Also, stocks went absolutely nowhere for almost 2 decades, from the mid 60’s to the early 80’s.
OTOH, the year end total assets of the Trust fund have grown every year since 1983. Even in 2010, when reciepts declined significantly due to high unemployment, the amount in the fund grew.
http://jazzbumpa.blogspot.com/2011/02/different-look-at-social-security.html
Any real problem with SS is decades in the future, and can easily be addressed by simply raising or eliminating the ceiling on contributions.
This is a total red herring.
Cheers!
Jzb
Thanks MG!
These are the points some, esp. you and Co Rev, have been trying to make. Now the coberlys and Webbs have to direct the ad homs and misdirection at the CBO, and that dog ain’t gonna hunt.
A whole hell of a lot of our miltary is based in the south.
We can’t let them take it.
JzB
Oh, lest I forget, the Tea Party members of the House have convinced the Republican management to follow up with the whole $100B savings in the 2011 budget that they promised during the elections.
And included in those savings is a change to the NASA budget getting them out of the Climate Science business and back into manned space travel. And we haven’t even seen the Obamacare cuts announced yet. The Senate’s in for an interesting ride.
Jeez. Without even trying, I stumbled across an article on the subject nobody ever seems to want to seriously address, ever. (Or so I’ve been told.)
http://www.nakedcapitalism.com/2011/02/james-galbraith-deficit-hawks-down-%E2%80%93-the-misconstrued-%E2%80%9Cfacts%E2%80%9D-behind-their-hype.html
Notable quote (emphasis added):
A David Walker speech is always worth listening to with care, for Mr. Walker is a reliable and thorough enumerator of popular deficit-scare themes. Three of these in particular caught my attention on Friday.
To my surprise, Walker began on a disarming note: he acknowledged that the level of our national debt is not actually high. In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt, commonly seen in press reports and in comparisons with other countries. The relevant number is today below where it was in the mid-1950s, and comparable to the early 1990s.
Yep – that’s some crisis. We’re less bad off than we were 55 years ago.
I guess when the sky fell, I must have been to busy to notice.
Cheers!
JzB
The Continuing Resolution (H.R. 1) was introduced Friday night. Information about the bill (copy of the legislation, bill summary, list of program cuts, and the subcommittee savings tables) is linked here:
Appropriations Committee Introduces CR Containing Largest Spending Cuts in History
February 11, 2011
http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=261
HT: CoRev
This is part of the Continuing Resolution (H.R. 1) introduced Friday night. Information about the bill (copy of the legislation, bill summary, list of program cuts, and the subcommittee savings tables) is linked here:
Appropriations Committee Introduces CR Containing Largest Spending Cuts in History
February 11, 2011
http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=261
smmy, yeah they’re stuck with challenging CBO if such is their intent. OMB and Treasury have raised the same points in other documents. This is straightforward informaiton.
sammy, yeah they’re stuck with challenging CBO if such is their intent. OMB and Treasury have raised the same points in other documents. This is straightforward informaiton.
sammy, yeah they’re stuck with challenging CBO if such is their intent. OMB and Treasury have raised the same points in other documents. This is straightforward information.
JzB, just couldn’t resit calling MG a name. But the most important point is JzB makes the classic mistake for which the article first defined.
As Jazz said: “By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget. “
But why do you think he ignored the remainder of the paragraph? “The separate display, along with the use of trust funds as an accounting device, is a means of distinguishing the program’s finances from those of other government activities. However, the distinction can be confusing when it leads people to think of Social Security as an independent financial entity. Social Security is a federal program, and as such, all of its taxes are received by and its outlays dispensed from the U.S. Treasury.
Focusing on an accumulating balance in the Social Security trust funds can also be misleading. The only economically significant way that the government has a surplus is if there is a unified budget surplus–when total receipts are greater than total outlays.”
JzB displays classic signs of being in denial or serious problems with reading comprehension.
JzB, just couldn’t resist calling MG a name. But the most important point is JzB makes the classic mistake for which the article was trying to dispell.
As Jazz said: “By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget. ”
But why do you think he ignored the remainder of the paragraph? “The separate display, along with the use of trust funds as an accounting device, is a means of distinguishing the program’s finances from those of other government activities. However, the distinction can be confusing when it leads people to think of Social Security as an independent financial entity. Social Security is a federal program, and as such, all of its taxes are received by and its outlays dispensed from the U.S. Treasury.
Focusing on an accumulating balance in the Social Security trust funds can also be misleading. The only economically significant way that the government has a surplus is if there is a unified budget surplus–when total receipts are greater than total outlays.…”
JzB displays classic signs of being in denial or serious problems with reading comprehension.
BTW, Jazz also ignored this little finding buried in the openultimate paragraph: “…And Social Security and Medicare, by their size, are poised to crowd out other government spending and limit the availability of funding for other government functions….” Where have we heard that?????
And CBO concludes: “The future of Social Security and Medicare depends on the capacity of the federal government to cover their costs while paying for its many other functions. Viewing them and other federal programs as separate from the rest of the government’s finances will only obscure the looming fiscal strains.” Where have we seen this point made?
BTW, Jazz also ignored this little finding buried in the penultimate paragraph: “…And Social Security and Medicare, by their size, are poised to crowd out other government spending and limit the availability of funding for other government functions….” Where have we heard that?????
And CBO concludes: “The future of Social Security and Medicare depends on the capacity of the federal government to cover their costs while paying for its many other functions. Viewing them and other federal programs as separate from the rest of the government’s finances will only obscure the looming fiscal strains.” Where have we seen this point made?
Jazz, looks like an article dated 2/11/11 is just the tip of the iceberg of new articles catalyzed by the budget proposals. Finally, we may have a real discussion, although the article you provided is mostly just more deflection. More rant than meat.
JzB, Thanks for your input. I looked at your site, read your brief bio, golly, nice to know that there are others in this country who can see the forest from the trees.
It has been my experience over the many years that I draw upon from my business dealings, to come to the conclusion that when people take issue of others who are unsure of themselves, for what ever reason, they seem to resort to pointing their finger and saying that person has dirty laundry with out either realizing that they too have the same issues, or can’t bring themselves to admit so.
This blog brings together some really interesting thoughts from various quarters, which to my untrained eye, strike me funny bone or leaves me scratching me head wondering, just what universe some might be living in?I suppose that shows I’m biased to a degree, so be it.
I have no problem with spending money to support the men & women of our military, but I do take issue to the wastes that have been generated because the benificiaries seem to think that the Government is their Cherry tree for the picking. As for the people who babble on about the costs of our social programs, while at the same tyme whining about the costs, they conviently omit the benefits that they have derived from living here in this country. As the Revolution in Egypt & Tunisia have shown, at lest so far, this is what’s taking place here too as far as the kleptocracy is concerned. Lets hope that when our turn comes, it too will be a peaceful one.
By the way, I don’t play a musical instrument, but am a Grandfather & Great Grandfather along with being on S.S. & old as dirt too.
Norman said: “ Lets hope that when our turn [revolution] comes, it too will be a peaceful one.” You folks had your “turn” with the elections of 2006 and 2008, and it is being measured.
This is how the presser for the CR starts: “The fiscal year 2011 Continuing Resolution (CR) crafted by the House Appropriations Committee represents the largest reduction in non-security discretionary spending in the history of the nation. This legislation – the first CR in history to contain spending reductions – is a massive down payment on the new Republican majority’s commitment to drastically decrease discretionary funding in order to help our economy thrive and spur job creation….” And in the highlighted comment we find the core of our budget problems.
Calling a name?
CoRev has a serious problem with making stuff up.
JzB
BTW, Jazz also ignored this little finding buried in the penultimate paragraph:
No, I didn’t ignore anything. I specifically pointed out that it was refuted and begated by the opening line.
That’s my problem with reading comprehensiion.
JzB
CoRev,
What happened to the tea party cuts in the really ripe area: militarism?
A whole $100B in discretionary non security……………….
That is a mere 10% of the annual money the war machine wastes.
And hurry up with the real 2011 DoD budget.
The nuclear navy needs a down payment on the new SLBM (multi warhead long range guided missiles, new one for bigger tubes, at that) carrier.
Without overruns and delays a new $100B sub fleet of 12 to match the aging unmatched Ohio Class.
And the Air Force, is buff here today(?) needs some seed money for the next fleet of bombers to replace the B-2, this one will likely be $10B a copy, and be grounded 60% of the time, but still better than B-2.
And the year slip on top of the other 5 or 6 is going to add a billion bucks to the engine P&W would not have had ready anyway.
Where are the cuts to war profiteering and perpetual mutual assured destruction of the US taxpayer by military madmen, and their not so mad profiteers?
Is that the David Walker who was Comptroller of DoD, while the place has never had a financial audit?
For the good job at DoD I think he was comtroller general for a while.
Always could justify borrowing for the war machine, and ignoring the harm it does to the productive economy.
That David Walker.
And 1946 debt to GDP was built up by a few years of devoting 40% of GDP to WW II.
Ya’all had your turn in 1980, these clowns like Paul and Ryan are Reaganites.
You goota cut the military budget.
Non defense discretionary spending is about 16% of US federal outlays.
Anyone just going there is not serious about deficits, they are serious about retarding the US.
Defense discretionary for paying out half the world’s arms spending is 20% of outlays.
IT should be 6% like the UK or 4% like Germany.
SS spending which is funded by a separate tax and holds $2.4T in US debt is about equal to war rpofiteering and succor is provided to 60 million.
Medicare is about 10% again funded by a separate tax and has a trust fund holding some US debt.
Medicaid paid to states is about 5%.
So, if you worry deficits, the only social program I list here which is paid from general revenues of the US is medicaid, and some of that goes to cover impoverished seniors above medicare.
Here is a link to an arrticle from Mises on Chuck Spinney’s blog.
http://chuckspinney.blogspot.com/2011/02/how-military-spending-weakens-economy.html
I have quoted Thomas E Wood before, he refers to Seymour Melman and Ike.
Military spending drains and distorts the civilian economy.By Thomas E. Woods Jr.American Conservative, 1 March 2011http://www.amconmag.com/blog/less-bang-for-the-buck/If you read through Spnney’s stuff over the years he has pointed out the waste and frightfulness of DoD and the complex for years. He referred to them as Versailles on the Potomoc.Good read and necessary to understand that the US is in debt and cannot get up because of the pillaging of the productive economy to build half the worlds military!
Lessee, Shorter Jazz is so correct! Remember, Jazz, for you it’s meant in its most benign form.
The Austrians show austerity needs to apply to war.
Here is a link to an article from Mises on Chuck Spinney’s blog.
http://chuckspinney.blogspot.com/2011/02/how-military-spending-weakens-economy.html
I have quoted Thomas E Wood before, he refers to Seymour Melman and Ike.
Military spending drains and distorts the civilian economy.By Thomas E. Woods Jr.American Conservative, 1 March 2011http://www.amconmag.com/blog/less-bang-for-the-buck/
If you read through Spnney’s stuff over the years he has pointed out the waste and frightfulness of DoD and the complex for years. He referred to them as ‘Versailles on the Potomoc’. Good read and necessary to understand that the US is in debt and cannot get up because of the pillaging of the productive economy to build half the worlds military!
A few days ago Spinney wrote a piece which I agree and explains what is wrong with the War Machine, and how it spends more and more and the US gets deeper and deeper into a chasm of debt.
Shorter Jazz, continues the deflection: “Any real problem with SS is decades in the future, and can easily be addressed by simply raising or eliminating the ceiling on contributions.”
and this: “No, I didn’t ignore anything. I specifically pointed out that it was refuted and begated (?negated?) by the opening line.” Which is based upon his misunderstanding and obvious confusion over what “off budget” actually means.
The CBO report explains Jazz’zs and many others’ confusion over the term “off budget”:
“In summary tables of the budget prepared by the Congressional Budget Office and the Office of Management and Budget, Social Security’s trust fund income and outlays (and the net transactions of the Postal Service) are routinely shown both separately and as part of the total budget. Those various displays, as well as the concepts of “off-budget” and “on-budget,” are often confusing. Few people can understand how Social Security can be off-budget and part of the budget at the same time. To reflect it as off-budget is to suggest that it is an independent financial entity, which it is not.”
Off budget means, therefore, that in the president’s budget they are shown in a separate section, but included as part of the total. “Off budget” does not mean “out of, separate from, nor independent from the budget.
Shorter CoRev –
If I don’t agree with it, it’s deflection.
Here is a serious comment on budget deficits, that you will also not accept.
In the history of the U.S., budget deficits have been caused by only three things:
1) Military spending – real wars, and Star Wars
2) Irresponsible tax cuts. (Bush cut taxes while going to war – I don’t think any regime in all of human history had ever engaged in fiscal profligacy at such a grotesque level.) BRUCE BARTLETT said they were irresponsible!!
3) Revenue shortfall, as in the GD, the ’01-’02 recession, and the current Great recession cum jobless recovery.
Notably absent from this list:
Social Security
Every other social program you can think of.
Caution – this link contains, in addition to FACTS AND DATA, which are always troublesome, text that might be considered name calling, and conclusions that will most certainly be considered deflection. You have been warned.
http://jazzbumpa.blogspot.com/2010/12/history-of-federal-deficits.html
As an aside, I’ll point out that Mike Kimel has addressed budgets and deficits here before, in some detail. Careful readers might have noticed this.
As another aside I’ll note that someone in the recent SS thread (possibly CoRev, I’m not sure) asked what was the point of resurrecting an article from 2005, but has no reason to raise a similar complaint about one from 2002. Hmmmm.
Cheers!
JzB
Humbug factories!
Neither CRS nor CBO are faithful to the general welfare or the common defense.
Both have missed the huge waste in the Pentagon, conveniently at that.
No, I would not talk SS in context of these humbug factories until war waste profits are cut.
Over at Blaster, Chuck Spinney makes several points.
http://chuckspinney.blogspot.com/
Link from the left hand column: Why the Defense Meltdown Was Preventable; Defense Death Spiral.
You should read it. The failing “defense acquisition” processes do not exist, but the band aids make it look broken. Every day I can relate failures from newspapers articles and Aviation Week. This lack of “acquisition” process demands resources from the society, and also from within the defense establishment. Failed acquisitions take money away from operations and support budgets, as well as military personnel pay and benefits this rip off is self sustaining.
As the failed acquisitions are “fielded” earlier than the quality of the designs or manufactures would justify (because the DoD is there to keep the industry profitable and more profit is made from producing things than just designing them) they cost too much to maintain (an ilsm is supposed to make sure this don’t happen). The stuff hitting the field is just poor quality. The logistics tail on this new stuff is too big to justify so the unmet demands for support grows with each new delivery. The operating budget of the pentagon with war supplements is over $300B a year. Chuck’s second point is that operating and support budgets already straining are raided to keep the process-less acquisition system running, and increasing it drag on the US.
Chuck’s third point is the DoD non accounting system makes it possible to get away with all the above fraud waste and abuse.
Well, those things were before the Citizens United decision, which effectively gift wrapped our electoral system for the corporate kleptocracy. I believe it was Linda who linked to this article in the SS thread. It’s well worth a read.
http://www.creditwritedowns.com/2011/02/corporatism-masquerading-as-liberty.html
JzB
Well, guys, I was just sitting here drinking my mediocre Publix coffee thinkin’, Gee! I should go over to Da Bear, and stir things up! Why, I could say something outrageous like, Finally cleared up here and looks like a cold but beautiful day! Or, How bout them Egyptians, huh, guys? Or like as that.
But, I get over here and find a pie fight in progress and without Bruce or Coberly anywhere in sight.
Man, it’s SATURDAY, SATURDAY, SATURDAY! Thrill to CoRev, MG, and sammy teaming up in the tag team fight of the Century VERSUS their determined opponents, Ilsm, jazzbumba, and Norman with Nancy, their fearless Little Old Lady sidekick, all fearless defenders of Social Security! WILL the LIbertarians succeed at last in shutting up the feckless Social Security Crowd???? Or….will they battle to a draw and resolve to battle on till the last Dorito is eaten and the nachos are things of the past??
If you’re looking for some gaming pleasure, just so’s you know, I was a line backer for Green Bay in a past life. All is not what it seems. Mawnin’ y’all! Nancy Ortiz
ILSM, I agree! We need to cut the military budget. I’m not sure if this proposal already includes the Gates’ recommendations, but I am sure that it does not include the F-35 engine. A mistake in my mind.
CoRev,
The F-35 is a bad investment, not needed for any war imaginable. Neither engines are useable; the Pratt engine which is now sole source, nor the GE which needs a lot of development, because F-35 is a dog designed to keep shoddy design houses profitable.
If F-35 were a good investment I would have both the Pratt and GE engines going in the airplane.
I lived through trying to keep F-16s from burning holes in the ground with the sole source Pratt engine and no alternative.
In the early 80’s when the AF complained about the unreliable, unmaintainable, risky SOLE SOURCE Pratt engine the answer was send more money!!!
So, late in the game AF had to get the GE option developed.
There is so limited test time on the F-35 because they cannot get them up that risk demands two engines, for the competition when you find the Pratt engine is legacy failure.
Shorter Jazz, sources, my friend! I refuse to go to a self referencing, self aggrandizing abuser, for confirmation of his personal opinion. And, we are actually trying to compare a CBO report with a dated non-argument? Who has denied the contents of the WaPo article Bruce provided?
Go back to Sammy’s comment, please, for the actual context for the ensuing discussions. In them, no one claimed SS was in trouble, Bruce’s disjointed from reality point. SS is part of political discusssions because the surrounding budget is in trouble. Which is explained in the CBO offering.
The irony is in the refusal to recognize the meaningless of Bruce’s article versus the truthiness of the CBO offering:
Social Security and the Federal Budget: The Necessity of Maintaining a Comprehensive Long-Range Perspective
LONG-RANGE FISCAL POLICY BRIEF
Published by CBO
August 1, 2002
http://www.cbo.gov/doc.cfm?index=3650&type=0
NO: “If you’re looking for some gaming pleasure, just so’s you know, I was a line backer for Green Bay in a past life. All is not what it seems. Mawnin’ y’all! Nancy Ortiz” made me laugh out loud!
Just visualizing: “Nancy, their fearless Little Old Lady sidekick…a line backer for Green Bay in a past life.” is precious.
Enjoy the discussion. The clouds of misinformation might clear. But, doubt it.
Cheer up, CoRev, ole buddy. Deal is, once a line backer, always a line backer. But, along the lines of humor a la liberal radical commie pinko sell-out, here’s Paul Krugman on the R’s mandate. http://krugman.blogs.nytimes.com/2011/02/11/dont-cut-you-dont-cut-me/
Truly meant only by way of harmless diversion.
CoRev,
Interesting: ” The clouds of misinformation might clear.”
Especially when MG and sammy look at crystal ball stuff from humbug factoires linked to the monkey cage which parades around as republican politics, as fact.
Predictions are not facts, but they are used to sell snake oil.
NO,
You will need to take my place in a short while I am going off line til tomorrow……
Enjoy.
TaTa, ilsm. Take care. NancyO
MG,
You should synthesize your comment and send it in to rdan as a main post.
CoRev –
In your world, presenting a solution is deflection.
And yes, I meant “negated.” Some moron* put the “N” next to the “B” on my keyboard.
And there is still this niggling little detail.
“By law, the Social Security program is treated as an “off-budget” entity, and its financial figures are displayed separately from the rest of the budget.
Plus, SS is self-funded – where have we heard that before? Can you say the same for the Defense Dept?
Here’s an analogy. Bart has a paper route. He doesn’t want to spend his earnings now, but save them for later in life, so he can stop pitching papers some day. His dad, Homer, offers to hold the income in trust. But Homer is a bit careless, and puts the money in the same drawer with his spending cash. It’s in an envelope marked “Bart’s future.” One day Homer gets thirsty and notices that the mad money drawer is empty – except for Bart’s envelope. Homer takes the cash, and slips in an IOU, then goes to Moe’s for a few cold ones. With the passage of time, Bart naively keeps turning the money over to Homer, whose thirst is unqunchable – so the IOU’s build up.
Suddenly one day, Homer has a cup of tea and realizes that he has built up quite a debt to Bart, and doesn’t know how he’ll both pay it back and keep drinking. So he says: “Bart, it is unreasonable of you to expect to get all of your money back. I have a problem with finances, and we must all share the pain. You wanted your money when you were 18. Now you have to wait until you’re 21. And I probably only give you 80 cents on the dollar.
Meanwhile, keep turning over your earnings. I’m thirsty.”
This is how SS is related to the Federal Treasury, and this is how paying SS benefits affects the Federal budget.
Cheers!
JzB who no doubt committed another deflection.
* This is what Real name calling looks like.
I can’t begin to tell you how pleased I am by your use of the word “Truthiness.”
JzB
Shorter Jazz, I wish: “And yes, I meant “negated.” Some moron* put the “N” next to the “B” on my keyboard. ” those morons would stop randomly changing their location compared to where my own brain says they are supposed to be.
BTW, w2hich part of this explanation: “Off budget means, therefore, that in the president’s budget they are shown in a separate section, but included as part of the total. “Off budget” does not mean “out of, separate from, nor independent from the budget.” do you disagree?
You clearly think that “off budget” is something other than what is reality. So go ahead and define it for us. Oh, and don’t reference your own blog in doing so.
And finally, you say: “In your world, presenting a solution is deflection.” to what problem did you present said solution?
Shorter Jazz, I wish: “And yes, I meant “negated.” Some moron* put the “N” next to the “B” on my keyboard. ” those morons would stop randomly changing their location compared to where my own brain says they are supposed to be.
BTW, to which part of this explanation: “Off budget means, therefore, that in the president’s budget they are shown in a separate section, but included as part of the total. “Off budget” does not mean “out of, separate from, nor independent from the budget.” do you disagree?
You clearly think that “off budget” is something other than what is reality. So go ahead and define it for us. Oh, and don’t reference your own blog in doing so.
And finally, you say: “In your world, presenting a solution is deflection.” to what problem did you present said solution?
MG
a fair proposal. but I am, as you have observed, no expert on “the budget.” I do know that most of what you read about the budget deficit in the mainstream media is lies designed to weaken support for Social Security. but Social Security itself is in good shape and has nothing to do with the deficit. now or in the future.
CoRev:
I refuse to go to a self referencing, self aggrandizing abuser, for confirmation of his personal opinion.
Well, if you want to stick you fingers in your ears and go “la-la-la” that’s fine with me. (Yes, that is sarcasm.)
Self-referencing – OK, I guess – but I happen to know where the data is* and how to present it, and that is what I pointed to. That makes it rather convenient, IMHO, and a century of federal budget information is at least marginally relevant to a budget discussion.
My opinions are based on a careful consideration of that data. If you refuse to look at it, then we won’t have much basis for discussion.
If you consider a presentation of real data and logical conclusions derived from that data to be self agrandizing, then more power to you.
But I have NEVER been called an abuser before. I believe this is some kind of promotion.
What Sammy said was:
However, the rest of the Federal Budget is less financially sound than ever.
And the Galbraith piece I linked demonstrated that this is absolutley untrue. But in your world that was a deflective rant with no meat. La-la-la.
Cheers!
JzB
* Here is my data source, in case you would like to indulge in your own self-referential self agrandizement. I made graphs. What would you do?
http://www.gpoaccess.gov/usbudget/fy10/hist.html
In all seriousness, I don’t believe either Reagan or Goldwater would find a place in the modern Republican party. Orrin Hatch is going to get a primary challenge from the right.
The Pauls are, IMHO insane. Ryan is simply an inprincipled liar.
Cheers!
JzB
MG
this is misleading. The “budget” for social security comes from a dedicated “tax” (actually “Federal Insurance Contributions”). conflating that with general revenue, as this article does, is dishonest or stupid. Social Security is workers paying for their own retirement/insurance. They can continue to do so under all foreseeable circumstances with no effect on the budget whatsoever. And it is dishonest to claim that as “federal spending” it affects “the economy.” It is the money the workers would have to save, and later spend, on their own retirement in any case. All Social Security does is provide them a secure way to save it.
CoRev
I am afraid you display your gullibility. Read the lines you cite carefully. They are weasel words designed to confuse you. the taxes may be received, and the outlays may come out of… the treasury,,, but that is like saying the teller at the bank collects your money, and gives it back to you when you ask for it. The money is still dedicated to a particular account, and must be repaid to that account. Just because we have only one federal government does not mean the government can ignore the legal distinction between Social Security revenues and general revenues.
Nancy –
Couple of points:
1) Round these parts, that’s called deflection, not doversion.
2) To a retiree, every day is Saturday.
Cheers!
JzB
Good list of 3, Jazzbumpa. It doesn’t take a rocket scientist to move between the unified budget and a budget in which SS is separated, but those who badly want a unified budget perspective ought to apply the same perspective to the revenue side of the budget. Isn’t that fair? This is seldom done in part because, unlike the spending side, it is made somewhat difficult. I don’t see the revenue side raised on AB by people talking about the importance of thinking of SS as part of the larger budget.
From a unified budget perspective on the revenue side, in which individual tax rates include FICA, we currently have a nonsensical system that ought to be defended by anyone taking that perspective. The system is progressive for the middle class and regressive for wealthier people. The tax the first dollar of earned income is about 15 percent and, after a low AGI threshold, it is 25 percent. For most Americans the MTR is about 30 percent. Over $70K (married couple AGI), it’s over 40 percent but, for pay above an individual wage cap of $106K, it drops to 33-35 percent. Dividends and capital gains taxes are much lower (15 percent) and most of that money is received by wealthy people.
Especially when so much of US income is going to top earners (at historically high levels), taxes (as a percent of GDP) are at historically low levels, and deficits are at historically high levels, shouldn’t the revenue side be on the top of anyone’s list–even before “painful” budget cuts–from a unified budget perspective? Shouldn’t the wealthy be paying a higher percentage, instead of a lower percentage, than the family making maybe $100K plus-or-minus? What would that do to our (unified) budget deficits and revenue shortfalls?
I’ll go further. The article, CBO or not, is thoroughly dishonest. An attempt to pretend that Social Security is just another part of the budget. It is not.
CBO went to a lot of trouble to show that Social Security can pay for itself with a payroll tax increase of one half of one tenth of one percent each year… that forty cents per week for a worker today. They would not have gone to this trouble if SS was just another line item.
There is a whole legal structure and 75 years of history that this article is attempting to convince you isn’t there.
CoRev
sorry, but this report, CBO or not, is carefully crafted to mislead you. and it succeeded.
SS is “off budget” because it has an entirely separate, dedicated, revenue source: the people paying their Federal Insurance Contribution.. on the promise that the money will be protected from inflation and market losses and paid back to them in their time of need.
Claiming that it’s just another tax and the government can do what it wants with the money is a lie. Even if the liar works for CBO.
I’m done for the day, as well. There is music to be played.
Cheers!
JzB
DAle, repeating the misinformation: “ but Social Security itself is in good shape and has nothing to do with the deficit. now or in the future.” never makes it correct.
Sigh! Anyone care to support Dale’s protestations? Let me ask this question: Who here believe’s Dale’s understanding over CBO’s????
CoRev
and your continuing to lie about it doesn’t help anyone except the bastards who want to steal it.
read the goddamn trustees report. SS can pay all promised benefits with no changes whatsoever for another twenty plus years. how old will you be then? what else will happen before then?
read the goddamn CBO report: SS can pay all promised benefits for the next 75 years with a payroll tax increase of one half on one tenth of one percent per year… about forty cents per week in today’s money.
read the goddamn trustees report again: SS can pay a benefit greater in real value than today’s for the next seventy five years with no changes whatsoever.
find some way to recognize the obvious: SS is legally distinct from “the budget”, has always paid for itself, has no way to “borrow” from anyone and so cannot create a “deficit”.
note that SS has paid benefits for 70 years that are always greater than the people paid in.. due to the growing economy and the pay as you go with wage indexing feature.
so stop babblling dishonest garbage.
the people who have paid their social security “taxes” have done so on the promise they would get social security benefits. there is no reason they shouldn’t get them, on time. it is their money that paid for them. it has nothing to do with the deficit, not one goddamn dime.
CoRev
the silence you hear is not people who don’t believe me. it’s people who are tired of your little stupid games.
CoRev is incorrect. SS was created off budget exactly to keep the funding separate from the general budget.
CoRev
“off budget” means legally separated from the general budget. dedicated to Social Security, collected in the name of Social Security, and legally required to be paid only to Social Security.
PJR, I’m going to bypass most of your data to address the point I think you are making: “and deficits are at historically high levels, shouldn’t the revenue side be on the top of anyone’s list–even before “painful” budget cuts–from a unified budget perspective?”
Perhaps in a normal world of federal expenditures, but we have seen a ~26% increase of Fed spending to GDP since Obama took over. With a projection of it reaching 90% by 2020. Do you really believe that all of the 35%+ increase since 2006 was absolutely, positively, no BS necessarily sacrosanct?
For heaven’s sake Shorter Jazz, you forgot Sunday, the day of rest.
well, somewhere up or down thread CoRev makes his case: in the event the United States goes broke it will have to stop paying Social Security.
But the United States of America is not going to go broke, unless his friends manage to exempt themselves from paying any taxes… it would hurt the economy, you know… and decide that poor people’s life savings have to be confiscated to fund the army and the navy.
But even this is not true: If there is any government at all, capable of opening an office downtown, and keeping the mongol hordes at bay, Social Security could continue to pay for itself, as it always has,.
All that is necessary is the people recognize that one day they are not going to be able to work any more, but aren’t ready to die. They will need to save some money so they can eat when they stop working. It turns out the safest way for them to save money is to form a cooperative: everyone contributes a small part of his income while he is working. this money is used to pay back the people who previously contributed part of their income and now need to get it back to pay for groceries. Then when the new generation gets old, they will get their money back from the next generation.
This is the same system that humans have used for a million years. The only difference is that under today’s conditions the individual family has no way to protect itself from very big forces. So that “cooperative” the people form… sometimes called a government… has to be big enough to weather every storm. The United States of America is big enough. Unless we let lying weasels like CoRev convince us that we should just let the lying bastards klll Social Security… because, after all, it was never real to begin with. seventy years was just an illusion. and after a few years of tEa party rule, the history books will show that.
barry rithholtz posted a piece from john maudlin on public debt i thought a worthy read:
http://www.ritholtz.com/blog/2011/02/the-future-of-public-debt-3/
Dale is right, CoRev. Nothing in your endless copy-and-paste exercises proves otherwise.
nancy, was your past-life first name ray?
i think that act/victory dance has yet to be played out. hope it comes true.
jeff–Shhhhhh! The first rule of past lives is that we can never identify ourselves! Besides, I used to be a real nice guy off the field. You can ask Bart Starr! Shucks. Now, I’m a little old lady in South West Georgia. I gotta wonder where I went wrong. 😎 NO
In SSA, CoRev, we never rest. NO
LMAO! hopefully, you have a full set of teeth this time round!
Didn’t say that, CoRev. But to balance the budget at 20 percent of gdp (which would be even lower than Simpson-Bowles recommended), you need to cut spending as a percent of GDP by about 20 percent and raise taxes as a percent of GDP by over 33 percent, from current levels (about 25 and 15 percent, respectively). I am suggesting that we not focus on the smaller problem.
Didn’t say that, CoRev. But to balance the budget at 20 percent of gdp (which would be even lower than Simpson-Bowles recommended), you need to cut spending as a percent of GDP by about 20 percent and raise taxes as a percent of GDP by over 33 percent, from current levels (about 25 and 15 percent, respectively). I am suggesting that we not focus on the smaller problem.
Oh, and on that subject, props to Coberly and Bruce for consistently telling us to address the revenue side, by raising revenue collection on wage-earners (SS taxes, on earnings up to the wage limit). THEY are addressing the revenue side.
Gee coberly, do you have to be so harsh on poor old CoRev? (at least I think he’s old? over 60?) He likes to make fun of others, but sure takes offense when it’s his turn on the spit.I had gone away for a nap, came back for more of the interesting takes of this beautiful day out here in the land of sunshine.
I do have one thought that keeps rolling around in my thoughts: “what would all these kleptocracy elits do if one day they awoke to find that their wealth was no more”? Taking it another step, “what would they do if the infrastructure were to collapse while they slept in their McMansions”? A third question; “with the treatment of the I believe 2 million plus members of the military who fought the Bush now “O” wars, that are floating around as just so much used product because the business people are afraid to employ them, for what ever reason, I wouldn’t be so sure that they could be counted upon to be back up for the kleptocracy elits”!
I would also lump into the equation, all those middle class people, both unemployed & just hanging on, who I might add are victims also of the kleptocracy, add up to quite a large cross section of the population.
How long has this kleptocracy been going on here in the U.S.A.? Well, I guess that would depend on who is asked the question. Again, I say: I hope the revolution in this country is peaceful, and to CoRev, your reference to the 2006 & 2008 elections is only in your dreams if you think they were a revolution. You are drinking your own koolaid, my friend!
jeff
the article is flawed. it conflates “entitlements” with the debt. Social Security is not part of the debt. Never has been. Never will be. Legally never CAN be. unles they change the law, as with the recent payroll tax “holiday”, a political knife in the dark.
Medicare could add to the debt, but really shouldn’t. It’s just people paying for their own expected health care. If they want the health care,they should pay for it. It only adds to the debt, if we try to have it and not pay for it.
The causes of the debt have been military spending and tax cuts, and the recent flawed “stimulus,” required because of banker malfeasance.
I’m afraid this is just another one of the many many articles that use “the debt” as a stalking horse for cutting Social Security while preserving tax cuts for the rich and the programs they like.
The cost of paying for Social Security would be the equivalent of forty cents per week per year for the average worker. topping out at 2% of wages for the worker, matched by the employer in 2070 or so, long after the last worker now paying for SS has retired. We may be fairly sure that if workers are living long and healthier lives in the brave new world of the next century they will be able to make their own adjustments to SS. the current frenzy to “fix” SS is dishonest.
coberly/NO,
I guess I would like to know: what part of a $1.5T Federal deficit do you not understand?*
In 2011, Federal Tax Revenues = $2.2T, expenditures = $3.7T. So we are spending $1.60 for every $1.00 we take in.
We have two choices:
1) Raise taxes 60%. This would imply Federal marginal tax rates for individuals and corporations approaching 65%. If you add on state (10%) and FICA (10%) then you have marginal tax rates at 85%.
-OR-
2) Cut spending 60%. Since Social Security = 20% of expenditures, if you are to exempt Social Security completely, as well as interest payments on the debt, you are left with just 70% of the budget to work with, implying that all other federal programs would have to be cut 90%.
Why should Social Security be the only spending left untouched? Is Bill Gates getting his Social Security check a better use of our money than AFDC or food stamps or Medicaid/Medicare?
*coberly, please don’t respond with your 3% tax hike as a solution.
Norman
the essential nature of the keptocrats is they believe they are smarter than us. they “win” and we are “losers.” they believe luck has no role in their winning… or that they will always be lucky.
there is some phylogenetic excuse for this. for most animals most of the time it pays to grab the other guys bone, now. if you can get away with it. there is no telling what tomorrow will bring, so do what you have to to end up on top today.
now as it turns out humans evolved from this to be able to cooperate with each other and have made great strides because of that cooperation.
but, perhaps only since the industrial revolution, it has been possible for a few to “succeed” by cheating. that is not necessarily the real cheating that could get you arrested, or killed, but by taking advantage of the labor and kindness of others to build wealth and then claiming you did it all yourself, and anyway “enlightened selfishness” is the Darwinian way to assure survival of the fittest,
anyone who knows anything, knows this is self delusion, but the nature of self delusion is that it deludes yourself.
but it is up to us who still understand the fundamentally cooperative nature of the human enterprise to resist these … well, i was going to call them criminals, but when they make the laws they are not criminals by definition.
but here’s the funny thing… we may actually need some of that criminal spirit in society. the trick is to control it. not let it make the rules. or worse, tell us what to think.
I would encourage Libertarians and those influenced by them to consider one principle of the Founders ignored in their current leaders’ speeches. That is the principle that the United States would maintain no standing army nor would it quarter it in the houses of its citizens. I suggest that what we have now is the modern equivalent of an army whose troops are eating us out of house and home. Anything not taken from us by manipulations of the stock and financial markets is extracted from us by the insatiable appetite of the MIC.
In comparison, whatever else is arguably wrong with SS, it is undeniably good in its effects on retired/etc. individuals and our domestic economy as a whole. I will assume here that the object of proposals to “reform” SS is to abolish it. I think this because it provides, at best, modest benefits to replace lost income in its current form. So, any reduction in the benefits it provides would have the effect of making SS valueless as a base for secure retirement income, thus eroding its political support and causing its eventual abolition.
So, what do “reform” supporters suggest to replace SS in terms of regular and reliable monthly infusions of money into the domestic economy? SS has been there every month for 75 years, good times and bad. Since it is adjusted for inflation, it more or less keeps pace with the current cost of living. I have heard nothing from SS’s detractors to suggest that they advocate abolishing our standing army. Why, therefore, is SS so odious when it stabilizes the cash float in our domestic economy instead of merely transferring general revenues to the MIC? Jus’ asking. Nancy Ortiz
Hey, it’s a perk of a new life! New teeth, new hair, and functioning knees! 😀 NO
Sammy
you have said this all before. and the answer is still raise the Social Security tax one half of one tenth of one percent… that forty cents per week… per year. Then to take care of the deficit that has nothing to do with Social Security raise the income tax 3% until the debt reaches a sustainable level
i’m sorry you don’t understand arithmetic. but it works. of course the 2011 rate of deficit spending cannot continue.
there would be no reason to cut Social Security since Social Security pays for itself. You’ll have to trust me that Bill Gate’s Social Security check is not going to solve the problem..
Ok, sammy. Why shouldn’t our general revenues more closely match our federal expenditures? So, if SS needs a 3% boost, we should pay it. No biggee. It beats the hell out of the alternative which is more people starving on the street than are already doing so. And, there are lots, sammy. Thousands upon thousands of people who’s only crime is being unemployed and not being able to pay rent.
And, answer my question. Why are millions of starving old people preferrable to reducing military spending? If no government is the only acceptable government, hang around and watch what happens when you get your way.
btw Sammy
if the economy returns to normal, and the Congress does not increase spending, the 2011 deficit could be paid for in four years with no tax increase at all. sorry. math.
nancy
just to clarify SS won’t need a 3% tax increase, except over the next 60 years, and I am sure Sammy will never have to pay that much.
during that time wages are expected to increase over 60% in real dollars. you’d think even sammy could understand that if people are going to have a lot more money and live a lot longer they might want to spend some of that lot more money on retirement. i can remember when that was the main point of making more money than you spend… to be able to retire while young enough to enjoy it. Now that it’s possible, the bastards are trying to take it away from you… because they can make more money for themselves by keeping you at work.
NO, guess you didn’t spend much time at HQ? 😉
of course the 2011 rate of deficit spending cannot continue.
Victory!
Sammy, you banter the 1.5 T figure, yet you don’t address why? I presume you work at some endeavour to feed yourself & those you love, so, what would be the result if your income was in the neighborhood of say $1600.00 a month? Would you survive quite nicely? Do you consider the amount excessive? Too little? What do you consider a proper amount?
jeeze Sammy
if that’s all you meant, you shoudda said it in the first place. for the record. the 2011 defict rate cannot continue. even coberly admits that.
of course it still has nothing to do with Social Securty, which pays for itself. just ask the people who pay their Federal Insurance Contribution “tax” what they think about the government using the money for something else.
NO,
Why are millions of starving old people preferrable to reducing military spending?
It’s not. Rich old people getting SS checks is not preferable to starving children either. That’s the thing, we have to make choices. Go ahead and make up your plan that leaves SS untouched. Make the cuts or tax increases where you think they should be. I challenged Bruce and coberly to do this, but they refuse to deal with “liars.” I thought you took up the challenge. I promise, and I’m sure CoRev would agee, to give it fair look.
Norman
I can survive on less than that, but my family is grown, my house is paid for, and i drive an old, reliable car. and i don’t have any expensive habits.
on the other hand, those folks who paid for their Social Security have a right to collect it. They can live on it if they have to. Or use it to supplement other income, if they have it, to live a little larger.
For what it’s worth, I can live on my SS, but unlike Sammy who wants to work for his boss until he is completely senile, I was glad to quit working for the boss, and now I work for myself. That is one of the joys of retirement that the lying bastards don’t want you to think about. Of course having a reliable income from SS allows me to take some chances with free enterprise that i otherwise could not afford to risk.
NO said: “Ok, sammy. Why shouldn’t our general revenues more closely match our federal expenditures?” Good question? Many believe they should. So let’s not raise the debt ceiling. Instant fix. Next.
Then you go off and make some comment about raising SS. Sammy, and I know I, agree. Instant fix. Next.
Finally, you ask: “And, answer my question. Why are millions of starving old people preferrable to reducing military spending?” Sammy had said: “…you are left with just 70% of the budget to work with, implying that all other federal programs would have to be cut 90%.” I assume you would accept a 90% cut in DOD? Oh, and every other program, with the exception of SS?
Lessee, that’s a 90% cut for food stamps, medicare, medicaid, EPA, DOE, DOI, Agr., NIH, etc. (the list is too long to include every program). But SS will remain untouched.
Those are your goals, and we solved them didn’t we? Good job! (Just spent the PM with grandson :-))
Joel, take it up with the CBO! 😉
Dude–Been there and witnessed the amazin’ sight of one person in an elevator because only one would fit. Oh, yeah. And, who can forget the yellow tape line in the middle of the hall floors of the old OPs building. Without it, half the people working there (I among them) couldn’t find their way out of the building. Oh, yes. Woodlawn. Dear to my heart.
I was working, CoRev. Don’t know what they was doin’ because they didn’t even have sign-in sheets. And, I don’t call going to meetings work! I am a Field Office person. Our motto, We get the right check to the right person at the right time, every time. CO’s motto is, “Whatever.” /snark/ Been there, CoRev? It’s ok if it’s the best you can do. NancyO
PJR, I’m not sure of what you are saying here: “But to balance the budget at 20 percent of gdp (which would be even lower than Simpson-Bowles recommended),…” do you actually mean limit the budget to 20% GDP?
You also say: “you need to cut spending as a percent of GDP by about 20 percent…” FY2010 spending just north of 60% GDP. Are you proposing cutting spending to ~48% relative to GDP or do you mean subtract 20% from ~60% to get to just north of 40% relative to GDP?
I have a similar question re: your tax comment. I’m not sure where you got your “by over 33 percent, from current levels (about 25 and 15 percent, respectively).” What I have found is 2009/2010 tax revenue are running ~15% ralative to GDP.
Moreover I’m not comfortable when comparing tax revenues to GDP. Tax revenues are part of the Fed spending which is also part of the GDP calculation. Unless we are clear in our use there could be double counting of revenues, but GDP also includes the spending from borrowing. just trying to say this kind of comparison can be confusin/ed.
NO, I think you made & got my point. 😉
Oh, Norman. Don’t bother expecting sammy to know the durn day of the week. I guess you and me and Coberly have our animals and a simple “I paid for my retirement check, it’s mine, don’t mess with it” mentality. Saw a Brown Thrasher today for the first time in more than a month. And, a red wing black bird today showing his red epaulettes to three admiring lady black birds. He didn’t push it, just flashed ’em a little. Mess of Eastern towhees and a pine warbler. Now, that’s beautiful. Good thing to think about at the end of the day. NancyO
Norman said: “Sammy, you banter the 1.5 T figure, yet you don’t address why?” It’s the CBO estimated deficit for 2011. We are expected to spend $1.5T more than we get in revenues. So to answer why? We’re spending too much, and/or not raising enough revenue, consequently we are borrowing too much.
CoRev, at the risk of sounding like a . . . . . . what ever you may put a label upon, how much revenue do you think is lost due to the continuing Bush tax cuts, also the reduction of FICA? Then, what about the pallet losds of crisp new $100.00 bills shipped to the war effort? Now, as a good American patriot, you are a veteran ofthese fine military services of the U.S.A. too I take it, can you sit here and preach to others when your country is falling apart? You know as well as I and every other person who has been around the block a few tymes, I take it you have been, that the present diletantes masquerding as politicians havent any intention of fixing anything in Washington, so why do you keep pointing to old people as being the sacrificial lambs instead of the real culprits?
CoRev
in case you have any self respect left, look over the last four comments and see what you did.
this is the kind of non sequitur that makes people tired of you.
sammy
you are suffering memory lapses and make stuff up. there are no rich old people getting SS checks except the ones they paid for. you simply don’t know anything about SS except the fantasies you spin after the man in the nice suit tells you fairy tales. SS is not welfare. it is an insurance program.
what makes it insurance and not “just” insured savings is that you are insured even against failing to thrive… failing to make enough money over a lifetime to be able to save enough for even a minimal retirement. the “insurance payment” makes up the difference between what you save and something closer to what you need. where the extra money comes from is that those rich people… who didn’t know they’d be rich so they bought the insurance too… don’t get quite as much effective interest on their savings (or premium or tax or whatever you want to call it. it is what it is.)
your idea of SS would be like people who don’t have a fire get to have their insurance refunded. or maybe you don’t pay them if they do have a fire because they can afford to fix the damage themselves. your thinking is completely screwy. i suspect you aren’t as dumb in real life. it’s only when certain people start thinking about government spending that they get stupid.
the “tax increases” that coberly proposed were “one tenth of one percent increase in SS whenever the Trustees report short term actuarial insolvency. and a 3% rise in income taxes across the board until the deficit is paid down to a sustainable level. you can’t have it both ways Sammy. you can’t say i “refused to deal” and on the same page tell me not to repeat my 3% tax increase. well, you can, but only if you have a screw loose.
i don’t think i have called you a liar. that’s co rev who has learned the trick. but he’s a pretty small liar. the big liars are famous people whose names you would recognize.
we don’t have to make any choices between old people and starving children. the old people save for their own retirement via Social Security. and lots of them use their benefit checks to help out children. again, you are talking about a world that does not exist except in your imagination.
and you learned a lot about the budget from him too.
sammy is wrong about that 90% cut. and you are shameless for offering it again.
Norman, let me start with your major misconceptions: “… so why do you keep pointing to old people as being the sacrificial lambs instead of the real culprits?” Where do you get off making such an absurd statement?
Sheesh!
Norman,
$1600.00 a month? ……Do you consider the amount excessive? Too little? What do you consider a proper amount?
I consider $1600 per month to be a subsistance level income. No, I don’t think it should be cut. This is what you get when you choose, or are forced, to depend on the government for your retirement, which is why I would prefer to control my money myself. I may be in the same boat as you in 10-15 years from now in retirement if things don’t work out, but it’s better than having no Social Security system.
Please don’t be alarmed that someone is going to cut your Social Security. Same with you, coberly and NO. The first politiican that proposes that a majority of current retirees will be cut will find out that that ol third rail still has a bit of juice in it. Although you might want to worry about the “Non-Partisan Blue Ribbon Commision” approach.
What probably should and will happen is that maybe the top X% of recipients by income and assets will lose or have capped their payouts (means test), and future generations will be on a much lower payout schedule. The Special Treasuries will be nullified. But you, Coberly, NO probably won’t lose a dime. sammy, on the tail end of the baby boom, will probably not fare so well as you all, social security wise. I will have paid several hundred thousand into the system that I won’t recieve as benefits. But at this point, a subsistance level income would be better than no Social Security.
NO,
“I paid for my retirement check, it’s mine, don’t mess with it”
This is not accurate. The way Social Security was designed is that you paid for someone else’s retirement, and then someone else pays for yours. Unfortunately, with the ever growing demands on government funds, what should have been taken for granted has now become a political struggle. Sorry.
CoRev, yes, I was saying a budget that is 20 percent of the GDP (meaning budget/GDP = .20). Both in revenues and spending = “balanced.” I chose 20 percent as a reasonable as well as round number, although I agree with Simpson/Bowles that it will have to be more than that in the future (imho probably much more).
As for the other numbers, this is elementary arithmetic. Going from 15 percent of GDP (revenues) to 20 percent requires you to increase the percentage by one-third (add 5 percent to the 15 percent). Going from 25 percent of GDP (spending) to 20 percent requires you to decrease the percentage by one-fifth (subtract 5 percent from the 25 percent). Got it? If you want to balance the budget at a higher level, increases taxes more and cut less–maybe you want to balance it at 25 percent of GDP, in which case just increase revenues as a percent of GDP by two-thirds (add 10 percent to the 15 percent).
Just to underscore my point (that the revenue side should be the focus): over the coming years, as GDP increases, the tougher policy challenge is to grow revenues significantly faster than GDP growth; the smaller challenge is to restrict spending growth to less than GDP growth. The smaller challenge isn’t small, just smaller.
Gut gesehen, CoRev. I hope your grandson is well. Now, to return to my point. If we had no government of any kind, you’d still have to pay taxes. When Matthew, the New Testament’s tax collector or his modern equivalent , came to your door to take everything you had so that he could make a nice profit as the Roman or maybe Halliburton’s Proconsul for Taxation where you live, you may could understand why a little restraint in stinginess could make sense. However, I am now listening to the Queen of the Night’s Aria from Der Zauberflote. It’s enough for one day. Guten abend. NancyO
No, sammy, you haven’t. Ganz genug. NancyO
Ah, I took my leave for a few hours folks, but here we are again, of course, there is a lag on my part, so, To: CoRev, SHEESH to you, you should be more to the point, without your always pointing out how everyone is wrong except you. As for misconceptions, you are the one with the misconceptions, or maybe in denial would be a better term. You seem to say that anyone who doesn’t agree with your take on a subject, is left wing, out of their tree, hasn’t a grip on reality, the usual banter that indeed comes from people who really don’t have both legs on the ground. Try addressing the real issues here, not the talking points that the Petersons, the Commissions, the so called pundits of doom talk about all the time. You sometimes write as if your a troll. Perhaps you are. But you like to make others out in ways that shows that you are the one who is misinformed. Get real, why is this country falling apart? Who has held the power reigns during this debackle? Who are the ones today that want to return to yesteryear? The fools, yes, they are fools, trying to make points with the puppet masters, when in reality they are only names in someones black book, that which are the real sacrificial lambs the power holders give up. Face it CoRev, even you are in someones book, just waiting to be given up on the alter so that holder can say he gave at the office. You are playing the game, whether you know it or not. Time to check your ego, for one day soon, you will wake up out in the cold and hopefully for your own sake, you wont freeze.
To Sammy, You still don’t get it. You consider $1600.00 per month subsistance, yet there are those that don’t even receive that. They either get another sub to make up for some of the difference, ore go without. As you note, in 10 – 15 years, you might be in the same boat. Well, wake up & smell the coffee young man, for if the Kleptocracy elites have their way, you will be in that boat. Your buying their B.S. today when you agree with their prognosis. Either you are not seeing what is taking place around you in this country, or your drinking the koolaid they are serving you. Open your eyes, because it’s people like you that they are counting on. If you were in the over $1,000,000.00 + per year take home, you’d still be on the botton of the ladder. But don’t take my word, just remember that if they get their way, you’ll be lucky to even have that subsistence sum to live on.
Norman,
Get ahold of yourself. You are ranting like a lunatic.
Norman, huh? Did this rant have a point?
Trouble is the whole premise of their argument rests on the idea that the US govt could someday run out of money to pay SS. THAT is the biggest lie.
Hmmmm just how can SS/Medicare crowd out further govt spending??? You mean we can run out of money???
PJR, thanks! That clarified your thinking. I disagree That raising revenue (especially taxes) is the easier political path. We’ve raised spending by ~35% since 2006, and the constituencies are not yet deeply entrenched for that spending. There is more political will to cut, than raise taxes, even though a combination of both are needed if we are to balance the budget.
Furthermore, much of that recent spending has been associated with economic stimulus, and meant to be temporary, but as we know, once spending is increased it is difficult to cut it back, but it is less difficult than increasing revenue via taxes. The latest example is the Bush tax cuts. A combination of both (cutting spending/raising revenue) are needed if we are to balance the budget. I believe there is more political will and therefore ability to cut spending is the smaller challenge versus raising revenue via taxes.
Finally, this statement does make sense: “…over the coming years, as GDP increases, the tougher policy challenge is to grow revenues significantly faster than GDP growth;…” with a balanced budget as a ratio relative to GDP. What you have done is unbalanced the budget to the revenue side. If you are proposing that we spend that increased revenue for redeeming treasuries, then I agree completeley. If not all we are doing is perpetuating the over spending that has gotten us to this point.
NO, the GRANDson is really, really GRAND. The rest of what you said is a little overly hypothetical, don’cha think?
Still smiling at the vision of the “l’il ole lady — linebacker”
Tomorrow will start of one of the more interesting specticals in DC, the Budget Debates. As MG pointed out in the beginning of this thread there is much info to peruse and hopefully understand.
Watching this AM’s talk shows will start in earnest, the demagoguery. There has seldom seen such two differing view points on implementing the budget. Even though the president is more aligned with the House views, his budget will raise hackles on both ends of the political spectrum.
Dan, I hope we can see some of discussions here.
CoRev
maybe as hypothetical as your “when the government goes broke…”
sammy
when you put money in a bank the bank gives it to someone else. when you take “your” money out of the bank, the bank gets it from someone else. SS works the same way.
money cannot be put in a drawer with your name on it and given back to you with your very own fingerprints still on it.
you see, it works like this: you belong to a “cooperative” called the Social Security system in which you save your money by putting it in a bank called the Social Security Trust Fund. That Trust Fund uses your money to “make money” by the clever trick of using it to suppport a business that pays people’s retirement benefits so that other people will bring in their money in expectation of getting the same deal… which is a very good deal. better than you can get anywhere else.
by using the pay as you go with wage indexing system, you are assured of getting “your money” back in dollars that reflect the change in the value of money (inflation) and the increase in the standard of living. this is not called “interest,” but it is effectively the same thing.
and none of this has anything to do with “government funds.” Sorry that you can’t understand it.
CoREv
apparently you never bought a house or car “on time,” or started a business. you don’t seem to understand much about “borrowing.”
Sammy
no. they won’t cut “current” recipients. they are not that dumb. l they will cut “future” recipients, because “the young” are that dumb.
you will get back everything you put in SS… if they don’t change the law… plus enough “effective interest” to pay for inflation and average growth in the economy. about 5% effective rate. You can get better from playing the stock market, but not, i think, from bonds… not bonds that you keep, anyway, maybe bonds that you trade. the big difference that SS is “secure” you can’t lose it to inflation or a bad market. you can only lose it to bad politicians who can fool people like you.
maybe you are smart enough to “control your money yourself,” but most people are not. and it would be bad for you as well as the reset of us if they reach their sixties and can’t afford to retire.
for them SS is essential. for you, all you have “lost” is what you “might have made” if your luck held. which it wouldn’t if half the old people in america were homeless and starving.
if you are smart enough to make money on the markets, you can make money without using your social security insurance,
means testing is ugly and expensive. you won’t like it. either as an applicant, or as the guy who pays the taxes to support it.
the “rich” people you think are collecting SS are not enough to save the system any money. AND they have paid for their benefits.
what you don’t understand is that with SS even the poor people pay for their own benefits.. or at least most of them. with a means tested system, people would not be paying for their own benefits, and unless you want to step over their bodies, and don’t need them as customers, you would end up paying for ALL their benefits.
CoREv
given your and sammy’s response to NOrman, why would anyone want to talk to you?
Sorry, this was supposed to say: “Finally, this statement does not make sense:…”
Actually CoRev, we do not disagree on what is easier or harder. I agree that raising taxes is the bigger challenge, not only arithmetically but also politically. Nobody wants to try. It’s relatively easier politically to cut spending as a percent of GDP by one-fifth as GDP rises–some spending cuts, spending freezes, and/or limits on annual spending growth. It’s going to be more difficult politically to raise taxes as a percent of GDP by one-third as GDP rises. Some angry bears here boldly propose raising FICA tax rates. Good start indeed, but a small one for anybody seriously taking a unified budget perspective. For them it should be about the revenue streams that are supposed to fund the remainder of the budget, to include paying debts as required, defense, medicare, medicaid, yada yada yada.
Re the stimulus, I agree, some of that spending will disappear, but remember that much of the stimulus has been in the form of supposedly temporary tax cuts (extending Bush’s cuts and adding Obama’s cuts). Easy prediction: future fights over extending those tax cuts.
CoRev,
CBO and CRS are humbug factories. GAO is nealry a humbug accounting office/agency, so the A needs changed.
I read every GAO report on the horrors of DoD acquisition and soft soaping is the only description of their review for an unaccountable waste factory.
You need to give some support to the hypothesis that CBO does decent research and support their crystal ball supporting Boehners claim the US is broke……………….
US might be broke but SS trust fund has $2.4T in US notes whicvh Boehner wants to welch on so he can keep military madness pillaging the US.
Being “an inprincipled liar……………….” is the price of entry to the US capitol building.
Ben Franklin’s observation about the American republic “if you can keep it………”
Well, it was not kept.
After Friday the folks in Egypt are better off politically than Americans.
cob,
It ain’t fund the army and the navy it is finance an insane militarism for paying war profiteers.
See the replacement for the Ohio class sub, it will eat about $10B a year on average for the next 30 or so while the “enemy” Russian whole war budget runs about 40B…………
The US militarists have plundered the economy, borrowed money for junk weapons money which should have been used for producing things humans need.
The pillaging of the US is why the liars in Bohener’s party want to welch on SS.
It will always be empire, war profiteers and militarism at the expense of humanity.
We have always been at war with someone but the casualties are you and me.
Granma gets cat food so Adm Roughhead can get a dozen new Boomers with 87″ tubes, meaning a new generation of Tridents too.
War……………………………….
ILSM need a reference for all that Boehner ranting.
Gizzard, and you think we can not run out of money? What happens if/when those buying our treasuries stop, or bid them so low to make them too costly for us? What happens with the interest paid if/when either or both happens? Printing presses aren’t going to help except to cause the inevitable hyper-inflation.
I’m just not willing to risk that if/when scenario. Too many are now saying it could happen in the very near future without getting our budget/deficit under control.
When the budget arrives it will propose spending 20% of the total for militarism, roughly the same for social security, the military planned outlays being twice the planned outlays for medicare.
The country is going broke because SS is not providing cash for the war machine.
SS will need to cash a few tens of billions of its special treasuries, while the war machine is fueling borrowing to the tune of $850B.
So, SS is borke………………………………
You can all the people some of the time, the rest requires Rupert Murdoch.
PJR, we now appear to be in violent agreement. The next few months are going to be interesting watching the posturing and demagogueing in DC.
CoRev,
Boehner was interviewed on either CNN or MSNBC I was flipping around, this AM I was in a hotel drinking coffee when he said those exact words. Coffee did not spew around the room, fortunately.
Pure unmitigated disinformation, from the speaker of the house.
I am finding more positive proof that a republican must be a liar to get to vote in the capitol building.
The US is broke because SS and medicare are cashing a few billion in special treasuries rather than cashing out the empire.
Not a word from anyone about trouble outside of SS and Medi’s!!!
ILSM, you got most of it correct, but who here at AB says” SS is broke?
I just did a somewhat thorough (and thoroughly abusive) analysis of the bull shit in the 2002 CBO article. It’s on my blog, with an invitation for comments.
http://jazzbumpa.blogspot.com/2011/02/social-security-trust-fund.html
CoRev won’t go there, even though he’s welcome. If anyone can point out errors in my thought process, I’d consider it a big favor.
Cheers!
JzB
CoRev –
The graphs are tiny and unreadable. What is your source?
ILSM, I found it. As I said, let the party begin. His repsonse was juxtaposed with Obama’s Budget Dir’s comment of cutting the deficit in 1/2 by 2012 in a budget targeted to cut the deficit by $1.1T in 10 years. Some math doesn’t add up. One hyperbolic comment trumping the other. Gonna be fun to watch!
Are we passt the Shorter name calling now? Sorry, I don’t remember the source. Should have provided it in my comment.
When I click on the graphs they expand. Does yours? Also, won’t your browser expand text with the Ctl+ key combo?
Let’s not forget that deficit/GDP is higher because GDP is lower. GDP growth wss negative for the greatest part of 2 years,a dnis still far below the previous trend line. There’s always this damned problem with ratios . . .
And always more of my self-refering, self-agranzing abuse.
http://jazzbumpa.blogspot.com/2010/10/us-economy-is-dying.html
Cheers!
JzB
Are we past the Shorter name calling now? Sorry, I don’t remember the source. Should have provided it in my comment.
When I click on the graphs they expand. Does yours? Also, won’t your browser expand text with the Ctl+ key combo?
Here’s what I found from ths source message on the bottome of the graphs: “Source OMB ….WWW.whitehouse.gov/omb/budget/Historicals (April 27, 2010)… Histoirical Tables Table 1.1…
Dunno if that gets the charts, but it’s about the best I can do.
Sammy –
That’s the thing, we have to make choices. Go ahead and make up your plan that leaves SS untouched. Make the cuts or tax increases where you think they should be.
Cut – Military. Without examining it in detail, I don’t have a detailed proposal or an amount. But we spend more than the next whatever conties on the loist combined, much of it goes to wastful program the military does not want or need. Are we still employing mercinaries in foreign lands at at least 3x what it coss to have the military do the job? Stop that stuff. Stop being the world’s policeman. This is worth multi-trillions.
Taxes – take the ceiling off FICA. Raise income taxes at least back to Reagan levels, but with steep progressivilty. Reagan had the top rate kick in at a little over $30K. That’s insane. Clinton corrected that, at least – and balanced the budget. Hmmmmm. Between FICA, and income tax, we are very close to a flat tax situation in this country.
To have any kind of a shot at equal opportunity, a society needs progressive taxation. If you dobt that, just take a look at what has happened here over thlast 30 years.
The Bush tax cuts were ruinous, and I think deliberately so. B. Hoover Obama has only made it worse.
Contra this I challenged Bruce and coberly to do this, but they refuse to deal with “liars.”
I doubt that any of what I said here is new. You need to keep in mind the long history of posts here and not think in a vacuum.
Cheers!
JzB
“I will have paid several hundred thousand into the system that I won’t recieve as benefits.”
Go take a look at the form the SSA sends you each year. It is nowhere near that high.
Another little reported, and potentially monumental, change in the energy issue is quickly unfolding. Low cost hydrocarbons appear ready to trump “alternative Green” energy sources. Shale gas, is being found and quickly developed all over the world. All through Western Europe, the scandinavial countries, South America, obviously in the US and Canada new deposits are being discovered. Moreover, drilling/fracking is quickly being approved.
Here’s just one example:
UK Government Encourages Transparent Shale Gas Exploration
From here: http://www.thegwpf.org/uk-news/2431-uk-government-encourages-transparent-shale-gas-exploration.html
The take aways from the article is this: “Offshore shale gas industry could make UK self-sufficient in gas again.”
but also includes this: “Shale gas operators pump fluids into wells to open up cracks in source rocks and stimulate gas flow. In the US, there has been considerable controversy in recent years over the possible environmental impact of chemicals used in the fracking process and whether they could contaminate water supplies….”
The environmentalist will have some traction here in the UD as there is plenty of easier to produce gas deposits. But, in many part sof the world reliant on foreign sources, the politics of carbon indpendence will over ride the environmental concerns until proven to be other than the wisest approach.
Arne
if he’s earning at the cap, he will have paid as much as 480 thousand into the system after forty years. thing is, he will get about 520 thousand out of it, and that’s real dollars. (i’d have to go back and check, but i think it’s not only “real” dollars — inflation adjusted — it is also wage adjusted, meaning his effective interest would be more like 5% compounded. not great, but not bad, and with the insurance security… priceless.)
of course if he has a stroke, or whatever he does for a living becomes obsolete, he could end up getting a lot more out of it that he puts in.
Sammy:
I will have paid several hundred thousand into the system that I won’t recieve as benefits.
For someone who started paying the maximum in 1968 and did so until the end of 2010, the total contribution from employer and employee would be $258679.78.
You could expect that amount to be paid back to you over 12 or so years of retirement, if you go out at 62.
I really don’t know why you don’t think it will be there for you – unless you side with the kleptocrats who want to take it away.
Cheers!
JzB
Arne, you forget there are many, many self employed. Calculate ~30 years at upper limit wage rates, and see where you end.
So I ask once again that never answered question concerning the SS Trust Fund. If the Trust Fund Treasuries are subject to cancellation what is it that protects the sanctity of all other debt instruments issued by the Treasury? Another yet to be ansewered question. If SS benefits are covered by FICA cash flow and supplemented by Trust Fund income, what is the benefit of reducing benefits? Is there some expectation that FICA revenues may be diverted to cover general budget deficiencies? That would be illegal based upon current legislation. Also, the point about the fallacy of the unified budget is documented in the SS administration’s own documents. Here is one samll section of the description given regarding the Trust Fud:
“Since the assets in the Social Security trust funds consists of Treasury securities, this means that the taxes collected under the Social Security payroll tax are in effect being lent to the federal government to be expended for whatever present purposes the government requires. In this indirect sense, one could say that the Social Security trust funds are being spent for non-Social Security purposes. However, all this really means is that the trust funds hold their assets in the form of Treasury securities.
These financing procedures have not changed in any fundamental way since payroll taxes were first collected in 1937. What has changed, however, is the accounting procedures used in federal budgeting when it comes to the Social Security Trust Funds.”
http://www.ssa.gov/history/BudgetTreatment.html
There have been repeated attempts by various administrations and Congresses to foster the idea that FICA are just another tax. And all revenues are up for grabs. The result remains the same. There is no unified budget. The Treasury has lots of outstanding debt instruments. If Trust Fund Treasuries are subject to cancelation so too are any others.
Jzb,
Upthread you linked to David Walker to the effect:
In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt,
This excludes the Special Treasuries. So if the Special Treasuries are to definitely be repaid, like Regular Treasuries, the correct figure is the 90+%. If on the other hand they are not to be repaid, you can use the 63% figure. But you can’t have it both ways.
Jack,
So I ask once again that never answered question concerning the SS Trust Fund. If the Trust Fund Treasuries are subject to cancellation what is it that protects the sanctity of all other debt instruments issued by the Treasury?
A debt owed to oneself is entirely different legally, financially, and morally. If you default on a debt to yourself, you are both the injured party and the beneficiary, therefore there is no cause of action.
Everyone recognizes this, which is why if the Special Treasuries were nullified, there would be a rally in the other debt types, because a large potential liability would be erased.
What protects the sanctity of the other debt instruments is self interest. If the US were to default on an interparty debt, they would find far fewer lenders at much higher interest rates.
Jzb,
Upthread you linked to David Walker to the effect:
In relation to GDP, it is only a bit over half of what it was in 1946. And to give more credit, the number Walker used, 63 percent, refers to debt held by the public, which is the correct construct — not the 90+ percent figure for gross debt,
The Walker analysis excludes the Special Treasuries. So if the Special Treasuries are to definitely be repaid, like Regular Treasuries, the correct figure is the 90+%. If on the other hand they are not to be repaid, you can use the 63% figure. But you can’t have it both ways.
Also, what drove the debt to high levels was WWII. WWII ended. What is driving the current debt is entitlements. The entitlement are not ending, they are growing.
jzB,
Good try. Let’s do some math. Do you propose eliminating the entire defense department? That is about 20% of the Budget. So instead of spending $3.7T we will spend approx $3T. Then you’ve got some tax hikes, let’s say they add 10% to tax revenues, so instead of $2.2T you get $2.45T So we have about a $.5T deficit. Pretty good!
Of course eliminating our entire National Defense could have some drastic consequences.
sammy
the debt is not owed to “oneself.” the debt is owed by the government to the social security trust fund. these are legally distinct entities. you might read the ssa quote jack provided and ask yourself why if the money is owed to oneself, they go to all the trouble to account for it and call it “lent TO the federal government.”
something bad happened to your brain. this has been explained to you many times, yet you keep coming back to it as if we had never heard it before. really, you might disagree with us, but how stupid is it to keep telling us what we have told you we disagree with.
no. what is driving the current debt is the wars and the stimulus and the tax cuts.
social security pays for itself and has no effect on the debt. medicare should be the same way, but the politicians have been “fixing” it, to turn it into welfare so they can kill it.
there is no reason the people can’t pay for their own medical insurance via medicare. they’d have to understand the the high costs are either the result of a criminal health industry or that the high costs are just the costs of medical care that enable them to live longer. in the first case they might demand the government regulate the health industry… fairly easy to do if medicare is paying the bills. in the second case they would just have to make up their mind that they’d rather live a longer healthier life than spend that money in Vegas.
There is an interesting U of Maryland academic study of choices that people would make, or not make, if asked to try balance the budget. At http://www.worldpublicopinion.org/pipa/pdf/feb11/Budget_Feb11_rpt.pdf. A quote on page 42 just for Bruce and Coberly: “Raising the Social Security payroll tax 1 percentage point over 20 years was seen as acceptable by 45%, and as at least tolerable by 85%.” (The presented option would raise it in equal increments annually up to 7.2 percent on the employee and employer.) But you can read the whole thing.
coberly,
Jack asked a question, and added “again.” I assumed it wasn’t rhetorical. Just because you don’t agree with my answer doesn’t make it wrong. You have your opinion of the sanctity of the Special Treasuries, I have mine. Yours is based on the current law, and so you are currently correct. Mine is based on the fact that Congress can change the rules at any time, and so may, or may not, be proven correct. We’ll see.
coberly,
Jack asked a question, and added “again.” I assumed it wasn’t rhetorical. Just because you don’t agree with my answer doesn’t make it wrong.
You have your opinion of the sanctity of the Special Treasuries, I have mine. Yours is based on the current law, and so you are currently correct. Mine is based on the fact that Congress can change the rules at any time, has considerable incentive to do so, and with virtually no downside.
I may, or may not, be proven correct. We’ll see.
sammy
that is pretty close to rational. i may even agree with you. the point i am desperately trying to make is that if people understand how social security works they won’t let the congress take it away from them.
i never said congress was good guys.
pjr
thanks. i think i have read the whole thing or something similar. i keep trying to get congress to pay attention to that fact… that people are willing to tax themselves more.
we could raise the tax one half of one tenth of one percent per year and if at some time it becomes “an intolerable burden” we could do something else then.
but no one in power wants to hear that.
i general i don’t put much stock in polls because people are pretty ignorant and easily panicked by numbers they don’t understand. but if you have a population that thinks it can tolerate a half a tenth of a percent raise per year, i take that as a good sign that the politics won’t bite you if you try it.
and twenty years later i bet if you asked the same question you’d get the same answer.
i never said congress was good guys.
Coberly, be aware that you are being very egocentric in your judgement of morality. By insisting on zero change in Social Security, you would be very likely forcing cuts in other social programs. Those beneficiaries would have an entirely different opinion of your morality.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected many of the readers to come unglued. Sounds to me that many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for that discussion.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected many of the readers to come unglued. Sounds like many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for that discussion.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected some to come unglued. Sounds like many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for that discussion.
I find it interesting that none of the readers of this thread are howling about the Continuing Resolution. I expected some to come unglued. Sounds like many readers haven’t taken the opportunity to open up the above link and note the sublinks.
We should be in for a wild week as the Congress, news media, and others discuss the details of the Continuing Resolution, H.R. 1, and the President’s budget submission. Hopefully, Angry Bear won’t sit on its hands and fail to discuss these activities in main posts. If nothing else, the blog should offer a few extra open threads to allow for those discussions.
CoRev, I agree with you. This week will be a wild one. Sparks should fly.
Here’s another explanation of how Social Security finances impact the federal budget. Those who want to deny that Social Security finances have any relationship with the federal budget will have to figure out a way to dismiss the facts provided in the first paragraph below:
Kansas City Fed, 2006:
“Fourth, Social Security finances affect the government’s overall budget deficit because Social Security taxes are paid to the U.S. Treasury and benefits are paid by the U.S. Treasury. Currently, Social Security tax revenues are $67.1 billion greater than Social Security expenditures. This difference represents real resources withdrawn from the public by taxation over and above the real resources given back to the public in the form of benefits. According to the books of the U.S. Government, Social Security is providing $67.1 billion of net revenue. The government’s overall budget deficit in calendar year 2004 was $401 billion. Were it not for Social Security, the government’s budget deficit would have been $468 billion.”
“Over the next decade or so, Social Security will be in sound fiscal shape, as dedicated revenues will more than pay for promised expenditures, even as expenditures rise. Moreover, since dedicated Social Security revenues paid to the Treasury Department are currently greater than expenditures paid by the Treasury Department for benefits, the difference help reduce the federal budget deficit. …But when Social Security’s dedicated revenues fall below promised benefits, the government must draw on other revenues sources to help pay for benefits. In other words, with no changes in other government spending or revenue, the government total budget deficit will grow.”
“…Beginning in 2017, and continuing throughout the forecast horizon, promised expenditures are greater than dedicated revenues. As a result, the government will have to begin drawing on other real resources from the public to pay for the Social Security benefits going to beneficiaries. In other words, Social Security will be running a [cashflow] deficit that must be financed by the federal government in one of three ways: reduce other federal spending, increase other sources of revenue, or borrow more from the public (by running a larger budget deficit). This shortfall is represented in Chart 1 by the vertical distance labeled “U.S. Government revenues to SS.””
Chart 1 is on pdf page 9. The source for the chart: Table VI.F4 and Table VI.F8, 2005 Social Security Trustees Report. The chart is worth a look as it is labeled extensively.
Social Security and Medicare: The Impending Fiscal Challenge
Economic Review, First Quarter 2006
Federal Reserve Bank of Kansas City
http://www.kansascityfed.org/Publicat/econrev/PDF/1q06hakk.pdf
Here’s another explanation of how Social Security finances impact the federal budget. Those who want to deny that Social Security finances have any relationship with the federal budget will have to figure out a way to dismiss the facts provided in the first paragraph below and the subsequent opinions regarding what happens when the Social Security OASDI cashflow is negative, as is the case right now. Again, this is straightforward informaton about how the Federal budgeting process works.
Kansas City Fed, 2006:
“Fourth, Social Security finances affect the government’s overall budget deficit because Social Security taxes are paid to the U.S. Treasury and benefits are paid by the U.S. Treasury. Currently, Social Security tax revenues are $67.1 billion greater than Social Security expenditures. This difference represents real resources withdrawn from the public by taxation over and above the real resources given back to the public in the form of benefits. According to the books of the U.S. Government, Social Security is providing $67.1 billion of net revenue. The government’s overall budget deficit in calendar year 2004 was $401 billion. Were it not for Social Security, the government’s budget deficit would have been $468 billion.”
“Over the next decade or so, Social Security will be in sound fiscal shape, as dedicated revenues will more than pay for promised expenditures, even as expenditures rise. Moreover, since dedicated Social Security revenues paid to the Treasury Department are currently greater than expenditures paid by the Treasury Department for benefits, the difference help reduce the federal budget deficit. …But when Social Security’s dedicated revenues fall below promised benefits, the government must draw on other revenues sources to help pay for benefits. In other words, with no changes in other government spending or revenue, the government total budget deficit will grow.”
“…Beginning in 2017, and continuing throughout the forecast horizon, promised expenditures are greater than dedicated revenues. As a result, the government will have to begin drawing on other real resources from the public to pay for the Social Security benefits going to beneficiaries. In other words, Social Security will be running a [cashflow] deficit that must be financed by the federal government in one of three ways: reduce other federal spending, increase other sources of revenue, or borrow more from the public (by running a larger budget deficit). This shortfall is represented in Chart 1 by the vertical distance labeled “U.S. Government revenues to SS.””
Chart 1 is on pdf page 9. The source for the chart: Table VI.F4 and Table VI.F8, 2005 Social Security Trustees Report. The chart is worth a look as it is labeled extensively.
Social Security and Medicare: The Impending Fiscal Challenge
Economic Review, First Quarter 2006
Federal Reserve Bank of Kansas City
http://www.kansascityfed.org/Publicat/econrev/PDF/1q06hakk.pdf
“What happens if/when those buying our treasuries stop, or bid them so low to make them too costly for us? “
Boy you really have the talkingpoints down dont you?
The answer is SO WHAT. We dont need anyone else buying the treasuries in order to spend. The spending happens first already and the bond sale second. If someone wouldrather have cash then an interest bearing bond so be it, it actually saves us money to not pay interest on our spending.
Hyperinflation is NOT a bond market driven phenomena in a sovereign currency, only in currencies that are pegged to a commodity or another currency. Look at Japan the last 20 years, the hyperinflationistas have been calling for collapse for almost 10 years and the only thing that collapses is their GDP form time to time (like when they decide to try and balance budgets)
Stop listening to Beck and Ron Paul and actually try and understand how different currency regimes operate. Your blood pressure will come down noticeably when you dont fear imminent collapse of your currency every week.
PJR, and thus defines the political conumdrum of all progams in normal times. They all build pro/con constituencies which then influence Congress to expand/protect/cut/eliminate their “pet” progam(s).
The question here and in many (perhaps a majority) voters’ minds are these normal times?
No one claims there is no relationship between SS and general funds. Hoenig’s fed has a point of view.
Dan, a fascinating point: “Hoenig’s fed has a point of view.” As does the CBO, the president’s deficit commission, the Congress, the president, Treasury, OMB, and the majorfity of voters which is consistently, we have a problem with entitlement spending in the current budgets.
As you, Buff, I, PJR and many others have pointed out, fixing it is all about political will. Interesting times, no? Tectonic shift or minor subsidence, only time will tell.
Dan, a fascinating point: “Hoenig’s fed has a point of view.” As does the CBO, the president’s deficit commission, the Congress, the president, Treasury, OMB, and the majority of voters which consistently is, we have a problem with entitlement spending in the current budgets.
As you, Buff, I, PJR and many others have pointed out, fixing it is all about political will. Interesting times, no? Tectonic shift or minor coastal subsidence, only time will measure the enitlements’ sea change.
—- Let the Games Begin
CBO announced the 2011 deficit estimates to be $1.48T, but the 2012 estimates them to be $1.65T so are we looking at the core of the Obama average annual savings of $.11T? See how he has already cut the budget by $60B more than expected? Wow!!!
Nobody has made that claim yet, but… Remember it is all funny money, comparing what ifs?
sammy
i thought we had finally understood each other, but looks like not.
Social Security takes NOTHING for any other government program, social or not. The only thing Social Security takes money from is the eventual benefciary… and he gets it back.
There seem to me only two options: either you plan never to retire, so you don’t need to save for retirement, or you plan to get rich so you don’t need Social Security. Neither of these are good bets. What Social Security does is keep you from having to take handouts from others when you need to retire.
MG
this looks like it was copied from the same book as the CBO brief you offered earlier. It relies on the same fallacies. The treasury is the government office that takes in and disburses money. That does not mean that the money becomes fungible when it comes in the door. There is still a legal distinction between money collected under the Federal Insurance Contribution Act and other taxes.
The other fallacy is that because the government will have to find the money to repay the money it has borrowed from Social Security, that Social Security is putting a strain on the government. This is a lie. The strain comes from having to repay money it borrowed. If I borrowed money from you, you wouldn’t want to listen to me complain about the strain that repaying you would put on my finances.
Again, just because someone “official” says it, that doesn’t make it true. And you need to learn to tell opinion or propaganda from fact, even legal fact.
CoRev
not quite. The money owed to Social Security is a legal debt. You don’t get to say it’s just a matter of political opinion.
Of course, politics can change the law and the law can change what happens. But there is a huge difference between saying the law CAN change, and the law SHOULD change.
It spite of your occasional denials, you are arguing that the law Should change. It should not. IT would be stealing from the people who paid their Federal Insurance Contributions. Worse, it would be depriving them of a way to save their own money protected from inflation and market losses.
Very harmful to them. Almost certainly harmful to even the people who think they don’t need it.
Logic Dale, logic! “The other fallacy is that because the government will have to find the money to repay the money it has borrowed from Social Security, that Social Security is putting a strain on the government. This is a lie. The strain comes from having to repay money it borrowed.”
—- Let the Games Begin
CBO announced the 2011 deficit estimates to be $1.48T, but the 2012 Obama budget estimates it to be $1.65T. See how he has already cut the budget by $.17T, $60B more than expected? Wow!!!
Nobody has made that claim yet, but… Remember it is all funny money, comparing what ifs?
MG, Chart 1 is already out of date. This 2006 Report projected cross over of revenue to expenditres in 2017, but as I remember it, it actually occurred in 2010 to the amount of ~$45B. So we can assume the bulk of that ~$45B was borrowed and added to the deficit.
Cue Dale in 1… 2… 3…
Dale,
Social Security takes NOTHING fromrany other government program, social or not.
Take it up with the CBO:
To focus policy on the segregation of Social Security and other trust funds ignores the significant linkages that exist between them and the rest of the budget. The level of Social Security benefits directly affects spending under the means-tested Supplemental Security Income and Food Stamp programs. Payroll taxes on employers reduce income tax collections….
coberly,
Coming to this late.
But how the Federal government pays the $45B it owes to the SS fund this year is a political question. The general fund has to cover that debt somehow, and that line item is just another expense to the general budget. Admittedly its not much money and shouldn’t be an issue in a perfect world.
But its not a perfect world and the numbers clearly show congress is grasping at anything to lower Obama’s huge debt. As we saw with Obamacare lines can be buried in huge legislation that “must be passed so we can find out what’s in it.” If I was looking for a trheat to SS it would be something buried in some ominbus spending bill thats to big to read. One line on page 1,234 of 2,346 pages of some bill could remove the SS cap for example. I don’t think a stand-alone bill will directly attack SS. I expect it to be nibbled to death, by Democrats and Obama.
Islam will change
Well, well, well I was tromping around the Monthly Treasury Statement site and found the latest numbers which say my memory is incorrect. It appears that there is actually a surplus. That’s great news. URL: http://www.fms.treas.gov/mts/index.html
But they also pointed to another GAO site for official defintions (A Glossary). In it I found this:
Receipts Collections from the public based on the government’s exercise of its sovereign powers, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, and deposits of earnings by the Federal Reserve System. Total receipts are compared with total outlays in calculating the deficit or surplus.
Some how all of this sounds familiar. In this thread now we have a CBO document, a Kansas City Fed Report, the MTS report, and the “Official Glossay of Terms” defined by GAO and used by … well everybody, but the SS “Wagon Circulars.”
I provide this information, not to embarrass anyone, nor more importantly to propose cuts to SS, but to show just how much misunderstanding there actually is.
Cue Dale in 1… 2… 3…
Well, well, well I was tromping around the Monthly Treasury Statement site and found the latest numbers which say my memory is incorrect. It appears that there is actually a surplus. That’s great news. URL: http://www.fms.treas.gov/mts/index.html
But they also pointed to another GAO site for official defintions (A Glossary). In it I found this:
Receipts Collections from the public based on the government’s exercise of its sovereign powers, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, and deposits of earnings by the Federal Reserve System. Total receipts are compared with total outlays in calculating the deficit or surplus. URL: http://www.gao.gov/special.pubs/longterm/deficit/glossary.html
Some how all of this sounds familiar. In this thread now we have a CBO document, a Kansas City Fed Report, the MTS report, and the “Official Glossay of Terms” defined by GAO and used by … well everybody, but the SS “Wagon Circulars.”
I provide this information, not to embarrass anyone, nor more importantly to propose cuts to SS, but to show just how much misunderstanding there actually is.
Also tromping around that ole GAO Glossary page I found this:
“Off-Budget
Those budgetary accounts (either federal or trust funds) designated by law as excluded from budget totals. As of the date of this glossary, the revenues and outlays of the two Social Security trust funds (the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund) and the transactions of the Postal Service are the only off-budget accounts. The budget documents routinely report the on-budget and off-budget amounts separately and then add them together to arrive at the consolidated government totals. (See also Nonbudgetary; On-Budget; Outlay;”
But, why would anyone be confused? It clearly says: “… trust funds) designated by law as excluded from budget totals….” then goes on to define reality with:
“… The budget documents routinely report the on-budget and off-budget amounts separately and then add them together to arrive at the consolidated government totals.“
So this confirms the CBO comment about them not being separate.
Cue Dale 1… 2… 3…
Point of Order!!!!! Every debt holder of US securities draws from the available cash resources of the Treasury. Again I ask, why are Trust Fund securities no more sacrosanct than are any other Treasury debt? Sammy: “Because they can!!” Are you nuts. You stand there with a horde of Treasuries and watch the Congress cancel the Trust Fund securities and tell me that you don’t quake in your shjoes awaiting the second Congressional shoe to drop on all other Treasury securities. I’m all in favor of canceling all Treasury notes held by any private entity. How is that different?
Jack, how many times does Sammy have to answer this?
Sammy suggests that there is no serious consequence to the Congress simply canceling the Trust Fund Treasury notes. An interesting concept that appears to be supported by CoRev. It’s getting difficult to determine who, between the two of them, is the dummy and who is the ventriloquist.
Sammy,
You are the fool that Coberly continuously recognizes as such. Welch on one debt and your other debtors will celebrate. So much for the “full faith and credit of the US government.” I can’t wait to see the look on the faces of all the T-Baggers over 50 when Boehner and his cronies begin “messin’ with their retirement.” Remember, “Keep your government hands off of my Medicare.” If so many other wouldn’t suffer the consequence it would be a pretty sight to see our red state friends, including their cohorts in the blue states, lose both Medicare and Sociaql Security benefits. Who do you suppose actually wants those programs to be defunded or in any other way reduced? Try to remember that the average income of Americans, while better than most other nationals, is still not much more than $40,000-$50,000, if that. How much health care and retirement are those folks going to be able to afford without Social Security and Medicare. I guess we’ll then have to start looking for more revenue or other programs to cut. Note that the only other spending of consequence is the military. Or why not just defund every public educational system. Public education has obviously been a huge waste of money, especially in those red states and for those red necks, north and south of Dixie.
Jack, I realize you are having difficulty arguing the point(s) so must rely on sarcasm and misrepresentations of Sammy’s answer. The appropriate response would have been to copy and paste that specifc portion of Sammy’s comment with which you disagree, and then make your point to the comment.
Get a grip and stop the rants.
Both you and Sammy have repeated yourselves enough times as to make it unnecessary for yet another repetition of the bogus idea in order to criticize that idea. He’s said it and so too have you, that the Social Security Trust Fund is made up of “just so many IOUs” and that the Congress can, in effect, retire that debt at will without repayment. You’ve both used a variety of differrent words to express that same idea. You are both pitching an idiotic idea which would certainly impact the view of all other holders of US Treasury debt.
The more subtle approach to the same end would be for Sammy to suggest simply cutting back on benefits. This is where the idea begins to approach your own more deceiptful approach. By cutting benefits to future, and maybe even present, social security recipients it becomes more likely that only FICA receipts will be needed to pay all benefits making it unnecessary for the Trust Fund to be tapped. In that manner the Trust Fund securities merely sit there as a fund that need not be drawn from and whose assets debtors (the US Treasury) need not pay principle on its debt. The result is the same, just a back door approach. Will the next suggestion be to cut benefits down to a point where by the FICA revenues will be in excess of benefit demand and, therefore, yet more FICA receipts will be made available to supplement the budget deficit? In any event its an effort to divert FICA revenues, either those paid as excess in the past or those that may be created, to the general budget fund and thereby reduce the impact of the deficit.
Jack,
Are you that much of an idiot?
Congress can with a stroke of the pen up the FICA tax by 3% (or whatever the number is) and make the FICA inputs cover the outputs in SS and NEVER pay one cent of the SS trust fund back. Just let that $2.5 Trillion sit on the books, gaining interest, and never ever redeem a penny. Problem solved by raising taxes.
And Congress never retires the debt nor ever repays it. It just sits as an accounting exercise.
Is it that tough to understand?
BTW, yes it would be wrong, but when as morality or ‘wrongness’ ever walked the halls of Congress?
Islam will change
So now we’re into speculative hypotheticals. Yes, where the Congress is concerned anything is possible. I’d like nothing more to see the T-Bagger response to another 3% raise to the FICA. Better yet, while we’re speculating maybe they could raise both employer and employee by three percent. A little extra FICA revenue would put income over out flow and the Trust Fund will grow yet bigger. Of course now we’re into the realm of totally irresponsible governance. Why stop there? Following the FICA increase that you suggest is possible maybe the voters will revolt in a figurative way and vote out the scum they voted in. Maybe then we’ll get 1950s era tax rates with no loop holes. Who knows what the Congress might do. The point is, Buff, that speculation is just that, a lot of self satisfying prognostication.
Jack is your reading comprehension that bad. Find the quotes for Sammy and I where either proposed what you suggest, where it was not in response to one of your own hypothetical questions.
Please stop arguing with your own assertion of what you think we said. If we said it, quote it.
“Find the quotes for Sammy and I where either proposed what you suggest, where it was not in response to one of your own hypothetical questions.”
Why would it change the content of your comments if they are made in response to another’s comment? Don’t your comments represent your own thoughts? And does the meaning of your ideas change with the stimuli that provoked those ideas?
That’s what I thought.
No CoRev, the point is that you didn’t think it through. You use that same tactic in every thread that you seek to dominate. You’re criticized for some repeated theme and then you insist that the entire theme be repeated by the critic as evidence of its occurrence. A lie twice told is no closer to the truth.