Super-Congress wants to have its cake and eat it too
by Linda Beale
Super-Congress wants to have its cake and eat it too
So the Democrats and Republicans on the so-called “Super-Committee” that is supposed to find $1.2 trillion in budget reductions/increased revenues within a week now thinks it has a solution–let the regular tax committees (Finance and Ways & Means) come up with the tax revenues, while the Super-Committee will go on and specify the spending cuts. See Deficit Panel Seeks to Defer Details on Raising Taxes, New York Times (Nov. 14, 2011).
The proposal doesn’t sound like anything that the Dems on the panel should accept. For a piddling reduction in some of the deductions available to the most affluent individuals, the GOP is willing to lower the rate on those individuals to 28%! Just more enriching the rich. The Dems shouldn’t agree to that. Especially since Grover Norquist thinks that any such agreement would be undone immediately, while any stupid agreement the Dems make to “reforming” (i.e., cutting benefits from) the earned benefits programs will be allowed to take place.
Grover G. Norquist, the president of Americans for Tax Reform, whose antitax pledge has been signed by most Republicans in Congress, said in an interview, “I am not losing any sleep” over the Republicans’ latest proposal. Mr. Norquist said he was confident that, “at the end of the day, the Republican House will not pass a tax increase.”
“As a face-saving measure,” Mr. Norquist said, the deficit reduction panel “could give lots of instructions to the tax-writing committees.” In complying with those instructions, he said, the House and the Senate could pass very different bills. Id.
It is hard to see why any cuts to the earned benefits programs should be made. Social Security, Medicare and Medicaid are more important now than ever because of the weak economy. We are a rich country and we can afford these programs.Tax 100% of compensation for Social Security. And treat all profits interests as compensation income when allocations are received, so that partnerships treat persons as partners only when they have a capital investment in the partnership business.
Let the military be cut at least $750 billion. And raise the rest through taxes–especially through a progressive estate tax and through eliminating the character preference for capital gains income.
This country is tired of being held hostage by far-right radicals who don’t understand that the government acts for the people and who don’t give a damn for anybody that isn’t in the top 20% of the income and wealth distribution. We are tired of the radical right’s anarchistic actions to prevent the government from borrowing money to carry out important programs. We are tired of the radical right’s stupidity about the economy and its reliance on ideological beliefs in “trickle down” programs to justify tax cuts no matter what situation the country is in. We are tired of the radical right’s refusal to acknowledge the facts about the failures of the four-decade experiment with reaganomics, during which time the large multinational corporations have been allowed to function like quasi-sovereigns. We are tired of seeing tax policies that support consolidation of corporate empires and movement of business overseas, while Americans lose jobs and watch their wages decline.
originally published at ataxingmatter
except that we don’t need the rich to pay for Social Security. the workers can pay for their own social security, as they always have, by raising their own tax by forty cents per week each year.
it would be a hell of a lot easier to fight the stupid greed on the right if we didn’t have stupid greed on the left suggesting policy fixes that play into the right’s agenda.
when you turn Social Security into welfare, you turn it over to the rich.
it’s bad enough that Peterson has been lying about it all these years. now the left wants to make everything Peterson said about it true.
heh heh. here is a joke for you.
social Security is already dead. it was killed by Barak Obama who cut the payroll tax and is now bragging that the Republicans won’t dare restore the payroll tax and “raise taxes on the middle class.”
that means that neither will the Democrats. so now social security is being funded by the deficit.
that was always a lie before. but the democrats have made it a true.
As I read it, what Republicans on the committee who are willing to (seem to) consider tax increases are offering is specific spending cuts, including to entitlement programs, in return for future, unspecified tax increases. The future, unspecified tax increases would be left to the legislative committees which previously failed to write tax increase legislation, in the same way that congressional spending committees failed to find a way to cut spending. The reason a “super committee” was devised was to get past the failure of the normal legislatiive process to reduce the deficit. So the super committee now wants to turn the tax-hiking part of the deal, but not the spending-reducing part of the deal, back over the the failed legislative mechanism.
The Super Committee was the dumbest idea to come out of Washington in a long time, and DC is a torrent of dumb ideas.
Guaranteed to fail.
Well I disagree with something you said Linda–I think that is a first. Specifically, the idea of taxing all compensation to solve any long term shortfall in social security. My reasoning is that it only cures the shortfall if social security ends up paying out less to the high income earners than they put in. While I have no particular problem with that, it does transform an insurance/savings program into at least in part an income redistribiution scheme. That will continue to fuel the right’s attacks long after we have departed from the scene. I think that we get out of Afgahnistan poste haste, stay out of other trouble spots in the world, take a long hard look at the new weapons systems, let all of Dumbya’s tax cuts to expire, take another look at a single payer health care system or at least the government option–Medicare for all–and then see where we are on the debt/deficit. Certainly, I think there has to be an increase in revenues weighted toward those with larger incomes, we must continue to look at ways to bend the curve on health care costs and we can not be engaged in perpetual war unless we are paying for it as we go.
Is it absolutely clear that high earners, as a group, would pay in more than they get out? As a group, they live longer, and so are likely to get more out than other groups. We’ve been told that groups with the shortest life expectancy (low-income black males, for instance) probably get a raw deal. I suspect you are right, but if we are going to marshal facts for a debate, we need to make sure they are facts.
without knowing exactly how it would be structured it’simpossible to say “it’s absolutely clear.”
currently the very highest earners get back more or less exactly what they pay in, adjusted for inflation and average increase in wages (i.e. they get about a 2% real rate of return). since they know they could get a higher return in other investments they have to rationalize the difference as a cost of insurance… or maybe their contribution to a society that makes it possible for them to get rich.
raising the cap much higher than it is would almost certainly make that rationalization more tenuous than it is.
and all this to save yourself forty cents per week?
yes, that’s per year. and yes it does add up. but it never adds up to much. it is about one twentieth of expected increases in real wages. and you get it back when you need it most. with interest.
since “the left” can’t get the cap raised anyway, it’s just something else they talk about to make themselves feel good and just and kind… while the right methodically destroys social security.
“It is hard to see why any cuts to the earned benefits programs should be made. Social Security, Medicare and Medicaid are more important now than ever because of the weak economy. We are a rich country and we can afford these programs.”
When you’re right, you’re right. But what we are seeing is the playing out of the Republicans’ Starve the Beast strategy. The first phase, spending to build up the debt, is over. The second and final stage of gutting social programs is where we are now. The strategy should not work, because, as you imply, the Federal gov’t can afford to do what it has been mandated to do. It has all the money it needs. Where do you think that the money to bail out Big Finance came from? But it is working politically, because the Dems are complicit.
Terry: “Well I disagree with something you said Linda–I think that is a first. Specifically, the idea of taxing all compensation to solve any long term shortfall in social security. My reasoning is that it only cures the shortfall if social security ends up paying out less to the high income earners than they put in. While I have no particular problem with that, it does transform an insurance/savings program into at least in part an income redistribiution scheme.”
Social Security has never been a forced savings program. It has always been conceived of as insurance. (Yes, it is a tax.) Do we pay out fire insurance to those who paid their premiums but did not suffer a fire? Why should we pay out retirement insurance to those who do not need it? Well, we do, as a political matter. But any insurance is a redistribution scheme. That’s its purpose.
that’s true, but we don’t charge people a million dollars for a thousand dollars worth of insurance just because they have more money than the other guy.
social security IS a forced savings program. in return for the “forced” savings, your savings are insured against inflation, market losses, theft, disability, death, and your own lack of prudence (failure to save) and failure to thrive (ending up making too little over a lifetime to save enough to retire).
mostly true i am afraid. but the money for Social Security comes from the workers. the money to bail out big banks seems to be coming from the people who can afford to buy US Bonds…. you know, the ones that are worthless iou’s when social security buys them.
it is of course insane to cut Social Security… it doesn’t cost the government anything. it is also insane to cut Medicare… would you cut your insurance because the cost of medical care is going up?
but the rich have a reason to complain about Medicare because they do pay for a big part of it. it would be better to have Medicare funded like social security from a direct, dedicated tax with a cap that held the amount of the tax to a reasonable approximatioin of the value of the insurance.
but you don’t hear anything as sensible as that coming from the “super” committee.
those people literally do not know what they are talking about. they are trading hostages.
“hey” i’ll throw a few dollars off a cliff if you throw your grandmother off the cliff. that way i know we are sharing the pain.”
I always defer to Coberly and Bruce Webb on matters related to social security, but I thought just a few days ago we were talking about the idea that the more you pay in the greater the monthly benefit you recieve and I am sure I heard somebody on C-Span–who seemed to know what he was talking about–say within the last two weeks that merely lifting the cap on social security contributions would not eliminate the future shortfall UNLESS social security abandined its policy of paying out more to those who paid in more.
you arrogant twit. I realize you have impressed yourself with your own glorious plan for Social Security. So, go right ahead and preen in front of your own little mirror. However, pretending that “the left” is monolithic, and that you are a mind-reader, knowing what they all think, well that’s beyond silly. Worse is that you pretend to be oh-so clear-headed and oh-so right, while denigrating anybody on “the left” – and the right, so that’s just about everybody buy you – for what you pretend to know they are thinking. Kinda grates on the nerves after the first dozen times or so.
So, here’s my plan. As long as you keep insisting that you and only you understand how Social Security works, how the rest of us must think of it and what small-minded motives and small little brains anyone who disagrees with any detail of your little plan must have, I’m gonna keep pointing out that you are full of crap. Seriously, you aren’t that smart.
well you have to make a distinction between what is, and what is proposed. there are cbo options that raise the cap and raise the payout, and those that raise the cap and don’t raise the payout.
in either case the raise in the payout is not enough to justify the raise in the tax at the top end.
so what you just said is right. can’t see that i ever disagreed with it.
I can’t stop wondering how much more would be in the SS fund if not for the income shift up the line. Some say $1 trillion, I say 1.4 trillion per year of income in the hands of he 1%.
If there is a reason to remove the cap on SS (and I’m not convinced it’s the right idea) then this is it. It is to capture that which would have been captured for labor and thus secured SS. Secured SS barring any greater tax cuts for the money class.
have you ever had a psychiatric exam?
i know what Beale proposed here. i know what a group of social insurance experts.. very high end… propose… i know what my congressman proposes.. in short i do know a little bit about this, but i never confuse “liberals” with everyone who is a liberal on some issues or in some ways.
in fact, i don’t know anybody who does. but you have a habit of taking words “literally” according to your idea of what the true meaning is and castigating anyone who would mean what you mean by them, but doesn’t.
and i am that smart.
if you have some objection to something i say, say it.
if you just object to my saying it in a way that sounds to your ear like i think i know what i am talking about, well i’m sorry if that offends your insecurities.
but you’ll be glad to know you have lots of company.
and my apologies to any “liberals” who think i was dissing them personally. i don’t know you. but lots of people who call themselves liberals, or who are identified as liberals by our media have ideas which are not well thought out… even some who have degrees in the subject and have spent forty years or more in a social security related career… and yes, i do think i know more than they do about what i know more about than they do, and understand what i understand better than they do.
they are of course free to disagree with me. and unlike kharris and a few others i can’t name, i will not panic if they sound like they think they know more than i do. i may try to ask them some hard questions. and i may express my disagreement with them in terms they won’t like. i am also more likely to think hard about what they say, and change my mind if it seems called for.
I have not pretended to know more than you. I have merely observed that you pretend to know more than you know. And since you failed to recognized that distinction, I will also observe that however smart you may think you, you aren’t that smart.
My objection to your line of argument is now as it always has been. It relies on insistence that we all adopt your characterization of the facts, your definition, and so on. It relies on denigration of your opponents. You know, the whole “needs a psych exam” approach to responding to your critics. It relies on your adopting the mantel of expertise, arguing from faux-authority. It relies on your own claim of virtue – you are more likely to think and change your mind, than whom, pray tell? – and sure enough, here you are touting your own intellectual virtues.
I wish we had more champions of Social Security who could make a legitimate argument. Instead, we have you. So, you keep claiming to be smarter, more virtuous, more authoratative than whoever. You keep telling the world how stupid are those who disagree with you and then put “literal” in quotes to build yourself room for deniability. You keep tossing in “psych exam” when facts won’t do. And as long as you do, I’ll keep pointing out that you’re pretty much a fraud.
in view of K!arris’ objection to the way I comb my hair
please don’t defer to me, on anything. I try to say only what you can verify for yourself. I think I pretty much have the gist of things, but I do make mistakes.
only try to make sure the mistakes.. or not… matter.
I do not think I was disagreeing with you–only indicating that while I have strong views concerning social security, I do not pretend to know as much about it as you and Bruce largely because I am too lazy to look stuff up.
I don’t know the answer to that. It is not a question I worry about too much. SS is the only way workers have to save their own money for retirement safe from inflation and market losses.
What is happening to their wages is reflected in the size of the pension they will get. Richer or poorer, good times or bad. It’s what they need.
If they need better wages… and they do… then go after that. Don’t try to claw it back by ‘”taxing the rich.” Better to make the rich pay you what you are worth.
What kind of an economy is it where you work for the rich man for nothing, and then beg him to feed you when you are no longer good for work?
Hint: the same system they had in the Old South before 1865. The same people are trying to bring back those dear old days. only they have learned since that white is as good as black.
thanks. i am too lazy to look stuff up all the time myself. so.. don’t defer.
but i did look it up once and think i got it about right.
facts are facts. where are yours?
when i noticed the Big Lie several years ago I started out being polite to people. Then I had to put up with too many people like you and… well, others.
But don’t expect me to talk nice about the people trying to kill Social Security? or the “liberal defenders” who propose a payroll tax holiday or a heavy tax on the rich to “save” it.
I’m am more than fine with S.S. dieing a slow and secret death. There are much better ways to accomplish the same thing.
S.S. is being kept alive because it has been the only way to redistribute wealth…that is foolish thing to want in the first place, to allow the government to steal from the public is just a disgrace….this country can do much better!
Obstinate, insistent, opinionated are probably some of the words I would use to describe Coberly. Fraud is not a good word in my most humble opinion. He does know the issue at hand and his view has been consistent. In any case and to which he will also object, employment at a greater than 66% Participation Rate will take the wind out out many of the “fix Social Security” sunny day sailors. Py-go returns and the need to draw down the TF disappears.
Isn’t the argument how much the Withholding tax receipts being used to subsidize corporations and the 1 percenter’s tax cuts. More and more and as taxes decrease for both groups, SS Withholding is taking up the void left.
i can’t object to that because i don’t know enough about it. can you make the case?
i’d sure be glad to see the workers making enough money and not need to raise their tax.
all i ever did was point out that the hysterical numbers provided by the Trustees reduce to forty cents per week per year. a point that CBO has also made… in a very soft voice.
and then i objected to “tax the rich” as a way to “fix” what ain’t broke by turning it into welfare.
and then i objected to the “payroll tax holiday” especially now that Obama says it’s permanent.
and about that i am obstinate, insistent… and so far gone that i don’t see how “facts” are “opinionated.”
and also i am very very angry that the forty cents per week solution… as scored by CBO… is not discussed. by ANYBODY.
maybe they are all like Harris and think that if it’s right it’s just too arrogant to put up with.
and here i am trying not to call anyone an idiot.
SS does not redistribute wealth any more than your not spending all your money Friday night in order to have something for Sunday dinner redistributes your wealth.
there is NO better way for workers to save for their own retirement.. at least a bare “if all else fails” retirement. Or by accomplish the same thing do you mean “redistribute the wealth.”
well, i guess robbing banks (either way, you robbing the banks or the banks robbing you) might satisfy your aesthetics.
i won’t ask you to explain “allow the government to steal from the public”… i have never cared for modern minor poets or the drivel of the barely sentient.
“that is foolish thing to want in the first place, to allow the government to steal from the public is just a disgrace….this country can do much better!”
EVERY country worth living in has an aggressive social pension system.
Germans contribute ~20% of their income to theirs. Norwegians got smart and sequestered their oil earnings into theirs (kinda like the secret socialists up in Alaska).
You really know nothing at all about Social Security. But you have a great big opinion about it! Well done.
“there is NO better way for workers to save for their own retirement”
First of all, this is just factually incorrect. Secondly, you need to make up your mind if you expect people to take you seriously.
Is S.S. retirement or is it insurance? You keep waffleing on it, to attempt to score gotcha points, but in the long run, all that is happending is that your defeating your own position.
“allow the government to steal from the public”
The lie of a surplus is straight up theft..PERIOD! The trust fund is just the accounting mechanizism of the largest ponzi scheme in history. I would almost bet that your one of these people out there trying to sell people on the idea that a small tax increase over time solves the problem, or your one of those that makes this idiot claim that…”Well we borrowed the money for the trust fund, so we gotts pay it back.”
The problem is that an entire generation just paid into the trust fund, and the money was waisted, so now the generation behind the first has double the burden, and the generation behind the second has triple the burden…etc.etc.etc.
You should be embarrassed of the entire thing!
“EVERY country worth living in has an aggressive social pension system.”
Thanks for exposing yourself. I thought S.S is insurance not a pension system. Can you please point me too where it was secretly changed to a pension system?
Oh please tell me…what don’t I know Oh Great One?
it is both insurance and forced savings for retirement. i am sorry that you can’t understand how one thing can be many things.
your ignorance about the trust fund and what a ponzi scheme is tells me there is no point in trying to help you.
“forced savings for retirement.”
Well I see that your glass house has been shattered, and now you have to resort to lieing, and probaly hoping that I don’t understand enough about the system to recognize it.
If it were “savings for retirement,” then you would be able to extract what you put in….but that clearly is not the case.
just in case anyone else is watching
you get more than what you put in out of social security… almost everyone gets far more than they put in. the very highest earners get back what they put in plus enough effective interest to equal inflation and the average increase in real wages over the time you have been paying the tax.
Dean Baker has run numbers on this. You could address specifics to him.
My takeaway from his argument is that if the traditional share of new productivity going to Real Wage had remained at historical trend Social Security would be fully funded.
Those who want to back check this could take Low Cost projections as to Real Wage over the last fifteen years, examine what those would have projected to in the way of solvency and then compared that to actual Real Wage and actual solvency outcomes. Now Real Wage is not the only variable involved but other key variables like inflation and productivity are components of it, while I don’t see the same divergence between demographic projections.
The numbers are there, and from what I see from back of the envelope calcs it is all about the divergence. The different sides advance difference causal explanations but the facts are clear: workers are not seeing increased productivity translating into Real Wage in the way they used to. Which is just the flip side of increasinging income inequality as rewards switch to management and capital.
Ned your arguments are based on nothing and you are only the latest of a lengthy series of people substituting Pineiro for evidence.
Privatizers numbers have never worked out for the majority of workers. Period. The theory of WHY they should work out is text book solid. Which is why people like you are always so cock sure about this. But the factual record of the last 30 some years since the right coalesced around basically the Ferrara Plan in implementing Butler and Germanis’ Leninist Strategy of June 1983 shows the text books have been falsified.
To paraphrase maybe the last sane Republican the science turned out to be voodoo.
Which doesn’t keep quarrelsome jerks from you asserting opinions without you know, maybe providing evidence that your theory works once put to scientific test.
I have scrapped less odorous voodoo off my shoes. Go away until you know something beyond Cato/Heritage/AEI talking points. Their numbers don’t add up and haven’t.
You are playing Gotcha games from argumentative strategies that have been proved flawed time and again.
I am late to tonight’s game, being on the road, but let me assure you Ned you are punching above your weight here. If you want to see your game played by an expert who actually knows what he is talking about start frequenting Andrew Biggs Notes on Social Security Reform.
Biggs got his start at Catos Project on Social Security Privatization, played an important staff role at Bush’s CSSS (privatization commission) prior to filling a variety of top roles at Social Security including the number two slot as Principal Deputy Commissioner. He now works out of AEI. As it tums out very large parts of the argument you are lamely presenting today were originally his work product from the last 20 years. Just done infinitely better and from a higher knowledge base than you are likely to achieve.
Andrew disagrees vehemently with Dale and my take on this, but doesn’t make the mistake of just claiming we don’t know what we are talking about. Check out his blog and get some tips about how to elevate your game, because youare just embarrassing yourself here.
Ned why are “pension” and “insurance” exclusive?
Where is the ‘got’ in the ‘gotcha’?
Is a private annuity ‘insurance’? Well that is a definitional problem. But certainly a 401k plan could be converted to an annuity if someone chose to. Meaning that a ‘pension’ can be a private annuity in the end. And the companies that provide such private annuities typically offer insurance products and in common parlance would be called ‘insurance companies’.
So if you have a financial conglomerate offering ‘insurance’ against ‘pension plans’ that might well take the form of ‘annuities’ where is the juice in your Doublemint “is it a flavor mint or a breath mint” formulation?
Now I think if pressed I could present the case in favor of your argument. I just see no evidence you have anything more than bluster and bullshit backing up your attempt.
And if you ask who the fuck am I to assert authority as against you, well a little Google on this topic and my name and/or search on Angry Bear archives might be your friend here
I assume you know what you have posted, which is … nothing. Talking points from right wing think tanks, meant to incite emotion in those who don’t know any better, informationally zero.
Your very first point was spurious, “redistribution of wealth” my tired butt. You claimed that that was the point for the existence of Social Security. It’s not, and you can’t prove that it is, which would require you to know the underlying psychology of the people who created it, or have quotes from them about their intentions or at least have rock solid inference from several impeccable sources. You don’t. By saying that, you indicate precisely that you do not understand what SS is, how it is paid for, who it is paid to, or why it was created.
Bring in some numbers from some non-right wing source and then you might have an argument, although to argue with these people you ought to have a lot of published work that you can refer to already.
It may be far too late now to say this
But the point of Linda’s post
was that the “super committee” now has the clever idea of cutting entitlements and leaving the “tax increases” to be decided some time in the future by another committee.
Linda points out the screaming dishonesty of this, and I agree with her.
I wish she hadn’t thrown in the line about getting the rich to pay for Social Security… which I regard as a fatal mistake.
Because she is right about the dishonesty of the super committee, and we need to understand what they are up to.
coberly: “that’s true, but we don’t charge people a million dollars for a thousand dollars worth of insurance just because they have more money than the other guy.”
Except that retirement insurance (ignoring the other insuranc aspects of Social Security) means payment over one’s productive lifetime, from starting work to retirement. As time goes on, it will become apparent that, for whatever reasons, some people are unlikely to need the payout. Do we then allow them to opt out? Suppose that Social Security were private, and the contract is that in return for the insurance you pay X% of your income every year until age Y, and you are not allowed to stop paying X% until age Y. Would people consider that unfair? If you allow people to pay a smaller percentage of their income because they are making more money, then you have insurance for everybody paid for by the poorest segment of those who are insured.
OC, there are various ways to structure the insurance payments and payouts, but Social Security is not unfair to the rich. Nor would it be without a cap on the tax.
coberly: “social security IS a forced savings program.”
If Social Security is a forced savings program, what is the point of protecting it? Then it is just another Nanny State program.
a red light is a forced stopping program. what’s the point in protecting it. it’s just another nanny state program.
the reason for protecting SS is that it protects workers from inflation and market losses enough to allow them to retire before they are ready for the knackers.
this is the people protecting themselves. it’s what governments are created for.
the army is a forced defense program. what is the point of protecting it. it is just another nanny state program.
please give up the “nanny state” b.s. that’s just a way the right has of fooling people into thinking they ought to be big and tough enough to take care of themselves. while the real thugs… organized themselves… steal from the people, enslave them, and kill their children.
you are free associating. try thinking.
you pay for fire insurance as long as you own the property and can have a fire you can’t afford to pay for. even if over the same time you get rich.
as it happens we already do what you suggest. no one has to pay for SS on the money they make over the cap. over a lifetime they will have paid exactly what the insurance is worth… even if they don’t have the fire.
harris would think i am being unkind and arrogant
but you simply don’t know how social security works and you are planning to replace it with something that you have thought about for maybe two seconds, unencumbered by any actual knowledge of either the program or the facts of life that led to the program being created in the first place.
the reason it is “forced” savings is because most people are too dumb to understand why they need it. and i am sorry but that is true about people. i was too dumb myself until i had to think about it pretty hard for a time. its the same reason we have speed limits… because enough people are too dumb to know when they are driving too fast for existing conditions.
people pay a tax of 12% (or so) because that is the least “we” can pay on average to be able to provide a minimum retirement benefit. the poor pay less actual dollars at the same percent… and would never accumulate enough to be able to retire on their savings. those who are much better off pay more actual dollars at the same percent, and part of those dollars are used to supplement the benefits of those who ended up poor after a lifetime of work. the “rich” still get a bigger retirement check than the poor… they paid for it… but they don’t get the same “rate of return on investment” the difference is where the money comes from to be able to supplement the poor: that’s what makes it insurance.
the rich don’t “need” their benefit, but they are glad to get their money back when they need it more than they needed it when they were making a hundred k a year. and by the time they get old many of them are smart enough to understand why it was a good investment after all.
take away the cap and it ceases to be a good investment. we don’t charge even the rich a million dollars for a thousand dollars worth of insurance.
no. that’s a phony argument. the general taxes have not been enough to pay for the government’s spending. that is a problem. borrowing from SS has been part of the way the government has funded its deficit. but that’s what you do with borrowing.
now that the time has come to pay back SS, that appears to be what the government is doing. this will make the government have to tax more or borrow more… but it really is not a problem with SS.
How’s that “surplus” working out for you?
What part of paying back the Trust Fund from the General Fund do you not understand. If your only arguement is that the Trust Fund is on the up and up on the accounting side…..then you have no clue what the debate is even about…and yes I know exactly who you are and your typical propoganda….and I didn’t need to look you up to know!
“just claiming we don’t know what we are talking about”
Nobody claims this…..the accusation is the constant denial to recognize the real problem, instead of both your insistance that the debate is only allowed to focus on the accounting of the Trust Funds.
You guys are the ones embarrassing yourselves, because your only response, as pointed out to Coberly many times….is “We borrowed form the Trust, it must be paid back.” This is a Bullshit non-reponse, and is very telling.
Bruce and coberly,
As someone who disagrees with you guys at times, I think your patience with ‘ned’ there is above and beyond the call of duty. You just needed to point out the SS, in its isolation, is perfectly healthy.(you guys have plenty of links that prove that point). The problem ned has is with the general fund. I’m not sure he understands the diffference.
Anyway you guys are patient at least.
Islam will change
“What part of paying back the Trust Fund from the General Fund do you not understand. If your only arguement is that the Trust Fund is on the up and up on the accounting side…..then you have no clue what the debate is even about.” Ned
Then enlighten us Ned. What is the debate about? If the Trust Fund is an illusion then why the great anxiety over the $2.6T debt that it represents to the general fund If the Trust Fund Treasury Notes are “an accounting trick” are Treasury Notes held by other entities also some kind of illusory canard? Who or wha do you reference to support the validity of your conceptualization of Social Security as a Ponzi scheme? Please enlighten us Ned. What is this debate about?
The current legisaltion makes it very clear that the FICA revenue stream be identified in a specific manner and that those funds be accounted for in regards to current benefits and Trust Fund asset accumulation. What is the source of your contradictory evidence? You’ve not been arguing dollar amounts. You’ve made it clear that you are disputing the current conceptualization of the Social Security system. I, and others here, are saying that our description of the system is based on the legislation which created the Social Security program and all subsequent modifications to that original legislation. What is your basis for challenging that description? And please don’t just give us some wing nut reply. I want a citation of law. The Social Security system is a creation of congressional legislation. It’s been working very well for more than 60 years. What’s wrong with that?
“A Ponzi scheme is an operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation”
By defintion…Social Security is a Ponzi Scheme. You guys just don’t like to call it as such, for whatever reason. The Baby Scammers never had a worry in the world till now, when it has become apparent that the generation tasked with paying their insurance will be smaller in demographics, and have access to a less competitive economy. It was a much easier task for them to accomplish, and the scheme was easily kept alive because they outnumber their retirees 2:1 conservatively, and had a very competitive and fastly growing economy to work within.
“What is this debate about?”
The debate is about wealth redistribution, and the moral hazard of teaching people to rely on S.S. as retirement. The only way to make the scheme work long term is to consistantly have a growing economy, and demographically, have each generation larger than the previous…this is not even close to the reality, the generation behind the Baby Scammers, will experience….That is the debate. This whole idea about the accounting of S.S. is pointless, and yes…i fully understanding that the accounting of S.S. is right on the money….well Big Deal?
“It’s been working very well for more than 60 years. What’s wrong with that?”
Who cares if it worked well up till now…that means nothing, and it sure as hell doesn’t mean it will work well in the future. Quit beleiving that people who point out the tremendous burden the scheme will impose are evil, and concentrate on solving the problem. The only solutions are growing the economy, increaseing the payroll tax, and cutting benefits. If your increaseing the tax and cutting benefits to make up the difference of the so called surplus….then how well did it really work?
I just a get a kick out of some of you, because you run around claiming the critics are the evil people trying to destroy S.S., while the people you put in office are actually the ones who cut the payroll tax, ensureing it’s slow death. Haven’t you ever stopped for a second and asked why? It is obvious to us, but the great defenders can’t seem to figure it out.
Trying to be civil in reply to your absurd explanations is difficult because we have been through this scenario before with other fools who thought themselves to be so clever.
A Ponzi scheme runs out of funds quickly because the perpetrator of the scam keeps the majority of the funds rather than paying them out to the participants. Social Security pays out the major portion of its receipts to current beneficiaries and is issued Treasury securities for the current receipts that are in excess of the bneifts paid each year. You can try to distort this picture, but the facts are there. Complain if you like about how the government spends its general fund monies. That is not part of the Social Security program debate. The excess FICA must be invested in the safest of safe havens and that woould be Treasuries.
“The debate is about wealth redistribution, and the moral hazard of teaching people to rely on S.S. as retirement.”
That statement conflates two points. First, Social Security has nothing to do with redistribution of anything. You work and pay in while you are young so that you can stop working and receive benefits when you’re old. Moral hazard of a retirement plan? What should they have relied upon? Ask the workers of what was PanAm. What about the folks who saved for retirement by investing in GM or Chrysler? The stock market has been little more than a roller coaster ride for small investors. I’m fortunate that I didn’t have to cash out in 2000 or 2009. What brilliant scheme do you have that assures working people of a retirement income not subject to the vagaries of the stock market and their smiling investment advisor?
“and yes…i fully understanding that the accounting of S.S. is right on the money….well Big Deal?”
Are we supposed to take that “well Big Deal?” seriously?
“Who cares if it worked well up till now…that means nothing, and it sure as hell doesn’t mean it will work well in the future.”
So what research do you have that it is not likely to continue working well in the future? You’re beginning to sound like a complete moron rather than a half wit. It won’t continue to work if jerks like you are allowed to have a say in how it is administered in the future.
“…because you run around claiming the critics are the evil people trying to destroy S.S., while the people you put in office are actually the ones who cut the payroll tax, ensureing it’s slow death.”
This is the only near to rational comment you’ve made. No one here is happy that the current administration is allowing itself to be pushed ever more to the right of this and similar issues. And no one here is certain that the Democrats are any better than the Republicans in regards to Social Security or any other aspect of economic ideology. The plutocrats run the government. You and your ilk have let them take charge by sounding
only a bit less extreme and absurd than the wing nuts. Open your ears, your eyes and your mind. Maybe even you can come to understand that the problem is not left vs right. Thee is no left and the right is blind to reality.
i am not always patient. but i ought to be.
“A Ponzi scheme runs out of funds quickly because the perpetrator of the scam keeps the majority of the funds rather than paying them out to the participants.”
Well that is exactly what is going to happend over the next 25 years. There is a massive buddle created because of the demographics.
“Social Security pays out the major portion of its receipts to current beneficiaries and is issued Treasury securities for the current receipts that are in excess of the bneifts paid each year.”
For Christs Sake….Nobody is disbuting this. But again, that is not the issue. The issue is that the scheme sucks capital out of the economy and creates dependents of the government. Instead of the citizenry being able to shape the tax money lost to the scheme to their benefit, the government waisted the money. Now….the next 25 years until the bubble is burst, the following generation gets screwed, and everybody knows that in the meantime, the age will be increased, the benefit cut, and the tax increased……and all you got to say is….”Wow See how well it works?” It’s just patheic!
“So what research do you have that it is not likely to continue working well in the future?”
Over the next 25 years……the Trust Fund will rely on the General Fund to make payments. As the General Fund is swallowed up paying back the Trust Fund it is accuring interest, and the tax is going to have to be increase just to say that there is a Trust Fund. Because of the revenue shortfalls to the General Fund, these transfers will become Debt. The Debt is accuring interest. The only variable method to smooth this out is growth in the economy, which no one I know of forecasts any signifigant growth, than can directly compensate, so the end reult will be massive increases in debt. Now…granted, I agree that S.S. is not the major problem…MediCare and Medicaid are, but in combination the solution to this combo, which already chews up 1/3 of the GDP, will have to be massive tax increases and massive growth. In the end…..it is a troublesome senerio for us, and those who attempt to hand wave it away are not convincing. Only those who do not understand will buy that crap. $49 Billion a month from the general fund just for S.S. right now…….gonna be bigger every year.
“You and your ilk have let them take charge by sounding only a bit less extreme and absurd than the wing nuts.”
Whatever that is supposed to mean? This entire social engineering experiment was a creation of a specific Ideology, espoused by you and your ilk. The sad thing is that you guys keep blaming people who look for solution and alternative as evil, while your own ilk kill the system for which you so love, blame us for it, all in an attempt to double down on it. The Ideology killing it is the Ideology that created it…why?, because they know they can’t have their utopia until they kill this sytem to replace it with an even more Nanny State solution.
Well you have given us sufficient evidence to conclude that you haven’t a clue to what you are talking about. I’ll not bother a point by point refutation given that readers here have read all your crap before albeit from other pens. The next time I want to read silly shit I’ll get a copy of an Ayn Rand novel, which I assume you’ve probably memorized.
that’s the trouble with engaging “Ned” or the people who created him. They have a depth of lies and once you try to correct one you find yourself ensnarled in more and more. I have tried to explain the error in the things he says here, but you can’t help him because he has been provided with an “answer” to everything and he has no capacity whatsoever for careful thought.
and, if you let yourself get frustrated or angry at him, then they change the subject to what is wrong with your personality.
All I can tell people… and they can verify it for themselves: Social Security has nothing to do with the deficit. It is not welfare. The workers pay for their own future benefits. The “huge Trillions of Dollars in Unfunded Deficits” you hear about amounts to a need to raise the payroll tax… so the people who will get the benefits will have paid for them… by one half of one tenth of one percent per year.. or about forty cents per week each year while wages are going up about 9 dollars per week each year.
You can check this out for yourself. I can point the way, but you need to do your own thinking. If you try to unsnarl the Big Lie, you will just get lost.
Now, here is the pathetic part: you will get no help from your elected political leaders, or even the established defenders of Social Security. the first are dishonest, the second are academics who love nothing more than getting tangled up in the lies in order to refute them… and never realize that this is exactly what the Big Liars want them to do… because their audience neither understands them nor cares much what they say.
The only hope i see… and it isn’t much… is for you to understand that SS is important to you and your children and you need to understand it enough to tell all your friends what they can do to keep the Liars from crippling it: don’t let them “fix” it at all. Make it clear to everyone that an extra forty cents per week each year will pay for it forever… and no, the forty cent increases don’t go on forever. The need for the increase goes away in a few years.
I’ll try to write another post explaining all this in detail, but I think the Bears have already heard it enough times to be sick of it. They shouldn’t be listening to me anymore, they should be telling it to their friends.
I am not proposing to change Social Security. It is neither broke nor broken. Bruce Webb assures me that, behind the scenes, there is probabilistic analysis to support those 75 year projections. OK, what do they say about the relative errors in those projections? 40%? 50%? Whatever they are, aren’t they too huge to raise the alarm?
As for the politics of Social Security, the reply to claims that it has to be fixed is not, well, it only has to be fixed a little. The reply is Hell, no! It does not have to be fixed. Social Security is neither broke nor broken.
As we know, the opponents of Social Security are relentless in their attacks. To defend it as forced savings invites the Nanny State objection. To defend it as investment invites the Better Return Elsewhere objection. To defend it as insurance invites the Private Insurance is Better objection, but that is rather easy to defeat. Insurance by pooling the resources of everyone to pay for the misfortunes of some, is something that gov’t does very well.
It is in the nature of insurance that we do not know how much will need to be paid out. We make educated guesses. As you point out, the poorest (if they survive) will receive more than the sum of what they paid in, plus inflation, plus investment return. That’s the main point of the program. Other people will receive more than the poorest, but somewhat less than that sum. That’s how insurance works.
Now, if you are actually worried — which the opponents of Social Security are not — about the ability of the gov’t to make the insurance payouts, then it makes perfect sense, especially in times of rising income inequality, to raise or eliminate the cap on high incomes. Why should those with high incomes pay proportionally less than everybody else, if the system is in trouble? Why should the less fortunate pay more? Social Security is very popular. According to polls last year, even the Tea Party would raise taxes on the wealthy in order to save Social Security. The easy and obvious way to raise those taxes is to raise or eliminate the cap.
Ned, you surely are as true a true believer as I have ever seen here. I certainly hope your trust fund lasts long enough to see you through retirement. In the meantime, I suggest that you simply not apply for Social Security should you ever become eligible for it. Of course, even Ayn Rand lined up for her checks when the time came to stop working. But, it was in her interest to do so and completely consistent with her philosophy.
If you intend to impress people here with your brilliance, you are wasting your time. Or, perhaps you hope to convince people who have more knowledge of the subject at hand than you do that they’re wrong.Also a waste of time. Or, you’re just a troll. If so, be gone. Quickly. NancyO
Oh, yes. The idea of some high income person contributing $1,000,000 and getting back only $1,000 is a catastrophe situation. It is more like getting back only $1,200,000 instead of $1,243,852. And that is assuming that Social Security really does have a problem.
coberly: “borrowing from SS has been part of the way the government has funded its deficit.”
Well, since the monies owed to the Social Security Trust Fund are included in the debt which is subject to the debt ceiling, that is not so. (If they were not included in the deficit each year, they would not add to the debt.) Borrowing from the Social Security Trust Fund is a way to provide safe income to the fund. That is the real reason.
Let me make that clearer. Social Security does not fund the deficit. The deficit is defined as G – T, where G = gov’t expenditures and T = tax revenues. If some of those taxes are used to buy treasuries, that has no effect upon G – T.
I agree with everything you said, except this:
the poor get back a good deal more than they paid it. even if they got less than they paid in, it would be a good deal. If a pay a hundred bucks for an absolute guarantee I will have eighty bucks when i need it or starve, it would be a good deal. Unless there is a better deal. SS is the better deal.
The richest workers still get a good deal. They get all their money back plus interest … more than inflation. And they get the insurance.
Raising their tax beyond what is a reasonably fair deal for them would make them try to kill SS harder than they already do. Actually, only SOME of them are now trying to kill it. The lunatics. If SS was an obviously bad deal, the honest rich would join them.
AND IT IS NOT NECESSARY. SS is not in trouble. And the workers can continue to pay for their own insurance without raising the retirement age, cutting benefits, means testing… or taxing the rich… for forty goddam cents per week.
So why turn it into welfare?
BTW those with high incomes pay proportionately MORE for what they get out of SS than those with low incomes.
but the Congress appears to practice Enron accounting. They count the SS surplus as “tax revenues” even if they have to borrow it from SS to spend it.
So they get this twisted way of describing the deficit, and people who ought to know better buy into it and try to explain it to us… one way or another.
Social Security is not welfare, nor would it be if there were no income cap. Insurance is by its nature redistributive. That does not make it welfare.
But the main point, is, as you say, Social Security is not in trouble. Tinkering with it does not send that message. It says, well, it’s only a little in trouble. Say it lound and clear: Social Security is sound!
coberly: “ but the Congress appears to practice Enron accounting. They count the SS surplus as “tax revenues” even if they have to borrow it from SS to spend it.
“So they get this twisted way of describing the deficit,”
The answer is not to agree with them. Social Security does not fund the deficit. Period.
coberly: “I wish she hadn’t thrown in the line about getting the rich to pay for Social Security… which I regard as a fatal mistake.”
You may regard it as a fatal mistake, for political reasons, I gather. It would make people think of Social Security as welfare. Well, whatever people think of Social Security, when even the Tea Party thinks that if it is in trouble, we should tax rich people in order to save it, that sounds like a good political position to me, one that draws support from both Right and Left. 😉
Social Security is only in trouble from the people who have always wanted to kill it. Now that they have the Democratic President on their side they have all but won.
Insurance is redistributive, but at what point does it cease to have a reasonable value for the price of the premium. I think that point is very close to the present cap. Raising the cap a few percent is no big deal. raising it a lot, or scrapping it entirely, or imposing a special tax on incomes over 250k crosses the line and makes it welfare.
The people do not need welfare. They can keep SS with no help at all from “the rich.”
Either with no increase in the tax at all, or with an increase of forty cents per week each year if they want to keep up with the standard of living projected over the same time period… a standard of living fully in keeping with their own wages.
Remember this… raising it one half of one tenth of one percent per year for you amounts to nothing you would ever notice… and it gives you enough money to retire “on time” at a standard of living that will be “enough.”
Raising the cap amounts to about 1200 dollars a year for every 10k over the present cap your rich person earns… and he gets nothing for the money.
And what hope is there if you, a reasonable person, can’t let go of “tax the rich” when it isn’t needed and brings with it the threat of “welfare as we knew it.”
we are tripping over words here. when i said “funds the deficit” i mean the congress borrows money from SS to make up part of the money they don’t collect in taxes to pay for what they buy.
you appear to mean that the “deficit” is not “funded” if it has to be paid back.
the fact appears to be that the money borrowed from SS does have to be paid back, but Congress can change the rules, including cutting SS benefits in such a way that paying back SS never happens in meaningful time.
I don’t think that is particularly their game. They are hysterical about “the deficit” because it helps them advance “fixes” for Social Security, which they want to “fix” with a stake in its heart.
SS has always been the target of these bastards. They will latch on to any lie that has traction.
it’s a poison pill. once it is welfare it will soon become welfare as we knew it. means testing and benefits cut below survival levels. and you with an income of 30k will be “too rich” to collect any benefits. kind of like they are trying to do to Medicare as we speak.
and by means testing i don’t mean they take your word for it. it means you go to the government proctologist every three months to prove you don’t have any thing hidden in your assets.
I was pondering the activities of Grover Norquist and wondering about the conflict between his No Tax pledge and the oath of office taken by members of Congress. As I understand the Grover pledge those who sign it are pledging never to raise taxes. How can such a pledge not be in conflict with an oath of office that obliges the office holder to abide by the laws and the Constitution of the USofA? It says specifically,
“I, AB, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”
How does the Grover pledge not place a “mental reservation or purpose of evation” on the individual who signs the Grover pledge. Is one’s faith and allegiance not abridged by pledging to constrict one’s actions actions regarding the business of the country?
Forgive me for being redundant, but let me point out, again, that the con is to focus on ambiguous regulations that “hinder businesses in their quest to employ all of America, especially the one’s living in China and India.” The con artist isn’t going to be specific unless he is pushing a point that enriches his group. Do they want to scuttle the Farm Bill? Do they want to de-regulate ethanol production? How about ending regulations that allow mining on government lands and paying chump change to the government for the wealth carted off? There are plenty of government regulations that I would like to see removed, but I don’t think our Republican friends, and those Democrats whose local business interests benefit, want to de-regulate the same things that I would.
Hmm. How about removing all the new regulations put in place concerning the use of Zucotti Park in NYC? The damn government is getting in the way again, but it has produced added employment for police and sanitation workers. Not additional workers, but the over-time just before the holidays will warm the hearts of all those taking advantage of enforcing these new government regulations.
Come to think of it, after reading over that oath of office I notice that it doesn’t actually say anything about representing the interests of the people who elected the person to office. So if “support and defend the Constitution” is the measure of the office holder, is there any specific Article or Amendment that might conflict with making and signing a pledge to behave one way or another in accordance with the interests of some private parties, Grover et all, in this example? It seems mildly treasonous to me, agreeing ahead of time to a restriction on one’s intentions in regards to the legislative process of the Congress to which one is elected. Funny that the oath doesn’t actually say anything about the primary role of Congress, the enactment of legislation.
coberly: “And what hope is there if you, a reasonable person, can’t let go of “tax the rich” when it isn’t needed and brings with it the threat of “welfare as we knew it.”
First, a flat tax is not “taxing the rich”. Ask Steve Forbes about that. 😉
Second, I do not think that any additional Social Security taxes are needed now, as a practical matter.
Third, if additional taxes are needed as a political matter, then raising the cap is attractive. 😉 Mainly because it embarrasses the opponents of Social Security, who really are waging class warfare. Besides, it has political support across the political spectrum. In addition, rising income inequality does threaten Social Security unless the cap is eliminated.
coberly: “we are tripping over words here. when i said “funds the deficit” i mean the congress borrows money from SS to make up part of the money they don’t collect in taxes to pay for what they buy.”
The gov’t has certain expenditures, G. It also has certain tax revenues, T, which include Social Security taxes. The difference is the deficit, D. So far, we agree, right?
It is true that a portion of the Social Security taxes are used to buy treasuries. But that does not allow the treasury, under current law, to borrow any less than D from other sources. To do so would mean counting Social Security taxes twice towards paying for gov’t spending.
Simple example: The gov’t has expenditures of $2,000 and collects taxes of $1,000, yielding a deficit of $1,000. No problem, says the gov’t. We’ll just use the $1,000 in taxes to buy our own bonds worth $1,000 to pay for the deficit. 😉 That doesn’t work, right?
Social Security does not, repeat, not fund the deficit. It cannot do so.