Open thread October 22, 2016 Dan Crawford | October 22, 2016 9:49 am Tags: open thread Comments (77) | Digg Facebook Twitter |
I first came to Angry Bear to read the Social Security posts by Bruce Webb. They were very helpful for me to understand the system.
I’ve been thinking about a couple of issues around Social Security, maybe someone on this site has some insight.
The first issue relates to the so called use of Social Security numbers by other people. Does this really happen? For years, employers have been using the federal I-9 form to verify someone’s legal status. And there is also a system called E-verify to check up on a new employee’s status. So, how could one use a phony or deceased’s Social Security number at a regular job? And if this is happening, does Social Security or anyone else know how prevalent it is? Some folks claim that the Social Security system is being helped by people who pay in but will never receive benefits. Is that true, do we have any idea of that number?
The second question is why the physical Social Security card is so insubstantial. The new credit cards that are coming out are supposedly highly effective at curbing credit card theft, etc. There are new technologies with chips embedded into the card. So why hasn’t the Social Security Administration embraced a new technology that would make their cards much more robust? This goes to the first question, of whether some folks are using fake numbers.
Every American gets a Social Security number at some point in their lives, now earlier in life than when I was young. To claim a child on a tax return, a SS number is required (I think). Why doesn’t the Social Security card become a national ID card? Wouldn’t this help with all the state’s voting restrictions? Lots of folks don’t get driver licenses, but everyone gets a SS card. As for SS number theft, what if we had a SS number, but also an additional code. Credit cards have the three digit number on the back of the card that is required now for most purchases online. Couldn’t SS have something like that?
Coberly is a good one to talk to about Social Security also.
Another little Social Security Trust Fund game. Debate (Crooked) Hillary said she would add some money to the Trust Fund.
I always ask: which Trust Fund? You mean there’s only one? One cohort paid into the Trust Fund for decades — isn’t it now supposed to run it back down (to nothing — not exactly nothing; need one year of full replacement as a buffer to any future shortfall, giving Congress time to up FICA tax)?
Logically, we should be building a Trust Fund for the next cohort. We can add to the FICA tax enough so there is (once again) a surplus over payouts so we can buy up Treasuries and store them (meantime the FICA raised money can be diverted paying things that income tax would normally pay for).
But wait; How can we run down the first Trust Fund, cashing Treasuries with income tax when we are taking in more FICA tax than we need to pay current outgoes? Maybe we could have FICA1 AND FICA2 taxes — and separate funding streams.
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From now on let’s call anybody’s move to bankruptcy a “Trump Dump.”
your comment is essentially correct.
but in fact the Trust Fund is currently being drawn down. at least, part of the interest is being used to supplement the FICA income. As was long intended to help “generational equality” with respect to the large cohort of baby boom retirees.
As of 2018 the Trust Fund will reach a point where the Trustees will project short term insolvency: that means TEN YEARS in the future the Trust Fund reserve will fall below the one full year’s benefits kept as a normal reserve. If a one tenth of one percent increase in the payroll tax is enacted that year… and each year the trustees report “short term insolvency” the trust fund will NEVER fall below the normal reserve. moreover, the congress will never have to vote to “add to the trust fund.” The interest on the existing trust fund will keep the trust fund growing to keep up with the expected level of benefits, while helping to pay for those benefits (that’s a bit complicated, but i can explain it to anyone who really wants to know).
Even if the tax is not raised (about a dollar a week per year per worker) there will still be time to raise the tax enough to keep SS solvent forever. It would just have to be more than a dollar a week per year (actually, up to about five years after 2018, the dollar a week would still keep SS solvent, but not to the full one year’s reserve). And in about 2030 or so a 2% increase all at once (for each the worker and the employer) would restore SS to full solvency… forever.
The trust fund is not “built for the next cohort” it is… except for the baby boom exception… an ongoing pool of money kept in reserve for normal variations between the rate of taxes in and the rate of benefits out.
Hillary’s statement, if it as as you say, shows complete ignorance of how SS works. But that’s not surprising. NO politician or pundit understands how SS it works… but that is because they dont WANT to understand, and they sure as hell dont want YOU to understand.
I am not an expert on the matter you discuss. Hopefully reader Nancy Ortiz will come in and explain it to you.
But my understanding is that your fears have no real basis in fact. SS is not staffed by idiots and they do a good job of preventing fraud.
I have never been asked to show my Social Security card in fifty years.. I give my number when it is legally asked for… not very often… and if everything checks out with SSA’s records I am good to go.
Maybe a forged or stolen card would get someone a job… but it would not get them benefits.
The suggetions you make would be a bit bothersome and would not help with any real problem. Most of the stories you year about SS fraud are simply lies or gross distortions of isolated events (discovered by SS itself) in order to create distrust of SS by the people, so the liars can destroy the system… which the people need, and which they pay for themselves.
SS is not welfare. it’s a way for you to say enough of your money… very safe from inflation and market losses and some kinds of personal bad luck… so they can retire at a decent age.
The people who want to take this away from you do not have your best interests at heart. But they are very skilled iiars.
sorry for the typos above
“most of the stories you HEAR about SS…”
“it is a way for you to SAVE enough…”
“so YOU can retire..”
One thing the politicians may understand is that building and then depleting the Trust Fund over 60 years means 60 years where they don’t have to raise the FICA tax — very politically convenient. Or maybe they don’t even realize that. 🙂
it’s not certain that they even realize that. but it would be the income tax they wouldn’t have to raise because they’d be borrowing from Social Security with no intention of paying it back.
even one commenter at Angry Bear who in some ways knows more than i do about Social Security seemed a bit confused about the fact that SS does not have to be “actuarially solvent” for congress to borrow money from it. ALL the money in the Trust Fund is lent to the government (SS buys government bonds) until it has to be drawn down to pay benefits.
This may be one reason why they want to cut benefits, as by raising the retirement age (effectively a cut in benefits). They don’t give a damn about you or your grandmother, or you when you get to be a grandmother or just a “old person.”
pardon me for repeating what most people here have heard before:
it might be cosmic justice to raise taxes on “the rich” to pay for Social Security, but it is political suicide. FDR insisted that Social Security be paid for by the workers who would get the benefits, “so no damn politician can take it away from the.”
once the rich pay for social security they will find ways to turn it into welfare as we knew it. and, of course, as they are so fond of telling us about taxes on corporations, they will find a way to take the tax they pay out of your pocket.
is it worth all that to save a dollar a week… that you will get back with interest when you will need it a lot more than you do today?
oh, and in a vain attempt to avoid confusion
the rich DO pay their “fair share” for Social Security… up to the point where it makes sense for them as insurance in case they stop being rich.
and it’s their SS tax that makes it possible to insure everyone else against the fairly high probability that after working a lifetime they will have earned to little to have saved enough for even a minimal pension.
this stuff is not all that complicated, but it would take probably about an hour’s study, or an hour’s talk, to lay it out in a way that can be understood well enough so you can tell when you are being lied to.
I’ve done a little more research and have come across a 2010 study by the Social Security Administration.
This 5 page pdf goes into some detail on the numbers. They estimate that in 2010 about $13 billion went into the system from “unauthorized immigrants” and about $1 billion was paid out. They estimate that there were 1.8 million workers using fake numbers. The average income of these folks was $34,000 per year, 80% of the national average.
The report has an interesting section on the underground economy, those not using the SS system. They estimate that there will be 9 million workers in the underground by 2040.
The report also talks in some detail about how it is now much harder to obtain and use fake numbers.
probably at this point you know more facts than i do. the question is whether you realize how small a billion dollars is. SS takes in/pays out about 800 billion a year last time i looked.
i don’t know of any human undertaking that is perfectly “efficient.” not even in the private sector.
Just from Jim’s numbers it looks to me like SS takes in more money from illegals or fake cards than it pays out.
one way a person could cheat the system would be to work just enough “on the table” to qualify for benefits at the insurance-enhanced rate in which they get back more than they paid in (even allowing for inflation and interest), while they have been making money off the table and not paying taxes on that.
only thing i can think of to do about that is to teach people that it’s not worth the risk. i doubt that most of them really know they are cheating. they just don’t want to pay taxes. they don’t understand how bad it will be for them without SS, or even with only the low payout (even at the enhanced rate) that low income workers get.
When doing research I also came across an interesting artlcle about the IRS. They actually know that many folks are using fake numbers, but they don’t do anything about it. Instead, they issue a different number so that folks can file tax returns, get tax refunds, etc.
Here’s a link to a short article explaining the IRS stance.
Donald Trump invents a new kink — I mean new kind — of forcible sexual assault: you give in or he sues you for defending yourself in public.
Or maybe that’s not new — it sure is new in a presidential candidate.
but it’s certainly not true to law enforcement personnel.
the tragic fact is that people are prone to stupidity if not evil, and politicians all tell lies all the time.
the question is what can we do about it.
thanks. i’ll take a look at it. but why don’t you write us a short summary of what you have found out.
I read it. I don’t see any problem with it. Those people pay their taxes.
“this is a real person.”
if you are worried about illegal immigrants jail the folks that employ them. that should stop most of the “problem.”
or make them “legal.” that will help them not work for less than the employer would have to pay an American worker.
You have just mentioned the cheapest and most efficient way to control illegal immigration in this country, if not to end it completely.
“if you are worried about illegal immigrants jail the folks that employ them.”
The issue with SS is all those deferred taxes from 30 odd years of SS cash buying special T bills now have to be collected and disbursed to the payors of FICA “taxes”.
“it might be cosmic justice to raise taxes on “the rich” to pay for Social Security, but it is political suicide. FDR insisted that Social Security be paid for by the workers who would get the benefits, “so no damn politician can take it away from the.”
Soon the rich are going to have to pay taxes or lend to redeem SSTF t bills.
The rich run Klinton and the crooked dnc (needless literary redundancy) to them any use of the money for ‘domestic tranquility’ and ‘general welfare’ that does not fill profitable discretionary spending troughs is WELFARE!
Now as to the trust fund:
it is filled with t bills (accounted as intra-governmental debt by the bureau of the National Debt. That bureau is audited each FY and passes unless the pentagon’s discretionary trough that pays profits on a large part of US discretionary welfare fro the rich.
The last report is on FY 15, came out about a year ago.
Page 30 show SS Trust Fund rose by about $55B. Certainly some interest had to be “cashed” by the US cpmptroller which increased the cash deficit on the general fund side.
With the national debt fastly approaching $20T and labor participation rate at 62% and going down with no inflation according to the SSA and no end in sight of the Treasury endlessly printing money that is becoming more like confetti every day. It is no wonder we are entering into the greatest period of time in American history of lies, distortion and deception by the very top leaders of our government. I do not believe the distorted data from FRED like it is religion on employment and wages and government integrity or lack of it as many at this post do. The GDP is going flat line soon as nobody will be working or paying taxes for all the entitlements and free bees for everybody in the world who figures a way how to game the system. For me there is only one solution to all this greed, madness and insanity is to vote for Trump who will change the crony corrupt structure of just about everything our government is doing wrong and have found every creative means to cover their corrupt lies and deception from the public. For better more accurate economic data that is not biased or skewed to fit their political agenda go see EPI.com or other alternative news and media outlets other than the MSNM that has become very pro establishment biased and thus so will their economic good news reporting of the economy. Do you want to hear about the real economy or the fake economy? The real government or the shadow, fake ,puppet government? You must decide.
you are essentially correct, but just to try to keep our thinking straight:
if the payroll tax is increased one tenth of one percent per year starting in 2018, the government will not have to pay anything on the principle in the Trust Fund forever. It will pay part of the interest… something it hasn’t had to do, essentially, since 1984 or so. But it would have to pay on the interest if it borrowed the money from anybody else, which it would have to do anyway.
Unless it pays back the entire trust fund (including accrued interest). Then it would still borrow the money it wants to spend, including spending on paying BACK the money it borrowed from the trust fund.
And SS would have to increase the tax about an extra 1% in order to build up another trust fund, and invest that in private bonds. That would work fine, except that the people would have to understand that in hard times, ss taxes would have to go up to replace the money not coming in as interest. Leaving the Trust Fund in Federal treasuries is smarter.
Poisonous, insane comments.
But I did love the “printing money, confetti: thing.
We cannot afford to weaken the dollar. Oh, wait……………l
I think you have been listening to Republican propaganda too long. Do yourself a favor and try to look up the facts about all the things you are worried about. That will be hard to do because there are so many lies in print. You have to realize that if you think the Democrats lie, it is just barely possible that so do the Republicans.
Don’t count on Trump doing the things he says he will do. All I see from him is an unleashing of the right to hate your enemies. That would be really double plus not good for the country, including you.
One thing you have to do is stop looking at every nickel of spending you don’t like as if it came out of your pocket. I assure you your taxes go to those few government functions you do like. It’s people like me who pay for those functions you don’t like. And we are old enough to expect some “waste fraud and abuse.” We fight it …. fairly successfully except for the fraud and abuse that goes to the corporations and the criminal rich. After that it’s a matter of the democratic process to try to keep the waste under control while still trying to do what’s good for the country… including feeding the people that kind find jobs in the brave new world we have made.
Trying to hint here there is such a thing as a disease called greed. That’s not the same as the ordinary desire to have more money. It only becomes a sickness when it is obsessive… in the case of the “rich,” and ignorant in the case of the poor deluded poor who think it is the government that is stealing from the. No, the government tries to keep the predatory rich from stealing you blind. But in your blindness you vote FOR the people who are stealing from you.
Even honest private sector businesses are no more “efficient” than government. In fact, if you take an honest look at your own finances you will see some waste, self deception, and ill considered spending. You won’t see, unless you look very hard, the way the private sector cheats you. But I’ll give you a hint: you lost more money due to the 2008 failure of the bank fraudsters than you have lost to government “waste fraud and abuse” for your whole life.
for what it’s worth, the originan reason for corporations relocating abroad was that the strong dollar made it hard for them to compete in world markets.
“Strong dollar” sounds good to the ignorant. Doesn’t mean it is always good. (or always bad.)
I like the observation Bill McBride (Calculated Risk) made about the lack of SS cola’s: the income basis does not grow!
Either raise the rate or increase the income cap?
When I was working the money I made over the SS cap was feeling real good.
I only pay SS lately on intermittent p/t work.
I prefer raising the income cap.
EMichael is correct. Illegal immigration will come to a complete halt on the day the first corporate officer is indicted for hiring one.
David Dayen provides a hilarious retrospective of Poor Petey Peterson’s many attempts to kill of SSA via various high priced astroturfed front groups here: https://theintercept.com/2016/10/20/debate-moderators-under-the-spell-of-deficit-obsessed-billionaire-pete-peterson/
I’d almost forgotten about “The Can Kicks Back”. Priceless.
You’ll be happy to know that the cap is going up more than 7% next year.
the trouble with raising the cap is that you create enemies for SS you don’t need.
and it’s not worth it just to save a dollar a week.
very young children can’t tell the difference between the amount of liquid in a tall skinny glass and that in a short wide glass… that is, they think the tall glass has “more.”
apparently grown up progressives can’t tell the difference between a dollar a week and turning SS into welfare as we knew it so “the rich” can kill it at their leisure.
the rich already pay “their fair share” for SS… AS INSURANCE… in fact they pay in more in absolute dollars than the poor, and they take out less as a percent of what they paid in than the poor. the excess that the rich pay becomes the enhancement that the poor need in order to be able to retire.
it’s a shame progressive college professors can’t understand this in their desire to “make the rich pay” and put the poor “on the dole.”
FDR understood it and actually changed the SS plan as created by his own Commission to make SS paid for entirely by the workers who would collect the benefits “so no damn politician can take it away from them.” he hadn’t counted on the persistence of the damn politicians (eighty years and counting) and the stupidity of the college professors who think SS is a “regressive tax.”
it’s not a tax. it’s an insurance policy. the best one the workers will ever own. they need to keep on owning it instead of demanding the rich own it.
as you can see i am not in favor of raising the cap more than the routine raise needed to keep up with the rise in average wages.
where did you hear it would go up 7% next year? what was the reasoning?
Marxist professor David Harvey’s remarks on the crisis facing world capitalism are captured in this well edited compilation. 45 minutes you won’t regret. https://www.youtube.com/watch?v=4JQPnbN6ALo
For those who are worried about the future solvency of SS please go see Alex Larson at SocialSecurityWorks.org to relieve your anxiety. As for the millions of manufacturing jobs that have disappeared over the past 20 years or so I do not think many big business decisions made to produce out of the country was because of the strong dollar. I think it was more to get around the unions contracts and for cheap foreign labor. The cheaper dollar was done more by Japan ,China and now S. Korea manipulating the values of their own currency for the greater spread advantage…Why are our current government leaders so stupid? Answer. Because none of them has ever actually run a business, created a job or worked in free enterprise. We cannot afford four more years of no economic gain in our society or SS will surly go broke if nobody is no longer working and paying for that so called insurance. If I remember correctly all the big banks and AIG were massively bailed out with secret hidden loans from the treasury. The only bail out that should have happened was the TARP loans to the auto companies. All the banks and AIG should have been forced into bankruptcy along with Trump enterprises and we all would be much better off and much further ahead today as a nation. No more bail outs should ever be given by a socialist government ever again and the government massive printing of endless money must be stopped as it is only another form of a bailout for the governments mismanagement of everything…Thanks for the David Harvey video at least he knows what is going on and happening with too big to fail corrupt government.
Larson of Social Security works knows that SS is not going to go broke, but he wants to turn it into welfare as we knew it.
You see, “the poor can’t aford to pay an extra dollar a week for their Social Security (actually the poor would only pay about an extra fifty cents per week, it’s the average worker (50k/yr) who whould have to come up with the dollar) so it’s better to “demand the rich pay their fair share” so they will own social security and cut benefits while you, dear reader continue to pay the “social security tax” but have to go to the government proctologist to have your assets checked to be sure you don’t have too much money to be “given” the social security benefits you paid for.
Larson was one of those I was saying was too stupid to understand the difference between an extra dollar a week and the chance of no social security at all. Don’t feel bad if I call him stupid. He calls me much worse.
As for the rest of your theories of economics, well, maybe it wouldn’t do much good for you to try to find out the truth after all.
Did you actually watch that, A.S.? The Canadian’s “ideal” distribution of wealth is so insane that a person in the 50th percentile would have MORE wealth than someone in the 70th percentile!
yep. now see if you can find the rationale of the “automatic adjustment.”
if you note there were several years just prior that the cap did not go up at all. average rate of increase looks (by eye, no calculation) about right for growth in wages including inflation.
It’s what people think the distribution should be. I’m not clear on the sampling methodology, which might explain such an anomaly (just supposing, tbh I don’t know) but can’t help thinking you are missing the key point.
Which is that just like in the US people way underestimate how unequally the wealth is distributed. Moreover as professor Harvey explains, this is 1> not an accident, it’s basically the way the system is setup and 2> will only continue to grow over time.
If income and wealth distributions continue to become more and more skewed towards people who are already wealthy, doesn’t that sort of destroy the idea of a robust growing economy? Where are the customers expected to come from once the 1% already have multiple homes, planes, etc.?
Covertly, the rationale is at the top of the page. The wage base, by law, can only be raised when the benefits are raised, which is why there are some years in which the wage base did not increase. But the wage base is based on AVERAGE wages, not median wages, so increasing income inequality pulls more people under the cap as the average and the median diverge.
A.S., you are missing a key point, which is that there is considerable fluidity between income bands. A kid out graduating from college might be in the 4th quintile, and rise to the top quintile as he retires, and go back to the 4th after retirement.
“You’ll be happy to know that the cap is going up more than 7% next year”
No, it is going up ca. 5% next year. Considering it’s been the same for the past two years, that’s not much more than inflation.
>> You’ll be happy to know that the cap is going up more than 7% next year.
> No, it is going up ca. 5% next year.
127,200 / 118,500 = 1.073
That is a 7.3% increase.
What I hear nobody saying here is the fact that if we had a rising GDP and labor participation rate rather than declining we all would not be so worries about the future solvency off the DDA. The greedy elites of WS and the big 6 banks would not be trying privatize our SS so they can game it. A &.3 % rise in the cap only means to me that the common Joe will have to pay into it a bit longer just about every year to sustain its solvency while our economy is dying a slow death very deliberate but slowly. If this crap continues the frenzy and panic will only get louder and worse. A stronger, thriving and growing economy is the only path, not higher taxes every year.
“A 0.3 % rise in the cap….”
No — there is a 0.3% rise in BENEFITS next year, along with a 7.3% increase in the cap (the wage base).
The “common Joe” does not hit the cap. Only about 6% of workers earn more than the taxable maximum: https://www.ssa.gov/retirementpolicy/fact-sheets/tax-max-earners.html
thanks. i did not see the top of the page. not sure it came through on the link.
but i am not sure the “reason” explains why the cap increase is more than the benefit increase (i understand that it’s based on a wage increase which would be real wage plus inflation, but i suspect that the 7% also “makes up for” the years when there was no benefit increase and therefore no cap increase.”
i am perfectly fine with the “normal” cap increases. it is those increases “demanded” by the insane laft to “make the rich pay their fair share” that worry me. they would turn SS into welfare as we knew it, and then the rich would destroy SS at their leisure.
your point about average vs median is well taken, but i think average is the right measure. the point is that SS needs to remain “fair” as a cost of insurance even to those at or above the cap. making the cap capture a certain percent of wages is a justification that makes no sense in terms of what SS is designed to do.
i don’t have my calculator and can’t do it in my head anymore, but i think Joel’s mistake was to use the later value as the base for the percent calculation, which would be wrong. but it’s a trivial mistake with no real meaning for anyone except the math teacher.
Ryan is right in part, but his reasoning seems so confused that i can’t follow him. An increase in wages would be the ideal solution for SS, but since wages are not increasing and we don’t have an obvious way to make them increase, we fall back on the idea that SS is INSURANCE and it’s whole point is to help provide for your retirement when your wages would be too low otherwise (or other disasters money is heir to). There is no value in standing on the street shouting what SHOULD happen while ignoring what WILL happen, and what is already in place to deal with that.
again, thanks for the summary of the rationalization. my browser did not get “the top of the page” and now i can’t get the page at all. if more people would have the courtesy to summarize their point instead of “click the link” this whole business could go faster, poor people like me could keep up with the conversation, and those who read the article in the first place might actually gain understanding by having to summarize it.
ah, for the old days.
meanwhile… check my thinking on this: if the cap rises as a function of the average wage as opposed to the media wage that is a good deal for the lower wage workers. consider, if one worker gets a raise equal to the entire wages of everyone else, the average wage goes up while the median wage stays the same. this would raise the cap, a formula based on the median would not. that is arguably more “fair” (in leftist terms) than basing the cap on the median.
but probably less “fair’ in rightist terms because the tax on the one rich guy would go up while his benefits and risks (of needing the benefits) would not.
i don’t get too excited about tiny changes in “fair.” i do get a little excited when one side demands a “fair” that is ill thought out and maybe not at all fair.. in a significant way… to the other side. especially if they are so not-fair they will provoke backlash.
it could be argued that the current distribution of wages is “fair”… after all they are determined by the marketplace. but it could also be argued that the distribution is not fair from a moral perspective… workers should not be denied a reasonable share of the wealth they help to create whatever the (unfair) marketplace would determine.
i part company with both the greedheads who think that the only thing that counts is the marketplace (what the traffic will bear) and with those who think that the only thing that’s fair is absolute equality.
surely we are smart enough to see we can come up with something better. and experience does show that when the workers prosper, so do the rich.
Mr. Ryan (rightly) does not trust the motivations of some who want to privatize Social Security. And I do not see a good way to increase wages, either. There are some, however. I recommend the book, The Big Squeeze. https://www.amazon.com/Big-Squeeze-Steven-Greenhouse-ebook/dp/B0017L8N6O/ref=sr_1_1?s=books&ie=UTF8&qid=1477327166&sr=1-1&keywords=the+big+squeeze+tough+times+for+the+american+worker
It has some interesting ideas about how to unionize large sectors of service workers simultaneously to avoid job losses, and some success stories in that regard. But overall it is not a pretty situation for American workers — squeezed by outsourcing on one side and mass immigration on the other. Low-income workers are, of course, the most squeezed, because they are the least skilled. Looking at Figure B-7 of this Brooking’s study, we see that wages for the lowest 30% of male earners peaked around age 30. That’s VERY frightening.
“[If] the cap rises as a function of the average wage as opposed to the media wage that is a good deal for the lower wage workers. [Consider], if one worker gets a raise equal to the entire wages of everyone else, the average wage goes up while the median wage stays the same.”
It’s more than that, Coberly. An increase in the Wage Base also increases the amount that prior contributions are counted toward retirement benefits.
yes, but remember that benefits are paid out of taxes, which include those “extra” taxes from the (normal) raise in the cap. which is, i think, what we were already saying.
as fpr the wage growth of the average low wage worker stopping at about thirty, i’m not so sure that is new or unusual. i remember once noting that while chemical engineer graduates were hired in at impressive wages, their wages did not in general increase over time.
also, andrew biggs points out that 40% of adjusted lifetime earnings may be a better retirement income (from SS) than 70% of final earnings as typical of a private pension plan.
because it turns out that real wages peak long before retirement even for relatively highly paid workers. poor andrew. after telling us for years what a bad deal SS was, he is now telling us it is too good a deal for us to ask for benefit increases.
i can’t solve every problem in the economy. i can only tell you that about a dollar a week increase in the payroll tax would keep SS solvent forever. and that would be a good idea, avoiding a whole nest of other problems that would actually kill some people and make the rest of them spend their lives in fear of being killed by poverty in their old age.
Coberly I can see that you just don’t get what needs to happen to make our entire government and SS solvent again. You chance to make in part of what should happen is on election day. Remembering that you cannot solve problems with the very same people who created them is a famous but true quote. Not mine. Therefore when we start to put VAT’s on countries with huge trade inballances and corporations that want to game the system by moving production oversees which will go to our new Freedom Fund that will pay dividends to the underclass. We are beginning to address the wealth inequality problems of predatory globalism that recognizes no border or democracy. They will pay to play in the US and if they don’t like it here then take all your business to China and see how much profit they let you keep. We have to start somewhere and to me Mr.Trump has far better ideas to that go to this direction than HRC does with just more socialism and higher taxes won’t cut it…We need much higher regulation for the larger corps and much less regulation for small and medium size businesses to do this along with less big corp taxes to bring them back home to invest and repatriate the $2.5T currently sitting off shore…
i might agree with you about some of what you say, but the fact is that we can continue to pay for our own social security forever just by paying for it ourselves, for what we need, at the cost necessary to cover out needs. That will turn out to be an extra dollar per week.
Your approach is a dangerous Rube Goldberg proposal for things we don’t know how to achieve, probably cannot achieve politically, and might not work if we could enact them politically.
I say go ahead and try to get what you think is the “right” solution to every economic problem. But in the meanwhile PAY FOR WHAT WORKS NOW so that you won’t lose it waiting for a political miracle to bring you to the promised land.
And don’t expect Trump to be able to deliver on what you think he is promising. He doesn’t seem to me to actually know much about how things work and he prefers “solutions” that hurts people he doesn’t iike. He represents a very dangerous primitive instinct in all our natures and one that when it gets a political voice lets loose hell on earth.
Coberly you worry me because it is said that we must be careful what we wish for. So more to your last sentence is a few verses in the KJV Bible in the Book of Revelations Ch. 6 there is a story about “The White Horse” as an allegorical figure that gives magical protection for lies. It is said that it is the most powerful weapon for gaining political power and protection for political lies. In Verse 2 it says “And I saw and behold a white horse: He sat on him and he had a bow, and a crown was given to him and he went forth concurring and to concur”. This man will change to any position . He lies with no moral distress. He will say almost anything as he is emulating the Christian anti Christ and he does not know it….Now to you which presidential candidate does this old bible story sound like they are talking about? This worries me a lot more than the SSA going broke long after I’m gone.
SS will not go broke. It might get mugged by the big liars… of both parties.
as for the anti-christ, my understanding is that he will come “riding on a white horse”… that is he will be welcomed by the people as their hero,
while he is invoking the name of Christ to do evil things. the most evil of which is to seduce the people into doing the evil in their hearts while they tell themselves they are doing it for “the good” of the country, of the race, of humanity..
i don’t think the “end of times” is any particular time in history, it is the end of each of our times.. a parable for the results of our evil actions… those we tell ourselves are “good” because they “defeat the enemy.”
not sure any orthodox christian would agree with me.
you think Hillary is a liar because you have been told so many times that she is. Hillary is no more a liar than any other politician. they ALL lie. they have to. the people will not vote for someone who tells them the truth. certainly you need to ask yourself if the people telling you HIllary is a liar are lying to you.
Look and listen to Hillary. I looked and listened to Bill.
What they both say is/was hollow.
Neither have any convictions.
I will not vote for a Clinton in 2016…..
same as in 1992 and 1996.
Yeah, every politician lies, the Clinton have perfected it.
It seems that most people are not voting FOR anyone, but AGAINST someone. Our voting system should allow us to do that. By my unscientific polling, that method would give Gary Johnson the victory in my state with +12 votes. Jill Stein would be second with +5 votes. Trump and Clinton would get -1.2 million votes and -1.3 million votes, respectively.
Coberly it seems that you again are not see the picture when you rationalize and basically justify lying at the highest offices of power in our country like it is ok because “they ALL lie” and have to. I do not agree with this crap especially when in other venues having high moral ground is not only expected but demanded. Why should our government leaders not be held to the same or higher standard? For more on this go see TED.com 10-22-16 where they ran a piece titled “A.I. makes human morals more important than ever. Also a while back PCR.org ran a piece on why has Google has visited the White House 437 times in the past 2 years? Why do you think? Was it all about notional security as they will tell you or more?
A fair bit of this thread deals with income inequality. Let me introduce a good source on that topic. Social Security publishes an annual report that measures every penny of earned income from workers. The latest report just came out.
A few highlights:
To be in the 10% you must earn $92,424
To be a 1%er you have to make $250k
To get up to 0.1% the hurdle is $3m a year. (how many ball players make that?)
An interesting fact – Of the 161m “Wage Earners” 14%, (or 22 million) earn an annual income of just $2,089.
What to make of that? This the largest percentile of all workers. It has a significant consequence to both average and median income definitions.
How much of this low pay is reported income from a job that pays little, but also allows the worker to receive unreported tips?
do you ever consider that it might be you who who is not getting the picture.
i said all politicians lie. you seem to think only hillary lies and don’t even consider that it might be the other politicians who are lying about hillary.
the reason all politicians lie is because they have to. the voting public just doesn’t know enough or can’t think clearly enough to for a politician to try to get them to understand the truth… even if that politician understood it himself which is mostly not likely.
i think there is a difference between pernicious lies and beneficent lies. telling people what they need to believe if they are going to be moved to “the better angels of our nature” is not the same as lying to people to lead them on the path to destruction.
even Jesus “spoke only in parables” “lest the wikced hear and hearing turn and i should save them.”
moral to the parable (if i understand it) is that it is the wickedness in your own heart that determines which “lies” you believe (or “how you understand a parable”).
you, William Ryan, choose to believe the lies that answer the wickedness of your own heart. my own brain is not adequate enough to understand just how having an inadequate brain fits into that equation, but i think i know it when i see it.
if they only report two thousand in income, they only get SS credit for 2000 in income.
the last time i checked those making 100k a year or more made as much money as all of those making less than 100k, and i think that is roughly the top 10% of earners as you tell us in your note.
i am not one of those who cares very much about income equality. what i care about is that workers get a decent wage… a wage they can live on, including saving for health care and retirement. This is not the wage determined by “the market red in tooth and claw.” because the market is not “fair.” It is a manifestation of political power.
i wonder how many of those 2k workers are in school working part time, or wives with a part time or “side business.” I suspect there is a lot of under the table work/compensation going on… maybe almost as much among low wage workers as the various kinds of tax dodging that goes on among the “elite.” that is “number of transactions,” not “amount of transactions.”
so what’s your point? end tip income? i’d be for it. pay the waitress a decent salary and forget the tips.
one other comment
when the CEO of Wells Fargo makes millions of dollars cheating his customers, it’s not the “inequality” that offends me. it’s the cheating.
take the crime out of high income and we might stop worrying about “envy.”
Coberly you amaze me that you admit that your own brain is not adequate enough to understand just how blatant lying and deception at the highest levels of our government fits with your equation? But you know a lier when you see one. Then you go on to say that wealth inequality does not offend you either. Did it ever occur to you that many of the ultra high incomes, excessive profits, differed dividends, stock options ,day trading, golden parachutes, one way “free trade”, nation building, corporate off shoring and inversions are just some of the many tools of the oligarchs predatory globalism. Forget what party you want to keep bringing up. What happened to morality, responsibility, truth, trust and personal integrity does not matter to you? There are those who cannot see and those who refuse to see. I ‘m starting to realize that you choose the later…
Friends, does someone you love suffer from Debt Derangement Syndrome? Distinguished financial regulator and associate economics and law professor Bill Black helpfully explains the warning signs in this helpful post at Naked Capitalism: http://www.nakedcapitalism.com/2016/10/bill-black-debt-derangement-syndrome-saving-our-grandkids-from-wall-street.html
If they can’t get help from Bill Black please get them help somewhere.
i said i didn’t see how inadequate brain function fit into the “you believe according to the evil of your own heart” equation.
i was wondering, assuming my understanding of a passage in the Gospel, whether stupidity was an excuse for believing things that led to actions and thoughts that hurt others as well as your own soul.
i raised the question whether you were believing the lies about hillary being a liar because there were reason related to the evil of your own heart why you wanted to believe Trump and Republicans in general. But after reading your very confused writing, I wondered if “evil” was the wrong word, and just mental inadequacy was a sufficient explanation.
your first sentence in the latest comment misses what i said entirely.
and your take on what i said about not caring so much about “equality” misses the point: lots of people are now running around screaming about inequality. since i don’t believe that ALL “inequality” is bad, I suggested paying more attention to “criminality”.
somehow you got the idea that because i said i didn’t care much about inequality that i did not care about criminality. i think it’s a reading deficit disorder.
most of what you think you “see” about me is a product of the disorders of your own mind.
i don’t know how to help you.
Coberly I’m not an evil person nor have any mental disorder because I believe that Trump is right and Clinton is wrong and that she is a proven pathological lier. As for helping you with all your double speak talk that approaches total denial and obfuscation of HRC’s reality, I will pray for you is the only way I can help you…Perhaps we can change the subject a bit to something more intelligent… With the ACA projecting a 25% rate increase for many come November. How is it that the SSA says there is no inflation? The SSA is using the wrong index to measure true inflation and not giving proper COLA increases. Therefore the system the SSA uses is flawed or corrupted or both. Does this reflect more waste fraud and abuse of another government agency under the Obama-Clinton administration? Which government agency is lying?
WR – Neither agency is lying.
The COLA for Social Security is based on CPI-W. All the info is in the link. CPI is low due to gas prices. You may not like that result, but it is not a lie.
ACA premiums are going through the roof. These prices are based on supply and demand. It is supposed to be a market place. But ACA is in the process of failing and needs a big fix. The price increases are not a lie.
Social Security recipients are usually on Medicare, not Obamacare.
well, never thought i’d say it
but thank you Krasting and Warren for trying to help William.
i don’t think you are evil. i was trying to sort out in my own mind if your believing Trumps lies as opposed to Hillary’s lies expressed the “evil in your own heart.” I decided that mere stupidity could account for it.
Now, do I think you are stupid? To be honest… well I don’t know a kind way to put it, and whatever is behind the way you garbage up everything i try to say, it may not exactly be stupidity. maybe it is the stupid way i say it.
and, inspite of Warren’s and Krasting”s explanation of the non-effect of medical costs (note slight change of term there which may invalidate my logic, but helps my… and your… point) i would say you make a good point about just what “cost of living” means to the people who wrote the law that requires SSA to use CPI, and what it means to the people who estimate CPI.
this issue has been before the country several times. without honest resolution in my opinion. howver i am not an expert on measuring inflation so my opinion might not be any better than yours.
Coberly, regarding your last comment on stupidity, I recommend Democracy and Political Ignorance: https://www.amazon.com/dp/B00F2NY0UG/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
Here is a good summary: https://www.cato-unbound.org/2013/10/11/ilya-somin/democracy-political-ignorance
Slippery slope anyone? https://twitter.com/RachelBLevinson/status/791025099562508288
And of course since the surveillance is private, not government sponsored, there’s no reason for any kind of bothersome review by pesky judicial activists.
it is easy for me to get myself misunderstood. i mean something by stupidity that most people don’t. i have known plenty of Ph.D’s who were stupid.
the other day i heard on “intelligent radio” a PhD arguing that we should limit the franchise to only those who could pass a test (about economics mostly). Passing the test would mean that they agreed with him about the standard economics catechism. Fortunately democracy does not depend upon the people understanding economics or international politics or military strategy. It only depends on the people being able to tell their leaders where it hurts. Then it’s up to the leaders to fix that or face being replaced by someone else who claims to be able to fix it. Democracy stops being effective… if it ever was… when the leaders are immune from being replaced… perhaps because they all belong to the same gang and take turns playing good cop bad cop. We may have arrived at that. I was not over impressed with Bernie Sanders solutions, though I think they might be a good place to start… at least far better than the Trump “hate everyone not like you” mantra (one not so far away from the radical libs who hate “old white men…. oops, “males” (because old white males are not men… humans… of course.))
I need to stop using words like “stupid.” They don’t help. But, between you and me, I often despair at the “thinking” I see other people thinking they are thinking… even the college graduates… even me at times.
i won’t have time to look up your links. could you summarize them?
The second link IS the summary of the book. In VERY short terms, since one’s individual vote is really not likely to decide an election, it is rational for voters to remain ignorant — they have better things to do with their time.
Even those who do take the time come in with a confirmation bias. As an Eagles fan, I accept good news regarding the Eagles without skepticism and question any bad news about them. (OK — bad example. Eagles fans are, as a group, unusual in that they are just as likely to scream AT the Eagles as FOR them.)
Thus the author advocates for greater local control over things, so that people can “vote with their feet.” If the education system in Massachusetts is better than that of Arkansas, and that is their top priority, people can move. If taxes are too high in New York, people can choose to move to Georgia if taxes are their top priority. Since such decisions are individual choices that affect the individual and his family, he will be more deliberate in gathering information and making an informed judgement.
With the “tell them where it hurts” theory of voting, much information is still required. Can the government do anything about this hurt? What have they done already? Is it working? Will his opponents ideas work any better? That takes time and an evaluation process that is really beyond most people. But with more local control, they can just see that what is giving them pain in Jefferson County is not giving his friends in Washington County pain, so he can move to Washington County.
it’s not my reading speed that makes me ask for a summary. many web sites do not work well with my browser and usually the linked site is not worth the time and frustration i have to go through to get it.
besides, the effort of summarizing the article is good for you, and helps avoid the arrogance, and ignorance, of those who think they are contibuting to the conversation by saying “you’ve got to read this! [link].”
i think you (the author) probably agree with me about the voters ability to understand the “issues.” i am not so sure that local control solves the problem. it’s just as hard to move to arkansas as it is to move to china (some exaggeration there, but “moving” is not a trivial decision and will not be a rational response to, say, “tax policy.”
generally local control means control by local bosses and the local dominant industry. this had not been good for ordinary people in the past and i would not expect it to be good for them in the future.
i had similar ideas in the way back days when i thought the federal government was doing bad things. it is still doing bad things, but the civil rights laws were a good thing, and generally the “local control” people are in fact the bad guys. i say that even though Oregon is generally a better place to live (politically) than Florida or even Nastychusetts…
in short (too late for that?) i am not expecting any simple solutions to the current problem. maybe some accidental results from the Bernie and Trump factions will help with some of it. but i am not optimistic.
(why would i expect something good to come from the Trump faction? because i believe that most of their nastiness is a predictable human response to bad times and if they get together with the other side– whose nastiness is concealed behind political correctness but who are similarly motivated by bad times, something like truth, or at least a good enough temporary solution will emerge from their need to work together to loosen the grip of the current dominant faction….who are not all that different from the “nobles” of the Ancient Regime who evolved from a system that worked for its time and then became too entrenched not to become corrupt and stupid.
of course you see people all over the world “voting with their feet” and you know what “we” think of that.
moving is more consequential than voting (on the individual) but a decision to move will be no better informed than a decision to vote… in most cases.
We think such voting with one’s feet should be done legally.
The premise is that an individual’s choice to move not only will be better informed, since it affects one immediately and directly, but also requires less information to make an informed choice. It is easier to determine that a particular county or state has a better job market, or a better school system, or better tax structure than the one in which one currently abides. It is a lot less easy to determine what the government can affect, how long it will take, and whether the current officeholder’s policies are better at achieving that end or his opponent’s are.
people who are starving or being killed aren’t going to worry too much about “legal immigration.”
and who is going to decide what is legal immigration of you turn to “state’s rights”. the federal government? no. the state governments?
well they tried that before the civil war and it didn’t work.
meanwhile most people will not make better decisions about where to move than they do about what to vote for. there are too many factors and human beings just don’t deal with with very complex information. they’ll run away from a forest fire, but they won’t stop the land use practices that lead to forest fires.
i’m afraid your idea is just a fantasy and your rationalizations for it just wishful thinking
and it all arises out of that old, old “state’s rights” thinking that came out of the slave empire.
the states have plenty of rights. but the states are not in a position to make decisions about war or the economy or human rights or environmental devastation..
(or, some states will do better, but while thousands of blacks fled the old south, not all of them did. and who is going to protect those who can’t?
put another war “states rights” is just the mantra of biggish little frogs who want to rule their little ponds without do gooder bigger frogs from Washington.
You really would be well served to read the book, Coberly. Prof. Somin does address the question of slavery. Had it not been for the states’ rights you decry, slavery would probably have been legal throughout the United States, since eight of the thirteen states that ratified the Constitution were slave states at that time.
As for those Blacks who could not leave the Jim Crow South — what prevented them from leaving?