Just a thought on the Social Security (so-called) Trust Fund. There is all of three years of full payout “saved up” in there — not counting one year for legal solvency. That is supposed to cover many coming generations of retirees? That’s the setup.
That realization is why I now call it the loaves and fishes fund — after the miracle where Jesus famously fed 5000 people with a few loaves and fishes. Alternately, perhaps Social Security knows the exact date of Jesus’ return (and the end of the world) and can match it to just the point when “Social Security will run out of money” (if you don’t count income from the FICA tax).
Now I no longer call it the TF — I call it the JCF. :-O
i wish Denis had read my last two posts on SS. or maybe the ten or twenty before that,
The Trust Fund was never supposed to last forever, Originally it was “merely” a prudent reserve of one year’s benefits to tide the system over in case of recession or other mismatch between revenues and benefits,
then in 1983 it was wisely expanded to build up a reserve to help pay for the Boomer retirement which otherwise would have been too large for the following generation to fairly pay for the larger generations retiremeint, while the Boomers would have paid les than than a fair price for their own retirement due to their larger numbers compared to the smaller number of retirees in the generation before them,
there is no precise way to say when this “extra” Trust Fund will run out, because there is no precise way to predict the future. But prediction of the probable date have been quite consistent since 1983.
Thing is, even back in ’83 the Trustees knew another payroll tax increase would be necessary due to the longer life expectencies expected for future generations.
I, even I, have calculated and presented here the approximate cost of that increase. Oddly enough I agreed with the Trustees. It would be, and still will be, about 2% of payroll for each the worker and the employer.
What I thought I contributed was the observation that that increase could be arrived at gradually by raising the tax one tenth of one percent in any year the Trustees projcted that the Trust Fund would fall below the requried 100% of benefits within the next ten years, That one tenth of one percen is about a dollar per week per year.
Then the payroll tax holiday brought the “death of the Trust Fund” a lot closer… within two or three years if the Congress does not repay the Trust Fund the money it diverted to “the economy,”… in a coinpletely backward (dishonest) effort at “stimulus.,”
I wrote last time that either the payroll tax holiday scam, or the real Covid Recession could be paid for as far as Social Security was concerned, by… wait for it…. raising the payroll tax one tenth of one percen per year .
The difference between the before the Covid Recession / payroll tax holiday, that about a dollar per week per year cost would have been met more gradually as the number of years it would be required would become less and less over about the next fifty years. With the Recession ? holiday the increases will have to come almost every year for the next twenty years.
But it seems that Denis is not the only one who has not been listening.
Something is very rotten in Washington, and it isn’t only the Republicans.
and one only has to listen to the pundits and the “fact checkers” to realize it isn’t only the politicians,
The Social Security Trust Fund is not a magic pot that gives you money when you need it.
You have to pay for your own groceries when you can no longer work, one way or the other, The Social Security “tax” is the easiest, simplest, and fairest way to make sure you will have enough when you retire. It does have a few special provisions that make it work “like magic” if you don’t understand money at all.. But it is not proof against the dishonesty of politicians and the refusal of the people to understand it and protect it.
many typos and just bad writing might make my comments above hard to understand, i can explain them better if anyone cares.
Bill: I am writing from two different computer addresses. if that causes your system trouble, let me know. this one is easier to use, but it’s brain is failing too.
Coberly, very interesting — I had no idea they had a sensible end planned for the Trust Fund. But, since nobody else knows either (seriously), when you hear the issue discussed it is always in exactly the same mistaken terms that I have spelled out (or so it seems to me). Ergo, I am right subjectively — even if you are right objectively. :-O
Depending on your viewpoint either the two party system is to blame (although this less narrow a bind with first past the post and gerrymander) or it is just a fact of life in all politics. Those in the middle always end up being the swing voters who have to be pandered to. There is no getting around it.
Reason
yes, Drum has a point. but it should also be noted that the”radical Left” contributes to losing elections by sitting home and sulking because they only get to vote for “lesser evil”.
By now, none of this may matter. The R’s have gerrymandered and voter suppressed democracy out of meaningful existence… even democracy that respects minority rights. I suspect they also control the voting machines and there is no doubt they WILL control vote by mail now that they see it is a factor.
If the Dems win this time they can begin to change this by including the radical left, and the radical left can begin to change this by working with the Dems, on policies that can work to reduce at least the existential stress on the working population.
That said, I watched an interview on TV the other day with Wolf Blitzaer abd Nancy Pelosi. Blitzer show how completely stupid he is by repeating “lets not let the perfect be the enemy of the good” anbd “1.8 Trillion Dollars is a lot of money, so Pelosi should vote for the R plan to reduce the suffering of the people.
Pelosi did not help matters much because her explanation of her position fell well short of specifics. As a politician she was trying too hard not to be offensive to Blitzer, and had easier recourse to Dem slogans than to the relevant facts.
But Blizer’s condemnation of Pelosi (and that’s what it was) fo not accepting the R “plan” ignored the fact that the R plan would be no help to ordinary people. It’s a little as if the king’s advisors said “Sir, the people are freezing!” and the king said, ” okay, take this 1.8 Trillion dollars and burn it in the furnace. that will help them stay warm.”
I got in trouble with the S word when the radical Left brought out it’s plan for saving Social Security. Their argument ran:
“There is nothing wrong with Social Security but we can fix it.”
“Social Security works because the workers pay for it themselves, but we can fix it by making the rich pay for it.”
I said, but that’s stupid. I meant the argument was stupid. But they chose to think I was calling them stupid personally, and that moreover I was a racist… because the person who read my email happened to be black (I suppose: i would have had no way of knowing) and she thought I was calling her stupid. I was not calling anyone stupid; i said their argument was stupid, as it is. So they started calling ne “insensitive” because I kept trying to tell them I was not a racist and i was not calling anyone stupid, Then, to teach me how insensitive i was, they called me an asshole.
there is nothing wrong with Social Security as long as the workers pay for it themselves, The cost of Social Security will go up a small amount because workers are living longer. Workers can pay this increased cost themselves at a rate so small they would never notice it, and which is exactly what they are going to have to pay for their longer lifespan when they can no longer work. And since they are paying for it themselves there is no reason they should not pay for retirement at a reasonable age instead of being forced to work longer because that’s the “obvious” solution to people like Newt Gingrich and, yes, Bill Clinton.
Why do those people want to raise the retirement age, or make SS otherwise useless as insurance against poverty in old age:
well, as they have pointed out, every year for every person who does NOT retire the “economy” is 90,000 dollars richer. (they said this in 2007 when the average worker was definitely not making 90,000 per year. So who is this “economy” that is going to make an extra 90,000 per year per non retired worker?
Here are some numbers to help Denis better understand the Social Security Trust Fund.
$1,059,300,000,000 = costs of SS
2,500,000,000 = amount by which TF changed (increased)
In 2019 the TF only changed by 0.2 percent of the annual cost. Income exceeded costs by 0.2 percent. A nearly perfect balance.
In 2008 the surplus was 180 billion, in 2010 it was 68 billion. That 114 billion change due to a recession is what the TF is there to deal with.
The idea that the TF is an endowment rather than just a buffer is the great liberal myth about SS. The Greenspan “fix” in 1983 has allowed Congress (including liberals) to ignore the need to adjust SS to stay in balance even though they knew at the time that it was not a permanent fix.
The demographic change over 50 years swamps the change caused by a recession.
The NW Plan includes “triggers’ to increase the payroll tax rate as required to keep SS in balance and maintain scheduled benefits. Coberly reports what the increase would be if we end up following the “intermediate” projection, but if increases are not needed, they don’t happen. Because there are no projections in which people start living shorter lives, there are no projections in which payroll taxes ever decrease.
In the intermediate projection which has been accurate for the last 35 years or so, there are no circumstances in which the tax ever rises more than two percent of payroll (for the worker and also for the employer)… and this doesn’t happen until wages have risen by at least twenty percent.
i suppose that if wages went up faster than projected, the tax could be lower, or benefits could be increased. Or an more than projected increase in the population would allow the tax to be decreases…
not that any of these are likely.
I don’t know what happens if the covid recessio lasts longer than about a year, or the Trump “tax holiday” never gets paid back, but as i said above, if either of these are limited to about a year, the only that happens is that the needed one tenth of one percent per year would need to happen sooner and more frequently than would have been the case before Trump and Covid,
Right now there is more danger from Trump and the R’s (and the Dems) than there is from rising costs to SS.
Income inequality is bad for Social Security. If the workers actually got a larger portion of GDP – (if I understand your number) getting to 20 percent wage rise sooner – then Bruce Webb’s idea that we could be closer to the low-cost projection might be less idealistic than it really was.
the 20% wage rise has nothing to do with income inequality or percent of GDP. it’s just the number you get when you use the Trustees projection of expected increase in wages per year (about one percent… a low number by historical standards but about what they are predicting going forward…
the same twenty years it would take for a one tenth of one percent per year increase in the payroll tax every year. up until this year that increase would not have been needed every year, but now it’s likely that is what will be needed.
of course wages could rise faster and that would also slow down the needed rate of increase in taxes, Bruce was my best friend on the internet, but embracing the “low cost” projection was more hope than science. about the same as the bad guys looking at the high cost projections and using them to scare people. the intermediate projection is THE (most likely) projection. the high and low cost projections are just to give some idea of the range of what could happen under far less likely (to the actuaries) scenarios.
income inequality, though bad, and “percent of GDP,” though a base from which to argue “fairness,” really have nothing to do with SS… which simply aims at the lowest tax rate that will provide future retirees (or current retirees) a sufficient but modest retirement income, and not overtax them which would limit their ability to (try to) get a larger retirement income by private savings and investments, SS is supposed to be just insurance in case all else fails…which it does for about 50% of the people.
One of the factors in the intermediate projection is the Ratio of OASDI Taxable Payroll to GDP. It has gone from 40 percent in 1983 to 36 percent in 2019. If income inequality were not increasing – if the ratio had stayed the same – SS income would be 10 percent higher. Future benefits would increase, but by a smaller amount. And in the future.
Increasing income inequality does impact Social Security.
If you had said you can’t or shouldn’t try to fix income inequality with SS, I would have agreed, but fixing income inequality would help SS.
raising incomes, whether making them more equal, or just part of an even less equal increase in wealth would make it easier to finance a basic retirement. i’m all for it.
but let’s not get the cart before the horse. SSwas invented in hard times when incomes were even less equal than they are now. the point of it was to prevent poverty in old age, and instead of just taxing the rich, FDR had the genius idea of simply inventing a safe way for people to save their own money safe from inflation and bad days on the market, and for them to insure each other against more individual misfortune.
all of the fixes offered by both the right and the left ignore the fundamental nature and purpose…and genius… of Social Security.
you could raise the cap and capture a more equitable share of GDP to fund a more generous SS benefit, but you would therby expose SS to the problems of welfare as we knew it.
besides the political threat, i think there i value in preserving the general idea that people need, when they can, to pay for their own groceries. SS provides ordinary workers with a way to do that when they can no longer work, while also providing, as insurance, a way for them to protect each other from individual misfortune leading to a day when they can’t.
i am all in favor of increasing the incomes of the poor, and decreasing the wealth of the very rich. the first because poverty is bad for people and usually the fault of the economic system and not native laziness. the second, because too much wealth in a few hands is bad for the country…
but this is not the same as the mindless hate of “the rich” we often hear from “progressives,”…or, if not hate, the simple mindless assumption that we have a right to take away from what they have simply because they have more than we have.
I was talking more about the road than the cart or the horse. I think you had the covered already.
In retrospect I do not like my use of the phrase “closer to low-cost”. I think an economy where workers get raises in line with the increase in productivity (as I understand may economists used to expect) would slightly improve SS. Any improvement of that type is in the direction of low-cost.
But if Covid kills enough people to reduce life expectancy, that would also be in the direction of low-cost.
Bruce saw numbers that made him believe that low-cost was somehow more accurate than intermediate. In retrospect, much of his writing (inspired by Bush’s privatization plans) took place during a bubble economy. While intermediate was not accurate in the short term, it has been close in the long term. And, of course, it provides a solid basis for discussion.
I have probably said enough about this to make enemies of all my friends on the Left. I wish I could say more, because I think I have the key to actually helping the poor and saving the country from oligarchy, as opposed to just talking about it and making enemies of even the honest “rich.” In short, the answer is targeted reforms that even the honest rich will see the justice of, and the advantages of it to themselves, and not fear they will have their own “security” destroyed by”equality.”
I think Roosevelts Social Security was and is the basic idea for this.
that is all fine. i just get worried when people distract from the basic nature and purpose of Social Security, and the easy fix of just paying for it.
It’s fine to talk about raising wages and fixing inequality, and even, I suppose, letting Covid kill off the elderly to reduce SS costs.
But in the first place you are not going to get anything done about any of these things in the near future, and talking about them in the context of Social Security just gives people the excuse they need to indulge in fantasies of something for nothing and ignoring the honest fix to the great looming Social Security is broke lie.
Just a thought on the Social Security (so-called) Trust Fund. There is all of three years of full payout “saved up” in there — not counting one year for legal solvency. That is supposed to cover many coming generations of retirees? That’s the setup.
That realization is why I now call it the loaves and fishes fund — after the miracle where Jesus famously fed 5000 people with a few loaves and fishes. Alternately, perhaps Social Security knows the exact date of Jesus’ return (and the end of the world) and can match it to just the point when “Social Security will run out of money” (if you don’t count income from the FICA tax).
Now I no longer call it the TF — I call it the JCF. :-O
Coberly! Help!
Where is Coberly when you really need him?!
When you need him.
Course, you could hit the Social Security tag and find out what you plainly do not know.
speak of the devil
(and the devil appears)
i wish Denis had read my last two posts on SS. or maybe the ten or twenty before that,
The Trust Fund was never supposed to last forever, Originally it was “merely” a prudent reserve of one year’s benefits to tide the system over in case of recession or other mismatch between revenues and benefits,
then in 1983 it was wisely expanded to build up a reserve to help pay for the Boomer retirement which otherwise would have been too large for the following generation to fairly pay for the larger generations retiremeint, while the Boomers would have paid les than than a fair price for their own retirement due to their larger numbers compared to the smaller number of retirees in the generation before them,
there is no precise way to say when this “extra” Trust Fund will run out, because there is no precise way to predict the future. But prediction of the probable date have been quite consistent since 1983.
Thing is, even back in ’83 the Trustees knew another payroll tax increase would be necessary due to the longer life expectencies expected for future generations.
I, even I, have calculated and presented here the approximate cost of that increase. Oddly enough I agreed with the Trustees. It would be, and still will be, about 2% of payroll for each the worker and the employer.
What I thought I contributed was the observation that that increase could be arrived at gradually by raising the tax one tenth of one percent in any year the Trustees projcted that the Trust Fund would fall below the requried 100% of benefits within the next ten years, That one tenth of one percen is about a dollar per week per year.
Then the payroll tax holiday brought the “death of the Trust Fund” a lot closer… within two or three years if the Congress does not repay the Trust Fund the money it diverted to “the economy,”… in a coinpletely backward (dishonest) effort at “stimulus.,”
I wrote last time that either the payroll tax holiday scam, or the real Covid Recession could be paid for as far as Social Security was concerned, by… wait for it…. raising the payroll tax one tenth of one percen per year .
The difference between the before the Covid Recession / payroll tax holiday, that about a dollar per week per year cost would have been met more gradually as the number of years it would be required would become less and less over about the next fifty years. With the Recession ? holiday the increases will have to come almost every year for the next twenty years.
But it seems that Denis is not the only one who has not been listening.
Something is very rotten in Washington, and it isn’t only the Republicans.
and one only has to listen to the pundits and the “fact checkers” to realize it isn’t only the politicians,
coberly:
You did fine in your explanation
Denis
The Social Security Trust Fund is not a magic pot that gives you money when you need it.
You have to pay for your own groceries when you can no longer work, one way or the other, The Social Security “tax” is the easiest, simplest, and fairest way to make sure you will have enough when you retire. It does have a few special provisions that make it work “like magic” if you don’t understand money at all.. But it is not proof against the dishonesty of politicians and the refusal of the people to understand it and protect it.
many typos and just bad writing might make my comments above hard to understand, i can explain them better if anyone cares.
Bill: I am writing from two different computer addresses. if that causes your system trouble, let me know. this one is easier to use, but it’s brain is failing too.
coberly:
You are fine
Coberly, very interesting — I had no idea they had a sensible end planned for the Trust Fund. But, since nobody else knows either (seriously), when you hear the issue discussed it is always in exactly the same mistaken terms that I have spelled out (or so it seems to me). Ergo, I am right subjectively — even if you are right objectively. :-O
Nice to hear from you again.
I think Kevin Drum is right here:
https://www.motherjones.com/kevin-drum/2020/10/a-marxist-explains-why-the-middle-20-percent-is-so-important/
Depending on your viewpoint either the two party system is to blame (although this less narrow a bind with first past the post and gerrymander) or it is just a fact of life in all politics. Those in the middle always end up being the swing voters who have to be pandered to. There is no getting around it.
Coberly,
Thank you.
Dennis,
Seriously? You sound like Trump. “A lot of people are saying….”, is not a cogent reason.
Worth the while:
McGrath McConnell debate
https://www.c-span.org/video/?476816-1/kentucky-us-senate-debate
Reason
yes, Drum has a point. but it should also be noted that the”radical Left” contributes to losing elections by sitting home and sulking because they only get to vote for “lesser evil”.
By now, none of this may matter. The R’s have gerrymandered and voter suppressed democracy out of meaningful existence… even democracy that respects minority rights. I suspect they also control the voting machines and there is no doubt they WILL control vote by mail now that they see it is a factor.
If the Dems win this time they can begin to change this by including the radical left, and the radical left can begin to change this by working with the Dems, on policies that can work to reduce at least the existential stress on the working population.
That said, I watched an interview on TV the other day with Wolf Blitzaer abd Nancy Pelosi. Blitzer show how completely stupid he is by repeating “lets not let the perfect be the enemy of the good” anbd “1.8 Trillion Dollars is a lot of money, so Pelosi should vote for the R plan to reduce the suffering of the people.
Pelosi did not help matters much because her explanation of her position fell well short of specifics. As a politician she was trying too hard not to be offensive to Blitzer, and had easier recourse to Dem slogans than to the relevant facts.
But Blizer’s condemnation of Pelosi (and that’s what it was) fo not accepting the R “plan” ignored the fact that the R plan would be no help to ordinary people. It’s a little as if the king’s advisors said “Sir, the people are freezing!” and the king said, ” okay, take this 1.8 Trillion dollars and burn it in the furnace. that will help them stay warm.”
Hard to beat stupidity.
I got in trouble with the S word when the radical Left brought out it’s plan for saving Social Security. Their argument ran:
“There is nothing wrong with Social Security but we can fix it.”
“Social Security works because the workers pay for it themselves, but we can fix it by making the rich pay for it.”
I said, but that’s stupid. I meant the argument was stupid. But they chose to think I was calling them stupid personally, and that moreover I was a racist… because the person who read my email happened to be black (I suppose: i would have had no way of knowing) and she thought I was calling her stupid. I was not calling anyone stupid; i said their argument was stupid, as it is. So they started calling ne “insensitive” because I kept trying to tell them I was not a racist and i was not calling anyone stupid, Then, to teach me how insensitive i was, they called me an asshole.
Like I said, it’s hard to beat stupidity.
well, as long as i am here:
there is nothing wrong with Social Security as long as the workers pay for it themselves, The cost of Social Security will go up a small amount because workers are living longer. Workers can pay this increased cost themselves at a rate so small they would never notice it, and which is exactly what they are going to have to pay for their longer lifespan when they can no longer work. And since they are paying for it themselves there is no reason they should not pay for retirement at a reasonable age instead of being forced to work longer because that’s the “obvious” solution to people like Newt Gingrich and, yes, Bill Clinton.
Why do those people want to raise the retirement age, or make SS otherwise useless as insurance against poverty in old age:
well, as they have pointed out, every year for every person who does NOT retire the “economy” is 90,000 dollars richer. (they said this in 2007 when the average worker was definitely not making 90,000 per year. So who is this “economy” that is going to make an extra 90,000 per year per non retired worker?
Three guesses.
Here are some numbers to help Denis better understand the Social Security Trust Fund.
$1,059,300,000,000 = costs of SS
2,500,000,000 = amount by which TF changed (increased)
In 2019 the TF only changed by 0.2 percent of the annual cost. Income exceeded costs by 0.2 percent. A nearly perfect balance.
In 2008 the surplus was 180 billion, in 2010 it was 68 billion. That 114 billion change due to a recession is what the TF is there to deal with.
The idea that the TF is an endowment rather than just a buffer is the great liberal myth about SS. The Greenspan “fix” in 1983 has allowed Congress (including liberals) to ignore the need to adjust SS to stay in balance even though they knew at the time that it was not a permanent fix.
The demographic change over 50 years swamps the change caused by a recession.
The NW Plan includes “triggers’ to increase the payroll tax rate as required to keep SS in balance and maintain scheduled benefits. Coberly reports what the increase would be if we end up following the “intermediate” projection, but if increases are not needed, they don’t happen. Because there are no projections in which people start living shorter lives, there are no projections in which payroll taxes ever decrease.
In my comment window I had the right-hand zeros lined up. Does anyone know how to justify numbers properly?
Arne
thanks for the help.
In the intermediate projection which has been accurate for the last 35 years or so, there are no circumstances in which the tax ever rises more than two percent of payroll (for the worker and also for the employer)… and this doesn’t happen until wages have risen by at least twenty percent.
i suppose that if wages went up faster than projected, the tax could be lower, or benefits could be increased. Or an more than projected increase in the population would allow the tax to be decreases…
not that any of these are likely.
I don’t know what happens if the covid recessio lasts longer than about a year, or the Trump “tax holiday” never gets paid back, but as i said above, if either of these are limited to about a year, the only that happens is that the needed one tenth of one percent per year would need to happen sooner and more frequently than would have been the case before Trump and Covid,
Right now there is more danger from Trump and the R’s (and the Dems) than there is from rising costs to SS.
Income inequality is bad for Social Security. If the workers actually got a larger portion of GDP – (if I understand your number) getting to 20 percent wage rise sooner – then Bruce Webb’s idea that we could be closer to the low-cost projection might be less idealistic than it really was.
Arne
the 20% wage rise has nothing to do with income inequality or percent of GDP. it’s just the number you get when you use the Trustees projection of expected increase in wages per year (about one percent… a low number by historical standards but about what they are predicting going forward…
the same twenty years it would take for a one tenth of one percent per year increase in the payroll tax every year. up until this year that increase would not have been needed every year, but now it’s likely that is what will be needed.
of course wages could rise faster and that would also slow down the needed rate of increase in taxes, Bruce was my best friend on the internet, but embracing the “low cost” projection was more hope than science. about the same as the bad guys looking at the high cost projections and using them to scare people. the intermediate projection is THE (most likely) projection. the high and low cost projections are just to give some idea of the range of what could happen under far less likely (to the actuaries) scenarios.
income inequality, though bad, and “percent of GDP,” though a base from which to argue “fairness,” really have nothing to do with SS… which simply aims at the lowest tax rate that will provide future retirees (or current retirees) a sufficient but modest retirement income, and not overtax them which would limit their ability to (try to) get a larger retirement income by private savings and investments, SS is supposed to be just insurance in case all else fails…which it does for about 50% of the people.
One of the factors in the intermediate projection is the Ratio of OASDI Taxable Payroll to GDP. It has gone from 40 percent in 1983 to 36 percent in 2019. If income inequality were not increasing – if the ratio had stayed the same – SS income would be 10 percent higher. Future benefits would increase, but by a smaller amount. And in the future.
Increasing income inequality does impact Social Security.
If you had said you can’t or shouldn’t try to fix income inequality with SS, I would have agreed, but fixing income inequality would help SS.
of course.
raising incomes, whether making them more equal, or just part of an even less equal increase in wealth would make it easier to finance a basic retirement. i’m all for it.
but let’s not get the cart before the horse. SSwas invented in hard times when incomes were even less equal than they are now. the point of it was to prevent poverty in old age, and instead of just taxing the rich, FDR had the genius idea of simply inventing a safe way for people to save their own money safe from inflation and bad days on the market, and for them to insure each other against more individual misfortune.
all of the fixes offered by both the right and the left ignore the fundamental nature and purpose…and genius… of Social Security.
you could raise the cap and capture a more equitable share of GDP to fund a more generous SS benefit, but you would therby expose SS to the problems of welfare as we knew it.
besides the political threat, i think there i value in preserving the general idea that people need, when they can, to pay for their own groceries. SS provides ordinary workers with a way to do that when they can no longer work, while also providing, as insurance, a way for them to protect each other from individual misfortune leading to a day when they can’t.
i am all in favor of increasing the incomes of the poor, and decreasing the wealth of the very rich. the first because poverty is bad for people and usually the fault of the economic system and not native laziness. the second, because too much wealth in a few hands is bad for the country…
but this is not the same as the mindless hate of “the rich” we often hear from “progressives,”…or, if not hate, the simple mindless assumption that we have a right to take away from what they have simply because they have more than we have.
I was talking more about the road than the cart or the horse. I think you had the covered already.
In retrospect I do not like my use of the phrase “closer to low-cost”. I think an economy where workers get raises in line with the increase in productivity (as I understand may economists used to expect) would slightly improve SS. Any improvement of that type is in the direction of low-cost.
But if Covid kills enough people to reduce life expectancy, that would also be in the direction of low-cost.
Bruce saw numbers that made him believe that low-cost was somehow more accurate than intermediate. In retrospect, much of his writing (inspired by Bush’s privatization plans) took place during a bubble economy. While intermediate was not accurate in the short term, it has been close in the long term. And, of course, it provides a solid basis for discussion.
I have probably said enough about this to make enemies of all my friends on the Left. I wish I could say more, because I think I have the key to actually helping the poor and saving the country from oligarchy, as opposed to just talking about it and making enemies of even the honest “rich.” In short, the answer is targeted reforms that even the honest rich will see the justice of, and the advantages of it to themselves, and not fear they will have their own “security” destroyed by”equality.”
I think Roosevelts Social Security was and is the basic idea for this.
Arne,
that is all fine. i just get worried when people distract from the basic nature and purpose of Social Security, and the easy fix of just paying for it.
It’s fine to talk about raising wages and fixing inequality, and even, I suppose, letting Covid kill off the elderly to reduce SS costs.
But in the first place you are not going to get anything done about any of these things in the near future, and talking about them in the context of Social Security just gives people the excuse they need to indulge in fantasies of something for nothing and ignoring the honest fix to the great looming Social Security is broke lie.
i’m getting slow. I didn’t understand your “ratio of taxable income to GDP” in your comment.
one factor in that ratio is the degree to which employers shift compensation (wages”) from taxable wages to untaxed “benefits.”
Last time I looked at this it accounted for about half of the shortfall.