https://www.nytimes.com/2021/05/20/climate/biden-climate-change-economy.html?smid=tw-share Get Ready for Financial Shocks From Climate Change, Biden Tells OfficialsA warming planet holds potential risks for home prices, investments, banking and other aspects of the global economy, the government said. WASHINGTON — President Biden has ordered government agencies to prepare for climate-related shocks across the economy, as escalating disasters threaten home prices, the value of retirement funds and even the stability of the global financial system.The executive order signed Thursday is the latest indication of how climate change, once dismissed as a distant threat, is already complicating life for Americans. It follows a report last week from the Environmental Protection Agency, which showed that global warming is now being felt in the United States in the form of more heat waves, wildfires, floods and other disasters.Mr. Biden’s new push addresses the risks that disasters could pose to consumers, businesses, investors and the government itself.Experts warn of two broad types of financial risk posed by a hotter planet: The growing cost to businesses and investors as climate-related disasters damage or destroy buildings, crops or supply chains; and the potential for a sudden drop in the value of companies that depend on fossil fuels, as governments or consumers embrace wind, solar and other sources of energy that do not produce the carbon emissions driving global warming. …
One week into the new CDC regulations and I think vaccine passports for domestic access are a dead letter in the Green Bay area. Not at all sure they would have been something accepted, but it was not an issue since they were not available. People have to live and a week of going into places that dropped their “everyone” requirements have already reset expectations pretty comprehensively. I only see Green Bay but I think the national effort is probably hampered in the same manner, plus a truly potential “game-changer” of airline transportation is off the table until September because the “everyone” requirement exists for them until then (at least).
Here’s how it works: Proof of vaccination is self-evident. 1) If I’m not wearing a mask, I’m fully vaccinated. 2) Since I’m fully vaccinated, obviously I don’t care if other people are. It’s so simple even Trump could figure it out.
Dobbs I think you are being ironic, but these days it’s hard to tell. There may be a strictly logical argument for not wearing a mask if you are vaccinated, but the problem of telling who is vaccinated and who doesn’t give a damn makes it good policy to require masks anywhere that social distancing can’t be guaranteed. Good for herd solidarity if not herd immunity. Meanwhile if the unmasked untaxed insist, they can keep the pandemic going all by themselves until they breed a new variant that defeats the vaccine. “strictly logical” never means much when you don’t know all the facts, which you never do.
Well, I do have a wallet-sized version of my vaccination card that I carry around with me at all times. That should suffice, don’t you think? I can present it for inspection if the proper authorities demand to see it. Apparently the guvmint is too polite to insist people to do so.
Ron (RC) Weakley (A.K.A., Darryl For A While At EV) says:
@Coberly, Keep up the good work. My wife and I had been discussing your herd solidarity effect, but I was still surprised when I went out this past week and just as many people were masked as there were a month ago.
Ron (RC) Weakley (A.K.A., Darryl For A While At EV) says:
@Fred, Vaccination discrimination has become a thing, so that there is a civil rights movement against vaccine passports, probably instigated by the unvaxxed Rwingers.
Long Slide Looms for World Population, With Sweeping RamificationsFewer babies’ cries. More abandoned homes. Toward the middle of this century, as deaths start to exceed births, changes will come that are hard to fathom.All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore.Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.Like an avalanche, the demographic forces — pushing toward more deaths than births — seem to be expanding and accelerating. Though some countries continue to see their populations grow, especially in Africa, fertility rates are falling nearly everywhere else. Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time.A planet with fewer people could ease pressure on resources, slow the destructive impact of climate change and reduce household burdens for women. But the census announcements this month from China and the United States, which showed the slowest rates of population growth in decades for both countries, also point to hard-to-fathom adjustments.The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old. It may also require a reconceptualization of family and nation. Imagine entire regions where everyone is 70 or older. Imagine governments laying out huge bonuses for immigrants and mothers with lots of children. Imagine a gig economy filled with grandparents and Super Bowl ads promoting procreation.“A paradigm shift is necessary,” said Frank Swiaczny, a German demographer who was the chief of population trends and analysis for the United Nations until last year. “Countries need to learn to live with and adapt to decline.”The ramifications and responses have already begun to appear, especially in East Asia and Europe. From Hungary to China, from Sweden to Japan, governments are struggling to balance the demands of a swelling older cohort with the needs of young people whose most intimate decisions about childbearing are being shaped by factors both positive (more work opportunities for women) and negative (persistent gender inequality and high living costs).The 20th century presented a very different challenge. The global population saw its greatest increase in known history, from 1.6 billion in 1900 to 6 billion in 2000, as life spans lengthened and infant mortality declined. In some countries — representing about a third of the world’s people — those growth dynamics are still in play. By the end of the century, Nigeria could surpass China in population; across sub-Saharan Africa, families are still having four or five children.
I have a Deep-Red-State family member who swears that covid is a hoax, refuses vaccination, was found to have covid antibodies in his system after a month-long cough last summer, presumably believes Trump is our real president and would also presumably be opposed to ‘vaccine passports’, but won’t go anywhere where he can’t be packing a pistol, so meanwhile at least he’s somewhere safe-ish.
“A paradigm shift is necessary,” said Frank Swiaczny, a German demographer who was the chief of population trends and analysis for the United Nations until last year. “Countries need to learn to live with and adapt to decline.”The ramifications and responses have already begun to appear, especially in East Asia and Europe. From Hungary to China, from Sweden to Japan, governments are struggling to balance the demands of a swelling older cohort with the needs of young people whose most intimate decisions about childbearing are being shaped by factors both positive (more work opportunities for women) and negative (persistent gender inequality and high living costs). …
Ron (RC) Weakley (A.K.A., Darryl For A While At EV) says:
HOME | The Good Hand “A sprawling, heart-smeared-on-the-page howl of rage and pain. “The Good Hand” is a rambling honky-tonk of a book, with the soul of a songwriter and the ache of a poor white boy who grew up rough. It is big and it is pretty and it is amazing.”LA Times”Beautiful, funny, and harrowing”The AtlanticSmith’s “perspective is a morality, and a relief in a world quick to dismiss, quick to divide and quick to believe that American work is now only about collecting data and selling knowledge…Smith wrote a book that should be read.”New York Times….
“The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old.”
This is wrong. People pay for their own retirement, in America at least. As long as the per person economy grows, they can save enough during their working years to pay for their needs when they are no longer able to work. I am aware that “paying for their needs” means they will be eating what the succeeding generation is growing, but we have long passed the time when it takes the whole population working full time to grow enough to eat. The trouble we are having with “paying for the old” is that people do not realize they will become “the old” and they don’t want to “save” 20% of their income to have enough when they can no longer work.
“Saving” in this case means “paying it forward to feed the people who are already old, and relying on the next generation to pay forward enough of their own income to pay for their own old age (on paper) [this is normal economics, not some strange welfare scheme from the mind of coberly] while paying for the current old in real goods. too hard to explain this to people. but give it a try and you can explain it to yourself. can’t help myself: the article you quote is an example of the short-winded thinking that is normal for human beings even when it is not being encouraged by evil politicians who hate to see any money going to anyone else not absolutely needed to produce profits for themselves.
‘People pay for their own retirement,’ I’ve already gone thru whatever I put into social security, I believe. Maybe my kids will keep paying for me & Mrs Fred. They don’t plan to have kids, so who will pay for them. Oh, and there’s that other 401k/IRA thing. How is that working out. Ok for me and Mrs Fred, but arguably not so well for many others. But if your suggesting paying for retirement is ‘on us’, I’m inclined to agree. Why haven’t others signed up for this?
others haven’t signed up because they don’t understand how it works. they have been told “the young are paying for the old” for so long they think it’s “the truth.” the fact is that “the young” have always paid for “the old”. in the sense that families continue to feed their grandparents even when the grandparents are no longer “working” (adding to the family’s “wealth”). but then they always knew the grandparents had “paid for” them when they were too young to be “working.” and even if love had nothing to do with it (either way) they also knew that the “rule” of “those of working age pay for the needs of those too young and too old” meant that they in their turn would be fed when they were old, and those feeding them could expect to be fed in turn by those they had fed when they were young.probably at first this generosity..or enlightened self interest… only extended to family members…
then it expanded to include all members of “the tribe”. and in industrial times it expanded to include all members of the nation. trouble with that last step is that not all members of the nation are willing to play by the rules. the rich do not consider you to be a member of their tribe, but of a conquered tribe to be used for your value as slave labor supplying them with more, more, more. they can do this with whips and threat of death, but it’s easier if they can con you into believing you are only worth what they are willing to pay you in cash money. you have not “already gone through what you paid in…any more than you have gone through what you paid for your stocks and bonds or simple bank savings. Social Security pays “interest” in the same way as the bank or the stock market and the insurance company’ your money paid in is used to “make money” (create more goods and services) so that when you withdraw your savings, or get your insurance benefits, you have “paid” in for the interest or “insurance payment. “the same would be true if it were organized by a simple tax and welfare program, but Social Security imposes a direct link between what you paid in and what you get out.
I think this is politically safer and probably “healthier” than government welfare. But the bad guys have been calling it welfare for so long even the “defenders of Social Security” think of it as welfare and want to just make the rich pay for it without that “we paid for it ourselves” claim to protect it from “we have the will but not the wallet” excuse from the rich. if you will think carefully about this (i have not said it very well…takes a little time to make it clear) and what you said, you will see that you haven’t yet understood what i am trying to say. you pay for social security yourself. your kids pay for their own social security. by the magic of pay as you go this works so that everyone gets back “more than they paid in.” if the population falls it becomes necessary to “pay in” a larger share of your working income so there will be a large enough amount to live on when you can no longer work. but if you look at how the money flows you will see that no one is a “burden” on the young… the young are paying “now” for what they will get “then.” the “now” is just the mechanism that assures there will be a “then.” just like saving in the bank, or buying stocks, and buying insurance.
SS is necessary because in an industrial economy no one can count on their family to have enough to be able to pay for their needs when they get old. like i said, hard to explain in a few words. you need to work it out yourself…with maybe a little help from someone who has thought about it for a long time.
Dobbs you may know more about 401k/IRA than I do. can you please give me a short but reasonably detailed idea of how it is working out. i have heard “not as well as hoped” and i know people who had to delay their retirement because of the 2008 recession.
Going forward (with dwindling young people among us), the paradigm will continue to shift. Will the wealthy be taxed more to pay for social benefits (including social security benefits to the aged)? One would hope so, unless one were wealthy, perhaps. I believe my kids are preparing for a future where they will not be receiving much in the way of guvmint benefits, and they have a chance at succeeding with this strategy because they save the costs of having kids; sort of a pay-it-backward approach. Meanwhile, they are happily (& nobly) paying taxes to support others with kids, and elders like their parents.
The main lesson about IRAs (& then 401ks) was that you had to have started at least 40 years ago, grown up in prosperous times, never wavered in putting funds in, never (or almost never) pulling funds out. So, no worries – it’s too late to do anything about it.There were those (many even) who refused to do this, for fear of stock market dips, collapses, frauds & the like. Maybe they’re right. I’ve always tried to assume they are wrong.
Dobbs,,,your comment @3:11 fills me with despair. you apparently don’t believe or understand a word i said.
this is not unusual. psychologists have shown how nearly impossible it is for people to take on new information that conflicts with what they have believed for a long time. i’ll try again, but don’t have much hope. people of working age have ALWAYS “paid for” the keep of both the young and the aged, both for love and for self interest. and for “the economy.” it works. in good times and in bad.but “paid for” means one thing in a family and seems to mean something else in a money-economy. you think the money you put into Social Security “pays for” someone else’s benefits. and then when you take money out of Social Security that someone else is paying for your benefits. it seems very hard for you to understand that when you paid into social security you were paying in advance for your own benefits. ANY savings or investing is you paying for (you hope) what you will want or need IN THE FUTURE. the only way this works is that someone else pays into the bank or for the investment or the product of the “company” you invested in. You do not in that case say that the person who puts his money in the bank the same day you take “yours” out is “paying for” your “benefits.” or that person who buys your stock, or buys the product of your “company” is paying for your benefits. BUT IT’S THE SAME THING. The only difference is that Social Security avoids, and insures against, the things that can happen to your money when it’s invested or “in the bank.” in the days before capitalism and exposure to the risks of capitalism and whatever else your country did (draft your kids and kill them in war) families did EXACTLY THE SAME THING… paid for the kids and the aging parents while building up (investing in ) the farm….or the community’s collective well being….which make it possible for your kids to have a higher standard of living than you did….while paying for YOUR old age. WITHOUT CHANGING A THING… except what you CALL it… you can call Social Security “paying for it yourself” or “the young paying for the old.” whether one generation gets less or more is not a very important question. generally as time goes by newer generations have higher standards of living…until the day comes that they go blind from staring at the money and they decide they can do better if they don’t pay for the elderly…or allow the elderly pay for themselves, in advance, using the mechanism of pay as you go financing.once that happens, they will “invest”in sure things on the stock market, and some of them will lose and be hurt badly while others win enough to think themselves very smart while society crunbles around them and they start blaming each other ….which is fair enough if they include themselves.all Social Security does is what families have always done. but they need “the government” to make it work. those who think they can live without government are fools. the problem is NOT government per se, but BAD government which is what the “government is the problem” folks want…because bad government allows them to pick your pocket. take a look at what has happened since Reagan convinced us “government IS the problem.”
Dobbs thanks for the info about 401k etc. i take it to mean that it doesn’t work so well as advertised… and for the same reasons SS had to be invented.
Add to the reasons you gave that poor people never make enough to “invest” enough of their paycheck to have enough “saved” by retirement age, and they can’t afford to take the risks of bad days on the market. i have nothing against the market. but there is no need to rely on it completely. we have more than twice as much money after taxes as our grandparents had before taxes. SS insures that we will have “enough” for retirement, while leaving us more money to “invest” than our grandparents could have dreamed of.
Back in the early days of SS, the people who sold investment products were afraid SS would take away their customers. then they found out that people who had a safety net in SS were MORE willing to risk “investing” their money and they became…for a time…. supporters of SS. until the Big Liars spent eighty years telling the people lies about it, which no one took seriously until most of the people who remembered the Depression were dead. and Peter Peterson spent a billion dollars “educating” the public about the dangers of Social Security.
The only danger to Social Security is that the Liars will convince us to stop paying for it….to let THEM make us stop paying for it.
SS also assumes that going forward there will be more young (& productive) people than old (formerly productive) people. Through the 20th century this was true, but may no longer be the case. Since the productivity of the US may still be as large or even continue to grow regardless, it will be necessary to fund the social security trust from those with wealth who own most of that productivity, rather from those who do not, in order to maintain living standards & social stability.
Dobbs thank you for giving me a chance to think about these things. it hurts, but it’s good for me.
SS makes no such assumption. It happens that a growing population makes SS benefits cheaper per person than they would otherwise be. But a growing per person productivity also makes SS benefits cheaper than they would otherwise be. It is also true that workers need to be paid a wage high enough to pay for their retirement (through SS) and leave them enough to meet their current needs, with a declining population it should be easier for workers to get higher wages.
Unless we get stupider as well as fewer we should be able to increase productivity per worker, and wages. Unless we destroy the land, or run out of the means to power machines (we could start by not using up all our gasoline…. or carbon budget.. on commuting twenty miles per day in a car that weighs 2000 pounds and is designed for speeds of eighty or more miles per hour).
I think in order to answer you argument i would need to calculate all the interplays between declining population, increasing productivity, fewer children (less cost there) cheaper houses, cheaper education, cheaper transport, more sensible consumption… all the ways that the “economy” will adapt…unless we destroy the earth’s biological resources. but i am probably not the person to do that. so far, what the actuaries (who ARE) are showing that the cost of paying for our own retirement will go up about two percent of payroll while real wages will go up 20% of current payroll and keep on going up while the tax plateaus… meaning the cost of living longer will stop rising as a percent of income while living standards keep going up.
Seems reasonable to me we should spend a little more of our increasing wealth on a more secure and comfortable old age. I would be very happy to keep “the rich” from taking most of the wealth created by our common effort for themselves, but that is going to be hard battle to win, and it will not help us if we state by pretending we have won it and “demand” the rich give us what they think is rightfully theirs, while refusing to pay for our own needs while we can afford it. The rich will fight to keep what they “have” while we fight to get what we “have not’ in together we end up smashing the cookery and ruining the heirloom rug.
We need to learn to step back from abstractions (words and slogans) and try to understand the reality they claim to represent.
do our advertisers think we will love them better if they plaster their ads on top of what we are trying to read or write and not let us move them aside?
It might also be good to stop and think is this population decline real? temporary? how fast is it declining? how far will it go? you see, the strategy of the SS haters has always been to predict some distant catastrophe so we will destroy something that works fine now but will cause unbearable burdens in the next century. it takes them all day to think up a lie, or find a “fact” they can attach a lie to. and we only think about it for five seconds but remember the “looming crisis” for the rest of our lives as an established truth.
Ron (RC) Weakley (A.K.A., Darryl For A While At EV) says:
Coberly, Easy for me since I grew up understanding what you are trying to say. White collar liberals might need to read a book and still not truly understand that which cannot be grokked without beer and blisters. When MLK really began to understand the common ground upon which wage workers stood, then he was assassinated. As books go, then The Good Hand by Michael Patrick F. Smith (first published this past February) appears to have a more true aim than Das Kapital.
Ron (RC) Weakley (A.K.A., Darryl For A While At EV) says:
I am certainly no SS hater. Nor was my mother, who was one of its early participants, as one who started working as a clerk in the mid 1930’s, died young at age 50 without ever receiving any benefits whatsoever. My father made up for that however, as a guy who would never invest a cent with Wall St having learned from the Great Depression how foolhardy that would be. I like to think I am just realistic.
Interestingly enuf, SS trust funds are never invested in anything other than the Full Faith & Credit of the US guvmint. How could it be any other way, seriously? As the US population & economy expanded, this worked quite well. Will it continue? One can only hope. Will a long period of population non-expansion, or of untaxed wealth-concentration interfere. Well, nothing is forever. (If young Americans do not do their thing, we can always renew immigration to fill the gap, afterall.)
That required mandatory distributions from 401k’s and IRA’s are taxed as ordinary income acts as a significant boost to guvmint revenues in the coming years which should equalized things somewhat. Nowhere near enough I would guess. Such payments also drastically increase the taxability of SS earnings.
The Progressive Agenda at work. Is this how Joe Biden’s presidency gets to be a one-term deal?
As Talks Bog Down, Hopes for Bipartisan Deals on Biden’s Priorities DimDemocrats and Republicans remain at odds on issues such as infrastructure, policing reform and a commission on the Jan. 6 Capitol assault.
Any and all distributions from 401k’s & IRA’s are taxed as ordinary income, so withdrawing more than minimum requirements is highly beneficial to recipients and guvmint alike.
Ron (RC) Weakley (A.K.A., Darryl For A While At EV) says:
Before breakfast “beer and blisters” was practicing alliteration without license. Upon further cogitation then “calluses and corn liquor” would be more appropriate in this context, although white collar liberals are more likely to have blisters than calluses from work, but without any further understanding.
DobbsSS can last forever as long as people understand how it works and why they need it….even if population and economy do not grow they will need it even more.
Ron you are right about intellect getting in the way, but most intellectuals will not understand that. white collar workers get blisters some where else than their hands. don’t misunderstand the pain of sitting at a desk all day doing worthless things for a boss.
… If nothing is changed, the Social Security retirement trust fund will run out of money. The 2020 report from the trustees of Social Security estimated that would occur in 2034. But that estimate was based on data through the end of 2019, before the pandemic recession reduced payroll tax revenue and caused many people to begin collecting retirement benefits earlier than they had planned. The trustees won’t issue an updated report for a few more months, but it likely will estimate the trust fund will run out of money before 2034. Other sources have estimated the trust fund will be exhausted between 2030 and 2032.Social Security won’t end when the trust fund runs out of money. The program receives payroll taxes each year, and those are estimated to be enough to pay 75% to 80% of promised benefits indefinitely. …https://www.forbes.com/sites/bobcarlson/2021/02/22/changes-must-come-to-social-security/
What needs to be changed is a tiny increase in the payroll tax. about one tenth of one percent per year. that’s about a dollar per week per year. what the bad guys want to change is to destroy SS entirely as a meaningful insurance that workers pay for themselves so they can retire when they need to.
what the “good guys” want to change is the “pay for themselves” part of it. they think the rich will pay for it. they won’t. and if “we” force them to, they will just destroy it the way they destroyed welfare as we knew it. the date that the Trust Fund runs out of money is not very important. ultimately the tax will have to be raised about 2% either tomorrow or twenty years from now. it will be psychologically easier if we start with one tenth of one percent tomorrow and work up to the 2% over time while wages are going up over one full percent per year. this will eliminate any need to cut benefits, or tax the rich, or increase the retirement age, or turn SS into a mandatory sure thing on the stock market program, or turn it into welfare.
The trustees DID issue an update to the 2019 projection (actually the 2020 projection). essentially no change in the long term projection. it would move up the schedule for the one tenth of one percent increases a little, but not enough to be noticed, except by the Liars…and the people who can’t think beyond the Lies they have been told.
Like you, I am afraid. Look at what you just wrote and how much you assume “nothing can be done” except to cut benefits. kill the program one cut at a time, or all at once. the 2021 Report is already overdue. the problem will not be the covid recession. it will be the “tax holiday,” which remains to be repaid. interestingly, the proposal i have heard for repaying the “holiday” is to increase the tax 2% on those who got the forced holiday [the government forces you to turn over your retirement savings to the local car dealer to stimulate the economy]. they might as well keep the 2% increase after the holiday is paid for. it would exactly the cover the tax increase that is going to be needed anyway to pay for the longer life expectancy of those terribly burdened “young people” now forced to pay for their grandmother’s retirement. [this is bitter irony. I hope you can tell.]
Those “young people” already have a standard of living [measured in real dollars] twice as high as granny had when she was supporting “the young” as well as her own grandmother, and helping build the infrastructure that makes it much easier for “the young” to make money than it was for her. it’s hard, I know. but you, we , need to shake ourselves free from the lies we have been told.
Aside from benefits being reduced noticeably, as long as reduced benefits continue, perhaps people at that time will simply adjust, particularly those who also have 401k/IRA holdings. Perhaps the ‘payroll tax’ would also just be rolled into ordinary withholding taxes with the benefit of ‘tax simplification’. What’s not to like?
People do not adjust. That is a wet dream. Throwing Payroll funds into the General funds gives license to Congress to spend it for other things not attributable to SS and another decision(s) can be made to cut further. SS is fine as it is minus the 2% problem Coberly discusses, has discussed repeatedly and has provided a viable solution to resolve the fund shortage. SS administration has said it will work and sent a message to Coberly stating it will work.
Perhaps I am misreading your comments. If not, than what is your real issue?
Dobbs just exactly what is it you object to about raising the payroll tax one dollar per week while wages are rising ten dollars per week, so future retirees can have the same relative standard of living as present retirees? (that is: relative to the rising standard of living of the whole society to which they have contributed their whole working lives.)
you have been given the answer. i have tried to explain it. yet your eyes keep darting all over the room looking for a way out…any thing other than raising the payroll tax one dollar per week. as for all the other things that could happen to us in the next hundred or ten thousand years… yes, we could get poorer. and all would have (morally anyway) to share in that getting poorer. but we would still need the safest way we can find to save enough for retirement.
Social Security has done that for over eighty years through thick and thin. there is nothing on the horizon that suggests conditions under which that cannot continue. indeed under which SS will not be MORE important than it is today.
The so-called Payroll Tax is generally considered regressive and I’m opposed to increasing it because of that. Admittedly, it’s a weak objection as I don’t pay it anymore. However, I do pay increasingly more income tax on my social security benefits, just because I can afford to, supposedly.Admittedly, as a recently enrolled Democrat, many of my attitudes stem from many years spent as an independent and before that a liberal Republican. “Taxes are what we pay for civilized society.” — Oliver Wendell Holmes, Jr
I said nothing about ‘Throwing Payroll funds into the General funds’. Keep throwing them into the then-empty Social Security bucket by all means. And fund what’s additionally necessary to keep SS benefits flowing for recipients. After all, as we all know, deficits don’t matter.
Ok, maybe I did imply ‘Throw Payroll funds into the General funds’.What I meant was ‘Keep paying yer Payroll Tax, keep paying yer Withholding Tax, and let the IRS sort it out.’ After all, I don’t pay the former but I do pay the latter.
That’s just parrot talk some liberal professors came up with to justify destroying SS by turning it into welfare. the tax is flat up to a limit where the amount taxed is equal to the value of SS as insurance. Beyond that point no one needs insurance, so they won’t pay for it.
Calling ss a regressive tax is like calling the price of bread a regressive “tax” because “the rich” don’t pay for it the same percent of their income as the poor. meanwhile the poor get a much higher return on their “investment” than the rich. the poor can get the equivalent of 10% real interest or more, the rich only get about 2% real return on theirs.
As for the tax on SS benefits. the tax only affects you if your income is fairly high counting both SS and income from other sources. it’s the same as the tax on any investment, except that if you have very little other income the government doesn’t tax you on your SS. thing is, the Liars are very good at taking a “good thing” and turning into something that looks like a bad thing. and if this argument doesn’t convince you, for god’s sake look at the “increased tax” ONE DOLLAR PER WEEK.
Funny as hell you are willing to throw away workers only real chance at having enough to retire on because of one extra dollar per week. or because “the other guy” doesn’t have to pay as much as you do. (in fact, in order for “the rich” to pay, as a proportion of income, as you do, he’d have to pay an extra ten dollars per week, because there are ten times as many of you as there are of him. sure he can afford it. but if he can pay a million dollars for a private jet, should they sell you one for ten bucks because that’s all you can afford?
Dobbs the whole point of FICA (withholding “tax”) is to keep SS finances separate from the general budget. that’s what keeps it save from Congress spending it and then saying,”gee, we’d like to give you a pension, but we just don’t have the money.”
Dobbs re “deficits don’t matter”. they do at some point. but in any case SS funds are kept separate from the general budget because SS PAYS FOR ITSELF. SS can NEVER RUN A DEFICIT by law. but it csn only pay out as much as we pay in. we would be fools not to pay in enough to pay for our basic needs when we retire or get disabled or our kids need if we die before they are grown. why do you want to ruin something that works? to save your kids a dollar a week?
I would argue that going forward there are two paradigm changes that need to happen. Neither requires throwing our elders to the wolves.
First is what increased productivity means to the economy. Fewer people are needed to make everything we really need. Capitalism sucks at distributing it, but we sure can produce it. We need a paradigm change to think of how to treat workers.
Second is related to the above discussion of SS. When Congress made changes in 1983 they set up two generations (maybe three) to believe that SS should never be touched. They had been touching it yearly up until that point and now (or within about a decade – or preferably about 5 years ago) people need to learn that SS needs to be adjusted to the reality of economic and demographic changes. Because of the growth of productivity the next generation can have more than this generation. In SS, “scheduled benefits” reflect that.
From the annual social security reports you can calculate that the value of the average benefit in 2025 will have the buying power of the average “do nothing” benefit in 2035. Even after (if we let it happen) benefits are reduced to make SS solvent with the existing tax rate, retirees will still be able to afford that 10 year ago market basket. (Whether that means you are working with a 10-year old phone is another post).
Dale’s gradual increases are a much better idea than letting the Tust Fund run out. His plan actually includes triggers to determine how many are actually needed instead of trying to guess at a one time fix. The gradual nature and the triggers are a paradigm shift now only because we allowed ourselves to forget that we need to adjust when times change.
“Interestingly enuf, SS trust funds are never invested in anything other than the Full Faith & Credit of the US guvmint. How could it be any other way, seriously? As the US population & economy expanded, this worked quite well. Will it continue?” In 2019 SS had non-interest income of $937B and interest income of $85B. The TF is more an accounting method than an investment. It reached (relatively) large levels only because that is the accounting necessary to get through the Baby Boom. (It reached higher levels in its first two decades because that is how the math works at the startup of a Pay As You Go program).
I did put in two carriage returns. “Interestingly enuf, SS trust funds are never invested in anything other than the Full Faith & Credit of the US guvmint. How could it be any other way, seriously? As the US population & economy expanded, this worked quite well. Will it continue?” – – – – – In 2019 SS had non-interest income of $937B and interest income of $85B. The TF is more an accounting method than an investment. It reached (relatively) large levels only because that is the accounting necessary to get through the Baby Boom. (It reached higher levels in its first two decades because that is how the math works at the startup of a Pay As You Go program).
Arne better than i could have said it myself. true (credit Barkley Rosser) the future 20% cut would leave real benefits about where they are now. i only object to this idea because it is still a benefit cut, and we ought not to let the bad guys get away with that. Moreover, not only won’t you want to live at a 20% reduced standard of living from that of your neighbors or what you had before retirement, you probably won’t be able to. it’s like us trying to live at the standard of living in 1936 or 1950 when most of us didn’t have cars or washing machines…. these are all “increases in standard of living and not “inflation” but try living without them in a world that is built on the expectation that you have them. even home computers have become a necessity. soon you won’t even be able to contact your SS office without one.
I also object to the idea of depending on such math because I believe that large cuts will lead to more negative propaganda that will resonate strongly with many people. There is greater danger of Congress being allowed to screw it up (being asked to destroy it by its detractors) if they don’t act soon enough to implement gradual changes.
With the one tenth percent increases as needed, the Trust Fund will stabilize at 100 % of one year’s benefits. the interest on that would be just about enough to pay 1% (of payroll) toward benefits (reducing the needed payroll tax by that amount). investing the Trust Fund in something other than treasuries might get you a higher return… except when the economy goes bad….just at the same time payroll income goes down…. which is exactly the situation we are trying to avoid.
with enough Rube Goldberg ingenuity we might be able to solve these problems, but since simple works, why make it hard and introduce unintended consequences? if I understand what you mean by “accounting method” I agree. I am not quite a Modern Monetary Theorist but I don’t think “money” is quite as real as most people think…and limit themselves to when being a little more relaxed could solve a real problem they face.
The Social Security Trust Fund receives payroll taxes, pays out benefits, and invests any surplus in special government securities.Those securities earn interest and are backed by the full faith and credit of the U.S. government.The trust fund is expected to stop running a surplus in 2021, at which time it probably will need to gradually draw down its reserves to pay benefits.The 2020 Social Security Trustees Report shows that retirement/survivor and disability funds will be depleted in 2035.https://www.investopedia.com/ask/answers/110614/how-social-security-trust-fund-invested.aspThe interest earned by the Trust Fund is interest paid by the guvmint to itself, which also pays interest to other bond holders. This makes sense to the extent that the economy is growing, and we must let them take credit for that.
Note that the above was nicely formatted when I loaded it in, but that formatting was lost when it was posted.. This is the hallmark of a f-ed up editor app.
FICA is essentially a flat tax, one that is income-limited. (At a certain point, ‘highly paid’ persons stop paying in, which is also the basis for a benefits cap.) All flat taxes are regressive, in that they are not progressively higher as income increases. All the more so because of the income-limit.
Soc Sec income no doubt keeps a lot of old people alive, particularly those with no other resources. That one inevitably (or at least most likely) receives much more than one pays in means it will show a really great ‘return on investment’. Not what you’d make (maybe) on the stock market, but still…(In my example above, my father got that ‘great’ return; my mother got zip – she was disabled several years before her death.)
People adjust to practically anything that doesn’t kill them.We just got through four years of Trump, and are lookingat another 4 ‘going forward’. Ok, we may not adjust to that.
Note: you can achieve a certain degree of formatting by doing more than one of those ‘”‘ blocks from the strip menu above.See. This may not work. You never know.
Dobbs NO! the government does not pay interest to itself when it pays interest on the Social Security bonds. It is paying interest to Social Security which is acting “in trust” for the people who paid into Social Security to pre-pay for their retirement benefits.The idea that Uncle Sam is an old fool fuiously borrowing from one pocket to lend to another pocket is a cartoon created by the people who hate Social Security and want to confuse you about how it works. Hint” there is NO “Uncle Sam”. There are 300 million americans who borrow and lend from and to each other all the time. SS is one of the ways we do that.
Dobbs if your mother paid into Social Security she got disability benefits. If she did not pay into Social Security she got a 50% increase in her husband’s benefits. There are ways I suppose it may not have worked out this way. All I can say is that Social Security it insurance you pay for. If you die befofe collecting benefits, well, you won’t need the benefits, and the money goes to some who lives a lot longer than average. That’s the way insurance works… if you don’t have the fire, your premiums go to pay for the guy who does. It’s still better to not have a fire, but it’s nice to have insurance if you do.
Dobbs I am glad you would never call SS a Ponzi scheme.
Some very bright people do. It is possible to be very bright and very stupid. A ponzi scheme is a fraud that never pays “investors.” Social Security has paid all of it’s investors for over eighty years and can continue to do so forever. It has a source of funds that cannot run out: people need to save for their retirement, and insure that savings. That’s what SS does. If you think that doesn’t help the economy you need to think more.
Dobbs “people adjust to anything that does not kill them.” this is a tautology. in fact people fail to adjust to a lot of things. and if it does not kill them, it certainly reduces their quality of life. i guess the classic case is the Norse settlers in Greenland who failed to adjust to a change in climate by learning to eat what Eskimos eat. So they starved to death.
Dobbs why do you keep saying things that i have refuted?
It would be different if you had an actual argument….that stood up. SS works. An extra dollar per week will keep it working forever. Raising the cap will turn it into welfare (if you can even get your cap raise passed) which the rich will destroy at their leisure. SS has been “the third rail” BECAUSE the workers can say “I paid for it myself.”
“Regressive tax” is just parrot words invented by college professors to give themselves the illusion that they are smart. in the first place the “tax” is not regressive. In the important place: SS PAYS A HIGHER RETURN TO THE POOR THAN IT DOES TO THE RICH. calling it a regressive tax is like saying the price of bread is “regressive” because the rich pay the same price for a loaf of bread as the poor. actual the rich pay more for their benefits than the poor do. generally they pay both the worker share and the employer share for themselves while paying the employer share for the worker [and yes i know that some economists claim that the employer share is “really” the workers money because as we have seen throughout history employers will always raise the pay of workers if they don’t have to pay a “jobs killing tax.”
This is the fantasy world that some economists live in. meanwhile the rich pay more for the benefits they receive than the poor pay for the benefits they receive. the Liars have taught you to argue about who got the biggest piece of burfday cake instead of realize that you are getting a pretty good deal from SS…one you cannot get anywhere else. and the rich pay for what they get as well as, arguably (just listen to them), for what you get.
Hmmm. Well, FICA (the Payroll Tax) is not really a tax anyway. It was just called that because otherwise it could not be levied by the guv’mint. It’s really a periodic payment into a retirement plan. Being a recipient, I think Soc Sec is great. Hopefully, what needs to be done to keep it solvent will be done forthwith. However, all flat taxes are regressive. You could argue that it’s not regressive because it’s not really a tax. I might accept that. OTOH, we could change ‘the Payroll Tax’ so that it is graduated in the same way the income tax is. We could also set it up so that even if you paid into it, if your income is high enuf, you just wouldn’t receive benefits. All progressive measures I think.
dobbs yes, it’s not really a “tax”.but if you change it so people who pay it don’t get benefits, then it becomes a tax. “progressive” and “regressive” are just buzzwords for people more interested in their own sense of cosmic justice than in actually making a policy that works for the people paying for it. carried too far, the concept of “regressive tax”[that is “not” progressive] leads to the rich paying more for his bread than you do “because he has more money,” or paying for your bread because he has more money. this idea has charms for certain people but it won’t work. meanwhile what you call “regressive” is that the rich stop paying the payroll tax after they have paid enough to cover both a fair but modest return to themselves, and to insure themselves (and the rest of us) against the possibility that by the time they need it, they won’t be rich anymore. you…and they… need to think a little harder about what “insurance” means, as well as what “fair” means. there is no doubt in my mind that if people understood how SS works, they would have no problem paying a “tax” high enough to insure that they will not become destitute in old age, or due to disability, and neither will their families if they die young. the problem is getting people to understand how SS works. made more difficult by the fact that there is a billion dollar industry in lying about it.
https://www.nytimes.com/2021/05/20/climate/biden-climate-change-economy.html?smid=tw-share Get Ready for Financial Shocks From Climate Change, Biden Tells OfficialsA warming planet holds potential risks for home prices, investments, banking and other aspects of the global economy, the government said. WASHINGTON — President Biden has ordered government agencies to prepare for climate-related shocks across the economy, as escalating disasters threaten home prices, the value of retirement funds and even the stability of the global financial system.The executive order signed Thursday is the latest indication of how climate change, once dismissed as a distant threat, is already complicating life for Americans. It follows a report last week from the Environmental Protection Agency, which showed that global warming is now being felt in the United States in the form of more heat waves, wildfires, floods and other disasters.Mr. Biden’s new push addresses the risks that disasters could pose to consumers, businesses, investors and the government itself.Experts warn of two broad types of financial risk posed by a hotter planet: The growing cost to businesses and investors as climate-related disasters damage or destroy buildings, crops or supply chains; and the potential for a sudden drop in the value of companies that depend on fossil fuels, as governments or consumers embrace wind, solar and other sources of energy that do not produce the carbon emissions driving global warming. …
One week into the new CDC regulations and I think vaccine passports for domestic access are a dead letter in the Green Bay area. Not at all sure they would have been something accepted, but it was not an issue since they were not available. People have to live and a week of going into places that dropped their “everyone” requirements have already reset expectations pretty comprehensively. I only see Green Bay but I think the national effort is probably hampered in the same manner, plus a truly potential “game-changer” of airline transportation is off the table until September because the “everyone” requirement exists for them until then (at least).
Here’s how it works: Proof of vaccination is self-evident. 1) If I’m not wearing a mask, I’m fully vaccinated. 2) Since I’m fully vaccinated, obviously I don’t care if other people are. It’s so simple even Trump could figure it out.
Dobbs I think you are being ironic, but these days it’s hard to tell. There may be a strictly logical argument for not wearing a mask if you are vaccinated, but the problem of telling who is vaccinated and who doesn’t give a damn makes it good policy to require masks anywhere that social distancing can’t be guaranteed. Good for herd solidarity if not herd immunity. Meanwhile if the unmasked untaxed insist, they can keep the pandemic going all by themselves until they breed a new variant that defeats the vaccine. “strictly logical” never means much when you don’t know all the facts, which you never do.
“untaxed” should have been “un v a x x e d” . Spell-check never has all the facts either.
Well, I do have a wallet-sized version of my vaccination card that I carry around with me at all times. That should suffice, don’t you think? I can present it for inspection if the proper authorities demand to see it. Apparently the guvmint is too polite to insist people to do so.
@Coberly, Keep up the good work. My wife and I had been discussing your herd solidarity effect, but I was still surprised when I went out this past week and just as many people were masked as there were a month ago.
@Fred, Vaccination discrimination has become a thing, so that there is a civil rights movement against vaccine passports, probably instigated by the unvaxxed Rwingers.
https://www.nytimes.com/2021/05/22/world/global-population-shrinking.html?smid=tw-share
I have a Deep-Red-State family member who swears that covid is a hoax, refuses vaccination, was found to have covid antibodies in his system after a month-long cough last summer, presumably believes Trump is our real president and would also presumably be opposed to ‘vaccine passports’, but won’t go anywhere where he can’t be packing a pistol, so meanwhile at least he’s somewhere safe-ish.
HOME | The Good Hand “A sprawling, heart-smeared-on-the-page howl of rage and pain. “The Good Hand” is a rambling honky-tonk of a book, with the soul of a songwriter and the ache of a poor white boy who grew up rough. It is big and it is pretty and it is amazing.”LA Times”Beautiful, funny, and harrowing”The AtlanticSmith’s “perspective is a morality, and a relief in a world quick to dismiss, quick to divide and quick to believe that American work is now only about collecting data and selling knowledge…Smith wrote a book that should be read.”New York Times….
Dobbs
“The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old.”
This is wrong. People pay for their own retirement, in America at least. As long as the per person economy grows, they can save enough during their working years to pay for their needs when they are no longer able to work. I am aware that “paying for their needs” means they will be eating what the succeeding generation is growing, but we have long passed the time when it takes the whole population working full time to grow enough to eat. The trouble we are having with “paying for the old” is that people do not realize they will become “the old” and they don’t want to “save” 20% of their income to have enough when they can no longer work.
“Saving” in this case means “paying it forward to feed the people who are already old, and relying on the next generation to pay forward enough of their own income to pay for their own old age (on paper) [this is normal economics, not some strange welfare scheme from the mind of coberly] while paying for the current old in real goods. too hard to explain this to people. but give it a try and you can explain it to yourself. can’t help myself: the article you quote is an example of the short-winded thinking that is normal for human beings even when it is not being encouraged by evil politicians who hate to see any money going to anyone else not absolutely needed to produce profits for themselves.
‘People pay for their own retirement,’ I’ve already gone thru whatever I put into social security, I believe. Maybe my kids will keep paying for me & Mrs Fred. They don’t plan to have kids, so who will pay for them. Oh, and there’s that other 401k/IRA thing. How is that working out. Ok for me and Mrs Fred, but arguably not so well for many others. But if your suggesting paying for retirement is ‘on us’, I’m inclined to agree. Why haven’t others signed up for this?
dobbs
others haven’t signed up because they don’t understand how it works. they have been told “the young are paying for the old” for so long they think it’s “the truth.” the fact is that “the young” have always paid for “the old”. in the sense that families continue to feed their grandparents even when the grandparents are no longer “working” (adding to the family’s “wealth”). but then they always knew the grandparents had “paid for” them when they were too young to be “working.” and even if love had nothing to do with it (either way) they also knew that the “rule” of “those of working age pay for the needs of those too young and too old” meant that they in their turn would be fed when they were old, and those feeding them could expect to be fed in turn by those they had fed when they were young.probably at first this generosity..or enlightened self interest… only extended to family members…
then it expanded to include all members of “the tribe”. and in industrial times it expanded to include all members of the nation. trouble with that last step is that not all members of the nation are willing to play by the rules. the rich do not consider you to be a member of their tribe, but of a conquered tribe to be used for your value as slave labor supplying them with more, more, more. they can do this with whips and threat of death, but it’s easier if they can con you into believing you are only worth what they are willing to pay you in cash money. you have not “already gone through what you paid in…any more than you have gone through what you paid for your stocks and bonds or simple bank savings. Social Security pays “interest” in the same way as the bank or the stock market and the insurance company’ your money paid in is used to “make money” (create more goods and services) so that when you withdraw your savings, or get your insurance benefits, you have “paid” in for the interest or “insurance payment. “the same would be true if it were organized by a simple tax and welfare program, but Social Security imposes a direct link between what you paid in and what you get out.
I think this is politically safer and probably “healthier” than government welfare. But the bad guys have been calling it welfare for so long even the “defenders of Social Security” think of it as welfare and want to just make the rich pay for it without that “we paid for it ourselves” claim to protect it from “we have the will but not the wallet” excuse from the rich. if you will think carefully about this (i have not said it very well…takes a little time to make it clear) and what you said, you will see that you haven’t yet understood what i am trying to say. you pay for social security yourself. your kids pay for their own social security. by the magic of pay as you go this works so that everyone gets back “more than they paid in.” if the population falls it becomes necessary to “pay in” a larger share of your working income so there will be a large enough amount to live on when you can no longer work. but if you look at how the money flows you will see that no one is a “burden” on the young… the young are paying “now” for what they will get “then.” the “now” is just the mechanism that assures there will be a “then.” just like saving in the bank, or buying stocks, and buying insurance.
SS is necessary because in an industrial economy no one can count on their family to have enough to be able to pay for their needs when they get old. like i said, hard to explain in a few words. you need to work it out yourself…with maybe a little help from someone who has thought about it for a long time.
Dobbs you may know more about 401k/IRA than I do. can you please give me a short but reasonably detailed idea of how it is working out. i have heard “not as well as hoped” and i know people who had to delay their retirement because of the 2008 recession.
why does AB comments ignore “carriage return” commands? spacing helps readability and does not cost any more than no-spacing.
Ron thanks. it helps me if i think someone understands what i am trying to say.
Going forward (with dwindling young people among us), the paradigm will continue to shift. Will the wealthy be taxed more to pay for social benefits (including social security benefits to the aged)? One would hope so, unless one were wealthy, perhaps. I believe my kids are preparing for a future where they will not be receiving much in the way of guvmint benefits, and they have a chance at succeeding with this strategy because they save the costs of having kids; sort of a pay-it-backward approach. Meanwhile, they are happily (& nobly) paying taxes to support others with kids, and elders like their parents.
The main lesson about IRAs (& then 401ks) was that you had to have started at least 40 years ago, grown up in prosperous times, never wavered in putting funds in, never (or almost never) pulling funds out. So, no worries – it’s too late to do anything about it.There were those (many even) who refused to do this, for fear of stock market dips, collapses, frauds & the like. Maybe they’re right. I’ve always tried to assume they are wrong.
Dobbs,,,your comment @3:11 fills me with despair. you apparently don’t believe or understand a word i said.
this is not unusual. psychologists have shown how nearly impossible it is for people to take on new information that conflicts with what they have believed for a long time. i’ll try again, but don’t have much hope. people of working age have ALWAYS “paid for” the keep of both the young and the aged, both for love and for self interest. and for “the economy.” it works. in good times and in bad.but “paid for” means one thing in a family and seems to mean something else in a money-economy. you think the money you put into Social Security “pays for” someone else’s benefits. and then when you take money out of Social Security that someone else is paying for your benefits. it seems very hard for you to understand that when you paid into social security you were paying in advance for your own benefits. ANY savings or investing is you paying for (you hope) what you will want or need IN THE FUTURE. the only way this works is that someone else pays into the bank or for the investment or the product of the “company” you invested in. You do not in that case say that the person who puts his money in the bank the same day you take “yours” out is “paying for” your “benefits.” or that person who buys your stock, or buys the product of your “company” is paying for your benefits. BUT IT’S THE SAME THING. The only difference is that Social Security avoids, and insures against, the things that can happen to your money when it’s invested or “in the bank.” in the days before capitalism and exposure to the risks of capitalism and whatever else your country did (draft your kids and kill them in war) families did EXACTLY THE SAME THING… paid for the kids and the aging parents while building up (investing in ) the farm….or the community’s collective well being….which make it possible for your kids to have a higher standard of living than you did….while paying for YOUR old age. WITHOUT CHANGING A THING… except what you CALL it… you can call Social Security “paying for it yourself” or “the young paying for the old.” whether one generation gets less or more is not a very important question. generally as time goes by newer generations have higher standards of living…until the day comes that they go blind from staring at the money and they decide they can do better if they don’t pay for the elderly…or allow the elderly pay for themselves, in advance, using the mechanism of pay as you go financing.once that happens, they will “invest”in sure things on the stock market, and some of them will lose and be hurt badly while others win enough to think themselves very smart while society crunbles around them and they start blaming each other ….which is fair enough if they include themselves.all Social Security does is what families have always done. but they need “the government” to make it work. those who think they can live without government are fools. the problem is NOT government per se, but BAD government which is what the “government is the problem” folks want…because bad government allows them to pick your pocket. take a look at what has happened since Reagan convinced us “government IS the problem.”
Dobbs thanks for the info about 401k etc. i take it to mean that it doesn’t work so well as advertised… and for the same reasons SS had to be invented.
Add to the reasons you gave that poor people never make enough to “invest” enough of their paycheck to have enough “saved” by retirement age, and they can’t afford to take the risks of bad days on the market. i have nothing against the market. but there is no need to rely on it completely. we have more than twice as much money after taxes as our grandparents had before taxes. SS insures that we will have “enough” for retirement, while leaving us more money to “invest” than our grandparents could have dreamed of.
Back in the early days of SS, the people who sold investment products were afraid SS would take away their customers. then they found out that people who had a safety net in SS were MORE willing to risk “investing” their money and they became…for a time…. supporters of SS. until the Big Liars spent eighty years telling the people lies about it, which no one took seriously until most of the people who remembered the Depression were dead. and Peter Peterson spent a billion dollars “educating” the public about the dangers of Social Security.
The only danger to Social Security is that the Liars will convince us to stop paying for it….to let THEM make us stop paying for it.
SS also assumes that going forward there will be more young (& productive) people than old (formerly productive) people. Through the 20th century this was true, but may no longer be the case. Since the productivity of the US may still be as large or even continue to grow regardless, it will be necessary to fund the social security trust from those with wealth who own most of that productivity, rather from those who do not, in order to maintain living standards & social stability.
Dobbs thank you for giving me a chance to think about these things. it hurts, but it’s good for me.
SS makes no such assumption. It happens that a growing population makes SS benefits cheaper per person than they would otherwise be. But a growing per person productivity also makes SS benefits cheaper than they would otherwise be. It is also true that workers need to be paid a wage high enough to pay for their retirement (through SS) and leave them enough to meet their current needs, with a declining population it should be easier for workers to get higher wages.
Unless we get stupider as well as fewer we should be able to increase productivity per worker, and wages. Unless we destroy the land, or run out of the means to power machines (we could start by not using up all our gasoline…. or carbon budget.. on commuting twenty miles per day in a car that weighs 2000 pounds and is designed for speeds of eighty or more miles per hour).
I think in order to answer you argument i would need to calculate all the interplays between declining population, increasing productivity, fewer children (less cost there) cheaper houses, cheaper education, cheaper transport, more sensible consumption… all the ways that the “economy” will adapt…unless we destroy the earth’s biological resources. but i am probably not the person to do that. so far, what the actuaries (who ARE) are showing that the cost of paying for our own retirement will go up about two percent of payroll while real wages will go up 20% of current payroll and keep on going up while the tax plateaus… meaning the cost of living longer will stop rising as a percent of income while living standards keep going up.
Seems reasonable to me we should spend a little more of our increasing wealth on a more secure and comfortable old age. I would be very happy to keep “the rich” from taking most of the wealth created by our common effort for themselves, but that is going to be hard battle to win, and it will not help us if we state by pretending we have won it and “demand” the rich give us what they think is rightfully theirs, while refusing to pay for our own needs while we can afford it. The rich will fight to keep what they “have” while we fight to get what we “have not’ in together we end up smashing the cookery and ruining the heirloom rug.
We need to learn to step back from abstractions (words and slogans) and try to understand the reality they claim to represent.
do our advertisers think we will love them better if they plaster their ads on top of what we are trying to read or write and not let us move them aside?
It might also be good to stop and think is this population decline real? temporary? how fast is it declining? how far will it go? you see, the strategy of the SS haters has always been to predict some distant catastrophe so we will destroy something that works fine now but will cause unbearable burdens in the next century. it takes them all day to think up a lie, or find a “fact” they can attach a lie to. and we only think about it for five seconds but remember the “looming crisis” for the rest of our lives as an established truth.
Coberly, Easy for me since I grew up understanding what you are trying to say. White collar liberals might need to read a book and still not truly understand that which cannot be grokked without beer and blisters. When MLK really began to understand the common ground upon which wage workers stood, then he was assassinated. As books go, then The Good Hand by Michael Patrick F. Smith (first published this past February) appears to have a more true aim than Das Kapital.
Intellectuals might possess a firm grasp of reality if not for all of that dratted intellect getting in the way :<)
I am certainly no SS hater. Nor was my mother, who was one of its early participants, as one who started working as a clerk in the mid 1930’s, died young at age 50 without ever receiving any benefits whatsoever. My father made up for that however, as a guy who would never invest a cent with Wall St having learned from the Great Depression how foolhardy that would be. I like to think I am just realistic.
Interestingly enuf, SS trust funds are never invested in anything other than the Full Faith & Credit of the US guvmint. How could it be any other way, seriously? As the US population & economy expanded, this worked quite well. Will it continue? One can only hope. Will a long period of population non-expansion, or of untaxed wealth-concentration interfere. Well, nothing is forever. (If young Americans do not do their thing, we can always renew immigration to fill the gap, afterall.)
That required mandatory distributions from 401k’s and IRA’s are taxed as ordinary income acts as a significant boost to guvmint revenues in the coming years which should equalized things somewhat. Nowhere near enough I would guess. Such payments also drastically increase the taxability of SS earnings.
The Progressive Agenda at work. Is this how Joe Biden’s presidency gets to be a one-term deal?
https://www.nytimes.com/2021/05/23/us/politics/congress-biden-infrastructure-police.html?smid=tw-share
Any and all distributions from 401k’s & IRA’s are taxed as ordinary income, so withdrawing more than minimum requirements is highly beneficial to recipients and guvmint alike.
Before breakfast “beer and blisters” was practicing alliteration without license. Upon further cogitation then “calluses and corn liquor” would be more appropriate in this context, although white collar liberals are more likely to have blisters than calluses from work, but without any further understanding.
Dobbs I know you are not an SS hater. I was referring to the billionaires who promote the lies about it,
DobbsSS can last forever as long as people understand how it works and why they need it….even if population and economy do not grow they will need it even more.
Ron you are right about intellect getting in the way, but most intellectuals will not understand that. white collar workers get blisters some where else than their hands. don’t misunderstand the pain of sitting at a desk all day doing worthless things for a boss.
… If nothing is changed, the Social Security retirement trust fund will run out of money. The 2020 report from the trustees of Social Security estimated that would occur in 2034. But that estimate was based on data through the end of 2019, before the pandemic recession reduced payroll tax revenue and caused many people to begin collecting retirement benefits earlier than they had planned. The trustees won’t issue an updated report for a few more months, but it likely will estimate the trust fund will run out of money before 2034. Other sources have estimated the trust fund will be exhausted between 2030 and 2032.Social Security won’t end when the trust fund runs out of money. The program receives payroll taxes each year, and those are estimated to be enough to pay 75% to 80% of promised benefits indefinitely. …https://www.forbes.com/sites/bobcarlson/2021/02/22/changes-must-come-to-social-security/
Dobbs”if nothing is changed.” yes.
What needs to be changed is a tiny increase in the payroll tax. about one tenth of one percent per year. that’s about a dollar per week per year. what the bad guys want to change is to destroy SS entirely as a meaningful insurance that workers pay for themselves so they can retire when they need to.
what the “good guys” want to change is the “pay for themselves” part of it. they think the rich will pay for it. they won’t. and if “we” force them to, they will just destroy it the way they destroyed welfare as we knew it. the date that the Trust Fund runs out of money is not very important. ultimately the tax will have to be raised about 2% either tomorrow or twenty years from now. it will be psychologically easier if we start with one tenth of one percent tomorrow and work up to the 2% over time while wages are going up over one full percent per year. this will eliminate any need to cut benefits, or tax the rich, or increase the retirement age, or turn SS into a mandatory sure thing on the stock market program, or turn it into welfare.
The trustees DID issue an update to the 2019 projection (actually the 2020 projection). essentially no change in the long term projection. it would move up the schedule for the one tenth of one percent increases a little, but not enough to be noticed, except by the Liars…and the people who can’t think beyond the Lies they have been told.
Like you, I am afraid. Look at what you just wrote and how much you assume “nothing can be done” except to cut benefits. kill the program one cut at a time, or all at once. the 2021 Report is already overdue. the problem will not be the covid recession. it will be the “tax holiday,” which remains to be repaid. interestingly, the proposal i have heard for repaying the “holiday” is to increase the tax 2% on those who got the forced holiday [the government forces you to turn over your retirement savings to the local car dealer to stimulate the economy]. they might as well keep the 2% increase after the holiday is paid for. it would exactly the cover the tax increase that is going to be needed anyway to pay for the longer life expectancy of those terribly burdened “young people” now forced to pay for their grandmother’s retirement. [this is bitter irony. I hope you can tell.]
Those “young people” already have a standard of living [measured in real dollars] twice as high as granny had when she was supporting “the young” as well as her own grandmother, and helping build the infrastructure that makes it much easier for “the young” to make money than it was for her. it’s hard, I know. but you, we , need to shake ourselves free from the lies we have been told.
Aside from benefits being reduced noticeably, as long as reduced benefits continue, perhaps people at that time will simply adjust, particularly those who also have 401k/IRA holdings. Perhaps the ‘payroll tax’ would also just be rolled into ordinary withholding taxes with the benefit of ‘tax simplification’. What’s not to like?
Fred:
People do not adjust. That is a wet dream. Throwing Payroll funds into the General funds gives license to Congress to spend it for other things not attributable to SS and another decision(s) can be made to cut further. SS is fine as it is minus the 2% problem Coberly discusses, has discussed repeatedly and has provided a viable solution to resolve the fund shortage. SS administration has said it will work and sent a message to Coberly stating it will work.
Perhaps I am misreading your comments. If not, than what is your real issue?
Dobbs just exactly what is it you object to about raising the payroll tax one dollar per week while wages are rising ten dollars per week, so future retirees can have the same relative standard of living as present retirees? (that is: relative to the rising standard of living of the whole society to which they have contributed their whole working lives.)
you have been given the answer. i have tried to explain it. yet your eyes keep darting all over the room looking for a way out…any thing other than raising the payroll tax one dollar per week. as for all the other things that could happen to us in the next hundred or ten thousand years… yes, we could get poorer. and all would have (morally anyway) to share in that getting poorer. but we would still need the safest way we can find to save enough for retirement.
Social Security has done that for over eighty years through thick and thin. there is nothing on the horizon that suggests conditions under which that cannot continue. indeed under which SS will not be MORE important than it is today.
coberly:
Try hitting the return twice to leave a space depicting the start of a new paragraph
The so-called Payroll Tax is generally considered regressive and I’m opposed to increasing it because of that. Admittedly, it’s a weak objection as I don’t pay it anymore. However, I do pay increasingly more income tax on my social security benefits, just because I can afford to, supposedly.Admittedly, as a recently enrolled Democrat, many of my attitudes stem from many years spent as an independent and before that a liberal Republican. “Taxes are what we pay for civilized society.” — Oliver Wendell Holmes, Jr
I said nothing about ‘Throwing Payroll funds into the General funds’. Keep throwing them into the then-empty Social Security bucket by all means. And fund what’s additionally necessary to keep SS benefits flowing for recipients. After all, as we all know, deficits don’t matter.
Ok, maybe I did imply ‘Throw Payroll funds into the General funds’.What I meant was ‘Keep paying yer Payroll Tax, keep paying yer Withholding Tax, and let the IRS sort it out.’ After all, I don’t pay the former but I do pay the latter.
Dobbs, it’s not a regressive tax.
That’s just parrot talk some liberal professors came up with to justify destroying SS by turning it into welfare. the tax is flat up to a limit where the amount taxed is equal to the value of SS as insurance. Beyond that point no one needs insurance, so they won’t pay for it.
Calling ss a regressive tax is like calling the price of bread a regressive “tax” because “the rich” don’t pay for it the same percent of their income as the poor. meanwhile the poor get a much higher return on their “investment” than the rich. the poor can get the equivalent of 10% real interest or more, the rich only get about 2% real return on theirs.
As for the tax on SS benefits. the tax only affects you if your income is fairly high counting both SS and income from other sources. it’s the same as the tax on any investment, except that if you have very little other income the government doesn’t tax you on your SS. thing is, the Liars are very good at taking a “good thing” and turning into something that looks like a bad thing. and if this argument doesn’t convince you, for god’s sake look at the “increased tax” ONE DOLLAR PER WEEK.
Funny as hell you are willing to throw away workers only real chance at having enough to retire on because of one extra dollar per week. or because “the other guy” doesn’t have to pay as much as you do. (in fact, in order for “the rich” to pay, as a proportion of income, as you do, he’d have to pay an extra ten dollars per week, because there are ten times as many of you as there are of him. sure he can afford it. but if he can pay a million dollars for a private jet, should they sell you one for ten bucks because that’s all you can afford?
Run i tried the double carriage return. didn’t work.
Dobbs the whole point of FICA (withholding “tax”) is to keep SS finances separate from the general budget. that’s what keeps it save from Congress spending it and then saying,”gee, we’d like to give you a pension, but we just don’t have the money.”
Dobbs re “deficits don’t matter”. they do at some point. but in any case SS funds are kept separate from the general budget because SS PAYS FOR ITSELF. SS can NEVER RUN A DEFICIT by law. but it csn only pay out as much as we pay in. we would be fools not to pay in enough to pay for our basic needs when we retire or get disabled or our kids need if we die before they are grown. why do you want to ruin something that works? to save your kids a dollar a week?
I would argue that going forward there are two paradigm changes that need to happen. Neither requires throwing our elders to the wolves.
First is what increased productivity means to the economy. Fewer people are needed to make everything we really need. Capitalism sucks at distributing it, but we sure can produce it. We need a paradigm change to think of how to treat workers.
Second is related to the above discussion of SS. When Congress made changes in 1983 they set up two generations (maybe three) to believe that SS should never be touched. They had been touching it yearly up until that point and now (or within about a decade – or preferably about 5 years ago) people need to learn that SS needs to be adjusted to the reality of economic and demographic changes. Because of the growth of productivity the next generation can have more than this generation. In SS, “scheduled benefits” reflect that.
From the annual social security reports you can calculate that the value of the average benefit in 2025 will have the buying power of the average “do nothing” benefit in 2035. Even after (if we let it happen) benefits are reduced to make SS solvent with the existing tax rate, retirees will still be able to afford that 10 year ago market basket. (Whether that means you are working with a 10-year old phone is another post).
Dale’s gradual increases are a much better idea than letting the Tust Fund run out. His plan actually includes triggers to determine how many are actually needed instead of trying to guess at a one time fix. The gradual nature and the triggers are a paradigm shift now only because we allowed ourselves to forget that we need to adjust when times change.
“Interestingly enuf, SS trust funds are never invested in anything other than the Full Faith & Credit of the US guvmint. How could it be any other way, seriously? As the US population & economy expanded, this worked quite well. Will it continue?” In 2019 SS had non-interest income of $937B and interest income of $85B. The TF is more an accounting method than an investment. It reached (relatively) large levels only because that is the accounting necessary to get through the Baby Boom. (It reached higher levels in its first two decades because that is how the math works at the startup of a Pay As You Go program).
I did put in two carriage returns. “Interestingly enuf, SS trust funds are never invested in anything other than the Full Faith & Credit of the US guvmint. How could it be any other way, seriously? As the US population & economy expanded, this worked quite well. Will it continue?” – – – – – In 2019 SS had non-interest income of $937B and interest income of $85B. The TF is more an accounting method than an investment. It reached (relatively) large levels only because that is the accounting necessary to get through the Baby Boom. (It reached higher levels in its first two decades because that is how the math works at the startup of a Pay As You Go program).
My 11:17 and 11:28 posts used the same method to separate paragraphs and got different results.
Arne better than i could have said it myself. true (credit Barkley Rosser) the future 20% cut would leave real benefits about where they are now. i only object to this idea because it is still a benefit cut, and we ought not to let the bad guys get away with that. Moreover, not only won’t you want to live at a 20% reduced standard of living from that of your neighbors or what you had before retirement, you probably won’t be able to. it’s like us trying to live at the standard of living in 1936 or 1950 when most of us didn’t have cars or washing machines…. these are all “increases in standard of living and not “inflation” but try living without them in a world that is built on the expectation that you have them. even home computers have become a necessity. soon you won’t even be able to contact your SS office without one.
I also object to the idea of depending on such math because I believe that large cuts will lead to more negative propaganda that will resonate strongly with many people. There is greater danger of Congress being allowed to screw it up (being asked to destroy it by its detractors) if they don’t act soon enough to implement gradual changes.
Arne
With the one tenth percent increases as needed, the Trust Fund will stabilize at 100 % of one year’s benefits. the interest on that would be just about enough to pay 1% (of payroll) toward benefits (reducing the needed payroll tax by that amount). investing the Trust Fund in something other than treasuries might get you a higher return… except when the economy goes bad….just at the same time payroll income goes down…. which is exactly the situation we are trying to avoid.
with enough Rube Goldberg ingenuity we might be able to solve these problems, but since simple works, why make it hard and introduce unintended consequences? if I understand what you mean by “accounting method” I agree. I am not quite a Modern Monetary Theorist but I don’t think “money” is quite as real as most people think…and limit themselves to when being a little more relaxed could solve a real problem they face.
Arneyes. indeed. [re screw it up].
The Social Security Trust Fund receives payroll taxes, pays out benefits, and invests any surplus in special government securities.Those securities earn interest and are backed by the full faith and credit of the U.S. government.The trust fund is expected to stop running a surplus in 2021, at which time it probably will need to gradually draw down its reserves to pay benefits.The 2020 Social Security Trustees Report shows that retirement/survivor and disability funds will be depleted in 2035.https://www.investopedia.com/ask/answers/110614/how-social-security-trust-fund-invested.aspThe interest earned by the Trust Fund is interest paid by the guvmint to itself, which also pays interest to other bond holders. This makes sense to the extent that the economy is growing, and we must let them take credit for that.
Note that the above was nicely formatted when I loaded it in, but that formatting was lost when it was posted.. This is the hallmark of a f-ed up editor app.
FICA is essentially a flat tax, one that is income-limited. (At a certain point, ‘highly paid’ persons stop paying in, which is also the basis for a benefits cap.) All flat taxes are regressive, in that they are not progressively higher as income increases. All the more so because of the income-limit.
Soc Sec income no doubt keeps a lot of old people alive, particularly those with no other resources. That one inevitably (or at least most likely) receives much more than one pays in means it will show a really great ‘return on investment’. Not what you’d make (maybe) on the stock market, but still…(In my example above, my father got that ‘great’ return; my mother got zip – she was disabled several years before her death.)
FICA regressive… ‘All the more so because of the income-limit.’
Dobbs NO! the government does not pay interest to itself when it pays interest on the Social Security bonds. It is paying interest to Social Security which is acting “in trust” for the people who paid into Social Security to pre-pay for their retirement benefits.The idea that Uncle Sam is an old fool fuiously borrowing from one pocket to lend to another pocket is a cartoon created by the people who hate Social Security and want to confuse you about how it works. Hint” there is NO “Uncle Sam”. There are 300 million americans who borrow and lend from and to each other all the time. SS is one of the ways we do that.
Dobbs if you choose to fool yourself about “progressive tax, awk, progressive tax!” I can’t help you.
Dobbs if your mother paid into Social Security she got disability benefits. If she did not pay into Social Security she got a 50% increase in her husband’s benefits. There are ways I suppose it may not have worked out this way. All I can say is that Social Security it insurance you pay for. If you die befofe collecting benefits, well, you won’t need the benefits, and the money goes to some who lives a lot longer than average. That’s the way insurance works… if you don’t have the fire, your premiums go to pay for the guy who does. It’s still better to not have a fire, but it’s nice to have insurance if you do.
Dobbs I am glad you would never call SS a Ponzi scheme.
Some very bright people do. It is possible to be very bright and very stupid. A ponzi scheme is a fraud that never pays “investors.” Social Security has paid all of it’s investors for over eighty years and can continue to do so forever. It has a source of funds that cannot run out: people need to save for their retirement, and insure that savings. That’s what SS does. If you think that doesn’t help the economy you need to think more.
Dobbs “people adjust to anything that does not kill them.” this is a tautology. in fact people fail to adjust to a lot of things. and if it does not kill them, it certainly reduces their quality of life. i guess the classic case is the Norse settlers in Greenland who failed to adjust to a change in climate by learning to eat what Eskimos eat. So they starved to death.
Dobbs why do you keep saying things that i have refuted?
It would be different if you had an actual argument….that stood up. SS works. An extra dollar per week will keep it working forever. Raising the cap will turn it into welfare (if you can even get your cap raise passed) which the rich will destroy at their leisure. SS has been “the third rail” BECAUSE the workers can say “I paid for it myself.”
“Regressive tax” is just parrot words invented by college professors to give themselves the illusion that they are smart. in the first place the “tax” is not regressive. In the important place: SS PAYS A HIGHER RETURN TO THE POOR THAN IT DOES TO THE RICH. calling it a regressive tax is like saying the price of bread is “regressive” because the rich pay the same price for a loaf of bread as the poor. actual the rich pay more for their benefits than the poor do. generally they pay both the worker share and the employer share for themselves while paying the employer share for the worker [and yes i know that some economists claim that the employer share is “really” the workers money because as we have seen throughout history employers will always raise the pay of workers if they don’t have to pay a “jobs killing tax.”
This is the fantasy world that some economists live in. meanwhile the rich pay more for the benefits they receive than the poor pay for the benefits they receive. the Liars have taught you to argue about who got the biggest piece of burfday cake instead of realize that you are getting a pretty good deal from SS…one you cannot get anywhere else. and the rich pay for what they get as well as, arguably (just listen to them), for what you get.
Hmmm. Well, FICA (the Payroll Tax) is not really a tax anyway. It was just called that because otherwise it could not be levied by the guv’mint. It’s really a periodic payment into a retirement plan. Being a recipient, I think Soc Sec is great. Hopefully, what needs to be done to keep it solvent will be done forthwith. However, all flat taxes are regressive. You could argue that it’s not regressive because it’s not really a tax. I might accept that. OTOH, we could change ‘the Payroll Tax’ so that it is graduated in the same way the income tax is. We could also set it up so that even if you paid into it, if your income is high enuf, you just wouldn’t receive benefits. All progressive measures I think.
dobbs yes, it’s not really a “tax”.but if you change it so people who pay it don’t get benefits, then it becomes a tax. “progressive” and “regressive” are just buzzwords for people more interested in their own sense of cosmic justice than in actually making a policy that works for the people paying for it. carried too far, the concept of “regressive tax”[that is “not” progressive] leads to the rich paying more for his bread than you do “because he has more money,” or paying for your bread because he has more money. this idea has charms for certain people but it won’t work. meanwhile what you call “regressive” is that the rich stop paying the payroll tax after they have paid enough to cover both a fair but modest return to themselves, and to insure themselves (and the rest of us) against the possibility that by the time they need it, they won’t be rich anymore. you…and they… need to think a little harder about what “insurance” means, as well as what “fair” means. there is no doubt in my mind that if people understood how SS works, they would have no problem paying a “tax” high enough to insure that they will not become destitute in old age, or due to disability, and neither will their families if they die young. the problem is getting people to understand how SS works. made more difficult by the fact that there is a billion dollar industry in lying about it.