The formal budget deficits we face have relatively little to do with Social Security and Medicare, so putting them into the budget-deal brouhaha is misleading misbehavior from the usual miscreants, our elected representatives of both parties.
They know that their current overspending has begun its long-deferred but seldom discussed collision with the rising cash deficit in Social Security and Medicare. Call it the Big Double Whammy. That cash deficit is going to grow like mad over the next 10 years as the boomers sign up for Social Security and Medicare.
I think he is just saying that right now SS and Medicare are not the major problem with the general fund deficit which is caused by spending more than is coming into the general fund for non-SS (and maybe non-Medicare) spending. That is the short term problem people need to wake up to outside of the SS and Medicare problems. He then goes on to say something about the long term revenue problem when the SS and Medicare inflows are less than the outflows. At that point they need serious funds from the general fund and become a major part of the revenue needs.
All of us lived through the failed Clinton attempt to retire as much non-SS debt as possible before we reached this point. That policy failed since 1) one administration cannot commit a future administration to a policy and 2) Clinton had a booming economy and the policy didn't take into account the subsequent recessions and the deficits caused by abnormally low revenue inflows.
Two things I noticed:
I am not sure we can balance the books without a tax increase... even with spending cuts.
- Comparison to WWII - We are in a World War on Terror which has us involved in a world-wide campaign against middle eastern foes with several initiatives and active conflicts: Iraq, Afghanistan, Increase in Intelligence spending to support our defense against terror, Increase spending for airport and other Homeland security, then the secondary offensive for Libya and other countries (all of which are somewhat related to defending Israel).
- The SS and Medicare Trust Fund and Interest - Which is part of the $2.5T wealth transfer from the Middle class to the most wealthy in the US (as they maneuvered for tax cuts that were not matched with spending cuts over the last 30 years).
Each party has their sacred cows.... and the two items listed above are two of them.
I'm still trying to get my head around how SS is an entitlement? I thought you can only take out what you put in
You don't put in, you don't take out. Or, am I missing something?
As depressing as this sounds I hope you are right. I fear that we will continue to cut but not balance with revenues on the resurgent promise/premise that we can grow our way out. That discredited formula can garner bipartisan support from fuzzy minds on both sides of the aisle. After a couple of more decades demonstrating that the past 30 years was prologue, we will be in a much deeper pit with a much more tattered set of national benefits.I agree with your point. the money is gone. We now have to decide what can we do going forward. And there is no tax level that will support current levels of Medicare/Medicaid/SS that will work. Taxes are inevitable, but the current level of benefits is unsustainable. Therefore plan for cuts in benefits and higher taxes. They are coming, one way or another, after all the loud talk, grandstanding, and demagoguery.
1) You've got to be kidding ? WWII versus chasing some hole-dwellers around the desert ? I don't think so.
2) I agree with your point. the money is gone. We now have to decide what can we do going forward. And there is no tax level that will support current levels of Medicare/Medicaid/SS that will work. Taxes are inevitable, but the current level of benefits is unsustainable. Therefore plan for cuts in benefits and higher taxes. They are coming, one way or another, after all the loud talk, grandstanding, and demagoguery.
Gone4Good said:I really don't know what Scott is saying. At first he argues . . .
But then ends with this . . .
So in the same article SS and Medicare have 'relatively little to do' with deficits and at the same time those program's 'rising cash deficits will grow like mad over the next 10 years.'
So which is it?
The truth is Medicare is pretty much the alpha and the omega, the beginning and the end, of our long-term fiscal problems. If we could somehow figure out how to limit the growth of that one program to the same rate as GDP we'd have no fiscal problem at all.
MasterBlaster said:Perhaps we could offshore welfare recipients and the prison population too.
That would save lots of money.
I think he is just saying that right now SS and Medicare are not the major problem with the general fund deficit which is caused by spending more than is coming into the general fund for non-SS (and maybe non-Medicare) spending. That is the short term problem people need to wake up to outside of the SS and Medicare problems. He then goes on to say something about the long term revenue problem when the SS and Medicare inflows are less than the outflows. At that point they need serious funds from the general fund and become a major part of the revenue needs.
All of us lived through the failed Clinton attempt to retire as much non-SS debt as possible before we reached this point. That policy failed since 1) one administration cannot commit a future administration to a policy and 2) Clinton had a booming economy and the policy didn't take into account the subsequent recessions and the deficits caused by abnormally low revenue inflows.
It looks like that is a .9% increase on wages over $200K/$250K married (from 2.9 to 3.8). The new 3.8% is on on taxable investment income -- oops, that's us.FWIW, Medicare taxes are already increasing by 3.8% of taxable income for those making over $200K starting in 2013. This includes non-payroll income for the first time. Net, revenues will start increasing then already.
Perhaps you're right on the +0.9% part. Would need to recheck. Concerning investment income, that's what I was trying to say. Regardless, it's over and above going back to the pre-2001 income tax reductions such that total taxes on income will be even higher when/if those rates revert.It looks like that is a .9% increase on wages over $200K/$250K married (from 2.9 to 3.8). The new 3.8% is on on taxable investment income -- oops, that's us.
Edit: it looks like that new 3.8% on investment income only applies on investment income that causes adjusted gross income to exceed the 200/250K thresholds. So not us after all -- or at least not most of us who are ERd.
serie1926 said:I'm still trying to get my head around how SS is an entitlement? I thought you can only take out what you put in
You don't put in, you don't take out. Or, am I missing something?
1) You've got to be kidding ? WWII versus chasing some hole-dwellers around the desert ? I don't think so.
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Agree with #1.... not the same IMO either...
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Sorry, I don't agree.Many collecting disability are collecting substantial tax free pensions.
.... Many collecting disability are collecting substantial tax free pensions. Plenty of freebies out there.