Boehner: Raise SS age and means-test benefits

[samclem]

I believe their assumption is that all per capita spending goes up, private and public. Government gets an extra accelerator because it insures the fastest growing segment of the population (old folks).

As far as I can tell, the CBO charts only address government spending, not private spending (for health care or anything else).

So you think the correct answer is to freeze total Medicare spending, which means a decrease in per capita spending?

Did we just jump discussions from another thread, or are you making a reference to something in this thread??

 

[chinaco]

If Congress does pass a SS reform bill it should explicitly forbid Congress or any other government entity from spending any surplus collected for the purposes of SS.


In effect, the next generation will pay taxes to replace what has already been collected. (Double Tax).

 

[Emeritus]

If Congress does pass a SS reform bill it should explicitly forbid Congress or any other government entity from spending any surplus collected for the purposes of SS.


In effect, the next generation will pay taxes to replace what has already been collected. (Double Tax).

Both the Constitution and the dysfunctionality of the current political setup here in Washington make any rational solution anyone suggests a pipe dream. I've lived, studied and worked "inside the Beltway" since before there was a Beltway. The financial corruption here is simply unbelievable. The "pay to play" system ensures that only those with ready campaign and lobbying cash have any influence. Both parties know exactly how much it takes to buy voters with sound bites and targeted misleading ads. They like to keep turnouts low so that those vote purchases are reliable. Waste and fraud is a code word for taking money from those who do not make campaign contributions and giving it to those who do. The bipartisan bailout of banks at the expense of future taxpayers was incredibly expensive and sliid through with no one taking responsibility for it.

I cant decide whether the GOPs Steele or the whole NEA is a better example of the incredibly low public quality of the players in Washington. But they are a fair sample.

 

[dex]

I cant decide whether the GOPs Steele or the whole NEA is a better example of the incredibly low public quality of the players in Washington. But they are a fair sample.

Cell phone recordings and other video has shown how dumb some politicians are - and by extension we the voters for electing them.

YouTube - 3-25-2010_Hank_Johnson_Guam_Tip_Over.wmv
Hank_Johnson_Guam_Tip_Over

 

[samclem]

If Congress does pass a SS reform bill it should explicitly forbid Congress or any other government entity from spending any surplus collected for the purposes of SS.

What do you want done with the money? Maybe we could buy a small country and then sell it later for a gain? Washington could buy a few companies, make them state enterprises, then compete against the private companies? Or maybe buy a lot of stock in private companies, then Congress could meddle in every internal decision these companies make. Or, buy a lot of gold and drastically affect prices when they buy and when they sell. Or, just bury a bunch of currency in a big hole in the ground and let it depreciate at whatever the coming inflation rate is going to be. In 30 years it will cost mre to dig it up than it is worth.

I agree that the present "solution" feels really dumb, since we have to pay ourselves back for the money we ourselves thought we'd "saved." But all the "lock box" talk is just for bumper stickers until there's an answer to the question "what do we do with the extra money." One answer is to not build up any surplus--let that money continue to stay at work in the private economy and tax folks when the money is actually needed. That makes all the accounting a lot more straightforward, and makes deficits more apparent--and painful.

 

[Emeritus]

W One answer is to not build up any surplus--let that money continue to stay at work in the private economy and tax folks when the money is actually needed. That makes all the accounting a lot more straightforward, and makes deficits more apparent--and painful.

I agree but I would only point out that Private is not the same as "productive" or stable. The great Depression was generated by the private economy. The recent economic collapse in Ireland was due to unproductive private investment in unneeded housing. The trick is productive investment, public or private. everything else is bumper sticker

 

[Independent]

As far as I can tell, the CBO charts only address government spending, not private spending (for health care or anything else).

Did we just jump discussions from another thread, or are you making a reference to something in this thread??

I understand that the CBO chart only applies to gov't spending. However, the assumptions underlying that chart involve trends in total spending. You "corrected" my post by inserting the word "government". I wanted to point out that I thought the original post was correct without your change. The CBO is not assuming that gov't (per capita, age adjusted) spending will go up faster than private.

I was responding to this "There are plenty of good free-market cost containment models for medical care. We could, of course, implement those and not increase government health care costs one iota." followed by a link to the Whole Foods plan. That was a tantalizing tangent, but I see you didn't want to follow up on it until " ... after the election".

 

[ERD50]

I agree but I would only point out that Private is not the same as "productive" or stable. ... The trick is productive investment, public or private.

True, but the very significant difference is that unproductive businesses generally go out of business. Competitive forces drive them to need to be productive. Unproductive businesses generally get replaced by the productive businesses (and yes, I'm peppering this with 'generally' as I'm sure people could point out a few apparent exceptions, probably ones with monopoly-like power, or govt backing).

OTOH, unproductive governments generally respond with "We will raise (somebody else's) taxes!", or less often, "We will cut (somebody else's) services!". Neither represents an increase in productivity. And they have a lot of monopoly-like power (our two-party dominant system is a duopoly).

-ERD50

 

[samclem]

I agree but I would only point out that Private is not the same as "productive" or stable. The great Depression was generated by the private economy. The recent economic collapse in Ireland was due to unproductive private investment in unneeded housing. The trick is productive investment, public or private. everything else is bumper sticker

I don't want to spoil the punchline, but I'm guessing we'll soon hear of how the government can take a helpful hand in assuring these private investments are productive.

 

[Emeritus]

True, but the very significant difference is that unproductive businesses generally go out of business. Competitive forces drive them to need to be productive. Unproductive businesses generally get replaced by the productive businesses (and yes, I'm peppering this with 'generally' as I'm sure people could point out a few apparent exceptions, probably ones with monopoly-like power, or govt backing).

OTOH, unproductive governments generally respond with "We will raise (somebody else's) taxes!", or less often, "We will cut (somebody else's) services!". Neither represents an increase in productivity. And they have a lot of monopoly-like power (our two-party dominant system is a duopoly).

-ERD50

Except that
1)our system allows unproductive business to buy the government and make the government the purchaser .That is the heart of the military/ industrial and agribusiness subsidy system
2) many firms show false productivity by externalizing the cost to the society while pocketing the "profits" . I.e I make hand grenades and have a nice profitable business selling them to terrorists. or really loud stereo systems that I sell to locals who like blowing out the neighbors ears. Or pistols that I sell to gun shops who sell them to "owners' who lose them two weeks before they show up in a cop killing in another state all such firms can count on legions of anti regulatory supporters to refuse to support the regulations needed to internalize the externalities.

Goldman Sachs of course did both of these things. privatized the profits, socialized the risk and bought regimes of both parties to make sure it stayed that way

 

[Texas Proud]

What do you want done with the money? Maybe we could buy a small country and then sell it later for a gain? Washington could buy a few companies, make them state enterprises, then compete against the private companies? Or maybe buy a lot of stock in private companies, then Congress could meddle in every internal decision these companies make. Or, buy a lot of gold and drastically affect prices when they buy and when they sell. Or, just bury a bunch of currency in a big hole in the ground and let it depreciate at whatever the coming inflation rate is going to be. In 30 years it will cost mre to dig it up than it is worth.

I agree that the present "solution" feels really dumb, since we have to pay ourselves back for the money we ourselves thought we'd "saved." But all the "lock box" talk is just for bumper stickers until there's an answer to the question "what do we do with the extra money." One answer is to not build up any surplus--let that money continue to stay at work in the private economy and tax folks when the money is actually needed. That makes all the accounting a lot more straightforward, and makes deficits more apparent--and painful.

I can say 'not spending the money' is not like what you describe.... it means that you should not have a unified budget... one where we have this big surplus on SS and the even bigger deficit on everything else and say 'See, it is not as bad as you think. We are only running a $250 billion dollar deficit'.... when in reality... on the 'normal' budget we were running a much higher deficit....


NOW, (or should I say in the near future).... we will be running at a big deficit on SS AND a big deficit on the rest of the gvmt... and it will not be pretty IMO...

 

[Emeritus]

I don't want to spoil the punchline, but I'm guessing we'll soon hear of how the government can take a helpful hand in assuring these private investments are productive.

Not likely in a system where the people selling the junk get to buy the people regulating the junk

The Sprint Fidelis lead fiasco shows what happens when an understaffed underfunded politically abused regulatory agency "approves" a deadly product by a firm that knows that a tame supreme court has insulated it from liability for patient deaths



Hospitals Dispute Medtronic Data on Wires - WSJ.com

Elsevier

 

[ERD50]

I don't want to spoil the punchline, but I'm guessing we'll soon hear of how the government can take a helpful hand in assuring these private investments are productive.

And I predict the sun will rise in the East tomorrow!

Except that
1)our system allows unproductive business to buy the government and make the government the purchaser .

Odd how it takes two to tango, but the blame is always on 'business'. Broken record.

The lobbyist 'made me do it' - gee, Congress could 'just say no'.

2) many firms show false productivity by externalizing the cost to the society while pocketing the "profits" .

Too bad the regulators fail us, they could make sure that those costs are internalized back to the company - at very little cost to the taxpayers. The cost would be borne by the company (and their investors & customers - right where it should be).

Oh well, I'm out'a here regarding this train of thought, or this thread will get shut down too.

-ERD50

 

[samclem]

I can say 'not spending the money' is not like what you describe.... it means that you should not have a unified budget... one where we have this big surplus on SS and the even bigger deficit on everything else and say 'See, it is not as bad as you think. We are only running a $250 billion dollar deficit'.... when in reality... on the 'normal' budget we were running a much higher deficit....

Yes, this does address one of the issues(the ability to use the excess SS money to claim we don't have a big deficit). But, it doesn't address the bigger problem. As I understand it, the big complaint of those who say "don't spend the money" is that they don't want to use the surplus to buy government bonds, since taxpayers have to pay all the interest and principal on these bonds. It feels like it's just an accounting trick--"I paid excess SS contributions (taxes), and later I have to pay extra taxes again to pay off the debt I then owe the SS system because of the USG bonds they bought--with my money." And, it IS a shell game, to a large extent. Having a non-unified budget doesn't fix that.

Since there's no way for the government to "save up" money without adverse consequences, the best answer is to stop overtaxing SS participants. It's a moot point now, since what is flowing in is just about at parity with what is flowing out. If, 30 years ago, folks had been allowed to put the "excess" in carefully limited and diversified investments under their own control, there would be a lot more folks in a lot better shape for retirement, and we taxpayers wouldn't be on the hook for a penny more than we are today. This "partial privatization" could have been done for free. What we got instead is the worst of both worlds, thanks to the fearmongers and all those who pushed for keeping the SS taxes high so government could keep the spending faucets open wide. (And the villains came from both parties).

For a brand new version of the exact same government shell game, see the "CLASS ACT" which passed as part of Health Care "reform."
More info. Proponents of the bill used the excess receipts from long term care insurance premiums in the early years to artificially make the health care "reform" deficit numbers less egregious, but what they bought us all is a huge tax bill in coming decades. It's an outrage.

In part:

. . . One smidgen of truth in the message is that persons must pay premiums for at least five years before they qualify for benefits. As a result, the government will be bringing in extra revenue for years before it must start making any payments. According to CBO’s most recent estimate (Table 5, page 32) the program would act to reduce the deficit by a total of $70.2 billion during the nine years ending in 2019 — including savings to the Medicaid program brought about by fewer persons entering nursing homes.
CBO said earlier, in its estimate given last year, that the program probably would reduce the deficit during the decade starting in 2020 as well, though not by as much as during the first nine years. After that, CBO said, "the sum of benefit payments and administrative costs would probably exceed premium income and savings to the Medicaid program. Therefore, the programs would add to budget deficits in the third decade—and in succeeding decades—by amounts on the order of tens of billions of dollars for each 10-year period."

And if the government is estimating "tens of billions of dollars" of costs to the taxpayer in coming decades, we can only guess what the actual cost will be. Note that the money from the early years isn't going into a hole in the ground (or wink-wink "lock box") to be later dug up and used to pay for nursing home care--it's the same sleight-of-hand "pay us now AND pay us later" mechanism we complain about with SS.

 

[Emeritus]

Yes, ..... If, 30 years ago, folks had been allowed to put the "excess" in carefully limited and diversified investments under their own control, there would be a lot more folks in a lot better shape for retirement, and we taxpayers wouldn't be on the hook for a penny more than we are today. This "partial privatization" could have been done for free. S.

There is no "Magic money" The government still has to borrow the money it spends. Instead of borrowing it from the SS system, it borrows in the market. This adds to the government's administrative costs

Second you have to add in the massive increase in administrative costs of the millions of accounts to handle the private investments. This has to be paid out of the balances in the accounts

If as a matter of policy you want to invest the "surplus" in the stock market, it is incredibly cheaper to simply have a large pension fund invested in the stock market e.g. the TSP

Then you only have to spend time explaining to folks why their retirement investments went down this week, month year or decade

There is no free lunch

 

[samclem]

There is no "Magic money" The government still has to borrow the money it spends. Instead of borrowing it from the SS system, it borrows in the market. This adds to the government's administrative costs

The government doesn't have to borrow the money it spends. It chooses to overspend (on our behalf), and this SS "surplus" money made that a lot easier (which is the point Texas Proud made). We know this "junkie," and there's no good reason to set him up with an IV and cheap heroin just because we know he'll soon want another fix.

Second you have to add in the massive increase in administrative costs of the millions of accounts to handle the private investments. This has to be paid out of the balances in the accounts.

If as a matter of policy you want to invest the "surplus" in the stock market, it is incredibly cheaper to simply have a large pension fund invested in the stock market e.g. the TSP.

Then you only have to spend time explaining to folks why their retirement investments went down this week, month year or decade

A TSP-like setup would be a lot cheaper for investors, and would also provide a mechanism (if desired) to limit choices and place bounds on asset allocations. I'm philosophically opposed to this, but, from a practical POV, it would almost certainly lead to better overall investment performance if the stats from individually-managed IRAs and 401K accounts are any indication. Anyway, if the government is mandating that individuals invest this "surplus money" in the first place, then this seems like a rather minor additional infringement on individual rights. Both are more acceptable than what actually happened.
There would be some problems with a national TSP--I anticipate Congressional interest in which companies are included in which packaged products (no cigarette mfgrs, no companies currently involved in labor actions, etc) . Unless there were ironclad rules insuring independent administration of the setup, I'd rather take my chance with individual accounts through private sources.

There is no free lunch.

You can say that again. What really burns is to have to pay for the same lunch twice. The only thing worse is having the big government boosters cheering us along as we pay again, reminding us that this is really for the best.

 

[Emeritus]

The government doesn't have to borrow the money it spends. It chooses to overspend (on our behalf), and this SS "surplus" money made that a lot easier (which is the point Texas Proud made). We know this "junkie," and there's no good reason to set him up with an IV and cheap heroin just because we know he'll soon want another fix.
.

It simply is no help to confuse overall government spending (topic one)
with financing social security (topic 2)

The government spends because voters reward them for doing so. The american people demand more services from the government than they are willing to pay for

We have met the enemy and he is us

The government is US

 

[ERD50]

We have met the enemy and he is us

The government is US

I'm starting to question that. I'm starting to believe that the duopoly of our two-party system, and over a hundred years of refinement of how to leverage that from inside the system has led to a government that is not US.

Duverger's law - Wikipedia, the free encyclopedia

-ERD50

 

[Emeritus]

I'm starting to question that. I'm starting to believe that the duopoly of our two-party system, and over a hundred years of refinement of how to leverage that from inside the system has led to a government that is not US.

Duverger's law - Wikipedia, the free encyclopedia

-ERD50

I can certainly accept that a native American or a descendant of slaves could feel a total lack of affiliation with the government of the people by the people and for the people. They were declared by that government to be not part of the people. But what distinguishes Americans in general from Europeans of my experience is that the people accept responsibility for the present and past acts of their representatives both good and bad. Obama Bush Clinton and Reagan are our presidents, whether we like their policies or not. When we deviate from this principle of accepting the acts of our representatives as our own we lose something of the real historical exceptionalism of the United States.

 

[samclem]

When we deviate from this principle of accepting the acts of our representatives as our own we lose something of the real historical exceptionalism of the United States.

Where did that come from? No one (until your post) has suggested that the public might eschew responsibility for the acts of our representatives.

 

[harley]

I can certainly accept that a native American or a descendant of slaves could feel a total lack of affiliation with the government of the people by the people and for the people. They were declared by that government to be not part of the people. But what distinguishes Americans in general from Europeans of my experience is that the people accept responsibility for the present and past acts of their representatives both good and bad. Obama Bush Clinton and Reagan are our presidents, whether we like their policies or not. When we deviate from this principle of accepting the acts of our representatives as our own we lose something of the real historical exceptionalism of the United States.

Cycling back

http://www.early-retirement.org/for...d-means-test-benefits-50907-2.html#post953148

 

[FinanceDude]

The issue I'm mulling over with Roth conversions is tax bracket. It'll cost me 28% (more if I convert a serious amount) to convert and if it turns out that Roth withdrawals serve as disqualifying income for things such as SS means testing, I will have probably made a bad decision.

I doubt any politician wants to handle SS (except Paul Ryan) and I don't think ANYTHING will be done until things are dire. Politicians have been "passing the buck" on SS reform for many years.

You can't always make decisions based on what might happen, it can drive you nuts. I would be more worried about tax rates on IRA withdrawals in the near future than Roth withdrawals in the more distant future..........

 

[ERD50]

Cycling back

http://www.early-retirement.org/for...d-means-test-benefits-50907-2.html#post953148

It is all related - we can talk about fixes, but if our political system isn't going to support those fixes it gets back to the political system.

No one (until your post) has suggested that the public might eschew responsibility for the acts of our representatives.

Theoretically, I guess I can't eschew responsibility. But in a practical, real-world sense I feel I can. If the political system has developed to the point that I feel neither candidate represents anything close to what I want (or I even view them as crooks), and the reality is that no third party candidate can get elected, it's a little tough for me to say, "darn it, it's my fault the crook got elected".

So "darn it, I doubt we will see any real fixes for SS". But I don't think that means we shouldn't at least educate ourselves on the matter, with discussions like these.

-ERD50

 

[dex]

I'm starting to question that. I'm starting to believe that the duopoly of our two-party system, and over a hundred years of refinement of how to leverage that from inside the system has led to a government that is not US.

Duverger's law - Wikipedia, the free encyclopedia

-ERD50

You might be interested in this - I looked at it because of Glenn Beck's book.

Overton window - Wikipedia, the free encyclopedia

At any given moment the “window” includes a range of policies considered to be politically acceptable in the current climate of public opinion, with “acceptable” defined as something a politician can recommend without being considered too “extreme” or outside the mainstream to gain or keep public office. Overton arranged the spectrum on a vertical axis with policies defined as “more free” at the top and “less free” at the bottom, where “free” is defined as less subject to government intervention. When the window moves or expands, it means that ideas previously not considered politically acceptable have become so, and possibly that ideas previously considered acceptable are no longer.

 

[Texas Proud]

It simply is no help to confuse overall government spending (topic one)
with financing social security (topic 2)

The government spends because voters reward them for doing so. The american people demand more services from the government than they are willing to pay for

We have met the enemy and he is us

The government is US

The point I was trying to make is that the gvmt did mix them... and because they mixed them they showed us that we were not buying as big a gvmt as we really were... IF the funding for SS was not used to make it look like our deficit was 'low'.... then people would have complained about the deficit a lot sooner...