Social Security Reform - Today's News............

[Donner]

Re: Social Security Reform - Today's News.........

Seems to me that the President better get a specific proposal together sooner rather than later. Lots of wild speculation if this thread is any indication. Couple of thoughts:

1. the current system is not in immediate crisis but it is unsustainable in the long run. Lots of demographic reasons we are all familiar with. Too many people living longer. Fewer workers supporting more beneficiaries.

2. system is not an insurance program. It is and always has been a welfare program. Income redistribution is a part of our society since the New Deal and that isn't going to change. Our parents and we will depend upon it to support us, in whole or in part.

3. fundamentally inescapable outcome is smaller benefits combined with higher taxes, in some combination. Greenspan says that our nation has promised more than it can deliver.

4. no liberal Democrat has ever had the guts to face up to the problem. Bush ran on a promise to come to grips with this and got re-elected with a mandate for change. Get over it. Give the guy a little credit for having the courage to step up to the plate. At least wait to see what his plan is for crying out loud!

5. for a bunch of folks who are staking the next 30 or 40 years of their lives on the unstoppable upward march of he stock market, there doesn't appear to be a whole lot of confidence about the outcome here.

6. I am glad that the President has initiated this discussion. I have my first grandchild coming in July and I hope he inherits a viable system that will work for him and not collar him with the costs of a generation of whiney old farts trying to sustain the unsustainable.

7. You got a problem with SS reform? Don't blame a courageous conservative Republican president who is going to try to fix a system that (whether you want to believe it or not) needs fixing. Blame FDR and the New Deal Democrats who set up a welfare program that as it turned out cannot pay the bills. But we as a Nation are now committed. We all are now dependent upon it and we must all now pay for it one way or another.

Donner

 

[kayelem]

Re: Social Security Reform - Today's News.........

Good post, Donner. Totally agree. Maybe my sarcasm wasn't apparent above.

 

[retire@40]

Re: Social Security Reform - Today's News.........

I think that the country is better served by a taxation/benefit system that reduces this gap and promotes a strong middle class.  We can reduce the gap through a combination of taxation and benefits.  Since our current system is already widening the gap, I am not in favor of any taxation/benefit changes that exacerbate the problem.

I don't know what you call a system that taxes the rich at 35% or higher and the poor at 0% or less, but I think the current system does promote a middle class. What would you suggest to fix the current system?

 

[LEX]

Re: Social Security Reform - Today's News.........

How should one boil it all down to the basic premise of taxation and public resource allocation?  The current social security policy of inter generational inequity, as a form of economic caste formation, can lead to unintended consequences.  As the country launches into economic policy formation in  the current debate as reflected in many of the comments on this board, consider the premise once used to address large scale economic inequity:

"To Each Citizen According to their need,
From Each Citizen according to their ability"

Karl Marx, Das Kapital.

 

[Cut-Throat]

Re: Social Security Reform - Today's News.........

Blame FDR and the New Deal Democrats who set up a welfare program that as it turned out cannot pay the bills. But we as a Nation are now committed. We all are now dependent upon it and we must all now pay for it one way or another.

Donner,

Sure the country was running along just fine with Herbert Hoover and then FDR came along and screwed everything up! And then the generation that fought in WWII elected him 4 times! - What were they thinking!

Did you ever take a U.S. History Class?

Do you really want to go back to the 'good old days of Hoover'?

 

[Adam S]

Re: Social Security Reform - Today's News.........

Why is it everybody thinks they are "The Rich" and anybody who pays less in taxes is a welfare scumbag? And they never address the subject of people who get rich far far far beyond their actual efforts, work, risk, or responsibility? How about those who work hard for the short money? Chinese yin/yang I guess? Life/balance?

As ar as economic castes..hey that's just what the Upper Caste wants. It's not SS's fault. Besides the Rich are not taxed at any great rate. Some cossetted upper middle class people DO get screwed with unecessarily high taxes but rather than curse those who dont have high paying jobs why not tax where the money is? Everybody who knows business or economics would know that. The reason why the tax code is so complicated isn't because there are 5 brackets its to protect the rich and business from paying taxes. They keep more money off the table than is on the table. Even W said we should not try to tax the rich because they just get all lawyered up and avoid the taxes. (Fine talk from The Chief Law enforcer. he knows his rich friends are cheating so instead of enforcing the law make cheating legal)

As far as SS specifically, hey... why not go to the source? Make sure the economy pays everybody enough? I'm not talking about POS poor people. I am talking about the vast vast body of the population. Where's teh much vaunted "tricvkle down"? Why are we so distracted by the reletive nickles and dimes of taxation when if the economy did what it is suyppsoed to do nearly everyboidy would ahve enough to stop worrying (This might mean less wealth for the weathy but so what? That's trickle down) And speaking of actual poor people, even W's favourite philospher said something like "They shall always be among you" so we';ll need to: 1) write some checks 2) Kill them 3) Step over them and ignore the social and economic failures

Some relevent quotes:

<i>

"The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state ....[As Henry Home (Lord Kames) has written, a goal of taxation should be to] 'remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.'"

Adam Smith
-- AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS (1776)

</i>


"At length, after much debate of things, the governor gave way that <b>they should set corn every man for his own particular, and in that regard trust to themselves. . . . And so assigned to every family a parcel of land. . . .</b> This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise. . . . The women now went willingly into the field and took their little ones with them to set corn." </i> Governor Bardfors's diary, Plymouth Colony

Sounds like a government sponsored project to me. I wonder if people closer to the "Elders" got maybe a better deal on the land, the corn, some kidn of head-start, heads-up... a little something that people who had less personal contact with Gov Bradford et al miight have gotten.

 

[RAE]

Re: Social Security Reform - Today's News.........

ex-Jarhead and Donner - I'm curious, how do you feel about the huge budget deficits that this administration has run up, with respect to the effect that may have on your children and grandchildren?

RAE

 

[Donner]

Re: Social Security Reform - Today's News.........

Cut-Throat--

Nope, don't want to go through GDII (Great Depression II)! But, if FDR was around today he would be the first one to say fix the problem! I don't think there is going to be a long stalemate on this thing. I think Bush is going to propose a plan, hear out the arguments, and come to some workable compromise that will have to incorporate some combination of reduced benefits and higher costs. He will then present it to the Congress for a vote. I think a big element of the final compromise will be to give all of us ample opportunity and time to adjust to the world as it is. And we will all cinch in the belt and get on with it because we all know something has to be done.

Donner

 

[John Galt]

Re: Social Security Reform - Today's News.........

Hi Donner. I agree that "something" has to be done,
I just disagree with when to do it, and given history,
I am pretty sure I won't like the debate or the outcome.
My view remains that it is an easy fix which doesn't even
need much attention right now. Certainly not a "crisis"
by any means.

JG

 

[Donner]

Re: Social Security Reform - Today's News.........

RAE--

Bush picked the worst time in the world to get himself elected the first time around. He inherited a stock market bubble that burst, a slowing economy and then came 9/11. He implemented exactly the right plan to keep the economy from rolling over completely. He cut taxes and poured on the fiscal stimulus ie., ran deficits. At the same time Greenspan and the Fed cut interest rates to the bone and expanded the money supply. Textbook. Absolutely classic Keynesian response to the conditions at the time. What would you have done in the last four years?

My take now is that our economy is presently strong enough to get along without deficit stimulus and accomodative Fed policy. In fact, its time to firmly apply the breaks to prevent the economy from overheating down the line. I think everyone will be shocked by Bush's 2006 Budget to be released shortly. People will soon be calling him not a spendthrift but a Scrooge! (Probably the same people! ) But its the right thing to do and he has the guts to do it. Now if we could only get Sir Alan to do the right thing we might keep this economy on a sustainable path.

Donner

 

[Marshac]

Re: Social Security Reform - Today's News.........

I think everyone will be shocked by Bush's 2006 Budget to be released shortly.  People will soon be calling him not a spendthrift but a Scrooge!

I'll believe it when I see it.

 

[Nords]

Re: Social Security Reform - Today's News.........

Bush picked the worst time in the world to get himself elected the first time around.

Hunh, I didn't think he won an election until 2004...

What would you have done in the last four years?

I wouldn't have accelerated the 2001 tax breaks. More than enough stimulus could have been achieved with the child credits and the reduction of the dividend tax rates. But that 2003 decision was more about re-election politics and Iraq distraction than it was about economic probity.

I believe that when Buffett & Greenspan disagree with the administration's proposals, it's worthy of further research before action. But then again, they made their decision on fundamentals and not election momentum.

 

[Donner]

Re: Social Security Reform - Today's News.........

JG--

I agree. Not an immediate crisis. And I agree nobody's going to like the outcome much. Benefits are going to be cut. Who's for that? But I have a hunch that the longer we wait the more its going to hurt. Usually works out that way.

Donner

 

[Bob E]

Re: Social Security Reform - Today's News.........

Donner - Sorry, but I fail to see how cutting taxes and "pouring on the fiscal stimilus", i.e. running huge deficits" has served the country well these last 4 years. We could get into a long debate about fiscal policy, but to bring this back to the thread, I find it ironic that you are worried about your kids and grandkids relative to SS, when we have a president in office who has run up some of the largest deficits ever (that your kids and grandkids will have to pay for). And even if his 2006 budget is scrooge-like (which it probably will be on the domestic side, in order to pay for this ill-advised war), there's no real hope of making significant dents in the deficit before he leaves office, domestic cuts notwithstanding. And if he decides to borrow more $$ to fund the transition cost from the current SS system to a more privatized system (as he has hinted he may do), the situation will only get much, much worse. So the next pres. will likely inherit an incredibly large deficit(Bush inherited a significant surplus, so I dispute your statement that it was "the worst time in the world to get himself elected").

Let's face it, this administration is all about getting govt. out of people's lives as much as possible. They make no bones about that. The SS privatization thing is just another example of that, in a long line of examples since W took office. There is no crisis in the system, and they know that (yes, it needs some tweaks to remain viable over the long haul, andother posters in this thread have suggested modifications that would greatly alleviate the problem). If you think that their main motivation for revamping SS is to protect benefits for your grandkids, I think you are sadly mistaken. We're headed in exactly the opposite direction.

RAE

 

[Guest]

Re: Social Security Reform - Today's News.........

Overhauling SS, is Washington's way of not paying back the money they already owe SS. They are against Private acct. because it will be on record , even if only 2-4%, what is in the SS fund, and they may not be able to spend that. The aarp speaks for us, but try talk to someone at aarp and voice your oppinion ,you cant do it. I wonder if congress stopped spending the SS funds money today ,on things other than SS ,would we have to do anything?

 

[John Galt]

Re: Social Security Reform - Today's News.........

Hello RAE and all, slightly off-topic if I may.....................
RAE, where in the UP do you reside? I lived and worked
in the Menominee area for about 11 years and owned
property near Escanaba and Ishpeming. For all of you
"flatlanders", yes those are real Yooper towns.
Anyway, I loved the area except for the winters.

JG

 

[sgeeeee]

Re: Social Security Reform - Today's News.........

I don't know what you call a system that taxes the rich at 35% or higher and the poor at 0% or less, but I think the current system does promote a middle class.  What would you suggest to fix the current system?

Well . . . you have to look at the right statistics.

First - Talking about taxes without talking about benefits is like stating what a shopping trip costs without specifying what you bought on that trip. If I pay higher taxes but get proportionally more benefits from the government that the tax supports, I still come out ahead. Similarly, if I pay no taxes, but the government programs actually work to push me further into poverty, then I still come out behind.

Second - No one pays 35% tax rate on total income in this country. What happens is that some people pay at a 35% rate on the high end of their adjusted gross income (AGI). But AGI is not equivalent to the standard english definition of income. It excludes certain kinds of income and provides deductions and reductions to other types of income.

It is interesting that 20% of the population owns over 80% of the wealth (US Census statistics), but they have never had to report more than about 60% of the AGI (IRS statistics). How does that happen? I mean, wer are all born naked and without wealth. The wealthy have manged to get the government to pass favorable laws that define AGI so that it ignores certain kinds of income that only they recieve in any significant amount. They have further managed to get the government to pass laws that provide them with deductions and loop holes to protect more of their income. It is true that the poor and middle class also have access to certain AGI protection, but not to the extent that the rich have. Thus, the rich hold a much higher percentage of the country's wealth than they have ever had to report as income. This is not true for the poor or middle class.

By the way, the statistics look even more lopsided if you look at only the top 10% or top 1% of the country.

Regarding your question: "What would I do to fix the system?" The advice that comes to mind is, "If you realize you are in a hole, first, stop digging."

I would not exacerbate the potential underfunding issue by reducing the taxes going toward it (ie. don't send some of the funds to private accounts which will cause us to run shortages sooner). I would get rid of the tax breaks that have made the overall national deficit problem worse (if I still had a surplus, I could use that to bridge the short-term short-fall that I may face several years from now). I would stop spending away the surplus like a drunken sailor (this is more difficult to do than it would have been had we not invaded Iraq without justification or world support). I could go on, but you get the picture. . .

 

[John Galt]

Re: Social Security Reform - Today's News.........

Hi salaryguru! I agree that government spending is
totally out of control and bordering on the
incomprehensible. However, although I have relatively little, I begrudge the rich nothing, no matter how they get/got it. They take advantage of whatever they can
(tax-wise and otherwise). That is as it should be IMHO.
As for the rich getting richer............more power to them I say. This reminds me of the film "Farenheit 9/11".
I think there was some footage of a Bush speech
where he says "Here I am with the haves and the have-mores, otherwise known as my base." Some truth to
that.

JG

 

[unclemick]

Re: Social Security Reform - Today's News.........

You guys need to get serious.

When I was eleven or so - my Dad took me aside - " There are two kinds of crooks in the world - Democrats who go to jail and Republicans who go to the country club and sit around figuring out how to pass laws to make their stealing legal."

I also got my first BB gun - which I sighted in on smear posters against Nixon (everybody liked Ike). The poster showed Nixon's face with the sub title 'Would you buy a used car from this man?' 1954 dirty politics. I think in those days, the Dem.'s were for govt. deficit spending.

On a lighter note - skimmed the MIT lecture(Kotlikoff) - his generational accounting and simulation methods take into account all spending, income, taxes including state sales, SS, and so on. If that could morph into something akin to the Hurricane models(simulation with dynamic feedback) - then 77 million boomers eating a little dog food once in while might not be be to high a price - provided the model gives them enough time to shop ahead and watch for sales.

 

[John Galt]

Re: Social Security Reform - Today's News.........

I am serious.

 

[RAE]

Re: Social Security Reform - Today's News.........

John - I live near Iron River. Small town about 100 miles or so west of Escanaba. I love it here except for the winters, also (and we get a lot more snow here than Escanaba or Menominee do!). RAE

 

[John Galt]

Re: Social Security Reform - Today's News.........

Yeah, I recall when I moved to the Upper Peninsula
(1982) I was told that the Yoopers called that area the
"banana belt". Pretty cute! Turned out it was true, at least as compared to areas on Lake Superior. Marquette
County for example. I saw the other day where
Marquette was the 2nd snowiest city in the lower 48
states.

JG

 

[MJ]

Re: Social Security Reform - Today's News.........

However, although I have relatively little, I begrudge the rich nothing, no matter how they get/got it.

Hi JG,
There you go again with your generalities. I guess the robber barons, Al Capone, and Sadam just to name a few rich men, would have been lucky if you were in charge and society would have been better off.Then again if you were in charge, you would be filthy rich too. Since you would have no need of that miniscule SS check, SS would be out as well!

MJ :-/

 

[John Galt]

Re: Social Security Reform - Today's News.........

Hi MJ. You are right about the "generalities". Guilty
as charged. But, my point was sincere. BTW, class
envy is very unattractive. Soaking the rich is not the answer.

JG

 

[MJ]

Re: Social Security Reform - Today's News.........

BTW, class envy is very unattractive. Soaking the rich is not the answer.

Hey Mr. JG,
I may be guilty at times of class envy (just human,I guess), although I suspect if I were very rich, I would feel guilty of my class privileges (just human,I guess).
I generality don't care about people being rich (G-d bless them) but the method by which they attained their wealth (enron, world com, Sadam) usually on the backs of hard working and sometimes oppressed people.

MJ