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How bad is the social security shortfall?

Discussion in 'Economics, Business, and Taxes' started by American Patriot, Aug 12, 2012.

  1. trapdoor

    trapdoor Governor

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  2. degsme

    degsme Council Member

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    Why not? by 2014 there will be Dems in the majority in House and Senate. There is no law that pegs tax revenue to 20% of GDP.

    As for how you can raise taxes - uncapping FICA IS POPULAR. And yes the polling DOES disambiguate for likely voters. You keep forgetting about the 18-33yo demographic

    As for Years Worked will work fine with Minority voters. As for "flying" with people 50 and older - again, none of this has to occur overnight, phase in periods are perfectly fine. You are overstating the demographics problem.
     
  3. gabriel

    gabriel Governor

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    Learn to cut like Chrétien
    Paul Tuns, Citizen Special
    Published: Wednesday, December 21, 2011
    At a time of widespread crises in government finances in Europe and the United States, and deficits extending to four or more years in Ottawa and Ontario, governments everywhere should follow the fiscal example of Liberal prime minister Jean Chrétien's government.
    Today, politicians plan to tackle deficits by promising to slow down the rate of growth in government spending and letting rising tax revenue cover the fiscal gap when the economy inevitably grows - or so goes the thinking of governments of all political stripes.
    But in the mid-1990s, Chrétien attacked deficits more aggressively by making difficult political decisions to cut program spending.

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    Reuters recently interviewed Chrétien for a feature on how Canada avoided becoming a "basket case" economy, and he stated that were it not for drastic cuts to programs, Canada could be in the same fiscal mess today as Greece, which is in danger of defaulting.
    At a time when Republicans in the U.S. are obstinately refusing to consider tax increases and Democrats are foolishly ignoring the need to cut spending, Reuters outlined how Chrétien made the potentially career-killing move to cut spending and raise taxes, noting that for every dollar of new tax revenue, seven dollars of program spending were slashed. Chrétien went on to win two more majorities after he and finance minister Paul Martin launched their ambitious four-year plan to balance the budget. Chrétien told Reuters, "I knew we were in a bind and we had to do something." For all his craven manoeuvring to hold office and the scandal that plagued his time there, Chrétien deserves credit for balancing the books, and doing so in the way he did.
    Reuters reported that bureaucrats in the Finance Department had warned governments for decades that their free-spending ways were unsustainable. They were inevitably ignored; in the 13 years before Chrétien was elected, deficits as a percentage of GDP ranged from 4.2 to 8.3 per cent.
    In 1993 Chrétien campaigned on, and in 1994 delivered a budget, limiting future deficits to three per cent of GDP, but it wasn't enough.
    In June 1994, Moody's Investor Services lowered its rating on Canada's foreign currency debt, a reaction to the February budget which the ratings agency found insufficient to address the mounting debt. Later that year, an editorial in the Wall Street Journal said that Canada was in danger of becoming "an honorary member of the Third World in the unmanageability of its debt problem," suggesting the necessity of a bailout from the International Monetary Fund.
    Martin's 1995 budget put into place cuts that would balance Ottawa's books by 1997-'98, Ottawa's first balanced budget since 1970. The changes introduced in that budget kept Ottawa in the black until the financial crisis of 2008.
    Chrétien had named intergovernmental affairs minister Marcel Massé, a former secretary of the Privy Council, to chair the cabinet's Program Review Committee. Massé's experience in the public service led him to conclude across-theboard cuts would be ineffective. Instead, Massé subjected every program to six tests including whether it served the public interest and whether it could be better delivered by the provinces or private sector. He came back to cabinet with plans to eliminate unnecessary programs and radically reform others.
    12
     
  4. Days

    Days Governor

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    I don't think either of you understand the facts. First of all, a trust fund is only "legal fiction" as far as all law is fiction. For that matter, the entire government is legal fiction. The only thing that never changes at the Treasury is the cut block stone sinking slowly into the Potomac netherlands. But for the times we live by, for one shining moment, there is a central government functioning over there and there are laws that guide that function and by those laws, the Social Security Trust Fund represents the beneficiaries of that fund, not the government; the government is the Trustee. So, ahem, let me explain a living trust to you, whatever monies contained by that trust is owed to the beneficiaries, in this case millions of citizens who paid into the Trust, the Trustee is not allowed to touch Trust Funds, the Trustee is merely there to administer the fund. So, if there is $4 Trillion in Treasury bonds sitting in the Social Security Trust Fund, it is owed to the beneficiaries, not the government. Due and payable, trapdoor, as you very well know.

    Am I suggesting that we inflate our way out of our debts? That's a completely different question. I certainly am suggesting that we make good on ALL our debts. The SS Trust Fund is part of the national debt. Forfeit on it, and you forfeit on trillions in Treasury bonds... you can't be that stupid, can you?

    BTW, when was the last time the Treasury printed its own money? Because that's what I wrote, "since the Treasury can print money" means just that... but you reacted as if it happens all the time. don't confuse the Federal Reserve printing money with the Treasury; those are not the same items either.
     
  5. trapdoor

    trapdoor Governor

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    2014? I'm sorry, Degs -- this is a reality forum. Pipe dreams are down the hall.

    Youth voting?
    I don't worry about the 18-34 demographic, because 50 percent of it, 18-24 demographic does not, for the most part, VOTE. That's what you keep missing. You can market all you want to that demographic, but if they don't go to the polls, they don't count (and yet it's the very demographic most likely to be pissed off when the mandate goes into effect, too).

    Uncapping FICA is not so popular as to be politically feasible. It also opens up the very fight the cap was designed t preclude.

    "Years worked" will not be "fine" with minority voters, who want the age of retirement lowered (at least for them) because they don't receive enough benefits because they die younger. So you change it to "years worked" and those who die before they achieve the years worked are still cut out -- that's going to be popular? Dream on.

    And the "phase in" still will play as phasing in the breaking of a political promise -- "Hey! I want what Dad got, the same way Dad got it!" It won't fly politically, Degs.

    For what it's worth, the Ryan cuts to the programs won't fly any better. What has to happen is massive new revenues from somewhere, combined with cuts to other programs (but not to Social Security) just for Social Security to keep the political promises that already have been made. Raising FICA, even if it were politically possible, is insufficient, and lowering benefits (by going to "years worked" or changing the retirement age), is alos insufficient, even if it were politically feasible.

    I'm no more happy about this than you are. We're saddled with an 80 year old white elephant. We can't kill it, and we can't feed it, and if it dies, it takes the whole circus with it.
     
  6. trapdoor

    trapdoor Governor

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  7. degsme

    degsme Council Member

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    Nope no pipe dreams. Regardless of who wins the Whitehouse - unless the Dems also win the House, we will have a recession in 2013. And that recession will be triggered EITHER BY
    Sequestration spending cuts
    or
    House GOP Budget cuts.

    Eitherway the GOP in Congress get the blame. And that will be expressed in the next elective opportunity - namely 2014

    Again, the rate at which they vote is steady. in 2008 it was 18% of the electorate. Weighted average means that now its 24% (18-33yo) OR HIGHER as the older ones start voting more regularly.

    Sorry demographics is demographics.



    simply wrong.

    Um no. They are dying younger because of poverty. Sorry. Years Worked will do fine. Because for those dropping out of HS and starting work (more lilely to be minority) or working Full time while in HS - they WILL see their eligibility age come down.F


    Which is precisely why the House goes Dem in 2014


    BTW, there's nothing "white elephant" about SS or Medicare. Its just a governance issue. The gotcha is that the GOP has opted to "not do" governance for the last 30 years. And THAT's the "elephant" we are paying for.
     
  8. Days

    Days Governor

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    ... so you know nothing and I have to teach you the whole history and function of the currency. great.

    Let's just concentrate on the Trust Fund. That was the subject matter.

    And what was wrong with Potomac netherlands? Are you trying to say that hinterlands is more proper than netherlands? What, did I forget to renew my poetic license? Are you writing me a ticket for an expired poetic license?

    When the government set up the Social Security Trust Fund, it did not pass law that allowed Congress to borrow from the Fund. The Fund is not fed by income taxes, it is fed by FICA taxes, hence, it is much more like a pension than a "a pass through system". Congress has no authority to "borrow" money from the SS Trust Fund... or any other government trust fund. Unfortunately, they continuously raid every last fund dry. Why doesn't the Tea Party get up in arms about that? Why doesn't the 99% get up in arms against this ongoing criminal activity? Congress is the Trustee, the Trustee administers the fund, executes the fund, but is not allowed to touch the fund for its own purposes. Ask Ken Lay about that.

    Nevertheless, we do have bonds in all our government trust funds. And those bonds are due and payable. They accrue interest and they are redeemed... every last one of them. Suggesting we forfeit on our bonds is utterly stupid. If you don't understand the difference between the US Treasury, a private central bank, or a government pension trust fund, you should at least know better than to forfeit on the debt... and the bonds in our govt trust funds are part of the national debt.

    BTW, the last president to inflate the money supply by printing our own currency in the mints was Abraham Lincoln. You seem to think it happens all the time. Actually, it never happens.
     
  9. trapdoor

    trapdoor Governor

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  10. gabriel

    gabriel Governor

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    if your citizens wont allow their leaders to fix the social security system, then your currency will collapse, your standard of living will suffer, further polarization will occur and the voters will get what they seem to want. seems like that's the way it SHOULD work.
     
  11. trapdoor

    trapdoor Governor

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  12. degsme

    degsme Council Member

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    Which means you don't actually know enough. Inflation is when the purchasing power of a single $1 goes down. Printing more dollars does not NECESSARILy do this. In fact that's what we see TODAY. We see an increase in printed dollars AND AN INCREASE in BUYING POWER.

    Now to the extent that Government funds are held in Government Bonds, there is a 'trust fund". What makes it a meaningless "trust" is that the only thing regulating it, is the self-same authority that it takes to pass a budget.

    And you are simply wrong on this.

    Wrong Days. well actually Not EVEN wrong.



    "Netherlands" isn't a word, outside of the formal noun that is the proper name for "Holland," that's what's wrong with it.


    As Degsme will soon jump in to point out, FICA IS an income tax. That tax is not "stored"in the trust fund. The revenues it generates "pass through" to current beneficiaries. Any excess is used to pay for the T-bonds in the trust fund -- but what that means is that the revenue not used on current beneficiaries is used to pay for government operations, and the bonds represent a marker saying the government will pay back those funds when the bonds are due. And the ability to pay back those bonds is predicated on having a revenue stream sufficient to do so.



    Well, your ignorance of the Tea Party is showing, as that is, in fact, a Tea Party issue. The "trust funds" haven't been "raided" there is simply no legal mechanism for the U.S. government to store money. The purchase of the bonds in the trust means the money goes where? Answer that question and you're a long way toward understanding the problem.
    .

    Because the activity is not criminal. It is not illegal for the U.S. government to buy its own bonds using its own tax revenue. It's just that the "purchase" doesn't mean anything -- the revenue that buys the bond is used just as the revenue would be used if you purchase a bond. When you buy a bond, you've loaned the government $X. When the government buys a bond it has loaned itself $X, and the loaned money is part of general revenue.



    I don't know anyone suggesting that we do this. I'm merely saying there is currently no money with which to do it, unless we borrow additional money from some source (private bond purchases, selling more bonds to China, etc.), and every time we borrow, we dig the hole that much deeper.

    .

    Lincoln did it by printing the first greenbacks, but FDR did the same thing when he confiscated the gold and went to gold and silver certificates, and Nixon did it again when we went off the gold standard entirely. And each time there was more money in circulation, but the purchasing power of each piece of money was reduced.[/QUOTE]
     
  13. Days

    Days Governor

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    I'm making a point with this netherlands argument. Why can't I use it loosely? I'm being poetic, not legal. But you are being legal.

    But then when it comes to the currency and FICA taxes and the SS Trust Fund, items that are legal, you suddenly wax poetic. I'm not letting a lawyer get away with that. You want to revoke my poetic license for netherlands and then turn around and grant yourself poetic license for FICA taxes? FICA taxes are not income taxes, they are payroll taxes and there is a bigger difference between those two items than there is between hinterlands and netherlands. Social Security is ANOTHER government trust fund. AKA its a pension by nature. That's how it was set up, that's how it was supposed to operate. And you damn well better know that it is highly illegal for a Trustee to touch the monies in a trust fund. Any Trustee. That's why we built government trust funds. If the government had any idea that it would some day become so criminal and corrupt that Congress would raid the trust funds, it would not have bothered to set up trust funds.

    Now as for the bond market, the central bank, and the fiat currency, that's another whole ball of wax and you need top to bottom reprogramming, you don't understand any of it. And stop speaking out both sides of your mouth, what are you, a politician? Are you advocating not paying the treasury bonds or are you advocating paying the bonds? Which is it? The bonds are due and payable.
     
  14. gabriel

    gabriel Governor

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    if congress is doing something illegal, file suit.
     
  15. degsme

    degsme Council Member

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    No we are not IN a recession. We are in a recovery. If it turns downwards it will be a recession. And this time around Obama will beat Congress black and blue and will essentially use Executive orders to go around Congress. and that will leave Congress with the option of impeaching - which gets them unelected in 2014... or taking up Obama's Keynesian solutions - which ALSO gets them unelected in 2014

    Nope. Simply not true. Look at the demographic numbers.

    Name one. Sorry you cannot. They don't exist. The Ryan budget takes 6% of GDP out of the economy and not much else.


    Sorry they have. Clinton brought the deficit to essentially zero. Carter broke the back of inflation with Volker. Dems in the 80s adjusted SS and Medicare for solvency for the next 50 years.

    That's all that's been required of the GOP for the last 10. and they have failed. Giving us the slowest growing decade in modern history.
     
  16. Days

    Days Governor

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    Right... me, a poor person, not even a lawyer, take on the entire federal government... oh, that should fix their boat.

    the point was, SS is every bit as much a government trust fund as any of the other government trust funds. which means those bonds are in trust. which proves my original point... SS is not broke, it has $4 trillion in it.
     
  17. gabriel

    gabriel Governor

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    lol! i a county awash with ambulance chasong lawyers you cant find one to take the rock solid case on a % basis!
     
  18. Days

    Days Governor

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    there is no idea flying so low that it can't still clear your head.
     
  19. gabriel

    gabriel Governor

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    well if there were i know who would promulgate it
     
  20. Days

    Days Governor

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    have a great day, Gabe.
     

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