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If fixing Social Security were easy, it would already be done

Discussion in 'Economics, Business, and Taxes' started by Joe Economist, May 7, 2013.

  1. Joe Economist

    Joe Economist Council Member

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    Today more than 50% of the country expects to retire after the Trust Fund is exhausted. 80% expect to be alive when the Trust Fund is exhausted. How long do you expect politicians to ignore that demographic?

    I am near 60, and more importantly I have friends who are 60. What you need to justify is why elders of today are more important than those of tomorrow.
     
  2. Joe Economist

    Joe Economist Council Member

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    Today Social Security is not allowed to borrow money. And as a voter who has children, I can't see creating any more debt just to pay benefits of a broken system. The military is a general fund issue, one that should be cut. Cutting the military doesn't change the imbalance of Social Security - in fact it makes it more pressing by cutting jobs.
     
  3. Joe Economist

    Joe Economist Council Member

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    No. What I mentioned can't be fixed. The difference between our views is that if it breaks after you are dead, it isn't a problem where as I think it is.
     
  4. EatTheRich

    EatTheRich President

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    The debt isn't the working class's problem, and it shouldn't be addressed by going after their social wage. The only thing you've said to "prove" the system is broken is that it's underfunded.
     
  5. OldGaffer

    OldGaffer Governor

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  6. Joe Economist

    Joe Economist Council Member

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    To be clear, I didn't say that the system is underfunded. I said that the Trustees of the system said that it was underfunded - by more than a year of GDP.

    If you read the original post, you would have found out that contributions can't fix that problem because they generate more promised benefits in the future. Adding contributors only changes the date on which it fails. You think that is a good idea, and I think it is a stupid idea. It is a point on which we disagree.

    The other source of revenue is taxes. You think it is a good idea to subsidize those who didn't save and didn't contribute sufficiently to the system. I think that a better use of new tax dollars is to pay down the debt created by the retirees as younger voters. You think that we can raise taxes infinitely. I don't. It is a point on which we disagee.
     
  7. Woolleybugger

    Woolleybugger Mayor

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    We have a long way to go before we hit punitive tax rates. Most of Europe has much higher taxes and wages, they are doing fine.
     
  8. EatTheRich

    EatTheRich President

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    I think that we can raise taxes by 13%, the amount needed to cover the entire infinite horizon shortfall. I never said nor do you have any basis for ascribing to me the idea that we can raise taxes infinitely.
     
  9. OldGaffer

    OldGaffer Governor

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    13% is close to infinity, think of the deficit reduction we could do for that money, why waste it on the elderly and the poor, trust bunny drones need that money for new toys.
     
  10. Joe Economist

    Joe Economist Council Member

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    So once we raise taxes to pay for Social Security, how are you going to fix Social Security's Disability program. How are you going to fix medicare? How are you going to fix infrastructure? How are you going to support the debt much less pay it down...
     
  11. Woolleybugger

    Woolleybugger Mayor

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    Priorities...medicare can be managed to more effectively administer care. Infrastructure is a great reason to issue debt. Paying down the debt is really quite silly, the issue becomes moot once the economy and wages grow...
     
  12. Joe Economist

    Joe Economist Council Member

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    We disagree. The fact that you think you can issue debt forever tells me you are detached from reality. Don't be surprised if the younger generation disagrees with you given that they have to pay for it.
     
  13. OldGaffer

    OldGaffer Governor

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    So when do you figure the younger generation will turn on their parents and grandparents and kick them to the curb? Soon? Have there been any incidents to make you think it is going to happen at all?
     
  14. Woolleybugger

    Woolleybugger Mayor

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    Really? So we don't have enough income generated each year within the USA to afford to pay SS...Since none of us have to worry about it until the mid 2030s, why the hurry? Its a paygo system anyway. Once we get to the point where SS is 100% of the taxable revenue (assuming SS taxes are subsidized by income taxes), then we can figure something out. But you know as an "economist" that any forecast that far out is really just made up nonsense. Ask yourself what an "economist" like you forecasted 20 years ago for today. Any of them right? Hell, ask Greenspan in 1999, 2000, 2001, 2002, 2003 and so on....
     
  15. Joe Economist

    Joe Economist Council Member

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  16. EatTheRich

    EatTheRich President

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    We can raise tax rates further still, and raise tax revenues without raising tax rates via economic growth. If we had a planned economy, in fact, based on state ownership of major enterprises, the surpluses from running certain of these enterprises could be used for social security, medicare, and debt payments if those are advisable.
     
  17. Joe Economist

    Joe Economist Council Member

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    So we could use the profits from say the US Post Office to fund a 20 trillion dollar shortfall? Or maybe the profits from Freddie and Fannie. Our government ran Freddie and Fannie in one of the most stable industries in history. The government managed to break both the companies and the industry.

    Friedman said it best. If the government ran the Sahara there would be a shortage of sand in 5 years.
     
  18. OldGaffer

    OldGaffer Governor

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    It should have been if Republicans ran the Sahara, and hated sand. Friedman has been discredited as an economist, is he your role model?
     
  19. worldlymrb

    worldlymrb America: Love it or Leave it!

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    State/Capitalist Enterprises (Fascism)? Like Fannie/Freddy, FDIC, and Off Track Betting (OTB)?

    Problem with that is they never really generate any profit and always end up needing to be bailed out.
     
  20. worldlymrb

    worldlymrb America: Love it or Leave it!

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    Well said,

    Currently the FRB is creating huge profits from its multi-trillion balance sheet of asset purchases... And as we all know, "profits" from the FRB goes to the UST, which is why the deficit is going down in FY2013.

    Any guesses if the UST will enjoy such "profits" when the FRB winds down QE and begins selling those assets (also causing interest rates to rise)?
     

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