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Joe, you are inadvertently confusing facts with opinions. Here is an example of an opinion rather than a fact:
"The honest implications of eliminating the cap is that we will not be able to raise that money to control the deficit. We are diverting tax base away from other priorities to Social Security."
You have just said that eliminating the cap covers 72% of the shortfall. The remaining 28% can painlessly come from small, long-term changes to the tax rate and to benefits. Moreover, I personally would be quite pleased to see money diverted away from other priorities, such as endless war, and directed instead to SS obligations.
Here is another sleight of hand, perhaps inadvertent:
"CBO's projection for the exhaustion point of the Trust Fund is 2031. That assumes a good economy. That is 17 years. Someone turning 67 today expects to live 17.7 years."
Expecting to live 17.7 years is equivalent to expceting SS to be unable to meet its obligations in your lifetime only if (a) one believes that the CBO projections are correct (I don't), and (b) one believes that nothing will be done to remedy the situation. Consequently, i do NOT expect your implied outcome to happen, because I believe that (a) is yet another flaky extraoplation of the present into the future, and (b) yes, something will be done.
Regarding Jefferson -- he was long dead by the time SS came along, and couldn't possibly have expressed an informed opinion on the topic. How he might have viewed the funding of SS is just conjecture . . .
Let's look at facts and opinions. It is a fact that CBO has projected the exhaustion point of the Trust Fund in 2031. It is an opinion - one that may well be right - that CBO is incorrect. I am putting a fact into context. What does 2031 really mean. It is a fact that someone turning 67 today expects to outlive Social Security's ability to finance full benefits. That fact will change should something be done.
How you look at that fact can differ. You see the fact in one light. Someone else will see it in another. I do not tell you how to value the fact. I provide facts, and until something is done, it is a fact.
"The honest implications of eliminating the cap is that we will not be able to raise that money to control the deficit. We are diverting tax base away from other priorities to Social Security." It is a fact that you can't raise the same dollar for two different taxes. Opportunity Cost is a basic concept of economics - you may not accept it but most economists do. I am not a fan of war -endless or otherwise, but I would be quite pleased to see the money diverted to pay down the debt. This is the problem for Social Security. It is one of many priorities.
Thomas Jefferson wrote a letter on one generation leaving a debt to another. He came to the conclusion that the younger generation would shake off the debt, and Social Security is a legally shakeable debt.
It is a fact that someone turning 67 today expects to outlive Social Security's ability to finance full benefits.
Joe, it is simply not a fact. I don't know whether you are deliberately misstating this; perhaps, you don't understand exactly what you are saying. Are you are trying to say the following? "The life expectancy projected by the CBO for the SS trust fund is shorter (slightly) than the life expectancy of someone turning 67 today." This may be factually correct.
But the two ideas are quite different. Your phrasing implies a loss of confidence in SS, which may be true for some 67 year olds, and not true for others. Since you are so vocal about this topic, I think that it is important that you get it right . . .
Quite frankly, I don't care what Jefferson might or might not have said. If you think that he was a great oracle, whose opinions carry weight 200 years into the future, fine. You might be interested in reading his thoughts on racial characteristics, which have about as much relevance today as his thoughts on the repudiation of debt. You might also remember that Hamilton had quite a different view re debt.
Joe, it is simply not a fact. I don't know whether you are deliberately misstating this; perhaps, you don't understand exactly what you are saying. Are you are trying to say the following? "The life expectancy projected by the CBO for the SS trust fund is shorter (slightly) than the life expectancy of someone turning 67 today." This may be factually correct.
But the two ideas are quite different. Your phrasing implies a loss of confidence in SS, which may be true for some 67 year olds, and not true for others. Since you are so vocal about this topic, I think that it is important that you get it right . . .
Quite frankly, I don't care what Jefferson might or might not have said. If you think that he was a great oracle, whose opinions carry weight 200 years into the future, fine. You might be interested in reading his thoughts on racial characteristics, which have about as much relevance today as his thoughts on the repudiation of debt. You might also remember that Hamilton had quite a different view re debt.
My phrasing does not imply a loss of confidence in SS. It is a fact, one which makes you less confident. That does not mean that everyone will see the fact in that light. I will tell you that a large number of people attribute their reaction to my facts to my intent in writing them.
Essentially you are saying that the life expectancy of a 67 year-old is not scientific enough. I am looking at data in aggregate and you are responding at an individual level. These aren't the same thing.
Some people have longer life expectancies. Females in aggregate turning 67 today for example expect to live much longer than 17 years. A women in aggregate turning 70 today expects to outlive full benefits in Social Security. So if anything my statement overstates the confidence that you should have.
Or they could broaden the tax base, like congress did by adding a Medicare surcharge to capital gains. Automation means the labor base will continue to shrink, so they just need to tax the machines that replaced the labor. Problem solved.
Or they could broaden the tax base, like congress did by adding a Medicare surcharge to capital gains. Automation means the labor base will continue to shrink, so they just need to tax the machines that replaced the labor. Problem solved.
I sense that people use the phrase "problem solved" very loosely in the Social Security debate. I am curious whether you have seen any similar proposals scored by the SSA.
Or they could broaden the tax base, like congress did by adding a Medicare surcharge to capital gains. Automation means the labor base will continue to shrink, so they just need to tax the machines that replaced the labor. Problem solved.
My phrasing does not imply a loss of confidence in SS. It is a fact, one which makes you less confident. That does not mean that everyone will see the fact in that light. I will tell you that a large number of people attribute their reaction to my facts to my intent in writing them.
Essentially you are saying that the life expectancy of a 67 year-old is not scientific enough. I am looking at data in aggregate and you are responding at an individual level. These aren't the same thing.
Not at all. I understand exactly what life expectancy is, and your misrepresentation does not make me one iota less confident. It seems as though you are trying to play with a matter of semantics here, and a fairly important one at that, given the propensity of activists to deliberately choose language in such a way as to spin an issue. There is also the question of sifting through information to cherry-pick "facts" that create a collage that is closer to propaganda than to objectivity.
To say that 67 year olds "expect" whatever implies that 67-year-olds agree that whatever is the most likely outcome, or even the only possible outcome. This is the common meaning of the language, even though the same verb "expect" may indeed be used correctly in your context as derived from "life expectancy," although such use is rare among normal people. I believe that some play this kind of word game very deliberately in order to spin. For example, we have the phrase "death tax." By careful misapplication of language in this way one can created his own "fact."
On the other hand, if it is your intention to present things clearly, the matter regarding 67-year-olds can be phrased as I have suggested above.
[ partially deleted by HF ]
EDIT: Never mind, Joe, I see from your CD profile: "I write political commentary . . ." Thanks, enough said.
Last edited by Hamish Forbes; 04-15-2014 at 02:19 PM..
Highlights:
- If the earnings cap was high enough to cover as many people as it did in the 1980's it would now be $230,000, not $117,000. Making this adjustment would resolve about 28% of the projected shortfall. Removing it entirely would resolve up to 86%.
- Raising the tax by 2.7% would add 50 years solvency.
- Raising the retirement age to 69 would reduce the deficit about 44%.
These are solvable problems. A century or two from now we will ride our solar powered jetpacks down to the Star Trek replicator and get everything for free, but in the meantime let's do what's necessary to keep it solvent.
Obamacare and Medicare are two separate things. The new Medicare taxes were to partially solve the problem that Medicare was quickly running through its trust fund.
You can anticipate that a wide range of taxes will be increased in the next few years, as the "borrow and spend" mentality of congress runs into the brick wall of actually having to pay off the treasury notes they have issued.
You see a certain amount of panic about this in the "Social Security is broke," or "there is no Social Security Trust Fund" nonsense. Of course there is a trust fund, in the form of T-bills backed by "the full faith and credit of the United States." Those are the same instruments the Chinese and Japanese own, but they want to welsh on the debt owed to US citizens. They're already starting to claim they don't really owe the money, because they don't want to pay it back.
It's inevitable that taxes will go up. The question is, what taxes? There are wide ranging suggestions about broadening the tax base, from a VAT to a transaction tax on stocks. We could substantially increase income tax collections by moving toward a flat tax, or at least removing most deductions and exemptions. It's obvious that a payroll tax will no longer fund Social Security, if for no other reason than the labor force is dwindling steadily. Currently, only 43% of the US population works for a living, and I fully expect that number to hit 35% in my lifetime. With mechanization and automation, we just don't need as many workers.
You are naive if you think the first few new taxes are going to be the end of it. We will see years of tax increases and tax restructuring.
You see a certain amount of panic about this in the "Social Security is broke," or "there is no Social Security Trust Fund" nonsense. Of course there is a trust fund, in the form of T-bills backed by "the full faith and credit of the United States." Those are the same instruments the Chinese and Japanese own, but they want to welsh on the debt owed to US citizens. They're already starting to claim they don't really owe the money, because they don't want to pay it back.
It is odd to follow a discourse on the non-sense of there-is-no-trust-fund, with the complete non-sense that the government will not payback Social Security. It is absurd to believe that the government will default on a series of bonds which would send Social Security into an immediate crisis.
The assets of the Trust Fund will be repaid with interest. Kotlikoff is talking about the other $23 trillion dollars of promises for which the system will not generate money.
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