Budget Numbers: SS 2% Tax vs. Budget Cuts (Simpson, leader, economic)

[DRob4JC]

With the Social Security Tax 2% tax cut - it is estimated that $160 billion less will be getting to the government.

Meanwhile, the spending cuts for FY2011 are only $38 billion.

Why aren't the spending cuts equal to the $160 billion less that the government is taking in?

[Toyman at Jewel Lake]

Originally Posted by DRob4JC

Why aren't the spending cuts equal to the $160 billion less that the government is taking in?

I'll take "Because our elected "leaders" are incompetant" for $1000, Alex.

[EinsteinsGhost]

Originally Posted by DRob4JC

With the Social Security Tax 2% tax cut - it is estimated that $160 billion less will be getting to the government.

Meanwhile, the spending cuts for FY2011 are only $38 billion.

I didn't think payroll tax cut applied to FY2011. As it is, you're talking about social security, which is supposed to be paid for via payroll taxes and there was an estimated $69B shortfall for FY2011.

With payroll tax cut, are you suggesting that people currently on SS be paid less by 20% to make up for the shortfall? $160 Billion would be about 20% of the Social Security pay out for 2011.

Why aren't the spending cuts equal to the $160 billion less that the government is taking in?

Is that the idea behind tax cuts?

[DRob4JC]

Originally Posted by EinsteinsGhost

I didn't think payroll tax cut applied to FY2011. As it is, you're talking about social security, which is supposed to be paid for via payroll taxes and there was an estimated $69B shortfall for FY2011.

With payroll tax cut, are you suggesting that people currently on SS be paid less by 20% to make up for the shortfall? $160 Billion would be about 20% of the Social Security pay out for 2011.

2% tax cut is in place now. SS tax is 4.2% instead of 6.2% of the first $106,800 of yearly income.

I did not suggest anything about SocSecurity. I do want simple kitchen table economics. If they are estimating less coming in, make account for it in the budget.

[EinsteinsGhost]

Originally Posted by DRob4JC

2% tax cut is in place now. SS tax is 4.2% instead of 6.2% of the first $106,800 of yearly income.

I did not suggest anything about SocSecurity. I do want simple kitchen table economics. If they are estimating less coming in, make account for it in the budget.

If the cuts affect SS revenue, shouldn't the cuts be instituted to make up for the deficit on SS payout today?

[DRob4JC]

Originally Posted by EinsteinsGhost

If the cuts affect SS revenue, shouldn't the cuts be instituted to make up for the deficit on SS payout today?

SocSecurity in theory means that you get what you paid into the system. So by theory, the 2% should only affect those paying into the system.

Or are you indicating SocSecurity is a ponzi scheme, where the government spent the money already - and they are directly paying recipients now with what is coming into the system today? If this is the case, then yes you may have a point.

[DRob4JC]

At least by your answer you understand that SocSecurity is a ponzi scheme. You would probably never admit it directly.

The Homer Simpson Approach to Social Security

In a classic episode of The Simpsons, a hungry Homer Simpson runs out of donuts and breaks into his emergency stash. But when he opens the box, it’s empty except for a note that reads: “Dear Homer, IOU one emergency donut. Signed, Homer.” Homer curses his earlier self: “Bastard! He’s always one step ahead.”

... the federal government has already spent the Social Security surpluses of the last decades, replacing the borrowed money with so-called “special issue” bonds. But according to the Office of Management and Budget (OMB), these “special issue” bonds “do not consist of real economic assets that can be drawn down in the future to fund benefits.” Instead, they are mere promises to repay the borrowed money, just as Homer Simpson’s IOU is a mere promise to someday replace the borrowed donut. These “special issue” bonds are thus no more tangible assets than Homer Simpson’s IOU is edible.

[EinsteinsGhost]

Originally Posted by DRob4JC

SocSecurity in theory means that you get what you paid into the system. So by theory, the 2% should only affect those paying into the system.

So you're into deficit reduction decades into the future and right now we're just fine?

Besides, social security is a social entitlement program and all are equal participants. If there have to be cuts, I want it now. If there have to be cuts 30+ years later when I will qualify, I will take them then. Is that not fair?

Or are you indicating SocSecurity is a ponzi scheme, where the government spent the money already - and they are directly paying recipients now with what is coming into the system today? If this is the case, then yes you may have a point.

Are you saying there is no deficit spending on SS today?

[DRob4JC]

Originally Posted by EinsteinsGhost

So you're into deficit reduction decades into the future and right now we're just fine?

Besides, social security is a social entitlement program and all are equal participants. If there have to be cuts, I want it now. If there have to be cuts 30+ years later when I will qualify, I will take them then. Is that not fair?


Are you saying there is no deficit spending on SS today?

I am into government spending what is received.

[EinsteinsGhost]

Originally Posted by DRob4JC

I am into government spending what is received.

Based on FY2011 budget:
Social Security Spending:$701B
Social Security Revenue: $632B
Deficit: $69B

But you said, the deficit with SS tax cut is $160B and should be made up by spending cuts. But you won't accept cuts to SS, instead want to cut elsewhere.

I say, make social security spending equal to the social security revenue received so we have zero deficit. Why not?