Quote:
Originally Posted by Cletus Awreetus-Awrightus
I was clarifying.
As to whether I support it or not -- no. My understanding is that we have a few options that would keep SS solvent:
a. Let the payroll tax increase
b. Keep the payroll tax cut, and make general fund transfers
c. Keep the payroll tax cut, and raise the cap on wages.
I support C. Some people say C. would add net costs, but frankly I think that analysis is wrong. Given the choice of a. or b. I would probably support A., although it really chaps my ass to see high-earners exempted from this broken system that I don't want to be involved with. Maybe they can lower the cap to $30,000/year.
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None of those options will make Social Security solvent.
If you were born in 1971 or later, there is no Social Security for you, as things currently stand. Even if your economy grows at the outrageous rate of 12.5% per Quarter every stinking Quarter from now until December 2037, there is no Social Security for 2038.
The Social Security program is effectively dead in the water; it is history; it is over; it is done: garnish it and put a fork in it already. The sooner people admit that, the better off their lives will be.
Your economy is dead for the remainder of this decade. Even if by some miracle you managed to create 225,000 new jobs every single month beginning right now, right this minute, and for the next straight 112 months, your unemployment rate would be 6.3% by January 2021.
That is reality.
It is also reality that such growth is unprecedented in the History of Earth.
You all need to find an alternative for Social Security and you need to do that now, because waiting until 2038 is not going to work. The June 2012 SSA report will show that the Trust Fund becomes insolvent in 2036. And for the remainder of the decade, each succeeding report will show the Trust Fund to be insolvent a year or two earlier. By 2020, there's a good possibility the Trust Fund will be insolvent by 2028, so waiting until 2020 would not be a good idea.
There are some things that you can do in the here and now for those who are already receiving benefits and for those who would be receiving benefits in the next 10 years or so.
You can raise the cap. That would help a lot. You should raise the cap to $250,000 and then bar those who earn or through capital gains make more than $250,000 from receiving benefits. Let's be real here, if you have the ability to earn with your own labor or through capital gains more than $250,000 per year, then you have the financial common sense to provide for your own retirement and health care.
As far as raising taxes, that isn't going to help. You would need to tax every single working American at 81% in order to pay for Social Security (and Medicare) through the year 2050.
How realistic is that? Okay, so that's not going to happen.
Social Security (and Medicare) are nothing more than a legalized Ponzi Scheme. Like all Ponzi Schemes, they ultimately fail, and this one is destined to fail big. The best you can possibly do is find some way to keep some of the people in benefits and an alternative for the rest.
Remember, in FDR's own words, Social Security is not income and was never intended to be income. It was designed as a supplement in the event you lost your personal savings through bank failure, or pension plan through collapse, or in the worst case scenario you lost both your personal savings and your pension plan. Social Security would keep you off the street and with food in the cupboard, but it was never intended to fund people's life-styles. That is what pension plans and personal savings are for.
You may need to start means-testing Social Security (and Medicare) in order to save it, in addition to raising the cap.
Raising the Social Security Tax is not something that would be wise now. I would remind people that the Social Security Tax increase ordered up by the Democrat-controlled House and Senate was the straw that broke the camel's back and put the country in recession 30 years ago.
Quote:
Originally Posted by Cletus Awreetus-Awrightus
As I understand it, Obama also supports C., but he proposed B. as an alternative to the people who obstinately refuse to accept the possibility of raising the cap, not because it's good policy, but because they want to make Obama look bad so he'll lose the next election. I suppose it is possible that he would use B. as "rumsfeld rationale," that pushing a failed and broken system closer toward failure is actually pushing it toward reform.
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"Budget fund transfers" are effectively budget cuts. There's no way to transfer money from the general fund to Social Security without cutting the budgets of Education, Defense, Housing, and other offices and agencies.
Since government spending is what is propping up your economy, that isn't too smart.
Your debt-ceiling "crisis" isn't over yet. You still have to sell about $1.5 TRILLION in securities to get the cash you need.
And then in April, you have to sell $1.7 TRILLION in 1-year T-Bills that come due. And then in October, you'll do it all over again, because you have to sell another $1.5 TRILLION (or more) from the 2012 Budget Deficit, and then re-sell the $1.5 TRILLION from the 2011 Budget Deficit, and you'll keep doing that for the next 10 years, all the while your National Debt continues to increase to the point where there will be no one to buy your debt.
And then what?
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