Democrats & Liberals: Archives

Nothing is permanent, not even this planet. That said, preserving the viability of SS till the next century is an easy fix.

Reform it to its original intent, an insurance program against poverty, - that means removing the pension aspects of it. How does one do that? Simple. Means test the benefits. Only retirees with insufficient other means to remain out of poverty are entitled to benefits, and then, only up to the amount each required to keep them out of poverty.

Secondly, eliminate the income caps on FICA taxes. Let Bill Gates pay FICA on all of his income just like working folks making less than $87,600 per year do. These two very simple modifications to the plan today, will secure the viability of SS for another 100 years.

The reason that is true is because the demographic pressures of too few workers per retirees is self remedying. About 30 years after the last baby boomer retires, the ratio of workers to retirees increases. Thus the changes above dramatically begin producing surpluses again around 2065 to 2070. This really is a no brainer, folks.

It is only ideology regarding a society’s responsibility to its citizen’s that is in debate. There is no absence of easy solutions. Only an absence of will or knowledge of the situation by those in power.

It is only ideology regarding a society’s responsibility to its citizen’s that is in debate.

I agree, except that I would say “that should be in debate”.

Most of the social security debate is NOT about values or ideology - it’s “the sky is falling!” versus “liar, liar, pants on fire”. I find this a childish and unproductive way to “debate”.

Most of the social security debate is NOT about values or ideology - it’s “the sky is falling!” versus “liar, liar, pants on fire”. I find this a childish and unproductive way to “debate”.

You are referrring to the rhetoric designed to hide the real ideaology.

Look, on the face, Bush’s involvement in the Medicare reform made no sense. Underestimate, overpriced, budget busting, and lack of competition.

Also, on the face, the privatizing of SS makes no sense because it will bankrupt the system.

But, you see, that is the ideaology behind the reform rhetoric. How does a political party end government socialized programs? With an up or down vote? Of course not. But, by hastening and helping the bankruptcy of the nation and those socialized programs, the Republican Party can end those programs by demonstrating in the future how unsustainable they are, and point to the Democrats as responsible since socialized programs are their baby. They actually kill two birds with on stone. Their deficits and debt, and reforms evenutally force the ending of socialized programs as bankrupting and blame it on their political opponents, despite the fact that it was the Republicans who drove the deficits and debt into a black hole, and raised the costs of the socialized programs. In the end, their idealology of anti-socialized programs and pure capitalism will succeed unless the American people and moderate Republican’s especially, wake up and realize the slight of hand that is taking place under their noses.

My personal favorite factoid on this is Paul Krugman’s observation that in 2042, when Bush says it will be “bankrupt”, SS will be paying for 80% of its expenses from revenues. In 2006, the US government can pay only 66% of expenses from revenues. So 30 years from now, SS will be less “bankrupt” than Bush’s government budget is right now.

The reference to bankruptcy has to do with the fact that Social Security was intended to be a trust fund, not an immediate income transfer. Unfortunately, payouts have grown much faster than revenues, so we’re now depleting that trust fund, year by year. As long as revenues remain less than payouts, we will continue to deplete it.

Social Security is not bankrupt now, thank God, but when it becomes so - whether in 2042 or some other time - it’s going to cause a massive budget crisis.

I’m not 100% convinced that Bush’s plan will work, but considering the Democratic alternative is to sit around and wait, and considering I’m going to start collecting Social Security right around 2049, it’s important to me that people take the long-term health of this system seriously. Otherwise, I’m paying 7% of my income into something I’ll never benefit from.

“Unfortunately, payouts have grown much faster than revenues, so we’re now depleting that trust fund, year by year. As long as revenues remain less than payouts, we will continue to deplete it.”
Really? The last time I looked, SS hasn’t even dipped into the trust fund yet and isn’t scheduled to do so until something like 2018. (Okay, I may be off by a few years, but it’s no sooner than 2012).

The reference to bankruptcy has to do with the fact that Social Security was intended to be a trust fund, not an immediate income transfer. Unfortunately, payouts have grown much faster than revenues, so we’re now depleting that trust fund, year by year. As long as revenues remain less than payouts, we will continue to deplete it.

I believe that to be dead wrong, Chops. Show me a link.

Social security was always planned to be a pay-as-you go. The trust fund is a cushion for the anomolous demographics associated with the baby boom. We’re paying into it now - in other words social security is now well in the black. We continue to pay into it till 2018, at which point the current plan says that we will draw it down to zero at around 2040-2050, after most of the boomers are out of the system, at which point it will again be pay-as-you-go.

b coffey, 2012 is the date I last read officially.

And the system will return to surpluses after the baby boom retirees die off some 25 to 30 years after they retire. The work force is growing, birth rates are increasing off their lows, and immigration into the work force will continue. It is a demographic hump that must be gotten over, and I outlined a simple solution to ride over that hump in the first comment above.

My big question is, where are the intellectuals in the Dem. Party who should be out their thumping and stumping the simple solution mentioned above. (one of the reasons I left the Dem. party years ago).

i think what roger hickey, the co-director of the campaign for americas future, had to say on democracynow show of 1/14 in answer to cheney’s speech speaks volumes as to why bush is wanting so badly to privatize social security. it is worth reading: http://www.democracynow.org/article.pl?sid=05/01/14/1519241
as usual they r trying their scare tactics and threats to achieve their goals.
i say keep writing to our elected officials in dc, let them know we r against the changes bush is wanting. remind them of elections 2006 and our zeal to get people in office who will speak for us.

Bush has to push the economic numbers pretty hard, and start with very pessimistic assumptions to get his bankruptcy. I don’t think the extent to which he is pushing things is accidental. I think he hates social security for reasons he does not see fit to tell us about, and he has no problem with wrecking the system to save it, especially if it’s good for business. We should be wary about any government program where an agent of the government is given the power to determine which businesses recieve investments. I think modern Republicans are entirely too trusting of those given money and power.

Bluebird, thanks for that pointer. Very interesting reading.

thank u mr cohen. it is also my understanding bush’s wall street buddies contributed millions toward the inauguration celebrations. what a convenient way to be able to schmooze those on the fence on the ss issues. unlike political campaigns no finacial cap on what one can contribute for the inauguration celebrations.

http://www.democracynow.org/article.pl?sid=05/01/20/1522231

the system will return to surpluses after the baby boom retirees die off some 25 to 30 years after they retire.

David, that’s something that only rarely gets brought up in discussion about SS. It bears repeating.

The “crisis” - if it actually happens - will be temporary. The surplus was designed to get us through the baby-boom spike. By any but the most pessimistic economic projections, it probably will.

The crisis will be temporary as the baby boom passes. Yes. It is like telling someone not to worry because he will only be underwater for a couple hours. After that, he can breath all he wants.

The baby boom is generations lasted from 1945 to 1960, roughly, a period of fifteen years. The first baby boomers are beginning their early retirement now. The big crush will begin in about five years. If they live as long as we think they will, they will be in retirement for about 25 years each. So in starting in about 2025 and we will start supporting almost all of them (us). Meanwhile members of subsequent generations are still going to be jumping onto this overcrowded train. So even in the best-case scenario, we are looking at about 40 years of demographic crisis. This is a long time to wait.

And it gets worse.

The generation just before the baby boom was the very small depression and war era generation, so it was (AND IS TODAY) the easiest part of the system to handle. The whole SS system was based on a growing population. If the population stabilizes or grows slowly, we still face a problem made worse by people living off SS for more and more years. If the life expectancy continues to rise, we could well see the situation where the AVERAGE person is retired longer than he worked. This is unsustainable even after the bulge has passed through the python.

A stabile population cannot support such as large non-working group. And the non-working time has increased dramatically.

Take an “average” American life back in 1933 (the birth of SS) and 2033. In 1933 most people were dependent until they were about 16, when they went to work. They worked until 65, when most died within a year. So they had a working life of 49 years minus a dependent life of 17. They worked about 32 years net. A person is dependent until about 20, when he usually starts working part time and is still going to college or tech school. He works until he is 65 and retires. Currently he lives until around 78, but that increases each year so we can realistically figure that a man or woman will live to about 95 by 2050. So working life = 45. Dependent life = 30+20. Working life ? dependent life = negative 5. How can a system designed to work with the first reality work for the second.

It can’t. There is a bona fide crisis. You can argue about our response, but you can’t deny the crisis. President Clinton saw it in 1998. President Bush sees it now. It is coming.

Good point, David re: why aren’t the intellectuals in the Democratic Party out busting the rhetoric and taking the reality of the situation to the American people.
I think the Republicans love to look at SS as one of the “untouchables” of the welfare state. (Their term, not mine). And if they can break it, or even revise it, then no social programs are safe. Consider the fact that no one from the Administration is talking about the much bigger and more immediate fiscal crisis in Medicare/Medicaid.

Jack:
So you simply have chosen to ignore the presence of the surplus, or trust fund, which now holds more than 1.5 trillion dollars.

Social security is supported by a dedicated tax, like highway maintenance. In the 80’s, this tax was increased to avert a crisis. By law, Social Security has a budget that is independent of the rest of the U.S. government. The bonds in the trust fund have the same status as U.S. bonds owned by foreign pension funds and foreign governments. The general fund is legally obliged to pay the interest and principal on those bonds.

According to Paul Krugman:

“There are only two things that could endanger Social Security’s ability to pay benefits before the trust fund runs out. One would be a fiscal crisis that led the United States to default on all its debts. The other would be legislation specifically repudiating the general fund’s debts to retirees. That is, we can’t have a Social Security crisis without a general fiscal crisis, unless Congress declares that debts to foreign bondholders must be honored, but that promises to older Americans, who have spent most of their working lives paying extra payroll taxes to build up the trust fund, don’t count.”

Barring such a fiscal crisis, the only way they’re going to get their paws on that money and cut future benefits, is by unrelentingly beating Americans over the head with this crisis mumbo jumbo (a tactic the administration has admittedly perfected). If there is anything approaching a fiscal crisis in the future, you can bet it’s due to things like Bush’s tax cuts, the war in Iraq, and any upcoming adventures abroad.

Jack: “we can realistically figure that a man or woman will live to about 95 by 2050…”

Perhaps, using stem cell methods developed in North Korea, this will happen for all of us. I doubt it - life expectancies improvements have flattened out over the last few decades. If we all live to 1f we use 100 we probably can’t all retire comfortably at 65 - no matter how the system is financed.

But, Jack, even with a completely static or shrinking population or economy, a pay-as-you-go is still feasible and sustainable. It just depends maintaining the parameters so that the money in is the same as the money out.

Ingrid

There is no trust fund. The government cannot save money. Paul Krugman knows that and is being facile with his argument. Sure, the government CAN pay to the old people of 2050, but to do that it will have to tax the young people of 2050 at such high levels many will be driven into poverty. If I am still alive in 2050, I don’t think it is right for my children and grandchildren to diminish their standard of living to keep me in the style to which I have become accustomed. So what is Krugman saying?

We avoid fixing the problem today and make our children and grandchildren pay much higher taxes to keep us comfortable. That is what you want?

Even if a trust fund was theoretically possible, there is no trust fund today because our governments, Democratic and Republican have spent it leaving only IOUs. The government borrowed the money and it will have to pay it back and the only way the government can pay money is to tax.

William

Yes, pay as you go is feasible DEPENDING ON THE PARAMETERS. You can charge much higher taxes. You can raise the retirement age. You can lower benefits. You can allow for individual savings accounts. All of these things are the parameters. The parameter you can’t have it keeping SS taxes at the current levels and the current payouts adjusted as they are with no reforms. With that parameter the system runs out of money.

I exaggerated only a little extrapolating to 95. If we extend current trends, we can expect 89 or 90. American life expectancy has risen about 2 years per decade since 1950 and shows no sign of slowing. Stem cells are only one form of research. Genetic research in general is showing the promise to help people live longer and healthier lives.

I think my figures are reasonable, give or take a little. Add to that the fact that more people are retiring early, at 62. No matter how we look at it, we have a demographic problem coming very rapidly.

The problem is not fiscal - it is demographic. We can tax our children to pay for our retirement. We just shoudn’t.

Jack said: “The crisis will be temporary as the baby boom passes. Yes. It is like telling someone not to worry because he will only be underwater for a couple hours. After that, he can breath all he wants.”

Jack, the national debt is 7.4 trillion dollars. You don’t seem to be yelling crisis today.

All that happens during baby boom retirement years is the government deficit spends to pay retiree’s benefits - that is if other revenues are not raised. So, why is it not a crisis now or over the last 4 years when the national debt went from 5 trillion to 7.5 trillion, but, deficit spending to keep America’s elderly out of poverty all of a sudden becomes a crisis.

C’mon, let’s be consistent. Republicans are fond of saying deficits don’t matter. If that is true, then there is no SS crisis coming in 35 or 40 years. If on the other hand, deficit spending with this size national debt is a crisis, then, we should be attending it NOW. Not diverting attention to some crisis that is decades off.

Let’s face it, if we pay down the national debt before 2042, we can easily afford to deficit spend through the baby boom retirement years with very minor adjustments I have discussed previously. There is a whole lot of smoke and mirrors and misrepresentation going on with this SS reform. We need to stay clear headed. If SS will be in crisis, then by the same definition, our economy is in crisis now, and the focus should be on generating revenue surpluses, not cutting the deficit in half by 2009.

It’s quite ironic William, that we can now use the substantive opinion of a Conservative against Bush’s Social Security plan, whereas we hear nothing more than Bill Clinton using the word ‘crisis’, in response. I also find it interesting that the last member of the WB Red Column willing to defend Iraq, is now doing double duty on this fledgling debate for the Right.

With one of Bush’s PR money men Progress For America attacking the AARP, and a Congressional Republican predicting Bush’s plan D.O.A., the Right’s weak defense is obvious. It seems when one of Bush’s mandate driven, bold initiatives hits Americans in the pocket book, they wanna see the fine print first.

I certainly hope the White House is not deterred by such naysayers, proving Bush serious when he said the accountability moment has passed.

David et al

To restate one more time, my problem with SS is not fiscal; it is demographic.

Social Security has not caught up with demographics and lifestyles. When Social Security was created, life expectancy was 61.7 years. The 65-year retirement age was 3.3 years older than the average life expectancy. Life expectancy today is 77.2. If we wanted a similar retirement age it would be 80.

If old people live healthy lives into their 80s, which is becoming more common, why should the rest of society subsidize their leisure?

It is nice to give people a gift and many people would quit their jobs tomorrow if they had the money. Unfortunately, we society cannot afford to give that gift to large numbers of people. Just because a person manages to be 65, American and alive all at the same time doesn’t mean he deserves the support of U.S. taxpayers. I will be one of those people during the time of crisis. My children and grandchildren will be taxpayers. I don’t want to take their money until I can’t reasonably work anymore and I don’t want their money to support some old guys playing golf in Arizona. We should all pull our own weight to the extent we can.

The difference between the deficit now (which is troubling) and the deficit used to pay excess Social Security is the entitlement part. We would devote an even bigger part of our budget to a program over which we have no direct control and whose growth is mandated by law. Believing we could handle it is overly optimistic. We would have to assume that our Federal government will be able to balance its budget for a period of about 25 years and even with the balanced budget, it will continue to run real deficits because of Social Security. This will push the government’s take of the economy very high, which will stifle growth and leave the government unable to respond to any crisis.

We don’t have to speculate as to the results. You can look at a place like Germany. Its tax rates and dependency rates are similar to what we could expect ten years from now. Unemployment there hovers around 10% and economic growth is only about half the U.S. rate. That is what the U.S. can expect at first. It gets worse after that.

Re Iraq

Bert, I expect you are talking about me when you say the last guy to defend Iraq. If I knew then, what I know now, I would do things differently. I am sure President Bush would also if he had the benefit of perfect foreknowledge. But at the time, the decision seemed good. Beyond that, I believe that when we look back on this period ten years from now, we will call the Iraq policy a success, while criticizing the details. In fact, it will be such a success that nobody will admit they didn’t predict the result. I remember supporting Ronald Reagan in 1984, when all the liberal world believed he would start World War III. They were wrong then too.

Twenty quick facts from the CATO Institute concerning Social Security.

1. Social Security will begin running a deficit by 2018.

Source: 2004 Social Security Board of Trustees Report
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2. The average worker can expect a rate of return of less than 2 percent on his or her Social Security taxes.

Source: Social Security Administration
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3. The Social Security payroll tax rate has grown from just 2 percent in 1949 to 12.4 percent today.

Source: Social Security Administration
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4. Social Security faces an unfunded liability of more than $26 trillion over the next 75 years.

Source: 2004 Social Security Board of Trustees Report
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5. “Saving” Social Security without individual accounts could require a 50 percent increase in Social Security taxes or a 27 percent cut in benefits.

Source: 2004 Social Security Board of Trustees Report
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6. The Supreme Court ruled in Flemming v.Nestor that there is no legal right to Social Security benefits.

Source: Flemming v. Nestor, 363 U.S. 603, 610–11 (1960)
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7. Social Security taxes have been raised more than 40 times since the program began.

Source: Social Security Administration
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8. The maximum original Social Security tax was just $60. Today it is more than $11,000.

Source: Social Security Administration
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9. In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.

Source: 2004 Social Security Board of Trustees Report
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10. Forty-six million Americans receive Social Security benefits, including 32 million retirees, 7 million survivors, and 7 million disabled workers.

Source: 2004 Social Security Board of Trustees Report
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11. Social Security pays more than $450 billion in benefits each year. If nothing is done, by 2060, the combination of Social Security and Medicare will account for more than 71 percent of the federal budget.

Source: Statement of Thomas R. Saving, Public Trustee of the Social Security Board of Trustees before the Senate Special Committee on Aging, July 29, 2003
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12. Eighteen-to-34 year olds are more likely to believe in the existence of UFOs than in the future existence of Social Security.

Source: “Social Security: The Credibility Gap,” Third Millennium survey, conducted September 1994
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13. According to a Zogby International poll conducted for the Cato Institute, 68 percent of voters support individual accounts.

Source: The Cato Institute
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14. Nearly 80 percent of Americans pay more in Social Security taxes than they do in federal income tax.

Source: US Congress, Joint Economic Committee
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15. Every two-year election cycle that we wait to reform Social Security costs an additional $320 billion.

Source: Estimate by the Cato Institute
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16. The full retirement age today is 65 years and four months. It rises by two months every year, gradually increasing to age 67 for people born after 1959.

Source: Social Security Administration
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17. By 2030, there will be 70 million Americans of retirement age—twice as many as there are today.

Source: Social Security Administration
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18. The average monthly retirement benefit in 2003 was $879.70.

Source: Social Security Administration
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19. In every congressional election where Social Security reform was a major issue in 2002, the candidate favoring individual accounts won.

Source: Cato Institute
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20. Despite Social Security, one out of eight seniors still lives in poverty.

Source: House Committee on Ways and Means
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President Bush is not the only one to suggest partial privatizing of SS.

In the Senate, Democratic Senator Bob Kerry of Nebraska and Republican Judd Gregg of New Hampshire introduced legislation to allow workers to invest two percent of their payroll taxes in privately controlled investment plans. Other key Democrats supporting this legislation are Daniel Patrick Moynihan of New York, John Breaux of Louisiana and Chuck Robb of Virginia.

May 19, 2000, Project 21
Clinton also had a plan to invest SS funds in the Stock Market

The President’s proposal, while not yet fully detailed, is composed of two parts. First, the President proposes transferring 62 percent of projected budget surpluses over the next 15 years to the Social Security system. A portion of those assets (less than one-fourth of the transferred surpluses) would be invested directly in the stock market. According to the President, this funding would keep Social Security solvent through the year 2055. Additional reform would be needed to assure solvency through 2075.

January 26, 1999 Investment Company Institute

Fed Chairman Alan Greenspan warned “a financial shock wave spawned by millions of retiring baby boomers threatens to turn America’s social democracy upside down and create a society where fewer workers labor under a heavy tax burden to finance retirement programs for millions of elderly baby boomers.”

Paul Hodge, Director, Harvard Generations Policy Program chaired the 2005 White House Conference on Aging Policy Committee Hearing October 1, 2004. Their report entitled “Living Younger Longer: Baby Boomer Challenges” is available at the following link. This report supports much of what Jack states above concerning a Demographic Crisis.

http://www.genpolicy.com/

If I knew then, what I know now, I would do things differently. I am sure President Bush would also if he had the benefit of perfect foreknowledge.

No. He said he wouldn’t do anything differently… Unless you think he was lying.

Technical Panel to advise the SS Admin. had this to say about what is required to maintain SS for the INFINITE future:

Social Security Deficit and Payroll Taxes

The percent of taxable payroll is the portion of an employee’s payroll tax that goes toward Social Security and is currently set at the rate of 12.4 percent, half of which is paid by the employer and the other half by employee. Over 75 years, the Trustees estimate the actuarial deficit is 1.8 percent of taxable payroll. This means that for the system to be completely solvent over the next 75 years, without adjusting benefits, payroll taxes would have to go up to 14.2 percent immediately. And to be solvent for the “infinite future,” the $10.4 trillion shortfall equals 3.5 percent of taxable payroll, or a tax increase to15.9 percent of wages.

The Trustees state to get over the baby boom hump, payroll taxes would only have to increase 1.8% total, meaning only 9/10’s of one percenct from worker’s wages, with a matching 9/10’s of one percent by employers.

And to sustain it infinitely, 3.5% total increase in payroll taxes, or 1.75 percent increase in worker’s deductions and 1.75% in employer deductions.

These increases could be dramatically reduced or eliminated by means testing benefits and eliminating the $87,600 income ceiling from which deductions are taken.

This is not a crisis by any means, and the factual numbers by actuarials demonstrate, very small changes today, save SS and its insurance against poverty provisions indefinitely.

David, I saw that over at factcheck.org. It’s interesting that President Bush uses the 11 trillion dollar “infinite” solvency number, rather than the $3 trillion 75-year solvency number.

Hmm… $3 trillion. Isn’t that what Bush’s tax cuts that disproportionately favor the wealthy cost? I wonder how many decades of SS solvency could be had by rolling back the tax cut on the top 1%.

David,

without adjusting benefits, payroll taxes would have to go up to 14.2 percent immediately. And to be solvent for the “infinite future,” the $10.4 trillion shortfall equals 3.5 percent of taxable payroll, or a tax increase to 15.9 percent of wages.

Please read the points from above.

3. The Social Security payroll tax rate has grown from just 2 percent in 1949 to 12.4 percent today.
Source: Social Security Administration

Now you want to increase it to 15.9%. Where is the ceiling when the left finally thinks we are too heavily taxed?

7. Social Security taxes have been raised more than 40 times since the program began.
Source: Social Security Administration

More than 40 times in roughly 70 years. How long do you think it would take for the next increase to say 17% or 18%.

8. The maximum original Social Security tax was just $60. Today it is more than $11,000.
Source: Social Security Administration

Now you want to increase that to nearly $14,000 based on today’s $87,600 earnings ceiling which by law increases each year.

14. Nearly 80 percent of Americans pay more in Social Security taxes than they do in federal income tax.
Source: US Congress, Joint Economic Committee

Where does it end? Again when is enough enough? I do not recall the exact date but the average American now works something like 6 months to pay taxes and 6 months for themselves. Do we need to go to a 7 : 4 ratio? I can tell you the government dole is looking better all the time. Why should I work more than half the year to pay taxes when I could set on my butt and draw a check tax-free?

2. The average worker can expect a rate of return of less than 2 percent on his or her Social Security taxes.
Source: Social Security Administration

I can almost get a return like that from a passbook savings account not to mention a moneymarket or CD’s. It is ridiculous for us not to move to a system that would generate increased income from the same current tax structure.

To deny the facts is ludicrous. Even Bill Clinton, Bob Kerry, Chuck Robb, and Patrick Moynihan saw the positives of investing SS moneys in the market. None of which you could say were Bush supporters or conservatives.

Why the left continues to believe that the government knows best what to do with our money is beyond me. The only reason that I can come up with is that the left needs to keep people as totally dependent on government as possible to try and maintain their base of support. Once people start to gain independence from the government and accumulate wealth their need for libs decreases. The only other reasin would be that the libs think it is their money not mine.

Kirk, I notice that one of the “facts” missing is that the baby-boom spike is temporary.

kirk -
why is it that whenever a conservative is questioned in their arguments they resort to the old standby of painting liberals as simply wanting to take everyones money and sit and their butts collecting checks, yada yada yada…?
I pride myself on self-reliance. I worked my ass of in college and graduate school and I expected no help other than some student loans, which I will be be paying off for many years.
(Or should only the wealthy have access to higher education?)
I work hard for my money and I make more than the national average. Between my wife and I, we make six figures a year. Our taxes are not astronomical and I don’t expect that they will ever grow to a degree that is unmanageable. And if they should go up 2-3%, I can adjust to that.
Unlike many conservatives, most liberals see our society as a whole and not a loose collection of myriad groups. We have certain duties that are required by society. And some of us would argue that those duties extend to how we deal with and support the impoverished and elderly. And despite what most of the right-wing believes, the Government can do some things that the private sector cannot, even if only because there constiuency is the entire population of the country.
I have no problem with the fact that my Mother, who lives on a small pension and Social Security, is supported by the taxes that I (and others) have paid. I have no problem knowing that a widow in Nebraska doesn’t have to make a choice between paying her heating bill or buying food because people who have never met her have paid into a system which gives her a little bit of help.
People who retire early (as you state some people retire at 62), usually do so because they are either wealthy enough to live without working or are retiring on a full (or nearly full pension). To imply that someone would retire at 62 just to live off their Social Security cghecks is disingenious.
Raising the cap on SS wages from the current $87,000/year would go a long way toward easing the burden on SS.
And Social Security will begin to run a deficit in 2018 as the CATO material states. At that point, it begins to pull from the trust fund and if you (as Jack) believe that there is no trust fund and that there are simply a bunch of worhtless IOU’s, then you shouldn’t be putting any money into Government Bonds or even the Stock Market, becasue when the rest of the world finds out that the U.S. isn’t going to pay it’s legal contracted debts, then the entire economy is going to go down the toilet so fast that no one will even be able to draw a breath before going under.
Also, most of the material you present comes from CATO (which is very conservative) and the SS Administration or those arguing for privitization.I don’t see many quotes from groups that are independent of the argument or even the OMB, which has quite different figures.
Many people, including prominent Democrats, have argued for privitization. Clinton was wrong, as were Moynihan and others. Labeling it a “crisis” does nothing but scare people into making bad decisions. A much bigger issue, I maintain, is the skyrocketing cost of Medicare/Medicaid, which at it’s current rate of growth will be a much greater threat to the economy.
But, oh wait…perhaps you believe that people who can’t afford health coverage should simply perish and “therefore decrease the surplus population.”
Ahhh…I ramble, but you guys really get me sometimes…

b coffey,

why is it that whenever a conservative is questioned in their arguments they resort to the old standby of painting liberals as simply wanting to take everyones money and sit and their butts collecting checks, yada yada yada…?

Please show me where I paint liberals? If you will read my post, I said that the government dole is looking getter all the time. No where did I accuse anyone of sitting on their butt collecting a check.

And please also show me where I said anything about only the wealthy having access to higher education?

So, I guess I could ask the question why it is whenever a liberal is questioned in their arguments and shown facts that dispel that argument they resort to the old standby of distorting what was said and trying to divert the argument somewhere else usually with an emotional spin?

Our taxes are not astronomical and I don’t expect that they will ever grow to a degree that is unmanageable. And if they should go up 2-3%, I can adjust to that.

“Despite the dramatically lower tax burden in 2004, Americans will still spend more on taxes than they spend on food, clothing and medical care combined,” said Hodge.

If you do not think that working 101 days to pay your taxes is to high or paying more in taxes than you do for food, clothing and medical care combined is too much there is not much I can say to you. I on the other hand feel that nearly 40% of everything I earn going to taxes is outrageous.

We have certain duties that are required by society. And some of us would argue that those duties extend to how we deal with and support the impoverished and elderly.

I could not agree more. Nowhere have I said that our obligations to retired or impoverished should be reduced. What I have said is that It is ridiculous for us not to move to a system that would generate increased income from the same current tax structure. Individual Accounts using 2% of a workers 12.4% FICA Tax would do exactly that.

People who retire early (as you state some people retire at 62)

I do not believe that I said anything about people retiring early!

Raising the cap on SS wages from the current $87,000/year would go a long way toward easing the burden on SS.

Please see my post above. I make note of the fact that the cap on SS wages does increase each year by law. The reference to increasing our FICA Tax to nearly $14,000 per year was based on a projected increase to 15.9% at the current $87,600 per year cap. Of course that $14,000 would increase next year and the year after and the year after etc.

Many people, including prominent Democrats, have argued for privitization. Clinton was wrong, as were Moynihan and others

I must say that I disagree with you on this. This is one of the few areas where Clinton was right.

But, oh wait…perhaps you believe that people who can’t afford health coverage should simply perish and “therefore decrease the surplus population.”

Once again resorting to the old standby of distorting what was said and trying to divert the argument somewhere else with an emotional spin?

kirk -
I probably got a bit emotional and mixed several arguments that both you and jack had stated into one long email. Why?

Because everything I hear from the other side paints liberals/progressives as weak on defense, bleeding hearts, namby-pamby, just as I’m sure conservatives are tired of being painted as heartless warmongers. SO I let off some steam and you just happened to be the target.

The retirement at age 62 was from one of Jack’s posts.

If you pay 40% of your income in taxes, then you’re just doing something stupid financially. I’ve never paid more than 28-30% in my life. Last year was the first year I actually owed the government any money and it wasn’t that much. And my wife and I don’t have childran, so we don’t even get those offsets.

However you want to paint it, there is no IMMEDIATE crisis in SS and I still don’t see anyone addressing the much larger problem of medicare/medicaid.

Oh…and I don’t think I was distorting what you were saying anymore than than anyone else ofn this board or in public distorts their opponents arguments.

I don’t know if you’ve ever had to rely on SS, but after my father died, my SS benefit checks are what kept our family fed and clothed and paid the mortgage. That being said, I’m a fan of the system, even though it may not be ideal. But the proposal Bush is putting forward will require trillions in loans to cover th shortfall. And who gets stuck with paying off those loans?

There are much bigger fiscal issues facing this country than Social Security. Trade deficits, outsourcing, health costs (which tort reform will do little to alleviate) and a budget deficit that continues to climb (though it seems smaller since we’re no longer allowed to include war costs or the SS borrowing into the figures).

And the sad thing is nothing you or I can say is going to convince the other that they might be right or wrong.

b coffey,

The 40% of income I reference is not only income tax, but also include FICA Tax, Property Tax, School Tax etc.

You are correct that we only pay 28% - 30% in income tax but to ignore the other taxes when discussing the total tax burden is simply wrong.

No, I have not had to rely on SS thank God. However, taking a voluntary 2% of a workers earnings or roughly 16% of the current FICA Tax and placing them in Individual Accounts will greatly increase the earnings on these taxes. The balance of the FICA Tax collected would remain to support the insurance aspect of SS.

FICA tax is a combination of a 6.2% social security tax and a 1.45% Medicare tax. The social security tax is assessed on wages up to $87,900; the Medicare tax is assessed on all wages. Employers and employees are both liable for FICA taxes at the rates given below.

Self-employed individuals pay a self-employment tax which is the equivalent of FICA tax. For 2004, they will pay a 12.4% OASDI tax (the old age, survivors, and disability insurance tax) on the first $87,900 of self-employment income. A 2.9% Medicare tax is imposed on all net self-employment income. Fifty percent of the self-employment tax paid is deductible.

The earnings limit for retirees under age 65 is $11,640. Social security benefits will be reduced $1 for every $2 of earnings above this limit. There is no earnings limit for individuals aged 65 and above.

So based on the above the actual impact of the voluntary transfer of 2% of the FICA Tax to privately managed accounts at the most impacts the overall FICA Tax collection 16.129% Once again that is if every worker who pays FICA Taxes opts to participate in the privately directed savings accounts. Every worker opting to participate is highly unlikely considering the rate at which 401K eligible workers currently participate.

Fidelity Investments last month reported that its annual “Building Futures” study shows the percentage of eligible workers participating in 401(k) plans dropped two points from 2002 to 2003 and now stands at 66%. About 25% of 401(k) plans reported that participants contributed an average of 4% of their salary or less, according to a recent study by Mercer Investment Consulting.

Once again if all FICA Tax payers participated the remaining 83.871% of the current FICA Taxes collected would still be there to fund the old age and insurance portions of SS.

If for instance the rate of participation mirrored the 401K rate of 66% only 10.6% of current FICA Taxes would go into these accounts. Leaving 89.4% of the currently paid FICA Taxes to support the SS program.

The positive would be that the Individual Accounts would generate much higher rates of return than the US Treasury Notes that currently make up the “Trust Fund”. With higher returns going to the workers who participate the payout to those workers from the SS system would be reduced leaving more capital to pay SS obligations.

kirk -

I was including ALL taxes, including my local city and state and FICA…I still don’t pay anywhere close to 40%.

…plus, I don’t pay property or school taxes and those are a seperate, local issue…I also live in New York City, so I pay both higher City and State tax than most of the country…

bcoffey,

Take a look at the table on the link below.

http://www.taxfoundation.org/newyork/statelocal-ny.html

You will see that prior to the Bush tax cuts the average New Yorker did indeed approach 40% tax rate. While yo are correct that they did not reach the actual 40% level they were close. Also if you read the information on the site discussing how the figures are calculated they say that they use only figures that are actually designated as “taxes” while there are many hidden taxes that are difficult to calculate.

kirk -
I don’t need to look at tax tables when I know how much I pay in taxes…The Bush tax cuts have done nothing for me…And I have AGAIN, never paid anything close to 40%.
Even my wife, who is Canadian, didn’t pay 40% when she lived there.
The Tax Foundation can float all the figures they want, I’ll stick to my tax returns, pay stubs and receipts.

kirk -

for another view: from the Center for Economic and Policy Research.
http://www.cepr.net/columns/weisbrot/mark_weisbrot_1_18_05.htm

I guess you can lead a horse to water but, you can’t make him drink.

Maybe not, but you guys want to shoot the horse…You’re just wrong…get over it…If you’ve studied statistics at all, you should know that you can make numbers dance around like angels on the head of a pin…

Statistics don’t lie. Those who interpret them do. Statistics measure correlation between two or more variables. And it does this with proper rigorous mathematical rules and procedures. Statistics which are valid and reliable which indicate a very high correlation between two variables is not lying about the correlation. The correlation exists and is predictable.

What statistics does not and cannot measure is cause and effect. That is where politicians (and others) come in to project unscientific cause and effect into those statistics.

Let’s take a concrete example from one of my own statistical research projects - The effects of smoking and drinking on subject’s life span projections.:

I administered a questionnaire to the student body of a junior college in San Antonio. In it students were asked if they smoked regularly, if they drank alcohol on a weekly or monthly basis, and they were asked to estimate how long they would live.

Those who smoked and those who drank expected to live on average 4.5 years longer than those who neither smoked or drank. And those who both smoked and drank, expected to live about 7 years longer than those who neither smoked or drank. The non-smokers and non-drinkers estimates of how long they would live were much more in line with real Cenusus Bureau measures of average expected lifespan.

OK. In come the politicians who argue A: those who smoke and drink have lesser mental capacity than those who don’t drink or smoke which is why they smoke and drink and society should help these mentally deficient folks. Or, B: Those who don’t smoke or drink are less daring and have little imagination which is why they are far more realistic conforming their lifespan expectancy to the status quo established by the Census Bureau.

Of course there is no evidence whatsoever for Conclusions A or B in the statistical study. Statistics cannot measure cause and effect. Statistics can only measure the probability factor that if X happens Y is this likely or unlikely to happen.

So NO! Statistics cannot be made to lie. Statistical measures are either conducted correctly or not, and given the cost of statistics, it really doesn’t pay for a company hoping to bring home the bacon based on their statistical measures to conduct those measures poorly. Occasionally poor statistical design does occur which results in non-replicable results, but, statisticians have no vested interest in poor design by purpose and work very hard to insure that poor design is avoided.

Politicians, pundits, and ignorant folks are responsible for using reputable statistics as a basis for their arguments which usually have little bearing on what the statistics actually had to say.