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Thread: Social Security not as broke as we thought

  1. #31
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    Re: Social Security not as broke as we thought

    No. Allow me to expand a bit ......what I am saying is for the duly elected government to exercise one of the powers given to them by the US Constitution and levy taxes to save a program that is wildly popular with the people it represents. Sounds radical and dangerous, huh?

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    Re: Social Security not as broke as we thought

    Quote Originally Posted by washunut View Post
    This is probably the easiest of the long term problems the federal government has to fix. We have had this type of problem before, revised the formula and the system got healthier again.

    Fixing the problem, either by adjusting FICA or the age of retirement should be considered no different than an insurance company making changes due to an actuarial change.

    The government will also have to be smarter in how it collects FICA. For example how they track incomes of people who sell on ebay etc. Are those people paying the FICA on all of their earnings, probably not.
    It's not actually that simple, for the reason I mentioned above. Increasing FICA increases future liabilities as well. Increasing the retirement age helps to a degree, but you'd have to adjust the underlying formulas in that case as well.

    Quote Originally Posted by haymarket View Post
    from RightinNYC

    Yes, if we also allowed the level of benefits to rise in direct proportion to the amount paid in. However, that is not what I and many other advocate. I favor removing the cap on income levels for FICA taxes but freezing the benefit levels to the maximum paid today plus a modest inflation adjustment as needed in years to come.
    As you note, what you're proposing is a fundamental change to the entire character of the SS program that would make it just another income transfer system. I mean, that's fine, but it's not SS. You could also fix the problem by just instituting welfare for poor/middle class old people funded from general revenues, but I wouldn't really call that "fixing SS" either.
    Last edited by RightinNYC; 10-30-10 at 05:49 PM.
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    Re: Social Security not as broke as we thought

    Quote Originally Posted by haymarket View Post
    simple math
    pop the $106K cap on taxable income for FICA contributions
    problem is solved
    sadly it is not. you still have to dramatically reduce payments, especially when you score the effects of that cap removal dynamically.

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    Re: Social Security not as broke as we thought

    Quote Originally Posted by ptif219 View Post
    It is the government. Where will they get the money to pay the securities?
    printing presses.

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    Re: Social Security not as broke as we thought

    RightinNYC

    I have noticed that those on the right who oppose SS take two stances that they attempt to keep independent of each other.

    The first is that the numbers indicate that SS cannot be sustained because the money going out is much more (or will be much more) than the money going in. So if we do nothing to correct this the program will collapse.

    Then they also maintain that we cannot freeze benefits which increasing the level of contributions beyond the current $106K per year because in your words

    what you're proposing is a fundamental change to the entire character of the SS program that would make it just another income transfer system. I mean, that's fine, but it's not SS.
    Lets be real here. Do right wingers opposed to SS really a rats behind about preserving the historical purpose and structure of the program? C'mon now - admit it. You all could not care less about that. You only bring it up when the pop the cap and freeze the benefits solution is brought up.

    Did you ever see the comedian Kevin Meaney do his "I don't care" routine? He takes some issue of the day and the normal response to it and then prances around singing "I don't care, I don't care, I don't care" over and over again. It is funny and it makes a point.

    And that is mine regarding your objection to changing the nature of the program.

    p.s. And as long as we save it I really do not care what you call it. If Wealth Redistribution floats your boat - thats fine with me. If you feel Satanic Socialistic Stealing from the Rich makes it for you - I will salute that one also. And if you want to rename it in honor of Karl Marx or even Groucho Marx - you have my seal of approval. As long as the program is saved. I think W. Shakespeare said something about a rose that would apply here.

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    Re: Social Security not as broke as we thought

    Quote Originally Posted by haymarket View Post
    RightinNYC

    I have noticed that those on the right who oppose SS take two stances that they attempt to keep independent of each other.

    The first is that the numbers indicate that SS cannot be sustained because the money going out is much more (or will be much more) than the money going in. So if we do nothing to correct this the program will collapse.
    Correct.

    Then they also maintain that we cannot freeze benefits which increasing the level of contributions beyond the current $106K per year because in your words

    Lets be real here. Do right wingers opposed to SS really a rats behind about preserving the historical purpose and structure of the program? C'mon now - admit it. You all could not care less about that. You only bring it up when the pop the cap and freeze the benefits solution is brought up.
    I don't think you're understanding my point. I'm not saying that we shouldn't raise the cap but withhold the increase in benefits for rich people because of some need to keep the program historically true. I'm saying that if you do that, what makes SS different from any other welfare program? At least in its current form, there is some semblance of evenhandedness about it. I don't think we need to keep increasing the number of social programs paid for by high-earners.


    p.s. And as long as we save it I really do not care what you call it. If Wealth Redistribution floats your boat - thats fine with me. If you feel Satanic Socialistic Stealing from the Rich makes it for you - I will salute that one also. And if you want to rename it in honor of Karl Marx or even Groucho Marx - you have my seal of approval. As long as the program is saved. I think W. Shakespeare said something about a rose that would apply here.
    And I think the program is fiscally unsound and that your proposed 12.4% surtax on all income over $106k will do far more damage than it's worth.
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    Re: Social Security not as broke as we thought

    And I think the program is fiscally unsound and that your proposed 12.4% surtax on all income over $106k will do far more damage than it's worth.
    First, please demonstrate how increasing massive amounts of money into the system is fiscally unsound?

    Second, so it is acceptable and fair to place this tax on the total income of the lower 93 to 94% of income earners but it is not fair or acceptable to do so on the total income of those in the upper 6 or 7% because of some vague assertion that it will do more damage than its worth? How are you going to support that assertion? And worth to who exactly? Perhaps not that upper 6% but I suspect the lower 94% with an enriched SS program will feel the change is just wonderful and worth a great deal to them.

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    Re: Social Security not as broke as we thought

    Quote Originally Posted by haymarket View Post
    First, please demonstrate how increasing massive amounts of money into the system is fiscally unsound?
    Please reread what I said. The program is fiscally unsound because of its structure, not because increasing revenues would make it so.

    Second, so it is acceptable and fair to place this tax on the total income of the lower 93 to 94% of income earners but it is not fair or acceptable to do so on the total income of those in the upper 6 or 7% because of some vague assertion that it will do more damage than its worth? How are you going to support that assertion?
    When everyone pays that 12.4% tax on their first $106k in earnings, that money is credited toward their retirement. They will (theoretically) get back that money in an amount commensurate with what they put into the system. That makes the program less like a welfare system and more like a mandatory retirement program.

    If you stop correlating payments to future receipts, then you're just taxing high earners for the sake of everyone else. That's a very different type of program. Moreover, believe it or not, a 12.4% surtax on all income over $106k would have a pretty big impact on the economy. Congress is currently up in arms about the prospect of a 8% increase on income over $250k, so I'm not sure why you think your proposal has a chance in hell.


    And worth to who exactly? Perhaps not that upper 6% but I suspect the lower 94% with an enriched SS program will feel the change is just wonderful and worth a great deal to them.
    And I'm sure that most people would be happy if we murdered the 500 richest people and distributed their wealth to the rest of the country in the form of McRibs and lap dances. Doesn't mean it's a good idea.
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    Re: Social Security not as broke as we thought

    Quote Originally Posted by Hoplite View Post
    Social Security not as broke as we thought
    ...and Terri Schiavo wasn't as dead as people thought but that didn't stop her from being finished off. SS should be ended immediately.

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    Re: Social Security not as broke as we thought

    from RightinNYC

    The program is fiscally unsound because of its structure, not because increasing revenues would make it so.
    could you provide the numerical evidence of this statement please?

    When everyone pays that 12.4% tax on their first $106k in earnings, that money is credited toward their retirement. They will (theoretically) get back that money in an amount commensurate with what they put into the system. That makes the program less like a welfare system and more like a mandatory retirement program.

    If you stop correlating payments to future receipts, then you're just taxing high earners for the sake of everyone else. That's a very different type of program.
    Meaning no disrespect to you - I could not care less if that changes the nature of the program in some eyes. It is of no consequence to me. If it saves the program and makes it economically viable for decades to come, then it is fine with me and an excellent use of the governmental power to tax.

    And I'm sure that most people would be happy if we murdered the 500 richest people and distributed their wealth to the rest of the country in the form of McRibs and lap dances. Doesn't mean it's a good idea.
    Is someone actually proposing this or is these just over-the-top hyperbole?

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