View Poll Results: Your Identity and For/Against this SS Reform model

Voters
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  • Socialist and Against

    10 10.99%
  • Socialist and For

    1 1.10%
  • Democrat and Against

    21 23.08%
  • Democrat and For

    6 6.59%
  • Republican and Against

    2 2.20%
  • Republican and For

    22 24.18%
  • Libertarian and Against

    9 9.89%
  • Liberarian and For

    9 9.89%
  • I am for it, but with a particular modification (explain)

    11 12.09%
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Thread: Social Security Fix

  1. #271
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    Re: Social Security Fix

    Quote Originally Posted by Dittohead not! View Post
    So, if the government does declare bankruptcy, as has been suggested here, and doesn't pay back the money it has borrowed from SS, then the program is kaput, and people who have paid into it are just SOL. Nice. I really thought the government would be better than Enron. Wrong.
    the debt held by the SS Trust fund is internal debt; alterations to the program wouldn't involve bankruptcy. remember that SS isn't legally insurance, or a pension program; it's a tax. changing it is no different (legally) than changing out any other part of our tax code. the system as it exists is bankrupt. we can keep the current schedule for those who are 55 and older, but not for those below that age we need to alter the system. the point of this thread is, since we have to do so anyway; why don't we alter it in a way to make it better for low-income workers?

  2. #272
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    Re: Social Security Fix

    Quote Originally Posted by cpwill View Post
    the debt held by the SS Trust fund is internal debt; alterations to the program wouldn't involve bankruptcy. remember that SS isn't legally insurance, or a pension program; it's a tax. changing it is no different (legally) than changing out any other part of our tax code. the system as it exists is bankrupt. we can keep the current schedule for those who are 55 and older, but not for those below that age we need to alter the system. the point of this thread is, since we have to do so anyway; why don't we alter it in a way to make it better for low-income workers?
    Why not indeed.

    If it is, as you say, a tax and not a pension plan, then it is certainly a regressive tax. The lower wage earners pay more than the higher wage earners do. Further, you have a good point in calling it a tax, as a pension plan would have been placed in a trust fund and used only for pensions. That is what should have been done, of course, but that ship has sailed now.

    So, let's tax everyone for SS, as a start. Let's raise the age for retirement. Let's indeed allow younger workers to leave SS altogether and set up their own plan with that 16% that is being taxed, which is what you've suggested.

    Since it is a tax, then there is no need to balance that 16% of lower wage earners' income and the obligation to pay SS pensions to seniors. Therefore, the existing pensions could be paid out of that same general fund that has absorbed the excess from the SS tax all of these years. That way, the seniors could still get their SS, while the youth could be saving for a genuinely affluent retirement.

    Except, there is that balancing the budget idea.., oh never mind. The feds will never get serious about that anyway.
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  3. #273
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    Re: Social Security Fix

    Quote Originally Posted by cpwill View Post
    found someone who has run the figures. it turns out that even if you pop the cap and don't tie higher benefits to that extra income, it's still nowhere near enough.
    I read the entire article.

    I saw NOTHING in there which used numbers to demostrate your allegation - that if you pop the cap but freeze benefits, its still nowhere near enough. there is nothing in there except empty rhetoric arguing about the nature of the program and advising against its change.

    If I missed it, I would be glad to read it again if you can point this out to me in the article.

    this is the articles objection to popping the cap but freezing benefits at present levels

    . Once it is established that some Social Security taxes must be paid without any accompanying benefit credits, the program would lose its critical distinction from welfare.
    That is NOT a dollars and cents economic argument which shows the idea would not work . That is a philosophical argument. I do not care if you call it Social Security, welfare or a three legged cricket playing a harmonica. Just pop the cap, freezen benefits at presnet highs and get on with it already.
    Last edited by haymarket; 04-13-11 at 03:48 PM.
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  4. #274
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    Re: Social Security Fix

    Quote Originally Posted by Dittohead not! View Post
    Why not indeed.
    well apparently there is a solid constituency against it.

    If it is, as you say, a tax and not a pension plan, then it is certainly a regressive tax. The lower wage earners pay more than the higher wage earners do
    by the same measure, they get back later more than higher wage earners do. but yes, the payroll tax as it exists depresses employment and is the highest tax faced by the poorest of our workers.

    Further, you have a good point in calling it a tax, as a pension plan would have been placed in a trust fund and used only for pensions
    well, that's not what makes it a tax. the law makes it a tax. anything else would have been unconstitutional. even at the height of the New Deal, FDR knew it was unConstitutional to force Americans to purchase insurance.

    So, let's tax everyone for SS, as a start. Let's raise the age for retirement. Let's indeed allow younger workers to leave SS altogether and set up their own plan with that 16% that is being taxed, which is what you've suggested.
    i've suggested they take 10% of their income to do so; we still are going to need that 5% to retain solvency in the here and now.

    Since it is a tax, then there is no need to balance that 16% of lower wage earners' income and the obligation to pay SS pensions to seniors. Therefore, the existing pensions could be paid out of that same general fund that has absorbed the excess from the SS tax all of these years
    except that that General Fund is already running a $1.5 Trillion Deficit, and will be completely unable to absorb those extra costs.

    That way, the seniors could still get their SS, while the youth could be saving for a genuinely affluent retirement.
    that's what i'm trying to do here, yes.

  5. #275
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    Re: Social Security Fix

    Quote Originally Posted by haymarket View Post
    I read the entire article.

    I saw NOTHING in there which used numbers to demostrate your allegation - that if you pop the cap but freeze benefits, its still nowhere near enough. there is nothing in there except empty rhetoric arguing about the nature of the program and advising against its change.

    If I missed it, I would be glad to read it again if you can point this out to me in the article.
    Point #2: Even raising the cap by a lot would do very little to close financing shortfalls. To understand this, let’s first look at those shortfalls under current law.



    As shown above, after the 1983 reforms – Social Security ran substantial cash surpluses for several years. Last year in 2010, it began to run a cash deficit... The 1983 negotiators – again, not realizing that this pattern would emerge – failed to establish such a mechanism, allowing program surpluses to be spent.

    Since 1983, one bipartisan technical panel after another has come forward to urge that this mistake not be repeated. Such panels agreed that actuarial balance over long spans of time was a necessary but not sufficient standard for credible financing. And so for over a decade now, Social Security’s scorekeepers have routinely evaluated every reform proposal to determine not only whether it achieves a generic summarized actuarial balance over the long range, but also whether it ultimately eliminates shortfalls of annual tax income relative to annual expenditures. This is why the proposal of President Obama’s fiscal commission looks like this:



    As the graph above shows, Simpson-Bowles would not only eliminate Social Security’s aggregate shortfall averaged crudely over all time, but it would return the program to a position in which its annual income is sufficient to finance its annual outgo.

    Raising the cap on taxable wages, by contrast, would do little to establish practical financing. For example, consider the oft-floated proposal to raise the cap (to the equivalent of roughly $180,000) so that it covers 90% of all wages nationally. This would produce a flow of income and costs as in the graph below – reproduced exactly from the Social Security Chief Actuary’s web page:



    As is evident by looking at the above picture, this proposal would leave almost the entirety of current-law annual shortfalls in place – roughly 86% of them in the out-years.

    Even if the cap on taxable wages were entirely eliminated – that is, a new 12.4% payroll tax were applied on all wages from $106,800 to infinity – most of the annual shortfalls (62% of them over the long term) would still remain




    Finally, even if we took the most radical steps of all – both totally eliminating the cap and entirely severing the contribution-benefit link for all wages newly subject to tax – Social Security would still face substantial and rising shortfalls, as seen below.




    What’s interesting about the current Social Security debate has been how proponents of raising the cap have largely ignored these fiscal realities...

    That is NOT a dollars and cents economic argument
    neither were the responses from your side to the plan under discussion in the OP. because - dollars and cents wise - it is superior to Social Security as it currently exists, and that reality is painfully obvious.

  6. #276
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    Re: Social Security Fix

    That is one of the most convoluted so called arguments I have ever seen.

    This is not rocket science. Pop the cap bringing trillions into the system over the next seventy years and freeze benefits at the current levels.

    Nothing in all that malarkey says otherwise.
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  7. #277
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    Re: Social Security Fix

    Quote Originally Posted by cpwill View Post
    well apparently there is a solid constituency against it.



    by the same measure, they get back later more than higher wage earners do. but yes, the payroll tax as it exists depresses employment and is the highest tax faced by the poorest of our workers.



    well, that's not what makes it a tax. the law makes it a tax. anything else would have been unconstitutional. even at the height of the New Deal, FDR knew it was unConstitutional to force Americans to purchase insurance.



    i've suggested they take 10% of their income to do so; we still are going to need that 5% to retain solvency in the here and now.



    except that that General Fund is already running a $1.5 Trillion Deficit, and will be completely unable to absorb those extra costs.



    that's what i'm trying to do here, yes.
    That's the flaw in the privatization plan. The time to start allowing younger workers to start putting a portion of their SS dollars into an IRA, or similar plan, would have been when SS was generating more money than it cost. For some reason or other, no one suggested such a thing at that time. It could be that no one was willing to kill the cash cow. Now that the cash flow is the other way, the federal government can't afford it. Like lots of good ideas, it has to be paid for. The federal government seems to have forgotten that, but it still holds true.
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  8. #278
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    Re: Social Security Fix

    Quote Originally Posted by Dittohead not! View Post
    That's the flaw in the privatization plan. The time to start allowing younger workers to start putting a portion of their SS dollars into an IRA, or similar plan, would have been when SS was generating more money than it cost. For some reason or other, no one suggested such a thing at that time. It could be that no one was willing to kill the cash cow. Now that the cash flow is the other way, the federal government can't afford it. Like lots of good ideas, it has to be paid for. The federal government seems to have forgotten that, but it still holds true.
    i thinkby popping the cap while incentivizing the wealthy to pay, slowly raising the retirement age, tying the growth in benefits to inflation, and keeping a portion of those younger workers FICA taxes flowing in, we could avoid having to make demands of the size under discussion of the General Fund. recall that the workers most likely to jump ship will be younger, and therefore represent smaller incomes on which the system depends less.

  9. #279
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    Re: Social Security Fix

    Quote Originally Posted by haymarket View Post
    That is one of the most convoluted so called arguments I have ever seen.

    This is not rocket science. Pop the cap bringing trillions into the system over the next seventy years and freeze benefits at the current levels.

    Nothing in all that malarkey says otherwise.
    popping the cap is unlikely to bring those trillions unless you find a way to incentivize those making the higher incomes to pay it (as my plan does). otherwise you're just providing them incentive to pursue tax-avoidance measures by altering how they recieve income. as for the "freeze"; you realize that's a de facto cut at the rate of inflation?


    and you've still yet to explain to me why - since we are fixing the system anyway - you aren't willing to help our working poor achieve financial independance.

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    Re: Social Security Fix

    The whole scheme should be to use the fact that people will die never seeing a penny of their contribution. So increase the age to 68. Change the definition of income to include all earnings. Get ridoif any limits to contribution and benefits. Plug any loopholes that create avoidance.

    At the same time, switch to a tax system that charges anyone for using the infrastructure our grandparents built to sell their products and services. Have a belief that nobody could earn 30 million dollars in an afternoon without the infrastructure our grandparents built.

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