Paul Ryan on TV says we need to "fix" Social Security and Medicare to solve deficit problem. DO you think he is right? Well, you are wrong.
A bit disingenuous to ask a question when you already know the answer, isn't it? :mrgreen:
However, Ryan is largely correct. SS and Medicare make up somewhere north of 60% of the budget. Defense is another 15%; interest is 6%; VA is 4%. That is a
huge swath of the budget to declare either untouchable, or slotted for an increase.
Social Security and Medicare taxes and payments are not part of the general budget. Reducing them might in the long run change how long the programs can operate at no loss, but they will do nothing to solve the present deficit problem. That is unless you roll the present Medicare and Socail Security tax payments into the general revenues and then reduce Medicare and Social Security expenses.
Segregating payroll taxes from general revenues is essentially meaningless. It's a fig leaf, designed to fool Americans into thinking those programs are not really safety nets.
SS/Medicare are pay-as-you-go, meaning the payments collected this year are spent as benefits in this year. For decades, there was a surplus, and this surplus was by law required to be loaned to the rest of the government. The loans essentially match inflation, and the federal government has NEVER defaulted on those intergovernmental loans.
What's happening is those programs are running a deficit, and are drawing down the Trust Fund. Thus if we don't address that spending now, then by 2032 or so it will be pulling from general revenues. Hence the problem.
The GOP and Dems alike have borrowed money, approximately 2.6 trillion dollars, from the Medicare and Social Security revenues to help balance past budgets.
Incorrect. By law, the Trust Fund was required to be loaned to the rest of the government. Every penny borrowed from the Trust Fund has been repaid on time, with interest. Did I mention that this is basically a figment to fool Americans?
Basically, the REAL issue is that there are too many older people, and fewer younger workers, to support the system the same way it did in the past. That means our options are:
1) We can increase taxes (which Republicans don't want to do)
2) We can cut benefits (which for the most part, Democrats don't want to do)
3) We can switch to a Australian-style annuation system (which will cost far less in the long term, but will be phenomenally expensive to implement)
4) We can bring in a large number of younger immigrants to balance out the demographics and boost the economy (good luck getting that passed)
None of which is pleasant. Which is, of course, why Trump wants to keep kicking the can down the road. Ryan, in contrast, is trying to work on this now -- as it will be much uglier if we wait another 4, 8, or 16 years.
What I can not really understand is how the people who are asking the questions on thses so called news programs can know so little about what they are asking.
They don't always go into depth, but generally speaking they know what they're talking about. In this case, Ryan does as well.
