I don't see how the problems with Social Security are anything more than a problem of overall government spending. There's a Ricardian equivalence angle. Suppose that Social Security was put in fact put into a "lockbox". Unless government borrowing was also constrained, there would be nothing stopping the federal government from borrowing an equal amount. This is functionally equivalent to "raiding" the trust fund - instead of raising taxes to pay Social Security obligations, taxes need to be raised to pay the debt instead.

other than construction, manufacturing, and housekeeping type jobs, most jobs are not ones where older workers are physically incapable, retraining bias will be a bigger issue.

No, this is wrong. Aging impacts more than just your ability to do extremely physical labour well. Especially at high ages like 65+, basically everything is more difficult. It's much harder to put in long hours when you're older, and you're much more likely to require time off for routine medical illness. The bottom line is that people over 65 are (barring major medical breakthroughs that we have not yet had) for the most part not going to be great workers.

So, as best we know, this is what reality looks like:




And this is how the Republicans have decided to approach it (http://www.nytimes.com/2010/09/29/bu...t.html?_r=1&hp)

Republicans’ Deficit-Cut Pledge Lacks Specifics

In their Pledge to America, Congressional Republicans have used the old trick of promising specific tax cuts and vague spending cuts. It’s the politically easy approach, and it is likely to be as bad for the budget as when George W. Bush tried it.

....

Actual fiscal conservatives acknowledge that these steps do not come anywhere close to solving the long-term deficit. By 2035, the deficit (even without counting interest payments on the federal debt) is on course to reach $1.9 trillion, according to the Congressional Budget Office. If you reduced domestic discretionary spending to its share of the economy under Ronald Reagan and then eviscerated it an additional 20 percent, you would shrink the deficit by all of $100 billion.

The bulk of the deficit problem instead comes from three popular programs, Medicare, Social Security and the military, and they happen to be the ones the Republican pledge exempts from cuts. But it’s impossible to fix the deficit without making cuts to these programs or raising taxes. To suggest otherwise is to claim that 10 minus 1 equals 5.

“We as Republicans need to realize that you can’t just cut off the welfare queen and balance the budget,” says Rand Paul, a Senate candidate in Kentucky, who has some extreme views on other issues but is evidently pro-arithmetic. “The only way you’ll ever get close to balancing the budget is if you look at the entire budget.”

....[fin]

So, again, if you do not favor raising taxes, which parts of the federal budget should be cut and who will cut them (nobody, nobody will cut them)? So pucker up and enjoy paying for college for another 95 IQ marine who would have been a good air conditioner repair man.

Right, so when they borrow the money that social security had "saved up" (it brought in extra revenue, but you are obv aware the revenue no longer exists) the debt will increase even further.

i just don't understand the logic behind finding the most palatable 'band-aid' vs attacking the root cause...out of control SPENDING!!!

its not like we are discussing mother-nature where we have absolutely no control of what happens...this is a representative government and the apologist tone in your post is depressing.

One of these days you may accumulate a certain degree of wealth and when and if that day comes you will be surprised at how petty some people seem because you have more money than they do.

This thread has been so full of envy and bitterness.

Again, the parts of the budget than can be cut enough to matter are defense and medicare (assuming social security is "separate"--though, as others have mentioned, that has its own major issues). I see it as politically impossible to significantly cut either of these barring some sort of catastrophe--and the Republicans specifically excluded them from their pie in the sky "budget". So, again, the issue is where to raise taxes--and the rich are the ones with the money.

While it is technically equivalent in those terms, it is not equivalent in perception terms. The method which the government used allows for an adulterated view to be presented to casual observers of the government's debt and deficit levels. When the media presents the debt/deficit numbers they do not necessarily mention the unfunded liabilities looming in social security. This is especially true when this whole accounting scheme began since their weren't the massive projected shortfalls on the horizon allowing for many years of the government misrepresenting its fiscal health to the casual public observer.

How can it bring in extra revenue, and then not have extra revenue?

SSI either has its own dedicated revenue source or it doesn't. You can't just look at it one way or another depending on how it best suits your purposes.

lol. I'm well inside the highest tax brackets and live in a high-tax state and the only people that seem "petty" and "bitter" to me are people who are crying about paying an extra 4% on a relatively small fraction of their income.

you do realize that you band-aid is not long-term sustainable...right? how do you see things playing out? For ****s and giggles, let's just say you can define rich and tax whoever as much as you want... I'm dying to see what you come up with...

beyond shrinking the tax base, the problem with this thinking is the rich are also the most mobile with their person and money as well as most knowledgable about tax shelters. the more pressure put on the top tier of their income the more reason they have to use that mobility

well what was it advertised as when it was first proposed?

and what was it expressly advertised as not being when it was first proposed?

if you answer with oh so what who cares then i find it hilarious when people slam on tea partiers and conservatives for complaining about what they envision obamacare will actually become as opposed to what was just passed.

Actually, I see higher taxes as very much sustainable. Historical tax rates or much higher than today. Hell, raise tax rates to what they were in the boom years of Clinton--which ended the deficit. However, before higher taxes, I'm in favor of cutting the military and rationing medicare, I just see these approaches as politically infeasible. What's your solution?

[The game is much harder when you limit yourself to reality.]

As I recall, you are also an attorney. What type of an attorney are you? Is it possible your highest tax bracket salary is a result of government regulations and/or the governments' application of violent force? If so, you are not paying taxes, you are receiving a net transfer from taxpayers.

I was referring to the more abstract notion of what a government sponsored pension scheme "should" be, rather than how US SS was originally described or sold to the public. Some people think that SS should be a redistributive taxation scheme, regardless of how it was originally advertised. Those people tend to think that the scheme is doing just fine and that if it needs to change it only needs to change by moving more money towards the poorer participants.

Even if we presume the existence of a market outside of such government intervention, you can't discern who's benefitting from the intervention because to the extent that there are such inefficiencies, market tackles them collectively to close the holes and raise the opportunity cost of taking advantage of such subsidy. Furthermore, if lawyers are given free money by government intervention, so are those who sell things to lawyers and would-be lawyers, those who would have otherwise competed with lawyers in other professions, those who help people become lawyers, those whose cognitive style is complementary to what's necessary to become a lawyer, etc, etc. Ultimately, this is an argument for progressive taxation - on the whole, those who end up with more income can be presumed to have benefitted from the more arbitrary aspects of the present system. Interestingly, this is also an optimal bargaining outcome, with those with more at stake paying more.

Regardless of the fair analysis of the situation, the above is more interesting as the present state of right-wing populist rhetoric. Money I make is mine to keep because I earned it. Taxation is theft. Money you make is directly or indirectly a result of some misguided government handout and you're a thief. Of course, you could make this argument regardless of how people make their money. This is almost as ironic as a bunch of people who derive income from poker talking about how taxation stifles innovation and growth by reducing incentives to create value for other people.

Also:

http://forumserver.twoplustwo.com/sh...6&postcount=16

sure its sustainable - raise taxes. ok...a few years pass by and ooooops...more budget deficits. solution? raise them taxes. worked last time, should work again...right? ooooooooooooops...more budget deficits. solution? raise them taxes. worked last time, should work again...right?

it works until it doesn't...then what?



I see higher taxes in the short-term as simply a means for creating a bit of breathing room...

alter the framework
1. mandatory balanced budgets (all levels of gov)
2. term limits for ALL elected AND appointed officials (all levels of gov)
3. ballot access reform (breaking the 2 party mentality is a MUST)

reduce spending
4. significantly reduce Military spending (~50% at least)
5. end medicare, increase hospice, privatize the rest
6. cut taxes as projected budget surpluses increase in size and frequency

Continuing on that path, I'd like to see much of the power, usurped by the fed gov, returned to the states. Let's end the FED, destroy FNM/FRE (bond/equity holders can eat **** like they should), repeal the patriot act, and some MAJOR revision of Interstate Commerce.



I'm an AC-dreamer, but if we accomplish the above in the next 50 yrs, I'll die a happy happy man....and I certainly don't think its outside of reality. However, if people as seemingly smart as yourself continue to just accept the current state of affairs, then the odds don't look as good.

Well, while I see many of your suggestions as politically unrealistic (and perhaps full of harmful unintended consequences), at least they are things that would (presumably) get the budget in balance.

My main concerns are 1) the seeming widely held belief that we can cut (or not raise) taxes and the budget will balance itself (thanks to voodoo economics). (A methodological axiom I subscribe to is that if a "solution" seems too good to be true, it probably is, and should thus be subject to a higher level of scrutiny). And 2), that the budget can be balanced without cutting the "big" programs like the military and Medicare.

Unfortunately, even suggesting cuts in either of these areas generally results in partisan demagoguery and the level of realism in politics suffers. I think we may ultimately come to grips with our budgetary issues, but it will take a different political climate than currently exists or is on the near term horizon.

Not even talking about cutting actual debt, just how much the debt increases.

Interesting in itself.

by all means, which ones...

you're grossly over-simplifying the argument (perhaps to make your point appear valid?)...in only very specific conditions will cutting taxes lead to a balanced budget. regardless, I've made no such assumptions in our tangent so I'm not sure what you are blabbering about.




agreed...which is why i specifically mentioned both as being cut in my hypothetical strategy.


again, I agree...perhaps you missed or just aren't giving items 1-3 enough credit. those are the suggestions i believe will make it more palatable to cut spending. do you need me to elaborate on those items to show the implications I'm making?







---
you keep spouting the same ****. (yes we need cuts. but cuts are unrealistic because politicians like having those powerful jobs). then I respond to address your concerns (specifically) and you simply respond with the same ****...are you trolling on purpose?

So you would agree that people who sell things to corn farmers benefit from corn subsidies, but you're not sure if corn farmers themselves benefit?

I was summarizing, agreeing with some of your points, not trying to move forward. Don't want to go through potential unintended consequences, so I'll just pithily say the unforeseeable ones.

As a matter of psychology, I don't think people care about being "rich" as an end in itself, at least not decent people. Apparently people do not show an increase with more income once they make about 70k. However, while I don't think wealth matters per say over a certain amount, people do always want to make more than their neighbors. Raising taxes on all doesn't really alter that dynamic. Also, someone making 70k today can probably has as much "utility purchasing power" (yes, I made it up) as someone who made 10x as much 50 years ago (yes, I pulled this stat out of thin air).

i see. so much for debate...let's tax those thieving rich people, spend all their money and tax them some more. at least the consequences of that strategy aren't "unforeseeable"