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View Diary: No Cuts to Social Security, Medicare and Medicaid (173 comments)

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  •  Re (3+ / 1-)
    Recommended by:
    DRo, samddobermann, soros
    Hidden by:
    radical simplicity
    Importantly, because it is funded by the payroll tax and not the U.S. Treasury, Social Security has played no role in causing the deficit.

    But it will in the future, since the T bills in the trust fund have to be redeemed via general revenue funds, which do contribute to the deficit.

    I'm pro-SS, but let us do the math correctly.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Fri Nov 04, 2011 at 09:12:18 AM PDT

    •  If that's your argument (22+ / 0-)

      then the government should stop issuing T bills because it's piling up the deficit.

      In essence, it's not SS that would be adding to the deficit, it's the redeeming of T bills that does it..and that's from any source.

      •  Absolutely (0+ / 0-)

        This is true. However, the existence of all of these T bills must and will equate to a tax increase on younger workers to cover the benefits of older ones.

        Without the trust fund, this wouldn't be an issue because contributions from younger workers would be enough in total to cover the older ones. As it is, boomers get a freebie: younger workers cover the trust fund obligations with no corresponding benefit.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Fri Nov 04, 2011 at 10:17:35 AM PDT

        [ Parent ]

        •  That's ridiculous (6+ / 0-)

          If there's a problem with treasury securities, it's a problem with treasury securities.  That's quite some logical jump to agree to that statement and then say that SS is to blame for a tax increase on younger workers and that boomers get a freebie.  The additional comment that younger workers cover the trust fund obligations with no corresponding benefit is pretty damn nuts.

          Whatever you're drinking this early in the day, make mine a double if I have to continue reading crap like this on a website dedicated to democratic principles.

          •  Re (0+ / 0-)
            The additional comment that younger workers cover the trust fund obligations with no corresponding benefit is pretty damn nuts.

            Really? So, let's understand this.

            The boomers are a big generation with lots of people.

            My generation is a smaller generation with less people.

            The trust fund redemption causes my generation to pay more than the "standard" social security that we would otherwise be responsible for. So I pay 9% instead of 6% (or whatever).

            Then, the trust fund depletes, and my generation gets the same benefit the boomers did. The only difference is that I paid 9% during their retirement, and I get an equivalent benefit of 6%. [Now, it might not be paid directly as SS taxes, but it could be as income taxes or as inflation, but it must be paid to keep the benefit level].

            The boomers get the same benefit that I eventually will, but I paid much more than they did to get the same benefit because there are more of them.

            Hence my comment.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Fri Nov 04, 2011 at 11:22:52 AM PDT

            [ Parent ]

            •  Come on (4+ / 0-)

              You're going to add up all the taxes you pay, any imagined inflationary spending you might incur, and compare it to a flat FICA withholding for other generations?  And you're going to call any expenditure or tax you can shove into the bag your generation's contribution to SS?  

              Why, when I went to school, (walking 2 miles uphill both ways), we were taught a thing or two about logic and mathematics.

              If the boomers add up all THEIR inflationary spending, income taxes, and anything else (except the kitchen sink), then you may find that would be enough money to cover all the Boomer's retirements, your retirement, your childrens' retirements, and anything else we'd like to buy with that money.

              Assuming of course, that we don't engage in any more fruitless searches for non-existent WMDs or land wars in Asia and steal the money from SS to do it, as we've been doing for the past 40 years.

              •  SS benefits... (0+ / 0-)

                ...and Medicare for that matter and indeed all social programs can only be paid for out of present economic activity. The fact that people 'saved' money for it in the past is meaningless.

                The sheer number of the boomers and the relative extravagance of their benefits means that servicing them is going to take a larger chunk of the economy than servicing later generations will.

                That being said, I certainly would like to be cutting non value add spending like wars first.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Fri Nov 04, 2011 at 01:12:18 PM PDT

                [ Parent ]

                •  "can only" (1+ / 0-)
                  Recommended by:
                  radical simplicity

                  There are other possibilities for investing Social Security trust funds, such as high-equity first mortgages and corporate bonds.

                •  Another possibility (0+ / 0-)

                  is government-protected priority mortgage investments in one's children's or relative's housing.

                  Say Mr. Boomer might put up $20,000 so his child can buy a house. This might be paid back at the rate of 200 times the minimum hourly wage (200*$7.35=$1,470)annually from the time Mr. Boomer is declared disabled or reaches age 65 until he dies.

                  Mr. Boomer might claim back on his 1040 up to a $1,000 year adjusted for inflation of the Social Security payments made or income tax due since he would be alternately providing for his old age.

                  •  That is ridiculous. What happens if his kid (0+ / 0-)

                    dies? Or says fuck you to his father and refuses to pay?  or sells the house — and pays off the remainder?

                    Sorry, I wouldn't have given a dime to my father and many others would feel likewise. What about people who would sell their obligations?

                    So if their father dies? or if he becomes disabled and needs funding early? Death of the old man could be very profitable to a kid. This could lead to an epidemic of patricide — or at least threats or blackmail.

                    And what about all those people whose parent can't possibly afford to give their child $20k? Or people who have had 4 children or 6 or 8? do they have to come up with multiples of $20k? Who decides if just one gets it?

                    The rich would do very well. They could even obligate lots more young people than they propagated. And gold diggers could warm up to multiple sugar daddies and then disappear.

                    And why the hell should they get to deduct it? Then the amply endowed can buy up lots of tax credits.

                    What about those having TWO parents or even with step parents? Who gets the payments you dream of?

                    If it ain't broke don't fix it. And if it is cracked just mend it, don't end it.

                    I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

                    by samddobermann on Fri Nov 04, 2011 at 04:56:37 PM PDT

                    [ Parent ]

                •  yes but it is because other (2+ / 0-)
                  Recommended by:
                  bigrivergal, radical simplicity

                  generations will have smaller numbers of people aging into SS.

                  You have reached your level of incompetence, sparhawk.

                  I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

                  by samddobermann on Fri Nov 04, 2011 at 04:27:46 PM PDT

                  [ Parent ]

            •  The younger generation is getting (0+ / 0-)

              repaired bridges, "food stamp" food, ~$100 billion/year in federal education funding, etc.

              The federal government could pay $3,000/year to 33 million old folks with that $100 billion/year in federal education funding.

              Class sizes are near record lows. In Florida, about 35% lower in grades 1-3, 20% lower in grades 4-8, and 15% lower in grades 9-12 than in the affluent upstate New York school districts of my youth.

            •  Your generation may be small (2+ / 0-)
              Recommended by:
              Dem Beans, Clues

              but the one right behind you is large, and you will be lucky to have them paying for you. So why would you worry about your own benefits?

              There are at least three generations working at any one time. Your generation by itself doesn't have to support anyone.

              We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

              by denise b on Fri Nov 04, 2011 at 03:33:18 PM PDT

              [ Parent ]

            •  Wrong. You are paying 6% NOW (1+ / 0-)
              Recommended by:
              bigrivergal

              and will continue. But there will be fewer people aging on when you come along so FICA taxes will accumulate beyond the needs of the post Boomers.

              The actuaries can be pretty damned good at working things out for even 75 years in advance. In the 30s they even allowed for a higher percentage living longer and reaching or passing 100 in the future taking into account the accelerating progress in medical knowledge and care.

              Pretty damned swift.

              The first person to get monthly payments on SS lived to be 100 and collected every month till then. There was NO COLA at first and no change for her or anyone until 1950. One of the original actuaries lived until 98 iirc, and was sharp as a tack to the very end. He died sometime in this last decade — and had been furious at the attempts to privatise it and Bush's demagoguery on the topic.

              I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

              by samddobermann on Fri Nov 04, 2011 at 04:24:50 PM PDT

              [ Parent ]

              •  And my sister died at 56 and got nothing (1+ / 0-)
                Recommended by:
                lostinamerica

                The straw man never dies.

                Obviously, you understand that the actuarial analysis works out quite well for everyone. The actuaries have had more than a few years of practice.

                The adjustment to handle the boomers was made a long time ago, btw.

                There's a mere $2.6 trillion in the funds right now. Just because you can't look at it, the invisible faith and trust of the United States of America makes it virtually valuable.

                So there. That explanation should clear things up.

                "All people are born alike - except Republicans and Democrats" - Groucho Marx

                by GrumpyOldGeek on Fri Nov 04, 2011 at 08:41:50 PM PDT

                [ Parent ]

      •  When SS collections = SS payments... (3+ / 0-)
        Recommended by:
        haremoor, Puddytat, magicsister

        The true deficit will no longer be HIDDEN by the surplus collections.

        Remember the Greenspan Commision?  This is the commission that reccommended that the SS tax be increased to create a "trust fund" for some future period when SS would be paying out more than it collected.  That sure sounded noble and pratical and a sound way to fund ss doenn't it.  That was during the raygun the snake oil salesman administration if anyone remembers.

        What really happened was taxes on workers went up to hide tax cuts on capital.  

        The government uses consolidated accounting to report deficits or surpluses.

        It's just that the true deficit will be revealed.

        Spearhawk only has it half right but half right is a distortion and a lie.

        Sorry for all the "remember whens" but I was there and saw it all roll out.  This was also when the tax code was reformed and all the middle clas tax shelters on Schedule A were eviserated.  Tax reform my ass.

        I am here to represent the democratic wing of the Democratic Party. Roar louder!

        by Josiah Bartlett on Fri Nov 04, 2011 at 10:23:50 AM PDT

        [ Parent ]

        •  More about Schedule A (0+ / 0-)

          Before rayguns tax reform, an individual was treated the same way as a corporation in many ways for tax purposes.

          Except for the Standard Deduction threshold,

          There were no limits on deductable mortgage interest, just like a corporation

          You could deduct all consumer loan interest, just like a corporation

          You could deduct all sales taxes paid, either the greater of actual or a schedule amount, just like a corporation

          There was not a threshold for miscellaneous expenses related to income production, just like a corporation.

          So much different when compared to today.

          I am here to represent the democratic wing of the Democratic Party. Roar louder!

          by Josiah Bartlett on Fri Nov 04, 2011 at 10:34:11 AM PDT

          [ Parent ]

          •  Reagan gave us the biggest tax RISE (0+ / 0-)

            in 1982 after the biggest tax cut in 1981. Social Security was altered completely separately and by a commission whose executive director was one of the chief actuaries on the original Social Security system.

            Some of those deductions that were eliminated or altered were actually somewhat beneficial although some were definitely bad. What was a problem was the large reduction in Capital Gains tax rates which proved to be horrible for the budget deficits and directly the debt. This resulted in Reagan having to raise the capital gains tax rate in the big changes in the 1986 Tax bill. I think that was one one called the Revenue Enhancement Act.

            Also they deliberately refused to make the AMT indexed to inflation and let it not cover capital Gains so it doesn't hit the super rich, particularly those who inherited great wealth. Instead it increasingly hits upper middle income people. Those who just earn their wages and salaries are caught up in it and their deductions are slashed so they are taxed the most heavily while the much richer who have much of their income in dividends and capital gains skate right by it.

            We could make some small changes that would be a big help. Raise and index the level at which the AMT kicks in but expand it to cover capital gains. Don't allow interest deductions for more than one home unless the couple lives separately and in separate homes. (You can have two primary residences.) Increase the standard deduction but decrease the amount of the personal exemption.

            I don't know how the numbers would turn out but I would trade decreased COLAs for a time for more money to the states for public employees for hiring teachers. More people employed would result in more taxes being paid into Social Security as well as increased spending which raises demand and supports other jobs, and better services for old people as well as the rest of the population. I say that as one on and dependent on SS.

            I would also demand increased food aid especial utilizing Feeding America which feeds into all the small food banks across the country. I would increase the Senior Centers and their meals programs around the country and perhaps attach them to the new Community Health Centers particularly in rural areas. Meals on Wheels should be expanded and augmented. Obama has done some of that but we need more.

            What really needs reform is the charitable deduction stuff. Basically it is a tax supported  system for churches and "educational" propaganda organizations. The "statistics" on higher giving by Republicans is buoyed up by the hugh cash infusions to groups like Heritage and Grover's Americans for Tax Reform and such. Mega Churches tax deductible donations are a hugh drain on tax receipts.

            I was not only there then, I was giving talk on the new tax laws and how they would impact those listening. I watched the old coot, as he signed Reagan Ronald to the law. Sign of Alzheimer's I would say.

            I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

            by samddobermann on Fri Nov 04, 2011 at 06:30:17 PM PDT

            [ Parent ]

        •  Re (0+ / 0-)
          Remember the Greenspan Commision?  This is the commission that reccommended that the SS tax be increased to create a "trust fund" for some future period when SS would be paying out more than it collected.  That sure sounded noble and pratical and a sound way to fund ss doenn't it.  That was during the raygun the snake oil salesman administration if anyone remembers.

          This entire concept was a fraud because you cannot "save" money this way if you're a government.

          The money "contributed" by Boomers was removed from circulation and caused deflation. The real purchasing power of Boomers was unchanged because prices of goods and services fell to compensate for the money removed from circulation.

          Now, the money is simply going to be added back to circulation and cause inflation, removing purchasing power from younger workers and assigning it to the Boomers.

          Again, I'm not necessarily arguing against this state of affairs, but the economics here aren't simple and the trust fund is not just a piggy bank. A more honest way to do all of this would have been to just raise SS taxes when the Boomers started to hit retirement.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Fri Nov 04, 2011 at 10:42:31 AM PDT

          [ Parent ]

    •  The government should honor its debt (26+ / 0-)

      to the SS Trust Fund as it does to any other investor.

      No, the SS Trust Fund does not contribute to the deficit.  Endless wars, tax cuts for millionaires and corporate welfare do.

      "When will our consciences grow so tender that we will act to prevent human misery rather than avenge it?" Eleanor Roosevelt

      by Betty Pinson on Fri Nov 04, 2011 at 09:24:52 AM PDT

      [ Parent ]

    •  In your strange view (13+ / 0-)

      all that Social Security money should just be sitting in an enormous pile in a very large room?  That's nonsense.

      It should be recirculated in our economy and gain interest over time.  This is why it is loaned out as T Bills.  T Bills are the safest non-FDIC bank investment that people can make.

      The money is there to pay SS.  Wall Street just wants to steal it like they've stolen just about everything else and they'll send shills out to fool folks like you into helping them with the theft.

      There already is class warfare in America. Unfortunately, the rich are winning.

      by Puddytat on Fri Nov 04, 2011 at 09:40:18 AM PDT

      [ Parent ]

      •  It shouldn't be 'sitting' anywhere (0+ / 0-)

        It is impossible to save money in the amounts we're talking about. The SS trust fund is basically a backdoor tax increase on younger workers to pay for the boomers. This is probably OK, but I wish it would be explicitly stated so we know what we're getting vs what we're paying.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Fri Nov 04, 2011 at 10:04:30 AM PDT

        [ Parent ]

        •  You're right. They should privatize it. /snark nt (3+ / 0-)
          Recommended by:
          Puddytat, 3goldens, Matt Z
        •  That's just not true (3+ / 0-)
          Recommended by:
          3goldens, Dem Beans, bigrivergal

          Social Security Payroll taxes were massively increased under Ronald Reagan to increase the SS deficit.  Boomers were paying into their own future retirement as well as for existing retirees.

          Social Security is set up so the working generation pays for the benefits of the retired generation.  That changed under Reagan to ensure there would be enough funds when the Boomers retired.  So, essentially, the Boomers double payed.

          There already is class warfare in America. Unfortunately, the rich are winning.

          by Puddytat on Fri Nov 04, 2011 at 10:50:24 AM PDT

          [ Parent ]

          •  You cannot "save" money this way (0+ / 0-)

            The Boomers did not suffer any reduction in their purchasing power due to "saving" this money, because the money's removal from circulation resulted in deflation.

            If the trust fund had purchased some other asset (like foreign bonds) this would not be an issue, but since the bonds were US bonds there was no sacrifice of purchasing power by the boomers. No money was "saved".

            Like I said, it would be more honest to never have had a trust fund and just pass a tax increase to cover the boomer's expanded needs. As it is, redemption of the fund is a sneaky way to take purchasing power from younger workers via inflation and increased general fund taxes.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Fri Nov 04, 2011 at 11:00:25 AM PDT

            [ Parent ]

            •  WTF? (5+ / 0-)
              If the trust fund had purchased some other asset (like foreign bonds) this would not be an issue...

              What's wrong with "buy American"?  Foreign bonds are safer?  Actually T Bills are the safest bonds world wide.

              There already is class warfare in America. Unfortunately, the rich are winning.

              by Puddytat on Fri Nov 04, 2011 at 11:02:54 AM PDT

              [ Parent ]

              •  It isn't a question of safe (0+ / 0-)

                By buying dollar-denominated assets, the trust fund created a situation in which the boomers didn't lose any purchasing power in exchange for their 'savings', because the money was just removed from circulation and price deflation occurred. Because of this dynamic, the redemption of the trust fund is basically a tax increase on younger workers in the guise of inflation.

                By buying foreign bonds, it would have required the boomers to generate exports in exchange for their retirement savings. Then, they can import to cover the differential when they retire (of course, they are at risk of sovereign default in that case as you point out).

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Fri Nov 04, 2011 at 11:14:40 AM PDT

                [ Parent ]

        •  The overpayment of SS premiums (1+ / 0-)
          Recommended by:
          bigrivergal

          was offset by income tax cuts. The answer to that is not to raise SS premiums again or to cut benefits - it's to raise income taxes. And cut the military, and pump up the economy. SS is not what we should be worrying about now.

          We decided to move the center farther to the right by starting the whole debate from a far-right position to begin with. - Former House Majority Leader Tom DeLay

          by denise b on Fri Nov 04, 2011 at 03:39:50 PM PDT

          [ Parent ]

    •  Man, that is an extremely old and moldy rw (18+ / 0-)

      talking point. But I guess you have to use what you have.

      Clothes make the man. Naked people have little or no influence on society. - Mark Twain

      by glitterscale on Fri Nov 04, 2011 at 09:46:01 AM PDT

      [ Parent ]

    •  SS, then is not contributing to the deficit (15+ / 0-)

      The redemption of treasury notes is.

      This line of argument tries to select one particular holder of treasury notes as a special villain.

      By this argument, Chinese communists and Saudi royal terror financiers also contribute to the deficit.

      Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

      by Robobagpiper on Fri Nov 04, 2011 at 09:54:29 AM PDT

      [ Parent ]

    •  yo, Hawk: (12+ / 0-)

      That was OUR SS contributions we LENT to the Government from OUR fund.  That money is owed to us. period.  

      Are you sure you are in the right place? This is a Progressive site, y'know, and we don't allow Republican Tbag talking points to go by without response.

      don't always believe what you think

      by claude on Fri Nov 04, 2011 at 09:54:36 AM PDT

      [ Parent ]

    •  crickets, eh? (2+ / 0-)
      Recommended by:
      Timothy J, Puddytat

      c'mon, dood, show us YOUR math, eh?

      don't always believe what you think

      by claude on Fri Nov 04, 2011 at 09:57:05 AM PDT

      [ Parent ]

    •  NO, you're wrong. The SS trust fund is a (2+ / 0-)
      Recommended by:
      evangeline135, SingleVoter

      creditor having loaned the federal gov't. over time funds which were used to finance the deficit. So when those T-bills are redeemed, that is NOT incurring more deficit spending unless the Congress decides to do so. They could fund those obligations with higher taxes, for example.

    •  uprated for HR abuse. n/t (0+ / 0-)

      Children have imaginary friends, adults have god.

      by soros on Sat Nov 05, 2011 at 09:20:25 AM PDT

      [ Parent ]

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