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View Diary: Austerity is NOT the way to Prosperity (53 comments)

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  •  Good ideas, but do WHAT to SS? (1+ / 0-)
    Recommended by:
    ozsea1

    To paraphrase FDR. "If we take nothing from capital, we owe nothing to capital".

    If you remove the cap on income you create the 16k monthly benefit check. If you apply other forms of income like cap gains, you totally overfund SS.

    You seem to be under the impression there is something wrong with SS, that needs to be fixed.The SS Trustees report for 2012 states that in the low cost scenario, SS is good thru 2090. The major assumptions are moderate workforce growth, GDP growth of 2.8% or better, widespread job creation, and significant real wage growth.

    See page 66 of this pdf, see low cost scenario

    http://www.socialsecurity.gov/...

    Footnote b:
    The Trustees estimate the trust will not be exhausted in the projection period.

    The premise that SS goes broke in 2033 is based upon GDP growth below 2.5% for 20 additional years. That would make the Great Recession the worst economic downturn in the history of recorded human economics- about 500 years. And a .2% growth in civilian workforce which is possible, if we shut our borders and stop nearly all immigration.

    Both of these are extremely unrealistic.

    The word entitled is in the original SS law 9 times. One pays ones insurance payments (FICA) and one is LEGALLY entitled to receive benefits. SO from a legal standpoint your claim that SS is not an entitlement is completely offbase and without merit.

    Millionaires tax, cool. but lets really make income tax progressive, we used to have 67 brackets, that might have been a bit much. Currently there are 6 brackets, I think 20 brackets would go a long way to properly describe a geometric curve that a progressive income tax needs.

    Cap gains, 30% would be a good start to incentivize capital flow away from market speculation and to domestic investments.

    You make many great policy points. But your proposals for SS I cant abide. TnR.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Thu May 17, 2012 at 08:21:19 AM PDT

    •  I didn't say there was anything wrong with SS (4+ / 0-)
      Recommended by:
      arealniceguy, ozsea1, New Rule, YucatanMan

      But, the ginned up hysteria over projections that say somewhere in the 2030's that we might have to reduce benefits (all based on assumptions - educated guesswork in other words) has been transformed into the Big Lie that SS will go totally broke by the time our kids are ready to collect.

      Lifting the cap does several things. It knocks those assumptions into irrelevance. It reflects that income growth has been concentrated at the high end for decades.

      And if SS starts running a surplus, we could try increasing pay out and see what that does for the economy and stop the nonsense about raising the age of retirement.

      This argument isn't aimed at people who still think SS is secure - it's pushback against the panic spreaders AND shifting the Overton Window. Look, if the U.S. economy has grown because of increased productivity (and at the expense of jobs as a consequence), one way of reversing that wealth transfer is to let retired people have a greater share, and/or retire earlier, instead of this nonsense that people should expect to work until they drop.

      "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

      by xaxnar on Thu May 17, 2012 at 09:43:20 AM PDT

      [ Parent ]

    •  Hmmm... (0+ / 0-)
      The premise that SS goes broke in 2033 is based upon GDP growth below 2.5% for 20 additional years. That would make the Great Recession the worst economic downturn in the history of recorded human economics- about 500 years. And a .2% growth in civilian workforce which is possible, if we shut our borders and stop nearly all immigration.

      Both of these are extremely unrealistic.

      I think that both of those things are more realistic than the Conventional Wisdom that things can grow indefinitely forever.

      Those who support banning cocaine are no better than those who support banning cheeseburgers

      by EthrDemon on Thu May 17, 2012 at 11:18:03 AM PDT

      [ Parent ]

      •  The days of 10-14-16% GDP growth (0+ / 0-)

        are long gone. Granted. I doubt any Keynesian disagrees that 3.5%/annum is top in the current paradigm.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Fri May 18, 2012 at 08:13:07 AM PDT

        [ Parent ]

        •  What I meant was... (0+ / 0-)

          Even 3.5% annual growth can't go on forever.

          Those who support banning cocaine are no better than those who support banning cheeseburgers

          by EthrDemon on Fri May 18, 2012 at 02:34:50 PM PDT

          [ Parent ]

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