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View Diary: Barney Frank: Save Social Security by making the near rich pay a little more (146 comments)

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  •  Lots of assumptions there. LOTS. (3+ / 0-)
    Recommended by:
    quill, MPociask, equern

    First, the projected shortfall is built on assumptions that the economy will hover on the edge of recession for the next 25 years straight. An economy that grows at a healthy historical average rate sees no shortfall, ever.

    Secondly, there's nothing foolish or ineffective about waiting to the last minute - because when SS "saves for the future", it simply loans money to general government, who spends it on current operations. "Saving ahead", rather than maintaining pay-as-you-go, is what created this political crisis in the first place, by creating a large intergovernmental debt on which the political mandarins of both parties want to find a sneaky way to default one. Doing something to "save" Social Security now would, instead, make that intergovenmental debt, and the incentive for politicians to find a way to discretely void it, even larger.

    Government is not a household. Reasoning about "saving ahead" which applies to household finances turns about to be absurd when it comes to governments.

    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 Tue Jan 08, 2013 at 04:14:31 PM PST

    [ Parent ]

    •  Wrong. Wrong. And Wrong. (4+ / 0-)

      The date the projected shortfall occurs has been adjusted from 2032 to 2031.  That's just prudent economic forecasting and is absolutely NOT based on the current economy hovering on the edge of recession as you have been told.  The 2032 projection has been in place for a decade at least.

      It is absolutely foolish to wait until the last minute.  Geeze, I don't understand why I'd have to explain that to anyone.

      The surplus money that the Social Security Trust receives is invested in government securities. These are the safest investments on the planet and there's nothing wrong or foolish with that plan.

      For a huge benefit system like Social Security you have to save those surpluses to use when there is more outgo than income, such as when the baby boom generation starts collecting. That's really all there is to it.

      Finally, there is absolutely nothing, NOTHING, wrong with intergovernmental debt.  What the hell are you talking about?  

      Wait a minute... is that troll toe jam I smell?

      [Terrorists] are a dime a dozen, they are all over the world and for every one we lock up there will be three to take his place. --Digby

      by rabel on Tue Jan 08, 2013 at 04:49:23 PM PST

      [ Parent ]

      •  The *sole* reason we're talking about now is (0+ / 0-)

        the purely political crisis of the fact that FICA, which had for decades provided, via its surplus, a revenue stream for general government, will cease doing so, and Social Security will be expecting repayment of that loan, so SS becomes a net negative cash flow on general governance. So politicians of both parties are looking for a back-door way to default on that intergovernmental loan. That is the only reason people across the political spectrum are looking for ways to cut SS benefits is that they don't want the FICA gravy train to stop, and don't want to have to pay back SS what they owe it.

        All "fixing it now" does is restore the gravy train cash flow to the  DC crooks who want to suck on the FICA tit for a few decades longer - and merely kicks the ball down the road while increasing the political incentive to stiff SS.

        Oh, and on the troll accusation - mind yourself.

        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 Wed Jan 09, 2013 at 02:21:52 AM PST

        [ Parent ]

      •  Oh, and your claim about the economic forecasting (0+ / 0-)

        being prudent is irrelevant - because it doesn't speak to the assumptions behind the forecasts. If you dig into the numbers, the projections about SS and Medicare's futures are based on long term GDP and wage growth rates that are abysmal; Medicare's assumptions are compounded with unrealistic assumptions about interest rates and the % of GDP spent on medical care growing without limit (an obvious absurdity).

        As for the numbers being stable for a decade, that's bullshit. Going back to the Greenspan reform, the "SS runs out of money date" has always been "25 years from now", plus or minus a few, precisely because the economic projections used by the SS Trustees are so unrealistically dismal; the economy always outperforms the projections, and the "insolvency" date gets pushed off. The only reason they've been stable recently is because, for once, because of the Great Recessions, our economic growth rates have mirrored the assumptions the SS trustees use.

        There have been multiple diaries on this subject by Bruce Webb, the front pagers, and the like. Fucking read them before you start pretending to be informed enough to sniff out trolls.

        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 Wed Jan 09, 2013 at 02:29:37 AM PST

        [ Parent ]

    •  Meme Kill Alert! (0+ / 0-)

      Can we PLEASE (pretty, pretty please?) come up with an effective meme that KILLS the meme equating government finances and household finances?

      A government is NOT a household.

      Their finances are NOT managed in the same manner.

      We need to stress this at EVERY opportunity, and can not be stressed enough.

      What separates us, divides us, and diminishes the human spirit.

      by equern on Wed Jan 09, 2013 at 10:14:01 AM PST

      [ Parent ]

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