Skip to main content

Okay we are at the last point where 'reformers' and 'defenders' of Social Security agree.

We have two dotted lines overlapped by a solid line. One dotted line starts at the lower left and ascends to the upper right. This line is "Scheduled Benefits". The other dotted line starts at the upper left (barely) and descends to a flat line at 5.1 (of what, it doesn't matter as yet) as is labeled as "Tax Revenues". Now both "Scheduled Benefits" and "Tax Revenues" are dependent on an arithmetic relation between current law tax and benefit formulas and a particular set of economic and demographic assumptions called 'Intermediate Cost'. And under these formulae and assumptions "Scheduled Benefits" and "Tax Revenues" already crossed. Which is one definition of 'crisis'. And in this figure marked by the vertical line.

On the other hand we have something called the 'Social Security Trust Fund'. And things get complicated. Below the crueller.

Okay lets throw an acorn to the 'reformers'. The point at which 'Scheduled Benefits' and 'Tax Revenues' cross is the moment that net cash flow from Social Security to the General Fund turns negative. And by one definition used by CBO scores as a 'primary deficit'.

On the other had current law doesn't see it that way. Under current law the Social Security Commissioner can and will pay full scheduled benefits as long as a combination of current tax income and existing interest earning Trust Fund assets allow. Which explains why the solid line of 'payable benefits' extends beyond 'tax revenues', the difference being in the draw first on interest on Trust Fund assets and then those assets themselves. By that same token the SSA Commissioner has no legal authority to adjust either benefits or revenue, left unaddressed the result would have to be a sudden reset in benefits immediately on Trust Fund Depletion, under current assumptions around 2034.

But that is where the lens begin to distort the respective visions

'Reformers' look at that discontinuity and conclude 'unsustainable'. Or perhaps 'over-promised'. Instead 'Defenders' look at the discontinuity and conclude 'under-resourced'. And I don't have the time tonight to suss out every  argument on both sides and still less the arguments for outcomes in between. Because 'reformers' just start from the position of adjusting 'scheduled' down to 'payable' and 'defenders' on the best way of adjusting revenue up to 'scheduled' with little awareness that they are seeing the discontinuity from two sets of glasses.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar (9+ / 0-)

    socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

    by Bruce Webb on Mon Jan 21, 2013 at 07:02:20 PM PST

  •  Tom Brokaw (5+ / 0-)

    I'm getting downright annoyed at the mere sight (or sound) of him.  Seems like anymore, every damned time he opens his damned mouth, he's calling for cuts in Social Security and Medicare.  He's not reporting, he's not analyzing - he's advocating!!

    noun+verb+cut-them

    What do we make of the contrast between heroic teachers who stand up to a gunman and craven, feckless politicians who won’t stand up to the N.R.A.? -- Nicholas Kristof, NYT --

    by Land of Enchantment on Mon Jan 21, 2013 at 07:15:54 PM PST

    •  Hear, Hear! Unfortunately, he's not the only one. (3+ / 0-)

      True, he's more vociferous in voicing his support, but as far as I can tell, pretty much all the corporatist cable or network, news or business reporters are on the "we must reform Social Security for the sake of the children" bandwagon.

      That's also true of all the print media reporters that I watch on C-span (Washington Journal, forums, etc.).

      I usually listen to the "replays" of the Sunday Shows, but lately I've had to stop, usually half way through ABC's This Week (after NBC's Meet The Press).

      Talk about needing 'hip waders.'  Jeeeeezzzzz!!!

      Mollie

      “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

      by musiccitymollie on Mon Jan 21, 2013 at 09:04:52 PM PST

      [ Parent ]

  •  Originally Scheduled Revenues (3+ / 0-)

    What information is there on what the projected revenue was when the benefits were scheduled and why revenue fell short? I suspect things like the policies that kept wages flat while productivity rose and the effects of bubble-driven recessions on revenues contributed a lot to the problem. IIRC, the last annual report from the Social Security Trustees attributed most of the decline in the projections to the current jobless recovery and long term unemployment.

    Do Justice, love mercy, walk humbly with your God

    by NoisyGong on Mon Jan 21, 2013 at 08:03:47 PM PST

  •  A misdirection argument. It's not complicated... (3+ / 0-)

    Now, instead of false equivalencies, a few facts.

    From Paul Blumenthal..paulblumenthal@huffingtonpost.com

    "According to a review of tax documents from 2007 through 2011, Peterson has personally contributed at least $458 million to the Peter G. Peterson Foundation to cast Social Security, Medicare, Medicaid and government spending as in a state of crisis, in desperate need of dramatic cuts."
    That's "at least".

    According to the capitalist bible, Forbes:

    "By sitting on their growing investments, the richest five Americans made almost $7 billion each in one year. That's $3,500,000.00 per hour."

    That's more in one hour than 99% will earn in a lifetime.
    Repeat, more in one hour than most will earn in forty years of going to work every day for their entire lives.

    See anything maniacal in that?  Deal w/the sociopaths and all else will be simple.

    Yeah, so let's discuss the problem w/Social Security and ignore the fact that 93% of all productivity/wage growth goes to the top one percent.

    Raise the contribution level and SS is fixed for a million years, end of discussion.  
    And, let's move onto other critical things like sharks or snakes or asteroids or bicycle guys or football guys or any other misleading distractions.

    •  Could Americans stand (2+ / 0-)
      Recommended by:
      denise b, Vote4Obamain2012

      A rise in the contribution (tax) rate of one cent per five dollars earned,and the awful realization that when they have earned 190,000$ in a year they still have a little bit to go to reach the cap?... No.  They would collapse of the weight... For minimum wage folks, that is almost 2¢ an hour.  65¢ a week!  (Someone please check my estimates... I spent all of twenty seconds on them).

      •  Your estimates are in the ballpark (2+ / 0-)
        Recommended by:
        denise b, Vote4Obamain2012

        You can keep the current cap and fix Social Security for 80 cents per week per worker per year, or by a different calculation about 7% of the projected increase in Real Wage going forward (and so less of total wage).

        If we ever agree that the problem is under resourcing rather than over promising the needed fixes are ridiculously cheap. It is getting past "unsustainable" that is the hard part.

        socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

        by Bruce Webb on Tue Jan 22, 2013 at 11:03:40 AM PST

        [ Parent ]

        •  An increase on the working class as opposed to (0+ / 0-)

          the upper classes is not a solution.  It removes money from the economy that the working class needs.  

          Perhaps a donut hole so that no additional contributions are made until one earns some larger amount ($250,000?).

          That way workers don't have to give up more discretionary dollars (heck it probably isn't discretionary but necessities) but the rich who would just sock it away and not add to the economy would make the additional contributions.

          I'm sure the banksters would oppose that as it would mean they wouldn't get the money put into banks and they would have to find another way to meet their deposit requirements.  That might even cause banks to pay a little more interest in order to meet those deposit requirements.

          •  perhaps the employer's share of contrib should (0+ / 0-)

            Go up a little--60/40, say, to recognize the depreciation of the worker's life or sommat.  Or...

          •  Donut hole to $250k (0+ / 0-)

            Only backfills 33% of gap per CBO.

            And it is hard to argue that 80cents a week per worker per year that delivers 100% of the scheduled benefit without requiring any changes in retirement age is really that heavy a lift. And yet that is all it takes to fix SS within its current structure.

            Progressives who insist that any such increase in what is after an insurance premium have to be ruled out from the start need to make more of a sustained case than "necessities".

            Look if you want to convert SS into welfare via some sort of fixed dole program unlinked from contributions be my guest. On the other hand there are reasons why Milton Friedman and his acolytes recommended exactly that "solution" and why Reagan pushed EITC as against actual changes in pre-tax wage.  And they have nothing to do with long term economic and social welfare of the working poor.

            SS was set up with the structure it has for reasons. And forgive me if I trust FDR and Frances Perkins more than the smart boys at Chicago crying crocodile tears about the Poors' purchasing ability. And the progressives who have just taken that hook deep.

            socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

            by Bruce Webb on Thu Jan 24, 2013 at 04:50:52 PM PST

            [ Parent ]

  •  Just raise the salary cap already (1+ / 0-)
    Recommended by:
    Calamity Jean

    All of this obfuscation is an obvious attempt to avoid debating the main issue.  The salary is too low because average income has dropped over the past decade!  That means that the cap has to be raised.  I would pay more.  Okay so what.  If it means the system can be projected essentially until infinity ( more like 50 years according to the actuaries) then let's do it already.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Tue Jan 22, 2013 at 04:15:50 AM PST

    •  That gives the billionaires a pass (0+ / 0-)

      Raising the cap would work but in the sense of treating the symptom and not the cause.

      The issue is not redistribution of existing gains from productivity from higher earning wage earners to lower (which is what a cap increase gives you) but in the initial split of gains between those going to labor and those going to capital and secondarily to those facilitating that split. I.e. the Bankstas.

      A good first step is realizing that labor compensation is not actually set magically by marginal labor productivity but instead by a power relation that favors capital and it's direct servants against everyone else.

      Gosh if we could only come up with a catch slogan, maybe:

      "We are the 99%"

      Put that into action and we don't have to mess with technocratic 'raise the cap' patches on the bleeding wound.

      socialsecuritydefender.blogspot.com - SocSec.Defender at gmail.com - founder DK Social Security Defenders group - (hmm is there a theme emerging here?)

      by Bruce Webb on Tue Jan 22, 2013 at 11:12:17 AM PST

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site