Social Security: The Cost Of Doing Nothing

[haymarket]

What an interesting figure. What was the strategic resource-alignment study from which you derived it?

here ya go

U.S. defense spending compared to other countries | pgpf.org

as much as the next ten combined.

 

[haymarket]

As I have demonstrated to you ad nauseum (almost as many times as I have had to demonstrate to you that I'm willing to cut defense including benefits), defense is currently anywhere but a record high.

You do understand that I said FROM A RECORD HIGH.... right? That does NOT mean that the record high is today but that the reductions have happened from that record high.

No, you didn't. You gave me a formula that would provide (with a - ridiculously optimistic - static scoring model) us with an 85% solution for a $28 bn deficit, that A) does not cover the shortfall even today and B) sure as hell doesn't even come close to covering the shortfall tomorrow.

Actually I did. the proposal I quoted for popping the cap takes care of 85% - just like you said. But I then went even further and raised much more money saying that I would consider ALL moneys coming into a person pocket or accounts for FICA. And that would include lots of income that is not taxed today at the same rates that income tax is. So there is more revenue in my plan.

 

[CalGun]

Your post said "everyone" not 'everyone making a dollar." I quoted you - its clear - now you change it to fit your socialist agenda but the fact is you lied when you said tax everyone (which I agreed with).

I said everyone making dollar one and up. Just who would NOT be included in that? Everybody makes at least one dollar a year.

 

[CalGun]

Yes and when consumers spend less money thanks to those corporate breaks it creates opportunities for more spending on other items, it creates opportunities for people to apply savings to investment, and CREATES JOBS. I realize capitalism is really hard for you socialist to get - but that's how it works.

The corporate breaks do not create jobs either. Corporate taxes are passed on to the consumers like any other cost. Corporate tax breaks accomplish nothing but resource shifting. If I give a tax break to oil & gas, you will have more oil and gas operations. On the other side, you will have an offsetting shortage. The Government does not create jobs - unless you think that the people in govt are just smarter than we are.

I could have ignored the incentive, but why would I. I changed my priorities from paint to air conditioning. No job was created. All of the efficiency and lower costs and all of it, suggests that you think that the government is smarter than the market. Without this or that tax cut, no one would be able to figure out that less electricity would cost less.

Unless the government is smarter than the market, it cannot create jobs.

 

[ttwtt78640]

Greece isn't a monetarily sovereign country, thus it's not a good choice in comparisons.

What you are suggesting is that we should essentially turn social security into a means tested welfare system. I believe that welfare tends to lock people into poverty by removing their incentive to be more productive. Any time that you means test something, you create an incentive to not do something, in this case it would be to not save or invest, as doing so may reduce or eliminate the benefit that you paid for. "Why the heck should I save anything when doing so will cause me to loose income"

You have a good point but there are ways to have both means testing and to maintain an advantage by having private savings/assets for your retirement. One simple way is to use 250% of the maximum SS benefit level as the income means test. Only those that have so much income (assets are not counted at all) that it exceeds 2.5X the maximum SS benefit would see any reduction in their SS benefits, and then only to the extent that they exceed that amount. If the maximum SS retirement benefit is $3K/month then you could supplement that with $4.5K/month from your private funds without losing any of your SS benefits.

 

[JoeTheEconomist]

You have a good point but there are ways to have both means testing and to maintain an advantage by having private savings/assets for your retirement. One simple way is to use 250% of the maximum SS benefit level as the income means test. Only those that have so much income (assets are not counted at all) that it exceeds 2.5X the maximum SS benefit would see any reduction in their SS benefits, and then only to the extent that they exceed that amount. If the maximum SS retirement benefit is $3K/month then you could supplement that with $4.5K/month from your private funds without losing any of your SS benefits.

As a question. Today the system has a means-test that reaches up to 1/3rd of retirees and generates 27 billion. How much in billion do you think expanding the means-test to something that is roughly double what it is today. This year the system lost $1 trillion dollars, and you are talking about a billion give or take.

 

[JoeTheEconomist]

Yes and when consumers spend less money thanks to those corporate breaks it creates opportunities for more spending on other items, it creates opportunities for people to apply savings to investment, and CREATES JOBS. I realize capitalism is really hard for you socialist to get - but that's how it works.

Actually when corporations get tax breaks, someone else picks up the bill. So again, the govt creates nothing unless it is smarter than the market. The irony of your statement is that you are the socialist arguing that the government's smarts are what the economy needs. These corporate tax breaks manage resource allocation. That is what socialism is - government decides resource allocation. You may be right that the government is very smart, and we need whatever tax break it is offering. But it only creates jobs to the extent that the government is OMG smart.

It is possible to create jobs with lower taxes provided that there is lower spending. That is a tax reduction for all businesses. But shifting tax burden so that you can help industry A or B, only creates paper.

 

[ttwtt78640]

As a question. Today the system has a means-test that reaches up to 1/3rd of retirees and generates 27 billion. How much in billion do you think expanding the means-test to something that is roughly double what it is today. This year the system lost $1 trillion dollars, and you are talking about a billion give or take.

I think that you are confusing the current (much watered down) "wage" earnings test for non-disabled retirees prior to their reaching full benefit age with a complete means test. Please supply a link to what you are calling a SS retirement benefit means test.

 

[JoeTheEconomist]

No. I am suggesting that mean-testing is the most likely outcome. My proposal has nothing of the sort, except inasmuch as Social Security is already means-tested due to the depreciating return on income.

I have said it elsewhere. The system is means-tested. The means-test is collected by the IRS on the 1040, and RETURNED to Social Security. Social Security clawed-back about 27 billion in 2012. See post 385 (next one down) for links and details.

The system has 4 different subsidies. High-wage subsidizes Low-wage, singles subsidize married with kids, later co-horts subsidize earlier co-horts, and long-careers subsidize short-ones. This is a mess of cashflows. You can call it welfare, but keep in mind not one penny of benefit is based on need.

 

[JoeTheEconomist]

I think that you are confusing the current (much watered down) "wage" earnings test for non-disabled retirees prior to their reaching full benefit age with a complete means test. Please supply a link to what you are calling a SS retirement benefit means test.

In 1984, the IRS started collecting a means-test on Social Security benefits. The money is RETURNED to Social Security. Some mistakenly think it is a tax because it is collected by the IRS. But the money is returned to the system, not put into the general fund.

This money cannot be a tax subsidy to SS (a) because it does not go to the general fund (b) it would deprieve the Democrats of the ability to say that SS has not added one penny to the deficit.

This money cannot be an additional contribution because the money does not figure into future benefits - which is a core basis of the system.

It is a benefit reduction based on outside income.

Here is the link :

Social Security History

This response is from SSA :

Midway down the fourth paragraph is the following, “It is also important to note that funds raised under this provision do not go into the General Fund of the Treasury but into the Social Security Trust Funds.” If you proceed to the eighth paragraph, you will read the section that mentions, “It was argued that this introduced General Revenue financing into the system…”

 

[ttwtt78640]

In 1984, the IRS started collecting a means-test on Social Security benefits. The money is RETURNED to Social Security. Some mistakenly think it is a tax because it is collected by the IRS. But the money is returned to the system, not put into the general fund.

This money cannot be a tax subsidy to SS (a) because it does not go to the general fund (b) it would deprieve the Democrats of the ability to say that SS has not added one penny to the deficit.

This money cannot be an additional contribution because the money does not figure into future benefits - which is a core basis of the system.

It is a benefit reduction based on outside income.

Here is the link :

Social Security History

This response is from SSA :

Midway down the fourth paragraph is the following, “It is also important to note that funds raised under this provision do not go into the General Fund of the Treasury but into the Social Security Trust Funds.” If you proceed to the eighth paragraph, you will read the section that mentions, “It was argued that this introduced General Revenue financing into the system…”

I believe that 1984 law has since been changed as explained in the link below (on page 3 of 6).

http://www.actuary.org/files/Means_Testing_SS_IB.pdf

 

[Glen Contrarian]

I have a huge problem with the corpoate welfare.

BUT,

I have no problem with McD and WlMart paying minimum wage... They are an unskilled labor force getting an unskilled labor wage. Minimum wage is not designed to support a family. Get an education, learn a trade and leave the minimum wage gjobs to the high school kid for date money.

Yeah? How about going to Wal-Mart sometime and seeing who's actually working there. Is it kids trying to learn a trade? Hardly. Most of them are grown adults, and many of them are breadwinners of the family. And YOUR taxpayer dollars are going to support them because you can't demand that Wal-Mart pay their workers a living wage.

 

[cpwill]

here ya go

U.S. defense spending compared to other countries | pgpf.org

as much as the next ten combined.

So, yes, in fact, as I suspected - you had no particular reason for that figure whatsoever.

 

[cpwill]

You do understand that I said FROM A RECORD HIGH.... right?

Yeah. And your problem with that is that the reductions are not coming from a record high - but rather from a recent high.

That does NOT mean that the record high is today but that the reductions have happened from that record high.

:lol: what, from the 1940s, 50s, and 60s?

Do you honestly have any idea what you are talking about, or is this just one of those things that everyone in your party believes but no one ever goes and checks up on?

Actually I did. the proposal I quoted for popping the cap takes care of 85% - just like you said.

Of this year. But this year is not our problem.

But I then went even further and raised much more money saying that I would consider ALL moneys coming into a person pocket or accounts for FICA. And that would include lots of income that is not taxed today at the same rates that income tax is. So there is more revenue in my plan.

:doh

Here is the history of post-war revenue under a wide variety of tax brackets.

It's the orange line on the bottom.

Now, here are the projections for U.S. spending, driven by the entitlements:

Please point out to me any set of tax brackets on the first chart that can pay for the spending on the second. Any rates, up to and including the 91% top rates of the 50s.

Your "five extra points" isn't going to save the entitlements any more than the "let's try to cover the 2013 gap by 85% and see how that works" idea.

 

[JoeTheEconomist]

I believe that 1984 law has since been changed as explained in the link below (on page 3 of 6).

http://www.actuary.org/files/Means_Testing_SS_IB.pdf

The earning test is something different. The means test is on page 5 at the bottom.

I am not sure why the say that the tax code "Could be used". As you can see from the SSA links, it already is.

The other problem that I have with the piece is that it says that significant savings could be achieved without telling you what they are. It is unlikely that any means test could doubt the 27 billion that was recaptured in 2012. That is round-off in the larger picture of the system.

 

[ttwtt78640]

Yeah? How about going to Wal-Mart sometime and seeing who's actually working there. Is it kids trying to learn a trade? Hardly. Most of them are grown adults, and many of them are breadwinners of the family. And YOUR taxpayer dollars are going to support them because you can't demand that Wal-Mart pay their workers a living wage.

The "living wage" idea is not going to happen. Consider what a "living wage" really means. Either the minimum wage is more than doubled or each worker's pay is based on the number of dependents that they claim, by adding $4,020/year for each dependent, as does the federal poverty level.

 

[JoeTheEconomist]

I believe that 1984 law has since been changed as explained in the link below (on page 3 of 6).

http://www.actuary.org/files/Means_Testing_SS_IB.pdf

This piece is a connected piece. It says that Means Testing is a terrible idea.

Means Testing Is The Worst Idea

By the way thanks for the piece from the Academy of Actuarial Sciences. I don't agree but it is a useful piece.

 

[JoeTheEconomist]

Yeah? How about going to Wal-Mart sometime and seeing who's actually working there. Is it kids trying to learn a trade? Hardly. Most of them are grown adults, and many of them are breadwinners of the family. And YOUR taxpayer dollars are going to support them because you can't demand that Wal-Mart pay their workers a living wage.

Your point that we are forcing taxpayers to pay for the wage anyway is well thought. The idea that minimum wage is a solution is not. More than 1/2 of the minimum wage workers are not poor to begin with. Separately as wages rise, more workers will compete for the jobs so there is no guarantee that the poor person would even get to keep their new wage.

Minimum Wage Laws Just Keep People Poor - PolicyMic

"Increasing the minimum wage is more effective than providing traditional welfare." should be "We should ask whether increasing the minimum wage is more effective than providing traditional welfare."

 

[iguanaman]

You are struggling with the difference between deficit and debt. One measures indebtedness and the other measures net cashflows. They are different things, and clearly you do not see the difference.

The point was that "SS hasn't added a penny to the deficit". I provided a fact-check to dispute it. Your point isn't close.

It is sort of like the debt ceiling. That trust money was already spent and added to our debt. Now when the bill is due you claim you never saw the money. You are quite the huckster. Don't you think?

 

[JoeTheEconomist]

It is sort of like the debt ceiling. That trust money was already spent and added to our debt. Now when the bill is due you claim you never saw the money. You are quite the huckster. Don't you think?

I think you don't know the difference between the meaning of deficit and the meaning of debt. You use the words interchangeably, and Ron White is right. You can't fix stupid.

 

[274ina]

1. $600 a month working full time? The only thing I can think of that earns that little is waitressing before tips, since IIRC the minimum wage for waiters and waitresses is below $3. According to conservative economic dogma, though, if that's all you earn, it's YOUR fault, and you don't deserve any more than that.

2. Perhaps you should read again why we have SS in the first place:

Middle CUT OUT

Before the creation of Social Security, some Americans had private or state pensions, but most supported themselves into old age by working. The 1930 census, for example, found 58 percent of men over 65 still in the workforce; in contrast, by 2002, the figure was 18 percent.

The elderly also relied heavily on their families. ''Children, friends and relatives have borne and still carry the major cost of supporting the aged,'' the Committee on Economic Security, the
So...if you're having economic difficulties NOW, how do you think you'd be doing if you were having to feed and shelter your mom and dad, too? Of course, you may already be doing that...but it's something to think about if you've got kids - without SS, you'd be a real burden on your kids...and as the experience of the Depression shows, none of us (except the super-rich) can say for sure that we're going to have enough money to not to have to depend on our kids when we're old.

But that system fails when the next generation is expected to "compete" with slaves. Wages have been crushed for 30 years.

SS has increased for 40+ years.

Now those that do nothing and own everything, get paid more than those who are working.and cant even afford a crap apartment.......................

 

[iguanaman]

I think you don't know the difference between the meaning of deficit and the meaning of debt. You use the words interchangeably, and Ron White is right. You can't fix stupid.

You are the dunce. You can't understand that deficits were reduced by using surplus SS money for 30 years but the money was still owed so it added to our debt. So...
Deficits add to our debt UNLESS the deficit comes from redeeming trust fund IOU's which were already added to our debt when purchased. Redeeming trust fund T-bills actually reduces our debt because the IOU was paid off. Too complicated for you?

I had a similar conversation with another dunce who claimed the Clinton didn't pay off any debt because the debt didn't go down. That was the same story, Govt. trust funds add to our debt when they purchase T-bills with their surplus and therefore the debt did not decrease under Clinton even though he ran a $200 billion surplus.

 

[haymarket]

So, yes, in fact, as I suspected - you had no particular reason for that figure whatsoever.

I gave you the figure.
You challenged it.
I provided the source.
Live with it and get over your prejudice against baby boomers.

 

[haymarket]

Yeah. And your problem with that is that the reductions are not coming from a record high - but rather from a recent high.

You really do miss the point... or in this case points.

We spend more on defense spending in this country that the next ten nations combined. You questioned this and I was happy to educate you on its reality.
We can institute some steps to stop the shortfall in social security.
We can further have a national debate about just what the American people want to do with three or four or five billion in tax revenues next year or five years from now or twenty years from now.
I strongly suspect that when we do have that debate, the American people will come out strongly for saving SS and honoring our commitments to working Americans.

 

[haymarket]

Your post said "everyone" not 'everyone making a dollar." I quoted you - its clear - now you change it to fit your socialist agenda but the fact is you lied when you said tax everyone (which I agreed with).

Can you tell me who in America does not make even one dollar outside of children who are not paying taxes now anyways?