Despite distrusting Mike Allen’s version of events at all times, there’s no question that the Administration resurrected a deficit panel that the Senate killed, and the President staffed it with a number of people who would be open to Social Security benefit cuts. And that set of decisions is bearing fruit on the panel, according to the Wall Street Journal. This one deserves a close reading.
A White House-created commission is considering proposals to raise the retirement age and take other steps to shore up the finances of Social Security, prompting key players to prepare for a major battle over the program’s future.
The panel is looking for a mix of ideas that could win support from both parties, including concessions from liberals who traditionally oppose benefit cuts and from Republicans who generally oppose higher taxes, according to one member of the commission and several people familiar with its deliberations.
In addition to raising the retirement age, which is now set to reach age 67 in 2027, specific cuts under consideration include lowering benefits for wealthier retires and trimming annual cost-of-living increases, perhaps only for wealthier retirees, people familiar with the talks said.
On the tax side, the leading idea is to increase the share of earned income that is subject to Social Security taxes, officials said. Under current law, income beyond $106,000 is exempt. Another idea is to increase the tax rate itself, said a Democrat on the commission.
Four of these five ideas hit the middle class and the working poor directly. The retirement age increase is a benefit cut. Means-testing will, as has been said for years, turn the program from social insurance into welfare, subjecting it to more and more cuts as only the vulnerable will be impacted in future years (and I like the “perhaps only for wealthier retirees” regarding the COLA cuts; I’ll believe that when I see it). Increasing the payroll tax rate without increases to the cap would fall squarely on the middle class and below.
The only idea in there that makes any sense is to capture the amount of payroll originally envisioned by the plan. The incredible stratification between rich and poor has dropped the payroll tax well beyond the expected 90% level of income. You could lift it completely – or put a donut hole from $106,000-$250,000 and tax the upper incomes thereafter – and basically solve the entire problem.
But this is a panel requiring consensus, and given its makeup the consensus will fall under cuts. Republicans on the panel are playing it coy, with Rep. Jeb Hensarling (R-TX) saying he wouldn’t rule anything out at this stage because then “the thing blows up before it has a chance to work,” but saying expressly that he opposes tax increases. Like that’s not already known. If the commission releases recommendations at all, they’re going to be cuts only. Bank on it.
Alice Rivlin, who’s been going after Social Security for two decades, thinks that both sides will sign on to tax increases and benefit cuts “if the other is willing to do it.” I don’t think there’s a chance of that in the world; she obviously hasn’t noticed the modern Republican Party.
The story also painted the White House and, horrors, AARP as open to a deal. They back up Allen’s reading that an agreement on Social Security would “build confidence”; I’m not sure to whom. Here’s the AARP quote:
“We’re prepared to be quite supportive of a real engagement on the issue,” said John Rother, director of public policy for AARP. Acting sooner allows for changes to be made gradually, he said, and will reassure younger workers that the program will be there for them. He dismisses those who said they can never support benefit cuts. “I know all these people personally and they’ll say we have to be hard line now to influence the debate…I kind of take it with a grain of salt, these emphatic statements.”
I love this notion that, the system is in “crisis” and faces benefit cuts in 30 years, so let’s cut benefits now. Brilliant! Adequacy of the program to keep seniors out of poverty hasn’t occurred to the nation’s largest senior advocacy group, I guess.
Interestingly, nobody on the commission is talking about privatization, the soccer ball that Democrats have liked to kick around on the campaign trail. That’s simply not the threat right now.
Jan Schakowsky offers the wishful thinking argument:
“People would rather pay more or have revenue raised than cut the benefits,” said Rep. Jan Schakowsky (D., Ill.), a commission member. She said she was fairly confident a proposal that included benefit cuts would not garner the needed 14 votes.
I’m not.




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You can’t tax wages without putting a cap on how much gets taxed since there is a cap on how much gets paid out. To do otherwise is unfair.
A stealth cave-in occurred in Washington yesterday but won’t be announced until after the mid-terms.
“Let me be clear. No one wants to discriminate against the helpless, the elderly, the sick or the weak. But SS is a fundamental right of all Americans and, in order to protect it, we must take minimal steps to ensure its future. It is a fact that, due to improvements in medical technology, Americans are living longer….”
What’s the point of living longer if you work until you drop? If you’re a poet or physicist, maybe. Take an 8 hour shift with a jack-hammer. That’s my idea of ‘being clear’.
Pols wouldn’t need so much money if the worried less about their future and more about ours.
Rome wasn’t built in a day and its death took a lot longer. But it started when the rich ignored the suffering of the poor.
The charm of ‘bread and circuses’ is wearing thin.
Why are the liberals, the protectors of Social Security benefits on Obama’s Commission — why are they the stupid liberals like Schakowsky? She’s never shown herself to have any understanding of events right before her; this Commission seems to repeat that pattern.
If the people protecting our benefits can’t see that there are 14 votes ONLY for benefits cuts, we’re doomed. Or at least Obama’s Commission is. Which isn’t a bad thing entirely, I guess.
Where’s Grover? This thing needs a bathtub, stat.
Someone remind me again, why did we vote for Obama?
Republicans would NEVER get away with cutting SSN. So the Dems are going to do it themselves?
Always interesting to read about candidate Obama’s ideas –
http://www.ontheissues.org/economic/barack_obama_social_security.htm
The Dems refusal to stand against the President and demand there be no cuts to Social Security (less than 20 signing the pledge?) is all the proof you need that they don’t deserve our votes.
Very nice kickoff to Obama’s reelection campaign. Good luck with that, you stupid prick.
Can anyone explain to me why the only information that is ever discussed about this “Deficit Commission” is about Social Security which has no effect on the deficit.
Cut it or don’t, raise the taxes for funding it or don’t, kill it or save it. It won’t have any effect on the deficit no matter what you do or don’t do.
So, what does this commission plan to do about the DEFICIT, since that what they were appointed to work on?
I believe that Pelosi said yesterday that SS would not be cut.
I’m not so sure that’s not the threat. Like Rummy, I put more than a bit of credence on absence of evidence being evidence of presence. IOW, the fact that the commish is secrud, and nothing has leaked about privatization, makes me suspicious that a great deal of effort is going to that end.
“Clinton called Obama’s proposal to raise Social Security taxes on earnings over $97,500 per year, the current upper limit on which any tax is levied, a trillion-dollar increase on “middle class families.” Clinton said, “I do not want to fix the problems of Social Security on the backs of middle class families and seniors. If you lift the cap completely, that is a $1 trillion tax increase. I don’t think we need to do that.”
Taxing all earnings would indeed amount to a $1.3 trillion increase over the next 10 years alone, according to estimates by Cato Institute Social Security experts. A similar estimate comes from Citizens for Tax Justice, which figures the measure would bring in $124 billion per year.
Obama defended his proposal by saying it would fall only on the upper class: “Understand that only 6% of Americans make more than $97,000–so 6% is not the middle class–it’s the upper class.” ”
Above from Factcheck.org AND http://www.ontheissues.org – With this one simple measure, we could increase the social security benefits and possibly reduce the retirement age! And wouldn’t an increase in benefits be a nice little boost to the economy?
No one is talking about taxing income at 100 percent or more.
Perhaps it is time to add another standard for use in setting tax rates.
The main standard now is the ability to pay.
A second standard should be added to make a matrix. Support for big government programs.
In other words, the highest rate would be for those with a high ability to pay and a high support and belief in big government programs. The lowest rate would be for those who have a low ability to pay and don’t support the programs.
If you really want more Social Security and more Health Care, you ought to be willing to chip in a bit extra for it. That’s the theory behind it.
This would give the best index of fairness we have yet had in the tax system. If you like it and want more, it is only fair that you pay more.
Q: How should we fix Social Security and other entitlement programs?
OBAMA: If we get our tax policies right so that they’re good for the middle class, if we reverse the policies of the last eight years that got us into this fix in the first place and that Sen. McCain supported, then we are going to be in a position to deal with Social Security and deal with Medicare, because we will have a health care plan that actually works for you, reduces spending and costs over the long term, and Social Security that is stable and solvent for all Americans and not just some.
McCAIN: What we have to do with Medicare is have the smartest people in America come together, come up with recommendations, and then, like the base-closing commission idea we had, then we should have Congress vote up or down.
… so AllBark Obama took McCains position. And he also had a massive fail on what “his plan” was – reducing health care costs/etc.
Barack… like the “base closing”, only here you could call it something like “the life closing”.
You have that just exactly backwards. The cap on SS withholding needs to be completely eliminated, period. However, if you’re so concerned about the integrity of the fund, I would recommend you waive and all claims to your portion, and contribute it back forthwith.
Picking idiots seems to be SOP around the WH shop…and it really doesn’t seem to matter as to the particular issue. Of course there are exceptions, but you pretty much have to send out a search party to find them.
Do. Not. Feed.
Differentiating between wealthy retirees and other retirees in treatment opens the charge that Social Security if fundamentally a welfare program. That is the framing that Republicans want to establish in order to end the program entirely.
Must capture new revenue; no new Social Security Comission
OBAMA: We’re going to have to capture some revenue in order to stabilize the Social Security system. You can’t get something for nothing. And if we care about Social Security, which I do (yeah, since its a shit load of money), and if we are firm in our commitment to make sure that it’s going to be there for the next generation, and not just for our generation, then we have an obligation to figure out how to stabilize the system. I think we should be honest in presenting our ideas in terms of how we’re going to do that and not just say that we’re going to form a commission and try to solve the problem some other way.
CLINTON: With all due respect, the last time we had a crisis in Social Security was 1983. President Reagan and Speaker Tip O’Neill came up with a commission. That was the best and smartest way, because you’ve got to get Republicans and Democrats together. That’s what I will do.
OBAMA: That commission raised the retirement age, and also raised the payroll tax. So Sen. Clinton can’t have it both ways.
… can I get a Hell No? …apparently not. Well how about a Fck you?
Don’t forget that we live in a “Nanny State.” RushGlenn say so, and on this point I completely agree with RushGlenn. Truly I do.
The upper classes (as defined by Obama) are getting a cheap ride at the expense of the middle and lower classes. The FICA tax falls disproportionately on those making less than $97k, and the less wealthy get less in Soc Sec when they can finally collect it.
Yes, I am solidly against lower and middle class workers being the “Nannies” to the upper classes on Soc Sec. Raise FICA to a higher cap (much higher) or have no cap. Problem solved, case closed.
I also agree that Soc Sec has nothing to do with the deficit. This is some kind of Orwellian double-speak and that’s for sure.
Obummer: the lousiest POTUS on record. Lousy.
Also disappointed in the AARP, who often show more sense than this. They have certainly sold out as well.
My employers always put a cap on my wages, not on their own.
See. Eliminating the cap balances things out.
I bet this was leaked by Obama as a desperate attempt to give the Stock Market a boost. After all why release any of this before an election unless your trying to loose?
The WSJ audience however is a microtarget group that would love this news. I think Mark Penn is back working for the Dem’s again.
and not only did he form the commision – but he also stacked it with people intent on moving its destruction along. And not only that but so they could primaily:
- have more money (war, etc) for themselves
I could support that idea got numbers to flesh it out?
There’s bread?
6% may be upper class – but sad fact is that only the top 1% enjoy any security. Most 94 – 99%’ers can just afford a slightly better car, and if their job fails so do they. That being said, nice problem to have – but your income really should be weighed against where you live. And if we are going to start with “upper class” why not start with the top 1%, and also put non-wage income on the table.
What happened to the “why are Americans so unhealthy” whine? You sure don’t hear THAT one anymore. Now we can work until 70
Thanks. Noted.
I am totally stealing your “AllBark Obama” – that’s a hoot!
Because the debate is fixed. We could end both wars and cut the debt. We could put a tariff on foreign goods, raise money and protect our own industry at the same time. We could save money with National Healthcare and drug price controls. We could insist that MPG on cars and trucks get raised 10%. We could create green power jobs and get people working.
After all the less people working the less people paying into Social Security.
Why not?? Seems to me it is inherently unfair as the 100k+ people pay SS at a much lower % rate than the bottom tier does. The top tier can afford to pay more while the rest of can barely get by paying the full 6% of our earned income.
Remove the CAP now and SS will be good to go forever at FULL Benefits!
It’s not easy for people to think about long-term issues and that’s a big problem.
That is a good idea worth exploring more how could we make it work? Also the minimum wage should be adjusted too.
Just thought of it, please do use it.
More insurance money for AARP?
It’s not easy for
peopleelected officials to think about long-term issues and that’s a big problem.There, fixed it for ya’.
This does make good sense. Base taxes and minimum wage basically on cost of living, right? Although it might be a nightmare to have to change it every year…
It seems like it could be gamed – but I have to think people living in NYC making 50k are hell of a lot less well off than someone making 50k in Hope, Arkansas.
I kind of personally like the idea of donught holes (rough numbers):
0 – 45k : 0%
45 – 120k: n%
120 – 200: 0%
200 – 300: n%
300 – 400: 0%
Again, whatever the numbers, but make it levels. That way if you are finally (one of the handful of people in the entire word) going into the 300k or 400k range – you either get a nice break, or you have to pay in again (but are making a boatload more money).
I also like the idea to tax financial transactions:
- HTF: 1 cent per share
- Joe six pack trading: .0001 cent per share
HTF meaning High Frequencey/computer trading. I got the acronym wrong.
Hypothetically speaking by your theory if somebody makes $10,000 a year and the tax bill is $1,000 and somebody else makes $1,000,000 a year with a tax burden of $1,000, it is a fair system. So the poorer person pays 10 percent of his/her income while the wealthier person pays 0.1 percent yet they get exactly the same benefit when they retire, even though the poorer person had fewer opportunities to save for the future, just trying to get by. That’s why this system is called “regressive”.
If you want to use where you live to index your income, I think you need to have a lot more variables in it than just your location. How about also adding how much house you “choose” to buy, what kind of car(s) you choose to buy, how much you “choose” to spend on electronics, how much you “choose” to spend on vacations, how much you “choose” to spend on entertainment. If someone is in the top 6% and “chooses” to live paycheck to paycheck, they are doing something very wrong with their budget.
The father of a friend of ours tried exactly that. He was self-made man and felt he didn’t need Social Security and would have preferred someone more deserving get his share. He died a few years ago, but he was never able to stop the payments.
The U.S. public is nothing more than frogs in a simmering pot. Benefits will be cut, retirement age raised and new middle class tax hikes to “fight the deficit.” AllBark (how appropriate) Obama will go before the nation and sell a gullible public what a wonderful thing these are and a corrupt and complicit corporate media will saturate the airwaves on the glowing merits. The public will not realize what’s really happening until finally, near the end of the week, with money a little tight they decide they’ll buy a can or two of cat food just to “give it a try.” Gradually they’ll find they have acquired a “taste” and will be stocking up on a weekly basis. No anger, no outrage just adaptation. A nation of sheep and lemmings.
Well that’s change. During election Obama said he was for an open government with all stake holders getting a seat at the table. Now he has behind closed door commissions.
All total bullshit. First, the only change to COLA should be that it be based on reality. If inflation is nonexistent, then no COLA. As it is, people EXPECT an annual increase in pay, benefits, etc, because they assume that inflation ALWAYS exists and that means pay/benefits must increase annually and automatically. Not true.
First, we need a valid and reasonable measure of actual cost of living. The CPI is bullshit. Total, unadulterated and unmitigated bullshit. The CPI ignores the two most important aspects of actual living: energy prices and food prices. NOTHING matters except these two items being first and foremost in any calculation of cost-of-living. Nike, Levi, iPhone, TV, etc, costs are irrelevant. They are pure and absolute luxuries that are not in any way required to live thus they should be downplayed tremendously in any official calculation of cost of living (inflation). We all also must accept that there is such a thing as deflation. Deflation should mean that pay and benefits (all over society) should DROP rather than hold steady or go up. Deflation means costs are going down. We are currently in a deflationary period that may be mild/short or may become drastic. On the other hand, what deflation we are seeing now may disappear quickly and inflation may take hold, which would require pay increases and benefit increases to keep up. Either way, a valid measure needs to be used.
Next, no benefit cuts hidden in increased retirement age. NO NO NO! The ONLY thing that needs to be done to fix the mild issue of long-term Social Security solvency is removing the cap on taxable income. Ta-da! Fixed for perpetuity! No cuts, no means testing, nothing but eliminating the BOGUS cap.
The real fix for government budget problems is to deal with medical costs once and for all. The “reform” that recently passed does absolutely Jack Squat to deal with the real issue in healthcare. We need a REAL reform (Medicare for EVERYONE) with the concomitant accepting of reality by certain uber-rich medical doctors that they have to take in less pay and lose the god complex entirely. They are a SERVICE provider and that is their main mission. The Hippocratic Oath says nothing at all about making big bucks baby! Obey your friggen oath or get into another line of WORK.
Along with all this: dismantle the exploding US empire before it self-detonates (as ALL empires do) and brings the entire edifice down on all our heads. Close, say, 450 bases overseas (just over half of the current number). We really don’t need like 20 bases(!!!!) in Japan any longer. WWII is LOOOOONG over and we have no business having such a presence there. Perhaps we could do with merely ONE base in Germany (handy medical weigh station) and ONE in Britain and ONE in Spain and ONE in Italy, etc. Reduce the size of the US embassy complex in Iraq to be the same size as our average embassy in any other country on earth. Exit Iraq as quickly as possible (based on REALITY rather than empire holdouts who NEVER want to leave and will make up any excuse for why we need to stay, stay, and stay). Get the F out of Afghanistan.
Cut Congressional pay and benefits before ANY benefits for real humans (that would be anyone NOT in Congress or the White House). Let’s eliminate the VERY posh and cushy Congressional pension system. Let’s eliminate their VERY nice healthcare setup. Make them depend on Social Security AND on the open market for their healthcare. What WE suffer, they too must suffer under.
Raising the retirement age is the most regressive way of cutting benefits. Not only will those who will depend the most on Social Security in retirement have to pay in longer they will, because their longevity will not increase, receive its benefits for a shorter period of time.
Also can we stop with this means testing will turn Social Security into welfare crap. Taxing is about achieving certain social purposes by allocating resources to them. That’s it, period, finito. This idea that if you means test the high end of Social Security, i.e. those who don’t need it, that some form of malevolent pixie dust will enter in and turn the system into, gasp, welfare is beyond ludicrous. Talk about buying in to conservative frames.
The “raising the cap” flim flam is the public option of this latest atrocity.
Blue Texan’s regularly scheduled post is ready: Clap Your Hands, Say “Wha?”: DNC Launches New Midterms Ad
Poorest citizens already have a much lower life expectancy that those who are better off financially. So current system already embodies that regressivity, and raising retirement age will exacerbate it.
Yeah, my landlord and grocery store always lower prices when the CPI shows deflation, so any income I get from Social Security should surely reflect that official number.
People make plans based on their expectation, and the government made a promise that we’d get our money back; why is this so hard to understand?
But more Americans will have the dignity of work for a longer time, Citizen!
Agreed. This reminds me of the old saying about the definition of a patriotic citizen: one who pays into Social Security all their life and dies on their 65th birthday.
I think you got a Diary :)
Whoa Nelly. First, I decry the current CPI system which IS total bullcrap. What is included in that “official” calculation is ever-shifting by the Fed, the Treasury, the US Government to reflect, as much as possible, hardly any inflation. The CPI is bullshit and must go. The reason it is bullshit is it ignores the two MOST important items any anyone’s life, energy and food costs. My argument was that we need a revamped system that accurately reflects reality as it is rather than reality as it is politically comfortable to display. That means food and energy get counted first and foremost.
My other point is that inflations is NOT a rule. There is no natural law that requires that inflation ALWAYS occur. Whatever measure we use for REAL, on-the-ground inflation measure be done so as to show NEGATIVE numbers when appropriate (deflation). Deflation and inflation happen, just like shit happens. The measure should reflect reality as it is no matter what and that should rule when and whether COLA go up or down. During deflation, the REAL CPI would be negative and ALL pay (CEO down to janitor) should hold or go down with it to maintain the equivalent buying power.
Otherwise, I invite anyone to show me the universal physical constant or Natural Law that requires that inflation must always occur and it must ALWAYS be positive.
Please send link to the 20? I’d love to see if mine is there….thank you.
Things has an explanation @29. I just want to expand it a small bit. If obamarahma had introduced the catfood commission as what he intended, attacking SS and Medicare, it would not have gone over with the public. Instead, he introduced it as an attempt to get the deficit under control. The deficit should be subject to vigorous debate in the House, but they are afraid of the subject so they want someone else to make the hard decisions and show what should be done. Then the House will just say they had to support the recommendations.
From the very beginning, alan simpson was very outspoken that SS and Medicare were going to cause all kinds of problems for the deficit. He has been very sour toward those that thwarted him before when he tried to cut SS. Actual deficit impact problems (war, mic profits, etc.) are not and will not be considered. The whole “deficit commission” name was a hoax from the start.
Especially in times like these when jobs are scarce.
Unemployment benefits can be extended and extended and extended…which kinda defeats the point of cutting the Social Security benefit by raising the age of continued unemployment (which is what it is to raise the retirement age).
The “savings” from cutting Social Security are lost in perpetually extended unemployment benefits up to the age of official retirement.
They say Warren Buffet still lives in the modest house he bought in the early 1970s or so.
Here’s the real fix to US economic problems and the very real problem of income bifurcation in extremis. It has nothing at all to do with cutting benefits, slapping the wrists of the finance leach sector, etc.
Yes, the CPI is total bullshit. I completely agree! And I am becoming a believer in dismantling the empire. I’ve read a couple of very interesting articles about it.
Ummm, the only main things that are deflating are the values of peoples’ houses, which to those who paid more for their house than it is worth, becomes a net loss and therefore increases their cost of living to cover that loss and also peoples wages which makes up for any ‘deflation’ you seem to see. Durable goods are at best holding steady. Food prices are creeping higher all the time. Energy prices are wildly variable, but haven’t seriously fallen from the new normal that took a gallon of gasoline from 1.20 to 2.85 in less than 4 years starting from 2001. Deflation also increases the impact of debt as debt is worth more if the value of the debt (in dollars) loses buying power. Another net cost. Deflation has serious negative consequences on the middle class just as inflation does. About the only thing you got right is CPI.
The other issue with raising the retirement age is that is encourages and/or forces people to keep working into their older years. That might be a choice that some would make anyway (almost always white collar jobs), but it then results in less jobs opening up for the younger generations.
We are facing younger generations becoming “lost” generations. Already those graduating from college – often with high loans to pay off – who cannot find jobs bc there are none (call them lazy if you like, but there aren’t jobs out there). Our troops hopefully are (mostly) starting to return from Iraq, but there are no jobs for them upon return.
If you force older workers to stay in their jobs, then it just means less job openings for the younger generations. This, too, is a mugs game, which pits the oldsters against the youngsters and is another variation on the class war perpetrated on us “small” peeps by the obscenely wealthy 3%, who are never satisfied with what they’ve already ripped off.
My real question is how can someone like Alan Simpson be taken seriously by anyone, even the media, when making a claim that social security has anything to do with the deficit? The two aren’t related and anyone who claims that they are should be roundly ridiculed in the mainstream press and kicked off any “deficit” commission.
“The only idea in there that makes any sense is to capture the amount of payroll originally envisioned by the plan. The incredible stratification between rich and poor has dropped the payroll tax well beyond the expected 90% level of income. You could lift it completely – or put a donut hole from $106,000-$250,000 and tax the upper incomes thereafter – and basically solve the entire problem.”
The original wage tax rate was 1% in 1937 and held for 12 years. Today the OASDI piece is 6.2%. If you went back to the “originally envisioned plan” it would mean people making up to $620,000 a year are still paying their “fair share.” Since the medicare piece was broken out, everyone up to the highest wage earner in the country at maybe 10′s of millions of dollars is now paying 1.45% of that income, thus more than the “original plan” of 1% total. Yet, their benefits are still capped no matter what they contribute.
The facts are that even someone who paid the max for their entire working life and if that was 49 years from age 18 to 67, and you convert those contributions to today’s dollars by the CPI (e.g. $1 in 1937 is $15 today) they recieve benefits higher than what they contributed. Everyone already get’s more than what they contributed unless they die with no survivors.
None of the money is invested, it does not earn a rate of return so it can’t even increase in value to cover the CPI adjustment.
Folks, this can’t work. It has miserably failed. It is a ponzi scheme.
Thus the issue truly becomes, should one person be forced to pay for another person’s retirement; or anything else for that matter. We od not have a gap between rich and poor. For the most part, it is a gap between the ambitous and the non-ambitous.
Maybe people should take a little personal responsibility for their lives. Maybe live within their means, not abuse drugs, alcohol and tobacco, take advantage by learning something and graduated from the public schools, availed themselves of the student aid available or joined the military and leveraged that to get a college education. I am all for freedom and have no problem if you want to party like a rock star. Just don’t ask me to pay for it now or later.
I enjoyed a can of tuna for lunch today. I think it was cheaper than a can of cat food. Bon Appetit!
When did the media ever do anyting factual anymore? The media is all run by the corporations to push out the fictional messages that they choose to push out.
The full list of pledge signers, so far, on the flip:
House Democrats:
Grijalva, Woolsey, G. Miller, Pelosi, Filner, Grayson, Klein, Loebsack, Halvorson, Schauer, Conyers, Pomeroy, Shea-Porter, Maffei, Kaptur, DeFazio, Kanjorski
Senate Democrats:
Boxer, Sanders, Feingold
House Democratic candidates:
Bill Hedrick (CA-44), Francine Busby (CA-50), Ann McLane Kuster (NH-02), Manan Trivedi (PA-06), David Segal (RI-01)
Senate Democratic candidates:
Rodney Glassman (AZ), Roxane Conlin (IA), Elaine Marshall (NC), Jack Conway (KY)
Who is the Government? Isn’t it us? We elected them. So you elected people to make a promise to you to pay you back; in fact, to pay you more than you could have possibly contributed.
I guess the old addage to thine self be true is correct.
You make a point, but this “living within your means” message doesn’t just apply to the “lower orders.” I see a whole lot of upper income earners living way beyond their means, and then whining and crying like this about teh poorz ripping them off. And these same upper income earners often have not put enough aside for their own retirments – and/or they’ve been ripped off by the Wall St casino – and they’re now beefing about the temerity of public secter employees to have contributed to defined benefit plans called pensions. Many upper income earners that I know are holding out to rely on Soc Sec bc of their own lack of planning and living beyond their means.
Your messages works both ways. Chew on that and bon appetit.
Sure. it’s on the tables of the Senators. You are welcome to catch the crumbs. All you need is 60 votes.
Social Security is not now and never has been a “plan” where you pay in an amount and then get YOUR MONEY paid back to you in retirement. It’s an insurance plan. You pay for your “insurance”, and you get your benefit. It isn’t a “savings” plan where they take your money and hold it for you until retirement.
And, for you to take the statement of the original intent of taxing 90% of all US income and turn it into what you did…. a claim that they were talking about some original intent of never having a tax about 1% is ridiculous.
What that statement is pointing to is that the Cap hasn’t kept pace with the shifts in income. It’s to the point now that much less than 90% of all income in the US is being taxed for social security. And, if the cap were adjusted to bring it back in line with the original intent of 90%, all would be well.
I can have a “dream” can’t I? We all need a dream.
“Maybe people should take a little personal responsibility for their lives. Maybe live within their means, not abuse drugs, alcohol and tobacco, take advantage by learning something and graduated from the public schools, availed themselves of the student aid available or joined the military and leveraged that to get a college education. I am all for freedom and have no problem if you want to party like a rock star. Just don’t ask me to pay for it now or later. ”
Even if 100% of the population lives the way you want them to re drugs, alcohol and tobacco and also gets a college degree, some of them still will have to end up working at McDonald’s type jobs. There aren’t enough good jobs to employ everyone. So, what will your advice be for all of them who followed your rules and still end up in low wage jobs barely getting by? Will you just say “oops, so sorry, you just didn’t get a lucky break”
They will all fuckin’ fold. Every last one of them. For all the necessary proof, see Option, Public.
And oh, yeah, the candidates won’t even be sworn in until a month after the vote happens.
The original plan as codified was to take a trivial amount from wage earners to pay a modest supplement so that unfortunates would not starve. 1% is trivial. 7.65% is not trivial.
Insurance is voluntary. It collects premiums from people and invest the money in businesses through stock, bond, other debt and funds. Insurance pays out benefits to beneficiaries of the accumulated premiums plus return on the investments less the administration costs and profits the insurer can get. Since social security forces people to contribute, does not invest what it takes in and pays out more than it takes in by design; it is nothing like insurance. And, not that I believed them but the annual statements I got from Social Security (started by legislation of Dem Pat Moynihan)until recently stated that my contributions were an investment, held in trust (remember the Gore Lockbox) and listed the annuity I had earned so far.
To try and rationalize this debate to “Original Plans” and “intent” is specious anyway. It is simply one group of people trying to take the property of another group of people. Theft, nothing more and nothing less.
There will always be truly unfortunates who need help. Quite a few less though if they did what I recommend (and BTW to a large part what I did.) I would help them. I help people now (including with money) although I have no legal obligation or am otherwise forced to do so.
And, it is not a frivolous argument that when you give someone a handout, you enable them and they are not motivated. I believe that is why we have so many people not doing what I recommend. Why should they?
The original plan was to take a “trivial” amount, as you call it, from a total of 90% of all income earned. To match that original intent, you need to raise the cap in order to go back to taxing 90% of all income earned.
No one is taking anything from anyone. Everyone who ever worked and paid in gets social security when they retire.
And, like it or not, the name of the program is Social Security Insurance. SSI
It would be a really hard sell to privatize SS given the returns on the markets these past 3 years. I also think that is political sucicide for the dems as is a benefit cut. But what the heck you never know for sure. Maybe they want to use it as a chip to get the repugs to take back the tax cuts. Good luck with that one too.
People who work in lower wage jobs are not “unfortunates” who need “charity”. They are a vital part of our society and our economy and they deserve to be guaranteed a social safety net for doing the jobs they do that society as a whole isn’t will to pay a living wage for.
Again, even if the nation didn’t have one drug user, alcoholic or partier, there still would not be enough high paying jobs to go around and there would still be a need for low-wage workers. Do you propose we just import them all and when they “age out”, just ship them back to where they came from?
Living within your means is defined by not requiriong other people’s money to sustain your chosen lifestyle.
When rock stars do “party like rock stars” they are doing it with their money not someone elses and no matter how outrageous, it is within their means. That is called freedom. They are only rich because people buy their product, completely voluntarily. Rather than buying their product than coming back later to tax the money back out of them, if people are jealous then, don’t buy the products.
By all means if someone is making money criminally, including tricking people, arrest them, sue them, take it back. But if you feel a CD, a sports ticket, a restaurant meal, a computer, whatever, is worth enough that you exchange your money for it, and that person(s) providing what you want does it for thousands and millions of people and is “rich.” why do you deserve a penny back? Will you give back any of the stuff you got?
As I posted yesterday, the pledge is meaningless. Obama’s Catfood Commission will craft something to get all of the Republicans to vote for it, along with a portion of the Blue Dogs. That’s all. Hell, I’ve seen quotes from Dem’s that aren’t even Blue Dogs in favor of benefit cuts to Social Security. It’s going to happen.
The only open issue is how painful we can make it at the ballot box for these people, Obama in particular.
I think it is more than a catfood commission. It also includes the tax cuts. The repugs are not gonna agree to the lapse of the tax cuts unless they get something in return and Obama does not want the tax to go up on the middle class which is what will happen when the tax cuts lapse. In such a case, Obama and the dems are toast in 2012. So, it seems to me there will be a quid pro quo here somewhere.
They are sure taking it from me. I don’t hide the fact that I do not want to pay it and do not want it withheld from my check. It is only by force that that money is taken from me.
Anyone who after more than a few years has to work at McDonalds is unfortunate. It means in the whole of society, including you that they can not offer anything that you yourself would be willing to pay them more for. If they are such low IQ or are somehow otherwise disabled that that is their potential, I do not look down on them and I do feel compelled to personally help them. It is charity. Look it up in the dictionary. And, there is nothing wrong with it. Both the receiver and the giver enjoy a better insight into what it really means to be human. BTW, when one, rather than donate of their own fortune and talents, takes someone else’s money by force or deceit to give to an unfortunate especially when they try and take credit, that person is not noble, they are selfish and a thief. A schmuck, if you will.
I think as originally envisioned SS benefits were intergenerational, meaning you pay for someone else today and someone else will pay for you tommorrow. It never had a return on investment or protection against inflation, nor should it, under the way it was set up. I don’t know if that is your definition of a ponzi scheme, but you never could expect to get back exactly what you paid in.
That is bs and if you don’t know it, then I’m here to tell you.
Thought so.
Not my definition, that is the only definition of a ponzi scheme.
Too bad it does not work but it just does not.
I do think it is sick to ask today’s children to pay for us. I was raised that you paid for your children to help establish them in the world. Not the other way around.
Rhetorical question: Why, if there’ll be no need to cut benefits or raise rates until 2042, are they worrying about it now? Is it really because the cuts/raises can be more gradual?
Notice that although the Trust Fund won’t go broke until 2042, expenditures will start exceeding revenues by 2017, at which point the Trust Fund will need to begin redeeming the special U.S. bonds into which it has invest its past surpluses. That means that the government will have to start buying those bonds back, which means that it will have to come up with a couple of trillion additional dollars between 2017 and 2042 (thereby adding to the deficit). And it has only three ways to come up with that money: (1) borrow it, (2) tax it, and/or (3) print it.
The deficit hawks are afraid that when the bond vigilantes see this debt, they’ll blow the whistle and nobody will buy U.S. bonds any more. And they’re afraid that printing this money will cause inflations. And they hate being taxed. What to do?
you keep ignoring the overall point in my posts.
If everyone in this country had a college degree, some of them, through no lack of IQ or motivation, would still have to work at lower wage jobs. There are not and never will be enough well paying jobs for everyone to have one. PERIOD
Hey, I don’t like what all of my taxes pay for either. But, if you want to live in a society, you have to take part in all of it.
I don’t have any children and I don’t particularly like paying “school” taxes. But, I do realize that an educated population is beneficial to all of us whether we have children or not. Likewise, a population that has a guaranteed safety net in their retirement is also beneficial to all of us. And, if you weren’t paying for it directly through payroll taxes, you would be paying for it in other ways indirectly either in higher prices for everything to pay for higher wages or in more general taxes for more welfare and in many other ways.
And another verse in the long line of “I’ve got mine, fuck everybody else.”
Thanks for sharing. Always nice to point out all the various ways of saying that same thing.
Marktaree – Wow – a few posts in one thread – and enough errors/lies/mis-information for a month of posting. But watching Fox does that to some folks I guess. But I like cregan’s idea of moving from “the ability to pay” to a “do you support (actually no one would say yes to anything in the tax form questionnaire – so one must use “relative benefit from – compared to others”) the current budget – and as almost all programs are corporate welfare and security for the assets of the rich, with social programs about 6% of the budget, those under 100,000 a year and a million in assets would pay – using 50% as the target on income and 10% as target on assets – 6% of 50% or 3% of income and 0.6% of assets, while those making more than 100,000 and more than a million in assets would pay 50% on income and 10% on assets each year. Yep – that works for me.
As to marktaree’s “I have no legal obligation” tell that to those of us that have paid for wars to protect the assets of the rich over the last few decades. And as to “marktaree” and his “original plan” – first thing you need to do is read Myers (who was there in the design with FDR and later Chief Actuary of SS) book “Social Security”. The original design plan might interest you. The tax rates were planed to go up – planned and forced to go up – by the 1940′s GOP that was determined that no large amount of non government bond assets – indeed no large amount of assets – period – would be accumulated so as to prevent “socialism by the backdoor”. The testimony at that time told the GOP that a pay as you go funding – with a reserve of 6 to 12 months payments to be called the Social Security Trust Fund – would mean rates rising to the 6 to 7% area.
“Insurance is voluntary” – well no – auto liability insurance is mandatory in most of the states.
As to “this is nothing like insurance” – read the book.
The annual statements you got from Social Security over the years never said that all payroll taxes you paid were an investment held in trust – go back and read them. “Investment in your retirement” and “earned under current law for payment at retirement” are words that were used – and indeed the existence of Social Insurance is an investment in your future retirement. OK – after discussing “original intent” you want to now now drop your clone of Scalia’s “original intent” via blog posts of the 18th century that exclude Thomas “Tom” Paine , because it is “specious” because payroll taxes are just “one group of people trying to take the property of another group of people. Theft …” – well no – is insurance theft when you buy 5 year term insurance and then live 6 years – not collecting a dime? Again read Myers book – and add a book on insurance.
The 1933 1% equates to people making 620,000 paying their fair share is amazing logic where you conflate tax base with tax rate and ignore system coverage and just about all actuarial math – home schooled are we?
“Since the medicare piece was broken out” – LOL – please read Myers or just read about LBJ and Medicare.
As to your math on accumulations under the decrement of death and disability implying a better “do it on my own” retirement pay results – well, learn the system benefit formula and learn some some actuarial math. Again Fox news is not a good source for facts.
“None of the money is invested, it does not earn a rate of return” – wrong and wrong – again read Myers book – please.
“It is a ponzi scheme” – please go back and learn what a Ponzi scheme is and then compare to insurance – you might find being informed a better way to go through life.
“We do not have a gap between rich and poor. For the most part, it is a gap between the ambitous and the non-ambitous.” – well since most wealth is inherited, and most accumulations, while by those that work hard, are there only because the fellow had more luck than others that worked equally as hard, the “ambitious” (this time spelled correctly) is not only thing going on.
“I enjoyed a can of tuna for lunch today. I think it was cheaper than a can of cat food. Bon Appetit!” – guess it is time for my can of tuna!
no – that is not the definition of a Ponzi scheme. Do you even know the definition of private insurance, or of social insurance? Do you have any financial education at all?
You were born a couple of centuries too late. That’s not the way developed modern societies work. But, you’re in luck; there still some third world countries that work that way.
David -
Great write-up. I agree with everything you said – indeed it is hard to anticipate the the commission or the Democrats doing the right thing.
I thought I had read they are thinking about a VAT tax, naturally, the most regressive tax they could come up with.
I don’t see any way Obama and the Dems aren’t toast in 2012 under any scenario. Rather than try to win the votes of their base, Obamaco would rather trot out his PR man to insult them to their face.
Well my grandpappy used to have a saying that went something like this…
If it swims, waddles, and quacks, then it’s probably a duck.
Using that logic, I think the answer(s) to your question(s) are obvious.
Can I double down on your comment that this person is pushing b.s? He/she doesn’t know it’s b.s. That’s the problem.
“expenditures will start exceeding revenues by 2017, at which point the Trust Fund will need to begin redeeming the special U.S. bonds into which it has invest its past surpluses.”
This is one of the myths that wound lead one to believe Social Security is in need of change. And you are only adding to this misconception. Social Security will not be cashing in bonds in 2017 even if outflows exceed income. The current $2.4 trillion surplus in the Social Security trust fund is invested in government bonds paying interest in the tens of billions of dollars each year. As long as Social Security taxes exceed payments, the trust fund grows rapidly. When income is less than outflow, the trust fund still increases, only not as rapidly. Because the shortfall cuts into the dividends we would ordinarily be receiving from the bonds.
Oh, my, I have been hanging around the dogs too much. I kept thinking his posting name was MarkATree.
Given the current level of heavy metals and other contamination in tuna fish, I don’t think your abstention from drugs and alcohol is going to offset the deleterious effects of your diet on your health.
LOL – I suspect our “grandpappies” had the same wisdom born of years of observation.
Amazing what nonsense pops up from the Fox Cable News crowd.
Interesting true story about my grandpappy.
He didn’t drink often, but when he did he got ornery as a junk yard dog. Mean bastard.
Well, one night he drank and apparently went to far with grandma, and she shot him. With a rifle. In the chest. From 4 feet away.
All it did was piss him off.
LOL, needless to say, after that (I was about 8 at the time) I idolized my grandpappy. He was like superman in my eyes!
Docs told my Dad days later that had the bullet been one inch to the right it would’ve done a lot more than pissed him off, as we would’ve been burying grandpappy then.
All true, I swear to it.
you don’t seem to understand the idea of social security. We passed it in 1937 but the idea came forward from the late 19th century. The idea, conceived, I’m pretty sure by some liberals, er progressives, back then that old people who didn’t make much in their lives and therefore could not save for old age needed some sort of social insurance, you know security against getting old and not being able to work anymore. Maybe the liberals, er progressives, didn’t want grandma to eat cat food and live in a box. So, while some call it insurance, it is really not, only in the sense that it will help keep the wolves from your door. Medicare is obviously a companion piece that took much longer to get in place. A ponzi scheme it is not, only if you misunderstand what it is all about.
Not sure I follow your meaning. I do think the dems and Obama have an uphill battle this year and in 2012 given the unemployment scenario. But then again, I am not at all happy with the prospect of Sharron Angle and the like running this country. Just sayin.
I just can’t let that go. So you mean to say you’d let your parents live in a box rather than help? After all they had to pay for you but you don’t owe them shit, right?
he just strolled in here to mark a tree, bluedot, pay him no nevermind.
And don’t forget that those bringing in $1 million a year aren’t getting a thousand bucks an hour, plus overtime; they’re raking in a mere $400-500 bucks an hour plus investment profits which never will be taxed for social security or Medicare (and much of it at a lower rate than earned income).
Obnoxious whiners.
Yea and she also said she wouldn’t vote for a Health reform bill without a Public Option in it. She cannot be taken seriously. Her saying she won’t go for cuts in SSI just means they’ve already been baked into the deal. The DC Dems. are totally set on committing electoral suicide along with this one term failed President. I guess Obama doesn’t really care though he’s probably already got his 100K a pop speaking tour all planned out, plus a dozen or two Corp. boards to sit on. Can’t stand the man.
Clinton cut welfare. Obama will cut S.S. Two Trojan whoresez.
I don’t accept that every abled body and at least average intelligence person can’t take care of themselves and a family if they want. It is a falsehood to portray those that are irresponsible with money, have children when not ready, abuse substances, quit school, quit work for ego or laziness … as deserving of pity. It is typically these very same loafers trying to create the impression so they can continue to sponge.
So you are saying you think I should pay for someone else’s Jagermeister and meth? Are you serious?
CPA, 1st time on test. 4th highest score in Texas. How about you?
You are right. Belize is looking better and better. BTW, who will be paying for your socialism?
That is interesting. He had the same ideas for both health insurance and retirement: Make paying for them mandatory! Can’t afford health insurance? Well you have a mandate so now you’re insured. Don’t have anything left after paying bills to save for retirement? We’ll just enroll you automatically in a savings plan. Problems fixed!
So who pays the Govt Bonds and the interest? Think … harder … AHA! It is you if you pay taxes (and you will pay taxes.)
There are no companies, commodities, real estate (actually we could sell our federal lands) or any other potentially income producing stuff that the “trust fund” is invested in.
No, I was pointing out the I’ve got mine attitude I read into your posts. If that particular quote doesn’t do it, then take your pick out of any of the others.
No matter how you dress it up; personal responsibility, why should I pay for someone else’s shortcomings, etc. etc. etc. it’s all the same, I’ve got mine and I don’t give a shit about my fellow human beings. I’ll help the ones I want to help myself, and to hell with everyone else.
And that’s a horrible way to go through life if you ask me, and it’s not at all fair given that the only way you can do so well is if others are doing well too. No man is an island, and whatever business you’re in, it relies on customers. And without those customers, and without those roads they drive to your business on, and without the protection of the police, yours and every other business out there would be gone.
I don’t endorse taking advantage of the programs that are in place to help, but I accept that some will try to do that, and don’t wish to throw the baby out with the bathwater by ending them. I also accept that at times people, through no fault of their own, find themselves in a time of need, and help. And I accept that part of government’s role is to step in and provide that help when it is needed.
Your posts indicate a problem not only with social security but with any program designed to help those in need, and I find that seflish, as well as short sighted.
Obviously, YMMV.
But my parents don’t need help because they were not lazy idiots. They are quite comfortable.
I continue to work and save so that my kids don’t have to pay for me.
It is called not being a burden on your family.
It is called being a grown-up instead of a developmentally frozen brat.
I suspect you pay very little taxes compared to me. It seems you are the type that is quite generous with other people’s money but when it comes time for you to help someone directly …sorry dude. You know, selfish.
Even if you were right about me, that doesn’t excuse the “I’ve got mine and fuck everybody else” mentality.
I hope the day never comes when you’ll need a little help. Or that the day ever comes where you find out some things are too big for you to handle alone. I hope that things work out as well as they obviously have so far for you.
But if the day ever does come up that you need help, and I’m in a position to do it either directly or indirectly through my taxes, I’ll gladly do it, even though I despise that attitude.
Hope you have a great weekend.
How much effort to you put into avoiding taxes – Cayman accounts or are you a Swisser? Do you think about cheating?
“CPA, 1st time on test. 4th highest score in Texas. How about you?”–Marktaree
I don’t know which explains your point of view more: the CPA or the Texas.
marktaree-hope you never lose your job, then get sick with 0h-say-cancer, then lose your home. Believe it or not, it can happen to anyone.
Every dollar that is paid to retired workers is a dollar that the very rich cannot put directly in their piggy banks.
How is it so many of this group of self-proclaimed political cognoscenti are so dense? It is tiring to read so many discussing peripheral issues when the root problem is so obvious.
You’all keep missing the point. Your example is who everyone wants to help. You have probably done so and believe it or not, so have I. But most people on Govt. handouts are not your sad example, not even close. Thus our funds that would help the poor cancer patient that lost the job and would otherwise lose the home, and maybe set up a fund to pay for his/her kids education, are drained through taxes to go to schmucks and cons.
Texas! That explains it.
I agree. We have to make any Democrat who votes to destroy Social Security, by any means, including raising the retirement age or cutting benefits, pay and pay dearly. I have written my Congressmen and Pres. Obama. I will vote against you, even if I have to vote for a wingnut, crazy teabagger, including Palin, if one or more of them hurts Social Security. Any Democrat who does this is no Democrat, and does not deserve my vote. We successfully kept Republican Pres. Bush from privatizing SS in 2005, and I’d rather fight one of them than support a Democrat who votes to harm Social Security. This is my solemn promise. No exceptions.
Yeah i have been thinking about quiting my job on the grid and being a contractor. I can do most of the work on a cash basis, hire illegals and pay them dirt and of course not pay any taxes. I’ll get unemployment for two years, while I’m making all the cash then I’ll have a little ‘accident’ and git me sum dat social security disability.
Then, while my illegals is makin ma scratch, I’ll drink ma Jager, snort my meth and blog wid you’all all day.
I don’t know an individual who has single handedly actually done all this but I do know individuals who have done each of these things.
And you’all pay for it and so do I.
Always fun to flush out the bigots.
“I was born in XXX so I am superior”, is that your point. How many slaves did your grandpappy own?
For craps sake. Social Security is NOT a government handout. Only those who worked and paid into it receive it. So, you can stop that meme right now.
And, if you are so concerned about where the money is coming from when the bonds are cashed in…. then maybe the government shouldn’t have borrowed the money out of social security to pay for unnecessary wars in the first place.
So you are saying you don’t pay taxes, you don’t give to help others and you wish somehow those “evil” rich people (anyone with more than you) could be forced by the Govt. to give the poor people (convienently including you) their money?
You must be very bitter.
I think he was saying the opposite. And he sounds quite reasonable and kind.
D-Day, nice piece on the WSJ leak, and it’s nice to know exactly which cuts and which tax increases they’re considering over at the Catfood Commission, but I have to wonder why you’re not writing about:
1) the reliability of CBO and other Government projections that show a problem for SS in 2037;
2) whether there really is a deficit problem that ought to be addressed by the Commission at all; or
3) even if there is such a problem why it can’t be addressed by the Federal Government ceasing to issue debt upon Government deficit spending, and thereby invalidating the projected interest costs in all the Government projections?
It seems to me that these are the bigger issues here rather than the minutiae of whether the Commission will propose this or that change in tax rates or benefits, and I wonder why FDL “official bloggers” aren’t writing about these?
The fight with the Catfood Commission and the Administration isn’t just about SS. It’s bigger than that. it’s about the whole “austerian” movement and the very idea that Government should be backing off deficits in either the long or short run, as a matter of principle or “fiscal responsibility.” Until we have full employment, it is never fiscally responsible to run anything but a deficit, and even then it may be necessary to run a deficit if we have a negative foreign trade balance draining purchasing power from our country. We need to make America understand these truths so that we have the scope for Government spending that can help us to meet the many challenges we face. And they’ll never understand that as long as they believe in a long-term deficit problem that is a fantasy.
The Democrats want to spend on education and welfare programs, the Republicans want to spend on Defense and agriculture subsidies. They both see Social Security as a threat to their pet projects and a pot of gold if accessed will allow them to spend without making choices. The media and the political elite seem to have made a decision that Social Security benefits need to be cut for the good of the country (and to protect them from any tax increases).
Social Security is doomed unless the middle class is relentless in its advocacy of Social Security and telling them in plain English that we DO NOT SUPPORT benefit cuts. The benefits are already very meager and will be even less generous as they are taxed more and the cost of health care rises much faster than inflation!
You’re right.
The deficit reduction commission is not about reducing the deficit. It was established for the sole purpose of weakening and eventually destroying Social Security as we know it.
The rich, Wall Street, and the Republican Party which represents them, are pushing for social security privatization. The main reason is that if 156 million people start pouring their social security (SS) contributions into the stock market, the market will increase in value, and the rich will reap $ trillions in capital gains. These gains will be far higher than the bottom 80% of citizens in both in actual dollars and in the percent increase as well. The super rich would continue to increase their share of total US wealth and Wall Street would make $billions in transaction profits. The calculations:
There are about 156 million people contributing to SS each year. Their average contribution is $4,300 for a total of $.7 trillion annual contributions.
The total US stock market is valued at around $14 trillion. So, if SS was privatized, and all the $.7 T went into the stock market, the market should increase 5% annually in value holding all other factors constant. Over 10 years, the market should theoretically increase over 50% in value and then be worth $21T.
Just 1% of the population owns 42% of financial assets and the top 20% own a total of 92%. With privatization, their capital gains could be over $7T at the end of 10 years.
While the average middle class SS investor could experience a gain, their share would be much less in dollars and percent since they would start at a lower investment level. They could also experience another decline in assets since the market is very cyclical – recall the 50% US stock market decline of just a few years ago.
Putting social security contributions in the same basket with personal investments, IRAs, 401(k) and their company’s pension funds is just too risky. It defies the basic principal of investment diversification. Social security funds should not be put into the stock or bond markets.