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Insolvency and Social Security

Kevin Drum writes:

I'm going to annoy a few of my fellow lefties and say that we should stop getting bent out of shape when people respond to the Trustees report by saying that Social Security is "going bankrupt" or "running dry" or some similar formulation. There's a hyperlegalistic sense in which this isn't accurate, but honestly, it would be a helluva dramatic event if the trust fund ran out of money and Social Security suddenly had to slash benefits by 25% in 2033 (see chart above). Referring to this as "bankruptcy" isn't all that big a rhetorical stretch, and everyone on both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix that would involve say it in unison, folks! a very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes.

(Emphasis supplied.) Actually it is more than a "rhetorical stretch." It's a lie. And not for "hyperlegalistic" reasons. Let me explain why I think so on the flip.

Yes, bankruptcy and insolvency are "helluva dramatic event[s]." But sovereign nations who control their own currency don't go bankrupt or insolvent in the way the phrase is used with regard to Social Security.

What is Social Security? It's a program whereby the federal government pays benefits to persons who qualify based on formulas established by the Congress and the relevant Executive Branch agencies.

How is it funded? Through a dedicated tax on wages.

How would Social Security become "insolvent" or go "bankrupt?" It can't in the true sense of the word. It can't in the governmental sense of the word either.

What Drum describes are choices for the government. Choices the government has with EVERY SINGLE PROGRAM it runs. Oh by the way, that includes the military. It includes Medicare. It includes funding for student loans for colleges. It includes enforcing the environmental laws.

It is a lie to say Social Security is "going bankrupt" or "insolvent" anymore than to say the military is going bankrupt.

It treats government finances like household finances. It is stupid for anyone who claims to favor progressive approaches to government to accept this frame. Worse, it is accepting lies.

IF the federal government does not want to slash Social Security benefits in 2033, assuming the Trust Fund runs out, then it does not have to. It can add funding from other sources. It can raise taxes. It can cut military spending. It can do any number of things.

The ability of the federal government to not cut Social Security benefits is obvious to anyone. Any insinuation to the contrary is a lie. And a malicious lie in my view.

Now, if Social Security is to be treated as a traditional pension fund, well then, let's be honest about THAT. But then let's also be honest about the deficits that tax cuts for the rich and military spending have caused. But no one talks about "bankruptcy" and "insolvency" when tax cuts are discussed. EVER.

Speaking for me only

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  • Display: Sort:
    Where do I start? (5.00 / 1) (#14)
    by Slado on Tue Apr 24, 2012 at 10:58:29 AM EST
    Our government is slowly becoming bankrupt.

    It now is running per year a 1/trillion dollar plus deficit.

    Right now today it is spending 25% of GDP and taking in around 18% of GDP in revenue. Rough figures.

    Bush's Tax Cuts won't make up the difference.  And cuts won't either.   The big picture is we've created a government that our economy can't afford.

    Add on the unfunded liabilities of Medicare, Medicaid and Social Security and there is no end in sight since the policy of borrowing, printing and spending has not worked to turn things around.

    The government has two choices.  It can reform itself and choose to have the type of government it can afford.  Or it can attempt to borrow/print it's way out of the situation hoping that eventually the economy grows enough to make up the difference.

    The latter has been the policy of this and the last few presidents and as Margaret Thatcher said 20 years ago..."Eventually you run out of other people's money".

    In my humble opinion the rent is now due and if we continue the policy of expanding the currency, borrowing from others etc... it will lead to dramatic and catastrophic consequences for us collectively.

    The only thing our largess allows us is more time.  We have more time to screw around than Greece, Spain or any other country but the forces of economics still apply and eventually we will feel the catastrophic affects of bad fiscal policy.

    BTD is correct that Social Security can't really go bankrupt but our government can and it will if it doesn't reform all forms of federal spending.

    Liberals and Conservatives have to come to the reality that we can't cut or tax our way out of this.

    Real Tax reform, cuts to all forms of spending is the only way to fix this.

    I would apply a simple rule for Washington to signify an actual solution.

    If everyone isn't screaming then it probably won't work.


    Start where u started (5.00 / 1) (#16)
    by Big Tent Democrat on Tue Apr 24, 2012 at 11:04:12 AM EST
    OUR GOVERNMENT, not our Social Security.

    Now, I disagree but I appreciate that you don't pretend it is a Social Security problem.

    I am sure we also disagree on what to do.

    But our disagreements our honest, not pretending everything is ok except for the social safety net.

    Parent

    We are actually very close (none / 0) (#19)
    by Slado on Tue Apr 24, 2012 at 11:20:11 AM EST
    I am willing to concede that we need major military cuts along with cuts to our entitlement programs (and these cuts are not really drastic because they require raising the age limit along with means testing).

    I'm just sick and tired of the political grandstanding on both sides.   Threats of an invasion from the right and the idea that old people will die in the streets from the left.

    Parent

    They have privatized so much (5.00 / 0) (#38)
    by Militarytracy on Tue Apr 24, 2012 at 12:27:39 PM EST
    that serves the military these days.  Our son-in-law owns a landscaping business here.  He doesn't cut grass much, but cutting grass is a daily staple in Alabama or the place goes to jungle.  We were talking about the people who hold the contracts for mowing Fort Rucker, and they make outrageous money....while every person who is out there in the dust and filth mowing all day working for them makes minimum wage with no healthcare...nothing else.

    We wonder why aggregate demand is in the toilet?  And one of the ways to prop up aggregate demand and grow the economy is to pay out a little more to the poor receiving Social Security.  Paul Krugman wrote about it long ago, but we all know what happens to anything Krugman suggests....flush!

    The truth is our economy is going to get worse before it gets better, and so will our debt ratios.  If we fixed what has become of our middle class we would repair our tax base, and we wouldn't be in this downward debt ratio spiral.  But we won't fix it, because that doesn't jibe with the Larry Summer's or the Chicago Schools of the world trying to price us all at the market price of what we are worth.

    What a joke, there is no market without human beings.  I am the market phucksticks.  And if the Chicago School and Larry Summers ever are priced at what they truly are worth (heads up...they are about to meet that reality head on) you will have never heard bawling and howling so loud.

    Parent

    The 1983 Greenspan Commission ... (5.00 / 1) (#93)
    by Donald from Hawaii on Tue Apr 24, 2012 at 04:38:35 PM EST
    ... reconfigured the Social Security Trust Fund by raising the retirement age to 65 and amending the payroll tax rates in order to to capture 90% of the nation's aggregate income.

    The core problem right now is the ever-growing disparity in income, i.e., that pesky 1% of wealthiest Americans again, such that under current payroll tax rates, only 83% of the income is captured.

    We can greatly alleviate the problem, if not entirely resolve it, by amending the payroll tax rates so that 90% of the income is once again captured. In other words, the wealthiest 1% of Americans need to start paying their fair share.

    But to say that the retirement age needs to be raised again and that there should be means testing simply shifts to burden of resolution onto the backs of the middle and labor classes, while the wealthiest 1% once again gets off scot-free, even though they received the vast proportion of the Bush tax cuts.

    Parent

    "Real Tax reform" (5.00 / 1) (#20)
    by NYShooter on Tue Apr 24, 2012 at 11:20:19 AM EST
    In light of Norquist's "No new taxes of any kind," and the hordes of Republicans signing that pledge, what form of "Real Tax reform" are you suggesting?

    Parent
    A simplified tax code (none / 0) (#70)
    by Slado on Tue Apr 24, 2012 at 01:04:47 PM EST
    You can raise rates all you want but if you leave all the loopholes the rich will figure out a way to pay less.

    That's the ironic thing about the Buffet Rule.  He probably wouldn't pay more because he'd just change the way he's paid.  He can do that because he's Warren Buffet.

    There are so many proposals there is no use going into them all.

    I will say that it'd be impossible to go to a flat tax because of all the infrastructure we've created to handle our ridiculous code.

    We need to slowly peel away the deductions and lower the overall rates to allow the government to efficiently collect more revenue.

    Also simplifying rates would bring more predictability to the private sector so they could invest more.  


    Parent

    I'm down with that... (none / 0) (#72)
    by kdog on Tue Apr 24, 2012 at 01:09:44 PM EST
    the fog of the tax code is where the 1% get over.

    I got a simplified tax plan.  First 30k exempt from all taxes, 10% after 30k to 3 million, 15% 3 million to 15 million, 25% 15 million plus.  All income is treated equally...by work, by accruing interest, by capital gains, by inheritance.  No deductions, no attempting to influence behavior via the tax code, no nonsense.  

    Parent

    Since when (none / 0) (#120)
    by cal1942 on Wed Apr 25, 2012 at 08:36:55 AM EST
    is lowering rates a simplification move?

    That's as absurd as the claim that a flat rate is simplification.

    Parent

    Simply wrong. (5.00 / 3) (#107)
    by cenobite on Tue Apr 24, 2012 at 07:44:13 PM EST
    Let me help.

    The federal government owes debts in dollars.

    Since it is also the issuer of dollars, it can make as many of them as it wants with a keystroke.

    Therefore the federal government can never run out of dollars to pay its debts.

    An entity that can always pay its debts cannot go bankrupt.

    QED.


    Parent

    Not wrong (none / 0) (#124)
    by Slado on Wed Apr 25, 2012 at 09:44:02 AM EST
    The government can only print mondy as long as that money has value.

    If it can no longer pay back it's debtors then it's money loses value and it's broke.  

    As I stated previously we have longer than most countries because we are the preferred currency of the world and we have the largest economy but we are not immune from economics.

    We cannot continue on the current path however and eventually cuts will be made.  

    Parent

    Shhhh, keep your voice down (none / 0) (#132)
    by NYShooter on Wed Apr 25, 2012 at 03:46:03 PM EST
    We want to keep your revelation from the ears of the richest, most sophisticated investors in the world. If they knew what you know they'd surely demand much, much higher interest on U.S. Gov't debt instruments. Can you just imagine those dopes, with their insatiable appetite for our ten year notes, which pay a paltry 2%?  

    But, surely one day your secret will get out and those Richy Richies will come to understand what you, and Paul Ryan, have been saying for.....how many years now? " WE MUST CUT OUR PROLIFERATE SPENDING!" especially on the poor who everyone knows are the cause of all our problems. And so, to protect themselves from the flaming, out of control, inflation that's sure to follow if we continue on our Socialist spending ways, they've bid the 30YEAR Bond up all the way to 3%

    Inflation? "Ooh boy, Just wait, Alice...one day, POW-Zoom, right to the moon."

    Parent

    Real tax reform (none / 0) (#118)
    by cal1942 on Wed Apr 25, 2012 at 08:29:17 AM EST
    is pre-Reagan rates and the biggest part of discretionary spending is the military.

    The start point should be obvious.

    It begins with a conversation about priorities and involves more than just taxes and spending.  Key is the nation's enormous balance of payments or current accounts deficit.

    Preventing the conversation are Conservatives of all stripes be they tea party whack jobs or "conventional" Conservatives.  The issue is Conservative ideology, as destructive a force as this nation has ever encountered.  Our opponents in the second world war weren't nearly as dangerous to the long term health of this nation than is today's Conservative movement.

    Parent

    BTD can we do one thing at least? (5.00 / 1) (#18)
    by Slado on Tue Apr 24, 2012 at 11:16:39 AM EST
    Can we dispense with the so called "Trust Fund".

    I will concede that no government program can go broke but you have to admit that the Trust Fund is a scam and there is no money in it.  Agree?

    Social Security is out of money the second it pays out more then it takes in.  Which is now.  You are correct that Social Security benefits are a choice that government can choose to make.  It can choose to only pay Social Security benefits if it wishes too.  But that is going to be kind of hard to do and all since it's also chosen to police the world, pay trillions more in Medicare and in addition it's debt and finance payments will continue to rise.

    Social Security is now adding to the deficit.  The reality is there is not Trust Fund.   The 2033 date is fictional since the money in the trust fund is not real and is simply IOU's writeen by a government that is currently 15trillion dollars in debt.

    If you are going to argue for sanity then please admit this reality as well.

    You can't have it both ways.

    As Fact Check predicted last year the day has come when the spicket has run out.

    It exists (5.00 / 3) (#25)
    by Big Tent Democrat on Tue Apr 24, 2012 at 11:27:15 AM EST
    It holds US government bonds. So no, it is not a scam or a sham in that sense.

    I will agree that the fiction that Social Security is just like any private pension plan is too often used by my side. It's not.  No pension plan has COLAs for instance.

    Parent

    Last sentence is too broad.. Some persion (5.00 / 4) (#33)
    by oculus on Tue Apr 24, 2012 at 12:02:54 PM EST
    have COLAs.  

    Parent
    Correct oculus (none / 0) (#117)
    by cal1942 on Wed Apr 25, 2012 at 08:18:51 AM EST
    My pension has a COLA provision but with a cap.  

    Cost of living adjustment is limited to $300 per year.

    Although capped, there is, nonetheless, an upward adjustment.

    Parent

    Complete right-wing twaddle (5.00 / 1) (#27)
    by gyrfalcon on Tue Apr 24, 2012 at 11:28:44 AM EST
    You are good at memorizing the talking points, though.  I'll give you that.

    Those "IOUs" are Treasury bonds.  They're "IOUs" only in the sense that every bond on the planet is an IOU.  If the U.S. defaults on its bonds, we're in a lot more trouble than just the SS funding.

    Not gah happen.  Unless, of course, the Tea Party wingnuts get control of the government.


    Parent

    It's not a treasury bond (none / 0) (#49)
    by Slado on Tue Apr 24, 2012 at 12:40:32 PM EST
    It's an IOU from Congress to the Social Security Fund.  It's an accounting trick.   More simply the extra revenues have been spent.  Now the government has to borrow any money that Social Security currently overspends to "pay it back".  

    You sir are simply incorrect.

    BTD is correct in saying the governmetn has the choice to do this so Social Security isn't "broke" but what it is however is a net drag on the debt.

    See link.

    Social Security was insolvent the day it stopped taking in more then it paid out.

    That day has come.

    Parent

    Like any bond (none / 0) (#119)
    by cal1942 on Wed Apr 25, 2012 at 08:32:56 AM EST
    they are an OBLIGATION.  And perhaps more importantly a moral obligation.

    Parent
    When is the military out of money? (none / 0) (#24)
    by sj on Tue Apr 24, 2012 at 11:27:02 AM EST
    When the printing press breaks :) (5.00 / 1) (#69)
    by Militarytracy on Tue Apr 24, 2012 at 01:03:59 PM EST
    Exactly! (none / 0) (#71)
    by Slado on Tue Apr 24, 2012 at 01:06:24 PM EST
    The Military is broke when we decide we don't need it anymore.

    I for one don't need as much of it.

    Parent

    So we need poor people to be poorer (5.00 / 3) (#75)
    by Militarytracy on Tue Apr 24, 2012 at 01:11:28 PM EST
    right now?  With aggregate demand in the toilet?  And your essential tax base is taking even bigger hits to their real property values, and the only thing that appears to be worth anything is the big "$hitpile"...but that is all make believe and fairy dust and you can't get decent tax payment out of what the playas are raking out of anyhow?

    What is going on with Social Security isn't even on the radar of what is "affecting" our economy and encouraging it to preform poorly.  And if our economy began to improve so would what people pay into Social Security.

    But I get it, I'm wasting my time here talking a brick wall.

    Parent

    Ha! (none / 0) (#73)
    by sj on Tue Apr 24, 2012 at 01:10:13 PM EST
    A constructive headline might be: (5.00 / 3) (#26)
    by KeysDan on Tue Apr 24, 2012 at 11:28:22 AM EST
    "Social Security Able to Pay 75% of Benefits Through 2086, and 100% Through 2033" And, Drum's commentary could have dispelled the notion that has been deliberately created for  young people (so as to erode support), that there will not be anything left for them on retirement.  

    Furthermore, despite the economic downturn, full benefits will be paid for the next twenty years.  So, there is time to address the projections and that does not mean that we need to cut the benefits by 25 per cent now or incrementally so that we can avoid cutting them by 25 per cent 20 years from now.  

    The reasons given for the "crisis" relate to the economy, lower taxable wages, adjusted for increased fuel costs--essentially  a further decline for middle income workers. Drum gives a little attention to the lower interest earnings for the Trust Funds since the Fed is holding the interest rates at a very low level. Perhaps, this will change before 20 years are up.

    It would seem that a more reasonable step would be to address the need to strengthen the middle class and to go where the money went: remove the present $ll0,000/year cap (or a donut hole, picked up again at $200,000)   In Kevin Drum's defense, he does, at least, recognize that there really is a Trust Fund and that it generates interest--something that is not always recognized, and often denied.

    No it doesn't (none / 0) (#74)
    by Slado on Tue Apr 24, 2012 at 01:10:44 PM EST
    The fund does not generate interest.

    It generates fake money from fake money.  

    The government can't create money out of thin air unless it prints it.  

    To quote the attached link...

    Every dollar's worth of special-issue Treasury bonds held by Social Security -- and there are currently about $2.6 trillion worth -- is a dollar that Treasury must come up with by issuing new debt, raising taxes or taking away from the rest of government, which is in far worse fiscal shape.

    Geeez.  Some sanity please.

    LINK

    Parent

    The Old-Age Survivors Insurance Trust (5.00 / 2) (#83)
    by KeysDan on Tue Apr 24, 2012 at 01:52:28 PM EST
    Fund is a separate account for the designated payroll taxes.   Funds not withdrawn for current expenses (benefits/ administrative expenses) are invested in interest-bearing Federal securities and deposited in the Trust Fund.  Indeed, there was a deficit of non-interest income relative to expenditures in 2010 and 20ll owing to the severe recession.  The cash flow deficits were offset by interest and all benefits were paid---all benefits must be paid by redemption of Trust Funds from the General Fund.  So, in that sense, redemption of Trust Funds from the General Fund would impact the debt, but not the deficit.  But, then, putting social security taxes collected into a sock until such time as needed would not make sense.   So, on this, apparently, I am in agreement with Kevin Drum, but not with you.

    Parent
    So slado, (none / 0) (#121)
    by cal1942 on Wed Apr 25, 2012 at 08:49:21 AM EST
    if it's not gold bullion you say it's fake.

    What this all comes down to is the fact that elites are unwilling to pay back money borrowed from working people.


    Parent

    It's amazing (5.00 / 2) (#76)
    by Dadler on Tue Apr 24, 2012 at 01:11:29 PM EST
    We still think money is more important than people.  A civilized, evolved nation, knowing full well it runs on fiat currency, NEVER lets this "problem" get this far.  It has rules in place that enforce a fair and equitable game, which allows for wealth but also provides a generous floor, providing work if necessary, in order to STAVE OFF SOCIAL CHAOS.

    I feel like Kevin negotiates with himself (5.00 / 3) (#78)
    by lilburro on Tue Apr 24, 2012 at 01:12:58 PM EST
    on how the political conversation should be conducted (I was going to say, "on reality," but that's not nice).  Because, a, this is true but it is not really part of the conversation

    Moral of the story: We need to get our economy out of a ditch, and the sooner the better. But you already knew that.

    Jumpstarting the economy would fix a lot of our problems.  But that has been entirely dismissed from the political conversation as an option.

    And in a perfect world this might be true but it is not going to happen:

    both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix

    So Drum is trying to correct something in the political conversation while forwarding a number of glib non-realities himself.  It's just more of the same old pseudo-enlightened liberal bashing.

    Fainting couches. (5.00 / 2) (#94)
    by Addison on Tue Apr 24, 2012 at 04:50:41 PM EST
    The "liberals" got off their fainting couches, Kevin.

    They wrote a report detailing how to ensure that for the next 75 years (at least) Social Security would be 95% solvent, and the trust fund would never become exhausted.

    All it required was making all earnings subject to the payroll tax -- and people who paid in more taxes under the new rules would also get more benefits, so the link between money paid in and money received would still exist.

    http://aging.senate.gov/crs/ss9.pdf

    It was shelved, I guess. No one much talks about it anymore. Liberal are just resting our eyes on the couches now, waiting for the next Kevin Drum to come along and say they're being stupid or extremist. It's exhausting.

    Parent

    When Tim Geithner delivered the grim news, (5.00 / 4) (#84)
    by Anne on Tue Apr 24, 2012 at 02:08:07 PM EST
    flanked by the equally grim-faced Hilda Solis and Kathleen Sebelius, that insolvency was looming in Social Security's future, my first thought was that this was a signal that the Bush tax cuts are not going to be allowed to expire.  

    Why?  Because allowing them to do so would remove so many of the reasons why the government "has no choice" but to cut and slash and reduce and moderate the benefits/spending side of the equation for the old, the poor and the sick, and increase the burden on those same people.  In other words, what is really looming is the possibility that those at the upper income levels are going to have to loosen their death grip on their cash, and - speaking of fainting couches - some of those tax dollars could go to assist those at the bottom end of the income spectrum.

    This is, as we all know, heresy - the stuff of stake-burning.

    No, the truth of the matter is that there will be no suffering by the 1% if the circumstances of the other 99% get a boost from the government; in the long run, the !% benefit because of the money the 99% are able to put into the economy.  The more you take away from those who have little, the less they have to support the small businesses, the large businesses, the giant corporations who ultimately need all of us to be spending our money.

    What the Tim Geithners and Kevin Drums and Paul Ryans and President Obamas (because he's got kind of a hard-on for deficit reduction and entitlement "reform") are practicing is the law of diminishing returns; the kinds of things they want to cut will only have them coming back for more - from those who simply won't have it to give - when things don't work out as they keep telling us they will.

    This country pretty much has an unlimited ability to make conscious and deliberate fiscal and monetary decisions about its role in the quality of the lives of its citizens; it can choose to create the conditions that raise the tide and lift all boats, or it can perpetuate the idea that the sea level is static, and the only way to keep the boats up is to keep throwing people overboard, where they will sink or swim or tread water until they drown.  

    I think it's pretty clear what this group has chosen.


    And the misinformation never ends.... (5.00 / 2) (#99)
    by NYShooter on Tue Apr 24, 2012 at 05:37:56 PM EST
    They (ABG, listening?) talk about "shared sacrifice." "Everyone" will have to give a little bit."

    The "giving" has been a one way street, from the 99% to the 1% for over three decades now.

    What is this "everyone giving" crap?

    Parent

    How long much we pretend they aren't idiots? (5.00 / 5) (#85)
    by Addison on Tue Apr 24, 2012 at 02:12:47 PM EST
    Referring to it as "bankruptcy" infers that the only thing to be done is restructure, downsize, and generally "cut the fat".

    An option not usually open to "bankrupt" entities is to simply obtain more revenue. That option is open to the federal government, via very well known means.

    The terminology of "bankrupt" is as misleading as the comparison between household and sovereign fiscal policy, and for similar reasons.

    WHY NO EDIT! "How long MUST we pretend" (none / 0) (#108)
    by Addison on Tue Apr 24, 2012 at 08:36:27 PM EST
    Grammar alert! (none / 0) (#110)
    by NYShooter on Tue Apr 24, 2012 at 09:48:57 PM EST
    Referring to it as "bankruptcy" "implies" that the only thing to be done is restructure, downsize, and generally "cut the fat".

    Yeah, I know, I suck.

    lol

    Parent

    Yes, you are right. I am an enemy of the language. (5.00 / 1) (#111)
    by Addison on Tue Apr 24, 2012 at 10:09:20 PM EST
    Relax (none / 0) (#113)
    by gyrfalcon on Wed Apr 25, 2012 at 12:01:02 AM EST
    Have some decaf.  Your meaning was perfectly clear.  We all make typos.

    Parent
    Not me!!! (5.00 / 1) (#115)
    by Big Tent Democrat on Wed Apr 25, 2012 at 06:47:50 AM EST
    Why are u laffing?

    Parent
    The fix for the shortfall in FICA revenue is easy- (5.00 / 1) (#128)
    by jawbone on Wed Apr 25, 2012 at 02:15:36 PM EST
    Since the Powers That Be worked so hard to get all the wealth to the Tippy Top, just raise the cap for Social Security withholding.  

    Go to where the money is.

    But Obama et al do not want that. They want a fiscal emergency to allow them to take on SocSec, Medicare and Medicaid, to make cuts or changes which result in cuts.

    Obama wants to achieve what Reagan could not --or would not-- do, which is to mess over the great social safety net programs. He made it clear before he even declared for the Dem presidential primary and caused Krugman's hair to catch on fire.  Krugman warned Democrats, but, alas, not enough of them listened.

    So, now we're lumbered with the pseudo Dem president and all the things he won't do for us and wants to do to us.

    Also, when there's an extended very high level of (none / 0) (#129)
    by jawbone on Wed Apr 25, 2012 at 02:18:10 PM EST
    unemployment, perhaps deliberate disemployment, the FICA revenues are...ta dah!...lower.  Many people's incomes are lowered, to the point of having nothing to be taxed.

    D'oh.

     

    Parent

    It can raise taxes (4.75 / 4) (#3)
    by Militarytracy on Tue Apr 24, 2012 at 09:41:46 AM EST
    The cap can be raised.

    Indeed they can (5.00 / 2) (#29)
    by smott on Tue Apr 24, 2012 at 11:48:19 AM EST
    In fact I listened to an Obama stump speech on that very subject back in the War of 2008.

    I believe he said he would push the cap to 350,000.

    Which would push any claims of insolvency so far in to the future that the conversation would be over.

    Didn't happen.

    Like so much Obama claimed he might do.

    Parent

    Yup, Obvious Solution (5.00 / 1) (#63)
    by Lora on Tue Apr 24, 2012 at 12:57:52 PM EST
    But heresy, sadly.

    Parent
    Enough (4.75 / 4) (#12)
    by koshembos on Tue Apr 24, 2012 at 10:23:10 AM EST
    The social/political arena is chuck full of people who fail to grasp even the most basic principles that guide our institutions.

    First, there is no such thing as "solving" a 2033 problem in 2012. That is complete nonsense. We can build roads and bridges, but we are unable to forecast economic conditions even for 2013. Drum proposal doesn't pass the laughing test.

    Second, today's SS benefit are way too low for a decent society. They should be raised not cut. Most people have no savings and meager, if any, pension funds.

    Third, every commentator is afraid of taxes, so Drum suggest cutting benefits. Why?

    Forth, we are already at the bottom of the social benefits of the developed world, Drum want us to cross into the 3rd world. Thanks.

    Yet again (4.67 / 3) (#4)
    by Babel 17 on Tue Apr 24, 2012 at 09:42:49 AM EST
    Yet again somewhat pontificates on Social Security as if extremely knowledgeable, and credible, people haven't addressed their talking points in depth.

    It's no longer excusable, it amounts to intellectual honesty.

    Shame on you Kevin Drum.

    What gets me is the rah-rah (4.67 / 3) (#5)
    by gyrfalcon on Tue Apr 24, 2012 at 09:43:38 AM EST
    for "modest benefit cuts."

    For people struggling to survive on SS, there is no such thing as a "modest benefit cut."  Say "modest benefit cut" to an oldster living on SS and watch the tears roll down their faces and the terror in their eyes.


    Because the rich just can't (none / 0) (#7)
    by Militarytracy on Tue Apr 24, 2012 at 09:50:42 AM EST
    get rich enough and the poor just can't get poor enough.  My cousins life has been blown up.  He is my age so they have fought his cancer like crazy, he is too young to die but he is.  His children still need him, but his wife tells me that his Soc Sec Disability only covers the basic bills and that his healthcare copays are now racked up into the tens of thousands.  They will never dig out, not ever.  It would be a miracle, a true miracle if he recovered and went back to work.  And his wife will never ever be able to pay what she owes for fighting for his life....unless she wins the lottery I guess.  In the meantime though, let us cut Social Security.  I'm so tired of all those people getting over.

    Parent
    let me clue you in to a harsh reality (none / 0) (#10)
    by cpinva on Tue Apr 24, 2012 at 10:02:12 AM EST
    that seems to have escaped the notice of pretty darn near everyone: we are nearly all living on a fixed income. my salary doesn't fluctuate from week to week. i'm guessing your's probably doesn't either. in fact, with rare exception, most people's don't.

    while it's true that those living on pensions have a fixed income, so do pretty much all the rest of us. true, my salary may increase, due to possible promotion/COL increase, but there's no guarantee of that. the same holds true, i'd wager, for a huge percentage of the rest of the working population.

    Parent

    And let me clue you in (5.00 / 2) (#21)
    by gyrfalcon on Tue Apr 24, 2012 at 11:22:21 AM EST
    My income as a freelancer hasn't gone up, it hasn't even stayed flat, it's cratered in this recession.  But since I can still work, at least I can continue to look for work and to hope I can hold on until things get better.

    When you're a low-income laborer and your body's worn out and nobody's ever going to hire you again even if you could work and SS is all you've got, no matter how booming the economy might get, it's a far more terrifying horizon.

    Parent

    why the harsh comment (5.00 / 1) (#22)
    by sj on Tue Apr 24, 2012 at 11:24:59 AM EST
    on harsh reality to gyrfalcon who didn't use term?  

    Yes, it's true that I live on a fixed income.  Where it is fixed however is at a level that is referred to as a steady income.  Because I could (in theory) go somewhere else where my income would then be fixed at a higher level, a lower level or the same as it is now.  

    Now that lower level could be on unemployment insurance.  And then we're talking about a fixed income as opposed to a steady income.

    Parent

    Not Really True (5.00 / 2) (#34)
    by ScottW714 on Tue Apr 24, 2012 at 12:18:25 PM EST
    The term fixed income implies that income can't change, it's fixed.  You or I and most working stiffs can move around, get promoted, or even receive a nice raise/bonus just because.  We can even take on another job.  Our income is not fixed, the same every month, for the most part, but not fixed.

    In this context, fixed income means those options aren't available, not just for older folks, but many fixed income people are their because of health reason and don't have the mobility in income we do.  It's why better to do retired are generally not fixed income either, they can liquidate/reshuffle investments, and a whole host of other things to change their incomes.  Whereas real fixed income people can not, there incomes are literally fixed.

    I do not have a fixed income because I am salary.

    Parent

    much better (none / 0) (#58)
    by sj on Tue Apr 24, 2012 at 12:53:35 PM EST
    answer than mine.

    Parent
    yes, you do. (none / 0) (#122)
    by cpinva on Wed Apr 25, 2012 at 08:57:43 AM EST
    I do not have a fixed income because I am salary.

    unless it changes from paycheck to paycheck, which i'm betting it doesn't. my original comment was directed at whoever it was that originally used the term "fixed income" to describe those on SS. as though they are a special group. they aren't, in the sense that most of us live on a fixed income, an income that doesn't change from paycheck to paycheck, in the absence of an extraordinary event. in that respect, we are all pretty much in the same boat, and should stop acting as though we aren't.

    none of you have provided a clear, bright-line deliniation, but nice try, please take the home version of the game as a lovely parting gift.

    Parent

    This is pure sophistry (none / 0) (#126)
    by sj on Wed Apr 25, 2012 at 11:00:36 AM EST
    There are terms that have a meaning beyond the literal interpretation of the words that comprise that term.  "Fixed income" is one of those terms.  "Social Security" is another.

    So you can keep your parting gift.  And store it.

    Parent

    True enough (none / 0) (#11)
    by Abdul Abulbul Amir on Tue Apr 24, 2012 at 10:20:22 AM EST
    .

    However, the benefit cuts for the well to do are another matter altogether.

    .

    Parent

    Ha! I love it when some (5.00 / 3) (#61)
    by Militarytracy on Tue Apr 24, 2012 at 12:56:39 PM EST
    schmoe figures out how to chisel out more than their fair share out of the economy, and then doesn't think they need to pay their fair share for the maintenance of the civil society that spawned them.

    I visited Caracas with my grandmother once, before Chavez.  It was spooky as hell and the big houses were surrounded by walls with huge pieces of glass imbedded along the wall the tops.  Welcome to the jungle losers, hope someone doesn't kidnap you guys as law and order breaks down and gives way to the hungry, the hopeless, and now socially insane.

    I'm so tired of stupid people.

    Parent

    I was there pre: Chavez as well, (none / 0) (#131)
    by sarcastic unnamed one on Wed Apr 25, 2012 at 03:43:07 PM EST
    are there no longer "big houses surrounded by walls with huge pieces of glass imbedded along the wall the tops?"

    Always seemed odd to me that the slums were way up on the hillsides with the million-dollar views, while all the wealthy folk lived in houses down in the flats...

    Parent

    Paying the rather small benefits (none / 0) (#23)
    by sj on Tue Apr 24, 2012 at 11:25:06 AM EST
    to the [relatively] few wealthy retirees is frankly a small price to pay to prevent SS from being viewed as a "welfare program".  Please refer to all the comments on this site using the term "welfare state" and you will see the danger.  Plus, they have also paid in.  Do you think that the wealthy are not entitled to auto insurance just because they can afford to pay for repairs out of pocket?  I doubt it.  So why should they lose SS benefits?

    Parent
    Sorry (none / 0) (#60)
    by Abdul Abulbul Amir on Tue Apr 24, 2012 at 12:56:19 PM EST
    .

    Once you are paying benefits in a way that breaks the link with taxes paid you are at that point already.  Paying twice the SS tax will not get you twice the retirement check.  

    .

    Parent

    At Some Levels it Will be Close (5.00 / 1) (#82)
    by ScottW714 on Tue Apr 24, 2012 at 01:45:27 PM EST
    Your problem is the huge cliff for people making over 100k.

    I'm not argue about that, but funny how the right only has a problem with income inequality on one side of the stream.  When it's going up because regulations their lobbyists help right are bringing buckets of cash to the top, then not a peep about fairness.  When they use their enormous powers to buy federal wildlife land to drill on, not a peep from the right about fairness.  If anything, they want more tax breaks and other handouts.  But when it's time to bring that cash back down, then everyone on the right is up in arms about fairness.

    Perfect example, gas prices and Exxon record setting profits, where's the fairness you keep demanding from the poor ?  How about when they get caught price setting/gouging, clearly unfair practices for getting cash to the top.  The right loves to toss out, "Life Ain't Fair, Deal With It."  But only one one side of the money flow.  If only they would take their own advise and shut the hell up about these peanuts and be satisfied with buying the government, but the greedy aholes need more and more.  And the idiot brigade is way too happy to screw themselves so that the poor don't get an extra nickel, too dumb to realize they are getting duped as much as the rest the 99%ers.

    You want fair, distribute fairly both ways, not just one.  Otherwise shut the hell up about fair.

    Parent

    WTF (none / 0) (#112)
    by Abdul Abulbul Amir on Tue Apr 24, 2012 at 10:56:23 PM EST
    .

    What does that have to do with paying twice the SS tax not bringing in twice the SS retirement check?

    BTW for what you pay at the pump several times goes for taxes versus Exxon's profits.  If Exxon's profits are obscene, the taxes must be super obscene.

    .

    Parent

    Good point (1.00 / 2) (#80)
    by Slado on Tue Apr 24, 2012 at 01:16:57 PM EST
    It's already a welfare program.  And it's one we need and should keep.

    Without means testing all benefits will be cut.

    I would think cutting the rates for the rich first would make more sense.

    Parent

    It is not a welfare program (5.00 / 1) (#81)
    by Militarytracy on Tue Apr 24, 2012 at 01:23:36 PM EST
    Unless you want to call it a government welfare program, because the government has stolen out of it for years and years

    Parent
    Why should it? (none / 0) (#67)
    by sj on Tue Apr 24, 2012 at 01:02:45 PM EST
    Oh...you mean like how (none / 0) (#79)
    by Militarytracy on Tue Apr 24, 2012 at 01:15:35 PM EST
    Buffet pays less taxes than his secretary?

    Parent
    Imagine if the military went bankrupt (4.67 / 3) (#6)
    by Militarytracy on Tue Apr 24, 2012 at 09:44:56 AM EST
    And nobody was on the wall.  My cousin's husband is fighting cancer and drawing social security disability and she posted on Facebook a few days back the question of WHY IS ONLY SOCIAL SECURITY CHECKS THAT WON'T BE HONORED?  WILL THE SOLDIERS PAYCHECKS NOT BOUNCE TOO?  The military will never be bankrupt, it'll never happen. Nor should we allow our own people to starve and suffer for the sake of investors and bankers.  I'm sick of crazy people anymore, sick sick sick of them!

    Unfortunately, (4.67 / 3) (#13)
    by NYShooter on Tue Apr 24, 2012 at 10:55:06 AM EST
    the American voting public doesn't read Talk Left.

    "We" know what "should" be done. And WE elected a President to get that message out to the vast electorate. But, our President took that mandate and threw it in the garbage. And, the message he sent out was one of a "Grand Bargain."

    The Republican Candidate for President is running on a platform that all our economic problems are due to the greed of our poor and working class. "Shared sacrifice" only includes those two groups. As our President's hand picked Treasury Secretary stated,The Oligarchs are not to be nicked for as much as "one penny."

    How, when all three branches of our Government have capitulated to the 1% "Job Creators,"do we turn what "should be done" to what "can be done?"

    You are wrong (none / 0) (#15)
    by Slado on Tue Apr 24, 2012 at 11:03:17 AM EST
    A Grand Bargain is exactly what's needed but this president has failed.   He's failed to do what he said he would and more importantly with all of government under his control for two years he has failed to lead.

    The policy of ever expanding federal government is exactly why we are here.

    If we don't change course we will be Greece and the next president whether it be Obama or Romney will be faced with the reality that time is up.  

    You aren't going to like what they come up with because it's going to be much worse than any Grand Bargain would have been.   For everyone.

    Parent

    How do you feel about (5.00 / 5) (#17)
    by Big Tent Democrat on Tue Apr 24, 2012 at 11:06:05 AM EST
    returning to the Clinton tax rates, cutting military spending by 30%, reducing tax loopholes for rich companies, etc.

    Parent
    Bring it on! (5.00 / 1) (#30)
    by smott on Tue Apr 24, 2012 at 11:50:37 AM EST
    Is how I feel....

    Parent
    Don't think we would even need (5.00 / 1) (#32)
    by KeysDan on Tue Apr 24, 2012 at 12:01:09 PM EST
    the "etc." part of your suggestion.  Return to the Clinton tax rates (allow all the Bush tax cuts to expire), cut military spending by 30 per cent, and tax carried interest for hedge/equity funds at regular rates.  That should do it.  

    Parent
    I dont' agree (5.00 / 1) (#37)
    by Slado on Tue Apr 24, 2012 at 12:26:01 PM EST
    but there is a middle ground.

    I favor a simplified tax code which won't return us to Clinton rates but in my view would return us to Clinton revenues (as a percentage, the internet bubble days are just not coming back :(.

    You can't cut the pentagon as a percentage in my view.   What you can do is cut it in terms of troop levels, equipment and locations.

    My proposals as follows:

    1. Leave S. Korea.  It's been 60 years, you're welcome.
    2. Leave Germany.  It's been 70 years.  You're welcome.
    3. Leave Saudi Arabia.  It's been too long.  Goodbye.
    4. Leave Japan.  Sorry about the bomb.  Goodbye.
    5. Reduce new weapons programs by 1/2
    6. Reduce bases and current domestic locations by 1/5
    7. Reform military bid process and make contracts private.  I have experience with Military construction and I can tell you this could be done much more efficiently by the private sector.
    8. Disband the Army Core of Engineers.   Wasteful, for the most part incompetent and can be done much better by the private sector.
    9. Reduce the level of troops as a whole.  Why do we have such a big army.  Leaving all the places we currently are will help this.

    That's my proposal for military spending.


    Parent
    Middle ground (5.00 / 1) (#44)
    by Big Tent Democrat on Tue Apr 24, 2012 at 12:36:04 PM EST
    I'm only for the "middle ground" if it is the best policy possible.

    It isn't. For two reasons from my perspective: (1) no middle ground that even resembles what you propose would be accepted by Republicans; (2) the political conditions for better solutions will appear well before we have to act.

    As a Democrat and a progressive of sorts, I don;t want to bargian with Republicans about this right now.

    Maybe in 5 years. But not now.

    We can achieve a better solution then.

    Parent

    This makes more sense (none / 0) (#57)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:50:43 PM EST
    as a position BTD.  

    I think you are wrong and that we will be in worse shape then, but I understand this logic.

    Parent

    Well thanks for nothing (5.00 / 1) (#62)
    by Big Tent Democrat on Tue Apr 24, 2012 at 12:57:32 PM EST
    in that that has been my position for the past 2 years.


    Parent
    Confession (none / 0) (#86)
    by AngryBlackGuy on Tue Apr 24, 2012 at 02:30:32 PM EST
    I haven't read everything you have written in the past 2 years.

    I didn't think that was a requirement to converse here.

    Parent

    You don't need to (none / 0) (#95)
    by sj on Tue Apr 24, 2012 at 05:21:15 PM EST
    ... read everthing to find that out.   Just the political negotiation threads.

    Parent
    Never saw that exact point made (none / 0) (#98)
    by AngryBlackGuy on Tue Apr 24, 2012 at 05:35:07 PM EST
    I don't quite know what else to say.

    I never saw that position from BTD before and I am a bad person.  You win?

    Parent

    I win? (none / 0) (#105)
    by sj on Tue Apr 24, 2012 at 05:53:32 PM EST
    I guess.  If you count reading for content winning then I guess I'll take it.

    Parent
    Ok (none / 0) (#104)
    by Big Tent Democrat on Tue Apr 24, 2012 at 05:50:54 PM EST
    Now you know.

    Parent
    Some agreement (none / 0) (#123)
    by cal1942 on Wed Apr 25, 2012 at 09:03:50 AM EST
    Leave S. Korea.  It's been 60 years, you're welcome.
    Leave Germany.  It's been 70 years.  You're welcome.
    Leave Saudi Arabia.  It's been too long.  Goodbye.
    Leave Japan.  Sorry about the bomb.  Goodbye.
    Reduce new weapons programs by 1/2
    Reduce bases and current domestic locations by 1/5

    We've been gifting very expensive public goods to significant industrial rivals for far too long.


    Parent

    I am in favor of cutting military spending (5.00 / 1) (#43)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:34:53 PM EST
    I just wonder whether the associated jobs cuts are what we need right now. The largest employer of young americans is the american military, so it seems unusual that short term those who favored the stimulus would simultaneously want us to cut the most well established federal jobs program for young people.

    It's one place that my priorities are at odds.  Cut military spending 30% and you put a lot of young and middle aged people with no college education out of work at the worst possible time.

    It may still be worth it but it is something to consider.

    Parent

    I'm not for cutting anything right now (5.00 / 2) (#46)
    by Big Tent Democrat on Tue Apr 24, 2012 at 12:37:14 PM EST
    I think we need to run bigger deficits.

    The economy remains in extreme difficulty.

    Parent

    Social security checks (5.00 / 1) (#77)
    by KeysDan on Tue Apr 24, 2012 at 01:12:53 PM EST
    can be considered to be a monthly stimulus.  

    Parent
    Clear and irrefutable (4.50 / 2) (#1)
    by RKF on Tue Apr 24, 2012 at 09:39:51 AM EST
    Well said

    Bravo (4.00 / 1) (#2)
    by Dadler on Tue Apr 24, 2012 at 09:41:18 AM EST
    Heartily agree, and I'd add that Drum apparently also believes in the ultimate power of anthropomorphic currency.  Tonight on DrumTV: When Money Attacks!!  Dopes, all of them.  Either dishonest and on the take or dumb as cracked bricks, or both.  

    Modest raises in the (2.33 / 3) (#96)
    by rjarnold on Tue Apr 24, 2012 at 05:26:11 PM EST
    maximum taxable income (or instituting a donut-hole) and increases in the retirement age would seem to be a good starting point.

    No!!! (5.00 / 1) (#114)
    by gyrfalcon on Wed Apr 25, 2012 at 12:02:42 AM EST
    Raise the retirement age for people who sit on their butts all day to earn a living.  Physical laborers-- farmers, waitresses, cleaning ladies, construction workers-- are literally physically broken well before the current retirement age, and they're not hirable for desk jobs.

    Just stop this idiocy about raising the retirement age.

    Parent

    The only reason to raise the retirement age (none / 0) (#109)
    by caseyOR on Tue Apr 24, 2012 at 09:13:07 PM EST
    or cut benefits is to further bleed the 99%. SS has a dedicated revenue stream, and has nothing to do with the deficit.

    And, seriously, did the U.S., when I wasn't looking, solve all its current problems? Are all the wars over and all the troops back home? Does everybody who wants a job have one, a good one? Have we settled on a sensible and decent immigration policy? Have we fixed our infrastructure? If not, then why are we talking about SS, a program that is in better shape than just about anything else to do with the government?

    If raising the SS cap cannot be passed with our current Congress or the next or even the next, well, we can wait on this. My god, lets try to solve some real and pressing problems.

    Parent

    Thought (2.00 / 1) (#39)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:27:45 PM EST
    "everyone on both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix that would involve -- say it in unison, folks! -- a very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes."

    I agree with that to some degree. The battle over what we call it is a side track that is used by both sides when convenient.  The conservatives are currently using it to their advantage, but I forsee liberals using alternative framings which make SS seem indistinguishable from any other federal obligation, when in many way it is.  It's different.

    The real issue is that there is a funding shortfall and how do we deal with it.

    I also think that from a practical perspective, Drum is absolutely correct on the remedy. We will likely have to curtail entitlements (possibly only for people who aren't even adults yet and in the least damaging way possible) and increase taxes in some way.

    Those on both sides drawing a line in the sand and demanding concessions from the other side while no concessions on their sides are the problem and the primary reason that nothing can get done.

    The SS system as we know it will likely change because demographics and deficit constraints will force it to change.  The best way to change it in a way that protects the people who need protecting is to take the lead instead of waiting for the inevitable.

    The idea that there will be no change to SS and only increases to taxes on the wealthy and others is as delusional as the idea that there was going to a be a public option without some interim step.  

    Tom Friedman shows up (5.00 / 4) (#41)
    by Big Tent Democrat on Tue Apr 24, 2012 at 12:32:24 PM EST
    If there is an ounce of substance in what you wrote, it escaped me.

    Parent
    Let me dumb it down for you. (2.00 / 1) (#45)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:36:42 PM EST
    "Moderate cuts to SS and moderate increase to taxes are a fair way to deal with the SS issues"

    Is there a problem with that statement?

    Parent

    Yes, doing both of those things (5.00 / 1) (#52)
    by Militarytracy on Tue Apr 24, 2012 at 12:44:25 PM EST
    will destroy more of your aggregate demand, and your debt ratios will then get worse.  Raising taxes on those who are rich won't hurt the mainstreet economy much and it will do more to improve those ratios.  Giving more to the poor to spend in the economy grows your tax base, which is at this point broken.

    Parent
    Many problems (none / 0) (#47)
    by Big Tent Democrat on Tue Apr 24, 2012 at 12:38:28 PM EST
    I'll just give you just one - no such deal can be made with this Republican Party.

    I have 8 million other objections to your proposal, but that one alone should end the conversation imo.

    Parent

    Right (none / 0) (#50)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:41:09 PM EST
    And "let's cut defense spending by 30%" is the heart of pragmatic realism.

    My proposal is far more realistic than yours.

    Parent

    To clarify (none / 0) (#53)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:45:27 PM EST

    I suggest moderate cut to entitlements and moderate tax increases and that is not going to be acceptable to the GOP pursuant to BTD.

    BTD suggest tax increases across the board, fairly large ones (going back to clinton era rates), a 30% cut to defense spending and closing corporate loopholes, and that is supposed to be MORE acceptable to the GOP?

    Parent

    tax increases across the board (5.00 / 1) (#54)
    by CST on Tue Apr 24, 2012 at 12:47:59 PM EST
    are coming if we do absolutely nothing.

    We don't have to compromise anything for that.

    Parent

    Can't say I'm keen on.... (none / 0) (#68)
    by kdog on Tue Apr 24, 2012 at 01:03:21 PM EST
    kicking in more sweat off my brow to this b*tch and see grandma end up dumpster diving anyway.

    You can't talk about tax rates seriously for the same reason we can't talk about the scope of the safety net seriously...our priorities are too f*cked up.

    It's but a mimiscule example, but take the GSA shenanigans.  Until all the sh*t like that stops we're wasting our time trying to figure out the proper tax rate or the proper parameters of the safety net.  Because our priorities are lost in the wilderness.

    Parent

    That's not my proposal (none / 0) (#59)
    by Big Tent Democrat on Tue Apr 24, 2012 at 12:56:09 PM EST
    That's my polemic.

    You harbor the illusion that "proposals" matter at this time.

    Parent

    Funny. (none / 0) (#66)
    by oculus on Tue Apr 24, 2012 at 01:02:07 PM EST
    Proposals matter (none / 0) (#87)
    by AngryBlackGuy on Tue Apr 24, 2012 at 02:38:44 PM EST
    According to the people bashing Obama when he (allegedly) makes them on entitlement cuts.

    Parent
    He offered them cuts (none / 0) (#97)
    by NYShooter on Tue Apr 24, 2012 at 05:28:41 PM EST
    90% Cuts to 10% revenues. He didn't even dare to call it "taxes."

    That "proposal" was DOA....even at the cost of defaulting on our Debt.

    Proposals to this republican party?

    Sick.

    Parent

    yea (none / 0) (#51)
    by CST on Tue Apr 24, 2012 at 12:42:42 PM EST
    define moderate.

    It's a meaningless word because it means different things to different people.

    Also - fair to whom?

    Parent

    Don't know what moderate is (none / 0) (#55)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:48:18 PM EST
    I'd have to see proposals and see how people of different income levels and status are impacted, but my understanding of the various analysis, is that the required increases/cuts could be structured in such a way as to minimize impact to those who are least able to support the burden.

    I am not an economist and don't have every detail, I just know that:

    1. I don't want those who are nearing retirement age or otherwise unable to cope with the change to suffer, and

    2. I don't want the poor and middle class to be taken advantage of in the process.  They may have to shoulder a portion of the burden but it shouldn't be an undue burden.

    I think

    Parent
    so what do we get (5.00 / 1) (#64)
    by CST on Tue Apr 24, 2012 at 12:58:00 PM EST
    in this compromise?

    Why are we giving up social security?

    See my other post about tax increases coming anyway.  This isn't a compromise it's a hand-out to the right-wing agenda - unless we get something in return that we can't get anyway.

    In case you were wondering, no, I'm not particularly concerned about the national debt.  I also think cutting social security benefits will only do more harm to the overall economy - and thus the tax base that the government brings in.  It's a net loss.  Where's the "give" on the other side?  (Bush tax cuts are expiring, those aren't on the table for me).

    Parent

    Where did I say (none / 0) (#88)
    by AngryBlackGuy on Tue Apr 24, 2012 at 02:40:18 PM EST
    we were giving up social security?

    I say modest changes and that translates into giving up SS.

    This is why it is hard to come to agreement on this stuff. People hear the worst about the issue they care about.

    Parent

    modest changes (none / 0) (#89)
    by CST on Tue Apr 24, 2012 at 02:45:20 PM EST
    is making concessions.  I didn't mean entirely.  Speaking of hearing things.

    But you didn't answer my question.  What do we get for modest changes in social security?

    If it's a compromise, we should get something in return no?  Bush tax cuts expiring don't count, since you can't "give" someone something they already have.

    Why make modest changes in social security?  Just for the hell of it?  I'm not convinced.

    You say people twist your words, well you just twisted mine so you wouldn't have to answer my pretty basic question.  Stop changing the subject.

    Parent

    For changes in SS (none / 0) (#100)
    by AngryBlackGuy on Tue Apr 24, 2012 at 05:38:28 PM EST
    We get tax increase on the wealthy and upper middle class, either through greater income participation in entitlements taxes or other measures.

    Many here argue that the default is that the Bush tax cuts expire, and that will provide some leverage  but not as much as people imagine.  The Bush tax cuts cut taxes for lots of middle and lower class people so letting them all just expire is going to hit a lot of people who need help the most really, really hard.


    Parent

    ok so that's the choice (none / 0) (#125)
    by CST on Wed Apr 25, 2012 at 10:46:25 AM EST
    tax increases on the general population or modest changes to social security.  I'd still take the tax increases.  I think it's much easier to lower taxes at some (not very much) later point for the middle and lower classes, than it will be to undo whatever modest changes get done to social security.  I'm not sure I agree with you on the question of who needs the most help.  I know you are talking about the future beneficiaries, but I'd still rather screw myself over now than later.  I'm willing to bet that if the Bush tax cuts actually expire - the ones you want to save will be saved in time for the next election.  If we "fix" social security, there's really no turning back.

    Parent
    What's so ludicrous about (5.00 / 2) (#90)
    by gyrfalcon on Tue Apr 24, 2012 at 02:49:37 PM EST
    your "proposal," and about Drum's, is that NONE OF IT IS NECESSARY to take care of SS.  All that's needed is to lift the *&^%$^ cap on income subject to the SS tax.  End of problem.

    Parent
    OK (none / 0) (#101)
    by AngryBlackGuy on Tue Apr 24, 2012 at 05:39:07 PM EST
    So walk me through how we do that with the congress we will have for the foreseeable 4-8 years.

    Parent
    we don't need to do anything to social security (5.00 / 1) (#130)
    by CST on Wed Apr 25, 2012 at 03:11:15 PM EST
    for the next 4-8 years.  I don't think even the worst case scenarios predict that level of doom.

    Parent
    Fair. (none / 0) (#92)
    by Addison on Tue Apr 24, 2012 at 04:08:02 PM EST
    Or you could make all earnings subject to the payroll tax and credit them for benefit purposes -- retaining the link between money paid in and benefits paid out, and meet 95% of the 75-year "shortfall". (The program could achieve 100% solvency over 75 years by raising the tax rate by .1%).

    Parent
    question (none / 0) (#42)
    by CST on Tue Apr 24, 2012 at 12:33:03 PM EST
    do you think it's delusional because it won't work, or do you think it's delusional based on politics in this country?

    I might give you the latter.  But there are ways around that.  Like winning elections, and using the win to the fullest when you get it.  Sure, you might lose the next election.  Or you might change the conversation in this country for decades as past leaders have managed.  As to the former, I strongly disagree.  Actually, as to both, we can increase taxes on the wealthy without touching anything by letting the bush tax cuts expire.

    Parent

    It will not work (none / 0) (#48)
    by AngryBlackGuy on Tue Apr 24, 2012 at 12:38:56 PM EST
    based on the politics in this country.  

    A public option was never going to pass.  Ever.  Those who think it could have cannot present a coherent path for how it would have occurred, even if a vote were held the day after Obama was elected.

    We are years away from a public option as a possibility politically.

    Parent

    Opinion stated as fact (5.00 / 2) (#65)
    by sj on Tue Apr 24, 2012 at 12:58:57 PM EST
    A public option was never going to pass.  Ever.  

    Also this:
    Those who think it could have cannot present a coherent path for how it would have occurred, even if a vote were held the day after Obama was elected.
    Oh, and this, too:
    We are years away from a public option as a possibility politically.


    Parent
    There (none / 0) (#102)
    by AngryBlackGuy on Tue Apr 24, 2012 at 05:39:55 PM EST
    are many opinions here stated as fact.

    People only seem to notice that when the opinions disagree with their positions.

    Parent

    Speak for yourself (5.00 / 0) (#106)
    by sj on Tue Apr 24, 2012 at 05:55:30 PM EST
    actually, there is a very simple (none / 0) (#8)
    by cpinva on Tue Apr 24, 2012 at 09:55:39 AM EST
    mechanism congress has at its fingertips, to keep benefit payments at 100%, without raising the ceiling or the rate, when the trust fund is fully depleted: it simply legislates a change in the formula for computing benefits. et voila! benefit payments are now at 100% of the legal requirement.

    not that i'm suggesting that mind you, but congress does have that option available. most likely, because the members of that august (cough, cough) body do not want to be hung (and i'm not talking in effigy here), they will not take that route. most likely, at some point (in the middle of the night, when they think no one is watching or paying any attention), they will twiddle with the ceiling, and all will be well in the garden.

    Thank you (none / 0) (#9)
    by sj on Tue Apr 24, 2012 at 09:59:52 AM EST
    for the topic.

    15% Federal Sales Tax.... (none / 0) (#28)
    by kdog on Tue Apr 24, 2012 at 11:32:28 AM EST
    on marijuana.  5% to fund standards & regulation of the market, 10% direct to Social Security.  Abolish the DEA and roll that over to caring for the old and disabled too.  Who wants to be the one to tell Grandma her SS check is getting slashed so storm-troopers can kick down the door down the street?  Not me.  

    Like when some states legalized the numbers and lotto to better fund education...growing up regarding vice can help here too.  

    I predict in 10 years Marijuanna (none / 0) (#40)
    by Slado on Tue Apr 24, 2012 at 12:27:48 PM EST
    will be legal.

    Simply put like prohibition the government can't afford to no longer regulate and tax it.

    Why should all that money head south when it can be sent to state and federal coffers?

    Parent

    Hope you're right... (none / 0) (#56)
    by kdog on Tue Apr 24, 2012 at 12:49:38 PM EST
    entrenched forces will fight tooth and nail to save their place at the teet.

    Our big problem is no sense of national priorities...it bugs me that people even talk about social security benefit cuts when we spend billions upon billions on sh*t we could easily do without.  I say again, the system is busted, fundamentally dysfunctional.  It's why we're arguing about the same problems for 20 f*ckin' years.  It's hard, but not that f*ckin' hard.

    Parent

    The reason people talk about (none / 0) (#103)
    by rjarnold on Tue Apr 24, 2012 at 05:41:13 PM EST
    benefit cuts is that they believe the program shouldn't run very high deficits. This is dumb because there are many ways that revenue can be raised, and its benefits are already at a low level.

    Parent
    I get the feeling Drum is tired (none / 0) (#31)
    by ruffian on Tue Apr 24, 2012 at 11:58:12 AM EST
    of holding up the liberal side of the arguments on this and other issues. Lots of us expected to have more help from the White House in making the kinds of arguments BTD makes here.

    Drum has become a hack (5.00 / 1) (#35)
    by smott on Tue Apr 24, 2012 at 12:21:46 PM EST
    Perhaps not at the Booman level, but that's a hard bar to clear.

    Parent
    Huh? (5.00 / 1) (#91)
    by Addison on Tue Apr 24, 2012 at 03:52:08 PM EST
    That doesn't make sense. How could he get "tired" of holding up the liberal side of these arguments. They don't have literal weight, they are just arguments. And if they are what he believes it's easier to continue with the arguments than not. If they aren't what he believes, he should be honest about that. I don't think he needs to be excused through some mechanism whereby he's fatigued about being right as a blogger because the President isn't right.

    Parent
    Drum is a nice Docile Dem, just right to protect (none / 0) (#127)
    by jawbone on Wed Apr 25, 2012 at 02:08:45 PM EST
    the oligarchic kleptocracy. And its puppets such as Obama, most of the Dem Congress Critters.

    And he wants to keep his gig.

    Parent

    Why a different title at DK? (none / 0) (#36)
    by oculus on Tue Apr 24, 2012 at 12:22:37 PM EST
    [This one's better.]

    Agregate Demand (none / 0) (#116)
    by MSimon on Wed Apr 25, 2012 at 07:22:06 AM EST
    We can increase that by paying some people to make holes and others to fill them in.

    Is that going to help? Really?

    What is needed is productivity and profit. Real profit from lowering costs while increasing output.

    One other thing. No one is as careful spending other people's money as they are when it comes to spending their own.

    At the bottom an economy is about the flow of energy. Until Polywell Fusion starts delivering we are going to need to burn more coal, gas, and oil. We could plant more forests to compensate. A double bonus.