No problem at all!
And, btw, we still have additional spending on college level education as well as all the private money spent on education (at all levels).
Well, if this is what Greenspan means…If he is talking about what will be needed to keep S.S. solvent 40 years down the road (based on uncertain growth projections), then why the hell is he talking about it in the context of concerns about the current deficit and the fact that the baby boomers are just starting to retire? What the heck does S.S. have to do with the current deficit issues when it is in yearly surplus, will remain in yearly surplus for about 13 years, and will continue to be solvent after that (because of the big surplusses built up over the years) for another ~25 years after that?
If you want to give the interpretation that Greenspan is just talking about social security in the context of an issue way down the road, you have to explain why the hell he seems to think this has anything to do with current budget deficits and the coming retirement of the baby boomers.
As we discussed and you agreed to, because the broader fiscal crisis is not 40 years down the road. It is approaching much sooner than that. The only thing he has said (as far as I know) is that spending cuts are better than tax increases to solve such fiscal difficulty. I realize that you have never met a tax increase that you don’t like ;), but Greenspan seems to think that spending cuts are better. I still don’t think, however, that he is talking about cutting benifits to current retirees (with the possible exception of means testing. I’ve never heard him mention it, but it would definately qualify as changing benifits for current retirees unless instituted slowly).
You see, Greenspan is talking about the fiscal crisis coming shortly due to the rising costs of the Social Security system. We will have to raise taxes or cut spending. While there may be ways to cut spending within Social Security without cutting benifits. Strictly speaking he is only talking about cutting spending in general. From what I have heard him say, he doesn’t care if the cuts come from Social Security, Military, or the Congressional Post Office. I certainly don’t have a mind reading probe in his skull. And I would most definately not presume to speak for him. However, simply by listening to what he says (as opposed to what I want to argue against), I don’t think he has said what you are accusing him of.
BTW, I like how the 40 year projections are “highly conservative” when you want to say that SS is ok for that long, but they are “based on uncertain growth projections” when you want to say that we should not even consider spending cuts until then. It’s cute.
By the way, not everyone believed that the “excessive” surpluses were likely to materialize in any event. See here and here. Perhaps Greenspan needs to spend a little more time reading the work of liberal think-tanks!
But, hey, everyone is entitled to be wrong now and then. What would be nice is if Greenspan were to now admit his mistake, say that the revenue losses from the tax cuts were clearly way to draconian, and support at least a partial repeal of them…instead of blathering on about how we have to cut benefits of a program that continues to run large surpluses.
That was my point. Its why I used the word “would”. How bad would it have been if we had instituted a huge social spending program based on those projections?
I don’t think you have been paying attention. He has not supported the deficits. When he testified before congress recently, he said that he would rather the deficits be solved through spending cuts. But that tax increases would be preferable to continued deficits.
Dude, seriously, can you substantiate a little of this? What has he said should be cut? When did he say it? Please stop accusing people of things you cannot prove. It really does not become you. Am I wrong about this? Can you really not see the difference between spending cuts to help pay for the rising costs of Social Security and Social Security benefits cuts?
You’ve got to be kidding me. You don’t see anything unscientific about polls??? Even after it has been demonstrated that polls can be manipulated through the questions posed to the participants.
No, it doesn’t necessarally mean that polls can’t provide accurate data, it just means that you can’t rely on polls to provide accurate data. Polls, by their very nature, are highly unscientific.
Greenspan made some comments in February of this year about the need to cut benefits for future retirees. One news report can be seen here
Great discussion on this thread btw!
But you’re the one making assertions about public opinion. If there is no way to measure it, then how do you claim to know what it is?
Rocza gave you one article. Here and here are a couple of others. Now I’ll admit that now that I read the full articles, Greenspan was typically Greenspan in being vague, so one could argue about what exactly he is proposing. He does say that things should not be changed for people “at or near retirement.” But, still, the emphasis in his remarks seems to be that there are these horrible deficits and also these shifting demographics and various ways to effectively reduce S.S. benefits (such as raising the retirement age) need to be considered. This discussion seems incomplete to me if he doesn’t acknowledge the fact that it is not S.S. that is contributing to the deficit but that it is in fact offsetting some of the deficit with its surpluses. And, the net effect of making changes to social security benefits is to postpone the day when year-to-year social security surpluses are no longer used to fund the rest of government, let alone starting to pay back what has already been borrowed. If we keep postponing this, don’t we have to essentially acknowledge at some point that we are using money collected from payroll taxes to fund the rest of government on a continuing basis?
I agree with Greenspan that we need to get our fiscal house in order to prepare for the day when the S.S. trust fund is no longer the cash cow that it has been. However, the way to do this is to deal with the non-S.S. side of the equation…i.e., to start operating the government so we are actually not dipping into S.S. to fund other stuff, not to try to push the cow to produce more milk. And, the fact is that Mr. Greenspan has endorsed some of the policies (i.e., the income tax cuts) that have pushed us back to the point where we are borrowing heavily both from the S.S. trust fund and additionally, whereas at the end of the previous administration we had finally gotten to the point where we were not borrowing at all (although, of course, we still had outstanding debt).
Honestly, pervert, sometimes I just don’t understand you. If you could explain to me the distinction in contexts that you believe led me to phrase this in two different ways here, I’d be much obliged. I don’t really understand what you are getting at. In both cases, I wanted to make the point that the estimated 40-year solvency of S.S. (i.e., to the point where benefit payouts first exceed money in the trust fund) is an estimate, and an estimate that many argue is based on pretty conservative growth assumptions…so that the probably is more likely to occur later than that estimated date than earlier than that date.
Why Greenspan did not propose benefit cuts for current and near-term retirees should be pretty obvious. The retired vote in large numbers, and if this were even mentioned Bush could start packing up right now. Saying things should be cut in a decade is a lot less inflammatory.
Pervert, would you mind giving a cite as to a real crisis in 17 years? If the crisis is expected in 40 years, conservatively, the error bars on the projections are such that it makes no sense at all to cut benefits now.
As for the surplus issue - cutting taxes somewhat during times of surplus does make sense, as does paying down the debt. The distribution of the cuts is open to debate. Bush did use this as justification for the proposed and passed cuts. The problem is that when the surplus disappeared he used the bad economy as a justification of the same cuts! When you use A and ~A as justifcation for action X, one can reasonably assume that you want X no matter what happens.
I think you are getting that “emphasis” from the news articles instead of the actual remarks that he made. This is a link to his prepared remarks. It does not include the question and answer, but I think it jives nicely with my impression of his remarks that day.
Well, how about this paragraph “*I certainly agree that the same scrutiny needs to be applied to taxes. However, tax rate increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base. The exact magnitude of such risks is very difficult to estimate, but they are of enough concern, in my judgment, to warrant aiming to close the fiscal gap primarily, if not wholly, from the outlay side. *”
Again, if you read his remarks, he is talking about the long term problem of funding very generous retirement benefits for an ever increasingly old population. He is not talking about reducing benefits for current retirees. At one point, he makes the point that SS is not the problem at all (in relation to estimating the costs of taking care of more older people). He suggests that medical costs are much harder to estimate, and possibly even more expensive.
No. This is only true if you assume that we are going to change the benefits to those currently retired or those who will retire in the next 10 years. As I have been trying to say to you this is fear mongering on your part (or on the part of those news outlets you seem to be accepting uncritically).
The problem is not that we may no longer be able to rely on SS funds for other purposes (although that is certainly when the problem will start). The problem is that some day very soon we will be paying something like 30% of GDP just for retirement benefits and Medicare. Surely you can see that changing the benefits then will be next to impossible.
But doesn’t this assume that the surplus will go unspent? What would you have us do with the money borrowed from SS now? Seriously? What would you do to solve this issue?
Well, no that is not true. We have been borrowing from SS for some time now. The “trust fund” is simply money that the government has borrowed from Social Security. Or, perhaps it is money that Social Security has invested in government bonds. Either way, it is not true that the Clinton administration somehow stopped borrowing money from Social Security and balnced the budget.
I know. That’s part of my charm. 
Well, it seemed to me that you wanted the estimates to sound a little more reasonable when you used them as a reason not to adjust SS benefits. So when you say somethin like (not an actual quote) “We don’t need to cut benefits because the real fiscal problems of SS are 40 years away”, you called those extimates “conservative” meaning not radical. However, when you wish to imply that even then we may not have to make cuts, you say that they are based on uncertain projections. I didn’t mean it in a bad way.
This is a link to a summary of the Trustee’s report Go down the page a little to the first graph subtitled Assets as a percentage of annual expenditures. Note the OASI line. This is the percentage of assets as a percentage of annual expenditures for retirement benefits. 2017 is the year (approximately) that it begins to go down. That is, the year when revenue into the system no longer pays for the expenditures of it.
If you then look at Chart B, you will notice that this is when those same benifits rise from under 5% of GDP to over 6 for the forseeable future. It is also about the time when the Health insurance begins to rise steeply past 5% of GDP and continue to rise for the forseeable future. From Chart A, those portions havn’t paid for themselves since around 2000.
Chart D, I think explains the problem better. It shows that around 2017 the health expenditures will begin to run a significant deficit. This deficit looks to be around 1% of GDP by 2030 or so. (I guestimated that from Chart D, so forgive me if it is grossly in error.)
Finally:
The point of all this is that the problem of increasing costs of Social Security have to be addressed sooner rather than later. Not to cut the rug out from under seniors. Not so that we can keep borrowing from SS to pay for other programs. But so that whatever solutions we settle on can be imposed on those retirees who will not retire for a long time yet. That is so that the pain will be as little as possible.
Just for completeness, you can get the full report for this or the last few years here.
The real question is “What color is the sky in your world, Mr. Boortz?” I’m sure he’s been there and he should know! (Cough, cough, sarcasm, sarcasm.) It’s so easy to sit in a radio sound booth with no windows and share your outlook on the world, isn’t it?
Isn’t it funny how corporate welfare made these people (and I use the word “people” lightly) the clowns they are, so red white and true blue, and ready to to steal that last bite of food from out of your mouth! What’s mine is mine, and what’s yours is mine!
Don’t listen to those bleeding heart conservatives…no one of any intellegence does! Everyone knows that they’re only on the air for the “shock value”. Now, whatever value that may be exactly…escapes me. They’re so cushy rich, they have to remove their wallets from their back pockets just to avoid sitting down off-balanced! (The secret is: Don’t believe a word they say!!!)
One day, Corporate America will comes knocking on THEIR door to take away THEIR job and livelihood for the past 25 years, only then will THEY understand. If downsizing and outsourcing jobs overseas is SO good, why don’t we start with all the CEOs? Oh, don’t worry, you’re sharp…you’ll find something else soon. :rolleyes:
- Jinx
P.S. I earned my right to be damn angry! I am a young victim of Corporate America’s games before I even had a chance to earn my so-called “fair share” in this rat razz (sic)…despite Dad’s high-honors in business from NYU. What a crock. I’d like to see the tables turned on those “trickle-down” monsters.
Well, we’ve kind of beaten this Greenspan social security thing to death. And, understanding Greenspan can be a lot like reading tea leaves, so perhaps he’s not being quite as disingenious as I first thought. The fact remains, however, that he supported big increases in the payroll tax to get social security on a sounder footing back in the 80s, then he more-or-less endorsed the Bush income tax cuts. And, now he seems to be implying that at least part of the budget mess produced in large part by these cuts (along with war spending, the temporary slowdown in the economy, …) ought to come about through adjustments to social security benefits.
Yeah…It is worth dividing up the issues of social security and medicare because they are quite different. Social security is solvent for another 40 years under current estimates and its share of the GDP is not predicted to skyrocket. As Chart B in your link to the trust fund summary shows, the social security’s share of GDP is expected to ramp up from about 4.5% to 6.5% between now and 2030 and then level off after that.
It is Medicare that is more of an immediate problem since its estimated insolvency date is less than 15 years hence and the projected costs are predicted to just keep going up and up as a share of GDP. This, of course, is part of the larger issue of the skyrocketting costs of medical care for which there are no easy solutions.
Well no…Anything that lowers the amount of benefits paid out anytime before ~2018 would end up prolonging the time period under which we continue to borrow out of Social Security’s surplus. And, even if the benefit changes kick in after that, they will start to affect how the trust fund is paid back.
I’m not even saying that no benefit changes should be implemented…However, they should be implemented with the clear understanding of where the money is coming from and very clear acknowledgement of the fact that the surplusses in social security have thus far meant that those payroll taxes are going to fund other parts of government, especially when we get into discussions about tax fairness.
Well, I don’t know where you get the 30% figure. The fund trustees only forecast out 75 years at which point they predict it will be up to ~21% of the GDP. Note, however, that by that time, the division has social security at less than 7% and Medicare at ~14%. So, again, the issue is more with Medicare than social security, and it is an issue that necessarily involves the issue of skyrocketting health care costs in general. (And, uncertain predictions of these costs since, as Greenspan notes, there is a lot more uncertainty in predicting future Medicare payouts than future Social Security payouts.)
Well, I don’t understand the vagueries of federal borrowing well enough to give a real informed answer on that. However, even if we do use the social security surplus to fund government for now, what we should not be doing is inacting tax cuts that cause us to borrow a lot more in addition and then to suggest that the budget crisis is in any way the fault of social security which is, in fact, at the moment part of the reason why deficits are not even bigger.
Well, again, without getting into the vagueries of the borrowing process, what I was trying to say is that Clinton balanced the budget. In particular, as a look at the historical tables, Table 1.4 in the federal budget shows, the budget was in surplus in 1998-2001. In most of those years, the surplus was less than the surplus in the trust funds which means there was a deficit in the rest of the budget which was offset by the surplus in the trust funds. However, in 2000, the surplus was actually larger (by a hair) than the surplus in the trust funds, meaning that government did not need to borrow any money from them in that year. (I don’t know what this means in terms of what they actually do with the money in the trust funds since, as you noted, it is presumably still invested in government bonds. I guess that the government could invest the S.S. money in new bonds while paying off older bonds as they come due or something like that.)
Right. But, that is not really a crisis point for social security because of the huge trust fund it has built up, which will continue to be able to pay out full benefits for another 25 years after that.
The problem for the Medicare trust fund is much more the issue that needs to be addressed soon since it is expected to be depleted by ~2019…and the exact date will depend on how medical costs rise.
Well, I agree that we have to worry about these things. But, we should make adjustments in a fair way. With Medicare it is clear that the problem really does need addressing soon. With social security, it is much less clear since the fund is estimated to be solvent for another 40 years and, as I noted, whether it goes insolvent then depends on future growth rates. We may want to consider adjustments, but we probably don’t need to over-react.
However, what we do need to react to pronto is the fact that we are currently borrowing heavily outside of social security and using the social security trust fund to fund some of the rest of government operations. This seems to be the more dramatic issue that needs addressing and clearly the Bush tax cuts were a step in exactly the wrong direction. And, when you start coupling this with notions that we need to start considering cuts to future social security benefits because we have a ballooning deficit, which is in large part due to these tax cuts, then you are clearly going about things in a way that I believe is unfair. Our fiscal house is not out-of-order because of a lack of social security revenues through the payroll tax; it is out-of-order because of a lack of general revenues through the income tax.
Just 4 things to mention really quickly. I’m not at all certain that you can say our current budget deficits are “due in large part” to the latest tax cuts. they certainly contributed, but I’m not certain they were the largest factor at all.
Secondly, you forgot to mention the other possibility for the budgetary crisis. when you say “Our fiscal house is not out-of-order because of a lack of social security revenues through the payroll tax; it is out-of-order because of a lack of general revenues through the income tax.”, you don’t mention that our house is out of order because we spend too much. Way too much in my opinion, but certianly too much.
Third, I’d like to stress that you have to be careful when claiming that SS will be solvent for 40 years. While it may be true, it does not mean that there will be no pain associated with keeping it solvent. The fact is that it will have enough funds to meet projected expenses because all of the money which was not used for expenditures in the last 20 years or so, was borrowed. That is, there is a large portion of the national debt which will have to be paid back, and a large portion of the budget which will have to be made up in other areas. You understand, I’m not saying that SS is insolvent, or that we will not pay the loan back. But we will have to make up the revenue shortfall AND pay the loan back from somewhere. That is, higher taxes spending cuts, borrowing from other sources, or some combination of these. All of which have their plusses and minuses.
Lastly, for clarification, I pulled the 30% out of my rear. Sorry about that. I had heard something like that number and forgot to go back to it after I found the link to the trustee’s cite.