Handwaving.
Because of all the retirees who depend on those transfer taxes. Who, being retired and/or unemployable need that income guaranteed. You’ll be one of them someday yourself, and then you’ll need the next generation of workers to be as obligated as you were. Is that mysterious?
Do you need reminding of what has happened to the stock market in the last couple of years?
Did you know it doesn’t really exist? It’s counted against the deficit. It would be just more money that we’d have to borrow to pay, if we didn’t have a source of constant replenishment. SS is already on a pay-go basis - money that comes in as taxes goes out as payments.
Because this isn’t Cloud Cuckoo Land and money doesn’t grow on trees. Perhaps Fox hasn’t reported that yet.
Nice little ad hominem at the end. And thanks for replying.
Dude, do you realize you just defined a Ponzi scheme in P1 and P2 above, yet continue to insist it isn’t?
I’ll be happy to take care of myself, with the assets that my 15% with-holding is purchasing for me. Can I purchase a T-Bond with that with-holding, and keep that for my retirement, in my name? I’m down with that, if you are.
But I can’t do that, can I? You just said so yourself, above. That money is going to pay off a previous generation of retirees.
That is a Ponzi scheme. Someone is being promised returns (the retiree generation) that is being paid for with money that is not theirs (it’s mine). The assets that they supposedly purchased to safeguard the value of their contribution (the ‘trust fund’) doesn’t technically exist.
That’s a Ponzi scheme. How can you continue to argue that SS isn’t a Ponzi scheme?
The last fiscal stimulus argument we had as per usual for you you used a bunch of bs numbers to claim that America had the highest fiscal stimulus of any major economy. You used some numbers that added fiscal stimulus to drops in revenues and tried to pass them off as OECD numbers. And in this thread you’re using yet more bs numbers and claims that you cut and pasted from everybody’s favourite nutjob propaganda outlet, the Heritage Foundation. And then when called on it you did your usual thing and ran away. Why not reply to my original post too?
Yeah, go on, tell us all about how fiscal stimulus hasn’t worked and how you and the Heritage guys think the austerity cuts will work, specifically in relation to the economic recovery, so we’ve got something to look back on in a year or so.
And exactly how are the markets showing that they’re worried about sovereign debt?
Nice try Dick (and Elvis), but most people understand that the fund will run out of money way too soon; and when it does (indeed, even before it does thanks to those dollars used for general expenditures) it will be a huge drain on the other government spending that so many on the SMDB love so much.
To quote Newsweek, certainly no friend to the fiscal conservatives:
And as they say further, and was the point of one of my earlier posts
The problem is, SS (and Medicare) aren’t insurance programs as we normally understand them; insurance companies maintain cash reserves and something akin to an endowment to do as you describe. Instead, the Treasury uses those funds to pay for normal Government operations (which more and more frequently is paid out in the form of entitlements). This is exactly what makes it a Ponzi scheme. (Note I’m only talking retirement here and not the disability piece of SS).
We’re paying today’s relatively wealthy retirees with today’s money from relatively poorer workers. It’s not going into Al Gore’s lockbox, nor is it being invested in corporate bonds or some other revenue generating source. Not that I recommend either approach, although both are better than we have now. I recommend we cut benefits to both programs.
This president only makes the problem worse, by increasing health care entitlements and suggesting we give $250 ‘COLA’ checks (even though there was no increase in cost of living) as a way to buy seniors’ political support. Disgusting.
Personally, I think that the biggest problem with SS is that it can’t decide if it’s supposed to be a pension, as we understand that word, or a traditional entitlement you get for hitting 65. Until we figure that out, we’re toast.
Excellent post. The one thing I would add is that anything that ends up in the ‘traditional entitlement’ box, whether intended or not, means we’re toast.
You and Newsweek are conflating SS and Medicare, the exact kind of thing fiscal conservatives do when they’re campaigning to gut SS. SS is only a few percent of the total long-term debt of the two programs. Fixing healthcare is the ballgame as far as America’s long term deficit problems go. Fix healthcare and you fix America’s deficit overnight without cutting another dollar from anything else. Just get the percentage of GDP the US spends on healthcare down to the levels of other countries and that’s it.*
But SS is actually fine if you do nothing to it. It will never go bankrupt, according to the CBO even in 34 years when the trust fund is exhausted it can still pay 83% of benefits, and 83% is far and above 100% of today’s benefits. And it can do that for the next 75 years which is as long as we ever do projections for.
And SS has far more reserves than any other insurance fund in existence, probably more than every major insurance company put together. How many insurance funds have two trillion in US bonds on their books and how many can guarantee that they’re fully funded for the next 34 years?
*And Medicare is actually fantastic value compared to private insurance due to the government’s bargaining power. The reason it costs such a huge amount of money is it pays the healthcare bills of virtually all Americans over 65 and they use a vast percentage of total healthcare due to them being old and everything. Medicare costs are soaring because healthcare costs are soaring far in excess of inflation. That’s almost all down to the medical-industrial complex, hospitals, doctors, insurance companies, health insurers, big pharma having bought and paid for the GOP and enough Democrats to give them control of healthcare legislation. It’s a hell of a problem to fix due to the overwhelming power of their joint lobbying capabilities but it has to be fixed in the next decade or the bond markets will fix it for us.
They certainly have a better track record than corporate bureaucracies, FWIW.
That sounds great. Then my plan above should work, shouldn’t it?
Stop taking 15% from all of the current workers via their FICA with-holding, and pay out current retirees out of the reserves. We have $2 trillion in reserves, after all…don’t we?
Then make it voluntary.
We should all want to stampede into it of our own accord, and pay the premiums out of our own pocket. Stop taking 3% of our earnings by force, and just wait for the customers to show up at the front door.
Right?
If it was that great of a deal, there is no need to make it mandatory…is there?
I’m still not seeing many suggestions in this thread that even conservative voters would believe likely to reduce the jobless rate in the short run.
Permanently (and credibly) reduce the cost of hiring and employing people.
- Eliminate FICA and Medicare costs for employers
- Repeal Obamacare and the cost that will impose on employers
- Eliminate workmen’s compensation insurance and those associated costs
That’s probably about 20% off the top in California alone.
Why don’t you spend 20 seconds googling and find the FDA’s letter that the article mentions? Is doing such research something only libertarian whiners can accomplish? It wouldn’t take you much longer than making your admittedly uninformed response.
It looks like the main reason that the FDA thinks that such genetic tests fall under its regulatory powers is because the law (21 U.S.C. 321h) lets them regulate instruments “intended for use in the diagnosis of disease or other conditions.” It seems a stretch to me but whether or not it was the Congress or the FDA that made the decision is not an important difference here. It is still an example of unnecessary government interference, this time with people learning about their own genes. I doubt such interference will have a positive long-term effect on the prices of these tests or their general availability.
Did you read the Rubenstein article I linked below? Obviously reducing immigration would reduce the jobless rate. If the economy isn’t creating enough jobs to cover the growth of the U.S. population, all we need to do is stop the U.S. population from growing, which can easily be done by cutting off immigration, because nearly all of the growth in the U.S. population comes from immigration. Reducing low skill immigration might be a good start:
http://super-economy.blogspot.com/2010/01/immigration-from-haiti-is-terrible-way.html
Since you included no cites I’m having a hard time following where you are getting your numbers. That noted right-wing, mouthbreathing, librul-hatin’ mouthpiece the New York Times says that
This is not 34 years away. And you cannot necessarily count on even those rosy estimates
You say that it will never go bankrupt. Maybe in the legal sense, but your solution is… we just pay out some reduced percentage of what was ‘promised’ to retirees? Tell you what, make it 5% of what was promised. Problem solved.
Or did you want to stoke inflation and just print more money? Borrow more from the Chinese? Run Greece-like deficits and be faced with their situation in 5-10 years?
We’re paying today’s recipients with today’s ‘investors’. That makes it a Ponzi scheme. Since you think it’s an insurance program, I could almost agree with you if the US were running a surplus - that would be the equivalent of the cash reserves a Nationwide would be required to hold to pay claimants. Or if the money were generated in some revenue-producing source (again, like a private insurance company would do). Neither is the case: Instead, we spend it on current stuff.
I agree low-skill immigration should be restricted and immigrants admitted selectively based on skills/education. But changing our immigration policy would not have much effect on the jobless rate in the short run.
The term Ponzi scheme means more than simply paying today’s beneficiaries with money contributed by tomorrows beneficiaries. There is an element of fraud associated with Ponzi schemes. That is why we dismiss people who keep describing social security adn medicare as Ponzi schemes. I don’t think that we should pay significantly more attention to people who say Medicare and Social Security is kinda like a Ponzi scheme (except there is no fraud involved) any mroe than we should say taht owmen who engage in casual premarital sex are kinda like hookers (except they don’t get paid to have sex with strangers).
This is not true. This may have been true during the first generation’s worth of Social Security payments but most people who paid social security out of their first paycheck do not get back far more than they invested, its one of the criticisms of socials security, the low rate of return.
I know of a lot of countries that have given up communism, what countries have given up socialism?
If you redefine Poniz schemes to mean whatever Ponzi schemes and socials ecurity has in commmon and ignore the ways in which Social security is not like a Ponzi scheme.
Because fraud is not a meaningful element of the definition of Ponzi schemes? If Madoff had told his investors up front that their returns were coming from the investments of future investors, do you think he would be in jail today? You’re just trying to improperly use a derogatory term to describe something you don’t like.
For example, just because I don’t believe in premarital sex doesn’t mean i get to call women who engage in premarital sex hookers (they have a lot in common in teh sense taht they both have sex outside of marriage).
Please explain how so.
The flip side of that question is how much can the government continue to spend paying for entitlements, social services and whatnot until it is no longer sustainable?