My, those working class families sure are industrious.
Upper middle is the new working class.
ETA: maybe that’s true if you live in WSJ-world, where to illustrate the hurts of the recent tax cut rollback on ordinary Americans, the LEAST wealthy of the examples had mid 100K in income – in RETIREMENT!
My original statement was intended to mean basically this: “you can’t fix social security without large tax increases to middle class families OR a cut in benefits OR structural reform.” There was actually one or in my original statement, which I assumed implied that the three options were not linked, but that instead I was saying you have to pick at LEAST one of the three. Since I see where that may be confusing, I’ve clarified. So basically there are three possible ways to fix social security, and I’ve never seen a viable plan that doesn’t go at least one of those routes. I wasn’t saying you had to go down all those routes to fix it.
Anyway, BobLibDem’s plan includes benefit cuts and structural reform, thus going down two of the three paths. My clarified claim for those who misunderstood me, is that you can’t fix social security without doing one of the three. Not that you can only fix social security by doing all three things.
Let me point out a problem you’ll quickly find by the way, with the obvious way you might see: simply remove the payroll tax income limit, thus getting all the funding you need. Since it’s a payroll tax, it’ll only collect so much, and much of the money out there that flows to the truly wealthy isn’t generated in a way subject to payroll taxes because it isn’t ordinary wages. Now, you could argue that you can just apply a payroll tax to 1099-DIV income and etc, but that’s structural reform already.
I’m not advocating we run all government like a business. What I was saying is that it’s not a bad idea for self-funded agencies to be allowed to continue to run without being subject to cuts in times of budgetary spending decreases. I’m not familiar with California, but when I worked for Virginia agencies that generated more than they required in outlays, they could keep anything they needed normally to cover costs, but excess was not retained. So they didn’t “pocket the profits”, it went back to the legislature to appropriate. So if one agency did really well all the directors didn’t get nicer chairs and state-issued cars, it just meant they weren’t a drain on general revenues and kicked money back to the State budget.
There are a lot of things at play when determining how to raise government revenue. People of a strong macro-bent will just look at government revenue as a portion of GDP and ignore the details, but sometimes the details of how you collect it can matter. One nice thing, where and when it works, about charging fees and providing for some services through fees instead of higher taxes is it’s self regulating relative to the amount the public wants to use the service. If lots of people like to use parks, the expense of maintaining the parks will go up, but fees collected will go up as well as people pay for $10 passes and etc.
At the same time it’s probably never a bad idea for things we agree should be government services to receive some level of general revenue support so that all the parks don’t go away because of a bad summer (weather-wise) and low attendance. There is a question of access to parks and recreational sites for the poor, as well, that can’t be totally ignored.
This business of fees for parks is actually a bit alien to me. In Virginia you mostly get into state parks for free, certain ancillary services and activities will cost money and there are things like cabin rentals and etc that cost money, but you get into the park for free. I was actually hit by a bit of “sticker shock” the last time I was in Texas and was driving down to Lake Travis (a lake near Austin that actually serves as a portion of the city’s drinking water supply) and had to pay $10 to a park ranger to get in. That was very foreign to me, and it does raise some concerns.
“Structural reform” is very open-ended. I, for one, think Medicare can continue without any change in the program itself because nearly all of the drivers for Medicare spending are the increases in medical costs, and much of that–as documented in Steven Brill’s excellent cover article in this week’s Time–is caused by bizzare incentives and outright manipulation of the market by the healthcare business complex. Fixing that problem would not only solve the projected increases in Medicare and Medicaid funcing, but would drmatically improve the private market for consumers–without increasing taxes or cutting benefits. If this counts as structural reform, sign me up.
As for Social Security, we made a deal in 1983 to deal with the demographic time-bomb–the Greenspan comission increased payroll tax to cover the baby boom retirement. At the same time, income taxes were lowered on the wealthy, which caused the government to start running deficits, but the excess payroll tax paid for SS was designated the “SS trust fund”. That’s now grown to about $6 trillion of today’s debt, and I suspect most of the “Fix the Debt!” caterwauling is based on the fact that retirees will now need to draw from this trust fund built up during a time when income taxes were low. So now that the rich have to pony up for the free ride they got after 30 years of lower taxes, naturally they’re crying that the trust fund is a fiction and, gosh darn it, retirees are just going to have to accept less. Bullshit; the middle class paid into it, so now it’s time to raise taxes on the wealthy to cover–IMO, raising taxes to fix SS isn’t just a good idea, it’s a moral imperative as part of the deal that was struck in 1983.
Finally, it seems a commonplace of modern American politics that we need to “deal” with some future financial problem today to avoid dealing with a worse crisis in the future. We have to cut Medicare/SS benefits today to avoid worse cuts in the future. We have to cut government spending now to avoid deeper cutrs in the future. Funny thing is, once that future date comes, it isn’t clear that anything at all was “solved” with this pre-emptive action. When it comes to government financing, it just doesn’t make much sense to try and solve problems that may occur 10+ years in the future; either the projections turn out to be phony, or future Congresses/politicians just ignore the solution–witness the common idea that the SS trust fund set up in 1983 “doesn’t really exist”. The problems associated with federal debt and government spending can only be addressed when they have real-world consequences in the short term. Of course, if the “real-world consequence” is that millionaires risk losing some of their income, it makes sense to raise these issues as boogeymen now and convince useful idiots in the media that these hobgoblins are real.
Remove the cap.
Nonsense. The people who provided the money are providing the oversight – if they cease to be satisfied, no more money. That’s what’s known as The Superior Wisdom Of The Free Market[tm].
Absolposilutely. They got the money by providing a service for which customers chose to pay.
No, it isn’t the free market. Government services/operations along the lines we are talking about are inherently monopolies. There isn’t a competing “Acme Trademark and Patent Co.” down the street where inventors can take their business to acquire legal protection for their intellectual property; they have to go to the Patent and Trademark Office.
Healthcare costs will always be a problem when they grow faster than the underlying economy. Healthcare costs in other countries, specifically in the EU, have consistently grown faster than the economy. This is even without the privatized medical system we have in the United States, which is somewhat unique among OECD countries. If even European countries cannot stop healthcare costs from growing faster than the economy, I’m highly skeptical of any claims that just taking a sword and attacking the big evil health insurance companies will magically allow America to do what no other country in the OECD has done.
[For some background statistics healthcare spending went down for the first time since the 70s in a few European countries recently, most economists link this to the economic downturn thus demonstrating healthcare is not wholly immune from economic factors. However, before that healthcare grew with an alarming regularity in Europe, and at a rate significantly faster than the economy or the inflation rate grew. Any large government expense that grows faster than the economy is going to require some fundamental alteration at some point, because such a trajectory would eventually lead to that one cost being too large for the entire underlying economy to bear.]
I’m not concerned with present day or near-term retirees. Any reform would never affect them for political reasons. I’m not advocating for any backing out of already committed payouts for anyone anywhere close to retirement. But ultimately without structural reform social security, as a paygo system, is simply unsustainable. Smart countries in Europe, like Sweden, recognized that a paygo system relies on certain demographic assumptions that you just can’t rely on long term. So they have a defined contribution, variable benefit plan. It works very well, and the way they transitioned was smart too. They basically made the old system a piece of debt they had to pay down over time, current and near-term retirees got everything they had been promised. But beyond the cutoff no one else could get into that system, and over time Sweden will pay down all of its obligations under that system and it will no longer exist. Meanwhile, everyone else went into the new system. This one time event did mean a generation or two had to shoulder a higher burden, but relative to burdens other generations in the past have shouldered it isn’t that big of a deal.
Lots of problems can be dealt with immediately. The problem with approaches like the debt ceiling “Super Commission”, long term deficit reductions, and etc is, as you say, future Congresses are not really bound by the acts of prior Congresses and will do whatever they want and whatever is politically expedient. Switching to a Swedish style approach wouldn’t be something you’d have to do that way, it could happen right away, the effects just would not be immediately felt.
Of course you aren’t, because in all discussions of SS and Medicare, it’s assumed that the people to suffer will be Millennials and only Millennials. We’re already paying in at a 3:1 give-to-get ratio, so why not fuck us a little harder?
As medical services improve, countries naturally want to spend more on them. A high value is placed on health. This doesn’t confuse Europeans, but of course medical entitlement spending will lower the intelligence of debate in America among those who equate taxes with “stealing.”
Anyway, U.S. spends more than twice per capita on healthcare than France does, and more than four times what Israel does, despite that both France and Israel outperform U.S. on life expectancy and infant mortality. I’m sure Martin Hyde is aware of this; why did he write to obfuscate?
And why should Soc Sec or Medicare enter into the “fiscal cliff” debate at all?? Yes, we want to study long-term financing for such programs, but such off-budget items of long-term concern should be separate from last-minute budgeting shenanigans. That there is any discussion of them at all in a thread about GOP’s staged “fiscal cliffs” suggest that the forces of ignorance are winning.
The sublime Ms Maddow raised a very interesting point last night, which still has me scratching my head. Yesterday was a huge day on Wall Street, the Masturbators of the Universe were giddy with joyous enthusiasm, went up like a rocket…
The day before what may well be known as Black Friday for our generation, the day the sequester buggers our economy but good.
Her question, and a good one it is, is “Why? Howcum?”. Do they know something we don’t know, like maybe there is a secret agreement to avoid the Fiscal Clap? No good reason to think so, with both Houses shrugging and adjourning. Are they all just nuts, stampeding to follow the lead of the alpha lemming?
My guess is that they are rushing to sock away some cash before the trajectory of The Shit intersects the locus of The Fan. But that doesn’t work all that well either, because people are buying stock, not selling it so much as buying, buying, buying. Stock that very likely is going right down the toilet.
Da fuck?
Reporting on comments by Himself regarding the meeting today…
How long can America tolerate a leader who doesn’t know the difference between a Jedi and a Vulcan?
Maybe whatever race Yoda belonged to eventually evolved into the Vulcans. They both have pointy ears and are green(ish) after all.
Interesting look at the point of view of Obama’s opponents:
http://news.yahoo.com/why-republicans-think-obamas-back-against-wall-sequester-131700318.html
This is just silly. Maybe you should ask yourself what is bigger, $40 billion per month or $85 billion per year. Then once you have your answer, you could check and see if there was any news on the bigger of those items that might have caused Wall Street to be happy.
Those are the same people who thought Romney was going to win PA, OH, MI, WI, and a few other places, based on some Fox reports about voter attitudes.
Oh, wait: “you’re not in the best position here, no matter what the polls say outside,” says Rep. Tom Cole (R) of Oklahoma.”
Yep, same fantasists.
proof positive he’s a ferner.
Well, hoss, maybe the real answer is that simple. First time for everything, I guess.
At least Obama has a good sense of humor about this: