TThere is exactly one fair solution. We raise income taxes on the richest Americans, and use the money to buy back the treasury securities that are held by the Social Security Trust Fund. There is no other fair solution. Every American, including the rich, pays into the trust fund on an equal basis. Everyone should be treated equally on account of our equal contributions.

in our current economic environment, i completely disagree. first, i don’t think payroll taxes in general make any sense. let’s get rid of them.

on the other hand, i’m all for a big increase in marginal tax rates for high incomes to something like 90% (pick your income number and allow for some income averaging).

1) we don’t need to pay for SS with taxes and 2) the trust fund is a political, not economic, construct. let’s recognize those realities and create a tax and spending plan that makes sense.

WTF! End both wars Now before you even talk about cutting Social Security!

He can side with the rich, and balance the Social Security problem on the backs of working Americans now and when they are too old and broken to work. Or he can side with the people who overpaid for years so the rich could have tax cuts without wrecking the budget.

It isn’t a hard decision for a Democrat neoliberal.

Fixed.

Oh, the trust fund is quite real — that’s why the brokerage firms want to get their mitts on it.

By the way, cost overhead on privatized pension and old-age insurance plans worldwide typically runs about 20%, if you’re lucky. With Social Security, it’s well under 1%. That’s because government bureaucrats don’t get paid more than $200k a year, whereas that’s the starting salary of mid-level executives at big-money private firms. Hell, the CEOs pull in tens of millions (if not hundreds of millions) a year.

The wars will end when we stop selling arms to Israel and others.

How are we to pay for SS and, by extension, Medicare?

“It isn’t a hard decision for a Democrat.” gotta disagree about that.

Means testing is an old concept re SS; I could support such IF the lid on employee contributions was lifted completely.

Gore’s ‘lockbox’ no longer sounds so funny doesn’t it?

And as Juan Gonzalez mentioned yesterday on DemocracyNow,”JUAN GONZALEZ: Right. But my question, obviously, as we’ve discussed this before, the idea that a particular part of government services is costing more, it’s never, for instance, raised about the Defense Department, that the Defense Department is costing too much or we need to cut back on defense spending.”

Everything you need to know about Commission cochair Alan Simpson.

But, there’s more!

Politically this idea is suicide not to mention that poverty among the old will increase rapidly much faster than a straight line connection between X amount of dollars cut X amount of old folks become poor.
X amount of dollars cut means nursing homes start loosing future customers who can’t afford it and facing the choice to eat losses or kick out people who can’t afford nursing homes anymore.
State Governments already underwater will not pick up the slack.
More old people desperate for cash will reverse mortgage their homes thus pushing home prices even lower as banks desperate for cash unload those homes for quick sales by lowering the price more.
Old folks don’t spend much but they do spend on basics the basics market will take a hit.

Every American, including the rich, pays into the trust fund on an equal basis. Everyone should be treated equally on account of our equal contributions.

Actually the rich do not pay into the trust fund on an equal basis. OASDI portion of FICA is subject to an income cap. In addition much of the income of the rich isn’t subject to tax in the first place – Capital Gains and dividends aren’t subject to FICA at all (although the ACA HCR bill changes this – some HI tax will be levied on unearned income).

Raising marginal rates on high earners should be a no brainer. With Obama and Congress as it is we’re just as likely to see the wrong decision. Orszag’s writings in 2005 and 2006 on retirement point towards doing the wrong thing – raising retirement age and cutting benefits (albeit he does raise benefits for lower income retirees who presumably need it more).

Means testing is an old concept re SS; I could support such IF the lid on employee contributions was lifted completely.

I’d support that. I know some folks who use their SS check as walkin’ around money. SS was established to provide a modest income for working people who had no pension plan and would never earn enough to provide for their retirement.

There have been wars long before there was an Israel.

Asset tax on the richest Americans John McCain has 10 homes? for example the government takes 1 home.
Jay Leno has 100 cars? in his collection the Government takes 10 cars.
The rich got richer with the Bush tax cuts, Bush said America could afford the tax cuts and pay for the wars Bush was wrong.
We still have to pay for Bush’s wars so lets tax the only people who got richer thanks to Bush its not Class Warfare it a fact they have the money.
Class Warfare is making the Middle Class pay for over priced health insurance and drugs while the rest of the world pays less money.

I don’t understand if the trust fund was originally created to cover payouts in the future, why it wouldn’t be used now to pay for the shortfall. I’m assuming the fund is sitting in US treasuries. Is it because the money represents collateral for the rest of our debt. Anyone know. Thanks.

Very Good points!

I’m talking right now, not history. Israel is the latest and most high profile recipient of our weaponry. We are the world’s largest arms merchant. I want to see an end to that. You want to argue the merits of our foreign policy re Israel, I’m game.

How much money does the defense dept. misplace every year?

The reason it takes in less NOW then it pays out is
because of job loss. Want to balance the books? Create
more jobs- about 11 million are needed. That would also
help Medicare. I do think the full retirement age should
be upped-perhaps to 70 and maybe even the Medicare age
to 67? (65 for workers in physically demanding jobs?)
Also,how much is each worker owed?-Well,what they paid
in+what their employer paid in,plus interest (say Treasury
rate)+a distribution from those who died before they
could collect full benefits.

Here’s what needs to be done, but the political will just isn’t there. First off, NO income cap on FICA, right now all income above about I think 97k is exempt. Also, NO differentiation of income, FICA should apply to capital gains, inheritance, tax free interest from bonds, all of it. Then we could drop the rate from 13 percent to like maybe 5 percent and double the size of the trust fund at the same time I would guess. The political problem is that would affect millionaires and billionaires a lot more when you consider totals, even though the percentage is exactly the same across all income levels. So for example a guy making a million would pay 50k, whereas a guy making 50k would pay 2.5k. But both would be subject to the same pension limits when it comes time to retire. So good luck getting that through a Congress which is made up mostly of millionaires…

The entire problem with Social Security could be solved by eliminating the cap on income subject to FICA.

Simple as that.

Many also took early retirement and the system took a hit from that.

Wars could end if the U.S. stops starting them.

I think once we get unemployment back down to 4-5% that would be true. In today’s economy it would help but wouldn’t fill the gap, imo.

Among his options were proposals to gradually raise the retirement age for future Social Security recipients and to reduce benefits for those with high incomes.

That is just ludicrous. Why should average workers pay?

Average workers pay how (and I’m not baiting here): “…rais[ing] the retirement age or reducing benefits for those with high incomes?”

That may seem obvious to you…

But my $.02 is to raise the income level at which SS in no longer deducted from wages to, say, $250- to $300,000.

Income cap is $106,800 I believe.

There’s a lot of very good writing on Social Security here.

Most of us here favour removing the cap altogether.

Obama is a trojan horse, that has become clear.

And an enemy of the working class.

Yes, and once it was done and passed (could be handled through reconciliation, I believe) it would be like health insurance reform: people would like it, as a huge majority of potential SS recipients fall under the cap!

I have no problem with the common view that we should simply eliminate the FICA income cap….so long as there is no cap on the benefit received during retirement. It’s simple the people that put the most in deserve to get the most out!

The best solution is the abolishment of the IRS and move to a simple consumption tax! Then those with the most would pay the most and we could put an end to this “endless” debate!

But not much before there was a Palestine or Judea. Jericho was settled 9000 years ago, with a wall to keep out marauders. Seems to come with being human, to our shame.

I have no issue with that, but just trying to be realistic.

“Most of us here” seems a bit like enforced group think to me.

We inherited it from our alpha male-led forebears. Come to a dicussion of that in the April 11 (scroll down to the date) book salon I’m hosting.

Hi selise! If I remember my history, the reason the New Dealers gave Social Security a direct tax revenue stream from personal income was well conceived. They wanted the benefit to be the personal property of the person receiving the benefit and for there to be a direct connection between money contributed from personal income to the eventual benefit. When others protested a ‘new tax’ the New Dealers said, “No. This way no politician can change Social Security because it will be clear that Social Security belongs to those who deposited their earnings into it.” (paraphrased wildly).

I read somewhere a while back that the recent SS funding shortfall is due to less of the total income being subject to the tax since it tops out at ~106K currently. The Greenspan commission set the rates, etc., when 90% of all earned income was covered, and that figure has declined to 85% because of the increasing income disparity.

As has been said, ending the cap would result in more-than-adequate funding indefinitely. But it’s not being considered as it would not serve the interests of the economic elite.

deserve to get the most out!

Not quite the purpose of SS. As I said upthread SS was established to provide for working class people who had no pension plan nor the resources to provide for their retirement.

Thank you for that reference. That’s helpful. Seems to be a question of the pace of trust fund dipping over the next 30 years. The shortfall for the next budget at 29 billion only represents 4% of the required outlays next year and just 1% of the total trust fund on the books. But that annual shortfall is bound to increase in the years ahead, and we have decades to go.

Well, lessee. In the years I’ve been at the Lake iirc the idea of removing the cap altogether has been very popular with a number of firepups.

Better?

Enforced group think. JHFC

Barack Obama has signaled well enough already where he can be predicted/expected to come out at.

See Single Payer Plan Kill Off.

See Viable National PO HC Option Kill Off.

See More Open Ended Asian War(s) Funding. Iran Attack Ramp Up.

As others have suggested or pointed out Barack Obama did not want to build up Medicare or give it greater prestige as the build out platform for any Single Payer HealthCare Plan.

As for Social Security both the R Party and D Party have abused SS payroll tax pay-ins for decades. This is not a R or D only fiscal abuse story. It would be prudent to expect Barack Obama to shank working class/retirement funded poor Americans to instead appease his corporate overlords.

Of course there are plenty of Dummycrats who will swoon as he does so because Barack Obama is a Democrat. The Too Dumb By Far political blindness of too many Democrats will be played and gamed by Obama WH. Just as it was with Barack Obama’s Gut It and Cut It HCR sham.

Media propaganda is out there as the NYTimes demonstrated the other day. Wall Street and the Temple Money Changers surely would love to take command of more American government funds and money flows. What profits they must see to be exploited and extracted.

We all well know the top five percent of Americans as measured by income,household wealth and economic control are not rich enough yet–so more must go to them. Barack Obama is their guy as we likely will learn more of as time proceeds going into his WH regime.

The NYTimes of course failed to point out that the American economy is very well capable of fully supporting current and future increased SS benefits. We simply need to tax all income — whether labor,capital gains or what is skimmed off several other ways — to support SS. Or could then be used to support Medicare For All.

This is not a third world poverty stricken nation folks. Plenty of wealth here in United States. Problem is the greedy SOBs who suffer from the wickedness of their avarice. Decrease the Avarice Factor and we all can live better lives here in America.

Who’s side do you think Barack Obama will tilt towards? Come on — who’s side? This guy is closer to G.W.Bush then many care to confirm. He can and will do what G.W.Bush was unable to do.

Obama’s fanatic backers will let him. Then call it a triumph! A great win!

One can only hope a Dantian HellWorld may await the wickedness done and then called good.

The betrayal becomes numbing.

reconciliation is done until a new budget resolution is passed. Which should happen in the next couple of months.

The technical solutions are easy. The difficulty is the political solutions.

First, nothing should be done until after the 2010 election. Obama has effectively kicked the can down the road by appoint his commission to study the issue and create recommendations to be issued in December. We know that the commission is stacked. Therefore the public needs to know the commission is stacked. It’s not too early to to turn on the juice in that third rail of American politics. And to making protecting Social Security benefits a hot issue, even a referendum, in November.

Second, outlining a realistic plan for returning to the FICA fund the money that has been “borrowed” during the past 30 years would gain public support. They understand what’s been happening; that’s why they have been afraid enough to invest in 401(k) funds of dubious value. That means identifying cuts in the general fund that could be directed to replenishing social security. These have to be actual expenditures because most folks don’t understand tax credits as affecting the deficit. The national security budget, the sacred cow of American politics is the most likely source for a substantial sum of savings.

Third, eliminating the cap on the payroll tax might not be the best economic policy but it can be accomplished legislatively with a paragraph at most–a paragraph in the midst of a big must-pass bill.

Fourth, aside from social security it is clear that returning to Eisenhower-era tax brackets (adjusted for inflation and indexed for further inflation) brings many economic benefits beyond replenishing Social Security funds and dealing with the national debt. It also changes the marginal value of higher and higher CEO compensation, or compensation from hyper-remunerated activities in general.

Finally, restoring a progressive estate tax (indexed for inflation) that closes loopholes and exempts those with estates of less than $1 million (indexed for inflation) is another source that redresses forty years of predatory wage structures.

And McCain and Palin were your “knights in shining armor”…c’mon let’s be a little less dramatic!

This business about balancing the budget during a recession is the most asinine thing I’ve heard of in my life. All it does is create more deflationary pressures which, yes, will cause gov. revenues to fall and the deficit to grow regardless. Oh, and there is no problem with Social Security. It cannot default. The checks will never bounce. We are (as yet) completely sovereign in our currency. We are not on a gold standard or other legal constraints which would stop the government from crediting accounts. We belong to no monetary unions. China doesn’t own us, despite what you might hear.

It’s not too early to to turn on the juice in that third rail of American politics. And to making protecting Social Security benefits a hot issue, even a referendum, in November.

Absolutely.

Good point, but that is when it started to be looked at like insurance instead of what the financing actually is — an inter-generational compact.

But with a thirty-year drumbeat of Social Security failure and two decades of 401(k) salesforces telling employees that Social Security is going away and can’t be relied on, the younger generations are being persuaded that it was not an inter-generational compact but a Ponzi scheme and that they will be left holding the bag. Obama’s appointing a commission does not help in this regard.

McCain and Palin were your “knights in shining armor”…

That’s true in a Monty Python sense.

LOL

A lot depends on economic growth.

The so-called insolvency in 2041 is under a somewhat pessimistic growth scenario, at least from my reading of about 20 posts at the reference I gave earlier. Of course we’ve seen lower growth in 2008-2009 so maybe benefits won’t be as high when OASDI switches to being funded via payroll taxes once the Trust Fund instruments are exhausted.

If the economy is modestly better then the problem in 2041 and later rapidly becomes too much money in SS trust funds. FICA taxes would need to drop to keep us from owing too much in interest on the Trust Funds!

Social Security, while a thoughtful concept, is another in the Democratic ponzi schemes.

Yes, Congress has been in Democratic hands for somewhere around 90% or more of the years since SS was adopted. ALL politicians participated in the ponzi and never invested or set aside the SS extra funds.

Gore talked about a lock box but it was all a campaign slogan that never would have been followed through. If he thought it was so important, why he had he not made it a high profile issue during his term as VP? The answer is not because he is dishonest, no, it is because what would have been required to lock box anything would have been so painful it wouldn’t have been done by any politician.

Now, your average Joe and Jane are going to be expecting SOMEONE ELSE to bail them out. Will average Joe or Jane expect to sacrifice even though they , more than anyone, elected the buffoons who run Washington? No. Of course not.

Medicare and this health care “reform” are also going to break the bank (you already see part of the hang-over from Sunday with the huge charge offs many companies are taking–just the beginning).

There will not be enough “rich” people to save it all.

A lot more income from taxes would help, yes. But, what is all the talk about? How to make it harder and harder for people and companies to make income to tax in the first place.

The sky is not falling, but the tiles are getting pretty loose.

Two other useful references:
SS benefit calculator

SS Trust Fund reports

Thanks again. Sounds like a balancing act.

It will be. The shortfall is covered by the nominal interest paid by the Treasury on the securities in the Trust Fund.

The reason for the cap is that Social Security is meant to replace a portion of pre-retirement income. It has a maximum payout, so it should have a cap on contributions. In that sense, everyone in the country is equal.

The universality of social security, both in payment in and payment out, is one of the big reasons it was successful, and as its founders foresaw, it is popular because it functions fairly to everyone, regardless of income.

The issue is how to pay for the interest the federal government is obligated to pay on those instruments.

In the short term is comes from treasury bills being sold. Medium and long term it means more tax revenue or cuts to discretionary spending (which should include Defense spending).

Changing non-discretionary spending on SS (by cutting benefits) should be a non starter… But Orszag did suggest cutting benefits for high income beneficiaries and raising benefits for low income beneficiaries.

That is right. A modest increase on the cap may be a fair short term solution. Eventually, the Trust Fund will have to pay out, because as the boomers retire, there is a big bulge in payments due, which will exceed even those increased revenues. That was part of the plan in 1984, when the size of the boomer cohort became clear.

And for progressive reasons it may be time for the cap to go. Let the higher earners subsidize benefits for lower earners.

It’s the 21st Century…Every American should own a share of its wealth…Medicare for all and a three tier Social Security retirement payment…There should be no ceiling on Earned Income ,Dividends, etc as to deduction for Social Security and Medicare.

The excess funds should be placed in account that States could borrow from with modest interest rate. Only in a national emergency can the Federal Government borrow with 2/3 of the House and Senate voting for the funds for emergency with the intent to repay those dollars back in a set time frame.

Our tax structure should require that Corporations and LLC etc pay the full expense toward the national defense of our country and that includes anything that belongs to the needs of Veterans……Just image if they all had to pay they might think twice before wasteful spending on the Military complex.

Originally it was an intergenerational compact, we agree there. The Reagan era revisions changed that. Boomers paid more than needed in those years to cover both the shortfalls in the system and to prepare for the days when they would be taking money out. That is why workers shouldn’t pay. We already did. We just need for that trust fund to be made real, which is why I say raise taxes on the people who got the benefits of the tax cuts: the rich.

Don’t know if you’ve read this …

http://www.angrybearblog.com/2010/02/obama-and-social-security.html

… but it looks as though SS is next on Preznint Hopey Changey Flip Flop’s list of turning the country hard right

understood. My statement is only in the context of removing the FICA income cap. Otherwise we are simply advocating ‘unlimited’ income redistribution which will never happen.

Please take a look at the changes to social security in the 80s. Your assessment that Social Security is a ponzi scheme is out of date.

During the primary, the idea of a “doughnut hole” for the middle class was pushed first, I believe, by Edwards. You pay FICA up to $100,000, then nothing until it kicks in again at $300,000. That helped the two earner middle class families in big cities for whom $120,000 didn’t buy what it could in a small town.

But I really like the idea of federalizing the Fed and them issuing our own money much like they did in the early 1700s and then during the Revolution. People could borrow from this people’s bank and the interest would be used for human and physical infrastructure.

There are so many good ideas out there from Jamie Galbraith and others, but we have the discredited Friedman neo feudalism guys still in charge. What a crock.

I certainly agree that cutting expenditures wisely is important. It just isn’t the fix for Social Security. The fix for Social Security is to raise taxes.

Again…tax consumption and let the revenues flow in without the bitching!

This morning Peter Orszag was on Forum talking about the deficit and health care reform

http://www.kqed.org/epArchive/R201003260931

Didn’t have a chance to listen to it at the time, but they usually have really good, first rate interviews

Social Security is not a disgrace.
Endless war is, Wall St is, Congress is, and so is Obama.

Obama’s on a manic tear now. He’s determined to see the Bilderberger’s long awaited plans through to the last detail.
The middle class is about to go into it’s death spiral.

We’re in agreement then.

Marginal income tax rates on higher incomes need to go up. That revenue goes to pay the interest on Trust fund instruments, and ultimately to retire the instruments.

When Republicans bring up the Laffer curve we should respond with a reductio ad absurdum – if lower taxes result in higher revenue then obviously zero tax rates would bring in the most revenue. In truth we’ve reduced taxes on high incomes too far and revenues have dropped. We’ve also seen income disparity increase, and it certainly looks to be correlated with tax policy.

Transaction taxes (Tobin tax, etc) are also a good idea, somewhat orthogonal to SS fear-mongering.

considering Maddoff is still in the news, not so out of date.

When you have the “trust” money in US Treasuries (assuming that is where they are), it would be like this:

I contracted to pay you some money in the future. You paid me money before hand as part of that contract overage. I invest that money in a bond from me and then spend that money.

Later, when the time comes, I can’t pay you all that I owe you. You say, well cash your bond. Well, I also am the one who owes the money on that bond, so I don’t have the dough for that either.

When a person takes in money, does not invest it in outside investments, but rather invests in himself, and can’t pay the money back because he spent it on other things or paying earlier investors, THAT’s a ponzi scheme.

masaccio – got a phone call from one of my kids as this thread was getting going -

thank you for this. have bookmarked it knowing damn good and well I’ll be needing to reference it again and again soon.

Tax Reform first and do it properly! Even rich bastards like Steve Jobs know that the tax system is screwed. Even the rich need a battery of lawyers just to figure out the tax laws. Change them. 17% tax rate on everyone right across the board. It’s fair, it’s easy, and takes little paper/trees to do it. There is even a new movie coming out that lays out the case perfectly. And no special corporations having any kind of loopholes anywhere. You earn 400 billion profit, 17% goes to government. Done. Not hard to understand.

As for SS reform. Don’t think so. Not with these morons in Washington. They’ll reform it all right. Privatization and everyone will get screwed again but the rich, and blogs like DKos will cheer it as the greatest thing since health insurance reform. No thank you. Stuff it.

man…the drama. as stated by Obama earlier this week ‘no asteroids hurling toward earth’ – these calls of Armageddon are bordering on ridonkulus! Easy my friends, Easy!

Well hey, if Obama said it, it’s gotta be factual and true. No way he would ever lie, now is there? No way, he’d ever scam anyone or look out for corporations over average Americans, now is there? No way. You are absolutely right. He is the truth the whole truth and nothing but the bribed.

nah, i verified first…there really are no asteroids hurling toward Earth. And last time I checked, these ‘evil’ corporations employ and provide benefits for a an awful lot of average Americans. I mean seriously what’s the alternative Gov’t owned “everything”. If that’s what you want – grab a time machine back to the former Soviet Union or better yet, hop a plane to modern day Venezuela – they are almost there!

Obama’s cat food commission will provide political cover to cut Social Security. There will be no discussion of cutting “defense” spending. Obama will put Grandma out on the ice rather than give up his stupid imperial military adventures.

Ya, Venezuela has healthcare. Sure sucks to be them. I think you’ve made a mistake and are at the wrong blog. This blog is unbiased, reality blogging and not Dem Party or Rep Party whoring. Try DKos, they love Dems.

Removing the cap -while setting a ceiling on employer contributions- is ‘raising taxes’ just in a different manner; Since we have a ‘graduated tax structure’, the argument re ‘contribution versus payout’ would appear to be moot. And the tax structure is unequal anyway: “ROBERT JOHNSON: Well, my alma mater, the hedge fund industry, pays 15 percent income taxes under what they call “carry interest” provisions, rather than true income taxes. Warren Buffett even jokes about this. He says his income tax rate is lower than his secretary’s.”

And given the death of ‘defined benefit plans’ to satisfy corporate interests, the three legged stool upon which SS was predicated -from pensions, savings and investments, and Social Security benefits.-and the ‘financial meltdown’ thaat has wiped out millions of peoples ‘investments’, it would seem that more than triage is necessary.

“Hedge funds make money by speculating, not investing.”

why isn’t this entire industry outlawed yet? it obviously is a leech upon the world’s economy, without any tangible benefit

You might want to read this before defending the U.s. corporations.

While I love you and I love FDL, please don’t make me laugh so hard.

Maybe a bit dramatic, OK.

But, look. I’m just making an assessment based on what he’s done so far and every move he’s made bleeds the middle class, grinds up the poor and disenfranchised, and makes the rich, richer.
I have no doubt this will do the same. Somehow, Obama is going to force people to entrust the bankers with our SS contributions. I believe that is his end game, not saving SS.
They can quit sending jobs overseas and spend a few hundred billion on a serious works program here. Fifteen billion mostly in tax cuts was an insult when they turn around and spend 140 billion for some new fighter jets. They won’t do anything that doesn’t benefit the rich.

An endless flow of taxpayer cash has and still is going to all the insolvent banks, but when it comes to the American poeople., they can’t afford anything. WTF?
Jeez, what more do you need to know? And yeah, I’m beside myself over the whole damn shitty deals coming our way.

Wonder how many senate seats are up in 2012…

Yes exactly. It’s designed to be nearly attack proof. If FICA taxes were eliminated or means testing were added, it would become open to attack.

Social Security is the only damn thing that Wallstreet cannot steal.

They can steal your home (or make it nearly worthless).

They can steal from your 401K.

They can even steal gold hidden under your matress (ask the folks who owned gold during the Great Depression).

They can even debase the currency making fixed income investments worthless.

I don’t know the exact number, but I believe it is something like 23 Democrats and 9 Republicans.

Yes, it is only politicians who can make SS worthless.

Read it….now I can add ‘hop a plane to Europe’ to my list. I still hold that the U.S. form of capitalism, even with its flaws, is better than socialist capitalism. The proof is in the Fortune 500 list. Again, you have the freedom to move to one of these other locations if you are enamored with their form of capitalism.

Difficult political solutions indeed. The sort of thing which only a charismatic progressive with an enormous mandate for change, bullet proof majorities in both houses of congress and an ability to reach bipartisan consensus could ever hope to achieve…oh wait. How’s that hopey changey thing workin’ out for ya?
Building on their proven success with HCR we can expect to see an attempt at complete gutting of Social Security sold, once again, as reform to a gullible public. The only thing to do is start early, anticipating more of the same (since it worked so well with health care) and try to derail the tactics and awaken the center from their narcotic slumber. I will be curious, personally, to watch Kucinich closely as I am beginning to suspect that he may be a deep cover corporatist. Sound paranoid? I am kinda half joking, but hell, it’s up to him to prove otherwise at this point -let’s watch and see what he does here.

If anything, the Fortune 500 list highlights income inequality.

And I don’t want to hop a plane to Europe either. They have thier own problems. But we do need to ditch the neo-liberal economic policies of the last 30 years because they simply do not work.

LOL

As to asteroids … happens more often than you’d think

And

I mean seriously what’s the alternative Gov’t owned “everything”

Aww, you’re better than a straw man argument aren’t you?

So Obama’s healthcare plan to close the insurance gap for 30 million middle/lower class Americans is somehow a worse position than the status quo! Obama’s effort to responsibly end two wars that he did not start is somehow a slap in the face to middle class America! Obama’s effort to provide mortgage relief for unemployed middle class citizens is somehow detrimental to that same middle class! Obama’s relentless work to get TARP1/TARP2 in place to avoid the complete meltdown of the financial system and our inevitable plunge into the 2nd Great Depression is somehow a slap in the face to the middle class. Agree that Obama has not gotten everything right but what President ever does. IMO, he has done an admirable job given that he is getting pounded by both the left and right – I guess that puts him somewhere in the middle – exactly where most successful Presidents reside.

Very few people really have the alternative to move to Europe. As captjjoyssarian points out, they have problems too. Grotesque mal-distribution of income isn’t one of them. Consider the Gini coefficient of Germany vs. the US: 28.3 to 46.6. Link. And thanks to the willingness of many people to believe that somehow they will prosper in the future, the trend line is awful.

It behooves us all to think about what kind of society we want. If you think you will prosper and don’t care about anyone else, including the hypothetical you who doesn’t prosper, then you love the way things are going and want to increase the rate of change in that direction. Otherwise, you might want to think about what might ameliorate that trend line.

just looking for someone to describe their alternative solution to U.S. corporations and capitalism – that maintains our innovative and entrepreneurial edge without driving us to mediocrity.

I am disappointed by Obama because I think there were stronger things that could have been done on both health care and mortgages. I have been writing about bankruptcy cramdown since late 2007. It passed the House but not the Senate. Obama could have made it happen. Instead, he is doing what the banks and rich investors figured he would: pay off the failed mortgage loans.

Middle of the road solutions always favor the entrenched. Only radical change will benefit the average person.

Even with the boomers, Social Security is fully funded till 2044.

And if we want Social Security funded further out than 2044 then we would rebuild our education system, economic system and infrastructure.

At the end of the day, the only assets that can be transfered in a generational manner are education and infrastructure.

I’m sure you see the difference between a small increase in the cap to match inflation and paying off the Trust Fund with increased taxes on the rich, the ones who got the huge benefits of the tax cuts.

that maintains our innovative and entrepreneurial edge without driving us to mediocrity.

That was snark, right?

Increasing the earnings taxable for social security is an extremely progressive tax increase that misses the 33 percent income tax bracket but targets the 25 percent income tax bracket. Just jack the income tax bracket from 25 to 37.5 percent.

Since social security benefits are less than SS taxes at about the 55,000 dollar a year level, SS is a hidden tax on those earning more than 55,000 a year already.

yes….there are stronger things that could have been done – if this were a dictatorship. fortunately, we have a constraint called the Congress and Obama made the changes he had to make given this constraint. If you desire more progressive policies you must dominate the Congress first. Otherwise expect more smaller steps toward your ‘ideal’ that will simply get undermined when the other side wins. an imperfect system to say the least…but as you have pointed out – there are worst places to be.

and what is this radical change of which you speak….

not hardly….are you attempting to argue the contrary?

Ah, that’s easy. Because it’s not like we need to eliminate the corporations. We just need to change the character under which the corporations operate. Here’s a few examples:

First off, tax money you make in your sleep(rents) at a much higher rate than you tax hard work(wages). Right now we do the opposite. And it just makes far more sense to reward people for getting up off thier behinds and doing some hard work rather than living off of trust funds.

Tax speculation with a Tobin tax. Unfettered speculation tends to be very extractive, it doesn’t benefit the economy. So add in the “cooling rod” of a Tobin tax to curb the worst abuses.

Run a full employment economy. Have the government create the jobs if need be. This was done with the WPA and CCC. These government jobs were setup to pay less so that people would go back into the corporate economy as soon as openings were available. The pluses of the WPA and CCC, beyond their productive capacity they keep workers job skills fresh and maintained the concept of earning a living rather than standing in a line waiting for “The Dole”.

If a tree falls in a forest … ?

There have been alternatives given by people on this blog over the last few years; you just haven’t been here. And I’m too busy right now to give it that much thought and give you a list

If you had truly read the article then you wouldn’t have made the statement “that maintains our innovative and entrepreneurial edge without driving us to mediocrity.”

Such an ‘edge’ simply does not exist; for more proof of this, see here.

You seem to be under the spell of ‘american exceptionalism‘

Yes, that is why I wrote “Removing the cap -while setting a ceiling on employer contributions-” ; just do away with it altogether. Think such would cause the same results as what you propose and would ‘go down easier’.

So there i was, enjoying a round of golf at the country club in Boca, and here comes this dude Powerball. And he says “guys, I’m onto this great thing. I put all my savings with this guy Madoff see. He’s just amazing, 15% return on investment year after year regardless of what the rest of the economy is doing. It’s so amazing and wonderful and remakable oooh…” And me and the caddy look at each other and we just shake our heads because after all what can you say to a guy when he’s like this? Nothing. All you can really do is say “Look, PB, I know you won’t understand this now but just remember, in a year or so, when the rude awakening comes…you can always come by and crash in the caddyshack.”

reasonable points…but none of these have direct impact on corporate operations. The first point deals with how we treat capital gains taxes vs income taxes – i get it, let’s just reverse the rates 15% and lower on income and no greater than 38% on cap gains. The second point deals with speculative, short-term trading – i agree provide more incentive for long-term investment while discouraging speculation. No issues with the full employment idea – we might as well get some productive work done for those unemployment checks going out. Now, the trick is getting politicians into Congress that will support these views so Obama can get them signed into law.

Back to the topic of SS.

Do not compromise on Social Security.

Do not buy into the propaganda that Social Security has a funding problem.

If Obama wants to touch the 3rd rail of American politics, fry him to a crisp (politically, not physically).

caveat emptor i say…caveat emptor and I would gladly join you at the caddyshack! And if the legitimate risk I took paid off, I would gladly hire you to man my bag!

Ha ha, touche’ (sorta) You are standing tall for what you believe after all. The key is under mat by the way… ;~p

I’m looking at filing early for SS in 6 or 7 months–have been holding off waiting for 63rd b’day to increase monthly benefit a little. When you run out of unemployment and can find only part-time temporary work, you do what you have to. I had intended to work until I was at least 70 and not file for SS until that time. That’s part of the problem with raising the retirement age–most of us would like to keep working, but finding/retaining jobs is going to be a problem.

Yes because it’s not so much that the corporations have to change, it’s that the framework of the system within which they operate needs to change. Taxation is an element of that framework. Regulation is another element of that framework, regulation must be focused on aligning corporate benefit with public benefit.

As for Congress and Obama, they seem rather hopelessly stuck in neoliberal thinking. The long term solution is to vote them out of office, but the short term is a bit more tricky….

i agree it’s real – a real political construct though, not an economic one.

nah…i read it. i guess you can say i fall into the category of american exceptionalism. in addition, i disagree with their points given my casual conversations with my international colleagues. i am not one of those that believe that america is perfect, but i do believe that it is markedly better than depicted on this board. And i believe that Obama will do his best to make it better still.

at the federal gov level, unlike state and local govs, taxes don’t fund spending (they are important, but for other purposes). in fact, at the fed gov level, unlike households fed gov spending is not dependent on revenues or borrowing.

i guess you didn’t read that piece by warren mosler i’ve been hawking for so long? *g*

here it is again if you change your mind (it really is entertaining as well as mind blowing): 7 Deadly Innocent Frauds

that’s a good point and good reason not to implement the changes i suggested up thread — but just so we’re clear, they are political reasons – not economic ones.

again the short-term strategy should be to dominate Congress first. I would suggest not turning your back on Obama in 2012 otherwise you will end up with a Repub in office and if you think Obama is not fighting for what you guys believe in…..

I will say it one last time TAX CONSUMPTION and let the Revenues ROLL without the POLITICS! This will make the SS, progressive taxation, and all other debates a moot point.

p.s. i’m really hoping someone will attempt a debunking, if they can!

I’m not sure it’s accurate to call Barack Obama a Democrat; that mistakes the blurb on the dust jacket for a resolutely Republican text.

This debate isn’t about fixin’ anything. It’s about tearing down the vestiges of our hard-earned social safety net so that the wealthy can raid one more asset they haven’t yet gotten their hands on.

Social Security does not require an immediate or midterm fix. Fixing what needs fixing now – jobs, education, health care and critical infrastructure – would accomplish that, as well as do tremendous, needed good now.

But you are right: the current total tax burden actually paid by the top 5%, especially the top 1% and top 0.1% percent, is paltry compared to historic rates and compared to the benefits, including wealth, they extract from the domestic economy as if they were strip miners tearing down Appalachian mountain tops.

Negative, Obama doesn’t get a free ride just because of the big bad Republicans.

What Obama gets in 2012 is a primary challenge which he has already earned himself.

I’m all for a VAT consumption tax to fund single payer healthcare but if you think that we could just eliminate all income taxes… oh boy that’s straight off the right wing of the spectrum.

Waaaaay too much truth telling in that article Selise.

That article trashes mainstream media’s entire economic narative.

all i’m saying is do not cut off your nose to spite your face. A significant enough consumption tax or combination consumption tax/flat income tax could work. As an add-on to our current system of taxation, the VAT consumption tax is a non-starter.

NO – NO – NO Social Security must not be made into a welfare program.

Social Insurance the GOP will not touch.

Once it is welfare – means tested welfare – it will be “block grant to States” in 5 years and dead in 10 – and the payroll tax would continue.

Treating Welfare recipients like trash and a burden on the need for tax cuts for the rich is standard GOP – Don’t let them treat Seniors that way.

The only SS change one should accept is the retirement age to age 70 phased in over 36 years – because that is the only one justified by logic – people live longer and healthier lives – and the only one needed by the numbers. I am a retired actuary and know the folks at SSA – all good actuaries fighting against the nonsense that the political types push at them. They put out an estimate of the value of any given change, and an estimate of the need for any given change. Even the best – most optimistic – of the 3 projections now uses post Bush changes an economic growth estimate that is 30% below historical trend. And they are forced to use an even more conservative “middle re assumptions” projection for all policy suggestions.

A removal of the wage cap removes any financial problem for 50 years – toss in adding unearned income to payroll tax (giving the rich the increase in benefit earned by that higher inc as calculated under the current benefit formula), and there are funds for the change to a basic health coverage for ages 0 to 64 that could be under any buy-in Medicare plan – and the current ins. com. prem subsidy could be used for the buy-in portion. We might yet get to a rational system – and we can smile as the rich cash large SS benefit checks knowing they will be taxed on them and knowing how much they paid into the system to get those checks.

BUT WE WILL NOT GET TO A RATIONAL SYSTEM IF WE TURN OUR PROGRAMS INTO WELFARE VIA MEANS TESTING.

… the rich, the ones who got the huge benefits of the tax cuts

David Cay Johnston on the 1.8 TRILLION Dollars stolen from SS which was then laundered into tax cuts for the wealthy

http://www.youtube.com/watch?v=6ZC5SJGf3Bc

NO – a VAT replacing income tax is the rich wet dream – moving taxes away from the rich and onto the rest of us.

A VAT as an additional tax to fund Medicare for all is likely as the rich will fight the loophole closing tax rate rising change that raise the cost from them. Not a good solution, but perhaps the only one that can pass.

The Flat tax that raises the same amount of income that the income tax does now would be at a rate twice that paid by the middle class currently as they must pay the tax the rich stop paying – the GOP play games, pretending spending drops, not allowing for the home interest and charity deduction we know will be in it, so as to get numbers to fool the voter.

The National sales tax – FAIR TAX – VAT – is a similar con job as to revenue raised – and as to presentation to voters – with an $80 item taxed at 25% = $20 presented as a $100 item of which 20% is the tax – so you hear 20% rate from the GOP – but are really paying a 25% sales tax. Indeed a VAT almost always is missing financial transactions – in Canada those transactions are “zero tax rated” – so financial institutions stop paying income tax and do not start paying VAT – indeed service companies will go for – and in corporate America get – the same treatment.

Spot on -

That is the great fear that the rich have – that they will have a tax increase so as to repay the funds taken from Social Security and replaced with US Gov bonds. The retirement of those gov bonds in the SS Trust Funds, giving SS the cash via the tax on the rich, drives them nuts.

That is why Bush pretended those gov Bonds were worthless – except when they are owned by China. SS Trust US GOV Bonds are the way this years shortfall in payroll tax takings, because of the unemployment, will be made up. Indeed Huff Po has the usual article claiming the use of the SS Trust fund bonds means the SS system is in crisis. The rich really do own the media these days.

Are we really making this a D vs R issue? If we do, nothing is learned.

Aren’t all the elected filth culpable?

This issue has been written about for years and no one, absolutely no one would heed it.

And he ran as a stealth candidate. Talk about bamboozling the pubic!

Yes, exactly.

And any politician that says they are “open to discussion”, “want to keep all options on the table” etc… they are the enemy. It’s such a cut&dry issue that the only sane answer is a firm NO.

Obama already outted himself as enemy #1 by creating the debt commission.

That article trashes mainstream media’s entire economic narative.

yep. more trashing, lots more trashing, please.

time for a paradigm change.