12 May 2011

Like it or Not, To Avoid Fiscal Disaster We need to Trim Medicare, Medicaid, Social Security AND Military Spending

Here are the spending areas of the federal budget that I would like to see cut, with some specific suggestions on how:

 

Social Security

Social Security was initially created in the 1930’s to be a social safety net to reduce the level of poverty our senior citizens were experiencing.  I believe this goal is very worthwhile as I don’t want to live in a society where getting old is a key cause of poverty…and I want to pay my share of taxes to support this goal.   It’s important to fund Social Security as a social safety net and not a universal retirement program. My proposed changes:

My proposed changes:

  • Raise the retirement age to 70, over an appropriate period of time to allow for people to plan.
  • Create a way for people to qualify for retirement at 64, 66 or 68 if they have worked enough years in a job that is physically more demanding.
  • Change the calculation of Cost of Living increases to be based on the inflation in living expenses and not the inflation in wages.
  • Means test to make the payouts “progressive”, meaning reduce them for the wealthy, to the point that some very wealthy would not receive any.

 

Medicare/Medicaid

This is a difficult area to get costs under control.  It was initially created in the 1960’s focused on being part the social safety net.  Like Social Security, I believe this goal is very worthwhile as I don’t want to live in a society where getting sick is a key cause of poverty or being poor means nearly no medical care…and I want to pay my share of taxes to support these goals.

My proposed changes:

  • Make the price of medicare coverage “progressive”…that is charge more for the wealthy, eventually to the point that some very wealthy would pay the total cost of their Medicare insurance or purchase their own health insurance in the private market.
  • There needs to be a reallocation of medical spending in our country that reduces the total spending.  This is very, very difficult to achieve as the solutions are complex and thus ripe for political demagoguery (i.e. death panels, etc)…but the alternative is what we have now.
  • There needs to be some sort of cost management/control system in place as the buying of medical services is unlike any other consumer expenditure we make. Our free enterprise system depends on buyers being at least somewhat competent in making cost/benefit decisions as well as comparing products/services from alternative sources.  That just isn’t the case with medical decisions, and I don’t think it is rational to expect it.

 

Defense

We have to stop being the world’s cops.  We should stand for freedom and democracy,  and we should use our “might” to influence the governments and peoples of the world to move in the direction of freedom and democracy.   That is…our economic, diplomatic, moral might.  Our military might should be reserved only for when our direct national interests are being threatened.

To use recent military interventions to clarify this point:

  • Afghanistan…initially a good decision with the application of Special Forces teaming with Afghan Rebels.  Once we went beyond the anti-terrorism focus, we went too far.
  • Iraq…terrible decision to invade.
  • Libya…a good example of a moderated military role to support important allies.  If we don’t get further involved militarily, then I agree with our role.
  • Deployment of troops in Europe should be eliminated.
  • US Naval Fleets should be reduced.

 

Other Spending areas…no doubt there is additional waste to be eliminated.   However, the long list of items that should be cut won’t add up to enough to make any real difference, unless we also address the Big 3 of Social Security, Medicare/Medicaid and Defense.

All of the above spending cut suggestions would need to be analyzed by the CBO as to their impact.  No doubt adjustments to my suggestions would need to be made as a result of the CBO’s projections.

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48 thoughts on “Like it or Not, To Avoid Fiscal Disaster We need to Trim Medicare, Medicaid, Social Security AND Military Spending”

  1. Mark, your proposals all seem reasonable (moderate) to me. I have two questions/comments…

    Medicare/Medicaid – I am reading that your recommendation is to increase the inflow of money, like payroll deductions on some sort of progressive scale… This is a good idea. I have a belief, however, that until US health care is reformed and the year over year cost increase are significantly reduced to slightly lowe yearly inflation, the government will be throwing our tax dollars in ever larger amounts to cover the the shortage of collection versus expenditures.

    A good starting point would be to take private, for profit, health insurance out of the picture. I think there could be a role for a second tier of private, for profit, insurance which is laid on top of a national universal, single payer system. The second tier would cover boutique treatments, a upper layer of specialists, and maybe a nicer hospital room. The universal coverage has to be what our Congressmen and government workers receive so that the minimum is at least decent. Eliminating the Aetnas of this world could take 14-15% right off the top (based upon their current gross profit of 20 cents on the dollar.

    What do you think of universal, single payer coverage?

    Defense – How much do you have in mind for a reduction? I would think several hundred billion per year would be a reasonable target. Is that where your thinking is?

    Mark, these cuts will not be easy but have the smell of common sense when you talk about increasing some form of taxes as in the case of Medicare.

    1. Some changes to Social Security would restore it to its original intent. It was designed as a social insurance program. Over the years, it has been liberalized by vote-seeking politicians. The age at which the earnings test no longer applies has been lowered, instead of raised as it should have been. The earnings test itself has been liberalized. These changes should be reversed. The FICA maximum should be eliminated so that the wealthy pay their share. Paired with that should be a change to the benefit computation. It would be the addition of another bend point at the existing FICA max which lowers the return of Average Indexed Monthly Earnings to 3%. People often forget that Social Security includes children’s, survivors, and disability benefits. There should be an education program to emphasize this fact.

      With regard to Medicare, it must be pointed out that Medicare has done a far better job of controlling rising health care costs than has the private sector. A single payer system would improve this. Again, the wealthy get a free ride since the tax structure is not progressive. That should be changed.

      One of the most heinous political acts in recent history has been the enactment of Part D with no corresponding increase in revenue to fund it. This must be corrected soon.

      All doctors should be required to serve six years in the U.S. Public Health Service upon completion of their training. In return, student loans would be forgiven or largely repaid. This would allow the reallocation of medical care to the parts of this country that are so badly in need of it, such as reservations.

      Any medical professional who wants to change careers could opt to do so, after compulsory service. There are lines of medical professionals from around the world, including India and the Philippines, wanting to practice in this country. Their education and training are excellent.

      This country long enjoyed a leadership role in providing quality of life to its citizens. We have lost that leadership role to many countries in Europe, for example, that care for those in the dawn of life, the shadows of life, and the dusk of life. We can do better.

      1. Medicare controlling costs…I do agree with this at least partially. However, a significant part of the medicare savings is due to shifting costs to the private sector. It’s done by paying amounts to the medical industry (docs, hospitals etc) for services that are lower than what the private sector pays…which in turn pushes additional cost on the private sector. Getting the core health system consolidated would deal with this.

        I visit the taxes issue in my 3rd article on our country’s fiscal issues.

        Compulsory service…I wouldn’t go as far as you…but I like the idea of it being an option for people in medical school.

  2. I do believe that a version of “Medicare for all” is the best solution. Reasonably managed (and I do agree with the concerns on the quality of management) and it can get at the issues I mention in my 2nd & 3rd bullets in the Medicare/Medicaid section above. There are other ways to get at these issues…but I don’t believe they can be as effective as a universal health coverage system.

    I think it should be set up to focus on preventive care, core health care and provide no coverage for selective issues…this area would need a lot of discussion as there are limits to what our country can afford. My preference is that this core coverage be closer to Medicare than to the coverage provided current government workers. However, Medicare covers some issues that I don’t think it should, such as surgery for weight loss or erectile dysfunction etc.

    With our government paying for this core universal coverage (via funding from taxes)…then the current insurance companies could provide the supplemental (2nd tier as you mentioned) for those who would want it…very much like what is done today by many folks on Medicare.

    Also, I would outsource the administration of the medical coverage to private insurance companies versus set up or expand a government department. This would be very much like nearly every large company is already doing in America today…they are self-insured per the coverage the company policy indicates and an insurance company administers it per the coverage specified in the policy.

    I actually remain quite surprised that businesses aren’t screaming for this approach as our country’s current approach to funding health cost puts a huge cost on the backs of businesses that the businesses in other countries that they compete with don’t have to carry.

    Defense…I don’t have the info to assess for what the total spending reductions should be. With a $700 billion budget today…it would not surprise me if $200 – $300 billion could be cut over a number of years as we adjust our focus at a pace that gives our allies some time to step up and do carry their own weight. Note: Our military could be smaller if we didn’t have to fight “oil wars”…but that is a significant topic in and of itself, but like how we fund medical coverage in America it underlies a large portion of the costs.

  3. I agree that we need to cut all three. I don’t agree on how.

    Regarding social security, reducing poverty may have been _a_ goal, but it wasn’t been “the” goal, nor is the system even been structured to achieve this. If the goal was just to reduce poverty, then the entire system should be scrapped and replaced with assistance to just those in poverty. As it is, the means testing schemes are mostly just ways of punishing those who save (who we are suppose to value over those who speculate).

    Raising the retirement age is a good idea. This is especially true since the structural problems in the system are due to rising life spans, so it would really just be an adjustment to get back to the original expected period of benefits. The idea of allowing some people to retire early if their jobs are “physically demanding” is ill conceived. Do you include, for example, high stress jobs? Everyone will be working hard to try and show that _their_ jobs are hard enough to warrant retiring early on someone else’s dime. Now some people do indeed have their health deteriorate so they can’t work, but we already have programs to cover that.

    The examples for medicare are similarly muddied. If you want to help those who can’t afford medical care, then you should have a program to help those people. Not punish the biggest savers to subsidize people in the middle who can afford medical care. The issue of containing costs is the million dollar question. I’ll just say that I think we should move to says the allow people to make their own decisions on where to hold the line on costs rather than some government group set up to dictate where those choices should be.

    I actually don’t know where I think defense spending should be, so I am open to cutting it. The comment on Iraq just strikes me as ideological point scoring (the decisions being questioned are in the past). I don’t think we should get _too_ complacent about Afghanistan. Otherwise it sounds reasonable.

    1. Social Security has been very very effective at reducing the poverty of our Senior Citizens. Which truely was the primary and nearly only goal of the original Social Security. I know it “looks” like a retirment system, but I don’t think we should view it that way. We can get it to be more limited and thus cost less. The reason I that I like the “means testing” is two fold…1) I view Social Security as a bit of Socialism that I am ok with as long as it is very limited. Meaning that it pays just enough to keep senior citizens out of poverty. Living better is an individuals responsibility. 2) It helps keep America a much nicer place to live FOR ALL OF US than it would be if we had the senior citizen poverty levels of pre-Social Security or even worse what they would be today as the bottom quartile of people over 65 recieve 88% of their income from Social Security.

      Earlier Retirement Ages for some…I agree that this would be difficult to define clearly. But I think we could do it by being careful to minimize the number of people who would qualify. But if political issues prevent a rational effort at this…your point is right on and we should not do it.

      Containing Medical Costs…Our free enterprise system depends on buyers being at least somewhat competent in making cost/benefit decisions as well as comparing products/services from alternative sources. That just isn’t the case with medical decisions, and I don’t think it is rational to expect it.

      Iraq & Afganistan…actually from the beginning of our response to 9/11 I have been for and continue to be supportive of an ongoing special forces/very enhanced police type effort to control terrorism. Original effort in Afganistan was great. We could of done some version of that in Iraq. What both Bush and Obama have been doing in Pakistan for several years has been good.

  4. [First, just addressing SS….]

    While SS has reduced poverty as one of its effect, I don’t see how claims that it has always been a poverty reduction program get around the fact that is isn’t labeled as a poverty reduction program, that it isn’t structured as a poverty reduction program, and that most of the money involved is no going to keep people out of poverty.

    However, if you do believe it should be a poverty reduction program, then why all this transfer of money between generations and between groups that aren’t in poverty? If that is the goal, stop all this giving and taken that has nothing to do with poverty reduction. Instead, just scrap the entire program, stopping taking money that you claim people will get back (when you have no intention of doing so) and replace it with a much smaller program that just reduces poverty. Since reducing poverty is everyone’s responsibility, don’t fund it out of the savings of those who have saved more, fund it out of general revenue.

    Means testing of those who have saved more has little to do with poverty reduction. It takes money from those who save more and gives it to those who save less (most of whom are in no danger of falling into poverty). It violates decades of promises to those who have been saving. Ironically, it rewards the kind of leveraged and risky behavior that so many are blaming for the crisis.

    After all, if you are going to punished for having money, you might as well as throw it into some risky endeavor that will either loose the money you will be penalized for having or gain you so much money you don’t care about the penalty. No matter what, if you penalized saving, then people will save less.

    1. Social Security was our country’s first significant use of socialist approach for a solution to a societal issue…getting old in America meant living in poverty for the vast majority of our senior citizens. In the beginning its purpose was quite clear…but then our political leaders and our citizens decided it should be expanded to benefit more people. I think most of these decisions were and are mistakes that were caused by what I described in the first of my 3 part series on our fiscal crisis. My recommendations for changes to Social Security would get it back closer to it’s core purpose of minimizing senior citizen poverty. An important method for doing this is the means testing.

      I agree that it would mean eliminating some other aspects of Social Security…I didn’t get into those issues as my understanding is that the amount of money to be saved isn’t nearly as large as the other recommendations I make and thus I didn’t want to make my blog too long.

      I don’t see paying into Social Security as a punishment for a person fortunate and capable enough to amass the wealth that would qualify them to get less or even no payout from social security. I do think that we need to be careful as to how the means testing is set up so that it doesn’t cut out too many people by having too low of wealth levels…or your concerns about disincentives would occur. I believe we can identify levels of wealth that would be high enough where $30,000 per year in Social Security would not be missed nor an amount that a person risk decreasing their wealth in order to receive it…and low enough levels of wealth as to have the means testing provide a significant savings.

      Be sure to note that I don’t recommend raising the FICA taxes…it would great if these changes would allow them to be lowered.

      The key is…don’t view Social Security as a retirement system. It didn’t start that way and we can not afford it to be.

      1. The FICA taxes probably wouldn’t have to be raised if the ceiling is raised, but if they aren’t raised either way, from what I’ve read the cuts would have to be quite drastic to balance the program.

        You’re totally right on all of this… we need to get with the idea of a social safety net, not retirement program.

      2. I don’t see paying into Social Security as a punishment for a person fortunate and capable enough to amass the wealth that would qualify them to get less or even no payout from social security. I do think that we need to be careful as to how the means testing is set up so that it doesn’t cut out too many people by having too low of wealth levels…or your concerns about disincentives would occur. I believe we can identify levels of wealth that would be high enough where $30,000 per year in Social Security would not be missed nor an amount that a person risk decreasing their wealth in order to receive it…and low enough levels of wealth as to have the means testing provide a significant savings.
        </blockquote.

        Well, that sounds nice. But in the end the idea seems to me that if you save enough money, you should consider yourself lucky enough to have that and can complain about what the government does to you? That those who save more were just "lucky" and the government doesn't have to worry if it breaks decades of promises to such people who decided to spend on what they wanted now? I guess being willing to forgo what you want for thing later in life is now considered "luck"?

        1. While your right that some poeple get their wealth via luck (trust fund babies, lottery etc)…my words were “fortunate and capable”.

          As to the promise part…this is where we need to be careful about how this would be phased in so that we minimize negative impacts on the renegging of what people were promised. The reality is that promises were made in the past that just can’t be kept. Caused by the combination of politicians low character wanting reelected and gullible citizens wanting free lunches.

  5. One the other topics….

    Our free enterprise system depends on buyers being at least somewhat competent in making cost/benefit decisions as well as comparing products/services from alternative sources. That just isn’t the case with medical decisions, and I don’t think it is rational to expect it.

    We make other decisions that are equally important in our lives. The bottom line is whether you trust people to live their own lives or you think government has to decide for them for their own good.

    I do support the idea that everyone should be required to have insurance that covers emergency medicine that we currently will not let anyone, regardless of means, go without. But for the rest, everyone should decide for themselves. The government can have a recommended system for those who want to follow government advice, but that shouldn’t mean that we have to force everyone to do so, whether they want to or not.

    Iraq & Afganistan…actually from the beginning of our response to 9/11 I have been for and continue to be supportive of an ongoing special forces/very enhanced police type effort to control terrorism. Original effort in Afganistan was great. We could of done some version of that in Iraq. What both Bush and Obama have been doing in Pakistan for several years has been good.

    Iraq is winding down. I don’t see the need for any big new commitments there, but to drop the ones we made would undo a lot of hard won progress. As to Afghanistan, it all depends on the prospects of Taliban taking over and letting Al Qeada (or some similar group) set up shop. I don’t know if that is likely, but I think the risk is a negligible as some say. I’m willing to let Obama lead on this.

    However, there rest of the defense budget it is huge and ongoing. I do agree that it warrants reviewing. In the Tea Parties favor, they killed a pointless second jet engine that was never desired and never going to be used. However, how much that would save requires people with more knowledge than me.

  6. Trusting the american public with the medical decisions. I read a great book a few years ago called “Seven Habits of Highly Successful People”. It defined trust in a way that I continue to like. Trust is made up of both “competence” and “character”. Until I read this book I thought of trust from just “character” perspective. I am ok with trusting the american public with medical cost/benefit decisions as well as comparing products/services from alternative sources…from a “character” perspective. But I don’t think it is realistic to do so from a “competency” perspective. Medicine and it’s related costs are just too complicated and continually changing…like nothing else we face in society.

    This is not to say that we take all the medical decisions away from the public. That is where a core basic health system is provided to and paid for by all. This will still leave a lot of room for individuals to make additional decisions.

    NOTE: There are plenty of situations in america where our government sets the framework for options available for those making decisions versus allowing complete freedom…speed limits, contruction regulations, car safety regulations, Contract Laws, etc etc.

    Afganistan & Iraq…I agree with your last comments. My use of them as examples in my original post was referring to the starting point decisions with each war. We are where we are now and have to finish them. Obama seems to be wrapping them up…I hope so.

    1. The US should take a long, hard look at the Chilean model for pension funding. Jose Piñera, brother of the current Chilean president, has advised 4 US administrations on the issue. Unfortunately, no much action has been taken. The AFP system introduced by Chile has worked, with an average of 25% earnings on private retirement accounts. The portfolios are constantly updated and wern’t hit very hard by the market upheavals of late.

    2. You can always offer advice to those who can’t understand the complexities of medicine. But to say that they shouldn’t get a choice at all is another matter. Even if they can’t understand the details, they should be able to choose who’s advice they trust. It also is another matter when you also take choice away from those who can understand. And, in the end, I’m not sure that choices by a government, that has different interests than the person involved, will be any better than the choices he/she could make for themselves.

      I agree that some treatments can never be refused and that everyone should bare a burden for those, but beyond that choice should go to those who are affected by those choices.

      1. Agreed…that is why I believe a core basic health system should be provided to all via government funding. However the medical services themselves would be private…like the medicare system.

        Anything in addition to this would be a persons option…again like the Medicare system today.

        Then within this overall medical system each person can decide what actual medical care is used.

        This won’t eliminate the issue of medical care being less for the poor etc…but it will raise the floor as to their level of care. AND it will lower overal medical cost spending in our country…assuming we take several other smart steps with a system like this in place

        1. Agreed…that is why I believe a core basic health system should be provided to all via government funding. However the medical services themselves would be private…like the medicare system.

          I do feel obligated to comment that I suspect my “core” is probably more “core core” than yours.

          1. That could be…what are your thoughts? My preference is something along a slimmed down Medicare with an enhanced focus on preventive and staying healthy measures.

  7. The US should take a long, hard look at the Chilean model for pension funding. Jose Piñera, brother of the current Chilean president, has advised 4 US administrations on the issue. Unfortunately, not much action has been taken. The AFP system introduced by Chile has worked, with an average of 25% earnings on private retirement accounts during the last 20 years. The portfolios are constantly updated and wern’t hit very hard by the market upheavals of late.

    1. Taking this approach means that we are officially converting Social Security into a national retirement system and I prefer we take it back toward it being a social safety net system focused on reducing senior citizen poverty.

      I find it ironic that far right wing and libertarian groups tend to support the Chilean approach as I see it as far more intrusive into our private lives as compared to a slimmed down Social Security.

      However, IF America would decide that we want Social Security to really become a national retirement system…then I think the past Bush plan and Chilean plans have merits worthy of study. In going out and reading several articles about them yesterday and today…I find it difficult to know what is true as each article seems written by someone with an agenda.

      I did think this article read more practical and honest than most…

      http://www.eoionline.org/retirement_security/reports/SSPrivatizationChileCaseCaution-Sep00.pdf

      http://www.eoionline.org/retirement_security/reports/SSPrivatizationChileCaseCaution-Sep00.pdf

      1. Dear Mark:

        I agree Social Security should be a safety net, too. Chile does not have this, though thankfully families here are a bit more conscientious about their elderly than in many places. Also, we have medical care for everyone which is good and well-priced.

        I reviewed the articles. The only figure he does not cite is where he got his figure for fund mgmt fees.

        “At first glance, returns on individual account investments in Chile appear quite respectable. After factoring in management fees—which currently range from 16 to 20 percent of annual contributions—the situation can look much different.”

        Funds cost, on average, 1.25% of monthly contribution or 1.25% of pension in case of retirees (comisiones, in Spanish).

        Here are the figures from the “SSA” fund regulator in Chile: http://www.spensiones.cl/safpstats/stats/apps/estcom/estcom.php

        I have never read any of the more polemic writing on this topic, but I can only imagine. Yikes. Piñera sounded like a true believer when we spoke in 2005. But this is always a bad thing and no one is complaining in Chile. I mean to say, I have never seen any no large-scale public outcry in the media.

        Hopefully, the Chilean model may offer us some good ideas. I know a lot of countries have adopted it. Perhaps the SSA’s situation in the US is not as bad as it seems on the surface.

        I will contact Piñera and see what he replies. I am sure he will have read the articles, since they’re from 2000. It does not seem as though the Economic Opportunity Institute has updated their stance in the last 11 years. Maybe this article I mentioned is considered to be bullet-proof. You have my curiosity thoroughly piqued. I’ll get back to you.

        It is great to see people in the US interested in this topic.

        1. Good point…I misread the date…I thought it was from 2008. Thus the article is more than a bit dated.

          Pinera is writing for the Cato Institute, a Libertarian think tank. It doesn’t make them wrong in there opinion, but it is good to know if there is an ideological drive behind a position. In this case there very much is.

          Bouncing around the internet you can find folks for and against the Chilean approach…but again, it is difficult if not impossible to find what I would think is a clear and fair headed analysis.

          Then again…the Chilean model is very much positioned to be a retirement system.

  8. Here’s one of the more interesting ideas I have seen to help resolve one of the moral issues raised here. I am talking about the issue of “punishing” folks who practice foresight and set aside more resources for retirement.

    I am essentially on board with an approach that provides support on a sliding scale (what Mark calls progressive, but which is a bit of a loaded term politically). But motivation matters, so if prudent folks of reasonable means who careful plan ahead get a raw deal, we’ll de-motivate good long-term planning.

    So, one way to do means testing would be to incorporate a figure that calculates lifetime income instead of primarily stressing current assets. In that way, folks of very moderate lifetime means who accumulate good nest eggs via personal sacrifice won’t be punished by being means tested out in the same way as folks who accumulate big nest eggs via high income.

    Obviously there are a whole host of factors involved, but any changes which punish prudence need to be mitigated if we are to get support for the reforms in question.

    One other idea related to social security really intrigues me. I think that any means-testing that gets implemented needs to be implemented on an “annual solvency” basis. In other words, social security doesn’t ever get to collect a penny more in SS taxes than it needs to cover current payouts. The first benefit is that congress can’t overcollect SS taxes to pay for other things while writing treasury dept IOUs to the SS department. The other benefit is that the annual recalculation will force everyone to keep an eye on the nature of the promises we are making to the older generations and the nature of the burden we are placing on future generations. That’s a good way for us to slowly move away from the “overpromising” business while politicans have mired us in. And let’s face it, mired us in it at our own request, by and large.

  9. I contacted Piñera regarding the article we read and asked him about mgmt fees. He states, “The commisions charged by AFPs is equivalent to 0.6% of Assets Under Management, or 60 basis points; very low by any standard in the asset management industry.”

    Regarding the welfare side of the issue, I know many people say SSA helps. Growing up in El Paso, I met a lot of elderly who had real problems buying groceries for the week. I guess we need to slim down the number of employees and boost benefits.

  10. Here’s one of the more interesting ideas I have seen to help resolve one of the moral issues raised here. I am talking about the issue of “punishing” folks who practice foresight and set aside more resources for retirement.

    I am essentially on board with an approach that provides support on a sliding scale (what Mark calls progressive, but which is a bit of a loaded term politically). But motivation matters, so if prudent folks of reasonable means who careful plan ahead get a raw deal, we’ll de-motivate good long-term planning.

    So, one way to do means testing would be to incorporate a figure that calculates lifetime income instead of primarily stressing current assets. In that way, folks of very moderate lifetime means who accumulate good nest eggs via personal sacrifice won’t be punished by being means tested out in the same way as folks who accumulate big nest eggs via high income.

    Obviously there are a whole host of factors involved, but any changes which punish prudence need to be mitigated if we are to get support for the reforms in question.

    The problem there is whether you are willing to take someone who has had a lot of money in his hands but lost it all and force them to scrimp in their old age or worse? Also, some people may well have lost money for legitimate reasons (sudden tragedy, or maybe the were just trying to start a business). If you actually want the government to get into the business of judging how people have spent their money, that is minefield.

    I think part of the problem is vague thinking on what one wants to accomplish. If you are looking at who can bear a burden of a cost, then why even focus on reducing benefits to retirees? There are plenty of people who haven’t retired who can help bear a burden. And even if the “millionaires” can bear more burden, why can’t the “100,000ares” bear at least some burden, instead you focus on one small group in order to spare everyone else any pain. And, in fact, those who had good incomes have already paid more taxes on it while they were working, so you are hitting them with a double whammy. The other reason to make things progressive is the idea that people with too much money just don’t “deserve” it. I don’t think much of that view, but it is popular with the left for obvious reasons.

    One other idea related to social security really intrigues me. I think that any means-testing that gets implemented needs to be implemented on an “annual solvency” basis. In other words, social security doesn’t ever get to collect a penny more in SS taxes than it needs to cover current payouts. The first benefit is that congress can’t overcollect SS taxes to pay for other things while writing treasury dept IOUs to the SS department. The other benefit is that the annual recalculation will force everyone to keep an eye on the nature of the promises we are making to the older generations and the nature of the burden we are placing on future generations. That’s a good way for us to slowly move away from the “overpromising” business while politicans have mired us in. And let’s face it, mired us in it at our own request, by and large.

    I see the attraction in this, it would have been good a decade or two ago. I was a fan of the idea of privatizing the SS surplus (which would have prevented the government from just spending it.) However, the period of SS surplus is almost past. I think the only thing to do is for every generation to bit the bullet. We change social security to fix the structural deficit and if more is needed because Congress just let the mess go on too long, then all age groups have to chip in. The best way to for retirees to make their contribution through reduced SS benefits is just to extend the retirement age. This has several attractions.
    -One reason there is a structural deficit is that it was not anticipated that people would spend so much time in retirement. So it really just makes things they way they were originally intended.
    -It doesn’t put anyone in a bind. Nobody has to live on less money than they planned. And all you are asking is that people don’t expect to get a “free lunch”.
    -By continuing to be productive, you actually contributing to making the pie bigger, something that simple cuts don’t do. That fact is that people are more productive until later ages because of modern medicine (a corollary of the first point above) and many are choosing to work longer just to keep busy.

  11. Cranky, David, Kenneth…

    I like several of your ideas…IF I thought Social Security should be a “retirement system”. However, I just don’t think it should.

    I’d rather individuals be responsible for their own quality of life through out their whole life. I wish we could just completely leave all senior citIzen financial issues to individuals as the Libertarians suggest. However, for a variety of reasons this just won’t work as us humans just have too many weaknesses as well as sometimes people try and make the right decisions and as the saying goes…”shit happens”.

    Thus, I think the best thing we can do is reduce the focus of Social Security back to being a social safety net system and then most of the points being brought up just fall away as irrelevant. The costs of the system would eventually go way down as at least some of our citizens do a better job of saving for their senior years.

    1. Well, if you want a poverty protection program tweaking SS is not, IMO, a good way to go. It is poorly structured for such a use.

      Also, while it is certain that one won’t be able to keep 100% of the promises to retirees, it would be nice to at least keep part of them and not just chuck them out the window and say “sorry, you got screwed”.

      1. Just to remind, the poverty prevention I am focused on is for senior citizens only. It is targeted at the issue that people typically can’t work right up to just prior to their death and thus need some income to live on after their working years…and that too many folks don’t (for variety of reasons…some more understandable than others) save enough for this time of their lives.

        Thus I don’t understand why the Social Security program with the adjustment that I have mentioned in my prior comments is poorly structured as a solution to this issue??

        1. Just to remind, the poverty prevention I am focused on is for senior citizens only. It is targeted at the issue that people typically can’t work right up to just prior to their death and thus need some income to live on after their working years…and that too many folks don’t (for variety of reasons…some more understandable than others) save enough for this time of their lives.

          Thus I don’t understand why the Social Security program with the adjustment that I have mentioned in my prior comments is poorly structured as a solution to this issue??

          Because…
          -Because most of the money you are taking away from only a few people is to maintain benefits to people over a wide range of incomes, not just those in danger of poverty. (It ends up being more about general wealth redistribution than poverty protection).
          -As a retirement system, SS has obligations as a retirement system, to move money around for poverty protection involves messing with those obligations.
          -Even if it is just for senior, why is the obligation for protection from poverty just focused on the retirees. As I see it, if you have an older person in poverty, isn’t it all our obligations to help? So why just take money from retired people who, in fact, have already paid taxes that are however progressive as was considered appropriate at the time for the money they earned.

          1. “Because most of the money you are taking away from only a few people”… FICA is withheld from all people who work, which is the vast majority of poeple.

            “to maintain benefits to people over a wide range of incomes, not just those in danger of poverty”…agreed as to assessing our current Social Security program, but my recommendations change this status with a key aspect being the means testing so that it gets back to being a safety net program (prior posts fully explain this).

            “As a retirement system, SS has obligations as a retirement system, to move money around for poverty protection involves messing with those obligations.”…yup, just as it did not start out as a retirement system but morphed into it, it can be morphed back into the type of system it started out as…that being a safety net program for our elderly. It will take many years to migrate it back to what we can afford.

            Your last point still focuses on keeping Social Security as a retirement system…

            1. “Because most of the money you are taking away from only a few people”…
              FICA is withheld from all people who work, which is the vast majority of poeple.

              But you are taking away the benefits that those payments are suppose to entail from a small number people.

              “to maintain benefits to people over a wide range of incomes, not just those in danger of poverty”
              …agreed as to assessing our current Social Security program, but my recommendations change this status with a key aspect being the means testing so that it gets back to being a safety net program (prior posts fully explain this).

              But, since you are taking money from people in little danger of poverty to give to other people in little danger of povery, I would hardly call it a “safety net”. It really just ends up being income redistribution.

              “As a retirement system, SS has obligations as a retirement system, to move money around for poverty protection involves messing with those obligations.”
              …yup, just as it did not start out as a retirement system but morphed into it, it can be morphed back into the type of system it started out as…that being a safety net program for our elderly. It will take many years to migrate it back to what we can afford.

              Yeah, you keep asserting it didn’t start out as a retirement system (or more accurately, a retirement insurance system) but rather a poverty reduction system. I’ve seen nothing to change my mind given that the fact that it wasn’t labeled as, or even structured as, a poverty reduction system. So, in spite of such assertions, I am unconvinced.

              And, in any case, morphing something from A to B doesn’t make morphing it back the best way to go. At best, you have all the downsides of morphing programs for reasons they were never intended for compared to programs that were designed for specific purpose.

              Your last point still focuses on keeping Social Security as a retirement system…

              Because that is what it is and why, if you want a poverty reduction system, trying to change SS for that purpose both works poorly and end up being unfair.

              I think we are just starting to repeat the same points over and over.

              1. Any tax system that is progressive is an income redistribution system…just look at the math. Some folks pay a higher or lower % of taxes than others. I am not challenging this concept.

                “Yeah, you keep asserting it didn’t start out as a retirement system (or more accurately, a retirement insurance system) but rather a poverty reduction system. I’ve seen nothing to change my mind given that the fact that it wasn’t labeled as, or even structured as, a poverty reduction system. So, in spite of such assertions, I am unconvinced.”

                Just Google or Bing “original goals of social security” or “history of social security”…plenty of info available as to what the original purposes of Social Security were.

                1. Any tax system that is progressive is an income redistribution system…just look at the math. Some folks pay a higher or lower % of taxes than others. I am not challenging this concept.

                  Yes, there _can_ be a result in some income distribution, but not always. A program where the goal is to address some societal program or goal, and you simply fund it by who can pay, has real differences from those who only seek to move money around. The space program is funded by a progressive tax systems where some people pay more based (loosely, but that is another issue) on who can pay the most, however, it is far from clear how much income redistribution it results in. The issues of the purpose is also non-trivial. To someone who doesn’t think that wealth distribution is a purpose the government should apply itself to, then question of whether you are address some independent need or goal of society becomes important.

                  “Yeah, you keep asserting it didn’t start out as a retirement system (or more accurately, a retirement insurance system) but rather a poverty reduction system. I’ve seen nothing to change my mind given that the fact that it wasn’t labeled as, or even structured as, a poverty reduction system. So, in spite of such assertions, I am unconvinced.”

                  Just Google or Bing “original goals of social security” or “history of social security”…plenty of info available as to what the original purposes of Social Security were.

                  Yeah, this would be more persuasive if you had actually listed points you considered persuasive for your position rather than just saying that if you google it your position will be clear. did a quick google search and the results were, in fact, unpersuasive. The first hit was the wikipedia article that gave the background for the _insurance_ program. There were some hits on people advocating, poorly IMO, the position you maintaining (often just asserting the claim like you have been doing). There were some comments about the original intent of those who proposed the program. Aside from the fact that the intent of some advocates of a policy not being the same as the consensus intent that allows a policy be enacted, the fact is that, IMO, if you set up a retirement program, the idea that _some_ had a motivation to handle a societal problem is a poor excuse for ignoring obligations it incurs as a retirement program or dismissing that the main effect and purpose has been as a retirement program.

                  The fact is that SS was labeled as a retirement insurance program and structured as such. If you want a program that has as its primary goal to implement society acting to prevent poverty amongst the elderly, then it would be more effective and fair to create such a program rather than poach a retirement program to avoid having to pay for to pay for it. To do the latter both throws a lot of money around that does nothing to reduce poverty and is also arbitrary in who bears the burden (which is increased by taking money that is doing nothing to reduce poverty).

                  1. Honestly, I am unable to discern the meaning or focus of your first paragraph rejecting my comment on how progressive taxes are a form of income redistribution.

                    I can understand many of our disagreements on what is wise policy, but on our different views on what Social Security’s original purpose/focus was…I feel like I am debating Achmadinajad on whether there was really a Jewish holocaust. No way he really believes what he says, but he does keep saying it. I give up…

                    1. Honestly, I am unable to discern the meaning or focus of your first paragraph rejecting my comment on how progressive taxes are a form of income redistribution.

                      I can understand many of our disagreements on what is wise policy, but on our different views on what Social Security’s original purpose/focus was…I feel like I am debating Achmadinajad on whether there was really a Jewish holocaust. No way he really believes what he says, but he does keep saying it. I give up…

                      Confusion may be because the reply was poorly formatted. You may want to look at the better formatted versions I posted.

                      As to who keeps just “keeps saying things”. I have pointed out how SS is both labeled and structured as a retirement insurance program. I have to say that I feel that is more than what has been offered by you. Perhaps we might leave off comparing each other to people like Ahmadinejad and his holocaust denial.

                2. [Since my reply is awaiting moderation, you might instead use this version which is more properly formatted…]

                  Any tax system that is progressive is an income redistribution system…just look at the math. Some folks pay a higher or lower % of taxes than others. I am not challenging this concept.

                  Yes, there _can_ be a result in some income distribution, but not always. A program where the goal is to address some societal program or goal, and you simply fund it by who can pay, has real differences from those who only seek to move money around. The space program is funded by a progressive tax systems where some people pay more based (loosely, but that is another issue) on who can pay the most, however, it is far from clear how much income redistribution it results in. The issues of the purpose is also non-trivial. To someone who doesn’t think that wealth distribution is a purpose the government should apply itself to, then question of whether you are address some independent need or goal of society becomes important.

                  “Yeah, you keep asserting it didn’t start out as a retirement system (or more accurately, a retirement insurance system) but rather a poverty reduction system. I’ve seen nothing to change my mind given that the fact that it wasn’t labeled as, or even structured as, a poverty reduction system. So, in spite of such assertions, I am unconvinced.”

                  Just Google or Bing “original goals of social security” or “history of social security”…plenty of info available as to what the original purposes of Social Security were.

                  Yeah, this would be more persuasive if you had actually listed points you considered persuasive for your position rather than just saying that if you google it your position will be clear. did a quick google search and the results were, in fact, unpersuasive. The first hit was the wikipedia article that gave the background for the _insurance_ program. There were some hits on people advocating, poorly IMO, the position you maintaining (often just asserting the claim like you have been doing). There were some comments about the original intent of those who proposed the program. Aside from the fact that the intent of some advocates of a policy not being the same as the consensus intent that allows a policy be enacted, the fact is that, IMO, if you set up a retirement program, the idea that _some_ had a motivation to handle a societal problem is a poor excuse for ignoring obligations it incurs as a retirement program or dismissing that the main effect and purpose has been as a retirement program.

                  The fact is that SS was labeled as a retirement insurance program and structured as such. If you want a program that has as its primary goal to implement society acting to prevent poverty amongst the elderly, then it would be more effective and fair to create such a program rather than poach a retirement program to avoid having to pay for to pay for it. To do the latter both throws a lot of money around that does nothing to reduce poverty and is also arbitrary in who bears the burden (which is increased by taking money that is doing nothing to reduce poverty).

                3. [Since my reply is awaiting moderation, you might instead use this version which is more properly formatted…]

                  [Though I guess still not right. I’ll give it one more try…]

                  Any tax system that is progressive is an income redistribution system…just look at the math. Some folks pay a higher or lower % of taxes than others. I am not challenging this concept.

                  Yes, there _can_ be a result in some income distribution, but not always. A program where the goal is to address some societal program or goal, and you simply fund it by who can pay, has real differences from those who only seek to move money around. The space program is funded by a progressive tax systems where some people pay more based (loosely, but that is another issue) on who can pay the most, however, it is far from clear how much income redistribution it results in. The issues of the purpose is also non-trivial. To someone who doesn’t think that wealth distribution is a purpose the government should apply itself to, then question of whether you are address some independent need or goal of society becomes important.

                  “Yeah, you keep asserting it didn’t start out as a retirement system (or more accurately, a retirement insurance system) but rather a poverty reduction system. I’ve seen nothing to change my mind given that the fact that it wasn’t labeled as, or even structured as, a poverty reduction system. So, in spite of such assertions, I am unconvinced.”

                  Just Google or Bing “original goals of social security” or “history of social security”…plenty of info available as to what the original purposes of Social Security were.

                  Yeah, this would be more persuasive if you had actually listed points you considered persuasive for your position rather than just saying that if you google it your position will be clear. did a quick google search and the results were, in fact, unpersuasive. The first hit was the wikipedia article that gave the background for the _insurance_ program. There were some hits on people advocating, poorly IMO, the position you maintaining (often just asserting the claim like you have been doing). There were some comments about the original intent of those who proposed the program. Aside from the fact that the intent of some advocates of a policy not being the same as the consensus intent that allows a policy be enacted, the fact is that, IMO, if you set up a retirement program, the idea that _some_ had a motivation to handle a societal problem is a poor excuse for ignoring obligations it incurs as a retirement program or dismissing that the main effect and purpose has been as a retirement program.

                  The fact is that SS was labeled as a retirement insurance program and structured as such. If you want a program that has as its primary goal to implement society acting to prevent poverty amongst the elderly, then it would be more effective and fair to create such a program rather than poach a retirement program to avoid having to pay for to pay for it. To do the latter both throws a lot of money around that does nothing to reduce poverty and is also arbitrary in who bears the burden (which is increased by taking money that is doing nothing to reduce poverty).

  12. The problem there is whether you are willing to take someone who has had a lot of money in his hands but lost it all and force them to scrimp in their old age or worse? Also, some people may well have lost money for legitimate reasons (sudden tragedy, or maybe the were just trying to start a business). If you actually want the government to get into the business of judging how people have spent their money, that is minefield.

    Agreed. I thought of this, and I think whatever system evolves, it can’t count on leaving anyone destitute, none of us would accept this, nor should we. At the same time, we can still think clearly about differences between needs and wants when it comes to asking someone to “scrimp.” fact is, anyone living solely on current SS is already scrimping, so that’s not a new feature.

    But where I think my idea makes the most sense is when it comes to taxes on and services for two different people who built the same large-sized nest egg on very different income streams.

    like several of your ideas…IF I thought Social Security should be a “retirement system”. However, I just don’t think it should.

    I’d rather individuals be responsible for their own quality of life through out their whole life. I wish we could just completely leave all senior citIzen financial issues to individuals as the Libertarians suggest. However, for a variety of reasons this just won’t work as us humans just have too many weaknesses as well as sometimes people try and make the right decisions and as the saying goes…”shit happens”.

    Yes, many of us wish that we could just completely leave all senior citIzen financial issues to individuals as the Libertarians suggest. But we’ve collected too much data on human nature for too long. So we know that in a democracy, you can trust that the less fortunate and the less-foresighted will come for what the fortunate and the far-sighted have accumulated. So we’re stuck building in enough of a provision for the less-foresighted and the less fortunate that they don’t vote in some nasty surprises on us.

    There just aren’t that many poor or uneducated libertarians, are there? Libertarianism is in some respects a luxury.

    Personally I expect social security to endure as a system which guarantees subsistence-level support in old age for everyone.

    1. Agreed. I thought of this, and I think whatever system evolves, it can’t count on leaving anyone destitute, none of us would accept this, nor should we. At the same time, we can still think clearly about differences between needs and wants when it comes to asking someone to “scrimp.” fact is, anyone living solely on current SS is already scrimping, so that’s not a new feature.

      But where I think my idea makes the most sense is when it comes to taxes on and services for two different people who built the same large-sized nest egg on very different income streams.

      If two people built the same nest egg, an we aren’t talking about them being in poverty, I’m not sure why the government should be deciding that it should help one more than the other. It is admirable that one has built up the same retirement on less resources than the other, but admirable does mean that he should expect the government should help him at the expense of someone who is presumably less admirable.

      It at least doesn’t penalize savings, but someone with a higher income has already paid more in taxes and now you are double taxing them (this time, though, without regard to their situation, some may have blown the extra money extravagantly, but some may have just hit tough breaks).

      If you want to have a poverty prevention program, then that is a decision society has made as a burden society should make and that burden should come from the pool of resources that society has raised for that purpose, general revenues. To do otherwise will inevitably degenerate to avoiding having to deal with it by taking money from someone that isn’t you on the premise that they somehow don’t deserve it.

  13. To do otherwise will inevitably degenerate to avoiding having to deal with it by taking money from someone that isn’t you on the premise that they somehow don’t deserve it.

    Yup. So? We “degenerated” past that decades ago. Deserve’s got nothing to do it it. What matters is that they have it, not whether they deserve to have it. That’s how it works in a democracy.

    So I’m not wedded to any presumption that once someone collected their big paycheck or investment profit we must presume that they unquestionably deserve it or have earned it in a way that means they should be protected from taxation regardless of the lot of the rest of the nation. You seem to suggest that morally it should matter. I don’t take any position on that other to say that yours is unlikely to be factored in.

    In a democracy, what matters is what a majority will support. Deserve’s really got nothing to do with it unless you can use your argument about what is deserved to get a majority of the votes. My sense of human nature is that as we slide down the income ladder, most folks begin to lose the ability (or call it will if you insist) to set aside for long-term needs. They operate on the “we’ll get by somehow” plan. Many plan to work until they die, When their health fails, it gets ugly. America will support those people in some substantial form. And they’ll also vote to keep the SS promises the government has been making annually in the mail. When that promise becomes untenable, they’ll begin reform by looking at who can afford to have their deal changed. Argue the “should” all you want, but this is obviously what is going to happen.

    Fact is, Americans as voters won’t stomach letting the less fortunate suffer substantially. They’re going to get government help. No one can look at how American government operates now and expect otherwise. It’s preposterous. Dare to dream if you must, but I’m predicting it aint gonna happen. I’d bet my house.

    Wealthy and/or fortunate and/or foresighted Americans really do have a defensible moral beef to whatever extent they get tapped to support short-sighted bad actors. But if they think they are going to ride that moral argument to a reform which lets them off the hook for unprepared retiring baby boomers, IMO they’re just kidding themselves.

    The choice for wealthy Americans when it comes getting hooked more to support others is this:

    • spend the rest of your life on high dudgeon, bitter that you truly deserved all you compiled but were screwed out of it by socialists

    • count your blessings that circumstances allowed you to compile so much, and find a way to accept what you view as a screwing with some measure of grace.

    1. To do otherwise will inevitably degenerate to avoiding having to deal with it by taking money from someone that isn’t you on the premise that they somehow don’t deserve it.”

      Yup. So? We “degenerated” past that decades ago. Deserve’s got nothing to do it it. What matters is that they have it, not whether they deserve to have it. That’s how it works in a democracy.

      Looking for reasons why someone who “isn’t you” doesn’t deserve something so you can maintain for yourself or some other group you prefer should, even in a democracy (or especially i a democracy) give people pause. I don’t think it is a good idea for the majority to feel they can do anything they want, regardless of what means to a minority.

      So I’m not wedded to any presumption that once someone collected their big paycheck or investment profit we must presume that they unquestionably deserve it or have earned it in a way that means they should be protected from taxation regardless of the lot of the rest of the nation. You seem to suggest that morally it should matter. I don’t take any position on that other to say that yours is unlikely to be factored in.

      Well, the phrase “regardless of the lot of the rest of the nation” would seem to imply that the country depends means testing social security. I don’t believe this to be true. People won’t be starving if you don’t take money from a small groups and give to others who have no trouble making ends meet.

      Unless you don’t feel people have any right to their money they have earned by work or investment (or whatever), then I think you at least need a decent reason to take it. And if you looking at what burden people should bare, the fact that someone already has borne burden when the money was taxed the first time should matter.

      In a democracy, what matters is what a majority will support. Deserve’s really got nothing to do with it unless you can use your argument about what is deserved to get a majority of the votes. My sense of human nature is that as we slide down the income ladder, most folks begin to lose the ability (or call it will if you insist) to set aside for long-term needs. They operate on the “we’ll get by somehow” plan. Many plan to work until they die, When their health fails, it gets ugly. America will support those people in some substantial form. And they’ll also vote to keep the SS promises the government has been making annually in the mail. When that promise becomes untenable, they’ll begin reform by looking at who can afford to have their deal changed. Argue the “should” all you want, but this is obviously what is going to happen.

      Well, you have two issues here. People falling into poverty and the structural flaws in the system.

      For the first, I have gone over all this with Mark Kleinsmith. For the former, the fact that only a very small portion of resources from means testing will impact that and that one can more easily, fairly, and efficiently achieve that with a program targeted at that problem. As the structural flaws, I don’t think that putting all the burden on a small group that isn’t you (or isn’t the group you prefer) in order to spare anyone else any burden at all is fair, especially since certainly don’t have to be talking about those have trouble making ends meet.

      Fact is, Americans as voters won’t stomach letting the less fortunate suffer substantially. They’re going to get government help. No one can look at how American government operates now and expect otherwise. It’s preposterous. Dare to dream if you must, but I’m predicting it aint gonna happen. I’d bet my house.

      Assuming, by “less fortunate”, you mean people who have real trouble making ends meet (ie not being able to buy as big a High Def TV as they would like). As I said above, if you want to help them, this simply isn’t the way to go.

      Wealthy and/or fortunate and/or foresighted Americans really do have a defensible moral beef to whatever extent they get tapped to support short-sighted bad actors. But if they think they are going to ride that moral argument to a reform which lets them off the hook for unprepared retiring baby boomers, IMO they’re just kidding themselves.

      I think this is getting a little disingenuous. Not forcing someone to bare the entire burden isn’t “letting them off the hook”.

      The choice for wealthy Americans when it comes getting hooked more to support others is this:

      • spend the rest of your life on high dudgeon, bitter that you truly deserved all you compiled but were screwed out of it by socialists

      • count your blessings that circumstances allowed you to compile so much, and find a way to accept what you view as a screwing with some measure of grace.

      And, I have to say, at this point it really reads to me that one is simply mad at the rich for having money and not agreeing they don’t deserve it. It sounds like you feel that those in the top income brackets should be happy with what the government lets them keep?

      This is popular on the left. I happen to think that rich can bear a bigger burden for real problems (and taking money should be done with as much restraint as possible) but a government should never take money because someone doesn’t “deserve” it.

      1. What cranky critter wrote was clearly meant to be a statement of what he thought is a practical perspective on how Americans would react to couple different situations. I tend to agree with his perspective, but even if I didn’t, I would debate the overall meaning versus parse the statements into segments in order to manipulate there meanings in order to better position myself in the argument.

        Seek first to understand the other person and then the debate is more effective.

        1. Seek first to understand the other person and then the debate is more effective.

          Well, after being compared to a holocaust denier, I’m done with this thread. I’ll just say that such a lecture should only come from someone who has gone the extra mile themselves to understand the other side.

          1. Well I deserve the slap as I set myself up when I used Achmadinajad in my example.  In no way is what David is saying anywhere near as extreme or evil or ??? as what who I used in my example to make a point.   It just flashed into my head as such a great example of how someone can just keep saying something regardless of reality.

  14. The exigencies of everyday prevent more than a cursory glance at the comments. With that, I see glaring omissions. No one has apparently read Wilbur Cohen or Bob Ball. They knew more about it’s underpinnings than anyone. Clearly, the program was old to the American people as a social insurance program. The event insured against was a loss of earning power. The real name of the “original” Social Security is Retirement and Survivors Insurance. In the thirties, stopping work was a bad thing, regardless of the reason. People stopped when they were unable to work. As a result, those who “retired” did so because their earning power had declined to the point they were unable to support the family. Or, they died, hence the survivor aspect. The first person to draw benefits was a widow, if I recall. Her husband paid in only a few bucks before he died. True to the insurance model, the widow drew benefits for many years because her husband had effectively paid his premiums, in the form of FICA.

    Another aspect that seems to be overlooked the discussion is Supplemental Security Income(SSI). This program started in 1974 and was designed to provide income to those in profound poverty who are aged, blind, or disabled. The decision to give SSI to the Social Security Administration for administration was pragmatic. The infrastructure was already there. Today’s news is full of articles of people drawing disability benefits due to ailments that the author thinks are not disabling. Often, the impact on “Social Security” is lamented. There simply is no impact on Retirement, Survivors, and Disability Insurance. SSI is funded from the general revenues of the U.S. Discussions of poverty elimination are misguided and demonstrate a lack of understanding of poverty in this country. Simply, an individual may work hard all his life and still end up in poverty for a variety of unforeseeable circumstances. Conversely, many alleging poverty have funds stashed in accounts in various financial institutions which they work very hard to hide from administrators.

  15. Who compared you with a holocaust denier? I missed this?

    David, I think that in more than one place you are misreading my statements as implications of what “should” be instead of as practical descriptions of what I think WILL be.

    You’ve made it clear that you are hostile to the idea that wealthier people who have earned their money and deserve to keep it might be taxed in order to lessen the sacrifice of others. And I think I’ve made multiple attempts to acknowledge that this is a defensible beef. These seem to have all gone right past you, and I have little idea why. I am mystified as to what you feel is “disingenous” about the following statement:

    Wealthy and/or fortunate and/or foresighted Americans really do have a defensible moral beef to whatever extent they get tapped to support short-sighted bad actors. But if they think they are going to ride that moral argument to a reform which lets them off the hook for unprepared retiring baby boomers, IMO they’re just kidding themselves.

    You’re either on the hook for footing the bill, or you are off the hook. That’s all I meant, I’m not making any judgement here. What I am saying is that even if your moral argument (against double taxation, soaking the wealthy, and so on) is a legitimate beef, I don’t think this argument is going to carry the day when push comes to shove in our democratic political system.

    And, I have to say, at this point it really reads to me that one is simply mad at the rich for having money and not agreeing they don’t deserve it. It sounds like you feel that those in the top income brackets should be happy with what the government lets them keep?

    On re-reading what I wrote, I think I can understand why you reacted in this way. But I have to say that I think that you don’t understand the nature of grace. What I said was really just a long-winded way of saying “you probably can’t control what happens to tax rates for the wealthy, but you can control how you feel about them.” As I tried to make clear earlier, I think that higher tax rates on the wealthy are a foregone conclusion, especially as it relates to keeping the promises made by our government to middle class retirees. IMO, it’s not an “if” question, it’s a “when” question. And of course a “how much” question.

    This is popular on the left. I happen to think that rich can bear a bigger burden for real problems (and taking money should be done with as much restraint as possible) but a government should never take money because someone doesn’t “deserve” it.

    Well, I’m not “on the left.” You’ll never find me saying that “deserve” is an appropriate basis for the government to simply confiscate wealth, to take it simply because it wishes the money for its own priorities. But when it comes to keeping promises like SS, I don’t object to looking at a potential taxpayer’s ability to pay. IMO it’s a no-brainer.

    BTW: how many times do I have to say that deserve’s got nothing to do with it.

    As to one last thing you mentioned:

    Assuming, by “less fortunate”, you mean people who have real trouble making ends meet (ie not being able to buy as big a High Def TV as they would like).

    1000 times yes. I’ve stated that I support higher taxes on the wealthy in some instances to support thing like SS and medicare. But that support is absolutely contingent on a serious discussion about what, say, “subsistence level” means.

    If and when America has a serious conversation about all the money it collects and re-distributes, we need to look closely at what passes for “poverty level” in America versus other nations, for starters.

    When I think subsistence level for senior citizens. I think food, housing, healthcare, and income sufficient for household necessities and a few extras. meaning you can afford some, but not all. Not new cars and winters in florida and generous gifts to grandchildren and eating out several times a week. That’s a fair conversation.

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