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Thread: Confiscation of wealth through inflation

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    Default Confiscation of wealth through inflation


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    Banned Melonie's Avatar
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    Default Re: Confiscation of wealth through inflation

    ^^^ governments love inflation because, with a progressive tax rate system in place, inflation raises the effective tax rate without requiring politicians to stand up and vote for a tax increase.

    I disagree somewhat with the author's conclusions though. Obviously the demograpics clearly show that there is no way that Social Security promises can be met while still keeping the effective total tax rate on future American workers to a level that is low enough to allow them to share a few crumbs of yesterday's 'American Dream'. So this will mean reduced SSI benefits for retirees right along with higher tax rates fo future American workers.

    But a new 'wrinkle' will definitely enter this picture ... the abandonment of the premise that SSI is a 'self-financed' system, and the conversion of SSI to an entitlement program. When this occurs, it will also allow the SS Administration to change the SSI eligibility rules to resemble those of an entitlement program ... namely that people who HAVE money don't NEED to receive gov't funded benefits. This is almost guaranteed to result in the institution of an eligibility 'means test' ... which is another way of saying that if an American has scrimped and saved to build up a healthy balance in their 401k / IRA / Roth / Keogh retirement account, then they don't NEED to also receive an SSI check !!! This will happen despite the fact that these Americans have poured hundreds of thousands of dollars in SSI tax money into the SSI system over the past four decades of work. This of course puts an entirely different viewpoint on the wisdom of contributing to gov't sanctioned retirement accounts ... because every dollar you contribute this year may very well translate into a dollar of SSI benefit money that you WON'T receive when you reach retirement age. Like the zero equity trick loan homeowners, gov't policy will very probably bail out those who have acted with financial irresponsibility, at the expense of those who have behaved responsibility with their own finances.

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    Default Re: Confiscation of wealth through inflation

    Quote Originally Posted by Melonie View Post
    But a new 'wrinkle' will definitely enter this picture ... the abandonment of the premise that SSI is a 'self-financed' system, and the conversion of SSI to an entitlement program. When this occurs, it will also allow the SS Administration to change the SSI eligibility rules to resemble those of an entitlement program ... namely that people who HAVE money don't NEED to receive gov't funded benefits. This is almost guaranteed to result in the institution of an eligibility 'means test' ...
    OMG, Mel and I agree on two threads in the same day.

    Z

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