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Thread: A think tank view on the Budget

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    Veteran Member Hello~Kitty's Avatar
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    Default A think tank view on the Budget

    Very interesting article IMO. Here is an excerpt :

    Our budget stalemate lies precisely in the "value judgments" that the Brookings study avoids. The present political consensus is crumbling. For decades higher benefits for the elderly were effectively paid for by reducing defense spending -- not by raising taxes or cutting other programs. In 1960, defense was 52 percent of the budget; in 2005, it's 19 percent. After Sept. 11, 2001, military spending won't shrink much more, but even if it disappeared, the savings wouldn't cover future spending on the elderly. The same, incidentally, is true of President Bush's tax cuts; even if they were eliminated, the resulting tax increases would only curb today's deficits -- not pay for tomorrow's spending.
    We need a new public consensus to reflect new realities. Because all choices are hard, they require a larger moral and social framework that makes them legitimate.


    http://www.washingtonpost.com/wp-dyn..._opinion/opeds
    Example of discrimination (Imho):

    the only prudent way to treat Islamics in the US and western europe today is along the same vein as Russians and Eastern Europeans were treated during the 'cold war' days - with some degree of suspicion warranted until proven otherwise !

    http://www.stripperweb.com/forum/showthread.php?t=44590




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    Default Re: A think tank view on the Budget

    I posted this breakdown in Dollar Den a few days ago ...



    I agree that future benefit costs to the retired/elderly is a dilemma. All the more reason to 'privatize' social security ASAP, so that some of the future benefit costs to the retired/elderly can be paid for by private sector profits/interest rather than future SSI/medicare/general revenue tax increases.

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    Featured Member discretedancer's Avatar
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    Default Re: A think tank view on the Budget

    10 myths about SS
    http://www.socsec.org/publications.asp?pubid=507
    "Even if Congress were to leave Social Security untouched, the program would be able to pay currently guaranteed benefits in full until 2042, according to the program's trustees. Thereafter, about 70 percent of promised benefits could be financed. The nonpartisan Congressional Budget Office is even more optimistic: it projects that, without changes, Social Security will be able to meet its obligations in full until 2053, after which about 80 percent of benefits still could be paid for."


    \"But by way of perspective, the tax cuts enacted in 2001 and 2003, if made permanent, would cost nearly three times as much: $11.6 trillion, or 2.0 percent of GDP, according to the Center on Budget and Policy Priorities."

    |" Social Security's trust funds, which now amount to $1.5 trillion and are expected to grow to $5.3 trillion by 2018, hold nothing but U.S. Treasury securities. THESE ARE NOT IOUs... U.S. Treasury securities are considered to be the safest, most reliable investment worldwide....Alan Greenspan, now the Federal Reserve chairman, led a bipartisan commission in 1983 that recommended changes to Social Security explicitly to produce the large trust funds that the system will draw on to pay for the baby boom generation's retirement from roughly 2008 to 2030."


    :But the whole reason why President Reagan and Alan Greenspan created the trust funds was to guarantee that benefits could continue to be paid in full when payroll taxes did not fully cover the system's expenses. "

    "the vast majority of today's retired Americans will receive Social Security benefits that far exceed what they contributed in taxes during their working years. While that so-called "rate-of-return" is projected to decline somewhat for future retirees, the program still offers a far better deal than any other private alternative could conceivably provide."]]\\

    The article goes on...but those points match my other research...



    ******


    Twelve Reasons Why Privatizing Social Security is a Bad Idea
    Greg*Anrig, Jr., Bernard*Wasow, The Century Foundation, 12/14/2004
    http://www.socsec.org/publications.asp?pubid=503

    ********

    And of course, as price growth outstrips payroll (see other thread for links) there won't be much for private people to save, and the NEED to pay bills now will outstrip the DESIRE to save for retirement...meaning people will retire broke and we (taxpayers or charities) wiill end up footing the biill

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    Default Re: A think tank view on the Budget

    OK Discrete,
    I am glad you are entirely willing to take a 30% cut in the social security benefits you will be getting when you turn 71 (2042-2005=37+your current age of 34). One day $1500 per month, ===next month a $1000/month (example). Under current law that is what would happen.

    The second paragraph requires a change in the law.

    As for "the vast majority of today's retired Americans will receive Social Security benefits that far exceed what they contributed in taxes during their working years. While that so-called "rate-of-return" is projected to decline somewhat for future retirees, the program still offers a far better deal than any other private alternative could conceivably provide."

    The reason it "provides it" is because it cannot pay for it--guess where the $500/month in the example above comes from. They can't fund it. It is a problem we want to put off and let someone else worry about in 35 years.

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    Featured Member discretedancer's Avatar
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    Default Re: A think tank view on the Budget

    I'm not advocating we don't correct issues in social security....30% cut isn't good...but I am saying (as the Republicans were under Regan, GHWB and Clinton) that it needs repair, not replacement.

    The administration's current proposal will result in MORE than a 30%cut for the LARGE MAJORITY or Americans....or at east it's likely enough I'm not willing to take the risk

    Maybe if SS fund were SEPARATED FROM GENERAL SPENDING and the money "borrowed" from the program over the years were repaid...it wouldn't be so bad.

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    Default Re: A think tank view on the Budget

    THESE ARE NOT IOUs... U.S. Treasury securities are considered to be the safest, most reliable investment worldwide.
    The reason they are safe and reliable is because they are guranteed by the power of taxation. There is no fund. They are simple promises to continue taxing younger workers.

    --

    "Privatization" is no solution either. It will still mean people are forced to do something with their money they might not want or need to do. Repeal and abolishment is the only solution.


    # Reason #1: Today's insurance to protect workers and their families against death and disability would be threatened.

    Social Security is not insurance. It uses insurance imagery as a trick. It is simple two systems effectively: a system of taxation; a welfare program.


    # Reason #2: Creating private accounts would make Social Security's financing problem worse, not better.

    This is absolutely correct

    # Reason #3: Creating private accounts could dampen economic growth, which would further weaken Social Security's future finances.

    That is true. However, Social Security itself dampens economic growth. So you could use this point as a case against Social Security itself. I also see weakening Social Security's future finances as not necessarily a bad idea in the long run interest of liberty.

    # Reason #4: Privatization has been a disappointment elsewhere.

    "Privatization" has. The government does not like real Privatization. The usual form of "Privatization" we get tends to be some kind of state-business alignment. World Bank is also a bad institution to look to for advice on anything. It has been one of those damaging institutions on Earth in the last 20 years and change.

    # Reason #5: The odds are against individuals investing successfully.

    Can be. That is mostly the SEC's fault(along with the Fed and the government itself in general). The game is certainl rigged against the little guy. However, individuals should be able to do with their money what they wish. Taking it away from them because they may nto be "successful' with it is the kind of pattern always used to justify tyranny. It's for your own good, of course.

    # Reason #6: What you get will depend on whether you retire when the market is up or down.

    # Reason #7: Wall Street would reap windfalls from your taxes.

    No question and they doing that right now. Wall Street helped push social security on us too. Big names were invovled in lobbying for it in order to put higher costs of operation on their marginal competitors. FDR was a "Wall Streeter" and this is his progeny.

    # Reason #8: Private accounts would require a new government bureaucracy.

    Probably. Social Security requried a new bureaucracy when it came in as well. Sounds like another good case for abolishment.

    # Reason #9: Young people would be worse off.

    By the "Privatization" proposal? Probably, simply because everybody in the general public outside of the ones who will manage funds and the government itself(metaphorically) will be worse off.
    Again, Young People are worse off because of Social SEcurity than they would have been. They are one of the most DRAMATICALLY effected groups due to Social SEcurity. From the 15-ish percent in their earnings they lose every paycheck, to the loss of capital from their ancestors, Social Security has always punished the young. Another good case for abolishment.

    # Reason # 10: Women stand to lose the most.

    Same as applies to the young applies to women, especially when looked at over a lifetime for their spouse(the capital loss). They also certainly lose when their children lose.

    # Reason #11: African Americans and Latin Americans also would become more vulnerable under privatization.

    Everybody would become more vulnerable under the "Privatization" scheme. However, they are also more vulnerable right now with Social SEcurity than they would be without it. Blacks end up big losers depending on how you look at things. Especially because of the ceiling on the tax and the average income rates of blacks, it looks like a regressive tax on them. Factor in the lifespan difference and it looks even worse.

    # Reason #12: Retirees will not be protected against inflation.
    We are all hurt by inflation to fund big government, and Social Security is a major part of that, even though at current it brings in more money than it spends out. THe financial illusion committed by manipulated "on-budget" and "off-budget" items helped by the Social Security receipts helps the size of government grow propaganda wise(the so called Clinton "surplus") and since the government has yet to have an operating surplus in a long, long, time, a good chunk of the deficit is funded via inflation.

    Only way to protect retirees against inflation is simply to end the inflation. That would require some interesting measures, but it is certainly possible.
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