Friday, May 21, 2010

Social Security: On the Chopping Block Again?

Out of FireDogLake comes a new report that the Deficit Commission Obama set up is getting ready to carve out hunks of Social Security, perhaps by zipping the cuts through a lame duck session of congress.

Bad ideas with money behind them never die, do they? Is it time yet to pull our old writings out of the archives and spread the word that, no, Social Security is not in trouble, and that cutting it would be bad for our people and bad for the economy?


pandoy said...

no matter what idea is that, it's all about money.

run75441 said...

Hi Peter:

Unfortunately, the gov likes those surpluses generated by SS withholding taxes. Without the surplus, the poor economy, and a decade of lackluster job creation; the gov General Fund now has to start kicking in a few bucks until all three issues (in reverse order) improve and there is break even or another surplus. The gov, Wall Street, etc. do not want to pay back the funds borrowed from the SS TF.

While SS is no broke or bankrupt, Peterson, Concord, and others will continue to paint a doom and gloom picture of SS which is simply not true. Fix the economic issues and the SS problem could eventually go away. Attack the root causes for healthcare's rising costs and Medicare issues will become less of a problem and private healthcare also.

Min said...

Push it through a lame duck session of Congress? You mean it may be possible that the Dems will gain seats? Or that the Reps want to bolster social security?

Martin Langeland said...

The price of Social Security is eternal reiteration?

Min said...

The price of Social Security is the AARP.

Unknown said...

They are paving the way for another increase in payroll taxes so the wealthy won't have to suffer paying their fair share of the income taxes.

That was the Reagan/Greenspan bait and switch. Massive tax cuts for the wealthy. Massive payroll tax increases on the MIddle Class. The wealthy class warriors are preparing to strike the Middle Class again.

TheTrucker said...

The fact that increasing productivity and economic growth will trump the demographics problem is the hammer that should be used to nail the right wing stupidity. But is this productivity and growth really factual?

What we are seeing in rising GDP may not be any real gain in American productivity, but a gain from using cheap foreign labor. This is to say that we have not actually improved _real_ capital (plant and machinery) but merely added manpower that is not costing us very much. And of course, we are not collecting FICA taxes from the workers in foreign factories.

In a closed society the increase in _real_ capital would probably outrun any "baby boom" problem. But we do not have such a closed system. The shortfall in FICA revenue is due to the fact that we have fewer AMERICAN workers per retiree _AND_ those workers are receiving LOWER wages than would be the case without the off-shoring.

Bruce Webb said...

Let Slip the Dogs of Sawicky!

Unleash Max Kai-Shek!

I am ready to re-enlist: Max Speaks. WE Listen. Just saying.

Bruce Webb said...

The Obama Deficit Commission has fucked itself and doesn't even get why.

They have fatally confused the concepts of 'debt' 'deficit' and 'unfunded liability' and so screwed their CBO score on whatever legislation emerges.

Simpson has promised to hold workers 60 and over harmless in Social Security 'reform'. The Ryan Roadmap extends that to workers 55 and over and 'Mad-Eye' Bachmann suggests 50. Problem? By definition Simpson can't achieve deficit savings until at earliest 2016 when current 60 year olds reach Full Retirement Age. And if benefit cuts come in the form of index changes either for new benefits (now based on Real Wage) or on continuing ones (now adjusted via CPI) you don't get much bump from years 7 to 10. Meaning no good CBO score for you.

On the other hand if you adopt the Ryan Roadmap and exempt workers 55 and over you get no positive CBO score at all over 10 yearsand limited results over 20.

Either route takes billions ot trillions off 'unfunded liabilities' especially when scored over Peterson's pet "Infinite Future Horizon" but they do bubkis for 10 year deficits, and depending on some textbook assumptions actually INCREASE the official definition of Public Debt (as seen on the National Debt Clock).

There is only one way to cut 10 year deficits while also reducing unfunded liability. That is tax increases. Which oddly equally serve to increase Public Debt (even as it theoretically cuts Debt Held by the Public, a different thing altogether).

Do the arithmetic, the Commission cannot move the selected metrics of debt or even deficit with a package of deferred benefit cuts. And the consensus inthe Right since Butler and Germanis' Leninist Strategy of 1983 and Bush's CSSS Commission of 2001 right to Simpson and Ryan today is that cuts to current beneficiaries and those approaching retirement are both inequitable and politically suicideable.

Hoist on their own petard they are.