Democrats trying to cut social security

[General Zod]

Yeah but in no way have you shown why reducing it entirely is bad. All you did was point to an article where a few economist suggest that we should reduce the long term deficit but for the short while increase spending to help give growth to the economy, no where in that article do they suggest we should always have some kind of deficit, in fact they specifically said the goal should be to balance the budget.

Even if you tried to eliminate it, it's mathematically impossible. If you can't see why bankrupting every person in the US to eliminate the national debt is bad then I can't really say anything else on the matter.

It's the difference between taking out a loan to start a business, that you intend on fully paying off, and running constant credit card debt that you never pay the principal off of.

Individual economics don't work on a national level. You don't seem to get this.

[The Guid]

No one, but if we're going to try to reduce the deficit, we might as well try to go all the way.

You realize that the government needs a deficit for purchasing power to begin with? It's unrealistic to eliminate it entirely.

(emphasis mine)


Wait... what?

Can someone point me in the right direction of how to make this make sense in my brain. I'm not disagreeing with you, to be clear, I just don't understand it.

[Alphawolf55]

This article seems to be about paying off the National Debt, not eliminating the deficit. Which are two entirely different subjects. Also this source seems a little suspect since this seems to be typical libertarian federal reserve conspiracy.

Or are you talking about the part that talks about future liabilities for SS and Medicare?

Also I get that personal finance and country finance are different, I was just showing the difference between what they were suggesting and what you seem to be. For example it's far harder for a country to go bankrupt vs an individual, but it doesn't mean there's no consequence to ever increasing debt and like I said, it's fine if inflation keeps up with out deficit spending, but if inflation comes to a crawl, then even small deficits over long periods of time can lead to huge issues. My

[Ritterin Sophia]

Zod, quick question, where did you get that military spending is 23% of the GDP, last I checked it was ~4.4%.

[Agent Sorchus]

I do believe Zod means that the military is 23% of government Spending, not GDP.

[General Zod]

I do believe Zod means that the military is 23% of government Spending, not GDP.

I may have accidentally mixed up those two terms.

[aerius]

You realize that the government needs a deficit for purchasing power to begin with? It's unrealistic to eliminate it entirely.

(emphasis mine)
Wait... what?

Can someone point me in the right direction of how to make this make sense in my brain. I'm not disagreeing with you, to be clear, I just don't understand it.

It's bullshit. Canada ran a budget surplus for over 10 years and our purchasing power was just fine, same thing with Australia. I don't know what the fuck Zod is talking about.

[Phantasee]

And even if he means debt, it's still wrong. Alberta paid off the last of its debt and the result is that now the province can borrow money for way cheaper than anyone else, which is a positive in this recession.

[Master of Ossus]

Even when the US has run surpluses, they have historically tended to maintain some level of "debt" just so they have some fiscal influence over the economy. That might be what he's saying, but it's a pretty bizarre way to formulate it since obviously they're servicing that debt and they also have cash reserves. It's not like it would be impossible to do away with even that level of debt with a country that was running a significant surplus, even if it was considered inadvisable.

[Ritterin Sophia]

Okay since we've figured out that the US is still spending ~4-4.5% of the GDP on the military. Why don't we tax the upper class more? We're in a balance sheet recession, the problem isn't that the US government is spendiing too much money, it's the top 1% of the country aren't spending their money to stimulate the economy and no amount of stimulus money is going to help iif they aren't spending.

[aerius]

We're in a balance sheet recession, the problem isn't that the US government is spendiing too much money, it's the top 1% of the country aren't spending their money to stimulate the economy and no amount of stimulus money is going to help iif they aren't spending.

The US government went from spending $3.1 trillion in the FY2009 budget to $3.55 trillion the next year and $3.83 trillion for FY2011. That's like what, a nearly 30% ramp in expenditures and it's not a spending problem? Really?

[Ritterin Sophia]

We're in a balance sheet recession, the problem isn't that the US government is spendiing too much money, it's the top 1% of the country aren't spending their money to stimulate the economy and no amount of stimulus money is going to help iif they aren't spending.

The US government went from spending $3.1 trillion in the FY2009 budget to $3.55 trillion the next year and $3.83 trillion for FY2011. That's like what, a nearly 30% ramp in expenditures and it's not a spending problem? Really?

I know you're probably stoned out of your mind right now, but that's closer to a 20% (23% increase to be precise) rise. I should probably clarify, whilst there is some overspending the vast majority of the problem is the lack of any real tax burden on the upper class and lack of regulations. The rich are not getting taxed sufficiently and hoarding their wealth, refusing to spend that money which is no longer going into Federal and State taxes.

[aerius]

I blame the solder fumes from the fried power supply on my computer. It's not my day today.

[Soontir C'boath]

No one, but if we're going to try to reduce the deficit, we might as well try to go all the way.

You realize that the government needs a deficit for purchasing power to begin with? It's unrealistic to eliminate it entirely.

(emphasis mine)


Wait... what?

Can someone point me in the right direction of how to make this make sense in my brain. I'm not disagreeing with you, to be clear, I just don't understand it.

Indeed, would someone explain how owing money would have 'influence' or better 'purchasing power'? How is it better for the government to owe money rather than not and being able to spend freely on things other than the interest on the debt for instance? I would think the government would have better purchasing power by buying things without having to pay interest for it and have better influence by having a guarantee to pay for the things they want to get since...they actually have the money

[D.Turtle]

The only thing that comes to mind as to what Zod could mean is chartalism.

[Rogue 9]

Are you honestly arguing that there are no SS recipients, with generous pensions or huge retirement funds that could survive or even live a modest life style without SS? I mean I'm not going to argue against the idea that 90% of recipients need the money, but are you saying that all 100% of them do?

All that would mean is that you punish people who save their money during their life. Why would you do that?

Especially since there is no need to cut Social Security, even without changing anything Social Security can cover all payouts until 2037 and cover 75% of the payouts beyond that.

Funny, my own SSA annual statement, which I got in the mail a couple weeks ago, isn't so rosy. The numbers are the same, but apparently unlike you, the administration realizes that exhausting the trust fund in 27 years (translation: well before a large percentage of the people currently paying in retire and receive their earned benefits) is a serious problem. I quote:

About Social Security's future...

Social Security is a compact between generations. Since 1935, American has kept the promise of security for its workers and their families. Now, however, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today's younger workers are ready for retirement.

In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted* and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits. We need to resolve these issues soon to provide a foundation of protection for future generations.

<snip intervening section on the Social Security website>

*These estimates are based on the intermediate assumptions from the Social Security Trustees' Annual Report to the Congress.

(Incidentally, the report tells me that over my working life, I've grossed $49,239 in total wages from 2001-2009, and paid $3,049 to Social Security and $709 to Medicare. I have kept records that would let me determine this, and compared to ensure accuracy, but it's nice to have it all on one paper. Wooo.)

At any rate, Social Security is a long-term program. Becoming insolvent in 27 years when people typically start paying in with 40 years or more to go until retirement is a huge problem for those not set to retire in a few years. The report (which is not based on a worse case projection, let me remind you; while unlikely, things could turn considerably worse than the projection you cite) states that by 2037, the trust fund will be exhausted and new taxes at current rates and population levels will only be sufficient to pay out 76 cents on the dollar, presumably without resuming putting anything back. That means that at the first demographic blip, that number could nosedive and there wouldn't be a God damned thing anyone could do about it. Twiddling our thumbs and saying that close enough is good enough isn't going to fix the problem, and if it's to be fixed the fixing needs to start now if the changes aren't going to leave a gap where the fund is insolvent.

[D.Turtle]

Except that the needed fixes ARE so fucking easy and simple:
Either raise the payroll tax by about 2%
OR lift the cap on the income considered for payroll taxes
etc.

It is very easy to fix the funding gap.

And even more, WHY does Social Security have to be self-funding? Why not let the Bash tax cuts for those making more than $200k expire and bookmark those funds specifically for Social Security?

There are a million and one easy fixes for funding Social Security - without lowering the amount paid, or raising the retirement age, etc.

Compare that situation to health care - where long term projections ARE a huge problem. Social Security is peanuts compared to that.

The US already has the lowest income taxes in something like 40 or 50 years - raising those taxes should be a no-brainer. What the US needs is people to start making a case FOR government spending, instead of always treating government spending as a necessary evil.