Now I am okay with doing whatever it takes to bring the "benefits" into alignment with the "premiums". This could either be:
- Reducing benefits
- Increasing the payroll tax Rate
However it is interesting that Trump went after them after all his promises to not touch them.
38 comments:
Washington Examiner Coverage
NCPSSM Coverage
Trump should do what he promised to do during the campaign; use the bargaining power of the federal government to drive prices down.
By the way, if American First foreign policy does mean a retreat from our global defense policies, why is the defense budget going up?
--Hiram
It's not interesting. He doesn't know what he's talking about when it comes to policy, so he blows with the wind on most issues.
Well we know we are spending more than we are bringing in...
That idea is pretty simple...
Yeah, well, essentially his solution is to cut Medicare, Medicaid and Social Security so rich guys like himself get to keep the tax cuts. That works out great for him, not so much for the rest of us.
When is a cut not a cut? And since these systems are unsustainable, how do Democrats propose saving them WITHOUT "cuts"? Not possible, of course, but if you reform the system to lower costs for the same benefits....
I am okay with people who can afford it paying more for SS and medicare. Also the wealthy can pay more into these programs.
Laurie,
If you want to do that... Then let's just get rid of social security and medicare...
And call them what they would be ...
- Welfare for old who did not save
- Medicaid for old people who did not save
The biggest reason that SS, SSD and Medicare, along with their supporting taxes, are so popular is that what one pays in is somewhat related to what one gets out...
You are recommending a big tax on some participants that they would never get back.
Maybe we should just start propping up the programs from the general funds. Those funds raised through progressive income taxes.
We are ALREADY "propping up" these programs from the general fund and it will only get worse, continually adding to the deficit. That's why they are unsustainable. The ONLY way to get control of the debt requires that "entitlement spending" be reformed, and one good way is to quit calling them entitlements. SS, for example, could be called "old age and survivors insurance" and made part of an overall "IRA"-type private investment account system. Medicaid could be block-granted to the states. Medicare could be turned over to a "premium support" system for private insurance. Conceptually not difficult at all. Politically difficult only because, for some politicians, reality is not an option.
I personally think it would be easier if we acknowledge that they are welfare programs and stop writing checks and providing health insurance coverage to people who have a net worth of over $500,000...
Of course that would have a LOT of people crying out and gnashing their teeth... Probably including yourself. :-)
By the way, please prove this incorrect statement...
"We are ALREADY "propping up" these programs from the general fund"
Simple. Payouts to SS and Medicare are now partially pulled from the "trust fund." But there is no actual money in the trust fund, only government bonds. Therefore, SSA presents some of those bonds to Congress, and Congress "redeems" them using general funds (thereby increasing the deficit, since Congress has no money, either).
And yes, many times Republicans have proposed reforming Social Security, and the usual talking point is "promises made, promises kept." And the usual Democrat shouting point is that financial reality is just a Republican plot to hurt old people.
These payments are guaranteed by the "full faith and credit," though the actual SSA law say Congress can simply refuse to pay, anytime it wants. There has to be a way (and there is) to keep all the promises already made, and yet save the program's essential purpose (and the country) from financial ruin.
Yes the government needs to refinance their debt from the SS Bonds to non-SS Bonds... I do not see that as the general fund propping up the SS and Medicare.
It seems like a dollar for dollar exchange...
I am pretty sure the DEMs would be fine...
- raising the payroll taxes on the wealthy
- cutting the benefits for the wealthy
It is the GOPers who want wealthy people to keep receiving their "old age welfare" checks whether they need them or not.
about "Maybe we should just start propping up the programs from the general funds. Those funds raised through progressive income taxes." that works for me.
but I also don't have a problem with some people receiving more benefit than they paid and some people receiving less. some people, like minimum wage earners, cannot afford to pay more nor can they afford to save.
Then tell them to learn and move if necessary to get better jobs.
So, you paid in your whole life [in fact were FORCED to pay in] to a "retirement fund" and were promised by the "full faith and credit" of your government a return on that investment. Oh, by the way, we've decided not to pay you because you paid in too much? Sorry, but that is a non-starter for me. And it does nothing to change the nature of this Ponzi scheme-- it is still unsustainable in the long term.
Laurie, what you are describing is key: using the general fund (which we are already using) to finance SS payments while we "transition" to a system of private accounts that are REAL assets. The only question is mathematically what the timing of that transition is. Chile went "cold turkey" and did marvelously. We've had SS for too long to do that. If we take 30-40 years it should work well.
They programs have always been a welfare program. Current tax payers fund it for retired workers.
Chile System Challenges
Current taxpayers fund it for retired workers = the very definition of a Ponzi scheme. The differences being it is government-operated, relies on force rather than choice, and the operators do not get rich nor do they go to jail.
your citation is by one biased non-expert, using his own arbitrary standard, and basically advocating for a full-blown government pension scheme funded by taxpayers, regardless of contribution. That is like insisting that unicorns are better than horses because not everybody can afford a horse.
Current tax payers fund programs that give cash and free healthcare to other citizens... (ie disabled / old / dependents)
The very definition of welfare...
Forbes on Chile
Welfare consists of free money to those who paid nothing for it. SSA and MC are both paid for by people who expect to receive something for what they paid in. Big difference. I think we may be stuck with the notion that some people cannot save enough for retirement and therefore must be subsidized by government AT SOME POINT when they are too old and/or infirm to work. The question is how much you want to penalize those who CAN set aside enough for their retirement, rather than allowing them to provide for themselves.
From Forbes, it appears Chile is still the model for the US, but they are just now identifying that "break point" between welfare and private savings. And I still like the FAIR tax as the quick solution for the funding piece.
Welfare recipients and Liberals also rationalize that they are owed money... That is why that money is labelled entitlements. :-)
The USA already knows the point and made 401Ks, IRAs, etc beneficial for people like me. I sure don't want to try to live on only SS and Medicare when I am old. Therefore I have been saving and investing to avoid that...
Other who are less fortunate or savings oriented will still get something when they are old...
So how about this: gradually transition the "forced savings" of FICA into private investment and HSA accounts, while preserving those promised government benefits for those near or in retirement. End mandatory retirement and taxes on post-retirement work or investment income. Add those who don't make enough to the welfare rolls, with a reduced work requirement for "too old to work." Done.
Because payroll taxes are mostly what funds SS, SSD and Medicare.
As we have noted the rates are not high enough to fund "those promises" we have made as is.
Diverting the funding stream while honoring the promises is not a viable alternative.
Finally, most Americans would end up on those welfare rolls and Conservatives would not want to fund the programs.
This is interesting
Besides I forgot the biggest problem with your accounts plan...
You lose the power of our current "insurance plan"...
We all put into the pot and some win big by living a long time or getting big medical expenses paid for. Others lose out by dying soon after retirement... That is how insurance works...
Private retirement accounts are assets. Die before age 67 and SS pays you/your estate zero. Your personal account pays out 100%. and HSAs are insurance. Now if we all /voluntarily/ put into a tontine, that's fine.
And I think you miss something important. right now everybody is forced to pay into SS. How would they save less money if forced to fund their IRA instead?
HSAs are not insurance.
Neither are IRAs.
Both can only pay their balance.
Whereas insurance can pay far more when needed.
HSAs enable people to buy insurance. Same difference.
IRAs are investments, SS is not.
HSAs result in insurance coverage that can pay out more than they took in, the difference being that the HSA was financed privately by the owner on an actuarially sound basis. NOT a welfare program. Unless you want a "premium support" form of HSA.
IRAs pay out only the balance plus returns, whereas SS pays out more than it takes in. That's a bug, not a feature. But if you put your IRA in an annuity it pays out regardless of the original investment, until the end of your life and, optionally, that of a beneficiary.
Once again you are caught up in defending the fantasy that these government programs can continue to fulfill the promises made for them, rather than the reality that they are unsustainable and will drive the US to financial ruin if we keep pretending otherwise. Quibble about the details, but massive reform MUST take place and the longer we wait the harder the fall.
Sorry but premiums for old folks would be astronomical... Those HSA's would go quick.
You are continually concerned about passing your wealth on to beneficiaries. This topic is about ensuring all old people have some money in their golden years. Not about passing money on to the kids.
The programs can be fixed easily... We just cut all the payments to align with what was paid for... Which means all your checks will go down about 25%... Problem solved...
Perhaps even easier, since all of those trust funds are tied up, by law, in fixed-rate low interest governnment bonds, is to simply raise the interest rate on those bonds to 100%, or more if needed. More drain on the general fund and more increase in the deficit, but all those impossible promises could be kept until the whole furshlugginger mess collapses of its own weight. Exactly where we are headed now, but slower.
And again you assume you know what concerns me. My philosophy, like my father's, is "being of sound mind and body, I spent every nickel." My concern is that my heirs not inherit a crushing federal debt and still not receive the benefits they were deceived into believing they would get. I want those programs reformed ASAP, in a way that doesn't take away anything those near or in retirement are counting on. It must be done; quibbling with any and all proposed solutions does nothing except deny that reality.
Well I don't see your solution ever being implemented... So I would not hold my breath...
Thinking that yourself and others are entitled to the money from younger citizens just because you helped to support older citizens 20 years ago seems a big part of the problem in my opinion.
It was welfare back then and it is welfare today... How does it feel to be receiving welfare payments? :-)
It is a lot like when ACA charged younger people higher premiums to keep insurance costs down for older folks. :-)
But the whole point of my solution is that it preserves the promises made to old folks, while relieving young people of the tax burden for supporting it, replacing that "waste" of their mandatory withholding with contributions to their personal retirement accounts. The employer contribution, plus the general fund, will sustain current benefits for current beneficiaries until they die off, and as they do so the benefits of their "replacements" in the retired cohort will draw, gradually, more and more from their personal accounts and less and less from SS. SS will be "phased out" over the next 40 years.
Well good luck with that... :-)
It is mathematically and actuarially sound, has been reviewed and introduced in the US Senate, but has yet to get a vote. And it actually solves the whole problem. The only obstacle is politicians preferring the fantasy (and political advantage) over solving the problem. And criticizing the President for trying.
Provide a source and I will make a new post regarding the topic.
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