Re: Social Security Facts:
- Original Message - From: Gary Denton [EMAIL PROTECTED] To: Killer Bs Discussion brin-l@mccmedia.com Sent: Friday, February 18, 2005 4:22 PM Subject: Re: Social Security Facts: Now, would I support lower maximum benefits for Social Security?. I agree in principle, probably not in practice. I also agree that children should be receiving the same kind of program that Social Security has provided for the elderly. They don't because it is a program administered like what you propose to do for Social Security - benefits only to a certain underclass of people. That's not necessarily true. There is just an upper limit on the benefits. Even well off people in their 50s are going to look at SS as something worth keeping, because, [EMAIL PROTECTED] it anyways, they have been paying for years and need to get something back. But, I take your point. Perhaps my suggestion is too progressive to work, and the rise in benefits will have to be slowed with a slighly different mix that improves the progressive nature of SS more slowly. In Texas, where we have the full manifestation of Bush's GOP philosophy, we have the highest number and the highest percentage of children without health insurance and the state refuses to fully fund child health care programs despite most of the cost being picked up by the federal government. First, I think Perry makes GWB look like Michael Mooreso I think that Bush was a liberal Republcan by Texas standards. It's interesting that Kay Baily Hutchenson is making noises about running for governor as a more liberal alternative to Perry. Second, I can't see any benefits to the middle class from this program. So there is a big but here, *But* I am concerned that Social Security has been successful because it had support from all classes except the very rich and was not seen as a welfare program. If you limit it in the way you describe over time there will be more and more support to cut it like all other benefit programs restricted to low incomes have been cut. Maybe I wasn't clear. The asymtotic limit of my proposal is that people of all income get the same benefit. As it stands now, the more you earn, up to the tax limit, the more you receive in SS. I am also concerned that you may be misguided as to what a healthy economic society can afford in social benefit programs. I'm more thinking about how our social benefits programs are now tilted heavily in the favor of old people, and away from children. There is a big step necessary to fix Social Security permanently, provide a funding mechanism that changes with demographics. That funding mechanism would be funding from an estate tax. Can you think of another one? Actually, the estate tax only reflects, in a delayed fashion,** the year density of the population(% of population per year), not the total population of retirement age. The long term problem with SS funding is not the shape of the population pyramid, but the expected life span of Americans. A program (starting at age 67) that pays people who's life expectancy at 67 is 15 years costs 50% more (roughly) than one that pays people who's life expectancy at 67 is 10 years. The estate tax does not address this problemwe only die once. :-) A less important and not permanently viable solution might be trust funds that are invested in higher rate of return investments. That would be the Clinton solution where as bonds in the trust fund mature they are replaced with common stocks and bond investments. But, that's a wash, because T-bills are part of the general investment climate. Schemes that involve borrowing money to make money in investments rarely work in a marketplace. The SSA has recently released a paper that shows if the wage cap on the income subjected to FICA was erased Social Security meets their 75 year viability test. It meets a longer viability test if benefits are not increased for the income over $90,000. Is that an acceptable solution to you? I thought about this a bit, and it depends on what you mean by the last line. If 90k is just inflation adjusted, and not wage adjusted, then that is more than fine. If it is wage adjusted, it only puts the problem of longer life spans off for a while, while increasing the fraction of GDP that is given to the elderly. Dan M. ** If on average, people retired at age X and died at age Y, then the delay would be, roughly, (Y-X)/2. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Social Security Facts:
On Thu, 17 Feb 2005 17:50:00 -0600, Dan Minette [EMAIL PROTECTED] wrote: - Original Message - From: Gary Denton [EMAIL PROTECTED] No, but I would suggest that proposals while there are GOP majorities in the House and Senate and a GOP President will go nowhere. That is likely when something real will happen on the political equation that only Nixon could go to China. Only the Democrats will be able to get the support for a real fix. The last fix, which was bigger than this one needs to be, was with Reagan as president. I think it would be possible for Bush to push through the plan I suggestedespecially if he illustrated that he was putting a high cap on SS. There are also some hidden bias in the example you use. By the time someone will be able to get 90K a year in benefits run through what their income subject to FICA would have to be. (Interesting how increasing this FICA high endcap is also one of the proposals on the table so the GOP doesn't see this as the problem.). Sure, they'd be making a lot of income: roughly two 160k incomes/year. But, that's really the pointas real average wage income rises, so does SS payments. I'm proposing a cap on benefits at roughly 25.25k for a single earner, at roughly 38k for a 1 wage earner couple, and at 50.5k for a two wage earner couple (2005 dollars). This is well above the poverty line. After that, it seems reasonable for people to fund their own retirement. All though this is something that can be pointed to as an example of a system supposedly out of control the real fiscal problems do not come from this maximum wage earners but the low end and the median. It's not so much out of control as needs to be tweaked. In 25 years it would require a massive correction. With my proposal, people now making 30k/year would be maxed out in '45, and folks now making 20k/year would be maxed out around '60. Is there a problem with benefits at the levels I'm suggesting? Dan M. OK, Reagan had bipartisan support - the Democrats will not give Bush bipartisan support because the one time he had it he screwed them. On the No Child Left Behind Act Democrats agreed to his plan because it offered for financial incentives to raise school standards. Three months later his budget chopped off the incentives. He had some but less support on the Medicare Drug bill even though Democrats had always backed this. Most had learned the lesson on NCLB. Sure enough, by the time it was complete it was a huge costly monstrosity with minimal drug benefits but loaded with financial incentives to the GOP constituency - corporations. Corporations receive more of the money from this program than the people on Medicare. Now, would I support lower maximum benefits for Social Security?. I agree in principle, probably not in practice. I also agree that children should be receiving the same kind of program that Social Security has provided for the elderly. They don't because it is a program administered like what you propose to do for Social Security - benefits only to a certain underclass of people. In Texas, where we have the full manifestation of Bush's GOP philosophy, we have the highest number and the highest percentage of children without health insurance and the state refuses to fully fund child health care programs despite most of the cost being picked up by the federal government. So there is a big but here, *But* I am concerned that Social Security has been successful because it had support from all classes except the very rich and was not seen as a welfare program. If you limit it in the way you describe over time there will be more and more support to cut it like all other benefit programs restricted to low incomes have been cut. I am also concerned that you may be misguided as to what a healthy economic society can afford in social benefit programs. There is a big step necessary to fix Social Security permanently, provide a funding mechanism that changes with demographics. That funding mechanism would be funding from an estate tax. Can you think of another one? A less important and not permanently viable solution might be trust funds that are invested in higher rate of return investments. That would be the Clinton solution where as bonds in the trust fund mature they are replaced with common stocks and bond investments. The SSA has recently released a paper that shows if the wage cap on the income subjected to FICA was erased Social Security meets their 75 year viability test. It meets a longer viability test if benefits are not increased for the income over $90,000. Is that an acceptable solution to you? Gary D. This was started early this morning then I had to help my father and stepmother on SocSec and pensions move a new bed. Then I had a call from my nephew Ranger in Mosul who expects to come home in three weeks and see his daughter for the first time. Mosul is bad but better then
Re: Social Security Facts:
* Dan Minette ([EMAIL PROTECTED]) wrote: I'll agree with Erik that the % of GDP going as payments to the elderly should not increase. So, I'd go with a similar reduction in the increase in benefits that was agreed to in '83, with no overall increase in the projected taxes collected (although the tax could be more progressive). I think that would definately get us within the ball park of long term sustainability by 2050. If this were accomplished by changing the indexing formula, as I have suggested, after sustainability was achieved, we would then see SS as a % of GDP slowly decrease after 2050assuming roughly historical ecconomic growth. Nice summary, Dan. The plan you outline would be a huge improvement over what we have now. I'd definitely support something like it. I hope the shrill in the AARP and liberal media don't manage to scotch something like that if it is on the table. -- Erik Reuter http://www.erikreuter.net/ ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Social Security Facts:
On Thu, 17 Feb 2005 12:32:15 -0500, Erik Reuter [EMAIL PROTECTED] wrote: * Dan Minette ([EMAIL PROTECTED]) wrote: I'll agree with Erik that the % of GDP going as payments to the elderly should not increase. So, I'd go with a similar reduction in the increase in benefits that was agreed to in '83, with no overall increase in the projected taxes collected (although the tax could be more progressive). I think that would definately get us within the ball park of long term sustainability by 2050. If this were accomplished by changing the indexing formula, as I have suggested, after sustainability was achieved, we would then see SS as a % of GDP slowly decrease after 2050assuming roughly historical ecconomic growth. Nice summary, Dan. The plan you outline would be a huge improvement over what we have now. I'd definitely support something like it. I hope the shrill in the AARP and liberal media don't manage to scotch something like that if it is on the table. Replacing the payment increase being tied to the increase in cost of living instead of wages may be a deal-breaker for Democrats. All we can go on is past experience - benefits would be cut by more than half now if this had been implemented in the past. It would have guaranteed current retirees a benefit that would be a fraction of what they needed to live on - in the 1930s. It is also contrary to philosophy underlying SS, the benefits you receive are a function of your wages and are closely tied to your wages. The Democrats are in no mood for any compromises, the Bush fix is worse than doing nothing and much more expensive. Bush's efforts of selling the plan have only increased public opposition as more details leak out. Instead of benefits declining by roughly 25% in forty years after the surplus is exhausted and Social Security becomes pay-as-you-go benefits - under a Bush plan would decline by over 50% even including the invested fund benefit. Under current suggested replacement plans SS runs out of money sooner. In place of a $3.7 trillion SS deficit over 75 years starting in 40 years a Bush plan adds a $3 trillion larger general fund deficit starting in ten years. The new privatized accounts don't create an ownership society, they create a supplicant society as the accounts give no survivor or inheritor rights and there is limited right to choose investments. Disability and survivor benefits would start to decline in ten years. It takes some kind of *genius* to think Bush co.has a plan to fix Social Security, they want to destroy it. Gary Denton ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Social Security Facts:
- Original Message - From: Gary Denton [EMAIL PROTECTED] To: Killer Bs Discussion brin-l@mccmedia.com Sent: Thursday, February 17, 2005 12:12 PM Subject: Re: Social Security Facts: On Thu, 17 Feb 2005 12:32:15 -0500, Erik Reuter [EMAIL PROTECTED] wrote: * Dan Minette ([EMAIL PROTECTED]) wrote: I'll agree with Erik that the % of GDP going as payments to the elderly should not increase. So, I'd go with a similar reduction in the increase in benefits that was agreed to in '83, with no overall increase in the projected taxes collected (although the tax could be more progressive). I think that would definately get us within the ball park of long term sustainability by 2050. If this were accomplished by changing the indexing formula, as I have suggested, after sustainability was achieved, we would then see SS as a % of GDP slowly decrease after 2050assuming roughly historical ecconomic growth. Nice summary, Dan. The plan you outline would be a huge improvement over what we have now. I'd definitely support something like it. I hope the shrill in the AARP and liberal media don't manage to scotch something like that if it is on the table. Replacing the payment increase being tied to the increase in cost of living instead of wages may be a deal-breaker for Democrats. All we can go on is past experience No, we can go on what _will_ happen under the plan. My suggestion caps the SS benefit for a single person at 25k/year. For a couple, the cap would range between 38k/year and 50k/year depending on whether both partners work. benefits would be cut by more than half now if this had been implemented in the past. It would have guaranteed current retirees a benefit that would be a fraction of what they needed to live on - in the 1930s. It is also contrary to philosophy underlying SS, the benefits you receive are a function of your wages and are closely tied to your wages. OK, but 25k/year for a single person and 38k/year for two people is not near poverty levels. The Democrats are in no mood for any compromises, the Bush fix is worse than doing nothing and much more expensive. The latter is true iff the money is poorly invested. If it is well invested, the cost should be a long range wash. Bush's efforts of selling the plan have only increased public opposition as more details leak out. Instead of benefits declining by roughly 25% in forty years after the surplus is exhausted and Social Security becomes pay-as-you-go benefits - under a Bush plan would decline by over 50% even including the invested fund benefit. But, I'm not arguing for Bush's plan, I'm arguing for a progressive means of smoothly approaching that figure. Progressive in that the increases in SS benefits for lower income workers are not affected until the lower income workers of the future make 80k/year to 90k/year in 2005 dollars. If we don't cut the rise in benefits, we'll have to keep on increasing the % of GDP that goes to SS. We've done a pretty good job reducing poverty in the elderly. We've done a terrible job with children. Why not slow the increase in the payments to the elderly, so we can adress other needs? Would you suggest that the benefits should keep on increasing on the present schedule, even though it means that the maximum payment to a couple would be 90k/year in 2005 dollars by 2045? If so, why? Dan M. ___ http://www.mccmedia.com/mailman/listinfo/brin-l
Re: Social Security Facts:
On Thu, 17 Feb 2005 12:34:46 -0600, Dan Minette [EMAIL PROTECTED] wrote: If we don't cut the rise in benefits, we'll have to keep on increasing the % of GDP that goes to SS. We've done a pretty good job reducing poverty in the elderly. We've done a terrible job with children. Why not slow the increase in the payments to the elderly, so we can adress other needs? Would you suggest that the benefits should keep on increasing on the present schedule, even though it means that the maximum payment to a couple would be 90k/year in 2005 dollars by 2045? If so, why? No, but I would suggest that proposals while there are GOP majorities in the House and Senate and a GOP President will go nowhere. That is likely when something real will happen on the political equation that only Nixon could go to China. Only the Democrats will be able to get the support for a real fix. There are also some hidden bias in the example you use. By the time someone will be able to get 90K a year in benefits run through what their income subject to FICA would have to be. (Interesting how increasing this FICA high endcap is also one of the proposals on the table so the GOP doesn't see this as the problem.). All though this is something that can be pointed to as an example of a system supposedly out of control the real fiscal problems do not come from this maximum wage earners but the low end and the median. -- Gary Denton Easter Lemming Liberal News Digest ___ http://www.mccmedia.com/mailman/listinfo/brin-l
