Greenspan to Congress: Cut Social Security Benefits

[Dinner]

Since people live so much longer then they did in the 1930's it only makes sense to push back the retirement age.

[Sava]

Originally posted by Oerdin
Since people live so much longer then they did in the 1930's it only makes sense to push back the retirement age.

yes, let's make people work longer

[Wraith]

--"SS is a tax on current workers to keep the elderly from living in poverty."

So, if I'm interpreting you correctly, the only reason you object to SS being called a Ponzi scheme is because it's being run by the government.
Sorry, if it looks like a duck, quacks like a duck, and walks like a duck, it's a duck even if the government puts a "platypus" sticker on it.

--"Ponzi schemes also are fraudulent. "

Have you been listening to campaign speeches and State of the Union addresses lately (like, in the last decade)? All this talk of "Social Security Trust Fund" or "Lock box"... sounds fraudulent to me.

Of course, MTG beat me to it, but I had to say it again anyway.

--"I really don't want to have to retire to a foreign country to enjoymy retireement."

I maintain my at anyone who hasn't retired yet who is actually counting on SS funds.

But only because there isn't a good "Ha ha!" (A la Nelson) smiley.

Wraith
"Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule -- and both commonly succeed, and are right."
-- H. L. Mencken

[Kidlicious]

Originally posted by Wraith
"Under democracy one party always devotes its chief energies to trying to prove that the other party is unfit to rule -- and both commonly succeed, and are right."
-- H. L. Mencken

[Ogie Oglethorpe]

Originally posted by Sava
yes, let's make people work longer

From the plethora of posts here (mine included), some might say "Make people work" would be a good start.

[Sava]

Originally posted by Ogie Oglethorpe


From the plethora of posts here (mine included), some might say "Make people work" would be a good start.

if SS is even still around by the time I'm old enough to retire, the retirement age might be 80...

we should roll back child labor laws too... more revenue

[Ogie Oglethorpe]

Get to work Sava.

Unless of course your implying that your a child.

[Sava]

Maestro of Chutzpah
By PAUL KRUGMAN

Published: March 2, 2004

The traditional definition of chutzpah says it's when you murder your parents, then plead for clemency because you're an orphan. Alan Greenspan has chutzpah.

Last week Mr. Greenspan warned of the dangers posed by budget deficits. But even though the main cause of deficits is plunging revenue — the federal government's tax take is now at its lowest level as a share of the economy since 1950 — he opposes any effort to restore recent revenue losses. Instead, he supports the Bush administration's plan to make its tax cuts permanent, and calls for cuts in Social Security benefits.

Yet three years ago Mr. Greenspan urged Congress to cut taxes, warning that otherwise the federal government would run excessive surpluses. He assured Congress that those tax cuts would not endanger future Social Security benefits. And last year he declined to stand in the way of another round of deficit-creating tax cuts.

But wait — it gets worse.

You see, although the rest of the government is running huge deficits — and never did run much of a surplus — the Social Security system is currently taking in much more money than it spends. Thanks to those surpluses, the program is fully financed at least through 2042. The cost of securing the program's future for many decades after that would be modest — a small fraction of the revenue that will be lost if the Bush tax cuts are made permanent.

And the reason Social Security is in fairly good shape is that during the 1980's the Greenspan commission persuaded Congress to increase the payroll tax, which supports the program.

The payroll tax is regressive: it falls much more heavily on middle- and lower-income families than it does on the rich. In fact, according to Congressional Budget Office estimates, families near the middle of the income distribution pay almost twice as much in payroll taxes as in income taxes. Yet people were willing to accept a regressive tax increase to sustain Social Security.

Now the joke's on them. Mr. Greenspan pushed through an increase in taxes on working Americans, generating a Social Security surplus. Then he used that surplus to argue for tax cuts that deliver very little relief to most people, but are worth a lot to those making more than $300,000 a year. And now that those tax cuts have contributed to a soaring deficit, he wants to cut Social Security benefits.

The point, of course, is that if anyone had tried to sell this package honestly — "Let's raise taxes and cut benefits for working families so we can give big tax cuts to the rich!" — voters would have been outraged. So the class warriors of the right engaged in bait-and-switch.

There are three lessons in this tale.

First, "starving the beast" is no longer a hypothetical scenario — it's happening as we speak. For decades, conservatives have sought tax cuts, not because they're affordable, but because they aren't. Tax cuts lead to budget deficits, and deficits offer an excuse to squeeze government spending.

Second, squeezing spending doesn't mean cutting back on wasteful programs nobody wants. Social Security and Medicare are the targets because that's where the money is. We might add that ideologues on the right have never given up on their hope of doing away with Social Security altogether. If Mr. Bush wins in November, we can be sure that they will move forward on privatization — the creation of personal retirement accounts. These will be sold as a way to "save" Social Security (from a nonexistent crisis), but will, in fact, undermine its finances. And that, of course, is the point.

Finally, the right-wing corruption of our government system — the partisan takeover of institutions that are supposed to be nonpolitical — continues, and even extends to the Federal Reserve.

The Bush White House has made it clear that it will destroy the careers of scientists, budget experts, intelligence operatives and even military officers who don't toe the line. But Mr. Greenspan should have been immune to such pressures, and he should have understood that the peculiarity of his position — as an unelected official who wields immense power — carries with it an obligation to stand above the fray. By using his office to promote a partisan agenda, he has betrayed his institution, and the nation.

link: http://www.nytimes.com/2004/03/02/opinion/02KRUG.html

Wow! Krugman didn't have kind words for Greenspan in his book, "The Great Unraveling". I can't say Krugman is wrong. Social Security is being gutted. I agree that personal retirement accounts might be a good idea, but to make sure benefits aren't cut (because they don't need to be) we should remove (or adjust) the cap on taxable income so we can pay for the accounts without disrupting current benefits. Personal accounts are good for the long term, but would do nothing to improve the system for the short term. Because SS is a pay-as-you go system, taking any money out of it (say for retirement accounts) would mean reduced benefit payouts.

But back to the point, I must admit I've suspected Greenspan to be either incompetent or working for the Bushies; because as Krugman points out, SS is NOT in trouble. It is taking in more money than it is paying out and is healthy until 2042... barring any more sabotage from the Bushies.

[GePap]

I was wondering when you were going to post the latest Krugman piece.

[Sava]

Originally posted by GePap
I was wondering when you were going to post the latest Krugman piece.

best columnist in the world!

[GePap]

IF the NYTimes made people pay, at some point they would sue you for giving their stuff away fro free.

[Sava]

they can sue deez nutz

[Kidlicious]

I don't think the Fed should try to influence fiscal policy. Geenspan claims that we need to cut SS benefits to increase national savings when he has the most powerfull tool at HIS disposal to do that - the interest rate.

[pchang]

projections

All of the numbers are essentially projections out to infinity. SS is taking in more now than it pays. However, the surplus is being spent on general funds and not being saved. SS is essentially holding a big IOU from the general budget. Demographics will eventually cause SS to pay out more than it takes in. When this happens is dependent upon a lot of factors, but the main ones used in their projections are payroll growth, and population aging. No on argues much about the population aging numbers (though some project more immigration, thus lowering the numbers), but there is large disagreement over payroll growth. A difference of only 0.1% per year changes the time line by as much as 10 years. Thus, I wouldn't trust anyone's numbers that much. It is all just a range with probabilities. It is sort of like saying that we know we will all die so we will need a will. The question is, how long can we put off making our will?

[Sava]

However, the surplus is being spent on general funds and not being saved.

which is precisely the problem... instead of saving SS revenue and using revenue from taxes on the rich, Bushy is cutting those taxes (in addition to massive subsidies) and using the regressively collected SS revenue for general funds.

I agree with you on projections... only, a sound policy (different from the craptacular policies under Bush) can give SS a greater chance of being secure in the future.