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Social Security says system's costs will exceed income this year

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Re: Social Security says system's costs will exceed income this year

#81

Post by ams6110 »

chiefalchemist wrote: post #39
vannevar wrote: post #30

There are two problems with SS, one fixable, one less so. The hard to fix problem is slowing population growth. SS depends on young workers to fund the payments to retirees. But this is really only a problem if aggregate income growth declines with population growth, and it hasn't; the aggregate income of all Americans has quadrupled since 1982, the last time this shortfall occurred. The problem is that the vast majo…

I said this above as well, but our latest DoD budget is $700,000,000,000. I agree with the crux of your analysis. But I also think we literally can't afford to ignore how $700 billion contributes to a multitude of our problems.

I would be the last person to say that there isn't a lot of waste in defense budgets. But you can't spend zero on defense. And the United States also defends all of NATO and a lot of Asia as well as certain other allied countries. Let's say you could somehow shave a few hundred billion out of the budget without materially impacting our defense capabilities and obligations. That's not enough to fix our bigger problems with entitlements.

Re: Social Security says system's costs will exceed income this year

#82

Post by fjsolwmv »

noobermin wrote: post #67
jakelarkin wrote: post #54

Earlier quoted context omitted.

that's not wrong but for the sake of argument perhaps its better to look at the DoD budget through the political lens ... its a corrupt jobs program in which the government funnels money to a broad swath of American states and counties, mostly via defense contractors. Yes its incredible dumb and inefficient but many millions of people earn their livelihood, healthcare and pensions by building useless bombs, so its ha…

Instead you let a benefit the entire population depends on to keep the jobs of a fraction of the population. How is that a rational choice?

If the military industry became unemployed, social security would get a lot more expensive.

Re: Social Security says system's costs will exceed income this year

#83

Post by fjsolwmv »

rayiner wrote: post #78
vannevar wrote: post #71

Earlier quoted context omitted.

From your linked article: "Why, according to the OECD, is the US system so progressive? Not because the rich face unusually high average tax rates, but because middle-income US households face unusually low tax rates--an important point which de Rugy mentions and Chait ignores. How does the picture change if you take indirect taxation into account? That would make the US system look even more progressive, because the…

No, the real point of the article is that "according to the OECD, "the US system [is] progressive." The most salient feature of the U.S. tax system is that "middle-income US households face unusually low tax rates"-- i.e. the system is highly progressive. The U.S. tax system is progressive well into the top 1% of income earners (by contrast, Germany, Sweden, and Denmark have a relatively flat tax structure after abou…

What about health insurance? USA's privately funded health insurance is equivalent to flat or regressive tax, not a progressive tax.

Re: Social Security says system's costs will exceed income this year

#84

Post by dragonwriter »

gringoDan wrote: post #5

We've known this was coming for a long time...as a Millennial, I don't expect to ever see a cent of Social Security benefits.

> as a Millennial, I don't expect to ever see a cent of Social Security benefits.

Even if the Trust Fund is fully exhausted, beneficiaries will see a sizable fraction of full benefits from current payroll taxes.

The only way this doesn't happen is if the program is modified to affirmatively deny people already-earned benefits, which is probably less politically viable than fixes that would protect full benefits even with pessimistic projections.

Re: Social Security says system's costs will exceed income this year

#85

Post by dragonwriter »

rayiner wrote: post #79
dragonwriter wrote: post #73

Earlier quoted context omitted.

> Our tax policy is among the most progressive in the developed world Not as applies to Social Security, which has a dedicated funding stream independent of general revenue, consisting entirely of a flat tax on labor income below a certain level and no tax above that level which constitutes a two-timer regressive tax on labor income made even more regressive on total income because the high end of the total income di…

A flat tax on labor income, with a cap, is a typical model for Social Security in Europe. E.g. France, Germany, etc. Ours is more progressive because the cap is generally higher.

> A flat tax on labor income, with a cap, is a typical model for Social Security in Europe.

Yes, and the US funding system is similar to that norm, not unusually progressive as claimed upthread.

Re: Social Security says system's costs will exceed income this year

#86

Post by Avshalom »

fjsolwmv wrote: post #80
Avshalom wrote: post #77

Earlier quoted context omitted.

The fundamental/fucked-up thing is that if you cut the military budget it's not that soldiers stop getting recruited it's that tank/jet/boot/GPS/mre companies start firing people. The Military Industrial complex is a huge welfare/workfare program that no one in power is willing to cut. So until we can convince essentially EVERY voter (any party: libertarian, green, D or R) that it's okay to have a real safety net the…

A lot of military spending is building stuff to blow up. I rather pay people to build windfarms and trains.

Oh God So Would I.

I'm on my phone otherwise I could list umpteen better uses of the money. But they all involve firing people then hiring people. MRE quality assurance however is not co-located or skill- transferable to installing solar panels in the llano estacado. And people losing their jobs are always going to be more motivated voters than people who might get a job.

Re: Social Security says system's costs will exceed income this year

#87

Post by mikeash »

rayiner wrote: post #58
mikeash wrote: post #46

Earlier quoted context omitted.

Is our tax policy still among the most progressive if you account for the full payroll tax (not just the employee side as apparently that study does) as well as the many other federal, state, and local taxes we pay?

Yes: https://www.washingtonpost.com/news/wonk/wp/2013/04/05/ameri... Looking at those additional taxes for both U.S. and Europe generally makes the U.S. even more progressive. For example, sales taxes are highly regressive. European countries rely heavily on 20-25% VAT taxes to raise revenue, while U.S. states typically have 5-10% sales taxes. The maximum rates and various caps just generally kick in much earlier. In…

Thanks!

Re: Social Security says system's costs will exceed income this year

#88

Post by rayiner »

fjsolwmv wrote: post #83
rayiner wrote: post #78

Earlier quoted context omitted.

No, the real point of the article is that "according to the OECD, "the US system [is] progressive." The most salient feature of the U.S. tax system is that "middle-income US households face unusually low tax rates"-- i.e. the system is highly progressive. The U.S. tax system is progressive well into the top 1% of income earners (by contrast, Germany, Sweden, and Denmark have a relatively flat tax structure after abou…

What about health insurance? USA's privately funded health insurance is equivalent to flat or regressive tax, not a progressive tax.

Half of US health care expenditures come from the government. Medicaid is funded by general tax revenues (based on highly progressive income taxes). Medicare is funded by a flat tax with no income cap.

In Germany by contrast, health care is paid for with a regressive mandatory insurance premium of 15.5% on income up to about $60,000.

Re: Social Security says system's costs will exceed income this year

#89

Post by lamarpye »

jakelarkin wrote: post #54
chiefalchemist wrote: post #36

We have the resources. What we lack are necessary priorities and the resolve to fix them. The latest DoD budget is $700 billion. Russia's DoD budget is approx 10% of that. That's not a typo 10%. China might not be an ally - in the historical European sense - but given our symbiotic economic relationship it would like take quite a bit for a true military conflict to break out between the two countries. Even if our DoD…

that's not wrong but for the sake of argument perhaps its better to look at the DoD budget through the political lens ... its a corrupt jobs program in which the government funnels money to a broad swath of American states and counties, mostly via defense contractors. Yes its incredible dumb and inefficient but many millions of people earn their livelihood, healthcare and pensions by building useless bombs, so its ha…

It would be an interesting experiment to see what would happen if the cut the US military budget dramatically. I am of the opinion that it would decrease the world stability and millions of people would die. But YMMV.

Re: Social Security says system's costs will exceed income this year

#90

Post by encoderer »

prklmn wrote: post #64
encoderer wrote: post #42

Earlier quoted context omitted.

Social Security is not a retirement account. We're paying today for the current generation of retirees so we don't have a class of elderly homeless eating cat food and dying in our streets. Means testing is consistent with this outcome.

Means testing gets you nowhere because there are so few people who would qualify as too rich- it would be less than a drop in the bucket "saved." It would be purely symbolic, and it's another way for those in power to say that we punish the rich and social security is a wealth transfer to the poor, then use that as a reason to abolish it. The idea of means testing is totally counterproductive to your goal. Also as an…

Probably true, though separate from the argument that means testing is "unfair".
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