He is always plotting and carrying out great enterprises, which have always kept his subjects bewildered and astonished, waiting to see what their outcome would be. And his deeds have followed one another so closely that he has never left space between one and the next for people to plot uninterruptedly against him.
–Niccolò Machiavelli, describing King Ferdinand of Aragon, in “The Prince“
With the election a week behind us, the fight is on to get you to believe that you will never see a dime of Social Security, that the danger is so profound that we must act today, and that maybe a healthy cut in your future benefits isn’t really so bad after all.
To help convince you all this is true, a series of TV ads have been produced that imply that the only other solution, short of those benefit cuts, is more deficit spending and endless borrowing. (They have a catchy name for the effort as well: “OweNo”.)
As it turns out, that’s patently untrue, but as I said, that’s a topic for another day.
The idea behind the ads, of course, is to create a space for Members of Congress to vote for these kinds of proposals-but we’re going to strike first, before the ads can really gain a lot of traction.
So here’s the idea: we all have Members who are constantly having to “come home and face the District”; what we want to do is ask those Members, right now, on camera, if they are willing to vote for cutting Social Security benefits or not.
Myself, I like the question: “Are there any circumstances that would get you to vote for cutting Social Security benefits?”
If they say yes, try this: “Why do you like cutting benefits for middle-class people and not taxing 90% of the income of someone who makes a million a year?”
(If you make about $110,000 a year or less, 100% of your income is taxed for Social Security purposes. However, no income above that is taxed-so if you make a million a year, only 10% of your income is taxed, which seems a lot like “trickle up economics” to me…but what do I know?
As it turns out, removing that “income cap”, all by itself, would fix our financing problem for the next 75 years, without cutting benefits at all-again, a topic we’ll flesh out more completely another day.)
Now once we start gathering all these videos, we need a place to put them. Based on the call today, it looks like we’ll be going to the Owe No You Don’t! website, which, by a happy coincidence, is full of helpful resources for those looking to win this fight. The site is not ready to receive the videos today, however, but I will either update here or do a new story to let you know when it is, or if some new plans have emerged.
(Of course, if you get a good video, don’t be afraid to post it to this story as a comment as well.)
I also have available a big ol’ list of who in Congress has publicly said and done what regarding changes to these programs-and if you’re wondering exactly who in Congress supports privatizing Social Security, this is the list you’ve been looking for.
The next step is to put all this video to work: so how about starting right in your own home town? Send a copy of the video to the local newspaper, or the local TV station’s “tip line”. In the other direction, I’m going to try to encourage the folks operating Owe No You Don’t! (with whom I’m currently working) to use that video to get the attention of national media-which means video of Members “ducking and dodging” will be particularly valuable.
You might even get lucky and get a “Sharron Angle”-you know, the one where the person being asked just runs off without even acknowledging that they’re being asked questions, even though you’re right there next to them the whole time, following them and still asking the question, as they hop in the car and run away in fear.
So that’s today’s homework: charge up the camera batteries, go find your local Member of Congress, either pay a friendly visit at the office or catch ’em at a local appearance, and make them either answer questions or run away.
As we gather the videos, they become a media attraction, and we put even more pressure on these folks…and if we get really, really, really, lucky, we’ll find someone who “autotunes” the Members who run away into a viral video we’ll all be proud of.
Good hunting to you all, and in a couple days we’ll all meet back here and talk about the Social Security “tax cap” and financing stability.
FULL DISCLOSURE: This post was written with the support of the CAF State Blogger’s Network Project.
…dead in its tracks, if we make a big enough noise–so go start making noise, camera in hand, and let’s win this one.
The timing is suspicious. Releasing recommendations post-election saved candidates from having to take a position. How convenient to put the last remaining safety nets on the chopping block just when the public is ready to relax.
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p>In June, economist James Galbraith testified before the Deficit Reduction Commission with a scathing critique that should be read in its entirety to be appreciated.
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p>Among Galbraith’s criticisms are the unnecessary secrecy of the commission; the futility of trying to address the deficit without addressing unemployment; the implausible and contradictory assumptions made by the commission; conflicts of interest; a lack of a mandate to address Social Security.
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p>My favorite excerpt is his final paragraph:
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p>
…tell tweety that if you don’t want to cut social security, “you don’t care about this country”…and if that doesn’t sound like someone trying to convince me to go to war in iraq, i don’t know what is.
The Republican party starting with Ron Reagan began cutting taxes drastically, thus becoming “santa”. Democrats were Santa by giving working people the social safety net.
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p>The republican party started cutting taxes despite the deficit.(THEY DIDNT PAY FOR IT.) This exploded the deficit. Timing was everything, NOW the democrats need to be become SCROOGE as opposed to the Santa…either raise taxes or CUT programs…neither will work out for our Party.
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p>If we raise taxes, people wont like it, if we cut programs people wont like it.
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p>Now is the time for the President to put the ball in the GOPs court.
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p>They(GOP) run the people’s purse. Let them make the decision. When they come up with the budget that cuts social programs like medicaid,medicare and soc sec. run up the flag pole with it.
All this fuss over the deficit smacks of a Republican/Blue Dog excuse to gut social programs that they never liked. I would not like to see them get the chance.
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p>The top priority should not be cutting the current deficit, it should be restoring full employment. This would help millions of struggling individuals and at the same time reduce the deficit, since the newly employed will be paying taxes again.
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p>Quoting from Galbraith’s testimonial that I cited above,
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Let me copy that wonderful concise statement again.
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I love the sentiment of “full employment”. The unfortunate reality is that we must seek a different route to prosperity for Americans.
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p>Our economic engine has been focused on producing more at lower cost (in other words, eliminating mid- and lower-level jobs) for decades. We have succeeded in a staggeringly effective way. We have simultaneously (for related reasons) doubled the workforce since the mid-twentieth century.
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p>Our problem is not wealth-creation — our American economic engine generates enormous, mind-boggling wealth. One problem is that we still rely on labor — jobs — to distribute that wealth. In an economy where ten 2010 workers can produce more — many times more — goods and services than a thousand 1950 workers, we will never consume enough goods and services to support “full employment”. A second problem is that both our production and consumption processes assume an essentially infinite energy supply; the reality is precisely the opposite (in spite of our collective refusal to acknowledge this fact).
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p>The world already suffers the consequences of over-consumption, and increasing production more than ten-fold (which is, ultimately, what “full employment” requires) would be devastating to our shared planet.
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p>I suggest that we should be seeking “full prosperity”, rather than “restoring full employment”.
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p>Thanks– I always learn something from your posts and comments.
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p>Now I need some ideas on how the wealth created by full prosperity gets down to people — skilled and unskilled real people who cannot find work.
We all need ideas on “how the wealth created by full prosperity gets down to people — skilled and unskilled real people who cannot find work.”
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p>In my view, that is both the challenge and also the opportunity we face. We too easily allow ourselves to be paralyzed by the inevitable catcalls of “socialism”, “communism”, “Marxism”, and so on, and then lose our focus on solving the real problem at hand.
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p>We live in a prosperous land. We have access to the most powerful tools for creating prosperity that humanity has ever known. It seems to me that we have an opportunity and a duty to discover how to more fairly allocate that prosperity — it is criminal that seniors sustain themselves eating cat food in twenty-first century America.
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p>I suggest that a political party who articulates this vision of prosperity for all, and simultaneously lays out a practical and focused narrative about how to make that vision real, concrete, and attainable is a political party that will ultimately triumph.
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p>I further suggest that this is the underlying appeal of the campaigns of both Deval Patrick and Barrack Obama.
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p>This is the takeaway from Saul Alinski. It is no accident that right wing goes to such lengths to transform Mr. Alinski into yet another villain — this is a powerful vision and organizing paradigm, and the right wing knows it.
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p>We do have the vision, the perspective, and the means to make this real. In my view, the question is whether we, collectively, have the courage of our convictions to actually believe — and therefore act — as if we are right.
…economic prosperity for more americans equals more economic prosperity for wealthier americans–and that’s a sales pitch that is making itself heard, loud and clear, during this recession.
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p>the smart politician creates a “buy-in” for spreading the wealth by making this case to the wealthiest among us: in other words, since “trickle-down” didn’t work so well, maybe it’s time to relearn what henry ford knew and try a bit of “trickle-up” economics instead.
It wasn’t that long ago (1990s) that we had full employment (defined as 5% or less unemployed, not literally “full” employment).
…both you and christopher, which sounds contradictory…but we did in fact recently come out of a period of full employment, and we did not see our gdp decrease by 90% in the process, suggesting a ten-fold increase in current output is not required to return to full employment.
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p>that said, returning to full prosperity is indeed the best path to seek–and i would remind the readers that “full prosperity” is a much bigger measure than dollars and cents.
by lifting the cap on contributions. Why are the ultra rich exempt from paying the tax above the 100K cap. Do the math, I pay 6% of my total income toward social security while a millionaire pays 0% tax on 900K. talk about regressive. LIFT the CAP…dont increase the age.
How much have the people who are on currently SS paid into the system in their lifetime? How much will they take out of the system in their lifetime?
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p>You want to chase the rich for higher income taxes, higher estate taxes and higher everything else taxes and now you want them to pay higher SS taxes even though they will never get it back.
If I make 100K and less, I pay 6.2% of my income toward it. If I make 200K, I only pay 3.1% of my income toward social security. If I make 400K I only pay 1.5% of my income toward social Security.
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p>Notice a trend? The higher your income the less your taxes are.
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p>The ultimate ponzi scheme which hopes that many of will die before we collect anything OR we get enough rich people to contribute far more each year then they will ever collect.
SS is an insurance against poverty due to disability and/or old age. All workers who pay into it have access to its protection when they become disabled or old.
When Social Security was fixed back during the Reagan years, the language changed. About that time, wage earners began receiving annual reports from the SSA, detailing how much was in “their account”. It was then that the idea that SS was a personal pension account for the worker took hold. It was also when the concept of privatization took hold, trying to sell that the worker would know best what to do with his money, and should invest it in the stock market for bigger Returns. As you said, it’s an insurance program.
Go do some reading, then we can talk.
If someone has made an average of 50K a year (which is way over stated) and contributes 6.2% (over stated)to soc sec. that equal to 90K in contributution…or 180K when including employer matches.
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p>So if you do the math the average payout is 1,000 a month.
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p>180 months of payment or 15 years.
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p>Now we both know the average pay over the last 30 years has be way below my 50K mark…and contributions have not been set at 6.2% for 30 year…so the overall total is significantly less.
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p>Possibly around 100K
My math was over a period of 30 years, I forgot to input that into the diary
Assume a starting pay of $50K for a 20 year old, (1) apply a 6.2% SS rate, (2) assume a 2% inflation on wage, (3) then accumulate the contribution but don’t forget the employer contribution of an additional 6.2%. You did. (4) then invest the accumulation at a paltry 2%.
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p>Here’s the math:
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p>The SS contribution will theoretically accumulate by age 65 to approx $485K.
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p>Then (your numbers) assume a $1000 per month payout, which because of inflation is now more like $1700.
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p>20 year life expectancy from age 65 and the recipient dies, leaving about $98K in “the SS bank”.
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p>It is factual that the early contributors took out more than they put in. That’s not the case now.
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p>Further, to your point, because of the cap, obviously someone making more than the cap pays less than the total rate, but so what? Their benefit is also capped. That the way the system was proposed, as an insurance program not as a welfare program.
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p>Apply the unlimited cap, and the entire 75 year philosophy of the program changes.
Again a wonderful concise sentence — Social Security is not a welfare program but an insurance program.
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p>
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p>If, after contributing to social security I died before I could collect, my heirs cannot collect what I paid in.
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p>Besides, I”m paying for folks currently collecting, and my “heirs” will be are paying in for me.
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p>All of us are now paying for Barbara Anderson by the way.
Again a wonderful concise sentence — Social Security is not a welfare program but an insurance program.
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p>
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p>If, after contributing to social security I died before I could collect, my heirs cannot collect what I paid in.
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p>Besides, I”m paying for folks currently collecting, and my “heirs” will be are paying in for me.
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p>All of us are now paying for Barbara Anderson by the way.
…on benefits in the next story…but long story short, a government program that pays $165,000 a year to rich people is going to be more politically vulnerable than a program that taxes with no income cap but does cap benefits.
…are being subsidized in real time by both the us taxpayer and the national debt–as they have been for the past decade–and even now, republicans are demanding that we borrow another $700 billion so that the richest among us don’t have to pay their fair share.
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p>how do you explain this kind of thinking, and why should the rest of us foot the bill for permanent tax cuts for the wealthy that we can’t afford?
did you read the commissions recommendations? thats exactly what they are for! These are moderate reforms to save Social Security, those on the left that deny SS is facing a crisis are just as bad as righties denying global warming.
Last time I checked, the model that uses the most historically accurate inputs showed zero problems. Zero.
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p>A model labeled as “pessimistic” showed an easily-remedied problem that wouldn’t happen for 27 years, and if it did happen, would result in modest benefit cuts.
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p>This is all about swiping the $2.5 trillion SS trust fund to continue tax cuts for the wealthiest Americans.
The CBO disagrees I guess.
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p>
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p>In 2010, Social Security’s revenues will be something like $80 billion HIGHER than outlays. Got that? HIGHER
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p>The CBO is cleverly wording this to ignore interest income on the trust funds. I count the interest from my Treasury bills as part of my income, the IRS certainly does as well. So why on Earth would the CBO ignore SS’s T-Bills – particularly when the trust fund was designed to generate this interest income?
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p>Gotta run now – will shred the rest of this later. Bottom line is that:
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p>1. nothing happening is significantly different than what’s always been planned
2. the sky is not falling now
3. at worst, we’ll face modest cuts in 30 years if the economy performs way below historic norms
4. if we see that the economy is historically underperforming, the fixes are modest and can be accomplished later when we see that the pessimism is warranted.
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p>It says, in the full report this:
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p>
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p>So, it looks like they did indeed include the interest accrued.
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p>You still disagree with the CBO?
From the blog maintained by the director of the CBO:
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CBO, in the report I linked, makes it very clear that i) CBO forsees an insolvency problem with SS and ii) counts accrued interest from US bonds in the calculation.
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p>You, in term, post a link from the CBO director, and a quote, which doesn’t dispute at all, the sources I linked.
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p>You obviously disagree with the CBO report, but that quote doesn’t dispute these facts: CBO foresees an insolvency in the SS systems and yes, it is considering US interest on the money it ‘loans’ to Treasury. If you persist in disagreeing with the CBO post, please give me an objective reason(s). The “but SS doesn’t include interest income” is just plain wrong.
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p>Read the quote carefully that you posted: the interest income does not affect the “unified” deficit. That is, the US deficit. The insolvency of which commentators speak is with regards to the Social Security system.
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p>You admonish others that they should understand the SS system before commenting. Pot, kettle, black, repeat.
it’s simply not true, and is typically of the terror-spew coming out of the people trying to grab the $2.5 trillion (and growing) trust fund.
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p>But, you’re right, that doesn’t address the CBO’s contention.
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p>I haven’t looked at the CBO estimate, but I have spent some time looking at report of the Trustees of the Social Security system, which comes to the same conclusion, in about the same time frame.
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p>Here’s a synopsis from an excellent article on the subject on why the report does not portend doom:
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p>
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p>So, even the “optimistic” estimate, which show’s no insolvency, assumes a GDP growth rate way below historical averages.
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p>The fundamental problem is that those lusting after the $2.5 trillion, and those innocently doing their bidding, are using the numbers incorrectly. There’s no way one can predict with any reasonable reliability what’s going to happen in 30 years. What these estimates are really trying to do is to help us understand what happens in a shorter time frame if bad things happen, and to give some sort of feel to the future. When the “insolvency” date is far in the future or never, even when using pessimistic assumptions, we know we’re OK for now and don’t need to act – but we should always keep an eye on it, of course.
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p>If the projections use a pessimistic algorithm, as they do, then we would expect the date of “insolvency” to move further into the future as time passes. And, in fact, that’s exactly what’s happened. Sure the date sometimes moves up earlier when we have a bad economic year, but over the decades, the “insolvency” date has moved back by decades.
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p>So – no crisis. Nada. Zilch. Bupkes.
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p>Just another raid by the Predator Class on working America.
Remember a few months ago how their predictions about healthcare were unquestionable? But now they are saying something you don’t want to hear so they’re “misleading”.
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p>Why would they be misleading BTW?
I’m all ears. I’ve yet to see a single projection, that uses historical norms, which indicates a shortfall.
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p>Second, re: unquestioned trust in CBO predictions: you must have me confused with someone else. In the case of health care changes, there’s no way they could be accurate because the system was being perturbed, and nobody really knows what will result – a very complicated situation. (Which is why we should just adopt a tried and true program rather than experiment, of course)
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p>In any case, CBO is more likely to be correct on SS because it’s something already in place that’s been running for many years. Those types of things are pretty predictable.
that doesn’t really exist.
There’s an accounting of it, and it’s been used to purchase T-Bills that pay interest.
I have $10 in that bank account. Now I’ll borrow it from myself, and promise to pay it back. Woot! Now I have $22!
…the social security actuaries see the thing–except that there is a bigger problem for the di trust fund that will have to be fixed before 2018…but you should also consider that one of the recommendations is to create a “hardship exemption” for those aged 62-69 who “can’t physically work”…and that will inevitably make the di trust fund problem worse than it is today.
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p>the di trust fund can be fixed, we are told, by raising the payroll tax rate about 1%.
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p>Completely wrong. Of course the funds earn interest.
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p>Of course the models show it, if they are modeling the SS deficit, as opposed to the National deficit in total. I linked to the CBO numbers.
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p>Here are the SS trustees statements:
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p>Got it? Not counting interest, you have a current deficit. Counting interest, you have a current surplus. The importance of this statement is that SS no longer has a surplus to lend to the Treasury so the Treasury has to elsewhere find that funding that they now don’t get from SS.
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p>Then, the Trustees, like CBO, see a deficit appearing in 2037, and there is no Interest income because the loan to US Treasury will have been repaid.
Look up the parable of the widow with two mites.
Maybe your version will say two pennies.
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p>Is the point of that story that we should make every widow contribute till it hurts?
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p>Or is it that people who have more than enough money have a tendency to expect sacrifice from the people who can’t really afford?
I have no money right now and can barely afford health care, yet instead of funding me, a young, energetic worker who is contributing to the system and wants to raise a family, etc., my tax dollars are going towards old people that do not need the money.
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p>I deal with plenty of old people who can barely get by on social security and have to declare bankruptcy, I feel for them, their pain is my pain, and I would hate to be a grandson in that situation. But there are also plenty of people who have generous 401ks and are getting SS on TOP of their pensions. Those people should not get benefits. Its that simple. If you don’t need the money you shouldn’t get the benefit.
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p>The whole point of the parable is that the widow has no one, no family, no husband to support her, so in the Christian worldview she becomes the communities responsibility. It is why I favor social security, why I favor welfare and poverty assistance, why i wish the party would stop running away from completing the vision of FDR, Truman, Kennedy, LBJ the New deal and the Great Society. Why i favor universal healthcare. I also know that money doesn’t grow on trees and if we can fund more housing for the homeless, more schools for the uneducated, more income insurance for the unemployed and the impovershed we should do so. But it requires choices. In 1930 most companies did not give their workers generous pension programs and funds, most people did not invest their savings and plan for the future, most relied on their families and they became a burden to loved ones during the depression hence why SSI got passed. My dad is on SSD now, my mom used to be on welfare, my sister still is. I am not a rich person claiming I don’t want to help poor people, I know better than most that working people are getting screwed on a day to day basis in this country. I know i am making about as much a year as I owe in student loans and that is wrong but at least I got a job when most of my friends don’t.
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p>What I despise, is people double dipping and leeching off the system. It makes it that harder for people who need the money to get benefits. And I hate the emotion involved. Again did you read the report? Where did it call for getting rid of social security? Where did I call for that? It modestly raises the retirement age, adjusts for inflation, and it doesn’t even propose a means test which is used for every other social program ever funded by the federal government. You’re post is a perfect example of the hyberbolic overly emotional debate people have about this topic in defiance of logic and common sense. I want universal healthcare and a balanced budget, those goals are no possible unless we cut entitlements to those that can afford to live without them. If you are making 200k a year when you retire you don’t get benefits. If we did that we could actually afford healthcare for working and middle class people that are not old, we could afford to increase benefits for those that are old and poor. It is because I care so much that I want to make drastic cuts in benefits for those that do NOT need them to INCREASE benefits for those that do.
Do you think Jesus wants us to give our benefits to the poor or to the rich? if the old are rich are they entitled to a benefit just because they are old? and at the expense of someone who is poor?
The Social Security program is an insurance program, not a charity. Parables about rich and poor are not relevant. This distinction is precisely why Social Security has always been a political third-rail, and why it has survived generations of right-wing welfare-bashing.
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p>I agree with you that Social Security has an actuarial funding problem. That problem is readily solved by removing the cap on Social Security wages.
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p>I also think we should consider raising the retirement age. In this case, not because it is forced on us (eliminating the cap solves the problem) but instead because we live in a society where large numbers of people live well into their eighties, and are vigorous and thriving well into their seventies. All of society benefits from recognizing the importance of their continuing participation in the value-creation side of our economy.
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p>In addition, there are some fields — particularly the technical professions — where we desperately need the expertise and wisdom that a generation of retiring baby-boomers will take with them.
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p>If there are any biblical lessons to be drawn, I think we would do well to rely rather more on biblical teachings about the role of our elders, and rather less on charity.
Tom,
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p>What are your thoughts on modifying the proposal you make on removing the cap to provide some relief for self employed people who earn more than the cap but less than some identified higher number (e.g. $500,000). I would propose modifying it to have self employed pay the 13% from $0 to the current cap amount and then 6.5% from the cap amount to the “relief” amount and then 13% on amounts over the “relief” amount.
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p>By doing this you do not penalize small businesses with potentially debilitating tax increases until they have exceeded some higher threshold.
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p>I think it would help.
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p>Thoughts?
I’m profoundly uncomfortable with singling out one particular category of businesses for tax relief.
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p>Instead, I propose to phase in the removal of the cap (for everyone) by increasing the ceiling year-to-year over a period of, say, ten years — the same way it was done in the nineties. That gives all businesses time to plan for the increase, while still solving the actuarial problem.
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p>When I operated my business as a chapter S corporation, I paid myself W-2 income with FICA withholdings calculated in the traditional (employee/employer) way. I enjoyed numerous tax advantages over operating as a sole proprietor. So long as I paid myself (and paid withholding taxes on) a “reasonable” salary (which was always the then-current FICA ceiling), excess income passed through as distributions and was not subject to FICA taxes. Things are murkier as an LLC, I don’t know if the same technique can be applied.
…makes perfect sense, and it doesn’t hurt the math, either, as removing the cap more or less all at once, according to the crs, could generate 115% of the revenue we need to get to fiscal stability.
…is paying its owner $250,000 or $300,000 or $450,000 a year?
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p>if you own a small business and you make $150,000 a year today, this “cap lifting” proposal would cost you about $4200 a year–but then again, if you’re making $150,000 a year you are a distinct minority, as 90% of us make less than about $110,000 a year, this according to a crs report i was referencing for the story i posted today.
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p>of course, if you’re making six-figure wage income, you probably also have capital gains income–and that tax rate has been suppressed and subsidized by the taxpayer for the past decade…so at what point does that business owner feel that they should step up and pay their fair share, and at what point do we stop subsidizing the rich with our tax dollars?
…but how’d you like to be a 70-year-old bricklayer, or nurses’ aide, or food server?
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p>that’s not going to work, and the commission’s proposal envisions an “out” at 62 for those who physically can’t work…but to me that looks like a big hit to the di trust fund, with no new funding identified.
…it is in fact possible to bring social security to financial stability, no cuts required, and to even cut the payroll tax rate at the same time–and none of that is hyperbole.
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p>here’s the explanation of how it can be done, and i suspect we’ll find a lot of common ground at the end.
You pay 6.5%, and your employer pays another 6.5%, totaling thirteen percent. The employer is obligated to pay an “employer share” proportional to your gross salary. That makes it part of your income from the employer’s perspective. The split between “employee share” and “employer share” is a ruse. The proof? Ask a sole proprietor what their “self-employment” tax rate is.
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p>You are absolutely correct, we should remove the cap on FICA taxes.
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p>Meanwhile, of course, we must remember that the “ultra rich” do not get their income from wages. If we define “income” to mean “net change in personal net worth”, then the bulk of said income comes in forms that are already carefully protected from “excessive” taxation (capital gains, estate taxes, etc.).
…12.6%; 6.3% is paid by both sides.
…walks through the math that confirms what you’re saying: this is an easy fix, and raising the cap will solve the problem.
Apaprently Bill Keating didn’t get the memo – it’s the only issue he DID take a stand on, and it will be amusing to see him try to weasel out of it when he votes to please his President.
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p>Ray – about Reagan – he DID change Social Security and make it more solvent. He placed Federal workers into the system so they began to pay premiums, and most states followed suit. Those who didn’t were hit with the ‘offset’ authored by Dan Rostenkowski, which persists in MA evven now, as we are one of the few states that didn’t join. So to rave about his defecits when he actually DID prolong the viability of the system is not fair.
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p>In fact, it was Reagn that shattered the Sacred Sixty-Five. Anyone born 1943 must be 66 to retire with full benefits, and anyone born 1952 or thereafter must be 67 to retire with full benefits. Reagan is actually the only President to reform Social Security since the 1930’s.
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p>What is being proposed now is an extension of that, to 68 and then 69. Given the increase in longevity, it only makes sense to do this. Likewise, raising or eliminating the cap on wages paying in makes sense – what would the equivalent to the 1930’s wage be? It’s merely adjusting the program for inflation.
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p>FULL DISCLOSURE – half my household is on SS now, and the other half is old enough that it wouldn’t affect them anyways. Reagan got us, though.
Per Krugman
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p>
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p>Would you want a bunch of 68-year-old firefighters trying to save your house?
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p>There are limits to how late in life most people can/should do physically taxing jobs, e.g. construction, nursing.
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p>I hope Keating sticks to his guns.
Firefighters don’t collect Social Security anyway – they are part of the state/municipal retirement system, and right now they can retire at 50.
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p>OTOH, I have no problem with a CPA, clerk, etc. being 68 instead of 67, which the age is NOW for those born 1952 and later.
Yes, physical labor is more wearing but some people don’t age well even at clerical jobs.
…but tons of jobs are poorly suited for 70-year-olds: restaurant work, nursing and health care, and construction are all on that list…and those are among the industries that employ more americans than any other, and will in the future.
will cause higher unemployment amongst younger workers. The sooner the elderly get of the payrolls and into enjoying their retirement the sooner an 18-25 year old can start paying into the pension.
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p>This will lower unemployment for the younger generation which is amongst the highest of the demographics
until you are 68 years old is obscene. I know in my trade, there are many 45-50+ men and women who are breaking down already.
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p>Their backs are wrecked, their knees are deterriorating and this adds to the cost of doing business. A 25 year old can climb a ladder, and do the real physical work faster than someone who has been doing physical labor for 35 years and can barely walk a mile.
proposals to make that worse?
And the reality is, he speaks as if they weren’t ALREADY required to work until 67. It’s like the police/fire argument – they don’t collect social security anyway, so why this red herring?
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p>I am well acquainted with a 67 year old who makes a living delivering furniture. He has no plans to live only on his SS, but he may not keep doing that PARTICULAR job either. There is no requirement to keep doing the SAME job until 68, either. The chosen examples are not the majority of the older workforce.
instead they work as a greeter for Wal-Mart
They work in Dunkin Donuts, and dry cleaners, and Stop and Shop, and Hallmark stores too.
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p>What, it’s not a REAL job unless it’s biotech??
That has accumulated more wealth than any other in history, yet doesn’t even consider a social safety net that would allow for retirement to be a social benefit.
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p>As a society we create more than enough wealth so that everyone could get health care, a decent eduction, 5 weeks of vacation, retirement at 65 or even 62. It’s time we killed John Calvin and his pathetic view of slaving away for the unknown master as the highest virtue.
Number-two net exporter in the world, and now they’re flirting with overemployment. That’ll teach ’em to have a social safety net and six weeks of vacation.
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p>Silly chumps!
And that’s as low as it’s been in a long time. It was around 10% through most of the early 2000’s.
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p>France just raised their age from 60 to 63.
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p>and the retirement age for Massachusetts State employees is 55?
Overemployment, unionization, high wages, good middle class jobs, universal medical care, rapid GDP growth… those bastards have no idea of how screwed they are!
Germany vs. US: Two Different Approaches to the Recession-Becker
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p>”The case of Germany is one of the most interesting, only partly because Germany is the largest economy of Europe. Under the long reign by the conservative Christian Democratic Union, little was done to reform the German labor market. In a reminder again of the “Nixon going to China” doctrine, the socialistic Social Democrats, led by Gerhard Schroder, introduced various labor market reforms in 2003 after being elected to power in 1998. He cut the length of the period of eligibility for unemployment compensation, extended the age of retirement and reduced retirement pensions, and made it a little easier for companies to layoff workers. In good part as a result of these policies, while Germany unemployment had been close to 10%, it fell to 7.5% prior to the onset of the recession, perhaps mainly due to these reforms.”
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p>Even before reunification, Germany had a very high unemployment rate.
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p>Germany also has lower corporate taxes.
And, my understanding is that they counted unemployment differently than we do, so US figures would be lower for the same unemployment situation.
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p>Germany’s made some changes over the years, but it’s still tremendously different than the US. Bottom line: Germany is in far better economic shape than is the US, and the US was in far better economic shape back when our economy was structured more like Germany’s – working Americans had economic rights and protections, and the rich paid their fair share in taxes.
they suffer mightily as well, under similarly awful circumstances.
Nobody else can, either.
Or, you spend a lot of time at your public library.
I’m sure that pays far more than a Walmart greeter, unless you’re a lower-level employee or just at the beginning of your career.
our seniors should be sitting at home enjoying their retirement after 30+ years of labor. Especially if it was back breaking labor.
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p>Unless they are working just to keep busy(like a hobby), I find it very disheartening that our elderly can not live a comfortable retirement.
…understood the value of a working retirement system–and if pharaoh didn’t consign his old people to die in the desert…is there any reason we should be going backwards?
and I would reduce it back to 65 if i had the chance. It would increase hiring of yournger men and women which happen to have a very high unemployment rate per demographic
…if we don’t have to do so–and the fact is, we don’t if we work the math correctly.
“Given the increase in longevity”
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p>Stop right there. It’s an increase in longevity that isn’t being enjoyed by everyone, PP. Blue Collar workers are not living longer. Many people who aren’t among the wealthy elite who are living longer, aren’t living longer in a way that they’ll be healthy enough to retire at 69. It is absolutely absurd to think a construction worker, janitor, etc. to work until 68 or 69. You’re almost asking them to work until they die.
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p>Lawyers, doctors and investment managers may very well be able to work until they’re 69 — if they’re able to find and retain jobs at that age, despite all the age-based discrimination — but there’s a giant portion of the working population that can’t.
My grandfather died at 62, my father at 73. Both were blue collar workers. I have family now doing manual labor at 67 – but they will probably live to 80 instead of 73. I LIVE in a blue collar world, and there’s more concern about our kids being taken care of than one more year of work for us.
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p>FYI – those people you see golfing in retirement commercials, living out their golden years with the help of a financial advisor? That was NEVER a blue collar scenario. Most people DID work until they died, and the emphasis was on saving enough not to be a burden if you couldn’t work, not Carnival Cruise traveling.
@Peter “Most people DID work until they died”…that may be the case, but it doesnt make it right.
It’s like women working – both my GRANDMOTHRES had jobs, let alone my mothter. June Cleaver was the fantasy. A safety net retirement was never a reality for most people, and isn’t now, so objecting to changes based on a scenario that was never real isn’t valid.
The issue seems to be that the liberals seem to be angry that we don’t live in Utopia.
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p>”Social Security” doesn’t contribute to the debt problem; there is a trust fund. This is one issue that, for me, is the lefty equivalent of “There is no such thing as evolution” “Global warming a hoax” and “Tax cuts always increase revenues.”
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p>And may be the issue that finally elevates my antipathy to Democrats to a level higher than that toward the GOP, because you can’t deal with environmental issues, or improve civil rights for anyone, or accomplish anything else of note if you have broken the financial back of the government.
The claim that Social Security doesn’t contribute to the debt is not based on the existence of a trust fund. It’s based on the fact that Social Security not contribute to the f***ing debt. It collects more than it pays out.
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p>It only matters where that money goes, to the extent that it goes to other things that really are drains on the public fisc.
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p>If you care about the debt, SS should be low on your list of concerns. What aspect of the chart above, and the many others like it, don’t you understand?
Are you suggesting that saying that there is a Social Security trust fund is equivalent to denying that climate change or evolution exists? Because, if so, that’s just crazy. Why? Because a real Social Security Trust Fund does exist, and reports of its demise are greatly exaggerated.
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p>First off, nobody can deny the existence of something called “the Social Security Trust Fund.” What makes this account “real” is the fact that the “IOUs” that are in this trust fund are backed by the U.S. Treasury in the form of Treasury bonds. These are real obligations just as much as any Treasury obligation. If you don’t think so, then you might as well just destroy any US savings bonds you might have, because, according to this logic, these bonds (and the interest earned on them) are nothing more than “worthless” IOUs.
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p>If we thus acknowledge that Treasury bonds and the interest earned on them are legitimate, then Social Security is still running a surplus. The problem is not with Social Security — it is with other parts of the government using the money in this fund for other spending measures (among the most prominent being tax cuts for the wealthy, funding shortfalls in other accounts, etc.). That’s the fiscal problem we need to tackle. The problems with Social Security pale in comparison.
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p>And we should remember what the idea of the Greenspan Commission back in 1983 was meant to do — raise the payroll tax and make other changes (like raising the retirement age) in order to build up the trust fund at the time. When the government financed massive increases in defense spending and tax decreases on the rich during the Reagan Administration (and later in the George W. Bush Administration), it resulted in the government using this trust fund to finance the broader US deficit — which was intended to be made up for by higher income taxes on the wealthy in future years. Yet Republicans are the ones moaning about “tax increases” on the wealthy now, even thoe funds in the very real Social Security Trust Fund were used a way to finance tax cuts in the past!
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p>You’re usually on top of things like this, CMD, but with all due respect you whiffed on this one completely. I’d agree with you that the debt problem is a major and very serious problem, but Social Security is nowhere close to the top of the list. A much bigger problem are reckless tax cuts for the wealthy and runaway health care costs that are threatening the much more problematic Medicare/Medicaid programs.
Let’s think about how it all works:
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p>The government raises taxes through a variety of measures, through which it funds its operations, including a payroll tax that is, in theory, dedicated to funding Social Security and Medicare. We know that these dedicated funds are super duper safe because the politicians call it a “trust fund.”
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p>But the government’s tax revenues are grossly insufficient to pay for its operations, so the government must borrow. The amount that the government must borrow in a particular year is that year’s budget deficit; as a general rule, consistently large budget deficits are considered to be bad for the overall economic heath of the country.
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p>So, short of cash, the government looks over at that juicy trust fund. And borrows all of it; the trust fund holds treasury bonds. Except that when it reports the size of the budget deficit, it pretends that it didn’t borrow it, but just spent it outright. Otherwise, the deficit would be embarrassingly large. So, the federal budget more or less assumes that the trust fund doesn’t exist.
Then it pretends that the money is still there in the trust fund: it holds all of those precious IOUs, after all.
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p>It is like if you REALLY wanted $10 worth of candy, but only had $5 of allowance, but your friend asked you to hold $5 for him. You spend his money, get the candy, and then say, with a straight face, that you have $15 worth of stuff. $10 of candy, plus his $5.
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p>Oh, but the government can simply create the money, and then, presto, there is cash in the trust fund again, so it is all good. Except that printing extra money is inflationary (that’s why the Fed is busy inflating the money supply right now) and Social Security and Medicare are inflation-adjusted. Which means that if the government fills the gap by creating extra money, then the Social Security obligations will be adjusted, opening a new gap. In other words, creating money will not address the problem of the gap, and certainly will not address the problems created by too much federal debt.
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p>The fact that people talk about the “trust fund” as anything other than a politically convenient fiction is ample evidence that anyone will believe whatever bovine fecal material you feed them, so long as they REALLY want to believe it. So, yes, it is JUST LIKE global warming is a hoax, and man didn’t evolve.
The federal government plays numerical games with how the budget deficit is reported all the time — witness the Bush Administration’s moving the entire cost of the Iraq War off-budget. That doesn’t change the fact, however, that the IOUs held by the Social Security Trust Fund are guaranteed by the full faith and credit of the United States via US Treasury bonds.
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p>That the federal government used the Trust Fund as a borrowing mechanism to finance wars, tax cuts, and other spending is also not a reflection on the stability of the Social Security program. If anything, it’s a reflection of politicians not being willing to make the hard choices of raising taxes and cutting spending elsewhere in the budget.
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p>But the fact that the Trust Fund was available to borrow from is actually an argument for the fiscal success of Social Security (particularly after the Greenspan Commission changes in 1983 helped shore up its finances). I find it ludicrous that some people claim that Social Security is in fiscal dire straits when it is not the structure of the program’s finance that are to blame, but politicians using the Trust Fund as a borrowing tool to finance wars, tax cuts, etc. It’s ridiculous that many of the same people who supported those government expenditures now suggest that we have to gut Social Security because of a phony “crisis” in the program’s finances.
Medicare, that is in dire straits.
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p>I did say that it is a problem, and one that will grow more serious over time. Republicans call it a crisis, which is an exaggeration, and Democrats deny that there isn’t any problem at all, which is untrue.
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p>That chart at the top of the post, which comes to us from Peter Orszag by way of Mother Jones, indicates that the programs finances are level as far as the eye can see. How can this be, given that the working population is going from the peak of the baby boom to the trough of the baby bust? Why, there was a surplus all those years that the baby boom worked, and the system will just spend the “trust fund” and everything will be peachy. So, note, that the government treats the “trust fund” as nonexistent from the perspective of the general budget, but ironclad from the perspective of Social Security.
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p>But how are we to turn those trust fund assets into cash to be paid to beneficiaries? Well, the government will have to pay back those bonds from the general budget. “Full faith and credit of the federal government”, indeed. What that really means is either (i) the Fed creating a lot of new money and then using this money to pay itself, or (ii) significant cuts to government along with significantly higher taxes. Neither of these options are especially palatable. That is why pretending that the investment by the United States government in United States government debt is a “trust fund” is an absurd farce of the truthy variety.
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p>
…generating the cash you need isn’t all that tough.
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p>we’ve been exempting more and more wages from social security taxation since the mid-90s, and if we simply return to taxing 92% of wages, as we have in the past, instead of today’s 83%, we get to 115% of the funding we need for fiscal stability, out through 2084.
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p>and you can do that by…well, just have a read here.
You’re living in a delusion, just like the people you complain about (ie those who don’t believe in evolution). It’s not a matter of whether or not the bonds will be paid back, and it’s not even really a matter of when. It’s going to be paid back.
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p>PS: Social Security is not and never will be a threat to “break the financial back of the government.” This is more delusions on your part. The military spending this government does, sure, and the cost of health care is not only a threat to the government’s balance books, but everyone’s, but not Social Security. Even in the fantasy-based “worst case scenarios,” floated by Republicans and corporatist Blue Dogs, Social Security would be a (fictitious) “problem” the government could easily deal with.
What’s happening now is no different than what was projected. The most-historically-accurate projections show that there will be no need to pay reduced benefits at any time.
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p>This fabricated crisis is just another awful plot to transfer more wealth to the wealthiest Americans.
…to remove that income cap to raise 115% of what you need to get to fiscal stability with no need to raise retirement ages.
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p>here’s the math.
Do you disagree with raising the payroll cap, raising retirement age, and adjusting for inflation?
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p>I mean these reforms are soft, they don’t even require a means test and don’t cut off benefits for the wealthy.
This is interest politics at its worst. The pie of domestic spending is only so big and you have to split it fairly. I think it should go to the poor, middle class, and working class, regardless of age. AARP, some union members, some Democrats, and the ‘get government off my medicare’ crowd want a special, far too large benefit, to go to one group of people regardless of whether or not they need it. Its hard to demonize grandma, its easy to demonize single moms on welfare, laid off workers needing education credits, young veterans coming home to a recession ravaged economy. I am a liberal, of course I support social spending, but I want it to buy opportunity to those that have none or need a helping hand. Reforming this is essential to ensuring more money can be distributed to those that need it, and it is morally offensive that free government benefits go to a lot of people that don’t need them while those that do are starving and unemployed out there.
…is how the wealthy get even more tax cuts under this alleged compromise and people who are just getting by get squeezed.
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p>Also, any deficit reduction plan that spends most of its time discussing domestic non-defense discretionary spending is not worth the paper it’s printed on.
For sure defense spending is the biggest and most wasteful pie and true conservatives should be in common cause with liberals in wanting to make significant reductions, even Def. Sec. Gates agrees here. Also again i am not defending where the commission wants the savings to go-mainly to other ineffective tax cuts. Instead I am saying lets make some SS cuts and tweaks to make it solvent and equitable and use the savings to fund other necessary investments in our health care system and infrastructure. Not tax cuts.
It’s a silly insult to call “interest group politics at its worst” — ie WORSE than hedge-fund tax loopholes etc. — what is actually in almost everyone’s interest: a minimal safety net in old age.
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p>You seem to think that SS benefits are going to rich greedy oldsters and that that is some huge issue. I haven’t heard many people on any side of this worry about that.
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p>But if you really think means-testing is the whole key to solvency, then just support lifting the income cap on the payroll tax. That gets the richer folks contributing more, without confiscating benefits from those who pay in.
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p>SS is not detracting from the government’s ability to fund any other program. It’s a self-funding universal benefit, and easily maintained as such.
I support lifting the cap AND i support a means test. I support all sorts of reforms. And its because I want to save Social Security because I support its mission. I am saying there is a concerted effort to KILL ANY kind of meaningful reform. AARP is against any kind of reform, from lifting the cap or the age, to means testing it. And they are mostly protecting middle class to wealthy elderly citizens that do not need it. We should cut benefits for those that can afford not to have them and increase benefits for those that are barely getting by. I am saying it is special interest plitics to oppose change and to be intractable on this issue. Getting money from the federal government is not a sacred right, but a benefit that should only go to our most vulnerable citizens. If you are making over 200k a year when you retire you should be cut off, if you have over 250k saved when you retire you should be cut off. Thats all I am saying. And its something nearly every major elderly advocacy group opposes. It has been the Democrats and their enabler that have opposed nearly every effort to meaningful reform of this program. Thank God Tip O’Neill had the foresight to reform in the 80s, if only other liberals had his courage today.
Makes a large difference here.
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p>When you say
does this mean equity value in your home as well?
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p>As you are well aware, there is a large number of elders who own their homes but have little other assets. However, their home may have a value well in excess of $250,000.
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p>I also think this type of approach could create a culture where it is more beneficial to you to spend your money on “things” now rather than save for your retirement (as if we are not already there). Why would someone forgo twice a year vacations to save for their retirement if they will “lose” social security by doing so?
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p>I agree with the concept, but not sure how we get there.
…i might average last ten years’ wages…but we don’t have to work this hard to fix this problem.
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p>let’s just get at that taxable income cap, and we’re home free.
I can’t overstate how important I think it is, to both progressive politics and social solidarity, for benefits to remain universal.
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p>The combination of insurance and welfare functions in this program is where we find common ground with people from across the economic and political spectrum.
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p>The AARP’s rock-solid defense of this program is the concrete politics of this vast progressive majority.
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p>The idea that this is something we don’t test for — we just do this for you because you are elderly and we value you — is a profound aspect of the progressive vision. It’s what New Dealers from the 1930s referred to as the spiritual core of an often mishmashed set of policies.
In my social-democratic but still quite capitalistic utopia, very rich elderly people would continue to hold positions of high honor, as a mark of the public’s gratitude for the impending redistribution of 90% of their estates.
and I don’t see anything about private savings accounts becoming part of SS, which I’d definitely be against, but it’s not on the table, so…
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p>1) raises the income cap gradually over next 20 years – not a flat payroll tax like I would want to see, but better – a third of the net savings come here
2) people my age and younger (born in 1983) will have to wait one more year, until we’re 68 instead of 67, to retire. If you are 5 or younger, you’ll need to wait until you turn 69. And a hardship exemption at 62 for those not able to do their jobs anymore but aren’t disabled. Raising the age is 1/5 of the net savings.
3) Making payouts more progressive – if you made less than the median over your life time, your payouts will become higher – if you made more than the median, your payouts will become less – this is nearly half of the net savings
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p>On income taxes, make it simpler (get rid of most of the tax credits etc and have just 3 rates for personal income tax) and treat all income the same (so same rates for capital gains and dividends as money earned by working)
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p>I haven’t read much more of it, but from what I’ve seen and heard so far, this plan is a great starting point for both real deficit reduction and progressive tax reform. Do drop the scaremongering.
I’d agree with you that the plan has some good ideas, which is true as well with the Social Security plan (though I’d favor even more progressive payout rates than suggested here, and raising of the tax from 12.6% to perhaps 13%, rather than raising the retirement age from 67).
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p>However, the income tax portion of this are, in my view, ludicrous. This is supposed to be a deficit reduction plan, yet the top income tax rates are cut to 23%. Yes, I understand that several tax breaks are also cut — but many of them are targeted at the middle class (such as the mortgage interest deduction). So the end result is to lower taxes on the rich, while perhaps raising them on the middle-class. I don’t get why this is part of a deficit reduction plan.
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p>Also, the report barely deals with Medicare and Medicaid. These programs are in far more need of reform than Social Security, chiefly due to rising health care costs.
Leaving aside the radically regressive tax reform (sorry, “simplification”) that fills this package;
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p>leaving aside the fact that the whole point of this commission is to provide a non-negotiable package, so the presence of a few things you like, in any particular version, means little;
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p>leaving aside the fact that Social Security has zero impact on the deficit, and if it ever does, that is easily rectified;
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p>leaving aside the fact that the only truly dangerous long-term factor in our national finances is health care spending, and this says almost nothing about that;
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p>leaving aside all that, you don’t even say why raising the SS retirement age or means-scaling its benefits are good things. I happen to think they suck. Raising the age will hurt many of the most vulnerable people, very badly. Means-scaling benefits will create class conflict and thin out political support for the whole program.
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p>Scaremongering is a highly appropriate response to something that is bleeping scary.
The Commission has put a laundry list of potential items for consideration up on the wall. Great, we now have a place to start.
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p>We can not expect to solve the budget deficit and debt issues if we all take positions that certain items are off the proverbial table. I say, Republican you need to consider changes to tax structure to increase revenues to be used to reduce the deficit and debt. I say, Democrats you need to consider changes to government programs to reduce short and long term expenditures to cut the deficit and debt.
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p>If each party starts with statements then we will get nowhere as a country. We need to look at the final package that comes out of the Commission and consider them in their entirety. The initial proposals seem like a great place to start to me, why? Because no one is completely happy.
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p>Now its time to get to work discussing the issues facing the country and not spouting the same positions on each side. We can keep doing that for the next 2, 4 ,6 whatever, years or we can get to work and come up with compromise solutions that work to make all of America better.
This proposal is not a place to start doing anything. It gets the entire question wrong. It is a plan to shrink government, not to manage deficits or the debt. It puts a cap on revenue, for God’s sake. It ignores health care spending. It’s a joke. This whole commission is a stupid, undemocratic idea that can’t die soon enough.
Cuts the deficit in the second decade. Or so we have been told by the CBO and others. So you could argue that given that Health Care Reform has already had an impact on that part of the deficit then why shouldn’t the Commission focus on the other parts of the deficit? Or you could argue that the Commission “passed the buck” on the health care part of the equation because there is not the political will to tackle the issue. (I happen to believe that they passed the buck myself.)
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p>Either way, you have to start discussing the deficit. The President created this Commission, over the objections of Republicans if I recall correctly, and once the report is issued in early December it will need to be dealt with by Congress.
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p>What is potentially a political masterstroke by the two chairs is to release the draft before it is voted on by the rest of the Commission members. Lacking 14 votes an idea will not be in the final report. Now the chairs have put their ideas out for the American people to consider and weigh in on before the issuance of the final report.
I would agree with you that the Commission passed the buck on health care costs. And I would admit to my conservative friends that the long-term deficit-reducing effects of Health Reform are subject to tremendous uncertainty. This is a real issue that should be an ongoing focus of study as the law’s effects unfold.
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p>But to your larger point, I would say no, you don’t have to start discussing the deficit. Politically, the Commission could be told by Obama and Congress that it has blown its mission and be disbanded in disgrace. And on the substance of the issue, job creation and economic growth will alter the deficit/debt conversation considerably. It makes no sense to attack the deficit right now in the midst of crises in consumer demand and employment. The American people (unlike the political class) have this right, by the way. Acc. to a new poll, 56% want Congress to focus on jobs/economy, only 4% want it to focus on the deficit.
You all seem to be forgetting that 2/3 of the long term unemployed are over 50. A layoff post age 50 is like being thrown in the scrap heap for lots of folks, who find themselves retired but before they wanted to be, who are ready, willing, and able to work – but there are NOT very many jobs for older workers. 40% – or more – of the long term unemployed – or shall I say “involuntarily retired” are in thisthis age group
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p>What about them?
Liberals are invoking a low retirement age that never existed. Fine.
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p>Liberals look down on low-paying retail jobs that many people get along fine in. Good.
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p>There are plenty of arguments in this thread against Social Security reform, that are based on first principles and empirical evidence, not false visions of the past or class condescension. You’re just not engaging them.
is a quality of life issue masquerading as a fiscal problem. There’s a serious problem with healthcare costs, not with social security. The question here is whether we want people to be able to receive social security at a lower age than now. The country can afford it. The question is, do we want people to enjoy social security at an earlier retirement age.
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p>European countries have answered this question in the affirmative. In France, a country with an unabashed welfare state, pensions kick in at 60, or now 62. In Denmark, my friend was CEO of a bus company, a position with a 5 year tenure. He’s now unemployed. He used to complain about the high taxes he paid. Now he’s had a year and a half to think about what he’s going to do. He doesn’t worry about health care. His daughters are attending university; he doesn’t pay a dime. He’s thinking about becoming a minister. Should the U.S. be like either of these countries? Depends on the U.S. The problem here is that we can’t have a fair argument about it because it’s only phrased in terms of affordability. There are costs and benefits to everything. Here we only look at the costs.
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p>Let’s be clear: there is no debate about social security, only an attack by the Very Serious People who don’t need it, and whatever defense we can muster.
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p>
Take a look at that chart.
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p>The problem is not Social Security it’s Medicare / Medicaid. And that’s a medical care cost issue. The great failure of healthcare reform was the focus on health insurance and not how we get a better less expensive healthcare system.
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p>We rank #49 in the world in measures of health. It’s not because of things like guns and car accidents either. It’s a lack of preventive and primary care. It’s putting a lot of money in the wrong places. It’s our crappy diet and lifestyle.
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p>Until we fix the healthcare cost issue, all other budget cuts are almost irrelevant.
It’s allowing people to use Medicaid to pay for nursing homes. THAT is where our budget is getting gobbled here. And to be clear – nursing homes don’t see that money. Reimbursement rates have been cut over and over, and some homes are facing bankruptcy (we have a large selection in my area, and two have gone under and many are in trouble).
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p>It ENRAGES me to hear WBZ rado ads prattle on about protecting ‘your sacred savings’. It tricks people into thinking that they are not obligated to pay for what they consume, and frankly, they are no better than a welfare ‘cheat’ that they may rail against. It’s a tax cheat on a grand scale, with whispers about the change from the three year look back to the five year look back. Ironically, the provision to eliminate the mortgage deduction will exacerbate this, since without it there’s no incentive for a 50+ to keep a house in their own name. If you can’t collect the tax break, then put the house in a trust and make yourself a tenant, and the cash into an annuity or life policy because they aren’t counted as earned income, and – Hey! Presto! Your’re poor enough to quality for free lifetime care!
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p>A BIG part of the problem is the lack of elder care insurance, which nobody buys because they know they can fob the burden off onto the state. Other states don’t pay for this coverage – New Hampshire is notorious for having seniors come to MA to die. Weld tried to institute a 1 year ‘waiting period’ for Medicare benefits to kick in for seniors and it was struck down by the courts.
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p>I am a member of the Locust Generation. We will consume Social Security, we will consume Medicaid.
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p>So let’s make that a lttle harder, shall we?
a year before they’re eligible for Medicaid is a good idea? What if they can’t be cared for at home anymore? What if they’re sick and dying? That’s a very cruel argument you’re making, PP.
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p>If someone’s sick, they should receive whatever treatment is necessary to get better, if possible, or to stay comfortable if not — no matter who they are, what they can afford or even where they come from. One of my professors in college, who’s specialty was the political system of Portugal, ran/runs a summer program for students going abroad at Portugal. One summer he was on a motorcycle, crashed and broke his leg. He kept asking where to give his insurance card and information to, or how much it would cost, and they all kept giving him strange eyes. The notion that he should pay to get better was a complete and utter head-scratcher to them. He got world-class care to treat his broken leg and no one ever gave him a bill, or complained.
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p>If Portugal can afford to do that, why the hell can’t we? Maybe if we didn’t spend so much damn time demonizing people for who they are (undocumented, from NH, >insert color/religion/ethnicity here<), we’d have a country that was infinitely better than it is now, where people treat other people with basic respect and dignity, and we can figure out how to honestly pay for these services — and not just figure out new ways we can fuck with each other and kick others when they’re down, including with awful things like MS or Parkinson’s, who can’t be treated at home anymore and require a nursing home.
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p>My cousin in California has a terminal brain tumor and had a brain surgery to try to get the tumor many months ago at this point which has left her debilitated. She’s my age, but probably won’t make it to 30 or much past there. My aunt, her mother, just lost her husband about a year or two ago. She’s been thinking of moving to other states at this point — with my cousin — because there’s nothing really left in California for her anymore. Do you think my cousin should have to wait a year when or if she moves, before she’s eligible to receive Medicaid? If my aunt decided to move to Massachusetts, to be with what extended family she has left, do you think my cousin should have to wait a year before she’d be eligible for Medicaid? Do you really think that would be a good — or even a humane — idea?
I said NURSING HOME CARE paid for by Medicaid. Many states do not have this coverage under Medicaid – NH is one – and seniors can move to MA and get full coverage with no wait. It’s a big part of why the state budget spends over 50% on entitlement spending. And again – I said that the whole idea tha illegals, etc., are the ones busting the Medicaid budget is a crock – it’s Antie Em, who put the farm in a trust, put the cash into an annuity, and declared herself poor to get taxpayer funded ‘free’ care while all her assets pass to the kids and grandkids.
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p>I would note that Portugal is an entire country, while Mass. is a single state. Should Portugal take care of all of Europe while the Europeans pay nothing to them?
when a British citizen visiting there needs emergency care…
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p>Personally, I think Medicaid (and Medicare, for that matter) should absolutely cover nursing home care. If someone worked an entire lifetime to pay off a modest house, I don’t think it’s right that about 6 months or a year in a nursing home could destroy much of that savings. Millionaires get to leave their families millions. People in the Middle Class should be able to leave something, too. Maybe if we reinstated former levels of the estate tax, we could afford to ensure no one’s losing their entire savings because they need to stay at the nursing home.
And while I’ve taken the position on BMG that the health care bill was actually a pretty good one — a reform that both sets up and was necessary for further progressive reforms in the future — I’d agree that its biggest failing was not doing more to address the costs of health care. What we need are some pretty radical changes — perhaps a complete move from “fee for service” model, or from the entire employer-based health care regime — in order to get costs under control.
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p>Anyone who says with a straight face that Social Security or “earmarks” are the significant problems contributing to the deficit is simply not serious about America’s debt problem (and it is a problem). Period. Especially if they fail to bring up health care costs. Yet this is exactly the type of approach taken by the deficit commission (or at least just Simpson/Bowles). That’s why I think these draft recommendations are a joke, and should be scoffed at by honest people across the political spectrum.
the focus from the left was on the evil insurance companies. The fight became who is profiting… But the real problem with healthcare is the “healthcare” costs. The insurance companies were like stock brokers taking a percentage of each deal. Eliminating them would eliminate 3% of our costs initially, but then our total bill would go up becuase insurance companies were earnestly making sure people don’t use services which are not needed. Of course they err sometimes and deny a service which is needed but nothing is perfect.
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p>Bob menions how poor our healthcare system’s results are and then throws out
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p>With all due respect Bob, we don’t know that. I posted here in October about US Hispanics living longer…
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p>Fact is we don’t know what we need to do to fix our health outcomes. Women in countries which have no programs for pregnant women (no prenatal vitamins, no checkups, no maternity leave…) have better birth morality rates than the US, so… should we drop all our pregnancy programs?
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p>We need to do a lot more research before we can even guess why our outcomes aren’t better than they are. Some guess genes and I agree but my guess is epi-genetics is more important.
The focus of the left was on the public option health plan, not just on punishing insurers for the heck of it.
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p>Preventive care and lifestyle may or may not produce large savings. I don’t think the Hispanic/white comparison is a direct measure of that.
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p>However, I do know that developed nations which have universally available public health systems have lower costs — by a mile — and better outcomes, by a lot. So there’s that.
What are you smoking?? Can you cite any sources to back up these claims about “developed” nations? Waiting times for certain surgeries are longer than a year in most of these socialized medicine countries, and private clinics are growing in both France and England.
to back up YOUR claims about waiting times and growing private clinics? Or is that just for other smoking people?
Actually I thought these facts were so well known that they didn’t need sourcing in every conversation. But, since you ask, you can find the latest available OECD* data here. The site uses frames, so you have to go to the left margin and click on the relevant categories, e.g. Health Statistics-Health Expenditure, etc. You’ll find numbers like total health care expenditure as % of GDP, in which we spend 16% compared to countries like the Czech R., Britain, and Israel, which range from 6-10%. Or per capita, we spend $7100 compared to less than half of that in Britain, e.g.
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p>On outcomes, it’s hard to find any measure of health that doesn’t leave the U.S. in the bottom half of the rich-country league. Here’s an interesting one that speaks directly to the quality of health care: “death by medical misadventure”, in which we place just below the middle of the pack.
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p>I know there are legitimate questions about methodologies in items like infant mortality and life expectancy, but even in apples-to-apples comparisons we do worse than rich countries with public health systems.
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p>As for the waiting-time problem, I can only say this, since it’s usually an anecdotal claim anyway. My family is split between the U.S. and Europe, and I have heard many more insurance-company horror stories here than I have national health system horror-stories there.
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p>*The OECD is the “forum of [33] countries committed to democracy and the market economy, providing a setting to compare policy experiences, seeking answers to common problems, identifying good practices, and co-ordinating domestic and international policies of its members.” I.e., the economically developed world. It’s the go-to source for this kind of thing.
My only question/comment would be that perhaps we are spending more on advanced technology such as open-heart operations and limb replacement. (I am a supporter of universal medicare, by the way)
…then what in the world are you complaining about? I think Medicare for All has quite a bit of support here as the ideal.
Medicare (triple A open-heart surgery); I am afraid that in our haste to copy the European countries we will lose the best aspects of our own system. I am very much in favor of universal medicare for all citizens (supported by a VAT).
…has had two doctors who previously practiced in canada, and they have both told her that “emergent” events will get you in the hospital immediately…especially if your doctor knows who to get on the phone…but a knee replacement is likely to encounter significant delays.
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p>this is in fact a way to manage demand, and it contrasts with france, who uses co-pays as a means of controlling costs and useage in their system.
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p>(in the non-medicare portion of the us system, of course, we exclude various costs from insurance coverage, sometimes in a manner that’s a complete surprise to the claimant, as a means of managing that company’s “cost basis”. when it comes to “best interests”, the system and the claimants are on their own in this scenario.)