Don’t cut Social Security, DOUBLE It

[kpete]

http://www.newamerica.net/publications/policy/secure_retirement_for_all_americans

Don’t cut Social Security, DOUBLE It

By Steven Hill

In the aftermath of the Great Recession, a debate over Social Security is heating up. This debate raises fundamental questions about the kind of society in which Americans wish to live. So far, the debate has been between deficit-busters who say Social Security must be trimmed back to reduce government indebtedness and others who want to maintain it as is.

But the New America Foundation just released a study http://www.newamerica.net/publications/policy/secure_retirement_for_all_americans that proposes a different approach: doubling the current Social Security payout, and making it a true national retirement system. Creating a more robust system of “Social Security Plus” not only would be good for American retirees, but also would be good for the greater macro economy.

...............

An expansion of Social Security — one of the most successful and popular social programs in American history, currently celebrating its 75th year — would be good for the macro-economy as well because it would act as an “automatic stabilizer” during economic downturns, keeping money in retirees’ pockets and stimulating consumer demand. Benefits would be portable when changing from one job to another.

It also would help American businesses trying to compete with foreign companies that don’t provide pensions to their employees, since those countries already have generous national retirement plans. And it would be broadly fair, since even those higher income Americans who are losing their tax deductions would see part of it returned to them in the form of a greater Social Security payout.

more:
http://firedoglake.com/2010/09/02/special-salon-steven-hill-dont-cut-social-security-double-it/

.............
Bingo.
And, I would point out, Social Security has turned out to be much more stable than any of the other “legs” of our three-legged retirement stool, i.e. company pensions and private savings/homeownership.
http://firedoglake.com/2010/09/02/special-salon-steven-hill-dont-cut-social-security-double-it/#comment-2209038
http://www.ft.com/cms/s/2/1a8a5cb2-9ab2-11df-87e6-00144feab49a.html
http://growth.newamerica.net/sites/newamerica.net/files/policydocs/FreedomFromFear.pdf
http://growth.newamerica.net/sites/newamerica.net/files/policydocs/Hill%20-%20Social%20Security%20-%2013-Aug-10%20-%20spaced%20graphs.pdf

[Little Star]

1. k&r

[BrklynLiberal]

2. No argument here.

Cenk had some great suggestions on how to cut govt spending when he was on The Dylan Ratigan show today..

[Timbuk3]

3. Proud to be K&R #5

[Hell Hath No Fury]

4. Sorry, but that --

is too fair and makes too much sense. Can't do that!

[baldguy]

5. SS is in financial trouble only because only half of the total personal income is taxed for it.

[glitch]

10. SS is not in financial trouble, and won't be until 2037.

The only trouble is for the people who borrowed from it that don't want to pay it back.

[sabrina 1]

20. And that figure is the worst case scenario coming from the

SS Trustees' Report this year based on a bad economy with high unemployment. And even during these bad economic times, it is still running a surplus.

There are other assessments, eg, from the Congressional Budgetary Committee which puts that figure at between 2041 - 2049, closer to estimates from previous reports.

[glitch]

21. True that. nt

[dkf]

30. We aren't running a surplus. We stopped this year.

[sabrina 1]

43. No we didn't stop this year. According to the Trustees' report

we are projected to run a surplus for 2010 of $76.7 billion dollars. SS has more than one source of revenue:

Social Security Trustees Report

* The fact that 2010 benefit payments are projected to exceed one part of Social Security’s dedicated revenue, that from so-called payroll taxes, ignores the fact that 2010 benefit payouts are less than all of Social Security’s income combined.

* Social Security has three revenue sources: (1) mandatory contributions, deducted from the wages of workers, and matched by employers (commonly referred to as “payroll taxes); (2) interest earned on revenue not needed to pay benefits and expenses in prior years, and so invested in certificates of obligation and bonds issued by the U.S. Treasury, and (3) income taxes on the Social Security benefits of those with higher incomes.

* These three sources of revenue, taken together, are projected to exceed the cost of all benefits and associated administrative costs in 2010 by a projected $76.7 billion, according to the 2010 Trustees Report.

And it is not unusual for this to happen:

* There is nothing new or surprising about Social Security’s benefits exceeding the payroll tax contributions.


* Benifits exceeded payroll tax contributions in 1958, 1959, 1961, 1962, 1965, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982 and 1983.

Taking only one aspect of the report is what Republicans have done to spin it their way in order to back up their false claim that SS is 'running out of money'. And that is a lie. It won't run out of money even if nothing is done for 26 years and beyond, and that figure, as I said above, is the worst case scenario.

[Enthusiast]

50. If there is one thing we can count on

it is for Republicans to make false claims and spin to favor their position. They do it every single day in every form of media and the dummies suck it up.

[sabrina 1]

59. Yes, and it works. Because people just hear the spin and

there is no one, eg, in the media correcting it in a way that people can understand.

Otoh, if Democrats were out there with the facts and repeated them as often as the right repeats the lies, it would be much more difficult for them to accomplish their goals.

[Enthusiast]

65. This is why we need strong,

articulate progressive voices in the media.

Of course you remember CNN's Crossfire. For a while I had the impression that CNN intentionally saddled the 'left' with weenie representation so they could not voice a powerful argument.

I don't know if anyone has even done a study but I would bet that human beings are more inclined to believe an argument presented in a strong confident voice than one presented in a less commanding and confident manner. Just human nature.

[sabrina 1]

66. Yes, absolutely. The media always seems to choose

people for the left who appear to be weak.

The few strong voices were quickly eliminated, like Donohue eg.

[Oceansaway]

6. K&R...n/t

[stray cat]

7. We should double our contributions - that pays for those retiring now

and adds to benefits later. In the meantime its good to have forced retirment contributions ie SS

[customerserviceguy]

24. That whole word 'forced' bothers me greatly

No thanks, I'd rather keep up my contributions to the money market funds in my 401K than be 'forced' to pay extra to a government program that is subject to the whims of Congress.

In fact, if they let me out of Social Security today (I'll be 55 in a couple of months) in exchange for keeping my own money for the next twelve years before I retire, never mind the employer share, I'd be hard pressed not to take that deal.

In that time, I'm going to make about $50K a year, and over the dozen years, that's $600,000, not factoring in any inflation. Applying the 6.2% rate (assuming it doesn't go up) to that makes $37,200, before any possible interest earnings.

According to the fantasy statement they prepared for me a month ago, I'd get $1,571.00 a month. When you divide that into the $37,200, that's nearly two years of income on top of whatever I could save. Add in a bit of interest income, and it goes even farther, and let me have my employer share, as well, and I've got quite a few years income from even getting started this late in the game.

Is it any wonder why a lot of younger people think Social Security is not a great deal?

[hedgehog]

33. Your numbers don't make much sense to me. Between now and

retirement, your SS contributions will add up to two years of payment back to you. OK, but what about the next say 10 to 15 years. You didn't factor in any interest on your savings, but you also didn't factor in the possibility of inflation. I realize us old farts are losing our short term memories, but don't you remember what happened to the price of everything about the time you got your first job?

As for your 401K, take a look at your quarterly reports for the last few years. I imagine you've made up your losses to be back to where you were about 2008. Now imagine where you'd be today if you'd been trying to live off that 401K the last 2 years.

[customerserviceguy]

39. LIke I said at the end

if you give me some interest income, and the employer's share of FICA for myself, I can stretch that two years into probably five years worth. Of course, I'll need my own income, as well, from my own savings.

Now, if you factor in inflation, my contributions will increase, as well, and we're talking about even more money that is going to come out of the next dozen years' paychecks. But with a 30 year Treasury note yielding as low as it does, the big money boys are betting on low inflation for the foreseeable future.

I didn't have any 2008 losses, because I keep my 401K money in money market funds. Learned my lesson in 2001 when my then-wife, the stockbroker, put my rollover IRA into mutual funds, which I had to drain after we split up mid-decade. The only thing that makes giving up SS feasible for me is that I still have over a decade to pile something away, and my lady has a nice place for us to live. If she hasn't kicked me out or killed me over these last three years, she's not going to do it now!

[bvar22]

41. What happens if you become disabled next year and can't work?

You can "plan" all you want to, but control of the future is an absolute illusion.
Like all the rest of us, you are just one car wreck or one severe illness away from starving.
We ALL need the Safety Net.
Everybody Pays In.
Everybody covered.

[Enthusiast]

51. Exactly. Thank you for pointing that out. nt

[customerserviceguy]

63. For many

the disability part of Social Security is their only safety net, for me, it is not.

[Enthusiast]

64. Well good for you. nt

[customerserviceguy]

61. I have long term disability insurance through my work

Some people need the safety net, others don't. And as far as covered goes, the scam artists have made it so tough, that people with legitimate claims are routinely denied.

Like I said earlier, if they offered me an out, I'd be hard pressed not to take it. But that's not going to happen.

[EmeraldCityGrl]

58. Just wondering, if you were married to your ex for ten or

more years, doesn't she have a right to a portion of your SS ?

[customerserviceguy]

62. Each of my exes and I

were not married for ten years. In any case, the ones who were actually close to that have been married to new spouses for longer than ten years, or have their own substantial earnings records that would make marriage to me irrelevant.

[dkf]

31. And lower the retirement age to 40!

I'd sure like to retire.

[Yupster]

44. And a pony

I always wanted a pony.

[daleanime]

47. No.

But lowering it down to around 62 does make sense.O8)

[eridani]

36. Wrong. We raised FICA in 1983 to cover current retirees n/t

[Hannah Bell]

49. no, it just gives the banksters more surplus to "borrow" *now*, while increasing

the amount of debt they can label "unpayable" *later*.

[JDPriestly]

8. Private savings (unless you have millions) are not providing any

income. So no matter how much they saved during their working lives, unless they somehow managed to save over a million, most retired people who don't have pensions from their employers or state governments, are depending on Social Security for cash flow income. Unless they save millions, they are getting no income.

[rucky]

9. Or at least remove the cap. n/t

[Yupster]

45. Remove the cap and

bring all workers into social security.

Anyone know why most teachers in California, Texas and many other states are not in social security?

I've never gotten an explanation other than "they have their own system," like doctors or lawyers wouldn't rather have their own systems too, but they can't.

[Faryn Balyncd]

11. K&R .....Thanks.

:hi:



:kick:

[rocktivity]

12. Don't privatize Social Security, eliminate the salarly cap

so EVERYONE can pay a lower rate.

:headbang:
rocktivity

[Peacetrain]

48. BINGO!!!!

Give this rocker a star:yourock:

[DeSwiss]

13. AGREED!!! K&R - n/t

[Swamp Rat]

14. Quadruple it and lower retirement age to 60, and pay for it by taxing 90% over $150,000

and 99.9999% over $1,000,000.

[Flatulo]

17. That would leave $0.15 annually for someone earning over $150K to keep for themselves.

[BlueCheese]

18. I assume that's a marginal rate.

But even so, doing that means you won't get any taxes above $150 K of income from those people, because there won't be any of those people.

[Bluenorthwest]

22. the poster said 'income over 150' but even at 90% of the

entire 150,000, the remainder is 15,000, not 0.15. A tax of 90% of income over 150 would not touch the first 150. See?

[Codeine]

34. Someone failed econ AND math. nt

[Flatulo]

54. no, just reading. I literally cannot see anything within 2 feet of my face without my glasses.

[gophates]

38. And make a much, much, MUCH higher inheritance tax

Quite honestly, if Daddy earned it, why should you keep it?

Let's see you use those bootstraps we keep hearing about.

[ooglymoogly]

56. +1 nt

[Overseas]

15. K&R. I supported Medicare for All because it would be stabilizing too.

Consumers would have more money they could spend in their local economies after the Bush Crash of 08.

[Jim Sagle]

16. K & R

[sabrina 1]

19. Excellent idea.

A perfect stimulus package and by taxing the wealthy it would start changing that chart that shows how money has trickled up to the top 1% and away from the middle class since the eighties.

Who knows, if this happened, and the wealthy had to pay their fair share, maybe they would all leave as their methods of bleeding the American Middle Class dried up?

[ctwayne]

23. Lower the Retirement. Age. Raise the Benefits

Lower the retirement age to 62 and raise the benefits. This will cause many people to retire. Then many new jobs will be created for young people. Reducing the number of people in the labor market and replacing them with younger workers will substantially lower the unemployment rate.

Of course, this has to be paid for. First make a substantial cut in the budget of the military industrial complex. Second raise the top tax rate to 70%. 70% was the top marginal rate under Kennedy and Johnson. During that time, the nation had a considerable economic boom.

[wundermaus]

55. Worthy of repeating!

"Lower the retirement age to 62 and raise the benefits. This will cause many people to retire. Then many new jobs will be created for young people. Reducing the number of people in the labor market and replacing them with younger workers will substantially lower the unemployment rate.

Of course, this has to be paid for. First make a substantial cut in the budget of the military industrial complex. Second raise the top tax rate to 70%. 70% was the top marginal rate under Kennedy and Johnson. During that time, the nation had a considerable economic boom."

In other words, what ever the corporations want, double the opposite! Hell, during the 50's and 60's the marginal tax rate was over 90% . I like an even lower retirement age, make it 60 years of age for retirement. I'm 56 now, and as far as I am concerned, even 55 would be fine with me.

[unkachuck]

25. "Don’t cut Social Security, DOUBLE It"

....okay, but WHO'S going to DOUBLE it?....we have no political entity capable of RAISING it yet alone, DOUBLING it....

....this is America, Capitalist Paradise par excellence!

[Starry Messenger]

26. k & r

[October]

27. Yes! And this is what the Gop types do/did with every controversial issue

Instead of going on the defensive -- they always went on the offensive and doubled-down.

[sabrina 1]

32. Yes, that is another reason to like this approach, aside from the

fact that it has merit.

[StarburstClock]

28. Fantastic point!

I fully support it.

[hedgehog]

29. IIRC, wasn't one of the original purposes of Social Security to put money

into the hands of people who would spend it in order to bring the economy out of the Depression?

[defendandprotect]

35. Exactly--!!! Post-Bush ever $1 anyone had is now worth 50 cents--!!

[Mimosa]

37. I agree. n/t

[Ganja Ninja]

40. Sounds good to me. K & R

[burnsei sensei]

42. I agree.

The problem is that we have a bunch of skinflint power-holders who wouldn't know generosity if it gave them a 20 dollar gold piece.

[Liberal In Texas]

46. Agreed. And lower the retirement age. Create jobs. n/t

[Uncle Joe]

52. Kicked and recommended.

Thanks for the thread, kpete.

[earth mom]

53. Huge K & R!

:kick:

[ooglymoogly]

57. The best stimulus package none of these

troglodytes will ever figure out; Accomplished simply by removing the cap along with Simpson et al's heads.

[WillyT]

60. I'm In...

:kick: