Heads-Up !!! - 'Orszag Coming for Your Social Security' - FDL

[WillyT]

Orszag Coming for Your Social Security
By: David Dayen - FDL
Thursday November 4, 2010 9:01 am

<snip>

The deficit commission comes out with their recommendations on December 1; I would expect President Obama to embrace them. Stuck deep inside Evan Bayh’s encomium to tepid oatmeal was a tell on this issue.

The most important area for spending restraint is entitlement reform. Democrats should offer changes to the system that would save hundreds of billions of dollars while preserving the safety net for our neediest. For instance, we could introduce “progressive indexation,” which would provide lower cost-of-living increases for more affluent Social Security recipients, or devise a more accurate measure of inflation’s effects on all recipients’ income.

Progressive price indexing, as I’ve pointed out repeatedly, would have to cut benefits for the middle class to have any impact at all.

Unsurprisingly, Peter Orszag crawls out of the woodwork with his own opinions on Social Security, somehow claiming that the elections gave a mandate to cut it:

Social Security is not the nation’s key long-term fiscal problem — health care is. (A column in Thursday’s Times will discuss health care.) But Social Security does face a long-term deficit, and a variety of reasonable reform plans (including one I wrote with Peter Diamond, a winner of this year’s Nobel Prize in Economics) have been proposed to address that deficit.

The left, though, seems adamantly opposed to restoring actuarial balance to Social Security now. I have trouble understanding this reluctance for several reasons: the key issue progressives had been concerned about — individual accounts within Social Security — has been definitively won in their favor (for now); they have a president from their party in office, which will not always be the case; acting now would allow changes to take effect more gradually, cushioning the blow; and establishing some credibility on out-year fiscal problems by enacting Social Security reform could open up (admittedly limited) running room to pass necessary additional stimulus legislation in the short run.

OK, I’ll answer your question with your own answer: because Social Security is not the nation’s key long-term fiscal problem. It’s not even a little bit of the long-term problem. It faces a gap that can be filled by the trust fund for the next 27 years, putting it on stronger fiscal footing that most other programs in the government. The cost curve is already bent in Social Security: the gap is due to short-term demographics of the baby boomers, but it smooths out after that. It’s OK to have a discussion about Social Security, but the argument falls almost entirely on the side of slashing benefits, when someone making $100,000 a year and Bill Gates pay the same in payroll taxes. Furthermore, nothing will fix the problems in Social Security more than long-term economic growth that beats the unclear forecasts 30 and 40 years out, and incorporating all legal immigrants into the system so they actually pay payroll taxes. And the idea that Social Security benefit cuts would somehow “open up running room” on stimulus legislation, which Orszag doesn’t even seem to believe himself, is just silly.

Meanwhile...

<snip>

More: http://news.firedoglake.com/2010/11/04/orszag-coming-for-your-social-security/

:wtf:

[MineralMan]

1. December 1, eh? I think I'll wait and see...

Unrecced for jumping the gun on this and deciding what the report will be and what the reaction will be.

[WillyT]

3. Well... That Definitely Sounds Pragmatic, But, A Question For You...

When you are standing on the train tracks, do you get off the tracks BEFORE the train arrives, or do you wait until it gets there?

:evilgrin:

I'm just reading the tea leaves, seeing which way the wind is blowing, leading my horse to...

:hi:

[MineralMan]

4. I do not stand on the train tracks. Why would I do that?

Seems like a waste of time to me. Instead, I'm doing something productive. I'm not guessing what will happen.

[Paper Roses]

2. Cut S.S. and this old lady is out in the streets. In protest.

From there, I don't know where I would go. All of the generation now called 'Seniors' will be out in force. Most of us have nothing else. This cut happens, the economy is totally down the drain. Next step? Our houses on the market. They sell for zilch. No income at all?

Welfare.

This government is totally without conscience.