Serious Time

[Lamplighter]

Wanna bet ? See me in 6 years

[xoxoxoBruce]

You're on, How about $1,000.

[Lamplighter]

Back to the Soc Sec deficit... here is a short version of the Committee's recommendations (as part of an NY Times "opinion" piece)

Bolding is mine.
I personally would not trust the Republican Co-Chairman of this Committee,
so I started out as very sceptic over any report he might support,
but seeing this short version of the components makes me think there might be something to it, after all !



Safer Social Security
By PETER ORSZAG
Published: November 14, 2010

Social Security is not the key fiscal problem facing the nation.
Payments to its beneficiaries amount to 5 percent of the economy now;
by 2050, they’re projected to rise to about 6 percent.
Over the same period, federal health care costs will increase six times as much.

The proposal put forward last week has four main elements.

First, it would make the payroll tax more progressive by increasing the maximum earnings level...
<snip>Today, about 15 percent of total wages are not taxed.
The chairmen recommend gradually raising the maximum threshold so that, by 2050,
only 10 percent of total wages wouldn’t be taxed —
decreasing the 75-year Social Security deficit by more than a third.

Second,<snip>indexing the age at which full Social Security benefits can be received to increases in life expectancy.
This age is already increasing to 67, and under the proposal the gradual rise would continue, to 68 by 2050.
<snip>But the chairmen’s approach would by itself narrow the Social Security gap by about a fifth.

The third suggested change is to <snip> by reducing future payments to high earners
while increasing them for people at the bottom.
These adjustments would close at least another third of the projected deficit.

Finally, <snip> have Congress adjust the cost-of-living index t<snip>so that it would measure inflation more accurately.
Making this switch would fill in more than a quarter of the long-term deficit, because the new index would grow more slowly.

If Congress were to take all four of these recommended step,
it could not only eliminate the long-term deficit in Social Security
but also make the system much more progressive.<snip>
Furthermore, the plan would not create private accounts within Social Security —
the most controversial issue that came up when reform was last debated in 2005.

[classicman]

Seems like some good ideas... <shrug>

side note/ At first I read this as the deficit, not just the Soc Sec deficit.
I was wondering where Orzag ended up.

[xoxoxoBruce]

Originally Posted by Lamplighter

Wanna bet ? See me in 6 years

Originally Posted by xoxoxoBruce

You're on, How about $1,000.

So the money doesn't follow the mouth.

[Griff]

Originally Posted by Lamplighter

I personally would not trust the Republican Co-Chairman of this Committee,
so I started out as very sceptic over any report he might support,
but seeing this short version of the components makes me think there might be something to it, after all !

Is there something specific about Simpson or is it the (R) after his name? He's done some good work, I've always seen him as a voice for reasonableness in his party.

[Griff]

Originally Posted by Undertoad

The NY Times put together a quick game. Solve the deficit by 2030. It's pretty easy to do if you cap Medicare growth.

That does seem to be the big one. With that it is a piece of cake.

[Flint]

Almost sounds like we need some kind of healthcare reform or something...

[Griff]

Hmmm... you'd think so but nobody ever mentions it.

[footfootfoot]

Here's a heartwarming film called "Money as Debt" it's about the ponzi scheme that is banking.

[Lamplighter]

Originally Posted by Griff

Is there something specific about Simpson or is it the (R) after his name? He's done some good work,
I've always seen him as a voice for reasonableness in his party.

I do remember Simpson from his time in the Senate (the 80's),
as being derogatory towards working/poor people.
But here he is as Co-Chair of this current Deficit Commission
and this article from Sept 5th is even in support of Simpson !

In 1992, Sen. Alan Simpson, a Wyoming Republican, complained in a speech
to the National Conference of State Legislatures about how Social Security,
veterans benefits and other programs had made America "like a milk cow with 250 million tits."
As best I can tell, the remark drew no attention or complaint.

Simpson reprised the line two weeks ago, updating it only for the population count.
In an e-mail to the head of a Social Security advocacy group, he said that, in America,
"We've reached a point now where it's like a milk cow with 310 million tits!"
This time, it was an udder debacle.

Above, I tried to say that this Draft Report's recommendations on Soc Sec seemed appropriate
and were surprising to me, despite Simpson's history.

This is not Medicare and it certainly is not deficit reduction.
We will have to wait to see what develops in those areas.

[Happy Monkey]

Originally Posted by ZenGum

Then in the future (which is now here), when soc sec runs into the red, they call up the feds and say, pay some back please. The feds can only shrug, say "we've spent it" and either raise taxes on everyone else, or cut or delay soc sec payments.
...
Is this how it looks to you guys?

Social security is just another purchaser of Treasury bonds. They will get paid back. They are projected to run out of bonds in 27 years, and even then they're projected to be able to cover 80% of their obligations out of year-by-year income. Social Security is fine, for the forseeable future (which is less than 27 years). It would be OK to do some of Orszag's tweaks, to fill in that last 20%, but that will not help the deficit appreciably. And I see no need to do much with Social Security until the bonds run out, as they were only intended to be a temporary stopgap for the Boomers. Once they run out, it should go back to paying year by year, using tweaks like those described.