Don’t worry. Be happy! Our government is at work. Frank and Dodd have figured out the solution. Since Medicare implodes about the same time, the elderly will receive no care and no meds. And most of them will die — thus saving social security.

PS: HORRENDOUS POLICY DECISION: Frank-’n'-Dodd.

Obama may not sunset the post-2001 Bush tax cuts by 2010, but eventually they’ll have to go and the top rate will rise back up to, wait for it, the level it was during the Clinton administration. Which wasn’t such a tough time for the top 1% as I recall.

Yeah, they did enjoy a different bubble – for a while.

There was a time we lived without SS and that time will come again. meantime, I can’t understand why Americans aren’t allowed to tap their own “forced savings” to save their individual and collective hides.

Money already contributed to SS should be used to pay down/off mortgages, refinance mortgages and as downpayments. Future SS and 401K contributions and matches should be available to apply to the mortgage.

That way, the financial sector gets the infusion of capital it needs and the performing loans will see accelerated payoffs whose cash flow will dilute the underperforming loans, allowing for some cram down of bad debt.

Mortgages would go from 30 years to 10 or less. The homeowners will save hundreds of thousands of dollars in interest over the life of the loan. That would be a huge boost to the overall economy at the expense of the financial sector, which would have to contract. and existing 401k’s would not be touched.

This all assumes loans no more than 3.5 times income, or else it will inflate another bubble.

With alot of people, especially young people at the age of buying their first home, believeing SS won’t be there for them, this will seem like free money. Of course, to keep SS going, contributions would have to resume after the home is paid for, and perhaps at an accelerated rate. That may mean adding half the interest savings to the 7.5%+7.5%, but the average home buyer wouild still come out way ahead.

As long as the gov’t is going into debt to get capital to the financial market, it might as well do it through our hands by separating part of the SS “trust fund” from the rest of the ballance sheet. It’s a purely free-market solution as far as I can tell.

Otherwise, no matter what the Libertarians may fantasize, we’ll be stuck rescuing stupid people who gamble their money for retirement.

thuja on December 2, 2008 at 2:03 PM

That’s the rub. When are we going to make people take responsibility for their own lives? I would love to get paid for not working.

The Laffer curve, as I said before, is bogus economics that didn’t pan out back when President Reagan took John Stockman’s advice. There are plenty of other factors that also affect revenues other than marginal tax rates, and the claim that you can somehow fine tune it within a few percent is just plain silly. I’m all for having a fair and open debate on spending and revenue, but such having-your-cake-and-eating-it-too-ism has no place in it.

That structural deficit wasn’t caused by spending increases, but by tax cuts enacted without corresponding spending cuts in 2001. Now you could go on to say that we can make spending cuts, which is fine, but it’s crystal clear that the federal deficit was increased thanks to Bush’s tax cuts. Which is why they should sunset after 2010 so we can then fairly address both the spending and revenue side of the deficit problem.

starfleet_dude on December 2, 2008 at 1:56 PM

No such thing is “crystal clear”. There are two factors that determine deficit or surplus: revenues and expenditures. The revenues have gone up. So that’s not the problem. In fact, if you return to the previous tax RATES you will likely return to the previous (lower) tax REVENUES.

The problem is all in expenditures. The unpleasant truth is that a lot of our spending is going to have to get cut. Will someone get hurt? Yep. The alternative is to postpone it and see a lot more people get hurt a lot worse.

Gotta go to work to make some more money for Uncle Sugar (I’m not John Galt…yet). I’ll give you the last word.

We should probably consider these current times the golden years of US prosperity.

If you are rich you are excluded from the above scenario.

The Social Security Trust Fund is a promise that will be kept, like it or not.

starfleet_dude on December 2, 2008 at 1:20 PM

Like it or not?!? At what point did I ever suggest I didn’t want it to be kept? On the contrary, I’m trying to be sure that we DO keep that promise!! My concern is that we need to change course so that we don’t reach a point where we are no longer ABLE to keep that promise.

We haven’t reached that point yet; but if you seriously doubt that we are headed for a point where the workers can no longer sustain the retirees, then we have no basis for further discussion. And you, though it saddens me (really) to say it, are delusional.
_______________________________

By the way — in reference to your earlier comment about the “unwise Bush tax cuts”: I was so taken aback at the bizarreness of your comment that I didn’t respond as well as I should have. I’ll place a healthy share of the blame for deficits on Bush, alright; but the problem wasn’t the tax cuts. Revenues weren’t the problem — they went up, as they always seem to do when taxes are cut (funny, that). It’s just that expenditures went up even faster. Bush’s sin wasn’t cutting taxes; it was losing his veto pen for over four years.

If the government would let me out of the SS system now, I would let them keep the money I have been paying them for the last 30 years.

txsurveyor on December 2, 2008 at 9:59 AM

Become self employed & then don’t pay into an account.
My spouse is self employed in agriculture & has never payed into SS. He does moonlight at odd jobs & then he does.
He & I aren’t kidding ourselves when it comes to SS. At 39 I know I will see retirement age balloon to the 70s. I probably won’t live long enough to get my share.
So I am not going to depend upon it at all.

Are you honestly claiming that political promises are a safer bet then the stock market?

MarkTheGreat on December 2, 2008 at 12:34 PM

I’m arguing that some program like this one should not be left to the luck of the market.

Not metaphorical “blood in the streets” (i.e. angry voters), literal blood in the streets. People won’t stand for this.

The real problem is how the Social Security Trust Fund has been abused to help paper over a huge increase in the federal deficit that was created by Bush’s unwise tax cuts in 2001.

starfleet_dude on December 2, 2008 at 12:59 PM

Oh my word! What flavor IS that Koolade??

The Social Security “Trust Fund” was already a box of IOUs long before Bush. If you remember 1982, you MUST remember Perot talking about that in 1992, and Gore running on a promise to put the SSTF in a “lock box” in 2000. All that was before 43 ever came to power. He was the first person since Reagan & O’Neill to even try to address the time bomb, and got tarred and feathered for even proposing discussions. To borrow from Clinton, “He tried. Others didn’t try; he tried”.

I’ve got my own problems with ‘W’, and am no stalwart apologist for him; but to blame this mess on him is just bizarre.

It’s quite possible that the laffer point could change over time.

MarkTheGreat on December 2, 2008 at 12:47 PM

Agreed!! General attitudes toward government, cost of living after taxes — all sorts of things could change the tax rate at which we’d get maximum revenues. That’s why we shouldn’t just find “the spot” and leave it there; allowing continued fluctuation would allow us to “follow” the point with policy.

I did realize after I posted earlier that my idea of 1% moves opposite the revenue trend every year won’t work. A better plan would be to move 1% per year in the same direction until revenues decrease, then change direction. That would mean a slightly wider oscillation (2% instead of 1%) but would prevent us from oscillating when we’re far from the maximum.

The real problem is how the Social Security Trust Fund has been abused to help paper over a huge increase in the federal deficit that was created by Bush’s unwise tax cuts in 2001. They do need to sunset eventually as the Social Security surplus is declining and the Trust Fund will eventually be drawn upon by 2020.

batter, I was younger back in 1982 too and heard much the same talk about Social Security not being there for me. 26 years later I still hear it, but it’s still around nevertheless. So don’t put too much stock in such talk.

starfleet_dude on December 2, 2008 at 11:56 AM

The problem is that in 1982, nobody was predicting that SS would fail in 26 years. Back then they were talking 40 to 50 years. So the fact that it hasn’t failed yet, does not prove that people in 1982, did not know what they were talking about. Just that you don’t.

This is a good deal for you and a good deal for your son, but a very raw deal for your dad, who paid for your granddad’s retirement all his life, but now does not get his promised social security check.

factoid on December 2, 2008 at 11:55 AM

It’s illegal to make a contract which binds parties not involved in the contract. Unless you are a politician.