CBO: Social Security to begin running permanent deficits this year, not 2016
posted at 6:45 pm on January 26, 2011 by Allahpundit
The Congressional Budget Office said Wednesday that Social Security will pay out $45 billion more in benefits this year than it will collect in payroll taxes, further straining the nation’s finances. The deficits will continue until the Social Security trust funds are eventually drained, in about 2037.
Previously, CBO said Social Security would start running permanent deficits in 2016. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.
Remember the payroll tax cut for employees that was part of last month’s tax cuts deal? Democrats warned at the time that that would play into the GOP’s hands on entitlement reform by establishing a new lower baseline rate that’s insufficient to fund the program. (The current rate is temporary, but as we’ve learned, temporary tax rates are hard to raise.) The result: An accelerated, expanded shortfall in Social Security that will inevitably intensify cries that the program is unsustainable and needs to be reformed. Which, of course, it does: As noted above, assuming The One wins a second term, Social Security would have begun running deficits before the end of his presidency anyway. As it is, two graphs for you from today’s new CBO report. First, the Baby Boomer effect on expenses over the next 10 years:
And second, the offsetting receipts, with the Medicare line self-explanatory:
This isn’t the only horrible news in the report by a longshot, either. CBO’s projected deficit for this year is a cool $1.5 trillion or 9.8 percent of GDP, which is just two-tenths of one percent less than last year’s all-time budget-buster. And there’s not much revenue relief coming from new jobs: CBO expects that unemployment will remain above eight percent through 2012 and won’t get back to a historic norm of 5-6 percent or so until 2016. This ship has already started to sink, in other words, and yet Captain Hope chose to use his annual megaphone last night to talk about stuff like high-speed rail. As Megan McArdle says, terrifying.
Blowback
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you don’t say……
upinak on January 26, 2011 at 6:53 PM
Ya? So? When the checks bounce I’m moving in with somebody.
Skandia Recluse on January 26, 2011 at 6:53 PM
Billy Jeff and Dick Morris are to blame for this, since they singlehandedly demagogued Newt and Dole on this in 1995.
rightwingyahooo on January 26, 2011 at 6:54 PM
I continue to see polls that indicate people don’t want to do anything to change Social Security and I find that so hard to believe. I can understand people who are currently on it but people like me that are less than ten years away can wait a year or two and take a small cut? I can’t believe I am in a minority.
Cindy Munford on January 26, 2011 at 6:54 PM
Let me repeat: the only political solution is to keep things the SAME for everyone alive right now.
For those born after 2012, give them a choice as adults: either pay FICA taxes your whole life and get SS, or pay FICA taxes for 10-12 years and get no SS but you are FICA-tax free in your 40s and 50s.
Use these “10 year FICA” taxes to pay for:
1-current SS liabilities and
2-the fraction of the poor that will choose SS (shell of it’s former self)
As long as the young adult taxes are greater than the poor persons SS cost, that would absolutely balance the SS fund…..
Oh wait. It’s so simple it would never be tried. Bush tried a variant of that in 05 and the Dems won congress via scare tactics!
picklesgap on January 26, 2011 at 6:55 PM
why does this surprise anyone, you have the beginning of the baby boomers starting to collect social security,they went from contributing to collecting. the feds already spent the 14+% of their income they were forced to contribute, and now they are going to say sorry charlie the bank is broke.
RonK on January 26, 2011 at 6:55 PM
From the Megan McArdle article linked above …
Wait until we get downgraded in the bond market one level from AAA to AAB or ABB (or whatever it is).
That’s when the fun will really start.
BowHuntingTexas on January 26, 2011 at 6:56 PM
..thanks, Pantload (Obama, not AP), just in time for me to retire in April!
What a piece of crap.
The War Planner on January 26, 2011 at 6:56 PM
JT Marlin upgrades Universal Hobo Supply to STRONG BUY.
Cicero43 on January 26, 2011 at 6:57 PM
…or just be like Obama and double down on stupid! Let’s build some choo choos!!!!!!
search4truth on January 26, 2011 at 6:58 PM
If people are depending on Social Security for retirement, they are going to be sorely mistaken.
The pending Social Security Collapse will be like New Orleans after Katrina flooded it.
Help us! Help us!
Stop depending on the Government!!!!! They will always let you down!
portlandon on January 26, 2011 at 6:59 PM
Remember when GW wanted to tackle this train wreck and the Liberals (including the MSM mouthpiece) said it was solvent until something like 2025 minimum… Me thinks some tasty soundbites might be in order.
Keemo on January 26, 2011 at 7:02 PM
So, what does Ryan have to say about this?
Yeah, I went there.
upinak on January 26, 2011 at 7:03 PM
The system is starting to correct itself. Meanwhile, Captain Sputnik calls for enhanced internet access and solar panel creation as a way to save us. The GOP isn’t about to do anything substantive either, we’re effed.
Bishop on January 26, 2011 at 7:04 PM
I think that I’ll stop paying taxes and that should offset what the farging bastages have confiscated from me over the years. The whole thing is going titsup soon enough anyway.
darwin-t on January 26, 2011 at 7:04 PM
This should not be a surprise, these politicians and their bungling agencies are like geese . . . they wake up in a new world every morning.
rplat on January 26, 2011 at 7:06 PM
I’m not exactly Mr. Christian but I really need to say Go**am all of them, all pols from both parties who have put us here and refuse to take the reins to stop this trainwreck.
Bishop on January 26, 2011 at 7:06 PM
I guess that if I stop paying taxes to the farging bastages it might offset some of the monies that they’ve confiscated from me over the years. The whole thing is going titsup soon enough anyway.
darwin-t on January 26, 2011 at 7:08 PM
True, no one is willing to do what it takes. Dems aren’t willing to cut social security, and Republicans won’t accept higher taxes. It’s clear that both are required to balance the budget. Many in the Tea Party continue to believe that lower taxes are the answer. It doesn’t look good.
bayam on January 26, 2011 at 7:08 PM
I don’t believe for a second you care.
CWforFreedom on January 26, 2011 at 7:10 PM
I am about 10 years away myself and understand and expect that the benefits will be reduced from what I have come to expect. My problem is that every year when I look at the annual social security statement and see how much I have paid in as a self employed person my blood starts to boil. In addition, by leading a modest life style I’ve been able to accumulate some savings that will problably mean my benefits will be further reduced as I believe that future benefits will also become means tested by necessity.
Ann on January 26, 2011 at 7:10 PM
Nah, Harry Reid said SS is fine.
ctmom on January 26, 2011 at 7:11 PM
test
darwin-t on January 26, 2011 at 7:12 PM
Salem is eating comments that don’t have any threatening words in them.
darwin-t on January 26, 2011 at 7:13 PM
We don’t have to have higher taxes, as long as we get rid of the benefits for middle class and rich folks. Just make “keeping your money” possible only after you pay in 10-12 years that you don’t get.
Start it for people born after 2012. Keep SS for the dirt poor, and eventually the budget is balanced. Might take 50 years. Oh well.
picklesgap on January 26, 2011 at 7:14 PM
Reporter: “Mr. Albert Einstein ! What’s the most powerful force in the Universe”.
Mr. Albert Einstein: “Compounding interest”.
Currently, as in right now, our national debt is roughly $14,000,000,000,000. That’s 14 trillion – in case I leave out a few zeros.
Simple interest assuming 1% on $14,000,000,000,000 is 140,000,000,000.
Next year, unless we have some major reductions, our national debt will be $14,000,000,000,000 + 140,000,000,000 all multiplied by 1%,
2 years from now it’ll be whatever the above number is all multiplied by 1%.
That’s a very rough example of compounding interest.
And the above is using the nice compfy 1%. The current interest rates on 10 year bonds is 3.4%.
We can’t wait until people born today are of working age.
BowHuntingTexas on January 26, 2011 at 7:14 PM
Actually, we are demanding the end of all federal programs that have no purpose in the year 2011. We want funding for the UN to stop immediately. We are demanding that government (especially at the federal level) shrink is size by having every federal agency investigated and reviewed for it’s purpose and worthiness. Just these actions alone will solve most of our problems. Our Federal government is at least twice the size it should be, and has morphed into monster that wants to regulate everything we do including the air we breath. Surely you see this.
Keemo on January 26, 2011 at 7:16 PM
wait a second, Krugman said this all right wing Faux news hysteria.
rob verdi on January 26, 2011 at 7:17 PM
Agreed.
It’s important that the government balances the budget in a way that includes interest payments on the debt.
If we could go back to 2000, I would’ve gladly continued to pay higher taxes to save this country from it’s current fiscal situation. And think about it- most of those tax cuts went into housing or stock market investments that were completely lost anyway by the asset bubble collapse. Almost everyone has ended up a loser, esp. the next generation.
bayam on January 26, 2011 at 7:19 PM
I guess you have never heard of The Laffer Curve.
Increasing tax RATES is not equivalent to a proportionate increase in tax REVENUES. In fact its inversely proportional. Reagan lowed tax RATES and thereby increased REVENUES.
Geochelone on January 26, 2011 at 7:21 PM
Demographics is destiny.
SSA is destined for the scrap heap.
ajacksonian on January 26, 2011 at 7:21 PM
Bayam you loser. You can donate 100% of your income to save your beloved government.
Leave the rest of us alone.
Inanemergencydial on January 26, 2011 at 7:22 PM
It is pretty dark up there where his head is.
Aviator on January 26, 2011 at 7:23 PM
I don’t disagree and think you’re generally correct. The federal budget has doubled over the last 10 years. You have to look at where the government has increased during that time. Spending cuts should align with those increases. If proposed cuts follow the ideological leanings of either party, they will never reach the consensus required to pass as legislation.
2011 United States federal budget – $3.8 trillion (submitted 2010 by President Obama)
2010 United States federal budget – $3.6 trillion (submitted 2009 by President Obama)
2009 United States federal budget – $3.1 trillion (submitted 2008 by President Bush)
2008 United States federal budget – $2.9 trillion (submitted 2007 by President Bush)
2007 United States federal budget – $2.8 trillion (submitted 2006 by President Bush)
2006 United States federal budget – $2.7 trillion (submitted 2005 by President Bush)
2005 United States federal budget – $2.4 trillion (submitted 2004 by President Bush)
2004 United States federal budget – $2.3 trillion (submitted 2003 by President Bush)
2003 United States federal budget – $2.2 trillion (submitted 2002 by President Bush)
2002 United States federal budget – $2.0 trillion (submitted 2001 by President Bush)
2001 United States federal budget – $1.9 trillion (submitted 2000 by President Clinton)
bayam on January 26, 2011 at 7:24 PM
He can’t, his prostate is blocking his vision.
darwin-t on January 26, 2011 at 7:24 PM
Interest on the Federal debt isn’t compound interest. It’s simple interest. The US Treasury sells a ‘bond’, (note, thingy, whatever) to ‘the market’ at a discount; i.e. $1,000,000 face value piece of paper, payable in full at some future date. Investor steps up and bids against other investors. Winning bids get the piece of paper. The difference between what the investor pays to get the instrument and the face value of the piece of paper is the ‘yield’ if held to maturity.
In the secondary market, as financial perceptions change, the investor may be able to sell the paper before it matures for more than he paid for it, or if his personal circumstances change (desperately needs cash money) may have to sell it for less than he paid for it.
The ‘interest’ paid on the US Debt is fixed by the market at the time the paper is first sold.
Skandia Recluse on January 26, 2011 at 7:26 PM
I blame
BushFDRMeatHeadinCA on January 26, 2011 at 7:26 PM
Speechless.
madmonkphotog on January 26, 2011 at 7:28 PM
Exactly what I’m talking about.
No one solves problems by following simple ideological dicta. In reality, a strong consensus has emerged among this country’s leading capitalists and preemininent economists that some higher taxes are needed. The budget hole is simply too large to address with cuts alone.
http://www.avc.com/a_vc/2011/01/deficit-reduction.html
bayam on January 26, 2011 at 7:31 PM
Captain KickassCaptain Hope
Conductor Barry?
peski on January 26, 2011 at 7:32 PM
I wonder what the one wants to do about it? LOL
tarpon on January 26, 2011 at 7:33 PM
Only if you make the assumption that higher tax RATES will lead to higher tax REVENUES. Wrong. Lower rates and less government (spending and regulation) will lead to more economic activity and higher revenues.
peski on January 26, 2011 at 7:36 PM
Social Security, in its current form, is unsustainable. It will change because it has to. The only question is how.
Start by cutting tax deductions. Eliminate the social engineering. Broaden the base, then lower the rates, if possible.
Everything should be on the table. The fraud that is Social Security is not exempt. We’ve known since the mid 1950s that FICA payments were taxes, not some premium paid on a federal insurance policy. Since then, we’ve tolerated politicians who have spent the surplus in the general fund. Now, its coming to an end.
Same thing with Medicare. Its not sustainable, therefore it will change.
My bet is that we’re all going to see a declining standard of living even as we make real cuts to our socialist welfare state. We’ll start to see more children staying at home with their parents, to save on rent and because they won’t be able to afford to take care of them and purchase their own house. A rebirth of the extended family.
Revenant on January 26, 2011 at 7:40 PM
The world you live in must be magical, you reprobate ignoramus.
Inanemergencydial on January 26, 2011 at 7:41 PM
Take a deep breath and hold your nose….
PaCadle on January 26, 2011 at 7:44 PM
I read on the Obamacare thread that the CBO’s estimates were crap anyways.
rjl1999 on January 26, 2011 at 7:45 PM
Time to revisit drilling for our own oil and energy…
… and tie it to Social Security payments.
Let’s see the environmental wackos take on that battle…
Seven Percent Solution on January 26, 2011 at 7:45 PM
I don’t mind spending your great-grandkids $ but it seems you all do. Have a heart, will ya?!
Limerick on January 26, 2011 at 7:47 PM
Kick the obesities and alcoholics/addicts off ssi disability and make em scrounge or get skinny!
dhunter on January 26, 2011 at 7:51 PM
What a shocker! /sarc
Let’s vote in more libprogarxists so that we’re sure we’ll never run out of money. /more sarc
Seriously though. Is any “normal” person surprised by this?
ClanDerson on January 26, 2011 at 7:56 PM
I think that everyone is willing to bear some pain, as long as they are not the only one. I don’t want to see Social Security benefits cut one cent as long as we are paying for NPR, ACORN, Soros’s Open Society, and bailouts for greedy unions.
Social Security benefits are peanuts compared to the pensions being paid out to retired UAW workers, and had GM and Chrysler entered standard bankruptcy proceedings, all those pensions would have been kicked to PBGC and their modest maximums.
If we cut across the board and don’t worship any sacred cows, I’m all for it.
slickwillie2001 on January 26, 2011 at 7:58 PM
Take away the lifetime pensions of all the corruptocrats that participated in this theft of working Americans money and freeze their salaries at 2005 levels. Allow only 6 aides per congress-ass and term limit the bastrids with no pension! Make quit sucking off the teat of the taxpayers and earn their own way!
dhunter on January 26, 2011 at 8:01 PM
You know they will bring in changes, so that people who had contributed the most into SS throughout their working lives, and have saved up something on the side as an insurance, will be screwed out of part or all their benefits.
bayview on January 26, 2011 at 8:02 PM
Re gas and oil, how much more money would be flowing into federal government revenues if oil and gas drilling were allowed in all US land and waters? How would the US balance of trade be affected for the better? How would it affect the price of oil and thereby boost our economy? Doesn’t anyone crank on those numbers?
Ultimately, we are proposing to cut Social Security to seniors so that Hollywood elites don’t have to look at derricks off the decks of their Pacific mansions. That is unacceptable.
slickwillie2001 on January 26, 2011 at 8:02 PM
In Oregon our pension funds are requiring increased contributions to the point where our school districts are once again millions in the red. They were in the same red place 6 months ago.
I’ve got it. If you get a governement pension, no ss.
How much would that save?
ORconservative on January 26, 2011 at 8:05 PM
If last night’s SOTU and the Repub response wasn’t confirmation enough that the Politicians will not fix this mess, nothing will.
We are hopelessly boned, as Monty would say over at Ace.
I just put in an order for some more precious metals. get some, just a little, a few Silver 1 ounce coins, if nothing else, for the days when nobody wants your greenback any more.
Read some of the financial advice out there. Take Action. We really have little time left.
(I did get some encouragement from Rand Paul and Michelle Bachmann, but the Tea Party has a couple more elections before we get majority, veto proof votes. I don’t think we have that long.)
Jimmy Doolittle on January 26, 2011 at 8:06 PM
..and yet they keep electing dems
darwin-t on January 26, 2011 at 8:08 PM
The voters are the whores.
The land of moochers is having a reality check.
Schadenfreude on January 26, 2011 at 8:13 PM
darwin-t on January 26, 2011 at 8:08 PM
Absolutely. There was an article last week on the David Wu insanity and the readers’ comments were basically…..so what, we would never vote for a Republican no matter who was running as the Democrat.
No wonder there is a show called Portlandia.
ORconservative on January 26, 2011 at 8:13 PM
Yes. I stand corrected. And I’ll admit, I’m getting into a gray area. My main point is that as interest rates go up those treasury bonds will need to be discounted further and further. Our bond rating may very well go down in the near future and bonds will be discounted much, much more. More discounting, as I understand it, means less money borrowed up front and more paid on the back end.
BowHuntingTexas on January 26, 2011 at 8:35 PM
Who is that wrestling match announcer? He could do a voice-over for a GOP commercial with Obama’s face contorting and screaming… “America! Are you Ready To Cruuuuummmble?”
/I guess we can.
Key West Reader on January 26, 2011 at 8:35 PM
Leave Medicare alone.
Audit the welfare rolls. Begin by mandating drug tests for all welfare recipients over the age of 18. You pop positive? Boom goes yo benefissts.
Key West Reader on January 26, 2011 at 8:37 PM
Is that what the data shows? Is this what occurred under Clinton? I’m not saying that raising taxes is a good thing, I’m simply pointing to past data.
We know that lowering taxes when accompanied by deficit spending does increase economic activity and overall tax revenues, but that form of debt-fueled growth has never been sustainable. It contributed to today’s $1 trillion structural deficit.
Don’t give up so easily. You were correct in the abstract, in that bonds sold to cover the interest on existing bonds has the same effect as compounding interest.
bayam on January 26, 2011 at 8:44 PM
Tax rates went down, revenues went up, and the size of the federal debt tripled under Reagan. That’s called debt-fueled growth, an option no longer on the table, right? No other major economy in the world, esp. not China or Germany, is predicated on the belief that lower tax rates increase tax revenues.
Even Reagan’s former budget director, David Stockman, says that tax rates must go higher.
bayam on January 26, 2011 at 8:52 PM
The “Trust Fund”? Ya mean the one where there’s only government bonds that need to be redeemed and no cash? THAT “Trust Fund”?
Amendment X on January 26, 2011 at 8:56 PM
There are bonds sold with (and without) coupons that get clipped every six months or so. So there are multiple types of instruments. Whether or not those coupons continue to accrue interest if not redeemed, which would be a compounding of interest, is set in the terms when the bond is created (I think) I am not a certified financial planner, or a licensed broker/dealer.
The only ‘compounding’ of interest happens when the Treasury rolls over old debt by issuing even more debt to pay off the old debt plus interest.
Skandia Recluse on January 26, 2011 at 8:57 PM
You make a great point but I am just not sure D.C. has the nerve to do what it takes.
Cindy Munford on January 26, 2011 at 8:58 PM
Would you mind comparing congressional spending before, and after Reagan’s presidency?
Skandia Recluse on January 26, 2011 at 8:58 PM
Heh. Yeah. What you said.
BowHuntingTexas on January 26, 2011 at 9:01 PM
I sincerely think people my age… 49… are pretty much planning on working until 70 anyway. I can’t even imagine retiring in 13 years! I have an 11 year old at home! How in the world will she get through college and pay for a wedding if we aren’t working? When she is safely started then we can look at long vacations… or what ever you do when you retire.
My parents retired, then they started a business. Partly for money and partly because they were bored with retirement.
My dad started a new business at 70. He had another good 15 years in him before he slowed down much, he only worked as much as he wanted, took exercise classes (he didn’t tell them how old he really was), traveled a little. He didn’t really slow down for a couple of months before he died at 91.
I don’t think most Americans really think the way Europeans do. Raising the retirement age just makes sense.
petunia on January 26, 2011 at 9:07 PM
Perhaps this will help.
70′s spending 195/504 revenue 192/463
80′s 590/1143 517/991
Or the whole 2.55 MB pdf…from 2009
Skandia Recluse on January 26, 2011 at 9:12 PM
A couple points of order:
- The permanent combined (OASDI) primary/cash deficits began in 2010 (specifically in the February 2009-January 2010 period).
- While the combined funds will indeed not get much closer than a $30 billion cash deficit, the OASI (“traditional” SocSecurity) fund should see temporary and insignificant cash surpluses between 2012 and 2015. This is important because, despite all the assumptions of combining that with the fully-dysfunctional DI (disability) portion of SocSecurity, that hasn’t happened yet.
Speaking of the DI fund, its balance is now projected to hit $0.00 sometime in 2017, a calendar year ahead of where the Trustees anticipated it a few short months ago.
steveegg on January 26, 2011 at 9:41 PM
The ObamiNation, as the leader of the Baby Boomers, isn’t exactly acting as though they’re willing to take any pain. Their actions, from ignoring SocSecurity to this point to PlaceboCare, are indicative of a desire to get theirs by screwing over their kids.
steveegg on January 26, 2011 at 9:47 PM
You are not alone on this Cindy. I am in the same boat and I am better off than most folks are, so I can off set this debacle by planning on not having this in my retirement.
hawkman on January 26, 2011 at 9:56 PM
Duh! Jobs, jobs, jobs! Didn’t you learn anything in history (or even watch any Westerns)? Remember those thousands who built the railroads with pick, shovel and strong backs? Same thing. Tons of jobs in high speed rail.
deadman on January 26, 2011 at 11:22 PM
…and they were all Chinese laborers. At one time they worked for us, and now…
slickwillie2001 on January 26, 2011 at 11:32 PM
The only problem is that isn’t exactly going to work. As of January 1, 2010, the “closed-group” (i.e., everybody who was 15 years old or older and thus theoretically able to work) actuarial deficit was, in “present-value” dollars, $20.0 trillion (and that assumes nobody lives past 115). That means that, if we had $20.0 trillion on 1/1/2010, we would have to invest it in something that had a “real” (i.e. post-inflation) annual rate of return of 2.7% to cover the difference between the taxes collected on said “closed group” and the benefits paid to same.
In theory, the $2.5 trillion in the “trust funds” is part of that $20.0 trillion. However, there is a “slight” problem with that – there is no money to make good on that “principal”.
Even if either the $2.5 trillion in the “trust funds” or the $20 trillion of “present value” existed now, there is a further problem – the payment of interest. That, by definition, is borne by future generations of taxpayers. Since the raw numbers for the “closed group” are not available, while those for the commonly-accepted “open-group” 75-year numbers (which takes into account those who aren’t yet 15 and all the taxes and benefits paid out over the next 75 years) are, allow me to illustrate with those numbers:
Using a similar “present-value” (75 years instead of an “infinite horizon”, which is roughly 60% of said “infinite horizon”) measure, the actuarial deficit in Social Security, sans the effects of the “trust funds”, is projected to be just under $8 trillion. However, in current dollars (i.e. dollars unadjusted for inflation), it is just over $118 trillion and in constant dollars (i.e. dollars adjusted for inflation), it is just under $28 trillion. Hence, even if we had the $8 trillion to “invest” now, we, our children, and our grandchildren will still need to come up with an inflation-adjusted $20 trillion over the next 75 years to cover that liability. That represens an inflation-adjusted average SocSecurity tax increase of 17%.
steveegg on January 26, 2011 at 11:54 PM
the people that have said don’t depend on the government, all well and good, except one small problem, if you are frugal and scrimp and save do with out, invest in 401k’s, don’t worry the government is here to help you spend that money, they have already raised the flag a few times about taking the 401k money, how long do you think any of the other money you saved will escape their clutches.
RonK on January 27, 2011 at 12:17 AM
So buyers of US debt now know they are directly financing Baby Boomers retirements. Somehow I think with inflation increasing globally this will become less politically palatable. China is setting us up, and we are fixing the deck for them…
Theworldisnotenough on January 27, 2011 at 12:56 AM
Talk about stupid. You admit right there that revenues went up when rates went down. What did not go down was SPENDING.
Sure, if you spend more than you take in, you never get ahead of the curve. Liberals answer is always to tax more, never to spend less. And, republican politicians haven’t exactly been good on this either. But the dems in the last 4 years (4 in congress, 2 with a president) put all the previous 6 years of spending to shame.
In fact, most countries realize that revenues go up with lower tax rates. Of course, there is some level where this stops being true. If tax rates were 0, there would be no revenues. Increasing taxes, while ALWAYS the dem answer for everything, does not necessarily increase revenues and it always decreases total possible eonomic activity.
Liberals are so fixated with punishing anyone who is successful that they fail to understand what taxes are for. They are to bring in revenues. the idea isn’t for the gov’t to steal as much money as possible from people, but to tax at the lowest possible rate to do the functions taht gov’t should do (not the functions that liberal wet dreams want gov’t to do, which is basically control absolutely everything).
Monkeytoe on January 27, 2011 at 8:09 AM
Trains have reins?
I guess that’s where the term “iron horse” came from.
KyMouse on January 27, 2011 at 9:32 AM
Grandma gets run over by
a reindeerObama’s high-speed rail.TN Mom on January 27, 2011 at 10:17 AM
Whistling past the graveyard. These mushmouth politicians must get off their asses and deal with Social Security and medicare.
I’m sick of the foot dragging. Do your damn job.
saiga on January 27, 2011 at 11:14 AM
I didn’t watch Obama Tuesday night. I am not gullable enough to think he is a new man, so I didn’t want to hear his crap.
Cut the spending and get off the freeloader kick to pay people to be useless and idle. Being poor is a good motivation to get off your ass and do something. Slopping at the public trough is a motivator to be a deadbeat. We already have too many deadbeats.
If Obama believes minorities and the victim class are not psycologically capable enough to compete in the US economy fairly, he should say so. But, to just throw money at them will only produce more welfare addicts. I believe that at least half of the people on welfare should go to work, and the other half should be taking steps to move off of welfare. Spend the money on training or makework jobs. Anything is better than free money for being useless by choice.
saiga on January 27, 2011 at 11:26 AM
Ponzi scheme is ponzi scheme.
lorien1973 on January 27, 2011 at 11:46 AM
I get “We had balanced budgets under Clinton” all the time from liberal relatives/friends. That’s when I remind them that the “balance” was from stealing from the SS “trust fund”. Guess what, the fund is empty of everything except IOU’s now. There is no “cash” in the fund, just “we’ll pay you later – Greenspan”. So while the budget has a deficit of $1.5 Trillion, it doesn’t even account for borrowing the treasury is doing to make good on the IOU’s for SS payouts.
Our level of debt is rising much higher and faster than we are really being told, and the game being played by the fed and the administration is to get the dollar devalued to try to repay it (it’s tricky accounting).
We have to cut REGULATIONS and FEES to stimulate economic growth. Taxes are fine where they are, except it should be a flat rate that EVERYBODY pays. Then we have to make SS and Medicare needs based, now. Painful, hard to swallow, but the only way to keep it for anybody past 2012.
Unfortunately, none of our politicians are willing to cause a little more hurt now to avoid the universal hurt that is racing towards us with 500 cars of napalm and an explosive loaded caboose.
PastorJon on January 27, 2011 at 11:50 AM
But liberal columninst Paul Krugman, the professor of Economics at Princeton has been telling us over the past five years that Social Security is solvent. Did the CBO consult him? The CBO must be mistaken!
Poway on January 27, 2011 at 12:41 PM
Tax the Poor! Its the only way.
orbitalair on January 27, 2011 at 1:04 PM
Really, is that the goal of Steve Jobs 3 other CEO’s of the largest 5 corporations in the US? To punish the successful? Because all those CEOs and Alan Greenspan have said that taxes must go higher, along with deep spending cuts.
Take a closer look at the numbers. Not even military spending can go untouched. There’s even a consensus among venture capitalists that some taxes are too low:
http://www.avc.com/a_vc/2011/01/deficit-reduction.html
bayam on January 27, 2011 at 1:17 PM
I get “We had balanced budgets under Clinton” all the time from liberal relatives/friends. That’s when I remind them that the “balance” was from stealing from the SS “trust fund”
You’re right, but given the size of projected budget surpluses in 2000, social security solvency wouldn’t have been an issue until 2040- so far into the future that you it could be ignored for another decade. In fact, federal debt was a mere $4 tril at the end of Clinton’s term, so national debt generally didn’t look like a problem going forward (one reason it was ignored for so long).
Of course, those budget surplus estimates turned out to be inaccurate. None of this was Bush’s fault, but the US trade deficit started to soar from 2002 forward while the decline of the manufacturing base accelerated. (The housing bubble created jobs that temporarily obscured these problems.) Over the past decade the larger trend, one that emerged even as taxes were lowered, has been this overall decline of the American economy relative to other nations. Unfortunately, I don’t think that any of the major “issues” debated in DC really address this bigger trend or how Americans can start turning things around.
bayam on January 27, 2011 at 1:29 PM
Bush
(1.2/1.9)/8= 7.9% average annual increase in federal budget
Obama
(.7/3.1)/2= 11.3% average annual increase in federal budget
Chuck Schick on January 27, 2011 at 1:30 PM
Yes the fabulously wealthy are in favor of higher income taxes, as they work with their lawyers to evade income taxes through the use of family-trust tax dodges. What else is new?
slickwillie2001 on January 27, 2011 at 1:46 PM
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