Obama's Budget is a Fantastic Comedy

News & Current Events Public News & Current Events
,
61

I was talking with a gentleman the other day who just got on SS/Med.  He was relieved because he wasn’t all that healthy and was concerned he wouldn’t be able to keep working at a job with paid medical benefits and could loose his home to medical costs.  I mentioned the ongoing debate about medical for everyone and the cost.  His answer was “what kind of Country wouldn’t take care of its old people”.  My reply was to H with you old people you seem to have screwed things up, why don’t we take care of the young, they are our hope for the future.  I am his age so he was more amused than angry.  However if we are so unfortunate that it’s an either or proposition I stand my ground.
My question is how do we take care of people who are relying on these social benfits.  Do we just make arbitrary cuts and take only from those who have other means, certainly there are some.  Most of my friends are pretty solid people, they put some money away and own their homes but they couldn’t financially survive an open heart surgery, cancer surgery or any of the major medical issues that nearly all of us will experience, if they didn’t have medicare. 

I agree we need to take this issue on, but we really need to take it on.  Improving the budget deficit isn’t the only downstream effect of cutting SS/Med.

 

 

62

The other day I saw a post on this site that said something like “people have been donating to the Social Security system all their lives. Now some want to say that their benefits are a gift.”
I’ve been on Social Security now for about 3 1/2 years. And I can honestly say that the benefits I’m getting now are indeed a gift. Before I started receiving Social Security benefits, I received a statement from the Social Security Administration that showed how much I had contributed over the 50 yearsI worked. If I had invested all that money and received a 10% annual return on those investments, after about 2 1/2 years receiving benefits, I would have received all of the money that I had contributed plus the returns.
So basically everything that I received after that point in time is truly a gift. And of course there is no way that any investment could have possibly provided me with a steady 10% annual return.
Now that the Social Security system is running a deficit, I just wonder how long this can possibly go on with 10,000 baby boomers becoming eligible for retirement each day. It really blows my mind.
Don

63

http://pnhp.org/blog/2010/04/15/ohios-lesson-for-medicare-part-d/
“Enactment of Medicare Part D – the Medicare drug program – was a gift to the pharmaceutical industry and the private intermediaries managing the drug benefits. The government was even explicitly prohibited from negotiating drug prices in a competing plan. Many of us at the time objected to the rejection of the broader concept of having the government as the exclusive administrator of the Part D pharmaceutical benefit. We could have had greater savings and less third party intrusion if we had adopted a public program instead.”

 

I hesitate to bring this up because the socialization of medicine is a hot button issue for many but I think it is easy to forget that this plan was a big boondoggle for big pharma. 

A national heatlhcare plan, a tier system involving revisions of the medicare plan with a very limited formulary which relies on generics would be a good alternative and much, much cheaper that the corporate boondoggles we are dealing with now. We have the infrastructure in place, benefits can be reduced without reinventing the wheel and paying private companies to do what medicare already does.  Services always have to be rationed that is a reality. In the end some may die sooner for lack of care whether the budget for medicare is cut or not. 

JMHO please ignore it if is seems naive and thanks!

Denise

64

[quote=VeganD]I hesitate to bring this up because the socialization of medicine is a hot button issue for many but I think it is easy to forget that this plan was a big boondoggle for big pharma. 
Denise
[/quote]
Absolutely, Denise. Although, I think windfall is a better description. The boondoggle is the governments handling of the situation.  Why should we be surprised? It is merely situation normal in our corporate cronyism/transfer of wealth state of affairs. Being unaware of the way these things work would be naive.
…and yes, services do have to be rationed. That is the reality of the situation.

65

.

66

 
 

Budget Baloney (1): Why Social Security Isn’t a Problem for 26 Years, and the Best Way to Fix It Permanently

Wednesday, February 16, 2011

 

New Jersey Governor Chris Christie, a Republican presidential hopeful, says in order to “save” Social Security the retirement age should be raised. The media are congratulating him for his putative “courage.” Deficit hawks are proclaiming Social Security one of the big entitlements that has to be cut in order to reduce the budget deficit.

This is all baloney.

In a former life I was a trustee of the Social Security trust fund. So let me set the record straight.

Social Security isn’t responsible for the federal deficit. Just the opposite. Until last year Social Security took in more payroll taxes than it paid out in benefits. It lent the surpluses to the rest of the government.

Now that Social Security has started to pay out more than it takes in, Social Security can simply collect what the rest of the government owes it. This will keep it fully solvent for the next 26 years.  

But why should there even be a problem 26 years from now? Back in 1983, Alan Greenspan’s Social Security commission was supposed to have fixed the system for good – by gradually increasing payroll taxes and raising the retirement age. (Early boomers like me can start collecting full benefits at age 66; late boomers born after 1960 will have to wait until they’re 67.)

Greenspan’s commission must have failed to predict something. But what? It fairly accurately predicted how quickly the boomers would age. It had a pretty good idea of how fast the US economy would grow. While it underestimated how many immigrants would be coming into the United States, that’s no problem. To the contrary, most new immigrants are young and their payroll-tax contributions will far exceed what they draw from Social Security for decades.

So what did Greenspan’s commission fail to see coming?

Inequality.

Remember, the Social Security payroll tax applies only to earnings up to a certain ceiling. (That ceiling is now $106,800.) The ceiling rises every year according to a formula roughly matching inflation.

Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission’s fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 84 percent of total income.

It went from 90 percent to 84 percent because a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

Presto. Social Security’s long-term (beyond 26 years from now) problem would be solved.

So there’s no reason even to consider reducing Social Security benefits or raising the age of eligibility. The logical response to the increasing concentration of income at the top is simply to raise the ceiling.

Not incidentally, several months ago the White House considered proposing that the ceiling be lifted to $180,000. Somehow, though, that proposal didn’t make it into the President’s budget.

 

 

 

 

Saving Social Security

The highly successful program, under attack by Republicans and Wall Street, can easily be shored up for future retirees.

 

Social Security is the most successful social program in American history. It shouldn’t be privatized; its benefits shouldn’t be cut; and the retirement age shouldn’t be raised.
Before Social Security was established 75 years ago, more than half of our elderly population lived in poverty. Because of Social Security, the poverty figure for seniors today is less than 10%. Social Security also provides dignified support for millions of widows, widowers, orphans and people with disabilities.
Since it was established, Social Security has paid every nickel it owed to every eligible American, in good times and bad. As corporations over the last 30 years destroyed the retirement dreams of millions of older workers by eliminating defined-benefit pension plans, Social Security was there paying full benefits. When Wall Street greed and recklessness caused working people to lose billions in retirement savings, Social Security was there paying full benefits.

Despite its success, Social Security faces an unprecedented attack from Wall Street, the Republican Party and a few Democrats. If the American people are not prepared to fight back, the dismantling of Social Security could begin in the very near future.
Rep. Paul D. Ryan (R-Wis.), the new chairman of the House Budget Committee, wants to partially privatize Social Security, lower its cost-of-living adjustments and drastically cut benefits. An increasing number of his fellow Republicans agree. Rep. Michele Bachmann (R-Minn.), one of the leaders of the “tea party” movement, has said that we need to “wean” everyone except current retirees off Social Security and Medicare.
There are threats on other fronts. A deficit-reduction commission established by President Obama called for increasing the retirement age to 69, reducing cost-of-living adjustments for today’s retirees and deeply reducing benefits for future retirees who make as little as $42,000 a year.
Just about every day, one conservative or another tells us that Social Security is in crisis, that it is going bankrupt and that the Social Security Trust Fund contains nothing more than a pile of worthless IOUs. As a result of this barrage of misinformation, many young Americans have been convinced that when they reach retirement age, Social Security will not be there for them.
So what are the facts?
According to the latest report of the Social Security Administration, the program will be able to pay all of its promised benefits for the next 26 years. After 2037, Social Security will still be able to pay about 78% of promised benefits.
The nonpartisan Congressional Budget Office has come to a similar conclusion: Social Security will be able to pay full benefits to every eligible recipient until 2039, and after that, it will be able to cover 80% of promised benefits.

67

Poet, please don’t bite off on reasoning fallacies.  I am blunt and to the point for a reason.I never said the others weren’t Socialists or made any allusion to that.  I know the exact definition of what Socialism is, what Marxism is, and how it all falls under the general umbrella of Collectivism no matter what you want to call them.  I’m not using the term “Socialist” as an insult and being childish by calling him names because some people think that term is bad.  I’ve met Obama a few times and like the guy on a personal level so I’m not calling him a rude name, I’m merely stating a fact.  OBAMA IS A SOCIALIST and people are afraid to call him out for being one!!  Marxist ideology has permeated American politics and has grown in power since the creation of Theordore Roosevelt’s “Bull Moose Party” over 100 years ago.
Just because I didn’t mention Bush and the others doesn’t mean I feel they have not adopted Marxist ideals.  If I posted I like chocolate ice cream would you of posted “We all should remember that even though I like chocolate ice cream as well, many americans have traditionally enjoyed vanilla for 100 years now.”???
That is the reasoning fallacy “False Dilemma”, jumping to the conclusion that if someone beleives one thing, they are automatically against the other.  If someone here makes that error in logic, THEN and only then, you call them out on it.  There is no point trying to be preemptively politically correct, it only weakens the point being made and lends credence to acting overly cautious when there was nothing wrong with the statement made in the first place.  If someone has a problem with what I or any others here have said, let them speak their mind and in the process, EXPOSE THEMSELVES for what they are, polarized zealots.  That way, you know where a person stands, what kind of person they are, and in the process evaluate all the statements they have made in the past.  You will never catch me responding to someone for saying “Bush sucks” or “The Tea Party are all Racist babykillers” or something just as idiotic with an attack against what I beleive to be the opposite political spectrum.  I understand your intentions are honorable and what you were trying to accomplish, but by doing so, you are removing everyone’s ability here to accurately identify the less intelligent political zealots.  There are only so many ways to guage a person’s character over the internet when they are hiding behind words.  Let their actions speak for themselves and if they get out of hand, give them free reign so they can get booted and we get rid of them sooner.  I may be blunt and to the point, but there is reason to my actions.  :wink:
OBAMA IS A SOCIALIST!  There I said it…  Let the zealots here go nuts over that, act childish, then get booted the sooner the better.
-Tommy
 

68

Posted in error.Travlin

69

[quote=TommyHolly]If someone has a problem with what I or any others here have said, let them speak their mind and in the process, EXPOSE THEMSELVES for what they are, polarized zealots.
[/quote]
Then why do you bother to join a conversation where we discuss different viewpoints as a means of learning?  If I disagree with you I am one of the “polarized zealots”, but you’re not?
Travlin 
 

70

 Darbikrash,
The fly in the ointment in your post above stems from this part:

Now that Social Security has started to pay out more than it takes in, Social Security can simply collect what the rest of the government owes it. This will keep it fully solvent for the next 26 years.  
SS cannot "simply collect" what it is owed because the Federal Government has spent it!  It's gone! In theory the program could or should be solvent for the next 26 years but if there is no money there, then there is no money there. Or anywhere else. The government is broke and broken at all levels. The defenders of this program are way too late. They should have been voting out the overspending politicians who have pilfered the SS Trust Fund over the last generation or two. You know, the same ones who have been and continue to tell us the program is sound.
71

[quote=earthwise]SS cannot “simply collect” what it is owed because the Federal Government has spent it!  It’s gone! In theory the program could or should be solvent for the next 26 years but if there is no money there, then there is no money there. Or anywhere else. The government is broke and broken at all levels.
[/quote]
Good Point.
Defense contractors don’t seem to have much trouble getting paid. I’d ask that they get the IOU’s and any defaults before it’s passed onto retirees who have no other recourse. Fair enough?

72

[quote=darbikrash][quote=earthwise]
SS cannot “simply collect” what it is owed because the Federal Government has spent it!  It’s gone! In theory the program could or should be solvent for the next 26 years but if there is no money there, then there is no money there. Or anywhere else. The government is broke and broken at all levels.
[/quote]
Good Point.
Defense contractors don’t seem to have much trouble getting paid. I’d ask that they get the IOU’s and any defaults before it’s passed onto retirees who have no other recourse. Fair enough?
[/quote]
Fair enough? Maybe. Defense contractors don’t seem to have any trouble getting paid, but then neither do SS recipients. At the moment. At the moment everyone is getting paid: SS recipients, defense contractors and everybody/anybody. But the Federal Government is maxing out it’s credit card to do it. When the music stops then nobody will get paid. Or at least not in currency that has any value. This is going to end badly for everyone. Claiming dibs on the corpse seems like an exercise in futility.

73

[quote=TommyHolly]Poet, please don’t bite off on reasoning fallacies.  I am blunt and to the point for a reason.

[/quote]
Reasoning fallacies? I rest my  case.
Poet
 

74

I think he said "I understand your intentions are honorable and what you were trying to accomplish, but by doing so, you are removing everyone’s ability here to accurately identify the less intelligent political zealots.  There are only so many ways to guage a person’s character over the internet when they are hiding behind words."He must mean that anyone that does not agree with him is obviously not as intelligent as he is and is of suspect moral character.  But I will join you in your alleged stupidity and alleged moral failures.  I probably suffer from them, too.
If we can hold on long enough, we will survive the rhetoric.  They did in the thirties.  They did not in the 1850s and 60s and all of their children were slaughtered in an internecine war.
The biggest challenge we face these days is keeping our heads screwed on and recognizing that our neighbor is not our enemy.  Whether he voted for someone we like or not.

75

 [quote=earthwise]
Fair enough? Maybe. Defense contractors don’t seem to have any trouble getting paid, but then neither do SS recipients. At the moment. At the moment everyone is getting paid: SS recipients, defense contractors and everybody/anybody. But the Federal Government is maxing out it’s credit card to do it. When the music stops then nobody will get paid. Or at least not in currency that has any value. This is going to end badly for everyone. Claiming dibs on the corpse seems like an exercise in futility.
[/quote]
Not disagreeing, hard to see any of it ending in a good way.
I’m guessing the defense guys are going to come out OK, just like our friends the bankers did. One more example of a prioritization schema that does not really work for the citizens, but works pretty well for the guys on top. All the rhetoric being whipped up to slam the “entitlement” programs seems to just pass right over things like the defense budgets, I’m just having a little trouble reconciling this type of logic.
People claiming we are “out of money” and the defense budget just grows and grows with contractors paid net 30 like clockwork, whilst the SS fund gets IOU’s.  If a person was a cynic (certainly not me) one might conclude we had a problem of priorities, not of budget.
Not to be literal, but it’s an awkward question when someone asks why we spent a couple of trillion blowing things up and killing people, but we had better get with the program to cut entitlements that our citizens have paid their own money into every week.
Just sayin’.

76

Excuse me for not clarifying better.  There is nothing wrong with disagreement, I expect people to have different viewpoints, everyone does.  Simply disagreeing doesn’t make you a political zealot.  If someone flipped out to the point where they are breaking forum rules over a simple statement, that would make them one. 

 

Poet, rest your case how? 

The whole point of your post was to be preemptively politically correct on the assumption that people would see my statement and assume the False Delimma that because I said something against Obama, I automatically like Bush??  I find that hypocritical since Chris Martenson said “Obama’s budget is a fantantastic comedy” amoung other things and I didn’t see you chime in with, “Even though Obama’s budget may be a fantasy, it is important to remember that Obama has made budgets in the past that portions of the American public agree with.”

Dragline, that is not what I meant.  You can disagree and still be intelligent, don’t jump to conclusions.  What I meant is if someone views my comment that Obama is a Socialist and disagrees, I’d love to hear why and we can have an intelligent debate about it.  If someone else views that same statement and becomes so enraged that they have to insult you because they are that so angry you said something against Obama, then you can identify them as an extremist.

77

Sociological studies of how a criminal is made show that they slowly drift into it.
And then comes the “Aw fuggit.” moment. and they go for it full tilt.

Obama has had his moment.

78

Good, clear treatment.  However, you missed one of the sacred cows - taxing investment income - and I think it would be good to start calling “defense” spending what it really is: war spending.  In other words, we need to start talking about buildling a society based on compassion rather than aggression in all its guises.

79

Chris, why is Social Security part of this analysis?  I know that the feds have “borrowed” from the trust fund but shouldn’t the accounting exclude it?  Or is it because the money has already been spent i.e. effectively stolen from employees and employers who have paid it in over the years?  What does the analysis look like if SS money is excluded?

80

Frankshay, the budget numbers include SS receipts and outlays.  Up until recently, the government took in more money from social security taxes than it was paying out; including social security helped make the total budget look better and the deficits lower.  The government likes to talk about the public debt only, and leave out the trillions in debt it owes itself for social security.  Now that social security is entering a deficit also, it can’t help prop up the rest of the budget, so that means more borrowing, more interest, and on it goes until it can’t anymore.