of course, if the long-term productivity trend is really only 1.7, there are a lot of overpriced stocks out there....

oh noes! if we do nothing, the trust fund, which was intended to get us through the baby boomer generation, runs out after the baby boomers are all gone !

what a fucking disaster!

cleek,
I take it you're a boomer. As a non-boomer that's paying in SS. The fact that the well will be dry when it's my turn to drink is upsetting.

The fact that boomers don't care about later generations, while typical, is among the reasons why SS is losing support among younger generations.

They also changed some assumptions in Section V.B.2 having to do with calculating real-wage differentials. Not sure I understand it entirely, but it seems like another 0.1 tweak of their internal methodology that has a negative impact on the projection.

The fact that boomers don't care about later generations, while typical, is among the reasons why SS is losing support among younger generations.

Or maybe it's the fact that you're just absorbing the bombardment of Chicken Little propaganda from conservatives who hate SS. Just a thought.

2040! Who gives a shit about that! The Iranians are going to kill us all next week!

Waaaa!!!!

Quick! Run around in circles! Nuke something! Anything!

I take it you're a boomer. As a non-boomer that's paying in SS. The fact that the well will be dry when it's my turn to drink is upsetting.

It's the trust fund that goes dry, not Social Security itself. The trust fund was established to take care of the boomers, so if it goes dry in 2040, that was what it was designed for and why we have all been overpaying into the system for the last 20 years. Presumably there will still be someone working in the country 35 years from now to pay for your benefits, as well.

craigie: Nuke something! Anything!

Anything? If we nuked ourselves we could save the cost of a very expensive missile. Presumably it will be detonated in a blue area (NYC voted 75% for Kerry, with Manhattan at 80%, so that seems like a good target).

Well there you have it. The Right officially hates America.

Qwerty,
Then what is the status of the balance of payments in 2045? Unless 2040 is the trough, wouldn't that mean SS would continue to draw down into the red beyond that?

2040! Who gives a shit about that! The Iranians are going to kill us all next week!

Waaaa!!!!

Quick! Run around in circles! Nuke something! Anything!

Texas?

These numbers by themselves are meaningless. I hope they have estimates of the expected errors in their forecasts. If they don't have error estimates, what good are the forecats?

See -- this proves that George W. Bush and the Republicans all truly and exclusively care for the future of real Americans, and that Democrats are UnSerious.

Unlike the lies on that LIEberal Fox show, Family Guy:

"What do you do at a Young Republicans meeting?"

"We help those who already have the ability to help themselves. And we advance the ideal that Jesus chose America to kill unbelievers and brown people."

Let me get this straight.

I don't have to make any minor lifestyle changes (like, say, driving a more efficient car) because coastal American cities won't start going underwater until 2050.

On the other hand, I'm supposed to blow up the social security system right now because, in the worst-case scenario, we might have to increase taxes a bit in 2040?

Right wing logic is...terrifying.

Let me get this straight.

I don't have to make any minor lifestyle changes (like, say, driving a more efficient car) because coastal American cities won't start going underwater until 2050.

On the other hand, I'm supposed to blow up the social security system right now because, in the worst-case scenario, we might have to increase taxes a bit in 2040?

Right wing logic is...terrifying.

It's called class warfare

I'm not sure the "day" that the "trust fund" runs dry is of even the slightest significance.

At the moment, we are a bit more than halfway past a projected 30-year run of having the dedicated annual SS taxes exceed actual annual SS expenditures. So, for some time:

1. Overall govenment spending (other than a brief blip towards the end of the Clinton era) exceeds both regular tax revenue and SS tax revenue, so the govi't sells bonds to make up the difference. Thus, the national debt is going up every year, the portion of the budget dedicated to interest payments on the debt is now a significant factor.

2. At some point in 2006, SS tax payments will, again, exceed SS benefit outlays. At that point, the government will issue an IOU to itself, but of course will spend the actual money collected anyway, and, when that surplus runs out, will issue bonds to cover the rest of the 2006 defecit.

3. Perhaps Kevin can confirm, but I belive it is more like 2020 in which projected SS tax revenue is no longer enough to cover SS payments. On that day, TECHNICALLY, the "trust fund" will begin to be drawn down. ACTUALLY, what will happen is other tax revenue will be used to make the payments.

So, today, SS takes in $100, spends $85, and the other $15 is spent on other federal outlays, but the $15 is entered as an amount in the "trust fund"

In 2020 or whenever, SS will take in $100, and spend $105. The extra $5 will have to come from some other revenue source, or, perhaps the debt evidenced by bonds the govit owes itself will be "refinanced" and sold to a third party, basically more borrowing. This will be no new "debt" as long as you count the SS Trust fund as part of the national debt.

Since the "draw down" of the trust fund is an accounting entry rather than a draw of actual money stuffed in a mattress somewhere, its irrelevant when the Trust fund "expires," as that will only mean that as of THAT day, whether it be 2040 or 2041, if SS tax recipts are insufficient, the difference will need to be made up from some other source.

Actually, I think its relatively bogus to be overpaying into the so called "trust fund" now. Unlike an actual insurance company, the federal government has no real reason to collect an admittedly excess tax. I am not sure how the Democratic congress let Regan and Greenspan foist this one over in 1984 or whenever, but there you have it.

For sure somewhere on this thread someone who is normally liberal will actually propose raising the SS tax now, in anticipation of future needs. Considering the regressive nature of the tax, and the fact that we are overpaying now for no reason that I can see, the logical move would be for some brave Democrat to call for an immediate SS payroll tax cut! Back to the level to support current SS spending.

Of course, that would require explaining the above to the electorate.

Let me see if I understand, the system isn't really broken, a minor tweak here or there will extend it well beyond 2040. What the f*** was Bush talking about?

Presumably there will still be someone working in the country 35 years from now to pay for your benefits, as well.
Posted by: Qwerty on May 1, 2006 at 5:44 PM | PERMALINK

Yes there will still be someone working in the country in 35 years. As long as the country we're talking about is India. Americans will all be unemployed, and the only people earing a living will be the investor class.

and the only people earing a living will be the investor class.

Speaking as a member, I don't consider this to be "earning" a living. But point taken...

mo, i hope you followed hank's explanation. if not, bear in mind that there are two choices if and when a problem hits social security: reduce benefits or increase taxes. but reduce benefits isn't eliminate them, even if we make that choice.

hank, the reason sensible people bought into the "prefunding" approach to baby-boomer social security is that it was clear that the demographic bulge of the baby boom had atypical requirements. What no one at the time seems to have imagined is that people as dishonest as the bush administration and the republican right wing would get to set tax policy.

Lesson learned: no prefunding ever again.

Well Hank,it seems that in 1983,the proposal to have a higher rate of taxation vs the expected payout was to provide a 75 year "fix" which made the over-payment to a trust fund. The trust fund was raided later when it became apparent that an untapped source of gov't financing was just sitting there available as off-budget cash ready to cover on-budget spending. Congress,being occupied by people who have lost touch with real world budget consequences, were led,willingly,even gladly down the road of fooling all of the people some of the time and some of the people all of the time. And for all time or at least a generations worth of re-elections.

Faster growth but lower interest rates? Calling Dean Baker, Brad DeLong, and Paul Krugman! And I noted in my Angrybear update thanking you for your hard work - Jeremy Siegel's recent analysis ties to today's immigration debate.

I think, basically to agree with howard, that there is a very sophisticated argument in favor of the pre-funding.

It would go something like this. First, you assume that what is actually going to occur when you "draw" down, the "trust fund" is a refinancing of what is essentially exisiting debt. That means, the day before a "draw down" of $5, the government owes $5 to itself, the day after the government owes $5 to you, me, the Chinese government, or whomever buys the bond.

If this assumption is correct, and I think it might well be what actually happens, then there is some equity to the pre-funding approach because, essentially, the people who overpaid from 1983 to 2020 are the ones getting the benefits at that time, and, because this is a "refinancing" rather than "new" debt, the non-retired taxpayers of 2020 are in no worse shape, as the amount of debt they owe does not increase.

Of course, it would help if the current stated national debt of $X trillion INCLUDES the SS trust fund (it should really be a liability rather than an asset), I have a feeling that either (i) no one pays much attention to the accuracy of the $X trillion number, and (ii) if they do, it is understated by NOT including the trust fund in it.

As I said, not only too sophisticated, but the whole structure requires that the government incur debt on a good faith basis, not, as the current Republican plan appears to be, on a political basis unrelated to the actual needs of the federal government.

Mo: "The fact that boomers don't care about later generations, while typical, is among the reasons why SS is losing support among younger generations.

Silly Mo. You are confusing conservatives and boomers. Big difference. I guarantee that boomers do care about later generations. Thus, we all agreed to overpay into SS for years. We didn't want our children to bear the cost of our retirement years.

And now Bushco--aka "conservative" who doesn't care about future generations--is telling us that the money we set aside to cover future expenses was given to the richest Americans (Oops!) so the US needs to default on what was borrowed and in the process dismantle the system and replace it with something that doesn't work.

I have never, not for one day, expected to receive SS. But it infuriates me that Bushco keeps trying to dismantle something that wasn't broken and was doing some good.

And Mo, it is conservatives you need to loathe. It is their policies that are robbing you of your future.

By the way, props to wonker Kevin Drum for staying on top of SS and the whole Bush bamboozle.

If Social Security is such a mess, why do Replublicans (and most of the media) insist on folding in the massive annual SS surplus to make the actual annual deficits look smaller than they actually are?

I notice you kind of slid past the Medicare part of the report.

The next itme you hear the Pres. say that the Social Security IOUs are just worthless paper,go to the US Treasury website and look at the Monthly Treasury Statement and then scroll down to Sch.D, the intragovernmental debt. Look at the entries there and you'll see the SS debt of more than $1.5 trillion (I think)now go to the line that shows the "worthless" IOUs owed to government employees and then look at the line of "worthless"IOUs to the military retirees. These are identical pieces of debt.
Now go find a group of government employees (the nearest Federal building of any consequence will have a cafeteria (subsidized in the past,which is why when we were first married we ate there often,security was a bit lax in the old days)and at lunch time play a tape of his speech to the gathered and tell them that is what he thinks of their retirement. Wait (because they will have no idea what you are talking about) tell them a second time,leave literature and leave,knowing you have done your duty. I tried it with my mail carrier friends. Not a clue.

The public debt is up $2.6 trillion (46%) since Bush took office.

That's a million dollars a minute.

'hank' posted:

"At some point in 2006, SS tax payments will, again, exceed SS benefit outlays. At that point, the government will issue an IOU to itself, but of course will spend the actual money collected anyway"

Untrue.

By federal statute, the the monies collected from Social Security contributions can only be used for Social Security. Also by federal statute, any surplus which remains in the Social Security Trust Fund must be invested in U.S. Treasury Securities.

There are no "IOUs".

.

"So, today, SS takes in $100, spends $85, and the other $15 is spent on other federal outlays"

False.

.

"For sure somewhere on this thread someone who is normally liberal will actually propose raising the SS tax now, in anticipation of future needs."

Actually, we should remove the cap and dramatically LOWER FICA contributions.
.

Oh goody - the "dead parrot" troll is back doing the same old bit.

tbrosz, thank you for drawing our attention to the extraordinary conclusion that medicare part D is actually going to be cheaper. i can't wait to dig into that conclusion.

that said, hell yes, medicare has a problem. social security has a pebble in its shoes.

and the general fund has a disaster.

VJ, you're talking about something slighlty different than hank: the surplus is being "invested" in a special form of treasury paper, but like any bond, it is an IOU; and from an accutning standpoint, what happens is that the money goes into the treasury paper and separate borrowing covers the expenditure that hank is talking about, but in the cash-flow world, dollars are fungible and are, in fact, being used for current expenditures.

that said, hell yes, medicare has a problem

Yet, somehow, if we extend Medicare to the entire U.S. population (single-payer universal-coverage national health care), instead of making the problem much worse, it will magically be resolved!

In the interst of trying to make this topic slightly less boring than it otherwise would be, I substituted IOU for Special U.S. Treasury Bond.

I think that one sentence could well be tweaked, however, howard is correct in pointing out that VJ is being either ignorant or intentionally troll-like in his quote above (I vote for troll like since he left off the end of the sentence.)

However, in the interest of accuracy:

"Today, SS takes in $100, spends somwhat less, for the sake of discussion, let's say $85, on current benefits, transfers the remaining $15 to the general fund in exchange for a special SS Treasury Bond worth $15, and then spends the $15."

This doesn't change the rest of the analysis at all. Unless, of course, VJ thinks that there is a pile of money sitting around Washington D.C. somewhere with a post-it on top which says, "SS Trust Fund." If he or she does, no chance of discussion there.

And, of course, those special SS bonds are real obligations. I literally could not believe it when Bush referred to them as not having worth. Even for him that was an amazing statement.

However, here's Kevin still running around citing the date the "trust fund" is exhausted as if that date has actual meaning and effect, other than as an accounting issue.

I suppose if on that date the last remaining SS bond is sold to India or China it will have effect as we will then be paying more interest annually to India or China, but IMHO to cite that date as if it has any economic significance for SS itself is misleading.

The fact that SS and Medicare have dedicated taxes, when other governmental expenditures do not, merely provides a metric for those programs in addition to spending. As there is no "military" payroll tax, no one bothers to discuss whether, at some future date, the US will no longer have an Army, Navy, Marines, or Air Force.

For the same reason, its silly for otherwise intelligent people to discuss the SS payroll tax as if its cost will someday cause some future administration to say "well, how about that, I checked today and there is no longer any Trust Fund, schedule a press conference, the program is over."

SS is not going anywhere. Benefits may well be lowered, probably indirectly through the raising of the retirement age, but for people to say "I never expect to get any SS" ---- well, it seems to demonstrate a fundamental misunderstanding of its funding.

Well, GOP, don't have time for this one today, but for the purposes of rebutting that statement (i) you can define the "problem" of Medicare however you want in terms of its cost or projected cost, however (ii) its pretty damn clear that the current 1.45% (x2) of payroll tax is the funding source, AND MOST IMPORTANTLY (iii) THAT 1.45% COVERS THE SICKEST POSSIBLE, MOST EXPENSIVE COHORT IN THE ENTIRE COUNTRY, ITS PROBABLY ACTUARIALLY IMPOSSIBLE FOR THE POPULATION UNDER AGE 65 TO COST AS MUCH AS THE COHORT OVER AGE 65.

So, even if you doubled the Medicare tax to $2.9% (x2 for the employer side, perhaps) for many, many many people, that would result in a savings of what they currently pay.

Take it away, folks. There goes this thread.

If we extend Medicare (or its equivalent) to the entire population, then all that money currently being paid to insurance companies would go into the huge single-payer pool. It would add more beneficiaries, yes, but also many more contributions without a proportional increase in bureaucracy.

Though it only works if you let the gov't negotiate drug/service reimbursement rate (like private companies, but unlike the restrictions placed on Med Pat D).

If we extend Medicare (or its equivalent) to the entire population, then all that money currently being paid to insurance companies would go into the huge single-payer pool.

Your faith is touching, but this seems extremely unlikely.

On the other hand, I'm supposed to blow up the social security system right now because, in the worst-case scenario, we might have to increase taxes a bit in 2040?......Right wing logic is...terrifying.

Um, no, you're not supposed to "blow up" Social Security. Nobody is advocating that. You're supposed to favor the minor adjustments (nudging the retirement age up, modest trimming of wealthy retirees' benefits, etc.) that will allow the system to remain solvent without a 30% increase in payroll taxes in the 2040s. Of course, we all know preserving the retirement benefits of millionaires long ago became for the Democrats what tax cuts for millionaires are for the Republicans.

Liberal hyperbole is...pathetic.

So, even if you doubled the Medicare tax to $2.9% (x2 for the employer side, perhaps) for many, many many people, that would result in a savings of what they currently pay.

The issue isn't the specific level of taxation that would be required to fund single-payer universal health care (that's a different, albeit related debate), but whether we can reasonably assume that spending and revenues will be balanced. Given the general history of government social welfare programs in this country, and specifically the huge Medicare problem, that isn't remotely likely. Single-payer health care would likely massively increase the federal budget deficit.

gop, spending and revenue most assuredly can be balanced when there is a special tax to cover them. this is why so many of us were so aghast at the notion that social security has a problem at all: the social security tax is a guaranteed revenue source. it is possible, as i've noted, that benefits may have to be cut to match revenues, or it is possible that revenues will increase, but they can't get out of alignment.

the problem in medicare is that it's much harder to cut benefits in the same way, but still.

meanwhile, as has been pointed out, from an overall economic efficiency standpoint, there is no question that some form of guaranteed universal health insurance would increase economic efficiency in america, make it easier to hire new workers, and let our corporations compete more effectively, which is why sotto voce, you start to hear corporate support for universal health care.

sangria, what in the frickin' world are you talking about? george bush and the republican party want to blow up social security. if all bush wanted were to engage in some dialogue about retirement age, he would have had a success.

As for the simplistic notion that the "cure" for social security is means-testing, no, it isn't. let's just leave it at that (the numbers are just too small).

insofar as bush expressed principles about social security, they were intended to undercut it as social insurance, starting with his fatuous notion that the "IOUs" don't mean anything.

now, get a president in office who is dedicated to social security's preservation as an annuity with some benefits kickers and who has first addressed the overal general fund crisis and then addressed the medicare problem one way or another and we can talk about adjustments at the margin.

but that's not what bush had in mind in the slightest....

The sooner we increase the retirement age, the better. And, yes, the Medicare system is in much worse shape, but nobody wants to talk about that. I assume that's because you can't really talk about Medicare without getting into replacing the whole f'd up American health care system.

GOP: The issue isn't the specific level of taxation that would be required to fund single-payer universal health care ... but whether we can reasonably assume that spending and revenues will be balanced. Given the general history of government social welfare programs in this country

After Reagan and Bush2 I can understand your worry about spending and revenues being balanced. As for "government social welfare programs" in specific, you might take comfort in the fact that the mother of all such programs - Social Security - has been propping up the government for over 20 years now. And as for the possible future shortfall ... by the accounting the federal government went broke decades ago.

The fact that there will be intransigent pukes in the way of proper funding for Medicare really just means that America has an intransigent pukes problem, not that Medicare has a problem.

Well,no actually,the federal gov't didn't go broke years ago. It incurred debt in order to fund policies it adopted with a future income stream as the source of repayment. The "balance sheet" of the gov't is becoming rather more debt laden as a result of policy decisions like fighting a war. The economic growth issue (the future funding) is difficult to seperate from the war issue,though because it's not clear how much of the GDP growth is,in fact,caused by the deficit spending necessitated by the slighty under-forecasted costs of said war.
Nonetheless,the policies adopted by this administration coupled with the proven fundamental inability (12 years after the illusory Contract with America) of any part of the bureaucracy to commit seppuku (Dept. of Education=a bureaucracy of bureaucracies) render the solvency issue moot. Which policy and its concomitant appendage should first be severed or at least have its stomach stapled? The war costs combined with tax cuts have proven to be disastrous as far as the continued ability to incur future debt. Had one or the other not happened,the discussion of Medicare costs would be more academic than it will be in 10 years. Just a thought.

A reminder, of what most of us know: Most of Social Security's problems could be solved by eliminating the cap on FICA-taxed income. Oh, and making sure that the government honors those billions of dollars worth of "accounting device" bonds that borrowed from SS from after Greenspin's little 80's slight-of-hand.
"The money's all gone" or somesuch said Glorious Leader, not thinking promises matter.

"slighty under-forecasted costs of said war."
I hope you're being sarcaustic. The war was supposed to cost a few billion or tens of billions, or even pay for itself, and now cost at least $300 bill., and really more when the net effect is taken into account - and we're still not out of there.

Public debt/GDP, 1/2001 = 57%
Public debt/GDP, now = 64%

'howard' posted:

"VJ, you're talking about something slighlty different than hank: the surplus is being "invested" in a special form of treasury paper, but like any bond, it is an IOU"

That's just it, it's NOT like any other bond, and it's most certainly not just an IOU.

A Social Security Trust Fund bond is the most privileged of Treasury bonds issued to Social Security by the U.S. Treasury, redeemable at any time at full face value, unlike any other bond that they issue.

.

"and from an accutning standpoint, what happens is that the money goes into the treasury paper and separate borrowing covers the expenditure that hank is talking about, but in the cash-flow world, dollars are fungible and are, in fact, being used for current expenditures."

Nope.

What you are suggesting would be a violation of the federal statute.
.

'howard' posted:

"VJ, you're talking about something slighlty different than hank: the surplus is being "invested" in a special form of treasury paper, but like any bond, it is an IOU"

That's just it, it's NOT like any other bond, and it's most certainly not just an IOU.

A Social Security Trust Fund bond is the most privileged of Treasury bonds issued to Social Security by the U.S. Treasury, redeemable at any time at full face value, unlike any other bond that they issue.

.

"and from an accutning standpoint, what happens is that the money goes into the treasury paper and separate borrowing covers the expenditure that hank is talking about, but in the cash-flow world, dollars are fungible and are, in fact, being used for current expenditures."

Nope.

What you are suggesting would be a violation of the federal statute.
.

Forget the long term forcasting -- when will medicare be fucked?

Its safe to say at this point that ignoring VJ's posts is the safest bet.

As someone came along to suggest raising the SS tax by eliminating the cap, pretty much on schedule, let me give you the full monty on why that would be a bad idea.

Let's save for the end of this post the current overall defecit, and look at SS, circa 1983. You know that there is a demographic trend that will hit in 2015 or so, and you know the extent of it. You know that at that point, the ratio of wokers to retirees will change, and you know, or at least you can project, that its is a demographic aboration, which will subside in 2060 or whatever.

If you do nothing, and simply raise the SS tax as needed to cover costs, you end up with the slight problem that the persons who pay the higher tax (i.e., the post 2015 non-retirees) might not really get much benefit when they themselves retire later. So, you would be raising SS tax to cover current retirees.

So to keep SS as the annuity program that it is, taxes were raised on the very cohort which would be retiring starting in 2015.

I will be, without doing any research, that there was never even the slightest intent that the resulting surplus would be "saved" in any way, at least until Al Gore tried to make an issue of it when it looked like the budget might actually be balanced.

By creating a separate class of debt, AND THIS IS THE KEY, a class of debt (the SS "surplus") which the Government would otherwise have borrowed anyway, you set the stage to simply re-finance the debt as the baby-boomers retire. This was arguably the fairest solution both to the baby boomers paying in to the annuity, and the post 2015 workers who, in theory, would only "refinance" the SS debt.

Now, this is a very, very far cry from a "worthless IOU' but one wonders how many people are qualified to understand this plan in the first place.

So, not only is it craven for Bush to imply that the bonds will not be redeemed, it is either a blatant demonstration of stupidity or even MORE CRAVEN, if that is possible, to not understand what effect the general, non-SS debt of the government has on this plan.

If the non-SS debt had been kept to some managable level, as it was heading towards during the Clinton years, when the time came to refinance the SS debt into actual, third party debt, it would have made Greenspan look like a genius. However, now, Bushco has run up the general defecit to such a high number that Bush has actually lobbed the trial ballon of not paying back those SS bonds.

Totally friggen outrageous.

So, if anyone wants to raise taxes, it is not the SS taxes which need to be raised, it is the general taxes, so that by 2015 or 2020 or whenever the overall debt load of the U.S. can support the SS refinancing which needs to take place then.

This may well be coupled with an age increase, but people on this board, of all places, should understand the basic funding mechanism, even if it is complicated and boring.

A: The sky is blue.
B: No it's not.
A: The grass is green.
B: False.
A: Water is wet.
B: What you are suggesting is a federal crime.

etcetc

Qwerty: It's the trust fund that goes dry, not Social Security itself. The trust fund was established to take care of the boomers, so if it goes dry in 2040, that was what it was designed for...

Good point, but one thing should be added. While the oldest Boomers will be nearly 100 (if they live that long) by 2040, the youngest will be 75. That is, some of that demographic bulge will still be collecting after that date.

Whether that will still be too much for SS to handle, post-trust fund, I can't say. But the underlying point is correct (and one I never heard last year): the shortfall problem is temporary, and will be over when the last Baby Boomer dies. (Unless something weird happens with longevity or fertility in the next half century, which is hardly out of the question.)

gop, spending and revenue most assuredly can be balanced when there is a special tax to cover them.

They "can" be balanced even if there no special tax. "Can be" does not mean "will be." "Can be" does not mean "are likely to be." The history of social welfare programs, and Medicare in particular, suggests that it is unlikely that the budget for publicly-funded single-payer universal health care would be balanced. More likely, it would massively increase the deficit and the national debt.

It's hilarious to keep seeing statements to the effect that Bush and the Republicans cannot be trusted to balance the budget, but also that adding a massive new entitlement program to that budget would not make the deficit any worse. Can you say "cognitive dissonance?"

meanwhile, as has been pointed out, from an overall economic efficiency standpoint, there is no question that some form of guaranteed universal health insurance would increase economic efficiency in america,

Of course, this is completely false. It is very much open to question whether "universal health insurance" would increase economic efficiency in America.

GOP

Have you ever compared our current national debt with our gross domestic product. The debt is massive but compared to our GDP it pails to insignificance.

The real question is can we afford to continue with the current mess. The answer is no, not if we want our corporations to be competitive with the rest of the industrialized world. Set up a single payer system, (expanding medicare is a place to start) price it appropriately, and then adjust as necessary. If Democrats are in power the adjustments will probably be in the form of slightly higher taxes. If Republicans are in power they will simply print a little more money running up the deficit. I would much rather borrow and spend for something like universal health care that has a positive good than pay oil companies for the privilege of drilling on public land. Wouldn't you?

It is very much open to question whether "universal health insurance" would increase economic efficiency in America.

If you can't calculate the simple payback period for a hybrid vehicle, I don't think you're equipped to be discussing something a thousand times more complex.

1) My under-forecasted war cost statement was,in fact,meant sarcastically;thanks for noting that but going ahead and saying your piece anyway;
2)Using the estimate that close to 84% of total payroll is already subject to the SS (FICA) tax,eliminating the cap would raise about $100 billion,not nearly enough to cover the gap but it would lessen the amount of general revenues needed to fully fund SS under the trustee's base case assumptions;
3)Under the trustee's best case scenario,the one CBO has noted is the one closst to actual economic performance since 1983,there is no shortfall throughout the 75 year projection period,which is why I,for one,am no opponent of immigration.
4)There is no solution currently on the table to deal with the forecasted costs of Medicare which at some point in 2050 or so will consume almost every dollar raised at over 18% of GDP (tax revenue has ranged between 16.6% to 22%). So I would prefer not to have means testing for SS benefits as I will need that monthly payment to defray the cost of my Medicare premiums and so that,having assiduously saved throughout my career,I won't continue to support the grasshoppers in this country.Soylent Green won't be seen as just another poor Charlton Heston movie,but a blueprint.

The debt is massive but compared to our GDP it pails to insignificance.

It's 64% of GDP, up from 57% in 2001.

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

GOP, nice of you to redefine the situation and all. yes, you can be as dubious as you want, but assuming that we follow the pattern of social security and medicare, there will be a dedicated tax.

meanwhile, cognitive dissonance, to my way of thinking, consists of discovering something that no one has said: that there is any chance of universal health care occurring under bush. we're talking about achieving universal health care when there is a competent, honest administration in place.

meanwhile, yes, of course it's true that health care as it functions in america today is economically inefficient. on what basis can you possibly be arguing otherwise? what, exactly, are the economic efficiencies of the current system? inquiring minds want to know.

hank, i think you're right: VJ doesn't really seem to be that well-informed, but he does seem angry about it.

These guys don't get enough credit...

Can someone tell me why this forum lets so many trolls have free reign?

Just wondering.

Ron Byers,

Have you ever compared our current national debt with our gross domestic product. The debt is massive but compared to our GDP it pails to insignificance.

Huh? U.S. GDP in 2005 was about $12.5 trillion. The U.S. national debt as of the end of 2005 was about $8.2 trillion. 8.2 is an "insignificant" fraction of 12.5, is it?

The real question is can we afford to continue with the current mess. The answer is no, not if we want our corporations to be competitive with the rest of the industrialized world. Set up a single payer system, (expanding medicare is a place to start) price it appropriately, and then adjust as necessary.

You're talking about adding a new expenditure to the federal budget that will cost hundreds of billions of dollars a year. Perhaps more than a trillion dollars. This would obviously pose an enormous risk of massively increasing the federal budget deficit and debt.

My understanding is that the deficit is about 3.3 percent of GDP which by historic standards is marginal. The total government debt is a very large percentage of GDP, but we don't have to pay that debt all at once. That is why it is a little misleading to say that the debt is 67% of GDP.

Here is a good summary of all the numbers.

http://citizenjoe.org/sub_tpl.php?sid=47

I am not saying that we shouldn't be fiscally responsible, but to say we can't afford to do things is simply chickenlittle talk.

I see my mistake. I should have said current deficit instead of current debt. I am sorry.

I just love this topic.

First, VJ is an idiot. Greenspan made sure the accounting of the surplus in the unified budget would mask the damage inflicted by the era's tax cuts. It was written into the deal. Greenie is first and foremost a partisan hack.

Hank and others: good work.

Some background: on numerous occasions prior to the '83 budget the SS fund went negative and had to be supplemented by the general fund. The '83 deal was to head off future funding shortfalls for both Medicare and SS retirement due to the demographic bulge of the boomers.

So, the gist of the deal: SS witholding (FICA and SECA taken from working class Americans) would be increased significantly to supplement the general fund for about 35-40 years. This allowed tax breaks be given that generally favored wealthier Americans during this period. When the boomers start to retire this would gradually be paid back from the general fund (funded by income tax)paid by future, wealthier Americans.

So, if the the deal works as we all have been thinking it will, the SS Trust Fund is akin to the bridge money used to transfer a tax burden from the wealthy of the 1983-2017 to the wealthy of 2017-2040.

Given who conceived all this (Greenspan et.al.) I am convinced the deal was never intended to be kept. I think it was intended to be the heist of the century.

Interesting point I first read about at Max Sawicky's: income tax will need to steadily grow from a smidgen more in 2017 to an amount sufficient to cover about 25% of SS payments in 2040. The end of the trust fund in 2041 poses an interesting conundrum: cut payments to the elderly (SS) by 25% and give income tax paying Americans a big tax cut. Or keep the status quo, keeping tax rates the same and SS intact.

To echo a point made above: anyone who seriously thinks supplying additional pre-funding to this situation is stupid beyond belief. Our political system is not remotely trustworthy enough.

And another point that many people do not understand: the '83 deal also slides retirement ages. I can retire when I am 66 and change.

GOP: The history of social welfare programs, and Medicare in particular, suggests that it is unlikely that the budget for publicly-funded single-payer universal health care would be balanced

The history of social welfare programs which have their own dedicated taxes (and hence can be separated out from the general fund) is that they're better balanced than the general fund.

So if deficits are your concern, perhaps we should eliminate the general fund and everything it pays for.

It's hilarious to keep seeing statements to the effect that Bush and the Republicans cannot be trusted to balance the budget, but also that adding a massive new entitlement program to that budget would not make the deficit any worse.

Of course that's silly. No matter what Bush and the current crop of Republicans would, in keeping with the Reagan tradition, run an irresponsible deficit.

Clearly the problem is with the current resident of 1600 Pennsylvania Ave and the majority in Congress. Since they can't seem to run anything responsibly, why should UHC be any different?

It is very much open to question whether "universal health insurance" would increase economic efficiency in America.

Of course, America is a magical place where the empirical evidence from dozens of other advanced countries doesn't apply.

Ron, first off, 3.3% isn't "marginal" by historic standards. second off, for reasons that have been addressed earlier by hank and myself, the actual general fund deficit is considerably higher: the social security trust fund surplus is masking the true scale of the deficit.

that said, the problem with the budget is taxes are too low, not aggregate spending too high: aggregate spending is around 20 - 21% of GDP, which is quite in the mid-range of modern history, whereas tax revenues haven't been this low (roughly 17.5% of GDP) in some 40+ years.

Meanwhile, gop is so deadset against universal health care that he invents a cost with literally no basis whatsoever! you gotta admire that....

howard,

GOP, nice of you to redefine the situation and all. yes, you can be as dubious as you want, but assuming that we follow the pattern of social security and medicare, there will be a dedicated tax.

I didn't "redefine" anything. I'm talking about the obvious danger single-payer universal health care would pose to the federal budget.

meanwhile, cognitive dissonance, to my way of thinking, consists of discovering something that no one has said: that there is any chance of universal health care occurring under bush. we're talking about achieving universal health care when there is a competent, honest administration in place.

The federal budget has been in deficit almost every year for at least the last half-century. It's been in deficit almost every year under both Democratic and Republican Presidents. It's been in deficit almost every year under both Democratic and Republican controlled congresses. In fact, for most of this period, the Democrats controlled congress, not the Republicans. I'm not sure what "competent, honest administration" is supposed to mean exactly, but the historical record indicates that neither party can be trusted to pass a balanced federal budget. Adding hundreds of billions of dollars in additional spending to that budget is likely to make the problem much worse.

My understanding is that the deficit is about 3.3 percent of GDP which by historic standards is marginal.

The on-budget deficit was 4.0% in 2005, 4.9% in 2004, and 5.0% in 2003. These are all very high by historical standards.

Someone else can perhaps explain whether the budget data includes "emergency" allocations for the current war.

http://www.whitehouse.gov/omb/budget/fy2007/pdf/hist.pdf

Howard, I agree with pretty much everything you have said, but when you compare the current deficit with the percentages run up by Regan and Bush I you have to agree that they are not all that bad. Of course when you compare the current war time deficits to WWII you have to admit that they are damn maginal. That last comment is to point out that things have been much worse. OK WWII was a major crisis that threatened America's very existence, but to hear GWB tell it, the current boggie men are just as bad as hitler and stalin.

The federal budget has been in deficit almost every year for at least the last half-century.

Key word: "almost".

We had unified budget surpluses from 1998-2001, and on-budget surpluses 1999-2000, with a very small on-budget deficit in 2001.

What makes that amazing is the administration which got those numbers inherited a $300 billion on-budget deficit.

Now tell us all about "bubbles" and the Republican Congress and continue to be predictable.

alex,

The history of social welfare programs which have their own dedicated taxes (and hence can be separated out from the general fund) is that they're better balanced than the general fund.

Medicare is currently the only federal health care program funded by a dedicated tax, and its economic prospects are dire, as the trustees' report demonstrates. Your faith that expanding Medicare to cover the entire population would not make the financial situation even more dire is interesting, but it's also totally irrational.

Of course, America is a magical place where the empirical evidence from dozens of other advanced countries doesn't apply.

Presumably, the "empirical evidence" you are referring to is evidence that "dozens of other advanced countries" with "universal health insurance" are more "economically efficient" than the U.S. If you think such evidence exists, produce it.

This is sort of an aside, but do you ever wonder if the current occupants of the White House ever have discussions like this one? I am sure previous Presidents and their advisors have had long, heated debates. But this administration do they think any deeper than getting reelected?

gop, make that 40 years, but so what: as BB points out, after 30+ years of budget deficits, we were doing fine with responsible leadership. we'd be on budget now if the bush/delay regime hadn't cut taxes so savagely, as i noted earlier.

as for universal health care, if we get it, it will almost certainly have a dedicated tax associated, so i don't know what you're fulminating about.

ron, wwii is a special situation. when we look at the history of budget deficits from johnson through bush 43, it's true that bush's numbers aren't quite as bad as during the worst of reagan and bush 41, but that's about it. that's why i object to your terminology.

gop, no, social security has a dedicated tax.

and the issue with medicare is, indeed, that the prospects are more problematic, but that's because health care costs rise faster than social insurance costs. we could take care of medicare in any number of ways: reducing coverage, eliminating the prescription drug benefit, or raising the dedicated tax. what we can't do is claim that right now, medicare is exceeding its revenues.

meanwhile, go ask the ceos of ford and gm about whether the american way of health insurance is more or less efficient than the rest of the world's.

here's the way we look at it: plenty of countries that are competing quite well with us economically have universal health care. no one wakes up in the middle of a night in a cold sweat in those countries, worried that a medical emergency will bankrupt them. no one worries about changing jobs because they will lose their health-care. corporations don't need to spend their time managing complex benefits programs. various health providers don't spend their time cost-shifting back and forth or investigating claims endlessly. the cost of carrying health insurance costs for the workforce isn't a cost of production. no one goes to the emergency room for routine treatments. no one lacks ready access to prenatal care or preventive medicine.

one could go on.

now, your turn: what is the basis for your claiming that the american system is more efficient than everyone else's?

BB,

We had unified budget surpluses from 1998-2001, and on-budget surpluses 1999-2000, with a very small on-budget deficit in 2001.

That's 4 years out of 50 in the last half-century. Why should anyone believe that adding a massive new federal budget expenditure--perhaps over a trillion dollars a year--would be more likely to follow the exception (surplus) rather than the rule (deficit)?

Oh, and remind me again: Which party controlled Congress in 1998 thru 2001?

its economic prospects are dire

Gee, I wonder why that is? Could it be because they let the system be at the mercy of prices set by their Pharma buddies?

Presumably, the "empirical evidence" you are referring to is evidence that "dozens of other advanced countries" with "universal health insurance" are more "economically efficient" than the U.S. If you think such evidence exists, produce it.

The evidence is well-established and you know it. Just another one of your goose chase trolls.

gop, stop waving around your "trillion" dollar line like it was gospel. you're just makin' it up.

so let's see: we had a republican congress and a dem president and responsibility, and a republican congress and a republican president, and irresponsiblity.

so what's your point?

ron, btw, no, they never sit around and talk about policy at the white house, as o'neill and diullo have told us.

Howard, point made and taken.

In my defense, I attended a lecture on this subject last week put on by some Republican talking head economist from Edward Jones. His point was "everything is good. The American economy is growing by leaps and bounds. Don't worry. Be happy."

That's 4 years out of 50 in the last half-century.

And it's 4 years out of the many billions the Earth has existed. Thank you for yet another one of your patented irrelevancies.

Why should anyone believe that adding a massive new federal budget expenditure--perhaps over a trillion dollars a year--would be more likely to follow the exception (surplus) rather than the rule (deficit)?

Well, if the current lot of borrow-and-spenders continue to rule the roost, you have a point. If we get back the adults that cared about fiscal discipline, we can manage it -- and certainly the economy as a whole will benefit from it.

Oh, and remind me again: Which party controlled Congress in 1998 thru 2001?

The same one that ran up $2.6 trillion in new debt since Bush took office.

And thanks for proving my prediction correct - you'd go for the standard "Republican Congress" move. So, what happened to all their brilliant fiscal discipline? Gonna blame Osama?

howard,

gop, make that 40 years,

Make what 40 years?

but so what: as BB points out, after 30+ years of budget deficits, we were doing fine with responsible leadership. we'd be on budget now if the bush/delay regime hadn't cut taxes so savagely, as i noted earlier.

The years 1998-2001 were a rare exception. The overall pattern has been deficits almost every year, under both Republican and Democratic administrations. Why should anyone believe that adding universal health care to the federal budget would not make the deficit problem even worse?

as for universal health care, if we get it, it will almost certainly have a dedicated tax associated,

Huh? So what if it would have a dedicated tax? Did you take a look at the trustees' report on Medicare?

gop, no, social security has a dedicated tax.

What do you mean, "no?" I didn't say that SS doesn't have a dedicated tax.

I'd love to play Beat the Troll some more, but sleep beckons.

Gnight, party people.

ron, it's off-topic, but when i hear people talking like the Edward Jones guy, i just want to scream.

here's reality: despite 18 quarters of growth, we've still only seen about 2M new jobs created under Bush, as opposed to 22M new jobs created under Clinton (and an amazing percentage of the jobs that have been created are either in housing-related fields or restaurants and bars). After-tax income as a percentage of total after-tax income for the top .1% of American households is up, meaning it's down for everyone else. Fewer people have health-care coverage at their jobs than 5 years ago (we're now down to below 60%). Household debt is at an all-time high, and although household net worth is at an all-time high, too, these two aren't distributed the same. Debt service costs are up. Gas prices are up. Headline inflation is up.

One could go on.

What we have is a distinct bifurcation, in which roughly 100,000 households are doing extremely well and everyone else, to one degree or another, is scufflin'.

sorry to go off on such a rant, but really: it's one thing for propaganda robots to talk that talk, but someone who works in the financial services industry should actually attempt to tell the truth.

gop, you're right: i missed your word "health" with your phrase about "dedicated tax," so sorry about that error.

as for the rest: i've already responded to your "dire" comments about medicare. Right now, medicare is in surplus. There are various choices to keep it in surplus, and we'll make one. That's the advantage (there are some disadvantages, of course) of a dedicated tax.

it's quite silly to talk about budget deficits without talking about the trendline of budget deficits. It's not just that we had a buncha bad years (and just to clarify for you: we didn't start running budget deficits in 1956, we started running them in the mid'60s, hence 40 years, not 50 years); we had some years where the situation got worse and a number of years where it got better.

Now yes, as long as the gop makes it impossible to raise taxes, we've got a problem with universal health care. but we've got an enormous problem with health-care now, a problem that you continue to choose to ignore in this discussion. That is a problem that can be addressed, and i have every confidence that a better adminstration than this one will be able to address it.

howard,

and the issue with medicare is, indeed, that the prospects are more problematic, but that's because health care costs rise faster than social insurance costs. we could take care of medicare in any number of ways: reducing coverage, eliminating the prescription drug benefit, or raising the dedicated tax. what we can't do is claim that right now, medicare is exceeding its revenues.

Ha ha ha ha! Yeah, and we "could" take care of any other government program that's in the red by reducing spending or increasing revenues. Why not wave your magic wand over the entire federal budget to bring it into balance?

The point is not what is theoretically possible, but what is likely to happen given historical precedent and current reality. The historical precedent is one deficit after another, and the current reality is that the largest federal health care program is headed for fiscal disaster. And you want to add billions or trillions in additional spending to an already-dire situation.

here's the way we look at it: plenty of countries that are competing quite well with us economically have universal health care.

And we're competing quite well with them, and have been doing so for a long time, which completely eviscerates the notion that universal health care (let alone single-payer univseral health care) is necessary for economic efficiency or competitiveness.

gop, stop waving around your "trillion" dollar line like it was gospel. you're just makin' it up.

Nonsense. If we were to adopt a single-payer national health care system, then based on the size of our economy the annual federal health care budget would almost certainly exceed a trillion dollars.

so let's see: we had a republican congress and a dem president and responsibility...

So you agree with me that the Republican Congress of 1998-2001 was "responsible?"

gop: try to pay attention here. i'm differentiating between programs supported by a guaranteed revenue source and those supported by general funds. it's not that complicated - we cannot simply run a medicare deficit. we have to make choices. like i say, there are downsides to guaranteed revenue streams, but that's the upside. so if you want to carry on about the overall budget, you go right ahead, but i'm not going to waste further time on that topic.

as for competing quite well, no, we aren't, as a matter of fact. if we were competing so frickin' well, we wouldn't be running the kind of trade deficit we are running. consumers around the world want to buy american popular culture, but they don't want to buy american cars, for instance: hell, even americans don't want to buy american cars. As i told you, go ask the ceos of ford and gm how well we're competing. it's quite silly to claim otherwise.

two can play at this game: it's total nonsense to claim that single-payer health care would cost $1T/year.

and really, i admit that i made a reading error on "health," but do you think that means you get a free pass for an error, too? i said that we had a republican congress and a dem president and responsibilty and a republican congress and a republican president and no responsibility, and you conclude that i'm congratulating republicans?

BB,

Well, if the current lot of borrow-and-spenders continue to rule the roost, you have a point.

No, the point is independent of particular congresses and administrations. The point is that under almost every congress and every administration of the past half-century or more, the budget has been in deficit. Adding a massive new spending item to that budget will likely make the deficit problem even worse. Much worse, in fact.

The same one that ran up $2.6 trillion in new debt since Bush took office.

What is the name of the political party that controlled congress during 1998-2001, the "leadership" that you consider "responsible." I'll give you a hint. It starts with the letter "R."

The GOP do a great job at running the government! They ran up surpluses - how awesome! Now that there's huge deficits? These things go in cycles!

Yeehaw!

howard,

as for the rest: i've already responded to your "dire" comments about medicare. Right now, medicare is in surplus. There are various choices to keep it in surplus, and we'll make one.

You don't know that. And adding massive new spending will make it even more difficult to keep federal health care spending in surplus.

it's quite silly to talk about budget deficits without talking about the trendline of budget deficits. It's not just that we had a buncha bad years (and just to clarify for you: we didn't start running budget deficits in 1956, we started running them in the mid'60s, hence 40 years, not 50 years); we had some years where the situation got worse and a number of years where it got better.

Yes, the deficit has fluctuated, and on very rare occasions it has become a surplus. But in almost all years we have run a deficit, and massive new spending will make that even more likely in the future.

Now yes, as long as the gop makes it impossible to raise taxes, we've got a problem with universal health care.

The GOP doesn't "make it impossible to raise taxes." If people want higher taxes they are perfectly capable of voting for representatives who will pass higher taxes. They don't seem to want that.

but we've got an enormous problem with health-care now, a problem that you continue to choose to ignore in this discussion.

I'm not discussing the alleged problem with health care. I'm discussing the very likely problem of massively ballooning deficits if national health care expenses are to be added to the federal budget.

Why should anyone believe that adding a massive new federal budget expenditure--perhaps over a trillion dollars a year--would be more likely to follow the exception (surplus) rather than the rule (deficit)?

Posted by: GOP on May 1, 2006 at 11:02 PM

Because that trillion dollar a year or more federal program would replace most of a massively inefficient system of private/corporate insurance and out-of-pocket expenses that currently costs the U.S. economy close to 2 trillion dollars.

howard:

gop, stop waving around your "trillion" dollar line like it was gospel. you're just makin' it up.

Multiply what Canada currently spends per capita on health care with the population of the U.S. See what you get.

howard,

as for competing quite well, no, we aren't, as a matter of fact. if we were competing so frickin' well, we wouldn't be running the kind of trade deficit we are running.

International trade is only one form of competition. The U.S. economy is much less dependent on international trade than are the economies of other countries.

I just looked at the Economist's latest set of international economic indicators. This year, the U.S. is forecast to have higher GDP growth than the Euro area (EU + EFTA), and Canada, and Japan, and Australia. Next year, the U.S. is expected to have higher GDP growth than all of the above except Australia. Unemployment is also lower in the U.S. than in all those competitors (unemployment in the Euro area is almost twice that of the U.S.). The U.S. is also doing very well in industrial production and retail sales.

This isn't unusual, of course. The U.S. is by far the strongest economy in the world only because it has a very long history of doing better economically than other countries.

So much for the claim that our lack of universal health care (let alone single-payer) makes us uncompetitive.

gop, it's impressive to see your ability to block out distracting information.

nonetheless, yes, i do know that we will make choices about medicare spending: it's inherent in the mechanism. i can't see how and why you would deny that.

now, let us deal with the deficit issue a touch more broadly: i am no fan of deficits in the 18th quarter of an expansion. i favor true keynesian counter-cyclical fiscal policy, so have no difficulties with short-term deficits (over a few years) in periods of recession and slow growth; i want surpluses when we have periods of strong growth.

but with that said, it's simply not true that the story of the past 40 years has been equal irresponsibility all the time, and the expense of a form of universal health care is not the reason not to do it as long as the benefits outweigh the costs.

The purpose of the United States, as the preamble to the constitution tells us, is "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity," not to keep the size of government at 20% GDP. For the reasons i outlined above, and a whole list of others, of course we're talking about the quality of health care here. Just because you can afford a $1M house doesn't mean you should buy a $1M house if it's not right for you, but that's a different decision than saying we can't afford the house. The evidence is that universal health care results in medical costs being a smaller percentage of gdp with no negative impacts on healthful outcomes.

So i don't deny that universal health care of some sort will call for higher taxes, which i think we need anyhow. The question instead is whether providing universal health care (and therefore establish justice and promote the general welfare) is too expensive. The obvious lesson from other countries is that it isn't, and we can afford universal health care at a higher level of taxes.

But i can be just as dismissive as you: if the voters want an unbalanced budget, they can have one. The foes of progressive taxation in america are skilled propagandists and well-funded, and they do have a bigger microphone, and so yes, the gop as currently constructed (where economic conservatives have now voice whatsoever), we can have no progress on taxes.

but this will not continue on forever. meantine, yes, as a matter of fact, i wouldn't want to make any progress on universal health care without a general improvement in the budget picture, which, again, means we have to wait for the post-bush era to even entertain any programmatic possibilities.

Because that trillion dollar a year or more federal program would replace most of a massively inefficient system of private/corporate insurance and out-of-pocket expenses that currently costs the U.S. economy close to 2 trillion dollars.

Huh? Even granting your tendentious description of the current health care system, so what? How does this imply that single-payer national health care would run a budget surplus?

howard,

nonetheless, yes, i do know that we will make choices about medicare spending: it's inherent in the mechanism. i can't see how and why you would deny that.

You have a habit of saying something and then pretending that you said something else when you are challenged on it. The statement of yours in question is: "There are various choices to keep it [Medicare] in surplus, and we'll make one."

How do you know we'll make a choice to keep Medicare in surplus?

GOP, because i'm running out of time, i'll just handle your economist cites in brief: the us economy has tremendous assets, but the distribution of the growth that we are experiencing, as i noted to ron above, is distinctly narrow. While a number of factors underlie this trend, declining american competitiveness is one of them: gradually, the median american household is slipping.

Meanwhile, you don't get to just write off international trade: it's the place where we see competitiveness in action. just because it's a smaller part of the american economy than it is of some countries doesn't mean that the market isn't telling us something important: we aren't making enough products at a price that is attracting enough buying. We are buying other country's manufactured products instead.

In Detroit, for instance, it is reckoned that we have a $2000/car health-care cost disadvantage to the Asian automakers who are eating our lunch. As competition from outsourcing extends into white-collar jobs, we will see some of the same problems.

As a side note, be sure to look at things like GDP per household, and you'll discover that the once huge gap between ourselves and the rest of the world has narrowed quite a bit (in fact, iirc, we might even be second to one of the scandinavian countries right now), so don't over-rely on the raw gdp alone.

tbrosz, i don't have all night. the first source i found gave me ontario per cap of $2,200 (http://www.fin.gov.on.ca/english/media/2005/bk10-ltr.html), so i'll use that as a proxy and canadian health care system as the proxy for the us (poor assumption, that, in my guess), and given that we have 300M americans (that's rounding up), we don't come to a trillion, do we?

next?

gop, for crissake, you were asking how do i know we'll keep medicare in surplus? that's what you were asking? good heavens: ok, i don't for sure. i know we'll make decisions to keep it out of deficit. odds are we'll overaim a touch and keep it in surplus. big frickin' deal if there's not a surplus - i had no idea that's what you cared about after all this.

bottom line, since i can't stick around: sure, universal health care will increase federal spending. it doesn't have to increase the federal deficit, and i at least have the entire history of social security and medicare to back me up (ok, before you start bitching and moaning, there have been some minor adjustments from the general fund in there - feel better?).

Meanwhile, although i didn't bring up the $1T - $2T comparison (although surely you were referencing my "tendentious" comments on american health care, which you are free to challenge any time), i think that gives us a proxy to begin to evaluate the positive impact on the economy.

howard,

two can play at this game: it's total nonsense to claim that single-payer health care would cost $1T/year.

How is it "total nonsense?" Our GDP is about $12.5 trillion a year. Even if single-payer health care massively reduced the fraction of GDP spent on health care to 10%, which isn't remotely likely, that's still well over a trillion dollars a year.

i said that we had a republican congress and a dem president and responsibilty and a republican congress and a republican president and no responsibility, and you conclude that i'm congratulating republicans?

You called the 1998-2001 Republican congress "responsible." That's a criticism?

howard,

GOP, because i'm running out of time, i'll just handle your economist cites in brief: the us economy has tremendous assets, but the distribution of the growth that we are experiencing, as i noted to ron above, is distinctly narrow.

I don't what "narrow distribution of economic growth" is supposed to mean. Are you saying that most of the growth is concentrated in a few sectors of our economy? Or what? And what does it matter if it is?

While a number of factors underlie this trend, declining american competitiveness is one of them: gradually, the median american household is slipping.

Again, I don't know what "the median american household is slipping" is supposed to mean. Median real household income in America has been rising since at least the late 1960s. There are short-term plateaus or even dips during periods of recession, but the overall trend is undeniably one of increasing income.

Meanwhile, you don't get to just write off international trade: it's the place where we see competitiveness in action. just because it's a smaller part of the american economy than it is of some countries doesn't mean that the market isn't telling us something important: we aren't making enough products at a price that is attracting enough buying. We are buying other country's manufactured products instead.

I didn't "write it off." I said it's much less important a component of our economy than it is of other nations' economies. Some economies are very export-driven and others less so. International trade is most beneficial for developing countries.

In Detroit, for instance, it is reckoned that we have a $2000/car health-care cost disadvantage to the Asian automakers who are eating our lunch.

Detroit's problems have less to do with health care costs than with the quality of its products in the marketplace. If American health care costs were prohibitively expensive to auto manufacturers, Toyota, Nissan, Mercedes, BMW, etc, would not be building factories in America and employing American workers.

As a side note, be sure to look at things like GDP per household, and you'll discover that the once huge gap between ourselves and the rest of the world has narrowed quite a bit (in fact, iirc, we might even be second to one of the scandinavian countries right now), so don't over-rely on the raw gdp alone.

Here is Wikipedia's list of countries ranked by per capita GDP at purchasing power parity. The U.S. is number three, behind the tiny financial principality of Luxembourg, and small oil-rich Norway. It is a testament to the enormous strength and vitality of the U.S. economy that a diverse country of 300 million people is able to maintain this position.

howard,

So i don't deny that universal health care of some sort will call for higher taxes, which i think we need anyhow. The question instead is whether providing universal health care (and therefore establish justice and promote the general welfare) is too expensive. The obvious lesson from other countries is that it isn't, and we can afford universal health care at a higher level of taxes.

No, the question I was discussing is not whether universal health care is "too expensive," but whether single-payer national health care would be fiscally responsible. For the reasons I have explained, it would most likely be very irresponsible. It would most likely dramatically increase the federal budget deficit.

The question of whether it would be "too expensive" isn't terribly meaningful absent some definition of standards by which its expense could be judged. And that's a whole separate issue.

But i can be just as dismissive as you: if the voters want an unbalanced budget, they can have one.

The basic problem is that voters tend to want incompatible things. They want expensive, high-quality public services, and they also want low taxes. When we attempt to resolve this incompatibility through the political process, the result is usually budget deficits. That's a very good reason to be extremely skeptical of claims that massive new public services will not increase the deficit.

meantine, yes, as a matter of fact, i wouldn't want to make any progress on universal health care without a general improvement in the budget picture, which, again, means we have to wait for the post-bush era to even entertain any programmatic possibilities.

The Bush era has not been exceptional in terms of the state of the federal budget. The average of deficits and surpluses is well within historical norms (despite the fact that we've been fighting a major war).

howard,

Allow me to clear this situation up for you.

You're arguing with the psychopathic Don P, who is posting under the handle GOP.

I think I'll search the Political Animal archives to find where Pale Rider tracked down Don P's place of employment.

That ought to shut that mentally ill son-of-a-bitch right the fuck up.

Social security is identified in the Universal Declaration of Human Rights of 1948:

"art. 22 — Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality."

[Just for thought]
Winston Churchill who described the social insurance principle as "bringing the miracle of averages to the rescue of the millions"

the 0.1 average bringing......

howard:

This source gives the 2005 per capita spending for Canada at about $3,000 (U.S.), which is getting damn close to a trillion. This is, of course, assuming we can do everything as cheaply as Canada does. As you point out, that's kind of a generous assumption.

The use of a trillion dollars--per year--as a good educated guess is not out of hand.

Bringing the Miracle of Averages to the Screwing of the millions -GWB

I think I'll search the Political Animal archives to find where Pale Rider tracked down Don P's place of employment.

My place of "employment" is my Mom's basement.

I am 57 years old.

Bicker bicker bicker.

Solution:

TAX THE RICH. NOW.

Make the rich pay for the war in Iraq. NOW.
Make the rich increase SS solvency. NOW.

TAX THE RICH. NOW.

I think I'll search the Political Animal archives to find where Pale Rider tracked down Don P's place of employment.

That ought to shut that mentally ill son-of-a-bitch right the fuck up.

http://www.washingtonmonthly.com/archives/individual/2005_12/007740.php#775189

Because that trillion dollar a year or more federal program would replace most of a massively inefficient system of private/corporate insurance and out-of-pocket expenses that currently costs the U.S. economy close to 2 trillion dollars.

Huh? Even granting your tendentious description of the current health care system, so what? How does this imply that single-payer national health care would run a budget surplus?

Posted by: GOP on May 2, 2006 at 12:07 A

Even someone as deliberately dense as you should realize that if a government program replaces something we are already spending money on, it is possible to design a taxation system that will fund it without damaging the economy. The money that is now going to the government, is being paid back out to cover health care and is no longer going to the insurance industry to be used for the same purpose.

There will be some adjustments and disruptions. Not everyone will be paying out the same amount, directly or indirectly, that they did before. Some will be paying less and others will be paying more. Who benefits from these changes and by how much are part of the policy decisions that would be made in designing the program. Also, the insurance industry would become significantly smaller and not all of those people would find work in the new federal beauracracy.

However, past and recent performance of Medicare and Medicaid, the VA system and the other nations that have universal health care show that all of them are more efficient in terms of care provided per total dollars spent than our current system. Thus the total amount that would need to be collected in new taxes would be less than the amount of health care spending it is replacing.

And that doesn't take into account the added flexibility and opportunities for growth that become available to the economy once health insurance is not tied to employment. Employers become more free to add workers without taking on a large added expense over and above wages or salaries. The choice of whether to employ people full-time or part-time or demand overtime becomes less distorted by whether each group is entitled to benefits. Employees are more free to move from one employer to another without worrying about gaps in coverage, exclusions for pre-existing conditions, etc. Employees are more free to go back to school or to take the risk of going into business for themselves.

There is one thing I'm curious about. How much of the higher cost of US health care might simply be driven by the fact that Americans are richer? Our health care costs more than Europeans', but then, so do our houses.

Trolls: please shut up, as I only desire responses from sane people.

How much of the higher cost of US health care might simply be driven by the fact that Americans are richer?

We spend fully 12 percent of our GDP on medical care. No decent country even gets in that ballpark.

Pretty much what tanj says. We've been all through this on more relevant posts, and since (as previously stated) we rank highest in per capita healthcare costs and about 23rd in general outcomes (all well documented and previously linked), unless the US is less capable than all the other Western economies, there are savings to be made. Whether doing this increases or decreases the budget deficit is a separate and political decision. They are not linked.

The fact that GOP is (I'll give him the benefit of the doubt) deliberately obtuse will not change any of these facts or possibilities. The opposition to universal health care is idealogically and not logically driven.

More to the point:
Trust funds? Both social security and medicare are paid out of government expenditure. It's good that we go through this exercise, but it doesn't mean anything.

Analogy: you work for GM. You have your pension invested in Enron shares and bonds. If it all goes to pot your pension is reduced or may disappear altogether. Doesn't matter what the actuaries say or what you've got in the trust fund. GM also can run a deficit every year as long as it grows faster than the debt. Over the long term that doesn't make the mangement competent.

Trade deficit: If the country (people, business and government) are net negative savers, they will run a net capital inflow (we sell assets)and/or trade deficit (people buy our debt). You can juggle everyrthing else all you like but that's the result. On a much grander scale the US is doing what post war UK suffered. How long can it go on? I don't know. Talk to the international bond traders. See what they think of the risks. But the less time the higher the price of oil and no action taken.

This administration is stupid, ignorant, greedy and corrupt.

Why are they subtracting CPI from wages if they are on real wages?

BB: 2004 was 16% of GDP I think, with admin costs at about 30-35% of this, compared to Medicare or Canada at 10-15%, I think.

Brooksfoe: excellent question and not easy to answer.

Japan and the more successful western economies are not so far away in median income. Given the US' huge L-curve in incomes makes us closer than you think. The difficulty comes in: 1) there are cultural differences in treatments and, yes, a relatively small number of US enjoy the best and most expensive care in the world: 2) universal healthcare economies do not have the poor that in the US put off treatment until it's an emergency and gets treated in the most expensive way, which leads to a further distortion in loss-making inner city emergency rooms being closed (nice, huh!).

I haven't yet found found research with a good comparison. As I understand it, GPs in trhe UK are paid about 100,000 pounds ($175,000) and manage their own budgets.

Trolls: In the UK and alsmost all other universal care countries, private medicine is practised alongside social medicine. YOu idiots always raise this canard. These countries are not Soviet states, but US ignoring its own poor and disenfrachised in the pursuit of profit is close to fascism.

I'm just using the expanded GDP data for 2005.

http://bea.gov/bea/dn/nipaweb/TableView.asp?SelectedTable=36&FirstYear=2001&LastYear=2005&Freq=Ann

It's interesting to see it's up almost a full percentage point since 2001.

I think I'll search the Political Animal archives to find where Pale Rider tracked down Don P's place of employment.

That ought to shut that mentally ill son-of-a-bitch right the fuck up.

http://www.washingtonmonthly.com/archives/individual/2005_12/007740.php#775189

Posted by: Helping Hand on May 2, 2006 at 2:07 AM | PERMALINK

And as always, the liberals imitate the chill wind of the politburo. No limitations on decency in the name of the cause or the people. Political intimidation, lies, abuse... its all good for the Left.

Live next to Communism. It'll bring home the glorious stupidity of 'for the cause'.

And as always, the liberals imitate the chill wind of the politburo.

Dealing with a disruptive troll is the same as being a totalitarian communist state?

Go back to your throne, drama queen.

BB:
the only time in 25 years that medical insurance inflation has been close to overall inflation (even under for one year) was when Clinton had started pushing his healthcare ideas. As he started to wind down ans when GW came in, the inflation and the insurance companies profits bounced right up.

The 16+% is all medical expenditure, medicair, medicaid, VA, insurance and private. As you probaly have experienced, insurance rates are rising faster.

McA: "No limitations on decency in the name of the cause or the people. Political intimidation, lies, abuse..."

Hang on, hang on! Whoa there! Isn't this the perfect description of the atmosphere the last 5 years? GW is a Communist. Who knew?

Brooksfoe: "Our health care costs more than Europeans', but then, so do our houses."

I don't think that is true, apples to apples, on the houses I mean. If you take the US national house averrage it is still relatively cheap, even with NYC, Boston, SF, Seattle, etc. Given population density, UK is for sure higher, Japan way higher in the South, and I'm sure you'd find the same throughout N. France, Benelux, Denmark, Germany. Of course, there are cultural differences and my experience would be their average houses are smaller, much.

GOP -

I'm pulling these figures from memory so they may be off but switching to all-Medicare could save America at least $160 billion/year. The overhead for Medicare is 2-3% but for the private sector, it's 12-14%.

The total annual spending on health care is about $1.6 trillion, so if there's a 10% reduction, we could save $160 billion.

Brooksfoe,

I had a look around as it was a good question. Haven't found anything great yet but try this:

www.who.int/docstore/bulletin/pdf/2000/issue6/bu0585.pdf

See page 775; that's page 6 of 9! Nice graphic. Compared to the others looks like the US invests in a lot of toys and sells a lot of drugs. UK looks like the scimpiest (or most efficient) in resources allocated. It is 9 years out of date but gives some good pointers for a short paper.

Steve J. I think the savings are much more than that just from overhead.

Both your figures seem low; where did you get them from? Usual insurance side estimate is 30+%; that's admin at the dotor and hospital end, plus admin at the insurance company end. Of course, if we don't need insurance companies we get get rid of all their costs. Including their own profit of, what now, 15+% and CEO pay? Think they won't fight like hell? They'll pay their pubby friends anything to prevent that.

Golfing holiday in Scotland? Mere bagatelle.

How does one reduce the assumed long-term interest rate when we seem to be entering an era when inflation threatens again? (Re-igniting inflation after the heroic fight of Volcker and Greenspan to kill it is one of the fine accomplishments of BushCo)

Mornin'.

The fact that 'hank', 'howard', and 'Nat' had to resort to name-calling when their substantive arsenals ran dry speaks volumes.
.

Like google!

R2K

I take it you're a boomer.

nope

McA, kindly limit your domestic policy fantasies to your own country. we're perfectly capable of handling our own affairs - thanks.

NOTTHERE:

I got the figures from press clippings. They may be out of date but the point I was reaching for is that going all Medicare would save America money.

"Liars figure and figures lie" Economics 101

Someone please explain to me at what point did it become necessary for the government to take care of my retirement? I don't want it, I don't need it, and I certainly don't trust the government with it (look at how these drunken sailors are spending the 'excess' money that we have in the 'trust fund' as an example). If I understand this correctly, the basic premise is that the government confiscates my money to put aside for my retirement. Then they spend the money, and tell me that the money that they have taken from me isn't going to be 'available' for me to use for my retirement and that I should have no problem making additional sacrifices to see to it that everyone can retire comfortably? What country do we live in? I would like to opt out of the program please. You can just keep the money that you have taken from me so far. Just let me keep my money now and I will take care of my own retirement at no expense to anyone else. Thank you.

Then they spend the money, and tell me that the money that they have taken from me isn't going to be 'available' for me to use for my retirement and that I should have no problem making additional sacrifices to see to it that everyone can retire comfortably?

not quite. the only people who are telling you that it won't be there are people, like yourself, who are opposed to the program in the first place.

Its amazing that for all the numbers, cogent reasoning, and patience demonstrated by many on this thread, it winds down with trolls claiming that all these thoughtful posters could do is resort to name calling! This behavior seems to sum up the the new century perfectly. I am incredibly saddened by the direction this country is headed when obtuseness constitutes an acceptible form of argument.

'VJ' posted:

"The fact that 'hank', 'howard', and 'Nat' had to resort to name-calling when their substantive arsenals ran dry speaks volumes."

False.

Your faith is touching, but this seems extremely unlikely.

And your dishonesty is not. In your first post, you agonized over the left's hope for a single payer system as being too expensive, using the Medicare report as your ammo. As Hank so astutely points out, your assumption is full of holes, so you revert to challenging our idealism as being trite.

You are right in a sense, Medicare will never be used as a single healthcare system for all Americans (insurance companies are not going away, at least not in our lifetimes), but a single payer system can allow the gov't to assume the risk for insurers, allowing patients to freely choose their insurance plan, but the premiums are paud out by the single-payer program.

Of course, we all know preserving the retirement benefits of millionaires long ago became for the Democrats what tax cuts for millionaires are for the Republicans.

So you're advocating that millionaires who pay into the system should receive no benefits? And they accuse liberals of class warfare! And you accuse liberals of being hyperbolic?

Anyone who pays into the SS system should be eligible to reap its benefits. The current system allows for those with additional income to have their benefits taxed, which sounds reasonable to me, as long as those taxes go directly into the SS fund.

Cleek,

Unfortunately, it is a fact that SS will not last much longer under the current system. It is a fact that the money that has been confiscated from me is not mine (Supreme Court tragically ruled that I have no property right to this money) and won't be used on my retirement. Unfortunately people like you want to argue the particulars of an immoral and flawed system instead of allowing people to be free to plan and execute their own retirement plans. Can you answer the basic question of why the government is responsible for anyone's retirement?

VJ, clueless fucking idiot, opined:

"By federal statute, the the monies collected from Social Security contributions can only be used for Social Security. (This is erroneous- the statute specifically provides that monies not used for current and near-future outlays are to be invested in Treasury obligations- the price of which goes into the general Treasury account- to be spent however Congress deems) Also by federal statute, any surplus which remains in the Social Security Trust Fund must be invested in U.S. Treasury Securities.

There are no "IOUs"." (As a clueless idiot, you argue against yourself. Special Treasury obligations to the Social Security Trust funds are part of the Treasury's debt- the general Treasury owes that amount of money to the Trust funds. The operative word is owe. This isn't rocket science.)

"'howard' posted:

"VJ, you're talking about something slighlty different than hank: the surplus is being "invested" in a special form of treasury paper, but like any bond, it is an IOU"

That's just it, it's NOT like any other bond, and it's most certainly not just an IOU. (The special Treasury obligations are unique only in that they are reserved for intra-Treasury transfers- from the general fund to the Trust Funds and vice-versa. Otherwise, they are, like other securities, merely promises to pay, That the promise is backed by the full faith and credit oif the US merely makes it a better promise but does not create a new category of financial instrument.)

A Social Security Trust Fund bond is the most privileged of Treasury bonds issued to Social Security by the U.S. Treasury, redeemable at any time at full face value (incorrect on two counts, see maturity dates shown below as well as discussion of interest rates), unlike any other bond that they issue.

"and from an accutning standpoint, what happens is that the money goes into the treasury paper and separate borrowing covers the expenditure that hank is talking about, but in the cash-flow world, dollars are fungible and are, in fact, being used for current expenditures."

Nope.

What you are suggesting would be a violation of the federal statute. (Nope. What he is describing is mandated by the federal statute-see below)"

"(d) It shall be the duty of the Managing Trustee to invest such portion of the Trust Funds as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under chapter 31 of title 31, United States Code[12], are hereby extended to authorize the issuance at par of public-debt obligations for purchase by the Trust Funds. Such obligations issued for purchase by the Trust Funds shall have maturities fixed with due regard for the needs of the Trust Funds and shall bear interest at a rate equal to the average market yield (computed by the Managing Trustee on the basis of market quotations as of the end of the calendar month next preceding the date of such issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of four years from the end of such calendar month; except that where such average market yield is not a multiple of one-eighth of 1 per centum, the rate of interest of such obligations shall be the multiple of one-eighth of 1 per centum nearest such market yield. Each obligation issued for purchase by the Trust Funds under this subsection shall be evidenced by a paper instrument in the form of a bond, note, or certificate of indebtedness issued by the Secretary of the Treasury setting forth the principal amount, date of maturity, and interest rate of the obligation, and stating on its face that the obligation shall be incontestable in the hands of the Trust Fund to which it is issued, that the obligation is supported by the full faith and credit of the United States, and that the United States is pledged to the payment of the obligation with respect to both principal and interest. The Managing Trustee may purchase other interest-bearing obligations of the United States or obligations guaranteed as to both principal and interest by the United States, on original issue or at the market price, only where he determines that the purchase of such other obligations is in the public interest.

(e) Any obligations acquired by the Trust Funds (except public-debt obligations issued exclusively to the Trust Funds) may be sold by the Managing Trustee at the market price, and such public-debt obligations may be redeemed at par plus accrued interest.

(f) The interest on, and the proceeds from the sale or redemption of, any obligations held in the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall be credited to and form a part of the Federal Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund, respectively. Payment from the general fund of the Treasury to either of the Trust Funds of any such interest or proceeds shall be in the form of paper checks drawn on such general fund to the order of such Trust Fund.[13]"

In short the Treasury owes the Trust Funds the amounts of the special obligations purchased by the Funds, plus interest, on the maturity date of those obligations. The purchase price of those obligations goes directly into the general fund of the US Treasury, along with monies from other revenue sources.

Anyone unaware of these simple facts should just kindly shut the fuck up.

Unfortunately, it is a fact that SS will not last much longer under the current system.

only if by "current system" you mean something like "every nuance and detail of the current tax law, spending climate and SS payout rates". minor tweaks to any of those will keep SS for as long as can be predicted.

Unfortunately people like you want to argue the particulars of an immoral and flawed system instead of allowing people to be free to plan and execute their own retirement plans.

hmmm. not ten minutes ago, i was on eTrade, fussing with my IRA. i wonder what law keeps you from doing something similar ?

Can you answer the basic question of why the government is responsible for anyone's retirement?

because, as a democracy, We, The People decided that's the way we want it. don't like it? move.

Why, thank you, Helping Hand!

Pale Rider outed Don P/GOP on the December 10, 2005 'Magic of Narnia' thread.

How about that!

Ron Byers wrote: "Let me see if I understand, the system isn't really broken, a minor tweak here or there will extend it well beyond 2040. What the f*** was Bush talking about?"

Destroying Social Security, basically, since none of his supposed "solutions," even had he bothered to actually put together a formal proposal, would have done a damn thing to actually address the supposed problem. That was the real key in the debate of last year, that the Bush administration itself had to admit that his privatization "solution" did nothing to restore Social Security's solvency.

Can you answer the basic question of why the government is responsible for anyone's retirement?

Can you read the Congressional Record?

Dipshit.

Oh, and remind me again: Which party controlled Congress in 1998 thru 2001?

Oh, and which party controlled both houses of Congress (not to mention the WH) in 2001 - 2006? But the budget increase is clearly the dems fault.

GOP, I applaud you're criticism of the national debt, but if you don't see the current administration (and its rubber stamp congress) as a major part of the problem, then there's no need to even discuss it.

Raising the retirement age is no solution. Half of the point of Social Security is to allow the elderly to retire safely and open up work to younger people.

Do you really want to force 70 year olds to keep a job? Does that really add any positive bvenefit to society? Let people have some hope of a pleasant retirement while they are still ambulatory. If anything, lower the age back down to 63 - forty years of work is plenty. No one should have to end their life as a Walmart greeter, dammit. This is America. We are better than that.

Remove the maximum income level subject to SS tax. Thats all you have to do to fix the system, AND lower overall taxation rate AND lower the retirment age. I don't care if the super rich wont see the benefits - this is a safety net for all those schmucks who worked their whole lives so the super-rich could further enrich themselves. Sure, a lot of them won't get that, because they never saw anyone they were standing on as they pulled themselves up "by their bootstraps" or with Daddy's trust fund.

Social security has the absurd distinction of the only major government benefit that doesn't help cycle the money back down from the rich to the poor. The poor and middle class pay, the rich don't (oh sure a pitance on their first 0.1% of income), to pay for poor and middle class elderly. Cycling the money back through makes the economy runs stronger, because it is the poor and middle classes that do almost all of the consumer spending that drives the economy. It all eventually trickles back up into the pockets of the wealthy anyway.

Lower the retirement age, get more young people into the workforce, give an obvious reward for people serving their country with four decades of work, remove the SS taxation cap, lower the overall rates, and the system is healthy for the next decade while it strengthens the economy.

Harry Crumb wrote: "Unfortunately, it is a fact that SS will not last much longer under the current system."

Not only is this not a "fact," it's not even remotely true. In the worst-case scenario, Social Security continues to pay out roughly 3/4 of its proposed benefit levels (a dollar figure that is higher than is currently paid today) to perpetuity, with no changes to the system. And in the best-case scenarios, Social Security is completely and fully funded to perpetuity, again with no changes to the system.

"It is a fact that the money that has been confiscated from me is not mine"

This is true of all tax revenues collected, regardless of which government entity they are collected by and what they are used for. Did you have a point to make?

"(Supreme Court tragically ruled that I have no property right to this money)"

No shit, Sherlock. Did you have a point to make?

"and won't be used on my retirement."

Yup, that's because it's being used for current retirees. And when you retire, other workers of the time will be funding your retirement. That's the way the system has worked for decades. Did you have a point to make?

"Unfortunately people like you want to argue the particulars of an immoral and flawed system instead of allowing people to be free to plan and execute their own retirement plans."

You are, of course, free to plan and execute your own retirement plan, as is everyone else in the U.S. Calling the current system "immoral" is just silly. And the thing that people like you ignore is that Social Security was passed for damn good reasons and that it has worked, and worked well, for decades.

"Can you answer the basic question of why the government is responsible for anyone's retirement?"

Sure. Just go back to the debate that took place when Social Security was first passed. And look at the economic changes that have taken place since.

Sorry, that should be "the systems is healthy for the next century".

Barring total collapse of the federal budget from republican policies of course. Then we will simply eat the elderly, and the social security trust fund can be spent on bar-b-q sauce...

Solar: great post.

Can you answer the basic question of why the government is responsible for anyone's retirement?

For the same reason a government is responsible for fighting a war, building roads and bridges, etc - for the common good of the people. If you don't like it, elect people who will abolish it. At the very least, I hope those people will be honest about their intentions, unlike the current cast of characters.

Noam Chomsky, in Imperial Ambitions, asks "Why does the mainstream media report George W. Bush's assertion that Social Security needs to be privatized, as 'Social Security Is In Crisis', when they could just as honestly report it as 'President Fabricates Myth of Social Security Crisis to Steer Business to Big Insurance Campaign Donors?'" And he is absolutely correct.

There is no Social Security "crisis". It's completely manufactured. By lifting the cap on the level of income subject to Social Security taxes or means-testing who receives SS benefits, the system could be solvent in perpetuity, with little or no pain to anyone other than the wealthy. And boo-hoo, isn't that just too bad, that rich people might have to (gasp) pay a little more in taxes?

Cleek,

We don't live in a democracy. And just because because, "as a democracy, We, The People decided that's the way we want it" doesn't make government theft of my money moral.

Obscure,

Why should I read the Congressional Record? Does the congressional record make the government stealing my money to give to someone else's retirement make it just? If you think that it is a moral function of government to do that, then you are an enemy to freedom and liberty. Dipshit? Good one.

PaulB,

Can YOU justify in simple terms why the government is in any way responsible for anyone's retirement? It doesn't pass the smell test. Can you justify how our government spends the "surplus?" When the money is in the hands of politicians, politicians can decide how to spend it. You may trust them to do the right thing with it, I do not. Why can I not opt out of Social Security and execute my own retirement plan?

Just go back to the debate that took place when Social Security was first passed. And look at the economic changes that have taken place since.

People overlook the power of a social safety net to encourage risk taking. Sure, it encourages some people to not take responsibility for their own retirement, but on balance more people will be apt to start their own businesses if the know they have a net that will protect them from being destitute in old age.

'Why can I not opt out of Social Security and execute my own retirement plan?'
--Harry Crumb

And why can I not "opt out" of paying for a $450 billion war machine and take my chances that Iraq is not going to invade the U.S.? (ha-ha)

Stephen,

I'll trade you. You withhold your portion of the defense budget, and I'll stop paying into social security. Sounds like a deal.

We don't live in a democracy. And just because because, "as a democracy, We, The People decided that's the way we want it" doesn't make government theft of my money moral.

then move. if you can't stand the tragically immoral results of democratic governing, move to a country like Somalia, where there's no government to speak of, and the ability of anyone to confiscate anything from anyone else is determined by the relative sizes of their guns. you can read all the Ayn Rand you like, surrounded by your precious property, in the safety of your bunker.

Why can I not opt out of Social Security and execute my own retirement plan?

Because in our country, the social contract says we all pay in in case something goes bad for one of us.

You're free to move to another country which won't make these "demands" upon you.

Harry Crumb wrote: "Can YOU justify in simple terms why the government is in any way responsible for anyone's retirement?"

Why yes, Harry, I can, just as I can justify in simple terms why the government is in any way responsible for such things as funding libraries, roads, research, national parks, defense, firemen, policemen, schools, and all the other myriad activities that the government deals with. I'm not going to bother, though, since it's quite clear that you are a fanatic whose mind is made up and with whom such a discussion would be a complete waste of time.

"It doesn't pass the smell test."

Whatever....

"Can you justify how our government spends the 'surplus?'"

Wow...talk about your non sequitur's. Now that your main points have been destroyed, you're going after strawman arguments that a) nobody here has raised and b) are completely and totally irrelevant. Nice....

"When the money is in the hands of politicians, politicians can decide how to spend it."

No shit, Sherlock. Did you have a point to make?

"You may trust them to do the right thing with it, I do not."

Nor do I, which is why I fought to prevent the Bush administration from mismanaging and destroying Social Security, a successful program in which the money is being well-spent and is "do[ing] the right thing."

Cleek and BB,

I don't want to move. I am just trying to stop folks like you from creating their socialist utopia that they have been dreaming of. While I despise the direction that our government is heading, I still believe that it is the best system on the planet. I have served and fought for it, have you? It was much better as originally devised in our Constitution. I, much like James Madison, "cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

I'll leave it to everyone else to play "whack-a-troll" this morning, but we have had a couple of otherwise reasonable sounding posters lob in the thought of raising SS revenue by removing the cap.

This, IMHO, is not only a bad idea, but a bad idea built upon a misunderstanding of how the program is funded. That would be not only understandable but excusable, BUT FOR the fact that this same misunderstanding also plays into the Republican-led BS campaign against the program as a whole.

So, repeat after me, the answer, should one be worried about the coming date when the SS bonds need to be converted into general debt, is NOT to raise SS taxes, but to raise taxes in general, thereby reducing overall debt.

While you are at it, you can feel free to raise the tax rates on, in order (i) capital gains, (ii) investment income, and (iii) the higher income brackets, if you are so inclined, as man on this board probably are.

I don't want to move. I am just trying to stop folks like you from creating their socialist utopia that they have been dreaming of.

If you're a hammer, the whole world's a nail, eh? Where exactly did I say or indicate in any way shape or form I desire a "socialist utopia"? And how SS is "socialist" is beyond me - it's an entitlement program. If it were socialist, everyone would get the same payouts at retirement, regardless of whether they put in a dime to the system or not.

While I despise the direction that our government is heading, I still believe that it is the best system on the planet.

Possibyly because you know very little about the rest of the planet. The US has good aspects and bad aspects, just like any nation, and how that meets with personal temperament is dependent on each individual.

I have served and fought for it, have you?

What does that have to do with anything? Only people who strap guns to their backs are allowed to participate in this democracy? Guess that rules out pretty much every Republican in Washington, then.

It was much better as originally devised in our Constitution. I, much like James Madison, "cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

Then I wonder why you'd support a party which raised the national debt by 46% over the past 5 years, after we were finally paring down the deficits and making government smaller.

I am just trying to stop folks like you from creating their socialist utopia that they have been dreaming of.

and i'm trying to stop folks like you from creating your Randian FantasyLand. see you at the polls.

Paul B,

You have certainly bought into the concept of the Nanny-State haven't you? No, of course you are "not going to bother" justifying any of the aforementioned items of benevolence because you believe that they are obvious functions of government. You can't. Have you ever read the Constitution? Where were all of the items that you feel that you could easily justify our Federal Government spending? Roads and Defense are the only two I see. If you want to call me a fanatic because I love liberty, I shall consider it a complement. I guess that I must then call you a slave.

Why should I read the Congressional Record? Does the congressional record make the government stealing my money to give to someone else's retirement make it just? If you think that it is a moral function of government to do that, then you are an enemy to freedom and liberty. Dipshit? Good one.

Harry Crumb,

You are proud of being ignorant of United States history? Proud of being ignorant of world history?

Look, I take back the insult. Sorry about that. But I ask that you grow up a little, educate yourself a little and try to bring something more to the table than an infantile selfishness which ignores history and the facts.

Government exists for a reason. Government derives legitimacy from the consent of the governed and by the blessings of history we are priviledged here to live under the protection of the US Constitution, which helps to make our government among the most legitimate in the world in spite of the current criminal administration.

Congress levies taxes lawfully. Try to understand that.

Social Security is the law. If you don't like it then support candidates for office who suit your beliefs. But if you cannot get them elected, too bad for you.

But, one more time: The government does not steal your money. The government levies taxes lawfully. The reason this is so is because civilization has a price.

Now go read a book or something rather than showing the world what an infant you are.

Harry Crumb wrote: [Well, a lot of nonsense, actually.]

Q.E.D. Thanks for confirming what we already knew about you, Harry. I think this concludes our discussion for the day.

Oh, and Harry? Good luck with the real world. I think you're going to need it.

"...and I'll stop paying into social security"

Can't. Stop. Laughing. Troll. Pretending. Gainful. Employment.

I think most here are forgetting that social security is more than a retirement system. 40% of the recipients today are widows/widowers, children and disabled people younger than 60. If we didn't have social security where would those people be? This country would look more like the depression years without social security.

This last little back and forth actually illustrates, quite nicely, a big problem in current U.S. politics. That problem is that sophisticated policy questions are now deemed suitable for discussion via Rush Limbaugh.

You know, when I was a little kid, I actually thought that banks kept everyone's money in a big vault. Then, I suppose when I was a teen, I started actually paying attention to those depression-era documentaries -- you know, the ones showing the long lines with the "runs" on the banks? Shortly after that, I learned that no bank could survive if all, or even a majority or significant portion, of its depositors simultaneously demanded a withdrawal.

Then, certain plot points of "Its a Wonderful Life" began to make sense. As does the need for the FDIC.

Its probably fair to say some significant portion of the population has never thought about this in any detail.

To ask that same portion of the population to understand BOTH the concepts of annuity funding and government finance is probably asking a bit much.

But, now that any issue is fodder for cable news discussion, we'll just have to all become educators.

Roads and Defense are the only two I see. If you want to call me a fanatic because I love liberty, I shall consider it a complement. I guess that I must then call you a slave.

Is there a country in the world whose government only deals with roads and defense? If so, how is that country doing?

And if it works so well in theory, how come no one's rushing to create such a government?

Well, BB, as Crumb has clearly not even bothered to actually read the Constitution (how about the specific legislative branch authority to secure the "general welfare"?), I would not worry too much about broadening the argument to include comparisons with other governments.

I would not worry too much about broadening the argument to include comparisons with other governments.

So-called "libertarians" (also known as "paranoid avaricious basement-dwellers") is that their ideas are always perfect because they never get tested in reality.

solar,

Thanks for substantiating my points.
.

VJ, the only point you have is on your head. Other than that, your claim to fame is merely illiteracy and dishonesty (which, to be brutally frank, is a dime a dozen amongst your species).

What is the precise psychopathology of a troll like you who posts on the internet for the sole purpose of establishing that you cannot read? Really, we would take your word for it- there is no need to prove it over and over again.

'VJ' posted:

"Thanks for substantiating my points."

False.

Obscure,

Thanks for the kind advice. However, please allow me to counter some of your criticism - First, I must agree that governments do exist for a reason. Our government exists for reasons set forth in our founding documents, specifically to secure our inalienable rights to life, liberty, and pursuit of happiness (broadly accepted as right to personal property ownership). When governments become destructive of these ends (securing life, liberty, pursuit of happiness), it is the right of the people to alter or abolish it. So, while you feel that the government exists for other reasons, our founding documents states that it exists for only one purpose. While you are certainly correct (for once) that it is lawful to force me to pay social security, it doesn’t make it moral. It used to be legal to own slaves, but it was never moral. You seem so adamant education and my lack of it, yet you argue as if you have spent your entire life listening to some socialist college professor tell you about how wonderful it is to let the anointed experts implement their expert opinions. History and economics shows that individuals’ “selfishness” is what makes our market economy work and has allowed this country to thrive.

BB,

Thank heavens for world travelers such as yourself. No one who disagrees with your liberal tripe could possibly have traveled the rest of the planet, right? That is typical liberal bilge – anointing yourself smarter and more educated than anyone else, making rules. You no longer merit rebuttal at any level.

Hank,

General Welfare? You would make a good politician, using the term general welfare and the interstate commerce clause to justify literally ANYTHING. And you say I haven’t read the Constitution – Are you kidding me?

James Madison, the father of the constitution, wrote - "If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions." - James Madison, Letter to Edmund Pendleton, January 21, 1792 _Madison_ 1865, I, page 546

He also wrote "With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators." - James Madison, Letter to James Robertson, April 20, 1831 _Madison_ 1865, IV, pages 171-172

Thomas Jefferson, another author of one of our founding documents wrote "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."

So, yes, I am sure you are all well schooled and educated in the Constitution and your romantic notions of what it means, or what you heard it means, but it is you and your little buddies who are ignorant.

Thank heavens for world travelers such as yourself. No one who disagrees with your liberal tripe could possibly have traveled the rest of the planet, right? That is typical liberal bilge – anointing yourself smarter and more educated than anyone else, making rules. You no longer merit rebuttal at any level.

Hmm - lots of insults, no answer to the question of whether you've actually left the country or lived outside of it (military service doesn't count).

BTW, I am more educated and smarter than you personally, but that's neither here nor there.

Now please tell us about all your travels and living abroad experience such that you can objectively compare the United States to other countries.

I hear the crickets coming.

Socialist commie liberal cesspool free market thrive freedom freedom freedom bilge ilk freedom God Bless!

Jason,

Where were you the day that the government was assigning where you must live? Did you luck out and not get stationed in a city by the sea, below sea level (where it was guaranteed that a major hurricane would eventually hit)? I was one of the lucky ones and was assigned to live in an area that doesn't suffer the effects of hurricanes. It must have been Providence. I am glad for the federal government to take my money and give it to the poor unlucky folks who were assigned New Orleans and the entire Gulf Coast. Then again, if I lived in New Orleans, I probably would have left before the hurricane hit. But that is just me trying to be responsible for my own actions again.

let's go back the laws as they stood in 1800, cause those Founding Fathers got it all 100% correct, down to the last letter. ah good old 1800, when women and blacks couldn't vote - just as it was intended.

that is just me trying to be responsible for my own actions again.

Ah, yes. You're very responsible. When asked to explain to us how you can tell the US is the best country in the world, so we'd like to hear your travel and living abroad experience, you basically reply "Piss off".

That's a wonderful example of taking responsibility for yourself. Thanks for the demonstration.

Harry, as anyone who is at all conversant with the literature can see, parrots the garbage put forth by those militia/freemen/anti-tax obscurantists whose only goals in life are to cheat the government out of taxes (and that means, of course, to cheat their fellow citizens) and to obtain as much for free as is possible by 1)cheating other people in business 2)various and sundry shady dealings 3)the aforementioned tax fraud and 4) welfare fraud of one kind or another.

Harry and his hairy ilk are utterly ignorant of Constitutional law. Their argument can be reduced to "the only lawful laws are those I agree with". Scholars they ain't- just proponents of the endlessly circular bankrupt proposition that everything they disagree with is unconstitutional (chiefly the income tax, but pretty much anything having to do with a modern society). They are one child-bride short of David Koresh territory and that's not always true either.

Well I guess I'm a Hamiltonian at heart. One would think that if Crumb felt so strongly about this he would stop wasting time posting on this thread and bring an action to have Social Security declared unconsitutional. That argument went down in flames in 1937, but perhaps he would have better luck now.

Its kind of intersting, though, to read this stuff. Do any of the regulars here log on to conservative sites and argue Marx and Lenin or something?

Harry Crumb wrote: "You no longer merit rebuttal at any level."

Oh, the irony....

Our government exists for reasons set forth in our founding documents, specifically to secure our inalienable rights to life, liberty, and pursuit of happiness ...our founding documents states that it exists for only one purpose

'Kay, Harry.

Why don't you go read the preamble to the US Constitution. The reasons for government--our government--are listed right there in the preamble. Imagine that!

While you are certainly correct (for once) that it is lawful to force me to pay social security, it doesn’t make it moral.

Harry, this may take some time--in your case I'd guess anywhere from 2-15 years--but if you put your mind to it you will eventually figure out that....

Morality is a matter of opinion.

You will also eventually come to see that....

Your opinion is no more or less important than anyone else's.

Wow!

solar,

You continue to reinforce my earlier posts.

Keep up the good work.
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'cleek' posted:

"let's go back the laws as they stood in 1800, cause those Founding Fathers got it all 100% correct, down to the last letter. ah good old 1800, when women and blacks couldn't vote - just as it was intended."

And only white men with land could vote. Reminiscent of the Republicans when they claimed that the Boy Emperor Clown Criminal won more counties than Gore did.

Just amazing how much the Taliban wing of the Republican party shares with David Duke.
.

VJ, obscure, Paul, Hank, solar,

You guys are awesome. So smart, so traveled, so confident in your views, your arguments so logical and packed with information. You guys are a credit to your ethos: morally bankrupt, intellectually inferior, and when all else fails - yell louder and call people names. Is it any wonder why modern liberalism has failed so utterly where ever it has been tried? I now see why you want so desperately to keep kids in government run schools - you have to keep them ignorant and indoctrinated in order to keep your constituency. Keep up the good work guys.

Is it any wonder why modern liberalism has failed so utterly where ever it has been tried?

It has?

Where has libertarianism been tried? Can't fail if you don't try.

VJ wrote to solar:

You continue to reinforce my earlier posts.

VJ, you're out to lunch, bud.

And cleek was being sarcastic. 'Kay?

Well Crummy, it really isn't difficult to be more intelligent than you are- I have potted plants that beat you in the IQ department.

While you cower down in your parents' basement (oh sorry, "Der Fuehrer's bunker" as you insist it be called)the rest of us are out in the world, making money, paying taxes, and not living on food stamps and unemployment checks (who's our little welfare cheat, Crummy?). Poisoned with envy, you blame your failure as a man on evil liberals' misinterpretation of the Constitution.

What a dolt. Looking for intellectually inferior? Borrow a mirror.

P.S. wherever- use it

VJ- still shockingly illiterate- apparently invincibly ignorant as well.

'obscure' posted:

"VJ, you're out to lunch, bud."

Actually, I just finished dinner. Delish.

.

"And cleek was being sarcastic. 'Kay?"

Ah, yeah. You just noticed ?
.

solar,

Please. You're doing such a fantastic job of backing me up, people are going to think your on the payroll.
.

Dear little Harry, digging that hole deeper and deeper, writes: "You guys are awesome."

Why thank you, dear. I do so wish I could return the compliment. Alas, I cannot.

"So smart, so traveled, so confident in your views,"

Why yes, dear heart, how nice of you to notice. And here we thought you weren't paying attention. Silly us.

"your arguments so logical and packed with information."

Yes, dear, they are. Did you have a point to make? It does get a little tiresome pointing out your little errors over and over again, but that's a service we are happy to provide. Do try to keep up, won't you?

"You guys are a credit to your ethos:"

Yes, dear, we are.

"morally bankrupt,"

No, dear, we aren't. I don't think you understand the term. Would you like me to define it for you?

"intellectually inferior,"

ROFL.... To whom, dear?

"and when all else fails - yell louder and call people names."

Just following your example, dear. Do you really find it so difficult to be on the receiving end for a change? Tsk, tsk....

"Is it any wonder why modern liberalism has failed so utterly where ever it has been tried?"

Really? Gee, I seem to be living in the United States and everywhere around me I see the success of "modern liberalism." What planet do you live on, dear?

"I now see why you want so desperately to keep kids in government run schools - you have to keep them ignorant and indoctrinated in order to keep your constituency."

No, dear. We simply want to live in the real world. Do feel free to join us one of these days, won't you? I know it's scary out here but once you get past the boogeymen, it's really quite nice.

"Keep up the good work guys."

Thanks, dear; we shall. TTFN.

"your on the payroll"

My "on the payroll" what?

It's hard out there being an illiterate, isn't it VJ?