Would the GOP types push the USA into default ?

[bugwar]

Customer: I'd like to withdraw 50$ from my savings account please.

Banker: Ok, let's just check here.... Oh, I'm sorry - you'll just have to get by with 25$ instead. We've reduced our expenditures, you see.

Customer: Umm, that's not how this works. I've been making deposits out of every paycheck. I signed this contract here that shows that in exchange for me letting you have temporary use of my money, you will keep it safe for me until the day I want to withdraw it.

Banker: Yes, of course - but now kids are in charge of things, and they don't like the promises their parents made. So screw you.

Interesting story you tell there. Let me tell one of my own:

“According to the institute’s data, a two-earner couple receiving an average wage — $44,600 per spouse in 2012 dollars — and turning 65 in 2010 would have paid $722,000 into Social Security and Medicare and can be expected to take out $966,000 in benefits.
So, this couple will be paid about one-third more in benefits than they paid in taxes.
...
In wonk-speak, the figure he’s referring to is the "closed-group unfunded obligation estimate for the Social Security program."
In layman’s terms, it’s the inflation-adjusted dollar value of benefits paid — beyond the participants’ tax payments — for all past and current beneficiaries by the time of their death.

According to this calculation, past and current generations will pay $71.3 trillion in payroll taxes but will receive $93.4 trillion in benefits.
Adjusting for past and future transfers from the federal Treasury, the difference between "paid-in" and "paid-out" works out to $21.6 trillion.”

Source: http://www.politifact.com/truth-o-m...re-and-social-security-what-you-paid-what-yo/

 

[peter grimes]

...and your point is?

 

[bugwar]

...and your point is?

They get a lot more in benefits than they paid in themselves. So I am fairly certain that your banking story is invalid.

 

[peter grimes]

No, it's not at all invalid. You were claiming that you have every right to take grandma's money for her trip and NOT pay it back to her. I framed it in a different light so you'd understand why I think that's an awful idea.

As for your politifact, well, that's why we should tinker with some of the social security formulas. Simply removing the salary cap solves almost half the projected shortfall, if I recall correctly.

 

[El_Machinae]

For democrats, you have expressed their dogma well.
At least until your financiers cut you off, as Greece found out.

For fiscal realists though, balancing the budget is the self-discipline used to keep the creditors from enforcing reality checks on your spending.

Yeah, I'm not disagreeing that there's an upper limit beyond which people won't lend. This, coupled with entrenched entitlements, is a recipe for disaster. But there still remains the correct and incorrect way of balancing a budget (even the article you linked highlights Medicare as the biggest threat). The family analogy always breaks down, but counter-acting deficit spending trends still has to keep an eye on what's gonna happen with the interest rates. The current trend is to destabilize the credit rating while trying to cut the budget. I don't know if that's all that wise.

Don't get me wrong, I know the endgoal is to avert a creditor crisis. It would suck if the current interest costs significantly expanded.

 

[bugwar]

No, it's not at all invalid. You were claiming that you have every right to take grandma's money for her trip and NOT pay it back to her.

Nope. As I recall, you are the one stating that.

I wrote that she would have to live with reduced benefits.
And since she only paid in two thirds of what I had been giving her back, she could learn to live with a bit less of a profit.

 

[peter grimes]

Nope. As I recall, you are the one stating that.

I wrote that she would have to live with reduced benefits.
And since she only paid in two thirds of what I had been giving her back, she could learn to live with a bit less of a profit.

If you have a deficit between expenses and income, reduce spending till you don't.
That is a very fiscally responsible course of action. If you can't figure out how to do that, get a financial counselor to help you.

As for the 'raise' you postulate, that is a personal choice.
If you want to keep spending more than you earn and wish to take on the strings attached to the 'easily obtained' raise to pay the bills, more luck to you.

Me, I am happy to just spend less than I make and enjoy life. Simple and a lot less stressful.

Oh, and if your mother in law is still whining because you are cutting back on expenses, tell her to earn her own trips, and leave you to your life.
She wants a free ride, she can find another patron if she is in a hurry to vacation abroad.

Well in that case, grandma is in for quite a shock. She will just have to learn to work with reduced entitlements.

I think I interpret your posts differently than you do.

 

[El_Machinae]

I'm actually with bugwar, the entitlements were over-promised.

 

[peter grimes]

I'm actually with bugwar, the entitlements were over-promised.

I'm not saying they weren't - but it's not as if they're overpromised by a crazy amount. It's basically inflation +2%, if I read that politifact right.

Do you think that social security benefits should be restricted, or would you be OK with a revision of the formula for collecting the funds in the first place? I'm in favor of the second option, against the first. Unless you're wealthy in the US, you're getting hit hard at just about every turn. A major failing of the current social security tax is that it doesn't continue to rise with income above $115,000. In other words, if you earn $500,000 you don't have to pay more into Social Security than someone earning $100,000.

I don't think that's fair, and it's an easy fix.

 

[JollyRoger]

But we would rather breach a promise with We the People rather than the Chinese.

 

[bhsup]

I'm not saying they weren't - but it's not as if they're overpromised by a crazy amount. It's basically inflation +2%, if I read that politifact right.

Do you think that social security benefits should be restricted, or would you be OK with a revision of the formula for collecting the funds in the first place? I'm in favor of the second option, against the first. Unless you're wealthy in the US, you're getting hit hard at just about every turn. A major failing of the current social security tax is that it doesn't continue to rise with income above $115,000. In other words, if you earn $500,000 you don't have to pay more into Social Security than someone earning $100,000.

I don't think that's fair, and it's an easy fix.

I honestly don't know the answer to this, but do they calculate benefits based on earnings over 110K, or do benefit calculations cap there as well?

 

[Cutlass]

If you have a deficit between expenses and income, reduce spending till you don't.
That is a very fiscally responsible course of action. If you can't figure out how to do that, get a financial counselor to help you.

As for the 'raise' you postulate, that is a personal choice.
If you want to keep spending more than you earn and wish to take on the strings attached to the 'easily obtained' raise to pay the bills, more luck to you.

Me, I am happy to just spend less than I make and enjoy life. Simple and a lot less stressful.

Oh, and if your mother in law is still whining because you are cutting back on expenses, tell her to earn her own trips, and leave you to your life.
She wants a free ride, she can find another patron if she is in a hurry to vacation abroad.

So then why are Republicans always looking to cut income instead?

 

[Cutlass]

I'm actually with bugwar, the entitlements were over-promised.

They aren't really enough to live on. So they weren't promised enough.

The only exception is healthcare. Which is out of control for other reasons.

 

[bugwar]

I think I interpret your posts differently than you do.

Thank you for bringing that up.
I am glad to see that you neglected to change the conditions till after I posted that. Good use of ex post facto.

 

[El_Machinae]

The article specifies that Social Security is not actually the problem. That said, I think it's perfectly fair to start phasing in a delay on the collection date in order to reduce taxes. It was brought in when "things were different" The median wage (i.e., what people make) was coupled to GDP growth. The life expectancy (1934) for people in their late fifties was ~6 years less than it is now. It needs to be rejigged, but not all that seriously.

It's the Medicare that's the issue. Firstly, we should remember that wages have decoupled from growth, so it's actually somewhat okay to tap alternative revenues to pay out Medicare. But, its growth rate is out of control. The low-hanging fruit is likely Medicare D (paying full, non-negotiated pharmaceutical prices), but there will have to be more aggressive negotiations all around in order for a supplier to qualify for Medicare. Now, I've always been a proponent of increased medical research and healthy living; my thesis is that the only acceptable outcome is affordable cures, it's the only thing I see eventually stabilizing the healthcare crisis. Until then, there will be the constant problem that disabled life expectancy is rising faster than total life expectancy.

It's a political hot potato, as 'death panels' and 'pushing granny off of a cliff' mantras will tell you. But, it can either be resolved proactively, or through a manufactured crisis, or through a real crisis.

 

[bugwar]

I'm not saying they weren't - but it's not as if they're overpromised by a crazy amount. It's basically inflation +2%, if I read that politifact right.

Do you think that social security benefits should be restricted, or would you be OK with a revision of the formula for collecting the funds in the first place? I'm in favor of the second option, against the first. Unless you're wealthy in the US, you're getting hit hard at just about every turn. A major failing of the current social security tax is that it doesn't continue to rise with income above $115,000. In other words, if you earn $500,000 you don't have to pay more into Social Security than someone earning $100,000.

I don't think that's fair, and it's an easy fix.

Yep, if you like raising taxes to pay for entitlements.

 

[JollyRoger]

Taking a raise to keep your promises does seem fiscally responsible, does it not?

 

[bugwar]

Taking a raise to keep your promises does seem fiscally responsible, does it not?

Didn't make the promise, now did I?

 

[Cutlass]

Yep, if you like raising taxes to pay for entitlements.

Which is what always happens. It is exactly the normal thing to do.

 

[JollyRoger]

Didn't make the promise, now did I?

What the hell do you think the consideration was for payroll deductions?