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BOO!!! - And Fucking BRAVO !!! - A Shit Of A WaPo Editorial, And One HELL Of A Response...
Social Security proposals are wrongheadedWaPo Editorial Board
11/17/13
<snip>
PRESIDENT OBAMA and the Republicans never have struck a “grand bargain” on spending and taxes. Nor does it appear likely that the current budget bargaining between Democratic and GOP negotiators in Congress, who met inconclusively again on Wednesday, will produce one. They may fail to achieve even a small bargain. Even so, Mr. Obama faces rising pressure from the left flank of his party to defend entitlement programs tooth and nail. That pressure comes although such programs represent the lion’s share of federal expenditure growth in the coming decades. ?
In recent days, those styling themselves “bold progressives” have been rallying support for a bill sponsored by Sen. Tom Harkin (Iowa) and Rep. Linda Sanchez (Calif.), both Democrats, that would increase Social Security benefits. Supporters tout it as courageous pushback against austerity; in fact, it’s a case study in how not to redefine liberalism for the 21st century.
The Harkin-Sanchez proposal would change Social Security benefit formulas to produce an average increase of $60 per month, plus a more generous annual inflation adjustment, than the program uses now. It also would extend the life of the notional trust fund from which benefits are drawn by 16 years. To pay for this, the bill would subject all wage and salary income to the 12.4 percent Social Security payroll tax, as opposed to only drawing from income up to $113,700 as is presently done. For someone earning $200,000 per year, this would mean a tax increase of more than $4,000 per year. For someone earning $1?million, the tax increase would be $58,700.
It’s a massive transfer of income from upper-income Americans to the retired. A tax increase is not, in itself, objectionable. Revenue is necessary to pay the costs of an aging society, and it should be raised progressively. With respect to Social Security specifically, the percentage of wage and salary earnings subject to the tax has shrunk in recent years, and there’s an argument for correcting that.
Yet even the rich have finite resources...
<snip>
More: http://www.washingtonpost.com/opinions/social-security-proposals-are-wrongheaded/2013/11/17/38ebb486-4bde-11e3-ac54-aa84301ced81_story.html
The Very 1st Response:
Dryly 41
11/18/2013 8:04 AM PST
On December 7, 1941 the Japanese Empire attacked U.S. naval and air bases at Pearl Harbor. Thereafter sixteen million young men wore the uniform, and, after 3 years and 8 months secured the unconditional surrender of Italy, Germany, and, Japan, Then, except for 405,399, they came home, went to school of the G.I. Bill or got jobs and entered into delayed marriages. The delayed marriages created the "demographic bubble" known as the Baby Boom generation and the children of WW II vets began to turn 65 in 2011.
In 1946 the Gross Federal Debt amounted to 121.7% of GDP. the Truman administration reduced it to 71.4% of GDP; Eisenhower to 55.2%; Kennedy/Johnson to 38.6%; Nixon/Ford to 35.8%; and, Carter to 32.5%.
Then came Ronald Reagan with massive "supply side" tax cuts primarily for the wealthy and budget deficits in each of eight years increasing the Gross Federal Debt from 32.5% to 53.1% of GDP. Bush I had four more years of budget deficits increasing the debt to 66.1%.
Clinton raised taxes, had 4% unemployment, balanced budgets and reduced the debt to 56.4%.
Bush II instituted two rounds of "supply side" tax cuts in 2001 and 2003, had eight more years of deficits and increased the Gross Federal Debt from 56.4% of GDP to 85.1% with a crippled economy.
In 1983 Reagan signed a regressive FICA payroll increase so as to create a surplus in the Social Security Trust Fund which has a $2.6 trillion dollar reserve as of December 2012.
Social Security did not contribute one thin dime to the massive Federal Debt.
This massive Federal Debt was caused by borrowing all these trillions to fund "supply side" tax cuts for the wealthiest citizens most able to pay taxes.
The massive Federal Debt was not for any great national purpose such as the Revolutionary War, the Civil War, WW I, or, WW II. It was for "supply side" tax cuts for the wealthy.
Start with eliminating "supply side" economics and return to traditional Republican tax and fiscal policy.
Do this first.
11/18/2013 8:04 AM PST
On December 7, 1941 the Japanese Empire attacked U.S. naval and air bases at Pearl Harbor. Thereafter sixteen million young men wore the uniform, and, after 3 years and 8 months secured the unconditional surrender of Italy, Germany, and, Japan, Then, except for 405,399, they came home, went to school of the G.I. Bill or got jobs and entered into delayed marriages. The delayed marriages created the "demographic bubble" known as the Baby Boom generation and the children of WW II vets began to turn 65 in 2011.
In 1946 the Gross Federal Debt amounted to 121.7% of GDP. the Truman administration reduced it to 71.4% of GDP; Eisenhower to 55.2%; Kennedy/Johnson to 38.6%; Nixon/Ford to 35.8%; and, Carter to 32.5%.
Then came Ronald Reagan with massive "supply side" tax cuts primarily for the wealthy and budget deficits in each of eight years increasing the Gross Federal Debt from 32.5% to 53.1% of GDP. Bush I had four more years of budget deficits increasing the debt to 66.1%.
Clinton raised taxes, had 4% unemployment, balanced budgets and reduced the debt to 56.4%.
Bush II instituted two rounds of "supply side" tax cuts in 2001 and 2003, had eight more years of deficits and increased the Gross Federal Debt from 56.4% of GDP to 85.1% with a crippled economy.
In 1983 Reagan signed a regressive FICA payroll increase so as to create a surplus in the Social Security Trust Fund which has a $2.6 trillion dollar reserve as of December 2012.
Social Security did not contribute one thin dime to the massive Federal Debt.
This massive Federal Debt was caused by borrowing all these trillions to fund "supply side" tax cuts for the wealthiest citizens most able to pay taxes.
The massive Federal Debt was not for any great national purpose such as the Revolutionary War, the Civil War, WW I, or, WW II. It was for "supply side" tax cuts for the wealthy.
Start with eliminating "supply side" economics and return to traditional Republican tax and fiscal policy.
Do this first.
104 replies
= new reply since forum marked as read
= new reply since forum marked as read
We are currently living under traditional Republican tax and fiscal policy.
Sheesh, get it right!
the party used to have by referencing Eisenhower and Nixon. 
a lot of people will read it. 
"It’s a massive transfer of income from upper-income Americans to the retired."
And they actually printed that.
Like for... regular people... to read.
And they actually printed that.
Like for... regular people... to read.
Stimulating, you know.
And just for context...because we are still keeping taxes low for the wealthiest Americans:
Certainly it would bring in more revenue. But NOT ENOUGH.
Well then it would be very easy for you to show that with some math. Yet you didn't quite do so. Almost as if using actual numbers would not support your argument.
If we are "constantly paying it off" (the debt), then why does it keep going UP?
Looks like we'll have to go back to "Government Debt 1". We can get to "Government Debt 101" in a while.
Government debt is financed by bonds. Those bonds have a maturity date when the government pays back the money, with interest. That maturity date is not "forever". It's fixed.
As a result, we are constantly paying off the bonds we already issued.
As for why it keeps going up, that's because the debit and the deficit are two different things. The deficit is the difference between the money the government takes in from all sources and the money the government spends. Our debt is the cumulative effect of those deficits.
So how does this come together? By reducing the deficit, we are adding less to the debt. Which shrinks the next deficit. And so on. Since we're constantly paying off the debt, we do not need to suddenly pay trillions of dollars.
In addition, there's two things that 'deflate' our debt. Inflation reduces the real value of our debt. Under "normal" conditions, our real debt goes down all on it's own by 2% per year, because the borrowed money is worth 2% less. But a much larger deflator is GDP growth - the larger our GDP, the less our debt really is. Since you're stuck in a personal economics model, think of it like you getting a raise. Suddenly that car that was too expensive is affordable.
This effect is why actual economists measure government debt as a debt-to-GDP ratio instead of absolute numbers. $1T would be a huge problem for a country with a $1B GDP. It's nothing for a country with a $20T GDP.
Our debt-to-GDP ratio is less than other times in our past. For example, after WWII our debt-to-GDP ratio was much higher. In addition, we have examples like Japan who have a much worse debt-to-GDP ratio than we do. They'll run into problems before we do - we don't have to worry about debt suddenly becoming a huge problem.
We simply pay interest most of the time.
False. When the bonds mature, both interest and principle must be paid. And as mentioned above, we are constantly paying off bonds.
We're sitting at 17 trillion. How much is high enough?
The fact that the number is large is utterly irrelevant. The only thing that matters is the interest rate we have to charge to get people to buy our debt.
So how's that interest rate going? Well, people are willing to buy US debt at a negative real interest rate. As in, you give the government $100, and they will pay you back $98. And people are signing up to do this.
So we can run that $17T up a lot higher before we even begin to have a problem.
The top 1% earn somewhere between 1-2 trillion annually (if i multiply correctly). If you take ALL of that, it would still take years to pay off the debt.
Government debt is not like your credit card. You can not pay it off in just a few years, because you can not pay it until the bonds mature.
If I'm so wrong, show me the proof that my facts are wrong.
Well, you've yet to show any facts. Instead you think government debt is exactly like you charging stuff on your Visa. It isn't, but the Republicans thank you for buying into their framing.
We continue to spend way more than we take in, and simply raising the taxes on the rich isnt enough.
You continue to say this, yet don't actually back up your position with any actual math. Heck, do you even know that our annual deficit has been MASSIVELY reduced since 2008?
In addition, there is no deadline for paying off our debt. If you run the numbers, 2% inflation means we are best served by always running a small deficit - inflation eats away the debt so that we end up with more real spending.
What appears to be going on is you've bought into the media and right-wing framing of the debt issue.
But at the same time, there is a point where the rich, just like corporations, will do whatever it takes to avoid higher taxes.
If this was an actual problem, you would find the most wealthy people living in the lowest-tax states. Moving within the US is trivial, especially for the wealthy, so if larger tax burden were such a problem they would move to low-tax states.
The majority of the wealthy in the US live in California and New York. Our two highest-tax states.
If we did that, then the corps wouldnt have any reason to pay a thousand lawyers to get out of taxes.
Wow is that delusional. Corporations would still retain a bunch of accountants and lawyers to avoid paying taxes, because they want to avoid paying taxes. Corporations based in very low-corporate-tax countries like Switzerland still have armies of accountants and lawyers working to reduce their taxes.
But even better, you destroy this argument with your own next sentence:
I believe that would actually raise the avg rate that corps pay from what it is now. We have a 25% rate, but nobody pays that.
So you are arguing both that corporations would just pay their taxes because they are lower, and that they would pay higher taxes.
I realize this is the media and right-wing framing of the issue, but you have to take a moment to realize this is utterly contradictory: You are simultaneously claiming they would pay more and pay less.
Second, and here's where so many here hate me, we need a consumption tax. Not the "fair tax", more of a plain old sales tax like most of our counties use.
So you're very, very, very worried about rich people not having enough money, but you're happily going to slap a massive tax increase on the poor?
No, the rich do not pay more in sales taxes. What happens is "regular" people buy goods. "Rich" people buy services. For example: Lawn care. If you are not wealthy, you go buy a lawnmower. If you are wealthy, you hire a gardener. Let's slap some fake numbers on that to illustrate the point:
Not wealthy - $200 lawnmower, 10% sales tax, means $20 in taxes. That $20 is paid by one household.
Wealthy - Gardener buys $2000 lawnmower, 10% sales tax means $200 in taxes. Gardener has 30 clients. Each household pays $6.67 in sales tax.
There are SO MANY people who pay little or no income taxes. And I'm not talking about the working poor. I'm talking about the cash-workers such as heat/AC folks, contractors, plumbers, mechanics, landscapers, electricians, etc etc. Sure they pay, but they also put a lot under the table.
So we need to raise taxes on the poor, and lower taxes on the wealthy, because you witness people breaking federal law and refuse to report it.
You know, there's a much better solution to this problem...
And thats not even including the illegal money from the criminal element that would now be taxed
.......I don't think I've seen a dumber argument. You are claiming criminal enterprises would collect sales taxes? And submit them to the government? Thereby proving that they are a criminal enterprise?
Wow that's a dumb argument.
Just like the ACA was designed. EVERYBODY pays in so that lowers the cost for health care.
Because the ACA didn't include Medicaid expansion and massive subsidies.
"change Social Security benefit formulas to produce an average increase of $60 per month" according to the editorial. 15 extra bucks a week for the elderly.
The editorial then goes on to complain that that would be a "massive transfer of income from upper-income Americans to the retired."
Nice perspective on the injustice of a massive transfer of money, given the last 30 years.
Exactly !!!
Linda Sanchez and her sister Rep. Loretta Sanchez
Very well put!
Thanks for the thread, WillyT. 
... Budgetary Realism? How's about "Stacked Deck" Washington Post? Did some mogul buy WaPo recently? This sounds more like something the Washington Times would espouse. I don't subscribe to the WaPo as I'm out here in the hinterland, but if I did, I would cancel it. "The rich have finite resources..." my ass. Poor babies. Cry me a river, poor rich folks. Remember how they used to holler "Class Warfare" and the Democrats would sulk off to the corner and cry?
I don't know who "Dryly41" is, but that was a most excellent comeback. Frankly, I am shocked that WaPo printed it. But, as we all know, the WaPo knows who he/she is. "Dryly41" must have some mythical power? Told WaPo to "print it or else"? Where's that damn tinfoil hat when I need it? 
Oh yeah, K&R
as this flies over the heads of the neocons running things these days, and their misinformed minions.
I love that it was the very first response, too!
For a great catch and a great response from Dryly 41.
