Hoo boy, Social Security is back in the news with the MSM trying to whip up the idea that Obama is going to prove Bush right by going after Social Security (similar narratives are floating around about Iraq and torture all in an effort to prove that Bush was never, never actually wrong about anything). I do some push back.
Social Security Monthly Balances: Nov update
Social Security 'Reform': the Undead Return
Bruce Webb and Barkley Rosser and Social Security Not actually by me, but if you think I am going to pass that title up you are nuts. My Mom reads the site.
Obama and Social Security: why NOT to worry
2008 Social Security Balances: Projections vs. Actual
Recalculating 'Nothing': Social Security in a Time of Recession
Social Security?: It's Stochastic!!
Social Security: Goldilocks curves, Not too hot, not too cold
Is Obama echoing Bush on Social Security?
Orszag (and Diamond) Flunk Reading & 'Rithmetic: SS Legacy Debt
Unleash Your Inner FDR: Social Security as Political Opportunity
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6 comments:
bruce,
per www. whitehouse. gov, Obama proposes to increase SS taxes on (wage) income over $250K.
I don't see the point when the SS Trust Fund is still accumulating surpluses.
Your thoughts?
Well I am opposed to cap increases anyway but mostly on the basis of the fact you point out. Currently Social Security is running surpluses.
However late in the campaign the Obama camp shifted their position somewhat by moving the implementation date of the cap increase back to 2019 which is to say just after the time when the Trust Fund STOPS accumulating cash surpluses. Which not only makes better sense but allows us to monitor the situation and continue to adjust that date as needed.
But in any event I would not structure or frame this in the form of a cap increase as that just advances the narrative that Social Security is in some sort of 'crisis'. Instead I would impose a similar increase in the form of a flat tax on all income over $250,000 and make it clear that it was being devoted to paying back the by then $4-5 trillion in borrowing and accrued interest that will make up the then current TF balance. There being a big difference between 'bailout' and 'debt repayment'.
More on the new Administration's possible plans regarding Social Security (aka spending some political capital) at http://www.whitehouse.gov/agenda/seniors_and_social_security.
Relevant exerpts below:
• Create Automatic Workplace Pensions: Under the Obama-Biden plan, employers who do not currently offer a retirement plan will be required to enroll their employees in a direct-deposit IRA account.
• Expand Retirement Savings Incentives for Working Families: Obama and Biden will create a savings match for low and middle-income Americans. The savings match will be automatically deposited into designated personal accounts.
I think we have the possibility of a double-header here — justification for Social Security benefit rollbacks AND creation of immediate financial windfalls with new streams of guaranteed revenue for Wall Street in perpetuity.
Sounds like the same old Washington Consensus to me, just another flavor of privatization. I DO hear an echo!
Bruce
framing the tax increase on the over 250k crowd as a "repay the trust fund" tax... brilliant.
now stop them from calling it a cap increase or payroll tax or social security tax.
dale
anon
i am afraid you may be right.
i knew there was something wrong with this, I did not quite see it as a purely cynical plan to cut Social Security by the back door.
dale
Social Security for senior's taking it at the age of 62 should not be limited to what they can earn. We didn't ask to do this and we shouldn't be penalize for it. Remember we still pay into the system. The system is running low in funds and the more we seniors's work the more revenue goes into the system. It is a bad rule and it should be rescinded by the Social Security Administration.
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