So I've been thinking about this quite a bit lately, but Joker's new sig file got me mad enough to actually write something about it.
The facts that no one is disputing is that SS is currently scheduled to run a surplus in 2011, will switch over to running at a deficit by 2014, and be funded fully through 2037 at which point it will only be able to pay out 75% of benefits. Nobody is disputing those numbers...
So why all the posturing now? I mean, if my retired parents were to come to me for financial advice, and tell me that they have enough money to pay for their expenses for the next 27 years, at which point they will only be able to pay for 75% of their expenses, I'd say FVCKING GREAT!! Well, not so simple the "reformers" claim, since the US Gov't has raided the SS fund every year to patch holes in the deficit, and when it comes time to pay the US Gov't isn't going to be able to without raising federal income taxes. The "reformers" want to change SS so that it keeps bringing in more money than it pays out.
Ok, lets think about that for a second: Every man, woman and child working in this country pays FICA taxes on 100% of their income. Something like 12.5% goes to SS, and the remainder goes to Medicare and Medicaid (half is paid by you, half is paid by your employer). That's HUGELY regressive. Someone making $100k/year is paying the same tax rate as someone making $10k/year. For our progressive income tax system, the former is paying 25% in federal income taxes, and the latter is paying 0%. For someone making $1 million / year, the effective tax rate is far less, only 1.5% since they're paying the same $15,000 as the person making $100k, but they're making 10x as much money.
In effect the federal government wants to lower it's deficit by raising more money through it's SS (regressive) taxes so it doesn't have to raise federal income (progressive) taxes. Or cut spending (or a combination of the two). It's the *only* reason that "reformers" are clamoring now, as opposed to 27 years from now. They absolutely don't want to pay back that $2.4 trillion dollars that they've borrowed from the American people. They've used that money every single year for the past 75 to do everything from fund wars, infrastructure or tax cuts. The Clinton-surplus was only achieved through raiding the SS piggy bank and as a result, Bush was able to go to the American people and claim to "give people back their money". A massive, massive tax cut to the progressive tax system paid for by the regressive Social Security Trust Fund.
And now that it's time for the US Gov't to start paying back those loans? Suddenly ever conservative starts running around trying to reform SS, because raising the retirement age is easier than actually living responsibly, ie WITHOUT the SS subsidy each year.
The facts that no one is disputing is that SS is currently scheduled to run a surplus in 2011, will switch over to running at a deficit by 2014, and be funded fully through 2037 at which point it will only be able to pay out 75% of benefits. Nobody is disputing those numbers...
So why all the posturing now? I mean, if my retired parents were to come to me for financial advice, and tell me that they have enough money to pay for their expenses for the next 27 years, at which point they will only be able to pay for 75% of their expenses, I'd say FVCKING GREAT!! Well, not so simple the "reformers" claim, since the US Gov't has raided the SS fund every year to patch holes in the deficit, and when it comes time to pay the US Gov't isn't going to be able to without raising federal income taxes. The "reformers" want to change SS so that it keeps bringing in more money than it pays out.
Ok, lets think about that for a second: Every man, woman and child working in this country pays FICA taxes on 100% of their income. Something like 12.5% goes to SS, and the remainder goes to Medicare and Medicaid (half is paid by you, half is paid by your employer). That's HUGELY regressive. Someone making $100k/year is paying the same tax rate as someone making $10k/year. For our progressive income tax system, the former is paying 25% in federal income taxes, and the latter is paying 0%. For someone making $1 million / year, the effective tax rate is far less, only 1.5% since they're paying the same $15,000 as the person making $100k, but they're making 10x as much money.
In effect the federal government wants to lower it's deficit by raising more money through it's SS (regressive) taxes so it doesn't have to raise federal income (progressive) taxes. Or cut spending (or a combination of the two). It's the *only* reason that "reformers" are clamoring now, as opposed to 27 years from now. They absolutely don't want to pay back that $2.4 trillion dollars that they've borrowed from the American people. They've used that money every single year for the past 75 to do everything from fund wars, infrastructure or tax cuts. The Clinton-surplus was only achieved through raiding the SS piggy bank and as a result, Bush was able to go to the American people and claim to "give people back their money". A massive, massive tax cut to the progressive tax system paid for by the regressive Social Security Trust Fund.
And now that it's time for the US Gov't to start paying back those loans? Suddenly ever conservative starts running around trying to reform SS, because raising the retirement age is easier than actually living responsibly, ie WITHOUT the SS subsidy each year.
