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 Post subject: Re: Not extending the national debt.
PostPosted: Mon Nov 08, 2010 2:56 pm 
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Substitute2 wrote:
Mike -- come on now- you're dislike for all things Clinton is showing just a little here.
First there clearly was still debt and has been since the Depression BUT he was the first POTUS in modern times to spend less then came in through taxes for that year. There was a surplus period-- not a small achievement but to give him all the credit is too strong. BUT without his supoport there would have been no surplus at all.

Really? How is pointing out the constitutional separation of powers a dislike of Clinton? How is noting that money is budgeted by Congress and blaming them (Repubs in this case) for not setting aside the necessary entitlement monies required by (for example) the social security act? These are just facts. Here are some more.

Clinton's first two years produced tax hikes and budgets that produced and projected annual deficits of $250B as far as the eye could see. Further, economic growth after passing the Clinton tax hike (since you like to credit the POTUS for such things) caused reduction in economic growth from 3.5-4% to about 1%, and helped sweep in (along with Hillary-care) the 1994 drubbing at the polls.

After Clinton shut down the government (since you like to credit the POTUS for such things), Clinton's relevancy was questioned (by him in speech) and he was forced to move to the middle and sign off on reduced spending and entitlement reform. This unleashed capital that the corporations held in reserve since the tax hike (sound familiar?) by creating economic certainty for business, and created the dot com bubble that balanced and exceeded the annual budget creating the surpluses that held until the dot com bubble crashed at end of his term and early into Bush's.

I'm not sure what you can argue here. I suspect though, that Clinton gets the credit for the surplus and dot com, while Newt and Congress get the blame for the government shut down.

Me? POTUS's are like managers. They get too much credit when they win, and too much blame when they lose.


The perpetually missing headline: "Capitalism worked okay again today, and most people in the world got a little better off."

 Post subject: Re: Not extending the national debt.
PostPosted: Mon Nov 08, 2010 8:32 pm 
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Posts: 12253
Substitute2 wrote:
Bucfan it is great that you have taken care of your own needs when many in your situation have not and you should not be punished for that. I think that is great.

No dispute here.

Substitute2 wrote:
Let me give you my perspective on social security, please. It was never intended to be fair when it was established. Part of it is insurance for families of working people who lost the bread winner by death. Benefits were established to provide for wife and kids until they were adults. Few can argue that that part is not good but it is also socialism.

This is not an issue of fairness. It is a matter of a fraud perpretrated on me. I will have put hundreds of thousand of dollars into social security, and the likely outcome is that I get basically nothing in return.

Substitute2 wrote:
Additionally, it was established so that working people, manufacturing types, would have a pension upon retirement. It did not include the many groups who have since been added. Example is teachers who were not and in some states like Ohio still are not members. They of course get no benefits either. When other groups came in, mostly by choice of each group it became much bigger. When funding became an issue it became mandatory in 1985, I think, so everyone was in if hired after that year including Ohio teachers. Then Medicaid was added and every American worker is a menmber and pays 1 plus percent of earnings into it. It like social security is socialism.

I know that, Sub. The problem is that I entered the work force full time in 1984 and have been paying mandated social security taxes for 26 years, including the last 5 years as self-employed.

And as detailed below, the self-employment social security tax is more expensive for me than the simple payroll tax, since I have to account for the money the employer otherwise would pay.

Substitute2 wrote:
The amount paid in has always been a percentage of earned income up to a certain level. After reaching that level no more is taken from your check the remainder of that year. I assume from your post that you reach that level each year and stop paying into it. That amount has increased a great deal since the beginning and is now at about 105,000 a year. I was a teacher and never once reached the limit. It went up just as my income would get close, so I never got any free months at the end of the year. my dad who worked with his hands and made subsistance money always got to the limit when I was a kid and had several months of no pay in November and December.

The employer also pays an equal amount into the social security trust fund (heh, yeah, right ... "trust fund." That is pretty funny). Since I am the employer, I pay both the personal contribution and the employer contribution, Sub. I pay a lot more than most ... A LOT more.

Substitute2 wrote:
All of us on average get our entire contribution back in a year and a half through benefits. At least that was the number in the 80s.

Not true for me. Further, this number is bogus, as it presumes that retirement contributions are put into a coffee can and buried in the backyard. If the funds earn a modest 8% per year, the amount accrued after 40 years of employment is vastly higher - by a factor of 5 - than the amount contributed.

Substitute2 wrote:
Sorry if I bore you with the history but stay with me while I make an argument to help solve the funding problem, please.

No boredom complaint, Sub. Not at all.

Substitute2 wrote:
A regressive tax is when someone with a lower income pays a higher percentage of his income in taxes then a higher income. It's not hard to see that as unfair. So, with Social Security we have designed a regressive tax because anyone over that 105,000 number in income stops paying into it. the result of course is that over-all he pays a lower percent of his income into ss.

I understand what a regressive tax is, Sub. But in fact, social security is clearly not a regressive tax. The more one earns, up to the maximum level, the more one pays in SS tax.

That is a progressive tax.

Further, I for one reject the contention that a tax that is a fixed percentage of earnings - for all those who earn income or profit - is "unfair." 10% of income is 10% of income.

What has happened in my opinion is that Orwellian-speak has taken over tax discussion. "Regressive tax? Well, that can't be good. Progressive? That sounds more fair."

Further, the purported justification for a "progressive" tax is that the more one earns, the more one can afford to pay as a percentage of income. But that is a false claim, since the fact that a taxpayer has a child in private school, is paying a large mortgage, etc. will not excuse payment of the tax.

In point of fact, the government does not care what my expenses are in terms of the social security tax. Don't have the money to pay the higher amount or the higher rate? Tough. Sell your home.

And when did differing treatment become the standard for "fairness"? We live in bizarre times, when paying more, sometimes much, much more - both on a gross level and as a percentage - is deemed "fair."

Substitute2 wrote:
Since the system is close to broke we need to increase funding or decrease benefits. I think the solution must include taxing all earned income and raising the reirement age slighly for those under 40. They will live longer and benefit longer so wait a little longer to get it. The last time the did this, they increased age from 65 to 68 but on a sliding scale which we are now on. But kept the early retirement age at 62 and reduced payments a little for choosing early retirement. This time they should raise it to 63 or 64 and they would save huge amounts.

I agree that both reducing benefits and increasing contribution is required to keep the social security system afloat for the next 15 years.

However, it is simply not sustainable, Sub. In 1950, there were 16.5 workers paying into the system for every retiree. Today, the ratio is 3.3 to 1. In 20-years, the ratio will be about 2-1. ... elBill.htm

It is simply impossible to have employees pay their bills, and meet their tax burden, and pay for the retirement needs for the retired population, plus save for their own retirement. Absolutely impossible.

The system will reach the "more paying out than coming in" status soon. Much sooner than thought, due to economic downturns, as it turns out. Once that status is reached, then the only way to meet the payment is through the general revenues.

Think about that. General revenue will have to meet an estimated $75 trillion in unfunded retirment benefits ... without considering Medicare.

In other words, the entire program is going to fail. The Wall Street Journal has described Social Security as the world's biggest Ponzi scheme. That description is quite accurate.

Get investors on the promise of a big payout. Make that payout not through production or a product or a service, but instead by taking money from new investors.

Continue process until not enough investors are available to continue the fraud. We are approaching that point. And the history of Ponzi schemes is that when they implode, all of the latest investors - ALL OF THEM - get nothing.

The outcome for social security is as follow: The Federal government will raid (steal) every revenue source available, including retirement accounts for those with enough foresight to save for retirement, to try and pump life into the moribund Ponzi scheme. So, after spending my entire professional life paying into a retirement system, I will get nothing out of it. Also, I fully expect my retirement savings to be raided.

Put it this way ... if a financial adviser took hundreds of thousands of dollars from me on the promise that it would be invested and available to care for my needs when I retire, only to advise that I had nothing in the savings program and owed a whole bunch of money, I would report him to the police and sue him for everything he is worth. So I trust that you understand my dissatisfaction.

 Post subject: Re: Not extending the national debt.
PostPosted: Mon Nov 08, 2010 9:31 pm 

Joined: Sat Apr 26, 2008 6:11 pm
Posts: 3384
Location: Wheeling, WV
Very interesting perspective Bucfan. We all get our attitudes toward issues of the day as seen through our own situation. I admit that I didn't consider the self employment part of the argument but I was very aware of it. Clearly employers are asked to give and get nothing and those self employed get to pay twice. Not a desireable place to be.
I'M 63. I say that to let you know that people have been saying that there will be no money in social security when I get there since I entered the work force. I have no doubt that as long as there is an America, there will be a ss benefit. I know all abbout the number of people working vs those retired but adjustments are made and will continue to be made. I am also aware that the money is not sitting in a lock box waiting for me to get mine. I simply was trying to point out that we do just fine with our return on investment plus we don't lose anything during steep downturns in the market.

One other item and here you are wrong. Economists have labeled taxes as one of three kinds- progressive, proportional, and regressive. Proportional is where we all pay the same percentage of income in taxes so rich guy pays more. Progressive rich guy pays much more cuz he pays higher percentage on his income, Regressive is when rich guy pays smaller percentage on income.

Naturally, your income level most always dictates which of these three you prefer. Income tax is progressive, flat tax would be proportional, and sales tax is regressive.

Some argue that a sales tax is proportional but they are wrong. Guy earns 30,000 so he spends it all on his family and pays sales tax on all his income. Guy earne 300,000 spends 100,000 and saves much of the rest. He pays sales tax only on the 100,000 so his sales tax is 1/3 of the lower income guy. That's why a regressive tax is the worst, not because of its label.

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