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Author
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Topic: The Social Security Surplus
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Dave Thomer
Guardian of Peace and Justice in the Galaxy
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posted 09-05-2001 03:53 PM
   
An AP wire story reprinted at Salon suggests that President Bush is trying to soften a previous pledge not to dip into the Social Security surplus unless there were a war or recession, neither of which we are (currently) in.Besides the fact that this gives Democrats an almost absurdly easy target in upcoming elections, how much does this matter? Is this a campaign promise that we should hold someone to, or is it one where we can accept the idea that things change? I'm inclined to say that as long as we have a massive federal debt that helps to keep interest rates high, this is officially a Bad Thing, but I'm willing to be persuaded by economic arguments otherwise. |
Jack Intveld
Just Got Here
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posted 09-05-2001 06:56 PM
As I understand it, we wouldn't be talking about dipping into Social Security if it weren't for a massive tax cut that goes almost entirely to people who don't need the money. (In case any of you have missed this, even the IRS refers to the $300 and $600 checks that are currently in the mail as an advance against next April's refund -- you're NOT getting money BACK!)So if we don't hold GW to his promise, we're essentially saying that it's even okay to take away (or at least jeopardize) people's retirement money so the rich can have every last penny minted. |
Jack Intveld
Just Got Here
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posted 09-07-2001 01:38 PM
Here's another two-cents-worth: http://www.democraticunderground.com/articles/01/09/01_socsec.html |
Pattie Gillett
True Believer
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posted 09-07-2001 02:40 PM
Is breaking campaign promises encoded on Bush family DNA?
Have the Bush advisors found a stash of stupid pills?
The Social Security Surplus isn't a surplus at all. It's money that's earmarked for investment so that we can make payments to the Americans who have paid into it for all their lives. You'd think that with the average age of the population rising so quickly, the thought of "borrowing" from Social Security wouldn't even cross their minds. |
Dave Thomer
Guardian of Peace and Justice in the Galaxy
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posted 09-10-2001 07:46 AM
quote:
Originally posted by Jack Intveld:
As I understand it, we wouldn't be talking about dipping into Social Security if it weren't for a massive tax cut that goes almost entirely to people who don't need the money.
Yeah, it's amazing how fast conservatives rush to justify deficit spending when it's for lower high-end tax rates and higher military spending, as opposed to that work-of-the-devil social spending, isn't it? (I never thought I'd see the day when the Democrats had a convincing claim as the party of fiscal responsibility. From the headline of an article I saw on Salon but didn't get a chance to read, Robert Reich's having a hard time with it too, but whaddaya gonna do?) quote:
(In case any of you have missed this, even the IRS refers to the $300 and $600 checks that are currently in the mail as an advance against next April's refund -- you're NOT getting money BACK!)
In fairness, though, assuming we didn't get the checks now, wouldn't our April refunds be expected to be larger than usual, because the rate cuts were retroactive to Jan. 1? (I will say that I'll find it funny if I wind up owing tax in April. Oh well.) quote:
So if we don't hold GW to his promise, we're essentially saying that it's even okay to take away (or at least jeopardize) people's retirement money so the rich can have every last penny minted.
Well, let's say that this dipping was a one time thing and that the resultant boost to the economy would repay it and more by the time those funds were needed -- would that be worth it? I mean, I don't even think that the government is going to technically take any money from SS. It's an accounting trick. To say they're 'dipping into the surplus' just means that they're going to issue a few billion dollars more in Treasury notes and let the current surplus in the SS account hide it. (If I'm wrong, please correct me.) I do agree with you that jeopardizing folks' pensions or benefits is a Bad Idea -- which is why I'm really scared Bush will try to KEEP his campaign promise to privatize Social Security. Brrr. |
Jack Intveld
Just Got Here
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posted 09-10-2001 09:48 PM
quote:
Me: (In case any of you have missed this, even the IRS refers to the $300 and $600 checks that are currently in the mail as an advance against next April's refund -- you're NOT getting money BACK!) Dave: In fairness, though, assuming we didn't get the checks now, wouldn't our April refunds be expected to be larger than usual, because the rate cuts were retroactive to Jan. 1?
That's probably true. What I object to is the overt politicizing of this one-time pay-out ("Tax Relief for America's Workers" written right on the check) to rally everyone behind what I think is a disastrous policy. Dressing that up as a rebate just adds insult to injury. Here in Minnesota, we've gotten -- I think -- three years of summertime checks from the state, and they each consisted of money that was already paid in, assumed to be gone, and then magically returned. I'm pretty sure that that's what most people think a rebate is. (Quite frankly, I wish the state had kept the money for the next time there's a shortfall, but ...)Talking about this tax cut is a complicated business since its a long and winding road from here to its full implementation in about a decade. I'm not the type to read 1040s or tax laws for fun and so I'm surely no expert on the full implications of these changes. However, according to Citizens for Tax Justice ( www.ctj.org/html/gwblater.htm ), many people -- the ones with the least income and the greatest need for relief -- won't be seeing much more in the way of tax help after this ... this ... I'll just put my cards on the table and call it a bribe to the American people -- "Support my policies and I'll give you $300." I'd like to see that paid out in $10 silver coins, thanks.
quote:
Dave: Well, let's say that this dipping was a one time thing and that the resultant boost to the economy would repay it and more by the time those funds were needed -- would that be worth it?
Yes, if it really works that way. I'm not upset about robbing Peter to pay Paul as long as it's temporary. I don't really care how the government does its accounting just so the money's spent honestly, and on the things we all need (like secure retirement).Here's what worries me: the tax cut is phased in over a decade and will take away more potential revenue as time goes on. I'm not sold on the idea that the newly-stimulated economy will make up for it -- although I'd be happy to be wrong about that one. So, if we're already having to dip into Social Security this year -- temporarily -- will we have to face up to permanent reductions in service in the near future?
On the tax cut in general: I was appalled that we collectively threw away a chance to pay down the national debt. If the figures I heard were accurate, 27% of every tax dollar pays interest on the country's loans. Pay that off once, and you'd have a shot at a BIG, PERMANENT tax cut WITHOUT ANY CUTS IN SERVICES! Sounds like a dream doesn't it? Well, that's all it is now.
Editted -- three times -- because I'm still learning to use UBB codes
[This message has been edited by Jack Intveld (edited 09-10-2001).] |
Dave Thomer
Guardian of Peace and Justice in the Galaxy
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posted 09-11-2001 07:28 AM
I agree with just about every point you make, Jack, especially that about the lost opportunity to pay down some of the debt. The Washington post is running a comprehensive series on the tax cut right now; today's article discusses the Alternative Minimum Tax, which is a relatively little-known part of the tax code that basically says if you claim too many deductions and send your adjusted gross income below a certain threshold, the AMT kicks in instead and you have to pay a higher amount. The AMT used to have a high enough threshold that only the wealthy were usually affected, but according to the Post analysis, it's going to start biting more and more middle class families and essentially undo the effects of the tax cut, unless Congress raises the threshold, which, of course, will reduce its revenues further and make it harder to balance the budget.In other words, we're gonna be paying the piper one way or the other over the next few years. |
Dave Thomer
Guardian of Peace and Justice in the Galaxy
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posted 10-15-2001 11:11 PM
Well, now that we're likely in a "war" and a recession, looks like GWB's off the hook for breaking his promise thus far.Of course, the current situation does sort of point out the value of maybe saving a little for a rainy day, especially if you're already several trillion in the hole. |
Jack Intveld
Just Got Here
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posted 12-20-2001 03:16 PM
A few months ago, I said I wished that Minnesota had kept some of its surplus for a rainy day instead of putting it all into tax rebates. After all, every economic boom in history has always eventually been followed by a slowdown. Well, of course, everyone wanted "their" money back and they got it. Now we're looking at projections of a $2 billion shortfall! "Those who cannot remember the past are condemned to repeat it." -- Santayana
(one my father's favorite quotes; he was a history teacher)
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Pattie Gillett
True Believer
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posted 12-20-2001 04:04 PM
Somehow being right doesn't feel very good in this case - right, Jack?AAAAAARRRGGHHH! I wonder what brain surgeons on going to be at the helm of the privatized portions of Social Security - former Enron executives? Don't laugh, it's a possibility. They need jobs and they have friends in high places... [This message has been edited by Pattie Gillett (edited 12-20-2001).] |
Dave Thomer
Guardian of Peace and Justice in the Galaxy
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posted 01-14-2002 10:32 PM
Not to be callous, but that may actually be a benefit to the Enron fiasco. The next time someone says that privatizing is a good idea, and that people should have the freedom to make their own investments and build their own retirement nest egg, I'm sure as heck gonna be jumping up and down and pointing to the Enron employees whose 401(k)s were wiped out. You can make an argument that those employees need to take responsibility for their own choices, and that they could have diversified their portfolios when Enron was sky high. I'll grant that, to a point. Plenty of people do not have the knowledge, skill, temperament or time to manage their own investments. From a purely pragmatic standpoint, a large number of older Americans with insufficient savings is NOT something that would be a benefit to society. | |
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