[tomder55]

Paul Krugman of the Slimes (who never saw a tax increase he didn't like ) thinks Medicare and Social Security are sustainable without cuts if some maybes happen .

In his op-ed he says that
MAYBE the CBO is wrong about it's projections about future costs .
MAYBE life expectancy will stop increasing
MAYBE the cost of these programs can be sustained with a tax increase.

The last point is his only real point.
"America has the lowest taxes of any advanced nation; given the political will, of course we could come up with 3 percent more of G.D.P. in revenue," . "We can keep these programs, which are so deeply embedded in American society, if we want to. Killing them would be a choice."
Opinion | Why Medicare and Social Security Are Sustainable - The New York Times (nytimes.com)

Of course a massive tax increase of over a $ trillion MIGHT buy the programs some time . MAYBE it would not destroy the economy (more than it is already being destroyed )

[jlisenbe]

The last point is his only real point.

Correct. The first two are only an engagement in fantasy.

I think they will try to hide the tax increase by raising only the employer contribution. No one will mention the increase in prices that will inevitably happen to pay for it.

[Athos]

Paul Krugman of the Slimes (who never saw a tax increase he didn't like ) thinks Medicare and Social Security are sustainable without cuts if some maybes happen .

In his op-ed he says that
MAYBE the CBO is wrong about it's projections about future costs .
MAYBE life expectancy will stop increasing
MAYBE the cost of these programs can be sustained with a tax increase.

Good maybes by Krugman. No maybe about the tax increase. Definitely could save the programs.

[tomder55]

Taxing it is not even a maybe .That is how they bought a few years last time. Even Trump thinks the program can be saved .

The Swedes had this dilemma in the 1970s . They fixed it with partial privatization (as I have suggested ) .It consists of a private investment portion of its pension program, which gives citizens choice over how their contributions are invested. Since inception the average return to the investor has been 10% .Ours struggles to give a 2 % return . Our children and grandchildren will not see a penny .

The difference is that they did not treat the program like a third rail sacred cow .

[jlisenbe]

When the patient is dying, then perhaps the situation should be taken seriously. Whistiling in the dark (MAYBE the CBO is wrong about it's projections about future costs . MAYBE life expectancy will stop increasing.) is a sure path to disaster. What is needed is some serious pols capable of serious thought. Biden/Harris/Pelosi? Good luck with that.

[tomder55]

From Krugman's op-ed

The thing about Social Security is that from the beginning it was designed to encourage misconceptions. It looks, on casual inspection, like a giant version of a private pension plan. You pay into such a plan during your working years, contributing to a pension fund, and when you retire you receive payments from that fund in proportion to the amount you put in. ...
I'm pretty sure that it was set up to look like an ordinary pension fund because that made it politically easier to sell. But in reality, Social Security has never been run like a private pension plan.

I get a lot of mail from people saying that we should simply eliminate the upper limit on the payroll tax. That would certainly raise a lot of money. But bear in mind that there's no fundamental reason Social Security has to be financed with payroll taxes — we only do it that way because back in 1935, F.D.R.'s advisers thought it would be a good idea to dress Social Security up to look like a private pension fund.

yes ; a deceptive ponzi scheme was how it was designed .

Another way to "save " the program is it's gradual elimination to be replaced by Personal Treasury annuity accounts (PTAs ).
Instead of the payroll tax being deposited into a fictional SS trust fund ;it would be deposited into a PTA . That PTA would be invested into US Treasury mutual bond funds owned by the person who is taxed, and managed by the Treasury Sec. .

At the age of eligibility that person has the option to withdraw funds on a schedule annuity based on life expectancy . When the owner dies any remaining amount in the PTA would get transferred to beneficiaries .

The phase out would begin with new workers into the workforce and would take up to 50 years to complete.As the PTAs get established workers who had started to pay into SS could be incorporated . Funding would have to be found in the short term for existing recipients of SS benefits ;and those who have already paid into the SS system. But gradually those obligations on the taxpayer would be reduced . It eliminates the threat of insolvency and gets rid of an intentionally flawed and misleading retirement system.

The benefits outweigh the short term costs .
A beneficiary gets what they earned and not what some pol thinks they should get.

The funds being transferred to beneficiaries would eliminate a gross unfairness that is inherent in a SS eligible person who has paid into the system their whole working life dying early and having SS benefits cease . Currently if you take your first Social Security distribution at age 65 and then die one year later, your heirs receive nothing.

The current system is unfair in that a man's life expectancy is lower than a woman's ; a poor person's life expectancy is lower than a middle class person's .Black's life expectancy is less than Whites at this time. etc.

Politically it is a win -win. It forces the Dems to admit that the current system is NOT a pension plan . It is a massive wealth transfer from the young to the old. The system as a whole should appeal to young workers who are paying into a system that they will never get a benefit from.

[jlisenbe]

I don't think that can work, simply because allowing young workers to pay into PTA's would mean they would NOT be paying into the SS fund. That being the case, within just a few years, there would be no way to pay the benefits going to the currently retired population, so it would have to be funded out of general revenues, and of course, due to our own stupidity, that would necessitate even more borrowing or printing of money since we have long ago forgotten how to balance a fed budget.

I don't see a way out of this mess we have mindlessly allowed ourselves to get into.

"The benefits outweigh the short term costs." That's hard to say since we don't know what the short term costs would be.

[tomder55]

that is why it is a gradual adoption. And I mentioned that other means would have to be made to deal with the short term shortfall. As it stands now it will take revenue outside of the payroll deduction to bail it out
It is a flawed system that is unsustainable and built on a lie .No amount of adjusting will fix it . The best we can do is kick the can down the road until the inevitable end of the ponzi scheme if we don't make REAL moves to replace it completely.

I'll also say this .Trump is sounding more and more like a Dem on this issue. He even rolled out that silly attack the Dems pulled on Paul Ryan with the rolling granny over the cliff BS

[jlisenbe]

But you have to bear in mind that for the next at least ten years or so, people will continue to retire since they have had no time to establish a PTA, so all of that will still need to paid, but revenues will be continually declining due to new workers not paying in. So my question is, how will you fund the current system when you don't have the revenues to do it?

SS has worked for decades. It's in trouble now due to a bunch of self-serving pols who have not made the decisions for the past twenty years to preserve it. That and the additional financial pressures added because of Medicare.

BTW, you haven't mentioned what you would do with Medicare which is also funded (stupidly, in my view) with SS revenues.

[jlisenbe]

SS is clearly not what it was originally intended to be.

"The original Social Security contribution rate was 1% of pay, which was matched by employers. The tax rate grew to 1.5% in 1950 and gradually increased to top 5% by 1978. The current tax rate of 6.2% has been in effect since 1990."

[tomder55]

But you have to bear in mind that for the next at least ten years or so, people will continue to retire since they have had no time to establish a PTA, so all of that will still need to paid, but revenues will be continually declining due to new workers not paying in. So my question is, how will you fund the current system when you don't have the revenues to do it?

They will do what they plan to do but aren't telling us yet.

Raising the retirement age

Raising payroll tax rates

Raising the current $160,200 maximum for payroll taxes.

Raising the percentage of Social Security benefits subject to income taxation.

Under the current system it will buy time until the system bellies up . Under my system the pain would only be temporary.

[jlisenbe]

So Medicare would go away under your idea?

[tomder55]

It would have to be decoupled from retirement program.
Then we can have a separate discussion on Medicare ;which currently is an anchor on the SS system and will go into insolvency much sooner than 10 years . (2028)

[tomder55]

Clueless wants to save Medicare by taxing the rich. Clueless is a one trick pony .

Biden aims to shore up Medicare by taxing high-income Americans | Reuters

Opinion | Joe Biden: My Plan to Extend Medicare for Another Generation - The New York Times (archive.org)