U.S. Debt discussion

[Cowboy89]

Originally Posted by yads

Sure I agree with you that would be the case if the population wasn't growing. Or are you trying to say that most of that growth is from immigrants that are past working age? That said a ponzi scheme is by definition doomed to fail. We're not talking about a scheme where each worker needs to be replaced by 2 workers. So in the event where your ageing population is supported by less people, either taxes must be increased or benefits must be decreased. The government of Canada is starting down that path with the changes to CPP.



Which program?

The population growth is primarily fuelled by people living longer on average. Yes there is immigration but that just barely makes up the for the birthrate at being just below replacement. The ratio of workers to retirees is getting smaller becasue the population is getting older.

[Jedi Ninja]

Originally Posted by yads

Sure I agree with you that would be the case if the population wasn't growing. Or are you trying to say that most of that growth is from immigrants that are past working age? That said a ponzi scheme is by definition doomed to fail. We're not talking about a scheme where each worker needs to be replaced by 2 workers. So in the event where your ageing population is supported by less people, either taxes must be increased or benefits must be decreased. The government of Canada is starting down that path with the changes to CPP.



Which program?

Both Social Security and Medicare, according to the Trustee's own report.

http://www.ssa.gov/oact/trsum/index.html

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.
The financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare

[Azure]

Originally Posted by seattleflamer

The Reid plan is hardly a blank check. It essentially punts complicated policy issues past the '12 election leaving the big 3: entitlement reform, deficit reduction and potential revenue increases/decreases to where it belongs as a separate legislative measure rather than tied to running the everyday operations of govt.

Noone benefits from bringing up the debt ceiling issue again in another 6 months except those who believe or want the electorate to believe govt is broken.

Decisions can't be made so lets throw everyone out and try something radical. IMHO, it is the fringe tea party movement of the GOP that is holding the economy hostage.

The government is broken.

That much is pretty evident.

I don't necessarily agree with forcing another debt ceiling vote though, but I think they should pass a law that requires them to do entitlement reform, tax code reform, and form a special committee that has 3 months to go over the budget and find real cuts that will work.

In the meantime just vote to raise the debt ceiling with the $3 trillion in cuts.

[Knalus]

As Canadians, this could represent the greatest buying opportunity of all time.

[Azure]

Originally Posted by Flames Fan, Ph.D.

So you're for taxation that reduces the incentive to make more income huh?

Because if you means test, you're basically telling people that if they make more income in their lives, then the government will charge them more for their medical care. So this is a disincentive to invest / make more money, just like "higher taxes" is a disincentive to invest / make more money*.



* there's a hat tip due here, but i'll divulge it later.

Well you could say all that.

Or you could just say that if you want to collect a government pension check, you need to pay MORE into the program and for a longer amount of time, because if you don't do that, there won't be nothing left for your kids 50 years down the road.

Canada had to make the same changes with CPP.

[Azure]

Originally Posted by Slava

I've come to the conclusion that the tea party and their supporters are just delusional. Purely anecdotally they had some guy on QR77 yesterday who took the position that the US was staring into the abyss. Consumer confidence was terrible, yada, yada, yada. At the end of the interview I flipped stations and caught the business report. First comment was that consumer confidence surprised to the upside and the housing market has leveled out.

Couple that with reading some of the posters here who think Obamacare has caused every single issue the country faces and that the stock markets might somehow react positively to there being no deal next week and its pretty clear which side knows nothing about money and economics.

Nobody ever said Obamacare has caused every single issue the US faces. All anyone said is that there is a cost issue involved. And the US is struggling to pay its bills.

The same thing should be said for virtually every single thing the US spends money. The last 50 years of spending money like a bunch of morons have caused this issue. Now they'll have to sacrifice.

[Azure]

Originally Posted by afc wimbledon

You can do all of this and you still need to gut the military, close homeland security, end the war on drugs etc.

On top of this wage and pension cuts to federal employees will negatively affect the US economy on a huge scale, from an economic point of view tax increases for the rich is far less damaging.

I don't understand why people are saying you need to 'gut' anything. You need to reform certain programs to make sure they are sustainable long term.

If there is no money left in the SS fund because the baby boomers are taking it all, obviously that won't help the US long term. So if you need to raise the 'retirement' age to 68 in order to deal with that problem, you do it.

As for tax increases for the rich, we already know that its a problem that needs to be fixed. The loophole problem needs to be fixed too.

The $600 billion in added revenue from closing the loopholes and reducing the corporate tax rate is an added bonus to the whole problem. The bigger picture should still be the level playing field to help small businesses compete in a VERY competitive economy.

[Weiser Wonder]

Originally Posted by Jedi Ninja

You have just hilighted the biggest problem with these programs. People believe that they've paid their fair share and are entitled to get full benefits back. In fact, the money they have paid in is not sufficient to cover the benefits that they're hoping to get back at retirement. People have not paid their fair share. The program is able to function only because there has, up until now, been more people paying into the programs than claiming. As that balance shifts, the program will not have enough money.

Did you read the second paragraph of my post which clearly states SS is running a surplus? Money the government has spent elsewhere, but that's not social security's problem. Social security is set up to pay full benefits until 2035.

Originally Posted by Cowboy89

The days when a first world country has the financial means to care for its old, poor, and sick in the traditional sense are over, for fiscal and demographic reasons. Social security and medicare was all fine and dandy when there was numerous workers per retiree. Demographically this has changed and will continue to change for the negative. Bottomline this was a ponzi scheme. CPP is a ponzi scheme in Canada. Europe and Japan are utterly crumbling under the weight of their aging populations and lavish social programs. The jig is up, and discussions about what the US can afford and how it can be distributed is now.

The wealthiest Americans have been hording the entirety of the United States' economic growth for the past 20 or so years. Their wealth has exploded while the middle class has remained stagnant. There is plenty of money to go around and to fund these programs. I resent conservatives feigning responsibility rhetoric while the middle class gets bent over.

Many of you might not realize the state of America's poor but leaving them to fend for themselves is so dramatically stupid. These people have close to nothing and they are getting more and more pissed off. Beyond that, more and more Americans are being pushed out of the middle class and becoming poor. You're risking the economic health and political stability of the world's only Democratic super power, for no good reason.

[Flames Fan, Ph.D.]

Originally Posted by Azure

Well you could say all that.

Or you could just say that if you want to collect a government pension check, you need to pay MORE into the program and for a longer amount of time, because if you don't do that, there won't be nothing left for your kids 50 years down the road.

That's fine.

But it doesn't remove the fact that means testing is, by definition, the same type of disincentive that taxes present. So reading people who want lower taxes but means testing is a sure fire sign that someone can't put together a coherent thought.

[Cowperson]

Originally Posted by Cowboy89

The population growth is primarily fuelled by people living longer on average. Yes there is immigration but that just barely makes up the for the birthrate at being just below replacement. The ratio of workers to retirees is getting smaller becasue the population is getting older.

By 2050, demographically, the USA population will be over 400 million and it will be one of the youngest populations in the world.

It will, however, get a bit older between now and then, particularly around 2030.

Racially homogenous societies like Japan that have little immigration are shrinking.

China's population will begin to age and shrink dramatically by 2030 through 2050.

Europe will lose about a third of its population, assuming immigration doesn't fill the gap.

Older, aging populations will probably reside in Muslim countries by 2050 when America is demographically turning young and vibrant again.

Cowperson

[Azure]

Originally Posted by Weiser Wonder

The wealthiest Americans have been hording the entirety of the United States' economic growth for the past 20 or so years. Their wealth has exploded while the middle class has remained stagnant. There is plenty of money to go around and to fund these programs. I resent conservatives feigning responsibility rhetoric while the middle class gets bent over.

Many of you might not realize the state of America's poor but leaving them to fend for themselves is so dramatically stupid. These people have close to nothing and they are getting more and more pissed off. Beyond that, more and more Americans are being pushed out of the middle class and becoming poor. You're risking the economic health and political stability of the world's only Democratic super power, for no good reason.

The wealthiest Americans have been ABLE to hoard all that money because the government has made it easy for them to do so.

Nobody is saying that we should cut SS. We're saying that it needs to be 'tweaked' to make sure it survives longer than the 25 years that its projected to pay out benefits. 2050 would be better.

Also, the middle class needs jobs. It needs a healthy, stable economy. It needs a level playing field, where they don't get bent over paying more taxes, while the big corporations and billionaires get away with paying nothing because they're exploiting all the loopholes possible.

Fix those problems and you're well on the way to reducing the huge discrepancy between the classes.

[Flash Walken]

It's amazing what happens to the ledger if you classify the bush tax cuts as a social program rather than a tax cut.

[Rathji]

Originally Posted by Weiser Wonder

Many of you might not realize the state of America's poor but leaving them to fend for themselves is so dramatically stupid. These people have close to nothing and they are getting more and more pissed off. Beyond that, more and more Americans are being pushed out of the middle class and becoming poor. You're risking the economic health and political stability of the world's only Democratic super power, for no good reason.

Even if instability didn't happen, social return on investment studies almost always show that putting money into providing for the poor is cheaper than putting money into dealing with the results of poor people being neglected, which is primarily crime, but also counting disease. I don't know how those numbers would work out on a national scale though, but I assume it would be reasonably close.

[Flash Walken]

Originally Posted by Rathji

Even if instability didn't happen, social return on investment studies almost always show that putting money into providing for the poor is cheaper than putting money into dealing with the results of poor people being neglected, which is primarily crime, but also counting disease. I don't know how those numbers would work out on a national scale though, but I assume it would be reasonably close.

Related:

http://www.pbs.org/wgbh/pages/frontline/doctor-hotspot/

If you don't want to read the philosophy and just want numbers:

http://www.pbs.org/wgbh/pages/frontl...tor-hotspot/#4

[afc wimbledon]

Originally Posted by Azure

I don't understand why people are saying you need to 'gut' anything. You need to reform certain programs to make sure they are sustainable long term.

If there is no money left in the SS fund because the baby boomers are taking it all, obviously that won't help the US long term. So if you need to raise the 'retirement' age to 68 in order to deal with that problem, you do it.

As for tax increases for the rich, we already know that its a problem that needs to be fixed. The loophole problem needs to be fixed too.

The $600 billion in added revenue from closing the loopholes and reducing the corporate tax rate is an added bonus to the whole problem. The bigger picture should still be the level playing field to help small businesses compete in a VERY competitive economy.

If the tea party wishes to balance the budget while not touching taxes without raisng the debt limit, which is what they are stating, then they will have to virtually eliminate the military and most of the services most countries take for granted at least for as long as it takes to eliminate the deficit itself.

[Coach]

Violent revolution time!

[seattleflamer]

Originally Posted by Jedi Ninja

Both Social Security and Medicare, according to the Trustee's own report.

http://www.ssa.gov/oact/trsum/index.html
Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.

Yes, even the politicos know the current system is untenable. They will do a combination of raising the age to qualify, raise the FICA tax, and "reform" the current system.

A relatively simple fix that would help in my view is to remove or adjust the cap on FICA (payroll) tax (the 6.2% from employee contributions) upward.

In 2011, the FICA tax is applied to the first ~$105K of income so essentially any income over that amount is payroll tax free. So those who make under that amount essentially subsidize those whose income is greater than the cap.

Obama proposed something similiar that higher income individuals have a higher threshold on their FICA cap ie. first $130K of W2 income (?).

But of course, that goes to taxing the "middle class" that many don't espouse. As a wage slave myself, I'd be willing to pay more but that is me.

[seattleflamer]

Originally Posted by Azure

The government is broken.

That much is pretty evident.

I don't necessarily agree with forcing another debt ceiling vote though, but I think they should pass a law that requires them to do entitlement reform, tax code reform, and form a special committee that has 3 months to go over the budget and find real cuts that will work.

In the meantime just vote to raise the debt ceiling with the $3 trillion in cuts.

What about just raising the debt ceiling with no attachments, then look at revenues and expenses and legislate accordingly without arbitary deadlines and ceilings like the rest of the industrialized world.

What examples do you have where govt is broken?

To me it is a broken polity or electorate that is uninformed and scared about what is happening around them and an unwillingness to compromise. It starts with NIMBYism and works its way up to primaries system of elections where the far left or right of the party tend to be more active leaving out moderates for the general election. People are not in a conciliatory mood nowadays and it is represented in some elected officials like Tea Party members.

Moreover, voters base their decisions from sound bites from Fox or CNN because they don't want to spend the time or too much thought to look at policy before making an informed decision.

imho...

[VladtheImpaler]

Originally Posted by seattleflamer

What about just raising the debt ceiling with no attachments, then look at revenues and expenses and legislate accordingly without arbitary deadlines and ceilings like the rest of the industrialized world.

If there is no deadline/stick, they'll just go on posturing and playing "to the base". Unfortunately, this artificial artifice is required to get people to act for the benefit of the country instead of just for the benefit of the election campaign...

[J pold]