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Originally Posted by guy44
I hope KMA won't invalidate Yglesias' views simply because he also writes for an ideologically-oriented magazine. Furthermore, while Yglesias' website has anti-Bush ads on it, the NRO website has "Liberal Most Wanted Cards" ads on it. So KMA, please don't attack Yglesias on something that could just as easily be aimed at Luskin.
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FYI - I didn't bring Luskin into this discussion. I came in after the fact. I did however want to include a clean link so that someone who hasn't read Luskin's article could read it. After going through several links, I chose the NRO one. I dismissed several because of the content of the website.
I mention the Prospect guy because of the effect it had on me when I clicked on the link
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Originally Posted by guy44
I agree with most of what KMA wrote here. Only, though the claim that Luskin (and KMA) make that SS actually has no money is technically true - its like they hold an ungodly amount of IOUs from others - the manner in which they use that information is misleading. Just because SS doesn't actually have money in the bank doesn't mean they don't have anything - just like liquid assets are assets nonetheless. So saying SS has no money is technically true, but since SS can call in IOUs when they need to, they have funds to continue providing benefits.
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The only problem I have here is that there isn't a plan to pay back the t-bills.
The money was borrowed and spent with out any plans for future repayment.
It would be one thing if the people who have pulled this stunt, included a provision or a plan to pay it back, but they didn't. So, yes it is very much like borrowing from yourself and not having the money to pay yourself back.
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Originally Posted by guy44
I agree with this. One of the two will have to happen. But KMA has compeletely ignored my solution for this problem that I wrote extensively on in my original post. KMA says "the money that was borrowed has been spent. it is not sitting around waiting to be used to pay back the loan." True. But there is a way to get the government more than enough money to pay back what it owes. And that would be to not make permanent Bush's tax cuts. As my original post showed, the amount of money this would save the government is almost unimaginably huge. (See my original post, posted earlier by KMA, for links.) For example, the cost of the tax cuts over the next 75 years, should they be made permanent, would be five times that of the Social Security shortfall over the same time period. Just rolling back the tax cuts on those making over $350,000 a year would almost completely cover any Social Security shortfalls.
The point is, repealing Bush's tax cuts would give the government more than enough money to pay back what it owes Social Security. If just the cuts on those making over $350,000 were enacted, then KMA's second option - covering Social Security shortfalls while not paying it back - would be doable without having to raise caps or payroll taxes, as KMA suggests.
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Yes, I did ignore that tax cut idea.
I figure we are on a touchy enough subject that has a very high probability of getting ugly or going stalemate, why bring in another issue that just makes the potential for this topic to spiral even greater.
However, since you have brought it up twice, I should respond.
There is a lot of mis-information going around concerning the tax cuts. In a different thread host (with extensive hyperbole) went on about what the tax cuts did to gov't revenue.
The only problem is......it ain't true.
Through a down economy, recession and war, gov't revenues have increased to levels not even seen during Clinton's tenure. All with a large tax cut put into affect almost immediately.
If Bush's tax cut was so bad for us and our economy, the numbers would be the opposite they are. You will notice, however, when Bush and his tax cuts are demonized, rarely do you see any numbers or figures to back it up. It is just rhetoric, in my opinion.
The tax cuts will pay for themselves and thereby make them moot to the converstation - in my opinion. Also, I do not wish to discuss this issue any further as it has already been done to death, and nobody got anywhere. I would rather focus on things that further discussion rather than kill it. Unfortunately, however relevant, discussing tax cuts will make this get ugly. With one exception, this discussion is going well. I would rather see it continue on its path than see it get all heated up and then locked.
The Social Security problems are a much older issue and they pre-date the tax cuts. Plus, if we want to discuss programs that could be cut to pay for SS, we would be here a long time. As you think the tax cuts are a waste of money, there are many, many different gov't spending programs that I have the same opinion about. We really won't getting anywhere taking this discussion down that road.
Anyway, back to the trust fund.
The main problem is that guy44 and I are looking at the same exact thing.
He sees that there isn't any money there, but is confident in the government's ability to pay back its IOU's.
I see there isn't any money there, but I do not have the same level of confidence.
So, we have common ground on one part: If the Social Security trust fund were to cut me a check for $10 bucks, right now, without calling in any loans, the check would bounce.
We also have common ground on Social Security running a deficit sometime in the next 10-15 years. Regarding the accounting question: SS is designed as a self-supporting "Pay-as-you-go" system, so where SS revenue goes doesn't really matter. It could go into a separate account or it could go into a general account, to me, it really has no bearing on the discussion. Regardless of where it goes, it is still tracked like any other transaction and has a balance. It is still budgeted for separately and must be accounted for separately.
It seems to me that the true issue here is how the money owed to Social Security is paid to keep it solvent through 2040 or 2050. After that, another problem arises, a problem that is much bigger than nulling any tax cut could fix. And, really, another topic altogether.
So, we all have to come to our own conclusion as to how we think the money owed to the trust fund should be paid. We also have to come to our own conclusions as to the effect the repayment of those debts will have. Unfortunately, on these matters, I doubt many of us will agree.
A couple of other points:
I think flstf made the best point in this thread -
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Are we to assume that the polititians will not mess with the program in the next 37 years as much as they did in the previous 37 years? Will one worker be able to support one SS reciprient?
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This concerns me more than anything. Look at what they have done to it already. If we don't do anything to protect it, now, how much worse are the politicians going to make it in the upcoming years. It seems obvious to me that they have no control over themselves, so what is to make us think they will suddenly start spending wisely?
Also, flstf probably posted one of the better analogies regarding the trust fund that I have read.