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Originally Posted by C4 Diesel
I did the numbers on both scenarios... They're both up there.
Pan, if only the principal is repayed, then the government is losing money. There would be interest accruing (cost to the government) on money that the government has not yet recieved. How do you propose to cover this unaccounted for interest cost if only the principal is paid and it is paid over a long period of time, not even starting until many years after it begins to "cost" interest?
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You will have the companies paying taxes, albeit a smaller amount but with no rent subsidies for the elderly, madicare and medicaid cut to help only the truly indigent and disabled (as hopefully healthcare will stabilize and the workers will be able to afford insurance on their retirement) it will take care of itself.
Yes, at first there maybe a hit to government, however, if companies hold up their end, better paying jobs, increase in jobs, etc. then the tax base from income taxes increases without any new tax burdens, thereby more money flows in.
And again, as these "T-Bill" babies pay off their principles early, and invest more money enters into the system and companies can expand. Also, those that open new shops (because they have the T-Bills paid off and a little saved) that will add to the tax base, not just federally but locally and statewide.
Right now, the system is squeezing the worker and causing the death of the middle class and it is also telling the workers there isn't much to look forward to in retirement (as far as paying 12% into a bankrupt system). This system allows the middle class to grow, companies to grow, a man to help himself without government handouts, and tells the worker after 50 years of hard work, you will achieve a well deserved decent life.
So short term yes, there would be some problems long term though I think it spurs an economic growth with endless possibilities all of them positive.
And yes, the Dems would hate this because they couldn't inspire fear to the elderly and dependence on the party for votes. The GOP, who knows how they would react. I would say they would still see it as a government hand-out.
Personally, I think it would show people that they are indeed respected and that their hard work was truly appreciated.
Why expand this SS tax on the rich. That's a band aid and will eventually be shown as the rich paying for the poor, almost totally. This takes rich/poor out of the picture altogether and puts the burden solely on the worker himself, he becomes self dependant, with a definitive goal that he and he alone (short of gov't going totally bankrupt) holds the key to.
In the end it is the American dream (work hard for a number of years and retire with a little money to enjoy life and show that all those hard years were worth it) and I truly believe this can be done.