Friday, February 19, 2010
Bullshit:
Krauthammer: Reagan collaborated with Tip O'Neill, the legendary Democratic House speaker, to establish the Alan Greenspan commission that kept Social Security solvent for a quarter-century. The way Krauthammer writes it, it's as if that's all the commission did - keep the system solvent (until about now). What it did was build up a huge reserve that's designed to keep the system solvent for another 30 years.
posted by Quiddity at 2/19/2010 01:45:00 AM
10 comments
Huge reserve?!? They created a huge "reserve" of debt backed by no assets whatsoever! Debt is not a reserve! They "collected" money for everyone's retirements, but instead of investing it they spent it as fast as it came in the door. That's what the Clinton "boom" was -- a systematic raping of the entire nation's retirement accounts.
It's as if a father told his son to start saving for college. Every week the son would dutifully mow all the neighbor's lawns and give the money to dad to put in his savings account. Dad kept updating his passbook showing that Son's savings were growing. He even calculated and added in the interest. This continued for years. Son got older and got a real job. He kept giving his college savings to Dad, and sure enough, things looked great. Son's savings account passbook grew to hundreds, then thousands of dollars. Son started planning for college.
Then one day, Son came to dad. It was time for the first tuition payment. Dad told Son, "Sorry, but I haven't actually been saving that money. I've been spending it on the family. But don't worry, even though we're all broke, I still owe it to you. I just can't give you any right now.
The government just did that on a massive scale.
There is NO RESERVE
It is all pure debt unbacked by assets, and now the government is becoming insolvent.
An entire generation of seniors is about to discover what it means to be totally, completely screwed.
Technically, Quid is right. The Greenspan commission built up a huge reserve of bullshit.
The SS debt is backed by the full faith and credit of the United States, just like money owed China or private individual and corporate bondholders. Future taxpayers are on the hook to pay it off.
The only way seniors could get screwed out of it is the voters are stupid enough to elect politicians who'll basically steal their retirement money to pay off foreign and corporate bondholders. Americans are not that...
...what am I thinking. Anonymous I, of course you're right - we're totally screwed.
My general response closely parallels eb above.
The Greenspan deal was to undertax the wealthy and undertax FICA payers, largely two disjoint sets of people.
The lawnmower analogy does not obtain.
The government's reserve is the a portion of the trillions of dollars the rich have collected through their hard work of investing their Greenspan tax cuts over the past 25+ years.
Like eb, I will give a golfclap if the Republicans manage to erase the back end of this deal, or the Dems let them.
oops. "overtax" FICA above.
The Greenspan deal was to undertax the wealthy and [over]tax FICA payers, largely two disjoint sets of people.
Point taken that we've always had an income tax, not a property tax. Income and wealth are two different things.
The lawnmower analogy does not [apply]
The government's reserve is the a portion of the trillions of dollars the rich have collected through their hard work of investing their Greenspan tax cuts over the past 25+ years.
In other words, in your mind, the "government's reserve" for paying off Social Security is the private property of wealthy citizens. You are advocating government seizure of wealthy people's property to pay government debt.
erase the back end of this deal,
The current administration can no more "erase the back end" of Social Security than the Obama Administration "erased the back end" of Bernie Madoff's deal with his clients.
The money won't exist and they can't raise it.
Specifically, the Obama administration wants to force people with 401Ks and IRAs to convert their retirement funds into treasury bonds so that the government can keep paying off Social Security.
You are advocating government seizure of wealthy people's property to pay government debt.
yes, that's exactly what taxes are. If the wealthy can dodge this two trillion dollar bullet this century, more power to them.
The fact remains that the wealthy of this country have been undertaxed by approximately $7.9T thus far.
the money won't exist
The only way money is destroyed is when someone lights a cigar with it.
Charitably, the Greenspan deal was wise policy in allowing working FICA payers to pre-fund their retirement by holding the safest class of investment, and allow the wondrous Invisible Hand (pbuh) to engage in massive capital formation thanks to the Reagan and Bush II tax cuts on the wealthy.
Oh, and your "Obama's taking my 401K" is bullshit. AFAICT they will open up treasurydirect.gov to individual savings to make it easier for people to directly invest in government debt.
I was differentiating between seizure of income vs seizure of held property. There is a vast difference.
That's a big reason why the economy is in the crapper and will be for the rest of the Obama administration. The wealthy are protecting their capital and reducing their incomes. Now is not the time to expand business and take chances. Now is the time to minimize business and minimize taxes.
Your attitude that people like you, meaning liberals and Democrats, have some sort of right to help yourself to other people's property is a big part of the problem. Most of the problem, actually.
I'm actually a geolibertarian who would prefer we tax land values, first, last, and most.
But I'm also pragmatic and believe government has a great role in creating a superior quality of life compared to minarchy or the typical corporatocratic conservatopia.
Ie, we can learn a lot from Canada and the Eurosocialists.
Actually at this point I don't really hold much expectation that this nation can produce good government. Every people gets the government they deserve, good and hard, as the wise man said.
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