Thursday, March 24, 2011
Committee for a Responsible Federal Budget:Recently discussed by Paul Krugman ( Peacocks on Parade 21 Mar): it’s become more and more clear that the committee’s real purpose isn’t to balance the budget, it’s to provide additional plumage for deficit peacocks and Brad DeLong ( What Is the Purpose of the Committee for a Responsible Federal Budget? 21 Mar) For a long time I have wondered whether the true purpose of the Committee for a Responsible Federal Budget is to attempt to get a responsible long-term federal budget or to provide a safe harbor for politicians--primarily Republicans--who want to burnish their reputations as deficit hawks without actually doing anything to balance the long-term federal budget.
Now Stan Collender and Paul Krugman appear to have decided that it is the second. Maya MacGuineas of the CRFB was interviewed Wednesday (23 March) on a Los Angeles progressive radio station (KPFK) by Ian Masters (you can get the podcast). At one point (48 minutes in) Social Security was brought up and Masters said that he thought Social Security was in good financial shape. Maya MacGuineas said the following: Social Security is now running cash flow deficits. And while the money has been put away in the trust fund and Social Security has a "claim" on government revenues for the next 25 years, it doesn't have the money to pay for those benefits and so the rest of the government is going to have to provide it to Social Security to the tune of about $600 billion over the next decade. Now we may decide that that's our most important priority and that that's what we should do, but it also leaves large deficits in the Social Security program which we are now being faced with, necessitate that we at least think through whether that's how we want to be spending the $600 billion next year. And if so, where's it going to come from? The way the government trust funds work is it's not set aside in a way that's been saved, it's set aside in the way that it financed other government priorities. Now the government is going to have to pony up and figure out where to find that money. And that will not be an easy task. MacGuineas dismissed the obligation to honor the Social Security bonds as a mere 'claim' that we may decide to ignore. That should tell you all you need to know about where the CRFB stands.
posted by Quiddity at 3/24/2011 11:38:00 AM
9 comments
It's always bad times when a Ponzi scheme unravels.
or two decades of right wing propaganda takes hold.
They can only steal $50,000 from me, less actually since my mom is withdrawing $11,000 or so a year, so I have no dog in this fight.
The surplus was not a ponzi, and social security is not a ponzi.
The US government was not a ponzi until the Republicans got into power in 2001 and proceeded to gut it.
You guys are really great at that. Go you.
Social Security has been a Ponzi for decades. As soon as it became clear that the birth rate in the United States was going to decline, the Ponzi nature of Social Security was clear. That was the whole purpose of the trust fund -- to push the collapse far enough into the future that the baby boomers could all enjoy a long retirement and die off before the "trust fund" ran out in 2037 or whenever, and the whole system collapsed.
Social Security was gutted by demographics, not Republicans. Americans are not having enough children. That is the problem, plain and simple. I have suggested, only half kidding, that Social Security benefits should be based on the number of children you have contributed to the workforce. How can a person choose not to have children, then expect to receive Social Security checks drawn from the wages of a declining demographic?
You can keep saying that the "surplus" was not a Ponzi, but it is. There are an ever-increasing number of people who expect to receive money from the system, and an ever-decreasing number of people who are paying money into the system. The balance has just tipped negative. Either adjust Social Security payouts to match revenue, or the system is going to collapse. And it isn't going to happen 25 years from now. It's happening right now.
>could all enjoy a long retirement and die off before the "trust fund" ran out in 2037 or whenever, and the whole system collapsed.
Wrong. After the $2.5T trust fund is redeemed to cover the baby boom, benefits will not have to be reduced at all in pay-as-you-go system.
If we want to keep benefits tracking rising wages, we will need to increase contributions, if we don't payouts will have to be scaled down to 80% of current levels.
Stop lying JMS.
>and an ever-decreasing number of people who are paying money into the system.
With unemployment, I don't see the problem with less population growth.
The bottom line is the people who pay 70% of the taxes in this country -- the top 10% -- now want to avoid having to kick in to make good on the trillions of SSTF obligations that the USG has issued.
The SSTF taxed that money for SSI benefits, if that $2.6T is just dismissed as ponzi it will be one of the greater thefts in history.
>Either adjust Social Security payouts to match revenue,
Actually I'd like to raise contributions gradually to cover future payouts.
>And it isn't going to happen 25 years from now. It's happening right now.
Only if SSTF's $2.6T trust fund is not redeemed.
Like I said, I'm really rooting for you bastard on this. It's not going to come out of my pocket, and if the American people are too stupid to stop it, well, that's their problem.
Posts like this just make me wonder. Do you have any idea how utterly surreal your arguments are? It's not as if this is some new, crazy, out of left-field idea. Go look at the CBO's long term projections. It's all right there:
http://www.cbo.gov/ftpdocs/96xx/doc9649/MainText.3.1.shtml
I'm talking about figure 2. That's where Social Security benefits start from a regular 4.5% of GDP, enter a huge balloon where Social Security benefits bloom up to almost 6% of GDP -- the part where your generation pays and pays, pouring ever-increasing amounts of general revenue into paying massive, UNJUSTIFIED benefits to the generation that invented the trust-fund scam. Then, there's the cliff, which is when it is time for YOU to retire, and benefits go plunging through the floor. You're perfectly willing to spend your entire working lives playing the sucker, squeezing your eyes as tightly closed as you can, and chanting "It can't happen. It can't happen", then finding out that, duh, The conservatives were right. Again.
The theft happened long ago. The money was taxed and spent. It was not invested. There is no difference between what the government did and what Madoff did. They took huge amounts of everyone's retirement money, promised to invest it, then spent it instead.
It is no longer a question of whether the American people "are too stupid to stop it". The American people were to stupid to stop it long ago, when it started. And it wasn't right-wing propaganda. Al Gore's "lock box" was pure left-wing propaganda propping up a left-wing Socialist government retirement program.
What I find most amazing are people who talk about how Bill Clinton must have been a great president because he had a huge budget "surplus", then can't figure out why Social Security is insolvent 10 years later. I hope you enjoyed the 1990s.
jms blithered, The money was taxed and spent. It was not invested.
If true, how is that any different from bonds held by non-government parties?
Mostly volume. If you loan me $10 and I spend it, you'll get it back. Loan me $10,000,000, and I spend it, and that's a different story. Not because I don't want to repay it, but because I can't.
jms seems to be proposing his own Ponzi scheme by borrowing a tenner, promising to pay it back, perhaps with future tenner borrowings from other lenders to him. No, this won't work by asking for a loan of $10 million. Hmm. Does jms' middle initial represent Madoff?
Not at all. If I borrow a tenner, I don't have to pay it back from future tenners borrowed from other people. I can pay it back out of my next paycheck, with interest if you like, because a tenner is well within my earning power. That's savings bonds.
If I borrowing ten million from you, then spend it, that's Maddof. Or Social Security.
|
