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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (44922)	8/17/2010 7:12:57 PM
From: TimF	Read Replies (2) \| Respond to of 71588

ocial Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. "So-called" is important, since it isn't really a trust fund. Its a government IOU to itself. Its essentially meaningless. As both the creditor and the debtor the government could arbitrarily set it to be 1000 times as big, or make it zero, or negative. The only difference would be that under the social security law when it runs out benefits have to be cut, so if it was bigger you would push off the cuts, and if it was zero the cuts would have to be made now. But if that part of the law where changed than having a "trust fund" with a quadrillion dollars would have the exact same effect as having a "fund" with $1. If your going to pay the money to the Social Security recipients, and the SS tax doesn't cover it, then it will come from other taxes whether the trust fund has all the money in the world or nothing. If your not going to pay the money (or are only going to pay part the way the current law calls for once the "trust fund" is exhausted, well you could make the same decision whatever level of money is in the "fund". The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come. Their main headline figure estimate may be too pessimistic. It may also be too optimistic. Meanwhile, an aging population will eventually (over the course of the next 20 years) cause the cost of paying Social Security benefits to rise from its current 4.8 percent of G.D.P. to about 6 percent of G.D.P. To give you some perspective, that’s a significantly smaller increase than the rise in defense spending since 2001 Only if your measuring percentage increase in the money spent on the program. Not if your measuring the percentage of GDP added to the program. And certainly not if your measuring the additional dollars being spent. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count Because they don't. The "trust fund" is an accounting gimmick. Its as if I borrowed money from my retirement account to fund a sports car purchase, and then put IOUs in my retirement account and figure that means my retirement is covered. The important figure is the total income and outgo from the government. Shuffling money between different parts of the government doesn't create an asset. So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K. In order to avoid a sudden harsh cut of benefits, or alternatively a fiscal crisis, we keep benefits from rising as much as they otherwise would have, in a planned out way that lets people know what to expect. The actual amount spent would not have to be cut. Each year more dollars would be spent than the one before (at least until the baby boomers mostly die, then once again after that point as rising life expectancy drives up the number of people who are over the retirement age assuming its not indexed to life expectancy which it probably won't be) both in real and nominal terms. Also the payments for individual would continue to rise, they would not be cut. They just would not rise as much. Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution 1 - Conservatives don't think that government is always the problem, even most libertarians (who after all are not anarchists) think its ALWAYS the problem. 2 - Social Security is essentially a ponzi scheme with the difference being that it can force new people in to the scheme. It is a problem.

To: DuckTapeSunroof who wrote (44922)	8/23/2010 11:30:07 PM
From: Peter Dierks	Read Replies (1) \| Respond to of 71588

Paul Krugman, Comic Genius By R. Emmett Tyrrell, Jr. on 8.12.10 @ 6:08AM WASHINGTON -- The other day New York Times columnist (and Nobel Laureate, though he has yet to be found guilty of plagiarism or fabrication) Paul Krugman indulged one of my favorite pastimes. He engaged in vituperation. He affected a superior pose and lamented that so many of the other superior types had been taken in by mere hucksters. Alas and goddamn! Said he: "One depressing aspect of American politics is the susceptibility of the political and media establishment to charlatans. You might have thought, given past experience, that D.C. insiders [of his quality of mind] would be on their guard against conservatives with grandiose plans. But no...." His target was Congressman Paul Ryan and Ryan's effort to eventually balance the budget in light of the huge challenges facing America today from the cost of entitlements and the yearly budget deficits as far as the eye can see. Ryan calls his plan "A Roadmap for America's Future." Krugman is Ryan's sworn enemy. Though I have never seen Ryan described as "intellectually audacious," Krugman insists that the term is a commonplace and goes on to josh, "But it's the audacity of dopes." He throws around the word flimflam, as in "he's [Ryan is] serving up leftovers from the 1990s, drenched in flimflam sauce." He uses flimflam elsewhere and concludes that "The Ryan plan is a fraud that makes no useful contribution to the debate over America's fiscal future." Well, the agelastic sap is trying his best to be a wit, and I say give him a pass. He is a prof at Princeton and laughter in those parched precincts has been banned since around the 1920s when the students and the junior faculty were suspected of reading Mencken and Nathan's American Mercury and concluding that they were even funnier than Marx (Karl not Groucho). That offended the profs. I, at least, found "audacity of dopes" mildly amusing, and I laughed aloud at flimflam used as a sauce or perhaps it was the idea that the decade of the 1990s was an unalloyed economic failure. I really cannot remember which, but I laughed. Yet, Krugman's main criticism of "A Roadmap for America's Future" is in error, and possibly intentionally so. Those Washington insiders that he is patronizing are not too smart. He claims that the "Roadmap" does not raise the revenues necessary to cover Ryan's cuts -- thus it is flimflam. In response to similar criticism Ryan has written, "Our nation's fiscal crisis is the result of Washington's unsustainable spending trajectory, not from a lack of sufficient revenue." And he goes on, "The tax reforms proposed and the rates specified were designed to maintain approximately our historic levels of revenue as a share of GDP....If needed, adjustments can be easily made to the specified rates to hit the revenue targets and maximize economic growth. While minor tweaks can be made, it is clear that we simply cannot chase our unsustainable growth in spending with ever-higher levels of taxes. The purpose of the Roadmap is to get spending in line with revenue -- not the other way around." Now it is always possible that Krugman has not actually followed the debate over the Roadmap and argues from ignorance. This happens quite often with him. Yet all Americans should be following this debate over how to address looming entitlements and our budgetary shortfalls. Frankly, I think we have entered a new era. Americans are willing to take cuts in their entitlements for the good of the economy and the wellbeing of future generations. As for Krugman, give him a polite laugh. Ha ha, professor, "leftover from the 1990s, drenched in flimflam sauce." That is a good one, and how are we going to get the economy growing again with tax hikes flambé? spectator.org