Good for some people in the economy, that is.
It is just another means of trying to “control” the economy, to make sure the government isn’t overthrown.
I’m not suggesting retiring the debt. That’s more sacrifice than we need to make and the taxes required would slow the economy. What we need are some guardrails so that at least in good times we only add a small amount of debt. We need to do this so that when there is a crisis like a war or another depression or pandemic we can respond financially.
Look at the deficits that we ran up during COVID and much worse during WWII. We could only do that by being relatively responsible at other times. Large deficits are an emergency measure but increasingly everything is being treated like an emergency.
4 Likes
Yeah, terms like “balanced budget” and “zero deficit” aren’t paying off the debt or even paying it down. Just not letting it grow. We could / would still issue new debt… as old debt matures and is paid off.
Seems like we could strive for a balanced budget in “normal” times and then increase the deficit only when we are in recession.
2 Likes
It is disconcerting that the CBO is projecting federal deficits exceeding $1 trillion per annum for the next decade while other first world countries are seeing dramatic drops in government spending deficits as the spending on COVID programs ends. Reducing the US deficit should not be an impossible task? A trillion dollar deficit in a recession would not be surprising: in a strong economy it is worrying.
It’s Medicare and Social Security spiraling out of control.
We need to get DARPA working on a new Soylent Green project.
At least for Social Security, benefits are “supposed” to automatically be cut when the bonds held by the trust fund have all been redeemed.
(I suspect that Congress will happily authorize even bigger deficits rather than cutting Social Security benefits to match revenues.)
Impressed the GOP even brought up SS/medicare cuts. Good for them. The usual solution is to cut Big Bird.
Agreed. It would be political suicide for any party to allow social security benefit cuts to happen.
Not for seniors already collecting benefits, no. I agree with you there.
The 1982 change was essentially a benefit cut dressed up to look like it wasn’t a benefit cut. But it only cut benefits for people under 45 … people more than 20 years from their SSNRA under the old rules. Not only were those already getting benefits unaffected… the next 20 years of retirees were also unaffected. Which only helped the outflows 20 years down the road… not right away.
Is it SS? Or is it demographics? For 10,000+ years, the elderly have survived off the labor of the following generation. Nothing weird about that at all. Cutting SS won’t change that fact. You’ll just cover the cost in other ways.
Have fun rooming with Grams and your parents. Don’t be surprised if they take forever in the bathroom.
1 Like
That was also the group I was thinking of as they vote in massive numbers.
1 Like
Works both ways. One of my children and our grandchildren have been living with us for almost a year and we look after them rather than vice-versa. We spend a whole lot less time in the bathroom than them, so far.
1 Like
That is also the way it has been for 10,000+ years. Perhaps the adage is true. Charity begins in the home.
While I certainly hope SV is joking, I am not sure if his irony is purposeful. Here we have a great example of looking to the State to take care of the problem, even when he is undeniably responsible. Guns are easy to get. Get you some, SV. Take care of your parents in the manner you feel appropriate.
Then there’s the next level of irony. If the boomers (and the millennials next since They’re even more numerous) are going to consume more than they produce, then let’s reduce the burden on folks funding all that and lower their need to fund their own retirements so much. Raise the benefit - in a manner twig described. Higher benefits years in the future.
We gotta think outside the box on this. Populations shrinking is real. We best stop relying on an increasing one in our policies and economics.
Both? SS works a whole lot better when you have 6 kids and live to 58.
Actually works the same. Just like it has for millennia. SS is simply a funding mech. The problem is as old as the hills.
So we best get cracking on a suitable plan. Because medicine keeps curing stuff, and the planet sure has a lot of mouths to feed. Silly to base a plan on endless population growth. But the problem remains.
The ratio of consumers to producers is going to trend up for a while. The ratio is not constant, rather it oscillates.
Expecting a constant tax rate or benefit configuration is kinda hopeless.but the underlying principle is brilliant. Basically get as close as you can to pay as you go. We will have some drama, since as that ratio oscillates, and if our goal is pretty much to target a net zero most of the time, we are going to adjust on the fly. So let’s do that. But don’t constrain yourself to only solutions that lower benefits. It would be nice if the workers shouldering the burden today did end up with something later on.
As life expectancy increases I think it makes sense to expect people to work a little longer.
The issue with the 1982 change was that they didn’t really increase the retirement age on younger workers. I can still start drawing benefits at any time between age 62 and 70… just as my parents could. My SSNRA is one year later than my parents (and theirs is one year later than their parents), but that doesn’t affect my eligibility to receive benefits.
They need to raise both the 62 and the 70. And assume that the cost of SSDI will go up a little when they do. But the increase in SSDI cost will be dwarfed by the decrease to SSOAI cost.
They also need to fix the insane process of getting approved for SSDI. Hire some folks who spent their careers in DI claims in the private insurance industry and some folks who worked in the fraud departments of some private insurers to figure out how private insurers manage to approve claims while at the same time not allow inordinate quantities of fraud.
I’ll add that life expectancy among lower income workers has stopped increasing. It’s higher than it was in 1935, but in recent years it’s been stagnant.
Still increase the age 62 and 70 a bit to account for the increase in life expectancy for lower income workers that has occurred, IMO.
And mathematically speaking, increasing the 35 years of earnings that goes into calculating benefits to a number higher than 35 would be good too. However, in the AO days Bruce pointed out that this would never fly politically as it would hugely disproportionately affect women (who are more likely to take time off to raise kids). So I guess keep that the same and focus on the changes that are possible.
So the generation of people who didn’t save up enough money to pay themselves SS are left untouched but the people left to foot the bill also get lower benefits. Democracy in action 
Which generation is that? Baby boomers? They paid a lot in, but certainly not enough to cover their benefits. It’s kind of too late to do anything about that though. We have to start from where we are… not where we would be if people 90 years ago (or even 60) would have acted with better foresight.
I’m sure you know, but my knee-jerk reaction when I see this is always the same. If we make no changes, workers shouldering the burden today will get something later on. It won’t be as much as earlier generations, but earlier generations bore the burden of raising more kids per couple.
1 Like