05 Feb 10
4 edits
Originally posted by telerionYes. This is the way it works.
About SS:
Let's make sure that every understands that it's not a retirement program. It is a complicated income redistribution mechanism primarily from workers to the retired. This means that the payroll taxes you put in are not promised to you (with interest) in the future. Your money now goes to old people. Assuming the SS is still in place when the end, the winners are the old people that won't be around to suffer the consequences.
The problem is that no matter how hard you try to explain this, many people still get confused. It doesn't help when people can sell lots of books by arguing hysterically that the social security system is about to evaporate!!
That is one reason why we need to abandon the whole trust fund thing. It would remove a lot of needless complexity.
Either that, or we could eliminate the general budget entirely and instead go with whodey's idea of giving EVERY major program or program-group (including the Dept of Defense) its own dedicated tax and trust fund - with a requirement that all payments for these programs MUST come from their respective trust funds.
This would eliminate general unpaid-for tax cuts - any tax that was cut would have to reduce the program it was dedicated to. And any new spending would have to come with a tax increase to keep the program solvent.
05 Feb 10
1 edit
Originally posted by whodey9/11 contributed to the recent recession which we seemed to have pulled out of fairly quickly.
Social Security is more important to the economy that defense? So lets say the US was attacked again like on 9/11. What would happen to the economy then I wonder? In fact, the last I heard the US is due to be attacked again in another 6 months from what we hear in the news.
Terrorism didn't cause the Great Depression.
06 Feb 10
Originally posted by whodeyYou are right to worry about the bond rating. I have heard it may take five years, but if something isn't done, it will be downgraded. that means it will be much harder to sell bonds.
My warning is of an possible upcoming lowering of the US bond rating among other things. Either you disagree with my concern or you have no concern regarding this. Debt is OK so long as you don't let it get out of hand.
I also heard that the deduction for S.S. will raise, to pay for those now on it? Not sure how credible that remark was.
06 Feb 10
1 edit
Originally posted by Hugh GlassJapan doesn't seem to have that much problems selling their bonds, with 200% of GDP in debt. (though I expect Japan's soaring debt to spark the next economic crisis)
You are right to worry about the bond rating. I have heard it may take five years, but if something isn't done, it will be downgraded. that means it will be much harder to sell bonds.
I also heard that the deduction for S.S. will raise, to pay for those now on it? Not sure how credible that remark was.
06 Feb 10
1 edit
Originally posted by KazetNagorraglobal warming hysteria and fiscal warming hysteria have a LOT in common
Japan doesn't seem to have that much problems selling their bonds, with 200% of GDP in debt. (though I expect Japan's soaring debt to spark the next economic crisis)
America does have serious budget issues that need to be addressed - but the fact that Japan hasn't sunk into the ocean is a very good point.