Fiscal Cliff

[Pliny]

Like I said Obama proposed 1.6 trillion in new revenues and 2.4 trillion in cuts.

What's the fiscal cliff threatening? Sounds like it isn't much different than what Obama is proposing.

[dre]

What's the fiscal cliff threatening? Sounds like it isn't much different than what Obama is proposing.

Well the fiscal cliff will result in more cuts faster, and it will raise taxes for all Americans. Obamas propose will result in lower taxes for 98% of people, and stretch the cuts out over the next 10 years.

Im not much of an Obama fan, in fact I wouldnt trust either the democrats or republics to operate a small goat farm... But the proposal seems pretty reasonable.

Edited November 19, 2012 by dre

[Pliny]

Well the fiscal cliff will result in more cuts faster, and it will raise taxes for all Americans. Obamas propose will result in lower taxes for 98% of people, and stretch the cuts out over the next 10 years.

Im not much of an Obama fan, in fact I would trust either the democrats or republics to operate a small goat farm... But the proposal seems pretty reasonable.

No one seems to be mentioning that Obamacare is a tax and not just for the richest 2%. The middle class will have to pay that tax but it might be cheaper to pay the fine then get medical insurance and many will choose that option which was the design anyway to decimate the medical insurance industry thus making the government the sole payer.

Those extremist radical founders that broke away from King George to escape taxes and ominous government would sure be surprised.

[dre]

No one seems to be mentioning that Obamacare is a tax and not just for the richest 2%. The middle class will have to pay that tax but it might be cheaper to pay the fine then get medical insurance and many will choose that option which was the design anyway to decimate the medical insurance industry thus making the government the sole payer.

Those extremist radical founders that broke away from King George to escape taxes and ominous government would sure be surprised.

Yeah the individual mandate is a mistake and something Obama campaigned against. PRoblem is once he was in power he found himself up against the two most useless entities in the history of human democracy... the democrat and republican political parties. So he did what they LET him do.

[Pliny]

Yeah the individual mandate is a mistake and something Obama campaigned against. PRoblem is once he was in power he found himself up against the two most useless entities in the history of human democracy... the democrat and republican political parties. So he did what they LET him do.

So should we legitimately be calling it Obamacare if it isn't what he wanted? That's just a shucking of responsibility. Once again Obama didn't build that - someone else did! He hasn't taken any responsibility for the economy yet, still blaming it on Bush or Congress. Wanna see what he does after inheriting his own mess. Bet he still says it's all someone else's fault, still Bush - Wall St. - the global economy, "I didn't build that!". Awwww...poor Barack...

[bush_cheney2004]

No one seems to be mentioning that Obamacare is a tax and not just for the richest 2%....

The ObamaCare tax was highlighted in October in the way of an example IRS tax form from opposition groups to declare health insurance status and assess the tax for yearly flings. It made a small splash in US media just prior to the election. The mandated tax won't be effective until the 2014 tax year, and the 2012 Supeme Court ruling had the effect of squelching any serious threats to phasing in the rest of "ObamaCare". Many taxpayers without health insurance coverage will just pay the penalty.

[login]

I think managing the US budget and removing the debt is much more complex than the Canadian budget, but I think I could balance it and remove the debt. The main issue however is that it would just offload to the states who would then be forced to scale down their operations.

It is clear though, a place to start is prisons. Toomany americans are in jail, they should just make a colony. Like Micronesia or wake island or something.

Second, the US should support militias. and concentrate more on mutual destruction as opposed to foreign intervention. At the same time it could stop spending ridiculous amounts of money on R&D and cut Intellectual property law.

Meanwhile it should gut the public service - by mass privatization.

It also needs to have direct debt paydown. By a death tax, and a junkfood tax (including coffee someething like 5 cents)

It needs to legalize drugs but tax them heavily especially heroine and cocaine and sell directly as amonopoly.

they could make federal agencies voluntary. and impose the death penalty for any felonies.

Instead of raising taxes they can take two steps, one super inflate the currency by cutting off foreign imports. andsecond by introducing a new currency the Amero with the picture of a bullet on one side and the president on the other (maybeonly a sligth cost saver)

tied to silver and gold bullion of course.

Nationalization of the banks is a last ditch effort. Hyper inflation and a new currency are the only answers.You can't make money a private monopoly to produce and expect not to go into debt, it is absurd.

If you want money just tax the lenders it is a no brainer.

The system is designed for failure because it was designed by the lender.

Every fiat country/organization has been shut down.

Tamil tigers, osama, gadaffi's AU gold dinar (partially), liberty dollars, the list goes on. Fiat is the answer.

congress can mint silver. commodities continue to increase in price (in comparison of the US dollar) its clear the US can make more money making silver fiat than dollars because it increases in value not depreciates.

Edited November 29, 2012 by login

[dre]

Iv been thinking about this a bit and I have a prediction, based on the general abject uselessness of the democrat and republican parties and their inability to solve any problems at all.

I dont think there will BE a "fiscal cliff".

They wont come to an agreement, time will run out, and they will just legislate it away. No spending cuts, no tax hikes, no nothing.

[Bonam]

They wont come to an agreement, time will run out, and they will just legislate it away. No spending cuts, no tax hikes, no nothing.

That would take them agreeing on legislation. I think rather what will happen is the agencies mandated with implementing "sequestration" will be directed to do so in a very slow way. For example, the IRS doesn't have to update their withholding tax rates right away on January 1st, as long as the taxes are collected by year's end. That will basically give legislators another year to ineffectually throw insults at one another.

[bleeding heart]

It should be indexed to be some % of life expectancy, so as people live longer and longer they don't end up also spending longer and longer as beneficiaries of government programs.

Considering how long it's been at the current level, and the difference in general life expectancy at its inception, you've got a strong argument there.

[Bitsy]

It should be indexed to be some % of life expectancy, so as people live longer and longer they don't end up also spending longer and longer as beneficiaries of government programs.

Life expectancy in the US is 78 years. Considering that many begin their contribution to Social Security in their teen years, at what age do you think they should be able to begin to draw their money without reduced benefit?

[Bonam]

Life expectancy in the US is 78 years. Considering that many begin their contribution to Social Security in their teen years, at what age do you think they should be able to begin to draw their money without reduced benefit?

Notice I said "some %", because the actual % would obviously be up for a lot of vigorous debate. But for starters, I could say set the retirement age to 86% of life expectancy. That would mean that right now with a life expectancy of 78 years, the full benefits retirement age would remain unchanged, at 67 years. But, this would at least protect the economy in the event that life expectancy continues to go up in the future, as I think it will. For example, when life expectancy increases to 90 years, the 86% rule would have increased retirement age to 77 years.

Note that it should be related to your life expectancy at birth. So your retirement age is defined when you're born, it's not uncertain based on changes in life expectancy throughout your lifetime.

Edited November 29, 2012 by Bonam

[Canuckistani]

Notice I said "some %", because the actual % would obviously be up for a lot of vigorous debate. But for starters, I could say set the retirement age to 86% of life expectancy. That would mean that right now with a life expectancy of 78 years, the full benefits retirement age would remain unchanged, at 67 years. But, this would at least protect the economy in the event that life expectancy continues to go up in the future, as I think it will. For example, when life expectancy increases to 90 years, the 86% rule would have increased retirement age to 77 years.

Note that it should be related to your life expectancy at birth. So your retirement age is defined when you're born, it's not uncertain based on changes in life expectancy throughout your lifetime.

All very good, but you'd better make sure then that those people all have jobs if they can't retire, and that those are jobs they can actually do. Just because you're alive, doesn't mean you can do a heavy labor job, for instance. And if all those people can't retire, that kinda sucks for the young people that want to enter the labor force.

In France, older workers face a tough dilemma. France is very ageist and will fire people in their fifties to get in new blood. France has generous pensions, but they don't kick in until people are in their sixties. Many of these formerly middle class workers live in abject poverty for a number of years before their pensions kick in and they're ok again. They exhaust any savings they have and may lose their house. Doesn't sound like an ideal situation to me. If you make retirement age too late in Canada, many seniors will face the same situation here.

Edited November 29, 2012 by Canuckistani

[Bonam]

All very good, but you'd better make sure then that those people all have jobs if they can't retire, and that those are jobs they can actually do. Just because you're alive, doesn't mean you can do a heavy labor job, for instance. And if all those people can't retire, that kinda sucks for the young people that want to enter the labor force.

So what do you propose, that as life expectancies rise, that people just spend more and more of their life on government pensions? What if life expectancies become 100 years, 200, 300? If someone lives for 300 years but works for only 40 of them and spends the rest of their lives collecting does that make any sense? I deliberately chose huge numbers there just to illustrate the point. Those numbers may seem crazy but remember that human life expectancy has doubled in the last 150 years, it could well double again in the future.

Anyway, healthy lifespan is correlated with life expectancy. People that are living into their 80s and 90s were likely still able to work in their late 60s and early 70s. Further, people can and should save for their own retirements, and should feel entirely free to retire as early as they wish if they have enough of their own savings to do so. And for those that become unable to work, remember, there are always other options, such as disability, welfare, insurance, etc.

Edited November 29, 2012 by Bonam

[dre]

So what do you propose, that as life expectancies rise, that people just spend more and more of their life on government pensions? What if life expectancies become 100 years, 200, 300?

I propose we let people decide for themselves, and adjust their CPP contributions accordingly.

If you want to retire at 50, you pay X.

If you want to retire at 60, you pay Y.

If you want to retire at 80, you pay Z.

And make it illegal for government to loot the trust fund.

[Canuckistani]

I propose we let people decide for themselves, and adjust their CPP contributions accordingly.

If you want to retire at 50, you pay X.

If you want to retire at 60, you pay Y.

If you want to retire at 80, you pay Z.

And make it illegal for government to loot the trust fund.

Very hard to make that decision early in life. You don't know your career path, you don't know what your health will be when you're older, etc.

I propose that a modest pension be in place as it is now - at 65 or 60 if you take a reduced amount. The OAS should also kick in at 65, but the qualifying income amount for it should be greatly reduced. People earning 60k in retirement don't need OAS on top of it, let OAS stop at 30K.. If pensions are modest, but keep people out of the poor house, then the incentive will be there to work if you can. Do do that, attitudes of employers need to change - they often let older workers go because younger ones are cheaper or perceived to be better workers. You can't squeeze people by denying them jobs on the one hand and pensions on the other.

[Bitsy]

Notice I said "some %", because the actual % would obviously be up for a lot of vigorous debate. But for starters, I could say set the retirement age to 86% of life expectancy. That would mean that right now with a life expectancy of 78 years, the full benefits retirement age would remain unchanged, at 67 years. But, this would at least protect the economy in the event that life expectancy continues to go up in the future, as I think it will. For example, when life expectancy increases to 90 years, the 86% rule would have increased retirement age to 77 years.

Note that it should be related to your life expectancy at birth. So your retirement age is defined when you're born, it's not uncertain based on changes in life expectancy throughout your lifetime.

Even if I lived to 78, I will never receive the monies that my employer and I contributed to SS. Those monies will stay within the system to pay for future generations, and I have no problem with that since I was able to provide for my heirs with other retirement vehicles. But to make a person's funds inaccessible to and force them to stay in the work force late into their 60’s with failing health and an ever changing job market just to keep taxes low for the 2% is unconscionable

[Bitsy]

So what do you propose, that as life expectancies rise, that people just spend more and more of their life on government pensions?

Bonham, SS is not a govenrment pension. The government contributes nothing to my SS account. My employer and myself are the only contributers and it is to be held in trust for me by the govenrment until i reaach retirement age.

[Bonam]

Bonham, SS is not a govenrment pension. The government contributes nothing to my SS account. My employer and myself are the only contributers and it is to be held in trust for me by the govenrment until i reaach retirement age.

No, that is not the case. The contributions of others to social security are used to help pay your benefits. The seniors retiring today never contributed anywhere close to the amount of money to social security as they are likely to draw from it. Further, social security is underfunded, and the generation of young people currently paying into it cannot expect benefits that are as generous as the seniors currently drawing from it, even though social security tax rates are higher now than they were in the past. Social security is a wealth transfer program from the current generation of young workers to a bunch of old seniors who lived through the most prosperous economic times in history and had plenty of opportunities to save money for themselves. It is a ponzi scheme, relying on an ever growing base of contributors to fund existing retirees, and as demographics are now changing towards an aging population, is becoming completely unsustainable.

Personally, I would be more than happy if individuals simply had the right to opt out of social security. Unfortunately that's not the case, because if people were able to opt out the system would collapse, and the reason for that is precisely because it is NOT self-funded as you seem to think.

Edited November 30, 2012 by Bonam

[dre]

No, that is not the case. The contributions of others to social security are used to help pay your benefits. The seniors retiring today never contributed anywhere close to the amount of money to social security as they are likely to draw from it. Further, social security is underfunded, and the generation of young people currently paying into it cannot expect benefits that are as generous as the seniors currently drawing from it, even though social security tax rates are higher now than they were in the past. Social security is a wealth transfer program from the current generation of young workers to a bunch of old seniors who lived through the most prosperous economic times in history and had plenty of opportunities to save money for themselves. It is a ponzi scheme, relying on an ever growing base of contributors to fund existing retirees, and as demographics are now changing towards an aging population, is becoming completely unsustainable.

Personally, I would be more than happy if individuals simply had the right to opt out of social security. Unfortunately that's not the case, because if people were able to opt out the system would collapse, and the reason for that is precisely because it is NOT self-funded as you seem to think.

The contributions of others to social security are used to help pay your benefits.

Yes thats called insurance. And the biggest reason social security is underfunded is because the government looted the SS trust fund.

[dre]

Very hard to make that decision early in life. You don't know your career path, you don't know what your health will be when you're older, etc.

I propose that a modest pension be in place as it is now - at 65 or 60 if you take a reduced amount. The OAS should also kick in at 65, but the qualifying income amount for it should be greatly reduced. People earning 60k in retirement don't need OAS on top of it, let OAS stop at 30K.. If pensions are modest, but keep people out of the poor house, then the incentive will be there to work if you can. Do do that, attitudes of employers need to change - they often let older workers go because younger ones are cheaper or perceived to be better workers. You can't squeeze people by denying them jobs on the one hand and pensions on the other.

Very hard to make that decision early in life. You don't know your career path, you don't know what your health will be when you're older, etc.

Im not talking about allowing people to opt out. Everyone would have to pick at least the most basic option.

[Shady]

Yes thats called insurance. And the biggest reason social security is underfunded is because the government looted the SS trust fund.

The problem with social security, is that recipients receive much more money than they pay into it. And the program can only continue with new recipients paying into the program, paying for current retirees, not their own retirement. When social security was designed, life expectancy was less than 65. So many people died before ever collecting benefits. Now life expectancy is 80. People are living 20 to 30 years on social security. It was never designed for that. Not only that, because of the baby boom, there are more people retiring than can be supported by workers. There were several workers per retriree back in the day. Today there's about 3 workers per retiree. Soon it will be one to one. It needs to be reformed.

[Bonam]

Right now, people pay 12% of their income into social security throughout their life, about a 45 year career. That's 5.4 salary-years that you contribute. Social security benefits for someone making around average income are about 50% of what their income was. If they live to their life expectancy of 78 and retire at 65, that's 13 years at 50% salary, or 6.5 salary-years. So assuming a bit of modest growth on the investment it's well balanced, conservative even. But if life expectancy rises to say 100 years and you still retire at 65, then it's 35 years at 50% salary, which is 17.5 salary-years, more than triple what you paid in.

The reality is simple, as life expectancy increases, either the retirement age has to increase, or the contribution rate will have to increase, or social security will go bankrupt. And I don't think anyone will be to happy to pay a 30% tax for social security. People will have to face up to the fiscal reality of the program.

[dre]

Again the problem isnt the structural sustainability of the system. As of 2010 there was nearly 2.7 Trillion dollars in the SS trust and by the end of 2011 it had grown by about another 80 billion. Yes in many cases people take out more than they put in but the money is invested in securities.

The main problem is that the government has looted the fund and used it to blow up random darkies.

Obviously the program is vulnerable to both increased life expectancy or gluts of people retiring during a relatively short period of time but theres a whole bunch of different ways those imbalances could be addressed.

1. Wages could grow faster than inflation.

2. Benefits could be decreased.

3. Payments could be increased.

4. The retirement age could increase.

And the reality is without SS a lot of these people would be on government assistance anyways in programs like welfare that are funded by general revenue as opposed to people actually paying into an insurance program.

So overall the program SAVES the state money. And all thats required to keep it stable in the face of increasing life expectancy is minor adjustments or strong economic growth.

[TimG]

Again the problem isnt the structural sustainability of the system. As of 2010 there was nearly 2.7 Trillion dollars in the SS trust and by the end of 2011 it had grown by about another 80 billion. Yes in many cases people take out more than they put in but the money is invested in securities.

It is invested in US government bonds which essentially means the 'investments' are accounting fictions.

The main problem is that the government has looted the fund and used it to blow up random darkies.

Nonsense. The fund has always been used to buy US government debt. Spinning it as 'looting' to support a particular policy choice by one administration is dishonest claptrap.

So overall the program SAVES the state money. And all thats required to keep it stable in the face of increasing life expectancy is minor adjustments or strong economic growth.

Benefits need to go down and payments need to go up.