Bernie Sanders puts Social Security challenge to Hillary Clinton

[SimpleDon]

Eliminate FICA, fund SS from the general fund.

The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA

http://www.huffingtonpost.com/warren-mosler/the-mmt-grand-bargain-rai_b_2268875.html

I accept MMT's theory of money and debt. I can't make the leap to their theory of funding government programs by printing money. It would quickly get out of hand. They are right in the short term but dangerous in the long term.

Taxes aren't really collected to fund the government. The government can create as much money as they need. In essence they destroy the money that you and I pay in taxes and they create the money that they spend. Taxes have one purpose and one purpose only, to reduce inflation.

There are times of economic well being when the government should be collecting more taxes and destroying the money collected than they are creating money to spend. This should be the majority of the time in fact, if we have good economic conditions and a low account deficit, the trade deficit. We should be having economic conditions that require us to aggressively fight inflation all of the time, and not celebrating lackluster economies as being The Great Moderation, as if it was desirable. And we should be providing jobs for Americans, not for the Chinese.

 

[coloradoatheist]

Yes and no. Usually the plan needs to have assets that an auditor believes would be enough to cover future costs. The US government has no assets to cover the future costs.

There are problems with the plan, but they are based on assumptions that are not panning out.

The plan assumes wages will rise over time, especially if the overall wealth of the nation is rising.

It didn't anticipate so much wealth would be taken by so few, a major flaw in the economic system.

The way you overcome this economic flaw is to tax the most wealthy who take the most and who are harmed the least by taxes.

And you apply these taxes to the SS system.

Until one day a fair realistic economic system is devised.

The growth of the economy and wages is factored into the calculations for SS. But the issue is that Bernie wants more than just this program to be funded. He wants a lot of programs to be funded and the rich don't have that much money to pay for it, so to pay for his programs everybody is going to have to contribute a lot more.

 

[Horatio Parker]

Eliminate FICA, fund SS from the general fund.

The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA

http://www.huffingtonpost.com/warren-mosler/the-mmt-grand-bargain-rai_b_2268875.html

I accept MMT's theory of money and debt. I can't make the leap to their theory of funding government programs by printing money. It would quickly get out of hand. They are right in the short term but dangerous in the long term.

Taxes aren't really collected to fund the government. The government can create as much money as they need. In essence they destroy the money that you and I pay in taxes and they create the money that they spend. Taxes have one purpose and one purpose only, to reduce inflation.

There are times of economic well being when the government should be collecting more taxes and destroying the money collected than they are creating money to spend. This should be the majority of the time in fact, if we have good economic conditions and a low account deficit, the trade deficit. We should be having economic conditions that require us to aggressively fight inflation all of the time, and not celebrating lackluster economies as being The Great Moderation, as if it was desirable. And we should be providing jobs for Americans, not for the Chinese.

It's radical, I agree.

Sanders probably agrees with you, since his economic advisor is Stephanie Kelton.

One thing, besides controlling inflation, taxes also serve the fundamental purpose of validating the currency. We need dollars to settle our tax liabilities.

At this time, according to MMT, taxes should be low and benefits should be high, with a job for anyone who wants one.

Sez Mosler:

Fact: All agree there would be no moral hazard or a waste and fraud issue with an increase in Social Security payments.

All agree that FICA is a highly regressive punishing tax on people working for a living, ideologically unacceptable to the 'left', and, of course, the 'right' is against any tax.

Fact: Even with the presumed "current unsustainable path of future spending" the Fed's long term CPI (a.k.a. "inflation") forecast remains at 2 percent, market participants via inflation indexed securities forecast equally low long term CPI increases, and there are no credible forecasts for any kind of "inflation" problem from excess aggregate demand.

 

[SimpleDon]

It's not "funded" at all. The government pays it as it goes.

That's like saying no insurance plan is funded.

They just pay as they go along.

No, it is not saving that. It is saying that there is a difference between the government and a business or a household. That the economic rules that the government works under are different for a sovereign government, and that these rules can't be changed. It doesn't make any sense to talk about a sovereign government saving. It creates the money or allows its agents, the banks, to create the money. Any money that they collect is effectively destroyed. And they create the money from thin air that they spend.

It has always been this way through history. The only things that have changed are the fables that we tell each other to convince ourselves that money has value. A useless exercise because money has value as long as we all think that it does and as long as it can buy things. This has always been true even before it was called money. When it was nothing more than the trust that if I give a gift I will receive one in the future.

 

[untermensche]

There are problems with the plan, but they are based on assumptions that are not panning out.

The plan assumes wages will rise over time, especially if the overall wealth of the nation is rising.

It didn't anticipate so much wealth would be taken by so few, a major flaw in the economic system.

The way you overcome this economic flaw is to tax the most wealthy who take the most and who are harmed the least by taxes.

And you apply these taxes to the SS system.

Until one day a fair realistic economic system is devised.

The growth of the economy and wages is factored into the calculations for SS. But the issue is that Bernie wants more than just this program to be funded. He wants a lot of programs to be funded and the rich don't have that much money to pay for it, so to pay for his programs everybody is going to have to contribute a lot more.

Of course existing conditions are figured in.

But existing conditions are not the conditions created by the gods. They are conditions created by people, and they happen to be such that an enormous amount of wealth is funneled into very few hands.

A major economic flaw because all this wealth helps the individual very little, the reason these billionaires are giving it all away, yet it harms society as a whole a great deal.

 

[coloradoatheist]

The growth of the economy and wages is factored into the calculations for SS. But the issue is that Bernie wants more than just this program to be funded. He wants a lot of programs to be funded and the rich don't have that much money to pay for it, so to pay for his programs everybody is going to have to contribute a lot more.

Of course existing conditions are figured in.

But existing conditions are not the conditions created by the gods. They are conditions created by people, and they happen to be such that an enormous amount of wealth is funneled into very few hands.

A major economic flaw because all this wealth helps the individual very little, the reason these billionaires are giving it all away, yet it harms society as a whole a great deal.

You are right, but statistical work is just estimates of what will happen.

And we disagree on the last part.

 

[aeebee50]

No cap.

 

[SimpleDon]

I accept MMT's theory of money and debt. I can't make the leap to their theory of funding government programs by printing money. It would quickly get out of hand. They are right in the short term but dangerous in the long term.

Taxes aren't really collected to fund the government. The government can create as much money as they need. In essence they destroy the money that you and I pay in taxes and they create the money that they spend. Taxes have one purpose and one purpose only, to reduce inflation.

There are times of economic well being when the government should be collecting more taxes and destroying the money collected than they are creating money to spend. This should be the majority of the time in fact, if we have good economic conditions and a low account deficit, the trade deficit. We should be having economic conditions that require us to aggressively fight inflation all of the time, and not celebrating lackluster economies as being The Great Moderation, as if it was desirable. And we should be providing jobs for Americans, not for the Chinese.

It's radical, I agree.

Sanders probably agrees with you, since his economic advisor is Stephanie Kelton.

One thing, besides controlling inflation, taxes also serve the fundamental purpose of validating the currency. We need dollars to settle our tax liabilities.

At this time, according to MMT, taxes should be low and benefits should be high, with a job for anyone who wants one.

Sez Mosler:

Fact: All agree there would be no moral hazard or a waste and fraud issue with an increase in Social Security payments.

All agree that FICA is a highly regressive punishing tax on people working for a living, ideologically unacceptable to the 'left', and, of course, the 'right' is against any tax.

Fact: Even with the presumed "current unsustainable path of future spending" the Fed's long term CPI (a.k.a. "inflation") forecast remains at 2 percent, market participants via inflation indexed securities forecast equally low long term CPI increases, and there are no credible forecasts for any kind of "inflation" problem from excess aggregate demand.

I am not worried about the MMTers doing something dangerous. I am worried about our national obsession with lowering taxes on the rich. The people who are infected with this obsession claim also to believe that our national debt, which is also our national savings, is a problem. And yet their obsession for tax cuts has produced the debt. The only reason that the high debt hasn't produced a large amount of inflation is because the obsession has provided the money to the rich who have a greater propensity to save and invest in areas that have little or no impact on the economy of producing product for consumption. Areas like the stock market and the Treasury bills that are the debt.

If the money represented by the national debt was paid in wages instead of profits it would have produced huge amounts of inflation. As it is, it has only inflated the wealth of already wealthy.

Good point about the taxes validating the currency. Although it is probably not required. We have always had some form of money, even when it was nothing more than trust. This must be because we have always needed some form of money.

 

[SimpleDon]

Of course existing conditions are figured in.

But existing conditions are not the conditions created by the gods. They are conditions created by people, and they happen to be such that an enormous amount of wealth is funneled into very few hands.

A major economic flaw because all this wealth helps the individual very little, the reason these billionaires are giving it all away, yet it harms society as a whole a great deal.

You are right, but statistical work is just estimates of what will happen.

And we disagree on the last part.

Do elaborate, why do you think that the income inequality doesn't hurt helps the economy?

... double negative...

 

[coloradoatheist]

You are right, but statistical work is just estimates of what will happen.

And we disagree on the last part.

Do elaborate, why do you think that the income inequality doesn't hurt helps the economy?

... double negative...

I think that would be a seperate thread, but if the income is earned by people creating a product or service that others are willing to purchase, no problem.

 

[Jimmy Higgins]

Eliminate FICA, fund SS from the general fund.

The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA

http://www.huffingtonpost.com/warren-mosler/the-mmt-grand-bargain-rai_b_2268875.html

FICA is a notable tax. Repealing it, while increasing Social Security payments seems outrightly ludicrous from an economic POV.

 

[SimpleDon]

If we have to live with the fable that we are receiving the benefits that we paid taxes for and the supply side fable that we are providing progressive tax cuts to the wealthy to spread prosperity to all, not just the wealthy, then I suppose that this level of delusion dooms us to raising the cap on income to the payroll tax.

But if we govern from this level of fables, delusions and lies doesn't it make us all conservatives?

 

[dismal]

If we have to live with the fable that we are receiving the benefits that we paid taxes for and the supply side fable that we are providing progressive tax cuts to the wealthy to spread prosperity to all, not just the wealthy, then I suppose that this level of delusion dooms us to raising the cap on income to the payroll tax.

But if we govern from this level of fables, delusions and lies doesn't it make us all conservatives?

I dunno, in the much-dreamt of Scandinavian welfare state Utopiae they generally pay for their social benefits with taxes on the middle class.

 

[coloradoatheist]

If we have to live with the fable that we are receiving the benefits that we paid taxes for and the supply side fable that we are providing progressive tax cuts to the wealthy to spread prosperity to all, not just the wealthy, then I suppose that this level of delusion dooms us to raising the cap on income to the payroll tax.

But if we govern from this level of fables, delusions and lies doesn't it make us all conservatives?

The argument for and against Social Security hasn't been based on that argument.

 

[SimpleDon]

Do elaborate, why do you think that the income inequality doesn't hurt helps the economy?

... double negative...

I think that would be a seperate thread, but if the income is earned by people creating a product or service that others are willing to purchase, no problem.

It is your delusion. You should then start the thread.

But how does the money that you are happy to give to the rich, and that they are happy to receive, get from the Treasury bills and the stock market and all of the hedge funds into the economy of producing a product for people who are willing to purchase it?

 

[SimpleDon]

If we have to live with the fable that we are receiving the benefits that we paid taxes for and the supply side fable that we are providing progressive tax cuts to the wealthy to spread prosperity to all, not just the wealthy, then I suppose that this level of delusion dooms us to raising the cap on income to the payroll tax.

But if we govern from this level of fables, delusions and lies doesn't it make us all conservatives?

The argument for and against Social Security hasn't been based on that argument.

This is not an argument for or against Social Security. It is an argument about how to fund the fable of a dire shortage in the Social Security Trust Fund.

But if you have lost your desire not to derail the thread, and we all know that I have no such a problem, then what is your argument against Social Security?

 

[Horatio Parker]

Eliminate FICA, fund SS from the general fund.

The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA

http://www.huffingtonpost.com/warren-mosler/the-mmt-grand-bargain-rai_b_2268875.html

FICA is a notable tax. Repealing it, while increasing Social Security payments seems outrightly ludicrous from an economic POV.

Not ludicrous if you understand how money is created and what the deficit and national debt really are.

Did you read the story?

 

[Nice Squirrel]

If we have to live with the fable that we are receiving the benefits that we paid taxes for and the supply side fable that we are providing progressive tax cuts to the wealthy to spread prosperity to all, not just the wealthy, then I suppose that this level of delusion dooms us to raising the cap on income to the payroll tax.

But if we govern from this level of fables, delusions and lies doesn't it make us all conservatives?

I dunno, in the much-dreamt of Scandinavian welfare state Utopiae they generally pay for their social benefits with taxes on the middle class.

Well at least they have a middle class.

 

[Jimmy Higgins]

FICA is a notable tax. Repealing it, while increasing Social Security payments seems outrightly ludicrous from an economic POV.

Not ludicrous if you understand how money is created and what the deficit and national debt really are.

Did you read the story?

What story? All I saw were a list of claims noted as "facts". I didn't see anything there that spoke about the pretty large tax revenue drop from the elimination of the FICA tax.

Though, now that I've given it some thought, wouldn't elimination FICA lead to a tax hike for a lot of Americans? Thinking about it, if we were to pocket the FICA tax instead, that money would oddly enough be taxed at a higher rate for those with a marginal rate of 12.4% or greater.

 

[Horatio Parker]

Not ludicrous if you understand how money is created and what the deficit and national debt really are.

Did you read the story?

What story? All I saw were a list of claims noted as "facts". I didn't see anything there that spoke about the pretty large tax revenue drop from the elimination of the FICA tax.

Though, now that I've given it some thought, wouldn't elimination FICA lead to a tax hike for a lot of Americans? Thinking about it, if we were to pocket the FICA tax instead, that money would oddly enough be taxed at a higher rate for those with a marginal rate of 12.4% or greater.

Which claims do you have a problem with?

The first point is that the govt is not a household and doesn't have to "balance" its budget. The ability of any monetarily sovereign govt to create money is unlimited. (This isn't to say unlimited quantities should be created, the point is that there is no technical constraint.) Nothing has to be borrowed by the govt in order to spend more than it takes in. SS, therefore, doesn't have to be paid for by borrowing or taxation.