Bernie Sanders puts Social Security challenge to Hillary Clinton

[coloradoatheist]

So if the government has unlimited money, why have taxes? Just print the money when it needs to spend?

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?

The arguments against Social Security is that it's a stupidity tax, that people would get higher returns investing on their own, instead of funding companies and jobs it just transfers it. Those are some of the arguments against it.

 

[dismal]

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.

I can see no flaw in your statements. At least not if one inhabits the economics-free zone we call FRDB.

 

[KeepTalking]

So if the government has unlimited money, why have taxes? Just print the money when it needs to spend?

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?

The arguments against Social Security is that it's a stupidity tax, that people would get higher returns investing on their own, instead of funding companies and jobs it just transfers it. Those are some of the arguments against it.

That's a single argument.

Stupidity tax, indeed.

 

[Horatio Parker]

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.

I can see no flaw in your statements. At least not if one inhabits the economics-free zone we call FRDB.

So put on your tough guy real world hat and have at it.

 

[jonatha]

Since the marketing claims have never been true (you've always paid for the prior generation's benefits, and there's always been a wealth transfer effect for those at the lower end of the stick), is there a problem with ignoring them?

You are confusing the way the program is financed with the way the program functions.

Your benefits have always been a function of what you paid in.

But the benefits at the low end have been a higher percentage of what you paid in than the benefits at the high end.

 

[dismal]

I can see no flaw in your statements. At least not if one inhabits the economics-free zone we call FRDB.

So put on your tough guy real world hat and have at it.

Printing money causes inflation. Printing a lot of money causes a lot of inflation. Boom.

 

[Horatio Parker]

So put on your tough guy real world hat and have at it.

Printing money causes inflation. Printing a lot of money causes a lot of inflation. Boom.

Seems that if that were so, the 2% target would be easy to hit; print some money and bango. Yet it doesn't happen. Why?

 

[dismal]

You are confusing the way the program is financed with the way the program functions.

Your benefits have always been a function of what you paid in.

But the benefits at the low end have been a higher percentage of what you paid in than the benefits at the high end.

I think this is modestly true but I recall from researching this for another thread the redistributive effect of social security across income quintiles is rather small.

 

[coloradoatheist]

So if the government has unlimited money, why have taxes? Just print the money when it needs to spend?



The arguments against Social Security is that it's a stupidity tax, that people would get higher returns investing on their own, instead of funding companies and jobs it just transfers it. Those are some of the arguments against it.

That's a single argument.

Stupidity tax, indeed.

Not everyone who opposes SS uses it, but it boils down to it because people are stupid not to save for their retirement so the government has to do it.

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But the benefits at the low end have been a higher percentage of what you paid in than the benefits at the high end.

I think this is modestly true but I recall from researching this for another thread the redistributive effect of social security across income quintiles is rather small.

Are the effects of a higher payment offset with the shorter payment periods?

 

[dismal]

Printing money causes inflation. Printing a lot of money causes a lot of inflation. Boom.

Seems that if that were so, the 2% target would be easy to hit; print some money and bango. Yet it doesn't happen. Why?

I don't understand the question. Both printing money and inflation are things that do happen. Have happened.

Printing 2% more money does not necessarily cause 2% more inflation because there are other factors/noise in the economy. Not to mention, how much money there actually is at any given time is not exactly an easy thing to quantify. The government has multiple measures of the money supply.

 

[Horatio Parker]

Seems that if that were so, the 2% target would be easy to hit; print some money and bango. Yet it doesn't happen. Why?

I don't understand the question. Both printing money and inflation are things that do happen. Have happened.

Printing 2% more money does not necessarily cause 2% more inflation because there are other factors/noise in the economy. Not to mention, how much money there actually is at any given time is not exactly an easy thing to quantify. The government has multiple measures of the money supply.

So "printing money causes inflation" is not always true, according to your own post.

What are some of these other factors? Demand?

 

[arkirk]

I agree with Bernie. The Cap has never made sense to me and unlike Rightwing economics, SS really does lift all boats

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

So do you oppose social security too? You have chosen a good handle for yourself. Does virtually everything social harm you and make your outlook dismal?

 

[KeepTalking]

That's a single argument.

Stupidity tax, indeed.

Not everyone who opposes SS uses it, but it boils down to it because people are stupid not to save for their retirement so the government has to do it.

Well, it's a stupid argument, and that's not the worst of it. It is also an incredibly unethical argument. It amounts to "We shouldn't help out he elderly, and keep them from starving, suffering from preventable/curable medical issues, or losing their lifelong homes because they did something stupid when they were younger".

Of course, there are many reasons, other than stupidity, as to why people may not have sufficient savings for retirement, including not having earned enough money throughout their lives, having lost their savings due to medical issues or failure of investments, or any of a variety of other issues.

 

[dismal]

I don't understand the question. Both printing money and inflation are things that do happen. Have happened.

Printing 2% more money does not necessarily cause 2% more inflation because there are other factors/noise in the economy. Not to mention, how much money there actually is at any given time is not exactly an easy thing to quantify. The government has multiple measures of the money supply.

So "printing money causes inflation" is not always true, according to your own post.

What are some of these other factors? Demand?

Yes, I think it is always true. All other things being equal the more money you print, the more inflation you will have.

Just like if you throw a bucket of water into Lake Michigan the lake will have more water in it than if you didn't, even if you can't measure the effect.

The most basic monetary equation is:

MV = PQ

where

M= Money supply
V= Velocity of Money (i.e., the number of times per year money is spent)
P= Price level
Q = Quantity of goods and services

https://en.wikipedia.org/wiki/Equation_of_exchange

The equation is a tautology. So, if we assume that V and Q are either constant over time or independent variables then more M ultimately leads to higher P.

Also, with the analysis of the scores of hyperinflations and devaluations that have happened in the real world, reality suggests this relationship is real.

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It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

So do you oppose social security too? You have chosen a good handle for yourself. Does virtually everything social harm you and make your outlook dismal?

Since I didn't say that, and what I did say could not possibly be mistaken for that, the problem appears to be on your end.

 

[Jimmy Higgins]

That's a single argument.

Stupidity tax, indeed.

Not everyone who opposes SS uses it, but it boils down to it because people are stupid not to save for their retirement so the government has to do it.

I thought it burned down to... people can't guarantee they can save enough money to ensure they can eat 20 years into retirement and OMFG nursing homes cost how much?!

 

[Jimmy Higgins]

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?

Actually, I'm wondering whether FICA tax is actually a tax cut for people with marginal tax rates over 12.4%. Removing FICA could possibly result in a tax hike for people!

The first point is that the govt is not a household and doesn't have to "balance" its budget.

Doesn't it need to at least draw close enough to the lines?

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.

They certainly thought so when the program first started.

But more to my previous point, wouldn't eliminating the FICA tax be a tax hike? Especially in light that most people only pay 6.2%!

 

[arkirk]

We saved Social Security once already in 1986 when we increased the payroll tax to raise more money than was being paid out in benefits. Over the period from 1986 to today this tax increase, the largest single tax increase in history, has totalled over 2 trillion dollars more than was paid in benefits.

The money was used over this time in the general fund, paying for defense, paying for welfare, etc. and allowing tax cuts largely for the wealthy, because they pay most of the taxes. We are now told that this money can't be repaid by the general fund to pay for Social Security benefits, because only payroll taxes can be used to pay these benefits.

That all of the tax receipts from the excessive payroll taxes collected over the last thirty years or so went into the general fund to provide tax relief for the wealthy, but we can't expect the general fund to now fund Social Security, because it might require a tax increase on the wealthy to do so. That this would be intergenerational theft, because it would be a tax on today's wealthy to pay for tax cuts for yesterday's wealthy.

In essence the whole argument boils down to that the government can't save money.

If you accept this argument, and conservatives do accept it, then you can't accept the intergenerational theft of the Social Security payroll tax either. Because it is paying taxes today to pay today's benefits to people who paid much lower payroll taxes themselves. And you can't accept the existence of a Social Security Trust Fund to do more than to cover short term mismatches of tax collections every quarter versus benefits paid every month.

If Social Security is useful and a benefit for the nation as a whole, it should be paid for out of the general fund. If it is not useful and a benefit to the whole nation then it shouldn't be funded at all. The people who believe the latter should propose eliminating Social Security and let the chips fall where they may come election time.

It is really that simple.

The Social Security trust fund was violated by the warmongers and tax cutters for the rich. Then suddenly there appears a barrier to money moving in and out of the Social Security trust fund. I have long thought if the world needs the U.S. to fight wars, then make a war tax and a war fund and do not pay social funds into making war. Keep them separate because they are really not connected in any way. War industries should be taxed heavily. You don't find the warhawks demanding the taxes that would pay their bills because their bills are far too expensive to ever pay...and that is even after robbing Social Security and anything else they can rob. We always find the warmongers wanting to rob scrawny welfare and social security funds to pay war industries...and then just plain borrowing in a seemingly endless rotating Ponzi scheme with the working public the only victims. And all the while in this carnival of capitalist wonders, the rich (rentiers and war mongers) get richer and the poor (people who must work for a living) get poorer. We need a separation wall around SS funds so they are not stolen for purposes they were not intended to serve. And we also need everybody to pay their fair share of taxes. When none of these things are happening, it is no wonder our economy has become constipated and lethargic.

 

[Horatio Parker]

Which claims do you have a problem with?

Actually, I'm wondering whether FICA tax is actually a tax cut for people with marginal tax rates over 12.4%. Removing FICA could possibly result in a tax hike for people!

Removing a tax will cost people more tax? I don't get that...

Doesn't it need to at least draw close enough to the lines?

How close remains to be seen. We are currently underspending and there's no inflation in sight. There's surely room for an upward adjustment.

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.

They certainly thought so when the program first started.

It was created in a fixed exchange system. We left that in 1971.

But more to my previous point, wouldn't eliminating the FICA tax be a tax hike? Especially in light that most people only pay 6.2%!

I still don't know what you mean by this. Everyone pays payroll tax up to the cap.

 

[coloradoatheist]

It "makes sense" because your benefits are also capped and SS was/is marketed as a program where you pay for your own benefits, as opposed to straight up welfare, to gain middle class support.

So do you oppose social security too? You have chosen a good handle for yourself. Does virtually everything social harm you and make your outlook dismal?

But it's also the grasshopper/ant fable. When do we tell the grasshopper that hey you partied all summer and we don't want to punish the ants who prepared.

 

[arkirk]

Military industrial complex and all sorts of political abberations (Homeland Security, FBI, CIA, NSA, and at least another dozen three and four letter agencies devoted to spying and war) need to be curbed. We see efforts along these lines in countries all over the world but here in America we imagine we can squeeze the funding out of the poor who already have nothing...so the Fed just pumps the shortfall. Now at the end of this period of faux growth, the Fed raises its rates. Now that we are so indebted to them with their faux money we will never be able to bail our country out without...my god!...dare I say it?....
TAXING THE RICH.
Enough of this bullshit about how billionaires "earned their money." Enough of this bullshit that only billionaires can have good ideas. Enough of this bullshit that they are what society needs most.